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Wednesday, 6 May 1942


Mr HARRISON (WENTWORTH, NEW SOUTH WALES) - The valuation was reduced on appeal. In 1938 the tax paid upon this property was £741; last year it had increased to £1,450. With the reversion to 1939 values and various increases of taxes which have been imposed by successive governments, the tax for the current financial year will be £1,920. From that assessment, there is no appeal.


Mr Jolly - Does federal land tax account for the whole of that sum?


Mr HARRISON - Yes. I remind honorable members that the three instances that I have cited relate to city properties. They are acknowledged to be large holdings, because the land tax applies only to large holdings.

I shall now refer to the effect of these regulations upon country properties. The assessed value of one property in 1939 was £39,409. In 1940 the owner objected to the valuation and the department reduced the figure by £5,076.I remind honorable members that the department does not reduce a valuation unless the owner makes out an excellent case, and shows that the value is not in the land. On appeal, then, the department accepted the taxable value of the property as being £34,333. As the result of the promulgation of these regulations, the rebate of £5,076 is immediately forfeited and the land will be assessed at the old figure of £39,409. The examples which I have cited should convince the House that if my interpretation of the regulations be correct, injustices will be inflicted upon various persons, who will have no right of appeal. In my opinion, the Government should have the right of appeal if the value of a property has appreciated; the taxpayer should have the right of appeal if the value has depreciated.

I shall now analyse the assertion that taxpayers will not be the victims of injustice if they are denied the right of appeal against the valuations of their property. Has the war affected the value of land, causing it to fluctuate between the upper and lower limits? Quite apart from the incidence of war itself, there are factors operating, including the Government's own actions, which materially affect the value of land. For example, taking the value of city properties first, I remember that at the beginning of the war, when I was Minister for Trade and Customs, it fell to my lot to impose upon the community import restrictions which had a grave effect on small importers. Those men were forced out of business and their offices became vacant. The rent was no longer available to the owners. The value of the properties depreciated, and income was not available to the owners to meet their ordinary obligations, let alone their increased liability for land tax brought about by reversion to the 1939 valuations. The operations of the Minister for War Organization of Industry (Mr. Dedman) in rationing industries must have a still more far-reaching effect on the value of land in cities because it will almost indiscriminately close up blocks of shops and offices. Restrictions upon trading will have a serious effect upon land values and the income will not be available to the owners to enable them to meet their ordinary business obligations, let alone pay tax on increased land valuations. Let us look at the properties in the vulnerable areas - Darwin, for example. Darwin has been bombed, and is now evacuated entirely by the business community and the civil population. The value of land in Darwin must have depreciated extraordinarily. Likewise, the value of properties on the waterfronts of the big capital cities has also depreciated. In my electorate there are huge blocks of flats which are half, or, in some instances, three-quarters, empty. What will happen to the owners of properties when the Government compulsorily evacuates certain areas? Will they get any relief, or, notwithstanding that they will have no income, will they still have to pay the increased taxation and, mark you, have no right of appeal ? The absence of a right of appeal is a fundamental flaw in these regulations. Let us consider holdings in the country. The value of land in country areas where production of crops has been limited by many factors, including the destruction of crops, shortage of manpower and fertilizers, has depreciated to an extraordinary degree. I do not say that the value of all the land has depreciated. Where I can cite a case in which these regulations bear harshly upon land-owners, the Treasurer can probably cite another case in which the value of land has appreciated. 3 acknowledge that, but the taxpayer must have given to him the right of access to a board of appeal. The Government must have equal access to such a board. The values of land in areas near defence works, of country holdings purchased by evacuees, and of land on which crops have been sown under government contract no doubt have appreciated, but anomalies and injustices will be created if all cases are lumped together, irrespective of whether values have appreciated or depreciated. The only way in which to overcome such anomalies and injustices is by the creation of aboard of appeal.

As I said earlier, I am assuming certain things with regard to these regulations, and the Treasurer may be able to correct me on certain points,so placing the matter beyond all reasonable doubt. Honorable members on this side, and the business community generally, are concerned.


Mr Chifley - This is absolutely the first time that I have heard any objection to these regulations.


Mr HARRISON - The Treasurer amazes me, because, since this motion has been on the notice-paper, I hare been almost inundated with protests against the regulations. I should like the Treasurer to explain regulation 6(3), which reads -

Nothing in the last preceding sub-regulation shall apply to any objection posted to or lodged with the Commissioner prior to the commencement of these regulations.

Where a taxpayer, before the issue of these regulations, has lodged an objection against the 1941-42 assessment, will it be proceeded with, and, if successful, will a reduced value continue in force, even though it is less than that which was in force in June, 1939? Regulation 5 reads -

All assessments of land tax to which these regulations apply shall be tentative only, and subject to amendment when the value of any area of land or of any interest therein is varied, in suck a manner as the Parliament prescribes, in respect of any financial year.

Does that imply that where sales or any other evidence warrant an increase of value the tentative assessment can later be amended retrospectively, or will the 1939 values be accepted as final? Those are two clauses which I should like the Treasurer to explain more fully. As I have said, the Opposition wishes to be not obstructive, but helpful in these matters. We do not object to the stabilization of land values for taxation purposes. Whilst possibly it is necessary at present, we claim that the Government has chosen the wrong period to stabilize. The Government proposes to stabilize at the beginning of a triennial period instead of at the end; irrespective of the fact that in the interim appeals have been lodged, concessions and reductions have been made, the department is reverting to valuations at the beginning of the triennial period. I suggest to the Treasurer that he should consider amending the regulations to provide for the right of appeal. I agree that these factors have an important bearing on land taxation, but more important is the fact that such adjustments will not overcome injustices which have been perpetrated or might obtain from month to month as the war progresses. Injustices can be overcome only by the creation of an appeal board. It is a fundamental principle of all taxation that the taxpayer should have the right of appeal against an unjust assessment. At the same time, I should give the Commissioner of Taxation the right of appeal against what he considered an insufficient assessment. I seek an assurance from the Treasurer that an appeal board will be constituted.







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