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Thursday, 20 October 1910

Senator NEEDHAM (Western Australia) . - One very refreshing feature of this debate has been the speech which my honorable and venerable friend, Senator Fraser, has just delivered. I take this opportunity of congratulating him upon his remarkable virility, but I am sorry that I cannot congratulate him upon having adduced any solid argument against the measure which we are now considering. The title of the Bill is " a Bill for an Act relating to the imposition, assessment, and collection of a land tax upon unimproved values." So far, I have not heard a single argument against the justice of the principle to which the Bill seeks to give effect.

Senator Walker - Was the honorable senator present while Senator Clemons was speaking ?

Senator NEEDHAM - I was. Perhaps my honorable friend was not.

Senator Walker - Oh, yes.

Senator NEEDHAM - I was present during the major portion of the remarks of Senator Clemons, and 1 did not hear a single argument advanced against the justice of the principle of land values taxation. Evidently Senator Walker was having his usual afternoon nap. I admit that I did hear many arguments in favour of protecting those men who have been so fortunate as to acquire large tracts of territory which they are not putting to a proper use.

Senator Millen - The tax will fall just as much on the man who is utilizing his land to the best advantage as it will upon the individual who is not.

Senator NEEDHAM - Many of the arguments which were advanced by the Leader of the Opposition yesterday might well have been reserved for the Committee stage of the Bill, because it is just possible that we may then be able to focus our attention on one or two clauses which he specially attacked, and which he declared will inflict a glaring injustice upon certain individuals.

Senator Millen - But the VicePresident of the Executive Council has said that he intends to resist all amendments, no matter what may be their effect.

Senator NEEDHAM - The Leader of the Opposition knows perfectly well that, while the Vice-President of the Executive Council may resist all amendments, he is not the sole arbiter of whether any amendment shall be accepted. The Committee will be the arbiter of any amendment that may be moved. I am somewhat surprised at the howl of derision with which this Bill has been received bysome honorable senators opposite, in view of the fact that in another place it went through the ordeal of a scathing criticism from the colleagues of the Opposition in the Senate. Surely honorable senators op posite must by this time have awakened to the fact that, whether they like it or not, the people of Australia have demanded that a tax shall be imposed on the unimproved value of land. If time permitted, I could quote columns of figures and of authorities to prove the justice of the principle embodied in this Bill, but as I am desirous that the measure shall become law as soon as possible, I intend to put that portion of the argument on one side. Senator Fraser has told us about his properties, his sheep, and his cattle. But sheep and cattle will not defend Australia. There may be a time when we shall have to face the danger of invasion. We are at present the ob'ject of the greedy eyes of jealous Powers, who know what our national resources are, and wish for the day when they may endeavour to annex our territory. Recognising that danger, this Parliament is being asked to pass a Bill which will compel every citizen to prepare for the defence of his country. I cannot address myself to this Bill and separate the question with which it deals from that of defence. I contend that the three questions of land taxation, defence, and increased population are inseparable.

Senator St Ledger - There is such a thing in defence as leaving a reserve power of taxation for use in time of war.

Senator NEEDHAM - We can get over that fence when we reach it. I consider that, in the interests of defence, the lands that are lying idle and useless should be utilized, and that, instead of feeding sheep and cattle, they should provide homes for men and women, who would be able to defend their country in time of war. Senator Clemons has referred to the use of luxuries. But I do not admit that the worker's pipe of tobacco or his glass of beer are luxuries. One of our High Court Judges has laid it down, in a ruling given from the Bench, that they are rather in the nature of necessities. But, even admitting that Senator Clemons' argument is correct, the worker who smokes his pipe or cigarette and drinks his ale is paying heavy taxation for doing so. At the same time, there are in this country many others who are enjoying luxuries for which they pay nothing. This Bill aims at the taxation of those men who are holding up land and denying to others the opportunity of using it. My honorable friends opposite pride themselves on being students of ethics. If they are logical in their application of ethical principles, they cannot consistently oppose the legislative embodiment of the principles contained in this measure. It needs no proof that the lands of Australia are not being put to their best use now.

Senator Walker - Because there is not sufficient population. Is not that so?

Senator NEEDHAM - May I for the moment be Scotch, and answer one question by asking another : Why have we not a larger population?

Senator Walker - Because the Labour party object to immigration.

Senator NEEDHAM - There have been many libels on the Australian Labour party, but that is the greatest of all. I challenge any honorable senator to show one instance in "which the Australian Labour party have at any time tried to block the influx of population.

Senator St Ledger - They kept a Government in power that did.

Senator NEEDHAM - What Government ?

Senator St Ledger - The Barton Government.

Senator NEEDHAM - My honorable friend is, as usual, incorrect. I shall not now discuss the case of the six hatters ; but no honorable senator opposite can prove that the- Labour party has ever advocated depopulation, or been opposed to the increase of population. We have, however, advocated that before we invite people to our shores we should be certain that there is land available for them" to settle upon. The Bill that we are now discussing is the greatest proof we could have of the sincerity of the Labour party. We have contended on the public platform that until such time as there was an effective tax on the unimproved value of land it would be useless - nay, it would be suicidal - to invite people from abroad, because we have in our cities artisans who are now perambulating the streets unemployed. An influx of population would simply increase competition in an already congested labour market. But we do want to invite people to come to Australia to settle upon our land. Millions of acres of land are locked up. No better proof of that statement has been provided than was contained in the speech of my honorable and venerable friend, Senator Fraser. We want to place the lands of Australia at the disposal of our citizens. A couple of years ago, in New South Wales and Victoria, there were three' or four hundred applications for one block of . land ; and in another instance there were 500 applications for one block.

The applications came from people who were resident in those States. Would it not be suicidal to invite people to come here to increase that competition? That is my reply to the libel that the Labour party are not desirous of increasing the population of Australia. Any sane sian who will glance cursorily at a map of Australia and ascertain its area and its population can realize that it will be utterly impossible to hold this country for the white race unless it has a large population. But we must also recognise that if we are to populate the country we must have the land unlocked and untrammelled for every citizen to have his fair share of it, and to welcome our brothers from oversea and give them a similar chance. During the course of his speech Senator Fraser said, " If no rain no work," referring to the results of a drought. We all know what dangers threaten Australia in that respect. But I am glad to say that so far as our honorable friends have gone, they have not yet blamed the Labour party for creating droughts, though possibly they may. My reply to Senator Fraser is that if there is no land available, there is no work. Our . contention is that we want population. The larger the area of land placed under cultivation the greater the demand for labour and the bigger the return to the whole of the populace. That is an accepted fact which ] need not dwell upon. Senator Clemons has stated that the people of Australia have not affirmed the details of this Bill. I have always understood that when a man sought the suffrages of the electors he stated the principles of his party and promised that if returned he would endeavour to have them embodied in a Statute. But I have not yet known or heard of a man who, on a public platform, ventured to put forward the Bill itself in connexion with the principles which he was advocating. I venture to say that Senator Clemons has not done so. . No honorable senator on the other side can disavow that the people of Australia were well informed during the late elections that if the Labour partywere returned in sufficient numbers to carry on the Government, one of their first act* would be to bring in a Bill of this very description. No one has yet attempted to deny that. But honorable senators opposite are trying to hide themselves behind the fact that the poor landlord and the poor mortgagor may be imposed upon. That is another feature. We have- heard a lot about the poor washerwoman, the poor widow, and every other poor person, and now we hear of the poor landlord. If the landlord is poor it is no fault of ours, because he has reaped the riches of the harvest so far.

