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Thursday, 19 February 1987
Page: 333

Mr CARLTON(12.10) —The Opposition does not raise any objection to this matter in that it seems to bring the form of the financial statements into line with the Budget. I just draw the attention of the Minister for Community Services and Minister Assisting the Treasurer (Mr Hurford) to something that is slightly odd. Five changes are suggested to the format. But one of those has already been made in the statement that was issued on 22 January. In other words, before the House had approved of the new format, the Government issued the statement partly in the new format. The particular item to which I refer is that on fringe benefits tax. I understand a certain amount of sensitivity on the Government's part about the fringe benefits tax because the statement which was issued on 22 January seems to indicate that the Government could collect more than twice its forecast revenue from the fringe benefits tax. The proposed change of format states that a new item, fringe benefits tax, is to be inserted above sales tax. We are being asked to approve that change in the format. When I looked at the statement put forward by the Minister for Finance, Senator Walsh, on 22 January, I noticed that fringe benefits tax is already included as a separate item-this is before we have approved of its being so-and it indicates that $122m has been collected in the six months to 31 December as against a Budget forecast for the whole year of $325m.

The extraordinary thing about that is that there are three payments of fringe benefits tax in the course of the financial year. That $122m ought really to relate to only half of one of them, because the period for lodgment of fringe benefits tax for tax agents was extended to 31 December for half their clients. It would be impossible for the Australian Taxation Office to process returns lodged on 31 December and for them to be included in a 31 December total. Since most of the returns that the taxation agents would have determined to lodge in the second lodgment would have been for the larger firms, it is quite possible that the $122m refers to less than half of one payment of fringe benefits tax. If that is the case-let us assume that it was half the amount-that means that the full first payment would be about $244m, which is getting up to two-thirds of the amount budgeted for the whole year. Indeed, if that pattern were maintained for the remainder of the year, the Government would collect $732m in fringe benefits tax, compared with $325m.

It is no wonder that the rate of bankruptcies has gone up by 35 per cent this year compared with last year if, in addition to meeting interest payments of 20 per cent on borrowings, and additional taxes in various forms, businesses and farmers are having to pay an additional $732m in fringe benefits tax this year when even the Government said that they would be paying only $325m. I ask the Minister to explain exactly why the fringe benefits tax item was separated before the House had given approval for that to be done. Also, in the course of his answer, could he explain what that figure of $122m actually means? Does it represent about half of the first of the three payments for the year, in which case the total to be received from the fringe benefits tax would be $700m-odd as opposed to the forecast in the Budget of $325m? If that is the case, it is an absolute disgrace.

Another matter in the figures relates to public debt interest. I note that the Budget estimate for 1986-87 was $7.5 billion in public debt interest. That is quite extraordinary as an item. In fact, it is more than we spend even on defence; it is more than we spend on health and it is more than we spend on education. It means that every man, woman and child in Australia is paying about $470 this year in interest alone on Commonwealth borrowings. If we look at the six months to 31 December, we see that, of that $7.5 billion, $4.1 billion has already been paid. The notes accompanying the honourable senator's statement indicate that, because of increases in interest rates which were not foreseen in the Budget, the amount is well over target. In other words, there is a blowout in this horribly large item of public debt interest.

Those are the two matters that I specifically wish to draw attention to, but I certainly would like from the Minister some explanation as to why, of the five items of change, one change has actually been implemented before the House has given its approval.