P79/ 37
AUS f'R. LIA
FOR PRESS 4 MARCH 1979
ELECTORATE TALK
All Australians want the opportunity to plan ahead and make
the most of their talents. We are a people that reject the
unnecessary intrusion of Government.
That is one reason I made it clear this week that the Coalition
Government was flatly opposed to the introduction of a Capital
Gains tax. This is a tax that would stifle incentive, stifle
development. A Capital Gains Tax would not only hurt large companies, but
would devastate hundreds of thousands of Australian farmers,
small businessmen, shop keepers and the like. It would cast
a blanket over initiative and enterprise.
Over the last few days the Australian Labor Party has reaffirmed
its commitment to introducing such a tax if given the chance.
The Leader of the Opposition repeated in the plainest terms
Labor: s determination to introduce such a confidence destroying
tax.
Apol-gezically, he says such a tax would not include many people.
He f gqets that tens of thousands of farmers alone with capital
stock, equipment, plant, land and the farm homestead itself,
would become instantly eligible for Labor's special Capital
Gains Tax. This would be a farmers tax.
The far-ming community and business, large and small, are now
just starting to get back on their feet after many lean years.
Yet " r H-avden wants to weigh in with the killer punch a tax
on = tal gain the very essence of a free enterprise society.
I do nc believe that the Leader of the Opposition can deny
categorically that no pensioner, no small businessman, no
householder or no owner of a farm under 100 acres would not
be affected by his Capital Gains Tax scheme.
A tax on capital is a tax on enterprise. It is a tax on job
creation. Taxing the income generated by capital is a fair
and proper means for government to raise money. But to tax
the capital itself is to launch a tax on employers in the
cities and on the land, and to strike at their ability to
ovide jobs.
2
It is a pity that Mr Hayden and Mr Willis, the ALP's Shadow
Treasurer who this week also called for a tax on capital,
failed to heed the advice of a former Labor Treasurer,
Mr Crean.
In 1974 Labor announced that it would introduce a Capital
Gains tax. Mr Crean could not say how much it would raise,
gave no estimate of the possible revenue, and admitted that
its introduction would be delayed because " There are many
complex technicalities involved and extensive anti-avoidance
provisions will be required." Eventually the whole misconceived
idea was abandoned.
Your Government has firmly rejected such a tax but the
Labor Party continues to espouse failed tired old policies
that almost wrecked Australia. They are still talking about
abandoni-g the investment allowance that has done so much to
help industry. They are still talking about a resources
rental tax and a tax on capital gains.
This is the kind of thinking and the kind of economic
management that killed off development of our mineral
resources and bought the search for oil and gas to a standstill.
They are the kind of policies that destroy initiative, enterprise,
investment and development. They are the kind of policies
Australia can do without.
Australia today is moving ahead with purpose and confidence.
Manufacturing industry is becoming competitive again, mining
investment is moving forward, oil exploration and development
is taking place because of the Government's crude oil pricing
policies. At the same time, this activity tbis confidence in the
Government's economic management is creating new and
permanent job opportunities for Australians. A return to
the Labcr recipe, to Labor's high taxes, would put us back
to square one.