4th Parliament · 1st Session
Mr. Speaker took the chair at 10.30 a.m., and read prayers.
Care of Aboriginals
– Has the at tention of the Minister of Home Affairs been drawn to the statement that some aboriginal natives of Australia have been removed from a settlement in ‘the YassCanberra district, and that “ Queen Lucy and Princess Julia “ strongly object to the proceeding? Will the honorable member inquire into the matter, with a view to considering the advisability of taking under the Commonwealth, care all aboriginal natives who might be considered naturally attached to the soil of the Federal Territory ?
– I saw in a newspaper the statement referred to, and the suggestion of the honorable member will have my attention.
– Seeing that he is entirely ignoring the principle of an eight hours’ day, will the Prime Minister recognise the principle of a forty-four hours’ week?
– I should be glad to do so, but we must sacrifice ourselves a little for the good of the country.
– I wish to know from the Minister representing the Minister of Defence if -the papers concerning the railway accident which occurred in Tasmania during the visit of Lord Kitchener have yet been obtained?
– They are in the possession of the Department, and will be laid on the table of the library for the honorable member’s perusal.
– I wish to know from the Minister of Home Affairs whether, to provide rapid transport as a corollary to an effective defence system, steps have been taken to arrive at an understanding with, the Governments of the States concerning the abolition of breaks of railway gauges and the establishment of a uniform gauge? Is he of opinion that the Commonwealth should bear part of the expense of making the alterations necessary to bring that about?
– We are looking into the matter. As to the Commonwealth bearing part of the expense of any alteration, that is a question of policy.
– I draw attention to the fact that I have on the noticepaper a question bearing on this subject.
– I wish to know whether the Minister can give the House an estimate of the cost of looking into this matter.
– As soon as I can make up the figures, I shall present them to the honorable member.
– In considering the matter, will the Minister have full inquiry made as ‘to the possibility of adopting the mono- rail system?
-O’MALLEY. - That possibility will have to be carefully examined.
– Is it the intention of the Government to call a conference of the railway commissioners of the States with a view to considering the adoption of a uniform gauge ?
– We are considering that now.
– Will the Minister obtain information from the most scientific sources as to the value of the new mono-rail and gyroscope- combination railway scheme about which so much has been written, before taking any decisive step in connexion with Commonwealth railway construction?
– Our present object is to come to some understanding with the States so that all future railways may be constructed on the same gauge, but the value of the mono-rail system is also under investigation.
– I wish to direct the attention of the Prime Minister to the fact that a large number of worthy persons, men fit for any position, are suffering hardship by reason of the conditions imposed by our Naturalization Act. Will he consult with the Minister of External Affairs to see whether an amending measure cannot be introduced to enable these men to become naturalized and enjoy all the iprivileges of citizenship?
– I do not know what amendment of the Act the honorable member asks for, but if there are worthy persons resident in the Commonwealth who are under disability by reason of our naturalization law the Government will take into favorable consideration the honorable member’s suggestion.
– I ask honorable mem bers to give two days’ notice of questions in future, because when the House meets at 10.30 a.m. it is impossible to obtain in less time the information necessary to reply to them.
Sydney Suburban Switchboards - South Australian Contract Postmasters and Postmistresses - Port HedlandPost Office.
asked the Postmaster-General, upon notice -
– Inquiries are being made, and the desired information will be furnished as soon as possible.
asked the PostmasterGeneral, upon notice -
Whether he will take into consideration the advisability of appointing relieving officers to relieve contract postmasters and postmistresses in South Australia, as at present it appears to be almost impossible to get capable officers to relieve them under existing conditions?
– I shall make inquiries into the matter.
asked the Postmaster-General, upon notice -
– Inquiries are being made, and the desired information will be furnished as early as possible.
Debate resumed from 30th August (vide page 2244), on motion by Mr.
That this Bill be now read a second time.
Upon which Mr. Deakin had moved by way of amendement -
That after the word “That” the following words be inserted : - “ the form of land tax outlined by the Prime Minister, and provided for in. this Bill, is unjust in its incidence and an abuse of Federal powers.”
.- When through the courtesy of the House, the debate was adjourned last night, I had mentioned that to apply the progressive principle to taxation is economically unsound, and untrue to the intention of the Government in exempting holdings not exceeding £5,000 in value: that it is bad also because consideration )p not given to area as well as to value,- and therefore serious injustice will be done to a large class of settlers. The application of the tax should have been limited to effective areas - that is, to land suitable for agriculture now held in pastoral occupation. Such land might properly be subjected to a land tax, not of a revolutionary character, but sufficient to bring about subdivision, and more productive use. The taxation of land values is generally sought to be justified on the ground that the monopoly which arises from the occupancy of land by one class is, in its indirect effect, opposed to the equality of opportunity upon which a well-constituted State must be established. At this stage of our development it is impossible to give the equality of opportunity at which we aim by adopting the principle of collective ownership. Some other means of obtaining for the State a fair return from its land without doing injustice to interests created under the present system must be sought for, and a fair land tax has been regarded as the best means of giving the State what is regarded as its clue. An impost on land has been described by some writers as not a tax but the assertion of the public servitude in land, the significance of which I shall attempt to show a little later. Let us see what the leading writers on the subject have said. I shall mention a few authorities, without quoting extensively from them, upon the justification and rationale of land taxation. Adam Smith states the principle that the rent of Crown lands constituted for a long time the greater part of the revenue of the ancient sovereigns of European States, and points out that every improvement in the circumstances of society tends either directly or indirectly to raise the real rent of land ; that is, the rent due to the increase of population, the application of labour, or the competition of population for land. He also says that plenty of good land and liberty to manage their own affairs seem to be the two great causes of the prosperity of all new colonies. Coming to Mill and modern times, to which, as I have said, the collective principle of ownership is utterly inapplicable, except in States of imperfect development or low political organization - some of which do exist at present - that writer says that the privilege or monopoly is only defensible as a necessary evil. Discussing this question, in one of his greatest works, and recognising the justice of a land tax, Goethe says that it must be in a suitable degree - in other words, that it must not be confiscatory, or imposed without considering the existing conditions of society, to the creation of which we have had every one’s consent through their representatives, or the fact that the alleged evils have grown up under circumstances for which every class is responsible. So that we cannot throw ourselves back on the absolute principle advocated by Henry George and others, and regard present day society as one in relation to which we have an absolutely clean sheet for the purposes of our legislation. Goethe, in discussing this matter, says that while the tax is justified, it must be in a suitable degree, and the matter of justification seems to be clinched by Burke, when he says that in a country of monopoly there -can be no patriotism. I state these propositions because they undoubtedly ought to appeal to honorable members on the opposite side of the House. They also very largely touch the sympathies, as regards reforms, of a good many honorable members on this side. But there are two governing conditions which ought not to be forgotten ; first, that it must be a tax and not an attempt at confiscation, and second, that the tax, as between owners, ought to be proportioned to the privilege. Neither of these conditions is, I hold, satisfied by the proposals of the Government. Let us now see what the departure from principle, by allowing an exemption of £5,000 in value, means. On this point it is exceedingly difficult to get correct statistics. On Monday last I put a few questions to some officers in the South Australian Taxation Department, and from the answers received, I draw the inference’ that the total unimproved value of land in that State on the 1st January. 1910. was £35,201,000. I do not think that that is the valuation for the next five years, which has to be made this year, and which, I believe, is to date from the middle of the year. Probably it is the corrected valuation which was -made on the last assessments for the purposes of the present tax. Of that, the unimproved value of land above .£5,000 in value - there being two grades in the State - is £1 1.945,000, so that the exemption of ,£5,000 means the release from taxation of land to the value °- £23’225,000 out of a total of £35:301;000- I ask honorable members on the other side how can they, from the point of view of taxation, justify that sweeping exemption throughout the Commonwealth ? In other words, what is the justification for such a class tax as would place the burden, and necessarily a much greater burden than otherwise would be proposed, upon one-third and exempt twothirds of the land values right through the Commonwealth?
– Is that the valuation of freehold land in South Australia ?
– It includes -freeholds and such leaseholds, which are comparatively few, as are subject to the tax. In South Australia, we have Crown lessees who have the right of purchase and perpetual lessees, whose land is not subject, as it ought to be, to revaluation every fourteen years. The proper system of leasing, and the one which we advocated right through in South Australia, was, “ Stop the sale of Crown lands, lease in perpetuity on a rent based on the unimproved value, and assess the rent periodically, according to that unimproved value.” But, unfortunately, even some of our honorable friends in the Labour party departed from that principle. I was importuned quite as much as they were, to give the right of purchase to perpetual lessees. It is the same old principle of human selfishness right through the market, whether its advocates be Labour men or not. Men who took up workingmen’s blocks have importuned me in Adelaide to impress upon the State Government the necessity of giving them the right of purchase. I refused, but the right of purchase, I believe, has been given, and very early, under the operation of this splendid system of perpetual leasing, we departed from the true principle to be deduced from the authorities I have mentioned of periodically assessing the rent, according to the increase or the diminution of the unimproved value. Honorable members will see that, from the point of view of taxation, as well as equality, a great leakage is involved in the exemption of £5,000. What must it mean? When the necessity of greater revenue arises in the Commonwealth, iit will mean, if the principle is right, a great increase of taxation upon lands over £5,000 in value. And it will mean, of course, the necessity, when a State has to raise greater revenue, to plant it on land under that value. So that really this is not the sop which some persons think it is to small holders. It is not in the long run a very effective move, because it is merely a shelving of the unpopularity of the tax from this Parliament on to the State Legislature. But there can be found an exemption which will be quite consistent with the true ‘theory of ‘.taxation, and it is one which we did urge over twenty years ago in the State Parliament. If you make your exemption so that it will be consistent with the principle of a so-called unearned increment, then it ought to be per acreage. You ought to exempt approximately the amount per acre which was originally paid to the State, and if you do that it will mean, not an unfair advantage, but a great benefit to the agriculturist, the man whose land value is largely represented by the application to it of his capital, his labour, and his enterprise. It will be a very great benefit to him. The unearned increment increases as you go along, until you get to the very centre of your big cities, when the exemption will be comparatively small j your tax under the system I suggest will fall upon the holder of practically only the added value. Suppose that your exemption is, say, £2 an acre - it might be £1, but I. suggest £2 if you want to commence with a pretty liberal exemption. According to the figures df; the Prime Minister, the sold land brought to the State Governments £123,000,000. He stated that the Victorian increase was about five times the amount of the value originally, as determined by the purchase money. If you take then, five times the value of the land when sold by the State - and that was set down at about £123,000,000 - we get a total unimproved .value of £615,000,000. That, if anything, may be under the estimate, because the Attorney-General yesterday made a rough estimate of about £71.4,000,000 as being the value of the lands, the number of whose owners he stated. . Deducting your £2 an acre, that would mean a deduction of £246,000,000, and there would remain to be taxed £370,000,000, which, at a tax of id., would yield about £1,451,000. In other words, it would give the Commonwealth what the Treasurer says he will get, about £1,000,000 a year for Federal purposes; and it would give the States, by an arrange ment which could easily be come to with them, between £500,000 and £600,000, being the amount, approximately, of their present receipts from taxation of land. There is no revolution involved in that. It is a fair tax ; it is not oppressive, it avoids duplication, and it will tend, as a somewhat similar tax has tended in South Australia, to the diminution of large estates, which are purely agricultural, and which are being run for pastoral purposes. The Treasurer stated that the present land taxation in four States yielded £599,000. He mentioned, I think, a revenue of £351,000 for four States, but, the tax being municipal in New South Wales, the total taxation, whether it is received by municipalities by permission of the Government, or by the States, would be about £600,000. Such a tax as I have mentioned would practically give the States what they have at present, and yield us, without any confiscation or undue pressure, a revenue such as the Treasurer estimates from what I consider an unjust method of taxation. Summed up, such a method would be economic taxation. It would, as I said, relieve the agriculturists. It would get a return from the increased value; in proportion to it, and without confiscation. It would induce subdivision, and do so without gradually congesting the market, which is a very serious matter. Now, on that point, let me mention that in about 1858, the British Parliament passed what was known as the Encumbered Estates Court Act, for the purpose of enabling mortgagees of Irish land to sell out expeditiously, and give a parliamentary title. In Ireland there is. under this legislation, a Court called the Landed Estates Court. It supervises the sale of landed properties, and gives, on the title being cleared up, a parliamentary title. The result of the passing of that measure, and bringing it into force at once throughout the land, was that estates, whose true value was twenty-four and twenty-five years’ purchase of the rental, were sold for six and seven years’ purchase of the rental. In> other words, men had, in cases, lost fromtwo thirds to three-fourths of the truevalue of their properties through the sudden congestion of the market, by a measure similar in operation to this one. If VOL do force - and I do not believe that yon can, because men will have to bear this’ tax - to the limits of your desire and your policy, large estates on the market, it will mean a serious declination in prices - to an extent which no man could honestly justify. We must be fair in this matter. When you have attained your ideal of destroying all interest above £5,000 in value, what then? Are you to stop then? Are you to come down, or declare that to be a permanent ideal? I merely ask the question.
– Senator Stewart said that this was only the thin edge of a wedge.
– T think that that statement was repeated during the last campaign. I believe it is the policy of the Victorian Labour party to adopt an exemption of £500, but in any case the amount will come gradually down. I think that the country is entitled to an express statement on this point from the Government. If we recognise their so-called mandate, and indorse their policy, what will be the result of its attainment? A subdivision down to areas worth £5,000. While it is our duty to criticise according to our lights - I hope, paying every deference to the motives which animate honorable members opposite - some of us have been quite as liberal on the point of taxation, andthe Federal taxation of land, as have honorable members supporting the Government. When the question of Customs and Excise was discussed in the Federal Convention, and some delegates argued that the Commonwealth should never exercise, while some thought it should never have, the power of taxation, I said in Adelaide, and repeated in Sydney, that, if I thought that the Commonwealth was never to have the power of lightening the load of indirect taxation by the exercise of the power of direct taxation, I should advise the people to vote against the Constitution. It was understood that this power should be given to us in reserve - that is how it is understood in America, as I shall show from decisions of the Supreme Court - to be used, as was stated by the Leader of the Opposition yesterday, when the decline in the Customs and Excise revenue showed the necessity of imposing a direct tax. At the Sydney sittings of the Convention, it was thought that a very liberal margin on the figures we had in Adelaide would put the new expenditure of the Commonwealth for many years at £600,000 per annum. That estimate has been exceeded, but I said then that if our new expenditure were not to exceed that amount, then, but for the fact that we were merely framers of the Constitution, and had no mandate as to policy from the people, I should not object to make provision for that expenditure by a fair land tax throughout Australia. I said -
I certainly would go in for a direct tax -as a method of meeting the general expenditure in preference to the system of Customs duties which so unduly absorbs the earnings of the people …. The value of the land which would be taxed would be a perfect barometer of the state of the industrial and commercial atmosphere. The Tise and fall of the wealth of the State might be accurately gauged by the existing condition of land values. 1 did not desire to abolish Customs duties, because in a country like this we could not do so ; but I said that when it became a question of apportioning taxation according to necessities and earnings, amongst the community, one had to consider the equity of some measure of direct taxation, as against what was very often the grinding burden of our extreme indirect taxation. Our aim should be to avoid duplication. This Bill does not attempt anything of the kind. On the contrary, it brings about duplication, two imposts on_ one owner. Our aim, further, should be to attain simplicity. But there is no simplicity in this measure. It does not provide for a tax that will be uniform, even with the South Australian tax, which is a true tax upon land values; and its framers have not remembered that what they ought to propose is taxation, not confiscation. When Mr. McPherson, the leader of the Labour party in the South Australian Parliament, in 1895, tabled a motion to transfer to direct taxation some of the burden of indirect taxation upon the necessaries of life, I supported him ; but I pointed out that we must not confiscate. I urged that “ to nationalize by confiscation all rental values would be unjust and impolitic.” I make that quotation, in order to prevent any misapprehension of the scope of my proposals. The conditions, as I have said, are such as at present involve, at all events, relative duties. We cannot apply abstract theories to the taxation of a society in which millions of money are invested on behalf of comparatively small men - men who have only a meagre competence - through the agency of various institutions. The Australian Mutual Provident Society, for instance, which is a very beneficial institution, being based upon the mutual principle, has something like 70,000 policyholders, and an investment of , £12,000,000 or . £13, 000,000 on mortgages of land.
Such investments must be recognised in any scheme of taxation, and if we impose a destructive land tax, we shall confiscate the earnings gained by a very deserving class from investments on land.
– Even that comes under the “ fat man “ theory of the Labour party.
– If we were to do that, it would be, not true reform, but revolution by legislation. Coming to .the operation of a moderate tax, let me point out that in South Australia in 1895 the unimproved land values tax, which, I think, had been a halfpenny in the £1 all round, was raised, and it is now one penny in the £1 on values over £5,000. The Commissioner of Taxes, in a report in 1906, stated that large holders of land were realizing and disposing of their lands as opportunities offered. Especially was this being done by absentee owners, where they could sell, and were untrammelled by any trust instructions. Mr. Hall, another land tax expert, as well as Mr. Spiller, who was then, I think, Deputy Commissioner of Taxes in South Australia, also spoke of the effect of the tax on country holdings. Thus, in that State a moderate tax such as we suggest has operated to bring about gradually, and without any dislocation of interests, a proper system of subdivision. If we could make some arrangements with the States as regards land taxation, so as to avoid duplication, and have only one valuation for all purposes throughout Australia-
– But in New South Wales, for instance, land in one district is valued on one basis, and a valuation in another district is made on a different basis.
– The honorable member’s interjection emphasizes the expediency of bringing about some degree of uniformity. It should be an easy matter to arrange with the States to allow’ us, with their help, to make a valuation throughout Australia, and an arrangement could be arrived at for a fair uniform tax, based upon that valuation, and apportioned on equitable lines between the States and the Commonwealth. If the States did require, for local purposes, to add to that tax they could use the valuation that had been made by us. Under this Bill, however, there will be a valuation for Commonwealth purposes in South Australia, not to mention the other States, every year, whilst there will be a valuation for the purposes of the State every five years. The valuations will be made on different dates, and although aiming at the same result - the ascertainment of the unimproved value - they are to be made in different ways. The South Australian Act, as .compared with this measure, is simplicity and efficiency itself. I do not wish to dwell upon this point. I desire only to endeavour to make a few suggestions, recognising that it is our duty, while criticising the Government scheme, to show in what way our acknowledged necessities can be faced, and fairly met, by some other method. The Treasurer estimates that this tax will yield £1,000,000 per annum, and it may be that we could charge the defence expenditure up to that amount to a tax levied on the lines I have outlined. As population increased, the necessity for defence would increase, but in like manner the proceeds of the tax, being based on the unimproved value, would also increase. As population goes ahead, so does the value of land, and without even an increase of the rates, we should thus be able to get what was necessary for the purposes of defence. I make the suggestion, because honorable members opposite, in conceiving this tax, do not seem to me to have gone thoroughly to the bottom of the question. They did not really exhaust all the alternatives that were open to them while remaining consistent to their ideas as to desirable reforms. Why is this Bill cumbered with provisions for the valuation of the lessee’s interest as distinguished from that of the freeholder? We have not only the provisions in the Bill itself, but a suggestion of other provisions which have been modified, while some have been abandoned since the Bill was introduced. Last night we had another complex method - perhaps mathematically correct, but certainly most complex from the ordinary point of view of comprehension - of assessing the total value of the land that must be assigned to the lessee as against the owner of the reversion. In South Australia we disregard the lessee. In the State Act, as passed in 1884, it was provided - because some provision must be made for existing leases - that-
The burden of the land tax
This is a very simple provision dealing with the division of the valuation between the leaseholder and the reversioner - shall be distributed between the taxpayers in the relative proportions of the value of their interests in the land taxed.
That is all that is operative; but in this Bill we have complex provisions -
And every taxpayer who shall have paid any land tax shall be entitled to recover from every other taxpayer in respect of the land tax of the same land a proper proportion of the amount paid.
It was provided that as regards existing lessees the owner of an unexpired term of seven years should have to bear his proportion of the tax, but, as regards future lessees, it was a matter of bargaining between the landlord and the tenant. With that we have nothing to do. That has worked out well, and would be far more easily comprehended than the elaborate provisions of this Bill.
– What about an existing binding contract for a certain rental ? How would the burden be shifted?
– Provision is made for that in the South Australian Act.
– For abrogating the burden?
– No. It te provided that where there is an unexpired term of seven years the lessee has such an interest that it ought to be taken into account as between the lessee and the landlord.
– Ought to be?
– Well, it is taken into account, and that provision has worked out equitably. We do not need, in the case of future lessees, to provide for any arrangement as between the lessee and the landlord. They can be left to look after themselves. But there is a provision against shifting the burden on to the lessee, and the provision of this Bill on that point also appears in the South Australian Act. I believe, from what the Attorney-General has said, that he intends to abandon his idea of taxing Crown lessees. I do not know whether he meant to convey the impression that he had not decided whether or not Crown lessees who have a right of purchase should be released; but, at all events, from the point of view of the Government, !the principle is a very dangerous one. If persevered in it may involve a question of constitutionality. In referring briefly to the question of constitutionality, I should like to mention a principle which hitherto hss been overlooked when the question of our power to directly tax land has been considered. Is the tax a true tax, or is it, as I mentioned before, merely a servitude which is a part- of the ownership of the land? If it is a servitude, then the tax belongs to trie party which is en titled to the reversion incident to the fee simple, and here that is the State. It is the Crown of the State, not the Crown of theCommonwealth, assuming some of the continental theories, and some of the theories that are held in the American States to be sound, that is entitled to the tax as connected with the reversion. The tax, in such circumstances, would not be a true tax, but merely a part of a servitude, or of a Crown ownership which had neve: been parted with, and there would be <i return ‘cf part of that ownership to the. Crown under the sanction of an Act of Parliament. In the United States this question has been considered. I do not wish to elaborate it, but it has been held that in some of the States the State is entitled to some express charge upon the rental value. A servitude is defined under the Justinian laws as certain portions or fragments of the right of ownership separated from the rest and enjoyed by persons other than the owner himself. Under the Feudal system, which has operated under cur land tenure here, it is enjoyed by the Grown. As a matter of fact, that servitude was originally taken by the Crown direct. When the old Feudal service was abolished and converted into a money payment, the money payment, which was called scutage, or escutage, was levied directly by the Crown, which was the reversioner or owner of the rent which had been commuted into a money payment. Parliament interfered at about the time of Charles I., and by an Act which was passed took over the collection of that money payment; and that has been described as the true basis of the English land tax - which, in 1692, was commuted into a payment of 4s. in the £1 upon the rental value of land. I suggest that point to the consideration of the Crown Law Department. I do not think that it affects the constitutionality of the proposed tax, but it is a matter that has been mooted in America in connexion with the power of a State to’ tax land the ownership of which was vested in the Federal Government. In the United States, where the lands before sale were Federal, in the case of Witherspoon v. Duncan, reported in 4, Wallace, page 2io,- it was decided that -
The power of a State to tax exists as soon as the ownership is changed, and this is effected when the entry, is made on the terms and in the modes allowed by law. Such lands are, under the laws of the State, properly chargeable with State taxes from the date of the first entry
My opinion is that this principle is purely academic. I do not think that it affects the constitutionality of the proposed tax ; but, generally, the question has been considered from the following points of view : Is there, under the Constitution, a rule of uniformity that has been broken, or is there discrimination between States and parts of States? Is there a violation of the provisions of section 99 of the Constitution, which prevents us by our revenue laws from giving a preference to one State or part of a State over another State or part of a State? Or is this under the guise of taxation really a Bill in relation to land settlement - which brings us back to the dictum of the High Court in The King v. Barger that, as laid down by the Chief Justice - :
In determining whether a particular law is or is not within the power of the Commonwealth Parliament to enact, regard must be had to its substance rather than its literal form.
The indirect effect and motive are irrelevant. There is on the point of uniformity no express provision in our Constitution that a tax must be uniform. There is a provision as regards discrimination, which I have mentioned. In the United States, however, there is a provision that a tax must be uniform. In the United States taxation is divided into direct taxes, duties, imposts, and excise. Thus there are four classes of taxation. The rule as regards direct taxation is that it must be in proportion to population. Then there is the rule of uniformity. Indirect taxation must be uniform. The object of the provision as regards direct taxation being in proportion to population is to prevent the power of numbers being unduly oppressive to accumulated property in particular States. In the case of Pollock v. The Farmers’ Loan and Trust Company, Chief Justice Fuller states the principle -
Nothing can be clearer than what the Constitution intended to guard against was the exercise by the general Government of the power of directly taxing persons and properties within any State through a majority made from the other States. It is true that the effect of requiring direct taxes to be apportioned among the States in proportion to their population is necessarily that the amount of taxes on the individual taxpayer in a State having the taxable subjectmatter to a larger extent in proportion to ils population than any other S’tate, but this inequality must be held to have been contemplated and was manifestly designed to operate to restrain the exercise of the power of direct taxation to extraordinary emergencies, to prevent attack upon accumulated property by the mere force of numbers.
The Supreme Court held that the law made provision against confiscation; but really, as regards basing the tax upon population, as in the case of a good many imposts, the rule would work injustice. If, say, an income tax were declared to be valid, you would have to apportion the tax on a population basis between the States, whose populations might be such that the wealth of one State might be by no means as great as that of another, the result really being that one State would have to pay about as much income tax as another. I think that there is no rule of uniformity here. We have power to make exceptions. Parliament has, undoubtedly, the power to select a class. It is only restrained in doing that by the rule that it must not encroach in its ‘election of a class upon the reserve power of the States. To do so comes under the other principle that a tax must be a tax, and not in substance something else.
– Does the honorable member say that we could impose differential telephone rates if we chose?
– I think so; but not as between States or parts of States. I do not want to be led off the track by dealing with that point, but I think we could do so. There is no rule to say that we cannot differentiate. We can select a class. Not only can we, according to Cooley, whose work is the leading authority on the subject, select a particular class for taxation, but even we may differentiate between the members of a class. The point has really not been decided in America. I am giving the views of particular authorities, but the terms of our Constitution are not identical with those of the United States Constitution.
– If that be the true constitutional doctrine, we could impose differential postal and telegraphic rates.
– I am putting what I believe to be the correct interpretation of the Constitution. After some pretty close study of the competent authorities - and there is, under our Constitution, no rule of uniformity similar to the American rule - I say that the American principle of uniformity applies to only indirect taxation. The other principle is that of discrimination between States and parts of States, and the High Court has held that “parts of States” does not necessarily mean parts of different States, but may mean differentiation between a part of one State and another part of the same State. It does not seem to me that there u> any differentiation necessarily involved in the tax proposed by this Bill. The uniformity rule laid down by Mr. Justice Field, in the United States, was as follows -
The uniformity thus required is the uniformity throughout the United States of the duty, impost and the Excise levied. That is, the tax levied cannot be one sum upon an article at one place and a different sum upon the same article at another place. The duty received must be the same at all places throughout the United States proportioned to the quantity of the article disposed of or the extent of the business done.
In the Colonial Sugar Refining Company’s case, which was decided by our High Court, it was held that it was not a breach of the rule against discrimination under our Constitution to allow an exemption of a tax paid under a State law as against an impost levied -by the Commonwealth upon sugar. The company was allowed credit for sums previously paid under the State law, and it was field that that could be done, although the company would gain a large credit in some States, and in others, none. That was not a breach of the rule as regards discrimination contained in the Constitution. The High Court said -
The rule laid down by the Act is a general one applicable to all States alike, and the fact that it operates unequally in several States arises, not from anything done by Parliament, but from inequality in the duties imposed by the States themselves.
The only point that appears to me to render the matter a little doubtful is this - is this in substance land legislation? Upon that point the High Court will ask - what is the necessary effect of it? Also, is a class selected, or is it created, for the purpose of the tax? Is this really a tax that has been imposed for taxation purposes, or a tax for another purpose? That consideration may affect the constitutionality of the measure. But there may be a distinction between a land tax on a class already found, and the creation of a special class for the purposes of a particular taxation Act. I do not desire to trespass any further upon the time of the House. The subject is, however, an important one, and that is perhaps a justification for entering with some little detail into matters that might otherwise have been brought forward in Committee. I believe, as I have said, in true reform upon this matter. I do not believe in confiscation. I believe that we ought to respect interests that have grown up under the assumption that they would not be suddenly disturbed - interests not pertaining to one or two persons, or to a class, but which are diffused among those who have competencies in Australia, people of moderate means, represented by such bodies as the Australian Mutual Provident Society and the numerous investment societies throughout the length and breadth of the Commonwealth. By adhering to the power to tax land values without any exemption, you would be observing the true principles of political economy to which reference has been made ; such taxation would involve no injustice, while it would create an inducement - a compulsory inducement, if I may put it so - to large land-owners to subdivide. In that way it would bring about a reform without any undue oppression of a particular class.
.- I regard the proposal now under consideration as the most important one which has ever come before this House. In dealing with the land question we are dealing with a fundamental economic question, which comprehends far more, as far as the people are concerned, than did the Bank Notes Bill, which I do not consider as trenching upon any economic principle at all. This measure undoubtedly does. So far as its constitutionality is concerned, I do not pose as an expert authority ; but nevertheless it seems to me that the objections to the measure on that ground are not properly based upon the Constitution, which states that we have power to tax, but so as not to distinguish between States and parts of States. That this proposal does not distinguish between States and parts of States in the sense conveyed by the Constitution, seems to me to be clear. I have heard it argued that it is most unfair to apply the same rate of taxation to very fertile lands in the best portions of Australia and to the arid or partially arid, areas in the back country. But those who argue in that strain lose sight of the automatic incidence of the proposal. If land is worth little, the tax will be little, but if it is worth much, because of its juxtaposition to market or other causes, the tax will be proportionate. The thing adjusts itself, and there is no differentiation. We are not imposing a tax on land as land, or saying that so much land shall bear so much tax. That obviously would be unfair; and, therefore, we provide that so much value of land shall pay so much tax wherever the land may be.
– That is precisely what the Bill does not do !
– If it requires 1,000 acres in some distant part to make up a certain value, and one acre in another part to make up the same value, the one acre will be asked to pay the same tax as the 1,000 acres.
– Provided it is over the £5,000 exemption.
– That is admitted.
– That is the “ fly in the ointment.”
– I am discussing the Bill, and pointing out that we do not make any differentiation, as is alleged by opponents of the measure - that what we do is not differentiating but securing the proper incidence of the tax.
– Under the Bill, good land may be exempt and bad land pay the tax.
