Report of the British Economic Mission to Australia

Bibliographic data

Monograph

Identifikator:: 179824683X

URN:: urn:nbn:de:zbw-retromon-182286

Document type:: Monograph

Title:: Report of the British Economic Mission to Australia

Place of publication:: London

Publisher:: His Majesty's Stationery Office

Year of publication:: 7th January 1929

Scope:: 63 S.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Supplementary memoranda

Collection:: Economics Books

should be administered by the same officials, with a proviso that all valua- tions should be made on a proper hasis, such as that at present adopted for the Commonwealth duty. In order to avoid any question of State rights or the suggestion that State functions are being absorbed by the Common- wealth, the States might take over from the Commonwealth the adminis- tration of this capital tax if the Com- monwealth takes over from the States the administration of income tax. In this matter we recall the recommenda- tion, in a similar sense, of the Royal Commission on Taxation in 1922. 8. Land Taxr.—Land tax is paid on freehold land (as distinguished from leasehold) and is graduated. We are unable to see that this is equitable. The principles which govern such a C 1. We have interviewed the head office representatives of the Trading Banks and the Commonwealth Bank, some of their principal branch managers and the officials of the State Savings Banks, the Government Rural and Agricultural Banks, and Invest ment and Trading Companies who make advances similar to those of the banks, and discussed with them the zeneral position of banking in Australia. The trading banks have very thoroughly learned the lesson of the year 1893, and there has been no suggestion of any financial difficulty in Australia, so far as banking is con- rerned, since that crisis. They had no lifficulties even in war years. The stability of the trading banks may perhaps be fairly illustrated by a com- parison given to us between the ratio of capital and reserve to outside ‘abilities of the three New South Wales trading banks; these are 1s. 6d., 8s. 10d., and 3s. 5d. in the £ respectively. The criticism, if any, hat is levelled against the banks is that they are too tight with their money, and too conservative. 2. The high rate of interest paid by the Savings Banks, and the invest- ment of a large proportion of their funds in Government Joans and ax are entirely different from those which govern an income tax, which, 'y graduation, equitably assumes a treater capacity to pay to be attached ‘0 a larger income. Land tax is pre- umed to be charged by relation to the ralue of the land, and to apply the rinciple of graduation to it is un- ound; the thousandth acre is no more raluable than the first acre, and should ear no higher rate of tax. We direct tention in another memorandum to ‘he necessity for using land so as to woduce the maximum wealth, and in ur judgment it seriously militates tgainst such user of the land to charge wn increasing rate of tax on an in- “reasing quantity of land. We re- :ommend that if land tax continues to ve imposed it should be chargeable at 31 even rate on all land values. BANKING. similar long-term securities, tends to restrict the money which is available ‘or ordinary trade purposes, and this luid capital is also diminished by the practice, which is common to the ranks in Australia, of making ad- rances against real estate (*‘ broad wres My, including pastoral and agri- ultural lands. It must be borne in mind, however, that without the facili- des thus afforded hy the banks, it night reasonably be claimed that the evelopment of the country would have ‘een far less rapid than has been the ‘ase; nevertheless, such advances render less fluid the financial resources of the banks for the purposes of rdinary trade advances. 3. Borrowing is checked by the vanks by means of rationing the wiount of fresh advances to clients ather than by raising the rates of nterest, the Australian temperament eing such that the latter course vould probably not be effective, par- icularly in view of the probability of mn increment in the value of land pur- *hased with borrowed money. On the vhole, the farmer is a desirable and safe client for the bank, and little, if any, losses have heen made on the advances on tha security of ¢ hroud ores?

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