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Tuesday, 8 November 1983
Page: 2395


Mrs CHILD(5.07) —Before I remark on this group of income tax Bills I wish to comment on a couple of things the Deputy Leader of the Opposition (Mr Howard) said in regard to our education policy. I think he is unaware that we obtained a mandate from the people of this country to provide aid in case of need. I do not think even the Opposition would argue about this. We went to the people in 1972, 1975, 1977, 1980 and 1983. In each case we had an education policy of aid in cases of need-the greatest help to the schools in the greatest need. I am sure not even members of the Opposition would argue that the 41 asset -rich schools from which we have taken some money will be hurt, but during the seven years in which the Liberal-National Party coalition was in government those middle schools and certainly those parochial schools took one hell of a hiding.

In supporting the Bills before the House I particularly congratulate the Treasurer (Mr Keating) on that portion of the legislation relating to unemployment, sickness and special beneficiaries, and the exemption from income tax. I point out to the House in doing this that neither the Leader of the Opposition (Mr Peacock) nor the Deputy Leader of the Opposition took the slightest interest in the fact that the burden of tax was to be lifted from a very heavily disadvantaged group in our community. I also congratulate the Treasurer on accepting the details from the report of the Senate Standing Committee on Finance and Government Operations to modify the prescribed payments system. Along with many of my colleagues I took quite a battering in my office when the prescribed payments system was first mooted by the Government. A similar type of system was also mooted by the previous Government.

I had many calls from my own constituents and I also had many calls from people in neighbouring Liberal electorates-there are four left in Melbourne-who had phoned their own Liberal member and had been kindly advised to ring me. I thank those honourable members for their courtesy because it gave me the opportunity to allay some of the anxiety felt by their constituents. Mostly, their unease sprang from too little knowledge of what was planned, and perhaps from the speed with which it had been planned. I offer my appreciation to the Minister for Housing and Construction and Minister Assisting the Treasurer (Mr Hurford) and his staff for the patience they showed to the many individual inquiries on behalf of constituents. Because of this service I was able to satisfy most of the queries on prescribed payments except the very valid one that my colleague the honourable member for Hunter (Mr Robert Brown) had pointed out about the enormous amount of paper work the new system would involve the businesses in.

The modifications in this legislation will be welcome. They will not produce evasion of the tax system, nor will they reduce the revenue. These things are highly important to a government that has been beleaguered by the enormous deficit it was bequeathed by the previous Government. Those payees with good tax records are catered for. Payees may now lodge a deduction form at any time during the month preceding the month of payment. Provided the payer assumes the responsibility of completing the form on the payee's behalf, the payee will not need to prepare and furnish more than an annual deduction form to a payee. I am confident these amendments will be welcomed by those involved in the prescribed payments system. In fact I have had quite a number of phone calls on that issue. As both the Treasurer and the Minister Assisting the Treasurer have stated, honest taxpayers have nothing to fear and the public is entitled to a government that will ensure that those who have been evading tax will honour their obligations.

The prescribed payments system has been introduced primarily as a measure against tax evasion. The industries initially covered-others will be covered later-are those where substantial non-reporting of income is known to occur. It should be remembered that the prescribed payments system is not a new tax but rather a new way of paying tax. Perhaps it should be looked upon as a way of bringing those taxpayers in line with pay-as-you-earn taxpayers. I am pleased that the legislation eliminates the concession of a tax deduction for the thermal insulation of a first home. I always thought that was a foolish thing to be introduced-it was probably introduced at some election time-and that it was quite inequitable. The savings are quite small but very welcome, amounting to about $7m in a full year. The legislation also provides that the bonus of $500 paid to handicapped people as an incentive for more of them to move to full time paid employment or self-employment for a continuous period of 12 months will be tax free. I am sure this move will be endorsed by all members of the House.

