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Tuesday, 15 December 1914

Senator SENIOR (South Australia) . - I wish to say a few words about this Bill, and, perhaps, I should not have been so anxious to do so were it not for the utterances of the last speaker. I cannot indorse many of the statements which Senator Grant has made. I should, indeed, be very sorry to do so. I want it to be distinctly understood that, so far as I am concerned, Senator Grant was speaking for himself.

Senator GRANT - I suppose the honorable senator is also speaking for himself ?

Senator SENIOR - I do not agree with the honorable senator's suggestion that, in the imposition of this tax, a flat rate should be adopted throughout. I think that a progressive tax is very much superior to a flat rate. It would be very much easier for a man who holds a large estate to pay taxation on a flat rate than on a progressive rate.

Senator Bakhap - In the higher gradation, what is proposed is a flat rate ? .

Senator SENIOR - The incidence of the tax at' the higher rate is such that I believe it will accomplish its purpose. I cannot agree with Senator Grant when he says that he does not believe in the exemption of the first £5,000 of unimproved value. I do believe in it.

Senator Ready - We are all pledged to it, too.

Senator Bakhap - The only difference is that Senator Grant is a more courageous man, politically, than is Senator Senior.

Senator SENIOR - I do not think that Senator Bakhap can charge me with any lack of courage in this matter. This is not the place to give the reasons why I believe in the exemption of the first £5,000 unimproved value, but I wish it to be recorded that I do believe in that exemption. I do not wish it to go forth that, in his objection to the exemption, Senator Grant represents the views of the Labour party.

Senator Grant - I admitted that whilst the exemption of the first £5,000 of unimproved value is part of our programme I am prepared to support it.

Senator SENIOR - The honorable senator told us that improvements have progressed where unimproved' land values taxation has been in operation. I am not prepared to dispute that, but I say that improvements have been made where such a tax has not been in operation. My inference is that improvements were made, not because of the taxation, but because of the general prosperity of the Commonwealth and the general demand for such improvements. The honorable senator has, I think, no right to credit the operation of the tax with the progress of improvements. Then I wish to say that what would be right in the taxation of town areas might certainly not be right if applied to country areas. I wish to make this distinction clearly. The taxation of unimproved land values might affect the utilization of town areas, but would not affect country areas in the same way. I wish to mark these points particularly, so that it may be known that I do not indorse the wholesale utterances of Senator Grant upon them. Senator Bakhap has told us that he has never contested the proposition that we should not borrow for war expenditure. That is to say, that he indorses the contention that we should borrow to meet such expenditure. The honorable senator, however, emphatically laid down the condition that by taxation we should provide only for the interest on the cost of the war. The honorable senator believes it is quite right to borrow in time of war, and, with his party, he believes that it is quite right to borrow in time of peace. In fact, with the honorable senator it is quite right to borrow at any time, even if the result be that you burst.

Senator Bakhap - What does the Old Country do?

Senator SENIOR - That has nothing to do with me. Leave the Old Country to its sins and sorrow. We want to strike out upon a better and more honest way. I believe that in all circumstances provision should be made for meeting our loans if possible on the due date. As honest men, we have no right to contract debts, and hand them on to generations yet to come, who can have no say in the contracting of those debts. Senator Bakhap has said that this tax is inequitable; that it is an assault on State revenue; that it is predatory, vindictive, and everything that is condemnatory. His reason for saying so is that the tax will fall only upon a few. His logic is that if it affected a great many it would be right. Because it affects only a few, it is sinful. The honorable senator has tried to place others on the horns of a dilemma ; I place him on one now.

Senator Bakhap - It is wrong for the many to tax the few vindictively.

Senator SENIOR - The honorable senator begs the question. He has to prove that this taxation is vindictive. He has not proved it.

Senator Bakhap - As the avowed object of the tax is not to raise revenue, it must be vindictive.

Senator SENIOR - The avowed object of the tax is to raise revenue. The honorable senator contended against it because it was to raise revenue. He. said that if it were a war tax he would indorse it.

Senator Bakhap - It is a tax imposed for the purpose of interfering with the land policies of the States.

