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Wednesday, 19 June 1996
Page: 1859

Senator WATSON(6.09 p.m.) —I think people opposite should be reminded of the situation when Labor was actually in power. Under Labor, the provisional uplift factor exceeded the actual growth in income subject to provisional tax in every year between 1991 and 1994-95. The provisional uplift factor was set by previous Labor governments at eight per cent for each of the last four years, including 1994-95. There was no justification for such a high figure either by the government or by the Treasury officials at committee hearings.

The level of aggregate income that should be subject to provisional tax can be difficult to predict. Therefore, in regard to the uplift factor, for subsequent years after 1996-97, the coalition government will set it when the most accurate information is available. What is wrong with that? It will be set at what is a realistic figure rather than at the unrealistic figures that your government set, Senator Sherry, when you had that absolute grab for money, when you used every piece of legislation available to try to bring forward the timing of the tax collections. So don't be hypocritical now in relation to what is happening.

We are going to set the figure as accurately as possible at the time when the information is available. It is going to be set at what is going to be a realistic growth factor so that small business, which also includes self-funded retirees who are also subject to provisional uplift factors, can all be treated fairly. Of all the people under your administration, Senator Sherry, it was self-funded retirees who suffered the greatest discrimination, and these are the people who are going to get fairness and justice under our system because they will be brought into a tax regime that is equivalent to the thresholds that apply to the full pensioners.

So we will not lock people into a situation in which they may be penalised because of changing economic circumstances but rather set a rate which is a reasonable reflection of the growth of the income of provisional taxpayers. This is precisely what your government failed to do year after year, to your disgrace. So for the 1996-97 financial year a reasonable figure will be set in relation to the economic expectations of the time. I support the stand made by my colleague Senator Short. I reject the arguments as well as the amendment that have been put forward.