6th Parliament · 1st Session
Mr. Speaker took the chair at 11 a.m., and read prayers.
– I have to announce to the House that this morning the honorable member for Kalgoorlie, the Honorable Hugh Mahon, was sworn in as Minister of State for External Affairs.
– In connexion with the Christmas holidays, does the Prime Minister propose to arrange for the granting this year to temporary employés of the Public Service the same privileges as were arranged for before the last two Christmases.
-As those special arrangements have proved most embarrassing and difficult, I am not prepared to say that we shall adopt them ; indeed, my mind is against it. This does not apply to the holidays provided by law, and granted to all employés.
Motion (by Mr. Fisher) agreed to -
That leave be given to bring in a Bill for an Act to amend the Land Tax Assessment Act 1910-12.
Bill presented by Mr. Fisher, and read a first time.
– Will the Minister of
Trade and Customs inform the House whether, before establishing Free Trade in wheat between Australia and the cheap labour countries of the world, he received representations from the Trades Hall by deputation or correspondence; and, if so, whether he will place before the Chamber a minute of the statements of the deputation, or the correspondence.
– It is possible that wheat may be brought here from Canada and the United States; but, so far from those places being cheap labour countries, the rates of wages there, particularly in the rural industries, are at least equal to those prevailing in Australia. No representation was made by the Trades Hall Council which affected our decision in this matter. We decided last Tuesday on the action which has been taken.
– Did the Minister see the resolution of the Trades Hall Council ?
– I saw it on Friday morning, but the Bill to ratify the decision of the Government was in “ my pocket two days before that report was published.
– Will the Minister consider the advisability of imposing a duty on -wheat imported from countries where it is grown with black labour?
– The statement I made on Saturday, that from the time of my announcement wheat would be admitted duty free from all countries, still stands good.
– I - Is the PostmasterGeneral aware that every month several magazines and newspapers which should be delivered at my house by his Department are lost? I have here the wrapper in which a paper was enclosed ; it was delivered, but without the enclosure. As I pay for these papers, I should like to receive them, instead of, as at present, losing most of them. On several occasions the magazines have been lost between the offices of Messrs. Gordon and Gotch and my house. The wrapper which I produce contained a statement regarding the American elections of 3rd November, which I particularly wanted.
– If the honorable member will give me the wrapper that he has produced, I shall have a full inquiry made.
– If the Attorney-General has completed his inquiry into the operations of the Broken Hill Proprietary Company, whose offices were raided by the military some time ago, can he make a statement to the House of the result?
– I was under the impression that honorable members had gathered from what I said last Thursday that no offence against the law had been disclosed by the examination of the papers of the Broken Hill Proprietary Company.
That company has committed no offence at all. I saw one of the directors of the’ company, and made certain suggestions to him, which he has put before his board. These suggestions were on the lines of the statement which I made to the House. He assured me that the directorate was in favour of action along those lines, an assurance which I regarded as quasiomcial, because this gentleman, though not the chairman of the company, had been its chairman. As he has had ample opportunity to put the matter before the board, and has done so, and has seen me subsequently, I assume that the company is favorable to the suggestion that,, if by any means we can open up new markets for it, and rid it of the control of the German capitalists, it will readily fall in with our views.
Non-Production op Papers.
. ‘ - I wish to speak on a matter of privilege. On more than one occasion I have been desirous of getting some information in regard to the plans and specifications for the Naval base at Cockburn Sound which had been supplied to, and are in the possession of, the Government.
– Order ! Will the right honorable member take his seat?
– I shall be compelled to move the adjournment of the House, sir. I must get the information somehow.
– There is no objection on my part to the right honorable gentleman getting all the information it is possible to get, but my duty is to try to carry out the procedure of the House. I remind the right honorable gentleman that if he is going to raise a question of privilege he must conclude his remarks with some motion in keeping with the matter concerning which he thinks he is aggrieved.
– I intend to move that if the information is not supplied, the House will take action in the matter.
– The right honorable gentleman must do something more than that; he must take some definite course, and, if he does, of course I cannot interfere with him.
– How can I get the information, sir?
– I am merely addressing these remarks to the right honorable gentleman so that when he concludes his speech he will submit a motion. If he sat down without submitting a motion I would naturally have to take exception to his conduct, and I do not want to do that.
– Will the Prime Minister be prepared to place on the table of the House the plans and specifications accompanying thereport of Sir Maurice Fitzmaurice on Cockburn Sound? The reply I received from the Minister was that the plans and specifications had not been considered by the Government; but that does not prevent me from asking that they be placed on the table of the House, as is usual when important reports are received. I hope that you, sir, will allow me to say a few words, as I cannot get anything out of the Minister. Reports are always laid on the table of the House even before they are considered by the Government.
– Order !
– I do not think that that is any excuse at all.
– Will the right honorable member ask his question?
– Yes sir. I have tried on several occasions to get information but without any success. Not only has it been denied, but it has been denied in discourteous terms.
– Order ! The right honorable gentleman is now going beyond a question. He must either ask a question or take some other course.
– I appeal to the Prime Minister to give the information and so expedite the business of the House; otherwise I shall have to take other steps.
– The Government are not going to be moved by threats.
– These are no threats; we are only asking for what we are entitled to have.
– I ask the right honorable gentleman to address his question to the Minister representing the Minister of Defence.
– I have done so without success. I shall have to move the adjournment of the House.
– I only wish to remind the right honorable member that a certain report by Mr. Swinburne is notyet on the table of the House.
– I desire to inform you, sir-
– I move the adjournment of the House, sir.
– Will you not allow the Assistant Minister to reply ?
– If he will place the papers on the table; no less will satisfy me.
– Will the Assistant Minister resume his seat? I point out to the right honorable memberfor Swan that, since he asked a question, I have heard nobody but himself speaking.
– I asked a question of the Prime Minister.
– The Prime Minister said that the matter comes within the Department of the Assistant Minister of Defence.
– All right, sir.
– If the right honorable gentleman wants information he must listen, and try to get it.
– Thank you, sir.
– The right honorable member for Swan did ask a question last week.
– On a point of order, sir, I submit that no honorable member has addressed a question to the Assistant Minister of Defence.
– No, but I have been brought into the matter.
– I submit, sir, that the Assistant Minister cannot make a statement without getting the leave of the House.
– The Leader of the Opposition has pointed out that no honorable member has asked a direct question of the Assistant Minister of Defence.
– I have been brought into the matter, though.
– Honorable members are not always aware of the proper Minister to be addressed. On this occasion a question was put to the Prime Minister, and he said that the matter comes within the Department of the Assistant Minister, and required his colleague to reply. In the circumstances, the Assistant Minister must have ample opportunity to answer the question.
– Last week the right honorable member for Swan did ask a question .
– We have had quite enough of your bluff, you know.
– I am going to answer the question. Last week the right honorable member for Swan did ask if these plans and specifications would be placed on the table of the House.
– On two occasions.
– Yes. Let me inform the House and the right honorable gentleman that the plans were not unpacked until Saturday morning.
– Whose fault was that?
– More shame to you to say so.
– The plans only arrived in Melbourne on Friday last.
– You said days before then that you had the plans.
– I did not.
– You did.
– I said that the plans arrived on Friday, and that we received the bill of lading concerning them two days before then. Seeing that the Navy Board and the Government have to deal with these plans and specifications, I think it is right that the Navy Board and the Government, and the Minister especially, should have the right to peruse them before they are placed on the table of the House.
– Mr. Speaker. I beg to move-
– Order ! Will the right honorable member be seated ?
– I wish to ask the Assistant Minister of Defence whether he will be prepared to let us have the plans relating to Cockburn Sound before the House rises for the special adjournment ?
– I shall be very pleased to comply with the right honorable gentleman’s request provided that the Minister of Defence and the Naval Board have first the opportunity to peruse the papers.
– When are they going to do so?
– They have not yet had time, because, asthe right honorable gentleman is aware, Parliament has been sitting every day.
– The plans have been in the possession of the Government since Friday.
– No, they have been in our possession only since Saturday. Sunday has intervened, and, in my opinion, it is only right that the Minister and the Board should see the papers and plans before they are tabled. I shall endeavour to have them placed on the table of the House before we rise. I wish to do what is right in the matter.
– I ask the Assistant Minister of Defence whether he is prepared to table Sir Maurice Fitzmaurice’s report? I presume it did not come in the same mail with the plans, and has been to hand for some time.
– Order! The right honorable member should ask his question, and should not comment upon it.
– Very well, sir. We want the report. I do not wish to delay the business, but if we cannot get what we want, I must say what I have to say.
– I shall endeavour to comply with the request.
Duty on Cinematograph Films - Fodder Duties.
– I ask the Minister of Trade and Customs what he proposes to do to rectify the error which, he has stated, has been made in the imposition of a duty on picture films ? I ask him, also, whether the mistake which has been acknowledged by him to have been made will not, if not rectified, have the effect of throwing 500 musicians out of employment.
-I shall look into the matter, and if it is possible to deal with one item without bringing other items into discussion, I personally think it may be done.I am inquiring to see if it can be done. As to the second question, I doubt whether anything like the number of musicians mentioned by the honorable member will be thrown out of employment.
– I desire to ask the Minister of Trade and Customs a question respecting the duty on films. On Friday last I received from Sydney a telegram which I brought under the notice of the Minister, and from him I got information to the effect that the duty would not be altered. Some telegrams then passed between me and some constituents-
– Order !
– The information contained in the telegrams has been the means of starving a factory.
– Order ! The honorable member must not make a speech.
– I think it is a serious matter, sir, as the reply given to the right honorable member for Swan has left me in doubt as to the intention of the Government.
– As I understood the question, the honorable member desires to know whether the duty on films is likely to be altered on this side of Christmas or not.
– We cannot hear what is being said.
– Order ! Will the Minister resume his seat?
– Yes, sir.
– If this continuous conversation is to go on, with all due respect to the House, I think it would be a wise thing to adjourn. I did not catch a word of what the honorable member for East Sydney said, and now when the Minister seeks to reply, the conversation is .so continuous and so loud that it is not possible for me to hear him.
– In regard to the question of the honorable member for East Sydney, following a question by the right honorable member for Swan, I stated distinctly to the deputation, and also to the House, that the rate for films was included in the Tariff. We could only get information from certain sources outside the combine and film importers, be cause we could not apply to them for information when drawing up a Tariff. The best information we could get led us to believe that the value per yard was about 6d. We adopted a foot basis, and on that value fixed a duty equal to what we considered 30 per cent, on foreign imports and 25 per cent, on imports from the United Kingdom. Since the rates were imposed we have ascertained that they are higher than what the Government intended. At the present time I do not think it is possible to have the rates altered on this side of Christmas.
– Has the Minister of Trade and Customs come to any agreement with the States respecting the importation of fodder into Australia, and, if not, do the Government intend to suspend the duty on fodder from New Zealand, when it is known that the shortage’ of fodder in Australia is relatively greater than the shortage of wheat.
– Order ! The honorable member is now going beyond a question.
– I have made a statement on more than one occasion on the subject of the suggested remission of duties on fodder. The Government approached the Premiers of the States in connexion with the matter. I saw each of them, and put the position before them. I explained what the Commonwealth Government were prepared to do. I think I saw them prior to the time when the honorable member for Wimmera waited upon me as a member of the deputation, and also subsequently to that time, because the State Premiers were then meeting in Melbourne. They all agreed that the proposal I placed before them was a fair one.
– What was that proposal?
– I explained that if the States were short of fodder, instead of each of them competing at the same time in New Zealand for fodder, and so increasing the price, they should permit the Commonwealth Government to act for them all. I said that we were prepared to do so, that there would then be only one buyer from Australia in the New Zealand market, and we could in that way get the fodder cheaper for those who required it, and it would be imported duty free.
– That is what the Government should have done in the case of wheat.
– I am stating what we have expressed ourselves as willing to do in connexion with the importation of fodder. Mr. Denham stated that there was no shortage in Queensland, and they would not require any fodder there. Later Mr. Holman sent a wire to say that they would not require any fodder in New South Wales. Speaking from memory, Mr. Peake, of South Australia, has not yet sent any reply, nor has Mr. Earle, of Tasmania. The Premier of Western Australia has informed us that in that State they desire to import 3,500 or 5,000 tons of maize, but as we have maize available on the east coast of Australia we decided not to allow maize to be imported free of duty. So far as the Victorian Government are concerned, Mr. Hutchinson, the Minister of Agriculture, in company with Dr. Cameron, saw me on two occasions, and discussed the matter. Since then the Victorian Government have not made a single representation to the effect that they desire that anything should be done in this connexion. While they stated that they were short, they apparently were not willing that the Commonwealth Government should act for them in the matter. If, as now appears, Victoria is the only State in which there will be a shortage, the Victorian Government should be able tap purchase in New Zealand as cheaply as the Commonwealth Government would have been able to do under the proposal I made.
– If the Victorian Government do purchase fodder in New Zealand, will the Commonwealth Government remit the duty ?
– Order ! The honorable member for Wimmera rose, and asked a question of the Minister of Trade and Customs, and the Minister is replying to that question. In the course of his reply, honorable members are continually interjecting, and the interjections are being replied to as though they were separate questions. That is a practice which cannot be permitted to continue.
– I thought I might be pardoned for making a full statement of the position taken up by the Government, and so avoid the necessity for the asking of a number of questions. The Government have not, so far, been approached by any State Government with a view to the remission of any of the fodder duties.
– If the Government of Victoria decide to import fodder from New Zealand, will the Commonwealth Government be prepared to remit the duty on such importations?
– Why does not Victoria import fodder from Queensland?
– Queensland does not grow what we require. Are the Government prepared to remit the duty on any importations of fodder made by the State Government of Victoria from New Zealand.
– I point out that the honorable member has now put a question which cannot be answered. Ministers cannot be asked to answer questions based upon hypothetical cases. Such questions go beyond what has been dealt with by Parliament, and therefore cannot be allowed.
– Will the Minister of Trade and Customs say whether it is not a fact that had any of the State Governments accepted the offer he made, any importations of fodder made in consequence would have been duty free to the States by which they were imported ?
– Yes, that was the intention of the Government.
– And the State Governments refused the offer.
– I will not say that they refused it, but none of them has, so far, accepted it.
– In reference to the promise made by the Minister of Trade and Customs to remit the duty on any fodder imported by the States from New Zealand, I desire to ask the honorable gentleman whether that promise will apply to any future consignments for those States?
– I have not promised, and have no power, to remit the fodder duties. A duty can be remitted only by an amended schedule being introduced. The offer to which the honorable member refers was made by the Commonwealth Government six weeks ago, prior to the Premiers’ Conference taking place, but no action has been taken- by the States with respect to it.
– I wish to ask the AttorneyGeneral, without notice, whether he has perused the further information appearing in the newspapers this morning with respect to the metal trade of Australia. I wish to know from him whether it is necessary in order to abrogate certain contracts now in existence between Australians and Germans to pass legislation in .this Parliament, or whether it can be done by a regulation or in conjunction with the British Government?
– I assume that the honorable member alludes to a report in this morning’s newspapers covering a reprint from the Financial News, of London, dealing with the matter. The position in regard to these contracts is a little complicated. The reason for this is that in form the contracts are between British subjects, whilst in reality they are between British subjects and representatives, at any rate, of the alien enemy. In order that these contracts shall be voided rather than suspended by the war, legislation will be necessary if the superior Courts of Great Britain hold that the effect of the war is not in fact to cancel the contracts. So far the Courts have declined to answer that question. It would, therefore, appear that in order to definitely settle this matter a regulation will not be sufficient, and legislation is necessary. Legislation will be necessary here in regard to contracts made in this country, and legislation will be necessary in Great Britain with regard to contracts made there. It is proposed, with the cooperation of the- Imperial Parliament, to pass such legislation in this Parliament.
– I desire to ask the Prime Minister whether h© is yet in a position to reply to the question which I asked on the 4th instant relative to the alleged mutilation of young Belgian males in a certain way ?
– As promised, the Government communicated, through the High Commissioner’s Office, with the Imperial authorities. A cablegram in the following terms was despatched to the High Commissioner’s Office on 10th instant : -
Inquiries being made Parliament with regard to rumours that Belgian males mutilated by castration. Have you any information as to whether such rumours have been substantiated?
The following reply, dated 11th instant, has now been received : -
With reference to your telegram of the 10th’ December, informed by Secretary, Belgian Committee of Inquiry, have no evidence nor any reports of such mutilation.
– Can the Assistant Minister of Defence say when the destroyer Derwent will be launched?
– It is proposed that the launching of that vessel shall take place on Saturday next.
– Will the Minister of Trade and Customs, during the recess, cause to be prepared a return showing the total quantity of wine manufactured in Australia, including sparkling, hock, sherries, ports, and all other wines, so that we may be able to ascertain what the Commonwealth is losing by the failure to impose an Excise duty on any class ot Australian wines?
– I shall do my best ta have the return prepared.
South Australian Squadrons
asked the Assistant Minister representing the Minister of Defence, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Attorney-General, upon notice -
– The answers to the honorable member’s questions are as follow: - ‘
asked the Assistant Minister, representing the Minister of Defence, upon notice -
If he will inform the House by means of a return as to the names, official positions, salaries, and allowances of all officers of the Defence Department whose salaries and allowances amount to over £300 per annum ?
– I shall be pleased to comply with the honorable member’s request, and have a report made.
Debate resumed from 12th December * (vide* page 1759), on motion by Mr.
That this Bill be now read a second time.
– I have no desire to detain the House at any length, but this is undoubtedly a measure of great importance, opening up a wide field of discussion, and increasing very considerably the taxation borne by the land-owners of the community. I am inclined to think that the origin of this Bill is to be directly traced, not to the necessities of the war, but to the thirteenth plank in the Australian Labour party’s official platform, which provides, “All Naval and Military expenditure to be allotted from the proceeds of direct taxation.” We know that the Estimates provide for increased expenditure in connexion with the naval and military defence of Australia, and, according to their own pledged platform, the Government and their supporters propose that the cost of defence shall be defrayed out of the proceeds of direct taxation. Such a proposition is grossly unfair. Our defence system benefits the whole of the community, and its cost should be borne by the community as a whole. This Bill means the raising of an increased amount by means of land taxation, and will extend the area over which our land tax legislation will apply, since Crown lessees throughout Australia will come within its scope. That is a very important extension of the principle.
– Where is that provision to be found in the Bill?
– The Prime Minister has announced that it is the intention of the Government to tax Crown lessees. An important aspect of this question is that the Land Tax Assessment Bill of 1910, as originally introduced, did apply to Crown lessees, but that-
– I rise to a point of order. I submit, sir, that there is no reference in this Bill to the taxation of leaseholds, and that the honorable member is not in order in discussing something which must be dealt with in a subsequent measure.
– The very title of the’ Bill, “ A Bill for an Act to amend the Land Tax Act 1910,” opens up the whole question of the taxation of land, whether it be leasehold or freehold property. The honorable member for Darling Downs is therefore quite in order.
– The Land Tax Assessment Bill of 1910 originally included Crown lessees, but a protest was made, and section 29 of the Act, as finally passed, exempted Crown leases. Thus for practically four years Crown lessees have been exempted; but we are now informed that certain of them are to be included in the area of the tax. If there were good and valid reasons for the House unanimously excluding specified Crow lessees from the Act of 1910, in what way have conditions changed, and what are the reasons for including them now? We have had no explanation from the Government for this extraordinary change of attitude, nor have we heard opinions expressed by the representatives of those large areas of Australia where these Crown lessees are found. The honorable member for Grey has referred to the matter, but the honorable member for Maranoa, the honorable member for Capricornia, and other Queenslanders, have yet to be heard upon this proposed change of the law, by which large numbers of persons in their electorates are to be subjected to additional taxation. This matter is particularly important to the State of Queensland, which it probably affects more than any other State. The total area of Queensland is 429,120,000 acres. In 1912, the total alienated area was 15,874,202 acres, with 9,577,037 acres in process of alienation; but the total area occupied under leases and licences was no less than 317,615,144 acres, consisting of 227,410,480 acres held under pastoral lease, 42,465,360 acres held under occupation licence, and 47,179,483 acres held in grazing farms and homesteads, the rest being held under other forms of occupation, which I need not specify. A great portion of this large area of land will be brought under the taxation proposals of the Government. The lands of the States are a legitimate source of revenue to them. It is fair and proper that the States should draw from them, iri the shape of rents from their tenants, as much revenue as they can. That is a distinct relation between the Crown and its tenants. In the fixing of rents certain prescribed conditions are laid down, and the States endeavour, as a rule, to obtain fair rental values. On top- of this relation between the State and its tenants an outside agency, so far as ownership is concerned - in this case, the Commonwealth - comes in, endeavouring to obtain revenue from the same tenants. Thus what should be the revenue sources of the States are likely to be imperilled by the action of the Commonwealth. This is a very important consideration. According to the last Land Report for Queenslandthat for 1913-
The gross area held under pastoral lease and occupation licence is 420,051 square miles, at rents amounting to £344,167 18s. Sd. per annum.
The average rent is 16s. 4Jd. per square mile. The total pastoral holdings under the Land Act of 1910 numbered 1881, at the close of the same year. The rents were £301,361 4s. 6d., or an average rent of 16s. 10id. per square mile. The matter therefore becomes very important to Queensland, because Queensland has been against the principle of the alienation of large estates in freehold. She has endeavoured to preserve these leasehold areas, very properly looking to them as a source of revenue for State purposes. The land revenue is a veryvital matter to that State. Last year it amounted to £943,135; the chief items being - Rent from selections, £439,738; and from pastoral holdings, £301,563. The Commonwealth is therefore raising a very serious question as regards the future revenues of Queensland. Another difficulty is that we have no idea how the proposal is going to work out. It is unfortunate that the Treasurer was not able to produce tables to show what the Jesuits of the proposed tax on leases was likely to be. We do not know what the Land Tax Commissioner estimates as the probable revenue from this source. We do not even know whether the tax is worth imposing, or the amount involved. So far as we are aware, it is absolutely a plunge in the dark. In the Queensland Land Act of 1910, provision is made for the granting of pastoral leases. The terms of the leases and the rent per square mile are notified. Such leases, according to the Act passed in 1910, .” may be subject to the condition that the land shall be enclosed, and kept enclosed, with a rabbit-proof fence, or subject to a condition for the destruction of noxious plants, or to both of such conditions.”’ These conditions in themselves may become exceedingly onerous. The heavy expenditure involved in clearing the land of noxious weeds, such as prickly pear, or in erecting rabbit-proof fencing, is taken into consideration in fixing the Crown rent, and if in assessing the so-called economic value these things are not taken into account, a gross injustice may be done to the tenants, and land settlement in the State may be considerably retarded. The same Act also provides that the rent may be increased by public works being executed, or by extensive mineral developments occurring. The amount of the rent when periodically assessed is fixed by a Land Court, which must have regard to the quality and fitness of the land for grazing purposes, the number of stock which it may be reasonably expected to carry in average seasons, the distance of the holding from railway or water carriage, the natural supply of water, the facilities for raising storage water, the amount which experienced persons would be prepared to pay for land in the same neighbourhood, and any other matters which, in the opinion, of the Court, affect the rental value of the land, provided that in determining the rent, regard is not had to any increase in the value attributable to improvements. The Court, in determining the rent of a perpetual lease, must have regard to other conditions. Under these proposals we are setting up an additional tribunal. In Queensland, the real owner of the land, the State, imposes terms on the leaseholder, and a properly constituted Court periodically determines the rent; and now we are to have a Land Tax Commissioner and assessors whose duty it will be to ascertain something called the “ economic value.” When we consider that the land laws vary all over Australia, it is difficult to see what the basis of the assessment is ultimately to be. Freehold and private leasehold properties are in an entirely different position, because the nature of freehold estate, and the law of landlord and tenant are practically identical in all the States, affording a certain uniformity of basis; but when we come to deal with Crown tenancies, in which policy is involved with rent, trouble arises, and injustice may result. The Crown in many of the tenancies have a view to the promotion of settlement by inducing people to go to distant places there to make the land productive; and I am afraid that the proposed tax may have the effect of retarding the realization of that policy. We have to remember that in a great many parts of western Queensland the climate is most variable, with corresponding varying seasons ; and these and other facts are taken into consideration by the State, and by those who have to fix the rents. It is for this reason that we desire to know why Queensland members, who know those areas to which I am alluding, and which have hitherto been kept exempt from taxation, are now sitting quietly by.
– The reason is that the holders of the land get it for almost nothing.
– That is not correct.
– It is; the rents are particularly low.
– The honorable members opposite knew the fact in 1910, and yet they did not then raise this cry. Is it only after three years’ operation of the land tax that they have found out that these rents are low? I am inclined to think there has been a strong division ‘in the Labour party, and that the men representing the cities have got the upper hand. I may be wrong, but I am inclined to think so.
– You can bet on it !
– When the measure before us was originally introduced, some Labour supporters - though I do not say in this House - rubbed their eyes with astonishment. “Why,” they said., “this taxation was intended to burst up the big estates in the country, and now it is proposed to tax shops and factories!” It cannot be pretended that large factory areas can be divided up into wheat areas, and the settlement of the country thus promoted. Honorable members opposite know very well why the values of properties fluctuate. To-day an area of land may be practically worth no more than a song, and yet become most valuable in times of good seasons. Many of the tenancies, in the first place, are only for a limited number of years, and bores have to be sunk, houses built, and other improvements made in order to make them productive.
– All that is allowed for.
– No doubt all that should be allowed for. We hear a great deal about “the unimproved value” of land, but, in some cases, it has a curious application. For instance, a large area of scrub land when thrown open may be of such a nature as to induce scarcely anybody to go near it, the selectors complaining that good lands are being kept back. However, men do go on to the scrub land, clear the whole of it away, make their own roads, and so forth. The whole value that is put into (hat land is put into’ it by the men themselves; and the unimproved value is probably increased by ten-fold, so that areas formerly regarded as worth not more than £1 an acre, are estimated at £10 or £12 an acre. The whole of that unimproved value has been made by the men living on the land, which, in its virgin state, always supposed to be the true unimproved state, was practically worth nothing. The occupiers, by their combined efforts, have brought about this result.
– Has the honorable member any particular area in his mind ?
– Yes; there is, for instance, the whole of the Crow’s Nest area, which was originally taken up at small values; and the same remark would apply to the prickly-pear land. The men who have given the unimproved value to those areas are now to be taxed on the added value ?
– Would the work they do not be counted as improvements?
– Some of the work would.
– But such work as you have mentioned? If work of that character is done, it will be counted as representing an outlay and an improvement.
– The original occupiers have taken up prairie or virgin soil, and cleared it.
– That will be considered an improvement, and excluded.
-But if we take the unimproved value as it stands to-day, we shall find that it is fixed far in excess of the value of the mere virgin soil. The unimproved value basis is no new thing in Queensland, and is well known in the working of the Municipal Act; and it is curious how the unimproved value rises.
– I am sure the honorable member does not desire to convey that these improvements made by the lessee or the holder will be taxable under this measure ?
