3rd Parliament · 2nd Session
Mr. Speaker took the chair at 2.30 p.m., and read prayers.
– I have received the following letter from the Mayor of Murwillumbah, New South Wales,in reply to the telegram of sympathy with thecitizens of that town which was forwarded last week, by order of this House: -
TheHon. Sir F. W. Holder, Speaker, House of Representatives.
Sir, - Iam directed by the mayor on behalf of the citizens of Murwillambah, to convey their appreciation of the kind expressions of sympathy contained in your telegramof Monday last. The many expressions of sympathy and offers of help received from all parts of the Commonwealth will do much to cheer the people here to meet and surmount the many difficulties occasioned by the disastrous fire.
I have the honour to be, Sir,
Your obedient servant,
Topping, Town Cleric.
Report (No. 7) presented by Mr.
Hutchison and read by the Clerk as follows -
The Printing Committee have the honour to report that they have met in Conference with the Printing Committee of the Senate.
The Joint Committee, having considered all the Petitions and Papers presented to Parliament since the last meeting of the Committee, make the following recommendations with respect to such Petitions and Papers as were not ordered by either House to be printed, viz. : -
– I desire to ask the Acting Prime Minister a question relating to the purchase of a site for the erection of Commonwealth offices in London. Yes terday I asked the honorable gentleman if he would give the Senate an opportunity to consider his proposal before opening up negotiations with the London County Council, to which he replied -
If it were not that the date upon which I must give a definite reply is so near, I should take no step until the opinion of the Senate had been obtained ; but as to-morrow is the last day available to me, I have been compelled to take action on the vote in Committee of Supply last night.
In further reply to the following question put by the honorable member for Parkes -
Why did the honorable gentleman wait until the last moment before submitting the matter? the Acting Prime Minister said -
I should have liked to bring it before the Senate, but time would not permit, and a cable has already been despatched to England in connexion with the matter.
While these questions were being asked in this Chamber a similar question was being put in the Senate, to which the Government representative there replied-
– I rise to a point of order.
– The honorable member for Lang is not in order. . What is the point of order of the honorable member for Corio ?
– I submit that the honorable memberfor Lang cannot refer to a discussion which took place in the Senate.
– The honorable member for Lang must not refer to that discussion.
– Cannot I ask a question in regard to it?
– Then I shall have to refer to it upon the motion forthe adjournment of the House.
– The honorable member will see by reference to the Standing Orders that he is not at liberty to refer to debates in another place. He cannot do so, either by way of question or upon the motion for the adjournment of the House.
– Then I will ask the Acting Prime Minister if he has seen the reply ‘ given by the representative of the Government in another place and contrasted it with his own reply, and if so, can he reconcile the two statements ? If he cannot, will he tell the House which is the misleading statement?
– I am sorry that the rules of the House did not allow the honorable member to complete his question. I know what he refers to, and I think that
I know the object which he has in view. The two replies to which reference has been made do not conflict. I saw the answer which I was reported to have made to the -question put by the honorable member yesterday in the Hansard proof last evening, and I wrote upon the proof that the report was not quite correct. The substance of the reply which I gave yesterday was that as to-day was the last day of the option it was necessary for me to take some action at once. I added that I regretted having to take action before the Senate had been afforded an opportunity of dealing with the question, and I also said something in regard to making further inquiries. All that has been done, and all that is intended to be done until the matter has been dealt with by the Senate, is to make inquiries through Captain Collins for the supply of certain information “which was asked for during the course of the debate in this Chamber.
– Then the option does not expire to-day?
– In the cablegram which has been despatched, the Prime Minister has informed Captain Collins of exactly what has taken place so that the London County Council will know that action has been taken by this House, and that probably an offer will be made. But we have made no offer whatever, and we have not committed the Government in any shape or form. We have simply stated that an offer will be made if the conditions relating to the lease of the site are satisfactory.
– Why did the Acting Prime Minister not get an extension of the option ?
– I asked the Prime Minister to despatch the cablegram to which I have referred because I thought it would be unfair not to inform the London County Council - seeing that the option was about to expire - that something would probably be done. I have not the slightest doubt that they .will not close the option knowing as they do that we have not yet had time, to get the matter approved by both Houses of Parliament.
Motion (by Mr. Hutchison) agreed to-
That the petition from electors of Hume which was referred to the Printing Committee, be placed in their custody.
– I desire to make a personal explanation. When the motion for the adjournment of the debate upon the Judiciary Bill was submitted yesterday by the deputy leader of the Opposition, I voted for it as a protest against delay ira dealing with the Tariff proposals. A division was subsequently taken upon ari amendment moved by the deputy leader of the Opposition, and as my name does not appear in the division list I wish to mention that I was inadvertently, not designedly, absent. Had I been present, I should have voted for the amendment asa further protest against delay in dealing with the Tariff.1
– I desire to ask the Minister of Defence whether the Department has adopted a new “service” bridle for the Light Horse, and if so, upon whose recommendation. I also wish to know whether the officers in charge of that branch of the service have been consulted upon the matter in question.
– No final action has yet been taken by the Department. The matter is under consideration. The commandants of the States have been instructed to discuss the question with the men who will have to use the bridles - if they are adopted - before coming to a conclusion in regard to it. When I have their reports I shall be able to give the honorable member further information.
” DOMINION “ OF NEW ZEALAND : CONGRATULATORY TELEGRAM.
