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Friday, 19 October 1984
Page: 2067

Senator DURACK —I ask the Leader of the Government in the Senate: Will the capital gains tax for which he yesterday reaffirmed his support include an exemption for the family home and provision for losses to be offset against gains?

Senator BUTTON —The Government has no intention of introducing any new taxes following the election until a comprehensive review of the taxation system has taken place. The tax policy announced by this Government this year provides for a decrease of $7.60 in the taxation of most Australians from 1 November this year. That policy was announced in the light of restoring, as much as possible in the current environment, equity and fairness to the current system. The main purpose of the review of the taxation system which the Government has announced it will undertake will be to provide fairness and equity in the taxation system, the absence of which has been a source of complaint in this society for many years. That is the purpose of the review. I do not know what the review will recommend about capital taxes. If it recommends capital taxes, undoubtedly it will also recommend exemptions from those taxes.

Yesterday I saw that the Prime Minister had said that an important exemption from capital taxes, if the review so recommended, would be the family home. That was said in the light of a widespread view in the community-many people, including community groups and so on, have expressed views about these questions -and reflects the view that the family home is an appropriate exemption if one is talking about equity and fairness in the taxation system. That is a very important consideration, and the prime consideration of this Government.

Senator DURACK —Mr President, I ask a supplementary question. I asked the Leader of the Government in the Senate whether the capital gains tax for which he has been contending would include exemptions. His answer was in general, vague terms . I remind him that he has been contending publicly and also in Cabinet for such a tax. I ask him again: Will his capital gains tax, the one for which he has been contending, include an exemption of the family home and provision for losses to be offset against gains?

The PRESIDENT —I do not know whether that question is within the purview of the Minister's responsibility, if the honourable senator is talking about a personal matter. I will refer the matter to the Minister and see what he says.

Senator Chaney —I rise on a point of order, Mr President. The Minister has chosen a very unusual exercise in a Westminster system with a Cabinet Government to give us his personal views on a matter of very great moment. Whilst professing a certain view on behalf of the Government, he has asserted a view consistently in this place. His leader having qualified that view, I submit to you, Mr President, that it is perfectly in order for the Minister to be asked whether he accepts the reservations which his Leader has apparently expressed on behalf of the Government.

The PRESIDENT —I have expressed the doubt that it is a supplementary question having regard to the Minister's ministerial responsibilities. Having said that, I have already allowed the question to go through to the Minister.

Senator BUTTON —Mr President, may I say that I regard the point of order raised by Senator Chaney as an impeccable point of order, although I appreciate the comment which you made. On a number of occasions I have expressed support for a capital gains tax as my personal view. That does not mean that it is the view or that it has the support of the Government. Indeed, I have said on a number of occasions that the issue had not even been discussed by the Government as a government. I said in answer to the earlier question that what the Prime Minister said reflected a widespread feeling amongst those who have advocated the public discussion of this issue. Indeed, I regard it as an exemplary view, which is held by a wide range of people, that if those taxes are to be considered in the context of a review there would, of course, be exemptions from them as there are in every country of the Organisation for Economic Co-operation and Development other than Australia. In every other OECD country taxes of that kind apply with exemptions. It is an important issue.

In terms of my own advocacy of a capital gains tax, I am concerned about two issues. I believe it would be helpful in redressing the current inequities in the Australian taxation system. I believe it would be helpful in directing resources away from totally unproductive activities, such as penthouses at Surfers Paradise, and into business activity in this country. I believe it would be helpful in stamping out completely the possibility of tax avoidance in this country-something on which the Opposition has had a very lack-lustre performance . That is my view. It may be that in the context of a review we will be told that those things can be done in another way within the context of the tax system. If we are so told, I will accept that. But I await the outcome of the review on those matters. The Government has to be concerned-any government has to be concerned-about the fundamental issues of fairness and equity in the system. That is what the review is about.