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Thursday, 4 June 1987
Page: 3995

Dr THEOPHANOUS —In the interests of enlightened economic debate in this country, can the Treasurer inform the House of the cost to Commonwealth revenue of reducing the personal marginal tax rates to 35 per cent and 25 per cent, with a threshold of $5,400, and a company tax rate of 35 per cent?

Mr Ian Cameron —What about your tax policy?

Dr THEOPHANOUS —I am trying to enlighten the honourable member.

Madam SPEAKER —The honourable member will not be led astray by interjections.

Dr THEOPHANOUS —Honourable members opposite have not asked any questions on the economy.

Madam SPEAKER —Order! The honourable member will get on with his question.

Dr THEOPHANOUS —How does this cost compare with the cost of implementing a flat 25 per cent personal and company rate?

Mr KEATING —A tax scale of the kind the honourable gentleman mentioned, with a threshold of $5,400, a 25 per cent rate between $5,400 and $25,000, and a top rate of 35 per cent matched with a 35 per cent company tax rate would cost $8 billion; made up of $5 1/2 billion on the personal tax side and $2 1/2 billion on the company side. The honourable gentleman asked me in the second part of his question about the contrast in cost of a 25 per cent flat tax, with a $5,400 threshold, and a 25 per cent company rate. The comparable figures are $12 billion-$8 billion for the personal scale at 25c flat, and $4 billion for a company rate at 25c in the dollar.

Those two propositions mirror the propositions being leaked by the Opposition as its tax policy. Tonight the Leader of the Opposition is to tell his back benchers what the tax policy is. I have no doubt that he will not be telling them where the money will come from to fund it. The fact is that with this `unified' Opposition opposite we have the Queensland Premier campaigning on a 25 per cent flat tax rate, as I described it, and a company rate, costing $12 billion. The leaked scale of the Leader of the Opposition will cost $8 billion. There is a $4 billion difference between the leaked Liberal Party proposals and the Joh proposals. Yet the Leader of the Opposition would have us believe that there is no difference between them on tax-only $4 billion.

Need I say that the Government has delivered $4 billion of paid tax cuts, which have not only reduced the tax rates but also have reduced the Budget deficit. A scale of the kind that has been leaked, costing $8 billion could only be funded, if the deficit were not to rise and were it to be funded from outlays, by the abolition of indexation to pensions, major cuts to social security, major cuts to education, and major cuts to health. If that were to occur, the upside costs to the public from such changes would far outweigh the tax cuts for anyone on the lower to middle end of the scale. The only recipients, as usual, as with every other thing the Liberals have ever done, would be the high income earners.

At a time when the nation's income has been cut by $9 billion because of declines in our terms of trade we have the coalition parties arguing that the living standards of Australians may rise by their after tax income rising as a result of tax cuts which they think they can deliver but which they know the nation cannot possibly afford. The accurate cost is $5 1/2 billion for the Liberal personal tax scale as we know it and $2 1/2 billion for a matching company rate, coming to $8 billion. For the `no difference in policy between us and them'-the Liberal Party and the National Party in Queensland-the figures are $12 billion for the Joh scale, made up of $8 billion on the personal scale and $4 billion for the company scale. So there is, of course, a $4 billion difference.

That is why the Queensland Premier has said that he is still campaigning on his agenda issues. He said today that he hopes to control the Senate through the National Party. So let us not have any pretence that there is any unity whatsoever on the other side of politics in relation to the Queensland Premier's position, the arguments that he will put at the election, his support for candidates of the National Party and for the National Party's policies. Again, we are seeing that it is impossible now for the Liberal and National parties to be putting any proposal in relation to tax which has a majority position.

We heard the honourable member for Maranoa who is not a National Party member of the State Parliament but who is a member of the National Parliamentary Party here in Canberra, saying two days ago on Australian Broadcasting Corporation radio that he still is in favour of the 25 per cent top rate tax. There is no unanimity of agreement within the parliamentary parties on the conservative side of this chamber.

We will wait to see what is hatched up on the other side of politics in terms of fiscal bribes, hands full of dollars, fists full of money, and all other manner of irresponsible tax commitments which can only destroy the fabric of this country's economy.