House of Representatives
7 October 1910

4th Parliament · 1st Session



Mr. Speaker took the chair at 10.30 a.m., and read prayers.

page 4285

QUESTION

TELEGRAPH AND TELEPHONE LINES

Mr W ELLIOT JOHNSON:
LANG, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

asked the Postmaster-General, upon notice -

With further reference to the subject of questions asked on 31st August last -

Is it a fact that line inspection work within the metropolitan area, in New South Wales, is carried out on Saturday afternoons, Sundays, or during the annual leave period of officers?

Are officers, other than engineers, employed on the work of line inspection within the metropolitan area. If so -

What class of officers is so employed ?

What is the test of their efficiency ?

What is their rate of remuneration ?

To what division of the service do the officers belong who supply the details as to route, length of line required, cost of poles, &c, requisite for the compilation of estimates of line construction ?

(a) Who makes up the estimates of cost, and what means are taken to check the data supplied; upon which the estimates are based?

Does the actual cost of construction of telegraph and telephone lines generally approximate to the Departmental estimates for same?

What surveying work is carried out by the Departmental Surveyor in connexion with lines?

Mr THOMAS:
Postmaster-General · BARRIER, NEW SOUTH WALES · ALP

– Inquiries are being made, and the desired information will be furnished as early as possible. In view of the statement of the Acting Prime Minister that it costs a good deal to obtain the information sometimes asked for in this manner, I should be glad if honorable members would ask for such particulars by way of motion for a return.

page 4286

LAND TAX ASSESSMENT BILL

Motion (by Mr. Hughes) proposed -

That the Bill be now recommitted to a Committee of the Whole House for the reconsideration’ of clauses 3, 6, 7,11,12, 14,24.25,26,29, 31, 33, 34. 40, 42. 43, 44. 46, 49, and 61.

Mr GLYNN:
Angas

.- I suppose the intention is to recommit these clauses for general consideration, and not to confine the attention of the Committee to the amendments to be proposed by the Attorney-General, because there may be errors of drafting, or other matters, on which honorable members may wish to speak. There is no desire to go over questions that have already been threshed out. Clause 44, I understand, is recommitted only for the purpose of taking a vote. I notice that nothing has been done regarding mortgagors, and would remind the Attorney-General that he promised to favorably consider the suggestion that for two; three, or four years, perhaps, they should be taxed on the equity of redemption.

Mr Hughes:

– I shall be glad to meet the Committee in every way.

Mr GLYNN:

– The honorable member for Wilmot and myself also drew attention to the fact that in some cases if the value of annuities under existing settlements were capitalized, the reductions from the estates would be pretty large.

Mr Hughes:

– I have looked into that matter, and find thatit is dealt with in another clause, which I shall explain later.

Mr Groom:

– TheAttorney-General promised to recommit for the purpose of providing for the payment of witnesses’ expenses.

Mr Hughes:

– That is provided for by clause 61.

Question resolved in the affirmative.

In Committee: (Recommittal) -

Clause 3 (Definitions).

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I move -

That the definition of “Absentee” be left out with a view to insert in lieu thereof the following definition : - “ Absentee “ means a person who does not reside in Australia or in a Territory under the authority of the Commonwealth; and includes a person who -

is absent from Australia and such Territories at the time when the ownership ofhis land for the purposes of this Act is determined ; or

has been absent from Australia and such Territories during more than half of the period of twelve months immediately preceding that date, unless he satisfies the Commissioner that, he resides in Australia or a Territory under the authority of the Commonwealth; but does not include a public officer of the Commonwealth or of a State who is absent in the performance of his duty.

I think that that definition will meet the views already expressed by the Committee. It includes officers on public duty.

Mr Groom:

– Does it include officers of the Territories, too; the LieutenantGovernor of Papua, for instance?

Mr HUGHES:

– An officer of a Territory is an officer of the Commonwealth.

Mr PALMER:
Echuca

.- I think that paragraph a might well be left out of the proposed definition, because it might lead to the harsh treatment of some person absent on a short visit to the Old Country, or even to New Zealand, at the time when the ownership of his land was being determined for the purposes of the tax. Paragraph b,too, might well be, amended, because a person on a trip to the Old Worldmight legitimately be absent for more than “ half of the period of twelve months “ without being an absentee.

Mr FAIRBAIRN:
Fawkner

– The proposed definition very fairly covers the term “ absentee,” though I do not know why the Minister clings so tenaciously to paragraph a, which, as the honorable member for Echuca has shown, may cause hardship to persons who may be away in New Zealand at the time when the ownership of their land is determined, but whose absence may.be for a few days only. It would do no harm to leave put that paragraph.

Mr Fenton:

– The paragraph is qualified by the words “ unless he satisfies the Commissioner that he resides in Australia.”

Mr FAIRBAIRN:

– In any case the paragraph would only catch a few people, and why bother them? If a man is away for six months he has to satisfy the Commissioner that he is a resident.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– There should be nodifficulty about this provision. The honorable and learned member for Flinders pointed out on a previous occasion that the definition is much more liberal than that in the Victorian Bill. A man may be out of Australia for twelve months, and still bea resident, even for the purposes of the Electoral Act, to say nothing of an Act of this sort under which very much less evidence is required to establish his residential qualification. As to the statement of the honorable member for Fawkner about a man being absent on any particular day, the difficulty is that this measure contemplates returns being made on a specified day, and we have to find out from the person concerned where he was on that day. If the honorable member wants an assurance that it shall be provided in the regulations that the person shall be asked to say, not only where he was on that particular day, but where he had been for the previous six months or so, I shall be glad to give it to him. I should think that would meet the honorable member’s objection.

Mr GLYNN:
Angas

.- The suggestion which we made before was that a period of six months might be taken. Does the Attorney-General mean to substitute absence for six months for absence on the day of assessment?

Mr Hughes:

– I said that one of the questions on the paper to which the taxpayer would be asked to give a reply would be, “ Have you been resident in Australia for the last six months “ ?

Mr GLYNN:

– If the Attorney-General sticks tenaciously to the form of the clause, it would be as well to have something in the return to enable the taxpayer to state that he was absent on that day, but not for change of residence.

Mr PAGE:
Maranoa

– The whole question hinges on the meaning of the word “residence” in connexion with which we have had a peculiar experience under the Queensland Electoral Act. There have been about twenty definitions of what “residence” means, and the honorable member for Echuca has directed the attention of the Attorney-General to that very point. If it means in this Bill what it means in the Queensland Electoral Act, then directly a man is away for one day oyer the six months, he will be an absentee.

Mr Hughes:

– It does not mean that, of course.

Mr PAGE:

– It doesnot matter what we say it means. It is a question of what the Court says it means. Directly I was six. months out of Queensland doing my duty for the State of Queensland in this Parliament, I was struck off the roll for non-residence.

Mr Groom:

– The honorable member was improperly struck off. He was a resident all the same.

Mr PAGE:

– The only chance I have of proving my qualification of residence is by going to the Court. We should not put the land-holder, any more than the man who wants his name on the electoral roll, to that trouble.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– The honorable member can, of course, create a number of difficulties. Apparently he is an absentee because he does not now reside in Queensland.

Mr Page:

– I do. That is my home.

Mr HUGHES:

– Then the honorable member is a singularly undomesticated man. If that is his home, and he persists in remaining away from it, his conduct is calculated to create a public scandal. I had quite another opinion of the honorable member. If a man goes to Great Britain and remains there for six, eight, ten, or twelve months, he can still satisfy the Commissioner in exactly the same way as the honorable member can satisfy the Court. Under this Act the person concerned has only to satisfy the Commissioner. That is a very different thing from satisfying a Court. Of course, if the Commissioner decides against him he can go to the Court.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

.- Let me point out to the Attorney-General how unfair paragraph b is. It says that if a person has been absent from Australia, and its territories, during more than six months immediately preceding the date of assessment, he will have to pay the land tax as an absentee, which means a much larger rate of tax than he would have to pay as a resident. Six months is not sufficiently long, and the Attorney-General might very well make it twelve months. A man leaving Australia on business leaves his business behind, and leaves his wife and family, his home goes on just in the same way as usual, but it takes him, perhaps, twelve months before he can complete what he has to do in the Old Country. His home is really in Australia, and yet, if he is absent for more than six months, he becomes an absentee. I do not think that is fair. When I visit the Old Country I do not like to do the trip in much less than twelve months. I am absent from Queensland practically for more than six months’ every year, and, in the circumstances, I should be considered an absentee.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I am very much astonished and grieved at the way in which honorable members evince a desire to remain away from home for long periods, and shocked to hear my fellow-countryman calmly asking for leave to stay away for twelve months, on the specious pretext that he does not want to be called an absentee, when it is obvious that that is his real intention. I think the provision, as it stands, is quite sufficient.

Amendment agreed to.

