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Thursday, 28 May 1942

Mr McEWEN (Indi) (4:10 AM)

I listened with interest to the speech of the Prime Minister (Mr. Curtin), in reply to the clear, comprehensive criticisms of this proposal by the Leader of the Opposition (Mr. Fadden), because I thought that -we could expect from the head of the Government the best argument which could be used in defence of this legislation. In common with all who listened to the Prime Minister, I was disappointed. He made a very interesting speech, in respect of a great deal of which many could find themselves in agreement, but it was notable for the fact that it was not directed to the legislation now before honorable members. The right honorable gentleman regaled the House with a dissertation upon the virtues of a system of uniform taxation and of the regulation of legislation and administration in the federal system. The points he made are points with which few, if any, honorable members would disagree. Unfortunately, the Prime Minister, one of the ablest debaters in this Parliament, completely evaded the issues raised by the Leader of the Opposition. 1 find myself on no new ground in saying that I entirely agree that there should be a re-alinemcnt of the constitutional authorities of this country - the Commonwealth Government and the State governments. I have always held the view, and often expressed it here, that the States should be subordinate to the Commonwealth and that they should legislate and administer in respect of matters delegated to them by this Parliament. That, of course, would require that the States be empowered to levy taxes for the carrying out of the specifically delegated functions, or that this Parliament should make such subventions as were necessary to enable those functions to be carried out. It was on those lines that the Prime Minister poke, but that has nothing to do with this legislation. This legislation bears the label " uniform tax," but it bears the scantiest resemblance to a uniform tax. Holding the views which I have just expressed, if I were unable to secure those great reforms, I should support any substantial step towards establishing the greater authority of this Parliament, provided such a step did not involve the perpetration of gross inequities. It is from that aspect that I have examined this measure. First, this measure is but an insignificant step towards establishing the greater authority of this Parliament vis-a-vis the States; and it embodies intolerable inequities. It is proposed to compensate the States for the surrender of their right to levy income tax by giving them some subventions. Whilst those subventions are to be voted by this Parliament, no attempt whatever is to be made to regulate the expenditure of that money by the States. Thus, the States will have no responsibility for raising the revenues which they will expend. That is a cardinal objection to this proposal. Secondly, it is claimed that this measure will establish uniformity of taxation; but no attempt is made to ensure that such uniformity is accompanied by equal entitlement to benefits by the citizens of the Commonwealth as a whole That is inequitable. It is proposed to give to States, which have built up certain standards of public and social services, a subvention which will enable them to maintain those services at their existing levels. At the same time, the taxpayers in those States will enjoy a reduction of taxes. That in itself would not be cause for criticism, were it not for the fact that the subventions to be paid to other States will oblige those States to peg their public and social services at lower levels, and, at the same time, the taxpayers in those States will be obliged to pay higher rates of taxes. That is the case in respect of Victoria, for instance. That is an intolerable proposal. The amount of money that will be paid by way of compensation to Victoria will not enable that State to proride public and social services of as high a standard as those provided in other

States. For instance, a system of pensions for coal-miners operates in New South Wales.

Mr Chifley - For which the miners themselves help to pay.

Mr McEWEN - Yes ; but such payments are aided by a subvention from the State Government. That social service may be small, perhaps, but it is of considerable importance in New South Wales. Coal-mining does not exist in Victoria; and the pegged subvention which Victoria is to receive will not enable that State to introduce such a scheme. In Queensland, public hospital* are substantially aided from the State consolidated revenue, whereas in Victoria such institutions are substantially maintained by public contributions. Those States in which public hospitals are substantially maintained from State consolidated revenue will receive from the Commonwealth sufficient to enable them to continue their present system, and the taxpayers in those States will enjoy a reduction of taxes, whereas Victoria, for instance, will not be enabled, out of the compensation it is to receive, to establish a similar system, although, at the same time, the taxpayers of Victoria will be obliged to pay higher taxes. In Tasmania, public health services in country districts are substantially nationalized, being financed from State consolidated revenue. Such services will be financed from the subvention made by the Commonwealth to Tasmania. In Victoria, the public health services in country districts are not nationalized to any degree whatever; but it will not be possible for that State to implement legislation similar to Tasmania's legislation in this respect, because it will not have the necessary funds to do so. At the same time, taxpayers in Victoria will be obliged to pay higher taxes. Many other instances of this kind could be cited. However, I do not propose to labour the point at this early hour of the morning. The injustices I have described constitute charges against the propriety of these proposals. If time permitted, I should like to advance further arguments against them. However, my leader has spoken substantially along the lines I should like to follow; and the honorable member for Fawkner (Mr. Holt) and the honorable member for Deakin (Mr. Hutchinson) have pointed out in very strong terms the inequities of this proposal. The Prime Minister, when replying to the Leader of the Opposition (Mr. Fadden), said that this measure was introduced for the purpose, in part, of mobilizing the man-power and financial resources of the Commonwealth. No one can offer criticism against that objective. Normally, it would be sufficient to compel every honorable member to support the measure; but we find that this proposal bristles with inequities. It will give to a vast number of taxpayers a reduction of tax, and to a considerable number complete remission of their taxes. Thus it is a travesty to describe the proposal as a step towards the greater mobilization of the man-power and financial resources of the country for the conduct of the war. Instead of making for a greater measure of order and equity, it will cause chaos. The proposal cannot justly be described as a proposal for uniform taxation. It is nothing more than a gullible version of Labour's policy, and will bring about confusion and division in the ranks of our people at a time when complete unity is essential.

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