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Tuesday, 26 September 1972
Page: 1881


Mr GRASSBY (Riverina) - In the past 3 years of rural and urban recession there has been no burden for those that are concerned, heavier or more resented than the death tax of probate. The tragedy, as has been pointed out by my friend and colleague the honourable member for Melbourne Ports (Mr Crean), is that it falls on a comparatively small number of people to meet the full burden of this impost. It has caused great personal hardship particularly throughout the countryside, led to the destruction of family farms and even to the break-up of families themselves in tragic circumstances, trying to meet an impossible tax conceived 2 generations ago and allowed to grow into a mindless, inflexible Frankenstein monster which has devoured and destroyed. If these terms seem somewhat harsh and fanciful I invite honourable members to direct their attention to some of the cases I have to mention.

The Government, under this legislation, has acted but it has acted tardily and inadequately. The present proposals will go no further than relieving some 40 per cent of the cases, according to the Deputy Prime Minister, the Minister for Trade and Industry (Mr Anthony) in his statement at Condobolin the other day, or some SO per cent if we take the assessment of the Treasurer (Mr Snedden) in this House. But the legislation leaves the tax with all its inequality and the fact that it applies only to the little man - to the family enterprise whether it is a farm or a business. The rich still have the means to avoid the tax. The family enterprise in most cases has not.

After all this hardship and all the pOSturings in the countryside by the Government, it is as well to recall that we of the Opposition on 21st April 1970, moved the following amendment to the Estate Duty Assessment Bill - the Bill which has caused so much trouble. On that date the honourable member for Melbourne Ports actually moved that the words to be inserted in place of those to be omitted were: realising that some estate planning may already have been effected following the promise of this legislation on 24th September 1969, the passage of this limited Bill which offers some measure of relief from death duties in the rural sector is not opposed, but the House is of opinion that it is inadequate, as it fails to recognise -

(a)   the extension of liability for and the burden of Federal and State death duties resulting from the pressure of inflation,

(b)   the particularly critical situation of -

(i)   the relatively small farm in the rural sector, and

(ii)   the small business unit in the industrial and commercial sectors, where in both cases a large part of the estate is in a non-liquid form, the dismemberment of which to meet the tax liability destroys the basis of efficient operation, and

(c)   that difficulties are aggravated by the joint operations in this field of the Commonwealth and the States.

The House considers that these matters should be fully examined with a view to early relief being afforded by further amendments of the Act'.

This is not an amendment which would have brought down the Government; it would not even have held up the Government's Bill; but it would have perhaps brought this relief more quickly. Yet every single country member on the Government benches voted against it. Now, 2 years later, they come up with further limited relief.

There is no equality in death in Australia. It even depends on where you live as to how much you pay. If you live and die in Canberra on an estate of $100,000 you pay only $12,000, but if you live in New South Wales the combined Federal and State death duty bill is nearly $24,000. At a time when properties could not be sold and at a time when valuations were quite fictitious a death has meant disaster beyond the personal loss and grief. In many cases in the Riverina a $100,000 property in the past 3 years was worth that amount only to the Valuer-General, on an outdated basis. Put onto the market it would not have brought that amount. Yet the inflexible death tax law states that the value is the value at death.

Quite apart from that fact, the owner would have an overdraft and other commitments. Once he was required to sell the property to meet probate he faced bankruptcy and the destruction of the family enterprise. The tax has also led to racketeering. The men with the ready money - I came across an interest rate the other day charged at 36 per cent - who lent money not to await repayment, but to get possession. There was a case where a widow found herself with $188,704 in net capital aggregation and spent so much on death duty that when, after 8 years, she herself died she had not enough left to pay for her own funeral. That happened to be in Queensland, the State about which we have been hearing so much from some of the honourable members opposite.

The evidence given to the Senate Standing Committee on Finance and Government Operations inquiring into all aspects of death duties cited the case of a widow who was left $2m in Poseidon shares. Even if that were their paper value on the death of her husband the real value was $284,440. She faced a bill for death duties of $500,000. She was being asked to pay double her total assets. This is a case to illustrate the absurdity of the system as it exists. I make the plea of a Victorian widow to the Parliament. I have heard no more eloquent case put than this, from Mrs M. E. Carter of Mount Macedon who wrote only 2 weeks ago this plea for the widow: in addition to receiving no adequate allowance against taxation in payment for her many-sided career in the home all her married life, upon her husband's death a widow can find herself entitled to absolutely nothing. Apart from a now inadequate share of the family home, she realises she is just a chattel who must prove ownership of every single item or pay duty, plus the heavy legal expenses involved, on everything.

And what, with no income, can she own? She is faced with this levy on savings, possessions and the fruits of 2 shared lives. Paying out of capital, her future livelihood is reduced; indeed, in some cases, a widow finds she is forced upon the charity of her family or even becomes an added burden on the State, And this at the most traumatic moment of her life; when she may be quite old and forced to face a contingency she and her husband made heavy sacrifices to avoid.

Should the husband, realising what the law imposes on his wife, attempt to protect her and then she dies first, he will be punished by having to pay the levy himself.

In view of the inextricable nature of a married couple's affairs, is it not logical to abolish all death duties between them?

That was the eloquent plea of a Victorian widow. It actually costs $4m in Australia to collect the various death duties. But the yield in misery, in dislocation of enterprise and in the loss of income tax yielding assets is so much more. It would appear that the Government has reached the position outlined in this Bill. It rests on its oars. The countryside and the nation generally will certainly, in contrast, warmly welcome the announcement by the Leader of the Opposition at Cowra in New South Wales where he proclaimed the Opposition policy that the assets of a family enterprise, whether a farming enterprise or a business enterprise in the town, should not be diminished by the death of one of the members of the family. This commitment and this policy will certainly answer the plea of the widows and family numbers who have to face the hardships created by a tax which is shot full of anomalies.

Sitting suspended from 1 to 2.15 p.m.


Mr GRASSBY - Before the suspension of the sitting for lunch I was addressing myself to this Bill and I might say that it does not really make a very satisfying subject for lunch, bearing in mind all the difficulties that people in the countryside and urban areas have suffered in recent years because of this tax. The major point I wish to make is that the Government seems very definitely to have gone as far as it can go, or as far as it will go, in granting relief from probate tax. It has been very rightly described as a death tax. We of the Opposition reject any contention that this measure is the best that can be done, and I reiterate my enthusiastic support for the announcement by the Leader of the Opposition at Cowra, New South Wales, to which I referred before lunch. He said that the asset of a family enterprise, whether a farming enterprise or a business enterprise, should not be diminished by the death of one of the members of the family.

We definitely do not oppose the Bill, as it is a recognition of the problem, but all those people who in past years have cried for help should well note that on 21st April 1970 no Government supporter would listen to their cries for more to be done. We want to see further relief given. Today we accept what is before us in this measure but we serve notice that the alternative government of this country is pledged to end a system that attacks the very survival of family enterprise.







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