Senator SENIOR - The honorable senator narrows his argument to this : Because it will effect a certain purpose, in addition to producing revenue, he objects to it because of that purpose. He objects' to it because it will cause the division of large estates. I am in favour of it for that reason. In my opinion, the division of large estates will lend itself to an increase of our population, with opportunities to work. This must, in its turn, increase the wealth of the Commonwealth and produce prosperity all round, which will justify the reduction of taxation. The honorable senator's objection, therefore, is that he is against the prosperity of the Commonwealth. His arguments lead him into very peculiar positions. He said that he was not hostile to the best interests of the Commonwealth. In this connexion, I propose to quote a few wordswhich I uttered some years ago in the South Australian Parliament. They will be found in Hansard of 12th October, 1905. At the time I was speaking of Coonawarra, a small place near the South Australian border, about 5 miles from Penola. Coonawarra was a piece of land that had been carved out of the Yallum estate, which was then held by Mr. John Riddoch, who had it surveyed into 10-acre blocks, which he offered for sale. The purchase could not be completed until certain planting conditions had been complied with. In speaking upon this matter on the occasion to which I have referred, I said -

Some fourteen or fifteen years ago the late Mr. John Riddoch surveyed 1,000 acres of his estate at Yallum for settlement By fruit-growing. . Seven hundred acres were taken up. That land carried about a sheep to the acre, or 700 sheep. From inquiries, he learned they had produced twelve bales of wool a year, or thirty-six bales in three years. That was 5 tons, and the revenue to the railway for carriage from Katnook to Kingston would be £1 6s. 8d. During the last three years 1,350 tons of stuff had been sent away from Coonawarra, and 750 tons received there, making a total of 2,100 tons. He had entered into a calculation in regard to that. He had assumed that two-thirds of the stuff would go to Adelaide and one-third to Mount Gambier. The Government profited by the carriage to the extent of £2,500, as against £1 6s. 8d. under the old system. That did not include passengers and parcels, and where one man got out at Katnook formerly 100 got off at Coonawarra to-day. The land was valued for land tax purposes at the rate of £2 per acre. He paid £10 an acre for his land, but that included the privilege of the winery, &c. When the land was separated, the land value went up to an average of £6 per acre, or an increase of 300 per cent. The district- council rates from the 700 acres formerly were £16 ls. lid., and to-day they amounted to £74 lis., or a gain of £58 9s. Id. Then as to population. He would take Nalang as an instance. Formerly that contained 32,000 acres, with 20,000 acres leasehold, and four men and two boys were employed for the 52,000 acres. He asked how many men it would take to look after 700 sheep. The reply he got was " A shadow of a man." Against that shadow what was there to-day? On that same 700 acres there were at least fifty persons. There were twenty-six land-owners, many of whom were married and employed labour. Take those twenty-six settlers against the shadow of a man, the £58 increase in the district council rates, and the £2,500 increase in the railway revenue, and they would see distinctly that closer settlement was a real success.

Senator Bakhap - What had the Federal land tax to do 'with that ?

Senator SENIOR - My honorable friend is rather premature. Here was a case in which subdivision was effected, and progress followed. If a progressive land tax will produce the subdivision of estates, I say that progress must follow. Yet the honorable senator wants to know what that has to do with the land tax. If he is not hostile to the best interests of the Commonwealth, which he assures us he is not - and " Brutus is an honorable mau " - why is he hostile fo the progressive land tax which will .operate in the best interests of the Commonwealth ?

Senator Bakhap - Because it is designed to cheapen land.

Senator SENIOR - I venture to say that it is a benefit to the land user if he can secure cheap land.

Senator Bakhap - Because this tax will reduce it to a value below that at which it is assessed.

Senator SENIOR - Has the land user ever been able to purchase land at a less price than that at which it has been assessed for land tax purposes?

Senator Bakhap - A man should not be permitted to buy it at less than its assessed value.

Senator SENIOR - Seeing that every land-owner has a right to make his own valuation, no objection can be urged to the proposal which I have put forward.

Senator Bakhap - In Tasmania the land can be purchased by the Crown at the land-owner's valuation.

Senator SENIOR - My honorable friend has said that the Government are on the horns of a dilemma, inasmuch as, if they reduce the value of land, they are morally bound to find a purchaser for it.

Senator Bakhap - If the Government force a sale they ought to find a purchaser for the land.

Senator SENIOR - I do not think that the Government intend to force a sale. Rather do they propose to bring about a condition under which it will be more profitable for the many to cultivate the land than it will be for one individual. Then the honorable senator urged that the " fat man " is a benefactor.

Senator Bakhap - If he has brains he is a benefactor.

Senator SENIOR - Who was the benefactor in the case which I have just cited - the man who held the 700 acres to feed 700 sheep, or the twenty-six families who resided upon it with advantage to the district council and to the State?

Senator Bakhap - Who cut it up?

Senator SENIOR - I have demonstrated that the honorable senator is on the horns of a dilemma.

Senator Bakhap - Why does not the 1._- _-_ 1.1 senator tell us that the landowner himself cut it up before the Federal land tax was imposed ?

