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Tuesday, 30 July 1946

Mr BARNARD (Bass) .- The committee is asked to adopt a schedule devised for the purpose of relieving taxpayers of a portion of the heavy burden of income tax which they. carried during the war period. The implication of the amendment proposed by the Leader of the Australian Country party (Mr. Fadden) is that he does not desire income tax rates to be reduced immediately. If the schedule were postponed, as requested by him, the present rates would operate, and relief would not be afforded until some future time. The right honorable gentleman states that the schedule is defective, and that the scale of reductions is slovenly. The benefit proposed for single men is, .in his opinion, too great as compared with married men. He gave instances of what he regarded as an inequitable distribution of the tax burden under the proposed scale. Of course, a completely equitable system of taxation, whether relating to either direct or indirect taxes, has never yet been devised. The higher the amount of tax to be collected in order to meet the commitments of the Government, the greater are the number of defects and the more glaring are the anomalies. The reduction now proposed does not go so far as we should like. Although the income tax has been burdensome during the war, it does not appear to have seriously affected the prosperity of the majority of the people. Figures presented on Friday by the honorable member for Fremantle (Mr. Beazley) indicated a considerable increase of deposits in savings banks, which clearly shows general prosperity in the community. Side by side with that fact is the satisfactory position with regard to employment. Therefore, the heavy income tax has not restricted "employment, nor has it reduced the savings bank accounts of the people.

The Leader of the Australian Country party stated that a single man in receipt of an income of £500 a year will pay 7:3. 6d. a week tax less ; a married1 man Gs. a week less; if he has one child 4s. lid. a week less; and if two chil dren, 4s. 5d. a week less. The right honorable gentleman described the table of reductions as slovenly and unjust, implying that a single man has received preference in the drawing up of this scale. But the present Government has increased the amount of child endowment payable to a married man with a wife and two children, and that to some degree offsets the burdensome nature of the income tax. A married man in receipt of £150 a year will, under this proposal, pay no income tax, although previously he paid £3 9s. a year. I am making a comparison between the position in 1943 and that under the scale now introduced. A man with a wife and three children, and in receipt of £250 a year, will not pay any tax. A man with a wife and four children, and in receipt of £275 a year, will not pay any tax. A man with a wife and five children, and in receipt of £300 a year, will pay income tax to the amount of only 12s. a year, or about 3d. a week. Therefore, comparing the revised scale with that in operation in 1943, we find that the Government has made considerable concessions to income-earners in the lower wage groups. The Leader of the Australian Country party remarked that the Government pretended to be a friend of the working man. The Government of which the honorable member for Balaclava (Mr. White) was a member did not reduce the income tax of persons in the lower wage groups. The reductions which it sponsored benefited only those inthe higher income ranges.

Mr White - Those in the lower income groups were not then taxed at all.

Mr BARNARD - Of course they were. In addition to the fact that a taxpayer with four children, and in receipt of £275 a year, will pay no income tax at all under the present proposals, he receives child endowment at the rate of 7s. 6d. a week in respect of three of the four children, and gets the increased social service benefits that have been introduced during the last few years. Therefore, it is nonsensical to say that the Government is no friend of the working man.

Mr White - The honorable member should now refer to the position of taxpayers in the £300 a year group.

Mr BARNARD - I have mentioned figures which give a true picture of the position, and show the relief that has been provided for taxpayers under a system which the Leader of the Australian Country party has described as slovenly. Every person in receipt of a reasonably good income should make a contribution towards the cost of social services. The Social Services Committee, of which I am chairman, made a recommendation to that effect, and the scale of income tax introduced for the provision of social services was adopted largely on the recommendation of the committee. It is always possible' to argue that taxation ought not to be so high, that we ought to take something off this section and put something more on to .some other section; but this provision is evidence of the' Government's desire to reduce the burden of taxation by as much as possible. Some relief is afforded to everybody. It may be possible, as one honorable member, pointed out, that the single man receiving £500 a year receives greater benefit comparatively than the married man, but anomalies are inevitable in the devising of any taxation scale. The new scale does not afford so much relief as we would like to see ; but it does lighten the burden, and I believe that the people -have cheerfully accepted the view that they must pay for the war and the re-establishment of servicemen. As a first instalment of relief in this -first year of peace, the present scale goes a long way towards meeting the desires of the public. The Leader of the Opposition (Mr. Menzies) said that it ought to be possible to reduce taxation by 40 per cent, over a period of three years. Let me point out that reductions already made by this Government amount to 22 per cent., and a continuation of the present rate of reduction would amount to 39 per cent, over a period of three years.

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