XN000022-1981-02-25 — Page 32

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WEDNESDAY, FEBRUARY 25, 1981

1 EXPECT REVENUE COLLECTIONS TO BE MORE THAN SUFFICIENT TO FINANCE THIS EXPENDITURE AND SO I AM AGAIN BUDGETTING FOR A SUBSTANTIAL SURPLUS, THIS TIME OF NEARLY $8 000 MILLION WHICH WILL BE TO THE BENEFIT OF THE ECONOMY, FOR THE EFFECT WILL BE ANTI-

THIS INFLATIONARY, AND OUR RESERVES WILL BE FURTHER AUGMENTED. SURPLUS I AM BUDGETTING FOR IS AFTER DEDUCTING THE COST OF FIVE PROPOSED TAX CONCESSIONS WHICH I ANNOUNCED ON GROUNDS OF FISCAL EQUITY AND ON SOCIAL AND ECONOMIC GROUNDS. THESE FIVE CONCESSIONS WILL COST THE REVENUE $1 250 MILLION IN 1981-82.

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THE MAIN CONCESSION ANNOUNCED - IT IS REALLY A PACKAGE OF CONCESSIONS IS OF INTEREST TO SALARIES TAXPAYERS WHOSE PERSONAL ALLOWANCES ARE TO BE RAISED BY NO LESS THAN 50 PER CENT: FROM $15 000 TO $22 500 FOR A SINGLE PERSON- AND FROM $30 000 TO $45 000 FOR A MARRIED PERSON. THE ALLOWANCE FOR THE FIRST CHILD IS TO BE RAISED BY 40 PER CENT FROM $5 000 TO $7 000- AND FOR THE SECOND CHILD BY 25 PER CENT: FROM $4 000 TO $5 000- AND FOR A DEPENDENT PARENT BY 40 PER CENT: FROM $5 000 TO $7 000, THUS FOR EXAMPLE, A SINGLE MAN WITH TWO DEPENDENT PARENTS WILL NOW NOT ENTER THE TAX NET UNTIL HE IS EARNING $36 500 A YEAR AS OPPOSED TO $25 000 AT PRESENT AND IF HE IS EARNING, SAY, $72 000 A YEAR HE WILL PAY ONLY $4 100 IN TAX IN FUTURE, COMPARED WITH $6 750 AT PRESENT. AGAIN, A MARRIED MAN WITH TWO CHILDREN WILL NOW NOT ENTER THE TAX NET UNTIL HE IS EARNING MORE THAN $57 000 A YEAR, COMPARED WITH $39 000 AT PRESENT AND IF HE IS EARNING, SAY, $96 000 A YEAR HE WILL PAY ONLY $4 800 IN TAX IN FUTURE, COMPARED WITH 39 250 AT PRESENT. AT THE SAME TIME, NO FEWER THAN 140 000 PERSONS WILL NOT NOW BE INCLUDED IN THE TAX NET IN 1981-82 AND ALL BUT 18 000 OF THE 255 000 TAXPAYERS WHO WILL BE IN THE NET WILL BENEFIT FROM THESE NEW ALLOWANCES TO SOME EXTENT. I MIGHT ADD, FOR THE BENEFIT OF THOSE WHO THINK OUR SALARIES TAX SYSTEM FAVOURS THE BETTER OFF, MORE THAN HALF OF TOTAL SALARIES TAX COLLECTED WILL COME FROM THE 7 PER CENT OF TAXPAYERS ON THE STANDARD RATE OF 15 PER CENT - AS HAS ALWAYS BEEN THE CASE.

THE SECOND CONCESSION I ANNOUNCED WAS A REDUCTION OF THE RATE OF CORPORATION PROFITS TAX BY HALF A PERCENTAGE POINT TO THE ORIGINAL RATE OF 16-1/2 PER CENT SET IN 1975.

THE THIRD CONCESSION 1 ANNOUNCED INVOLVES A SIMPLIFICATION OF THE RATES OF DEPRECIATION ALLOWANCES FURTHER TO ENCOURAGE MANUFACTURERS TO RE-EQUIP AND UPGRADE THE IR PLANT AND EQUIPMENT. THE PRESENT FIVE RATES WILL BE RE-GROUPED UNDER THREE RATES OF 10 PER CENT, 20 PER CENT AND 30 PER CENT AND THE INITIAL ALLOWANCE WILL BE INCREASED FROM 25 PER CENT TO 35 PER CENT.

THE FOURTH CONCESSION ANNOUNCED WAS AN INCREASE IN THE LIMIT BELOW WHICH ESTATES ARE NOT LIABLE TO ESTATE DUTY FROM $600 000 TO $1 000 000.

FINALLY, I ANNOUNCED THAT THE LIMIT FOR THE FIXED CONCESSIONARY RATE OF STAMP DUTY OF $20 FOR CONVEYANCES OF LOW VALUE PROPERTIES IS TO BE LIFTED FROM $100 000 TO $250 000 AND THE LIMIT FOR THE CONCESSIONARY RATE OF DUTY OF 1 PER CENT IS TO BE LIFTED FROM $250 000 TO $500 000. TOGETHER THESE TWO CHANGES SHOULD BENEFIT SOME 48 000 PURCHASERS OF FLATS IN 1981-82.

/I COMODEL