4th Parliament · 1st Session
The President took the chair at 2.30 p.m., and read prayers.
– May I ask the
Minister representing the Minister of Trade and Customs if he has yet received any information on the subject-matter of the followingquestions which I asked on the 7th September : -
If so, what was the general effect of such treaties as to the right of such ships trading -
– I have been furnished with the following answers : - 1. (a) Victoria, Queensland, Tasmania, Western Australia, and South Australia by treaty with Greece which was acceded to in 1888; (b) all States by treaty with Salvador which was acceded to in1887. This treaty has recently been denounced by Salvador, but in force at the time of Federation ;(c) Victoria by treaty with AustriaHungary, which was acceded to in 1868.
– I desire to ask the representative of the Government if he has noticed the following report in a daily newspaper : -
At a meeting of the council of the Royal Agricultural Society, Mr. I. C.Rockliff urged : “ That all political speeches should be done away with in connexion with the society’s toast list.” “ On luncheon day,” he said, “ we meet together for friendly and social purposes, dropping our political differences. The only way I can see to maintain that state of friendliness is to cut out political speeches. Any one could see at the last show that nobody took kindlyto the Prime Minister, when he was speaking.” (Cries of “ Oh, oh,” and laughter.)
Mr. Grant, feelingly : I entirely agree with Mr. Rockliff. The council probably remembers that I had to propose the political toast at the last show. (Laughter.) It was no joking matter with me. Really, I did feelmiserable. I didn’t want to tell any lies - (loud laughter) - and I’d rather have run ten mile; than have had that toast on my nerves. (Renewed laughter.)
– Joking apart, I do not think we can do away with these speeches.
– Limit them tolive minutes each. (Hear, hear.)
– They are not aslong as they are painful. (Laughter.)
– A lot depends on the proposer of the toast. No reference need be made to political parties. The people who respond might act in a similar fashion ; generalities and a little wit would fill the bill. (Laughter.) It would be rather discourteous to prohibit political remarks altogether.
– Oh, all right, but it is cause foT much pain.
). - I shall note, “ here we suffer grief and pain.” (Laughter.) and, if so, will he take steps before the next luncheon to have a mask made for the Prime Minister’s face, so that these unpatriotic Australians shall not have to suffer so much “ grief and pain “ by looking a Labour Prime Minister in the face?
– By the time the Prime Minister has returned from the Coronation of His Majesty King George V., I have not the least doubt but that the minds of many of these rebellious individuals will have had time to change.
– It serves Labour men who go to these functions jolly well right, anyhow.
Senator PEARCE laid upon the table the following paper: -
Commonwealth Military Cadet Corps - Report of the Director-General for the year ending 30th June,1910.
– I have to acquaint the Senate that this day I, accompanied by honorable senators, waited upon the Governor-General to present to him the Address of the Senate in reply to His Excellency’s Speech at the opening of
Parliament, agreed to on 13th July last, and received the following reply : -
Mb. President anm Gentlemen :
It is with great pleasure that I receive from you the Address adopted by the Senate in reply to the Speech delivered by me on the occasion of the opening of the First Session of the Fourth Commonwealth Parliament ; and it affords me very great pleasure to notice the expressions of continued loyalty to the Throne and Person of His Majesty the King.
asked the Minister representing the Minister of Trade and Customs, upon notice -
– The answer to the questions
No Government cheques for payment of bounty to farmers have been dishonoured. It is explained that three farmers, believing their bounty claims had been paid by the Department, drew cheques on their accounts. These cheques the bank dishonoured. The Minister is assured by the officers in Queensland that no delay occurred in the Department in ‘dealing with the claims and the payment of bounty.
– Is it intended to change the order of private business ?
Motion (by Senator Lt.-Colonel Sir Albert Gould) agreed to -
That Private Business, Notice of Motion No. 1, be postponed till Thursday, 10th November.
– I cannot consent to the notice of motion standing in the name of Senator Gould, and relating to the institution of military and naval pensions, being taken on another evening. I promised Senator McColl that an opportunity would be afforded this evening to Senator Gould to submit his motion, and to Senator McColl to propose the motion standing in his name, and relating to the institution of a superannuation scheme for the Public Service.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [2.35].- I was not aware that an arrangement of that nature had been made with Senator McColl, but I am perfectly prepared to take my chance of getting an opportunity to submit my motion at a later date. That will give Senator McColl an opportunity of proceeding with his motion, and I believe that he is quite prepared to do so. I do not desire to stand in his way.
– The sessional order gives precedence to Government business this evening, and I should like to know whether this private business will be allowed to come on after dinner ? I am only asking for information.
– Prior to the Government taking away the time which was set apart for private business, there were two notices of motion on the paper, and a promise was then given that an opportunity would be provided foi their consideration. From time to time the senators in whose names they stand have postponed them to allow of Government business being proceeded with. I promised that to-night they should have an opportunity to bring them before the Senate. We are only carrying out an understanding that was entered into when the sessional order was varied.
In Committee (Consideration resumed from 26th October, vide page 5184) :
Clause 12 (Land exempted from tax).
– I am very anxious to see this Bill passed, but I cannot allow this clause to go without protesting against the sweeping nature of the exemptions which are provided for. I do not wish to single out any particular exemption. If I could vote against the clause as it stands I would.
– You can.
– Of course I can, if I like. There are some exemptions of which I approve, but- the great majority I disapprove of.
– Why did you not move to strike them out?
– I did not happen to be in the chamber at the time, or probably I would have done so. The clause exempts, for instance, “ all land owned by any society registered under a State Act relating to friendly societies or trade unions.” The persons who compose these societies band together for their own special benefit, and why should they be exempt from a tax which is imposed on other members of the community? Again, the clause exempts “ all land owned by any building society registered under a State Act.” There is no reason why a building society should be exempt from the land-values tax any more than a private individual. Building societies are in business for profit-
– Profit, and sometimes loss.
– Like everybody else who embark in business, they have to take the good with the bad, the wet with the dry, and the soft with the hard. 1 think that the Government have been altogether too liberal in connexion with the exemptions. The Commonwealth owes a duty to itself, and community-created increments should, except in very special circumstances, go only to the people. I protest against these large exemptions.
– I think that Senator Stewart was somewhat unfortunate in the two exemptions to which he has objected.
– I could mention others.
– In the first place, friendly societies are not profit-making institutions. They provide for a rainy day, for sickness, and for those who may be left without bread-winners, and, therefore, they ought to be protected. Trade unions exist for the purpose of securing a perfectly legitimate object, namely, the securing of proper terms for their members.
– Many of them are also semi-friendly societies.
– Exactly. Perhaps Senator Stewart is not aware that it is the custom of building societies not to accept mortgages. When they advance money upon a property they place that property in their own name, and thus save their customer not only the expense of executing a mortgage, but also of re-transferring the property. These properties are really their own only to the extent that they make advances upon them, and consequently it would be very unfair to require them to pay land tax.
– My objection to the clause is that it does appear to make flesh of one and fowl of another. If there be any justification for exempting building and friendly societies from the operation of the Bill - and I believe there is - there is equal justification for exempting mutual life assurance associations. It is proposed to exempt building societies, because they largely consist of combinations of persons who are in a small way, and who, for mutual as sistance and the acquisition of property, have banded themselves together. Underlying the exemption is the knowledge that if the land owned by a building society were divided amongst its members, each of them would be possessed of less than .£5,000 worth of unimproved values. But does not the same argument apply to mutual life associations ?
– I think that they are provided for in another clause.
– If that be so, a great deal of misapprehension exists among the mutual life associations throughout Australia.
-Colonel Sir Albert Gould. - The Bill does not entirely exempt such offices from taxation.
– In their case it would be necessary to ascertain what is the policy-holder’s share in the property of any company, such share being based upon the surrender value of his policy.
– Clause 39 deals with that matter, and it practically exempts those associations. Not one-half per cent, of their shareholders will be taxable under it. Only exceedingly large policy-holders will be taxed.
– Then it would have been better to include all the exemptions under one heading.
– According to the honorable senator everybody should be exempt from the tax.
– Senator Givens would exempt one man, but not another, because he approves of the clause.
– How does the honorable senator know that?
– Because I have never known him to disapprove of anything without making his disapproval heard in this Chamber. The interpretation which the Minister of Defence places upon clause 39 is not that which I have hitherto put upon it. If his interpretation be correct, I admit that it will extend to mutual life assurance associations the same consideration that is extended to building and friendly societies.
. -The speech of the Leader of the Opposition proves that when we start exempting persons from the operation of the tax, we d0 not know where to stop. I join with Senator Stewart in affirming that the exemptions are far too great. I will undertake to say that the more exemptions we insert in the Bill the more claims we shall have for additional exemptions. Either the tax is just, or it is unjust. If it be just, everybody should be subjected to it; if it be not just, then nobody should 15e subject to it. Do we exempt anybody from the payment of Customs duties? Certainly not. We do not care whether a consignment of goods upon which duty is payable is owned by one man or by a thousand men. We do not concern ourselves with the consideration of whether they are intended for a mutual life assurance association, a friendly society, a building society, or a burglar. We say, “ These goods are liable to such-and-such a duty, and that duty must be paid.” What are the two principles underlying this Bill? The first is that the land of Australia shall contribute its fair share to the revenue of the country. The second is that big estates shall pay a penal tax in order that they may be burst up, and put to their best use. Does it matter a straw whether an estate is held by one individual or ten thousand, if it stands in the way of successful settlement? The exemptions go altogether too far, and for my part I would adopt in this Bill the same principle that we have adopted in the Customs Act by making the land itself liable to the tax.
– In the Customs Act we do precisely what we propose to do in this Bill. For instance, articles for churches, and regalia which is intended for friendly societies, &c, are admitted free.
– I recollect that we refused the demand of the churches to admit stained-glass windows free.
– They are exempt from duty.
– They are not. I recollect that Senator Keating put up a big fight upon that matter. If the principle embodied in this Bill be a good one, it ought to apply all round. I claim that the tax is just, and that, therefore, nobody should escape it.
Senator Lt.-Colonel “Sir ALBERT GOULD (New South Wales) [2.55].- I recognise that in any measure of this charcter certain exemptions must be made. The principle upon which they are based is that where no pecuniary gain is being derived by individuals from land, that land should be exempt from taxation.
– Some building societies pay 10 per cent, dividends.
– That may be. In many of them a shareholder contributes so much per month, and his money is retained by the society until, by addition and compound interest, it reaches a given sum. The question has been raised as to whether a mutual life assurance association ought not to be exempted from the tax, in view of the tact that it is proposed to exempt friendly societies. The Minister of Defence has affirmed, by way of interjection, that the case of these associations is already provided for. But I say that mutual life associations are npt entirely exempted from taxation under this Bill. If honorable Senators will look at clause 39 they will see that it provides that certain policyholders, who have properties exceeding £5,000 worth of unimproved values, will be called upon to include in their taxation returns their proportion of the landed property of the association. In other words, if the surrender value of a policy be £r,000-
– Then the policy on the average would be for £3,000.
– Let us assume that a man has. a policy the surrender value of which is £1,000. That policy is held to include a proportion of the value of the realty which belongs to the association. It may be £30, £40, or £100, and that amount must be included in the return furnished by the policy-holder - the return upon which he is liable to taxation. If the surrender value of his policy represents £50, that amount must be added to the £5,000 worth of unimproved land values if he possesses them, and he will then be taxable upon it. Again, if a man has £75,000 worth of unimproved land values which are liable to taxation, and the suirender value of his policy in a life assurance association is £roo, that £100 must be added to the £75,000, and he will be taxed 6d. in £1 upon it. It is wrong, therefore, to assume that the property of a mutual life association is not subject to taxation. It is, to a certain extent.
– It occupies a different position from that occupied by land which is owned by a friendly society, because that property brings him in bonuses.
– Take the case of a friendly society. It is a society which a man joins in the majority of cases because it provides him with certain benefits in return for a small weekly contribution. When a man pays his money into a friendly society, or into a life association, he does so knowing that he will be entitled to a certain return upon the happening of a certain event. The principle is the same whether he pays into a friendly society or into a life association. The only difference that arises is that a friendly society usually consists of what may be called small men, whilst a life association consists of both small and big men.
Senator SAYERS (Queensland) [3.Il._I believe in some of these exemptions. Take the case of a friendly society. A member pays a small weekly sum, and in case of accident or sickness, receives payment for a period of six months. Friendly societies are in this respect more useful than life assurance societies, because they help a man during sickness. In the Manchester Unity of Oddfellows, I believe that a payment of £50 is made in the case of the death of a member. If the member’s wife dies, he is allowed £15 to cover the cost of the funeral. It certainly would not be proper of the Government to tax such societies. During my career, I have known hundreds of people who would have been reduced to poverty except for the help which they received from friendly societies. A payment of a guinea a week, with free medical attendance during sickness, is a great advantage. Without this help, many a family would get into debt to the extent of £50 or £60, which it would probably take a lifetime to pay off.
Clause, as amended, agreed to.
Clause 13 agreed to.
Clause 14 - (1.) For the purposes of the assessment and levy of land tax, every taxpayer shall in each financial year, in the prescribed manner, and within the prescribed time, furnish returns setting forth a full and complete statement of all land owned by him at noon on the thirtieth day of June then last past, and of the improved value and unimproved value of every parcel thereof, with such other particulars as are prescribed :
– It is probable that some amount of awkwardness will be experienced in regard to the furnishing of returns under this Bill. Very few people are quite sure about the unimproved value of their own properties. Municipal bodies, however, are supposed to have competent valuators. To prevent the possibility of confusion, therefore, I think that the valuations made for municipal purposes should be accepted by the Commissioner under this measure. Local bodies are in a better position to know what the market value of a property is than are those who own it.
– In some States, the undervaluations for municipal purposes are disgraceful.
– That may be so; but in other cases, the municipal valuations are reliable. There are, however, instances of overvaluation by municipalities. I have appealed, on several occasions, against municipal assessments, and in every case have succeeded. I should not object to making the valuation 5 per cent, higher than the municipal, valuation. But people ought not to be called upon to .place a value upon their own properties. I therefore move -
That the following words be added to the clause : - “ Provided further that a taxpayer shall be exempted from any penalty for an alleged undervaluation of the unimproved value of his land where he produces satisfactory evidence that the latest local assessment by a municipality divisional board, shire council, or other local authority confirms his valuation.”
– The Government cannot accept Senator Walker’s amendment ; nor do I think that this is the proper place to move it. Clause 67 deals with penalties for undervaluation. If the honorable senator will withdraw his amendment now, he will have an opportunity of moving it again when we reach clause 67.
– I am quite willing to accept the Minister’s suggestion, if the Government are disposed to favour my amendment.
– I do not favour it in any case; I simply say that this is not the proper place for it.
– Then I may as well go on with it.
– People have been writing to me to ask whether, if they possess any land at all, they will be compelled to make returns. According to my reading of the Bill, the word taxpayer means “ any person chargeable with land tax “ ; and a person in my view is not chargeable with land tax unless he has property over the unimproved value of ,£5,000. I therefore have replied to my correspondents conveying that view to them, but I should like to have it confirmed by the Government.
– - I do not think that there ought to be any misunderstanding on the point raised by Senator Givens. Any person having land over £5,000 in unimproved value will be expected to make a return. Any absentee possessing land of any value will be expected to make a return. But the Commissioner will have power to call upon any person having land of any value to send in a return. There may be some cases that are close to the border line, and the Commissioner may require information in regard to them.
– It seems to me that some people will be put to great trouble under this Bill. I understand that information has to be furnished by those having interests in land owned by companies, as well as by those having land in their own name. If a man is quite sure in his own mind that any land of which he holds the title is of a certain value, and if in addition he has an interest as a shareholder in other land, his total interest in land not amounting to more than £5,000 in unimproved value, is he bound to make a return?
– He is not bound to do so unless requested by the Commissioner.
– If a man is sure in his own mind that all his interests in land, whether held in his own name or as a member of a company, do not amount to £5,000, I understand that he is not called upon to make a return unless the Commissioner asks for it?
– That is so.