– If good land has a certain value it will be taxed, and the same in the case of bad land. The Bill may operate somewhat harshly in the case of city lands which are being put to their best possible use, but not so harshly as is supposed. For instance, the most valuable city blocks may run up to £250,000 in unimproved value, as is the case in Sydney, in one instance, to my knowledge. Above £70,000 in value land will bear a tax of ocl. in the £1, and, in addition, the owner has to pay id. in the £1 municipal tax and is. 9d. in the £1 on the rental value, but the latter is assessed pretty low, and the tax in that connexion is not one-twelfth of what would have to be paid in the case of a 5 per cent, tax on the unimproved value. The rental value tax of is. 9d. in the £1 comes to about £1,300 per year, whereas a 5 per cent, tax on the unimproved value would mean about £12,000 a year. Seeing that the tax of 6d. in the £1 will only operate on values over £70,000 or £80,000, it is no great hardship, and, after all, we are only asking for equality of sacrifice if not equality of taxation. Where great wealth has accumulated in this way, it is due to the monopoly of the lands, which has made the people an easy prey, owing to the bar to natural access ; for in this way the labour market has become glutted, and made the exploitation of labour easy. Exemptions are made with every justice, especially in regard to country lands. When men are applying all their energy to the development of their lands, it would be unfair to impose on them another tax unless we re move some of the burdens they already bear. I am aware that this is a view not often expressed, but it appeals to me as being perfectly logical. There are vast areas of land, as good as those which are being intensely tilled in many parts of the country, not used at all except as sheep walks, and it is only fair that the owners of the latter should bear their proportion of the cost of government. The man who tills his land as it ought to be tilled is helping to pay the cost of government in various ways, and the man who is not tilling his land is certainly not assisting materially to that end.
– Does the honorable member not think that the owner who uses his land for grazing would be perfectly willing to let it for agricultural purposes, in order to bring about the same result?
– I am quite certain that in many cases owners are not prepared to let their land - they will not be bothered with tenants. Not long ago, a man in my electorate said that he could make 100 per cent, by letting his land, or putting it under agriculture. He could get a return of 30s. an acre from land used for agricultural purposes, but it would cost him 30s. an acre ; whereas, by spending is. an acre he could get a return of 18s. an acre with sheep. In the latter case, he makes eighteen times what he spends, whereas with agriculture he can only make twice what he spends. No doubt, he could make more money by letting; but, as I have said, he will not be bothered with tenants. There may be such cases as those suggested by the honorable member for Parkes, but they are not sufficient to explode my argument. It would be unfair to ask the small man, who is paying many taxes, particularly in the shape of railway freights, to pay any more under present conditions. If we impose a tax without a reasonable exemption, we should, in justice, relieve such men of many of the burdens they now bear, and this House has no power to remove the most pressing of them. I have special instances in my mind of one or two farmers who, I know, are paying in railway freights alone more than is the squatter who adjoins them. The latter has just as good land, may be 10,000 or 20,000 acres, and if every 200 or 300 acres were paying the same railway freights as are paid by the farmer, this would be a very different country indeed, and there would be no need for this
Bill. We are not only suffering from lack of population, but from lack of general development, and revenue, owing to the fact that these large land-owners are escaping their just obligations, and making the small man always bear the burden. I could give concrete cases, but it is hardly worth while taking up time. It is plain to all that the small man, who is intensely cultivating his land, pays more, in proportion, to the revenue than does the big man. The basic principle of the Bill forms the A B C of political economy. The people have a right to the unearned increment which has been created as the population has grown and the country has been developed. Whoever has done any work in this country has helped to create land values ; but I need not enlarge on that point, because it is now an accepted axiom that the people have the right to the values they create. The trouble is, I admit, that there are vested interests which have grown up in the unearned value. Land bought for a mere song may be now worth a thousand times its original value, and has been bought and paid for, and at its present price. Many life assurance societies and other financial institutions depend largely for their income on the interest derived from such values; and if we were to appropriate the full unearned increment, to which we have a moral right, we should undoubtedly dislocate society. That, however, we do not advocate; in fact, if anything, we have been’ too careful in the incidence of the proposed taxation, which is so adjusted that it will not precipitate large areas of land on the ‘ market. The economic rental is considered to be ]S. in the £i, but we have not asked for this, or even half of it, until the land is something, like £70,000 in value. If we had sought to impose a tax of 6d. in the £1 on all estates of £10,000 in value, there might have been something in the assertion that we were going to destroy land values, undermine the financial fabric, and precipitate a crisis. If we sought to impose such a tax, we might be doing greater injury to the poor man than to the rich, though all would suffer. We do not propose anything of the kind, but, because we seek to differentiate and make distinctions, the Opposition at once say the tax is unjust and unfair. I claim that the view I put forward is the correct one, and that we are now seeking, in a discreet and careful manner, by means of a graduated tax, to get for the people a fair proportion of the values they create, without destroying securities, or bringing about any financial crisis. As time goes on, and more land is wanted, we shall have to deal further with the land problem ; indeed, it will have to be dealt with again and again, because values are constantly accruing, and necessitating re-appraisements. I agree with James Russell Wallace, that we should have a. Doomsday Book, registering the value of all lands, and decree that, from a given date, all increase in value should go to the Crown. Due notice should be given, so that there may be no danger of vested interests springing up; and thus we could safely and rightly secure land values for the public. That, I believe, will be the solution of the great land problem, but, in the meantime, we must do something. We require people and money, and we can only obtain both by the proposals in this Bill. I am not conversant with all the data in regard to the lands throughout Australia, but we all have a general knowledge; and I am convinced that there are too many broad acres of idle land. If any further proof were needed, a glance at the map on the wall of this chamber should convince us that the country is not settled as it should be, but that, on the contrary, we are simply flaunting ourselves on an empty continent.
– Which party has done most to keep people out of the country?
– Those who hold the idle lands are partly responsible; but, seeing that the Government have the power to alter the conditions, past Administrations are also absolutely responsible.
– The honorable member’s party have tried to prevent the immigration of our own kith and kin for the last ten years.
– The honorable member is uttering one of those half-truths, which is worse than a lie. If we have done anything to prevent people coming here, it is because we did not desire that they should enter an already glutted labour market, and become merely flotsam and jetsam in Australia. We are not opposed to immigration; indeed, we are anxious for it. I quite recognise that we must have more people in Australia. I say that this measure is the best step so far taken by any Government in this country with a view to bringing the people here whom the honorable member for Parkes says we are anxious to keep out of this country.
– I wonder whether the Prime Minister had something of that kind in view when he lunched with the Chinese Consul the other day?
– That is a very petty reference, but it is worthy of the honorable member for Parramatta.
– He had a big. lunch at a Chinaman’s expense, but is opposed to bringing English people out here.
– Order. The honorable member for Parkes must not interject.
– I desired to help the honorable member for Macquarie.
– We desire the introduction of white men, but I am well aware of the partiality of the honorable member for Parkes for Chinamen.
– He has only done what the Prime Minister did.
– On the occasion referred to, the Prime Minister showed a courtesy befitting his position. He has never, to my knowledge, advocated the introduction of coolies.
– Order. The honorable member must not follow that line of argument.
– I can only speak in this matter from personal knowledge of New South Wales, and I say that the condition of affairs there is such that it should no longer be tolerated. It has reduced us to the parlous state that we should be unable to hold this country if our possession of it were challenged. We do not desire that international complications should arise, which may result in our right to Australia being disputed. I believe that land that is not used is fair game for the nations of the world, and, if we do not do something to increase the population of Australia, we may be required to cede it to some other nation as the price of peace in the Old World. I am quite at a loss to understand the opposition which is being shown to a measure which must have the effect of improving our condition in this regard. It must promote the security of the country and increase its wealth. It is impossible that it should have a retrogressive effect. I find that in New South Wales to-day, 5*j773)357 acres have been alienated, or are in process of alienation; 36,553,466 acres have been alienated absolutely. This acreage has been sold by the Crown for £62,380,441, of which £7,950,874 are still owing to the Crown, which gives’ an average of £1 4s. per acre. From my point of view, it does hot matter much whether land is sold or leased so long as the Crown retains the right to tax it; but I say unhesitatingly that one of the evils of the past has been the disposal of these lands at ridiculous prices. Land should never have been sold outright at £1 an acre in this country. It should not be forgotten that the lands which have been alienated represent the eyes of the country. It is natural that when they had a choice, purchasers preferred to secure land from’ which they could make most. The disposal of our lands at nominal prices has given rise to great evils, and it is quite time that we came along with a corrective measure.
– What area has not yet been disposed of, or is still under lease ?
– In New South Wales there are at present 128,390,868 acres under lease. I propose to deal with Crown leases in a minute. They are not, I am sorry to say, included in this Bill. I think they should be. I find that in New South Wales the cultivated area represents only 1.4 per cent, of the total area of the State. That fact alone should be more convincing as to the necessity for some such measure as this than any argument I could use. The number of people who have holdings of over j 0,000 acres constitute 0.86 per cent, of the total occupiers of land in the State, a very small percentage, while the land they hold constitutes 43.7 per cent, of the total area alienated. In 1909, 24>I33 people held from 1 to 15 acres each; 31,014 held from 16 to 200 acres each, and 718 people held over 10,000 acres each. To put the figures more concisely, while 55,147 occupiers of land in New South Wales have only 2,831,833 acres amongst them, 718 people in that State hold 22,075,268 acres amongst them. These figures should ‘convince honorable members that something should be done L”> break up the monopoly in land. We cannot hope for the population we require while such a state of things continues to exist. It must be admitted that the fact that 718 people hold over 22,000,000 acres of land, while 55,000 people have to be satisfied with 2,000,000 acres between them, represents a glaring anomaly arising out of the existing land legislation in New South Wales. There has been no improvement, to speak of, in the condition of - things to which I refer. Honorablemembers opposite have asked who is re-, sponsible- for. this condition of affairs, and
I ask who can be held responsible but the Governments of the country in the past. Surely it rested with them to alter such a condition of things? But the State Governments have neglected to fulfil their obligation, and, though for fifty years they have had opportunities to devise some more effective and equitable system of land settlement, they have never taken advantage of them. Apart, altogether, from our immediate financial needs, this Bill deals with a national question. Our population must be augmented enormously if we are to continue secure in our possession of this country. Patriotism alone should be sufficient to convince those whose personal interest may prompt them to oppose this measure, that it is necessary there should be such an alteration in the existing condition of affairs as we propose to bring about.
– Have not the people of New South Wales displayed patriotism ?
– I have been dealing with the state of affairs in New South Wales.
– They sent their representatives to the State Parliament.
– I am a representative of New South Wales, and have been sent here chiefly because the State Parliament has permitted the condition of things to which I have referred, to continue, year in and year out. I am here with a mandate to see that that condition of affairs is altered.
– The honorable member has not been sent here to frame a land policy for New South Wales.
– I have been sent here absolutely for that purpose. I told the electors what we proposed to do, with the result that I secured a larger majority than when I stood for the electorate before. The electors were enthusiastic about having this question dealt with by the Federal Government, in view of the fact that the State Governments of New South Wales have delayed dealing with it for so long. In the State Parliaments there are Upper Houses, comprised of men holding large vested interests, and very often packed with gentlemen whom the country has rejected, but who are put into the Upper House by the Government of the day to legislate for the rest of their natural lives, without let or hindrance, because they are beyond the reach of the people. The Upper House in the State Parliament of New South Wales has been one of the main obstacles in preventing the settlement of the land question. The people of the State have recognised that drastic legislation on the question is hopeless unless they send to Parliament men from amongst themselves who are familiar with the condition of affairs and are prepared to deal with it. New South Wales has sent so many members of our party to this Parliament, because we are the only party that has attempted to grapple with the problem by the introduction of a measure which has been effectively prevented by the influence of vested interests in the past. Referring to the condition of things in New South Wales, I may quote the following short letter which appeared in the Sydney Daily Telegraph a couple of days ago under the heading, “ Gambling in Land “-
Sir,- A short time ago the question “ What is gambling “ was discussed in the columns of your paper. It never appeared to cross the minds of any of your correspondents to quote the Government method of apportioning land opened for socalled selection.
True, you may go and view the land, or may carefully choose your plot from the plan; you may pay down your fee and fill up all the necessary forms, and yet are no nearer gaining the land you wish for than if it was first prize in a Tattersalls sweep.
The marbles are shaken up, the numbers called ; all right for the few lucky ones, but what of the other disappointed competitors, who go into these Government sweeps time after time and get nothing ?
Why put down Tattersalls and other gambling and legalize this injustice ? Only this week there were 626 applicants for 21 blocks of land. It is time some of our parliamentary representatives took this matter up, and some arrangement made whereby those disappointed time after time should have prior right in next block thrown open.
Is it any wonder that so many in want of land flock into Queensland, where they are received with open arms and land made easy of acquisition? This is not an idle complaint but an experience, and I trust some abler pen than mine may be inspired to help where help is needed. - Yours, &c,
That is the voice of one New South Wales selector, and his experience is but the experience of very many others in that State. My own experience of the same kind has made me a most ardent advocate of such a measure as is now proposed by the Government. I have seen young fellows whom New South Wales would be proud to retain amongst her yeomen, and who have spent all their substance in going round the country balloting in vain for land. They have been driven to work as labourers, and have so assisted to flood the labour market and bring about the state of unemployment which is one of the greatest social evils of to-day, and which I trace back to the land monopoly we are attacking in this Bill. The honorable member for Angas referred to what he described as the involved proposal to tax lessees who hold land from private owners. I admit that the provision is somewhat involved, and it might be possible to devise some other way of making the owner entirely responsible, and letting him fight the matter out with the lessee. I have heard, however, that that might complicate matters considerably, because so many owners have lessees in their grip, and they would simply pass the tax on. In some cases it is possible that the lessees have the landlords in their grip, and, having secured their land at a nominal figure on the understanding that they would put certain improvements upon it, it would be unfair if they were permitted to leave the owner to pay the land tax when he might be getting nothing to speak of out of the land and waiting for his reward until the close of the term of the lease. Such cases call for some special legislative provision, which is attempted in this Bill. If we were to leave the owners and lessees to fight it out between themselves an injustice might be done to one or the other. That seems to me to be the only justification for attempting to deal with the matter in this Bill, but the House must decide whether it will accept the proposal made or not. Apart from the case of lessees from private owners, we have to deal with a larger question of taxing lessees under the Crown. I strongly advocate their inclusion in the Bill, as the only way in which we can tax the land values they control.
– What does the honorable member wish to do with them?
– I wish to see that the public shall not be robbed by means of long leases given to individuals who grow wealthy upon them, and pay practically nothing for them.
– That is a terrible crime.
– I do not wish to be misunderstood. It is no crime to grow wealthy. The crime is that the Crown lessees grow wealthy at the expense of the people, and are virtually robbing the people of values which they have no right to possess.
I do not blame the individuals who take the leases.
– The honorable member called them robbers. He said they are robbing the people.
– The honorable member is mistaken in thinking I called them robbers. The phrase “robbing the people” is a general term. I did not say that the men who hold the land are personally robbers. I am not a saint myself, and probably if I had the opportunity I should take a lease. Who would not do so if the law permitted it? As regards the people’s interests, we must see that no one is put into a position to take advantage of the people by appropriating values which rightly belong to the people.
– Would the honorable member break the leases which have been solemnly made?
– Where it can be shown that a lessee has large areas of good land for a mere song, it is time that some review took place, and some higher charge was levied. We saw a little while ago in New South Wales the sort of administration that the lands were under. We learnt how men were prepared to pay £5,000 and £10,000 as a bribe in order to get a lease from the Government for a number of years at a mere song. Is not that an evidence in itself that the lessees are better off in many cases than the freeholders?
– Then the honorable member would repudiate the leases?
– It is not a question of repudiation, but of saying, “This land is being held at such a nominal figure that the people are virtually being robbed of their rights, and we must ask you to pay a certain tax, represented by the difference between what you are paying, together with the improvements that you may have put on, and which will be counted as rent, and what the land is really worth.” Only the other day I heard of a man who boasted that, on a lease which he had obtained, he made £40,000 in one year. Of course, I know that that may not happen every year. He might strike a year in which he would lose £40,000. You have to take the fat and the lean, but I do say that there are many cases where the conditions under which land is held by lessees require reviewing. In New South Wales alone, out of the total area, while only 51,000,000 acres of land is alienated, 128,000.000 is under lease, and a great deal of that unearned increment, that publiclycreated value, which we should levy upon, will escape us unless there is some provision by which Ave can reach it.
– Does the honorable member include in those figures the 80,000,000 acres of western lands?
– It is all included. I have lived in the country, and know that western land. One of the big troubles there is, that men have too much land. In their greed they have grasped the whole countryside, and cannot manipulate it. 1 have repeatedly seen smaller men get 10.000-acre blocks and make money, whereas the big holder with 200,000 acres has been in the hands of the banks all the time. He has had to keep a £100,000 mortgage going; perhaps he will reduce it to £50,000 in one year, but it will be up again to £100,000 or more in the next, because he cannot look after the land. The smaller man with a 10,000-acre block attends to it. He sees to the provision of water, and to subdivision, and scrubbing. In short, he controls it better generally. I know of numerous cases in which men with smaller blocks are making money in the far west of New South Wales while the big holders are in the hands of the banks. That seems to me to further justify what I claim, the right of inquiry into the leasing system. Will the honorable member for Parramatta say that those leases which were disposed of some time ago under bribes should be allowed to go unchallenged? I am sure he will not. We do not know how many similar cases have gone undetected.
– I quite agree with the honorable member. That is one of the things that are most to the detriment of the honorable member’s party, who permitted them.
– I do not know what the honorable member is alluding to. I am answerable only for myself.
– The honorable member would punish the just as well as the unjust.
– There is no attempt to punish anybody. There is an attempt to get justice for the people, and nothing more. Where a man is paying a fair sum for his lease, or where the improvements which he has to effect are equivalent to a fair payment, then there should be no further charge; but where it is obvious that lessees have got bargains - and we know that they have got bargains and are holding them now, many a leaseholder being better off than many a freeholder - we should have the right of review. Unless this Parliament gets that right the matter will never be attended to, because I have pointed out the difficulty of getting justice in these cases from the State Parliaments on account of the Tory Upper Houses, where men with these interests at stake themselves are legislating out of the reach of the people for the rest of their lives. I find in regard to these vast areas of leasehold land that the Government received last year from 128,000,000 acres only £604,707 in rent, which pans out at about i£d. per acre. That seems to be a ridiculously low average.
– And does not the honorable member know that some of them forget to pay that?
– I am referring to amounts that have been paid. I have seen cases in the Macquarie electorate where men have had a large area of land at id., or i£d., or 2d. an acre rental, and when, after constant agitation, it has been available for settlement, the Crown has had no difficulty in getting 6d. an acre, men being willing to pay even more for it, because it was good, arable land. All these facts surely emphasize the need for this Democratic Government - which is the only one prepared to grapple with the problem - taking a hand in seeing justice done to the people.
– The honorable member says that justice cannot be done.
– We should do it as far as possible.
– Is not the honorable member afraid to talk this stuff, coming, as he does, from a country constituency?
– I won my seat by talking “ this stuff.” The Leader of the Opposition said (hat we did not apply taxation to stimulate industry or for the public welfare. Apparently, according to the honorable member, we simply apply taxation to get enough money to carry on the Government. I hold that there are great economic principles involved in the methods by which we raise money to carry on the affairs of the country. By imposing taxation in one form we do harass development, prevent the country from coming to its own, and the people from getting ‘ an opportunity to make it what it ought to be. But if we apply a tax in such a way as is indicated by this measure, we stimulate all forms of industry. If there is one system of taxation more than another which results, not only in raising revenue, but in increasing prosperity, it is the system of unimproved land value taxation, because by it we make it unprofitable to keep the natural resources of the country idle. That is an economic truth which I need not labour, because I am sure honorable members opposite fully recognise the great advantage of a land tax to be that it stimulates industry, and practically forces prosperity. It must do so. Once you make it unprofitable to hold usable lands idle, you confer the greatest boon upon the community that any Government can confer. If we can do this by taxation, then that form of taxation stands alone as being the most desirable form. I therefore combat the sentiment of the Leader of the Opposition, that we do not apply a tax to stimulate industry, or to promote the public welfare. We emphatically do so in applying a land tax. He further said that this tax would operate to the extent of taking 25 per cent, of some people’s incomes, and 50 or even 75 per cent, from others. If it will do that, it proves conclusively that some people hold land at an infinitesimal part of what it is worth. It proves that or nothing. If the tax is going to cut into their income to that extent, it only shows at what ridiculous rates they must be holding the land, and that they should be paying a good deal more for it, or making a good deal more out of it, because we levy on its value. I am fully aware of the fact that many men with large areas do notmake as much as do others with small areas, but that is their fault, and not the fault of the land. That is the very thing that we are suffering from. Men are not putting the land to its best purpose, and are not making as much out of it as could be made. I do not mind them making more out of it so long as they use it. If our tax is going to take so much of their income, it will at once have the effect of inducing them to do something more with the land, and making it produce greater wealth than it now does, so that the percentage named by the honorable member will be considerably .diminished, and, instead of taking 25, 50, or 75 per cent, of their income, we shall be taking _what would be a reasonable thing, namely, about 1 per cent., according to the tax. The tax is levied on the value of the land, and not on the amount of money that a man, by his indifferent handling of it, may make out of it. The Leader of the Opposition also said it was for the people to say whether this tax shall be applied. In the name of all that is sacred, have not the people said it? What was the last appeal to the people about? Was it not upon this very question ? Have we not been sent here to do this very thing? And shall we stay our hand, now that we are here? The suggestion is altogether ridiculous. We are here to do, and we are doing now, what we were sent in to do. I shall not agree to deviate one tittle from what It was proposed to do, and I am sure that not a member of this party would do so. The taxation of Crown lessees, according to the Attorney-General, is a sound principle, only to be ignored because the game is not worth the candle. I do not agree with him. I consider the game is well worth the candle, and I hope that, ere long, there will be a complementary proposal which will embrace lessees.
– What about the Northern Territory lessees?
– I see no reason why they should not come under review. From what I saw when I was there, I am satisfied that those who hold them are doing very well out of them. When the trans-continental railway comes, and the Territory is taken over, the time will be ripe for some special measure dealing with the Northern Territory lessees. I need not add that I hope this measure will pass, because, of course, there is nothing surer. I am speaking to it only because I think we owe it to the House to express our views on the subject. If the Government are not going far enough, or are going too far, and if we differ from diem, we have a right to say what we think, as men having individual opinions, and that is what I have done.
– We are getting more light on this question as the debate proceeds. When .die Prime Minister moved ‘the second reading of the Bill, he took particular pains to assure honorable members that it was a taxation proposal. No doubt, from one point of view, that was the best policy he could adopt, because he was desirous of avoiding anything that might be construed into unconstitutionality, so far as the intention of the Government was concerned. But later on, we had a fuller and more explicit exposition of the Government proposals by the AttorneyGeneral. His argument from beginning to end was that this Bill was intended to burst up big estates, to bring about spoliation, confiscation, and if it were parliamentary to do so, I should say something very little short of daylight robbery.
– The honorable member must withdraw that expression.
– I said that “if it were parliamentary to do. so.” I should thus describe it.
– The honorable member must not use the term “ daylight robbery “ under that cover.
– Very well, I withdraw the expression. Later on, I shall show that the Government proposals are contrary to every principle of British freedom and British justice - that they approach so nearly to the lines of revolutionary politics that it is impossible to point to any other Parliament in the world in which similar proposals have been submitted. The Attorney-General, after occupying an hour or more in dealing with the Leader of the Opposition, in his official capacity, and not as an opponent of the principles of this Bill, occupied another hour in dealing with three or four of its salient points. He said that immigration, without bursting up estates, was “ only empty babbling and a beating of the air.” He also said that no State could say, “ Here is land to go on, come and occupy it, and we will give you a hearty welcome.” He added that the shadow of this Bill had done more to promote immigration than all the other efforts put together for the past quarter of a century. He further declared that capitalists and the wealthy classes are treated better in Australia than in any other part of the world. I say that these statements are either entirely contrary to fact, or they need a very great deal of qualification. But since the position has been placed before the House by the Attorney-General, we have had a most remarkable statement - and I take it to be an exceedingly honest one, because it was uttered with a good deal of the accent of conviction - from the honorable member for Macquarie, who affirmed that the proposals of the Government are not drastic. If they are not drastic, I should like to know what proposals of a drastic character would be. I believe that, in speaking as he did, the honorable member represented not only his own political principles upon the land question, but those of a great many of the party to which he belongs. He said, in effect, “ Our views upon this question have been utterly misrepresented in that our opponents have declared that by means of the legislation proposed, we shall create prac tically a panie - that we shall cause estates to be thrown upon the market wholesale, and that we shall destroy land values. We shall do nothing of the kind. By imposing a tax of 6d. in the £1, we shall be merely tickling the land-owners.” He then proceeded to indicate his own political faith upon this question. From’ the beginning to the end of his speech, the idea which he conveyed was that drastic legislation would only be enacted when the whole of what he was pleased to term the “ unearned increment “ - that is to say, not 6d. but is., in the £i - was appropriated by the Government and appropriated upon righteous principles.
– That applies to future values.
– Let me tell the honorable member that that is the single tax system, pure and simple, and his statement from beginning to end betrayed a complete and absolute sympathy with the principles underlying that system. Let me also add that he is mightily inconsistent. A single taxer is infinitely less to be feared than is the honorable member, because the former when he proposes that the Government shall appropriate the unearned increment also proposes to afford the producer or land-owner corresponding relief at the Customs House. But the honorable member, whilst preaching single tax principles, is a member of an exceedingly rabid Protectionist party which desires to swamp the producer at the Customs House and then to tax his land up to the hilt. Some honorable members are perfect gluttons in the matter of taxation. The honorable member says that he was returned to this Parliament because of his political principles in this connexion. His statement illustrates how very unsuspecting are the masses of the people. They do not see even a little below the -surface. In referring to the “unearned increment” the honorable member cited illustrations of men who have received land from the Crown at an upset price of, say, £1 an acre - land which in ‘due course has increased in value to £3, £4, or £5 per acre. But he failed to take into account the enterprise, the capital, and the industry which have been put into that land by the individual holders, just as he has failed to take into consideration the facilities which have been offered by the State Government to create those enhanced values. Much less did he take into account the tens and hundreds of thousands of acres of the cream of Australia which have been purchased at full market values, and for which the present holders have paid cash.
– I did mention them.
– The honorable member did not differentiate between them, and in this connexion he cannot differentiate. Therein lies the evil of the Government proposal to levy land taxation on the principles laid down in this Bill. If the measure becomes law, as I have no doubt it will-, there will be enough spoliation-
– There has been enough.
– Let me tell the honorable member that if the Bill becomes law, it will effect sufficient spoliation without recourse being had to more drastic proposals such as the honorable member for Macquarie would like to see adopted in the future, because when the Government appropriate 6d. in the £1 upon land values they practically appropriate onehalf of its capitalized value As surely as the sun shines the Bill will operate very differently from the way in which the honorable member anticipates that it will operate. As a matter of fact, its effect must be to force estates in all directions into the market for realization purposes. Thus it will reduce not merely the values of estates which are held by the wealthy in the community, but the values of all estates. Land values are regulated in the same way as every other commodity is regulated, and we cannot reduce the value of big estates without relatively reducing the value of every acre of land from one end of Australia to the other.
– That is a big order.
– We shall all have to suffer alike.
– We shall. I am merely pointing out that my honorable friends are exceedingly inconsistent. Their attitude reminds me of a statement which was made by an old clergyman, who said, “ There is nothing more inconsistent in this world than human nature.” The honorable member for Macquarie has been talking about “ trafficking in land.” “land gambling,1’’’ and ‘“land speculation.” He has referred to the Labour party as the only party which has been courageous enough to tackle this big problem. To my mind it does not require a very great deal of courage for a party to attack the “ other fellow “ - to penalize him whilst escaping themselves from the consequences of such legislation. If it were parliamentary to do so, I should characterize such conduct by an appropriate term. But whilst I have no desire to transgress the Standing Orders, I intend to speak as plainly and unmistakably on this question as it is possible for me to do. I tell the honorable member for Macquarie that he must not hold up the party to which he belongs as one which represents all that is pure and virtuous on this particular question. In the matter of land gambling and land speculation, if there be any pitch about, the Labour party is touched with it, just as much as is any other party in Australia. I know members of that party who are land nationalists, who never weary of talking about land nationalization principles, who never grow tired of explaining that the unearned increment belongs to the Crown and should be appropriated by it, but who nevertheless within the past two or three years, have been trafficking in land and making considerable Sums of money in- every direction.
– The honorable member ought to make that ‘statement at the Masonic Hall.
– 1 shall say what is true without going to the Masonic Hall to say it. I can prove every word that I have uttered. I do not condemn - and 1 have never condemned - the members of the Labour party to whom I refer for making money in that way, because existing legislation has prepared the way for them to make it.
– It is all in the game.
– The Minister of Home Affairs knows all about it, and what I like about him is that he does not attempt to conceal the fact. He says, in effect, “I am on the make.” But when I hear honorable members talking about the unearned increment, not from the tar barrel, or on the Yarra Bank, or in the Botanic Park, but in remote corner-? of the State, when I hear them talking to farmers and farmers’ sons-
– That is what the honorable member does not like.
– I do not like it, because I do not like hypocrites. I hear these honorable members talking about the unearned increment which ought to belong to the States, and professing patriotism of the very highest type. At the same time- they are trafficking in these lands. In the interests of the community, this trafficking ought to be regulated more rigidly than it is.
– How would the honorable member do it?
– FOSTER.- It is gradually being done, and, as we get more experience in land legislation and administration, land trafficking will become less possible than it is to-day. These references are provoked by the remarks of the honorable member for Macquarie, who represented the members of his party as patriots and idealists. It does not require any great courage for the Labour party to advocate a measure like that before the House, though its members are very inconsistent in advocating it. The AttorneyGeneral upbraided the Leader of the Opposition for having once occupied a position different from that which he occupies now, and quoted Hansard in support of his statements. For a good many honorable members it would be a blessing were the Hansard record burned every six or twelve months. I have taken great interest in land legislation and settlement for the last fifteen or twenty years, and remember the eloquent speeches which the Attorney-General used to deliver in the New South Wales Parliament in absolute and utter condemnation of the principles embodied in this Bill. He spoke then as a land taxer, an all-round out-and-out land taxer, and a good orthodox Free Trader. To-day he advocates different principles, and furnishes another instance of human inconsistency. I think that I am not misrepresenting members of the Labour party when I say that, at heart, they are allround land taxers. But, in proposing this legislation they are not giving effect to their political faith so much as studying political and personal considerations.
– We are consistent.