Senator McGregor - Very likely it is owing to a fault of his that he is poor.

Senator NEEDHAM - If he is poor, it will be his fault, and not ours, if he is made any poorer. Let me review the principle of the Bill. It levies a tax on the unimproved value of land. Shall I ask my honorable friends on the other side what is the meaning of unimproved value of land? N7o, I would not insult their intelligence by suggesting for a moment that they do lot know the meaning of those words. An honorable gentleman, whom they know well n Sydney, gave a splendid definition of die unimproved value of land. He quoted ihe case of a man who in a certain year nought a block in Sydney for £16. Shortly afterwards he committed a crime for which he was arrested, tried, found guilty, and sentenced to twenty years' imprisonment with hard labour in Darlinghurst Gaol. He served the full period, minus whatever remission he had obtained for good conduct. When he came out of gaol at the end of about fifteen years and became again a free citizen, what was the unimproved value of the block for which lie had paid £16? Exactly £25,000. Here is where the whole crux of the question comes in.

Senator Walker - Who paid the rates for him all that time?

Senator NEEDHAM - He did not pay them. What could that man do while he was " cribb d, cabin'd and confin'd" in Darlinghurst Gaol to increase the value of his land ? The increased value could only nave been created by the community by the expenditure of money, public or private, in the construction of railways, roads, waterworks, artesian bores, tramways, agricultural halls, libraries, town halls, or any other public utility in close proximity to :he block. Vet. after all these years spent in durance vile, this man came out and reaped that harvest of wealth without having expended any labour or money upon the land. I challenge my honorable friends opposite to quote any other case to disprove that there is justice and equity in imposing a tax on the unimproved value of land which, of course, is not created by the owner, but by others. Let me single out one or two other instances in connexion with the vast tracts of territory which are held up. In the Western District of Victoria in 1905, I think that was the year, there were eleven persons who owned 1,250,000 acres, and in another portion of that district there were eighteen persons who owned 1,500,000 acres. It will be conceded at once by Victorian senators, I think, that its Western District is the most fertile portion of the State.

Senator Blakey - There are 187 persons who own 2,000,000 acres of it.

Senator NEEDHAM - I think that, in 1905 also, there were sixty families who owned 4,000 square miles in the Western District. Is it possible to expect that that number of persons could put that area to its legitimate use? If the land which is held in these large tracts were put to its proper use, then, instead of having eleven persons owning and controlling 1,250,000 acres, we should have many more happy families settled there and thriving. That is one of the reasons why I welcome this Bill.

Senator Sir Josiah Symon - To only tax those who are not putting their land to proper use is not the principle of the Bill.

Senator NEEDHAM - We are now considering the second reading of " a Bill relating to the imposition, assessment and collection of a land tax upon unimproved values." My honorable friend was not in the chamber when I commenced to address myself to that subject.

Senator Sir Josiah Symon - No; but you were saying that it is desirable that that land should be put to its proper use. That is not the object of the Bill.

Senator NEEDHAM - When I commenced my address, I said that I intended to deal entirely with the principle contained in the Bill, and that is to impose a tax on the unimproved value of land. I am now advocating the necessity of imposing the tax.

Senator Sir Josiah Symon - But you are advocating that land should be taxed which is not put to its proper use, and that is not the principle of the Bill.

Senator NEEDHAM - My contention has been that if the Bill becomes law, land which is now locked up will be put to its proper use, and I have quoted figures in support of it.

Senator Sir Josiah Symon - And land which is put to its proper use will be taxed in the same way.

Senator NEEDHAM - There is the same argument as other honorable senators have used; these are details of the Bill which can be very well considered in Committee.

Senator Sir Josiah Symon - Is it not right ?

Senator NEEDHAM - I ask my honorable friend if he is in favour of the principle of the Bill ? There is no reply to the question.

Senator Sir Josiah Symon - What is the principle of the Bill?

Senator NEEDHAM - The taxation of the unimproved lvalues of land. When a measure is introduced in this Senate, not to mark time, but to make some progress, those who support it are met with a fusilade of questions from honorable senators who desire to protect, not the people of Australia, but their own private property. Mr. Lloyd George, in the Old Country, has been threatened almost with the loss of his life, because he dared to bring forward a measure like this.

Senator Sir Josiah Symon - He never did bring forward a measure like this.

Senator NEEDHAM - We have heard that great land-owners whose annual rentals amount to between £200,000 and £300,000 a year will be so poverty stricken when this tax is imposed that they intend to part with all their lands, and refuse to give anything to charity. We have been told here that this Bill will be unjust to all people who hold land. But I would remind honorable senators that under this Bill land under £5,000 in value is to be exempt from taxation.

Senator St Ledger - Will any one on the other side say why the line is drawn at £5,000?

Senator NEEDHAM - If the honorable senator asks me the question, I will say that it is because we are anxious to save the poor landlord and the struggling farmer, about whom he has so much to say. The honorable senator went through the last Federal campaign, and condemned the imposition of land taxation by the Commonwealth Parliament. He bewailed the fate of the struggling man on the land. He said that if this tax were imposed, the struggling settler would be further penalized, and, to use a word which has been bandied about in this Chamber this afternoon, he would be ruined. I venture to say that the man who owns land of the unimproved value of £5,000 cannot be said to be struggling.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel SirAlbert Gould. - He may owe £3,000 on it.

Senator NEEDHAM - He is a very, lucky man if he can get £3,000.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel SirAlbert Gould. - But he has to pay interest on it. That is the awkward part of it.

Senator NEEDHAM - It is not awkward that a man should have to pay his just debts.

Senator Sir Josiah Symon - Will the honorable senator support an exemption on all land that is being put to its proper use?

Senator NEEDHAM - I will support the exemption of all land the unimproved value of which is less than £5,000.

Senator Sir Josiah Symon - The honorable senator does not say that that is an answer to my question?

Senator NEEDHAM - I will support the Bill as it stands. I am answering the honorable senator in the way I answered the electors who sent me here. Surely he will not claim from me a more explicit answer than I gave my constituents? The absentee is mentioned in this Bill.

Senator WALKER (NEW SOUTH WALES) - Does the honorable senator look upon an absentee . as a criminal ?

Senator NEEDHAM - I do not wish to label any man as a criminal until he is found guilty of a criminal offence after a fair trial by his peers ; but I think that a man who earns his wealth in one country, and spends it in another, should be taxed by the .country in which his wealth is earned. We have the instance of a man who died in London only about a year ago. His estate was proved to be valued at a little over £2,000,000. Seven-eighths of his wealth was obtained from Australia, and yet that man did not pay id. of taxation to an Australian Exchequer. Would Senator Walker be prepared to justify that kind of. thing?

Senator Walker - Does the honorable senator believe that that man's estate did not pay anything in the way of rents or dues to the Australian Government ?

Senator NEEDHAM - No Government in Australia received a brass farthing from that estate, but Mr. Lloyd George, as Chancellor of the Exchequer in England, received a very fine cheque from the owner of the estate. If any man exploits the wealth of a country, fattens upon it, and spends that wealth in another country, he should be taxed. So far as I am concerned, he can spend his money as he pleases. That is his business.

