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Wednesday, 26 November 1941

Mr SCULLIN (Ya rra) . Listening to the plaintive speeches of honorable members opposite about the struggling farmers, and the deadly incidence of this tax, which they describe as a capital tax, one would never dream that they themselves, when in office, increased the land tax by 50 per cent.

Mr Harrison - We are not objecting to the increase.

Mr SCULLIN - The honorable member does not object to what his Government did ; he only objects to what we arc doing. With the change-over from the Government side to the Opposition side of the House, honorable members' views on taxation change also.

Mr Holt - The right honorable member should not misrepresent us.

Mr SCULLIN - In what way am I misrepresenting members of the Opposition ?

Mr Holt - We reduced the rate of the land tax progressively from 1922 until just before the war. Not until after the war broke out did we increase it. We arc not resisting the passage of this bill now, but merely point out that there is an objection to the principle of this tax.

Mr SCULLIN - When the honorable member was a member of the Government which, last year, increased this tax by 50 per cent., he did not raise his voice against, the principle of the tax. nor did the honorable member for Went worth (Mr. Harrison) when he was trying to get into the Government. This has always been regarded as a tax on unearned increment. It has been described as a sectional tax, and so it is. It is a tax on those who own land. Everybody does not own land : every body cannot own land, because there is a. limit to the area of land available in Australia. Those people who are privileged to own land of high value, a value which has been created by the efforts of the whole community, are called on to pay tax, and that is right. I sat behind the first Government which imposed the land tax, and I supported it with pleasure. It was designed to break up big land monopolies, and to give to the sons of farmers an opportunity to settle on the land of their birth. It did not succeed 100 per cent, in achieving its purpose, but it broke up many large estates. I could point to many holdings in the Western District of Victoria which were only a sheep run before this tax was imposed. Now, on that same land, there are homes and crops, and a greatly increased population. The honorable member forFawkner (Mr. Holt) boasts that his Government reduced the land tax. That is nothing to boast of ; that was an offence against progress. The action of the Government which imposed this tax gave to the sons of farmers an opportunity to settle on the land alongside where their fathers had reared them.

Mr Collins - It gave them their birthright.

Mr SCULLIN - That is so. We are sometimes asked why the people are crowding into the cities. They are being driven from the country by landlordism and land monopolies. The degree to which the land tax has failed to meet that evil may be laid at the door of antiLabour governments which have successively reduced the land tax. Under this proposal an additional £500,000 will be obtained in land tax, yet when the preceding Government raised an additional £1,500,000 last year by means of an increase of this tax no objection was raised by honorable members opposite. We have heard about the struggling farmer, and also about the "big" farmer, but a farmer will need to be engaged in a very big way to be affected by this measure, because the super tax will apply only to those whose taxable balance exceeds the unimproved value of £20,000. No less than 75 per cent, of the tax will fall on the owners of city property, and 75 per cent, of country landholders will be exempt from the tax. Under the Constitution, we cannot impose taxes that discriminate between city and country property holders.

Mr Holt - Does the right honorable member suggest that we could not exempt lands used for primary production?

Mr SCULLIN - I do not think that we could.

Mr Spender - If we can exempt the owners of land up to the unimproved value of £20,000, why cannot we exempt particular classes of land?

Mr SCULLIN - I should be glad to have the honorable gentleman's legal opinion on the matter, and to assist him in adding another 20 per cent, to the tax on city property-owners.

Last year, the Government was compelled to increase the land tax, and prior to that there was another increase of the tax. Both war expenditure and the land tax are progressively increasing, but we have not increased the land tax to the same degree as in the last war in respect of lands below the unimproved value of £20,000.

Mr HUTCHINSON (DEAKIN, VICTORIA) - During the last war, Australia received lod. per lb. for its wool.

Mr SCULLIN - If the Government which the honorable member supported, had looked after the interests of the growers, they would have received lod. per lb. for their wool during this war. Whilst this impost may be classed as a capital tax, it is u tax on capital value of a distinct nature, because the value represents the unearned increment, not of the farmers, who are doing the real work of Australia, but of the wealthy city property-owners.

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