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Friday, 20 February 1987
Page: 464

Mr GORMAN —I ask the Treasurer whether he has seen or received any refutation or denial by the Leader of the Opposition of the costing of the Opposition's $14 billion worth of tax commitments documented by him yesterday in Question Time. What effect would the implementation of commitments of this order have on equity in the tax system and more generally on the macroeconomy?

Madam SPEAKER —Order! The first part of the question is out of order; the second part of the question is in order.

Mr Spender —On a point of order, Madam Speaker: Is the first part of the question ruled out of order?

Madam SPEAKER —Yes.

Mr Spender —Thank you, Madam Speaker. We seem to be getting on the same wavelength.

Mr KEATING —The implementation of commitments of this order, that is, of $14 billion-which commitments, by the way, were not refuted by the Leader of the Opposition after the documentation I gave to the Opposition yesterday despite the blackguarding he gave me the day before-would, of course, have a disastrous effect upon the real economy. To have an addition to the Budget deficit of that order of magnitude would have a very accelerating effect upon demand; it would have the effect of sucking imports into the economy and exacerbating the current account deficit very rapidly; and with it we would see an enormous deterioration in our current account deficit, and hence very quickly a deterioration, through the exchange markets, in exchange rates and interest rates. I have said, and I will repeat, that such opportunist prescriptions would only drive Australia into a recession, rapidly, as the financial markets lift the interest rates in response to what they would see to be the unavoidable weakening of the exchange rate in the face of that kind of deficit outcome.

In terms of equity in the tax system, it is almost beyond belief that the Leader of the Opposition-who masqueraded and campaigned as an economic dry, a rationalist, in the Australian political and economic debate and won his office on that platform-should not only propose that there should be addition to the lost revenue and hence the deficit of this order of magnitude, but at the same time should seek to strike blows against the equity of the tax changes which the Government has itself implemented. For instance, he has said that there should be a repeal of the fringe benefits tax on the basis that income taken other than as cash should continue to escape the tax net. This Government stood up and taxed it for the first time ever, and for the Leader of the Opposition to say that he would repeal that tax so that people would no longer bear tax upon income other than cash is, in terms of tax equity, obscene.

In terms of entertainment, there was the phoney claim that in some way legitimate business expenses ought to be allowed, when the Leader of the Opposition knows that there could be no basis for substantiation by the Taxation Commissioner sitting at every luncheon table in the country to ascertain whether a lunch, or no lunch, or what sort of lunch, was in fact a business lunch. With the growth of this provision there was nothing to do other than to disallow it from the tax system. This is another blow against equity on the part of the Leader of the Opposition who wishes, for the most shabby and paltry reasons, to dismantle it.

On capital gains the Leader of the Opposition says that all gains in terms of value of stock held in the stock exchanges of this country, on the stock market, should go as untaxed income in the hands of the stock owners, while he says that low income earners should have their wages frozen. This is the equity and decency of the supposed Opposition. On the assets test, he says that what we should have--

Mr Blunt —Madam Speaker, I take a point of order. I remind you that questions may be directed to a Minister in relation to his portfolio or to matters of public administration that are of his concern. I refer you, Madam Speaker, to a point of order that you took on 9 September 1981 in which you quoted to the then Speaker. I quote from Hansard:

Mrs Child-I rise on a point of order, Mr Speaker. I draw your attention to the Hansard of 27 August. You ruled:

The Minister will answer the question and not engage in irrelevancies, such as contrasting the Government and the Labor Party.

I ask you, Madam Speaker, whether you would give the same ruling that Speaker Snedden gave to you at that time.

Madam SPEAKER —I point out that the honourable member for Greenway has asked a question about the implications of certain proposed tax cuts. The Treasurer is being quite relevant to the question.

Mr KEATING —We hear the Leader of the Opposition say that we should cut down on money being paid through the transfer system of the Commonwealth to certain categories of social security recipients, but when we say that we will test their assets beside their means he says: `No, we will repeal the assets test'.