Amendment (by Mr. Hughes) proposed -

That the definition of “ unimproved value “ be amended by leaving out the word “ actual “ before the word “ improvements.”

Mr GLYNN:
Angas

.- Having occasion on Monday to look into the Taxation Acts, for professional purposes, I noticed that in South Australia in 1908, after an experience of fourteen or fifteen years of the working of the Act, a definition of improvements was introduced. I stated on a previous occasion that there was no definition of improvements in the South Australian Act, but I confess thaf it escaped my notice that two years ago a rather comprehensive definition was inserted.

Amendment agreed to.

Clause 6 (Secrecy to be maintained).

Mr HUGHES:
Attorney-General · WEST SYDNEY, NEW SOUTH WALES · ALP

– I ask the Committee to leave this clause out. It has been decided that secrecy is not necessary, and this and the next clause are no longer required, because all the officers, except the Commissioner, will be under the Public Service Act, and the regulations under that Act provide for al! the secrecy necessary.

Clause negatived.

Clause 7 (Oath of fidelity) negatived.

Clause 11 -

Land tax shall be charged on land as owned at noon on the thirtieth day of June immediately preceding the financial year in and for which the tax is levied.

Provided that an owner of land who, after the thirtieth day of June, but before the thirtieth day of September, One thousand nine hundred and ten, has sold part of the land or has sold all the land to different purchasers, shall, if the Commissioner is satisfied that the sale was bond fide and not for the purpose of evading the payment of land tax, be separately assessed for the year ending on the thirtieth day of June, One thousand nine hundred and eleven, in respect of the land so sold to any one purchaser, and be charged with land tax in respect of that land as if it were the only land owned by him.

Amendment (by Mr. Hughes) proposed -

That after the words “ sold,” line 8, the words “ or agreed to sell or conveyed “ be inserted.

Mr AGAR WYNNE:
Balaclava

– There are two classes of title to land in Australia. Under what is called the old Act the word “ convey “ is used, while under the Torrens Act the word “ transfer “ is used. I see nothing in the interpretation clause to show that “ transfer “ and “conveyance” are synonymous, and I suggest that the Attorney-General should include the word “ transferred “ in the amendment. Otherwise there might be some difficulty. I move -

That the amendment be amended by inserting the word “ transferred “ after the word “ sell.”

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– There is no necessity for the amendment proposed by the honorable member for Balaclava. What is a “ conveyance “ but a “transfer” ?

Mr Agar Wynne:

– The words may have the same meaning in a general way, but technically they have different meanings.

Mr HUGHES:

– I do not know any technical difference, and I submit that every thing is covered by the word “ conveyance.”

Mr AGAR WYNNE:
Balaclava

– I may say that property may pass without a conveyance. This is simply a conveyancing question, and any one who has had experience in the conveyance and transfer of land in the State of Victoria will know that the word “transfer “ is applied to the Transfer of Lands Act, while the word “ conveyance “ applies to the old Act. I have no intention other than to make the matter quite clear; and I am quite sure that, unless my suggestion is acted upon, there will be complications and litigation. I think that the honorable member for Gippsland will be able to give the Attorney-General further assurance on the point.

Mr WISE:
Gippsland

.- There is no doubt that the word “transfer” applies to all dealings in the nature of a conveyance under the Transfer of Land Act, and, I suppose, applies in the same way under equivalent Acts in the other States. Nearly the whole of the land in Victoria is under the Transfer of Lands

Act, and we never “ convey,” but always “transfer “ - it is merely a technical term.

Mr FAIRBAIRN:
Fawkner

.- I do not think that the amendment of the Attorney-General quite covers some cases which I brought under his notice a short time ago. These were cases of bonâ fide sales made before 30th June, but, with a view to making the terms as easy as possible, a deposit of10 per cent. had been accepted. Will such cases be exempt from the operation of the clause?

Mr Hughes:

– All that the parties have to do is to satisfy the Commissioner in the usual way that the acceptance of the smaller percentage was not for the purpose of evading the Act; the amount per centum is merely one of the things that show bona fides.

Mr FAIRBAIRN:

– I was afraid that these people would not be exempt, although they had tried to give the purchasers light terms.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– If the transfer is bonâ fide, it will come under the clause, irrespective of the amount paid on deposit. As to the objection raised by the honorable member for Balaclava and the honorable member for Gippsland, I submit that there is no necessity for the word “ transfer.’

Mr Agar Wynne:

– I can assure the Attorney-General that a “transfer” is not a “ conveyance.”

Mr HUGHES:

– “Conveyance” has the effect of passing land, and it is the wider generic term, including all the instruments necessary in such transactions.

Mr GROOM:
Darling Downs

.- I previously asked the Attorney-General whether he was satisfied that the clause was so drawn as to make it clear’ that mutual life assurance societies, which are made the trustees for the shareholders, will be exempt as the shareholders are. The intention is to exempt the offices and other buildings which the societies hold as trustees, but there is a preceding clause which makes the trustees personally liable for the tax. I should like to know whether the Attorney-General will look into the drafting to see whether the intention has been carried out of exempting both trustees and shareholders?

Mr Hughes:

– I shall be glad to do that.

Amendment of the amendment negatived.

Amendment agreed to.

Amendments (by Mr. Hughes) agreed to-

That the word “ purchasers,” line 9, be left out, with a view to insert in lieu thereof the word “persons”; that after the word “sale,” line 10, the words “ agreement or conveyance “ be inserted ; that after the word “ sold,” line 15, the words “ or agreed to be sold or conveyed “ be inserted ; that the word “ purchaser,” line 15, be left out, with a view to insert in lieu thereof the word “ person.”

Clause 12 -

The following lands shall be exempt from taxation under the Act, namely : -

all land owned by or in trust for a public charitable or public educational institution, if the institution, however formed or constituted, is carried on solely for public charitable or public educational purposes and not for pecuniary profit; or

all land, owned by or in trust for a religious society, the proceeds whereof are devoted to the support of the aged or infirm clergy or ministers of the society or their wives or widows or children…..

Amendment (by Mr. Hughes) proposed -

That the following new paragraph be inserted : - “(ca) all land owned by any building society registered under a State Act relating to building societies not being land of which the society has become owner by foreclosure of a mortgage.”

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- So far as I can see, the Attorney-General, although he promised to consider this clause as applying to co-operative societies, has not done anything in the matter. In New Zealand such consideration as I have suggested is shown to producers who are acting in co-operation ; and I do not see why we should not follow that example. I know that the New Zealand Act refers more particularly to an income tax ; but in my own district the co-operative effort has been carried further than in any other part of Australia, and the societies will be very heavy taxpayers. Their operations are extensive, and they are amalgamated with other societies, which will be dragged in with them ; and, between one thing and another, unless the societies are exempt, the Bill will apply to some 7,000 or 8,000 farmers who are combined simply for their own protection. Whatever ideas prompted this Bill, I am sure there was no idea of interfering with such efforts on the part of the producers. The farmers have established a large number of factories in the district, and these, having been amalgamated, have carried their efforts further afield. They have practically their own floor in Sydney, where they have established a bacon curing and also a box factory. In many cases farmers hold shares in each of these different institutions, and I am almost certain that under the aggregation clauses of the Bill the whole of these companies will be treated as one for the purposes of the tax.

Mr West:

– If they are registered under a State Act they must be exempt.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– They are not exempt, for they do not come within the provision relating to building societies.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– Are they exempt under the New South Wales Act?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– They have to pay the shire tax. My point, however, is that these farmers, having carried their co-operative efforts so far, are likely to be heavy taxpayers under the Bill. I admit that the question is one for the lawyers to decide, but I am sure that the Government do not desire to penalize co-operative effort on the part of the farmer. If that is their object, it is certainly news to me. I ask the AttorneyGeneral to give further consideration to the matter, and at least to exempt cooperative societies from the aggregation clauses of the Bill.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I am unable to accede to the honorable member’s lequest, and believe that he exaggerates what will be the effect of this Bill upon co-operative societies in his own district. I do not think that the tax will fall upon them.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The whole of their land exceeds the unimproved value of £5,000.

Mr HUGHES:

– While we are very anxious to exempt all sorts of legitimate, cooperative enterprises - for the Government have a special leaning towards them - I cannot see that the amount of taxation the co-operative societies are likely to pay can be a very serious item to them. To begin with, they must have land of an unimproved value exceeding £5,000, and must come under either the companies clause or that relating to joint owners. If the honorable member can furnish me with particulars relating to the co-operative societies in his district, showing the extent to which they go, as well as the extent to which he desires an exemption, I promise that the matter will receive consideration when the Bill is before another place.

