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Thursday, 3 November 1910

Senator GIVENS (Queensland) . - I am astonished that Senator Millen should complain that the Labour party have not adhered strictly to the proposals in regard to. the land tax which they put before the electors prior to the 13th April last, because, if they had adhered strictly to those proposals, the tax would have been a very much more severe one than that proposed in this Bill. Those who have any right to complain in the matter are those who believe that the land tax to be of much use should be really an effective tax. The first proposal put before the electors was that the tax should be 4d. in the £i on estates of the unimproved value of £60,000 and over. Under this Bill, an estate of that value will only pay a tax of 3d. in the £1, so that the taxpayer is getting off very much lighter than he would have done if the original proposal of the party were carried out.

Senator Millen - If he was, the honorable senator would not be supporting this Bill.

Senator GIVENS - I agree with the proposal that the graduation should be worked out in accordance with the formula included in this Bill. It is an admirable idea; because it makes every £1 of taxable value carry its own burden of taxation.' The tax is on a graduated scale for each successive £1, and is not graduated by arbitrary intervals of value. But the formula has not been made to carry out the original proposals of this party, which were that on an estate of an unimproved value> of £60,000 the taxation should be at the rate of 4d. in the £1. Under this Bill, the taxable value of an estate must be more than ,£75,000 before the average tax will amount to 4d. in the £1.

Senator Millen - What the honorable senator means is that the land-owner ought to be very glad that the Government have not proposed to take the lot.

Senator GIVENS - I say that if. any one has a right to congratulate himself that the Labour party are not strictly adhering to the proposals they made before the 13th April it is the taxpayer. A man owning an estate of the unimproved value of £75,000 will pay an average tax of only 3½d. in the £1. He would have to own an estate of over that value before he would be called upon to pay an average of 4d. in the £1, and after that the higher rate would be payable only on the amount in excess of £75,000. We have been told by honorable senators opposite that a man owning a large estate of £140.000 or £150,000 will suffer under this taxation the confiscation of one-half the annual value of his property on a 5 per cent, basis.

Senator Vardon - That is so.

Senator GIVENS - Senator Vardon cheers the statement, but it is not a fact. The land-owner will never pay under this Bill an average tax of 6d. in the £1.

He will pay a tax of 6d. in the £1 only on the excess value above £75,000, and he will pay only an average of 3½d. in the £1 on an estate of the unimproved value of £75,000.

Senator Vardon - We shall ' see when the formula is worked out.

Senator GIVENS - A schoolboy can understand this formula. Under it the value in pounds is divided by 30,000, and the product, plus 1, is the rate in pence. If you have an estate of the unimproved value of £75,000, that divided by 30,000 will give you i\, and that, plus 1, gives a rate of 3^ as the tax of an estate of that taxable value. Yet honorable senators have the audacity to tell us that we propose to confiscate one-half of the estates over £100,000 in value.

Senator Millen - You are admitting the confiscation, but only disputing the incidence.

Senator GIVENS - I am admitting the audacity of honorable senators in putting forward their contention.

Senator Millen - That is not in dispute.

Senator GIVENS - Honorable senators opposite talk about confiscation, but, according to their argument, all taxation is confiscation. What is the position of a man who is employed on the streets, in the erection of buildings, in the construction of railway or telephone tunnels, or in mines? In Victoria the average wage which such men earn, week in and week out, is not more than £2. Yet, because a man happens to smoke, the Government come along and take is. a week in taxation from him. Is that confiscation?

Senator Millen - But it is taken from all men.

Senator GIVENS - No; if the honorable senator does not smoke we do not take a farthing from him in that way.

Senator Millen - Unfortunately, I do smoke.

Senator GIVENS - A man can evade the land tax just by ceasing to be a landholder. If that is a good argument there is a very easy way out of it. I think I have shown that the contention that onehalf of the value of very large estates will be taken by the land tax will not stand examination for a moment; it must go by the board, because it is not based on fact. Almost any land-owner can avoid" Ihe heavier portion of this tax straight away. Most persons, except those who desire to found a family and institute the old law of primogeniture in Australia, and hand their estates down in entail from father to son, will divide their landed property up amongst their family. Let- them do so now, or let those who have not a family and do not want to pay the tax, get rid of so much of their land as will relieve them of the greater proportion of the taxation. If they have £60,000 worth and sell £40,000 worth, they will have to pay only very little on the remaining area. That is the way for such persons to get rid of the tax. One of our objects - not the main object, I confess - is to try to induce more settlement. My fear is that this tax will not be heavy enough to accomplish that object. On a £25,000 estate, with a taxable value of £20,000, the tax will only be one and two-thirds of a penny in the £1, a mere nothing. I feel almost certain that as a bursting-up tax it will be entirely non-effective. The man with an estate of £35,000 will be asked to pay a total of only £250. The chief estates which stand in the way of closer settlement are not the extra large estates, not the mighty estates which we have in the western parts of the country or in the far back pastoral areas, but comparatively small estates in the agricultural districts.

