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Wednesday, 10 October 1984
Page: 1547


Senator COOK —My question is directed to the Leader of the Government in the Senate and follows, in its own way, an answer given by Senator Walsh to a question from Senator Sibraa a moment ago. Is the Minister aware that the Business Council of Australia, when commenting on the Australian tax structure, has pointed to a general loss of faith in the system? Does the Minister share the view of the BCA? In view of repeated suggestions that the Government proposes to conduct a review and reform of taxation in this country in its next term, will the Minister indicate what is intended? If there is to be a review, what would be the major elements of it?


Senator BUTTON —The Business Council of Australia has published some documents on the taxation system and has certainly made the comment that there does appear to be a general loss of faith in the system. If that is a correct conclusion I imagine that it is a conclusion which has been arrived at over the experience of a number of years when there undoubtedly has been declining faith in the taxation system at least in certain circles within the community.

Senator Cook asked me about the likelihood of change and the direction of change in any review of the taxation system which might be conducted by the Government. The first point I would like to make about that is that any such changes would need wide discussion, careful consideration and a degree of broad community consideration. The Economic Planning Advisory Council has already given consideration to some of these issues. I believe its consideration has stimulated discussion on these matters in bodies such as the Business Council of Australia.

The Government, as distinct from the Opposition, does have a positive attitude towards taxation reform. I think we are all well aware of the previous Government's record on taxation matters, particularly its failure to act against tax avoidance resulting in massive tax inequities.


Senator Messner —That is not what the Commissioner of Taxation said today.


Senator BUTTON —I am asked to say what the Commissioner of Taxation said. In his 1984 report he stated:

The boom of the promotion of tax avoidance and evasion schemes of the kind experienced in the late 1970s and early 1980s was a thing of the past.


Senator Chaney —Because of our action.


Senator BUTTON —It was as a result of action taken by people such as Senator Durack who, for five years, left a prosecution sitting in the bottom drawer of his desk. That is the sort of action to which the interjection refers.


Senator Chaney —Absolute rubbish! Untrue.


Senator BUTTON —Senator Chaney says: 'Absolute rubbish'. It was not absolute rubbish.


Senator Chaney —Mr President, I raise a point of order. It is well known to everybody in the Senate that what was just said by the Leader of the Government in the Senate is totally inaccurate. I think that the comment should be withdrawn and that the Leader of the Government should resume answering the question on a factual basis.


The PRESIDENT —Order! There is no point of order.


Senator BUTTON —I will not withdraw my statement, Mr President.


The PRESIDENT —The Chair has not asked you to withdraw it.


Senator BUTTON —Since this Government was elected the Opposition has continued to frustrate the Government's efforts to remove tax avoidance and recover tax avoided by bottom of the harbour schemes. Because of these things, amongst others, there is widespread community concern and desire for an overhaul of the Australian taxation system. The Business Council of Australia, to which Senator Cook referred in his question, put out a paper earlier this week which lends support for an overall review of the tax system. That paper also supported a capital gains tax in the context of an overall review of the system.


Senator Watson —Have a look at the annual report of the Commissioner of Taxation which was presented to the Parliament yesterday.


Senator BUTTON —I am not interested in what the annual report of the Commissioner of Taxation said when I am dealing with what the Business Council of Australia said. The next person to whom I wanted to refer who referred to capital gains taxes-that was what I was dealing with when Senator Watson interjected-was Mr Howard, the apparent next leader of the Liberal Party of Australia. He has indicated that he is not fundamentally opposed to capital gains taxes within a properly structured and reformed tax system. Even the Liberal Party economic committee, which has been silent on most matters in the last 18 months, stated that it would have to 'look at capital gains tax'.

The Government has moved in the Budget context to provide tax relief for low and middle income earners and will continue in its efforts to produce a fairer tax system. As I have said, consultation will be a key part of that process. On the need to encourage public debate about equity in the taxation system in Australia the Opposition has been strangely silent. If the Opposition's promises are to be honoured there will have to be some very hefty increases in taxation but we wait still for the Opposition's taxation policy. All that has been done by the Opposition over the last 18 months in relation to taxation issues is to raise bogeys and scares about things such as a capital gains tax. No responsible debate about the taxation system can take place in this country unless those issues are publicly aired and aired in places such as the Parliament. They must be aired in the context of a constructive contribution to the discussion. The whole of this Opposition's policy on taxation matters over the last 18 months, and indeed on economic matters generally, is well summarised in this adaption of the words of A. A. Milne: 'Hush! hush! Whisper who dares! Andrew Peacock is saying his prayers'.