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Thursday, 8 December 1927

Senator McLACHLAN (South Australia) (Honorary Minister) . - I move -

That the bill be now read a second time.

This is a short bill to give effect to the policy of the Government as announced in the budget to grant taxation relief by reducing the rate of the land tax by 10 per cent. It presents none of the complications of the measure that the Senate has been considering during this sitting. It is a straightout cut of 10 per cent. in the present rate. The Commonwealth Land Tax was first imposed in 1910-11, the rate of the tax being1d. where the taxable value was £1, increasing uniformly by l/30,000d. with each increase of £1 in the taxable value until a maximum rate of 6d. was reached. This rate remained constant in further increases in the taxable value. In 1914-15 the rates were increased by approximately 30 per cent. The uniform increase was l/18,750d. instead of l/30,000d., and the maximum rate was increased to 9d. In 1918-19 the rates of tax were increased by 20 per cent. This was done as a war measure. In1922-23 they were reduced by 20 per cent. The rate applying last year was thus that which was imposed in 1914-15. The Government now proposes to make a reduction in existing rates of 10 per cent. This reduction in the rate of tax, together with the other concessions outlined in the budget, and dealt with in the Land Tax Assessment Bill is estimated to result in the actual collectins for this year being £445,900 less than those of last year. It may interest honorable senators to learn that the actual collections in recent years have been: -


Whatever may have been the original intention, the fact now is that the land tax is a revenue measure, and its effect on the breaking up of estates is negligible. The reason for the reduction in the rate is that the Government found it possible in framing the budget for this year to finance the Commonwealth with less taxation than it received last year, and, as the reduction of taxation has such beneficial effects on trade, commerce, and industry, it was decided to give relief in both land tax and income taxes to the fullest extent possible. The formula: laid down in the Land Tax Acts of earlier years are not being altered, but the bill now before the Senate provides that, notwithstanding anything contained in the existing law, the land tax payable in the future shall be the present rates less 10 per cent. This is considered to be the simplest way of providing for the reduced tax now desired.

Debate (on motion by Senator Needham) adjourned.

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