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Wednesday, 6 August 1930


Senator LAWSON (Victoria) .- This clause seeks to amend section 23 of the principal act, which deals with deductions. During the second-reading debate I asked the Minister whether he would consent to a further addition to subparagraph ii of paragraph h of this section, which allows as deduction from assessable income gifts of £1 and upwards made to public charitable institutions, universities or colleges affiliated therewith, or to a war memorial. In that category are art galleries and museums. I have modified the proposal which I previously submitted to the Minister, in order to meet some of the objections which he urged. I now move -

That the following new paragraph be inserted : - (fa) by inserting at the end of paragraph (h) the following sub-paragraph: -

(iii)   gifts of one pound and upwards made out of the assessable income derived during the year in which the gifts are made to the building fund of any Public Art Gallery and/or Museum, if the gifts are verified to the satisfaction of the Commissioner ' ".

Probably the insertion of these words in sub-paragraph ii, before the words " to public universities ", would achieve the same purpose; I am not concerned with the manner of making the amendment, so long as it is made. The amendment does not affect gifts for the maintenance of art galleries and museums already erected in all the principal capital cities of the Commonwealth. It will apply only in the case of country towns which embark on building projects of that nature. It is undoubtedly a wise policy to decentralize art, and to give country residents an opportunity of enjoying the benefits of art galleries and museums. Any country residents who may be prepared to make the necessary sacrifice to enable such buildings to be erected might be encouraged to do so if their gifts were allowable as a deduction from assessable income. We should provide for such cases. In its legal significance the word " charitable " might even include such an institution as an art gallery; but it is better to provide specifically for the cases I have mentioned. The amendment is not likely to have much effect on the revenue, for such instances will occur only once in any particular locality. When I was Premier of Victoria, I offered a grant for the erection of buildings for the University of Melbourne, provided that a certain proportion of the cost was raised privately. At one time, no encouragement was given to public-spirited citizens to make gifts for charitable or educational purposes. The liability to pay income tax on such amounts acted as a deterrent to private benevolence. If institutionsof this nature were not aided by private beneficence, the total burden would fall upon the Government. These subscriptions save the Government a great deal of expense in maintaining our universities and charitable institutions, and the same may be said with regard to art galleries. Generous citizens who make grants to public institutions of this description deserve to be encouraged. I see no logical reason why their gifts should be excluded from the list of taxation exemptions. The loss of income to the Government would be a mere bagatelle. I know the difficulties that confront the Treasurer, and realize that it is desirable that all loopholes in the act should be closed ; but this is only a trifle that I ask for. I entreat the Minister not to harden his heart, but to accept my amendment. It would be an encouragement to people to make gifts for the erection of art galleries in country districts. The exemption would not apply to gifts made to similar institutions in the metropolitan area for maintenance, and, as I have specified " building funds ", the exemption involved would not be too large. I have done that in order to encourage the Minister and the Senate to accept my amendment.

Senator DALY(South Australia - Vice-President of the Executive Council) the amendment, which, on the face of it, would appear to be a perfectly reasonable one. But I ask the committee to consider the position in which the Government finds itself, and to realize the difficulties in the way of increasing existing exemptions. I point out that to assist the study of diseases in cattle is a most laudable object. Some beneficent pastoralist might come along and make a gift of £5,000 to the Council for Scientific and Industrial Research for that purpose; but the gift would not be exempt from taxation. A grant for the purchase of radium to assist in counteracting cancer would be another public spirited action, and there are dozens of other very fine objects that merit our recognition. However, if the Government began to exempt all gifts, from taxation it would never know where it stood. Having agreed that everybody should be taxed, the principle of exempting people simply because they make a donation to some organization is absolutely wrong. -


Senator McLachlan - Or even to exempt interest on loans raised by the Government !


Senator DALY - It seems most illogical to exempt the interest on such loans from income tax. If this amendment were allowed to go through, the Government would be inundated with applications for exemption from persons who had made contributions of a similar nature. I remind honorable senators that if, by this exemption, the Government sustained a loss of income to the extent of £500, that loss would have to be made up by the rest, of the taxpayers. I suggest that the difficulty is even more real than that presented by me when we were dealing with aero clubs. In view of the very urgent necessity for an equitable distribution of the burden of taxation, I ask honorable senators not to press for an extension of our exemptions, oven for such a laudable object as that mentioned by Senator Lawson. I suggest that it is better to restrict our exemptions until conditions improve. At present the nation cannot afford to relieve anybody of the payment of taxation. I submit that if gestures are to be the order of the day it would be a very bad gesture indeed to suggest that under these new proposals the nation is in such a position that ii can exempt from taxation certain items that were formerly taxable. That would be most unwise, and would make the position of the Government absolutely untenable. The time of Parliament would be taken up in deciding whether it could logically vote against certain requests for exemption advanced by, say. Senator Johnston, seeing that the majority of the Senate had already voted to exempt donations to art galleries. In the circumstances, I trust that the Senate will reject the amendment.

Amendment negatived.







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