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Capital gains tax to increase inequality



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MEDIA RELEASE /fit SENATOR TONY MESSNER SHADOW MINISTER FOR FINANCE AND TAXATION THE SENATE

13/85

CAPITAL GAINS TAX TO INCREASE INEQUALITY ‘

The Hawke Labor Government's tax package did little to reduce or eliminate social and economic inequality and the introduction of the capital gains tax would result in increase inequality between Australians.

Senator Tony Messner - the Shadow Minister for Finance and Taxation - was speaking at a Liberal policy committee meet­ ing in Melbourne.

"The Government's argument justifying the capital gains tax on the grounds of equity is a fallacy as it will ensure that inequality grows because enterprise will be stifled and destroyed."

"The capital gains tax will inhibit less well-off Australians from acquiring assets in order to improve their situations. If they do so they will be subject to the tax."

"On the other hand, better-off Australians who are already asset-rich will be insulated from the tax as assets acquired before the tax was introduced will not be hit."

"The practical effect of the capital gains tax make a mockery of the Hawke Government’s alleged commitment to social and economic equality."

"It indicates the sheer hypocrisy of statements like those of Mr Dawkins about the need for the Government to follow 'genuine Labor policies' to reduce 'divides within Australia'."

"The fact is that the Hawke Government's policies are instit­ utionalising inequality in Australia and it shows little sign of mending its ways."

"Even its attempts in the tax package to deal with the poverty traps faced by social security beneficiaries will only result in a raising of Australia's poverty threshold - not its elimination."

"In fact, the introduction of the capital gains tax will result in the implementation of the greatest and most far reaching poverty trap ever faced by Australians."

MELBOURNE 4 OCTOBER 1985

Contact: Barry O'Farrell (08) 213 2240

REPRESENTING IN THE SENATE THE SH AD O W TREASURER A N D SHADOW MINISTER FOR IMMIGRATION A N D ETHNIC AFFAIRS