.- I believe that confusion will arise under this clause. It is so vague.. We are not told in the Bill what the improvements are which a man can deduct. As the Minister has said, there must be many estates that are near the margin. I am afraid that there will be disputes about such properties. If it is understood that if a man does not believe that he has £5,000 worth of land he is not called upon to make a return, there will be enormous difficulty. Suppose a man does not send in a return, and the Commissioner calls upon him to do so. Will he incur any penalty for the failure to send in a return? Many people have very indefinite ideas as to what unimproved value is. This is one of the clauses that I strongly object to, because it involves a man valuing his own land. That is a very improper thing. I consider that in connexion with any land taxation the Government should appoint its own valuers, and that taxation should be paid on official valuations. Many people who are perfectly anxious to do what is right will find themselves in a very delicate position.
And many would prefer to pay a higher tax than to have this duty thrust upon them. In connexion with the income tax, every man knows at once what his income is j but, in the vague and uncertain way in which this Bill is drawn, it will be almost impossible for many men to say whether their land has an unimproved value of over £5,000 or not. They may consider that the unimproved value is not more than £4,500 ; and, according to the VicePresident of the Executive Council, they will not be required to send in a return. They may find later that, in the opinion of some one else, their land is of the taxable value ; and I anticipate that very great trouble will arise under this clause.
– In South Australia, there is a land tax imposed upon all land. State officials value the land periodically, and send out assessment notices. I should like to know, from the Vice-President of the Executive Council, whether the assessment notices of State officials in any State will be accepted as representing the unimproved value of the land for the purposes of this taxation. I think it will be admitted that those who will have to pay this tax should be allowed to depend upon the valuations of their land made by State authorities.
– I cannot believe that the Government have considered this clause carefully. It would have been infinitely wiser and better to have appointed Government valuators, charging the land-owners with their expense. It is an abominable thing to compel a land-owner to value his own land under such conditions.
– Have they not often expressed dissatisfaction with the work of municipal and Government valuers?
– When we come to consider the valuations that are made on behalf of local authorities throughout the Commonwealth, honorable senators must admit that the appeals against those valuations are infinitesimal. I consider it an outrage on decency to compel a man to value his own land. The Government might have appointed official valuators, and compelled the land-owners to pay for the valuations. If that course were adopted, it would give great satisfaction.
– The private land-owner can obtain expert advice in the valuation of his land if he wants it.
– There is such a vagueness about the whole thing, that 1 think it is grossly unfair that land-owners should be placed in what will be really a dilemma. Many will lose their sleep over this clause. Men are here being asked to
Steer their own course in a path they never trod before.
– There is no doubt they are going to be put on a different tack now.
– Is the honorable senator pleased at that?
– I am.
– They have escaped a fair share of taxation in Tasmania under the old system.
– Granting that for the sake of the argument, is it any justification for treating them now as though they were scoundrels? The like of these provisions is not to be found on any statutebook in the world. I appeal to the VicePresident of the Executive Council, even at this stage, to agree to the appointment of official valuers by the Government, and charge the land-owners with the valuation fees.
.- Senator Fraser prefers the appointment of Government valuators to carry out the work of valuation; and, from the interjections of honorable senators opposite, I gather that some people believe that it will not be necessary for the Government to appoint valuators. It is necessary to remind honorable senators that the Government must, in any case, appoint Government valuators.
– Hear, hear !
– Why should they not do it first as well as last? The Government must have their own valuators if they are to check the valuations made by private owners ; and, in the circumstances, why should not the course be adopted that has al ways been followed in the past, of having the valuations made by Government officials, leaving it to the owners to accept or appeal against the valuations made?
– If that were done, could we collect any tax this year ?
– The honorable senator confirms what the Vice-President of the Executive Council said in introducing the Bill. The reason for this proposal is not that it is considered a good system, but that time is an element in the contract; and, as Senator McGregor has said, there is not time for the Government to make the valuations this year. That may be perfectly true ; but is it any reason for imposing a penalty upon a land-owner who rnakes a valuation which does not satisfy a Government official when he comes to check it. The Government might have proposed that, for this year, we should proceed in this way, letting the land-owners make their own valuations, accepting them for the first year, and adjusting claims against them when Government officials had time to consider the valuations. But what is proposed is a perpetual provision.
– Quite right.
– It is impossible to argue with men who shift their ground in this way. The Vice-President of the Executive Council said that the reason for this proposal was that there is no time for Government officials to do the work ; and now we have the Honorary Minister saying that it is quite right to adopt this method as a permanent mode of procedure. If that be correct, it was not necessary for the Vice-President of the Executive Council to justify it on the ground that it was a convenient expedient to adopt in launching the Bill.
– Every man should be competent to value his own land.
– There speaks the man who knows absolutely nothing about land.
– Let us give it a trial.
– I have no objection, but I say that it is monstrous to propose such an experiment, and attach a heavy penalty to the land-owner if it is considered that the experiment has failed.
– Is it not right that a conviction should follow a trial?
– No one knows better than Senator Rae the wide range of difference in the value put upon land,, even by experts. On the second reading of the Bill I gave figures, which were not imaginary, of valuations made by experts in the Lands Department of New South Wales. I arn prepared to believe that these men were as unbiased as men serving any master can be. But one set of Government officials, sent out to value lands for re-appraisement when the Lands Department was a seller, valued them at £3 an acre, and within nine months the same Department sent out their officials again, though they may not have been the same men, to value the same land, when the Department was a buyer, and wanted the land for purposes of closer settlement, and they valued the land at £2 per acre.
– Does the honorable senator not think that the owner should be the best judge of the value of his land ?
– But my honorable friends opposite will not allow him to be the judge. The Government appoint him the judge, and if his judgment is considered wrong, they propose to punish him for it.
– Hear, hear.
-The interjection means that, whether the land-owner is experienced or not in the valuation of land, so long as there is a provision in the Bill to hit him anyhow, Senator Ready will be quite satisfied.
– The land-owner will have plenty of opportunities to do the right thing.
– But who is to be the judge of the right thing? Every one wishes to do the right thing, only opinions differ so much as to what the right thing is. I have given an instance of valuations by officials of the same Department which varied to the extent of 50 per cent. And when such a discrepancy is possible in the valuations of officials, who may be assumed to be without personal interest, surely it is to be anticipated that similar discrepancies will be found to occur in the valuations made by private land-owners. Yet they are to be made subject to all the pains and penalties provided for in this Bill, Let me direct attention to what follows from this clause. Senator McGregor has spoken as if a man failing to make a return would not be penalized in any way. I direct the attention of the Committee to clause 68, under which it will be seen that a land-owner renders himself liable to a penalty of no less than £500 if, in his judgment, he decides that his land is worth only £5,000 unimproved value, and it is afterwards shown to be worth 25 per cent. more. No doubt Senator Ready will say, “ Quite right, too. He is a landowner. Why should he not be liable to penalties?” Under clause 14 the taxpayer is required to make a return. A landowner may consider that the unimproved value of his land is not more than £5,000, but if the Commissioner or his valuators consider that it is worth more, it will be seen that under clause 68 any person who by any wilful act, default, or neglect, evades, or attempts to evade, assessment for taxation, is liable to a penalty of £500.
– Let the honorable senator read clause 18.
– Clause 18 does not abolish clause 68. If Senator Findley wishes to draw my attention to the fact that the Government have not only one, but two clubs with which to hit the unfortunate taxpayer, I may tell him that I recognise it. But clause 68 was sufficient for my purpose. I feel that it is useless in the circumstances to suggest anything.
– Why this despair?
– It is due to the attitude of my honorable friends opposite. I venture to say that some honorable senators are supporting this clause merely because it is in the BiTT. There is not one of them who, if he had been asked, before this Bill was printed, how he would collect this tax, would have devised such a scheme as this.
– Does the honorable senator not know that there has been a proposal on the Labour platform for the last twenty years to make the land-owner the assessor, and to enable the State to take the lands over with 10 per cent, added to his valuation?
– There is a lot on the Labour platform which, thank goodness, remains there. The honorable senator’s interjection does not help us.
– It is an answer to the statement that no one would have suggested such a clause.
– I decline to believe that if the party which adopted that plank in their platform were free to draft a Bill to carry it out, it would leave a landowner with such pains and penalties without any option of justifying his position.
– The honorable senator is qualifying his statement.
– No. We have a fair indication of the spirit in which the Bill was drafted. The revenue would not be affected by the adoption of another method of valuation. If you want revenue in the first year, you could have said, “ We will accept the valuer’s return for the first year, and until we have time to revise it, and he shall pay on that return.” Then if the land were undervalued you could charge him interest on the amount which he owed to the Commonwealth, but surely you ought to accept the responsibility of valuing the land. Until you value the land you cannot challenge the assessment of a land-owner. Why do you not do ‘that first, as well as last? Senators Rae and Ready seem to think that the Crown will be relieved of the cost of valuing. It cannot be.
– I do not think anything of the kind.
– Further, let me point out die added complication which arises from our treatment of improvements and unimproved value. Under one definition a man,- in returning his unimproved value, is entitled to deduct the value which the improvements have added to the land, which may be greatly in excess of the cost of them. But under another definition and another system of valuation he is only allowed to deduct from the gross value of his estate the cost of his improvements. The difference bet wen the two methods of valuation is so great as to amount to much more than the percentage of undervaluation which renders an owner liable to the forfeiture of his land. If the Government wish to deal fairly with land-owners they could, without jeopardizing this year’s revenue, have provided for the acceptance of the interim returns to be adjusted later, when they had had time in which to make their own valuations. I feel quite convinced that this system will not last long, and will have to be altered by an amending Bill.
– - Of course, I must excuse the great anxiety exhibited on behalf of the probable taxpayer. It is naturally assumed that we on this side have no sympathy with anybody, that we do not want to act justly, or to pass legislation which will be fair to different sections of the community. But all honorable senators on the other side want to be fair. To whom? To somebody who is probably capable of looking after his own business. Senator Millen claims that the Government should appoint valuers, and, in the same breath, told us that, in New South Wales, two sets of valuers were at variance within twelve months. That shows the ridiculousness of his own argument. It is a disadvantage at all times to pay a tax, but we want to ascertain whether the taxpayer will be put to unnecessary advantage. We also want to get at the position of the Commissioner of Land Tax. and also at the position of the general public. The policy of the Labour party, not yesterday or to-day, but for years past, has been to impose a tax on land values, and that policy embodies Ihe plank that the best system of valuation is self-valuation. Senator Millen and other senators have travelled through the States and listened to the grumblings of persons as to the valuations which were put on their lands, complaining that the valuers knew nothing about the business, and claiming that they alone could know the true values. After listening to their statements the members of the Labour party, who have travelled more than anybody else, came to the conclusion that there was a good deal of truth in them. Presumably, the Commissioner of Land Tax will be a man of intelligence and good judgment. Every year the taxpayer is supposed to send in a return, except in certain cases, which are set out in the clause. He will be furnished with forms, and with information, as prescribed, to furnish the return. He is the best man to value his own land. The returns will go before the Commissioner, or his officers, and if an examination of the returns from the district of, say, Murrumbidgee, or Riverina, should disclose that 50 per cent, of the assessments range about the same value, and that 25 or ,30 per cent, are below the general average, the Commissioner or his officers will not hesitate to cause further inquiries to be made.
– So long as they make a combination to bring about a uniform value, it will be all right.
– The Commissioner will not be a fool. He will have his wits about him, and if there were such uniformity in the assessments as to create suspicion, he would see that there has been collusion in the district, and appoint valuers to go and value the lands for the Commonwealth. All these things are implied. These valuations are supposed to be sent in annually by the taxpayers. But the clause also provides that if a taxpayer has put in his valuation, and has been assessed thereon, for the next two years he shall not be required to send in a full return, but only a return of any value added to his estate, or deducted therefrom. Honorable senators ought to read these provisions, and understand them before they discuss them here. Suppose that a taxpayer fails to put in a return, or puts in a return which the Commissioner thinks is suspicious, and will not accept under clause 18. The latter will make an assessment in such manner as he may think fit, and, under clause 42, the taxpayer will be given the right of appeal. If it should be found that any taxpayer or any individual, when required by the Commissioner to furnish a return, gave false information, or in any way deliberately tried to mislead him, honorable senators, if they turn to clauses 66, 67, and 68, will find how he can be dealt with. If they would only read the whole Bill, and compare its various portions, and see how the plan is worked out, they would be much more satisfied, and would not try to make amendments in a haphazard manner, or to raise objections in the wrong place. The object of this clause is to require - to compel - the possible taxpayer to send in a return. The assessment on the return must be ready as early as possible, and that is one of the reasons why this, provision is required. It is not only necessary for the general administration of the Act, but is indispensable in the first year in order that the Commissioner may be able to make the assessments. I hope it will be carried, because it is part of a plan to do justice to the public, and make things easy for the Commissioner, and fair for the taxpayers.
– - The Vice-President of the Executive Council has attempted to reply to some arguments used by Senator Millen, but let me ask him to consider another aspect of the question. Many honorable senators on this side agree with our Leader that the Government are shirking the duty of valuing the land. Suppose that a large number of the taxpayers should refuse to make a return, what are the Government going to do? Suppose that taxpayers should say to the Government, “ In the circumstances, we are not competent judges; value OU] lands, and we will pay the tax,” in what position will they be? Will the Government impose penalties upon them, and, if so, under what provision in the Bill ? 1 ask these questions in view of a couple of later clauses. I agree with Senator Millen that, on general principles, the Government ought to take the responsibility of valuing the land, and, having valued it, exact any penalty or forfeiture that they may have a right to exact. But it is not right to put the taxpayers of Australia between two fires. The Vice-President of the Executive Council has said that we have a right to consider what kind of an individual the Commissioner is likely to be. If he be a beneficent Caesar, he will be all right; but if he be like the rest of die Caesars, he will be all wrong, and we shall require to come to this Parliament to put him in his place.
Senator VARDON (South Australia) has been adopted in this Bill, especially in regard to the making of assessments. I would invite the attention of the VicePresident of the Executive Council to the Land Tax Act of South Australia, which has worked a very great deal more satisfactorily than this Bill is likely to work. Section 32 of the South Australian Land Tax Act of 1884 provides -
Every taxpayer shall, within a prescribed time, or any extension thereof allowed by the Commissioner, furnish to the Commissioner in such manner as shall be prescribed such returns in such form and containing such information and particulars as may be prescribed for the purpose of enabling the Commissioner to estimate the amount of the tax payable by the taxpayer, and such return shall be verified by any prescribed form of declaration, or in such other manner as shall be prescribed.
So that to enable the Commissioner to make his own valuation, the taxpayer is obliged to furnish a return. He is allowed to forward with that return the certificate of any qualified valuator as an evidence ot the true value of his land. The Act further provides, in section 36 -
The Commissioner shall, once in every third year, make an assessment of all land liable to land tax, and . general notice of the making thereof shall be given as soon as conveniently may be after the same shall have been made, and immediately thereafter such assessment shall be and remain in force, except so far as the same may at any time be altered, until a new assessment shall be made.
This assessment provides for a short description of the land assessed, its actual value, its unimproved value, and the amount of the land tax. Later on, the Act provides that any taxpayer who is dissatisfied with the assessment has the right of appeal. So far as I know, no penalty is attached to him for sending in anything which may be regarded as in the nature of a false return. The Commissioner has the power to make an assessment whenever he may think it proper to do so. I should like to give my own experience of the operation of section 32, under which the landowner is first of all required to furnish a return. It happened that just prior to the Statute coming into operation I had purchased 10 acres of land, for which I gave £100 per acre. Being an honest man, or an honest fool, I returned the value of the land at that amount, and was assessed upon it. The man next to me, who held a 10-acre block of exactly the same quality, returned its value at £30 per acre. He had purchased it some years before, and, no doubt, honestly regarded that as its value. But the curious feature of the busi- ness was that the Commissioner of Taxes accepted both returns, and assessed us upon them. Shortly afterwards, however, he made his own assessment, and the value of my land for taxation purposes was very considerably reduced.
– Did he spring the value of the other man’s block up a bit ?
