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Thursday, 7 October 1971
Page: 2037


Mr HURFORD (Adelaide) - The break-up of the proposed expenditure of $103,984,000 for the Department of the Treasury is shown under the headings of Administration, Commonwealth Taxation Office, Taxation Board of Review, Office of the Superannuation and Defence Forces Retirement Benefits Board and the Bureau of Census and Statistics. I would dearly like to spend 10 minutes discussing each of these Departments. I mention the Bureau of Census and Statistics. It is the wish of the Opposition that an in depth inquiry be made into the whole aspect of poverty in our community and of course this particular section of the Treasury - the Bureau of Census and Statistics - would be vital in such a task. The proposed expenditure for the Office of the Superannuation and Defence Forces Retirement Benefits Board has been discussed recently in other debates in this Parliament. However, I reiterate that the Opposition believes that the Government has been treating this on an ad hoc basis by bringing certain payments up to date for those who retired before 1968, whereas the whole aspect of superannuation needs thorough investigation. The Opposition is looking forward to the report of the committee which is now examining the question of defence forces retirement benefits.

When examining the administration of the Treasury, I am reminded of my attitude and that of my colleagues to the structure of government as it has been arranged by the present Liberal-Country Party Government. Policies are formed on an ad hoc and temporary basis in many different departments. One finds the Department of Trade and Industry announcing a policy which conflicts with a policy that has been decided upon almost at the same time by the policy making division of the Treasury. The De partment of Primary Industry also is responsible for policy making. One could go through a list of Government departments in this country which make independent policy decisions. The only co-ordination that is supposedly taking place is at Cabinet level and honourable members can imagine just what form that co-ordination would take.

I raise as only one example the decisions that are made by the Department of Immigration to indicate how this gells or does not co-ordinate with the decisions that are made in Treasury from time to time about the rate of growth of the economy. I mention these matters in passing merely to emphasise that this is a Government which makes ad hoc decisions whereas one of the features of the Australian Labor Party when it takes over the Treasury benches will be that it will co-ordinate the policy making of this country. Such co-ordination should be carried out in the present structure by the Treasury but it is not being done. The present set up is a 'HeathRobinson' one and I hope this gives the right impression of what is happening in this country at present.

However, 1 pass over those matters to spend most of the time available to me on the subject of taxation, because I believe that the policy of the Labor Party - the alternative government of this country - on this subject is not as well known as it should be. At its Federal Conference in Launceston in June this year, the Labor Party passed a comprehensive motion on the subject of taxation. With the concurrence of honourable members I incorporate in Hansard the following motion:

ECONOMIC PLANNING AND TRADE COMMITTEE 1971

Resolution for Federal Conference to be included in Report rc: Taxation

Recognising that the present Income Tax Act is a patchwork of amendments to an old Act, that Tax legislation is a means of regulating the level of economic activity in a changing community as well as collecting funds to finance government expenditure, that the requirements of a good tax system are efficiency, equity (based on the principle of 'capacity to pay') and simplicity of control, that Australia's personal income, company and other taxes abound in discriminations and hence seriously impair the productivity of the economy, that the erosion of the personal income tax base by, for instance, allowing people in business to claim as allowable deductions unreasonable expense accounts and to split their taxable incomes with other members of their families while not allowing this privilege to others, this leading to gross inequity in the distribution of the taxation burden; an Australian Labor Government will:

(i)   Unharness existing talents within the Taxation Department and other sections of Government so that immediate reforms will be instituted (it is recognised that the greatest contributory factor to the present unsatisfactory taxation system is not a lack of ideas and desire for reform from within the Public Service, but the inability of the present non-Labor Government to agree to such reforms because of the effect on rich supporters).

(ii)   Appoint, when the necessary talented and knowledgeable persons have been assembled, a committee of inquiry with wide terms of reference, including those set out in this Party's platform, along the lines of the recent Royal Commissions in Canada and New Zealand, to set taxation guidelines for the next decade.

(iii)   Set up a Parliamentary Taxation Committee of members from all parties and both Houses to take a continuing interest in this important but ever-changing field.

(iv)   Establish, In co-operation with community organisations outside Government, an Australian Tax Foundation, along the lines of the Canadian Tax Foundation, to provide an alternative, expert body of thought, to that emanating from within Government, to carry out education and research programmes in co-operation with interested university personnel and to report to the Parliament annually.

This resolution on policy commences by mentioning in fairly short terms the principles of Adam Smith in the matter of taxation. Almost 200 years have elapsed since the time of Adam Smith. The great economist set out the 4 principles by which in his opinion the quality of a tax should be judged. They were, firstly, equality. Sometimes we call it equity now. He said that subjects should contribute to the support of the State as nearly as possible according to their ability. Secondly, there is the principle of certainty, not arbitrariness, of application. Thirdly, there is convenience of payment, and fourthly, economy of collection or efficiency. It is well to remember these principles when we look at and examine the present Income Tax Act, which is an abomination of an Act. I would say that it is one of the most difficult Acts that we have to interpret and study in our country today and, of course, it is an Act to which almost every citizen is obliged to apply his mind at some stage of the year. The Labor

Party has I think wisely decided that it is not possible for members of the Opposition, without the benefits that government gives, to be able to collect the necessary information on which to base a detailed policy, to lay down details of what the taxation structure will be, even if we were laying down that structure for today, let alone for a period after the next election.

So we mention 4 matters which we think should be attended to on our taking over government. One is unharnessing the existing talents within the Taxation Office and other sections of government in order to bring about necessary reforms to apply those principles of Adam Smith. It is my contention that there is tremendous talent in the Taxation Office and other areas of government waiting to bring about greater equity in our taxation system today. A lot of the reforms which should be brought in and which I believe the Government knows ought to be brought in are not brought in. Because of the nature of the support that the Government commands, the nature of those who support it to keep it in government, the Government is unable to bring these reforms in. What I am saying is that those who are on higher incomes support the present Government. They are the people who would be hit most if an equitable taxation system were instituted. Consequently this Government finds it difficult to bring equity to this field.

Secondly, we believe that the Government ought to appoint a committee of inquiry with wide terms of reference to investigate this whole field of taxation. I have in mind such a committee as the Carter Committee in Canada. I know that such a committee of inquiry would take a number of years to report because taxation is a most complicated field, but it is high time that we had such a committee because we want to set the pattern of taxation for the next 2 decades or for at least a decade and a half rather than ricochet from one immediate problem to another. Taxation is not something that one can change overnight. People order their affairs in order to take advantage or to make best use of the existing taxation legislation, and people cannot be upset overnight by vast changes of the taxation legislation. But if we have a committee of inquiry reporting as to what are the long term aims of the

Government in the field of taxation these can be brought about slowly in succeeding budgets: but at the same time this is not sufficient in this field of taxation.

We believe, as indeed I notice the honourable member for Isaacs (Mr Hamer) believes, that there ought to be a committee of this Parliament also looking into these taxation affairs, looking at the inequities in the legislation and searching for shorter term remedies. This committee would be well helped by a third committee in this field, namely a continuing body such as the continuing body existing in Canada which is known as the Canadian Taxation Foundation, and which of course in Australia I hope would be known as the Australian Taxation Foundation. It would be made up of members of the professions interested in this field - the legal profession and the accounting profession - and also people from commerce and industry as well as citizens outside these areas who are interested in this field of taxation. A study of taxation is a continuing matter and requires all 4 of these arms, harnessing talents within the Taxation Office.

The DEPUTY CHAIRMAN (Mr Cope) - Order! The honourable member's time has expired.

Sitting suspended from 12.45 to 2.15 p.m.







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