Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 28 April 1987
Page: 2060


Mr CARLTON —Is the Treasurer aware that a single income family on average weekly earnings that paid $65 a week in pay as you earn income tax in March 1983 now pays $102 a week and will still pay at least $102 a week after 1 July this year? How does the Treasurer justify his claims of fairness and equity in tax reform when the Government will be taking an extra $37 a week in tax from the average family after the Treasurer's great reform is completed?


Mr KEATING —I cannot carry a tabulation in my mind about each particular circumstance but, unambiguously, we are in the course of providing a $4.5 billion tax cut for this country which has not added to the Budget deficit but which has reduced it and at the same time we have broadened the tax base, on an equitable basis, and provided declines in marginal income tax rates. It may be a matter the honourable gentleman is happy to gloss over because if I had the record that he lives with, as a member of a former government, I would be glossing over it too.

It is very interesting that those earning $35,000 had a 60 per cent marginal tax rate in all of the years when Mr Howard, the Leader of the Opposition, and the honourable member for Mackellar were Ministers. However, at a time of economic stress and fiscal dislocation from the recession of 1982-83, which was imposed by the former Treasurer, the Government has reduced the marginal rates of tax without adding to the Budget deficit. In fact we have reduced the Budget deficit. On 1 July this year we will bring the tax rate of 60 per cent to 49 per cent and the 48 and 46 per cent rates to 40 per cent or less. That will be done to lift the incentive for people to do extra work and to help employment but that is not good enough now.

The people who left the tax rate jammed at 60 per cent, the people who pocketed all of the bracket creep over the years, the people who spent the Bass Strait bonanza gained from the massive lift in oil prices without retiring debt or reducing marginal rates of tax now say: `That 49 per cent tax rate is no good; that is passe. Let us have 35 or 30 per cent tax. We will give tax cuts to high income earners but nothing to the people on lower incomes and we will pay for them by taking away concessions for those on lower incomes'. Honourable members will remember the leaked document stating $6 billion of concessions which would be taken from those down below for that kind of a tax policy.

Apparently honourable members opposite are now imbued with the need for more incentives and lower tax rates but one could not get them imbued between 1976 and 1983. No, the tax rate was 60 per cent. The Government has now tied the tax rate to 49 per cent, the company tax rate, so all of the phoney company structures, the phoney trusts, will vanish. We are now giving shareholders a 49 per cent tax rate but removing the double tax on dividends. No questions are asked about that matter because the people whom the Opposition claims to represent-shareholders amongst others-have never been represented. The people who wanted some access to stock markets and companies, who wanted to share in the wealth of this country were denied that because their dividends were taxed twice; their equity was taxed twice. So with this background I can understand the honourable member for Mackellar not putting a question about marginal rates of tax, trying to confect some sum about average tax rates and not mentioning imputation because he is embarrassed by the Government's reforms and well he might be.