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Monday, 27 September 1993
Page: 1148


Senator WATSON —My question is directed to the Minister representing the Treasurer. Are not the car parking measures confusing, in that from 1 April 1994—which, incidentally, is April Fools' Day—the self-employed will be allowed to claim for the cost of parking at a meter in the street, providing the taxpayer meets the provisions of section 51(1), but can be denied a claim if parked off the street? Is not this assessment of the law correct?


Senator McMULLAN —I always enjoy the opportunity to discuss the matters of arcane tax principle and its administration with Senator Watson. It is important for people to realise that there was an anomaly which needed to be addressed with regard to car parking by self-employed persons. Let me make it clear what the circumstance is. That cost of parking by self-employed persons will no longer be deductible for income tax purposes where the parking is at or in the vicinity of the person's place of work; the car is being used by the person for travel between home and work; the car is parked there for more than four hours in total between 7 a.m. and 7 p.m.; and the car is parked within one kilometre of an all-day commercial parking facility.

  Senator Watson and Senator Kernot, with whom we discussed similar car parking legislation at some length last year, both here and in the committee, will be somewhat familiar with those qualifying conditions because they have a certain familiar ring to them. It is probably appropriate that we should put the taxation of car parking by self-employed persons on a similar footing to car parking for employees.

  The conditions under which parking by the self-employed will be non-deductible are the same as those which make it subject to the FBT. Therefore, because those conditions are the same, it will not be more complex or confusing than the minimum requirement to deal with what is a complex circumstance. People utilise this benefit in a wide variety of ways. Therefore, we cannot have a simple tax measure that will equitably address the very different ranges of circumstances in which people find themselves and which the government and the tax office would have to deal with in setting a proper framework for dealing with what is a very complex situation, particularly with regard to employees subject to FBT.

  It is a complex situation, but complexity of arrangement is not a justification for making something exempt from the proper tax arrangements. Otherwise, we are simply recreating the situation where the people with the best tax accountants pay the least tax rather than tax according to income. Although simplicity in tax is a desirable objective, equity is also a very necessary element. Therefore, we will continue to have to balance those different elements of the tax situation. I do not think it is more complex than the minimum necessary for implementing this equitable measure.