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Wednesday, 19 October 1949


Mr DEPUTY SPEAKER - Order ! The honorable member must connect, hi:remarks to the bill.


Mr SPENDER - I propose to do so, and my observations are directly directed to-


Mr DEPUTY SPEAKER - Order ! The honorable member may refer in discussion to the actual clause.


Mr SPENDER - That is what I am doing, with great respect to you, Mr. Deputy Speaker. This is a bill to amend the principal act, and in the whole of my experience in this Parliament it has never been the rule to prevent an honorable member from dealing in a secondreading speech on behalf of the Opposition, when a bill to amend a principal act has been introduced, from saying that there ought to be further amendments to the principal act to deal with a matter in respect of which the amending bill does not go far enough.


Mr DEPUTY SPEAKER -Order! The Chair rules that the discussion must be confined to matter covered by the bill, and the honorable member must so confine his remarks.


Mr SPENDER - Do I understand you to inform me, Mr. Deputy Speaker, that I can do no more than to say whether I agree with this bill or not?


Mr DEPUTY SPEAKER - Order ! The honorable member is entitled to make a policy speech on these matters outside the Parliament; but he is not entitled to discuss now matters that are not relevant to the bill.


Mr SPENDER - I beg your pardon.


Mr DEPUTY SPEAKER - Order ! If the honorable member intends that remark as impudence I shall ask him to resume his seat. The honorable member knows that when I am on my feet the rules of the House provide that he must resume his seat in any event. The Chair will be the judge of whether the honorable gentleman is in order or not, and if the honorable gentleman does not keep to the bill I shall ask him to resume his seat.


Mr SPENDER - I was endeavouring to keep to the bill. I say that this bill gives one concession, and one concession only, to private , citizens and that is an increase of the permissible deduction in respect of payments for insurance premiums, from £100 to £150. I have already said, and I now repeat, that this concession can benefit only an exceedingly limited section of the community, because there are very few people in this country, and I want to repeat it-


Mr DEPUTY SPEAKER - Order ! The honorable member can be charged with monotonous repetition.


Mr SPENDER - If the Chair desires to stop me, it could do so. I am seeking, on behalf of the Opposition, to put the Opposition case in this matter.


Mr DEPUTY SPEAKER - Order ! The honorable member is entitled to put the case once, but he is not entitled to keep on repeating it.


Mr SPENDER - You mean, Mr. Deputy Speaker, that I cannot go beyond what is in the bill, while the Minister for Post-war Reconstruction sits at the table smirking and encouraging me to say more than I am entitled to say ?


Mr DEPUTY SPEAKER -Order! The honorable member is not entitled to make a speech along these lines. He must speak to the bill and he is not entitled to repeat what he has previously said. There is a standing order which provides that a member must not indulge in repetition.


Mr SPENDER - I say, with respect, that this bill should have made provision for other sections of the community. In my opinion the concession that it grants does not go far enough. There are very worthy sections of the community, for example the middle class, who areentitled to concessions before this concession is approved by the Parliament. I shall oppose the passage of this legislation unless concessions are made or promised to people in the middle income group who are entitled to them. There are people in this country who are struggling to live within their means. I want to show that those on incomes of, for example, between £500 and £600 a year, who belong to a class which cannot afford to spend more than £100 at the very outside for insurance premiums, have a disposable income now, when the increase of prices is taken into account, of not more than £330. The £1 is shrinking in purchasing power. That decrease in real value is, in point of fact, a direct result of the policy pursued by this Government. I have in mind a very deserving section of the community which includes the professional classes, small businessmen, superannuated civil servants, and a large section of civil servants, who are struggling very hard to make ends meet and who are not succeeding in doing so. I am opposed to a concession that primarily will serve as a class the members of this Parliament. I am, therefore, speaking directly to the bill when I say that the reason for my opposition to it is that there are some deserving sections of the community to which this budget and this particular bill offer no real concession at all. The total number of people who fall within the £500 to £600 per annum group is just under 300,000. Those who fall within the £600 to £800 per annum group number somewhat under 200,000. I know these people better than most honorable members opposite, and I know that they are endeavouring to give their families a " fair go ". They do not want to accept charity and medical benefits. It would have been a good thing had the Government, before proposing this present concession, allowed the people to have a straight-out deduction in respect of medical expenses. Let me give point to that statement. To-day a concessional allowance deduction of £150 upon an income of £500 represents only £11 14s. of income tax rebate. On an income of £S00 it is £17 3s. So, although it is said that we enjoy a concessional deduction, the deduction is not worth a great deal of money, particularly to taxpayers on the middle ranges of income. I contend that this hill should not receive the approval of this Parliament while so deserving a section of the community continues to be ignored by the Government. lt would be proper for the Government to give to the citizen the right of a straight-out deduction.

