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Thursday, 28 May 1942

Mr HARRISON (WENTWORTH, NEW SOUTH WALES) - The text could be preached with equal advantage to other

State parliaments. The regimentation of all the people of the Commonwealth u needed for the fighting forces and for essential production. The fighting forces should have the first call on the financial resources of the country.

The language of some of my honorable colleagues from Victoria and South Australia was more extravagantly picturesque than logical. They claimed that New South Wales would receive unfair advantages under uniform taxation. The Victorians drew attention to the fact that individuals in New South Wales would contribute less income tax than individuals in Victoria. My rejoinder is that, as a State, New South Wales contributes much more than does Victoria or any other State to She revenue of the Commonwealth. The discrepancy between individual contributions is so slight as to be of little moment. Moreover, the revenues of Victoria and South Australia are more buoyant than ever before, solely because of the money which the Commonwealth Government has expended in concentrating war industries in those two States. The money required to build the huge munitions factories operating in South Australia has been collected, not from the people of South Australia alone, but from the people of Australia as a whole, and the bulk of the Australian people live in New South Wales and the other eastern States, which are the richest States of all. When I visited South Australia to investigate its resources of man-power, I found that the- war industries there still required 20,000 males who were not registered in the State-

Mr ARCHIE Cameron - The honorable gentleman is suggesting that his colleagues from South Australia established war industries in that State solely for the benefit of that State.

Mr HARRISON - The honorable member cannot put those words into my mouth. The argument advanced is that the industries were established in South Australia for strategical reasons. The honorable member cannot have it both ways. If the eastern States are to become the front line in the defence of Australia and to resist invasion, and South Australia is to have the production of munitions, the eastern

States should have consideration in the raising of revenues. The honorable member for Boothby (Dr. Price), in his attack on those who cannot see eye to eye with him, used the language of the radio script - the language we used to hear from Mr. F. E. Baume and the ""Watchman", and, I have no doubt, listeners in South Australia hear from the honorable gentleman himself. The honorable gentleman may hold his radio audiences spellbound, but his extravagances failed to impress honorable members. The honorable member has no right whatever to take the stand he adopted. There is no need for me to tell him that the State which he represents has been maintained .by the Commonwealth with revenues subscribed by the people in the eastern States. South Australia is now in the position of a spoon-fed boy who, seeing the spoon being taken from him, cries bitterly. This legislation has been attacked not so much because it provides a uniform income tax system 'but because its critics fear that it is the first step towards unification. The States which those critics represent cannot be persuaded to adopt an Australian outlook favorable to unification. They think that, if they can effectively oppose this bill, they will be able to stave off for a little while longer the inevitable unification of Australia.

Mr Menzies - Does the honorable member recall the last referendum on an increase of Commonwealth powers in which New South Wales defeated the marketing proposals by 440,000 votes ?

Mr HARRISON - Possibly that did occur, but if the people of New South Wales were asked the simple question whether they favoured unification, they would say " Yes " by a handsome majority. The people of New South Wales want the whole thing, not half measures.

I agree that this legislation is not perfect, but, instead of opposing it, honorable members should make suggestions designed to improve it. It will be necessary to make some improvements. The comparative tables show small increases on the existing average of Commonwealth and State income taxes. Actually, however, there is a substantial difference owing to the disallowance of the deduc tion of State taxes paid. A man with an income from personal exertion of £800 a year is now taxed £179 10s. by the Commonwealth and the State. Under the proposed uniform tax his assessment will be £179 8s. If the State tax paid were deducted, his assessment would be £162. I think that some more equitable adjustment should be made in that case. In the case of incomes below £400 a year, the proposed rates of tax are in the main less than the present Commonwealth and State taxes combined. As has already been pointed out by other honorable members, earners of less than £400 a year are to be relieved of about £750,000 of tax, imposed upon their total incomes. If the need of the Government for revenue is so great as we all have reason to believe it is, the Government is not warranted in reducing the amount of taxes paid by people earning less than £400 a year. The Government will find it impossible to convince honorable members that, whereas it is necessary to increase the taxes paid by people in the higher groups of income, it is either necessary or equitable to reduce the taxes paid by people in the lower groups. A slight increase of the rates of income tax levied on lower ranges of income would return more to the Government than a big increase on the higher ranges. It will be generally conceded that claims of simplicity are not realized in the schedules of the Income Tax Bill. The schedules are so complicated that the Taxation Department will experience trouble in assessing various individual incomes. The Treasurer, I know, agrees that a taxpayer should know his liability. In the past the Taxation Department has endeavoured to make that knowledge possible by issuing a ready reckoner, reference to which enabled people in various income groups to know their liabilities. Under the schedule contained in the Income Tax Bill, however, a ready reckoner would have to be issued for each individual taxpayer. Unless people engage the services of taxation experts, they will always be at the disadvantage of not knowing whether or not their assessments are excessive. I call the attention of the Treasurer to the- chaos which resulted in New South Wales last year when the income tax "was assessed on the rateable incomes. Inquiries will reveal that income tax assessments in New South Wales are so far behind that many people will not receive them for a long time. I ask the Treasurer to consider carefully the suggestions I have just made. A number of other suggestions will be in ads when the bill is in the committee stage. As he is aware, a royal commission inquired into and reported upon the simplification of our taxation systems. That commission cost thousands of pounds, and, apparently, that money has been wasted. The Treasurer could very well have taken advantage of that report in preparing this proposal. In dealing with legislation of this kind which is entirely new, and, I hope, will remain permanently on the statute-book, we should start off with a system sufficiently simple to enable the average taxpayer to calculate his tax. I have indicated how I propose to vote on this measure. This proposal is inseparable from the requirements devolving upon us in the prosecution of our war effort. If we desire to develop to full nationhood, and to protect those things which, as a nation, we prize so much, we must accept the responsibilities of nationhood, and no longer permit the States to interfere with the natural and essential development of this country.

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