Senate
21 September 1928
10th Parliament · 1st Session
The President (Senator the Hon. Sir John Newlands) took the chair at 11 a.m., and read prayers.
page 7064
QUESTION
JOLIMONT BUILDINGS
Senator ELLIOTT:
VICTORIA
asked the Min ister representing the Minister for Home and Territories, upon notice -
- Is it a fact that the Government proposes to transfer a dilapidated wooden structure from Jolimont, Victoria, to the Civic Centre, Canberra)!
- In view of Sir John Butters’ remarks as to the necessity for the use of Roman tiles in buildings at the Civic Centre, has his opinion been obtained on the question of this transfer?
Senator Sir GEORGE PEARCE:
– The Minister for Home and Territories supplies the following answers: -
- It is proposed to remove to Canberra the wooden buildings at Jolimont which have been utilized for the purpose of housing officers of Government departments.
- Yea.
page 7064
QUESTION
MANDATED TERRITORY
Senator ELLIOTT:
asked the Minister representing the Minister for Home and Territories, upon notice -
- What salaries are paid to matrons and nurses in - (a) the Territory of New Guinea; (b) the Territory of Papua; (c) the Territory of North Australia?
- Is the salary paid in Papua and New Guinea below that fixed as a minimum for a nurse in North Australia?
- If. so, what is the reason for such difference ?
Senator Sir GEORGE PEARCE.The Minister for Home and Territories supplies the following answers.’ -
- New Guinea - Matron, £216-£240; nurse, £162-180. Papua- Matron, £216-£240; nurse, £170-£194. North Australia- Matron, £264- £300; nurse, £210-£246.
- See answer to No. 1.
- The rates fixed for New Guinea and Papua were determined by a classification made in 1925, based upon rates paid in Australian hospitals, with the addition of a sum to meet tropical conditions. The North Australian rates were fixed by a classification made this year. They are practically the rates paid prior to the classification and it was not considered desirable to disturb them with a view to making them uniform with the other territorial rates. The rates for the nursing staff in New Guinea and Papua are at present under consideration as to review in the light of altered conditions.
page 7064
QUESTION
FEDERAL CAPITAL
Rate Assessments - Administrative Block
Senator ELLIOTT:
asked the Minister representing the Minister for Home and Territories, upon notice -
- When will appeals made against the rate assessments in Canberra be heard?
- What is the nature of the proposed tribunal to hear these appeals, and when will it be appointed?
- Will interest be payable on the amounts paid under protest while the appeals are pending?
Senator Sir GEORGE PEARCE:
– The information is not yet available, but steps are being taken to obtain it.
Senator ELLIOTT:
asked the Minister representing the Minister for Home and Territories, upon notice -
What has been the result of the inquiries instituted into the allegation that the specifications relating to the contract for the administrative block at Canberra had not been carried out?
Senator Sir GEORGE PEARCE:
– The inquiry into this matter is still proceeding. If possible, an interim report indicating the stage the matter has reached will be laid before the Senate.
page 7064
ESTATE DUTY ASSESSMENT BILL
Debate resumed from 19th September (vide page 6850), on motion by Senator Sir George Pearce -
That the bill be now read a second time.
Senator NEEDHAM:
Western Australia
– I have had an opportunity to read the bill and, with the right honorable the Leader of the Senate, I have to confess that I cannot claim to have expert knowledge of measures of this nature. The first Federal bill imposing estate duties was passed in 1914, in which year the Commonwealth Government entered that arena of taxation in order to secure additional revenue urgently required for the conduct of the war. At the time it was thought that the taxation would be temporary; but having entered the field, the Government is reluctant to vacate it notwithstanding that the war has been over for ten years. Prior to 1914 estates were heavily taxed by State authorities and, so far as I can gather, they are still being exploited by State Governments. As I understand it, the object of this measure is to stop the leakages that have been responsible for certain losses in revenue. Frequently this form of taxation falls heavily upon those who have to pay it. This is particularly true of small estates. In addition to Federal and State taxation, certain estates have to provide for heavy legal and administrative expenditure. Estate duty is levied on the taxable value of property at the time of the death of the testator when it passes to other persons named in the will or when the owner dies intestate. I understand that as a result of the practice of transferring property immediately prior to decease, there has been a considerable loss in revenue and the object of the bill is to protect the revenue. The experience of the department shows that these transactions occur frequently, with the result that considerable revenue is lost. An independent valuation by a competent valuer would, in many instances, reveal a higher value than that included in the returns submitted to the department.
