4th Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
– I wish to ask the Vice-President of the Executive Council, without notice, a question having reference to a matter which formed the subject of a question I asked in 1907. The same trouble appears to’ have cropped up again. Are the Government aware that cheques for the payment of bounty to growers of sugar cane with white labour have been recently dishonoured? If so. will the Government take steps to so arrange their banking business as to prevent this recurring, and thus giving farmers the trouble of presenting cheques more than once before they receive payment?
-I ask the honorable senator to give notice of the question.
– With respect to the statements made by the Minister representing the Postmaster-General yesterday in answer to questions concerning the adoption of uniform postage, I should like to know whether instructions have been received by the Post Office authorities in the different States to give effect to the practice which the Government have decided to adopt ?
– I can only say that such instructions were issued to the Post Office officials’ throughout the Commonwealth, and they should have been received long ere this.
asked the Minister representing the Postmaster-General, upon notice -
Can stamps of one State be used in another State for the purpose of sending telegrams in that or to any other State?
Debate resumed from 19th October (vide page 4799), on motion by Senator McGregor -
That this Bill be now read a second time.
– I can quite understand and sympathise with the remarks with which Senator Millen yesterday opened a speech which was quite up to his usual high standard of effectiveness. The honorable senator referred to the hopelessness which oppressed him when called upon to discuss this measure in the Senate. Every member of the Senate must admit that for all practical purposes the position is hopeless. No one here believes for a moment that any suggestion by way of amendment will be accepted by the Government. We have had a clear indication of that, and if we did not know it we might be assured from the evidence we have of the feeling of the party whom the Government are leading in this legislation, and of what happened in another place, that it would be but idle folly to expect that any amendment of this Bill - at any rate, if moved from this side - would be accepted by the Government. Whilst I agree with Senator Millen in that statement of practical politics as regards the position in the Senate, I am inclined to think that outside it is not entirely hopeless. I admit that it may be regarded as hopeless if we consider but one section of the community which is drawn, I venture to say, from all sorts and conditions of men, who, through some pressure in life’ s circumstances connected with their environment, have gradually become discouraged,. have gone from that condition to discontent, from discontent to envy, and then from envy to the final stage in their feelings represented by something like vindictiveness and a desire for revenge.
– The position is very hopeful from their point of view.
– I am speaking from our point of view. It may be hopeful from the point of view of men who derive a base gratification from any opportunities afforded them to indulge a feelingof revenge.
– I think the honorable senator is ascribing very base motives to a large section of the community.
– I did’ not say that the section to which I refer is a large section of the community ; but I did say that it is composed of all sorts and conditions of men. I have not said that it is composed only of men whom Senator Givens might specially describe as supporters of the Labour party. From the little experience I have had outside the Senate chamber, I am induced to believe that there is a thinking section of the community, including some who supported the Labour party at the last election, knowing that it was their intention to introduce ;i Land Tax Bill, and even because they intended to introduce such a measure, who view with disapproval, and, in some cases, almost with dismay, the particular form which this Bill has taken. I think I shall be able to prove that.
– Do they think that it is not drastic enough?
– If Senator McGregor will allow me, I shall give reasons which seem to me to be sufficient for the expression of that opinion. Let me consider the genesis of this Bill. It has arisen from a demand, adopted and approved, I venture to say, by every thinking man in the community, of whatever shade of politics, that it is desirable that land should be put to its best use in the interests of the community. That was a sound and proper beginning for this class of legislation. The next stage was that men asked themselves how they might bring about the putting of land to its best use. The answer promptly supplied by the majority of people was - by prompting closer settlement. The next stage in connexion with which some doubts arose was reached when it was stated that, in order to promote closer settlement we must burst up large estates. The final stage was arrived at when it was decided by the Labour party that, in order to burst up large estates they would introduce a Federal land tax. That, I think, is a fair statement of the case outside Parliament prior to this session.
– A very long time prior to this session.
– I admit that; but that does not make the case any worse. I agreed with the first two stages to which I have referred many years ago.
– The honorable senator has omitted one stage - the purchase of big estates.
– I remind honorable senators that the original demand was that land should be put to its best use. In the first instance no one bothered himself very much wilh the question whether land was held in large or small areas. The basis of the principle was that land, however held, should be put to its best use. I say at once, as a criticism of this Bill, that it ignores that principle altogether. It aims equally at all land throughout the Commonwealth, in whatever areas it may be held, and irrespective of the fact that it may be at present used in the most productive way possible. I do not think that any one can deny that, and, to that extent, the Bill fails. When we come to the bursting up of large estates by means of a Federal land tax, we are confronted with the fact that the- Labour party, in common with every other party that have had power, have, in the present instance, attempted to meet what they consider to be the wishes of, at any rate, a section of their supporters, and have brought in measures which meet with their approval, even if they do not meet with the approval of the general community. Honorable senators opposite have decided to attempt, under cover of our Federal powers, to burst up large estates by means of a land tax. Every member of the party knew that immediately that attempt was made, partial failure, at any rate, was absolutely certain. By partial failure, I mean to say that it was abundantly certain to’ any man who knew the Constitution and our powers, that by imposing a Federal land tax grave and grossinjustice must necessarily be done in individual cases. To-day no one can deny that statement. I do not wish to cite personal instances, because I abhor the introduction of the personal equation into the Senate, and if, presently, I cite cases, they will at once be recognised as types to which hundreds of instances are known to conform. This is the position in which the Labour party found themselves when they sought to impose a Federal land tax. The main object is to burst up large estates. There was no question of the necessity of deriving revenue from this source raised at first. But to-day we are told that, although through the limitations of the Constitution, it is impossible to treat city and country lands differently, that the result will still be good, because we shall get revenue; and, further, we are told, and I regretted to hear it, that it is desirable that this revenue should be specially appropriated and positively earmarked for the purpose of defence. Diverging for a moment, I can remember an occasion in the Senate which, at the time, seemed to rae of considerable importance, when a proposition was introduced, not by a Labour Government, but by a Government to which I was opposed, which had for its object the ear -marking of certain specific duties of Customs to provide for old-age pensions. I remember with pleasure that, owing largely to the co-operation of Senator Turley and some other Queensland representatives of Labour, that proposition was defeated, although a majority of the representatives of Labour in the Senate supported it. I dare say that now every member of the Labour party agrees that it was very fortunate that it was defeated. Some members of the party, combining with honorable senators then in opposition to the Government, refused to allow old-age pensions to be paid for except from the general funds. I shall be extremely disappointed if I find to-day that any of those who rightly felt they were justified in objecting to the ear-marking of specific Customs duties for the payment of old-age pensions are prepared now to advocate that the enormous revenue which the Government will derive from this land tax shall be specially appropriated for purposes of defence.
– There is no such suggestion.
– Nor was any such proposition embodied in the constitutional amendment to which Senator Clemons has referred.
– I am perfectly willing to allow honorable senators who were here at the time to judge of the accuracy of my statement.
– The proof of its accuracy is that those who opposed that Bill were accused of opposing a Federal scheme of old-age pensions.
– But there was no proposition to ear-mark the funds to be derived from those special duties.
– The proposal emanated from a Government of which Senator McGregor was a supporter. I have not heard it stated specifically that the revenue which is derived from the proposed land tax will be devoted to defence purposes. But on more than one occasion I have heard it said, “ What if we do get a revenue from the tax? We want it for defence purposes.”
– Further, those who have property should pay for its protection.
– That statement has been made, and it discloses a reason foi allocating in that way the money which will be collected under this Bill.
– It is a very sound view, too.
– Personally, I think it is an utterly wrong view. But let me come back to the question of the revenue which will be derived from the tax. Seeing that under it a large revenue must be collected, the members of the Labour party have to defend that position. And, in defending it, to what are they committing themselves? To the proposition that in imposing taxation for revenue purposes we are justified in levying a tax which is equivalent to [OS. 1 in the £1 upon the income of a man who possesses a sufficiently large estate.
– The honorable senator is assuming that he has a very large estate.
– I am assuming that he is possessed of land the unimproved value of which is .£75,000 or upwards. In such circumstances, the tax would be 6d. in the £1 upon its capital value.
– But the honorable senator spoke of “ income.”
– It is a fair thing to assume that 5 per cent, net represents the return which the holders of large areas throughout the Commonwealth receive annually. Now 5 per cent, capitalized means jos. in the £1 on the income of these individuals. If a man is taxed at 6d. in the £1 upon the capital value of his property, it is equivalent to OS. 11 in the £1 on his income, assuming that his capital earns him 5 per cent. Under the Bill, landowners will be taxed in respect of the unimproved values of their land. It is clear, therefore, that upon estates valued at more than ,£75,000 the tax will be equivalent to 10s. in the £1 upon the income derived therefrom.
– Only on unimproved values in excess of £75,000.
– I have already stated that. I was careful to say that I was referring to large estates the unimproved value of which was £75,000 and upwards.
– But persons reading the report of the honorable senator’s speech in Hansard will be likely to misunderstand the position.
– I cannot help that.
– The honorable senator’s intention may be to put the case clearly, but his .language does not give effect to his intention. It is a misrepresentation.
– I am sorry if Senator E. J. Russell does not understand the position. I am endeavouring to make it quite clear.
– There will be very few tears shed over the man who is taxed on more than £75,000 worth of unimproved values.
– It is that sort of expression which sometimes makes me despair of the future of Australia. Because a man is possessed of land the unimproved value of which exceeds £75,000, why should he be denied justice by being taxed at the rate of 10s. in the £1 upon his income?
– And taxed only because he has £75,000 worth of land.
– Although there may be a mortgage of .£65,000 upon it.
– I intend to deal with this question exhaustively if I am permitted to do so. I do not suppose that any member of the Labour party will urge that this Bill, if it produces an enormous revenue, but fails to burst up large estates, can be a satisfactory one. I cannot believe that any member of the party can descend to such a. depth of vindictiveness. I credit its members with a desire to promote closer settlement. Consequently, I say that if an enormous revenue be raised under the Bill, and it does not succeed in bringing about closer settlement, they will have nothing upon which to congratulate themselves. It would be a poor thing to pour millions of pounds into the Treasury while leaving undone those things which honorable senators opposite wish to do. Under this Bill, what will happen? An enormous revenue will undoubtedly be raised from properties which cannot possibly be subdivided. In many instances pastoral properties are not susceptible of subdivision, whilst city properties cannot be thought of in that connexion. An attempt has been made to justify the introduction of the measure on the ground that it will produce revenue. But what honorable senator can justify imposing an income tax of 10s. in the £1, so far as the product of land is concerned? And, if he can justify it, how can he stop there? With what sense of propriety can anybody justify a tax of 10s. in the £1 upon income derived from land, - whilst leaving untouched the individual who possesses a large amount of personal property ?
– The land-owner can avoid paying the tax by subdividing his holding.
– Senator Givens knows perfectly well that the persons who will evade this tax are those who it is not desirable should escape it. In Victoria frequent demands have been made for the imposition of the tax, because in the Western District of this State large areas are held by a few individuals. But what will happen in regard to those areas? Their owners can sell them.
– Most of them have been sold already.
– The men who own those areas will be able to sell in a ready and abundant market at prices which will amply satisfy them. But what will happen in the case of the poorer landowners who are engaged in pastoral pursuits and who cannot dispose of their holdings so readily? In many instances largo areas are held by individuals in places remote from railway communication and from other advantages which tend to make land saleable.
– In western Queensland there have been as many as 120 applications for a single grazing farm.
– I dare say that many exceptions can be cited. But everybody knows that there are enormous tracts of country which are not saleable because of their distance from market, and because they are unlit to put to any purpose other than that to which they are being devoted.
– If they have no saleable value they will have no taxable value.
– In many instances the taxable value will be about the price which the owners gave for them when they purchased from the Crown. I am speaking of land which was sold by the Government probably at £i per acre. These large areas will always remain unproductive unless they continue to be worked as they are being worked at the present time. If they are cut up their value will diminish. There are many properties ranging from 40,000 to 80,000 acres in area, which, if cut up to-day, would not realize per acre what they are worth in the block. Yet under the proposed tax the holders of such properties, who are usually men who deserve well of the community because of their enterprise and pluck, and who have certainly never made much money out of their ventures, will, if their lands be mortgaged to any considerable extent, be absolutely ruined. On the other hand, the holders of free property will have their incomes considerably reduced - reduced to the extent of from 4s. to 10s. in the £1. In their frantic endeavours to promote closer settlement and to smash up large estates, the Government and the Labour party do not hesitate to overwhelm with ruin hundreds - perhaps thousands - of absolutely innocent men - men who have committed no offence against the community and who are employing as much labour as their’ land can employ. These men have evidenced a measure of enterprise and pluck which, I venture to say, is not possessed by many of us. I come now to the case of city lands. No member of the Labour party can justify this tax in regard to city properties.
– Why not?
– Because, in the first place, those properties have nothing whatever to do with closer settlement.
– But why should they not be taxed from a revenue point of view ?
– I hope that no honorable senator will attempt to justify from a revenue point of view a tax which runs up to 10s. in the £1 upon a man’s income.
– Upon values that the public themselves have created.
– Large sums of money are invested in city properties in Sydney and Melbourne which produce a return of only 5 per cent. Any man of business will admit that. Huge sums have been invested in city properties with the full knowledge that the investor would not get more than 5 per cent, on his money.
– And they are very glad to get it.
– Exactly. That being so, I repeat that when the unimproved value of a man’s property reaches £75,000 or more, this tax will be equivalent to 10s. in the £1 upon his income.
– Not upon his income, but upon his income from property the unimproved value of which exceeds £75,000.
– Senator Givens may quibble, but I am quite satisfied with the accuracy of my statement. But I do not want to limit myself to 10s. I will come down to one-half that amount. Is there any member of the Labour party who would advocate an income tax - except where the income is derived from land - of 5s. in the £1 ?
– Yes ; if the value had been created by the public, and not by the exertion of the person enjoying the income.
– I was prepared to hear the cry about the unearned increment. But does Senator Givens imagine that by the imposition of this tax he can recover the unearned increment from the man who got it ? The man who had the unearned increment yesterday has put it in his pocket, and gone. What unearned increment has the man who has recently purchased ?
– We must start some time.
– The honorable senator must not forget municipal taxation also.
– I do not. Many of us can sympathize with the desire to get the unearned increment for the community. But will this Bill do that?
– The Bill gets it from the wrong man.
– The Bill does not get it at all. I cannot suppose that any man in the Labour party wants to get the unearned increment from the man who has not got it, and never had a penny of it. If they were to say, “ We are going to tax certain properties in such a way as will secure the unearned increment for the community,” many persons would have sympathy with them. But every one knows that they are not going to get the unearned increment from the man who has really enjoyed it, but that, on the contrary, in order to get it from a very few, they are going to do a gross injustice to very many sections of the community.
– We are going to get it from all future land-holders.
– Mr. Lloyd-George, in England, has shown the way to get at the unearned increment. German legislation has also shown how to get at it. But this Bill does not attempt to get at the unearned increment in the manner indicated in Great Britain to-day, or in the manner that has been pursued in Germany for many years. There is no man in the Labour party who can point to any part of this Bill, and say that it affords a means of getting at the unearned increment. Suppose that any member of the Labour party were sole dictator in the State from which he comes. Is this the kind of Bill he would introduce for the purpose of getting at the unearned increment?
– We must be governed by circumstances.
– Yes; and I wish to be governed by circumstances; and the circumstances with which we are faced now are that if you impose this land tax while to a certain extent you may say you are promoting closer settlement, yet at the same time you are inevitably committing flagrant injustice against individuals. How far are we to go in sacrificing the individual for the sake of the community? I have heard of persons who have said of a certain course of conduct, “ This is my own risk ; it is the right thing to do, and I am determined to do it regardless of consequences.” But when a man said that, it was his own risk. To-day, however, the Labour party are saying, “ We will impose this tax at all risks,” whilst the risk is borne by the man who, under the sanction of the law, has invested his own money in land.
– The man who has hitherto made the profits.
– I am not now dealing with those cases to which this Bill may particularly apply - and to which, perhaps, under certain conditions, it will rightly apply; I am not now dealing with men in the Western District of Victoria. But I say that you are going to inflict the grossest injustice upon a large section of the community who have, done no wrong, and the injury to whom will in no way contribute towards the promotion of the policy which the Labour party have in view. I say unhesitatingly that if we were to have a land tax in Australia, it would have been infinitely better for the Labour party to propose a referendum to the people, having for its object to secure freedom for the Federal authority to impose taxation on land in the manner it thought best. Every one knows that we are cramped and hampered at present. It is because we are cramped and hampered that these injustices are going to follow. Infinitely better would it have been for the Labour party to have faced this problem fairly and squarely, having regard to those elementary principles of justice of which we must always be regardful. It would have been better had they said, “ We want to impose a land tax in this community on lines that every one of us thinks fair “ ; and there is no one man in the Labour party to-day who, if he had the latitude, would have dreamed of framing a Bill at all comparable with this one. I venture to say that if the Government were perfectly free the provisions of this measure would be divergent in many directions.
– Is there a member of the honorable senator’s party who would have helped us to get through a Bill to provide for such a referendum?
– Does Senator Rae think that his party want any help from us? They are at the present time passing through Parliament Referendum Bills dealing with vital and serious questions - questions quite as large and important as the imposition of a land tax, and with which they desire to deal untrammeled by any hampering sections pf the Constitution. If they are not afraid to submit proposals for referenda on such subjects, they are not at all in need of our assistance in submitting a proposal for a referendum for the purpose of imposing a land tax. I want now, since I am dealing with cases of hardship, to point to one or two more, such as I suppose every member of the Labour party knows about, though I do not think that the general public know about them at present. The question, as it affects the mortgagor, is notorious. I do not want to give an individual case, but I shall give a type. Take this one. I admit that it concerns a man holding a large area of land, but the large land-holder is just as much entitled to justice as the man who owns a cottage. If that principle were not generally recognised we might despair for this Commonwealth. Take the case of a man who has ,£40,000 of his own money, and who thinks that he is better equipped for carrying on pastoral pursuits than for any other occupation in lite. Suppose that he has bought a property worth £120,000, a case quite common in business transactions to-day. Any such man, if he is any sort of a man at all, in respect of his personal character, with a properly fairly worth £120,000 to the satisfaction of an intending lender, could readily raise a loan of , £80,000 at a reasonable rate of interest - say, at from 4½ to 5 per cent.
– 4 per cent., sometimes.
– At any rate, such a case is typical. There are many such in Australia. Under this proposed land tax, that man would practically be ruined, and of his £40,000 hardly anything would be left. Let me give the details. Assuming that he makes on an average 5 per cent. on his £40,000, his income from that source would be £2,000 a year. Of this total income, after he had paid his land tax, there would be left to him only a few hundred pounds.
– What tax would he pay ?
– He would pay £1,593on £100,000, and 20,000 sixpences in addition - that is, £500 - making the total payment £2,093.
– Can the honorable senator give the average rate of taxation ?
– I am not dealing with the average rate. I admit at once that with regard to the lower values - up to £40,000 - this tax, though it is a very stiff revenue tax, is not confiscatory. Though it is extremely hard, and, from my point of view, unfair, it is not confiscatory. Let me show how the matter works out, however, in the typical case I have taken. I haveassumed that the man has put £40,000 into an estate worth £120,000, and that he has borrowed £80,000 at 5 per cent. I have to assume that he makes something for himself on that £80,000. Otherwise he would not borrow it.I assume that he makes 1 per cent. on the £80,000. In other words, I credit the man with making 5 per cent. on his own £40,000 - £2,000 a year - and 1 per cent. for himself onthe £80,000 - £800 a year. That is to say, he makes a total income of £2,800 a year. If I have not put the case fairly let any honorable senator opposite use his own judgment, and show how I have overstated it. I have made my own investigations, and believe that I have put a typical case with approximate accuracy.
– Does the honorable senator say that 1 per cent. is a fair rate of interest for the borrower to make for himself on the £80,000?