Mr SAMPSON:
Wimmera

.- I should like to emphasize the statement made by the honorable member for Richmond in respect to the exemption of co-operative societies. We know that the Government are in sympathy with such organizations, and we should endeavour to encourage them as far as possible. I would draw the attention of the Attorney-General to the existence of large co-operative companies in Mildura, and to the fact that they have extensive agencies and properties. A cooperative society for the freezing of meat for export has been started in the Wimmera with a capital of £60,000, and it is probable that as soon as it has established its freezing works in one centre it will find it necessary to extend its operations over the whole of the northern part of Victoria.

Mr Bamford:

– Why should not a company be liable just as is an individual to pay taxation ?

Mr SAMPSON:

– From a strictly logical point of view it may be said that all should pay the tax, but it is necessary that certain exemptions should be made in order to foster the co-operative societies already in existence, and to encouragethe growth of new ones.

Mr CHARLTON:
Hunter

.- This is a very important question, and there is a good deal to be said in favour of the contention advanced by the honorable member for Richmond in regard to the exemption of co-operative societies. For the most part they consist of people having a mutual interest in the enterprise.

Mr Groom:

– There are many Civil Service mutual stores.

Mr CHARLTON:

– Yes. There is a co-operative store in my own district. There is now a movement on foot to amalgamate all such stores in New South Wales, and their land in the aggregate would have an unimproved value considerably in excess of £5,000. That is the position of co-operative stores doing business in settled districts, and the same statement will apply to co-operative societies carrying on operations in agricultural areas. They are putting their land, which is held in small areas, to the best use, but when aggregated it will be liable to taxation. If we are going to exempt building societies, which, perhaps, are more in the nature of speculative enterprises than are co-operative societies, we ought to make this exemption. Many people merely invest in a building society because of the higher rates of interest obtainable. I recognise, however, that it is fair to exempt such institutions, and I think that the principle should be extended to co-operative societies. If the Attorney-General were to provide for the exemption of all land owned by any building society or co-operative society registered under a State Act, I do not think any harm would be done; and I should be pleased if he would take a step in that direction.

Mr SPENCE:
Darling

.- In the suggestion just made by the honorable member for Hunter there are some elements of danger which I think he has overlooked. If we exempt co-operative societies registered under a State Act, we shall open the door to an evasion of the law. There are two kinds of co-operative effort. There is, for instance, what is known as the English democratic co-operative movement with an unlimited share list, each shareholder having only one vote, whilst there are registered in Australia cooperative societies which are similar to an ordinary trading company. For instance, we have the Civil Service Company, of New South Wales, which has not an open share list, and there is a movement afoot to form a wholesale society. That undoubtedly is a good idea. The several local co-operative societies will take shares in a company that will handle the wholesale end of the business, but that wholesale society will not be amalgamated with the others, and I do not think that the property held by it will be liable to taxation. I am not aware of the conditions prevailing in the honorable member for Richmond’s district, but from his remarks I infer that some of the local co-operative societies have an interest in other companies which he fears will bring them under the aggregation clauses of the Bill. I do not think that they are likely to become liable for taxation simply because of the formation of a wholesale society in connexion with them.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– If the shareholders in the two companies are identical, then the property of the two companies will be aggregated.

Mr SPENCE:

– Honorable members on this side are wholly in favour of cooperative effort. I am a rather enthusiastic supporter of the democratic cooperative movement, where there is mutual interest and an open share list; but many co-operative societies which have registered do not strictly conform to the true co-operative principle, which deserves to be encouraged. I know of no co-operative society in the strict sense of the term which is likely to come under this Bill.

Mr FENTON:
Maribyrnong

– I hope that the Attorney-General will not accede to the request of the honorable member for Richmond. Very few, if any, co-operative butter companies will come under the measure.

Mr Sampson:

– We should encourage the extension of co-operation.

Mr FENTON:

– I desire such extension; but it is not my opinion that the small amount of tax which some of the largest co-operative concerns may have to pay will prevent the movement from progressing by leaps and bounds.

Mr Tudor:

– Does the honorable member know of any co-operative butter company which will be taxed?

Mr FENTON:

– In this State, in my opinion, not one will come under the tax. There is not, in Victoria, a co-operative butter company so large as the Byron Bay company, which, I believe, is the largest of its kind in the world ; but at Colac we have two large factories, and I do not think that the unimproved value of the sites which they occupy, exceeds £2,000. If we exempt co-operative butter factories, we shall have to exempt other co-operative trading companies, such as co-operative breweries, of which there is a very large one in Victoria, and co-operative stores, like the Sydney, Civil Service store. I am a shareholder in a co-operative concern in the city, and in co-operative concerns in the country, and have no hesitation in saying that very few co-operative societies, composed of producers, will have to pay land tax. Quite recently, at Terang, the producers bought out one of the largest country storekeepers we have, paying £25,000 for his business and goodwill. I do not think that they will have to pay any tax on the unimproved value of their land, but I see no reason for exempting them any more than for exempting other trading companies.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- We have not to concern ourselves with the question whether few or many co-operative companies will be taxed. What we must ask is, “Will any be taxed?”

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Apparently, it is thought that where injustice is being done to a few only, it ceases to be injustice.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Precisely. Even were the Byron Bay company to be the only cooperative company to come under the Bill, my proposal would be a fair one. That company possesses three very valuable pieces of land, two of which have both river and railway frontages, and one a railway frontage and siding. The land was acquired a number of years ago, and has since increased in value. There are five other sites, and, therefore, it is likely that the unimproved value of the company’s land will be taxable. Furthermore, the company is amalgamated with a distributing company in Sydney, its shareholders holding a very large number of shares in the distributing company. It also has a smoking establishment in Sydney, and is interested in a boxmaking company there.

Mr Bamford:

– It is purely a trading concern.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Yes, but wholly cooperative, the shares being held solely by the producers, who send cream to the different factories. The farmers who established the original company have extended their operations into other districts than Byron Bay, and increased the number of factories. As they hold shares in other cooperative companies, probably, the whole of the co-operative movement on the Richmond river, will be taxed under the aggregation clause at the highest rate. This, of course, may prevent the extension of operations, because the acquirement of more property will not only increase the amount of tax, but also its rate. Do honorable members desire that?

Mr WEST:
East Sydney

.- The honorable member for Richmond has spoken of a large co-operative concern in his own electorate, but there are other cooperative concerns which I do not think he would wish to exempt from taxation. The largest buyers of wool, hides, and similar commodities in Sydney are an English co-operative company, whose capital is something like £4,000,000, which does a very large business, and has a big area of land at Botany. There is also a co-operative wool and pastoralists’ association in New South Wales, and a cooperative store, which, perhaps, has the biggest retail business in wines and spirits in Sydney. By purchasing a share in that company, at a cost of perhaps about £3, you can have liquor sent to your house with other groceries by the single bottle. None of the ordinary co-operative concerns would come under the Bill. Take those in the Hunter river district. Probably not the wealthiest of them holds land whose unimproved value is £2,000.

Mr Charlton:

– If they were amalgamated their holding of land would be much more valuable than that.

Mr WEST:

– Why should we exempt large co-operative trading concerns, and tax the ordinary business companies with which they compete? It must be remembered that a co-operative concern may register under the New South Wales Friendly Societies Act, and probably in cases in which the tax is likely to press heavily, trading companies will try to register as co-operative concerns if we grant the exemption asked for. The Byron Bay company is virtually a trading company, and should pay taxes like any other trading company. It is a wealthy concern, and I wish it further prosperity, because it does good to the district; but the Government is justified in taxing its wealth. It would be unjust to exempt that company from taxation and to tax its competitors.

Mr FAIRBAIRN:
Fawkner

– - I am pleased that the Attorney-General is considering the proposal to exempt cooperative companies. He might well go further, and exempt all companies. It is not generally known how small the average share holdings in our large companies is. For instance, the average holding in Dalgety and Company is only £700, and the average dividend per shareholder £47, while the average holding in the Bank of New South Wales, which has 3,221 shareholders, is only £800, and the average dividend per shareholder only £77. The honorable member for East Sydney complained the other day that in these times a poor man can never own a business, but there is nothing to prevent him from buying a few shares in a company. Industries are being more and more owned by large companies, and there is no reason why the workers should not buy shares in them, and thus become owners of the industries with which they are connected.

Mr West:

– They are very nervous about some of the companies, which are rather shaky.

