4th Parliament · 1st Session
Mr. Speaker took the chair at 10.30 a m., and read prayers.
Mr. GLYNN presented a petition from nine residents of South Australia, praying the House to reject the Land Tax Assessment Bill.
– I have pleasure in announcing thatthe crew of the second boat of the wrecked ship Carnarvon Bay landed safely on King Island, and has since been taken off.
Honorable Members. - Hear, hear.
– During the last Federal election difficulty arose in some places because of the differences between the Commonwealth and the State electoral systems, especially regarding methods of voting. We passed an Act to enable cooperation between the Commonwealth and the States in this matter, and I wish to know from the Minister of Home Affairs whether the negotiations commenced by his predecessors with a view to bringing the Commonwealth and State administrations into harmony, especially as regards registration, appointment of officers, and methods of voting, are being continued. If not, will the honorable gentleman press forward with the matter as much as he can ?
– Everything has been done to advance the work which my predecessors took in hand, because we believe in reducing the expenses of elections as much as possible.
– By using the lake waters of Tasmania, Hobart will shortly be supplied with the cheapest electric motive power in the Commonwealth. I therefore ask the Minister of Home Affairs if he will take into considerationthe advisableness of building the Commonwealth woollen mill in or near the city of Hobart?
– In my opinion, there would be no place in the world more suitable than Hobart, because of its salubrious and healthy climate.
– In view of the expense and inconvenience caused by the distribution of our public offices throughout Melbourne, will the Minister of Home Affairs give early attention to the proposal to concentrate the Departments in one central building? I may add that it cost me half-an-hour the other day to find a certain office.
– Ever sinceI entered this Parliament I have recognised the need for centralization, and hope to be able to do something definite in a day or two to secure it.
Mr. FRAZER laid upon the table the following paper : -
Defence Act - Military Forces - Financial and Allowance Regulations Amended (Provisional), Nos. 63, 77, 159a - Statutory Rules 1910, No. 84.
– As it is understood that the Minister of Home Affairs contemplates spending a good deal of money in the planting of trees at the Federal Capital site, I ask him if he has made inquiries as to the varieties most suitable for the situation, and if he will investigate the suitability of a tree known botanically as Quercusaegilops, a very handsome tree of great commercial value?
– I believe that that tree grows in southern Arizona, and that they use its bark for tanning. I shall look into the matter.
– Is there any truth in the statement that when applications for the position of letter-carriers and similar positions are asked for, the salaries offered are much lower than those which have previously been paid?
– I know nothing of the matter.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are -
asked the Prime Minister, upon notice -
– The answer to both questions is “ No.”
In Committee (Consideration resumed from 22 nd September (vide page 3646) :
Clause 3 -
In this Act, unless the contrary intention appears - “ Unimproved value,” in relation to land, means the capital sum which the fee simple of the land might be expected to realize if ottered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that the actual improvements thereon (if any) had not been made. “ Value of improvements,” in relation to land, means the difference between the improved value and the unimproved value of the land. . . .
– I would like to ask the Attorney-General for information. Does he intend to rely on the definition of “ Land “ in the Acts Interpretation Act? In several of the Acts dealing with land taxation to which 1 have referred, the term “ Land “ is defined, but this Bill contains no such definition, and, in the absence of a definition, presumably recourse will be had to the Acts Interpretation Act, section 22 of which declares that “ Land “ includes messuages, tenements, hereditaments corporeal and incorporeal, and tenures of any description, and whatever may be the estate or interest in them. This definition is somewhat similar to that contained in the New Zealand Land Tax Act. Unless the contrary intention appears, that definition applies generally when the word is used in our legislation. The contrary intention is made known either by means of a definition, or by the context, or by the whole structure of the measure in which the word is used. In certain parts of the Bill the relations of persons holding interests in land are” defined, and the rights and position of parties in respect to them made known. That is so regarding joint tenures, husbands and -wives, companies and trustees, and we have “been informed that Crown leases will be -excluded. I should like to know whether mining interests and minerals come under the definition of “ Land “ in this Bill. Some of our mining is done on land leased from the Crown, but some, I understand, is done on freehold land. I think that part of the Mount Morgan property is freehold.
– Six hundred and forty acres.
– It is partly leasehold and partly freehold land. Are not many of the Newcastle mines on freehold land ?
– They are freehold, but many of them are leasehold - that is, Crown leasehold.
– In Western Australia, I am told., some- are freehold.
– Some are freehold and some leasehold.
– The conditions would appear to be similar in all the States. According to the definition in the Acts Interpretation Act, all estates, whatever may be their nature, are included.
– Is that not governed by the conditions which have to be fulfilled, as in mining leases? Will that not bring the land under the exemption ?
– But we are dealing with the unimproved value of the land, and the conditions do not alter the position. The question is, what is the nature of the interest in the land; and I think the hon orable member for Newcastle will bear me out that some of the coal mines came under the Land Tax Act of New South Wales which has recently been repealed.
– Unimproved land taxation in New South Wales has been handed over to the shire councils.
– But before that handing over were not the coal mines taxed?
– Yes, as land.
– The Attorney-General has given notice of an amendment to exempt Crown leases, and I presume that it is his intention, where land is held under a Crown lease of any kind - pastoral, grazing, mining, or homestead - to exclude it.
– I think the honorable member might wait until we come to the clause dealing with that matter.
– But. this is an important definition, and we desire to know what the word “ land “ covers, and whether, for the definition, the Attorney-General is relying on the Acts Interpretation Act?
– I submit that there is no room for uncertainty as to the meaning of “land.” The honorable member for Darling Downs has referred the Committee to section 22 of the Acts Interpretation Act, where “ Land “ is thus defined - - “ Land “ shall include messuages, tenements, and hereditaments, corporeal and incorporeal, of any tenure or description, and whatever may be the estate or interest therein.
On that definition the honorable member seeks to show that there is some ambiguity as to what may be meant by a tax on un- . improved land values. But I ask the honorable member, what would be the unimproved value of an incorporeal hereditament? On the face of it there can be no unimproved value of an incorporeal hereditament ; and therefore, whatever the definition means, it does not mean that. Then it is very obvious that the unimproved value of a messuage or tenement is so much nonsense; and, therefore, the definition cannot mean that. What the definition means is what it says, though it seems to somewhat bewilder the Committee that the provisions of a Bill should be so clear. How, for instance, could there be a leasehold, fee-simple, or freehold for a term of years in an incorporeal hereditament? How could there be any unimproved value in any or all three of these tenures? Unimproved value can only relate to land as such ; it can relate to nothing else but the solid earth on which we stand to-day. If we go down into the bowels of the earth, the question is entirely whether the owners come under this clause or not. If they have £5,000 of value, and are not exempt as Crown lessees, they are liable, and not otherwise.
– The Attorney-General has hardly answered the question of the honorable member for Darling Downs, who desires to know whether it is intended to tax mining properties, and other properties of that description.
– That is another matter.
– I desire to draw the Attorney-General’s attention to the definition of “ Owner,” which -
Includes every person who jointly or severally, whether at law or in equity -
is entitled to the land for any estate of freehold in possession;
That is clear enough, and, no doubt, includes the highest form of estate known to the law, namely, freehold estate. But it is not confined to freehold estate, but goes on to give another class, as follows - or (b) is entitled to receive, or in receipt of, or if the land were let to a tenant would be entitled to receive, the rents and profits thereof, whether as beneficial owner, trustee, mortgagee in possession, or otherwise ; and includes every person who by virtue of this Act is deemed to be the owner.
The important point is that this tax applies, not only to freeholds generally within certain values, but also to estates other than freeholds, namely, leaseholds, or estates held on certain other lesser rights. I take it that the words “ in receipt of rents and profits,” are wide enough to include all sorts of leases or licences issued by the Crown.
– If they are not exempted later on, yes.
– Therefore, it would seem that in the Bill,as originally launched, it was intended to tax all leaseholds and licences derived from the Crown.
– I said so - that the Bill, as it stood, taxed such lands.
– That is the conclusion I drew, and this part of the Bill justifies the opinion. Now it seems that a modification is to be introduced, limiting the definition in regard to such lands, and the question is whether that limited definition will include such properties as mines, or the land over which tramways run, held on lease or licence from the Crown. I am not quite, sure as to the real effect of the amendment to insert new clause 26a, of which notice has been given by the Government. The proposed new clause is as follows : -
Notwithstanding anything in the last two preceding sections, the owner of a leasehold estate under the laws of a State relating to the alienation or occupation of Crown lands (not being a perpetual lease without revaluation, or a lease with a right of purchase) shall not be liable to assessment or taxation in respect of the estate.
I take it that all other forms of lease will be liable to taxation.
– All leases not coming within those words.
– But coal mining, gold mining, and other similar leases, are not under laws relating to the alienation of Crown lands.
– I quite agree with what the honorable member says, but I submit that this question ought to be discussed on clause 26.
– At this stage, I desire to direct attention to the ambiguity in relation to tramways, for instance, such as those at Ballarat and Bendigo, the proprietors of which are in possession of the roads, under certain delegated authority from the municipalities, under State law, and are in receipt of rents and profits. I do not think it desirable to tax these institutions, seeing that they are in possession, under rights and agreements entered into with the State Government, and that their properties revert to either the State or the local municipalities at the end of their tenure.
– In all cases?
– In most cases, so far as I know, at any rate, such is the fact in Bendigo, Ballarat, and Melbourne. It would be most unfair to increase the burdens of those institutions at the present time, and, indeed, it would amount practically to a breach of contract. However, I am not so much interested in tramways as I am in mining properties, and I contend that it would be most unjust to leave any doubt asto the liability of mining companies.
– I shall make that perfectly clear.
– I submit that the words of this definition are sufficient to cover mining property.
.- It is just as well to be perfectly clear as to what is meant. I have not much fear of any wrong being done under the definition of “ Land,” because the whole of the Bill seems to show that “ land “ means something physical. We could not, for instance, have a church built on an “ incorporeal hereditament,” and I do not think that, reading the whole Bill, there is much danger in the definition. I draw attention, however, to certain uses of the term “land,” as distinguished from interest, in clause 44, which deals with the compulsory purchase of land, and also to the confiscation clause 67, in which a distinction is drawn between “land” and “interest.” I merely mention this now because there seems to be something incongruous in these provisions. As regards leases from the Crown, I think the Bill, as it stands, does exempt them, notwithstanding the definition. I have no desire to split hairs about the meaning of paragraph b, of the definition of “ Owner,” but when we look atthe subsequent clause, apportioning the liability, we see there no express provision as to Crown leases. It is an apportionment of the liability between the freeholder, and the leaseholder under the freeholder, and as they cannot be lessees from the Crown, and a Crown ownership is not a freehold, it is clear that any ambiguity in the definition of “Owner” is removed by the subsequent clause apportioning liability. It seems to me that this cannot apply to the Crown, but we need not discuss that matter, since the Attorney-General intends to insert an express declaration that the Crown is not taxed.
– I do not pretend to deal with the legal side of this matter, but wish to ask the Attorney-General to keep in mind such cases as the rights-of-way in mining districts. In the Newcastle District, as he is aware, one company has to pay another, in some cases up to1s. a ton, for a rightofway over land. Land yielding a revenue of that kind would, I think, be assessed as particularly valuable, although it might be only a mere strip. The value would, probably, be fixed in all cases by capitalizing the returns. A company now having to pay1s. per ton to another company in respect of a right-of-way will have, in addition, to pay the Federal Government a considerable amount in the way of taxation, so that the impost will be a tremendously heavy one.
