Tax On Gold

A "Trust Fund" For New Guinea

IN the last hours of the session, in De cember, the Australian Parliament rushed into law the Gold Tax Bill and the Gold Tax Collection Bill by which it validated the tax (recently im posed) of 50 per cent, of the value of gold over £9 per ounce.

As the collection of this Australian tax in New Guinea was clearly uncon stitutional, under the Mandate, it was provided that the amount of this tax collected on New Guinea gold will be paid to a trust fund to be used for and in relation to the defence of New Guinea and for other Territory purposes.

It was announced that the 50 per cent, tax would not be applied to the first 25 ounces of gold won in the financial year by a prospector. A bona-fide prospector means “a person other than a company who has personally carried on the whole or major part of prospecting for and obtaining the gold delivered by him”.

It was expected that, in the circum stances, New Guinea prospectors would be at least released from the obligation to pay gold royalty: but nothing was done.

Double Taxation

BEFORE the Bills were passed, various people with interests in New Guinea attempted to point out to Federal mem bers the injustices planned: but the members did not seem interested and Ministers refused to consider the matter at all.

The following is a copy of part of a letter sent to certain members by the editor of the ‘‘Pacific Islands Monthly”:— “Because Mandated Territory interests are being subjected directly to taxation by the Federal Parliament, and because New Guinea has no voice whatever in that Parliament, and the New Guinea people are without any means of making direct representation to the Parliament, I am taking the liberty of pointing out to you the injustices contained within the present plan for the taxation of the

gold industry.

“In the first place, the gold producers of New Guinea are being subjected to double taxation. The New Guinea Ad ministration imposes a royalty of 5 per cent, of the value of gold exported, while the gold producers of Australia and of Australian territories (Northern Terri tory, Papua, etc.) do not pay any gold royalty. Now comes the new tax —50 per cent of the excess of the value of gold over £9 per ounce. This is imposed upon production in Australia and Australian territories, including the Mandated Terri tory. But there is no suggestion that the 5 per cent, gold royalty, already im posed in New Guinea, should be re moved.

“Why should the gold producers of New Guinea be singled out for this special treatment? Why are they being penalised?

Method Of Assessing

“Then there is the manner of assess ing the tax in relation to New Guinea production. I attach hereto a cutting from the November ‘Pacific Islands Monthly’, from which you will see that, because the Australian authorities insist upon first deducting the 50 per cent tax,

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and then deducting the 5 per cent, royalty from the balance, instead of following the reverse process, the gold producer is penalised to the extent of 4/6 per ounce.

Again, is the Government seeking some means of placing a special penalty upon New Guinea gold producers, or is this merely another example of bureaucratic mule-headedness?

“I understand that the Government intends to make a special concession to prospectors—that is to say, men who come within the definition of a prospector will pay no tax at all on their first 25 ounces of gold. Anyone who knows con ditions in New Guinea will describe this as a miserable concession. It represents a matter of possibly £2O per annum. I would respectfully urge that a gift of £2O per year is of little use to the men who have to battle with the terriblv hard and terribly expensive conditions of New Guinea, in order that they may make a profit out of the gold industry.

“It is a fact that in September the small gold-producers in New Guinea were given a concession, insofar that producers of gold worth up to £6OO per annum were absolved from payment of gold royalty altogether, and producers of gold, from £6OO to £1,200 p.a., pay on a sliding scale.

After £1,200 p.a., rebate ceases and the concession is wiped out. But this con cession, actually, is worth little. A New Guinea prospector has to produce a good deal more than £6OO p.a. of gold to be able to live at all, owing to the high cost of everything. Under the new law, these producers will be absolved from the new tax only on their first £250 or £3OO worth of production (25 ounces).

Claim For Consideration

“In any case. why. in the special cir cumstances outlined above, should the Government give a concession to the small men and not to the big companies?

The small men deserve everything they can get; but so also do the big com panies. We have to thank the courage and the enterprise, and the large amount of working capital introduced by the big companies, for the fact that there is to dav in New Guinea a great and profitable sold industry, worth nearly £IOO,OOO to the New Guinea Administration on the cold rovaltv alone. Concerns like Bulolo Gold Dredging certainly are reaping enormous profits from their enterprise in New Guinea: but anvone who knows their history will admit that they de serve every penny of it.

“If the gold interests in New Guinea receive some small concession in the name of justice—perhaps the abolition of the gold royaltv, or even a reversal of the method of calculating the taxes— they will not have had the same reason for complaint. After all, evervone in these days must face the responsibility of a great war. But if the new Bill goes through in its present form, without any concession to the New Guinea gold in terests, then the New Guinea gold miners will be justified in saying now. as thev have said many times before, that the only interest the Australian Parliament has in them is the interest of the master in the helpless milch-cow.

“If you can use your influence and your voice to get some reasonable con cession for the New Guinea miners be fore this Bill becomes law, I can assure you that you will be doing a very just and fair thing.”