Senator McGregor - The honorable senator would not kill the fatted calf?

Senator NEEDHAM - No; but I think that the country from which he reaps his wealth should get something out of the profits he derives from it.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Sir AlbertGould. - There is a provision in the English law under which, by an arrangement between the different Governments, such a difficulty may be overcome.

Senator NEEDHAM - If that be so, I can only say that in the case to which I have referred, no Australian Government took advantage of it. I say that the landlord owes a duty to the community, and in supporting this Bill, I am merely seeking to compel him to render that duty to the community. I have only to say now that it marks a step in the progress of Australia, that the Federal Parliament should be dealing with a Bill of this nature. It is one of the finest pieces of legislation which we could place upon the statutebook, and in placing it there we shall be merely carrying out the promises we made to the people of Australia when they did us the honour to elect us as members of the National Parliament.

Senator Walker - I wish to direct attention to the state of the Senate. [Quorum formed.]

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Sir ALBERTGOULD (New South Wales) [5.40].- As honorable senators may suppose, I do not intend to follow exactly the lines adopted by Senators Needham and de Largie. I do not, as they do, regard this Bill as an unmitigated blessing. I do not regard it either as one which is in accordance with the promises which honorable senators opposite made when before their constituents. 1 wish to disabuse the minds of honorable senators of any idea that in opposing this Bill I am entirely opposed to land values taxation. It so happens that I had the honour to belong to a Ministry in New South Wales that introduced a land and income tax. I have regarded the taxation of land and incomes as a legitimate means of obtaining revenue, and I ask honorable senators to bear in mind that, though opposing this Bill, I am not opposed to land values taxation as a means of raising revenue when necessary. From the inception of Federation the opinion at which I arrived from read ing the Constitution, and hearing it discussed, though not at the Federal Convention, because I was not a member of the Convention, was that Customs and Excise taxation was under the Constitution to be left entirely to the Commonwealth Parliament, subject to the return to the States for a period of years of a certain proportion of the revenue so derived to enable them to carry on their affairs and adapt themselves to the new position. I recognised that the Commonwealth Parliament was, under the Constitution, to have absolute control of this indirect systemof taxation, but, in common with a great majority of the people, I believed that direct taxation was intended to be left to the States, unless to meet some very grave emergency, when the Commonwealth would be entitled to resort to it.

Senator Rae - Why was not that stated in the Constitution?

Senator Lt Colonel Sir ALBERT GOULD - Many things which do not appear in the Constitution may very fairly be read into it as consistent with the intention of the framers of it. Some years ago I was twitted with having stated that the imposition of direct taxation by the Commonwealth Parliament would be unconstitutional. I regarded it as unconstitutional from the point of view, that while there is provision made in the Constitution to permit this Parliament to resort to that means of raising revenue, nevertheless it was clearly the intention of the framers of the Constitution that there should not be an overlapping of both systems of taxation in the Commonwealth and in the States if that could possibly be avoided. So strongly did I feel on this point that I would have been prepared to say, and I think it would have been an advantage to the States, " We will take the whole of the revenue which may be derived from Customs and Excise, and will not interfere with other sources of taxation to which the States may desire to resort to derive the revenue necessary to carry on their affairs'." Honorable senators opposite contend that this land tax will have a most important effect upon the wellbeing of Australia. I may admit, for the sake of argument, that the burstingup of large estates, and their occupation by a greater number of people, would be of advantage to the country. But we have to look to our Constitution, and to see what powers have been intrusted to us under it. By the very title of the Bill the Government admit that they cannot put upon its face the motive which actuated them in deciding upon this system of land taxation. It is undeniable that in the early days those who advocated the imposition' of such a tax did so because they desired to burst up large estates. That was the original intention of the Labour party, and I believe it is their intention to-day. But, under the Constitution, we are not empowered to levy a progressive land tax for any such purpose. We are justified in imposing taxation only for revenue purposes. There is not a line in the Constitution which suggests that we have the slightest right to interfere with the lands of the States.

Senator Walker - The States have sovereign rights.

Senator Lt Colonel Sir ALBERT GOULD - Exactly. The States possess sovereign rights, and this Parliament cannot legislate for the alienation of a single acre of land within their borders. The Commonwealth has no power to resume land except for public purposes, and in accordance with the powers which have been conferred upon it by the Constitution.

Senator Rae - We cannot enact that there shall be a spirit licence of £to per annum, but we can impose a duty of £10 per gallon upon spirits, if we choose. Surely that is a parallel case.

Senator ALBERT GOULD (NEW SOUTH WALES) - The honorable senator misunderstands the position. If he tells me that the legislation proposed in this Bill is intended merely to raise revenue, I at once admit that the Government are empowered under the Constitution to enact it. But it has no power to interfere with the administration of the lands of the various States.

Senator Rae - Is not the case which I have just cited exactly a parallel one?

Senator Lt Colonel Sir ALBERT GOULD - No. The Commonwealth has imposed a duty upon spirits solely for the purpose of raising revenue. It has never been suggested that its object was to destroy the trade in liquor, and to prevent the importation of spirits. A similar remark is applicable to tobacco. But in this Bill an attempt is being made to prevent persons from holding land in large areas. Bv levving a progressive land tax, which will ultimately become confiscatory in its character, the Government propose to prevent the holding of large estates. But, as Senator Clemons has pointed out, when once the higher rate of 6d. in the £1 is reached, assuming that the net return from large estates is 5 per cent, upon the capital invested, the tax will amount to lOS. in the£1 on the income derive'd therefrom.

Senator Ready - His argument was based upon a mere assumption.

Senator Lt Colonel Sir ALBERT GOULD - All arguments are based upon assumptions. We must view this matter from a common-sense stand-point. We know that if the holder of a large estate clears, upon an average, 5 per cent, upon his outlay, he does very well. It is true that during one year he may clear a great deal more, but during another he may obtain very much less. If it were proposed, in so many words, to levy a progressive income tax upon such a man, to provide an exemption up to £5,000, and to increase ihe tax till it amounted to 10s. in the £1, honorable senators opposite would declaim against its injustice. While it is true that some persons have the handling of large sums of money, we must recognise that, as they have acquired means, their outgoings have increased. Many a young man, in starting life, has been heard to say that if he only had such-and-such an income he would occupy a very happy position. " But when once he is in receipt of that income he speedily discovers that it is still insufficient to enable him to satisfactorily meet his obligations.

Senator Rae - Does the honorable senator maintain that Senator Clemons was correct in the instances which he quoted?

Senator Lt Colonel Sir ALBERT GOULD - The instances which he cited were based upon the estimated returns from the unimproved value of property in good and bad seasons. He is absolutely correct when he says that a tax of 6d. in the £1 on unimproved land values is equivalent in the case of estates aggregating a value of £75,000 and upwards - estates which return 5 per cent, net - to an income tax of 10s. in the £1. Whilst it is customary for some persons to regard the. ownership of land as systematized robbery, we must recollect that not a single acre in the whole of Australia has been alienated without some valuable consideration being given for it. Even in the early days, when men obtained grants of land, without payment, they had to perform certain work in order to justify their holding of it. They were the men who did the pioneering work of <:his continent.