Senator Vardon - But you tax them all the same, though they are not suitable for closer settlement.

Senator GIVENS - I refer to estates from £20,000 to £40,000 in value. A man, with an estate of from .£20,000 to £40,000, unimproved value, can pay the tax and laugh at it as a bursting-up impost, because what he will have to pay, will be comparatively small. Land-owners are getting off so cheaply that I am afraid that the bursting-up effect of the tax will not amount to very much.

Senator Vardon - Remember that, in some States, this tax will be superimposed on a State land tax.

Senator GIVENS - The more the States exercise their right to impose a land tax the better "I shall be pleased. The honorable senator has .stated there has been no evil in large estates in the western areas of the States, because the lands are not fit for closer settlement. That is an entire misconception. Although the lands are not, perhaps, suitable for close settlement as we know it in agricultural districts, yet it is an undoubted fact that they are eminently suitable for much closer settlement than we have. Even in the western country of Queensland it is found that, in an ordinary season, a man with 5,000 acres of the average pastoral country out there-

Senator Millen - Whereabouts ?

Senator GIVENS - In any part of western Queensland.

Senator Millen - At Thargomindah ?

Senator GIVENS - Even there.

Senator Millen - Well, you must have some bitter enemies if you would send them out there to live on an area of 5,000 acres. It could not carry 1,000 sheep.

Senator GIVENS - I know that people have been applying wholesale for grazing farms out there, and have not been able to get them.

Senator Millen - Under the influence of good seasons and high prices.

Senator GIVENS - I know men .who are making a living on 5,000 acres of what was commonly called desert country. At any rate, where a man could not make a living on 5,000 acres he could do so on 20,000 acres. There is scarcely any country in western Queensland, or any pastoral country belonging to other States,' where a man could not "make a living on 20,000 acres ; and if he could not manage on that area, he could do so on 50,000 acres. It would be infinitely better for us to have men scattered all over the country living on blocks of from 5,000 to 50,000 acres, rather than have one man occupying an area the size of a principality.

Senator Millen - The " bulk of that country was leasehold, and your party was careful to let it off the fax.

Senator GIVENS - I admit that; and I am one of those who regret very sincerely that these persons are allowed to escape. I should not care a straw if I thought that the States were getting the full rental value of the land ; but I know, as a matter of fact, that they are not,_ because in Queensland a grazing farmer, that is a man with a small area, is paying from four to eight times as much rent as a big squatter. That is how a small man is encouraged there. We have squatters in almost every State occupying an area the size of a principality. A run of from 200 to 300 square miles is .quite a common thing. Some of the runs are very much larger, and some others are not quite so large, but all comprise a large area. It would be infinitely better for Australia, and I believe we should produce a great deal more wealth, if we had thirty or forty families settled where we have only one big station at present. It would be an advantage in another way. It would make the western country more attractive, because people would be able to enjoy each other's society, and to have schools where there are none at present. It would give possibilities of social life. All these considerations encourage me in the belief that we shall never have really close settlement all over Australia to the desired extent, until we make this land tax more effective than it is likely to be. In New South Wales, Queensland, and Victoria, especially in the last-named State, there is a very large area of western pastoral country which is freehold. It has been "peacocked." It was put up to auction by the Government, and sold at as low as ros. an acre. By the possession of a 20,000-acre block, a man may command all the surrounding country. It is of no use to any one without the possession of this freehold, because that commands water, or has some other special advantage. This " peacocking " has been going on in every State. It will be a good thing if the land tax will help to cut up the land in the western country, and make room for closer settlement. I regret very much that this tax will not be as effective as I firmly believed it would be under the proposals which were put before the electors, and which they indorsed on the 13th April. However, it is the best that 'we can get at present. The consensus of opinion seems to be in favour of it. I certainly consider that the graduation formula is an admirable idea, and deserves the cordial approval of everybody. I only regret that it was not graded .so as to bring in exactly the results which we promised the people in the shape -of a tax before the 13th April.

Question resolved in the affirmative.

Bill read a second time.

In Committee :

Clause 1 -

This Act may be cited as the Land Tax Act 1910.

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