– The matter can be discussed when we are dealing with the leasehold clause. The whole question is full of complications.
– It will arise when we come to deal with the question of output and privileges of the owners of a coal mine. I ask the honorable member to keep the point in mind.
– When I rose a few minutes ago I specially informed the Attorney-General that what I desired was an explanation of the meaning of the word “ land,” as no definition was given. That explanation has not been vouchsafed.
– I have said that the land is the earth, and that the landlords are the fullness thereof.
– But we have to look at what is in the Bill itself. The honorable gentleman knows that there is no definition of the word.
– We do not need one.
– Where there is no definition, has he not to look to the Acts Interpretation Act? The Attorney-General must have known that my remark had only reference to land. I ask him again whether his intention is that the word shall cover all the mining leases to which I referred, or whether it is proposed to exempt leasehold mines from the Crown, and include freehold mines?
– That matter is quite apart from the definition of “land.”
– It is not.
– It includes them unless they are exempt.
– That is what I wanted to know.
– I have answered the honorable member about ten times.
– Then this is to apply to all freehold mines in Australia?
– Every landed interest is taxable under this Bill, unless exempted.
– Does this Bill cover all mines that are held in freehold, and will they be taxable?
– Yes. They are not “ incorporeal hereditaments.”
– The very first definition of the words “ corporeal hereditaments “ that I look at is to the effect that it includes lands and such things as mines and minerals, believed to be, in law, part of the land. I now ask the Attorney-General whether this definition will cover tramway rights, which are held under different tenures, by private companies, and whether it will also include private railways in Queensland, which are estates or interests held in different forms of tenure ? We must try to find out the foundation of this taxation measure.
– There are clauses in the Bill indicating what are exempt. Is that not clear?
– Perfectly clear, if it is intended to cover every estate or interest in land not expressly exempted.
– Then what is the honorable member worrying about?
– If “land” includes every estate and interest in land, then my question has been answered, but the difficulty has been to obtain that answer. I ask the Attorney-General to say whether it includes the rights-of-way to which the honorable member for Parramatta has referred ?
– -I have already pointed out that the definition of “Owner” is so wide as to include, in my opinion, everything set forth in section 22 of the Acts Interpretation Act, except tenements and incorporeal hereditaments, to which it cannot possibly apply, since this is a tax on unimproved land values. Wherever that term cannot apply, then, obviously, so much of the definition as is set forth in section 22 of the Acts Interpretation Act does not apply in this case. It does not follow that it is intended to apply this Bill to all cases covered by section 22 of the Acts Interpretation Act. In respect of Crown lessees, I have circulated a proposed new clause - 26a - providing that -
Notwithstanding anything in the last two preceding sections, the owner of a leasehold estate under the laws of a State relating to the alienation or occupation of Crown lands (not being a perpetual lease without revaluation, or a lease with a right of purchase), shall not be liable to assessment or taxation in respect of the estate.
The only question to be asked in respect of every leasehold from the Crown is, “ Does it or does it not come within that provision?” If it does come within it, then it is not liable; if it falls without it, then it is liable ; and it is immaterial whether it is a mineral or pastoral interest.
.- I think that, on the whole, there is no danger to be apprehended as to the definition of “ land,” because, reading the Bill through, one finds that what is meant is fairly plain.
The definition of “ unimproved values “ shows that the land in computation must be in fee simple; it must be something physical, because we could not have improvements upon that which is intangible. In the amendment of which we have notice, any ambiguity that may arise in regard to leaseholds and freeholds as contradistinguished is cured. On looking into the matter, I am not very nervous as to the scope of this definition. I think that it means the taxation of the fee-simple of the land, and the apportionment of the tax to the extent of the estate held under it. I have an amendment defining “ joint owners “ as owners with a right of survivorship, and excising from the definition as it stands in the Bill tenants in common. I do not want to press it here if there is no chance of carrying it, but tenants in common who have a distinct ownership of the land should be regarded, for the purpose of taxation, as separate owners. In the case of “ joint owners,” as the law understands the term, the whole estate belongs to the one who survives. It would have been better had “ joint owners “ been limited to such joint ownership as the law understands, and so as not to include tenants in common who are not joint owners according to the ordinary legal interpretation of the term. It would be well to consider that point, and so to overcome a good deal of the difficulty with regard to the position of societies. As the definition of “ joint owners “ stands, it would cover the members of co-operative societies, but if it were amended as I suggest it would not.
.- We find that “unimproved value,” under the definition clause, means the capital sum which the fee-simple of the land might be expected to realize, “ assuming that the actual improvements thereon (if any) had not been made.” There are many instances where men have expended large sums in improving their properties by drainage and irrigation schemes, which, although not actually upon their land, have added very considerably to its unimproved value. In some cases roads and bridges have been constructed by a man to improve access to his own land, and, although they are not upon his property, they have materially increased its unimproved value. In the definition of “ Unimproved value” in the New South Wales Act there is a provision admitting of these improvements being taken into consideration. It is only fair, in the circumstances, that we should take into consideration in determining the unimproved value of land any money which has been expended by the owner or occupier, and which has added to its unimproved value. I therefore move -
That after the word “ made “ in the definition of “Unimproved value” the following words be added : “ including improvements made by the owner or occupier which though not upon the land have been constructed for its drainage, prevention from inundation, its irrigation, or better access, or otherwise for its more beneficial use.”
It has been suggested to me by the draftsman that this wording will read better than the form of amendment which I previously circulated, and which I practically copied from the New South Wales Act.
– The amendment opens up a considerable field for discussion. It is not acceptable to me, and I think it would be inadvisable to make it because it materially complicates a sufficiently difficult question, and will entitle persons who are valuing their land to make a deduction where none should be allowed. I admit that there are cases where landowners have made improvements which are not on their land. A drain from or to a man’s land might be such an improvement. The number of cases in which there would be any difficulty are not numerous, and the amount involved is trifling. I do not think it can be said that the definition in the Bill involves any injustice to the owner of land in the making of an estimate of the unimproved value.
– It does. I can cite several cases.
– I do not think so. The New Zealand Act has now been amended nine times. The Parliament of the Dominion have been finding out the weak places in it, remedying injustices, and generally getting the machine to work smoothly, and their definition of unimproved value is substantially that of this Bill. It is as follows : - “ Unimproved value “ of any piece of land means the sum which the owner’s estate or interest therein, if unencumbered by any mortgage or other charge thereon, and if no improvements existed on that particular piece of land, might be expected to realize at the time of valuation if offered for sale on such reasonable terms and conditions as a bond fide seller might be expected to require.
Under our definition, all that we have to do is to deduct from the value of the land the value of “ the improvements thereon.” I am willing to add the words “ or thereto.” That will cover the ground.
– That would not make it so clear, as the words I suggest, but if the Attorney-General will move it, I am prepared to withdraw my amendment.
.- We might first be favoured with an ex-« planation of where the amendment suggested by the Attorney-General will lead us to.. “Improvements thereon” are. practical , substantial things that we can understand and see, and estimate the value of, but “improvements thereto” may be unending; may start anywhere and end anywhere. An oil well may be discovered, and pipes run, as -in America, over hundreds of miles of country. Is every mile of pipe an ‘ ‘ improvement thereto ‘ ‘ in relation to any particular piece of land?
– It may be detrimental.
– Then why is the honorable member anxious to accept an amendment which will be detrimental ? The addition of the words “or thereto” would make the definition too far-reaching, toosweeping, and too ambiguous altogether. We should be told whither we are being led, and what the result isgoing to be when we get there. I do not know of any Act containing an unlimited phrase of that sort. Can theAttorneyGeneral point to the practical experience of the working of such a phrase in any existing legislation? We ought to be cautious before we accept it.
– It is to be seen in every conveyance of land.
– That may be so as regards the phrase “ appurtenances thereto,” but “improvements thereto” may be an entirely different matter, and might be held to include improvements a hundred miles away. If a man has a piece of land, and a hundred miles away has a factory in which the product of that land is put to a different use, it might be claimed that the factory was, in relation to his land, an “ improvement thereto.” He might be bark-growing, and claim that his tannery, a hundred miles away, was an improvement to his farm. He might have a boilingdown factory to treat the beef grown or rabbits caught upon his property. Unless there is some explanation from the AttorneyGeneral of what “thereto” means, I shall take the only course open to me of voting against the proposed amendment.
– I am afraid the honorable member for Adelaide forgets one or two things. He forgets that through every mile over which the oil pipes that he mentioned would run, there would be an increment of value. Similarly, in regard to the “ tannery 100 miles away,” the improvements would be on the land on which the wattles were growing, and would have no relation whatever to the improvements of the land where the tannery stood. The honorable member is letting his imagination run a little riot in thinking that things done 100 miles away could be counted as improvements on the spot. The tannery might add to the unimproved value of the tannery site, just as every railway and every improvement in the country does. These things contribute indirectly to the betterment of the site value, but that is taxable under the Bill, and not exempt. It is only the improvements that we are exempting. I understand that what the honorable member for Richmond wants to provide for is a substantial improvement, such as a storage dam, or something of that kind, which is contiguous or fairly contiguous to the land. That sort of thing might very well be exempt, and it seems to me that the expression suggested by the Attorney-General would meet the case.
– I trust the Attorney-General will give the matter more consideration before he assents to the proposition of the honorable member for Richmond. It will lead to endless trouble if we allow improvements outside the area to be taxed to be taken into consideration. Why treat a farmer who has constructed a bridge or made a road to his property more approachable by his own expenditure any differently from the man who has paid for part of the street paving or channelling in a town? That is an improvement contiguous to his property. Under the New Zealand Act, the value of improvements is the sum which the improvements actually upon the land have added to the value of the land. We must keep to the owner’s land, because, if we once depart from it, we shall find ourselves in great difficulties. I hope that the AttorneyGeneral before accepting the proposal of the honorable member for Richmond will thoroughly consider the whole case, and, unless I have been further enlightened on the point, I shall vote against it.
– We are dealing now with unimproved value, that is, the value which attaches to land apart from the improvements on it. We shall have to define what “value” means; but it is suggested that the unimproved value may be determined by deducting the value of the improvements from the total value of the property. The honorable member for Richmond has pointed out that land may be improved by expenditure by the owner, not on the land itself, but near it, and that, in fairness, that expenditure should be deducted from the total value of the property to ascertain the unimproved value. If a man were to sink a shaft on his land and erect a windmill or a steam-engine over it to pump water for purposes of irrigation, the value of that improvement would be deducted from the total value of the property, in order to ascertain the . unimproved value. But the property might be equally improved by similar expenditure on the bank of a river to which the owner of the land had not a frontage. The New South Wales Local Government Act of 1906 defines .the unimproved capital value of land as -
The amount of the capital sum for which the fee-simple estate in such land would sell under such reasonable conditions of sale as a bond fide seller would require, assuming the actual improvements, if any, had not been made; and also, allowing a reasonable deduction for profitable expenditure by the owner or occupier on visible and effective improvements, which, although not upon the land, have been constructed for its drainage, for its prevention from inundation, or otherwise for its more beneficial use.
– That Act provides merely for municipal taxation.