– Honorable members opposite are absolutely and utterly inconsistent. Their proposals are antagonistic to the economic principles which they really hold. The honorable member for Macquarie indicated unmistakably that this measure is the beginning and not the end of land taxation, of which more will be heard. Undoubtedly, that is so. Let us inquire into the so-called mandate from the people, which Labour members allege has been given for this piece of legislation, We should know where- we are, and the people should know what the Labour party intends to do. I do not consider that the proposal to levy a land tax of 6d. in the £i was put fairly before the people.
– I advocated a tax of 8d. in the £1.
– I challenge the Labour party to deny that, generally speaking, the limit was 46. in the £1. That was the tax which the present Prime Minister advocated.
– Up to £50,000.
– Now a tax of 6d. in the £1 is proposed, up to £80,000.
– After that it should be is.
– I am glad to hear the honorable member say that, and to know that at the Trades Hall meetings influential members of the party openly declare that they do not believe in taxation such as is proposed, but desire an all-round land tax, and a pretty severe one, too. In my opinion, the electors were deceived regarding the intentions of the Labour party, but their eyes will be opened before many years pass. Had the Labour party proposed a land tax without an exemption of £5,000, the alleged mandate would not have been given. The electors did not know that this proposal was to be only the beginning of land taxation. I predict that before many years have passed the exemption will be swept away.
– Then there will be equivalent remissions.
– Where? At the Customs House?
– If protection is effective there will be no Customs revenue.
– I wish the electors to know that.
– They have been told.
– They have been told very little. When the honorable member was addressing the artisans of the cities, he told them what was in his heart, but when he and other members of the Labour party were speaking to country audiences, they told the electors something very different.
– Is the honorable member in order in making these allegations of insincerity against honorable members?
– They are true.
– The honorable member is in order.
– I am speaking unpalatable truths, and have more of them to put before the House. I am not given to making statements which are not true, and am prepared to prove to the hilt everything I say, and, if necessary, to bring scores and hundreds of witnesses to support my utterances. Certain statements were made by the Labour party before certain audiences, but in the rural districts, and when producers were being addressed, a different political faith was proclaimed.
– The honorable member should give us some instances of that.
– Instances are not needed. The honorable member, and every other member of the Labour party, knows that I am stating the absolute and incontrovertible facts.
– The honorable member cannot give an instance.
– The day is not very far distant when the electors who sent honorable members here to enact this land tax will be grievously disappointed, because the exemption of £5,000 will very soon be removed, and they will all be drawn into the net. It will serve them right, and do them a world of good. The mandate was given to the Labour party, but they did not get by any means the tremendous majority which has been claimed by a number of honorable members opposite. Their ma jority was obtained in the cities, and the large towns, but not in the agricultural and producing districts, whose people are to be specially- penalized by this measure.
– What was the honorable member’s majority against the Labour candidate ?
– It was about 400.
– That was not a big majority.
– I wish my honorable friend to know that my opponent was a very fine, honorable man ; indeed, one of the best men whom the Labour party has in Australia.
– He must be an excellent man !
– My opponent tells the truth on any day, and nothing else. He is a candid-minded man, and a gentleman, teo. He admits that he ex hausted the voting resources of the Labour party in the electorate, but the producers’ vote was not exhausted by one-half. It was owing to the utter indifference of the producers that we are confronted with our present position. I sincerely hope that the programme of the Labour party will be carried out, up to the hilt, because nothing will be so effective a medicine for the producers as to give them exactly what they deserve, and what they have invited, by reason of their utter apathy in political affairs. The Attorney-General has claimed that this measure, if enacted, will be a most attractive advertisement to induce immigration to our shores. If the bursting up of existing estates constitutes the principal ideal of this Government and their supporters in securing immigrants, then I am extremely disappointed with their ideal. Why, sir, only about 6 or 7 per cent, of the lands of Australia has been alienated, and out of that percentage not more than one-third of the acreage is held by the possessors of large estates. When my honorable friends have burst up the large estates, and induced immigrants or residents to occupy them, they will have touched no more than the fringe of the great question of immigration. The claim has been made bv the Prime Minister and the AttorneyGeneral, and sustained by honorable members on the other side, that the State Legislatures have failed immeasurably in this matter, and, therefore it is a patriotic duty on the part of the Federal Government to step in and do effectively what the States have ceased to do. I want to show the utter fallacy of such a position as is taken up by the Government in this measure. This is, as the Attorney-General admitted, a stab at the Legislative Councils. The statement that the State Legislatures, including the Legislative Councils, have failed to effectively deal with the question of closer settlement and subdivision is contrary to fact. I propose to relate the history of this kind of legislation in South Australia, and what applies to that State applies, not altogether, but very largely to most of the States. South Australia has only had a progressive land tax since 1894, and the progression is only one stage. The tax is 1/2 d. in the £1 all round up to £5,000, and id. in the £1 on all amounts exceeding £5,000. Until the last six or seven years, there has been no definite move to secure further gradations. No fresh gradations have been made so far, and the most which has been threatened has been further grades up to 3d. in the £1 on the biggest holders, but these proposals have not been realized. I believe that a year or two ago a similar tax went through the House of Assembly, but not through the Legislative Council. My point is that under the progressive principle, including only one step, most of the large estates in South Australia have already been subdivided. Not more than three of what would be called large estates are to be found there to-day which are fit for subdivision for agricultural purposes.
– What is the honorable member’s definition of a large estate?
– I mean an estate of 40,000 or 50,000 acres. In South Australia to-day, there are within the rainfall limit only three estates which comprise anything like that area. One of them is how under offer to the Government, and one-half of another estate will be submitted for sale at public auction in about a fortnight. Apart from this legislation, the process of subdivision is working out so effectively and satisfactorily in the State that within a very few years there will not be a single large estate left.
– They will not be taxed then.
– I am simply showing that subdivision may be effected in a legitimate way by the active authority of the State, whose sole prerogative it is. Some honorable members run away with the idea that because an estate comprises 50,000, or 60,000, or 70,000 acres, therefore it ought to be subdivided as a whole. They forget that in the case of some very valuable estates not more than a third of the total area is fit for the plough. On the very pick of the estates, as a rule, not more than 50 per cent, of the area can be put under the plough, because the balance is rough, hilly, stony, or in some other way utterly unfit, ,and always will remain unfit for cultivation, and must continue to be used for grazing purposes. Herein lies the weakness of the proposal before the House, because there can be no discrimination in these matters. Generally speaking, the other States are moving ahead in the matter of closer settlement and re-purchase for subdivision just as South Australia has done. Although I do not profess to be intimately acquainted with the conditions obtaining in Victoria, yet I believe that in that State alone the Crown Lands Department can give indisputable evidence to the effect that they have been purchasing big estates as rapidly as they could get rid of them to applicants. They have on hand now a good many blocks belonging to estates which were purchased two years ago. The work of repurchase and subdivision has been proceeding satisfactorily and effectively, but our friends on the other side are impatient, and want to bring about this great reform in a short space of time by the application of a drastic and unnecessary remedy. If the object of this Bill is the subdivision of land and the introduction of agriculture, then why does it apply to grazing properties which never can be brought under agriculture, or to city properties, particularly to large factories employing from 500 to 1,000 hands? In the name of conscience, where can my honorable friends opposite have closer settlement more effectively carried on than in such places? By the unjust and illogical application of this principle all round, what are they doing? They are simply taxing production every time. Everything which impairs the efficiency of working capital is a tax on production as well as a tax on the workers.
– The honorable member is arguing that there should be no taxation at all.
– There is a great difference between no taxation and taxation which amounts to confiscation in many of the grades, and which, generally speaking, can only operate as a tax on production and a burden on the people, particularly the workers. If my honorable friends are going to tax large city properties, including factories and foundries, and other businesses, they will tax persons who can pass on the impost, and will do so. But they are putting in the same category the farmer, who cannot pass on the impost. We have legislation applicable to big centres of population, in the form of heavy Customs duties. We have protection for the workers and the manufacturers, but the producers have practically no protection, while they bear practically all the burdens of taxation. My honorable friends who are red-hot Protectionists to-day are driving their little game a bit too far, and as surely as the sun shines, there will arise a solid body among the producers who will say, “ You have been riding us long enough ; now we are going to get you off our backs.”
– When we adjourned for lunch I was about to point out that this Bill, in order to preserve its constitutionality, must make no discrimination. I entirely object to this legislation at present, on the ground very clearly and explicitly stated by the honorable member for Angas, when he said that our power to impose direct taxation under the Constitution was intended to be a reserve power. That is the position I take up, and I think that honorable members, on this side of the House at all events, will agree that the intention was that the exercise of that power should be held in reserve for many years to come. I have a distinct recollection of the sittings of the Federal Convention in Adelaide. I sat out most of its meetings there, and the debates on the question of the Federal power in respect of land taxation showed that the intention of the framers of the Constitution was that land taxation should be resorted to only in case of emergency, and that the time was exceedingly remote when the land would have obligations to Federal revenue. In that, as in many other respects, the preconceived notions as to the operations of Federation were far from being correct. The power to tax implies the power to control. If we give effective power to tax, we give very effective power to control that which is taxed, and in that respect this Bill must come into serious conflict with the prerogative of the State Governments. I should far rather see the last shilling of Customs and Excise revenue appropriated directly by the Federal Government than witness an infringement of what is the absolute right of the States, and should remain for a long time to come within their own hands. I refer to the control of the lands. In this dual control - because dual taxation means dual control - the best purposes of government DY a State in the development of its own lands must be seriously hampered. The power to tax, which the Federal Government claim under this measure, is claimed by them absolutely as a power to destroy values. . No Parliament can afford to do what comes very near to the point of dishonesty, and that, in my opinion, is the position of this proposal. We have no more right to destroy the values of the wealthy man than we have to destroy the value of a poor man’s cottage. We certainly nave a perfect right to make wealth recognise its obligations in respect to the development and government of the country, and there are legitimate means of making it recognise those obligations. So far as I know, there is no country in the world that offers a parallel to what is proposed here; yet one, at least, of the supporters of the Government does not consider the Bill sufficiently drastic. A more drastic application of the principle is to come later on. Land settlement is absolutely bound up with the subdivision of estates, the augmentation of our population, and the encouragement of immigration, and I suppose that honorable members generally will admit that we have no better example of effective effort in that direction than is furnished by New Zealand. Some eighteen or twenty years ago New Zealand introduced this principle and increased the burden of taxation, so far as the gradation is concerned, in a very different way from that proposed by t.’iis Government. The New Zealand system is based on the principle that there should be no double taxation. In order to avoid twice taxing the same source of wealth, the New Zealand Parliament exempts from the income ‘tax all wealth that is the produce of land. That is to say, land users are not taxed, first of all, by a heavy progressive land tax, and, in the second place, by an income tax upon wealth derived from land that has already been taxed. The operation of the New Zealand tax is such that the burden of the big landholder there is no greater than the burden of the big land-holder in South Australia. I offer no apology for referring extensively to South Australia, because I know the conditions obtaining here, and in the interests of this debate I hope that representatives from each of the States will afford a knowledge of what is obtaining there in order to show how this principle of taxation affects the States individually.
– And the mortgagees have to pa v. too.
– That is so. But the point that I was making was that although in South Australia we have a progressive land tax of only two grades as against a land tax of several grades in New Zealand, the burden of the big landholder in the Dominion is no greater than in the State from which I come. In one of the States there is no land tax in operation. No doubt that will be rectified. But the Attorney-General said yesterday that in no other country was the wealthy man so lightly dealt with as he is in Australia. In view of my statement as to the position in New Zealand, it is not. true that the wealthy man gets off very lightly in Australia. The progressive principle is recognised in nearly every form of taxation. We have a progressive income tax which, in its higher scales, is as severe as is that of any country with the exception of the income tax of the Old Land, where that tax is raised very considerably after a heavy war expenditure. The progressive taxes on the wealth of the community are exceedingly heavy in Australia. In South Australia we have progressive taxation bearing heavily on the wealthier part of the community, and they pay .as much as do the people of New Zealand ‘where there is in operation a very heavy land tax which has been taken as a model for this legislation. In New Zealand, we are told, the object of exempting from income tax the wealth derived from land is that there shall not be a double tax in respect of the same wealth. To use their own words, the object is to bring down land monopoly, or the aggregation of large estates, and to compel owners of land to put it to the best use. In that there is something reasonable. If a tax on the same lines were proposed with a desire that land should not be held .unproductively, then it would be stripped of a lot qf the objections that are properlyraised against the tax for which this Bill provides. We need to look at this proposal fairly and squarely. If its object is to promote land settlement - to increase our agricultural population - then I admit that the ideal is one with which most, if not all, honorable members are in agreement. The disagreement is as to the methods applied to bring about that desirable end. If land is held in big estates to the detriment of the public generally, those big estates must give way. If there is a legitimate demand for land settlement - if men cannot find opportunities to employ their energies on the soil - then sheep must give way, every time, to men. I have always held that opinion, and I go further and say that I would make wealth recognise its obligations to the Crown in the shape of a payment in proportion to the advantages it enjoys in the community. I should be a supporter rather than an opponent of this Bill so long as its object were that of gaining necessary revenue, and not the exceedingly improper one of seeking to destroy a man’s estate in order that it might be bought cheaply. This question was an exceedingly attractive one at the last general election, and it can be made very attractive. Appeals were made to men having sons who would like to go on the land. They were told, “ You can get through the other fellow’s fence and obtain land in the best localities under the easiest conditions; in order to get it for you we are going to destroy its value by about one-half, and then we shall be able to give you cheap land.” Has any other country attempted anything so far remote from the principles of honesty. I hope that we shall at all times proceed on the Australian standard, keeping before the eyes of the people the principle that “ Honesty is the best policy.”
– This will act as a boomerang on the little man.
– I pointed out this morning that it would, and that when the boomerang came back there would be a big alteration in the principles now uppermost in Australian politics. But if it is desirable that settlement should be promoted, why do the Government not purchase the land honestly in the market, as has been done in South Australia, and is being done in other States? Every day we are getting more liberal, and even the much-abused Legislative Councils are beginning to recognise the importance of this question, and to approve compulsory purchase. When land is really required for the general community, it is fair to tell the owner that he is a monopolist against the public interest, and to remove him ; but he should be paid for every penny of interest he has in the land. It is not right, however, to approach this man with a pistol, and call upon him to stand and deliver - to first destroy the value of his land, and then take the land away.
– We are going to him with a Christian Act of Parliament !
– It will be a very un-christian Act of Parliament, which will reflect in every part of the world very injuriously, if not disastrously, 0:1 Australia. To adopt principles that will not stand the test of honest dealing is just about the very worst advertisement we could, have for a young nation like this.
– It will be a bad advertisement so far as the consolidation of loans is concerned !
– It certainly will not improve our position in that respect, or assist in the conversion of any of the State loans. All the States must suffer, in common with the central Government, if we adopt principles which, from the point of view of common honesty, are anything but a credit to us. I now desire to deal with the question from the squatters’ point of view. I knew that would be appreciated by my honorable friends opposite ; and I propose to refresh their memories as to the old-time hatred of the squatter, and what that hatred led to.
– The squatters made this country, anyhow !
– They did make the country ; and I shall have a good deal to say as to how they have built up and doubled the value of the flocks and herds, not only by pioneering work, but the expenditure of wealth in selecting stock from the best blood in all parts of the world, the result being that to-day wool is still king among our productions. The proposals before us create a danger of jeopardizing the future producing interests of Australia. The small men who follow grazing occupations are indebted, and prepared to recognise their indebtedness, to the big pioneering flock masters.
– It is so many years ago since the honorable member used to “ uppercut ‘ ‘ the squatters !
– I have always spoken of the squatters as I am doing to-day, and I have always advocated common honesty. If the honorable member had a big estate, his friends in the Labour party would have to give him plenty of room, because he would not see them very often.
– The honorable member was one of the strongest opponents of the squatters !
– I never was anything of the kind, and I challenge the honorable member to prove his statement from the South Australian Hansard. When a member of the South Australian Parliament, I always said that I believed in a progressive land tax for revenue purposes, but that to reduce the value of any man’s land in the way now proposed was “downright and daylight robbery.” That was the expression I used in the local Parliament, and that is the principle I have always advocated since I have fought for land settlement. First, let me deal with the injustice that is almost sure to result from this Bill. I have reminded honorable members that legislation, now in operation in some of the States, is in process of liberalization, and in all the States will very soon be so liberalized as to effectively dispose of this question once and for all. We have to regard this matter from a commercial as well as from a political point of view. All the lands held by pastoralists within the rainfall area, and the cream of the agricultural areas in Australia are being utilized to-day. These are the biggest wealth-producing forces in the way of superior stock and wool, which in volume stand at the top of our exports. It is said, however, that there should be greater utilization of such lands by subdivision. Very well ; but subdivision is not our business, it is the business of the States.
– The States will not do it!
– The States are doing it. In South Australia, there are not more than three big estates left, and the same process is going on elsewhere. There is something better to be done than the subdivision of large estates. The values are all now high; and it is for the Governments of the various States to go on with the utilization of the idle Crown lands, of which there are millions and millions of acres all over Australia. There is a universal demand for proper legislation in order that these areas may be settled by thousands and tens of thousands of people. Could immigration be promoted in a better way? Immigration is a matter which can properly be directed by the Commonwealth with the co-operation of the State Governments ; and if the Commonwealth proposes to take over the entire and unreserved control of that matter, it will make a big mess of it. On the other hand, if we adopt a proper immigration policy in cooperation with the State Governments, there is room for benefit in all directions. The Attorney-General said that the present position is a poor advertisement; but it will be the very best advertisement for Australia if we can make it known that we have not merely a few millions of acres to be subdivided in given centres, but millions and millions of acres, with most desirable conditions so far as soil, climate and rainfall are concerned, which have been waiting for years for occupation. Some of these lands are in outside sheep runs, but millions of acres nearer to centres of population are entirely unoccupied and unutilized. The true statesman will utilize these lands, and allow proposals for cutting up the big estates - which, even if desirable, is not the most desirable course - to rest until possibly values come down. When I refer to the squatter I mean the holder of large estates ; and I say that Re was not always in the position he is in today. I remember the time when amongst the pastoralists of Australia there were more debits than bank credits, and when, not many years ago, in the producing centres within the rainfall area, there were in all directions mortgages on lands occupied by both great and small holders. If a thunder-clap like this had come at such a time, it would have meant the blackest disaster to all the interests of Australia it is possible to conceive. This Bill comes before us at a time when we have good seasons, and the profits’ of producing interests are at high water mark. One of the biggest factors in this prosperity is the good prices that have obtained for wheat and wool during the last few years ; but if history is to repeat itself, as it will, we shall come to bedrock prices again. Possibly prices may not go so extremely low as a few years ago, but they will be considerably lower than they are to-day ; and then the landholder will no longer be regarded as king. In the times I speak of the squatter was, and properly so, regarded as an object of pity. From’ the national and commercial point of view we may do infinite mischief by this legislation. T remember very well, thirty or thirty-five years ago, the old cry about the squatters having possession of the “people’s grass.” That cry was raised amongst the city and town communities, and the people were prepared to take from the squatters in every direction without rhyme or reason. In South Australia legislation was introduced and carried with the best possible intentions, but with the most disastrous results. Land was resumed in all directions ; the plough had to go where sheep had been. But the plough went too far; we went outside the rainfall area, and, almost from the start, men, although they had a fair amount of capital, had to face inevitable ruin. After many years South Australia had to reverse her policy, and replace the plough with the grazier and the sheep.
– What about the rabbits - did they not take charge?
– Yes ; and the men who suffered know far more about rabbits, dingoes, and other troubles of that kind than do my honorable friends opposite. This Bill” will absolutely and inevitably fail to meet the case and secure what is desired. Australia is a country subject to change in climatic conditions, and to the visitations of pests ; and if in any land legislation burdens are to be placed on the people on common-sense business principles, there must be a discrimination which cannot be found in this Bill. I .shall show shortly that if the State Governments apply themselves, as they ought to do, to the settlement of their own unused Crown lands, we can leave the question of the estates of big holders to right itself under legislation which exists to-day. If this Parliament forces a penalizing tax such as the one under consideration, on all the best landed estates in Australia, simply because they are beyond a given area - because that is the principle of the Bill - it will penalize unjustly the holders of those estates, and, at the same time, do the public no good, and promote no settlement. In the very best of these big estates you will not find more than 5p per cent, of land suitable for agriculture, but it is proposed to put this heavy penalty on the whole estate. If it is an estate of 50,000 acres, with 25,000 fit for agriculture, there remain 25,000 acres which have possibly belonged to the man and his family from the beginning of Australian history, and which he desires to retain. It is fit for grazing, and nothing else. Why then do the Labour party want to take it from him? Why penalize him ? If he has spent a lifetime of energy, and possibly most of the wealth that he has produced, on the development of that country, and is in a position to manage it better than any one else, why penalize him by a Bill which has for its chief object the putting of the farmer in place of the grazier, especially when you know, beforehand that you cannot accomplish your object? This measure is going to hit very hard the inferior estates, which everybody will admit right off are undesirable for subdivision for agricultural purposes, many of them being held in freehold. There are some estates in Victoria, and in Queensland, and I know there are many in New South Wales that have been alienated from the Crown, and are held in fee-simple to-day, having been purchased at a price which they would barely bring now. Men had not in those days a proper idea of the real value of the estates. They got them in fee-simple, and some of them have been mortgaged. If they are not mortgaged up to the selling value to-day, I guarantee that in hundreds, if not thousands, of cases the mortgages will exceed the selling value six months after this Bill is passed. To say that this Bill is not going to bring down values is as much as for honorable members opposite to say, if they confess what they really believe, that the Bill is going to fail in its real object. Their object is to bring down values, and the measure will bring them down enormously. What does it mean? That at the top grade a man has to pay 6d. in the £1 every year. There is half his capitalized value gone. That man is not going to continue on that land, because he will not be able to make it pay. He will get on the market as soon as he can, try to be the first in if he can, realize on the land, and put his money in Government bonds or consols. He will then have nothing to do, but his income will come in all the same.
– Hear, hear.
– The honorable member cheers, but what about the development of Australia; what about the labour question?
– The man who buys the land will develop it.
– The man who buys it will have to pay for it, and will not be in so good a position to develop inferior country as the man who holds it to-day, because the present holder knows all about its capabilities, has put all the improvements there, arid is in an infinitely better position to carry out that work than ninety-nine out of every 100 men, and possibly better than the hundredth who would be likely to follow him on the land. In the name of conscience why should the Bill apply to him? It is illogical, and the Ministry cannot bring about closer settlement in those cases. When this Bill goes to the High Court, as it undoubtedly will, on constitutional grounds, is it likely that the Court will indorse a principle such as it embodies, and which is really the germ of it? The Bill is aimed at destroying the value of a man’s property. I do not know anything about law, but I know something about honesty and justice, and commonsense, and I hope that we have not, and never will have, in Australia a High Court that will indorse and encourage a principle such as that embodied in this Bill. One word about the stud-breeders of Australia. This question has always been recognised in South Australia by the imposition of an extremely moderate progressive tax, and we have always felt there that it would be the worst thing possible in the interests of the people to interfere with our stud-breeders, particularly of sheep and cattle. But this Bill will interfere with them.
– The stud-breeders, as a rule, have only small areas of land.
– What sized estate would the honorable member think a stud-breeder would have?
– Anything from 1,000 to 3,000 acres.
– We have in South Australia a stud-breeder whose cattle and sheep 40,000 acres would not feed, but it is an almost absolute certainty that that estate will be broken up, and with it will go the finest stud herd to be found in any part of the world.
– They want bigger areas in the Northern Territory
– And they can get them there. In the policy we pursued in South Australia we recognised that these 50,000 or 60,000 acre estates are not all fit for subdivision, and proposed to purchase only the portions that were fit for that purpose. It is specified in the Act that in every estate that the Government buy the owner can keep £20,000 worth alongside his homestead. The policy of South Australia was to allow that man to retain every bit of his grazing lands, so that by the retention of sufficiently large areas the stud-breeders might continue the magnificent work that they have been doing for Australia and its future in the matter of the selection and breeding of the best stock. My last point, which is one of the most important, concerns the question of immigration. This measure is held out by the Attorney-General as one that is likely to give Australia the greatest advertisement that she has ever had. He said that the very shadow of this Bill had done more for immigration than all the efforts of all the people in Australia put together for the last quarter of a century. If the shadow has done so much, what will the substance do? I am afraid the shadow will be the least harmful part of it, although it is bad enough. Instead of frightening these men half to death by the shadow, and finishing them off afterwards, it would be more merciful to kill them right off and get them out of the way, thu? avoiding any more trouble with them. This Bill is not the drastic business in view ; it is only the beginning. The drastic business is for the years to come referred to by my honorable friend, and I shall leave that for the future to reveal, because I do not profess to be prophetic on that question. If the Government want immigration, they must co-operate with the State Governments ic the opening up and use of their unutilized lands. There is room enough in that direction for the bringing of immigrants to Australia, and profitably employing them for the next half-a-century in nearly every State. Good as subdivision and closer settlement are, and excellent as have been the results that have followed the re-purchasing and settling of many of our lands in the estates near big centres, there is an infinitely better future for the opening up of the unused Crown lands. More has been done in the last three or four years in some of the States in the way of land settlement and increasing the agricultural population in that way than under all the re-purchase schemes in all the States of Australia. In South Australia .there are not more than three big estates left, but although we have done a good deal in that State in the direction of re-purchase and subdivision, we have done infinitely more during the same period in settling our unoccupied Crown lands, under happy and promising conditions. In one district alone - the honorable member for Grey can indorse this - that policy will very soon have settled as many people as have been settled- by the whole of the re-purchase in South Australia. We have settled people on Ian! that ten or fifteen years ago was thought to be unfit for settlement, and had been lying unoccupied for fifteen or twenty years. Because some people got in and secured the land at practically a peppercorn rental, there is to-day a great hue and cry. Those lands could have been leased by anybody, but they went a-begging year after year ; yet to-day there is more settlement on them than all our re-purchase and closer settlement policies put together have brought about.
– When this tax comes into operation there will be more still.
– There are more now, without this tax. What is needed is development on common-sense commercial lines, and that is what I want the Australian people to substitute for this iniquitous and unjustifiable proposal. In addition to the district in South Australia to which I referred, there is, I suppose, 3;000,000 acres more of suitable soil, with a good climate and an assured rainfall, in process of survey or settlement, or waiting to be surveyed. That land can be profitably used under the newer and more advanced principles of cultivation, by the employment of fertilizers, and, in some districts, dry farming. If we bring in the principle of dry farming we have millions of acres more to which it can be applied; but I am speaking now of lands which have an assured rainfall. They will give a really good crop without the application of dry farming. If we admit that principle, all those areas in South Australia which were once under the plough and turned out a failure, and are now under sheep, will come back to the plough again. If we can treat them as similar areas have been treated with such magnificent results itv America, we have in our State untold possibilities for the settlement of people. The only thing that is wanted is to bring to the land the idle hands of other parts of the world, where people live under less enviable conditions than those which obtain in Australia. This scheme can be worked out only by the National Government, in co-operation with the State Governments, and what applies to South Australia applies to other States; but infinitely more to three in particular. Where we in South Australia have a few million acres of such country, New South Wales has her 20,000,000 acres andmore; and what New South Wales has, Queensland has also, in bigger areas still. There are many million acres more in Western Australia than the other States can show of land which offers inducements for successful settlement.: These empty spaces must be filled up. But it is an appeal to the selfishness of human nature to tell our young men that they need not go out to’ the back-blocks, because they can get through the . fence into their neighbour’s land. They will have an infinitely better future in the back country than on any of the re-purchased land. They will have before them the pioneering life, and the example of the pioneers whose determination and industry have made Australia what it is. They may not win prizes quite equal1 to some obtained by the early pioneers, but they will win exceedingly good prizes. For those who go out as pioneers, whether they be Australian-born or immigrants from the Old Land, there are prizes to be won infinitely better than are to be obtained iri any other part of the world. We are trying in induce immigration by the distribution of literature, by sending abroad lecturers to make known the opportunities that we offer, and what our people have done. Our squatter kings of to-day came out here as shepherds, starting from the humblest position, and similar opportunities exist today for those who are willing to transform our waste areas into fertile holdings. But the Labour party should be honest, and tell the people that it is its intention, if they make money, to take it from them.
.- I rise to speak on this subject, not because I feel that I can add anything to what has been so ably said by those who have preceded me, but because I regard it as my duty to those who sent me here to say why I am in accord with, and intend to support, the very fine measure which the Government has placed before the House. At the outset, I congratulate Ministers, not only for their attempt to give effect to principles in which we have always believed, but also because of the method in which expression is given to ‘those principles. In considering this subject, we have two questions to ask : first, is the principle of taxing unimproved land values sound, affording a just means of raising revenue, and, secondly, will the imposition of such taxation be harmful or beneficial to the community ?
The Government, being charged with the administration of the affairs of the country and its defence, is justified in saying to the owners of land that they must contribute to the support of the public services ; but Ave must show that the principle of this taxation is just, and that its effects, though far-reaching, will be absolutely beneficial. The Leader of the Opposition, who has moved an amendment on the motion of the Prime Minister, com. plains that the Bill is an abuse of Federal power, and opposed to the spirit of the Constitution, but, the spirit of the Constitution, properly interpreted, means that which is in consonance with the wishes of the people.
Proposals for land taxation have been before the country for many years, and were a leading theme during the last election campaign. Indeed, the Prime Minister, earlier in the session, was twitted by the Leader of the Opposition for not making a Land Tax Bill his first measure. We told the country that a Land Tax Bill would be one of the first measures introduced, and every member ;of our party advocated land taxation throughout the length and breadth of Australia.
– The Labour party said very little about it in some places.
– We advocated it throughout Australia. I represent as many land-holders in proportion to the size of my electorate as does any honorable member, and, although I made the land tax a leading feature of my addresses, I was returned by a pretty substantial majority. It would not be becoming to boast of the majority I got, but the 2,000 votes by which my support exceeded that of my rival were cast principally by small land-owners. I find that there are in this House, representing country constituencies, and mostly small farmers, twenty-three Labour members and only thirteen Oppositionists.
The honorable member for Ballarat claims that the Bill is an abuse of Federal power. Let us examine that statement. This Parliament is charged with the making of preparations for the defence of a vast continent, which has a population of only one and a-quarter persons to the square mile, and with the control of immigration. These two most important matters are wrapped up in the question of land settlement. Until land monopoly is abolished, and we can say to those in other parts of the world that land is available for them to settle on, nothing that we can do for immigration or defence will be of any effect. The proper distribution of land must precede all arrangements for immigration and defence. Land settlement is the basis of prosperity, and this measure, by forcing the large land-owners to use their land, or to sell it, will do much to bring it about.