– Sometimes he would not make as much.
– Sometimes much more.
– But we must deal with these matters by taking a long term: of years, making due allowance for bad seasons and bad prices, as well as for good times.
– It would not do to generalize from one year’s experience.
– I am not so generalizing. As far as I can ascertain the facts what 1 have given is an accurate statement of a typical case. I assume, therefore, that the man has been making a revenue of , £2,800. Now, this land tax comes along and takes from him £2,093. Therefore, his position is that, instead of getting an income of £2,800 he is left with rather less than £800 per annum ; and that is going to represent to him his interest on the £40,000 which he has invested, as well as the risk he has taken in borrowing the £80,000. As far as his capital is concerned what happens? Capitalize his income, as any fair accountant would do, at 5 per cent., and it will be seen that the value remaining to him is twenty times , £800, or , £16,000. He has put into the estate £40,000 under the sanction of the law. No one could say that he did anything wrong. Yet by the operation of this tax his capital is at once reduced to £16,000, and his income to less than , £800 a year.
– The honorable senator will admit that the Bill will serve one purpose. It will serve the intended purpose of preventing large aggregations of land, because, in such a case, a man would think it better to be satisfied with an estate worth £40,000 rather than take on the responsibility for one worth £120,000.
– I do not indorse the honorable senator’s statement with regard to aggregation. I say that it is a fair and right thing that land should be put to its best use. But I also say that a man with 100,000 acres can, in some instances, put his land to just as good use as in other instances can a man with 1,000 acres.
– Very seldom.
– I admit that there are instances where land-owners have not put their land to good use. I could cite many instances myself. But I also know of large areas which have been put to the best use.
– There are many instances where land-owners are putting their land to hardly any use at all.
– I have already admitted that half-a-dozen times over, and will admit again, for Senator O’Keefe’s special benefit, that there are notoriously bad cases in Australia. If it had not been so we should not have had the agitation as the result of which this Bill has been introduced. But, at the same time, I say that by means of this Bill the Government are doing flagrant injustice to many men who have behaved admirably as citizens, and against whom you cannot say a word.
– That is purely a matter of opinion.
– No; it is just as much a matter of fact as that under this Bill you will get at some men who have been keeping land out of its best use.
– City lands.
– How can any honorable senator defend the taxation of city lands? Take a block in Collins-street which is worth ,£20,000 or £[40,000, and on which there is a building that cost £300,000. Typical instances of that sort can be found anywhere. This idea of putting land to its best use must go by the board at once when you come to deal with city lands ; and you fall back on one thing, and that is revenue.
– Could we exempt such areas?
– No; but are you justified in using such a wholly inefficient measure as this, in using the limited opportunities conferred upon you by the Constitution ?
– Will the honorable senator help us to alter the Constitution?
– I have already said that infinitely sooner would I prefer to see the Labour party go to the people and say, “ We want to impose a land tax which will do all that we told you we desire to do - that is, promote closer settlement, and at the same time enable us to carry out that policy without committing flagrant acts of injustice.”
– Will the honorable senator help us?
– The honorable senator can get his help. from whatever source he likes. Whether I help in that direction or not has nothing to do with my statement.
– We do not admit that this measure will do any injustice.
– No ; I do not suppose that you do.
– Take, as a typical Collins-street block, a piece of land which is let by the owner on a building lease at an annual rental of ,£40 per foot. Is that the man whom the honorable senator is begging for? Surely not.
– What concern have I with that? I think that the effect of this land tax on city properties will be to make rents dearer. What owner of city property, as soon as an opportunity occurs, will fail to put up his rent?
– lt is being done in Sydney now.
– Every time a lease falls in, it will be done at once.
– Doe”! the honorable senator mean to tell me that land-owners have been philanthropists in the past, and have not exacted the last farthing which they could get?
– The interjection is, I think, irrelevant. With regard to city properties, that result is absolutely inevitable. What man with the slightest idea of business fails to recognise that, as soon as the owner of a property finds that a large amount is taken from the interest on his investment, he will say to his tenant, ““You must pay more rent.”
– How will you, at the same time, ruin the man ?
– I have never said that, under this Bill, you will ruin any owner of city property; but I have said that it will impose a heavier burden in the way of rent on all occupiers of city properties. The man whom my honorable friends are going to ruin by this legislation is the pioneer - the man who is far distant from any settlement, and is operating poor land. The worst feature of this measure is that the man who has rich land has that avenue of escape which my honorable friends have always said that he has ; he can sell out. But the man who is working poor land has no such opportunity.
– He has an exemption of £[5,000.
– I am not dealing with that question, nor do I wish to deal with an irrelevant interjection. Every one knows the conditions of the mortgagor. Let me now take another case of hardship, of which possibly people do not know, and! that is the case of a lessor. I know that the Bill contains a strange provision that, in imposing the tax, some method of apportionment as to the estates of the lessee and the lessor shall be prescribed by regulation. That means that a certain proportion of the tax will be paid by the lessee; and I feel perfectly certain that it will be a very small amount. Take the condition of a lessor. I know of many a man who has invested his money in land, either agricultural, or pastoral, or city. Such a man may have granted a lease to a lessee for a long term of years. In many cases, leases for ten or twenty-one years have been granted. Remembering their original demand, the Labour party say, “ We must promote closer settlement by splitting up the property.” That cannot be done in such a case, because the lessee has his rights for a term, and the owner has no legal possibility of splitting up the estate. So long as the lease continues he has to pay the tax. That is’ a case of Hardship which the Bill does not contemplate. It actually ignores the fact that none of the things which you desire to accomplish under this legislation can be brought about in that case, except the one - the raising of revenue. And if the estate is large, you will be raising revenue at a rate which is abhorrent to every civilized community, except in the time of war. and which I am sorry to say is in many cases vindictive. There is no escape for the lessor, and there is no possibility of the Bill bringing about what you say is desirable, and that is the splitting up of his estate.
– It may be that the lease will expire when this Bill is passed.
– We have no power to determine a lease, or to interfere with a legal contract. So far as I know the history of land taxation in the world, and the procedure of civilized Parliaments, this is the one and only case where a Parliament has been asked to impose a tax without having the power to legislate with regard to the tenure of land. That is the extraordinary position in which we are. We have deliberately taken upon ourselves to deal in a most drastic fashion with land, though we know that we have no power to do anything with regard to its tenure.
– A few ears ago Mr. Deakin said that we had the power.
– I can hardly believe that Mr. Deakin would make that statement. Surely the honorable senator knows that in the Constitution we have no power to deal with the question of land legislation or tenure.
– Except through our power of taxation.
– Does the power of taxation touch the question^ of land tenure or land legislation?
– Yes. It gives a great deal of power.
– If it does, it touches those questions in the most reprehensible way that we can touch anything.
– That is a matter of opinion, but it does give us power.
– There is one other point which I wish to bring under the notice of those who are supporting this land tax so whole-heartedly, and that is clause 10, or what is known as the aggregation clause. I wonder if any man can justify it. Take the case of a professional man living in a city, who chooses to own the office in which he carries on his profession, and the house in which he lives, and who has thought fit to invest the money he has made in agricultural land or in pastoral land, or, as in a certain case which I know of, in potato land. I have in my mind a case where a certain amount was invested by a man who professionally had made a great deal in land which was being put to the best possible purpose. It was cultivated most highly, and I can assure the Senate that it was employing every man it possibly could employ profitably.
– Was he cultivating the land and producing the potatoes himself?
– No, but his money was employed in that work”. Why does the honorable senator ask me that question ?
– Because it discloses a system of landlordism which this Parliament must put down.
– If the honorable senator is going that far, I cannot follow him.
– This Parliament can only stop that system by confiscating the land.
– We were driven out of the Old World by the landlords.
– These interjections may be «very illuminative, but I am now dealing with the case of a man who has carried on a business under the full sanction of the law, and who has done nothing for which, from my point of view, he need be ashamed. Surely such a man has committed no offence against the community, and yet he, under the operation of the aggregation clause, may easily be taxed up to 6d. in the if the aggregation of his properties represent that amount. In what sense has he’ offended, and why should he be penalized? I ask any honorable senator whether, if he were a dictator in his own State, he would for a moment think of imposing such taxation?
– If dictator, I should certainly put in that clause.
– I cannot understand why. I can only say that the honorable senator would enact such a clause in order to tax a man with tremendous weight on his income from land. If a tax of 10s. in the £1 can be justified I have no more to say, but when you get in times of peace to that point you get very near confiscation of land. I wonder what they would say if 10d. in the £1 was taken off a working man’s wages.
– He is taxed. I am taxed on the bit of tobacco I smoke.
– I do not call the honorable senator a working man. I am dealing with a person who has not his present good income.
– Take a man who is earning £2 a week, and smokes. From him a great deal more than 10d. in the £1 is taken.
– He is not obliged to smoke, nor am I, or the honorable senator.
– Nor are the big landlords obliged to hold land.
– I do not want to be diverged into the question of the taxation of tobacco. The honorable senator knows that I have always held that narcotics and stimulants ought to be taxed, because they are luxuries which approach a vice. I do not wish to go into the details of the Bill now, as there will be ample opportunity in Committee. I desire to refer to a matter about which I think there is a good deal of unnecessary class feeling, and that is the question of the absentee. He is defined as a man who is not in Australia. What is the origin of this desire to tax absentees? Was it not that some of us thought that a man who had made a lot of money in Australia and was spending it elsewhere ought to pay ?
– Hear, hear. We are the great party to encourage immigration. We want to bring him back.
– I do not desire any irrelevant interjections. When the various States decided to tax absentees they had in their minds the case of a man who had made a lot of money here and was spending it elsewhere. But what does this Bill propose to do? It taxes with extreme violence the man who has never been here, but who has had the presumption to invest money here.
– He is a worse instance.
– One does get very strange interjections. I suppose that the honorable senator will be prepared to follow up that remark and say that all capital should be shut out of .Australia; that it is a bad thing for Australia that capital ever came here, and that it will be a good thing if capital never comes to this country to be invested in enterprise whether on land or otherwise.
– These people take capital out of Australia.
– I present Senator Rae with those views, and I should be very sorry indeed to believe that they are shared by many members of his party.
– The honorable senator has no right to say that they are my views.
– The honorable senator has already said that he does not want the capitalist here, nor do the framers of the Bill, because it practically says to every man in the United Kingdom, “ If you venture to invest money in land in Australia you will be penalized id. in the £1 more than any one else, and, of course, if it exceeds £75,000 you will pay ;d. in the £1”
– When this Bill goes through, people in Australia will put their industry into the land, and we shall not need foreign capital.
– Australia would be in a very bad way to-day if it had had to depend in the past upon the capital owned by residents for its development. With all the evils which the Labour party may say are attendant upon it, it must be recognised that the influx of capital in bygone days to Australia is what made its prosperity. The proof of that is evidenced everywhere, and it is a very poor return to say now to the men who have invested their capital in Australia that we intend to tax them at this rate, and to do it at once. In this Bill they are given no opportunity to protect themselves. Surely it would be but an ordinary honorable business proposition to say to those who have invested their money here, as 1” contend, largely for the benefit of Australia, ‘ ‘ We do not want any more of your money, you must take it out of the country, or we will tax it, and we now give you Fair notice.” This Bill gives them no fairotice. It proceeds to confiscate at once. So far as the future is concerned, it says to such men, “ You cannot invest your capital here, or, if you do, this is what you will have to pay.” This Bill will absolutely deter any future influx of capital into Australia, whether for the benefit of this country or not. That will be the inevitable result of this legislation. Much as I object to the measure because of its many harsh provisions, I feel more strongly when I consider what its effect is likely to be. Already I see, and I hate to see it, evident signs of class warfare in Australia, [f there is a country on the face of the earth where English is spoken to-day from which that feeling should be absent, surely it is Australia. Can any member of the Labour party wonder if such feelings should arise here?
– Not a bit.
– I pay no attention to Senator Rae, who, on a matter of this sort, adopts an attitude either of levity or open vindictiveness. Surely the honorable senator has not descended to such a level as to justify a class war in Australia? Surely the honorable senator does not think that a war of that sort can do any goo4 to either side ? I hope we are all of opinion that that kind of thing is utterly degrading. No Labour man can indulge in a warfare with other classes of the community and hope to derive any benefit from it, and I venture to say that no member of the other classes in the community could take part in a warfare of that kind without feeling ashamed of himself.
– This is only the honorable senator’s interpretation of the Bill.
– I say that everywhere it is promoting the feelings to which I have referred.
– According to the honorable senator’s idea, the majority of the electors ought to be ashamed of themselves.
– No.; I think that the majority of them do not understand what this Bill is, and I think, also, that many of the electors who within the last few weeks have begun to realize what is proposed in this Bill, and the injustice it will promote, are ashamed of it.
– The honorable senator cannot prove that.
– Of course, I cannot prove a thing of that kind, and I am not going to try.
– The honorable senator can only prove that the electors returned a majority of both Houses of this Parliament pledged to this legislation.
– What is the value of a statement of that kind ?
– It is as valuable as the statement the honorable senator has made.
– What is the value of a statement that the majority of the electors returned any party to pass the Bill which is now before the Senate? Surely no honorable senator can make a statement of that kind and expect it to be taken literally ?
– Why not?
– The reason is obvious. Did a majority of the electors know anything of the provision in this Bill in regard to mortgages?
– They knew the principles of the Bill to be proposed.
– Every member of this Senate knows that there is a wide difference between the principles and details of a Bill. I venture to say that a very large section of the electors, if not a majority of them, never contemplated that this Bill would be applied to city properties. I have no hesitation in saying that, while I admit that a great many believed that it was intended by such legislation to promote closer settlement-
– The honorable senator might just as well say that no Bill that has ever come before Parliament has been understood by the electors.
– I should not say anything of the sort. There is an enormous difference between the scope of this Bill and that of an ordinary Bill which embodies a simple principle.
– This Bill embodies the principle on which we consulted the electors.
– My criticism of this Bill is that it contains no principle. It violates every principle. It contains no principle, except it be the principle of fining some one else, and it miscalls the fine “ taxation.” Behind all this there is something which I may be allowed to say, because I feel it very strongly, and that is that the Bill is going to promote a certain amount of class feeling and hatred.
– It has promoted it already. I may be contradicted, but I am certain that events will show that what I say is correct. The reason is obvious, because it will inflict injustice upon many in the community. We cannot expect that men will sit down quietly and submit to a Bill which will have the effect of reducing an income of £2,800 to £800
– Others are languishing for an opportunity to derive an income from the land. The honorable senator does not see that side.
– That is no answer to my statement. A rankling sense of resentment against injustice will be created from individual instances of hardship, and I say advisedly that this will be shown not merely by those who are going to suffer under this Bill.
– What about the injustice of telling a worker that smoking is a luxury?
– The honorable senator will find that statement made in the Government pamphlet that I quoted yesterday.
– Then I am as sorry for the Government as I am for the honorable senator.
– What has the honorable senator’s interjection to do with the matter now under discussion? Am I to be regarded as having committed a crime if I suggest that the use of narcotics and stimulants is an indulgence in a luxury which borders on a vice?
– I wished only to show that the class struggle has already commenced.
– The taxation of tobacco is not a question of a class struggle, and I do not wish to be diverted by such an interruption. These irrelevant interjections do not tend to orderly debate.
– Then the honorable senator should not make accusations.
– Order ! The interjections have become continuous, and I remind honorable senators that every member of the Senate has a right to be heard in silence, and that those who are interjecting are entitled to speak on the Bill for themselves.
– I do not suppose that any honorable senator objects less to interjections than I do, but I am obliged, sir, to you for your interposition, because I do object to utterly irrelevant interjections. I must be allowed to repeat my opinion that this Bill will promote class feeling. I say that it will do so because it will inflict injustice upon individuals. I feel more strongly about its. effect upon the community-. I regret exceedingly to have to believe that it will promote a state of things in Australia which may go from bad to worse. If our people are willing to peacefully submit to the operation of a Bill which will inflict injustice in many cases, 1 say that the spirit of injustice is likely to spread. There is no tendency more dangerous than that towards selfishness in human nature. What do we hear to-day? I hear it from men of my own class, if honorable senators please, just as from all sorts and conditions of men, “ Yes, of course, it is grossly unjust to so-and-so, but it does not touch us.” If that sort of spirit spreads in this community it must work ill for Australia. I venture to say that if this land tax is received without protest, the result will be most disastrous. Once a spirit of toleration of injustice arises in any community, that community must fall, and it ought to fall. I feel as little disposed as any man to adopt such a counsel of despair. I believe that men in Australia will not consent to tyranny and injustice merely because it does not touch themselves. I believe that one effect of this tax will be to create that form of unselfishness which indignantly resents injustice to some one else. Our people will not remain indifferent and callous whilst individuals in the community are being treated with gross harshness, and if this Bill in its operation serves to arouse them, then in spite of the manifest injustice and hardship which it will inflict, some good may follow from it.
– I do not intend to speak at length, because, with other honorable senators on this side, I am anxious to see this measure placed on the statute-book as soon as possible. But I think that every member of the Senate should give some reason, however briefly, for the vote he intends to record upon a measure so important. We must recognise that this is one of the most important measures with which we are asked to deal during the existence of the present Parliament. I have not heard one argument against the principle of land values taxation. I have noticed that the opponents of this kind of legislation have been remarkably silent upon the principle on which this Bill is based.. The only argument urged against it, so far, ‘ is that it does not propose to tax all alike. The objection is to the exemption of properties under £5,000 in value. There may be some force in that objection, but we know that in some of the States action is already being taken to collect land taxation on properties less than £5,000 in value. If that course be followed, the principle will be applied throughout, and the scheme of land values taxation will be complete in Australia, although it may not be completed in this measure. Some reason may be urged why the Government do not propose in this measure to tax land values in the case of all properties. It may very reasonably be argued that the State Parliaments should be placed in a position to levy a land tax upon properties under £5,000 in value. We give them, by this legislation, an ample opportunity to raise the revenue which we are told they require. I have said that no argument has been advanced against the principle of land values taxation. It has met with some support even from honorable senators on the other side. But I do not rely upon members of the Opposition for my knowledge of the justice of the principle of land values taxation. All eminent authorities are unanimous in supporting that principle. The greatest political economists in every nation concur in its justice. I shall refrain from quoting any of these authorities, although they are as plentiful as blackberries. All that I have to do at the present time is to justify the imposition of a graduated land tax for the purpose of bursting, up large estates. It has been said that these estates are being utilized to their best possible advantage. So far as Western Australia is concerned, I have no hesitation in denying that statement. It is notorious that many of the large estates there - estates which comprise some of the richest lands - are practically in a virgin condition. It is because the electors of Western Australia recognise that land monopoly has retarded its progress that, at the recent general election, they rose in revolt, and returned to this Parliament so many members of the Labour party. What I am saying of Western Australia is, I believe, equally true of the other States. Indeed, land monopoly exists in a more aggravated form in Victoria and the smaller States of the Commonwealth than it does in the larger States, That circumstance in itself is sufficient justification for the attitude of the Labour party upon this question. During the recent election campaign we placed the principle of land values taxation before the country, and the electors emphatically indorsed it. It cannot be urged for a moment that we have attempted to spring a surprise upon them, because for twenty years this principle has been a prominent plank in the Labour platform. We advocated its adoption when it was unpopular to do so. It has now been accepted by a majority of the electors. With a view to showing the real position of affairs in Western Australia, I propose to make a few quotations. I shall not deal with the evil of land monopoly from the stand-point of any other State than that which I represent. The authorities I am about to quote cannot be accused of prejudice in favour of the Labour party. It is true that they favour the principle of land values taxation, but they cannot be assailed with any charge of being partisans. The first quotation which I shall make is from a newspaper published in one of the richest districts in Western Australia - a district which possesses a splendid soil and an ample rainfall.
– Does the quotation refer to freeholds or leaseholds ?
