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Tuesday, 15 December 1914

Senator BAKHAP (Tasmania) . - After what has fallen from the lips of the Minister of Defence, I must say that this Bill seems to me to be an attempt to partially impose an income tax. In States where the dividends of companies have been taxed, that form of taxation has been abrogated when an income tax has been imposed, and dividends ' have ranked as part and parcel of the income of companies. I think that this is a most remarkable attempt to levy an income tax in an indirect form on one section of the community. The difference between the rental value of a lease and its annual economic value is something which could be determined in connexion with an income tax. To introduce it in a Land Tax Bill - of which this measure is the corollary - the avowed object of which is to burst up large estates, is paradoxical in the extreme. This is the sort of proposal which ought to be explained in connexion with a Federal income tax. Has there not. been a very great difficulty experienced in connexion with the taxation of leases ?

Senator Findley - What is the honorable senator's point - that mineral leases should not be taxed ?

Senator BAKHAP - I say that the profits of mineral leases are part and parcel of the incomes derived by the holders of those leases. If we are going to differentiate between the rental value of a mineral lease and its economic value-

Senator Findley - Why should we adopt this roundabout method if we wished to secure the result which the honorable senator contemplates?

Senator BAKHAP - I strongly object to this sectional taxation. This remarkable attempt to secure what in some cases it will be most difficult to define, is a very unwise one, and in operation will prove to be very unsatisfactory.

Senator Lt.-Colonel Sir ALBERTGOULD (New South Wales) [10.37].- I quite agree with a good deal that Senator Bakhap has said in regard to this Bill. So far as Crown lands are concerned, it is not within the competency of this Parliament to tax them. This is an attempt to get round the provisions of our Constitution under which no taxation can be levied on lands of this character. The individuals who lease these lands from the Crown are supposed to pay their full rental value. Of course there are limitations in connexion with the whole thing. The States themselves have power to institute a change in regard to the rentals after the expiration of any fixed term. In this Bill the Government are endeavouring; in an indirect way to accomplish something which the Constitution prohibits them from doing in a direct way. But I ask honorable senators, " Is the tax fair in itself?" If a man is paying a fair rental for his land, and if an income tax is in operation, he contributes under that heading to the revenue of the State. Is it quite fair that we should superadd this tax in the. case of those who, presumably, are already sufficiently taxed ?

Senator Findley - That is an argument against Commonwealth taxation of any kind.

Senator Lt Colonel Sir ALBERT GOULD - It is not. There are certain conditions under which individuals have long leases granted to them, but in this case we are proceeding upon other lines. We are practically saying to the States, " If you charge 3d. in the £1 by way of rental for a leasehold, we think that the land is worth £1 per acre, and that it, therefore, ought to contribute ls. per acre." In that case the Commonwealth will get a revenue of 9d. in the £1. There are very many things for us to consider in connexion with this clause. The owner of the lands must be considered. The ownership of the minerals must be considered. The lessee has no right to cut valuable timber on a Crown lease. He is placed under many disabilities.

Senator Pearce - They are all regarded as a set-off to be added to his rent.

Senator Lt Colonel Sir ALBERT GOULD - They reduce the capital value of the land, and so assist in arriving at a fair rent. We must consider whether the tax on leaseholds will bring in a great amount of revenue or not. Leased freehold lands are likely to be much more valuable than leased unimproved Crown lands, which, if worth using for agricultural purposes, would probably be resumed and cut up by the States. The leaseholders already have to pay income tax, and for all the good that this tax on leaseholds will do, it might as well be wiped out. It will probably only cause unpleasantness between the Commonwealth and State Governments. It is a very unfair way of trying to get round the constitutional provisions which forbid the taxing of land the property of a State. But, after all, in opposing it there, one is simply running his head against a brick wall. Once the Government are told by the Caucus that a measure must be passed, that is the end of it. I believe that this provision was agreed to by a majority of one in a Caucus at which all the members of the party were not present. Members of- the Labour party, as representatives of the people, owe to the people the duty of letting them know how they come to their conclusions.

Senator Grant - Why do you all vote together ?

Senator Lt Colonel Sir ALBERT GOULD - We give our reasons for our votes in this Chamber, and occasionally our members are not unanimous. Honorable members opposite keep a discreet silence, and do not allow the public to know what a base institution the Caucus is with its closed doors and secret conclaves. They have entered into an agreement tot subordinate their independent judgment to the will -Of the Caucus, and to suppress information that the public have a right to learn.

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