– I do not say that, but I am pointing out how elusive is the real unimproved value. In the case of closer settlement, the unearned increment, instead of being added by the whole of the community, is added by the whole of the people in the particular area, who, by their efforts, build up the value of the land only to find themselves subject to higher taxation. However that may be, it is important to see what the effect of this tax may be. I find that the Prime Minister estimates this year to receive from the tax £2,700,000, while in 1913, according to the Budget-papers,’ the assessment was £1,385,319. This means that, in round figures, the Prime Minister proposes to double the taxation. I find that during the year 1912, the sum of £1,445,260 was received from land tax. Of this amount the country paid £919,805, and the cities, £525,455. Applying the same proportion to the £2,700,000 .which <the Treasurer anticipates he will receive from this source, city land will contribute £1,000,000 and country land £1,700,000. It is manifest, therefore, that if the tax proves effective in gradually bursting up country estates, town values will go on increasing, in which case the tax will fall more and more upon urban properties and will thus be passed on to the tenants and consumers. The following table has been prepared by Mr. McKay, th.e Land Tax Commissioner, for the purpose of showing exactly what will be the effect of the tax upon land-holders with estates the unimproved value of which ranees from £7,001 to £95,001: -
From the above figures it is clear that it is not so much the smaller estates which will feel the severity of the tax. But as estates increase in value, the tax will amount almost to confiscation. In the case of many pastoral holdings, the tax of 9d. in the £1 will amount to nothing but confiscation. Another aspect of the Bill which has not been emphasized during this debate, is that it is proposed to . increase the rate upon absentee landholders by a Id. in the £1. The absentee tax will thus be lOd. in the £1. It is obvious, therefore that if an absentee is getting a return of 5 per cent, upon his unimproved freehold, the whole of the income thus derived, with the exception of 2d. in the £1, will be absorbed by the payment of this tax. The impost will, therefore, press very heavily upon absentees. I ask honorable members to seriously consider whether we are so independent that we can afford to dispense with the introduction into Australia of outside capital for developmental purposes. The New South Wales Government, realizing that this is a very important matter to them, have recently wiped away the disability which was formerly imposed upon absentees. Many absentee property owners in Australia are not absentees in the sense in which we understand the word. They are not like the old Irish landlord who was accustomed to bleed his tenants. As a matter of fact, a great deal of absentee money is money which has been allowed to come to Australia to assist in developing this country. I am afraid that the increase of the tax upon these people from 7d. to 9d. in the £1 will not create a good impression on those who are willing to lend their money within the Empire in order to assist Australia. We have been asked why the British capitalist is not more loyal, why he sends his money to China, the Argentine, and almost every other part of the world, instead of using it to develop the Empire. But I am afraid that we are not doing very much to encourage the Imperialistic sentiment.
– During the past fifteen years, £500,000,000 has gone into the Argentine which ought to have come here.
– When the Prime Minister was in Queensland, we challenged him to say where he would obtain his revenue in the event of increased taxation being rendered necessary. Both he and other leaders of his party were silent on this matter whenever they addressed rural constituents. It is tru© that the honorable member for Brisbane was courageous enough to say, in a mining centre, that in such circumstances the land tax could be increased. But the Prime Minister declined to make any statement of that sort.
– He did not. He said that the money could be taken from those who were best able to pay.
– In that case, I would point out that there are very many forms of wealth in Australia. Some wealthy men own nothing but bank shares, others own stock, and others again, large factories. When the Prime Minister affirmed that the money would be taken from those best able to pay, if he really meant that it would be taken from the land-holders only, why did he not say so? Are these the only persons in the community who are able to bear taxation? Not one of the wealthy classes in Australia have the slightest objection to paying their just proportion towards the expenditure rendered necessary by the war. Throughout the Commonwealth, there has been nothing finer than the wonderfully generous contributions which have been spontaneously made by all classes to the Patriotic Fund.
– Surely this is not a war tax !
– The wealthy also have contributed according to their means. That shows that they are willing to bear their share of the burden. But the proposed increased land tax is not intended to be in the nature of a war tax. All these taxes are evidently intended to be permanent, and are not war taxes in any sense of the term. If they were merely designed to be of a temporary character, probably they would be received with a certain amount of dissatisfaction, but there would be an absence of the grumbling that we now hear. People would say, “ If you are going to levy a war tax, levy it upon all classes who are able to pay it.” It is to be regretted that these taxes are being imposed in this burdensome way. Incidentally, 1 may remind honorable members that there was no election announcement of the proposed increase in the land tax from 6d. to 9d. in the £1. On a previous occasion, the statement originally made was that the tax would go up to 4d. in the £1; but when it was submitted to the House, we found that it had been increased to 6d. in the £1. We were then told that the explanation of this discrepancy was to be found in the fact that 6d. in the £1 was on the speaker’s notes. But here, even, the excuse that 9d. in the £1 figured upon the notes of the leaders of the party opposite when they spoke of taking money from those best able to pay, is not put forward. I venture to say that this tax will come. as a surprise to the people throughout Australia. It is an unfair tax, which is being imposed upon only one section of our citizens; and, instead of proving of benefit to the community, it will be found that the Government have made a great mistake. I trust that, even at this late hour, they will reconsider their action, with a view to seeing if justice cannot be done.
– In moving the second reading of the Bill on Saturday last, the Treasurer said that the measure was necessary on three grounds. Firstly, he said that more revenue is required; and, secondly, that the State was entitled to a certain proportion of the unimproved value of land; and, thirdly, hfc said that it was necessary to tax Crown leases, which is a new principle in the Commonwealth land taxation. I was pleased to hear the unanswerable and irrefutable arguments of the honorable member for_ Darling Downs in respect to the unimproved value of country land, because when the Treasurer was saying that a certain proportion of the increment to the value of land belonged to the community generally, seeing that it had been created by the community at large, I had interjected that his argument was fallacious in respect to country lands. I repeat that statement now. My experience of country districts is sufficient to tell me that the old argument in reference to the increment to the value of land has no foundation, and cannot be demonstrated. The farmers themselves are responsible for creating the unimproved value of land by their co-operative effort, and by the application of intelligence and industry in cultivating the land and drawing from it as much as it will produce.
– Do not railways add to the value of land ?
– I shall deal with that point later. My argument is that the increased value is given to land in a given area by the co-operative effort of the farmers within that area adding to the productivity of the soil.
– Are not the farmers’ efforts represented by improvements - even the added fertility.
– Under the existing Commonwealth laws the definition of unimproved value is sufficiently wide to give every opportunity to the assessors to arrive at the full value of the tangible improvements on land.
– The chief trouble is that no one can properly assess them.
– Not with absolute accuracy; one can only act according to hia own judgment, but I think that under the administration of the land tax a fair value has been given to improvements. However, I leave that point on one side. I say that the unimproved value, or the capital value, which includes the unimproved value, of land in a given district is brought about, not by any particular effort on the part of the community as a whole, but by the cooperative effort of the holders of the land.
– Do you speak of the market value of the land ?
– The market value of the land includes the unimproved value. We have been told that the building of railways and the construction of water channels in particular districts have given to the land an added value which belongs to the State, seeing that the State has spent money in the construction of these public works; but this is another fallacious argument. Every one knows that a railway traversing broad agricultural lands, particularly wheat-growing areas, is a paying concern. The railways tapping the wheat country of New Souths Wales are among the best paying lines in the State. The same remarks apply to Victoria, South Australia, and Western Australia.
– Wheat cannot be grown profitably without railways.
– The honorable member, if he had been listening, would have understood the trend of my argument. I am dealing with the effect of public works construction on the value of land. Railways which run into agricultural lands and wheat-growing country especially pay, not only working expenses, but also interest on the cost of construction, and they can only do this because of the productiveness of the soil due to its cultivation by the farmers.
– You cannot get that productiveness without railways.
– But the State has only entered into the business trasaction in running a railway into a district in order to take away the wheat. The State benefits because the productivity of the soil helps the railways, finds employment for the people, and gives, not only sufficient grain for local requirements, but also a surplus for export.
– The railways put the value on the farm.
– How can that be said when the building of a railway into an agricultural area is purely a business proposition on the part of the State, seeing that railways enter into agricultural areas, pay working expenses, and also interest on the money spent in building them?
– The farmers are not the only contributors towards the revenue of those railways.
– The farmers are the chief contributors. They supply the grain the carriage of which makes the railways paying propositions.
– But the farmers cannot farm successfully without railways.
– I do not combat that statement. In the same way we cannot carry on a nation with all its production and commercial relationship unless there is mutual inter-dependence; but, at the same time, speaking in regard to railway construction and the unimproved value of agricultural land, let me say that agricultural railways are business propositions, and the fact that they pay interest and working expenses is due to the efforts of the people holding the land. No more credit is to be given to the State for constructing railway lines than for carrying out any other business proposition.
– How does your argument apply to cities?
– I am now discussing agricultural lands, and I have no desire to be thrown off my line of argument by references to the cities which I shall deal with later, but at the same time I do say that there is too much centralization, and too much regard to city interests. My remarks upon the building of railways into agricultural districts also apply to the construction of water channels. These are paying concerns.
– What about the million pounds of bad debts that had to be wiped off in Victoria ?
– That was entirely due to faulty administration. I do not know whether the honorable member waa in the State Parliament that passed the laws which permitted this faulty administration, but if he was, he participated in that administrative blunder. I certainly hold that the railways should be held by the States; I also hold that water channels should be constructed by the States, and I admit that the construction of these public works have made possible more efficient work by the agriculturists, and rendered the soil more productive, thus making agricultural land a greater asset to the community, in which sense there has been mutual advantage to the State and to the farmers. But the unimproved value of agricultural land is due to the pluck, enterprise, and intelligence of the owners of the land in cultivating the soil, and supplying the grain for its transport on the railways.
– Do you not believe in taxing unimproved values ?
– I agree with any tax which is fairly distributed in order to carry on the services of government, and I believe that if we are to have a tax on” land the fairest method is to tax the unimproved value, because there we tax something tangible. I do not object to any form of taxation at the present moment, but I maintain that it should be spread over those best able to bear it. There are occasions when taxation should be spread over the whole of the community, when the whole community should be called upon to bear a reasonable amount of sacrifice in accordance with ability to bear it, just as in the present crisis the whole community, according to ability, should be called upon to bear a share in the war expenditure. It was also stated by the Prime Minister, when moving the second reading, that the land tax of 1910 had succeeded in bursting up large estates. I should like to know how far it is possible to burst up large estates which cannot be used for cultivation purposes. I am willing to admit that if a man holds a very large pastoral estate in the midst of a community of agriculturists, to which estate a cultivation value has been given by those agriculturists, and by the construction of railways and water supply channels, he has participated in an unearned increment to that land.
– Conferred by roads and bridges.
– The estate owner pays for them through the municipal rates. I make this main exception from the argument I put forward a little while ago in the case of large estates situated in areas that are fit for subdivision for cultivation purposes, and I dare say that a heavy tax will eventually have the effect of causing such land to be subdivided for cultivation. But the great bulk of the large estates in Australia are in districts where there are no railways, or are beyond the rainfall necessary for cultivation. How are we going to burst up those estates? If honorable members impose a tax heavy enough to burst up the few large estates which are in cultivable country, they will, for every such estate, confiscate the rental value of twenty” other estates that cannot be subdivided, because they are beyond the region of wheat-growing. That is the cruel and indiscriminate phase of this taxation, and that it has that effect is proved by its operation. I took the trouble to investigate the figures in order to ascertain how far the tax has succeeded in making land available to those men who were desirous of cultivating the soil, but were unable, under existing conditions, to get holdings. For South Australia the figures were available only up till 1910, so that it was impossible to make any comparison with earlier or subsequent years, but I have the figures for New South Wales, Victoria, Western Australia, and Tasmania.
In 1908, two years before the imposition of the land tax, there were in New South Wales 73,824 holdings of less than 1, 000 acres. In 1910, the number had increased to 77,765, an increase of 3,941. In 1912, the latest year for which figures are available - that is two years later than the period taken before the imposition of the tax - the number of those estates had risen to 81,531. I have chosen estates of 1,000 acres and less as being those which may reasonably be taken as representing the scope within which the effect of the tax would be shown. In the case of New South Wales, there was an increase from 1910 to 1912 of 3,766. In Victoria, the number of holdings in 1908 was 49,052; and 1910, 54,818- an increase of 5,766; in1912 the number had risen to 61,029, or an increase during those latter two years of 6,211. In Western Australia the number in 1908 was 8,923, and in 1910, 9,669- an increase of 746; in 1912 the number was 11,050, representing a further increase of 1,391.
– The tax could not have been very burdensome.
– I will come to that point in a moment. In Tasmania, in 1908, there were 11,649 of these estates, and in 1910, 12,562, an increase of 813. In 1912, the number was 12,996, or a further increase of 434. The totals for the four States I have mentioned were - 1908, 143,448; 1910, 154,814; 1912, 166,606, or an increase during the first two years of 11,266, a little over 7½ per cent., and, for the last two years during which the tax has operated, of 11,902, again about 7½ per cent. Those are all estates of 1,000 acres and under.
– Give us particulars of the 10,000-acre estates.
– I do not wish to go into the figures for the larger estates, because the effect there is obvious.
– What do you desire to show by those figures?
– I desire to show that while this land tax has drawn large sums of money from the pockets of the land-owners, it has not had the effect of bursting up large estates to such an extent as to enable those people who, according to the Government, are looking for land, to obtain it. But in connexion with estates that cannot be subdivided, the tax has operated to the extent of, in some cases, taking away half their revenue. Many such estates have had to pay taxation which was ruinous.
– But still the owners hung on.
– They could do nothing else. The fact is that the 18,000,000 acres mentioned in the Taxation Commissioner’s report as having been subdivided, and which was so much talked about during the last election as having been the result of the tax, has been chiefly due to the subdivision of large estates amongst the family in order to get the benefit of the lower rate. If honorable members will consult the figures they will find that there has been an appreciable decrease in the estates of over 50,000 acres, and an increase in estates of between 30,000 and 5,000 acres. That is mainly the result of family subdivision.
– If the honorable member were a member of such a family, would he not regard it as a good thing ?
– Sometimes a father hangs on to land when he would do better by subdividing it among his sons; but that is a family matter, not a State matter. The argument of the Labour party was that land previously was not being made available for settlement, and that the imposition of a tax would burst up the large estates and bring about their occupation by small land-holders. The large estates have been reduced in area, but a class of big land-holders has been created which is more numerous, and with more political power than have the holders of estates of 20,000 or 30,000 acres and over. What are known as ‘ boss-cocky” farmers have been enormously increased in number, but the small holders have not increased.
The Commonwealth is not empowered by the Constitution to make laws respecting land matters, but the Labour party has found, in these taxation proposals, a way of bringing about an equivalent to land nationalization. Henry George, the great apostle of the single tax, believed in the confiscation of rents, and when dealing with the Irish land question was even more a ‘ ‘ whole hogger ‘ ‘ than when writing his Progress and Poverty, in which he said -
I do not propose to purchase or confiscate property in land. The first would be unjust, the second is needless. Let the individuals who now hold it still retain, if they want, possession of what they are pleased to call their land. Let them buy, sell, or bequeath it. We may safely leave them the shell if we take the kernel, lt is not necessary to confiscate the land ; it is only necessary to confiscate the rent. In this way the State may become the universal landlord without calling herself so, and without assuming a single new function. Land would be really common property.
The proposed taxation is an instance of the application of the confiscatory method. If you take the rent of land, you take its value. That is the principle underlying this tax. I know that it is being applied now only to very large holdings but when the opportunity, or what may be considered the necessity, arises, it will be applied to smaller and still smaller holdings, until its application touches the very smallest. Although, as previously stated, the Commonwealth has no power to deal with land matters, the Labour party is using this principle to bring about the nationalization of land, and, in the words of “Henry George, to make land common property.
It has been said that the tax will not bring in the amount which has been estimated that it will yield, but I think that it will bring in that amount. Those on whose land the tax is imposed must either find the money to pay the tax, or they must throw their land on the market. As there is no market at present, the probability is that herculean efforts will be made to find the money, for this year at any rate. But that could not go on indefinitely. Why is extra taxation imposed in this, the very worst year for the selling of land, unless the reason is that honorable members wish to destroy the value of these large estates 1
– We may tax one man off the land, but we cannot tax another man on to it.
– That is so, and the facts show the insincerity of the Government’s proposal. Ostensibly, and according to the Prime Minister’s statement, the tax is imposed to burst up the large estates, but, at the present time, it is impossible to sell land, because there are no buyers. It has been stated that the tax on leaseholds will not bring in as much as it has been estimated to yield. The area of the Commonwealth is 1,903,731,840 acres. Of that, 154,724,120 acres, or 8.13 per cent., have been alienated, or are in process of alienation, and 858,932,085 acres, or 45 per cent., are held under lease or licence. It would require but a very small tax on the leased area to yield £500,000 a year. An area of 890,000,000 acres, or 46 per cent, of the total area of the Commonwealth, is unoccupied. Some figures which I gave the other night were challenged by the honorable member for Indi. I made,among others, the statement that there are over 700 persons paying land tax in the Wimmera constituency, and I have since verified that statement. The proposals before us do not seriously affect my constituency, and in attacking the Bill I am espousing an unpopular cause, because the big land-holders, being few, have few political friends, and little political influence.
– They generally succeed in making the small land-holders think that their interests are identical.
– If they did, no country constituency would return a Labour representative. It is because the land-owners themselves are unable to make common cause,’ and unanimously agree as to where their political interests lie, that Labour members are returned for country constituencies. It is the very want of unanimity among land-owners which enables the Labour party to get possession of the Treasury benches. That is where the mistake comes in.
– Where do you get your votes from ?
– I said a little while ago that this is not a very considerable factor in my constituency. I am not talcing it up as a constituency question, but as a matter of equity and justice, because I believe that this Parliament should not lend itself to the perpetration of ruthless injustice, as it is asked to do by this increase of the land tax. The honorable member for Darling Downs has quoted some figures to show the increased taxation, but I propose to give some figures in a more amplified form. On the first £5,000 worth of taxable unimproved value, the old rate was £24 6s. Id., while the new rate is £27 15s. 7d.
– What is the total value of the estate ?
– In the table I am about to read I take the taxable value with an exemption of £5,000, and that ought to be clear enough to suit any person. I am not employed to go round valuing particular estates. I ask honorable members to listen to the table -
– That may be an indication of what is coming. I should say that there is every indication that, if this increase will not do, a further increase will be proposed.
– If I had my way, I would have doubled it.
– I always give the honorable member credit for frankness. He says what he thinks.
– But he is a leaseholder. Mr. Page. - Never mind about the leases.
– How many persons pay the land tax?
– Sixteen thousand or 17,000.
– Out of a population of 5,000,000 in a young country.
– This Parliament is the custodian of the rights and the privileges of the whole community. It ought to hold the balance of justice equally between all sections, and if any section of the community is- oppressed, it should see that the oppression ceases. The inherent sense of justice which should reside in this Parliament ought to protect every interest in the community. I think that a man who holds too much land which is fit for cultivation should have some opportunity to get rid of it, or the State should purchase the land for the purpose of closer settlement. No matter what a man’s property may be, if it has been honestly acquired it is his own, and the State has no right to employ the power of taxation in order to destroy that property.
– He ought to pay his fair share.
– It is not a question of a man paying his fair share; it is, in many instances, a question of confiscating the whole of the income from a property; consequently it becomes a piece of public robbery on the part of this Parliament, which should be the great tribunal for the protection . of the rights of every section of the community.
– A few years ago I heard you say this; but not one of the landholders has gone insolvent.
– How can the honorable member tell?
– Well, take a look!
– Another injustice is that no consideration has been given to mortgages. A man’s holding may be mortgaged to the extent of 50 per cent, of its value, but no allowance is made for that fact, and he has to pay land tax on the full value. I venture to say that, in the case of many estates, an injustice is done. I have no sympathy for a man who holds out of use land which is fit for cultivation. A man who holds £100,000 of land locked up in the midst of a community of agriculturists, which, if placed under cultivation, would return four or five times the value in production, and employ much labour, stands in a different relation from a man who has £100,000 at interest. The latter is, perhaps, helping to foster or develop some enterprise. I admit that the large estates fit for cultivation should be dealt with. They should be dealt with, not by way of confiscation, but by way of purchase by the State for the purpose of closer settlement. That, I venture to say, is the best method of inducing settlement. Any person who has studied the history of closer settlement in_ Victoria knows perfectly well that the settlement brought about by the purchase of estates lias been infinitely more successful than that which was brought about by the private subdivision of estates.
– The honorable member knows ‘that in Australia there are areas of land which must either be in large holdings or under no occupation.
– I am very glad that my honorable friend has reminded me, for I had intended to deal with that point.
– Do you say that in Victoria the policy of closer settlement has been a success ?
– The policy has been a great success in this State, and the honorable member for Kooyong was one of the first to introduce it.
– How much land has it settled; and how much has it cost?
– I know that under the Closer Settlement Act some hundreds, probably thousands, have been settled on the land in Victoria.
– How many millions has it cost?
– When the Government purchase an estate, and they have, say, 100 allotments to let out, they call for applications, and put 100 men on the land. Of that number, there are some men who necessarily are not fit for cultivating land, but who might do very well in other occupations. We hope that a large majority of those who go on the land will succeed, but a percentage will fail. Because of the failure of a percentage, some persons who have only one idea in respect to the policy of closer settlement write it down as a failure generally. I have been arguing in connexion with estates which are fit for cultivation. I venture to say that if the Commonwealth Government were to instruct their officers to prepare for the House, as I think should have been done before this measure was introduced, a return of the number of estates which are fit for cultivation, and could be subdivided, honorable members would be surprised to learn the small number of such estates among the large holdings. I say that this is an illegitimate and misleading proposal for taxation, and I believe that if the estates which could be advantageously subdivided were enumerated, it would be found that, for the purpose of closer settlement, the different State Governments could deal with them without the slightest difficulty. The bulk of the lands on which this confiscatory tax will operate are outside the wheat-growing areas. They are situated in dry districts, are fit for grazing only, and cannot, in any circumstances, be subdivided for closer settlement purposes. The imposition of this tax will confiscate the values of those estates, and will do nothing to further the professed objects of the Government in the direction of their subdivision for closer settlement. The Government have seen fit to introduce in Australia, for the first time, the immoral system of the total confiscation of the values of landed property held by a section of the community. This is the beginning of a system which may have very far-reaching effects, and may be extended to other sections of the community, who should be able to look to this Parliament as the great champion of the rights of all sections. I am speaking chiefly with respect to country lands. City people can, no doubt, have their case represented, if necessary, in this House. It has been stated in the course of our debate that the tax in the case of city properties will be passed on to the wageearners in the form of increased rents, or of the increased price of goods which they must obtain from retail establishments. Generally speaking, that will be so, but one effect which the imposition of the tax will have in the case of city lands is that it will discourage enterprise in the construction of buildings which would add to the beauty of our cities and be of general utility for commercial purposes.
– Building construction in Sydney this year has been phenomenal.
– The proprietors of land in Sydney trusted the Government, and spent their money like Britons, but, if they had known that a tax’ of this kind would be imposed, only a percentage of the money which has been spent upon the construction of buildings there would have been invested in that way. I can supply honorable members with some proof of this in a statement made by a man who has had a large experience of city business, and knows what he is talking about. Mr. Arnold, of Melbourne, in an article published in the Argus of this morning, says -
I will give an instance of how it has operated on a property in Melbourne. The unimproved value is assessed at £46,000. The buildings are out of date. It cannot be subdivided to advantage. It is unsaleable because of the tax, not because of the tax upon it as separately owned, but because (as it would require an expenditure of £80,000 to properly develop it) only a company or a wealthy man could handle it. A mercantile company that required large office accommodation was in treaty for the purchase of the property, and had instructed its architects to make a plan for a building to cost £S0,000, but when it found that, owing to its present holding of land being above £75,000, its tax would be £1,175 per annum instead of £404 as paid by the present owner, it “ turned it down.” Under the proposed law the tax would be £1,762, if it purchased. That is one case of many. I know of many cases in the city where the tax has prevented owners from building.
It is clear from this that the imposition of the tax is likely to discourage enterprise in building in our cities. I wish again to express my regret that, in the present circumstances, the party in a majority in this Parliament should use their power to introduce a system involving the confiscation of land values and rent values of a section in the community to whom they are politically opposed. This proposal marks the first stage of an advance towards the objective of the policy of the Labour party. They are aware that, under the Constitution, the Commonwealth can own no lands, but they are using their power to-day to bring about practical nationalization by the introduction of an immoral system for the confiscation of the rents of land values.
Sitting suspended from 1 to 2.80 p.m.
.- I am somewhat unwilling to prolong the debate, because I had an opportunity to speak to the resolution covering this measure; but I find myself unable to allow the motion for the second reading of the Bill to pass without protesting in the strongest possible manner against it. I cannot understand why the Government should desire to increase the taxation borne by those who have previously been specially selected for taxation, and more especially on an occasion like the present, when they are suffering great disabilities by reason of the widespread drought. One would have thought that the original land taxation was sufficiently drastic, particularly as it gave no relief to those whose estates were heavily mortgaged, in contradistinction to those whose properties were free from any encumbrance. Those without the burden of a mortgage upon them might be able to pay the tax, but one can readily understand that, in respect of an estate which is heavily mortgaged, the difficulty of ‘ meeting it is materially in creased. We have heard all over the country, and especially in this House, that the main object which the Labour party had in view in proposing land taxation, namely, the promotion of closer settlement, has proceeded satisfactorily. It has been asserted by Labour members throughout the Commonwealth that an immense area of land has been brought under closer settlement by reason of the Federal land tax. That was the primary object of the original Act. But that fact was not set out on its face, for the reason that we have no power under the Constitution to do anything with regard to the occupation, settlement, or disposal of the lands of the country. In these circumstances, it was necessary, in the opinion of the Labour party, at the time, to achieve by a circuitous process an invasion of the rights of the States that which they could not otherwise secure - to impose taxation with the ulterior object of promoting closer settlement. On this occasion, we have not heard anything from the Prime Minister, who is in charge of this Bill, as to closer settlement. We have heard him speak of the need to obtain more revenue; but he has said nothing whatever regarding closer settlement. If the reason for the imposition of this extra taxation is that the original tax has not fulfilled the object which the Labour party themselves have again and again declared that it has fulfilled - the ulterior object of enforcing closer settlement - it should have been clearly stated.
– Will this tax have that effect 1
– The Labour party have said that the original Federal land tax has proved absolutely efficacious in this respect. I dare say that they will be asserting by-and-by that the original taxation has not gone far enough in that direction. If that is the view held by the Prime Minister he should tell us. There can be no doubt that the original object of this land legislation on the part of the Federal Parliament - legislation which invaded the rights of the States to whom it was thought land legislation had been reserved - was to allay the clamour that the States were not doing their duty in providing, as they should do, for closer settlement. It was upon that ground that it was urged that the Federal Parliament should enter an arena which was not theirs under the Constitution. It has been openly said in this House that the object of the original Act was to bring about what is commonly called the bursting up of large estates - to bring it about by taxing large estates out of existence, and compelling the owners to get rid of them. That, too, is the object of this Bill. What has already been said several times in this House and elsewhere, is, in my opinion, perfectly accurate - that it is beyond the possibility of refutation that the war has been seized upon by the Labour party as offering them an opportunity to advance their destructive and vindictive policy, on the false pretence that this legislation has been rendered necessary by it. I have no hesitation in saying that this Bill is intended to carry out the policy of destroying large estates, and that it has nothing whatever to do with the war. The war in which, unfortunately, the Empire is involved, is being used speciously as a plea to prosecute a class war in a most aggravated and vindictive form. That statement has been made in this House and elsewhere over and over again, and has met with no response from honorable members opposite.
– It is not correct.
