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Wednesday, 26 November 1941

Senator KEANE (Victoria) (Minister for Trade and Customs) . - I move -

That the bill be now rend ;i second time.

This bill gives effect to the Government's proposal to obtain an additional £500,000 revenue from land tax by imposing a super tax of 20 per cent, in those cases where the taxable unimproved value of the taxpayer's land exceeds £20,000. Honorable senators are aware that the law allows to resident taxpayers an exemption of £5,000 in arriving at the taxable value of their land so that a resident would need to own land of an unimproved value of £25,000 before he would become liable to this additional rax. As absentees do not receive the exemption enjoyed by residents, they will be liable to pay super tax when the unimproved value of the land exceeds £20,000. In order to remove any anomaly which would arise in those cases where the taxable unimproved value of a taxpayer's land was just over the taxable value of £20,000, the incidence of the super tax has been graduated by providing that it shall not exceed 1 per cent, of the taxable value in excess of £20,000. For example, if the taxable value of the taxpayer's land is £21,000, the super tax would be 1 per cent, of £1,000, or £10. When, however, the taxable value reaches £24,S00, the full super tax of 20 per cent, thereafter becomes payable.

When the Government was surveying the various avenues available for increasing the revenues, it recalled vividly the very substantial remissions which the payers of land tax in Australia 'has enjoyed over the past thirteen years and it will, I arn sure, be interesting to honorable senators if I recount the history of these remissions. The reductions commenced in 1927-2S, when the basic 1914-15 rates were reduced by 10 per cent. This reduction was maintained until 1932-33, when they were reduced by a further 33$ per cent., making a total reduction of the 1914-15 rates of 40 per cent. The following year, a 50 per cent, reduction was substituted for the 33$ per cent, granted in the preceding year, so that for 1933-34 the rates of tax operating were only 45 per cent, of the basic 1914-15 rate. The reduced, rates were continued for the next five years until. 193S-39, when they were increased by 11.1 per cent., bringing them up to just one-half of the rates which Ave re in operation in 1914-15. These reduced rates were applied also in 1939-40. but last year, when the previous Government was faced with a huge increase of war expenditure, it doubled the rates and by doing so restored the basic rs tes of 1914-15. The actual money value of the remissions I have referred to is over £13,000.000. and as 75 per cent, of the land tax is paid in respect of city lands and only 25 per cent, in respect of country lands, honorable senators Wl realize that the greatest benefit from these remissions has been enjoyed by the wealthy companies and individuals who own city properties. In view of the very generous remissions which the land.1 taxpayers of Australia have enjoyed over the past thirteen years, the Government considers that they .can now fairly be called upon to make an extra contribution towards the defence of this country and of their own land holdings. This is not the first occasion on which the land tax rates have been increased beyond the basic 1914-35 rates as, at the conclusion of the war of 1914-1S, tlie rates were increased by 20 per cent, without any exemption in respect of holdings below a taxable value of £20,000 such as is contained in this bill. The Government's decision that the super tax shall apply only where the taxable value of. the taxpayer's land exceeds £20,000 will mean that approximately 70 per cent, of the total taxable value of country lands will escape this additional impost so that the tax will fall only lightly upon the primary industries of Australia.

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