NO REDUCTION OF TAXATION

Press, Volume LXXII, Issue 21732, 14 March 1936, Page 7

NO REDUCTION OF TAXATION

„■ ■ +— —i.--. AUSTRALIA'S DEFENCE NEEDS GOVERNMENT'S CAUTIOUS ' VIEW'

(FBOU OXTR OWN CORRESPONDENT.)

SYDNEY, March 7. The Federal Government is likely to earn disfavour, and in spite of large surpluses in the last two years and an even larger one ia prospect this year (ending on June 30), the Prime Minister (Mr J. A. Lyons) has officially stated that there is no hope of an immediate reduction of Federal taxation. . The t-xth is that the Government has such little knowledge of what Australia may need to spend on defence that it cannot risk easing the present burden on taxpayers. Apart from the general demand for a decrease of the present heavy, rate, reduction is being urged of two taxes in particular. These are the. petrol tax (raised from 2d to 7sd a gallon when Australia's financial crisis came five years ago) and the sales tax on the vast majority of goods sold. Both have i

between them helped greatly to support Australia in the time of crisis. Since the economic p'osition improved, they have given greatly increased returns. The sales tax has been reduced from 6 per cent, to 5 per cent, and a big list of articles, especially agricultural implements and the like, have been removed from the tax. The petrol tax remains unchanged. Part of it returns. to the states for road maintenance, but the greatest part goes into Federal consolidated, revenue. Motorists' organisations are conducting an. intensive campaign for its reduction, in spite of a rebuff from the Treasury a few months ago. They Eoint out that the sales tax has already een lightened; the petrol tax remains the same "emergency burden." Mr Lyons's Explanation. A representative deputation . from trading, industrial, business, and manufacturing interests recently waited on Mr Lyons, and asked for: (1) a reduction of sales tax by 1 per cent a year over five years, the first reduction to take place immediately; (2) a reduction of 20 per cent in the income tax and the abolition of superproperty tax; (3) abolition of the Federal land tax, and a gradual reduction in primage in accordance with arrangements made at Ottawa. r , '.'. It is, pointed out that in .'last four years the sales tax has.yielded £34,000,000. The tax was intended to make up for the loss of customs duties, but these 'have increased by .£ 6,885,638. Mr Lyons said that the Government had to face increased exaendUtura on.

had added to expenditure. Old ag« : and invalid pensions had increased-by £2,000,000 since 1930. Who was going to suggest that they could be reduced** Defence was taking this year . £2,250,000 more. than in 1930, .and the... Government would have; to face 1 "a greater increase. ''•*"' - A sum of £3,000,000 had been found for the states.. The Government 'was - finding £1,250,000 more to assist'primary industry, and roughly,, there =wasabout £8,500,000 in these-four itemsix Such a reduction as was . suggested" would not permit the Government .to ( meet its commitments. Until the Government knew what would..-be'; n :essary for defence it was. not in" a position to give relief.- " ' ' Viscount Halifax described Lawrence of Arabia as a twentieth-century .Cru- ■ sader when he unveiled a bust of him in St Paul's Cathedral. - ' ~J