– By permission of the House I may perhaps be permitted to make a brief statement. Honorable members will probably have observed from the newspapers that, from to-day, a change is to take place in the designation of what has hitherto been the Colony of New Zealand. From this time forward, in accordance with a resolution which was carried at the late Imperial Conference, the general term “ Dominions “ will be applied to all the self-governing Colonies of the Empire. New Zealand having no other distinctive title, will henceforward be known as a “ Dominion,” instead of a “ Colony,” thus marking the grade, so to speak, of that dependency in the list of Imperial possessions. The title “ Colony “ will be employed hereafter to designate those portions of the Empire which are governed from the Colonial Office, which, in other words, are Crown Colonies. The self-governing colonies in future will be styled generally dominions. Under the circumstances, it has been suggested, and the suggestion appears to be an appropriate one, that a message from this Parliament might be a graceful recognition of the fact that our ties with New Zealand are necessarily closer than those which unite us to any other outlying portion of the Empire. We are not only of one stock, but our whole advance - the whole trend and character of our legislation, and the whole character of our communities are identical. Marching side by side, we have naturally, not only the warmest regard for, butthe deepest interest in, the future of that great and progressive State. There is really no change made except in the official status of New Zealand ; but the occasion is being celebrated there, and a message from the Parliament of the Commonwealth will, I venture to believe, be very acceptable to the people of New Zealand. Under the circumstances, and trusting to have the support of the whole House, I move -
That Mr. Speaker be requested, with the President of the Senate, to send a message conveying the congratulations and good wishes of the Commonwealth to New Zealand, on the occasion of the celebration of its assumption of the new title of “Dominion.”
.- I have great pleasure, indeed, in seconding the motion which has just been submitted; and I may incidentally give myself the satisfaction of expressing my gratification at seeing the Prime Minister back in his place in the House. When the hand of illness is heavy upon even one’s bitterest political opponent, I hope that all political rivalry and feeling expires in the shadow. of such an affliction. I trust that the Prime Minister, in his desire to devote himself to his public duties, will remember that he may, by over devotion, not render the service he desires to renderto the country. With regard to the subject now before the Chamber, I confess that I never attach much importance to questions involved in the names by which British communities are known. But, I think the Prime Minister has done well in seizing this opportunity to express to the people and Government of New Zealand the very strong admiration and affection we feel for that great country. As titles change, and as these growing States rise in the order of national importance, I trust that, great as their future destinies may be, we shall find them always consistent in their loyal devotion to the integrity to the Empire of which we all form a part.
.- I hope I may be permitted to add my support to the motion. The reason I desire to do so is, that I am particularly interested in the new dominion, seeing that my wife is a New Zealander. I have very great pleasure in supporting the motion of the Prime Minister that the congratulations of this Parliament be sent to the Government and people of New Zealand.
Question resolved in the affirmative.
asked the Postmaster-General, upon notice. -
– The answers to the honorable member’s questions are as follow -
Inquiries are being made, and the desired information will be furnished as early as possible.
Overtime : New South Wales Post Offices - District Inspection - Contract System - Public Service Act Amendment
asked the PostmasterGeneral, upon notice -
Whether he is aware that a circular has been issued to all postmasters in New South Wales asking for a return showing -
The overtime worked in their respective offices during a specific period.
– The answer to the honorable member’s questions is as follows : - Inquiries are being made, and the desired information will be furnished as early as possible.
asked the PostmasterGeneral, upon notice -
Does the Minister conclude that the district inspectors have hitherto been lax in supervising the expenditure of officers in their districts?
– The answer to the honorable member’s questions is as follows : -
Inquiries are being made, and the desired information will be furnished as early as possible.
asked the Postmaster- ‘ General, upon notice -
– The answers to the honorable member’s questions are as follow : - 1, 2, and 3. I am not aware that under the system of semi-official post-offices small boys are intrusted with the delivery of letters. I shall be glad, if the honorable member will give me any specific case within his knowledge so that action can be taken.
asked the PostmasterGeneral, upon notice -
– The answers to- the honorable member’s questions are as iolow :- 1 and 2. The question of amending the Public Service Act is under consideration of the Government. I do not admit that there is general confusion in the Postal Department, but anomalies which experience has shown to exist and which form the ground for discontent will, I trust, be removed by the proposed amending Bill.
asked the Prime Minister, upon notice - 1, Is it a fact that duty at the rate of 15 per cent, is being charged (and paid under pro-‘ test) on photographic dry plates and negatives (whether of foreign or British manufacture) notwithstanding that, under the new Tariff, the duty is only 5 per cent: on “ foreign “ imports, and “British” imports are free?
– In answer to the honorable member’s questions, I beg to state -
asked the Prime Minister, u-bon notice - 1
Will he, in order to convenience Members of the House, arrange that in the future the dinner adjournment be from 6 p.m. to 7 p.m., instead of as at present arranged ?
– In answer to the honorable member’s question I beg to state -
It is not intended to propose any alteration at present.
– Why not?
– The time may ‘ come when we shall have to make a change, but it is not proposed to make one at present. We anticipate that no occasion will arise, after what took place last night.
Question - That Mr. Speaker do now leave the chair, and that the House resolve’ itself into Committee of Supply - resolved in the negative.
Motion (by Mr. Groom) proposed -
That this Bill be now read a third time.
– I had not the pleasure of beingpresent when the second reading of this Bill was proposed ; but I wish now to express my very strong disapprobation of the conduct of the Government in not proceeding with the consideration of the Tariff. That is a question, the speedy settlement of which ought to be arrived at, in justice to the enormous interests which are paralyzed by the prevailing uncertainty. Even when a Tariff is almost sure to pass, there is an enormous amount of uncertainty and inconvenience throughout the business community of Australia. But when there is a Tariff which is sure not to pass-
– The right honorable member does not know that.
– I mean that the Tariff is sure not to pass in its present form ; and, therefore, the losses and difficulties are enormously intensified. I suppose there never has been a Tariff proposed which has more severely inconvenienced the community. I do not propose to enter upon the consideration of the fiscal question at the present moment, but I think honorable members on both sides desire to lessen the inconvenience to the people as much as possible. I wish, however, to express my great regret that this Bill has been interposed, with the result that, though it was thoroughly discussed in another place for, I think, some weeks, it is, apparently, going through this House without any consideration at all. We on this side are anxious to relieve the present uncertainty in reference to the Tariff ; and, for my own part, I shall not help the Government in further evading the consideration by the Committee of Ways and Means of their fiscal proposals. I would rather be inclined to allow these Bills to go through without a word, as a roundabout way of compelling the Government to proceed with the Tariff. . Here is a chance presented to the Government to introduce half-a-dozen more Bills ; although I really think we are getting into a state as regards legislation which is not worthy of the House. Isympathize with the Government in the affectionate trustfulness with which they have regarded the Opposition. Ministers seem to think that it is the mission of the Opposition to look after the interests of the Government, when the Government cannot look after those interests for themselves. I had a lively experience of the Acting Prime Minister when he was leader of the Opposition and I was Premier; and I cannot remember that during that five years he ever sent me even a whisper when he had a dagger sharpened for me.
