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Wednesday, 26 November 1941


Mr LAZZARINI (Werriwa) (Minister assisting the Treasurer) . - I move -

That the clause be amended as follows: -

In sub-clause (1.) omit paragraphs (a), (b), (c), (d), (e)and(f), with a view to insert in lieu thereof the following paragraphs: - " (a) contributions by an employer to a fund established for the purpose of providing retiring allowances or pensions for his employees, or any class or classes of his employees, or their dependants; "(b) payments made by an employer to an employee, or the dependants of an employee, in consequence of the retirement of that employee from the service of the employer or in consequence of his death, or any gratuity or bonus paid by an employer to an employee during the continuance of the employment if the Commissioner is satisfied that the gratuity or bonus is paidin recognition of special or faithful services rendered, or any salary, wages or allowances which the employer continues to pay during any period of illness or invalidity of the employee; "(c) any moneys paid by an employer to an employee who is a member of the DefenceForce or of the Naval, Military or Air Force of any other part of His Majesty's dominions, for the purpose of augmenting the employee's pay as a member of any of those forces; " (d) any gift to an institution, organization or body of persons, whether corporate or unincorporate, not formed or carried on for the profit of any individuals; " (e) any gift to the Commonwealth or a State ; "(f) any gift which is made in the course of carrying on a business, for the purpose, of obtaining any commercial benefit or by way of the writing off of a debt which is irrecoverable, by -

(i)   an incorporated company the shares or stock of which are or is quoted in the official list of any Stock Exchange:

(ii)   an incorporated company the shares or stock of which are not or is not quoted in the official list of any Stock Exchange, if the Commissioner is satisfied that the donee is not a director of the company or is not connected by ties of blood or marriage with any directorof the company; or

(iii)   a. firm or individual if the Commissioner is satisfied that the donee is not connected by ties of blood or marriage with any member of the firm or with the individual, as the case may be: " (fa) any premiums, not exceeding One hundred poinds per annum, paid by a person on a policy effected by him on his own life and expressed to be for the benefit of his wife or any of his children;".

In.sub-clause (1.), paragraph {g) . after the word "business", wherever occurring, insert the words "trade or calling".

In sub-clause (1.), paragraph (h) (i), omit the word " thirty ", wherever occurring, with a view to insert in lieu thereof the word "eighteen": and omit the word "twenty" with a view to insert in lieu thereof the word " fifty".

In sub-clause (1.), paragraph (h) (ii), omit the words "of the wife, husband or child of the donor or for or towards the education or apprenticeship of a child of. the donor ", with a view to insert in lieu thereof the words education or apprenticeship of any person Omit sub-clause (2.).

This clause provides for exemptions from duty. Sub-clausesa and b as amended exempt contributions by an employer to a fund to provide for retiring allowances for his employees or their dependants, and for bonuses to employees. They also provide for the exemption of pensions, bonuses or gratuities paid directly by the employer to the employee or his dependants upon his retirement, or in consequence of his death. Payments made on account of illness of the employee are also exempt. Bonuses or gratuities paid in recognition of special or faithful service, where the commissioner is satisfied that the payment is bona fide, are exempt.

The proviso in the bill excluding from exemption, pensions, gratuities and bonuses paid by an employer to an employee connected by ties of blood or marriage with the employer is being omitted. The question of whether the payment is bona fide has to be proved to the satisfaction of the commissioner, as I have already stated.

New sub-clause c provides for the exemption of payments in augmentation of the service pay of employees who have enlisted.

New sub-clause d extends the exemption for gifts for charitable purposes granted by the sub-clause as printed in the bill. That sub-clause did not provide for the exemption of gifts to many institutions such as the Australian Mothercraft Society, the Bluebird Free Kindergarten, the Children's - Library Movement, the Country Women's Association, the welfare clubs, the Hammond Pioneer Homes and the sporting clubs and associations. This has been done by providing for the exemption of all gifts to institutions and organizations not formed or carried on for the profit of any individuals.

New sub-clause e exempts gifts to the Commonwealth or a State. In the bill, the exemption of a gift to a State was limited to gifts for defence purposes. This limitation has now been removed. The special committee recommended that a provision should be inserted to place beyond doubt the exemption of bad debts, and also to exempt gifts made by companies, firms and individuals for business purposes. New sub-clause / gives effect to that recommend'ation.

