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Wednesday, 19 November 1986
Page: 2489


Senator CHANEY (Leader of the Opposition)(3.10) —I move:

That, in the opinion of the Senate, the following is a matter of urgency:

The need to abolish the Fringe Benefits Tax because of the extra cost burden it imposes on business, industry and the rural community, its unfair impact on relatively low income earners such as bank officers and the effect it will have on voluntary, charitable, religious and educational organisations and institutions.

This is the fifth occasion on which the Opposition has brought forward a motion calling for the abolition or the amendment of the fringe benefits tax. We have been able to carry only one of those motions, a motion calling for some amendment, because on all other occasions the Australian Democrats have again joined with the Government in affirming their support for the fringe benefits tax. The disquiet that there is in the general community about the operation of this tax is quite evident, and it could not be made more evident than by the actions of the Government itself. We are in a situation where the Government is currently not only imposing a new tax but also spending part of the proceeds of that new tax on lodging advertisements in the media of Australia to tell the people of Australia what a good thing this tax is. If ever there was a sign that a tax was unpopular and ill-received, it would be the panic measures by this Government to sell that tax by its use of public money to advertise its political objectives.


Senator Watson —Shame.


Senator CHANEY —Senator Watson called `shame', and I agree. I think it is a shameful thing that this Government is not only overtaxing this country, but also using part of those proceeds to try to justify its actions politically by buying paid political advertisements. In the real world of Australia, away from the artificial atmosphere of this Parliament House, there is no doubt that the people of Australia are fed up with the Government's tax policies and the imposition of new taxes upon them. The Opposition intends to continue to press these issues with the Government, because after a lot of protestation from Government senators that the tax was a step in favour of fairness and equity, we eventually had admissions by the Government that the tax was in fact unfair, and of course, we got some minor revisions of the fringe benefits tax when the Government made that concession.

No Minister is speaking on behalf of the Government today. No Minister is prepared to come in here and support and defend this tax. We have the usual cheerful little group of Senator Maguire, Senator McKiernan and Senator Cooney. I can only say that Senator Maguire's constituents in South Australia must wonder why he has never acknowledged, in his contributions to the debate in this place, what impact the fringe benefits tax is having upon the car industry, which is vital to his State of South Australia. One must wonder why Senator McKiernan, who purports to represent the State of Western Australia, has expressed no concern about the impact of the fringe benefits tax on the vital Western Australian industries in the Pilbara and the eastern gold fields, industries which have been severely incommoded and disadvantaged by this new taxes which have been imposed very unfairly on those basic industries. The reality is that we will once again get from Australian Labor Party senators a pathetic attempt to try to justify and defend the indefensible. They will make none of the concessions that have been made by braver Labor senators, such as Senator Graham Richardson, who has admitted that this tax is impacting upon the less well paid in the community. Instead we will get a dreary justification of something that really cannot be justified at all.

This is just one of the issues which are causing concern in the Australian community, and causing a reduction in our living standards. It is only one of the things that the Government is doing which are lessening our chances of economic recovery and ensuring that the misery of our economic situation is prolonged into next year and the year beyond that. This is the Government which has not only imposed new taxes but also imposed interest rates which mean that new home buyers are being asked to pay 17.5 per cent on their home mortgages. What simpler measure could we get of the misery which is being imposed on the people of Australia, including the suburban people of the city of Adelaide, whom Senator Maguire purports to represent, by the economic and taxation policies of this Government? We have a government which is imposing record levels of taxes, and Senator Maguire is in here defending a government which is imposing 17.5 per cent interest rates on his constituents. I wonder why they elected him to this place. I am sure they are wondering why they elected him.

I return to the direct and damaging impost of the fringe benefits tax. In each case in the debate the Opposition has been accused of defending rorts. What is put forward is that this whole question of fringe benefits tax relates only to high income earners avoiding part of their income tax responsibility. Again I draw the Senate's attention to the fact that no Government senator in this chamber has been prepared to admit the difficulties which the tax is imposing on many people, including small businessmen and farmers, such as the confusion which it is causing because of the great mass of legislation and explanatory notes, which has been compounded by the Government's backing and filling on this tax, and the hardship which is being imposed on people.

We raised in debate the situation of Mrs Plozza in Western Australia, an aged war widow, a woman desperately trying to maintain her independence, a woman who found that she was going to be taxed by this Government because she had someone living in her residence who was going to help to look after her and keep her independent. Not one Labor senator had the courage and was prepared to admit that that was a significant problem. Labor front benchers were not prepared to do that. The Treasurer (Mr Keating), responded to representations about the problems of quadriplegics and so on by saying: `We have considered all these matters and as far as we are concerned the tax is right in principle and should be applied'. Not only were the front bench members maintaining that stance, but also the back benchers of this Parliament, who one would have thought would have been a little in touch with the realities in the community, made not one word of criticism of this tax. Mrs Plozza's position has now been remedied. She is representative of one of the few groups whose position has been fixed by the Government, but there are dozens of other situations where hardship is being imposed on the men and women of Australia. Indeed, I wish to devote a good deal of my remarks this afternoon to the areas in which these hardships are being incurred, by people who cannot be described as people who are trying to rip off or take advantage of the tax system.

