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Thursday, 6 October 1983
Page: 1427


Mr BRAITHWAITE(11.13) — The time limit of 10 minutes when speaking to these estimates restricts me to highlighting just one or two issues. I will commence by referring to Budget Paper No. 5 which sets out the average employment over all Commonwealth departments. The interesting factor is that in spite of a fairly drastic cut-back in armed service average employment the figure has risen from 217,507 in 1982-83 to 223, 964 during the current year, an increase of 6,457. Omitting the decrease in numbers in the armed services, which will be in excess of 1,000, the actual increase in numbers in the Australian Public Service is 7,501. The further interesting factor is that these are only average figures. At the end of the year-that is, by June 1984-the increase will be greater still and Public Service numbers will probably stand at record figures.

An assessment of where the major increases in staffing will occur indicates where the economic thrust of this Australian Labor Party Government will be directed. The Departments affected are Social Security and Health. In fact, Social Security has an increase in staff of 2,446. In the Department of the Treasury, particularly the Australian Taxation Office, there is an increase of 1 ,109 in staff. Therefore, the economic thrust is towards more centralised control, certainly higher taxes with the numbers of staff who will be employed in the Taxation Office and a greater number of unemployed to carry the burden of the greater interventionist policies of this Government.

The thrust in taxation is twofold. In spite of an electoral understanding to rely less on indirect taxation, we find a substantial increase by this Government in that area. For instance, there is a 14 per cent increase in sales tax, a 31.7 per cent increase in excise duty on petrol, tobacco and beer. This is assuming the Labor Party believes that these commodities are not necessities of life. But there is a 575.7 per cent increase in bank account debit tax and an overall increase of $1.821 billion from $12.76 billion in indirect taxation in 1982-83, or an overall increase of 14 per cent. This does not include in any shape or form the effects of the Medicare levy, which will be an indirect tax.

Of course, this is only part of the story. The increase in Taxation Office staff, the capital cost of computerisation and other ongoing costs are made necessary to a large extent because of Labor's introduction of the 10 per cent withholding tax, a measure not really closely related to the measure mentioned by the previous Treasurer, the honourable member for Bennelong (Mr Howard), in the 1982 Budget. In spite of changes to this measure that were mentioned in this place as late as yesterday, the measure is seen as government and bureaucratic intervention in the market-place in the most disruptive way possible- intervention in that, in spite of the Government's massive cost of collection, it will still involve private businesses, small and large, in the front line collection of the taxation at very heavy expense. In fact, since the tax's introduction I have heard that some businesses will be employing separate staff and providing appropriate programs for the collection, at the businesses' cost, of a Commonwealth tax.

The tax has been described as an initiative for the collection from tax evaders . Nobody is at loggerheads with that. Really, the honest taxpayer has been the target of the Government's wrath because, by the Government exempting contracts under $10,000, the tax evasion industry has not been influenced except to the extent of the addition of 16,500 registrations for taxation, additions which may have been the result of some normal and legitimate registrations. That is the amount that was claimed by the Minister for Housing and Construction (Mr Hurford ) in the chamber the other day.

I hope that, in the computerisation of the Taxation Office and in the arrangement of this extra staff, the initial intention of this measure, when included in the Budget Speech of 1982, will be achieved. That intention was to mop up on the cash evasion industry. The question I ask the Treasurer (Mr Keating), who is in charge of the Taxation Office, is: Will this computerisation , with the employment of the extra staff, be sufficient to record the earnings- particularly in rents, interest and dividends, wages and contracts-in a manner easily retrievable and able to be taxed at the appropriate point of delivery?

The Budget figures disclose the broken Labor promises to decrease direct taxation and not to expand indirect taxation. In fact, the Budget changes completely Labor's initial response to the economic ills of the nation as it saw them prior to the 5 March election. As a direct result of the Budget, inflation will increase as the indirect charges feed into the consumer index prices. The extent of the deficit at $8.3 billion will certainly, in normal circumstances, have this effect as the Commonwealth goes into the loan market.

One must also be careful in examining the effects of the Medicare levy of $390m for this year in artificially reducing the consumer price index to 7.56 per cent , the Government's estimate. It acknowledges that this artificial reduction will amount to 1.5 per cent in 1983-84 and a further 1.5 per cent in the following year. This should be firmly understood by those who wish to have a fuller understanding of the economic policies of the Government. One must ask again why a Medicare levy is any less a charge against earnings than an excise tax. I have objected before and will continue to object to this form of taxation affecting the determination of the CPI. For the ordinary man in the street a direct taxation charge such as the Medicare levy, which takes the place of a medical insurance premium, makes no difference to his net pay packet because normal medical insurance premiums would have been deducted in any case. This artificial reduction will have an effect on wages claims and indexation of pensions. All will be caught short because of a shortfall in the CPI, which, as I have said, has been artificially reduced, on the Government's estimation, to 7.5 per cent.

I want to look particularly at how local government will be caught in the double squeeze. The Labor Government promised local government that its share of personal income tax collections would be no less than the real value of the previous year's share. Already we have seen that promise broken, in that 8.2 per cent was applied instead of 11.2 per cent. But what about the future? Local government will face an increased labour cost following the 4.3 per cent increase granted at the last national wage case hearing. That will add substantially to costs. I estimate that increased fuel excise, higher sales tax on fuels and lubricants and rising costs of road construction and maintenance will cause local government to suffer no less than a 10 per cent increase in costs next year. Therefore, the real increase in local government's share of personal income tax collections for this year will be less than the estimated consumer price index increase of 7.5 per cent. There will be a decrease in real values in the amount going to local government because of actions which the Government has taken in this year's Budget on top of the 2.5 per cent decrease in real values following the 3 per cent reduction in the previous year. Apart from this we have also to look at the situation of the unemployed and pensioners , who rely on a proper indexation of their benefits and pensions so that they keep their real values.

Another aspect of the Budget is the payment of $300m to the community employment program. At all times I want it understood that I have encouraged the authorities in my area to look at this scheme. But let us just look at the facts . During the next six months 70,000 people will be taken from the dole queues of this country. They will then have to rejoin those queues. One might say that there will be a temporary and artificial reduction in unemployment figures. This contrasts with the policy that the Government could have adopted and maintained in providing permanent employment in the construction of capital projects.

The decision not to proceed with the Alice Springs to Darwin railway line, for instance, has had the immediate effect of reducing employment opportunities in construction. It has also had a secondary effect on all our steel industries and subsidiary suppliers which would have needed to employ additional Australians to supply that project. In addition to the effective cancellation of the project- the Northern Territory will not have the wherewithal to do anything about it by itself-we have seen the toning down of the international airport at Brisbane. We will miss out on more permanent job opportunities there. The Government has said that the Northern Territory should be able to afford 40 per cent of the cost of the Alice Springs-Darwin railway line. It cannot. It requires the assistance of the Commonwealth if it is to achieve proper statehood status.


The CHAIRMAN —Order! The honourable member's time has expired.