Mr FAIRBAIRN:

– If they bought a considerable part of the capital, they could appoint their own directors, and manage the company themselves. I think that in that direction the solution of a great deal of our industrial trouble lies. I thought the workers regarded the companies as too strong and wealthy, and making too big profits, but I gather now, from the interjection of the honorable member for East Sydney, that the workers are nervous about them because they are paying such high wages that they are impoverishing themselves. That is quite a new view of the matter to me. The Attorney-General seems to be in a liberal frame of mind today, and I hope he will exempt, not only co-operative, but all, companies.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– No one can appreciate more than we on this side do the benefits of cooperation, but I am bound to say that cooperation seems a singularly effective way of becoming possessed of the good things of this world, if we are to estimate its general effects by the special results in the cases cited by the honorable member for Richmond. I understand that, in his district, it is the common practice for gentlemen who are, as it were, overflowing with good things as the result of one co-operative concern, to become members of another, and, having produced more wealth, to proceed to distribute it. That is an admirable idea, and, no matter how rich they get, they deserve it all. But, all the same, I would ask the honorable member what real difference there is between a co-operative company and a joint-stock company? If it comes to that, everybody is co-operating. All the profits of a joint-stock company are shared amongst the stockholders). The only question is how much each gets. He gets in proportion to his share, according to the amount he has invested, just like a member of a co-operative society, such as the honorable member has referred to.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– He does not. The profits are distributed according to the amount of produce that he puts through the cooperative company.

Mr HUGHES:

– He is paid for that. There are co-operative societies, like the Civil Service Co-operative Society of New South Wales, referred to by the honorable member for Darling - a fine, flourishing concern, magnificently managed - to which any one can go and buy goods, and the Society makes its profit in the usual way. The honorable member for Fawkner suggests that we should include the poor, struggling institution known as the Bank of New South Wales, and Dalgety’s, and other poor, helpless, wayside stragglers; and really there is no reason why they should not come in, for goodness knows they believe in co-operation stalwartly enough, and endeavour to practise it. If we merely put in “ co-operative societies,” I do not see what is to prevent any society becoming a co-operative one, and going clean through the Act. We have to be very careful, and I am afraid the amendment suggested by the honorable member will open the door too wide. I am, however, prepared to look into the matter, and to do anything that can be safely done. What the honorable member asks for is too much.

Amendment agreed to.

Amendment (by Mr. Hughes) proposed -

That the word “ public “ in paragraph d, wherever occurring, before the word “ charitable “ and before the word “ educational,” be left out.

Mr AGAR WYNNE:
Balaclava

– The amendment will be of no use unless the Attorney-General consents to leave out the words “ and not for pecuniary profit.” I mentioned on a previous occasion that, under the clause as drafted, all our public schools, convents, and other places would be liable to the tax. All the large schools belonging to the different churches charge fees for the education of the children. In the convents a large number of children are educated by the nuns. Those who can afford it have to pay fees, and under this provision all these religious bodies will be heavily taxed.

Mr FAIRBAIRN:
Fawkner

.- I wish to support the request of the honorable member for Balaclava for the omission of the words “ and not for pecuniary profit.” There are not a great many of these schools and other institutions, but I have in my mind one which has a very large playground used entirely for the benefit of the boys. The master receives the fees, and has to pay the expenses, and he just about gets a living wage out of it. It may be called a pecuniary profit, but it is a very small one in practically all these cases. If the clause is not amended the effect will be that those schools will really have to sell their large playgrounds. The Attorney-General might look into the question, because I do not think he intends to bring these educational establishments, some of them connected with churches, under the operation of the Act.

Amendment agreed to.

Mr GLYNN:
Angas

.- When the clause was previously under discussion, I gave notice to add, after “ pecuniary profit,” the words “ applied to other than such charitable or educational purposes.” That would accomplish what has been mentioned by the honorable members for Balaclava and Fawkner. It is dangerous to leave the words “pecuniary profit” unqualified, because they will apply _ to institutions which can still be charities, although a profit is made in some way or another. If they are charities, the question of profit really does not come in at all; but, although there have. been a number of decisions in England on the point, I confess that they are really inconclusive. Some of them declare that the application of the moneys ought to be the’ test - that so long as the profit is applied to the maintenance or development of the charity, that charity should be exempt. Take a refuge as an example. You cannot have a better charity: Suppose they do some work, and a profit is realized upon it, and all the money is devoted to extending their efforts, not a penny piece being used for any other purpose than the maintenance or development of the refuge. That is a true charity, but the question has been raised in some cases whether the fact that a profit is made does not alter the character of the institution. It is a pity to have any doubt upon the point, and I ask the AttorneyGeneral to accept my suggestion, if he will not strike out the words “ and not for pecuniary profit,” altogether. I know cases of religious communities, in which the sisters slave night and day, and deny themselves everything. It is the rule of their order that they are not to get their own meals until every person dependent upon them has been satisfied. In many cases they are kept down to half rations to do that, and it would be positively cruel if, under a measure like this, they were by legal construction excluded from the ‘benevolence that we think ought to be applied to them. I move -

That, after the word “ profit,” paragraph d, the words “ applied to other than such charitable or educational purposes” be inserted.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I do not think it would be wise to accept the amendment. The honorable and learned member admits that the authorities are not very clear as to what a charity does precisely mean, but I think it is perfectly clear that ‘ ‘ pecuniary profit “ does not refer, for instance, to fees received. The object of the charity has to be looked at. The mere fact that fees are received will not remove an institution from the exemption. Supposing there is a laundry attached to an institution, and a charge is made for the work done, I do not think it could be held for a moment that that would deprive an institution of exemption, provided that, viewed as a whole, it is a charitable institution. In the case of schools, again, fees may be received; and, indeed, I hold that the words “ pecuniary profit “ must be read according to the subjectmatter. Regarding the question in that light, I think the whole ground is covered by the clause; and the words proposed to be inserted might be held to give quite an extended meaning to the provision.

Mr GROOM:
Darling Downs

.- I take it that the words of the AttorneyGeneral show the spirit in which the Bill will be administered - that it will not apply to institutions, which, as part of their working, may carry on industries, the proceeds of which go to the support, of the institution? For instance, there are several large farms, or homes, in connexion with the Salvation Army, and the profits from the products of these are devoted to the institutions themselves, and not to private gain.

Mr Hughes:

– Of course, if an institution is a mere cloak for a business, the case is different.

Mr GROOM:

– No one could justify any exemption in such case ; there must be a genuine charity.

Mr Fairbairn:

– Or a genuine school.

Mr GROOM:

– Quite so. I suppose that if the fees or profits of a charitable institution or a school are devoted to a general fund, out of which salaries and so forth are paid, such institutions will be exempt.

Mr Hughes:

– That is the intention.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– I quite agree with the Attorney-General that the mere acceptance of fees will not deprive a charitable institution of its character; but I think he overlooks the state of things in connexion with a large number of both charitable and educational institutions. The words “or in trust for “ would imply that there is a legal person for whom the land is held in trust, but a man might hold money given to him for a certain purpose, and, within the meaning of an Act of Parliament, that would not be “in trust.” To illustrate what I mean, let us take the common case of property belonging to some particular church. In vernacular language, we may loosely speak of that property being held by the trustees of the church in trust, say. for a school ; but that is an entirely inaccurate use of language. The property is not held in trust for the school it is really in trust for all the persons who are members of the church, and who authorize or permitthe property to be used for a particular purpose. The funds of the church are applied to the maintenance of a school in connexion with which fees are charged to the pupils; but I agree with the AttorneyGeneral that such a fact would not prevent this being regarded as a charitable or educational institution. The property is not, however, held “ in trust,” because, if, in one year, there happened to be a surplus it would not belong to the so-called institution, but would belong to the church fund, and any deficit would probably have to be made up out of the same fund. In fact, the position is exactly the same as when trustees hold property for a church, which really means for all the members of the church, either with the consent of those members or under some statutory or other authority, to be applied to particular purposes. I ask the Attorney-General whether he does not think there ought to be some amendment of the clause dealing with this point ; because, otherwise, we may remove from the exemption such common cases as I have mentioned. In the case of the Melbourne Church of England Grammar School, for instance, there is a certain amount of property held by the trustees for the Church. That property is not held in trust for the Church of England Grammar School as a separate institution, because the Church might, from time to time, alter the destination of the fund. The Church happens to own a piece of land on which these schools are, and it permits its funds to be used where necessary in aid of the school. While I agree with the Attorney-General that the intention is not to deprive institutions of the benefit of exemption simply because they receivefees, the whole clause requires regulating to make it applicable to a large number of cases to which reference has already been made.

Question - That the words proposed to be inserted be so inserted (Mr. Glynn’s amendment) - put. The Committee divided.

AYES: 23

NOES: 29

Majority … … 6

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I move -

That after the word “ devoted,” paragraphe, the word “ solely “ be inserted ; and that after the word “ children “ the words “ orto religious charitable or educational purposes” be added.

The intention of this amendment is to meet various objections raised in Committee. These and the previous amendments have been made in direct response to the requests of the religious organizations of Australia as set forth to me. They will carry out word for word what they ask for.

Mr Groom:

– I understand that they will cover everything in the amendment of which I gave notice?

Mr HUGHES:

– I do not know.

Amendments agreed to.

