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Tuesday, 30 November 1965

Mr CLEAVER (Swan) .- Nine tests have been established under proposed new section 23f. These are a source of great embarrassment to genuine superannuation funds. As the amending legislation has been drafted, these tests fall on those funds, as well as funds which the Government intended to embrace in the legislation because they were the funds which the Ligertwood Committee said were avoiding or evading tax. Some honorable members have said in the course of the debate that these nine tests should not have fallen on the well established, traditionally known and genuine superannuation funds. I remind the Treasurer (Mr. Harold Holt) that the Ligertwood Committee pointed out that as the doors were closed on evasion every step should be taken not to affect the genuine funds. I firmly believe that the honorable member for Sturt (Mr. Wilson) is to a large extent justified in claiming that injustice has been done. There are some of us who would support him when he refers to the damage that can be done to those funds handling amounts in excess of £300 million and representing thousand of employees.

The indecision that trustees of funds have faced and will continue to face is most considerable. The administrative costs that fall upon these funds will be quite unfair. What will happen to those funds which do not attract the discretion of the Commissioner because the presentation of their case is not as complete as it might be and which do not go before a board of review? The penal tax of 10s. in the £1 will fall on the very funds that Mr. Justice Ligertwood and the members of that estimable Committee sought to protect. I submit that it should have been possible to draft a proposal to give effect to the Committee's suggestions in this direction. It should have been possible to aim this legislation at the culprit funds, not at those whose representation is sound. We should have avoided touching the well established and genuine funds. This is the situation which gives us concern at the present time.

As a Government supporter I appreciate the fact that the Treasurer was prepared at least to advocate an amendment which, as the honorable member for Parramatta (Mr. Bowen) has said, deletes the words "the Commissioner is satisfied that" and provides that where a fund is not satisfied with the decision of a board of review it may take its case to the supreme court of a State or even to the High Court. But we all know the cost and time involved in such procedures. Notwithstanding that the honorable member for Sturt may be accused by the Treasurer or anybody else of being extreme on this issue, I thick we must pay heed to his claim that superannuation funds could be severely damaged by this legislation. We are not the types, being members of the Government team, to come back later and say; " We told you so ", but we have a paramount responsibility, when we feel as some of us do in a situation like this, to make our case as strong as possible. We would remind our right honorable colleague that early in the New Year of 1966, when time will be on our side, there will be members on the Government side who will have done more research and who will be pressing for yet further amendments, trying to rectify the damage done by the amendments of last year and now by the insufficient amendments that might be accepted on this occasion. I will support the amendments -

Mr Harold Holt - What damage does the honorable member say has been done up to this point of time?

Mr CLEAVER - The damage that has been done up to this point of time is the indecision for a period of 12 months and the impression gained by so many commercial interests that the advantages previously seen in having their own superannuation funds similar to the traditional funds is not worthwhile. These funds have been put to a colossal amount of expense over the last 12 months in trying to clarify a most complex piece of legislation. While I did not intervene in the previous discussion I feel, as I said in an earlier speech, that the complexity of the law is beyond my colleagues and I if we are to be called upon in any committee that is established for other than one specific task. But when I talk about a standing committee I believe we need a standing committee to take not only one aspect like superannuation funds and submit it to research and come up with some recommended answers, butto embrace the whole field of taxation. I hope that my right honorable friend, although he has rejected the idea of joint parliamentary committees might later on think again about recommendations put forward concerning a standing committee of experts.

Mr Irwin - Why take it outside the Parliament?

Mr CLEAVER - We have a precedent for this with the Ligertwood Committee.

Mr Irwin - But we do not want to take the matter outside the Parliament.

Mr CLEAVER - If my friend can give sufficient time to the complexities of the whole of income tax law as it now stands he is a better man than I think he is. I appreciate that some amendment is to be accepted so that the full discretion regarding these genuine funds and their operation does not fall upon the highly esteemed Commissioner of Taxation alone, that a Board of Review may be approached and that there is now to be recourse, if necessary, to higher authority. I did want to go on record as saying that I am by no means satisfied that justice is being done when the full effects of these nine tests arc to be felt not just by the funds that were culprits but by all funds.

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