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Tuesday, 25 October 1910

Senator LYNCH (Western Australia) . - I wish to say a word or two before this Bill goes into Committee. I did not intend to speak at this stage, but since the debate has taken such a peculiar course, some effort is invited from a supporter of the Bill in order to set right the benighted minds of the members of the Opposition. It is rather strange at this lime of day to find the principle of a tax on land values challenged, and such a strenuous effort made to defeat this proposal. It is quite plain that ever since the Labour party came into existence in the politics of Australia, if there was one thing more than another which it took special pains to place before its supporters, it was its determination to impose an effective tax on land values. On the occasion of the last election we had even the assistance of our opponents.

Senator Vardon - What does the honorable senator call an effective tax?

Senator LYNCH - Such a tax as would discourage the holding of large areas, which hamper settlement and keep the country from absorbing that class and that extent of population which it should have. It has been stated frequently during the course of the debate that the result of 13th April did not give the Government a warrant to introduce this legislation. But it is plain that our political enemies never failed to impress upon the electors, in every division in the Commonwealth, that if the Labour party were returned to power they would immediately impose a tax on land values, and encroach upon State Rights. We ought to render thanks for the voluntary efforts made by our opponents in coming to our assistance and making our intentions plain. I can recall the efforts that they made amongst the farmers. The honorable senator who has just sat down moved about amongst that class of the community, and especially impressed upon them the need for rejecting the Labour party's candidates. In company with his leader, Senator McColl took occasion to tell the farmers that he hoped, through the happy union of the farmers and of the women of the district in which he was speaking, that the Labour party would get its quietus. Mr. Joseph Cook was also present on that occasion, and he expressed the hope that the farmers would stand the Fusion upon its feet, and keep it there for a long time. What happened really, however, was that die farmers stood the Fusion on its head, and determined to keep it in that uncomfortable attitude for a long time. The Labour party took every opportunity of making its position clear. In that effort we had the unstinted assistance of the Fusion party, as well as of the powerful press behind their backs. As I have said, I am thankful for the efforts which those people made to back up our position, so that the electors might know what we meant, and how far we intended to go. The electors knew perfectly well that this proposal was an integral part of our policy, and would be pressed to the front if we secured a majority. They knew that one of our first measures would be a Bill to impose a tax on land values, which would cause the lands of Australia to be thrown open to an extent unknown in the past. This proposal is made with the object of carrying out that policy. It has a two-fold object, and has had for a long time.

Senator Vardon - No; a twofold object for a very short time.

Senator LYNCH - The object of the members of the Labour party in every State Parliament in Australia, as well as in the Federal Parliament, has been to raise revenue by means of a land tax, and at the same time to effect by the same means the breaking up of large estates. The attitude that we have persistently maintained on the floor of this chamber goes to show that we intended to raise taxation by means other than through the Customs House. The record of our voting proves that we endeavoured to cut down to nothing any attempt to raise revenue through the Customs House, and that our ulterior object was to raise revenue from the land, which up to the present has escaped bearing more than a mere moiety of the taxation raised throughout the Commonwealth.

Senator Vardon - Does the honorable senator think that a fair moiety is onehalf the value of land?

Senator LYNCH - I am talking about the share that land taxation bears in the total taxation of the country. I say that it amounts to a mere moiety of the whole, having regard to the value of land. The primary object of this proposal, however, is to insure that there shall be a supply of land at reasonable prices in every State of the Commonwealth.

Senator Vardon - There is very little land available in Western Australia, is there ?

