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Thursday, 28 May 1942


Mr FADDEN - They have the same power as our .States have.


Mr SCULLIN -Yes. The Parliament of the Dominion of Canada submitted to the provinces a proposal identical with the scheme which is before this Parliament and, to the credit of the provinces, they accepted it. The scheme was that the provinces were to vacate the income tax field and compensation was to be paid to them on the basis of the collections of the previous year or the cost of the net debt service, excluding the sinking fund, less the revenue from succession duties. Of the nine provinces, five, the stronger, took compensation on the basis of the previous year's income tax collection, .and the others on .the basis of the net cost of their debt services. There we have a sister dominion with a constitution similar to ours, with provinces enjoying power to levy income tax, agreeing to vacate the income tax field. " Voluntarily ", members of the Opposition will say. Yes, and a great pity it is that a .lesson was not learned from those Canadian provinces by the Australian State governments.


Mr Holt - Did those provinces have uniform social services?


Mr SCULLIN - Canada has the same inequalities to deal with as we have here, but the Canadian people realized that they were at war and they accepted the position and faced the facts. I could mention some parochial views on this scheme, but I am proud to say that I have received many letters about this scheme, most of them congratulating the Government and some criticizing the reimbursement of the States, but not one criticizing the added impost on the individual, although it is true that there will be some increase of tax in Victoria, except on the lower incomes, because, for various reasons, it is the lowest taxed State. But the people of Victoria recognize that in time of war every citizen of Australia ought to contribute on a uniform basis to the tax collections of the Commonwealth and the States combined.


Mr Paterson - That is what we should like to do.

Mr.SCULLIN This does that

Ma-. Paterson. - No, not State and Commonwealth combined. By no means !


Mr SCULLIN - This, scheme provides for uniform income taxation.


Mr Archie Cameron - This scheme gives a bounty to the prodigal States.


Mr SCULLIN - I shall examine that. It is true that New South Wales gets a very large amount of compensation as compared with Victoria. That is because New South Wales went into the field of income tax more -heavily even in proportion to population than did Victoria. It gave better social services and conditions to its people, whilst Victoria lived, as some people would say, prudently, and as other people would say, parsimoniously. That has been largely adjusted since the previous Government introduced child endowment and this Government widows' pensions. Gradually, through the Commonwealth Parliament, we are lifting Victoria's social services to a level comparable with that of New South Wales.


Mr Martens - In spite of the State Parliaments.


Mr SCULLIN - Yes. On the point of disproportion between, say, Victoria and New South Wales, I emphasize that exactly the same disproportion as exists to-day, and as existed in 1941, when the Menzies. Government was in office, will exist when this legislation is passed. It is true, that taxation in some States has gone up and in other States down- - no protests have come from the taxpayers - but, when we come to the amount o£ money available to governments, there will be no change from what obtained last year.


Mr McEwen - So far as individuals are concerned there will be a change.


Mr SCULLIN - I said that as far as individuals were concerned there will be a change, and I also said that I had received no protests from individuals. All the protests have been about the disproportion, as between governments. I point out that the difference between what is proposed, and what now exists is so slight as not to be worth mentioning. The collections of the States from income tax in 1940-41 amounted to £35,000,000. All States will be relieved of the costs of collection, and those States which paid widows'' pensions, the cost of those pensions. The. compensation is £34,000,000. The collections of State income tax per capita in New South Wales in 1940-41 amounted to £6 0s. 3d., and in "Victoria to £3 9s. 7d. In compensation New South Wales will: get £5" 15s. 2d. per capita, and1 Victoria £3 10s. 4d. New South Wales comes down 5s. Id., and Victoria goes Up 9d. per capita. That is only a slight difference. When we compare government with government, therefore, we have practically no change between the amount of disproportion which now exists and has existed for years, and that which, will exist when these proposals become law.


Mr Archie Cameron - New South Wales has received substantial relief as the result of acts passed by this Parliament, and that relief is not accounted for in these bills.


Mr SCULLIN - The State from which the honorable member conies has received more in proportion to its population from war expenditure than ' has been received by any other State in the Commonwealth. Victoria is second to South Australia in that respect.


Mr Archie Cameron - If South Australia has geographical' advantages that is its good luck.


Mr SCULLIN - If geographical advantages go to people of one State as against another State, it is good luck in peace-time, but the money value of that advantage should be shared equally by the Commonwealth in war-time. The suggestion has been made that we ought to pay compensation on a per capita basis. That would result in one State having a surplus of £3,000,000, and another State a deficit of £2,000,000. The immediate effect would be that the State with a deficit would approach the Loan Council and have the deficiency made up - that would take money from the war effort - whereas the State with a surplus would have more money than it says it wanted. We cannot afford to give to a State more than it budgets, for. Consider again Victoria, which claims to be treated unfairly in comparison with New South Wales. I remind honorable members that this year Victoria will receive £256,000 more than it budgeted for. So, it cannot say that it wants more money, unless it can show what it will do with it. If we were evolving a permanent scheme some regard would have to be paid to population and growth, but as a war measure this legislation stabilizes- the position of the States. What has. been the general- outlook? The right honorable member for Kooyong (Mr. Menzies) talked about the Constitution and said: "You will violate the Constitution if you do something to destroy the States". There is nothing in this proposal which will destroy the States. It has been said that its one fault is that it is too generous to- the States, but at least it is fully just to the States. They can have no complaint if they receive compensation based upon their buoyant, revenues in two years of war. It is said that this scheme will infringe State rights. That was also said of the voluntary scheme proposed by the- Leader of the Opposition when he was. Treasurer. All that I have to say is that in these times of peril all rights are in danger. Boys who have devoted much of their young lives to reaching high standards of education, aspiring to be something great in the future, have been called up for national service; men who earned large salaries have been called up to fight for 6s. a day; businesses have been closed down, and sacrifices have been made all round. Present rights have been taken away so that future liberty may be assured. This talk of State rights and State boundaries saddens me when I think of our sailors, soldiers and airmen, who are fighting all over the world to-day, irrespective of national boundaries. When I see American and Dutch squadrons here to defend this country I am reminded even more strongly of the obliteration of national boundaries. Why do not we, in this Federal Parliament, forget about petty State boundaries? Let us hear the last of this puerile cry of ".State rights". If we do not win this war all rights may go. I urge honorable members to face the facts. This Government wants more money. This scheme is one way of securing more money; it is one way of saving the work of 1,000 men ; and it is one way of saving £250,000 a year for the war effort. Let us have a wide vision. Let us go forth, as one people with a united aim, to win victory for the cause of freedom and justice and the blessings of everlasting peace.







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