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Tuesday, 22 March 1927

Senator NEEDHAM (Western Australia) . - I hope honorable senators will now calmly think over what has been done. Even at this late hour the Government should beat a strategic retreat. There is no reason why a vote should now be taken on the third reading. That the Government has a majority does not necessarily mean that it is right. Notwithstanding the various technical points that have arisen during this debate, the question to be decided is whether the Commonwealth should deprive the States of certain sources of revenue which have been theirs for a number of years, and that only three month's notice of its intention to do so should be given. By agreeing to the third reading of this bill the Senate will have constituted itself a court of summary jurisdiction. The authority of the Commonwealth is to be exercised, in what can only be described as a regrettable manner. The Government has stated arbitrarily that the States will receive compensation for the money taken from them; but that that will not be so has been made clear during this debate. The Government, even now, should stay its hand, and issue another invitation to the States to meet the Commonwealth in conference. The Prime Minister would then be in a position to say that although the Commonwealth Parliament desired the discontinuance of the per capita payments, it had stayed its hand pending a further conference to discuss the best means of compensating the States for the withdrawal of those payments. It has been argued that in proposing to vacate the field of taxation on the incomes of individuals the Treasurer is acting generously towards the States. That is not so, because the Commonwealth, by imposing a tax on incomes, is occupying a field of taxation which it ought not now to occupy. When direct taxation was imposed by the Commonwealth during the period of the Great War, it was distinctly stated that it was a war expediency. Nevertheless, succeeding Commonwealth governments have continued to impose it. To say now that by relinquishing its taxation on incomes to the extent of 40 per cent. the Commonwealth is compensating the States is wrong. I hope that there will be a majority of the Senate opposed to the third reading of this bill in order that the States may have a further period in which to submit alternative proposals.

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