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Tuesday, 17 February 1987
Page: 74

Senator MESSNER —Is the Minister for Finance aware that the marginal rate of personal tax for taxpayers on average weekly earnings has increased from 30 per cent in 1983 to about 45 per cent in 1986-an increase of 50 per cent-and this all during the term of the Hawke Labor Government? As this is the result of `bracket creep' and its effect is significantly increasing the total amount of tax paid by thousands of ordinary Australians, how does the Government plan specifically to address this problem which cannot be covered by the tax reductions foreshadowed for 1 July this year and return these tax increments to honest Australians who are struggling to maintain their standards of living?

Senator WALSH —If people pick a particular level of income where 0.001 per cent of taxpayers might actually be found and if they then select the time period carefully as well, they can come up with what superficially seem to be quite significant figures, as Senator Messner has done. However, the fact is that any responsible government-a category which categorically excludes the last coalition Government in Australia under the Treasurership of the present Leader of the Opposition-must at least in the long term require that its level of expenditure be matched by its income. This Government has been moving in that direction ever since it came into office. When we came into office we inherited a $9.6 billion impending deficit-that is what we inherited from Mr Howard. If Mr Howard had applied a rate of taxation which was necessary to fund his extravagant spending, then the rates of tax imposed under that Government would have been very much higher than they were. But Mr Howard opted for fiscal irresponsibility in the same way that--

Senator Chaney —I take a point of order, Mr President. The Minister is clearly misrepresenting the facts since the Government in which he is Minister for Finance has brought down the highest spending, highest taxing Budgets in Australia's history. None of Mr Howard's Budgets were at that level of expenditure or taxation. This debating of the questions which has ensued during this Question Time tends to make a farce of a procedure which is intended for obtaining relevant information from Government Ministers. I suggest that you call the Minister to order and sit him down.

The PRESIDENT —There is no point of order. I have no power to direct a Minister as to how to answer a question. However, I remind all Ministers of standing order 100 which deals with debating the issue.

Senator WALSH —I do not believe-and I note that you, Mr President, agree-that I was debating the question. I was simply pointing out that had a level of taxation appropriate to the level of expenditure been imposed in the final years of the Fraser Government, then the tax rates would have been very much higher than they were. That Government opted for fiscal irresponsibility and a rapidly increasing level of Budget deficit in its last years in office. In closing, I simply note that in Opposition the coalition continues to preach exactly the same policy. It has a $10 billion credibility gap. We have the obvious snake oil merchant from the north peddling his snake oil and we have the official Opposition peddling a slightly watered down version.