Senator SENIOR - That benefactor was able to get £10 per acre from individuals like myself who were anxious to have a home of their own, so that, when old age overtook them, they would not be obliged to wander the streets. Yet for land tax purposes, he was paying only upon a value of £2 per acre.

Senator Bakhap - If the honorable senator chooses to offer £10 per acre for land which is assessed at only £2 per acre, he will be able to get a lot.

The PRESIDENT - Order ! The honorable senator must allow Senator Senior to make his speech without interruption. He has already had a fair opportunity of expressing his own views.

Senator SENIOR - I wish to show unmistakeably that the arguments which have been advanced in opposition to the Bill have no substance in them. As to the prices that have been paid by the State Governments for land repurchased by them, it has been said that those prices were not up to the normal value of such land. I have seen a good many estates cut up and sold in South Australia, and I say without hesitation that in the majority of them the land was bought by the Government at a price very much in excess of its true value.

Senator O'Keefe - That has been the experience of every State.

Senator SENIOR - Yes. The Government as a purchaser has, therefore, been obliged to give increased prices for land. Every estate which they have purchased has made the price of the next estate which they desired to acquire, higher. Their competition in the open market has increased the value of land.

Senator Bakhap - The honorable senator does not believe in competition in the open market?

Senator SENIOR - Not when competition results in a value in excess of its real value from the stand-point of the user.

Senator Millen - If the purchase of land by the Government has resulted in an increased price being paid for it, I. suppose that purchases by individuals would have a similar result?

Senator SENIOR - I admit that. But when the Government, with more money than private individuals, go into the open market as a big buyer, the result is to impart a fictitious value to the land.

Senator Ready - And the Government are another competitor.

Senator SENIOR - Yes, and a very strong competitor. Consequently Senator Millen has not made much out of his interjection. A great deal has been said as to whether this taxation is moral or immoral. Our opponents say that it is immoral. I contend that it is perfectly moral. Senator Millen interjected just now that if private individuals purchased land, the result must be to increase its price. That is not considered immoral; yet I venture to say there is quite as much immorality in it as there is in this taxation. The increased price paid by a private individual will profit only the owner of the land, whereas the increased taxation proposed will profit the whole community. The money thus derived is to be used for the benefit of the whole of our citizens. Nobody ques tions the morality of the landlord who raises his rent. That is perfectly moral; but immediately the Government raise a tax it becomes immoral. Where is the decalogue that defines the morality or immorality of the two cases? I hope we have heard the last of that argument. The honorable senator said we could not prevent the aggregation of land, and instanced a case where he had been talking to a Horsham settler. A lot of those settlers came from Mount Gambier, and I know the way some of them left there. There is no need to revive the matter now. They were settled on land in and near Mount Gambier, and left it to go to Horsham because they could get land cheaper there. The people who left Horsham sold out from there to get cheaper land somewhere else. What has that to do with the aggregation of large estates? Parliament is all powerful in that matter. It can legitimately and morally say, "No man shall own more than a certain amount of land." This would not be overstepping the bounds of justice to the whole community, or of right to the individual himself. The honorable senator said he would not object to the tax if it was needed to meet war expenditure. Why should he agree to it if its purpose is to pay a man in London, and object to it when its purpose is to pay a man in Australia, seeing that the money is being raised for revenue requirements? The honorable senator would favour the individual across the ocean in preference to the individual who lives in Australia. If it is right to pay interest with the money, it is also right to pay part of the principal. The Bill cannot be moral and immoral at the same time. There is no strength in the honorable senator's arguments. He says a man has rights, even if he has £100,000 worth of land. No one says that he has not; but I want to put forward the rights of the disinherited man. The man who has not £1 worth of land value comes in somewhere; and, after all, there are comparatively few land-holders in the Commonwealth. The honorable senator says that the right to hold property is one of the rights of man; but I contend that the right to live is greater than the right to have. If the tax leads to the disintegration of many of these large estates, and the settlement of popu- lation on them, it will lead to greater prosperity and progress, and, incidentally, bring in greater revenue through the increase of population. The tax is righteous from beginning to end, and I regret that any person is ready to stand up and oppose it. In all its aims and purposes it is in the best interests of the Commonwealth and of the people as a whole.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clause 1 agreed to.

Clause 2 - .

The First Schedule to the principal Act is repealed, and the following schedule is inserted in its stead: -


Rate of Tax whenan Owner is not an Absentee.

For so much of the taxable value as does not exceed£ 75,000, the rate of tax per pound sterling shall be One penny and one-fifteen thousandth of one penny where the taxable value is One pound sterling, and shall increase uniformly with each increase of One pound sterling of the taxable value by one-fifteen thousandth of one penny.

For every pound sterling of taxable value in excess of £75,000 the rate of tax shall be Ninepence."

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