FOR MEDIA: SUNDAY 9 MARCH 1980
ELECTORATE TALK
The Government's determination to provide Australia with responsible
economic management and lower taxes has been strongly
reaffirmed. The decisions announced by Mr. Howard in Parliament
last Thursday demonstrate in the clearest terms that our fight against
inflation is still a first priority and that we recognise the
need for tax relief. We are committed to reducing taxes to the
extent that is economically responsible.
We have taken two key tax decisions. Within the scope available
we felt that benefits should be concentrated on single income
families, and particularly those on low incomes. Therefore from
July 1, the rebate for a dependent spouse will be increased by
$ 203 a year from $ 597 to $ 800. There will also be equivalent
percentage increases in the various other rebates the daughter/
housekeeper, housekeeper, sole parent, invalid relative and parent
rebates. For example, the sole parent rebate will rise from $ 417
to $ 559 and the invalid relative rebate from $ 270 to $ 362. well
over 2 million families will benefit as a result of these changes
in rebates.
The second major tax decision is to apply 50 per cent tax indexation
for personal tax scales. This means that the tax threshold that
is the leveil at which tax begins increases from $ 3,893 to $ 4,033.
P. 11 taxpayers will benefit as a result. A taxpayer on the standard
rate with a dependent spouse will be $ 4.70 a week better as a
result of the changes. When allowance is made for the higher
rebates the effective threshold for a taxpayer with a dependent
spouse will increase from $ 5,698 to $ 6,533, and for a sole parent
from $ 5,153 to $ 5,779. The taxpayer without dependents will
benefit less, because we wished to help families most. However,
a taxpayer without dependents on the standard rate of tax will
still receive a tax cut of 85 cents a week.
The Treasurer estimates that the new tax measures will take more
than $ 600 million from our revenues so it is a significant
decision. And the major benefit by far the largest percentage
decrease in tax paid will go to Australia's single income families,
and particularly to those with lower incomes. Those families with
the lowest incomes will receive the greatest proportionate reduction
in tax. That decision, that bias in favour of single income
families was quite deliberate, because at the moment there is a
bias against them. We therefore felt it right to increase spouse
rebates so that single income families benefited by most. The
introduction of the new tax measures from July 1 and not at an
earlier date is consistent with prudent economic management. .2
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The Government decided to use the estimated additional $ 340
million from crude oil revenues this financial year to reduce
the budget deficit. A lower deficit is a key weapon in lowering
inflationary pressures. It will as a result help to keep down
price rises and interest rates. Because of our responsible
economic policies we have had only a slight rise in interest
rates compared with other countries. Interest rates in the United
States have risen by 5 per cent since the middle of last year
and in the United Kingdom by 3 per cent. Interest rateg in
Australia have risen by around 1 per cent.
Australia as a trading nation cannot totally isolate itself
from overseas problems. But what we can do and are doing is
to make sure that our own economy is strong and well run, and
that we retain the competitive edge. To do this it is essential
that we maintain indeed strengthen the downward pressure on
inflation. The benefits will show in increased employment and
economic prosperity.
Employment has risen by 2.3 per cent over the last year and
economic growth has been faster than we expected at the time of
the last budget. For the well-being of workers, industries,
farming communities and for the security of all Australians on
fixed incomes we can never slacken in this resolve. In essence,
Mr. Howard's statement demonstrates our commitment to build on our
hard won economic gains and to ease the tax burden on those most
in need. 000---