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Thursday, 28 November 1935

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) . - I should not have spoken in this debate had not my colleague from Western Australia (Senator -Johnston) made some' astounding statements in support of his amendment. The honorable gentleman has consistently advocated that the Commonwealth Government should retire from the field of income taxation, leaving this source of revenue to State governments. I should very much regret that step, because the Commonwealth would surrender revenue amounting to about £13,000,000, and as a consequence its attitude to proposals for financial assistance to the smaller States might undergo a change. It stands to reason that the loss of such a huge amount of Commonwealth revenue would have serious repercussions upon the States. I take this opportunity to dissociate -myself from Senator Johnston's advocacy of the retirement of the Commonwealth Government from this field of taxation. Recently, the Leader of the Senate (Senator Pearce) 'replied effectively to Senator Johnston in this connexion, when he showed clearly that Western Australia would lose by the vacation of this field of taxation by the Commonwealth. A few weeks ago, 'the Melbourne Age voiced a strong protest against continued applications by the less wealthy States to the Federal Government for financial relief, and pointed out that 'tax-payers in Victoria, and presumably in New South Wale® 'also, were being called upon to contribute too much towards the relief of the poorer States. I do not agree with the opinions expressed in the Ago, which, unfortunately, viewed the subject from only one angle. It forgot that, ever since the discovery of gold in Western Australia in 1S92, that State has 'been a good customer of the manufacturing States. Gold to the value of about £180,000,000 has 'been. produced by Western Australia and much of it has been exchanged for manufactured goods imported from the other States, principally from Victoria. In other words, a big proportion of the value of the gold production of Western Aus tralia has come to the Eastern States to pay for goods imported from them. No mention of that fact was made by the Age, which claimed thai the "mendicant States " were .asking for too much of the federal pie. Some weeks ago, when discussing the budget, I pointed out that the Treasurer (Mr. Casey) had taken a rather gloomy view of the financial position and had disregarded the greater prosperity evident throughout the Commonwealth. I stated then that conditions showed an upward trend, and I hinted at a federal surplus again this year. I now join with Senators Gibson .and Payne in urging that, if the super tax be not entirely wiped out, it should at least be reduced substantially, and not merely by a paltry 1 per cent.

Senator McLeay - Does the honorable senator regard a reduction of 1 per cent, as paltry!

Senator ALLAN MACDONALD (WESTERN AUSTRALIA) - It is a paltry reduction considering the incidence of this tax. The marginal note to clause 5 - " .Further tax on income from property " - is objectionable. The abolition of the super tax would mean that carpenters, bricklayers and other artisan, who are largely dependent for their work upon the type of taxpayer affected, would ,have more opportunities to obtain employment than they have now. I welcome the reduction of the tax as a step in the right direction, but I hope that, if not this year, the Government will see its way, next year, to abolish it altogether. I am encouraged in that hope by the figures recently published showing the results of the financial operations of the Commonwealth for the last four months.

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