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Wednesday, 26 November 1980
Page: 29

Senator GIETZELT (NEW SOUTH WALES) - Do the Minister for Finance and the Government accept claims by, inter alia, the Australian Industries Development Association that a value added tax or a similar new tax, together with a lower maximum income tax rate, would strike a major blow at tax avoidance? If so, and if high marginal tax rates are the cause of tax avoidance, how does she account for the mushroom growth of tax avoidance schemes over the last three years when the maximum marginal rate of 60 per cent is lower than it has been since 1942?


The Treasurer has made a number of statements with regard to the speculation concerning a value added tax. His recent statement with regard to work being done within his Department and relating to the various types of taxation that could be applied in this country, I think, is well known to all. I have nothing to add to the statements that were made by the Treasurer and by the Prime Minister in regard to a value added tax. In response to the other part of Senator Gietzelt's question, I think it is probably fair to say that there is an element of tax avoidance regardless of the rate of tax applied, and whether a greater incentive applies to a particular rate than to another is a matter of conjecture.

However, I think it ought to be said that in this country there is certainly a mood that there should be an equitable and fair system of taxation and that it should be applied to all those who are required to pay tax on the basis applied by the Government. The Treasurer will undoubtedly have further statements to make when he has had an opportunity to consider the report from his Department that he has outlined. At this stage I can add nothing to those statements.

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