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Wednesday, 4 December 1974
Page: 3158

Senator CARRICK (New South Wales) - I suggest to the Senate that we take the Income Tax Assessment Bill (No. 2), the Income Tax (Bearer Debentures) Bill 1974, the Income Tax (International Agreements) Bill 1974 and the Estate Duty Assessment Bill 1974 in a cognate debate.

The DEPUTY PRESIDENT (Senator Webster)- Is leave granted? There being no objection, it is so ordered.

Senator CARRICK - The main Bill of these four is the Income Tax Assessment Bill (No. 2). I shall dispose of two of the Bills, the Income Tax (Bearer Debentures) Bill and the Income Tax (International Agreements) Bill in short time. The Opposition does not oppose the Income Tax (Bearer Debentures) Bill. It is a Bill which, as has been stated, sets out to increase the basic rate of tax payable by a company under section 126 of the Income Tax Assessment Act on interest paid on bearer debentures where the company does not disclose the names and addresses of the debenture holders to the Commissioner. It is an instrument to overcome tax avoidance and the Opposition will support that measure. The Income Tax (International Agreements) Bill is one that has two main aspects to it- a minor technical one which has been set out in the second reading speech and a substantial one which seeks to give the force of law to an agreement on double taxation with the Federal Republic of

Germany. I do not seek to add to the debate on what are self-evident measures.

As to the third Bill, which relates to estate duty assessment, the Opposition will move an amendment to add words to the motion that the Bill be now read a second time. I give notice that at the end of this cognate debate I will move:

At end of motion, add- but the Senate is of the opinion that the provisions of the Bill do not provide adequate relief to the taxation of deceased estates in a period of unprecedented inflation. '

I will not delay the Senate on the question of estate duties. The Senate itself has had in its hands over a period of time- in fact almost a year- the report of the Senate Standing Committee on Finance and Government Operations which deliberated on the matter of death duties. The Opposition draws attention to the dissenting report by 3 Opposition senators- Senator Lawrie, Senator Cotton and Senator Guilfoyle. I quote from that report:

(a)   we believe that death and like taxes in Australia have outlived the basic purpose for which they were originally intended and are now nothing more than inefficient and socially unacceptable revenue raising devices; and

(b)   the Australian Government for its part should vacate the field of collecting these duties because they are of themselves not productive of substantial amounts of revenue. In the context of Australian Government finance and revenue raising, we believe it should concentrate upon the larger areas of revenue raising and try thereby to make the total revenue raising scale less complicated and costly to collect.

That is an extract from the minority report on death duties. This Bill itself seeks to provide for a deduction of up to $35,000 in the assessment of duty payable on an estate where an interest in the matrimonial home passes to a surviving spouse. Any study of such a proposal today must be made not only with regard to inflation but also the suggestion by the Government- indeed the announcement by the Government- that it proposes in the autumn session to introduce a capital gains tax. The combination of the continuation of an estate duty and a capital gains tax could be thoroughly destructive of the property, however modest, of the overwhelming number of people in the community and to that extent the Opposition has decided that it will move as an addition the amendment that I have read out. There has been debate on estate duty in this Senate and therefore I will not speak at length on the subject other than to say that once again we have the example of a tax which is striking at the ordinary family in Australia.

The main Bill in this debate and a Bill to which I propose to move an amendment to the motion that the Bill be now read a second time is the

Income Tax Assessment Bill (No. 2) 1974. That Bill is a complicated one. It provides for increased tax liabilities for the mining industry, the imposition of taxation on certain forms of fringe benefits, specific allowance of deductions for depreciation on child care facilities, a reduction of the limit on deductions for educational expenses, the deductibility of mortgage interest payments, a reduced level of the special deduction allowable to life assurance companies, a rebate of dependants' allowances for low income families, technical amendments of the principal Act with respect to dividends payable from Papua New Guinea and the relief for taxpayers in cases of hardship arising out of provisional tax for 1974-75.

