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Wednesday, 20 May 1942

Mr HOLT (Fawkner) .- It is quite usual for a husband to pay the premiums on a policy which is to operate after his death in favour of his wife or some other member of his family. In the past, such a policy has not been subject to estate duty, and the money has been immediately available for the needs of the beneficiary. The Government now proposes that, if the husband paid the premiums, the policy shall form a part of his estate for purposes of estate duty. The Treasurer (Mr. Chifley) has described this long-established practice as a process of cheating on the part of the husband, and as an evasion of estate duty. That was a totally unfair and improper way to describe transactions of a kind which have been carried out regularly throughout Australia for many years with great benefit to thousands of families. Those transactions have been a direct encouragement to thrift and an incentive to provide for the security of families. In my opinion the Government is taking a retrograde step in this matter. The Treasury may benefit by a few thousand pounds in the immediate present, but the whole community will suffer ultimately. Transactions of the kind in question have been attractive to husbands who desired to make some provision, by means of the payment of a regular premium, in order to secure for their widows an amount of money which would be immediately available for necessary purposes. To describe this process as cheating and evasion is extremely unjust, for, as I have indicated, it is in fact an attempt to provide wives with adequate funds immediately following the death of their breadwinners. I say without fear of contradiction that thousands of men have taken out policies for this purpose in mutual and co-operative life assurance societies who would otherwise not have done so. I regret that the Government has adopted a procedure which will discourage such action in the future. There is neither cheating nor evasion in this process. I fear that the effect of these amendments will be to cause the less responsible and less honorable members of the community to adopt methods of evasion. Possibly wives will be asked to provide for the payment of these premiums out of their own allowances, or they may be given extra housekeeping money with which to pay the premiums. In either case a retrograde step will have been taken. The adoption of these amendments will undoubtedly strike a blow at institutions which have been of incalculable benefit to the people of the Commonwealth. The practice of assuring for the purpose of providing ready money for the payment of estate duty is desirable in my opinion and should be encouraged.

Amendments agreed to.

Clause, as amended, agreed to.

Clause 4 -

Section nine of the principal act is repealed and the following section inserted in its stead : - "9. - (1.) For the purpose of determining the value for duty of the estate of a member of the Naval, Military or Air Forces of the Commonwealth, or of any part of the King's dominions, or of any ally of Great Britain who, during the present war in which His Majesty is engaged, or within one year after its termination, dies on active service or as a result of injuries received or disease contracted on active service, there shall be deducted in respect of such part of the estate as passes to the widow, children, grand-children, parents, brothers, sisters, nephews or nieces of the deceased, a sum of Five thousand pounds, or where the value of that part is less than Five thousand pounds, an amount equal to the value of that part. " (2.) Where any property in respect of which a deduction has been allowed under the last preceding sub-section later forms the whole or part of the estate of some other such member so dying, there shall be excluded from the estate of that other member so much of that property as passes to the widow, children, grand-children, parents, brothers, sisters, nephews or nieces of the other member.".

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