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Tuesday, 24 February 1987
Page: 485

Senator CHANEY —My question is to the Leader of the Government in the Senate. I refer the Minister to today's announcement by the Treasurer of the planned 14 May statement on expenditure savings measures. I preface my question by welcoming the fact that the Government has finally acknowledged the need for such a statement, as was called for by the Senate in September of last year and again last week. I note that the Treasurer seems to have developed a liking for the date of 14 May. That was the day on which the Treasurer last year made his banana republic prediction and I hope he will do a bit better this year. I ask the Minister: Is it the Government's intention to confine the statement to cost cutting measures? Does the Minister agree that in order to make maximum economic impact the statement should also address the taxation system and, in particular, the disincentives that this Government has imposed through measures such as the fringe benefits tax and the capital gains tax?

Senator BUTTON —It is true that I and other Ministers have been asked various questions as to whether there will be a May statement. In answer to those questions I have repeatedly said that the Government will consider that matter, and when it makes a decision it will announce it; that happened this morning. I draw the Senate's attention to the fact that, even though the Opposition may have called for a statement in September of last year, it is very difficult to have a May statement before May. It does not matter particularly when one makes the decision about it so long as one makes a decision about it and makes a statement.

Senator Michael Baume —Why don't you make it when we are sitting?

Senator BUTTON —Oh, be quiet! The honourable senator should go back to his weight watching and do a bit of exercise at lunchtime. Of course, the Government, the regime of which has been characterised by wage restraint, restraint in a variety of areas and indeed restraint in fiscal policy compared with previous governments, will be making a statement designed to produce the maximum economic impact given the circumstances. I was very surprised that Senator Chaney did not ask me today what would be in the May statement.

Senator Chaney —That is tomorrow's question.

Senator BUTTON —That is tomorrow's question? Yes, I would have assumed that. Instead, what Senator Chaney has done today is to suggest what might be in it, which I suppose is always helpful. He asked: Will it involve the consideration of taxation issues? What the May statement will involve will, like the timing of the statement, be considered by the Government and an announcement will be made at the appropriate time.

Senator Macklin —On 14 May.

Senator BUTTON —I suspect that Senator Macklin is better on these matters than many of us and that he is probably right, that it will be on 14 May. The question as to whether we will consider taxation matters is not one that I can answer at present, but I think it most unlikely. I am surprised, however, that the Opposition should have asked a question about whether we would be considering taxation issues in the May statement. The community waits with bated breath for a coherent statement on taxation policy from the Opposition. Last week three of the folk heroes of the last Government, Mr Anthony, Mr Nixon and Mr Fraser, were up here giving words of wisdom to the Opposition about its problems. What a great trifecta they would be to give the Opposition advice about taxation issues! This year is the anniversary year of the 1977 election in which the Opposition-then the government of the day-went into the election with a `dial a tax cut' program, promising tax cuts following that election.

Senator Dame Margaret Guilfoyle —Are you going to change--

Senator BUTTON —I am surprised that the honourable senator would chirp up at this time. She was one of the Ministers who were party to that. Four months after they made that promise to the Australian people, they abandoned it. You abandoned it, did you not, Senator? As we are having a little interjection time, you abandoned that promise four months after you had made it. Senator Withers was there at the time-or had he been sacked then? I do not recall but I think he was there at the time. Senator Chaney was not then in the Ministry and, of course, Senator Messner was the latest arrival of all. Of course, Senator Sir John Carrick was there and he will recall that great statement that they made about tax cuts in 1977 and how they then totally dishonoured that promise. In the whole period of the Fraser Government regime, marginal tax rates were not lowered in Australia.

Senator Chaney —I take a point of order, Mr President. It is quite clear that the Minister is now debating the question. I asked a very simple question: Will he tell us whether the May statement will include measures relating to taxation? His answer to that has already been given. It was that the Government is yet to make up its mind on that subject. From then on he simply engaged in a debate on the history of tax cuts in this country, and I suggest that you call him to order.

The PRESIDENT —There is no point of order. Senator Button, I would suggest that it has been a long answer, and that maybe you should bring your answer to a close.

Senator BUTTON —Mr President, I was not debating the history of tax cuts; I was debating the history of non-tax cuts under the Fraser Government, which is a very important and different issue. The point I was simply making is that, in terms of credibility, Senator Chaney's question contains the suggestion that we should consider tax cuts in the May statement. By the most incredible collection of non-tax cutters this country has ever known, the most incredible collection of people who had dishonoured promises on this issue, who did nothing about marginal rates and about incentivation, as it is called, in the whole seven years of their Government, we are asked whether the May statement will include consideration of changes to the taxation regime.