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Tuesday, 19 August 1980
Page: 4

Mr MACPHEE (Balaclava) (Minister for Immigration and Ethnic Affairs and Minister Assistingthe Treasurer) - I move:

That the Bill be now read a second time.

This is an annual measure which formally imposes personal income tax for 1980-81 at the rates declared in the Income Tax (Rates) Act 1976. Honourable members will recall that, following the economic statement by the Treasurer (Mr Howard) of 6 March 1980, the Income Tax (Rates) Act 1976 was amended in the autumn sittings to declare rates of tax payable by individuals and trustees generally for 1980-81. These rates reflect the decision that there is to be half indexation of the personal tax rates scale for the 1980-81 income year.

It is worth recalling the effects of that earlier legislation. Application of the 3.8 indexation factor has meant that for 1980-81 the standard rate of 32 per cent will not apply until taxable income exceeds $4,041. It was $3,893 last year. The other steps in the scale have been correspondingly increased so that the 46 per cent rate will apply after $17,239 and not $16,608 as previously. The maximum individual rate of 60 per cent will not apply until the taxable income exceeds $34,478. It was $33,216 for 1979-80. The resulting tax reductions benefit all taxpayers and, together with associated increases in rebates for dependants, have been reflected in lower pay-as-you-earn deductions from 1 July last. I commend the Bill to the House.

Debate (on motion by Dr Klugman) adjourned.

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