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Tuesday, 25 October 1910

Senator VARDON (South Australia) . - This Bill is of too much importance for me to allow its second reading to pass without expressing my views upon it. I was very much disappointed with the introductory speech of the Vice-President of the Executive Council. It seemed to me to be a most casual deliverance oh a measure ot such importance. The major portion of his remarks had reference to the bursting up of large estates, and the revenue aspect of the Bill was entirely glossed over. He certainly made no reference to its effect upon city and suburban lands. He described it as a most perfect measure. If it be that, God save us from perfection. I understand that the Government intend to resist any amendments of the Bill. If the measure possesses any of the graces of perfection, that fact is due to the intelligent and searching criticism to which it was subjected by members of the Opposition in another place. Personally, I almost wish that the Opposition had allowed it to pass with all its crudities and iniquities upon its head, instead of endeavouring to make it a workable measure. The people would then have been able to judge of the ability of the Labour party to make laws. If that had been done, it would not have been long before we should have had something like a revolution.

Senator Findley - Nobody is able to make laws except those who sit in opposition to Labour.

Senator VARDON -We have been told that the Government have a mandate from the people to pass this Bill. I hold that they received no such mandate.

Senator Findley - The people gave a mandate for the principle which is embodied in the measure.

Senator VARDON - They gave no mandate for the passing of a Bill of this character. I believe that the public conscience is moral, and that the people recognise that righteousness alone exalteth a nation. My regret is that any party in the Commonwealth Parliament should be prepared to pass this Bill. I am opposed to every clause in it, because I believe that it is based upon entirely wrong principles. Some time ago, Senator Story interjected that I had been an advocate of the. taxation of unimproved land values. He might have gone further and have said that I am still an advocate of that principle. I have been a consistent and persistent advocate of the taxation of unimproved land values for over twenty-five years.

Senator Findley - And when the honorable senator gets an opportunity to vote for an instalment of the principle, he refuses to do so.

Senator VARDON - We shall see whether that instalment is justified. A tax upon unimproved land values is, in every sense, a righteous tax. It is just in principle, and economically sound. It is a tax which it is almost impossible to evade.

Senator Story - Therefore, the honorable senator should vote for it.

Senator VARDON - No; I am not bound by a caucus which shuts my mouth and gags me.

Senator Findley - The honorable senator had better get back to the days of Noah and the ark.

Senator VARDON - I doubt whether the Honorary Minister has yet got far away from the ark. I repeat that a tax upon unimproved land values is one which it is almost impossible to evade, and which is easily collectible. Land is the source of all wealth. There can be no production of wealth without land ; although land itself is not wealth.

Senator McGregor - What about Murray cod?

Senator VARDON - I ask you, sir, whether any honorable senator, in speaking upon an important Bill of this character, should be interrupted by an impertinent interjection of that sort? The VicePresident of the Executive Council is the Leader of the Senate, and he ought to lead it with dignity, and not with flippancy. Such an interjection is unworthy of him. Land is the source of all wealth, although it is not wealth. I quite recognise that, in the absence of labour, it is useless. If another man possessed all the wealth, and I owned all the land, and if I told him to clear off the land, I do not know where he would go. Every man has a right to pay for the use of land.

Senator Story - How much?

Senator VARDON - What it is worth, and no more.

Senator Story - Has any individual the right ' to the unimproved value which is created by the community ?

Senator VARDON - If we make a law which permits that sort of thing, we must stand by it until we frame a righteous law.

Senator Story - That is what we are endeavouring to do.

