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Thursday, 8 December 1927

Senator PAYNE (Tasmania) . - I listened attentively to the strictures of the Leader of the Opposition (Senator Needham) concerning what he termed the failure of the Government to realize its obligations to the people of Australia with regard to the imposition of direct taxation. I remind him that a few years ago this Parliament did not subject the great masses of the people to that form of taxation, and that the great bulk of the revenue from income taxation comes from comparatively a small number of taxpayers. I deprecate the base ingratitude of the honorable senator and other members of his party, who, while professing to represent the working classes, ignore this fact.

The honorable senator's suggestion that the Government should continue to im pose this burden upon a small section of the people is entirely without justification. Any remissions in direct taxation should appeal to honorable senators opposite, because the relief given is felt by the whole of the people. If taxation burdens are made lighter, the money that remains in the pockets of the taxpayers is available for industry and developmental purposes. In this way further employment is provided for the people. I was particularly interested in the honorable senator's references to the public debt. He stated that the gross debt of the Commonwealth was considerably more than £400,000,000. He overlooked entirely the fact that the net debt of the Commonwealth, apart from the war debt, is only £44,000,000, and that the bulk of this debt is represented almost exclusively by works which, if not directly, are indirectly reproductive. He also referred to the magnificent effort which has been made by the people of Great Britain to reduce their war debt. We all agree that the British taxpayers have been standing up magnificently to their obligations. I invite honorable senators to examine the position of the Commonwealth and see how the people in this part of the Empire have been meeting the financial burdens laid upon them as the result of the war. The honorable senator chooses to ignore the fact that this small community of only a little over 6,000,000 people has paid out of revenue war expenditure amounting to no less a sum than £280,000,000. On a population basis such a result has not been achieved by any other part of the British Empire. We have a war debt of fairly considerable dimensions, but not so large as to make us doubt our ability to wipe it off. Ample provision for its liquidation has been made by the establishment of a sinking fund. Surely there can be no sounder finance than that! The bill proposes to relieve those who have been bearing practically the whole of the direct taxation that has been imposed to the extent, of 10 per cent.

Senator Hoare - What about the man on the bottom rung if the ladder?

Senator PAYNE - He is not asked to contribute one penny by way of direct taxation. If the honorable senator will study the tables on pages 21 and 22 of the budget papers he will see that the man on the bottom rung of the ladder is exempted entirely from the payment of direct taxation. First of all there is a statutory exemption of £300; then the taxpayer is allowed to make a deduction in respect of each child. A married man with three children would need to have an income of £450 a year before he would be called upon to pay any income tax. I do not believe that in any other part of the British Empire the great mass of the people have had such remissions granted to them. These facts are ignored by honorable senators opposite because they do not expect to receive any support from the section which is to be relieved of a certain proportion of the tax. If this proposition could be connected in any way with the mass of the people, Senator Hoare would welcome it with both hands.

Senator Sir Henry Barwell - If he looked far enough he would see the connexion.

Senator PAYNE - This will certainly benefit those from whom Senator Hoare gets his support, because some of the money that is now paid to the Treasurer will be released for investment in industry. Thus more employment will be provided, and we shall become more selfsupporting. The lighter we make taxation the better for the community. It is proposed to reduce the tax by 10 per cent.; but there are also other admirable provisions for giving relief to those who have been suffering under a grave injustice. The provision that the losses of one year may be set off against the profits of succeeding years is a wise and equitable one. It is most unjust to compel a man who sustains a loss of £500 this year, and makes a profit of £1,000 next year, to pay the full amount of tax on the £1,000. I do not charge either the department or the Treasurer with having been wilfully unjust in the administration of the act. Its character is such that it is impossible to make it perfect. Year after year we are obliged to amend it. Only experience can show us the directions in which anomalies may be rectified. I welcome the bill, and heartily support the motion for its second reading. I trust that in committee honorable senators will be given information that will enable them to grasp fully the meaning of each proposed amendment of the act. Even a cursory examination proves that those amendments are eminently satisfactory, and that they will be welcomed by the community. Instead of proving a disadvantage to the Commonwealth as a whole, as suggested by the Opposition, I believe it will be found that they will confer upon it a considerable benefit.

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