Mr GLYNN:
Angas

– During the debate in Committee the question was raised whether fire brigade stations were exempt. It may be that the AttorneyGeneral thinks that they will come under the exemption of municipal and other public lands, or lands held for public purposes, but I have a doubt on the point. Fire brigade lands are not public in the sense that the other lands referred to are. The brigades are supported in Adelaide by the insurance companies, the city corporation, and the State. I move -

That the following new sub-clause be added : - “ (8.) A fire brigade station.”

Mr Hughes:

-i agree to that.

Mr ARCHIBALD:
Hindmarsh

– I do not know what is the position in regard to fire brigades in the other States, but in South Australia they are subsidized by the State and the municipal corporations, while the insurance companies. I think, are liable for two-fifths of the expenditure. There might be some force in an appeal to tax the two-fifths interest of the insurance companies, but I think that the State and municipal authorities should be exempt.

Amendment agreed to.

Clause 14 (Taxpayer to furnish returns).

Amendment (by Mr. Hughes) agreed to-

That the following proviso be inserted at the end of sub-clause 1 : - “ Provided that, except as otherwise required by the Commissioner or prescribed, a taxpayer who in any financial year has furnished the full returns above mentioned may in each of the two succeeding years fnrnish, in lieu of such full returns as above mentioned, supplementary returns setting out a full and complete statement of all land of which he has become or ceased to be the owner since the thirtieth day of June preceding the date of the last full return, and of the improved and unimproved value of every parcel thereof, with such other particulars as are prescribed.”

Clause 24 (Owner of freehold).

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I move -

That the following proviso be added : - “ Provided that, for the purpose of the assessment of a tenant for life of land, without power to sell, under a settlement’ made before the 1st day of July, 1910, or under the will of a testator who died before that day, the unimproved value of the land shall be calculated upon the basis of the rent which he obtains for the land, or which, if he let the land, he ought reasonably to be able to obtain; and for the purpose of this section rent, in the case of improved land, means so much of the whole rent as bears to the whole rent the proportion which the unimproved value of the land bears to the improved value.”

This amendment is designed to meet the position of life tenants under a settlement without power to sell. I think that it will cover all the cases that have been brought forward.

Sir JOHN FORREST:
Swan

– What does the Attorney-General mean by the words “without power to sell”? Under the law of most of the States, as well as under the English law, a life tenant has power of sale, and in most cases there is power of sale.

Mr Hughes:

– Where under a will there is power to sell, this proviso will not apply. It is being inserted to meet cases in which there is no such power.

Amendment agreed to.

Clause 25 -

  1. In the case of the owner of a leasehold estate in land under a lease made after the commencement of this Act. . . .

Amendment (by Mr. Hughes) proposed -

That the words “ In the case of,” line 1, be left out.

Mr AGAR WYNNE:
Balaclava

– Many race-courses and grounds used for public purposes are leased from the Crown, and I fear that they may come under this clause. In the case of large race-courses such as Flemington and Randwick the land is held under lease by trustees, and there is no attempt to conduct race meetings for pecuniary gain. Does the Attorney-General think that such lands would be liable?

Mr Hughes:

– Everthing depends upon the terms on which the land is held. I should not like to give an answer off-hand to the question of whether or not such race-courses are taxable.

Mr AGAR WYNNE:

– The Flemington race-course is held under a sixty years’ lease, and it would be a taxable value if used for any other purpose. I do not think it can be the desire of the Government to tax race-courses that are not conducted for the pecuniary profit of the proprietors. I do not suggest that proprietary race-courses should be exempt.

Mr WEBSTER:
Gwydir

.-I agree with the honorable member for Balaclavathat public race-courses not conducted for the pecuniary profit of the proprietors should be exempt from taxation, but the exemption should not apply to proprietary race-courses, the existence of which is a curse to Australia, and is causing the manhood of the country to be sapped. They have gone a long way beyond fostering legitimate sport, and have become centres of corruption.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– It is not our intention that public race-courses shall be taxed, and I do not think that they will be; but I shall consider the matter, and if it appears likely that they may be, I shall have the Bill amended in another place.

Mr HEDGES:
Fremantle

.- I hope that the Minister will make certain that race-courses which, in many cases, are public parks, are not taxed. The Kalgoorlie race-course is one of the most beautiful spots in the interior of Australia.

Sir William Lyne:

– Is there any grass there ?

Mr HEDGES:

– Yes, beautifully green grass all the year round, and the finest flowers. It is always open to the public.

Mr GLYNN:
Angas

.- I think it should be understood that, under this provision, a leaseholder on a lease made after the passing of the measure will be dealt with as if he were the owner of the land in fee-simple, no matter how small his interest in it may be. If he leased from several land-owners, all of whom were exempt from taxation by reason of the fact that they held individually less than £5,000 worth of land, he would be unable to make any deduction.

Mr Groom:

– Did not the Attorney- General promise to introduce a modification to meet a case put by the honorable member for Parramatta regarding the fixing of the interests of lessees?

Mr Hughes:

– The liability of lessees is limited by several clauses. We have provided for liability under a covenant, and have made it clear that in the case of leases made before the Act the lessee shall pay only in accordance with his interest.

Mr GLYNN:

– In the case of a lessee under a lease made after the Act no deduction is allowed, if those who own the feesimple are not taxable. The honorable member for Flinders, when the Bill was last in Committee, instanced the case of a lessee leasing the holdings of several proprietors, ‘each of whose parcel of land was worth less than £5,000. Furthermore, a lessee might be unable to make a deduction because the owners of the land were exempt from taxation under special provisions like those of clause 12. If such a lessee leased £100,000 worth of land, he would, under this clause, have to pay as if he owned the fee-simple of the land, whereas his lease might be only for, say, seven years.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– Curiously enough an actual case of a lessee leasing parcels of land from several owners, each of whom would be exempt, though the aggregate area leased exceeded in value£5,000, was brought under the notice of the Department yesterday. In such a case, if the lease has been made after the passing of the measure, the leaseholder under this clause will be in the same position as if he were the owner in fee-simple, and cannot make a deduction. In regard to a lease made before the passing of the Act, the leaseholder’s interest is calculated in this way : The annual rent which he pays is deducted from the full annual value of the land, and the difference, capitalized, is taken to represent his interest. If that exceeds£5,000 he will be taxable.

Mr Glynn:

– Undoubtedly, in the case of leases made after the passing of the measure, the lessee will be treated as if he were the owner in fee-simple, and where the owners in fee-simple, from whom he has leasedj are not taxable, he will be unable to make any deduction.

Mr HUGHES:

– That is so.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The Attorney-General has made provision, though in somewhat clumsy fashion, for leases made before the passing of the measure ; but I think he hardly realizes the effect of this clause on leases made after its passing. We have already exempted from taxation the land of religious institutions and other bodies, the proceeds of which are devoted to certain purposes. In most cases these bodies obtain incomes from their land by leasing it; but after the Bill becomes law no lessee will rent such land, except at a rate which will put upon the lessor the obligation of paying the tax. Thus these institutions will be deprived of the benefit of the exemption which we have tfiven to them.

Mr Wise:

– Take the land owned by St. James’ and the Scotch Church, for example.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The Committee has already given exemptions to religious and other bodies with regard to lands the proceeds of which are devoted to certain purposes, and I suppose intends them to be effectual. The largest portion of the lands held, especially by churches, are let out from time to time, and the churches derive and apply to their charitable purposes a large income thereby. If we now. impose upon their future letting the obligation that the lessee shall in every case be deemed to be the proprietor we necessarily to that extent nullify the effect of the exemption. The lessee will say, “ Before we arrive at an agreement as to the lease, what tax shall I have to pay?” If he finds that he will have to pay a tax equal to about half the rent that he would otherwise have to pay, he will say that he can only afford to give half the rent he would otherwise give. We are, therefore, really taking away from the societies which are exempted the benefit that we purport to give them under the exemption. Take large areas of city property as an instance. The honorable member for Gippsland referred in an interjection to the St. James’ property in Melbourne. That is held by the Church of England for church purposes. The income from it is derived solely from it being let out in large and valuable parcels, all of which would be liable to taxation. If we say to the Church of England trustees, “ We exempt you fromall taxation with regard to this land, because the moneys you derive from it are applied to strictly charitable and religious purposes,” we appear to be giving them a concession. But, on the other hand, we say to their future lessees, “ If you venture to take a new lease from the church you will have to pay the full tax,” and that will necessarily deprive the church of the whole benefit of the previous concession.

Mr GROOM:
Darling Downs

– I take it that the Attorney-General in giving the previous exemption intended it to apply to land which is the subject of ownership by a church or religious society, and the proceeds of which are devoted to religious, charitable, or educational purposes. If, however, the church which owns the land makes a lease, and the lessee is to be made liable for the whole of the tax as if he were the freeholder, where is the value of the exemption? Is it the intention of the Attorney-General to do that ? If it were a case of a private person being a lessor and lessee the tax would be apportioned between the two of them, but in this case if we make the lessee pay the full tax just as if he were the owner of the property, to that extent we absolutely reduce the value of the property as an income-producing asset.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– Of course, if a man leases land worth over , £5,000 from a church, he pays. The honorable member for Flinders contends that that will have a tendency to defeat the effect of the exemption of church lands. I do not think it will. Is it the common practice of churches to let out very many parcels of land worth £5,000 and over in unimproved value?