– Ever since Federation, the Labour party have been trying to undermine the Constitution - to usurp powers which were never given to this Parliament, and to make use of them for their own party purposes. In this Bill, we have a further deliberate attempt to control and regulate the occupation and settlement of the land. That, as every one knows, is not within our constitutional power. Here we have an invasion of powers that were retained by the States. I use the words “retained by the States “ advisedly, because it seems to be forgotten that all the powers we possess have been given to us by the States. This action on the part of the Government, with the object of annihilating one of the powers of the States, is neither just nor generous. No one has shown, or attempted to show, that there is any necessity for the imposition of this additional land tax for revenue purposes during the present year. Nor do I think any one will be able to say, or dare to say, that this tax on all land-holders who have more than £5,000 worth of land is, in this year of drought and difficulty, either necessary or justifiable.
We have heard from the Prime Minister himself, on more than one occasion, that this proposed additional tax upon land, and tEe probate duties, have nothing to do with the war. We know these two additional taxes have nothing to do with the war debts, because the war expenditure is provided by a loan of £18,000,000 from the Imperial Government, and provision has to be made in the Estimates, chargeable to revenue, for the interest for the current financial year, upon that portion of the amount which will be used during the year. Although the Prime Minister is not here, I wish to ask him whether he will deny the statement, made by himself and several others during the debate, and very pointedly made by the honorable member for Corangamite on Saturday, that the additional land tax is imposed in order to destroy the large land-owners. Will he deny that that is its main object ? Will he say that it has been imposed solely for revenue purposes?
– He said on Saturday that it -was for bursting up purposes.
– That is exactly what I believe it is.
– It will perform a very useful purpose, anyhow.
– That is a very useful admission. I think it is the first thing the Minister has said since he attained Ministerial rank, and it is quite worthy of him.
Another and very serious aspect of the matter is the double taxation by the Commonwealth on the one hand, and the States on the other. The framers of the Constitution never contemplated this double taxation by the Commonwealth on the same land or the same property that is already taxed by the States. It is a fraud on the Constitution, and really wicked.
– That is very strong language.
– It is by no means too strong. It is the truth, and it must result either in the unification of Australia - for we cannot have two taxing machines dealing with the same people - or in the destruction of the Federation itself. The States will not stand it, and if this sort of levy is imposed upon people, the States will have to secede from Federation. We must either have one taxing machine, or the States will very soon be driven to secede from the Federal compact which has been invaded, or sought to be invaded, for many years by the action of the Labour party.
– The States can drop some of their fripperies such as imported Governors.
– I do nob think those are the worst features of the case. How can the people of the States endure taxation by their own Legislatures, in avenues which the States consider to be theirs, like the land tax and probate duties, with the Commonwealth stepping in and imposing heavy and ruinous additional taxes ? It is impossible for them to endure it, and it is unreasonable to expect them to stand it. Some arrangement will, therefore, have to be made very soon to prevent this double taxation. If it does continue, it will be hard to know what will be the result, because the people will be ruined.
– And this tax taxes the States’ own leasehold lands.
– There is a proposal to tax leasehold land, and it is hard to know where the thing will end, because the Labour party are apparently only beginning. The destruction of the States as entities is going on. It began with land taxation, it has now reached the probate duties, income .taxation will come next, and so it will go on all along the line. It must end in either Unification or the destruction of the Federation. I, therefore, sound this note of warning. I would rather not be federated at all than be robbed in the way the States are being robbed by this dual system of taxation. I am not surprised, because almost from the beginning of Federation the Labour party as a party - I am saying nothing against individuals, because they are all one, and have to do what they are told whether they like it or not - have been striving to undermine the Constitution. The climax has already been reached. If it has not, it very soon will be, because if this system of double taxation is persisted in, Federation must be destroyed. Some honorable members opposite may think this taxation is necessary for revenue purposes during the present financial year - and, of course, under our Budget system we provide only for the current financial year, each year having to stand on its own bottom, just as it does in the Old Country - but it is not. Each year provides only sufficient for its own requirements. Each year ought to be kept distinct from the other in that it ought to finance itself. If there is any reason why it does not, it ought to be dealt with by the Parliament for the coming year. Does any one on the other side of the House suppose that if the Labour party had not come back to power - as, unfortunately, they did - the Budget of the Treasurer of the Liberal party, whether it was myself or any one else, would have included either of these proposals ? Do they think we should have put an extra burden on the land-holders, or invaded the arena of the probate duties of the States?
– You would have put a tax on tea and kerosene.
– The Labour party will impose those taxes yet, if word goes forth to that effect from the Caucus which meets in Hobart or Brisbane. If that happens, every honorable member opposite will have to obey. They are not their own masters, and they know it, as every one else does. Some forty or fifty men meet in Brisbane, Hobart, or Sydney, and lay down a platform to which honorable members have to subscribe nolens volens.
– Imitation is the sincerest flattery !
– Notwithstanding the interjection about tea and kerosene^ - with which we can deal when we are called upon to do so - had I been Treasurer, I should have submitted neither of the proposals placed before us by the Government; because, in my opinion- and I ought to know a little of the matter - there is neither necessity nor justification for such a course. The Labour party, as an organization with a solid phalanx in this House, are showing now, as they have often shown before, that, according to their policy, no one ought to prosper or acquire wealth in Australia. That certainly is the logical result of their policy; and if a man does prosper and acquire wealth, they offer every inducement to him to invest that wealth elsewhere. Of course I know it is not the personal policy of members of the Labour party, but it seems to be their public policy that every one shall be poor, or, at any rate, that there shall be no rich man here. This, as I say, is not the personal and private policy of honorable members opposite, because, as I know, they are as eager as any one to acquire wealth; but we do not find them with a word to say for the man who, with industry and economy, has acquired even a moderate competence. They seem to think that such a man should have his land divided up, or taxed as heavily as possible; in short, the idea seems to be that such a man has no right to exist and retain what he has acquired.
– That is not fair!
– The honorable member had better be careful before he gets up and says that he is in favour of persons owning large properties, for I warn him he may get into trouble. The policy of the Labour party seems to be that there shall be no ambition or desire to excel. Who made this country?
– Men like you, Sir John!
– I thank the honorable member, but, at the same time, I may say that I have not acquired an undue amount of wealth. If a man may be pointed out as rich, or as having done well, how has he acquired his position? Very often by spending a quarter of a century under a tropical sun, enduring all the disadvantages and hardships of settlement in an isolated part of Australia. Why not show some sympathy for those men who have secured for themselves a ‘position by the exercise of industry, self-denial, and economy ? Whatever may be the personal ideas of honorable members opposite personally, what I have said is the general trend of the policy of the Labour party; and, while tEat policy might lead to what some would regard as a Utopia, it would not make Australia the home of an enterprising and self-reliant people. How long will the people of the country endure this policy of spoliation and prejudice? How long is it to be allowed to continue in this fair land of ours? Surely, with our sparsely settled population of 4,000,000, there is plenty of room for every one! Why envy the lot of the few people who have got land, when there is plenty for all here, and millions more? Why place obstacles in the way of people investing their capital in Australia ? The absentee tax on those who may choose to live away from Australia is selfish, but it is not so bad or unwise as to tax people who have never been in the country, but who send their money here for investment. It is a narrow policy, after all, to tax those who are in a position to do us good. Any man who draws money from investments in Australia, Argentine, the United States of America, or Canada, has always a good word for the particular country that yields him his income, and we are more likely to get benefit from him as a walking advertisement by treating him generously or fairly than by victimizing or persecuting him in his financial operations. After all, a comparatively small amount is obtained from the absentee taxation, and it is not worth the discontent and odium that result. A tax of 9d. in the £1 in the case of residents, and lOd. in the £1 in the case of those who happen to be away from Australia for more than, I think, a year, seems to me a sort of persecution that is neither wise nor desirable in our circumstances. I have heard that the decision to impose this tax was not unanimously arrived at by the Labour party, but that some honorable members considered it unjustifiable to place a further impost on land already heavily taxed. But what does that matter, for differences of opinion upstairs amount to nothing in this chamber? Honorable members opposite are like “ dumb, driven cattle; “ when they get into the pen they have to vote solidly.
– The honorable member ought not to make a direct reference of that kind to honorable members.
– I used it merely as a sort of poetical illustration; but, however, I am sorry. I should like to see honorable members opposite show that independence which I am sure the honorable member for Gwydir, for instance, would like to show, and break away from this power that is squeezing the liberty and independence out of them. It may be thought by some that this taxation would give rise to increased employment, but the people who have to pay this additional taxation will find it all the harder to provide work. In any case, we have some £18,000,000 ready to lend to the States for the purpose of finding employment, and this will go a long way to easing the strain, with trade hampered, no doubt, by the war, but hampered to a larger extent by the drought. I have no more to say, except that these taxation proposals are, in my opinion, unnecessary, unwise, and unjustifiable, and that they have been imposed in order to still further penalize those whom the Labour party have doomed to destruction and ruin.
.- Had we received any sort of assurance from the Prime Minister when he placed this Bill on the table of the House that it would limit the operation of these provisions to the duration of the war, I, on behalf of the men on the land in New South Wales would have hesitated very much indeed before criticising it. But in view of the fact that the Prime Minister has given us to understand that the tax will be permanent, I am bound to say that, in my judgment, it is not a fair and equitable impost.
– Who has to pay it?
– If the honorable member considers that it is a fair and reasonable proposal that only 16,000 persons in the Commonwealth should contribute the whole of the money which is represented by our share of the expenditure in the war, I, for one, cannot agree with him. The men on the land have never shirked their honest responsibility in the matter of defending the country in which they live, and if this tax were limited to the duration of the war, very little criticism of it would come from outside. But there is one other phase of the question which has struck me as being rather remarkable - I refer to the cool affirmation by the Prime Minister that a flat rate should be levied upon estates of very large value, whilst upon estates of smaller value the taxation should be of a progressive character. That seems to me an entirely new doctrine from that which honorable members opposite have promulgated outside this chamber. That a flat rate should be imposed on an estate valued at, say, £75,900, whilst a progressive tax should be collected upon an estate which is worth only £69,000, seems to me to be such a remarkable proposal that I would like to hear it justified. I believe that the Government are not fully acquainted with the effect of what they themselves propose, and should an opportunity be afforded me in Committee, I intend to move an amendment which will provide them with a chance of thinking over this matter for some months to come. I now wish to say one or two words on the extraordinary proposal of the Govern ment to tax leaseholds^ As one who knows something about the land - although I do not pretend to be a Sir Oracle upon it - I ventured the other day to ask a question, because I was desirous of ascertaining how the tax is to be imposed, and how leaseholds are to be capitalized, in order to determine the basis of taxation. I was extremely surprised to learn that the Attorney-General’s suggestion was that the rent should be multiplied by 22^, that the resultant should be on a 4~k per cent, basis, and that the value of certain improvements should be deducted. Is it not known to most honorable members that a very large proportion of leaseholds in the different States are located within a scanty rainfall area - indeed that the great majority of them are within the 5 -in. rainfall area? These leases cannot come under any but pastoral occupation, and if we attempt to make the conditions applying to them too onerous, there is no doubt that they will go out of occupation. That is not a desirable thing at the present day.
– It will take a majority of them all their time to hang on during the present year.
– I am perfectly sure of that. To compensate for the circumstance that adverse climatic conditions obtain in respect of’ these leases, it is necessary that the area embraced in them should be large. What do we find? In New South “Wales there is one division which is limited entirely to leaseholds. It is commonly known as the western lands division, and I affirm that there has been a greater aggregation of estates under the leasehold tenure than there has been under the freehold tenure.
– Because the lessees have not paid a fair rent.
– When the Western Lands Commission came into existence as the result of the Act which was passed at the instance of the late Mr. Crick, the first thing which it did was to review the rentals which the lessees were paying, and in 80 per cent, of cases those rentals were reduced by almost 50 per cent.
– But the Commissioners increased the value of the improvements which the lessees had to effect.
– I am astonished at the manner in which the economic rental under this Bill is to be arrived at. The other day I asked -
How will the annual value of leas.es be assessed under the taxation proposals?
The reply of the Treasurer was -
The annual value of Crown leases will be assessed at the difference between the lease rent paid to the Crown and the economic rent fixed in respect to leases generally by the Land Tax Assessment Act 1910-12, at 44 per cent, capital unimproved value of the land, as at the date of assessment.
Now we know that in New South Wales the genius of leaseholds is the periodic reappraisement of rents. It is quite true that in that State the Government, in order to meet certain conditions, have increased the periods between which reappraisements take place. Originally these reappraisements occurred every ten years. Lately they have been extended to twenty years. What is the meaning of the reappraisement of a leasehold rental, if it does not represent an effort on the part of the Crown to arrive at its economic value? What will be the result if this Bill becomes law? We, in the Federal arena, will drive a wedge into a State right, and the States in self-defence will have to close up the periods of reappraisement - which in past years they have extended - in order that they may obtain some of their own. The consequence will be that the measure will act in an injurious way on all leaseholds.
– What leases are reappraised every ten years?
– The homestead selections used to be.
– But what leases are now re-appraised every ten years?
– I have already said that the period has been extended to twenty years. But the point I wish to make is that t’.ie mere fact of having a reappraisement of rent is a deliberate effort on the part of the State - which, I take it, knows its own business - to arrive at the economic value that time has added to the original impost on a lease.
– Was it not the Labour Government that extended the period ?
– Yes, the McGowenHolman Government.
– And the Federal Labour Government are now about to get it reduced again ?
– Yes; they are driving in a wedge which will cause the State
Government to shorten the period between re-appraisements in order to get something that is their own. What are the improvements that are to be deducted from the figures which will ultimately be the basis of the rental is also an important matter, because improvements worth, say, 2s. 6d. an acre may, in a few years, give added value to the lease to the extent of £1 an acre. Is that added value to be included among the amounts to be deducted ? We hear no voice from the Minister on that matter. In reply to the following question submitted -
Will the unexpired term of a lease be a factor in determining the annual value? the answer from the Treasurer was -
The annual value of a lease so ascertained will be capitalized for the unexpired period of the lease in accordance with the departmental tables of calculation.
Yet the Attorney-General says that a period of twenty-two and a half years is to be the basis for determining the capital value. We have the departmental officers giving one reply and the AttorneyGeneral giving us another view. Ministers would act wisely if they withdrew this taxation proposal, and sat down, and for once in their lives thought hard before placing such impositions on the people.
.- My object in speaking upon the Bill is to record an emphatic protest against the imposition of this tax at this period. I do not refer to the war, but to the drought, and I say that, considering its severity, the present is a most inopportune time for inflicting this imposition on the pastoralists of Australia, who will be most affected by it.
– We have heard that said a thousand times already.
– Then, so far as I am concerned, you will hear it over and over again until the truth gets into your brain. For months past, practically there has not been a blade of grass from end to end of Western Australia and South Australia, and I am informed on good authority that Victoria has not had a severer drought since 1898, while in regard to New South Wales, with the exception of the fringe of country near the coast, and portions of the northern districts, particularly the Gwydir, and New England, the drought has been without parallel, especially in the Riverina, the far west, and portions of the central western farming districts. During the recent elections I had occasion to go through the western portion of my electorate, between Condobolin and Forbes, and in the farming areas there one could see no difference between the ploughed land le’ft for fallow and the sown land. Even then, numbers of pastoralists had had to send what few sheep were left to them to other parts of the State for relief. Is it fair to penalize these men, and cause them, in addition to their numerous losses, to bear this land tax imposition ? There is an old and trite saying about tempering the wind to the shorn lamb. The Government should temper the tax to the owners of these sheep. Their action in imposing this taxation at this particular time is like the action of one who would put a working horse in a collar without any padding. It seems to me that the more these people work, and display enterprise, and deny themselves by going out into the back blocks to develop our great Commonwealth, the bigger proportion of the heat and burden of the day they are singled out to bear. Looking for a parallel, I can only compare the action of the Government to the march of the German army into Lou vain. After sacking the town the Germans made the discomfiture of the citizens of Louvain complete by demanding an indemnity. Here, in our pastoral areas, after suffering loss of cattle and sheep, and after being at their wits’ end to know what to do, these people, instead of getting sympathy and a helping hand from the Federal Government, have also to submit to this cruel imposition.
– How many people in your electorate will pay the tax under this Bill ?
– About 200. The average for each electorate in the Commonwealth is about 200. Let me bring the point forcibly to the notice of city people. If we can imagine the City Council after a devastating fire in Collinsstreet has completely destroyed six of the main buildings’ of Melbourne, meeting and deciding that extra taxation should be placed on the owners of these six properties, we can see exactly the position taken up by the Federal Labour Government. Many of the pastoralists have lost 70 per cent, of their stock, and this tax will mean depreciating the value of their holdings. Capitalizing the tax at 5 per cent, means the depreciation of pastoral properties to the extent of £21,000,000, and, therefore, just when these unfortunate people need accommodation from the banks in order to restock, they are face to face with the fact that the banks will say, “ We cannot make further advances because your security has depreciated to the extent of this taxation.”
-And freeholds, too. The Labour party have selected for the imposition of this tax a period when, according to the Minister of Trade and Customs, the wheat-growers stand to lose £10,000,000.
– I did not say that. I said that the export of wheat was likely to be between five and ten million bushels short.
– The Minister said that the export of wheat was likely to be 10,500,000 bushels less.
– I apologize if I misunderstood the Minister, but out of whose pocket will that shortage come? The producer, of course.
– If that wheat had been produced the farmer would have had to pay for labour for its production.
– The Minister also said that there would be a decrease in the export of hides and skins of about £4,500,000. On the two items there is a total loss of £14,500,000 to the pastoralists and farmers; and is that a reason why they should be asked, at this juncture, to pay extra taxation? Owing to the pastoralist having to shift his sheep about from one part of the State to another, the lambing is likely to be considerably reduced. Instead of getting the usual percentage of lambs, I doubt if we will get more than 10 per cent. The lamb-breeding ewe is the one that suffers most during a drought.
– Still I think 10 per cent, is a little too low an estimate.
– At all events, I think it would be more equitable to impose an income tax, so that each person should pay, during the war, according to his means. As the honorable member for Wannon remarked in his speech on Saturday, the Labour party are against trusts and combines, but those bodies have not been asked to contribute one penny of this taxation, the whole burden of which is to fall on those people who are to-day suffering from the effects of drought.
– We had to leave something for the States.
– We who have lived most of our lives in the back-blocks, and who are doing useful work for the country, are always singled out to carry additional taxation. I have in mind an illustration which came to my notice some five years ago, and its application still holds good. A merchant, who had been particularly successful in his business, had three sons. The first followed his father in the business. The second son, being of a studious disposition, was sent to English universities, and thence to Germany, where he qualified as a doctor, subsequently carrying on a consulting practice in Sydney, and rising to the highest position the medical profession could offer. The third son was a rollicking young fellow, and his father established him on a pastoral property in the back-blocks. These were the results of their ‘respective operations : The merchant, in one year, made an income of £8,000; the doctor made £7,000; and the pastoralist £2,000. Capitalize those incomes, and the result is a capitalized wealth of £160,000 for the merchant; £140,000 for the doctor; and £40,000 for the pastoralist. Yet the Government single out the poor pastoralist, who has to put up with droughts and many discomforts, to carry the burden of taxation. That is manifestly unfair. The Prime Minister referred to the present drought as a little one; and the Attorney-General, when speaking, said that although some 15,758 persons paid land tax, the brunt of it fell on the shoulders of about 600. I have heard interjections from the Government side of the House that only a few persons have to pay the tax. I do not care if there be only one victim; if an injustice is being perpetrated, it should be rectified. History shows that preservation of the rights of the individual has made the British Empire. Honorable members must have heard of the siege of Tamatave, Madagascar. Dr. Jones had been wrongly incarcerated, and the British Fleet came down on Madagascar, and the Old Country was on the verge of war with France because a British citizen had been wronged. The Attorney-General says that, because the tax only affects about 600 people, it is right. The burglar who breaks into a house might say that because his action only affected one person he is right.
– It is a little safer to enter a house where there is only one person.
– Yes; but while the burglar robs under cover of darkness, the Government do so in the light.
– Order ! The honorable member must not use that term.
– I withdraw the word to which you take exception, sir. What is the object of this taxation?
– When the existing tax was imposed, we were told that it was for the purpose of bursting up estates. What has been its effect? In 1912, 15,375 estates paid the tax; and in 1913, 15,758; so that there are actually 383 more persons paying taxation to-day than when the tax was first imposed. Where does the argument about bursting up come in?
– The tax is imposed for revenue purposes.
– My honorable friend says for revenue purposes. Let us hear what was said by Mr. J. C. Watson and the Worker when the land tax was originally introduced. On 24th March, 1906, Mr. Watson said -
It has to be remembered th.it the motive of the Federal land tax is not revenue at all.
On the 21st June, 1906, the Worker said -
The object of a graduated land tax is not to raise revenue; it is frankly penal.
– Why do you refer to the land tax of 1906 when this kind of taxation was not introduced until 1910 or 1911?
– Yes, but in 1906 the Labour party contemplated the imposition of a land tax, and it was a plank of their platform. I consider that the land tax is interfering very considerably with enterprise. Let us hear what the Argus said on the subject this morning. It cited an instance where a sale was contemplated by a person who had a property worth £46,000. A company intended to buy the property, and to spend £80,000 in improving it. When this taxation proposal was brought down to the House it was found that the tax on this and another property which the company had would be raised from £404 a year to £1,175. The company cancelled the contract, and the consequence, I may tell my honorable friends on the other side, who are always championing the cause of the working man, was that £80,000 has been withdrawn from the labour market. In other words, the unemployed, of whom we have heard so much lately, will lose wages to the tune of that sum. That is only one of many cases in Victoria. I think that every measure which is passed should receive a trial. The Land Tax Act has received a trial, and in many respects it has been found wanting. In many directions it needs to be repealed, and amendments to that end should have been brought down by the Government.
– Why did you not do it last year when you were on this side? You kept the Government in office.
– Simply because we could not, as the honorable member knows perfectly well.
– You had a majority of one.
– He was the majority.
– The Senate would not do it.
– You did not give the Senate a chance to do anything.
– In the House I pointed out the necessity. At any rate, my honorable friends on the other side have an opportunity to amend the Act if they think that it is right to do so. I believe that they will agree with a proposal I am going to make. In the first place, I want to amend that part of the Act which refers to appeals. If a man desires to appeal he has to bring the appeal before the High Court, which can delegate its powers to the Supreme Court of the State. In a question the other day the honorable member for New England pointed out that, in his electorate, several appeals had been before the Court for something like eighteen months.
– They cannot get them before the Court.
– That is still worse. The other day I asked the Prime Minister this question : Where amounts not exceeding £20 are involved, are you prepared to amend the Act so as to allow these owners to bring their anneals before a stipendiary magistrate in an ordinary Small Debts Court? We country people are placed under great disabilities. If we wish to prosecute an appeal we have to travel to Sydney or Melbourne, or another big centre with a large number of witnesses. A storekeeper can brine an action to recover amounts up to £20 in the Small Debts Court. If it is right for a storekeeper to have that privilege, small land-holders should have the right to bring appeals up to £20 before the same Court. That would bring justice to the doors of all such persons throughout the Commonwealth, and the process would be inexpensive. As the Land Tax Act stands, if a man brings an appeal up to £20, he has to pay in costs of Court and barristers’ expenses nearly as much, whereas, if he could bring a case in a Police Court in his own town the probability is that he could state his grounds of objection, and would have his witnesses on the spot; in this wayhe would save an enormous expenditure. It would simplify matters very considerably to the appellant. I submit that the position of the small land-holders ought to be considered. I suggest to the Government that they should take steps to allow such cases to be taken before the District Court. There is another matter which I should like to touch upon, and that is, the question of valuation. If a man has a piece of land, it has only one value, just as a sovereign has. But in the country districts we find that the municipal valuatorhas one value, the shire council’s valuer has a second value, the State Government has a third value, the Federal Government has a fourth value, and the owner of the property has a fifth value. Here, again, land-owners do not know where they stand. We ought to adopt a principle similar to that which obtains in New Zealand. We want a valuation bureau.
– Why did you oppose the scheme of the Minister of Public Works in New South Wales ?
– With the honorable member, I think Mr. Griffith was quite right. I did not oppose it. We should arrive at some system of co-ordination in this matter. I propose to give a few concrete illustrations. There is a property known as Grawlin in my electorate, and owned by a Mr. Gordon. It is valued by the Commonwealth valuator at £6 8s. per acre. There is an adjoining property, divided from it only by a fence, known as Wandary. Under their Closer Settlement Act the State authorities wished to resume Wandary, on which estate the land is of exactly the same quality as Mr. Gordon’s land. The State valuator valued Wandary at £4 2s. 6d. per acre. The Commonwealth valuator was interested in getting- the highest possible taxation from Mr. Gordon’s property, whilst the State valuator desired to enable the State Government to obtain Wandary at the lowest possible price.
– Did they get it at that price?
– Yes, they got it at £4 2s. 6d. per acre. If that valuation was a fair valuation, Mr. Gordon’s property should have been -taxed upon the same valuation. Under a system of coordination of values, the Commonwealth valuator in this instance might be called on to explain the high valuation he made, and if he could not give a satisfactory explanation he should be told to go about his business.
– Does the honorable member suggest that we should adopt the highest valuation all round?
– No; I say that we should adopt a fair valuation. Referring again to Mr. Gordon’s property, I may inform honorable members that the unimproved State valuation is 38s. per acre. The shire valuation is 40s., and the Federal valuation 65s. This is a big rise, and it involved an extra taxation of £73 per annum. The tax was retrospective, and, therefore, £219 had to be paid on Mr. Gordon’s property. The effect of placing the property in a higher gradation was to increase the tax by about 83 per cent.
– Did the owner appeal?
– He is going to appeal, but what will it cost him to do so ? Why should men in such circumstances be put to the expense of. appealing? If he does appeal he will have to go to Sydney to bring his case before the High Court, when such matters ought to be capable of settlement on the spot. This is not a party question, but one in which all honorable members representing country constituencies are equally concerned. The honorable member for Gwydir represents a country electorate, and should, therefore, be as much interested in this matter as I am. I have particulars here of another property which I personally inspected and valued for the owner, my friend Mr. Young. After I had valued the property he said, “I think I shall put 25 per cent, on your valuation. I do not mind paying the extra taxation involved as a sort of protection against closer settlement.” He did so, and the unimproved value of the property ran out at £9,098. The Commonwealth valuator came along and increased the valuation by £5,737. He valued the property at £14,835. I have valued a great many properties in the district. I valued properties at Cowra, and there was a difference of £10,000 between my valuations and that of the State valuator. After investigation and inquiry, my valuations were confirmed. I have some particulars of another property not far from Carcoar. I do not wish to mention the name of the owner of the property, but I could give the whole of the particulars to honorable members interested. This property was valued by the owner at £22,087. ‘ The shire valuation is £17,005, or £5,000 less than the valuation of the owner. The Commonwealth valuator came along later and valued the property at £29,386, and by placing it in a higher gradation increased the rate of the tax to the extent of 76 per cent. These are matters which require investigation, and I say that they justify the adoption, of a system of coordination of valuations. Under such a system these anomalies, if not entirely prevented, would be very considerably reduced. Earlier in my address, I referred to the unfairness of a proposal singling out pastoralists at this time of drought to bear practically the whole burden of taxation. I have before me particulars of a property on the other side of Booligal. It comprises 22,000 acres freehold, and 175,000 leasehold, or 197,000 acres in all. In 1911, the owners of this property shore 62,000 sheep; in 1912, 50,000 sheep; in 1913, 20,000 sheep; and, in 1914, 11,612 sheep. These sheep have had to be removed from the property. They were first of all brought to Wangaratta, and were sent from there to Moree. By the time the lease of the land secured for them expires, they will have cost the owners 12s. 6d. per head, apart from losses in transit. All the sheep the owners have on this property at the present time are 1,500. Yet the present Government have singled out unfortunate pastoralists like the owners of this property to bear the bulk of the taxation of the country. That is manifestly unfair.
