EARLY ELECTION POSSIBLE

Timaru Herald, Volume CLIII, Issue 22529, 13 March 1943, Page 5

EARLY ELECTION POSSIBLE

Political Crisis In Australia Dispute Over Taxation Bill N.Z.P.A.—Special Australian Correspondent CANBERRA. March 12. The Commonwealth Government's acceptance of some machinery amendments to the Income Tax Assessment Bill, made by the Opposition majority in the Senate, has been announced by the Federal Treasurer (Mr J. B. Chifley). The principal amendment accepted will make It possible for taxpayers to claim refunds of amounts overpaid in instalments of taxation. It had been the Government’s Intention to freeze these overpayments at a low rate of interest until after the war. The Government, however, refused to accept the Senate’s request to delete from the Income Tax Rate Bill a clause providing for the passage of proposals for a vote of £30,000,000 for national welfare before the tax bill becomes operative on April 1.

Tire Bill will be returned to the Senate when the Opposition in that chamber, holding a majority of two, will have to decide whether to adhere

to its request or let the matter drop. According to observers, a serious political crisis will develop if the Senate persists. Mr Curtin has indicated that the Government would be prepared to fight an election on the issue. The Senate claimed that the provision was unconstitutional in a tax measure. In dealing with the Rates Bill the Senate had to proceed by request since it has no constitutional power to amend a money Bill. Cause of Dispute The deadlock between the House of Representatives and the Senate on the Bill to impose £40,000,000 additional income taxation appears to have precipitated a rapid political crisis, which may possibly provoke an early election. The cause of the dispute is a clause making the operation of the Tax Bill contingent on the operation of the National Welfare (Social Security) Bill.

The Senate objection to the clause is that it unconstitutionally binds them to acceptance of the Welfare Bill. The 'Senate regards the linking of the Welfare Bill with the Tax Bill for raising funds for the war as a “subterfuge and election window dressing.” . The Government offered not* to complete the passage of the taxation until the Welfare Bill had been considered by the Senate, but the offer was not acceptable to the Opposition Senators, who hold a majority of two.

Tlie Prime Minister (Mr J. Curtin) stated earlier that he would make the retention of the disputed clause in the Tax Bill a vital issue.

After the Senate Opposition to-day blocked a Government attempt to avoid an immediate showdown, and rejected by 15 votes to 13 a Government demand that it leave the contentious clause in the Tax Bill, the Senate Opposition leader (Mr McLeay) said: “We will fight to the last ditch.” The alternatives now facing the Curtin Government include:—

(1) An election on the ground that Parliament is unworkable. (2) The presentation of a new Tax Bill removing the proposed taxation on lower incomes, in return for which taxpayers in the low income groups were to receive social benefits. (3) A showdown between the House of Representatives and the Senate, with the former insisting that the Senate has no right to press requests on money Bills. w Difficult and Bitter Pill The Government acceptance of the Senate’s request that the disputed clause be deleted is possible, but it would be a difficult and bitter pill in view of Mr Curtin’s earlier statement making the clause a vital issue. By following the third course, the Government would ignore the Senate’s demands and present the Bill as it stands to the Governor-General for assent. The House of Representatives must now consider the Tax Bill for a third time. Angry Ministers after the Senate vote are reported to have declared in the lobby that one solution would be to withdraw the Bill and completely redraft it without taxing lower income groups, and then blame the Opposition for the delay in the introduction of the national welfare scheme.

However, no official indication has yet been given of the attitude to be adopted by the Government. Political correspondents point out that while the development is technically a deadlock between the two Houses of Parliament, actually it is a fight between the Government and the Opposition. No further major developments are likely now until the House of Representatives again receives the Bill next Tuesday.

The "Sydney Sun” correspondent, says that the factor operating against an early election is that the date tor the double dissolution of both the Senate and House of Representatives has expired. If the House of Representatives went to the country immediately, the Government would have to fight a second election for the Senate before the year was out.