Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 22 November 1973
Page: 3772

Mr STREET (Corangamite) - Never before in my experience in this place has such widespread concern and widespread objection been expressed concerning any piece of legislation as has been placed before me as a Federal member of Parliament in respect of this Income Tax Assessment Bill (No. 5). I suppose I should not be surprised by such reaction because this Bill and its provisions affect almost every Australian in one way or another. In my speech I intend to refer specifically to the effect that the legislation will have on sections 57aa, 57ab, 75, 76 and 82 (3) of the Act. As honourable members will be aware these sections concern the accelerated depreciation rates and write off provisions referring to primary production. I think it would be fair to say that this Bill owes much of its origin to the Coombs report. The Coombs report gives as its reason for substantially altering the provisions of those sections of the Act to which I referred a moment ago that those sections have given an unnecessary stimulus to the activities of what are generally referred to as Pitt Street or Collins Street farmers.

It is clear from studying the Coombs report that the withdrawal or the drastic reduction of the substantial concessions contained in these sections of the Act has been due to the anxiety of the Government to catch up with the activities of that form of primary producer. However, the fact is that the Government has been unprepared or unable to give a definition of a Pitt Street or Collins Street farmer. I refer to a question which I asked the Prime Minister (Mr Whitlam) in response to an answer which he had given, I think to the Leader of the Australian Country Party (Mr Anthony). I asked the Prime Minister to give me the definitions which he proposed to apply to those who were Pitt Street or Collins Street farmers and of those which he was pleased to refer to as genuine primary producers. In his anwer to the question of the Leader of the Country Party, the Prime Minister indicated that no genuine primary producer had suffered any disadvantage under the proposals introduced by his Government.

When I asked the Prime Minister this question without notice, with characteristic modesty he referred it to the then Acting Treasurer (Mr Hayden), the Treasurer (Mr Crean) being away at the time. The acting Treasurer went into a great rigmarole about the featherbedding - I think that was the word he used - of Pitt and Collins Street farmers, but as his answer proceeded it became clear that he was unable or unprepared to give any definition of what constituted a genuine primary producer as distinct from those classified as Pitt or Collins Street farmers. Leaving aside for the moment whether such a definition is possible, there is a need to examine the extent of the inuflence which these Pitt Street and Collins Street farmers have exerted over the Australian economy and, in this context particularly, the economy of the primary industry sector, vis-a-vis the genuine producer, because if this is not known how can the Government make a series of decisions having very serious effects on all primary producers, not only those whom it is pleased to classify as Pitt Street or Collins Street farmers? For example, the Government claims - this is expressed in quite clear terms in the Coombs report - that the abuses of the previous concessions by Pitt and Collins Street farmers were the cause of the withdrawal or drastic reduction of those concessions. It is therefore essential to know what proportion of primary production comes from these sources; otherwise, it is impossible to come to a considered judgment on whether the withdrawal of the concessions is justified. That is the first substantial point I make.

The second is that, by its own admission, the Government either has made no attempt or is unable to get the information which would be essential for it to make a considered judgment on this issue. It is therefore selfevident that, in the absence of this information, the judgment was not a considered one. This judgment was not unique; it merely joins a long list of hasty, off-the-top-of-the-head decisions which have been made by this Government. But the great importance of this is that it will have a significant effect not only on the profitability of the operations of primary producers themselves but also on the cost of many food items to Australian consumers.

I now turn to the cost of the concessions to revenue. As I interpret the Coombs report, the total cost is estimated to be approximately $27m. But I remind the House that the Government cannot or will not provide any estimate of how this amount is divided between those who earn their living off the land and those for whom their primary producing activities are a sideline; but there is a second and equally significant deficiency in the Government's approach to these issues. On 30 August - nearly 3 months ago - I placed a question on the notice paper to the Treasurer (Mr Crean) which consisted of 2 parts. The first part requested the detail of the depreciation rates applying to various items before and after the Budget. Since then these rates have been publicised, but I have not been officially notified of what they are through an answer to my question on notice. I think it would have been ordinary courtesy to inform me when the information was made available publicly. But that is not my main objection.

