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Wednesday, 2 November 1910

Senator MILLEN (New South Wales) - - The suggestion of Senator Fraser would be a very excellent one, only that I feel the Bill will go through, anyway. I indorse the honorable senator's statement that the position of the land-owner will be just as good if the clause be eliminated from the Bill, as it will be if it be retained. The Vice-President of the Executive Council has said that he can see no injustice in it. Neither can I. But the clause is, nevertheless, an affirmation that there is injustice in the remainder of the Bill. It is a clumsy attempt to right the wrong. It provides that if it can be shown to the satisfaction of the Commissioner that the exaction of the tax from a land-owner will entail serious hardship upon him, the Commissioner .may refer his case to a Board of which the Commissioner himself will be the dominating factor. In other words, he may refer it from himself, as Commissioner, to himself/ as Chairman of the Board. Surely he ought not to be a member of the Board !

Senator McGregor - Yes. He will merely accept the advice of the other two members of it.

Senator MILLEN - I wish to place upon record the rank absurdity of this clause. It is absurd to provide that the taxpayer must first satisfy the Commis sioner that the clause will inflict injustice upon him, and that the Commissioner shall afterwards be appointed the judge of his own actions. If the clause is to work equitably, any land-owner ought to have a right to go before the Board. But he has no such right. He has first to convince the Commissioner - the individual whose assessment is probably the cause of his ruin--

Senator McGregor - He may have been ruined by some other cause.

Senator MILLEN - But the perilous position of the taxpayer may have been brought about by his having been compelled to pay the tax in previous years.

Senator Rae - There has been no tax levied in previous years.

Senator MILLEN - I am speaking of four or five years hence. Of course, I understand what Senator Rae means, namely, that this Bill will not remain upon the statute-book very long.

Senator Rae - It is marvellous what ideas the honorable senator puts into my head.

Senator MILLEN - The honorable senator ought to be thankful to me for putting any ideas there. In effect, the clause says to the Commissioner, " You may block any land-owner from securing the advantage of clause 64 if you choose." The Commissioner having made up his mind that the collection of the tax would inflict hardship upon a land-owner, will afterwards go upon the Board as an advocate of that land-owner.

Senator Lynch - The Commissioner is a monster, according to the honorable senator ,.

Senator MILLEN - The Bill is a monster - not the Commissioner. Outside of comic opera, I defy Senator Lynch to find any greater absurdity than is represented by clause 64. That provision contemplates that the Judge shall be called upon to say, first of all, whether the defendant has made out his case. If he has clone so, the Judge will send it on to a jury, of which he will be the foreman. Unless the Commissioner is convinced that an injustice is being done to the taxpayer, he will not send the case on to the Board.

Senator McGregor - It is not a question of injustice, but one of hardship.

Senator MILLEN - The Commissioner has to be satisfied that a hardship will be inflicted upon the taxpayer.

Senator McGregor - The taxpayer is not appealing for justice, but merely for mercy.

Senator MILLEN - The Board appointed to investigate his case will not be created until the Commissioner himself has been convinced that the payment of the tax would entail great hardship upon the taxpayer. Then, before the latter is allowed to plead to the jury, he will have to convince one-third of its members.

Senator Rae - This is not a question of Judge and jury.

Senator MILLEN - Before the landowner can get his case before the Board he has * to get one-third of its members upon his side.

Senator Rae - A very reasonable arrangement.

Senator MILLEN - It may be for those who wish the clause to remain an empty placard. But Senator Rae would be the last to describe it as a reasonable arrangement if it applied to any class of the community other than to land-owners. If we wish to extend mercy to land-owners upon whom the collection of the tax would inflict hardship, they ought to be allowed to go before the Board as a matter of right.

Senator Rae - This is not a matter of opinion, but of fact.

Senator MILLEN - That a man has suffered loss is a matter of fact, but it is a matter of opinion whether the exaction of the full amount of the tax would ruin him. A land-owner need not be grateful to this Government for saying, " We will relieve you of your debt after you have become insolvent." The Bill does not give the man a right to place his case before a Board. The Commissioner can block him from securing that appeal - block him from appealing for mercy. On the contrary, however, if the Commissioner chooses to allow the man to appeal, then he, being chairman of the Board, becomes an advocate for the land-owner; because, having expressed an opinion that hardship was inflicted, the Commissioner, when the matter came before the Board, would have to be favorable to the appellant. Senator MColl has expressed the opinion that the Board ought to be composed differently. It is absurd to say that the Commissioner, who has the right to veto an appeal, if he likes, is then to be not only a member, but the most important member of the Board of Appeal. Another point is that this clause only operates where a loss has been incurred. It does not act in any way as a preventative.