Senator Rae - Is it not a fact that those conditions were unfulfilled ?

Senator Lt Colonel Sir ALBERT GOULD - In certain cases, it may be. But before a man obtained his grant, he had to give valuable consideration for it. He was one of the pioneers of this country - one of the men who have made it a desirable place to live in for those who come after them. At a later stage, men were required to pay a small sum, and to undertake certain obligations in regard to the employment of labour and the cultivation of land, before they were granted a title to it. A little later men were obliged to pay to the Crown £1 per acre for land, or whatever was adjudged to be its fair value. But the point I wish to emphasize is that every land-owner has given some consideration to the Crown for his land. I suppose that nearly all those who obtained land in the early days have parted with it, in addition to which, we know that the values of land have from time to time increased, so that the people now holding it have paid for it its full capital value. Is it right to impose upon the individual who has paid the full market value for his land a tax which will penalize him ? I say that we ought not to levy a tax which will ultimately become confiscatory, and which might well be designated a robbery of the individual. This Parliament has no right to impose such a tax. We ought not to attempt to touch the lands of the States unless it is absolutely necessary to do so in order to obtain revenue.

Senator Rae - Cannot the States levy heavy probate duties.

Senator Lt Colonel Sir ALBERT GOULD - Will the honorable senator promise to lend his assistance in that direction if he should ever re-enter State politics ? I repeat that, when the higher rates are reached, the tax will prove confiscatory in its character, in addition to which it will not give effect to the professed desire of the Labour party. If they consider it necessary to legislate for the bursting up of large estates, why do they not ask the people to amend the Constitution so as to empower us to deal with the holders of that particular class of property? The Bill which is now before us is, upon its face, a fraud. The Government are seeking to impose a tax for one purpose, whilst professing that it is being levied for another purpose. The tax is being levied ostensibly for revenue purposes, but really for the purpose of bursting up large estates.

Senator Rae - We maintain that it will accomplish both -purposes.

Senator Lt Colonel Sir ALBERT GOULD - Is it just to impose upon the individual who has paid for his land a confiscatory tax, whilst allowing the man who rents land from the Government, and who possibly makes very much more out of it than does the freeholder, to go absolutely free? Honorable senators opposite talk about the large areas of land that are locked up from settlement. One would imagine, from hearing them talk, that Australia was a very small country, in which all the good land was occupied. But I hold in my hand Mr. Knibbs'Commonwealth Year-Book for 1909, in which he publishes a diagram showing the condition of the public estate. The diagram shows, by means of black marks, the area that has been alienated in each State. Victoria may, perhaps, be called a shocking example in this respect, although there is still a large area of unalienated land in this State. But a very large area has been alienated on account of its adaptability for profitable use as freehold property. In New South Wales, however, the black line is much thinner, and in Queensland and South Australia it is thinner still. The line for Western Australia is quite a fine one. I find that, of the total area of the Commonwealth, only 4.69 per cent, has been alienated, whilst 1.93 per cent, is in process of alienation. Lands held under lease account for 40.68 per cent., and the unoccupied lands are 52.70 per cent, of the whole. So that more than onehalf of the lands of Australia are absolutely unoccupied. I do not suppose that there is a single honorable senator who would urge that land should not be held under lease or licence. Many people who occupy land under a freehold tenure were practically forced to do so. Others purchased land because they considered that the prospects were sufficiently remunerative to justify them in investing their capital in this manner. There are still, however, millions of acres of land in this country that are open to be selected. Senator Millen has referred to the western lands of New South Wales. As he observed, pressure was actually put upon leaseholders in that country to induce them to acquire freeholds. Much of that land is only fit for pastoral purposes, and many of the estates are absolutely overrun by rabbits.

Senator Ready - The rabbits have been a blessing to very many people in Australia.

Senator Lt Colonel Sir ALBERT GOULD - You have to strike a balance as between advantage and disadvantage to determine when a pest becomes a blessing.

Senator Rae - The rabbit goes with Radicalism, and the cow with Conservatism as a rule.

Senator Lt Colonel Sir ALBERT GOULD - Much of the land in the western division of New South Wales would be absolutely useless for agricultural purposes. It could not be employed for any other than pastoral purposes. We also have to remember that Australia derives millions of pounds annually from the wool produced on these outlying estates. It is not true to say that the lands are not put to any use at all. Many of them are being put to the best use for which they are fitted. Enormous areas of land would not be employed at all were it not for our great pastoral industry. Whatever taxation the Government choose to impose, they should, at all events, impose it in the full light of information as to what is being done with our occupied lands. I am well aware that a country is all the better for sustaining a large population, and, of course, we have to aim at that in the future. But the States have not been oblivious of their duty in that connexion. They have made mistakes ; but at the present time two or three of them are taking steps to resume land which is considered to be suitable for agricultural purposes. They are settling people upon these lands, and are enabling them to pay for them on terms ranging over thirty or forty years.

Senator Rae - And thereby bumping up the value of adjacent estates.

Senator Lt Colonel Sir ALBERT GOULD - That may or may not be the case ; but it is evident that as the population increases, the value of properties must increase by what honorable senators opposite are pleased to call the " unearned increment. ' ' That is not at all "a bad thing. If I take up a property, and spend money upon it to improve it, I am surely not committing a crime. On the contrary, I am finding work for the people. Am I, then, to be penalized, as the Government are penalizing people by means of this Bill ? The Bill is not intended to secure the unearned increment to the community. If it were it would take pains not to tax the value given to property by the expenditure of private money. If a man has paid £1 per acre for land, he is not to be allowed a deduction for what he has paid to the Crown. The Bill simply says that if a man has a property worth . £50,000 he shall pay a heavy tax on it, with the object of making him break up his estate, although it may be absolutely useless for any other than pastoral purposes. He may not own an acre which is fit for agriculture. The experience of some pastoralists in New South Wales has been pretty rough. An experiment was made some years ago to induce people to take up 3,000 or 4,000 acres of land in the back country. Some deluded individuals imagined that they could go in for mixed farming. But they soon found that the areas were too small for pastoral purposes, and not good enough for agriculture. Yet that class of land will be taxed under this Bill. Senator Rae knows the western district of New South Wales very well. He knows what unsatisfactory country it is, as a rule. Of course, in good seasons, it is excellent pastoral land, as long as it is not overstocked ; but one good year may be followed by four or five very bad ones.

Senator Rae - That is nearly all leasehold land.

Senator Lt ColonelSir ALBERT GOULD .- Much of it is freehold. It necessarily became freehold, because the occupiers had to secure the advantage from the improvements they had made upon it. It is quite useless for settlement purposes. Yet, under this Bill, land of that kind is being treated as though it would be an advantageous thing to break up all aggregations of estates to encourage settlement. Then consider how the Bill deals with city lands. There is, undoubtedly, land in the capital cities of Australia which is worth a large amount of money. Considerable sums have been spent in erecting warehouses, offices, and shops upon it. It has been for the benefit of every individual in the community that those buildings should be erected. Of course, the owners derive large revenues; but when a man spends his money, he naturally expects to get a return from it. Does the poor man expend his labour without expecting a reasonable return ? The working man who. has not a sixpence in the bank, or a square yard of land, nevertheless has something that is valuable to him in his labour, and: he expects to be paid at market rates by those who purchase labour from him. In. exactly the same way a man who spends money in putting up a building in the city expects to obtain a reasonable return from it. There ought never to be, as there unfortunately is, any conflict between capital and labour. What, after all, is capital? lt is only the accumulation of effort and labour.

