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INCOME TAX ASSESSMENT AMENDMENT BILL (NO. 5) 1983

Order of the Day read for the adjourned debate on the motion of the Minister for Social Security (Senator Grimes)-That this Bill be now read a second time.

Debate resumed.

Senator Harradine moved an amendment, viz: At end of motion, add ''and (a) that clause 5 of the Income Tax Assessment Amendment Bill (No. 5) 1983 be referred to a Select Committee to inquire into and report upon the adequacy of the clause, particularly in relation to the overriding need to redress any financial disadvantage which might have been suffered by unsuspecting employees who were ostensibly the beneficiaries of a superannuation fund but were disadvantaged either by not being informed of their rights under the superannuation scheme or had their employment terminated in circumstances where they became disentitled to benefits from the fund; and

(b) that provisions relating to membership, powers and proceedings of the Committee be contained in a subsequent Resolution''.

Debate continued.

Question-That the words proposed to be added be added-put.

The Senate divided

AYES, 6

Senators- Chipp Evans, Jack Haines Harradine (Teller) Macklin Mason

NOES, 53

Senators- Archer Baume Bjelke-Petersen Bolkus Boswell Carrick, Sir John Childs Coates Coleman Collard Cook Crichton-Browne Crowley Durack Elstob Evans, Gareth Foreman Georges Gietzelt Grimes Guilfoyle, Dame Margaret Hamer Hill Jessop Jones Kilgariff Lajovic Lewis McClelland MacGibbon McIntosh Maguire Martin Messner Missen Primmer Rae, Peter Ray, Robert Reid (Teller) Reynolds Richardson Robertson Ryan Scott Sibraa Tate Teague Townley Walsh Walters Watson Withers Zakharov

Amendment negatived accordingly.

Question-That this Bill be now read a second time-put and passed.

Bill read a second time.

The Senate, according to Order, resolved itself into Committee for the consideration of the Bill.

In the Committee

Clauses 1 to 4, by leave, taken together and agreed to.

Clause 5 read- Senator Dame Margaret Guilfoyle, by leave, moved the following amendments together: Page 3, sub-clause (1), proposed new paragraph 26AFA(1)(a), line 36, leave out ''1 July 1977'', insert ''7 December 1983''.

Page 4, sub-clause (1), proposed new sub-section 26AFA(3), line 28, leave out ''1 July 1977'', insert ''7 December 1983''.

Page 5, sub-clause (2), line 2, leave out ''1 July 1977'', insert ''7 December 1983''.

Debate ensued.

Question-That the amendments be agreed to-put.

The Committee divided-

AYES, 26

Senators- Archer Baume Bjelke-Petersen Boswell Carrick, Sir John Chipp Crichton-Browne Durack Guilfoyle, Dame Margaret Haines Hamer Harradine Hill Jessop Kilgariff (Teller) Lewis MacGibbon Macklin Martin Messner Rae, Peter Scott Townley Walters Watson Withers

NOES, 26

Senators- Bolkus Button Childs Coates Coleman Cook Crowley Elstob Evans, Gareth Evans, Jack Foreman Jones McClelland McIntosh Maguire Mason Primmer Ray, Robert Reynolds Richardson Robertson (Teller) Ryan Sibraa Tate Walsh Zakharov

The Ayes and Noes being equal, amendments negatived accordingly.

Question-That clause 5 stand as printed-put.

The Committee divided-

AYES, 26

Senators- Bolkus Button Childs Coates Coleman Cook Crowley Elstob Evans, Gareth Evans, Jack Foreman Jones McClelland McIntosh Maguire Mason Primmer Ray, Robert Reynolds Richardson Robertson (Teller) Ryan Sibraa Tate Walsh Zakharov

NOES, 26

Senators- Archer Baume Bjelke-Petersen Boswell Carrick, Sir John Chipp Crichton-Browne Durack Guilfoyle, Dame Margaret Haines Hamer Harradine Hill Jessop Kilgariff (Teller) Lewis MacGibbon Macklin Martin Messner Rae, Peter Scott Townley Walters Watson Withers

The Ayes and Noes being equal, clause 5 negatived accordingly.

Remainder of Bill, by leave, taken as a whole.

