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Wednesday, 4 August 1926

Senator GRANT (New South Wales) . - There are so many subjects mentioned in the budget that, in the limited time at my disposal, it would be impossible forme to discuss more than a few. I should, however, be lacking in my duty if, after all the statements we have heard concerning the best methods of raising revenue, I failed to place on record what I regard as the modern canons of taxation. It is positively humiliating and absurd to hear honorable senators expound their theories concerning the method of raising our national revenue.

Senator Thompson - Does the honorable senator propose to submit a new theory ?

Senator GRANT - No; it is my intention to extricate the honorable senator and some of those with whom he is associated from the morass which has engulfed them for so long. The honorable senator, I believe, understands the theory which I intend to elaborate, but for reasons best known to himself he carefully refrains from expressing his opinions on it. Some honorable senators recently elected to this Chamber should be supplied with the information I have to give, and if I place it at their disposal they will perhaps be. spared the necessity of giving utterance to the erroneous views expressed by many of those with whom they are now associated.

Senator THOMAS (NEW SOUTH WALES) - What does the honorable senator suggest?

Senator GRANT - Senator Thomas and Senator Pearce could give an interesting discourse upon the same subject, but I believe Senator Pearce could handle the subject more effectively than Senator Thomas and I combined. Unfortunately, however, the Minister has for some years been associated with a number of gentlemen who have good intentions, but whose views on taxation are far from being up to date. The following canons of taxation are to be found at page 406, chapter 3, volume 2, of the memorial edition of the writings of Henry George: -

The best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions : -

1.   That it bear as lightly as possible upon production - so as lease to check the increase of the general fund from which taxes must be paid and the community maintained.

2.   That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers - so as to take from the people as little as possible in addition to what it yields the government.

3.   That it be certain - so as give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to law breaking and evasion on the part of the taxpayers.

4.   That it bear equally - so as to give nocitizen an advantage or put any at a disadvantage, as compared with others.

Senator Thompson - Those principles; have been exploded ages ago.

Senator GRANT - That is an erroneous idea. In Queensland local taxation is imposed and collected in strict accordance with the principles I have just enunciated, and Senator Thompson cannot deny that the system has worked satisfactorily. . No objection has been taken to that method of taxation in the local government of Queensland during the last 40 years. Instead of having been exploded, it is firmly entrenched in Queensland, and is working exceedingly well. The progress of Brisbane to-day is almost as great as that of Sydney, mainly on account of its system of taxation.

Senator Thompson - Oh, no!

Senator GRANT - Men who come from Queensland are not found suggesting that Great Britain should finance Australia, as Senator Payne has suggested she should. I cannot imagine any man in his normal senses making such a suggestion. This country is unequalled in many respects, and is surpassed in none.

Any man who holds out his hand for a dole from Great Britain ought to be heartily and everlastingly ashamed of himself. That attitude is typical of Tasmanians. Their training appears to have made them determined to at all hazards collect something from somebody. One becomes tired of listening to the perpetual wail that Tasmania is in a state of poverty. This system of taxation is adopted by the local governing bodies in New South Wales, and no city in the Commonwealth is making progress as great as that of Sydney.

Senator Thompson - - Does the honorable senator "believe that Henry George is responsible for the adoption in Australia of the taxation of unimproved land values ?

Senator GRANT - Unquestionably. Such a system was not heard of before 1879, when Henry George first published his book, Progress and Poverty. It has been in operation in the shires and municipalities of New South Wales since the beginning of this century. Even conservative Sydney has not taxed improvements for many years. If you care to build a home for yourself in Hobart, the council in that city - which is an obsolete body - immediately pounces upon and penalizes you in proportion to the amount of capital you invest and the labour you employ. That is a reason for the constant wail by Tasmanians that their State" is poverty-stricken. They have not the sense to remove taxation from people who are prepared to invest money and make the State progress. I have in mind the case of a man who built in Macquariestreet, Sydney, 64 residential flats. He is not taxed according to the amount he invested or the labour he employed. He pays no more than the man who possesses next door an ordinary three-story building. That system of taxation accounts for the fact that the citizens of New South Wales do not adopt the cadging attitude which is typical of the Tasmanians. They pay their way. Taxation is removed from industry, and people who invest their money are not penalized. I cannot understand any man saying that this idea is dead and buried.

