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Wednesday, 13 September 1972
Page: 1262

Dr SOLOMON (DENISON, TASMANIA) - My question is directed to the Treasurer. 1 refer to the tobacco tax introduced in the Tasmanian Budget by the State Treasurer last week. Can the Treasurer inform the Parliament as to the legality or. rather, the constitutionality of such a tax? Would a test of its validity be prejudicial to other sources of Government income, such as a liquor licensing tax? Is this tax. in any event, in accordance with the spirit of Commonwealth-State financial relations?

Mr SNEDDEN (BRUCE, VICTORIA) (Treasurer) - I have not had the opportunity to see the proposed legislation. I am, therefore, in no position to express a view as to its legality or its constitutionality. I should make this point clear: The Commonwealth Government's attitude is that States should be able to have so much freedom of action as they can exercise which is consistent with their taking action to raise revenues for the purposes of expenditures. On that basis the Commonwealth has made its point clear. The Commonwealth has also made it clear that we cannot, as a Commonwealth, with all the responsibilities we have to provide funds for the States - last year we provided a total of nearly $3.5 billion when everything was added up - have a situation whereby Commonwealth revenue raising is eroded without compensating reductions in its obligations to the States. This question raises matters of very great complexity and therefore one should wait and see how it turns out. I think Tasmania had a real will on its part to see what it could do. I think there was also some understanding on its part, as there must have been, that the Commonwealth provides more funds per capita for the Tasmanian population than it does for any other State. Not only is that a fact but, also, the Tasmanian Government has access to the Grants Commission and for this year Tasmania will receive a payment, if my recollection is correct, of about SI Om from the Commission. The Commonwealth has stood ready at any time to consider any representation made by the State for specific Commonwealth aid. lt will continue to do so. But I am bound to say that we will not do what has apparently been suggested, that is, enter into some sort of deal. The Commonwealth is not in the business of doing deals in an in terrorem situation.

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