– The New South Wales Parliament imposed a tax on the unimproved Value of land to be used for State purposes, and subsequently transferred it to the local governments of the State. The Act is a measure for the imposition of a tax on the unimproved value of land, and it is perfectly fair to allow the deduction of actual improvements. As to the ambiguity of the word “ thereto “ I am willing to admit that the difference between “thereto” and “thereon” is considerable; “ thereon “ confines the area referred to, while “ thereto,” to adopt an extreme case, might cover a pipe line extending for hundreds of miles. By the next definition, “Value of improvements,” in relation to land, is defined as meaning the difference between the improved value and the unimproved value of the land. That seems to call for something more precise; but I think that a definition of “ value “ will remove the objections that have been urged.
.- I am desirous of doing what is fair in this matter, but am afraid that if the amendment be accepted in the form suggested by the Attorney-Genera^ it will cause trouble. It must not be forgotten that the New South Wales Act referred to takes into account only improvements made by the owner of the land, by expenditure either on or off that land; but the amendment under discussion provides for the deduction of the value of improvements made off the land by any person. The amendment of the honorable member for Richmond is not so wide as that of the Attorney-General, because the use of the word “ thereto “ re- moves all limitations. Notwithstanding what the honorable member for Parramatta has said, the improvement in value, created by the construction of a Government railway improving adjacent land, could be deducted under the proposal which we are discussing.
– The improvements whose value may be deducted must belong to the owner of the land.
– It frequently happens that land which is worth very little suddenly acquires considerable value by the opening up of a coal mine, followed by the making of a railway, and the creation of a township. The private coal mining companies’ railways often improve the land through which they pass very considerably, the owners of such land in some cases obtaining as much as is. for every ton of coal which passes over it. The proposal of the Attorney-General would prevent the increase of value so given to land from being taken into consideration in the making of an assessment. It has always been recognised that in order to ascertain clearly the unimproved value, the value of improvements made by the expenditure of the owner on the land or adjacent to it must be taken into consideration, but the word “ thereto “ in itself is altogether too vague.
– According to the amendment, unimproved value in relation to land means the capital sum which the fee-simple of the land might be expected to realize if offered for sale. By whom only could it be offered for sale? By the man who has the right to sell it; who would be the man liable for the tax. If he offered to sell, an intending purchaser would ask, “ What shall I buy?” and would be told, “You will buy the fee-simple of the land, on which there is a house and other improvements, and off which there is a pump or windmill, providing for irrigation.” The improvements whose value may be deducted, no matter by whom made, must belong to the owner of the land. The point taken by the honorable member for Adelaide as to the ambiguity of the word “ thereto “ is sound, though the use of the words “adjacent thereto” suggested by the honorable member for Hunter, would do much to remove it. It is clear, however, that the improvements whose value may be deducted must belong to the owner of the land. An intending purchaser would say, “ I estimate the value of the land at so much, the value of the improvements on it at so much, and the value of the improvements off it at so much.” The unimproved value would be the value of the whole property, less the value of the improvements belonging to the owner, both on and off the land.
.- My point is that land may be greatly improved by the expenditure of the Government or of some private company, and that the amendment will allow the value of that improvement to be deducted when an assessment is made.
– Land, which in its original state may be worth no more than 10s. an acre, may have a considerable value given to it by the settlement following the opening up of a mining field, at no expense to the owner. Under the Minister’s proposal that value may be deducted in making an assessment, although it is communitycreated value. The deduction should be confined to improvements effected by the owner himself, and not extend to those values given by, for instance, the construction of a railway in the immediate neighbourhood.
– The building of a railway or other work by a municipality or a State would not, under this clause, be considered an improvement to the land, and, therefore, there would be no deduction in respect of it. We do not propose to deduct the value that a railway or other public work adds to the unimproved value of the land, but the value that has been created by the owner himself, or by the person from whom he purchased the land.
– Then why not use the word “owner.” and make the point clear?
– In this clause we postulate a buyer and a seller, and we say that the value is what a bond fide seller and a bond fide buyer would agree to between them. What the owner sells is the whole of his interest, which includes the unimproved value, or the value less all the improvements that he owns. He does not own the improvements made by the town or by the man next door, but only owns those improvements he has made or bought with his own money. All this provision does is to allow an owner to have the benefit of the money he or his predecessor has spent, although some of the money may have been spent in an irrigation plant, part of which goes outside his particular land.
– If the restriction implied by the word “ thereon “ be retained, I am afraid that some injustice will be done. In Melbourne and all our principal towns large verandahs are built over the footpaths, but these. while not on the land, are certainly an improvement to the property. In Western Australia and our northern towns, the people spend a great deal of their time, particularly in summer weather, on extensive verandahs and balconies which cost large sums to construct; and yet the owners of the land, if the clause be passed as drawn, will get no credit for those improvements. I cannot imagine that a railway or any other Government or municipal scheme can be regarded as an improvement belonging to the owner of the land, who, certainly, can claim only those improvements he or the prior owner has effected. A purchaser is in exactly the same position as the original owner, and improvements “thereon” means those in actual connexion with the property.
– In many of the shires in Victoria, landholders often allow themselves to be specially rated for the construction of roads in their immediate vicinity. The ordinary rate may be is. or is. 6d., but they are voluntarily rated at 2s. or 2s. 6d. for the purpose I have mentioned. In Victoria hundreds of miles of roads and scores of miles of streets are constructed on these terms ; and I should like to know whether the value will be subtracted from the tax. If a man has contributed, say, £$0 towards the construction of a road, will he be allowed to deduct that ^30? I think he will according to the definition of the Attorney-General, because it is an improvement paid for out of the pocket of the taxpayer.
– The question is whether his property is worth ^30 more by reason of the road.
– That is the amount he has contributed. I contend that if once we step off the land in order to give credit for improvements, we shall find ourselves in endless trouble.
– The case just cited would not mean an improvement “ thereto “ under this definition. The only improvements to be considered are those which the owner himself can sell, will to his children, or give to a friend. All improvements made partly by the taxpayer and partly by the community are improvements with which he cannot deal when he sells his property. However, although I do not see the slightest difficulty, I am prepared, in order to meet the objection raised, to suggest that instead of “or thereto,” the words “or adjacent thereto have been made by the owner thereof “ be inserted.
.- I should much prefer to have the word “thereto” inserted than the words “adjacent thereto.” Supposing an owner has 5,000 acres of land, and next to him is a block of land belonging to another person, and on the other side of that block there is a river. The owner may suffer very serious injury from floods, and may spend, perhaps, .£2,000 in building a mole or other work, which results in saving his land from inundation. By this means the land, which was worth originally £5 an acre, may suddenly become worth _£io or ^12 ; and I desire to know whether he is only to be allowed to deduct ^2,000 as spent in improvements, or to deduct the whole of the increased price he can get on the market.
– Let us decide first whether an owner shall be entitled to deduct improvements not on his land ; the amount to be deducted is a different question.
– Then, again, the man might suffer from scarcity of water, and spend the money in irrigating his land ; would he then be entitled, under such circumstances as I have cited, to regard that as part of his improved value, and not his unimproved value?
– I do not think he would.
– Then where is the benefit of extending the provision in this seemingly generous way?
– It: seems to me that we are confusing things that are quite plain, because there is a key which unlocks a great many of the difficulties. That key is in the word “sale,” which implies price, and price is that which makes the matter plain. In assessing the value of improvements, we may, for instance, have two blocks of land side by side, or in the immediate neighbourhood, one totally unimproved and the other with improvements. Each block has a selling price ascertainable in the market. Whatever the one will fetch in the open market over the other represents the price of the improvements upon it, and it is the price of the improvements, not the amount that has been spent upon those improvements, which is to determine the exemption. The next question is - Who has made those improvements? They might consist of works, such as a dam across a river, undertaken by a number of persons, acting conjointly, materially adding to the productivity of the property, and, there.fore, being in the very nature of improvements. I take it that the share which the owner of a block of land has contributed to such improvements is the share which is deductable from the total amount of the selling price of his property.
– The honorable member is referring to improvements made on a property, and not contiguous to it.
– Improvements that are contiguous or adjacent to a property, express themselves in the price obtained for that property. That is the key to the whole situation.
– Would the value of such improvements be deducted?
– Yes. The price of the whole would be ascertained, and from that price would be deducted the proper value of the land. The rest represents improvements, and, therefore, must be deducted.
.- If the Minister would accept a part of the honorable member for Richmond’s amendment, namely, after the words “ therein and thereto” as proposed, and add “for its more beneficial use,” the definition would be improved. A block of land, having associated with it an irrigation plant, or other works* which could be sold with it, would fetch more than an adjoining unimproved block. In Victoria, for instance, in many cases water frontages are not sold. A man might have a block of land close to a river, with an irrigation plant immediately adjoining it, and erected for the beneficial use of the land, and capable of being sold with it. That would be an improvement, and should, I think, be treated as such. We have a provision in regard to a bond fide buyer, and a bond fide seller, and with the addition of the words which I have suggested this provision would be improved.
– The valuation of improvements generally is one of the most important and difficult matters relating to this measure, and we cannot take too much care in trying toarrive at a proper solution of the problem.. If I understand the principle of this tax,, it is that it is not to be imposed in respect of money that has been expended in making, improvements. In other words, the tax, as the Attorney-General himself has said, should be upon the added value which the community, as a whole, or the taxation of any portion of the community, has1 given to the land. I see great difficulty in adopting the suggestion made by the honorable gentleman as to the use of the word “ thereto.” In the first place, it is extremelyvague, and vagueness, of all things, ought, if possible, to be avoided in a definitionclause. It might or might not include quite a number of things lying on doubtful ground. Take a case where a number of adjoining land-owners have combined, either through a trust, sanctioned by Act of Parliament, or by voluntary cooperation, to make a channel to drain their land. Such a combination is of common occurrence, and I am sure that honorable members would desire, if possible, to exempt from the operation of this tax such’ an improvement.
– If it ran through thetaxpayers’ land, I presume the honorablemember means?
– Not necessarily. It might run through land which they had jointly acquired for the purpose, or land in respect of which they had obtained a drainage easement. The moneymight be spent in many ways, and represent a considerable portion of the efforts of” the land-owners to improve their lands, an3’ therefore ought not to be taxable. Then we have cases where rates have been paid? to a municipality to make roads or other improvements, and they clearly fall on the other side.
– What about a special rate?
-:-That is one of the difficulties; but we must draw a line somewhere. Clearly improvements that have been made by a municipality out of a general fund contributed by the taxpayers of the community ought to stand in the same position as improvements to the value of land created by the general expenditure of public money.
– That cannot possibly come under the definition of “ unimproved value.”
– In one sense it does. No doubt every road near a property increases its value, whether the owner of that property has or has not made it. If he acquires land for the purpose, and makes the road himself, that land is part of his holding. But a man might not acquire the land ; he might merely acquire a right-of-way over it, so as to give access to his farm. If a man obtains a rightofway to give access to his farm, and pays money for it, then that right-of-way undoubtedly is part of the easement which he can sell. If he has expended a considerable amount in forming and metalling that right-of-way, then that ought to come within his exemption. Now we come to another difficulty. As the honorable member for Maribyrnong has pointed out, there are many cases where special rates are imposed - usually confined to a riding or portion of a riding - and designed to provide -for making a particular road or improvement, which mainly, if not solely, relates to that particular part of the shire. According to all principles of logic and justice, that ought to be in exactly the same position as an improvement made by a number of people outside their own land at their own expense. A line of demarcation ought to be drawn between cases where the actual money can be identified as being spent for the improvement of particular lands. I do not think that we ought to draw a line as to the mere form in which the improvement is carried out - as to whether it is done by voluntary co-operation, by the formation of a trust, under statutory authority, or through municipal machinery - provided the money contributed can be identified as having been expended for certain definite improvements, which are improvements to the land concerned.
