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Wednesday, 17 April 1985
Page: 1241

Mr EVERINGHAM(l0.53) —It ill becomes me, I suppose, to refer to the subject of ham, but it was certainly a very hammy speech from the honourable member for Charlton (Mr Robert Brown). He gave a great performance, reminiscent of one of the last of an almost extinct species of circus clowns. Considering the number of times that the honourable member for Charlton must have been to the well on this subject, it is hard to believe that he can still maintain such enthusiasm to ham up this piece of legislation in this House. It seems that the House is condemned to an endless repetition of the Government's attempt to link tax dodgers and the Opposition in the public eye. In the last Parliament the Government's attempts fell on barren ground but, not deterred by the public rejection at the polls of its posturing, the Government returned once again to the well. The Government knows full well that the Taxation (Unpaid Company Tax) Assessment Bill l985 and the Dividend Recoupment Tax Bill l985 will not pass through the Senate. Therefore, it knows that the reintroduction of the Bills is a waste of the Parliament's time and of taxpayers' money.

Talking about the taxpayers' money, the honourable member for Charlton spoke earlier of the needs of the constituents of his electorate and how the $270m which he said the enactment of these Bills would raise could be spent on services and facilities in his electorate. My Deputy Leader, the honourable member for Bennelong (Mr Howard), referred earlier to the lunatic uranium policy of this Government whereby it is fine to mine uranium at Roxby Downs in South Australia but we are not allowed to mine uranium in the Northern Territory or in Queensland. Let me tell honourable members that one of the greatest rorts, one of the biggest wastes of taxpayers' money going on in this country at present, is the expenditure of $250m by this Government on buying uranium yellowcake from Queensland Mines Ltd, which is processing it at Nabarlek for sale under contract to France. The Minister for Trade (Mr Dawkins) recently approved a contract with an overseas trading company, apparently for the sale of uranium to France; at least that is what the media reports carried. We now find that this Government is spending $250m on buying back yellowcake from Queensland Mines. If the honourable member for Charlton wants $270m or $250m, he ought to stop the Minister for Trade and the Minister for Resources and Energy (Senator Gareth Evans) from doing this deal with Queensland Mines. He should allow that mine to proceed to perform on its contracts and help the parlous balance of payments situation. That is what the honourable member for Charlton should be doing. He should be using the weight of his faction to do just that.

It seems incredible that the Treasurer (Mr Keating) and the Prime Minister (Mr Hawke), struggling to maintain a facade of governance between the shambles produced by the public policy pronouncements on the taxation issue of the various factions within their own Party, would feel that they have the time to devote to further repetition of an argument which they have already lost and which will take up valuable time that would be far better spent on real tax reform, as enunciated by the Deputy Leader of my Party in this House this morning. They state and restate their arid and punitive argument on the floor of this House. One can only guess that their motivation must be to rehash their excuse that the only reason they do not have enough money this year is that the Opposition refuses to allow this legislation to pass through all stages. The taxpayer has heard all that before. He or she knows that there are very different reasons why the Government is in trouble with revenue today. The Government, in its much abridged first term, blamed the previous Government for all economic misfortunes and congratulated itself for all economic good fortune. Whenever it had to answer the hard questions it stated that it was either because of the deficit that it had supposedly inherited or because members of the Liberal Party of Australia, the National Party of Australia and the Australian Democrats were protecting tax dodgers. When the news was good-for example, wages were being held down or there was rural recovery-it was all due to the magical powers of the Labor Government and its world champion Treasurer. This Government now has a problem. I certainly agree fully with the plea this morning of the Deputy Leader of my Party for expenditure restraint. Local government, for instance, is in uproar over the threat to its share of the personal income tax arrangements.

The promises of this Government stand for absolutely nothing. The Self National Inquiry into Local Government Finance has barely got underway; yet, I understand, its findings are being pre-empted by decisions that are being taken at this time in the budgetary context. The State governments and the Northern Territory Government have been warned in no uncertain terms by the Minister for Finance (Senator Walsh) to expect the worst. Major projects, such as the Darwin Airport redevelopment, which has been in the pipeline for six years, have been deferred for reappraisal, causing major chaos to commercial activity and investment. Who will this Government blame? No one will believe that this is all due to a problem supposedly inherited from l982. No one will believe that it has all been due to tax dodgers.

The Prime Minister has talked of the greatest economic recovery in the history of Australia. The facts are that the problems that are about to be reflected in the coming Budget are of this Government's creation. There is no one else to blame now. The Government will just have to wear it. This Government has locked Australia into an inflationary spiral with its wage indexing. It has failed to deregulate the labour market at the same time as it moved to deregulate financial markets. It has failed to provide the necessary information on monetary targets. It has dithered on productivity claims. It has backed down and it has backed off. The Australian Council of Trade Unions is taboo. What is at issue here is this Government's attempt to impose a retrospective penal sanction on Australian companies, to take from them money that was not due at the time and to tax them a second time on the basis of an imputed distribution of profits.

This legislation is born out of a desire to punish, not to recoup tax moneys owing, which was already done under the legislation introduced by the Fraser Government. The effect of that move, should it happen, will be to weaken further, if that is possible, the much eroded confidence that the business community may have once had in this Government's ability to manage the economic affairs of this country. It will further weaken the ability of the business community to contribute to an economic recovery of this country.

This week we have heard continued calls from the Labor Party for greater taxation of the rich, the levelling mentality of socialism which seeks to provide for the disadvantaged by ever-increased taxation on the advantaged. It is this same levelling mentality which is the philosophy behind these Bills. But the Treasurer and the Government would do well to note the experience of the United States of America where a reduction in tax rates has led to increased productivity and increased receipts for inland revenue. Affluent Americans increased their share of the tax burden as the marginal tax rates were decreased. To be precise, following cuts in the marginal rates, those with incomes of less than $50,000 saw their share of the tax burden decrease while those above that figure increased their share, in some cases dramatically. Those earning between $50,000 and $l00,000 raised their percentage of overall tax contribution by l.5 per cent; those earning more than $l00,000 raised their share by 4.6 per cent; and those above the $lm mark more than doubled their contribution from l.7 per cent to 3.6 per cent. The reasons for this are quite understandable. Entrepreneurs in America have switched their entrepreneurial talent from tax avoidance to profit generation. Given the right encouragement, Australians will do the same. Add to that fact that reductions in tax rates stimulate growth in business and thus growth in the tax base and we have a formula for success.

This Government has attempted to woo business, but the business world is now seeing this Government's true colours. We are seeing a government in trouble. I suggest that the Government does not create still more trouble for itself by insisting on proceeding with this pointless exercise which only adds to the generalised and increasing disillusionment that the people of Australia now justifiably feel for the abilities of this Government to grapple with real tax reform in the remainder of its term of office.