AUSTRALIAN FINANCE

Evening Post, Volume CXI, Issue 123, 25 May 1926, Page 7

AUSTRALIAN FINANCE

STATE AND COMMONWEALTH

READJUSTMENT DISCUSSEDi

(United Press Association.—Copyright.) MELBOURNE, 24th May. The financial conference between the States and the Commonwealth has commenced. Mr. Bruce, in opening the conference, urged that his proposals' offered a satisfactory basis for the definite and final determination of the present unsound system of capitation payments, with its accompanying duplication of income taxes. He claimed that under his nchemcthe States would be freed from reliance on th*e Commonwealth in finance, thus strengthening the Federal principle. He then outlined his proposals,, referring to the abolition of the Federal income tax. He said that if the income became sufficiently buoyant, it might be possible for the Federal authorities to drop direct taxation. ' . ,

The proposals as outlined in a statement passed by the Federal Government include separation as far as possible of the Commonwealth ■ and State finances on the principle that normally indirect taxation is the proper field for tho Commonwealth and- direct taxation is the proper field for the States.. As a first step towards this, the Commonwealth Government will evacuate the field of taxation of incomes of individuals. Capitation payments to tho States will bo discontinued. Tempor ary financial assistance will be given tho States to prevent undue dislocation of State finances under the new arrangements, i,