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Wednesday, 22 August 1984
Page: 127

Senator MESSNER —Will the Leader of the Government in the Senate confirm that people with incomes of between $700 and $800 a week will receive reductions in income tax greater than the rises granted to pensioners and beneficiaries in the Budget? Is this an example of the commitment of this Government to redistributive policies or simply an acknowledgement that it does not attach a high priority in planning to that section of the community?

Senator BUTTON —I confirm that, if Senator Messner is seeking an intelligent reading of the Budget Papers, which I would have hoped he would have been able to make himself. I think the point of his question is: Do the tax cuts to people in employment which are provided in the Budget in a sense provide greater benefits to those people than to welfare beneficiaries and what are the Government's priorities in respect of those matters? The strategy of the Budget- in a different sense from that of the last Budget-was to pursue economic growth and to make sure that it continues. This matter has been articulated by the Treasurer on a number of occasions. The increases granted to welfare recipients in this Budget were significant indeed-not as significant as the Government might have wished, but significant-in terms of pensions, unemployment benefit and particular payments in respect of particular welfare schemes. If those payments are to continue and be increased in the future as the Government would wish and if a process of redistribution is to take place in favour of that section of the community it can only be done on the basis of continuing economic growth.

The tax cuts to employees in the tax brackets referred to by Senator Messner are provided-the Government has been quite frank about this-in pursuit of its objective of maintaining the prices and incomes accord. The prices and incomes accord, of course, has been a matter of great discussion in the Senate over a period, but the important point from the Government's viewpoint is that it is working. It is working not only in terms of restraining inflation but also in terms of a quite dramatic decrease in industrial unrest in this country which has been manifest in the past 15 months since this Government came to power. I mention that because it is particularly related to the question of economic growth to which I referred earlier. I hope that Senator Messner is able to follow the argument that has been put on a number of occasions. I am putting it again in answer to his question. However, insofar as the raw figures in the Budget papers are concerned, I confirm what he asked.