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Wednesday, 6 May 1942

Mr DUNCAN-HUGHES (Wakefield) . - The honorable member for Wentworth (Mr. Harrison) and the Treasurer (Mr. Chifley) have referred to the shortage of man-power as the cause of these regulations. Surely the difficulty of issuing assessments has been overstated. Those who have seen the persons who make land valuations know that usually they are men of from 65 to 75 years of age. They have been going about the country for the last few years preparing material for assessments for the new year; consequently, there must be in the files of the Taxation Department a considerable number of assessments that have already been made for the year beginning the 1st July, 1942. I cannot believe that these assessors will be required for either war purposes or munitions purposes. That there is a great deal of work in the Taxation Department is undeniable, hut because the department has to deal with a lot of new forms of taxation, recently devised, that is no reason for withholding from the usual taxpayer his ordinary rights.

These regulations contain a few outstanding points. The Treasurer put his finger on most of them, hut did- not deal with one, which is perhaps of major importance: Why is the date at which land is to be assessed put hack to a period before the outbreak of war ? It is obvious to every body, I imagine, that the present value of land is not likely tobe identical with the pre-war value. Possibly, values have risen.. That would apply particularly to cities, which have experienced a big influx of population, or to areas where there are large defence works, and therefore an increase of population. In such places there follows a natural increase of land values in spite of the war; but there aTe other areas, mostly in country districts, where land values have undeniably fallen. This decline of values is, in my opinion, largely due to the Government's own policy. I should like to ask the Treasurer why the value of land is to be pegged at the figures obtaining prior to the war, while the wages of industrialists are being pegged at the rates prevailing at a date two years after the war broke out. It might be fair to peg land values as at the date of the outbreak of war, but then it should be equally fair to peg wages at the rates then prevailing. Why should they have been increased again and again by war loadings over a period of two years, and then suddenly pegged at that inflated figure? Land values in country areas have suffered because of the fixing of prices of primary products, the rising cost of production, and bad seasons. I should also like to direct the attention of the Treasurer to another matter. It will be a remarkable thing if our cities escape bombing during the course of this war, and it may well be that a great city building erected at tremendous cost will be wiped out altogether in the course of a raid, and the land upon which it stood piled deep with rubble that will cost many thousands of pounds to remove. Is it in any sense equitable, that if such a thing were to happen, the department should tax the land on its value in the middle of 1939 ?

Mr Chifley - Surely the honorable member is not suggesting that some relief would not be given in such a case?

Mr DUNCAN-HUGHES - I suggest that some provision for the giving of relief in such cases should be included in the regulations.

Sitting suspended from 6.15 to8 p.m.

Mr DUNCAN-HUGHES - I now propose to deal with the matter of land which has been over-assessed, possibly as the result of purchase at an exorbitant figure. Before these regulations were promulgated, there were means by which the incorrect figure could be adjusted. For example, when a taxpayer died, valuations for the purpose of estate duty very often clarified the actual value of the land. But these regulations provide that whether land devolves upon trustees or beneficiaries, or is transferred for value to a purchaser, the value of the property as at the 1st July, 1939, shall stand. In the computation of the land tax, the value of the land at the time when it devolves upon the trustees or the transferees will not be taken into account.

Mr Chifley - Probate is computed not upon the unimproved, but upon the improved value of the land.

Mr DUNCAN-HUGHES - The Land Tax Assessement Act lays down the saint rule to govern the assessment of all land, whether improved or unimproved. The rule prescribes that the true value shall be ascertained. The method proposed under these regulations provides for ascertaining, not the true value, but the value on the 1st July, 1939. Thus the original value of land which passes, by the death of the owner, to trustees or is transferred at a lower figure, will still be assessable.

Mr Chifley - That still applies if the value of the land appreciates.

Mr DUNCAN-HUGHES - I do not want to exclude from increased taxation land the value of which has appreciated.

Mr Conelan - The honorable member wants it both ways.

Mr DUNCAN-HUGHES - I do not The real intention of the Land Tax Assessment Act is that the true value shall be ascertained. For instance, the definition of " improved " value in relation to land means -

The capital sum which the fee-simple of the land might be expected to realize if offered for sale on such reasonable terms and conditions as a bonafide seller would require. " Unimproved value ", in relation to unimproved land, means -

The capital sum which the fee-simple of the land might be expected to realize if offered for sale on such reasonable terms and conditions as a bona fide seller would require. " Unimproved value ", in relation to improved land, means -

The capital sum which the fee-simple of the land might be expected to realize if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this act, the improvement did not exist:

In each of those definitions, stress is laid upon the fact that it is the capital sum which the fee-simple of the land might be expected to realize if offered for sale, not three years ago, but at the actual time of the transaction.

These regulations will remain in force indefinitely, regardless of the duration of the war. There is certainly a recital which refers to the " practical impossibility to make revaluations of land during the war" but regulation 10 provides that-

These regulations shall apply to all assessments of land tax issued after the commencement of these regulations, in respect of the financial year beginning on the first day of July, 1940, and of each financial year thereAfter.

I emphasize that it is not my object to ensure that land, which has been under-assessed, shall not be re-assessed at its proper value. What [ claim is that the real value should be assessed. If the value increases, the owner should he taxed upon the appreciated value. If the value has depreciated, he should have the benefit of reduced taxation. These regulations virtually abolish all the definitions of land values that have always regulated the taxation of land, and will certainly cause many inequities. For that reason, I urge the Treasurer to ensure that people who are being heavily hit by declining land values, shall receive sympathetic consideration, whilst others who own property the value of which has appreciated because of an increase of business in their locality, shall pay a higher tax. This inequitable assessment of people should be avoided, though I admit that the regulations will affect mainly people in a relatively well-to-do position.

Mr Chifley - Very well-to-do.

Mr DUNCAN-HUGHES - Whilst that may be true, does the Treasurer consider that it is fair for them to be assessed on the value of the land several months before the outbreak of war? Every body with any knowledge of land knows that since the commencement of the war the values in country districts have declined tremendously. I urge the Treasurer to consider the matters that I have raised.

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