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Thursday, 6 December 1973
Page: 2581

Senator McMANUS (Victoria) (Leader of the Australian Democratic Labor Party) - The Australian Democratic Labor Party will not oppose the legislation. As in the case of the other 2 Parties whose representatives have spoken in this debate, the DLP had representations made to it in regard to certain elements in the taxation field. We could suggest changes which undoubtedly in the eyes of a considerable section of the community would be seen as improvements. The position is that the Government has to have its revenue and in the circumstances we will not oppose the legislation. But I seek the opportunity to make one or two suggestions on the basis of representations that have been made to me. The first was made by the Manufacturers' Mutual Insurance Ltd which realises that it has to accept its obligations. This company makes a plea in regard to the date of operation of the legislation because of what it may have to do in reorganising its activities as a result of the amendments. The company in a letter stated:

You are, of course, aware of the obligations which will devolve on affected insurers from this amendment.

This is in regard to clause 36 of the Bill. It continued:

However, you may not be cognisant of the tremendous volume of work which will be involved. Precise overall figures of the number of cases of the type concerned are not available at this stage but they would exceed half a million annually Australiawide. Last financial year, our Company alone handled some 26,000 such cases in New South Wales. You will readily appreciate, sir, that, for such a volume, the performance of the responsibilities of a group employer (including the issue of a group certificate to each injured worker at the end of his period of incapacity) will be a major task, which could only be carried out efficiently and effectively with the aid of a computer. To prepare and test an appropriate computer program for the work would require at least 2 to 3 months.

This is a request which I hope that the Taxation Office will examine. Possibly it has already been approached on this matter. The request is that the implementation of this amendment be deferred till 1 July 1974 or, failing that, to at least 1 April 1974. Earlier implementation could force the company into a manual operating system with chaotic results.

I would like to have one question answered. This company is concerned with the advice that it says it received from the Taxation Office and that is that it must declare itself to be the employer of every claimant to whom it issues a group certificate. The company wonders what liabilities, if any, would be created for it in other areas such as payroll tax, holiday pay, sick pay and long service leave, if it were declared to be the employer. I hope that the Taxation Office will be able to answer that question.

The other matter which I wish to raise concerns a company that is interested in afforestation. The company points out that clause 1 7 of the legislation removes the outright deduction available to primary producers, including those engaged in afforestation, land clearing and other expenditure but- and here is the point- allows a deduction for expenditure over 10 years. The company claims that this penalises the bona fide afforestation companies and it outlined its reasons. It said that the normal agricultural activity involves clearing the land on a once and for all basis, that is the land is permanently improved as long as it is reasonably maintained and various cropping and grazing activities continue. Land used for afforestation is cleared but trees are replanted on the area. There is no permanent capital improvement from the initial operation. In fact as the trees grow the value of the land decreases as the land is not able to be used for other activities until it is cleared again.

The company also made the point in regard to the 10-year deduction period that, as the returns from the initial investment in land clearing and planting of trees do not accrue to the afforestation company for 20 years or more, the company is faced with substantial financial servicing costs until the trees mature which is of course very different from the ordinary primary producer who normally gets his returns every year. The company also pointed out that the existing taxation provisions have been fundamental to the viability of this rather peculiar type of agricultural activity and it has been used to offsetting the hazards of deferred returns such as the possibility of a bushfire wiping out its investment and so on. Therefore the company believes that the substitution of an outright deduction for land clearing introduces an added cost burden to afforestation. As I said earlier, the DLP will not oppose the Bill. I would like to see the Taxation Office give consideration to this matter when it is determining future policies. As I have said, this matter may already have come under its notice but I hope that the matter will be given this consideration.

I agree with Senator Maunsell that some of the new provisions introduced by the Government are a blow to the farmer. There are some people who suggest that the farmer is now on velvet. But a few years ago the farmer was far from being on velvet. Some farmers, particularly those who are in debt or who are paying off land, still have a long way to go before they can be regarded as being in a good position. I would have hoped that we could have let them run on a little longer before taking from them what some people would say is increased or renewed prosperity because, as I said before, I do not think that some of them have made up the ground that they lost a few years ago. Representations have been made to me in regard to insurance and one or two other matters. But it is the feeling of the DLP and the members of the other Opposition Parties to which I have spoken that the Government must have its revenue. For that reason we do not oppose the Bills.

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