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Friday, 19 April 1985
Page: 1274

Senator WALSH (Minister for Finance)(3.05) —I am sorry if I did not make it clear to Senator Chaney. The point I was making was that Mr Duncan was the recipient of a very large lump sum payment, I understand of about $220,000, about 90 per cent of which had accrued prior to 1 July 1983 and therefore was taxable under the old lump sum provisions and not the new lump sum provisions. In view of Mr Duncan's call for higher taxes and a crack-down on tax avoidance as a preferred alternative to charges for services, I invite him to comply with the spirit as well as the letter of this Government's policy on taxing lump sum payments by paying tax on his lump sum payment, which he received for service in the South Australian Parliament, at the rate applicable to a lump sum which accrued after 30 June 1983, which is the date on which the Government's lump sum tax policy came into operation.

According to my rough calculations, the tax which would actually have been levied on Mr Duncan's lump sum payment would have been about $11,000. The tax which would have been levied if the entitlement had been entirely accrued after 1 July 1983 would have been $58,500. The difference between the two is about $47,500. I think that that illustrates the point that I was making. Lump sum payments, until this Government cleaned up the previous Government's negligence in this area, provided a very substantial method of minimising, evading or avoiding tax-or whatever one likes to call it-by people on high incomes, particularly by people on the maximum marginal rate of income tax. Of course, every member of parliament, unless he uses some dodgy tax evasion scheme, is exposed to that rate of tax.

Question resolved in the affirmative.

The PRESIDENT —For the purpose of presenting the Address-in-Reply to the Governor-General, the sitting of the Senate is adjourned until Monday next at 2 p.m.

Senate adjourned at 3.08 p.m.