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Liberal cover up on double taxation

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Leader of the Opposition


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Statement by the Leader of the Federal Opposition, the Hon. E.G. Whitlam, Q.C. , M.P., at a Meeting in Lurnea, N.S.W. , in support _________________of Cliff Mallam, MLA for Campbelltown____________


Mr Fraser and Sir Eric Willis are trying desperately to conceal the Liberal plan for double taxation. They are asking people to believe that a provision specifically written into the "new federalism" and agreed upon at the Premiers Conference on 9 April is never going to be us e d . . . . .

The threat was spelt out in Mr Fraser's statement after the Conference:

"Each State will be able to legislate to impose a surcharge on personal income tax in the State (but not company tax on withholding tax on dividends or interest) additional to that imposed by the Commonwealth."

If there is to be no double taxation why was this plan agreed upon by Mr Fraser and Sir Eric Willis?

Two precedents are being broken by the Fraser scheme. Since 19^-2 every Prime Minister has made general purpose revenue grants to the States on condition that the States did not levy income tax. Mr Fraser

will breach that condition. '

Every State has received automatic increases in general purpose grants in accordance with increases in its population and the cost of living. Mr Fraser wants to tie these grants to a percentage of personal income tax collections by the Federal Government.

The States will get less. They will have to make up the difference with their own income tax. Mr Fraser is not just permitting them to levy a tax surcharge; he is compelling them to do so. And it is clear from Mr Fraser's statement that the extra tax will be paid by wage earners

alone, not by companies or investors.

Just how much the "new federalism" will cost the taxpayer will not be known until the State elections are over.

At the Loan Council in June the Government will determine how much it is prepared to lend' the States for public works. Details of the cuts in specific purpose grants for "education,- health, transport and urban and regional development will not be known until the Budget. .

Only then will the States know how much their Federal grants will be reduced and how much of the Federal deficit Mr Fraser is unloading onto State taxpayers. .

SYDNEY Wednesday 21 April 1976

Parliament Mouse. Canberra, A.C .T 2 6 0 0