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Wednesday, 21 August 1985
Page: 78

Senator DURACK —My question is directed to the Minister representing the Treasurer. Is it a fact that about 750,000 Australian taxpayers will move into higher income tax brackets by the end of the financial year, nearly half a million of whom will move from the 30c in the dollar to the 46c in the dollar marginal rate? How much will this higher taxation by stealth contribute to the 13.3 per cent increase anticipated in pay-as-you-earn tax receipts? What relief can these people expect from a government which has abandoned tax reform and whose only remaining intention is to impose new and higher taxes in selected areas?

Senator WALSH —I am not able to say whether the figures cited by Senator Durack are precisely correct. They sound to me, however, as if they would be approximately correct. Because of the movement into higher tax brackets there will be some increase in government revenue. I am not sure just how much of the increase is attributable to that movement. It also should be noted, however, that the full year effects of last year's tax cuts have yet to come through and that the full year effects of those cuts are some $700m or $800m greater than the part year effects in the previous financial year. When Senator Durack is doing his calculations, or his speculations, about the sources of revenue increase, he ought to take into account the fact that there are full year effects of tax reductions as well as fiscal drag through people moving into higher tax brackets-what his former Prime Minister used to call the secret tax of inflation and promised he would abolish for all time and then abolished for one year, after which he backed down on his promise, as he backed down on almost everything else.

The major reason for the increase in government revenue is the extremely high growth rate which is anticipated, for the third year in succession, in this Budget. This financial year real non-farm product growth is expected to be 5 per cent. This is the third consecutive year of very high growth. I know that that is something that might be very hard for Senator Durack and other members of the Liberal Party to understand, because they could not achieve two consecutive years, let alone three consecutive years, of high growth in the period that they were in government. This Government has achieved a high growth rate for every year it has been in government. The most painless way to increase government revenue and to provide greater services to the public is to sustain high rates of growth. That is what this Government has done and that is what it intends to continue doing. I suggest that if the Liberal Party ever manages to return to office it ought to pursue the same goal. I wish it luck, if it ever gets back into office, in pursuing that goal but note for the record that it has a dismal record of failure in all the years that it was in government.

Senator DURACK —I ask a supplementary question. We have heard interesting rhetoric from the Minister for Finance and again from the Treasurer. I ask the Minister, in view of the fact that he has not been able to answer my specific question regarding calculations of the increased taxation which will be paid by 750,000 Australians, whether he will obtain those figures, have those calculations made, and let us know as soon as possible?

Senator WALSH —I will pass that on to the Treasurer.