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Monday, 26 November 1973
Page: 3834


Mr CREAN (Melbourne Ports) (Treasurer) - In, hopefully, closing the debate all I would say to the new boy of the House, the honourable member for Stirling (Mr Viner), is that if he had looked up recent debates in this chamber on income tax legislation he would have found that far more time has been afforded to this debate than has been the case for several years. Maybe it was due to a lack of interest in the past on the part of honourable members who now sit on the other side of the chamber. I point out to the honourable member for Stirling that, as far as the first quarter is concerned, the company tax assessment will be on the basis of last year's assessment. This has been done for a good number of years in relation to provisional assessments. All that is happening with respect to company tax is that the companies are now being put on the same basis as everybody else of having to pay as they earn. The wage earner pays week by week as he receives his wage. The provisional tax payer gets an assessment in advance on the basis of what his earnings were last year. Why should companies be in any better position? It will be easier to overcome certain liquidity problems if it is done in this way. If honourable members opposite were honest I think they would have done this sort of thing themselves a long time ago.

I did not altogether like the references this afternoon by the honourable member for Mackellar (Mr Wentworth) to a swindle. I think most honourable members on either side of the chamber regard me as being a reasonable man. I would not use such a term. There is no swindle. All I wish to say in this respect is: Why should a person, merely because he is of a certain age and has a certain aggregate income, pay less tax than some people of lesser years? That is what we are endeavouring to bring about here.


Mr Whittorn - They have been thrifty and prudent.


Mr CREAN - There are plenty of people who had no opportunity to be thrifty and prudent in the 1930s. Some of them arrived at their age of retirement in the 1960s without anything. They did the best they could in all the circumstances to provide for themselves and their families. I would have liked to be able to give some relief in the Budget to the lower income groups where there is only one income in the family - that of the married person who has dependants. Because of the overall position of the Budget, I could not do that. I ask: Why should somebody, merely because he is over 65 years of age and is in receipt of a certain aggregate income, pay less tax than somebody of a lesser age who has a wife and children to support? That basically is the position we are endeavouring to rectify. That is all we have sought to do.

The honourable member for Mackellar said that I had never been in favour of abolishing the means test. Candidly, I had not. Nevertheless, there was public agitation about it and both sides supported such a view in the last election campaign. Whatever the end result may be, I acknowledge that we won on the proposition of a progressive abolition of the means test. Once we have done that I think we have at least to acknowledge the economic reality. I think the honourable member will agree with me when I say that in the long run it is part of a social contract that if one wrought in the years of one's strength one is entitled to reasonable certainty about an income in the years of one's decline. I find it very hard to accept that somebody who has a higher income should, merely because of his age, pay less tax in total than somebody who has a lesser income and who has dependants. This is what we are seeking to do here. We are seeking to acknowledge, in the finish, that anybody in retirement is entitled to reasonable certainty about his future.


Mr MacKellar - He cannot add to his income.


Mr CREAN - His actual income, if you like. But I think the honourable member for Mackellar would acknowledge that honourable members opposite left the age allowance stagnant for a good number of years. I think that honourable members opposite made a great mistake recently in respect of superannuitants. The previous Government commuted part of what previously in any sensible sense would have been regarded as income and said it was not income. This is the kind of thing we were stuck with. We have done the best we think we could have done in all the circumstances. I appreciate the arguments used by honourable members on both sides but I would hope at least that this debate has centralised some of the questions that should be examined in the next year or two. This consideration should include everybody, not only those who have been lucky enough to have been provided for by government superannuation funds. And the government has been a better provider in terms of superannuation than has private industry. We still have an awful mish-mash and some 2 people out of every 3 people in the population still are not covered by any scheme. Once a national superannuation scheme comes into being, the situation will be different. There will be a lot of arguments about phasing in and phasing out or, if you like, contracting in and contracting out. We are taking the first reasonable assumption that, once we get to this point, at least part of the aggregate income of everybody, irrespective of whether it is partly made up of pensions payable by the Government or by superannuation funds, comes from the Government. If we look at the Commonwealth Superannuation Fund, we see that, of every $7 that is paid, $5 comes from the Government and only $2 from the contributor and, if we look at the private funds and take into account the taxation concessions that are involved, we see at least that they have been a privileged section in comparison to the rest of the community. The view of the Government is that everybody should be provided for and there will be some difficulties in the transition. I appreciate the interest of the honourable member for Mackellar because I think, like me, over the years he has acknowledged more than have some other people that 1983 will be different from 1973 and that 1973 is different from 1933 but that in 1973 we still have the inheritances of 1933. 1 hope that in the next decade this House sensibly will move to a better transition for everybody and not selective arrangements for certain people.


Mr Wentworth - The Treasurer has asked a question. Could I have leave to answer it?


Mr SPEAKER -Order! There is no question.


Mr Wentworth - I ask for leave.


Mr SPEAKER -Order! The honourable gentleman does not have the call.


Mr Wentworth - I ask for leave.


Mr SPEAKER -Order! The honourable gentleman will resume his seat. He knows well enough that the Treasurer has closed the debate.

Question resolved in the affirmative.

Bill read a third time.


Mr Wentworth - Might I have the indulgence of the House for one sentence?


Mr SPEAKER - That is a matter for the Treasurer to decide.


Mr Crean - I am reasonable; I will give you 60 seconds.

Mr WENTWORTH(Mackellar)- by leave - I shall not need all of them. The Treasurer (Mr Crean) asked why special allowances should be made for aged people. The reason basically is that their savings and their superannuation rights were accumulated in times when the value of money was quite different. They have been the main losers by the endemic inflation that is occurring here and everywhere else and which has halved or divided by four the real value of the savings they have made.

Mr CREAN(Melbourne Ports- Treasurer) - by leave - I say: Lucky were they who could accumulate. It was by no special virtue on their part, or no vice on the part of those who could not save.







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