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Tuesday, 29 September 1942

Mr CALWELL (Melbourne) . - Under this clause gifts made by companies for charitable purposes may be deducted for income tax purposes during this financial year and next financial year, but such gifts made by individuals may be deducted this financial year but not for next financial year.

Mr Chifley - In the next financial year a rebate will be allowed to individuals. A deduction from income will not be allowed except to companies.

Mr CALWELL - That is so. Representations on this subject have been made to me by many charitable institutions. The Children's Hospital, the Women's Hospital, and the Queen Victoria Hospital are three big Melbourne institutions which will be affected, and the authorities of each of them have written to me on the subject. They fear that their finances will be seriously affected. I understand that the Treasurer (Mt. Chifley) is convening a conference in Melbourne at an early date to explain the exact position to the representatives of hospitals. I commend that step, but I trust that the conference will be truly representative. Representatives of all charitable institutions should be invited to attend.

Mr Holt - Of what use is it merely to explain the position to them?

Mr CALWELL - Many of them do not understand what is being done. They fear that no deduction will be allowable in respect to gifts to .hospitals. They have had only a garbled account of the Government's intentions. I feel that the Treasurer could well have left this subject alone. Donations to charities and educational institutions should he regarded with the utmost sympathy, for the work that these institutions do is of primary importance to the nation. No one will say that we have enough hospitals in Australia. No one will say that Australia leads the world in the social sciences. Whilst that may have been true at one time, it is no longer true. It is only because we have recently passed legislation dealing with child endowment and widows' pensions, and have liberalized our invalid and oldage pensions and certain other social service measures, that we can claim to have recaptured some measure of progressive outlook. Probably, in the future the State governments will not spend as much as they have spent in the past on social services, owing to the enforcement of our uniform income tax legislation, and, ultimately, the Commonwealth Government may have to assume complete control of social services. We should at all times do our utmost to encourage gifts to hospitals and educational institutions.

We cannot claim to occupy a leading place in relation to education. In some States children of thirteen or fourteen years of age are being chased into factories, and far too many permits are issued in this, regard. The importance of scholarships to children of working class parents to enable them to pursue their studies cannot be overestimated. Without such help many children would be unable to continue their studies at the secondary schools and at the universities. It would be difficult to say how many men and women owe their present position in life to the help they received from scholarships and bursaries. We shall render no service to the general community if we do anything to discourage gifts for those purposes. The Melbourne University is not so richly endowed as is the Sydney University, and in both universities many faculties are entirely missing. Our contact with some of the young Americans in our midst to-day reveals the value of a schoolleaving age of sixteen or seventeen years. I hope that the Treasurer will give early consideration to the desirability of altering the provisions in our income tax law which tend to discourage gifts for educational and charitable purposes, and of enacting provisions which will recoup such institutions for losses that they may have sustained owing to the inclusion of these provisions in the law. If more money be needed by the Government, it could be obtained from State sources. We all know that the surpluses of State governments are much greater than have been disclosed. We have been told that the combined surpluses of the States for the last financial year total £3,000,000, whereas, in fact, they amounted to about £6,000,000. The Commonwealth should draw upon the undisclosed surplus money, and the States would not suffer. As a matter of fact, the State governments to-day do not know what to do with their swollen revenues. They cannot spend the money they are receiving, because the Commonwealth Government is using all the labour and nearly all the material available. Apparently, the Commonwealth is afraid to tackle the States on this issue, and is prepared to allow them to continue to disguise their financial position. We are well aware that various State governments are paying into trust funds and in other ways trying to dispose, for the time being, of money which they cannot spend. No doubt, by the end of this financial year, they will have exhausted their ingenuity in this regard, and I suggest, therefore, that, instead of the Treasurer hampering the work of educational and charitable institutions by including in his taxation machinery provisions such as that now before us, he should call upon the States to disgorge some of the money which they cannot spend. Strong public comment is being made upon the action of the Government in eliminating the provision for rebates or deductions in respect of gifts to charitable and educational institutions. I hope that before the next income tax assessment bill is introduced the whole matter will have been re-examined with a view to liberalizing these provisions. I hope also that before the Treasurer introduces his next budget - and, of course, he will introduce another budget - he will have found it possible to frame his financial programme generally on more radical lines.

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