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Thursday, 28 May 1942

Mr JOLLY (Lilley) (5:55 AM) . I am very surprised that the Government is not prepared to accept the amendment. Certain circumstances may arise in which it may become necessary to review the amounts which it is now proposed to pay to the States. For instance, the State governments still have power to levy taxes other than income tax. In doing so they may very well reduce the sources of revenue available to the Commonwealth Government. The State governments may desire to increase their rates of land tax, which is a deduction from Commonwealth tax under the Government's present proposals. Stamp duty, as a charge against a business, is also a deduction from Commonwealth tax. Should the State governments increase stamp duty, they will thereby decrease the revenue available to the Commonwealth. The liquor tax also comes within this category. Tie Government would be well advised to have the power set out in the proposed new clause moved by the Leader of the Opposition (Mr. Fadden). After all, it will be used only for very good reasons.

The argument is unanswerable that 'the State governments can still increase other taxes which, in the final analysis, will affect Commonwealth revenue.

Question put -

That the clause proposed to be inserted be so inserted. (Mr. Fadden's amendment.)

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