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Wednesday, 6 May 1942

Mr HARRISON (Wentworth) . - I move -

That the National Security (Values for Land Tax) Regulations under the National Security Act, made by Statutory Rules 1942, No. 128, be disallowed.

The Opposition does not wish to be obstructive in regard to this torrent of regulations which is flowing into the House, but we consider that it is necessary to give more mature consideration to some of -them. I believe that the Government, in its desire to encompass a full war effort, is apt to disregard established principles in regard to certain matters, and consequently may, unwittingly I believe, inflict injustice upon some sections of the community. When the Government has its attention drawn to the injustices it will, I have no doubt, take steps to amend the offending regulations. We have no other way in which to express ourselves regarding regulations, than by moving for their disallowance. If, after a discussion, the

Government can see eye to eye with the Opposition on these matters we shall not divide the House; but quite obviously we cannot permit the regulations now under consideration to go without pointing out certain flaws in them. Statutory Rule No. 128 has. we know, been designed for a specific purpose, which is set out quite clearly. Its purpose is to peg land values for taxation purposes at the level at which they stood at the 30th June, 1939, which is the beginning of the triennial period for land tax purposes. We maintain that so many factors may serve to bring about a change of values during the triennial period that this provision, in its present form, might easily work a grave injustice. The purpose which the Government had in view in framing these provisions is set out as follows : -

The object of these regulations is to post pone the revaluations of land required to he made for the purposes of the Land Tax Assessment Act 1910-1940, owing to the practical impossibility of making such revaluations due to the acute shortage of man-power during the present war.

I am accepting that statement of the position, but I have no doubt that some honorable members will point to the fact that most of the work of revaluation would be done by men who are not of military age. They may point out that, on the plea of conserving man-power, many things are being done which have no real bearing upon the man-power problem whatsoever. Neither do I propose to criticize the Government's proposal for the stabilization of land values. It may well be that such stabilization is desirable in time of war, but I do suggest that the Government has chosen the wrong point of time for this purpose. In my opinion, the end of the triennial period would be the ideal time to choose. We know that, during the triennial period, the lodging of appeals may have a direct bearing upon the valuation of land for taxation purposes, and if values be stabilized at the figure prevailing at the beginning of the triennial period, anomalies may well be created and injustices perpetrated. In section 20 of the Land Tax Act 1910-1940 it is clearly pet out that, during the currency of the triennial period, values shall not be increased except upon a change of owner- ship. On the other hand, it is stated that a reduction of value may be permitted in the event of a successful appeal against a valuation. That immediately raises a problem of great magnitude because, within the triennial period, land values may materially alter due to circumstances visualized in the act, as well as to a multiplicity of other factors which may induce the taxpayer to invoke the provisions of the act, and lodge an appeal. En stabilizing the values obtaining at the 30th June, 1939, which is at the beginning of a triennial period, these regulations ignore the fact that the assessed value may have been altered since that date. Of course, I assume that I have accurately interpreted them. If I should be wrong, I ask the Treasurer to correct me.

I shall now cite examples for the purpose of showing how these regulations may cause injustice. In one instance the assessment for 1939-40 was accepted after an objection lodged by the taxpayer company had been disallowed by the department. The company also objected to the 1940-41 assessment, and, after negotiation, the unimproved value of the lands concerned was reduced by approximately £3,600. In the 1941-42 assessment now issued, the department reverted to the values obtaining on the 30th June, 1939. The taxpayer is denied the right of objection and is forced back on tothe higher assessment. This completely ignores the fact that the value tion in 1939-40 was incorrect, not, possibly, at the time that the valuation was made, but during the period over which the appeal was lodged, because the value of land fluctuates.

Mr Lazzarini - The value of city property usually increases.

Mr HARRISON - Unfortunately, a downward trend is evident at the present time.

In another instance, land was acquired during the year 1939-40 for a figure considerably below the value assessed in the vendor's hands, as at the 30th June, 1939. Although the 1941-42 assessment has not yet been issued, it appears that the present owner will be assessed, in pursuance of the regulations, at the vendor's value as at the 30th June, 1939, and that this fictional value will remain unaltered until the regulations are amended or repealed. In other words, this property was purchased for a figure considerably below the assessed value, and now the owner will be taxed upon the increased value, as it was assessed at that particular period. Doubtless these anomalies are accidental, but they illustrate that injustices can he inflicted upon some persons when, in the drafting of a regulation, no consideration is given to its incidence upon taxation.

My third instance is most interesting because it reveals an extraordinary in crease of taxation during the last few years. In 1939 the property was assessed at £81,000. In 1940-41 the figure was reduced on appeal to £73,000. The department proposes to revert to the 1939 valuation, though it had already agreed that the value of the property had been overestimated by £8,000. However, the taxpayer will again be taxed on the value of the property in 1939, namely, £81,000.

Mr Anthony - Did a court of appeal reduce the valuation?

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