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Thursday, 28 May 1942

Mr MARWICK (SWAN, WESTERN AUSTRALIA) . I wish to strike a. note of warning in connexion with company taxation. In doing so, I make it clear that I have no interest in any company, either private or public ; but, as a member of the Joint Committee on Profits, I had the opportunity to study company taxation in some detail, and to hear the views of many persons connected with companies of various kinds. Although a company has neither a body to be kicked nor a soul to be damned ", it does offer an excellent opportunity for many thousands of people in this country to invest their limited savings. The taxation of Australian companies is reaching a dangerous peak, and we must be careful not to destroy a valuable source of revenue. In my opinion, the Treasurer (Mr. Chifley) would be well advised to study carefully the two reports of the Joint Committee on Profits, and to heed some of the suggestions contained therein. Under this measure, it is proposed that company taxation shall be at the rate of 6s. in the £1. That will cause considerable hardship to thousands of small investors who, rather than use their savings in businesses of their own, prefer to invest it in efficiently and economically managed companies, believing that their capital is safer in such hands. During the last few years the various taxing authorities in Australia have regarded the earnings and dividends of companies as an easy and profitable field of taxation, and the result has been the infliction of considerable hardship on scores of thousands of small investors. I appeal to the Treasurer to study carefully the two reports submitted by the Joint Committee on Profits. In my opinion, taxation of companies is reaching a dangerous level in Australia and is destroying a lucrative field of taxation because it is checking the expansion of companies, particularly the younger and more vigorous companies that have developed in the last few years. Heavy company taxation is also affecting seriously the means of livelihood of scores of thousands of small investors. People who draw, say, £80 or £100 a year from a company have to pay a high rate of income tax on their dividends, although their personal exertion income is below the minimum for ordinary income tax. Because companies and their shareholders are spread over a vast area in Australia, they do not seem to be able to bring strong influence to bear on Parliament in their own interest.

Mr Mulcahy - Did not the Joint Committee on Profits find that many companies make huge profits?

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