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Hawke's tax proposals hit needy



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MEDIA RELEASE

EMBARGOED until 10.00am Sunday 7 July 1985THESENATE

HAWKE'S TAX PROPOSALS HIT NEEDY

Abolition of the tax-free threshold would substantially reduce the net incomes

of Australians receiving pensions and benefits and increase the high marginal

tax rates already suffered by these needy Australians.

Senator Tony Messner - the Shadow Minister for Community Services - commenting

on the Hawke Government's tax proposals said that the threshold exempted many

pensioners and beneficiaries from paying tax. ^

"It has also reduced the tax payable by other pensioners and beneficiaries

but this benefit has been eroded by the high tax policies pursued by the

Hawke Government over the past two years."

"For instance, a pensioner getting the full pension and with another $20 a

week in additional income has had a A00% increase in their tax bill over

the past two years."

Senator Messner said that by abolishing the threshold and making pensions

and benefits taxable a substantial increase was required in the basic level

of these forms of income support.

"If they are to be taxed at a 20% rate there will need to be a similar

adjustment in the standard level of pensions and benefits if the real dis­

posable incomes of these Australians are to be maintained."

"This is in addition to compensation required to offset the effect of the

proposed tax on services."

Senator Messner said that he agreed with Senator Grimes' comments in the

Financial Review on 26 June that the threshold's abolition.would simply

impose high marginal tax rates on Australians with very low incomes.

"Pensioners and beneficiaries already face high marginal tax rates due to

the dual operation of income tests and income tax."

SENATOR T O N Y MESSNEH SHADOW MINISTER FOR C O M M U N ITY SERVICES

86/85

... /2

REPRESENTING IN THE SENATE: S H A D O W MINISTER FOR SOCIAL SECURITY. EM PLO YM EN TS INDUSTRIAL RELATIONS A N D im m i g r a t i o n n u n i · γ γ . ~

"However, these 'poverty traps' will be worsened by the removal of the tax-

free threshold."

"It is clear following the Tax Summit that Labor has shed its image of a

party for the disadvantaged and needy. It is increasingly becoming a

party solely concerned with unions and their employed members."

ADELAIDE 7 JULY 1985

Comment: Tony Messner (08) 79 3104 .

Contact: Barry O'Farrell (08) 333 2120