On the motion of the Minister for Resources and Energy (Senator Walsh) the following amendments were, by leave, taken together, debated and agreed to: Page 5, clause 6, after proposed sub-section 26AH (1), insert the following new sub-section: '' '(1A) Where a paid-up policy of life assurance is issued to a taxpayer in lieu of an eligible policy- (a) the paid-up policy shall, for the purposes of this section, be deemed to be a continuation of the eligible policy; and

(b) no amount shall be taken for the purposes of sub-section (3) to have been re-invested or otherwise dealt with on behalf of the taxpayer or as he directs in connection with the issue of the paid-up policy to the taxpayer in lieu of the eligible policy.''.

Page 6, clause 6, after proposed sub-section 26AH (6), insert the following new sub-section: '' '(6A) Where- (a) sub-section (5) would, but for this sub-section, apply to an amount (in this sub-section referred to as the ''relevant amount'') received by a taxpayer by reason of the forfeiture, surrender or other termination of the whole or a part of an eligible policy; and

(b) the Commissioner, having regard to- (i) the total amount of premiums paid under the eligible policy;

(ii) the total amounts received by the taxpayer or by any other person under the eligible policy and the total amounts of bonuses included in the amounts so received;

(iii) the amount of the surrender value of the eligible policy at the time when the forfeiture, surrender or other termination occurred; and

(iv) such other matters as the Commissioner considers relevant,

is of the opinion that it would be unreasonable for sub-section (5) to apply to the relevant amount or to a part of the relevant amount,

sub-section (5) does not apply to the relevant amount, or to that part of the relevant amount, as the case may be.''.

Page 46, clause 25, proposed section 160AAB, leave out the proposed section, insert the following section: Rebate in respect of amounts assessable under section 26AH '' '160AAB. (1) In this section, ''eligible 26AH amount'', in relation to a year of income, means an amount included in assessable income under section 26AH in relation to an eligible policy within the meaning of that section issued by a life assurance company to which Division 8 applies in relation to the year of income, not being a life assurance company the whole of the income of which is exempt from tax.

'(2) A taxpayer, not being a taxpayer in the capacity of trustee of a trust estate, is entitled in his assessment in respect of income of a year of income to a rebate of a tax of an amount equal to 30% of any eligible 26AH amount included in his assessable income of the year of income.

'(3) Where- (a) an amount is included under section 97, 98A or 100 in the assessable income of a year of income of a taxpayer being a beneficiary of a trust estate otherwise than in the capacity of trustee of another trust estate; and

(b) the whole or a part of the amount so included (which whole or part is in this sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate,

the taxpayer is entitled in his assessment in respect of income of the year of income to a rebate of tax of an amount equal to 30% of the rebatable amount.

'(4) Where- (a) a taxpayer being the trustee of a trust estate is liable to be assessed and to pay tax in pursuance of section 98 in respect of a share of the net income of the trust estate of a year of income; and

(b) the whole or a part of that share (which whole or part is in this sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate,

the taxpayer is entitled in that assessment to a rebate of tax of an amount equal to 30% of the rebatable amount.

'(5) Where- (a) a taxpayer being the trustee of a trust estate is liable to be assessed and to pay tax in pursuance of section 99 or 99A in respect of the whole or a part (which whole or part is in this sub-section referred to as the ''relevant trust income'') of the net income of the trust estate of a year of income; and

(b) the whole or a part of the relevant trust income (which whole or part is in this sub-section referred to as the ''rebatable amount'') is attributable to an eligible 26AH amount included in the assessable income of the year of income of the trust estate or of another trust estate,

the taxpayer is entitled in that assessment to a rebate of tax of an amount equal to 30% of the rebatable amount.

'(6) Where an eligible 26AH amount is included in the assessable income of a partnership of a year of income in the calculation of the net income or partnership loss of the partnership of the year of income, a partner in the partnership is entitled in his assessment in respect of income of the year of income to a rebate of tax of an amount equal to 30% of the amount by which the taxable income of the partner of the year of income exceeds the amount that could reasonably be expected to be that taxable income if the eligible 26AH amount had not been included in the assessable income of the partnership of the year of income.

'(7) In the application of this section in relation to the year of income that commenced on 1 July 1982, references in this section to 30% shall be read as references to 30.67%.'.''.

Remainder of Bill, as amended, further debated and agreed to.

Bill to be reported with amendments.

The President resumed the Chair; and the Chairman of Committees (Senator Hamer) reported accordingly.

On the motion of Senator Walsh the Report from the Committee was adopted, and the Bill read a third time.