Senator VARDON - No. This Bill merely seeks to perpetuate an iniquity. I do not deny that the Commonwealth Parliament has the power to levy direct taxation. Subsection ii. of section 51 of the Constitution distinctly confers that power upon it. But I do not think that this Parliament ought to levy direct taxation until it has exhausted the whole of its Customs and Excise revenue. That is the source of revenue which the States handed over to it; and before we enter the field of direct taxation, the whole of that revenue should be exhausted and found insufficient for our needs. Further, when we resort to direct taxation, it should be for revenue purposes only. Any tax of this kind should be a scientific one, and should be based on sound principles. The tax proposed in this Bill is neither scientific nor based upon sound principles. It is unsound and rotten from start to finish. 1 can understand a tax on land values ; but I cannot understand a dual tax upon those values. Nor do I understand two authorities taxing land values. I fail to see why the Commonwealth should superimpose another tax upon a State land tax, especially for the purpose which has been avowed.

Senator Findley - In some of the States, double land taxation exists to-day.

Senator VARDON - I do not understand what the Honorary Minister means. I quite recognise that a tax upon unimproved land values is a good thing, but not a dual tax. I can understand an increased land tax, provided that relief be afforded in some other direction.

Senator Story - The honorable senator objects to any tax which will make therich man pay.

Senator VARDON - My honorable friend says, in effect, " Tax the other fellow, and let me alone." I can understand a tax upon unimproved land values if we say to the user of the land, " We are going to increase your land tax, but we will relieve you of income tax." I can understand you going further, and saying, "We intend to increase the tax on your land, but we shall relieve you of the taxation on all your implements of trade." That is a perfectly sound policy to pursue. The more you put taxation on the land the more you should relieve the land-owner from taxation in other directions. What is the fact in regard to this land tax ? Not only is it a progressive tax which is unfair and unscientific in its incidence, but it is added in a progressive way to Customs and Excise duties, income tax, stamp duties, probate duties, and other things. That is what we complain about. This taxation is not in any way fair, but merely a vendetta. This is not a purely taxation measure founded on scientific and just principles. I believe the tax to be born of class hatred. Instead of it being a proper and just taxing measure, it is an abortion - a monstrosity. If I were asked to describe its pedigree, I would say that " Its dam is Cupidity and its sire Robbery, and it is cradled in Confiscation." I cannot see that it has a sound feature in its ugly body. It cannot be justified by any economic principle. I do not think that any honorable senator on the other side can quote a writer on political economy who will justify a tax of this character.

Senator Lynch - It has the support of Mill and Smith.

Senator VARDON - Neither John Stuart Mill nor Adam Smith advocates a progressive tax of this character; they accept taxation on land values, but not taxation of this kind.

Senator Lynch - I shall point it out to the honorable senator.

Senator VARDON - Some time ago the honorable senator had an opportunity to do so. This is not the end of this kind of taxation, but only the beginning.

Senator Stewart - Let us hope so.

Senator VARDON - I am very glad to hear the honorable senator make that remark, because, of all the members of the Labour party, he is the most honest in regard to this measure. He says that he does not believe in having any exemption from the land tax; in fact, he wants to see all lands taxed.

Senator Findley - He is not opposed to this Bill, all the same.

Senator VARDON - Of course he is not, but he wants to reduce the exemption and increase the tax. This is only a compromise, and a very cunningly devised one, too.

Senator McGregor - There is room for improvement.

Senator VARDON - Then I take it that the honorable senator will accept reasonable amendments if proposed from this side.

Senator McGregor - Will the honorable senator support the removal of the exemption?

Senator VARDON - This idea of the exemption was put before the people simply for the purpose of catching votes. They were told, " It will not touch you, because you have not a sufficient quantity of land; it will only touch the big fellow, so that it will not hurt you." I take it that there is no intention to leave out the little fellow. Senator Stewart laughs at my observation, because he knows that the little fellow is only left out for the time being.

Senator Stewart - I am laughing at the honorable senator's suspicious nature.

Senator VARDON -The little fellow is simply being lulled to sleep by this very specious compromise. What is the reason after all for this taxation? This Bill, or one something like it, was introduced into Parliament last year, and it was accompanied by a memorandum, which has disappeared.

Senator McGregor - Oh, it is not necessary now.

Senator Stewart - We have a majority now, and do not want a memorandum.

