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Wednesday, 20 May 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - in reply- I thank the Senate for the gratifying reception it has given this bill. I assure honorable senators again that no large fundamental principles of the existing law have been altered. The variations made have been inspired by a desire to achieve uniformity with the States. That remark has particular reference to certain observations of the Leader of the Opposition, and I implore him not to imagine that the Government has neglected to give full information to the members of both Houses of the Parliament respecting the nature of such variations. An explanatory memorandum appropriate to a measure of this size was prepared and made available to honorable senators and other interested parties on the 11th March last. It set out clearly the wording of the existing law, and, on the opposite page, the variations proposed in this bill. The memorandum was prepared by expert officers of the Taxation Department and other gentlemen whose services were made available for the purpose. I assure Senator Duncan-Hughes that, after this bill has been passed by both Houses of the Parliament, a memorandum will be prepared and made available to the legal profession, taxation, experts and others who desire to make a comparison of the new law with the old.

Senator Collings - The Senate was not sitting in March, so members of this chamber did not receive a copy of th3 memorandum.

Senator A J McLACHLAN (SOUTH AUSTRALIA) - Apparently the document was not forwarded to the honorable senator. The Leader of the Opposition also referred to the issue of tax-free Commonwealth loans. That, I suggest, is not a matter with which, at the moment, we are concerned. It is one for decision by the Loan Council. If the Loan Council decides to issue loans free of taxation, the Commonwealth and State governments will have to bear their share of the blame or credit. I am, however, confident that if in its wisdom the Loan Council approves the flotation of loans free of income tax, it will be because of its belief that that system will not increase materially the cost of money required for industry. Senator Johnston and Senator Duncan-Hughes referred to the observations which I made regarding the Government's intentions concerning the Board of Review. Whatever may be done in that matter will not be affected by this bill. The provisions relating to the Board of Review have been retained, and will continue to operate, and Parliament will have an opportunity, if the States come into line, to consider legislation to substitute a single judge, or some other appellate tribunal, to take the place of the Board of Review. I knew that there is a considerable body of opinion that a single judge would not be able to deal with thu large number of appeals that would bc made. Senator Johnston suggested that, through the various alterations of the law made in this measure, we may be levying further tribute on primary producers, and he referred to a number of items in respect of which this bill has taken from primary producers benefits which, hitherto, they have enjoyed. The provisions contained in the bill which benefit primary producers may be summarized thus : The rebate of tax allowed in respect of business income retained in the business is, in effect, limited to primary producers; special deductions are allowed to primary producers in respect of capital expenditure on wire and wire-netting, and in respect of the extermination of pests, and clearing; the averaging provisions are retained for this class of taxpayer; the carry forward of losses is primarily in force in the interests of primary producers; concessions allowed to co-operative companies are, in practice, mainly limited to co-operative companies dealing in primary produce; and the depreciation allowed on structural improvements is restricted to primary producers. If, as the result of our efforts to obtain uniformity in taxation methods, there should be a slight increase of any burden imposed on primary producers, that additional burden will be more than offset by the provisions to which I have referred. I attended two conferences to consider the adoption of uniform taxation measures, and I was deeply impressed by the desire of Commonwealth and State Ministers and officials to achieve uniformity, in the interests of taxpayers. Five of the States are already considering legislation to implement the recommendations of the conferences. Ever since the presentation of the report of the royal commission there has been constant consultation between Commonwealth and State authorities, and also between taxation officers of the various States. The Commonwealth and State Treasurers, and officials representing the different treasuries, are confident that uniformity will be achieved, and in order that it may be maintained, arrangements have been made for periodical conferences between Commonwealth and State Ministers and officials. I thank honorable senators for their gener ally sympathetic reception of the bill.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 to 5 agreed to.

Clause 6 (Definitions).

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