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Thursday, 16 September 1971
Page: 1438

Mr HURFORD (Adelaide) - I rise for a few moments to record my objection to this legislation. The House has before it 3 Bills dealing with payroll tax. I point out, first, that at this time when our country is heading for an economic crisis the more powers that can be held in the hands of the Commonwealth - particularly taxing powers, which can help in economic planning - the better for this nation. Even members of the Government Parties are realising this fact at the moment. In the Budget debate the other night, the honourable member for Moreton (Mr Killen), although paying Hp service earlier in his speech to the belief that he was not a centralist, concluded by saying: 'Of course, we should consider ourselves as one country, not 6 separate countries, and as one economy and not 6 separate economies'. He said how much nonsense it was to play along with a lot of measures. I believe that he was referring to measures such as those before us now.

The honourable member for Melbourne Ports (Mr Crean) has said that our opposition to these Bills does not mean that the States do not deserve this money. Of course they deserve it. in my own State of South Australia, as with the other States of the Commonwealth, the fact is that this Commonwealh Government by its policies has created great demands on the resources of the State. Indeed, they are such great demands that the States have been forced into their only form of taxation, which is regressive taxation, to meet the great needs that they must supply to our everincreasing population. This money will be used to meet needs in education, needs in hospitals and needs in so many other fields. Yet, in all the talk that has taken place about improving Commonwealth-State financial relations and in all the documents that have been put out by universities and others interested in this most important subject for our country, no one has come up with this stupid measure of transferring payroll tax to the States as a growth tax. I have in front of me economic papers on the subject of taxation in the Australian Federal system by people such as Professor Russell Mathews, Professor W. Prest and Brian Dixon. Professor Mathews is from the Australian National University, Professor Prest was from the University of Melbourne and Brian Dixon was also from the Australian National University although he is now in the United States. These are well known papers on this subject of Commonwealth and State financial relations and yet nobody has used them in deciding on this measure of payroll tax. Giving payroll tax to the States is a desperate measure thought up by the Prime Minister (Mr McMahon) because he promised something new when he hurriedly took over the Government of this country.

Dr Klugman - He does not understand the economics of it.

Mr HURFORD - As the honourable member for Prospect (Dr Klugman) has said, I believe he does not understand the economics of it and does not understand just what yoke he has put round the necks of all of us in establishing this legislation.

If there is one thing that taxation legislation should have about it, it is a certain simplicity and flexibility, and yet a measure which should be simple like this one of transferring payroll tax from the Commonwealth to the States has ended up in 3 Bills and an explanatory memorandum of 26 pages. It would take the most competent Queen's Counsel conversant with taxation matters with wet towels around his head an age to understand them. This is an infliction on this country being brought about by hurried and stupid legislation brought on at the last moment. Payroll tax was introduced to Australia in 1941 specifically to provide the funds required for the payment of child endowment to the families of wage and salary' earners. Another of the reasons why 1 am so against payroll tax being transferred to the States is that I believe this son of taxation should be used specifically for other social welfare measures - indeed, let us include child endowment. One of the things that my Party is extremely keen on instituting when we take over the government benches of this country is a national superannuation scheme in order to rid this country of the poverty now suffered by 1 million people. three-quarters of whom-

Mr DEPUTY SPEAKER (Mr Drury)Order!1 remind the honourable member that national superannuation is not the subject of this Bill.

Mr HURFORD - If you will give me a little latitude, Mr Deputy Speaker, 1 will explain that the only way a national superannuation scheme can be instituted in this country is by using payroll tax and the argument is extremely pertinent to my speech today. 1 want to point out that if we are to get rid of this poverty afflicting a million people, three quarters of which was created because of inadequate social services, we will be able to do it only through a national superannuation scheme and we will be able to have a national superannuation scheme only if part of the finances come from payroll tax. Yet here we are, on the threshold of a Labor government being able to bring this sort of reform to this country, handing over these powers relating to payroll tax to the States to inflict an ever increasing cost burden on this country because the States, in order to raise the sort of revenues they need, are immediately lifting the rate of payroll tax by 1 per cent. It is an unimpressive piece of legislation altogether and when I refer to the complications of it I refer also to the new Bill which will re-introduce this tax in the Australian Capital Territory and the Northern Territory. If this is not to be a uniform rate of tax of 3i per cent why bother to have it at all for the miserly amount that will be collected in the Australian Capital Territory and the Northern Territory? I think the Government should have made up its mind to rid the Northern Territory of this tax, because of the cost disadvantages that exist up there already. But if the States must inflict it on their people in order to raise the necessary finance, we should have it at a uniform rate of 3i per cent throughout Australia.

Dr Gun - They want the Australian Capital Territory to be a tax haven.

Mr HURFORD - As the honourable member for Kingston says - 1 am looking forward to hearing his contribution to the debate - perhaps the Australian Capital Territory has to be a tax haven with a rate of tax 1 per cent lower than that which the States have to inflict. I promised the Leader of the House (Mr Swartz) and the Minister assisting the Treasurer (Mr Peacock) that I would be brief on this subject but 1 hope I have been able to make the point quite clearly that this is a power that should stay in the hands of the Commonwealth. I believe that if we are successful in opposing this piece of legislation my Party will certainly facilitate the immediate passage of the necessary legislation to give the States the income that they require to replace the income we would be removing from them. It is for these reasons that I oppose this Bill.

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