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Monday, 6 December 1976

Mr Kevin Cairns (LILLEY, QUEENSLAND) -In relation to Bills, such as these 4 Bills which deal with taxation, the greatest error can be to attempt to look at any piece of income tax legislation in isolation. One has to be grateful to the honourable member for Adelaide (Mr Hurford) because for the first half of his speech he dealt with his general attitude towards taxation. After all, the attitude towards the mining industry has to fit within that pattern. It cannot be looked at in isolation. So the Opposition at least will excuse me if I look at every crumb of information given in this debate with all the suspicion with which a mouse might look at a piece of cheese on a kitchen floor. I want to see what virus is contained within the information. There are several. I shall deal first with the proposition put by the honourable member for Adelaide. He is a very reasonable and talented person. But he forgot a few vital facts. I will deal with them before I deal with the history of the mining industry to which the honourable member for Blaxland (Mr Keating) referred.

I was fascinated to note that the honourable member for Adelaide was uncertain as to his total attitude towards these Bills. He pleaded insufficient time to have studied them and, having pleaded insufficient time, he came in here and confessed to a growing uncertainty as to whether he was in favour of them or against them. Only by effluxion of time and by exhaustion did he ultimately come to the position that he would support the Bills.

Now I want to refer to some of the general attitudes towards taxation in the past, because they are important. One ought not to attempt to think that in looking at a piece of history one can draw a line across the scroll at any one date and say: 'Anything that occurred before that date is in the past. Anything that occurs subsequent to that date is in the future.' So I want to have a look at what has happened with respect to taxation in the immediate past. That is the pattern into which one has to fit what is proposed in these Bills. It is a monstrous fabrication to level the charge at this Government and say that it is not keeping promises in relation to taxation, because the total tax take this year will increase by something like 20 per cent. That is less than half the total tax take in one year under the previous Government. In another year under the previous Government the total tax take increased by well over 30 per cent. The circumstances in which both of those facts occurred need to be reiterated and repeated. The extraordinary fact is that the 40 per cent increase in total tax occurred in a year in which there was actual negative growth in Australia, in which there was an actual reduction in the number of taxpayers and in which of the total burden put upon taxpayers over 100 per cent in 1974-75 was a response to the burden created by inflation. It was mitigated somewhat by a taxation alteration in the course of the year.

Using the type of calculation used by Professor Harris from the James Cook University in Townsville and carrying forward that type of calculation to what happened during those years, we find that those facts are incontrovertible. The honourable member for Blaxland, who is a very sensible person, would be the first to say that it is impossible to develop a taxation policy in relation to mining unless one has some knowledge of what the taxation policy was in respect of the persons and companies, public and private, that paid tax. Even the Minister for Aboriginal Affairs (Mr Viner), who is at the table, in his more sanguine moments would agree with that proposition. So in one year, of the burden of taxation attributable to the various causes which allow increased tax to be taken, inflation itself was responsible for more than 100 per cent of the increased tax take in 1974-75. 1 hope that that is never forgotten.

I now turn to the general debate. I was fascinated by the ease with which the Opposition passed over the most significant tax measure that as been undertaken, which was the introduction this year of full personal tax indexation. Honourable members opposite did not agree with it. They said when they were in government that it could not be done. They inspired reports which were leaked from a former Deputy Commissioner of Taxation and which were subsequently leaked to the Australian Financial Review, showing how it could not be done. But the Government has done it. When the honourable member for Adelaide produces a table which seeks to compare the tax take in one year with that for the next year, he does not indicate what was going to be the tax take under the pattern of increased taxes which his Government brought into operation. That is the only way in which one can really comprehend and follow what was done with the full personal income taxation measures. So that is the pattern into which I want to fit what has to be said this evening. I want to sniff at quite a few pieces of cheese that have been thrown across the kitchen floor in this debate.

With respect to mining, Opposition members have made it quite clear that they are opposed to all the mining provisions in this legislation, the most important of which is the 20 per cent reducing balance write-off. In opposing it I am sure that they are unaware of certain facts that are presently besetting the Australian economy visavis the world economy. Mining after all is the great growth industry in Australia. The development of exports from that industry has enabled a higher standard of living to be spread throughout the Australian community. It is that industry's exports which have allowed the redistribution of resources to occur whereby millions of workers in Australia are able to work, receiving high rates of pay, in industries which receive very significant tariff protection. The fitter and turner at Mount Isa is the kind of person whose activity enables a very significant subsidised wage to be paid to the fitter and turner working at the Ford Motor Company of Australia Ltd in Melbourne, which is your home town, Mr Deputy Speaker, or to the fitter and turner in the same trade working at Chrysler Australia Ltd in Adelaide. That is the redistribution of resources that comes from the mining industry. So when it is said in this House for environmental or other reasons that mining needs to be looked at suspiciously in the Australian environment and needs to be curbed in the Australian environment- that is the background of many of the statements- that is a grossly incorrect proposition to put.

Mr Keating - But you agree that that is not my statement?

Mr Kevin Cairns (LILLEY, QUEENSLAND) -No, but you could not separate your propositions on mining from the general taxation policies with which your Party is unhappily surrounded.

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