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Wednesday, 16 October 1985
Page: 1307

Senator WALSH (Minister for Finance)(11.54) —I acknowledge that the Opposition will not be supporting the amendment. I think there is a very good reason for that. I do not mean good in the moral sense, I mean good in the practical sense; that is, that the Opposition believes that one day it will have the responsibility of governing the country again and the responsibility of putting together a coherent Budget. Of course, the splinter groups which have moved in support of the amendment know that they can pander to every pressure group and play Santa Claus with public money without ever having to accept the financial responsibility for their actions.

It is a matter of judgment what the appropriate level of the threshold ought to be. I acknowledge that. Government revenue will increase by about $80m because of the abolition of the general rebate. The partial replacement of the general rebate with a medical expenses rebate with a $1,000 threshold will reduce that $80m by about $20m. The acceptance of Senator Siddons's amendment would further reduce the revenue gains by up to $40m. So, if the amendment were accepted, as much as $60m of the original $80m revenue increase could be dissipated, and that is a significant amount which the Government cannot ignore.

I said that it is a matter of judgment-and I will even concede, I suppose, a quasi arbitrary judgment-what the appropriate level of the threshold should be. However, it was never intended that either the previous rebate or the partial replacement of the general rebate which the Government has proposed would cover all medical expenses. It was proposed only that some provision should be made for exceptional and unexpected medical expenses which would occur only occasionally. The general policy of the Government, of course, is that the medical needs of the community will be covered by Medicare but that some allowance and concession would be made for exceptional, unexpected and, I suppose, sporadic very heavy medical expenses that some people might incur.

This proposition, of course, is part of the Government's taxation package. If the revenue raising measures which constitute that taxation package are to be fretted away, as this amendment would to a significant degree fret away the revenue raising measure, it would not be possible for the Government to deliver the tax cuts in 1986 and 1987 which have been promised. Therefore, the amendment amounts to a proposal to reduce the tax cuts and the Government, for those reasons, will not accept it.