I am wholly opposed to the concessional deduction system. Concessional deductions are misleading. This system makes it appear that a real deduction is given when in the final result only a fractional deduction is granted. Taxpayers should be allowed straight-out deductions in respect of all medical expenses. After all, if the expenditure of a taxpayer, his wife and children on medical expenses amounts to £100 - that would be an extreme amount for those on the middle income ranges - the concession granted would amount to much less than £20. Of what value is such a concession to a taxpayer in the middleincome group? I believe that it is proper to encourage people to pay their own medical expenses if they think fit. Thosewho do so should receive some encouragement from the Government. The system of concessional deductions should hereplaced by the straight-out deduction method, particularly in respect of dental and medical expenses.

Another matter which should have been considered by this Government before it decided to- increase the concessional deduction in respect of insurance premiums and superannuation payments, which, after all, primarily benefit members of the Parliament, is the allowance that is granted in respect of a taxpayer's wife and children. That, too, is a concessional allowance. In these clays, although such an allowance may appear to be very substantial, it does not amount to much in terms of money. I want to make one or two observations on that point. The first is that a straight-out deduction should be made in respect of the allowance for the wife and children of a taxpayer. TheGovernment professes to believe in increasing the population of this country, but it never gives any real evidence that it desires parents to have large families. One of -the ways in which it could encourage them to do so would be to givethem straight-out deductions in respect of all children under a certain age. That should be done quickly if the middle-class section is not to be depressed out of existence. My second observation is that the concessional deduction in respect of the wife of a taxpayer is dependent on theincome of the wife not exceeding £100 a year. That provision and the provision which relates to concessional deductions for medical expenses should be reviewed in accordance with modern conditions. An income of £100 a year is very small in these days. Despite the fact that the cost of living has increased and the valueof money has rapidly diminished, the Government still clings to the old limitation, and under the system of concessional deductions as distinct from straight-out deductions the benefit to the taxpayer becomes less and less.

Another matter to which attention might well be given is the desirability of allowing deductions in respect of school fees paid by taxpayers. It seems to be the general opinion of honorable gentlemen opposite that no allowance should be made for school fees because educational facilities are provided in State schools free of cost. Denominational and private schools perform a very useful service to the community. Although I was educated at a State school, I am completely opposed to the view that every child should go to a State school. It is a wise policy to encourage not only State schools, but also denominational and private schools. To the degree that parents send their children to private and denominational schools the burden imposed on the States for the provision of educational facilities is relieved. I believe that the education of children in private and denominational schools should be encouraged rather than discouraged. In their attempts to give their children the best possible start in life, parents have to pay out of their own pockets increasing sums of money in school fees, for which no deduction, concessional or otherwise, is allowable for income tax purposes. Parents who come into that category .are more deserving of consideration than are many of those who will benefit from- the concessions which we are now considering.