– There were thirteen votes of censure in one session.
– I think there were about thirteen; but one does not mind votes of censure of that description. I entirely sympathize with the Opposition in their attitude towards this Bill. We consider that the public interests would be best served by considering the Tariff as soon as possible, and any attempt by means of. interposing measures, and havinglong discussions on those measures, in order to prevent the great business of this Parliament being proceeded with, will meet with no encouragement on this side of the House.
– In fact, the right honorable member will help the Government to rush it through.
– If any mistake is made in a Bill of this sort, it, of course, can he remedied.
– I was referring to the Tariff.
– I can assure the honorable member that, so far as I am concerned, I shall use every influence I possess to have the Tariff expeditiously dealt with.
– But thoroughly considered.
– I should hope so; consistently with our duty to give thorough consideration to the Tariff, we should all endeavour to put an end to the period of uncertainty. While I hope there may be a full discussion, and a most earnest effort made to reduce many of the exorbitant duties, I also hope we shall endeavour to let people know what the fiscal policy of the country is to be with the least possible delay. That is the spirit, I hope, in which we shall approach the question. What can a zealous Opposition do when the Government are not “ running straight “ ? Only the leaders of the House can conduct the public business with expedition. Every exercise by a vigilant Opposition of their proper duties, in criticising measures introduced by the’ Government, is denounced as unreasoning obstruction. While we must perform our duties, as an Opposition, in vigilantly criticising the Government and their measures, my inclination would be to even abandon that duty in connexion with one or two of the measures before us, in order to bring the Government to the business which all Australia is anxious to have decided. That is, if the Government are ready to . go on with the Tariff ; if they are not, I desire to show them every consideration. Have the Government made up their minds’ about the Tariff?
– Will the right honorable member discuss the question before the House?
– With reference to the Judiciary Bill, I feel -that there is not the slightest advantage to be gained by analyzing its provisions at this, stage, after the display of brute force on the part of the Government. I am told that in consequence of their failure to maintain their position in the House the Government were so frenzied that they threatened an all-night sitting in order that this measure - which, with the exception, perhaps, of the Prime Minister and the Attorney-General, Ministers know nothing about - should be passed. I think that if the Ministry would display the same spirit in dealing with the work which the country is asking them to conclude, it would be well. Why has not the real Minister of Trade and Customs insisted on an immediate settlement of the Tariff? Why does he not exercise the power which he possesses?
– The honorable member is not in order in discussing that matter.
– I have nothing more .to say about it.
– I should like to know, Mr. Speaker, whether the right honorable member for East Sydney is in order in discussing the Tariff on a motion for the third reading of this Bill? If he is, then I shall claim the same latitude.
– It will be-
– I hope that the honorable member for Dalley will not interrupt the proceedings of the House.
– I am putting things right, sir.
– I trust that the honorable member will not disregard the Standing Orders under which we carry on our work. The honorable member for Riverina! will recollect that just before he spoke I asked the leader of the Opposition to confine his remarks to the question before the Chair.
– He took no notice of your request, sir.
– He was doing his best.
-The business of the House will be facilitated if honorable members will comply with the rule which requires silence while the Speaker is speaking. Unless that rule be observed, misunderstandings may arise as to the business before the Chair, a!nd votes may be cast under a “misapprehension. The honorable member for Riverina has called attention to the fact that the right honorable member for East Sydney was transgressing the Standing Orders, but I would .remind him that the honorable gentleman said a few moments before that he was merely referring incidentally to the Tariff.
– That is so. I have nothing more to say.
– I hope that the few remarks I have to offer will not disturb the placid temper which the leader of the Opposition has displayed. I desire, however, to take exception to one or two observations made by him as to the delay in dealing with the Tariff, and also as to the interposition of the Judiciary Bill at this stage. In reply to several questions, I made it clear on three or four occasions that this measure, as well as two others, would be taken at the termination of the general debate on the Budget,- and the passing of the Works and Buildings Estimates. I do not know whether the leader of the Opposition was aware that it was intended in the first instance to proceed with this measure prior to the general debate on the Budget, and thar, as I have said, I subsequently intimated on three or four occasions, that the Judiciary Bill and one or two other measures would be dealt with at this stage. This intention on the part of the Government was well known to the House, and the Judiciary Bill was proceeded with yesterday in accordance with the plan of business which we had mapped out. I do not wish to make any insinuations, but I feel bound to say that the delay in dealing with the Tariff has been due largely to the inordinate length of the debate on the Budget, and to the fact that four or five days were occupied in dealing with the Works and Buildings Estimates.
– Why did not the honorable member insist upon three or four’ all-night sittings ?
– Out of con- sideration for the Opposition I refrained from doing so. Although the debate on the Budget was prolonged, I do not think it could be described as “ stone-walling.” The Government considered that the passing of this Bill was a matter of importance, and determined, therefore, to adhere to its previously-expressed determination to proceed with it yesterday.
– Will the Government put the Seat of Government Bill in the same category? The Acting Prime Minister has been saying for four or five years that the passing of that measure is a matter of importance.
