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Wednesday, 16 June 1926

Senator ELLIOTT (Victoria) .- I shall refer briefly to the amendment of which I have given notice. Amendments were suggested in the other branch of the legislature, and the Treasurer (Dr. Earle Page) intimated that- he would consider the bringing down of amendments in the Senate to deal with the objections raised. Apparently, however, that has not been done. It will be noticed in Hansard, of 2nd June, 1926, page 2535, that the Treasurer, in addressing himself to this bill, said : -

The position of ex-soldierswhobecame partners in undertakings after they went away is more difficult. Now that the war is over, and we are looking retrospectively on the position, the difficulty is to find a form of words to express what is intended without including some who are not entitled to the reliefproposed, and excluding others who are just as much entitled to it as are those mentioned.

Again, at pages 2548 and 2549, the Treasurer stated -

In regard to the cases mentioned .... the commissioner, while recognizing that an anomaly exists, cannot suggest any form of words that would meet such cases.

That is a clear recognition that distinct anomalies exist, and surely the Government should brief some one who could come to its assistance in the matter. I have drafted an amendment, and the Honorary Minister (Senator Crawford), while admitting that it may meet the case, makes various comments upon it, without denying that anomalies exist and should be rectified. It was clearly the wish of the Government and the Parliament to remove the hardships inflicted by the discriminating provisions of section 8 (3), of the 1917-18 act; to find a form of words that would provide complete and unconditional exemption for every genuine owner or partner who served in the danger zone; and, at the same time, to obviate the possibility of extending that exemption to persons not entitled to it. I submit that the incorporation of the provisions that I have circulated will achieve the desired result.The Minister stated that there should be a separate clause dealing with the matter. I do not object to incorporate the necessary provision in that form, if it will meet with the Minister's wishes. It could be moved as a separate clause after clause 4; but, as a matter of fact, clause 4 deals with exemptions, and I think that there could be no serious exception taken to making the provision a sub-clause of that clause. The enactment of the clause, as amended by my suggested provisos, would result in individuals or partners who served abroad, but not in the danger zone, having their income tax reduced to what it would have been had they remained at home. Individuals or partners who served in the danger zone, but who, on account of the anomalies acknowledged by the Treasurer, have been deprived of the exemption that they were always intended to receive, would now be definitely exempted from tax on their profits, or share of the profits, as the case may be. If the provisos are not incorporated in the clause', these particular returned soldiers will, notwithstanding their service in the danger zone, receive no further relief than the reduction of their tax to what it would have been had they remained in Australia as non-soldiers. The first proviso has been framed so as to prevent remissions of tax to persons other than those intended to receive them. The second proviso has been inserted to make doubly sure on this point. The amendment makes the commissioner of taxation the final court of appeal, and he can be relied upon to refuse to sanction any remission in cases surrounded by the slightest evidence of doubt.

Senator Lynch - Would there not be some difficulty in deciding who had served in the danger zone ?

Senator ELLIOTT - We should be able to surmount that obstacle by means of draftsmanship. The Treasurer having admitted the anomaly, and the great difficulty of dealing with it, I now put forward my suggestion as a basis on which the Government can work in order ho afford the relief intended.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 3 agreed to.

Clause 4 - (1.) Where the profits derived during any financial year or accounting period by any individual or partnership were, or are liable to be assessed under the War-time Profits Tax Assessment Act 1917, or under that act as subsequently amended, and that individual or any member of that partnership was, under any law of the Commonwealth or of a State relating to the imposition of income tax, entitled, by reason of being on active service during the war which commenced on the 4th day of August, 1914, to an exemption from or a reduction of the income tax he would otherwise have been liable to pay in respect of income derived in that year or period, the assessment shall be altered or made so that there shall bc deducted from those profits the amount of income tax which would have been payable, under that law of the Commonwealth or of a State, if -

(a)   in the case of an individual - those profits; or

(b)   in the case of a partnership - the share of that . member in those profits, had been the only income derived from sources within Australia by that individual or member during that year or period, and he had not, under that law of the Commonwealth or of a State, been entitled to an exemption from or reduction of income tax on account of such active service.

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