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Wednesday, 20 March 1985
Page: 498

Senator JACK EVANS(3.45) —This is a silly urgency motion. It is silly to put a motion in this form before the Senate because, as the mover of the motion would know, it cannot be amended. Because it cannot be amended and because it addresses many topics, senators are put in an impossible situation. It needs to be recognised that one's inability to amend the motion means that one has to accept the words in it at face value and not as interpreted by either the mover of the motion or the supporters or even opponents of it. The Australian Democrats support some aspects of the motion 100 per cent and we agree with other aspects of it subject to acceptance of the fine detail of those aspects, but we may oppose some aspects of it if the interpretation is in accord with some of the extreme views of members of the Liberal and National parties, or for that matter the Australian Labor Party. However, in the end the Australian Democrats will vote for the motion because in its written form it is unexceptional and because we wish to be associated with the broad thrust for tax reform. Also, we accept the need for a review of expenditure, which also makes up part of the motion. But surely a review of expenditure is a constant exercise, not a one-off exercise. Surely it is not envisaged that the review of expenditure is to be grasped and put forward in the same context as the review of the taxation system per se. If that is part of the intent of the motion it makes it a very silly motion because then we would be talking about the whole process of government being reviewed at the same time as the taxation system is reviewed. It is a physical impossibility.

I go through the points in the motion. Senator Rae has asked is there not a need for a review of expenditure. Of course there is. There is a constant demand for expenditure reduction. That gives us the hint that out there in the electorate people recognise, as has been put forward very strongly by members of the Opposition today, that the expenditure of this Government should be reviewed; that it is excessive. But it is interesting that the demand for expenditure reduction by the Government always comes from this side of the House. No matter who is sitting over here, Labor Party politicians, Liberal Party politicians or National Party politicians, they always demand from this side of the House that there be reductions in expenditure. Such demands inevitably come from the Opposition. What happens in the real world is that when they move to the other side of this chamber they always increase Government expenditure. The pattern never changes; no matter who is sitting on the Treasury benches the expenditure rate goes up. So this sort of motion is the sort that one would inevitably expect from an opposition party. Of course when we talk about reducing expenditure we do not need to go very far to find out where expenditure should be reduced. We could walk out to the front steps of Parliament House at this moment and get answers from everybody standing on or near those steps. The answers always have one implicit connotation: 'Reduce Government expenditure in every area, as far as I am concerned, except that which affects me'. That is endemic in every response we will hear. We will hear such comments from business representatives, Public Service representatives and defence representatives. Every part of our society wants Government expenditure to be reduced provided the reduction does not affect them.

The second leg of the motion seeks the restoration of the incentive and opportunity for the creation of the economic growth and national wealth. Certainly, the Australian Democrats would support that. Which Government, which political party, which group in the community, which individual, would oppose it? Not only does the tax system provide disincentives, but also we want to recognise that beyond that there are the problems of over-regulation, the problems associated with three tiers of government, and so on and so on. We need to address many things which do need to be studied and remedied so that we have a restoration of the incentives and the opportunities for the creation of economic growth and national wealth.

Certainly, if there is one party in this Parliament which is a private enterprise party with an absolute commitment to the encouragement and development of our entrepreneurs, and in particular small businesses, which are the epitome of Australian initiative and drive, that is the Australian Democrats, as our record proves when it comes to a consideration of those facets where the Opposition in particular champions small businesses out in the electorate and then votes against their interests in this Parliament time and time again.

The third arm of the motion refers to the reduction in the burden of personal taxation. That is a surprising inclusion coming from any party in this Parliament. It is accepted by all of us that the burden of personal taxation is too high and that relief is overdue. It is interesting for that motion to be coming from the Liberal Party, because the Liberal Party has made it very, very difficult for personal income tax rates to be reduced, other than for its friends who were the beneficiaries of the loophole in the tax legislation in this country. Every amendment that was introduced by the Liberal Party was deliberately aimed at ensuring that there was always a loophole there for its friends. That is one of the travesties that flow from a motion which talks about the reduction in the burden of personal taxation. Of course, we have two groups of taxpayers in this country; the pay-as-you-earn, responsible taxpayers who pay their share of personal taxation and those who through the manipulation of their affairs are able to avoid paying personal taxation. They are the people who were specifically provided for by the sorts of tax legislation that we have seen over the last decade or so.

The fourth arm of this motion relates to relief for families by the introduction of income splitting for tax purposes and to tax rebates for child care. I wonder what will be the colour of the meat on the bones of this proposition. Income splitting means many things to many people. Prior to the election the Liberal Party put forward a whole mess of policies; policies which were totally inadequate and patently inequitable. Income splitting, per se, is acceptable to the Democrats, but we want it to be very, very clear that we are not talking about income splitting which gives a massive benefit to somebody on a $100,000 income and minimal, if any, benefit to somebody on a $20,000 or a $15,000 income. During the election campaign, as it became obvious that the Liberal Party had been caught once more trying to help its very wealthy friends, the limit was suggested, as was the Liberal promise to phase it in over time. That is something that I seem to have heard before. Every year of government we hear that benefits will be phased in over time.

The Liberal Party proposals for tax rebates for child care were quite obviously dragged out for election purposes by an Opposition, at that time, that had seven years in government to address the child care problem. The Liberal Party proposals seemed to concentrate the benefit on upper and middle income earners again, while neglecting the overall problems faced by the many people in Australia who desperately need access to child care. For most two-income families child care will be a necessary expense. The Australian Democrats believe that in these situations child care expenses need to be a tax concession and, preferably, subject to a rebate for equity reasons. However, in families where one parent is earning income and the other is working at home, child care is still a problem. The person staying at home may need access to child care on an occasional basis, or on short term regular bases. In situations where neither parent is working, or in one parent families, access to child care is important because those people need an occasional respite from their children. Governments must be prepared to act so that child care is readily accessible to all of those categories of people, and tax rebates for child care go part of the way towards resolving this area of concern.

The last two paragraphs-the review of the distribution of tax revenue base between the various levels of government, and the emphasis upon neutral, efficient and equitable taxes-the Democrats will endorse.

In conclusion, I would like to address a few remarks on the tax summit, which could be very productive. Tax reform is a long term strategy and not just a single Budget item. It needs the support of all political parties to ensure its implementation. Today I gave notice of a Taxation System Reform Bill, which will provide a structure, a timetable and a guarantee of commitment from future governments. It takes on board the Asprey and Mathews reports and the summit deliberations and the input to the summit. Parliamentarians from all parties will formulate the legislation under this Bill for long term tax reform. An all party joint parliamentary committee will consider all points of view, will arrive at achieveable goals and will prepare draft legislation.

I believe that it is imperative that all political parties be represented at the tax summit, specifically to listen. If all political parties are represented if delegates attend with an open mind, if leading up to the tax summit, they do not denigrate the efforts and the inputs of those who attend and those who are currently participating in the public debate and if, instead of opening their mouths they open their ears to the people who elected them, the tax summit may well be the watershed in the tax reform system of Australia.

All honourable senators agree that the tax system needs reform. We all agree that it is unjust, inefficient and very little understood and that it is expensive to learn about it. I think most of us agree that there is one major beneficiary of the present system, that is, the tax avoidance industry. The tax summit may not reach a consensus. I do not believe that is possible, but it will give an opportunity for all options to be put forward. I give this commitment: The Australian Democrats endorse the tax summit. We applaud the Government's initiative on the tax summit. We will work with other parties to introduce genuine, meaningful tax reforms for this country. Therefore, in what I hope is the spirit of this motion, we will support the motion.