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Tuesday, 2 May 1961

The CHAIRMAN - Order! I have examined the new clause moved by the honorable member for Mackellar and I consider that, insofar as it proposes the issue of bonds, which is in effect the raising of loans, it goes beyond the scope of the bill and the principal act which relate only to the imposition, assessment and collection of a tax upon incomes. On the ground, therefore, that the new clause proposes to introduce matters outside the scope of the bill and the principal act, I have to rule that the proposed new clause moved by the honorable member for Mackellar is out of order.

Mr WENTWORTH - I bow to your ruling, Mr. Chairman. As I explained, the main matters to which your objection-. relates are matters of machinery only. I would, therefore, like to move the clause in another form, which I think would not be susceptible to the objections in your ruling. The redrafted clause carries out in substance the objectives of the clause as originally drafted but does not contain the full machinery matters. 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.) Any Australian citizen may claim as a deduction from his taxable income for any yea the face value of up to £500 of Tax Concession Bonds purchased by him during that year in accordance with any Act providing for the issue of such Bonds. (3.) The proceeds of any Tax Concession Bond which is redeemed shall be deemed to be an accretion to the taxable income of the holder for the year in which such redemption takes place; provided, however, that within twelve months after marriage a holder may obtain redemption of Bonds to a value of £1,500 free of accretion, and also that within twelve months after the birth of a child a holder may obtain the redemption of Bonds to a value of £1,000 free of accretion. (4.) Interest deemed 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 three of this section.'.".

I think you will see, Sir, that although the clause is stripped of the detailed machinery contained in my original draft, it nevertheless carries out the purpose of the clause as originally drafted. This proposed new clause, which will not come into operation until a date to be proclaimed, is contingent upon the issue of bonds, and the provisions for the issue of the bonds in detail are severable from my main purpose, being mainly machinery, and could be provided in the drafting of a separate bill dealing with the issue of the bonds. That I think gets rid of the objection in respect of form to which you drew attention, Sir.

I believe that this is an important provision. I again stress that the great weakness of the Australian economy, the weakness that occasions the necessity for the bill we have before us, is the chronic deficiency of savings. The clause as I have moved it is designed to increase the facility of saving, particularly among the junior members of the community who may be expected to save in anticipation of marriage. They will obtain great benefits from so doing, if this provision be accepted, but I make no apology for that. I believe that we should be doing whatever will help young people to save and whatever will give them a corresponding benefit from saving.

They are not, however, the only beneficiaries. Although the young people may obtain the greatest benefit, they will not be the only ones to obtain benefit. This will particularly help those who desire to save in their years of higher income in preparation for retirement. It is not suggested that in this case, or indeed in any case except subsequent marriage or the birth of a child, those savings should be simply a deduction from tax. lt is suggested that the tax be deferred and that the benefit be given in that way.

Mr Cleaver - Would the honorable member expect many young people to take a small amount of bonds?

Mr WENTWORTH - Yes . The upper limit is put at £500, but it is not suggested that smaller amounts annually could not be subscribed under the provisions of this clause. The upper limit of £500 is suggested because this is not meant to be anything but a clause to help people on the lower ranges of income. I suggest that many people in the younger age group who are enjoying high earnings but have little responsibility at that stage may be very glad of the opportunity to save, perhaps not the full £500 but some £100 or so each year so that they will be able to deduct it from their income for taxation purposes and to draw it to set themselves up in a house or to meet the inevitable expenses that follow the birth of a child.

This amendment breaks new ground. However, I believe it is an amendment of quite considerable sociological and economic importance, and I commend it to the committee.

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