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Thursday, 17 September 1942

Senator KEANE (Victoria) (Minister for Trade and Customs) .- I move -

That the bill be now read a second time.

In introducing this bill for the imposition of a uniform entertainments tax for the whole of Australia, I desire to explain to honorable senators that for some time the Government has had under review the question of diverting to the Government some portion of the amount expended upon amusements, some of which has been made available to the people by reason of the extraordinary war expenditure by the Commonwealth Government. Despite the curtailment of many forms of sporting activities, attendances at entertainments show a tendency to increase. The Government does not wish to impose undue prohibitions on the people, but it is of the opinion that, whilst many of our men are absent on active service, and many others are working additional hours in war industries, those who still have the leisure and the money to frequent places of entertainment should be prepared to make a contribution to the war effort when they do so. In order to give effect to its desire for a uniform entertainments tax, the Commonwealth Government asked the States at a recent conference of Commonwealth and State Ministers to vacate the field of entertainments tax and leave it entirely to the Commonwealth upon the payment of compensation to the States. At the request of the conference, the Commonmonwealth put its proposals in writing, and the States have agreed to vacate the field, but some of them have asked that the basis of compensation should be the revenue derived by them from this source for the financial year 1941-42. The Commonwealth had proposed that they should be compensated upon the average revenue received by them for the financial years 1940-41 and 1941-42. In making this proposal, the Commonwealth Government adopted a basis similar to that recommended by the Committee on Uniform Taxation in respect of compensating the States for vacating the field of income tax. However, as the increased compensation payable on the basis requested by the States involved only a relatively small amount, the Government decided to accede to the request. The necessary measure to provide for this compensation will come before this chamber shortly, and I shall then give honorable senators a more detailed explanation of the basis of compensation.

The rates of entertainments tax proposed are heavy, and will serve to bring home to patrons that this country is engaged in a war involving the freedom of the people. This is the second occasion upon which the Commonwealth has obtained revenue from an entertainments tax. This field was entered for the first time during the last war. After the end of the war, the Commonwealth progressively vacated the field, leaving it finally in 1933, as one of the measures forming part of the financial arrangements made to enable the States to recover from the effects of the depression. As the Commonwealth vacated the field it was progressively occupied by the States, except Queensland, where no entertainments tax has been imposed by the State government. The present bill follows substantially the lines of the previous Commonwealth legislation, which also formed the basis for the measures passed by the States. Consequently, there will be a continuity of policy in main principles in those States in which an entertainments tax was imposed. The bill provides for the exemption of a number of classes of entertainments such as those where the whole of the takings, without any charge being made for any expenses of the entertainment, are devoted to public, patriotic, philanthropic, religious or charitable purposes. Exemption is also granted in respect of entertainments of a wholly educational character, as well as entertainments of a partly educational and partly scientific character conducted by a society, institution or committee not carried on for profit. Entertainments in respect of which the whole of the net proceeds are devoted to the erection, maintenance or furnishings of memorial halls for the use of soldiers, sailors or airmen are also exempted. In addition to these exemptions, there is an exemption for entertainments where the net proceeds are devoted to public, patriotic, philanthropic, religious or charitable purposes, or to such funds of a society or association not carried on for profit as are set apart to provide sick, accident or funeral benefits on behalf of its members, and where the expenses of the entertainment do not exceed 50 per cent, of the receipts thereof. There is a proviso that if such expenses exceed 50 per cent, of the receipts by reason of inclement weather or other unforeseen circumstances, the Commissioner may still grant the exemption. The bill also provides for the imposition of the tax upon dinner or supper dances and similar entertainments which escaped tax in the past owing to a flaw in the legislation. No attempt will be made, however, to impose the tax upon meals which are accompanied by incidental music.

The bill provides for the registration of all entertainments. It also imposes an obligation upon the owner, or lessee, of the premises in which the entertainment is held to see that no unregistered entertainment is held on his premises. The tax is collected by the person controlling the entertainment, and is paid over to the Commissioner of Taxation. The tax is paid by the person conducting th» entertainment either prior to the enter tainment by the purchase of tax tickets, or, if. he has made arrangements with the Commissioner, and. has supplied a satisfactory security upon returns made to the Commissioner, after the entertainment has been held. The usual provisions are included in the bill for the imposition of penalties for offences against the provisions of the act.

The Government estimates that the gross revenue that will be collected for a full financial year will be £3,250,000. The compensation payable to the States will amount to approximately £765,000, leaving a net revenue to the Commonwealth of about £2,485,000. For the balance -of the current financial year it is expected that the gross revenue will be about £2,430,000, out of which compensation, amounting to £575,000, will he payable to the States, leaving a net revenue to the Commonwealth for the current financial year of £1,855,000. The bill provides that the tax will operate on and from a date to be proclaimed. The intention of the Government is that the date of commencement shall be the 1st October, 1942. It is provided that this legislation will continue for the duration of the war and one year thereafter.

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