Much as I endorse the moves I have already mentioned, there is one matter dealt with in the legislation in which I have great personal interest. It relates to the move to exempt from taxation pensions paid to unemployment, sickness and special beneficiaries with children. When paid to age or widow pensioners with children, these pensions are already exempt. It is matter of simple justice and equity that uniformity of tax treatment to pensioners be observed. I believe it to have been an oversight that this amendment has not been introduced by previous governments. I refer also to the subsidy for rent, lodging or board which will also be exempt from tax for unemployment, special or sickness beneficiaries. Again, this is in line with other pensioners, although once again it was not mentioned by previous Opposition speakers, and is a tremendous leap forward for pensioners.

It was a strange anomaly that married couples on sickness benefit did not pay tax because they did not cross the tax threshold but, where couples received pensions paid on behalf of their children, they crossed the tax threshold and were required to pay tax on the entire pension. I am sure I am not the only member of this House who has been faced with a person on sickness benefit bringing in a tax assessment of several hundred dollars and being almost ill with the worry of how to pay up. It happens time and again and is especially difficult if the constituents happen to be migrants whose English is not too good, who do not understand the taxation system and who do not really understand why, if the income they are receiving is below the poverty level, they should be called upon to pay tax upon it simply because they have children. I have found the Australian Taxation Office in these cases to be very understanding. Single unemployment, sickness and special beneficiaries with dependent children have not been forgotten. From 1 May 1984 they will be able to receive the mother's or guardian's allowance-again tax free-which is already paid to single pensioners.

I am also delighted with the introduction of the spouse carer's pension. When a woman cares for an invalid husband she receives a pension because she is the wife of an age or invalid pensioner. Now the role can be reversed if necessary and a husband can receive a service or invalid pension while he provides care and attention for an invalid wife. This again eliminates an anomaly in our compassion to those in need. The carer's pension will not be subject to tax unless the man or woman is of pensionable age.

Altogether, the legislation contains amendments to the Income Tax Assessment Act in 15 areas and in most of these areas stresses the Government's desire to assist those in the community who are among the most disadvantaged. The legislation springs from the first Keating Budget, a Budget of both compassion and common sense, and the contents of it will be warmly welcomed by the entire community. The first Keating Budget demonstrates clearly that a Labor Government will not take risks with Australia's economic future. I touch on this, Mr Deputy Speaker, because you were not in the chair when the Leader of the Opposition spoke about Australia's economic future and private enterprise. I am not really straying too far from the legislation.

The Budget is a responsible attempt to provide the basis for strong economic growth while ensuring social justice for the disadvantaged. It is a Budget of both compassion and common sense. The tragic economic legacy bequeathed to this Government by seven years of Liberal mismanagement made this Budget an extraordinarily difficult one to frame. It was necessary to provide a substantial stimulus to economic growth without running the risk of stimulating inflation and interest rates at the same time. It was necessary to boost the public sector as a means of taking up the slack in the economy without simultaneously crowding out the private sector. The Government recognises that a sustained economic recovery is heavily dependent on the health of the private sector which provides employment for almost three-quarters of the work force. Accordingly, we will pursue economic policies which are designed to create the necessary precondition for a strong growth in private sector profitability. However, we will not allow ourselves to be seduced by the siren calls of the right wing economic quacks who have exerted so much influence on the more gullible members opposite. We now have a Government with the necessary fortitude to face up squarely to the problems it faces.

The principle of legitimate tax collection is fundamental to the role of responsible government. This Government intends to collect that tax which is covered by this legislation. We intended to collect it from those who have been evading it. I feel sure that, after the first initial shock of the fact that they are now called upon to pay their legitimate tax has worn off, we will not find quite so many objections from those who have joined the prescribed payments tax system. After all, PAYE taxpayers pay weekly. These people will pay the same but whereas in the past they paid tax a year later and also paid provisional tax , they will find it a great help not to be called on to pay provisional tax at the end of the year. The Government has shown a responsible attitude in most of these amendments and I am sorry that members on the opposite side did not care to comment on any of those portions of the legislation which deal with help for the disadvantaged and those who are suffering economically within the community.