Senator VARDON - So it was another specious argument to induce people to swallow the bait? This instructive memorandum starts off with this paragraph -

A population sufficiently large to effectively develop its various resources and defend it from invasion is essential to the progress and even the very existence' of every country. While this is true of all countries, it is particularly true of Australia. No land has greater natural resources ; none, by reason of geographical situation or by the enormous extent of its coast-line, is so vulnerable to attack.

According to the wording of this document the land tax was required for helping the defence of the country.

Senator Findley - You have to pay for defence.

Senator VARDON - Will this measure do anything towards effectively defending the country?

Senator Findley - It will provide the money and the population.

Senator VARDON - Will it settle a single family on a waste space in the north or the north-west, where we have no population and no effective defence? The honorable senator knows that it will not do so, so that it is humbug on his part to suggest that it will. It will not do one stroke in the way of defending the country from invasion. I do not wonder that on more mature consideration the memorandum was dropped. Talk about this measure helping to defend the country ! What do you propose to do? You propose to concentrate your population on the land round the coast, extending from Spencer's Gulf to Queensland, and to leave your great northern territory as much exposed as it is to-day. Yet we are told that the land tax will help to provide for the defence of the country. The claim is absolute nonsense. The memorandum continues -

We cannot hope to escape the common lot of all nations. Sooner or later we shall be compelled to make good our right to hold this great country. That we should do so the more effectively, a large population is imperative. But this must be of the right type and far ampler opportunities for its absorption must be afforded. Our great centres of population are already swollen out of all proportion, more than 36 per cent, of our people live in the six capital cities of the Commonwealth : more than one-half in towns of over 5,000 inhabitants. And this tendency is becoming more marked each year. The people flock to the cities ; they desert the countryside.

Will this land tax induce people to go out into our waste spaces and settle?

Senator Story - Of course it will.

Senator VARDON - No; it will simply accentuate the centralization of population, and do nothing in the way of settling people in sparsely populated parts or helping to effectually defend the country.

Senator McGregor - Let us carry the Bill, and then the honorable senator will see.

Senator VARDON - For the credit of the Commonwealth, I wish that I had the power to prevent the honorable senator from carrying this Bill. I am sorry that I have not. This precious memorandum proceeds -

In new countries the cultivation of the land is the natural and proper occupation of the people. The substantial prosperity of France, the marvellous progress of Germany, alike, rest upon the firm and endurable basis of land settlement. And if Australia is ever to be a great nation, it must be upon this foundation.

What do honorable senators on the other side want to do? They wish to take a few million acres from certain persons, and put settlers on the lands, still leaving the northern territory unoccupied. The memorandum concludes as follows -

The object of this Bill is to provide an effective remedy by means of a progressive land tax on unimproved values, with an exemption (except in the case of absentees) of , £5,000. It is confidently expected that this will operate as a substantial check on the unproductive and speculative holding of large areas, and will vastly increase the land available for settlement by our own people and by the immigrants whom we wish to encourage, and whom we must have if we are to develop our resources and maintain our position.

I have heard of the hand being held out to immigrants over and over again. The whole production is rubbish, because it is intended, not to put people on the land in distant places, but to settle them close to the cities near the coast. When the Labour Conference was held in Brisbane, in July, 1908, Mr. James Grant, from New South Wales, made this statement -

In New South Wales, under the Local Government Act, big and little estates paid proportionately on the same basis, and no difficulty had been experienced in assessing land value. Mr. Watson had said that the progressive land tax was not for revenue, but for the bursting up of the large estates.

Mr. Holmanasked that the exemption should be fixed rigidly, so that there could be complete assurance. The tax was not really a revenueproducing one, and merely revenue derived therefrom would be incidental to the accomplishment of its primary object of breaking up the big estates.

Mr. Hutchison(late Honorary Minister) said that the progressive tax had two objects - first, enabling the big estates to be cut up for closer settlement; and secondly, asking those best able to do so to bear their fair share of taxation.

