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Friday, 21 November 1941

Mr SPOONER (Robertson) .- I am gladthat the right honorable member for Yarra (Mr. Scullin) has repeated some of thefigures which he gave in his second-reading speech, because I am reminded to pointtheir unreality. The right honorable gentleman cited a company with a capital of £300,000, earning a profit of £18,000. The shareholders in such a company might not allow it to continue trading for very long. The illustrations given by the right honorable gentleman are. artificial, because a company of the description cited would need to be making a profit of £40,000 or £50,000 a year in order to put by reserves and to pay dividends . The right honorable membershould quote the effect of the flat rate tax.

Mr Scullin - The amount of £18,000 is the taxable profit remaining after deducting from the taxable income the Commonwealth income tax of 3s. in the £1. The supertax is calculated on the amount of the taxable income in excess of £5,000.

Mr Curtin - The unreal company of the right honorable member for Yarra and the real company of the honorable member for Robertson (Mr. Spooner) are identical.

Mr SPOONER - No ; there are other taxes, such as the undistributed profits tax and the State income tax. The amount of £18,000 does not represent a normal earning of a company with £300,000 of capital. The figures in respect of revenue from the tax last year do not give the real position. The tax did not come into operation until December, and the staff to administer the tax was not provided until about February or March and assessments were not issued until May or June. A board of referees is still dealing with a number of appeals against assessments, and, in order to discover the amount yielded by the tax last year, one must first ascertain the amount of the assessments issued. That information is not available, but the information in our possession is sufficient to indicate that when the whole of the assessments have been met the revenue will be more like £3,000,000 or £4,000,000 than £1,000,000. Full consideration could not have been given to this matter when 4per cent. on capital was fixed as the profit above which the tax will operate. If the Government would accede to the Opposition's request for the appointment of a committee this matter could be threshed out over the week-end and a mutually satisf actory formula devised which would enable the clause to be agreed to within ten minutes after its consideration was resumed.

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