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Thursday, 21 May 1936


Senator DUNCAN-HUGHES (South Australia) .- I think that I am right in saying that the ordinary procedure adopted by a person who is about to go overseas is for him to go first to the shipping office for a steamer ticket. When he reaches the booking office he is told that a ticket cannot be issued until he produces a passport. He then proceeds to obtain a passport, whereupon he is informed that it cannot be issued unless he produces a clearance from the Commissioner of Taxation. He goes from one department to another until eventually he reaches the Commissioner of Taxation. I understand that the Commissioner has recently adopted the practice of asking some one to guarantee payment by the traveller of his income tax if it becomes due during his absence from Australia. As a general rule a traveller begins to arrange for his passport and ticket and to pay any taxes due by him during the last fortnight before he leaves Australia. He finds himself in need of a guarantor and asks a relative or friend to act in that capacity for him while he is overseas. The friend agrees to do so. I contrast this procedure with that which obtains elsewhere. In England there is no necessity for an individual to get the permission of the Commissioner to go abroad. England is only a few miles from the Continent, but so long as one's passport is in order, a traveller can visit France, Belgium, Italy and other European States whenever he pleases.

The procedure in the Commonwealth is most cumbrous, particularly in view of the fact that no one is likely to leave Australia unless he has some means, and therefore should be in a position to meet his obligations.


Senator Sir George Pearce - That does not apply to theatrical artists. They have no assets here, and once they leave these shores they are lost to the Commissioner.


Senator DUNCAN-HUGHES -I am neither criticizing the general principle of the clause nor seeking to abolish it. I am endeavouring to improve the method whereby some individual, who has no personal liability in the matter, might be heavily mulct in a law' suit as a result of guaranteeing a friend. The financial position of a prospective traveller is often most difficult to determine, except by the Commissioner, and a guarantor might find himself liable for a large sum of money in respect of income not previously assessed, as well as future assessments. In Australia it has always been assumed that a tax does not accrue from day to day; it becomes assessable on the 30th June. But if the Commissioner thinks fit, he can require payment from the traveller in respect of any amount which is not due before granting a certificate. No provision is made in the bill for the Commissioner to require any third party to make himself personally liable for any default on the part of the traveller. I am informed that it has been attempted to make the guarantor responsible under this clause, but that the claim was eventually dropped. The committee should make it clear that there is no obligation on anybody, except the estate of the traveller himself, to pay for any taxation liability. In order to put the matter on an equitable basis, I move -

That after the word " payment," paragraph (b), the words "out of the assets of that person " be inserted.

That limits the liability of the traveller to his own estate, and does not cause any friend, who may guarantee him on the spur of the moment, to be personally liable.


Senator Collings - Any guarantor is liable for the amount which he guarantees.

SenatorDUNCAN-HUGHES.- But there is no provision in this act for a guarantee.

SenatorFoll. - A traveller may take all his assets with him.


Senator DUNCAN-HUGHES - That is so; but the Commissioner has the power to make him pay everything assessed against him before he leaves the country. Therefore, nothing else remains to be assessed against him until the 30th June next. I grant that Senator Foil has advanced what is a possible case, although a traveller who leaves Australia with the whole of his assets in his suitcase cannot be a man of much substance.


Senator Dein - He may have realized on all his assets.


Senator DUNCAN-HUGHES - It is not, I should think, an easy matter to collect the whole of the proceeds and leave Australia without leaving sufficient means behind to meet the demands of the Commissioner. I contend that the claim of the Commissioner is not against the third party at all ; it is against the assets of the taxpayer himself, and therefore should be limited to him.







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