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Thursday, 19 March 1987
Page: 971


Senator SANDERS(12.35) —I do not often enter into economic discussions or discussions on taxation. I feel they are an unnecessary diversion from the real world-the cessation of nuclear hostilities and the protection of people's air, water, shelter and food.


Senator Walsh —The fairies at the bottom of the garden.


Senator SANDERS —The Country Party member in drag, Senator Walsh, is interjecting. I have become quite familiar with the situation. I had the misfortune to try to follow the injunctions of various Prime Ministers and to help Australia by producing an Australian product, by going into business for myself, becoming a small business person. I found it a very difficult procedure in many ways, certainly in Tasmania. One gets no help from the Tasmanian Government or from the Federal Government. Still, we persevered. We manufactured a slow combustion wood heater which found a niche in the market-place. We had a struggle, but after the first year we started to show a profit. We thought that was wonderful. We were employing people. We actually had our small operation set up in a place called Oatlands, Tasmania, which is a very depressed area. Ours was the only industry in town. After the first year we thought we were doing all right. We got hit with a tax bill. We thought we could survive the bill for tax on the previous year's income. Then we learned about provisional taxes.


Senator Townley —Plus 11 per cent.


Senator SANDERS —Yes. What kind of a country imposes a tax on next year's earnings? Provisional tax was brought in in the dim dark past as a one-shot inflow of income into the Government's coffers and it stands to this day. It is a complete negation of any governmental statement that the Government wants to support small business. Provisional tax does not penalise Broken Hill Proprietary Co. Ltd, Comalco Ltd or any of the big people; it penalises small business persons who are just starting out. It is a regressive tax. It stifles personal initiative. It stifles anybody who tries to give it a go. This is one problem we encountered. The other problem is that the tax laws in this country are so complicated that the Australian Taxation Office itself cannot interpret them. I see some smiles from the advisers in the chamber. Perhaps they can understand them. Certainly the normal business person cannot understand them.


Senator Townley —Perhaps they cannot understand them.


Senator SANDERS —Maybe what Senator Townley said is right; perhaps they themselves cannot understand them. A small business person who is struggling to do the right thing-to pay last year's taxes, to pay the provisional taxes-tries to interpret the legislation but cannot do it. He goes to the Tax Office, which says: `We cannot interpret it either, but if you do not pay that tax you are in big trouble'.


Senator Watson —That is right. Twenty per cent.


Senator SANDERS —Yes. What kind of system is this? What kind of government which claims to be acting in the interest of the people of Australia can bring in a law such as this? Before I became a politician I considered myself a well educated person. I have a bachelor's degree, a master's degree and a PhD. My mind has since turned to jelly but, even so, I cannot interpret this tax.


Senator Watson —You are not the only one.


Senator SANDERS —As Senator Watson says, I am not the only one. How is the average business person supposed to interpret it? He cannot. The Tax Office cannot. There is an urgent need in this country to go through all the regulations and to put them into English so that people can understand them. I think many people are being accused of tax avoidance when in fact they simply cannot understand their obligations because they cannot understand the law. I would like to see the Tax Office prepare easy to understand pamphlets so that the small business person does not have to hire an accountant to manage his business. What small business person can afford a full time accountant just to work out tax? I would like to see the elimination of provisional tax. I would like to see it phased out. I am sure if it were just chopped it would cause a great hole in the Government's Budget, but it should be phased out. I think perhaps in the first year we could exempt businesses employing fewer than 10 people; in the second year, fewer than 100; then maybe fewer than 1,000 and fewer than 10,000 and so on until the tax is completely phased out.


Senator Walsh —Do you think PAYE taxpayers should be allowed to pay their tax 12 months late as well?


Senator SANDERS —Yes, they should, as a matter of fact. Why should the Government get the interest on it? Why should the taxpayer not get the interest on it? That is what provisional tax is all about. The Government is getting the interest on this money a year ahead of time. Certainly, I would like to see provisional tax eliminated. If it is not to be eliminated, I would certainly like to see the elimination of the provision to have to pay it quarterly.