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Thursday, 16 September 1971
Page: 1442

Mr PEACOCK (Kooyong) (Minister for the Army and Minister assisting the Treasurer) - in reply - It is not my intention to range far and wide, as other honourable members have done, or to attempt to reply in detail to the philosophical viewpoints which were expressed about assisting the States. It is refreshing to hear, on occasions, the Opposition indicate its preparedness to assist the States. I say no more in regard to that matter. Referring now to the assumption by the honourable member for Kingston (Dr Gun) that no honourable member on the Government side was prepared to discuss this issue, it should be pointed out that both the Prime Minister (Mr McMahon) and the Treasurer (Mr Snedden), over and above the Treasurer's second reading speech, have discussed the reasons for accepting the fact that the States needed access to a new area of growth tax. Consequently, the Commonwealth offered - and of course the States accepted - the transfer of payroll tax as a useful addition to State resources for revenue raising purposes.

The honourble member for Melbourne Ports (Mr Crean) made the point that he believed that the Territories' rate of payroll tax of 21 per cent could be increased. I have absolutely no authority to say other than that the rate of 21 per cent was declared for the Territories despite the decision of the States to increase the rate to 31 per cent. In other words, it was subsequent to the States' announced decision, and it would not be right to assume that the Commonwealth should automatically follow the States. These Bills in fact do no more than honour an agreement with the States to provide them with a new area of growth tax in order to assist them in financing their services. The Treasurer, in his second reading speech, pointed out that the transfer of payroll tax to the States would be accompanied by a reduction in the financial assistance grants. As indicated by the Prime Minister also, following the Premiers Conference, the grants are to be reduced by something less than the amounts which the States would have received from payroll tax at the rate of 2½ per cent.

The decision to increase the rate from 2½ per cent to 3½ per cent was entirely one for the States themselves. The Commonwealth did not impose any conditions in this regard. The States thus have the right to declare such rate as they choose. They have exercised that right and, of course, they accept responsibility for it.

Question put:

That the Bill be now read a second time.

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