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Wednesday, 3 June 1942

Senator LECKIE (Victoria) .- This measure is probably the most momentous and far reaching piece of legislation ever brought before this Parliament. Therefore, it has to be considered in all its aspects. I shall not deal with the constitutional aspect of this scheme, other than to say that even to a lay mind, it is obvious that at any other time but the present, the High Court would have no hesitation in declaring these measures to be unconstitutional. The argument advanced by honorable senators opposite that because we are at war, the High Court will decide that this proposal is constitutional, is a peculiar form of reasoning. Surely it is the duty of the High Court to interpret the Constitution. It is possible that on small issues it might be tempted to strain a point, as it has done in the past, but on a question of this kind which, in effect, means violating the Constitution, I have no doubt as to the attitude that it will adopt. However, let us assume that these bills are passed, and that an appeal to the High Court results in the measures being declared constitutional. What will be the position then? At any time, and without entertaining any fear of the legislation being declared ultravires, the Commonwealth may bring in bills of this kind. On the other hand, should the High Court declare these measures to be unconstitutional, what an unholy mess the Government will be in !

Senator CAMERON - There is no unholy mess in England, where there is no written constitution.

Senator LECKIE - But we have written Constitutions, embracing both the Commonwealth and the States. Therefore the constitutionality of measures of this kind should be beyond doubt.

Senator COURTICE - Does the honorable senator think that the war does not matter ?

Senator LECKIE - I am not saying that the war does not matter, but I object to honorable senators opposite claiming to be super patriots, and alleging that honorable senators on this side of the chamber are unwilling to prosecute the war to the best of our ability. I agree entirely with Senator Courtice that the entire resources of this nation should be at the disposal of the Government, and that the war must be pursued to a victorious conclusion. If necessary, everything that we possess must be put into the common pool, but could that not be done without violating the Constitution? Is it necessary to do what the Government is attempting to do by means of these measures? In view of the fact that its declared policy is the unification of Australia, is the Government not leaving itself open to grave suspicion by adopting a scheme such as this? This scheme is an attempt to achieve unification under the guise of necessary war measures. I agree that our Constitution has not stood up to the test of time, either in peace or in war, and when the war has terminated, we shall have to make an honest endeavour to alter the Constitution in the light of what has transpired. However, we have a written Constitution to-day and it is not for this Government to say that it shall be regarded as a mere scrap of paper to be torn to pieces at the will of one political party. By way of excuse, it is argued that the uniform income tax scheme will operate only for the duration of the war and one year thereafter. I presume that we shall all be fairly satisfied if these measures remain in force for three years at the least. Therefore, in effect, the Government says " We shall tear up the Constitution, and in three years' time we shall give you back the scraps of paper ". Proposals of this kind cut right across all our preconceived ideas of constitutional authority, and strong reasons should be given before they are introduced into the Parliament. To justify this scheme and, no doubt, to indulge in a little bit of propaganda, the Government has inserted the following preamble in this bill : -

Whereas, with a view to the public safety and defence of the Commonwealth and of the several States and for the more effectual prosecution of the war in which His Majesty 18 engaged, it is necessary or convenient to provide for the matters hereinafter set out:

The use of the words "necessary" and "convenient" is interesting. Un doubtedly that preamble was so framed to persuade the people that without these measures the Government would not be able to obtain the money necessary for the successful prosecution of the war. The justification for this scheme has been set out under three headings, each of which, in my opinion, is totally inadequate. They are, first, that it is necessary to raise the money for war purposes. Strong emphasis is laid upon that point. Secondly, it is claimed that the scheme provides for uniform taxation, but actually it does nothing of the kind. Thirdly, it is claimed that the scheme will operate for only a specified period. In order to obtain support for this scheme the Government has already granted concessions to Tasmania, Queensland, Western Australia and New South Wales. Obviously the Government realized that it was on shaky ground politically, and, being composed of wise politicians, it decided to obtain the support of at least some of the States. After all, what is a few hundred thousand pounds or even a million pounds so long as the Government is safe.

