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Wednesday, 9 November 1983
Page: 2484

Mr MILDREN —Is the Minister for Defence aware of the widespread concern in the community at the Government's decision to include salaries of Defence Force reservists as fully taxable income? Is he also aware of the concern expressed that this policy will affect retention rates among Defence Force reservists?

Mr SCHOLES —I thank the honourable gentleman for his question and the extensive representations that he and other honourable members have made on this matter. I am aware of the concern which exists relating to the tax on Reserve pay and allowances. The Government had, as a result of its Budget considerations, indicated a position on that matter; but, following widespread representations, it has reviewed that position. Following discussions between the Prime Minister, the Treasurer and me, Cabinet has approved an alteration in the scheme which will not affect revenue for this year. The tax will now apply to 50 per cent of pay and allowances received in the Defence Force reserves rather than 100 per cent, as previously announced.