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Friday, 2 July 1920

Mr TUDOR (YARRA, VICTORIA) - Honorable members are doubtless aware that the New South Wales Government are' issuing a loan, which, they state, will be free of Commonwealth and State income tax. In this morning's newspapers a similar announcement is made with regard to a Victorian loan.

Mr Blundell - The South Australian Government are also floating a loan which it is said will be free of Commonwealth and State income tax.

Mr TUDOR - I desire to ask the Acting Treasurer whether, in view of the decision of the High Court in the case of d'Emden v. Pedder, it is competent for any State Government to issue a loan free of Commonwealth income tax?

Mr J H Catts - A State Government may undertake to pay the Federal tax on a State loan.

Mr TUDOR - I am aware of that, but I am anxious to ascertain whether the State Governments can give this assurance in view of the fact that these loans are largely subscribed by persons with big incomes which are subject to the higher rates of taxation. The exemption of such investments from Federal income tax is unfair to the rest of the community.

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