Senator LYNCH - There is more land available in Western Australia, in proportion to its size, than in any other State of the group, but there is also in that young State an indication of a need for some such remedy as this Bill applies. Even in Western Australia, as I shall show later on, we are sorely in need - though not to so large an extent as in the eastern States - of the remedy which this Bill proposes to apply. I will show very effectively before I have finished that such is the case in Western Australia. That problem necessarily involves unimproved land values taxa tion, because we are unable to provide land for settlement by any other means. Of course, other devices, such as closer settlement policies, have been resorted to by the States, relying largely upon the private efforts of the large land-owners, but our experience has clearly shown that those devices have proved hopelessly inadequate. Consequently, the time has arrived in the history of our country when some effective remedy needs to be applied in order to provide land for our land seekers. I am not forgetting the efforts that have been made by State Governments to preserve something like an even balance in the distribution of the public estate. In nearly every other State Acts of Parliament have been passed embodying provisions limiting the area which a person could acquire from the Crown. But at the same time no steps were taken to prevent large estates being acquired by other means. The result has been that, while we have been endeavouring to shut the stable door in one direction, the horses have been simply streaming out at the other end of the stable. The folly of inserting restrictive provisions of the kind I have mentioned in the State Acts, and at the same time not destroying the means by which" land can be accumulated in the hands of a few, is like the folly of a man passing along a country road and carefully shutting the gates behind him, whilst at the same time the fences are broken down on every side. Strong objection has been taken to the provisions of this Bill for the taxing of city lands. It has already been acknowledged that the aim of the Labour party is to secure for the community some portion of the increased value which land has received through the pressure of population. Of course, it is not proposed by this Bill to burst up city properties. "No one would seriously think of such a thing. What is intended is that those blocks of land within our large cities and suburbs that have increased so enormously in value, shall be called upon to hand back a portion of that added value which the expenditure of public money to meet the necessities of the people has conferred.

Senator Millen - Is there any evidence that that added value is being secured by means of this Bill?

Senator LYNCH - I contend that the Bill represents an effective step in that direction. The honorable senator knows perfectly well that the Constitution would not permit any difference to be made between city and country lands.

Senator Millen - That is not what I mean.

Senator LYNCH - The honorable senator is well acquainted with the Constitution, and he knows that it would not permit us to differentiate between city and country lands.

Senator Millen - The honorable senator's contention is that the unearned increment can be taken by the State. If so, there should be no exemption under this Bill.

Senator LYNCH - That is so, and there would not be if it were not for the Constitution.

Senator Millen - The Constitution does not enforce a £5,000 exemption.

Senator LYNCH - Public policy does.

Senator Millen - The necessity for getting votes does.

Senator LYNCH - Public policy requires that we should not tax the man with less than £5,000 worth of land. If we had proposed to tax land right down to £1 worth, Senator Millen would have been the first to raise a cry about the iniquity of the Labour party in taxing the man who was putting his land to the best possible use. Now that we propose to draw the line so as to exempt those who are putting the land they hold to its best use, the honorable senator is throwing all sorts of obstacles in our way. We desire that land which is put to its best use shall not be taxed, and that those who hold land in large areas, and prevent its occupation by the people, shall be obliged to return a portion of the increase of value given to it by public expenditure, and the increase of population. I was about to cite an example, the fairness of which Senator Millen, as an old land taxer, must acknowledge. Some time ago a block of land, an acre in extent, was sold in Melbourne, representing part of the estate of the late Mr. Watson. It realized something like £600,000. Will Senator Millen, or any other member of the Senate, contend that, since the establishment of Melbourne, the owner of that land added so much to the value of it by any efforts of his own? Is it not fair that the people should obtain a return of some of the enormous additional value given to that acre of land? It should be remembered that we have not yet reached the ultimate value of lands in our great cities. We know that in London land is valued at as high as £1,000,000 per acre, and there is no reason why, in the course of time, land in Melbourne and in Sydney should not be valued at as high a figure.

Will honorable senators opposite contend that the enormous profit that is being derived by the owners of land who took up city ^ areas in the past, and which must continue to increase as the population increases, is not a fair subject of taxation?

Senator Vardon - No one denies that.

Senator LYNCH - Then, why do not honorable senators agree to vote for the Bill ? Why are they wasting so much of the time of the Senate in pointing out the iniquity of this measure?

Senator Millen - Why does not the honorable senator take his own medicine?

Senator LYNCH - I am prepared to do so. Consistent with public policy, and in view of the constitutional danger, I do not intend to advocate* a lowering of the exemption which would prevent the man who is prepared to make the best use of land from being given an opportunity to do so. It has been said that this land tax is a class tax. I am here to acknowledge that it is a class tax.

Senator Vardon - Hear, hear; that is honest.

Senator LYNCH - It would otherwise be of no use at all.

Senator Millen - It would not serve its purpose so far as the Labour party is concerned.

