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Wednesday, 20 May 1936

Senator DUNCAN-HUGHES (South Australia) . - This matter has been broughtunder my notice, and I understand that the word " necessarily " has given rise to some dissatisfaction. The Minister says it has been included in the clauses in order to catch exploiters; but surely the law, which has to be obeyed by the general community, is not drafted solely on the chance of an occasional exploiter attempting to evade it. I understand that the Commissioner construes the first part of the clause as relating only to obvious losses and outgoings, such as wages, sales of products at less than cost price, taxes, &c. ; but when it comes to matters such as expenditure on advertising, which all honorable senators will admit is an important item in any business, the Commissioner has held, in some instances, that such expenditure is out of all proportion to the needs of the business, and has disallowed a portion of it. Similar action has been taken in respect of other kinds of expenditure which are not indisputably "necessarily incurred in carrying on a business ". The original act includes the words " all losses and outgoings . . . actually incurred ".

It does not contain the word "necessarily ". The use of that word makes the justification for the expenditure a matter of personal opinion. Surely no one is more' capable of forming an opinion as to what is necessary for the proper development of a business than is the man who conducts it. In my opinion, it would be better of the word "necessarily " were deleted in favour of either " relevant " or " actually ".

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