April 26, 1926

CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The House resumed from Friday, April 23, the debate on the motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Hon. R. J. Manion.


CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. W. G. McQUARRIE (New Westminster) :

Mr. Deputy Speaker, may I take

this opportunity of congratulating you upon your appointment to the honourable office which you now hold. I quite appreciate the fact that you have always been an ardent

The Budget-Mi. McQuarrie

supporter of this government, but at the same time I am sure that with your parliamentary experience you will live up to the high traditions of the office.

This budget reminds me of a story which I heard at a Kiwanis luncheon, when I was in my home town during the Easter recess. The story told, by a gentleman from the other side of the line, related to a coloured man named Mose residing in one of the western states. Mose worked on a farm near a small town, where he was considered something of a character. He was remarkable more than anything else for a team which he used. He drove into town on all occasions when there was a celebration and people were struck with this team, which consisted of a steer and a mule. Mose was very proud of the team and he took in good part all the fun which people were in the habit of poking at his outfit. On one occasion a spectator walked up to Mose and asked him how he came to hit upon such an unusual combination. Mose replied: "This am no unusual combination;

this am the best team in the world. ThLf team will go where no other team will go. You see, it's this way: that old steer am stone blind and he can't see where he's going; and that mule-well he don't give a darn." It seems to me that the team of this story typifies very well the leader of the Progressive party (Mr. Forke) and the Prime Minister (Mr. Mackenzie King). Metaphorically speaking, the leader of the Progressive party is blind; he cannot see where he is being driven. He does not appreciate the fact that by the course he is taking he is doing an injury to Canada while at the same time he is being driven out of public life. And the Prime Minister does not "give a dam" so long as he can remain in office.

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Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

Will the hon. gentleman

apply the rest of the story-that it is the best team in the world.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

I suppose my hon.

friend may be regarded as Mose. Now, the leader of the Progressive party has many sterling qualities which endear him to the members of this House. He is no doubt conscientious to a degree; he is goodnatured and always comes back smiling no matter how hard he may be hit. He is industrious and constant in his attendance while the House is in session. However, he is undoubtedly having his troubles and his position as leader of the third party in the House must be an unenviable one. We are all aware of the difficulty he experienced in maintaining the leadership of his party in the last parliament. Anyone desiring particulars in this regard may refer JMr. McQuarrte.]

to the Canadian Annual Review of 1924-25 where, at page 205, he will find a full record of the whole matter. He encountered his main difficulty with some of his supporters who were afterwards known as the Ginger Group, and who objected to the fact that he was always supporting the government, through thick and thin. Well, he is still doing so; he always has been a Liberal, and we may be sure that he will always support the government. Indeed, I fail to understand why he does not cross the floor of the House, like his former chief whip the hon. member for Long Lake (Mr. Johnston), and sit where he belongs. The subterfuge is so obvious that no one is deceived. I notice also that one of his former supporters, Mr. Shaw, who represented one of the Calgary seats in the last House, has gone back to his old allegiance, having been appointed leader of the Liberal party in the province of Alberta. There are in this House, however, some members of the Progressive party who I think are really entitled to be in a third party, because I do not believe they will follow their leader in every course he may pursue. I think we have some hope in this House that some members of the Progressive party will during the course of this session, on some occasions at least, exercise their good judgment.

The other day the leader of the Progressive party said that he had nailed his colours to the mast of his prairie schooner. May I ask him what those colours were? Perhaps I can answer that question myself by saying

Liberal, Liberal, Liberal every time. His remarks on the budget were, as he himself admitted, largely a repetition of the statements made by the Minister1 of Finance (Mr. Robb); he supports the whole thing, lock, stock and barrel. Sometimes, of course, he is inconsistent, but that does not matter For example, he says that he approves of income tax as being direct taxation, and at the same time he glories in the income tax reductions which are provided for in the budget. He declares he is desirous of assisting the automobile manufacturers; nevertheless he approves of the course taken by the government in depriving those manufacturers of a part of the protection which they think necessary to enable them to continue in business in this country. Again, he praises the government for reducing taxation by approximately $25,000,000, but he says that it is unpatriotic for Canadians to grumble and complain because they cannot get their taxes down to the same level as in the United States. I pause to say that I am one of those who hope to see the day when our taxation will be as low as it is in the coun-

The Budget-Mr. McQuarrie

try to the south of us, for it is my opinion that if we wish to build up the population of Canada we must have a taxation which will compare favourably with the taxation levied in the United States.