Mr. Batchelorsaid it was idle to expect much revenue from a tax of this kind, which, aiming as it did for the promotion of closer settlement, should not have an exemption lower than


I take it that that is the fact. The idea that has been put before the people from start to finish has been that this tax was simply and solely to burst up the large estates. I do not justify the holding of large estates. It is not good for the country to have large blocks of land locked up.

Senator Story - Yet the honorable senator will vote to encourage that system.

Senator VARDON - No, I shall not; but I shall vote to prevent the Commonwealth from doing what it ought not to do, because under our Constitution the control of the lands is left in the hands of the States.

Senator Walker - We are supposed in this Senate to maintain State rights.

Senator VARDON - We are here to maintain the rights of the States in regard to their own functions. It is the duty of the States to control their lands. If they want to tax lands they have a right to do so in their own way, and it is not for the Commonwealth Parliament to interfere with them. Honorable senators opposite ought to remember that the value of land is determined largely by the price of produce and the fertility of the soil. Why are land values so high to-day? Simply because we have had good seasons, and the price of produce has been high. But with one or two bad seasons, and wheat down to 2S. 66. a bushel, there will at once be a fall in the value of agricultural land.

Senator E J RUSSELL (VICTORIA) - If it is the price of produce that regulates the price of land, what is the value of a vacant piece of land in Collins-street?

Senator VARDON - Just what the owner can get for it.

Senator E J RUSSELL (VICTORIA) - What determines the price of a block of land that produces only a hoarding?

Senator VARDON - I have never seen a piece of land that would produce only a hoarding. I have seen all sorts of seed put into the soil, but never any that would produce a hoarding ! Large estates are being cut up in Australia every day. The reason for it is that, in consequence of good seasons and high prices, the value of land has advanced, and it pays people to cut up rather than to hold large estates. In South Australia there are not 500,000 acres of land held in large estates, and such large estates as there are, are being cut up and disposed of almost every day. There are nearly 50,000 acres on the market at the present time. A large quantity was disposed of only last week.

Senator Story - Does not the honorable senator think that the introduction of this land tax had something to do with the cutting up?

Senator VARDON - Not a bit of it. If the honorable senator had a large estate, and found that it would pay him to cut it up and sell, in order to invest his money to better advantage elsewhere, he would do so. I have before me Bulletin No. 12, issued by the South Australian Department of Intelligence. It says -

Enormous wheat-stacks are at railway stations throughout the State awaiting railage to seaports. Improved scientific farming and the use of fertilisers have revealed enormous tracts of countries as suitable for agriculture that had been regarded as worthless, such as Pinnaroo, where about 602,000 acres have recently been taken up, and this season yielded 800,000 quarters of wheat, valued at about?1,600,000.

There is the whole secret of the matter. There is land that formerly could be used for nothing but a sheep walk; but the introduction of fertilizers has enabled it to be employed for better purposes, and millions of acres have been brought under cultivation.

Senator Story - This tax would enable more land to be so used.

Senator VARDON - This tax is a wonder-worker ! But if the honorable senator had?10,000 worth of land he would be one of the most strenuous opponents of land taxation.

Senator Henderson - A tax would not interfere with the fertility of the soil.

Senator VARDON - If you put on a land tax, you reduce the value of land to the man who wants to sell.

Senator Henderson - The tax will only bring land down to its proper value. The fictitious value will be taken from it, and rightly so. "

Senator VARDON - I should like to hear what the honorable senator would have to say if he had anything to sell and a tax had the effect of reducing its value by onehalf. I am inclined to think that he would not be so eager for taxation as he is now. The Bulletin from which 1 have quoted continues -

The success of these hinds, to which a railway has been built, caused the Legislature to authorize last year two other railways to render available for profitable occupation about 3,000,000 acres of similar country. This vast area will be offered for selection as early as possible, and will, when tilled, produce over ^6,000,000 worth of corn yearly. Over a million acres of public lands were allotted last year, and a greater area will be offered during the present year. The wonderful success that has attended farming operations is causing all eyes to be cast landward ; consequently the demand is very great, each section usually having several applicants. The opening of new lands and the large yield has caused much activity in the manufacture of agricultural machinery, and the competence that farmers have attained through a series of prosperous seasons is causing a brisk building trade, many farmers taking suburban residences.

