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Thursday, 27 April 1961

Mr SPEAKER (Hon John McLeay (BOOTHBY, SOUTH AUSTRALIA) - Order! 1 ask the honorable member not to get too far away from the bill.

Mr UREN - This bill contains provisions which are part of the economic proposals of the Government and I am trying to point out that the Government should divert money from non-essentials to essentials. I am trying to bring out the point that a Labour government would not only use the principle in this field but would also use it to ensure that homes were built for the people instead of luxury units for the wealthy. This Government is permitting the construction of luxury hotels and commercial buildings, but we would build hospitals and schools for the people.

The Government allowed the production of motor vehicles to increase rapidly, lt introduced measures to control this increase and then reduced the rate of sales tax from 40 per cent, to 30 per cent, because it had solved the problem, or so it said. But immediately it did this, sales of motor vehicles increased once again. This industry will again eat the heart out of the Australian steel industry and will again be a drag on petrol .and rubber imports. Theseare some of the problems that face the Government, and it could do much by diverting capital into education. We agree that this bill provides a good precedent, although it is a bit late. For eleven years the Government has done nothing.

To give some idea of the great wealth that has been diverted to those who are already wealthy, I shall give some figures relating to the taxation allowance for th< depreciation of plant. In 1948-49 £96,000,000 was allowed for the deprecia-tion of .plant and by 1959-60, the figure- had grown to £512,000,000. This is an increase of more than 500 per cent, in a period of eleven years. We say that the renewal of plant should be encouraged in certain essential industries so as to make them efficient If they are efficient, Australia can develop as a competitive nation. But we say that a tax rebate should not be allowed for the depreciation of plant in non-essential industries. This tax rebate should be withdrawn from certain sections that have built up great wealth. The money should be retained in the national purse and spent on works that would lead to the development of the country.

Earlier, the honorable member for Blaxland (Mr. E. James Harrison) spoke about the development of Australia and referred to the eastern rivers of" Queensland. I have just returned from' Rockhampton. I have seen the eastern rivers of Queensland and can understand the need to develop them. Australia is one of the driest continents of the world. We should be damming these rivers and turning their waters inland1. This was one of the great visions that Bradfield' had. many years ago, but only a Labour government will ever bring the vision to- reality, lt was a Labour government under Mr. Chifley that started the Snowy Mountains project and only a Labour government will undertake such projects as the Bradfield scheme for Queensland and the Ord River scheme in. Western Australia. These States are crying- out for development and only a socialist government will make available the money needed for their development. lt is interesting to look at another position and see how the wealthy are becoming wealthier. Undistributed profits in the hands of Australian companies rose from £81,000,000 in 1948-49 to £205,000,000 in 1959-60. This is wealth that we can control. Dr. Coombs in his Perth lecture in 1959 said that undistributed profits were an indirect tax levied by companies on consumers to pay for future development. That is exactly what is happening under this Government. Undistributed profits increased by more than 100 per cent, in the period from the last year of the Chifley administration until 1959-60. Labour could tax. undistributed profits and divert a good deal of that wealth into the development of Australia in the best interests of the people, lt- might be said' that some companies are acting in the best interests of Australia's development, and essential industries could be allowed to retain certain undistributed profits without tax. The hammer of taxation can be used in respect of non-essential goods, which are at present flooding the market. The. Opposition supports the Government's proposals. This Parliament has great taxing, powers. Mr.. Chifley used those powers, and I am sure that they will be used by Labour to a great extent- in the future.

In a recent speech in the House the honorable member for Yarra (Mr. Cairns) put forward certain proposals in relation to the practice of granting as an allowable deduction for taxation purposes expenses incurred in advertising non-essential products. We should, clamp down on this practice. Organizations that spend large sums of money advertising non-essential items should not be able to claim the cost of such advertising- as an allowable taxation deduction. A great amount of money is being spent by various firms in this way.

I wish -to say. a_ few words- now about _ undistributed profits of overseas companies operating in Australia. We know from information supplied by the Government that since 1947-48 overseas monopolies have invested in Australia £349,000,000 worth of undistributed profits. These wealthy overseas companies have been able to accumulate vast sums of money and increase their assets in this country, while in effect levying a tax on the Australian consumers. The problems to which I have referred are problems that a. Labour government will deal. with, properly when it is returned to. power.

For two years the Constitutional Review Committee heard evidence and deliberated. A further two years have elapsed since that committee submitted its report to the Parliament, and still nothing has been done. We know that the Government will never act on the committee's recommendations, so the only powers that the Parliament will have to control the distribution of wealth in the community will remain its taxing powers. The Taxation Branch belongs to the people, and we should ensure that it works in the best interests of the people and in the best interests of the development of Australia. A future Labour

Treasurer will see that the Taxation Branch does work in that way.

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