– When once we go off’ the land actually owned by the taxpayer, or land, over which he has an easement, and deal with improvements on a public roadway, do we not get on dangerous ground?
– I admit that. It would be difficult to accurately define such a case as the honorable member has mentioned, but we should attempt to deal with it either by exempting or including such an im«provement. I do not think the AttorneyGeneral’s suggestion would leave that matter clear, and I did not quite understand the line of reasoning which he adopted when he tried to draw a distinction between something which a man can, and something that he cannot, sell. That cannot be taken as the line of division. In most cases the improvement is the act of some form of co-operation, either formal or informal. What we want to secure to the particular land-owner is that money expended jointly with others, and which may represent a considerable proportion of the improvement of his land, shall be exempt.
– In the case of. the drainage of swampy land, it represents practically the whole.
– That is so; and we ought to give him the advantage of that expenditure. We must try to give landowners the. advantage of something that they can sell, or an easement or right enjoyed by a number, and obtained by their joint contribution. I think that the original amendment, of which notice was given by the honorable member for Richmond, and not that which he has actually moved, will enable us better than any other to draw a line of demarcation. We have the words in the original amendment - and also allowing a reasonable deduction for profitable expenditure -
By “profitable” I understand the honorable member to mean expenditure the advantage of which still attaches to the land of the owner. That may require closer definition. The amendment continues - by the owner or occupier on effective improvements - improvements still unexhausted - which, though not upon the land, have been con> structed - then I would add “ by the owner or owner* for the time being,” or something of thai kind - for its drainage, prevention from inundation, its irrigation, 01 better access, 01 otherwise for its more beneficial use.
– What would become of improvements which were bond fide effected, but which had not achieved the profitable purpose for which they were intended ?
– I am afraid we cannot give exemptions for all moneys, no matter how honestly spent.
– Take a case at Shoalhaven, New South Wales, where £7,000 was spent, but did not effect what was wanted, and other improvements had to be made.
– Any form of imposition of a new kind of tax will necessarily affect a number of people more or less injuriously. The principle we are following is that, if a piece of land is worth £100 now, and would be only worth £50 if it were still prairie land, it should be taxed on the £50. That is the logical principle of the whole measure, and if we once depart from it and begin to make allowances to people who have expended money, the result of which, through their own misfortune or misguidance, is not still upon the land, we shall get into an absolute quagmire. The amendment regarding improvements circulated by the honorable member for Wimmera opens the door for a discussion as to how far each man’s money expended in clearing, for instance, ought to be allowed for. I merely rose to suggest that the original proposal of the honorable member for Richmond, with some slight modifications, most nearly arrives at a solution of what is undoubtedly a very difficult problem.
.- I am very grateful to the honorable member for Flinders for his explanation. It would seem, after all, that I was justified in taking exception to the course proposed by the Attorney-General. We have now a legal opinion that the word “thereto” is far too ambiguous to be put in the Bill. I agree with the honorable member for Hunter that the original suggestion of the honorable member for Richmond was preferable to the insertion of the vague word “ thereto.” Certainly the honorable member’s original amendment defined to some extent the additional improvements the value of - which could be deducted before arriving at the unimproved value of land. The moment we get away from the improvements on the land itself we get into deep water. It is very dangerous to get into deep water if you are not certain that you can swim.
– We ought to try to save those who are in deep water.
– That is why I offered my thanks to the honorable member for his suggestion, which may result in our being able to prevent some persons from being overtaxed while not permitting others to escape a just liability. I am afraid that the use of the word ‘ ‘ thereto, ‘ ‘ or even the words “adjacent thereto,” or “contiguous thereto,” would allow certain persons to escape a liability that ought to be put upon them.
– “ Adjacent thereto “ would be more ambiguous than “thereto.”
– That confirms my contention. My reply to the argument used by the Attorney-General and the DeputyLeader of the Opposition is that there is no question of sale in the case of the improvements. We are considering the unimproved value of a piece of land, and can only arrive at it by deducting the- value of the improvements. Manifestly, the greater the value of the improvements, the less the unimproved value for taxation purposes. I have no desire to prevent a man being relieved from taxation because of improvements that he has made, and that are inseparable from the working of the land, and are the result of his own energy or brain power, or coin ; but I have a strong objection to allowing any individual to deduct the value of improvements which are made in a general way, and over which he had absolutely no control, before we arrive at the unimproved value of his land. Manifestly, the phrase “ improvements thereto “ would include a road.
– The whole question is r Can he sell the road ? If he cannot sell it, it cannot be deducted as an improvement. He does not make the road.
– The question is not whether the land-owner made the road. The only question is, “Is the road an improvement to his property ? “ As it is, he can deduct the value of that improvement before he arrives at the unimproved value of the property.
– Only if it is something that he can sell.
– The Attorney-General seems to be labouring under a delusion. We are not considering whether the man can sell the improvement or not.
– Has he a right to sell it?
– There is nothing in this paragraph as to whether he has the right to sell any particular improvements “ to “ his property.
– The whole question is: “Has the improvement a saleable value?”
– It is not the whole question. The question at issue is : “ Does that improvement add to the value of the property for the purposes of sale? “ A road adds to the value of the property for purposes of sale. The question of selling the improvement and the value of the improvement is not at issue, except in so far as its value adds to the unimproved value of the land.
– You cannot add to the unimproved value of the land by an improvement.
– Take the case of a piece of land of a value of j£i per acre. The municipality run a road alongside it, or the State Government run a railway near it. Immediately the unimproved value of that property increases. If the suggested amendment is allowed to pass, the road or railway can be claimed to be an improvement adjacent to the property, and the owner will be allowed to deduct the value of that improvement before we arrive at the unimproved value of his land.
– Certainly not.
– That is a communitycreated value.
– I object to any amendment which will permit an owner to deduct the community-created value from the value of his property before arriving at the unimproved value. The amendment will permit a certain proportion of the value of the road to be deducted.
– Not if it is a publiclycreated value.
– There is nothing in the definition about publicly-created values. We are to arrive at the unimproved value of a piece of land by deducting from the total value the value of the improvements thereon or thereto.
– Which the owner has the right to sell.
– It does not say so.
– The saleable value.
– It is not the saleable value of the improvements. We are considering only the sale of the land after deducting the value of all the improvements, irrespective of whether the owner has the right to sell them or not. Under the definition it is the land that is offered for sale apart from any improvements. What has the sale of that portion of the land to do with the sale of the improvements ? We only arrive at what the land would bring if there were no improvements on it, by deducting the value of the improvements, and the amendment will allow an owner to deduct the value of certain improvements that he has not made. That is what I object to.
– A careful perusal of this provision will disclose, first, that the unimproved value is something with which the man who is on the land has nothing to do, and, secondly, that what we call the improved value is something with which he has everything to do, because he made it himself, or bought it. We propose, for the sake of arriving” at a commercial price, to suppose that an owner says to another man, “ What will you give me for the whole lot?” And the other replies, “ I will give you £1,000 We have then in our minds to separate what, in the minds of the buyer and seller, is the amount to be given for the improvements for which the land-owner is himself responsible, ‘ and we deduct that amount from the £1,000 offered. The balance is the value with which the owner of the land had nothing to do, namely, the value that had been given to it by the community. Directly you spend a penny on rates by improving a road, putting in a gas main or water-pipes, you add to the unimproved value of the man’s land. If you spent £1,000,000 in that way and raised the unimproved value from £1 an acre to £50 a foot, you would not increase the value of the improvements by the millionth part of a penny. You would only have increased the value given to the land by the community. Of .course, there may be cases in which a man owns the land, but does not own the improvements on it, but they are immaterial. The point is that the improvements whose value may be deducted in the making of an assessment must be improvements which some person has a right to sell. No one can sell a public utility. I admit the ambiguity of “ thereto,.” but it arises upon the attempt to limit the point at which the expenditure on improvements attaches to a piece of land. The use of the word “ adjacent “ increases the difficulty. All we desire is that the man who has spent money in improving his land, or has bought from another an improvement, should be permitted to deduct the value of the improvement, whether it happens to be within or outside his boundaries. By way of illustration, let me mention the case of a land-holder on the Hawkesbury, who has an engine and pump on the river bank, and 200 yards of piping running across the river flat outside his boundaries. That plant constitutes an improvement to his land, but it is wholly outside the boundaries of that land. It has been suggested that the words “or by his predecessor in title” be added. But *he provision will be perfectly clear without those words, because improvements could not be made by any one except the person who has a right to sell them.
.- I think that if the provision were amended by confining the word “thereto” to. improvements at the expense of the owner or his predecessor in title, it would be fairly safe. I had an amendment drafted providing for the addition of the words “ or at the expense of the owner or his predecessor in title.” There might be a joint expenditure by the owner and others. The honorable member for Richmond has referred, either here or in private conversation, to co-operative expenditure; but we should not allow an owner to deduct the full value of an improvement to whose cost he has contributed only a part. Another difficulty to be provided against is the allowing of a double exemption. “A” might be entitled to deduct the value of the improvements made on “ B’s “ land, because they improved his land, while “ B,” under cover of the word “ thereon “ might also be entitled to deduct their value because they were on his land. My first impression was that the definition might read “ improvements thereon or thereto at the expense of the owner or his predecessor in title.” That would prevent any other than the owner of the land claiming an exemption for the improvements.
– The words “ improvements thereto “ are indefinite.
– I am coming to the opinion that it is undesirable to make any alteration. The South Australian provision works very well, and, do what we will, we must use indefinite words. I tried to cure the indefiniteness of “thereto” by confining it to improvements at the expense of the owner. Another man might be prevented from deducting the value of the improvements on his land which had already been credited to another owner by making the provision read “ thereon or thereto so far as made at the expense of the owner or his predecessor in title.” The AttorneyGeneral has suggested an addition to the amendment of the honorable member for Richmond, and 1 suggest that further addition ; but if the Government does not wish to accept it, I shall not press it.
– It seems to me that a great deal of trouble is being made about nothing. The Bill says distinctly that the unimproved value in relation to land means the capital value which the fee-simple might be expected to realize if offered for sale on such reasonable terms and conditions- as a bond fide seller would require, assuming that the actual improvements thereon, if any, had not been made.
– We are talking of improvements which are not on the land subject to tax.
– It is a simple thing, to ascertain the unimproved value of land. When a property is sold before any improvements, have been made in the neighbourhood, the price is its unimproved value.
– It is not difficult to ascertain the unimproved value of land, but it is difficult to frame a definition which can always be applied with justice.
– I think that the provision in the clause can be applied justly, but a hard-and-fast rule may create difficulties. Persons of common sense may be left to determine the unimproved value of land, that is, what land is worth apart from the improvements made to it directly or indirectly. The opening up of a road would be an improvement, or the cutting of a drain.
– A man might cut a drain outside his land which would greatly improve it.
– That would be taken into consideration in determining the unimproved value of the land.
– No ; the owner would not be credited with the cost of the drain.
– I think thai he would. My experience, both here and in New South Wales,. leads me to think that if the lawyers would leave our Bills alone, there would be less litigation afterwards. They are the worst legislators. I advise the Attorney-General to be very cautious, because we are apt to get into a maze when we move many amendments.