– The honorable member’s leader says that the owners of the property will not pay the tax, but will pass it on to the workers.
– My leader was referring to city properties. Solomon himself could not devise a scheme by which the pastoralists in the back-blocks could pass this tax on. One result of the operation of this taxation has been to reduce the value of the taxable properties by £21,000,000. When a pastoralist finds that he has lost all his sheep, and that his property has depreciated in value, what is his banker going to say to him ? It must be - remembered that these estates could not be used for closer settlement. They can only be utilized by pastoralists in a big way.
– The honorable member is an expert. Will he say what the pastoralist^ banker would say to him?
– I leave that to my honorable friend. If I were in the position of the banker, I should be disposed to say, “ I cannot do anything for you.” The Commonwealth Bank, perhaps, would be run on different lines. I wish to refer now to a matter which Sir John Forrest touched upon. The right honorable gentleman suggested that we should do away with the absentee tax. I agree with him that we should treat absentees in this matter in the same way as residents of the country.
– Are you serious?
– I am quite serious. I want to tell the honorable member that British and other outside investors in our mines and other properties are the people who are keeping Australian enterprises alive. It was an absentee who discovered Australia, Where would my friend opposite have been if he had not done so? It is a good thing for the country if people oversea invest their money here. Every successful venture is a good advertisement for Australia; but we find the Government penalizing absentee investors, and that, to use an everyday phrase, leaves a nasty taste in their mouths.
– And very little in the absentee’s pocket.
– It is not so much the amount as the effect of the tax on absentees with which I am concerned. Last year the additional tax imposed in respect of absentees yielded £20,000- that was the difference between the amount actually paid by absentees and that which they would have been called upon to pay had they been resident in, Australia. In a work by Williams T read the other day that the effect of this form of taxation, and of other pinpricks to which we have subjected British investors, has been to drive £57,000,000 out of this country. I cannot say whether or not the figures are correct, but I invite honorable members to consider for a moment what the expenditure of such a sum would do in the way of helping on enterprises and providing employment in Australia.
– The absentees are financing us over the war.
– That is so. They spent £70,000,000 last year in providing for a navy which has stood between us and destruction. And this is the way we treat them !
– We owe them £300,000,000.
– Quite so; our public debt amounts to something like £300,000,000, which sum has been lent to us, practically without security, at a low rate of interest, to help us to develop Australia. In return for their goodness, we insult these investors by taxing them for their enterprise. The £57,000,000 which, according to *Williams, has been driven out of Australia, is equal to £14 per head of our population; whereas the absentee taxation responsible for this yielded last year only £20,000, which ia equal to l$d. per head of the population. We are told that the Treasurer ia a Scotchman and a financier. His actions are certainly unworthy of Scottish traditions. If a boy were brought into this chamber from a kindergarten class, and had offered to him ld. in the one hand and £14 in the other, which would he take?
– He would have both.
– Perhaps so; but we find the Prime Minister taking the 1½d. per head of the population, and allowing the £14 per head to go out of the country.
– How does Williams arrive at his figures ? Give us the details..
– I have given the honorable member my authority for the statement, and he may look up the details for himself. The estimate may not be quite accurate, but I do not think it is far wrong. Let us consider for a moment the capital from overseas which has been invested in mining enterprises in Australia. Within a radius of 15 miles of Blayney, the township in which I live, there are ten mines, in which £1,500,000 has been sunk, and not one of which is being worked to-day. The capitalists of the Old Country have spent their money in trying to develop these mines, and have got nothing in return ; but the workers have benefited by the expenditure.
– The mines were unprofitable.
– They were developed, and proved to be unprofitable.
– That is why they closed down.
– But if one of those mines had returned dividends of 15 per cent, or 20 per cent., members of the Labour party would have said at once, “ The shareholders in this mine must pay an absentee tax,” altogether overlooking the fact that the same men might have invested in ten other unsuccessful mines in the Commonwealth. We must have regard to averages, and if we wish to promote enterprise we must encourage capital to flow unrestrictedly into Australia.
.- It is not my purpose at this hour of the session to make a lengthy speech, but I desire to enter my protest against the way in which these new taxation proposals have been brought in. The honorable member who has just resumed his seat mentioned in a general way that/ as the result of the pin-pricks to which absentee investors have been subjected by the Federal Parliament, £57,000,000 had been’ driven out of the country. If this were the proper time and place I could give definite particulars as to a great deal of money which was to be invested in Australia, but which, because of recent developments, has not been brought in. I could, if necesary, give concrete cases, representing in the aggregate a large amount of capital, that has actually been driven out of the Commonwealth.
– Honorable members opposite may sneer at such an assertion, because they do not happen to come into association with big financial movements, but I can assure them of the absolute truth of the statement I have made. I rose, however, to point out that had this proposal been submitted as a war tax, then, although crude in its incidence, and very drastic in its effect, I am sure that the majority of the people would have been prepared to accept it. This is a cruel time for the particular section of the community which is to suffer most under this taxation, yet while it may mean ruin to some of them, the majority, I am convinced, would have been prepared to accept this taxation and to try to pull through these hard times in order to help Australia and the Empire during the continuance of the war. But when the Labour party, during the stress of present disaster, impose this taxation, knowing well that they will be able to cloak over their real object with the statement, “ We imposed this taxation in war time,” when, after being compelled to almost place them on the rack, we have extorted from them the confession that it will be continued after the war period - then I say that it is time for us to enter a most emphatic protest. I assure honorable members opposite that if this taxation had been imposed merely for the duration of the war, a great number of us on this side would have been found supporting it. But, much as we may feel the need for fresh taxation at the present time, we cannot bring ourselves to help the Labour party in what, to my mind, is a subterfuge unworthy of any political party in any part of the Empire. At a time when the particular section of the community which they propose to attack more than any other is struggling most desperately for existence, I cannot bring myself to support honorable members opposite in this proposal, much as I should like to help the Government in a crisis like that through which the Empire is now passing. If the Treasurer could assure us, even at this late stage, that this was a war tax intended to operate only during the war, we should recognise that it was necessary to tide us over a period of unequalled pressure, and I am quite sure that he would not have much difficulty in passing his Bill. But the right honorable gentleman cannot expect those who desire to deal honestly with the people of this country to allow a tax of this kind to be imposed under, conditions which will allow an entirely false impression- to go abroad in respect of it. For that reason, I assert most, emphatically that the tax is wrong, and. I shall be compelled very reluctantly to vote against the second reading of the Bill.
– It is my duty to raise my voice in protest against the introduction of such a. measure at this critical time in our existence. When the proposal for this taxation was first being introduced, I understood from the Prime Minister that only necessitous taxation, compelled by the war, would be brought before this Chamber; but two or three days ago we learnt from him that quite apart from the war requirements, he was imposing this taxation to meet the ordinary expenditure of the Government. A few days ago the Leader of the Opposition, when speaking, risked the Prime Minister whether he was imposing this tax in connexion with the war, and, according to a note 1 took at the time, the Prime Minister replied, “ These taxes do not provide for the liquidation of the war debt.” A little later the Leader of the Opposition said, “ We will, therefore, presume that they are introduced for the purpose of liquidating the liabilities incurred in carrying on the ordinary services of the year,” and the Prime Minister replied, “ They carry that on their face.” The honorable member for Balaclava thereupon interjected, “ That is the declaration of their permanency.” On examining the Estimates, it seems to me that there will be no opportunity of spending the whole of these millions this year. The millions that we are receiving from the Old Country for war purposes will be amply sufficient for the purpose, and there will be no necessity to use this taxation for war requirements. These millions cannot all be used for the ordinary purposes of government. What, therefore, is the necessity of imposing this increased progressive land tax at the present time? It seems as though the Prime Minister is using this opportunity for introducing destructive, and, I might almost say, malicious or vindictive legislation. It is unfortunate, at a time of almost universal drought that an extra imposition should be placed upon our landholders, even if some of them are big ones. I do not altogether object to a land tax; but I believe tha*, as the- lands- are owned by the individual States, those lands are their own property, and any land tax should be imposed by them and not by the Commonwealth. I have always held that view.
– Although the Common-, wealth is supposed to. defend the owners of the land, and the land also.
– No doubt; but when the land-holders were called upon to pay their share of land taxation, and found that it was the law oi the land that they should do so, they paid the tax cheerfully. They did not attempt to fight, but. paid it.
– Yes, they did; they went to Court over it.
– A good many people have gone to Court, and have been pretty lucky to get out of it. I shall not mention names.
– That is dirt, which is worthy of the honorable member. If you infer that I have been to Court, I will make you prove it.
– Evidently the cap seems to fit; but I meant nothing personal.
– The cap does not fit. Your Police Court work will not do here.
– May I be allowed to proceed ? One of my objects in rising is to deal with the question of the Crown leased lands, which are brought under the purview of this measure.
In 1910, when the principal Act was before this Chamber, it was recognised by honorable members opposite, who to-day are on the Treasury bench, that it would be iniquitous and unjust to attempt to interfere in any way with leased lands. In Queensland, rightly or wrongly, the view is held that the land should remain the property of the Crown, and that long leases are best for the community. Rental values are placed on the leased lands by the Lands Department. At times they are sent to auction. The rental value is based on the potentialities of the land and the possibilities of ‘raising it to a better productive value by means of reasonable improvements. We must assume that the State, being the owner of the land, endeavours, at the time the rental is fixed, to arrive nt, and does arrive at, a reasonable rental value. If it were not reasonable people would not take the land up. The rate fixed must be sufficiently just to induce thelessee to put his energy into the land, and improve its carrying capacity, to enable him to obtain a return which will, in time, recompense him for expending his capital after putting in the best years of his life in the back country. We are now told by honorable members opposite who wish to include in this measure the power to tax leased lands that there is a potential value, or an unearned increment, or something else, inherent in that leased land which the pastoralist is now getting - that he is abstracting from it a kind of honey which, properly speaking, does not belong to him, but belongs to somebody, and that somebody is the Commonwealth. It is because of the actual sweat, and bone, sinew, and capital that the lessee has put into the property, and by judicious expenditure on improvements, that he is able to increase its carrying capacity, and so get from it a return which he would not have got had it been left in a state of nature. If it is right to tax these leased lands, then it is right for the Crown tenant, the moment he obtains one of these leases to pay his rental to the Crown, without endeavouring to develop it in any way whatever - that is, to leave it in a state of nature, so that it will have no economic value over and above the rental value it had at the time the State thought fit to lease it to him. If we take that attitude, we are discounting thechance of developing our country. We are telling the lessee that it is unwise for him to put his money into improvements, and, instead of our country progressing as we hope it will, it will always remain in a state of nature. If this proposal becomes law, and Crown lessees have to pay the land tax, the Commonwealth will be taking to itself something which properly belongs to the State, and the State will be practically told that it is unable to transact its own business properly. This, therefore, is really a reflection upon the administration of the Lands Departments of the States in whose territories leases are by no means uncommon. Directly the States learn from the Commonwealth that this so-called potential or economic value exists in their leases, they will pass a law to re-appraise them, thus immediately putting up their price, and circumscribing them with more onerous conditions. The States will thus be forced by means of
Commonwealth legislation to step in and seize the emolument which the Commonwealth Government is getting and, es instanti, the whole profit that the Commonwealth would have obtained will disappear - and the States will take it.
– To the detriment of the lessees.
– Yes, all the time. It is a question whether it will pay the Commonwealth to exploit the leaseholders during the next twelve months, when it will be very hard on many of them, who have to contend with drought and all sorts of diseases and pests, including tick and red-water in the coastal areas of Queensland and New South Wales. There is practically no market for wool to-day, and yet it is proposed to impose a very heavy burden on the sheep-farmer, who should be free in this connexion.
I should be very interested to know how our friends opposite viewed this proposal when it came before them for consideration in the Caucus, by which they are bound and compelled to speak as one body. Without particularizing, I know there are honorable members opposite who, from expressions that have fallen from them at different times, are strongly opposed to the inclusion of leases within the operation of this Bill; but we have had no expression of opinion from them within the Chamber. The honorable member for Maranoa, for instance, represents a constituency largely made up of Crown leases, and so does the honorable member for Gwydir; but from neither have we had a word. When the seasons are good, and “ everything in the garden is lovely,” the lessees, no doubt, can pay but alternating affluence and penury is the history of the grazing industry, which should be considered as a whole. I admit that during the last eight or ten years the pastoralists and Crown lessees have had rather a good time; but we do not know whether we are to have a continuance of good seasons, and if the present drought continues, what must be the result? At any rate, why do not Labour members, who represent country electorates, tell us whether they believe in taxing this class of land ?
– Christmas is near, and we wish to get home.
– The honorable member must not interject, or he may bring something on himself he is not bar- gaining for. In the two Chambers there are 111 members, and the question of whether this land tax should or should nol be imposed was probably debated in Caucus by seventy-three members. It is quite possible that the question was decided by a majority of one or two, and this means that thirty-seven or thirtyeight members can compel the Prime Minister, whether he approves or not, to legislate according to their dictum.
– The honorable member must not pursue that line of argument-
– Then I shall say that a majority of honorable members opposite, at a meeting outside this chamber, may dictate to the Government and the House what legislation shall be placed on the statute-book. I do not say whether those honorable members are right or wrong in deciding matters in that way if they think fit, bub, from my point of view, this is an absolutely non-party question. Whether we sit on the Government side or the Opposition side, we represent diversified interests, and should be prepared to give a fair and square deal to every person in the community - to those who may have been foolish enough to pioneer in the back country and make riches, or those who may have prospered as merchants in the city. Representatives in this House should be prepared to express their views so that the country may know whether they approve of a measure that is going to penalize land-holders, including Crown lessees, throughout Australia.
– How many speeches did the honorable member make when he was supporting the Government ?
– The honorable member for Capricornia was at that time on his feet so much that I scarcely got an opportunity to speak, and, feeling that silence is golden, I learned from him much that was of no use to me. I do not often trouble the Chamber, but I must emphasize the point that honorable members have no right to remain silent and record their votes when, as I say clearly and distinctly, their hearts are not with the measure - when almost a majority of them, if they had their wish, would vote in a contrary direction.
– You do not know what you are talking about!
– I, perhaps, know as much as my honorable friend; but he is one of those persons with whom knowledge goes in at one ear and out at the other - there is nothing to stop it.
– What has become of the Caucus ?
– We know that the Caucus was discovered in America about forty years ago, and was adopted in Birmingham.
– I must ask the honorable member to confine himself to the question.
– I am sorry, sir, but the Postmaster-General led me astray. In Australia the country lands at present bear 60.6 per cent, of the land tax, and the urban lands 39.4 per cent. If we take the. figures for the entire Commonwealth for 1912-13, we find that the country lands contributed £884,090, of which sum the rural lands of New South Wales paid more than onehalf, namely, £472,719. It will be seen, therefore, that the country land-owner, especially in New South Wales, has borne his share of taxation. When contributions were recently invited to the patriotic fund the land-holders were not niggardly in their response, and they are prepared to contribute to an even greater extent if necessary. But why should one section of the community be singled out for special taxation? If good seasons could be assured to our land-owners they would probably bear this burden without complaint, but when once this tax is levied upon them, it will continue operative for several years at least, irrespective of whether they experience good or bad seasons. Looking through the report of Mr. McKay, the Land Tax Commissioner, I find that the only cases in which landholders have been exempted from the operation of the tax number about four, and in all these cases the persons concerned have become bankrupt. It will be seen, therefore, that the Commonwealth comes in as a preferential creditor, and that the land-holder is required to pay the tax irrespective of whether he is really able to do so or not. Under this Bill a man who has an estate the taxable value of which is £10,000, will be required to pay an additional £13 17s. 10d., or 24 per cent, more than he’ has previously paid, whilst a man with an estate of £30,000, taxable value at present pays a tax of £250, and will have to pay an additional £125, an increase of 50 per cent.
The present contribution of a man with an estate of £50,000 taxable value is £750, but under this Bill he will be obliged to pay £1,250, an increase of £500, or 66 per cent. ; and then it must be remembered that there are the heavy municipal and shire rates in addition, and in some States income tax as well, and in the case of absentee owners the imposts are most crushing.
I exceedingly regret that at a time when . we were assured that controversial legislation would not be submitted to Parliament, and just prior to a long adjournment, the Government should endeavour to push through legislation which must inflict considerable hardship upon an important section of the community. Before imposing further taxation upon land-holders, it seems to me that Ministers should have attempted to remedy a few of the shortcomings of the principal Act. What about those land-holders who lodged appeals against their assessments some eighteen months or two years ago? Their own valuations have been brushed aside by the Commissioner, who has imposed on them the extra assessment that is allowed by the law. They paid that additional taxation many months ago,’ and it now appears to be impossible for them to get their cases before the Court. The whole of the moneys which they have paid under protest have been impounded by the Commissioner, so that these men are losing interest upon it, and yet there seems to be no prospect of their appeals being dealt with. Surely this was a matter which should have received first consideration at the hands of the Government. Is it fair to increase the burden placed upon these land-holders by 60 or 70 per cent, when the Commonwealth already holds considerable amounts of their money pending a decision of the Court? I hope that honorable members opposite will be prepared to deal with this Bill in an unbiased way, and will not be induced to follow their leaders upon a question of such vital importance. My desire is that a vote upon the Government proposals shall be arrived at upon non-party lines. The honorable member for Capricornia knows that I am always prepared to consider legislative proposals upon these lines. If that course be adopted, and the measure be placed upon the statute-book, we shall at least have the benefit of every honorable member’s opinion, irrespective of whether he occupies a seat upon the Ministerial or Opposition side of the Chamber.
– I cannot allow the extravagant statements made by some honorable members opposite, and repeated by others in parrot fashion, to pass unchallenged. The honorable member for New England apologized for what he had to say on the ground that he did not address the Chamber very often. I presume that he would not have said very much had he not been afforded an opportunity of reading the speeches which have already been delivered by other honorable members upon this Bill.
– That is not fair.
– His whole speech was a repetition of the statements of previous speakers.
– That often happens, and is quite unavoidable.
– I suppose that he thinks it is a good story, and, therefore, cannot be repeated too often. Honorable members opposite would have the country believe that this is a confiscatory tax. that will tax the farmers off the land. I gave some figures on Friday last to show the real extent to which men who use the land - the real farmers - will be taxed; but, while the Argus reported the wildly extravagant statements of honorable members opposite that this tax meant confiscation, which would tax the farmers off the land, not one word uttered by honorable members on this -side of the Chamber in refutation of those misleading statements appeared in that journal. My object is to show the majority “of the farmers in my district, and, as far as I can, farmers elsewhere, the extent to which they will be affected by this taxation. An estate of the unimproved value of £5,500, or a capital value of a little over £9,000, will pav the extra sum of 8d. In New Zealand the estimated unimproved value is about half of the estimated total capital value, but I think that it is fair to estimate the unimproved value as three-fifths of the capital value. Under this tax aD estate with a capital value of about £9,000 will pay an extra 8d. This is what our opponents call confiscation. Unfortunately there is no opportunity to acquaint the farmers with the real facts, because the newspaper to. which I have already referred will not publish such a statement. An estate with an unimproved value of £6,000, or a total capital value of £10,000, will pay a sum of 2s. lOd. extra. When the farmers of Wannon and Wimmera read the speeches of their representatives in this House, telling the country that they are so unpatriotic that they are not prepared to pay an extra 2s. lOd. towards what is, after all, the defence of their property, the defence of the country, taxation necessarily occasioned by the war, these farmers will regard those speeches as an insult.
– The honorable member’s leader says that this is not war taxation.
– It is necessary at the present time.
– For revenue purposes.
– The revenue has declined because of the war. .
– This tax is only to meet ordinary expenditure. War expenditure is being met in another way.
– The ordinary expenditure is affected by the war. The Government are doing something in the direction of coping with unemployment as the result of the war. At any rate, the conditions which necessitate this tax are indirectly, if not directly,
Drought about by the war. I” agree with the honorable member for Wakefield, who, as a representative of a farming constituency, said .that he had greater regard for the farmers in his electorate than to believe that they are as selfish as other honorable members representing farming constituencies would have the country believe they are. As another representative of a farming constituency, I know the farmers better than to think that one of them holding property of the capital value of £10,000 would begrudge an extra 2s. lOd. to meet the extraordinary conditions occasioned during the present crisis.
– Recognising that the tax will reduce the value of the big man’s land and the farmer’s land also, do you still justify it?
– The honorable member has not produced any figures to bear out his. contention.
– They are written indelibly on the records.
-The honorable member said that I would have something to explain to my farmer friends. I ask him not to bother about that, but to think how he will answer his farmer friends, especially those with property of the capital value of £10,000, who, he says, are not patriotic enough to contribute an extra 2s. lOd. under this taxation. How is it that these honorable members who represent farming constituencies have nothing to say about the present Victorian land tax, with its £250 exemption, and with no exemption at all in the case of an estate worth £500? Under the Federal legislation, an estate of the unimproved value of £5,000 pays nothing, but under the Victorian Liberal legislation it pays £10 8s. id. An estate with a capital value of £6,000 pays £12 10s. under the Victorian tax, and under the Federal tax it pays an extra 2s. 10d., or a total of £4 8s. lid.
– From the State point of view, are you satisfied with the land tax?
– It is not in accordance with the Labour platform, which provides for a bigger exemption, twice that now existing, and proposes a graduated tax instead of the existing flat rate.
– Every member of your party supported the present land tax in Victoria.
– The honorable member is quite wrong. Our platform contains an exemption twice as large as that proposed by the Liberal party when it was in power. Moreover, our proposals are on a graduated scale.
– Every member of your party voted far the tax in the State House.
– Order ! The honorable member for Wannon must cease interjecting.
– The proposals of the State Labour party are entirely different from the tax operating today under a Victorian Liberal Government. I desire to know why it is that we have never heard a protest from honorable members opposite, who represent farming constituencies, about the farmer with £6,000 worth of unimproved value paying under the tax introduced by a Liberal Government in Victoria £12 10s., whilst under our proposals he is paying only £4 8s. lid. It just means that anything done by the Labour party is wrong, and anything done by the Liberals is right.
– Does not the honorable member see that the Government are putting the Federal tax on top of the State tax!
– Have we not a right to do so under the Constitution ? And is it not fair that these properties should make a special contribution, seeing that the Federal Parliament has to provide for the defence of the country, from which the large properties particularly benefit. It is not right for the honorable member for Wimmera and the honorable member for Wannon to make it appear that every one on this side of the House is against the farmers. I take second place to no one in this Parliament as an upholder of the rights of the genuine working farmer,” and so far as the provision of facilities for the farmers in my constituency is concerned, I will allow my brief record in this Parliament to stand side by side with that of any other honorable member.
– Will you vote with us for a remission of the duty on wheat sticks ?
– I will. What more does the honorable member desire? It is quite in accordance with a Protectionist policy not to put a duty on things which we are satisfied we cannot produce in this country. I do not agree with some honorable members opposite who have said that because an article is not being produced here there should be no duty on it. My contention is that even if it is not produced at the present time-
– Order !
– I am sorry that I was led by the interjections somewhat away from the subject before the House, but I desire to assure the honorable member for Wannon that if he will vote as I vote, we shall have a good Tariff. I am in a quandary to know from the speeches of honorable members opposite, what is the attitude of the Opposition in regard to these taxation proposals. The honorable member for New England described this tax as class legislation. The honorable member for Wimmera said it was a confiscatory tax, and other honorable members on that side have said that 14,000 men would have to pay this special impost. I desire to know how the -honorable member for Wimmera reconciles his statement with that of his leader that this tax will ‘be passed on to the working man.
– lc will be passed on only in the cities. I was dealing with, country land.
– What do you think will be the effect in the cities?
– I believe that a great many of the vacant areas now held for speculative purposes will be put to some use that will be better for the country. My point is that I do not see how this land tax can be regarded as a class tax if the burden is to be passed on to the working man.
– But I was dealing with country lands’
– Then the honorable member is dealing with only a very small portion of the tax. Although we on- this side are accused of injuring the farming constituencies, I am prepared to meet every farmer in- my electorate and justify these proposals, and I here say, on their behalf, that there is no man in my constituency with £10.000 worth of unimproved valuer- and there are not more than 100 of them - who would be so unpatriotic as to demur at contributing a sum of 2s. lOd. under this new taxation. I think a good name for this proposal would be “ The 2s. lOd. land tax.”
– What do you base that 2s. lOd. on?
– That is the additional amount that will be paid on an unimproved value of £6,000. which I consider is equivalent to a total value of £10,000. I desire to be perfectly fair, and therefore I propose to show how the tax will affect the larger landholder. A man with land of the unimproved value of £15,000 was paying, under the old proposals, £55 lis. Id., and under the new ‘tax he will pay £69 8s. lid., or an increase of £13 17s. lOd. I contend that an unimproved value of £15,000 is equivalent to a total value of £25,000.
– I think the honorable member’s figures are a little incorrect. These are figures supplied by Mr. McKay : £15,001 of unimproved value, £10,001 of which is taxable, produces £55 lis. 3d. Under the new proposals, it will produce £69 8s. id., an increase of £13 17s. lOd.
– What does the honorable member for Indi mean by “ total value”!
– I mean the selling value, and I think I have taken a very low estimate. The unimproved value is only about three-fifths of the total value, so that I estimate an unimproved value of £15,000 as being equivalent to £25,000 capital value, and, on that, he is going to pay £13 17s. lOd. I do not know how many cases of this kind I have in my electorate.
– The question is, What will he pay now ?
– He will pay £69 8s. lid.
– What is he paying to the State in addition?
– I am not here as an apologist for what the State Government does.
– This matter has to be considered from the stand-point of what the taxpayers have to pay.
– I have shown what the small farmer is paying. When the State Government imposed the present land tax they wiped out the old sheep tax, and so relieved the holders of large estates of taxation to the amount of £80,000, which is made up to-day out of the pockets of men with £250 worth of land and over.
– That only applies to Victoria.
– Exactly. Not one word of protest went up from honorable members opposite who represent country seats when that iniquity was perpetrated on small land-owners by the State Government.
– I protested.
– I am glad to know that the honorable member did.
– Is this your point of view, that inasmuch as a Liberal Government has taxed them heavily, therefore we have the right to come again and get Borne more?
– No. We imposed the tax first, as we had a right to do. What we have done has been far more lenient to the small farmers in this country than what was done by the party which is their alleged friend.
– And therefore you will repeat the dose.