Senator LYNCH - I admit that it is a class tax, but the country has been waiting for years for the imposition of a tax upon the class who hold lands in large areas, and are not putting them to their best use. They are holding these lands away from the people, waiting until the pressure of earth-hunger gives them a value at which they will be satisfied to let them go. This is the class at whom this measure is aimed, and if it does not hit them hard, it will be a very faulty measure indeed. I have some sympathy for those who have come honestly by the land they hold.

Senator Vardon - Did not the man who gave £600,000 for the land the honorable senator has just mentioned, come by it honestly ?

Senator LYNCH - Certainly !

Senator Vardon - And yet the honorable senator would now propose to take half the value of it away from him.

Senator LYNCH - His case is very different from that of people who own land in the country districts. In a vast number of cases large areas of country lands have been piled up under a system of legalized robbery of the public. This has continued whilst large numbers of people have been looking vainly for land in accessible places upon which to settle. Those who have been engaged in the piling up of these large estates have been guilty of nothing short of the confiscation of land, and now when an effort is made to compel them to disgorge a little of the unearned value added to the land, which they acquired by legalized plunder, honorable senators opposite are opposing a measure the introduction of which they should applaud. If I am asked to substantiate anything I have said in this connexion with respect to the legalized plundering that has been going on, by which squatters and large land-holders have been enabled to acquite enormous areas in fee simple, I would refer honorable senators to the statements made by a man of recognised political standing who is still a member of the Federal Parliament. In a pamphlet which was circulated some years ago, this honorable gentleman, specially referring to the state of affairs in Victoria, and a Bill passed by the Victorian Parliament to insure the parcelling out of land, said -

The main objections to this scheme were raised by Messrs. Heales, Brooke, Wilson Gray, and Berry. It was contended that the Bill was framed essentially in the interest of the squatters and wealthy classes, and that a few liberal clauses were thrown in as a sop to the farmers. Whilst the people expected that the squatting tenure was to terminate in 1862, and that thereafter the whole of the Crown lands of the Colony would be thrown open for free pasturage, the Bill proposed to give to the squatters what was virtually a perpetuity of title. If the system was to be continued the runs should have been subdivided and the rent determined by public competition, and not by arbitration as the measure contemplated. Farmers were to buy small allotments whilst squatters were to rent large sections, whereas, the two pursuits - agriculture and pasture - should have been united ; at any rate, one class of men should not be allowed such a great advantage over another. Another objection was that if agricultural lands were not selected within one year after proclamation, they might be put up for sale by auction. According to this arrangement land was only available for free selection during one year; the result would be to enable squatters to buy up whole territories. As to the provision that one person could not select more than 640 acres in a year, that was absolutely futile, as there was nothing to prevent the owner of one allotment from mortgaging it to another, as was done under the Nicholson Act. . . . The Bill was passed through the Assembly, and, strange to relate, received the assent of the Council without amendment, and became law on 18th June, 1862.

The Legislative Council, which is supposed to prevent hasty legislation, rushed this Bill through without a moment's delay.

Senator Stewart - From whom is the honorable senator quoting?

Senator LYNCH - I proposed to - say later, but it is of no use to keep honorable senators in suspense. I am quoting from a pamphlet written by Sir John Quick, who was a member of the late Fusion Government, and whose views on the subject may be regarded with respect by both friend and enemy. He goes on to say -

This circumstance of itself was extremely suspicious. It can only be accounted for by the supposition that the nine years' licences were baits too tempting to the squatting majority of the Upper House, and that they had full confidence that the Act, as it had passed the Assembly, could be worked in the interest of their friends. With the passage of this measure two great political organizations became defunct. The Convention party was dissolved, Mr. Wilson Gray leaving Victoria to seek his fortunes in New Zealand. The Victorian Association, more popularly known as the bribing confederacy of the White Hart, adjourned sine die. Their work was done, and well done, the £30,000 spent in debauching constituencies was, for the purposes of the Association, well invested ; the gold of the squatters exercised a more potent influence than the agitation of the Convention or the thunders of the Liberal press.

Senator Vardon - What is the date of the pamphlet?

