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Thursday, 19 September 1985
Page: 765

(Question No. 461)


Senator Reynolds asked the Minister representing the Minister for Defence, upon notice, on 21 August 1985:

(1) Can the Department of Defence detail the cost of training and maintaining military bands throughout Australia.

(2) Can the Department indicate on what basis these professional musicians are posted to serve in the different defence establishment areas.

(3) When will Townsville, a city hosting two major defence establishments, be accorded equality with other defence bases and be recognises as entitled to a fulltime professional military band.


Senator Gareth Evans —The Minister for Defence has provided the following answer to the honourable senator's question:

(1) To detail the cost of training and maintaining Service bands throughout Australia would be a significant task, requiring additional capacity, as the present resources management system does not separately identify all the actual resources utilised in specific functions. However, the annual cost for the actual salaries paid to personnel on the posted strength of full time Service bands is estimated to be $11.08m.

(2) Musicians are posted to serve in different establishment areas in accordance with Service requirements. In certain instances postings may occur in response to individual needs arising from compassionate grounds, personal preference or location for discharge. These requests are considered on their merit, and in conjunction with Service requirements.

(3) At Townsville, there are two battalion bands and one, the 1st Battalion Royal Australian Regiment Band, has recently been supplemented to provide an enhanced capability. There are no plans for an increase in the number of Service bands, nor for the relocation of any band. The location of a band in a specific area is not dependent upon the number of Defence Force personnel in that area. The bands are located where they are best able to meet their primary role.

A couple of things arise from that. I would be keen to see the Trade Practices Act when it is brought forward into revised from increase penalties and toughen up these kinds of breaches because they are, literally, rip-offs. There is no doubt about it and I am sure members of this House have heard of them occurring in their own electorates. These schemes are ripping off people in the Australian community who quite innocently are being caught by these purported journals. Interestingly, when we checked with the circulation ofAustralian Engineering Review we found that it circulates to about 35 people. All they do is send it to advertising agencies. It is not a journal-unlike the Bulletin, or whatever-that circulates widely through the community. It is just a rip-off.

The other point I would like to make too, Mr Deputy Speaker, is that I believe that we, as a community, must now start to look seriously at prohibiting telephone selling. It would be impossible to stop people picking up telephones and seeking to sell things but I believe it would be quite possible, within the context of the Companies Act in particular and the Trade Practices Act as well, to suggest thatany purported contract entered into in such way would in fact be null and void; that if a contract is not entered into in the presence of the parties to that contract that contract would have no validity.

That is the sort of situation we aregoing to have to fact because clearly an increasing numberof these crooks areseeking totake advantage of good people who are going about theirnormal business. In this case we have got the clear evidence and in this case fortunately Mr Gifford and Mrs Gifford have no particular debt. But I can imagine many people who perhaps might be less aware, who are very busy and who might just get caught out.It is a matter that we are going to have to take up; it is serious matter and I would hope that we, as a community, can begin to address it urgently.

The Government has decided tht from 1 July 1986 the tax-free threshold will apply only on a prorata basis in the case of those taxpayers joining the Australian work force on a full time basis for the first time and to those leaving Australia permanently. The full threshold will continue to apply to other taxpayers. This measure is expected to yield around $90m per annum from 1986-88.

PRESCRIBED PAYMENTS SYSTEM

Contrary to the alarmist claims made at the time of its introduction in 1983, the prescribed payments system has proved extremely successful in combatingtax evasion by contractors and sub-contractors in the building, transport, motor vehicle repair and cleaning and other industries. On the scheme's introduction, the 10 per cent deduction rate that currently applies to payments by the relevant industries was set on a conservative basis in order to facilitate its implementation. Having reviewed the arrangements, the Government has decided to increase the deduction rate from 10 per cent to 15 per cent from 1 July 1986. As at present, those with a responsible tax record may apply to have this rate lowered where appropriate.

Also from 1 July 1986, owner-builders are to comply with full prescribed payments system requirements by making deductions from payments in connection with construction projects in excess of $10,000 that begin after that date. The Government proposes to review further the operation of the prescribed payments system, including the desirability of extension to other industries. The net revenue gain from these changes is estimated at $105m in 1986-87 and $45m in subsequent years.

QUARTERLEY PROVISIONAL TAX

The existing system for the collection of provisional tax places stress on the money markets due to the substantial seasonal withdrawal of liquidity from the financial system in each June quarter. To overcome this problem the Government has decided to introduce an instalment system for the payment of provisional tax by individuals, to commence in 1987-88. When fully implemented four instalments will be payable.

I emphasise that taxpayers will not be called upon to pay, in any financial year, a greater amount of tax than under the current system. Self-assessment procedures will continue to ensure that taxpayers will not be required to pay an amount which exceeds their estimated net tax payable for the year. The new system will not apply to taxpayers whose provisional tax liability does not exceed $2,000. Such taxpayers will continue to pay provisional tax on an annual basis, This will exclude about three quarters of a million provisional taxypers, about half of the total.

An alternative pattern of instalment payments with later due dates will be available to taxpayers, such as some primary producers, whose income flow is concentrated in thesecond half of the financial year. The reduction insales of government securities that will result from this measure is estimated to generate interest savings of the order of $55m annually from 1987-88.

QUARANTINING OF FARM LOSSES

One of the most heavily used tax shelters set out in the draft White Paper is the write-off of farm losses against income from another source. The manner in which the tax system is currently structured allows other than genuine farmers to generate significant tax gains by directing investment to what otherwise would often be considered unprofitable ventures. The proposed measure is along the lines of that canvassed in the draft White Paper, but with significantly more generous treatment ofnon-farm income.

The new rules will commence in the 1986-87 income year. There will be two approaches. The first will allow farm losses to be fully written off against non-farm incomes between $15,000 and $30,000. These thresholds will be subject to indexation.