The Attorney-General showed plainly that the Leader of the Opposition has not always been of his present opinion, but with that I am not concerned. I do not care to know what were his opinions at some other time. I am merely concerned in pointing out now that the arguments which were used yesterday to show that this measure is an abuse of Federal power could be applied to any measure for imposing a land tax. Had the honorable gentleman confined himself to the argument that the Bill should not be passed, because its interference with the rights of the States is an abuse of Federal power, there would have been, at least, consistency in his position. But his arguments would apply against all land luxation. One was that the imposition of the proposed tax would depreciate the value of land, and another that it would create injustice and hardship. He endeavoured to show that the cases of hardship to which he referred would be caused by the Commonwealth not having power to discriminate, but he failed to show that the States would be able to so discriminate as to prevent them. We heard about arid wastes, about the men on poor land, and about the land that was tied up ; but by no discrimination could the State Parliaments prevent such hardships as he referred to.
– Does the Government propose to discriminate?
– I shall deal with that later. We have heard for many years that the imposition of a land tax will depreciate the value of land. That was a special point made by my opponent during the Federal campaign. But at a sale which has occurred in the district since the Labour Government took office, and since it became certain that a land tax would be introduced early in the session, the prices realized were the highest ever known. What is that said to be due to?
– To confidence in the Labour Government.
– No ; it is_ said that, because the Labour Government is in power, farmers have to pay high prices for the land which they need to earn their living. Therefore, we are blamed whatever happens.
Those who are opposed to this taxation say that if the income derived from land is reduced by the amount of the tax, the capital value of the land will be reduced by the capitalized value of the tax. That is sound reasoning so far as it goes, but honorable members forget some of the important effects of the measure, one of which will be the breaking up of large estates, the settling of greater numbers on the soil, and the opening up of new avenues of employment to workers generally, which will greatly increase the prosperity of the country. The subdivision of large estates has taken place in anticipation of the imposition of this tax. Let me show what land taxation has done in New Zealand. I quote from page 557 of the New Zealand Year-Book for 1909. When, in 1891, a tax was imposed on the unimproved value of land in New Zealand, the value was estimated at £75,832,465, and in 1909 it had risen to £172,759,948, an increase of £97,000,000, the increase in the value of improvements being very little.
I do not say that the imposition of. the tax alone brought about that increase in the unimproved value of the land of the country. A land tax will take from land its inflated value, which is one of its good features. When that is done, when settlers can get on the land at its real value, the large estates will be broken up. The farmer will then get to work turning up the soil with the plough, and we shall have little towns springing up in what are at present the waste places of Australia. Prosperity will follow, and the values of land and everything else will go up. That has been the experience of land taxation in New Zealand. When we are charged with thedefence of a continent such as this, why should we be met with the argument that we have no power to do the only thing essential to make defence possible? We are asked to trust to the State Parliaments to do their duty in this regard. The very honorable members who make that appeal to us are those who did nothing during all the years that they were in the State Parliaments. We have had presented to us the argument of the Treasurer of Victoria, who, in introducing his “excellent Land Tax Bill, said to the State Legislature, “ If we do not put on a land tax the Federal Parliament will.” The State Parliament did not impose that tax. The Upper House - the House of landlords - threw out the Bill, and we have now to do that which the States have refused to dp. Turning again to the honorable member for Ballarat, I would remind him of a very important point. I recognise that we have to review these matters from a broad national stand-point, but at the same time I feel that if there is any special obligation, apart from that, upon every honorable member, it is that of looking to the interests of his own constituency. I take the honorable member for Ballarat to that golden city which has been one of the finest inland cities of Australia, and point out to him that it was built up by the mining industry, and maintained by the rich arable lands of the district. The mining industry is languishing away, and another primary industry has to keep it going. The people of Ballarat are looking to the rich lands, locked up in the district, to help to maintain its position, and I charge him to do his duty to the constituency which gave him Federal political birth. I charge him to do something here, where his vote will count, because, in
State politics, it does not count beyond that of an ordinary private individual. I urge him to do his duty in assisting to open up the lands of the Ballarat district. We have, in Ballarat, at the present time, business men capable of exploiting the wealth of the surrounding district, if only some pressure is brought to bear upon those gentlemen who will neither use the land themselves nor allow others to use it.
– The land m the neighborhood of Ballarat has all been cut up.
– 1 wish that the honorable member were as well informed with regard to that phase of the question as he is supposed to be on some other subjects. I can point to lands within 5° miles of Ballarat that are still held in very large areas. I would remind him of the beautiful fields of Ercildoune, and the lands of the Mount Bute, Golf Hill, Morang.hurk estates; and of other stations in the Ballarat district, comprising from 30,000 to 50,000 acres, with scarcely a homestead upon them.
– Mount Bute is now on the market.
– It may be, since the imposition of a land tax was proposed. A good many estates are now being subdivided, but if the Labour Government were removed from the Treasury bench, and the Land Tax Bill were withdrawn to-morrow, we should quickly see how far the subdivision of large estates would proceed. The imposition of this tax has been anticipated for years. In proof of thaiassertion I would remind honorable members that for some years holders of large estates in the Western District have been cutting them up and letting them in comparatively small areas to tenants who have signed agreements containing a clause that the tenant shall pay all future taxation. The land-holders saw this tax coming.
– Shame !
– It is a shame that such a clause should exist in these agreements, and I trust that the AttorneyGeneral will be able by the insertion of a provision in this Bill to enable them to be declared null and void, so that the tenants concerned will not have to pay a land tax which should rightly be borne by the landlord. During this debate we have heard a good deal regarding the exemption of land of a certain value. We are told that what we miss by exemptions the State Parliaments are going- to get. It is said that the Labour party in the State Parliaments would favour a smaller exemption than one of £5,000. Why do we propose this exemption ? The honorable member for Wakefield, who has just resumed his seat, said that we were paltering with this question ; that we were hypocrities, and that we proposed an exemption of £5,000, so as to secure the farmers’ vote. I claim, as one who believes in the principle of land taxation - as one who believes that a portion of the value which has been created by the community, should be taken by the community to maintain the services that the community has created - that we should not be justified in saying that we will take the last fraction from the small users of land unless we could at the same time say to them, “ We shall remit some form of taxation now pressing heavily upon you.”
– Why do not the Labour party do that?
– We propose to exempt estates of an unimproved value not exceeding £5,000, because we cannot remit other taxation. If the honorable member were listening to my argument instead of writing letters he would know that I am justifying the proposed exemption on the ground that we cannot remit any other form of taxation.
– The Government could.
– If we could there would be no justification for such a high exemption. If the honorable member can show that we have power to relieve landowners of some other form of taxation, we shall be glad to hear him.
– I would have done so when the Tariff was before the House, but the Labour party would not join with me.
– The House was then dealing with measures that were calculated to establish manufacturing industries in our own country. We were endeavouring to develop our own markets and to give employment to our own people. Just as we have imposed Customs duties to establish manufacturing industries, so we propose to impose land :taxation to establish primary industries in our own country. A good deal has been said during this debate about the man beyond the rain belt - the holder of cheap land - who will be taxed. Is it not remarkable that men raise such an argument against the imposition of a land tax and then go on to say, “ There are millions of acres of Crown lands that are not being used to-day?” Is it not a fact that those Crown lands are either inaccessible at present or are outside the rain belt? If we were dealing with this question from the point of view of a State Legislature we need not worry ourselves so much about the extent of the exemption. We could turn to the men who are using their land and say, “ We shall tax your land, but we intend to open up the country. We intend to use the revenue so obtained and the increased productivity of the land to reduce the railway freights you are now paying. We shall declare that your property shall be valued for municipal purposes upon its unimproved value instead of under the present system. We shall wipe out the income tax, and in view of all these reforms we do not propose to give you any but a very small exemption.” But since we in the Federal Parliament have not that power we say to them, “ We shall put you on as good a footing as possible, because you are using the land of which you are in possession and so helping to maintain the country. We shall allow you an exemption of £5,000 unimproved value, that representing the lowest value out of which a man can make a decent living. There must be a margin, and we fix it at £5,000. We cannot remove any other form of taxation, and, therefore, we make that exemption.” The Leader of the Opposition, when speaking yesterday, referred to my constituency. There, he said, there were some lands worth £100 an acre. Men holding 50 or 60 acres of such lands, he declared, would have to pay this tax. I do not see much force in “that argument. The owner of 50 or 60 acres of land worth £100 an acre - and there are very few acres of land worth as much - would be regarded as a very fortunate individual. The Leader of the Opposition quoted an exaggerated value, and in reply I would point out that the holder of 50 or 60 acres of land worth £100 an acre is often better off than is the owner of 1,000 acres worth £5 or £6 per acre in another part of the Commonwealth. The honorable gentleman said that we have no power to discriminate between rich and poor lands. The very fact that we impose this tax at the rate of so much in the £1, or, in other words, tax the value, instead of the area, of the land, shows that we are discriminating between rich and poor areas. The owner of land worth £5 per acre will pay more per acre than the holder of an es- tate worth £1 per acre, and conseqently the argument that we have no power to discriminate goes by the board. The Leader of the Opposition lost sight of another point. Very few -farmers in my electorate hold 50 or 60 acres of land worth £100 per acre. Those who do own such farms have upon them improvements to the extent of £2,000 or £3,000. Those improvements are included in the total value of £100 per acre, so that when we deduct the value of the improvements and the exemption of £5,000, the holder of a farm worth £8,000 or £9,000 will have to pay very little taxation. He will pay at the rate of only one penny in the £1 on the unimproved value after the exemption of £5,000 has been made. He will have nothing to complain of in that respect, but he will have the satisfaction of knowing that the sons and daughters he is rearing will have an opportunity to obtain a piece of land and settle upon it as he has done. That is the strongest argument in favour of this tax, and it explains why men in our constituencies, who will have to pay this tax, yet voted solidly for the Labour party, hoping that their children and their children’s children would, as the result of this tax, be placed on land now devoted to sheep-grazing or remaining in idleness. We have been told that the squatters have made the country, and in that connexion I would point out that a division of grazing lands is both possible and practicable. If we go to the northern and north-western parts of Victoria, as well as to other districts where the land is said to be fit only for grazing, we find holdings of 3,000 or 4,000 acres producing proportionately two or three times as many sheep as are the large squatters. We find the squatter’s land overrun with rabbits, as the honorable member for Fawkner interjected some time ago, and I would remind him that closer settlement is the only remedy for the rabbit pest. We find large estates of 40,000 or 50,000 acres overrun with rabbits, thistles, or bracken fern, and covered with dead timber or growing scrub. Let that land be cut up into areas of from 4,000 to 5,000 acres, and those who go upon it will enclose it with wire-netting fences. They will destroy the rabbits, burn off the timber or bracken, and produce twice as many sheep as the squatter does in respect of the same area. Thu honorable member for Wakefield has referred to the wool clip and to our topping the market. I invite him to compare the wool clip and the number of sheep running on the Wimmera at the present time with the position when the squatters were in absolute possession. Statistics show that there are on the Wimmera to-day four times as many sheep as there were when it was held solely by the squatters. Wheat is being grown, and wool and mutton are being raised in increased quantities where at one time the squatters alone prevailed, and production has largely increased. The honorable member for Fawkner said that the squatters had built up this country; but if there is any body of men who have attempted to retard the progress of Australia it is the squatters. I speak with no personal feeling against them. As a young Australian, I desire to see this country developed and occupied by a large population. It was not the squatters who made the country, but those hard-working old pioneers on small holdings, whom the squatters endeavoured to keep off the land. I wonder if honorable members ever heard what was the origin of the term “ cockie.’”’ Some years ago, in the northern part of the Wimmera, I asked one of the oldest settlers if he could tell me, and he said that in the early days, when the small farmers were taking up selections on the large grazing leases, the squatters always endeavoured to chase them off. They employed money at election times to alter the laws in their own favour, and sent boundary-riders with stock-whips to drive away the selectors; and when the latter were pegging out their 320-acre blocks, the squatters would remark, ‘ ‘ There they are ; picking out the eyes of the land like cockatoos !” The contemptuous title was bestowed over fifty or sixty years ago by the squatters, who now ask the farmers to join with them as common land-owners. Had the squatters had their way at that time, there would not have been a farmer in the country.
– More recently than that.
– Quite so. In the old files of newspapers I have read speeches, very like those delivered by honorable members opposite, to the effect that this country is only fit for grazing. It was, and is, contended that there should be large estates of 20,000 to 40,000 acres - that halfadozen men should join together in a grazing lease and supply the world with wheat and wool. But what did the sturdy old pioneers prove? They proved that this land is capable of producing almost any kind of crops, and if more land were avail able now, we should not only have more wheat and other products, but more wool. I have taken the Victorian Year-Booh, the last edition of 1908-9, and have made a comparison of the production of small and large holdings; and it works out as follows : -
these figures are a conclusive argument that the wool clip will increase rather than diminish with closer settlement - that the small holders are really raising more live stock than the large holders. The Victorian Statistician says -
In this return it may be seen that 47.39 per cent, of the land occupied was in areas not exceeding 1,000 acres, and after supplying 70 per cent, of the cultivation, contained 52 per cent, of the live stock; whilst holdings of over1.000 acres supplied 56 per cent. of the total area used for grazing, and only 48 per cent, of the stock. As many of the large areas are situated in the rich Western District, which is favoured with a good annual rainfall, it requires only the introduction of labour to utilize the capability of these lands to carry at least as many sheep per acre as are now carried on holdings of 320 acres or under. The figures show that there is sufficient land in use in Victoria to carry at least twelve million more sheep than at present.
That disposes of the argument that under closer settlement we shall lose our wool clip and meat supply.
The Leader of the Opposition spoke of the necessity for uniformity in taxation, and urged that one set of people should not be compelled to pay more than another. It was remarkable to hear that statement from the honorable member, for if there is anything that leads to a lack of uniformity, it is leaving the imposition of a tax to half-a-dozen bodies. He told us that we had not taken into consideration the existing State land taxes, and urged that when this Federal land tax was added there could not be uniformity. But the reason there is not uniformity is that the States have imposed different rates, and have not treated their peoples alike; and the only chance there is of uniform taxation is for one body to take the entire control. The honorable member for Parkes, in an interjection, told us that owners of land are prepared to subdivide and let; and I hope that he was speaking with authority. But the experience throughout Victoria, at any rate, proves quite the contrary; and I know of numerous instances myself. In my own electorate, there are estates, for portions of which men have offered £2 an acre rent over a term of years, and have formed themselves into a little syndicate to cultivate onions on 100 to 200 acres, undertaking to fence and make other improvements, and the offer has been . refused, though the land was raising less than one sheep to the acre. On the opposite side of the railway,’ in the same district, £1 10s. per acre has been offered as rent, and refused, although, as in the other case, the land was not running one sheep to the acre.
– The owners should have their bumps read !
– I know some honorable members will regard these cases as “ a bit too thin,” but I am not here to give reasons for what may be regarded as silly conduct, simply to state the facts. The only explanation I can suggest is that the owners have the same stupid notion of holding broad acres, and keeping tenants off, as large land-owners have in the Old Country - such as the Duke of Sutherland, who burnt the farm-houses on his estate, sent the people adrift, making a deer park of the land. We have a similar evil in Australia to-day; and this land tax will prove sufficient to make a change in that stupid policy. The honorable member for Ballarat told us, and thought it was a strong point, that this tax will result in some having to pay 75 per cent, of their income. Now, if anything were wanted to show the necessity for the tax, it is the fact that it may have such a result, because that is an admission that the large land-owners are leaving their land in comparative idleness, simply adoptng: a “ dog in the manger “ attitude.
– That only applies to the very poorest land.
– It applies to some of the best land in Australia. In my own electorate some of the richest areas are not yet cut up, while some estates have been subdivided only since the advent of the Labour Government. People are sent away into the bush to pioneer in order to “ keep off the corns “ of the rich landowner ; and this is to be seen in every part of the States. I can speak, at any rate, for Victoria, because I have travelled over the whole of the State more than once.
The honorable member for Wakefield asked what could be better than to send our young men to the backblocks; but I wish I could take him into the Otway Forest and other places, and show him, not only the young men. but their wives and children, living and being brought up far distant from religious influences, schools, and all that makes life worth living. Then I should lite to show the honorable member rich fertile areas in the Western District with hardly a tree and hardly a home, occupied only by sheep. If anything has to be sent to the back-blocks, let it be the sheep, so that’ human beings may occupy the better places. We are told that there is plenty of land available; but, if that is so, what lunatics our farmers and farmers’ sons must be. If we go into any agricultural district and ask the people where their boys are, we are told that they have gone to seek jobs in the city. I know of one place from which nearly all the young men, big, strong, strapping fellows, found their way Into the police force. It may be said that these young men prefer city life, but my experience, and that of others, is that the vast majority of those born on the land love the land, and would be glad of a little farm to till. Their parents cannot subdivide their small holdings; and thus the drain to the city goes on year after year. These young men are not wasters, most of them have a little capital, and would be prepared to find the plant, but they cannot find the land.
On the fringe of the Mallee, on the Mildura line, the Victorian Government threw open eighty blocks, and for weeks before the Land Board sat, the roads for miles around were covered with the tents and waggons of the 1,200 applicants for those eighty blocks. Every time, there is a land sale bidding is keen, and I have not known a sale in the southern part of Victoria where the prices have not been higher than the real values. All this shows an intense land hunger. Young men are clearing out to Queensland, and pioneering under bad circumstances, while only 4,000,000 acres out of the 28.000,000 acres alienated in Victoria are under the plough, and some of our best land is absolutely idle.
The honorable member for Wakefield said that it was the duty of the States to impose land taxation; but it is an old game, when you do not approve of a measure, to urge that it is. some one else’s duty; and we know that the States have failed to impose land taxes in tthe past.
We have been told that values are due to the enterprise of the settlers - to their work and the improvements they have made. We admit that, and therein lies the reason why improvements are not taxed. The increased value of the land is due, on the one side to the improvements ; but the honorable member for Wakefield forgot the important fact that there is another value, sometimes greater and sometimes less, known as the unearned increment, or unimproved value, which is due, not to the enterprise of one man, but to the enterprise of the whole community in public services rendered. Consequently the whole community is justified in taking that added value. The same honorable member asked why we should not resume the lands instead of taxing them. But we have heard that argument before. The resumption of land without taxation to regulate values only has the effect that followed in Victoria when the Bent Government adopted the policy. It was found that not only was there keen competition amongst the settlers, but that that competition was accentuated by the Government coming to buy in the open market with the public money. The result was that land values were abnormally inflated. In one instance that I know of a man was almost ready to complete a contract of sale for land at £6 an acre, but when the Government valuer had been along appraising the value of the land the owner said, “ I have made a mistake, 1 want , £12 an acre for it.” There was an increase of 100 per cent, as the direct result of land resumption by the Government of . Victoria. With the inflation of land values, the unfortunate settler who is endeavouring to pay interest on the balance that he has not been able to provide, is in as bad a position as if he had to pay high rental charges. The honorable member for Ballarat made a special plea on behalf of those unfortunate people wh6 had just bought land. He said, “ The land has been subdivided, and the settlers are not able to pay off all the balance they owe, and now you come down and tax them.” I have in my mind the Gnarput estate, that was broken up in the Western District. Something like 11, 000 acres were cut up in one sale. I jotted down the areas and prices paid, and found that only one purchaser would come under the Federal land tax, and that he would pay something like , £2 a year. That one man, strange to say, was on the com mittee of my opponent in the recent contest, and evidently was not very much afraid of the depreciation of land values. The men who are buying land to-day to use and settle on are not, in many cases, buying estates worth as much as £5,000. The poor man who tries to get a farm so that he may have an instrument of livelihood in his possession, does not usually buy land exceeding £5,000 unimproved value, if he has to mortgage up to the hilt. He is a foolish man if he does, and we are legislating in this Parliament not for fools, but for wise men.
The honorable member for Wakefield used the peculiar argument that we are going to penalize men who hold land over a certain area, and that it does not matter about the value. I do not know by what process of reasoning the honorable member arrived at that conclusion, because we regard the value only, irrespective of the area. Whether it is 50 feet in Collinsstreet or 50,000 acres in the Western or other districts, we are going to tax on the value of the land in pounds, shillings, and pence, regardless of the area. The poorer the land the smaller the tax per acre, because the smaller the value.
Either this country is capable of being settled or it is not. If it is, it should be settled. Before we go in for any policy of immigration and advertising for other people to come to this country, Ave should be able to say to our own landless people, “ There is land for you, and land to spare for those who come from other parts of the world.”
– So there is in many parts of Australia. The honorable member is only speaking as a Victorian.
– I am speaking as an Australian, and am using as an illustration the State with which I am most acquainted. The same clamour for immigration exists in Victoria as in Western Australia, and the Victorian Government have sent a deputation Home to obtain immigrants. I am not one who objects to immigration. I believe this country is capable of maintaining twenty and thirty times its present population. All I say is, “ Satisfy the land hunger ofyour own people first.”
If the honorable member has so many million acres available in his State, let him show our people, who want land, that they can get it there under decent conditions, and that it is good land. I could show h”onorable members that, in regard to the millions of acres which are supposed to be available, when men come to settle on them it is a very different story, and I should like the honorable member to try it for twelve months.
– I am trying it, and know hundreds more who are doing it successfully. The honorable member does not know what he is talking about when he slanders Western Australian land in that way.
– I am not slandering Western Australian land, but am speaking generally. The land unsettled and unalienated in the majority of the parts of Australia is either inaccessible or unsuitable for settlement.
– That is not correct as regards Western Australia.
– It is true generally. The early squatters picked out the eyes of every State. I will admit that Western Australia is the newer State; we only heard of her a few years ago. Perhaps we have to learn a lot more about her, and I hope we shall hear more of her in the future. But it must be remembered that all these millions of acres, even if they are suited for settlement, must be provided with railway facilities before they are worth anything to the average settler. -
– The Queensland Government had to buy estates back.
– That is true. The best test of the matter is that men are paying such high prices whenever there is a land sale. That proves that they cannot get cheap land anywhere else, or they would not pay those prices. The men who are settling on the land are just as keen business men as is any honorable member sitting opposite. Many of them have travelled the whole of Australia. I could name scores who have done so, but have come back to Victoria and paid high prices for land, not because they liked paying for them, but because they were forced to in order to get what they required.
We are not opposed to immigration, but we say that this tax must precede any settled policy of immigration. lt must break up the large estates in our wellwatered and settled districts, and before we ask the people to pioneer back in the waste and arid districts we should settle the lands near our cities, close to civilization, with a good rainfall, and in touch with railways. For these reasons I support the measure, and commend it to the House as the most progressive ever intro duced in any part of Australia. I recommend it as laying the foundation of a great policy, and as fraught with great possibilities for the defence of this country. I am confident that it will bring in an era of .prosperity that will make Australia a truly great nation.
– The object of the Bill now before the House is very laudable, if we are to judge by the memorandum which preceded the Land Tax Assessment Bill, a very similar measure, introduced by the same Government last session. That document begins by saying - 1
A population sufficiently large to effectively develop its various resources and defend it from invasion is essential to the progress and even the very existence of every country. While this is true of all countries, it is particularly true of Australia. No land has greater natural resources; none, by reason of geographical situation or by the enormous extent of its coast-line, is so vulnerable to attack.
I think all sides of the House are agreed as to the desirability of settling a great population on the land. Where we disagree is as to whether this is the proper method of doing it. I have favoured a land tax, if it is required, but I wish to say straight away that it ought to be in the hands of the State Governments. I would direct the attention of honorable members to a map that I have had prepared. On it are drawn to scale red portions indicating the amount of land alienated, and in course of alienation, the other portions representing the Crown lands. The state of things which exists in Victoria cannot be compared with that in Western Australia. To try to deal with those two States under one measure is to bring about the very grave position which is emphasized in the Bill now before us.
– Some Victorian members evidently think that Victoria is Australia.
– It used to be thought that New South Wales was Australia, and Sir Henry Parkes actually at one time proposed to call it Australia. I want to call honorable members’ attention to the state of things as shown on that map, to illustrate how widely different are the conditions existing in the different States. We are all inclined to grumble at the slow rate of progress of population in Australia, but I was surprised to read the other day in a lecture by Professor Gregory, printed in the Geographical Journal for June last, that our rate of increase has not been slow compared with that of other countries.. It has been slow recently, and I will show why in a minute; but over the whole period of Australia’s existence our population has increased more rapidly than that of any other country in the world.
– More rapidly than that of the United States?
– Yes, and I was surprised to learn it myself. Professor Gregory said -
Australia was practically empty when the British colonists first arrived there, and they naturally settled on the well-watered temperate country in the south-eastern quarter, and thence they have gradually spread northward and westward. The growth of population is often re. garded as disappointingly slow, but it has really been unusually rapid. It may be compared, as standards of reference, with the progress of Cape Colony, Canada, and the United States.
That Australia has done well in the rate of increase of population during the last halfcentury is shown by comparison of the population of Australia, Canada, and the United States at different dates : -
It took Canada two and a half centuries to reach the population that Australia secured in less than one; and if we compare the rate of growth in the sixty years from 1840 to 1900, the population of the United States has been multiplied four and a half times, that of Canada three and a quarter times, and that of Australia almost twenty-fold.
That was to me an astonishing discovery. Nevertheless, population has not been increasing as rapidly as we desire. One reason, I think, is that the Australian car is being pulled by two horses - private enterprise and Government stroke. For 4 long while private enterprise took the ^ar along at a great pace, the fat, sleek Government stroke cantering alongside, und doing . little work. Now the attempt is being made to hold back private enterprise, and the rate of progress has diminished.
– The other horse is getting a turn now.
– It is a horse that hangs back in the traces. I do not object to much of our industrial legislation, which has been forced on the country by the existence of sweating and other ill practices, but the tendency of legislative interference with private enterprise is to retard settlement and immigration. If the old goasyouplease method st’U prevailed, our population would now number 10,000,000, because the last few years have been so prosperous that a great stream of immigrants would have come here to share it. The Governments of Australia are not doing their part in the work of development. They should construct railways which would make the settlement of distant areas easier. It has been said that nearly all the Crown land of Australia suitable for settlement is now held under lease ; but leases are continually falling in. In Queensland 25 per cent, of the leases fall in at the end of three years, and the Government of the State will then have an enormous area to dispose of.. Labour members claim that they have ±. mandate to impose a land lux, and I am inclined to agree with them; but I do not think that the mandate is for the imposition of a tax such as the Bill contemplates. Besides, how was their mandate obtained? Labour candidates were permitted to express their views freely and fully, but opposing candidates were subject to interruption if what they said was unpalatable to any section. I am aware that these interruptions came from a small minority, and I do not blame the Labour party for them, but the disturbances were due to Labour supporters.
– There were not interruptions in the country, where the land tax was most spoken about.
– I suppose that the Labour candidates gave their audiences statements that pleased them. Whenever I tried to put what I considered commonsense views - and I was better treated than other candidates on my side - the interruptions of a small section were very great.
– They were the honorable member’s old supporters.
– Indeed, they were not. I know exactly where the interruption came from, though I shall not say, because these things are passed and done with now. Had the Labour party told the electors that the Bill would ruin a great number of people, because it would be impossible to discriminate in favour of those holding poor lands distant from railway communication, there would have been no mandate for the imposition of the tax.
– Does the honorable member think that the Bill will ruin any one ?
– I shall give one or two instances to show that there are cases in which it will bring about absolute ruin, and on Thursday next, when the Prime Minister is to receive a deputation, it will be shown that the Bill will bring ruin to thousands. I feel certain that honorable members will not force the measure through without considering these objections. As a rule, the purchaser of land expects to make about 5 per cent, from it, and is generally not able to pay in cash the whole amount of the purchase’ money, borrowing perhaps half, or 60 per cent., of it on mortgage. Such a man pays z per cent, of his total returns to the mortgagee, and if the Government takes the other half he will have nothing. There are hundreds of cases of that kind. There is something to be said for the position that the owners of land should pay for the protection of their property. The honorable member for Coolgardie put that very plainly, and I thought there was a good deal in what he said ; but such contributions should be levied in the form of a tax on all property, and should not take the shape of confiscation. The present proposal in many cases amounts to a statement of this kind : “We are going to take your property from you, to prevent you from losing it by reason of the invasion of a foreign foe.” It is like shooting a man to prevent him from being killed in war. No doubt the land-owners would rather run the risk of war than give up their land altogether. I shall not touch on the constitutional aspect of this question, because it has been dealt with at great length by persons who are better able to deal with it than I am; but there is something in the point that the Constitution does not permit this Parliament to discriminate between State and State, “ or between one part of a State and another. I am certain that it was never thought, prior to Federation, that the Federal Parliament would levy a land tax, except in a national emergency.
– Some of the States would never have joined the Union had there Deen the least idea that a land tax of this kind would be proposed.
– There would have been no Federation had the electoral results been foreseen.
– My Labour friends were opposed to Federation until they saw the advantages which their party could gain under it. I, on the other hand, have always been in favour of it. The Federal Government was given the Customs and Excise revenue with which to meet the expenses of Federation. After the expiration of the Braddon section, it can deal .with that revenue as it chooses. But honorable, member:, opposite say that it is their business to control the nation’s destiny, and that, as the lands of the country are not being settled fast enough, they will step in. There is a proverb to the effect that a certain class of persons “ rush in where angels fear to tread.” I think that the State Parliaments should be allowed to exercise their proper constitutional functions. The Treasurer tells us that the proposed tax will yield a revenue of about £1,000,000, but acording to figures which have appeared in the. Argus, the yield will be about £2,^60,000.
– That is, until the large estates have been broken up ; then the exemptions will be lowered to get at the smaller men.
– In New South Wales alone the proposed tax will produce £1,197,811 18s. 2d., without taking into account aggregations of estates which are taxed at the higher rate. The area alienated and in process of alienation in that
State is, according to the Government Statistician, 51,265,068 acres, and the rateable unimproved value of the land £136,529,651 or an average of £3 an acre. As estates worth less than £5,000 are to be exempt from the proposed taxation, we must leave out of our calculation holdings of less than 1,751 acres. The acreage of holdings of an area ranging from 1,751 to 2,000 acres is 617,149, and, if taxed as proposed, they would produce the sum of £764 18s. 4d. All the holdings are known in New South Wales, and we cannot get away from these figures. The actual figures are put before us. We have the areas to be dealt with, the unimproved value under the New South Wales Act, and the number of holdings are correctly set out. The result is that the amount which this tax will produce in New South Wales alone is far more than the total amount that the Treasurer estimates to receive from it in respect of the whole of Australia.
Mr.Frazer. - What method of calculating the exemption has the honorable member adopted ?