In the case of the Shoalhaven property, some £7,000 was spent in drainage, under the direction of a scientific man, but the result was not what was expected, and a practical engineer was called in, under whose supervision a scheme was carried out at one-tenth of the original cost, and the land rendered worth £100 an acre. What would be done in such a case? We must take into consideration improvements, whether direct or indirect, such as roadmaking, providing water-courses, drainage, scrubbing, and so forth; and a range of discretion ought to be permitted.
Amendment, by leave, withdrawn.
– I desire to move the following amendment, which I hope will meet the objections that have been raised -
That after the word “ thereon,” in the definition of “Unimproved value,” the words “or appertaining thereto and made or acquired by the owner or his predecessor in title “ be inserted.
The words here are much less objectionable than the word “ adjacent,” which really does not attach itself to the particular piece of land.
.- The amendment just moved is a considerable improvement on the previous amendment. I should have preferred the proposal of the honorable member for Richmond, but the amendment of the AttorneyGeneral is very much in line with the New Zealand Act, which deals with this troublesome and difficult question, and provides that improvements shall not include work done, or material used, “ in or for the benefit of the land by the Crown, or any statutory public body, unless such work has been paid for by the contribution of the owner.” If the phraseology of the amendment is legally in harmony with the Bill, I think it might be accepted.
– I think the amendment moved by the Attorney-General makes the matter clearer, but another difficulty occurs to me. It is generally admitted that an owner should not take advantage of any improvement created by the -community, but, while that is so, we have to take into account improvements created by what I may term neighbourly co-operation. In pioneering work in this country such a case as I have in my mind often arises. A local authority may have made a road, and it is necessary that a drain should be constructed. The local authorities cannot afford to carry out the work, and four or five neighbours co-operate, with the sanction of the authorities, and make the drain. This materially improves the value of the lands of all, and it is a work carried out by private arrangement, with the owners own money.
– In so far as such a road improves the property, and in so far as the men have contributed to the cost, all have a right to the improvement, and if they can transfer the right, it is an improvement, which might properly be deducted.
– I think the AttorneyGeneral’s amendment would cover such a case, but, seeing that the line of demarcation is so indistinct, I think we should clearly provide against anybody making a claim in the case of improvements created by the public authorities and the community. While it is only just that an improvement, carried out by cooperation of this kind, should be protected, we ought to be very careful that similar prolection is not accorded in the case of improvement made by the community.
– I am glad that the honorable member for Hindmarsh has raised this point, because that class of work is specially contemplated under the laws of Queensland, where drains have been constructed in the manner outlined. There is special provision in the Local Government Acts of Queensland to enable work, which could not be undertaken by an individual, to be carried out ‘by a group of individuals, consent being given on petition, by the local authority. The necessary money is advanced by the local authority and is repaid in the form of contributions or rates-..
– Such a case has a. wider scope than the one I contemplated.
– What the honorable member for Darling Downs speaks of is practically communal action in respect of which no deduction could be made.
– I have a particular case in my mind where the land was absoluteswamp, but the owners combined and carried out the work in the way I have described. In many instances the improvement effected may not absolutely be on the land, but within the area, and all the lands may be thereby greatly improved.
– I should say that in such case the parties were not entitled to any deduction.
– But eventually the parties repay every sixpence of the cost ; and, if machinery is provided by the States to enable them to take joint communal action, they ought to get a deduction.
– The very opposite is the case - they ought not to get a deduction. Everybody pays for everybody.
– This was a case in which the money was borrowed for a specific purpose.
– The honorable member would destroy the line of demarcation between improved and unimproved land.
– Here we have fifteen or twenty people banding together.
– But what if there be 50 or 150 of them?
– Even so, it is a special loan for a special purpose. In New Zealand, if such work is done by a statutory public body and paid for by the owners, the improvements are exempt.
– Anything done out of a general or special rate cannot be allowed for under any circumstances. It would be a violation of the fundamental principle of land value taxation.
– This work is not done out of the general rates, but by a special method which calls upon the owners of the land to repay the money borrowed.
– Ordinary ratepayers will pay money that is borrowed.
– But in the case of the ratepayers it is a general charge, while in the case I mention it is a special sum for special improvements.
.- The case cited by the honorable member for Darling Downs appeals to me. Supposing two three, or four men agree to drain a certain area of country, borrow the necessary money from a bank, and in time repay it; in such case, does the AttorneyGeneral contend that they are not entitled to deduction?
– If it is communal money they are not entitled. Whether they repay the money or not is nothing to the point.
– But they join together to borrow the money, and they improve the unimproved value of the land.
– They do not improve the unimproved value of the land at all.
– They improve the value of the land.
– What they do is to add to the value.
– Where is the difference between borrowing the money from a bank and borrowing it from the Government or a municipality?
– There is the difference between the honorable member and myself; one believes in Socialism and the other does not.
– The question is whether they borrowed the money, expended it themselves, and repaid it; the source from which they got the money does not matter.
– The honorable member misunderstands the whole question.
– If a deduction cannot be made in such a case no deduction can be made at all.
Sitting suspended from 1 to 2.30 p.m.
– Without following any further the argument in which I was engaged before the adjournment, I think that what we all have in view is that ‘ ‘ unimproved value” should include only that value which has been given to the land by the efforts of the community. We do not want to include any value given to it by the owner of the land- himself. Although the amendment moved by the AttorneyGeneral will not cover all the ground, it goes a long way towards doing so, and I am prepared to accept it in the form finally proposed by him.
– I am in favour of this definition as originally drafted, rather than as proposed to be amended, for I believe that the amendment would lead to much confusion, and simply play into the hands of the lawyers. We wish, if possible, to avoid that; but, at the same time, our desire is to do justice to those who have improved their land. The owner of a piece of land knows its value, and ought to be able to value it better than any one else. In the New South Wales Hansard, volume LXXIV., page 2764, I find a clause proposed to be inserted in the Land Tax Bill, as introduced by Sir George Reid, in 1894, which seems to cover the point which honorable members have been discussing. No doubt many honorable members have local surroundings in their mind in dealing with this matter, and do not wish certain works in their own constituencies to be added to the unimproved value of the land therein. They are doubtless trying to serve their own constituents, but in doing so we must be careful that we do not leave loopholes by which people may avoid the payment of just taxation. The clause which Sir George Reid proposed to insert in the New South Wales Bill reads - “ Unimproved value “ means, in respect to land, the capital sum foi which the fee-simple estate in such land would sell, under such reasonable conditions of sale as a bond fide seller would require, assuming the visible improvements (if any) were not upon it.
The use of the words ‘ ‘ visible improvements “ would remove the difficulty in this case.
– No; they would not cover what we have been arguing for all the day.
– Improvements made to a piece of land must be visible. Even roads and drains outside a holding, but tending to improve it, would be visible improvements.
– Timber removed from the land would not be visible, although its removal would be an improvement.
– It would be a visible improvement. I should like the words “ visible improvements “ to be inserted, otherwise we should leave the paragraph as it stands.
.- I do not know whether the Attorney-General would alter the structure of his amendment. As it stands it reads, “or appertaining thereto, and made by the owner or his predecessor in title.” The words “or his predecessor in title “ would qualify the word “ thereon “ in the paragraph as it stands, as well as the word “ thereto.” I do not think that it ought to do so. Whatever is on the land should, without question, be an improvement.
– And it must have been made by some one, either by the owner or his predecessor.
– It might have been made or owned by the Crown on repurchase, but I do not think the Crown could be described as a predecessor in title. It would be better, I think, to use the words “or, if made by the owner or his predecessor in title, appertaining thereto.” That would get over the difficulty.
– I do not think that there is any difficulty.
– But there may be. The Attorney-General may think that the Crown is a “predecessor in title,” but I do not think it is. The words “predecessor in title” occur in several Irish Acts, and there has been a great deal of litigation in Ireland between landlords and tenants as to the value of improvements. I shall not move a further amendment, but will throw upon those in charge of the Bill the whole responsibility. We may find that,, by the use of these words, we have qualified the word “ thereon.”
.- It seems to me that the words relating to improvements “ made by the owner or his predecessor in title” are superfluous. Improvements existing on a block of land must have been made by some one who has occupied that land. Is it suggested that Providence or some benign superhuman agency has created them?
– Occasionally the Crown makes improvements to land before selling it.
– And the purchaser, I presume, pays for that improvement. The existence of an improvement on a .piece of land pre-supposes that it was made by human agency. Usually a man does not improve land unless he has a title to it, and can sell the land and the improvement upon it if he chooses to do so. As to the statement made by the honorable member for Angas, that difficulty has arisen in Ireland in determining what are improvements to land, the difficulty was not as to the improvements, but as to who created them originally. An Irish landlord never made any, and the trouble was as to who, in past generations, constructed drains, erected fences, and the like. The Attorney-General said just now that untaxable improvements were such, and such only, as a seller can convey to a buyer. But there are improvements which cannot be so conveyed. For instance, some time ago I sold a block of land, and before doing so, had to pay for the cost of making a street on which it abutted. I did not convey that street to the buyer, although I may have conveyed to him a right of way over it.
– But the honorable member got the added value to his land.
– Certainly ; and the man who purchased had to pay for it. In these cases a municipality compels an owner to pay the cost of constructing a street on which his land abuts, and there can be no justification for classing the making of that street as an improvement which ought to be taxed.
– That is not done under this clause.
– The Attorney-General says that it is.
– At present the clause declares that that is an improvement, the value of which can be deducted.
– The Attorney-General said to-day that under this clause the only improvement which could be deducted in determining the unimproved value of a piece of land was- one which a seller could convey to a buyer, and I contend that a deduction should be made in respect of such an improvement as I have mentioned.
– The owner ought not to be allowed to deduct the value of such an improvement, and he cannot be allowed to do so in conformity with the principle underlying this Bill.
– I join issue with the honorable member.
– The purchaser of the land has probably bought it on the ground of the improvements made to it by the construction of the street.
– And has paid for it. There would be just’ as much justification in taxing a man in respect of a barn, a stable, or other improvements erected with his own money, as there would be in taxing him in respect of the improvement made to his property by the construction of a street for which he alone had paid. An amendment of the clause is required so as to exempt improvements contiguous to a piece of land, and which amount to an improvement to the land itself. No man should be taxed for his enterprise; but, on the contrary, he should be encouraged to spend money on improvements.
.- - I hope that the Committee will come to a decision on this question. I am afraid that the honorable member for Coolgardie was not present when we were discussing this matter before lunch.
– I was.
– The distinction was clearly made between the value given to land by the community and the value given to his own land by the individual. If a man is compelled by a municipality to make a road or street, there is no difference at all between the labour of such a man and the improvement made by such a man in those circumstances, and the collective improvements made by the community out of the contributions of each individual. Every improvement that we see around us in the city of Melbourne has been made as a direct result of contributions by each citizen in the community.
– No. Under the Victorian Local Government Act the municipalities will not allow a man to subdivide land in the city or town unless he makes the roads first, and pays for them out of his own pocket.
– Honorable members, by not keeping the clear line of demarcation before them, have contrived to obscure the distinction between improved and unimproved values. The unimproved value of land is a value which cannot be added to by anything that the owner of the land can do. No matter what he does he cannot add to the unimproved value of the land, because the unimproved value is the value added by the community. Therefore, the very statement of the case precludes one kind of value being added in any other than that particular way. It was for that reason the honorable member for Adelaide, the honorable member for Hunter, and the honorable member for Maribyrnong took exception to the ambiguity or vagueness of the clause in possibly including improvements which were made by the community. I wish to make it perfectly clear that- what we mean by improvements, which may be deducted from the value of a man’s land in estimating its unimproved value, is improvements that are made by the man himself, or acquired by the man himself, as distinguished1 from improvements made by the community, either in its corporate capacity, or under its corporate direction, which is one and the same thing.
