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Government sensitive over tax threat

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Senator Jim Short

SMF 79/92


The Government is extremely sensitive and embarrassed by the recognition in the Budget that it will have to increase existing taxes and /or introduce new taxes to balance its books by the mid-1990's.

- In Question Time today, Government Senators constantly inteijected to try to prevent me from answering a question from Senator Campbell (Lib, WA) on this vital political and financial issue.

The Government clearly has a credibility problem on the issues of Budget financing and keeping Keating's unfunded tax cut policy. Even former Prime Minister Bob Hawke has conceded these will hurt them dearly.

When will the Government come forward and release its secret tax agenda ?

Will savings be taxed ?

Will FBT be widened to include those presently exempt voluntary organisations, and/or increased for schools, hospitals, nursing homes, etc ?

Will compulsory employer superannuation be caught in the expanded FBT net ?

How will the Government change or widen the Prescribed Payments System ? Will it use it to launch another attack on contractors ?

Can the "promised" tax cuts really be delivered, or are they just an election gimmick ?

Or will they just introduce a GST, but without the $13 billion cuts in personal income tax, the $20 billion reduction in taxes on business, or the other generous compensation provided in the Coalition's Fightback! policies ?

Australians shouldn't have to speculate about these foreshadowed savagely increased and/or new taxes. The Government should try some honesty for a change and tell them now.

[A full draft transcript of my answer is attached.]

Canberra 20 August 1992

Contact: 06-277-3119 Senator Jim Short


«start answer»

Senator SHORT - I thank Senator Campbell for his

excellent question. Yes, this is an urgent notice of motion

because of the implications of the massive financing problem

arising from the Government's $8.6 billion increase in

spending in the Budget. The Parliament and the public must be

told the full story as soon as possible.

The Senate must debate urgently that the underlying

deficit to be financed this year is not $13.4 billion but

$20.5 billion when adjustment is made for the creative

accounting -Senator Tate - Mr President, I raise a point of order, Is

it in order that a question be asked in relation to a notice

of motion or an anticipated urgency motion?

The PRESIDENT - The question is in order. I am listening

to see whether the Senator begins debating the notice of

motion, but so far it is in order.

Government senators interjecting -Senator SHORT - They like dishing it out, but they do not

like taking it. The reason this is urgent is that that $20.5

billion deficit is going to have to be paid for in the end and

paid for through increased taxes. What are the taxes the

Government will be forced to impose? The coalition, in its

Fightback program, has set out its full revenue and

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expenditure proposals and it is urgent that the Government do

likewise. The matter is all the more urgent -Senator Tate - Mr President, I raise a point of order.

Twice in the last few sentences of Senator Short's answer he

has referred to the reasons for his motion being an urgency

motion. Is it in order for him to start debating the question

of the urgency of his motion?

The PRESIDENT - I remind Senator- Short that it is not in

order to debate the notice of motion, but I am sure there are

ways he can get around it.

Senator SHORT - I fully accept that and I am explaining

why the matter is urgent. The matter has become even more

urgent in the last 24 hours because the Treasurer has

adamantly refused to present the Government's revenue

forecasts for the next three years. We know the Government

will be forced to impose significant tax increases. The

Treasurer admitted in his Budget statement on Tuesday that

there will be tax increases, but he refused to outline the

details. The Treasury has said that a range of taxes will have

to be increased. It specifically mentions withholding tax on

interest, increased fringe benefits tax and the changes to the

prescribed payments system.

I will be seeking the support of the Senate to debate the

impact of these measures because the Keating Government's

proposals on withholding tax alone will tax every person who

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receives interest on their savings - every pensioner, every

retiree, every child starting their savings, every business

and every family. That measure could be a $2 billion tax on


Australians need also to know what is behind the

prescribed payments system changes. Is it yet another attack

on contractors? The proposal for yet another increase in the

fringe benefits tax - ~

Senator Tate - Mr President, I raise a further point of

order. Senator Short preceded this particular contribution by

saying that these are the reasons he would seek the support of

the Senate in relation to the motion he will bring on. That

must be a debating technique.

The PRESIDENT - I think Senator Short is beginning to

debate the notice of motion and I would ask him to conclude as

soon as possible.

«turn 56 follows»

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«Senator Short - in continuation»

Senator SHORT - Mr President, I apologise for the length.

But I am not being helped by the constant interjections from

the other side. Let me say again: the matter is very urgent

because, to raise the necessary amounts that the Government

requires, the Government will have to broaden substantially

fringe benefits tax. It will have to include tax exempt

organisations, schools and hospitals, and also it will have

to raise the rate of fringe benefits tax and effectively tax


Another possibility is that it will have to tax the

compulsory employer superannuation contributions, and that is

a tax on retirement funds. They are just some of the hidden

taxes buried in the back of the Budget that the Treasurer has

admitted to.

The PRESIDENT - Order! Senator Short, I think you should

conclude, given the amount of time that you have taken.

Senator SHORT - I conclude, if I may, by saying that it

is absolutely clear that the Senate must urgently debate these

proposals. The Government has proposed tax cuts which it

simply cannot deliver. Mr Keating will either have to have a

huge increase in the taxes that he has already admitted to or

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he will have to impose a goods and services tax, but without

the offsetting $13 billion in^tax cuts or the other generous

compensation provided in the coalition's Fightback proposal.

The PRESIDENT - Order1 Senator Short, your answer has

run for 6h minutes.

Senator Faulkner - Mr President, I take a point of order.

Under "standing order 168, could I request that Senator Short

table the document from which he read every word of his


The PRESIDENT - I call Senator Devereux.

«end answer»

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