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Wednesday, 11 October 1972
Page: 1472

Senator LAUCKE (South Australia) - We have before us 3 very important Bills. They are much more important than may appear at first sight. I refer to the Estate Duty Assessment Bill, the Gift Duty Bill and the Gift Duty Assessment Bill. These are part of the provisions of the Budget which was introduced on 15th August. I have said that they are mightily important. At first sight this may not appear so when one compares the revenue from these measures against the entire Budget of $l0,000m. But the philosophy behind the incidence of estate duty and gift duty is the important thing for consideration tonight. The reduction of the charges on the estate of a deceased person and, to a lesser extent, the reduction of the incidence of gift duty is a step in the right direction. These are matters which have deep importance for the retention of society as we know it in Australia and of which we consider the family to be the most important unit. 1 shall reiterate the provisions of these Bills. They can be simply stated and readily understood. Let us look at the present situation before these Bills become law. An estate is exempt from estate duty if its value is $20,000 or less and it passes to the spouse, children or grandchildren of the deceased. If the estate goes to a nonrelative the amount of the examption is halved; that is an estate to the value of $10,000 is exempt. At present a primary producer estate of $24,000 is exempt if it passes to close relatives. The estate of a primary producer passing to non-relatives is exempt up to $12,000. Under the Estate Duty Assessment Bill it is proposed to double the exemptions in each case. An estate to the value of $40,000 going to close relatives will be exempt from all estate duty and an estate of $20,000 passing to non-relatives will be exempt. If it is a primary producer estate there is a greater benefit.

In each case above the base allowance the scale of exemptions will continue to diminish at the existing rate of $2 for every $8 by which the value of an estate exceeds the initial exemption level. This means that exemptions will cut out for estates generally at $200,000 where the estate passes lo relatives. When the estate passes to non-relatives the exemption will cut out at $100,000. For primary producer estates the cut-out points will be $240,000 when passing to members of the family and $120,000 when passing to nonmembers of the family. These are major improvements in relation to death duties which are applied in the Federal sphere. The applications of these proposals will result in about half of all estates which now attract estate duty becoming wholly exempt. This is a very important aspect and it indicates the widespread benefits which will accrue from these measures.

Senator Cotton - That is an important point to raise.

Senator LAUCKE - I believe that that is a most important point. It is also an encouragement to a large number of the population. It will encourage people to build up a nest egg for members of the family which can be passed on in due time to better the conditions under which they may be living. We all endeavour as far as we can to ensure that our children and relatives live under better conditions than we have enjoyed. These new exemptions will apply to the estates of persons who have died since 15th August, which was the date of the introduction of the Budget. I pay tribute to the Government for having taken these steps in the right direction and reducing the change on estates and gifts.

In relation to gift duty, there has been no increase in the exemption levels since 1947. I welcome the increases which raise the exemption from $4,000 to $10,000 before tax is attracted. I commend the Government for these moves. These are steps in a direction which I trust will ultimately lead to the situation which is sought in the amendment which was proposed by Senator Byrne. In relation to the motion that the Bill be read a second time he moved: At end of motion add - bin the Senate expresses the view that the Government should consider as soon as possible the complete elimination of Federal estate duty'.

I completely concur with that intention. I shall be supporting this amendment. If there is one form of taxation for which I have no time it is a tax imposed after other taxes have been paid on money which has been earned. We have paid our tax and we have a residual, small amount after living costs are paid to build up into a background of security. Money in an estate is built up from assets out of net income after taxation and costs incidental to living have been incurred. In my opinion to tax that remaining little amount is completely anathema to the spirit of promoting thrift, to a sense of responsibility to one's family, to encouraging the family unit and to the continuation of -individually owned assets in the community. I find also, thank heaven, that we still have businesses in Australia, whether they be of a rural or manufacturing nature, which are not Colusseses. There are many small units with liquidity and I want to refer to the great need to encourage the smaller production unit, be it a farming unit, manufacturing unit or any other type of unit. I do not like the idea that business or farming has to be in the hands of big complexes and big organisations. This is not conducive to a society in which there is the responsible attitude by the ordinary people. There has to be encouragement for the smaller mau to be able to continue in his own way. Efficiency is not the prerogative of huge turnovers. Efficiency can be related to capital investment and other fields which can be equally as efficient as the biggest of the organisations. This sort of legislation before us tonight does assist the small unit to achieve viability and to retain liquidity in the long term without which there is no hope in the future for the small unit of production in Australia. I warmly support these 3 Bills, and I equally as warmly support and commend Senator Byrne of the DLP who introduced the amendment which seeks to lead to the ultimate abolition of estate duties at the Commonwealth level.

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