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Monday, 25 February 1985
Page: 106

Senator TATE —I direct my question to the Minister for Finance representing the Treasurer and refer to the report of the Auditor-General published on Friday which indicates that, according to the Taxation Office's estimates, as much as $3.6 billion in dividend and interest revenue is not disclosed on tax returns. After two years in office, does the Government accept any responsibility for this state of affairs? Will the Government take vigorous action to ensure that the Taxation Office deploys its resources and devises systems to recover these moneys? Will the Government consider the introduction of a withholding tax applicable to dividends and interest? Does he agree that were these moneys, estimated at $500m per year in dividend and interest revenue, to flow into the Treasury, there would be less need for regressive indirect taxation, which is traditionally so repellent to the Labor Party?

The PRESIDENT —Order! Before the Minister answers the question I draw honourable senators' attention to the length of the question. I suggest that, in view of the fact that there are now 74 senators here, we all should look at the length of our questions.

Senator WALSH —I am aware of the report to which Senator Tate referred and I will confess that I was not previously aware that any suggestion had come from an official source that non-disclosure of income of that magnitude had been identified. I do not know whether the Australian Taxation Office had had any previous estimates or had attempted to quantify it. If there is any information, I will supply that information to Senator Tate at a later time.

The Government, of course, has in the last two years increased significantly the staff of the enforcement branch of the Australian Taxation Office in order that it is better able to pursue or recover the taxes which ought to be paid, in contrast, if I may say so, to the neglect of the previous Government, both of the staffing requirements of the enforcement branch of the Taxation Office and, of course, of enforcing in a judicial sense other breaches of the taxation laws. The suggestion for a withholding tax on dividends and interest I will refer to the Treasurer for his comments.

Senator Tate's final point, essentially, is: If the income tax which is due and ought to be paid were paid, would there be less need for taxes of other types? The obvious answer to that is, of course, yes. Indeed there would be less need for taxes of other types if half the members of the old Senate here-and I expect half the members of the new Senate-desisted from consistently rejecting legislation brought in by this Government to ensure that people who had evaded income tax in the past actually had to pay it. There would be less need for taxes of all types if that legislation were passed by this Senate. In the near future this Senate will again have an opportunity to decide either whether it is going to continue to protect tax evaders or whether it is going to vote for the Government's legislation.

Senator Chaney —I raise a point of order. My point of order is the point you have already made, Mr President, about debating questions. The question was specifically on a form of tax avoidance which is of concern and which has been dealt with in a report. The Minister was specifically asked to comment on that and is now debating a range of other matters. I ask you to bring him to order.

The PRESIDENT —I ask the Minister to restrict his remarks to the question that was posed to him by Senator Tate. I call the Minister for Finance.

Senator WALSH —I had finished, Mr President.