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Tuesday, 6 December 1960

Mr KING (WIMMERA, VICTORIA) - I direct my question to the Treasurer. In view of the fact that a high percentage of farm machinery, motor vehicles and the like purchased in rural areas is bought under some form of hirepurchase agreement, will the Treasurer consider increasing the tax deduction of £10,000 " or in some cases a lesser amount " which is allowable to hirepurchase companies in respect of interest on money borrowed, provided that the additional loans which such action would permit are used exclusively for primary production, thereby encouraging and not discouraging the very valuable primary industries?

Mr HAROLD HOLT - I point out that the £10,000 deduction to which the honorable gentleman refers is not likely to be of very great consequence to existing hirepurchase companies, except perhaps to some very small organizations. This measure will have a currency of only one year, and a company will have a right to deduct interest on borrowings up to the equivalent of its borrowings in the financial year 1959-60, or in the current financial year up to 15th November if that rate of borrowing proves to be higher. I should think that if a company were willing to make funds available to rural borrowers this measure would not seriously handicap it or hinder it from doing that. The companies concerned have yet to explain fully to us why they find it necessary in these circumstances, as apparently one or two have publicly announced, to reduce lendings to rural borrowers and home purchasers.

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