The bill contains a departure from the practice hitherto followed in connexion with joint tenancies. In the past it has not been the practice to collect estate duty from the survivor or survivors when one partner in a joint tenancy died. In the case of a joint tenancy comprising three or four partners, it would be reasonable to expect that estate duty would not be charged until at least two ofthe partners died; but the Government proposes in this bill to make the duty payable at the time of the first death occurring among the partners. Apparently the experience of the department has been such as to justify this short cut being taken, and therefore I shall not offer any objection to the new proposal. I hope, however, that in administering this legislation the department will not act harshly towards citizens, who, not fully understanding the law, and without any attempt to evade payment of estate duty, fail to comply with its requirements. I support the second reading.
Question resolved in the affirmative.
Bill read a second time.
In committee.
Clauses 1 to 17 agreed to.
Title agreed to.
Motion (by Senator Sir George Pearce) agreed to.
That clause5 be reconsidered.
Clause 5 -
Section 8 of the principal act is amended-
by omitting paragraphs (a) and (b) of sub-section (4) and inserting in their stead the following paragraphs -
which a person having been absolutely entitled to, has voluntarily caused to be transferred to or vested in himself and any other person jointly whether by disposition or otherwise (including any purchase or investment effected by the person who was absolutely entitled to the property) either by himself alone or in concert or by arrangement with any other person so that a beneficial interest therein or in some part thereof passes or accrues by survivorship on his death to such other person, to the extent of such beneficial interest; or
Senator Sir GEORGE PEARCE:
Vice-President Executive Council · Western Australia · NAT
[11.19]. - After the committee had agreed to clause 5, I was advised of an amendment of paragraph (d), which it is considered necessary to make. I therefore move -
That paragraph (d) be left out with a view to “insert in lieu thereof the following paragraph - ” (d) being the beneficial interest held by the deceased person, immediately prior to his death, in a joint tenancy or joint ownership with other persons ; or “
The amended wording now suggested for inclusion in the bill in place of the present wording of paragraph d in clause 5, has been found necessary in order that all cases might be covered. The House of Representatives inserted the wording, of the Victorian Probate Act in reference to joint tenancies, but that wording is not as clear as might be desired. The bill as introduced into the House of Representatives had provided for the inclusion in the dutiable estate of a deceased person of the value of any property which’ he had vested in a joint tenancy of himself and other persons, and in which he had a beneficial interest immediately prior to his death. That House amended the provision with the intention to include in the dutiable estate only the value of the deceased person’s beneficial interest in the joint tenancy. It is desired to express that object more clearly and concisely than has been done by the amendment made in another place, and that result will be secured by the amendment now submitted, which is, in substance, really the same as what is now contained in paragraph d of clause 5 of the bill, but expresses the intention of Parliament in clearer language.
Senator NEEDHAM:
Western Australia
– I am not quite clear whether this amendment is preferable to paragraph d of clause 5, which it is proposed to leave out. That paragraph reads -
- which a person having been absolutely entitled to has voluntarily caused to be transferred to or vested in himself and any other person jointly whether by disposition or otherwise (including any purchase or investment effected by the person who was absolutely entitled to the property) either by himself alone or in concert or by arrangement with any other person bo that a beneficial interest therein or in some part thereof passes or accrues by survivorship on his death to such other person, to the extent of such beneficial interest; or
Will the amendment make the law harsher in its application to the survivor or survivors of a joint tenancy? I have already indicated that this estate duty assessment law sometimes operates harshly upon those who have to pay it, and I gave my reason for that assertion. I accepted the bill as it was originally presented to this chamber, but now we are confronted with a hurried amendment with which, perhaps, even the Leader of the Senate himself is not fully conversant. The honorable gentleman has informed the committee that another place inserted certain words, and that this amendment is intended to clarify the position. Clarification may be necessary, but I wish to be sure that the amendment will not inflict any additional hardship upon the survivor or survivors of a joint tenancy.
Senator Sir GEORGE PEARCE (Western Australia - Vice-President of the Executive Council) [11.25]. - Anybody who reads clause 5 of this bill must admit that it is very involved and difficult to understand. The purpose of paragraph d is this: Suppose that a person had £10,000, with which he purchased shares or a property in the name of himself and others as a joint ownership, and that within twelve months of the transaction he died. When his death occurs that £10,000 is not dutiable, although obviously it be longed only to the individual who died. That practice is a common form of evasion of probate duty. Technically it is a joint ownership, but actually the ownership is confined to an individual. The amount passes to the nominal survivors of the partnership, and the beneficiaries can repeat the process, so that the estate never becomes dutiable. The intention of paragraph d is to combat such practices, and to bring the amount involved into the taxable arena. It was found that the wording of the paragraph did not quite meet the case, and it is considered that this amendment does so in a simpler and more effective form.
Senator ELLIOTT:
Victoria
– I did not speak on the second reading because I realize that it is usually futile to raise one’s voice on such matters. However, I now register my protest against the Government enlarging its sphere of direct taxation, when it has led us to believe that it is vacating that field as fast as it can. The method of establishing a joint ownership is a practice advised by lawyers to married people, in order to avoid the expense of probate.