– I trust that the honorable member will, not lose the good humour with which he entered upon this debate. It has been said in reply to questions addressed to Ministers that the Seat of Government Bill will be submitted this session, but I do not think it will be dealt with until this House has disposed of the Tariff. When we resume the discussion of the Tariff it is our intention that it shall be uninterruptedly proceeded with unless special circumstances arise which render that course impossible. So fa.r as we know at present there is no business which need be interposed when once we proceed to discuss the schedule. I trust that we shall have the assistance of the leader of the Opposition and his party in dealing expeditiously with the Tariff. I know that it would be unreasonable to expect them to agree to the class of Tariff that I fa.vour, but I trust, at all events, that they will not indulge in “ stonewalling.” It would be foolish to . suggest that a Tariff should not be fairly discussed, and no one will complain of any reasonable discussion of items which may fairly be debated. If the business set down for consideration to-day is disposed of tonight, we shall be prepared to-morrow to go on with bhe Tariff. As to the Bill now under consideration, the Government had hoped that the discussion which had been foreshadowed would take place on the motion for the second reading. As I have said on several occasions, we did not anticipate that much time would be occupied in dealing with it, since it was a measure likely to interest only the lawyers in the House. We were under the impression that the discussion desired by some honorable members would take place on the motion for the second reading of the Bill, and that we should be able, in the ordinary course of events, to reach the report stage last night. It was only after great loss of time that we were able, about 10.30 last night, to proceed with the debate. The Government saw that, if thev were to get the Bill out of the way within a reasonable time, in order that the Tariff might’ be proceeded with, they must insist on going through with it, and I venture to think that had honorable members followed the lines adopted by the honorable member for Angas–
– And the honorable member did not stop to listen to his speech.
– I did. The honorable member for Angas discussed the Bill dispassionately and threw a good deal of light upon it. It appeared probable that only three or four honorable members would discuss it at any length., and had we proceeded in the ordinary course we should have disposed of the measure about 11.30 last night without any “ jump Jim Crow “ business.
– It was 11.45p.m. when the House adjourned.
– Quite so; but that was after the Opposition had virtually walked out of the House.
– Had they remained to speak the sitting would have been prolonged.
– I do not wish to engage in any recriminations. I did not attempt to pass the Bill through the thirdreading stage last night, because I considered that those who desired to place on record their views in regard to it should have an opportunity to do so at this stage.
– Then the Government gained nothing by the attitude which they took up last night? Thev might just as well have allowed a general debate on the second reading to take place in a proper manner last night.
– Owing to the action of . the Opposition we were prevented from dealing with the Bill in what the honorable member would describe as a proper manner. If the Government had not known how to “act in the emergency which arose the debate on the second reading of the Bill would have been blocked for two or three days. I repeat that on several occasions I intimated that this measure would be submitted before we proceeded to discuss the Tariff schedule.
– There is no dispute as to that.
– I have no desire to say anything calculated to stir up any feeling, and I may say at once that
I hail, with some degree’ of satisfaction, the presence of the leader of the Opposition, who I am sure will maintain the placid mood that he has displayed this afternoon.
– The Government will hear enough from me by-and-by.
– I shall be sorry if any unpleasantness arises, and I hope that honorable members generally will try to be as placid as the leader of the Opposition is to-day.
– I was under the impression that the question before the Chair was the motion for the third reading of the Judiciary Bill; but although I have listened carefully to the Acting Prime Minister I have heard nothing from him save a reference to an incident which took place yesterday, and a few pleasant observations about the leader of the Opposition. The attitude taken up by him may be a judicious one, but I fail to see that his observations were at all relevant to the Bill. I do not think it can be said that he has thrown any light upon it. The honorable member, for Angas, who is well able to deal with the issues raised by the Bill, had the misfortune, last night, to speak to what were practically empty benches. If this measure be as important as it is said to be, I am surprised that at least the lawyers of the House did not remain to criticise, or indorse, his arguments. It may be said that I am simply indulging in the wild ravings of a layman, but I would point out that the leader of the Labour Party last night urged that the passing of this Bill was a matter of great importance, since we had to determine whether the High Court of Australia or the Privy Council should be the final arbiter on all questions relating to the Constitution. In reply to an interjection he said that he would not care if this measure were applied to cases that were now sub judice^ I should like to know whether this is” a move to overcome a difficulty which has occurred between the Government of the Commonwealth and that of New South Wales-.
– I am glad to hear the Attorney-General say “ No” so emphatically. I ask him the further question, has the Bill been introduced to provide for increasing the High Court bench from five to seven Justices?
– If it is passed, that: will certainly be necessary.
– Have we two ready?
– We have already saved a Judge in Victoria, because of the work of the High Court.
– The honorable member for Flinders says that the passing of the* Bill will necessitate the appointment of two additional Justices. Has the Bill beenintroduced to provide positions for two gen:tlemen who are ready to go on to the High Court bench ? The Acting Prime Minister last night attempted to force the measure through the House at all hazards; but now he invites the legal members to criticise it, knowing that such criticism will be futile, because we cannot amend it, and it is not likely that the third reading will benegatived. I understand that the Bill allows an appeal from the decision of a. single Judge of a State Court to the High Court, passing by the Supreme Courts of the States.
– Why not?
– To my mind, this arrangement will only make things better for the wealthy litigant. The man with cash, at his disposal will have at his mercy a rival who is financially weak. It seems tome that this is an attempt to extend thejurisdiction of the High Court.
– It will save money.
– If the honorable member’ is so desirous of saving money, why doeshe not propose the abolition of the’ Supreme Courts of the States? If I had enough talent to be a lawyer, I should welcome this measure as likely to increase my opportunities for employment, because, if I missed Brown when before- a single Judge, I might catch him in the High Court. If the High Court is to supersede the SupremeCourts, it will be farcical to allow them tocontinue in existence. What need will there be for a Supreme Court if appealscan, be taken direct from a single Judge to the High Court? Why not abolish theSupreme Courts altogether, leaving the High Court to do all the appeal work?
– We have not the powerto do that.
– When the establishment of a High Court was first proposed, I wasagainst the appointment of five Judges, and voted for three, and three were at first appointed. Two additional appointments were made subsequently, and now that we have a bench of five Justices, the Government wish to increase it to Severn
They are putting more and more work on the High Court, so as to make it necessary to . appoint more Justices.
– The honorable member is under a misapprehension.
– Perhaps so; but it is amisapprehension which is shared by the public at large, and which it is the duty, of members of the legal profession to remove. I am not the son of a lawyer, and have never had anything to do with lawyers, fortunately enough, because, although I am badly off now, I have seen that those who go to law usually come out very poorly.
