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Tuesday, 8 November 1983
Page: 2410

Mr CONNOLLY(8.02) —It is always interesting to hear Government members talk about a land of equity and justice, especially after they have just introduced a package of legislation which had its genesis in the statement of May this year and the subsequent Budget, the first Budget of the Hawke Government. It is not inappropriate to make a judgment of the veracity and effectiveness of Government legislation on the basis of the commitment which it made to the Australian people. What better document could I draw on than the policy speech made by the then Leader of the Opposition on 16 February 1983 in the excellent venue of the Sydney Opera House theatre? On pages 12 and 13 of this statement he made a number of comments which are worth reading into Hansard . He said:

Our government's total income tax package . . . key elements . . . include immediate reductions in income tax for almost 6 million Australian taxpayers, with the greatest tax cuts going to those on the lowest incomes who have suffered most under Mr Fraser's policies. A taxpayer without dependants earning $225 a week, for example, will get a tax cut of $4.76 a week.

It is a sad reflection on the reality of the Government's activities that the Australian Council of Trade Unions calculated that this financial year alone some 200,000 people will be placed in higher tax brackets as a result of policies announced by the Governmnent in May and in the last Budget. The commitment which the then Leader of the Opposition made to the Australian people meant that anyone whose income was $60,000 or less could expect to receive ' immediately'-that was his word-a reduction in direct taxation. We wait and we wait even longer for those reductions to occur. The fact is that the first Budget brought down by the Hawke Government was totally bereft of any reductions in taxation whatsoever. On the contrary, taxation-indirect taxation in particular-actually increased. The major points mentioned on that date when the policy speech was made contained other interesting elements. It was said that the Labor Party would introduce:

a new six step tax scale to restore the progressive nature of the tax system.

All we can say is: 'Not yet'. There was to be:

a lift in the tax threshold to $5,000 which will free tens of thousands of low income earners from all tax.

Again all we can say is: 'Not yet'. The then Leader of the Opposition said that there would be a lift in the tax threshold for pensioners from $4,650 to $5,893. Again, not yet. He said that there would be:

increases in the spouse rebate and sole parent rebate, resulting in additional tax cuts of $2 a week to families and increases in zone allowances by 25 per cent for taxpayers in remote areas.

We know what happened. There was no increase of 25 per cent for any taxpayers in the remote areas of Australia. That is yet again a promise flagrantly broken by the Hawke Government. He went on to suggest that the Government would introduce a major new concession for the small business community, which is necessary in these very difficult and harsh economic times. But again the Budget and the May statement said nothing about it. He also said:

We shall legislate to allow up to 100 per cent retention of profits by small business where these funds are to be used for genuine business operations.

Again we wait in hope. Finally, he said:

There will be no new capital gains tax.

All we can say of that is we have to wait and see. There is talk of a wealth inquiry. Action has already been taken to redefine certain sections of the Income Tax Assessment Act. But one thing is clear: In all the provisions of taxation reform introduced tonight in these Bills there is not one suggestion that the Labor Party has learned that, until we encourage Australian people to make money and to spend it, they will fail if they believe that by constantly increasing taxation, whatever the purposes of expenditure, we will be able to build a better society built on the expectation that at least some governments live by their commitments and their promises.

I will refer specifically to a number of items in this package of Bills. I start with the abolition from 1 July 1983 of the rebate of up to $1,000 of dividend income for individual taxpayers. That proposal was announced in the May economic statement. No commitment was made in the Labor Party's manifesto or in the policy speech. Along with a whole range of other tax provisions in these Bills, the abolition of the rebate was introduced without the support of the Australian people and certainly without any clear mandate from them. The key question about the proposal to abolish the rebate of $1,000 of dividend income is that less than 6 per cent of the Australian population own equity in the companies and corporations which are the very substance, the very basis, of the economic strength of this community. I would have thought it was time for a government which states that it believes in the need to let everybody have a ' fair go' at least to realise that, unless the capital base of the Australian community is utilised and fortified by encouraging individuals to take a share of the responsibilities for productive growth instead of simply talking continually, as the Labor Party does, about the rights of people without ever talking about their responsibilities to the community, the type of society which the honourable member for Lilley (Mrs Darling) spoke of is not likely to be seen in our time.

It is absurd that only 6 per cent of Australians own equity in Australia. That is an utterly unacceptable position when one compares that figure with the United States, the United Kingdom or any other similar economic system. It simply demonstrates that the division between capital and labour is not just something we have inherited from Great Britain. Up to the time that deduction was introduced by my colleague the honourable member for Bennelong (Mr Howard) when he was the Treasurer, not enough had been done in this country to encourage individuals to feel that they had something to give to the corporate growth of Australia while at the same time having the right to expect a just and fair return from that investment. Prior to that we have built into the system the division between capital and labour.