– -No. We are only doing a fair thing. It is not the confiscatory, brutal thing which some honorable members on the opposite side would have the country believe it is. I intend to take every opportunity I get to let the farmers in my electorate know exactly the position, and if we cannot reach them through the columns of the Argus, we shall reach them by other means. In his speech on Saturday the honorable member for Corangamite made one statement with which I do not quite agree. I thought that perhaps he was under a misapprehension, otherwise he dealt with the proposal in a very fair way. Referring to the valuators, he cited a case of two adjoining properties, namely, an estate covered with stones, which had not had a plough in it, and an estate which had been cleared and cultivated, and valued at about £6 an acre, because of the improvements. He contended that it was the custom of the valuators to go round and say that because a property in its improved state was worth £6 an acre, it was a right thing to take that as the basis for estimating the taxable value of an adjoining property which had not been improved, and which, he said, was covered with stones. I do not think that that is so. If the valuers do that they do not know their business. What they should do is to take the unimproved land as the basis on which to estimate both the improved and the unimproved. I do not think it was quite fair on the part of the honorable member to say that they would make the improved value the basis for valuing.
– I was referring to plain land which required no improvement from the plough. The stone land is land covered with stones adjoining it, as happens very often.
– My honorable friend says that the valuators take the plain land as the basis on which to value the stone land. If they do that, they do not know their business. In these proposals there is nothing which would lead the valuators to take that attitude.
– They are not warranted under the Act.
– No; therefore it is not fair to use that as an argument* against either these proposals or the administration of the Act.
– The figures which I quoted were £6 10s. per acre for the plain land, and £5 for the stone land adjoining.
– If there is an isolated case of that character the valuators are not acting in accordance with the provisions of the Act. In fact, their action is quite opposed to those provisions.
– The only way in which an owner can get redress is to take the matter before the Court ; that is what I said.
– In the first place, he has the right to lodge an objection.
– As my honorable friend knows, any aggrieved person can lodge an objection, and, as he knows also, that has been done.
– The objections have been lodged, and the Commissioner’s reply has been that other cases which have been tried are not similar, and that the land-owner must go to the Court.
– Even if that is so in an isolated case, the valuators are not acting in accordance with the law. The unimproved land - that is, the land in its state of unimprovement- should be made the basis, according to the Act, for estimating the unimproved value in every case. I do not want to labour the point further. I wish to be perfectly fair. I have given some of the increases in the case of small areas. I will now take the case of an estate of £30,000, that is, an estate with a capital value of £50,000. Under the amendment, the owner will pay an increase of £86 16s. 2d. I have yet to meet a man with a property of £50,000 unimproved value in the Wannon electorate, or in my electorate, or elsewhere, who is going to object in these troublesome times to pay an extra £86 in land tax.
– Hear, hear ! Provided that his equally fortunate brother in other circumstances of life, such as the manufacturer and the professional man pays it also.
– It must be remembered that the Federal Parliament has only a limited power qf taxation.
– It could impose a penal income tax.
– I am perfectly satisfied that if small owners were treated as well by Liberal Governments when they take steps to inflict a land tax they would have nothing to complain of. I have little more to say. I thought it necesary to cite some figures in contra-distinction to statements which have been repeated by honorable members opposite who would have the House and the country believe that under our amendment something outrageous is being perpetrated against the small farmers in this country.
– So it is.
– The honorable member interjects that it is an outrage.
– Taking the whole tax, it is.
– I want to hear from the lips of the honorable member, if he thinks that an estate of £9,000 capital value - that is, an estate of £5,500 unimproved value - is outraged by having to pay an additional 8d. under the proposal? I do not think that he would say that.
.- Arising out of the speech of the honorable member for Indi, there is a matter which ought to be settled once and for all, and that is whether this additional taxation is to be put on land for war purposes?
– No; they say that it is not.
– The honorable member for Indi has pursued a line of argument under which he has endeavoured to* show that certain land-owners are not mean enough to object to this additional taxation, because it means only a contribution to the war fund. In his Budget speech the Treasurer gave a direct negative to that statement. The additional taxation is being placed on the shoulders of land-owners to meet the ordinary expenses of government, which would have, been exactly the same, if not larger, had there been no war. I do not know thatwe have much room to cavil at the action* of the Government in imposing this additional taxation. The country spoke at the last election, and practically gave theparty on the other side the power to dothis. They are a nationalizing Government. * They know well that they cannot nationalize on the true value of the properties. This taxation is a direct outcomeof the policy they have espoused. They impose additional taxation upon landed! properties in order to reduce their capital value, and so bring nationalization) into the realm of practical politics. As this is the policy of the Government, there is not much room for cavil at their having attempted, by this legislation, to give it effect. I should have been surprised if they had pursued any other course. At the same time, I must say that I regard it as a suicidal policy from the point of view of the section of the community which they claim especially to represent. The proposal to tax Crown leaseholds is one of far-reaching consequences. The value of our export of wool for the last year for which we have the figures was £26,000,000. The great bulk of that value was produced on Crown leaseholds. The country, as well as this Parliament, should be informed of the present conditions of those leaseholds. We are accustomed in Victoria to speak of the drought of 1902. That drought was the culmination of a five years’ drought in the north-western portions of New South Wales. Its result was that the Crown lessees found themselves in such a position that they demanded an inquiry from the State Government. A Lands Commission was appointed to investigate their position. The members of the Commission visited all the stations in that huge area to discover what might be done to alleviate the situation of the Crown lessees. They found that many of the Crown leaseholds were not worth the money which financial institutions had advanced to their reputed owners. They found that, if the land was not to be permitted to get into a state of perfect uselessness, it was absolutely necessary to discontinue the collection of rents for five years. That is to say, they found that for the period over which the drought lasted the lessees should be exempt from the payment of any rental. Do honorable members think that any Government would have been so unwise as to agree to such an exemption if the land could possibly have carried the impost? These leaseholds, being Crown properties, are carrying to-day just about as much rental as the holders can afford to pay, putting one year with another. Every one knows that there are years “when large sums of money are made from the occupation of these Crown leases, but there are also successions of disastrous years. The honorable member for Grey knows that this is the case. Many of the leaseholds of the north-western portions of New South Wales, at the time to which I refer, would have been thrown up, and would have become useless for producing purposes had not the State Government adopted the course I have mentioned. Now the present Commonwealth Government come along, and make a proposal that Crown leaseholds should bear the Federal land tax. The result of this taxation will be that the rental value of Crown leases will be seriously diminished, and a material loss will be occasioned to the State Governments. While, with the honorable member for Indi, I have great sympathy with the small farmers who are the actualworkers of the land, I say that the far-back man, the man who goes out into the wilds of Australia, and utilizes land for the production of wool of great commercial value to this country, takes enormous risks and grave responsibilities, involving great anxiety of mind, is deserving of much consideration. The Government propose to tax these Crown lessees, and if this taxation stands the test of law - which I am inclined to question - and these lessees are compelled to pay it, the result in hosts of cases will be that the leases will be thrown up, and we shall possibly have a repetition of what took place some time ago in South Australia. It was thought there that the Crown lessees were getting the use of land at a ridiculously low rental, and that it would be a great stroke of policy if the Government were to increase the rentals on the maturity of the leases. The experiment was tried, but with disastrous results. It was ultimately found that, instead of increasing the rental value of the Crown lands of the State, the effect of the experiment was to diminish it. These vast areas, which carry possibly not more than one sheep to twelve acres, offer an inducement to men of a certain type for the investment of their money. They are known to be risky ventures, and no man will put money into them without a reasonable hope of some return. What I object to in connexion with this particular proposal is that it will prevent the further investment of money in these properties. It will involve the destruction of whatever vested interests those at present in occupation of these lands have in the shape of improvements, and it will mean a serious loss to the whole community. Every man, woman, and child in Australia is benefited and enriched by the enormous value of our exportable surplus of wool, because that value is available for circulation amongst our people. If it is diminished our people must suffer. From the point of view of the labourers whom our honorable friends opposite claim to represent, this aspect of the question must be considered. There are in the aggregate thousands of men employed on these large stations who are unfitted for other occupations. They have been way-back men all their lives. Let these Crown leases to be occu pied, and their employment will be gone. A great many taxation proposals operate in this way. If by taxation we make it unprofitable to proceed with any industry, it is no longer carried on, and the labourers employed in it suffer the loss of their occupation. I do not know whether it is true, but a little bird did whisper in my ear that when the proposal to tax. the Crown leases was put to a certain meeting it was decided to do so only by a majority of one.
– Where was that?
– In the Caucus.
– Order !
– I believe I have no right to mention “Caucus” in this House; it is a sacred name.
– The honorable member has made an absurd and ridiculous statement.
– But possibly still true.
– It may be true or untrue. We know that a large number of our friends opposite are opposed to the taxation of leaseholds. Whether the division in the Caucus was or was not as close as I have mentioned, no one outside can say.
– The honorable member is only guessing at it.
– Even the walls have ears.
– Order !
– I recognise, sir, that I must not refer to this sacred thing, and I shall, therefore, make no further allusion to it. We have been told by the honorable member for Indi that no individual owning land of the unimproved value of £30,000 is going to object to an additional tax of £86 a year.
– That means a total value of £50,000.
– But the tax is based on the unimproved value, and we can, therefore, deal only with the unimproved value of the land. The honorable member says that no person owning that amount of property is likely to object to an additional charge upon what he is already paying by way of Federal land tax and the taxation of the State Government.
– And of the shire councils.
– Quite so. I do not hesitate to say that people so situated will strongly object to this increased taxation. Why should land-holders, above all others, be singled out for this treatment? We search in vain for any proposal by the Labour party to tax city industries Where is there any proposal to come down upon those Who -aire conducting large manufacturing enterprises? And yet I venture to say that the anxieties and difficulties incidental to the carrying on of those concerns are not one whit greater than are those of the man on the land.
– This tax will be paid in our big cities.
– Undoubtedly the land tax applies to city properties; but I venture to say that there is not an owner of suburban properties, let out to tenants, who is nob obtaining, by reason of the land tax, a better return for his property than he was securing before. The consideration I have put forward should move the Prime Minister to treat the landowners more sympathetically. I know that the policy of the Labour party is, “ Down with the landed interests. Down with the producers of the soil.”
– But just as certainly as they down those men, so will they reduce the prosperity of the people generally. The labouring classes will be the first to feel the pinch of this taxation. I wish, however, to go back to the allimportant and essential question as to whether this is a war tax.
– The Government have admitted that it is not.
– But the honorable member for Indi, who is of so much importance that it is absolutely necessary to obtain such an admission from him, said that it was.
– I said that, indirectly, it was a war tax.
– I do not hesitate to say that if we had had in power at this time, when we are faced with a large expenditure, a Government with a proper sense of its responsibilities, it would have been more careful to see that no money was expended on additional works, and that there was no increase in. the expenditure on the ordinary works of government. There, is no getting away from the soundness of that proposition; but we have in power a Government whose policy it is to nationalize, and we know that, in order to give effect to that policy, it must go on increasing taxation. What are they going to do when they do nationalize all our undertakings? I ask honorable members to consider for a moment the beautiful condition of affairs now prevailing in the Postal Department, and, indeed, in all the public Departments run by the Government. What a lovely condition of things there will be when all the ramifications of trade, manufacture, and production are controlled and run by the Government. We have an illustration in to-day’s newspaper of what we may then expect. The Premier of Western Australia, Mr. Scaddan, according to this morning’s newspapers, submitted to the State Legislature a day or two ago a statement in which he admitted a loss of £17,000 on the year’s working of the little shipping venture which they took up.
– Will «he honorable member tell me what that has to do with the question of land taxation ?
– I shall connect it with the subject under discussion. This Government believes in the policy of nationalization, and, in order to nationalize, they propose enormous taxation, so as to reduce the capital value of property.
– I have no desire in any way to curtail the honorable member’s privileges, but he must recognise that if I permitted a discussion of the general question of nationalization, the debate would be interminable, and wholly irrelevant to the question before the Chair.
– 1 bow to your ruling, sir, but I have got in all that I desire to say on this phase of the subject. Why, may I ask, should the people be harassed by increased taxation in the present abnormal conditions? There is not a man on the- land in “Victoria who can show a credit balance on this year’s working. Indeed, with the exception of Queensland, where a fairly good season has been experienced, I question if we could find in Australia a man on the land who could show a credit balance on his year’s operations. The fact remains that any man who can feel sympathy for people, who goes among the farmers and others engaged in rural industries, must feel his heart bleed when he sees the conditions. These people are passing through a hard and bitter experience, and upon the top of it the Government, whose first care it ought to be to make the conditions as easy as possible for them, are piling up additional taxation, not for war purposes, but for the ordinary purposes of government.
.- This debate shows the necessity for candour in introducing legislation. Had the Prime Minister, when introducing his land tax proposals, taken this House into his confidence, he might have lessened the wide range of the debate, and enabled honorable members to direct their attention to the particular object for which the legislation was introduced. As it is, the debate covers the whole wide range of the original taxation proposals which were so exhaustively debated in this chamber in 1910. I have looked up much of that debate, which was one of the finest that have ever taken place in this Legislature. We were assured just before the last elections that during the continuance of the war the late Government, which I supported, would not, because it would be wrong, deal with anything contentious. An appeal was made to the country to create a Government that would take full cognisance of the war conditions and provide peace conditions within Australia, if it could not do so abroad. May I ask the Prime Minister and his party if this is the first instalment of the peace proposals of this peace Government? If it is, they are courting war to the knife, and war they will have. So far as I am able to keep the thing going, I shall do my little bit. We may take it that, instead of this being a peace proposal, or the Government a peace Government, we are now in the hurricane season of the taxation proposals of the Government, introduced at a time when those against whom they are directed are least able to bear them.There has never been in the history of Australia a period when the people on the land have been less able to bear the burdens sought to be imposed upon them by this Government. That fact cannot be emphasized too often. The honorable member for Indi said that the honorable member for New England had repeated the criticisms on many phases of the question offered by previous speakers. He could hardly help doing so, and would not- be doing justice to his electors and to his own conscience if he were not to record an emphatic protest on behalf of the people who sent him to this Chamber. I give the honorable member for Indi credit for the manner in which he sought, from his point of view, to show the people of Australia that a mere additional contribution of 2s. lOd. per annum was not going to kill the farmer who owned land to the improved value of £10,000, but with a taxable value of £5,000, and that he would be unpatriotic if he failed to hand it over in this time of war. That is a specious argument, on the face of- it; and were that the only aspect of the Bill affecting that farmer, he could take no objection to it, unless he were an unworthy citizen of this great country, in such a time of crisis. But the honorable member very cleverly and astutely side-tracked the other effect of the Bill, namely, that, if we can believe some members of the Labour party, who are sufficiently candid to put the truth about the measure forward, its real object is to burst up large estates. It is an inescapable doctrine that if we reduce the value of the broad acres, the value of the small farms must come down also. I defy the honorable member, with all his astuteness, to- prove to the farmers of Indi that if he brings down the value of the large holdings he can still keep up the value of the small holdings in his electorate. The life earnings of these men are wrapped up in their little properties, and the honorable member cannot prevent them from suffering from the shrinkage in value which will be the effect of this tax.
– That has not been the effect in any country where the land tax is in operation. Take New Zealand,, for example.
– It is the inevitable effect. I have been concerned a good deal with land, and venture the opinion for what it may be worth that, with the exception of land such as is to be found around Colac and in the Tower Hill country, and the rich river flats in the districts of the honorable member for Richmond and the honorable member for .Cowper, where the lands can hardly be brought down in value, because these rich volcanic lands are limited in area and the population keeps increasing, values throughout the broad range of our country generally have been reduced as a result of the land tax. Let me place on record the view of one member of the Commonwealth Labour party.
– How do yon reconcile your statement with Senator Millen ‘s declaration in another place that the Federal land tax had not lowered the value of land ?
– It is not my concern to reconcile my views with those of any other honorable member. I make the statement from my knowledge of the country. A fair amount of land goes through the hands of the firm with which I am associated during the year, and we ought to know something about the question, seeing that the operations spread well over Victoria. We are indebted to Senator Stewart for a very candid expression of opinion on tha subject. On 14th October of this year he made, on the floor of another place, the following clear and most definite statement -. -
In 1910 the Labour party was so seized of the desirability of increasing the opportunities -
– Is the honorable member quoting from a speech made in the Senate on this question 1
– Then the honorable member will not be in order in doing so.
– Then I will give the effect of the speech, which was that the party imposed land tax legislation, and that, notwithstanding that it had brought in an aggregate revenue of between £5,000,000 and’ £6,000,000, it had failed to secure the object which the Labour party had in view, namely, the bursting up of large estates. He went on to say that that was the real object of the party. If there is one man in that party who is acquainted with the subject of land taxation, and with the objective of such taxation, it is the honorable senator to whom I have referred, and I should like the honorable member for Indi to reconcile his views with those of that honorable gentleman. According to the honorable member for Indi, the Bill will impose upon the holder of an estate, the improved value of which is £10,000, or a taxable value of £5,000, a tax of only 28. lOd. If that be so, the unconstitutional object which the- Govern- went is by this indirect means .trying to achieve will not be achieved. The honorable member for Indi may be able to explain away his statement when before his constituents, but the contrary view will also be put before them when he seeks re-election. The Bill will increase the taxation on freehold lands, and impose taxation on lands held under lease. I shall not enumerate the various forms of leasehold in Australia, which are numerous, but I wish to point out that the leased land is the property of the Grown, and. under the direct control of the Governments of the various States. Each State, since it was granted constitutional government, has had to carry the baby in respect of its leasehold land. It has only been by offering premiums that it has got this land taken up, sometimes in large areas, and sometimes in small, and sometimes under lease, and sometimes under licence. Each State, too, has made reservations for its own purposes. Thus we have timber reserves, mineral reserves, and even, as the honorable member for Barker pointed out, oil and salt reserves. The tax which the Labour party seeks to impose is a tax on ‘the Governments of the States. The lessees of these State lands have merely the limited rights of user. The Attorney-General thinks that he sees a taxable margin between the rentals of -these lands and their true economic value, but whenever a State chooses to turn the screw a little, and put up the rent) this taxable margin must disappear. As to the proposal to impose land taxation to burst up large estates, J would say in the first case that, so far as it applies to the lands of Western Australia and New South Wales, it is an absolute condemnation of the Labour Governments in power in those two States, because, having absolute control of the land policy of those States, they have neglected to provide adequately for settlement. It seems to me, however, a preposterous thing that the Commonwealth should try to dictate to the States on the question of land policy, seeing that the sovereign rights of the States in respect * of land matters were reserved to them by the Constitution. The Governments of the States have, in some instances, bought back large estates, subdivided them, and resold them to increase the facilities for settlement. They have sent agents abroad, and have agents within their borders, whose business it is to get men to settle on the land. While the Labour party may tax the present large holders off the land, it cannot tax new men on. It is impossible, by imposing taxation, to secure men possessing the requisite knowledge, grit, and inclination to settle on the lands of the country.
– Any number of men are desirous of settling on the land, but cannot do so.
– The honorable member supporting the Government is a wheat-grower in New South Wales, and he, in effect, tells this Chamber that the Labour Premier of that State is neglecting his duty to the people by failing to make land available for settlement; that there are many persons there who wish to take up land, yet the Holman Government will not provide land for them. But the Commonwealth has no constitutional right to interfere in matters of this kind. It is, however, proposed to do indirectly, by means of land taxation, what constitutionally we cannot do directly. The honorable member for Echuca spoke about a little bird whispering abroad the real object of this tax, but it has whistled aloud from every tree that the object is to burst up the large estates to secure closer settlement. We gather from the declarations of honorable members opposite that that is the intention of this measure, though the Leader of the Government has not said that it is a Bill to provide for closer settlement. If, as seems to be the case, its genuine and bond fide, object is to increase settlement, why does not the Government propose a common-sense method of dealing with the land? The first step needed is to classify the land according to its quality. The classification might first be directed to valuing the lands suitable for settlement close to public utilities, by which I mean railways, water schemes, and so forth. But there is another class of land, which, far removed from railways, is absolutely unsuitable for cultivation, and which, even in large areas, could not, under any process of taxation, be put to much better uses. It is a cruel wrong and injustice to tax land-holders, who have taken their families out to inferior country in distant parts, and who, in many cases, have to do without the advantages of civilization.
– And many of whom are heavily mortgaged.
– That is so; in many cases more than half the necessary capital has been obtained from financial institutions in order to enable them to found homes.. This Bill cannot assist in the slightest the settlement of such country, but will merely confiscate a value that has taken years of labour and industry to build up. There is an aspect of the case which I hope to be able to place before honorable members on behalf of the large land-holders of Wannon particularly. There is no land-holder in Wannon that I know, big or small, who in this time of stress would not make his contribution, according to his means, for the defence of the country. This is a time of great trial, when the fate of the Empire is at stake, and when, from day to day, we watch’ anxiously for news across the water. Farmers, large property-owners, dairymen, and orchardists1 have sent their sons to the front, and to-day old men may be seen in the fields doing the work of their boys. Are these the sort of men likely to be found skulking when it is a matter of making financial contribution to the defence of the country ? I disclaim any desire to stand specially for the large land-holders, and if the Government will take their courage in both hands, and renounce their plan of unconstitutionally dealing with the lands, and surrender to the States the just rights of land taxation, I pledge myself to assist in introducing and passing a Federal income tax which would make a levy on every citizen, including honorable gentlemen opposite, who are not called upon to contribute under this measure. 1 never have been keenly in favour of a land tax. The honorable member for Indi did some of us, at any rate, an injustice when he said that we were loud in declaiming against the Federal land tax, but did not object to a State land tax, because, personally, I did object to a State land tax. I find that the great need in Australia is to obtain population to use our lands, and for that population we look all over the world. If we single out our land-holders for special taxation, and exempt their more fortunate brethren, we make an unjust distinction - we place a special impost on the wood and water carriers of the country. I have always been an advocate of an income tax, and at the present time I am prepared to turn this machine of taxation to the very limit to assist in the defence of the country and the Empire. The burden of defence should be equitably and fairly spread all over Australia. This system, which is what I might call reprisal, and vindictive reprisal at that - which picks out 14,000 persons as subjects of special taxation at war time - is absolutely unworthy of the Government. There is no mandate for such taxation, and honorable gentlemen opposite, if they intended to impose it, failed in not informing the country of the fact. I challenge any member of the Labour party to show me any declaration before the elections that it was their intention, if returned to power, to impose a land tax in order to finance Australia in the ordinary sense of the word, or even to finance it for defence purposes. I wish to put a further aspect of the question. The Minister of Trade and Customs has, on several occasions recently, dealt with the question of the wheat duty.
– And dealt with them very well, too!
– The honorable gentleman has dealt with them in a way that will cause him to be known as “ Cobden “ for the rest of his life, for he has renounced his Protectionist policy, and thrown over the farmers. It was pointed out to the Commission which investigated the matter that many men were going to make fortunes on the wheat market, and that one man in particular would make £90,000. If that be true, will the Minister of Trade and Customs tell me how, under the taxation proposals before us, that man will contribute one penny of this large sum which, it was said, he has; unjustly and unfairly extracted from the people of this country?
– I never said any man had made any such sum.
– I did not say that the Minister had made the statement, but members of his party have, §nd it has been recorded in the newspapersCan this be a fair basis of taxation when a man, who, in one season, and within a few weeks, and at wartimes, can make a fortune of £90,000, i* not called upon to contribute one penny of it to the defence of the country ? This form of taxation, if it goes on, may have one effect. It may return to power a party which will take a view more fair and equitable; but, in the meantime, it will be responsible for the ruin and destruction of the best interests of the, country, and the breaking of the hearts of many people who have slaved for years to help its progress.
.- Were it not that time presses, I should be sorely tempted to reply to many of the inconsistent arguments that have been used on the other side in connexion with this Bill.
– The honorable member has not been here to listen to them.
– If I had been here, I should probably have more inconsistent arguments to reply to. I rise for the purpose of saying that the objections I had when the original land tax proposals were before us a few years ago, hold good now. These objections were two ; the first, that so far as the object of the legislation was to burst up large estates, however laudable and desirable that object might be, it did not come within the jurisdiction of this Parliament; and the second, that when taxing wealth for revenue purposes it was unjust that only one kind of wealth should be taxed. I am aware, of course, of all the taking arguments used in favour of the single tax; but they have never convinced me that the man who invests in land should be taxed, while the man who invests in Government debentures should go free. In Victoria the hard-working farmer about whom wo hear so much from the other side is taxed on the income he derives from his land, but the man who invests in Government debentures pays no income tax at all. That is the result of socalled Liberal legislation in this State.
– The small farmer in Victoria does not pay income tax on the produce of his land.
– Up to recently he did so. It was only when the land tax was imposed that a concession was made.
– Yes. When the land tax was imposed we remitted the income tax in the case of land-holders.
– Exactly; up till then the Victorian Government made a man pay income tax upon the income which he derived from land, but they did not make the individual who invested his money in Government debentures pay income tax. When taxation of wealth for revenue purposes has been rendered necessary, I have never yet been able to see why land alone should be taxed. For that reason I opposed the Land Tax Acts when they were originally introduced into this Chamber, and for the same reason I oppose this Bill. So far as expenditure for war purposes is concerned, I am strongly of opinion that there ought to be one general war tax. If I had my way, I would impose a surplus wealth tax, and I would make the exemption the amount at which it ceased to pay the Commonwealth to collect it. In regard to war expenditure generally, I think that we should all contribute according to our ability, and that taxation should stop at the minimum at which it would not pay the Commonwealth to collect it. That is all I rose to say.
Question - That the Bill be now read a second time - put. The House divided.
Majority … … 11
Question so resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 -
The First Schedule to the principal Act is repealed, and the following schedule is inserted in its stead : - “ First Schedule.
Rate of Tax when an Owner is not an Absentee.
For so much of the taxable value as does not exceed £75,000, the rate of tax per pound sterling shall be one penny and one-fifteen thousandth of one penny where the taxable value is one pound sterling, and shall increase uniformly with each increase of one pound sterling of the taxable value by one-fifteen thousandth of one penny.
For every pound sterling of taxable value in excess of £75,000 the rate of tax shall be ninepence.
.- I wish to ascertain if the Treasurer can show how this taxation will work out upon lessees. By the courtesy of the Treasurer I have been able to obtain from the Land Tax Commissioner the following examples of how the taxation of Crown leases will work out -
The unexpired period of the lease is, say, twenty years. The lease rent is £200 per annum.
To find the leasehold estate, take 4½ per cent. of the unimproved value.
Capitalize £700 for twenty years at 4½ per cent. compound interest.
The tables give the value of £1 per annum for twenty years as 13.208.
The unexpired period of the lease is, say, twenty years.Rent under the lease equals £200.
additional taxcaused by assessing freeholds and leaseholds together.
If the freehold had been assessed alone no tax: would have been payable, the unimproved value being under £5,000.
This is the additional tax due to the inclusion of the leasehold.
– With a large leasehold and a small freehold there will be a tremendous lot more to pay.
– The effect of taxing leaseholds will be that more freeholders: will be brought under the scope of this tax.
– The Land Tax Commissioner works out his figures on wrong; premises ?
– In Queensland only a small area has been alienated. There were, in 1912, 317,615,144 acres held under leasehold and licence. There were 42,465,360 acres held under occupation licence. Under the 1910 Land Act there are 354,842 square miles held under pastoral lease. In 1912, the average rent per square mile was 17¾d. The difficulty will be in working out this rental. In the case of an estate vested in the Crown, you have to start apparently from a freehold basis, and the Commissioner, in order to assess the Crown leases, will have to assess the freehold values throughout Queensland. Inasmuch as the alienation of large estates by the Crown in that State is contrary to the policy of the State Government, it will be difficult to get a basis for the valuation. These large areas are leased to the pastoral tenants; the Crown fixes the rentals in the first instance, and the Court is given power to assess them from time to time. These leases are part of the developmental policy of the State. The freehold basis having been fixed, then the unimproved value of the leasehold is obtained upon an arbitrary principle.
