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Thursday, 31 May 1984
Page: 2316

(Question No. 646)

Senator Messner asked the Minister representing the Treasurer, upon notice, on 16 December 1983:

(1) Did the Treasurer announce on 19 May 1983 and confirm in his Budget Speech that friendly societies are to be taxed in this financial year.

(2) Does the Treasurer appreciate that almost half of the financial year has passed and there has been no statement or Bill presented, detailing the new tax regime.

(3) Does the Treasurer understand that because of the lack of details friendly societies are having great difficulties in advising clients and potential clients on their investments.

(4) Will the Treasurer consider delaying the start of the proposed tax until the 1984-85 financial year in view of this confusion and the likelihood that there will not be a Bill presented and debated before March, April or later in 1984.

Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

In my economic statement of 19 May 1983, I made the following announcement concerning the taxation of friendly societies:

'The Government has decided that the exemption for friendly societies on life, disability and accident insurance business will be terminated in respect of 1983 -84 and later income years.'

'Measures will be introduced to impose tax at a level comparable to that on the non-superannuation business of life insurance companies.'

This statement was confirmed in my Budget Speech.

As I indicated in a Press release of 17 April 1984, in settling details of the new arrangements there was extensive discussion and correspondence with representatives of the societies, which necessarily took up a considerable time. That prevented introduction of legislation in the Budget sittings of 1983 and the earlier part of the present sittings.

The intention of the announcement of 19 May 1983 was clear-that friendly societies should bear tax comparable to that borne by life insurance companies on non-superannuation business.

I am aware that, despite the foregoing, some friendly societies have been alleging that they are having difficulties in advising clients on their investments.

However, every effort has been made to communicate with representatives of the friendly societies, both to take their concerns into account and to ensure that they have no misunderstandings about the intent of Government policy in this area.

In my Press release of 17 April 1984 I made it clear that the measure would apply to earnings of friendly societies in 1983-84. That is also as stated in the original announcement on 19 May 1983, and the Government considers that this commencement date should stand.