– I think that it relates to both. It reads -
Now, just let us examine the list bearing the names of a few of the “ young selectors.”We have Mr. Bush, of Clifton Downs, with two and a half million acres, carrying eighty thousand sheep. His wool returns him £20,000; annual sales of surplus stock, £10,000. Yawbrah Station, owned by Mr. Monk, has an area of 490,000 acres, carrying 40,000 sheep; wool returns, £7,000; and sale of surplus stock, £7,000. McLeod’s Minilya Station, 400,000 acres, carrying 40,000 sheep. Sir John Forrest’s MInderoo Station, 350,000 acres, carrying 35,000 sheep ; wool sales, £9,000 ; sales of surplus stock (sheep), £5,000. This station also carries on horse breeding on a large scale. These values for both wool and sheep are, we believe, considerably under the amount realized, but they go to show what profits are being made by a few of the so-called “ young selectors,” who will be requested by the Fisher Government to contribute to the Commonwealth coffers a little return for what the country has done for them in providing them with the land from which such wealth could be won. This is the class for which the poor old West is weeping its eyes out, quaking with fear lest they should in disgust throw up their holdings and leave the country.
– They must be leaseholders. I am prepared to make that statement without knowing the facts.
– I will not contradict the honorable senator, because I d> not know whether they are leaseholders. But, even if they are, these figures evidence their fitness to pay the proposed tax. My next quotation will be from a Western Australian newspaper. It is in the form of a letter from a farmer who visited that State in search of land for his son. He went to one of the richest, and one of the oldest settled, districts in the State, and this is what he tells the public -
With that intention I journeyed to Newcastle, and from what I heard there I found that I would have to travel miles from Bolgart to secure -what I wanted. I trained it to Bolgart, having arranged for a week’s inspection extending north of Wongan, and have a good look cast and west en route. On my arrival at Bolgart I was extremely .fortunate (through my Perth friends), as my guide proved. to be a mau u£ exceptional intelligence and knew every inch of the country that we were about to travel. I at once plied my newly-made friend with many questions. Asked as to the reason why so many thousands of acres of first-class land between Newcastle and Bolgart were conserving firewood instead of growing wheat, he informed me that most of the these large holdings that are still in their virgin state had been held for over seventy years and that I would have to drive several miles before I would see anything of the bond fide selector. He also informed me that six years ago he was forced to select outside these mammoth blocks of land, carting his produce close on forty miles to Newcastle until this season. From the answers I got to the many queries I put to him I came to the conclusion my fate must be to get amongst Australia’s greatest drawback, the large holders of unused lands. What I could not understand was a railway being built through and left in the middle of this large tract of fertile virgin land. My friend appeared rather amused. He no doubt had come to look at these things as a matter of course, and informed me that in three or four hours’ drive we would be in touch with the selector who is looked upon by the Government to keep the Bolgart railway going. Having made a start on our trip, mile after mile we passed through what is locally known as syndicate land. Having travelled about nine miles we came upon two selections, one Wyoming (an outside holding of the New Norcia Mission). On this there is rather a large orchard and vineyard. These selections were taken up before the syndicate secured their lands, the growing capabilities of the land having been demonstrated by these early pioneers. With this to put before the buyer the Midland Company thought fit, a short time ago to subdivide and auction some thousands of acres which were eagerly bought up. We now travelled through this subdivided land for some six or seven miles, and then struck the first Government selector since leaving Bolgart, close on forty miles from Newcastle. The bulk of the land the whole way is simply growing firewood.
-Colonel Sir Albert Gould. - ls that the Midland railway ?
– It is a line which runs to the east of, and almost parallel to, the Midland railway.
– Is it not the linewhich was built by a syndicate?
– There is a line in the district which was constructed by a syndicate. Here is an exceptionally rich district. There is no denying that fact. Newcastle is 70 miles from Perth, and was one of the first districts in Western Australia to become settled. Land there was taken up some seventy’ years ago; but much of it in the neighbourhood is in very much the same condition as it was originally. Surely, in the face of such facts, something ought to be done. That nothing will be done by the State Parliament is quite evident. Several measures have been passed which might have affected the Newcastle district, but nothing has been done with it. It is only one of many cases. Other districts are equally bad. The Western Australian Parliament has authorized the construction of railways into districts that are still almost as backward as they were in the beginning. The township of Newcastle, though situated in an extremely rich district, is today not much better than a miserable hamlet, although it ought to be the Centre of a large population.
-Colonel Sir Albert Gould. - Are the lands there privately owned or Crown lands?
– They are privately owned. It is impossible to buy land within 40 or 50 miles of Newcastle now. I mention these facts to show that some of the richest lands in the country are being held up and misused. This affords ample reason for the action of the Government in bringing forward this proposal. I have a quotation with regard to another case nearer to Perth, in a district where the rainfall is all that it should be, and where the soil is excellent -
Within close proximity to Perth, and stretching along the shores of the Indian Ocean for a distance of over sixty miles, with a portion of its eastern boundary in close touch with the Bunbury railway line, and flanking also the districts of Wongong, Mundijong Mardella, Serpentine, and Pinjarra, is the Peel estate of 241^35 acres holding within its borders thousands of acres of some of the richest lands in the south-west. It is quite safe to go further, and say that it is some of the richest in Western Australia. Its ideal situation and close proximity to the markets, combined with the great productiveness under cultivation of a large portion of the area, gives it special advantages over more distant competitors.
As soon as the Federal elections were over, a cry was raised that the Government should resume that estate for purposes of closer settlement. But I am glad to say that the measure now before us will obviate the necessity for Government resumption, and the owners will either have to pay the tax imposed by the Federal Government, or cut up their property, so that it may be purchased by people who will use the land. When we remember that the Swan River settlement was taken up quite early in the last century, and that to-day some of the largest estates exist there, I think it cannot be denied that there is a necessity for such a Bill as this. Probably this is the first time in the history of Australia that the big land grabbers have been called upon to pay to the State a reasonable amount for the luxury they have enjoyed so long. They have no Legislative Council to rely upon now, and will have to do their duty as citizens. I am satisfied that the people of Australia will welcome this legislation. I will even venture into the realm of prophesy, and say that within a few years, Australia will have benefited to so large an extent that the 13th April, 1910 will be looked back upon as one of the most glorious days in the history of our country.
.- 1 will commence the observations I have to make with regard to this Bill by saying a word or two about the speech of the hon- orable senator who has just sat down. He has spoken about land grabbers. That is no doubt a good platform phrase. If I were a Labour representative, I should make frequent use of it.
– - The honorable senator is speaking more in sorrow than in anger.
– I may often have been angry in the past; but I am rather “down” now; and after thirty-six years of political life, I hope I may be excused if I do not hold my own quite so readily as I could twenty years ago. I do, however, want my views on this question to be known. I have been nearly sixty years in Australia. When I first came- to Victoria the great cry was for separation from New South Wales. I came here in the early digging days, when hardly any land had been alienated. The Crown wanted money and had to have it. The Federal Government will also be wanting money by- and-by as the result of extravagance. In those days Australia was a new country, and every one saw that it was a rich one. I have been twice round the world and have kept my eyes open wherever I have travelled ; and 1 can say that there is no country on earth that is so suitable for stock raising and for the utilization of land without the expenditure of a very large capital to begin with as is Australia, especially on our permanent water frontages. I could produce letters written years ago to show that at one time the Crown almost insisted upon the leaseholders buying their land. As Senator Millen said yesterday, laws were passed practically compelling them to. purchase. Do not let it be t01.gotten that Australia had to be developed. It did not develop in one big jump. We have had serious sets back. We had one in 1IQ02, when through the drought we lost 60,000,000 out of 100,000,000 sheep. A drought is the most, serious disaster which Australia has to fear. The boom time was bad enough, but I am proud to say that I was never a boomer, consequently I did not suffer from the collapse of the boom. Any drought must necessarily be serious to Australia.. I well remember going into a barber’s shop in Melbourne at the time of the drought of 1902, when the man who cut my hair said to me, “ When are we going to get rain? This is a very serious business.” I said to him, “What do you care about it, my friend?” He said, “ The boss has sacked a number of us, and if we do not get rain there will be no custom and more of us will be sacked.” The prosperity of Australia depends, in the first instance, upon its rainfall. Those honorable senators who do not realize that great fact do not know much about Australia, and the reasons for her prosperity. T remember well that when I first became member of Parliament for Rodney, about thirty-six years ago, I drove my buggy and pair through the Goulburn Valley and did not see a single farm in the whole district.
– That is the place where the people Have repudiated their obligations to the State, is it not?
– I do not know that they have.
– I am sure of it.
– It is true that many of the people in the Goulburn Valley do not care much about Mr. Elwood Mead’s idea in favour of very small holdings. When a man has been used to cultivating 700 or 800 acres of land he does not like the idea of settling down on 10 acres and working like a slave. Many farmers in Australia have succeeded and made little fortunes. In the early days of settlement in the Goulburn Valley a man was allowed to select only 320 acres. But the law never said that he should not buy more. Many a man who prospered in the Goulburn Valley or in the Western District of Victoria crossed over into New South Wales or went to Queensland, where three or four times as much land could be obtained for very little money. As the Queenslanders know, a man can get 20,000 acres of land in some parts of that State without any ready cash worth speaking about if he is lucky enough in the land ballot.
– He may be in 500 ballots and never get a show.
– I know that there are millions of acres ready for occupation in Queensland at the present time.
– There were 449 applicants for six blocks at Wagga yesterday.
– If I were to offer a bonus to persons in Melbourne - something which they would regard as a great gift - there would be an immense scurry to get it, as Senator Millen very aptly remarked yesterday.
– This is not a gift, because the men have to meet their responsibilities.
– I have known Australia almost since its earliest days. I am acquainted with the conditions of the various States. Persons who selected land invariably believed - and in 99 cases out of a 100 they were right in their belief - that they were getting something under its value, and the Crown of course is always giving people land under its value. I do not blame them, nor does anybody.
– And they buy it back at four times its value.
– No; the selectors sell out to other persons, hence the aggregation in Goulburn Valley and other parts of Australia.
– I have heard something about dummying in all the States.
– Yes, if it is allowed by the law, can the honorable senator be surprised that men will dummy?
– That is what Shylock said when he wanted his pound of flesh.
– In a manner of speaking, the law does not prohibit dummying.
– Do not forget that you were one of the law-makers who made those laws.
– I was certainly in the Victorian Parliament for a great many years.
– What were you doing there?
– I am not ashamed of any vote which I gave, and I do not desire such miserable interjections.
– You were doing a work of which you are ashamed to-day.
– I am willing to allow my history to be contrasted with the honorable senator’s.
– I am only speaking politically.
– I need not have that remark flung in my face. During the last sixty years in Australia no man has worked harder than I have. I would not be idle one day when I could earn a living at breaking in a horse or anything else that came in my way. In my native country, Canada, I never learnt a trade, and how comes it that I rose in Australia to be one of. its largest railway contractors ? It was by means of my industry and, I hope, brains.
– Hear, hear.
– Then what is the use of that miserable interjection of the youngster who knows very little about Australia?
– If you put the matter on that ground, I withdraw the remark.
– I accept the withdrawal. I may be hasty, but there is no bitterness with me.
– I was only speaking politically. I have no bitterness.
– When Senator Givens interjected I was referring to the lands which are open for selection in Australia. In Queensland alone there are 2,000 square miles available.
– How much of it is prickly-pear land?
– The following areas are available for selection -
Landsborough Downs, 29½ square miles (Mitchell district); Albilbah, 112½ (Mitchell); Cardowan, 18½ (Leichhardt) ; Cawildi, 44 (Maranoa) ; Kensington Downs, 82½ (Mitchell) ; Boongoondo,102¼ (Mitchell); Clare, 445/8 (Mitchell); Durong, 116 (Burnett); Darr River Downs, 139½ (Mitchell); Barcoorah, 495/8 (Mitchell); Yarrawonga, 61¾ (Warrego); Green Hills, 42¾ (Mitchell) ; Murra Murra, 50 (Maranoa) ; Brucedale, 21 (Maranoa); Afton Downs, 44 (Burke); Woolerina, 200 7-16 (Maranoa) ; Evesham North, 68½ (Mitchell); Delta North, 39 15-16 (Mitchell); Delta South, 40 3-16 Mitchell); Gordon Downs, 43¾ (Leichhardt) ; Tamworth, 16¾ (Burke); Quambatook, 55¾ (Burke); Barenya, 59 (Mitchell); Tower Hill; 46! (Mitchell); Rodney Downs, 19 11-16 (Mitchell); Myall Grove, 11 9-16 (Darling Downs); Peak Downs, 9¾ (Leichhardt); Eurella,91/8 (Maranoa); Willarie, 35½ (Maranoa) ; Langlo Downs, 921/8 (Warrego) ; Bindango, 15 (Maranoa); Newinga, 36 (Maranoa); Culloden, 381/8 (Mitchell); Tarong, 49 (Burnett); Taabinga,71¼ (Burnett); Kooroongooloo, 124 (Gregory South); Tenham, 59 11-16 (Gregory South).
The return shows that millions of acres are now open for selection in Queensland. It is only a few years since real, good butter country, with 40 inches of rain per annum, could be bought at Rockhampton at£1 per acre. My Queensland friends here can indorse my statement. What is the rent of that land now, with a railway running west for 600 or 700 miles, and a shipping port at the very door? What is the use of my honorable friends talking of people who want land” not being able to get it? The men who come here to-day must not expect to settle down in the towns, but must do as the pioneers did ; they must go further afield and get land. As regards the position in Western Australia, Senator de Largie quoted certain lands near Perth and other places. But what do I find in this publication -
Survey before Selection.
From 20,000 to 40,000Acres of Rich Agricul tural Land, Surveyed into Suitable-sized Blocks, thrown open for Selection each week.
Every acre well served by existing railways, railways under construction, or proposed.
The railway policy of the State is, as far as possible, to place every farmer within at most 15 miles of a line.
Seasons as Certain as the Sunrise.
Land available for selection suitable for all branches of agriculture, according to districts, in rainfall belts, ranging from 50 to 10 inches per annum. Three-quarters of the annual rain falls from April to October.
Conditions of Selection.
Maximum area of conditional purchase select able by any one person, 2,000 acres.
Price, from 3s. 9d. per acre.
Payable in 40 half-yearly instalments, without interest.
A Free Homestead Farm, of 160 acres of first-class land given under certain residence and improvement conditions, to any male over 16 years, not already the holder of 100 acres or more of rural land in the Stale, for the nominal fee of £1, and half-cost of survey, £3. Absolutely no further payment for the land.
State Agricultural Bank.
Most Liberal in the World.
Loans up to£400 advanced to new selectors to full value of proposed improvements; maximum advance,£750, including for slock and machinery. Interest only payable 5 per cent. per annum for first five years after loan is granted ; principal and interest repayable in equal annual instalments over 25years thereafter.
What is the use of honorable senators on the other side talking - I was about to use a term which sometimes little boys at school use, and that is “bally rot.” ] have often checked boys for using the term, but it aptly expresses my meaning. I hope that the Senate will excuse me for using it.
– That is a very good way to get it in.
– That is a term which is used in Little Bourke-street.
– I am surprised at honorable senators laughing, because the information 1 have given clearly disproves statements which they have made on the platform, and elsewhere. In Victoria, there are not at present very many large landholders. Thirty years ago, when you left Geelong and drove to Warrnambool, you would find only three or four big holdings. But what do you find to-day? Almost the whole countryside is studded with well-built, comfortable houses, occupied by successful farmers, working on the share system, or otherwise. The other day I presented a petition from forty-five farmers in Gippsland praying that certain provision should be made in this Bill. Are they to be dispossessed? Unless the Bill is amended, it will work a gross injustice in their case. In the Western District of Victoria, there are only a few big estates, and the holders of land can sell out at great advantage. When the holder of a large estate is surrounded with farmers, he has only to hold up his little finger when they will buy him out at good prices. Australia comprises an enormous area.
– Three million square miles.
– Australia is a little larger, if I recollect aright, than the United States, and about as large as Europe, leaving out Russia. Is it to be supposed that the State Governments can deal in the course of a few years with the vast areas under their respective jurisdiction? That is impossible. The Government of Queensland have untold millions of acres of beautiful country, which I travelled over many years ago, and which is fit for almost anything if communication were provided.
– I know some selections foi which the Government wanted £7 per acre.
– Quite so. The Government of Queensland have not parted with much of their land, and is it to be said that, because a few persons were forced by the Government to buy land, they are to be robbed, or compelled to sell it? Under this legislation, a man who is out of debt can pretty well hold his own. But what will be the position of English banks which have dealt most liberally with the people of Australia, and with one of which I have been dealing for thirty years ? They have treated their debtors handsomely, and helped to develop Australia enormously. The wool institutions, for instance, have helped Australia to develop :her resources much more quickly than otherwise could have been done. The British Government did not treat the early settlers as the Governments of other countries would have done settlers in their distant possessions. They made us a free gift of millions of acres, and told us to go and develop the resources of this continent, promising us capital and other help.
– For profit.
– There is no trade without a mutual advantage even between brothers. My honorable friends opposite want to put a handicap on the good English brother who has lent his money in confidence to the people of Australia. They hold the debentures of Australian Governments to the value of many millions sterling ; yet the Government propose that we should treat them as if they were worse than criminals. We are going to dispossess 1hem of their holdings. Is that fair treatment? T am sure, Mr. President, that if you were allowed to speak you would say “it is not. The people who own land in Australia were, in many cases, forced to buy it.
– Who forced them ?
– The Crown; because Governments required money to extend railways and carry out -public works.
– How did the Crown force them?
– I can tell the honorable senator that T hold land now which I bought from the Government a long time ago. It is not mortgaged ; and I am quite willing to give it back to the Crown for half what I paid for it, if the money I spent on improvements on it in the shape of buildings is refunded to me. There are millions of acres north of Victoria for which the owners would be glad to-day to get less than they paid for them, giving the improvements in. I have papers here which I have shown in confidence to the Vice-President of the Executive Council and other members of the Senate, and a member of the House of Representatives.
– If they are confidential, the honorable senator should not quote from them, or I may ask that they be laid on the table.
– I have no objection to Senator Givens seeing these papers ; but I do not wish the confidential information they contain to appear in the press. 1 have here particulars of an estate of 78,000 acres. It was advertised to be sold by auction at Scott’s Hotel. There was a mortgage of .£75,000 on the estate, anr! an overdraft in addition to the mortgage. I know a gentleman who is well known to many honorable senators who, in the course of a few years, advanced up to £25,000 on this property. Now, let me tell honorable senators that there was no offer for this land.
– And there was no Federal land tax in operation at the time.
– That is quite true ; and the position would be very much worse to-day. The gentleman who advanced £25,000 to keep this property going forfeited the whole of the money rather than encumber his own property, and the estate is in the hands of the mortgagee to-day. Now Senator Givens may have these papers :f he desires to verify my statement. I tan give another instance. I refer honorable senators to the Kerry Kerry estate, which was sold the other day. It comprised 46,000 acres of freehold, and 30,000 acres leasehold, held on -a long lease, because the Government of New South Wales, with the consent of the Labour party in the State Parliament, gave long leases for country in thai part of the State. There were 12,000 good sheep on the estate; they were being shorn at the time of the sale, the wool was given in, together with cattle, plant, and enormous improvements, including tanks, wire-netting all round the property ; and the price was £35,000 cash, walk in, walk out. In that case, the owner received 10s. 6d. per acre for land for which the Crown had received £1 per acre.
– Was the estate of 78,000 acres to which the honorable senator referred all freehold?
– Yes, it was all freehold. It is described in the advertisement. There were 77,112 acres or thereabouts of freehold, and 1,400 acres or thereabouts of conditional purchase land which might be converted into freehold on the payment of a few shillings per acre. The Kerry Kerry estate, as I have said, was sold, walk in walk out, at 10s. 6d. per acre. There is an adjoining property in which some ladies are interested. They are in India, and, of course, are absentees. Their husbands are fighting for the British Government in that part of the world. Good God ! Atp we going to be traitors to King and country and put an absentee tax on people who are treating us in this way ? The husbands of these women are fighting for the Empire.