– I shall be glad to show the honorable member the table that I have before me. I have carefully studied the figures, and 1 do not think that they can be contradicted. No doubt the Treasurer will find that, instead of deriving a revenue of , £1,000,000 from this tax, he will gather in over £3,000,000 per annum.
– What is he going to do with it?
– That is what . 1 should like to know.
– He will construct new telegraph and telephone lines.
– If honorable members agree with my figures they will recognise that we can do justice to two great classes who are going to suffer most under this Bill. I refer to the holders of poor lands, far removed from railway communication, and those whose, lands are heavily mortgaged. They will bear the burden of this ‘ taxation. In order that they may realize the difficulty of dealing with this question from a Federal stand-point, I invite honorable members to look at the map ihat I have had exhibited in the Chamber. They will learn from it that only 2¼ per cent, of the lands of Western Australia, have been alienated. That State is eleven times larger than Victoria, 49.72per cent, of whose lands have been alienated. Victoria has received £32,321,689 from the sale of its lands, and it is but one-seventh of the size of Queensland, which has derived only , £8,687,814 from the sale of its lands. If the sales of Crown lands in Queensland had been, in proportion to its size, on the same basis as those of Victoria, the northern State would have obtained from that source something like £226,000.000.
– The State Government wanted to sell it, but you chaps would not buy it.
– We bought what we could afford to purchase, and we have not had any unearned increment. This tax is supposed to be levied upon the unearned increment, and in this connexion I should like to quote the honorable member for Corangamite, who is a typical example of the energetic land taxer. He represents a constituency where the congestion of land has been most severely felt. It is the richest district in Victoria, and the honorable member, who is undoubtedly an unqualified land taxer, said, on a former occasion, in regard to this tax -
It carries into effect a policy which for many years past we have advocated throughout the country. That is a lax on land values with an exemption of £5,000. Now, the first thing that this tax does is to declare the right of the people of this country to take a portion of the unearned increment to pay for the services rendered by the people who have created those values.
– From what is the honorable member quoting?
– [ am quoting from Hansard. The honorable member for Corangamite said that his view of this land tax was that it was to enable the country to take a portion of the unearned increment for the services of government. This Bill does not provide for that. It will tax not merely the unearned increment, but the amount which a man has paid the Government in the first instance for his land. If that amount were exempt, then, as the honorable member for Angas pointed out, a great injustice would be avoided. It seems hard, to say the least, that a man should be taxed on the £1 per acre, or more, that he has actually paid the Government for his land. The argument in support of this tax has been from the first that the mandate from the country was that the unearned increment should be taxed, and to a tax on those lines no very serious objection could be taken. I am sure, however, that there was no mandate from the country to tax a man on the amount that he has actually paid the Government for his land. In this connexion I would refer honorable members to- a table which was prepared, in answer to a question put by me, and which appears on page 327 of Hansard for this session. That table shows that the landowners in Australia have actually paid the different Governments £113,628,777 for their lands. A great many people entertain the idea that very little has been paid for the land that has been alienated.
– The honorable member includes rents in that amount.
– If the honorable member means rents paid in respect of conditional purchases, I do, for they are in the shape of annual instalments of the actual purchase money. A fact that is not clearly recognised is that the land-owners of Australia, for the right to occupy their land, have paid the enormous sum that 1 have mentioned. It is often claimed that land-owners have had railways constructed to or through their property, and that they ought to share with the community the increased profits they have made as the result of securing those railway facilities. The railways of Australia have cost only £140.000,000, and of that amount £113,628,777 was actually provided from the sale of lands
– What about the upkeep?
– The cost of upkeep, as well as interest on capital, is met by the revenue derived from the produce of the land that is carried over our railways. I understand that the railways of Australia to-day are paying sound interest on the cost ot construction. These facts have not been taken into account, and in that respect the Bill does not carry out the mandate of the people. The Government are not only taxing the unearned increment, which the honorable member for Corangamite said was the best of all methods of raising revenue, but they are actually proposing to tax every £1 which the landowner has paid to the Government of his country. That, to my mind, amounts to repudiation. If the Government enter into a contract with a man to take ,£i an acre for their land, and, having sold it, practically take the value of that £1 away from him, that certainly savours of repudiation. There is the strongest possible case for some consideration to owners of property remote from railway communication, and which can never be devoted to closer settlement. This measure should be accompanied by some re-purchase scheme.
– That is a State matter.
– Nearly every State has a re- purchase scheme in force, and I think they are all working very well. Those who have paid over £113.000,000- for their land are surely entitled to some consideration. Many of them will find it impossible to dispose of their properties, lt is impossible to cut up many of the large estates; but the man who can sell his land to-morrow in small areas, and the man who cannot possibly do so, and who must, therefore, be ruined, are both treated alike. If we were to exempt from taxation the price originally paid, we should do the right thing.
– What is the value to-day of the properties for which £113,000,000 was paid?
– That does not affect my argument, because the difference between the original and the present day values represents the unearned increment, and objection could not be taken to a just tax upon that unearned increment. To tax people on what they have had to pay, however, will amount to repudiation. Let me contrast this system with that in force in New Zealand, where the Government, at the outset, obtained very little from the sale of their lands. A great deal of the land originally belonged to the Maoris, and the Government did not receive any money for it. On the other hand, the lands of Australia belonged to the Crown, and the Government received every penny piece that was paid by the fust pioneers for the occupation of the land. Nevertheless, New Zealand has re-purchased £4,807,369 worth of land; whereas in Australia, with over £113,000,000 paid for land, the total area repurchased has been under £6,000,000 worth. This measure ought to be accompanied by a repurchase scheme, so that a man may be able to come to the Government and get what he originally paid for the land, together with the price of his improvements. Considering the relative sizes of the countries, Australia has done very little more than New Zealand in the way of the repurchase. I do not desire to weary the House with a great number of cases, because all of them will be brought before the Prime Minister on Thursday, when he will meet a deputation that is very anxious to see him. This Bill is far reaching in its operation, extending as it does over the whole of Australia; but it has hardly reached some parts of the continent as yet, and the people, as a whole, are scarcely yet alive to its significance. In Western Australia the people are already severely taxed, and I am certain that they have hardly grasped the new situation; and, however much we may desire to close the session, this measure ought not to be hastily pushed through Parliament. Great consideration is required, or otherwise much injustice may be done ; and I am afraid that if we break contracts with the land-owners, by imposing an unfair tax, our debenture-holders may be asking themselves whether they are quite safe. I have heard it suggested that if we could keep the £8,000,000 or £9,000,000 which has to go abroad every year as interest on the £250,000,000 that we owe, we could do much good with it in Australia; and, in my opinion, to retain that money would be no more a breach of contract than that proposed in die Bill, because the proposed tax is absolute repudiation, in the true sense of the word.
– Was land purchased from the States on the understanding that it would never be taxed?
– No, but I say that this is an unfair tax, which, in a great many instances, will amount to all that the holders are making out of the land ; and, if all the return be taken, it is practically taking the land. My suggestion is that the price which the State originally received should be exempt from the tax. The climate of New Zealand is different from that of Australia, where we are subject to severe droughts. In 1902 there was a drought which nearly shattered the whole of the pastoral interests.
– Does the honorable member mean, when he speaks of an exemption, the price originally paid to the State?
– Yes. The suggestion was first made by the honorable member for Angas. It seems to me exceedingly fair; and I may say that I have had it in mind some time before. To give an illustration : If a man paid 10s. or £1 an acre, and the land was not worth any more, there could not possibly be any unearned increment. The Government were given a mandate by the people to tax the unearned increment, but there was no mandate to tax the value originally paid to the Government. I think I have shown that this tax will result in a revenue of £3,000,000, instead of the £1,000,000 the Government anticipate; and I am sure that honorable members opposite have not thought over this point, or they would not suggest that the original value of the land ought to be taxed.
– The suggestion is that if a man paid £1 an acre for his land, and it is now worth £10, he should pay the tax on only £9?
– Quite so; and I may say that, in some cases, the land has actually come down in value. I was pointing put that the Government will, in my opinion, obtain a revenue of some £3,000,000, and that sufficient to do all that the Government desire can therefore be obtained without taxing the original value of the land. The honorable member for Angas says that such an exemption is perfectly constitutional, and his view, of course, is of great value. I should like to cite as an example one property that I know very well in Queensland, about 80 miles from a railway, and about 400 miles from a port, so that it cannot be expected to be closely settled in our time. This property, consisting of 70,000 acres, was bought at 10s. an acre, at the request of the Government, so that there cannot be said to have been any grasping on the part of the private land-holder. Some of the leasehold land belonging to the Government alongside this property has very recently been offered for occupation at a rental of id. per acre per annum; whereas under this Bill, the tax on the property of 70,000 acres will amount to 3d. per acre, or three times the amount of the rental at which the Queensland Government are offering similar land alongside. If that is not simply taking away what has been sold, I do not know what is ; and we have here, in my opinion, a hard case. There arc many similar cases, and others even worse in New South Wales ; and, unless we take care, I am sure that great injustice will be done to people who have paid for land and have enjoyed no unearned increment, and whose land is not fit for closer settlement as we understand the term. According to the Queensland YearBook, the report of the Closer Settlement Department of 21st June last year contained the following -
I do not need to weary honorable members with figures relating to New South Wales, but in that State a great deal has been done in the way of resuming estates, and also in the way of subdivision by private owners. In Victoria, according to Dalgety’s Review -
As an illustration of the rapidity with which large estates are being subdivided, take Victoria, the second smallest State in the Commonwealth, where during the past 6½ years no less than 2,000,000 acres of freehold land have been subdivided by private owners and sold to farmers. During’ the same period the Government, who make closer settlement the foremost plank of their platform, have purchased and settled about 300,000 acres.
Further indication of what is being done in closer settlement by private enterprise in other States is found in the accompanying list of station properties within easy driving distance of Corowa, in the Riverina district, which have been recently subdivided, or are now in process of subdivision.
The Review then proceeds to give a list of different properties totalling 135,100 acres subdivided within a few months. All this is going on rapidly ; and it only requires the State Governments to run railways into various parts of the country in order to bring a great many of similar estatej on the market. What has caused much of the increase in value is the great change in their surroundings since the lands were originally sold. The refrigerating industry has enabled people to send their product to the Old Land, and has almost equalized the price of land in Australia and in England ; yet the increased value is now claimed to be an unearned increment. My father was th~e first man who successfully sent frozen produce from this part of the world to another ; and I am sure that the additional value thereby given to land cannot be fairly called unearned increment. Another great factor in producing the increased price has been the use, during the last ten years, of artificial manures. That period has witnessed a great revolution in farming methods and high prices for wheat, and these two things have also tended to raise considerably the value of land. The use of fertilizers has made land which at one time would not grow a crop at all fit to grow a really good crop now. I know land which can even now be got at £6 an acre in the Western District of Victoria, with a gjod rainfall, on which a man can be pretty sure of getting a crop of twentybushels of wheat. That represents £4 to the acre, and deducting 25s. per acre for expenditure you have a splendid reward for your industry. In fact, vou could Day off your land in a couple of years. That, in itself, points to the marvellous revolution which has occurred quite recently, and the full advantage of which has not yet been actually shown in the market. When it is realized, and especially if the Government give facilities in the form of railway construction, honorable members will find that it will do far more than the lash of a land tax to make settlement go ahead. After all, there are, nowadays, very few landowners who do not feel keenly that it is their duty to help settlement along in order to defend this land of ours, and to keep it white by holding it for the great British race. I hope there are next to none of them left, but if there are any, and if they are obstructing settlement, the proper and only honorable way to deal with them is to buy them out. The attitude of the Labour party in Queensland shows that, in that State, at any rate, they are not so violently advocating a land tax as are the members of the party in other parts of Australia. Regarding a meeting held in Townsville on 30th May, 19 10, it is reported in the press that -
The State Labour Convention was resumed today ; Mr. Bowman presiding. After formal business had been dealt with, it was resolved that on rising the Convention should adjourn till Saturday. Consideration of the general programme was continued. It was resolved to add the following clause to the land tax plank : - “ Income derived from land on which a land tax is payable be exempt from income tax.”
That shows that the Labour people in that State have at the back of their heads the idea that some day they may require to do what Victoria has done - sell a great part of their land. Their State is seven times the size of Victoria, but has only received about £8,000,000 for land, as against Victoria’s , £32,000,000.
– The Labour party in Queensland are opposed to the sale of Crown lands.
– Then I cannot understand why thev want to take the tax off incomes. There must be some reason for their attitude. They are opposed to the sale of Crown lands now, because they think” there is some other method of settling that great State. But supposing they were confronted with the position - which may occur before very long, especially if they want to settle their State rapidly - of being unable to borrow, the alternative would be either stagnation or the sale of Crown lands. Tfiey will, of course, try to build up the State from the ordinary annual income, but that is a very slow process. Any young fellow starting in business with a small capital soon finds that he must borrow a little, or he will not get along very fast. Queensland is in that position, and some day she will either have to stagnate or face the policy of selling her land in order to get money to carry out the great public works which are necessary to develop her vast areas. That is what has always prevented Queensland from imposing a land tax. Her people say, “ If we impose a land tax we shall not be able to sell our land, and consequently will have no money to spend on public works.” If people who are so keen about a land tax insist on imposing it, they may render it difficult for Queensland to sell her land. The same thing applies with even greater force to Western Australia. If honorable members look at that map they will see that the great land monopolists of Australia are the Governments. There are huge quantities of land still on their hands, some of it under leasehold, but constantly falling in, and capable of being resumed for comparatively small sums. We ought to seriously consider the example of Canada. When that country found itself in the same position as Australia it did not say, “ We will resettle the small tracts of land that have been already settled.” There were a great many people in Canada who talked of the dead heart of Canada, but the Canadian people had plenty of pluck. They said, “ We do not feel inclined as a Government to do this work ourselves, but we will allow the Canadian Pacific Railway Company to take half the dead heart for themselves ; it is not giving away much to give away what is of no value; we will keep the other half as our own property. This great company will civilize that land, and it will be to their interests to introduce immigrants. Our land will then be made of some value.” Canada then had an immense quantity of land on its hands, and it has been able to give away free farms. Cannot we do something like that? Is it not better than this dog-in-the-manger policy that we are pursuing?
– We do give away 160 acres in Western Australia.
– I -believe that is done, but we are constantly told in Victoria that we cannot give away land, which has now reached a high price, to intending immigrants for nothing. That seems to me ridiculous.
– They want a choice piece, nicely watered and cleared.
– I suppose they want a part of Collins-street?
– No; a beautiful place down Colac way.
– The honorable member can take it from me that they would not like living in the country at all. Soon after the crisis here two clergymen, actuated by the finest motives, got a piece of not bad land in Gippsland and started a village settlement with 130 settlers. They were very soon short of money, and guaranteed an overdraft of about £600. That was not enough, and soon went. The amount was called in, but it was found that it could not be paid, and we had to get up a subscription to help the poor clergymen out of a fix. One of them who is a most admirable character said he was sure that the cause of failure was the land being so far away from town, I suggested that if they had had half of Collins-street they would have got on first-rate, and he entirely agreed. A great many people are continually clamouring for land who do not want to go into the bush at all. The honorable member for Corangamite said there were no lands to be got; but in reply to that statement let me read an extract from an article written by “ a land-owner,” which appeared in the Age on the 25th of this month. It must be somewhat on the lines of the opinions of that journal, because the Age does not often publish unsigned articles which do not express its own views. Whether that is so or not, the following is the information given : -
This fact was strikingly made clear in New South Wales some four years ago. Gobbagombalin Estate, near Wagga, was acquired by the Government for repurchase conditions at a very low rate. It is said that a valuation for probate declared only a short time previously afforded the authorities an opportunity which they made the most of. The price paid was so low that a private syndicate immediately offered the Government £25,000 on its bargain, and offered to subdivide. The offer was refused, and the estate was cut up into farms on an admirable system of subdivision. The property was extensively and well advertised. It was a thirty miles’ frontage to the Mumimbidgee River, comes within a few miles of the important town of Wagga, and contains a large proportion of prime wheat land. It was offered on terms of exceptional liberality, the completion of the purchase being spread over more than thirty years at a low rate of interest. A few months prior to the date when Gobbagombalin was made available isolated areas of Crown lands in Southern Riverina had been applied for by hundreds of people. It seemed as if there were thousands eager to acquire farms in this portion of the Commonwealth. The authorities in Sydney expected an unheard of rush for Gobbagombalin lots. They received a great shock when the applications were opened. Many of the blocks were not applied for at all. It was not until six weeks after the day on which the estate was made available that the last block found an owner.
Previously there had been hundreds of applications for a small block in that neighbourhood.
– What was the reason of that?
– The reason is that sometimes the Government put up a block of land at very much under its commercial value. Any one who is lucky enough to draw it gets a few hundred pounds immediately through the sale of it. In Queensland at one time that was the greatest gambling business ever seen in Australia. Grazing farms were put up, and if any one drew one the current price for it was £1,000 at once. Everybody’s sisters and cousins and aunts were in those raffles, and, in fact, the whole community went in for them. The system was changed, and a man was compelled to live on the land. That is the policy followed under the closer settlement system of New South Wales now, and that is why the blocks referred to in that article, although all the conditions were favorable, were not all applied for until six weeks after they had been put up. The writer continues : -
The experience of the Victorian Closer Settlement Board is on the same lines. It has purchased good lands in safe rainfall districts, subdivided them into small farms, and submitted them for public competition. Difficulty has been experienced in placing all the land. A fair quantity is still undisposed of.
That disposes of the honorable member for Corangamite’s argument. The fact is that there is plenty of land in the Victorian closer settlement areas still undisposed of : -
Just now the board is advertising for applicants for n farms, totalling 5,000 acres, at Kenilworth, near Hamilton, the price per acre .ranging from 50s. to 70s., distributed over more than thirty years. In Mooralla it has yet five farms averaging 600 acres to dispose of at prices ranging from 63s. to 75s.
A good farmer would make that off the land in- one year.
The Doogalook Estate, near Yea, is short of complete disposal by four blocks, averaging 450 acres, prices varying from 65s. to 119s. 6d. per acre. There _ are also five irrigation farms at Cohuna awaiting selection, areas averaging about 100 acres each, and prices ranging from £9 13&- 0 £12 ns. per acre.
One expects to make £40 an acre from irrigated land, so that the prices are not very high.
In other estates acquired by repurchase their complete sale has only been achieved by allowing settlers’ wives to select areas additional to those obtained by the husband.
The position of wives under the Bill requires consideration. At present the proposal is to treat husbands and wives as one party for taxation purposes.
Nor has much better success attended the New South Wales repurchase operations. The authorities of that State still have on hand a number of blocks in good districts close to railways and containing fertile land.
By taking him to the Lands Department 1 could show the honorable member for Corangamite where plenty of land is to be got. He spoke of there being hundreds of applications for one block, but in such cases the land is being offered for less than its true value. I wish now to refer to what are called the absentee provisions of the Bill. I do not hold a brief for the true absentee, that is, for the man who, having made money here, is spending it abroad. If he does not care to pay a special tax, he can either come here to live, or sell his land and take the money he gets for it elsewhere. But there are not many such men. The absentee tax will bear hardly upon companies which have invested money here, in some cases at little or no profit to themselves.
– Many of them have made heavy losses.
– To show honorable members how two of these companies stand, let me read extracts from their reports. A meeting of the Melbourne Real Estate Company was held in London on the 6th March -
The Chairman, Mr. W. Sandford Poole, made interesting reference to the condition of the company’s large holding of real estate in this city. They had, he said, an increase in gross receipts of £629. In the previous year there was also an increase of £989. He was glad to say they had sold Apollo Chambers (in Flinders-lane) for £12,000, and had spent £7,000 on rebuilding the Batman’s Hill Hotel.
Mr. Poole made a lengthy reference to the proposed State land tax. Mr. G. C. Arnold, of Melbourne, had estimated that the tax would make a call on the company of £1,250 a year by way of additional tax. But an extra 50 per cent, was to be taken from absentee owners, so that the company would have to pay in all £1,875 a year, on a present net revenue of £4,300 a year. “ I would just like to point out,” continued Mr. Poole, “ that we did not in reality purchase these properties at all ; we never wished to hold these properties in Melbourne, but we lent, in the first place, £400,000 to the Real Estate
Bank of Melbourne at 5 per cent, per annum. We were to be mortgagees, and we were to have £20,000 a year by way of interest. Well, the Real Estate Bank went down at the time of the banking collapse in 1893, and we got from the bank, when it was liquidated, as much as we could, but all we were able to collect in cash was £53,000. That left us with money due to us to the amount of £347,000, against which we held the properties which are now in the possession of the Melbourne Real Estate ‘Company. These properties, as I have said, produce us at the present time a revenue of £4,300 a year. If we give credit at 5 per cent.” for the £53,000 cash that we have had back out of the £400,000 loan, we should be receiving from the Colony £’7.35o a year.”
The contract made with persons here to whom the money of the company was lent was that in return they should pay £I7>35° a )’ear as interest, but the company is receiving only £4,300 a year - “ Instead, however, of receiving what the Colonials engaged to pay us, namely, 5 per cent, per annum, we were able to collect merely ii per cent, per annum; and if this Bill had been passed into law - “
The reference is to the State land Bill, which was only half as drastic, is this - “ The State would have taken £1,875 01 the £4,300 which we are at present collecting. Thus our interest would have been reduced from the promised rate of 5 per cent, to the miserable rate of 15s. per cent.”
This measure will absolutely kill the company. The company’s operations here have given a great deal of employment, and done a great deal of good, and we ought not to penalize it. I ask honorable members to listen to another case. This is an account of the operations of a company which started here in 1884, and in 1894 had to increase its capital.
– A local company?
– It was formed locally, but was transferred to England. The extra capital was raised to pay off charges on stations, &c, and it could only be obtained in London by technically domiciling the company there. It is a commercial fact that a company which has its head office in London can raise money more cheaply than a company whose head office is elsewhere. The debentures of the company amount to £2,450,000. Its capital is £1,250,000, so that it has been employing in its business altogether £3,700,000. Over 1,000,000 sheep belonging to the company died during the great drought which culminated in 1902, and the company has not paid dividends ‘for fifteen years. Last year it wrote off £’837,767 of capital. Technically, the company is an absentee one, though the whole of its business is done in the Commonwealth, and the pro posed tax will come to 5 per cent, on its total capital.
– Is not the fact that it has not paid dividends due to bad management?
– I managed the company myself for a long while, so that I know that it is not. During the drought in which the company lost 1,000,000 sheep, the number of sheep in Queensland was reduced from 21,000,000 to 7,000,000. The whole of the land belonging to the company was acquired as mortgageeinpossession, the way-back stations which have been spoken of, where the drought was most severe, falling into its hands. It was an investing company, and did not wish to own land, and for some years past it has been trying to dispose of its properties. In five years it has sold £150,000 worth of land to small men, financing them, and taking long terms for payment. Those who benefit from the operations of the company are its employes. The company is spending £187,000 on those engaged in looking after its stations and managing its business. It has large warehouses in Melbourne. Sydney, Brisbane, Rockhampton, and Townsville. Its sugar estates have been cut up and sold on terms to farmers. In short, the company has done everything to push business ; but under the Bill it will be treated as an absentee company, and charged extra taxation, and the remainder of its capital will have to be written off if the Bill is passed as it stands, in which case its estates will fall into the hands of debenture-holders. I direct the attention of honorable members to these cases, which are typical of a great many others. I am certain that they do not wish to do hardship. It is said that the troubles of Ireland are greatly due to absenteeism, and we do not desire that those who make their money here should live abroad ; but that is not a reason for inflicting injustice on British investors who have lent money here at low rates of interest, and have acquired properties through mortgagors being unable to meet their obligations. The country will get a bad name in Great Britain if the effect of our legislation is to wipe out of existence such companies as I have referred to. The Queensland Labour party decided at one of its conventions that persons should not pay both land and income tax in respect to any one property. At the present time, in some of the States, enormous sums are paid in income tax and municipal taxation.
– Those who pay municipal taxation get value for their money.
– At any rate, taxation paid to the States should be taken into account. I am glad that the Queensland State Labour party has decided that there should not be a double taxation, and I hope that honorable members generally will take that view. In conclusion, I wish only to refer to the moral view of this tax. A reference was made to it by Sir Henry Wrixon, in a very able letter which he published in the Argus a little while ago. He admitted at once that a tax was absolutely justifiable, that every sort of property was well able to bear a tax; but he contended that in imposing a tax on the unearned increment, as well as on the amount that had actually been paid for the right to use the land, we should overstep the bounds of fair dealing as between man and man. I am sure that honorable members opposite do not wish to do that. I am satisfied that they desire to give every one, so to speak, a fair deal j but, flushed as they are with their recent victory, they have, in their enthusiasm, done more than they intended to do. I am confident that the hard cases which will be brought under their notice during the next few clays will cause some of their opinions to be “ mellowed down.”’ It is the common belief of residents of cities and towns that the man in the country has a splendid time. The people of our cities think that the grass grows by the act of God, and that the farmer and pastoralist have only to sit down and rest while the wool grows.
– The honorable member did not gr> on the land.
– I have had my sharp of life on the land. At the outset I lived in the bush for seven years, and rarely came to town. The point at issue, however, is not so much what I have done, as what honorable members of the Labour party are doing. City residents, as I have said, are disposed to greatly exaggerate the prosperity that comes from the land, and do not readily recognise that no other classes of investment suffer such serious rebuffs as do investments in land. While it was the mandate of the constituencies that some class of land tax should be imposed, I do not think that any great body of people in Australia ever contemplated the introduction of such a drastic measure as that now before us. I trust that upon reflection honorable members opposite will recognise that many land-holders, particularly owners of poor, indifferent land in remote parts of the Commonwealth, and those whose properties, whether in town or country, are heavily mortgaged, are deserving of some consideration. Unless consideration is extended to them, many people will be absolutely ruined. I am sure that is not the spirit in which this measure is brought before us.
– Hear, hear !
– I am glad to have that encouraging cheer from the Minister of Home Affairs, and confidently expect that some modification of this exceedingly drastic measure will be agreed to.
Mr. W. ELLIOT JOHNSON (Lang) [5.19J. - One cannot help being struck by the extraordinary reticence of honorable members on the Ministerial side of the House, and the remarkable lack of interest which they manifest, judging by the state of the Treasury bench, in- a debate that is of paramount importance to the whole community. I can only conjecture that the reason for it is to be found in the difficulty that many honorable members opposite have in reconciling the measure now before us with their platform declarations as to the policy underlying their land tax proposals. I propose to address myself, not to the motion for the second reading of the Bill, but rather to the amendment moved by the Leader of the Opposition and all that it embraces. I have a reason for that, because I wish, a little later on, to move an amendment which I should be precluded from doing if I discussed the ‘ motion for the second reading.
– More delay.
– I would again remind the honorable member that there is no justification for such a remark, since there has been no attempt at obstruction on the part of the Opposition. I ask him to contrast our attitude with that of his party when in Opposition, and to compare the treatment which it served out to the then Ministry representing the Liberal party, with that which we are meting out to the present Labour Administration. .
– There is no analogy be- tween the two cases.
– Thank Heaven, there is not. I do not desire to see any more casualties in this Chamber, nor any of those scenes of disorder-
– Order ! Will the honorable member discuss the question?
– I shall not pursue that matter further. I was tempted to refer to it by the disorderly interjection of the honorable member.
– We are treating the Opposition very nicely.
– And we are treating the Ministry very well, and far better than they deserve.
– At all events, we have not “gagged “ the Opposition.
– Except by the process of physical exhaustion, and the occasion for “gagging” has not yet arisen through any conduct of Opposition members. We were galled upon this week to consent to additional sitting hours, in order to push on with legislation, and yet already there is being exhibited on the Ministerial side of the House a tired feeling, which augurs ill for the speedy transaction of business. The progressive land tax proposals of the Labour party furnish evidence of the fact to which I have often alluded - that the Labour party of to-day is no longer a party of principle, but merely a party of expediency. ‘ There is no guiding principle underlying its programme. That programme is changed every year, and before twelve months have passed, the basis of the land taxation now proposed may be relegated to the limbo of the forgotten and unhallowed past, and some other scheme substituted for it. The character of this legislation also impresses upon us the fact that the Labour party itself cannot claim to be in any sense a people’s party. It is simply a class party. Its legislation is purely on class lines, and it substitutes one form of class legislation for another class, which in remote days, unfortunately, did exist. This measure is based on a recognition of class aims, and not upon a recognition of the principles of justice, which should be the corner-stone and foundation of all legislation. As soon as we depart from those sound principles of justice, balancing the claims of every individual in the community equally in the sight of the law, and give privileges to one class at the expense of the rest of the community, we lay up for ourselves, as legislators, a great store of future trouble. It is because I am anxious to avoid that sort of thing that I earnestly ‘ ask honorable members to remember that we should come into this Chamber prepared to legislate equally in the interests of every section of the community. We should not set up one against another. We should not penalize one class for the advantage of another, nor discriminate between any sets of individuals in the community. Unfortunately, principle seems to have been abandoned by the Labour party for the sake of expediency. In following the debates at the more recent Labour Conferences, I have been forced to the conclusion that, year by year, the interest of the great masses of the community, resting upon some recognised basic principle, is not the guiding motive operating in the deliberations of that party, which, by the way, wrongly arrogates to itself the title of the “ Labour party.” We may find an explanation in the words used at the Conference of 1905 by Mr. Holman, Deputy Leader of the Labour party in the New South Wales Parliament. Principles were then being discussed, and certain of the Labour delegates, more honest than their leaders, wished principles instead of expedients to be recognised. But Mr. Holman, wilh that experience and astuteness which, I suppose, he had acquired as a politician in association with other politicians, found his former zeal as a reformer tempered by the fear of unpopularity with the rural constituents of his party, and so reminded them that- lt is not easy to go as sheep amongst wolves ; and they should consider what would be their fate in regard to some eight or ten wavering seats, which they should carefully look to.
Here we have a reason for the departure from principle. The land value taxation originally appearing in the New South Wales Labour platform contained no exemptions. The tax was to apply to every land-owner, and the first subsequent Conference declared absolutely against exemptions, but this did not suit the politicians who at a subsequent Labour Conference to which I have just referred, declared that the reason for the abandonment of that principle was that it was more necessary to get votes than to stand by principles. When it was a question of principle versus votes, principle had to go by the board. When the question of land value taxation first came up for consideration by the New South Wales Labour party, from which the birth of all the Labour parties, including the Commonwealth Labour party, dates-
– To what year is the honorable member referring?
– To the year 1890-1.
– Was that when the honorable member was a member of the Labour party ?
– That was when I was associated with the inception of the party, as a party of sound democratic principles, broad based on freedom and justice.
– The honorable member was not allowed to run the party himself, and they would have nothing to do with him !
