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Tuesday, 15 December 1914

Senator MILLEN - Others of the honorable member's party hold the same view. I am also reminded of an interjection made at the time Senator Ready put forward that view. When Senator Ready said that he would be prepared to move that the tax should be ls. in the £1 sterling, Senator Gardiner said, " If you do, you will stand alone."

Senator Gardiner - Quite true; but there was no war then.

Senator MILLEN - We shall see in a few minutes how far this is to be considered a war tax. In the meantime I wish to show that, although the Vice-President of the Executive Council then very stoutly, and indeed indignantly, repudiated the idea of levying a tax of ls. in the £1, Senator Ready has now obtained 3d. in the £1 at least of the increase which he then sought.

Senator Gardiner - Under exceptional conditions.

Senator MILLEN - The conditions are exceptional, as I shall show presently. That portion of the Labour party which has as its ideal a land tax of ls. in the £1 has managed to get a 50 per cent, increase in that direction.

Senator Mullan - That is good progress.

Senator MILLEN - I take that interjection to mean that honorable senators opposite will not be satisfied until they get an increase of 100 per cent. I

Senator Mullan - The honorable senator is at liberty to draw his own conclusions.

Senator MILLEN - I am merely stating facts. It is true that there was some little show of opposition to Senator Ready's suggestion, but apparently it has disappeared, because we now find that the Government propose to levy a tax of 9d. in the £1.

Senator Ready - The honorable senator means that a proposal was mentioned here under which it was intended that the tax should reach ls. in the £1. It did not contemplate a flat rate of ls. in the £1.

Senator MILLEN - And I am congratulating my honorable friend upon having gob three-fourths of the way towards his goal. Cheered by this measure of success, he will, no doubt, make a further effort to get the remaining increase of 25 per cent'. By that time, probably, Senator Gardiner will have found some other special reasons for falling in with him.

Senator Gardiner - If the honorable senator secures another term of office, a tax of ls. in the £1 will not be sufficient to enable us to meet our commitments.

Senator MILLEN - The term of office of the late Government has nothing to do with the present proposals. The VicePresident of the Executive Council said just now that this additional taxation was due to the war. No greater piece of humbug was ever sought bo be perpetrated than that of endeavouring to persuade the people of the country that these additional taxes are war taxes. It is playing with the patriotic feelings of the people to attempt bo persuade them that a single penny of this additional taxation is to be devoted towards defraying our share of the expenditure upon this Empire war.

Senator Lt Colonel O'loghlin - It will go towards paying interest upon our war loan.

Senator MILLEN - It will not, because, if the honorable senator will takethe trouble to look at the Budget-papers, he will see that we are even borrowing sufficient to pay interest on the large amount which we are getting from the Imperial Government.

Senator Mullan - We would be borrowing more but for the imposition of this tax.

Senator MILLEN - Exactly; but the extra amount we should borrow, but for the tax, would not be devoted towards defraying our expenses in connexion with the war at all. The amount which will be realized by this tax, and by the probate and succession duties, is going to make good the deficiency anticipated in the ordinary expenditure of the Commonwealth.

Senator Guthrie - Which is caused by the war.

Senator MILLEN - No. It is our increased expenditure which necessitates the imposition of the tax. This increased taxation has been rendered necessary by the fact that the Government have decided to spend more freely during the next twelve months than any Government has previously spent in Commonwealth history. Having decided to enlarge their expenditure, the Ministry had to look around to discover additional sources of revenue, and as a result they have resolved to increase the amount to be drawn from the land. It is altogether unjustifiable to pretend that they are levying this tax in order to meet the expenses consequent upon the war. A few simple figures will show that it has not been rendered necessary to meet our expenditure in connexion with the war, and that it is not going to be devoted to that purpose. It seems to me that there is a deliberate and set design on the part of my honorable friends opposite to convey the impression that the taxes proposed are war taxes. Speaking elsewhere a little time ago, the Prime Minister said -

I feel sure this form of taxation will be accepted by the country as a fair and reasonable one to be imposed during the war.

The only purpose of that utterance was to convey the impression that this tax had been rendered necessary to meet our war expenditure.

Senator Guthrie - Due to a restriction of trade.

Senator MILLEN - Will Senator Guthrie admit" that this is not a war tax ?

Senator Guthrie - It is caused by the war.

Senator Lynch - The war on land monopolists.

Senator MILLEN - I am very much obliged to Senator Lynch for his illuminating interjection. It is required for the war on land monopolists. It has no relation whatever to the war in Europe. We could have no clearer indication of this than that which was given in the speech which the Minister of Defence delivered this afternoon. He said that the Labour party had found that their original land tax was not effectively doing its work, that whilst in the first year of its operation there was a satisfactory movement towards the disruption of big estates, that movement had come to a stand-still. There is a clear admission that this tax is being imposed, not to raise money to carry on the war, but because the party opposite have found that the tax previously levied has not had the desired effect of breaking up large estates as rapidly as they thought it would. The Minister made a very frank declaration on that point which I put in contradistinction to the interjections of the VicePresident of the Executive Council and Senator Guthrie, who are still endeavouring to show that the tax is being levied because of the war and in aid of the war.