Senator LYNCH - So far as I can see, it is not dated, but the reference is to a Bill which was passed in 1862. The writer proceeds to deal with this very interesting subject -

The Duffy Land Act thus became an absolute wreck of legislation. Numerous swindles that were perpetrated under it will "never be forgotten or forgiven. Those swindles are still called to remembrance with sorrow and indignation by politicians who know with what wholesale fraud and audacious perjury the people of the Colony and unborn generations were deliberately robbed of nearly one million acres of land, constituting the garden of Victoria. Friends and foes of the O'Shannassy Ministry admitted that the Land Act was a disastrous failure, if not a political crime. The Argus declared that the settlement of the country was not advanced one step by the sales effected, that the stability of the public revenue was seriously impaired, and that immigrants when they arrived hereafter would only come to find the best of the land already alienated. The Ballarat Star expressed its opinion that the lands of the Colony were being locke. up more effectually than ever. " The speculators," said that journal (12th September, 1862), "have high o'erleaped the bounds; they have burst through Duffy's securities, and have, by their agents, obtained possession of a very large portion of the agricultural lands thrown open for selection. The ^22,000 taken at the land sale here on Wednesday were in a very small portion paid by intending cultivators. The 1,600 acres that were alienated in one day at the Land Office have not been purchased by those who mean to use them for themselves, but in the larger number of cases by the agents of squatters who have found ready tools to use for their work." On the 13th of the same month, the Star said - " The great land swindle goes on prosperously.

Dummies are a positive drug in the market, and the squatters and their agents carry everything before them." The Bendigo Advertiser (15th September, 1862), declared - " The Land Act is a mockery, a delusion, and a snare. The wrong men have got the greater part of the first land thrown open, and if the system of gazetting agricultural areas continue after the same prodigal fashion he will be a fortunate farmer who draws an allotment in the future."

And so on, ending up with a general condemnation of the effort then made to parcel out the public lands of Victoria. I remind honorable senators opposite that these are the views expressed by one of their late leaders.

Senator Millen - Because some land was not obtained honestly, that is no justification for unfairly taxing land that has been obtained honestly.

Senator LYNCH - It confirms my statement that the parcelling out of lands in this and the other States was carried out by most questionable and discreditable means, and that squatters and their agents strained the law in every way in order to secure possession of land. We are certainly justified in demanding by taxation a portion of the increased value added to those lands. This is the final word of Sir John Quick on the subject -

The advantages of a judicious system of leasing the public lands would have been very great. The State would have retained the national domain as a lasting and unassailable, unpledgable asset which would have gone on increasing in value from year to year.

That was at a time when the honorable gentleman appeared to approve of the present day policy of the Labour party. He goes on to say -

Instead of a few individuals being enriched by the gradual increase in the value of land, the whole community would have been benefited. The rent of land would have been a permanent source of revenue. The vast sum of money sunk in the purchase of freeholds would have been available for the employment of labour and the improvement of waste land. The State would have remained landlord of the soil, and could have applied every acre of it to the best purposes compatible with national interests and national prosperity. The wealthy lower orders would not then have been able to plunder the working classes of their birthright by the despicable aid of fraud, perjury, and subornation of perjury.

What a monstrous and barbaric law must that be under which the splendid land between Melbourne and Sunbury and between Melbourne and Geelong capable of giving homes and existence to a teeming population, is locked up in pastoral solitudes, whilst the farmers have to seek a precarious livelihood in the hot and rainless regions of the north-western plains? Would it not be better to grow sheep in the remote parts of the Colony and encourage agriculture near the sea-board and adjacent to large centres of population? It is impossible to contemplate such enormities and anomalies as these without agreeing wilh Mr. Higginbotham that the dictum of the French writer that property is robbery is absolutely true in regard to land. . . . The landless portion of the population will, in the distant future, begin to inquire here, as they are now inquiring in England, Ireland, and Scotland, by what title those in possession of land obtained that possession.