Senator McGregor - I think that the man who does the labour gets very little of the capital.

Senator Lt Colonel Sir ALBERT GOULD - That may be so, but how many of our wealthy men have raised themselves from . a most humble position when they had nothing more than their brains, muscles, and energy to depend upon.

Senator de Largie - I laboured hard for thirty years, and I was poor all the while. When I knocked off as a labourer I was as poor as I was when I started.

Senator Lt Colonel Sir ALBERT GOULD - What was the position of the honorable senator during the thirty years? He was able, although he had only a small income, to 'ive comfortably and respectably, and to maintain, rear, and educate a family. By means of effort and energy he has raised himself to a very honorable position in this Parliament. I give him all credit for bettering himself.

Senator de Largie - Not while I was in that position.

Senator Lt Colonel Sir ALBERT GOULD - No, but the honorable senator laid the foundation for the position which fie now occupies.

Senator de Largie - It was not until a grateful country recognised my qualities that I bettered myself.

Senator McColl - The honorable senator got the unearned increment.

Senator Lt Colonel Sir ALBERT GOULD - What I want Senator de Largie to realize is that during the period of hard work he laid the foundation for a better position in the future. He has attained a better position because of the way in which he attended to his work when he was in poorer circumstances.

Senator E J RUSSELL (VICTORIA) - You are forfeiting that he had the good luck to be a Scotchman.

Senator Lt Colonel Sir ALBERT GOULD - Senator de Largie commenced to work when he was a young man, and by the application of energy and perseverance he improved his position. A man who has bettered his position is entitled to consideration, whether it was due to his money or his labour. In Australia there are hundreds of men who, when they started life, were very poor, but who to-day are. very wealthy. They acquired their wealth honestly and under the laws of the -country.

Senator Walker - I worked in Scotland for two and a half years for £25.

Senator Lt Colonel Sir ALBERT GOULD - The honorable senator is none the worse.

Senator McGregor - Perhaps that is why he left Scotland.

Senator Lt Colonel Sir ALBERT GOULD - In regard to city lands, this Bill imposes a very large tax on landowners. It may be justified, honorable senators may say, because revenue is wanted. That is not how they started with their Bill. The idea of obtaining revenue, in this way has grown upon them through the necessities of the Constitution.

Senator de Largie - We have to meet the new requirements of the Commonwealth.

Senator Lt Colonel Sir ALBERT GOULD - I admit that we have launched out to a considerable extent, and require additional revenue, but if the honorable senator had had to introduce a Bill solely for the purpose of obtaining revenue, it would have been of a different character from this one. What is the justice of imposing a tax of 6d. in the £1 on one property in the city and a tax of id. in the £1 on another property? My honorable friends will not advantage themselves by taking that course. If they impose a fair rate of taxation, and apply it to every property in the same way, subject, of course, to an adequate exemption, then they may justify the measure from the stand-point of taxation by saying that the expenditure is growing, that we are building a navy, and, instead of borrowing money for the purpose, and providing a sinking fund for its liquidation within a reasonable period, we are going to pay for it out of the Consolidated Revenue Fund.

Senator de Largie - Do you want to leave nothing for the States ? Are they to get nothing?

Senator Lt Colonel Sir ALBERT GOULD - The honorable senator is trying to take away everything from the States.

Senator de Largie - No, we leave them all properties below £5,000 in value to tax.

Senator Lt Colonel Sir ALBERT GOULD - I do not say whether the exemption should be £5,000 or £500. I have heard honorable senators urge that it ought to be reduced to £500, and even swept away.

Senator de Largie - We want the States to get a little revenue from land taxation.

Senator Lt Colonel Sir ALBERT GOULD - Either you want to burst up estates by means of this tax - a thing which you have no right to do under the Constitution - or you are imposing it purely for revenue purposes. Your object ought to be to make as few cases of hardship as possible, and not to have cases brought up of persons being so far penalized by the tax that they will be placed in a state of bankruptcy or insolvency.

Senator E J RUSSELL (VICTORIA) - Poor fellows !

Senator Lt Colonel Sir ALBERT GOULD - If the honorable senator had the misfortune to die and to leave behind him some persons who were entirely dependent upon a small annuity or an income out of a property, and the State came along and took away that means of livelihood, it would be a case of ' 1 poor fellows."

Senator de Largie - You want to tax the big man in the country, but not the big man in the city.

Senator Lt Colonel Sir ALBERT GOULD - No, my honorable friends have got themselves on the horns of a dilemma. This Bill was never put before the people or introduced as one to burst up big estates.

Senator Rae - Oh, no.

Senator Lt Colonel Sir ALBERT GOULD - The honorable senator says that he advocated the Bill for a different purpose.

Senator Rae - For both.

Senator Lt Colonel Sir ALBERT GOULD - There may be isolated instances in which honorable senators did say that this measure would have a twofold effect, that it would enable us to get revenue and, at the same time, to burst up estates. The bulk of those who made that statement probably said, " Our object is to burst up big estates, and, incidentally, we shall have the means of getting a fair amount of revenue for the purpose of carrying on the Commonwealth services."

Senator Gardiner - I said that the object was to raise money for defence purposes.

Senator Lt Colonel Sir ALBERT GOULD - The land tax is not ear-marked for those purposes, and I am very glad that it is not. Whatever money is spent on defence should come out of the Consolidated Revenue Fund, because, by that means, every man, however poor or small his contribution to the revenue may be, has contributed his proportion. Some persons say that the big land-holders are interested in this question, but I hold that every man in the country is interested in its defence. There is no man, however poor he may be, who is not vitally interested.

Senator de Largie - Not to the same extent.

Senator Lt Colonel Sir ALBERT GOULD - The country gives a man shelter, and enables him to live under a free Constitution, instead of possibly being placed under the yoke of a foreign Power which would not treat him in anything like the same way.

Senator de Largie - Will you say that a working man in a four-roomed cottage has as large a stake to pay for the defence of the country as a man who occupies a twenty-four-roomed mansion in, say, Sydney ?

Senator Lt Colonel Sir ALBERT GOULD - The poorest man has as much stake in the protection of his life as has the richest man.

Senator de Largie - Of his life, but not of his property.

Senator Lt Colonel Sir ALBERT GOULD - He has an equal interest in the protection of the liberty of his wife and family. The man who lives in a twentyfourroomed mansion has to contribute a great deal more than does a man who lives in a four-roomed cottage. Each contributes proportionately to the revenue. The man in the cottage has a wife and family to look after, while the man in the mansion has not alone his wife and family to look after, but a large number of persons in his employ, and his money enables some men to live comfortably in four-roomed cottages.

Senator Rae - He is not looking after them. They are looking after him.

Senator Lt Colonel Sir ALBERT GOULD - Whatever the employes are doing they are paid for their services. Whatever position we may hold in Australia we are paid for our services. Why do I work in my profession? It is to earn money. I do not feel myself under a compliment to my client; nor does he to me. We all have to work ; and depend upon it, there is just as much happiness and comfort in a man's four-roomed cottage as there often is in a great palace, the owner of which has thousands of pounds to spend on conveniences and luxuries. You can never get away from this fact, that every man in the country has a vital stake in its defence and should contribute his fair proportion towards it.