Senator Large - Is that worthy?

Senator LECKIE - It certainly was not a worthy action on the part of the Government to grant concessions in order to obtain support for this legislation. The Government claims that this scheme is necessary in order to obtain money to carry on the war successfully. The Treasurer says that the rates of taxes will be approximately the same as they are now, so that no one will have to pay more tax than he does at present. However, at the same time, the Treasurer claims that the uniform income tax scheme will result in the raising of an additional £12,000,000 or £15,000,000. The explanation given is that the additional amount will come from increased income tax payments due to expanding war expenditure. It has been estimated that the national income amounts to £1,100,000,000, threefourths of which is earned by people having taxable incomes of under £400 a year, so that those members of the community who earn over £800,000,000 of the national income contribute very little in taxes, and those who earn the remaining £300,000,000 are .to be called upon to provide the money required for the prosecution of the war.

Senator COLLINGS (QUEENSLAND) -lings. - Nobody has ever said that.

Senator LECKIE - That is what the proposals of the Government involve. The Government desires to raise from £350,000,000 to £400,000,000 for war purposes, and one of the arguments advanced in justification of the scheme is that persons in the lower income groups are to be lightly taxed. In estimating that this scheme will result in an increase of revenue to the Commonwealth to an amount of from £12,000,000 to £15,000,000, I fear that the Government has lost sight of the fact that the greater proportion of the extra income that will be expended on the war effort will be earned by people who have taxable incomes of less than £500 a year. Therefore, I consider that the estimate of an increased revenue of from £12,000,000 to £15,000,000 is too great. The Treasurer (Mr. Chifley) has said that the present rates of tax will be altered substantially when the new budget is presented in August, so it is useless, for the purpose of inducing the Senate to pass these bills, to base arguments on the rates of tax laid down in one of the measures now before us. If the Government is able to raise £12,000,000 extra by way of income tax, it could get that amount under the present system of taxation. It could get all the money required for the war effort from practically the same taxpayers in other ways. Had not the present Government come into power by displacing the Fadden Government, it would have welcomed the Fadden scheme of post-war credits with open arms; but, because it put the Fadden Government out of office on its financial proposals, it would not now be prepared to accept them. It is claimed by the Government that the adoption of the present proposals is necessary in order to raise the required revenue, but the Government should not attempt to discriminate between taxpayers in the various States.

Another argument advanced in favour of the proposals is that they provide for uniform taxation. The scheme has no semblance of that. It will certainly provide for uniform income taxation, but not for uniform taxation generally. The Government claims that there will be one income tax return and one taxing authority, yet in some of the States only half of the revenue of (the States is raised by means of income tax, the other half being raised by other taxes. The people of Australia are to be called upon to pay extra taxes, yet the Government insists on claiming

The reason that has been offered freely on the opposition side of the chamber as to why Victoria should be penalized is that its social services have not been provided on a scale equal to that of the social services in New South Wales, and that therefore the allowance to Victoria should be reduced to the lowest possible amount, so that for the future Victoria should have to deny its people the social benefits that have accrued to the people of New South Wales and. other States. Victoria is to be prevented by this measure from putting into operation social services for which it is blamed for having failed to provide in the past. There is no doubt as to the efficiency of the education system in Victoria. The question has been raised as to whether the Public Service in that State has been of as high a standard as that of the other States, but under these bills Victoria and South Australia will be prevented from raising the salaries of State public servants, because the Commonwealth will invade their fields of taxation and deprive them of avenues of taxation that they have enjoyed in the past. New South Wales, for instance, has imposed practically no land tax, since it raises only about £2,000 a year from that source. To talk of one taxing authority, when half of the income of Victoria, Tasmania and South Australia is not obtained from income tax, is most absurd. Yet the Government calmly tells Victoria that it must pay £4,000,000 a year more than it has been accustomed to pay towards the war effort. I could conceive of the Commonwealth Government saying that the people of Victoria are more vitally interested in the war effort than the people of other States, or thatthey have more to lose, but the Government asks that Victorians should be required to pay annually, on the average, £10 10s. per capita more than the inhabitants of other States towards the cost of the war effort. Yet it is claimed that these proposals provide for uniform taxation! Whilst Victorian taxpayers are to pay more, the taxpayers in certain other States will pay less. Honorable senators opposite have waxed indignant at the suggestion that the legal opinions on. which the Government has based this legislation should be placed before the Senate. They do not appear to have much confidence in the opinions, they have received. If the Government thinks that they are right, why does it not produce them? Should this legislation be declared to be unconstitutional, the Government will have to start all over again, and things will be in a state of chaos. I was astonished to hear one honorable member on this side say that, he was in favour of equality of sacrifice.

