How Taxpayers' Anger Grew
pp. 20-144 · Read in the full issue
Into A High Court Case
The validity of the Papua and New Guinea Act, being argue d before the Full Bench of the High Court of Australia in Mel bourne, in early June, has been described as “an attempt bj Papua and New Guinea people to escape from income tax”. It is nothing of the sort.
THE dual Territory became re conciled, long since, to the imposition of income tax.
The present case arose because of the way in which Australian Territories Minister Paul Hasluck introduced the taxation measure.
Territorians pleaded with him repeatedly to consult with them about the timing and character of the measure, so that it would cause as little disturbance of pri vate business organisation as possible. The Minister treated the potential taxpayers (both official and non-official) and their representatives in the Legislative Council with singular discourtesy and brusqueness, and aroused throughout the Terri tory a spirit of defiance.
Step by Step
The following paragraphs show how, step by step, the anger of the Territorians mounted and finally expressed itself in this most important case to the High Court. The validity of much that has been done in the Territory since the war is now in question.
But this action was not in t ended when the taxpayers launched their first application to the Supreme Court in June, 1959. Here are the steps; 1957: The Commonwealth Gov ernment secretly approved the Hasluck proposal to introduce income taxation in Papua-New Guinea, and preparations were made. But in 1957, 1958 and early 1959, neither Minister nor bureaucrats would give any in dication of whether, or when, in come taxation would be intro duced.
Asked for Timetable EARLY 1959: Believing incmne taxation was imminent, various representatives of P-NG interests asked the Minister to discuss plans and timetable with them.
It was clear that what the people really wanted to know was not whether the tax was coming, but when, and the method of its in
troduction and collection. I the Minister would give no j formation whatever —his ret ence infuriated the whole P-1 community. The Legco meeti in Port Moresby in March, 19 was given no information ab( tax procedure.
APRIL 20, 1959 ; Suddenly 1 Taxation Ordinance (to oper from July 1) was introduced ii the Council; and, by using 1 official majority, the Administ tion rushed the measure throi to second reading, and then j journed it to June 22. This ci temptous treatment of the Coi cil by the Minister was stron resented by all classes in Territory.
Repeated Appeals
April-June, 1959 : Repea
appeals to Minister to postp the measure for one year, allow time for examination economic effects and, if nec sary, amendment of the measi were brushed off. The non-offi classes then swung into ] action by forming associati of taxpayers in both Territoi pledged to fight. The hi handed dictatorial methods Minister Hasluck were respons for “the tax rebellion”.
They Resigned
JUNE 22: Legco met ur Canberra instructions to pass Tax Bill. The three elected, r official members (Messrs. E James, Dudley Jones and : Downs) thereupon resigned, the ground that the Council merely an instrument of hi handed bureaucracy.
JUNE 23: All remaining m bers of Legco were served dividually with writs, sumrt ing them to the Territc Supreme Court, to am an application by Mr. R.
Bunting for an injunction, daring the Tax Bill invalid that the Council was not <
(Continued on page 141)
stituted in accordance with Section 36 of the Papua and New Guinea Act (which says that the Council must include three elected mem bers) . The Council put the Tax Bill through the Committee stages and adjourned until July 13, pend ing the Supreme Court action.
JUNE 24-25 ; Counsel D. L.
Mahoney, representing taxpayers before Supreme Court, not only challenged the competency of the Legislative Council, but also the validity of the Papua and New Guinea Act of the Australian Parlia ment, under which the P-NG Ad ministration and the Legislative Council were created. This was un expected and caused a mighty furore on both sides. The validity of the Act had been under question for a long time. If it were declared invalid, the whole structure of the P-NG Administration would be affected.
JUNE 26: Because some did not
• n rhalwish to be associatedwith lenge to the Papua Act, Mr. Bunting in the event of an Supreme Court verdict dis the taxpayers application, h not go orlas appellan to the Court; and the heads of tn<e firms Withdrew their supporr the taxpayers associate s.
JULY 7: The Supreme Court dismissed Bunting’s application for an injunction. It held that the Legco was competent to pass the Tax Bin and that the Papua and New Guinea Act was valid. The Administration announced by-elections on september 12 to fill the three vacancies on Legco.
JULY 13-15' Legco met and finally passed ’ the Tax Bill, to operate from August 1, 1959.
LATE JULY : The taxpayers rallied and closed their ranks. They r a^SnC ed that more funds had been subscribed to carry on the that they would run three candidates for the by-elections—re who, if elected, WO uld P mmediately resign> in order to demonstrate the New Guinea re sidents’ resentment of the manner in which they had been treated by the Minister, LATE JULY: M. W. Fishwick seC retary of the Rabaul branch of Taxpayers’ Association, applied d i rec tly to the High Court for an injunction to prevent the Tax Act being proclaimed, pending a decision on question of whether the Legco had power to pass the Act.
But at 8 a.m., on July 30 —21 hours before the application was to come before a High Court Judge in Syd
ney—the Tax Act was proclaimed in Moresby by special Gazette.
Before High Court AUGUST 4: The challenge of the Taxpayers’ Association (with Mr M. W. Fish wick as nominal plaintiff) came before a Judge of the High Court in Sydney. It questioned the validity of the Tax Act on three grounds—(a) The Papua and Neu Guinea Act of Australia is invalic for a number of reasons—most o: which stem back to the Trusteeshi] Agreement between United Nation and Australia, under which Aus tralia was authorised to administe New Guinea; (b) Even if the Ac is valid, the Tax Ordinance is nol because the Legislative Council i not properly constituted, (c) Th Tax Ordinance is in conflict witl the Commonwealth Taxation Ac The Judge agreed that the matte should go before the Full Bench c the High Court.
AUGUST: Split in taxpayer organisation emphasised when eac section nominates three candidati for the three by-elections—one si of candidates being pledged to resig immediately, if elected, as a protei against Minster Hasluck’s methoi in introducing income tax.
SEPT. 12: The candidates nomil ated by the “fighting” section of tl Taxpayers’ Association won all thn by-elections, with large majoriti over the non-fighting section’s cai didates.
SEPT. 29: Legco met, and tl three newly-elected membe: (Messrs. V. TANARUS, Sanders, J. L. Chipp and S. Barker), formally resigne as a protest against the Ministe: handling of the taxation co troversy, and to show that they ful supported the action of the thi non-official members, James, Joe and Downs, who resigned in Juir JUNE 6, 1960: After a very loi unexplained delay the applicati of the taxpayers’ association (s under August 4, 1959) came befc the Full Court of the High Cou sitting in Melbourne. This nearly one year to the day (June! 1959) after the taxpayers first ma their appeal to the P-NG Suprei Court.