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Thursday, 14 May 1942

Senator DARCEY (Tasmania) . - I. did not oppose any of the clauses of this bill when it was at the committee stage, but I should like to deal now with some important aspects of taxation generally. I wonder if honorable senators realize the tremendous increase of taxation that has taken place during the past thirty years? Commonwealth income tax was first levied in 1916, and for thefinancial year 1916-17 it yielded £5,621,950. By 1922, the annual yield had amounted to £16,790,682, and increases continued until 1941. The revenue from that tax represents an. increase of 420 per cent, on the total collected in the first year of its operation. There has been a similar increase of the sales tax which was first imposed' by a Labour Government in 1930. . The then Prime Minister (Mr. Scullin) returned from England and found the finances of this country in a dreadful state. Some means of raising revenue had to be found, and it was decided to impose a sales tax of 2-J per cent., which yielded an annual revenue of approximately £3,000,000. Since then the tax has been progressively increased by successive Commonwealth Governments which have clung to the same rotten financial system, and in 1941, the estimated yield from sales tax was £20,400,000. These new increases of 5 per cent, on goods now subject to 20 per cent., and 2$ per cent, on goods now subject to 10 per cent., are expected to yield a further £6,000,000. Is this drift never going to stop? Are we never going to get a sane monetary system in which we can do without taxation entirely? The present so-called sound monetary system is, in fact, so unsound that we started this war with a debt of £1,200,000,000. Orthodox financial advisers claim that budgets must be balanced, even if the skies fall; but it is time that honorable senators realize the utter impossibility of carrying on under the present financial system. Unfortunately when I spoke on this subject prior to the suspension of the sitting for dinner, only four members of the Opposition were in the chamber. I repeat that harsh taxation measures such as this are quite unnecessary. The taxation burden to-day is almost unbearable. What will it he like if it goes on increasing as it is doing now? It is time that honorable senators realized where all this is leading.

Senator Gibson - The honorable senator is speaking against his own party.

Senator DARCEY - I am speaking in the national interest. The whole country is going to the dogs because people will not realize the colossal amount of revenue that is required to meet interest payments on loans. These increases of the sales tax will yield only a few million pounds, yet we are spending a million pounds a day on the war. Now that the banks have been prevented from buying bonds and financing overdrafts to dummy buyers, there are only two ways left in which money can be raised, namely, taxation, which I contend is quite unnecessary, and the use of national credit. A continual increase of taxes means a corresponding decrease in the standard of living, because directly or indirectly all forms of taxation come from the pockets of the people in cash, whereas wars can be fought on credit. I regret exceedingly that honorable senators opposite have not taken the trouble to check the accuracy of my statements on finance. Unfortunately they simply sit in their places and laugh.

The PRESIDENT (Senator the Hon. J. Cunningham) . - Order ! The honorable senator must confine his remarks to the bills now before the Senate.

Senator DARCEY - These bills provide for the raising of money, and if I can show how money can be raised in a much easier way, surely that is of some interest to the Senate. However, I realize that no good can be done by saying any more at present on this subject. The Government has decided that this legislation shall go through despite the fact that it will lead to the financial ruin of this country. Once again, I protest strongly against these continual increases of taxes.

Question resolved in the affirmative.

Bills read a third time.

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