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Tuesday, 12 September 1972
Page: 1214

Mr ENGLAND (Calare) - During this debate on the estimates for the Department of the Treasury and the Advance to the Treasurer I would like to draw attention to 2 aspects: Firstly, the general question of the raising of revenue by the Commonwealth compared with the States and secondly, if time permits, the alleviation of the burden of estate duty and gift duty as forecast in the Budget and for which legislation has been introduced into this House.

The raising of revenue by the Commonwealth and States is a matter which constantly has come into the minds of the public. This is so whether the expenditure concerns social services of all types, transport, power supply or water conservation. But regardless of the purpose of the expenditure it is as well to remember that no government has anything of its own to give away. All of the funds which are raised come from the public by way of tax or by way of contribution towards loan funds. I find that there is a very real lack of realisation surrounding the source of funds which are available for government use in the interests of the public.

It is repeatedly brought home to the member, I hold, that the general public believes that the vast bulk of funds raised by governments is raised and distributed by the Commonwealth. One unfortunate reaction from this belief is the impetus that the belief gives which contributes to centralism in government. There is a continuing demand coming forward for the Commonwealth Government to act in areas which are constitutionally the preserves of the States and which should be left as such.

I think there is far too much emphasis placed on the role of the Federal Government as a money source. The demand that I speak of I find comes from all quarters. It comes from individuals and from organisations in a very wide field. When it is pointed out that perhaps the proposition or the demand which is put forward falls outside of federal responsibility, the reply comes back that the Commonwealth has all the funds. How often we hear that, but it is not so. I have watched this closely for several years. What is the position? Let us compare the financial assistance grants to the States by the Commonwealth with revenue collected by the States by way of State taxes. The source of ray figures are the Budget papers for this year and for previous years. Because time will not permit me to deal with all States I will deal only with New South Wales. I have selected this State for no other reason than that the electorate of Calare falls entirely within the boundaries of New South Wales. The figures which I shall give to the House have been taken from the appropriate New South Wales Year Book.

In 1969-70 New South Wales raised $344.3m by way of State taxation. I will give a breakdown of that amount later. During that period New South Wales received from the Commonwealth $373.9m by way of State grants. Therefore we had a figure $344.3m compared with $373.9m. There is not much difference between those 2 figures.

In the following year, 1970-71, State taxes raised by New South Wales amounted to $364.6m, and it received from the Commonwealth $470.8m by way of State grants. The results are even more striking in the financial year just completed. The State taxes amounted to approximately $550. 6m. I hasten to point out here that the actual figures are not yet available. I have relied on estimates made by the State of New South Wales. I repeat that the amount of money raised by the State is $550.6m. During that year New South Wales received from the Commonwealth a total of S462.2m. 1 shall give a breakdown of some of these taxes which were collected by New South Wales and I have no doubt that the other States fall into a similar pattern. The State taxes were made up of death duties, stamp duties, land tax. racing and betting taxes, liquor licences, motor taxes and licences, poker machine taxes and, of course, during this last year a very big sum has been added in the form of payroll tax. In New South Wales the sum collected by way of pay-roll tax is $ 146.4m. I have not included the local rates and taxes which were collected within the State. Therefore, looking back, we see that in the financial year not long completed New South Wales raised $88m more by way of its own taxes than it received from the Commonwealth by way of State grants. A major contributing factor to this state of affairs was pay-roll tax, which had become the State's particular prerogative. 1 regard the action on the part of the Commonwealth to give the States access to a tax which could be justly termed a growth tax to be enlightened.

What is the point that can be made about this situation? Firstly 1 want to highlight the successful efforts of the States themselves in raising their own revenue. Secondly, I would like to highlight the fact that in one State at least - that is New South Wales, and I have no doubt that the others follow closely and may even lead - the Government does not depend as much as some people think on the Commonwealth for its financial life blood. Thirdly, the continuing demands on Commonwealth financial assistance in matters which are constitutionally State prerogatives play into the hands of the centralist. The old saying: Where your treasure lies there your heart lies also' applies here. I think that we can paraphrase that quote and make it more appropriate by saying that with a grant of funds from the Commonwealth for any

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specific purpose there is also a responsibility to see that the public funds are spent correctly. The trend to centralism leads to the erosion in the end of State rights.

In the few minutes left to me I would like to say something about estate and gift duty. I point out that the further alleviation of the effects of estate and gift duty will be of benefit to the public in general. The Treasurer (Mr Snedden), in delivering his Budget Speech and submitting the Budget papers, set out very clearly a number of examples which I think have been distributed to all honourable members. His first example dealt with a suburban estate going wholly to close relatives. It is clearly set out. The estate comprises the matrimonial home and furnishings - this is the sort of thing which happens every day - the family car, life assurance, small amounts of cash and other investments. In an estate with a value, say, of $40,000, the duty before the Bill is passed would be assessable at a figure of $937. The proposed duty under the Bill will be nil. The Treasurer has set out a number of other instances dealing with suburban estates. He then deals with rural estates.

To some it seems incongruous, but nevertheless it is a fact, that in primary industries where so many have suffered the effects of recession and loss of income and whose position has caused them to call for government assistance and for access to better finance, there should also be a bitter resentment at the impact of estate duty in both Federal and State fields. The position is that the farmer and grazier and many other rural business people are, on paper at least under our present valuation system, asset wealthy and yet are in a state of very low liquidity. Where these circumstances exist together, despite the more enlightened and humane approach which has been notable and the consideration exhibited over more recent years by the Taxation Office, a great deal of personal hardship and economic disaster have been caused by the imposition of estate or probate duty. This has been recognised in the Budget and the Government has made substantial corrections. I commend the Government for it.

The DEPUTY CHAIRMAN (Mr Cope) - Order! The honourable member's time has expired.

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