Then this very interesting pamphlet proceeds to say -

The policy of the Government outlined for the next three years is a forward, enterprising one of development. During the last five years about five and a half million acres of land, mostly mallee country like Pinnaroo, has been allotted to 4,000 new settlers : these, with wives and families, will represent at least 12,000 additional persons placed on the land. The States' rent roll is ^45,000 yearly ; arrears amount only to £442. This" is eloquent evidence of the prosperity of the farmers.

Senator Story - Is not that evidence in favour of bursting up the large estates?

Senator VARDON - These estates do not require any bursting up. The Government of South Australia has opened up its own land, building railways and settling people upon it. Queensland has done the same thing, and any State that had any enterprise would proceed in the same direction. The Bulletin proceeds in a later paragraph -

Railways to open up three million acres of agricultural land are expected to be completed and available for traffic about the middle of 1912. A short line to tap a large fruit and wine area would be opened early next year.

Yet there is a cry that there is no land for the people. Over 3,000,000 acres in this one State have been made available, with railways built for the purpose of opening them up and settling people. It does not seem to me that there is any real sense in the cry to burst up the big estates. Senator Lynch remarked" that in England the difficulty was one of land tenure, but he did not tell us that nearly the whole of the land of England is alienated. What is the case in the Commonwealth? In the whole of Australia only 4.82 per cent, of the land has been sold; 2.02 per cent, is in process of alienation; 41.36 per cent, is leased; and 51.80 per cent. - over one-half of the total land - is altogether unoccupied. Less than 7 per cent, of the land is alienated or in process of alienation. Yet we are told that it is necessary in this vast continent to burst up the big estates. Really, it is pitiable. It is a libel on the Commonwealth to say that the whole of the good land is comprised in 7 per cent. I am not going to be a party to libelling Australia in such a fashion.

Senator Lynch - Not all the good land, but that which is 'accessible, is alienated.

Senator VARDON - South Australia is building railways into the lands that have hitherto been inaccessible, and people are taking them up in a spirit of enterprise. We are trying to molly-coddle our young people by keeping them near to the railway lines, instead of encouraging them to go out and show a spirit of pluck and enterprise, as their forefathers did.

Senator Henderson - The honorable senator's forefathers showed a great deal of pluck, did they not?

Senator VARDON - Yes; my father was here in 1839. He was one of the first settlers in South Australia. I know the hardships that had to be endured in that early pioneering work. But nowadays some of our leaders want to keep our young people to the coast-line, instead of encouraging them to open up new country.

Senator McGregor - The honorable senator's father did not send his son to the back blocks.

Senator Henderson - No; the honorable senator's- father kept him in the city, and he is there still.

Senator VARDON - I should like the honorable senator to justify that statement. I can tell him that at twelve years of age I carried my swag 50 miles into the country.

Senator Story - Running away from home?

Senator VARDON - No, I did not. I set out to earn my own living, because it was necessary that I should do so. I have been working since I was ten years of age, and I intend to go on working.

Senator Lynch - How long did the honorable senator stick to the swag?

Senator VARDON - As long as it was necessary. W'e are told that the sons of the pioneers have not done this, that, or the other, but they have done very much more than young people of the present day seem inclined to do.

Senator Henderson - The pioneers have got nothing. It is the men who came after them who have the land.

Senator VARDON - The Government propose to penalize the pioneers and their children for the grit and enterprise they showed in opening up this country. T admire the nien of the early days, and what they did for Australia.

Senator Henderson - Most of them are in old men's homes now.

Senator VARDON - Rubbish. These men acquired their lands under the law, and whether the law was good or bad it was made by the representatives of the people.

