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Wednesday, 11 October 1972
Page: 1474

Senator SIM (Western Australia) - I rise briefly to support the Bills and the amendment. I have already on 2 occasions in the Senate supported a similar amendment. If Senator Byrne had not moved this amendment, I would have been most inclined to have moved one in similar terms. My objection to estate duty goes back a very long time. Indeed, many elements in the Liberal Party have objected to it over the last 15 years or more. I think that the Minister for Civil Aviation (Senator Cotton) will recall the time when he and 1 served together on the Federal Rural Committee of the Liberal Party in about 1956 or 1957.

Senator Cotton - It was in about 1953.

Senator SIM - It might be back further than that, but 1 remember that he and I on several occasions joined together in urging that the Commonwealth make greater concessions in relation to estate duty. At that time we were concerned mainly with the rural community.

Senator Jessop - That is right.

Senator SIM - 1 was thinking of 1955- 56, but the Minister mentioned 1953. His memory may be a little better than mine, so 1 will accept that. But certainly in the early and middle 1950s we were rather attracted - 1 think the Minister will recall this - to the United Kingdom scheme of abatement on rural properties. Gradually we came to the view that rural properties should be exempt from Federal estate duty. Indeed today it is the announced policy of the Federal Rural Committee of the

Liberal Party that rural estates - it has dealt only with this area - should be exempt from Federal estate duty. I go further than that because I believe, and have voted in the Senate in support of the principle, that the Federal Government should vacate completely the field of estate duty. We are not in a position here to dictate to the States, but one would hope that at least they would take note of the actions of the Federal Government. Whether they retain estate or probate duty is a matter for their decisions, but it is hoped that they would not try to increase their revenue from estate duty because the Federal Government had abandoned this tax. I would hope that if they did the Federal Government would take action against the States to ensure that they made no financial gain from such action. There is nothing new in the attitude of honourable senators on this side of the Senate. I believe that over the years estate duty has penalised those with enterprise and initiative, the people whom we wish to encourage to build up their assets and to increase production. I have always believed that the taxation exemptions for primary producers were designed to encourage them t."> just this - to develop and increase their production and efficiency. While we were doing this, on the one hand, by providing taxation exemptions, on the other hand at the time of death we were penalising them. This was an inconsistent policy. It has been argued that no one can prove that forced sales have taken place, particularly of rural properties, because of the estate duty impost. Perhaps it is very difficult to prove that an estate has been sold for this reason although I think that there are some examples of this having happened. But this is not the sole criterion. Some rural properties have had to borrow heavily. At this stage I think we should pay a tribute to the administration of the Act which was, in many ways, liberal. Exemptions and assistance were given. Nevertheless, eventually the money had to be paid. Many estates were penalised for many years because they had to borrow heavily to meet estate duty. Therefore, to a considerable extent the development of properties was affected by this duty. I announce that 1 will support the amendment as I have supported similar amendments in the past.

Nevertheless, I welcome the action of the Government in doubling the exemption amount, particularly in the case of family estates, it is a move in the right direction. I also welcome the extension of the exemption for gift duty from $4,000 to $10,000. It has the advantage of giving people a greater freedom, as long as the incidence of estate duty continues, to plan further ahead. I have never been very convinced with the argument that people can plan estates or take out insurance to cover the estate duty. Insurance premiums are not cheap. This could be done and as long as estate duty existed it was a wise insurance. Nevertheless the very fact that heavy premiums had to be met again took away money which could be better used for the development of Australian resources rather than to pay insurance to cover oneself against the ultimate.

Senator Websterraised the matter of the cost of administration. It would be very interesting if we could obtain figures as to the cost of the administration of Federal estate duty compared with the gains made by the Treasury. Certainly, they would not be as high as we are sometimes led to believe. Therefore, while I support the Bills before the Senate as being a step in the right direction, I believe that we should again clearly state our view, as many of us have over many years, that the Commonwealth should as quickly as possible vacate this field. One would hope and expect that the State governments would realise that this tax is not a fair tax. It is a tax which penalises enterprise and initiative which we should encourage in this country. Therefore, I speak merely to indicate clearly my attitude and to make it known that I, while supporting the legislation before the Senate, will support the amendment moved by Senator Byrne.

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