Unless the sale of land be suspended, and the further integration of large estates be prevented, either by taxation, or by a law prohibiting the ownership or transmission of land beyond a limited area and value, the time will sooner or later come when the working classes of Victoria will awake to an unpleasant sense of their perilous situation. It is a notorious fact, proved by the history of the world, that oppression and poverty accompany the concentration of wealth and the amassing of grand properties in the hands of monopolists. Landlordism is the curse and ruin of every country in which it becomes predominant. The owner of land can dictate terms to his tenantry, and evict them if they refuse to accept those terms; they must have land or starve. This is the cause of anarchy and murder in Ireland. The landlords of Scotland have expelled their tenant peasantry from their ancient glens in the Highlands, and the homes and haunts of human beings have been converted into sheep runs and deer forests. The pauperism, misery, drunkenness, and crime which abound in England, are traceable to the despotism of land monopoly, and the appropriation by landlords of land which in former times belonged to the labouring classes. No political truth is so grim and startling in the uniformity with which it appears from age to age as this - that landlordism and tenancy are ever associated with the pauperism and degradation of an entire population. And this is the condition towards which our free and glorious Colony of Victoria will drift, unless ils advance in that direction be arrested by the courage and wisdom of her statesmen, assisted by the patriotism and foresight of her inhabitants. Let it not then be said that it is too late to save the remainder, or a portion of the public estate. It may be premature to discuss the question of resumption, except to a limited degree, and in special cases, but stern and determined steps should be adopted to suspend the present process of legalized robbery and confiscation of the land of the whole people.

To the sentiments expressed in that volume by Sir John Quick I am prepared to give an unqualified " Amen." The statistics of New South Wales and Victoria furnish striking examples of the tendency of land to drift into the hands of a few persons, as anybody who chooses to study them will perceive. It is unfortunate that statistics regarding the other States are not available. But the figures in the case of New South Wales and Victoria afford a reliable indication of how the land in those States is at present held, of how cultivation has proceeded, and of the class of holdings in which the greatest progress has been made in the matter of cultivation. In New South Wales I find that since 1880 the agricultural holdings from 16 acres up to 400 acres have increased by only 51 per cent., whereas the holdings of 400 acres upwards have increased by 132 per cent.

Senator Millen - Then the honorable senator makes 400 acres his arbitrary dividing line?

Senator LYNCH - The Leader of the Opposition is at liberty to adopt any arbitrary line that he chooses.

Senator Millen - Then I should get different results.

Senator LYNCH - I am adopting a reasonable standard. I am taking an area which seems to me to represent the limit ^-especially in the coastal districts - of a holding which ought to provide a man with a decent living. I assume that 400 acres is the maximum which can be profitably Worked by an individual, especially in the coastal districts. I find that between 1880 and 1909 the increase in this class of holding - a holding which would be likely to add to our population, and one to which many are attracted by the reason of their small capital - has declined relatively to the increase in the case of larger holdings.

Senator Sayers - It has increased rapidly.

Senator LYNCH - I am sure that Senator Sayers is not satisfied with the rate of increase.

Senator Millen - The reason would be obvious to the honorable senator if he knew anything about the conditions which obtain in New South Wales. Four hundred acres is an absurd basis to adopt.

Senator LYNCH - I may tell Senator Millen that I purchased some land in New South Wales twenty years ago, and that I know sufficient of the extraordinary lack of management of the public estate there to be able to say that the land for which I paid £8 or £9 an acre is to-day worth only £3 or £4 an acre. I am satisfied that if a land tax had been operative at the time of which I speak, it would have prevented many a man who had invested his earnings in land from absolutely losing them.

Senator Millen - We cannot protect the fool from his folly.

Senator LYNCH - It is quite plain that in New South Wales during the past twenty-nine years there has been a very slow rate of progress in the matter of the smaller holdings. The large holdings which do not employ the same proportion of labour have increased three times as rapidly.

Senator Sayers - 1 will explain that matter later on.

Senator LYNCH - I look forward to the operation of this tax to bring about a very necessary change. In New South Wales, the proportion of cultivation in the case of holdings ranging from 1 acre to 30 acres, is 21 per cent., whereas the proportion of cultivation in the case of holdings of 10,000 acres and upwards is only a bare 1 per cent. The records also show that in that State 800 persons and corporations own fully half the land alienated, namely, 50,000,000 acres.

Senator Walker - I beg to call attention to the state of the Senate. [Quorum formed.]

