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Wednesday, 7 September 1983
Page: 468

Mr KEATING (Treasurer)(12.18) —So this is the new Liberal Party. This is the new Opposition-the fair and reasonable approach of the honourable member for Kooyong (Mr Peacock) and the honourable member for Bennelong (Mr Howard). In fact, what we have seen in the last day is the same old gang doing the same old things for the people they have protected all these years. Yesterday we heard a disgraceful statement by Senator Dame Margaret Guilfoyle when she was talking about the principle of retrospectivity being offensive when retrospectivity was the basis of the legislation which the former Government introduced. She relied upon such remarks as 'inequitable', 'arbitrary', and 'vindictive' to try to apologise for the former Government's slavish attention to the people who had exploited the tax laws of this country.

There is no point in the former Treasurer getting up in this chamber and fulminating about his role in cleansing the Australian taxation system. For five years the honourable member for Bennelong, as Treasurer, allowed the tax avoidance industry to run rampant in this country. It was exposed only by the Costigan Royal Commission on the Activities of the Federated Ship Painters and Dockers Union which was appointed simply to try to embarrass the Australian Labor Party because somebody thought there was some criminal activity on the waterfront in Melbourne. We found that there was some criminal activity all right. The criminal activity involved all the people who support, subscribe to, vote for and are connected organisationally with, the Liberal Party of this country-the great who's who of Melbourne and Sydney business-who were mixed up in--

Mr Howard —Why do you not name a few of them?

Mr KEATING —I do not have to name them. They were named in the Costigan report- lists and lists and lists of them. You know, as I know, that you sat there for five years and did nothing about it. You now come in here with this puny argument about McCarthyist tactics and make suggestions to us. You know damn well that when people have the capital benefit on the sale of these things they have the expectation of the value of the retained earnings. It is a stupid debating point to say that these things were legal in the year in which this company stripping took place, because once the companies were stripped, the tax at distribution could never be paid. You know that. So why go on with this ruse, this stupidity, this dishonest argument with which you come into this chamber apparently as the mouth almighty for the Liberal Party to camouflage in fact the disgraceful and unprincipled notions of behaviour of your own party room?

Yesterday we saw the behaviour of the Opposition in the Senate on the prescribed payments system which, in fact, you introduced in the last Budget. Yet you are now trying to suggest that the regulation should not be gazetted. You have this matter being looked at by a committee, although we have seen massive fraud of the revenue in the building and other industries. The Opposition is now talking about voting against the Government's changes in the superannuation area where indeed there have been enormous anomalies in respect of the treatment of tax on lump sum superannuation versus pension superannuation . It is the same with the assets test. There has been an enormous leakage of public funds. You people simply stand for rorting. That is what you are all about.

Mr DEPUTY SPEAKER (Mr Mildren) —Order! The Treasurer will address his remarks through the chair.

Mr KEATING —What the members of the Opposition stand for is, simply, rorting. Their mission in life is to protect every rorter in the country. They make that clear. I would have thought that the new leaders of the Opposition would have turned their backs on the days when they were soft on tax avoidance, rorts and distortions in the Tax Act, and start to look at some equity. But no; they have been here a couple of months and here we go again. One can just imagine the tone of the debate inside the Liberal Party party room on matters such as this. In government the Liberals had some responsibility to the nation, but in opposition they are a bunch of political prostitutes seeing what they can do to ingratiate themselves with the people who finally turned their backs on them at the last election-their own supporters.

Let me deal with this issue in principle. I do not want to spend much time on it. The garbage which the honourable member for Bennelong has just proffered does not deserve a reply. He talked about the question of innocence. In fact, he is now arguing a case which he overlooked. He dismissed the question of innocence or guilt by simply addressing, in his legislation, the question of who , in fact, were the recipients of the funds.

Mr Howard —That is right.

Mr KEATING —You did. So why come in and argue to us that we should in fact invoke another principle?

Mr Spender —Is that an answer?

Mr KEATING —You are now suggesting that there are changed circumstances. There are no changed circumstances.

Mr DEPUTY SPEAKER —Order! The Chair is occupied. I ask honourable members to address their comments via the Chair.

Mr KEATING —The point of this legislation is that we are attempting to recover the personal tax on the distribution of the retained earnings of these companies which were sold at the time--

Mr Howard —You do not have personal tax on retained earnings.

