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Wednesday, 19 November 1986
Page: 2503


Senator BJELKE-PETERSEN(4.35) —I support the motion moved by the Leader of the Opposition (Senator Chaney). It states:

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.

In supporting the motion, there is no doubt in my mind, and probably in the minds of most people in Australia, that the Federal Labor Government has completely misread the Australian public on the issue of fringe benefits taxation. The Government is in a terrible mess and I am sure that it knows it. Everywhere I go across Queensland, people are totally confused and very concerned about the fringe benefits tax. First, there was the massive 150-page document which the Federal Government handed around and said: `Well, here it is-work it out for yourself'. Then, a few weeks ago, the Government decided that it had better look as though it was going to remedy a few of the anomalies so now the people of Australia, unfortunately, are more confused than ever.

Senator Richardson and I are not often in agreement but I would have to say that I agree with what he said recently about the fact that the fringe benefits tax will affect many low income earners and struggling Australian families. Senator Richardson mentioned specifically bank employees who are losing their cheap home loans. I must say that I saw an article in today's Sydney Morning Herald which said that banks were facing disruption over the fringe benefits tax. It also pointed out that bank workers are the largest group of employees to suffer under the fringe benefits tax through the banks' proposal to increase the interest on loans and credit cards. As a result, the banks and Australians are faced with threatened pre-Christmas disruptions in the banking sector. That is what has happened in only one of the many areas which are affected by the fringe benefits tax.

I am concerned particularly about the families who are employed on farms or who move around the country doing seasonal work. The fringe benefits tax certainly affects them. Every time they have a meal, their employer is taxed a dollar. The employer only has to provide a cow to enable his employees to have fresh milk and that is regarded as a fringe benefit and is subjected to tax. Of course, accommodation provided to employees on the farm is also subject to fringe benefits tax.

School teachers, likewise, are adversely affected. Many teachers are posted to country towns around Queensland, and throughout every State in Australia, and have to complete a two or three-year term of service. I would say that they always do a very good job. Of course, the Education Department has to give them a place to live as these people do not automatically stay at one place for a very long time. The Federal Government has now decided that it is going to tax the cost of the accommodation provided to school teachers. The same applies to wardens and to live-in house keepers-they will all be subject to the tax.

Families living in coal mining towns are in a bad way, too. The mining companies have for years spent millions of dollars making these towns better places in which to live. They are the types of towns to which young families would be attracted-they offer the most modern facilities and accommodation. Now, of course, the Government says to the mining companies that they have to pay tax on money they give for community projects, roads or subsidised travel.


Senator Button —How much money does the Queensland Government rip off them in rail charges?


Senator BJELKE-PETERSEN —The Queens- land Government does its fair share. The mining companies cannot now provide subsidised housing. Queensland towns like Dysart and Middlemount, which I visited a month or so ago, are both very go-ahead places which are providing very modern standards of facilities and housing. I might say, too, to the members of this Senate that the State Government in Queensland has done a tremendous lot to help towns like Middlemount, Dysart and Morenbah develop and grow. That is what happens in Queensland all the time. There is so much growth and development that Queensland is going ahead and leaving all the other States for dead. Certainly these towns are going to suffer from the fringe benefits tax. What really annoys me is that this tax is hitting hard at those sectors of the community which are really our export earning industries, those sectors which provide a lot of the export earnings from which this Federal Government benefits. I am sure Senator Button would be the first to recognise that through the mineral and agricultural exports from Queensland Australia's export earnings have grown a lot.

It has been suggested in some quarters that the fringe benefits tax will force rural workers in the outback to use kerosene lamps and meat safes. No doubt that is because of the fringe benefits tax being put on power provided by the owners of properties for their employees. Despite provisions for the so-called unintended consequences that the Prime Minister (Mr Hawke) talks about so glibly, the fringe benefits tax is still a tax on exports. It will slug the agricultural and mining sectors which, as I said, contribute the bulk of Australia's export income. Despite changes to the remote area housing provisions, the tax will still cost the mining industry about $40m a year. Farmers will still be hit for accommodation supplied to a farm worker and his family. The fringe benefits tax will make both these sectors less competitive at a time when international commodity prices are low.

I would like to quote from the editorial of the Australian of 8 October, which I think sums up fairly accurately the National Party of Australia attitude to the effects of the fringe benefits tax. It stated:

The fringe benefits tax will particularly hit those Australians, mainly concentrated in vital export industries, who are attempting to develop the Outback, in Western Australia, Queensland and the Northern Territory. In order to attract a work force to these remote areas it is necessary to offer subsidised housing and transport. These are not the kind of fringe benefits which should be taxed, as they are essential elements of working in the Outback, not the rorts designed to avoid tax.