Senator Courtice - That was an astonishing admission by an honorable member on that side of the chamber.

Senator LECKIE - The honorable senator who made that statement then proceeded to support the bill, which will reduce the taxes payable by citizens of his own State and add to the amount to be paid by citizens of Victoria.

Senator Collings - The honorable senator is placing Victorian citizens in a bad light. They will repudiate his statements.

Senator LECKIE - I have nothing to say against the committee which submitted a report to the Government on its proposals. It was a suitable committee to bring in such a report.

Senator McBride - It was hand-picked by the Government.

Senator LECKIE - It was selected with a certain purpose in view; and it did its job well, because the results of its investigations were satisfactory to the Government.

Senator Collings - Even if not to Senator Leckie.

Senator LECKIE - No one who knows the members of the committee expected anything else from them. With the committee's report before it, the Government can say, " This legislation is not our responsibility. A committee made recommendations which the Government accepted ". Uniform legislation should give uniform benefits. During the discussion, an honorable senator said that Victoria had not widows' pensions or child endowment schemes.

Senator Keane - The Victorian scheme of widows' pensions has not been in operation long.

Senator LECKIE -Child endowment is now the responsibility of the Commonwealth. Before Commonwealth legislation provided for child endowment, New South Wales had its own child endowment scheme, which cost that State £1,300,000 a year. Although New South Wales has been relieved of the obligation to find that amount, there is to be no deduction from the grant to be made to that State.

Senator Keane - The honorable senator is not telling the whole story.

Senator LECKIE - In effect, New South Wales is to be given £1,300,000 to be expended in other ways. New South Wales also had its own widows' pensions scheme, but the legislation recently passed by the Commonwealth will relieve that State of the necessity to find money for that purpose. What justification is there for New South Wales being allowed a considerable portion of the money previously expended on widows' pensions? That State is to be rewarded because it had provided certain social benefits for its people, but Victoria is to be penalized th rough not being permitted to bring in social legislation, or to increase the emoluments or improve the conditions of its own public servants. Its revenue will remain static. The Government endeavours to justify its proposals on three grounds, the first of which is that this is the only way to get the money that it needs. The money could be obtained in another and a better way, which would not involve a possible violation of the Constitution. The second ground advanced by the Government is that these proposals provide for uniform taxation. I have shown that they do not do so, and that, even if they did, the benefits would not be uniform. Surely the inhabitants of a State are entitled to fair benefits from the taxes that they pay? The third ground is that this legislation is only for a definite, and, it is hoped, short period. That is an absurd reason, because the altered arrangements will penate, not for two or three years, or for four or five years, but, should the war last longer, they will operate indefinitely. Those who vote for these measures in thebelief that the legislation will operate for only a short period are misleading themselves. The Government has not advanced sound reasons for its proposals, and therefore I hope that the Senate will refuse to pass legislation which, if passed, will do a great injustice to a considerable proportion of the people of Australia, whilst not achieving what it purports to achieve. It will, however, help to destroy the Constitution on which the federation is based.

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