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Thursday, 28 November 1935

Senator GIBSON (Victoria) . - I do not propose to support the request, although I feel strongly in regard to the property tax. I suggest that the Government - especially in view of the statements of the Prime Minister (Mr. Lyons), that this imposition would be abolished at the earliest opportunity - should increase the rate of income tax byl-J per cent., which would compensate for the remission of the property tax. This would place mortgagors in a better position than at present, for many of them will have great difficulty in borrowing money. I resent Senator Johnston's attitude, which is also adopted by some other honorable senators, of laying the blame on the Federal Government for the extravagant expenditure that occurs in Australia. Such an attitude may be popular in the various States, but it is altogether wrong for a member of the Federal Parliament to adopt it. Who is spending the money to-day? The States have added £130,000,000 to the national debt in the last seven years, compared with £4,000,,000 added by the Commonwealth. The States are responsible for the extravagance.

Senator Brown - Is it extravagance?

Senator GIBSON - A great deal of the extravagance arises from the generosity of the Commonwealth in making liberal grants of money to the States. If the odium of collecting taxes devolved on them, they would not be so ready to spend money as they are to-day. Is the forthcoming loan on behalf of the Commonwealth or the States? Of course, the money is being raised for the States, which are going merrily along adding £20,000,000 a year to the deficits of this country ! The States will shortly have to reconsider this reckless policy. I do ask the Government to consider my suggestion to increase the income tax. because mortgagors are enduring hardships by paying higher rates of interest temporarily. A greater measure of prosperity has come to Australia in the past two years than anybody expected, and I hope the day is not far distant when high taxes will be reduced. In the meantime, relief should be given to mortgagors.

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