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Friday, 24 April 1936


Senator Sir GEORGE PEARCE ("Western Australia) (Minister for External Affairs) [11.7]. - I move -

That the bill be now read a second time.

The purpose of the bill is to provide for refunds of flour tax paid by bakers, storekeepers, and other persons, who are not flour-millers, on flour held in stock as at the date of the termination of the tax, namely, the 24th February, 1936.

The bill contains provisions which were originally enacted for a similar purpose, but were repealed in December, 1935, when the law was amended to provide for the continuance of the flour tax after the 6th January, 1936, the original terminating date of the tax.

The reason for the repeal of the refund provisions was that it was contemplated at the time that the flour tax would continue until the inauguration of the plan for securing a home-consumption price of wheat. The refunding of tax on flour accumulated at a point of time marking both the termination of the flour tax and the commencement of the wheat plan would have resulted in the freeing of such flour, not only from the flour tax, but also from the burden of the increased price, under the plan, of wheat sold for home consumption. This would have led to a serious dislocation of the wheat and flour markets as the time of transition approached, and also to serious competitive anomalies in the marketing of wheat products after the inauguration of the plan.

By dissociating the termination of the flour tax from the inauguration of the wheat plan, these considerations have now lost all significance, and it becomes necessary to restore the original character of the tax as a levy on flour consumed in Australia during the period of its operation, that is, from the 7th January, 1935, to the 24th February, 1936. To do this it is essential to provide for refunds in respect of tax-paid stocks of flour held on the 24th February, 1936; otherwise, the tax would amount to a levy on flour consumed after that date to the extent of the tax paid on stocks so held.

Honorable senators will realize, also, that failure to provide for the refund of tax paid on stocks held on the 24th February, 1936, would impose serious competitive burdens on bakers holding considerable stocks of flour on that date, as such bakers, until they had exhausted those stocks, would be forced to sell bread made from tax-paid flour in competition with bread made from tax-free flour by bakers having little or no accumulation of flour at the termination of the tax.

In addition to restoring the repealed refund provisions, the bill contains other more or less related provisions. In the first place, paragraph a of clause 2 is designed to prevent a miller's refunds in respect of bad debts exceeding the tax passed on by him to his purchasers. Again, there are other provisions so drawn as to prevent the making of two refunds in respect of the same flour, namely, a refund to a baker who held flour in stock on the 24th February, 1936, and a refund to a miller who had written off the sale price of the flour to that baker as a bad debt. It is also desired to obviate, as far as possible, the necessity to hold up refunds until the miller is fully paid for flour purchased from him by persons who held it in stock on. the 24th February, 1936. This is made possible by providing for millers to give undertakings not to claim refunds for bad debts, and, in other cases, for refunds to. be proportionate to the amounts paid off the miller's account for the flour. The necessary legislative provision is made in paragraph d of new sub-section 8 of section 24.

The final matter in the bill to which I wish to refer is contained in paragraphs el and e of clause 2. These paragraphs provide for an amount due as a refund to any person to be set off against any amount owing by that person for tax or penalty under either the Flour Tax Assessment Act 1933-1934, or the Flour Tax Assessment Act 1934-1936, or under any Sales Tax Assessment Act.

In conclusion, I desire to inform honorable senators that it is estimated that the refunds provided for by the bill will amount to £100,000.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clause 1 agreed to.

Clause 2 -

Section 24 of the principal act is amended-

(c)   by inserting after sub-section (6.) the following sub-sections : - " (7.) Subject to this section, the Commissioner shall pay to any person who, at the close of business on the twenty-fourth day of February, One thousand nine hundred and thirty-six, holds stocks of flour which is chargeable with tax under this act, an amount which represents the tax so chargeable upon the quantity of that flour in excess of one thousand pounds in weight:

Provided that where the flour so held in stock, by that person has been purchased by him at a price which includes portion only of the tax chargeable thereon, the amount payable to him shall not exceed an amount equal to that portion of the tax included in the purchase price. " (8.) Apayment shall not be made to any person under the last preceding sub-section in respect of flour held in stock by him unless the Commissioner is satisfied that -

(a)   that person has paid the tax chargeable under this act in respect of that flour;

(b)   that person has purchased that flour from a vendor who has not paid, and is not liable to pay tax thereon at a price which includes the tax, or a portion of the tax, chargeable thereon ;

(c)   where that person has purchased that flour from a vendor who has paid, or is liable to pay, tax thereon at a price which includes the tax, or a portion of the tax, chargeable thereon - he has wholly or partly paid that price; or

(d)   where that person has purchased that flour from a vendor who has paid, or is liable to pay, tax thereon at a' price which includes the tax, or a portion of the tax, chargeable thereon - the whole or part of that price is unpaid and that the vendor of the flour has given to the Commissioner an undertaking not to make a claim for a refund under sub-section (5.) of this section in respect of the tax so paid or payable by him.

Amendment (by Senator Sir George Pearce agreed to -

That the words " holds stocks of flour which is",proposed sub-section (7.), paragraph (c), he left out with a view to insert in lieu thereof the words. " held stocks of flour ".







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