Does the leader of the Progressive party really think that by assisting the government to retain office he is doing Canada a service? I can inform him that this is not the general impression. I have in my hand an editorial from the Vancouver Daily Province dated January 12, 1926. In passing, I might remark that the Vancouver Daily Province is owned and controlled by the same company which owns and controls the Ottawa Citizen. I hope the leader of the Progressives will take to heart this part of the editorial:

The despatches from Ottawa make it quite plain that the Progressives have no intention of being anything more than a crutch for the King ministry, if, indeed, they will offer that much assistance. They may help the government to limp along for a month or two, possibly until the end of the session. But they are giving no assurance and are making no promises that are in any way negotiable. The government is to be, in a very real sense, a government in custody. It is to be more than that. It is to be a government hobbled and shackled, and with one leg lopped off. If it wishes to march at all, it must march slowly and circumspectly with one eye on the course it is following, and one-a careful one-on its Progressive crutch, which may jump from under the crippled ministry's arm at any moment and precipitate the Premier and his colleagues in the ditch.

This may be very well from the Progressive point off view. But it is rather hard on the country, which emphatically needs at this moment a government possessed of all its limbs and all its faculties and able to lead the country out of the slough of pessimism in which it has been floundering and on to the heights of prosperity. The thing Canada requires is a government which can run and keep its balance, not one which must falter and creep. It is therefore doubtful if the Progressives will be confering any boon on the Dominion by bolstering up the Liberal party.

I notice that the leader of the Progressive? in his speech last week took credit to his party for the revaluation of the soldier settlers land which is proposed in a bill before the House. One might almost think that, he and his party were the only ones who advocated this measure. But that is not correct. Members on this side of the House were just as ardent in support of the revaluation of soldier settlers land as any members of the Progressive group, and I myself on several occasions took the opportunity of supporting this policy on the floor of the House, as will be seen by reference to Hansard.

As to the leader of the Progressive group, it is quite true that he is in control of the government, but he is without responsibility, neither does he receive the emoluments of office. As he is Scotch, it seems to me that

he might improve his position by stepping across the floor of the House and occupying a seat among the members of the government So much for one member of the famous team. Now what about the other? From time immemorial it has been the custom for history to assign nicknames to monarehs, and in good old England, always very conservative, that custom has been followed even from Saxon days. We find for example, in English history the following familiar titles: Ethelbert the Unready, Edward the Confessor, William the Conqueror, William Rufus, Richard Coeur de Lion, William of Orange, and so on. Now, if the Prime Minister were a king in fact, as well as in name, I believe history would assign him a nickname. I pause for suggestions from hon. members as to what that nickname should be. I have thought of one which to me seems very appropriate-William the Wobbler. I think that nickname would be justified. He has wobbled ever since he became Prime Minister. He is always wobbling. The year before the last election he made a tour of Canada and wobbled all the way, more particularly in his statement of his relations with the Progressive party. It will go down in history-in fact it is already written. I have this history before me and I am going to crave the indulgence of the House while I read a portion of it. It is contained in the Canadian Annual Review. The publication has an advisory editorial committee, and the first name on the list is that of the Hon. Rodolphe Lemieux, the Speaker of this House. So this history cannot be considered to be Tory propaganda. In describing the trip which the Prime Minister took in 1924, the Review, at page 207, says:

Probably the most interesting of all the Prime Minister's expressions of opinion during this tour, and the one that brought him into the most direct connection with western politics, was his handling of the relations between the Progressives and the government as representative of the Liberal party.