– If 2s. 6d. per square mile is a fair rental, what is the capitalised value of the country ?
– I am glad the honorable memberhas asked that question, because that illustrates the difficulty. I do not think that the rent anywhere in Queensland is as low as 2s. 6d. per square mile.
– It would not be taxable.
– The honorable member is wrong. The State in fixing a rental of 2s. 6d. or any other sum per square mile is not fixing it for an ordinary tenant. These large pastoral areas are remote from centres of civilization, and the Crown is eager to get them occupied and made productive. In addition, some of the areas are in danger of infestation by prickly pear and rabbit, and although the rental may be 5s. or 10s. a mile, or a higher sum, there are other conditions which have to be complied with under the improvement covenants. Be that as it may, the Commonwealth look to the freehold value. The rental may be only 10s., but the Government may regard the freehold as worth 5s., 10s., 15s., or even £1 per acre.
– Not on that country.
– We cannot tell. I think the honorable member will find that in some of the old sales of Crown land freehold was fixed as high as £1.
– Yes, but not very much of it.
– That fact has to be taken into consideration. The whole trouble arises in this way, that the Crown in Queensland is dealing with the tenants as Crown tenants, and they have their Land Courts, which, after the grants assess periodically these values upon the principle I referred to this morning. Section 125 of the Queensland Land Act provides -
The Court, in determining the rent of a pastoral holding or grazing selection, shall have regard to -
Those are the different elements which the Court has to take into consideration in fixing rents. On the top of that, the Commonwealth is coming in as a sort of superior authority to try to get something which it is said has not yet been got out of the pastoral tenant. For getting that extra contribution, the figures supplied by the Land Tax Commissioner show the basis on which the tax is to be worked out. Honorable members are introducing into this Bill an entirely new principle. I would like to reiterate the statement that, when the Bill of 1910 was introduced, it did apply to these leaseholds. Then Parliament decided to specially exempt them. Now, for some unknown reason, the Government are reintroducing this very big problem, and the Committee have no explanation as to why this is being done. As I have said, it will create difficulty, and I believe it will burden the tenants. The policy of the Queensland Government is to induce people to go into the outlying districts and mate them productive.
– It would be better to discuss this point when we are dealing with the Assessment Bill.
– When once we have passed this Bill, it will apply to leasehold and freehold alike, and both will be added together to produce a cumulative effect. We may discuss, on the next Bill, the principle of whether we shall tax leaseholds or not, but this is the measure which fixes the rate. In any case, the discussion now will save discussion at a later stage. I hope the Treasurer will give some explanation of how what appears to be an artificial rule fixing the valuation of private lands before the commencement of the Act, is now to be applied to the tenants of the Crown all over Australia.
.- I would like some explanation of the reason for imposing these very heavy rates of taxation on leaseholds. It is common knowledge that there are considerable areas of Australia which can only be worked in large holdings. Men with small capital, who could only work a limited area of this land, are bound to fail, as has been proved by repeated experience in different parts of the country. There are areas hundreds of miles away from the centres of civilization, which are so situated that the cartage of material and provisions and the conveyance of stock are very costly. They are very often subject to severe drought, and the conditions generally are such that they can only be worked by men with large capital. They take up large areas of this land, and with their capital they are able to conserve water and put down bores. Inasmuch as great parts of the Commonwealth can only be occupied and made productive, so far as we know at the present time, by citizens of considerable means, why should they be called upon to pay a tax which honorable members opposite advocated as a bursting-up tax? Five years ago our honorable friends came along and said that they desired to place a very heavy burden of taxation on large land-holders. Why? Because they wished to. see those lands occupied by small settlers. However one may object to their methods, there is no difference of opinion in this House as to the desirability of getting closer settlement wherever it is possible. But when “we find our honorable friends applying this taxation to huge areas which they must admit can only be occupied, developed, and worked by men of large capital, I ask why should such men be singled out for taxation,, which it is admitted is penal in its character, and is intended to have that effect? Is there any justification for applying the taxation to that class of holdings? Surely we are entitled to hear from honorable members opposite what is the object they desire to attain. They cannot burst up these holdings, but they can tax the holders off the land provided that it is possible to adopt the method of valuation which is indicated in the table read by the honorable member for Darling Downs. I do not know whether that is possible or not, but it seems to me that it is not practicable to value on a freehold basis, which appears to be the basis that the Commissioner chooses to use as an illustration, huge areas of land which the Crown has for various reasons laid down shall never be alienated. How are we to arrive at a freehold basis of valuation for land which can never be made freehold? It seems to me, as the Attorney-General indicated in his secondreading speech, that there can be only one method of arriving at “ the economic value,” as he termed it, and that is to ascertain how far the rental demanded by the Crown falls short of the value which it should have demanded. I would like to hear from the Treasurer, now that he is here, what is the reason for taxing the leaseholds and using the penal provisions of the Land Tax Assessment Act? Is it the desire of the Government to burst up large leaseholds? Surely he can say “ Yes “ or “ No.” He is looking at me, but why is he silent when a simple, straightforward question is asked ?
– He might look at you pleasantly.
– Why should we be treated with absolute silence by the Treasurer ?
– It is not the silence, but the frown.
– I do not mind the frown. I can understand the right honorable gentleman frowning at being asked a straightforward question about a matter concerning which we have been vouchsafed no information, but I think that the Committee is entitled to an answer “Yes” or “No.” Why is it, I repeat, that the Government direct this legislation, which they admit to be penal, at men who, by virtue of the fact that they are wealthy, are able to open up, develop, and work profitably, areas which from, their very nature it would be utterly impossible for men of small means to open up and develop ? Can the right honorable gentleman tell me? I venture to say that he cannot, and, what is more, he dare not answer the question in a straightforward way, because he knows that the moment he opened his lips it would be to condemn his own policy. He knows that honorable members behind him will not let him answer the question. He knows that his party are divided on this proposal. He knows that if he did answer the question he would have to answer for it upstairs.
– Order 1
– Try the Minister of Home Affairs.
– If the Prime Minister is dumb, I venture to say that the Minister of Home Affairs is still more dumb. This is for Australia a very serious business. Here we are, in a country a large portion of which, from its very nature, cannot be developed and made profitable except by men with large capital, who are prepared to take all the attendant risks, which I need hardly say are very great. Everybody knows that there are men who have invested large sums in attempting to open up and develop big areas in the back-blocks, but who have lost every single penny they invested. It has only been since experience has shown what are the best methods for developing the interior, and how water can be best conserved, that it has been at all possible to obtain any profitable results. Yet the Government come along at this particular period and endeavour to tax these men off the land, for that is what it means. If the Commissioner is going to set to work to value the lands on the basis which the table he supplied to the honorable member for Darling Downs would lead us to believe, and which, I venture to say, is quite an impossible system, there is not the slightest doubt that it will lead to very heavy taxation indeed on the leaseholds.
Sitting; suspended from 6.30 to 8 p.m.
– There are some points in connexion with this measure which I wish to bring under the notice of the Prime Minister. I hope I shall be able to convince some of his supporters that this tax will seriously affect the leaseholders of Australia. It should be remembered that the portions of Australia held under leasehold are being developed to a very great extent by people who hold other property, and it may be freehold property, in States other than those in which they hold leasehold property. These people have lost a very considerable amount of money in years of drought in the past. I feel certain that the Prime Minister does not expect that this taxation will have the effect of breaking up leasehold properties in remote districts of Australia for purposes of closer settlement. We are endeavouring to-day to induce people to go with their capital to the Northern Territory to develop that country bv taking up leases under the Crown. The people who will do so must be the forerunners of closer settlement, as those who have developed the outlying portions of Australia in the various States have been in the past. The Administrator of the Northern Territory tells us in his report that the small farmer is practically of no use there. We must, in the first place, have the large leaseholder, who will prepare the way for the small farmer. In New « South Wales, and particularly in Queensland, there are some very large Crown leases in connexion with, which the Crown has the right of resumption. From time to time certain portions of these leases are resumed, and the lands balloted for under a modified system of closer settlement. I should like the Prime Minister to say whether he desires to penalize the people who have put their money into these Queensland leaseholds. If the object is to impose a revenue tax, it is quite right that these people should be taxed, in common with all other holders of leases, but the holder of a small leasehold should be required to pay proportionately the same tax. We have been told by the honorable member for Darling Downs that, in the case of a person who owns no other land in the Commonwealth having a property the unimproved value of which is £20,000, according to the calculations of the Land Tax Commissioner, the taxable value of that property would be £9,308, and the leaseholder would have to pay a land tax of £23 2s. 2d. That would be a very reasonable tax; but if, as is frequently the case, the owner of this leasehold is also the owner of freehold in any part of the Commonwealth, the value of his property is reckoned together, and if the total value comes up to £75,000, the taxation upon the leasehold would be under the 9d. rate, and, instead of being £23 2s. 2d., would amount to £344 ls. Is that a fair proposition ? Is that a fair way in which to tax leaseholders in Queensland, who are subject to a right of resumption by the Crown?
This is distinctly a class tax upon people who have done their best to develop Australia. I have often thought that some of the gentlemen who advocate this kind of taxation should have put a little of their savings into Queensland leaseholds. It should not be forgotten that the men who went out to Western Queensland in the early days had first to learn what was to be done with the country. The honorable member for Darling knows perfectly well that those men had no experience in the district. They believed at first that they would make a great success in pastoral occupation by sinking wells to water their stock. They found that that was absolutely useless. Then the system of overshot dams on the creeks was adopted . Where a hole 30 feet or 40 feet deep was found, it was thought that, by putting up a bank of 20 feet, 50 or 60 feet of water might be conserved. But the soil being loose, it was found that, in a dry season, instead of having 40 feet of water, they might- not have more than 20 feet in the dam. Later the pumping system with a circular dam was tried. These were three stages of development of the western country, during which the holders of properties in Queensland invested a great deal of money, which was absolutely lost. Then came the system of artesian boring, and the artesian bore made a comparative success of pastoral occupation. Crown lessees put down bores for 3,000 feet, at a cost of £5,000. Some of these bores have not been the success that many persons think they are. Some bores sunk, on the higher lands have ceased to be artesian; the water has sunk as much as 60 feet in the casing, and it is necessary now to pump it. If honorable members will consider what the people who went out into Western Queensland and took u.p Crown leases have had to go through, they will realize to some extent the enormous losses that many of them, have suffered .. I. take, for the purpose of further illustration, a. larger leasehold than that referred to by the honorable member for Darling Downs. Multiplying the honorable member’s, figures, by four, I. take the case- of a leasehold property the unimproved value of which is £80,000. The taxable value of that, property would1 be. £37,22. The rental payable to the Crown *is £1,200 a year,, and, deducting that, we have a taxable value of £36,032. Iff that comes, under the 9d. rate, because, the holder of the lease is also the possessor- of freehold land of value in some other part of the Commonwealth, he will be required to pay Federal land tax on that leasehold to the- amount of £1,351, or considerably more than the total rent he is called upon to pay for the land. I do not think that any one will contend that that is a fair proposition. There would not be so much to object to if it were proposed to tax a leasehold on its own basis, but when the ‘value of the lease is added to the value of other properties held by the lessee, and the total value brings it under the higher rate of tax, it becomes a very severe impost indeed. The Government may believe that they will obtain a certain amount of money at the expense of persons holding leaseholds in Western Queensland, the rentals of which may be reappraised from time to time. What will be the natural course of events under a tax of this kind? The State Government of Queensland will in all probability double the present rentals, and there will then be practically no taxable value left on which to impose this Federal tax. Surely honorable members supporting the Government do not contend that these leaseholds should be broken, up. There can be no question of closer settlement in the western districts of Queensland, and the Government proposal is really to tax the owners of these leases off the land, especially in a bad season. I have been referring chiefly to portions of Queensland comprised in the higher downs country. There are no rabbits or other pests in that country, but the leaseholders are called upon to pay considerable taxation to- cope with the rabbit pest. They have to pay towards the cost of the wirenetting fences which are run across Queensland in the endeavour to- prevent the rabbits going further north in that State. What is to happen to these waste lands of the State, which can only be profitably used at the’ present rentals imposed upon- them? What is to be done, in the case of the prickly-pear country? Are people likely to go- there, and to spend their money in an. endeavour to improve that country, if. they know that they are to- be taxed in this way ? I think that the Prime Minister, before this debate doses-, should, deal- with this; question of. leaseholds^ and inform Australia whether it is the intention- of the Labour party to practically cripple^ the leaseholders in the< outer portions of tha Com- mou wealth. If it is, the right honorable gentleman will be able to set a bold policy before the people. He will be able to say, “ We will not allow you to have large leasehold properties in the States; but come along to the Northern Territory, and we will treat you differently.” That, I contend, is not a fair proposition to put before the people.
.- The silence of the Prime Minister and his followers leads me to the conclusion that, as representing the men on the land in our constituencies, we, on this side, have very little hope of obtaining sympathetic consideration for the very many cases that have been made out in their interests. I desire to make a final appeal to the Prime Minister. I wish to point out the great disability under which the man on the land will suffer if this clause be allowed to pass. I am quite satisfied that the first schedule to the principal Act, and now in force, is all that should be enacted in the present circumstances. In view of the drought and the troubles from which the men on the land are suffering - and they are by no means out of the wood yet - I think that the amount which the Government expect to realize from the imposition of this taxation will not be easily obtained. In the first place, we find that the estimate of £2,700,000 is about £1,090,055 more than was realized in 1913-14. If this tax on leaseholds produces what I am told it is estimated to produce, namely, £500,000, this means that the existing taxpayers will have to pay an amount equivalent to 36 per cent, or 37 per cent, more than they are now paying, although their position to-day is much worse than it was last year or the year before. I therefore move -
That the word “ fifteen,” twice occurring in the first schedule be left out with a view to insert in lieu thereof the words “twenty-five.” 1 am not prepared to retreat for one moment from the position I take up, that the present imposition is quite sufficient in existing circumstances, although it seems impossible to get the Government to see it, but I propose to test the feelings of the Committee, and to see if the Labour party’s boasted plea of voicing humanitarian doctrines is a mere farce, or whether it has any deep significance, by asking them to exercise a humanitarian judgment in this matter, and to vote for this amendment.
.- I support the amendment, believing that some relief should be given to way-back settlers. On several occasions I have had the pleasure of visiting the western districts of New South Wales, especially the Darling River country. About six or seven years ago I visited a big station there known as Winbar. I was informed on that occasion that the station comprised 500,000 acres on lease extending over a period of forty-three years, and that, since the signing of the lease, certain portions of the property had been available for settlement, but that not one block had been taken up. In support of the statements made by. the honorable member for Corangamite, I should like to point out that the area to which I refer is not suitable for closer settlement, lt is essentially country for the big pastoralist. There is hardly an acre of land cultivated in the district. I noticed that there were eight or nine boundary riders employed on the station, and that they were using a single-furrow plough in an effort to cultivate a small area. They know nothing about the work, being essentially sheep farmers, and I was satisfied that no effort had been made to grow wheat there, unless it might be sufficient to supply their own requirements. Coming to the question of the economic value and the rental value of the land, in New South Wales, so far as settlement and improvement leases are concerned, the owners have to appear before the Land Boards from time to time, when values are entered into very carefully and reappraisements made. If there is any disparity between the economic value and the rental value, it is a matter for adjustment by these Land Boards. Any difference between the two is immediately filled up by the Board, so that there would actually be no rent for the Commonwealth Government to levy upon, since the whole difference would have been adjusted by the States. For this reason, I think some relief should be given to these men. The wayback settlers have denied themselves the privileges and luxuries of civilization, and are acting as the outposts of Australia They are just where we want men, and surely our experience of the Northern Territory should lead us to extend sympathetic consideration to them. Although the Northern Territory is as big as England, Scotland, Ireland, Germany, and Prance combined, we have not yet been able to settle there more than a thousand people. I f we impose these disabilities on people, who desire to develop country that is not required by others, we shall place a stumbling-block in the way of the true progress of Australia.
.- I should not like to allow this clause to pass without expressing my strong objection to it. My surprise is that at any time, and especially at the present, the Government should desire to interfere with Crown lessees in the States. The Government seem to have forgotten that Australia is very sparsely settled by pastoralists. Only the fringe of the country is occupied by them, and we ought to do all we can to give them the opportunity to extend their operations further inland. Instead, we are placing more burdens on them, apparently in the hope that this will encourage people to go out into the far back lands. From my knowledge of the interior, the advance of settlement must be slow, whatever inducements are offered. The natural obstacles in the way are very great. One-fourth of Australia - the interior - has no river system at all; but this Bill puts added burdens on those whom we want to go into that interior to advance settlement. We have done very little with the Northern Territory since we took it over, and if this policy is pursued it will not be settled for many years. I suppose the Bill will apply to the Territory; but there is not much settlement there yet, and I do not suppose there is more stock on the Victoria River and the Barklay tablelands to-day than there was before the Commonwealth took over the Territory.
- (Dr. Maloney). - Ifc will be necessary for the honorable member to confine his remarks to the amendment before the Chair.
– I shall- do so; but I trust I shall not lose my right to speak on the main clause. I would have much preferred that the honorable member for Hume had not moved to amend the main clause at all. I would sooner have the provision in the original Act, which is one thirty-thousandth. There is not much difference between one twentyfivethousandth and one thirtythousandth.
.- W Will the Prime Minister inform the Committee what effect the amendment is likely to have on the revenue which the Bill is expected to raise?
.- The amendment does not seem “a very serious proposal, but the purpose of the Opposition is, of course, to prevent the Government, if possible, from carrying out their financial policy, and the amendment, therefore, can have no other object. I do not complain of what the Opposition do, but they cannot take up two attitudes. They are entitled to resist our proposals, but the Government consider that this revenue is necessary. The amendment would have a lessening effect on the revenue to the extent of the difference between one fifteen-thousandth and one twenty-five-thousandth, and it would break up the whole scheme. A great deal has been said about this being wholly a “breakingup “ tax. It has never been so with myself, and I have never concealed that view of mine from the public at any time. A tax on the unimproved value of land is not a tax on industry; it is a tax on value, created, not by individual owners, but by the community as a whole. The honorable member for Richmond challenged me to say “ yes “ or “ no “ to a question on that point. I do not need to do so. The breaking-up effect is only incidental to the tax, and it is a very good incidentality, too, for this country. Honorable members on this side feel just as keenly for those who are individually suffering hardships through the tax, but it is not a tax which will destroy wealth. It will rather promote the wealth of the country, unless it is excessively burdensome. That has been its tendency in every country where it has been applied.
– What will be the incidental effect as regards the breaking up of big leaseholds?
– I do not think it will have a seriously disturbing effect. The honorable member for Darling Downs knows that, because he has looked into the matter, and has been provided with every facility to obtain all the information that our officers could give him regarding it.
– He ought to have had it.
– It was given cheerfully.
– The Prime Minister is quite correct. I asked for the information, and the Prime Minister gave me permission to get it.
– At present certain kinds of leases are taxable. This Bill includes others. There is no violation of any principle of the old Act in it. Perpetual leases and conditional purchase leases are now taxable. This proposal extends the tax to other leases, with exceptions which will be dealt with in the amending Assessment Bill which is to be introduced Liter. Honorable members have had a fair opportunity to express their views, both by voice and by vote.
– It is our constituents who have to bear the tax.
– We shall all have to bear it. At any rate, the responsibility for providing necessary funds rests upon the Government, and, with some reluctance, we have decided to get a certain amount in this way.
.- The Prime Minister has answered my queries by telling me nothing. I wish to know how this amendment, which does not alter the starting-point of the tax, but reduces the rate of increment, would affect the revenue. The Prime Minister, being in charge of the Bill, should be able to say how many estates there are, broadly speaking, within certain limits of value, and what the financial effect of the amendment would be upon the return from the tax. It ought not to be difficult to get the information, unless this proposal has been determined upon in a rough-and-ready way, and is to be bludgeoned through. The Prime Minister, or his officers, must have information which might assist the Committee.
– The Commissioner for Land Tax gave the best estimate that Ite could.
– That estimate was based on the number of estates of specified values. If my right honorable friend would get his officers to work, the information for which I ask could be obtained within five minutes.
– The officers are not here.
– This is a curious way in which to deal with taxation proposals. If the Prime Minister were on this side of the chamber, his voice would be the loudest in complaining of what is being done. The National Parliament is asked to impose a tax, but cannot be told the effect upon the revenue of an amendment submitted for its consideration !
– We should need a Government Statist on hand for every amendment, to meet the honorable member’s views.
– It would not be necessary to have a statist for each amendment; one would do for every question affecting statistics. I am sorry that I cannot obtain the information to which, as a member of the Committee, I am entitled. I have been singularly patient hitherto, because, although the Prime Minister has confessed that the revenue which is to be obtained from the tax is required, not for the purposes of the war, but for other purposes entirely, I admit that the times are difficult, and I do not wish to embarrass the Government in any shape or form. But, apparently, Parliament has become a mere machine to register the will of some official who cannot spare time to come here to inform the Committee.
.- There are a few matters about which I desire information for the salving of my political conscience, if conscience may be said to have any force in politics. I agree with the Prime Minister that, if there really is unimproved land value, it is the expression of benefits derived from public utilities, and fairly subject to taxation. But it is proposed to tax leaseholds on the assumption that they all have a freehold value of 4i per cent. In order to assess a leasehold, we must find the unimproved value of the land in fee simple, and we are establishing an artificial fee-simple value which may not exist. That raises the question whether the tax is valid ; whether we can declare by Act of Parliament that all land leased by the Crown has a capital value represented by an annual value of 4^ per cent. That is a matter upon which I am not now going to express an opinion. But it seems inexpedient to arbitrarily assign a capital value to leaseholds in this way, irrespective of the considerations which determined the rental. Has the Prime Minister any data for our guidance as to how the proposal will work? Have statistics been obtained from the States as to the approximate fee-simple value of the leases which will be affected by the tax?
– Then we cannot say what tax is required.
– We have the estimate of the Commissioner for Land Tax.
– Have we an estimate of the average rentals charged by the States? We do not know how much less than this artificial rental of 4^ per cent, is now received by the States. Therefore, we cannot tell what the unimproved land value of the leaseholds is. We are, too, I understand, abolishing the distinction between perpetual leases, which are subject to- re-valuation, and leases which are- not subject to revaluation. All leaseholds are to be taxed on the assumption that they possess a certain value. Where, as in South Australia, leases are subject to re-valuation every fourteen years, the State assumes that there is no economic rent which it does not receive. The Commonwealth, however, says that there is. The State assumes that, for a great part at least of the period between two valuations, the rental should be that which waa decided upon, and sometimes, on re- valuation, there is. no increase. We however, say that there is a taxable margin.
– There is an exemption of all estates worth less than £5,000.
– Then only large estates are to be taxed. How many of these estates will be affected ? Abstract theories cannot be applied to these matters. Unless we are given details we cannot say whether the application of these principles is equitable. I am sorry that statistics which would assist us have not been furnished.
– I suggest to the Prime Minister that if he does not understand the position of the leaseholders, he should apply te such honorable members as the honorable member for Darling, the honorable member for Maranoa, and others who do. Is it fair that people who have gone out to develop Australia should be assessed at the 9d. rate? Is it not possible to come to some arrangement, so that there may be the land’ tax on the freehold as at present, but to have two assessments, under which the owners of freehold will continue to pay the 9d., while the leaseholders start at Id., and rise to that amount? Surely that is a reasonable proposition ? The leaseholders are not, and cannot become, monopolists, seeing that the land, in the case of Queensland, cannot become freehold, but reverts to the Crown automatically in a certain number of years. At a certain date so many hundred square miles are excised, and the rents re-appraised, and the balance given to the leaseholders for a certain term. There are some very large places in Queensland, and many wish there had not been, because a great amount of Victorian money has been dropped there without any hope of recovery. Some of the estates which were 1,600 square miles in good country are now down to 600 square miles, and in the course of a few years there will be a further reduction. Those on the land, whether people or companies, ought to be treated fairly. On a property the unimproved value of which is £20,000, is it reasonable to charge a person £23 if h= owns no other property, and £344 simply because he happens to hold freehold which brings him into the higher scale ? Those who have gone into the country and spent money there are now only getting back their own, and ought not to be penalized. The Prime Minister says that this is not a breaking-up tax; but what does 9d. in the £1 mean ? It will double the expense of working property, and the honorable member for Darling knows perfectly well that heavy rates are charged for shearing. If rain does not come at a particular time in Queensland, there is considerable loss of money on the year’s work, even in the case of properties on which nothing is owing; and where people have a mortgage it is impossible to pay the interest. The whole position varies according to the rainfall; and in the last twelve months in certain parts, the fall in the yield has been 2 lbs. of wool per head. Of course, last year was not a particularly good one, and there is rain at the present time; but if there be no more until January or February, the fall in the yield will be considerable. Although the Prime Minister denies that this is a breaking-up tax, I understand that tho honorable members behind him regard it as such, and the Attorney-General talks about a desire to break up the large estates in Victoria. Why smash up people who have put their money into Queensland property ? The Prime Minister urges that it is only fair that a certain amount ot revenue should be obtained from this class of land; but every one ought to be treated alike. Those interested ought to be given an opportunity to get rid of their properties, and allow others to fall in.
– I desire to make a final appeal to the Prime Minister. For some days I have been making every possible effort to get an intelligent grasp of the position. I have asked the Prime Minister questions in the House, and I have written to officials outside; and I have here a letter from the Commissioner of Taxes which leaves me quite as ignorant as I was before I started my search. I desired to ascertain the basis on which the capitalized value of the leases is to be ascertained, and this is the Commissioner’s reply -
In compliance with your request of 10th inst., I forward herewith an abridged table showing the effect of the proposed increase in the rate of land tax on estates having an unimproved value ranging from £1,000 to £100,000.
In regard to Crown leaseholds, the taxation of which is contemplated in a special Bill, which, it is understood, is to be introduced this evening, the tax will be calculated on the lessee’s leasehold estates, and the rate will increase with each £1 of taxable value in excess of £5,000 by l-15,000th part of a penny. Thus the rate of £6,150 would be one l,150-15,000th, which would apply uniformly over the whole amount (£1,150) liable to taxation.
How did the Commissioner arrive at those figures respecting the rate on £6,150? How did he arrive at the value of the lease?
– That is for the assessor.
– If we are to have valuers going throughout Australia to fix arbitrary values, we should be informed as to their instructions. I claim to have an average amount of common sense and knowledge, and I do not wish to ignorantly and blindly vote on a question of this kind. I am very desirous to have assistance, and I am not the only member so circumstanced, while there are hundreds outside equally in the dark. It is the duty of the Prime Minister to elucidate the matter, and give us some idea on which the valuations are to be based.
– I hardly think that any remarks of mine would change the view of honorable members opposite. The Commissioner of Taxes has been instructed to give all the information he can to honorable members, though he has evidently failed in some instances.
– He has not failed, to give the information.
– He has evidently failed to convey the purport and intent of the information desired.
– Perhaps the Prime Minister will succeed.
– At any rate, the honorable member for Wilmot ought to know what the Commissioner means. The honorable member for Corangamite raises an important issue by his suggestion that freehold estates and leasehold estates should be separated, and, I presume, assessed separately.
– Leaseholds of Crown lands.