– Let the honorable senator stick to the poor orphan and widow., and never mind the King.
– I would stick to anything, and would even talk Gaelic to the honorable senator, if by doing so I could induce him to make this a reasonable Bill. Nobody objects to a land tax, but let it notbe confiscatory. I have here particulars of a number of cases which any member of the Senate is at liberty to verify for himself. It would give me pleasure to drive half-a-dozen honorable senators to visit these places in my motor car, and it is probable that they would get a glass of whisky if they agreed to inspect them. I know all these properties well. They are all freehold. The first is an. estate due north of Melbourne. It comprises 64,145 acres, the shire valuation is 17s. 6d. per acre, and the total value £56,127. The tax would be £576. The capital value of the. tax at 5 per cent, represents £11,520. The average “net income for ten years is £1,336, and the proportion of the tax to the average net income is 8s. 7d. in the £1. The tax in this instance would take away one-half of the income now derived from the property by an aged widow and three young women. The next case is an estate of 26,923 acres ; the shire valuation is 14s. 6d. per acre, the total unimproved value £19,443. The tax would be £557. The capital value of the tax at 5 per cent, would represent £11,340. The tax in this case will leave a debit of £83 in view of the net income from the property. The next estate is one of 73,491 acres ; the shire valuation is 25s. per acre, the total un improved value is £91,864. The tax would be £1,390. The capital value of the tax would represent £27,800. The average net income for ten years of this property is £4,865, and the proportion of the tax to that income would be 5s.” 8d. in the £.1. The next is an estate of 65,821 acres; the shire valuation is 18s. 9d. per acre, the total unimproved value £61,801. The tax would be £684, representing a capital value of £13,680. The average net income for ten years is £862, and Lue proportion of the tax to the net income would in this case amount to 15s. 10d. in the £1. The next is an estate of 71,761 acres; the shire valuation is 14s. per acre, the total unimproved value £50,101. The tax would be £470, representing a capital value of £9,400, and in this case, in view of the income from the property, the owner would be left with a debit of £56. The next case is that ot an estate comprising 111,277 acres, upon which the shire valuation was 17s. 6d. per acre, the total unimproved value being £98,153. The tax will amount to £1,547, the capital value of the tax, at 5 per cent., is £30,940, the average net income for ten years has been £3,402, and the proportion of the tax to the average net income is 9s. id.
– Is not the honorable senator calculating the tax on the total value including improvements?
– No. I have mentioned the unimproved value m every case. I was sorry to hear the Vice-President of the Executive Council say the other day that properties such as these had been under-valued. I have had an intimate connexion with Queensland for many years, and I know of no instance in which a shire valuer has under-valued any property.
– Upon the Seaforth estate the shire valuation was 15s. per acre, and the owner secured a reduction to 12s. 6d. per acre. But he sold it immediately afterwards to the Government for £3 per acre.
– I am referring to the statement of the Vice-President of the Executive Council.
– The Closer Settlement Board gave 91 per cent, more than the shire valuation for the Morello estate, near Hamilton.
– To my own knowledge, during the past thirty years, the shire and municipal valuators have made honest valuations. If a land-owner under- valued his holding, would” not his neighbour be prompt to pull him up? In Riverina, where 1 have a property, the shire valuations are upon its unimproved value, and they are fair and honest valuations. I know that in certain cases in Victoria, which are at present engaging the attention of a Commission, land values rose considerably within a few weeks. Hut that was the result of speculation. We cannot avoid discrepancies of that character. 1 repeat that the shire valuations upon my property in Riverina are fair and true in every particular.
– Is the honorable senator prepared to sell that property tor the shire valuation?
– The shire valuation is upon the unimproved value.
– Will the honorable senator sell it for that valuation with the value of the improvements added?
– I may be disposed to do so. To the north of, and almost immediately adjoining, my property in New South Wales, there are millions of acres which can be purchased for less than was paid for them to the Crown, notwithstanding that the owner has spent tens of thousands of pounds during the past thirty years in his efforts to get rid of the rabbits there.
– Does that expenditure improve the land?
– If the rabbits are allowed to take possession of the country it will naturally become less valuable. For fifteen years the Squatting Investment Company, with which I am associated, has had twenty poison carts going all the year round in an endeavour to successfully cope with the rabbit pest.
– And the company has killed alt the dicky birds?
– Yes, and a lot of sheep. That, however, could not be avoided. We imported and erected hundreds of miles of wire-netting, and were obliged to enclose a tract of 300 miles in order to prevent the rabbits from getting at the artesian waters, and to compel them to drink at poisoned waters. Upon that very property, I am happy to say, we sank the first artesian well in Australia, in the year 1886. Twenty years ago selectors in that district selected land in 20,000-acre blocks. With what result ? The drought came, and they were ruined. It is impossible to work these lands except in large holdings. The same thing happened on the Warrego. The men who selected there, with the exception of. one determined fellow who fought a tremendous battle, and succeeded, left the locality ruined. The others brought capita! with them, but left without it. That land has now been leased to the Squatting Investment Company by the State Government for a period of thirty years on the understanding that we are to destroy the rabbits. Honorable senators opposite art elected to see that justice is done to the States. The Senate is supposed to be a. State Rights House. But they know nothing whatever about the disabilities and trials to which the pioneers in this part of the world were subjected, otherwise they would not speak so flippantly as they do. When I first went to Mr Hutton, on the Dawson River, forty years ago, the ironbark hut in which we dwelt had to be pierced with holes every 3 feet, so that we could aim a rifle through them. We had to protect ourselves. Sometimes there would be as many as 2,000 blacks camped within a quarter of a mile of our property. Upon an adjacent holding. Hornetbank. the Fraser family were killed by the aborigines. Only a lad of about twelve years of age was spared. He crept under a bedstead while the murders were in progress, and the blacks, believing that he was dead, left him there. After they had departed, he crept out of his place of concealment and thus regained his freedom. When he grew up to manhood the StateGovernment gave him permission to shoot the blacks, and he did shoot a few of them. What is the use of putting Bills like this before honorable senators who know nothing whatever about the trials of the early pioneers ?
– Then why does the honorable senator wish to do it?
– I hope that my honorable friend will call a caucus meeting, and use his brain power to secure some amelioration of the hardships which will be inflicted under this measure. 1 have spoken much longer than I had intended and I thank honorable senators for the patience with which they have listened to me.
– One very refreshing feature of this debate has been the speech which my honorable and venerable friend, Senator Fraser, has just delivered. I take this opportunity of congratulating him upon his remarkable virility, but I am sorry that I cannot congratulate him upon having adduced any solid argument against the measure which we are now considering. The title of the Bill is “ a Bill for an Act relating to the imposition, assessment, and collection of a land tax upon unimproved values.” So far, I have not heard a single argument against the justice of the principle to which the Bill seeks to give effect.
– Was the honorable senator present while Senator Clemons was speaking ?
– I was. Perhaps my honorable friend was not.
– Oh, yes.
– I was present during the major portion of the remarks of Senator Clemons, and 1 did not hear a single argument advanced against the justice of the principle of land values taxation. Evidently Senator Walker was having his usual afternoon nap. I admit that I did hear many arguments in favour of protecting those men who have been so fortunate as to acquire large tracts of territory which they are not putting to a proper use.
– The tax will fall just as much on the man who is utilizing his land to the best advantage as it will upon the individual who is not.
– Many of the arguments which were advanced by the Leader of the Opposition yesterday might well have been reserved for the Committee stage of the Bill, because it is just possible that we may then be able to focus our attention on one or two clauses which he specially attacked, and which he declared will inflict a glaring injustice upon certain individuals.
– But the VicePresident of the Executive Council has said that he intends to resist all amendments, no matter what may be their effect.
– The Leader of the Opposition knows perfectly well that, while the Vice-President of the Executive Council may resist all amendments, he is not the sole arbiter of whether any amendment shall be accepted. The Committee will be the arbiter of any amendment that may be moved. I am somewhat surprised at the howl of derision with which this Bill has been received bysome honorable senators opposite, in view of the fact that in another place it went through the ordeal of a scathing criticism from the colleagues of the Opposition in the Senate. Surely honorable senators op posite must by this time have awakened to the fact that, whether they like it or not, the people of Australia have demanded that a tax shall be imposed on the unimproved value of land. If time permitted, I could quote columns of figures and of authorities to prove the justice of the principle embodied in this Bill, but as I am desirous that the measure shall become law as soon as possible, I intend to put that portion of the argument on one side. Senator Fraser has told us about his properties, his sheep, and his cattle. But sheep and cattle will not defend Australia. There may be a time when we shall have to face the danger of invasion. We are at present the ob’ject of the greedy eyes of jealous Powers, who know what our national resources are, and wish for the day when they may endeavour to annex our territory. Recognising that danger, this Parliament is being asked to pass a Bill which will compel every citizen to prepare for the defence of his country. I cannot address myself to this Bill and separate the question with which it deals from that of defence. I contend that the three questions of land taxation, defence, and increased population are inseparable.
– There is such a thing in defence as leaving a reserve power of taxation for use in time of war.
– We can get over that fence when we reach it. I consider that, in the interests of defence, the lands that are lying idle and useless should be utilized, and that, instead of feeding sheep and cattle, they should provide homes for men and women, who would be able to defend their country in time of war. Senator Clemons has referred to the use of luxuries. But I do not admit that the worker’s pipe of tobacco or his glass of beer are luxuries. One of our High Court Judges has laid it down, in a ruling given from the Bench, that they are rather in the nature of necessities. But, even admitting that Senator Clemons’ argument is correct, the worker who smokes his pipe or cigarette and drinks his ale is paying heavy taxation for doing so. At the same time, there are in this country many others who are enjoying luxuries for which they pay nothing. This Bill aims at the taxation of those men who are holding up land and denying to others the opportunity of using it. My honorable friends opposite pride themselves on being students of ethics. If they are logical in their application of ethical principles, they cannot consistently oppose the legislative embodiment of the principles contained in this measure. It needs no proof that the lands of Australia are not being put to their best use now.
– Because there is not sufficient population. Is not that so?
– May I for the moment be Scotch, and answer one question by asking another : Why have we not a larger population?
– Because the Labour party object to immigration.
– There have been many libels on the Australian Labour party, but that is the greatest of all. I challenge any honorable senator to show one instance in “which the Australian Labour party have at any time tried to block the influx of population.
– They kept a Government in power that did.
– What Government ?
– The Barton Government.
– My honorable friend is, as usual, incorrect. I shall not now discuss the case of the six hatters ; but no honorable senator opposite can prove that the- Labour party has ever advocated depopulation, or been opposed to the increase of population. We have, however, advocated that before we invite people to our shores we should be certain that there is land available for them” to settle upon. The Bill that we are now discussing is the greatest proof we could have of the sincerity of the Labour party. We have contended on the public platform that until such time as there was an effective tax on the unimproved value of land it would be useless - nay, it would be suicidal - to invite people from abroad, because we have in our cities artisans who are now perambulating the streets unemployed. An influx of population would simply increase competition in an already congested labour market. But we do want to invite people to come to Australia to settle upon our land. Millions of acres of land are locked up. No better proof of that statement has been provided than was contained in the speech of my honorable and venerable friend, Senator Fraser. We want to place the lands of Australia at the disposal of our citizens. A couple of years ago, in New South Wales and Victoria, there were three’ or four hundred applications for one block of . land ; and in another instance there were 500 applications for one block.
The applications came from people who were resident in those States. Would it not be suicidal to invite people to come here to increase that competition? That is my reply to the libel that the Labour party are not desirous of increasing the population of Australia. Any sane sian who will glance cursorily at a map of Australia and ascertain its area and its population can realize that it will be utterly impossible to hold this country for the white race unless it has a large population. But we must also recognise that if we are to populate the country we must have the land unlocked and untrammelled for every citizen to have his fair share of it, and to welcome our brothers from oversea and give them a similar chance. During the course of his speech Senator Fraser said, “ If no rain no work,” referring to the results of a drought. We all know what dangers threaten Australia in that respect. But I am glad to say that so far as our honorable friends have gone, they have not yet blamed the Labour party for creating droughts, though possibly they may. My reply to Senator Fraser is that if there is no land available, there is no work. Our . contention is that we want population. The larger the area of land placed under cultivation the greater the demand for labour and the bigger the return to the whole of the populace. That is an accepted fact which ] need not dwell upon. Senator Clemons has stated that the people of Australia have not affirmed the details of this Bill. I have always understood that when a man sought the suffrages of the electors he stated the principles of his party and promised that if returned he would endeavour to have them embodied in a Statute. But I have not yet known or heard of a man who, on a public platform, ventured to put forward the Bill itself in connexion with the principles which he was advocating. I venture to say that Senator Clemons has not done so. . No honorable senator on the other side can disavow that the people of Australia were well informed during the late elections that if the Labour partywere returned in sufficient numbers to carry on the Government, one of their first act* would be to bring in a Bill of this very description. No one has yet attempted to deny that. But honorable senators opposite are trying to hide themselves behind the fact that the poor landlord and the poor mortgagor may be imposed upon. That is another feature. We have- heard a lot about the poor washerwoman, the poor widow, and every other poor person, and now we hear of the poor landlord. If the landlord is poor it is no fault of ours, because he has reaped the riches of the harvest so far.
– Very likely it is owing to a fault of his that he is poor.
– If he is poor, it will be his fault, and not ours, if he is made any poorer. Let me review the principle of the Bill. It levies a tax on the unimproved value of land. Shall I ask my honorable friends on the other side what is the meaning of unimproved value of land? N7o, I would not insult their intelligence by suggesting for a moment that they do lot know the meaning of those words. An honorable gentleman, whom they know well n Sydney, gave a splendid definition of die unimproved value of land. He quoted ihe case of a man who in a certain year nought a block in Sydney for £16. Shortly afterwards he committed a crime for which he was arrested, tried, found guilty, and sentenced to twenty years’ imprisonment with hard labour in Darlinghurst Gaol. He served the full period, minus whatever remission he had obtained for good conduct. When he came out of gaol at the end of about fifteen years and became again a free citizen, what was the unimproved value of the block for which lie had paid £16? Exactly £25,000. Here is where the whole crux of the question comes in.
– Who paid the rates for him all that time?
– He did not pay them. What could that man do while he was “ cribb d, cabin’d and confin’d” in Darlinghurst Gaol to increase the value of his land ? The increased value could only nave been created by the community by the expenditure of money, public or private, in the construction of railways, roads, waterworks, artesian bores, tramways, agricultural halls, libraries, town halls, or any other public utility in close proximity to :he block. Vet. after all these years spent in durance vile, this man came out and reaped that harvest of wealth without having expended any labour or money upon the land. I challenge my honorable friends opposite to quote any other case to disprove that there is justice and equity in imposing a tax on the unimproved value of land which, of course, is not created by the owner, but by others. Let me single out one or two other instances in connexion with the vast tracts of territory which are held up. In the Western District of Victoria in 1905, I think that was the year, there were eleven persons who owned 1,250,000 acres, and in another portion of that district there were eighteen persons who owned 1,500,000 acres. It will be conceded at once by Victorian senators, I think, that its Western District is the most fertile portion of the State.
– There are 187 persons who own 2,000,000 acres of it.
– I think that, in 1905 also, there were sixty families who owned 4,000 square miles in the Western District. Is it possible to expect that that number of persons could put that area to its legitimate use? If the land which is held in these large tracts were put to its proper use, then, instead of having eleven persons owning and controlling 1,250,000 acres, we should have many more happy families settled there and thriving. That is one of the reasons why I welcome this Bill.
– To only tax those who are not putting their land to proper use is not the principle of the Bill.
– We are now considering the second reading of “ a Bill relating to the imposition, assessment and collection of a land tax upon unimproved values.” My honorable friend was not in the chamber when I commenced to address myself to that subject.
– No; but you were saying that it is desirable that that land should be put to its proper use. That is not the object of the Bill.
– When I commenced my address, I said that I intended to deal entirely with the principle contained in the Bill, and that is to impose a tax on the unimproved value of land. I am now advocating the necessity of imposing the tax.
– But you are advocating that land should be taxed which is not put to its proper use, and that is not the principle of the Bill.
– My contention has been that if the Bill becomes law, land which is now locked up will be put to its proper use, and I have quoted figures in support of it.
– And land which is put to its proper use will be taxed in the same way.
– There is the same argument as other honorable senators have used; these are details of the Bill which can be very well considered in Committee.
– Is it not right ?
– I ask my honorable friend if he is in favour of the principle of the Bill ? There is no reply to the question.
– What is the principle of the Bill?
– The taxation of the unimproved lvalues of land. When a measure is introduced in this Senate, not to mark time, but to make some progress, those who support it are met with a fusilade of questions from honorable senators who desire to protect, not the people of Australia, but their own private property. Mr. Lloyd George, in the Old Country, has been threatened almost with the loss of his life, because he dared to bring forward a measure like this.
– He never did bring forward a measure like this.
– We have heard that great land-owners whose annual rentals amount to between £200,000 and £300,000 a year will be so poverty stricken when this tax is imposed that they intend to part with all their lands, and refuse to give anything to charity. We have been told here that this Bill will be unjust to all people who hold land. But I would remind honorable senators that under this Bill land under £5,000 in value is to be exempt from taxation.
– Will any one on the other side say why the line is drawn at £5,000?
– If the honorable senator asks me the question, I will say that it is because we are anxious to save the poor landlord and the struggling farmer, about whom he has so much to say. The honorable senator went through the last Federal campaign, and condemned the imposition of land taxation by the Commonwealth Parliament. He bewailed the fate of the struggling man on the land. He said that if this tax were imposed, the struggling settler would be further penalized, and, to use a word which has been bandied about in this Chamber this afternoon, he would be ruined. I venture to say that the man who owns land of the unimproved value of £5,000 cannot be said to be struggling.
-Colonel Sir Albert Gould. - He may owe £3,000 on it.
– He is a very, lucky man if he can get £3,000.
-Colonel Sir Albert Gould. - But he has to pay interest on it. That is the awkward part of it.
– It is not awkward that a man should have to pay his just debts.
– Will the honorable senator support an exemption on all land that is being put to its proper use?
– I will support the exemption of all land the unimproved value of which is less than £5,000.
– The honorable senator does not say that that is an answer to my question?
– I will support the Bill as it stands. I am answering the honorable senator in the way I answered the electors who sent me here. Surely he will not claim from me a more explicit answer than I gave my constituents? The absentee is mentioned in this Bill.
– Does the honorable senator look upon an absentee . as a criminal ?
– I do not wish to label any man as a criminal until he is found guilty of a criminal offence after a fair trial by his peers ; but I think that a man who earns his wealth in one country, and spends it in another, should be taxed by the .country in which his wealth is earned. We have the instance of a man who died in London only about a year ago. His estate was proved to be valued at a little over £2,000,000. Seven-eighths of his wealth was obtained from Australia, and yet that man did not pay id. of taxation to an Australian Exchequer. Would Senator Walker be prepared to justify that kind of. thing?
– Does the honorable senator believe that that man’s estate did not pay anything in the way of rents or dues to the Australian Government ?
– No Government in Australia received a brass farthing from that estate, but Mr. Lloyd George, as Chancellor of the Exchequer in England, received a very fine cheque from the owner of the estate. If any man exploits the wealth of a country, fattens upon it, and spends that wealth in another country, he should be taxed. So far as I am concerned, he can spend his money as he pleases. That is his business.
– The honorable senator would not kill the fatted calf?
– No; but I think that the country from which he reaps his wealth should get something out of the profits he derives from it.
-Colonel Sir Albert Gould. - There is a provision in the English law under which, by an arrangement between the different Governments, such a difficulty may be overcome.