Xt was noticeable that at first Mr. Mackenzie King was disposed to recognize the Progressives ns a separate party, working in fairly close sympathy with the Liberal party. I^ater, however, he diverged strongly from this division, and argues, rather, that there was no need for a separate group, such as the Progressives, but that all sections of the west tut variance with "Toryism" and in sympathy with the main policy of the Liberal party, particularly on tariff questions, should unite under the government leadership.

This change of position can readily be illustrated from extracts of speeches by the Prime Minister in several centres visited. At Winnipeg he warned has audience against the creation of factions in the ranks of those "opposed to Toryism." What Canada needed for her development, he declared, was a progressive Liberal policy, and the greatest nvsfortune that could overtake the country would be to let

The Budget-Mr. McQuarrie

the "reactionary forces of Toryism," again get control, simply because those opposed to them were divided. He added: I believe it would be much better for Canada if we made the Liberal and Progressive forces as one, and if the causes they have in common were advocated from one end of Canada to the other." At Brandon, Manitoba, he made it clear that the government had not acted "through the pressure of the Progressives of western Canada." "That statement is not true," he said. "We have done what we have done because it was part of our platform, because we said we would do it, if we were returned to power." He went on to refer to a pledge made by Mr. Crerar, and afterwards by Mr. Forke, that the Progressives would give 'honourable support to the Liberal party where the policies of the two were the same. This pledge had been honourably observed. He proceeded: "My task would have been easier had the Progressives in the House been Liberals instead of Progressives." He referred again to his proposal, made at Winnipeg, that the time had come, in the interests of western Canada and (the whole Dominion, when the Progressives and the Liberals should seek out a common ground on which ito stand in opposition to Toryism. Mr. King still seeined to hold out the idea of a combination of the two parities, declaring that he wanted (to emphasize that "if the Liberals and Progressives are united from the Atlantic to the Pacific, there is going to be a long regime of Liberal-Progressive legislation in this country which will help to advance the interesits of not only western Canada,

but of the whole Dominion It is going to

be a poor consolation to the Progressives and a poor consolation to the Liberals to sit together for the next ten or fifteen years and see Mr. Meighen and his high protection group change the fiscal policy of this country that is what would happen if we are divided."

By the time he had reached Saskatoon, however, two days later, he appeared rather inclined to set forth the idea of the west rallying to the support of the Liberals as a party, rather than having a type of working agreement with each operating as a separate organization. He intimated that such an arrangement would not be as effective as if one party alone represented western feeling. At his Saskatoon meeting he declared that the administration of the country and the passing of suitable legislation would be greatly facilitated by a Dominion-wide organization of rightthinking Liberal-minded persons, in place of factions striving for the same ends in different directions. "At present , the Premier declared," only three westerners hold porfolios. Should the west unite and rally to vm. standard of Liberalism, it would be possible to secure a greater measure of support and a greater measure of success in securing the fulfilment of demands." He referred pointedly to there being only one Liberal member from Saskatchewan, with the other fifteen seats "solidly Progressive, and, as such, outside the councils of the administration", and urged the people of Saskatchewan to think well of the situation before they went to the polls. Mr. King again maintained that the concessions made to the west in tariffs, the Crows-nest agreement, and branch lines, had not been brought about nor forced on the government in any sense by the Progressive party.

The Prime Minister also made another speech at Saskatoon, to which I would like to refer. This extract is taken from a Canadian Press despatch dated October 7. 192.5:

Appealing then for Progressive support, Mr. King said that when at the last election, there was a possibility of either of the three parties forming an administration, Progressives were right in supporting the candidates who best represented their ideas. But [Mr McQuarrie.]

if they wished those ideas to be given expression in the present contest, it was of no use voting for Progressives.

Progressives had no hope of forming an administration. "If," he added, "you support a party confined to one part of the country, you immediately help to put that part of the country, so to speak, in opposition to the rest erf the country."