– The honorable member might get a great many briefs if he were a lawyer.
– It seems to be the case that, while a few lawyers do well, many of them get no briefs at all. If the High Court Bench is increased to seven Justices, will sectional Courts be appointed, or will the- whole force of seven travel all over Australia? A Bench of seven Justices would be an imposing spectacle.
– There is nothing about seven Justices in the Bill.
– I understand that the passing of the Bill will necessitate the appointment of two more Justices, which will increase the Bench from five to seven Justices. The honorable members for Flinders and East Sydney, who are both lawyers, say that that is what it means.
– I did not say that that is what it means. I asked if two are ready.
– The expression on the honorable member’s face showed that he thought, not only that two are ready, but that they are too ready.. If sectional Courts are appointed, will there be appeals from their decisions to the full Bench? These are fair questions to ask, and a lay member cannot be blamed for resisting the Bill until they are answered. I shall be justified in voting against the third reading if- I do not get full information on the subject. The honorable member for Angas spoke strongly against the measure last night, and the legal members of the House ought to deal with his criticism. If they support him, I shall be justified in voting with other . honorable members against the third reading. As to the constitutional position that the Labour Party thinks so much of, I should like to know whether the Bill will arm the High Court with more power to deal with the Premier of New South Wales. While I like the idea of the unity of the Empire, and would permit appeals to the Privy Council on most matters, there’ can be no better authority than the High Court, composed as it is of Australians familiar with the ideals and desires of the Australian people, for the interpretation of our Constitution. Each of the Justices of the High Court has been at some time in- his life largely instrumental in framing the Constitution, and the Chief Justice is unquestionably one of the highest constitutional Authorities in Australia. Sixteen or seventeen years ago he was greatly complimented for his draftsmanship in connexion with the Constitution prepared by the Convention over which the late Sir Henry Parkes presided. Whatever our opinions of him politically may be, we must admit his pre-eminent ability as a lawyer who played a most important part during the early stages of the Federal movement. Indeed, all the Justices, as I have said, have played an important part in the moulding of our Constitution.
– And in politics.
– Yes. Does the honorable member mean that a recently appointed Judge cannot be regarded as having shed his political leanings?
– There are too many political appointments.
– No doubt there is a great deal in that objection; but our choice is limited, because nearly ail our barristers of eminence haw at some time or other played important parts in the political life of Australia. . I do not suggest that they entered politics as an easy road to advancement in their professional life, and, pos sibly, to preferment to the Bench, but undoubtedly our leading barristers have nearly all been connected with politics. Mr. Justice Higgins is. the only Judge who, so far as I am aware, has given public expression to his political opinions since his elevation to the Bench.
– He has spoken publicly only on social . questions.
– He has spoken publiclyon a political question, and when the Attorney-General’s Estimates come before us I shall deal clearly and distinctly with his action.
– He has a perfect right to speak on national questions.
– I shall not permit myself to be drawn into a discussion of the matter now. I am not concerned with Mr. Justice Higgins, but with the principle involved. Mr. Justice Isaacs lias been particularly careful not to allow the expression of his political opinions to be made public.
– So has Mr. Justice Higgins.
– Why should the Judges be dummies?
– The honorable member is not in order in referring to this matter. It is improper to criticise the action of Judges in this way, and even undesirable that their names should be mentioned.
– I know that the matter can be dealt with, on a distinct motion. I do not think that a Judge should be free from criticism any more than should any other high officer of the Crown.
– The honorable member is at liberty to move a motion.
– I am- endeavouring to urge objections to the passing of this Bill in the absence of further information. I am astonished that last night the AttorneyGeneral, upon a Judiciary Bill of all measures, should have resorted to party tactics for the purpose of forcing the measure through this House.’ I certainly think that the Opposition adopted a most dignified attitude when they refused to fight over it and decided to throw the whole responsibility attaching to the measure upon the Government.
– Hear, hear.
– The honorable member for Barrier says “ Hear, hear “ in a satirical tone. I should like to hear what this’ self-sufficient individual thinks of the Bill under consideration. Is he able to stand up and tell me the meaning of its: provisions? If he is, he is a much more competent person than I credit him with being.
– We are anxious to get on with the Tariff.
– Yet the honorable member for Gippsland heard his own leader invite criticism upon this measure. His professed anxiety -to resume consideration of the Tariff is so much humbug. I am told that the honorable member is a lawyer - I do not know that he is. Some persons are called lawyers who are not at all versed in the law. I should be very glad to hear the honorable member address him- ‘ self to this Bill, and if he will do so, I can assure him that he will have no more attentive listener than myself. I frankly admit that I know nothing whatever about the measure. In conclusion, I trust that the honorable member for Barrier will address the Chamber and explain away the difficulties under which I labour.
Question resolved in the affirmative.
Bill read a third time.
– If the honorable member desires to take any such point of order he may do so now.
– This is a Bill for an Act relating to the taxation by the States of salaries and allowances paid by the Commonwealth. It comes to us1 from the Senate. It is entitled a Bill for’ an Act relating to the taxation by the States of salaries and allowances paid by the Commonwealth. Although the measure does not impose a tax, there is no doubt that it increases the area of taxation, and adds to the number of persons in the Commonwealth who will be liable to taxation.
– It is not a money Bill.
– In the first place I desire to point to section 53 of the Constitution, which reads-
Proposed laws appropriating revenue or money or imposing taxation shall not originate in the Senate.
The whole of that section with the limitations expressly made by the Federal Convention, really embodies a codification of the English practice, as between the House pf Lords and the House of Commons. J. have here the authority of May as to what are really Bills imposing taxation. In regard to the relation of the Home of Lords to charges, I find the following on page 574- “
By the practice and usage based upon that resolution, the Lords are excluded, not only from the power of initiating or amending Bills dealing with public expenditure or revenue, but also’ from initiating public bills which would create a charge upon the people by the imposition of local and other rates, or which deal with the administration or employment of those charges. Bills which thus infringe the privileges of the Commons, when received from the Lords, are either laid aside or postponed for six months.
