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Tuesday, 30 July 1946

Mr WHITE (Balaclava) .- The committee discussed on Friday the must vaunted tax reductions proposed by the Treasurer (Mr. Chifley), whose exact words in relation to them I quote -

The new combined rates of income tax and social services contribution represent an overall reduction of 22 per cent, from the peak, war-time rates first enacted in 1943. On that basis the reductions range from more than 47 per cent, on the lowest incomes to something under 20 per cent, on incomes exceeding £1,500.

That statement is grossly misleading. The heavily mulct taxpayer is being led to believe that the Government is more or less reverting to the taxation imposed in pre-war years. Nothing of the kind is proposed. The Government, being a taxing machine, has to obtain the revenues it requires to enable it' to function. But there is a wide' margin between the taxation that is needed for peace-time purposes, and that which is required for purposes of war. The stage has been reached when a substantial reduction of- taxes should be made. The maintenance of high rates is extremely unjust to every taxpayer ; and unjust taxation of any sort is tyrannical. The rates imposed to-day are so high as to be the principal cause of the industrial problems with which we are confronted. We frequently inveigh in this Parliament against the number- of strikes that occur. It is well known that- industry in Victoria is seriously curtailed by strikes in New South Wales. Large numbers of men are being dismissed from many industries because of insufficiency of coal supplies. Honorable members on both sides of the committee will- concede that the working man has lost the incentive to produce to his maximum capacity, because of heavy taxation. That applies not only to the working man, but also to the professional man, who realizes that the extra income he receives if he works a little harder or longer hours, places him in a higher tax group and causes him to contribute more to the Treasury. Being only human, he decides not to expend his energies for the sole benefit of the Treasurer. A shibboleth among working men to-day is, " We will not work- extra time for Chif.", by which they mean that they will not increase their incomes because only the Treasurer will derive the benefit. The men in employment will be exasperated when they discover that they have been misled by being induced to believe that their taxes are to be considerably . reduced. A year ago, I placed before the Treasurer the proposition that earnings from overtime should be taxed at a rate different from that imposed on normal earnings; but it was rejected. There is now an agitation for a higher basic wage, and the matter is being discussed by the proper authorities. The parasites in industry - Communists and the like - prey upon the fears of the working man, and try to make him believe that he is underpaid, when the truth is that a substantial proportion of his earnings is being taken from him by the Government, which with great unction pretends to be his friend. The Treasurer has claimed that the cost to the Government of the proposed reductions will be £17,500,000. That is not true, because, the Government will merely forgo a part of the surplus revenue itwill receive this- year, due to the greater number of persons engaged in production. Proof of that is to be found in the increase of the revenue last year despite the tax reductions that were then made. The taxation per capita was approximately £6 a head prior to the war, whereas to-day it is £30 a head. The war having ended, the Government should curb its desire to launch into socialistic enterprises involving an expenditure of millions of pounds, such as nationalized air services, the aluminium industry and the building of palatial edifices which could well be postponed at a time when the housing of the people should be the main objective. The money of the taxpayers is being poured out like water on such ventures, with the result that the proposed tax reductions are not so great as they ought to be. There should be a return to the pre-war level of taxation as early as possible. High taxation not only penalizes the worker but also restricts business enterprises.

Mr Bryson - The honorable member is thinking of the man with the big income.

Mr WHITE - I am thinking of the men who have small incomes, and of the ex-serviceman who is trying to establish himself in business under great difficulties, including heavy taxes. When the ex-serviceman- enlisted six years ago, the level of taxation was considerably lower than it is to-day. He is now being penalized by higher rents, increased costs of goods, and heavier taxes. The Government professes to aim at conserving the welfare of the men on the lower incomes, but instead of doing so it is punishing them the more grievously, because the' man who has a very big income can look after himself. High taxation causes goods to become scarce, and this leads to a banking-up ' of savings, which encourages black marketing. That is an obvious corollary. If the people cannot obtain goods readily and regularly, the black marketeer flourishes. By -reducing taxes" to the minimum, the Government would give a great stimulus to industry, and help to regain our export trade, a portion of which was renounced when classconscious Communists in Sydney decided that exports to Java, which previously was an important customer of Australia, should be prohibited. I shall examine some of the figures, with a view to proving that the Government is giving back to the" people only a little of the extra revenue it has received. The Treasurer more or less fills the role of the cashier in a circus, because he rakes in money "from every individual with very little effort; but he differs from that person inasmuch as he spends it prodigally. Here, summarized, are the results of his much advertised tax reductions: A bachelor n to have his tax of £5 15s. 5d. .reduced by 2s. 4d. a week; and a man and his wife will have restored to them 9d. a week each - which will buy a lot for them !

The CHAIRMAN (Mr. Riordan).The honorable member's time has expired.

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