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Wednesday, 16 December 1914

Senator PEARCE (Western Australia) (Minister of Defence) . - I move -

That this Bill be now read a second time.

This is another of the Bills introduced by the Government for the purpose of raising additional revenue. Some criticism has been directed against our policy in that regard. It has been urged that this additional revenue is not being required for, and is not intended to be applied to, the purposes of the war. That is a half truth. It is obvious that not only the revenue of the Commonwealth but the revenue of every State has been seriously disturbed by the advent of the war. It is clear that had we in Australia been going through normal times our revenue this year would have been very much in excess of what it will be in existing circumstances. That being so, the Government have to bring forward taxation measures to make good the deficiency, and even in doing so we have still to face the fact that there will be a deficiency on the year's transactions if our estimates are realized. I make that statement because, while it can be correctly said, in the technical sense of the term, that the money derived from this taxation will not be devoted to the war, nevertheless it can be truthfully said that it is rendered necessary because of the conditions created by the war. Those conditions, 1 admit, are accentuated by the fact that Australia is suffering from a very severe drought which has also had a prejudicial effect on the revenue producing capacities of our people. The object of this measure is to impose a duty on the estates of deceased persons. As regards the rates, it follows the 'State legislation on the subject - that is to say, the taxation is of a progressive character. The Bill exempts estates of £1,000 in value and under; the taxation begins on estates above that amount. As it is not a machinery Bill, I am not called upon to discuss the application of the rates. The method by which the taxation is imposed is dealt with in another Bill which will come up by-and-by. On estates exceeding £1,000, aud not exceeding £2,000, duty is payable at the rate of £1 per cent. , while on estates exceeding £2,000, duty is payable at the rate of £1 per cent, together with an additional percentage of onefifth of a pound for every £1,000 in excess of the sum of £2,000, but so that the percentage shall not exceed £15. We have to recognise the fact that in every State in the Commonwealth this form of taxation has been imposed. If honorable senators will turn to the Commonwealth Tear-Book for 1912, they will find, at page 814 onwards, a statement of the principal rates of the State taxes of this description. I do not propose to go through them, but it is sufficient to say that they vary in the value of an estate at which the tax commences.

Senator Millen - Which State imposes the highest tax?

Senator PEARCE - The State of New South Wales. The maximum tax in that State is 15 per cent, on estates exceeding £70,000 in value.

Senator Millen - The Government propose another 15 per cent, on such estates, which will make the total tax 30 pec cent.

Senator PEARCE - That is so. I do not think that in any other State the maximum rate of the tax exceeds 10 per cent. In New South Wales the amount exempted is higher than in the other States. In some States the exemption is as low as £500. In New South Wales this tax is not levied upon estates up to the value of £1,000. On estates valued above £1,000 and up to £5,000, t'he tax is 2 per cent. In Victoria, on estates up to the value of £500 the tax is not imposed. On estates valued at over £500 and up to £1,000, the tax is 1 per cent., and over £1,000 it is 10 per cent. In South" Australia there is no exemption, but estates under the value of £200 pay 1 per cent. ; up to £300, 1£ per cent. ; and the rate increases to 10 per cent, on estates of the value of over £20,000. In Queensland, estates of less than £200 in value are nottaxable. Prom £200 to £1,000, the tax is 2 per cent., and increases up to 10 per cent, on estates of £20,000 value and over. In Tasmania, the tax is 2 per cent, on estates over £500 and up to £1,000 in value, and runs up to 10 per cent, on estates of over £100,000 in value. In Western Australia,' where the value of an estate exceeds £500 and is under £1,000, the tax is 2 per cent., and it runs up to 10 per cent, on estates above £20,000 in value. As regards the incidence of taxation, this, in my opinion, is one of the most just forms of taxation that can be imposed. Every person who acquires wealth is indebted to the community generally for enabling him to acquire it. The community protects his wealth, and gives him facilities for acquiring it. It is, of course, right and proper that every person should endeavour to make due provision for his widow and children, but very often a considerable amount of wealth is not the best provision that can be made for young people commencing the battle of life.

Senator Millen - I never heard of any one complaining of it.

Senator PEARCE - It is a good thing, of course, for young people to be given a fair start in life, but it must be within the experience of every member of the Senate that the possession of considerable wealth by persons commencing life has led to their undoing rather than to their advantage. This form of taxation returns to the community a certain amount of the wealth which an individual is enabled to acquire during his lifetime, leaving him full opportunity to provide adequately for those depending upon him. It is one of the most justifiable forms of taxation, and the Government have, therefore, every confidence in submitting it, believing that it will result in the. collection of a considerable amount of revenue from those who will be able to pay it without deprivation.

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