-I!) AUSTJAAL
PRIME MINISTER
FOR MEDIA 28 OCTOBER 1979
ELECTORATE TALK
DELIVERED BY THE TREASURER, THE HON. J. HOWARD, MP
This Government's commitment to tax reform remains absolute.
We have demonstrated that we are a government of lower taxes.
our radical restructuring of the tax scales the lowering
of those scales, our tax incentives to industry, the removal
of estate and gift duties, the removal of tax inequities,
and our f ight against tax avoidance unmatched by any other
government since Federation stand as irrefutable evidence
of our commitment to tax reform. That commitment is an ongoing one.
In Parliament this week I introduced legislation to raise the
retention allowance for private companies from 60 per cent to
per cent. This comes on top of the previous increase from
per cent to 60 per cent announced in the 1976-77 Budget.
It will mean that small and medium sized companies will be able to
retain more capital within their businesses which in turn will
create investment and jobs.
Small businesses are a vital part of Australian life and a source
of creativity and new ideas often not found in larger concerns.
We recognise the important part they play in our economy and we
have progressively taken steps to assist them in maintaining
adequate working capital.. The Government intends to increase
the sales tax exemption levels for small businesses..
The current levels of annual turnover above which a manufacturer
is required to pay sales tax are $ 1,000 for goods made exclusively
in the manufacturer's own home and $ 1,400 for goods made elsewhere.
These levels have become increasingly unrealistic. So the new
sales tax exemption level will now be based on an annual turnover
of $ 12,000 and the annual sales tax liability exemption will be
increased from $ 100 to $ 250. In deciding -to introduce these
changes the Government particularly had in mind the many people
engaged in handicrafts at home.
The Government is also progressively introducing other measures
to help personal income tax payers. These include the decision
to increase the provisional tax threshold from $ 400 to $ 1,000
which will free many thousands of taxpayers, particularly those
with small investments, and pensioners, from the annual provisional
tax payment. The Government has extended the exemption from sales
tax on equipment for the blind and the deaf to cover equipment
used by all. handicapped people. / 2
I
We have also taken action to remove an anomaly between the tax
deductibility of-gifts to certain religious funds. This means
that gifts to funds set up by Roman Catholic archdioceses for
religious instruction in government schools will now be tax
deductible. Australians are generous people. Their controbution to education
and to need wherever it may arise should be helped and encouraged
by any government.
We . Lnderstood quickly that the horror of Kampuchea had struck a
responsive chord in -the heart of all Australians. The Government
acted in send5ing-immediate help to the people of that country
and made private donations tofrhe Kampuchean Relief Appeal tax
deductible. In the rural sector, the Government has also recognised a number
of areas of special need. In the August Budget, a new iate of
depreciation for on-farm hay, grain and fodder storage facilities
was introduced. This decision was taken because of a heavy harvest
which found bulk storage facilities wanting in Australia's great
grain belts. More on-farm storage is needed to meet what could
be another good harvest next season. The move will, of course,
not only help to meet an immediate need but hopefully will
encourage the man-on-the-land to conserve fodder.
As you are all no doubt aware the tax surcharge imposed last
November will come off from the end of next month. This means
that for a person on average weekly earnings there will be an
additional $ 4.45 a week in take-home. pay.
The thrust of our policies is to lower the tax burden. This is
a cornerstone of Liberal philosophy which spells out a simple
message Australians must be given the capacity to determine
their own priorities.
We understand that higher taxes run counter to this belief; they
minimise individual freedom, and increase the Government's
direction over people's lives. Our political opponents stand
for big government, big spending, big def its and big taxes.
As Labor's economic spokesman, Mr Willis, has said, a Labor
government would be committed to a " mammoth task in rebuilding
the public sector.... in convincing the electorate that it should
pay a higher level of tax to enable us to do so". They are his
very own words. These words are a stark and telling reminder
of our basic difference in approach to government.
We reject Labor's high tax philosophy out of hand.
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