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Friday, 12 July 1946

Mr CHIFLEY (Macquarie) (Prime Minister and Treasurer) . - by leave - I move -

That the bill be now read a second time. - This bill proposes an amendment of a minor nature to the Social Services Contribution Assessment Act 1945. The amendment is complementary to the introduction of a separate graduated rate of social services contribution. At present, the rate of contribution in cases where the maximum rate of1s. 6d. in the £1 does not apply, is ascertained by reference to the amount of income tax the taxpayer would pay, after deducting all rebates, if income tax were levied on his taxable income at 871/2 per cent, of war-time rates of tax.

In the notional income tax assessment, all rebates are allowed. The rebates so allowed include the special rebate of 2s. on each £1 of interest derived from certain government and semi-government loans included in the taxable income of the taxpayer.

Now that the rate of contribution is to be calculated without reference to the amount of income tax payable, it is necessary to make special provision in the Social Services Contribution Assessment Act so as to preserve to persons in the lower income groups the benefit of the special rebate of 2s. in the £1 on interest on such securities. The effect of the proposed amendment will be that where a person does not obtain the full benefit of the rebate in his income tax assessment, the whole, or relevant part, of the rebate will, as the case requires, be allowable from the social services contribution otherwise payable by him.

Debate (on motion by Mr. Fadden) adjourned.

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