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Friday, 9 December 1927

Senator OGDEN (Tasmania) . - I desire to refer to the collection of income tax. My views on this subject may not be popular in certain quarters; they may not even meet with the approval of the majority of honorable senators. There are some who believe that the Commonwealth should abandon the field of direct taxation. I do not hold that view. On the contrary, I believe that the Commonwealth should be the sole collector of income tax. My reason for that view is that, with one collecting authority, taxation would be more equitably distributed over the whole of the Commonwealth. At present, the heavier taxes necessarily imposed by some States place a handicap upon those States. For the year 1924-25 direct taxation - chiefly income and land taxation - was levied by the States at greatly differing rates per head of the population. According to the Commonwealth Year-Book the direct taxation per head in the several States for that year was as follows : - Tasmania, £5 19s.11d.; Queensland, £4 13s. 9d.; South Australia, £4 5s.1d.; New South Wales, £3 12s.;Western Australia, £3 7s. 3d.; and Victoria, £2 18s. 2d. Victoria with a per capita taxation of £2 18s. 2d. has an enormous advantage over Tasmania, where the rate is £5 19s.11d. People in Tasmania, instead of investing their money in their own State, invest it in Victoria, in order to gain the advantage of the lower taxation. That operates to the detriment of Tasmania. The same thing is true to some extent of Queensland. By investing their money in Victoria, these people obtain greater returns, but they benefit Victoria at the expense of their own State. That is the position to-day. It is one we should endeavour to overcome under the Federal system. We believe that all the States should be placed on an absolute equality. The way to accomplish that objective is for the Commonwealth to collect, as far as possible, all direct taxation. Some may think that such a system would tend towards greater centralization of the Federal powers and that the States would be left without any means of collecting additional revenue. Under a system such as I suggest the Commonwealth Government would have to take into consideration the amount of taxation surrendered by the States and give them an equivalent by taking over a larger proportion of the State debts. I cannot recall anyone ever seriously opposing the scheme I am now submitting which, in my opinion, the Commonwealth and State Ministers should consider at their next conference. The crude rates do not accurately convey the burden being; borne by individual taxpayers becausein the more prosperous States the assessments are higher, thus indicating a higher tax paying capacity. According to the figures of the Tasmanian Statistician, who is a Federal officer, the severity of taxation works out as follows: - New South Wales, 77s. ; Victoria, 67s. ; Queensland, 122s.; South Australia, 94s.; Western Australia, 92s.; Tasmania, 129s. per capita. The burden upon individual taxpayers is even greater than the direct taxation rates disclose. Is is much heavier in States such as Western Australia and Tasmania where the average income is much lower. If we could dispense with these inequalities we would be aproaching the ideal embodied in the Federal Constitution. I am looking at this matter from the viewpoint of the Commonwealth and the States rather than that of the taxpayers, because, after all, the Commonwealth and the States have to raise revenue in order to carry out their respective functions. I do not see why there can be any valid objection to my proposal, except from State Governments and State Treasurers, who would be anxious to reserve the right to impose additional income taxation should they desire additional revenue. We are not reaping all the benefits of federation, while taxpayers in Victoria pay, by way of direct taxation, £218s. 2d. per head of the population, and those in Western Australia £3 7s. 3d., whilst Tasmanians have to bear, or had to bear in 1925-26, the burden of £5 19s. lid. per head. Those were the figures, that have since been reduced. Each State should be given an equal opportunity under the Federal union. I submit the proposition as one worthy of the consideration of the Government.

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