Explanatory Memorandum
(Circulated by the Treasurer, the Honourable J. B. Chifley.)Ed Note.
CLAUSE 10.-DEDUCTION FOR MEMBERS OF THE DEFENCE FORCE AND MERCHANT SEAMEN.
Clause 10 of the Bill provides for the allowance of a special deduction to members of the Defence Force and to members of the merchant marine service serving on sea-going ships.
The definition of "mariner" in sub-section (4.) of the proposed substituted section 81 of the Principal Act requires that the master, officer, seaman, &c., should be employed by the owner or charterer of the ship.
It has since been ascertained that the radio operator and the assistant radio operator are not employed by the owner or charterer, but are employed by the Wireless Company which provides the wireless equipment and operators under contract with the shipowner.
The radio operators are accordingly not covered by the definition in the Bill, and the amendment is designed to ensure that they will receive the special deduction.
CLAUSE 14.-CONCESSIONAL REBATES.
The first amendment to this clause is simply a drafting amendment, and is not shown in this memorandum.
Under section 160(2.)(a) of the Principal Act provision is made for the allowance of a tax rebate in respect of a dependent female relative of a widowed person having the care of that person's children under the age of sixteen years. Under paragraph (b) of the sub-section provision is also made for an allowance of a tax rebate in respect of the taxpayer's children under the age of sixteen.
The Bill extends the concessional allowances to include an allowance for a tax rebate in respect of a dependent daughter keeping house for her widowed father or mother.
In a case where the widowed person had dependent children under the age of sixteen years and his daughter had the care of his children and kept house for him, it would be possible for a double allowance to be given in respect of the daughter, firstly, under section 160(2.)(a) as a female relative having the care of his children and, secondly, under the proposed paragraph (aa) as a daughter wholly engaged in keeping house for him.
As a matter of fact, if the daughter were herself under the age of sixteen years it would be possible for a treble allowance to be made under paragraph (a), proposed paragraph (aa) and paragraph (b) of the sub-section.
The second amendment to the clause is designed to prevent a double or treble allowance of a tax rebate in respect of the same person. The allowance will be based on the highest amount applicable under the paragraphs which apply to the particular case.
CLAUSE 27.-APPLICATION OF AMENDMENTS.
This clause is being amended as a consequence of the inclusion in the Bill of new clause 8A. The new clause is being made to apply to assessments for the financial year 1942-1943 and all subsequent years.
Clause 11 of the Bill, which amends the Private Company Division of the Principal Act, is very closely related to clause 12 which makes a similar amendment to a later section of the same Division. Clause 12 is being made to apply to assessments for the financial year 1942-1943 by the Bill and accordingly clause 11 is, by the amendment, being given a similar application.
NEW CLAUSE 8A.-EXPENDITURE FOR ENEMY RAIDS PRECAUTIONS.
Section 72B of the Principal Act provides for the allowance of a deduction of expenditure for enemy raid precautions incurred for the purpose of protecting persons employed on premises owned or used by the taxpayer for the purpose of producing assessable income.
It has been pointed out that the section does not provide for the allowance of a deduction in respect of expenditure incurred by a landlord in the construction of shelters for the protection of tenants and employees and customers of tenants or of a taxpayer's customers where he is engaged in a business.
Sub-section (1.) of the section has accordingly been redrafted to ensure that the deduction will be allowed in respect of expenditure of this nature in all cases except where the expenditure is incurred in connexion with premises not used primarily and principally for the production of assessable income.