.- I think the difficulty has been caused by a confusion’ of the issues. The amendment originally suggested by the honorable member for Richmond, referred to improvements made by the owner in building dams, erecting pumping machinery, or constructing drains. The matter of paying for the formation of roads or streets, or the work of subdivision, comes under another head altogether.
– No, my original amendment included better access.
– The Local Government Act of New South Wales provides for the local governing authority contributing, say, half the cost. The owner generally pays half towards the construction of roads or streets, or new subdivisions.; but, in some cases, he has to make the whole of the new streets. If the Committee concedes the amount that the owner of the land pays towards that sort of work, to be an improvement, it will lead to endless confusion, because the value imparted to the land is partly contributed to by the local governing authority. If we depart from the original intention of the Committee, as expressed during almost the whole of this morning, that improvements were to be only improvements made by the owner of the land for his own particular benefit, and increasing the value of the land, we shall be making a mistake. I am prepared to allow for any improvements that may be made by the owner personally, but I distinctly draw the line at allowing for improvements that may be contributed to by the local governing body. The two things are altogether separate and distinct, and should be kept so.
– Would the honorable member not allow the man a deduction for the amount that he contributes towards the cost of the work?
– I should not. If the local governing body subscribes part of the cost and the owner of the land finds the other part, the benefit to both is mutual. The owner reaps a certain amount of benefit both ways, but that is a very different proposition from the one argued this morning with regard to the building of dams, or even the provision of better access. If the owner of the land were making a road wholly and solely on his own account I should say at once that he was entitled to the benefit of an exemption, but I would give him no benefit by way of exemption for a road built wholly or partly by a public authority.
. -I agree with the honorable member for Nepean, but in Victoria, under the Local Government Act, there are two ways of dealing with roads. The owner has to pay half the cost of making the footpath and the channels opposite a house, but he pays nothing towards the cost of the road. The lanes at the back of, or between, the houses are made by the municipality, and each owner is assessed for his share of the cost. The point raised by the honorable member for Coolgardie is different from that, because where an owner of a block” of land subdivides it for building purposes he makes the roads, footpaths, and channels at his own expense. The municipality will refuse to consent to the subdivision of the land or to take the roads over until the owner has done that work himself. By doing it he increases the value of the unimproved blocks that are sold, and the Commonwealth will get the benefit of the increased value by means of this taxation. It is only fair that, when the original owner has added the cost of making the roads and footpaths on to the value of each block of land, the purchaser should have the benefit of his proportion, the whole expense having been borne by the land-owner and not by the municipality.
.- Let me give another illustration. Take the case of irrigation works such as those on one of Sir Samuel McCaughey’s stations. The most expensive part of the works may not be on any particular allotment. I do not know whether that gentleman is selling bis allotments, but let me assume that they are sold. The erection of the plant improves all the areas, and yet under the Bill as it stands each individual owning an allotment will not be able to count his share of the cost of the total improvement against its unimproved value. That is an even more definite illustration than the one given by the honorable member for Coolgardie, because other things may be urged against the question of street subdivision. In the instance I have given the private subdivider has done everything himself. He has provided the whole plant, and so improved the whole property. Is it not fair that over and above the mere irrigation ditches that go through each area you should include in the value of the improvements on any allotment its proportionate share of the whole cost of the pumping plant? Under this Bill as it stands that will not be done, and it constitutes an anomaly.
– I doubt whether the Attorney-General is correctly seized of the point I raised a few moments back. If he is, he has drawn a most extraordinary conclusion from it. The honorable member for Balaclava very fairly stated the case of the owner of a piece of land within a municipality who desires to cut it up. The municipality will not make the streets or footpaths through that land. The owner makes the streets at his own expense, and pays his share towards the cost of making the footpaths. He may spend anything from £500 to £1,000 in roads and footpaths through the property. The effect of that is to increase the value of the unsold portions of the land by giving access to them. The Attorney-General is rather ambiguous as to improved and unimproved values. He tells us that the unimproved value is never varied except by improvements made by the community, which must be taken to mean that private expenditure adds nothing to that value. As theory, that may stand, but when the assessor comes along to ascertain the unimproved value of the land, he will not be guided by the definition of the Attorney-General. He will not stop to inquire whether a particular street was made by the community, or at the cost of a private individual. Unless we put in this clause something which releases people from taxation on the value of their own improvements, we shall be doing what is unjust. We ought to take into account the money spent by a land-owner in making a road to improve his property as much as his expenditure on improvements on the land itself.
– How would the value of such an improvement be arrived at ?
– In the same way as the value of any other improvement.
– How does the honorable member distinguish between the improvement of a property by the making of a road at the expense of the ratepayers and by the making of a road by an individual owner ?
– When a road is constructed at the expense of the ratepayers, all within the municipality share the expenditure ; but when an individual makes a road, he pays the cost ; and if the value of. his property is thereby increased, it is he and not the community that owns the improvement.
– Subdivisional roads illustrate the honorable member’s meaning.
– Yes. A man may spend £500 or £1,000 in making roads which improve, not only his property, but add to the value of adjacent land by improving the means of access. If we agree to tax only unimproved value, that is, communitycreated value, we should certainly exempt from taxation every improvement on or adjacent to an owner’s land which has been made by the expenditure of his own money.
.- The more the matter is discussed, the more it must be apparent that we should have done well to adopt the amendment of the honorable member for Richmond, which would meet the objections of the honorable member for Coolgardie and others on the Ministerial side of the Chamber. The desire is to tax the unimproved value of property, and if an owner spends money outside the borders of his property for the express purpose of improving it, he should be allowed to deduct the value of the improvements when making out his return. The Attorney-General has gone some way to meet the honorable member for Richmond in admitting that improvements appertaining to the land should be allowed.
– What does that mean, exactly?
– That is what we must know. I think that it would be better to adopt the original proposal of the honorable member for Richmond. The value given to a property by the making of roads at the expense of the owner is not community-created value, and a deduction should be allowed in respect to it. If we allow owners to deduct the value of houses and other expenditure on their land, which has increased its value, we should also allow them to deduct expenditure outside the land which has increased its value. I should like to know from the AttorneyGeneral exactly what has to be done to ascertain the unimproved value pf land, because the Bill throws upon every landowner the onus of assessing his own land. I assume that if the land to be assessed is in a rich district like Colac, and worth, with improvements, £50 an acre, though originally bought for £1 an acre, the owner, in determining its unimproved value, has to try to ascertain what it would sell for, assuming that there were no improvements on it, but that the improvements on the surrounding properties, and the roads, railways, and facilities of communication remained as they are. Having done so, he might fix the unimproved value at ,£20 an acre, but that would be merely his opinion on the subject, and the best valuers in the country might differ from him, one fixing the value at .£15, and another at £25. Under the Bill, a man who is 25 per cent, below the Commissioner’s valuation will be in a very awkward position, because the onus will be thrown on him of proving that he has not wilfully undervalued his property; if he cannot prove that, he will be liable to extremely heavy penalties. Ten years hence the unimproved value of the same land may be £30, or it may have dropped to ,£15. There should be some definite starting point. There are properties which have been in occupation for eighty years or more, chiefly for grazing, which have been gradually improved to the extent of £1 an acre. A little clearing has been done in one place, and some other improvement elsewhere, but it would be difficult to show exactly how the improvements were effected. To the ordinary man the land might seem to be practically in its natural state. These facts show how difficult it is to arrive at the unimproved value of land. That would not matter so much were it not for the unchristian penalties provided. I’ should like the Attorney-General to give a concrete example of the manner in which he thinks the unimproved value should be arrived at.
.- The honorable member for Coolgardie has argued that a deduction should be made in respect to money spent by a land-owner in making roads which improve his property, but, according to the New Zealand YearBook, if a public road is made by an owner for the purpose of increasing the value of his land, it is not valued as an improve.ment. as it is not on the land, and is not included in the area which is valued. In the Dominion they have had years of experience of land value taxation.
– Are we to follow New Zealand in everything?
– No ; but New Zealand people have had years of experience in respect to the taxing of land values, and present to us an excellent example. When we start to make deductions in the case of public roads, and so forth, we never know where we shall end.
– There is an amendment that allows for that.
– No; the amendment of the Attorney-General provides that only in. the case of improvements which can be conveyed by sale can any deductions be allowed ; and improvements made on a public road, although at the exclusive expense of the owner, cannot be so conveyed.
– That is only the opinion of the Attorney-General, it is not the amendment.
– The Attorney-General has assured the Committee, and also assured me privately, that that is the meaning of his amendment. Further, that is the meaning I read into the amendment, and, if that be not correct, T am prepared to revert to the original definition. Let hon orable members listen to this from the New Zealand Year-Book -
Anything which can be valued as an improvement must in the first place be effected upon the land which is benefited by that improvement.
A public road may be made by an owner for the purpose of increasing the value of his land. This road would not be valued as an improvement, as it is not on the land and is not included in the area which is valued.
That appears to me to be definite enough.
Were the road a private one, however, such as a farmer would make through his farm for the convenient working of his holding, it would be included in the total area valued, and would then be also valued as an improvement.
That is a fair thing -
Improvements can only be valued to the extent to which they increase the selling value of the land. Sometimes an owner will expend his capital and labour injudiciously, and the result will prove detrimental to the land instead of being an improvement.
How would that case be covered?
– From what is the honorable member reading?
– From the New Zealand Year-Book, though I believe it is not the latest issue.
– It does not seem quite to accord with the Act.
– In any case, what has it to do with the Bill ?
– I understand that, when the honorable member for Kooyong was introducing a land taxation measure in another place, he quoted largely from New Zealand experience.
– But the honorable member’s quotations have nothing to do with the measure before us.
– Had the honorable member been here during the morning, he would realize that the quotations have very much to do with the matter under discussion. I was not aware that this was the practice in New Zealand when I spoke this morning, but I find now that my contention is amply supported. Further -
Some lands hold grass better without being first ploughed than they do after the plough. The effect of ploughing in such cases would not be to improve the selling value. Some improvements, such as ornamental shubbery, orchards, lawns, vineries, &c, rarely increase the selling value to the full extent of their cost, and should therefore be valued accordingly.
I urge the Attorney-General to make it absolutely plain that no deduction shall be made for expenditure on public roads.
