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Wednesday, 24 October 1956

Mr CAIRNS (Yarra) .- This measure, the Income Tax and Social Services Contribution Assessment Bill, highlights the most important differences between the Liberal party and the Country party, now in office, and the Labour party, now in Opposition. This difference can be seen if the electorates represented by members are examined. The average income of electors in the divisions represented in this House by members of the two governing parties is considerably higher than the average income of electors in the divisions represented by members of the Labour party. I can never understand why electors should elect members of the Australian Country party to represent them here, and I will exclude them from my remarks. Metropolitan electorates in which well-to-do people live are represented here by members of the Liberal party, and working-class areas, where the average income is probably, at the most, £17 a week, are represented here by members of the Labour party. That statement has elicited some noisy interjections from honorable members opposite. I know that it is a fact that they find very unpalatable, but I remind them right at the start of my speech that this measure is the kind of legislation one would expect to be formulated and supported by members representing electorates whose inhabitants are wealthy or fairly well-to-do. The bill is a reflection of the main tax proposals outlined in the budget. In fact, it is, substantially, the only tax measure deriving from the Government's policy for this financial year as announced in the budget.

What has the Government to offer us in its tax proposals for 1956-57? It offers us legislation which provides for an increase in concessional tax deductions that may be enjoyed by members of the community who can afford to increase their already high contributions to superannuation schemes or friendly societies, or in respect of life assurance policies. The concession in these cases is to be increased from about £4 a week to about £6 a week. The bill also provides for an increase in the concessional deduction enjoyed by members of the community who can afford to pay for the education of their children. The concession in this case is to be increased from £75 to £100 for each child. 1 do not know one person whom I represent in this chamber who can afford to pay £4 a week to a superannuation scheme or a friendly society, or as premiums for a life assurance policy, or who can pay 30s. or £2 a week for the education of each of his children. I suggest that the people who can afford to do those things are represented in this chamber by honorable members opposite, and that this measure, with its generous provisions to benefit well-to-do people, is the kind of taxation measure one would expect from a class-conscious government.

Mr Roberton - Nonsense!

Mr CAIRNS - This is precisely the sort of legislation we would expect to be supported by honorable members opposite who, like the Minister for Social Services (Mr. Roberton), indulge in turgid denunciations of socialism. I say that if this is the kind of one-sided, biased class legislation we are to have placed before us by this Government, the sooner we have more socialism the better. The attitude of the Government can be deduced from the characteristics of the measure. I suggest that the concessions made in the measure are made to people in the higher income brackets, and to those people alone. This is the same government that makes concessions to private business interests, despite the receipt by those interests of already highly excessive profits. I suggest that if the Government, in this time of so-called prosperity when the money income - I repeat, the money income - of the Commonwealth has never been so great, can afford to give concessions to taxpayers it should be giving those concessions to family men on low incomes, on whom has fallen the brunt of the inflation produced by the Government's bankrupt financial policy. But this Government is a government serving the wealthy, the well-to-do, and the private business interests.

The bill contains concessions that benefit only the well-to-do. It provides that the maximum allowable deduction for life assurance premiums, superannuation contributions and subscriptions to friendly societies shall be increased from £200 to £300 a year or, on a weekly basis, from almost £4 to almost £6. The estimated cost to the revenue given by the Treasurer (Sir Arthur Fadden), when he introduced the measure, is about £450,000 annually. The honorable member for Ryan (Mr. Drury) said a few moments ago that a large class of people would benefit from the measure. But who will benefit from it? Just what proportion of the people can afford to pay between £4 and £6 a week for insurance? In the first place, taxpayers, in order to benefit from the measure, must already be able to afford to pay about £4 a week in those avenues of expenditure. I suggest that in order to be able to do this a taxpayer would have to have an annual income of at least £1,500, or, more likely, £2,000, which, on a weekly basis, is £40. It is for the benefit of that kind of people that the Government is legislating. If that is true - and it is open to argument - I point out that, according to the 34th Annual Report of the Commissioner for Taxation, in a table at pages 56 and 57, the number of persons who earn £40 a week is 129.180, or only 2.72 per cent, of the total of income earners of 3,470,866. That is the small proportion of people who, at most, will benefit from this measure. That relatively small number of people had, in the last financial year, before paying tax, £450,849,000 of income, or 19.1 per cent, of the total taxable income in Australia.

A Government supporter may say, " Yes, but what happened after our exorbitantly large tax rates were applied to these people? " Let us see what happened after the Government's tax rates were applied to these people with over £2,000 a year. After having paid their tax in the last financial year, those people had £283,679,000 left, or 15.75 per cent, of total taxable income. So 2.72 per cent, of the people for whom the Government is legislating, after income tax had been imposed on them, were left with 15.75 per cent, of all taxable income.

Let us look at the position to which the honorable member for Sturt (Mr. Wilson) referred. I think that the honorable member put forward the other main argument for the Government. The real point, the honorable member said, is that saving must be encouraged. He said that the concessions that are to be made to lue people who put between £4 and £6 a week into insurance will encourage people to put more money into the insurance companies. Therefore, he said, more money will be obtainable through the insurance companies for government loans for the building of hospitals and schools and other most necessary works.

Let me remind the House of one significant new financial development that has been taking place in Australia before our eyes in the last twelve months. Prior to this time, the greater amount of money that was put into the insurance companies tended to go into relatively low return investment such as Commonwealth and other government bonds, and tended to be directed into the provision of public utilities. But the great trading banks, possibly in continuation of their agreement with the Prime Minister, have set up hire-purchase subsidiaries. Hire purchase has become eminently respectable as a result. It is now almost a gilt edged security. Consequently, we find that the insurance companies which were previously satisfied with, perhaps, a 5 per cent, or, at the most 10 per cent, return on their loans are now putting their money into the hire-purchase companies which are run by the trading banks.

So a great deal of this money which the honorable member for Sturt says will be saved as a result of this measure will be directed, not into industrial uses, but through that machinery, into high profit returns in the hire-purchase field. Here again, we find the impossibility of achieving any social aim by the laisser-faire. unplanned, irrational method that a government of this sort is compelled to use. This increased concession is totally unjustified in view of the fact that, if the Government has any money available it should give concessions to the family income earners who have suffered far more than the people who will benefit by this legislation.

The second most important provision in this legislation, as I have already mentioned, is that those people who can afford to pay between £75 and £100 a year towards the education of each of their children will receive additional concessions. This, the Treasurer estimated in his budget speech, will cost Consolidated Revenue £550,000 in the coming year. I suggest that if this

Government genuinely desired to assist education, it would see whether it was possible to use that £550,000 in the provision, say, of new class rooms. That sum of money might finance the construction of between 2,000 and 3,000 classrooms. But, no! That is not the kind of government that we have in office. We have a government that wants to give concessions to people who can afford between £75 and £100 a year for the education of their children - the kind of people who live in the electorate of the honorable member for Mackellar (Mr. Wentworth) - the kind of people who have an income of £2,000 a year or more - the kind of people who go to what we call, in Melbourne, public schools - the kind of people who go to what they call, in Sydney, the great public schools. These are the people-

Mr Wheeler - Yarra bank!

Mr CAIRNS - Can honorable members opposite not take the truth for once? lt is not likely that any one whose children-

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