AUSTRALIAN FINANCE

New Zealand Times, Volume LIII, Issue 12455, 25 May 1926, Page 9

AUSTRALIAN FINANCE

REORGANISATION PLANS FEDERAL GOVERNMENT MAY DROP DIRECT TAXATION CONFERENCE OPENEB By Telegraph.—Press Assn.—Copyright. (Received May 24, 11.5 p.m.) _w i, n,vr. , _uay 24. Tho conference between the States and the Commonwealth has opened. All* liruce, in his opening address, urged that liis proposals offered a satisfactory basis lor the definite and final determination of the present unsound system of capitation payments, witli its accompanying duplication or income taxes. He claimed that under his scheme the States would be freed from reliance on the Commonwealth in finance and thus the Federal principle would be strengthened. He then outlined his proposals. Referring to the abolition of the Federal income tax, lie said that if its income became sufficiently buoyant it might be possible for the Federal authorities to drop direct taxation altogether. Tho Federal Government’s proposals were outlined in a message received last week. The proposals include tho separation, as far as possible, of the Commonwealth and the State finances, on the principle that, normally, indirect taxation is the proper field for the Commonwealth, and direct taxation is the proper field for the States. As the first step towards this, the Commonwealth Government will evacuate the field of the taxation of incomes of individuals. Capitation payments to the States will be discontinued, although temporary financial assistance will be given the States, to prevent undue dislocation of State finances under new arrangements.