– I was considerably surprised to hear the Attorney-General state that the, amendment he had previously foreshadowed did not allow of any deduction for expenditure by an owner or occupier in making improvements, such as drainage or road construction, adjacent or adjoining his property. We know well that, in order to ascertain the unimproved value, we cannot go back to the original price, seeing that the land would then be in a state of nature, and of very little value indeed. There are districts in my own constituency devoted wholly to wheat and wool-growing, and there the land has been improved to the extent of go per cent, through the corporate efforts of the people who cultivate it. It is true that a railway in their midst is paying interest, but their individual and corporate efforts in making improvements, and bringing the land into a high state of cultivation, have brought about the present improved and unimproved value. These people are not dependent “on the local community for the consumption of their produce, the whole of which, probably, is exported. But, as to what are improvements and what are not, it seems to me that the present Government, in confining the deductions to individual holdings, are going in the face of the experience of New Zealand, which has been referred to by the honorable member for Maribyrnong. ‘We have had experience in every State of the Commonwealth in regard to land values, both capital and unimproved. But New Zealand, it will be admitted, has had even more experience than ourselves. In the Dominion, the graduated land tax is possibly on a more scientific basis than is the case in any of the Australian States. The land legislation there shows that land valuation has been brought to a very high pitch of efficiency ; and I regret to say that the Bill before us does not provide, as in the case of the Dominion, for a ValuerGeneral, whose duty, with his staff, it is, not only to value every block of land, but to prepare a list of the valuations for distribution, under proper supervision, throughout the country. The experience of New Zealand in this most difficult work does not bear the interpretation placed upon it by the honorable member for Maribyrnong. What the honorable member has quoted has reference only to valuing the improvements on the land, but there is a still wider provision in the New Zealand Act, declaring that the value of improvements shall not include “ work done, or material used, on or for the benefit of land “ by the Crown, or by any statutory public body, unless such work has been paid for “by the contribution of the owner or the occupier for the purpose.” That is exactly the case we are discussing. I am sure honorable members will admit that New Zealand is a most democratic country, and that they regard with pride the wonderful success of the legislation there, particularly that relating to land. We are told that, if we allow the individual contribution of the owner or occupier to be taken into account in connexion with works adjoining his land, we might as well make a deduction in the case of the rates paid to the municipality. But I find that the New Zealand Act provides that “ payment of rates or taxes “ shall not be deemed to be “ a contribution within the meaning of this definition.’’ That really meets the whole position; and, under the circumstances, the AttorneyGeneral might well pay regard to the claims which have been made ‘under this head.
.- It appears to me that we are somewhat wasting time, seeing that the great majority, of the cases referred to by honorable members opposite would come within the exemption under the Bill.
– That is not so.
– Honorable “ members know that much more of this co-operative work is done by men who hold land under £5,000 in value than by men with larger properties.
– The cases I have in my mind do not come within the exemption.
– In any case, we are on dangerous ground when we go outside the land itself ; and the original definition is the safer provision. I know something of country interests, and how private owners have to go out with axes and clear tracks from their holdings in order to reach the main roads. Then, again, owners may find it necessary, even at a considerable distance from their holdings, to construct a bridge, for example, and two or three neighbours may or may not join in the work. The allowance that would be necessary in such a case might be small, but it would entail valuation and lead to endless difficulty. Who is to say what is the real meaning of “appertaining to”? I have never heard of overvaluation, except in very odd cases, under any of our present taxation systems. In Victoria the valuations are certainly under.
– Is the honorable member referring to municipal valuations?
– Yes; but under the system of land taxation in Victoria, which, I admit, is very unjust, we have undervaluation in the same way. There is wide room for honest difference of opinion in regard to the valuation of land, and it is just as weil to face the fact. A man who desires to dispose of his land will endeavour to keep it at a high, and even fictitious, value, while, of course, the buyer takes quite an opposite view. After all, it is a matter of opinion, and land may be worth more to one man than to another. One man will refuse to sell land at a price that would be accepted by another man for land of the same quality ; and all this is quite in accord with human nature and sentiment. I have no doubt that the Commissioner, in valuing land, will make some allowance for cases where works of the kind referred to have been carried out.
– Could he do so?
– I think he would do so.
– But, under the clause as it stands, could he do so?
– Yes. We cannot get into the mind of the Commissioner, and determine by what he is actuated.
– But he must obey the law.
– And he would be honestly obeying it if he did what I suggest.
– I disagree with the honorable member. The Commissioner, desiring to be absolutely fair, might possibly say that, in certain cases, something that had been done in the way of improving land, although not actually on the land itself, should be taken into consideration. When we propose to take into account the construction of roads, we touch most dangerous ground. A year or two ago, I read an interesting article by the President of the Cyclists’ Association of the United States of America, in which he showed the great loss which the country had suffered, in the aggregate, owing to the failure to keep certain portions of main roads in order. For instance, a well-made macadamized road adjoining a farmer’s land would be a mere waste of money, so far as he was concerned, if between his land and the market there were a stretch of road that was practically impassable.
If allowance is to be made for a road immediately adjoining a block of land, where shall we find ourselves? As we measure the strength of a chain by its weakest link, so we must measure the efficiency of a road by taking into account the worst part of it. If we make our intention clear by the use of words showing that the improvements must appertain to the land, we shall go far enough; but, if the construction of roads is to be taken into consideration, we shall have complications, trouble, and litigation. Our only safe course is to keep to improvements upon the laud. In connexion with small allotments, there will not be so much of the co-operative work which occurs in connexion with large estates. I think that it would be safer to keep to the original wording of the paragraph, unless the AttorneyGeneral can draw a distinct line as to what our intention actually is in this regard.
– The honorable member who has just resumed his seat, and the honorable member for Maribyrnong, have argued upon the basis that the desire is to exempt from unimproved value all money spent on roads by municipal bodies, or out of public funds.
– No; by private individuals. There is no quarrel as to roads made out of public funds.
– The honorable member for Maribyrnong specially referred to money spent by municipalities out of public funds.
– And recouped them by private individuals.
– It has not been suggested by the honorable member for Coolgardie, who introduced this question, that such a thing should take place. The law under which a vast number of suburban streets have been constructed in Victoria is that it is competent for municipalities to construct roadways, and to apportion the cost amongst the owners of the various holdings abutting thereon. The owners are forced to make a contribution towards the construction of unmade roads. In such circumstances, the municipality itself is the mere instrument for the purpose of making the roads, and the money is contributed by the owners of the property for the benefit and improvement of their ownproperty. As the honorable member must know, under the New Zealand Act there isa special exemption of such expenditure. Why should it not be so? A man so situated cannot help himself. Whether he desires that a road shall be constructed or not is quite beside the question. It is for the local governing body to determine whether an unmade road is technically a nuisance or a menace to public health, and if it exercises a reasonable discretion and determines that it is essential that it should’ be made, it has to be made. That is the practice throughout Victoria, and no doubt it obtains elsewhere. When we realize that all the improvements due to the construction of a road in such circumstances are brought about by private contributions, surely it is reasonable that some allowance should be made.
– All railways have been made by private contributions in the shape of taxes.
– That is where the honorable member misconceives the intention of the honorable member for Coolgardie. No one contends that roads and other improvements made by the expenditure of money contributed by way of taxation should be allowed for in determining the unimproved value of a property. In New Zealand all private contributions towards the making of improvements are allowed in the assessment of the unimproved value. Therefore, is it not fair, since this Bill is largely founded upon the New Zealand Act, that the exemptions contained in that Act should be embodied in this measure?
– The practice in New Zealand is contrary to what the honorable member says it is.
– It is not; the honorable member ‘for Wimmera quoted from the Act showing that all contributions to municipalities towards the construction of roads can be deducted.
– But did he read the practice?
– No, he read the law ; and we may take it for granted that the practice must follow the law.
– Not necessarily.
– It is not likely that the law will be disregarded if it declares in express terms that these moneys are to be deducted.
– It is not likely that the Year-Book would contain an untrue statement.
– I do not think that the statement in the Year-Book is inconsistent, but the law on the subject is very specific. Let me refer to another matter quite apart from the private contribution to the construction of roads made by municipalities, and that is the recognised practice of making roads, drains, and other improvements in connexion with a subdivision. People ought to be encouraged to do that.
– Why? A man who makes those improvements would be paid for them. Would the honorable member pay him twice?
– But the man who purchases from him purchases those improvements, and has a right to say, “ Since the original owner could have deducted the cost of those improvements, I ought to be allowed to deduct them.”
– If it is an improvement which the man who buys can sell again, yes; if not, no.
– A man cannot purchase a public roadway.
– A road so constructed might be called a public roadway, but it is made by private capital. The purchaser of an allotment in such a subdivision purchases the benefit of the expenditure of private capital, and if the original owner could have a deduction made in respect of it, why should the man to whom he sells be denied the same benefit?
– A road might be a public one even though the fee-simple remained.
– Of course, because it is dedicated to the public.
– If the fee-simple remained it would be clear under the clause, because it would come within the word “ thereon.”
– No ; because, although the fee-simple remains, it is merely nominal, the roadway being dedicated to the public.
– But the municipal council has full control.
– What happens is that after a street has been made by private contributions it is proclaimed a public roadway. That is a statutory provision, and since the law of New Zealand recognises this fundamental principle, why should we not be equally generous?
– Would the honorable member make an allowance in respect of the original cost of the roadway, or would he value it according to its actual condition at the time of assessment?
– I would allow for the reasonable value of the improvements.
– A lot of arbitrators would be required.
– I do not think so. The honorable member for Darling also contended that it was not fair to allow for any expenditure outside the land itself, and thought it advisable to go back to the original terms of the paragraph. That is scarcely a reasonable contention. Take a very common case where the owners of property within a large area are suffering because of the swampy nature of the land, and all join together for the purpose of draining it. The land, which hitherto was of very small value, is made valuable by reason of that expenditure. Is it not reasonable in those circumstances that some allowance should be made for the drainage expenditure incurred to secure those results ? That is the class of case that we contend should be allowed for, and the Attorney-General will do well to endeavour to recast this provision with a view to following the lines laid down by the New Zealand Act in this connexion.
.- The more the discussion proceeds the more advisable does it appear to exclude roads altogether. If we are going to deal with the class of road alluded to by the honorable member for Coolgardie, we shall have to include every other class of road throughout the Commonwealth. Take the case of a suburban paddock. It is increased in value in consequence of the spread of population from the metropolitan centre. The municipality does not at any time enter upon that land for the purpose of making roads, nor does it demand that the owner shall make roads, but the owner, for his own purposes, in order to make a profit, decides to subdivide the land and sell it in small lots. He cannot do that without making the roads, because it would be useless without them. We are told that in Victoria the owner is materially assisted iri doing that work with the taxpayers’ money. He is called upon only to pay for the cost of making the centre of the road, while he pays only half the cost cf making the footpaths and forming the channels, which in many cases is very much greater than the cost of making the road itself. It has not yet been pointed out to the Committee that, when those roads are made, they increase the value of the land, and the owner when he subdivides and sells gets paid, not only for his land, but, perhaps, ten times over for the money that he has spent in those improvements.
Once he sells, the whole thing goes over to the municipal body, and for ever after the ratepayers of the municipality have to maintain the roads and footpaths. It is not sufficient to make roads, channels, or footpaths. They have to be maintained for all time out of the rates contributed by the ratepayers. It would be exceedingly unwise to attempt to include any roads as improvements under this Bill. Any sane Commissioner, or his deputy, will take into consideration what are legitimate improvements on country lands. Can a channel for irrigation purposes be regarded as in the same category as a street made for subdivisional purposes to increase the value of private lands? The street is made for the purpose of individual gain, whereas the irrigation channel benefits, not only the individual, but a great number of others.
– That applies in both cases.
– No, because in the one case the man is upon the land and sticks to it, in order to produce wealth from it. In the other case the owner makes the improvements for the. purpose of parting with the land, and does part with it to great advantage.
– The real theory of all land taxation is not to tax improvements, and that would exclude roads. A house does not add to the value of the land, but it is not taxed. A road may add to its value.
– A house is such a palpable improvement that it is beside the question. We are dealing with what have been called invisible improvements, which give an enhanced value to land. I take it that honorable members on neither side of the Chamber desire to do anything calculated to bring the Act into ridicule, or to cause litigation. We must so frame it as to do justice to those who will come under it. The honorable member for Flinders seems to have forgotten that clause 62 gives the Commissioner powers so exceedingly wide that one sometimes wonders whether they are not altogether too great. If it can be shown to him that a wrong would be done, or a serious loss or hardship inflicted, he can remit a portion, or even the whole, of the tax. We must make the Act workable, and not put in conditions which would intensify the difficulty of elucidating the measure a hundredfold. The improvements exempted should be absolutely palpable, and the more the discussion proceeds, the more does it seem advisable to me to confine them to the “ improvements thereon.”
