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Wednesday, 11 October 1972
Page: 1410


The PRESIDENT - Senator Carrick,a point of order was taken on a question you asked earlier this morning. You were kind enough to give your written question to me. I read it and returned it to you with the suggestion that the third paragraph might be rephrased. The essence of the question was entirely in order, and I now call you.

Senator CARRICK - Thank you, Mr President, for your advice. My question is directed to the Minister representing the Treasurer. Is the Minister aware that the people of Australia currently hold more than 8 million life assurance and superannuation policies? Has the Minister's attention been drawn to a printed and issued statement by Mr Frank Crean, Labor Party spokesman, being the official text of his speech to the Australian Securities Institute on 4th August this year? Did this statement by Mr Crean contain criticism of the current Government policy of allowing life assurance premiums as taxation deductions? Is it a fact that a policy of disallowance of life assurance premiums as tax deductions would constitute a serious threat to the future of life assurance and would cause a significant fall in the moneys available from life offices for vital investment in government loans and major development undertakings?

Senator Sir KENNETH ANDERSON - I am aware of the dramatic and enormous amount of money that is invested by the people of Australia in life assurance. I cannot respond with precision to the figure of 8 million policies; nevertheless I know that it is of that order. I am sure everybody would agree on the tremendously important part that life assurance plays in the lives, hearts and minds of people in this democracy of ours. It is a form of investment at the highest possible level and, indeed, at the family level. It is a form of saving which for the working community in contemporary times is linked with the purchase of homes. We are aware of the implications of life assurance in terms of retirement and superannuation. Therefore, I would agree entirely with what the honourable senator has said.

Before I refer specifically to the other part of his question, I think that I should add that inherent in the forms of saving by the community in life assurance is the fact that taxation concessional allowances, which are most important for the family man, apply in respect of life assurance contributions. From memory, at the last time I looked at my income tax figures life assurance premiums up to a ceiling of $1,200 were an allowable deduction. This is a tremendously important concession. Any inroads into the deductions that persons may claim for income tax purposes pose a serious threat to what has been a tradition in our country by which people have linked their payments to life assurance companies with opportunities to borrow for the purchase of their homes and to provide for their retirement. That is the position at one end of the scale.

On the other hand, a falling off in life assurance has implications in respect of government investments and government loans. As I recall it, investments in life assurance companies are trustee investments. This means that, in turn, those companies are required to invest their funds in government securities. In the cycle governments lend this money to other governments and use it for housing projects and in many other areas concerned with day to day administration related to the lives and hearts of the people. There is no doubt about that fact.

My attention has been drawn to the speech made by the Opposition shadow Treasurer to the Australian Securities Institute in Sydney in which he made the point that, in his judgment, a case existed for not granting these life assurance concessions for income tax purposes and for using the revenue saved in some other ways. I think it would be a tragedy if it were the policy of any future government to abolish taxation concessions in respect of life assurance. The value of these concessions is tremendously important to the ordinary person.

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