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Wednesday, 19 November 1986
Page: 2500


Senator McKIERNAN(4.20) —This afternoon the Senate is discussing a matter of urgency put forward by the Opposition. It reads:

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.

The matter of urgency was put forward by the Leader of the Opposition, Senator Chaney, from Western Australia. We find ourselves in very unfortunate circumstances because Senator Chaney, in indicating that this is a matter of urgency supported by Opposition honourable senators, put forward perhaps the weakest proposition that the worthy senator has ever put forward in this place. That is a reflection not only on honourable senators opposite but also on the Government. For the Government to be effective it needs a good Opposition. Senator Chaney is one of the brightest sparks on the Opposition benches, and if what is happening within the coalition is affecting one of its brightest people in that way, then the Government will not be kept on its toes in the way it ought to be.

Senator Chaney made a number of points in his contribution. He referred to the impact of the tax on auto dealers, and that is something I particularly want to address later in my contribution. I have talked to auto dealers in my home State of Western Australia, the State I represent in this chamber.


Senator McIntosh —It wasn't Peter Shack, was it?


Senator McKIERNAN —Certainly it was not Peter Shack. However, I certainly spoke to a Western Australian company and I will deal with that matter later. Senator Chaney and Senator Watson cried some crocodile tears about bank officers. They referred to the impact of the fringe benefits on bank officers. I do not know how many times Senator Chaney has actually spoken with bank officers. Not only have I done so but I had the privilege of attending the meeting the Commonwealth Bank Officers Association held in Perth when they made the historic decision to stop work for the first time in their history. The bank officers stopped work not because of what the Government is doing but because of what the management of the Commonwealth Banking Corporation is doing. They were not protesting about the Government's action at all. The people to whom I spoke during that meeting are fully in support of what this Government is doing to bring about an equitable tax system, a system we have desired for so long. However, the crocodile tears continued and are reflected in the matter of urgency that is before the chamber. It raises questions such as voluntary and charitable organisations. What do voluntary and charitable organisations think about the fringe benefits tax? I refer the Senate to the Adelaide Advertiser of 2 October this year in which the Executive Director of the Victorian Council of Social Service, Mr Tony Lawson, is reported as saying:

We will be actively promoting the value of the fringe benefits tax in a variety of ways.

The voluntary organisations to which Senator Chaney referred and about which he shed crocodile tears are actually supporting the fringe benefits tax. Later in that newspaper article Mr Lawson is reported as saying:

Before it was introduced a whole lot of people, business bludgers, were not paying their way in Australia.

The campaign against the tax was doomed . . .

He was referring to the campaign that Mr Ansett launched against the fringe benefits tax. Mr Lawson is also quoted as saying:

. . . people will recognise it as a campaign by a bunch of business wimps who are crying because the Government now requires them to pay their way in society.

Mr Lawson was referring to the voluntary organisations that Senator Chaney and Senator Watson shed crocodile tears for, and no doubt Senator Bjelke-Petersen also will shed crocodile tears in her contribution to this matter of urgency. In concluding his speech Senator Chaney mentioned a number of things which he believed would enable his Party to attain government. After his performance today that will be many years and many elections hence, unless something dramatic happens. The Opposition will not continue a number of measures such as the fringe benefits tax should it ever reach the government benches. I think the people of Australia deserve something better than this matter of urgency. I understand it is the fifth time it has come before the Senate.

Today we heard Senator Chaney say that the Opposition would not tax certain areas. We have heard the Leader of the Opposition (Mr Howard) say what the Opposition would not do about taxation; but what this country is crying out for-indeed, the Opposition has an obligation to do this-is someone who will put forward some alternatives. That is just not happening. Various spokespeople from the Opposition have said that the Opposition will abolish the fringe benefits tax, the capital gains tax and the tax on lump sum superannuation payments. The coalition's promises on lower taxation include the reinstitution of the entertainment expenses allowance-the free lunches. It will work towards the reinstitution of negative gearing on rental properties. It will seek a full flow-on of world oil price reductions. It will work towards the abolition of fuel excise indexation and the abolition of sales tax on oils and lubricants. It will seek to abolish the tax on wine. It will introduce child care rebates and restore income equalisation deposits and tax averaging. It will repeal the assets test. It will spend additional money on defence. It will reintroduce the full petroleum products freight subsidisation scheme. It will put a floor price on sugar of $240 a tonne and it will work towards the abolition of export inspection charges. This total package will cost in excess of $600m.

