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Tuesday, 29 September 1942

Mr SCULLIN (Yarra) .- I agree that the only fair system of company taxation is one of complete rebates when the profits are distributed to the shareholders as dividends, but we never have had that system. The amendment introduced by the Government of which the honorable member for Fawkner (Mr. Holt) was a member, took away the rebate, but even if that were restored, it would not do justice to the shareholders, because it would not benefit people who did not have a taxable income, whilst the full rebate never went to any one unless his rate of tax was equal to the company rate. When the company rate is 6s. in the £1, the. shareholder would not receive a full rebate unless his rate of tax were also 6s. in the £1.

Mr Fadden - There is an opportunity for the Labour Government to improve on our policy.

Mr SCULLIN - Yes; and I believe that, but for the exigencies of war, the improvement would have been effected. I have always favoured the English system : Taxation of profits in the hands of the company and, when they are distributed to the shareholders, the company tax to be rebated in full to all the shareholders. I supported the abolition of the rebate because it was not a just system of rebate.

The Leader of the Opposition (Mr. Fadden) referred to the taxation ceiling of 18s. in the £1, Commonwealth and State combined. I agree that negotiations might be re-opened with the States on this matter, but I do not agree that any further concessions should be granted at the expense of Commonwealth revenue. The Commonwealth has already made its contribution, and any concessions in respect of excess State taxation should now be made at the expense of State revenue.

Sitting suspended from 6.15 to 8 p.m.

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