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Wednesday, 4 December 1985
Page: 2950


Senator BROWNHILL(8.38) —First, I wish to congratulate Senator Messner on the way in which he has led the debate on the Taxation Laws Amendment Bill (No. 4) 1985 on behalf of the Opposition.


Senator Ryan —Crawler!


Senator Grimes —Oh, stop it!


Senator BROWNHILL —Well you can carry on like a mob of chooks on the other side of the House. This was a hastily prepared response to--


Senator Walters —It is a hasty Bill.


Senator BROWNHILL —Yes, it is very hasty Bill. It was prepared at the National Taxation Summit in acquiescence to the Australian Council of Trade Unions. It was an absolute sellout to the ACTU. As Senator Short said earlier tonight, this package has nothing to do with options A, B, C, D or E; it is option ACTU. What will this taxation reform package give us? In 1987 and 1988 it will give us $1.4 billion in extra tax revenue gained by this Australian Labor Party Government from the Australian people. How is this a tax reform package?

Earlier in the debate today Senator Siddons said that he had done a great thing on behalf of the Australian taxpayer. What did Senator Siddons say? In his recent Press release he said:

We have made real gains for small business and farmers, while retaining the significant income tax cuts the Government has promised. We can now call the package a genuine tax reform. We won the following concessions from the Government . . .

But are these really concessions? A person on an income of $10,000 will receive 1.7 per cent more in take home pay. The person who earns $19,500 will receive 1.4 per cent more in take home pay. The person who earns $27,500 will receive 2.7 per cent more in take home pay. Is that really tax reform? Is that really something that will help the pay as you earn taxpayer? How many more changes will there be? Earlier in the debate tonight Senator Siddons said that he and the Australian Democrats would consult with the Government in the new year over further changes. How nice that will be! The Democrat senators are holding this country to ransom. I think even the Minister for Community Services (Senator Grimes) on the other side of the Senate would agree with that. Some of the items that this legislation covers are entertainment expenses and the substantiation of other costs, for example, the motor car. How in the world will this be achieved? People will have to hit the bundy every time they get into a motor car to see how many kilometres they travel and how many hours they travel, most probably, so that they can claim a percentage of the value of the car. How will this requirement be policed? Does this mean that more public servants will have to administer it? I believe that it does.

The legislation also covers public unit trusts, the carer's pension and many other items. The item to which I will address my remarks is water conservation and soil conservation expenditure.


Senator Grimes —I thought you were going to talk about the free lunch.


Senator BROWNHILL —That is all right, Senator. This Government does not care a damn for the people who live in the country. The Minister should go into the country to see how the people out there receive him. Has he ever got a bit of dirt under his fingernails? I would say that he most probably has a bit of dirt under his fingernails but I do not think it would be the soil of this land.

This Government has decided to replace the immediate write-offs for water conservation. It had decided, until it did a deal with the Democrats, that this would take place over five years. Australia is one of the driest continents in the world. It is crying out for water conservation. This Government, of which Senator Aulich is a part-he has come into the chamber tonight for the first time in quite a while and has started to interject-will save some $25m in 1986-87 and $20m in 1987-88 as a result of that measure. What a price the people of Australia and primary industry will have to pay for that.

This Government has taken some $480m from the farmers since 1983. Let me just remind honourable senators of a few of the things that the Labor Party Government, led by the Prime Minister (Mr Hawke), has taken away. It has removed the taxation benefit of the income equalisation deposit scheme. It has removed the important aspects of the former tax averaging system. It has removed the important investment concessions that all the people in the rural community had. It has virtually removed the petroleum freight equalisation scheme. It has introduced indexation of fuel excises. That is only a little of what it has taken away. It will take away other things in the future as well.

What about the quarantining of farm losses? What about those people who are trying to eke out a living on the land, who do some contract work, whether it be shearing or harvesting, to try to keep themselves viable in the hard times that the rural community is experiencing at the moment? Why has this Government tried to slug them as well? What about the additional capital gains tax that this Government will take from people in the rural community?


Senator Boswell —What about Senator Walsh? He is a farmer. He has sold them out.


Senator Messner —He wouldn't know.


Senator BROWNHILL —That is quite correct, Senator Messner; he would not know. That is the sad thing about it. The Government does not understand the plight of the rural community in Australia at the moment.


Senator Walsh —The Country Party represents the failures.


Senator BROWNHILL —The National Party represents the people who live in the country and it will continue to do so. The previous coalition Government introduced the 100 per cent write-off to encourage farmers to be more responsible for water conservation. Irrigation practices, especially in the Murray-Darling region, have improved dramatically in recent years. Laser land levelling replaced flood irrigation, saved water and reduced chances of salinity, the major problems in the Murray basin. What about drip irrigation? Where does it stand with the legislation which the Government wants to bring in? Farmers are spending money on water conservation and they are not tax dodgers. I quote from Treasurer Keating regarding the deductibility of expenditure on soil conservation and on conveying of water:

Providing 5-year write-off for expenditure on conserving or conveying water will significantly reduce the incentive to tax shelterers and is consistent with the concessional treatment more generally accorded assets of primary producers and other businesses.