Mr. King held that the attitude of Progressives in the last session, instead of helping the administration, had hampered it in a hundred and one ways. "We have had co-operation, very helpful co-operation, in some cases," said the Premier. "I can tell you as Prime Min ster that every time the government was face to face with some western problem, we had to face the false charge that we were acting as we were because we were living in the grace of the Progressives or because we wanted their support-which made it very difficult for us to do many of the things we would have liked to do.

I quote again from the Canadian Annual Review:

At Prince Albert, the following day, the Premier came back again to the subject, and declared that "it was most unfortunate that we should have been separated into two parties, when our policies were the same. There is no use in being divided into two groups on 'Policies where we should be united against the forces opposing us .. . . What about the Progressives ? It doesn't make my task any easier with respect to the Hudson Bay railway that they are outside the Liberal party. No group of men can threaten the present government that they will put them out of office because they will not do this or that. But the statement that these things the Liberal government has been doing is to get Progressive support has made it very difficult to get millions more for western Canada when the people of eastern Canada can't get the things they need."

It was at Vegreville, Alberta, on the following day, that the Prime Minister suggested thal the Progressive party should come to an end. With the record of the present, administration before the western people, he declared, he felt there were no further grounds for "Progressivism or any other third party" in Canadian politics.

If that is not wobbling I do not know what wobbling is. Then we have the famous Richmond Hill speech. I am not going into that in detail, but when you compare the position held by the Prime Minister to-day with the statements made during that speech I think you will agree that he has wobbled. We heard him the other day addressing a delegation in front of the parliament buildings. It was a splendid delegation; no one could look into the faces of those people, who conducted themselves in the most creditable and orderly manner, and come to any other conclusion than that they were in earnest and that they considered the situation very serious indeed. What did they get from the Prime Minister? He came out to address them, and it was announced that he would bring his cabinet ministers with him, but they were not there. A great many announcements were made to that delegation for the purpose of keeping it there until

The Budget-Mr. McQuarrie

the Prime Minister could come out from his conference with representatives of the delegation. The very capable man in charge made announcements from time to time, one of which I remember that the conference was over and the Prime Minister was going out-going out from the conference and coming outside. Someone in the crowd called out, "Going out of office?" which question seemed to call forth a good deal of applause. The man in charge answered, "I am not a prophet." When the Prime Minister came outside he told them it was a nice day; he was glad it was a nice day, and he hoped they would enjoy their visit to Ottawa. He said, "You know', we have been getting information from your representatives; we have been told things we did not know before; we have been finding that this is going to have a very important effect on the automobile industry and on a great many people. It is a strange thing that no member of parliament has moved a resolution condemning the government for the reductions made in the automobile tariff. Any member of parliament can rise in his place and move an amendment."

Is that statement correct? If I understand parliamentary procedure, Mr. Speaker, only one amendment can be moved to the budget. You will correct me if I am wrong, but the Prime Minister certainly gave these people to understand that it was open to any member of this House to move an amendment. In that respect I contend that he misled those people. But what else did he tell them? He told them the matter would receive consideration, and gave them to understand that the fault was not altogether with the 'government, the inference being that it was largely with the Conservative party, because Conservative members of this House had not given him the necessary information on the subject. The exact contrary is what we are claiming here; we claim that the Conservative members had given him information, and that further information will no doubt be given, in a clear and concise way, to show how these reductions will affect the automobile industry, and the country as a whole. As far as I am concerned I think that the amendment which has been submitted by the hon. member for Fort William, covers the situation completely, and brings the whole matter before this House in a very clear and definite way. I shall not take the time of the House to read the amendment that is now before the Chair.