– I was associated with that party and helped to draw up its platform. Its guiding principle was freedom - its flag was the flag of freedom - and there was no basis of restriction embodied in that platform, which was one of absolute Free Trade.
– Never !
– Never ! Encouragement to local industries was one of their planks - I put it in myself.
– There is an old adage which may be familial to honorable members about certain persons rushing in where angels fear to tread. The honorable members at that period were unknown in the Labour league. I have here the original platform and rules of organization which I assisted to draw up, and there is not one single word about encouragement to local industries.
– Does the honorable member propose to connect this with the question before the Chair?
– I desire to show the change from principle to expediency on the part of the Labour party. I have been accused of leaving that party, and I desire to show that they have left their platform and principles.
– The honorable member will not be in order in discussing the platform except in so far as it affects this Bill.
– Quite so. I merely propose to deal with the plank affecting land value taxation, for the purpose of contrasting the proposals then with the proposals now. As I say, I myself assisted to draw up that plank, and it was in the original platform upon which the first Labour party in Australia was elected.
– The honorable member had brains then, but he has none now !
– I do not think there is any justification for insulting remarks of that kind. I am not descending to the use of insulting epithets to honorable members opposite, but merely reminding them of their change of front. This was the plank known as No. 13 in the original platform -
The recognition in our legislative enactments of the natural and inalienable rights of the whole community to the land - upon which all must live and from which by labour all wealth is produced - by the taxation of that value which accrues to land from the presence and needs of the community, irrespective of improvements effected by human exertion ; and the absolute and indefeasible right of property on the part of all Crown tenants in improvements effected on their holdings.
That plank . 1 stand by to-day ; there is not a word which I do not now indorse. I have never swerved a hair’s breadth from the principles therein laid down; 1 do not repudiate a single line, sentence, word, or even comma, in the whole of that plank. It was a proposal, not to superimpose land value taxation on existing taxation, but to substitute the former for the latter. On 24th November, 1891, the Sydney Daily Telegraph, in the course of a leading article, had this significant reference -
When the programme of the Labour Electoral League was adopted as the political faith of the Labour bodies of this Colony, we pointed to the fact that the only expression of opinion with regard to taxation which it contained leaned in the direction of absolute Free Trade.
A week or two later, on the 12th December, the same newspaper, in another leading article, had the following -
When the platform of the League was drawn up and agreed to, it was everywhere commented upon in the press as embodying a distinct pronouncement absolutely contrary to Protection.
I am right, therefore, in saying that the land taxation proposal, when first inaugurated by the Labour party, embodied the idea of freedom - freedom to produce and freedom to exchange. These were the two basic principles of their land tax proposals.
– That is merely an expression of opinion twenty years ago.
– It was more than an expression of opinion. It was the expression of a basic economic principle. I have been told that I left the party ; but I still have the old colours of freedom hoisted, and honorable members opposite wish to haul them down and hoist in their stead the skull and cross bones of socialistic restriction and Protection.
– The honorable gentleman would make the tax a shilling in the pound if he had a chance !
– I am glad the Attorney-General is now present, because I should like to read what he. had to say on the matter to which I am referring. When the New South Wales Parliament was dealing with the question of land value taxation, a decision had been arrived at during a previous. Labour league conference, that there was to be no exemption. The present Attorney-General was a member of that Parliament; and when it was proposed to introduce the principle of exemption, what did he say ? The honorable gentleman, who is now the arch-champion of an exemption of £5,000, and twits honorable members on this side with inconsistency. He has quoted copiously from speeches made by the Leader of the Opposition in the earlier stages of his political career ; but what did he himself say, as reported in the New South Wales Hansard of 7th March, 1895, page 4239? In the course of a somewhat lengthy speech he said -
As one who has consistently for the past eight or ten years advocated a tax on land values without exemption, I should like to say what I think f the amendment proposed.
That was an amendment to include an exemption -
This amendment reminds me of that cloud, no bigger than a man’s hand that spread all over the political horizon. This amendment seems to me to contain something else than a mere attack on the principle of land-value taxation without exemptions, and seems uncommonly like an attack of a friend to upset the Government. It appears to me that this sudden conversion - I can call it by no other name, and I am no neophyte in this matter - this sudden conversion of three earnest land-value taxers to this most incredible and unheard-of theory of exemption, which is not an exemption at all, but a deduction, presages something extraordinary.
Who could believe that these were the words of the present Attorney-General? The exemption then proposed was one of £500, arid the exemption now proposed is the much more drastic one of £5,000, ten times as much. At that time the Attorney-General did not approve of an exemption of even a penny, and he goes on to give his reasons -
I have never in my most insane and wild moments ever contemplated such ignominy as that; but I have given some attention to landvalue taxation for all that, although I have not inflicted on this long-suffering country anything of that description. I have attempted to read what those who know something more even than the honorable member for Hay have had to say on the matter. I remember the howl of indignation that awaited Henry George as he stepped off from Adelaide, when he told us how to impose a tax on unimproved land values to suit the Australian complexion. I was the bosom friend of a number of extremely infatuated single taxers at that time, and I remember what they called Henry George, and I read what they called him in America.
The Attorney-General was unmeasured in his denunciation of the principle of exemption, and in characteristic fashion used all the terms of invective against those who supported exemptions which parliamentary procedure would permit. He went on to say -
And mark you, to allow a man to talk about justice because a man has purchased land at £1 an acre, and then say it is just to grant him immunity up to that amount of taxation, is to the last degree absurd, because some men bought land, sixty, eighty, and nearly a hundred years ago. Most men in this country who hold land to any extent bought it over twenty years ago. They have had the use of that land for twenty years without paying a fraction to the State.
Are not the lands which it is proposed to exempt up to £5,000 not exactly in the same position? If it was not just to have an exemption of £1 then, on what grounds does the Attorney-General defend his position to-day as an advocate of a £5,000 exemption.
– Hear, hear ! Pretty cocky !
– The Attorney-General may choose to treat this matter jocularly, but he was in a very different mood when bringing the Leader of the Opposition to book for his utterances on the same subject.
– I ask for a land tax, and the honorable member is against it.
– That” is not correct, as the honorable member well knows. This is an abortion of a land tax.
– The honorable member is always against it.
– I oppose the Government’s Bill because it is unjust - because it is merely an expedient conceived in revenge. It is conceived in a desire to hit only those who cannot hit back - to hit the larger land-owners because they happen to be so- numerically small that they have no power to retaliate. That shows moral cowardice. But where in the proposals of the Government do we find the principle of land value taxation, coupled with the abolition of indirect taxes upon industry, taxes which fall heaviest upon our producing classes? That is the true principle of land value taxation, but I do not see it anywhere in this Bill. It does not appear because our honorable friends opposite have not the courage of their convictions. They are afraid to explain to the farmers and other small land-owners what an immense benefit it would be to them if they were to pay a land value tax in lieu of all the other taxes they have to pay at present, with the additional advantages of cheapened railway freights, more frequent means of communication, light lines of railway linking up the trunk lines, and all the other benefits which could be conferred by the inauguration of such a system.
– The single tax.
Mi. W. ELLIOT JOHNSON.- The honorable member is quite right ; that is the single tax principle, and it was the original proposal of the Labour platform when the party was started as a party. It was the platform and the principle to which I subscribed, and it is the principle for which I still stand to-day. I am not, and never have been, in favour of super-imposing land value taxation with exemptions, and of a progressive character, upon existing taxation. I have always advocated the principle of land value taxation as a substituted tax, not as a means of bursting up this or that, but as a means of securing equal justice to all and providing revenue to carry on necessary governmental works and functions and the various ramifications of administration incidental to the conduct of the affairs of a civilized community. Those are the true principles upon which taxation should be based, but they are not recognised in this measure by the present occupants of the Treasury bench, or by the party behind them. What appears in this measure is something to which I have, I think correctly, applied the name of expediency. There was a time not so very far remote when it was the opinion of the Labour party that land taxation was a function which should be left entirely to the States. When Mr. Watson was Leader of the Labour party he made this very plain in reply to a speech made, or a manifesto issued, by Mr. Reid. Speaking at the Balmain Town Hall on 22nd November, 1906, only four short years ago, as reported in the Sydney Morning Herald of the following day, he said -
While Mr. Reid was trying to frighten the farmers of Australia by the statement that the Labour party was endeavouring to bring about the nationalization of the land, he omitted to put the saving clause in, viz., that the question of land nationalization was one for the State Parliaments to deal with, and certainly was not to be attempted by the Federal Parliament.
That was Mr. Watson’s utterance at election time as the mouth-piece of the Labour party in this Parliament. He declared that not only was it a State matter, but that the party themselves had no thought of making it a Commonwealth matter.
– What did he say at the Brisbane Conference?
– I admit that what he said at the Brisbane Conference was entirely different, but it was only another instance of the inconsistency and lack of principle characteristic of the Labour party nowadays. That which stands good to-day does not stand good to-morrow, and that which will stand good to-morrow will not be held good the day after. So we never know where the party are in regard to their proposals, simply because they have no principles. All their proposals are based merely on expediency, in order to catch in their sails whatever wind may be blowing from the popular quarter. A party who hope to legislate on these lines and to be regarded as reformers are doomed sooner or later to failure. A well-known man has said, “ You can fool some of the people all the time, and all the people some of the ‘time, but you cannot fool all the people all the time.” ‘So honorable members opposite will find later on. The shallowness of their measures and their total lack of principle will sooner or later be borne in upon the public mind, and one of these days the public will rise in their might and call the party to account because of the disastrous results which must necessarily follow legislation which fails to recognise the underlying principle of justice in its operations.
– The honorable member forgets that there was a great necessity for a political bribe at the last general election.
– Just so. But what about their boasted political purity and disinterestedness? I do not believe in bribes, political or otherwise. Probably some of the newer members of the party really believed that they were heaven-born reformers, and that coming into the movement with the enthusiasm of youth and inexperience they were going to turn the world upside down.
– That is what the honorable member thought when he picked up the single tax.
– I have never gone back on it. The difference between myself and honorable members opposite is that I did not take hold of a principle until I had thoroughly examined and tested it, and was convinced that it was sound. Having been convinced that the principle to which the honorable member refers was sound, and having had no occasion since to believe otherwise, I have never gone back on it a hair’s breadth. I therefore stand to-day as I stood in 1890, on the same platform, advocating the same principle, with the same ideals and the same belief in their ultimate triumph. The AttorneyGeneral was not alone in his position at the time to which I have referred. He was supported by the present Leader of the New South Wales Labour party, Mr. McGOwen, who, speaking regarding the same proposal for an exemption, said -
There are a number of honorable members who have waived their personal feelings for the sake of getting the Bill passed, but who will not under any circumstances vote for an exemption °v« £500.
That is recorded at page 4275 of the New South Wales Hansard for 7th March, 1895. At page 4268 of the same issue, Mr. Copeland asked Mr. J. C. Watson -
Why did the honorable member vote against the £1,000 exemption? and Mr. Watson replied -
Because I believe it to be loo great an exemption. I voted in favour of the £500, because, as far as I can see, it is reasonable. I believe that £1,000 would allow many large holders to escape. If this evil is existent - that men who hold land in large areas would cut it up to such an extent as to escape a good deal of taxation - if that exists in regard to the £500, it is twice as great an evil in regard to the £1.000.
I go further, and say that if it was a great evil under the £500 exemption it_ is ten times as great an evil under the £5,000 exemption.
– The honorable member seems to forget, in making these quotations, that New South Wales, in 1895, was not the Commonwealth in 1910.
– But a principle which was true in essence then must be equally true in essence now. The gentleman who is now Attorney-General of the Commonwealth, and a member of a Ministry proposing a £5,000 exemption, is identical with the gentleman who, in the New South Wales Parliament, described the theory of exemptions as being “ incredible and unheard of.” If the honorable member for Adelaide will take the trouble to read that speech through, he will see how soundly the Attorney-General rated all those who were going to vote for an exemption, for their desertion of a great principle. He said that exemptions could not be defended on any ground whatever. Yet now we have him proposing a £5,000 exemption.
– The honorable member has not deserted the great flag, has he ?
– I have already made it plain that I still hold to my principles.
– But the honorable member, unfortunately, is in a party that will not propose them.
– I admit that there is a certain amount of truth in the honorable member’s contention. I am not responsible for the opinions held by all the members sitting on this side. I can speak only for myself, but we on this side are in the happy position of not being bound by decisions in caucus. We are in no way trammelled, but have full liberty to express, and vote according to, our own convictions. Honorable members will find that out at a later stage of the debate, when I propose to move an amendment embodying the principle to which I am now giving utterance. Honorable members will then have an opportunity to show whether they wish to range themselves on the side of principle and justice and legislation for the benefit of the whole community, or on that of expediency, injustice, and class legislation. We are troubled to know the real purpose of the Bill. During the recent electoral campaign it was claimed by every Labour candidate that if the party got into power a tax would be imposed to burst up big estates for the promotion of settlement. Now, without adequate explanation, the party has receded from that policy. The talk about bursting up large estates has practically ceased ; even the Attorney-General has abandoned the position which he took up prior to the elections, though these changes are becoming so frequent that one follows them with difficulty. Why all this deception? Speaking at the Glebe Town Hall, Sydney, on the 15th February last, he was reported as follows -
The chief plank of the Labour platform is to wipe out land monopoly by making it unprofitable to hold land out of use. The purpose was to burst up the big estates. . . . That was the issue. That was what the election would turn on. On it depended the immigration policy and the defence policy of Australia.
There was no question of raising revenue then. The object of the tax was the bursting up of large estates for the alleged promotion of agriculture and other rural settlement. The taxing of city property cannot have that effect. The electors were asked to vote for a land tax to increase settlement, and gave their mandate for such a tax. But having received an indorsement of their bursting up policy, Labour members now say, “ Our intention is, not to burst up big estates, but to obtain revenue.” Throughout the electoral campaign the string upon which Labour candidates played unceasingly was the bursting up of large estates. Perhaps it gave way at last under the strain. At any rate, they are now playing on another string. Three weeks before polling-day, in an article published in the Sydney Daily Telegraph, headed, “ The case for Labour,” the Attorney-General wrote of the land tax proposal of the Labour party -
It is to impose a graduated tax upon the unimproved value of land, exempting estates the unimproved value of which is £5,000 and under.
There is no word about revenue being needed from this source for defence, the building of a Federal Capital, or any other purpose. The article is available to any honorable member who cares to refer to it in the Library. On Saturday last another declaration was made in an article in the same journal, but it is qualified by the developments which have occurred since the Labour party took office. The honorable member for Werriwa, on returning thanks for his election, is reported to have said -
If the Labour party came before the public in three years, and the big estates were not burst up, the people should consider them unworthy of their place.
The honorable member said nothing about raising revenue for defence, or other Federal purposes, by means of a land tax. All that he and every member of the party was concerned with was the bursting up of big estates for the promotion of settlement. Settlement is not promoted by taxing the land on which stands a bank, a shop, a factory, or a warehouse, however desirable such a tax may be from a revenue or economic stand-point. The bursting up of big estates for the encouragement of a vigorous immigration policy might be accomplished by taxing the pastoral lands of the country, but certainly could not be by the taxation of urban improved blocks of land of necessarily very small area. Mr. Holman, M.L.A., the Deputy Leader of the New South Wales Labour party, speaking in support of the present member for Nepean, said -
The first principle of the Labour party was to put a graduated land tax on the great estates of Australia.
The great estates of Australia are not those in the cities and towns, but the mammoth estates, covering thousands, and tens of thousands, of acres in the country.
– Are there no big estates in the city?
– There are no “great” estates in the city, in the sense in which Mr. Holman used the word. The site of a bank or a factory cannot be subdivided for the promotion of agriculture. There is much confusion of terms on the part of honorable members opposite. They do not seem to realize the real meaning or the proper application of the terms they employ. Mr. Holman, when he spoke of “great” estates, obviously did not mean city estates. An estate may be valuable without being great. For the amount which would be charged for 2 feet of land in some parts of Collins-street, Melbourne, one could buy an area in the country greater “than the whole of Melbourne and its suburbs. Mr. Holman’s subsequent remark bears out my contention -
If they could get rid of those 72S big holders -
The holders of big estates in the country ; not of valuable city land -
If they could get rid of those 728 big holders, they could divide the estates up into smaller ones, and so allow every inch of land to be cultivated.
Mr. Holman’s idea was that the pastoral estates should be converted into agricultural areas, the holders being forced by taxation to subdivide. How could a city block already built upon be cut up into areas for cultivation ? On the face of it, such a proposition is absurd; and, consequently, honorable members who try to give to the word “great,” as used in that connexion, the meaning “valuable,” will find the ground cut from their feet by the later declaration of Mr. Holman explanatory of his statement in regard to the subdivision of great estates. At the last general election, I was opposed by a reverend gentleman, who stood as a Labour candidate, and who played this “big-estates string” on his fiddle until, I suppose, it was worn out like that on the fiddles played by other members of his party. Referring to the Federal land tax proposals embodied in the policy of the Labour party, he said that the chief object was “ to break up large estates and promote settlement.” Indeed, he went further, and said, “ It is a special tax for that purpose.” He did not say that it was a special tax to raise revenue to carry out Commonwealth works, to build railways, to construct an Australian Navy, to set up the Federal Capital, to provide for the acquisition of the Northern Territory, or for any of those other great undertakings for which revenue will be required. lt was a special tax, he said, to break up large estates and promote settlement. Mr. J. C. Watson, the late leader of the Federal Labour party, after he had evidently abandoned the idea that land values taxation was a sphere of taxation belonging properly to the States alone, was careful to point out that the object of a tax of this kind was, not to produce revenue, but to burst up big estates. He went further, and declared that it would yield little or no revenue worth talking about. It was clear that he had no idea that a progressive land tax would be imposed upon urban properties. He never spoke of this as being in the slightest degree a taxation measure designed to raise revenue for Commonwealth purposes. Then we come to the manifesto of the Labour party, issued in connexion with the last general election, and signed by the leaders of the movement. In that manifesto, we have the declaration that the Labour party’s proposal - is that a progressive land tax should be imposed for the purpose of breaking up large estates.
There was not a word in that manifesto as to the tax being imposed for revenue purposes. We have it, therefore, from the mouths of the Labour leaders, from prominent members of the Labour Government, as well as from Labour journals, and the Labour party’s manifesto, that the object o’f this proposal, as embodied in the Labour platform, was to burst up big estates and settle people on the land. In view of the authorities I have quoted, there should be no doubt as to what was the original object of these proposals. We now find the Labour party receding from that position, and taking up what, in my opinion, is a proper stand. But it was not the stand upon which they based their appeal to the electors. And that is the essential point. Their former basis was wrong, and wholly indefensible on ethical or economic grounds. I pointed this out during my campaign, and predicted that it would be found to be unconstitutional. They have now backed down from the position because they find it is as I have said. A tax should not be imposed merely for the purpose of penalizing one set of land-owners to the advantage of another. Legislation can be passed not involving taxation to prevent the aggregation of large estates. It can be accomplished if it is thought necessary, by legislation prohibiting the holding of larger areas than may be considered requisite for the purpose of legitimate settlement.
– That can be done without the imposition of a tax.
– Yes ; a tax would not be necessary to bring it about. Ministers themselves hold the opinion that it is advisable to break up large estates for the purposes of closer settlement, and there is a more effective means of bringing that about than a cumbersome method of taxation which is unjust in its incidence, and unconstitutional in itself. So far as the present basis of taxation is concerned, I think that the purpose now declared, and not that originally stated, is the more correct one on which to base legislation involving taxation. If we are to have recourse to land value taxation to provide revenue, then we are on sound economic ground. It is the one legitimate source of revenue standing out above every other to meet the legitimate expenses of Government. I do not believe in imposing taxation for the mere sake of taxation. If we could do without taxation of any kind I should be better pleased. The less taxation we have to pay the better, and the nearest approach to that condition of things’ is to be obtained by the abolition of indirect taxation - the abolition of those taxes which press upon industry, and fall upon labour, and which the poorest section of the community have most largely to pay. I should abolish all those if we could do so. But since we must have revenue, then I say that the lands of the community which belong naturally to the community as a whole - in which, being land animals, the people have a vital personal interest - constitute a legitimate source of taxation to provide revenue for the government of the country. But there is a right and a wrong method of procedure, and that adopted by the present Government is fundamentally wrong, because it is not founded upon the recognition of the equal rights of every individual member of the community to share in values which are purely communitycreated. On what ground can any exemption be defended? Why is it wrong for any one to hold over £5,000 worth of land without taxation, and right for others to hold £5,000 worth, without taxation? If the community has a right to take in taxation any of the value above £5,000, they have just the same right to take portion of the value up to £5.000. If we could get rid of every tax that now presses heavily upon industry, and upon those engaged in rural pursuits, there would be no shadow of even a pretence of excuse for any exemption, and we should have none of that trouble arising from exemptions which is bound to occur by reason of collusion, favoritism, evasion, and the various known methods of escaping payment of one’s just obligation to the Treasury in return for the Governmental advantages which the people enjoy. It has not been explained why it is reasonable and proper to levy taxation upon £5,001 worth of unimproved land values, and to exempt from taxation £5,000 worth. The whole proposition is absurd. On what ground of justice can such a principle be defended ? I have ransacked my brains, as well as the standard economic authorities, and can find none.
Sitting suspended from 6.30 to 7.45 p.m.
– When we adjourned, I was pointing out that the proposal to tax £5,001 worth of land, and to exempt £5,000 worth, is absolutely indefensible on any ground of justice or logic, and that I have been unable to. find a reason for such a proposal, other than that form of political cowardice, which sacrifices principles rather than risk the sacrifice of votes.
– It is the only explanation that occurs to the honorable member !
– I shall be very glad to hear the honorable member tell us-
– The honorable member will not have a chance !
– I thought as much. I thought we should not have an opportunity of hearing either the honorable member himself, or any other honorable member on that side, in defence of this proposal, on the ground of justice, though, no doubt, it may be defended on the ground of expediency, like every other unsound proposal. In this case, “ expediency “ is only another name for “ political cowardice.” Honorable members opposite seize hold of a principle and apply it in a wrong way and up to a certain point, selecting for its operation that class of electors who are not numerically strong enough to offer effective resistance, and excluding large numbers of people, who, by reason of their numerical strength, are able to retaliate at election times. If honorable members opposite will only be reasonably honest they must admit that such is the case. I have already quoted from speeches made at the Labour Conference, to show that this idea lay behind the proposal. This was shown when Mr. Holman declared that it would not do for the members of the party to go as “ sheep among the wolves.” Who are the “ sheep,” and who are the “wolves “? Are politicians the poor innocent lambs? Fancy them going amongst the general public, whom they describe as wolves, and being swallowed for advocating a principle which can be defended on every ground ; and which I am prepared to defend, and have defended, in the heart of farming communities ! I have shown farmers in their own centres by demonstration on the blackboard that it is to their interest to adopt the principle of sound land values taxation without exemptions and thus get rid of other taxation which presses unduly on them, and obtain a relief that the Labour party now, or at any future time, is not likely to offer them. In practice, what will this taxation lead tor” Unquestionably it will lead to evasion, and open the door to dishonest practices. An estate of £20,000 will be exempt to the extent of £5,000, leaving £15,000 taxable, on the graduated scale, at 1 jd. in the £1, yielding £93 15s. But what will be more simple than for the owner of the estate to divide it amongst his three sons, or other members of his family and himself. £5,000 worth to each, each “dummy” division thus escaping taxation by coming within the exemption?
– I do not think so.
– It has been found so in New Zealand. Further, the imposition of a progressive tax has not stopped the aggregation of large estates m the Dominion ; and I may be pardoned for quoting the following from the New Zealand Budget Statement of 1909, page 20, under the heading “ Limitation ot area.” -
The evil of aggregation still prevails, and drastic measures must be employed to check it. Moreover, the law still allows too large an area of Crown land to be taken up by one person, and the proposed legislation will therefore provide a limit of 400 acres in respect of first-class land, and a correspondingly reduced area in respect of second and third-class land. An effective provision will also be made against evasion by providing that these limitations shall apply to the area to be occupied and not merely to the area owned.
It will be seen that a progressive tax has led to evasion, and has not prevented the aggregation of large estates, and that now the Government are driven to legislative proposals, not involving a tax, but of a different character, for the purpose of meeting the evil. Like causes produce like effects; and the causes that lead to evasion and aggregation in New Zealand will similarly operate in the Commonwealth. If the real purpose of the party is to break up large estates, it can be achieved much more effectively by other means. Taxation can only be justified generally by the needs of public revenue; though, perhaps, in some special cases it may be imposed on other grounds, but certainly not on the grounds which, though not stated in the Bill, were urged by the Labour party during the election campaign. I should like to quote another extract from the same New Zealand Budget as follows : -
Every man who now owns a freehold is entitled to it, and under no conditions would the State be justified in taking any step to weaken his freehold tenure. In dealing with the disposal of its lands the State should observe two great principles - first, suitably close settlement must be promoted and encouraged bv every reasonable means; second, the State must, in justice to ils present and future people as a whole, reserve to them some part of that value which public expenditure will create, in the lands it is now parting with to private hands.
The Budget proceeds -
There is room for wide difference of opinion as to the extent to which State operations and private effort respectively create values in land, but while there may be this difference as to the degree there surely can be no such difference as to the fact that in a young and sparsely-populated country like this, where such enormous natural developmental work is being done mainly at the expense of the people as a whole, some increased value will be steadily added bv State operations to the lands it is parting with, and of that increased value the people are entitled lo at least a share.
I can support those views as being on sound lines of policy. I take no exception to the recognition of the public ownership in land values which are created by the activities and expenditure in connexion with the growth of population. On the contrary justice and equity alike demand that recognition. The values which are created by the community as a whole are a proper and legitimate source to be levied on for the purpose of carrying on the government of the community. Those values belong to the .community, and the use of them for the benefit of the community is only the recognition of the right of the community to participate in what the community has created. But, similarly, the value which attaches to productions the result of individual effort and activity belong naturally and by right to the people who create that value. That constitutes the natural reward of labour and capital. Of course, nobody really creates anything, not even the tiniest mote that floats in the sunshine; but using the word “create” in the sense of manufacturing or acquiring wealth by labour, such wealth or value belongs by right to the individual, and should be sacred as the property of the individual, and not made the subject of taxation for community needs, except when other sources, such as I have indicated, have failed to give the necessary revenue. I was saying that a similar policy of progressive land taxation in New Zealand had not enabled people to obtain cheap land. One of the reasons urged for this taxation is that it will enable people to obtain land cheaper than they do now. Experience once more is against that theory, for in New Zealand it has not had that result. I have before me a table taken from the official Year-Book of New Zealand, which shows that, although the increase of population in a certain period was only 25 per cent., the increase of unimproved land values was nearly 100 per cent, in the same period. In the year 1897 the population of New Zealand was, in round numbers, 729,000. and the unimproved land value was £84,401,000. By the year 1908 the population had increased to 960,000, and the unimproved land value to £161,324,000. Those figures clearly prove that this system of taxation has not resulted in the cheapening of land to those who want to use it. The progressive land fax in that country has not cheapened land for land users, or stopped the aggregation of estates, but has, on the other hand, led to evasions of taxation. In order to correct the evils that still continue to exist under that system, and to prevent the aggregation of large estates and the evasion of the tax, resort has now to be had to other legislative methods. With regard to the question of differentiating between one class of land-owner and another, whilst I am not a lawyer, and cannot claim to be a constitutional authority, there is one aspect of the constitutional question to which I desire briefly to refer. I allude to the question of discrimination and preference. In this case there is a differentiation in taxation, not between different States, but between different persons and different classes of persons in the same State. It is a question worthy of the serious consideration of the legal members of the House whether the Government’s taxation proposals, with their £5,000 exemption and their graduated increases according to various amounts above £5,000, do not come within the meaning of “ preference and discrimination,” and whether they do not constitute a breach of the Constitution. According to Quick and Garran. page 912 -
Guided by the English and American authorities, we may now proceed to discuss the meaning of the words “preference” and “ discrimination “ in this Constitution. Before any clear idea can be formed of what constitutes a preference or discrimination which is undue and unreasonable, or unjust to any State, it is necessary to obtain some definition of the words “ preference “ and “ discrimination “ themselves. A preference is a setting of one person or thing before another ; here it means a dissimilarity of treatment, involving advantage to one person, locality, or class of goods, or prejudice to another. DisCrimination is a difference of treatment; as applied to railways it is denned by Webster’s International Dictionary as “ the arbitrary imposition of unequal tariffs for substantially the same service.”
If, in discussing this question, we substitute “unequal taxes” for “unequal tariffs,” I think, as a layman, that that quotation will apply, because there is a discrimination between different persons and classes in exactly the same way. In the same paragraph it is stated - “Discrimination” in the Inter-State Commerce Act, section 4, is applied to persons only, and means a departure from equal treatment of persons in respect of substantially the same service.
Is not this Bill a departure from the equal treatment of persons in respect of substantially the same services? Do not all people get substantially the same services as the result of government? In that connexion, I refer to means of transport rind conveyance, police protection, defence, and all those other services which are meted out ; in substantially the same measure to every individual in the community. Again, the authors state -
At least it is clear that the words “ preference “ and “discrimination” together cover differences of treatment (1) as between different persons ; (2) as between different descriptions of traffic; and (3) as between different localities. That is to say, the words include the unequal treatment of persons, &c.”
I do not think it can be denied that there is in this Bill unequal treatment of persons in the proposals for exemption, and for making some persons pay a higher measure of taxation than others in proportion to the value of their land.
– To what section are the writers referring?
– Section 102 of the Constitution.
– That section refers only to railways.
– I bow, of course, to the honorable member’s opinion, but might it not apply not only to railways and the services rendered by them, but also to the other governmental services which I have enumerated? Might it not apply to taxes as well as railway tariffs?
– Does the honorable membei say this is a discriminating tax?
