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Wednesday, 20 May 1936

Senator DUNCAN-HUGHES (SOUTH AUSTRALIA) - HUGHES. - Occasionally that is so. There is naturally a tendency, which has been noticeable and has been illustrated by certain obiter dicta from the High Court Bench, for the Commissioner to demand, at any rate, his pound of flesh. On the other hand, on the part of many taxpayers there has no doubt been a desire to pay nothing at all. It is for us to see that the scales of justice are balanced evenly between the two. In doing so I think it is right that Ave should remember that the Commissioner 'and his staff are in the first place highly expert men who have devoted their lives to their occupation, and that they have the assistance of expert legal officers to whom they can refer at any moment. The ordinary taxpayer, particularly the country tax: payer, is not in that happy position. The country taxpayer is often ignorant, as I am certain all honorable senators are aware, of even the rudiments of bookkeeping. In taxation matters he is placed, technically, in the position of defendant. Wo should see that he is given every reasonable opportunity to present his case in the very best light. I feel that the provisions relating to notice of objection have in this respect at any rate, tended to tighten up the law against the taxpayers. I propose to move, at a later stage, an amendment designed to ensure that to some extent the provisions of the law shall be extended so that when a breach of the law comes up for adjudication the taxpayer's case shall be the best which he can put forward - not perhaps the case which he made out when he was unaware that he had some alternative or additional ground to plead that was not set out in the -first instance.

I do not agree with Senator Johnston that it i3 necessary that at the present time we should discuss the respective merits of a single appellate tribunal for the Commonwealth and "States, and a board of review. This is a matter of which there is a great deal to be said on both sides. The Treasurer stated that if it is possible to arrive at a joint agreement on this matter with the -various State governments, the suggestion will then be laid before Parliament in the form of a complementary bill. A discussion of the respective merits of these two tribunals appears to me to be outside the ambit of the bill now under consideration. I shall hold my hand on this general question. Just as there is a great deal to be said for uniformity of taxation measures, so also there is a great deal to be said for uniformity of judicial rulings, instead of a continuation of the conflicting rulings which may at present be made by different boards in different States at different times. I am certainly prepared to consider the desirability of a single tribunal if eventually some arrangement is arrived at between the Commonwealth and the States, and the Government brings in a bill to give effect to it. I do not propose to delay the second reading of this .bill, which is essentially one for consideration in committee, but there are two or three points of a general nature which arose from the discussion this morning to which I should like to address myself before I sit down.

Senator Collingsremarked that taxation should be placed upon the shoulders of those best able to bear it. I think that that is already done in Australia. I do not know what the exact percentage is at the present time, but some years ago I remember I was astonished to find that a relatively small percentage of the people in Australia paid direct federal taxation.

Senator Payne - Less than 10 per cent, of the people of Australia pay more than 80 per cent, of the total taxes collected.

Senator DUNCAN-HUGHES - I thought the case was even stronger than that; certainly with an exemption of £250 no one can suggest that the taxation is being forced on to the shoulders of those who are unable to sustain it. A number of further concessions which have been made in recent years in connexion with our income tax legislation have been wholly to the advantage of the smaller man. It cannot be fairly claimed that under the present Australian system of levying taxes heavy burdens are imposed upon those not in a position to pay. But apart from the direct taxation, there is also indirect, taxation.' I direct the- attention of the Leader of the Opposition to the fact that indirect taxation, although it may come back eventually to one or two special sections of the community, is distributed over everybody. Every person pays it. The Labour party, more than any other party, except perhaps that led by Senator Leckie, advocates the continuation of very high tariffs, the indirect taxation of which affect everybody. The low-tariffists are not responsible for the volume of indirect taxation. I do not believe in high tariffs, although I am fully aware that, if I were to adopt the attitude which some members of the Labour party would accuse me of adopting, I should seize on high tariffs for the purpose of taking away from the taxpayer a large amount of his burden, and spreading it generally over the whole of the community. I do not believe that that is sound' finance, and for that reason I am opposed to it. The Leader of the Opposition has stated that surpluses are wrong in principle; but all Treasurers in good years are liable to have surpluses if they have budgeted prudently. Does the honorable senator suggest that any surplus which may happen to fall to a Treasurer at the end of a year is to be distributed regardless of the dictates of economy or anything else; that it should be regarded as a gift of the gods, and expended? Is it not the duty of the Government to act like any prudent man who, finding that he had obtained an unexpected windfall, employs it for the purpose of reducing his expenditure in the following year?

Senator Collings - No prudent man starves himself through a year in order to show a surplus at the end of that year. That is what governments do.

Senator DUNCAN-HUGHES - Unfortunately, in every community there are" a few men who starve themselves throughout their lives in order to obtain a surplus. Everybody is aware that there are misers, although they do not exist in considerable numbers in Australia, probably because they have little opportunity to put away large profits into a box underneath their beds.

Senator Foll - I have not noticed that any Treasurers are misers.

Senator DUNCAN-HUGHES - Some are more level-headed than others.

Senator Brown,when referring generally to money and taxation, stated that the worker contributes the bulk of the revenue derived from taxes. . To a great extent he does; but one has to define " worker I have never been convinced that the man who works with his head finds it any less laborious than the man who earns his living with his hands. Certainly, the strain upon the brain worker is much greater, and he is more liable to a breakdown than is the manual labourer. In fairness to Senator Brown, I should state that he was not thinking only of the manual worker ; but he singled out one type, and said, " These are the people who are the only necessary and important elements in the community." From that statement I dissent. Throughout my . political life I have maintained that capital is just as necessary to the worker as the worker is to capital.

Senator Collings - The capitalist is not, though !

Senator DUNCAN-HUGHES - If there be capital, there must also be the capitalist, whether a socialized community, or a series of private individuals. Where I differ from the Leader of the Opposition, who, I think, would substantially agree that capital is necessary, is in my contention that the individual capitalist will make more out of the use of his money, will waste less of it, and will therefore be able to provide more employment, and give to the public as a whole that incentive of personal initiative, without which no community will prosper.

When speaking to my electors in 1931, when economic conditions in Australia were extremely bad, I was talking in this strain when a member of the audience interjected, " The worker is the only man who produces wealth ! " I replied, " Well, why does he not produce it now? This is the time when the country is crying out for wealth to be produced. But the worker is helpless, because capital is not forthcoming." That is my answer to that contention.

I do not feel that this bill demands anything approaching the general survey of the taxation acts, which was given by the Minister in charge of the bill ("Senator A. J. McLachlan), and by the Treasurer (Mr. Casey), in the House of

Representatives. Except on minor points, this bill will not even require much amendment. But I have mentioned a few general points, because it seems to me that they affect some of the really essential matters with which this bill is designed to deal.

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