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Thursday, 28 May 1942

Mr CHIFLEY (Macquarie) (Treasurer) (4:33 AM) . - in reply. - I assure honorable members that the Commonwealth obtained very reliable legal advice in regard to the constitutionality of this measure, and the other bills associated with it. This measure has been framed largely in accordance with advice tendered by eminent legal authorities who have expressed the opinion that it is entirely constitutional. I, personally, although only a layman, did not doubt the capacity of the Commonwealth to impose whatever taxes it desired to impose.

Certain suggestions have been made in regard to the special committee on taxation, but I am sure that no honorable member doubts the integrity and the ability of the right honorable member for Yarra (Mr. Scullin). Also, I am confident that honorable members on both sides of the chamber, regardless of differing opinions, appreciate the technical ability of the honorable member for Robertson (Mr. Spooner) to deal with the more complex phases of taxation. Professor Mills, of course, occupies an eminent position in the public life of this country, and I remind honorable members opposite that he was selected by a government which they supported as a member of the Royal Commission on the Monetary and Banking Systems. It seems, therefore, that honorable members opposite appreciate the ability of Pro.fessor Mills to deal with questions of a national character such as this.

I was amazed at the parochial outlook displayed by some honorable members in the course of this debate. I was surprised to hear the honorable member for Barker (Mr. Archie Cameron) vigorously working the handle of the parish pump, because, whatever differences of opinion there may be between the Government and the honorable member on political questions, I have always given him credit for taking a broad national outlook on important questions affecting the Commonwealth.

The fundamental reason for this legislation is that, as the Commonwealth has been responsible for the creation of the present great buoyancy in revenues and incomes, and the greatly increased taxable capacity of the people of Australia, the Commonwealth should reap the benefit, in order to prosecute the war. 1 need not add any figures to those which have already been given by the Leader of the Opposition (Mr. Fadden), showing conclusively that the States are receiving greatly increased revenue in the income tax field, apart altogether from other benefits derived from services supplied by the Commonwealth or performed by the States on behalf of the Commonwealth. This Government realized, as did the previous Government, that there was a greatly increased amount of money in circulation, and that without exerting any effort at all, individuals and organizations were making private gains as a result of increased Commonwealth expenditure. The States found themselves in the position of receiving easy money, and there was no evidence of an endeavour on their part to curb expenditure. In fact, the States have always been willing to hold out their hands for loan moneys, despite the ever-increasing expenditure required for the defence of this country. When I referred to mendicant States I intended merely to remind the House that when the States were informed of the possibility that, owing to Commonwealth needs, money could not be raised for State purposes, they were very glad to accept loan moneys advanced by the Commonwealth Government. My own impression is that the States are always very glad to obtain money, whether it be handed to them in the form of grants, or extracted from the people in the form of taxes. However, these matters, as well as the conservation of man-power and the saving of expenditure on the collection of taxes, although important, are incidental to the main object of this measure. In addition, a uniform tax scheme will reduce the complexities which confront the public in compiling income tax returns. On that ground alone, I am sure that the Australian public will welcome a measure such as this. Despite the criticism that has ; been voiced by various honorable members, the Government has gone on with this measure, not only because it believes it to be necessary in the interests of the war effort, but also because it believes that the overwhelming mass of the people of this country support a reform such as this.

Question put -

That the bill be now read a second time.

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