– YesThere is discrimination all the time from THE£5,001 point upwards, and also by the exemption itself. I shall be glad if the honorable member, as a lawyer, will look closely into that matter. My own view is that the guiding principle of Democracy should be, and at one time was, in New South Wales, at any rate, freedom to produce for everybody, and freedom to exchange. . Freedom to produce necessarily involves freedom of access to Nature’s storehouse, to natural opportunity, to the land from which we all come, from which we all have to draw our subsistence, and to which we must all ultimately return. I am, therefore, at’ one with the Labour party in their contention that land is a proper subject for taxation, and that we cannot have freedom to produce while land is monopolized by a few individuals to the exclusion of the rest.. There can be no freedom to produce while natural opportunities are locked up from human labour, and human production cannot go on unrestrained, unchecked, and untrammelled while the right of a few people to own the earth’s surface is recognised to the exclusion of the remainder. The principle of recognising public ownership in land values is, therefore, right. But their Land Taxation Bill does not rest upon a just basis. Tt is not to the principle that I object, but to the discriminating, wrong, and unjust method of applying- it. Whilst recognising the right, we must do justice to all in applying the principle. Having conceded so much, we are met with the next proposition. Freedom of production is useless without freedom of exchange - that is, freedom to exchange the products of our labour and capital for those of the labour and capital of those in other parts of the world. A necessary corollary to freedom of production is freedom of exchange. The right of the individual to what he earns involves the right to exchange the products of his labour and capital for those of others. There is no escape from the logic of that position. It is here that I am opposed to the Labour party, because they now deny that principle. The first members of that partyrecognised these fundamental and basic truths, which are eternal ; but the present members choose to ignore them. The members of the party during the last Parliament were responsible for imposing the heaviest restrictions on freedom of exchange ever legalized in any country. They were responsible for taxing with crushing severity the food, clothing, and household requisites of the poorest in the community. They taxed, too, similarly, the requirements of the farmers and producers. They piled up taxation on manufactures in a manner which has seriously handicapped the farmers, whom they taxed to keep boys and girls employed in the city factories, to crowd the city slums, and deplete the population of thi; rural districts, and to intensify the social evils which we all deplore.
– What about the honorable member’s leader?
– Some of those on this side are not entirely blameless. What was done could not have been done, had it not been for the Labour party. The. duties to which I refer could not have been passed had it not been for the votes of the Labour Party, many of whom were professed Free Traders, and yet voted to place the heaviest imposts on the backs of the workers, who find that, owing to the Tariff, the value of £1 has been reduced to about :13s. 6d. - that is, that £1 now will purchase only as much as they could have bought for 13s. 6d. in New South Wales prior to Federation.
– The honorable member must not pursue that line of argument.
– My desire is to point out that what we should do is not to add taxation to that already in existence, but to substitute a land-values tax for taxes on labour products, and thus relieve the poor of burdens which they should not have to bear, and place those burdens on the shoulders of those who should properly carry them. When we have freedom of production, and freedom of exchange, the workers will get the full value of their labour in the increased spending value of their wages, and the wages themselves will be naturally increased by the ever-growing demand for labour due to the development of the country’s natural resources. I ask: honorable members if what I suggest is not. more democratic than the proposals whichare now being submitted to the House? I have outlined the truest and best way of assisting the workers.
– Cannot the honorable member convert his leader to his way of thinking?
– The interjection is apposite. I am not entirely without hope for some erring fiscalists on this side. Unfortunately, two or three of the members on this side of the Chamber are nearly as Conservative as the Ministerialists, though, as the result of their association with the Liberals of New South Wales, they are losing much of their veneer of Conservatism, and will, sooner or later, fall into the democratic line and recognise that we must have a progressive policy which will acknowledge the right of the people to enjoy to the full their natural opportunities, and to be free of taxation on articles of human production. This principle has always been associated with Liberalism in the Old Country, and I hope that some of the members on this side who at present do not see eye to eye with me on this matter will, as the result of this debate, come round to my views, and that some of those opposite, who, no doubt, desire to do their best for the workers, though their methods will have the opposite effect, will ultimately see the error of their, ways, and return to the fold of freedom, acknowledging that the true salvation of Labour lies in the recognition of the right of the workers to be free. I will move the amendment as circulated at a later stage of the debate.
– It is with pleasure that I congratulate the Government 011 having brought forward this measure so early in the session. To my mind,’ the Bill is the most important that we have had before us. T congratulate the Attorney-General upon the able way in which he dealt with the intricate questions on which he had to speak yesterday; and it is with diffidence that I follow such speakers as the honorable member for Co:rangamite. But, after hearing the speech of the honorable member for Wakefield, I could not refrain from speaking. The honorable member accused the Labour party of wishing to impose land taxation for the purpose of breaking up the large estates, and to obtain revenue. I recognised both those purposes when addressing the electors ; but I also stated that there was something deeper and greater in the proposal, and that I favoured the imposition of a land tax because such a tax is the only one that is just and fair, and it could not be shifted on to other people’s shoulders.
– The honorable member possesses no land.
– The honorable member will have an opportunity to look after his big estates later ; and I shall be glad, therefore, if he will keep quiet while I am addressing the House. I understand that he has no knowledge of mercantile economy, so that what I am about to say may enlighten him. Those who have studied mercantile economy, know that a tax on products coming into the country, for whatever purpose imposed, often enables the sellers of goods to greatly increase their profits. If a merchant is running his business successfully, he is able, not only to pass on to those to whom he sells the Customs duties levied on his goods, but also to make them pay interest on the money which he spends in meeting Customs charges. An unimproved land value tax, however, cannot be passed on, because the landlord always gets as much rent as he can from the tenant.
– Not always.
– All landlords are not like the honorable member. I am sorry that he is accumulating so much wealth, because it may blight his intellect. If that happens, he will eventually adopt the measures now taken by most landlords, and, instead of treating his tenants in the philanthropic way in which, I understand, they are now treated, will rent his houses to the highest bidders. Landlords get as much as they can from their unfortunate tenants at present; and, therefore, cannot pass on any taxation which we may impose on their properties. That is why there is so much opposition to this proposal on the part of honorable members seated on the other side of the Chamber. They will now have to ipay their just and fair share of taxation. I feel sure that the honorable member for Parramatta will bear out what I have said. I do not know his present views on land taxation; but, in the past, no one was better informed on the land question than he, and for years, when he held a high and honorable position in the Legislative Assembly of New South- Wales, I was a student of his speeches. Another matter to which I wish to refer is this : It is rent, not supply and demand, that regulates wages. How can a business man or a farmer who has to pay high rents afford to give good wages to employes? Landlords take such a huge share of the amount of wealth produced every year, that their tenants cannot earn a fair interest on their outlay. I polled heavily in my constituency, because I said that I did not look upon the contractor employing fifty or one hundred men as a capitalist, as he might be paying rent, and- have an overdraft at the bank. How could such a man be a capitalist? One of the keenest and brighest intellects in Australia, a man who is not appreciated here as he should be, although he is appreciated in Germany and Switzerland, where his books on the land question and on evolution are being printed to be distributed in the schools - I refer to Mr. A. J. Ogil/y - says -
Let the workers realize ….
That all ground Rent,- amounting to millions in the Australian Colonies alone, is so much pure tribute which they have to find for the enrichment of a privileged class which does nothing for it, and that it all comes out of the earnings of work ; for the annual output being what it is, the more of it that goes to the do-nothings the less there remains for the do-alls.
That all that part of this enormous tribute that represents Monopolv Rent, as distinguished from Differential Rent, springs from the power of the land-owners to withhold natural opportunities, checking production and causing that cut-throat competition for employment that keeps down labourers’ wages, tradesmen’s profits, professional men’s incomes, and earnings of work of all kinds.
That is the statement of a farmer of some repute in Tasmania who is certainly one of the keenest intellects in the Commonwealth. I have attended numerous lectures given by him, and am glad of this opportunity to pay him a tribute for what he has done in educating the youth of our State. We have a similar statement from John Stuart Mill. Speaking from memory, I think that it was in . 1856, that in referring to the Irish land tenantry, he said that every seven years tenders are called for leasing the lands, and that if a bad season is experienced the unfortunate tenant has the burden placed upon his back, like the old man of the sea, and goes on bearing the capitalist all along the line. The result of this policy is illustrated by the fact that in 1800- 1 Ireland had a population of 8,000,000, whereas at the present time it has a population of only a little over 4,000,000. That is the position of Ireland to-day, notwithstanding that quite recently the British Government have expended a large sum in acquiring estates there. Unfortunately, the railways of Ireland, unlike those of Australia, are not owned by the State, and immediately a farmer is able to get improved returns from his land railway freights are increased 25 per cent., and in that way his money is taken from him. I refer to these facts as showing the important part that land plays in the whole economic question. It is the source of all wealth, it is the fulcrum upon which the monopolist rests his lever in pushing the wage slave into his present position. How many men would be working for others if they could become their own masters by obtaining land for themselves on easy terms? With all due deference to the Opposition, I deny that land can be obtained in Australia as easily as they would have us believe. All land easy of access is one huge monopoly. In speaking in this way, I wish the House to understand that I am attacking, not individuals, but the system itself. While the electors allow the system to exist they alone are responsible, and not those who monopolize the land. But on the 13th April last the people sent us here to break down land monopoly, and we are going to do so. If we do not, then upon us, and not upon the hig land-owners of the present day, must rest the responsibility. It is for this reason that I am disposed to speak generously of the squatters, but in view of what we have heard from the other side, I am impelled to quote facts as to the actual position. The honorable member for Wakefield said that the squatters had done much to develop the country. I turn to Mr. B. R. Wise’s excellent work, The Commonwealth <oJ Australia, which is now being read and quoted all over the world. The right honorable member for Swan seems to be amused at that statement, but I assure him that my attention was first directed to this work by a quotation from it which I saw in a leading London review. Mr. Wise points out that in New South Wales there was a legal tender currency, not of gold or silver, but of rum, and that large areas of land were acquired in exchange for that commodity. At page 97 of his book we have the statement - -
Rum for the time supplied a real commercial want, and only the officers could fill it.
Those were the military officers -
They used their position as masters of the labour market without scruple to develop their own grants and to acquire others -
The reference is to grants of land by purchase -
The foundation of many large fortunes was laid by this monopoly of what are now suburban lands.
That was how the suburban lands of Sydney were acquired. If my memory serve me well it was in 1788 that the British Government sent out Governor Phillip, who in that year decreed that not one foot of land in this great continent should be sold. He said that the people should be settled on the land, but that they must be settled on residential leases. I join with Mr. Wise in regretting that he did not remain in Australia long enough to conduct the land policy as it should have been carried out. Unfortunately for Australia, he was recalled, and Major Grose,’ who was put in command, and administered the land laws, parcelled out lands throughout New South Wales in free gift to his officers and his friends. Governor Macquarie continued on the same lines, and Mr. Wise says -
Whereas the whole of the grants by his predecessors only totalled 177,500 acres, he granted 400,000 acres.
Then we find that the A. and A. Co. and the Van Diemen’s Land Company were formed under private Acts of Parliament to acquire* the one. 1,000,000 acres of land around Newcastle and on the Liverpool Plains, and the other, 500,000 acres in the north-west corner of Tasmania. A return obtained by Gipps in 1845 showed that four squatters in New South Wales then held an area of 7,750,460 acres, and that the fifty-six largest holders occupied no less than .12, i io square miles, as against 677 square miles occupied by the fifty-six smallest holders. 1 was much amused this afternoon by the statement of the honorable member for Perth that there was no land monopoly in Western Australia. The honorable member said that there had never been a land monopoly there; that people could get land for the asking in that State, and that there was plenty of land waiting for intending settlers. ‘What does Mr. Wise say? -
Free grants of immense areas were given to the founders on the understanding that they would introduce immigrants at their own expense. Captain Stirling, the first administrator, was given 100,000 acres, and Mr. Peel, the leading spirit in the enterprise, 250,000 acres, in return for which he undertook to bring out 400 settlers.
Mr. Wise does not say whether this gentleman brought them out. Other immigrants followed, and their women had to fish off the beach, like the coloured people, because they could not obtain foodstuffs. Mr. Wise also tells us that settlers were so far apart that they often lost each other. And this in a country in which, according to the honorable member for Perth, there has been no land monopoly. I should like to know whether the Government of Western Australia, in acquiring land, have followed a practice that has been adopted in Victoria where rich land originally taken up at from 9s. to £1 per acre has recently been acquired by the Government at prices ranging from £9 to £12 per acre. I spend my week-ends in visiting various parts of Victoria, with the object of obtaining a knowledge of the land question in this State. Only the other day I visited Geelong, and was shown a large area of beautiful land which, until recently, was in the hands of one man. Some of that land for farming and orchard purposes has brought from £40 to £130 per acre. That was the information given to me, and I was also told that the Government had paid a huge sum to acquire certain land for closer settlement. The Government scheme was to settle people on areas of 8 acres each. I have been unable to ascertain the price paid for this land, but I do know that the State placed settlers on land at the summit of the driest hill in the district. Last Sunday there was blowing there a gale strong enough almost to take off one’s head. People are expected to make a living there, although on the alluvial flats below there is excellent land with a river frontage and in every way suited for closer settlement. Is that the policy that should be pursued in order to make our country productive? I think not. I also had given to me a description of a dairy as run by the Government, and was astounded to learn the results of closer settlement. From the hill to which I have just referred I obtained a fine view of country extending for a distance of many miles, and my guide informed me that thousands of acres there were owned by one or two individuals. Do we wish that state of affairs to continue? If we do, then we had better simply adhere to the old policy. I come now to the position of my own State, and I regret very much that the honorable member for Franklin is not present. The honorable member has declared that I know little of the land of Tasmania outside of Hobart. Let me say that I know
Tasmania as well as does any man in this House. I have had to battle right along the north-west and the west coasts. I surveyed the route of the first telephone line to Montague, and erected a telephone line there about twenty-two years ago. A stranger visiting the town of Burnie is at once struck by its resemblance to a crosscut saw. One sees a beautiful house and a vacant patch succeeded by another beautiful house and yet another vacant piece of land. The existence of these vacant plots is due to the fact that the whole of the land in the vicinity of Burnie has been monopolized for some time by the Van Diemen’s Land Company. Consequently, that flourishing town with an enormous area of good back country has not made the headway that it should have done. It has, certainly, developed considerably since the honorable member for Darwin was returned as its representative, and evidently the owners of large areas in that part of Tasmania are taking fright. I have heard it said in the House that they are about to amalgamate with other companies, and to cut up their lands for closer settlement. I feel confident that this is so, because I understand that the Minister of Home Affairs was recently negotiating for some land in the vicinity, and when he negotiates for the purchase of land we may be sure that there is something coming out of it later on. He must have “ got into the know “ very early. There can be no doubt that that land is well suited for settlement. A few months ago 1 was shown a bush block upon which an axe had hardly been put, except in splitting timber, and which in the open market, under the hammer, brought £18 an acre. The owner has to scrub it at a cost of 10s. an acre, and wait for about eight months before it can be burnt off. If he gets a good burn-off, there is not much picking up to do; but, otherwise, he has to spend money and time in picking up the small timber and laying down grass. In fact, twelve months is gone before there is any return from fattening cattle.
– Where is that?
– It is adjoining the place of Mr. Robert Laird, about 3 miles from Burnie j and it was there that I was for two years learning farming. Quoting from memory, from the Daily Post, of Hobart, 1 can say that a Mr. Carroll went on to the Company’s land many years ago, and for 100 acres of land he paid over £6,000 in rent; yet to-day he does not own a farm. He is still a tenant; and if he could not pay the rent, he would be turned off to-morrow. His rent has been raised, and the Company wished him to dig a well at his own expense. Further up, at White Hills, in the district of the honorable member for Wilmot - where that gentleman told the settlers what he was going to do tor them in the Federal Parliament - some of the farmers have been on the estate for about forty years as tenants ; and the other day they g9t notice to quit. They have made the farms what they are to-day, and have become attached to their homes; but they are now placed in the same position as tenants in Ireland, or in Scotland, under the Duke of Sutherland, liable to eviction. Indeed, they were to be evicted, but the Labour newspaper, the Daily Post, took up the case, with the result that some of the tenants have been told that they may remain for the term of their natural lives. From what I have been told, I understand that the landlords gave the land for the railway to pass over, with the result that the rents were raised 2s. and 3s., showing that it is the owner that scores every time from the unearned increment.
– Does the honorable member not know that that part of the country is very closely settled?
– Most decidedly I do; and I am glad the honorable member reminds me of the fact., There is a system of taxation in Tasmania under which, immediately land becomes closely settled, and improvements are made, the farmers are taxed for their energy. ‘ If a farmer puts up a fence, or erects a better house to live in, the improvements are taxed. Although a man may have paid £1 an acre for land, and cleared it at a cost of £8 an acre, immediately he plants an orchard, and before the trees can bear, he is taxed on an assessment of, perhaps, £100 an acre.
– Is it the Government that does that?
– It is the Fusion Government in Tasmania that does it.
– What Fusion Government imposed that tax? It has been the system for years.
– The tax is imposed by the Government of the party that has been in power all these years. Many years ago there came from England a ship-load of farmers, who went on to land owned by Mr. John Williams; and that gentleman simply sat back and collected, increasing the rents to their highest economic value. The tenants made the farms valuable, and remained on them until Mr. Williams died. Then it was found that, according to his will, the lands were to be sold; and I have yet to learn that one of the original tenants was able to buy a farm. In the districts of Norfolk Creek and in another district, we find an absentee landlord who sent along his steward to raise the rent when he thought fit, with ,the result that the tenants there live in very poor dwellings, and make few or no improvements, for the simple reason that to do so only means an increase of their indebtedness to the landlord. This is in Tasmania, where I have had to slave as hard as any man, because of high rents and landlordism. It is a mistake for any country to raise the value of land above the true economic value, because, rest assured, a crisis must come sooner or later. If we can bring the land down to the true economic value, and make it possible for farmers’ sons to secure farms easily, we are doing something to justify our being sent here at the last election. A few Sundays ago, I visited Seymour, in Victoria, and there met the sturdy son of a farmer who was not a bit afraid of the Labour party, although he was one of the “ pigeons “ whom the honorable member for Ballarat says we are going to “ pluck.” In my opinion, the “ pigeon “ has been “plucked “ long enough, and we are going to stop the “ plucking.” He has very little feathers now; but -we are going to leave him the few he has ; and, in my opinion, the quotation of the honorable member was not at all apt. This gentleman pointed out to me a place where a family had lived on a small farm for some considerable time. There was the farmer and his seven sons all around him; but, when the lease expired, tenders were called, and the farmer, not being the higher tenderer, was obliged to leave the district with his family; and they are now apart, scattered over Australia. Is that sort of thing good for Victoria, or any other country ? The occupation of land by the squatter does not give the greatest value to a country. That country is the wealthiest that has the greatest number of happy and healthy individuals in it.
– The Government would have done the same as was done at Seymour.
– Decidedly not. If the Government owned the property they would do as is done by the municipality in Bendigo. I am told that that municipality owns land which yields a rental of about £5,000 a year, or 3d. in the pound for every elector in the municipality. I was shown a splendid hotel, for which a rental of £8 a week is paid, and a. whole row of shops occupied by tenants of the municipality, who are not rack-rented, and none of whom have given up their tenancies for a number of years. Is it to the advantage of the Government to send people out of the country? We are spending large sums in immigration ; and, in return, we see great headings in the newspapers :” Immigration to Australia,” over articles which announce that fourteen people have arrived in Victoria by one ship ! Under the system favoured by the Labour party, we shall have immigrants teeming in by thousands. We are going to get control of the land and of the money volume; and when immigrants arrive, they will be placed on the land and given advances at 4 per cent., in order-
– Order ! The honorable member must confine himself to the question.
– I do not wish to diverge, but the subjects are very closely connected. I realize that if, by some terrible means, we could to-night demolish every building in this beautiful city, we could, if labour were procurable, in two years have a city even more beautiful; whereas, if all the farms and the people on them were wiped out, the grass would grow in Bourke-street in six months. All the wealth comes from the land ; and if the people cannot get on the land, they cannot produce wealth. I am glad that there are farmers in the galleries to-night, to see how the benches opposite are crowded by the Opposition, who, we are told “ keep a House.” The other day I invited a friend to hear the debate on this Bill, and to show him how we are misrepresented in the newspapers. On that occasion, although the Attorney-General was speaking, there was one member on the Opposition benches, and, as the speech went on, others came gently in until there were four or five. That is the Opposition which, we are. told, has to “ keep a House.”
– The honorable member must confine himself to the question before the Chair.
– Take care that there is a quorum to-morrow !
– I am not afraid.
– Look at the attendance to-day; there was not a Minister in the chamber at one time this afternoon.
– Oh, yes, there was.
– We are anxious that this country should be populated, not only to produce wealth, but for the purposes of defence, because we cannot hold Australia unless we defend it. What was the excuse for taking the lands from the unfortunate natives, whom God had placed here, and deporting them to Flinders Island, where, according to Fenton, the historian of the island State, they used to sit and look longingly towards their native land ? The excuse was simply that they were not making the best use of the land; and, on the same principle, if we do not make the best use of it, we have no right to hold it. For those reasons I am anxious to see the lands made available within easy distance of railways, so that farmers’ sons may marry and populate the country, and become wealth producers. Only recently a young man in Tasmania took the risk of getting married ; and what was said by his thrifty wife - that “ thrifty wife “ of whom we hear so much from the honorable member for Parkes. She said, “ You take 3 trip to Melbourne, John, to celebrate your honeymoon, and I will stay at home, so that we may be able to pay the rent.” We do not want young married people to have to do that sort of thing. We want to make it possible for young men to settle on their, own lands in their own little homes. I know of nothing more depressing than to see a man having to leave his wife and children to seek work elsewhere; and I have seen many of those cases. Men have to do that because the land is locked up all round them. The other day, I had the painful experience, when on a visit to Bendigo, of seeing strong men by the dozen applying, in answer to an advertisement, for leave to toil. Somebody has said -
See yonder poor, alaboured wight, so abject, mean and vile,
Who begs a brother of this earth to give him leave to toil.
And see his lordly fellow worm the poor petition spurn,
Unmindful that a weeping wife and helpless offspring mourn.
That applies to Australia at the present time; but we want to see it apply no longer. We do not want to see two men chasing the one sovereign. We want to see two sovereigns chasing the one man ; and under the full effects of this measure, I hope it will be brought about. That is sound, economic advice. We have heard much to-day about the money-lenders ; but what is the good of the money it you cannot got the men to use it, or if the men have not the land to put the money into in order to produce wealth? When Robinson Crusoe landed on his island, he did not take Spanish dollars ashore, but took wheat so that he could produce wealth. That is what we want to do in Australia. We want to make the lands available so that our young men may be settled on them, and be a valuable asset to the country. Where we put one man on the land, there will be two or three more in the town serving him. I wish to reply to the remarks which were made by the honorable member for Lang when he twitted us by introducing the question of Free Trade and Protection. I admit that it has nothing to do with this question; but the farmer is not served by getting his implements free. I remember, many years ago in Victoria, when the farmers combined with the Free Traders, and binders were put on the free list.
– Order !
– I regret that I rannot reply to the honorable member for Lang on that point. I feel sure that I would have done so effectively. I have been twitted with being a single-taxer; but I am not one, and I will tell the House why. A single-taxer would let interest go free, and is not interest part of the rent that he would confiscate? No person is right in advocating the single tax ; and that is what has put so many countries back. I should tax the land with a graduated tax, so that it would be impossible for any man to hold estates of a value of, say, £100,000. That is what I meant this afternoon when I said 1 would put a tax of 8d. in the £1 on men with£ 100, 000 estates and over, because an unimproved value of £100,000 is too much for any man to hold. I would tax an estate of that size so heavily that the owner would have to cut it up and make the best use of it.
– Those who have listened to the honorable member for Denison must express the hope that the millennium which he thinks is coming to this country, when there shall be all wealth and no poverty, and every man shall live peaceably with his neighbour, will speedily arrive. Any one who thought that this was a land tax Bill must have wondered when listening to the honorable member’s speech, because it was a land policy speech throughout, and directed altogether to improving the means of settling and occupying the lands of Australia. Under the Constitution to which we owe our existence as a Parliament, and which was given to us by the States of their own free will, and without duress, land control is not one of the powers handed over to us. It belonged to the States, and when they gave us our Constitution, they retained all their powers in this regard. I, therefore, take it that all the desires of the honorable member, and many others, with regard to the best way to control and administer the lands of the Commonwealth are not within our scope. The honorable member, with his enthusiasm on this question, should have endeavoured to enter the Tasmanian Parliament, where he would have had full power in regard to those matters which he, apparently, has so much at heart, and would have had no restriction placed upon him, not only in advocating, but in doing his best, to carry out the views that he appears to hold.
The one conclusion, at which those who have listened to this debate must have’ arrived, is that those who have spoken in that way think that this Parliament is much wiser and fai better able to subdivide, and generally settle, the lands, than are the members of the State Parliaments. I cannot see why we should arrogate to ourselves superior knowledge or ability in regard to a matter of which we have only a very scant knowledge, and of which the people of the States, through their representatives in the local Parliaments, have full knowledge.
– The local Parliaments have full knowledge; but they do not want to act.
-But why . should they be coerced by the honorable member? Are they not as intelligent, and as desirous of doing their best for the people of their own States? Are they not elected by the people of their States on the same franchise, and by the very same persons who elect us?
– No. Votes are given’ for gas pipes and tram lines in Victoria.
– For the Legislative Assembly?
– For the Legislative Coun- cil.
– I am’ not talking about the Legislative Council. The same people send members to the Legislative Assemblies of the several States to manage their local affairs, as send us here to exercise another set of powers, and discharge another set of duties under the Constitution which they freely gave us.
– The Legislative Assembly in Victoria passed a land tax, but the Upper House threw it out.
– I do not see much force in that statement. Perhaps they had very good reason for their action ; but I do not propose to discuss that matter or to be drawn into the local politics of any State. I am dealing with this question on its merits as a public question ; and not with the question of the franchise for the Legislative Council in the State of Victoria. My point is that we are arrogating to ourselves superior wisdom in regard to the management and control of land. Even if we had the power, we do not possess the knowledge and experience requisite to deal with this question to the extent to which they are possessed by those who are locally returned for a distinct part of the continent, and who are acquainted with it to a far greater degree than honorable members here are acquainted with the affairs of the whole continent.
– That is a matter of opinion.
– Does the honorable member mean to say that he has as much knowledge of the circumstances of, say, Western Australia as have the members of the local Parliament in that State? The honorable member really knows nothing about it, having visited it for perhaps only a day or two in his life. We certainly have not in this House equal knowledge of any State with the representatives of that State in the local Parliament. The electors who sent those ‘ persons to the local Legislative Assembly also sent us to this House; and the State members have far greater knowledge and have all the power in regard to land settlement and land control. In fact, they have all the powers with regard to the subdivision, settlement, and control of land, while we have none whatever.
One of the objections that I have to this- Bill, and my great objection to speeches such as we have had to listen to to-night, is that there is a total absence of any recognition of the powers of the States, and a desire to make us believe that this Parliament, under the Federal Constitution, has powers which it does not possess. One of the faults which
I have to find with honorable members opposite and their platform and policy is that ever since they have been in the Federal Parliament they have desired, in every way, to invade the legislative arena reserved under the Constitution to the States. That has been a great drawback, and has done an immense injury to Australia. This dissatisfaction with the powers given to us by the States, and the desire to take more powers, is exemplified by the speeches we have heard to-day, and yesterday also, and by the proposals that have been made by members of the same party throughout Australia. The attempt to usurp a power which has never been given to us by the States, is most unfair to the people, and unconstitutional into the bargain.
We have been told recently that the primary object of the Bill is to obtain revenue. Those in charge of the measure have become afraid that by harping upon the bursting up of large estates they may get into trouble. They dare not say in the Bill itself that its object is to bring about the subdivision of the lands of Australia. The Labour party told the country - and it has been said in this Chamber - that a measure would be introduced to bring about land subdivision ; but we were told last night by the Attorney-General that what is said about the Bill does not count, that it the intentions which prompted its introduction are not stated in it, they cannot be read into it. I do not know that I haveany right to speak about closer settlement, because the Constitution does not empower us to pass land legislation ; but as you. Mr. Speaker, have allowed others to discuss the subject during this debate, I should like to say a few words regarding it. It goeswithout saying that every one desires that the land shall carry as much population as possible. We desire that our lands shall be put to the best uses. If the object of the Bill is to burst up large estates, why is not that stated in its preamble? There is no statement to that effect in the measure, because it is known that this Parliament has no constitutional right to legislate for the subdivision of land. Honorablemembers opposite are trying to do by a sidewind what they cannot do directly. It isvery popular to advocate in cities and other crowded centres, the taxation of largeestates, because to do so appeals to the envy of those who do not own land, or own so little that they are exempt from taxation. But if the State is not: going to respect rights which have been lawfully acquired, it will strike at the foundation of our liberties. The only honest way in which it can obtain the land now owned by private individuals is by buying it. It might as well pick the pockets of the land-owners as compel them to part with their land by imposing taxation to lower its value. Legislation of this kind would be improper if those who now hold the land had obtained it for the traditional bottle of rum, and had been drawing large rentals from it ever since, though there would then be something to mitigate a feeling against the land-holding class. But, as a matter of fact, most of those who hold land have paid high prices for it. The profits from landed property are not nearly so great as some honorable members would have it appear. The man who buys for £50 a bank share nominally worth only £10 is getting a much smaller return from his investment than the bare statement of the dividend rate of the bank might lead one to think, and so it is with the landholder. Why should it be more unsafe to invest money in land than in any other security ? Hitherto land has been regarded as the safest investment, and a loan on the security of a mortgage has been considered the best protected advance that could be made. But the policy of the Labour party is to change this, and to make land the worst property that a man can have. The present dominant party in the Legislature looks with an envious eye upon the land-owners, notwithstanding the fact that they have lawfully acquired what they possess. I have even heard them called robbers. If a blow is struck at the foundation of the ownership of land, or of anything else, no good will result, either to the party which strikes it, or to the country. No doubt, those who are envious, of the large land-holders favour the proposed tax, and they are told, “ It will not affect you, because even if you hold land it will come within the £5,000 exemption.” Had the Labour party declared that there should be no exemption, but that the unimproved value of all land would be taxed, their proposal would not have received the ready acceptance which it has received. The reason for the exemption seems to be to get the votes of the smaller land-holders. I do not wish to make that statement offensively, but that seems the obvious purpose of the exemption.
– No ; it is to leave a margin for the States to tax.
– I am obliged to the honorable member for the interjection, though I am sure that he did no£ make that statement when addressing the farmers in his electorate, if there are any. To have done so would have been about as bad as to say that there would be no exemption. The honorable gentleman was, I believe, at one time a leader of the party in South Australia, and I may take it from, what he has said that the £5,000 exemption has been proposed with the object of leaving a £5,000 margin for the States to tax.
– No. The honorable member speaks only for himself.
– Then there is a division of opinion among the members of the party. I understand that its late Leader. Mr. J. C. Watson, stated in New South Wales on one occasion that by giving an exemption of .£5,000 a field for taxation would be left available to the States… Therefore, every unfortunate owner of land will be taxed.
– Mr. J. C. Watson never made the statement attributed to him.
– I made such a statement, but I do not think that Mr. J. C. Watson did.
– I hope that the honorable member told the electors of Hume that the small land-holders will be taxed by the State and the large land-holders by the Commonwealth.
