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Labor's unprecedented assault on incentive

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The Opposition Leader, Mr Andrew Peacock, said today the Hawke Labor Government was leading the biggest attack on individual incentive Australian had ever seen.

"Leaks on the supposed content of Tuesday's White Paper on tax reform have so far confirmed a new, harsh .capital gains tax and, now, a fringe benefits tax paid by employers," he said.

"The proposed new capital gains tax, which will be applied at the marginal income tax rate, will directly hit the incentive of businesses to invest and employ more people.

"It will also push up a wide range of rents and other charges throughout the community by forcing remaining investors to make up through higher income the capital gains impost.

"The proposed tax on employee fringe benefits - to be paid by employers - will push up the cost of employing people, and reduce both the incentive to employ and to work."

But Mr Peacock said the greatest potential attack on . incentive so far put forward by the Government was the new capital gains tax which will hit nearly the whole community.

"It will hit those entrepreneurs going into new businesses or investing in new projects and thereby reduce the employment opportunities in new ventures," he said. .

"It will also hit those who rent homes, flats, shops and small factories, . as owners of these properties push up rents to compensate in income for the capital gains tax ahead."

Mr Peacock said that such a harsh capital gains tax would be revoked by a future Liberal-National Party Coalition Government.

He said the Prime Minister, Mr Hawke, had virtually confirmed on today's Sunday program, that the White Paper would contain both the capital gains and fringe benefits taxes.

"He also attempted to portray himself as being more closely aligned with the Treasurer,ยท Mr Keating on tax reform in a bid to negate the growing signs of a split between the two," he said. '

- "Mr Hawke knows that ALP factionalism - on tax and other issues - is already rife within the Government, and to maintain his own position he knows he cannot afford a split with his , Treasurer." . '

2 JUNE 1985

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