It follows, accordingly, that the Lords may not amend the provisions in Bills which they receive from the Commons dealing with the above-mentioned subjects, so as to. alter, whether by increase or reduction, the amount of a rate or charge - its duration, mode of assessment, levy, collection, appropriation or management; or the persons who pay, receive, manage, or control it. it may be argued that this Bill does not absolutely tax any of the citizens of the Commonwealth, but merely declares that they shall be liable to taxation imposed by the States - in other words, that they shall no longer be exempted from it. But I would point out that this very class of Bill has been considered by the House of Commons, as will be seen by reference to page 581 of May. There honorable . members will read -
A Bill to continue the Crime and Outrage (Ireland) Act 1854, was introduced in the Lords, but as the Act contained sections which authorized charges upon the county cess and the Consolidated Fund, a clause was inserted which excepted those sections from the operation of the Bill.
In other words, it was admitted that the very extension of the Act to Ireland necessitated the insertion of a clause which exempted certain sections from the operation of the measure. That exemption was agreed to by the House of Commons, and thus the entire Act was continued. Similarly, if the Senate had forwarded this Bill to us and had inserted a- special clause declaring that it did not extend the area of taxation; without the leave of this House, that would have been a parallel procedure. To quote again from May. at the same page -
When the Lords, by an amendment, extended the Contagious Diseases Prevention Bill1846 to Scotland and Ireland, as the Bill contained rating clauses, they inserted a clause providing that the rating power conferred by the Bill should not be thereby extended. To this clause the Commons disagreed ; the Lords did not insist thereon, and thus the whole Bill was extended to Scotland and Ireland.
Dealing with the Bill under consideration, I would point out that in four States of the Commonwealth there are laws which impose income tax upon certain persons. In this Bill the Senate has declared that that tax shall be levied upon certain other persons, who shall no longer be excluded from the operation of the States laws. I hold that a proposed law imposing taxation cannot originate in the Senate. In this connexion, I should like to refer to a. decision which you, sir, gave in 1903, in reference to the Sugar Bounties Bill - a decision in which Sir Edmund Barton, Mr. Isaacs, and the honorable member for East Sydney acquiesced, namely, that the Senate had no right to extend the area of taxation. The Sugar Bounties Bill of 1903 imposed taxation for the purpose of granting sugar bounties. That measure was forwarded to the Senate, where aln amendment was inserted extending the period during which the bounty was payable by two or three months, thus increasing the charge upon the people, and also enlarging the area of taxation. When the Bill was returned to this House you, sir, took up the position that the Senate had not the right to insert such an amendment, because . it increased the charge upon the people. The matter was submitted to the House, and the gentlemen to whom I have referred all held that it was an improper assumption of right by the Senate, and, consequently, the proposal of the other branch of the Legislature was disagreed with, and the Bill was returned to it. Quite apart from the question of whether the Senate and the House of Representatives are parallel bodies to the House of Lords and the House of Commons
– But in all the cases which the honorable member has cited the power of taxation . was delegated. This Bill does not impose taxation, seeing that we do not receive the revenue derived from the income tax.
– It is taxation.
– That is the point - is it taxation ?
– We do not get the revenue.
– We do not get the revenue; and, as I understand, the argument is that because we do not get the revenue, the Bill does not impose taxation on the people. If we give power to another authority to include our people in its area of existing taxation, we ourselves impose the tax. We know when we give the power that we withdraw an exemption from taxation. That is in itself taxation. But if under this Bill a Federal officer be taxed where he was not taxed before, it must be an increase of taxation of the people. Will a citizen of the Commonwealth, in consequence of this Federal legislation, have to pay an increased amount of taxation? I do not think there can be any doubt that the answer is in the affirma- tive ; and, therefore, I think that the Bill infringes the Constitution, and the privileges of the people’s House. This is a serious matter, because it appears to me that all the income tax cases lead to litigation. This is different from ordinary State legislation, in regard to which the Governor’s final acceptance is sufficient. In the case of the Commonwealth there is a printed Constitution; and, therefore, the question as to the legality of this legislation originated in the Senate will” have to be taken to the Courts.
– I am prepared to give a ruling forthwith, because the honorable member for Corio was good enough to intimate to me, when the Bill came down, that he would, at some period of its passage, raise the point to which he has just addressed himself. After a very careful examination of the matters to which the honorable member has just referred, and of others bearing on the question, I desire to point out, first, that there isno parallel between this case and the case of the Sugar Bounties Bill which he cited. In that case there was undoubtedly a proposal to appropriate revenue, but in this case the Bill does not appropriate our revenue or any other revenue for any purpose whatever. Nor do I think there is a parallel between this case and the two cases in British practice referred to. In both of those cases the question of levying either a tax or a rate for the purposes of the British Treasury was distinctly included, while in this case there is no proposition to effect any levying of money on any person, to come within the reach of the Federal Treasurer. We have here a Bill which deals, not with the income of the Federation, but with the incomes of the States ; we contemplate taxation, not by the Commonwealth, but taxation by some, though not all, of the States which at present form the Commonwealth. The Bill professedly makes provision to take away some protection which has hitherto been extended to several public servants, from the operation of State taxation. Clause 2 of the Bill provides that taxation by the States shall not be deemed -
The enacting clauses indicate clearly that this is not a Bill to either appropriate revenue or moneys or to levy taxation; and therefore, I rule, without any hesitation, that the Bill does not come within the provisions of section 53 of the Constitution. I may say, further, that if I had thought the Bill did come within those provisions, and that its introduction in another place, and its transmission to this House, contravened our rights, it would have been my duty to call attention to the fact on its arrival, or as soon as I became aware of what it purported to do. I rule that the Bill is properly before us - that it was not improper for it to originate where it did ; and that it is in no sense a Bill for either the appropriation of moneys or for the taxation of the people far the benefit of the Commonwealth Treasury.