I have yet to hear a Labor person, a Labor senator, a Labor Minister or any Labor spokesman acknowledge the fact that the great bulk of what will be caught under the fringe benefits tax relates to provisions which are made for wage and salary earners who are in no way trying to work the system. Mount Isa Mines Ltd is one example. It has a very heavy cost burden loaded upon it due to this tax. It has given an estimate that 80 per cent of the tax that it pays for fringe benefits is for benefits which are payable to the blue collar work force of that company.


Senator Michael Baume —What about the impact on public servants, too?


Senator CHANEY —My friend and colleague, Senator Michael Baume, interjects: `What about the impact on public servants?' Literally dozens of categories of people, including public servants, are forced to change their abode at regular intervals and to live in government supplied housing, which will give rise to a liability for this tax. It is quite absurd to suggest that a network of tax avoidance is being caught up by these tax changes. The fact is that the Government has once been forced to review this tax, and that review has proved to be inadequate. It was forced to review it after there had been complaints from the Opposition, which were totally ignored, but then complaints from the Leader of the Opposition in Queensland, Mr Warburton, from the Premier of New South Wales, Mr Barrie Unsworth, another leading Labor figure at the State level, from the Premier of Western Australia, Brian Burke, another Labor leader, and of course from the Premier of South Australia, Senator Maguire's own State.

All of those Premiers had to draw attention to the disadvantages of this tax. Indeed, a senior Minister in the Government, the Minister for Industry, Technology and Commerce, Senator Button, in an interview early in October, made his point that there were massive administrative problems with the tax, and that it increased the paper work burden on business. He also said:

I don't like people having to do more paper work in business, I think that's crazy.

A little later in the same interview he said that he had seen his own form from the Department of the Senate that he had to fill in, and he said:

. . . I think it's horrifying.

I mention these things because one of the features of the debate on the fringe benefits tax in the Senate has been the gutlessness of Labor participants. Not once have they been prepared to face up to the very real difficulties that their constituents are facing. They come out here as the timid automatons who are told by the Minister to go out and defend the status quo, and they have shown none of the courage which has been shown by some members of the Labor Party in the lower House, who have been prepared to point out the hardships which have been arising under this tax. I hope that today we will see a little less of the sort of pathetic justification of what cannot be justified by the participants in this debate from the Labor Party.

I want to refer to what was said by a person that I thought might participate in the debate again today, Senator Graham Richardson. Senator Graham Richardson, of course, is not your ordinary back bench senator. Indeed Senator Graham Richardson is a man who supposedly has direct access to the Prime Minister (Mr Hawke). Indeed he has the sort of access to the Prime Minister that Mr Domican claimed he had to Senator Richardson. So it is a very open and free access and he has a position of very considerable power and influence. Senator Richardson is one of those people who call the shots in the Labor Party. Again, he is not one of the minor players, such as we are being subjected to this afternoon. What did Senator Richardson have to say when he was addressing the Labor Party in the Hunter Valley? I will quote him at some length because this is the first time that, apart from the Minister for Industry, Technology and Commerce (Senator Button), a Labor senator has been prepared to admit the truth about this tax. I will tell the Senate what Senator Richardson said in the Hunter Valley on 10 November. He said:

I want to give you an example of where I still think there is an improvement to be made in our review of the fringe benefits tax. If you look at the problems faced by Commonwealth Bank employees it is best crystallised. There are some 36,000 people working for the Commonwealth Bank, 2 per cent of them earn salaries of $28,000 or more. What we are talking about here by Australian standards is a low paid work force. The average salary is around $18,000-less than average weekly earnings. The salaries in that Bank have been depressed for years because they are getting another benefit, the benefit of low interest loans. But in the regime that faces Australia today-

he is talking about the wages regime-

they cannot get a big pay increase to make up for losing a low interest loan . . . and then we make a decision that affects the low interest loan as well.

Senator Richardson then went on to explain how the bank clerks reacted to this. He explained that when they had a one-day stoppage in three States, they had one meeting place yet 19,000 out of the 36,000 who were employed at that bank attended meetings. He pointed out that in Australian union history that is extraordinary. He pointed out that that was not a matter of dealing with a union such as the Builders Labourers Federation, that we were dealing with 36,000 white collar employees, not front line radical trotskyites but bank employees-bank tellers and the rest.

Why should we focus on the bank tellers? We focus on the bank tellers because that group, who, as Senator Richardson said, are earning less than average weekly earnings, are being directly and immediately affected by the Government's proposals. They, in common with the other people who are being affected by the proposals, have to put up with the fact that continually, from the Minister for Finance, Senator Walsh, down, they are being accused of being involved in tax rorts and rip-offs, and if they complain they are accused of being the defenders of tax cheats. On their behalf, I emphatically reject that suggestion, as I reject it on behalf of the Opposition. The reality is that the bank clerks are but one small aspect of the enormous impact that this tax is having on the men and women of Australia.