Senator LYNCH - The size of the holdings in New South Wales is another feature of land settlement which does not offer much comfort to any person who studies this subject. Their size has increased from 569 acres in 1880 to 608 acres in 1909. So that, notwithstanding the fluctuations which have occurred, the gradual tendency has been for holdings to grow larger. The percentage of the area under cultivation is only 5 per cent, of the total area alienated. The effect of closer settlement has not been to divide the land into smaller areas, which is the desideratum at which we aim. Rather the tendency has been in the direction of increasing large areas. According to the same authority, the increase in the case of holdings ranging from 1 acre to 400 acres has been .27 per cent. ; in the case of holdings from 400 to 1,000 acres, it has been 86 per cent. ; but in case of holdings of from 1,000 to 10,000 acres, it has been 3.08 per cent. In the Riverina district, which is specially suited for mixed farming-

Senator Fraser - That is all the honorable senator knows about it.

Senator LYNCH - I am prepared to pit by knowledge of farming against that of the honorable senator, notwithstanding his age. I know the Riverina district. I was there quite recently ; and I can say, from my own observation, that it is one of the best portions of New South Wales for mixed farming.

Senator Fraser - Millions of acres in Western Riverina were sold for £1 per acre, and to-day they can be bought for 10s. 6d. per acre.

Senator LYNCH - In the Riverina district, the decrease in the number of holdings of from 1 acre to 400 acres has been even less. According to a statement which has been put before the country by Mr. Watt, the Treasurer of Victoria, land settlement in this State is in an equally deplorable condition. Settlement has run in directions which has made it extremely difficult for the settler to make ends meet.

Senator Fraser - The farmers have made fortunes in the Goulburn Valley and elsewhere.

Senator LYNCH - The large landholders have. But what about the unfortunate settlers who have been driven into the Mallee country? In 1878, the average size of the holdings in Victoria was 338 acres, whereas to-day it is 436 acres. So that thirty years of effort have resulted in an increase in the average size of holdings in this State. In 1887, there were 47,050 holdings in Victoria; and between 1880 and 1909, 5,227,000 acres were alienated. This area was cut up into 16,334 new holdings. Under closer settlement, a further number of 1,295 holdings was added, making a total of 17,629. Thus, to-day, we should naturally expect the agricultural holdings in Victoria to number 64,679 ; whereas they actually total only 56,065. It will thus be seen that, between 1878 and 1909, there has been an actual decline of 8,614 in the number of agricultural holdings in this State. These holdings have been blotted off the face of the landscape by reason of the fact that other areas have been increased in size. I am sure that no senator from Victoria, and least of all Senator Fraser, can hope to extract any comfort from a review of a position of that kind. Although in his own State 8,000 holdings went out of existence during that time, yet he has the extraordinary fortitude to stand up in opposition to a measure which is intended to replace those holdings with their 8,000 occupiers. Under the very system which he has supported, these holdings have been blotted off the landscape, and for years the land has been used for grazing sheep and cattle. Yet he stands up here, and says, " Everything in the garden is lovely, and there is no cause for complaint." If he were animated by a desire to help his State, or this country, he would almost have dropped from exhaustion on the floor rather than allow the Bill to be tampered with, or even criticised, during its passage through the Chamber.

Senator Fraser - That ought to be an eloquent peroration, but the facts are all wrong.

Senator LYNCH - Furthermore, whilst the population of Victoria has increased by 420,000 during that period, the land holders have increased in an inverse ratio.Since 1878, the land-holders have been reduced in number from 5.6 per cent, of the population to 4.5 per cent. Although there has been this decline in the very yeomanry of this young and fertile State, yet the honorable senator comes here, and says that he is satisfied that everything is right, and that the Labour party is rascally in its designs regarding the land. We ought to have this champion on our side to-day. Instead of that, he is defending the party which has monopolized the land in the past, and amassed great wealth. Unfortunate men have been evicted time after time, and sent looking for land, through the operations of this ruthless class of cormorants, who are still ruling, and ruining the destiny of this country. The facts cannot be gainsaid. They stand out like Wilson's Promonotory, whilst this representative of the people " lags superfluous on the stage," and opposes a measure which is intended to replace the 8,000 men who were sent about their business. We have heard a great deal about the evil effects which will flow from the enactment of this measure. Seeing that the records stand out in contradiction, it would seem that honorable senators are deaf to almost all kinds of reasoning when they make such a statement. What has happened in New Zealand? Eighteen years ago, when the Ballance Government introduced a measure which closely resembled this one, we had a similar band of Jeremiahs rising in their places, and predicting that all forms of desolation would take place. True to their principles, which we all admit stands to their credit, the Ballance Government persevered and the measure was passed. What has been the result pf its operation? To what is the position of the Dominion due?