Senator Sir George Pearce:
– And also to avoid taxation.
Senator ELLIOTT:
– The savings banks will pay the residue of an estate over to a beneficiary provided that it does not exceed a certain amount and that a certificate of death is produced. It seems to me to be particularly reprehensible and abhorrent for the Government and its taxgatherers to be hanging around the deathbed of a man, practically waiting to snatch the* bread out of the mouths of the widow and children. It reminds me of nothing so much as a shoal of sharks hanging around a boat after a death has occurred aboard.
Senator Foll:
– Does that not apply to all death duties?
Senator ELLIOTT:
– Of course it does, but it is particularly reprehensible in this instance, because it applies to married couples.
Senator Sir George Pearce:
– It is not confined to married people.
Senator ELLIOTT:
– But it is aimed at the usual provision recommended by lawyers to people in a married state. Although nominally the husband may own the money, the wife, by her labour, is entitled to her share of it. II the husband fails to effect a joint ownership, the taxgatherers come round at hia death and claim their pound of flesh. The whole thing is repugnant to any fair-minded individual. It is not always wise for a man to make over the whole of his estate to his wife, as there is a possibility of a dispute occurring which may result in divorce, in which case the wife would have complete control. If an estate is held in the name of both, each party is entitled to a share. It would be exceedingly dangerous for any man to allow his property to be held under a joint tenancy or ownership with another person even with whom he was on the most friendly terms in order merely to escape estate duty. I have great respect for the Leader of the Opposition, but I would not enter into a joint tenancy with him merely for the sake of avoiding estate duties. Human nature is a check on any attempt to defraud the revenue, as there is always the risk under a joint tenancy of one of the parties after the death of the other putting in a claim for the whole of the estate. Under such a system the estate reverts to the survivor.
Senator Foll:
– A man died in Melbourne recently leaving nearly £2>000,000. Does the honorable senator suggest that under a joint tenancy, estate duties could be avoided?
Senator ELLIOTT:
– There is always the natural check which I have mentioned. We have to recognize the facts, and the honorable senator does not suggest that such a thing occurred in the case to which he refers. It is useless theorizing; the possibilities mentioned never occur.
Senator Reid:
– Where would the honorable senator draw the line?
Senator ELLIOTT:
– It is governed by human nature. For years we proceeded smoothly in the absence of estate duties without approaching bankruptcy. The ravenous tax-gatherer is always on the doorstep for his share.
Senator Foll:
– There is a fairly large exemption now.
Senator ELLIOTT:
– In a case with which I have been associated recently the Income Tax Department has been pressing its claim; but liabilities of the estate are such that I do not think there will be anything for the beneficiaries and consequently nothing for the Taxation Department, yet they make demands for returns. I do not intend to oppose the measure; but I am sorry the Government still deems it necessary to pursue taxpayers even to the grave.
Senator Sir GEORGE PEARCE (Western Australia - Vice-President of the Executive Council) [11.35]. - One would think from the remarks of Senator Elliott that the Government was introducing an estate duties measure for the first time. As this principle has been in operation since 1914, and every State has similar legislation on its statute-book, there is no occasion for the honorable senator to oppose it on this amending measure. The schedule to the principal act is as follows . -
Rates of estate duty payable on the estates of deceased persons dying after the commencement of this act: -
That is after all debts are paid. This is a form of taxation that is generally regarded as just. It is imposed by the State Governments, and for the honorable senator now to argue against the principle is beside the question. The amendment is merely to simplify a principle that Parliament has already adopted.
Senator NEEDHAM:
Western Australia
– I realize that in this instance no new principle is involved, as this form of taxation was adopted by the Government in 1914. The doubt which existed in my mind concerning small estates has been removed by the Minister.
Senator Sir George PEARCE:
– It will not affect any estate under £1,000 net, and after that only to the extent of £1 per cent, up to £2,000.
Senator Ogden:
– This is additional to the State tax.
Senator NEEDHAM:
– Federal taxation, including the estate duties, is additional to State taxation, and the only objection I have is that the Federal Government which introduced this system of taxation during the war period as a temporary measure is still continuing it. senator Elliott. - This is the conscription of wealth, which the honorable senator favoured.
Senator NEEDHAM:
– When the manhood of the nation is conscripted I shall always advocate the conscription of wealth. I think the committee can safely support the amendment moved by the Minister.
Amendment agreed to.
Clause, as amended, agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
page 7068
SPECIAL ADJOURNMENT
Motion (by Senator Sir George Pearce) agreed to -
That the Senate at Its rising adjourn until 11 a.m. to-morrow.
Senate adjourned at 11.43 a.m.
Cite as: Australia, Senate, Debates, 21 September 1928, viewed 22 October 2017, <http://historichansard.net/senate/1928/19280921_senate_10_119/>.