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Wednesday, 11 August 1926

Senator NEEDHAM - I have read that speech very carefully. The right honorable gentleman's statement, which was very vague, was that the money would be obtained from Customs revenue. There was no mention of the imposition of a special tax on petrol.

Senator Crawford - Yes, a tax to be paid by motor users.

Senator NEEDHAM - The Prime Minister did not say that there was to be a special impost upon motor users, or on any one else using petrol. As there was an overflowing Treasury, particularly as a result of the heavy Customs receipts, it was thought that the money would foe paid out of the general Customs revenue. The first proposal of the Government was that the States should contribute on a £1 for £1 basis, but as a result of representations made by the States the Commonwealth Government receded from its position, and the States are now to contribute 15s. for every £1 paid by the Commonwealth. If the Commonwealth wishes to assist the States in the matter of road construction it should earmark a portion of the Consolidated Revenue, and not impose a special tax which will have to be paid by motor users, many of whom will not benefit in the slightest degree. That is ray vital objection to the bill. There is ample money available to assist the States in constructing roads.

Senator Thompson - Apparently the honorable senator has not read the "Obligations of the Commonwealth," issued by the Treasurer.

Senator NEEDHAM - I have read so many of the Treasurer's statements that the more 1 read the less attention I give them. The tax which is now being collected will undoubtedly result in the price of petrol being raised.

Senator Crawford - It has been collected for a month, and prices have not been increased.

Senator NEEDHAM - The British Imperial Oil Company and the Vacuum Oil Company, the principal distributors of liquid fuel in Australia, have already said they intend to pass on the tax to petrol users, and notwithstanding the hysterical utterances of the Prime Minister in another place they will' undoubtedly do so. I am surprised at the outburst of the right honorable gentleman, who, knowing the manner in which these combines have been operating for years, could have easily given utterance to the same remarks long ago. I do not hold any brief for these oil interests. The party to which I belong directed attention years ago to the injury which these monopolies are doing, not only here, but in other parts of the world. The Prime Minister further stated that he intends to ask Parliament to grant further moneys to enable the Comonwealth Oil Refineries Limited to combat the evil influence of these two companies. The Government had an opportunity some time ago to duplicate the plant of the Commonwealth Oil- Refineries Limited, and thus enable its output to be increased. The desirability of doing so was suggested by a committee which inquired into the whole question of the supply of liquid fuel in Australia. The hysterical outburst of the Prime Minister was merely an attempt to justify the action of the Government in imposing a higher duty on petrol. If the position had been clearly put before the people at the last election their verdict would have been totally different.

Senator Crawford - The position was clearly put before the electors.

Senator NEEDHAM - I deny that. Did the Prime Minister say that an additional tax of 2d. a gallon would be imposed on petrol? He said that money would be obtained from Customs revenue!

Senator Crawford - He said it would be paid by motor users.

Senator NEEDHAM - Any one reading the policy speech would conclude that it was the intention of the Government to obtain the money from general revenue: Fully 70 per cent, of the tax will be paid by persons resident in the metropolitan area, who will not benefit under this scheme, since under clause 7 of the agreement, cities and towns with a population of over 5,000- cannot derive any advantage. The Prime Minister, when referring to Sir Harry Chauvel'3 report, referred to the necessity of spending money on road construction in the interests of defence, and if that is the objective of the Government the money should be contributed by the whole community. The States should be allowed to levy a petrol consumption tax as two> of the States are already doing.

Senator Crawford - The States cannot levy a Customs duty.

Senator NEEDHAM - No, but South Australia and Western Australia are, as I have said, already levying a petrol consumption tax "to provide funds to cover the costs of road construction.

Senator Crawford - The legality of that action is to be tested.

Senator NEEDHAM - I am surprised at a member of this Government speaking of the legality of any action. Although certain legislation introduced by this Government, and passed by Parliament, was found to be unconstitutional, one of its Ministers now speaks of the legality of the action of State governments. Dr. Earle Page stated -

There has been no agitation against these proposals except from the newspapers.

He is wrong. I have received innumerable telegrams from various bodies throughout the Commonwealth protesting against the imposition of this tax, and I have no doubt that -other honorable senators also have received similar communications. During the election campaign, Dr. Earle Page boasted that since he had been in office he had been responsible for a reduction of direct taxation. On a former occasion I was able to show that the reductions made by the Treasurer affected mainly the wealthier sections of the community, and were of little benefit to men on the lower rungs of the ladder ; also that during the same period indirect taxation had increased appreciably. Whilst a private member of the Country party, the honorable gentleman frquently attacked the Government of the day in connexion' with its taxation proposals, stating that the time had come when we should cut our coat according to our cloth. It is a pity that the Treasurer does not, as a Minister, practise what he preached as a private member. The money for these road proposals should come, not from a special tax on motor users, but from the general revenue. Personally, I am opposed to the bill. Again I say that I am expressing my own opinion. Other honorable senators associated with me on this side of the Senate have perfect liberty to state their views, and vote in accordance with them.

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