So that my comments on each of those matters are put in perspective I give notice now that I intend on behalf of the Opposition to move to the motion that the Bill be now read a second time the following amendment:

At end of motion, add- but the Senate is of the opinion that the provisions of the Bill which reduce the limit on deductions for education expenses from $400 to $150 seriously restrict the freedom of choice which now exists in the Australian education system, are a contravention of the Government's election undertakings and will impose unwarranted burdens on parents with children attending both public and private schools and, further, that the Bill specifically:

(a)   inadequately compensates home buyers for the massive rise in housing loan interest rates and takes no account of those persons unable to purchase a home;

(b)   jeopardises the bonuses of thousands of small investors by increasing the tax liabilities of Australian life assurance companies, and

(c)   further erodes the confidence of the Australian mineral industry by reducing vital incentives to investment.'

From the substance of that addendum the Senate will understand that the Opposition regards seriously the impact of a substantial number of the measures as ingredients in this Income Tax Assessment Bill. Indeed the Leader of the Opposition (Mr Snedden) in another place has in respect of the first aspect I mentioned, that is, the reduction in the allowable deduction for education expenses from $400 to $ 1 50, made it clear that not only does the Opposition emphatically oppose that reduction but that when in government we will reverse that position. Quite emphatically we regard that as a very bad measure indeed, as we do the other matters to which we have drawn attention in our addendum. Putting this in perspective, this is another series of measures in the Government's Budget proposals.

Let me advert to the remarks of the Minister for Agriculture (Senator Wriedt) in his summary of the previous Bill in which he said that much of the woes that are this country are due to the lack of the power of the Commonwealth Government to control prices as well as wages. The Minister said that the Government did not have these powers. I want to say, because the Minister has said this tonight, that it is not true. The States have said to the Commonwealth Government: If you want a temporary transfer of those powers ask for them and we will give them to you', but the Government has not sought to do so. Equally I say as a personal view that the corporation power as decided by the High Court some 2 years ago undoubtedly gives to the Commonwealth Government the power to control prices and indeed wages in regard to corporations and if I am right- I believe a search ofthe Attorney-General's records will show that a former Solicitor-General has held that view- the Commonwealth Government has the power today to act on prices and wages in corporations and does not need any referendum and does not need any reference of power. In any case it can get a referendum of power from the States and it can buttress it if it wants to with the corporation power. I have not heard of any likelihood of challenge on this. So the failure of the Government to act in this matter -

Senator Cavanagh - On one section.

Senator CARRICK -It is a matter of alibi. If the Minister suggests by interjection that it is only a power over corporations all that would be left out of it would be those prices and wages that are for services and not indeed produced by corporations. Indeed it would be an enormous part of the community. But if indeed the Minister seeks to get the power over services he can get it by reference to the States. I merely interpolate that because this was the alibi chosen tonight by the Minister. Day by day the alibi varies. One moment it is the wicked multi-nationals, the next moment it is the profiteers and the next moment we have imported inflation. The current alibi is: We would have controlled these things but you did not give us the powers. The Government can get those powers by reference if it asks for them. The Government in fact, in my view, has those powers.

But the popular sport of the Government over the years has been the pursuit of the public companies, whether multi-nationals or Australian, and the pursuit of them in terms of their profits. The Government undoubtedly held the view that profits were some dirty thing, although it was never loath in terms of company tax to draw enormously on profits and in terms of dividends to draw on personal income tax. Every $1 of profit made in this community by any company, whether multi-national or Australian, was returning to this Government and former governments some 75c to 80c in taxation. Indeed, no government in this community could run without a healthy profitability of companies. The idea of making profit a bogy is absolute nonsense. A substantial part of the Budget of $16 billion comes from company tax, and that company tax was 47c and will be 45c in every $ 1 of profit. The remainder of that $1 is taxed or the dividends are ploughed back as capital. If one analyses the profit one would find that every Australian has a vested interest in a company making a reasonable level of profit so that the profit can be ploughed back either in tax or capital for the company itself.

The whole hatred of free enterprise was tonight demonstrated by Senator Walsh. We had a generation of such vitriol, such bile, here tonight when Senator Walsh showed the doctrinaire socialist's 19th century hatred of the ordinary enterprise of ordinary Australians, and of all those values that the Australian people have cherished and have used to build Australia. I refer to the small people of Australia, to those many thousands of companies to which I referred when I said that 80 per cent of all the enterprises in Australia employ 50 people or less -

Senator McLaren - What about the other 20 per cent?

