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Thursday, 19 August 1993
Page: 321


Senator ALSTON —My question is to the minister representing the Treasurer. Would the government which promised no new taxes care to explain why millions of ordinary workers who have carefully planned their retirements and their long service leave entitlements should suddenly and retrospectively have the rug pulled from under them? What possible fairness can there be in treating older Australians on the verge of retirement as pawns in Labor's desperate and dishonest deficit repair game, by hitting them for thousands of dollars in extra taxes? Is this just another flagrant example of Labor's social justice strategy in action, and why should the Senate be an accomplice to any initiative that imposes these new taxes?


Senator McMULLAN —I note the fervent attempt by people to create a climate in which they can justify voting against these measures, but the attempt to portray that question as concern for lower income workers is an absolute phoney. Most people except Senator Alston would understand that for this simple reason: no worker, no citizen in Australia, on less than $20,700 a year will lose 1c as a result of this policy—everybody should know that—because the tax rate on which this applies at the moment is 30c. So no-one whose marginal rate is less than 30c will lose a cent. Nobody on less than $38,000 would lose significantly because most of that person's income would be taxed at much less than 30c and only a very small amount up to 34c.

  So it is not a measure that will adversely affect lower income workers at all. What will happen—and Senator Kernot correctly outlined the principle this morning on radio—is that lump sum payments will now be taxed in the same manner as leave taken during employment. That is, income, whatever its form, will be taxed in the same manner. That is the proper taxing principle. There is no question about that.

  Most low income earners do not get the benefit of the existing concessions. They are concessions that have been overwhelmingly available to high income earners only. So let us not try to shed crocodile tears and concoct some concern about lower income workers. The legitimate concerns of taxpayers who are close to retirement or who lose their jobs at short notice have been acknowledged in the way the changes have been structured.

  Retaining concessions on long service leave accrued before 1978 for those taxpayers aged 55 or over will cover the largest part of the current concessions for this group. All the concessions for those who leave employment because of redundancy, invalidity or approved early retirement will be retained. The principal concerns of those who are close to retirement or who lose their jobs at short notice have been addressed. Those who are concerned about this measure should not try to dress up their concern as protecting the interests of low income workers because those workers have never had the benefit of this concession.


Senator ALSTON —Mr President, I ask a supplementary question. Is the minister seriously suggesting that 60 per cent of taxpayers who earn more than $20,700 and who happen to be under 55 years of age should simply stand by while the government imposes a retrospective tax simply for its own selfish budget purposes? The minister has the cheek to say to them, `Our social justice policy extends only to people who are on $20,000 or less'. In other words, `We couldn't give a damn about the bulk of the Australian population and we're going to tax you retrospectively because it suits us'. Is that the government's policy?


Senator McMULLAN —That does not bear the vaguest relation to what I have said, but I never expected Senator Alston to listen, so I am not very worried about it. I actually spoke about the situation for people on incomes up to $38,000 a year, but Senator Alston was not listening. The fact of the matter is that for people earning up to $38,000 it is a very marginal issue. The opposition continually tries to find ways in which income can be raised but somehow or other nobody has to pay it. It wants to make omelettes without breaking eggs. I can tell those opposite that it does not work.