Senator Story - Some of them dummied their lands.

Senator VARDON - They acquired their lands under the laws existing at the time, and if they were not righteous laws, the fault lies with the people who made them. I say that a man's just rights should be recognised.

Senator E J RUSSELL (VICTORIA) - The bulk of the land to which this Bill will apply in Victoria was secured before we had a representative institution in the State at all.

Senator VARDON - I know it was acquired long before the honorable senator was born. In this Bill we are not dealing only with those who have held the land they at present hold since it was first alienated. We might have some claim upon such persons, but we know that lands in Australia have changed hands over and over again. Senator Lynch this afternoon quoted a case of a block of land in Melbourne which was sold not very long ago for £600,000 ; and after a man has paid down £600,000 in hard cash for that land, the Government come along with a Bill to lake half its value away from it.

Senator Lynch - No, the honorable senator is drawing the long bow now.

Senator VARDON - If that land is taxed up to 6d. in the ,£1, and its revenueproducing capacity is estimated at 5 per cent, on the capital value, we shall, under this Bill, be taking away half its value. That will be the actual effect of this measure.

Senator McGregor - We are trying the game of farming on halves.

Senator VARDON - I have not quoted from the pamphlet which the honorable senator has issued, but he will find in it a paragraph inviting people io come here from the Old Country to farm on halves.

Senator Pearce - Hear, hear; and we wish to make land available for the purpose.

Sena tor VARDON.- Notwithstanding the fact that land may have changed hands over and over again, the last purchaser who may have given the top price for it receives no consideration under this Bill. It is proposed to tax the value out of it in some cases up to 25, 33^, and even 50 per cent. I do not think that is right. I do not believe that this Bill has been designed so much for the bursting up of big estates as for the raising of revenue. 1 say that, because no discrimination is made in the application of the tax. It does not matter where land is situated, whether in a large city or far away in the back-blocks, the tax applies equally to it. It does not matter what use is being made of land. It may be under intense cultivation utilized to the fullest extent of its productive capacity, giving employment and a living to numbers of people, but all that does not count.

Senator McGregor - It is exempt if it is used for the erection of a church.

Senator VARDON - I notice that cemeteries also are exempt, and if the honorable senator were planted in one of them we should not have these irrelevant interjections. It does not matter whether land is suitable for subdivision, or is impossible of subdivision. All land is dragged in, and the unimproved value alone decides the tax to be placed upon it.

Senator Story - I thought the honorable senator approved of the taxation of land values?

Senator VARDON - I have said so. I believe in a righteous, but not in an unrighteous, tax upon land values, such as this is. I have said that I believe this measure is designed more for the purpose of raising revenue than for the bursting-up of large estates, because it applies equally to country, city, suburban, and pastoral lands. A man may have held pastoral country for years, fighting against drought and difficulties of all sorts, but no account is taken of any of these things ; if the land is considered of taxable value, it must carry this tax. The return derived from an 'investment in land is not to count, lt is the unimproved value alone, and if that is above £5,000 the property must pay this progressive land tax. An estate may be divided into farms and put to the best possible use, as was shown by a petition presented by Senator Fraser to the Senate only last week, but that does not count. It is natural that we should ask, " What is likely to be the effect of the application of this tax to city land?" We all know that a very small area of land in Collinsstreet, Bourke-street, George-street, or the main streets of any of our great cities is worth more than £5,000. I ask honorable senators to say how these city lands are to be divided ?

Senator Story - Is there any reason why land of that value should not pay taxation.

Senator VARDON - I have never said that land should not pay taxation. I thought I had made it clear to the honorable senator's dull comprehension that I am arguing against an unrighteous tax upon land. I want to know how people are to make a better use of city lands than in most cases is already made of them? I can quite understand that in the case of country lands, large areas might be more profitably occupied than they are now, but that cannot be said cif city lands. It will be admitted that there must be concentration at seaports for purposes of commerce. And how is land in our commercial cities to be put to a better use than it is to-day ?

