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Thursday, 28 May 1942


Mr HARRISON (Wentworth) . - Earlier this morning, in an atmosphere such as we are in at the moment, I stated clearly, amidst a roar of interjections, my views regarding uniform income taxation. I said that I preferred uniform taxation to a system of post-war credits, because I considered that it would have a much fairer incidence. I also made it clear to honorable members that I considered post-war credits' to be the next best thing to uniform taxation. That was the reason why I supported the post-war credits- scheme which was introduced by the Leader of the Opposition (Mr. Fadden) when he was Treasurer, although I realized that it would have created disabilities as between State and State. On this occasion, I see no reason why a scheme of post-war credits should not be superimposed upon the uniform income taxation system. We are rapidly approaching the time when we cannot expect to obtain much more revenue from the higher ranges of incomes. As a matter of fact, even to-day, Commonwealth and State taxes assessed on some incomes amount to more than 20s. in the £1. That should not obtain, and it would not obtain if the States had agreed to pass certain legislation. The time is not far distant when this Government, notwithstanding what its supporters may say in opposition to post-war credits, will be forced to draw upon the lower ranges of incomes. There can be no escape from that. The law of diminishing returns will force it to do so, if it intends to engage in a total war effort, or even to maintain the present rate of expenditure. Honorable members supporting the Government will then have to decide whether they will take the money from the lower income earners by means of direct taxation or whether they will borrow it and create a form of deferred pay for them. I join issue with the honorable member for Bass (Mr. Barnard), who tried to convince us that the people who enjoy the lower incomes do not engage in wasteful expenditure. There is wasteful expenditure throughout the whole range of incomes.


Mr Calwell - Cite instances.


Mr HARRISON - I shall not endeavour to give instances, but I refer the honorable member to the great wartime increases that have occurred in the lower incomes. Those people were not on the bread-line prior to the war. They were not emaciated; they did not fail to enjoy the good things of life. One need only consider the ways in which they spent their money on amusements to realize that. They had no commitments then; and a person without commitments obviously can live on a smaller income than a person with commitments. However, when we refer to wasteful expenditure, we do not direct our remarks exclusively at the lower wage and salary earners. There is wasteful expenditure in the higher income groups, in spite of the heavy tax burden imposed upon them. Persons enjoying the higher ranges of income have not adjusted themselves to the new war-time impositions, and, naturally, they are still trying to liquidate the commitments that they have entered into. Therefore, in time of war wasteful expenditure must occur in all ranges of income within the taxable field. There should be,, and I believe that there will be, some interference with the lower ranges of income, and the Government will be forced to decide between direct taxation and post-war credits. This war is being fought for us by our forces in the field and by an industrial army. What is done in connexion with our soldiers? A certain amount of their pay is deferred. Any honorable member who fought in the war of 1914-18 will appreciate the benefit of deferred pay to a soldier when he is repatriated into civilian life. Why should that principle not apply to the industrial army? Why should the munitions workers and other war workers be permitted to take money from the general pool in ever-increasing quantities without being forced to save some of it ? These men will ultimately be re-transferred from war work into civil industries. I nm afraid that, if a Labour government is still in power when peace returns to us, we shall suffer a period of depression during which the workers who will be displaced from war industries will not be able to secure employment. I hope that this will not occur, but we must be prepared for it. What does the Govern ment propose to do by way of preparation ? Does it want to perpetuate the dole which has been a blot on the pages of Australian history? An alternative course is open to it. Instead of taking money from the lower income groups by means of taxation, it can borrow from them and establish a form of deferred pay for them. The same thing can be done iri connexion with industry. Many industries have been forced to curtail their activities and expenditure because of wartime conditions, and they would be happier if they knew that they had a nestegg in the form of post-war credits which they could use for development when peace returned. A post-war credit scheme would have a twofold effect. It would help industry and provide it with an incentive to expand,, and it would provide a means of absorbing displaced workers into peace-time employment. There could be no happier circumstance than the existence of industries with reserve funds that would enable them to expand and employ greater numbers of the men who must be transferred from the fighting services and war industries, and who also would have reserves to tide' them over the period of change. The Government will be forced to face this problem in the near future. It would be wise to accept a direction from the Opposition now, because it will be forced by circumstances to do so ultimately. Supporters of the Government, who now oppose this proposal, will be forced to eat their words, because the Government must, in the near future, draw upon the lower ranges of income for its war needs. 1 cannot imagine it taking the money by means of direct taxation when it has the opportunity to borrow, and eventually return the money. I envisage a post-war credits scheme superimposed upon the system of uniform taxation which, will bear equally upon individuals and States. I commend to the Government the proposals of the Leader of the Opposition.







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