STATES' APPEAL

Auckland Star, Volume LXXIII, Issue 173, 24 July 1942, Page 6

STATES' APPEAL

DISMISSED BY COURT

Commonwealth Government Sole Taxation Authority

United Press Association. —Copyright. Rec. 12.30 p.m. SYDNEY, this day

In Its most important judgment since Federation the Full High Court, by a majority decision, yesterday held that the Federal uniform taxation plan was valid in its entirety.

The Court dismissed the application by the States of Victoria, South Australia, Queensland and West Australia for a decree Invalidating the validating Acts on the ground that they were beyond the powers of the Commonwealth Parliament.

The effect of the High Court decision is that in respect to the current financial year, and for the duration of the war, the Commonwealth Government will be the sole income taxing authority in Australia. The power of the States to levy land tax, entertainment tax, probate and stamp duties, remains unimpaired.

Commenting on the Court's decision, Mr. Curtin, Prime Minister, said: "I can only regret the protracted and costly litigation which the States forces on the country. There was no occasion for it. Taxation is high, it cannot be otherwise. If the war drags on, it may well go higher. We have to use the total of our resources.

Commonwealth Government and the Commonwealth Parliament are firmly convinced that uniform Commonwealth tax Is the only method whereby the heavy burden of taxation can be distributed over the people of Australia with reasonable conformity to the principle of ability to pay. Federal Treasury Gratified Federal Treasurer, Mr. Chlfley, expressing gratification at the decision, said: "We can now go straight ahead." He added that in accordance with the Government's promise, there would be no increase this year of rates of income taxation, but he was careful to point out that this only concerned taxation to be collected this financial year on incomes earned in 1941-42. The Victorian Premier, Mr. Dunstan, commented: "The fact that the High Court decision was not unanimous, fully justifies the States in the action they took." Mr. Dunstan said the question of applying for leave to appeal to the Privy Council might be discussed by the Premiers at the Loan Council meeting next month if no decision was made before then. Mr. Forgan Smith, Premier of Queensland, said that Queensland will faithfully carry out the law. Pressing Ahead With Budget Plans Now that the High Court has given its judgment on uniform taxation, the Federal Government is pressing ahead with its Budget plans. A uniform tax will be levied on all incomes over £150 a year, but no new income groups will be drawn into the scheme by the forthcoming Budget. The present statutory deductions for taxpayers' dependents will be abolished and in their place will be a new rebate system. In the past these deductions were made from gross incomes before Income tax was assessed by the Federal and State authorities. Under the uniform tax scheme they will be assessed on gross income, but an allowance for dependents will be deducted from the assessed tax. The allowances for wives will be £100, for the first child £75, and £30 for each successive child. The rate of tax will start from 8d in the £ on an Income of £156, and will increase to 12/8 in the £ when the taxable income reaches £4000. For every £1 In excess of "o°° the Personal exertion rate will be 18/. uv? estimated that the Commonwealth will collect £129,000,000 under th £> u n l i / orri ?.. tax «cheme, out of l ° the States the income^'Tax** Tax (Wartime Arrangements) Act, 1942 .L nco ™. T? x Assessment Act, 1942' i (Income RelmburseA,V ? L l was submitted on behalf of the four States that the Warf T. t '„ A r ra, ? ge,ncr " s Act was an unconstitutional attempt compulsorlly to effect . of £ tiUe Taxation Departments to the Commonwealth and to acquire States property. They asked that the Acts named should be declared ultra 1 vires and unconstitutional and for an I injunction. The hearing opened at MelI on 'J une . 22 before t ft e Full Court. I YiL lch ,' consisted of the Chief Justice, Sir I tPJiE Latham, and Justices Rich, Starke. I ™°S et ;nan and Williams. Legal arguI v?£il»h ?£ tec £< fIVG flays and a half - "fter ■ wiucn the Court reserved Judgment*