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Wednesday, 4 December 1985
Page: 2932


Senator BOSWELL(5.20) —It is always interesting to listen to someone from the Australian Labor Party telling the business world how to run businesses when not one person on that side of the Parliament has ever been in business in his or her life. Yet honourable senators opposite are trying to tell everyone how to run his own business. That is how ridiculous this tax package is. I wish to address my remarks on the Taxation Amendment Bill (No. 4) to the outlawing of legitimate entertainment expenses and the effect that this will have on the restaurant industry, the limiting of tax deductions on water conservation and the imposition of a fringe benefits tax on company cars.

Only a couple of weeks ago we saw employers in the restaurant industry arrive in Canberra-they should have stayed at home for all the good it did-to plead with this Government and the Australian Democrats for their jobs. They got absolutely nowhere. The rally was organised by the chefs, the waiters, the staff and all those employees in the restaurant industry who know, like everyone else involved in the industry, that many of their jobs will be lost and many small businesses will go broke-with the stigma that that entails for people going bankrupt-not because of any decision of theirs but because the Government changed direction. Many suppliers will be affected. I suspect that one of the biggest suppliers that will be affected is the South Australian wine industry. I know that all South Australian senators on the Liberal side of the House are absolutely frantic with worry about it, unlike Labor Party senators who could not care less what happened to the South Australian wine industry. By removing tax deductions on legitimate entertainment expenses the Government has been under the false impression-I emphasise the words `false impression'-that it will save $310m of taxable income. But what it will really save is only about $79m.


Senator Maguire —Prove it.


Senator BOSWELL —It is easy to prove because business men and women will not be able to afford to entertain or to talk business in restaurants as they have been used to doing. This has already happened. The results of a recent survey by American Express that came out only the other day have shown that trade in the restaurant industry is down by 31 per cent.


Senator Siddons —Why would they be more right than the Treasurer?


Senator BOSWELL —Senator Siddons knows all about small business. His father gave him a big business and he has been working towards making it small all his life. Senator Siddons has had his go.


Senator Siddons —Mr Acting Deputy President, I take a point of order. I claim to have been completely misrepresented by Senator Boswell. He made statements which are absolutely incorrect and I believe that they should be withdrawn.


The ACTING DEPUTY PRESIDENT (Senator Jessop) —Order! I do not think there is any point of order.


Senator BOSWELL —I completely withdraw it if I have offended somebody. The Government has not thought this tax package through. This proves that it has not established exactly where it is going. The loss of jobs in the restaurant industry will total about 11,000. I maintain that 7,000 restaurants accept the use of credit cards; American Express, Diners Club and those types of cards. If every one of those restaurants put off at least two people I estimate that the job losses in the industry will be around 14,000. There are many examples of restaurants in Queensland that have already had to put off four or five people at the moment. I know that the Minister for Finance (Senator Walsh) gets served a Dorothy Dixer every day to allow him to tell people that there are vacancies in the restaurant industry, that people in the industry are whingers, that businesses will not go broke and there is no loss of jobs.


Senator Maguire —There are 9,000 job vacancies.


Senator BOSWELL —I will come to that, Senator. If Senator Walsh took the time to understand this he would realise that the restaurant industry has been trying to hold itself together until this piece of legislation goes through the Senate, hoping against hope that the Democrats or the Labor Party will have a deathbed repentance which will ensure that this industry will stay alive.

Let me tell honourable senators about another thing that is happening in the restaurant industry. Over 1,000 people have been employed in Jupiter's Casino in Queensland, 1,000 people are employed in the Inter-continental Hotel in Sydney. These and a couple of other very big organisations have been opened and have taken up the slack. But because the restaurant and hospitality industry is big, because it is booming and because it is one of the growing industries in Australia this Labor Party taxes it. This Government finds an industry that is strong, that is able to build buildings and employ people and it taxes it out of existence. That is socialism at its very worst-the politics of envy. When an industry is healthy, providing new jobs, new building and encouraging initiatives, this Government taxes it out of existence. It does not give the person who works hard any reward at all. That is the policy of this Labor Government. This Government is all about killing incentive and killing jobs.

It has been said a number of times that, after the Christmas boom-I believe it will be around February or March-there will be a massive fall in the industry. Jobs in the industry will be lost. It is worth noting that the hospitality industry is the largest employer of youth in Australia. It also provides many jobs for youths who are working their way through degrees and are trying to get a bit of money so that they can pay their own way. Only today the Minister for Education (Senator Ryan) was asked how a person could go through university when her parents could not afford to pay her board. Senator Ryan replied: `She will have to go and get a bit of part time work'. That is what many students do. They get a bit of part time work to pay their way through university. I am afraid that the lady from Tasmania will not be getting any part time work in the restaurant industry as none will be available. The restaurant industry provides jobs for mothers who are helping their children through universities and other tertiary institutions. It provides jobs for youths who would otherwise find it very difficult to get jobs.

