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Wednesday, 26 October 1910

Senator WALKER (New South Wales) . - In the year 1892-3 a great crisis occurred in Sydney by which some building societies had to come under an arrangement with its creditors for the purposes of liquidation. It was deemed desirable to alter their constitutions so as to enable them to offer easy terms to persons who were prepared to purchase properties which were under mortgage to them. The largest of these institutions was the Sydney Permanent Building Society, which found itself in a very awkward position. Its members, therefore, applied to be brought under a State Act, in order that they might obtain some measure of relief.

Senator McGregor - Was not that partially a proprietary society?

Senator WALKER - It was registered under the Friendly Societies Act, but its members had not sufficient power under that Act to carry out liquidation. They, therefore, asked the depositors who had lent them money to take properties in part payment. In this way the society has sold, I understand, about £150,000 worth of land, and, at its request, I have brought forward the amendment which I now have the honour to submit. I move -

That after paragraph d the following new paragraph be inserted : - " (da) all land owned by any building society, association, or company, registered under a State Act relating to companies, and at the time of the passing of this Act subject to a scheme of arrangement with its creditors duly sanctioned by a State Supreme Court, not being land of which such building society, association, or company has become owner by foreclosure of a mortgage ; "

This provision will really enable the large society which I have mentioned to sell land without being subject to the land tax. It has already lost thousands of pounds, and has only continued to sell land for the sake of meeting those who have lodged money with it. It would be very hard if, in addition to all the other losses which they have sustained, the members of this society had to pay land tax. The shares of the society were at one time worth £40 each, but today they are worth only £1. It is practically still a building society in liquidation. I ask the Committee to give the amendment favorable consideration.

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