Senator Thompson - Sir Austen Chamberlain made a similar statement in the House of Commons the other day.

Senator GRANT - The honorable senator ought not to pay the slightest attention to Sir Austen Chamberlain. He is quite out of date. That type of man is in control of England to-day. The examples I have given could be multiplied all over Australia. Certain areas in South Australia, and even in Victoria, are being rated for local purposes according to the unimproved value of the land. Queensland has a land values tax, not precisely on the lines laid down by Henry George, but, nevertheless, one that is not too bad.

Senator Thompson - It is the worst system of land taxation in Australia.

Senator GRANT - It is regarded as the most scientific method of taxation in the Commonwealth. I do not agree with it. The most scientific and up to date, and the fairest system of taxation is the local rating system, which is to-day enjoyed by the citizens of Sydney. A ratepayer has no difficulty in computing the amount that he has to' pay. There is no corruption, and no evasion. Payment is made in proportion to the value of the land which you own, whether you are a widow, a returned soldier, or any other type of individual. That system could be adopted with immense advantage by the Commonwealth. We merely tax foreign-made goods.

Senator Thompson - The Commonwealth taxes land according to its unimproved value.

Senator GRANT - With a £5,000 exemption.

Senator THOMAS (NEW SOUTH WALES) - Who introduced that provision?

Senator GRANT - It was engrafted on the platform of the Labour party at the interstate triennial conference that was held in Brisbane in 1905 by gentlemen like Senator Lynch, Mr. W. A. Holman, Mr. J. C. Watson, and others, who for one reason or another are not now associated with the Labour party. In the language of Shakespeare, " The evil that men do lives after them." The evil which was done at that conference continues to live after those whose names I have mentioned have ceased to belong to the Labour party. Doubtless some fine day an alteration will be made. There is not a £5,000 exemption under the system which is adopted by Queensland and the Sydney municipalities.

We were told this evening that 11,000,000 acres of vacant land in England is suitable for cultivation, andyet the extraordinary statement was made by Senator Payne that the British Government, which is now paying about £60,000,000 per annum in unemployment doles, should be asked to finance a number of English boys to grow trees in Tasmania. I hope that the British authorities will not be beguiled by proposals of that nature. What is wrong with England that she does not settle her boys in their own country? Great Britain, for its size, is probably as wealthy as any part of the world.

Senator THOMAS (NEW SOUTH WALES) - Would the honorable senator say that of a freetrade country?

Senator GRANT - Great Britain never was and never will be a freetrade country. A revenue tariff is collected on tea, sugar, tobacco, and practically everything that is good to eat or drink. I have endeavoured to ascertain from various sources how much rent is paid per annum by the people of Great Britain to the blueblooded landlords for the right to live in the country which they call their own. Some time ago I addressed a letter upon this subject to a gentleman residing in London, who is adjudged to be well informed on the matter, and I received the following reply - 43 Barton Court,

Chelsea, 8.W. 3, 1st July, 1926.

Senator J.Grant,

The Senate, Melbourne, Australia.

Dear Sir, -

Thank you for your letter of the 21st May, which has been sent on to rae. Unfortunately, however, there are no available statistics as to the rents paid in Great Britain in respect of capital land value, as distinguished from improvements. So far as I am aware, the latest information bearing on the subject is that collected and set outin Note Q, " Probable Land Value of Great Britain," in my book " Land Value Policy" (1924), of which note I have pleasure in enclosing a copy. I am also sending for your acceptance, under another cover, a copy of a new book of mine just published, " Our Land and How to Make it So."

I am, yours faithfully, (Sgd.)J. Dundas Whits.