`Hear, hear', I say. The effects of the fringe benefits tax on small and big businesses throughout the country will also be enormous. It has been estimated that some 590 public servants will have to be employed at a cost of about $20m just to administer this tax. Already $382,000-odd has been spent on producing the fringe benefits tax booklet, which explains absolutely nothing to those who are to be affected. I had to take that booklet to my tax man to have it explained. I think I am a fairly astute person. I have already paid my first instalment on the tax, a little bit early, I must say, but I went ahead and did it because we have to have caretakers looking after our home in the Bunya Mountains, so the tax was payable. But we cannot claim for it on income tax, so we will have to pay not only the ordinary tax but also this fringe benefits tax. It is bad enough for us to have to pay it, but how will some people on the land, who have no income, be able to pay the fringe benefits tax?


Senator Collard —They will have to borrow at high interest rates.


Senator BJELKE-PETERSEN —That is exactly what they will have to do, borrow at high interest rates. That is another cause of complaint about this Government, the high interest rates. An amount of $1.6m has gone to providing 54 public servants just to man the tax hot lines.

An article in the Australian of 29 August reports that a survey of 80 small to medium Australian companies found that the FBT will result in fewer jobs, reduce investment, and higher prices.

I hope that the Government is not foolish enough to assume that costs such as these to big and small businesses throughout Australia will go unnoticed by the average man or woman in the street. According to chartered accountants Arthur Andersen and Co., 65 per cent of the 70 major companies it surveyed said that they would pass on the fringe benefits tax induced costs to consumers. These are some of the real problems, as I see it.

Another report in the Australian indicates that, while the Department of Defence estimates its fringe benefits tax liability at $90m this year and $115m in a full year, the Armed Forces Federation of Australia says that it could easily be around $200m. While I am on the subject of the defence forces, let me enlighten honourable senators with this fascinating little piece of information that I found out. A member of the Department of Defence said that the Department is paying between $70m and $150m in fringe benefits tax, but it is paying more in fringe benefits tax than it is paying for ammunition to defend this country. If that is not the most ludicrous thing I have ever heard, I do not know what is. Likewise, the Taxation Office is having to pay itself $400,000 in fringe benefits tax. If it were not so serious and so unbelievably stupid, it would almost be laughable. I am not laughing, and I do not think the majority of hard-working tax paying Australians out there in the real world are laughing either, because there certainly is a real problem.

As far as I am concerned, the fringe benefits tax still contains a great number of very serious anomalies, despite the review that was conducted just before the Queensland election. We all know why it was conducted then. It was done then to try to help the Australian Labor Party get into power.


Senator Walters —It didn't help it much.


Senator BJELKE-PETERSEN —As Senator Walters says, it did not help the Labor Party to get into power. It got only just over 40 per cent of the vote, and that is very interesting. Unfortunately the Labor Party does not accept the fact of preferential-type voting. Between us and our Liberals up there, we got well over 50 per cent of the vote.


Senator Brownhill —Fifty-six per cent plus.


Senator BJELKE-PETERSEN —That is quite right. These are some of the things that are of great concern. The Labor Party could get only just over 40 per cent, and that is certainly not enough to govern in Queensland. I could go on and on about the anomalies that have been caused by this fringe benefits tax. I think of the Government's treatment of religious people. It seems to me to be a very poor state of affairs when a nun is forced to pay fringe benefits tax because she uses a church vehicle just to do her weekly shopping and things like that. These are some of the things that I am sure are causing a lot of bother. I can quote even leaders of the various State governments on this. Barrie Unsworth, the New South Wales Labor Leader, said that Labor's electoral standing was being harmed as a result of the fringe benefits tax. Even Tom Burns, the Deputy Leader of the Labor Party in Queensland-I do not know how long he will be in that position because they say they are going to get rid of him-said that the fringe benefits tax was `sheer stupidity'. John Bannon and John Cain have both talked about the fringe benefits tax.


Senator Walters —And John Button.


Senator BJELKE-PETERSEN —Yes, Senator Button himself, on the Michael Schildberger show, went on record as saying that he did not want to debate the technicalities of the fringe benefits tax but he thought that the form was horrifying. He said that, if it is too difficult for him, he could appreciate that it would be difficult for others. Perhaps that is why I found it rather difficult to fill in the form when I got it. These are some of the things that are very worrying and should concern people. There is no two ways about it. I also want to draw the attention of the Senate to the fact that the Treasurer (Mr Keating) made an astounding admission when he said that the Government would not impose the fringe benefits tax on employees because of fear of industrial turmoil. What does that say to honourable senators? It says to me that the trade unions are the bosses in this Government. In fact, as I have said so often, the Australian Council of Trade Unions is the de facto government of Australia. If Bob Hawke had stayed President of the ACTU he might have been running Australia right now. That is something we really should think about.

There is so much that I want to say about this. The fringe benefits tax is a bad idea. Our economy is sinking further into the mire every day and yet this Government wants to tax the employers further. There is no doubt that the fringe benefits tax will slow down economic growth even further. I support the motion of urgency that has been moved by Senator Chaney to abolish this fringe benefits tax. When we get back into government after the next election we will abolish this dreadful burden on Australia's productive capacity.