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Tuesday, 15 December 1914


Senator PEARCE (Western AustraliaMinister of Defence) .- I move -

That this Bill be now read a second time.

The effect of this Bill will be to amend the schedule of the Land Tax Act which deals with the rate of taxation. The scheme for imposing the land tax is provided for in the Land Tax Assessment Act. The rate of tax is fixed in accordance with a formula provided for the purpose, and it has been considered advisable to alter that formula so as to increase the incidence of the taxation. I have here a statement giving the technical formula providing for the rate of tax. It is proposed under this Sill that where the taxable value does not exceed £75,000 the formula for arriving at the amount of the tax shall be-

 

Where the taxable value exceeds £75,000 the rate under this Bill will be 9d. in the £1, as against 6d. under the existing Act. To give honorable senators some examples of the effect of the proposed change in the rate of taxation I may say that in the case of an estate of the taxable value of £10,000 the rate of the tax under this Bill will be12/3d., whilst under the present Act it is11/3d. An estate of the value of £15,000 under this Bill, 2d.; under the Act,1½d.; £25,000 under this Bill.22/3d.; under the Act, 1 5-6d.; £30,000 under this Bill, 3d.; under the Act, 2d.; £45,000 under this Bill, 4d.; under the Act,2½d.; £60,000 under this Bill, 5d. , under the Act, 3d.; £75,000 under this Bill, 6d.; under the Act,3½d. In the case of absentees, where the taxable value does not exceed £50,000, the formula is proposed to be altered from -

 

Here are some examples of the effect of the proposed alteration. Where the taxable value of the estate is £15,000, the rate will be32/3d. under this Bill as compared with31/3d. under the Act; £25,000,41/3d. under this Bill,31/3d. under the Act; £30,000,42/3d. under the Bill, 35/8d. under the Act; £45,000,52/3d. under this Bill,41/3d. under the Act; £60,000,61/3d. under this Bill, 45-6d. under the Act; and £75,000,72/3d. under this Bill, and51/3d. under the Act. On estates of over £80,000 taxable value, it is proposed that the rate shall be raised to a maximum of 9d. in the £1. The question of the taxation of leaseholds is not raised by this Bill, but by the Land Tax Assessment Bill, which has to be considered ; but I may say that the amount which it is expected will be raised from this increased taxation in a full year is £1,000,000. There has been a mistake made in connexion with the formula shown in the schedule to the Bill, but when we get into Committee it is my intention to move an amendment in order to provide that the rate of taxation shall not go beyond 9d. in the £1 in any case.


Senator Millen - Is the honorable senator apologizing for the moderation of the Government when he says that it is not to go beyond 9d. in the £1 ?


Senator PEARCE - The intention of the Government was that 9d. in the £1 should be the maximum.


Senator Bakhap - Under the formula in the Bill it might go up to11d.


Senator PEARCE - That is so, and that is why it is proposed to make an amendment. I do not know that I need say very much more about the Bill. We believe that the present Act does not fully do what it was intended to do. That is to say, it has not had the effect of breaking up large estates to the extent that its designers intended.


Senator Bakhap - It was wrong of them to have such a design. If it had been put in the preamble it would have been declared unconstitutional.


Senator PEARCE - That was the design. The Act was intended to have the effect of bringing into use land that was held out of use. It has had that effect to some extent, but not to the extent we desire.


Senator Lynch - It operated at a snail's pace.


Senator PEARCE - In the first year of its operation it had the desired effect on a pretty large scale, but since then it has been found that, as the result of experience, it is not bringing land into use at the rate we think desirable in the interests of the country. We also believe that, from the revenue point of view, the money to be collected under this Bill may very properly be contributed by a class of taxpayers who are well able to bear the additional burden which will be placed upon their shoulders. As I said, I propose, when we get into Committee, to move an amendment upon the schedule for the purpose of retaining the maximum rate at 9d. in the £1.

Senator MILLEN(New South Wales) have occurred to me in connexion with this Bill is the very great triumph of the views which you, Mr. President, so strenuously advanced in this Chamber when the original Land Tax Act was presented for our consideration. I used to admire the energy with which you enforced those views, whilst I regretted that it was not devoted to a better cause. Those of us who were members of the Senate at the time will remember that you pointed out that, by the method of collecting the tax then proposed, the purpose which your party set before it would not be accomplished. I understand that the Government propose, in connexion with this Bill, to alter not merely the rate of the tax, but the method of collecting the tax provided for under the existing Act, and submit a proposal bringing the original measure into line with what you advocated so strenuously a few years ago. Another thing that occurred to me in connexion with this Bill is that it is very largely also a triumph to those members of the Labour party who have, without hesitation, expressed it as their idea that the Federal land tax should be ls. in the £1. Senator Ready is one of those who voiced that opinion without any equivocation.


Senator Ready - I still hold it.







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