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Wednesday, 11 October 1972
Page: 1477


Senator YOUNG (South Australia) - I rise to support the 3 Bills before the Senate and particularly the. amendment moved on behalf of the Democratic Labor Party by Senator Byrne. But firstly 1 commend the Treasurer (Mr Snedden) on one of the very good features of the Budget - the increases In the - levels of exemption from estate duty. Two years ago we also saw increases in the .levels of exemption which were a great help to the rural industry in Austrafia at that time. However, f am particularly' pleased that on this occasion the Government has taken these provisions across the broad spectrum and these exemptions will, apply to all people although there are further benefits for the man on the land. Senator Webster said this afternoon when speaking in support of these 3 Bills that he was pleased that the Government proposed in this legislation to double the exemption limits. The general exemption limit will now be $40,000 for an estate passing wholly to relatives - previously it was $20.000 - and $20,000 for an estate passing to other persons. The exemption for primary producers will now rise to $48,000 where the estate passes directly to family dependants and close relatives, and to $24,000 where it passes to people outside the family.

This is. not the first occasion on which I have spoken on estate duties either in this chamber or before I came into the Senate. I have spoken not just on the aspect of exemptions from estate duty; I have always supported the concept of complete abolition because I feel that estate duty is one of the most iniquitous taxes ever levied on a community. It was mentioned tonight that it was the Australian Labor Party which introduced estate duty. It was introduced not so much as a source of revenue but primarily to break up large estates. No doubt it has had an effect in this respect but today we have a completely changed set of circumstances which has been with us for quite some time. There are 2 areas on which one could pass comment. People do not work just for themselves. The good honest citizen is one who works for his family and in the process of working for his family he also works to give his family security. That security should not be whittled away when the breadwinner or one of the senior partners of the family unit suddenly passes from this good world. But we have this situation where a penalty is imposed upon those people who have made honest endeavours throughout their lives to do what they could for their families and dependants who are now penalised by this iniquitous form of taxation.

We can go further and relate this situation to the rural industry in which we have seen in recent years not just problems but great tragedies faced by many families through the application of estate duty. This duty works completely in reverse to this Government's fiscal policies. We have rural reconstruction and farm build-up schemes which endeavour to establish farms of an economically viable size but we find that estate duty is working completely in reverse to these schemes. Through Government policy there is an honest endeavour to provide financial and other assistance to encourage farm build-up and economic viability but at the same time we have estate duties which are doing completely the reverse by creating what one could call a farm break-up situation. This goes further than just the rural sector and I commend this Bill because it covers the broad spectrum of the population. Many widows in urban areas have been heavily penalised by the application of probate and estate or succession duties, or what I shall call State and Federal death duties. It is not the home earner's fault if his home suddenly becomes a very valuable asset. I say good luck to those people who, as a result of wisdom and thrift and solid application throughout their working lives, have managed to save money and who, as a result of investments, have built up a nest egg. But suddenly, when the husband dies, the estate is valued and his widow is penalised.

Yet, living in the same street can be someone who has gone through life without caring about saving - 'thrift' was the last word he ever used - and who has made no contribution whatever to his family's security. I could name widows who have had to sell their homes and properties to meet the estate or death duties in both the Federal and State areas. Therefore I repeat that this is one of the most iniquitous taxes ever applied. I say that it is far better for people to pay taxes while they are earning income and are able to pay them than to apply a penalty to their dependants after a senior member of the family has died. Nobody can say when Le will die; this is one thing in this world of which no-one can be sure. But at certain times or in certain circumstances a death in a family can have very adverse effects on the dependants.

I recall occasions during the previous wool boom and the mining boom when a couple of people came to me with tragic problems. One which was caused by the mining boom concerned people who because of their thrift were able to purchase certain shares. At the time of the death of one of the family the shares were valued very highly. Yet by the time the estate was wound up the shares were not worth much more than the paper they were written on. Still, the family had to pay death duties on the basis of the higher value. This procedure has created great tragedy and hardship. A similar situation has applied when people learned that commercial values at inflated prices had been applied to apparently productive properties which in fact did not have the capacity to earn enough for them to pay probate and death duties over the years and so portions of the properties had to be sold to meet these duties. These are examples that show why I am completely against death duties.

The Budget has increased the gift duty exemption level from S4,000 to ยง10,000. I am very pleased about this because I think gifts are one way in which a person is able to help his family. An unfortunate aspect, however, is that, while the Commonwealth Government has increased the exemption level to a maximum of $10,000, some States retain a very low exemption level by comparison and quite high rates of duty and in many cases people are not much better off now than they were. I would hope, as Senator Primmer said tonight, that the State government will try to ease this duty in order to assist people to pass on some of their savings, which they have earned by a conscientious approach to their job and by applying thrift throughout their working lives, for the security of their families. They should be given the opportunity to pass some of their wealth and hard earned savings to their family dependants. I believe that people should be allowed to do this because, whether the savings be reasonably small or large, all of us place prime importance upon our family units and wish to ensure that we leave them secure. 1 repeat that I wholeheartedly support the 3 Bills which are before the Senate tonight. I commend the Treasurer for introducing them in the Budget. I will support, as I always have since I became a member of the Senate, any proposition for the abolition of death duties, I wholeheartedly support the amendment moved by Senator Byrne.







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