Senator CARRICK - The honourable senator says: 'What about the other 20 per cent?' I am quite proud to have big public companies in this country. If they are here any government with any sense of responsibility can lay down whatever controls it likes. If the public companies find disfavour in Senator McLaren's eyes or in the eyes of any member of the Government, the Government itself has that total corporation power- that cannot be argued- so that if" there is a mote it is in the eyes of the Government. Suddenly the Government has found some merit in companies except, presumably, in mining companies. But in the last year or two, because of a need for election propaganda, there has been spilled out the bile, the hatred against the private or public company in Australia, especially the mining company and in particular the multinational.

One by one the shibboleths of 1972 are now disappearing. One by one the very things of which the Labor Party built its ship are now collapsing around it in a tidal wave of revulsion. All the values that the Labor Party ever announced are falling around it. Let me recite them. The Labor Party said: ' We are a Party of full employment'. It now has the greatest unemployment since the great depression of the 1930s. The Labor Party said: 'We are a Party that believes in reducing inflation. We will reduce inflation below the 4.7 per cent of 1972'. It is now the Party which has created the greatest inflation ever in the history of this country. The Labor Party said: 'We are the Party that believes in low interest rates. We believe in 2 per cent, 3 per cent or 4 per cent'. Now the Government is mouthing 15 per cent, 16 per cent and 19 per cent. The Labor Party said: 'We are the Party that will stop strikes. You will have no strikes because we understand unions'. Now the Labor Party has the greatest strikes in history.

The Labor Party said: 'We are the party that believes in full employment in the manufacturing industry with jobs for everyone. We are the Party to protect the industries'. This once great Labor Party was the great protectionist party of Australia. It is now Whelan the Wrecker. It is now the demolition expert in Australia. The traditionalists of the Labor Party, the Chifleys and the Evatts, would turn in their graves looking at the across-the-board tariff cuts. Members of the Labor Party are the people who have one by one demolished every value. The Labor Party has said: 'We are going to have a surplus budget. We must, otherwise we would create inflation. We are not going to cut tax because that would be vandalism. We are going to keep a 33 per cent retention of overseas funds because we will not let in a flood of investment. We will reduce Government expenditure because a burst of public expenditure would be wrong'. Every single thing that the Labor Party stood upon in the last 2 years is now being demolished around it, except one thing: its hatred, a positive hatred, of companies and mining companies. The Labor Party went to the people of Australia and said: These mining companies are getting away with blue murder. They are making great profits and are not being taxed on them. We will, of course, go in and tax them.

Senator Mulvihill - Tell us about their pollution record.

Senator CARRICK - The only pollution record that has been created is the pollution of noise by Senator Mulvihill and his colleagues.

Senator Mulvihill - You are a stooge for the Shell oil company which polluted the Parramatta

River and your Government did nothing about it.

Senator CARRICK - The technique of diversion is an old and superficial one. Let us keep quite clearly to what the Bill is about. Primarily it is an attempt to weaken and even destroy the mining companies by attacking their profitability. Those who are trying to get great enterprises in South Australia should go to Western Australia and look at the great mining companies which have built an infrastructure for Australia worth thousands of millions of dollars. They have built the Port of Dampier, the towns of Mount Tom Price and Paraburdoo. They have built thousands of homes. They have built schools, roads, bridges and train lines. They have spent thousands of millions of dollars on assets for the people of Australia. These cannot be taken away. You cannot take away the towns of Mount Tom Price or Paraburdoo except by the destructive policies of the Labor Party. You cannot take away the port of Dampier or the 200-mile railway line except by the destructive efforts of the Labor Party. They are assets built out of the profits of mining companies, put there in perpetuity for the people of Australia.

I for one go on record as emphatically commending those companies for the job they have done. I have been amongst them. I have seen the first class conditions of pay and amenities that they create for their workers. I have seen the great wealth that they have turned for the people of Australia in terms of wages, in terms of taxation and in terms of assets. I for one reject entirely the continuous attacks by the Australian Labor Party on the mining companies. Let this be quite clear: If this country is to get back to full creation of wealth for all- and the creation of wealth rather than the distribution of wealth is the challenge for us- then 2 great industries will create that wealth. One is agriculture industry and the other is mining. The Minister said that the Opposition had wrongly pictured Mr Connor as wanting to nationalise mining and that he had shown in terms of uranium that he would go into partnership with free enterprise. The simple fact is that we misenterpreted nothing. We took the words that he said and we used them. The fact that he has been forced into a situation is a matter for him and not for us.

Debate interrupted.

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