– If that be so, I can only say that in the case to which I have referred, no Australian Government took advantage of it. I say that the landlord owes a duty to the community, and in supporting this Bill, I am merely seeking to compel him to render that duty to the community. I have only to say now that it marks a step in the progress of Australia, that the Federal Parliament should be dealing with a Bill of this nature. It is one of the finest pieces of legislation which we could place upon the statutebook, and in placing it there we shall be merely carrying out the promises we made to the people of Australia when they did us the honour to elect us as members of the National Parliament.
– I wish to direct attention to the state of the Senate. [Quorum formed.]
-Colonel Sir ALBERT GOULD (New South Wales) [5.40].- As honorable senators may suppose, I do not intend to follow exactly the lines adopted by Senators Needham and de Largie. I do not, as they do, regard this Bill as an unmitigated blessing. I do not regard it either as one which is in accordance with the promises which honorable senators opposite made when before their constituents. 1 wish to disabuse the minds of honorable senators of any idea that in opposing this Bill I am entirely opposed to land values taxation. It so happens that I had the honour to belong to a Ministry in New South Wales that introduced a land and income tax. I have regarded the taxation of land and incomes as a legitimate means of obtaining revenue, and I ask honorable senators to bear in mind that, though opposing this Bill, I am not opposed to land values taxation as a means of raising revenue when necessary. From the inception of Federation the opinion at which I arrived from read ing the Constitution, and hearing it discussed, though not at the Federal Convention, because I was not a member of the Convention, was that Customs and Excise taxation was under the Constitution to be left entirely to the Commonwealth Parliament, subject to the return to the States for a period of years of a certain proportion of the revenue so derived to enable them to carry on their affairs and adapt themselves to the new position. I recognised that the Commonwealth Parliament was, under the Constitution, to have absolute control of this indirect systemof taxation, but, in common with a great majority of the people, I believed that direct taxation was intended to be left to the States, unless to meet some very grave emergency, when the Commonwealth would be entitled to resort to it.
– Why was not that stated in the Constitution?
– Many things which do not appear in the Constitution may very fairly be read into it as consistent with the intention of the framers of it. Some years ago I was twitted with having stated that the imposition of direct taxation by the Commonwealth Parliament would be unconstitutional. I regarded it as unconstitutional from the point of view, that while there is provision made in the Constitution to permit this Parliament to resort to that means of raising revenue, nevertheless it was clearly the intention of the framers of the Constitution that there should not be an overlapping of both systems of taxation in the Commonwealth and in the States if that could possibly be avoided. So strongly did I feel on this point that I would have been prepared to say, and I think it would have been an advantage to the States, “ We will take the whole of the revenue which may be derived from Customs and Excise, and will not interfere with other sources of taxation to which the States may desire to resort to derive the revenue necessary to carry on their affairs’.” Honorable senators opposite contend that this land tax will have a most important effect upon the wellbeing of Australia. I may admit, for the sake of argument, that the burstingup of large estates, and their occupation by a greater number of people, would be of advantage to the country. But we have to look to our Constitution, and to see what powers have been intrusted to us under it. By the very title of the Bill the Government admit that they cannot put upon its face the motive which actuated them in deciding upon this system of land taxation. It is undeniable that in the early days those who advocated the imposition’ of such a tax did so because they desired to burst up large estates. That was the original intention of the Labour party, and I believe it is their intention to-day. But, under the Constitution, we are not empowered to levy a progressive land tax for any such purpose. We are justified in imposing taxation only for revenue purposes. There is not a line in the Constitution which suggests that we have the slightest right to interfere with the lands of the States.
– The States have sovereign rights.
– Exactly. The States possess sovereign rights, and this Parliament cannot legislate for the alienation of a single acre of land within their borders. The Commonwealth has no power to resume land except for public purposes, and in accordance with the powers which have been conferred upon it by the Constitution.
– We cannot enact that there shall be a spirit licence of £to per annum, but we can impose a duty of £10 per gallon upon spirits, if we choose. Surely that is a parallel case.
– The honorable senator misunderstands the position. If he tells me that the legislation proposed in this Bill is intended merely to raise revenue, I at once admit that the Government are empowered under the Constitution to enact it. But it has no power to interfere with the administration of the lands of the various States.
– Is not the case which I have just cited exactly a parallel one?
– No. The Commonwealth has imposed a duty upon spirits solely for the purpose of raising revenue. It has never been suggested that its object was to destroy the trade in liquor, and to prevent the importation of spirits. A similar remark is applicable to tobacco. But in this Bill an attempt is being made to prevent persons from holding land in large areas. Bv levving a progressive land tax, which will ultimately become confiscatory in its character, the Government propose to prevent the holding of large estates. But, as Senator Clemons has pointed out, when once the higher rate of 6d. in the £1 is reached, assuming that the net return from large estates is 5 per cent, upon the capital invested, the tax will amount to lOS. in the £1 on the income derive’d therefrom.
– His argument was based upon a mere assumption.
– All arguments are based upon assumptions. We must view this matter from a common-sense stand-point. We know that if the holder of a large estate clears, upon an average, 5 per cent, upon his outlay, he does very well. It is true that during one year he may clear a great deal more, but during another he may obtain very much less. If it were proposed, in so many words, to levy a progressive income tax upon such a man, to provide an exemption up to £5,000, and to increase ihe tax till it amounted to 10s. in the £1, honorable senators opposite would declaim against its injustice. While it is true that some persons have the handling of large sums of money, we must recognise that, as they have acquired means, their outgoings have increased. Many a young man, in starting life, has been heard to say that if he only had such-and-such an income he would occupy a very happy position. “ But when once he is in receipt of that income he speedily discovers that it is still insufficient to enable him to satisfactorily meet his obligations.
– Does the honorable senator maintain that Senator Clemons was correct in the instances which he quoted?
– The instances which he cited were based upon the estimated returns from the unimproved value of property in good and bad seasons. He is absolutely correct when he says that a tax of 6d. in the £1 on unimproved land values is equivalent in the case of estates aggregating a value of £75,000 and upwards - estates which return 5 per cent, net - to an income tax of 10s. in the £1. Whilst it is customary for some persons to regard the. ownership of land as systematized robbery, we must recollect that not a single acre in the whole of Australia has been alienated without some valuable consideration being given for it. Even in the early days, when men obtained grants of land, without payment, they had to perform certain work in order to justify their holding of it. They were the men who did the pioneering work of <:his continent.
– Is it not a fact that those conditions were unfulfilled ?
– In certain cases, it may be. But before a man obtained his grant, he had to give valuable consideration for it. He was one of the pioneers of this country - one of the men who have made it a desirable place to live in for those who come after them. At a later stage, men were required to pay a small sum, and to undertake certain obligations in regard to the employment of labour and the cultivation of land, before they were granted a title to it. A little later men were obliged to pay to the Crown £1 per acre for land, or whatever was adjudged to be its fair value. But the point I wish to emphasize is that every land-owner has given some consideration to the Crown for his land. I suppose that nearly all those who obtained land in the early days have parted with it, in addition to which, we know that the values of land have from time to time increased, so that the people now holding it have paid for it its full capital value. Is it right to impose upon the individual who has paid the full market value for his land a tax which will penalize him ? I say that we ought not to levy a tax which will ultimately become confiscatory, and which might well be designated a robbery of the individual. This Parliament has no right to impose such a tax. We ought not to attempt to touch the lands of the States unless it is absolutely necessary to do so in order to obtain revenue.
– Cannot the States levy heavy probate duties.
– Will the honorable senator promise to lend his assistance in that direction if he should ever re-enter State politics ? I repeat that, when the higher rates are reached, the tax will prove confiscatory in its character, in addition to which it will not give effect to the professed desire of the Labour party. If they consider it necessary to legislate for the bursting up of large estates, why do they not ask the people to amend the Constitution so as to empower us to deal with the holders of that particular class of property? The Bill which is now before us is, upon its face, a fraud. The Government are seeking to impose a tax for one purpose, whilst professing that it is being levied for another purpose. The tax is being levied ostensibly for revenue purposes, but really for the purpose of bursting up large estates.
– We maintain that it will accomplish both -purposes.
– Is it just to impose upon the individual who has paid for his land a confiscatory tax, whilst allowing the man who rents land from the Government, and who possibly makes very much more out of it than does the freeholder, to go absolutely free? Honorable senators opposite talk about the large areas of land that are locked up from settlement. One would imagine, from hearing them talk, that Australia was a very small country, in which all the good land was occupied. But I hold in my hand Mr. Knibbs’ Commonwealth Year-Book for 1909, in which he publishes a diagram showing the condition of the public estate. The diagram shows, by means of black marks, the area that has been alienated in each State. Victoria may, perhaps, be called a shocking example in this respect, although there is still a large area of unalienated land in this State. But a very large area has been alienated on account of its adaptability for profitable use as freehold property. In New South Wales, however, the black line is much thinner, and in Queensland and South Australia it is thinner still. The line for Western Australia is quite a fine one. I find that, of the total area of the Commonwealth, only 4.69 per cent, has been alienated, whilst 1.93 per cent, is in process of alienation. Lands held under lease account for 40.68 per cent., and the unoccupied lands are 52.70 per cent, of the whole. So that more than onehalf of the lands of Australia are absolutely unoccupied. I do not suppose that there is a single honorable senator who would urge that land should not be held under lease or licence. Many people who occupy land under a freehold tenure were practically forced to do so. Others purchased land because they considered that the prospects were sufficiently remunerative to justify them in investing their capital in this manner. There are still, however, millions of acres of land in this country that are open to be selected. Senator Millen has referred to the western lands of New South Wales. As he observed, pressure was actually put upon leaseholders in that country to induce them to acquire freeholds. Much of that land is only fit for pastoral purposes, and many of the estates are absolutely overrun by rabbits.
– The rabbits have been a blessing to very many people in Australia.
– You have to strike a balance as between advantage and disadvantage to determine when a pest becomes a blessing.
– The rabbit goes with Radicalism, and the cow with Conservatism as a rule.
– Much of the land in the western division of New South Wales would be absolutely useless for agricultural purposes. It could not be employed for any other than pastoral purposes. We also have to remember that Australia derives millions of pounds annually from the wool produced on these outlying estates. It is not true to say that the lands are not put to any use at all. Many of them are being put to the best use for which they are fitted. Enormous areas of land would not be employed at all were it not for our great pastoral industry. Whatever taxation the Government choose to impose, they should, at all events, impose it in the full light of information as to what is being done with our occupied lands. I am well aware that a country is all the better for sustaining a large population, and, of course, we have to aim at that in the future. But the States have not been oblivious of their duty in that connexion. They have made mistakes ; but at the present time two or three of them are taking steps to resume land which is considered to be suitable for agricultural purposes. They are settling people upon these lands, and are enabling them to pay for them on terms ranging over thirty or forty years.
– And thereby bumping up the value of adjacent estates.
– That may or may not be the case ; but it is evident that as the population increases, the value of properties must increase by what honorable senators opposite are pleased to call the “ unearned increment. ‘ ‘ That is not at all “a bad thing. If I take up a property, and spend money upon it to improve it, I am surely not committing a crime. On the contrary, I am finding work for the people. Am I, then, to be penalized, as the Government are penalizing people by means of this Bill ? The Bill is not intended to secure the unearned increment to the community. If it were it would take pains not to tax the value given to property by the expenditure of private money. If a man has paid £1 per acre for land, he is not to be allowed a deduction for what he has paid to the Crown. The Bill simply says that if a man has a property worth . £50,000 he shall pay a heavy tax on it, with the object of making him break up his estate, although it may be absolutely useless for any other than pastoral purposes. He may not own an acre which is fit for agriculture. The experience of some pastoralists in New South Wales has been pretty rough. An experiment was made some years ago to induce people to take up 3,000 or 4,000 acres of land in the back country. Some deluded individuals imagined that they could go in for mixed farming. But they soon found that the areas were too small for pastoral purposes, and not good enough for agriculture. Yet that class of land will be taxed under this Bill. Senator Rae knows the western district of New South Wales very well. He knows what unsatisfactory country it is, as a rule. Of course, in good seasons, it is excellent pastoral land, as long as it is not overstocked ; but one good year may be followed by four or five very bad ones.
– That is nearly all leasehold land.
.- Much of it is freehold. It necessarily became freehold, because the occupiers had to secure the advantage from the improvements they had made upon it. It is quite useless for settlement purposes. Yet, under this Bill, land of that kind is being treated as though it would be an advantageous thing to break up all aggregations of estates to encourage settlement. Then consider how the Bill deals with city lands. There is, undoubtedly, land in the capital cities of Australia which is worth a large amount of money. Considerable sums have been spent in erecting warehouses, offices, and shops upon it. It has been for the benefit of every individual in the community that those buildings should be erected. Of course, the owners derive large revenues; but when a man spends his money, he naturally expects to get a return from it. Does the poor man expend his labour without expecting a reasonable return ? The working man who. has not a sixpence in the bank, or a square yard of land, nevertheless has something that is valuable to him in his labour, and: he expects to be paid at market rates by those who purchase labour from him. In. exactly the same way a man who spends money in putting up a building in the city expects to obtain a reasonable return from it. There ought never to be, as there unfortunately is, any conflict between capital and labour. What, after all, is capital? lt is only the accumulation of effort and labour.
– I think that the man who does the labour gets very little of the capital.
– That may be so, but how many of our wealthy men have raised themselves from . a most humble position when they had nothing more than their brains, muscles, and energy to depend upon.
– I laboured hard for thirty years, and I was poor all the while. When I knocked off as a labourer I was as poor as I was when I started.
– What was the position of the honorable senator during the thirty years? He was able, although he had only a small income, to ‘ive comfortably and respectably, and to maintain, rear, and educate a family. By means of effort and energy he has raised himself to a very honorable position in this Parliament. I give him all credit for bettering himself.
– Not while I was in that position.
– No, but the honorable senator laid the foundation for the position which fie now occupies.
– It was not until a grateful country recognised my qualities that I bettered myself.
– The honorable senator got the unearned increment.
– What I want Senator de Largie to realize is that during the period of hard work he laid the foundation for a better position in the future. He has attained a better position because of the way in which he attended to his work when he was in poorer circumstances.
– You are forfeiting that he had the good luck to be a Scotchman.
– Senator de Largie commenced to work when he was a young man, and by the application of energy and perseverance he improved his position. A man who has bettered his position is entitled to consideration, whether it was due to his money or his labour. In Australia there are hundreds of men who, when they started life, were very poor, but who to-day are. very wealthy. They acquired their wealth honestly and under the laws of the -country.
– I worked in Scotland for two and a half years for £25.
– The honorable senator is none the worse.
– Perhaps that is why he left Scotland.
– In regard to city lands, this Bill imposes a very large tax on landowners. It may be justified, honorable senators may say, because revenue is wanted. That is not how they started with their Bill. The idea of obtaining revenue, in this way has grown upon them through the necessities of the Constitution.
– We have to meet the new requirements of the Commonwealth.
– I admit that we have launched out to a considerable extent, and require additional revenue, but if the honorable senator had had to introduce a Bill solely for the purpose of obtaining revenue, it would have been of a different character from this one. What is the justice of imposing a tax of 6d. in the £1 on one property in the city and a tax of id. in the £1 on another property? My honorable friends will not advantage themselves by taking that course. If they impose a fair rate of taxation, and apply it to every property in the same way, subject, of course, to an adequate exemption, then they may justify the measure from the stand-point of taxation by saying that the expenditure is growing, that we are building a navy, and, instead of borrowing money for the purpose, and providing a sinking fund for its liquidation within a reasonable period, we are going to pay for it out of the Consolidated Revenue Fund.
– Do you want to leave nothing for the States ? Are they to get nothing?
– The honorable senator is trying to take away everything from the States.
– No, we leave them all properties below £5,000 in value to tax.
– I do not say whether the exemption should be £5,000 or £500. I have heard honorable senators urge that it ought to be reduced to £500, and even swept away.
– We want the States to get a little revenue from land taxation.
– Either you want to burst up estates by means of this tax - a thing which you have no right to do under the Constitution - or you are imposing it purely for revenue purposes. Your object ought to be to make as few cases of hardship as possible, and not to have cases brought up of persons being so far penalized by the tax that they will be placed in a state of bankruptcy or insolvency.
– Poor fellows !
– If the honorable senator had the misfortune to die and to leave behind him some persons who were entirely dependent upon a small annuity or an income out of a property, and the State came along and took away that means of livelihood, it would be a case of ‘ 1 poor fellows.”
– You want to tax the big man in the country, but not the big man in the city.
– No, my honorable friends have got themselves on the horns of a dilemma. This Bill was never put before the people or introduced as one to burst up big estates.
– Oh, no.
– The honorable senator says that he advocated the Bill for a different purpose.
– For both.
– There may be isolated instances in which honorable senators did say that this measure would have a twofold effect, that it would enable us to get revenue and, at the same time, to burst up estates. The bulk of those who made that statement probably said, “ Our object is to burst up big estates, and, incidentally, we shall have the means of getting a fair amount of revenue for the purpose of carrying on the Commonwealth services.”
– I said that the object was to raise money for defence purposes.
– The land tax is not ear-marked for those purposes, and I am very glad that it is not. Whatever money is spent on defence should come out of the Consolidated Revenue Fund, because, by that means, every man, however poor or small his contribution to the revenue may be, has contributed his proportion. Some persons say that the big land-holders are interested in this question, but I hold that every man in the country is interested in its defence. There is no man, however poor he may be, who is not vitally interested.
– Not to the same extent.
– The country gives a man shelter, and enables him to live under a free Constitution, instead of possibly being placed under the yoke of a foreign Power which would not treat him in anything like the same way.
– Will you say that a working man in a four-roomed cottage has as large a stake to pay for the defence of the country as a man who occupies a twenty-four-roomed mansion in, say, Sydney ?
– The poorest man has as much stake in the protection of his life as has the richest man.
– Of his life, but not of his property.
– He has an equal interest in the protection of the liberty of his wife and family. The man who lives in a twentyfourroomed mansion has to contribute a great deal more than does a man who lives in a four-roomed cottage. Each contributes proportionately to the revenue. The man in the cottage has a wife and family to look after, while the man in the mansion has not alone his wife and family to look after, but a large number of persons in his employ, and his money enables some men to live comfortably in four-roomed cottages.
– He is not looking after them. They are looking after him.
– Whatever the employes are doing they are paid for their services. Whatever position we may hold in Australia we are paid for our services. Why do I work in my profession? It is to earn money. I do not feel myself under a compliment to my client; nor does he to me. We all have to work ; and depend upon it, there is just as much happiness and comfort in a man’s four-roomed cottage as there often is in a great palace, the owner of which has thousands of pounds to spend on conveniences and luxuries. You can never get away from this fact, that every man in the country has a vital stake in its defence and should contribute his fair proportion towards it.
– The Defence Act calls on every man to give equal service.
-Colonel Sir ALBERT GOULD. - It makes no distinction between men; in other words, a man who lives in a mansion is as liable to serve as is a man who resides in a four-roomed cottage, and I have no doubt that one is just as willing to so serve as is the other. Under this Bill, a man, if he is an absentee, is to be penalized because he spends his revenue out of Australia. 1 can understand how this idea of taxing absentees arose. There is an impression that a man who came to this country, and acquired a large number of properties, went abroad to live, and draws his money from here for the purpose of administering to his comfort elsewhere, is not a particularly good citizen. But who are to be treated as absentees under this legislation? Men who may never have been in Australia are to be so taxed. This Bill will tax men who are not solely dependent on Australia for their income, but who have invested money in Australia.
– At the invitation of Australia.
– Not in every instance. I know some absentees who, in the early days, did very well here, and then cleared out.
.- That is not the case with the bulk of these persons. For years, we sought to attract as much foreign capital as possible for the purpose of opening up and developing the country. We did not borrow money from persons at the other end of the world for the pleasure of simply taking it and giving them interest, but for the purpose of opening up the country. What would have been the position of Australia to-day if we had never borrowed money ?
