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Thursday, 1 October 1936

Senator A J McLACHLAN (SOUTH AUSTRALIA) (Postmaster-General) . - I move -

That the bill be now read a second time.

The measure provides for certain necessary variations of the present machinery provisions of the Wool Tax Assessment Act passed earlier in the year. In explaining the reasons for these variations, which do not disturb the basic principle of the tax, 1 may state that inquiries made after the enactment of the Wool Tax Assessment Act and cognate acts disclosed that some of the provisions of those acts would result in serious inconvenience to certain branches of the wool trade, and involve considerable expenditure in effectively policing the tax. It is anticipated that the enact- . ment of the present amendments, which are to have effect as from the commencement of the principal act, will eliminate practically all these inconveniences and reduce administrative costs to a negligible figure. Conferences held in four States by the Commissioner of Taxation with representatives of the wool-brokers, banks, manufacturers, ships' agents, and graziers, showed that all sections of the wool trade are in agreement with the proposed alterations.

The bill is designed to impose a tax on wool, first, when it is received by wool-brokers, manufacturers, scourers, or approved dealers; secondly, in the case of wool produced by such persons, at the time of actual production; and thirdly, when it is exported. Provision is made to ensure that wool which has once passed through the hands of a taxpayer shall not again be subject to tax. A variation of the class of taxpayers has been made to cover all wool-brokers, and not merely those wool-brokers who are members of the National Council of Wool-selling Brokers of Australia. At the same time, certain small classes of dealers, hawkers, and like persons, who tour the country districts buying small quantities of wool from share-farmers, mixed farmers, and small graziers, have been excluded. I ' need not stress the difficulties in effectively administering the tax so as to ensure payment, as is required under the present scheme, by persons who receive wool from the producers. The inclusion of wool-scourers as taxpayers enables the administration to treat all scoured wool as free of tax, as obviously it will have previously been received by a scourer. This removes all possibility of a double tax, which would otherwise inevitably occur, both in respect of scoured wool when it is resorted and baled, and in respect of wool which has been taxed in the greasy state and, when scoured, is not identifiable with the greasy wool on which the tax has been paid. Persons who pay the tax on wool received by them are authorized under this measure to recover the amount of the tax from the persons from whom they received the wool, thus ensuring that the tax will be borne, as intended, by the producer of the wool. The bill authorizes the giving of securities in certain cases where such action is considered neces sary to ensure compliance with the law. This provision is similar in its terms to comparable provisions 'in the sales tax legislation. Opportunity is taken in the bill to provide for four minor matters, viz : -

(a)   An amendment to enable returns to be required of all wool received or produced by a taxpayer, and not merely of wool which is subject to tax.

(b)   A declaratory provision stating in precise terms the meaning of the word " receive ". Tax is payable on wool " received ", and this definition will enable all persons to know/ when wool is received by them for a specific purpose, whether or not they are liable to pay tax thereon.

(c)   An amendment to require compliance with the export procedure prior to the acceptance by a ship's agent of the order for shipment, so that there will be no delay at the ship's side pending production to the ship's agent of the requisite documents.

(d)   A variation of the position, in regard to wool produced by a broker, dealer, or manufacturer.

Such a taxpayer will now he required to pay tax within 21 days after the date of production and not, as previously, within 21 days after the time of use by him in his business.

The remaining provisions of the bill consist of amendments to remove minor drafting defects.

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