The Hawke Government's attack on this job-providing sector makes a mockery of the Government's commitment to its Priority One youth training scheme. At a time when Australia has one in four of its youth unemployed-which is a national disgrace-this Government attacks the very industry that employs them. That is how clever this Government is! This Bill is an attack not only on the restaurant industry and the youth of Australia but also on small businesses. Many small businesses depend on the personal contact between buyers and sellers to promote their product. Small businesses cannot afford massive advertising campaigns or a battalion of salesmen to promote their product. They cannot afford, like the big businesses and big national companies, staff dining rooms with special sections to entertain clients.

Small businesses depend largely on personal contacts to target a market. I can speak from personal experience on this as I had a small business. I started out alone. I even used to sell to Senator Georges and his union co-operatives, and Senator Georges always paid his bills. My business grew not only because I had a very good product but also because I could write my legitimate entertainment expenses off my taxable income. Some people whom I took out were hard going-it was hard work-but it was a pleasure to enjoy the company of others. It was always hard work to gain their confidence and to get them to accept my product. My business grew from one to 10 people. My turnover grew from virtually nothing to $3m a year. Now this avenue which enabled people to obtain business has been shut off. All the personal advantages of being able to take clients out to dinner and gain their confidence have been lost. This Government is for big business, big unions and big government. This Government has sold out the hospitality industry and the small business sector. It never misses the opportunity to sink the boot into primary industry. This legislation is absolutely no exception.


Senator Chipp —What did you do for the farmers?


Senator BOSWELL —I welcome Senator Chipp's interjection. I accept it. What we did not do was vote for a capital gains tax, quarantining of farm losses, a reduction in water conservation measures, a fringe benefits tax and the abolition of negative gearing. That is exactly what the Australian Democrats will vote for. Yes, they have won one or two concessions. If they vote with this side of the chamber, as they do on rare occasions, the farmers will not be subjected to a capital gains tax and there will be no quarantining of farm losses, no reduction in water conservation measures, no fringe benefits tax and no abolition of negative gearing. It is all right for Senator Chipp to come in here like a white knight on a charger and tell everyone that he has saved them. If the Democrats vote against the taxes they will not go through. That is a fact of life.

The rural sector has borne the brunt of Labor's Budget cuts. This package merely continues that attack. An attack has been going on ever since the Australian Labor Party was elected. This tax package has got the capital gains tax, the fringe benefits tax and the quarantining of farm losses. Once again, primary industry is right in the firing line. It copped it in the May expenditure cuts. In fact, primary industry bore something like $250m of the May Budget cuts and it is being attacked again. The worst thing that the rural industry inherited in this tax package was the capital gains tax. It is a tax that the rural industry has been frightened of for as long as rural industry has been in Australia. Rural people work hard on their farms. They do not enjoy a big income. When they sell their property they have time to move out and enjoy their retirement. I will quote the Prime Minister (Mr Hawke) on this every time I have an opportunity to do so:

And here let me make one point so that even our opponents can understand it; and let me make it beyond all their powers of misrepresentation and distortion.

There will be no new capital gains tax.

That is the biggest broken promise that any leader of any government has put before the people. It is a major boot in the ribs of rural Australia and it has come from this Government. The Bill has in it a provision that not only seriously damages the nation's farmers but also seriously damages the nation's environment. The Government has decided that capital expenditure incurred in conserving or conveying water for the business of primary production will be changed from a 100 per cent write-off in the year the money was spent to a 33 per cent deduction in the year of expenditure and a 33 per cent deduction in each year for the next two years. The revenue saved as a result of this action will be a mere $20m. The Government says that it is doing this to reduce the incentive of tax shelters. That is a very short-sighted approach.

This approach on water conservation expenditure is another assault not only on primary industry, which once again cops it in the neck from this Government, but also on Australia's total conservation program. How can those Labor senators who make noises about being concerned about the environment support this move? It makes a complete mockery of the Government's much touted national conservation strategy with its taxpayer-funded consultative committee. How can this program be effective when the Government removes one of the cornerstones of this strategy to protect our national resources? It makes a farce out of it. The Government has spent thousands of dollars telling people that it is concerned about the environment. Yet it has removed the financial incentives to the group which can do something concrete to help the environment.

Water conservation is still vitally important to Australia. In an arid Australia water is life, just as export earnings are life for the Australian economy. Plainly, if a crop is lost because of rainfall failure, export income is lost. Australia is hot, dry and drought-prone, with periods of unpredictable rainfall. Even Labor senators are aware of the ravages of drought and the effects it has on the overall economy. The decrease from a 100 per cent tax write-off to a 33 per cent, or three-year tax write-off, is an example, if ever an example were needed, that this Government does not understand primary industry and it does not even want to understand primary industry. The logical time to put in dams is when soil conservation takes place and when contours are put in. The dams must be put in at the time the tractors are on the farm doing the contour banks. The dams must follow the lines of the contour banks. That is another reason, apart from the obvious reasons, why soil and water conservation go hand in hand. We cannot have one without the other. The need for conservation is urgent and relevant.

The coalition, which introduced full tax deductibility for both water and soil conservation measures, will immediately reinstate full deduction in the same year for all water conservation measures. We will not squib at the $20m or so that this will cost. There are a number of commissions which we can get rid of straight away. The Human Rights Commission would be the first on my hit list.