– Is the borrowed money invested in land?
– We borrowed £250,000,000 for the purpose of opening up and developing the country.
– How much have we sent out in interest?
– I suppose that on an average we have sent out 4 per cent.
– We have sent out more than we brought in.
Sitting suspended from 6.30 to 8 p.m.
– I have said that the money introduced to develop Australia has been the very life’s blood of the country. I have mentioned that some £250,000,000 have been advanced to the State Governments for the purpose of carrying out public works, the most important of which are the railways extending throughout the different States. This railway construction has assisted materially to develop Australia. With our limited population and limited monetary resources it would have been quite impossible for us to carry out these great works, and the fact that most of the railway systems of the States are now paying concerns is an evidence of the great value they have been in the opening up of the country. I may be allowed to say in passing that I think the State Parliaments would adopt a wise course if they decided upon railway extension in advance of settlement in good country suitable for settlement. Hitherto the policy followed in Australia has been to ask whether a railway will pay before it has been decided to construct it. A very different policy has been followed in the United States, Canada, Argentine, and in almost every other country, which, during the last half-century, has been progressive. The policy followed in those countries has been to push out railways in advance of settlement, and thus make provision for the introduction of population and the settlement of people on Crown lands. There are vast areas of Crown lands in Australia on which, given facilities of communication, people might be settled under conditions which would enable them to make excellent homes, and do well for themselves. The greater portion of the £250,000,000, to which I have referred, belongs to people who made their capital elsewhere, and looking round for investments, regarded the Colonies of Great Britain as affording the best security for their purpose.
– The Bill does not propose to tax those investments.
– I am quite aware of that, but I remind the honorable senator that there has also been introduced a very large amount of private capital which has been devoted to private purposes, and the Bill does propose to tax that capital.
– Do not the British Government tax Australians who have invested capital in England, and do they not tax money invested in Australia by companies registered in England?
– A company registered in England may legitimately be made liable to British taxation. A company registered in Australia is, presumably, an Australian company, and should be treated as such. I do not propose to defend the taxation policy of Great Britain just now, and if it were necessary for honorable senators to discuss that policy seriously on this Bill, it would be a long time before we could get through with the second reading. Dealing with the amount of capital introduced into Australia I may say that I have here the latest publication of Coghlan’s statistical account of Australia and New Zealand. It is dated 1903-4, and I regret that I have been unable to get later information of this character, although I believe some is available. At page 520 of this work, speaking of the indebtedness of the States of Australia to Great Britain, I find the statement made -
At the opening of 1871, these States stood indebted to Great Britain as follows : -
On account of State and municipalities, £26,520,000.
New Zealand, £7,842,000.
Private investments in 1871 represent £33,090,000.
From 1871 to 1903, the increased indebtedness on account of State and municipalities was £170,000,000, and on private investments £114,000,000. In the middle of 1904, the indebtedness of Australia to British and foreign creditors stood as follows : -
On account of State, £188,345,000.
On account of municipalities, £8,221,000.
On account of private investments, £147,372,000.
The figures just given are irrespective of the amount brought by persons taking up their abode in Australia. The amount of such money is very considerable as will presently appear.
A statement of the amount of money introduced in that way is given later, but I do not propose to refer to that, because those who bring money into the country and reside here participate in the advantages, and should be subject to the disadvantages, common to every citizen of the Commonwealth. In the middle of 1904 no less than £147,000,000 of outside capital was then invested in Australia on private investments. The greater portion, if not the whole, of this money came from Great Britain. We are asked in this Bill to impose taxation upon” the owners of that capital in excess of the taxation which they would have to bear if they were residents of Australia. I wish honorable senators to realize that Australia requires not only population from other parts of the world, but as much capital as we can induce people outside of this country to invest in it. We should never have attained the position we occupy to-day had it not been for the large amount borrowed by State Governments and private individuals from the owners of capital abroad.
– How much gold have we sent out of the country?
– I do not know that that is a very pertinent question, but I may say that we have received something in exchange for all the gold we have sent out of this country. Though Australia was opened for settlement over 100 years ago we have now less than 5,000,000 of a population, and out of our own resources we should have been quite unable to open up and develop Australia as it has been opened up and developed since it was first settled. Without the assistance of still further outside capital and a largely increased population, we cannot hope to make Australia the great country which we all believe it is destined to become. We all recognise that we cannot hold this country for ourselves or Great Britain, and cannot expect that it will continue to be a White Australia, if we are not supplied not only with population, but with capital from outside sources. But this Bill proposes to penalize every man who sends capital to Australia for investment.
– Only one form of investment.
.- That is perfectly true.
– How long will that last?
– Just so. Outsiders will consider our legislation as an indication of what we are likely to do in the future. Although I am unable to give particulars of the amount of foreign capital invested in Australia at the present time, I may say that a short time ago I read an article which appeared in one of the financial reviews published in Great Britain in which a reference was made to the amount of money sent from Great Britain to Canada, Argentine, Australia, New Zealand, and one or two other countries. I cannot recollect the exact figures quoted, but I remember being struck with the fact that during the period of twelve months, under review, the amount sent to Australia was very much smaller than the amount sent to either the Argentine or Canada.
– Those countries are poorer thou Australia and need the money more.
– Argentine is a country of immense resources, with a much larger’ and more rapidly increasing population than that of Australia. Sydney and Melbourne have each something like 600,000 people, but in Buenos Ayres there are over 1,000,000 people at the present time. Whatever may be the condition of Argentine, we know that large numbers of people are going to that country and good British money is being sent there for investment. We are accustomed to regard Australia as a far better country for the intending settler than is Canada. We have a better climate and generally better conditions, whilst freights to the Old Country from Australia have latterly been so much reduced as to place the settler here almost upon an equality with the settler in Canada, particularly where the latter has to transport his produce over a great length of railway. I want honorable senators to realize that it is a suicidal policy to penalize any form of industry or investment into which people outside are willing to put their capital. I do not ask that people outside who have investments in Australia should not pay a fair share towards the cost of government in this country. I think that they should be asked to pay what our own people are asked to pay, but no more.
– Our own people have to pay indirect taxation, which the absentee’ escapes.
– The absentee must pay indirect taxation in the country in which he lives.
– We get no benefit from that.
– Will the absentee invest his money in Australia if he can invest it to greater advantage in the Argentine or in Canada? Certainly not. He will invest it where he can obtain the best return from it.
– The absentees have done very well out of Australia.
– They have; and I hope that they will continue to do so, because while they are doing well, Australia will also be doing well. I have always regarded this form of taxation on absentees as a most undesirable one, and one which is calculated to inflict injury upon the country. If we possessed a teeming population, the position would be entirely different. But ive have a very sparse population in a country which is capable of accomplishing great things. Yet one of the first acts of the present Government is to penalize the individual who wishes to assist us to develop our resources, while at the same time assisting himself. The Vice-President of the Executive Council described this Bill as one of the most complete pieces of political machinery which could be devised, and he added that the Government would not permit any amendments to be inserted in it.
– I did not say that.
– That is practically what the Vice-President of the Executive Council said. At any rate, that is what the newspaper reports, and, indeed, the Hansard report, conveyed to my mind. He said that he intended to resist any amendment of the Bill.
– Any amendment relating to the principle which is embodied in it.
– I am very glad to hear that the Vice-President of the -Executive Council is prepared to accept amendments upon matters of detail, thus following the example of his colleagues in another Chamber. Their action proved very much to the advantage of the Bill. I hope the VicePresident of the Executive Council will realize that this measure is by no means perfect, even now. I remind him that in another place the Government experienced considerable difficulty in dealing with the taxation of leases. There are innumerable instances in which land has been let for a small ground rent, the lessees have afterwards sublet, and the sub-lessees have again sublet. The New South Wales Parliament experienced a similar difficulty when it was dealing with land taxation. There, the position presented such a maze that special provision had- to be made giving to the Commissioner of Taxes plenary powers. Another provision in the measure which will require very careful consideration is clause 64, which relates to cases of hardship. That clause reads - (1.) In any case where it is shown to the satisfaction of the Commissioner that a taxpayer liable to pay land tax has become bankrupt or insolvent, or has suffered such a loss that the exaction of the full amount of tax will entail serious hardship, a Board consisting of the Commissioner, the Secretary to the Treasury, and the Comptroller-General of Customs, may release such taxpayer wholly or in part from his liability, and the Commissioner may make such entries and alterations in the assessment roll as are necessary for that purpose. (2.) The Commissioner shall be the Chairman of the Board, and the decision of the majority shall prevail. (3.) The Minister shall cause to be laid before both Houses of Parliament as soon as may be after the close of the financial year a full statement of all cases in which, and the grounds on which, liability has been so released.
That is a very dangerous power to place in the hands of any person. But I dare say that the Government felt that many difficulties will be encountered in administering theAct. Infinite difficulties will be experienced in its administration, apart from cases of hardship. For instance, some lands have been leased for long periods at very small ground rentals, and these persons - asI have already pointed out - have leased to others, who in turn have again sub-let.
– There are provisions in the Bill dealing with such cases.
– But they are entirely inadequate. In saying that,I am not merely giving utterance to my own opinion, but to the written opinion of one of the best conveyancing lawyers in Sydney. Clause 64, I repeat, provides for the release of a taxpayer from the payment of the tax in case of hardship. If a land-owner becomes bankrupt or insolvent, he loses the whole of his property, subject to such liabilities as exist upon it. But if the tax were made a charge upon the land-
– The clause will pro vide relief to his creditors.
– But it will afford no relief to the bankrupt or insolvent taxpayer. The debtor, of course, gets his relief as soon as he enters the Bankruptcy Court, and his estate is sequestrated. But why should we leave if to a lawyerto discover that the payment of a debt clue by a bankrupt to his creditors does not release him of his indebtedness to the Crown?
– If the Crown is a creditor, it should share in his estate in common with other creditors.
– The Crown usually takes the lion’s share.
.- Yes; the theory is that the Crown has first claim upon an insolvent’s estate, if he is in any way indebted to it. I would also point out that there are properties which are mortgaged in the way that has been pointed out by two or three senators who have cited typical cases.
– The honorable senator means ridiculous cases.
.- The cases quoted by Senator Cameron yesterday-
– One instance was that of a mortgage of £12,000 on a property valued at £14,000. Is not that a ridiculous case?
– It may be in the honorable senator’s opinion ; but we must bear in mind that properties often materially depreciate in value. Take the case of a man who obtains a loan on his property to the extent of two-thirds of its value. Let us assume that its improved value is £100,000, and that he raises a loan of £60,000 upon it. Let us further suppose that the improvements are worth £10,000. That man will receive no exemption from the payment of the tax in regard to the £60,000 mortgage upon his land.
– To the extent of that £60,000 he is not the owner of the land.
– Exactly. He has a margin of £40,000 upon which to come and go. That is a transaction upon which any business man might legitimately embark. With good seasons he would have every prospect of materially reducing his mortgage and of becoming worth much more than £40,000. But in this Bill the Government say to him, “ We are not only going to tax you on the £60,000 mortgage on your property, but we intend to charge you 6d. in the £1 upon the remaining £40,000.” Of course, it may be urged that if such a man had been content to purchase a property for £40,000, he would have had a smaller amount of taxation to pay, and the property would have been his own absolutely. That is perfectly true. But there is hardly a man in the country who is not desirous of being progressive. I should consider it very good business if I could obtain a property worth £100,000 by paying £40,000 down upon it and by borrowing the remaining £60,000. But when this tax is levied upon such a property it will cut down the value of the equity of redemption to such an extent that it will be extremely difficult for a man to struggle through and make ends meet. While we experience splendid seasons, and whilst good prices are maintained, he may succeed. But the history of Australia teaches us that, owing to droughts, floods, and fires, our settlers experience reverses, so that it would be impossible for him to recover himself. If we desire to burst up big estates or to levy a land tax for revenue purposes, we must take all these things into consideration. The Government should make provision so that these people shall not be penalized merely because they have shown a little more enterprise than -have the ordinary citizens whom we meet every day. If such an amendment as I have outlined were made, I am sure that it would be acceptable to the people of the country, and we should, to a large extent, get rid of those complaints about the harshness of the tax and the unjust incidence of it of which we have heard so much. No sophistry can justify the Government in treating some landholders as they will be treated under this Bill. If a tax is to be levied, it should be proportioned to a man’s means, and not to his poverty, as in this case. When we get into Committee the Government will find that this is not so perfect a piece of legislation as the Vice-President of the Executive Council claimed. It is not necessary for me to go through other portions of the Bill in order to point out inequities and the necessity for amendments. There are some clauses in it that are almost as difficult to understand as a Chinese puzzle. I remember reading that complaints were made by taxpayers in England of their inability to understand what was demanded from them under an Act recently passed by the Imperial Parliament. They were told that they could get whatever information they desired from the Government offices. But when they went there, they found that the Government officials were just as much puzzled as themselves. That measure was condemned in one of the English newspapers as excessive taxation levied by an unscrupulous party upon their political opponents. I do not want to have it said that legislation passed by this Parliament is deserving of such aharacteriza tion. Probably there is hardly a man in the whole of this Parliament who will be materially affected by the Bill.
– What about Senator Cameron ?
– What about King O’Malley?
Senator Lt.-Colonel Sir ALBERT
GOULD. - I- am quite content that Senator Pearce shall explain the position of his colleague, the Minister of Home Affairs. I am afraid, however, that that gentleman will not be prepared to tell us the value of his estates.
– It is something under £500,000.
– King O’Malley is quite prepared to pay whatever taxation is due from him.
– We cannot get away from the fact that, whatever may be the effect of the tax, it is going to be levied upon a limited number of persons, very few of whom are directly represented in Parliament at present. There may be a few members of this Parliament who will feel the effects of it, but, nevertheless, it may be described, on the whole, as an attempt by the “havenots “ to get at the “ haves.”
– We are equalizing things a bit.
– I have heard certain remarks that show the feeling actuating the minds of some people on this subject. They say, ‘ While we have the chance, we are going to take the wealth away from those who have it.” Remarks of that kind show the bitterness which exists amongst some of the supporters of the Bill, both in Parliament and outside. The Opposition are fighting against the injustices and the inequities created by the measure. We say that it is a distinct blow at the capital which is necessary to enable Australia to develop her resources. It bears upon the face of it the appearance of a class tax. The Ministerial supporters talk about their mandate. What was their mandate, and what proportion of the electors gave it to them? Senator Walker has read statistics taken from official documents, showing that, as far as the other House is concerned, the men in control of affairs there represent a less number of votes than were recorded for their opponents. I do not say that the Government supporters obtained a less number of votes than the Liberal candidates, but they, nevertheless, polled less than half the total number of votes recorded. In the Senate we find that a bare majority of votes was given for the party now in power. When honorable senators talk about their mandate from the country one might fancy that Australia had been swept from end to end by a wave of enthusiasm for a measure of this character.
– So it was.
– Which ought to rule, the minority or the majority?
– Under our system of government the majority must rule, but, at the same time, it is worth while to point out that under that system 100,000 people may return the majority, whilst 99,000 may vote on the other side; and there is no reason why a majority of that kind should do a gross act of injustice to their opponents.
– This Bill does an act of tardy justice.
SenatorLt.-Colonel Sir ALBERT GOULD. - The Bill is a trick upon the Constitution. Its supporters say that they want to break up the big estates, but they know that under the Constitution they have no right to interfere with those estates. The proper course would have been to appeal to the country to enable an alteration to be made in the Constitution.
– The bursting-up is merely incidental to the Bill.
– Originally, we were told that the taxation aspect of this policy was incidental. Now we are informed that the reverse is the case, and that the Bill is intended for taxation purposes.
– We want more revenue ; and are we to derive that from the poor or from the rich?
.- People should pay according to their ability, but the rich man ought to receive an equal measure of justice with the poor man. I do not propose to detain honorable senators at greater length. I have had an opportunity of pointing out the stand-point from which . I view this matter. In order that I may not be misunderstood I reiterate that I am not an opponent of land taxation if it be necessary for the purpose of obtaining money for the affairs of the country. But there is no need to manufacture expenditure in order to justify a tax, as I consider has, to some extent, been done. I say, moreover, that the Commonwealth should not resort to direct taxation unless compelled to do so in order to carry on its operations. The original intention of the founders of the Constitution was that the indirect taxation system should be absolutely within the power of the Commonwealth, and that we should not superadd to it a system of direct taxation, resort to which must be to the detriment of the States. When we resort to taxation such as is now proposed, we are going to the very extreme, and are virtually withdrawing from the States the means which lie open to them of deriving a reasonable amount of income from land taxation. I also complain that no reliable estimate has been furnished to us of the probable results of the tax. In New South Wales a tax of1d. in the £1 on land realized something like £400,000 a year. A Commonwealth tax, ranging up to 6d. in the £1, will probably realize a much larger sum than the Government have estimated.
– The honorable senator must recollect that, under the New South Wales tax, there was a different exemption.
– No doubt that makes a considerable difference; but it is nevertheless to be regretted that the Government did not furnish us with a better estimate of the amount of money to be realized. No matter how difficult or complicated a tax may be, a Government owes it, not only to Parliament, but to the country, to explain how it has arrived at its estimate. But, in this case, we have been furnished with no explanation. There are shire councils,or similar bodies, in existence from one end of Australia to the other, and theirrevenues are derived from the unimproved value of land. There would not have been much difficulty, if an appeal had been made to the State Governments, in obtaining information as to how much money was being realized by those local governing bodies. The. calculation would have been comparatively easy, because the Government could easily have prepared forms upon which could be shown how much land in the areas governed by these local bodies was held in areas under £5,000 in value. If an inquiry of that kind had been made, we should have had a somewhat accurate idea of the revenue that will probablybe raised. As originally introduced to Parliament the Bill was exceedingly crude, requiring a tremendous amount of licking into shape. It has received that attention, thanks largely to the Opposition, in another place. If it has been fashioned into a working measure, that is largely due to the fact that a patriotic Opposition elsewhere endeavoured - and I arn glad lo say successfully - to make very large and important amendments in it.
– The honorable senator who has just sat down has claimed credit for the Opposition in another place for improvements made in this measure. With our constitutional limitations, it is impossible to make a measure of this description perfect; but I do submit that, within the powers we possess, the Bill is entitled to be described, as Senator McGregor stated in his speech, as one of the most perfect pieces of political machinery ever introduced to a _ deliberative assembly. In connexion with most of the progressive measures which have been brought before this Parliament, by some means or other, we have always had brought under our notice the poor widow, or if not the poor widow, the poor shopkeeper. We have discovered now two different classes of poor persons, namely, the poor pioneer and the poo- landlord. We were told to-day by an honorable senator, who almost trembled at the statement, that some of these pioneers had gone out and bravely fought against the blacks to get possession of the soil. Although I have .always admired the sturdiness and the determination of the old pioneers, still, I never quite realized before to-day the position of the men who so kindly came to Australia and took possession of as much of its soil as possible, and most of whom are now living in ease and luxury, not as the result of their own energy and industry, but as the result of the growth of population and the energy and industry of the great masses of the people on the one hand, and the enterprise of governments, the construction of public works, and the expenditure of borrowed money on the other hand. All these things have gone to add to the unearned increment and wealth of the poor pioneers who, we are told, are likely to be forced into the Insolvency Court.
– Many of them did not even pay their passages out.
– I admit that.