– No. After holding the land for ten years, I sold it for £400. That is the sort of unearned increment which persons occasionally receive as the result of purchasing land. If we are going to allow land-owners to make their own valuations, the honest man will pay the tax. But if the Government are going to deal honestly with land-owners, the former should make their own calculation, and if the taxpayer is not satisfied with it, he ought to have the right of appeal. That is the method which was adopted in South Australia, and it is the only just method. Take the .two instances to which I have already referred. Suppose that the Department accepted my valuation at £100 per acre, and my neighbour’s valuation at £30 per acre. Look at all the penalties to which he would be subject. Why should he be penalized for returning what he regarded as the honest value of his block? If land-owners are to pay this tax, an honest assessment ought to be made of their lands by competent officers.
.- I feel very strongly upon this matter, because I know it is impossible for a land-owner to value his land conscientiously and truly. I can take the Vice-President of the Executive Council to land which has been sold by the Crown for £1 and £1 5s. per acre. Starting at the Edward River, in New South Wales, and going straight up to the Darling, there are millions of acres which were sold by the Crown for £1 per acre, and which can be bought to-day for 8s. 6d. per acre. In my capacity as a trustee I know of a property in Queensland upon which the interest was not paid for perhaps eighteen months. But rather than foreclose on the unfortunate individual 1” allowed it to run on.
– The honorable senator does not know Australia if he says there are no large estates in Victoria.
– I am not discussing that matter at the present time. There was only 18s. per acre borrowed upon that land, which consisted of good, black soil, and enjoyed a rainfall of 40 inches per annum. Some of that land is now worth £5 and £6 Per acre. I know that a great increase has taken place in the values of land in some parts of Australia, but a huge decrease has occurred in other parts. If the rabbits once secure a footing in certain portions of Queensland where the land consists of stony ridges and gullies, it must decrease in value. We all know that land values fluctuate very much. During the drought of 1902 land values fell enormously. If the farmers cannot grow crops they must fall. I appeal to the VicePresident of the Executive Council, who, I believe, is anxious to do right, but who does not possess the knowledge and experience to enable him to do it, to recognise the wisdom of providing for the appointment of Government valuators. If he does that he will relieve the Bill of one of the darkest blots upon it.
– - I do not like this rambling discussion. Honorable senators opposite assume that this clause provides for an assessment being made by the land-owners. It does nothing of the kind. It merely provides that they shall furnish a return upon which the Commissioner will make an assessment. Senator Vardon has told us what happened under the Land Tax Act of South Australia. He has shown us the absolute necessity of providing some penalty for undervaluation, and for the furnishing of returns as a guide to the Commissioner in making his assessment. Senator St. Ledger has asked what will happen if the taxpayer fails to make an assessment. May I point out that the taxpayer is not asked to make an assessment, but merely to furnish a return. If he fails to do so, clause 18 provides that the Commissioner may make the assessment himself. Then, if the taxpayer upon being requested by the Commissioner to make a return, and to furnish information, fails to do so, he will be liable to a penalty. If he furnishes a false return with the intention of misleading the Commissioner he will be subject to still further penalties. Surely that is quite right. The failure of the South Australian Act was due to the fact that it did not provide for a penalty in the case of false returns being furnished. In my second-reading speech upon this Bill I” pointed out that, whereas in 1884 the land-owners of that State valued their land at £44,000,000, as soon as they discovered that it was possible to evade taxation by resorting to appeals against the assessments its value fell to£27,000,000. Therefore it is necessary that legislation of this description should make provision against the defects that exist in legislation of which we have had experience in the States.
– There seems to be no chance of altering the system of assessment proposed by this Bill. The Government have clearly made up their minds that every land-owner shall make his own assessment. But I should like to point out that the system adopted in South Australia has also been adopted in Queensland, under the Local Authorities Act. Under that Act, every inch of land in the State is taxed on its unimproved value. An assessment notice is issued to every person owning land, and any land-owner who does not like the assessment can appeal. The advantage of that system is that it does away with the necessity of a small man putting in a return, because he believes that his property may be either just above or just below the taxable value. This Bill will put such men to considerable trouble and expense. If the suggestion of Senator Walker were adopted, and the assessments of local bodies were accepted, it would be a simple thing. But, under this Bill, a man has to make a statement concerning every parcel of land he holds, giving the improved value as well as the unimproved value; though why the Government want particulars as to the improved value, I do not know. In Queensland, our experience of the Local Authorities Act for twenty years shows that the arrangement there adopted is absolutely satisfactory. It has never been contested. The Minister has said that in some States there has been a great deal of undervaluation. As a matter of fact, in Queensland, there has been a good deal of overvaluation. The reason for that is that the taxation raised by the local authority was, until a few years ago, the subject of a subsidy from the Government. The result was that there was a temptation to put up values everywhere, with the view of obtaining an increased subsidy. Therefore, in Queensland, at any rate, undervaluation has not been the rule. It would be better to have one central authority under this Bill sending out assessments to land-owners, and giving them the right of appeal to some other authority if they were not satisfied with the way in which they were assessed. The necessary information could be readily obtained from the local authorities. That method would be far easier, simpler, and fairer, than compelling people to assess their own properties. Senator Walker proposes that we should relieve a man from the risk of being charged with trying to swindle the revenue, if he puts in an assessment in accordance with that of a properly constituted local authority. I think that that proposal is eminently fair and reasonable. I am perfectly certain that, if it had been made privately to the Government, before the Bill reached its present stage, so that they might have adopted it without being charged with climbing down, they would have done so.
– A local authority might be under the domination of a large local magnate, whose interest it would be to keep values down.
– Of course, no man who is “ big “ can be straight !
– As I have shown, in Queensland the tendency has been to keep values up rather than down.
– The honorable senator knows of cases where one value has been put on land for taxation purposes, and another value for sale purposes.
– Of course, we understand that it is a crime to be successful in Australia nowadays. But a man should not be suspected of trying to depreciate the value of his property instead of trying to raise it. I have no hope that the Government will accept the suggestion. Nevertheless, I am satisfied that Senator Walker’s amendment would do a great deal towards relieving taxpayers of trouble and expense.
.- I have listened attentively to the arguments of the Opposition on this subject, and, to my mind, they have been ridiculous. Why should a man object to valuing his own property? Is it so very difficult to do so?
– What is objected to is the imposition of a penalty if a man’s valuation does not square with that of the Commissioner.
– No man would be penalized if his valuation were fair and correct.
– Who is to decide?
– The Commissioner.
– If the land-owner’s valuation is different from that of the Commissioner, the Bill penalizes the landowner.
– Does any one suppose that the Commissioner would take action against a man unless his assessment were grossly unfair? Some honorable senators opposite have said that the principle of self-assessment is a new one. The fact is that every week in Tasmania the Labour daily newspaper publishes the platform of the Tasmanian Labour party, which contains the principle of taxation on the basis of self-assessment.
– Is that in the Labour party’s platform?
– Then there is no more to be said !
– Nevertheless, the honorable senator expresses surprise that this principle should be proposed.
– As a matter of practical politics, yes
– The Leader of the Opposition seems to be hard put to it for some argument with which to condemn this principle.
– The difference between the honorable senator and me is, that I know what I am talking about.
– I do not think that the honorable senator possesses all the brains of the Senate.
– It is not a question of brains, but of knowledge.
– It is not a question of brains, but of experience.
– In Western Australia each land-owner is compelled to make a return of the land that he holds, and then the Commissioner issues an assessment based on the assessment of the local authority.
– That is the very thing that Senator Walker wants.
– In Western Australia the Commissioner practically decides the matter. Under this Bill the Commissioner will have State experience to guide him. Personally, I welcome the idea. It is one of the best provisions in the Bill. There have in the past been many glaring abuses in the system of valuing land for taxation and rating purposes. In my secondreading speech I showed from the case of Mr. Hills, that 10 acres of land, valued at £1,200, were taxed at £3 2s. 6d. per annum, whereas an estate of 20,000 acres, valued at £95,000, had to pay a tax of only about £400. If the owner of that estate had had to pay the same taxation in proportion as the small man, the tax would have amounted to about £2,800. Yet the two estates are close together, being divided only by a wire fence.
– Does that guarantee that the value of the land is the same in each case?
– The value of the land is the same in each case, only in theone instance the owner is a worker, whilst’ in the other he is a land loafer. Under our system of assessment in Tasmania land loafers have been favoured for half-a-: century. Now, because we ask them to; assess their own land there is an outcry from their friends in the Senate.
– If a man is lazy, that does not imply that he is a robber.
– A man who has robbed the revenue for years is a robber. 1 do not apply that term, as do honorable senators opposite, to those who support the’ policy of making land-owners meet just’ demands upon them.
– A man may not have the brains to manage his property. Do not say that he is a robber because he has no brains.
– I have noticed that’ the large land-owner generally has brains enough to know how to escape his proper share of taxation. I trust that the principle which has been embodied in this Bill will be maintained for many years. At any rate, we can give it a fair trial, and if it does not work it can be altered afterwards.
Senator Lt.-Colonel CAMERON (Tasmania) [4.14]. - I am in favour of Senator Walker’s amendment, because it is a rea:sonable one. The principle of it is so simple and just that I wonder that the Government do not accept it at once. Why should not a land-owner be able to put in a return based upon the assessment that his State has accepted as a proper basis for taxation? Surely such an assessment could not be looked upon as prima facie intended to mislead the Commissioner. This is simply a question of administration and of detail. As the Bill stands, the land-owner will have to furnish his own assessment. But if a penalty is to be imposed, surely a land-owner should be safe if his assessment is based upon a; recognised standard. It is only reasonable to ask the Federal Government to accept such an assessment, and to believethat a land-owner making it is not seeking to mislead the Commissioner. That is alf that is asked. The course proposed is simple and would in no way affect this Bill or the principles of land taxation. It is merely a matter of detail, and if it he thought that it has been sprung upon the Government suddenly the clause might be postponed while they give it consideration.
– lt surprises me to find that although the land-owners and their friends evidently take a tremendous interest in this matter, none of them seem to have read the Bill. If they have done so they have failed to understand it. I should be sorry to impute wilful misunderstanding, but there is no escaping the fact that it is either wilful or stupid, because the Bill states as plain as the nose on one’s face that the valuation made by any State or other authority may be taken into account by the Commissioner of Land Tax. If he wishes to accept the valuation of a local authority there is nothing to prevent him doing so.
– Why not provide that he shall accept it?
– I hope the Government will not agree to anything of the sort. The proposal to permit the land-owner to value his own property is so eminently just that the other provisions of the Bill appear in a very favorable light when its opponents object to this one.
– There should be no objection to the Government valuing the land they intend to tax.
– When I hear it said that no one knows the value of his own land, 1 should like to know how many would accept the valuation of another person when they propose to sell.
– The point is that the Bill makes the owner the judge of the value of his land, and penalizes him if there is a difference of opinion as to its value.
– That is to induce him to make an honest statement of its value, and I remind honorable senators that the Bill allows for a substantial difference of opinion as to the value of land between the owner and the Commissioner. When Senator Chataway referred to valuations for local government purposes, I interjected that in many cases local magnates are immediately concerned in those valuations. When I was in Tasmania cases were brought under my notice of large land-owners acting as valuators for the districts in which their own lands were situated.
– With the aid of a Government valuator who was generally very complacent.
– Just so. They could give him good whisky.
– And the local landowners could appeal to other land-owners.
– That is so, and they made a happy little family.
– What has that to do with the question?
– It has a good deal to do with it. Honorable senators opposite are backing up a proposal that if any one sends in a local valuation based on interested and fraudulent methods, the Commissioner must accept it as an honest valuation.
– The honorable senator commenced by saying that the Commissioner would accept such valuations.
– I did not. The honorable senator, with his usual mental acrobatic nimbleness, is deliberately misrepresenting what I said. I said that the Commissioner might accept such valuations if he thought fit. To provide that he should do so would be ridiculous, and would enormously reduce the returns from this tax, in the interests of the land-owners who have already too long escaped taxation. It came under my notice in Tasmania that many land-owners asked ten, twelve, and twenty times as much for their properties as the value they put upon them in their returns. What sort of honesty is that? It may be up to the commercial standard of to-day, but it is not the standard on which we should base valuations under this Bill. Honorable senators opposite are paying but a poor compliment to our intelligence when they ask that we should accept the valuations of local authorities, which in many cases are in the hands of the big landowners.
-Colonel Cameron. - I wish they were, but they are not.
– I am glad to hear it ; it is time the power was taken out of their hands. If it were not considered such a dreadful thing to mention names in this Chamber, I could refer Senator Cameron to some gentlemen in his own little island who took an active part in these matters. They reside a little further south than the district in which the honorable senator resides, but he probably knows them better than I do.
– Under this clause, a man has to make a return of all the land he owns, and an assessment of its unimproved and its improved value. Under clause 46, if it is found that there is any mistake in his estimate of the unimproved value of his land, he is to be subject to pains and penalties. I wish to know how he is to estimate the unimproved value of his land. I can mention the case of a man who a few years ago purchased a block of land at 20s. a foot. He erected a house upon it, and has lived on it ever since. There is a vacant block next to him for which the owner wants £4 a foot. The owner of the first block would sell his land for what it cost him. If he were to return his land at a valuation of £1 a foot and the Commissioner thought the valuation put upon the land by his neighbour was correct, the first man would be considered to have undervalued his land by 75 per cent. Is that a fair position in which to place any man? Yet this man would be liable to a penalty. This shows that the system proposed by the Government is altogether wrong. In clause j 6 we ought to provide that the Commissioner shall cause to be made valuations of all land. When he has done so he can make his assessment upon those valuations. It is quite unnecessary to throw the onus upon the land-owner of valuing his own property. One man might quite honestly estimate the value of his land at a certain figure, and another owning land alongside might put a higher estimate upon it, and if the Commissioner decided to accept the higher valuation the first man might be penalized for sending in what he honestly believed to be a fair return.
.- I wish to make a few observations on the principle of allowing land-owners to value their own property for purposes of taxation. I think that no one can object to be asked to value his own property for the purpose of taxation.
– The honorable senator misses the point. If he makes a mistake, what is the punishment?
– The mistake would have to be a very grievous one if the valuation was not within 25 per cent, of what the Commissioner of Land Tax considered to be a fair valuation.
– I have given an instance in which it might be considered 75 per cent. less than a fair valuation. Senator BLAKEY. - That is an isolated case. The land-owners of Victoria are well able to value their properties within the margin of 25 per cent, allowed by the Bill. I took the trouble to look up the valuations of certain estates acquired by the Closer Settlement Board of Victoria during the last four years. 1 find that the average price paid by the Board for these estates amounted to no less than 55 per cent, more than the valuation put upon them by the shire valuators.
– Including improvements, I suppose?
– Certainly. In the case of the Moralla Estate in the Western District of Victoria, not far from where I live the shire valuation was 91 per cent, less than the price paid for the estate by the Closer Settlement Board. I have here two instances of discrepancies in valuations which I should like to have recorded in Hansard. I have taken these figures from the speech delivered by Mr. Watt, State Treasurer of Victoria, in introducing his Land Tax BUI last year. I find that the Exford Estate was taken over by the Closer Settlement Board at a price 139 per cent, above the valuation of the local authority. Staughton Vale was taken over at 118 per cent, above the local valuation. The price paid for the Heart Estate, near Sale, was 114 per cent, above the valuation of the municipality of Sale. Their valuation o’f the estate was £26,165, an<i it was purchased by the Victorian Closer Settlement Board for £56,580. I venture to say that the owner of the Heart Estate knew that it had not been fairly valued by the municipality of Sale. I am certain that if he valued it fairly he would have fixed the value at more than £26,165.
– For shire purposes it does not matter whether the valuation is high or not, so long as it is uniform, because where there is a low valuation there is a high rate.
– The honorable senator refers to the very unfair method of valuation adopted by local authorities in Victoria for many years past. They have adopted the practice of imposing a high rate with a low valuation. They have imposed rates of is. 9d., 2s., and 2s. 6d. in the £r, but in many cases their valuations have been 50 and 55 per cent, below the real value of the properties.
– They found that a good way of getting at the small owners.
– The honorable senator is quite right. That practice has been adopted as a means of penalizing the small owner.
