Mr ARCHIE CAMERON (Barker) . - The right honorable member for Yarra (Mr. Scullin) mentioned points that were even more interesting than those raised by the honorable member for Reid (Mr. Morgan) and the honorable member for Watson (Mr. Falstein). From the latter honorable member, we had an entirely new interpretation of economics, for he talked of rent from land as being income. He ought to burn his books on Karl Marx, or give them to the Left Book Club, and take a course in Henry George, in order to learn something about the relative importance of land, capital and labour in production. The honorable member for Watson presented a very confused case, and did not throw any light on the subject at all. The right honorable member for Yarra stepped into the breach and spoke of unearned increment. I should like to know from him what he means by unearned increment. I know what I mean when I use that term, but I am not sure that the right honorable gentleman said exactly what he meant. I cannot understand how we could have an annual unearned increment. Mv interpretation of the tei-m is that it represents the increase that accrues in the sale price of a piece of land due to the expenditure of government money and the natural increase of the land values in the district. That increase is not an annual value, but a total value, and it varies from time to time, according to the value of land and the facilities that happen to be provided. 1 should be interested to hear some members who support the Government dealing with other kinds of unearned increment. I realize that they have not yet become accustomed to sitting on the ministerial side of the House. Some of them, particularly those at the Siberian end, are inclined to think that they are still in opposition. I have never heard them talking of the unearned increment on shares. .Brewery shares and gold shares increase in value from time to time, and I have known government bonds to do so; but those increases occur quite apart from anything that the individual owner may do. I am forced to conclude that there is a singular idea in the minds of the Labour party on the subject of land and land values, and what is sometimes loosely termed unearned increment.

The honorable member for Deakin (Mr. Hutchinson) got right on to the mark when he referred to the wool industry. This is still the most important export industry that Australia possesses, but the Government of the United Kingdom is not so keen as it was during the last war on purchasing Australia's wool clip. Manufacturers experience difficulties to-day that were not encountered dining the last war, and the transport risks are greater now than they were previously. I have a strong suspicion that if Australia pressed too hard for an increase of the price of wool, it might be told that it could store its clip for a considerable period. The United Kingdom will adhere to the agreement entered into with Australia, but I arn not enthusiastic over the idea that by soma government action Australia could secure up to an average price of lod. per Hi. for its clip. Every primary industry is complaining of increasing costs of production, and that increase is experienced by the wool-grower in common with other primary producers.

The right honorable member for Yarra said that the land tax had been responsible for breaking up many large estates, and had en allied young men to go on land of their own and become good farmers. I should like to hear the views on that matter of the honorable member for Wannon (Mr. McLeod), because I arn not quite in agreement with the right honorable member for Yarra. In practically every State, not only on account of the operation of the Commonwealth land tax, but often owing to the repurchase system adopted by State Governments, perfectly good sheep stations have been broken up in order to make very poor farms. To-day, four out of the six States of Australia are actually engaged, willi Commonwealth money, not in subdividing land to bring about closer settlement, but in aggregating holdings ill certain areas so that settlement will be less close than it is to-day. Canberra was a perfectly good, sheep station before the Federal Capital was established here, and I think that every South Australian will agree that, it is a great pity that it ever became anything else. In the Mount Gambier district of South Australia, land has been sold at £S0 an acre, and in the Mount Barker district £40 an acre is not regarded as a high price to pay for land. At those prices, one does not need to own many acres before being liable to pay Commonwealth land tax. This tax imposes two kinds of discrimination. One form of discrimination is always bad, but, when a second is put into ifr. Archie Cameron. operation, the position is infinitely worse. The first is the granting of exemption from the payment of tax on land, the value of which does not amount to £5.000. That provision immediately creates anomalies. Whilst the value of one property may slightly exceed £5,000, the value of an adjoining property, of similar area, may come just under that figure. The owner of the first will pay federal land tax; his neighbour will not. This line of demarcation forms a "noman's land " in administration.

The second discrimination arises from the imposition of a penal tax upon an estate, the value of which exceeds a certain figure. The inference to be drawn from this practice by a visitor to Australia is that it is a bad thing, in this young country, to have men who are prepared to invest large sums of money in big areas of land, and to work them.

Mr Calwell - The original "squattocracy " did not invest very much money in the land.