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Tuesday, 15 October 1985
Page: 1209

Senator MAGUIRE —I refer the Minister representing the Treasurer to the Government's taxation package and its potential benefits for lower income Australians. How will the lowest marginal personal income tax rate as of 1 September next year compare with the lowest marginal tax rate in the final year of the Fraser-Howard Government? How many additional Australian taxpayers will be freed from a tax liability in the 1986-87 financial year as a result of the rise in the tax free threshold from $4,595 to $5,100?

Senator WALSH —When the last Liberal Government came to office the lowest marginal tax rate was 20 per cent, or 20c in the dollar. It was then increased by the Liberal Party to 32c in the dollar in the 1977 Budget and was subsequently reduced to 30c. The lowest marginal rate on 1 September 1986 will be 24c in the dollar, although I should lodge the caveat that that of course assumes that the tax reform package which the Government has presented will not be sabotaged by the Liberal Party in the Senate. If the package is sabotaged in the Senate it will certainly not be possible to proceed with the proposed reductions in marginal income tax rates and the tax cuts which would go with them. So the provisional answer is that the lowest marginal rate will be 24c in the dollar but that is conditional upon the Government's tax reform package not being sabotaged by that coalition of narrow vested interests which is represented by the Liberal Party.

As to the number of taxpayers who will be freed from any tax liability in the next financial year as a result of the increase in that threshold of some $500, from $4,595 to $5,100, I am advised that approximately an additional 130,000 taxpayers will be freed of any income tax obligation because of that change.