– How could that be if the valuations are uniform?
– Under this system the small owner has to pay more in rates in proportion to the value of his property than the large owner. No fairer proposal was ever submitted than this, to allow a man to fix for himself the valuation of the land on which he is to be taxed. Surely every owner of land will know within one-fourth what its value is in the open market. I am satisfied that 90 per cent, of the land-owners in the Western District of Victoria know within a margin of 5 to 10 per cent, what their estates would fetch in the open market.
– Did the honorable senator read the report of the Cohuna Land Inquiry which is going on here?
– I skimmed through some portions of the evidence, which was very interesting reading, especially as showing how some of the estates were acquired and taken over by the Government. I wish to cite one or two large estates which have been undervalued by the shires, with the tacit consent of the owners, and the prices which were given by the Government for settling people on them. The Tundara Estate was acquired at 25 per cent, above the shire valuation. The Moralla Estate was valued at 91 per cent, less than the price paid for it by the Board ; the Werribee Park Estate, near Geelong, at 67 per cent, less, the Restdown Estate at 60 per cent, less, and the Lara Estate at 57 per cent. less. The arguments which have been-‘ adduced from this side have proved conclusively, although perhaps not to the satisfaction of honorable senators opposite, that the principle laid down by the Government in this clause is fair, equitable, and just. I have much pleasure in supporting it.
– The Vice-President of the Executive Council seemed to think that this amendment is moved in the wrong place. But I venture to think that, inasmuch as the taxpayer has to make his return and give his own valuation, now is the time to show that he will be justified in putting in the local assessment as a proof that he has not undervalued with intent to deceive. That is practically the effect of the amendment. Surely the local assessor in various parts of the country may be presumed to have a fairly good knowledge of what property is worth. The Commissioner has to rely, I take it, on the representation of some person, as he cannot be supposed to have a knowledge of all the lands in this huge territory, and no doubt he will get the local assessments. If he finds that the local assessment agrees with the taxpayer’s valuation he will recognise that the taxpayer has not intentionally done anything to deceive, and should not be subject to the penalty of forfeiture.
– The amendment does not compel the Commissioner to take the local valuer’s assessment, but relieves the taxpayer of the penalty.
– That is all. I cannot see how anybody can object to the amendment ; very probably an owner will overvalue his land. I certainly would overvalue my land rather than run the risk of losing it, because I have a sentimental feeling for a property on which I have lived, and I presume that other senators entertain that feeling too. I hope that the Government’ will, even at this eleventh hour, withdraw the clause temporarily, so that they may be able to consider whether they cannot adopt my very reasonable suggestion. I feel that it is very hard for any man to lose his property simply because he has given the local assessment. What is the object of asking an owner to give both the unimproved value and the value of the improvements ? To any one who reads the Bill the object must be quite evident. I hold in my hand a letter from a gentleman who draws attention to the fact that possibly by this process the. Federal Government may in course of time become possessed of a great deal of the land in the States. To prevent this there ought to be a provision in the Bill that the Government should sell the land.
– That would not be a bad thing.
– I think it would be a very complicated position. Is the Minister willing to postpone the clause until the other clauses have been considered?
– Certainly not. It is not necessary to put in the amendment here. The honorable senator wants to have two shots, one here and one on clause 67.
– We are told .that the taxpayer has the right of appeal. To whom? To the High Court. If a man exercises the right of appeal he will be put to enormous expense, because he will have to brief a barrister. It is most ridiculous to require a man, because there is a difference of opinion regarding the value of his land, to go to the High Court, to employ a barrister, and to incur a lot of expense.
– Let him tell the truth, and he will not have to go.
– In many cases it will be an honest difference of opinion. In the letter I quoted, the writer seems to insinuate that -
In the ordinary execution of a judgment the Commonwealth may levy on the land or the grounds of a judgment debtor, but the Federal Government proposes, first, to decide that the taxpayer has undervalued, and, next, to absorb for itself the land without the competition of «i sheriff’s sale or an auction attempt at a valuation.
The whole thing is unbusinesslike, unfair, and such as does not do credit to either the Government or the Parliament.
– Senator Walker has just raised a point on which I think we should have some accurate information. The Land Board of Queensland, which determines the assessment of rents of leaseholds, has been in existence for ten or twelve years. It travels about the various districts, hears the witnesses on both sides on behalf of the Crown, and, in order to determine the assessments, frequently employs counsel. The expense of the cost of appeals is enormous. Although Crown leaseholders are not to be touched under the Bill, yet lessees from freeholders may have to appeal. Will they have to travel down to Melbourne to appeal, first against the Commissioner, and next to the High Court? In Queensland, in hundreds of cases, enormous expense has been incurred by the Crown through the incorrect decisions of the Land Board. In some cases lessees have had to incur the expense of thousands of pounds in order that their appeals might be heard, and in many cases, although successful, the cost of the appeal actually ruined the appellants. The only consolation which is offered to Senator Walker is, “ Oh, you have the right of appeal.” Will the freeholders and the lessees from freeholders in Western Australia and Queensland, I repeat, be required to travel to the High Court with a host of witnesses in order to prove their case if they should dare to exercise that right? All the support which Senator McGregor has received from his own side in support of the clause is an allegation, supported by honorable senators for Tasmania, that there are some land-holders in that State who are only typical of a great many others, being awful scoundrels. Because Tasmania is such a weak place, that it has never been able to get rid of its scoundrelly land-owners, why is the
Legislature to guard the rest of Australia against doing that which no State has done apparently, or of which there is no evidence except in one awful State? When the Government are hard pressed, who gets up to support their case? The representatives of Tasmania, who represent their State to be such an awful pest so far as social or land legislation is concerned, say that it must be dealt with specially. We have a right to consider something more than an alleged nest of scoundrels, or the alleged awful inefficiency of the Tasmanian Legislature, before we pass this clause.
-Colonel Sir ALBERT GOULD (New South Wales) [4.45].- I do not know that we should pay any regard to the statement made by certain Tasmanian senators, that there is a large amount of dishonesty in their State. That may or may not be the case. Even if the representatives of Tasmania assert that it is so. I take the liberty of doubting the accuracy of their statement. But what we have to consider is: “ What is a fair arid reasonable thing to do in the matter of these valuations?” A strong feeling exists that it is undesirable to ask land-owners to make their own valuations, seeing that they are subject to certain pains and penalties under this Bill. Even if they make an honest mistake, they may be mulcted in a fine of .£500.
– If they make an honest mistake, they will be honestly dealt with.
– If they undervalue their land to the extent of 25 per cent., it may even be forfeited to the Crown. That is one of ‘ the provisions of the measure. I do not know whether there is any later provision that they shall be immersed in boiling oil. We ought not to impose all sorts of penalties for honest mistakes.
– What about the Customs Act?
.-I have never held up the Customs Act as a measure upon which we should model our legislation.
– The honorable senator has never declaimed against it.
.- I have. I say that if this law is to be administered in the way that the Customs Act was administered at one time in our Federal history, it will be anything but a credit to Australia. I have never hesitated to denounce the way in which our Customs Act was administered, although it may have been administered in the way that was originally contemplated. This Bill will constitute a serious blot upon the escutcheon of Australia, so far as the honesty of its leading men are concerned. Is not the proposal of Senator Walker essentially a reasonable one? He says in effect, “Let the land-owners adopt the valuations which have already been made by State officials for the purposes of taxation.” If the Government think that those valuations are inaccurate, it will be perfectly competent for them to make their own valuations, so that they are absolutely protected against the possibility of fraud. In that case, the land-owner should have the right of appeal.
– What about the cost of the appeal ?
– If a man undervalues his property, and that fact is sustained upon appeal, naturally he will be required to pay the costs, just as every unsuccessful litigant is required to pay them. But he will be free from the brand of dishonesty, and from the penalties which are imposed under this Bill. I recognise the difficulty under which any honorable senator labours in submitting an amendment which does not meet with the approval of the Government. At the same time it is our obvious duty, where we think that the Bill will operate harshly, to raise our voices in protest against it.
– The Government will not accept any amendment.
– No; but at least we shall have the satisfaction of knowing that in attempting to right a wrong, we have done our duty.
– - 1 wish briefly to place upon record a few figures as a protest against the statements of Senator Gould, who spoke so eloquently about boiling oil. I desire to let Senators Gould and Walker know the class of persons whom they are endeavouring to protect under this proposal. I shall be quite satisfied to place the facts upon record practically without comment. In Victoria, the highest value placed upon first class land for State taxation is £4 per acre.
– Under the Act to which the honorable senator refers the grazing value of the land alone is taken into consideration.
– Senator Walker does not propose to accept the State valuation as final.
– In Victoria, I repeat, the highest value placed upon first class land for State taxation purposes is £4 per acre. Other lands are valued for similar purposes at £3, £2, and £1 per acre. Yet we know that in this State we have land that is worth £100 per acre. Indeed, there are large tracts which are valued at -^60 per acre.
– Very large?
– Yes. Just imagine a man who possesses land which is worth £60 per acre sending in to the Commissioner the State valuation of £4 or £3 per acre.
– lt would not be accepted.
– Exactly. It would be too ridiculous to contemplate for a moment. When the Victorian Government desired to purchase some estates for closer settlement, what was it required to pay for them? The figures which I am about to quote are those of the State Treasurer, Mr. Watt. The Victorian Government purchased twenty-seven estates, comprising 158,559 acres, for which it paid £1,169,151. Yet the local valuation of these estates was only £753,115. In other words, they were valued at 55 per cent, less than the price at which the State was able to purchase them. Just imagine the Commonwealth, which is about to embark upon a policy of land values taxation, being prepared to accept such valuations.
– But the local valuations were on the basis of the unimproved value- of the land, whereas the State purchased upon its improved value. That is a fact which ought to be stated.
– When the State decided to acquire these properties, it had to take the improvements with them. But that circumstance does not blind me to the fact that men who were so incompetent that, upon the basis of its improvements, they could not value land within 55 per cent, of its actual value, are not likely to be much nearer the mark if they are asked to arrive at its’ unimproved value. In connexion with all our local governing bodies there has been a system of undervaluation. But this is a double-edged weapon. In Melbourne and the suburbs properties are overvalued by the local authorities. In my own district the valuations are frequently £200, £150, or £100 higher than the price at which the properties can be purchased. Seeing that the local authorities are not competent to value properties within 55 per cent. of their actual value, it is time that we asked the land-owners to value their own estates, and to accept responsibility for their valuations.
– I think that the honorable senator is unconsciously misleading the Committee to some extent. A very stupid Act is in operation in Victoria in regard to the first class land of which he spoke. It provides that land which will carry four sheep to the acre shall be valued at so much, that land which will carry two sheep to the acre shall be valued at so much, and that land which will carry one sheep to the acre shall be valued at so much.
– That has nothing whatever to do with the cases which he has cited.
– The honorable senator has pointed out how ridiculous it would be to accept the State valuations for land tax purposes. It is absurd to quote Victoria and Victorian valuations in reference to this proposed land tax, inasmuch as there is no unimproved land values taxation in this State. To quote grazing values in Victoria as a basis is ridiculous. They are limited by the Victorian Act itself, not to the actual value of the land, but to how many sheep per acre it will carry. With regard to the valuation of country land, referred to by Senator E. J. Russell, the fact that so many thousand acres were valued at 50 per cent. less than the purchase price is probably due to the circumstance that throughout Victoria there is no rule for valuing land. In some shires the rates levied by the municipal bodies are extremely low. They do not trouble about valuations to any extent. They simply value the land so as to bring in a certain amount of revenue to enable them to carry on their works. In some shires, the values are made high and the rates low, while in other shires the values are low and the rates high. But valuations in Victoria cannot be taken as a basis for valuations under this land tax. In other States, where there is unimproved land taxation, the case is different. The argument brings us back to the one point as to how much better it would be for the Government to have their own valuators to value and assess, and call upon the people to pay what is due from them.
Question -That the words proposed to be added be added (Senator Walker’s amendment) - put. The Committee divided.
Majority … … 8
Question so resolved in the negative.
Clause agreed to.
Clause 15 agreed to.
Clause 16 (Valuations of land).
– I draw attention to the fact that the marginal note to this clause contains a reference to the New Zealand Act. But there is an important omission. We have been reminded Over and over again that marginal notes have no binding effect, but, at the same time, they ought to be an honest guide to us. The New Zealand Act contains the following proviso -
Provided that not less than two years shall elapse between the making of such assessment to be prepared for the purpose of ascertaining the amount upon which the tax shall be levied, and such assessment shall be entered in the assessment roll.
The effect of that is to make the assessment remain for two years.
– Why should it?
– I do not know ; but when we are directed by the marginal note to the New Zealand Act, we do not expect to find such an important omission from it.
– The honorable senator has overlooked clause 14.
– I see nothing in clause 14 which covers the same ground as the New Zealand proviso does. The omission is very important. As clause 16 now stands, the assessment may be varied every year. Will the Vice-President of the Executive Council read the New Zealand proviso ?
– Read it yourself !
– The reply of the Minister illustrates the difficulties under which we are discussing this Bill. I have brought forward an important point in a courteous manner, and because the Opposition happen to be numerically inferior, the Minister treats my remarks in a discourteous and brusque fashion. I have drawn attention to the fact that an important provision of the New Zealand Act has been cut out.
– Who said it was not?
– The marginal note implies that it was not.
– Why was the proviso cut out? I have drawn attention to an important matter. Senator Needham has not helped the Committee, but I hope the Vice-President of the Executive Council will be able to do so.
– I am very sorry if my abrupt manner ruffled the feelings of Senator St. Ledger. I have no intention to do or say anything which would disturb his equilibrium, and I know it is almost impossible to do it. But when the honorable senator gets up and in such a peremptory manner demands an explanation from the VicePresident of the Executive Council, I resent it. I say it is not courteous to the Government or respectful to myself, and seeing that I have added the dignity of Senator Sayers to my own, I think I deserve different treatment. Speaking seriously, I wish to point out that the honorable senator is making a great mistake. There is nothing in the marginal note to this clause to indicate that it is a copy of a similar provision in the New Zealand Act.
– I admit that.
– Then why did the honorable senator suggest that because of the marginal note there should be nothing left out of this clause which is to be found in the New Zealand Act? Senator Needham was perfectly right in his contention, because if a taxpayer sends in a return for the first year, it will not be necessary for him in the second or third year to make a similar return, but only a return showing any variation in the value of his estate. As that is provided for by clause 14, it is unnecessary that it should be provided for in this clause, and therefore unnecessary that this clause should be a copy of the similar provision in the New Zealand Act. If Senator St. Ledger finds that the marginal note is Cf. NZ., it means that the clause is to be compared with a similar clause in the New Zealand Act, and if the marginal note be NZ the clause is a copy of the similar provision in the New Zealand Act.
– I hope the honorable senator is right in his contention, but I do not read clauses 14 and 16 in the way he does. I am unable to perceive that these two clauses read together will carry out what is provided for in section 17 of the New Zealand Act. The Government are out-Heroding Herod in this matter. Notwithstanding the honorable senator’s explanation, I still say that the Government have departed from the New Zealand provision, which affords some protection not afforded by this Bill.
Clause agreed to.
Clause 17 -
From the returns and valuations so made, if any, and from any other information in his possession, or from any one or more of those sources, and whether any return has been furnished or not, the Commissioner shall cause assessmentsto be made and entered in assessment registers in the prescribed manner, for the purpose of ascertaining the amount upon which land tax shall be levied.
– I have a merely formal amendment to move upon this clause. It will be found that provision is made for “assessment registers “ in many of the clauses of this Bill. It has been considered that there might be some other method of keeping accounts in connexion with this land values taxation other than by assessment registers. Loose registers or cards might be adopted in some cases. I move -
That the words “ and entered in assessment registers in the prescribed manner” be left out.
The omission of these words will not prevent the Commissioner keeping assessment registers, but will enable him to adopt any improved system of keeping accounts which he thinks necessary.
– I believe the amendment will be an improvement upon the clause as it stands, but I direct attention to what is involved in the clause. It provides that -
From the returns and valuations so made, if any, and from any other information in his possession, or from any one or more of those sources, and whether any return has been furnished or not -
I stop there and I say that the words appearing after the words “ if any “ are not to be found in the New Zealand Act.