It would appear, from the book referred to that the total unimproved value of the land in Great Britain is approximately £3,000,000,000, but the owners of that wealth contributed to the national revenue last year only about £2,000,000, as against £900,000,000 collected from the people by means of Customs taxation, income tax, and other taxes on industry. Yet honorable senators like Senator Thomas coll England a freetrade country! We are frequently assured that Australia has adopted a protectionist policy; but I again remind honorable senators that the real object of our fiscal system is to produce revenue. According to the Estimates for next year the Treasurer expects to raise by means of our so-called protectionist policy the sum of £40,500,000. Does not that convince every honest protectionist that, so long as that enormous revenue is received, the hated foreign goods manufactured in low-wage countries will still 'be allowed to enter Australia ? The Government expects to derive from the land tax £200,000; from the income tax, £6,450,000; from estate duties, £50,000; and from the entertainments tax, £50,000; a total, with the Customs revenue, of £47,250,000. A number of other items of revenue bring the grand total to £51,382,000. Nobody would resent a protective tariff that would exclude foreign goods more than the present Minister for Trade and Customs (Mr. Pratten).

I have taken a keen interest in the establishment of the Seat of Government at Canberra, and for a number of years I have seized every opportunity to encourage those who desire to make their homes or engage in business there. The Government did not make building allotments available at Canberra until public opinion in favour of the adoption of that course could no longer be resisted. Then a few allotments were offered to the public on the leasehold system to the highest bidder, with re-appraisements at the end of the first 20 years, and every 10 years thereafter. That system leads to speculation in land,which was never contemplated in . connexion with Canberra. I have it, on unimpeachable authority, that land which, in 1924, was obtained for a few pounds by persons who had no intention of building on it, has since been disposed of at a premium of £1,100. In some cases, I understand that a premium of £1,500 has been asked to secure blocks. The demand for land at Canberra is so keen that persons who desire to build there are willing to pay enormous sums to obtain it. Itis my intention to move for the appointment of a select committee to inquire into, and report on, this matter. The regulations ought to be altered to allow for more frequent re-appraisements. So long as the present regulations remain in operation, speculation in land at Canberra will continue. In fairness to the progress of Canberra, the existing state of things should not longer be allowed. The commissioners, no doubt acting under instructions from the Government, refuso to make other blocks available, so that persons who desire to build at Canberra are compelled to pay large sums if they wish to secure land there. The commissioners and all concerned, should be placed beyond' suspicion. The commissioners should be instructed to make land available wherever required, provided that the lessees pay at auction the annual upset rental. By adhering to its policy of having re-appraisements made every 20 years, the Government has made land speculation at Canberra possible. The only way to prevent further land speculation there, is by having more frequent re-appraisements. The profits would then go to the commission. Wo are told that Canberra is now asink into which millions of money has been, and will still be, poured. That could be stopped if land were made available for persons who desire to build there.

I desire to refer to the infamous proposal of the Government to impose a tax on petrol. In this connexion, I am ata loss to find language in which to express myself adequately. It is characteristic of this Government that on every possible occasion it penalizes industry. If a man earns a fair income, the Government pounces upon it in the form of an income tax; if he dies and leaves a widow, his estate is taxed. This petrol tax is a new abomination. At one time in New South Wales, drivers of vehicles had to pay a toll for the privilege of travelling along the roads.

Senator Foll - That is the position now, at the Spit, Sydney.

Senator GRANT - Unfortunately, that is so. The result is that the land-owners at Manly have had the value of their property increased by £1 a foot. The toll imposed on motorists who cross the bridge at the Spit is an unfair tax upon them. I am glad that the same system is not to be adopted in connexion with the Sydney Harbour bridge. I cannot imagine how any Government can have the effrontery to impose a tax upon petrol. Already the motorists of Australia are being penalized in many ways. It would appear that everything possible is being done to prevent the use of motor vehicles in this country. I have no objection to a. nominal licence-fee being charged to ensure that drivers of motor vehicles shall be competent, or to a small registration fee being imposed on motor cars; but I do object to motorists being called upon to pay a tax in proportion to the number of miles travelled. I ask leave to continue my remarks at a later date.

Leave granted ; debate adjourned.

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