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Tuesday, 11 September 1984
Page: 1003


Mr TUCKEY(5.16) —I would like to correct the statement of a previous speaker where he said it would appear that the Government is confusing its own legislation on pensioner tax rebates with the tax threshold. Of course, the two work quite differently. I have been advised by the shadow Treasurer, the honourable member for Bennelong (Mr Howard), that we stick by our original claims. The purpose of my rising is to address the House on this income tax legislation. We are debating cognately a number of Bills that cover the income tax on individuals and companies as well as the tax rate. They also correct a ludicrous situation that has arisen in the bank account debits tax and, of course, they cover the Medicare levy which is that nationalised health scheme for all Australians which in fact covers only some, in fact very few in the electorate of O'Connor.

The Prime Minister (Mr Hawke) in recent times, in addressing the tax debate and tax on individuals and others, has continually raised the issue of tax avoidance -avoidance of the taxes that are involved in this legislation. In particular, the Prime Minister has returned to making references to the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union and his coverage of bottom of the harbour schemes. I will refer to that report with some reference to chronological order. It is interesting to note that Costigan, referring to the issue of bottom of the harbour matters in his interim report No. 4, Volume 1, page 33, states:

. . . the Australian Taxation Office in Perth detected the operation of these schemes as early as 1973.

We might remember who was in government in 1973. Let me tell honourable members who the Treasurers were, because John Howard was not one of them. For the two years following that detection the Treasurers were: Mr Frank Crean to 11 December 1974, about a year after the original detection; Dr Cairns to 6 June 1975; and, of course, the present Minister for Foreign Affairs (Mr Hayden), until 11 November 1975. So in two years, although these things were going on-the Taxation Office was aware of them and was seeking legal opinions and other information-nothing was done by the then Government. I am not one to say that things did not grow from there on. But, had the government of the day nipped the process in the bud, it could be clearly argued that these things would never have proceeded to become what they are. The fact of life is that other interesting situations arise. The nationalised legal services that governments have provided create more problems than anything else. In eight years they failed to come to a conclusion on the matter. By going to the private sector- namely, Mr Brinsden, QC, on two occasions-governments were able to get information at the drop of a hat, once in two weeks and another time in three or four weeks, and there were recommendations to proceed.

Had the Taxation Office been able to deal with Mr Brinsden, the private enterprise operator, again I believe without the help of governments of either persuasion it would have been able to resolve the matter internally. The many innocent people who were eventually caught up in what they believed to be a legal practice would not have suffered as they did. It is amazing who some of these people, who call themselves innocent, are. Nevertheless, with all the embarrassment that Mr Costigan caused the then Government, at no time was there a suggestion that he should curtail his activities and in fact--


Madam DEPUTY SPEAKER (Mrs Child) —Order! Could the honourable member for O' Connor inform the Chair which Bill is relevant to the bottom of the harbour schemes and the Costigan report?


Mr TUCKEY —To date I have not heard one speaker questioned on where he might be leading, provided he kept the matters relevant to taxation.


Madam DEPUTY SPEAKER —Order! I suggest to the honourable member that he be relevant to the six Bills. He has a pretty wide area to cover.


Mr TUCKEY —For the information of the House, I wish to touch on a particular company structure. No doubt, this Bill also deals with companies, and their formation and taxation. I am interested in a company by the name of Knowles Investments Pty Ltd that was incorporated on 29 June 1973. The application was lodged by Kott, Wallace and Gunning, solicitors in Perth, on 28 June 1973 and has a company number of 914/73. Such a company would have been formed in the very critical period which I mentioned in my opening remarks. This company eventually had some difficulties with its taxation. But on 27 June, it is interesting to note, the people who consented to be directors were Brian Thomas Burke and Susanne May Burke. At that time Allan William Bradshaw was appointed the secretary. A little further in the document we find that on 30 June 1973 Brian Thomas Burke and Susanne May Burke were appointed as directors. On 2 July 1973 Allan William Bradshaw resigned as secretary and Susanne May Burke was appointed. On 16 July 1973 Susanne May Burke resigned as secretary and Allan William Bradshaw was appointed as secretary.


Mr Gear —Madam Deputy Speaker, I raise a point of order. This has got absolutely nothing to do with the Bills before us unless the honourable member for O'Connor can show that, in some way, the company has something to do with the superannuation funds for the current year.


Mr TUCKEY —Madam Deputy Speaker--


Madam DEPUTY SPEAKER —Order! I am ruling on a point of order. I suggest to the honourable member for O'Connor that he is way outside the six Bills that are before the House and that he come back to the six Bills we are considering.