– We do not mind that.
– The words to which I refer give remarkably wide powers to the Commissioner in the assessment of this tax which are not provided for in the New Zealand Act. Surely we are entitled to some reason why these drastic powers are being asked for the Commissioner? I admit . that in Income Tax Acts drastic powers are given to the Commissioners, for reasons which do not apply in the case of a land tax. I venture to say that the insertion of the words to which I have referred make this measure inquisitorial to an awful extent. There must have been a reason in the minds of the legal advisers of the Government for the departure from the New Zealand provision to which I have referred, and I should like the Committee to be told what it was.
– I cannot refuse to give information so courteously requested. Senator St. Ledger must know”” that the Bill provides for returns and valuations by the taxpayer, and if no such returns or valuations are sent in, the Commissioner is given certain powers to make an assessment himself. Under this clause the Commissioner is given power to make assessments from all sources, and to register those assessments. Whether the words to which the honorable senator has referred are to be found in the New Zealand Act is a matter of no consequence to the Government, who think their insertion in this clause is necessary.
– I accept the honorable senator’s explanation. It is sufficient for present purposes. I merely desired to direct attention to the almost unrestricted powers given to the Commissioner of Land Tax under this Bill.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 18 -
any taxpayer or person makes default - the Commissioner may make and enter an assessment of the amount on which in his judgment land tax ought to be levied, and the taxpayer or person shall be liable to land tax thereon, excepting so far as he establishes, on appeal, that the assessment is excessive.
Amendment (by Senator McGregor) proposed -
That the words “and enter” be left out.
– In connexion with the returns on which the assessment is to be made, I should like to know whether, if a land-owner believes that the unimproved value of his land is £,100 or £200 less than ,£5,000, it will be necessary for him to send in any return ?
– On a previous occasion, I made an explanation. I stated that every person whose estate is over £5,000, unimproved value, is expected to send in a return. If his estate be under that value, he may or may not send in a return ; but if he be requested by the Commissioner to do so he must comply with the request. I explained further that if the Commissioner had a reasonable suspicion that a person ought to be a taxpayer, he might request him to furnish a return ; otherwise, it need not be done.
– I asked the question because I can see that if a man’s valuation comes close to 25 per cent, less than the true value, he will run a serious danger of having his land forfeited.
– If he sends in no return, he will be on the safe side.
– Yes. It will be safer for persons who own, say, £4,700 worth of land, unimproved value, to send in a return. If people know that they have to send in a return, there will be less danger of the land being forfeited.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 19 (Alterations of assessment).
– As this measure is drawn on the lines of the New Zealand Act, I desire to draw attention to the fact that the word ‘ income ‘ ‘ is omitted from paragraph a of sub-clause 2, which reads -
For the purpose of this section the Commissioner may, inter alia -
place on or remove from an assessment register the name of any person, or the particulars or valuation of any land.
– Is it not possible to go ahead of New Zealand?
– That is not what the Bill is doing. I cannot understand why the word “income” was not inserted in this clause, because, in New Zealand, those who are paying taxation on incomes derived from land are exempt. That omission should bring home to honorable senators the drastic character of this legislation. Not the slightest differentiation is made between persons who draw incomes from land, and those who draw incomes from other sources. The Government cut out of this provision the very word which might have mitigated the incidence of the tax.
Clause consequentially amended, and agreed- to.
Clause 20 (Alterations of assessments in certain cases).
Senator ST. LEDGER (Queensland) [5-3°1- - Sub-clause 1 reads -
Where the Commissioner has assessed any person upon the return sent in by him, without making or obtaining any independent valuation, the Commissioner, so soon thereafter as is conveniently practicable, but not after the expiration of two years from the date of the assessment, if from valuations made or obtained by him, or other information in his possession, he finds that the assessment ought to have been for a greater amount, may alter the assessment accordingly, as from the date when the assessment was made.
I do not think that these words ought to appear in the clause, because they give an enormous drastic power to the Commissioner of Land Tax. It is another instance of the drastic powers which are given to the officer. I cannot find, in any Act, not even in an Income Tax Act, words enabling an officer to impose a tax on information which may be in his possession. It is the widest departure from land tax or income tax legislation that we can find. I have drawn attention to the provision, in order to point out to the Committee what wide, and to my mind, dangerous powers are given to the Commissioner. As regards the determination of valuations, and the infliction of penalties for undervaluation, honorable senators opposite are practically creating a land Cesar
Clause agreed to.
Clauses 21 to 23 consequentially amended, and agreed to.
Clause 24 (Owner of freehold).
Amendment (by Senator McGregor) proposed -
That the following new sub-clause be added : - “ (2.) In this section ‘ tenant for life ‘ includes -
a tenant for the life of another ;
a tenant for his own or any other life whose estate is liable to cease in any event during that life;
a person entitled to the income of land under a trust or direction for payment thereof to him during his own or any other life.”
– Some important considerations may arise from this amendment”. It is probably taken from the Imperial Settled Lands Act, which has been adopted by the various States of the Commonwealth. I want to know, from Senator McGregor, why the original provision is being made a little clearer. I am inclined to think that, on the whole, the amendment is better than the original provision; but, as usual, it was moved without a single reason being offered in support of it.
– Whatever reason is given the honorable senator is not satisfied.
– I am giving a reason.
– What is it ?
– I am pointing out that the amendment follows more strictly the lines of the Imperial Settled Lands Act. Every time we come forward to help the Government, we are welcomed ; but when we ask for information from them, we get none. I am inclined to think that the amendment is an improvement. But this is not the way in which the Committee ought to be treated.
– I think that Senator St. Ledger is making a very great mistake. The object of this amendment is only to make clearer what is meant by “ tenant for life.”
– I said so.
– Is nothing to be left to the intelligence of the Opposition?’ Is every slight amendment to be the subject of a lengthy explanation? The purpose of this amendment is so clear that even Senator St. Ledger accepted it as an improvement.
– It is only lawyers who can see that.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 25 agreed to.
Clause 26 (Lessees of land leased after commencement of Act).
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [5.45].- This strikes me as being rather an important clause, I understand that under it the owner of a leasehold estate will be primarily liable to the tax. Although he will have power to deduct certain moneys from the tax payable by him in respect of the land, he will, nevertheless, be liable, in the first instance, to the full amount of the tax. The clause does not appear to make any provision in regard to the length of the lease which he holds. In my judgment, where a lessee holds a lease for only a limited period, the owner of the land should be regarded as the taxpayer. Otherwise, the leaseholder will be obliged to furnish all the returns for which provision is made in the Bill ; and, in case of failure to do so, will be subject to all the penalties which it imposes. Is that the intention of the clause?
– During the last election campaign, the Prime Minister had occasion to address numerous meetings throughout his constituency, which comprises a large number of settlers who are purchasing land from the Crown. After they have paid certain money and fulfilled certain conditions, their leaseholds will become freeholds. The distinct impression which the Prime Minister left upon the minds of these settlers was that, notwithstanding that they will ultimately become the purchasers of the freeholds from the Crown, they would not be touched by this tax. I wish to know if that is so.
– They will be eaten up.
– They have never contemplated that; and I challenge the honorable senator to make that statement in the Wide Bay district. From the utterances of the Prime Minister in that district, these people were induced to believe that they would be exempt fromthe tax and it was that circumstance which led them to vote for him.
– They will vote for him next time.
– Over and over again these leaseholders were assured that they would not be touched. The people of Australia desire to gradually convert into freeholds the leaseholds which they hold from the Crown, without any restriction whatever. 1 repeat that every one of the leaseholders in the Wide Bay district, the unimproved value of whose holdings in a few years will be worth more than £5,000, were led to believe that they would be immune from the tax ; whereas it is now quite clear that, as soon as their estates aggregate that value, they will be taxed.
– I do not think there is anything to be alarmed about in this clause. Its meaning is perfectly plain. Any leaseholder, with a right of purchase, is required to fulfil certain conditions. When he has done so, he becomes the owner of the land, apart from the question of whether or not the whole of the purchase money has been paid. As far as Senator St. Ledger’s statement of the position of the lessees in the Wide Bay district is concerned, I do not think that anybody need entertain any serious misgiving, because very few of the estates held by leaseholders there will exceed£5,000 of unimproved value. When, as the result of Commonwealth expansion, their estates do exceed that value, I think they will be very glad to pay the tax.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [5.55].- The Vice-President of the Executive Council has not replied to the question which I put to him.I recognise that this clause, and two or three others, are of a highly technical character, and, therefore, I do not feel justified in submitting an amendment to the proposals of the Government. It is a matter which should be dealt with by the legal members of the Ministry. But it is a great pity that they are not in a position to give a clear and definite explanation of the meaning of the clause.
– I now intend to quote the utterances of the Prime Minister in regard to the position which he said would be occupied by the lessees in the Wide Bay district. The quotations are extracted from the Gympie Truth. That journal, of 18th March, says -
Mr. Fisher at Kilkivan (it is just as well to repeat it) was asked if he were in favour of taxing leasehold land, and he said “No.” He was also asked if he would exempt from income tax the produce of land that paid an unimproved land tax, and he said “ Yes.” If he had made any other reply it would have sounded as if he had departed from his Labour teaching and principles.
Now, the leaseholders from the Crown are to be taxed, and he must have known that they would be at the time. If the extract which I have read is an accurate report of his utterances, every leaseholder in the district was misinformed.
– “ If.”
– Here is another extract from the same journal’s report of Mr. Fisher’s second Gympie speech, -which was delivered on 19th March last -
He had been charged with hiding some part of the land tax proposals when making his first speech. At Kilkivan he had been asked if he proposed to tax leaseholds, and he said “ No.” He had been asked did he favour duplicate taxes, and he said “ No.” The Labour Conferences had decided that the man who pays a tax on land values must not pay an income tax. There was no concealment, because if they had read the official reports of the Labour Conferences his critics would have seen that that was the policy of the Labour party in all the States. He would be delighted if he had not made the point clear to do so if any person was still in doubt.
Yet these very leaseholders, who are in course of acquiring freeholds from the Crown, are now to be taxed.
– When they have fulfilled the conditions of the purchase.
– Neither to the Gympie Miner, which was opposed to him, nor to the Gym-pie Truth, which was in favour of him, did the Prime Minister give the slightest indication that these leaseholders, while they are converting their leaseholds into freeholds, will be subject to the tax. It is quite possible that, under the circumstances, those leaseholds which are in process of conversion into freeholds may not be subject to the tax. But that does not affect my point. The leaseholders were led to believe that they would not be touched by the Bill. How can the Government say that if the natural conditions are fulfilled those leaseholds may not in time be worth an immense amount of money? These persons were certainly under the impression that they were to be exempt from the operation of the tax. Now they know they are not. There may not be many of them. Indeed, none of them may be affected to-day. But if Senator Stewart and some other members of the Labour party get into power these persons certainly will be touched.
– It will be God help them then !
– I welcome that interjection, which is remarkably candid. “ “ It will be God help them then.” We know as a matter of political history that there are in the Labour party many Senator Stewarts, who are complaining about the Government and wish to force the pace. That is the danger we have to guard against. There is an extraordinary discrepancy between the statement of the Prime Minister at Gympie - where he promised that the Labour Government would take into consideration the amount which these men are paying in income tax, or which they may be called upon to pay - and the provisions of this Bill . When this was pointed out by the opponents of the Labour party at the time, it was said that the exemption of £5,000 would prevent these leases from being touched, because they were not within measurable distance of the limit. Consequently they were lulled into security for the time being.
– That was the bait.
– Of course it was. The Prime Minister purchased his seat by that promise.
– I do not believe there is a man in the Prime Minister’s’ district who is affected.
– But not even a Prime Minister is immune from the consequences of a wilful deception of the people. If the Prime Minister knew the bearing of his remarks, and at the same time knew what kind of a Bill he proposed to bring before Parliament, his statement was a deception.
– The Bill does not touch any of those to whom the Prime Minister referred.
– I have admitted that it does not touch them for the present. But while they may not be touched to-day, they have to face the probability of taxation to-morrow. The purport of the Prime Minister’s remarks was nothing else than that those to whom he was referring would be exempt. Of course I know that the defenders of that honorable gentleman hide behind the hypothetical £5,000 exemption. They can spike my guns for the time being in that way, but there is nothing to show that that exemption will express the mind of the Labour party in the future.
– It is the party’s exemption.
– But who can guarantee the permanence of it?
– We can guarantee the exemption, certainly.
– Can the honorable senator guarantee it for twenty-four hours ?
– “We certainly can guarantee the £5.000 exemption.
– For how long ?
– For ever.
– I hope it will be so, but it is certain that many members of the Labour party are chafing at that limit. The speech of the Prime Minister was remarkably clever and dexterous for the purpose of deluding the people of his district. But these leaseholders may rely upon it that in the long run they will not escape.
Clause agreed to.
Clause 27 - (j.) The owner of a freehold estate in land who has before the commencement of this Act entered into an agreement to make or granted a lease of the land shall, for the purpose of his assessment under this Act, be entitled, during the currency of the lease, to have the unimproved value (if any) of the lease deducted from the unimproved value of the land. (a.) The owner of a leasehold estate in land, under a lease made before the commencement of this Act, shall be deemed to be, in respect of the land, the owner of land of an unimproved value equal to the unimproved value (if any) of his estate; but if he has, before the commencement of this Act, granted a lease of the land, he shall be entitled, during the currency of that lease, to have the unimproved value (if any) of that lease deducted from the unimproved value of his estate : (3.) For the purposes of this section -
– I have .given notice of an amendment -
That the words “ The owner of a freehold estate in land who has before the commencement of this Act entered into an agreement to make or grant a lease of the land,” be left out, with a view to insert in lieu thereof the words “ where before the commencement of this Act a lease has been granted out of the freehold estate or a valid contract to grant such lease has been made the person for the time being entitled to the reversion of the land so leased or contracted to be leased.”
This is a drafting amendment, but if the Government are not inclined to accept it I shall not press it.
– I cannot see the full effect of Senator Walker’s suggested amendment. I understand that the intention of it is to enable some persons to get out of the payment of a tax who otherwise would pay. Consequently 1 cannot accept it.
– Am I to understand that the VicePresident of the Executive Council is willing to postpone the clause in order that he may get advice as to the effect of the amendment ? So far as I know, its only object is to make the Bill carry out more effectively the Government policy in the matter. Land may be owned by a company as well as by a private individual. I shall not press the amendment if the honorable senator does not see his way to accept it or to postpone the clause, but I think he would do well to take time to consider it.
– I ask honorable senators to allow the clause to pass, and I can assure Senator Walker that the amendment he has suggested will be looked into. It looks rather suspicious to me at the present time.
– Surely the honorable senator does not suspect anything coming from Senator Walker?
– If it came from Senator Walker it would be all right, but it was not Senator Walker who drafted the amendment. If it is found, upon investigation, that it would be well to accept the proposed amendment, the clause can be recommitted for the purpose.
– Yesterday, I drew attention to an omission by the other branch of the Legislature to make a consequential amendment in this clause, which became necessary upon the acceptance, at the instance of Mr. G. B. Edwards, of an amendment to provide that the clause should take effect, not merely where a lease had been granted, but where an agreement to create a lease was in existence.
– The Vice-President of the Executive Council has given notice of amendments to insert in one part of the clause the words “ or agreed to be made,” and in another the words “or agreed to grant.”
– I overlooked those amendments. I am glad to see that Ministers have taken notice of the necessity for the consequential amendment of this clause. I was asked to draw attention to the matter here.
Amendment (by Senator McGregor) agreed to -
That after the word “ made,” line 2, of subclause 2, the words “ or agreed to be made “ be inserted.
Amendment (by Senator McGregor) proposed -
That after the word “ granted,” sub-clause 2, the words “or agreed to grant” be inserted.
