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Tuesday, 8 November 1977
Page: 3124


Mr Scholes asked the Minister for Primary Industry, upon notice on 14 September 1977:

(1)   Based on current official estimates, how many beef producers will have taxable incomes between $3,500 and 6,000 during 1977-78.

(2)   Will the marginal tax rate on additional, Le. non-farm income for these beef growers increase from 27 cents in the dollar to 32 cents in the dollar under the tax scales to apply from 1 February 1978.


Mr Sinclair - The answer to the honourable member's question is as follows:

(   1 ) Estimates of the levels of taxable incomes of beef producers in 1977-78 are not available. The closest approximations are measures of net cash incomes estimated from recent survey of the Australian grazing industry undertaken by the Bureau of Agricultural Economics. Latest BAE figures indicate that in 1977-78 some 14,000 specialist beef producers win have net cash incomes of between zero and $5,000. A further 5,600 beef specialists will have net cash incomes between $5,000 and $ 10,000.

(2)   Under the tax scales to apply from 1 February 1978 the standard rate of tax payable by taxpayers generally is to be 32c in the dollar and is to apply to the part of a taxpayer's taxable income between $3,750 and $16,000. Under the 1977-78 pre-Budget scale the rate of tax on the part of a taxpayer's taxable income between $2,506 and $6,266 was 27 per cent. The increase in the marginal rate of tax on the part of the taxable income between $3,750 and $6,266 will be more than off-set by the substitution of a nil rate of tax on the first $3,750 of taxable income for the existing rates of 20 per cent and 27 per cent and the general concessional rebate of $676 as indexed for 1977-78.

For primary producers (including beef producers) who are., subject to averaging, the new rates of tax including the nil rate on the first $3,750 are to apply in calculating the average rate of tax appropriate to the average income. The increase in the marginal rate applicable to the part of the average income between $3,750 and $6,266 will be more than off-set by the application of the nil rate to the first $3,750 of the average income. Where a primary producer's taxable income is greater than his average income this will confer a substantial benefit as under pre-Budget arrangements the general concessional rebate was not taken into account in the average rate calculation but was deducted only after the average rate was applied to the taxable income. A primary producer whose taxable income is less than his average income will be taxed at ordinary rates of tax.







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