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Wednesday, 10 December 1986
Page: 3695


Senator BROWNHILL —My question is directed to the Minister for Finance. In the light of answers given by the Minister earlier today regarding the recipients of fringe benefits, is the Minister aware of the Australian Bureau of Statistics survey which shows that of people with incomes under $199 per week, 131,500 or 21.1 per cent are in receipt of fringe benefits in the form of goods and services; over 26,000 have a telephone fringe benefit; nearly 15,000 have a housing fringe benefit; 12,000 have a medical fringe benefit; and 11,700 have electricity provided as a fringe benefit? In the light of those examples, is the Minister still prepared to claim that fringe benefits are provided only for the wealthy?


Senator WALSH —I do not remember ever saying, or indeed anybody else in the Government ever saying, that fringe benefits are received only by the wealthy. What many of us have said and what is indisputably true is that overwhelmingly fringe benefits have been directed towards higher income earners. I did not have a chance to take down all the figures Senator Brownhill mentioned, but I did take down the first one. Senator Brownhill said that 21.1 per cent of wage earners earning less than $199 per week receive a fringe benefit in the form of goods and services. I have seen similar figures to that, so I am quite willing to accept that as being correct. However, Senator Brownhill's analysis is inadequate. Under the de minimis provisions of the fringe benefits tax, any benefit of a lesser value than $500 over the whole year will not be taxable, so almost all of those 21 per cent of taxpayers who have been getting some fringe benefits through goods and services will not be affected by the tax, because of that. Moreover, the $500 de minimis provision compounds the pre-existing generous treatment of fringe benefits provided as goods and services under which the FBT, even in the absence of de minimis provisions, would not apply unless the goods sold by the employer to the employee were sold at less than wholesale prices. The limit may be even less than that; I will check later. The important thing is that even without the de minimis provisions goods provided to an employee could be provided at significantly less than the retail price, and of course the provision of goods to an employee at the retail price would be part of the Australian Bureau of Statistics definition of a fringe benefit provided to such a worker.

In other words, in short, there is absolutely no doubt that overwhelmingly the recipients of fringe benefits of the type which will be subject to tax under the Government's legislation were high income earners. The benefits were disproportionately concentrated among high income earners and, as I mentioned last week, depending on the bargaining power of the employee and employer respectively, very often the benefits were creamed off by the employer as well.