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Friday, 22 July 1921

Senator PRATTEN (NEW SOUTH WALES) . - Reading between the lines, a statement made by the Acting Prime Minister would indicate that he believes it to be necessary to spend more money on the Taxation Office. Such a suggestion has my support.For some years the Taxation Office has been faced with the difficulty that it has been losing many of its best officers owing to the miserable salaries that can be offered by the Commissioner for Taxation.

Senator Pearce - And the temporary nature of the employment of many officers.

Senator PRATTEN (NEW SOUTH WALES) - Exactly. Any step taken by the Treasurer (Sir Joseph Cook)inthedirectionreferredtowould be regarded by me as tending to greater efficiency, and greater efficiency, in my view,, represents greater economy.

I do not propose, in discussing this schedule, to deal with the general principles on which the finances of the Commonwealth should be administered. But I do wish to refer to another matter of administration connected with the Taxation Office, and, to some extent, with the Crown Solicitor's Department. I refer to the indefinite position at present existing with regard to the attempted taxation of bonus shares. I have gone into this question, because it is agitating the whole; of the commercial community of Australia. I am referring to the matter now in order that my remarks may be recorded in Hansard, for the consideration of the Treasurer at his convenience. The position, so far as I can ascertain, is that the Commissioner for Taxation thinks that under the present law theaction he is proposing, is mandatory. If the action proposed by the Commissioner for Taxation is carried to the conclusion to which he suggests it should be carried, I am afraid that tragic injustice will be inflicted upon thousands of shareholders in New South Wales. A period of inflation has been followed by the present period of deflation. So far as I can see, the commercial community, as a whole, will scarcely be able to retain, and, in fact, will lose, during the present period of deflation the profits, if any, which they made during the period of inflation. As an illustration- of the unfair and unjust effect of the taxation of bonus shares, if carried out as proposed, I may refer to some shares in which I am indirectly interested as a. trustee. I think that a year or two ago about one share in ten was given in the capitalization of reserve profits that had already paid a flat rate of taxation. The whole of the shares in the company, the one in ten given, -and those paid for at. par, are now valued on the market at 3s. per share, andI am doubtful whether they will ever bring any more.

Senatorcrawford.- Are they £1 shares?

Senator PRATTEN (NEW SOUTH WALES) - Yes. I givethis as an illustration of the injustice that is goingto be done if we are not very careful. Idonotdesirethat theCommissionerofTaxationorthe

Crown Law authorities should lead the Government into a position where the High Court may have to intervene, and where, if it does not intervene, complexities and complications will arise which, so far as administration is concerned, will be worse than those which arose in connexion with the administration of the war-time profits tax.I do not expect the Minister for Defence (Senator Pearce), who is in charge of the Senate, to give a direct reply to my remarks, which are merely intended to initiate a serious consideration of the wholequestion involved .

I find that, under the heading of " Miscellaneous," there is a vote included for the maintenance of persons admitted into charitable institutions and hospitals. I have promised the inmates of hospitals in my own State to do my very best to secure for them an extra allowance where with to purchase sweets, tobacco, or papers. The matter has been referred to on more than one occasion by more than one member of the Senate. It would not cost very much to do what is suggested, and it would add to the alleviation of the conditions of life of elderly people who, in accordance with nature's laws, have not very much longer to live. I feel sure that if these remarks are passed on to the Treasurer he will, in view of the large surplus that has resulted from the. year's transactions, be in a frame of mind to consent to earmark the few hundreds of pounds required to comply with the suggestion I have made.

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