Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 9 December 1976
Page: 3594

Mr DEPUTY SPEAKER (Mr Lucock -Is leave granted? There being no objection, leave is granted.

Mr HURFORD - I had hoped that on a technical subject such as this the Treasurer (Mr Lynch) would have used words of a non-political nature. But this was not to be. The Treasurer's remarks have certainly drawn me to my feet. I take the opportunity to condemn supporters of the Government and Ministers in particular for not conducting business, such as the trading stock valuation adjustment statement which is now before us, in an adult way.

The first few paragraphs of the Treasurer's statement contained some ' political nonsense about personal income tax indexation which is totally unrelated to the subject of inflation accounting for the business sector, which is the subject of this statement. What has been said in those paragraphs is quite dishonest. It is no wonder that this Government has hardly an ounce of credibility left. I will give the House some examples of what the Government has done. After saying that it would not meddle with Medibank, the Government did meddle with it. After saying that it would support wage indexation, it then went to the first national wage case and opposed wage indexation. This time last year we heard how there was to be reform of the tax structure, and that there was to be more take home pay for the wage and salary earners of this country. That just is not true. We applaud the introduction of tax indexation. We have done so on previous occasions. I repeat it. But it is not true to say that tax indexation will result in more take home pay for the Australian wage and salary earners.

Tax indexation was able to be introduced so promptly only because of the reforms that took place in the Hayden Budget this time last year. Changes were made to the tax scales in such a way that tax indexation was able to be introduced. It is just not true to say that there is now more take home pay because although there have been adjustments for Inflation under tax indexation we have had offsetting them the health taxes, the removal of rebates for dependants and the abolition of interest deductibility on home mortgages.

Only last Monday night when opening the debate in the Parliament on taxation legislation I gave the example of a man with a wife and 2 children who received a taxable income of $10,000 a year, which is just over the figure for average weekly earnings. I pointed out that after taking into consideration the increased child endowment benefit, this man was now taking home over $5 a week less when adjustments were made for inflation and account was taken of the health taxes and the removal of rebates for dependants. I should note that this calculation does not take into consideration the removal of the deductibility scheme for interest paid on home mortgages which imposed further costs on many Australians. I am bound to make those points because in a dishonest way the Treasurer introduced the subject to tax indexation in his statement on trading stock valuation adjustment.

Having said that I come to the details of the statement. The Australian Labor Party Government set up the Mathews Committee, the report of which gave rise to the measures which are the subject of the statement, details of which have just been given by the Treasurer. I am bound to point out also that this statement gives the impression that the Australian Labor Party

Government was responsible for the level of inflation which has given rise to the measure we are now considering. That too is a dishonest statement. There is not a country in the world, which operates under a system similar to ours, that is not suffering from the level of inflation that we are suffering and that has not had to take measures such as the adjustment measures that we are debating today.

The Opposition welcomes the fact that the Government has adopted in a qualified way some of the recommendations of the Mathews Committee. We welcome the fact that a further statement has been made today clarifying what was promised in the Budget Speech. Let us hope that this statement is not merely a carbon copy of the sorts of statements that were made about investment allowance. We all remember that the Treasurer made statement after statement on this subject in the House in the early months of this year and that each statement gave rise to more confusion than the previous one. I trust that this will not happen in respect of trading stock valuation adjustments.

Trading stock valuation adjustment is, of course, only one element in current cost accounting. I am on record as giving a personal view on current cost accounting to a seminar in Melbourne entitled Dimensions of Current Cost Accounting run by the Business Law Education Centre on 4 November this year. I believe that we cannot continue to allow accounting methods which gave rise to taxation and dividends being paid out of capital. Adjustments have to be made. Adjustments such as these are being made in comparable countries. It is right and proper that they should be made here.

I welcome the fact that the Government has made a move in this direction. Bearing in mind the short notice that I have had to examine the statement, I am not committing myself or my Party to agreement with the decisions taken by the Government as announced in this statement. I believe that we have to make a closer study with our technical advisers of this matter before we commit ourselves. I notice that there are paragraphs in the Treasurer's statement already showing that there is more in the way of information which has to be given. I draw attention to the paragraph which states:

Honourable members will be aware that some protective provisions will be required to ensure that the new scheme of stock adjustments is not misused for tax avoidance purposes.

It would have been preferable if we could have been given these further details. It would have been even more preferable if the particular legislation could have been laid on the table over this period so that we could then have examined this important subject in some depth. I said last Monday night during the debate on the taxation Bills that in this complicated area the Government should have been giving priority to the Parliamentary Counsel and taxation advisers in bring down specific proposals in legislative form in this House rather than having the Treasurer give us vague statements like this or statements which are not sufficient in detail. It is the actual wording of the legislation which we need to know sooner rather than later. I welcome the fact that we have had a statement. I hope it will be clearer than the initial statement on the investment allowance but I would have preferred that the legislation had been brought into the House. I hope that that will be done soon.

Suggest corrections