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Wednesday, 27 May 1942


Mr SPENDER - That hardly supports the argument of the honorable member.


Mr RIORDAN - The Commonwealth can take all and leave nothing for the State, but the money collected must be for Commonwealth purposes. In The Commonwealth and Attorney-General for the Commonwealth against the State of Queensland and the Commissioner of Income Tax (Queensland), 1920, 29 C.L.E., at page 1, a decision was given which was reviewed in a later case by

Mr. JusticeEvatt, who, in disagreeing with it, made the following remarks : -

But the outstanding feature of the case was not that the Commonwealth was seeking to bind third persons generally, but that it was making an extremely audacious attempt to set at naught the great constitutional powers of each State to impose taxation on all its citizens for the maintenance of its internal peace, order and good government.


Mr Spender - ."What application has that to the bill?


Mr RIORDAN - The honorable gentleman interjected earlier that the taxation powers of the Commonwealth and the States may overlap.


Mr SPENDER - They do.


Mr RIORDAN - They do; but the Commonwealth cannot collect taxes on behalf of a State. The State acts in its own right, and cannot be prevented by the Commonwealth from exercising that right.

To sum up: the opposition to the proposals of the Commonwealth, contained in these measures, is based on the following grounds : -

1.   That they impinge upon the sovereignty of the States;

2.   That they are at variance with the federal pact, which was truly in the nature of a partnership;

3.   That if the right of taxation, which is an essence of sovereignty and responsible government, be taken from the States as is now proposed, these sovereign bodies will be reduced to a state of vassalage, which was not envisaged by the framers of the Constitution and was not so understood by the people;

4.   That a responsible State Government with no control over its taxation laws would not be empowered to administer for the peace, welfare and good government of the State, or in the interests of the people who had placed it in power to act as their trustees ;

5.   That any policy of state planning, such as has been so successfully achieved in some States over the past decade, would he in danger of collapse, to the detriment of the people of the State as a whole. Particularly is that the position in Queensland.

6.   That a wise and foreseeing government, such as Queensland has had the fortune to possess, would have its judicious handling of the finances of the

State and its stability upset, in that it would not be able to budget with any degree of certainty from one year to another.

7.   That the authority proposed to be set up to consider the " compensation " to be payable to the States not only would be a reflection on true constitutional government, in that it would be a body without the people's sanction and not responsible to the people, but also would be in a position to act as an intermediary " overlord " of the State, the government of which would be in the position of a claimant going cap in hand to it seeking a recommendation to the parent Commonwealth.

8.   That as there exist?, so far as the State of Queensland is concerned, a statutory arrangement whereby the State taxation authority collects both Commonwealth and State income tax at the same time, and in fact utilizes employers to collect both State and Commonwealth income tax from employees at the source, the argument that a reduction of staffs would ensue practically vanishes.

Whilst co-operation between the States and the Commonwealth is essential to the prosecution of the war, it is most undesirable that, under the cloak of war necessity, a measure should be introduced which, in effect, would destroy selfgovernment in the States. A State government, charged with the responsibility of administration, is the best authority to decide what tax its citizens ought to pay for State purposes, bearing in mind the principle of taxation always observed by the Queensland Government, that the rate of tax should be based upon capacity to pay. Taxation should involve as little hardship as possible, and all the people should be treated fairly and justly. A State such as Queensland, which is mainly a primary-producing State, should have the right to say what taxation its people ought to pay, having regard to the nature of the State itself, the development of its resources, and the needs of its primary producers. Queensland is different from such States as Victoria and New South Wales, which have stable secondary industries. No good arguments have been advanced for the drastic change which this legislation, would effect - a change unique in the annals of federation, and one that would alter the very nature of the federal pact. If such a change be effected it will inevitably lead to dissension, not only between the Commonwealth, and the States, but also between the States themselves, and that at a time when unity is essential for the safety of the nation. I do not believe that these arbitrary powers should be taken by the Commonwealth. It is for the people of Australia to say whether or not State Governments should be abolished. This Parliament has no mandate from the people to abolish them. Let us follow constitutional methods, and allow the people to make the decision.







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