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Thursday, 8 December 1927

Senator HOARE (South Australia) . - Senator Payne has argued that the worker will benefit by the proposed reduction of 10 per cent., because a greater amount will be spent in industry. He has also asserted that the worker is exempt from income tax. Surely he does not believe that the men who are at the head of big businesses pay the income tax that is imposed on them ! Wherever possible they pass it on, and that process continues until it eventually reaches the bottom dog.

Senator Payne - If he is relieved of taxation there is nothing for him to pass on.

Senator HOARE - Does the honorable senator believe that the prices of commodities will be lowered by one farthing, because of this proposed reduction of 10 per cent. in income tax? Of course they will not! The workers will be asked to pay as much as they pay now. It is well known that immediately income tax or any other tax is increased it is passed on, wherever that is possible, until it reaches the wage-earner. There was a reduction in 1925, but the worker did not benefit by being able to purchase his goods more cheaply. There will be no reduction because of this concession. The Government has shown that it is on the side of big business. The greatest advantage will be obtained by those who are bestable to bear the burden. The men with an income of £10,000 a year will have their tax reduced by £191 each. Those who have income amounting to £20,000 a year willpay £491 less than they are now paying; and those fortunate few whose income amounts to £50,000 a year are to have their taxes reduced by £1,391. A better plan would be to give the full amount of the reduction to those who earn up to £1,000 a year, and then to reduce it proportionately as the income increased. Why should a man who has an income of £50,000 a year be given this reduction?

Senator Payne - Would the honorable senator take all his income from him?

Senator HOARE - We do not want to take it all from him; but he is not deserving of any reduction, because he is well able to pay the tax. I believe in a tax on incomes, and am willing to pay my proportion. So long as we have such an immense debt, not one farthing should be taken off this tax. The Government ought to assist those who are least able to bear the burden.

Senator Payne - How would the honorable senator relieve them?

Senator HOARE - It is the duty of the Government to say how that can be done. Senator Payne went on to say that, in his opinion, these deductions would benefit the workers.

Senator Payne - I said they would benefit the community generally.

Senator HOARE - How can that be the case? The man on the land cannot pass on the tax to others.

Senator Payne - The honorable senator said that every one passes it on.

Senator HOARE - I said that those connected with big businesses do so. The man on the land, and the man in receipt of a regular salary or wage, cannot pass on the tax. Our protectionist policy has resulted in big incomes being earned by a few persons in the community, yet the bulk of the income taxation is paid, not by them, but by persons in receipt of wages and salaries, who cannot pass on the tax. If, instead of income taxation being reduced by 10 per cent., the existing tax were allowed to remain, the Government would be able to proceed with a number of reproductive works which would not only benefit the workers, but would also be an asset to the country. The Federal income tax was first imposed to meet our obligations incurred in connexion with the war. The war has ended, but many of those obligations still remain.

Senator Payne - Did the honorable senator expect otherwise?

Senator HOARE - No; but if the indebtedness remains the taxation imposed to meet it should also remain.

Senator Foll - Is the honorable senator in favour of increasing the income tax?

Senator HOARE - Yes, on salaries beyond a certain amount. I suggest that the rate of tax should be increased on incomes exceeding £3,000. I do not advocate that it be increased on small incomes. I believe that those who receive most from the country should pay most by way of taxation.

Senator Foll - Why have increased taxation when there is a surplus?

Senator HOARE - I should decrease taxation in other directions.

Senator Duncan - Would the honorable senator advocate a reduction of customs duties?

Senator HOARE -AlthoughIthink that our customs duties in some instances are too high, I should probably not be in order in discussing customs duties at this stage. For many of the goods produced in Australia we are paying far too much. That money is taken from the pockets of the workers. The result is that our industries are being strangled. I do not consider that I am entitled to any reduction in the income tax on my salary of £1,000 per annum. I am able to pay my share of the expenses of government, and I should be made to do so. The man in receipt of £3,000 per annum should pay more than I do, while the man whose salary is £10,000 per annum should contribute a great deal more.

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