U5' 3 HALIA
FOR PRESS 26 NOVEMBER 1977
For the past week the leaders of the Labor Party have failed to
tell the public in clear terms whether they would protect people
from having their tax increased simply because of inflation.
They have been desperately confused and have repeatedly contradicted
one another.
The Shadow Treasurer, Mr. Hurford, was expected -to give the
definitive statement by the end of the week. He failed to do
SO. He cancelled his press conference.
It is quite clear that -the Labor Party would abolish what is called
tax indexation. In other words, they would if they were in office,
greatly increase the personal income tax the public must pay. They
would3 not do t-his in an open way through legislation, but by stealth.
That is, as your income increased through inflation ( which their
speniding policies would encourage) they would take a higher
proportion of it in tax.
Let ire demonstrate how important it is to maintain tax indexation.
As a result of -the two indexation adjustments, my Government has
already made in 1976 and 1977, the person on average weekly
earnings of about $ 200 a week with dependent spouse is now paying
$ 9 a week Less tax than someone who was on the same income in
1975/ 76. The person on the same income without dependent spouse
is now paying $ 6 a week less. Labor propose to do away with the
projection which allows such tax savings.
The unstated reason why Labor do not want to protect taxpayers
against inflation is that Mr. Whitlam wants the money to pay for
his big spending programme. This is precisely what he did in
1972/ 75. That is why my Government introduced tax indexation
to try to st1--op it happening again.
But the posi--* z-even worse than this. The Labor tax grab knows
no bounds. Whitlam, Mr. Hayden and Mr. Hurford would repeal
the laws xv~.-rovide for tax cuts -from February next year.
Mr. Hurf' 7o-r in justification of this plan that these tax
cuts aive S--nificant benefit only to the wealthy. This is not
-true. / In the
2
In the first place, the tax cut provides for 225,000 taxpayers,
or 4.1 per cent of all taxpayers, on low incomes, to pay no
tax. Labor proposes to reimpose tax on these low income
earners. Secondly, the February tax cut provides for substantial tax
savings throughout the income ranges, totalling $ 400 million
this year and $ 1,470 million next year. Labor want to take it
all back to pay for their great plans.
To show there has been no redistribution of the tax burden, I
will be publishing information next week on tis matter.
This shows tat the proportion of total personal tax which
is payable by taxpayers on higher incomes is not significantly
changed by the new tax arrangements which will operate from
February 1978.
My Government does believe in redistribution from the Government
sector to the people. The Labor Party want to redistribute
income back to the Government. It is the central part in
their thinking. That is why they are planning a huge increase
in personal income tax. I