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Tuesday, 22 March 1927

Senator GRANT (New South Wales) . - I desire to take advantage of this opportunity to say a final word against the passage of the bill. In the earlier portion of the debate, one would have thought that it was intended to abolish the per capita payment; but when one examined the bill closely and became aware of the intentions of honorable senators it was evident that the idea is to discontinue those payments only in the case of New South Wales, Victoria, Queensland and South Australia. Western Australia and Tasmania will continue to enjoy a very substantial grant from the Consolidated Revenue Fund. That is an entirely wrong principle to adopt. Had the Government decided to make the abolition complete it would have been on logical ground; but it ought not to expect honorable senators who represent those States from which it is proposed to withdraw the payment to lend their support to it. It has been stated that the Government is actuated by the fact that there are Labour Governments in five of the States; and, furthermore, it realizes that those governments will be able to resort to what is termed unpopular direct taxation. When these payments are discontinued it is obvious that, if those States from which the payment is to be withdrawn are to maintain their existing rate of expenditure they will have to seek other sources of revenue. I do not know whether the different State Governments are fearful of imposing direct taxation. Such a charge cannot be laid against the Treasurer of the State of New South Wales. He brought down a measure which imposed taxation directly upon the most powerful influence in his State - the newspaper influence; but it was declared to be ultra vires. That is not an indication of fear. The New South Wales Government has introduced a Child Endowment Bill, under which it is proposed to raise the necessary amount of revenue by the taxation of employers to the extent of £6,000,000, a year. Those proposals do not indicate any fear on the part of New South Wales to impose direct taxation. As a matter of fact the State Government is now seeking to levy a land value tax on estates valued at over £10,000. It may be true that other State Governments will be afraid to impose additional direct taxation because the taxpayers are already bearing a heavy burden, but time alone will show it. I have some very interesting figures relating to land taxation which ought to be placed on record. One return which was furnished to the Senate some years ago at my request shows that in 1915 the total value of the land in the various States and territories of the Commonwealth was £455,876,104. I am afraid, however, that those figures are now out of date, and that for comparative purposes they are of little value. In the Commonwealth Year-Booh the land taxation collected in the States and by the Commonwealth in 1924-5 is set out in the following table: -


If for no other reason than that the Commonwealth Government has announced its intention to retire from the field of direct taxation, more particularly that of land taxation, I oppose the bill. It is unfair to suggest that the whole of the burden of providing the revenue of the Commonwealth, except that derived from certain nominal forms of income tax, should be placed entirely on the shoulders of those least able to bear it. We have been informed by Senators Greene, Barwell, and others, and it is generally admitted, that taxation through the Customs falls most, heavily on those least able to bear it. We a*e alleged to be living under a protective policy, but there has never been any intention on the part of this Commonwealth Government, or its predecessors, so to arrange Customs taxation, that the revenue from that source will be a declining one. On the contrary, it has been increasing year after year, and we are informed on very good authority that this year we may expect to receive about £44,000,000 from Customs and excise duties. It ought to be as clear as noonday that if the goods which are taxed, when they come through the Customs provide such an enormous revenue, our protectionist policy, instead of encouraging and protecting local industries, is merely encouraging the landowners of the Commonwealth, and protecting them from direct taxation. But, of course, that is always the object behind Customs taxation; and the proposal to cease collecting from the land-owners of the Commonwealth £2,500,000, as some contribution towards the cost of administering the affairs of the country, does not meet with my approval. It may be true, of course, that the States will step into the field and collect a. similar amount through their own land taxes ; but as it will take a considerable time for that to be done, I strongly resent the retirement of the Commonwealth from this field of taxation. If for no other reason than that, I would certainly object to this bill; but, in addition, I regard the measure as absolutely unfair, inasmuch as it singles out for unfair treatment the States of Victoria, New South Wales, South Australia, and Queensland, by refusing to pay them the par capita grant, while special grants are paid to Western Australia and Tasmania.

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