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Wednesday, 6 August 1930


Senator CHAPMAN (South Australia) . - Honorable senators on this side have met the Government generously with regard to the tightening up of taxation. Their action should result in increased revenue to the department. I hope, however, that the Government will not insist on refusing to allow these payments as deductions. Section 23. -1 of the principal act provides - (1.) In calculating the taxable income ofa taxpayer the total assessable income derived by the taxpayer from all sources in Australia shall be taken as a basis, and from it there shall be deducted -

(a)   all losses and outgoings (including commission, discount, travelling expenses, interest and expenses, and not being in the nature of losses and outgoings of capital) actually incurred in gaining or producing the assessable income.

There is no ambiguity about that provision. I desire to quote from a letter I have received from the Taxpayers Association of South Australia -

Last year a number of graziers who had their subscriptions to the Graziers Association disallowed went to the trouble and expense of carrying an appeal to the High Court of Australia. The decision in this case was in favour of the taxpayer, for the court held that such subscriptions were in fact an actual expense incurred in carrying on the business, and were paid for that reason and that alone.

If we wish to escape from the decision of the High Court we can safely say that there is no other course open to us than to alter the act. The letter goes on to say-

Taxpayers naturally hoped that after this ruling from the highest legal authority in the land that their old grievance would disappear, but by the section referred to in the amending bill it is proposed to deprive taxpayers of the benefit of this decision, and to expressly exclude such contributions and subscriptions. We do not feel that the position requires labouring from us as we think that it must appeal to any disinterested person that a merchant or grazier or any other person engaged in commercial or industrial activities does not pay these subscriptions with any other idea but that it is an aid in procuring the assessable income. This is illustrated by the fact that when men go out of business they usually resign their membership in such organizations.

Seeing that the members of those trading associations do not continue their subscriptions after they have retired from business, it is evident that they join them in order to obtain assistance in the conduct of their business.

Senator Sir WILLIAMGLASGOW (Queensland) [9.0].- I find it difficult to follow the reasoning of the Leader of the Government in the Senate (Senator Daly), when he states that a contribution to the Graziers Association is not an expenditure for the purpose of improving one's income. What would be the position of graziers if they had not such an organization ? They receive little enough consideration as it is. Without the assistance of their association they would be left without a feather to fly with.


Senator Rae - And what would the workers do without the Australian Workers. Union ?


Senator Sir WILLIAM GLASGOW - Without the assistance of their association, the graziers would have no income on which the Commission could levy taxation. The association not only assists graziers with regard to industrial matters ; it also provides them with advice which enables them to improve their stock pastures and business generally. . On occasions the Government has brought experts from overseas ' to report on pastoral matters, and the investigations carried out by these experts have generally been conducted through the pastoral organizations. I remember Professor Thieler and an officer of the London County Council coming to this country, and portion of their work was done through the graziers' associations. From time to time members of the association meet and discuss problems associated with their industry.


Senator Rae - Manifestly to improve their conditions.

Senator Sir WILLIAMGLASGOW.Exactly. Their contribution to the association is- made for the purpose of increasing their revenue, and, therefore, it is a proper deduction. The High Court found that it was a reasonable deduction, and I hope that the committee will support the amendment moved by Senator McLachlan.







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