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Tuesday, 22 April 1969

Senator ANDERSON (New South Wales) (Minister for Supply) - I move:

That the Bill be now read a second time.

It is proposed by this Bill to amend the pay-roll tax law as it applies to one aspect of the rebates of tax for increases in export sales. The amendment will ensure that sales of newly-mined gold for industrial use in Australia are not taken into account in determining the rebate entitlements of gold producers. These amendments are a consequence of changes in arrangements for the marketing of newly mined gold for industrial use in Australia which became operative on 18th March 1968.I have already mentioned these changes in my speech on the associated Income Tax Assessment Bill just introduced.

Under the present law authorising rebates of pay-roll tax for increases in exports, the total production of a gold producer is. on delivery to the Reserve Bank, treated as an export sale for rebate purposes. This is so even though the gold may subsequently be exported, sold for industrial use in Australia or held by the Bank. Tax exempt dividends received by the producer from an approved producer owned company out of the profits earned on export sales of newly mined gold at market prices are similarly treated. As to this latter aspect, I remind honourable senators that distributions made by the Gold Producers' Association will, under the revised gold marketing arrangements, now include also profits on sales by the Association to local industrial users of gold.

The Government has reviewed the payroll tax rebate scheme as it applies to gold producers in the light of these revised marketing arrangements and of the fact that, since the rebate scheme was introduced in 1961, there has been a substantial increase in the extentto which newly mined gold is sold for industrial use in Australia. In the Government's view, gold producers should no longer be entitled to the rebate in respect of that part of their production that is sold for industrial use in Australia. It is proposed therefore that, when calculating the rebate entitlement of a gold producer who is a member of a producer owned company, a proportion of the producer's deliveries to the Reserve Bank and of the dividends he receives from the company be excluded from the value of his export sales for the particular rebate year. The proportion will represent the extent to which the company's sales of newly mined gold in the year preceding the rebate year were for industrial use in Australia.

Very broadly, entitlement to a rebate of pay-roll tax is calculated in relation to the amount by which export sales for the rebate year exceed export sales in a prior base period. Accordingly, adjustments corresponding to those 1 have outlined in relation to rebate years are to be made to the export sales of the relevant base period years. The proposed amendments will apply to rebate claims in respect of the 1968-69 financial year and subsequent financial years. A memorandum explaining each clause of the Bill has been circulated for the information of honourable senators and I do not propose to go into further detail at this stage. I commend the Bill to the Senate.

Debate (on motion by Senator Wilkinson) adjourned.

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