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Wednesday, 14 June 1989
Page: 3969


Senator McKIERNAN —Does the Minister representing the Treasurer recall the campaign waged by the National Farmers Federation against the Government's 1985 initiatives to rationalise the taxation of fringe benefits? What do Australian Taxation Office statistics indicate about the amount of fringe benefits tax (FBT) paid by the farm sector? Has the incidence of the FBT been such as to place a major burden on Australia's farm sector?


Senator WALSH —I recall the National Farmers Federation campaign very well. I also recall that the then President of the National Farmers Federation played a high profile role in that campaign against both the capital gains tax and the fringe benefits tax. Of course, it provided Mr McLachlan with a vehicle for obtaining a high profile in the media and among conservative string pullers, on which he apparently continues to ride. I also understand that it used up a great deal of the National Farmers Federation's money and effort.

The statistics that are now available show-and anybody who knew anything about agriculture at the time would have known it anyway-that the FBT had very little effect on farmers; the constituency which Mr McLachlan was purporting to represent. The publication by the Australian Taxation Office Taxation Statistics 1986-87, published late last month, contains a number of tables of statistics on the FBT during the period 1 April 1987 to 31 March 1988. Total FBT collections for that period were $859m and, of that, $15.3m, or 1.8 per cent, was paid by taxpayers in the farm sector. Of course, that included companies and partnerships, as well as sole trader farmers. A little over $2m of that $15m was paid by public companies. So a maximum of $13.3m was paid by farmer taxpayers who can be genuinely regarded as farmers. That means that 1 1/2 per cent of total FBT was paid by--


Senator Panizza —And the rest.


Senator WALSH —If the honourable senator wants to dispute the officially published statistics of the Commissioner of Taxation, that is his affair. Personally, I would not. One and a half per cent of the total FBT was paid by farmers, who account for about 5 1/2 per cent of the work force. Of course, that reveals that the farm sector-as anybody who knows anything about the farm sector or who was concerned about that sector would have known-was not one of those areas in which payments in cash had been converted into payments in kind in order to escape tax. The main area where this sort of thing was rife was among senior executives of large companies, such as Elders-IXL and the South Australian Brewing Co. Ltd-a couple of companies which Mr McLachlan would know all about.

Going back to the first part of the question, at that time Mr McLachlan supported incentives to dodge tax and he fought hard to retain those incentives by converting cash payments into payments in kind. He then used the subscriptions of ordinary farmers to fight a campaign to further his own interests and those of his rich fellow directors-mostly city-based-of companies such as Elders-IXL and the South Australian Brewing Co.