Senator de Largie - The Defence Act calls on every man to give equal service.

Senator ALBERT GOULD (NEW SOUTH WALES) -Colonel Sir ALBERTGOULD. - It makes no distinction between men; in other words, a man who lives in a mansion is as liable to serve as is a man who resides in a four-roomed cottage, and I have no doubt that one is just as willing to so serve as is the other. Under this Bill, a man, if he is an absentee, is to be penalized because he spends his revenue out of Australia. 1 can understand how this idea of taxing absentees arose. There is an impression that a man who came to this country, and acquired a large number of properties, went abroad to live, and draws his money from here for the purpose of administering to his comfort elsewhere, is not a particularly good citizen. But who are to be treated as absentees under this legislation? Men who may never have been in Australia are to be so taxed. This Bill will tax men who are not solely dependent on Australia for their income, but who have invested money in Australia.

Senator Chataway - At the invitation of Australia.

Senator de Largie - Not in every instance. I know some absentees who, in the early days, did very well here, and then cleared out.

Senator Lt Colonel Sir ALBERT GOULD .- That is not the case with the bulk of these persons. For years, we sought to attract as much foreign capital as possible for the purpose of opening up and developing the country. We did not borrow money from persons at the other end of the world for the pleasure of simply taking it and giving them interest, but for the purpose of opening up the country. What would have been the position of Australia to-day if we had never borrowed money ?

Senator de Largie - Is the borrowed money invested in land?

Senator Lt Colonel Sir ALBERT GOULD - We borrowed £250,000,000 for the purpose of opening up and developing the country.

Senator E J RUSSELL (VICTORIA) - How much have we sent out in interest?

Senator Lt Colonel Sir ALBERT GOULD - I suppose that on an average we have sent out 4 per cent.

Senator E J RUSSELL (VICTORIA) - We have sent out more than we brought in.

Sitting suspended from 6.30 to 8 p.m.

Senator Lt Colonel Sir ALBERT GOULD - I have said that the money introduced to develop Australia has been the very life's blood of the country. I have mentioned that some £250,000,000 have been advanced to the State Governments for the purpose of carrying out public works, the most important of which are the railways extending throughout the different States. This railway construction has assisted materially to develop Australia. With our limited population and limited monetary resources it would have been quite impossible for us to carry out these great works, and the fact that most of the railway systems of the States are now paying concerns is an evidence of the great value they have been in the opening up of the country. I may be allowed to say in passing that I think the State Parliaments would adopt a wise course if they decided upon railway extension in advance of settlement in good country suitable for settlement. Hitherto the policy followed in Australia has been to ask whether a railway will pay before it has been decided to construct it. A very different policy has been followed in the United States, Canada, Argentine, and in almost every other country, which, during the last half-century, has been progressive. The policy followed in those countries has been to push out railways in advance of settlement, and thus make provision for the introduction of population and the settlement of people on Crown lands. There are vast areas of Crown lands in Australia on which, given facilities of communication, people might be settled under conditions which would enable them to make excellent homes, and do well for themselves. The greater portion of the £250,000,000, to which I have referred, belongs to people who made their capital elsewhere, and looking round for investments, regarded the Colonies of Great Britain as affording the best security for their purpose.

Senator Givens - The Bill does not propose to tax those investments.

Senator Lt Colonel Sir ALBERT GOULD - I am quite aware of that, but I remind the honorable senator that there has also been introduced a very large amount of private capital which has been devoted to private purposes, and the Bill does propose to tax that capital.

Senator Givens - Do not the British Government tax Australians who have invested capital in England, and do they not tax money invested in Australia by companies registered in England?

Senator Lt Colonel Sir ALBERT GOULD - A company registered in England may legitimately be made liable to British taxation. A company registered in Australia is, presumably, an Australian company, and should be treated as such. I do not propose to defend the taxation policy of Great Britain just now, and if it were necessary for honorable senators to discuss that policy seriously on this Bill, it would be a long time before we could get through with the second reading. Dealing with the amount of capital introduced into Australia I may say that I have here the latest publication of Coghlan's statistical account of Australia and New Zealand. It is dated 1903-4, and I regret that I have been unable to get later information of this character, although I believe some is available. At page 520 of this work, speaking of the indebtedness of the States of Australia to Great Britain, I find the statement made -

At the opening of 1871, these States stood indebted to Great Britain as follows : -

On account of State and municipalities, £26,520,000.

New Zealand, £7,842,000.

Private investments in 1871 represent £33,090,000.

From 1871 to 1903, the increased indebtedness on account of State and municipalities was £170,000,000, and on private investments £114,000,000. In the middle of 1904, the indebtedness of Australia to British and foreign creditors stood as follows : -

On account of State, £188,345,000.

On account of municipalities, £8,221,000.

On account of private investments, £147,372,000.

The figures just given are irrespective of the amount brought by persons taking up their abode in Australia. The amount of such money is very considerable as will presently appear.

A statement of the amount of money introduced in that way is given later, but I do not propose to refer to that, because those who bring money into the country and reside here participate in the advantages, and should be subject to the disadvantages, common to every citizen of the Commonwealth. In the middle of 1904 no less than £147,000,000 of outside capital was then invested in Australia on private investments. The greater portion, if not the whole, of this money came from Great Britain. We are asked in this Bill to impose taxation upon" the owners of that capital in excess of the taxation which they would have to bear if they were residents of Australia. I wish honorable senators to realize that Australia requires not only population from other parts of the world, but as much capital as we can induce people outside of this country to invest in it. We should never have attained the position we occupy to-day had it not been for the large amount borrowed by State Governments and private individuals from the owners of capital abroad.

Senator Givens - How much gold have we sent out of the country?

Senator Lt Colonel Sir ALBERT GOULD - I do not know that that is a very pertinent question, but I may say that we have received something in exchange for all the gold we have sent out of this country. Though Australia was opened for settlement over 100 years ago we have now less than 5,000,000 of a population, and out of our own resources we should have been quite unable to open up and develop Australia as it has been opened up and developed since it was first settled. Without the assistance of still further outside capital and a largely increased population, we cannot hope to make Australia the great country which we all believe it is destined to become. We all recognise that we cannot hold this country for ourselves or Great Britain, and cannot expect that it will continue to be a White Australia, if we are not supplied not only with population, but with capital from outside sources. But this Bill proposes to penalize every man who sends capital to Australia for investment.

Senator Pearce - Only one form of investment.

Senator Lt Colonel Sir ALBERT GOULD .- That is perfectly true.

Senator SAYERS (QUEENSLAND) - How long will that last?

Senator Lt Colonel Sir ALBERT GOULD - Just so. Outsiders will consider our legislation as an indication of what we are likely to do in the future. Although I am unable to give particulars of the amount of foreign capital invested in Australia at the present time, I may say that a short time ago I read an article which appeared in one of the financial reviews published in Great Britain in which a reference was made to the amount of money sent from Great Britain to Canada, Argentine, Australia, New Zealand, and one or two other countries. I cannot recollect the exact figures quoted, but I remember being struck with the fact that during the period of twelve months, under review, the amount sent to Australia was very much smaller than the amount sent to either the Argentine or Canada.

