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Wednesday, 17 October 1984
Page: 1853

Senator MAGUIRE —My question is directed to the Minister for Social Security. I refer to the introduction in the Budget of the special $50 and $75 income tax rebates for single and married unemployment, sickness and special benefits recipients. What are the effective increases in the taxation thresholds-that is, the level of exempt income-for single and married beneficiaries as a result of these rebates being introduced? How many social security beneficiaries will be freed from income tax liabilities as a result of the introduction of these new rebates?

Senator GRIMES —As Senator Maguire has said, in order to free all maximum rate pensioners and beneficiaries who have no private income from paying personal income tax, the Government announced several initiatives in this year's Budget. This is the first year since 1976-77 in which all pensioners and beneficiaries with no other income will be fully free from paying tax. A special beneficiary rebate of $50 for single beneficiaries and $75 for married couples was introduced in the Budget and this will lift the effective tax thresholds in 1984 -85 to $4,783 for single beneficiaries and $7,989 for married couples. This will be phased out at a rate of $1 for every $8 of taxable income above these levels. The estimated number of full time beneficiaries who will benefit from this measure is 25,000.

The Government has also-and we have heard plenty about it in this place- extended the dependent spouse rebate to de facto couples. Full time beneficiaries with a de facto spouse and no dependent children face a tax liability of $845 in 1983-84 because they were ineligible for this rebate. This amount represents more than 10 per cent of their annual income and would have placed these beneficiaries in an extremely disadvantaged position. Coupled with other measures, the extension of this rebate will overcome the tax disadvantage faced by members of this particularly needy group. Without this rebate they, as I said, would have been paying an extra 10 per cent of their annual income in taxation-some $845-and would have been put in an extremely difficult and inequitable position. I am therefore surprised that Opposition members who oppose this measure are more concerned about making what they consider to be moral judgments than they are about considering the needs of a very poor group of people in this community.

Many pensioners and beneficiaries with private income will also benefit from the deduction in the marginal tax rate from 30 per cent to 25 per cent. Pensioners with a small amount of private income will benefit from the increase in their effective tax threshold from $5,429 to $5,533. I think all these measures demonstrate that the Government has been concerned to ensure that the position of the most needy people in the community is protected when considering changes to the taxation system. We are pleased that we are able to do this, and we will continue to concentrate on these people of greatest need, even though we may be attacked at times by Opposition members for doing so.