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Thursday, 23 August 1984
Page: 250

Senator CHANEY —Will the Leader of the Government in the Senate confirm that more than one million taxpayers will move into a higher tax bracket by June 1985 as a result of the new tax scales? Is it true that, despite the so-called tax cuts, $2,755m extra will be raised in pay as you earn tax this year-that is, more than $8 per taxpayer per week more than was raised in the previous year? Under the Government's assumption that there will be an increase of 3 per cent--

Senator Elstob —We have more workers.

Senator CHANEY —I very much appreciate the assistance given when asking my question, but I was just pointing out that the Government's assumption is that there will be an increase of 3 per cent this year in the number of pay as you earn taxpayers. Taking that assumption into account and using the Government's figures, each pay as you earn taxpayer will pay an average of $8 per week extra. Will the Minister confirm those figures?

Senator BUTTON —I had some help when Senator Chaney was asking his question. Of course it is true that more people will be paying PAYE tax as a result of the Goverment's employment policies, which have been implemented since the Australian Labor Party came to office.

The first part of Senator Chaney's question was about tax scales. I make the point that what matters most for the taxpayer is not so much the marginal rate of tax on the last dollar he earns but the net pay left in his pocket after tax. The tax cuts will boost every taxpayer's after-tax income. I should point out also that 2.2 million taxpayers will face a reduced marginal tax rate of 25 per cent instead of 30 per cent.

I am not in a position to dissent from the overall proposition in Senator Chaney's statement that receipts from PAYE tax will increase substantially in the coming year. I can take it no further than that.

Senator CHANEY —Mr President, I ask a supplementary question. In light of that response, will the Leader of the Government in the Senate check the figures that I have given him? Will he advise the Senate whether it is true that the average pay as you earn tax payable this year, taking account of the Government's tax cuts, will be $8 per taxpayer per week more, in other words, that there will be an increase in the pay as you earn tax payable by people under the new tax scales?