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Tuesday, 17 February 1987
Page: 55

(Question No. 3901)

Mr Wright asked the Treasurer, upon notice, on 2 May 1986:

(1) Has his attention been drawn to claims by the Queensland Government that the federal Government should subsidise interest rates on existing home mortgages with building societies.

(2) What control does the federal Government have over the interest rates charged by building societies in Australia.

(3) What control do State Governments have over building society interest rates.

(4) What has been the growth in building society deposits in each of the last 5 years.

(5) What tax are building societies required to pay on profits made.

Mr Keating —The answer to the honourable member's question is as follows:

(1) Yes.

(2) None.

(3) I refer the honourable member to my reply to a similar question asked by the honourable member for Fraser (Question No. 3785), which was published at page 3186 of Hansard on 14 November 1986.

(4) The estimated 12-months-to rate of growth of building society deposits (borrowings from residents excluding related corporations) over the last five financial years is as follows:

June 1982-10.5%

June 1983-12.0%

June 1984-16.3%

June 1985-3.9%; (15.8%)

June 1986-8.0%; (12.6%)

The figures in brackets are the estimated growth rates calculated on a constant population of societies-that is, after adjustment for the conversion of N.S.W. Building Society Limited to Advance Bank Australia Limited from 1 June 1985; National Mutual Permanent Building Society to National Mutual Royal Savings Bank Limited from 26 February 1986; and Civic Co-operative Permanent Building Society Limited to Civic Advance Bank Limited from 1 June 1986.

(5) Building societies taxable income is subject to tax at the company tax rate on the same basis as other companies except to the extent that they meet the relevant tests in the Income Tax Assessment Act for treatment as a co-operative, in which case a co-operative society can deduct from its assessable income distributions to shareholders that are rebates or bonuses based on business done with shareholders and any dividends paid to shareholders on non-withdrawable share capital.