EMBARGO: 5: 00pm
FOR MEDIA SUNDAY, OCTOBER 3 1982
ELECTORATE TALK
The significant tax cuts announced in the budget would not
have been possible had the Government not taken successful
action against contrived and artifical tax avoidance and
evasion schemes. Those tax cuts will be of very great benefit
to all Australians, and in particular, to families.
From 1 November, Australians will be able to earn $ 400
more before any taxation is levied, raising the tax free
threshold-to $ 4,595. In addition, the standard rate of
income tax, that is, the rate of tax that most people pay
on incomes above $ 4,595, is to be cut from 32 cents in the
dollar to 30 cents in the dollar. And the income level at
which the 46 cents in the dollar tax rate applies to each
additional dollar is t. be. increased 1 from just under $ 18, 000 -to
$ 19,500. This will make sure that those on average weekly
earnings will not have to pay more than 30 cents in the
dollar, over the year.
Those personal income tax benefits will be supplemented
significantly by the introduction of a tax rebate on housing
mortgage Interest payments of over 10% on a principal home.
This measure will apply to the first $ 60,000 of a housing
loan. It will be available to all Austkalians paying off
a house, not just people who have bought their first home
in the last five years and who are already being helped by
the housing measures we introduced last March.
In addition, single income families with children will have
their tax payments further reduced as a * result of more
generous spouse rebates and sole parent .* rebates, and all
families will be helped by an increase in family allowances.
These initiatives will be worth $ 17 to $ 18 a week for a single
income Australian family earning $ 300 a week with two children,
and a mortgage of say, $ 25,000. That is a fairly typical situation.
That is a considerable increase in spending power and is the
equivalent of a before tax pay rise of $ 25 or $ 26. a week.
On top of all this, small investors will be helped by a tax
rebate at the standard rate of tax on up to $ 1,000 of
dividends for resident companies. This is the first time this
tax concession has been introduced and it is an important
initiative to help businesses as well as Australian investors.
All this is going to help all Australians enormously at a time
when help is most needed. ./ 2
-2
This sort of budget would not have been possible had we
not shown great resolve over recent years to 5taimp out
tax avoidance and evasion schemes. And more recently,
. determination through legislation we have introduced
into Parliament to recover company income taxes owing
to vs but evaded by bottom-of-the-harbour schemes.
For the first time in many years, the Commissioner of
Taxation said it will not be necessary to make allowance
in tax revenue estimates in the budget for revenue loss
through tax avoidance.
Putting aside the extra revenue we received from action
against tax avoidance and tax evasion, tax collections
will be lower in real terms this year, in larle part
because of the tax cuts. For several years, there has
been a fiercely fought contest between those few people
who have evaded and avoided pay/ ing -taxes, and the Governm~ ent,
which is determined that all Australians will pay their fair
share of the tax burde-n. The Government is now winning that
contest. A responsible govern-mentL which represents all Australians
must act with total determination to stamp out practices
such as bo-ttom-of-the-harbour schemes and to recover what
is due. This is exactly what the Government has done, and
as a result, taxpayers generally will be starting to feel
the benefits because the tax cuts we have introduced in
the laut budget will flow through to tax payers generally
from November 1 this year. This would not have been possible
to the same extent if if had not been for the action that
John Howard has taken over the last few years in relation
to tax avoidance and tax evasion.