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Dawkins can't add up



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Peter Reith

DEPUTY LEADER of the OPPOSITION PRESS RELEASE SHADOW TREASURER

DAWKINS CAN'T ADD UP

Treasurer Dawkins, in a display of incredible incompetence, has a $415 million discrepancy in his tax statement calculations.

It is obvious that, in the panic preparation of the tax statement, the drafting by the Treasurer has made the most basic of errors.

The summary table explaining the tax changes on page 13 of the Statement on Tax Policy says that the FBT measures will raise $1640 million in 1994-95 and $900 million in 1995-96. However, the explanatory memorandum for Taxation Laws Amendment (Fringe Benefits Tax Measures) Bill 1992 says the

Government would raise $1525 million in 1994-95 and $840 million in 1995-96.

What is going on? Which figure is correct? There is a $175 million discrepancy over two years herei

Further, Treasurer Dawkins has changed the supposed costs to revenue of the One Nation tax cuts.

In One Nation (page 183), the tax cuts were to cost .

$3420 million in 1994-95 and $5220 million in 1995-96. Now it appears that the tax cuts will cost $240 million less over two years. That is, Tax Legislation Amendment Bill 1992 Explanatory Memorandum says the tax cuts would cost

$3200 million in 1994-95 and $5200 million in 1995-96.

16 September 1992 Canberra

Contact: David Turnbull (06) 2774277 D147/92

COMMONWEALTH PARLIAMENTARY LIBRARY MIC AH

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13

Studies undertaken by the Government indicate that these measures will generate

significant revenues at acceptable costs. Accordingly, the Government is confident that there will be no requirement to pursue other options for tax base expansion or compliance measures such as increased withholding, whilst ensuring that the Budget deficit will be reduced as planned by 1995-96.

The implications of the proposed measures for Government revenues and outlays are as

follows:

1994-95 ($m)_____________1995-96 ($m)

REVENUE

FBT Reform 1640 900

Compliance Enhancement 750 950

TOTAL REVENUE 2390 1850

OUTLAYS Public Debt Interest 85 210

Less: ATO Resources 35.5 35.5

Net outlays savings 49.5 174.5

Total 2439.5 2024.5

These estimates do not include any allowance for possible improvements for

Department of Social Security programs which may follow improved tax information

reporting.

1990- 91-92

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

TAXATION LAWS AMENDMENT (FRINGE BENEFITS TAX MEASURES) BILL 1992

EXPLANATORY MEMORANDUM

(Circulated by authority of the Treasurer, the Hon. John Dawkins, M.P.)

.15 5 2 2 ( ill No. 42 5<).Sh 4

General Outline and Financial Impact

This Bill will amend the following taxation Acts to give effect to the following measures :

Changes to the Fringe Benefits Tax Structure

• The Fringe Benefits Tax Assessment Act 1986 to calculate Fringe Benefits Tax payable by using a tax-inclusive value of the fringe benefit (known as the "grossing up method").

• The Income Tax Assessment Act 1936 to allow Fringe Benefits Tax to be deductible for income tax purposes and to implement associated measures.

Date o f effect: 1 April 1994

Proposal announced: Not previously announced.

Financial impact: 94/95 95/96 96/97

$ml,525 $m840 $m840

1990- 91-92

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

TAX LEGISLATION AMENDMENT BILL 1992

EXPLANATORY MEMORANDUM

(Circulated by authority of the Treasurer, the Hon. John Dawkins, M.P.)

1SS2S C m . No <>2 5111.: I

General Outline and Financial Impact

This Bill will amend the following taxation Acts to give effect to the following measures :

Reductions in the Rate of Income Tax

• The Income Tax Rates Act 1986 to declare the rates of tax payable by both residents and non residents for the 1994/95 and subsequent income years.

Date o f effect: 1 July 1994

Proposal announced: One Nation Statement on 26/2/1992

Financial impact: 94/95 95/96

$m3,2()0 $m5,200

Λ /sf-no^J

■ V i

ΙΠ REVENUE MEASURES

Dnputer on the tgency 1 the d with e will th the Ίes and t under olis in obina, ion of m and

S u m m a ry o f M e a su re s

1991-92

Estimated coat to revenue

1992-93 1993-94 1994-95 1995-96

$m $m $m $m $m

Personal Tax Cut - - - 5220

D epreciation Arrangem ents - 30 215 360 490

W rite-O ff o f Certain Income

Producing Buildings - - 5 15 30

Private Investm ent in Public Infrastructure

Stream lining ATO Processes - - - - -

N on Assessable/Non D eductible Bonds - - 10 35 100

D evelopm ent Allowance - - - 40 70

Pooled Developm ent Funds - - - 5 5

Capital G ains Tax Goodwill Exem ption - 5 10 10 10

O ffshore Banking Units - - 5 5 5

C om pany Tax Deferral 10 -10(a) - - -

Deductions for Bad Debts - (b) Co) (b) (b)

M otor Vehicles (WST) 40 185 210 250 275

T O T A L C O S T T O R E V E N U E 50 210 455 4140 6205

r:

(a) Revenue gain.

(b) The nature of this measure is such that its cost cannot be reliably estimated

183