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Thursday, 17 November 1983
Page: 2898

Mr GROOM(5.13) —Madam Deputy Speaker, I welcome you back from your important assignment overseas. We congratulate you on your work on that assignment.

Madam DEPUTY SPEAKER (Mrs Child) —Thank you.

Mr GROOM —We are dealing with two tax measures, the Bank Account Debits Tax Legislation Amendment Bill and the Taxation Administration Amendment Bill. During the debate so far we have had some fairly wide-ranging comments about our tax system. I agree with much of what the Deputy Leader of the Opposition (Mr Howard) has said about the tax system. We certainly need to achieve somehow a greater equity in the system. It has not worked very well in recent times for the ordinary wage and salary earner and it has been far too easy to avoid paying taxation. Therefore, we certainly need to look at indirect forms of taxation to establish a greater equity in the system. Of course, we have not said very much about the expenditure side. It is terribly important that we continue to look at the expenditure side, which really is the ultimate answer to the taxation problem, that is to try to reduce our expenditure if we possibly can and in that way provide relief for taxpayers.

As I have mentioned, we are dealing with two Bills. I wish to direct my remarks to the Bank Account Debits Tax Legislation Amendment Bill. The measure was introduce originally in the Budget last year and was proclaimed earlier this year. The reason for this legislation is that there has been a technical defect in the principal Act, it would appear, and there is a possibility of a constitutional challenge to the original legislation. So we are now endeavouring to overcome that problem by establishing joint and several liability on the part of the taxpayers and on the part of the banks which have to collect the tax and then ultimately bill the customers of the banks.

I make the point that it appears there has been an oversight by the draftsmen. It would be unfair to attack the draftsmen because our parliamentary draftsmen have to work very hard. They work under great pressure and are expected to create miracles sometimes at very short notice. But the simple fact is that we are meeting as a Parliament to consider the legislation, which is necessary, it would appear, as a result of an oversight or a failure to appreciate some of the legal problems which could result from the original legislation. I believe it is necessary to make the point that there has been an oversight and it is essential that our draftsmen keep on their toes.

I agree with the comments that have been made by the Deputy Leader of the Opposition and the honourable member for Bendigo (Mr Brumby) about the system of exemption. As has been mentioned, at the moment a review is being made of the tax and of the exemption provisions. No doubt all members have received many representations from community organisations about the fact that it appears that they are liable to pay this tax. We have had representations from school support groups, parents and friends associations, mothers clubs and those kinds of groups. We have had representations from the Boy Scouts Association, the Girl Guides Associations and those types of organisations. We have also had representations from the many service clubs in the community. I do not want to try to mention them all because no doubt I will leave some of them out, but perhaps some of them should be mentioned. Those that I have had representations form include the Rotary clubs, in particular, Lions clubs, Apex clubs, Jaycees, Penguins and a number of similar organisations. I think it is wrong that we should have a tax such as this that places an additional burden on these sorts of organisations which play such a vital role in providing very important community services to those in need and, for example, to our schools.

I hope that the Government and the Minister for Housing and Construction (Mr Hurford), who is at the table, will take heed of those representations, give full recognition to the valuable work of these organisations and provide exemption for them. I hope that the review can be expedited and that those exemptions can be provided at the earliest opportunity. I have had a number of representations, in particular from Rotary clubs in my electorate and from other parts of Tasmania. Recently, the Rotary clubs received from the Deputy Commissioner of Taxation in Hobart, Mr McHugh, a letter dated 17 October 1983, indicating that Rotary clubs do not qualify as public benevolent institutions. That surprises me because of the nature of the work Rotary clubs do. The primary object of Rotary is to encourage and foster the ideals of service. Almost all of the work of the various Rotary clubs around Australia is to serve the needs of individuals in the community who need help in one way or another, or to serve the needs of the community as a whole. It is quite wrong for the Government to seek to collect money from those sorts of organisations, which have to work terribly hard to raise funds to help people in need, in order to finance programs such as Medicare and other very expensive programs that we are now attempting to fund. Certainly, I hope that that will be looked at.

When we are looking at taxation, it concerns me that certain promises made during the election campaign, as a runup to the election, have not been kept. I refer particularly to the policy speech made by the Prime Minister (Mr Hawke), then the Leader of the Opposition, on 16 February 1983 at the Sydney Opera House opera theatre, which perhaps was a very appropriate place to make that speech. It is worth noting that in that speech the Prime Minister promised quite clearly that there would be tax cuts, and that there would be tax cuts in the first Labor Budget. I quote from page 12 of the official speech issued to the people of Australia. The Prime Minister said:

Our Government's total income tax package is being released concurrently with this speech. Its key elements include immediate reductions in income tax for almost six million Australian taxpayers, with the greatest tax cuts going to those on the lowest incomes who have suffered most . . . A taxpayer without dependants earning $225 a week, for example, will get a tax cut of $4.76 a week.

I will not go on quoting from that speech. In the appendix to the speech a list of reductions in tax which would benefit particular individuals is set out. The appendix states:

The new tax scales to be introduced in Labor's first Budget will be. . .

It then goes into the details of the deductions: rebates of various kinds, general reductions in taxation, reductions in taxation in the various zones with special allowances for people living in zone A and zone B. What has happened, of course, is that we have seen none of these tax cuts. I think that it should be noted during this debate, when we are talking about general tax measures, that this promise, which was made by the Prime Minister during the election campaign, has not been kept. How can we trust the Prime Minister with any other promises that he might care to make?

No one, of course, likes taxation, but it is a necessary evil. Obviously we cannot remove tax altogether, but certainly there is an obligation on governments to reduce the tax burden as much as they possibly can. I think there is a tendency to take it for granted-not really to make the effort that we should be making to reduce this burden which destroys initiative and enterprise. The tragedy is that people around Australia are not working perhaps as hard as they might. We do not have as many business people developing enterprises and employing more Australians as we might because of the heavy taxation burden. If there is one thing that we can do to help this country, it is to reduce the tax burden borne by Australians. We can fiddle with the system; we can certainly do something about the equity and fairness of our taxation system but the only real way to reduce the burden is to look at the expenditure side. I certainly hope that this Government will make every effort to reduce the burden and the expenditure.

The record so far has not been very good. We have seen increases in a number of areas of expenditure. Medicare will be the classic example. There will be a huge increase in the cost to the taxpayers of medical care and health care in this country as a result of that scheme.

Mr Hodgman —Did not somebody promise immediate tax cuts?

Mr GROOM —You have just walked into the chamber.

Madam DEPUTY SPEAKER (Mrs Child) —The honourable member will speak through the Chair.

Mr GROOM —Perhaps I can respond to the particular point which was directed at me concerning immediate tax cuts. I have already made that point. As I said, it is disappointing that the Prime Minister has not honoured his promise to reduce taxes. I hope that in the near future he will be looking to provide real tax cuts for ordinary hard working Australians. I finish by saying that the measures we are now debating are straightforward. They are supported by the Opposition. I join in that support.