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Wednesday, 26 October 1910

Senator ST LEDGER (Queensland) . - I think that honorable senators opposite are proceeding on a false assumption. The argument on this side is based on the premise that this Bill and the Land Tax Bill, which is to follow it, are founded upon the idea of taxing what is called "the incremental value." Assuming for the moment that there is such a thing as an incremental value of land, the Opposition contend that the Government are unjustly applying the principle which they enunciate. On this question, I take leave to differ to some extent from the opinion expressed by my leader, Senator Millen. In speaking on the second reading of the Bill, I said that for all lands which are made reproductive there is no such thing as incremental value. Senator Millen will not go nearly so far as that, and there' are probably very few in this Chamber who will be prepared to go so far.

Senator Stewart - Senator Millen knows better than that.

Senator ST LEDGER - Possibly ; but I am steering my own course in this matter in a way which will not materially interfere with my leader's position, however much I may differ from him or from the Government on the question of the incremental value. The point is, that if there be such a thing, the Government are not applying the principle properly, and Senator Walker's amendment is a proposal put forward to apply it properly.

Some startling assertions have been made by honorable senators opposite, not merely to-day, but years ago, and probably similar statements will be made for years to come, in support of the principle of an incremental value as the basis for land taxation. We have been told that land has no value but what the community gives it. One would think that it would be almost impossible to concentrate so much absurdity in so short a sentence. " Land has no value but what the community gives it."

Senator Gardiner - Hear, hear.

Senator ST LEDGER - Senator Gardiner cheers, that proposition, and I shall show him at once that it is utterly ridiculous. Land may have a very large value which the community does not give it, and which nobody but the man who applies himself to that land gives it. I cite an instance from the town of Bendigo, which I visited about a month ago. Quite close to the gold mines, and almost in the heart of the town, there is land which, for over fifty years, was regarded as absolute waste. The area, perhaps, was not more than fifteen or ' twenty acres. A few Spaniards, who landed here in consequence of some advertisement as to the resources of Australia, and did not obtain employment in Melbourne, went on to Bendigo. Seeing this land, it struck them that they could make it of value. By bringing their agricultural skill and knowledge to bear, they were able, within twelve or eighteen months, to make that land reproductive, and the products they raised made .Bendigo famous throughout Australia. I ask who created the present value of that land? It was created by these Spaniards, and by the application of their knowledge of agriculture to it. What has been the result? Other persons in Bendigo, and amongst them miners, having seen what might be done with land of that quality, have taken up similar land around Bendigo, and have made it reproductive. Will honorable senators opposite contend that the community created the value, primarily or wholly, now existing in that land? They must admit that it might have remained in its original state for a hundred years if it had not been taken up by men of intelligence, who were able to discern its possibilities. It is on this indisputable set of facts that I base my objection to the use and application of the term " incremental value" embodied in this Bill. Let me deal now with another superstition, for I can call it nothing else, which was suggested by Senator Gardiner. The honorable senator mentioned an unchallengeable fact that fifty or sixty years ago a man secured some land in Melbourne for a few sovereigns, and that that land is to-day worth tens of thousands of pounds. I do not say that it might not be a proper thing to impose a tax upon the present owners of that land, but I can refer the honorable senator to land adjoining it which was bought only the other day for from £80,000 to ,£100,000. Here we have two persons owning blocks of land within a quarter of a mile of each other, and, according to Senator Gardiner, though one was secured for a few pounds, and the other cost many thousands of pounds, the same principle of taxation is to be applied to both, and the value of both to their respective owners is to be estimated on the same basis. We may find a block of land ii: Collins-street for which the owner paid £50,000 or £60,000, and a few yards further down the street we may find an equally valuable block for which the present owner or his farther before him gave only a few pounds. It must be obvious that it is most inequitable to propose to treat the owners of these blocks on the same basis. Senator Gardiner mentioned the land held by the Howie family, which has increased in value, it may be, a thousand-fold since it was purchased by Henry Howie. How can honorable senators opposite contend that it would be equitable to impose taxation which might reasonably be imposed upon the Howies upon the owner of land in the same neighbourhood who may recently have paid many thousands of pounds for it?

Senator Blakey - How can we remedy that under the Constitution?

Senator ST LEDGER - That is the business of honorable senators opposite; it is not mine. Will honorable senators opposite reply to my argument? Under this measure these lands will be taxed to the same extent, although they were acquired by their owners under absolutely different circumstances. If it may be equitably applied in the one case, it must be inequitable in the other, and it is because this Bill makes no discrimination in such cases that I most seriously object to it. Where does the phrase, " incremental value," and the proposal to tax it come from? It comes from Henry George, who, twenty or thirty years ago, deluded the world and himself.