– All the lands in Australia are Crown lands. The Crown never parts with the land.
– But there is a difference in the case of the freehold.
– There is a difference in the title. That is all.
– One is a permanent title.
– I am sorry that I cannot agree with the right honorable gentleman, and, if he will allow me to say so, I was rather disappointed with his reference to some people’s knowledge of the back country. Probably, during the time I have been in Australia, I have seen as much of the back country as he has.
– I do not think the Prime Minister is an expert.
– No; but it is not like the right honorable member to throw out these little suggestions. Nor is there any intention on the part of the Government, under this Bill, to hit at any particular class of the community. . If we desired to do that, we would proceed with a taxation measure of quite a different character. This is not a tax on capital, and nobody knows it better than does the Leader of the Opposition. It is a tax on the unimproved value of land, and that must, in the case of a Crown or any other lease, be a value in excess of the rental paid by the lessee. In regard to that excess of value over the rental, the lessee will get an exemption of £5,000. That is really the position. If there is one thing more than another necessary in this country, it is closer settlement.
– Is that the intention of this Bill?
– It is incidental, to it, and it will be a good thing if it can be brought about. I have been long enough in this country to remember the time when it was alleged that the Darling Downs country was not fit to grow a cabbage. That country was then held in large leases by persons, many of whom believed they were telling the truth. I am speaking of a comparatively recent period when I refer to the occasion on which a member of Parliament affirmed that it was not fit to grow a cabbage. Had that statement been believed and acted upon, the closer settlement of Australia would have been retarded indefinitely.
– But there is a vast difference between the rainfall of these areas and that of the Darling Downs.
– I am pointing out that the same idea prevails at the present time, namely, that these large holdings are necessary. They may or may not be. But it is remarkable that in Queensland, as the result of the speculative effort which is being made to secure comparatively small holdings, a much higher rent is being paid for them than has been paid for large holdings. As a matter of fact, success at ballots for land has resulted in giving small fortunes to some applicants. I am sorry that I cannot accept the suggestion of the honorable member for Corangamite. In reply to the honorable member for Hume, I have only to say that there has been no intentional failure to supply information, but I am sure that no honorable member on either side of the chamber expects me to deal with a formula such as he has suggested. It is plain in itself. It has been set out in the memorandum which was forwarded to the honorable member for Darling Downs, and which he was careful to put into Hansard.
– The same trouble is apparent in that memorandum as is manifest in the one which I have received.
– Anhonorable member interjects, “ We have not seen it in Hansard.” Negative evidence is worthless if honorable members are not here. The honorable member for Darling Downs was careful to put into Hansard the memorandum in question.
– It contains only the same information that I have here. The omission from it is the same as the omission from the communication which I have received, in that it does not disclose the method of the capitalization of the lease.
– In my opinion, the simplest method would be to allow the lessees themselves to value the holdings.
– And incur some of the penalties.
– The simplest method would be to allow the lessees to value their own holdings, and for the Land Tax Commissioner either to revise or agree to their valuations after a proper examination of them.
– Is that the method which the Prime Minister will suggest?
– It is the best method that strikes me at the present time, and I think it is a very good one. It embodies the same principle as is embodied in the principal Act. It is not intended to tax annual leases at all, and therefore a large body of settlement will be excluded.
– We have had an explanation from the Prime Minister, and I am sure we are all perfectly enlightened on this matter. Nothing more need be said. The honorable member for Macquarie is grunting about something in a sepulchral voice. I cannot make out exactly what he is saying, but certain peculiar sounds are being emitted by him. I wish he would either speak up or hold his tongue.
– He knows that the honorable member is an expert on land values.
– But I have never been expert enough to believe in this kind of thing. I tell the honorable member that he has never believed in it either. There is another honorable member sitting beside him who does not believe in it. One can see it in their faces. Then there is the honorable member for Grey who does not believe in this kind of taxation.
– He will vote for it.
– Of course he will. The honorable member for Capricornia knows as well as I do that this proposal is an attack on the principle of leasehold. I am amazed that honorable members who profess to be devotees of that principle should be prepared to vote to give it the dagger in this way.
– To the honorable member’s various rôles he adds that of clairvoyance.
– It takes no great effort to see what is the matter with the honorable member. It needs no special faculty to see through him. One has only to look at him. Anybody can see an absolute and utter contempt for this thing written upon his face, and upon that of the honorable member for Gwydir, too.
– Is that an argument against the Bill?
– The honorable member knows how many two and two make on this matter as well as does the next man, and he would be thundering for his life against the Opposition upon any aspect of this proposal other than that which is under consideration.
– A lot of the honorable member’s own supporters could not defend the double dissolution either.
– I understood that the Leader of the Opposition wanted to reach the end of the session.
– I fancy that the honorable member desires to get this Bill out of his sight. My impression is that this tax will prove to be a tax on capital, notwithstanding what the right honorable gentleman has said.
– The other night you said that it was a tax on the working man.
– I said what I am saying now, and the honorable member cannot twist it to anything else. I said that we could not hit one section of the community, be it the capitalists or not, without hitting the other section in turn. The capitalist and the working man can be hit at the same time. Let the honorable member, if he can, get that fact into his head.
– And we can collect the tax and divide the land at the same time.
– Then this tax is intended to cause the dividing up of the land ? Are honorable members anxious to re-divide leaseholds?
– Leaseholds are automatically re-divided in Queensland.
– The Treasurer says that this is not a dividing tax, and that he has never been in favour of such a proposition, but honorable members behind him say that it is a dividing tax. Why are honorable members anxious to divide leaseholds? When the State is getting the economic rental from lease holds, the areas are being put to use. The honorable member knows of leaseholds in his own electorate which, if divided up to-morrow, could not be put to more use than they are now put to - for grazing sheep. What are the leases on the slopes of the Blue Mountains fit for but to grow sheep?
– They will not pay a large tax.
-That is precisely where the honorable member is wrong. They will pay a good stiff tax.
– If so, they are valuable.
– These mountain sides which cannot be cultivated are valuable for one purpose, and that only; that is to run sheep. Where is the utility of breaking up such estates?
– Does the right honorable gentleman know that, since the system of smaller leases has come into existence in New South Wales, more sheep have been produced than when the land was held in larger estates?
– That may be, but I cannot for the life of me see how breaking up these leaseholds will produce more sheep. Honorable members are always preaching, in relation to other matters, that the more capital can be concentrated, the better an undertaking can be worked, and that the larger the scale on which one can operate a business, the more economically it can be worked.
– That is not the case in regard to leaseholds.
– Why should it not apply to land? Can any one tell me the reason?
– Any schoolboy could answer that.
– A pastoralist can work a large block of land more cheaply than he can work a small area. A man can work a good-sized farm more cheaply than he can work a small farm.
– Up to a certain point.
– The man possessing a single-furrow plough cannot plough his land as cheaply as the man who uses a double-furrow plough.
– The boy has more money than his father had.
– The honorable member has expressed the position rightly. _
By this taxation we are making an assault on the States. We are arraigning the whole State management of their estates. The States are supposed to be managing their estates in the best way possible. They resort to every artifice in order to do so. They employ the best men obtainable to value the Crown lands. If honorable members believe in the principle of leaseholds, as they claim to do, why do they seek to double-bank the taxation on those holdings? In this Parliament, by no agency of ours can we take account of all the circumstances that surround leases. I fancy that we shall get our money from one form of leaseholds. The States have given rewards to men in order to get them to go out and reclaim some of their lands, or in order to tempt them to occupy land, to clear it of vermin, and to keep it clear, yet now we propose, by means of our economic rental provision, to take away these rewards from these men. We have no right to do any such thing. There is a contract between the States and the individuals, stipulating that the latter shall have these rewards if they undertake the obligations and perform the duties attaching to the occupation of these leases, and what right have we to step in upon those contracts, and take from the men who are doing this work for the States the value which the States give to them for doing it? That seems to me to be one of the chief points against this proposal. It is not our land, we are not responsible for keeping it clean, but after some one else has laid the eggs in the nest, we are coming in like the cuckoo to hunt them out and occupy the nest ourselves. Tremendous confusion must arise from this dual system of managing these Crown lands, because to fix rentals practically means to take over the management of leases, so far as sovereign power is concerned. Everything is expressed in the rent. Improvements that are to be made, the work to be undertaken, the liabilities to be incurred, are all expressed in the rent supposed to be already imposed by the States; and I do not know where we are to get the economic rent, unless we propose to break in on a system already determined on by a State and a lessee as a fair one, and say that it is not fair. Indeed, we must begin by doing that. We cannot get a penny by the taxation except by impugning the management of the State lands and indicating to the world that the States are not doing their duty in ascertaining the economic rent for these lands. We are to get the tax on the difference between the actual rent paid and the economic rent. But surely the rents now paid are based on the economic value of the land. What more is needed ? Yet, without knowing all the details of the leases and all the circumstances, we are to impose another valuation on land which has just been valued for a specific purpose; we are to come in and say, “A fig for your valuations in the States ! They are not the right ones; they are not fair. We think that this is the present economic value of the land, and therefore we are going to take a slice of it, as well.” What do we know of what has gone on in the past, what work a man has had to do to bring his leasehold up to a decent value? A man may have been working without a return for four or five years. Then when a few good years are in sight the Government are about to step in and say, “ The economic value of that land is so much ; we want our slice.” That is unjust, and is going i.o lead to infinite confusion. It would be far better to leave the State Governments to control their own leaseholds, whilst we look after our own business ; and if we desire to tax, let us do it outright, and not break in on a system that is working well for the country in the various States. Let us not break in on these contractual obligations, complicate matters, and discourage men so that they will not put heart into the working of their land as they are doing at the present time. I regard this provision as ali attack on leaseholds, and it can lead to no good.
.- I was glad to at last get an admission from the Prime Minister that this tax was imposed with the definite object of breaking up leases. That is why the penal provisions of the land tax are being applied.
– The Prime Minister did not admit that.
– The right honorable gentleman admitted, in the clearest possible terms, that that was the intention of this taxation. The honorable member for Macquarie also said, by way of interjection, that the tax would earn money and divide the land at the same time.
– Did not the Prime Minister say that the subdivision of the land might be incidental ?
– If the breaking-up of estates is to be incidental to the tax, surely that is the purpose of it. Let us say that the first purpose is to get money, and the second to divide the land up ; they are both the purposes of the Bill. I have always been satisfied that that was the intention of this taxation. I have already pointed out that there is a great portion of Australia-r-of course, not the Darling Downs, or other rich portions with an assured rainfall - but large areas with a very limited rainfall, where the land-holder has to take an immense amount of risk, and our experience has shown that these areas can be worked only in large holdings by men or companies with a fair amount of capital. Why do the Government wish to bring in taxation that will put land of that character out of occupation and make it unproductive again ? It has been difficult enough in the past to get men with sufficient capital, energy and enterprise to open up this laud, but the Federal Government now propose to break up the estates and prevent the land from being profitably worked. Of course, everybody understands the formula that has been put before the House ; it is a matter of simple calculation, but the formula is based upon some arbitrarily found value. The difficulty is to understand how that arbitrarily determined value is to be arrived at. Is it to be computed as in the principal Act? Honorable members know that in arriving at the present taxation they have first to ascertain what the fee-simple of the land would sell for; but to ask people to determine the fee-simple of leasehold lands is to give them the task of finding out what is an absolutely artificial value. The leasehold provisions of the Assessment Bill show that to arrive at all valuations for land tax we must ascertain what is the fee-simple.
– Most of the rentals of the State are ascertained on that principle.
– The States ascertain what is a fair rent.
– No ; they ascertain the value, and then fix a fair rent accordingly.
– Does the honorable member then think that under these proposals the Government will get any additional revenue? Surely if the Crown has once assessed the value and fixed . what was considered a fair rent, there is no further rental value in the estate. The Attorney-General admitted a few evenings ago that any added rental value given by improvements could not be made the basis of further taxation. Although the Prime Minister stated that he thought the difference between the rent paid to-day and the economic rent should be capitalized, and made the subject of taxation, I would point out that the valuation provisions of the principal Act arrive at the valuations by an entirely different method. It will be found in operation that the valuation by this method will be very difficult to arrive at; it will be exceedingly costly, and if it is operated in a fair way I do not believe it will be productive of much revenue.
– It does the honorable member for Richmond no credit to make a statement that he cannot verify regarding my answer to his inquiry. As regards his statement that no evidence has been given by the Government or their officials as to how the tax is to be discovered and assessed, I would refer the honorable member to his colleague, the honorable member for Darling Downs.
– The honorable member admits that the Government have provided a table for working out the tax, but he desires a justification of the principles used as a basis for this formula.
– The statement of the honorable member for Richmond was that there was no basic principle by which the difference between the rent to-day and the economic value of a lease at a particular time could be arrived at. There is abundant and ample formula evidence, and, in addition, specific illustrations have been given.
– The formula is illustrated, but its basic principles are not given.
– That is so. That is my complaint.
– It would be difficult to find a basic principle that would satisfy the honorable member. There is not going to be any ‘ ‘ scene ‘ ‘ over this measure ; we are going to sit steadily on until it goes through. That is essential in the interests of the public.
. -The Prime Minister seems to be sure of his majority when he tells us that he is going to sit on until this measure is passed, because it is in the interests of the public. That, I suppose, is a matter of opinion, and I am sure that he is reasonable enough to admit that. In my opinion the Bill is not in the interests of the public, nor in the interests of the leaseholders or the pioneers. The right honorable gentleman ought to know that most of the existing leaseholds cover country which, in its natural condition, would carry no stock, or scarcely any. If the unimproved value were assessed we know very well that in most parts of the back country the unimproved land could not carry any stock, because very often there is no water,
– There would be no tax put on that country.
– The honorable member knows, or ought to know, that that is not the way in which estates are valued under the Act. The value of tlie country as it is now is the basis of valuation, and then the question is how much has its value been increased by the improvements thereon. The assessors do not take into consideration the value of the improvements which a man has placed on his leasehold. When a man has improved a piece of land, and made it wealth-producing, and there is a piece of land adjoining which has not been improved, it is a question of how much greater is the value of the improved piece than the value of the piece not improved. We know from experience that a lot of money which is spent on a property is not deducted from the value of it at the present time, and if that was done in many cases there would not be any taxable value. We all know how leaseholds are sold. The value of the country is not divided from the stock, but the whole country and the stock are sold at so much a head. The lands, the buildings, the improvements, and the stock are. included in the price. In the case of leaseholds fenced with rabbit and dog proof wire fences, and provided with artesian bores, tanks, dams, wells, home steads, and shearing sheds, you could hardly get at the unimproved value without separating the cost of those things. Of course it could be done if you deducted the whole cost to the lessee, but that is not the practice which is adopted. It is not so easy a process as honorable members opposite seem to think. This additional taxation upon property must be very exasperating and annoying, and most inconvenient, apart from every other consideration. In Western Australia all the pastoral leases will fall in, I think, in twelve or fourteen years. At the present time there are already three valuations. First, there is the shire council or municipal valuation; next there is the State land tax valuation; then there is the Federal land tax valuation, and in future there is also to be a leasehold valuation. I think that the existing valuations are made separately, and I do not wonder that persons become annoyed. I should nave liked to hear the views of honorable members opposite who have had experience of pastoral leases, and know something about the country in the backblocks. I should have liked to hear my honorable friend who has recently been appointed a Minister, but who is not present now. He represented for many years a pastoral, agricultural, and mining electorate, but I have not heard him say a single word for his late constituents. He has now got into a better constituency, where he has only one class to represent; the pastoralists are not in his electorate any longer, but I should have expected him to express some sympathy with the struggling selectors whom he represented so long. The honorable member for Maranoa has had some experience, but he is as silent as if he were wrapped in the cold embraces of the tomb. Nor have we heard anything from the honorable member for Grey. Can it be that they are not in accord with this legislation? It is a very good reason for their not saying anything if they have to vote in a way which is not in accord with their wishes. In this country the pastoral industry is an important one, perhaps the most important one. I see that in 1912 - and these are the latest figures available - the produce from the industry was valued at £52,000,000. In other words, a fourth of the total production of Australia is due to the industry. I think that the pastoralists deserve the utmost consideration. Before I say a few words on that phase of the subject, there is another point to which I wish to refer, and that is the validity of what is being done. It seems -to me very questionable whether we can tax Crown lands. Occupation leases give the occupiers no right to the soil, but merely the right to the grass for grazing purposes and security of tenure. The lands are leased to the pastoralists by the Crown in the States. My honorable friends on the other side are not satisfied with taxing all the freeholds in Australia, but are determined to tax the lands which are leased by the States to individuals. I can only express the hope that it may be found that this legislation is beyond our powers. I express that hope because I do not approve of the Commonwealth invading the rights of the States where it is unnecessary. As regards the amount of money which the tax will bring in, I am quite sure that it will produce a great deal more annoyance than revenue. I disapprove of this desire to unduly tax all the interests connected with the land. The Leader of the Opposition has referred to this measure as being an interference with the powers »>f the States in regard to the management of their own property. It is very reasonable, I think, to use the argument that the desire is to interfere with the management of lands which belong entirely to the States, and with which we have no power to interfere except under our general power of taxation which we are “running to death.” It is not creditable to the Prime Minister, notwithstanding his. heroics, that he should try to invade the arena of taxation and legislation reserved by the States for themselves, when they very generously and without any coercion gave us all the powers which, as a Federation, we possess. It is not only ungenerous, but downright ungrateful on the part of the Labour party tq propose, as they have done since Federation was accomplished, and not merely to-day, to invade the arena which the States retained for themselves, and which it was never intended should come under the control of this Federal Parliament. If there is one class of people which more than another in this country is deserving of the support and encouragement of every member of this Parliament, it is the pioneers who have reclaimed’ the wilderness and made it wealth-producing. That is what the pioneers of Australia have done. If, in some instances, they have been rewarded for their exertions by wealth, it is still true that the majority of them have lost their money. Western Queensland comprises very fine pastoral country, but more fortunes have been lost there by Victorian ‘ people than have been gained by those who have succeeded them.
– The right honorable member will recognise that I have given him a good deal of scope. I ask him now to confine himself to the clause. He is making a second-, reading speech.
– I have been pulled up before, and I am willing to be pulled up again, but I do not think that I have been wider of the mark than have others who have preceded me. I consider that I have full scope to address myself to the taxation of leaseholds. In their natural condition these leasehold lands are of no value. It is only by the application of capital and skill that they are made wealth-producing.
The TEMPORARY CHAIRMAN.The honorable member must recognise that the second reading of the Bill has been carried. We are now in Committee, and are dealing with clause 2.
– I cannot continue unless I am permitted to do so in my own way. I do not think that I am deviating from the question in speaking about leaseholds.
The TEMPORARY CHAIRMAN.The honorable member will find that they are not referred to in the clause.
– It is intended by this clause to impose a rate of taxation, and I am trying to show why leaseholds should not be taxed.
– The honorable member is making a secondreading speech, and I remind him that the second reading of the Bill has been carried.
– I remind the Prime Minister that if these leases are divided into smaller areas, the holders will not be able to pay the tax, nor will they be able to make a living on the smaller areas. As I am not permitted to deal with the question in my own way, I shall say no more. I consider that I have been pulled up unnecessarily. Other honorable members have been given free scope, whilst I seem to have been marked out for different treatment.
The TEMPORARY CHAIRMAN.The honorable member is unjust. He should remember that I pulled up the honorable member for Angas in the same way.
– I do not think the Prime Minister quite grasps the difficulty involved in the valuation of leaseholds. It is the initial step in connexion with the assessment of leaseholds that will give rise to the first difficulty. It is necessary to start in assessing these lands upon the unimproved freehold basis. The “ unimproved value “ in relation to land is defined in the principal Act to mean -
The capital sum which the fee-simple of the land 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 improvements (if any) thereon or appertaining thereto and made or acquired by the owner or his predecessor in title had not been made.
The Prime Minister is aware that throughout the whole of the western parts of Queensland the lands are held under a leasehold tenure, and no freehold alienation has taken place there. The Land Tax Commissioner will be asked to go to the western part of Queensland, extending from the southern border of the State to Cape York, and estimate what he considers is the capital sum which those western lands might be expected to realize if offered for sale on a fee -simple basis. What basis will he have to determine what that should be? Yet that is the starting point of the whole valuation. The next objection is that, in order to estimate what is called economic value, it is worked out according to a formula which might apply admirably to Collins-street property, but which is entirely inapplicable to lands in Western Queensland. It is an artificial formula, based upon a certain percentage. ‘ If we take the case to which I have previously referred, of a leasehold of the estimated unimproved value of £20,000, the leasehold value is estimated by taking an arbitrary 4£ per cent, of the unimproved value, which works out at £900. Then that is capitalized in accordance with the Act, and we get the taxable value of the leasehold at £9,308. It is estimated that a twenty years’ lease of this leasehold of land of an unimproved value of £20,000 has a capitalized unimproved value of £9,308. We are told that this is the economic value. The ordinary man, talking of the economic value of a leasehold, has immediately in mind the unimproved value which it would bring in the market. But the market value is not the basis of taxation under this Bill. There is an arbitrary assessment based upon a rule of thumb, which might apply in Collins-street, but is not applicable to the western country of Queensland. Suppose that in Western Queensland we had three or four bad seasons, such as the seasons between 1901 and 1903; what would be the economic value of leasehold land in Western Queensland ‘ in those years? What would a man pay for the unimproved value of a leasehold which, if it were a freehold estate, might be estimated to be worth £20,000?
– He would pay nothing.
– Exactly. But under this Bill Ke would be assessed upon a twenty years’ artificial basis on £9,308, and his tax would amount to £23 2s. 2d.
– The leaseholder will make his own valuation.
– Although a man may make his own valuation, he cannot make it upon principles other than those laid down in this Bill. If the conditions as to the valuation of leaseholds are laid down in this Bill, then they must be followed.
– The honorable member is aware that under the original Act some owners who based the tax upon their own valuations have been waiting three years to have an appeal heard by the Courts.
– That is another point.
– But it illustrates the point that in that case the Commissioner did not accept the valuation of the owners.
– That is so. The honorable member was referring to fee-simple cases. We are now dealing with the valuation of leaseholds in respect of which the Bill says that a certain method shall be followed. The Prime Minister tells us that this taxation is not intended for the bursting up of large estates. He is well advised in making that statement, because if the Bill were declared to be for any other purpose than that of levying taxation within the meaning of the Constitution, it would be ultra vires. The right honorable gentleman therefore says that it is for revenue purposes. In the same way, if the’ Minister of Trade and Customs introduced a Bill, the real purpose of which was, not to impose high, duties, not to raise revenue, but to establish industries, such a declaration in the Tariff itself might lead to its being questioned as being unconstitutional. Leading authorities in the United States of America hold that the incidental effect of a high Tariff may enable industries to be established; but the result, being incidental only, the taxation is valid; but it would be idle to say that the real object of .protective duties is not to bring about the establishment of industries. The same process of reasoning is in the minds of honorable members opposite in respect of this Bill. While it is true that it is desired to raise revenue, the Prime Minister will admit that the policy of his party with respect to this particular matter was framed by the Labour conference which sat in Brisbane in 1908, and laid down the general principle, which is now embodied as a plank in the platform to which they are pledged. Those who framed that policy should have a fairly clear idea of what their aims and purposes are. On referring to the official report of the Brisbane Labour Conference of 1908, I find that Mr. J. Grant stated that -
Mr. Watson had said that the progressive land tax was not for revenue, but for the bursting up of the large estates.
Mr. Watson. I said it was not primarily for revenue, but for breaking up the big estates.
Then Mr. Hutchison, who was at one time a member of this Parliament, said that he felt that -
The progressive tax had two objects - first, enabling the big estates to be cut up for closer settlement, and secondly, asking those best able to do so to bear their fair share of taxation.
Senator Findley, who is a fairly good exponent of the views of his party, also said -
Farmers were. being driven out of Victoria through not being able to obtain land, and that condition of things should be remedied by the imposition of the progressive land tax to burst up the big land monopolies. By indorsing the exemption of ?5,000, Labour could prove incontestably that they desired to help the farmers and were on the side of the poor man.
The bursting up of big estates is undoubtedly the hope and aspiration of honorable members opposite. The Prime Minister says that primarily the object of this taxation is the raising of revenue.
Mr. Fisher. I have always so.
– Quite so; but those who framed this policy for the Labour party did not hesitate to declare that the real object of it is the bursting up of big estates. The right honorable gentleman said, during this debate to-day, that, incidentally, t’.iis taxation would have that effect, and that it was, too, a very good incidental effect. That brings me to the point that this principle is being applied to the big leaseholds of Western Queensland, which under present conditions, and for many a day to come, could not be devoted to closer settlement for agriculture or dairying. I hope that with the extension of railway communication, and when the capabilities of the lands out there are better understood, a change will come over the scene. We know that in Queensland, as settlement progresses and a better know.ledge of farming is acquired, pastoral lands are more and more devoted to agriculture. But that change is a long way off, so far as the lands of the western districts are concerned. Queensland has -allowed these leasehold tenures to exist there so that, as conditions improve, the land may be devoted to closer settlement. But in applying this principle to the western lands of Queensland, the Government are trying to expedite a policy which’ is utterly impracticable there. I fear that the only result of their effort may be to make pastoral pursuits so unprofitable there that the lands will become unoccupied. That, I am sure, is not the wish of the Prime Minister. I put this consideration to him in the hope that he will give it his sympathetic attention. If he is determined to apply this taxation to leaseholds, then, at least, he should refrain from making it cumulative. In the case of absentees, the tax will run up to lOd. in the ?1, and the results must be injurious. We are not raising these objections in any partisan spirit. The desire of honorable members on both sides should be to avoid any serious injustice. We must recognise that anything which tends to throw land out of cultivation and te reduce the production of wealth in Australia, must be of serious injury to the Commonwealth. Let there be no mistake. If the rural districts are impaired in their productivity, the effect must be felt at once in all our cities. Town and country are closely related, and the high wages prevailing in our city industries are possible only because of the increased production and the high prices being secured for our primary products. Anything that interferes with those high prices, or with increased production, must have a serious effect on the cities, and must produce results which no one, I am sure, desires to bring about. I ask the Prime Minister to calmly think over this matter, and to take such action as will avoid the serious results which are likely to follow the passing of such a provision as this.
.- I understand from the Prime Minister that lessees will have the right to make their own assessments?
– I am going to cite one or two cases, and to ask the Prime Minister if lessees would be doing right if they assessed the value of the land on the basis that I intend to put before him. We have pastoral leases beginning with ten years without rent. Then commencing with a rental of 2s. 6d. per square mile per annum they go upwards. Assuming that 5 per cent, is the rental basis, what would be the capital value per acre, on which this taxation is to be based ? If it was based fairly, it would be one-six hundred and fortieth of 2s. 6d., or, if the rental was 10s. a square mile, it would be one six hundred and fortieth of 10s. per acre. If the tax is to be fixed on the basis of the sale value of the land, as I gather from some honorable members that it might be, it would be very unfair, because there is no such thing as a sale value of these lands.
– The Act lays that down.
