E. O. E. PROOF ONLY
CLOSING REMARKS NATIONAL TAXATION SUMMIT 4 JULY 1985
Ladies and Gentlemen, what I would like to do in opening up
what I hope will be a very fruitful session is to indicate
as I see it, the areas where I think it is fair to say
there is total agreement that has emerged out of the
proceedings of the Summit to this date. And from that to
move to indicate what we perceive are perhaps what could be
described as areas of majority agreement not total. To
indicate on that basis without any concept of putting to you
a package because I'm not in a position to do that, but to
indicate on the basis of our response to what we'*
perceive to be majority positions, how the Government could
most usefully now proceed on the basis of the nine principlesparticularly
principle nine to discharge its ultimate
obligation of the package of reform.
In those terms then, ladies and gentlemen, let me say that I
see these significant areas of-what I think could be described
as universal agreement having been reached at the Summit to
this point.
Firstly, and most obviously, and certainly ultimately most
importantly, is there is universal agreement that the
existing inherited system inherited by this Government
that that system has disintegrated and that there is need for
reform of that system. As I discern it, every speakar in
this Summit is at one on that point.
Secondly, I believe that there is general agreement that the
principles that the Government enunciated as being
appropriate to apply in achieving reform are the correct ones.
That is the principles of equity, efficiency and greater
simplicity. Let me say in respect of the second of
efficiency, and I -say this insofar as some representatives
of the business community have said, and I believe rightly,
that in talking of efficiency your concerns should not
simply be of efficiency from the point of view of collection.
But also, as the White Paper itself says when it is talking
about efficiency, you are tal] cing about the best allocation
of resources. And in that sense the economic impact of
tax reform measures need to be taken into account and included
with that of course, necessarily, the economic impact of any
suggested changes in the business tax area.
But, I repeat, the second area of universal agreement, I
think, is the appropriate principles to be applied.
Thirdly, there has been no disagreement, as of course
there could be no disagreement, in the proposition that in
the introduction of any tax reform package the least
privileged in the community the under-privileged must
not only not be disadvantaged, but as far as possible their
position be improved. I have not discerned any dissension
from that proposition. And that applies whether the
under-privileged be in employment or in the social welfare
system and I believe that that universal agreement
particularly applied to the lower income areas of our
community with families in particular. And let me say
this in asserting that that is a universal position out of this
Summit that I believe equally there has been a total response
to the proposition I put in the opening of this Summit that
it would be appropriate that in any tax reform package that
is brought to satisfy the community that that third principle
that I have referred of the non-disadvantaging of the least
priveleged in our community. There has been, I think, universal
response to my proposition about the establishment of a
monitoring authority. And I can say to you that we will
establish such an authority. But it gives me very much
pleasure to say that in doing that I have already had some
discussion and that Bishop Peter Hollingworth has responded
positively to my invitation to be the chairman of such a
monitoring authority. An acceptance which I think would
again meet with universal approval.
The fifth principle to which I think there is again general
agreement is that one of the major objectives of tax reform
must be reduction of marginal rates for a whole range of reasons
which are set out in the White Paper and which I believe there
has been no dissension.
And let me also say sixthly, that I think there has been
virtual unanimous agreement to the proposition of the
establishment of a national identification card. It is
true that some people, properly, have referred to the
necessity in any such move to ensure that legitimate
civil libertarian considerations should be taken into
acount. And I give not only the Summit, but the people
of Australia, the unqualified assurance, that in moving
to give effect to that area of general agreement in the
Summit those legi~ timate' considerations will be fully taken
into account.
Now ladies and gentlemen, having said that there are those
important six areas of universal agreement, of course, it
is then appropriate that one should say that beyond that
there is not universal agreement. That it is clear that
there has been qualification opposition, to various aspects
of the proposals that have been put forward. And that is as
it should be. Because from the initiation of this exercise,
the ninth principle has not been there because nine is one
more than eight, l ut because the ninth and final principle
in one sense, is ultimately the most important principle that
any government concerned with trying to get community
involvement in decision-making should attach importance to.
And clearly in terms of principle nine it is not possible to
say that there is broad community support for what was put as
the preferred Government option. We acknowledge that. And
it is appropriate that, straightforwardly without equivocation,
on behalf of the Government I say that. We discharge the
obligation that we believed we had, we put that. And it has
been an option around which useful discussion, productive
discussion has taken place.
