WAR TAXES

Evening Post, Volume CXXXI, Issue 39, 15 February 1941, Page 13

WAR TAXES

UNIFORM SCALE

AUSTRALIAN PROPOSALS

PREMIERS CONFER

(By Trans-Tasman Air Mall—From "The Post's" Representative.)

SYDNEY, February 8,

A uniform system of income taxation for the Commonwealth and the States to facilitate the use of. the whole of Australia's available resources for war finance was admitted to be desirable at an informal meeting of State Premiers. A later conference will be convened after the States have considered three proposals which were submitted. ■ • . .

At present there is. a big disparity in taxation in different States. Queensland rates, particularly in the higher fields of income, are considerably greater than in New South Wales, which in turn exceed those in Victoria. Consequently the high taxation by Queensland of large incomes prevents the Commonwealth taxation of incomes on scales which could be afforded by those -receiving these incomes in other States, ■ and many taxpayers are escaping with less than a fair share of the national taxation burden. The proposals submitted to the Premiers' conference were:—(l) Agreement by the other States to reduce their rates of taxation to those of Victoria. (2) Adoption of a scale of State taxation rates intermediate between the present maximum and minimum rates to which all State rates should be adjusted. (3) State Governments to increase taxation rates to the level of the highest rates now prevailing, and to remit the extra revenue thus obtained to.the Commonwealth in the form of interest-bearing loans. INCREASED REVENUE. Special emphasis was laid on the first proposal, and it is the one most likely to be approved. Mr. Fadden explained that adoption of the Victorian tax scale would mean that- the Commonwealth would be able to increase its rates of taxation. The Commonwealth would compensate the States, he said, but the compensation should not, in his view, fully make up for the amount lost. The difference would represent "a contribution by the States to the war effort. If reduction to the Victorian scale covered incomes from £400 upwards, £6,000,000 could be raised for war purposes without additional burdens on taxpayers in general. If the reduction affected incomes from £1000 upwards, the amount raised would be about £3,000,000.

All the schemes, however, present difficulties, not the least being the differentiation in the value of money in the different States. Uniformity of taxation would, therefore, not necessarily mean equality of taxation burdens on- similar incomes throughout, the Commonwealth.

Australian finances for the prosecution of the war have also been assisted by the compulsory sale of dollar holdings privately owned in the United States by Australians.

Last April an order was issued requiring 20 specified dollar securities to be sold by January 31, and the proceeds made available to the Commonwealth in exchange for the equivalent value in Australian currency. It was estimated at the time that, after repayment of prior encumbrances on the securities to be sold, about 4,000,000 dollars would be received by the Commonwealth.

Mr. Fadden revealed that to the end of last month realisations amounted to about 3,000,000 dollars, but this figure, he said, would be increased by about a further 1,000,000 from the proceeds of dollar sales at present in progress. In addition, the Government had received more than 1,000,000 dollars from the voluntary sale to it of balances held by residents of Australia in banks or other institutions in the United States.

According to information which has been collated from returns furnished under National Security regulations, there still remains in the ownership of Australian residents an amount of about 5,000,000 dollars of United States securities and balances. When the whole of the Australian-owned dollar securities and balances have been placed at the disposal of the Government a total of about 10,000,000 dollars will have been provided in this way.