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Wednesday, 20 May 1936

Senator E B JOHNSTON (Western Australia.) . - The film companies must do a marvellous business if their profits amount to 30 per cent, of their gross receipts.

Senator Collings - Nobody said thai.

Senator E B JOHNSTON - That is the profit on which the first assessment is made, and I do not know of any other class of business which returns so high a percentage of profit. It appears that under this clause profit, if any, properly attributable to overseas operations, which are subject to heavy taxation overseas, are liable to taxation in Australia. On the other hand, losses made overseas arc not allowed as a deduction against the income of the Australian companies. Neither are they carried forward and allowed as a set-off in future years, as is done in respect of all other taxpayers. It appears also that clause 13S applies only if the distribution of films is carried on in Australia by means of a subsidiary company. I am told that if the distribution is carried on by a branch of a foreign company, which is not separately incorporated, clause 138 will not apply. It seems to me to be an extraordinary state of affairs if we are prepared to continue legislation which gives an advantage to those companies that are represented here by a branch as compared with companies which are incorporated here. In these circumstances, it would appear that the bill penalizes a business because of the form in which it is carried on in Australia. Clause 137, which deals with other foreign companies, does not distinguish between businesses carried on in Australia by means of branches and those which operate through subsidiary companies. In view of the disclosures made to, and the information withheld from, the Royal Commission on Petrol, it would appear that if legislation of this nature is necessary in regard to the film industry, it is even more necessary in respect of some other foreign companies. I am opposed to the clause.

Clause agreed to.

Clauses 139 to 156 agreed to.

Clause 157-

(1   ) In respect of income derived during the year ending on the thirtieth day of June One thousand nine hundred and thirty-eight . . . the foregoing provisions of this division shall not apply except in respect of income derived by a primary producer.

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