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Friday, 10 December 1965

Mr SPEAKER - Order! The honorable member for Melbourne Ports is quite right.

The Bill does not deal with banking. A passing reference to banking will be in order but I think the honorable member for Sturt is developing his point too far.

Mr WILSON - I do not develop it any further. I was saying that this penalty tax is the perfect means of getting control of every fund and business in the country. The Treasurer (Mr. Harold Holt) said that this legislation was based on recommendations of the Ligertwood Committee. The Ligertwood Committee did not in any part of its report recommend the imposition of a penalty tax. Nobody objects to a concession being given to somebody who is doing a job in the interests of the country. We give tax concessions to exporters. I do not think anyone objects to that. What is objectionable about this Bill is the imposition for the first time of a penalty tax if superannuation funds, partnerships and trusts do not comply with certain conditions laid down by somebody outside the Government. Let us look at the discretions that are given to the Commissioner of Taxation. With regard to partnerships the discretion is expressed in these terms -

Where the Commissioner is of the opinion that, by reason of special circumstances, it would be unreasonable that this section should apply tn any income, this section does not apply to that income.

As to trusts, the discretion is expressed in these terms -

This section does not anply in relation to a trust estate ... in relation to a year of i come if the Commissioner is of tt:e opinion that il m uki be unreasonable that this section should apply in relation to that trust estate in relation to inat year of income.

So, instead of having the certainty which sound and just tax laws require, we have complete uncertainty. We have a penalty rate which is not intended to apply to 90 per cent, of the transaction, but then we provide that that penalty rate is reduced to nil provided the Commissioner of Taxation is prepared to grant an exemption. The Bill is so completely obnoxious to me that I cannot support it. I am prepared wholeheartedly to support a proper tax measure introduced to prevent avoidance of tax. My complaint is not aimed at what the Government has in mind to achieve but at the method by which the Government attempts to achieve a particular result. My objection is that the legislation penalises the genuine funds in an endeavour to catch the tax avoiders.

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