The Minister of Finance (Mr. Robb), on the other hand, I believe, told the delegation that so far as he was concerned the government was going to stand to their guns, that

is that no change would be made. So I take it that the Prime Minister will have to do a little more wobbling if he is going to retain his Minister of Finance and at the same time make any changes in the budget. Members who were in the last parliament will remember the famous Petersen contract. They will remember how the Prime Minister stood up in this House and stated that the government would stand or fall by the Petersen contract. They also know that the Prime Minister instructed his majority on the special committee which dealt with the Petersen contract to sidetrack the contract for another year at least, to throw it out of the House, and they know that as a consequence poor old Sir William Petersen died after hearing the result. Gentlemen may laugh, but it is not a laughing matter. It is one of the most tragic incidents that ever happend in this city. There was the Prime Minister wobbling again.

Then we were to have Senate reform. You know what the Prime Minister said on the hustings about Senate reform; you know what he said in this House when the Senate did something that he did not highly approve of. He said: We will reform the Senate. But

have you heard of any Senate reform taking place this year? Not a word about it. The Prime Minister had various plans for reforming the Senate, but now he has come to the conclusion that the proper way to reform it is to allow Nature to take its course. On the public platform at various places he has called attention to the fact that a number of the old senators are dying off, and that as he has an opportunity, he will appoint to the Senate his own supporters who will see that the Senate is reformed.

I could go on, Mr. Speaker, and give you many illustrations of how the Prime Minister has wobbled, and is still wobbling, and I think that if he is christened William the Wobbler, it will be most appropriate. Not only does the Prime Minister wobble, but his supporters wobble also. His supporters wobbled during the last election in many constituencies. I, for instance, was opposed by a Liberal candidate who openly advocated protection. Can you believe that? He openly advocated protection. I have here a collection of clippings from newspapers which I have put together, and which tell a very interesting story. I have here, for instance, a number of paid advertisements which my Liberal opponent inserted in the newspapers in my town. He, like other Liberal candidates out there in British Columbia, cannot be charged with any undue modesty because he adopted as a slogan for himself The Man of Destiny-and

The Budget-Mr. McQuarrie

the Hour for New Westminster, and goes on to say:

A. Wells Gray, Liberal Candidate tor New Westminster, Federal Election October 29, 1925. Bora in New Westminster, October 6, 1876, he is a "native son" Oif whom New Westminster may well be proud. His activities in many fields of endeavour have been marked by ability far above the ordinary, and have reflected fame and honour upon his native city.

I would like to read now a little item from one of his paid advertisements, and, as I said, there were many of them:

In voting for Wells Gray for New Westminster the electors are voting for a safe and sane policy of moderate and reasonable tariffs which will foster and encourage trade and industry throughout the Dominion, will strengthen and encourage our foreign trade, and will continually open new markets for our produce. The issue is not between high protection on one hand and free trade on the other. The issue is between a policy of restrictive and prohibitive high tariffs which might benefit a few special interests and a safe system of moderate tariffs successfully promoted and applied by the Mackenzie King, government-a policy which inflicts no hardships, reduces the cost of living to the wage-earner, fosters and encourages industry and commerce, and protects where protection is necessary.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN (Lincoln):

You might read that over again for the benefit of the Saskatchewan bunch.

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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

And emphasize the word 'moderate'-not 'high' tariffs.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

Instead of doing that I shall read from another advertisement of my Liberal opponent:

The Liberal policy of reasonable tariffs protects the fanner wherever protection is necessary, and protects not only the farmer-but the whole mass of workers in the Dominion against an artificial and unnecessary increase in the cost of living. Do you know that there are almost forty articles of farm produce on the present customs tariff in force in Canada? The Canadian farmer is protected by Mackenzie King and if the necessity arises at any time these tariffs could be amended to suit the occasion.

Here is another one:

Fair aud reasonable tariff rates which will promote trade and commerce and open the markets of the world to our products-adequate protection for producer and consumer alike, without increasing the cost of living.

I do not know how the Liberal candidates were in other places, but my opponent, Mr. Gray, seemed to find it necessary to come out for protection, and he made a very close run of it too; I think his statements in regard to protection helped him considerably.

