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Tuesday, 2 May 1961

Mr WENTWORTH (Mackellar) . - Mr. Chairman, I move -

That the following new clause be inserted in the bill:- " 4a. After section eighty-two j of the Principal Act the following section is inserted: - 82k. - (1.) This section shall come into operation upon a date to be proclaimed. (2.) The Treasurer may cause Tax Concession Bonds to be issued under the authority of this section. Such Bonds -

(a)   shall be of the face value of £20; and

(b)   shall be deemed to bear interest at a yearly rate fixed by regulation and computed compound for each financial year ended 30th June, no interest being reckoned for any period less than a complete year. (3.) Any Australian citizen (including minors) may purchase Tax Concession Bonds at face value from agents appointed by the Treasurer. (4.) Any Australian citizen may claim as a deduction from his taxable income for any year the face value of up to twenty-five Tax Concession Bonds purchased by him during that year in accordance with this section. (5.) Tax Concession Bonds shall be nontransferable, except that in case of the death, legal incapacity or bankruptcy, of the holder they may be transferred to his executor, legal representative or assignee, who shall then be deemed to hold them in trust for him or his estate, and may present them for redemption in accordance with sub-section (7.) of this section, or may, during the lifetime of the original holder, transfer them in accordance with the terms of his trust. (6.) No security given over Tax Concession Bonds shall be enforceable at law. (7.) Any holder of Tax Concession Bonds shall be entitled at one month's notice to obtain redemption of any or all of them from the agents appointed by the Treasurer at their face value plus any interest computed under this section; provided that, except with the concurrence of the Treasurer, no such Bond shall be redeemable until thirty months have elapsed from its purchase; provided further, however, that Bonds redeemed free of accretion under the next succeeding subsection may be redeemed after eighteen months have elapsed since their purchase. (8.) The procedes of any Tax Concession Bond redeemed in accordance with the preceding subsection shall be deemed to be an accretion to the taxable income of (he holder for the year in which such redemption takes place; provided, however, that within twelve months after marriage a holder may obtain redemption of up to seventyfive such Bonds free of accretion, and also that within twelve months after the birth of a child a holder may obtain the redemption of up to fifty such Bonds free of accretion. (9.) Interest deemed to be credited upon Tax Concession Bonds shall not be deemed to be income or property for the purposes of the Social Services Act. (10). Interest demed to be credited upon Tax Concession Bonds shall not be deemed to be income for the purposes of this Act, except for the purposes of sub-section eight of this section. (11). The Governor-General may make regulations for the maintenance of a Register of Tax Concession Bonds, for the issue of certificates of the purchase of such Bonds, for the attachment of such certificates to income tax assessment forms where a deduction is claimed, and for the declaration of redeemed bonds in income tax assessment forms.'.".

As I intimated when I foreshadowed this amendment at the second-reading stage, it is mainly a machinery amendment which is calculated to give effect to the purposes which I endeavoured to explain at that stage. The purpose of the first part of the pro-posed new section is to allow a taxpayer to deposit up to £500 with the Treasury for any term which he desires, such a deposit to be a deduction from the depositor's taxable income in the financial year in which the deposit is made and to be an addition to his taxable income in the financial year in which it is withdrawn. The other part of the proposed new section contains purely machinery provisions ancillary to the main purpose. My objective in including it is to show that this can be done easily and without involving any great expenditure on administration or other matters of that character.

One important point I was hoping to make is that in case of marriage a taxpayer can withdraw up to £1,500 free of accretion and in the case of the birth of a child, £1,000 free of accretion to his taxable income. The machinery I have provided would be of great value to the person starting out in life, who very often is somebody

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