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Thursday, 28 May 1942

Senator A J McLACHLAN (SOUTH AUSTRALIA) . - As the Minister in charge of the bill has pointed out, this measure represents the fulfilment of a promise made to Senator Spicer, on whose behalf I am now continuing the* debate, in respect of some amendments which he proposed when the original bill was before the chamber. The measure now before us gives effect to the wishes of the honorable senator, who was a member of the special committee which considered the draft bill before its introduction to the Parliament. Some comments have been offered by outside bodies regarding the effect of this legislation - comments which, I understand, have already been communicated to the Minister and his officers, and are now under consideration. There has been some criticism of the measure on the ground that it is contrary to all rules of equity and seeks to sanction the adoption of a value utterly unrelated to the real value of the subject of the gift. It is obvious that shares in a private company which carry restrictions in regard to transfer and voting power are of less value as a marketable security than if such shares were free from such conditions. The ignoring of such disabilities means that the tax is levied on an artificial basis unrelated to the real value of the asset and therefore it carries its own condemnation. The provision that the commissioner shall, be at liberty to act on the assumption that the company is in liquidation when in fact that is not so is scarcely a satisfactory solution in the view of a number of people who have no desire whatever to do anything which would be detrimental to the revenues of this country, but believe that where a company has certain restrictions on the transfer of shares, the basing of their value upon a liquidation of the company - which could not be brought about except with the sanction of the shareholders - is an unrealistic way to deal with the matter. There has also been some criticism of clause 9, which governs the amending of assessments. Having conferred with Senator Spicer on the subject, I am able to say that he appears to be satisfied that the provisions of the bill deal with that matter effectively.

Where in this bill, as well as in another measure which was before us yesterday, provision is made for assessing the value of life assurance policies taken out on behalf of another person, and where the premiums have been paid, it would be well if the Government were to harmonize the provisions of the Income Tax Assessment Act, the Estate Duty Assessment Act and Gift Duty Assessment Act, so that they may be brought into line. I understand that this matter has been brought to the notice of the Minister, and that consideration is being given to it. The Opposition has no other criticism of the bill, and will not oppose its passing.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

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