What is the good of saying to a man who has already suffered a heavy loss, " If you cannot pay we will not insist"? The clause ought to operate so as to avoid placing a man in that position. If a man says, " I am not bankrupt, but if you levy this tax upon me I shall be," the Bill does nothing for him. He must have suffered an actual loss of a serious character before he can be helped. Would it not be better to prevent that unfortunate result from occurring ? That is the very thing that I ask for in this clause, but it is the very thing that honorable senators opposite will not approve. They are not out to assist any land-owner in this country, or any man who owns any wealth, from being wronged. As long as a man has a penny left or a feather to fly with, Senator McGregor and those on whom he relies would be after him. If there were any possibility of carrying an amendment I would move to strike out the words "has suffered such a loss." But I realize that there is not the slightest hope. It is not competent under this clause for any man to show the Commissioner that theimposition of' the tax will seriously hurt him. The Bill will not help him until he has suffered so serious a loss that the tax would make him bankrupt.

Senator McGregor - Of course, the imposition of the tax will hurt everybody who has to pay it.

Senator MILLEN - I am not speaking of cases of that kind. If there is to be such a clause in the Bill it would be better to say that the Commissioner may deal with what would happen as a result of the tax as well as with factors which have already happened. The chief objection to the clause is that to which I have directed principal attention - the absurdity of saying that a man has an appeal to a Board when there is no opportunity of getting to the Board if the Commissioner vetoes his application.

Senator Lt.-Colonel Sir ALBERTGOULD (New South Wales) [5.51].- Certain interjections have been made which indicate the opinions of honorable senators opposite who occasionally honour us by their presence in the Chamber. I observe that there are two or three of them present now.

Senator Ready - There are usually present more senators supporting the Government than there are members of the Opposition.

Senator Lt Colonel Sir ALBERT GOULD .- So there ought to be, as theMinisterial is the larger party. What is- more, it is not the duty df the Opposition to keep a House for the Government.

Senator Rae - I used to be a sufferer from insomnia before I became a member of the Senate; but now 1 can sleep while members of the Opposition are talking.

Senator Millen - As honorable senators opposite are so " touchy " about the matter, let us have a quorum now. [Quorum formed.]

Senator Lt Colonel Sir ALBERT GOULD - I am glad that the appeal has brought a few members of the Ministerial party into the Chamber; though I observe that they are drifting but again as soon as they find that they were not called to a division. At any rate, while they are present, we have an opportunity of directing their attention to the clause, and of showing whether any great advantage really pertains to it. My colleague, Senator Millen, has pointed out that the taxation Commissioner is the only man who can put the clause into operation. He has to be satisfied, first of all, that the taxpayer has suffered loss, and that the exactions of the full amount of land tax will entail serious hardship upon him. Then he has power to call in two members of the Civil Service to assist him in determining whether any relief should be given. The clause is very unsatisfactory ; because, before it can be put into operation, the Commissioner has to be satisfied that the individual has suffered loss. Let us see how it will operate : In the first place, a debt due to the Crown cannot be released except by payment.. Bankruptcy or insolvency will not relieve any man from liability for a debt due to the Crown. When he hands over the whole of his assets to an official assignee, and the creditors are paid so much in the £1, the Crown can still step in and claim 20s. in the £1 after the debtor has entered into business again ; and perhaps, by his energy and assiduity, is endeavouring to get himself into a fairly sound position. I should say that if a man becomes bankrupt, the Crown ought to prove its claim, and take the same position as any other creditor. The bankrupt, on obtaining his certificate of discharge, should be absolutely free from debt to the Crown, as well as from any other debt. The position of the Crown under the law is akin to that of a character in one of Shakespeare's plays, who insisted upon the satisfaction of the full amount of his bond. It is time that a principle of that character Was treated as a fiction, and that the Crown should not occupy any better position than an ordinary creditor. I would allow the Crown, in the event of a land-owner's insolvency, to make a claim which should be just as valid as the claim of any other creditor, and no more. Once he received a certificate of discharge his earnings should be free from any liability for debts incurred before the date of his bankruptcy. It should be noted that this clause goes a step further. It deals not only with a case in which the taxpayer satisfies the Commissioner that he has become bankrupt or insolvent, but with a case in which it is shown that the taxpayer has suffered such a loss that the exaction of the full amount of the tax would entail serious hardship. I should like the Minister to define what sort of loss is contemplated in this provision.

