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Monday, 22 October 1984
Page: 2095

Senator CHANEY —My question, which is addressed to the Leader of the Government in the Senate, relates to the statement by the Prime Minister last week that the family home would not be included in a capital gains tax. Does that mean a total exemption for the family home or is there likely to be a limit placed on its value? If a limit is placed on its value does the Minister think that fairness and equity, which I think are the words he used last week, would require any such limit to be indexed against inflation?

Senator BUTTON —I have answered a number of questions on this issue and I have informed the Senate on numerous occasions that the Government, as distinct from the Opposition which is apparently about to embark on piecemeal tinkering with the taxation system, is concerned to have a comprehensive review of the taxation system in the interests of fairness and equity in that system. It is something which has been needed for a very long time. If, as a result of a comprehensive review of the taxation system, the tax mix is altered-as a result of recommendations arising from that review-to include any element of capital taxes , the next question to be considered would be: What exemptions apply to any capital taxes included in the tax mix? That would be a question which would arise from re- commendations included in the review because here in Australia, as elsewhere, one would anticipate that any such taxes would include a wide range of exemptions. The Prime Minister has indicated in a statement, made, I think, in Perth last week, that the family home would certainly be one of those exemptions if any such recommendation came out of a tax review. He has taken it no further than that. But in the interests of fairness and equity, as I have said, no doubt a wide range of issues would be considered.

Senator CHANEY —Mr President, I ask a supplementary question, and preface it by reminding the Leader of the Government that I have asked him a question about an area in which the Prime Minister has already apparently reached the second stage ; namely, his consideration of what exemptions would be given by his Government with respect to a capital gains tax. I ask the Minister: Given that the Prime Minister has, apparently in the interests of clearing the public mind, said that the family home would not be included in a capital gains tax, can he tell us whether that means a total exemption for the family home or only for family homes up to a particular value? That seems to me to be something which the public is entitled to know, to clarify just what the Prime Minister was telling us when he made his statement in Perth.

Senator BUTTON —I scarcely regard that as a supplementary question in view of the answer which I gave to the original question. Let me just say that, in terms of exemptions to capital taxes of any kind which may or may not be recommended by a review of the taxation system, that will go with the recommendations. The Prime Minister has specifically mentioned the family home, but he has taken it no further than that. I remind the Senate that of course capital taxes are already in existence in Australia. The problem is that they do not work in relation to tax avoidance. That is why the Opposition, when in government, did very little about them. It was a characteristic of its term in government that it was not prepared to do anything significant about tax avoidance. That has resulted in enormous inequities in the taxation system, particularly to those on pay as you earn income.