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Tuesday, 16 August 1960

Mr HAROLD HOLT (HigginsTreasurer) . - by leave - I move -

That the bill be now read a second time.

As indicated in the Budget speech, current economic circumstances leave little scope for sales tax relief. Consideration has been given to a great number of requests for new exemptions or for alleviation of the rate of tax. In respect of a number of requests the submissions were well reasoned and had appeal. However, considerable revenue is involved and, for reasons already stated, it has not been found possible to grant relief over a wide range. Notwithstanding this policy decision, it is intended to accede to some requests which I feel sure will give widespread satisfaction not only to honorable members but also to the community.

One particular matter that has gained the sympathy of honorable members generally is the case for exemption of motor vehicles for the use of certain classes of disabled persons who are unable to use public transport and who, of necessity, use a motor vehicle for the purpose of travelling to and from gainful employment. It is of vital importance in the rehabilitation of these people that they be usefully occupied. Apart from the question of material gain to the community, there is also the satisfaction of becoming self-supporting, resulting in great benefit in morale and health. It is proposed to assist them by allowing exemption of motor vehicles, including the special controls which are, in some cases, necessary for effective operation, for use in journeying to and from gainful employment. The exemption will apply to persons who have lost the use of one or both legs to such an extent that the Director-General of Social Services or an officer appointed by him for that purpose, certifies that they are permanently unable to use public transport.

Assistance is being accorded to the dairying industry by way of exemption of tanks for bulk milk tankers which are used in that industry in picking up bulk milk from farms. The use of these tankers is a recent development in the industry, which increases efficiency but involves heavy expenditure on new equipment. The existing law authorizes exemption of milk cans which are used in the dairying industry in the transport of milk. The bulk milk tanks now under notice actually take the place of these cans. It is therefore appropriate to encourage this new development towards efficiency by extending the exemption to the tanks. The proposed exemption will not apply to vehicles as such, but only to the insulated tanks and associated fittings which are built into vehicles for this purpose.

Persons living in rural areas where water supplies are affected by salt will benefit from a new exemption of water de-salting apparatus, of a kind which is installed as a fixture.

There have been very strong representations for a reduction of the 25 per cent, tax which has applied to silver-plated ware. The silver-plating industry has been passing through an extremely difficult period. Some concerns have gone out of business, whilst others have greatly reduced the number of their employees. In an effort to assist this industry, the tax on silver-plated ware is being reduced from 25 per cent, to 12i per cent. In order to avoid a competitive anomaly, a similar reduction is being made in respect of pewter and cut-glass ware, as those goods are sold in competition with silver-plated ware.

The bill provides for exemption on the importation and sale in Australia of goods which are the produce of Christmas Island, being goods of a kind which are exempt from sales tax if produced in Australia. This places the produce of Christmas Island, a territory of the Commonwealth, on the same footing as the produce of New Zealand, Fiji, Papua, New Guinea and Cocos (Keeling) Islands, for which exemption has previously been authorized. The goods affected are, in the main, primary products.

A change is being made in the charges payable in respect of wireless valves. At present, wireless valves of Australian production are subject to an excise duty of 2s. 9d. each. Because of this levy, there has been no sales tax on such valves. Furthermore, whilst wireless receiving sets are subject to tax at the rate of 25 per cent., there is an exemption of so much of the sale value of those sets as represents the value of Valves incorporated therein. Thus, although there has been no double impost, the levy has been separately collected in respect of the different components of wireless receiving sets. It is proposed to merge these levies by abolishing the excise duty on these valves, and subjecting them to a sales tax at 25 per cent. which is the rate applicable to wireless receiving sets. It follows that the full sale value of a wireless receiving set, without any exclusion of the value of valves, will be subject to tax at the rate of 25 per cent.

Some of the valves affected by these amendments are large expensive valves of a kind used only in transmission, as distinct from receiving. These valves are being excluded from the 25 per cent. rate, and will bear tax at the general rate of 12½ per cent., which applies to transmission equipment generally. As regards imported valves, the customs duty payable includes a component equal to the excise duty payable on similar valves of Australian production. It is proposed to abolish that component also, so that these imported valves will also be subject to sales tax on the same footing as valves made in Australia.

There will be some instances in which sales tax will become payable on valves, or upon the value of valves incorporated in wireless sets, after the commencement of these amendments, and those valves will have previously been subject to excise duty, or to the excise duty component of customs duty. Provision is made in the bill for a rebate in these cases to the extent of such payments of duty.

The rate of sales tax on electric shavers is being raised from 12½ per cent. to 25 per cent. to place them on the same level as safety razors and safety razor blades. This action is being taken so as to remove a disadvantage suffered by manufacturers and importers of safety razors and blades, in competition with vendors of electric shavers.

In accordance with the usual practice, the provisions of the bill will come into operation in relation to transactions effected on and from to-morrow, the 17th August. Details of the goods affected by the amendments, including certain explanatory notes, have been made available to honorable members in a statement which has been circulated.

I commend the bill to honorable members.

Debate (on motion by Mr. Whitlam) adjourned.

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