I suppose that Mr Arthur Ellis is a good example of another group which is severely affected. Mr Ellis is a car dealer. He is in the car retailing business and he has recently put his West Heidelberg Holden dealership under the hammer because he believes that the Government's tax measures have sapped new car sales to the point of no return. What Mr Ellis, who is a man who is employing 42 other Australians, has said is that the staff have all waited to see what happens on the fall of the hammer, that they are a combined and united team but that the fringe benefits tax has been the final nail in their coffin. So it is not just bank tellers; it is people such as Mr Ellis who are trying to make a living for themselves and for 40 other Australians by running a car dealership.

I have raised these concerns about the car industry time and time again in this place. Again I record that honourable senators opposite who come from the vehicle builders union and honourable senators opposite who come from the State of Victoria, from the State of New South Wales and from the State of South Australia, who are affected by the dramatic downturn in the car industry which is costing stability in that industry, have not come in and uttered a peep in defence of those industries; they have uttered not a peep in defence of their States and not a peep in defence of anything except whatever position the Government happens to adopt at the time. They defend the fringe benefits tax in its amended form with the same mindless, blind enthusiasm as they defended the fringe benefits tax before it was amended by the Government itself.

Let me quickly refer to some other areas where this tax is impacting and where it can be clearly seen that we are not dealing with the question of tax avoidance but are dealing with simply the requirements of employers to meet certain conditions if they are to carry on business in Australia. This Government is taxing employers under the fringe benefits tax when they take out death and disability insurance for their workers prior to their qualifying for the normal company scheme. If someone puts in bridging insurance to cover his employees against death and disability, this Government will impose a tax on him for doing it. If someone provides, as the Swan Brewery is doing, a carton of beer instead of the free of fringe benefits tax drinking allowance after work, which makes people a potential menace on the road, this Government will tax that person.


Senator Robertson —It doesn't. It is $500, and you know it.


Senator CHANEY —It does. It imposes the tax. Is it not sad? The dear old senator does not even know how his Government's tax applies. I can tell him that it does apply. This Government is still taxing the Christmas parties for children of employees. I would have thought that Senator Robertson knew the cost of a carton of beer. A carton of beer costs more than $10 a week, if one is getting a carton every week. For a senator who represents the Northern Territory, Senator Ted Robertson is woefully ignorant of the price of beer in this country. Annual picnics for retired employees-now there is a real tax dodge! Does the Senate know that some dreadful tax-dodging employers in this country turn on a picnic for their retired employees, and this Government puts a tax on them if they do? It puts a tax on a subsidy to run a company social club. It puts a tax on rations. It puts a tax on a sheep or a cow provided to pastoral workers. It taxes accommodation which is provided to school teachers, police, bank managers, and ministers of religion who take up country positions.

Since I have no more time to deal with examples I will give the Senate an example from Western Australia. From the electorate of Cowan-Premier Brian Burke's electorate-a church group employs a youth worker. It gives that youth worker accommodation so he can work with the many children who are homeless and destitute, or who are street children from that area. That church is having to pay fringe benefits tax on the accommodation which is provided for that youth worker. What an absurdity. This tax is full of those absurdities.

There are four reasons that I would like to give now as to why we are opposing this tax in principle. Firstly, the tax is one of unbelievable complexity. There are 139 pages of legislation, 176 pages of explanatory memorandum, two booklets of 69 pages, 14 rulings of 115 pages, plus all the supplementary material relating to the review of the tax which has recently been undertaken. Secondly, it is a tax which is wrong in principle because it puts the tax on people who do not receive the benefit-that is, it puts it on employers. Thirdly, it is a tax which is wrong because it is totally insensitive to the remote areas of Australia. I am horrified that Senator Robertson, who supposedly represents the Northern Territory, would defend a tax which impacts so heavily on the remote areas of Western Australia, Queensland and the Northern Territory. Fourthly, it hits at the productive sector of the Australian economy at a time when the economy is in near crisis.

This economy is going down the drain-$6,000m down the drain in the first four months of this financial year. The terribly sad thing about it is that this Government is still backed up by a bunch of back benchers who will justify anything. If this Government carried out the massacre of the innocents we would get Senator Maguire in here explaining that this was really the kindest way to get over the problem. I have never seen anything like the way Senator Maguire and Senator McKiernan come in here to justify any act of this Government, no matter how detrimental it is to their State. Let me make it quite clear that we will repeal this tax in all these areas where it should not apply. It will be repealed totally--


Senator Robertson —Lock, stock and barrel.


Senator CHANEY —It will be repealed lock, stock and barrel, as somebody helpfully said. Where there is tax avoidance by people on high incomes that will be fixed; they will be caught. There will be no difficulty about that. We will stop taxing the charitable workers, the youth workers, the live-in help at boarding schools, and those literally thousands of Australians who are working for their fellow Australians, who are trying to do the right thing and who are having heavy new tax burdens put on them by this Government. This Government is a disgrace and it should be chucked out lock, stock and barrel.