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Tuesday, 9 October 1984
Page: 1911

Mr KEATING (Treasurer)(3.45) —The poor Leader of the Opposition (Mr Peacock), more to be pitied than despised, has seven and a half weeks in which to save himself from the honourable member for Bennelong (Mr Howard), the Deputy Leader of the Opposition. The fact is that, if his performance in Parliament today is any example, he will try to do as badly as possible because that will mean that the Deputy Leader will lose his seat and the problem will be solved. There is one way for the Leader of the Opposition to get the Deputy Leader off his back and that is by making sure that the Deputy Leader loses his seat. He needs only a 5.5 per cent swing in Bennelong to lose his seat. It may be worth recalling that during the last election campaign, when Malcolm Fraser was out talking about money and Reds under beds and all the other idiocy in which he was trafficking, his great ally and friend, the big, brave Deputy Leader, who has a heart like a carraway seed, was back in Bennelong because he thought he would lose his seat. He was running around doing over the parents and citizens associations, the scout halls, the clubs, the whole works. He was scared stiff that not only was the Government gone but also he would lose his seat. The chance of losing it on this occasion is much greater than on the last occasion. With the Leader of the Opposition doing his best to perform badly, it is almost like the film The Producers with Zero Mostel. In that movie the characters had to invest in a giant flop and find such a flop. The Leader of the Opposition is doing a Zero Mostel, trying to perform as badly as possible to get the Deputy Leader off his back.

The fact that in today's Question Time the Leader of the Opposition for the fourth time was asked questions about his own Bill is unbelievable. What we heard more than anything else was the same old tawdry attack and misrepresentation we have heard for days. There is hardly a soul in the Press Gallery. Nobody is interested in what the Opposition has to say. The fact is that members of the Opposition keep parroting this claptrap about the Government being the biggest taxing government since the War. The fact is that the honourable member for Bennelong carries the stigma of the Treasurer who presided over the largest tax receipts to gross domestic product since the Second World War. He and Mr Fraser were in the highest taxing government in Australia's post- war history. Those are the facts. In 1981-82 receipts to GDP were 27.3 per cent; in 1982-83, 27.2 per cent; and in 1983-84 and 1984-85-the years of this Government's two Budgets-26 per cent and 27 per cent respectively. As I have said on plenty of occasions, the Deputy Leader might want to run away from his track record-I understand that-but we will not allow him to do that. That nails that misrepresentation.

The other stupidity of the Leader of the Opposition is that he thinks he can just throw around a number and someone will take notice of it. He said that the Government had increased tax by $22 a week. If that had been the case, we would have another $6 billion. Instead of a Budget deficit of $6.7 billion, we would have a Budget deficit of $0.7 billion. Where did the $6 billion go? Of course, we never received it. There was never a $22 a week tax increase. There was a significant tax cut. The Leader of the Opposition compounds the misrepresentation by saying that most people do not get a tax cut. Most Australian full time workers received from the Budget a tax cut of $7.60 a week which will be delivered from the first week of November. That cut is across the income range of $12,500 to $28,000, which is where the great body of the Australian work force and the taxpayers are. Thus most Australians will receive $7.60 a week but, just as importantly, we have now introduced to the tax scales two additional steps to make them fairer and more progressive. Now, instead of paying 30c in the dollar, once one earns above $4,595, which is the threshold, there is a rate step of 25c in the dollar between $4,595 and $12,500.

The Leader of the Opposition never mentions the fact that there is a 25 per cent step in the rate scales. He keeps talking about the 46 per cent rate. He said: 'Half of all that Australians on average weekly earnings receive, they now pay in tax'. I said by way of interjection that that was a lie. I changed that to say that it was an untruth. Let me demonstrate the untruth. The fact is that all Australian taxpayers, no matter where they live or what incomes they earn, get the benefit of the tax free threshold of $4,595, on which no tax is paid. They get the benefit of the new rate step of 25 per cent between $4,595 and $12, 500. That reduces their average rate of tax. So the fact is-the Opposition may not like this-that all Australian taxpayers will receive a reduction in income tax this year. That lays down that misrepresentation.

Let me deal with the 46 per cent step because the Leader of the Opposition goes on about it interminably. The fact is that the 46 per cent rate begins at $19, 500. Having introduced a rate step of 25c and then 30c, one's average rate of tax is reduced. If one earns income over $19,500, whatever that income happens to be, it is taxed at 46 per cent, but because of the lower rate of tax further down, one still gets a tax cut. That is why the reduction in tax is $7.60. We have heard some selective commentary about one step in the rates scale-the 46 per cent step-and the absolutely blatant dishonesty of the Leader of the Opposition by not referring to the 25 per cent step, the new step that the Government inserted in the rates, for incomes between $4,595 and $12,500. So most Australians on full time earnings will receive a $7.60 a week tax cut, particularly those Australians whose income is between $12,500 a year and $28, 000. That is a fact.

We did not do what the Deputy Leader of the Opposition, the former Treasurer, did in 1978. That is why he is talking about mini-Budgets. He thinks that we think as he does. He promised a tax cut in 1977. Honourable members will remember the advertisements which stated 'ring up and find out how much your tax cut will be', the 'fistful of dollars', the telephone ads. He gave the tax cuts in November 1977 and took them away in May 1978. That is the morality of the Deputy Leader of the Opposition on tax. I leave aside for a moment the fact that for five years he let tax avoidance run rampant in this country.

Mr Howard —I thought you would mention that.

Mr KEATING —Of course I will mention it.

Mr Howard —I can show you the Tax Commissioner's report on that.

