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Friday, 1 May 1987
Page: 2191

Senator FOREMAN —I refer the Minister representing the Treasurer to the Press release put out yesterday by the National Farmers Federation. What measures are available to crack down on the non-declaration of interest income for taxation purposes? Is the National Farmers Federation's estimate of a potential increase of $750m in revenue from this source realistic?

Senator WALSH —The point which has been raised by Senator Foreman was one of the more minor distortions or misrepresentations in a piece of crude propaganda circulated yesterday by the National Farmers Federation. I may, with a bit of luck, get the opportunity to make comments about one of the more gross misrepresentations of fact that are contained in that piece of crude NFF propaganda.

The Government's White Paper on taxation of 1975 estimated that some $500m in tax may not be collected because of non-declaration of dividends and interest. Under the imputation system, however, which is shortly to become operative, the cost to revenue from the non-declaration of dividends should be, as I see it, completely eliminated. That figure was expressed in 1984-85 dollars and there would have been, other things being equal, some movement upwards from the $500m, but probably much more than compensated for by the downward movement in dividends income tax previously evaded because of the introduction of the imputation system. Once that becomes operative it follows logically that the NFF's crude piece of propaganda is assuming the non-disclosure of some $750m from interest payments alone.

If the NFF is interested in doing anything about the collection of taxation from interest payments not declared for taxable income, the first and best thing it should do about it is to get right behind the Government in enacting the Australia Card legislation in order that that tax which is due is properly collected. The NFF should start lobbying the Liberal Party, with which I understand its President has close links, and try to force it to let that legislation through the Senate. Alternatively, if Mr McLachlan is looking for an alternative he could, I suppose, put up a proposition that an interest withholding tax be applied, but that itself would entail its own administrative difficulties.