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Thursday, 26 March 1987
Page: 1594

Mr PUNCH —My question is to the Treasurer. Can he advise the House of what measures the Government has taken to relieve the tax burden of small business? Is he aware of any evidence that the community, and in particular the residents of my electorate of Barton, have been misled about these measures?

Mr KEATING —The Government has, in the course of its tax reform measures, introduced what is by far the most revolutionary changes to the business tax system since its inception, and that is the introduction of a system of full imputation to relieve dividends of double taxation. In the course of doing that, Division 7 tax on undistributed profits will be abolished. The two major appeals by small business organisations over the past 20 years were to abolish Division 7 tax and to relieve the double tax on dividends. The Government is doing both in the course of its tax reform process. The honourable member for Barton asked about misinformation on these things and whether I was aware of misinformation within his electorate. The answer is that I am aware of misinformation put about by the official Liberal Party of New South Wales in a pamphlet headed `Taxation'. It contains a picture of the Leader of the Opposition and was authorised and printed by Graeme Starr, 234 George Street, Sydney. Mr Starr is the Secretary of the New South Wales Division of the Liberal Party. The pamphlet states:

The Liberal Party will introduce-

optional income splitting for families with dependent children to reduce their tax burden

tax rebates for child care expenses where spouses choose to work

gradual and predictable change towards a reliance on indirect tax rather than personal income tax

full tax exemption of pay earned by the Defence Force Reservists

tax relief for small companies

transferability of losses within 100%-owned company groups

repeal assets test on pensions and lump-sum superannuation tax

Improve current system for taxing dividends.

The first thing to say about this fraudulent and dishonest document is that four of the last five items have already been accomplished by the Government. Full tax exemption of pay earned by Defence Force reservists has been completed by the Government. Tax relief for small companies will come by way of imputation and the abolition of Division 7 tax. Transferability of losses within 100 per cent owned company groups was introduced in the Budget 2 1/2 years ago. The improvement of the current system of taxing dividends will be accomplished by the abolition of the double taxation of dividends with imputation on 1 July. In this dishonest document there are measures which have already been put on to the statute book, or wiped off the statute book and changed. However, a further measure of the dishonesty of all this can be seen in the first promise, which states, without any qualification:

optional income splitting for families with dependent children to reduce their tax burden . . .

It does not say `maybe' or `partial'; it says `optional income splitting'. We know that the cost of that is $2,850m in a budgetary year. The second promise was:

tax rebates for child care expenses where spouses choose to work . . .

That would cost $115m. So from our friendly neighbourhood macho generalist sitting opposite, we have the macho generalist of yesterday who said that what was wrong with Australian politics was the duplicity of politicians talking, in macho general terms, about expenditure cuts and promises and not being specific about them. There is a specific commitment of full optional income splitting for families in a marginal seat in this country. It is one of the seats which traditionally decides where elections go. Yet, a document bearing a picture of the Leader of the Opposition and the Liberal Party logo, on the full authorisation of its State Secretary, virtually gives a specific election commitment which, when questioned upon, the Leader of the Opposition chooses to run away from at every opportunity while his staff push out stuff on the Australian Association Press screen and everywhere else to state that the Liberal Party will cut expenditures. Then it leaks documents saying where the expenditure cuts will be-such as the non-indexation of pensions-and then, when asked, it states: `No, that is not on the agenda'. However, Liberal Party candidates run around and shove such pamphlets in letter boxes. Anybody with a bent to being gullible would believe, from honest John, that optional income splitting for families was a full, solid promise of the Opposition which would cost $3 billion.

The Prime Minister and I have indicated on a number of occasions that the cost of the Opposition's commitments to date is $16 billion. We have given the Opposition the annotated references of each reference it has made. We invite it, again, to write to the Prime Minister and to me--

Mr Howard —All dishonest talk. You are a liar. You are telling lies again.

Mr KEATING —The Leader of the Opposition says that we are telling lies. I ask him to answer the references that we have given him in writing. You answer them, Honest John.

Madam SPEAKER —Order! If the Leader of the Opposition made such a comment, I ask him to withdraw it.

Mr Howard —Madam Speaker, in--

Madam SPEAKER —I am just asking for a withdrawal.

Mr Howard —I withdraw that remark, but I do not withdraw--

Madam SPEAKER —I ask the honourable member to resume his seat.

Mr Howard —I will not resume my seat.

Madam SPEAKER —I am not asking for any withdrawal from the honourable member. I ask him to resume his seat.

Mr Howard —I withdraw out of deference to you.

Madam SPEAKER —No. I do not want you to withdraw out of deference to me. I ask you just to withdraw.

Mr Howard —Madam Speaker, by way of indulgence--

Madam SPEAKER —Under the Standing Orders, an honourable member does not withdraw out of deference to the Speaker. When the Speaker requests a withdrawal, the honourable member heeds the Chair and withdraws.

Mr Howard —Madam Speaker, can I--

Madam SPEAKER —No. The honourable member will just withdraw.

Mr Howard —I withdraw the remark. Could I seek your indulgence at the conclusion of Question Time--

Madam SPEAKER —The Treasurer is in the middle of answering a question.

Mr Howard —to say something?

Madam SPEAKER —We will finish with this first. I have other things on the platter. I call the Treasurer.

Opposition members interjecting-

Madam SPEAKER —I inform honourable members that what I have on the platter is a personal explanation by the honourable member for Mackellar and a personal explanation by the honourable member for Mitchell. After that I will be quite happy to hear the Leader of the Opposition. The two requests were made before the request of the Leader of the Opposition.

Mr Tim Fischer —Madam Speaker, on a point of order: Standing order 80 states:

No Member may refer to any other Member by name, but only by the name of the electoral division he represents.

On four occasions the Treasurer has referred to the Leader of the Opposition as Honest John.

Madam SPEAKER —Order! I ask the Treasurer to refer to the Leader of the Opposition as the Leader of the Opposition.

Mr KEATING —There has to be some basis of honesty and integrity on the part of the Opposition. There has to be some restoration of the basis of honesty and integrity to Australian politics for a major party. I remind honourable members that in 1983 the Labor Party campaigned on a specific addition to the Budget deficit costed and detailed at $1.5 billion above what was then assumed to be the Budget deficit. We now have specific references for $16 billion which we have passed over to those opposite in writing day after day. They backslide on those commitments while their flunkeys hand out these deceitful, fraudulent documents to the letter boxes of this country when they know full well that they will not stand accountable in this Parliament for that kind of fiscal policy. The Leader of the Opposition also knows that if such a fiscal policy were to be put down the financial markets of this world would crush Australia into a recession.

Motion (by Mr Sinclair) put.

That the honourable member be not further heard.