Having said that,' it has beenthe responsibility of Government,
particularly the responsibility of myself and the Treasurer,
then to try and distill from the contributions in this Summit
where it is possible to try and distinguish what I call majority
support for certain broad positions. And let me say what I
discern as to broad areas where I think there has been a
majority attitude emerge.
Firstly, while as I say, there has not been acceptance in
terms of principle nine of the Government's preferred option,
it is nevertheless true that listening to what has been said,
reading what has been said, that there is majority support for
the position that it is appropriate for government to look at
the possibility of an extension of the indirect tax base. Not
in terms of option C, but that it is appropriate to look at the
extension of the indirect. And there is a clear majority position
for that I believe. Also, without universality, there has been fran
many quarters, I think reflecting majority position, the view
expressed-that it is appropriate for government in the process
now of discharging its obligation, to move to the creation of
a final patkage, it would be appropriate for government to look
at the question of the threshold. As to whether it may not
be appropriate to look at the abolition of that, and within
that look at the whole question of dependent spouse rebates,
and family allowances. Now obviously, no-one in addressing
themselves to tha~ t issue has either said or implied that there
would not be legitimate concerns and problems that government
would have to address if it was going to look at that as part
of an overall tax reform. Because it goes without saying
that there are problems, actual and potential there, and a
government drawing up a comprehensive total package of tax
reform, in looking at that would have to take account of
those difficulties, both conceptual and administrative. And
so that would be the case.
On that basis, I would say to the Summit that the Government
would proceed, at~ the conclusion of the Summit, to look at
the drawing up of a package which took those factors into
account, the two where I say there is majority support.
Going back to the question of the indirect, the extension
of the indirect tax base. It appears that there would be
support for a propos'ition of doing that by looking perhaps at
a reform of the wholesale tax base, the possible inclusion
of some elements in that not there now. But provided
that such reform and extension met the clear view of the Summit
that nothing be done in that process which would impose unacceptable
burdens on the leaLst privileged in the community.
And in association with that, the concept of a tax on, consumption
tax on services at the rate that has been talked about in the
preferred option., So that you would have the concept of an
extension of the indirect tax but in a way which clearly
excluded food and1 those elements like power, to go to heating.
Those sorts of things, which of themselves, would be unacceptably
regressive and presume to be not sufficiently compensable in
respect of the least privileged in the community.
So that is the sort of concept which it seems to us from
listening to what you have all1 had to sayprovides a majority
basis for looking at tax reform.
As to the area of' business tax and changes in a reform package
which would impinge in the business area. Let us say to you
that as we have said in the White Paper, we would see merit,
as has been said, in the concept of looking at the bringing
in of imputation, full imputationinto the tax in the company
area to deal with what has been this very long standing,
properly perceived problem of double taxation in regard to
company profits and dividends. And we would be looking at
that, and looking at it in terms of the associated question
of trying to bring the top personal rates towards a, an involved
adjusted company tax rate so that you would deal with those
problems which are associated with the divergence between those
two rates.
Now ladies and gentlemen, I believe in putting that to you I
have, I think, accurately distilled the general view of the Suninit.
I repeat in saying that we have full acknowledgement of
the areas where opposition has been expressed to particular
elements and to where qualifications or concern have been
expressed about areas that are thought worthy of investigation.
And I say that particularly in the area of looking at the
possible abolition of the threshold. Anyone that has referred
to that of course has been conscious of the fact that there
are problems'and issues that need to be taken into account in
that area. And of course they would be.
Now before, on that basis of introduction of this sess,-n,
inviting comments, there is one thing that I wish to say.
And to say clearly and without qualification of any sort.
And it is said in.. some sense because of some speculation,
observat"-ion, that may have been made. I believe that if
there is one th ' ing that I have left out of the area in which
there is universalsupport in this Summit, it is the role that
has been played in this whole process by Treasurer Paul Keating.
Now, I believe that, ( applause) it is clear from that response
that I have discerned the mood of the Summit accurately. Now
I simply want to say that the contribution that Paul Keating
has made to lifting the level of community debate, both
before and at this Summit, has been without parallel, and
without equal. And I want to say personally that in the
process that we've gone through from the beginning of this
exercise, and up to and through the Summit itself, that
no Prime Minister could have asked for better, closer,
more effective co-operation, than I have enjoyed with
Paul Keating. Thank you Paul. So the matter is now open
for discussion.