Senator Sayers - To the expenditure of borrowed money.

Senator LYNCH - No.

Senator Fraser - Its position is due to the expenditure of borrowed money, and the development of the frozen meat trade.

Senator LYNCH - I apprehend that Senator Fraser, as well as other opponents of this Bill, will admit that the prosperity of a country may be gauged by its ability to attract to its areas a larger population and maintain the people in greater comfort than can other countries. If that test be applied to New Zealand, what do we find? Since 1892, when a land tax was put in operation, which it was predicted would bring about disastrous effects, the Dominion has succeeded in attracting no less than 107,441 persons. But what has happened since 189 1 - - that is a year longer - in the Commonwealth, which is thirty times as large as New Zealand and possesses like varieties of climate, and infinitely more arable and fertile land? Only 56,697 persons have been attracted to a country in which no taxation of this kind has been in operation.

Senator Sayers - On account of your prohibitory law.

Senator LYNCH - Will honorable senators on the other side look the position squarely in the face, and admit at once that all this talk about the disastrous results to follow in the wake of this legislation is so much moonshine? Contrast the influx of population to New Zealand with the pitiable effort of Australia, where no land tax has been in existence, to increase her population. As regards the effect on land values, I am afraid that the proposed tax will not be heavy enough to effect the desired result. At all events, the experience of New Zealand does not point in that direction. Unfortunately there are no records in the States to show how the unimproved values of land have fluctuated or what were the aggregate values, but in the case of New Zealand we have information. It shows that whereas the unimproved value of land in 1891 was £75,000,000, in 1909 it was £172,000,000. In other words, the unimproved value which is supposed to be very injuriously affected by a land tax, according to honorable senators opposite, increased over 100 per cent, during the period of its operation. Speaking on 3rd December, 1909, Mr. Beaucamp, the chairman of the Bank of New Zealand, made this statement on the subject of land values in the Dominion -

New Zealand has greatly increased her ob',.gations in recent years, and while she is well able to faithfully meet engagements, there is no reason why the people should be handicapped in their work by ridiculously big land values.

In the view of this authority one of the drawbacks to the progress of New Zealand is the ridiculously high land values which, according to our honorable friends opposite, will be so injuriously affected in Australia that we shall hardly be able to recognise them. So much for the experience of New Zealand. I do not think that there is much to be gained by elaborating this subject further than to point out what has taken place in New Zealand with a land tax, as opposed to what has taken place in Australia without such a tax. So far as the size of farms is concerned the tendency in Victoria and New South Wales has been to increase. In Victoria the increase in the size of agricultural holdings has been marked, and in New South Wales the tendency is in the same direction. According to Mulhall, the average size of holdings in Canada which, in point of area, is very much smaller than New South Wales and Victoria, is about 115 acres, while in the United States it is about 120 acres. The tendency in the United States and Canada has been in the direction of a gradual reduction in size, whilst in New South Wales and Victoria, where land settlement has been allowed to go unchecked and without any form of adequate regulation, the tendency has been in the opposite direction. Where has the population gone to in the meantime? It has drifted into the cities. At present our cities are congested with population which has been driven from the country ; with the natural result that wages have been affected, and rents raised, to the injury of the previous population. In 1871 Sydney contained 27 per cent, of the population of New South Wales, and, in 1908, 37 per cent.; while in 187 1, Melbourne, contained 28 per cent, of the population of Victoria, and in 1908, 53 per cent., the increase being 37 per cent, in the case of Sydney and 43 per cent, in the case of Melbourne. In 187 1 Brisbane contained 12 per cent, of the population of Queensland, and in 1908 24 per cent. In 1871 Adelaide contained 23 per cent, of the population of South Australia, and in 1908 44 per cent. The increase in this period of 37 years affords a very sad indication of the way in which settlement has proceeded in Australia. It shows very plainly that the population, instead of finding an outlet and a livelihood in the healthier parts of the country, has been forced into the cities to produce great misery and to disadvantage people already there. Professor F. W. Newman, who was, as honorable senators know, a political economist of very high standing, has something very interesting to say on this question. In one of his works he wrote -