Mr TUCKEY —Madam Deputy Speaker, I can only give honourable members this information for the purpose of developing that argument. If I am denied that opportunity I cannot continue. The information relates to circumstances of various directors at various times. I am pointing that out. If I cannot continue in that way, I cannot develop my argument. My argument is that that company was eventually vacated by Brian Thomas Burke when he resigned as a director on 16 July 1973. That may relax the honourable member who has just taken a point of order. It is interesting to note that on 28 July 1973, a very short period after that, Brian Thomas Burke became a member of the State Parliament.


Mr Barry Jones —Madam Deputy Speaker, I raise a point of order. This is a cognate debate. While there is some breadth allowed in cognate debates, the implication is that it must fall broadly within one of the subjects of the six Bills before the House. Perhaps the honourable member for O'Connor could indicate, through you, Madam Deputy Speaker, which of the six he relates to and, specifically, which part of the Bill.


Madam DEPUTY SPEAKER —I thank the Minister for his intervention. I have been looking at the second reading speeches on the Bills. We have the Income Tax ( Individuals) Bill, the Income Tax (Companies, Corporate Unit Trusts and Superannuation Funds) Bill which is more of a machinery Bill, and the Income Tax (Rates) Amendment Bill which amends the Income Tax Rates Act. I suggest to the honourable member that his remarks are not relevant to the three income tax Bills before the House; he might like now to speak to one of the six Bills before the House.


Mr TUCKEY —It is quite clear that when someone sets out on a 20-minute debate he develops an argument. In giving honourable members this information I am sure I can convince you, Madam Deputy Speaker, that the matter relates to the Income Tax (Rates) Amendment Bill and the Income Tax (Individuals) Bill.


Madam DEPUTY SPEAKER —Order! The Chair requires the honourable member to speak to one of the six Bills that are before the House.


Mr TUCKEY —Madam Deputy Speaker, I can only give you my assurance that I am doing exactly that. I will very shortly refer back to the Bills.


Madam DEPUTY SPEAKER —To date the honourable member has not convinced the Chair that he is doing that.


Mr TUCKEY —Madam Deputy Speaker, I do not know what else I am able to do to convince you. The point is that everybody else has talked about the economy. The honourable member for Bennelong (Mr Howard), the shadow Treasurer, never touched on one of these Bills. The previous speaker, the honourable member for Bendigo ( Mr Brumby), talked about--


Madam DEPUTY SPEAKER —Order! I was not in the Chair while previous honourable members spoke. I require the honourable member, as I will require future speakers, to be relevant to the six Bills.


Mr TUCKEY —Thank you, Madam Deputy Speaker. I will be relevant. The company to which I have referred and of which Brian Burke, the Premier of Western Australia , was a director went to the bottom of the harbour.


Madam DEPUTY SPEAKER —Order! Will the honourable member please take heed of the Chair and make his remarks relevant to the six Bills, or I will require him to resume his seat.


Mr TUCKEY —Yes. These Bills alter the income tax rates. They bring in a five- scale charge which has further advantaged people who are not known as a single income family. A single income family is a family where one member works and the other stays at home. As such, they are unable to enjoy the benefits that two income earners enjoy, whether it be in the form of splitting an income or in saying that both of them earn an income. On average weekly earnings that will cost a single income family as much as $140 a year. I am very disappointed that the Government has chosen to do that as compared to giving some assistance to that particular sector. I am not saying that the single income family has never been well looked after, but at least the spouse rebate has contributed significantly as a tax rebate for previous families in that regard.

Of course now people are no longer able to get an additional spouse rebate because the Government did not want that. It did not want to go down that track because of pressure from feminist groups. Single families are now further disadvantaged. As I recollect, as average annual incomes rise to about the $25, 000 mark, the increased advantage to people able to split their incomes will be of the order of $400 a year. So it is significant.

These are but some of the many matters which concern us. Of course we are attending to the Medicare levy. According to the Budget Papers, as I remember, the Medicare levy is raising some $700,000 short of the Government's expenditure in that area. Anybody who deluded himself and believed that the taxpayers do not pay the bill would, of course, be quite foolish. They even pay the bill when we get these massive deficits because a deficit is only deferred tax. It is tax that must be paid at some time in the future. So many governments overlook the fact that taxation is only involuntary payments made by members of the community to government for the provision of services that they often neither desire nor use. Medicare is a classic example of people who are not able to share in the wonderful benefits the Government provides-for example, people who live in the country-having to pay an additional tax, in this case an insurance levy.

