Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 2 May 1961

Mr THOMPSON (Port Adelaide) . - It appears to me that some honorable members have been carried away by the speech of the honorable member for Mackellar (Mr. Wentworth). He spoke about young people being able to save money, and what could be done by the judicious use of this money, but I can see that his proposal goes a little further. Proposed new sub-section (3.) of the amendment says: -

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.

Then he goes on with certain provisions regarding a bondholder wMo marries. Consider the case of a man earning £5,000 a year. He may say: " I am to retire at the end of June and I will be taxed this year on £5,000. I will take up £500 worth of bonds and will then be taxed on only £4,500. Next year I will have very little income. I have my capital and the interest that will come from it. My income may be only £1,000 a year. I can then redeem my £500 worth of bonds, and I will be taxed on £1,500 for the year. This, however, will be better than paying tax on the total income of £5,000 in the previous year." I think the honorable member can follow my reasoning on that. It seems to me that this amendment would be an open invitation to any person on a fairly high salary, who will be retiring on a lower income, to say, " 1 will subscribe up to £500 now, and next year 1 shall draw it, while paying a lower rate ". That is an instance of what can happen when a matter like this is put before us before we can give full consideration to its implications. I agree with the Treasurer that this is a case where consideration would have to be given and an investigation made.

The honorable member proposes that subscribers be issued with a bond. I do not know whether it is intended that that be an interminable bond, to go on forever or for the life of a subscriber, or whether after a certain period it would cease to have value. If it applied only for a period of five years and the subscriber did not marry for seven years, he would be out of luck, because the amount would accrue to his income after five years. The converse of the case of the man on a big income who reverted to a low income would be the case of a man who had a higher income at the end of five years. If there was an accretion to that income, instead of making a gain he would be penalized. In all the circumstances, I do not think that the committee can accept the proposition without further information.

The honorable member for Mackellar gave no idea of the cost in taxation revenue in any year. When a budget is presented, the Treasurer describes a certain measure, saying that it will return a certain amount for the remainder of the year and perhaps an additional amount in a full year. We then have some idea of where we are going. The honorable member has put a proposition that is designed to help young people to save. It could have an opposite effect to that which he desires in the case of persons on big salaries.

Suggest corrections