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Friday, 29 May 1987
Page: 3624

Mr CARLTON —It gives me great pleasure to ask a question of the Acting Prime Minister. Is it a fact that no Australian taxpayer earning less than $19,500 per annum or $375 a week will receive a tax cut on 1 July? Is it also a fact that the Australian Statistician's survey of the distribution and composition of employee earnings, released only last week, indicates that more than half of all employees earn less than $19,500? Is it therefore a fact that more than one-half of Australian wage and salary earners, that is, about three million people, will not get any tax cut on 1 July?

Mr KEATING —I do not know whether the honourable member for Mackellar cannot read a Government Bill or a tax scale so as to know that the previous tax rate of 46 per cent for those earning over $19,500 falls to 40 per cent, that the rate below that which was previously at 30 per cent falls to 29 per cent and that the rate below that, previously at 25 per cent, falls to 24 per cent. I also remind the honourable gentleman that this Government reduced the 30 per cent rate to 25 per cent for people on the low end of the income scale so that we gave taxpayers earning between $12,500 and $25,000 a $7.60 flat tax cut in the 1984-85 Budget. That was followed by the December tax cut, which reduced the 60 per cent rate to 55 per cent. The tax cut on 1 July will further reduce the 55 per cent rate to 49 per cent. These reductions are paid for. They will not be added to the deficit in the way in which the previous Government added tax cuts to the deficit. They are not an irresponsible grab for votes like the one being contemplated now by the Opposition. If one looks at the Opposition's tax scale, the one that has been floated--

Mr Carlton —I take a point of order, Madam Speaker. I raise the question of relevance. I asked about the tax cuts from 1 July--

Mr Keating —Madam Speaker, I take a point of order on the point of order.

Madam SPEAKER —I am just hearing the point of order.

Mr Tuckey —You don't take a point of order on a point of order.

Madam SPEAKER —The honourable member for O'Connor will be quiet.

Mr Carlton —I asked the Treasurer a question relating to the tax cuts due on 1 July this year. He seems to be replying in other areas.

Madam SPEAKER —The Treasurer is answering the question in his own way, to which he is entitled.

Mr KEATING —The Opposition's scale which was released this week, and which was endorsed by the questioner as moving in the direction that he would choose, as usual gives the tax cuts to the people at the high end of the scale and next to nothing to those down below. That is par for the course. In days past when the Opposition was the government of this country, there was a 60 per cent tax rate but a tax system like a lump of gruyere cheese, full of holes so that nobody, other than the people without adequate tax advice, paid that 60 per cent rate. That rate was allowed to persist for five years without any repairs to the tax system. We could not even get the previous Government to repair the criminal evasion schemes without two major public reports, the McCabe-Lafranchi report and the report of the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union. Not only would the previous Government not touch abuses of capital gains, fringe benefits, entertainment allowances, substantiation and the rest but also it would not even touch the criminal evasion schemes. It was looking after its crowd. Now Opposition members think that they should smash the social security system and rip education spending to pieces so that they can give the people of Vaucluse and Toorak a 35 per cent tax cut.

Mr Spender —I take a point of order, Madam Speaker. In my submission, what the Treasurer was going on about can have nothing to do with the question asked of him and therefore it is not relevant. He should be told to be relevant.

Madam SPEAKER —The honourable member will stop giving the ruling.

Mr Spender —I do understand that, Madam Speaker.

Madam SPEAKER —The Treasurer will bring his answer to a conclusion.

Mr KEATING —Madam Speaker, the Opposition cannot take the heat of the public debate.

Mr Porter —Well, you haven't answered the question.

Madam SPEAKER —Order, the honourable member for Barker!

Mr KEATING —Opposition members keep dropping out these tax scales, endorsing them on radio and saying that, yes, they will be run in the election. But when we blast them for their social inequity, the honourable member for North Sydney squeals to the Standing Orders. If he wants to stand up in a cowardly way and refer to the Standing Orders, he can do so.

Opposition members interjecting-

Madam SPEAKER —Order! The Chair asks the Treasurer to withdraw the adjective.

Mr KEATING —Yes, I will withdraw.

Mr Spender —I don't give a damn what he says about me, but he should follow the rules.

Madam SPEAKER —Order! The honourable member for North Sydney will resume his seat. The Chair cares what he says.

Mr Keating —On a point of order, Madam Speaker: I remind you that under standing order 303 frivolous points of order are also out of order and should be dealt with.