The insertion of new sub-clause fa. which exempts premiums not exceeding £100 per annum paid by a person on a policy of insurance on bis own life for the benefit of his wife or children gives effect, to a recommendation made by the committee.

Paragraph g exempts such payments as those made to doctors who have enlisted for service, out. of a fund created by their colleagues for the purpose of augmenting their service pay. Thu amendment, ensures that the exemption will apply to such a. calling as the medical profession.

Paragraph h exempts small gifts up to an aggregate of £20 and also gifts made for or towards the maintenance or education of the wife, husband or child of the donor which is not excessive in amount.

The amendment to paragraph h (i), omitting "thirty" and inserting in lieu thereof "eighteen " is consequential upon the adoption by the Government of the special committee's recommendation to reduce the statutory period under the bill from five years to three years.

The other amendment no paragraph h (ii), to substitute "fifty" for "twenty", gives effect to the decision to increase from £20 to £50 the aggregate of the. gifts which a donor may make to any one donee within the statutory period without making himself liable to gift, duty.

Paragraph h (ii), as printed in the bill, exempts gifts made by a donor towards the maintenance of the wife, husband or child of the donor or towards the education of the child of the donor. The amendment enlarges the provision by exempting such gifts to any person where the Commissioner is satisfied that the payment is bona fide and is not excessive in amount having regard to the donor's legal and moral obligation to afford such maintenance or education.

The omission of this sub-clause 2 is consequent upon the enlargement of tin"-' exemption of charitable gifts by the introduction of new sub-clause 1 (h The claude is not now necessary.

Mr. SPOONER(Robertson) [4.3 J.All of these amendments are in accordance with the decisions of the special committee which, after examining the bill, submitted certain recommendations to the Government. .1 propose to make a few observations upon them, because the clause is of the utmost importance in the administration of tlie measure. The scope of this clause, which deals with the exemptions from the payment of gift duty, will be enlarged by the amendments, and I do not desire to repeat any of the observations by the Minister assisting the Treasurer (Mr. Lazzarini) upon their effect. However, 1 desire to express my appreciation of the proposed new paragraph d, which relates to the exemption of any gift to an institution, organization, or body of persons, whether corporate or un incorporate, not formed or carried on for the profit of any individuals. In my opinion, the Government has adopted a correct principle. Many educational, philanthropic and other organizations are working for the public good, and nobody makes any profit out of their activities. They depend, to a large degree, upon tinamount of voluntary financial assistance that they receive from people who, believing in their aims and objects, make contributions to them. Some of the organizations function in regard to country activities; some assist to educate the youthful mind ; and others work voluntarily among the sick and the poor. They would indeed be placed under a severe disadvantage if the imposition of a gift tax discouraged former donors. The amendment which the Minister submitted makes it clear that henceforth a person may, without risk of tux, continue to give to organizations of this description the assistance that he formerly rendered to them

T welcome the amendments that the Minister moved for the purpose of clarifying the position in commercial practiceregarding the writing off of bad debts. Honorable members will notice that in doing so, the Government has been careful to leave no loophole that would enable members of a private company to write off debts which relatives by blood or marriage owed to them.

Another amendment provides the opportunity for a nian, if he desires to make the reasonable and proper provision that he should for his wife to assure his life, pay the premiums, and direct, that the policy be payable on his death to his wife; or, indeed, he may take out the policy on his life in the name of his wife. To a limit of £100 per annum, that will not he regarded as a gift to the wife.

One of the amendments which the Opposition will accept, but concerning which I express a certain amount of regret, is the new provision relating to the aggregation period. In the original measure, the aggregation period was five years. I understand that in Queensland it is two years. I have heard the case upon which the Government, has been advised to extend the period, and I know that it is a substantial one. The contentions which have been put forward in favour of expanding the aggregation period, are founded upon good information. But I am afraid that the aggregation period of three years will bring a good deal of administrative trouble. 1 can only express regret that the period should be so long. My own opinion is that twelve months would have been an improvement, if the Government had been able, by some other means, to tighten up those anomalies which necessitate the introduction of a three-year period. The Government will improve the measure considerably in future if, by the consideration of other means of tieing up those returns, it, is able to reduce the aggregation period to twelve months, on the basis of six months before each gift, and six months after it. The three-year period was approved by the committee, because there appeared to be no alternative in the light of known circumstances. I hope that the administration of the measure in future will make itpossible for the Government to find a means of overcoming this difficulty.







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