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Monday, 5 June 1989
Page: 3308

Senator DEVEREUX —My question is directed to the Minister representing the Treasurer. Can the Minister inform the Senate how many Australian taxpayers paid tax under the new capital gains tax provisions in respect of the 1986-87 financial year? How much of the total capital gains tax paid was paid by persons who had incomes of over $50,000 in that year? What light do these figures shed on the distributional effects of the Government's initiatives in the area of capital gains tax?

Senator WALSH —The Australian Taxation Office publication Taxation Statistics 1986-87 was published last week and shows the figures in Table 25. That table shows that in that year just over 21,000 Australians paid tax under the new capital gains tax provisions. The total number of taxpayers in that year was 8.3 million. So one taxpayer in 400 pays capital gains tax. Of total capital gains tax collected, more than 65 per cent was paid by people with incomes above $50,000, and nearly 80 per cent was collected from people with taxable incomes above $35,000. I ask the Senate to bear in mind that those figures are for 1986-87; they are now two years old. So it is very clear that any move to abolish or dilute the capital gains tax would benefit only a tiny proportion of taxpayers-one in 400-and that the tax is skewed very heavily in favour of high income earners.

If capital gains tax were to be abolished or diluted, the revenue would have to be raised somewhere else. Of course, if a government were to follow the irresponsible fiscal policies and the irresponsible example set by the last coalition Government, that revenue loss would be offset by letting the deficit blow out. However, if the responsible course were chosen instead, the rates of tax on middle and low income Australians would have to be increased. The major beneficiaries of the abolition or serious dilution of the capital gains tax, as proposed by the Opposition the last time it said something publicly about this, would be those people who organise shonky rearrangements of company shareholdings, such as the Federal President of the Liberal Party.