– I shall not oppose this amendment, but I suggest to the Vice-President of the Executive Council that throughout the clause it is desirable to use the same words where the same thing is intended. In the first portion of this clause the words used are not “ granted or agreed to grant,” but “ entered into an agreement to make.” Is it not desirable that the same expression should be used in both parts of the clause ? Sub-clause 1 reads - has before the commencement of this Act entered into an agreement to make or granted a lease of the land - and so on. The amendment the honorable senator proposes would, I admit, mean the same thing, but I am urging that we should use the same words to express the same thing in different parts of the clause.
– I think the amendment I have proposed would be in harmony with the previous amendment made, and with this portion of the clause. As it would mean the same thing as the words which Senator Millen has suggested, I think no objection can be raised to the amendment. It has been considered by the draftsman, and I think I am right in following his advice.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [6.23].- I can quite understand the honorable senator’s desire to adhere to the form of words suggested by the draftsman, but I should like to know whether the draftsman has considered the amendment in the light of the previous amendment made, and the words used to express the same thing in the previous portion of the clause. It is a very wise thing in the framing of an Act of Parliament to adopt in every case the same expression, to give effect to the same purpose. Such a practice is of great assistance to the Courts in the interpretation of the law. If the same form of words is not used in a clause to express the same thing, there is the presumption that the same thing is not meant in each case. If
Senator McGregor were to consult those who are familiar with the procedure in our Courts, he would learn how necessary it is in legislation in every case to adopt the same form of words to express the same thing.
Sitting suspended from 6.27 to 8 p.m.
– I move -
That, in the opinion of this Senate, it is advisable that the Government should take into consideration the formulation and passing into law of a Superannuation Scheme for the Federal Public Service, the contributions to which shall be given by the members of the Public Service and the Federal Government in such proportions as may be determined.
I desire to acknowledge the courtesy of the Vice-President of the Executive Council in affording me an opportunity to launch this subject to-night. It is one of great importance, and one which, while it may not loom very largely in the public eye at present, will undoubtedly do so a little later. As we all know the meaning of superannuation, the term requires no explanation. There comes a time to every one when he gets to the superannuation stage, and we ought to have a fellow feeling with all our brothers and sisters who reach that stage, because what happens to them may happen to us. By sickness, injury, infirmity, or the attainment of the age when, according to the regulations of the Public Service, work has to cease and a man has to retire to idleness, the right to superannuation accrues. A superannuation is somewhat different from a pension. While, in one sense, it is a pension, in reality it is not, because a pension, as generally understood, is a payment from a fund provided by others. It comes from outside the exertions of men or women for the support of themselves or their families. That is where it is entirely given by a Government or a public body or private employer. But a superannuation comes from a fund of which the persons benefiting contribute a portion, and which is subsidized by the Government, the corporation, or other public body, or the private employer. This proposed superannuation fund is intended to be for the public servants of the Commonwealth. When I gave notice of this proposal, I had no idea that the question of establishing a superannuation fund had been under discussion. It was suggested to me some time ago, and until the beginning of this week I was quite ignorant of the fact that there had been a good deal of talk about it, and that some steps had been taken towards the formulation of a scheme. We all recognise that the administration of the laws depends very largely on the efficiency of the Public Service. We may enact the best of laws ; but if they are not faithfully administered by the servants of the Commonwealth, then they fail in their object. The good government of the country depends very largely upon the good will, industry, and loyalty of the Public Service. At one time, the position of the public servant was regarded largely as a sinecure. And when a man was rather dilatory - that is, slow or prefunctory in his work - he was dubbed as doing “ the Government stroke.” I think that that time has passed away. We do not hear that expression used now, because there has been a great development in the service, and the use of such an expression to-day would not be warranted by the facts. At one time, positions under the Government came largely by favour. I remember that, prior to the enactment of the Public Service Act in Victoria, the lives of members of Parliament and Ministers were made a burden to them by reason of the continual pestering to which they were subjected by persons desirous of obtaining positions. Many men were put into the Public Service who were not fit for their positions, and so the Public Service suffered. But with the bringing in of the Public Service Act, and the holding of competitive examinations, entrance is very much harder to secure, and higher attainments are necessary in those who would enter. Not only is a higher standard of education, intellectual development, and energy required in regard to the Public Service, but advancement largely depends upon proficiency. We desire to attract to the Public Service the best men and women we can get. We wish to have the best service from the best people. I have no doubt that the Departments are fairly and justly administered. It is, of course, very difficult to do absolute justice to a large body of men and women who cannot come into close contact with the Public Service Commissioner or those who are placed above their heads. But the prizes are few ; there is not much room at the top. Large emoluments and honorable positions are not’ won through influence, and fall to but very few. The work, of course, is largely routine. I have no doubt that in many branches of the service, and in many of the grades and classes, there are many able men and women whose talents are overlooked, simply because it would be impossible in a service which must be very largely governed by routine to take notice of every undividual case, as can be done in private employment. The remuneration is also largely routine. It goes up by successive grades, and men cannot step out. The greatest ability which may be shown would not, perhaps, push any one forward above his fellows, because to do so would have in it an element of injustice. While injustice might be done in keeping back men, still greater injustice might be done by pushing men forward, and others out of the road. So there is very little opportunity for men to become wealthy. In fact, one may say that unless a man has capital, or belongs to a family with it, he has not much opportunity to become wealthy ; indeed, scarcely an opportunity to even obtain a competency. Given health, there is certainly a sure living, but not very much more. No person in the Public Service can add to his income by outside work. That is very properly prohibited by the regulations. The Government expect from their officers their best service, and they must give undivided service and undivided loyalty. With a large staff, it is not easy to be just, and there must be inequality of recognition. We are all thankful that at present influence is at a minimum, and influence, I suppose, is now practically an unknown quantity , in the service. There are, I believe, some increments and other advantages which come to the more deserving, but these have to be earned, and cannot be obtained by the use of mere influence alone. It may be desirable to ascertain the strength of the Public Service. The Commonwealth employs permanently 12,702 males and 1,284 females, making a total of 13,986 persons. The salaries paid are as follow : - Not exceeding £52, 2,187 males and 424 females, total 2,611 ; from £53 to £110, 2,403 males and 435 females, total 2,838 ; from £111 to £156, 3,244 males and 188 females, total 3,432 ; from £157 to £200, 2,829 ma-les and 224 females, total 3,053 ; from £201 to £300, 1,468 males and 13 females, total 1,481 ; from £301 to £350, 227 males ; from £351 to £400, 190 males; from £401 to £500, 91 males; from £501 to £600, 33 males ; from £601 to £700, 10 males; from £701 to £800, 6 males ; from £801 to £900, 8 males j from £901 to £1,000, 5 males ; and over £1,000, 1 male. It will be seen that in the Public Service there is not very much room at the top. It contains a number of classes. The Administrative Division is not divided into classes. But the Professional Division contains five classes, the Clerical Division five classes, and the General Division twelve grades. The following table shows the number of each sex in each class : -
The prizes are not very numerous, especially for women. The retiring age, unless there is a special reason why an officer should be retained, is sixty years. I have never been very strongly in favour of retiring public servants at that age, because many men are then in the zenith of their powers who possess experience, age, and intellectual vigour sufficient to enable them to discharge their duties for many years. However, that is the law, and unless some special reason can be assigned for retaining officers in the service they have to retire at that age.
– If we did not fix an arbitrary age at which public servants must retire, favouritism would creep in.
– There are elements of injustice upon both sides. But our duty is to secure the greatest good to the greatest number. Now, a lifetime spent in the Public Service does not fit a man or woman for any other occupation. There are very few things to which those who have devoted their lives to the service of the State can turn their hands. If they have to retire it is not fair that they should be forced into competition with others, because even if they have only a small retiring allowance coming to them, that circumstance gives them a decided advantage over ordinary members of the outside public. Then there are cases in which, by reason of infirmity or some physical defect, public officers ought to be retired. But, as a matter of fact, they are frequently retained when they are not rendering the State that service which they should be rendering it. But it would be an inhuman thing to turn them out of the service, because they would have nothing upon which to live, and perhaps nowhere to go. If they were entitled to a retiring allowance they would be able to enter, upon some light occupation in the country, where they might regain health and strength. In very few cases, however, can the savings of public servants amount to very much when they come to the end of their term Why? Because they have a certain position to maintain. They have to dress well, and to keep their wives and families in comfort. They have also to educate their children to fit them for the battle of life, and like everybody else they must have their pleasures. Over the future of many officers in our Public Service there is always a pall hanging. That pall hangs over them chiefly, because of those who are dependent upon them. If they could know that their dear ones would always have a roof over their heads, and bread and butter, it would put heart into them in the discharge of their duties. I do not think that “so many people in this world seek wealth for. the mere sake of wealth. They seek it rather for the sake of those who are dependent upon them. As Burns has said -
Not for to hide it in a hedge, Nor for a train-attendant ;
But for the glorious privilege Of being independent.
Independence, not for themselves, but for those who come after them, and now depend upon them. We cannot tell when death may come. The life assurance policy which public servants have to take out is a very modest one, and will not go very far in the matter of providing for their families .. Further, the Public Service does not present that opportunity for advancement which is presented to clever, able men and women in private employment. I would also point out that we ought to encourage our public servants to marry at a reasonably early age, because by doing so they become better citizens in every sense of the word. They dare not speculate for fear of disaster overtaking them, nor merely because they may lose their money, but because they may also lose their positions. The average pay of our public officers is, I think, about £140 or £150 Per annum. That is not a large amount for one to live upon, and to make provision for the future. Then we have to ask ourselves, “Is it fair to the general public, to the taxpayers of the country, that they should subsidize such a fund as my motion contemplates? Will they receive any return from it?!’ In my opinion it is fair. Why? Because it means that we shall get the best work out of our officers. Because we shall get rid of the unfit and infirm, who would otherwise remain in the service. The existence of such a fund will keep the minds of our public officers freer for the discharge of their duties, and as a result they will render better service to the State. It will encourage them in self-help and in thrift. The introduction of this system will not only encourage the service, but it will stimulate those outside to provide for their old age. It will also afford corporations which employ a large number of persons an example which they ought to copy. In that respect the State ought to set an example. The pension system in connexion with the Public Service is widespread, It has been adopted in no less than eighteen different countries. All these have some system under which their public servants receive an allowance when they retire from their official duties. Eight countries provide the full amount of the allowance which is paid out of the Consolidated Revenue. ‘ The other countries merely subsidize a fund, a large portion of which is subscribed by the officers themselves. Then there are countries which are considering this desirable reform. In the United States, almost from the inception of its constitution, it has been a case of “ spoils to the victor.” I saw an example of that when I was there last year. In some of the States the Republicans had just been displaced from office, and the Democrats had come into power. As a result, officers were being turned out of their positions, and new men and women were being installed in their places. No doubt that state of things has largely militated against the introduction of a superannuation system in that country. Now, however, that condition of affairs is being rapidly superseded. The countries which find all the money for pensions for their public servants are Great Britain, Germany, Russia, Italy, Denmark, Norway, Cape Colony, and India. Those which are subsidizing the contributions of the officers themselves are Canada, New Zealand, New South Wales, South Australia, France, Austria, Belgium, Holland, Portugal, and Natal. In many other countries the matter is receiving attention, and the system will probably be introduced. In Great Britain, where the Government find the whole of the money for these pensions, the retired officers receive it at sixty years of age, or upon injury or infirmity disabling them from performing their duties. The amount of compensation payable is based on the average salary which they received during their last three years of service. The Government pay them for each year of service one-sixtieth of the average of their salary for those years, the maximum being forty-sixtieths. This is paid from the Consolidated Revenue Fund. The pensions to the service there represent about 6 per cent, of the salaries and wages paid by the Government. I am not including the naval and military. In Great Britain no provision is made for the relatives of retired officers. The pension goes only to the man or woman when they retire from the service.
– Does it apply to post-office employes?
– Yes. This system, while expensive, has given the British Public Service a reputation for zeal and independence which is not surpassed in any part of the world. In New Zealand, a somewhat similar system was adopted in 1908. Previously a superannuation fund for teachers had been established there. It had proved successful, and consequently a scheme was brought forward for the Public Service.
– The South Australian superannuation scheme for teachers seems to be one of the most perfect schemes in the world.
– In New Zealand the Government are subsidizing a fund to the extent of £20,000 a year for three years, at the end of which time an actuarial examination will take place in order to insure that it shall be placed upon safe arid sound lines. In the early history of New South Wales and Victoria their public servants were imported, and these naturally brought with them the right to pensions which they had previously enjoyed. Thus a pensions system sprang up in those States. But it was found to be a very heavy burden upon their finances, and consequently, in 1884, Mr. Stuart brought forward fresh proposals in this connexion. But as far as I can gather, the system was not successful. The fund was insufficient to meet the claims upon it, and those claims were largely augmented when drastic retrenchment was resorted to. This retrenchment drove out of the service a large number of officers. Consequently the fund was so largely drawn upon that it fell practically into an insolvent condition. Since then it has been largely subsidized by the State in order to keep it solvent, and to keep faith with those contributing to it. So far as I can gather, the sum paid out amounts to £1,103,853, of which £937,388 has been contributed by the members of the service. So that, whatever proposals may be adopted by this Parliament, care should be taken to see that the scheme is placed upon a sound basis. In South Australia, Mr. Jenkins, the Chief Secretary, submitted proposals in 1902 under which all males in the service who were in receipt of £100 a year, and all females who were in receipt of ,£75 a year, were called upon to contribute to a superannuation fund. Previous to that a teachers’ superannuation fund had been established, which, as Senator St. Ledger has remarked, had proved very successful, and this fund proposed by Mr. Deakin had been guaranteed by the Government of that “State for fifteen years.
– It is one of the very best schemes in Australia.
– In Victoria, pensions were paid up to the year 1883, when the drain became so heavy that, by general consent, the system was ended, except, of course, that the claims of those public servants who «ere entitled to pensions under the existing law were recognised. Many of them are receiving pensions to this day. In Canada, the system that was adopted up to the year 1893 was that 2 per cent, of the salaries of officers was deducted for the purpose of a pension fund. From 1893 to 1898, 3
– The whole argument depends upon that.
– It is a matter for actuarial calculation. We cannot determine what the amount of the contribution should be.
– We ought to have the information before we assent to the motion.
– We need to enunciate the principle before we adopt a scheme.
– Mr. Knibbs is working out the details of a scheme.
– I learned recently that the Commonwealth Statistician has been working at the subject. Before Parliament arrives at any decision, we shall require to consider the whole of the details, which will have to be backed up by actuarial calculations. I do not propose to enter into such considerations to-night. It is not my province to do so, nor am I competent. The first point about which Par- liament should be careful is that the principles upon which any fund is established are absolutely sound. It should be seen to that a reasonable contribution is made by the members of the Public Service, the Government should make up a proper balance, and there should be a regular actuarial examination from time to time to insure that the fund is maintained in a sound condition. All these are matters of calculation and detail. We shall require experts to tell us whether any scheme proposed to be adopted is sound or not. It seems a pity that some such fund was not established when the Commonwealth was inaugurated some ten years ago, because we could not expect that all officers at present in the service would participate if a scheme were now launched. Those who came in would have to do so after an actuarial calculation was made as to what their contributions should be. They could not be forced to enter. But there could be a condition imposed that those entering the Commonwealth” Public Service in the future should contribute a proportion of their earnings to a fund from which, later on, they would benefit. The adoption of some such system as I am advocating to-night is spreading all over the world in connexion with Governments, municipalities, and large trading corporations. Wherever there is representative government, some such scheme is being taken up. In the United States there are seventy corporations which, during the last ten years, have adopted a pension system, and which make substantial contributions to the funds. These include no less than eighteen of the great railroads, which pay a total of £80,000,000 per annum in wages. The directors of these great corporations have realized the wisdom of subsidizing such funds. Other corporations, which have in their employment from 100,000 to 200,000 employes, have adopted a similar system. The movement is spreading rapidly throughout the United States. In Great Britain, also, I find -that the great carrying companies - the railroads and the shipping and banking corporations - together with municipal and other similar bodies, and many private employers, are adopting funds to provide for the old age and sickness of their employes. In Australia almost all the banks have sustentation or superannuation funds, to which their employes contribute, and which are backed up by contributions from the institutions themselves. Why do these various
Governments and institutions adopt the system? They are not doing so purely from motives of philanthropy or benevolence, but because they find that it pays in many ways. It pays in that they get a good class of men and women around them, attracted not only by the living which they are able to earn while they are fit to work, but by the prospects of having their future guaranteed when their working days are over. It pays in that the Governments and corporations which have adopted the system are thereby enabled to obtain good service from their employes. It pays also in the self-respect of the officers and servants, and in banishing that worry concerning the future which haunts so many people. It pays in the habits of thrift and forethought that it generates, and in the spirit of loyalty to the service throughout which it occasions. It pays in stimulating an affection for the service in which the persons so provided for are employed. This is one of the larger movements of the industrial world to-day. It is spreading rapidly. I trust that when this Parliament comes to consider the matter, the Government will be induced to take action, and to submit proposals of a definite character to the Legislature. I trust that Parliament will look favorably upon the proposition, and that the result will be that we shall establish a system that we shall be proud of, and be able to look upon as offering an example to other countries. As the result of it, I hope that the members of our Public Service will be induced to feel that when their working days are over they will have something to look forward to for themselves and for those who are dependent upon them in their old age.