Senator O'Keefe - Does not the honorable senator know perfectly well that the tax is intended to raise increased revenue owing to the war?

Senator MILLEN - How can it be necessary owing to the war, seeing that it is not to be devoted towards defraying our expenses consequent upon the war? My honorable friend had better allow me to give him some figures in this connexion. They show that the Government this year anticipate a deficit - not in connexion with the war, because that is dealt with in an altogether different way - but in their ordinary revenue.

Senator Gardiner - The ordinary revenue has fallen short because of the war.

Senator MILLEN - It is not the fallingoff of the revenue that has rendered this tax necessary; it is the increased expenditure. The Vice-President of the Executive Council knows very well that all the falling-off of the revenue which is anticipated amounts to only about £750,000 in the Customs. Yet the Government propose to raise, in order to meet that falling-off, a sum of £2,314,000. The difference between the falling-off in the Customs revenue, and the amount which will be yielded by this increased taxation, is to be devoted to meeting the increased expenditure of the Government.

Senator O'Keefe - Does not the honorable senator think it is a good thing to assist the industries of the country and thus to find employment for the people?

Senator MILLEN - The interjection of the honorable senator does not take cognisance of my point.

Senator O'Keefe - That is the point.

Senator MILLEN - Then it is the point that this taxation is being levied to provide employment for the people, and not for the purpose of financing our share in the war expenditure.

Senator O'Keefe - It is being imposed to meet the difficulties which have arisen owing to the war.

Senator Mcdougall - Will not the honorable senator give the drought a chance ?

Senator MILLEN - The total result of the drought, and of all other causes, is an anticipated deficiency in the Customs revenue of £750,000, and yet the Government propose to raise an additional £2,314,000 by way of taxation, and even then they will still have a deficiency. That, I submit, is due to the fact that they are enlarging their expenditure as compared with the expenditure of last year. That may, or may not, be good policy, but I say that no person can honestly pretend that these taxes are being levied as war taxes. If they are war taxes, it is reasonable to assume that they will last only during the continuance of the war, or until such period thereafter as the debt which has been created by it has been paid off. Are my honorable friends prepared to say that this land tax has been put forward as a temporary expedient? If it be only designed to meet an emergency - to meet a deficiency in the Customs revenue - is it intended to repeal this Bill when those extraordinary circumstances have ceased to exist?

Senator Gardiner - I have not the slightest doubt that the honorable senator will repeal the Bill if he happens to get into office again.

Senator MILLEN - I am asking my honorable friend whether, if this measure be brought forward merely because of the extraordinary circumstances resulting from the war, the party with which he is associated will repeal it the moment those circumstances have passed away? Will Senator Stewart, the one frank man on the land policy in this Chamber, say that he will ever vote for its repeal ?

Senator Stewart - Certainly, I will.

Senator MILLEN - Then all the respect for the honorable senator which I have treasured for years has gone. But I venture to say, even now, that he is speaking jocularly.

Senator Stewart - I would repeal this Bill and bring in another measure increasing the tax.

Senator MILLEN - That is the frankness which I expected from the honorable senator. The tax has been brought forward as a permanent impost, so far as my honorable friends are concerned. How, then, can they pretend that it has been rendered necessary, by the extraordinary conditions with which we are confronted ? The fact is that it is part of the Labour party's policy, and, war or no war, they would have attempted to give effect to it by means of this Bill. We ought to be frank with the electors, and, in addition, we ought to be frank with ourselves. It is utterly impossible to obtain that frankness if honorable senators opposite will pretend that this measure has any relation to the war in the slightest degree.

Senator Gardiner - There would have been no occasion for it if the war had not occurred.

Senator MILLEN - Here are the figures - The total expenditure this year is estimated to be £37,500,000, and our war expenditure £11,750,000. The whole of that war expenditure is being paid for out of borrowed money. For this purpose £10,500,000 is being borrowed from the Imperial Government, and the rest' is to be obtained from the issue of Treasury bills. Deducting that expenditure from the total estimated expenditure this year, we find that the ordinary expenditure will be £25,750,000. The Vice-President of the Executive Council has said that the imposition of this tax would not have been rendered necessary but for the war. As a matter of fact, there is not a penny of war expenditure in the whole of that £25,750,000.

Senator Gardiner - The honorable senator appears to be shutting his eyes to the fact that the war has entirely upset our finances.

Senator MILLEN - It has upset them to the extent of £750,000 in the Customs revenue- that is all. In what other way has it upset our finances? It has reduced the anticipated Customs revenue by £750,000.

