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Thursday, 8 December 1960

Mr WHEELER (Mitchell) .- The definition of " interest " in the bill reads - interest ' means interest, or a payment in the nature of interest in respect of -

(a)   money lent, advanced or deposited;

(b)   credit given; or

(c)   any other form of debt or liability,

I should like to know who will determine questions that may arise in relation to paragraph (c). I assume that when there is a doubt on such a matter it will be determined by the Commissioner of Taxation. But I believe that the Commissioner of Taxation, for his sins, will have to decide quite a number of matters which will be placed before him and that there may be many arbitrary decisions. There is a case in point when we accept the proposition that the bill is aimed at speculators, land developers and others engaged in speculative practices. But it may happen that a builder, a developer, or a land speculator may lack collateral security and be unable to finance a venture which he has in mind or in hand. He may secure finance by a financier lodging collateral security with a third party. He may draw his finance from a cement company, a seller of builders' supplies, or a timber supplier on the understanding that if the financier guarantees his account he will pay the guarantor a fee for his services.

Another possibility is that a local council may require a bond from a land developer to guarantee that roads will be put into a subdivision and that local government requirements will be carried out. Again, the developer may secure a guarantee for which he will have to pay a fee. It does not appear to be clear, in a case of this nature, whether the fee paid to the guarantor would come under the definition " any other form of debt or liability,". I presume that such a matter would be determined by the Commissioner of Taxation.

During my speech in the second-reading debate last night, I referred to the Commissioner of Taxation having to be satisfied on various matters. As I have said, I imagine that a number of applications Wa be made to the Commisisoner to determine matters such as this and the Commissioner will have to be satisfied as to the circumstances of each case. I ask the Treasurer (Mr. Harold Holt) for an assurance that there will be a right of appeal in these matters and that that right of appeal is covered by the substantive act which this bill seeks to amend.

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