Senator Givens - Those countries are poorer thou Australia and need the money more.

Senator Lt Colonel Sir ALBERT GOULD - Argentine is a country of immense resources, with a much larger' and more rapidly increasing population than that of Australia. Sydney and Melbourne have each something like 600,000 people, but in Buenos Ayres there are over 1,000,000 people at the present time. Whatever may be the condition of Argentine, we know that large numbers of people are going to that country and good British money is being sent there for investment. We are accustomed to regard Australia as a far better country for the intending settler than is Canada. We have a better climate and generally better conditions, whilst freights to the Old Country from Australia have latterly been so much reduced as to place the settler here almost upon an equality with the settler in Canada, particularly where the latter has to transport his produce over a great length of railway. I want honorable senators to realize that it is a suicidal policy to penalize any form of industry or investment into which people outside are willing to put their capital. I do not ask that people outside who have investments in Australia should not pay a fair share towards the cost of government in this country. I think that they should be asked to pay what our own people are asked to pay, but no more.

Senator Givens - Our own people have to pay indirect taxation, which the absentee' escapes.

Senator Lt Colonel Sir ALBERT GOULD - The absentee must pay indirect taxation in the country in which he lives.

Senator Givens - We get no benefit from that.

Senator Lt Colonel Sir ALBERT GOULD - Will the absentee invest his money in Australia if he can invest it to greater advantage in the Argentine or in Canada? Certainly not. He will invest it where he can obtain the best return from it.

Senator Givens - The absentees have done very well out of Australia.

Senator Lt Colonel Sir ALBERT GOULD - They have; and I hope that they will continue to do so, because while they are doing well, Australia will also be doing well. I have always regarded this form of taxation on absentees as a most undesirable one, and one which is calculated to inflict injury upon the country. If we possessed a teeming population, the position would be entirely different. But ive have a very sparse population in a country which is capable of accomplishing great things. Yet one of the first acts of the present Government is to penalize the individual who wishes to assist us to develop our resources, while at the same time assisting himself. The Vice-President of the Executive Council described this Bill as one of the most complete pieces of political machinery which could be devised, and he added that the Government would not permit any amendments to be inserted in it.

Senator McGregor - I did not say that.

Senator Lt Colonel Sir ALBERT GOULD - That is practically what the Vice-President of the Executive Council said. At any rate, that is what the newspaper reports, and, indeed, the Hansard report, conveyed to my mind. He said that he intended to resist any amendment of the Bill.

Senator McGregor - Any amendment relating to the principle which is embodied in it.

Senator Lt Colonel Sir ALBERT GOULD - I am very glad to hear that the Vice-President of the -Executive Council is prepared to accept amendments upon matters of detail, thus following the example of his colleagues in another Chamber. Their action proved very much to the advantage of the Bill. I hope the VicePresident of the Executive Council will realize that this measure is by no means perfect, even now. I remind him that in another place the Government experienced considerable difficulty in dealing with the taxation of leases. There are innumerable instances in which land has been let for a small ground rent, the lessees have afterwards sublet, and the sub-lessees have again sublet. The New South Wales Parliament experienced a similar difficulty when it was dealing with land taxation. There, the position presented such a maze that special provision had- to be made giving to the Commissioner of Taxes plenary powers. Another provision in the measure which will require very careful consideration is clause 64, which relates to cases of hardship. That clause reads - (1.) In any case where it is shown to the satisfaction of the Commissioner that a taxpayer liable to pay land tax has become bankrupt or insolvent, or has suffered such a loss that the exaction of the full amount of tax will entail serious hardship, a Board consisting of the Commissioner, the Secretary to the Treasury, and the Comptroller-General of Customs, may release such taxpayer wholly or in part from his liability, and the Commissioner may make such entries and alterations in the assessment roll as are necessary for that purpose. (2.) The Commissioner shall be the Chairman of the Board, and the decision of the majority shall prevail. (3.) The Minister shall cause to be laid before both Houses of Parliament as soon as may be after the close of the financial year a full statement of all cases in which, and the grounds on which, liability has been so released.

That is a very dangerous power to place in the hands of any person. But I dare say that the Government felt that many difficulties will be encountered in administering theAct. Infinite difficulties will be experienced in its administration, apart from cases of hardship. For instance, some lands have been leased for long periods at very small ground rentals, and these persons - asI have already pointed out - have leased to others, who in turn have again sub-let.

Senator McGregor - There are provisions in the Bill dealing with such cases.

Senator Lt Colonel Sir ALBERT GOULD - But they are entirely inadequate. In saying that,I am not merely giving utterance to my own opinion, but to the written opinion of one of the best conveyancing lawyers in Sydney. Clause 64, I repeat, provides for the release of a taxpayer from the payment of the tax in case of hardship. If a land-owner becomes bankrupt or insolvent, he loses the whole of his property, subject to such liabilities as exist upon it. But if the tax were made a charge upon the land-

Senator Givens - The clause will pro vide relief to his creditors.

Senator Lt Colonel Sir ALBERT GOULD - But it will afford no relief to the bankrupt or insolvent taxpayer. The debtor, of course, gets his relief as soon as he enters the Bankruptcy Court, and his estate is sequestrated. But why should we leave if to a lawyerto discover that the payment of a debt clue by a bankrupt to his creditors does not release him of his indebtedness to the Crown?

Senator Givens - If the Crown is a creditor, it should share in his estate in common with other creditors.

Senator Sir Josiah Symon - The Crown usually takes the lion's share.

Senator Lt Colonel Sir ALBERT GOULD .- Yes; the theory is that the Crown has first claim upon an insolvent's estate, if he is in any way indebted to it. I would also point out that there are properties which are mortgaged in the way that has been pointed out by two or three senators who have cited typical cases.

Senator McGregor - The honorable senator means ridiculous cases.

Senator Lt Colonel Sir ALBERT GOULD .- The cases quoted by Senator Cameron yesterday-

Senator Pearce - One instance was that of a mortgage of £12,000 on a property valued at £14,000. Is not that a ridiculous case?

Senator Lt Colonel Sir ALBERT GOULD - It may be in the honorable senator's opinion ; but we must bear in mind that properties often materially depreciate in value. Take the case of a man who obtains a loan on his property to the extent of two-thirds of its value. Let us assume that its improved value is £100,000, and that he raises a loan of £60,000 upon it. Let us further suppose that the improvements are worth £10,000. That man will receive no exemption from the payment of the tax in regard to the £60,000 mortgage upon his land.

Senator Sir Josiah Symon - To the extent of that £60,000 he is not the owner of the land.

