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Thursday, 9 December 1971
Page: 4612


Mr Barnard asked the Treasurer, upon notice:

What has been the cost to revenue of tax ." exemptions granted on profits made by (a) private superannuation funds and (b) superannuation funds operated by life insurance companies, where these funds have mct the requirement that they invest 30 per' Cent of their annual increase in asse.s in public securities, for each year since 1961.


Mr Snedden - The answer to the honourable member's question is as follows:

Sections 23 (ja) and 23f of the Income Tax Assessment Act exempt from income tax the. income of certain private superannuation funds. The exemption of these funds, however, is generally conditional on their complying with the ' requirements of the '30/20 rule' that' each fund's assets include public securities the cost of which was not less than 30 per cent df the cost of all the assets of the fund, and that its assets include Commonweal. h securities, the cost of which was not less than 20 per cent of the cost bf all the' fund's assets. Certain other superannuation funds which are not subject to the '30/20 rule' may be non-taxable as a result of the special deduction allowed under sec.ion 79. A life assurance company that complies . with the '30/20 . rule' is exempt from tax on that part of its .income that is referrable to policies issued in connexion with certain exempt superannuation funds'.

(a)   Income tax statistics of private superannuation funds exempted under sections 23 (ja) and 23 p are available only in respect of the income years 1961-62, 1965-66 and 1,966-67. These statistics are incomplete as certain exempt .funds are not required to lodge income tax returns every year. However, it is estimated, on the basis of these and other published statistics of superannuation funds, that the cost to income tax revenue of the exemption of such funds (i.e., .the tax that would have been assessed if these funds had been taxed at the rates that apply to. section 23 (ja) ans section 23p funds that do not comply with the '30/20 rule') would have been approximately as follows:

(b)   No income tax statistics are available of superannuation funds operated through life insurance companies. However, from the available statistics relating to the superannuation funds of life insurance companies it has been estimated that for the 1969-70 income year the cost to income tax revenue of exempting, in respect of section 23 (ja) and section 23r- funds, the income of the companies referable to these funds it an amount of the order of $7m per annum.







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