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Wednesday, 24 October 1956

Mr TURNBULL (Mallee) .- lt is very strange that, in the eyes of the Australian Labour party, so far as we can judge from the speeches of Opposition members, a man is as honest as the day is long while he is earning wages, but comes under suspicion immediately he becomes successful, makes money, and places himself in a higher taxation bracket. It is very strange also that, no matter what this Government does, Opposition members say, as the honorable member for Darling (Mr. Clark) has just said, that it should be more liberal. This bill liberalizes the provisions of the principal act. The Opposition does not find fault with what is being done, but merely says that the bill should be even more liberal than it is. Honorable members have just heard the honorable member for Darling say that the Government should spend more money on accommodation for aged persons. It has done more to accommodate aged people than has been done by any other federal government. Although it has done so much, the Opposition says it should do even more, although the Labour government itself did not do anything. That is the substance of the argument of Opposition members.

I have examined the clauses of this bill, and the measure appears to be quite satisfactory. I wish, however, to direct attention to a most interesting clause of the bill. I refer to clause 6. Section 26b of the principal act, which is proposed to be amended by this clause, permits a primary producer who receives insurance moneys in respect of live-stock losses through bush fires or other causes to include, if he so desires, one-fifth only of the insurance recovery in the assessable income of the year of receipt and one-fifth in each of the next four succeeding years. Apart from this provision, the whole amount of the insurance recovery would form part of the primary producer's assessable income of the year when the moneys are received. By clause 6, it is proposed to extend this optional basis of assessment to insurance recoveries by primary producers in respect of losses by fire of trees. The amendment will have particular significance for taxpayers carrying on a business of afforestation. This is a matter of vital importance. There are many praiseworthy features of this bill, but I mention this clause particularly because every one knows that we must preserve our forests, and a person whose trees are destroyed by fire will be greatly assisted by being enabled to spread the amount of insurance recoveries over five years. This provision will be of very great benefit in catchment areas, because if the trees are destroyed in those areas soil erosion follows.

I am reminded of the following rhyme by Henry Van Dyke: -

In the wealth of the woods

Since the world began,

The trees have offered

Their gifts to man.

Practically everything that we use has been derived, at least in part, from wood. The desks that we use in our offices, the railway carriages and ships in which we travel, all are made, in part, of wood. Almost everything that we use, from the cradle to the grave, is, to some extent, of wooden construction. Theodore Roosevelt once, said: -

The fundamental idea of forestry is the perpetuation of forests for use. Forest production is not an end in itself, it is a means to increase and sustain the resources of our country, and the industries which depend upon them.

Although this clause has not been referred to in the debate, its provision will possibly be of more lasting benefit to Australia than any other provision in the bill. Another authority, Robert Chambers, has said -

When the forests go, the waters go, the fish and game go, herds and flocks go, fertility departs, then the age-old phantoms appear, stealthily one after another - drought, fire, famine, pestilence.

Anything that we can do to foster afforestation must be for the good of the community generally, and, therefore, this clause has my wholehearted support.

I have spoken recently in this House of the great success that primary producers have achieved in improving pastures by top-dressing. The taxation legislation provides that money spent in preparing land, and in obtaining seed and sowing it, and in purchasing superphosphate for pasture improvement, is allowed as a deduction from income, for taxation purposes, in the year in which the money is spent. The same principle applies to the preparation of land for agriculture. It appears to me that the Government might very well amend this provision so that money spent in this way may be deducted from income over a five-year period, just as the insurance recoveries may, under clause 6 of the bill, be spread over a five-year period. It is all very well to allow the amount spent on pasture improvement as a deduction in the year in which it is spent, if the amount of income greatly exceeds the amount spent in this way, but I suggest that the primary producer should be allowed to spread his expenditure over five years, because the increased productivity of the land from top-dressing would be apparent for a period of about five years. A producer might get a good yield in the first year if he planted a cereal crop in virgin soil. The improved production resulting from the preparation of the land for agriculture would continue. It is for this reason that 1 suggest that one-fifth of his expenditure should be allowed as a tax deduction in the first year, and one-fifth in each of the four succeeding years. This would result in benefit to Australia as a whole, because we should encourage greater production.

The present legislation favours the person who receives a large income, because any expenditure that he makes for the purpose of improving his land can be deducted immediately from his income. He may not even live on the land; he may be a city merchant, or he may be a primary producer who is already well established and receives a large income. If he is receiving an income that attracts a rate of tax as high as 10s. in the £1. and he spends £1,000 on pasture improvement, the effect of the legislation would be to reduce that expenditure by one-half.

The men we want to establish on the land are those who would benefit by the procedure that 1 am advocating. Many of the persons who are receiving large incomes and who can take advantage of the existing provisions are absentee owners. The adoption of my suggestion would encourage men to buy land and settle on it. Let us suppose that an auction sale of land is held and that the land being sold is rough country. The prospective buyers realize that they must spend a lot of money to improve it for pastoral purposes. Let us also suppose that in the final bidding two prospective buyers remain. If one of them has a large income, and knows that any money that he spends may be a tax deduction in the year that, it is spent, he can always out-bid the man who wants to buy the property but who has no immediate taxable income. It is another case of " whosoever hath to him shall be given ", because the man who already has a large income can freeze out the settler whom we should encourage to go on the land. 1 should like the Government and the taxation authorities to look into this suggestion, because I believe it has merit, and that it would result in greater production, which is urgently needed to overcome our balance of payments problem. Although 90 per cent, of our exports at present consist of primary products, 1 believe that it is in this category thai we can increase our exports and put Australia on a stable footing.

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