Mr Whitlam asked the Treasurer, upon notice:

(1)   In w hut circumstances and at 'what rates is sales lax payable on works of- art. '

(2)   What would bc the loss to revenue if stiles tax were nol payable on works of art.

(3)   When ..wa> consideration last .given i to.' removing' sit lei lax from works of art.

(4)   Has it . yet been possible to calculate the "loss', to revenge if deductions were allowed under the Income Tax Assessment Act for gifts' for works of art lo bc exhibited in' parks or Squares or' buildings open to the public .(Hansard, 28!h October 1966,. page 2423; 8th November 1967. page 2869; 27th November 1968, page 3375: 9th September 1969, page 1013, 21st April 1970. page 1378 and 14th October 1970, page .21,85).

(5)   Did the State Gallery Directors write to the former Prime Minister seeking an amendment of the Act after their 23rd conference in October 1970; if so, what reply, was sent to them.-;

(6)   Has it yet been possible to calculate the loss to revenue if exemptions were granted 'under the Estate Duty Assessment Act. for- .works of art devised or bequeathed for exhibition in parks or squares or buildings open to the public. ..

(7)   Did the State Gallery Directors write to the former Prime Minister seeking an amendment' of the Act after their 23rd Conference in October 1970; if so, what reply was sent to them.

(8)   Have the mainland States yet been approached to grant exemption, as ' Tasmania does, from death and probate duties in respect of bequests to the Australian National Gallery (Hansard. 1st May 1969. page 1657 and 9th September 1969. page 1013).

Mr Snedden - The answer to the honourable member's question is as follows: ' 1

(1)   All works of. an produced in Australia are exempt from sales tax. Those produced overseas are taxable at the rate of lj per cent up/m importation or subsequent sale by wholesale in Australia unless they are covered- by an exemption provision in the law. Exemption applies to imported works of art which are:

(a)   produced overseas by- Australian artists; .

(b)   produced in New Zealand by New Zealand artists, being works of art to which the - New Zealand-Australia Free Trade Agreement applies;

(c)   lor continuous public exhibition .free, of charge; . (d) owned by, and for exhibition in, a museum or art gallery controlled by a public authority or by persons . appointed by a public authority; or - (e) for use by a body or organisation -which' is entitled to exemption in respect of all goods for its own use. for example the Art Gallery of a. State,, a government department' or a 'municipal council. . ,]

(2)   Approximately S500.000 per annum.

(3)   During the . preparation of. the "1971 -72 Budget. !

(4)   and (6) As Ho statistics are availably of gifts of works of art for public exhibition' iti the manner ' referred to. it* 'has 'nor'-'been possible to calculate ' the loss ' to" revenue' that would i'éA, It from' the allowance qf such gifts "as' -deductions For income l».\' pui puses. Similarly,, it has not been possible to calculate the lo:ss Of revenue (hat would result if bequests, of .'his kind were exempt from 'estate duty.

(5)   and (7) I am. not' aware of .their having done so. On 5th February 1970,' however, the Organising Director for State Galleries I969"7() forwarded for the then Prime Minister's consideration resolutions relating to income tax and estate duty ' concessions which were passed at the 1969 State Art Galleries Directors' Conference.

The first resolution sought an amendment of the Income Tax Assessment Act to allow as' a deduction the value of gifts of works of fine and applied arts to any public Art Gallery in the Commonwealth. 1 understand that the then. Prime Minister replied to the effect that, because the proposed amendment would create serious practical problems, might well open up avenues for tax avoidance and, .in individual cases, involve a cost to revenue of up. to two-thirds of the estimated value of a donated work pf art, irrespective of the actual cost' of the work to the donor, ' he could not hold out hope that the law would be so amended.