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Wednesday, 28 November 1973
Page: 2254


Senator LITTLE (Victoria) - I wish to speak to the motion for the adjournment of the Senate to draw attention to a question which was not answered this morning. I had asked the Minister for the Media (Senator Douglas McClelland) as the representative in this chamber of the Minister for Social Security (Mr Hayden) a question on notice. At the outset I say that I place no blame on the Minister who represents the Minister for Special Security in this chamber. In my opinion this insult was offered to the Senate as a whole. The question was not a difficult one or a complicated one. It had to do with probably one of the most controversial matters which is before this Parliament at this time. I gave the Minister the opportunity of 8 days in which to reply. The reply could have been a simple yes or no, but I received no reply at all. I merely received a reply to the second portion of the question and that in itself, to an extent, was an insult to this chamber because it was a repetition of a reply to a question asked in another place. The reply given to that question had no relation whatsoever to the most important part of my question. The Minister should have welcomed the opportunity to answer if he genuinely desired to explain his proposals on national health not only to this Senate and to the members of this Parliament but also to the community at large. The question refers to the Minister's statement and it goes on to point out where that statement is to be found. It asks whether 3 out of 4 families would be better off under the scheme, including those where there is a working wife. The question is couched in these terms:

Does the Minister's statement . . . take into account the extra taxation to be paid if the proposed rate of 1.3S per cent is itself not deductible from personal income.

That question was ignored completely. The Minister made no attempt whatsoever to answer it. In those circumstances I can only say that the Minister, by the White Paper which he has issued, is endeavouring to perpetrate a lie upon the members of this Parliament.


Senator Greenwood - Nobody could say that the question could not easily be answered.


Senator LITTLE - It was so simple. He could have said: ' Yes, it is deductible ', or 'No, it is not ', or 'I did take it into account', or 'I did not'. But the Minister left both questions- that is the one that is there by inference and a direct questioncompletely unanswered. The Minister in his White Paper spent some considerable time on this aspect, yet nowhere in it does he disclose to the people the intentions of the Government on this matter. The Minister draws attention to the Government's policy and how it is to achieve its aim for the highest quality health care at a reasonable and responsible price. He states that the Government will be using two separate but closely integrated approaches. He goes on to point out how, in the past, the cost of the health service has been more reasonable for those on high incomes because the payments to the hospital benefits funds have been tax deductible. That leaves an inference, of course, that no longer will these payments be tax deductible under the new scheme. But the White Paper does not state that definitely. Indeed, in the closing paragraph of the White Paper the Minister states:

The total net cost to the Budget, including the effect of tax deductions, will be approximately the same as would be the case under the existing health insurance scheme.

No wonder there is an atmosphere of complete confusion throughout the medical profession and the charitable and private hospitals if this is the sort of explanation we are to receive when we are merely seeking information and carrying out the task for which we are in this Parliament, that is, to represent the community. It is enormously important that members of the public should know in order to be able to appraise the situation for themselves. The question I posed to the Minister should be answered. Let me give an example, which I have worked out, of what it actually means and so give the lie to the Minister's claim that 3 out of 4 families will be better off. I do not know whether he has taken these things into consideration. He is not in the position in which I am, because he knows whether the 1.35 per cent will be tax deductible. Of course, the implication that it is a tax leads one to believe that it will not be tax deductible. After all, how is it possible to allow as a tax deduction something that is computed only after the taxable income has been arrived at? But there is a way that it could be tax deductible. It could be tax deductible in a subsequent year. Are we, after the tabling of a White Paper, to remain in a state of confusion on such an important aspect?


Senator Wright - The point is that the question should be answered.


Senator LITTLE - I fully appreciate that, and it would be to the benefit of the Minister and the Government to accept the opportunity to answer it. I believe that the Minister's attitude was an insult not only to me personally but to every member of this Senate, including members of the Government Party who so recently were in Opposition and were seeking this type of information from Government Ministers in order to clarify the position for themselves and for the people whom they represented. After all, that is our basic task. We should not be told that the Minister made his computations by the use of some particular table, and be told to go and do the work ourselves. How can we do the work if the Minister keeps secret whether tax deductibility is to apply?

Let us look at what it means in terms of the payments by people on different incomes. I do not suppose that an income of $5,000 a year would be considered an excessive income in working families today. It is about $100 a week. The rate of income tax on an income of $5,000 a year- these are all approximate figures, leaving out the fractions of cents- is 33c in the dollar. The total tax payable by a person on that income would be $916, leaving him a yearly income of $4,084 after tax has been paid. In future, he will have taken out of that for health insurance about $70, which is computed on the basis of the $100 a week or $5,200 a year. If it is the Minister's intention that the payment be tax deductible, at a tax rate of 30c in the dollar that person's total payment for health insurance would actually be not $70 but $59. He would receive a taxation rebate of $11. So, although he would be paying $70 for health insurance, he actually would be saving $ 1 1 of his income if the $70 was tax deductible. I would say that to a man in that position $1 1 would be a considerable amount.

