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Savings incentives essential: Haines



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M E D IA RELEASE ■ — ----- -------------------------------- THE SENATE

EMBARGOED TILL 12 NOON

P.R. NO. 89/545 CANBERRA 1 DECEMBER 1989

SAVINGS INCENTIVES ESSENTIAL; HAINES

"The Government can no longer afford to ignore the value of providing savings incentives of the sort offered in countries such as Canada, Italy and Norway," Senator Janine Haines, Leader of the Australian Democrats, said today.

Speaking at a N.I.B.A. Industry Luncheon in Sydney she said that consumption could not be dampened by high interest rates alone. "Ordinary Australians watch the interest they earn on savings eroded by high taxes. At the same time they know that major companies can pay as little as 1 or 2 cents in the dollar on their profits through the use of negative gearing," she said.

"There is therefore neither a financial nor social reason for people to save."

Senator Haines said that the cost to the Government of

implementing a system of guarantining from tax part of the interest earned on bank and building society savings accounts would be "miniscule" in comparison to the cost of the country of the currently overheated economy. "Allowing people to earn up to

$1000 in interest before paying tax would encourage savings, increase the lending pool, and reduce consumption," Senator Haines said.

She also recommended: . removal of the negative gearing tax concession for

Australian companies borrowing overseas to fund non-productive takeovers;

. a surcharge on luxury imports and a removal of the

"developing nation" subsidy to imported goods competing with Australian goods; and

. a partial tax deduction for interest repayments on home loans for people buying their own homes.

FOR FURTHER INFORMATION CONTACT: SENATOR JANINE HAINES 062 77 3222

COMMONWEALTH PARLIAMENTARY LIBRARY MICAH