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Wednesday, 26 October 1910

Senator MILLEN (New South Wales) . - Justification for the amendment moved by Senator Walker is to be found in the speeches delivered in this Chamber, and from a hundred platforms throughout Australia. There is nothing upon which honorable senators opposite have been so eloquent as in pointing out how the landholders of Australia have benefited from the unearned increment, or as Senator Stewart has so often called it, the communitycreated value. It has been argued that, the community having created that value, was entitled to possess it. But clearly the community has no claim where there has been no increment. How can the community claim to take an increment that has not been created ?

Senator Guthrie - What about the money that has been paid back to the landowners in some way or other? Take the Wakefield system in South Australia, where the whole of the money paid by landowners for land was paid back to them.

Senator MILLEN - I do not know that my honorable friend could have mentioned a more misleading instance. What was done under the Wakefield system was this : It was a system devised by a philanthropist who, like a number of honorable senators opposite, knew nothing about land values or land settlement: The basis of his system was that persons should pay for land £1 per acre, which was more than it was worth j and in order to give to the land thus purchased the value of £1 per acre the money received for it was to be spent in bringing out immigrants.

Senator Guthrie - The honorable senator has omitted one feature of the Wakefield system, and that is that under it not less than £20,000 worth of land was sold at a time.

Senator MILLEN - That has nothing to do with the principle of the system. The only interesting feature in connexion with the Wakefield system that occurs in connexion with this Bill is that no more pernicious legacy has been left to Australia than the fixed rate of £1 per acre which was determined upon in consequence of that system. I should like to put this to the Committee as an illustration of the imposing of a tax where there is no increment. Suppose that an honorable senator purchased a cottage for which he had previously been paying IOS. a week in rent. Suppose that after he had completed the purchase the landlord still called, and said, " I want my rent." That is exactly what is going to happen under this Bill in regard to persons who have purchased land from the Crown. Having paid, we will say, their £i per acre for their land, they are now to be taxed on the payment which they have made for it to the Crown. That is a simple illustration of what is going to happen. If honorable senators choose to say that the increment has no bearing upon this tax, I will admit that there is some force in that statement. But, nevertheless, there is not a single supporter of the Government who has not told the electors that we are called upon to impose a land tax because it is desirable to secure the increment.

Senator Rae - A man may have two valid arguments for a proposition as long as they do not contradict each other.

Senator MILLEN - I quite admit that - except in the case of my honorable friend ! This amendment carries my memory back fifteen years, when I was associated with a similar proposition in the New South Wales Legislature. That was an amendment to exempt from the operation of a land tax land-owners who had purchased their land direct from the Crown, and paid £1 per acre for it. There is no value there which can be fairly taxed unless you are levying a general property tax throughout the country. If you levy a general property tax, that 20s. worth of land is, of course, one form of property, and undoubtedly should pay its share. But when you come to talk of a land tax, you should surely exempt land as to which there is clearly no increment.

Senator McGregor - We will exempt where there is no value.

Senator MILLEN - It is not a question of exempting where there is no value. There is very little land in Australia that i-* not of some value. Even the poorest land of which I have any knowledge is worth 2s. or 3s. per acre for its productive return. But where I have paid a sovereign for an acre of land to the Crown, the Crown has no right to tax me on that sovereign.

Senator McGregor - Though the Crown may have given 30s. back ?

Senator MILLEN - The honorable senator has referred to agricultural colleges in speaking of what the Crown has given back ; but I should like him to say how the pastoralists of Australia have benefited from the expenditure upon agricultural colleges.

Senator Rae - They have benefited by increased knowledge.

Senator MILLEN - What nonsense 1 Honorable senators might as well contend that, by our system of education, we are returning something to every taxpayer in the country.

Senator Rae - That is so; and it is the only justification for making its cost a public burden.

Senator MILLEN - The honorable senator forgets that the taxpayers are paying for it as taxpayers. The Government have no magician's wand, by which they can provide the expenditure necessary for our education system. They must take it out of the pockets of the taxpayers.

Senator Rae - That is beautiful.

Senator MILLEN - Of course it is; like many other things I say.

Senator Rae - It is only beautiful because the honorable senator stopped short of stating the whole case.

Senator MILLEN - I do not know that there is any more I can say on the subject. The idea that the Government can do something of themselves is wide of the mark. They can only do what the money they take from the pockets of the taxpayers enables them to do.

Senator Rae - It is chiefly the owner of land who benefits by public expenditure.

Senator MILLEN - Senator Rae is welcome to that view ; but the only way in which the owner of land benefits is by an increase in the value of his land. We are dealing with lands where there is no increment of value, and the owners of whirl' have derived no benefit which is not shared by every member of the community. If I pay £1 an acre for land, and there is an additional value given to the land, the tax should fall upon that additional value ; but the State should not tax the sovereign represented by the acre of land that still remains of that value. There is no justification for taxing that, unless we impose a tax upon all forms of property. If that were done, I admit that we should be entitled to tax the original sovereign given for the land. By exempting the price originally paid to the Crown for land, we shall be establishing this taxation upon an understandable basis. We shall be taxing the community-created value - neither more nor less. I do not hesitate to say that I have never opposed a proposal to tax the community-created value.

Senator Rae - As a single taxer, necessarily the honorable member could not do so.

Senator MILLEN - I can scarcely be called a single taxer, when, if I had my way, I should tax the honorable senator's ceaseless levity. I am surprised at the attitude adopted by Senator Rae, whose views upon land taxation are well known. The honorable senator has for years lived politically upon his orations on the subject of the unearned increment. Ever since I have known him, he has always been talking about it. It is the gospel he has preached in season and out of season.

Senator Rae - Then I must be consistent, which is more than I can say for my honorable friends opposite.

Senator MILLEN - If the honorable senator means that he is consistent in uttering the same thing always, I agree with him ; but I can charge him with inconsistency in regard to his action to-day, which is not consistent with the attitude he has previously adopted in this matter. I cannot expect to bind the honorable senator too closely to a form of consistency which his present political relationship might make inconvenient. The honorable senator has spoken more eloquently than I can hope to do, of the justification for levying a tax upon community-created values. It should be remembered that this Bill does not mark the final step in our taxation of land. The more definitely and clearly we make our appeal to the community in favour of a principle they can understand, and the more clearly we put before them a principle which is just in itself, the more likely they will be to adopt that principle and adhere to it permanently. I am a believer in the right of the community to take some portion of the community-created increment of value. But it is because 1 believe in that that I am bound to oppose a tax where there is no increment of value. The Government propose to levy this tax upon the original amount paid to the Crown for the land. The Crown has this money in its coffers, and can invest it at 4 per cent. ; and if it has not got this money in its coffers to-day, it has, by expending it upon public works, relieved itself of the necessity of raising a similar amount to cover the cost of those works. For the reasons I have given, I must say I expected a more sympathetic reception for the amendment than, judging by the attitude adopted by honorable senators opposite, it is likely to receive.

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