The second part of my question is the most important. It sought details of the gain to revenue by the alteration of the rates of depreciation on each item. The sections of the Act to which I have referred - sections 57aa, 57ab, 75, 76 and 82 (3) - cover a very significant range of items. In the absence of any answer after nearly 3 months, I am forced to assume that the information is not available. Certainly it cannot have been available to the Government when it made its Budget decisions; otherwise, why could I not have been provided with the answer to this question long before now - indeed, immediately the Budget was delivered in this House? So I think it is reasonable to assume that we now know that the Government was unable to distinguish between those whom it wished to penalise by the introduction of this measure - that is, the Pitt Street farmers - and those whom the Prime Minister claimed in his answer to the Leader of the Country Party it did not want to see disadvantaged - that is, in the Prime Minister's words, the genuine producers. The Government did not even know the cost of each of its proposals. I put to the House that this is incredible.

It makes absolute nonsense of the Government's oft repeated assertion that it would only take decisions after a most careful cost- benefit analysis of any proposals that it put forward. Here we have decisions which will have a direct effect on thousands of producers themselves and an indirect effect on millions of consumers in Australia through increased cost of production of food. The Government does not even know the basis on which it made its decision or, if it does know, it has not seen fit to inform me in answer to the question which has been on the notice paper for nearly 3 months. What a way to govern! It would be laughable if it was not so serious - serious because it has exposed the hopeless inability of this Government to appreciate, or apparently even to attempt to assess, the consequences of its policy decisions.

In my speech during the Budget debate i drew attention to the inconsistency of the Government's approach. On the one hand, it acknowledged- that the only way to contain food price rises is to produce more food. Yet practically everything it has done since coming to government will discourage and. in some cases, remove altogether a producer's ability to increase his productivity by sound management practices. Nothing could illustrate this better than the removal of the write-off provisions for water conservation, soil conservation and fodder storage. Expenditure on these items is absolutely central to the safe - I emphasise the word 'safe' - increase of stocking rates and agricultural production generally. Nothing could be more central to the conservation of the nation's greatest asset, that is, the soil itself. How short-sighted can we get? The only conservation which will come out of these measures is storing up trouble for the Government which introduced them.

What has been the cost to revenue of the water and soil conservation concessions? We do not know, and neither did the Government when it made its decisions. The same applies to all the other individual measures. There is no possibility of drawing up a table of priorities based on the cost of each proposal balanced against its benefits. There is just a blanket withdrawal of all concessions.

Let me give another example of the gross inequities and anomalies which will result from this legislation. Let us take the case of a young man who has raised enough money to put down payment on a partly cleared block of bush land. It is not viable as an agricultural unit in the existing circumstances. But by hard work this man earns extra money, perhaps as a shearer, perhaps as a fencing contractor or by doing other similar work, and raises enough money to employ a contractor to clear the rest of his block and make it an economic proposition. I want to emphasise that a young man in that position is able to do this only if the money he pays to the contractor is fully deductible in the year in which he pays it. In other words, these are the only circumstances - it is the only way - in which he can become independent. It will become virtually impossible to do so under this legislation. It will be impossible for the battler, to use a good old Australian term, to become the owner of his own farm.

Mr Stewart - With due respect I think you are wrong.

Mr STREET - I accept the Minister's interjection and will respond to it in this way: I have just described why I think it will be impossible for the battler to own his own farm. It will not be impossible for the man who does not have to earn his living off the land to spend this extra money on fodder storage, water conservation and soil conservation. He will be able to spend this money because he does not have to earn his living off the land. His land holdings are a subsidiary to his main enterprise which may be in some field of professional endeavour. They are the people whom the Coombs report says that this legislation is aimed at. They are the only people under the conditions now being imposed who will be able to take advantage of what minimal concessions remain - the people who do not have to earn their living off the land as opposed to those who do. Sir, nothing could illustrate more clearly the damaging effects of this legislation. Nothing could illustrate more clearly that the Government just does not understand the Australian ethic. This legislation will destroy what was a realistic and achievable dream of many young Australians. It gives me no pleasure to say that, Mr Deputy Speaker, and it stands as a condemnation of the Government that that will be the result of its legislation .

Suggest corrections