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Thursday, 31 March 1966

Mr TURNBULL (Mallee) .- I want to refer to a question I asked in this Parliament this morning regarding valuation of land for estate duty purposes. I said I had investigated the position and found that Commonwealth valuations of rural properties in Victoria, for purposes of probate or estate duty, are based almost entirely on State Government valuations. The Minister agreed with me on that point. I pointed out to him that Victorian Government valuations are based chiefly on land sales in the particular areas, rather than on the productive value of the holdings concerned. I asked him to make an investigation with a view to giving a clear lead in rectifying the anomaly associated with this system. I have only a few minutes available to me and cannot go fully into the details, but I may be able to point out one or two anomalies that occur in the process of making valuations for estate duty on the basis of land sales.

There are all sorts of reasons why land sells at high prices. A man occupying a property may find the adjoining property coming on the market. He may want to buy that property for his son and he may say to himself: "I can buy this for my son and I can work the two properties pretty well with the plant I have at present ". Such a man may pay a price which represents more than the land is really worth to anyone else. Then there are directors or owners of big companies, or perhaps doctors or dentists or other professional men who have amassed a lot of money and who want to avoid as much taxation as possible. These people frequently buy rural land that needs improvement and they then spend money in general clearing and preparing the land for crops. In the year in which they have such improvements made they get the advantage of full taxation deductions for the money they spend. They have large incomes and in some cases their taxation deductions are quite considerable. Other people who want to buy such land may have to put all their available money into the purchase of it and the provision of machinery to work it. They then have little income at all for quite a while and so enjoy only small taxation deductions. The logical conclusion is that the man with all the money, sometimes referred to as the Collins Street farmer, is able to pay a good deal more per acre than the working farmer who would live on the property and not be simply an absentee owner.

Suppose a valuation is required of a property in a certain area. The valuer studies the area within 10, 20 or more miles radius of the property in question. He finds that land in that area has been bringing unrealistic prices, and perhaps those prices are high and have been paid for reasons such as those I have just outlined, and which should not be taken into account in making a valuation. It is for this reason that I asked my question of the Minister. Although I have not had time to study his reply closely, I must say that I do not feel at all satisfied with it. That is whyI am raising the matter again in the Parliament. I know that it has engaged the attention of property owners recently, because they ; gain no satisfaction from realising that if land is sold in their districts for more than it is worth, the effect will be reflected later in probate duties levied on their own estates.

Mr DEPUTY SPEAKER (Mr Lucock - Order! It is now 15 minutes to 1 o'clock and in accordance with Standing Order No. 106 the debate is interrupted and I put the question -

That grievances be noted.

Question resolved in the affirmative.

Sitting suspended from 12.45 to 2.15 p.m.

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