Senator Missen —That is not our policy.


Senator BOSWELL —It might not be Senator Missen's, but it is certainly mine. Rural Australia was told at the rural rally that the Government would give it a tax package which would allow the rural industry to expand. What did the Government bring down? It brought down a package which saved rural Australia $45m. Let us look at where that $45m came from. This was after the Government hit rural Australia to leg for $275m in the May mini-Budget. Let us look at what happened. There was a 15 per cent cut in the impost on grain harvesters which it had put on, and the failure to give a full excise rebate for diesel used on farms. The Government took back that rebate. The Government gave with one hand and took back with the other. Half way through it imposed $275m on rural Australia. This reform of the tax system makes it very difficult for the farmers of Australia to take individual advantage of putting water conservation measures in place.

The imposing of an additional tax burden on an employer for providing cars to an employee is nothing short of a disgrace. The employer has to pay the tax on profit that provides the money to purchase a company car. He has to pay an additional tax to provide a car, which is an essential piece of equipment in order to run his business. It is absolutely ludicrous that there is this double tax. If this Government understood business it would realise that representatives who use company cars do not go into the office every day at 9 a.m. and go home at 5 p.m. Very few representatives in Australia go to the office, except perhaps on a Friday afternoon. Most sales managers keep them out. There is an old adage in business: `Salesman who covers chair does not cover territory'. Business people use their cars to get from home to the job. Many representatives leave early in the morning or on a Sunday afternoon to get into country territories, where they work the towns all day and then drive to the next town that night. There is no 40-hour week, flexitime or recreational leave for people who drive company cars. Company cars are given because they are essential. Yet this Government again taxes the private sector. Is the Government going to tax the public servants in Canberra who drive to and from work in government cars? I do not believe that it will. So why should it tax the private sector, which needs company cars to perform its duties? It has been estimated that 100,000 units a year will be lost, probably in South Australia where the car industry is biggest. The big loser will probably be the Ford Motor Co. of Australia Ltd and General Motors-Holden's Ltd, which share the biggest sales in Australia. Business cars will be rationed or shared, car purchases will be reduced and the already overburdened businessman will have to pay additional taxes on the cars that he gives his officers to do their job. The whole tax package has never been thought through. It will lose thousands of jobs, which will not worry this Government particularly; it will put the dismissed workers on a community employment program, a training program or some artificial job creation program to get its unemployment figures down.

The action of the Democrats regarding this tax package has been a disgrace. They have proved that they have let down small business people. They could have helped the restaurant industry but they turned their backs on it. They could have helped the car industry in South Australia and they could have helped the rural industry. Thanks to the Democrats we will have a capital gains tax, a decrease in water conservation expenditure and the quarantining of farm losses. They have endorsed all of these moves and they will be held accountable for them by people in the bush. The ALP Government, through this tax package, has continued its assault on the productive sectors of the community-the business and rural sectors that produce the wealth of this nation. The tax package which is coming before this Parliament in dribs and drabs is an infringement of small business and the way in which small business operates.

Firstly, the loss of entertainment expenses will adversely effect the level of effective communication between client and customer. Secondly, the loss of the right to give an employee a car so that he can perform his duties without paying additional tax on that car is a gross infringement of business efficiency. It has always been accepted in this country, and rightly so, that any expenses that occur in running a legitimate business are tax deductible.

What will the Government attack next? Will it attack advertising or travelling? Will it put 10,000 advertisers out of business by not allowing advertising to be tax deductible? What about a business telephone at home? Will we have to register all our business calls, because this is the line the Government is going down? What will we do? Where will we stay when we go on an interstate business trip? The Government's senior partner-the Australian Council of Trade Unions-has an abysmal record of running business so it is no surprise that this Government has no idea about business. We have to look only at the ACTU's record on Bourkes store, ACTU-Solo Enterprises Pty Ltd and the ACTU travel agency, all of which have gone to the wall. Yet this Government, with the help of the ACTU, is trying to tell people how to run their businesses.

The irony of the whole tax package is the hypocrisy of this Government. While it is bleeding the business sector white with unfair taxes it is giving its ACTU friends tax shelters. What is a $12 a week untaxed superannuation payment by an employer to the employee other than a tax shelter? That demonstrates the hypocrisy of the Government. On the one hand it is taking away legitimate business expenses as a tax deduction and on the other it is forming tax shelters for the ACTU. The whole package is two faced. It makes a complete mockery of the statement of the Treasurer (Mr Keating). He said:

We invited debate, we have invited the people of Australia to express their view and we have listened clearly to what they have said.

What the Treasurer did not say is: `And then we did exactly what our boss, the ACTU, told us to do'. The tax package clearly tells me that this Government has disallowed legitimate business expenses as a tax deduction; it has disallowed important conservation incentives as a tax deduction and it has crucified the fastest growing industry in Australia while at the same time setting up tax shelters and slush funds for its ACTU friends. It is nothing more than a farce, a sham and proves once again that the ACTU is the true government of this nation.