All of these matters come together. I am particularly sorry, Madam Deputy Speaker, that you do not believe that some of the other matters I wanted to bring to the attention of this Parliament are of significance. The amount of effort that has been made in recent days to raise an issue which even the Minister for Finance (Mr Dawkins)-who I believe has a few questions to answer in regard to personal, individual and company taxation-has said is a dead issue is of concern to me. Clearly, the Prime Minister wants to raise the matter again. The point I wanted to make during this debate-I thought it was quite relevant in the light of these fairly broad discussions-is that one can set out to denigrate people and then find that people very close to one's own side of politics are caught up in the net, sometimes quite innocently. I mentioned the name of a Premier of Western Australia.


Madam DEPUTY SPEAKER (Mrs Child) —I suggest that the honourable member do not return to that subject.


Mr TUCKEY —It is up to other people, Madam Deputy Speaker, to decide the guilt of individuals. It is a question that can be decided. Nevertheless, taxation avoidance legislation has been brought into this place. Government members have criticised us during this debate for rejecting the other legislation brought in by this Government to introduce more retrospectivity into this area. Let me put my position clearly. I opposed the retrospective legislation of the honourable member for Bennelong (Mr Howard). I voted against it and I have not changed my view. Yet I supported him wholeheartedly in 1980 when he brought in legislation to stop a practice that he had discovered. The legislation stopped it but it did not, in fact, do what the later retrospective legislation did. It can affect many innocent people. I mention the granddaughter of the founder of a large company in Western Australia who has received tax accounts but who probably has never taken the shares out of her bottom drawer. I ask: What is the difference between that lady and the Premier of a State-if you like me to put it that way, Madam Deputy Speaker-who, in fact, was once removed from a bottom of the harbour transaction? If I had been able to read the names of all the people in that company it would have been interesting to note how, all of a sudden, in a matter of weeks, the directors started to wander all over Australia and how the registered office jumped from Brisbane to Melbourne to Wedge Point and to Port Hedland. As I said, I am no skindiver--


Mr Barry Jones —But you plunge to some pretty murky depths.


Mr TUCKEY —No, I am putting an argument that there could be innocents in this case. One does not know whom one will catch with retrospective legislation.


Madam DEPUTY SPEAKER —Order! The honourable member is returning to the argument that the Chair has already asked him to leave.


Mr TUCKEY —Thank you, Madam Deputy Speaker. I will not continue to do that.


Madam DEPUTY SPEAKER —The Chair is here not to decide whether or not an honourable member speaks on significant issues but to ensure that he speaks to the matter before the House.


Mr TUCKEY —Yes, Madam Deputy Speaker; nevertheless you can see that when governments set out--


Madam DEPUTY SPEAKER —I can see that it is difficult, but I am not going to make it any easier.


Mr TUCKEY —When governments set out to raise income tax, to alter income tax rates and to do things of that nature they are not always sure of where they might go. I think that had I had more opportunity to speak on these matters honourable members opposite might have been quite interested to hear the types of accusations that might have been able to be levelled against certain people because of their association with bottom of the harbour companies when, in fact, those people were innocent. I cannot say whether the Premier of Western Australia was innocent or guilty. However, I can say that Knowles Investments Pty Ltd was his company and that it went to the bottom of the harbour. That is something for which he should now answer.


Madam DEPUTY SPEAKER —Order! The honourable member is once again moving outside the Chair's instructions.


Mr TUCKEY —Madam Deputy Speaker, I have only two minutes left. It is still a matter of concern to the Opposition that the Government has spent such a large amount of money when it could have used quite a bit of its revenue to keep Australia on a normal course. The fact is that the Budget Papers show us that public debt servicing now is only approximately $1 billion below the present deficit. In business terms that means borrowing to pay the interest bill, and we all know what that means in business terms. It means that the receivers will be around tomorrow. That has been achieved in two years. We know very well that public debt servicing costs have increased during the life of this Government to an amount that is, in fact, equal to the total of what they were during the entire seven years of the Fraser Government. Earlier today I heard the Treasurer (Mr Keating) telling us how all that has been structured to create growth. If it is growth in government, and all the figures tend to support that, I am of the opinion that Australia will be in the same sort of trouble as are the countries of Central and South America which I had the privilege to visit recently as a member of a parliamentary delegation. Those countries tried to spend their way out of trouble. Of course they are now in deep trouble. So that is no recommendation for Australia.

Australians are self-sufficient people. I am sure that at any time they would prefer to see government expenditure contained-I do not say 'taxes increased'- wherever possible so that Australia pays its way year by year. Probably the large deficit of the previous year was designed to get us out of the terrible drought. However, if we can believe the Government, things are so good now that we as a nation should not be borrowing money to carry on government affairs. I reject the Government's argument. I am disappointed, Madam Deputy Speaker, because I am sure that Mr Burke would have liked the opportunity to explain why he was the director of a bottom of the harbour company at one stage.