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Keating's attack on ASFA reveals acute sensitivity



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P A R L I A M E N T O F A U S T R A L I A

M O U S E O F R E P R E S E N T A T I V E S

PRESS

on JOHN R. HEWSON, M.P. S H AD O W T R E A S U R E R M E M B E R FO R W E N T W O R T H

RELEASE

99/90

12 March 1990

KEATING * S ATTACK ON ASFA REVFAI fi ACUTE SENSITIVITY

The Treasurer’s attack today on the President of the Association of Superannuation Funds of Australia, Mr Ray Stevens, revealed just how acutely sensitive he is to.the fact that the Association and others in the industry have confirmed our view that when he talks of "billions and billions of dollars" in relation to his capital gains tax, it is because he is taxing, or will tax, millions and millions of average Australians.

The Treasurer puts his defence on Tax Office data that he released yesterday but these data are without any substance whatsoever. Not to mention, of course, the fact that he has used the Tax Office in the midst of an election campaign to supply data.

The data are meaningless as they give no monetary indication of the magnitude of the tax paid.

Moreover, even if no tax is paid in any one year, it is unlikely that imputation credits will offset tax over the life of an individual superannuation scheme.

Focussing on the impact of the capital gains tax in its e a r l y years of application is quite misleading especially when it is recognised that the corporate tax rate has been lowered from 45 to 39 - which effects any early imputation benefits - and also

because it only relates to asset sales since July 1 1988, which could well be a negligible proportion of normal superannuation funds asset transactions, given that they are medium to long term investors. .

Keating is just plain wrong.

Finally, one can only be appalled by the Treasurer’s constant attack on organisations that disagree with him.

Here again we see him questioning the "political motivation" of ASFA. Surely this is the last refuge of the failing political scoundrel?

But it does put ASFA in very good company including most o f the leaders o f the business community, the Business C o u n c i l and a large number of international and domestic organisat ions whose only failing is that they have dared to question him!

Dr Ian Spry, QC, Editor of the Australian Taxation Review said today:

"I am very troubled because w,e have the Treasurer of the Commonwealth of Australia saying these things and what he is saying is clearly wrong, his precise words were that the CGT would have a zero effect on superannuation funds. I think we do not understand why he said it and I don’t understand why now he hasn't retracted his words when all these people

have come out and pointed out that he is wrong."

Also Daryl Dixon, a noted "super" expert was asked on Brisbane Radio this morning if we pay capital gains tax on our superannuation. He replied: "You certainly do."

Asked if the Prime Minister was correct in saying that imputation would offset the CGT on superannuation, Mr Dixon replied:

"No that’s certainly not true ..... So on both counts,

both the Treasurer and the Prime Minister are in fact not revealing all to the Australian public."

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