Senator Henderson - Are there not plenty of blocks with only hoardings upon them?

Senator VARDON - How many blocks in the city of Melbourne have only hoard-, ing* upon them?

Senator Henderson - There are scores in Melbourne and the suburbs.

Senator Pearce - There are such blocks not more than 100 yards from this building.

Senator VARDON - The honorable senator might point to a block where a building has been taken down and a hoarding put up while another is being erected.

There are cases of that kind in every one of our cities. We have adopted a system of Protection as the settled fiscal policy of the Commonwealth. Under this system, we have encouraged men to invest in city land. They have erected factories and other buildings for carrying on their business, and equipped them with up-to-date plant ; and they are employing a very great many persons. But while we give them the benefit of Protection with one hand, the Government propose to take away that benefit with the other by imposing this land tax. It seems to me to be altogether iniquitous. It must inevitably result in an increased cost of production.

Senator Pearce - You have said that the tax will depreciate the value of land, and so bring down rents, and that must reduce the cost of production.

Senator VARDON - I was in business premises in Collins-street a week or two ago, and the occupier told me that his lease was running out, and that he had applied for a new lease, and his landlord had said, " I cannot give you a new lease until this land tax is decided. If it is carried, your rent must go up by £200 a year."

Senator Pearce - Does that not destroy the honorable senator's argument that the effect of the tax will be to bring down the value of land?

Senator VARDON - You cannot deal with city lands in the same way as with country lands. I said that the imposition of this tax in the case of country lands will depreciate the value, not only of large estates, but of all landed estates. When a land tax was first imposed in South Australia, I know that the attorney for one of the large estates there saw that a clause was inserted in new leases calling upon the tenant to pay the land tax.

Senator McGregor - That cannot be done under this Bill.

Senator VARDON - I am aware of that; but the landlord can raise the rent, which comes to the same thing. In that way, we shall be increasing the burden upon the manufacturer, who may be making the very best use of the land he holds ; and I say that we shall be taking' away from him the benefits extended to him by our system of Protection.

Senator McGregor - The honorable senator is only making rash statements.

Senator VARDON - The honorable senator will have the right of reply to the debate; and if he can disprove them, I shall be glad to withdraw them. I say that, as the result of this measure, the cost of production will be increased. The local manufacturer will be brought into competition with the manufacturer of other countries where the hours of labour are longer, and the wages paid are lower, than they are in Australia. We must then give him increased protection. This will result in increased prices, which must add to the cost of living, and wages will have to go up proportionately. So this legislation must affect us all round. I take the case of wholesale houses having branches in all the capitals. Many of these have found it necessary to purchase land on which to carry on their business in the different capitals. Under the State land taxation, these properties would not be aggregated, and would have to pay only the State taxin each State; but, under this Bill, because they are necessary for carrying on the business of the firm, we propose to aggregate the values of the properties held by the firm in the different States, and to impose this progressive land tax upon the aggregated value. The tax levied in this way will cripple business enterprise. It is a first step towards land nationalization ; but it is an illegitimate step taken in a wrong direction.

Senator Stewart - It is a step all the same.

Senator VARDON - I remind the honorable senator that it is possible to make a side step, a downward step, or a step backwards ; and what we ought to do is to make a step forwards and in the right direction. What will those people do who have mortgages upon their lands?

Senator Stewart - This Bill will help them to pay off their mortgages.

Senator VARDON - It will destroy the equity of redemption. It will cripple production, because the mortgagee will immediately reduce the amount which he has lent upon mortgage. The land-holder will be called upon to pay the whole of this taxation. The man who possesses enterprise, and who has invested his money in land, will thus be specially penalized. An individual may invest £100,000 in land, and use it to the best possible advantage. Yet he will be taxed, whilst the man who invests .a similar amount in Government stock, will be able to get a return from his money without being penalized in any way.

