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Friday, 9 September 1949

Mr DEDMAN (CORIO, VICTORIA) (Minister for Defence and Minister for Post-war Reconstruction) . - by leave-I move -

That the bill be now read a second time.

By this bill it is proposed to effect the amendments of the Income Tax Assessment Act which were forecast in the budget speech. The most important of the amendments extends the depreciation allowances for wear and tear of plant and machinery. Honorable members will recall that, in 1946, measures were taken by this Government to assist the post-war rehabilitation of industry and the establishment of new industries in this country. One of the taxation concessions granted to industry at that time was the allowance of an initial depreciation deduction amounting to 20 per cent, of the cost of plant acquired or installed during the period from the 1st July, 1945, to the 30th June, 1950. The allowance has provided great benefits to industry, as it has served to offset, to a large degree, the inflated costs of new equipment in the post-war period. Leaders of industry have represented to the Government that an extension of the period of the allowance is necessary, as the high costs of plant replacement have not only been accentuated since 1946, but also are likely to continue indefinitely. To meet the needs of industry, the bill contains a clause extending the concession for a further two years until the 30th June, 1952. This extension will assist manufacturers in long-range plans for plant replacement and expansion.

At the same time, the Government has recognized that industry would be further assisted by increasing the initial depreciation allowance from 20 per cent, to 40 per cent. It is proposed in this bill, therefore, to afford taxpayers an opportunity, if they so elect, to deduct 40 per cent, of the cost of new plant in lieu of the 20 per cent, now allowed. This increased allowance conforms broadly with amendments of the United Kingdom income tax law which were made earlier this year.

The bill also contains a provision regarding the concessional rebate of tax on life assurance premiums, superannuation fund contributions, friendly society payments and the like. Since 1936, the total payments in respect of which this particular rebate is allowed to a taxpayer have been limited to a maximum of £100 in each year. Taxpayers now find themselves obliged to expend proportion.tely greater sums in order to make suitable provision for their retirement or for ;heir dependants. In recognition of this "act, the Government proposes to raise he maximum to £150. A small technical amendment included in the bill will enable taxpayers to obtain credit in respect of tax instalment stamps which they have purchased but which have been destroyed before remission in pavment of tax. As is customary with bills amending the Income Tax Assessment Act, an explanatory memorandum has been prepared for the information of honorable members. 1 commend the bill to honorable members.

Debate (on motion by Mr. SPENDER) adjourned.

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