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Wednesday, 1 September 1993
Page: 796

Senator HERRON (5.08 p.m.) —The report by the Standing Committee on Community Affairs on the proposed treatment of unrealised capital gains and losses on listed securities under the income test for pensioners lists the 174 submissions and over 2,000 letters that were received. The committee was asked to find on the following matters. The first matter was whether the government's costings for this measure are valid. The report states that the committee does not believe that several important factors have been taken into consideration. The second matter was whether the proposed method of calculating unrealised capital gains and losses is fair and equitable. The report states that the committee believes that the method is inequitable.

  The third matter was the effect that the implementation of this measure is likely to have on national savings and investment decisions made by pensioners and veterans. Well, we were not sure, but we said in the report that it would need further examination. The next question was whether this measure will result in a more or less equitable treatment of the various types of pensioner and veterans' investments under the relative income and assets tests. We said that the argument by the two departments concerned that equity is ensured through imposing similar controls on similar investments sounds reasonable but is not wholly correct.

  The final question involved the wider implications of creating the precedent of deeming unrealised capital gains and losses on listed securities as income. The report states that `it is the committee's belief that the piecemeal application of a measure of this type will create more inequity than it will solve'. What more an indictment can one have of a measure that has been taken by government than that?

  There are only three sitting days to go before this legislation can be repealed. It is an imposition on the pensioners of this country to be kept in further confusion as to what is going to occur in relation to the capital gains on their shares. In presenting the minority report on behalf of the coalition members and Senator Lees from the Democrats, I believe that this whole legislation should be thrown out, just as I throw out the report concerned. It should be repealed straight away.