Is it contended that, a straightout deduction should not be granted to a taxpayer in respect of a dependant mother? There are many taxpayers in the community who are keeping their mothers. What is the use of speaking about concessions if, in fact, the people who discharge a moral obligation of that kind are given no consideration by the Government? I make a special plea for the people in that category who are in the middle income groups. Unless something is clone for them they will be gradually bled white. Many people throughout their lifetime accumulate comparatively small amounts of money, which, in accordance with the Government's requests they invest in Commonwealth loans, but when they seek to obtain age pensions they find that they are not eligible, because they are in receipt of small incomes from their investments. Others who invest their savings in the purchase of a home and who may have much more in terms of total wealth, are entitled to enjoy their home plus the benefits of a pension, and, in addition, are permitted to earn up to £3 2s. 6d. a week-


Mr DEPUTY SPEAKER - Order ! The honorable member is now dealing with the subject of pensions.


Mr SPENDER - But only in passing, Mr. Deputy Speaker.


Mr DEPUTY SPEAKER -The honorable member is not in order in discussing that subject.


Mr SPENDER - All I wish to say is that those who come within the latter category are in a better position than are some taxpayers on lower income ranges. We should revert again to direct deductions for the benefit of people of that kind, who deserve the utmost consideration by the Government. I regret that no such provision is included in the legislation now before us. After all, the Government has vast resources at its command which would enable it to deal effectively with this comparatively small matter. The Government takes approximately 7s. from every £1 earned by the community and it could easily afford to grant additional concessions to those in the middle income groups and other deserving sections of the community.

I have dealt with the provision of the bill which increases to £150 the amount in respect of which a concessional deduction may be claimed for insurance premiums and superannuation payments. The Government should give consideration to the extension of a similar concession to businesses. As I read the bill, this concession is to be limited to individuals. Many companies contribute on a £l-for-£l basis to superannuations schemes for the benefit of their employees. The allowance should be extended to a company which operates such a scheme. As I understand it, the principle behind the bill is that we should encourage the person who makes provision for his future. If that is so, it is proper that similar encouragement should be given to those who help others to make provision for their future.


Mr DEPUTY SPEAKER -Order! The honorable member is now referring to the company tax, which does not come within the ambit of this bill.


Mr SPENDER - I am dealing with concessional deductions.


Mr DEPUTY SPEAKER - That is the only subject with which the honorable member may deal.


Mr SPENDER - That is precisely the subject with which I am now dealing. The Income Tax Assessment Act provides for the allowance of concessional deductions to companies as well as to individuals. I think that I am entitled within the limits of this bill to show that a . measure which provides for the allowance of concessional deductions to individuals only should not be passed unless coincidental with it-


Mr DEPUTY SPEAKER - Order ! I shall not allow the honorable member to continue along those lines. He must confine his remarks to concessional deductions allowed to individuals.


Mr Pollard - Why did not the honorable member rectify this so-called anomaly when he himself was Treasurer of the Commonwealth?


Mr SPENDER - If I were permitted by the Chair to reply to the interjection by the Minister for Commerce and Agriculture (Mr. Pollard), I should be glad to do so. Another matter to which I wish to draw the attention of the Government is that the provisions of this bill in relation to the deduction of 40 per cent, of the cost of new plant do nol extend to mining companies. The bill provides that a deduction of 20 per cent, for initial depreciation shall apply until 1952, or, at the option of the taxpayer, in respect of new plant installed or purchased there shall be an initial deduction of 40 per cent. I submit to the Minister for Post-war Reconstruction (Mr. Dedman), who is now in charge of the House, that an examination of the Income Tax Assessment Act reveals that it has worked adversely against mining companies. It is true that mining companies have a right to write off the value of capital equipment over the period of its estimated life; but it would be of greater benefit to them if the benefits of this bill were extended to them. I ask the honorable gentleman to look into that matter. Mining companies are covered in Division X. of the principal act. Under that division, there has been no corresponding amendment. I suggest to the Minister that consideration should be given to the position of mining companies so that, at their option^ they may take advantage of the provisions which have been generally incorporated in the principal act, or, again at their option, be subject to the provisions contained in Division X. of the principal act. I suggest that before the Senate passes this bill, the matter that I have raised be considered'. I conclude by saying that this bill reflects the Government's policy of refusing to grant concessions to taxpayers in the middle income groups, who have been steadily ground down by the Government and cannot look to the Government for any help in improving their position.







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