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Wednesday, 14 October 1931
Page: 724

Mr GREGORY (Swan) .- I have no doubt that the Government is well intentioned with regard to this matter, but it has opened the door wide to action on the part of the Commonwealth Government as against the States - action which may prove very unfair. I do not know under what section of the Constitu tion the Government has power to restrict the right of the States to impose taxation.

Mr Archdale Parkhill - The Commonwealth Government does not propose to interfere with that right.

Mr GREGORY - If New South Wales imposes very heavy taxation upon one section of public servants, this Government can, by regulation, fix the amount at which they are taxable.

Mr Archdale Parkhill - That does not impinge on the right of the State government to impose taxation.

Mr GREGORY - If it cannot collect the taxation, what is the use of imposing it?

Mr Scullin - Suppose one State made the whole of its reduction by way of taxation, and the Commonwealth did it by means of a reduction of salaries, would it be fair to allow that State to impose that taxation on Commonwealth employees whose salaries had been reduced ? It would be a double impost.

Mr GREGORY - But under what power can the Government take action?

Mr Scullin - No State government has power to impose taxation on Commonwealth public servants, or on members of the Commonwealth Parliament, except by virtue of legislation passed by this Parliament. It was a Commonwealth act passed in 1907 which gave them power to impose such taxation. The matter was tested in the High Court, and after its decision had been given, the legislation of which I speak was passed.

Mr GREGORY - I understood that the States had full power of taxation, except that they could not tax Commonwealth property, and the Commonwealth, in turn, could not tax State property.

Mr Scullin - And except that the States have no power, except by virtue of special Commonwealth legislation, to tax members of the Commonwealth Parliament, or officers of the Commonwealth Public Service.

Mr GREGORY - That section of the Constitution has escaped my notice. In view of the decision of the court, however, I must be silent.

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