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Wednesday, 1 April 1987
Page: 1605

Senator MESSNER —I refer the Minister for Finance to the increasing public speculation that the Government is considering the introduction of new taxation measures in the superannuation area and the concerns that have been raised in respect of those proposals, particularly by the Business Council of Australia. Will the Minister inform the Senate of when he first became aware of recent proposals to change the present tax concessions and arrangements in the superannuation area? In view of the Minister's recent meeting with the Australian Council of Social Service, as reported in yesterday's Press, can the Minister indicate whether the Government is giving serious consideration to proposals to tax the investment income of superannuation funds, to change the present tax deductibility of super- annuation contributions or to increase the existing tax on lump sum superannuation payments? Further, does the Minister agree with the views of the major superannuation funds and a number of employer organisations, including the Business Council, that it is crucial for sensible retirement planning to maintain existing tax concessions in the superannuation area?

Senator WALSH —The only serious proposition for a new tax that I am aware of is the Opposition Leader's policy of bringing in a value added tax at a rate of 8 per cent. But I understand that that has now been vetoed by the National Party. It was a proposal to which I think Senator Messner also put his name at one stage. But the Liberal Party, consistent with its recent custom, has, of course, meekly, supinely and cravenly caved in to every bit of pressure that is put on it by the rednecks from the north.

I have from time to time seen propositions raised in the Press. I am sorry that I cannot remember exactly when it was, but certainly some months ago I recall seeing propositions in the Press from, among others, Daryl Dixon, who is currently on leave from the Public Service, and also I think from Mr Disney of the Australian Council of Social Service, that there should be changes to the taxation of superannuation. I recall reading in the Senate only last week some sections from a paper circulated by the Australian Mutual Provident Society on exactly the same subject. I am sure that Senator Messner will remember that. The AMP Society said that the only way in which the present favourable tax treatment for superannuation funds can be justified, and the only way that any political realist would expect it to survive, is if it is accompanied by measures like an assets test to stop double dipping.

The Opposition is committed to abolishing the assets test, so Mr Howard said as recently as yesterday. If that were to happen, under the rules laid down by the AMP, according to the logic of the AMP, the preferential tax treatment of superannuation funds would have to be curtailed or abolished. So if there is any threat coming to the superannuation funds in that way, it comes from the Opposition via its proposal to abolish the assets test rather than from anything else.

As to anything at all that the Government might be considering, I repeat what I have said ad nauseam in the Senate: I will not confirm or deny any rumour that Senator Messner is trying to pump up and get running around the Press Gallery or any rumour that the Press Gallery pumps up and sets running itself.

Senator MESSNER —Mr President, I ask a supplementary question. In his usual blustering manner the Minister has not bothered to answer the main points of my question. I will just repeat the main point to which I am seeking an answer. Did the Minister in fact in his recent meeting with ACOSS learn of the plans to put up the tax on investment income and did he in fact indicate the Government's position at that stage to ACOSS?

Senator WALSH —The Australian Council of Social Service has been campaigning on this issue, as I said earlier, for at least several months and possibly long before I was aware of it. As to what Mr Disney said to me in my office, I regard that as something between him and me.