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Wednesday, 6 May 1942


Mr JOLLY (Lilley) . - I haveno personal objection to the main object of the statutory rule, because it will be advantageous, not only to the Government, but also to the taxpayer. If th, rule be retained in its present form, however, it will create many grave anomalies. The honorable member for Wentworth (Mr. Harrison) has referred to a number of cases in which, if the alteration in values between the 1st July, 1939, and the present date be not taken into consideration, grave hardship will result. I understand that the Treasurer (Mir. Chifley) has already received a letter from the Taxpayers Association of Queensland in reference to a more glaring case than those already mentioned by the honorable member for Wentworth. The taxpayer concerned was assessed for federal land tax purposes in 1939-40 on a land valuation of approximately £500,000. After argument his appeal was settled out of court, the taxpayer and the Commissioner of Taxation agreeing to accept a valuation of £500,000 for 1939 and a valuation of £400,000 for 1940. It is clear that the Commissioner was satisfied that the appeal was justified, because he was prepared to accept a lower valuation in 1940 than had been placed on the property for 1939. Under the rule, however, the Commissioner of Taxation must revert to the valuation of the 1st July, 1939, and assess the taxpayer for land tax purposes at the original valuation of £500,000, notwithstanding that he had agreed to accept the lower valuation of £400,000 for 1940. I do not think the Government intended that such a case should be interfered with when it introduced the statutory rule. In the interests of both the taxpayers and the Government, I think we should maintain the right of appeal which is provided for in the Land Tax Act.

The honorable member for Wentworth has referred to the appointment of an appeal board, but I think all that is necessary is to preserve to the taxpayer the right of appeal which at present exists. There are many cases in which valuations have depreciated because of conditions that have arisen since the outbreak of war; other properties have appreciated in value since the 1st July, 1939. I realize that the Government must obtain revenue, but the value of the land should be just; it should enable the owner to earn sufficient to live on and to pay the tax. In some cases it will be impossible for the property owners to cover themselves in such a way that they will be able to meet both the State and. Federal land taxes and also municipal rates. As I read regulation 7, it would appear to me that if an owner subdivided a property valued at £10,000, the new owners in the aggregate would have their properties valued for laud tax purposes at the total value of the land on the 1st July, 1939. How is that value to be arrived at? One cannot take the ratio of the value of the sub-divided blocks to the value of the area as a whole because the owner of a corner block would have a more valuable property than an owner in another part of the area.


Mr Conelan - Is there not provision for a revaluation on a subdivision?


Mr JOLLY - No, not on my reading of the regulation, but perhaps the Minister can explain it. The original value for the whole block will be maintained. As an example, if a block of land valued at £40,000 were subdivided among ten owners the value would be split up equally among the ten owners. That cannot be done equitably because one portion might be more valuable than another.


Mr Fadden - It might be a corner section.


Mr Chifley - It would be all right so long as the whole worked out at the previous total.


Mr JOLLY - No, but I can see the Treasurer's point. He claims that as long as the department maintained the £40,000 valuation, it would not matter how the amount was split up. That would not be fair. In such cases there should be provided a right of appeal, because special consideration is justified. Have the State governments been approached by the Government to carry out a policy similar to what is embodied in the statutory rule? If that has not been done we shall lose much of the benefits of these regulations. Land tax returns submitted to State governments far exceed the number submitted to the Commonwealth Government. I assume that even if the Government's uniform tax proposals become effective they will relate only to income tax and not to land tax. We shall still have separate assessments in respect of State and Federal land taxes. Apparently this lack of uniformity is to continue. Another aspect of the subject must be borne in mind. I keenly regret that the land tax has not been left to the local governing bodies as a field of revenue. According to the latest available figures, Commonwealth and State Governments are raising £5,300,000 annually in land tax. But, because of Commonwealth and State legislation, local governing authorities arc not able to raise sufficient revenue from sources available to them, and they are receiving Government grants which aggregate £6,300,000 a year. Instead of tinkering at this subject, the various governments should allow to the local governing bodies the sole exploitation of this field for their revenue purposes. Whatever the land tax could do to effect the breaking up of large estates, has already been done, and we do not need to retain the tax for that purpose. Whether what has been achieved is satisfactory is another matter. To the general principle of the pegging of land values I offer no objection, but the submissions of the honorable member for Wentworth should receive the close consideration of the Government.







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