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Tuesday, 16 August 1960

If total expenditure for the year is to be £1,796,500,000 and total receipts were £1,775,100,000, we would have a cash deficit of £21,400,000. As I have said earlier, we think it would be entirely wrong under present circumstances to budget for a deficit. We go further than this, however, and say that the Commonwealth Budget should do something towards reducing the current pressure of demand in the economy. This implies that we should budget for a cash surplus, even if not a large one, and if that is to be done, there is clearly no alternative to raising appreciably more revenue by way of taxation. We have therefore decided upon the following proposals: -

Income Tax. companies.

It is proposed to increase by 6d. in the £1 the rates of tax payable on incomes derived by companies during the income year 1959-60. The rate of 10s. in the £1 payable on insufficient distribution of incomes of private companies will remain.

The gain in revenue from the increased rates is estimated to be £18,000,000 in a full year and £16,600,000 in 1960-61. individuals.

In the Budget last year, a rebate of1s. in the £1 was allowed against the tax payable by individuals on 1959-60 incomes. Under the altered circumstances of this year, the Government finds itself unable to continue this rebate in respect of 1960-61 incomes. Appropriate adjustments will accordingly be made to the instalments deducted from salaries and wages and to provisional tax for 1960-61.

Discontinuance of the rebate is estimated to result in additional revenue of £22,750,000 for a full year and £20,250,000 for this financial year. aged persons.

In consonance with the increase in age pensions, it is proposed to raise the level of the income tax age allowance to residents of Australia who meet the age qualification, which is 65 years for men and 60 years for women.

At present no tax is payable by an aged person whose net income does not exceed £429. In future, the exemption will apply to net incomes not exceeding £442. In the case of a married couple, both qualified by age, the present exemption level for the combined net incomes of the couple will be increased from £858 to £884.

The cost to revenue of these adjustments will be £375,000 in a full year and £215,000 in 1960-61. gifts.

Income tax deductions are to be allowed for gifts of £1 and upwards to -

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