– I now move -
That this Bill be now read a second time. The object of this measure is to enable the allowances and salaries of officers of the Commonwealth and of members of Parliament, earned in a State, to be subject to taxation, in common with the ordinary salaries of the citizens of the State. The question of the liability of Federal officials and Federal members of Parliament has been the subject of discussion for some time in the Commonwealth of Australia. The question, as I stated yesterday, and as honorable members we’ll know, arose in the case of Deakin v. Webb and Lyne v. Webb, in which it was held that Federal Ministers were exempt from State taxation. ‘ That was the effect of the ruling; and the matter of the taxation by the State of Federal officials was taken to the Privy Council in the later case of Outtrim v. Webb, whereupon the Privy Council decided that Commonwealth officials were subject to the State taxation. The matter came up again before the High Court inBaxter’s case.; and the High Court reaffirmedits previous decision that Federal officials were not liable to State taxation by way of income tax. The position is that we have two conflicting decisions, one by the Australian Court and the other by the Privy Council. Inasmuch as the Federal High Court has reaffirmed its decision, the Government feel that, while that decision must be acepted, some effort should be made to obviate its effects, because, as a matter of principle, it is not right that there should be a class in the community. who receive the benefits of State protection, but who do not contribute their fair proportion of taxation in common with the other residents of the State.
– In some States, Federal officials will not contribute under the Bill.
– The Bill will apply to all States where income tax laws exist.
– This Bill only applies, I understand, to Federal salaries?
– That is all we have power to deal with ; and it is only Federal salaries that have been held to be exempt. If” we remove this exemption of Federal officials and ourselves, we shall be placed in nearly the same position as are the citizens of the State.
– Under this Bill some Federal officials will be taxed, while others will escape, because there is no income tax in some of the States.
– Is this Bill of more urgency than the Tariff?
– All I know is that, not only the members of the Government, but also the leader of the Opposition have felt this to be anurgent measure.
– That is so, but -it is not so urgent as the Tariff.
– On the 9th July of this year the leader of the Opposition, speaking in the House, said -
I want to say a word or two about the Bill relating to the High Court and the Privy Council. On matters affecting the rights of the States and the Commonwealth, there is no doubt that the Constitution was intended to make the High Court the ‘final arbiter, with liberty to the High Court, if it pleased, to allow of an appeal. I shall support the Government in any Bill they introduce to make that more clear. I hope the Government will bring in the Bill relating to income tax on Federal salaries as soon as possible. I feel that the present state of things is a hardship on the States, and that we should ourselves clear the path without waiting for the prospective ruinous litigation.
– I repeat that the measure is urgent, but not so urgent as the Tariff.
– It is urgent that, all citizens should be placed on a uniform basis. The matter came up for discussion at the Premiers’ Conference in 1906, and the Prime Minister then promised the Premiers that this Bill would be . introduced.
– But the Premiers would not accept that promise, and went on with the litigation.
– Quite so; but the Prime Minister said that he would wait until the litigation had ceased.
– It has not ceased.
– We believed it to have ceased at the time, and other questions are at issue now. As I say, the position isthat Federal officials are exempt from taxation, and it is desired that the exemption shall be removed. I have not heard any objection raised to this measure. I have not heard it contended that Federal officials, who enjoy the benefits of the free edufcjational systems of the States and’ who have the protection of the States laws in regard to person and property, ought not to paiy their proportion of taxation as doother citizens.
– The Bill applies only to income tax on salaries; and, therefore, in the case of Tasmania, for instance, it would not apply to the abilitytax or the per capita tax.
Sirphilip Fysh. - In Tasmania, thecitizens do not pay a tax on salaries, but according to their abilitv to rent a house.
– We may possibly haveno power to deal with that taxation ; but we can pass uniform legislation in regard: to Federal salaries. All we know is that at present Federal officials are exempt from income tax, and, as we have control1 in that matter, we desire to place all our servants as far as we can on thesame footing as ordinary citizens whodraw similar salaries from other sources. As regards the expediency of the measure, I submit that the proposition has only tobe stated to demonstrate its justice. NoFederal official would, I think, care to feel that he is in a different positionfrom the rest of the community - that he belongs toa sort of privileged class.
– Has the AttorneyGeneral paid his income tax?
– I have paid income tax in Queensland.
– Has the Attorney- General paid the Victorian income tax?
– I paid the Victorian income tax on one occasion under protest, agreeing to be bound by the decision in Deakin v. Webb; and by that decision I have abided. However, it is a question of principle with which I ask honorablemembers to deal.
– Does the Attorney-Genet ral know that under this Bill only Vic-i torian members of Parliament will have to pay?
– I shall go into details when I reach the clauses. The question naturally arises, assuming the judgment of the High Court to be right, what power have we to pass this legislation? That is a fundamental question, which honorable members are entitled to address to me. There are several authorities which I shall submit for the consideration of the House, and on which, I think, I can show that we have the right to pass this legislation. In the first place, I refer to a passage in the majority judgment in Baxter’s case, which may be found in 4 C.L.R., on page 1133 of the authorized reports. The Chief Justice said -
We pass to the minor questions remaining for determination. The question whether a State tax upon the emoluments of Federal officers is within the prohibition is a minor question, for the Federal Parliament can make its grants subject to such a tax. Quilibet renuntiarepotest juripro se introducto.
The majority of the Court stated in that case that the Federal Parliament could make its grants of salaries subject to this tax. At a later stage, on the application for a certificate for leave to appeal, the Chief Justice, in referring to the two ways of putting an end to this conflict, said -
The other way in which the inconvenience can be remedied is one which was pointed out in the judgment of the majority of this Court delivered yesterday. The Federal Pailiament can, if it pleases, make its grants to its servants subject to the right of the States to tax them.
It is only fair to point out to the House that Mr, Justice Higgins dissented from that view, saying -
As to the other suggestion, that the Federal Parliament may make its grants of salary subject to the rights of the States to tax them, i merely refer to it, because i . do not at present want to be committed to any definite view on the subject. At present i cannot see how, if an income tax upon the salary of a Federal servant is made invalid by the Constitution, the Federal Parliament can alter the Constitution bv making the income tax payable. However, i do not wish to make any final pronouncement on the suggestion, which, as far as my memory serves me, has not been mentioned before in this Court. What he said, in effect, was “ I shall make no final pronouncement upon this subject, since the matter has riot been argued:”
– That was a case of one Justice against another.