– I rise to second the motion-
– This is not in accordance with the understanding. It was understood that the motion was simply to be moved to-night.
– I understood that the arrangement was that the subject was to be “launched”?
– The understanding was that Senator McColl’s motion was to be launched, and that, after he had spoken, I or some other honorable senator would move the adjournment of the debate.
Debate (on motion by Senator Vardon) adjourned.
In Committee (Consideration resumed from page 5276) :
– I desire, by leave, to withdraw the amendment which was under discussion at an earlier period of the sitting, with a view of submitting another amendment.
Amendment, by leave, withdrawn.
Amendment (by Senator McGregor) agreed to -
That after the word “ Act,” line 15, the words “entered into an agreement to make or” be inserted.
– In fulfilment of a promise I have made, I move -
That after the word “ values,” in paragraph (a) of sub-clause 3, the words “ the principle of ascertaining such value being the multiplication of the net annual rental by twenty.”
Since I gave notice of this amendment I have not been very well satisfied with it, and if the Vice-President of the Executive Council declines to accept it I shall not press it. I am inclined myself to think that it might be better to leave the matter to actuarial calculation. Many leases are not for long terms, and it would be absurd in the case of leases for a short term to adopt the principle proposed in the amendment.
Clause, as amended, agreed to.
Clause 28 -
Notwithstanding anything in the last two preceding sections, the owner of a leasehold estate under the laws of a State relating to the alienation or occupation of Crown lands (not being a perpetual lease without revaluation, or a lease with a right of purchase), shall not be liable to assessment or taxation in respect of the estate.
Amendment (by Senator McGregor) proposed -
That after the word “ lands,” line 4, the words “or relating to mining” be inserted.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [8.49].- Honorable senators will see that this provision exempts Crown leases from the operation of the two preceding clauses, and absolutely releases persons holding land under lease from the Crown from taxation under this measure. I could well understand the introduction of such a provision if the sole object of the Bill were to burst up freehold estates. But it seems to me out of place in a measure which we are told is also intended as a means of raising revenue. I wish to bring under the notice of the Committee the fact that in New South Wales a minute has been issued by the Government of the day to the effect that it is not their intention to sanction any further alienation of Crown lands except in fulfilment of contracts already entered into. It is proper, of course, that rights acquired under the existing law should be preserved. It will be seen that if this policy of non-alienation is adopted we can look for no additional revenue under this Bill from lands under occupation in New South Wales, because under this clause lands held under lease from the Crown are to be exempt from taxation. I quote the following statement, which I have taken from one of the newspapers, as showing the object of the present Government of New South Wales in issuing the minute to which I have referred -
The minute means that from the 1st January onward, while I do not propose to disturb any existing notices issued dealing with lands between now and the 1st January next, because I do not wish to put people to inconvenience, all living areas will be thrown open after 1st January only under the settlement leases provisions of the Act of 1895, which is the Act I intend working under.
So that after the 1st January the present Government of New South Wales will not open lands for settlement except under the settlement lease provision of the New South Wales Land Act of 1895. In New South Wales settlement and homestead leases are at present convertible into conditional purchases and ultimately into freeholds, when, of course, they would be liable to taxation under this measure ; but this power of conversion is to be taken away. Under the provisions of the New South Wales Land Act of 1895 to which reference is made, the Government may grant to an applicant whose application has been confirmed by the local Land Board, a settlement lease of the part applied for. The term of the lease is twentyeight years. The lease is to be in a prescribed form, and must contain provisions to secure the payment of rent, the value of improvements, for residence, and for fencing within a limited period. The farm must be kept clear of rabbits and other noxious” animals, and of scrub and noxious weeds. The lessee is not permitted to assign, or sublet his farm which may be forfeited for a breach of any of the conditions, and the Government may insert additional provisions and conditions in the lease if it considers it expedient in the public interest so to do. At the expiry of the full term of the lease, the selector is given tenant rights in the improvements on the property.
– How often is the rent to be appraised?
– The lessee pays an annual rental of1¼ per cent. on the capital value of the farm as fixed under the Act. I think there is some provision for periodical appraisement of rent. We may expect that, whenever opportunity serves, the policy proposed to be adopted by the present Government of New South Wales will be followed by representatives of the same political party in other States. Viewing this as a taxation measure, there is no reason why any class in the community deriving an income from land should be exempt from taxation. I have already pointed out that a very serious objection to the measure from my point of view is that it proposes to penalize a man who has become the owner of the fee-simple of land in order that he may establish a home, whilst less useful citizens, who are content with merely renting large areas of Crown lands, will be exempt from taxation. I think that is an entirely mistaken policy. If we are to consider the Bill merely as a measure intended to burst up large freehold estates, the inclusion of this clause might be defended, but the Government have placed themselves on the horns of a dilemma by contending that the measure is primarily intended to produce revenue. I think it will be admitted that the electors gave their approval only to the introduction of a measure for the bursting up of large estates, which they were led to believe are inimical to the best interests of the community. It is because of the peculiar double character of the Bill I have considered it well to make some observations of this character, leaving it to the Government and their supporters to say whether they think it desirable to pass this clause.
– I suppose that under this clause, it does not matter how large an area of land a man may hold under lease he will escape all taxation under this Bill.
– Though it costs just as much to protect him in the possession of his property as if he were a freeholder.
– That is so. He may not be making any better use of the land than a man who possesses a freehold. It seems to me that if the Government wished to deal fairly with all classes of the community, they would not insert a provision in this Bill to encourage the holding of big estates under lease when they propose to burst them up if they are held in feesimple.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 29 consequentially amended, and agreed to.
Clause 30 -
No deduction from the unimproved value of any land shall be allowed in respect of any mortgage to which the land is subject, or in respect of any unpaid purchase money ; and a mortgagor shall be assessed and liable for land tax as if he were the owner of an unencumbered estate.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [9.1].- This is a very important provision which subjects a mortgaged property to the payment of the full tax. It allows no exemption to the mortgagor. I believe that the New Zealand Act contains a similar provision; but the average amount of taxation is, if I mistake not, very much less in the Dominion than that which is proposed to be levied under this measure. Under the New South Wales Land and Income Tax Act, some consideration was given to a man whose property was mortgaged. If a man had given a mortgage and had paid his interest, the mortgagee had to make his return ; and on the assessment he paid his income tax. The mortgagor was then entitled to a deduction from the land tax which he had to pay equivalent to the income tax which the mortgagee had paid on the interest received. In that case, as theland tax was1d. in the £1, and the income tax 6d., substantial relief was given to the mortgagor. It may, of course, be said that we have no income tax; but the principle is exactly the same. If there were superadded an income tax, and a man had to pay income tax in respect of the interest he had received from his mortgagors, and the latter were then entitled to a refund of as much income tax as had been paid in respect of their portion of the interest, no one would raise the slightest objection. They would say that it was perfectly fair and right, because it was undesirable to tax twice on the one means from which the money was derived. If that be just in the case of a land tax and an income tax, it is equally just to give to a mortgagor the exemption to which he would be entitled if we had an income tax. The object of the law should be, not to make things unnecessarily harsh, beyond the harshness inevitable to this class of legislation generally, but to proceed on certain basic principles, and to recognise that if a man has a property worth, say, £20,000, and carrying a mortgage of £15,000, he should be in the position of a man who has an unmortgaged property worth £5,000. The mere fact of a man having purchased an expensive property and borrowed money to enable him to complete the payment, should not be a reason for placing upon his shoulders a tax which becomes harsh and difficult for him to meet ; and so penalize the enterprise which he may show in connexion with the acquisition of lands. It may be said that it would be very much better for an individual to pay at once the full purchase money ; but we know that, generally, a man who has some money available endeavours to obtain a larger property than it would purchase, because he feels that he is competent to make the property pay with ordinary management and decent seasons and opportunities. But this clause will destroy the incentive to a man to benefit himself and the community by a larger expenditure of money in the occupation of a larger area. The land has been occupied under the law for a great time, and the man has committed no wrong against the community - if he has committed a wrong at all, it may have been against himself in having taken in hand more than he could manage properly. Surely it is unreasonable for the Commonwealth to say to this individual, “ We are going to put on you what is practically double or treble or quadruple the tax which would be ordinarily charged,” because, in the case I cited, you will levy upon a man who actually owns only £5,000 worth of property a tax of 3d. in the £1, whilst a man who owns an unmortgaged property worth £5,000 will not have to pay any tax. It is not a far-fetched case which I have * cited, but one which is happening every day. Men are constantly purchasing properties on terms, and borrowing money to improve them and make them more valuable. This clause will tend to destroy enterprise amongst a class of men who are doing good. Whether they are acting as agriculturists or pastoralists, or are erecting buildings for the purpose of letting them to tenants, they are doing good work. It may be that, in certain cases, they will have an opportunity of recouping themselves by charging higher rentals to those who are unable or unprepared to build houses fora themselves. Again, the clause will penalize the users of offices in great cities, because they will be called upon to pay higher rents than they would otherwise be required to do. If Australia sees lit to impose a large tax upon agricultural and pastoral land, and the users are seeking to dispose of their wheat and wool in other portions of the world, they will not get one fraction more than they would get if we had no land tax, because they will have to contend with those who grow wheat and wool in other countries, and who possibly are not under similar obligations or disadvantages. It is not only wrong, but unjust, to tax the full value of a mortgaged property. It is treating persons in an unfair and’ unjust manner by adding to their burdens. If there were only an occasional case of this kind, the position might perhaps be different. Our aim should be to keep our country well to the fore, and to reward enterprise and energy. The reason why men come to a new country is because they think that it offers rewards for energy and enterprise not to be found elsewhere. What will be the result if we enact a policy of this kind? A man, instead of coming to Australia to enlarge his possessions and become more prosperous, will go to a country where the taxation is not so severe - for instance, to the Argentine. Not only shall we lose the help of men who otherwise might come here, but we shall force British subjects to become foreign subjects in order to meet the necessities of their case. It would be far better to pursue a course which would make Australia more attractive than any other country in the eyes of the world. Our legislation should be framed from that point of view. I ask honorable senators to pause and give this clause more consideration before determining to place this burden on the necks of a large number of persons. I appeal to them not to attempt to reconcile it to their consciences by saying, “ Oh, well, we have no income tax ! If we had an income tax,, we would make a man who received the interest contribute his share towards the revenue, and give to the mortgagor a consideration in respect of the income tax which had been paid on the amount he had paid in land tax. ‘ ‘ That is a principle of clear and abstract justice. I fail to realize how this clause managed to run the gantlet of the keen criticism bestowed on the measure in another place. Naturally, the supporters of the Government have a very strong leaning towards its measures ; but that should never be re- garded as a justification for blinding their eyes to an act of injustice, which possibly is being perpetrated without any intention. On the contrary, they should exercise their best efforts to persuade the Government to take a more lenient, impartial, and just view. 1 do think that we are making a very serious mistake in placing this heavy tax upon the shoulders of many persons who will be practically ruined by it, because the clause must mean the absolute destruction of the equity of redemption.
– I should like some information upon this clause in regard to a certain class of land-owner. In South Australia more than a million acres have been sold to persons under a covenant to purchase. The price has been fixed and the purchaser has been permitted to take the land for three years during which he has merely to pay interest upon its capital value. Subsequently, he will have to make sixty halfyearly payments before the land becomes his own. So that, practically, the Government holds a mortgage upon it until his payments are completed.
– How many have covenanted to pay £5,000 ?
– “Some have taken up very large areas, but many have disposed of their lands to a third party. That third party has simply taken over the covenant to pay during a period of thirty years. But the original owner has received a considerable advance upon the price which he paid. That being so, it necessarily follows that the land must have increased in value. What is the position of these men ? In some instances the lands have increased in value to £5 and £6 per acre inclusive of improvements. Will the present holders be required to pay the tax, although they may still have twenty or more years in which to complete their payments?
– Senator Gould has said so much that I intended to say that I do not propose to detain the Committee very long in submitting my amendment. I credit honorable senators with being imbued with a strong sense.of justice. That being so, I appeal to them to put themselves in the place of the unfortunate mortgagor who. under this clause, will find himself called upon to pay land tax, not merely upon the equity of redemption, but upon the mort gage which is held by some wealthy person. I move -
That the word “No” be left out, with a view to insert in lieu thereof the word “ A.”
– Would the honorable senator allow the mortgagee to escape ?
– That is a matter for further consideration. If the Government could see their way to make the mortgagee pay the tax, I should be with them.
– The Minister of Defence has asked whether Senator Walker would allow the mortgagee to escape. That is one of the points of contention under this Bill. It protects the- mortgagee nearly all the time, whereas the mortgagor is far more deserving of consideration. He is the individual whom we ought to encourage. He is the last man whom we should touch. The liability for the payment of this tax should be placed primarily on the mortgagee. I am aware that the clause has been copied from the New Zealand Act. But we must recollect that the Dominion is comparatively a small place, and that the conditions which obtain there are vastly different from those which obtain in Australia. This is a matter which ought to be seriously considered by the Vice-President of the Executive Council. That honorable gentleman has inquired how many of the persons mentioned by Senator Vardon have covenanted to pay £5,000 for their holdings. May I point out to him that nobody can say how long that exemption will protect anybody? If honorable senators look at clauses 30 and 31, they will see that the mortgagee is protected in both cases, and the mortgagor is the man who runs the risk. This £5,000 exemption is one of the most awful delusions and impostures ever rung off on a people or a Legislature. In every difficulty that occurs in connexion with the Bill we are told that the £5,000 exemption is a sure and certain remedy. One is reminded of the child’s definition of a lie as “ A very present help in time of trouble.” Every time we press the Government, they say, “ Oh, but the £5,000 exemption will prevent hardship.” It may be true as to today and as to six months hence, but surely there is to be stability; and when the Government profess that the £5,000 exemption is a permanent protective barrier against oppression, we are entitled to ask, “How can you guarantee that?” The answer is absolute silence. Honorable senators opposite now laugh. They squeal when I show the shallowness of their pretence. Senator Walker has made a suggestion that is fraught with justice. Are the Government really satisfied of the equity of their own proposal ? Are they prepared to say that the protection given by clauses 30 and 31 to the mortgagee is fair and in accordance with sound policy? I shall content myself with accentuating the awful iniquity of this proposal.