Senator McGregor - Loss from drought, flood, ticks, fire, or other such causes.

Senator Lt Colonel Sir ALBERT GOULD - The Government propose that the liability for the tax shall attach to the land, and to relieve the >owner only of personal liability, which would probably be worthless, since he would have become insolvent, or be in a position in which he was unable to pay his debts. The Crown will still hold its claim against the land, and this must reduce its value if an attempt is made to dispose of it to meet the owner's debts. I can cite the case of a company that has constructed a railway upon the land-grant system. Large sums of money have been expended in the construction of the line. Suppose it is shown that the railway has not for years past paid expenses, and will not pay expenses for years to come, will that be regarded as a case in which the taxation imposed upon the lands held by the company may be remitted ?

Senator McGregor - No; there is no hardship in that.

Senator Lt Colonel Sir ALBERT GOULD - A State Government says to the representative of a company, " We will give you ,£5,000,000 worth of land on consideration that you expend £5,000,000 in the construction of a railway to develop the country." The company constructs the railway, in the belief that they will be able to sell the lands, and find that there is no market for them, even though they are offered on the most favorable conditions.

Senator Rae - The honorable senator is putting a purely hypothetical case.

Senator Lt Colonel Sir ALBERT GOULD - No, I am citing an actual case.

Senator Rae - Is £5,000,000 involved i

Senator Lt Colonel Sir ALBERT GOULD - No; the amount may not be more than £3,000,000, but, with the exception of the figures, the case is one which really exists. The company has been unable to cover its expenditure by disposing of the land, and has been compelled to borrow money on debentures, and to get the Government to guarantee their repayment. The Government are willing to issue the grants when the debentures are repaid, or when the land is sold and the purchase money handed to them.

Senator Millen - The honorable senator might add that the company has offered to hand over the railway and the land to the State.

Senator McDougall - They must have made a serious mistake in the first instance.

Senator Lt Colonel Sir ALBERT GOULD .- No doubt they did; but I point out that if the railway had been built by the State, or if the State took possession of the railway and the land, the Commonwealth Government would not get a single penny of taxation from those lands.

Senator McGregor - Let the company hand the lands back to the State.

Senator Millen - They have offered to do so, but the State will not take them back.

Senator Lt Colonel Sir ALBERT GOULD - 1 ask whether the case I have cited would be regarded as one in which serious hardship would be involved in the exaction of the full amount of the land tax. If we wish people to assist usin developing the country, we must give them a fair show, and treat them at least no worse than other individuals in the community. If this company went into liquidation, it would escape the liability to this taxation, because there would be no personal liability, and if a company goes into liquidation, it is wiped out as if it had never existed. If we introduce legislation of this character, we shall find ourselves confronted with all sorts of difficult cases. The Vice-President of the Executive Council has said that there may be a remission of taxation, because of losses from drought, flood, ticks, or fire, but I think it will be curious to note in how many cases there will be any remission of taxation for any of these reasons. This clause should be entirely eliminated. It should not be a matter of grace and favour to permit an individual who has become insolvent to be relieved of a liability which may be brought against him at some future time, when he has overcome his financial difficulties, and is in a position to do a little for himself and those dependent upon him.

Senator Rae - It is evident from the mental attitude of the Opposition that, in their opinion, poverty is a crime.

Senator Lt Colonel Sir ALBERT GOULD - I do not regard poverty as a crime, but I do not think that any man would care to have his poverty published from the housetop. If it is known that a man has got into financial difficulty, and the matter is talked about, his difficulty is increased, and it would always be objectionable for a man to be pointed at as a pauper because he went before this Board to be relieved of some of his liability in respect of land taxation.

Senator Rae - Honorable senators were not so solicitous for the old-age pensioners. They cannot get rid of a bad inheritance.

Senator Lt Colonel Sir ALBERT GOULD - Have the present Government attempted to get rid of the bad inheritance? It is necessary that the authorities should be satisfied that people claiming old-age pensions are entitled to receive them. This clause provides that where a remission of taxation is granted, a full statement of all cases in which, and the grounds on which, remissions of taxation have been granted, shall be laid before both Houses of Parliament. Surely we may trust the Commissioner of Land Tax, the Secretary to the Treasury, and the Comptroller- General of Customs to grant these remissions only in cases in which it would be reasonable to do so without requiring that all particulars connected with the cases shall be laid before Parliament. We do not call upon our Judges for a report of the particulars of the cases which come before them. It is possible that much mischief might be caused by the publication of the particulars in cases to which this clause is applied.

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