Senator Gardiner - But there would have been an increase in the Customs revenue if normal conditions had prevailed.

Senator MILLEN - Let my honorable friend take the biggest increase of revenue that has been experienced in the Commonwealth and he will find that the Government would still not have had -sufficient revenue to enable them to meet an expenditure of £25,750,000. It has to be remembered, too, that we are suffering from a drought which is responsible for a considerable disruption of commerce.

Senator O'Keefe - And a pretty considerable portion of the disruption in commerce.

Senator MILLEN - Undoubtedly. Had there been no war, the most that my honorable friends could have claimed would have been an anticipated loss of £750,000 in the Customs revenue. I say that there would have been a shrinkage there owing to the drought, war or jio war. But for the purposes of argument I will assume that the whole of that anticipated loss of £750,000 is the result of the war.

Senator Gardiner - The Government of which the honorable senator was a member did not make provision- for future expenditure while they were in office.

Senator MILLEN - We were not called upon to make provision for additional expenditure with which we were not confronted. How absurd it is for the Vice-President of the Executive Council to talk like that. Those who propose to spend the money must accept the responsibility of raising it. My honorable friends have put forward a proposal to spend £25,750,000 upon the ordinary services of the year. The Vice-President of the Executive Council says that, but for the war, that revenue would have been received. He cannot seriously pretend that for a moment, because, in order to balance their accounts, the Government would have had to receive from the Customs Department £3,200,000 more than they expect to receive now. No honorable senator, in his sober senses, will pretend that if there had been no war our Customs revenue would have jumped more than £3,000,000.

I would further remind the VicePresident of the Executive Council that he is a member of a Government which promised to bring in a Tariff the effect of which, by stopping importations, would tend to reduce the revenue.

Senator Gardiner - The Tariff has already been brought in ; the promise has been kept.

Senator MILLEN - Has the effect been to reduce the revenue?

Senator Gardiner - It was introduced to protect our local industries.

Senator MILLEN - That remark from my one time stalwart Free Trade friend is distinctly amusing, but I cannot resist asking him whether, in his opinion, the new Tariff is going to reduce the revenue or not.

Senator Gardiner - It will increase the revenue for this year.

Senator MILLEN - That means that the imports will be greater this year than they would have been but for the high Protectionist Tariff championed by my Free Trade friend. It is just as well that Senator Russell should know that he has to advocate before his electors in Victoria a policy which is going to increase imports.

Senator Gardiner - I did not say so; I said that it would increase the revenue for this year.

Senator MILLEN - You cannot increase the revenue from the Customs without increasing the importations. I should like to hear Senator Russell, in Victoria, supporting the new Tariff on the ground that it is going to increase imports and swell the revenue.

Senator Russell - You may increase the revenue because of the higher duties without increasing the imports.

Senator MILLEN - Then the honorable senator admits that the Government will receive a bigger revenue from the Tariff.

Senator Russell - I am not foolish enough to believe that our manufacturers can build new factories in a month.

Senator MILLEN - The honorable senator is not foolish enough to commit himself to Senator Gardiner's interjection. Senator Gardiner, so far as this Bill is concerned, may endeavour to make out that, but for the extraordinary expenditure rendered necessary by the war, there would have been no need for this taxation. In order to do that he has to show that but for the war the Government would have received through the Customs an extra revenue of over £3,000,000, and no responsible officer in the Trade and Customs Department would venture to put forward such an estimate. We have never had such an increase, even in the last few years, during which our prosperity has been increased at a gratifying rate. I would remind honorable senators, to show how essential these taxes are to meet the ordinary expenditure of the year, that, although the Government propose to collect additional taxation, amounting to £2,300,000, there will still be a deficiency of £1,346,000. Those two items make a total of £3,700,000 odd by which the revenue will be below the expenditure this year. Yet Senator Gardiner has the hardihood to say that these taxes are rendered necessary by the war ! I have known Senator Gardiner to be reckless in his statements at times, but never so reckless as this. He might be all right in the back-blocks addressing those who do not carefully study the figures ; but the honorable senator, with the facts staring him in the face, cannot possibly say that these taxes are rendered necessary by the war.

Senator Lynch - It is the Liberal lady canvassers who tell the fantastic stories about finance.

Senator MILLEN - The " fantastic " statements which I am making are taken from the Budget figures published by the Prime Minister.

Senator Guthrie - And embellished.

Senator MILLEN - -Facts do not require embellishment, and these are the facts. They show that the real purpose of these taxes is to enable the Government to spend more freely than ever before. The sole point I want to make is that the purpose of the tax is merely to swell the revenue and not to meet war .expenditure. Had there been no war at all this tax, or one raising a similar amount, would have been necessary. The clearest and most positive proof that it is not a war tax is that, even after the amount yielded by the tax has been swallowed up by the ordinary expenditure of the year, the Treasurer will still stand confronted with a deficiency of over one and one-third million pounds.

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