– - W’e have listened to a great deal of supposed reasoning about mortgagors and mortgagees. Before I enter into the reasons for opposing the amendment of Senator Walker, I wish to ask those learned and eloquent men opposite, who are always so anxious to air their knowledge, whether they can tell me of any instance under a progressive land tax where the mortgagee is rendered liable in any way? If we had a flat rate of tax right through, it might be possible to bring the mortgagee under some liability. We cannot relieve the mortgagor and protect the interests of the revenue, or conserve the object of a progressive land tax, unless we lay the liability on the mortgagee. If we take the liability off the mortgagor, we shall have to put it on to the mortgagee. I want to show how that would work. Suppose there were an estate worth £100,000, upon which £80,000 had been borrowed. Then the mortgagee would have to pay the higher or progressive rate. We should have to put that progressive rate on the mortgagee, who had an interest in a large aggregation of land. The mortgagee of a small estate would be in an entirely different position. There would have to be weekly conferences among money-lenders, who would have to be constantly adjusting and regulating the rates of interest that would have to be charged to the big -mortgagor and the little mortgagor. When honorable senators look at the matter from a common-sense point of view, they will see the reason why the Government oppose the amendment. We du not want to encourage any land-owner, or contemplating land-owner, to take up large values of land. If we did as Senator Walker intends by his amendment, we should give a person an opportunity of taking up £10,000 worth of land and borrowing on £5,000 worth, whereupon he would be exempt from taxation altogether. Senator Walker does not wish to make the mortgagee pay anything. If a friend of his broke up £10,000 worth of land and mortgaged it to half the value, he would pay no tax whatever, because the interest of the individual who took up the land would be only £5,000, and the interest of the mortgagee would be only £5,000, and both would be under the exemption. We do not wish to create for any individual an opportunity for taking up £10,000, £15,000, £20,000, or £100,000 worth of land and mortgaging any of it, or for taking up any area over £5,000 worth. If a person takes up £5,000 worth of land and mortgages it to the extent of £4,500, no one will have to pay anything, and the individual will have a fairly large estate on which to work out his own salvation. It is with the object of discouraging the taking up of large tracts of land that we resist the amendment.
.’ - I have never before heard from the Vice-President of the Executive Council so extraordinary a statement as that he has just made. Of course, if you aggregate all the advances of a man who may have lent £5,000 on a particular mortgage, you make him possessed of a great deal more than £5,000 worth of land. As a matter of fact, as a rule a man who lends £5,000 has a great deal more than that amount of property. I am rather surprised at Senator McGregor departing from his usual strong common sense. He has spoken as it a man who lent £5,000 would have no more than that in the world.
– We do not want to encourage the taking up of large estates.
– But it has already been done.
– We want to undo what has been done.
– It is not at all proper to pass class legislation. I intend to divide the Committee on the amendment, in order to let the electors know who stood up for the poor man in the Senate. On this occasion I. am speaking for the poor man, and I feel for him probably as much as does any man present.
– I am afraid that there is no way of getting the poor beggar of a mortgagor cut of his difficulty, notwithstanding the excellent intentions of Senator Walker. If the mortgagee has to pay land tax, up goes the rate of interest straight away. There is no getting away from that position. Either the mortgagor has to pay the whole, making the best arrangement he can as to the money he wants, or, if the mortgagee is going to pay his share - especially if his mortgages are to be aggregated, as suggested by Senator Walker - the rate of interest will go up considerably.
– It is plain that the mortgagor will be hit all the time. When, a few years ago, a question affecting licences was being considered by a Committee of the House of Lords, a witness was asked a question with regard to the position of “ tied “ houses. He was asked to explain how he was “’ tied “ down, and he replied, “I am not only ‘ tied ‘ down myself, but every blessed thing in the House, down to the sawdust, is ‘ tied ‘ down.” So it will be with the mortgagor under this Bill. One object of this little discussion has been to show that the Government do not care a button for the mortgagor. I do not want to start a discussion as to rich and poor, because this is a matter of justice, but the principle of this proposal is bad, and there is no justification for it. The Vice-President of the Executive Council has frankly told us that the Government want to prevent the taking up of land in areas over £5,000 in value. They do not care two straws how their principle will apply, or what injury they do, provided they get in this blow at landowners.
– I do not suppose there is the least chance that the Government will modify this clause, because to do so would be to defeat the object of the measure, which is to cheapen land and make it a drug in the market. Of course, the best way to do that is to press the mortgagor until he must give up his land. I recognise the force of the argument that if mortgagors were exempt from this taxation, most of the land in the Commonwealth would be mortgaged, but it would have been fair to have exempted land mortgaged before a certain date. That would have given people some warning.
– They have had more warning than had Sodom and Gomorrah.
– The Vice-President of the Executive Council asked whether there was any country in which land taxation freed the mortgagor.
– I said progressive land taxation.
– I can tell the honorable senator that in America the land taxation freed the mortgagor to the extent of his mortgage liability.
– That is not progressive taxation.
– I am aware of that; but why, for the sake of making this taxation progressive, should we perpetrate this cruel injustice. This provision is cruel and inhuman, and certainly was never anticipated. Even if the Government proposed to apply such a provision in the future they should provide that land mortgaged previous to the 30th June last should be allowed to escape the tax so far as the equity of redemption is concerned. Under this provision the mortgagor is given no chance to free himself, and in a great number of instances he must lose his land.
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [9.47].- I agree with a great deal that has been said as to the injustice of the measure. I thought it well to make a little calculation to ascertain the effect of this provision on the equity of redemption. I take the case of a property of the unimproved value of £20,000, on which there is a mortgage of £15,000, and assume a tax of id. in the £1. Honorable senators will understand that in the case of a larger rate the reduction in the value of the equity of redemption would be very much greater.
– Let the honorable senator ask Senator Walker if he would advance £15,000 on a property worth £20,000.
– It is immaterial for my purpose whether I take 75, 60, or 50 per cent, of the value of a property to estimate the amount that might be raised upon it by way of mortgage.
– I wish the honorable senator would let us know where we can find institutions that will lend in the way he suggests.
– I have to admit that I do not know of many institutions that will lend in this way after this Bill passes. In the case I have cited, deducting £5,000 from the total unimproved value, the rateable value would be £15,000, and the land tax at id. in the £1 on that would amount to £62 1 os. a year. That must be added as a charge on the land to the interest charge of £675, which is a per cent, on £15,000, the amount which I have assumed is borrowed on the land. The first effect of the tax is equivalent to an increase in the interest charge from 4^ to upwards of 5 per cent. Now, let us see how it would affect the value of the equity of redemption. The equity of redemption in the case I have mentioned would be £5,000. If we capitalize the annual tax of £62 10s. on a 5 per cent. basis, we shall find that the tax reduces the equity of redemption by £1,250, or by 25 per cent. In many cases lands are sold on long terms at a ground rent, and convertible into freehold on a 3 per cent. or a 4 per cent. basis. If we take the 3 per cent. basis, which is adopted in the case of some properties near Sydney, that would reduce the equity of redemption by the sum of £2,242, or by about one-half. Honorable senators must see that this would materially injure a man who, in order to work the property, has been obliged to borrow a large sum on mortgage. I have taken the minimum of 1d. in the £1, and that would destroy the equity of redemption to the extent I have mentioned. It is clear that the operation of this measure must depreciate the value of land. As a result, land will become a drug in the market. There will be more land available for purchase than there will be buyers for it, and buyers will then take care to get land at a lower rate than they could if it were not such a drug in the market.
– If this tax will reduce the value of land, should not municipal and shire taxation have the same effect?
– No, because the revenue derived from municipal and shire taxation is spent in the improvement of the district in which the taxation is levied. Local government taxation and taxation by the central Government for revenue purposes are distinct, and affect land in a different way. I remind the honorable senator also that no land in a shire is exempt from shire taxation.
– Is this not a tax for services rendered? Is not the defence of property a service rendered ?
– This is taxation to obtain revenue for the central Government, and is not taxation for services rendered in the same way that local government taxation is. I have pointed out what I believe will be the effect of this provision. I believe it to be most unjust, but I recognise that honorable senators on this side can do no more than record their opinions and their votes in opposition to it.
– There is one objection to this provision which I forgot to mention, and that is that it is really retrospective legislation. Mortgagors could have no idea that they would be called upon to bear this tax, and it would be only right to provide that this clause should not come into operation until, say, 1st January next. An honorable senator has suggested that the mortgagee will raise the rate of interest, but a man need not borrow if he thinks the interest proposed is too high. I have no hesitation in saying that I do not believe in the principle of a progressive land tax. If this were a simple tax, there would not be at all the same objection to it. Admitting that the principle of the Bill is to impose a graduated land tax, we might make an exception in the case of a mortgagee, so that the mortgagor may not be called upon to pay too high a rate. Honorable senators who intend to vote for the amendment will be voting for fair play for the unfortunate mortgagor.
Question - That the word proposed to be left out be left out (Senator Walker’s amendment) - put. The Committee divided.
Majority … … 8
Question so resolved in the negative.
– Before proceeding further, I wish to make a personal explanation. I regret very much that I neglected to carry out my duty with respect to a pair I promised to the Leader of the Opposition. Although it would have made no difference in the result, yet I am sorry that it was overlooked. I wish honorable senators to understand that it was quite accidental.
Clause agreed to.
Clause 31 agreed to.
Clause 32 -
Provided further that a trustee shall be assessed as an absentee if more than two-fifths of the beneficial interest in the land is owned by absentees, and not otherwise ; and in that case, if any of the beneficiaries is not an absentee, there shall be deducted from the tax payable by the trustee in respect of the land, and from the contribution of that beneficiary to that tax, an amount equal to the difference between -
the amount which would be contributed by that beneficiary to the tax which would be payable by the trustee at the rate applicable to absentees ; and
the amount which would be contributed by that beneficiary to the tax which would be payable by the trustee at the rate applicable to residents.
Clause verbally amended.
Amendment (by Senator McGregor) agreed to -
That the proviso be left out, wilh a view to insert in lieu thereof the following new subclause “ (2 ) A trustee shall in no case be deemed to be an absentee ; but any of the beneficiaries who are absentees shall be separately assessed and liable as absentees.”
Clause, as amended, agreed to.
Amendment (by Senator McGregor) proposed -
That the following new clause be inserted : - “ 32a. Where under a settlement made before the first day of July, One thousand nine hundred and ten, or under the will of a testator who died before that day, land is charged with an annuity - [a) the value of the annuity shall be calculated according to the prescribed tables for the calculation of values ; and (b) there shall be deducted from the unimproved value of the land a sum which bears the same proportion to the value of the annuity as the unimproved value of the land bears to its improved value.”
Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [10.6].- I should like the Minister to explain whether there is to be any taxation paid by anybody in respect of the value of the annuity which has been deducted from the unimproved value of the land ? What I understand from the provision is that if a man has property the unimproved value of which is £20,000, and which is charged with an annuity of £500, the annuity is valued, and its value deducted from the unimproved value of the land, and the taxation is levied on the balance. I shall not object to the provision if that is what it means, but I call attention to the fact that the very principle which we wanted to introduce with regard to mortgages is now being adopted with regard to annuities.
– You ought to be satisfied.
– No. I am not going to object to the provision, but I wish to point out that we are getting into a peculiar position when we recognise one form of past transactions but not another form. Of course, I recognise that this provision only deals with property under a settlement made before 1st July, 1 910, or where the will of a testator who died before that date has charged his land with an annuity. I think it is a just proposal, at the same time I cannot forbear pointing out that the Government refused to treat similarly other persons who are situated in very much the same way.
– The two cases are not alike.
– I admit that I am confused in respect to the meaning of paragraph b, which I should like the Minister to kindly explain.
– I think that honorable senators ought to be grateful to the Government for being so generous. This provision is being inserted for the purpose of doing away with what might be termed hard cases. So far as an annuity is concerned, an amount will be deducted from the estate equal to what would produce the annuity, and consequently the estate will be taxed on so much less.
– We understand that, but what about the proportion of the unimproved value ?
– I am sure that the honorable senator knows that the returns from an estate are not from the unimproved value, but from the improved value, and consequently the proportion which one value bears to the other must be ascertained, so as to act fairly towards the Commissioner of Land Tax and the estate. The amendment is proposed for the purpose of doing what our honorable friends on the other side would desire us to do, and, therefore, it ought to be allowed to pass. ^Senator Walker. - I am not objecting.
– I should like to know whether the amendment refers solely to annuities, or whether, in the case of an estate having been left to certain beneficiaries, they will come under the same rule. On a previous occasion I mentioned the case of a man who had left an estate consisting of 7,000 acres.
– That is dealt with in paragraph 4 of clause 32. It allows an exemption for each beneficiary.
– I am not quite sure that it covers this case.
– In addition to that, they are not to be taxed as absentees.
– In this case they would not be taxed as absentees. I wish to know whether beneficiaries will be treated in exactly the same way as annuitants ?
– Yes. under paragraph 4 of clause 32.
Proposed new clause agreed to.
Clauses 33 to 38 agreed to.
Clause 39 - (1.) Land owned by a Mutual Life Assurance
Society (not being land of which the society is mortgagee in possession, or which the society has acquired under or by virtue of a mortgage) shall be deemed to be owned by the society as trustee for the several Australian policy-holders as beneficial owners in severalty in proportion to the surrender values of their policies as determined according to a method to be prescribed, and shall not be deemed to be occupied by them jointly. (3.) It shall not be necessary for the assurance society to make” returns as to, nor for the Commissioner to assess, any policy-holder whose beneficial interest in the lands so owned by the society is less than an amount (not ‘exceeding Twenty pounds) to be prescribed.
– I move -
That the following words be left out, “ and shall not be deemed to be occupied by them jointly.”
I think that honorable senators will recognise that the amendment will liberalize the clause, and, therefore, ought to be made.
Amendment agreed to.
– I move -
That the following words be added, “ nor shall any policy-holder be required to include in his schedule of taxable lands any sum represented by his interest in a mutual life office unless the taxable value of his land, exclusive of such interest, be in excess of Five thousand pounds.”
This amendment is proposed at the request of Mr. Richard Teece, who understood from the Attorney-General that it would not be objected to. The position is somewhat peculiar. The Australian Mutual Provident Society is a mutual office, and its unimproved properties represent £250,000, as against its total assets of £25,000,000. That means that its landed property represents 1/100th part of its assets. Let us suppose that a policy-holder has a policy, the surrender value of which is £1,000. As the landed property of the company represents 1/100th part of its assets, it follows that the policy-holder’s share in that property will amount to £10. The company has 200,000 policyholders, and probably not more than 1,000 of these are possessed of land the unimproved value of which is more than £5,000. In such circumstances only these persons should be allowed to demand this information. A great deal of work is involved in ascertaining the surrender value of a policy, and it seems to me that the request of the company is a reasonable one.
– Is it not a fact that a life assurance company has to ascertain the surrender value of the policies issued by it, to enable it to declare a bonus?
– That is so. But I would point out to the honorable senator that the surrender value of policies is not ascertained in individual cases. Only one calculation is made for all the policyholders in a particular class.
– I am sorry that the Government cannot accept the amendment. Its effect would be to release only a very fewpersons who will come under the operation of the Bill. I need scarcely point out that only very large policy-holders will be affected by the clause. Of course, if a person possesses land the unimproved value of which is £5,000, he may, in the absence of this provision, escape taxation upon his interest in a life assurance policy of perhaps £2,000. Consequently, although only a few will be affected by this clause, those few are really entitled to pay the tax.
– I do not object to. those who are entitled to pay the tax being obliged to pay it. My point is that life assurance companies ought not to be called upon to supply to policy-holders who are not possessed of land the unimproved value of which is £5,000 the information to which I have referred. However, I have done my duty in bringing the matter forward. Just imagine a life assurance company being called upon to go to all the trouble to which it will be obliged to go, for the sake of ascertaining that a policy-holder’s interest in its landed property is £10.
Clause, as amended, agreed to.
Clauses 40 to 43 agreed to.
Clause 44 (Power of Court on hearing of appeal).
– I really do not know the expense to which appellants are likely to be put under this Bill. Where are these appeals to the High Court to be heard?
– The appeals may be heard, not only by the High Court, but by the District Court, or by the County Court.
– In effect the’ Minister says, “ Let us gallop through the Bill irrespective of whether we consider it or not.” I know that enormous expense has been incurred in Queensland in regard to State assessments.
– In addition to the Courts which are specified in the clause, the Government may proclaim any other Court.
– There will be no lack of Courts to which appeals may be made.
– I am glad to have that assurance. I am afraid that under the Bill the object of the Government will be achieved, and that the last thing of which any person in this country will desire to be possessed is land.
Clause agreed to.
Clause 45 agreed to.
Senate adjourned at 10.27 p.m.
Cite as: Australia, Senate, Debates, 27 October 1910, viewed 22 October 2017, <http://historichansard.net/senate/1910/19101027_senate_4_58/>.