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Wednesday, 18 September 1985
Page: 678


Senator MESSNER —My question is addressed to the Minister for Industry, Technology and Commerce. I refer him to his comment yesterday at Question Time that Press reports of the leaked reports of the Government's tax package had been marginally accurate. Has the Minister noted that two groups of financial consultants have concluded that an average com- pany's after tax profit will be cut by 18 per cent if the reported changes are implemented? Can the Minister say whether, in making its tax decisions, the Government gave consideration to the impact of all the proposed changes on business profits? Is he satisfied that the changes will not have the serious effects forecast by the consultants?


Senator BUTTON —I saw the calculations on the front page of this morning's Australian Financial Review. Of course, I am not in a position to comment about those at this time and certainly not until the Government's tax package is announced.


Senator Vanstone —Finalised.


Senator BUTTON —Announced, I said.


Senator Lewis —That is why you are so cross. It must have been finalised over lunch time.


Senator BUTTON —On the contrary, I am so cross because it did not do enough about the fringe benefits of front bench Opposition senators. That is why I am cross. Of course, the Government took into consideration as far as possible the effects on business of the tax package. Of course, in any changes to the taxation system, there will be winners and losers. There will be those who benefit from the change and those who accrue less benefits. For example, if there were a limitation on deductions for entertainment expenses, people who have been enjoying entertainment expenses and long lunches for a long time would be upset.

Opposition senators interjecting-


The PRESIDENT —Order! Senator Messner is entitled to an answer to his question.


Senator BUTTON —I was listening to the various interjections-or trying to-and, of course, they make a very valid point. There are so many concerns coming from different parts of the Opposition because, I suppose, all of them have enjoyed a variety of cosy benefits, which just makes the point that I am trying to illustrate. Of course some people will see themselves as disadvantaged in any tax change. But those who think about the taxation system in Australia, those who have been complaining about it for the last 10 or 15 years, particularly complaining as a result of the total failure of the previous Liberal Government to do anything significant in terms of tax changes--


Senator Messner —Now you are sounding like Senator Walsh.


Senator BUTTON —Senator Messner is getting very agitated now. The people who consider that during the last period of the Liberal Government the tax system was rorted and virtually destroyed will recognise that important changes have to be brought about. I cannot analyse the particular tax packages on page 1 of the Australian Financial Review in the context of the Government's taxation changes which have not yet been announced. The Opposition will have opportunities to ask questions in the future.


Senator MESSNER —I ask a supplementary question. The Minister has not addressed in any way the point I am seeking to make. What effect will the new fringe benefits tax have on employers' profits? Is the representation in the newspapers an accurate one irrespective of whether the Government's policy is being predicated on it?


Senator BUTTON —I will seek to make the point again, which Senator Messner clearly does not understand, that, of course, there will be widely differential effects on various companies and on various businesses as a result of the Government's tax package. One cannot have a taxation package which is neutral between businesses, some of which have been paying salaries and others of which have not. Nor can one have a taxation package which is neutral between people who have been paying their taxes and those who have not. Those who have not been paying their taxes will suffer-this is my judgment-under the Government's tax package. Those who have been paying their taxes will not. Those sorts of differentials will certainly be there.

To come back to a question that I answered from Senator Chaney earlier, if the Opposition wants to pick up the disaffected in terms of those who have not been paying their taxes, it will have a virile little constituency there.


Senator Chaney —What about ordinary businesses with employees driving their cars?


Senator BUTTON —I will answer the question in my own way, if Senator Chaney does not mind. The Opposition will have a virile little constituency there, as it has had for many years.