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Wednesday, 30 September 1936


Senator DEIN (New South Wales) . - I congratulate the Government upon having added extensively to the list of exemptions. The remissions this year amount to £3,000,000, of which £2,000,000 is due to reduction of the rate from 5 per cent, to 4 per cent., and £1,000,000 to the exemptions provided for in the bill now before the Senate. I do not agree with the method adopted in. making reductions, because I think itwould be preferable to retain the rate at 5 per cent., and increase the number of exemptions. In moving the second reading of the bill the Leader of the Senate (Senator Pearce) said that many articles which are an absolute necessity, including clothing and certain kinds of food, are still subject to the tax. It seems entirely wrong that, a lower rate of taxshould be charged on luxuries while necessaries will still be su'bject to the tax. When the Government is giving further consideration to sales tax legislation it should pay particular attention to this aspect of the matter. The average person would not mind paying a higher percentage of tax on luxuries if the necessaries of life were exempt.

Senator Sir GEORGEPEARCE (Western Australia - Minister for External Affairs) [4.20]. - in reply - The Leader of the Opposition (Senator Collings) complained that the exemptions proposed are to become operative before the bill actually becomes law. It was hoped by the Government that the bill would have been passed and assented to last "week, but unexpected events prevented that, and in consequence business in some of the goods affected was at a standstill, particularly in respect of tea and footwear. In response to the very pressing requests of the merchants concerned the Government decided to advance the date of the commencement of the exemptions.

I assure Senator Leckie that the Government has carefully considered the representations made for the exemption from sales tax of patterns, dies, moulds, cores, &c. It is recognized that there is some merit in the claims made for the exemption of these good3. As a matter of fact they were seriously considered in connexion with the proposal in regard to consumable aids to manufacture. An extensive investigation showed, however, that exemptions in respect of those goods would not be capable of equitable application and would produce serious difficulties and competitive anomalies. It was found that, while in some cases goods of that sort were of .a consumable nature, in many others they formed part of the permanent plant. It was also found that they were comparable with, and were used for similar purposes as, other machinery, implements and tools which ,are subject to tax. Apart from revenue considerations, it. was found undesirable, on account of the difficulties involved, to accede to the claims for exemption.

Senator Paynereferred to the desirability of including biscuits in the list of proposed exemptions. A great many of us have sympathy with that proposal. Quite a number of foodstuffs which many of us would like to see included in the list of exemptions are at present subject to tax. The honorable senator said that certain biscuits are recognized to be a food for infants. The first consideration is that if all biscuits were placed on the list of exemptions a loss of revenue amounting to £65,000 would be involved. When the Government was considering its budget proposals it set aside a certain amount for each particular tax remission, lt was faced with the fact that desirable though such a course might be, if biscuits were exempted some other item would have to be left out of the list. If the Government agreed to place biscuits on the list of exemptions what item would Senator Payne suggest should be left out? If biscuits were merely added to the list the budget balance for the year would be upset.


Senator Duncan-Hughes - The Government might consider omitting glass from the list of exemptions.


Senator Sir GEORGE PEARCE - That is arguable, but I doubt that the continuance of the tax on g'.ass would make good the loss of £65,000 in respect of biscuits. I am sympathetic with Senator Grant in his difficulty in interpreting the definitions contained in this bill. As a matter of fact I confess that I should not like to undertake the task of explaining them without the aid of the technical officers of the department. I have, however, quite a volume of explanations which I shall be glad to read in committee when we are dealing with the particular items concerned. Senator Grant has referred to item 77, " goods for use . . by public transport authorities . . in connexion with the establishment, conduct or maintenance of transport services ". It is proposed to exempt from sales tax such goods, used by public transport authorities exclusively.


Senator Grant - But why restrict the exemption to public transport authorities?

Senator Sir GEORGEPEARCE.Because it is not intended to cover private transport.


Senator GRANT - Why the distinction ?

Senator Sir GEORGEPEARCE.If the exemption were made to apply to private transport at what point would we stop ? A person owns a motor car for- the transport for himself and his family; the exemption would have to be applied to that car. It is necessary that there should be some clear line of demarcation, and the restriction to public transport provides it.


Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - Who will decide whether it is a private or public transport authority?

Senator Sir GEORGEPEARCE.The Commissioner, who would only require to examine the law of the State concerned to ascertain whether a tramway is a public or private concern.


Senator JAMES McLACHLAN (SOUTH AUSTRALIA) - What about a motor car commercially used for transport?

Senator Sir GEORGEPEARCE.Unless it is used by a public authority it is not exempted from sales tax.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 (Wireless valves incorporated in sets).

SenatorGRANT (Tasmania) [4.29].- I should like the Leader of the Senate (Senator Pearce) to explain shortly exactly what this clause means. The wording is almost unintelligible to the ordinary man, and I defy any one, other than the drafting officer and the departmental officials, to understand its meaning.

Senator SirGEORGE PEARCE (Western Australia. - Minister for External Affairs) [4.30]. - The clause is phrased in legal language, because it might possibly be the subject of litigation. It has been framed in such a way as to stand that test. Imported wireless valves have been exempt as from the 1st August, 1930. The benefit of the exemption is actually lost when valves are fitted into wireless sets and sold with them. In that case the tax is ascertained on the full sale value of the sets without reduction on account of the value of the valves. There has been serious difficulty in calculating the tax on that basis, and some taxpayers have in voiced valves, separately from sets, and claimed that the valves were sold separately. In those cases the purchasers have paid sales tax on the sale value of the set, less the cost of the valves. The Government has, therefore, decided to provide for the exemption of the valves even when incorporated in, and sold as part of, wireless sets, and to make the exemption apply as from the 1st August, 1930. Refunds of tax, amounting, I understand, to £3,000 will be made. This exemption is in a category entirely different from others in that it is in respect of only a part of the sale value of wireless sets. The exemptiou would be out of place in the schedule, as it does not fit in with the general terms of the exemption, and for that reason it has been inserted in this clause.

SenatorDUNCAN-HUGHES (South Australia) [4.33]. -I support the remarks of Senator Grant in connexion with this matter. Even the Minister himself admits that this clause is not one which the man who runs may read ; as a matter of fact, he may run if he reads it. The clause is very nearly unintelligible. The Leader of the Senate (Senator Pearce) said that it is drafted in legal language because it may be the subject of litigation, but that does not seem to be any reason why it should be couched in language which is almost incomprehensible. Legal language is not necessarily unintelligible.

SenatorCollings. - It is almost always so.

SenatorDUNCAN-HUGHES.-Some time ago, Mr. Ligertwood, K.C., delivered an address in Melbourne in which he referred to the existence, in the Commonwealth laws particularly, of language which he simply could not understand. Though this particular clause is unintelligible, I deny that it need be so for legal reasons. In saying this, I feel that I ought to have the support of Senator Brennan, because I remember that, some years ago, when the broadcasting bill was before the Senate, both he and I offered sturdy opposition to the drafting of a number of clauses which were couched in language which was not good English. I know that in technical matters it is difficult to make legislation both comprehensive and legally water-tight, but I put it to the Minister that this provision will not, be understood even by big business men, to say nothing of small storekeepers, or the man in the street. Only the officers of the department and, possibly, a few taxation experts and lawyers, will understand it. Would it not be possible for the wording of the clause to be improved ? Rather than have in the act the complicated legal phraseology now before us, I would prefer to have the Minister's explanation, for then the man in the street could, perhaps, understand what Parliament intended.







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