Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Wednesday, 26 November 1986
Page: 2779

Senator MAGUIRE —Has the Minister representing the Treasurer seen the latest survey from the Australian Bureau of Statistics on employment and fringe benefits? If so, is he aware that at August 1986, 97.4 per cent of employees in the highest income bracket-over $600 weekly-received one or more fringe benefits? Is he aware that only 35.4 per cent in the lowest income bracket-below $120 a week-received employment benefits? Are these findings consistent with Senator Chaney's claim last week in the matter of urgency debate that those most penalised by the fringe benefits tax are low income earners? What are the policy implications of the findings?

Senator WALSH —I have a summary of the figures. They give the lie, of course, to the assertion in Senator Chaney's speech on the urgency motion last week. The way in which Senator Maguire's question is framed understates the degree to which fringe benefits are concentrated among high income earners. That point was not adequately appreciated in the report in yesterday's Australian Financial Review headed `Perks Go to all Groups' which said that fringe benefits are received by a wide cross-section of employees and so on. It then failed to distinguish between the provision of a fringe benefit and of a fringe benefit which is subject to fringe benefits taxation. That is a very important distinction because when one looks at the Australian Bureau of Statistics figures to which Senator Maguire refers, of the percentage of employees receiving fringe benefits, 80 per cent receive sick leave-which is defined for this purpose as a fringe benefit-more than 80 per cent receive annual leave, about two-thirds receive long service leave and about 39 per cent receive superannuation.

The important point is that none of those payments which are received by the great majority of the work force are subject to fringe benefits taxation. Some 18 per cent of employees receive goods and services. They were in the next highest fringe benefit group, as defined by the ABS. It is unlikely that many of those 18.6 per cent would be affected by fringe benefits taxation. Given all the qualifications in the FBT legislation, it is unlikely that the total value of the benefit received would exceed $500.

Conversely, when one looks at items subject to fringe benefits taxation and at the stratification on income grounds of the recipients of those benefits one finds exactly what Senator Maguire suggested. I take, for example, low interest finance. The lowest of five income groups in this analysis received no low interest finance. The next lowest group-1.6 per cent of employees-received it. When one goes to the highest group, above $600 a week, some 6.6 per cent received it.

The same thing happens with medical fees. In the lowest group-one-fifth of income recipients-1.1 per cent receive some medical fringe benefit. In the highest group, the figure is 7.9 per cent, and so on.

In closing, the two important points I want to make are, firstly, that that article in yesterday's Australian Financial Review either is misleading or could mislead people because it fails to distinguish between fringe benefits as defined by the ABS and those fringe benefits which are subject to FBT legislation; and, secondly, the statistics absolutely contradict the assertion in Senator Chaney's speech on the urgency motion in the Senate last week and demonstrate that those benefits which are subject to fringe benefits taxation are overwhelmingly concentrated at the high end of the income spectrum.