Mr DEPUTY SPEAKER —Order! The honourable member for Bennelong was heard in silence. I expect him to extend the same courtesy to the Treasurer.

Mr KEATING —The issue is that there was an expectation that the sale price of these companies included not only the stripped company tax but also the value of the retained earnings. That is the point at issue. The former Government went for the company tax and left the retained earnings question. This legislation seeks to repair that position. The Deputy Leader of the Liberal Party is saying that there is a case in equity in one sense, but not in another. That is nonsense. What happened was that he could not get the support of his party to take action when he was Treasurer. Because this Government is doing it, the Opposition is now hiding behind the sort of blanket ruse that it is a McCarthyist tactic on the part of the Government to suggest that we should recover these moneys.

Quite obviously we have on our hands the continuing moral decay of the coalition parties under whom for five years we saw massive growth in tax avoidance. When we finally had the Costigan report, the former Treasurer came here and hid behind a line in that report which talked about the secrecy provision of personal income tax returns which the former Treasurer knew did not preclude a discussion about the nature of the schemes. It was not important in that sense to know the names of the individuals. But the honourable member for Bennelong, the former Prime Minister and honourable member for Wannon hid behind that flimsy piece of argument for two weeks. They were hoping that finally the debate would fade away so that the honourable member for Bennelong could maintain his position as Treasurer. Finally, the whole onus of public opprobrium was directed at the Commissioner of Taxation because the former Treasurer and the former Prime Minister were prepared to let everybody believe that it was all the fault of the Australian Taxation Office. When the Commissioner of Taxation published what is now referred to as the telephone book of letters-

Mr Howard —I published that.

Mr KEATING —You published it because the Commissioner insisted. That is why. In the telephone book of letters we saw letter after letter to the former Treasurer and the Government talking about the continuing growth of these tax avoidance schemes. Yet the former Treasurer sat on his backside and did nothing about it until the Costigan report exposed the whole tawdry episode over all those years. The Government was then forced by public opprobrium to do something about it. It did not even do it all. We are about to do the balance of things which should reasonably be done. Yet we have to put up with abuse about McCarthyist tactics and the like.

If the Opposition wants to support the tax avoidance industry let it do so; but let it say so. Let it say where it stands and not suggest to the Government that in some way it is using McCarthyist tactics. Let us hear from the honourable member for Bennelong where he stands with his party on its reported proposals to vote against the change in the superannuation tax arrangements which he argued, to his credit, inside his party for years should have been changed; but he could not get enough support. Let us also hear where he stands regarding the assets test-the haemorrhaging of public funds which is going on with the avoidance of the income test. Where is there a defence in equity from the Liberal Party in these issues or, more blatantly, the prescribed payments system which he, as Treasurer, introduced. The Opposition is now suggesting that it should vote against the regulations because they are too harsh. Indeed, this Government not only delayed implementation of that legislation but also reduced the payment from 25 per cent to 10 per cent and variations below that. Despite that, members of the Opposition now have a Senate committee looking over the legislation to see whether they can find enough room in their consciences-

Mr Howard —What has this got to do with the Bill?

Mr KEATING —It goes to the whole shabby attitude the Liberal Party adopts to the whole question of equity in the tax system and the payments system of the Commonwealth in respect of tax avoidance. Obviously, the Liberal Party is not in government. It is reverting to type. It is going back to its old colours; that is, soft on tax avoidance and apologists for all the rip-off merchants who make every other Australian pay more than their fair share of taxation.

There is $60m in this Budget. This issue is a Budget measure. As I said in an interview this morning, the coalition is back to its old antics of attacking the first Budget-not only just a Budget but the first Budget of a Labor Government. The ultimate loss to revenue if this Bill were to be defeated would be $270m, which other honest taxpayers would have to pay to make up the forgone revenue from people who were involved in bottom of the harbour activities. Let us be clear about that. The honourable member for Bennelong is defending the activities of those people who are involved in bottom of the harbour operations, saying that they should be able to keep the money and that the ordinary taxpayers of Australia should make up the difference. I totally reject that notion. I reject any charge of McCarthyist activities on the part of the Government. The Government is doing what is only right and proper and what should have been done by the former Government. I reject the display of mock indignation by the honourable member for Bennelong as an apology for what he was not prepared to do, and was not able to get his party to support, when he was Treasurer of this country.