– Very many of them did go into the Insolvency Court, quite true. It is also true that in this
– That is country some men have been in gaol ; but it is not true that all men are going to be in gaol. It is not correct to assume that, because an odd individual has failed, perhaps through bad management or ill fortune, that land has not been the best investment we have had in Australia. I desire to say a few words regarding the pioneers. I hold in my hand a very interesting publication, from which I propose to read some extracts for record in Hansard, as an illustration of the sort of martyrdom which has been suffered by the poor pioneers, who, as Senator Fraser said to-day, were prevailed upon by the Crown to take up land because it wanted money. It is dated so far back at 1879, since when land values have increased very greatly -
The ground in Collins-street west on which the Criterion Hotel formerly stood (allotment 16 of section 4 on original plan), was sold, on the rst June, 1837, by the Government to Michael Pender for the sum of £19. The same allotment was resold about a year ago to the Union Bank for ^33,000, . being at the rate of about ^500 per foot frontage to Collins-street. As the buildings were removed immediately after the purchase, this sum may be taken to represent the net value of the land. This is no less than 173,584 per cent, increase in fortyone years -
– Did the pioneer who paid £19 get the £33,000
– I am quite aware of what is in the honorable senator’s mind ; and I shall deal with it in a moment - or at the rate of 4,233 per cent, per annum.
The pioneers, who we are told suffered a martyrdom, saw their lands increasing in value at the rate of over 4,000 per cent, per annum. Let me cite another typical case -
Another original allotment (16 in section ;), in Collins-street east, was sold by the Government to John Hodgson, on the rst November, 1837, for ^42. Two-thirds of this, or 44 feet frontage, was sold, about a year ago, to the Deposit and Mortgage Bank for ^17,600. This is an increase on the original price of 62,757 per rent., or at the Tate of 1,404 per cent, per annum.
That is the experience of another poor, suffering pioneer.
– Will the honorable senator quote a few cases where persons have bought allotments in country towns?
– Yes ; any number of them.
– I know “plenty of cases where men who gave £10 for an allotment will be glad to take 10s. for it.
– I am quite aware of that; and if the honorable senator will allow me to place in Hansard a statement of the sufferings of the poor pioneers, I shall deal with that aspect of the question which he has in his mind, namely, that in many cases the land has changed hands.
– How much did the pioneer get for the land for which he paid £19 ?
– I am not in a position to state what he received; but during the period he held the land, it increased in value at the rate of over 4,000 per cent, per annum.
– That does not appear.
– Yes, it does-.
– He might have only got £5 for it.
– If the honorable senator desires me to trace the history of the land through a period of fortyone years, and say in what year the gains took place, I am not in a position to do so.
– No one would expect that. The honorable senator called the man a suffering pioneer, but he gave no evidence as to whether he was or not. The man may have got only £5 for the land.
– I am merely showing-
– That the land has increased in value.
– I want to show more than that. To-day, Senator Fraser almost burst into tears at the thought of the sufferings of the early pioneers who are to be touched by this land tax.
– He was speaking of the squatting pioneers.
– He was speaking of all landlords.
– No; he was speaking of the men who went out to the far west and to the far north.
– I understood, when Senator Fraser was speaking, that the opponents of this measure did not mind so much taxation as the injustice of putting a tax on city lands which could not be broken up. I do not mind the interjections, but I should like to know what their object is, so that we might have a chance to deal with it. At present, I am dealing with the statement which Senator Fraser made to-day. According to this book -
On the opposite side of the same street, an original allotment (a of section 12J was sold by the Government to Henry Batman, on 1st June, 1S37, or *£I&- A portion of this- namely, 36 feet frontage - was sold, about two years ago, to Messrs. Briscoe and Co. for £14,466, or over £500 per foot. This is an increase on the original price of I47,238§ per cent., or at the rate of 3,678! per cent, per annum.
– At present, our trouble is - What are you going to do with Briscoe? I dare say it is his trouble, too.
– I do not intend to deal with my honorable friend’s trouble until I have dealt with the troubles of the early pioneers.
– Why should you punish a man who paid £50,000 yesterday for land because the pioneer gave only £10 for it sixty years ago?
– I shall let him go, and deal with his punishment or acquittal later -
The adjoining allotment to this on the east was sold by the Government, on 1st June, 1837, to Gilbert Marshall for £18; and 36 feet frontage of it was sold, four years ago, to Messrs. Glen and Co. for £19,000, being at the rale of £527 15s. per foot. This is an increase 011 the original price of 193,416! per cent., or at the rate of 5,089 per cent, per annum. The adjoining allotment on the east of this again was sold by the Government, on the 1st June, 1837, to Walter Synnot for £19. The same property was re-sold about a year ago, after the removal of all the buildings, to Mr. Andrew Lyell for £39,000, or at the rate of £590 per foot. This is an’ increase of no less than 184,110 per cent., or at the rale of 4,490^ per cent, per annum.
I have cited these few typical cases because I desire to show how the increased values came about. Coming down to more modern times, let me deal with the case which has been quoted, of Mr. Hordern, of Georgestreet, Sydney, who said that he was going to be ruined by this legislation, and that all sorts of things would take place. He happens to be one of my suffering pioneers.
– Is he not dead?
– Yes, but the estate remains. There are two things which never die - the land and the honorable senator’s interjections.
Two corner allotments, one at the corner of Bourke-street and Russell-street and the other at the corner of Little Collins-street and Russellstreet, were sold at Sydney, on the 14th February, 1839, to Anthony Hordern for £160 and £110 respectively, or £270 altogether. Four years ago the same allotments were sold by public auction for £67,000, inclusive of buildings, the outside value of which would not exceed £12,000. This is an increase of 20,270 per cent., or at the rate of 563 per cent, per annum.
– But the firm who got that money will not be taxpayers under the Bill.
– Yes, they will, and that is the trouble.
– No; because they have parted with the land, and, therefore, are not taxpayers.
– They have got others to take their place.
– That does not appear.
– I want to come nearer home. Some of these men did not altogether part with their land in the early days for a very small amount. Here is an instance which is very well known to most men -
The Theatre Royal in Bourke-street is a leasehold property, the tenants paying ^1,500 a year for the use of the land, which the original owner acquired for the sum of £91 4s.
There is a case in Melbourne where people, who never put a single brick on the land, but let it on a building-lease to a company which erected a theatre, have, year after year, taken £1,500 from it. Surely honorable senators will not claim that it was their enterprise or energy which gave that enormous value to the land? Let me cite another case -
The Victoria Arcade is also leasehold property, the owner of which pays ^1,300 a year for land originally costing ^98 16s. The Eastern Arcade is another leasehold, the ground rent of which is ^1,200 a year, the freehold having cost ^87 8s. But the extent to which the public are disposed to go in making substantial improvements on a leasehold tenure may be better illustrated by what has been done in the case of the Western Market.
There we have the other system by way of contrast -
On the 7th May, 1868, the City Corporation leased the Western Market (a grant from the Crown) to Mr. Henry Miller for a period of 21 years, the conditions being that he should erect substantial buildings, according to approved plans, and pay a ground rent of ^413 per annum. The terms of the lease have been strictly complied with, and the result is a pile of buildings which are an ornament to the city. In ten years from now these buildings will become the property of the Corporation, from which it will derive a handsome revenue.
I could quote hundreds of these cases in Melbourne and Sydney, showing distinctly that, instead of being suffering pioneers or martyrs, the men who acquired the land there in the early days, either as original proprietors or a few years later, have made thousands and thousands of pounds out of it, and in some cases still possess it. When we are asked to show some kindly consideration for these men, I remind honorable senator that they are not responsible for the capital value of these lands, and that it has been created by the energy of the people of this country. I was rather astonished to hear my colleague, Senator Fraser, say that in Victoria there are now no big estates. I leave other honorable senators to speak of the conditions in their own States. Senator Fraser would have us believe that, though at one time there might have been such a thing as land monopoly in Victoria, it is now done away with, and we have no big estates in this part of the Commonwealth. I wish, in answer, to put on record in Hansard a few of what the honorable senator apparently regards as small estates. It should not be forgotten that, as compared with the other States of Australia, with one exception, Victoria possesses a very limited area of land. But even here we find that the following persons have estates of the areas mentioned : -
– The Russells are in it.
– The only connexion I can claim with these Russells is that I believe one elector voted for me at the last election, in the belief that I was one of the members of this family. To resume the list -
These particulars are taken from the land tax register of the State of Victoria. They show that Senator Fraser was absolutely incorrect in saying that there are no big estates to-day in Victoria. In this State, we have twenty-seven people owning 1,500,000 acres of land between them. The extent of the area is not the only important, feature. The men who, in the early days, got possession of these lands, were astute business men ; and, as a result of their operations, in the State of Victoria to-day we graze sheep on the best agricultural land: and carry on agriculture on what is really only third or fourth class land. Honorable senators opposite continually refer to lack of business capacity in members of the Labour party. They claim to be of a rather superior order, and much more competent business men. But when they set out to mention particular instances to show the hardships which will be inflicted by this legislation, one after another refers us to cases in which a merely nominal income is derived from highly valuable property. I do not wish to impugn the accuracy of the figures quoted ; but, assuming them to be correct, the only conclusion that can be drawn from them is that the land-owners, whom honorable senators opposite claim to represent, have been so lacking in business capacity, as in the first place to give more for their land than it was worth, and are utterly incompetent to successfully mariage an estate.
– The honorable senator has ‘never been far from the Yarra.
– I have done some hard work in my time ; and I have little doubt that I could make as big a success of settlement on the land as the ordinary lawyer.
– The weakness of my honorable friends is that whenever an interjection is made, they try to be beastly personal. That is their only refuge.
– We have no weakness on our side. We are all strength, as will be seen when this land tax measure goes through. I see no reason why we should be other than candid in the matter. The people of Australia have sent us here to give them an effective land tax, and we intend to give it to 1hem. They are waiting with open arms for this measure, which will be for the benefit of Australia, and will increase Australian production. There is a history attached to this legislation ; and Senator Clemons to-day made a clever but evasive attempt to trace it. The lands that got into the hands of the early pioneers became enhanced in value as the result of the introduction of population. The State laws, which many of our present- day politicians had a hand in making, proved such a failure that large aggregations of land took place in this and in every one of the States. Lands suitable for settlement became so valuable that in most of the States there was a condition of land hunger, without any land adjacent to railways available to meet the requirements of the people for land settlement. There were Liberal Governments in power in the various States, and what they did was to go into the open market to purchase land, hoping to buy it at a fair price and pass it on to those desiring to settle on it at a slightly increased price. The State, with unlimited funds, was thus added to the competitors in the land market; and this led to a land boom. In Victoria to-day, land in the country districts is at boom prices; and it is practically impossible for any man to get agricultural land at a price at which he can work it profitably.
– What will happen when there are 5,000,000 people in Victoria ; will not the value of land increase as the population increases?
– Of course it will.
– What are honorable senators going to do, then? The exemption line must come down.
– If the honorable senator is prepared to sit down and wait until land has so increased in value that a man will need to be a millionaire to secure 50 acres, I can tell him that I am not, nor is the party to which I have the honour to belong.
– Nor is the public.
– Nor is the public, and it is master of the situation, after all. Honorable senators can go into eastern Gippsland and they will find that land which is distant from a railway 50, 60 and 120 miles, recently brought is much as £no an acre. In the Western District in this State, land has brought £120 an acre. Recently in Camperdown, where land is used almost entirely for grazing, and the plough is hardly ever put into the soil, land brought an average price of £68 an acre. Will any honorable senator tell me that our young men can hope to succeed in settling upon the land if they have to pay such prices? If we go to the Goulburn Valley we shall find that land is there selling at from £20 to £50 an acre; and it is possible to-day to get only the poorest quality of land in Victoria for agriculture at £20 an acre. In nearly every case the man who requires land for settlement is the small mau who wishes to get a start in the country, and he is quite unable to pay the prices now ruling for land. This has become more than a Slate question; it is now a national question. It is because I believe, in common with other members of the Labour party, that this land tax will he effective in the breaking up of large estates, and in making it possible for men to secure a reasonable area of land on which to make
– What about the pamphlet the honorable senator’s Government sent Home? It tells a different tale.
– I had an opportunity of reading an article which the honorable senator sent Home a few month* ago, and I should be sorry if the Government I support sent Home any written statement which was not more reliable than that article. We have been invited to consider what a magnificent country Australia is. We have been told that it is larger than the United States, and nearly equal in area to Europe, if we exclude a portion of Russia. Let me point out how it is held, though this information may not be strictly relevant to the Bill. I find that -
Leases and licences granted to graziers, speculators, and others by the Governments of the several States comprise 746^ million acres, including some of the finest land in the Southern Hemisphere. Yat this, in parts, the lessees pay as. 6d. per 100 acres per annum, while even in Victoria, the garden State, lands are held at jd. per acre. The land barons thus hold for a song Crown property equal in extent to the combined areas of Spain, France, Germany, Austria, Hungary, Switzerland, and Italy.
Yet- to-day honorable senators are telling our young men that there are plenty of places in Australia where they can get land. Senator St. Ledger talks in this Chamber about the area that has been alienated, but he only tells half the truth. There is a vast area of land which, “ though it is not absolutely alienated from the Crown, is tn the hands of monopolists and is leased for a large number of years at a merely nominal rent. It is one of my regrets that this Bill does not effectively deal with those lands.
– Nine-tenths of the land the honorable senator is talking about will not be fit for settlement for a century.
– I am more hopeful of the future of my country. If I were as pessimistic as is the honorable senator with regard to the development of this country within the next 100 years, I should have to give up some of my best ideals. If Senator St. Ledger believes that this land will continue to be monopolized as it is at present for the next 100 years, while the population of Australia is increasing, I wonder what he intends that our young men shall do for a living.
– I hope they will get there before that time, but I do not think it likely, even if there were forty Labour Governments instead of one in power for the whole of the time.
– The honorable senator is unable to recognise the fact that there has been a silent revolution. If the Fusion party were to continue in office, I should be disposed to indorse his statement and to say that our young men would never get upon the land for the next two centuries, let alone one. But to-day we have a progressive Labour and National Government in power which is determined to deal with this land problem, and in less than 25 years it will be found that we shall have done something practical with the land.
– According to the honorable senator himself, a great deal of the land to which he refers is not touched by this Bill.
– I have already said so. Honorable senators have quoted cases in different parts of Australia to show that individuals would be injured by this legislation, and I am free to admit that in some instances individuals will feel the pinch of this tax. But we ought at all times to consider that it is more just to injure an individual in the interests of the whole community, than it is to injure the community in the interests of an individual. I realize that most of the provisions of the Bill may best be discussed in Committee ; and, therefore, I do not propose to debate them at this stage. I merely desire to add that the evil of land monopoly is rampant throughout Australia to-day. That evil must be removed. I therefore say, in the most public manner, to our big land-owners, “ You must either make the best possible use of your land, or we will compel you, by means of land taxation, to get off it, and to make room for somebody else who will utilize it to the best advantage.” What is the position in the State of Victoria to-day ? Some of these land monopolists let their lands which produce about £8 per acre annually. The tenants, who have to incur all the risks incidental to the keeping of stock, to say nothing of other risks, as well as to provide all the labour, pay as much as £2 2s. 6d. per acre for land. I defy anybody to point me to a dairying district in which a man can secure land at a rental less than 25 per cent. of its annual product, exclusive of the cost of labour and stock. In our grain-growing districts, the landlords are getting two-thirds of the produce of their lands, as against the onethird which is received by the individual who is farming it for them. It is quite a common thing for a man who wishes to rent a good piece of land upon which to grow onions or potatoes, to be obliged to pay £6 per acre per annum for it.It is not only unjust that the tenants should be called upon to pay such high rents, but it is unfair to the community, in that it increases the price of these products to the consumer. If we analyze the increases which have taken place during recent years in the price of articles which are the direct produce of the soil, we shall find that those increases are the result of land monopoly. I shall give the Bill my whole-hearted support. I believe that it will be instrumental in adding to our national wealth, by insuring an increased measure of production, and by making it easier for the young men of Australia to settle upon its lands under fair and reasonable conditions.
– I do not intend to discuss the aspect of this Bill which has just been dealt with by Senator E. J. Russell ; and which I have no doubt will be made the theme for a song and chorus until the measure leaves the Senate.. I intend to confine my remarks to some constitutional considerations which are involved in the Bill. Much of our criticism of it, from an economic stand-point, might have fallen on unheeding ears hut for the circumstance pointed out by Senator Millen, that the Government, by means of an authoritative pamphlet which has been circulated throughout the world, have made it perfectly clear that it would be difficult for immigrants to find any place on earth which presents more attractions to them,so far as the administration of its land laws is concerned, than does Australia. Butthe Leader of the Opposition did not agree with certain statements contained in that pamphlet. I am not so dissatisfied with it. I have glanced through it, and I may say that its statements are as generally accurate as the statements of any publication of the kind can possibly be. That being so, the Government themselves have barbed the arrow which we are now aiming at them. It is utterly absurd to admit that the statements contained in the pamphlet are substantially correct, and at the same time to attempt to justify the harrowing pictures which have been painted of the impossibility of settlers earning a livelihood from the soil in Australia. The statement of Senator E. J. Russell, that it is impossible to obtain land in Australia which will yield a decent living to a settler, is effectively contradicted by the publication in question. Why the honorable senator did not recognise that, passes my understanding. I know that it is not his function to flog his own Government, but if his statements are true, every one of them was a condemnation of the assertions which are contained in the book. There is no escape from that position. The policy which was put forward by the Prime Minister in his manifesto, and the repeated utterances of members of the Labour party throughout. Australia, are irreconcilable with the assertions contained in that pamphlet.
– I prefer to back my own knowledge rather than the statements embodied in that publication.
– If the honorable senator chooses to flog his own Government, he is welcome to do so.
– The Govern ment may have experienced the same difficulty as did the honorable senator himself on one occasion when he could not read the proofs of a certain book in London.
– The Bill, either wholly or in part, if not literally unconstitutional, is certainly a violation of the spirit of the Constitution and of the spirit of federalism upon which that charter of government is founded.
– Where did the honorable senator get hold of that impalpable spirit ?
– If the objective of the Bill were expressed in clear terms upon its face - if it stated that its object was the bursting up of large estates - there is scarcely anybody who would not admit that it would be declared unconstitutional by the High Court.
– The people want a land tax to be imposed.
– That is not the point. The Government dare not declare the object of the measure in its title. Of course, its validity may be contested before the High Court, and that tribunal cannot look to the debates upon it in this Parliament to ascertain its real object. It can have regard only to the Bill itself. I repeat that the Government are not dealing fairly with the States or with the people when in an indirect and underhand way they do something which they cannot do directly.
– It is a pitiable thing that a majority of the people have decided to be unfair to themselves.
– I do not think that a majority of the people have yet decided to subvert the Constitution in this way. I believe they would prefer this Parliament - even if it be attempting to do something which is unconstitutional - to do it openly and directly. If its action were declared to be wrong by a superior authority, it would then be in a position to de vise some other means for achieving its object. One provision in the Bill provides for the forfeiture of land under certain conditions’. I wonder whether the VicePresident of the Executive Council has obtained from the Attorney-General an authoritative opinion that the Government have power, as a punishment, to deprive a man absolutely of the ownership of landed property? I doubt it very much. There is a vast difference between forfeiting dutiable arid excisable goods and forfeiting a man’s land. The provisions of the Bill in this respect either indicate short-sightedness on the part of the Government, or display a lack of clear vision into the real essence of things. I will show how distinct the two matters are. In the case of dutiable and excisable goods, the duty or Excise is, so to speak, a lien giving to the Crown a possessory title to those goods until the duty is paid. But that title is precedent to the right of the owner to take over the dutiable or excisable goods on payment of what is due to the Crown; and on the duty being paid the goods pass over from the Crown. But not so in the case of land. As a matter of fact, and in practical effect, entirely the reverse is the case. When the Crown has parted with land, it parts with it altogether. The title goes to those to whom the Crown has sold the land, and there it remains. That is the difference between the two classes of things, and they cannot, for the purpose of taxation and forfeiture, be regarded as one and the same. Therefore, there is no analogy in saying that, as we can forfeit dutiable and excisable goods, therefore, we can forfeit land.
– We can forfeit a ship.
– Again the honorable senator makes a mistake. I do not think that a State Government, or any Government, can forfeit a ship in the sense in which this Bill purports to enable a man’s land to be forfeited.
– In exactly the same way.
