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Tuesday, 23 October 1984
Page: 2218

Senator MESSNER(4.06) —The Senate is debating a matter of public importance brought forward by the Opposition, namely:

The Government's concealment of its real intentions on taxation.

There can be no doubt about the importance of this issue at this time. One has to note only the rising level of hysteria on the part of the Government in disclaiming every project and policy item that has been put forward by the Opposition to realise what kind of state of mind the Government is working itself into. It realises how vulnerable it is, particularly on taxation matters. As a result, it is attempting to fool the Australian people that it really does not intend to introduce capital gains taxes or savings taxes or death duties after the election by saying: 'We will conduct a review of the taxation system'. In this debate the Liberal and National parties have clearly stated their intention to bring down a precise scheme for income splitting for families with children in order to provide substantial benefits, bringing with them substantial social benefits, for families with single incomes. That, of course, is to be provided in conjunction with a child care rebate, in order to provide people with a definite option of looking after themselves. Also there will be the choice for spouses in the family to decide the kind of career paths each might follow.

Quite apart from those social effects which will be of substantial benefit to the Australian people, there is the very question of equity which is being addressed by the Liberal and National parties in their policy. That flies directly in the face of the Labor Government's approach, which is to hide its real intentions, bind them up in rhetoric and throw them away until after the election, if the Australian people can be fooled long enough to re-elect them on 1 December. For these reasons, this debate is particularly important. We need to bring forward the Government and expose its real intentions in these matters in order to make sure that the people understand what this Government intends if it is re-elected.

We can judge the real level of hysteria in the Government about the obvious acceptance and success of the Liberal and National parties' income splitting proposals by examining the words of the Minister for Social Security, Senator Grimes, here a few minutes ago in the course of the debate. He claimed that there would be a very substantial benefit accruing to very high income earners as a result of the institution of our new policies. He instanced the case of the Treasurer, Mr Keating, who earns something like $60,000 a year and he claimed that there would be a tax advantage to him of some $3,270. Of course that is absolutely wrong. I put that issue to rest straight away by referring to the tax policy of the Liberal and National parties, in which we say that one option to achieve an equitable system so that the relative benefit goes to lower income families is to limit the dollar benefit to any taxpayer to the benefit provided to a single income family on $18,000. That is our policy statement, so Mr Keating would get no greater benefit from his taxable income of $60,000, or whatever it might be, than a person who has a taxable income of no more than $18 ,000.

That is the point that must be got across. But clearly this Government is becoming so nervous and so hysterical about the prospect of not succeeding at the election that it is inclined to and will deliberately misrepresent the Opposition's position on this matter time and again if it can get away with it. We have seen other examples again today. The Minister for Social Security has been trying to misrepresent the Liberal and National parties policy on social security in relation to child care, with completely wrong, fallacious statements which have nothing to do with the facts and which are total fabrications. We saw the Prime Minister (Mr Hawke) doing the same thing in Tasmania yesterday about taxation policies. This hysteria, which is spreading amongst Labor members like wildfire, will bring them down in a fiery heap in the not too distant future.

We know that the Government is committed to a capital gains tax. Why does it not tell the people what it really intends? Why will it not tell us before the election what it intends to do after the election, if it is re-elected? It is just hiding these facts. It is not proposing the full issues which should be exposed during this election campaign. It is leaving it to the Opposition to bring them forward.

Why do I say that the Government is committed to this tax? Clearly, it has its foot in the door. Over the last 12 months, the Government has introduced an assets test on pensions. Why has it done that? It is the equivalent of a capital gains tax, not on the rich but on old age pensioners, the most vulnerable group in the community.

Senator Dame Margaret Guilfoyle —And the widows.

Senator MESSNER —That is the tax being imposed upon that group-the widows, as Senator Dame Margaret Guilfoyle points out, the unemployed, the sheltered workshop allowance recipients, you name them. These are the people who are being affected by the assets test. I turn to the rationale of the assets test. Senator Grimes, in Labor Essays of 1983, said quite clearly:

Those who advocate an assets test for pensioners should, if they are consistent , introduce a capital gains tax at the same time.

So there we have it. We have the foot in the door. We have the assets test. We have had the legislation passed by this Parliament, through this Senate with the support of the Australian Democrats, being opposed by the Liberal and National parties, and as a result we can now expect, directly, the second leg of the double-a capital gains tax.