Let me move to the higher incomes. A man on $1 1,000 a year would pay the maximum under the scheme that the Minister is proposing; that is, $ 1 50. He pays up to 50c in the dollar tax on that $ 1 1,000 income. He pays a total of $3,388 in tax. Of course, he does not pay 50c in the dollar on the whole of his income, but he pays it on that portion of it in excess of a certain amount, from which portion his $150 contribution for health insurance would be paid. He would be paying 50c in the dollar on that $ 1 50. Of course if it were rebatable, what he would really pay would be only $75. So, he would not pay very much more than a man with an income of only $5,200 a year. In the high tax bracket, a man with an income of $20,000 a year would pay up to 60c in the dollar in tax. Of course, the maximum amount of $ 1 50 which he would have to pay would be reduced by a tax deduction at the rate of 60c in the dollar. He would pay $ 1 5 a year less than the man on $11,000 a year. It would cost him only $60 a year. The argument of the Government in the White Paper is that all this is not justified under the old scheme because a man on $20,000, as well as paying tax amounting to $8,448 as against $3,388 paid in tax by the man on $11,000, should saddle up and carry a greater burden in regard to the health scheme as well. The health scheme is to be compulsory and he will have to join although he may be in very good health and consider that it is not worth it for him to pay such a high premium.

I note that the Government is doing this in regard to its education scheme, when it excludes the A class private schools from assistance. The great proportion of the $8,448 paid in tax by a taxpayer on this high income would be spent on the education of children. The greatest proportion of all taxation these days is spent on education. That man will be paying completely for his child's education if he sends his child to an expensive private school. That is the Government's idea of justice today. We all would agree with the principle that in the scale of taxation there should be, as far as is possible, an equation of incomes. Some allowances must be made, surely, for those who are prepared to strive harder to get into the higher tax groups. But should we carry this principle through the entire ramification of everything we do? If that happens we will ultimately kill incentive to improve one's position, and nobody will want to work any harder. 1 am only illustrating the differences that could occur if these sums are to be tax deductible but we do not know the situation. Apparently the Minister for Social Security does not propose to tell us. He has had a direct opportunity to answer a question so that we would know precisely what this health scheme is going to cost and so that we could compare the statement that he has made to the Press, to the people of the country at large, that 3 out of 4 people will be better off even in the case of families where the wife is working. We cannot find out from him one of the basic essentials which would enable us to make a comparison. Let us look at the table that the Minister has prepared.


Senator Greenwood - Do you think that it was a calculated evasion?


Senator LITTLE - Well, we can come to no other conclusion when the question was so simple. It was either the action of an enormously arrogant man who refuses to share his secrets about these questions with the people who have to pay- all that we are after is an explanation to the people who have to pay- or he does not know his job as a Minister in the Government and as the man responsible to answer questions to the people. Members of this Parliament ask these questions but they represent the people. Really, it is the people who are asking the questions.

Let us look at the case of a man with a wife who is working. Let us assume that this man receives $5,000 a year and pays $70 to his hospital benefits fund. Let us forget about whether it is tax deductible or not. Everything that has been said about the method of collecting the tax seems to indicate that it will not be deductible. Let us assume that that man's wife is working and receiving a modest salary for female labour these days. We know that the position of women is to be elevated and that there is to be equal pay for the sexes but leave that matter aside for the purpose of this calculation. Let us assume that she gets $60 a week or $3,120 a year. She will pay $386 in tax in a year. Her hospital benefits contribution will be $42. If you add that $42 to the $70 that her husband on $5,000 a year is paying, for their hospital coverage they will pay $112 a year. If they want anything above the basic public ward treatment and so on they will have to insure themselves over and above that. It also seems to be a secret as to whether that additional insurance will be tax deductible or not.


Senator Greenwood - Any prudent person would insure in terms of what is available.


Senator LITTLE -That is a matter for the people themselves. Let us consider again the case of the man in the higher income group to which I referred before, the man with an income of $20,000 who is paying tax at a rate of 60c in the dollar. If that person's contribution of $150 for hospital benefits coverage is not tax deductible then it is a lie to tell him that that is all he will pay under the new scheme because he will not pay only $150. In effect he will lose 60c in every dollar because he is no longer able to claim the contributions as tax deductible. The actual cost to him under the new scheme will be about $250.I believe this is what the people want to know. It is what the Senate and Government supporters want to know so that they can explain the position to their constituents. If I cannot get the answers, can honourable senators opposite get them.


Senator Donald Cameron - We know them and so do you.


Senator LITTLE - If you know why are you keeping them secret from the people. If you know you ought to be telling the people.


Senator Donald Cameron - How do you know?


Senator LITTLE - I do not know. 1 have worked out the figures. I have not heard them explained by your Minister or by any other honourable senator opposite. I ask honourable senators to tell me where they have been explained.


Senator McAuliffe - Wait until the Bill comes in.


Senator LITTLE - Tell me on what page of the White Paper this is explained. This document is supposed to tell us all about it. There is no explanation of these figures in it and honourable senators opposite know this.


Senator McLaren - The Bill is not in that White Paper.


Senator LITTLE - Of course it is not. But this document is supposed to explain it to everybody and tell us what to expect. Are we not to be told the answers to these questions when we ask them in this Parliament? Now that you are in Government are questions as simple as this to answer with the knowledge that Ministers must have not to be answered by them? If you support that you will regret it the day you revert to the Opposition benches. If you maintain this cavalier attitude to questions asked by the people you will again form the Opposition. If this is the sort of treatment that questions on notice are going to receive it is easy to understand how dissatisfied honourable senators must become with answers that are incomplete to questions without notice. There is at least some justification for a Minister not being able accurately and completely to inform the Senate on questions that are asked without notice. But in relation to a question on notice, I say that the answer received by me this morning was an insult to this Senate. I hope that the Minister has the courage to repair the damage to ensure that this Senate is informed on the intentions of the Government in respect of this aspect of the matter.







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