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Wednesday, 31 October 1956

Mr PETERS (Scullin) .- This bill strikes the last blow in relation to a federal land tax, and it affords a final opportunity for us to consider the effect of federal land tax legislation upon this country. The federal law, of course, has already been repealed. This bill merely provides for the collection of outstanding moneys due under the land tax legislation, which was introduced in 1910 by a Labour government, in order to compel the subdivision of large landed estates in the interest of closer settlement, to prevent the further growth of land monopoly, and to obtain for the Commonwealth some of the unearned increment in land values. Land taxation, of course, was one of the major economic measures which influenced the development of this country. The land tax legislation probably did more to promote progress in this country than has been done by any other legislation since federation.

Prior to 1910 land monopoly and land aggregation were the order of the day. Vast numbers of people congregated in the cities and fewer and fewer people were being settled on the land. In order to cure that position the Labour government imposed a land tax. During the first three years of the operation of that tax more land went under the plough than had gone under the plough during the previous 30 years. Vast numbers of people went on the land. In a period of a few years the land subdivided in the interest of closer settlement increased by areas valued at £117,000,000. That was the value of land utilized for the purpose of establishing new rural settlements under that legislation. Unfortunately, World War 1. broke out, and as a result of that war the Labour government was put out of office. The Bruce-Page Government ultimately gained office and, during the period that the present right honorable member for Cowper (Sir Earle Page) was the " Tragic Treasurer " of this country, he allowed the holders of land to refrain from paying land tax. The tax due on Crown leaseholds, and not collected, during the period of office of the Bruce-Page Government, amounted to £836,000. On Crown leaseholds the amount of tax assessed and not paid during the period of office of that government, from 1924 to 1929, amounted to £162,000. The amount of tax due and not paid on freehold land amounted to £210,000. Thus, tax amounting to more than £1,000,000 had been in arrears for a period of five years.

First, the then government did not collect the land tax, then it whittled away the effectiveness of the tax. It reduced the tax by 10 per cent. The tax, as imposed by the Labour government, provided for the exemption of farms of an unimproved value of less than £5,000. That meant that a farm worth approximately between £10,000 and £15,000 was not subject to land tax. The owners of farms immediately above that value paid a small rate of tax, the rate increasing with the area of the farm and its value. Then the government of the day reduced the tax by another 10 per cent. Time passed, and the Lyons Government, another anti-Labour government, came into office. It also reduced the land tax by 10 per cent. The result was that this whittling away of the land tax was to destroy the effectiveness* of the tax. Then into power came the Menzies-Fadden Government, lt did not say to the people of this country, " We are out to abolish the land tax ". No! It reduced the rate of land tax by 10 per cent. After the Labour government had imposed land tax, so evident to the people of this country were its vast advantages, so obvious was it that- it was leading to the cutting up of big areas of land and helping to populate the rural areas, that not even a tory government dared to go to the electors and say, " If we are returned we will abolish the land tax ". No! Tory governments did not abolish it. As I have said, it permitted the taxation authorities to leave the tax uncollected. Then it reduced the tax by 10 per cent, and again by another 10 per cent. Then the present Government came into power, and brought down legislation to reduce the tax by a further 10 per cent. In order to meet the conditions that then existed, it also increased the exemption to cover farms to a value of approximately £8,270. That meant that only a farm worth in the vicinity of £30,000 or more would be subject to federal land tax. When the Government was reducing the tax it did not indicate its intention to abolish the tax. Not at all! It led the people and this Parliament to believe that its object was merely, on the one hand, to reduce the tax, and on the other hand to increase the exemption. Then a year or two went by and the Government abolished the tax. Now, under this legislation, the Government is driving, as it were, the final nail into the coffin of the land tax.

If the Government does not intend to impose a land tax for the purpose of preventing land monopoly and breaking up big estates in this country, what weapon does it propose to use for that purpose? Land aggregation has been going on ever since the whittling away of the land tax commenced, so that to-day there are 20,000 to 30,000 fewer farms in Australia than there were in 1939, and there are 34,000 fewer people in rural occupations than there were in 1939 whilst, at the same time, there are 2,000,000 more people in Australia now than there were in 1939. Those statements, those figures, of course, are unchallenged, and unchallengeable. They are the facts and figures given by the Minister for Primary Industry (Mr. McMahon) and the Minister for the Interior (Mr. Fairhall).

So I say to honorable members opposite that if the Government they support is sincere in its advocacy of increasing the rate of development in this land, and in particular of increasing the productive capacity of the rural districts, and sincere in its professed desire to increase our exports - because the only Australian exports of importance are primary products - then it must increase the area of land that goes under the plough. In order to achieve these objects the Government must take action that will result in the subdivision of the big areas that are not being used to their full productive capacity. Now that it has abolished land tax, by what means does it propose to achieve that objective? Apparently it has no contribution to make to the solution of that problem.

Mr Davis - It has made a greater contribution in seven years than you could make in a lifetime.

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