That was Senator Grimes speaking, the Minister for Social Security, number four in this Labor Government. He is clearly committed to that. But he is not the only one. Mr Keating, the Treasurer, said, according to the Canberra Times of 3 September 1983, that not only would we have indirect taxes introduced, on the tourist industry, the professions, and financial services, but we would also be having a capital gains tax.

We have also seen the argument about indirect taxes. The Government has sought to say that indirect taxes would somehow be inflationary, that they would cause problems for the economy. But if there is any doubt about it, let us see to what extent the Government is committed to this. In its Budget last year it introduced the new concept of indexing excises on a whole range of goods, including tobacco, alcohol and petrol. Since then it has introduced a wine tax, and it has widened the sales tax net. So the Government has no compunction about introducing indirect taxes. That is obviously part and parcel of its agenda. To what extent can it argue that it is against this kind of taxation? Of course it cannot argue that. Senator Jack Evans would acknowledge straight away that this Government has sought to extend indirect taxes across the community. So there is no distinction between us in this matter.

If the Liberal and National parties are seeking to extend the tax base of indirect taxes and at the same time cut direct taxes-a policy that we have sought to pursue for many years-we say that that is a good thing. But the Government is not thinking of that at all. It is just widening the tax net in order to pay for the deficit. It knows that if it is re-elected, it will have to do that as well. It will have to extend the tax net because, as Syntec and John Stone have pointed out, it will face terrible problems in coping with its Budget in the early part of the next financial year.

Mr Keating, in an address to the National Press Club on 24 August 1983, said:

The Government has never given an undertaking that increases in indirect taxes could be avoided.

In considering how to finance the necessary growth in Budget outlays, the Government was conscious of the very sizable burden already imposed by direct taxation.

Is that not what we on the Opposition benches are saying? Is that not what we have proposed in our policy-that we intend to cut direct taxes? Of course it is. Yet the Treasurer seems to have some ability to pervert that statement and to twist it around as though he has somehow a different point of view. In an interview with Russell Barton, published in the Age of 2 September 1983, the Treasurer went on to say that the regressiveness of indirect taxes had been ' oversimplified' and had 'limited this form of taxation'.

Senator Dame Margaret Guilfoyle —We have been saying that for a long time.

Senator MESSNER —Yes, we have. Indeed, Mr Howard dealt with that very effectively yesterday. But perhaps the most important point of all on this matter, and the reason why the Labor Government is showing such humbug on it, is the deletion from its platform, at the July 1984 ALP Conference, of the following phrase on the matter of taxes:

Reduce the relative incidence of indirect taxation.

There is the direct point. The Government knows that it is going that way. It should not try to fool the people. It should tell them what it is on about, so that we can debate these matters properly. The Government knows it, and everyone else knows it. The confirmation that we shall be having high taxes comes from the words of none other than Barry Jones, the Minister for Science and Technology. Earlier this year he quoted Senator Robert Ray as having often said:

We've got a party policy that's got 195 pages on spending money and only about five pages on raising it.

Clearly, Barry Jones was indicating that this Government has to move towards higher taxation to pay for his science and technology policies.

Perhaps the real issue here can be read from the ALP accord with the trade union movement, because that demonstrates exactly the bind that the Government is in ahead of an election. It has put so much store on this great accord, as it describes it, which is, as the Government sees it, saving Australia from economic ruin. The accord contains this reference:

The Government will endeavour to reduce the relative incidence of indirect taxation because of its regressive and inflationary nature.

I have already mentioned that the Treasurer, in an interview published in the Age, has said that it has proven not to be regressive. Secondly, that reference, in almost exactly those words, was deleted from the ALP platform in July of this year. Yet we find that it is still very much a central part of the accord. That is why the Government cannot come clean on its taxation policies. That is why it cannot say what it really intends to do regarding indirect taxation. That is why it has to hide behind some kind of a review. That is why it cannot come out and tell the people that it will raise taxes after it gets back into government. This is contained in the ALP and union accord to which the Government is bound and to which, of course, the ALP is beholden by virtue of the pre-selection of its members here. That is the core of the Government's dilemma. It cannot tell the truth. It will not tell the truth. We on this side of the Senate will make sure that in the period leading up to the election that is exposed to the Australian people.