XN000022-1977-03-30 — Page 2

WEDNESDAY, MARCH 30, 1977

GOVT. URGED TO INCREASE SUPPLEMENTARY

PERSONAL TAX ALLOWANCE

****

THE PROPOSED SUPPLEMENTARY PERSONAL TAX ALLOWANCES

WHICH

FORMED PART OF THE FINANCIAL SECRETARY'S PACKAGE OF TAX CONCESSIONS

SHOULD BE INCREASED, THE HON. Q.W. LEE SAID TODAY.

ADDRESSING THE LEGISLATIVE COUNCIL DURING THE RESUMED BUDGET DEBATE, MR. LEE SAID IT WAS THE MAJORITY VIEW OF THE UNOFFICIAL MEMBERS THAT THE GOVERNMENT SHOULD CONSIDER INCREASING THE SUPPLEMENTARY ALLOWANCE FOR A SINGLE PERSON TO A LEVEL BETWEEN $3,500 AND $4,000, INSTEAD OF $2,500 AND THAT FOR A MARRIED COUPLE TO BETWEEN $7,000 AND $8,000, INSTEAD OF $5,000.

+ IF NEED BE, THE CLAW-BACK COULD BE INCREASED TO A SLIGHTLY HIGHER PERCENTAGE OF, SAY, 25 PER CENT, HE ADDED.

HOWEVER, MR. LEE POINTED OUT THAT MOST OF HIS UNOFFICIAL COLLEAGUES AGREED THAT THE PRESENT LEVEL OF BASIC ALLOWANCE WHICH STANDS AT $10,000 - SHOULD BE MAINTAINED.

HE TOLD THE COUNCIL THAT PUBLIC VIEWS HAD BEEN EXPRESSED THAT THE SUPPLEMENTARY ALLOWANCES WERE NOT MUCH OF AN IMPROVEMENT IN REAL TERMS, BASED ON THE ARGUMENT THAT THE GENERAL CONSUMER PRICE INDEX HAD ADVANCED BY SOME 37 PER CENT FROM AN AVERAGE OF 142.7 FOR THE 12 MONTHS ENDED MARCH 1973 TO AN AVERAGE OF 195.6 FOR THE 12 MONTHS ENDED DECEMBER 1976.

+ THIS IS CERTAINLY NOT AN INSIGNIFICANT RATE OF INFLATION AND IT IS DIFFICULT TO DISPOSE OF THIS ARGUMENT TOO LIGHTLY BECAUSE OF ITS EFFECT ON THE VALUE OF THE BASIC ALLOWANCES IN REAL TERMS,+ MR. LEE OBSERVED.

IN PROPOSING THE INCREASE IN THE SUPPLEMENTARY ALLOWANCES, MR. LEE NOTED THAT HIS UNOFFICIAL COLLEAGUES REALISED THAT THE MOST IMPORTANT FACTOR IN DECIDING THE QUANTUM OF A TAX-FREE ALLOWANCE WAS ITS EFFECT ON REVENUE YIELD.

+WE ALSO REALISE THAT TO FIX ITS LEVEL PURELY ON THE CURRENT COST OF LIVING COULD GIVE RISE TO SERIOUS AND COMPLICATED PROBLEMS.

+HOWEVER, WE HOPE IN CONSIDERING OUR SUGGESTION THAT GOVERNMENT WILL BEAR IN MIND THE WEIGHT OF INDIRECT TAXATION ON THE MIDDLE AND LOWER INCOME GROUPS,+ HE SAID.

MR. LEE SAID THE PUBLIC, ESPECIALLY THE LOWER INCOME GROUP, WERE PLEASED THAT THE FINANCIAL SECRETARY HAD PROPOSED SOME ADJUSTMENTS BY INTRODUCING A SUPPLEMENTARY ALLOWANCE, QUAL IF IED BY A CLAW-BACK PROVISION.

+THIS IS CERTAINLY A STEP IN THE RIGHT DIRECTION.+

A. DT