Mr Nehl —And we will repeal it!

Madam SPEAKER —Order!

Mr KEATING —This is not only an indication of the fact that there is no general understanding of the general laxity in fiscal terms of that sort of policy, but in terms of equity, in terms of tax decency, it is also an indication of the sheer indecency of these things from a party and a leader which espouses the cause of rationality and dry economics. Underpinning these tax losses to the revenue by the repeal of all of these laws was the consumption tax proposal of the Opposition, netting it $3.8 billion. Now that has been vetoed by the National Party, which has sworn allegiance to a leader outside this Parliament. Now we have a leader of the National Party-that effective leader of the National Party who does not reside in this Parliament--

Mr Spender —I raise--

Madam SPEAKER —Order! I ask the honourable member for North Sydney not to move straight to the microphone and start speaking. It is normal to allow me to get the Treasurer seated and then call the next speaker.

Mr Spender —Madam Speaker, my point of order is one I have made before. The Treasurer has been asked a particular question and he is entitled to answer relevantly that question. He is not entitled to go off and start talking about the politics-internal, external, or whatever-of any other party or about what is taking place outside this House. You know that, Madam Speaker, and everybody here knows that.

Madam SPEAKER —Order! The first part of the question was ruled out of order. The Treasurer is not answering the first part of the question; he is relevant to the second part of the question.

Mr KEATING —The leader to whom the National Party has now sworn allegiance is in fact vetoing the current leadership of the Liberal Party. As surely as Sir John McEwen vetoed Sir William McMahon, Sir Joh Bjelke-Petersen is vetoing John Howard. We have no coalition able to deliver any fiscal policy now. What we have as a leader of the National Party is a political carcass with a coat and tie on. There is no basis on which the coalition can deliver on any fiscal policy, on any tax policy, other than what we have in the form of a former dry who has abandoned dry economics and a pretender who has never embraced them. What we have got is a $14 billion prospective addition to the deficit.

Mr Cadman —I raise a point of order, Madam Speaker. I draw your attention to standing order 85 which indicates that it is within your capacity to ask a speaker to curtail his remarks because of tedious repetition. For two days we have had this diatribe from a bloke that has sent more businesses broke than any other--

Madam SPEAKER —Order! The Treasurer would have been finished if it had not been for so many interruptions.

Mr KEATING —Madam Speaker--

Madam SPEAKER —The Treasurer will resume his seat.

Mr Hand —On a point of order, Madam Speaker. Would you guide me on how we should approach this? I hear there are rumours circulating, and I ask you to investigate these rumours--

Opposition members interjecting--

Madam SPEAKER —Order! I cannot hear one word the honourable member is saying. There would be no necessity for the honourable member to speak up if honourable members heeded the Chair. Many points of order have been raised during this Question Time. I suggest that honourable members look at standing order 303(e) because the behaviour of the House is deteriorating rapidly.

Mr MacKellar —Madam--

Mr Hand —I always let the honourable member put his point of order; he should let me put mine. My point of order is that I ask you, Madam Speaker, to investigate whether it is true that the honourable member for Maranoa has been barred from the House by his Party because he is a disruptive element?

Madam SPEAKER —I point out to the honourable member for Melbourne that that is not a point of order. He knows that it is not a point of order. If he raises more frivolous points of order, I will deal with him.

Mr KEATING —I conclude on this point: What we have now is a non-refutation of $14 billion worth of tax commitments by the former Treasurer-this supposed economic rationalist, the dry who would vandalise Australia's fiscal policy and leave it to the mercy of the international financial market to pay the penalty in terms of the interest rates and recession which such policies would bring. I look forward to a statement by the Leader of the Opposition about the documented commitments I referred to yesterday and where he stands on fiscal policy. Let him say whether he believes the coalition parties can deliver on any fiscal policy, any tax change, or any policy which in any way can buttress the kind of dry economics and political responsibility he once stood for.