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Tuesday, 25 November 1941

Mr CHIFLEY (Macquarie) (Treasurer) . - The Leader of the Opposition (Mt. Fadden) asserted that companies will not find it worth while to carry on if the Government persists with what he termed "this harsh taxation". I remind the honorable gentleman that the bigger companies, such as the Broken Hill Proprietary Company Limited and the Colonial Sugar Refining Company Limited are in the position that, regardless of whether they ma&e profits out of the war, they will be among the first to leave the starting barrier in the post war era. That is one of the principal incentives which they have to carry on their operations. Unquestionably, they are consolidating for the of postwar activity, a position which they never hoped to gain in peace-time. Their operations have considerably expanded, and they have an opportunity to experiment .at the expense of the community. As a result of the exigencies of war, they have, also, been able to crush small competitors.

I appreciate ,me contentions of the Leader of the Opposition regarding severe taxation. His amendment, if adopted, would relieve the Government of revenue totalling £800,000 & year, but the How of additional money from the companies into the hands of shareholders in the form of dividends would increase receipts from income tax and reduce the loss by £200,000. Consequently, acceptance of the amendment would, in the final analysis, .-mean that revenue from this source would be reduced .by £600,000. When replying to the general debate on the .budget, I intimated the Government's willingness to weigh anT submissions for modifying proposals that might cause undue hardship. The Government believes that taxation should be imposed upon every person, .who has the ability to pay it. Appeals to sentiment do not influence me as Treasurer, because I think in terms of ability to pay. But despite the loss of revenue, the Government will accept the amendment in order to meet the criticism that the legislation is extraordinarily harsh.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 5 -

Section twenty-four of the principal act is amended by omitting from sub-section (0.) the words " Twelve thousand five hundred .pounds " ( twice .occurring ) and inserting in their stead the words " Twenty-five thousand pounds ".

Section proposed to be amended -

(6)   Where the amount of capital employed by a .company {.not being a subsidiary company) ^during the accounting period is less than Twelve thousand five hundred pounds, or where a company fails to supply any information required by the Commissioner for the ascertainment of its capital employed, the amount of Twelve thousand five hundred pounds 'shall, subject to section twenty-five of this act, be deemed to be the amount of capital

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