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Thursday, 8 December 1927

Senator FINDLEY (Victoria) . - The measure before us is so intricate that in introducing it the Leader of the Government had recourse to a carefullyprepared type-written report. Its main purpose is to reduce by 10 per cent. the tax levied on certain citizens of the Commonwealth. It also provides for other concessions. Income taxation was first imposed by the Commonwealth for the purpose of helping to finance the war, in connexion with which we incurred heavy indebtedness. The interest on the money borrowed to prosecute the war must be paid. That is being done, and in addition contributions are being made towards a sinking fund. It is true that during recent years our war indebtedness has been reduced, but in other directions our debts have increased to an even greater extent. In the circumstances, I ask whether it is wise at this juncture to introduce a measure to reduce the revenue of the Commonwealth by over one and a quarter million pounds per annum? Throughout Australia there is financial stringency, and a good deal of unemployment; some of the States are experiencing the worst season for many years. Men in the commercial and financial world look with apprehension at the immediate future. They realize that for some years Australia will be confronted with serious financial problems. That the governments of Australia, both Federal and State, realize the position is evidenced by the curtailment of their public works programmes. It has been said that this policy of curtailment will, so far as the Commonwealth is concerned, be applied first in connexion with the Postmaster-General's Department. Contemplated extensions of postal, telegraphic, and telephonic facilities are, I understand, not to be proceeded with because of the existing financial stringency. Every member of this Parliament has at some time or other urged that these facilities should be extended in the State or constituency which he represents.

Senator Sir George Pearce - And when his request has been acceded to he denounces the Government for extravagance.

Senator FINDLEY - The right honorable gentleman's interjection is uncalled for: I take exception to it. At no time have I found fault with any Government for proceeding with necessary works. If the Leader of the Senate will recall my speeches in the Senate from time to time he will see that I do not regard essential public works solely from an £ s. d. point of view. Attention has been directed to certain Government undertakings which have not shown a profit; but I am not so concerned with immediate profits as I am with the development and progress of the country. Our apparent financial stability to-day is due, not to the prosperity of Australia at the moment, but to excessive importations. The receipts through the customs house have been soaring year after year.

Senator Sir George Pearce - Do importations cause prosperity? That is a strange argument to be used by a protectionist.

Senator FINDLEY - No. The Government would make it appear that our financial position is so satisfactory that it can reduce taxation without anything serious happening. The customs receipts have been soaring year after year, and there is no doubt that the Government wishes them to continue to increase.

Senator Sir George Pearce - Is that why we are taking off £400,000 this year?

Senator FINDLEY - Such an admission was made by the Treasurer when the first proposal to alter the financial arrangement between the Commonwealth and the States was before another place. He then said the Government intended to vacate the field of direct taxation, as that form of taxation was unpopular. It wished to transfer an unpopular system of taxation from its shoulders to the States. It proposed to retain control of 60 per cent. of income taxation, and to surrender its right to collect land tax and estate and probate duties; but it altered its policy. The object of the Government at the period to which I am referring was to strengthen the position of the representatives ofthe Country party. The members of that party have always said that land taxation is unpopular, and is strongly objected to by the primary producers. The Treasurer thought that his first proposals for altering the financial arrangements between the Commonwealth and the States would be agreed to. He knew, however, that, apart from the proportion of revenue from direct taxation, reserved to the Commonwealth under its proposals, its only source of revenue would be the customs house. Under the present fiscal system too much revenue is being derived in the form of customs duties. Our present tariff is largely a revenue tariff. Under a real protectionist policy the customs revenue would be much lower; but I hope the time is not far distant when we shall have a truly protectionist tariff. With a reduction in income taxation, land taxation, dry seasons and general commercial depression, a reduction in direct taxation amounting to f 1,2>50,000 should not he countenanced. We are not in a position to give up such a large amount of revenue, especially when the Government intends to discontinue many works which are essential to the progress and development of Australia. If the Government does not propose to raise further loans for the present, it should not reduce direct taxation. The amount by which income taxation is to be reduced would finance many of the public works which are not to be proceeded with. Our liabilities 'are just as heavy as they have been at any period in our history, and the problems with which we are confronted are quite as great. In these circumstances the Government cannot afford to effect such a reduction, especially in view of the fact that all the States are financially embarrassed and the Commonwealth Government is in a sound position only on paper. The Government's apparently prosperous position is due solely to the fact that the major portion of its revenue is derived from the Customs House. We do not know what the next year or two will bring forth.

Senator Grant - It will be mo-re.

Senator FINDLEY - We do not know. A general election is to be held within the next twelve or eighteen months, and when the people are appealed to there may be a change of government.

Senator Herbert Hays - Would a Labour government reduce customs duties ?

Senator FINDLEY - I did not say that. Ours is not a truly protectionist tariff when we are collecting such large sums on goods coming to Australia. The Government admits that many of the duties are essentially for revenue purposes. I am a protectionist, and I believe in the highest duties being imposed upon goods' which can and are being manufactured in Australia. So far as my memory serves me, I have never insisted on a high duty being imposed essentially for revenue purposes.

Senator Foll - The honorable senator supported a higher duty on imported whisky.

Senator FINDLEY - If I did it was to assist the local manufacturers. Soma honorable senators believe that a low tariff would be the best for Australia. On the other hand there are some people who believe in absolute freetrade. Senator Grant is the only freetrader in this chamber. He believes a better form nf society can be established under freetrade together with the adoption of a certain principle.

The DEPUTY PRESIDENT (Senator Plain). - Order!

Senator Kingsmill - Does the honorable senator intend to refer to the bill?

Senator FINDLEY - The proposals of the Government in this instance have a -direct bearing upon the fiscal policy of the Commonwealth. The Government has proposed a reduction in income taxation only because we have excessive importations and a high revenue through the customs. Does any honorable senator suggest that the Government would propose a 10 per cent, reduction and provide for other concessions if it was not receiving a high revenue through the customs house? We have been told that the war was fought to ensure the safety of the lives and property of the people. Human life is the most sacred form of property. But there are others who, in addition to their lives, had substantial interests at stake in Australia, about which they were seriously concerned. And those citizens who were so protected are, many of them, better circumstanced to-day as the result of the war, and should continue to pay their fair and just contribution towards the liquidation of our war debt. There were many men in Australia who had little or no worldly wealth at the outbreak of the war, but who, during its progress, madu a great deal of money, and long before its termination became immensely wealthy. We know that during one period of the war, shareholders in some companies got back in the shape of dividends and bonus shares in less than three years the whole of the capital they had invested in them. Although from time to time these companies watered their stock, their shares are above par to-day, and in addition to paying high dividends they have been distributing bonus shares and paying bonuses. It would be no hardship to people so situated to continue paying the taxation they have been paying up to thepresent time, and for that reason and others Ihavepreviously mentioned neither by my voice nor by my vote can I give support to the proposed reductions in thisbill

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