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Tuesday, 15 December 1914

Senator PEARCE (Western Australia) (Minister of Defence) . - I move -

That this Bill be now read a second time.

This measure amends the principal Act by including Crown leases within the area of taxation. It also contains a provision allowing the land tax to be remitted in cases where, by reason of drought or adverse seasons, the returns from the land have been seriously impaired.

Senator Millen - Is this the Bill which puts the tax on leaseholds?

Senator PEARCE - It is.

Senator Millen - You bring the Bill here after 10 o'clock at night, and want to put it right through ?

Senator PEARCE - The Leader of the Opposition, as well as every other honorable senator, is quite aware that this measure was before another place, and had to come before the Senate. It is possible, unfortunately, that other Bills coming up at short notice may have to be dealt with. The honorable senator knows that there is a general desire to close the session.

Senator Millen - It is not manifest in the other branch of the Legislature.

Senator PEARCE - My honorable friend might address a few words on that subject to bis colleagues.

Senator Bakhap - You are also attempting to tax mining leases, which no State Government thinks of doing.

Senator PEARCE - It is extremely improbable that under this measure any n,ming lease will contribute very much to the revenue. The leaseholds which it deals with are: Perpetual leases, right of purchase leases, pastoral leases, grazing leases, cultivation leases, homestead leases, and mining leases. Other Crown leases will not be taxed. In the valuation of mining leases, the value of the minerals reserved to the Crown is- to be excluded. The amendment of section -29 of the principal Act under which certain leaseholds are taxable provides that their value' is to be calculated in the same way as ordinary leaseholds under sections 27 and 28, that is, on the value exceeding £5,000. The amount expected to be realized under this taxation in a full year is £500,000. I think it must be admitted that at present there is a large quantity of land held under varying forms of leasehold which is quite a legitimate subject for taxation. The taxation will be based on the difference between the economic rent of that land and the amount of revenue payable by the lessee to' the Crown. - Senator SENIOR - How is the difference to be arrived at?

Senator PEARCE - By valuation, in the same way as we determine the economic value of freehold land. In Western Australia, there are Crown leases which were given many years ago. In some cases the rental of the leases was determined in a haphazard manner. In some cases the leases have not been subject to any re-appraisement. They have been increased immeasurably in value with the increase in productiveness and the development of the State. It is, un doubtedly, a fact that the increase in population and in the wealth of the State, has added to the wealth of these leaseholders without the State getting any return in the way of taxation. The Commonwealth has a perfect right, we think, to tax that value. We cannot see why these Crown leases should be exempt from taxation, when exactly similar land, which happens to be held in freehold, is taxable. That being so, the Government have brought before Parliament a proposal that this form of land values should be brought under the Federal Land Tax. I hope that my friends opposite will not raise any protest against going on with the measure to-night, because they cannot claim that it is in any sense new to them. They know that it was intended to bring the measure forward, and I am quite sure that my friend, the Leader of the Opposition, does not need any study of the Bill to arm him with arguments. He is too well acquainted with the land laws of the States, especially of his own State, to need to study this measure to prepare him for criticising the proposal. I submit, therefore, that although it has not been before the Senate long, honorable senators on the other side should be quite prepared to proceed with its consideration.

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