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Mr Hayden's statement today has raised more questions



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TREASURER

NO. IfV'

EMBARGO

• Ϋ,/Ο.ΐΟ ,

STATEMENT BY THE TREASURER, THE HON. JOHN HOWARD, MP

Mr Hayden's statement today about capital gains and wealth taxes

has raised more questions than it has answered. .

Rather than bury the issue, it has guaranteed that it will receive

greater prominence during the election campaign.

Mr Hayden has not repudiated the introduction of such taxes. .

All he has done is to say that there will first be an inquiry into

the distribution of wealth in the Australian community.

This poses the immediate question of why is it necessary to have

such an inquiry.

In recent years there have been numerous inquiries into the

Australian taxation system. ' .

At present a wide-ranging inquiry is under way into the Australian financial system. .

Why then must we have an inquisition into the distribution of . ' ' . /

wealth in Australia?

Australia is amongst the most egalitarian societies in the world.

One can only conclude that the driving force within the Labor

Party for such an inquiry are. those who are philosophically

opposed to asset and capital accumulation.

Such an inquiry would quite clearly have very sweeping powers. We

already know this from the so-called document of understanding betweer

the trade union movement and the Labor Party.

2 .

Such an inquiry and the threat of the taxes which would follow it

will be disturbing and unsettling to hundreds of thousands of

ordinary Australians who have done nothing than to accumulate

assets through hard work.

Wealth taxes and capital gains taxes are by their nature not

restricted to the wealthy. — ■ .

In those countries where they operate, they affect large numbers

of ordinary citizens of relatively modest means.

The pressure on the Labor Party to explain itself more fully on

these issues is all the greater as a result of Mr Hayden's own

policy speech.

It is clear from that speech that additional expenditure of at

least $2500 million annually will be totally unfunded. .

Furthermore, the additional amount"of $950 million Labor claims it will raise from its anti-tax avoidance proposals, a resources

tax and the abolition of the investment allowance, must be

regarded as extremely dubious. -

It is simply not possible to raise $600 million from the tax .

avoidance area in the first or even second years.

There are also major credibility problems with revenue gains from

the other two areas.

Perth 8 October 1980