Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Monday, 21 March 1927

Senator OGDEN (Tasmania) .- I am bound to invite a division on this clause, which repeals those sections of the Surplus Revenue Act 1910, that provide for the capitation payment to the States. I base my opposition on the fact that the Government has provided no alternative, but simply asks us to trust it to make what terms it chooses if the States are not satisfied to meet the Commonwealth Ministers in conference. Is it fair, I ask, to place in the hands of the Commonwealth Government such a mighty weapon? And even if the States do meet the Commonwealth in conference, after the abolition of the capitation grant, they will be at a distinct disadvantage. The Federal Treasurer, armed with this legislation, will have a clear field, and if he chooses - I do not say he would - he can coerce the States. We must assume that any future proposals of the Treasurer will embody generally those which he submitted to us last session, when he proposed that the Commonwealth should vacate 40 per cent, of the field of income taxation, and give up the Commonwealth land tax, the Commonwealth amusement tax, and the Commonwealth estate duties. I am certain that, under such an arrangement - I am speaking largely on calculations of State officials^ - these sources of revenue would not enable the States to receive that amount of revenue which is collected by the Federal authorities. Senator Pearce tells us that our opposition to the bill is based upon the fact that we are following the State Governments instead of the voice of the people of the States. He is assuming that the people of the States are not opposed to the Government's proposals or that they are not taking 'sufficient interest in them. I am not considering the position of the State Governments; but expressing what I believe to be the general opinion of the people that these proposals will result in heavier taxation. Tasmania has already the highest direct taxation per head of any State in the Commonwealth.

Senator Reid - That is not so.

Senator OGDEN - I have not the latest figures at hand; but I am safe in saying that, based on the capacity of the people, Tasmania's taxation per head is higher than that of any other State. The Tasmanian people cannot bear heavier taxation. Tasmania recorded a larger majority in favour of federation than any other State, and has always been loyal to the federation, and to the Federal governments which have held office.

Senator Givens - Why should the Commonwealth continue to tax the people of Tasmania through the Customs and hand over the revenue so obtained to the State Government?

Senator OGDEN - It is not a matter of how the revenue is obtained, but of how the States are to be recompensed if the per capita payment is abolished. Doe3 it matter if the revenue is raised in the form of Customs and excise duties, or in the form of direct taxation? It is better to collect revenue from direct taxation.

Senator Givens - The State Governments have full power to do that.

Senator OGDEN - Yes; but they will have no guarantee that the field of direct taxation will be left solely to them. I can imagine Senator Grant, for instance, as treasurer of a Labour government, advocating the reimposition of a Federal land tax. Tasmania and Western Australia are in a worse position than any of the other States. During the last calendar year approximately 2,000 ablebodied persons, many of whom had been educated and trained in Tasmania, settled on the mainland.

Senator Sampson - Then Tasmania will receive less in this financial year than was received last year.

Senator OGDEN - The Minister said that in the case of the two smaller States the per capita payment had remained stationary, and that in two of the larger States it had increased. Surely the Minister can see that those States whose population is increasing will benefit equally under .the proposed system as they would under the present arrangement. When a State loses an able-bodied taxpayer it. is deprived of his producing capacity, as well as of approximately £2 per annum which he would pay in taxation. As the population of Victoria, New South Wales, and Queensland is increasing, those States will benefit under the proposals of the Government, and will probably receive more than they would under the per capita system. I am afraid that if this measure becomes law the State Treasurers will have to raise additional taxation, and that Tasmania will be further penalized. I regard the duties of the Senate as sacred. I wish the Constitution to be preserved and the close federation of the States adhered to. I do not wish to lessen the influence and prestige of this Chamber. I want it to be a strong and virile branch of the legislature, and one which is respected and admired by the people. But if Ave act in a way which is contrary to the welfare of the various component parts- of tlie Commonwealth, we shall, as the late Sir Edmund Barton said during the convention debate, " threaten the solidity of this great federation."

Senator Reid - Does the honorable senator think that the division this afternoon will assist in that direction ?

Senator OGDEN - Yes. If we seriously weaken the sovereign powers, and interfere with the self-governing rights of the States, we are tending towards a" loose confederacy. Whether we admit it or not, there is nothing so likely to lead to the much-desired goal of unification as the proposals before us. Nothing can assist the Labour party more in that direction than this proposal, which a majority of honorable senators are supporting. The present Treasurer said some years ago that he believed in unification. I do not say that that is his objective today, but the whole trend of federal legislation and effort is in the direction of making the Commonwealth the dominant financial power. The States have equally important functions to fulfil. I know this clause will be carried, but I am voicing my strong protest - not on party grounds - against an action which I believe will antagonize tlie States, and make it necessary for them to impose higher taxation which the people, par- ticularly those in the smaller States, cannot afford to pay.

Suggest corrections