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Tuesday, 12 June 1984
Page: 2864

Senator BOSWELL(9.24) —The Income Tax Assessment Amendment Bill (No . 3) and the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Amendment Bill 1984 cover a lot of aspects of taxation law, but I want to address my remarks tonight to the aspects that cover small business, and I include graziers and farmers within that term. As I see it, the main trouble with the legislation is that it is perpetrated by people who just do not understand small business. I cannot see one honourable senator on the Government benches who has ever been in small business. Not having been in it they do not understand it. Senator Grimes, the Minister for Social Security, is a doctor and an academic. Senator Gareth Evans, the Attorney-General, is a lawyer and an academic. Therefore, it is hard for them to understand the aims and ambitions of small business. For the information of Senator Evans and Senator Grimes, small business, covering 754,000 small and medium sized businesses, employs 60 per cent of total private employment. It currently pays over half of all tax revenue , both State and Federal.

Small business has problems associated with high interest rates, high taxation, the increasing cost of employing staff, raising finance and frustrations and delays with all levels of government. On top of this, there are penalty loadings and shift and annual leave loadings. As well as all that, the Government is now making it impossible for small business people to provide for their own retirement. I can tell members of the Government about this from personal experience. I spent 16 years running a small business employing 10 people and certainly one runs the gauntlet of all those difficulties that I mentioned. After battling for 20, 30 or 40 years one does want and expect the right to have some sort of retirement without relying on the Government. People in small business do not want to be made wards of the State. They have battled all their lives, have done their own thing and want to provide for their own retirement. This Government is taking that right away from them with this legislation. No one in his right mind will take out superannuation policies only to have them eroded by inflation and then on top of that eroded by the 30 per cent tax slug being introduced by the Government. Today I spoke to accountants about this. As a matter of fact, by chance I got two renewal notices from my life insurance company and my immediate reaction was to ask why I should pay them because I will lose 30 per cent. This was borne out after speaking to the accountants. They told me that very few people in small business are investing in superannuation policies.

I understand that this legislation is supposed to stop people double dipping. Surely the assets test that the Government has brought in accommodates that problem. Why does the Government want to bring in two pieces of legislation to stop people investing income or assets that they earn out of superannuation? Lump sum payments are invested in either income-producing property or stocks and shares, and tax is paid on the dividends from those investments. Therefore the Government is already collecting tax on that income. Lump sum payments are the only way small business people can invest to maintain incomes in line with inflation. Small business cannot superannuate its employees on anything other than lump sum payments. The policies are not there to be offered. What happens to all those people in small business who have been superannuated on lump sums? I had five people work for me who had superannuation policies. What will happen to them? The value of those policies will be completely eroded; they will be useless.

The Minister for Industry and Commerce, Senator Button, made certain commitments to small business before the last election. He has been running around setting up committees, such as the the Economic Planning Advisory Council which I notice still does not have any small business representatives on it. He is setting up various committees throughout Australia and while they probably do a lot of good for small business the basic thing that a person wants out of small business is to work hard, to produce a good income, to be self reliant and to be able to provide for his retirement. Once that is taken away, it does not matter what this Government does. It does not matter what committees this Government sets up once it has taken away that person's basic right. That person 's basic right after 40 years hard work has gone down the drain. He is now made a ward of the state. The Government has reduced everyone to the lowest common denominator. Everyone will get the pension, which is really what this Government is about. This Government wants a one class society with everyone reduced to the lowest common denominator. With this legislation the Government has been very successful in achieving this. The Government ought to be ashamed of itself.