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Wednesday, 3 June 1942

Senator COLLETT (Western Australia) . - In a debate of this nature it. is impossible to avoid, a certain amount of repetition, but I propose to confine my remarks, so far as possible, to the Western Australian aspect of this legislation, and in doing so I shall be brief. The bills now under discussion have a special claim upon the attention of the Senate because they deal indirectly but seriously with State rights. The provisions of the hills have been canvassed extensively by other honorable senators and in the press, and therefore, I shall not attempt to go into details of rates, compensation to States, including the " bonus " of more than £1,000,000 to New South Wales, the placating of Tasmania, and other such anomalies. These matters have been dealt with effectively by the Leader of the Opposition (Senator McLeay), Senator Spicer and others. It may be taken for granted that nobody opposes the principle of uniform income taxation, which in its true incidence, eases the general position of the taxpayer, and at the same time, lessens the cost of collection. That postulates sound government, but it is. not the only issue. A study of the geographical make-up of Australia, with its vast undeveloped areas and scattered population, emphasizes the need for strong local and independent authorities in order that sound social progress may be planned and sustained. That cannot be done without financial resources. The mere pittances which are likely to be forthcoming from a politically sensitive and extravagant central authority with a depleted Treasury chest are useless. To use an old phrase, the people should beware of selling their birthright for a mess of pottage. I am convinced that after the war any government would find it most difficult to relinquish the authority now sought under these bills, professedly as a waT necessity. Perhaps a reminder is needed that this Commonwealth is a federation of sovereign States. On the 1st January, 1901, each State, acting under a constitution granted, directly by the Crown, delegated certain powers which it was thought could be used more effectively by a centra] authority. Those powers are set out in the Commonwealth of Australia Constitution Act of which section 128 provides a necessary protection for the

States against further encroachment upon their realm. It is true, of course, that section 51 vi. throws upon the Commonwealth, the responsibility for the defence of Australia against attack, and that section 51 ii. furnishes a legal means of obtaining funds to meet the expenses of war, but it was never contemplated that the exercising of these two powers conjointly could be made the means of forcing unification upon the States. If a State's ability to obtain money by means of taxation no longer exists, then its means of livelihood as a sovereign entity disappear, and it becomes dependent upon the grace of the other States acting in consort, for a mere existence in which its ideals of industrial expansion and social betterment can find little if any scope. The presentation of this legislation by the Government reminds me of an occasion in the last war when a commander-in-chief, anxious to be rid of an inefficient general who had strong political backing, adopted the device of removing the corps from the general rather than the general from the corps. At the same time I do not admit that the system of government in Western Australia is lacking in the necessary properties to enable it to maintain the battle of progress. I am one of the six representatives of Western Australia in this chamber, and I desire to put forward authentic views upon the issue with which we are now dealing. For that purpose I desire to quote from the West Australian, of the 13th May, an account of the proceedings in the State Parliament which, in effect, epitomizes the reasons for the rejection of the Curtin Government's uniform income taxation plan. When the Legislative Assembly met the Premier moved the long resolution which has been read to the Senate by Senator Johnston. The newspaper report of the proceedings is as follows: -

Submitting the motion, the Premier said he objected to the principle of uniform taxation, not the details. Western Australia was being deprived of the right of self-government. deakin had said truly that "the power of the purse was the power of the government". ' Ever since federation the federal authorities had been constantly trying to gut more .power. "If these proposals are forced on us," he said, "we will lose all semblance of the power of self-government.

Even municipalities and road boards, he proceeded, had power to raise revenue. It was symptomatic of the attitude of federal governments to the States that within a short period both a non-Labour and a Labour government had favoured uniform taxation. The cooperation of the State Premiers should have been sought to overcome any federal taxation difficulties. The interests of the State were being sacrificed for something not essential to the war effort. This State had been badly treated in regard to munitions manufacture. The Industries Commission, on which high hopes had been founded, had proved to be a tremendous disappointment. Instead of being an executive body it was merely advisory. If the State lost its right to tax it lost the right to govern. The uniform taxation scheme would impose all the disabilities of unification without conferring any of its benefits. The outlook for Western Australia would be nothing short of tragic if it lost the right to manage its own affairs. If Western Australian people could have envisaged the consequences of federation they would never have agreed to enter federation.

I do not subscribe to that sentiment. No such judgment can be justified in the light of the advantages gained by Western Australia under federation. The report continues - " I have no faith in protestations that the tax proposals are for the duration of the war only," said Mr. Willcock. " I don't doubt the present Federal Government's sincerity, but they cannot bind the future. All our experience has shown that, once having surrendered a right to the Commonwealth, the States never have it returned to them." This State's gold industry, continued the Premier had been singled out for heavy taxation on production, and the State's wheat acreage had been more drastically reduced than that of any other State. Factory personnel here was just about being maintained at a time when Australia's industrial expansion was at its maximum. At Loan Council meetings it was always difficult to get money for development in this State. Now the State was to be prevented from getting money from revenue - the Commonwealth was to have the right of determining the amount of "' compensation " each year the States were to have in lieu of taxation. The Commonwealth could give them what it liked, possibly through some such body as the Grants Commission. The States were to be hamstrung -bound hand and foot - by the tax proposals. He hoped his motion would be carried unanimously by the House. The motion could not be regarded as unpatriotic or as hindering the war effort.

After two days debate, with only three members speaking against it, the motion submitted by the Premier was carried in the Legislative Assembly without a division, whilst in the Legislative Council it was agreed to with the following addition : -

The whole question of financial relationships between the Commonwealth and the States should be submitted to the State Parliaments before ratification of the proposals.

Rightly or wrongly, Western Australia has complained of receiving a raw deal, and it has given evidence of the neglect of its best interests. The people of Western Australia believe that their geographical remoteness implies a crass ignorance on the part of the inhabitants of this side of the continent of both that State's strength and weaknesses. Western Australia's direct contributions to the war effort have been exemplary, and its loyalty to the ideals of the Commonwealth is undoubted, and has been demonstrated. Nevertheless, it is not prepared to forfeit its independence, and thus come under the political domination of another State, the -social codes of which are, to say the least, not on a high ethical plane. That which the Government seeks to obtain, by means of these measures, namely, more money for the conduct of the war, could have been secured by other means, particularly by a system of compulsory loans, as was planned by the former Prime Minister, Mr. Fadden. I was prepared to support that scheme, because it would have equalized the payments for war purposes, without intruding upon State rights in any way. It is quite true that the Australian Labour Party Council in Western Australia is backing this scheme, and, in so doing, is clashing with the Labour Government of Western Australia; but the Australian Labour party is all out for unification, despite the damage which, as it knows, must follow to State interests. It is possible that some of my colleagues on the other side of the chamber may have other views. If so, that is their concern. No doubt they will be able to offer a perfectly good explanation to the people of Western Australia; but I consider these measures to be ill designed and badly timed, and I shall vote against the motion for the second reading of the bill.

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