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Yes, in cities.

Mr HUGHES:

– I consider the lessee ought to pay. When the honorable member for Darling Downs says that this will depreciate the value of church property, he forgets that all property is treated on exactly the same footing. If a man wants to lease land from any person, he has to pay the tax, and therefore, proportionately, the value of church land will not be depreciated. The church will be in practically the same position as every other landowner, except that it will not have to pay any tax itself. That, however, is a very material difference.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The unimproved value of a good many of these city properties runs up to anything from £500 to £1,000 a foot.

Mr HUGHES:

– I am not saying that there are not cases of that sort. I am simply contending that the value of church property will not be depreciated by this provision, because all lands will be subject to precisely the same charge. It is contended that a lessee would give less rent for church land. We have been speaking about using the proceeds of land for church purposes, and, therefore, it is the proceeds that we have to consider.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Does the honorable member seriously contend that the tax will have the effect of increasing the value of property?

Mr HUGHES:

– I think that this country will be such a Garden of Eden that land, and everything else, will rise of one accord, as if it were winging its eternal way to the empyrean.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– Does the honorable member intend to make it a Garden of Eden by robbing the churches?

Mr HUGHES:

– It is the proceeds that go to the church that have to be considered. The lessee of church lands will be in exactly the same position as the lessee of any other lands. Since he cannot get land cheaper from anybody else, he will have to pay the ruling rate for the church land, whatever it is.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– He would try to get his lease from somebody who was not subject to exemption. Then he would get the benefit of the deduction.

Mr HUGHES:

– Where could he? The whole of the church lands are exempted. If he is going to lease land worth £5,000 or over he cannot help getting it from somebody who pays the tax. Other owners will have to pay the extra rate charged upon the land, but the church, having to pay no tax, will be in a position to lease better than anybody else, and to that extent the lessee from a church will derive an advantage.

Mr W H IRVINE:
FLINDERS, VICTORIA · ANTI-SOC; LP from 1910; NAT from 1917

– The necessary effect will be to place all the exempted land at a discount, and the non-exempted land at a premium, with lessees, because, in the first case, they cannot make a deduction, and, in the second, they can.

Mr HUGHES:

– No lands worth £5,000 and over, except church lands and State lands, that a man can lease, are exempt, and, in every case, therefore, the lessee will have to pay.

Mr AGAR WYNNE:
Balaclava

– Besides State and church lands, municipal lands are exempt. In Melbourne, between Market-street and Williamstreet, there is a large block, the whole of which belongs to the City Corporation, and was let many years ago on building leases. The Corporation receives a large revenue from it for the benefit of the ratepayers of the city. The rent returns from that property will be diminished very much by this tax if it is charged to the lessees. The honorable member for East Sydney referred to the property owned by the Sydney University, opposite the Sydney General Post Office. The rentals from it are used for educational purposes by the University trustees and not for any personal profit for themselves, but those rents must be depreciated by the amount of the tax, and, therefore, under the Bill, as it stands, we shall be directly taxing the University of Sydney.

Mr SCULLIN:
Corangamite

– I cannot understand why the AttorneyGeneral should not insert another provision to meet the objections of honorable members opposite. If a lease is granted by a land-owner at the full rental value the lessor pays the whole of the tax. If he grants a lease at half the value he will pay only half the tax, and the lessee will pay the other half. If a man rents land from a body, such as a State or a church, whose land is exempt, it is obvious that the lessor will pay no tax, and, therefore, the lessee must pay the whole of the tax. Consequently, the exemption from taxation which we are giving to these people, will be nullified by the depreciation of their property as a rent-producing concern. A lessee renting from a church or municipality, which is exempt from taxation, will be in a worse position than if he rented from any one who is not exempt. He will say, “ I shall have to pay the whole of the tax if I rent from you, and so 1 shall pay you less rent.” Therefore, what we have given will be no real exemption at all. The Attorney-General ought to provide that the clause shall not apply to any land which is exempted under the Bill. I approve of applying it to all land except exempt land.

Sitting suspended from1 to 2.30 p.m.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– There seems to be considerable misapprehension as to the effect of clauses 24 and 25, and of this proviso in particular. The position is that in the case of any lease made after the Bill comes into operation it is immaterial what rent a man pays; the rent has nothing to do with the liability of a land occupier or land-owner in respect of a lease then made. The liability of a lessee in respect of a lease made before the coming into operation of the Bill depends on the amount of the rent’ he pays, whereas the liability of a lessee in respect of a lease made after that does not. The liability of a lessee in respect of land on which a lease has been granted after the coming into operation of the Bill is that, if he is a bigger land-owner than the lessor, then he pays the higher rate, and he is entitled to deduct from the amount he does pay that which the lessor has already paid. Let me give an illustration : If a lessor owns such an amount of land, all included in one lease, as involves a tax of £50 a year, and the lessee owns land outside the lease which, with the lease itself, involves taxation of, say, £150 a year - in other words, instead of a penny rate, has to pay, perhaps, the rate of twopence - then on the amount of land held in the lease the lessee’s rate is raised, and he pays the difference. I know the thing is rather complicated, but the principle runs right throughout the Bill. When honorable members ask that there shall be a departure from that principle, I am totally unable to say what the effects may be. No religious body or trust can be prejudiced in any way by the position in the

Bill. If a church or a trust has land on whichit has to pay no tax, then the lessee, if he leases more than £5,000 worth of land,will have to pay the tax.

Mr Groom:

-On the whole unimproved value.

Mr HUGHES:

– No.

Mr.Groom.- What will he pay on?

Mr.HUGHES.- He will pay on the unimproved value, less£5,000.

Mr Groom:

– That is, what I mean.

Mr HUGHES:

– That is not the whole unimproved value..

Mr.Groom. - He will pay on the whole unimproved value of the freehold.

Mr HUGHES:

– He will pay on the unimproved value of the land - whether the land is freehold or leasehold is. not material. Supposing Jones has £20, 000 worth of land, and the Presbyterian Assembly has£20,000 worth of land; the question is whether Jones is at a disadvantage as compared with the Presbyterian Assembly, orViceVersa. I say that the Presbyterian Assembly, having to pay no land tax itself, is able to compete advantageously with a man who. has to pay land tax, and, consequently, can afford to lease land at a rentlessbysomuchasiscoveredbythe amount of land tax which they do not have to pay. Therefore, there is absolutely nothing at all unfair in the proposal to either the lessee or the lessor. Any person who leases land from a municipality, or in any other way, except direct from the Crown, has to pay. If we are to let thechurch off, we must let the municipality arid other people off ; and we cannot allow the Bill to be riddled in that way. We have granted an exemption which goes to the full extent of that grantedunder any State Act in Australia. In New Zealand a lessee is liable in respect to land leased under the exemption clause exactly in the same way as under any other clause. Everything has been granted that was promised by mepreviously in Committee; and I hope honorable members will hot at the eleventh hour try to take the heart out of the Bill, by violating its principles, because they imagine thatan injustice may be done to some particular body.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

.- I fail altogether to follow the line of argument of the Attorney-General. First of all, he told us that by the lessee having to pay this tax the holders of the land, who would be exempt, would be so much better off ; then he went on, to say that trustees of churches and municipalities who lease land would, as a consequence of this land having to bear thefull burden of taxation, not be able to get so much rent in competition with, other people, but that thatwould not matter, because they had notto pay any tax. If we exempt these bodies on the one hand., and by the provisions of this Bill reduce the rent on the other, are they exempt at all in point of fact? The AttorneyGeneral admits that these bodies will get less rent, and yet he says they are exempt from taxation. Where is the valueof the “exemption”?

