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Tuesday, 9 October 1956


Mr Kearney (CUNNINGHAM, NEW SOUTH WALES) y asked the Treasurer, upon notice -

1.   Is the cost of purchasing, maintaining and running motor cars used by business organizations, including the cost of transporting directors and managers to and from their homes and places of business an allowable deduction under existing taxation law?

2.   Is it a fact that the cost of employees' fares to and from their homes and places of work is not an allowable deduction under existing taxation laws?

3.   If so, will the Government take action to alter the law to permit as an allowable deduction the cost of fares to and from work?


Sir Arthur Fadden (MCPHERSON, QUEENSLAND) (Treasurer) - The answers to the honorable member's questions are as follows: -

1.   The cost of motor cars used by a taxpayer in the ordinary course of business is deductible by way of a depreciation allowance at the rate of 15 per cent, per annum. The cost of maintaining and running motor cars used for that purpose is deductible in the year in which the cost is incurred. As a general rule, an employer would be entitled to deduction of the cost of transporting employees, whether they be directors, managers, or persons employed in other capacities to and from, their homes and place of employment, if that transport is undertaken as an ordinary matter of business. Directors and managers incurring expenditure on their own account for fares between their homes and their place of work would not be entitled to any deduction of the amount incurred.

2.   Yes; such expenses are regarded as being of a private or domestic nature the deduction of which is expressly excluded from deductible expenditure by section 51(1) of the Income Tax and Social Services Contribution Assessment Act.

3.   Similar proposals have been considered from time to time but to date no amendment which would prove a suitable alternative to the existing position has been found.


Mr Ward (EAST SYDNEY, NEW SOUTH WALES) d asked the Treasurer, upon notice -

1.   Is it a fact that there have been cases where, under the terms of their employment, employees have been supplied with overalls by the employer, and that subsequently, either by mutual agreement or by order of the appropriate arbitration authority, this practice has been discontinued, and, in substitution, a financial payment has been made to the employee to meet the expense involved'.'

2.   If so, has the Commissioner of Taxation refused to allow this amount as an allowable deduction for taxation purposes?

3.   Will the Treasurer take appropriate steps to have all moneys spent by workers in the purchase of overalls or special industrial clothing declared an allowable deduction?

4.   If he is not prepared to adopt this suggestion, will he seek other means to rectify this injustice to employees?


Sir Arthur Fadden - The answers to the honorable member's questions are as follows: -

1.   No doubt, there are cases of this nature.

2.   The Commissioner of Taxation informs me that he is not aware of any case where an employee has been refused a claim for the deduction of the cost of purchasing and maintaining overalls if the employee has received from his employer an allowance specifically for the purpose of meeting those costs and the full facts have been disclosed in his return. 3 and 4. The Income Tax and Social Services Contribution Assessment Act provides that expenditure necessarily incurred in gaining or producing assessable income is deductible so long as the expenditure is not of -> private, domestic or capital nature. It is considered that this provision is adequate to meet the circumstances described by the honorable member.


Mr Lawrence (WIMMERA, VICTORIA) e asked the Treasurer, upon notice -

In the proposed legislation to increase the value of life assurance premiums as allowable taxation deductions, will the limit imposed on employers' and other persons' contributions to funds for the benefit of employees, under sections 66 and 79 of the Income Tax and Social Services Contribution Assessment Act, be also increased to £300?


Sir Arthur Fadden - The answer to th< honorable member's question is as follows: -

No. When the proposed legislation is enacted, the annual deductions of payments to provide life assurance and superannuation benefits for an employee may be as high as £500, comprised of £300 paid by the employee himself and £200 paid by the employer. In some cases, the deductible payments may be even higher than £500, for example, where 5 per cent, of the employee's annual remuneration is greater than £200 or where the Commissioner of Taxation, having regard to the special circumstances of the case, considers it to be reasonable to allow an amount greater than £200 or 5 per cent, of the employee's annual remuneration. Under prevailing conditions, the Government has not felt able further to liberalize these provisions.







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