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Tuesday, 22 March 1927

Senator H HAYS (Tasmania) . - Although I am availing myself of my last opportunity to speak on this bill, it is not my intention to repeat the arguments I have previously adduced. We have been told that the main objective of the Government in submitting the measure was to separate Commonwealth and State finances, but although I have no desire to question the motive which prompted the Government, I believe that it is utterly impossible for that to be done. The Minister said that Tasmania and Western Australia, the States with the smallest populations, which are experiencing the greatest financial difficulty, should support these proposals. But those two States, and particularly Tasmania, have been losing population, and, therefore, the per capita system is not of great benefit to them. If these States are, as I have said, losing population, then, under the present proposals of the Government, which I understand, will require the States to impose more direct taxation, they will continue to suffer. The number of taxpayers having decreased, the burden upon those who pay the taxes will be greater. I still maintain that the smaller States will not benefit, and that if the Government vacates certain fields of taxation the States will not be able to obtain the amount the Commonwealth is now collecting.

Senator Abbott - Tasmania could then receive a larger grant.

Senator H HAYS - If Tasmania is to be financially assisted by the Commonwealth, the finances of the Commonwealth and the States will not be separated as the Minister suggests. Why should there be any attempt to discontinue the present satisfactory financial arrangement between the Commonwealth and the States? State loans are raised through the Loan Council, on which both the Commonwealth and the States are represented - a further indication that there is still a close relation between the two authorities. The more I consider this question, the more I am convinced that it was a mistake to introduce this bill. I shall oppose the third reading.

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