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Friday, 5 October 1984
Page: 1322


Senator MacGIBBON(12.40) —I start my speech on the Taxation Laws Amendment Bill by making a few general observations about taxation in this country, first of all with reference to the Income Tax Assessment Act. The Income Tax Assessment Act is the most voluminous Act we have in this country. The legislation which is before us today will add a staggering further 230 pages to that Act. Mr Deputy President, I am sure that you have seen a copy of that Act. It is almost the thickness of a telephone book for a major capital city. The average Australian simply cannot understand what is in it; nor, more importantly, can the average business man, either a big businessman on the board of Broken Hill Proprietary Co. Ltd or a small businessman running a backyard company with five or six people working for him.

That imposes very great limitations on business in Australia. We cannot have a situation in which we break our basic tenet that ignorance of the law is no defence. We simply cannot have people pleading ignorance and evading laws. There is an enormous argument for simplifying the Income Tax Assessment Act so that the majority of people involved in commerce at least understand most of what is involved in the Act. The two great needs in getting Australia back to economic health are, first of all, the reform of the Income Tax Assessment Act and, secondly, the reform of our industrial relations. Tragically, both those fields are getting worse and worse under a Labor government. Debate on this legislation is not the time for discussion on the industrial relations scene, but we have seen a marked consolidation and an expansion of the powers of the trade union movement; so much so that Mr Dolan spends more time in the office of the Prime Minister (Mr Hawke) than he spends in his own office as the head of the Australian Council of Trade Unions. We had the open and avowed involvement of the ACTU this year in planning the Budget. Perhaps that is one of the reasons why the deficit is so large.

We have to give business a break because it is only by the expansion of private industry in this country that we will get the unemployment figures down from where they are. A lot of nonsense has gone on about the new jobs which have been created in this country. I must point out that the overwhelming majority of those jobs that have been created under Labor have been created by expanding the Public Service, by spending other people's money to provide jobs in a non- competitive and largely non-productive environment. The rest of the growth in employment-that in private industry-regrettably has been low.

In reforming the tax system three broad goals have to be pursued: The Income Tax Assessment Act has to be simplified so that it will be more comprehensible to the average person; the Act itself has to be made a great deal fairer; and, above all, it has to provide an incentive for people to get out and earn some money. Both the Prime Minister and the Treasurer (Mr Keating) have talked about reform in recent months but, as Senator Messner said, there are no details of this. They have a moral obligation-if they have any morals-to come clean with the Australian community and tell us the details of what they intend to do with their tax reform. I will come back to that a little later in my speech.

On the performance of the Government in the 18 months it has been in office we do not have any confidence that those reforms will be productive or rewarding for the Australian economy. We have seen very great taxation increases. The aggregate personal income tax take will go up by 23 per cent this year alone. The aggregate take from provisional tax will go up by a staggering 47 per cent. Of course, the individual rate for provisional tax has been hiked by 10 per cent in the face of a declared inflation rate of around 6.5 per cent, or whatever the Government is claiming. Every person who pays provisional tax is paying a 10 per cent increment this year. In this Budget we have seen the introduction of new tax scales. We now have five tax scales instead of three. That means, quite simply, that everyone pays more tax and pays it sooner.

In this chamber earlier in the week one of the Government senators made a very naive statement about the need to provide an incentive in the tax scheme. To his thinking, somehow or other the introduction of a new 25c in the dollar tax on a yearly income of $4,596 provided an incentive. I cannot understand that at all. It just means that someone who would not have paid income tax under the Liberal- National Party scales now has the dubious pleasure of paying tax to this Government. At the other end of the scale, people will now have the pleasure of paying the top rate of 60c in the dollar when their annual salary reaches $35, 001, instead of when it reaches $35,789. It is absolutely wrong for any person to be paying more tax to the Government than that person is able to make out of his activities. We simply cannot have an incentive when the major part of the reward for that effort is going to an impersonal government.

Sitting suspended from 12.45 to 2 p.m.