– I hope the Committee will come to a decision. We have been on the same point for the whole day. The Government take up the position that only those improvements which can be sold or conveyed by the owner of the property to another, and are quite distinguishable from the value of the land itself, shall be properly deductable from the whole value of the land. We, therefore, cannot entertain a proposition to allow the value of these communal efforts, no matter how they aic disguised, to be deducted. They are communal efforts, and there is no difference between the construction of a railway, to which each one of us contributes so much, by others, and its construction by ourselves. Whether we pay a man to do it or do it ourselves, the principle is the same. If I make a road in front of my door, instead of paying a tax to pay another man to make it, the principle and the effect are exactly the same. With regard to roads of that kind, or anything similar, we cannot make any concession. The proposal of the Government is to limit these deductable improvements to the “ improvements thereon, or appertaining thereto, and made or acquired by the owner or his predecessor in title.” That severely limits the improvements that can be deducted, and excludes all that very vague and ever-increasing “sphere of undertakings put before the Committee by a number of honorable members.
Amendment, by leave, withdrawn.
Amendment (by Mr. Hughes) agreed to-
That in the definition of “ Unimproved value” the words “ if any “ be inserted after the word “improvements,” and that after the word “thereon” the words “if any” be left out.
Amendment (by Mr. Hughes) agreed to-
That after the word “ thereon “ the following words be inserted : - “ or appertaining thereto, and made- or acquired by the owner or his predecessor in title.”
– I move -
That the words “ difference between the improved value and the unimproved value of the land,” in the definition of “ Value of improvements,” be left out, with a view to insert in lieu thereof the following words : - “ added value which the improvements give to the land at the dale of valuation, irrespective of the cost of the improvements.”
That will define the value of improvements in relation to land as the added value which the improvements give to the land at the date of valuation, irrespective of the cost of the improvements. It is very necessary to differentiate most clearly between the cost and the value of an improvement. Otherwise, a man may say, “ It cost me £1,000 to put up this house,” when the house may not be worth ,£100. Whatever the improvement is worth, and no more, is to be deducted.
.- The Attorney-General has got on to dangerous ground in putting in the amendment just made. The theory of land taxation is that you are not to tax improvements. It is not the addition to the value of the land that we are to take into account. Supposing a man constructs a road beside his land. That is not an improvement of which you can assess the sale value. Hence there is no necessity to exempt it at all. We never dreamt of exempting that. But, supposing there are two blocks of land, each worth £10 a foot, on one of which there is a house, and on the other there is not. The house does not add one iota to the value of the land as defined for taxation. It is the aggregation of population that does all that. You do not put a penny on to the value of the land by putting up a house on the block, and the Bill says you are not to tax improvements, and all through the morning we have been mixing up the two things. I think the Bill as it stood was all right, or that if we had added the word “ thereto,” it would have done no harm. In clause 24 we give the same value to the improvements on the compulsory purchase of them. We actually say there that the sum total is to be determined by adding the value of the land, which is constant, except where there is an increase of population, to the value of the improvements. In the South Australian Act there is no reference to the value of improvements, because compulsory purchase is not provided for. This provision is put in only so that the man may, on the compulsory purchase of his land, get the value of the improvements, as well as the value of the land itself.
– The amendment was not necessary as the definition stood, but it is necessary as it has been amended, because now we are dealing with improvements that are off the land, and have a separate existence; and therefore we must take their value, and not their cost. Improvements add to the value of land, but not to its unimproved value. I hope that the Committee will accept the amendment.
– Two notices of amendment have been given ; one by me, and the other by the honorable member for Richmond. My amendment embraces the New Zealand definition, but I understand that that of the honorable member for Richmond may be more acceptable to the Government, and therefore I shall give way to him.
.- Has the Attorney-General moved his amendment because of the amendment previously made?
– It is a necessary amendment now.
– How docs it become necessary ?
– Because a number of improvements have been brought into consideration which may not be. on the land itself.
Amendment agreed to.
Bill returned from the Senate, with a message intimating that the Senate no longer insisted on its amendment, and agreed to the consequential amendment of the House of Representatives, and the further necessary alterations in the totals in the Bill.
Bill received from the Senate, and (on motion by Mr. Hughes) read a first time.
Motion (by Mr. Hughes) proposed -
That the House do now adjourn.
– The Department of Home Affairs is giving advertisements to newspapers which hitherto have not participated in Government advertising to any large extent, and I desire to know whether the Minister, in view of this new departure, will consider the claims that country newspapers have to a share of Government patronage ?
– What is the departure?
– Advertising in newspapers which have hitherto not participated.
– Weekly newspapers?
– What is the name of the newspaper referred to by the honorable member for Laanecoorie?
– The Labour Call. There is quite a large number of well conducted newspapers in the country whose proprietors find it hard to make both ends meet ; and seeing that the ‘ ‘ good things “ are now to be more freely distributed, I venture to make a claim, on their behalf, for a share.
.- The honorable member for Laanecoorie has made rather an unusual request. As an old newspaper man from the country, I know that Government advertisements, whether Federal or State, if they refer to the particular locality in which a newspaper is published, are inserted in that newspaper, or, if not, it is regarded as very unusual. But to suggest that general advertisements of the Government should appear in country newspapers is to suggest an expenditure that would not be at all warranted.
– I should like to supplement the remarks of the honorable member for Laanecoorie by asking whether such important newspapers as the Leader, the Weekly Times, and the Australasian will also share in these advertisements ? If the Labour Call is to be the only weekly paper in Melbourne to receive Government advertisements, it is certainly a departure. The honorable member for Laanecoorie has based his suggestion on a plea of which I do not at all approve, namely, that country newspapers have a difficulty in making ends meet; but I should like to know why the Labour Call is to be selected out of the whole of the Melbourne weekly papers to receive such advertisements?
– The suggestion of the honorable member for Laanecoorie involves a serious innovation, which would certainly mulct the Commonwealth in considerably increased expenditure. When I was Postmaster-General I was asked several times to authorize advertisements in a large number of weekly newspapers throughout Australia, such as the Bulletin, the Sunday Times, and others.
– What of the Mining Standard ?
– I was confronted with the problem that if I began to give advertisements to one newspaper, every, newspaper would demand a share in the privilege, and that would involve a great addition to the advertisement bill.
– It is about time we got some share of the advertisements, and we are going to have it, notwithstanding all the complaints.
– It would be just as well, in the interests of fair play, and to avoid anything like favoritism, to establish some rule, so that honorable members and the newspaper proprietors would know what to expect, and there would not be this miserable scramble for advertisements.
.- It is a great pity that the honorable member for Bendigo, when Postmaster-General, did not put his professions into practice.
– I did not approve of giving these advertisements.
– Is that so? The hon- 01 able member might have explained why the Mining Standard was the only weekly newspaper in Melbourne which did receive such advertisements.
– Are the advertisements still appearing in the Mining Standard I
.- The honorable member for Laanecoorie deserves credit for directing attention to what may prove a serious departure in the practice of advertising of very considerable importance, and may involve the country in enormous expense. There is a multitude of small weekly newspapers in Australia; and as it is very difficult to discriminate as to which should receive Government patronage, this innovation may eventually entail the country in enormous expense. I found, when in office in 1904, that the then existing practice regarding advertising led to extravagant and unnecessary outlay. I then directed that the lengthy advertisements usually inserted in the daily press should be curtailed, and a short notification substituted, informing persons interested that the full particulars would be found in the Commonwealth Gazette. That was the practice initiated and carried out when I was Postmaster-General.
– Did the honorable member pay for the notification in the newspapers ?
– Certainly ; but the outlay was small compared to what the other practice entailed. Unless rigid supervision is exercised, the Government will find newspaper advertising absorbing a good deal of money without any adequate return. I do not presume to say that advertisements should not be given to such journals as the Labour Call - a good deal depends on whether a newspaper circulates amongst those whom it is desired the advertisements shall reach. But if other considerations are to have weight, then the organ of the Employers’ Federation, Liberty and Progress, is entitled to equal patronage. No matter how powerful a party may be, it should not exclude from purview the fact that it represents the whole people, and that every side is entitled to fair play. To illustrate this, let me recall the indignation we felt, when in Opposition, at the “ gagging “ tactics of the then Government. Now that we have changed places, we will, I hope, remember our feelings at the time I refer to, and display a magnanimous spirit. It may be well to have a giant’s strength, but it may not be always well to use it as a giant.
– Does the honorable member not think that it is fair tot “ Let the doctors taste their own medicine ‘ ‘ ?
– I do not know that the “ doctors “ have administered any “ medicine “ to us.
– By Jove, have they not.
– I forgot for the moment that the reference is to the honorable member for Laanecoorie when Speaker; but I do not desire to refer to the past. I impress on the Government that this question is well worth investigation, either by Ministers or by a Select Committee.
– My opinion is that, on the whole, the Government advertisements are fairly well distributed, and that no great exception can be taken.
– The honorable member is one-eyed, all right.
– I can only hope that the honorable member himself has two eyes. If we were to act on the suggestion conveyed in the persistent and disorderly interjections of the honorable member-
– Now then, no lecturing !
– If we did accept the suggestion, it would lead to the worst form of Tammany in the Commonwealth.
– That is what we have had a taste of!
– Then the honorable member has not done his duty in not uncovering it
– I have been trying to uncover it all my life.
– No one has ever heard the honorable member say a word about this form of it until to-day. He need not be so righteously indignant.
– Now then, no wowserism !
– The honorable member for Bourke became perturbed immediately this matter was mentioned, though I do not know why. We have not heard a sound from him all the week, but the moment the Labour Call is mentioned he becomes quite nervous, and immediately asks a question concerning some other journal. If anything wrong has been done in the past it should be rectified. The Labour Call should have just the same treatment as any other bona fide newspaper, no more and no less.It is not a matter of magnanimity, as the honorable member for Coolgardie suggested just now. No one on this side of the House wants magnanimous action of that kind. All that is needed is even-handed justice. Let all newspapers be treated alike. An inquiry into the whole matter could do no possible harm. I believe that there are some newspapers that at present do not get a fair share of this patronage ; but, on the whole, my impression is that there would be found to be very little complaint. I should like to know from the Prime Minister what business is to be taken next week.
– The Land Tax Assessment Bill.
– I am sorry to see such heat exhibited over such a little matter. A number of honorable members seem to suffer from a multiplicity of delusions. The fact of the matter is that the Labour Call circulates largely amongst working people who do the very kind of work referred to in the advertisement. I have carefully weighed the matter. Any case of this kind that is brought under my notice will be carefully considered. My principle is - treat all alike ; equal opportunities for all ; special privileges for none.
.- By way of personal explanation, I should like to say, with reference to what has been stated by the honorable member for Parramatta - although he has not been offensive in any way - that I have no financial interest in the Labour Call. I have only a friendly interest in the newspaper as a Labour journal.
– I wish to ask a question.
– Order ! The honorable member has already spoken.
Question resolved in the affirmative.
House adjourned at 4.23 p.m.
Cite as: Australia, House of Representatives, Debates, 23 September 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100923_reps_4_57/>.