– That is where one difficulty is going to arise. The regulations are framed for dealing with freehold, or lands which may be converted to freehold, which is a very different proposition. Surely no honorable member on either side thinks that this tax is put on for the purpose of bursting up leasehold estates, because I can instance a few hundred, and probably a few thousand, in South Australia upon which it would be absolutely criminal to put any taxation that would throw the lessees out, with the idea of putting other occupants in, as the small men could not occupy them on account of the very nature of the country. They cannot be occupied except in very large areas. The State, under its law, is now offering the first ten years without rental at all, and that fact will give honorable members an idea of some nf the country out back. An enormous amount of money has to be spent on it, because it is waterless and infested with vermin of the worst type. I understood from the Atorney-General the other day that money spent on improving such country is not to be taken into consideration. Surely it ought to be considered. Under the existing Act, account is taken of it in the adjustment of the rent or the taxation, in the case of a lease of city property carrying building conditions. A man with a twenty-eight year lease may be paying only a nominal rental for the land, but may have to leave certain buildings on it at the end of his tenancy, and under the present law the tenant is entitled to consider that the value of those buildings represents a certain portion of the rent for the period of the lease.
The TEMPORARY CHAIRMAN.Is not the honorable member delivering a second-reading speech?
– I would much sooner discuss the’ question on the other Bill.
– It would not be fair for me to allow the honorable member to discuss it on this clause, seeing that I checked the honorable member for Swan. .
– I am dealing with the basis on which the tax is to be imposed. Unless it is very carefully handled by the officials, this proposal may easily become an instrument of tyranny, and do considerably more harm than good.
– We are amending the principal Act by widening the scope of the powers of the Commissioner regarding hardships.
– I am thoroughly in accord with that proposal, but it applies only to a drought-stricken period or area. I am dealing with a very* much broader question. I would ask the Minister to get from the chief officer of the Taxation Department some further information before we are asked to deal with the Land Tax Assessment Bill. As a matter of fact, this Bill does not touch the leasehold question. Unless the other Bill is passed, there will be no additional taxation on any leasehold. The discussion, therefore, ought to take place on the other Bill. I cannot discuss that measure now, but I have seen it, and my impression is that, with regard to Crown leases or licences, it will create very serious anomalies and injustices. I want the Committee clearly to understand that the Bill now before us, although it increases the gradations of the tax on lands which were previously taxable, does not tax to the extent of one penny one additional lease.
Question - That the clause (2) stand as printed - put. The Committee divided.
Majority … … 6
Question so resolved in the affirmative.
Clause agreed to.
Clause 3 (Amendment of second schedule).
.- I do not intend to delay the Committee with the expression of my views respecting absentee taxation. I think that it would be better if we did not tax per sonswho have never been in Australia, but have sent their money here for investment. When persons who have made their money here go abroad to live, I have no objection to taxing them at a higher rate than is imposed upon residents in Australia; but when the money of persons who have never visited Australia is practically lent to us on reasonable terms, it is a short-sighted policy to tax the investors. This investment has done the country an incalculable amount of good, and I believe that millions of capital have left the country of late years because of our land taxation. The point to which I wish to draw attention affects another matter. I feel that it is useless to ask the Government to alter the proposals contained in this Bill, but I wish to suggest the insertion of a new clause which would in no way injure the Bill. There are persons living abroad who have bought land in the Commonwealth with the intention of coming to Australia to reside when they have finished their term of service in other parts of the world. Land in my constituency is held by many such persons, who have spent a good deal of money in having it cleared, orchard clearing being expensive. The Land Tax Commissioner considers that he has no power to treat these persons other than as absentees, and that an amendment of the law is needed to meet their case. I hope that the Prime Minister will see the reasonableness of exempting these persons from the operation of the Bill. The taxation which they pay is small, but they do not like being taxed in this way. and others, hearing that they are taxed, think that we are not treating intending immigrants too kindly. This, according to the agents and others has a bad effect abroad, and, to use a colloquialism, leaves a nasty taste in the mouth.
– Not so much as the way in which the agents behave has done.
– I know nothing about that. The Assistant Minister is aware of the facts to which I am drawing attention. If the persons to whom I refer were now in Australia, they would not be subject to land taxation, because their holdings are very small; but there is no exemption from taxation allowed in the case of absentees, and they have to pay on the full extent of their holdings. The definition of “absentee” contained in the principal Act declares that the term does not include a public officer of the
Commonwealth or a State’ who is’ absent in the performance of his duty, and I suggest the addition of further words .such as these- ‘ nor any person residing beyond Australia who has purchased land within Australia and can satisfy the Commissioner that he or she intends to occupy or to live upon such land.
The right honorable gentleman could fix any limit of time that he might think fit. In some cases those to whom I refer have taken advantage of a holiday to inspect their blocks, and intend to come here to live when they have finished their term of service in other parts of the Empire. They are very desirable settlers, because they will bring capital, and will throw themselves with energy into the work of improving their holdings. There are now acres and acres of orchards in my electorate where a few years ago there was nothing but bush, and some of the land costs as much as £20 an acre to prepare. If my suggestion were adopted, it would not materially affect the revenue, but it would establish a better feeling between intending immigrants and the Government.
– At what rate is this land taxed ?
– I do not know, but, though it is very small, these people are treated as absentees. I have been urged by State Labour members in Tas-, mania who know the public feeling, and particularly by the State Labour member in my electorate, to give this matter attention, because it is believed that this is a suggestion in the right direction
– The remarks of the honorable member rather impress me, though not to the extent, perhaps, that he suggests. At the same time. I do not think that his object could be attained in this particular Bill.
– I was referring to the Assessment Bill.
– It seems to me that the argument used only goes so far as to declare that an absentee purchasing land here ought not to be considered as an absentee during the first twelve months, and I think that to be a reasonable period to allow him to complete the purchase and come to the country. I have never taken any serious view of the statement that our absentee tax damages our credit, because I think the fact is the other way about. However, if a man purchases land here, with a ‘bond fide intention of living hi the country, a reasonable period ought to be allowed during which he should be exempt from the absentee tax.
.- I should like to say a word or two on the general principle of the absentee tax. I cannot help thinking that this tax operates with regard to capital, which is the seed of industry, very much as the Tariff of recent days has been found to operate in the matter of seed wheat for our country producers. For capital is absolutely essential for industry. It is not in itself a sin, but is the stored industry of mankind; and yet this particular clause is a direct hindrance to its free passage to our shores. It will be hard enough to get money in the next few years, because the capital of the world is now going in flames on the battlefields of Europe. Let me remind honorable members that “t in England people who send money abroad invest in a number of concerns which are quite ready to do business in any part of the world; and a man who so invests must necessarily be an absentee in one or other of the countries to which he sends his money. He is not -personally directing and controlling the; money he has invested, as is a man who buys a property, and he cannot possibly be regarded as an absentee landlord in the old Irish sense of the word.
-No; he invests his money in a land company, and the money comes here to pay Australian wages to Australian workmen.
– No country in the world can. succeed with absentee ownership.
– I did think that I had made my point clear. The English investor invests his money collectively, and not individually, and he does not personally control his investments in those large organizations .or aggregations of capital. His money can go to any country; and we are telling him by this Bill that if he sends it here we shall specially tax him. There is no doubt that this country needs capital. Australia is, to a certain extent like an uncleared and unfenced selection; until money is applied, the lands cannot be made truly profitable. As I have said, we shall during the next five or ten years have greater difficulty than ever before in obtaining capital; and yet we have these foolish prejudices displayed in this Bill. The Prime Minister’s own confrères in New South Wales, who a few years ago were as keen on the absentee tax as he himself is now, have seen the error of their ways.
– They have seen a great many things I cannot see.
– The Labour party see eye to eye on the same platform, and mouth to mouth when attacking us,but in New South Wales, which has had more experience than we have had in this connexion, they have realized their folly in the matter of taxing foreign capital. I am not making any plea for absentee landlords; I do not care twopence about them, but I do care about getting money to Australia. We find the New South Wales Government actually making a sort of pooling arrangement with a big contractor, so hard up are they for money; and yet the Commonwealth Government are deliberately placing a bar on the introduction of capital of a private nature that would relieve the necessites of every State in the Union. Yetthis is the Government that is trusted by the Australian people to save them from unemployment, and in. the hands of which they regard their affairs as safe! Enough has been said by the Prime Minister’s confrères in New South Wales to make it worth while his making some answer in this place; but Commonwealth Ministers, unlike the New South Wales Ministers, are apparently so bound by what they have said on the subject, thatthey cannot even open their mouths to explain this difference between them.
– Variety is thespice of life!
– Yes; I see if in the Ministry. It is about time wehad some expression of view by the Australian Labour party, through its responsible leaders, on the question of the absentee tax. Personally, I haveheld all along that we are only “ cutting off our nose to spite our face” - that we are damaging ourselves in trying to reach a few bad examples of Australians who do not think this country good enough to live in, and who spend their money elsewhere. The efforts in this direction simply mean stopping money which British people would otherwise be pre- pared to put into big concerns that pay Australian wages to Australian workmen. New South Wales has realized that to do so is valueless- that it is opposed to the interests of the State. The Labour party in thisParliament is apparently blind to the reasons- which have induced the same partyin New SouthWales to change its views. I ask my honorable friends oppositeto express, in a few words, the faith that is in them. Recently the Minister of Trade and Customs proposed to interfere with the whole principle underlying the Tariff in the interests of the importation of wheat, and at a time when wheat was scarce inAustralia.
– I donot think that these remarks are in order.
– I am citing a parallel case by way of illustration. If it be right to amend the Tariff because wheat is scarce in the Commonwealth, is it not equally right to amend this proposed legislation because money is scarce in Australia ? Owing to a number of causes, for some of which my honorable friends opposite are responsible, capital is extremely scarce, and the wide circulation of my honorable friends’ paper money will not disguise that fact to any thinking person. The very banks, which are the basis of our private credit, have had to come to theCommonwealth to obtain a certain quantity of paper to place in their vaults. The Minister has shown himself a broad-minded man in the direction of seed wheat -
– Which Minister?
– I was referring to my mediæval friend the Minister of Trade and Customs. I plead with him, either to recognise the error of his ways, or to be frankly shameless, and stand up and explain this legislation. If we impose this tax on absentees, any organization of capital which has a certain percentage of absentees’ money invested in it will become an absentee owner. That being so, it is manifest that we ought to lift the bar which the Government propose to place upon the introduction into this country of foreign capital at a time when capital is exceedingly scarce. I cannot see why my honorable friends opposite refuse to take alead from the Holman Government. There is not an honorable member in this Chamber in whose district unemployment doesnot exist. The only thing which effectively tends to raise wages is competition for the employment oflabour.
Every honorable member now has an opportunity of helping any man in his own constituency who wants a job. But if we prevent money from flowing into Australia, there will be so much less capital to compete for that man’s labour, so much less employment available, so much less development of our resources, and so much less opportunity for Australian workmen, while not a penny-piece of good will come to the Treasury. Honorable members opposite have now a chance of doing something useful to remove unemployment. They realized the necessity for action in regard to seed wheat, and took the step freely.
– Do not look at me so much; look at some one else for a while.
– Then I shall address my remarks to the Postmaster-General. How often has he gone round the western districts of New South Wales administering the solace of moral persuasion and preaching the gospel of work, and a fair amount of it, and good opportunity for it, and good wages for it? The PostmasterGeneral knows the value of having competition for men’s labour, and that it is the only real means by which men’s wages are increased. We have an opportunity of encouraging the entry of as much money into this country as we can by throwing open the doors to that seed of Australian industry-foreign capital. If Ministers will not explain why they differ from the State Labour Ministers in New South Wales, they can at least act as honestly as they did in the case of seed wheat, and remove this impost on foreign capital.
Question - That the clause (3) stand as printed - put. The Committee divided.
Majority … … 8.
Question so resolved in the affirmative.
Clause agreed to.
The amendments of the principal Act made by this Act shall apply to land tax levied in and for the financial year beginning on the first day of July, One thousand nine hundred and fourteen and all subsequent years.
.- Every attempt at getting some explanation from the Government of their intentions and of the operations of the Bill has been futile. I believe, however, that the Government have not yet grasped sufficiently the importance of this measure, and it would be in the interests of the country if a period of time were allowed to elapse before the measure came into operation so as to allow the intelligence of Ministers to ponder a little deeply on the provisions of the Bill. If the Government had an opportunity of calmly considering the effect of the Bill for the next twelve months they might be able to appreciate some of the arguments put forward from this side, the present drought might be considerably lessened, and the men against whom the Bill is aimed might be in a much better position than they are to-day to stand this impost. In the early stages of the measure it was clearly demonstrated that this is not a Bill for imposing taxation for war purposes, that the moment it became law it would remain law until it was repealed. If the operation of the Bill could be limited to the duration of the war, or if the operation of the tax could be associated with the war in any way, it might be viewed by this side from an entirely different point of view. But as the measure, is to create an additional impost of over £590,000, an increase of 36 or 37 per cent, on the taxation which land-holders are now paying, I consider that the Government ought to have a little longer time in which to consider the probable effects of the Bill. I therefore move an amendment -
That in line 5, the word “ fourteen “ he left out, with a view to insert in lieu thereof the word “ fifteen.”
– The Government cannot accept that amendment.
.- I move a further amendment -
That the words “and nil subsequent years” at the end of the clause lie left out.
The object of the amendment is to make this additional impost simply a war tax. Whilst there may be some justification for placing this enormous burden on a comparatively few taxpayers - only about 15,000 - there can be no justification for confiscatory taxation. In the higher gradations of the tax the additional impost amounts to one-fifth, an.d in some cases almost one-fourth of the taxable value of the land. That is added to the enormous taxation already levied - taxation for shire purposes, State land tax, and income tax on revenue derived from land - so that the imposts are becoming of such a nature that the whole value of land is being taxed away. That can only have -a very bad effect upon the country. Because once you take the whole value oi the land itself, you destroy one of the greatest assets in this country, for a vast amount of wealth is invested in land ;and is being constantly turned over :in production. I cannot see that taxation of this confiscatory kind can possibly be for the benefit of a country which indulges in it. In any case, I submit that the taxation should only be heavy during :the war.
– The Commonwealth will have liabilities because of the war, even after ‘it is over.
– During this year we have some justification for imposing this taxation, and if it is found necessary next year, in consequence of the war, the Government of the day can come down and impose it for another year, but I do submit that in no circumstances should it be put as a permanent impost on -the statute-book. There is nothing whatever in the suggestion of the Assistant Minister.
– When your party gets into power you can take it off.
– After you have built up an expenditure on it.
– I have not the slightest doubt, from the way in which the Labour party are transacting the business of the Commonwealth, that the Liberal Party will be in power after the next elections are held, but apart from that I say that “ sufficient unto the day is the evil thereof,” and that this taxation should not be imposed for an indefinite time. The Government have no moral right to take that course.
.- I suggest for the consideration of the Prime Minister, that he might accept the amendment. The principle is a very old established one in the home of Parliament that taxation Bills of a certain nature should be introduced from year to year. This is essentially a Bill which the public outside regard as only excusable if it is introduced to. meet a great national emergency. If it is regarded, as I understand it is regarded by a number of honorable members opposite, as a mere measure to meet an abnormal expansion of Commonwealth civil activities, they are taking a very serious and foolish step, because undoubtedly, as the Assistant Minister of Defence put it, the war expenses will not terminate with the war, but we shall have to find funds to meet the dislocation. Why should our honorable friends opposite exploit the taxable possibilities of Australia to meet things with which this war is not concerned? They would have us believe that the measure has nothing whatever to do with the war. They repudiate the idea that it is connected with the war. That matter is to be dealt with by loan. But how are my honorable friends going to liquidate the loan afterwards? How do they propose later to put things on a solid and sound financial basis? They will have to face the issue sooner or later, but now they deliberately propose to take away a large share of the taxable assets. I believe that they are going to minimize the very basis of all taxation in a community of this kind, the riches’ that come from the land, by putting on this extortionate tax. I think that the people of Australia will be ready to bear any sacrifice to shorten the trouble through which we are passing, but I hold that the best way to undermine the loyalty of the taxpayers to this or any other Government is for my honorable friends to show that they regard this as a specially fine opportunity for profusion and wastefulness in directions outside the immediate crisis in which the country is engaged.
– Hear, hear. A monument of intelligence! Nobody can understand you.
– I take the honorable member for West Sydney-
– After making all fitting apologies to the honorable member for West Sydney for confusing him with the honorable member for East Sydney, I wish to refer to an election pledge in which the latter recognised the truth of what I am saying. In 1910 he pledged himself to the people of East Sydney, that the tax which he would now see increased, and increased for all time, should not apply even at the rate of 4d. in the £1 to the constituency he was seeking to represent.
– I never said anything of the kind. That is absolutely false.
– The honorable member said that the tax should not apply to city properties.
– I did nothing of the kind. I said that under the Constitution we could not avoid it. I know more about the Constitution than to say such a thing as that.
– We know that since 1910 the honorable member has been an earnest student of the Constitution; he has at last mastered the word. But four years ago my honorable and distinguished friend told the electors whom he was asking to vote for him that they were not going to suffer from any of this taxation, and that it was only a bursting up tax to be put on country estates. Now we find that he would have the House put on the tax in an immensely enhanced form on city properties, so increasing the rents in East Sydney for all time. If it was merely a question of a few men paying the tax for a year, well and good; but it is not only a few men who paythe tax. Every man who goes into a universal provider’s establishment pays an increased cost for the goods over the counter because of the tax which the proprietor has to bear. I urge upon those honorable members who represent city constituencies that there has been enough trouble, and enough hardship in the rental question, to make the House very chary of putting this tax on city landlords to be passed on to city tenants for all time.
– There are no Crown leases in Sydney, as you know well enough.
– If my honorable friend will look carefully at this measure upside down he will have a chance of understanding that it deals with more than Crown leases. I urge upon my honorable friends opposite not to exhaust Australia’s taxable value, not now to be profligate with the opportunity of raising money, for undoubtedly if they do they will regret it later, and so will the country. We have heard much from the Prime Minister about the last man and the last shilling. This is the last shilling out of the country land-owner. It is the last shilling for other than war purposes. I ask my right honorable friend to remember that the people outside will carry long memories of these things. If our honorable friends are still collecting this tax three years hence, and other taxes heaped upon it - because under cover of war they would introduce land nationalization proposals - the day of judgment will come upon them. There is one thing which this community at the last elections with one mind undertook to do, and that was to repose confidence in, as the trustees of Australia’s interests in the time of national emergency, whatever Government was put in power. If we had been where our honorable friends opposite are, we should have been welcomed by the people with the same implicit confidence. Are the Australian people to be told, after a few months of office, by the present Government, that Australia’s last shilling is to be taken, not for the interests of Australia, but because of the “isms” of honorable gentlemen opposite ? I can find no other excuse for proposing to impose this extortionate tax for all time. Let honorable members tax, if they please, for war purposes, but for the period of the war. and not. beyond it.
Clause agreed to.
Title agreed to.
Bill reported without amendment; report adopted. i Third Reading.
Motion (by Mr. Fisher) proposed - That this Bill be now read a third time.
– I rise to a point of order. 1 submit that the Prime Minister cannot move the third reading of the Bill without first carrying a motion for the suspension of the Standing Orders.
– I think I have done so.
– I remind the honorable member for Richmond that the motion for the suspension of the Standing Orders was carried before the Bill was proceeded with.
.- I propose now to say what I was not permitted to say under the Standing Orders when the Bill was in Committee. I was pointing out that this proposal taxes the Crown lands of the States, and is another attempt to invade the arena of legislation retained by the States when they agreed to give us the powers which we have under our Constitution. I say that the action of the Government in trying to assume powers which the States never relinquished is not only ungenerous, but is positively ungrateful. Many of the leases that will be taxed under this Bill are almost worthless in their natural condition. It is only by the expenditure of capital that they can be made wealth-producing. It is impossible for these lands to be worked unless in considerable areas, because the country will not carry sufficient stock in a limited area to make its pastoral occupation profitable. What use, for instance, would 20,000 acres be in the northwestern part of Western Australia? No one could make a living on so limited an area in that part of the country under existing conditions. I am glad to see my honorable friend, the Minister of External Affairs, present, because he represented that part of the country for many years. I am rather disappointed that he has not had a word to say in favour of the lessees of that important part of Western Australia which he represented for so long.
– I think they are well able to take care of themselves.
– They want the honorable member’s help, and if he were now member for that district he would not be so quiescent as he is at the pre sent time. It is, I think, fortunate for the honorable gentleman that he is not member for that district at the present moment, or the lessees there would have something to say to him.
– I have nothing to thank them for.
– That is ail right. The honorable gentleman does not need them now, having had their support for many years.
– I hope they will realize that the honorable gentleman thinks that he has nothing to thank them for. That must be satisfactory from his point of view.
– It should be mutually satisfactory.
– The land itself in many of these districts is very good, but the rainfall being small and uncertain, the country is useless for agricultural purposes, unless by the assistance of irrigation, and, generally, water is not available for this purpose.
– There will be no tax upon it if it has no unimproved value.
– These leases are worth a good deal now, because they are improved.
– But improvements are not to be taxed.
– The right honorable gentleman must pardon me if I say that improvements are taxed under the law as it exists to-day. The land is valued as it stands with all its improvements, and then a certain amount is deducted for the improvements to estimate the unimproved value. If the full value of the improvements and the value they add to the land were deducted, there would be very little tax to be paid in many instances. But that is not done. No land-holder gets back the amount he has expended on his property. In most cases he gets back very much less than that in the value put upon his improvements. I have said that much of this country would be good country under a system of irrigation if there was a good rainfall and means available for irrigation. Bores, wells, and tanks have been sunk on these lands, fencing and roads have been constructed to make them wealth producing. I am very sorry indeed that this legislation has been introduced. It is questionable, in my opinion, whether it is within our power.
If it is within our power, that is no reason why we should propose to levy a tax upon land belonging to the State. These lands are leased for a certain number of years, and on the expiration ofthe leases they revert to the States. This legislation, as I have already said, is another clear invasion by the Federal Government of the arena of legislation reserved to the States under the Constitution. I do not know where this sort of thing is to end. I am quite sure that we cannot go on having two taxing machines imposing burdens on the same people. This can end only in one way. It must result in Unification, and that, I believe, is the desire of the Labour party, and the ultimate object of their legislation.
– Who said so?
– Does the honorable member say that it is not?
– It is not on our platform.
– Let the honorable member express his own opinion on the subject. The Labour party desire to destroy the States, not by abolishing them outright, but by reducing their powers gradually, so that they shall fall an easy prey. What are we doing in the Northern Territory? Land is being offered there for next to nothing, and yet no one will go there under the administration of the Labour party, because, while that party remains in power, people do not feel safe. This legislation means either Unification or the destruction of Federation. I should not be surprised if the States, unable to endure any longer the treatment that they have received at the hands of the Labour party since the inception of Federation, were to revolt. If they did so, no one would be surprised.
– Who are “ they “?
– I am referring to the people of the States, whom the Labour party are victimizing, and whose self-governing powers they are trying to destroy. I hope the day will come when we shall be able to sweep away all this legislation which is destructive of State powers. A class war of the most aggravated character is being waged between the Labour party and those who are opposed to it. I protest against the Bill, and believe that it will brand the Labour party with discredit in the eyes of all fair-minded people in Australia.
.- I should not have intervened in this debate but for the personal remarks of the right honorable member for Swan. Our object should be to pass legislation, not merely to air our eloquence or to pose in the limelight. I am disinclined, however, to remain silent under the right honorable member’s charge that I have no sympathy with the leaseholders of Australia.
– The honorable member said that he had nothing for which to thank them.
– The right honorable member inferred that I owed my election to the squatters in the north-west of Western Australia. The inference is wholly erroneous. I never did owe my election to them.
– I did not say that. It would not be correct to say so.
– That, at least, was the implication. The right honorable member knows that the squatters of the north-west are numerically insufficient to influence an election at any time. But even if they were, and that I was still their representative, I should support the principle of this measure.
– Why has the honorable member said nothing before?
– Because I do not wish to encourage the obstructive tactics in which the right honorable member and his friends opposite have been indulging ever since the Bill was introduced. I have heard him and the honorable member for Darling Downs repeat over and over again ad nauseam to-night the same arguments in virtually the. same words. It is not my purpose to assist them to delay business, since I desire to expedite the passing of this measure. The right honorable member for Swan, in referring to what he described as the loss of power to the States, spoke as if the State Governments had given the Commonwealth its Constitution.
– The people of the States did.
– Who are they but the people of the Commonwealth ?
– The honorable member’s party is in a minority in this House, so far as the representationof Western Australia is concerned.
– The right honorable member has always been in a minority.
– There are three of our party from Western Australia in this House as against two members of the Labour party.
– That is due to an electoral accident. If the boundaries had been equitably re-adjusted, the right honorable member and his party would be in the same position in this House as they are in the Senate. At this late hour, I desire to curtail my remarks as much as possible; but I wish the right honorable member for Swan to understand that the people who elect this House are those who create the State Parliaments, and that if the people choose to give us a mandate to carry out this legislation, as they have done, we intend to give effect to it.
– When was such a mandate given?
– At the last election, as well as at previous elections.
– The honorable member never mentioned the matter at the last election.
– Does the right honorable member mean to suggest that when he and his party took office with a microscopic majority of one in this House they received any mandate from the people?
– Order! I ask the right honorable member to keep to the question before the Chair.
– I desire to do so, but have been drawn aside by irrelevant interjections. I shall not discuss at this hour the many questions raised during this debate. It is sufficient to say that the appropriation to public use of the unearned increment in land -by which I mean the value created by public expenditure or by the growth of population - is a principle to which I have adhered, for many years. Its abstract justice is outside the range of controversy. The nature of the tenure under which that increment accrues does not vitiate the principle that the values which the holder of land does not himselfcreate belong to the community, and should be applied to commercial ends. However, I rose merely to remove the impression which the right honorable member for Swan sought to convey that I was wanting in sympathy for the men who are pioneering in the wilderness in Australia.
I have done as much for them in my limited sphere ashe has done. I do not say that I have had the opportunities that have presented themselves to him; but such opportunities as have offered have been availed of by me to assist those who are doing the pioneering work of this country. I have always given credit to the right honorable gentleman for what he has done in this respect, and it is most ungenerous for him to charge the Labour party or the Labour Administration with having any desire to place undue burdens on the pioneers of Australia.
Question - That the Bill be now read a third time - put. The House divided.
Majority … … 14
Question so resolved in the affirmative.
Bill read a third time.
Motion (by Mr. Fisher) agreed to -
That the House, at its rising, adjourn until to-morrow, at 11 o’clock a.m., and that Government business have precedence on that day.
– In moving -
That the House do now adjourn,
I would ask the Leader of the Opposition to assist, if possible in facilitating the business, otherwise we shall be here for a considerable time longer. To-morrow we shall take the War Pensions Bill first, then the Land Tax Assessment Bill, the Probate and Succession Duties Bill, and the necessary machinery Bill connected with it.
– What are you going to do about the Loan Bill ? You are spending money which you have no authority to spend.
– I am sorry ; but, in the circumstances, we shall spend the money to keep the machinery going. I do not think it is illegal.
– I shall be glad to help the honorable member to get through the business; but the trouble lies athis door. He keeps putting the most controversial propositions before the House, and we cannot wipe them off with a sweep of the hand. If we put all controversial matters out of the programme, we could get through very quickly.
– The Leader of the Opposition knows exactly the business we have to complete. It is essential that that programme should go through.
Question resolved in the affirmative.
House adjourned at 11.30 p.m.
Cite as: Australia, House of Representatives, Debates, 14 December 1914, viewed 22 October 2017, <http://historichansard.net/hofreps/1914/19141214_reps_6_76/>.