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Wednesday, 20 August 1980
Page: 487

Mr BRADFIELD (BARTON, NEW SOUTH WALES) - I ask the Prime Minister: What has been done by this Government during the past five years to reduce the taxation burden of the Australian community? Does the 1980 Budget provide continuing evidence of the Government's commitment to tax reform and tax relief - a situation that did not apply between 1972 and 1975? Is it true that the promises made by the Opposition would cause great hardship to the Australian taxpayer?

Mr MALCOLM FRASER (WANNON, VICTORIA) (Prime Minister) - There have been two tax cuts within the last 1 2 months.

Mr Hurford - Mr Speaker, I take a point of order. I draw your attention to the last part of the question which asked for comment on something emanating from the Opposition.

Mr SPEAKER -The first part of the question was in order; the latter part, as the honourable member for Adelaide correctly points out, was out of order. The Prime Minister is not responsible for Opposition policy. I did not want to interrupt because the Prime Minister, when answering, is entitled to make comment on that aspect if he chooses.

Mr MALCOLM FRASER - Mr Speaker,I thank you for relieving me of the responsibility you referred to. I think honourable gentlemen sometimes forget that there have in fact been two tax cuts within the last 1 2 months. The surcharge was removed towards the end of the last calendar year. The tax cuts effective from 1 July this year total over $600m. While there was a modest, indeed a small, tax cut for all taxpayers, at the same time there was a very substantial tax reduction for single income families - an area where this Government believed the need was greatest. That benefit was very real and must be looked at as an integral part of the totality of the Government's budgetary approach to this year. We wanted people to get the benefit of that reduction as early as possible. So, that tax cut, totalling over $600m, was effective from 1 July.

I am sure that honourable gentlemen will recall that the Government, during its period of office, has introduced substantial tax reforms. The simplification of the tax scales, which put the great majority of taxpayers on a standard rate and relieved a significant number of taxpayers from paying any tax at all because of the much higher tax threshold, was a very real advance. We then abolished estate and gift duties. This was of enormous help to small businesses, farmers and people who wanted to do something for their families and to help hold their family assets together.

In earlier Budgets we substantially reduced sales tax on cars and station wagons from 27.5 per cent to 15 per cent. For primary producers we greatly improved tax averaging and introduced income equalisation deposits. Because of a drought situation that looked like developing and which could have engulfed the whole of Australia last autumn, we introduced special tax concessions, of a very generous kind but of a very necessary kind, in relation to water conservation. That assistance would have been provided in this Budget, but because of the drought situation the Government thought it ought to be introduced, as it was, from April of this year. That was a very significant measure.

Last year, of course, we introduced tax concessions for primary producers in relation to the storage of grain, hay and fodder. The investment allowance was introduced, and the investment allowance continues. This Budget provided for accelerated depreciation, of plant and equipment which, I am certain, will be greatly appreciated by Australian industry. It will help to maintain the competitiveness of Australian industry and our capacity to sell in Australia and overseas and hence enhance our capacity to employ. Of course, the last Budget contained significant tax concessions for the tourist industry. In recent Budgets the retention allowances for small businesses have been increased from 50 per cent to 70 per cent. This Budget introduced an imaginative proposal concerning the superannuation of self-employed persons and employees who are not supported by superannuation funds. That latter point in particular needs emphasising because it will be of great benefit not only to the self-employed but also to the many employees who do not have access to an employer-supported superannuation fund.

I think it would be relevant to ask what the impact of alternative policies might be if the Government were prepared to adopt alternative policies which, in fact, it is not. We cannot stretch the resources of this country beyond that which we produce today. One cannot spend more than one earns as an individual or as a family. As a nation we cannot spend more than we earn unless we are prepared to go to the mythical stage of printing dollars or creating inflation. There is no doubt that if we did adopt policies that resulted in an additional expenditure in a few areas of government, of approximately $2,000m a year--

Mr Dawkins - You are lying again.

Mr SPEAKER -Order! The honourable member for Fremantle will withdraw, and I warn him that if he interjects in those terms again I will deal with him.

Mr Dawkins - You tell him to stop, Mr Speaker. If you insist I will withdraw, but tell him to tell the truth.

Mr SPEAKER -Order! The honourable gentleman will withdraw unqualifiedly.

Mr Dawkins - If you insist, I withdraw.

Mr SPEAKER -I give a final warning. The honourable gentleman will withdraw unqualifiedly.

Mr Dawkins - I withdraw.

