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Tuesday, 20 November 1973
Page: 1944

Senator Greenwood asked the Minister representing the Minister for the Capital Territory, upon notice:

(   1 ) What goods has the Minister declared to be goods for the purposes of the Prices Regulations Ordinance 1 949- 1 973.

(2)   What services has the Minister declared to be declared services for the purposes of the Prices Regulation Ordinance 1949-1973.

(3)   Why, in each such case, has he declared such goods and services.

Senator Willesee - The Minister for the Capital Territory has provided the following answer to the honourable senator's question:

(   1 ) (i) Bread; (ii) Petrol; (iii) Beer.

(2)   (i) Medical Practitioners' Services; (ii) Real Estate Agents 'Services.

In each case Mr Enderby when Minister declared the goods or service as a necessary prerequisite to enable the Controller of Prices to fix a maximum price in respect of that good or service.

This action was taken in accordance with the Government's policy of price justification.

Undistributed Profits Tax

Senator Willesee -On 24 October 1973 Senator Webster asked Senator Murphy a question without notice concerning undistributed profits tax of private companies. The Treasurer has provided the following answer to the honourable senator's question:

The Treasurer announced on 14 September 1973 that he proposes a flat retention allowance of 50 per cent for trading income, rather than have the allowance in respect of that income decrease as at present to 45 per cent on the second $10,000 of income and 40 per cent thereafter. The Income Tax Assessment Bill to give effect to Budget income tax measures provides for this change. It is not proposed to change the 10 per cent retention allowance for property income or the rule that there be no retention allowance for dividends that a private company receives from other private companies.

There is no simple inverse relationship between the tax rate on private companies and the desirable levels of the retention allowance and the rate of tax on undistributed income. So far as the latter is concerned, its purpose is not, in the normal course of events, to collect additional revenue from private companies; its purpose rather is to discourage the use of private companies to avoid the appropriate level of personal income tax on income to which shareholders are ultimately entitled and from which they benefit.

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