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Wednesday, 10 April 1946


Mr WHITE (Balaclava) . - I ask the Government to make acomplete review of the sales tax schedules. I am glad that a move has been made to reduce the rates of tax and to increase exemptions, but a great deal more must be done in this direction. It is fallacious to assume that the reduction of the. rate of tax and the granting of additional exemptions will necessarily reduce the total revenue of the Government. In fact, the reverse has always proved to be true. Larger turnovers follow lower taxes, for people engaged in small businesses are encouraged' to extend their operations when taxes are reduced. The sales tax was introduced as an emergency measure during the regime of the Scullin Government. An officer was brought to Australia from Canada to introduce the system. The first schedules were full of anomalies. Some of these were removed in thecourse of time, but it cannot be deniedthatthesales tax has had, and still has an irritating and harrassing effecton business people. During the war the rate of tax were increased to punitive proportions, with the object of diverting money from expenditure on luxuriesso investment in war loansand forwar purposes. Thistaxis described in Great Britain as a purchase tax andit has reached the dizzy heights of 100percentonsomeitems. We havenotgotto that stage, but we have reached the stage where the economic principle of diminishing returnshas begun to operate and that is bad for industry. If sales tax were completely removed from all foodstuffs, all buildingmaterials, and all goods required for primary production, it would be excellentforAustralia. I am glad that the Government is moving in this direc- tion,butitshould move more rapidly. We allknow that the cost of labour and materialsforbuilding has increased tre- mendously. Recently we passed a bill to provide largergrants to ex-service men andwomenwho desire to purchase homes through the War ServiceHomes Commission.Undoubtedly, building costs have increased because of the Government's taxation policy. Sales tax must always be paid by the customers,because merchantsmerely add the tax to their invoices. In these circumstances people who are buying homes on long term mortgage are at a heavy disadvantage. They rimy make repayments for many years and even then find that they have little or no equity in the properties. For that reason, I submit that all building materials should be exempt from sales tax. The honorable member for Fawkner (Mr. Holt) referred to the many thousands of ex-service men and- women who desire to buy homes and will be required to pay inflated prices partly because of the Government's taxation policy. It is regrettable that tools of trade and many other necessary items of equipment for ex-servicemen should still be liable to sales tax. The Government has abounding revenues, and has embarked 'on a project to spend £9,000,000 on 61 Lincoln bombers which will never be required for use in war; nor were any used in war. If it 'would remit £9,000,000 in sales tax on essential goods it would do a great deal to encourage the revival of industry. It is ridiculous that sales tax should ever have been imposed on ships. Braille watches and explosives should never have been subject to this tax. I am glad that school and university requirements areto be exempt, but I cannot understand why card-tables, puzzle games and the like should be on the exempt list while refrigerators, carpets and furniture for the home are still subject to tax.

The right honorable member for Cowper stressed the necessity to lift the sales tax from motor vehicles. I support his remarks. It is still commonly supposed by many people that motor vehicles are a luxury. That is not the case. Many men and women who arcreturning to civil life from the Navy, the Army and the Air Force, particularly young medical men, desire to acquire a motor car but they cannot afford the extortionate prices that prevail.


Mr Lazzarini - Sales tax is not imposed on. second-hand goods.


Mr WHITE - That is true, but the price of new vehicles influences the price of second-hand cars and lorries. Two or three makes of British motor vehicles are now coming on the market; but even 12 horse-power cars cost up to £600. The sales tax of 32£ per cent, on chassis is partly responsible for these high prices. Components for these vehicles are manufactured in Australia, it is true, but even some of these are taxable. Ford and Chevrolet cars are to-day priced as high as superior quality vehicles. Britain is now reviving its trade, and the bulk of its manufactures are being exported. Some motor chassis are coming to Australia. Doctors and businessmen who must have motor cars should not bc penalized because they were in the services and did not have the opportunity to purchase them, as did other men who stayed at home. They should be given special consideration. It would not be beyond the competence of the Parliamentary draftsmen to draft an item which would free from sales tax motor cars purchased by men in categories approved by the Government. That applies also' to motor trucks. Does the Minister know that pre-war there were more truck drivers in Australia, than there were employees on all the railways in the Commonwealth? Thousands of trucks that were taken over by the defence authorities have not yet been returned to their former owners. They are needed by persons 'engaged in the transport business, farmers, and many others. Now that the war is over, the need for this punitive tax no longer exists. The Government has as much revenue as it can handle, and the time for revision of the tax has arrived. It presents a profitable field for investigation by the Treasurer. I hope that the present reductions and exemptions are merely a beginning. An exten:sion of the principle would encourage many people to go into business, our economy would be improved and expanded, and the national revenue would not fall appreciably. I know that departmental officers are in contact with the business world. The Minister might call a conference of representatives of the Associated Chambers of Commerce. and Chambers of Manufactures, and the Repatriation Department - which disburses money to many ex-servicemen who find difficulty in obtaining their requirements - in order to ascertain from what items the tax should be removed. I trust that a more comprehensive list will be introduced before long.







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