STATES’ RIGHT TOTAX

Press, Volume LXXXIV, Issue 25581, 24 August 1948, Page 5

STATES’ RIGHT TOTAX

MR CHIFLEY REFUSES DEMAND PREMIERS DISSATISFIED WITH SHARE (N.Z. Press Association-Copyright) (Rec. 9 p.m.) CANBERRA, August 23. The Prime Minister of Australia (Mr Chifley) to-day flatly rejected a demand by the State Premiers for the return to the States of their taxing "rights. “The Commonwealth does not propose to depart from the system of uniform taxation,” he said, “irrespective of what motion is carried here or what challenge may be contemplated in the courts.” He added that experience had shown that the formula for tax reimbursements did not measure up satisfactorily «to changing circumstances, and suggested that the formula should be on a basis of £45,000,000 tax reimbursements to the States instead of £40,000,000, plus certain variations determined by the cost index. He estimated that the over-all increased charges which would be borne by the States this year would be between £5,000,000 and £6,000,000, The Premiers’ conference decided to refer the suggested formula to their financial officers for a recommendation later. Mr Chifley took his uncompromising stand on tax demands after the Labour and Liberal Premiers had joined forces in an attempt to get a greater share of revenue from taxation. In an atmosphere of bitter dissatisfaction with existing financial relations, the New South Wales Premier (Mr J. McGirr) proposed that the States re-enter the taxation field in 1949-50. He suggested that the States introduce legislation retaining the present Commonwealth taxation law as their own law. with discretion to fix their own tax rates. “Commonwealth revenue is coming in at such a rate that the Treasury is almost at its wits’ end to know how to salt it away,” he said. “In spite of this and of the fact that expenditure in New South Wales alone last year was nearly £12,000,000 greater than in the preceding year, the extra taxation reimbursement for all Australia was only £5,000,000.”