I deeply regret that the Government has decided to remove this tax rebate. The amount of money involved was not vast, but it demonstrated a clear decision by the Federal Parliament and the Federal Government of the day that individual Australians must be encouraged to have equity in the development of this nation. We have heard so often in the past from members of the present Government about the horrors of foreign investment. The simple fact is this: If the Australian people are not prepared to make investments in the development of this nation, we have nowhere to go other than to seek foreign equity or foreign loan investment. But again, the Government had its chance and threw it away. The Government had the opportunity to demonstrate that it wanted to build a society in which all Australians had the responsibilities of making a contribution and was prepared to assist them to do so. But no, it decided to go in exactly the opposite direction.

Some remarks have also been made this evening about the decision to remove from the reserve forces the tax free income which they had previously received. I have spoken at some length on this subject on a previous occasion. I emphasise to this House, to the Minister for Communications (Mr Duffy) and to other members of the Government that it is not good enough to be spending hundreds of thousands of dollars a year, as the Government is still doing, in programs to encourage young men and women of this country to give of their time in the service of Australia as members of the Reserve and at the same time expect them to do it virtually for nothing. It is not just a question of dollars and cents. These people make a physical commitment at great loss to their families because they are not home on weekends as they are out serving this nation. This is not something that we can simply relate to mere dollars and cents. As I said to the honourable member for Lilley when she was speaking, what value do we place on the life of an individual? It is beyond comprehension. There is no true value in monetary terms. The Government has encouraged individuals to serve this nation in the Reserves, to give something of themselves because they believe in the future of Australia, and by the small, miserable decision as it has introduced in this legislation, the Government is taking from them yet again.

Most of the provisions which we are debating tonight demonstrate yet again the small, niggardly attitude of a government which was elected on the belief of so many Australians that it had a grand design. All we have seen is this small, pusillanimous attitude that it has adopted, that people who give of their time and give of their resources are to be taxed, taxed, taxed. 'Tax' is a simple three letter word which the Government knows best of all. This attitude is not peculiar to this Government. Socialist governments in this country from time immemorial have found it much easier to apply new taxes than to look for ways of running a more efficient ship of state and of generating income. It is the wealth of this country which we have to look to. The very social problems that the honourable member for Lilley and others have talked about so eloquently cannot be overcome unless we can create in this community a better financial base, a better capacity to create growth than we have had over recent years.

I wish finally to comment on certain other matters. I agree with the Government 's proposal in relation to the introduction of the spouse carers pension. I think that is an excellent proposal and it certainly has my support. For too long we have seen a situation in Australia in which husbands and wives, often in old age, have been broken apart and sent off to homes or hospitals because the other member of the marriage was unable to support them. I believe that this is not only a sensible proposal in economic terms but also a humanitarian one. Certainly, the Opposition supports that approach. I refer now to the question of expenditure thresholds. This is a matter upon which my colleague the Deputy Leader of the Opposition (Mr Howard) spoke most eloquently this evening. The proposal to make no changes in the education concessional rebate, which still remains at $250 per child, is unacceptable to the Opposition. To that I add others. The concessional rebate for land rates, for example, still remains at $ 300. I ask any member of the Government to give me the name of one local government in Australia which allows ratepayers to pay land rates of only some $ 300. The average land rates in this country are at least twice that and in many parts of Australia the rates are in excess of $1,000 a year.

I refer also to the allowance of a miserable $250 for self-education expenses. No change has been made to that. Again, no changes have been made in regard to other questions such as premiums for superannuation funds and so forth, the premium remains at $1,200. Surely the essence of the case I was presenting earlier cannot more eloquently be demonstrated than by the niggardly approach that the Government has taken on these matters. Again, the Government wants to take from people but is not prepared to give them the incentive to improve themselves. It is not prepared through its taxation system, which is the best mechanism which any Federal government has had at its disposal, to enable the sinews of development in this nation to move, to create jobs for people at a time of massive unemployment. I emphasise that come February of next year when this nation will be looking at an unemployment rate in excess of 840,000 people, when virtually half a young generation will be in danger of being lost because they will feel society has given them so little, if anything at all, the Government will not be able just to blame the Fraser Government. The realities will be on the record. The Government will have had its chance. It will have had a Budget and a May statement in which it could have introduced effective programs, and it failed. I only hope that when the next Budget is introduced at least there will be some progress in what has been to my mind a most unsatisfactory set of tax provisions introduced this evening.

Question put:

That the words proposed to be omitted (Mr Peacock's amendment) stand part of the question.