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Thursday, 31 August 1972
Page: 1117


Dr Gun asked the Treasurer, upon notice:

(1)   What was the estimated annual loss to Commonwealth revenue of deductions from personal taxable income for local government, water and sewerage rates for the latest year for which figures are available.

(2)   What was the average deduction from personal taxable income for local government, water and sewerage rates per taxpayer paying such rates, earning the national minimum wage oi less, for the same year.

(3)   What is the tax saving on the figure for the average deduction from taxable income in the answer to part (2) at the marginal rate of tax paid by a person earning the present national minimum wage.

(4)   What would be the loss to revenue, compared with the revenue obtained from abolition of taxation deductions for local government, water and sewerage rates, if such deductions of taxable income were replaced by a standard deduction from tax payable of the amount given in answer to part (3).


Mr Snedden - The answer to the honourable member's question is as follows-

(1)   Based on income tax statistics of taxable individuals relating to the 1970-71 income year, it has been estimated that the loss to Commonwealth revenue due to deductions allowed in respct of the 1970-71 income year for. local government, water and sewerage rates on nonincomeproducing property was approximately $74m.

(2)   , (3) and (4) See first paragraph of the answer to parts (2) and (3) of Question No. 5952.

For taxable individuals with annual incomes equivalent to the national minimum wage or less in 1970-71, the average income tax deduction for local government, water and sewerage rates on non-income-producing property per taxpayer paying such rates was approximately $100.

The tax saving in respect of the 1970-71 income year resulting from a deduction of $100 allowed to a taxpayer earning an annual income equivalent to the national minimum wage (assuming that he had no other deductions) amounted to $19.98. The loss to revenue that would have resulted from allowing taxpayers a standard reduction in tax payable equal to $19.98 for each taxpayer who was allowed deductions of any amount for such rates is estimated at $43m for the 1970-71 income year.







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