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Thursday, 5 April 1973
Page: 1204


Mr SPEAKER - Is leave granted? There being no objection, leave is granted. (The documents read as follows) -

 

 

 

 

 

 

 

 

 

TABLE 4

 


Mr MCVEIGH - I thank the House. These taxes play a large part in the revenue of the States, but the amount involved in the Commonwealth sphere as a percentage of total revenue is 0.79 per cent. In short, it is not a matter of great significance as a percentage of the total Commonwealth revenue but to the people involved - the people with untimely deaths in the family - it is a major factor. Families are forced to sell their properties and their businesses to pay these arbitrary and capricious taxes. No taxes have as great an economic and social effect as these taxes which should no longer be with us. Governments have carried on from generation to generation with these insidious taxes - a veritable cancer in our society - without any deep thought being given to any detailed review of their success for the purpose for which they were introduced, which was redistributing wealth between generations.

In this survey 'A Distribution of Personal Wealth in Australia in 1967-68' - the reference is third ANZ AAA Congress, May 1971 - R. Guyton indicated that 10 per cent of all estates owned 57 per cent of the total wealth held and that the bottom 50 per cent of all estates owned 9 per cent of the total wealth held. Similarly, a survey carried out by N. J. Thomson - The Incidence and Effects of Death Duties on Wool Growing Properties in South Australia' - discovered that, though generally considered to be an equity tax designed to fall heaviest on those with the greatest wealth, death duties, in fact, proved to be regressive.. In general, wealthy families were able to avoid the payment of death duties more effectively than the less wealthy.

This was due to the fact that the more valuable the farm the more likely it was that the family would seek professional advice in order legally to avoid the burden of death duties. I seek leave to incorporate in Hansard a table indicating this fact.


Mr SPEAKER -Order! Is leave granted? There being no objection, leave is granted. (The document read as follows) -

 


Mr McVEIGH - 1 thank the House. Insofar as the experience of these 58 wool growing properties is representative of the burden borne by primary estates generally, it is evident that death duties are a decidedly inefficient method of redistributing wealth. The burden of death duties seems to depend as much on the ability to plan as the ability to pay. Primary industry has benefited from specific concessions in recent budgets which have been necessary because economic pressures in the rural sector are causing capital to replace labour as an input in production.

These continuing pressures also are causing farmers to increase their capital stock so that the benefits of scale can be obtained and credit facilities utilised. These economic forces are operating whilst political parties espouse policies designed to maintain the viability of the. family farm. The policy of the previous Government - which I commend for going part of the way - on farm estate duties can be summarised as the desirability of providing assistance to discourage the breaking up of economic rural holdings because of the need to pay estate duty.

Those in a position to plan their business enterprises take out life assurance, form gifting partnerships and companies for the purpose of bypassing death duties and are able to bypass the payment of death duties. But we in the Country Party are conscious of the great personal hardship caused to those ordinary families where the farms, the businesses or the homes have all been established by unrelenting application to work and self-sacrifice by the whole family over a period of years. In an unselfish manner and often for a minimum of wages, with no 35-hour week and no 4 weeks' annual leave, these people have contributed to the establishment and continuation of a family heritage. Owing to an untimely death, everyone loses. It is a tragedy, a veritable disaster, because the business has to be disposed of, the family farm or home has to be sold to meet the estate duty of Commonwealth and State governments.

These duties no longer justify their existence by fulfilling their original objective satisfactorily. From the point of view of tax authorities - and surely our Public Service is big enough already and some members of it could be more gainfully employed in productive work such as social work than in tax gathering - the taxes which cost the Commonwealth most to collect are death duties. In 1971 their collecting expenses amounted to approximately 1.5 per cent of the total collection as against 1.1 per cent for personal income tax and 0.6 per cent for sales tax.

The Country Party has never been ashamed to state where it stands on issues. We are prepared to put up with the sneers and gibes and hisses but we do not sacrifice on principle. We stand for and uphold not only the dignity of labour but also the right of private property so that the family farm, business and home can be handed down for the future use of the family generations to follow. We stand for security of tenure and pride in ownership, the very antithesis of the socialistic policies of those opposite in a minority government which upholds a policy that the Government should own everything - anathema to the average Australian and the very antithesis of our way of life. Our aim is a virile Australia where the reward for initiative is still the greatest bulwark against the spread of the various 'isms'. I ask, therefore, that death duties be abolished forthwith on the Commonwealth level for their is no justification whatever for their retention.







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