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Thursday, 28 May 1942

Mr FADDEN (Darling DownsLeader of the Opposition) (9:32 AM) . - I move -

That the following words he left out: - " to the extent to which those rates or taxes are charged or levied in respect of property held by the taxpayer for the purpose of producing assessable income ".

It is proposed to move later for the rejection of the provision made by clause 10, for the repeal of section 79 of the principal act. In order to prepare the ground, it is necessary to make alterations to clause 8 and other preliminary clauses which deal with concessional allowances, and the calculation of them by means of the rebate system. The whole object of instituting uniform taxation is to effect simplicity in methods of taxation and release for other purposes man-power at present engaged in duties relating to taxation. The simplest method of assessing tax must be adopted, because the bulk of the work of the Taxation Department is done in its assessing branch. It must be admitted that the method proposed by the bill is most complex. If it be adhered to, simplicity will not be achieved. A previous Government appointed a royal commission under the chairmanship of the late Mr. Justice Ferguson, to inquire into the subject of taxation with a view to effecting uniformity as between the Commonwealth and the States, with particular regard to the nature of the allowances that should be made, and the method of determining them, in order to approach as near as possible to a uniform system of income taxation. The commission considered the matter of allowable deductions, and discarded the idea of adopting a complex method, particularly that proposed by this measure, for the calculation of rebates. The argument is advanced that this method is more scientific than are others for arriving at an equitable allowance in respect of a wife and children, and other concessional allowances. The object sought to be achieved, first by the special committee which considered this matter, and now by the. Government, is well covered by the assessment of tax in accordance with the curve of the income; in other words, the higher the income the greater is the quantum of tax. For example, a man with a tax able income of £5,000 pays much more than five times the tax of a man with a taxable income of £1,000. Under the new scale, the tax of the latter will be £256, whereas that of the former will be £3,374 or sixteen times as great. A man with a taxable income of £200 will pay approximately £8, whilst a man with a taxable income of £400 will pay £57 - not twice as much, but in the ratio of 57 to S. Concessional allowances should be made on the existing basis. This is not an appropriate time for complex calculation. Simplicity is demanded. One of the basic reasons for this legislation is the release of man-power. That object will be defeated if a complex method of assessing taxable income be adopted. It would be just as logical to say that a man with a taxable income of £1,000, with allowable deductions in respect of wages, should have his tax rebated according to the principles of the proposed scientific method. Nobody will argue that that method tends towards simplicity; rather will it introduce complications. Few taxpayers will understand their assessments, and every assessment will have to be checked very carefully. The existing provisions of the Income Tax Assessment Act should be retained. I ask the Government to consider the matter further. I do not deny that its proposal has merits; but I repeat that this is not the time to introduce a complex method of calculating tax, the result of which must be to make it impossible for the taxpayer, to understand his assessment.

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