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Wednesday, 3 June 1942

Senator KEANE (Victoria) (Minister for Trade and Customs) (5:26 AM) . - The amendment moved by Senator McBride proposes to reduce the grant to New South Wales by £1,630,000. That reduction, I understand, is made up of £1,337,000, which the State has been saved in respect of child endowment. The balance is made up of the excess cost of widows' pensions over the amount of £427,000 already actually deducted. New South Wales will not be relieved of the whole cost of widows' pensions, because that State provides 10s. a week for each dependent child, whereas the Commonwealth scheme provides for only 5s. a week for the first dependent child. The estimated saving to New South Wales through the Commonwealth scheme is £427,000. The amendment moved by the Opposition should refer only tothe £1,337,000 in respect of child endowment. Regarding that amount, I would observe that the compensation payable under the bill is based on average collections of State taxes on income during the years 1939-40 and 1940-41, less deductions, as under: -


During the two years mentioned the amount paid from revenue on account of family endowment, together with the deficits experienced on revenue, were as follows : -


From this it will be seen that the State revenues were insufficient in either year to finance cost of any part of family endowment at all. The effect, therefore, of relieving the State of family endowment in those years would have been merely to reduce the deficits, but not to extinguish them. From the 1st July, 1941, State revenues are charged with the pay roll tax amounting in 1941-42 to £260,000 for governmental services, and a further £400,090 for the business undertakings included in the revenue budget. It will be seen, therefore, that the net gain to the State budget as a result of the Commonwealth child endowment scheme is £677,000, not £1,337,000. The saving of £677,000 in itself does not go far towards extinguishing the deficits totalling £3,916,431, experienced in 1939-40 and 1940-41, when the State was responsible for child endowment.

The special committee did not recommend that the compensation payable to New South Wales should be reduced by the amount of £1,300,000 for the following reasons : -

(1)   Although compensation was based on the years 1939-40 and 1940-41, it is necessary that the compensation payable should not upset existing financial arrangements in the States.

(2)   The compensation payable is £1,009,000 less than the revenue from income taxes budgeted for by New South Wales in the current year.

(3)   In the two years on which compensation is based, New South Wales paid child endowment of £1,300,000, but had an average deficit of £2,000,000.

Senator Foll - I suggest that the figure that is the subject of the amendment is not correct. It should be £1,307,000. Would the Minister accept an amendment including that amount ?

Senator KEANE - I will not accept any amendment.

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