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Thursday, 28 May 1942

Dr PRICE (BOOTHBY, SOUTH AUSTRALIA) because the Fadden Government had the courage to deal with a problem which this Government will not face - the taxation of that part of the national income which holds the bulk of the people's spending power. The present Leader of the Opposition (Mr. Fadden) explained, in October, 1941, when he was Prime Minister and Treasurer, that incomes under £400 a year represented £560,000,000 of the national income, an increase of £70,000,000 over the amount that those people had been earning at the outbreak of war. It is difficult to obtain accurate figures at the present time, but obviously that section of the national income has increased immensely as the result of the munitions programme and the intense inflationary policy of this Government. The increase probably represents the greater part of the general increase from £900,000,000 to £1,100,000,000. In war-time it is essential to reduce the spending power of the consumers. Nevertheless, in spite of this vital necessity, the Government proposes to reduce the burden of taxation on 70 per cent, of the taxpayers, who are, in the main, paying their taxes cheerfully as a war-time obligation. The horrifying - I could almost say cowardly - thing that the Government is doing is that it is even reducing taxation on single persons without dependants. According to' the figures that we have been given, such persons earning £150 a year will be required to pay nothing, although in South Australia they have been paying £5 8s. a year, in Western Australia £7 3s. a year, and in Tasmania £3 8s. a year. Proportionate reductions will be granted to those who are earning £200 a year. Instead of maintaining taxation the Government is muddling about with price control and rationing, and confusion is increasing. Unless rationing is really necessary, owing to a shortage of goods, properly graduated taxation with appropriate exemptions would be infinitely preferable to it. Great Britain, Canada and New Zealand have recognized this, and are taking the honest course in dealing with the problem. Unfortunately, I am unable to cite detailed figures of what Great Britain has termed its " austerity budget ". It is a severe budget, but the people are complaining that, if anything, it is not severe enough. Even prior to its introduction single persons in Great Britain were paying £6 5s. a year on incomes of £150. Australians on that income were paying nothing. Single men in Great Britain earning £200 a year were paying £16 13s. 4d., and Australians on the same range were paying £7 9s. The Fadden plan in relation to companies was to take 20 per cent of their undistributed profits as a loan to be repaid after the war, except when such funds were required for wartime expansion. The idea was excellent in theory, and it would have been excellent in practice. The late, and possibly unlamented, Joint Committee on Profits was requested to urge the Government to adopt that plan. Somebody complained a few minutes ago that our parliamentary committees are not being consulted by the Government. That is one reason why the Joint Committee on Profits has gone into temporary suspension. One of its suggestions was that a portion of the undistributed profits of companies should be borrowed and put aside to provide either against a post-war slump or for the expansion that we hope will occur after the war. The companies are desperately afraid that there will be a period after the war when prices will fall more rapidly than the Prices Commissioner, Professor Copland, will be able to control them, and they want the Government to adopt the course of action which I recommend. Many funny things have happened in this chamber in the last few days. Honorable members from New South Wales on this side of the chamber have found that £1,300,000 has been tucked away for that State. Somebody has dug up £77,000 for Tasmania. We have also discovered honorable members who move in three dimensions, so to speak. They think one way, speak another, and vote a third. So many funny things have happened that I have investigated the rates of tax on company shareholders proposed by the Government. I speak now on behalf of people whom I have defended on many occasions the poor shareholders, whose only income is from their investments in company shares. I make it clear that I speak not for the large shareholders, but for the retired menand women whose life savings are invested in companies like the Adelaide Electric Supply Company Limited, which has from 16,000 to 17,000 shareholders, most of whom are small investors. The Government ought to have some regard for that thrifty section of the community; but, knowing what has happened in the past, I suspected that these people would be kicked again if it were possible to do so. On looking at the published figures, honorable members will see that the Government claims that taxation on property income in South Australia will be reduced. The existing tax on property income amounting to £400 a year is £36. This is to be reduced to £71. The tax on £500 is £120, and it is to be reduced to £106. On £600 itis £157, and it is to be reduced to £142. That does not give a true picture. If we take one special class of the people whose income is derived from property those who are small shareholders and who have no other income we see a totally different picture. In South Australia, the old tax on dividend incomes of £400 a year was £60, consisting of £33 6s. 8d. Federal tax, £7 17s. 2d. State tax, and £18 6s. war tax. In the new schedule the figure has been raised to £71 6s. On a dividend income of £500, the tax has been raised from £87 to £106, and on a dividend income of £600 it has been raised from £118 to £142. I do not believe that these figures have been put before honorable members previously. For the reasons I have given I urge that during the period that will elapse before the budget session, the Government should reconsider its policy in this regard. The British system of rebates and company taxation in relation to small shareholders has a great deal to recommend it, and I suggest that it be considered. If the Government is not prepared to give an exemption to small shareholders with an income up to the basic wage, say, up to £200, I at least ask that it allow them to retain an amount equivalent to that received by invalid and old-age pensioners. It has been said that the application of this policy would make too much work for the officers of the Taxation Department, but as it appears that many officers in the taxation departments of the States may

Dr. out of work after the new Commonwealth plan is put into operation, I suggest that a few of them could be detailed to do any clerical work necessary to give effect to my suggestions. My plea is made in the interests, first, of the small shareholders, and, secondly, of the country in general.

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