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Thursday, 28 May 1942

Mr CLARK (Darling) .- 1 oppose the amendment moved by the Leader of the Opposition (Mr. Fadden). His objective is to reduce the spending power of the people in order to transfer labour and material from non-essential to essential industries as a contribution to the war effort. I consider that that objective can be better attained by the Government transferring man-power and material from non-essential to essential industries when and where they are required. The proposal for compulsory war-time savings proposed by the Fadden Ministry was unjust in its application. I have examined the schedules furnished by the present Leader of the Opposition (Mr. Fadden), who was the Treasurer when he submitted to Parliament the national contribution proposal of his Government, and I shall quote several examples of the unfair distribution of the burden on different incomes. On a personal exertion income of £150, the national loan contribution was £11.1; on an income of £200, £16.8; on an income of £1,000, £42.2; and only £6.8 on an income of £2,000. Therefore, the national loan contribution would have been very heavy on the low incomes and very light on high incomes.

Mr HARRISON (WENTWORTH, NEW SOUTH WALES) - You are ignoring the fact that' the higher incomes are already heavily taxed.

Mr CLARK - My figures show that the national loan contribution would have been heavier in the case of property incomes. On a property income of £150, the increase would have been £11.1; on £200, £16.2; and on £250, £18.3. On an income of £1,000 the total amount paid in tax, including the national loan contribution, would have been £13.2 less than on the then existing scale, and on an income of £2,000 it would have been £119 less, and on an income of £3,000, £155 less. That proposal was unjust because it sought to place an increased burden on low incomes and reduced substantially the tax on high incomes. The then Treasurer stated in his budget speech delivered on the 25th September, 1941, that the national loan contribution would yield £32,000,000 for 1.941-42. The policy of the Labour Government of compelling by regulation the trading banks to deposit their surplus balances with the Commonwealth Bank has made available to the present Government a sum of £37,500,000. Therefore, the Labour Ministry's policy has been more productive than the .Fadden Government's national contribution scheme would have been. The present Government should go further by preventing the hoarding of money. Regulations should be formulated prohibiting hoarding, and providing that all surplus funds in the hands of the people must be paid to the trading banks. This money would then be transferred automatically under the present arrangements to the Commonwealth Bank, and money could then be made available to the Commonwealth Government. The statement was made during the budget debate last year that a similar policy had been adopted in Germany long before the present war, and by that means a great war machine was built up by a country which was regarded in many quarters as bankrupt. It is illegal in Germany to hoard money, and surplus money in the hands of the people must be paid into the banks. I believe that that is a better method to adopt than the compulsory taking of savings from the people. As I pointed out, the schedule of national loan contributions proposed by the present Leader of the Opposition (Mr. Fadden) when he was Treasurer provided for considerable increases of the tax paid by persons on low incomes. The contributions started with incomes of £150 a year, and when the income exceeded £2,000 per year the total amount of tax paid was reduced. It was most unjust to propose a large levy on low incomes and reduce the contribution to taxation revenue by those on high incomes. I consider that any proposal to tax low incomes is unjust. Persons earning low incomes experience much difficulty in ob taining the necessaries of life, and now the rising costs of commodities leave them with very little to contribute to the taxgatherer.

Sitting suspended from 12.45 to 2.15 p.m.

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