There is another little thing in connection with the election in New Westminster that I might mention. They had a very convenient arrangement there when they were making up the voters' lists, because next door to the registration office where the officials were making up the lists was another office which served

as the Liberal campaign committee room. Outside the office where the voters were being registered was the official proclamation, but the next office had no sign on it at all. People thought that the whole thing together was the registration office, and some would go into the Liberal committee room thinking that was the place to register. They would then be escorted by the people in charge of the committee room into the next office where the registrations were taking place. As soon as registration was over, the Liberal committee rooms were enlarged by taking in the office where the registration had been taking place. Now that kind of an arrangement, it seems to me, is not very decent, to say the least.

Something has been said by the leader of the Progressives in regard to the income tax changes. That subject is necessarily involved in a discussion of the budget. Personally, I am not altogether satisfied with the changes which have been made. I do not say that I am not in favour of reducing the income tax *-not at all; I should like to see it reduced still further-but I do say that the changes made will not have the effect that some people in this country imagine they will have. Comparatively speaking, there are very few people in Canada who will be affected by the extension of the exemption. There are very few people in this country who have to pay any income tax at all, because they are not making enough money. Consequently, the great majority of the Canadian people will not be affected by the increased exemption. On the other hand there are people who are going to be adversety affected, people who have been thrifty enough to accumulate a little money, and to invest it in a safe, sane and conservative manner. Those people are going to be adversely affected. It seems to me the result of that will be to discourage the investment of money 'because individual investors will be taxed to the full extent, although corporations have their tax reduced by one and a half per cent. This will discourage the investment of surplus funds in Canadian industry where it is so much required. A communication dealing with this phase of the subject appears in the Monetary Times of the 23rd instant, and is worth reading.

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

We have all read it.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

I hope you have taken it to heart. There is a point that appeals to me, and that is in regard to the exemption for children. WTe now have an exemption of $500 for children up to the age of eighteen

The Budget-Mr. McQuarrie

years. I think that age should be increased to at least twenty-one years because, those who have to educate their children, particularly if they are trying to give them a higher education which is desired where possible, know that the cost of maintenance, instead of decreasing after eighteen, really increases up to the age of twenty-one years or more. I would suggest therefore that an exemption be granted for children up to the age of twenty-one years. I think also that there should be exemption for life insurance premiums. At present income tax is paid on these premiums. Now, I think it is advisable to encourage the people of this country to take out life insurance. I am not in the life insurance business, by the way, but I carry some life insurance; and in most of the provinces, and in a great many other countries, life insurance premiums are exempt. Then there is the provincial income tax. At the present time we are paying income tax to the Dominion on the amount that we pay to the provincial government for income tax. Then I think also the exemption for municipal taxes should be restored. You may not have noticed it, Mr. Speaker, but if you will refer to the ways and means resolutions you will find:

That the carrying charges or, expenses of unproductive property or assets not acquired for the purposes of a trade, business or calling or of a liability not incurred in connection with a trade, business or calling shall not be allowed as a deduction in determining income.

This means that on all unproductive property we will now have to pay income tax on taxes which we pay to municipalities. I would suggest another thing, and that is that the assessment should be made by the income tax department, and not by the taxpayer himself. It is very difficult for most of us to make out our income tax statement, but it is still more difficult for us to know how much taxation we should pay, and if we do not pay a sufficient amount, we are fined.

Now in regard to income tax, and referring more particularly to the remarks of the leader of the Progressive party on this subject and his support of income 4 p.m. tax, I would point out that in some other dominions the income tax is being very rapidly diminished, and it is the intention of the governments of those dominions to abolish it altogether. That is the case in Australia.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Is there not an income tax

in most of the states?

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

In Australia?

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Yes.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

I am not referring to that, I am referring to the federal income tax in Australia.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

The hon. gentleman just

referred to the fact that the Australian government was considering abolition of the income tax.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

Yes.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

Is not Australia considering the abolition of the income tax because the states have their own income tax?

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

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PRO

John Warwick King

Progressive

Mr. KING (Kootenay):

How much of that would be rebated to the companies?

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

None at all.

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April 26, 1926