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Wednesday, 19 October 1949

Mr SPENDER (Warringah) .- This is a bill to amend the Income Tax Assessment Bill 194S. It covers two subject-matters. It extends the depreciation allowance for wear and tear of machinery. The original depreciation deduction was allowed in 1946. It amounted to 20 per cent, on plant acquired or installed during the period up to the 30th June, 1950. The "bill extends the period of the concession :to the 30th June, 1952. In addition, it increases the depreciation allowance from 20 per cent, to 40 per cent., and "brings the allowance into line with that "provided for in income tax legislation of Great Britain. That is the first subject matter with which the bill deals. The only other thing that it proposes to do is to increase the concessional allowance on "life insurance premiums, superannuation fund contributions, payments to friendly societies and the like from £100 to £150 a year. At this stage, it is rather important to observe that, prior to the general election, the only concessions that the Government proposes are concessions to those engaged in industry, particularly big industry, the usefulness of which I do not dispute, and an increase of the concessional allowance in respect of premiums oh life insurance policies and the like to £150 a year.

I want to say something about t,he oppressed middle class of Australia; but, before doing so, I must say that it is passing strange, indeed, that this legislation gives concession to only two sections of the country. The first is to big industry, for the most part, because that is the section that will benefit most from the depreciation concession, and in the allowance in respect of new plant, which I support The second is to those who pay in excess of £100 a year by way of life insurance premiums and the like. When the budget was before honorable members, I remarked how strange this was, and it seems that that observation should be repeated, because the public will, no doubt, be aware, that between the passage of the Income Tax Assessment Act 194S and the introduction of this bill, this Parliament passed into law a system for the payment of pensions to former members of the Parliament, under which each member contributes £156 a year to the pension fund. Before the introduction of the pension scheme, the maximum concessional allowance in respect of such contributions was £100 a year. The question that one asks immediately is why it is that the only concession allowed to individuals under this legislation is a concession that happens to satisfy and play into the hands of members of the Parliament.

Mr Scully - Stupid !

Mr SPENDER - The Vice-President of the Executive Council says, " Stupid ! " He is an expert in stupidity, because the only thing he ever does for his salary is to move the gag.

Mr Scully - I have a rival in the honorable member as far as stupidity is concerned.

Mr SPENDER - Let the VicePresident of the Executive Council go out and explain to the public how it comes about that the only concession given to the public is an increase from £100 to £150 a year in the amount of permissible deduction for the purposes of income tax assessment in respect of payments into pension funds and the like. How does it come about that the amount almost exactly coincides with the amount that members of Parliament pay annually towards a pension ?

Mr Scully - The honorable member is too silly.

Mr SPENDER - The Vice-President of the Executive Council may say that and keep on saying it as often as he pleases, but the public, particularly the middle class, who have been seeking some concessions will understand the' position very clearly. They will want to know why a concession like this is given, and no other. I might ask the Vice-President of the Executive Council, who is supposed to represent the labouring masses in this Parliament, what particular section of the labouring masses pays in excess of £100 a. year in insurance premiums. Perhaps he will give us an answer to that one. "Why was this concession introduced? To satisfy the people on very low incomes ? The answer is " No " ! Only a man with substantial means' is able to pay each year in excess of £100 in insurance premiums. If that is not the reason for the legislation are we to understand that the Labour party has introduced this sole concession to satisfy the rich people? Such an action would represent a peculiar change of front on the part of the Labour party. So the only conclusion we can come to is the one that I have stated, which is that when the Labour party caucus came to consider this matter its members said, " Well, we only get a permissible deduction of £100. The amount which is compulsorily taken from our salaries for the parliamentary pension fund is £156 a year. We ought to increase the amount of concessional deductions so as to adjust the difference ". Whatever honorable members opposite might say, that is the inference that I draw from the Government's action. This concession is the only one that the budget gives to a sorely harassed section of the community. I want to make some remarks about that section of the people which is generally described as the middle class.

Ever since the Labour party has been in power it has considered itself to be in office solely for the purpose of giving concessions to those upon low incomes or the basic wage. I am all in favour of giving concessions to those on or about the basic wage, but there is a middle section of the community which requires some consideration and which has received none whatever from this Government. It is quite true that taxation upon those below the £500 per annum range, apart from social services contribution, is nil, or practically nil. The Government has done little, however, for the people who earn, for example, between £500 and £700 a year, although they constitute a large section of the community. It is strange that the Government has done something for age pensioners who have no property whatever except, perhaps, their homes, whilst a section of the community which includes people who, having some personal pride, have struggled throughout their lives to set aside some money so that when they reach their old age they need not depend upon charity, has received no special concession. The fact is, as every honorable member who has given consideration to this matter knows, that those people who have struggled so hard to set aside something for their old age are in a worse position, as far as income is concerned, than those who have squandered all they earned and are solely dependent now upon the age pension. I am making a special plea for those people, because I am here to present the case for this middle section.

Mr Dedman - What' does the honorable member mean by the middle section ?

Mr SPENDER - The middle section consists of people who are receiving between £500 and £800 per annum. Shortly I shall relate those earnings to real income on the 1939 basis, because it is not of much use to talk about money these days. The important thing is to refer to it in terms of what it will purchase.

Mr Dedman - I rise to order! W li fi r relationship have the honorable member'? remarks to the bill?

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