Mr KEATING —Yes. The honourable member will find that $2 billion of outstanding tax was lost in his time. That will straighten him up. There is no person in this Parliament with a more tawdry record on tax than the Deputy Leader of the Opposition. I will nail all of the misrepresentations by the simple fact that if the Government had given indexation this year-that is, had handed back the inflationary impact on the tax scales-it would have cost $1.2 billion. In fact, the tax cut cost $2.1 billion-almost double that amount. In other words, the tax cut is real and genuine.

Of course, members of the Liberal Party know all about tax cuts. They give them and take them away again. In 1982, 60 per cent of the tax relief was taken back by the Deputy Leader of the Opposition, the then Treasurer, in sales tax, excise and bank accounts debit tax increases. The interesting thing is that they keep talking about the Government's intention of introducing this, that and the other tax. What they do not talk about are the taxes they introduced. They introduced more new taxes than any other government one can remember. Let me run through the taxes they introduced in their time: The bank accounts debit tax; the 2 per cent revenue duty; the 2.5 per cent Medibank levy; the 1978-79 income tax surcharge, which I just mentioned, when Mr Howard took away the tax cut of 1977; sales taxes on pet food, soft drink bottles, television tubes, safety belts, oils and greases, insecticides, curtains, manchester, construction equipment, hand tools and literature; excise on off-road distillate; a 33-1/3 per cent increase in sales tax rates; increases on tobacco, petrol and beer; and, most of all, the $3 billion increase in the Bass Strait crude oil levy-the $3 billion petrol tax. They had no mandate for it and they had never mentioned it. They raced in and raised $3 billion in new taxes.

The thing about members of the Liberal Party is that they have no shame. They talk about tax after their record of massive tax increases, their record of taxing inflation, their record of the $3 billion crude oil levy-all of the new taxes that I have mentioned-and, worst of all, the absolute intransigence and incompetence of the honourable member for Bennelong in letting billions slip through the Commonwealth's hands in sanctioning tax avoidance by his inaction for so long and after so much pleading by the Commissioner of Taxation. So that is the record.

Another important statistic is the fact that in the seven years of Liberal government, in regard to taxation in Australia, total government revenues increased from $18.3 billion to $44.5 billion-an increase of 143 per cent. In other words, in the seven years that the Liberal Party was in government taxation went up by 143 per cent, from $18.3 billion to $44.5 billion, or, to put it in terms of gross domestic product, from 25 per cent to 27.2 per cent. That is its record. I was interested in referring to some Hansard records, to see some of the arguments of the Deputy Leader when we found the massive tax avoidance in this country. At that time, in a cowardly way he hid behind the reference in the report of the Costigan Royal Commission into the Activities of the Federated Ship Painters and Dockers Union to the secrecy provisions. On 25 August 1982, as recorded at page 886 of Hansard, the present Deputy Leader of the Opposition said this:


that is the then Leader of the Opposition-

is saying that we knew all the time what was going on, yet one of the major findings in the Costigan report is that the Income Tax Assessment Act is so structured that we cannot find out what is going on. . . . So the principal charge of the Leader of the Opposition-that is, that I either knew or I ought to have known-is not just contradicted by me . . .; it is contradicted by Costigan himself.

He was saying that, because he did not know the personal names of the people, he could not act against tax avoidance. The Tax Commissioner smashed that fraudulent defence by publishing the letters, the volume of which resembled a telephone book, pleading with Mr Howard to do something about bottom of the harbour schemes. That is what we mean when we taunt him in the House about section 16, the secrecy provisions. He raced off to the United States and hid there for four weeks before coming back to face the music. He even had the hide to attack me for attacking him while he was overseas.

Mr Howard —Fancy remembering things like that.

Mr KEATING —He still mentions it. Every couple of weeks he says: 'You attacked me while I was overseas'. I attacked him because he let the thieves and rogues of this country get away with billions. If he is reading the Tax Commissioner's report, he should read where it shows that $2 billion is still outstanding since his time as Treasurer. It is very salutary to read it.

We reject absolutely the views of members of the Opposition on taxation. They do not have a shred of credibility. The fact is that they were members of the highest taxing government since the Second World War. They introduced more new taxes than any other government that one can remember. The oil levy raised billions of dollars. That, of course, has meant that the tax burden on most Australians has been inflated over time. They left us with massive Budget deficits and now they are crying for the small Australian wage and salary earner . I do not think Mr Peacock has ever met one, much less been concerned about one . He swanned around the world for years and never took any hand, act or part in the administration of the Government. We simply reject any notion by the Leader of the Oppostion, Mr Peacock, that he has any concern for those needy Australians. We have now introduced a much more progressive tax scale which is much fairer than indexation. Under indexation a person earning $15,000 a year would have received $2.30 a week. Under our changes such a person will receive $ 7.60.

That is not argument; it is fact. A person on fifteen grand a year in this country-that is, $300 a week-would have got $2.30 a week under indexation. Under our tax cuts such a person will get $7.60 a week. But the Deputy Leader of the Opposition made it quite clear that he would not be giving any tax cut. He said that he preferred to have a lower Budget deficit. He wanted a lower Budget deficit and no tax cut. He is a slave to the foolish ideology of fight inflation first and all the rest of the ideological baggage about economic policy which he carries along with him in opposition. Of course, the interesting thing is that, although he comes into this House and says that, he is never again going to be the Treasurer in a coalition government. He has indicated to all and sundry that he will never take on that job again. I would like to know from the Leader of the Opposition (Mr Peacock) who will be the shadow Treasurer and, if Australia were ever in such an unfortunate circumstance, who would be the Treasurer in a coalition government. The fact is that, as I said, the Opposition is more to be pitied than despised. It is hopeless and helpless and we reject absolutely the matter of public importance that it has raised.

Mr DEPUTY SPEAKER (Mr Mildren) —Order! The Treasurer's time has expired.