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Wednesday, 31 July 1946

Mr WHITE (Balaclava) .- The

Prime Minister and Treasurer (Mr.

Chifley) in the FinancialStatement claimed that reductions of income tax this financial year ranging from 20 to 47 per cent. were a substantial concession to taxpayers, but that is far from the truth. Only the most miserable concessions are proposed. Far from getting anywhere near the pre-war level of income tax the Government intends to go on its wasteful way. The strikes that trouble industry are largely due to the fact that workers are over taxed. They do not want to work just for the Treasury. Trade is restricted because business houses cannot launch on new programmes because of the punitive taxes. High taxes and in flated prices are handicapping exservicemen wishing to set up in business. Heavy taxes are new to them after having been . out of civilian life for so long. By maintaining taxesat such a height the Government is keeping up prices , and contributing to the scarcity of commodities. That leads to continuance of the black market. Proof that the proposed concession is miserable instead of substantial, as claimed by the Prime Minister, is proved by translating into pounds, shillings and pence, mostly pence, the percentages by which rates of tax are to be reduced. In most cases the weekly saving that taxpayers will make as the result of the proposed benefaction will be a matter of pence. The honorable member for Bass (Mr. Barnard), who, with other honorable gentlemen opposite, was most discomforted by my revelations about this vaunted tax concession, made much of the fact that a man on £200 a year would have his tax cut by 34.6 per cent. That amounts to 12s. a year. Anyway, few men with a dependentwife and child earn only £3 l5s. aweek. They are the people whoare to enjoy a reduction of their tax by 34.6 per cent. Good luck to them I wish it were double. A bachelor earning £300 a year, or £5 15s. 5d. a week, will save 2s. 4d. a week as a result of the proposed concession. He will be able to buy a lot with that. He will be able, perhaps, to invest in racehorses, or he might even be able to get married with the extra 2s. 4d. The honorable member for Burker (Mr. Archie Cameron) described the Finan- cial Statement as "abachelor's budget".

I hardly agree with the honorable gentleman that it could be described as any sort of a budget. But I do agree with him that the bachelor is the man who is given the most consideration. Contrast the lot of the bachelor who will save 2s. 4d. a week with that of a man, with a dependent wife, earning £300 a year, a rate upon which there is a, much greater number of taxpayers. They will each get 9d. extra a week. Perhaps, they will be able to build a larger house and live more luxuriously on that. The savings of a man, with a dependent wife and one child on the same income will be 7d. a week for himself and each of his dependants. Their new house will not be quite so magnificent. A man and his wife and two children will get 4d. extra a week each. They are people whose breadwinner earns £300 a. year, which would be about the average salary of most Australian taxpayers. That shows the hollowness of the Government's claim, which was headlined in the newspapers, that the income tax would be reduced by 40 per cent. As the number of dependants of a taxpayer increases the weekly saving that he will be able to make as a result of this munificent .gesture diminishes. I now turn'to the taxpayers whose income comes from property. The propertyowners are the "people whom honorable gentlemen opposite habitually talk about with great unction as bloated capitalists who tread .on the faces of the workers. They are the exploiters. A taxpayer with the magnificient income of £200 a year from property and without dependants will save lOd. a week as the result of this legislation. He will be able to buy more property with that! He will be able to load himself up with more Commonwealth Bonds. The Minister for "Works and Housing (Mr. Lazzarini), in his more fervent if not more vocal days, used to refer vehemently to the bondholders as vampires sucking the blood of the people. But times have changed. The Labour Government has exhorted the people, to -purchase bonds. If they could not fight for Australia, 'they were urged to buy bonds. Last year, a person who earned the " magnificent " income of £20.0 a year paid tax of £8 19s. per annum. Under the new tax proposals, he or she will " bene- fit " by a reduction of lOd. per week. According to honorable members opposite that would enable him to become a bigger capitalist. Yesterday, the Minister for Information (Mr. Calwell) stood up all those familiar aunt sallies, and knocked them down > to his own satisfaction. He tilted at the Broken 1 Hill Proprietary Company Limited, the Melbourne Club, capitalists and profiteers. If any one lives on the earnings of the working man, it is certain honorable gentlemen opposite, and the Communists who live in their camp. However, I do not desire to harry their feelings by referring to that matter extensively.

I wonder whether the Minister assisting the Treasurer (Mr. Lazzarini) is aware how onerously the income tax bears upon certain classes. Recently, a number of senior officers of the Royal Australian Air Force were retrenched. I do not propose to discuss the why and wherefore of their retrenchment, but the Government gave to those men a gratuity for, we hope, their long and distinguished service to Australia. Judge their surprise when they discovered that they were obliged to repay as income tax 5 per cent, of the amount. A gratuity of that kind should be exempt from tax. In my opinion, that action was unfair. Recently, the Minister for the Navy (Mr. Makin) referred to a certain action as not being " cricket " - I am glad to know that the honora'ble gentleman has begun to play the game lately - but I contend that it is not in the spirit of cricket to compel distinguished officers of the Royal Australian Air Force to pay income tax on their gratuity.

Income tax is also levied unfairly upon some men, who, during the war, served outside Australia. To-day, I received a letter from a man who formerly resided in Shanghai, but who waa passing through Australia in 1940. As there were difficulties in the way of his leaving Australia, he enlisted in the Australian Imperial Force. Because he could not leave Australia for overseas service, he resigned' his commission and served aboard an American army transport, which was continually in the waters of Papua, New Guinea, the Netherlands East Indies and the Philippines. Now, the Taxation Department has ruled that he must pay income tax on the income derived from the Government of the United States of America during the period of his service. He wrote -

The income was not taxed by the American authorities, but they deducted tax from salaries on behalf of the Australian Taxation Department.

This man is regarded as a civilian who did not serve in the forces. His desire for active service caused him to resign his commission in the Australian Imperial Force and seek employment on an American army transport. In such cases as this, the Government should be generous, and exempt the men from income tax. My correspondent added -

My income was not derived from sources within the Commonwealth, but was paid by the American Government, who did not levy tax. The vessel was operating in an area not subject to Australian income tax... The American Government accepted full responsibility for compensation for injury and loss of life. No responsibility was accepted by the Commonwealth Government. When a vessel is on the high seas under the American flag, the crew are subject to American law, and do not enjoy the rights of British subjects. Service on American ships is not recognized by the Australian Government as " war service ". I am not eligible for the Pacific Star, not eligible for any repatriation benefits for sickness such as malaria contracted whilst serving in the islands, and not eligible for membership of the Returned Soldiers' League. This matter affects many Australians who worked for the Americans in the islands for periods of six months upwards, therefore it would be appreciated if the subject could be brought before the House.

This man is required to pay income tax on the money which he received while he was employed by the American Government. Is that justice to a man who enlisted in the Australian Imperial Force, and saw war service aboard an American transport ?

Some time ago, I asked the Treasurer (Mr. Chifley) a question about the taxation of the incomes of Australians who were serving with Unrra. This excellent organization is doing wonderful service to-day in starving Europe, where many people are suffering from sickness and famine. One of the duties of the servants of Unrra is to re-organize the administrative machinery of the war-devastated countries. Australia's contribution to Unrra is £6,000,000 a year.

Mr Fadden -Next year it will be £12,000,000.

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