Senator Lt Colonel Sir ALBERT GOULD - Exactly. He has a margin of £40,000 upon which to come and go. That is a transaction upon which any business man might legitimately embark. With good seasons he would have every prospect of materially reducing his mortgage and of becoming worth much more than £40,000. But in this Bill the Government say to him, " We are not only going to tax you on the £60,000 mortgage on your property, but we intend to charge you 6d. in the £1 upon the remaining £40,000." Of course, it may be urged that if such a man had been content to purchase a property for £40,000, he would have had a smaller amount of taxation to pay, and the property would have been his own absolutely. That is perfectly true. But there is hardly a man in the country who is not desirous of being progressive. I should consider it very good business if I could obtain a property worth £100,000 by paying £40,000 down upon it and by borrowing the remaining £60,000. But when this tax is levied upon such a property it will cut down the value of the equity of redemption to such an extent that it will be extremely difficult for a man to struggle through and make ends meet. While we experience splendid seasons, and whilst good prices are maintained, he may succeed. But the history of Australia teaches us that, owing to droughts, floods, and fires, our settlers experience reverses, so that it would be impossible for him to recover himself. If we desire to burst up big estates or to levy a land tax for revenue purposes, we must take all these things into consideration. The Government should make provision so that these people shall not be penalized merely because they have shown a little more enterprise than -have the ordinary citizens whom we meet every day. If such an amendment as I have outlined were made, I am sure that it would be acceptable to the people of the country, and we should, to a large extent, get rid of those complaints about the harshness of the tax and the unjust incidence of it of which we have heard so much. No sophistry can justify the Government in treating some landholders as they will be treated under this Bill. If a tax is to be levied, it should be proportioned to a man's means, and not to his poverty, as in this case. When we get into Committee the Government will find that this is not so perfect a piece of legislation as the Vice-President of the Executive Council claimed. It is not necessary for me to go through other portions of the Bill in order to point out inequities and the necessity for amendments. There are some clauses in it that are almost as difficult to understand as a Chinese puzzle. I remember reading that complaints were made by taxpayers in England of their inability to understand what was demanded from them under an Act recently passed by the Imperial Parliament. They were told that they could get whatever information they desired from the Government offices. But when they went there, they found that the Government officials were just as much puzzled as themselves. That measure was condemned in one of the English newspapers as excessive taxation levied by an unscrupulous party upon their political opponents. I do not want to have it said that legislation passed by this Parliament is deserving of such aharacteriza tion. Probably there is hardly a man in the whole of this Parliament who will be materially affected by the Bill.

Senator Givens - What about Senator Cameron ?

Senator Pearce - What about King O'Malley?

Senator Lt.-Colonel Sir ALBERT

GOULD. - I- am quite content that Senator Pearce shall explain the position of his colleague, the Minister of Home Affairs. I am afraid, however, that that gentleman will not be prepared to tell us the value of his estates.

Senator McGregor - It is something under £500,000.

Senator Needham - King O'Malley is quite prepared to pay whatever taxation is due from him.

Senator Lt Colonel Sir ALBERT GOULD - We cannot get away from the fact that, whatever may be the effect of the tax, it is going to be levied upon a limited number of persons, very few of whom are directly represented in Parliament at present. There may be a few members of this Parliament who will feel the effects of it, but, nevertheless, it may be described, on the whole, as an attempt by the "havenots " to get at the " haves."

Senator Givens - We are equalizing things a bit.

Senator Lt Colonel Sir ALBERT GOULD - I have heard certain remarks that show the feeling actuating the minds of some people on this subject. They say, ' While we have the chance, we are going to take the wealth away from those who have it." Remarks of that kind show the bitterness which exists amongst some of the supporters of the Bill, both in Parliament and outside. The Opposition are fighting against the injustices and the inequities created by the measure. We say that it is a distinct blow at the capital which is necessary to enable Australia to develop her resources. It bears upon the face of it the appearance of a class tax. The Ministerial supporters talk about their mandate. What was their mandate, and what proportion of the electors gave it to them? Senator Walker has read statistics taken from official documents, showing that, as far as the other House is concerned, the men in control of affairs there represent a less number of votes than were recorded for their opponents. I do not say that the Government supporters obtained a less number of votes than the Liberal candidates, but they, nevertheless, polled less than half the total number of votes recorded. In the Senate we find that a bare majority of votes was given for the party now in power. When honorable senators talk about their mandate from the country one might fancy that Australia had been swept from end to end by a wave of enthusiasm for a measure of this character.

Senator Pearce - So it was.

Senator Givens - Which ought to rule, the minority or the majority?

Senator Lt Colonel Sir ALBERT GOULD - Under our system of government the majority must rule, but, at the same time, it is worth while to point out that under that system 100,000 people may return the majority, whilst 99,000 may vote on the other side; and there is no reason why a majority of that kind should do a gross act of injustice to their opponents.

Senator Givens - This Bill does an act of tardy justice.

SenatorLt.-Colonel Sir ALBERT GOULD. - The Bill is a trick upon the Constitution. Its supporters say that they want to break up the big estates, but they know that under the Constitution they have no right to interfere with those estates. The proper course would have been to appeal to the country to enable an alteration to be made in the Constitution.

Senator Givens - The bursting-up is merely incidental to the Bill.

Senator Lt Colonel Sir ALBERT GOULD - Originally, we were told that the taxation aspect of this policy was incidental. Now we are informed that the reverse is the case, and that the Bill is intended for taxation purposes.

Senator Givens - We want more revenue ; and are we to derive that from the poor or from the rich?

Senator Lt Colonel Sir ALBERT GOULD .- People should pay according to their ability, but the rich man ought to receive an equal measure of justice with the poor man. I do not propose to detain honorable senators at greater length. I have had an opportunity of pointing out the stand-point from which . I view this matter. In order that I may not be misunderstood I reiterate that I am not an opponent of land taxation if it be necessary for the purpose of obtaining money for the affairs of the country. But there is no need to manufacture expenditure in order to justify a tax, as I consider has, to some extent, been done. I say, moreover, that the Commonwealth should not resort to direct taxation unless compelled to do so in order to carry on its operations. The original intention of the founders of the Constitution was that the indirect taxation system should be absolutely within the power of the Commonwealth, and that we should not superadd to it a system of direct taxation, resort to which must be to the detriment of the States. When we resort to taxation such as is now proposed, we are going to the very extreme, and are virtually withdrawing from the States the means which lie open to them of deriving a reasonable amount of income from land taxation. I also complain that no reliable estimate has been furnished to us of the probable results of the tax. In New South Wales a tax of1d. in the £1 on land realized something like £400,000 a year. A Commonwealth tax, ranging up to 6d. in the £1, will probably realize a much larger sum than the Government have estimated.

Senator Rae - The honorable senator must recollect that, under the New South Wales tax, there was a different exemption.

Senator Lt Colonel Sir ALBERT GOULD - No doubt that makes a considerable difference; but it is nevertheless to be regretted that the Government did not furnish us with a better estimate of the amount of money to be realized. No matter how difficult or complicated a tax may be, a Government owes it, not only to Parliament, but to the country, to explain how it has arrived at its estimate. But, in this case, we have been furnished with no explanation. There are shire councils,or similar bodies, in existence from one end of Australia to the other, and theirrevenues are derived from the unimproved value of land. There would not have been much difficulty, if an appeal had been made to the State Governments, in obtaining information as to how much money was being realized by those local governing bodies. The. calculation would have been comparatively easy, because the Government could easily have prepared forms upon which could be shown how much land in the areas governed by these local bodies was held in areas under £5,000 in value. If an inquiry of that kind had been made, we should have had a somewhat accurate idea of the revenue that will probablybe raised. As originally introduced to Parliament the Bill was exceedingly crude, requiring a tremendous amount of licking into shape. It has received that attention, thanks largely to the Opposition, in another place. If it has been fashioned into a working measure, that is largely due to the fact that a patriotic Opposition elsewhere endeavoured - and I arn glad lo say successfully - to make very large and important amendments in it.

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