Mr GLYNN:
Angas

.- This clause, as it stands, is an exception to the principles of the Bill, in spite of what the Attorney-General may say. What is aimed at?- Evidently the idea of the draftsman was that, unless this provision were included, a man might lease his property to several small leaseholders, each of whom would possess a value under£5,000. In that case, however, the end of the Bill, which is subdivision, would be accomplished, though, of course, we should not attain the other end, which is revenue. In consequence of the subdivision each of thesub-lessees would be exempt, and if the leaseholds were valued after the coming into operation of the Bill in the same way as before, the leaseholders would pay only on the value of their interest, and so with the lessor. Under this provision the lessee will pay on the total value of the feesimple, and that is not consistent with the’ next provision regarding leases before the cominginto operation of the Bill, nor is it consistent with any other provision, the aim of which is to make beneficiaries pay in proportion, and not out of proportion, to their interest. Why is this exceptionmade? Why is the leaseholder to be declared to be the owner of the fee-simple in the case of a lease executed after the coming into operation of the Bill? It is because there is a fear that, otherwise, the full revenue willnot be returned. Why would the full revenue hot be returned? Because, in some cases, the land is exempt ; and the principle of the Bill is, therefore, violated by providing to tax . the lessee as if hewere the owner of the whole lot. In other words, we give an exemption with one hand, and take it away with the other. No matter how short the lease may be, if only for a year, the lessee is declared to be liable for a tax determined by the full value of the fee-simple. If the land be valued at £200,000, and the lease has only one year to run, and if the land is exempt as belonging td a municipality-, a State, or a charity, then, for that one year, the leaseholder is responsible for a tax on £200,000. I ask the Attorney-General whether he ‘considers this fair, considering there is not another provision in the Bill to that effect? Why is this done?. Because it is feared that by the subdivision through leasing some revenue may be lost. But revenue will be lost simply because we declare that certain lands must be exempt ; and it is a departure from the principle of the Bill to destroy the effect of the exemption and make the leaseholder pay the total.

Mr Hughes:

– If the honorable member looks at clause 12 he will see that the provision is limited entirely to the owner - that it does not extend to any other person.

Mr GLYNN:

– Is it common sense to say to a land-owner, “ As long as you hold this land you are exempt, and as long as you lease it your rents are exempt, but the moment you do lease it the lessee will be taxed to the full rate.” Surely that is an assertion that thatman’s land must be discounted when it is competing for lease. The whole idea of this provision is to endeavour to prevent a loss of revenue from subdivision or leasing, but in making that effort we are destroyingone of the principles of the Bill, and bringing within its scope people whom we say should be exempt. We should place lessees both before and after the Act in the same position. Before the Act lessor arid lessee each pay in proportion to their interest; but in the case of a lease made after the Act comes into operation, the lessee will have to pay the sum total. That is unfair. I ask the Attorney-General to adopt the principle followed in other taxing systems - and followed in his own measure, as regards leases entered into before the Bill comes ihto operation - by leaving the amount of the tax to be apportioned between the iessor and the lessee. If one is exempt do not tax him ; if the other is not exempt; then tax him only to the extent of his interest in the land.

Mr GROOM:
Darling Downs

.- I draw the attention of the AttorneyGeneral to paragraph a of claus’e 13, which declares that, with respect to land whichj under the preceding clause is exempt from land tax- the exemption shall be limited to the owner specified in that section, and shall not extend to any other person who is the owner of any estate or interest in the land.

Let us take the case of the City of Sydney, which owns market buildings, which, we will say, are worth £100,000. Under this Bill that property is exempt, but is it the intention of the Attorney-General that, in the event of the municipality leasing the buildings; only the leasehold interest that the tenant holds shall be taxed?

Mr Hughes:

– Yes, only the leasehold.

Mr GROOM:

– Arid not to make the lessee bear the whole of the tax on the unimproved value?

Mr Hughes:

– That is so.

Mr GROOM:

-Then there will be a difference as between that case and the case of an ordinary lessor and an ordinary lessee. If an owner has an estate in fee-simple and makes a lease to the tenant, then there should be ari apportionment of the taxation between the lessor arid the lessee. If the Attorney-General intends to tax the lessee, let him be taxed only in respect of the value of his interest. Do not let us take away the exernption by making the lessee pay the whole amount that the lessor would have to pay if he were not exempt.

Mr. HUGHES (West Sydney- Acting Prime Minister arid Attorney-General [2.51].-Thefe seems to be a general consensus of opinion in favour of limiting the liability of a lessee of land under clause 12, to his interest, whatever if may be, arid I shall make” the provisions of clause 26 apply to exempt lands. That, I think, will meet the position.

Mr. SCULLiN (Corangamite) [2.53].- The announcement just made by the AttorneyGeneral satisfies the objection that I have raised. In view of the statement made by the honorable meriiber for Darling Downs, I think it is clear that if clause 26 applies to exempt lands, it willmean that a lessee will pay only on the actual interest that he holds. Thus in the case of iands leased from municipalities or religious or other bodies, which are exempt, it will not have the effect of depreciating the value of the property by reducing the rent.

Amendment agreed to.

Mr G B EDWARDS:
NORTH SYDNEY, NEW SOUTH WALES · LP

.-I wish to deal with this arid the next clause to clear up a misapprehension that exists, at all events, in the minds of laymen, with regard to the position of leaseholders. Leaseholders are of two classes, and fully 25 per cent. of them will be exempt if we do not give a wider amplitude to what we intend bv the use of the word “leaseholder.” Many people hold under leases duly executed, but fully 25 per cent, hold under an agreement to lease, which is always looked upon as tantamount to and equally as protective as a lease. Under the provisions of this bill we deal only with leaseholders, and not with the holder of an agreement to lease. I wish to test the question by moving

That, after the word “ Act,” line 3, the words “ not being in pursuance of an agreement made before the commencement of this Act “ be inserted.

That will bring an agreement to lease, made prior to the passing of this Bill, within the purview of it. I shall move a similar amendment in the next clause, so as to bring in agreements entered into beforethe commencement of the Bill. There seems to be a general desire on the part of honorable members that holders of leases from freeholders should not have to pay what the freeholder would have to pay under the Bill if he continued to hold his land. The desire seems to be to place leaseholders on an independent footing - that they shall be called upon to bear their own burdens and not to take over that of the original holders of the land. There are in the Committee solicitors who will indorse my statement that there are a very large number of holders under what is not a lease, but tantamount in all respects to one. We shall do an act of justice to this very large class and give effect to the true intention of the Committee that they should be released from the burden which might otherwise be imposed upon them by including in the clause the holder of an agreement to lease. I brought this matter under the notice of the Attorney-General yesterday, and I do not know that he has yet considered it; but I intend to press it, for it will do justice to a number of people who would otherwise be excluded from provisions of the Bill intended to operate in their favour.

Amendment agreed to.

Amendment (by Mr. Hughes) proposed -

That the following new sub-clause be added : - “3. Notwithstanding anything in this section, where the owner of the fee-simple of the land is exempt under section 12 of this Act from taxation in respect of the land, a lessee of the land shall be assessed and liable for land tax as if the lease were made before the commencement of this Act, and not otherwise.”

Mr Glynn:

– I doubt if this covers Crown lessees in perpetuity without the right of revaluation, or Crown lessees having the right of purchase, and I suggest that the Attorney-General should look into the matter.

Amendment agreed to.

Clause 26 - (1.) In the case of the owner of a freehold estate in land who has before the commencement of this Act granted a lease of the land shall, for the purpose of his assessment under this Act, be entitled, during the currency of the lease, to have the unimproved value (if any) of the lease deducted from the unimproved value of the land…..

Amendment (by Mr. Hughes) agreed to-

That the words “ In the case of,” line 1, be left out.

Amendment (by Mr. G. B. Edwards) agreed to -

That after the word “Act,” line 3, the words “ entered into an agreement to make or.”

Clause 29 verbally amended.

Mr GLYNN:
Angas

.- The honorable member for Grampians drew my attention to the fact last night that there is no provision for making a deduction where land is the subject of a settlement and there is a number of annuities. I promised that I would mention the matter, and perhaps the Attorney-General will consider it. I admit that there is difficulty in dealing with the case, because annuitants are not taxpayers in any capacity.

Clause 31 (Married women).

Amendment (by Mr. Hughes) agreed to-

That sub-clause 2 be left out, with a view to insert in lieu thereof the following sub-clause : - “ (2) Where

a husband has directly or indirectly transferred land to or in trust for his wife, or

a wife has directly or indirectly transferred land to or in trust for her husband, (they not being judicially separated), the husband and wife shall, unless the Commissioner is satisfied that the transfer was not for the purpose of evading land tax, be deemed to be joint owners of all the land owned by either of them :

Provided that this sub-section shall not apply to settlements made before the thirtieth day of September, One thousand nine hundred and ten.”

Clause 33 (Joint owners).

Amendment (by Mr. Hughes) proposed -

That the following sub-clause be added : - “ (6.) This section shall not apply in the case of joint owners who have made partition of their interests since the thirtieth day of June, One thousand nine hundred and ten, and before the thirtieth day of September, One thousand nine hundred and ten.”

Mr GLYNN:
Angas

.- The amendment is in accordance with a promise made by the Prime Minister, but I hope that the Attorney-General will see his way to adopt a later date than the 30th September. A case has been brought before me in which it was intended to subdivide before the Bill was introduced, but the subdivision cannot be effected in time to take advantage of this provision. Could not the date be extended to the 30th October ?

Mr AGAR WYNNE:
Balaclava

– I should like to know how this provision applies to partitions made before the 30th June. Would it not be better to make the clause read “ prior to the 30th September,” instead of fixing two dates? That would make it in keeping with another clause respecting contracts.