If the trades unions could but open their eyes to facts they would see that the constant pouring of population out of the country into the towns (which become sinks of misery) is their great grievance. This not only affords cheaper labour to employers, but fills lodgings, raises rents, pollutes air and water, lowers the standard of living, causes beggary, vice, and disease, and degrades the working classes. The first political aim of the artisans ought to be to effect such a change in the laws of land tenure as shall secure that the country shall feed all its new births, shall be so fully tilled as to make farm products cheap in the town market, after well feeding the producers, and shall facilitate an emptying out of the wholesome density of the towns into the vacant rural areas. All this would tend immeasurably towards the comfort, health, and affluence of the artisans.

That appeal to the artisans of the Old Country has been taken to heart by the artisans of Australia to such an extent that at the present time we have in this Parliament a majority determined to see that the country-side shall be filled, and that the " new births " shall not be compelled to leave the land to swell the dense populations of our cities. The intention of the Labour party has always been made perfectly clear. The public have been taken into our confidence. At no time has any attempt been made to deceive them. For a number of years we have been faced by the fact that the poorer class of the community have had to bear an undue burden of taxation. It is quite clear that, as far as the rate of taxation upon the unimproved \alue of land is concerned, a person requires to hold a very large estate indeed before he contributes the same proportion of his income as does an ordinary labourer. The ordinary labourer with, say, a wage of 8s, a day - -and he would be lucky if he got that all the year round - would, if he had a family of four, contribute something like £15 a year in taxation. The Customs and Excise revenue averages £2 10s. fid. per head. Honorable senators opposite will hardly say that any particular class in the community pay a disproportionate share of that taxation. We know, as a matter of fact, that stimulants and narcotics, textiles and agricultural produce, yield 70 per cent, of the total Customs receipts, and these commodities are consumed proportionately by the poorer class of the community as well as by the rich.

Senator Sayers - Proportionately ?

Senator LYNCH - A person engaged in ordinary labour receiving 8s. per day, and supporting a family of four, pays, as I have shown, ,£15 per annum in Customs and Excise taxation. Under this tax a person owning £27,500 worth of unimproved, land would not, therefore, pay anything like as much as would be paid by an ordinary labourer getting 8s. per day. The land-owner with £27,500 worth of land, with an exemption of £5,000 worth, would pay on a taxable value of £22,500, and the rate proposed for that is about 2 1/2d., which would yield to the Federal Treasury a tax of £234. The owner of such an estate would, presumedly, look for a return of something like 8 per cent. If we inquire into the average purchase price paid for land in the Commonwealth, we find that it is something in the nature of twelve years' purchase. On the basis of twelve years' purchase, we find that an estate of that class would yield £2,200 per annum ; and the taxation on that particular income would be in the proportion of 10.6 per cent. Surely that is a disproportionate contribution for a large land-owner to make to the revenue. He is called upon to pay only about io£ per cent, on his income ; whereas the labourer getting 8s. per day pays at the rate of is per cent. Therefore, I say that this effort to adjust the burden of taxation so as to enable the poorer classes to carry no more than their fair share, and to pile a little more on to the broader backs of those enjoying larger incomes, is a reform that has been too long delayed. Now that it has come, we hope that it will produce beneficent results. I support the measure in its entirety. I cannot see that any improvement could be made in it, except, perhaps, in regard to mortgagees. I believe that the proposals in that respect are a drawback to the measure. A mortgagee always stands to win, no matter whether the seasons are bad or good. No matter what risks are run by persons engaged in a primary industry, the mortgagee always requires the stipulated rate of interest to be paid to him j and that he is not called upon to bear a larger amount of taxation, points to one of the weak features of the measure. Otherwise, I support it cordially, believing that the time has come for a tax to be levied on land which is held in excessive areas.

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