Senator McGregor - Does the honorable senator wish him to be taxed, too?

Senator VARDON - He has as much right to bear his share of taxation as has any other man.

Senator McGregor - All right, we will see that he is taxed if the honorable senator wishes us to do so.

Senator VARDON - I do not doubt the capacity of the Government for evil in that direction.

Senator McGregor - The honorable senator seems to be grumbling about it.

Senator VARDON - I am grumbling because the Government are endeavouring to do things in the wrong way. They do not propose to discriminate between individuals in the imposition of this tax. I have here a letter which will disclose the effect of this Bill upon land which happens to be entailed. I do not propose to givethe name of the testator, or the situation of the estate. But the attorneys in that estate write me as follows - -

Dear Sir, - We desire to bring prominently before your notice the position of entailed estates in relation to the proposed Federal land tax, and we trust that in me event of the measure being passed we may count upon your active influence, and that, if necessary, you will move to protect beneficiaries in estates similar to the one we represent. To put the position clearly before you, we beg to state that we are trustees in the estate of the late , who deceased in 1867. He left an estate consisting chiefly of some 7,000 acres of land at in the hands of trustees for the benefit of his children and grandchildren, and devised that the land should not be sold until all of his children had died. In the interval it was to be leased and the rentals to be divided amongst the beneficiaries. Since his decease the land has been let in small holdings, and has supported about twenty different families, besides considerably assisting to support seven beneficiaries, whose families consist of about thirty members. We think it may be fairly asserted that from one hundred and twenty-five to one hundred and fifty persons are being materially assisted in obtaining a living by the land in question. The ostensible reason for the land lax is to break up large estates in order that, they may support more people, but we maintain that the estate which we represent has been, and still is, made the greatest possible use of, by being divided into small holdings and supporting as many persons as can reasonably be expected, and that the purpose of the tax has been attained in this case by the instructions of the deceased. Under instructions contained in his will, and on account of the beneficiaries in the next generation, the trustees are prevented from selling the property, until all of the children are deceased, otherwise, they would be only too pleased to dispose of it at the present high values.

Yet this Bill will afford no relief in cases of that kind.

Senator McGregor - Yes. Clause 32 will afford relief.

Senator VARDON - It will not. In another instance a charitable trust has been established in South Australia for the purpose of benefiting, in any way that th« trustees may deem expedient, persons above the labouring class who may be in poor or reduced circumstances. I do not know of any persons who are more helpless when they become poverty stricken than are those of this class. In the case of which I am speaking, certain premises are let to tenants, and because those tenants make some profits out of the use of the land, it has been held that it is liable to taxation. When the Bill becomes operative, the trust will be obliged to cut off thirty-three or thirty-four pensioners, simply because it will have to pay land tax. I know of another case in ' which a trust has been founded for the education of students for the Ministry. Because the revenue which supports that trust is derived from city property which 'is let, that property will have to pay the proposed tax. The result will probably be a diminution of £100 a year in the revenue of the trust. Still another trust has been established for the purpose of sending missionaries into the country to preach the Gospel. Under this. Bill, it will have to pay a considerable land tax. It seems to me that some discrimination ought to be exercised whereby trusts with such objects in view should be exempt from the tax.

Senator O'Keefe - Clause 32 will afford them relief.

Senator VARDON - It will not. The South Australian Government tax these properties on the ground that somebody is making a profit out of the use of the premises, and as far as I can see, this Bill will perpetuate that injustice. Innumerable cases of hardship have been quoted here again and again, but no suggestion has been made that they will be remedied. I shall not discuss the clauses of the measure at the present stage, but in Committee I shall point out some injustices which the Bill will inflict, and if the Government decline to permit us to amend it by crossing a " t," or dotting an " i," they must accept responsibility for their action. I regard the Bill as one which is unrighteous in principle, which is unjust in its incidence, and which will operate harshly, especially in the case of city lands. For these reasons, I intend to oppose its second reading - indeed, I shall oppose it at every stage.

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