Papua-New Guinea’s Plea

Some Official Arguments "Fallacious, Incomplete"

Papua-New Guinea’s Plea To Postpone Income Tax

It is likely that Mr. Paul Hasluck, Australian Minister for Territories, as a result of strong representations made to him in Canberra on January 30, will take to the Common wealth Cabinet-room the proposed plan to impose income taxation on Papua and New Guinea at an early date, for a clearer decision regarding policy and methods.

'T is hoped, following this, that the Commonwealth authority will set up a competent Commission to xamine the whole of the problems :mnected with taxation in the Dual Eerritory, so that it may operate tore equitably and efficiently than ferns possible under present con ations.

' This important change in the tax :;ion outlook in P-NG has followed ii almost spontaneous resistance mong planters and merchants in ;abaul and Port Moresby to the Review of Territory Finances”. ‘The latter was prepared by De artmental officials for the Minister 'me months ago, and since has 2en extensively circulated.

It was considered by Territories’ iterests that if certain incomplete nd fallacious statements and argu ments set out in this report were (lowed to go unchallenged, taxation : incomes could be imposed at an irly date, on a very bad system. )he economic dislocation and con usion that could follow such a nange were described in January I IM, pages 17 and 18.

Rabaul Chamber of Commerce, :nd Planters’ Association of New ruinea decided to send a deputation ) Canberra to interview the Min- Iter. Similar bodies in Port loresby and Lae also swung into :3tion. Within a few days, the fol ding impressive delegation had -en assembled and was on its way ') see the Minister: >R DUDLEY F. JONES, MLC, barrister sand solicitor. Elected member for New (Guinea Islands; President, New Guinea ’Taxpayers’ Association; councillor, [Rabaul Chamber of Commerce; member, [Rabaul Town and New Britain Advisory (Councils.

IR. T. M. WILTON, bank manager. Presi dent, Rabaul Chamber of Commerce; i senior vice-president, Planters’ Associa tion of New Guinea; member of New [Britain District Advisory Council; repre senting Rabaul Chamber of Commerce.

IR. J. K. DOWLING, company director. (♦Chairman, Rabaul Town Advisory Coun cil; vice-president, Rabaul Chamber of (Commerce; representing Rabaul Cham- Iber of Commerce.

IR E. A. JAMES, MLC, chartered ac countant. Elected Member for Papua; • chairman, Port Moresby Town Advisory

Council; representing Port Moresby Chamber of Commerce.

MR. W. A. LALOR, barrister and solicitor.

President. Papua and New Guinea Public Service Association; representing Public Service Association and Mixed Race Association.

MR. H. V. QUINTON (Sydney), chartered accountant. Member of Papua and New Guinea Copra Marketing Board; repre senting New Guinea Taxpayers’ Asso ciation and Rabaul Chamber of Com merce.

MR. J. McKELLAR WHITE. Director of the Federated Taxpayers’ Association of Australia.

Mr. Hasluck was most co-operative.

He was at his home in West Aus tralia but there was to be a Cabinet meeting in Canberra at the end of

January. So he agreed to meet the delegation there on January 30. (Over)

Then the Cabinet meeting was cancelled: but Mr. Hasluck refused to cancel the P-NG interview. In stead, with the Secretary of the Department, Mr. C. R. Lambert, and other officials, he met the delegation on January 30, and spent 2i hours with the members, in a general discussion; and, later, they all lunched together.

Mr. Dudley Jones, who led the deputation, reported afterwards that the Minister accorded them every courtesy and consideration, and the atmosphere was friendly and helpful.

The following is a summary of the facts and arguments which were laid before the Minister by the delegation, the members of which spoke in accordance with a pre arranged plan:

Deputation's Views

At this stage of the Territory’s development, income tax and com pany tax would be disastrous to its economy.

The deputation expressed dis appointment at the quality of the abridged report on Territory finances tabled in the Legislative Council.

It considered that the report was not based on adequate research; and it urged that a full and adequate survey should be made.

The deputation said P-NG people were disturbed at the lack of a firm public announcement by the Gov ernment concerning whether it was or was not its intention to intro duce this form of taxation and that,

in its opinion, the lack of an an nouncement had already had a detrimental effect on the Territory’s economy, in respect of both capital and staff.

It appealed for an official an nouncement that this form of tax ation would not be considered for at least five years.

The Territory, undeveloped as it was. needed a continued and in creasing flow of both capital and personnel.

The introduction of this form of taxation would cause a substantial reduction in the inflow of capital

and an outflow of capital. This hs already occurred under the thre of taxation.

The bulk of developmental capit was supplied by individuals ai small companies.

The profit of individuals ai companies, particularly those suj plying services and goods, was n as great as the Governme: apparently thought. The expc taxes now paid were a direct U on the incomes of producers.

The normal company, planter ai businessman have already budget; their capital development for t; next five years.

Income tax would cause seve staffing problems in the Admini tration and private enterprise.

(Continued on page 149)

The cost of collection would make this form of taxation uneconomic.

If income tax is brought in, the Government would be embarrassed by a strong demand for social ser vices.

The plural society in the Terri tory (Europeans, Chinese, New Guineans) raised many taxation difficulties. It could not be levied equitably.

The question arose: Would this tax form part of the Commonwealth pool?

isidering the small amount of onal revenue the Government raise, the disturbance and rous effect on the Territory’s my under it is unwarranted, eputation added. ; Minister, in reply, said that epresentations of the delega vould have careful considera- He explained that the De- Lental survey of Territory lies, which had been tabled in jegislative Council, had not ordered or compiled with the ; of squeezing any additional Lie out of the Territory. object of the report was to ain whether taxation could be equitably distributed in the ory. ; must recognise that in fiscal rs it is necessary to plan said the Minister. “In re to fiscal policy, timing is very tant.”

Dudley Jones said that mem of the delegation wished to asise to the Minister that they ot object to the principle of on of income, but they did that its introduction, at this would be unwise. iy strongly recommended that pert and well-balanced Com >n be set up to examine the situation in relation to tax and to call public evidence, at the Minister might receive irt and recommendations based le widest possible considera in relation to the future, pas important, having decided the character and degree of on necessary, to consider the t effective and economical >d of implementation. ■ members of the delegation hat they recognised the Min sincere and consistent interest J Territory, and they believed ould realise that they were rying to be obstructive. They ;d to co-operate with him, if tted, in a constructive con ation of plans, for the ultimate it of the Territory. ;y were sure they could give help, if permitted.

[?]sta Ben...

... and Buka