Is the Treasurer claiming that all farmers, all irrigators, all people in the rural community are tax shelterers or tax cheats? He has done it once already. Is he saying that again?


Senator Aulich —He has never said that, and you know it.


Senator BROWNHILL —It is contained in a paper which I have in front of me. I quote from a paper entitled `The Economic Impact of Irrigated Agriculture in New South Wales'. The paper deals with the importance of agriculture to the whole of the economy in Australia. It states:

The estimated value of irrigated agriculture production . . . was $645m which amounted to 23 per cent of total agricultural production in NSW-

a State which I am proud to represent as a senator. This paper, which was prepared by Dr Roy Powell, Rodney Jensen and Anne Gibson of the University of New England, continues:

The measured economic effects of irrigated agriculture and associated activities . . . show that irrigated agriculture which generated production of $645m has a total impact of $2,059m and accounted for 52 per cent of the total effects from irrigated agriculture and associated activities.

Surely that is a big point to make in any debate. The Government is taking incentives away from people who want to conserve water, want to irrigate and want to do the job properly. An intermanagement plan has just been announced regarding the Murray-Darling basin. We might ask ourselves: Why has this been announced at this time? Perhaps it is a bit of parish-pump stuff for the South Australian election, but really it means little. An amount of $1m is to be provided for research plus the States involved will provide $250,000 each. This is still short of the $25m that has been taken away by this Government.

The thing that worries me-I have spoken about it before in this House-is soil conservation. Where does soil conservation stand? At present, expenditure on soil conservation is eligible for a total tax deductibility in the first year. If the Government has changed the arrangement regarding water, what does it intend to do regarding soil conservation in the years ahead? How does one define the difference between water conservation and soil conservation? What about a dam that is put in to stop soil erosion? Earlier in the evening Senator Boswell made this point: When does the person who is putting in a contour bank and a dam clock on and off with his bundy card in respect of each? Will somebody from the Government be there to check to see whether a contour bank is finished, the cost of which is fully deductible in the first year? Will that person then start to build his dam, the cost of which now, after a deal has been done with the Australian Democrats, is deductible only over three years? When does this happen? Do the Democrats understand? Does Senator Grimes, who has now left the chamber, not understand because he has never had any dirt under his fingernails? The write-off period over three years is the same as that which applies to office equipment. Of course, office equipment will be needed to administer some of the new measures that have been mentioned by the Government in this debate. Only 33 1/2 per cent tax deductibility, rather than total deductibility, will apply for water conservation measures in a continent as dry as ours.

I summarise my remarks. I am concerned about the sloppy nature of the tax package. This legislation is no better than any other that has come before this place lately. I hope that the draftsmen are writing their drafts in pencil. The promises of this Government to support water and soil conservation are just hollow rhetoric. People who now want to do laser levelling, who want more efficient use of irrigation, control of salinity and better water management, will now not be given any incentive. This is of concern to all people in the rural community. I repeat: Australia is the driest continent on earth. We cannot afford governments being stingy with things that lead to productive agriculture. I repeat: This Government has a preoccupation with labelling farmers as tax cheats and tax evaders. I defend the rural community against that charge. The Australian Labor Party Victorian Minister for Agriculture and Rural Affairs claims that farmers have a pot-of-gold mentality. Obviously, the Federal Government has a similar opinion. I finish by quoting from today's Melbourne Herald. On the back page Barrie Dunstan stated:

But what happens if the interest rates rise even further if, for example, the dollar fails to steady?

Mr Keating said yesterday the Government wouldn't stand idly by and let monetary policy take the full brunt.

An alternative policy would be required, Mr Keating said, echoing comments of his Secretary to the Treasury, Mr Bernie Fraser.

And what would the economic policy alternative be?

Mr Keating was too shrewd a politician to spell that out. His pat answer yesterday was: ``The Government remains confident that no such alternative policy response will be necessary.''

It looks like the Government front bench will need to be taught the easily-remembered acronym, NAPPIN, or No Alternative Policy Plan Is Needed.

The article continued:

Mr Keating will have to keep whistling his cheery tune of NAPPIN-but he'll need to keep a daily watch on the foreign exchange market.

Otherwise he might need to consider another economic policy acronym-DEATH, or Don't Expect Any Tax Help.

That is the way I review this tax package.


The ACTING DEPUTY PRESIDENT (Senator Jessop) —I call Senator Georges.


Senator Walters —Were you on the list?