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Tuesday, 13 December 1927


Senator NEEDHAM (Western Australia) . - A few days ago I spoke at some length on the general question of land taxation I then referred to the measure now before the Senate. I pointed out that there was a danger of encouraging the establishment of large estates; which I said were inimical to the well-being of Australia, as they were largely responsible for the unemployment prevalent in every State of the Commonwealth. 1 also instanced the small proportion of money which the land-owners of Australia contribute in the way of taxation to the Commonwealth revenue. I mentioned that idle lands meant idle hands, which are a menace to any community, and referred in detail to the economic situation. The reduction of 10 per cent, is not justified, as it will benefit only the rich land-owners of Australia.


Senator McLachlan - This measure does not provide for the reduction of 10 per cent.


Senator NEEDHAM - I am aware of that. The bill providing for that reduction was passed last week; but I am condemning that reduction . seeing that the financial position is acute, that we are faced with a heavy adverse trade balance, and with a serious unemployment problem. The principal provisions of this bill relate to the appointment of an appeal board, triennial valuations, and the abolition of retrospective assessments. I understand that the valuation board will deal only with matters relating to land values, and that assessments will still be made in the ordinary way. I agree that it is necessary to appoint a board of experts to value land in the various States for the purpose of taxation. I cannot agree entirely with the proviso which will make it possible for other matters to be referred to the court.


Senator McLachlan - It cannot be helped.


Senator NEEDHAM - It could be avoided in many cases. Land owners are to be given the option of appealing to either the Valuation Board or the. court. "We have had experience of one decision of the court. I refer to that which was given in the Jowett, case. I venture to affirm that it puzzled even the Commissioner himself. "With all due respect to the court, it Avas an absurd decision, which should make us chary of allowing the court to be moved too frequently. A board of experts could determine many cases. Land owners should not be given the right to choose whether they will go before the Valuation Board or the court; it should be specifically provided that there shall be only one court of appeal. Another provision to which I wish to direct attention is that which relates to triennial valuations. It is a very important departure from the existing procedure, under which valuations are made yearly. It will not be possible to apply to the three preceding years any higher valuation that may be determined. It is feasible to expect land in certain localities to increase considerably in value during a period of three years. If that value cannot be appraised during that period a considerable loss of revenue will be occasioned. I understand that the Treasurer (Dr. Earle Page) estimates that the loss will be approximately £80,000 per annum. That is a conservative estimate, and it is likely to be greatly exceeded. One can visualize many blocks of land in different parts of Australia which will increase in -value by leaps and bounds. If they were valued yearly there would be a big addition to our revenue from that source. I object also to the clause which deals with retrospective assessments. At the present time assessments can be made retrospective for a period of two years. If that practice ceases to operate there will be a further big loss of revenue. The Treasurer did not say so when he had charge of the measure in another place, nor has the Honorary Minister expressed such an opinion in this Senate. It is a wrong departure, and vicious in principle.


Senator McLachlan - Are not retrospective assessments also vicious?


Senator NEEDHAM - I do not think it is fair to abolish retrospective assessments, because the drain on the Treasury will be too severe. Let us assume that a piece of land was valued at a certain figure either last year or the year before, and subsequently the department learned that a section had been under valued, or that the valuers had left one section out of their calculations.


Senator McLachlan - That contingency is provided for.


Senator NEEDHAM - Under the existing system the department could reassess such land; hut under this proposal that will not be possible. The income tax law confers upon the department the power to make a reassessment in the event of a mistake being made by one of its officers. It has no hesitation in issuing an amended assessment in those circumstances, and the taxpayer is compelled to pay the additional amount. If it is considered right to apply that principle to income taxation it should be right to apply it also to land taxation. It is estimated that the 10 per cent, reduction will mean a loss to the revenue of £445,000. That is too big a concession to make to a few taxpayers, considering the financial position of Australia. If we add the loss which will be caused by the institution of triennial valuations and the abolition of retrospective assessments, that amount is almost doubled. So as to give honorable senators an opportunity to assess the real value of the bill before they vote cither for or against it, I move as an amendment -

That all the words after the word " That " be left out with a view to insert in lieu thereof the words " in view of the grave expanding obligations of the Commonwealth, manifested by adverse trade balances, increasing loan expenditure, of the urgent need for the sub-division of large estates, to increase production and to meet the keen demand for land, a reduction of the land tax is not justifiable."


Senator McLachlan - I rise to order. The bill fixing the rate of tax has already been passed by the Senate. This is a bill to amend the Land Tax Assessment Act. It merely provides for certain administrative changes, and by no stretch of imagination can be described as a rates bill.


Senator Needham - On . the point of order raised by the Honorary Minister I submit that when this bill becomes an act, the assessments that are issued under it will be calculated at the reduced rate. Such being the case, its application to the reduction is equal to that of the Land Tax Bill. I contend, therefore, that my amendment is in order.

The PRESIDENT (Senator the Hon. Sir John Newlands). - I have just returned to the chamber, after having been relieved by the Deputy-President; consequently my examination of the mea sure has been ofonly a cursory nature. So far I have been unable to assure myself that it specifically provides for a reduction of land taxation; but the effect the bill may have on the amount of revenue that may be collected under the land tax must be taken into account. Although this bill does not deal directly with the rate of land tax to be imposed, having inview the possibility of its effecting a reduction in revenue, I must rule that the amendment is in order.







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