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Tuesday, 5 September 1989
Page: 939

Senator MACKLIN —My question is directed to the Leader of the Government in the Senate. I refer the Minister to his concern expressed in February this year that Australia's low level of savings is exacerbating our foreign indebtedness and the submission by his Department's Bureau of Industry Economics calling for an inquiry into the level of national saving. Has the Minister been able to evaluate a recent proposal by the Australian Association of Permanent Building Societies (AAPBS) which claims to be revenue neutral or, better still, revenue positive, yet encourages domestic savings by taxing at source all non-superannuation interest earnings at a rate of between 15 per cent and 20 per cent? Does the Minister agree that if the AAPBS proposal is realistically costed, its implementation will increase interest revenue collected by the Australian Taxation Office because the latest national account data shows total interest receipts by households at $17 billion while tax data shows that only $8 billion of interest was declared for tax purposes?

Senator BUTTON —This is a question more appropriately directed to the Minister for Finance representing the Treasurer. It is a question of which I have had some short notice. I am endeavouring to obtain an answer from the Treasurer's office and I will supply that as soon as I possibly can.

I will comment on one or two points raised in the honourable senator's question. He drew a discrepancy between the alleged level of savings as estimated by the Australian Bureau of Statistics and tax data which shows that only $8 billion of the $17 billion saved by households was declared for tax purposes. I just make the point that it is not easy to draw the conclusion from that that it is all because people are not paying tax on income from savings. The larger figure which appears in the national account includes partnerships, whereas the $8 billion does not. It includes children and a whole range of people who might otherwise not be eligible to pay tax. I am not sure that the honourable senator can draw the conclusion he appeared to draw in the third part of his question. The question requires a detailed evaluation of the proposal by the AAPBS. I will have that done and provide the honourable senator with an answer.