Mr MILES (1:00 PM) —I would like to make a number of comments in summing up this important debate. The Taxation Laws Amendment Bill (No. 7) has a number of important aspects to it. Firstly, it implements two key government initiatives—choice of superannuation funds and the savings rebate, which both commence on 1 July 1998. Secondly, it builds on the government's program of reducing compliance costs for small businesses by introducing a CGT assets register and changes to the withholding tax arrangements. Thirdly, it implements two important 1997 budget announcements which enhance the integrity of the tax system relating to franking credit trading, dividend streaming and private company loans.

The savings rebate will particularly benefit Australian families and older Australians who have saved for their retirement and individuals who have built up their businesses and derive a return. The rebate will apply to undeducted superannuation contributions made by employees and the self-employed and net personal income from savings and investment, including net business income up to an annual cap of $3,000. In the first year, it will apply at a transitional rate of 7.5 per cent and increase to 15 per cent thereafter. This will deliver a tax saving of up to $450 per year. I know, after conversations with people within my own electorate on this issue, that there are many people who are welcoming those proposals.

The rebate will provide an incentive to save in a way which is fair, allowing individuals to choose the form most suited to their needs, recognising that individuals have to save for life cycle needs as well as for retirement. The bill also implements the government's reforms to choice of fund arrangements. They are designed to give employees greater choice and control over their superannuation savings, which in turn will give them greater sense of ownership of their savings. The arrangements will increase competition and efficiency in the superannuation industry, leading to improved returns on superannuation savings. I will be moving amendments, largely of a technical nature, in the consideration in detail stage to make some further minor improvements to the choice of fund arrangements.

The bill introduces an asset register for capital gains tax purposes. This will eliminate the need for taxpayers to keep source documents for lengthy periods and will reduce the compliance costs for all taxpayers with capital gains tax obligations. The new three-tier system for remittance obligations under the reportable payment system, the RPS, pay as you earn and the prescribed payments system, PPS, will give small remitters the option to remit these payments on a quarterly basis rather than a monthly basis. This will provide over 300,000 small businesses with the opportunity to defer the remittance of $500 million in withheld amounts in 1998-99. That is certainly a very substantial number of business operators who will benefit from this.

The bill also amends the Income Tax Assessment Act 1936 to ensure that payments and loans made by a private company to a shareholder or a shareholder's associate are treated as assessable dividends to the extent that there are realised or unrealised profits in the company. I will be moving amendments on this measure in the consideration in detail stage. This measure, together with the introduction of a general anti-avoidance rule and anti-streaming measures which form part of the 1997 budget measures to prevent franking credit trading and dividend streaming, is designed to protect the integrity of the tax system.

The bill will implement two further budget measures relating to tax deductibility of expenses incurred in contesting election to the Constitutional Convention and donations to the National Nurses Memorial Trust. In addition, the bill gives effect to part of the status of forces agreement between Australia and Malaysia to allow certain personal effects to be brought into Australia sales tax free by members of a Malaysian visiting force. Finally, the bill makes some technical changes to the income tax law.

Opposition speakers have made a number of outrageous remarks in their comments on this bill, particularly their comments on savings policy. Labor's record on national savings is indescribably abysmal. Let us go back over that. Labor speakers failed to note, for example, that, under Labor, Australia's national savings rate reached, apart from the world wars and the Great Depression, its lowest level since Federation, since 1901. They did not mention the $10.3 billion budget deficit that they left us when they were thrown out of office.

Not only that, but many of us are very much aware of the $70 million worth of deficits they ran up in the last five years of office. That is a huge amount of money. There is a description we could use, but let us say that for members of the opposition to come here and vigorously debate this issue in regard to savings does not stack up with the history of members of the opposition when they were in government. Nor did they mention that general government net debt ballooned from four per cent to 19 per cent of GDP in the 13 years of Labor government. They are now making outrageous spending commitments which would blow the budget back out of the water. So to talk about sav ings is something which I hope members of the opposition have been doing with tongue in cheek and that they do not really mean what they are saying.

We say that the savings rebate is fair and equitable, unlike Labor's never delivered l-a-w broken promises of co-contributions. I want to underline that. We believe it is fair, that it is equitable and that it will be beneficial to the overall structure of this industry in Australia.

With regard to the savings rebate and why we say it is equitable, I make the following points. Really, the opposition's spokespeople in this area certainly have no right whatsoever to talk about equity. They opposed the biggest move by a government in recent history to improve the equity of Australia's retirement income system by their opposition to the superannuation surcharge. That superannuation surcharge was placed on those people with high income earnings, yet they opposed that. The super surcharge vastly improves the equity of our super system. The bulk of the savings rebate will flow to people earning less than $40,000 per annum. Seventy per cent of Australian wage earners earn under $40,000. This really is a benefit flowing to the overwhelming bulk of Australian wage earners. In contrast, not one of these people need to pay the super surcharge.

The opposition has also been highly misleading in their comments about the benefits that the battlers will get from the rebate. About one-third of wage and salary earners earning less than $40,000 made personal super contributions, at an average of around $1,300—that is, they already pass the test for getting the $195 rebate. We have given them the opportunity to get an even higher rebate by increasing their contributions. For those who are not making personal super contributions, they have a big incentive to do so. Each dollar they put in will give them back 15c. Not only that, but six million Australians will benefit from this rebate, the vast bulk of whom are low and middle income earners.

For a person in the lowest tax bracket, the rebate means that the person pays just five per cent tax on their savings income up to the cap. For a person in the highest tax bracket, the rebate drops their tax rate on savings income up to the cap to 32 per cent. Labor never once gave an incentive for personal savings. The savings rebate is a good measure, a fair measure and a measure welcomed by the overwhelming majority of Australians.

Labor's policy on choice of fund is equally poor and equally bad. Labor had 13 years to provide for choice of fund, and they never delivered. Again, I guess it was something they were going to do in the 14th year. I think the Australian people woke up to the fact that they were never going to do some of these things, and that is why there was a change of government in 1996. Now the Labor opposition want to stop us from delivering our reforms, which were election commitments. Make no mistake: that is the real Labor agenda. People can come in here and wax lyrical about various issues on this matter, but that is the agenda of the Labor opposition.

Labor's choice model guarantees no choice to workers at all. Labor's attitude to choice continues to be the old Labor model of paternalism where workers cannot be allowed to look after their own interests. The government and the unions have to tell them what they can and cannot do. I remember that, between 1984 and 1986, many people in Australia were being told that there was only one superannuation scheme they could join. That was dictated to them. They were absolutely appalled that there was no choice.

I can say to the Australian people that the proposals being put by the Labor Party now are no different. They want to corral the Australian people to determine where their superannuation goes. We are a government that wants to give people choice. We are opposed to the amendment moved by the opposition. I commend the bill to the House.

Question put:

That the words proposed to be omitted (Mr Gareth Evans's amendment, as amended by Mr Kelvin Thomson's amendment) stand part of the question.