– I think not. I have been consulted upon this important part of the Bill, and have given my opinion. Forfeiture of goods, in my opinion, is not forfeiture in the sense in which the Government propose to forfeit land under this Bill, because the Government, like an individual, may pursue its claims. The Government may pursue its claim like an ordinary individual when enforcing any civil right, for the purpose of enforcing a penalty. But, as a rule, when a person is proceeded against on account of goods, and those goods are sold to satisfy a claim, the balance, if any, is paid over to the owner after the claim or penalty is satisfied. There is an implied right of ownership all the time, in a case of that kind. Hence 1 am inclined to doubt whether, under the Constitution, we have the right of forfeiture in the sense intended by this Bill.
– There is no doubt about the power to forfeit goods, is there?
– I have pointed out the difference. I do not say that my opinion settles the matter, or is final. 1 can easily understand that another opinion may be taken, more favorable to the point of view of the Government. But if my view be right, the clause dealing with forfeiture may be held to be unconstitutional. I wish, also, to refer to clause 29, which provides that a covenant or stipulation in a lease of land which has, or purports to have, the purpose or effect of imposing on the lessee the obligation of paying taxes shall be absolutely void if the lease was made after the commencement of this measure, or if the lease was made before the commencement of the measure, shall not be valid to impose on the lessee the obligation of paying land tax to any greater amount than would have been payable if the lessee had been the owner of the land.
– That will make some people sit up !
– I doubt whether the Commonwealth Government has the power implied in that provision. What does it amount to?
– I call attention to the state of the Senate. [Quorum formed.’]
– The Government claim that they have the right of altering contracts made between individuals on account of property properly acquired. I have no doubt that the Government when they seek to enforce this provision will be confronted with litigation. In fact, having regard to the operation of some leaseholds in Queensland, it is almost certain that any attempt to enforce clause 29 will be questioned. Another clause which has the colour of a violation of the Constitution is 67. This clause proposes to affect a curious and very notable alteration of the law. It deals with the forfeiture of lands, and with what is to happen in the case of undervaluation. A person who, with* intent to defraud, understates the unimproved value of any land, is to be guilty of an indictable offence, and where the value stated in the return is less than 25 per cent, or more than the value as found by the jury, the value is to be presumed in the absence of evidence to the contrary to have been understated with intent to defraud. Clauses 68 and 69 also deal with the same matter. Honorable senators know that in the making out of income tax returns persons frequently consult their solicitors. Solicitors either take their instructions from their clients personally, or go through their books for the purpose of obtaining the information upon which to base the income tax , returns. Under this Bill, however, an undervaluation is in itself prima facie evidence of fraud. Are the communications between solicitor and client in that case privileged ? Usually such communications are privileged. That privilege is the client’s, not the solicitor’s. The exception to the rule as to privileged communications is that a communication by way of conspiracy to crime or fraud is not privileged. The clauses to which I draw attention appear to alter the law in an important point. The subject has been considered by the Law Associations of New South Wales and Queensland, the members of which consider that these clauses may make a serious inroad upon their business. They wish to understand what their responsibilities are, and how their duty to their clients is affected. The two associations have communicated with each other on the subject, and a communication from both has been forwarded to me in order that I may bring the subject under the notice of the Federal authorities. Those who have communicated with me give their reasons. I shall be glad if the Vice-President of the Executive Council will furnish us with some information on the point.
– Are the associations of any standing in those two States?
– They control the most important part of the professional conduct of members of the bar, and of what is called the lower branch of the profession. They are always recognised by the Courts; they are men of the highest standing, who are frequently consulted by the Supreme Court Benches, and called in to assist in matters pf that kind.
– I should have thought that if they were men of that standing, they would not need to consult anybody else.
– The person who places the matter before Parliament on their behalf may be assumed to have some knowledge of it, and should give his reasons for so doing. The other points in their communication were merely professional, and it would be quite useless for me to bring them under the notice of the Senate. However, if the Attorney-General is consulted, he will, I am sure, explain at once why this matter should be mentioned, and why I have mentioned it. With regard to this Bill, if we are to take the declaration of those who fathered the Constitution in various parts of Australia, as to what it meant and what was intended, it will be found to be, if not unconstitutional in the legal sense of the word, the last thing which we ever expected would be imposed on the States. I shall make good my words.
– May I ask the honorable senator whether the two bodies of high standing have communicated with the Attorney-General ?
– I cannot say so; though possibly they have. 1 shall telegraph to Queensland and ask them if they have not done so to do so.
– That is better.
– I do not know why the Minister should have doubted the statement at all. When
Mr., now Sir Edmund, Barton, who was the Federal leader, came to urge Queensland, as he urged other States, to enter the Federation, it was very important, especially to New South Wales, and possibly to us too, that that great State should come in. The advantages of coming in, and the disadvantages of staying out, were placed before us strongly and clearly. And if anybody was competent to give us a clear direction on the former point it was Sir Edmund Barton. He certainly must be taken to understand better than anybody else, both then and now, what it was intended to do under the Constitution, what powers the States would have to give up, and what powers would remain to them. According to the Brisbane Courier of 13th May, 1909, he said -
Union does not exist where the individual (State) powers do not remain intact. Union which does not prescribe such a thing is not federation at all. The Commonwealth cannot touch the land or territory of any State, neither can the interests or the mineral development or progress of any State be touched or hampered.
It was argued, by those who wished Queensland not to go into the Federation, that it was being asked to hand over powers complete and ample to the Federal Government ; and Sir Edmund Barton dispelled those fears by practically telling us that the land was not to be touched, but was to be ours. Some time afterwards, he came up to Brisbane again, and on his way he spoke in Toowoomba and other places. Speaking at Brisbane on 3rd September, 1899 -
He hoped that Federationists would remember that this Constitution must be tried on its merits before any one laid a heavy hand on it.
He assured us, as he had assured many others, that our territorial jurisdiction, of which the control over land was the most important part, was absolutely untouched in the Constitution. Addressing a very large meeting in Brisbane on another occasion, he gave an interpretation of Federalism and the Constitution which he was seeking to establish in Australia. First he quoted the opinion of a Federalist whom lie had adopted- Hamilton, I think-
Your own Colonies must be sovereign and supreme in the sphere of local affairs as distinguished from national affairs.
Then I find this reference to the leader of the anti- Federalists in Queensland, a very able and competent man -
Their leader declared that his idea of the Bill was that there should be only one Parliament, and that all others should be wiped out. To have that (says Mr. Barton) all their public possessions would have to be given up. “ Would you like to give up your railways?” Mr. Barton asked. “Not much,” he added. “Would you like to give up your lands?” “Not much,” he added. Then you won’t support Mr. Unmack and the anti-Federalists.
Still further, Sir Edmund Barton made it clear and distinct, as far as he could, that the intention was that our railways, our mines, and our lands, were to be absolutely ours under the Federation; but, as I shall show later by a quotation from a very famous Federalist, the power to tax and deal with land implies necessarily control of it.
– Was not the gentleman whom the honorable senator is quoting considered famous for ambiguity of expression ?
– I shall try to answer the honorable senator as courteously as I can ; but he never seems to be happy except when he is asking impossible questions, and casting a reflection on somebody else. How could I be expected to know whether the gentleman is famous for ambiguity of expression or- not? How could I be so impertinent as to say that he is, even if I thought so? I do know that that statement was perfectly clear to us, andthat it was not possible for a man to be clearer in the particular instance which I have quoted. If Senator McGregor pre-‘ tends to fmd in that simple statement any ambiguity, then in the fine spirit in which he made the interjection 1 may retort that he can scarcely be fit for his position. I shall now quote a statement by a man who was once Chairman of Committees in. the Senate, anti who is now a member of another place. T refer to Mr. Higgs, who was an ardent Federalist, and who, forhis ardour in the cause of Federalism, was at serious variance with his colleagues in his own State. Throughout Queensland he fought on behalf of Federation. Speaking in Brisbane on the 8th August, 1899, he said -
We shall still retain our local Parliaments. We give up nothing. We only agree to act together with our own kith and kin. We surrender not a single State right or privilege. Queensland will still retain her land and all that therein is. She will control the rivers, the roads, the railways, the miners, the farmers, the orchards, the pastoral properties, the factories, and the work-shops. All our resources will be to us what we choose to make them, and the Colony that has the greatest resources is that which is going to, prosper most under Federation.
Our lands, our mines, our minerals, our factories, and our workshops were to be. all our own.
– And they are yet.
– Not in the sense in which Mr. Higgs, or Sir Edmund Barton, or anybody else, intended. I shall quote another authority which will show how little the States will have left if the power of land taxation is exercised by this Parliament. In the light of this declaration of seven or eight years ago I am reminded of a very characteristic story which is told of Swift. In the days of his mental decline somebody brought to him that great story, the Tale of a Tub, and when he read it tears rolled down his cheeks. He glanced at the pages, closed the book, and said, “ What a genius I was in those days.” When Sir Edmund Barton, Mr. Higgs, and others, come to re-read what they said on the occasions when they were inducing us in Queensland to enter the ‘ Federation they will each probably say, “ Well, what a genius I must have been in the days when I told the people that these would be the sovereign powers which they would possess under the Federation.”
– “ They builded better than they knew.”
– He certainly was not speaking better than he knew, so far as the future was concerned, and a future of a very different character from that which he painted in 1899 is now looming straight in front of us in this Parliament. I shall quote another authority as to what the Constitution means with regard to the States’ sovereign control, and that is no less a person than the late Sir Frederick Holder. Speaking at the Adelaide Convention, in 1897, he said -
We have created an instrument of partnership between us, which, I believe, while it secures the independence of the several States, will provide for the joint control of certain matters. At the same time, as it also leaves free and complete self-government in all matters not committed to the central authority, and this, it seems to me, is what it should have done : To provide that national questions should be federalized and that local questions should be left to local self-government.
I ask the Government to consider this question, “What can be more local than the land?” It is the great localizer. It will localize us all at last, whether our bodies are burned or something else happens to them. It is the great local agent, and when men spoke of the powers of local Government being retained to us under the Federal Constitution, it could have no other application than consideration for the land. So we went into the Federation.
The power to tax is the strongest of all powers which a Parliament can have, because it is from that power that the executive authority of the State is determined. One great jurist - probably the greatest Federal jurist whom the world has seen, I refer to Chief Justice Marshall - puts the matter very clearly in his celebrated judgment delivered in the case of McCulloch against Maryland. His explanation of taxation, and its effect in connexion with the powers of government, is worthy of consideration. The principle contained in his judgment in that case was afterwards quoted and applied, in the way he applied it, in the case of D’ Emden v. Pedder. He impressed upon the United States what was involved in the power to tax, and what’ were the consequences involved in the exercise of that power. Here are his words -
The power to tax involves the power to destroy. That the power to destroy may defeat and render useless the power to create are propositions which will not be denied.
The converse is also true, and here is the issue before us now. If we exercise this power, we may, through our taxation, control the land policies of the States. By exercising a superior control over the lands through our power to tax them, we may modify or nullify the powers of the States in such a way as to render them unable to adopt independent land policies of their own. Consequently, the consolation derived by some from the suggestion that in leaving the lands to the States we are not impairing their jurisdiction is entirely illusory, because, on the judgment of Chief Justice Marshall, this power of taxation is equivalent to a power to create or destroy a policy in regard to the land. Some aspects of the land question often referred to here make it difficult for one to believe that some honorable senators have ever seen so large a State as Queensland, and they certainly do not appear to be seized of the various conditions and requirements of so large a territory in connexion with land settlement. I have had some correspondence sent me from residents of Queensland who are competent judges of a land policy, but as the hour is getting late I refrain from reading the many pertinent observations they make. Amongst other things, they point to the fact that nineteen-twentieths of the area of the State is certainly not fit for close settlement at the present time. If land in the remoter districts is to be settled at all for years to come, it can only be by men who are prepared to risk a large amount of capital, and can take up large areas of country. If honorable senators, were generally familiar with the vast State of Queensland, they would know that that is a proposition which is not arguable.
– Does the honorable senator mean to say that nineteentwentieths of Queensland is fit only for occupation by big men in big areas?
– That is so, though the proportion may be to some extent over-stated.
– Then what becomes of the honorable senator’s frequent statement that there is land available in Queensland for the settlement of thousands of immigrants ?
– The honorable senator overlooks the fact that there are districts in Queensland which are larger than Tasmania. If he knew anything about that State, he would know that a very great area of it must for years to come be very sparsely settled indeed. It can only be settled by men possessing some capital, and in a position to take up large areas. Honorable senators will therefore see that a policy which would be applicable to Victoria would be inapplicable, if not injurious, to a State like Queensland. In imposing a land tax, which is in another form establishing a land policy, the Commonwealth is restricted under the Constitution to the adoption of a uniform policy, and while the policy decided upon might be a good and a necessary one as applied to one State, in the different circumstances of another its application might result in irreparable injury. It is for this reason that the State authorities have so strongly urged that the powers of their local Parliaments over the land should remain unimpaired. I do not feel that I am at all competent to criticise what might be the best land policy to adopt for a small State like Victoria, which is comparatively closely settled, and I do not disparage Senator E. J. Russell, when I say that I think he is not sufficiently acquainted with the conditions existing in Queensland to enable him to decide what would be the best policy to promote settlement in that great State. The diversity of circumstances and conditions make the question difficult and complicated, and for this reason, under some Federal Constitutions, local matters, including land taxation, are left expressly to the authorities of the States composing the Federation.
– One of the Scotch agricultural delegates has said that where there is good land open to settlement in Queensland to-day there are always too many applicants for it.
– There will always be a great many applicants for desirable land. If there were only five people in Australia to-day, and they had been accustomed to agriculture under Victorian conditions, they would all want a corner in Victoria in preference to land in any other part of Australia. But any one who, on that account, would say that there was a scarcity of land in Australia might reasonably be told to go to a doctor to have his head examined.
– But I thought it was not the practice to allow people who already had laud to put in applications for new land ?
– The honorable senator would impose a penalty for their foresight upon those who have already secured land. When he talks in that way is he not, after all, repeating the old story about Naboth’s vineyard? There will always be land hunger. There was land hunger in Australia when there were only 10,000 people, and there will be land hunger when there are many millions ‘ of people here. In providing facilities for people to settle on land there is room for the exercise of a wise discretion. I am not one of those who claim that land should be immune from taxation. I think that, in common with other forms of wealth, land should bear a fair share of the cost of the country. It is a question of policy when, and to what extent, it should be called upon to do so. My chief objection to this Bill is that the Commonwealth is not the authority which should rightly impose land taxation, even if under the Constitution and within its spirit we can legally or consistently do so. I have pointed out that the proper authority to deal with this question is the State authority, which is in the best position to secure justice in the incidence of the taxation. This should be the work of the State Parliament, which is best able to formulate a land policy for its own State.
– But the State Parliaments will not do this.
– That does net justify us in doing what we ought not to do. But I would ask, How can it be said that the States are not doing this work? The main instrument in the settlement of land is railway extension, and I remind honorable senators that Queensland to-.day has the largest railway mileage per head of population of any country on earth. Some of the other States are not far behind.
– What about Chili ?
– I think we are ahead of Chili. I have looked up the statistics recently in Knibbs’ Year-Book. In view of the railway extensions carried out in all of the States, it cannot fairly be said that they are not attending to land settlement.
– They are not taxing the land ; that is what I said.
– There is State land taxation in some of the States, though not in Queensland, but I remind honorable senators that in Queensland there are eight or nine different forms of taxation imposed upon the lands of the State for local government purposes. Land in all the States is heavily burdened to provide revenue for local requirements, and to say that land is not contributing already a large amount te the revenue of Australia is to say the thing which is not. Let me deal now with another aspect of the measure as it will affect Queensland, and in this connexion I ask the Vice-President of the Executive Council to make a note of what I have to say, that he may be in a position to give some answer to my objection when he speaks in reply to the debate. I object to the provisions of this Bill which interfere with the right of persons to make their own contracts as between lessor and lessee. There are in Queensland lands held under lease from the Crown in long leases extending over from twenty to forty years. Improvements are often made which cost thousands of pounds, and the lessee has the right to sell his’ interest in them to the incoming tenant. When he parts with his interest in the property,’ it is usual for the incoming tenant to pay him the value of those improvements ; but all the time the Crown holds a reversionary interest in the land. Will this Bill interfere with the making of -such an arrangement between the incoming and outgoing tenants?
– The Bill does not provide for the taxing of leaseholds.
– That was my Impression. But the question was put to me, and I was asked to get it answered. Whether we can make a distinction between a lease which is. held from a private individual and one which is held from the Crown is an important and very nice- point.
During the course of this debate a good deal has been said about the unearned increment. Senator E. J. Russell has pointed out that immense sums of money have fallen to men by way of unearned increment. But there is another side to that picture. If- the State claims the right to tax the unearned increment, it ought also to compensate men who have suffered from the unearned decrement. I have never been able to follow the reasoning of those who speak of the unearned increment of land generally. In the case of land which has been made productive, I have always maintained that there is 110 such thing as unearned increment. Any attempted definition of the term in its application to such land will fail to’ meet the requirements of the case. It is impossible to legislatively apply any such definition. - Consequently, I have always held that the unearned increment is a delusion of economists and of theorists.
– Is the honorable senator a better economist than was Henry George ?
– I differ from Henry George, whose works I began to read at a very early age. I have discussed his book with his greatest disciple, Michael Davitt, whose association and friendship I enjoyed during his sojourn in Australia. But he could not bring me to understand, the so-called unearned increment.
– The honorable senator cannot blame him for that.
– No. I will answer as the Irish’ servant girl answered Samuel Wilberforce when he inquired if she were saved, “ I have no doubt that I will be saved through my invincible ignorance.” But let us assume that there is an unearned increment. The position, then, is that’ about £125,000,000 has been paid by landowners to the Governments of Australia. It has been applied by those Governments to the construction of railways, or to pay-, ing interest upon borrowed money which has been used for reproductive work’s. Thus, Governments have been enabled to undertake works to develop the resources of the country. “ This money has therefore earned an increment for the State. When honorable senators talk about the unearned increment, that fact should be taken into consideration.
– If the honorable senator is opposed to a land tax, how will he. get rid of landlordism in Australia?
– That is not the question with which I am concerned. I have previously held that the only authorities which can deal with the landlord if he is inflicting injury upon the community are the States.
– There are absentee landlords in Queensland, and the State does not deal with them.
– An important portion of this Bill has been copied from the New Zealand Act. But that Act clearly discriminates between income tax and land tax in the case of mortgagors. The mortgagor is relieved of payment of the land tax to the extent that he pays income tax. When the Prime Minister was explaining his manifesto during the last election campaign, he stated again and again that mortgagors would not be taxed to the same extent as other land-owners. But I can find no evidence in this Bill of an attempt to redeem his promise. So far as I can gather from his reproduced utterances in the local newspapers, he intended to adopt the discrimination which is made in the New Zealand Act, in order that the tax might not press too heavily on the mortgagor. He desired to temper the wind, so to speak, to the lamb, who is frequently a shorn one. It was on that understanding that many electors were induced to vote for him. Either I have misunderstood the words of the Prime Minister on this important question or he has been misreported. But in Committee we shall be afforded an opportunity of discussing it more closely, and I hope that some attempt will then be made to reconcile what at present appear to be irreconcilable statements - statements which were probably made with a view to securing a certain vote in a certain quarter. I hope that his promise will be fulfilled. There are many cases in which the mortgagor is already between two mills. Many very hard cases were brought under the notice of the Prime Minister, who promised to give them due consideration. I hope that it is not too late for that promise to be redeemed. I trust that due consideration will be given to these persons who, in the newly-settled districts of Australia, are doing valiant work under great disadvantages, and who deserve the most generous treatment when we can extend it to them.
Debate (on motion by Senator Sir Josiah Symon) adjourned.
Senate adjourned at10. 30. p.m.
Cite as: Australia, Senate, Debates, 20 October 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19101020_senate_4_58/>.