– The State now taxes both.
– Then the Commonwealth is to impose an additional tax.) In the manifesto of the Labour party issued prior to the last election, it was clearly stated that the tax was to be im posed for the purpose of bursting up large estates, and the people throughout Australia were told that that was its object. Now we have it on the authority of the Treasurer that the tax has been introduced to raise revenue, and thai £1,000,000 a year will be obtained from it, although, according to other authorities, it will yield over £2,000,000 a year. There was no mention of that prior to the elec-; tions. The people were not told that this was to be a revenue tax, nor were they in-formed about the enormous yield which would . be obtained from it. It was no* until the party had won its successes at the polls that publicity was given to this ob:ject.
According to a memorandum circulated with the Bill introduced last year, and not since repudiated, the land tax proposals of the Government are -
To provide facilities . . . for a great and ever-increasing stream of suitable immigrants.
For the past twenty years the Labour party has been opposed to immigration. The State Governments have not been strong enough to provide suitably for immigration, because of the hostility of Labour members. It is refreshing, therefore, to “be told now that facilities are to be given for immigration. We were told, too, that it was proposed to impose - by means of a progressive land tax on unimproved values, with an exemption, except in the case of absentees, of £5,000 … a substantial check on the unproductive and speculative holding of large areas, and vastly increase the land available for settlement by our own people, and by the immigrants whom we wish to encourage, and whom we must have, if we are to develop our resources and maintain our position.
If we had the constitutional right to legislate to provide for closer settlement, the proposals of the Government might be viewed differently. But, in any case, I would ask how the taxing of land in towns and cities can increase settlement? This land is in almost every case being put to the best use, and cannot be taxed except for revenue purposes. In the memorandum to which I have referred there is no reference to revenue taxation. Apparently, since it was issued it has been thought dangerous to give too much prominence to the desire to bring about the subdivision of estates, and therefore to make the Bill constitutional it is being referred to as one to impose a tax for revenue purposes. In the Governor-General’s speech we had the following reference to this Bill -
A measure will be submitted to you to provide for a progressive tax upon the unimproved value of land, with an exemption of £5,000.
In view of the urgent necessity for encouraging an influx of suitable immigrants to the Commonwealth in order to more effectively develop its great resources and defend it against possible invasion, My Advisers intend to adopt a policy which it is confidently believed will, by making fertile land available, speedily induce very large numbers of people of the right kind to settle on the lands of the Commonwealth.
We have not yet heard what means are to be adopted to carry out that very desirable object. If Ministers intend to effect it by means of this Bill then they will do so only by invading the legislative arena which, under the Constitution, has been retained by the States. Only in a roundabout way can they obtain any influence or control which they are not permitted to obtain by direct legislation. I do not think it is honest or right for this Legislature to attempt by an indirect method to use the power of taxation in such a way as to invade the arena of legislative control reserved to the States. As every one knows, the control of’ land tenures and subdivisions is absolutely vested in the States, and this Land Tax Bill with its ulterior object seems to me to be as unfair and as ungenerous a proposition as can well be imagined. It is a case of biting the hand that gave us freely and generously our legislative existence.’ The States gave to us freely, without any coercion, all the powers that we possess as a Federal Parliament, yet for years the party now in office has been trying to invade the powers reserved under the Constitution to them.
– It was not the States, but the people who gave us the Constitution.
– The Legislatures of all the States accepted the Constitution Bill, and in every State a majority of the people voted for it. Do honorable members think that in speaking of the States I have in mind only the Parliaments, and not the people of the States ?
– We are thinking of the Forrest Government in Western Australia.
– And if the honorable member tells us what he has in his mind he will speak in complimentary terms of that Government. We are now saying to the States : “ You gave us this power of taxation for revenue purposes, and we intend to use it to destroy you by taking away from you the chief source of your revenue.”
In order to show that the proposal for a Federal land tax, with an exemption of £5,000, as first made at a Labour Conference, was not designed to raise revenue, I would point out that at the Brisbane Conference on 7th July, 1908, a Mr. Grant, quoting Mr. J. C. Watson, the late Leader of the Federal Labour party, said -
A progressive land tax was not for revenue but for the bursting up of large estates.
That is clear enough. Mr. Holman, M.L.A., of New South Wales, speaking at the Brisbane Conference, also said -
The tax was not really a revenue-producing one, and whatever revenue was derived therefrom would be incidental to the accomplishment of its primary object - the breaking up of the big estates.
Then again, Mr. Mahon, the honorable member for Coolgardie, said -
He would like to make it clear that it was not the intention of the Federal Labour party to impose a second tax where the State land tax held good or vice versd.
These are the sort of statements that are made all over the country, and more especially at election time, by members of the Labour party. When we come to the House, however, we have submitted to us a . Bill in which the object of the tax is not stated.
– But it will burst up the big estates.
– The Government are afraid to set forth in the Bill itself that that is its object, because they know that if expressly declared to be framed with that purpose in view, it might be held to be in excess of our constitutional powers. So far as I am aware no member of the Labour party has ever referred to the double taxation of land. Members of it have spoken of land taxation, but when asked, as they were in Western Australia, “Do you mean a double tax?” they have always replied that in their opinion some means would be devised to avoid double taxation. Let us consider for a moment what would be the effect of this tax. In Western Australia - and the position will be the same in almost every other State - we shall have with the passing of this Bill, a municipal tax or a shire tax, a State land tax, and a Federal tax, or, in other words, three taxes in respect of the same land. Is that likely to encourage the occupation and settlement of land? When listening to the honorable member for Denison, I could not help thinking that he seemed to imagine that all Australia exists somewhere in the north-west coast of Tasmania, where he took part in the erection of a telephone line. He evidently forgets that Australia is a vast continent with a coast-line of 8,000 miles, along which there is only a narrow fringe of settlement. For the most part our thickly-populated districts are to be found only within a few miles of the coast, but in a portion of the interior there are immense areas which can be made available for settlement. I do not say that it is all good, for I know that it is not; but we have there vast areas of land which the honorable member for Denison and many others have never seen. They have no knowledge of that land, and they must not think that, because a few million acres have been sold by the State Governments, there is no more room for settlement. In Western Australia at the present time there is room for a million settlers.
– More than that.
– There is, for instance, the great south-west corner, extending from Cape Leeuwin to Albany, which is practically terra incognita. Only a railway line is needed to open up that big stretch of country. All over Western Australia enormous areas are open for settlement, and a block of 160 acres will be given to any one who chooses to reside upon, and improve it. Why then do honorable members talk of there being a great paucity of land: There seems to be on the part of honorable members opposite an idea thai because a man with a family has lived in a certain district for some time, land adjoining his own should be reserved for the use of his youngsters, so that when they grow up they may have a block of ground alongside the paternal cot. Such an idea is absurd. That is not the principle on which our nation has been built up. I invite honorable members to think of the thousands of men who left their homes in the Old Land to seek their fortunes in this country. They did not wish- to live for all time alongside the old people; they desired to strike out for themselves, to found new homes in another part of the world, and to carry with them the British flag and British principles. It is that spirit of enterprise which has made our nation, rather than a desire to stay at home, say on the north-west coast of Tasmania, or anywhere else, and to have a 5-acre block reserved for each of one’s youngsters until they are old enough to occupy them. Such a spirit is not going to make a great country. Whai we need is enterprise. I have no wish to see the young people settling round the old man’s home. I wish to see them set out and found new homes for themselves, away from- the paternal cot. Our young people will be better men for it, and do better service for themselves. It is ridiculous for a man to complain because he cannot obtain a piece of land alongside his old home. I describe that as “ a stick in the mud “ policy.
– People were driven out of England for want of land.
– And it was a good thing for many of them. If the honorable member is one of those who were driven out, he has thrived well, for he is here in affluence and faring sumptuously.
He should thank his lucky stars that the fates drove him from the Old Country, not only to do well in Australia, but to take part in the Parliament of the country in framing its legislation.
We are on delicate ground when we attempt to impose taxation with an ulterior object. As the honorable member for Ballarat said the other night, if the power of taxation can be used to control land occupation and land settlement in the States, it can be used foi any other purpose with the object of encroaching on the powers of the States. We have been told over and over again that the object of this Bill is not revenue, but the bursting up of large estates and land settlement; and if these can be brought about by indirect means, I do not know where the Constitution is, so far as the integrity of the States is concerned. It is the old story of the husbandman and the viper over again. Honorable members will remember the fable of a husbandman who went out to till the soil in the early morning, and saw a viper benumbed by the cold, and in pity put it in his bosom ; and when the warmth of his body had restored the creature, it turned on him and inflicted a mortal wound. That is what the Labour party are trying to do - to inflict a mortal wound on those who gave us the Constitution. That is the way the States are being rewarded by honorable members opposite for the Constitution and Parliament which they so generously gave us. It is intended little by little to destroy the States, and, right or wrong, to attain by devious steps what cannot be attained directly. Let mp read what Mr. Phelps, a Minister of the United States, said in the Nineteenth Century of February, 1888, in regard to the relations between the Commonwealth and the States in America. His words are as applicable to us as to the United States -
The cardinal idea upon which the Constitution is founded is that every State retains its full sovereignty except so far as by the express terms of the Constitution or bv necessary implication certain powers are relinquished bv the States or conferred upon the Federal Government. In determining, therefore, in which jurisdiction any governmental power resides, the inquiry is, whether it has been parted with bv the States, under the provisions of the Constitution, and if so, whether it has been granted to the national Government.
If we follow the opinion of Mr. Phelps we shall be all right. We have to determine in what jurisdiction any governmental power resides ; and I have not heard any one who pretends to be an authority say that the control, disposition, management, subdivision, and settlement of the land belong to the Federal Legislature. We have to ask ourselves whether this was a power parted with by the States under the provisions of the Constitution, and, if so, was it’ granted to the Commonwealth? To this there can be only one answer - No, it was not.
I do not intend to refer to the question of the validity of the Bill, which will have to be decided hereafter; what concerns me is the state of mind and thought of a great party in this country who will allow their conscience to be so warped as to allow them to be led into devious paths, as must be apparent to every one who has fairly and honestly considered this matter. The object’ in view is no doubt thought to advance the political interests of that party, and, as I have said in this House before, and proved up to the hilt, the end is deemed to justify the means. There is no doubt that all the risks in the Bill are taken in the attempt to invade the arena of the States on that principle. On the 6th July last, in some remarks I made on the Address-in-Reply, I gave my views in regard to land legislation. I then expressed the opinion that the States retain all power in regard to land management and control; that they have never parted with that power, and that it consequently does not belong to the Commonwealth ; that this Parliament has no power to legislate in regard to the way lands shall be held and used; and that” if we cannot legislate directly, we should not seek to invade the arena reserved to the States, by endeavouring indirectly to attain the same object. I am sorry the Attorney-General is not present, because, when I was speaking on that occasion, the honorable gentleman said there was nothing in the Constitution which allowed protection through the Customs. For the moment I did not answer, as it seemed to me an important statement coming from the Attorney-General. He said that under the Constitution we imposed Customs duties, but that it did riot say anything about the effect that they were to have, whether protective or otherwise. Both he and honorable members opposite seem to think, that was an all-sufficient answer; and it was cheered by the docile majority. They thought they had scored a point, and, as I did not reply, they probably went home convinced that they had put a good poser to me. But the cases are not at all analogous, as I will show. The sole and exclusive control of the Customs and Excise is in the Federal Parliament - there is no joint control. Before Federation the States had sovereign powers to impose duties of Customs and Excise for any “purpose and object whatsoever. The whole of the powers- in this regard which they then possessed unabated, the States handed over to the Commonwealth, and that, therefore, gives this Parliament all the powers the States had in regard to Customs and Excise, without any diminution as will be seen in section 90 of the Constitution. In the case of land legislation, the States gave to the Commonwealth no powers.
– The honorable member does not say that this Parliament cannot impose a land tax?
– I am not dealing with land taxation, but land control.
– This is a Land Tax Bill.
– If so, we have heard very little about land taxation and a great deal about land control.
– The Bill does not propose to control the lands.
– Yes; because under certain circumstances it proposes to give possession on forfeiture ; and, if I can judge from the honorable member’s “face, he does not agree with that. Land legislation is not in the same category as legislation in regard to Customs and Excise, seeing that the States never parted with their powers in regard to the land. Nevertheless, we have this attempt to take the control out of the hands .of the States; and honorable members opposite say that this is acting fairly. They pose before the country as a party with honorable ideals, and as supporters of the Constitution, having a desire to work harmoniously with the States, and to respect all the powers reserved to them. The Government say, in effect, that they know they have no power to legislate in regard to the sale, control, or settlement of the lands, and that they do not own any land. They admit that they cannot do anything in a straightforward and direct way in regard to land settlement, but, as the States under the Constitution have given the Commonwealth a general power of taxation for revenue purposes, they intend to use that power to invade a power which was never parted with by the States, and which still belongs to them. In short, it is proposed, in effect, to do by a round-about process what honorable members opposite know they cannot do straightforwardly and directly.
I have no desire to put this matter too strongly, but merely to state my views in the most definite form. As a reason for the present policy, we have been told over and over again that the States have neglected their 1 duties and their opportunities, and that the Government are forced to take their present steps. It is admitted that the Government have no legislative control over the lands of the States, but they declare that they intend to try, with the power they have, to do> what they think the States ought to havedone. Why should we be judges of what’ is their duty? They are certainly not judges of what is ours, and we have no right to say to them, as representative men, what theirs is. Let me take the case of Western Australia first. There are in this House two representatives of” that State in favour of this Bill, and three against it.
– And in the Senate there are six for it, and none against it.
– I am dealing with this House, and not with the Senate. Are those two members in this House more competent to deal with this question than the fifty members in the Legislative Assembly of Western Australia, elected by the same people to look specially after their local interests? Have they the same knowledge in regard to the lands of Western Australia as the members of thelocal Assembly,- who have sole power and authority under the Constitution, to deal with the sale, occupation, development,, and settlement of land? While I have a great regard personally for my two honorable friends, I do not think they would say that they have as great a knowledge of what is best for Western Australia in regard to land administration ashave the fifty local members.
– But the right honorable member might say that the . fifty local members cannot get their views through another House.
– Is that so? I can only remember one case where for a year a Land Tax Bill was delayed in the Upper House. It was passed in the next session.
– And very seriously mutilated during the passage.
– I do not think’ it was. Even if that is so, are we the judges of those who represent the people of Western Australia in their local Legislature on a matter in which they have sovereign power?Still dealing with the House of Representatives and the Legislative Assemblies of the States, and not with the Upper Houses or the Senate, let us look at the other States. There are nineteen members of the Labour party in this House from New South Wales, including the honorable member for Hume. [ cannot separate him from them, so I put him in to swell the number. There are on the other hand, ninety members in the Legislative Assembly of New South Wales, and surely those ninety are more capable through knowledge and association of dealing with the lands of the State than are the nineteen members in this House ?
– There are sixty-five fossils in the Legislative Council to prevent them.
– I am not dealing with the Legislative Councils. Jn Victoria there are, including the honorable member for Gippsland, twelve members in this House sitting opposite, and there are sixty-five members in the Victorian Legislative Assembly.
– Unfortunately, we are afflicted with a Legislative Council also.
– But it is an elective body, at any rate. Do honorable members contend that those twelve know as much about the lands of Victoria as do the sixty-five members of the local Assembly? There are four members from Queensland on the other side, leaving out yourself, Mr. Speaker, and there are seventy-two in the local House of Assembly. From South Australia there are only four in the Labour party in this House as against forty-two members in the Legislaive Assembly in Adelaide. There are three Tasmanian representatives on the other side in this House, including the honorable member for Denison, who hopes for the millennium next year, as against thirty members of the Lower House there. Does the honorable member for Denison think that, having travelled along ihe north coast erecting telephone wires, he is in a better position with his two colleagues to deal with the question of the occupation and settlement of Tasmanian lands than are the members of the local Assembly at Hobart?
– Does the right honorable member suppose that those Parliaments are going to last very much longer ?
– I hope so.
– I do not.
– The honorable member wants to reward them for giving him this Constitution, by taking away all their powers and destroying them. There are altogether forty-four members of the Labour- party sitting opposite in this House in favour of this Bill, and they consider themselves better judges of what is necessary for the people of Australia than the 349 members sitting in the Legislative Assemblies of the States, and elected by the same electors. I look upon it as a piece of arrogance for members of the Labour party to come to this House under a Constitution which gives them no power over the management of the lands of Australia to dictate to and think they know better than the Legislatures of the six States. They have, in nearly every case, closer and more personal knowledge of the requirements of the States, while they represent the very same people who sent honorable members to this House.
– The right honorable member would put the Commonwealth under the heel of the States.
– If the honorable member had been here he would have heard me quote the wise words of Mr. E. J. Phelps, the United States Minister, that each has to represent and maintain its own position under the Constitution, and that the only way to get along is for the States to respect the Commonwealth, and the Commonwealth to respect the powers of the States.
– But the Commonwealth had better respect itself first.
– It can do so underwits own powers. It will not raise itselfin public estimation by trying to do indirectly what it cannot do directly.
I wish to refer to some of the very drastic and ridiculously unfair provisions in the Bill. The definition of absentee, for instance is quite absurd. If one happened to be out of Australia on the day the Bill came into force, and returned the following week, he would have to go to a lot of trouble to prove that he had not left Australia. That definition should be altered in Committee.
There is also the extra taxation of companies doing business here and none elsewhere, but having their head-quarters in London for the purpose, as the honorable member for Fawkner pointed out, of getting the money necessary to run their concerns at a cheaper rate. That provision will cover mining, banking, land, and insurance companies, and will make them all absentees under the Act, notwithstanding that in many cases most of the shareholders live here. Another most unfair and unusual provision concerning which I :im surprised at the action of the Government, is the attempt to dive into the pocket of the unfortunate land-owner sooner than is fair or reasonable, by making the Bill retrospective. It might have been expected that the Bill would begin to operate when it passed the Legislature, or on the 1st January, 191 1 ; but the Treasurer has got used to making laws retrospective. He made a previous Bill retrospective, and I suppose he thinks he can do the same with this, but he will search a long way before he finds a taxation measure taking effect prior to the date when it was introduced. I hope that blot upon the Bill will also be removed. Another most unfair provision is that by which all the properties held by one firm or person throughout Australia are aggregated. A bank, for instance, has property in all the capital cities and principal towns of Australia, but these are to be dealt with as a whole, in order to obtain more from them, by making only the one exemption of £5,000 apply to them instead of an exemption for every State. That applies also to other properties. It is not dealing fairly or generously with public institutions, which, although they may be carried on for the private gain of shareholders, are still doing a great deal of useful work, and supplying a great want to the whole community. They should be treated honestly and generously, instead of their properties being amalgamated, so as to prevent them getting the benefit of the £5,000 exemption in each State. It is not worthy of the Government, and I am surprised to find them lending themselves to such legislation. Then, again, they induce the owner to overvalue his property from the fear, not only of being fined a ridiculous amount, but also of having the property forfeited. It is all very well to say that this provision will not have the effect I indicate, but we do not want to trust any one’s generosity or kindness. We ought to know where we are. We do not want to be penalized, or to have to over-value our property. Where there are municipal or State valuations it is easy enough to take them, but to say that an owner has to value his property, and that if he values it at less than other people think it is worth, he is liable to have it forfeited, or to be otherwise penalized, is not British fair play. Cannot the Department value the properties themselves where there is no municipal or State valuation? It was done in a very fair way in Western Australia.. The Department let the owner take the value from the municipal or shire council rolls, and pay the tax accordingly. They then took time during the year to revise the amounts, and where a man under-valued they made a claim on him, and he had to pay it, or appeal.
– The honorable member knows that all the shire lands are grossly undervalued.
– That was provided for in the Western Australian system in the way I have described. All this drastic legislation seems to infer that people who own property are dishonest. It seems to me to indicate that in the opinion of honorable members opposite persons who have property have no right to possess it, and that they wish to make it as difficult as possible for land-holders to retain their estates. I have no hesitation in saying that the whole of the previsions regarding penalties to be inflicted . for mistakes, and under valuations, anc: other matters connected therewith, are harsh and confiscatory. Yet those vindictive provisions are in the forefront of this measure.
I cannot understand the meaning of this crusade against land-owners. Is it prompted by envy? Is it due to the fact that some people have been more successful in the battle of life than have others? Listening to honorable members opposite, I should say that envy is at the bottom of this movement. But it will never be possible to bring about equality of mankind. Burke rightly called the idea of equality “a monstrous fiction.” There will always, I fear, be people occupying different stations in the world. It has been so from the beginning, and I expect that it will continue to be so to the end - unless the millennium, for which we hope, be attained. I cannot understand why those people who by their energy and enterprise - in many cases by their self-denial - have made a competence for themselves, should be singled out for almost vindictive attack. This is the worst advertisement Australia has ever had. What will be the effect when it is known that the Parliament of this country is making a crusade against those who own property? I have no sympathy whatever with persons who possess land and do not use it. In Western Australia .1. introduced laws for dealing with the evil of land aggregation and putting it to sufficient use. But I do not believe in confiscation and in taking away from a man that which he has lawfully obtained. In a new country like this every inducement should be given to people to take up land. That is what we want. Certainly during the last few years prices have been high and the use of fertilizers has made the land much more profitable than it was hitherto. My honorable friend, the Postmaster-General, knows that foc many a long year the lands in the northern part of South Australia, where people arcdoing well now, were occupied by those who were nearly always in serious trouble. Those were bad times, when prices wei’ low and droughts were common.
When I was Premier of Western Australia I did my best to induce people to settle our lands.- We gave settlers land and lent them money to develop it; but the progress was slow. But now a change has come, and occupation is more profitable. This land tax will discourage settlement. Yet we are sending lecturers throughout the world who are drawing pictures of the vast virgin areas of Australia, and endeavouring to induce people to come to our shores. They are told that we have 3,000,000 or 4,000,000 of square miles of country, for the most part unalienated from the Crown. Many of these stories that are told about Australia are probably exaggerated. But still it must be recognised that there is immense scope for settlement. Great things will undoubtedly have to be done before the interior of Australia is settled. There are immense areas on Cooper’s Creek and the Barcoo,, which will have to be brought under cultivation in the future by irrigation. The honorable member for Denison has told us that he knows of land near Burnie which has been settled for a hundred years, but which is not fully utilized. He supports this Bill because these small plots are not easily available for himself and his friends; but let him do as the early pioneers did. Let them go out to Cooper’s Creek, for example, and fight their way as the earlier settlers in Australia had to do, and not sit down at Burnie and expect the strawberries and apples to fall into their mouths. As showing that I have no sympathy with land being held and not used, I invite honorable members to search the land laws of Western Australia. While J was Commissioner of Lands there, in 1887. 1 was instrumental in passing laws which are in operation to this day, and which prevented any one from taking up more than from 1,000 to 2,000 acres. No large estates are provided for in those laws.
– How did the right honorable member break up the big estates ?
– There were no big estates to break up. I am talking Of the new lands that were opened for settlement under the land laws passed while > was Commissioner. We purchased land along the railway, and we settled hundreds of families in places where previously the land had only been used for pastoral pulposes. I mention this to show that I am in sympathy with the object in view, but 1 do not believe in attaining our object by methods which are not only unconstitutional, but also dishonest in principle.
– We cannot do what is proposed if it is unconstitutional.
– What is now proposed amounts to a breach of good faith if it be not legally wrong. The States entered into this compact as friends. But what are we trying to do now ? We are trying to invade the legislative arena that belongs exclusively to them. The Postmaster-General knows that as well as I do. I would not say a word against ,his proposal if it were necessary to tax land for revenue purposes. But we have continually heard it asserted that the object is to burst up the big estates. I heard the honorable member for Denison say that that was the object. It is of no use to adopt a make-believe attitude. I believe in a proper use of the land, but I do not believe in doing a wrong and defrauding any one. I do not subscribe to the principle that the end justifies the means. I would not do that which is wrong to the States, even in order to carry out a scheme for more closely settling the lands of this country. If it were necessary to burst up the big estates I would go to the people and say, ‘’ We want more power with regard to land legislation,”’ and I would use that power if the people liked to give it. But I would not attain my object by doing indirectly what we have no power to do directly. The States are as anxious as we are that there shall be closer settlement. But what is the use of talking about a land tax inducing closer settlement in Western Australia, where excellent freehold land can be purchased privately for £2 or £3 an acre, and Crown lands can be obtained at 10s. an acre, payable in twenty annual instalments? Along the railways now about to be constructed there are millions of acres of land which are not even surveyed. The Government are unable to get sufficient surveyors to do the work. They have advertised for fifty or sixty more surveyors although they already have about a hundred engaged. Therefore to talk about closer settlement in Western Australia being brought about by this land tax is merely to talk for the purpose of making political capital.
Were I a member of a State Parliament, I would legislate, if necessary, for the compulsory purchase of land, where owners would not subdivide, and insist on compulsory improvements should freehold lands be held and not utilized, a proposition I once made in Western Australia, where J brought in a Bill for that purpose, the fines for non-compliance with its provisions to be used for the making of roads and railways, the providing of water supplies, and the general development of the country. I have not heard it stated by honorable members opposite what area they think a family should hold. The Bill exempts all land of a less value than £5,000 ; but less than 100 acres in Warrnambool might be more valuable than over 10,000 acres in some other place. If the object of the Bill is, as has been urged by the honorable member for Denison, to provide for closer settlement, why tax the town lands, whose owners already contribute to the cost of municipal and State government? I read in the newspaper the other day that it is now proposed - and probably the cry will be taken up,’ as many of these cries are - that rents should be determined by arbitration tribunals. Apparently, honorable members opposite think that the way to cheapen rents in towns is to tax the land, not once or twice, but three times. The honorable member for Corangamite, speaking on the Address-in-Reply, said -
We have turned down a page of our history regarding much of which we need say very little, because it is best forgotten.
That is all a new member, speaking for the first time in this august assembly, had to say of the work of those who have gone before. Is that gratitude? It would not seem to be. The honorable member appears to have no regard for those who bore the burden and heat of the day, and by their energy and ability made Australia what it is. If those who came here in the early days, and have spent their lives here, need a monument to their energy, determination, and enterprise, it is to be found in the development of the country. The railways, roads, and other public works of Australia are a reply to ungenerous remarks such as that which I have quoted.
Where is the necessity for this drastic legislation? Are the people of Australia down-trodden ?
– They take good care not to be.
– The honorable member does not seem to be down-trodden, nor do his fellow members. Many in this House have at one time or another been hewers of wood and drawers of water. Nearly every honorable member, to some extent, has been the architect of his own fortune. I heard a member of this House, a few weeks ago, say that he left his pick and shovel to enter Parliament. What stronger evidence could there be of the opportunities which are open to those who are careful, energetic, and enterprising? Like the soldiers of the great Napoleon, every one of whom, he said, carried in his knapsack a marshal’s baton, every member of this community can- rise to a position ofinfluence and affluence. In every part of the House are men who have made their own way in the world. Then, what is the reason for this pessimistic and drastic legislation? Have the people not done well iri this new country?
– Hear, hear I
– No one could have done better than the honorable member, who has already attained one of the highest places. In his wildest’ flights of imagination a few years/ ago, he did not dream that he would ever attain the position which he now occupies. But other members of the House have the like possibilities. What is the position of the State of Victoria, iri whose capital this Parliament assembles? The public debt of the State is only £55,000,000, or £42 per head of popular tion, which is the lowest indebtedness per” head of population in Australia. In the financial year ending 30th June, 1909, the State paid in interest , £1,963,240, and the earnings from the public works on which the borrowed money was spent returned £1,932,111, leaving a deficit of only £31,129. Of the amount borrowed, £40,694,000 was spent on railways, which returned over 4 per cent, on the capital invested. Yet complaints are made of the inefficiency of the State Governments. Notwithstanding the fact that the whole of the public debt of the State of Victoria was not spent on reproductive works, practically the whole interest bill is covered by the return from such works.
The value of the production of Australia was estimated at , £165,000,000 for 1908, or , £39 per head of population. This production was made up as follows : - Agriculture, £37,000,000; pastoral, £48,000,000; dairying, £15,000,000; forestry and mining, , £29,000,00; manufactures, £36,000,000 ; which makes the total I have stated.
This shows that the pastoral industry produces annually about the same value as the agricultural nnd dairying industry ; and yet no honourable member opposite has a kind word to say for those engaged in it. The production in Australia is far greater per head than in any other part of the world, and proves that the persons engaged in production from land are doing more in Australia than are the same number in any other country.
These facts furnish a good reason for not embarking on schemes to disturb the prosperity, of the country, and for not increasing the burdens of a section of the community. We should not attempt to reduce the value of property. To reduce the value of a man’s property by taxation is as bad as it would be to defraud him of the money at his credit in a bank. We were told by the Attorney - General that land monopoly is greater in Australia than in any other part of the world. I have not looked into the matter ; but I am not sure that the statement was an accurate one.
– I said, in relation to the population, and the area of the country.
– Does the honorable member think that that is a fair way in which to look at it? He forgets that there is, in the centre of Australia, an area of hundreds of thousands of square miles in extent without a river system.
I say that Australia is the most prosperous country in the world. Wages are higher here than in any other country, conditions are better, and the prospects for the future are better.
Honorable Members. - Hear, hear !
– I did not mean that in the way in which honorable members opposite seem to take it. I think the prospects have been very good so far for most honorable members, and they will be very good indeed if they are better in the future. Honorable members opposite have done very well, and are on a very good wicket. When I said that the prospects for the future are better, I meant the prospects for a beginner to improve his condition and secure a competency.
My object in mentioning these things is that I may say that I am at a loss to understand why, in view of the prosperity throughout Australia, and the fact that so many in this House have done so well, there should be this envy of other people’s goods, and this desire to punish those who have been more successful in life than they have been. They behold the mote that is in their brother’s eye, but perceive not the beam that is in their own eye. The numbers in this House are against us - worse luck for the country. The «last words I have to say on the subject are that I enter my protest against this Bill on the ground that it is an abuse of Federal powers, and that in its operation it will be confiscatory, inequitable, and unjust.
Debate (on motion by Sir John Quick) adjourned.
Bill returned from the Senate without amendment.
– Imove -
That the House do now adjourn.
We shall take the same business tomorrow ; but I should like to say that there is a general understanding that, up to 4 o’clock, no attempt will be made to interrupt our proceedings, in order that, if some honorable members desire to do so, they may visit the Royal Agricultural Society’s Show.
Question resolved in the affirmative.
House adjourned at 10.40 p.m.
Cite as: Australia, House of Representatives, Debates, 31 August 1910, viewed 22 October 2017, <http://historichansard.net/hofreps/1910/19100831_reps_4_56/>.