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Tuesday, 2 November 1971
Page: 2848

Mr ARMITAGE (Chifley) - I will not take up too much of the time of the House but there are a couple of points upon which I wish to touch. I refer in particular to the evasion of taxation through a system used by a number of companies under which sham organisations are set up on Norfolk Island to avoid taxation on the mainland. I refer also to a report of proceedings in the Bankruptcy Court earlier this year which indicated that Australian residents had used a sham company setup on Norfolk Island to avoid Australian taxation. On 11th March 1970 I asked the then Treasurer a question, pointing out to him that taxation was being avoided in this way. In reply he agreed that this was the case and said:

The Commissioner of Taxation himself has been inquiring closely into these matters and an investigation is being made.

That was in March 1970; it is now November 1971. It would be very interesting indeed to know how much taxation has been avoided in this way since that date and how much this has cost the Australian taxpayer. It is well and truly time that this investigation which was in train in March 1970 was completed and amending legislation brought before this Parliament to close this loophole.

There is another matter which I wish to deal with very quickly, and in dealing with it quickly I do not wish to detract from its importance. It concerns the treating of education expenses incurred by employed students as taxation deductions. This is a very important issue. People who are receiving tertiary education, particularly on a part time basis, should be given these taxation concessions. A person obtaining tertiary education in this manner is doing so under very difficult conditions, and any student who has any experience of these conditions knows it is one thing to receive full time tertiary education and a very different thing to take a degree course part time. For some reason or other, whilst it is recognised that I can receive the benefit of taxation deductions for educational expenses incurred through my child being at university, the student who is bearing his own costs of education cannot receive that necessary taxation deduction. I ask the Treasurer (Mr Snedden) to look at this issue closely because a great deal of hardship is being created. The present system is certainly not an encouragement to students or young people to undertake part time tertiary education.

I must also mention very briefly a question that has arisen many times in my mind. Why is it that deductions for dependants, the education of children, insurance, superannuation, medical expenses and so on are of far greater benefit to the person on a high income than they are to a person on a low income? Sooner or later in this

Parliament we must come to the conclusion that there should be a fixed amount for these items which can be claimed as a deduction. There should be a fixed amount of deduction for a wife and a family, for education, for medical expenses and the like, because it is not fair that the person on a low income should not receive the same benefit as a person on a higher income. Is it that his wife and his children are not of the same value as the wife and children of a person on a much higher income? These are issues which should be faced.

In conclusion, I revert to the matter I first raised and draw the attention of the Treasurer to the fact that one of his predecessors did say in this Parliament in March 1970 that an investigation was being made into the practice of avoiding taxation by setting up companies on Norfolk Island. That was in March 1970, and that investigation should have been finished long before now. There would have been a great deal of taxation avoided in the meantime and this is a burden on the rest of the Australian community. A report should be brought forward as soon as possible and amending legislation introduced into this House.

Question put:

That the words proposed to be omitted (Mr Crean's amendment) stand part of the question.

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