The people of Australia are crying out: `What are the Opposition's tax policies?' We are getting silence from the other side, and that is understandable because Opposition members are otherwise engaged at the moment. Mr Andrew Hay, one of the leaders of the New Right, said in Perth recently that the Opposition was like an Antarctic dog sled team. The head dog was doing his best but the rest of the dogs were yapping. The Opposition is yapping and doing other things because it has enormous problems within the Liberal Party at the moment. The coalition also has problems, judging from the comments attributed to Mr Sinclair the other day.

The fringe benefits tax has been a controversial tax. It is a tax about equity and justice in the Australian taxation system. We have seen an enormous shift over the years to those people who cannot in any way, and who mostly do not want to, avoid or evade paying their normal taxes. We have seen a growth in the areas of tax evasion and tax avoidance in this nation which has never before been witnessed. The growth has had its impact on the ordinary, honest wage and salary earners of Australia, who have had to pay up and finance the expenditures of government. There is no other way around it for such people. However, people in top positions within the free enterprise system can take steps to avoid paying tax.

The point must be made that the Government has reformed the taxation system to achieve a position of justice and equity. On 1 December-a week on Monday-Australian taxpayers will have their marginal rates of taxation reduced. The 25c in the dollar rate will go down to 24c; the 30c in the dollar rate will go down to 20c; the 46c rate will be reduced to 43c; the 48c rate will be reduced to 46c; and the 60c rate will be reduced to 55c. On 1 July next year the 43c rate will be reduced to 40c; the 46c rate will also come down to 40c; and the 55c rate will come down to 49c. For the first time the taxpayers of this country will be assured of picking up a majority of the income that they earn. This was not the case when the Opposition was in government. In the seven years that it occupied the treasury bench, the only real growth industry in this country was tax avoidance and tax evasion.

Because it is a controversial tax, as most taxes are, this tax has been, and it continues to be, subjected to campaigns of exaggeration, distortion and, indeed, lies by the various interest groups and the Opposition.


Senator Parer —And unintended consequences.


Senator McKIERNAN —Senator Parer, they are trying to detract from the essential fact that the fringe benefits tax introduces for the first time fairness to the system and real tax cuts for the people we represent-the wage and salary earners of this country.

Senator Chaney had something to say about auto dealers. I do not know why he did not mention an auto dealer from Western Australia. I do not know what the relationships of the Liberal Party in Western Australia are at the moment. Perhaps the Liberal Party is in a state of flux in Western Australia just as it is in Canberra at the moment. The auto dealer that I am particularly concerned about is a company known as Eurocars, an up-market auto dealer which operates in South Perth, Western Australia. The Managing Director of that company is one Mr Rod Slater. Mr Slater had the wisdom, if one can call it that, to send a letter to each of his employees. That letter was later copied by Mr Gordon Crump who operates two car yards-one at Kewdale and the other at Victoria Park in Western Australia.

The letter is fairly lengthy and time will not allow me to refer to it in detail. However, I will quote part of it. Mr Slater made the point that fringe benefits given to employees are usually given as a token of appreciation. Honourable senators on this side of the House and the other side of the House know that employers very rarely give anything without some form of struggle. The letter stated:

If I support your Social Club then I am `fined'. If I permit you to work on your own car on my premises, then I am `fined'. If I offer you the unwanted packaging that our spare parts arrive in, I am `fined'. If I permit you to use my trailer to collect a load of wood for a dying pensioner in your neighbourhood-

that is sick-

then I am `fined'. If I allow you to take home any of my tools or equipment to work on your own car, even if that equipment would otherwise lie idle, even if that equipment would reduce the danger of injury to you, then again I am `fined'.

What a gross distortion of reality and facts this letter is. This letter was circulated to individual employees with a plea for them to examine their consciences the next time they vote. Mr Slater makes the point in his letter:

As your employer, it is not my prerogative to instruct you how to vote, however I wish to encourage you how not to vote.

This is an appalling example of free enterprise in Australia.

Senator Chaney made some reference to me as a representative of Western Australia. I ask him where he stands in respect of the comments made by his colleague the Liberal member for Murchison-Eyre in the House of Assembly in Western Australia who last evening called for secession by Western Australia from the Commonwealth. I wonder where that would leave the Liberal Party in this place which is at the moment lacking leadership. Although a little leadership is being given by Senator Chaney, the honourable senator would not be a member of this place if Western Australia seceded. I hear that the yapping dogs have returned. I want to conclude my speech by putting forward the following words of wisdom for the whole of Australia: A fair country deserves a fair tax system. That is what this Government is giving to the people of Australia. It is something which is long overdue.