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Tuesday, 13 December 1927


Senator GRANT (New South Wales) . - There are two outstanding objections to this bill, which, in my opinion, are more than sufficient to warrant its rejection. The first is the proposal to reduce taxation by 10 per cent.

The PRESIDENT (Senator the Hon. Sir John Newlands). - Will the honorable senator show where that reduction is proposed in the bill before us?


Senator GRANT - The principle is covered by the bill read in conjunction with another measure which we have agreed to.


The PRESIDENT - Unless the honorable gentleman can point to a provision in this bill relating to the 10 per cent, reduction, he will not be in order in referring to it.


Senator GRANT - The provision relating to triennial valuations will mean a substantial reduction in the amount of taxation to be levied on land-owners. All who have any knowledge of land, are aware that the increase in land valu throughout the Commonwealth has been steady and progressive for a great number of years. The condition requiring revaluation once in three years .is not so objectionable as the provision in relation to Canberra leases, but it is a step in that direction. Indeed I should not have been surprised if the Government had stipulated for a revelation every twenty years. I read recently an interesting statement in connexion with the imposition of land value taxation in England more than 200 years ago. At that time the land taxwas fixed at 4s. in the pound, and the value of land in respect of which the tax was levied was fixed for all time, with the result that to-day the total amount of land value taxation received in Great Britain is only about £800,000. . I am surprised that the Government did not come down with a proposal of that kind in connexion with this bill, and it might have made it retrospective to the time mentioned by Senator Findley when the site now occupied by Cole's Book Arcade in Melbourne was sold for £20. It is impossible in the short time at one's disposal to deal adequately with land taxation in all its phases. If honorable senators care to study the Commonwealth Year-Boole for 1927, they will be amazed at the nominal amount raised by means of land taxation throughout the Commonwealth. The information is to be found on page 385. The figures show that the following amounts were collected by the various States in 1925-26 :-

 


The PRESIDENT - Order! I ask the honorable gentleman to connect his remarks with the bill now before the Senate.


Senator GRANT - I propose to do so Mr. President. My point is that the Government by adopting the triennial valuation system is effecting a substantial reduction in the amount that should be received from the land tax. The State Governments also are dealing very tenderly with this class of taxpayers. The Commonwealth Government, however, does not hesitate to impose extremely heavy burdens on the people in the form of indirect taxation.


The PRESIDENT - This bill has nothing to do with indirect taxation. The honorable gentleman must confine his remarks to the subject matter of the bill.


Senator GRANT - When you interrupted me, Mr. President, I was quoting the amounts of land taxation collected by the various States. If you rule that I may not quote those figures, I shall be obliged to dissent from your ruling. I strongly resent any attempt to interfere with me on this subject.


The PRESIDENT - Order! The honorable gentleman was proceeding to discuss indirect taxation when I reminded him that the bill had nothing whatever to do with the imposition of customs duties. This is a land tax assessment bill. The honorable gentleman must confine his remarks to the principle of the bill.


Senator GRANT - Very well, Mr. President. Let me again direct the attention of honorable senators to the amount of land tax collected by the various State Governments during the year 1925-26. The figures are as under -

 


Senator Foll - That is a fairly substantial amount.


Senator GRANT - Not when one considers the fabulous value of the land throughout the Commonwealth. I am not far wide of the mark when I say that the unimproved value of the land in New South Wales alone is in the vicinity of £500,000,000, and yet the New South Wales Government during year 1925-26 received only £2,667 from land taxation.

The total collections from this source by the Commonwealth are insignificant compared with the unimproved value of land It must be remembered also that this tax is paid not by all the land-owners of Australia, but by those only who own estates exceeding an unimproved value of £5,000.


Senator Herbert Hays - Why. the exemption of £5,000?


Senator GRANT - I should like to give the history of that exemption provision, and I shall do so if the President will not rule me out of order. On page 333 of the Commonwealth Year-Book, 1926, the total of Commonwealth land tax collections since 1921 is given as follows : -

 

Will any one contend that,, in view of the enormous and ever-increasing value of land throughout the Commonwealth, the owners of land are bearing their fair share of taxation? I do not believe in taxing any man excessively. There should be reason in all things. I submit, however, that the communitycreated value in land should be enjoyed by the community, and that the revenue raised from it should be used for the benefit of the people. A tax upon land values is entirely different from all other forms of taxation. Actually it is not a tax at all. It is merely the act of taking for the community something which the community has created. It is all very well for some people to declare that the construction of railways and public works gives to land its increased value. Something else is required - the demand for land. If there is no demand, land has no value. Railways, bridges, and public works are authorized and constructed in places where they are required. They are necessary to meet the needs of the people. . It is the settlement of the people in different localities that gives to laud its value, because their presence creates a demand for land. In view of the facts which I have enumerated, I contend that the amount, collected by the

Commonwealth in the form of land taxation is insignificant compared with the enormous unimproved value of land. This proposal to authorize trieinnial valuations should not be countenanced. In the early history of the movement for land taxation in New South Wales there was no suggestion of an exemption of £5,000, and in none of the land laws of the States, except New South Wales, is this provision to be found. At one time, under the Holman Labour regime, the exemption in New South Wales was fixed at £20,000. In nearly all the other States statutory provision is made for a nominal exemption of £100. The Federal land tax, enacted by a Labour government, provided for an exemption of £5,000 for each estate, whether large or small.


The PRESIDENT - There is nothing in the bill dealing with the point which the honorable senator is now discussing.


Senator GRANT - I was about to show that the Federal exemption was provided ostensibly in the interests of small land-holders, but it is operating in favour of wealthy land-owners. If an estate worth £10,000 is taxed at 6d.in the £1, the owner has either to sell it, use it, or pay the tax imposed. A practice frequently adopted is to divide an estate worth over £5,000 between the owner and his wife in order to avoid taxation. When an estate is being subdivided the auctioneer usually explains that it is valued at under £5,000, and is, therefore, not subject to Federal land tax, which results in the price immediately advancing. The tax was imposed by a Labour government for several reasons.


The PRESIDENT - The honorable senator is now proceeding to discuss something which is not covered by the bill.


Senator GRANT - Considering the enormous commitments of the Commonwealth, in the matter of repatriation, and in other directions, the time is inopportune to reduce taxation. The Development and Migration Commission sent an expert to Mount Morgan for a few days at a cost of £1,000, and another expert to Kalgoorlie at a similar cost to ascertain what was already known.


The PRESIDENT - I ask the honorable senator to confine his remarks to the bill, otherwise I shall direct him to resume his seat.


Senator GRANT - The measure, if passed in its present form, will in some small degree assist the work of the Development and Migration Commission. I believe that the Federal Land Tax Assessment Act has been responsible for some large country estates being subdivided, but that is hard to prove, because the aggregation and subdivision of estates is always proceeding. As only 20,000 persons are paying taxes on land, the unimproved value of which is £200,000,000 it is unreasonable to make concessions in the matter of land tax Another place which has no hesitation in increasing customs duties should be asked to increase the land tax by 25 per per cent, or 30 per cent. I regard the Government's proposal in this instance as a retrograde step, and trust that the bill will not receive the support of the Senate.







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