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Tuesday, 9 April 1946

Mr. CHIFLEY(Macquarie - Prime

Minister and Treasurer) [4.0]. - by leave - I move -

That the bill be now read a second time.

Numerous requests have been made for relief from sales tax in respect of a wide range of goods. A review of these requests has been made, and within the limits imposed by the financial commit-' ments of the Government, it is now proposed to grant certain further concessions relating to those goods in respect of which the most meritorious claims have been advanced. The relief now proposed will involve an annual loss of revenue amounting to £1,400,000. It will be recalled that in September, 1945, relief to the amount of £2,800,000 per annum was granted, so that the sales tax concessions allowed during the current financial year will involve a total revenue loss of £4,200,000 per annum.

A concise statement of the goods covered -by the present proposals has been circulated for the information of honorable members. It will be seen that certain goods are being removed from the Third Schedule to the Sales Tax (Exemptions and Classifications) Act, thus reducing the rate of tax thereon from the maximum of 25 per cent, to' the genera] rate of 12½ per cent., with one exception. Among the goods affected are sheepskin garments, which will become subject to tax at the special rate of 7½ per cent, applicable to clothing generally. The goods affected by the proposed reduction of rate are goods which are not luxuries, and it is felt that the continued application of the maximum rate of 25 per cent, in respect of these goods would be undesirable.

Exemption from tax is being restored in respect of certain goods which were exempt from tax in the pre-war period. These goods are chiefly foodstuffs, such as canned meats, canned vegetables and similar goods. A limited range of new exemptions is proposed, affecting, in the main, some items of building materials, certain goods for use in primary production and goods for the use of non-profit making schools, school committees, and infant welfare centres. There .are also certain drafting amendments of the existing provisions for exemption of aids to manufacture. The most important of these is to extend that exemption so as to cover machinery and equipment leased 'by & manufacturer for use in manufacturing operations. The exemption lias hitherto been limited by its terms to machinery, &c, purchased, imported or manufactured by a manufacturer for his own use. It is proposed that the amendment extending the exemption to leased goods shall be deemed to have commenced on the 13th September, 1945, that is, the date of commencement of the exemption of manufacturers' machinery. A slight consequential amendment of the Sales Tax Assessment Act (No. 9> 1930-1936 is also required in this connexion, and a separate bill will be introduced for that purpose. Subject to a. few exceptions which are indicated in the statement which I have circulated, the amendments will be operative on and from to-morrow, the 10th April, 1946. The bill is limited to the allowance of concessions and will, therefore, no doubt, meet with general approval.

Debate (on motion by Mr. Menzies) adjourned.







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