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PRIME MINISTER

FOR MEDIA: .  .  .  .  SUNDAY 9 MARCH 19 80

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, arid 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 level at which tax begins - increases from $3,893 to $4,033. All taxpayers will benefit as a result. A taxpayer ori 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.

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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 rates, 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. .  .

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