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Tuesday, 22 November 1938


Mr FORDE (Capricornia) .- I take it that the bill now before the House is to give effect to a statement made in the budget by the Treasurer (Mr. Casey) that he intended to increase the rates of land tax by approximately 11.1 per cent. The land owners of Australia to-day enjoy an exemption for unimproved land up to a value of £5,000. Absentee owners pay on the full unimproved value of their holdings. In view of the heavy commitments for defence, the Opposition intends to support the measure, though it believes that a larger increase of the federal land tax would have been preferable to the proposed increase of the sales tax provided for in the budget. Considerable comment ca.me from certain quarters regarding the proposal by the Commonwealth Government to increase the federal land tax by 11 per cent., which is expected to yield approximately £140,000 per annum, as against an increased yield of £1,300,000 from the proceeds of the increased sales tax for the present financial year. As the budget is known as a defence budget, making provision for £16,796,000 for defence for the current year, I do not think there can be much opposition to this comparatively small increase of the federal land tax, particularly in view of the fact that the large land-holders of Australia have much more to lose than the average working man if Australia were inadequately defended and could be successfully invaded. Surely, then, it is not unreasonable to ask the wealthy land-owners to pay a higher rate of taxation. Comparing 1931-32 with 1937-38, I find that indirect taxation has been increased by £19,600,000 and the total taxation by £15,000,000. I shall, however, confine myself specifically to land taxation, and the assertion that, as the federal land tax weighs heavily upon the struggling primary producers of Australia, it should he wiped out altogether. From a survey of the figures and a perusal of the reports of the Commonwealth Commissioner of Taxation, I find that city landowners pay approximately twotbirds of the federal land tax. That proves that the land tax is paid very largely by the wealthy classes of Australia, wealthy institutions and wealthy trading companion. The enormous buildings being erected in the capital cities to-day indicate the profits that these rich financiers, corporations, banks and newspaper magnates are making. I think it can be fairly claimed that they are in a very good position to meet this small increase of taxation. As the result of the increase of the sale3 tax from 4 per cent, to 5 per cent., the Government proposes to collect in a full year £1,900,000, yet it sets out to collect only the small sum of £140,000 by way of increased land tax from the rich city and country land-owners.


Mr Casey - Income tax falls upon those same people.


Mr FORDE - That is true; it falls upon them as it falls upon everybody, but the increase of sales tax weighs -more heavily upon the poorer classses of the people with large families than on the wealthier class. As the rich land-owners are quite able to pay a greater share of the money necessary for the defence of this country, the Government should insist" that they should be asked to subscribe a much more substantial sura than ii demanded from them at" present. If that were done, much needed relief could be given to the poorer sections of the people. The accumulated value of land tax remissions since 1932-33 amounts to no less than £7,560,000. If this is, as the Government claims, a time of emergency, when every effort should be made to place our defences on a sound basis, and when every sacrifice should be made by those who can afford to do so, those best able to pay should be asked to contribute the greater portion of the cost incidental to adequate defence for Australia. It is true that the Government has increased the rate of income tax this year, but here again, this falls uniformly on those on lower salaries as well as those on higher salaries.


Mr Casey - Uniformly?


Mr FORDE - Yes. The man with a huge income certainly contributes a greater sum than the man on a small income, but otherwise the impost falls uniformly on all classes of the community. In my opinion the increase of the land tax imposes no additional burden upon the smaller section of primary producers in Australia.


Mr Holloway - The real producers.


Mr FORDE - That is so;" it imposes no additional burden on the men who arc struggling to produce wheat under adverse conditions, such as prevail to-day in Victoria. This is obvious from the very fact that while there is a general exemption up to £5,000 there is in addition an exemption in respect of unimproved land up to that amount. For example, the owner of a property valued at £8,000 with improvements valued at £3,000 would pay no federal land tax at all. Consequently I cannot see even the honorable member for Forrest (Mr.

Prowse) objecting to this small increase. I am sure that he will agree with me that the Government would have been justified in further increasing the federal land tax and reducing a tax that was so abhorrent to him for many years, namely, the sales tax. The aggregate remissions of land tax made by this Government, as I have said, amounted to £5,760,000.


Mr Prowse - The honorable gentleman does not say much about General Motors-Holden's Limited.


Mr FORDE - At a time when the Country party has half the number of posts in the Federal Ministry, General Motors-Holden's Limited has made a profit of £1,000,000; yet the honorable member's party has done nothing to bring about a reduction of the price of motor bodies. The following are some of the large firms which benefited from the reductions of federal land tax made by this Government: -

 

It is no wonder the Government had unlimited funds with which to fight the Labour party at the last general elections, seeing that it had remitted millions of pounds of taxation to the big landholders in the cities.


Mr Lazzarini - And not a farmer among them.


Mr FORDE - That is so. Yet Government supporters, when they went out into the farming districts, told the farmers that their hearts bled for those on the land who had to pay this iniquitous federal land tax, which had been imposed by a Labour government on the pretext of breaking up the big estates, and which had remained in force until reduced by the Lyons-Page Government. When we examine the facts, we find that those who made the strongest representations for the reduction of the land tax by 50 per cent. were, not the small graziers, the wheatgrowers, the cane-growers, or the cottongrowers, but the huge financial corporations in the big cities which own valuable blocks of land at street corners where great eight and ten-storey buildings rear their heads. One ofthese firms has benefited to an amount of £64,000 by the remission. So much for the mistaken idea that the federal land tax is borne by the struggling producers. I support the bill because, in the circumstances, I believe that the proposal to increase the federal land tax is justified. 1 deeply regret that the Treasurer did not increase it still more, so that he might have given some relief to those who pay sales tax which, like most other taxes, is borne by those people who are least able to bear them.

Mr.PROWSE (Forrest) [8.35].- This is a measure in regard to which some discrimination should be shown. Assets should be valued on their capacity to earn. . A few minutes ago, the honorable member for Riverina (Mr. Nock) pointed out very clearly that even the great squatters of Australia will suffer this year a loss of over £6,000,000 income from wool, and the country as a whole will suffer as the result. It was a decrease of the productive value of land and reduction of commodity prices, which brought about the depression we have gone through, and will bring about the depression we are entering upon. I do not think that it is good policy to tax those who have so little income that the taxation authorities have been able to inform the Treasurer (Mr. Casey) that they pay practically no tax at all. When we compare the returns from the land with the returns from some of the great sheltered industries from which the Government has no means of deriving a proper return in revenue, we realize that there is something very wrong. When a sheltered industry makes a profit of as much as83 per cent., we should tax it more heavily, rather than tax the pastoralists who are producing goods with which to establish the credit of the country. In Western Australia, there are men who, a little while ago, thought they were worth £50,000, but during the last two or three years they have got into debt to the banks. They have lost nearly all their stock. At any rate their wool return has declined by as much as 70 per cent. This is not the time to muzzle the ox that treads out the corn. The Government, as administrator, should recognize, that it is not helping the country by handicapping still further the primary producers.







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