The CHAIRMAN - Order i I ask the honorable senator to confine himself more closely to the question.

Senator ST LEDGER - Senator Walker's amendment is submitted to mitigate what he and I consider to be the inequity - or shall I say the iniquity - of not taking into consideration the amount paid for land to the Government, in order to enable the Government and the community to secure an incremental value? That is the rock upon which Henry George split, and the reason is palpable. He was driven to the adoption of the single-tax, because he knew he could not meet the difficulty properly.

Senator Pearce - Is this a homily upon Progress and Poverty ?

Senator ST LEDGER - As the Minister of Defence has come to the assistance of his party, I am disposed to think that I have said enough upon the question of the single-tax, and also upon the stupid proposition enunciated on the other side that land has no value but what the community creates. The Vice-President of the Executive Council has pointed out, in answer to some objections raised by Senator Walker, that when the settler went on the land the community gave him some advantages by constructing roads and railways and helping him to destroy rabbits t and other pests, that he was being paid 'all the time, and that if he lost by his enterprise so much the worse for him. The Minister's vision was not wide enough. What is going on in Queensland to-day? There are settlers on freeholds and settlers on leaseholds which they may gradually convert into freeholds, who have to clear their land of pests, and the great obstacle to that work is the pest-infested community-owned land. In those parts of the State - even on the Darling Downs, which comprise the richest and most productive agricultural land in Australia, and, in some respects, in the world - the settlers have frequently complained that the work of settlement and development is impeded by the inaction of the Crown with regard to clearing its land of Bathurst burr and prickly pear.

Senator McGregor - Under this Bill those settlers will not pay any land tax.

Senator ST LEDGER - They may not pay the tax to-day, but they may do so at some future time. I am dealing now with the honorable senator's contention that the Government is all the time a benefactor to them. As a matter of fact, in the districts I have referred to, the State Govern ment is, to some extent, retarding the work of settlement and development. Although the settler, whether freeholder or leaseholder, is bound by law to clear his land of pests, yet the adjoining block, which belongs to the community, is allowed to become a nursery for pests, so that after all the community-owned land is not by reason of that fact an advantage to him but rather an obstruction to the utilization of his land. Over and over again, both in the State Parliament and by Divisional Boards, resolutions have been passed calling upon the Crown to do what they compel the settlers to do. Let me put the position from another point of view. About £125,000,000 was paid to the Crown for the lands which are held at present. I know of a case in Queensland where a quarter of a million has been lost by two or three squatters who came from Victoria, and who were almost ruined thereby. They paid heavy rents on their leaseholds year after year, and they lost every penny of the sum I have mentioned.

Senator Guthrie - This measure does not touch leaseholds.

Senator ST LEDGER - I know that it does not, but the principle is just the same.

Senator Guthrie - No, the honorable senator is barking up the wrong tree.

Senator ST LEDGER - I started with a reference to leaseholders because to us in Queensland the leasehold tenure for large areas is more familiar. The loss of £250,000 on the leaseholds to which I alluded is nothing compared with what many freeholders in that State have lost. I have known cases where men have paid hundreds of thousands of pounds' for land at the rate of ,£i per acre when the Crown was hard up for money with which to carry on the public services. The £125,000,000 which was paid by private individuals to the Crown for lands has been used by the Government for developmental purposes. If, on the one hand, the community created some value to the buyers of land, it is equally true, on the other, that the buyers have done some good to the community. If you are going to ask for incremental value, you ought to allow for so much of that money as has been contributed by private individuals in order to add to that publicly created value, if it is such.

Senator Guthrie - The Bill does.

Senator ST LEDGER - lt does nothing of the kind. The graduated tax is based on the incremental value, and not even the honorable senator can justify the rapid increase in the rate with the increase of values. It is only justified by the Government on the principle of the incremental value. But if you adopt that principle, surely you ought to take into consideration the fact that there are some freeholders who have paid money, in order to enable the Government to have that very incremental value, and, as Senator Millen has pointed out, it is proposed to tax them twice.

Senator Guthrie - Name them, and we will exempt them.

Senator ST LEDGER - If the amendment be accepted they can be ascertained at once, because those who wish to take advantage of it will have to declare the amount which they paid to the Crown.

Senator Guthrie - Senator Walker has virtually withdrawn the amendment.

Senator ST LEDGER - No; it has been modified slightly. If present holders purchased their land, not from the Crown, but from private individuals, the amendment will not apply, nor does Senator Walker seek to touch them. I hope that the justice of his amendment will commend itself to the Committee, and that, at any rate, it will be met, not by mere jeers, but by argument.

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