Mr Hughes:

– If a partition was made before the 30th June, the provisions of the Bill will not apply.

Mr AGAR WYNNE:

– A partition of which I have been informed was made before the 30th June, but the whole property was worked as one under a deed constituting a partnership, which was dissolved prior to 30th September.

Mr Hughes:

– Any person who divides his land before 30th June, or after that date and before the 30th September, will be exempt.

Amendment agreed to.

Clause 34 (Joint occupiers).

Mr Hughes:

– I ask the Committee to negative the clause, because the Bill is aimed primarily at the ownership of land, and occupation as distinct from ownership is immaterial.

Mr Glynn:

– There is another clause which will also have to be altered, because of a reference to joint ownership, whether by occupancy or not.

Mr Hughes:

– That will be done.

Clause negatived.

Clause 40 - (1.) Any taxpayer or person may within the prescribed time appeal to the High Court in its original jurisdiction, the Supreme Court or a County or District Court of a State, or such other Court as is specified in that behalf by proclamation, against any assessment by the Commissioner with respect to his land. (2.) When the appeal is to the High Court, or a Supreme Court, it shall be heard by a single Justice of the Court.

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I move-

That the following words be added to subclause 1 : - “ on the ground that he is not liable for the lax or any part thereof, or that the assessment is excessive.”

I point out to the honorable member for Bendigo that this amendment is made in consequence of his argument that possibly “assessment” did not cover the question of liability.

Amendment agreed to.

Mr GLYNN:
Angas

.- There ought to be an appeal allowed from the decision of the Commissioner on a question of joint tenancy arising from the fact of marital relationship.

Mr Hughes:

– Joint tenancy will be a question of assessment.

Mr GLYNN:

– It would be rather rough if the Commissioner decided in a case of that kind, and there was no appeal.

Clause 42 - (1.) On the hearing of the appeal the Court may make such order as it thinks fit, and may either reduce or increase the assessment, and its order shall be final and conclusive on all parties except that an appeal therefrom shall be to the High Court on questions of law. . . .

Amendment (by Mr. Hughes) agreed to -

That in sub-clause1 the words “ except that an appeal therefrom shall be to the High Court on questions of law “ be left out, and the words “ except as provided in this section “ be inserted in lieu thereof.

Clause 43 (Rules of Court).

Amendment (by Mr. Hughes) proposed -

That the following new sub-clauses be inserted : - “ (3.) On the hearing of the appeal, the Court may, if it thinks fit, state a case in writing for the opinion of the High Court upon any question arising in the appeal which in the opinion of the Court is a question of law. The High Court shall hear and determine -the question, and remit the case with its opinion to the Court below, and may make such order as to costs as it thinks fit.” “ (4.) An appeal shall lie to the High Court, in its appellate jurisdiction, from any order made under sub-section (1.) of this section.”

Mr AGAR WYNNE:
Balaclava

– I move -

That the amendment be amended by inserting after the word “ fit,” line 2, the words “ and shall at the request of either party.”

I want the taxpayer or the Commissioner to have the right to require the Judge t© state a special case. Otherwise we may have varying decisions, and no finality.

Mr Groom:

– What the honorable member desires is already accomplished by proposed new sub-clause 4.

Mr AGAR WYNNE:

– I understood that under clause 40 or 41 the decision of the Judge was to be final. If an appeal to the High Court is already provided for, I shall withdraw my amendment.

Amendment of the amendment, by leave, withdrawn.

Amendment agreed to.

Clause 44 (Power of Commonwealth to acquire land unless valuation increased).

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– This is the clause on which I promised to give the Committee an opportunity to take a division without discussion.

Question - That the clause stand part of the Bill - put. The Committee divided.

AYES: 28

NOES: 0

Majority … … 10

AYES

NOES

Question so resolved in the affirmative.

Clause agreed to.

Clause 46 -

Every person who fails to pay the amount payable by him in respect of land tax before the expiration of thirty days after it has become due shall be liable by way of additional tax to a further amount of ten per centum on the amount of the tax.

Mr G B EDWARDS:
NORTH SYDNEY, NEW SOUTH WALES · LP

.- I move-

That after the word “ centum,” line 5, the words “ per annum “ be inserted.

It seems to me very unjust that, if a man misses one day in the payment of his tax, he should incur a penalty of 10 per cent.No inducement is given to a man if he has made an error, to hasten up and pay the tax. Rather is there an inducement not to pay until the Commissioner takes steps to force him. It is, however, a fair thing to make the penalty 10 per cent. per annum, so that, if a man makes default for a few days, he will not be penalized so heavily as if he makes default for some months.

Mr Tudor:

– The honorable member means that if a taxpayer were in arrear only one month, he would pay only1 per cent. ?

Mr G B EDWARDS:
NORTH SYDNEY, NEW SOUTH WALES · LP

– Yes. In that case the Government would be getting very fair interest from the neglectful taxpayer, and we should get rid of the anomaly of the same penalty being imposed on a man who had defaulted for a long period as on a man who was merely in arrears a few days. Under the clause, as it stands, the Commissioner would, probably, be frequently asked to remit the penalty, and if the fault were a trivial one, might do so. That is bad in principle. If the penalty were at the rate of 10 per cent. per annum, the Commissioner would enforce it in all cases. Moreover my proposal is in accordance with the scheme of the Government in levying the tax gradually instead of by jumps. In the clause, as it stands, there is one heavy penalty for all kinds of delinquents. It will be more in conformity with justice to temper the penalty of the offence.

Amendment negatived.

Clause 49 -

The following provisions shall apply in any case where, whether intentionally or not, a taxpayer escapes full taxation in his lifetime by reason of not having duly made full and complete returns : -

The assessment shall be at the rates payable in respect of the years for which the tax ought to have been paid, and the amount payable shall be treble the amount of the difference between the tax so assessed and the amount actually paid by the taxpayer, and shall be a first charge on all the taxpay er’s estate

Amendments (by Mr. Hughes) agreed to-

That after the word “ shall,” line 6, the words “ where the taxpayer’s default was intentional “ be inserted; and that after the words “taxpayer’s estate,” lines 13 and 14, the words” in the hands of the executors and administrators,” be inserted.

Clause61 (Power to retain evidence).

Mr HUGHES:
Acting Prime Minister, and Attorney-General · West Sydney · ALP

– I move -

That the following new sub-clause be added : - “ (3.) The Regulations may prescribe the scale of expenses to be allowed to persons required under this section to attend.”

This amendment is proposed in accordance with a suggestion made by various honorable members - particularly by the honorable member for Darling Downs - in relation to the expenses of witnesses.

Amendment agreed to.

Mr Atkinson:

– Is the AttorneyGeneral going to give consideration to the question I raised as to clause 53?

The CHAIRMAN:

– Clause 53 has not been recommitted.

Mr HUGHES:

– I have agreed to the recommittal of every clause that I promised to recommit.

Bill reported with further amendments.

Motion (by Mr. Hughes) proposed -

That the reports be adopted.

Mr ATKINSON:
Wilmot

.- The Attorney-General promised ito give some consideration to the clauses of the Bill affecting annuities, and I should like to know whether it is his intention todo anything in the way of granting the relief asked for?

Mr Hughes:

– I promised to look into the matter, but I pointout to the honorable member that I have not yet had an opportunity to do so.

Mr ATKINSON:

– I am only reminding the honorable gentleman of the promise he made; and I should like to know whether there is a chance of anything being done.

Mr Hughes:

– Anything which is to be done can now only be done in another place.

Question resolved in the affirmative.

Reports adopted.

page 4305

NAVAL APPROPRIATION BILL

Bill returned from the Senate without amendment.

page 4305

LAND TAX ASSESSMENT BILL

Mr. SPEAKER reported the receipt of a Message from His Excellency the Governor-General, recommending an appropriation for the purposes of this Bill.

page 4305

ADJOURNMENT

Order of Business

Mr HUGHES:
Acting Prime Minister and Attorney-General · West Sydney · ALP

– I move -

That the House do now adjourn.

On Tuesday it is the intention of the Government to take up the Sugar Bounty Bill and the Excise (Sugar) Bill, and subsequently to proceed with the second reading of the Northern Territory Acceptance Bill, providing, of course, that the two previous measures have been disposed of. Then we expect to be able to dispose of the Lighthouses Bill and the Patents, Trade Marks, and Designs Bill, the object of the latter being merely to transfer the administration from one Department to another. The desire is to clear the Sugar Bills off the notice-paper ; and after lunch on Wednesday, to take the third reading of the Land Tax Assessment Bill, and thereafter, as soonas possible, to deal with the Land Tax Bill.

Question resolved in the affirmative.

House adjourned at 3.45 p.m.

Cite as: Australia, House of Representatives, Debates, 7 October 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19101007_reps_4_58/>.