Mr MALCOLM FRASER - If we did adopt policies that resulted in an additional $2,000m of expenditure, that action would not only be grossly irresponsible but also it would add enormously to the deficit or to the tax burden, and either would have a very damaging impact on the Australian community. I think it is also worth noting that even though under this Government the age pension is now about the highest proportion of average weekly earnings that it has been for many years, if we were to adopt a policy of lifting that proportion to 30 per cent of average weekly earnings, instead of around 24 per cent as it is--

Honourable members interjecting ;

Mr SPEAKER -Order! The right honourable gentleman will resume his seat. The purpose of Question Time is for honourable members to seek information and to be given answers. The right honourable gentleman is answering a question and I do not intend to call him again until the House remains silent. If Question Time departs then so be it.

Mr Innes - He couldn't lie straight in bed.

Mr SPEAKER -The honourable member for Melbourne will withdraw.

Mr Innes - I withdraw.

Mr SPEAKER -Is the honourable member for Corio raising a point of order?

Mr Scholes - Mr Speaker, recognising the difficulty of Standing Orders relating to answers to questions, I draw your attention to the fact that the Prime Minister is answering a section of a question which you have already ruled out of order.

Mr SPEAKER -The honourable member for Corio ought to know that the Standing Orders bind me and bind all honourable members of the House. The question was in order as to part. I permitted it. The answer given by the right honourable gentleman is relevant to the part that was in order and I will permit him to answer that, but I do not intend to call him until I feel confident that the House will remain silent. I call the Prime Minister.

Mr MALCOLM FRASER - Up to this point I have only indicated the situation if the Government were to adopt certain policies. I have not mentioned the Labor Party at all in relation to it. I think it is worth noting also that if we were to adopt policies that were indicated on a certain radio program earlier this morning, that is of lifting pensions and benefits to 30 per cent of average weekly earnings over a period, that would cost, on estimates that have been given to me by my colleague the Minister for Social Security, an extra $ 1,830m a year. Of course that is a commitment which I know is made over time; nevertheless I am sure that people listening to that program would have regarded it as a commitment.

I think it is also worth noting that if this Government were to state, on the basis of Government policy, that it committed itself to a capital gains tax, a resource rental tax, a levy on domestic oil producers and a number of initiatives in the tax area and 'other measures' of that nature- if I had theoretically said that- and if another Minister had come along and said that he wanted to amplify what the 'other measures' meant and said that it was wrong that we did not have some form of tax on capital, be it death duties, capital gains tax or wealth tax, or perhaps some combination of those or all three of them, of course I think we would terrify most people throughout the Australian community.

Mr Young - I raise a point of order, Mr Speaker. If we in the Opposition have to put up with this intolerable situation of the Prime Minister getting unlimited time to answer questions between now and the election, we might as well leave the Parliament.

Government members interjecting-

Mr Young - Mr Speaker,I have not finished taking my point of order.

Mr SPEAKER -I know that the honourable gentleman has not finished. Honourable members on the Government side should realise that, if there is that outburst of noise, it is very difficult for me to ask honourable members of the Opposition to remain silent. I ask honourable members on the Government side to remain silent while the point of order is being made. I call the honourable member for Port Adelaide.

Mr Young - Mr Speaker,there is no reluctance from this side of the House to debate any of the matters which the Prime Minister is raising. But, as you know, Mr Speaker, we are in an election period. We have only to wait on the Premier of Queensland to tell us when we can have it and we will be into a campaign.

Mr SPEAKER -I ask the honourable member to make his point of order.

Mr Young - We cannot tolerate this situation every day. You will have to give the Opposition the same ultraprotection that you are now giving to the Government.

Mr SPEAKER -I believe that the purpose of the point of order was to make a protest. I accept it as a protest. There is no point of order. The honourable member well knows that. The honourable member for Port Adelaide should realise - I am sure he does - that the Standing Orders make a provision as to what questions are in order and what questions are not in order. The Standing Orders make no provision whatever about answers or the length of them except that they must be relevant. The right honourable gentleman's answer is relevant. I call the Prime Minister.

Mr MALCOLM FRASER - There are only two other points that I want to make briefly. From the reaction of my friends in the Australian Labor Party, I think it is quite clear that they know that the hypothetical questions that this Government has no intention of adopting are the policies to which they are firmly committed. I am reminded of something that Clem Jones, the former Lord Mayor of Brisbane, said. He was obviously well versed in financial matters. Mr Hauenschild said that the Leader of the Opposition was a confused person and Mr Jones said he has admitted that he could not read a balance sheet. That is why the Leader of the Opposition wants five-yearly Budget figures- so that he can get Bill Hartley to tell him what the red figures mean.

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