– No; there were four justices on the bench, and this was a majority decision. I would remind the House that the principle of the decision given in this income tax case was based upon the decision in McCulloch v. Maryland -
When a State attempts to give to its legislative or executive authority an operation, which, if valid, would fetter, control, or interfere with the free exercise of the legislative or executive power of the Commonwealth, the attempt, unless expressly authorized by the Constitution, is to that extent invalid and inoperative.
The Court held that Commonwealth servants are agents of the Commonwealth, and that it is impossible for the Commonwealth to carry on its functions unless those servants are free to carry out the complete work of the Commonwealth under the sole control of the Commonwealth itself. It held, as was held in the United States case of McCulloch v. Maryland, that if a State had power by its legislation to impede, fetter, hinder, or control Commonwealth agents in the performance of their duties, then it would really interfere with the sovereign functions of the Commonwealth itself.
– When was the case of McCulloch v. Maryland decided?
– In 1819.
– Then the judgment was given! by Marshall?
– Yes. It is regarded as one of the finest expositions of law that has ever emanated from a ‘judiciary. It is the fundamental judgment on the interpretation of the Constitution of the United States of America. The reasoning in thalt judgment was as follows -
That the States have no power by taxation or otherwise to retard, impede, burden, or in any manner control, the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the general government.
This great principle is that the Constitution and the laws ‘ made in pursuance thereof are supreme ; that they control the Constitution and laws of the respective States, and cannot be controlled by them; From this, which may be almost termed an axiom, other propositions are deduced as corollaries, on the truth or error of which on their application to this case, the cause has been supposed to depend.
The learned Chief Justice Marshall then laid down three axioms -
It was held, in this case of McCulloch v. Maryland, that the State Government had. no right to tax any of the constitutional means employed by the Government of the Union to execute its constitutional powers -
The States have no power, by taxation or otherwise, to Tetard, impede, burden, or in any manner control, the operations, of the constitu tional laws enacted by Congress to carry into . execution the powers vested in the general government. “Under the authority of the United States law a bank had been established, and the question in this particular case was as to whether or not the State had any power to tax that instrumentality of the Government of the Union.
– There are several bank cases.
– Quite so. I mention this because it is the starting point of all the American decisions on this subject. The principle is clearly laid down that the instrumentalities of the Commonwealth - or in the case of the United States, the instrumentalities of the Central Government - are free from any control or interference on the part of the’ States. The Commonwealth is supreme within the ambit of its own authority, and the States are supreme within the ambit of their authority. It was held in a later case - Dobbins v. The Commissioners of Erie County - that the States Governments could not tax a revenue collector employed by the Federal Government ; or, in other words, that in the United States the salaries of Federal officials were exempt from State taxation. Later on, in the case of The Collector v. Day,- it was held that the converse rule applied, and that the Federal authority had no power to impose a tax upon the salary of a Judge of a State. This case grew out of an attempt of the Collector of the Internal Revenue of the United States to collect a tax on- the salary of a Judge of the State of Massachusetts, levied in accordance with certain Acts of Congress passed ‘in the years 1864-5-6-7. In the judgment, the learned Judge showed very fully the necessity of preserving all the Commonwealth instrumentalities from taxation, pointing out that -
In Dobbins v. The Commissioners of Erie County, it was decided that it was not competent for the Legislature of a State to levy a tax upon the salary or emoluments of an officer of the United States. The decision was placed “ mainly upon the ground that the officer was a means or instrumentality employed for carrying into effect some of the legitimate powers of the government, which could not be interfered’ with by taxation or otherwise by the States, and that the salary or compensation for the service of the officer was inseparably connected with the office; that if the officer, as such was exempt, the salary assigned for his support or maintenance .while holding the office was also, for like reasons, equally exempt.
He said later on -
If the means, and instrumentalities employed by that Government- that “is, the Federal Government - to carry into operation the powers granted to it are, necessarily, and, for the sake of self-preservation, exempt from taxation by the States, why are not those of the States depending upon their reserved powers, for like reasons, equally exempt from Federal taxation ? Their unimpaired existence in the one case is as essential as in the other. It is admitted that there is no express provision in the Constitution that prohibits the general government from taxing the means and instrumentalities of the States, nor is there any prohibiting the States from taxing the means and instrumentalities of that government. In both cases the exemption rests upon necessary implication, and is upheld bv the great law of self-preservation; as any government, whose means employed in conducting its operations, if subject to the control of another and distinct government can exist only at the mercy of that government. Of what avail are these means if another power may tax them at discretion?
Canada was also faced with the question of whether or not the Dominion officials were liable to taxation by provincial Governments. In .a series of cases, with which I do not wish to take up the time of the House, the Judiciary held that the Provinces had no power to tax the Dominion officials. There were one or two judgments in which doubt was cast upon the question, but it is clear that in Canada the Judges, as a whole,, were of opinion that the Dominion officials were not liable to provincial taxation. They followed the reasoning laid down in the case of McCulloch v. Maryland. When we consider the position in Australia, we must realize the value- of such a rule of interpretation as is laid down in that case. What is our position? We have in the Commonwealth and the States two distinct sovereign bodies with complete legislative power exercising an executive power, and carrying on their operations over the same territorial area. The States and the Commonwealth both work under the one written Constitution, and the principles of interpretation applied to its construction should be such as will allow the full exercise of their, sovereign powers within the same territorial area without conflict. The decision in the case of McCulloch v. Maryland, which was followed by the High Court, is one of eminent utility, preserving as it does, the complete sovereignty of the Federal power within the ambit of its authority, and the complete sovereignty of the State’s within the ambit of their authorities. A clear and intelligent principle is laid down for dealing with all cases in which there is a conflict of powers, either by a State attempting to interfere with the exercise of the Commonwealth authority, or the Commonwealth with the exercise of a State authority, and that principle was accepted by the High Court in the case, of D’ Emden v. Pedder, and followed in the case of Deakin v. Webb, in which it was held that the Commonwealth authority cannot be interfered with by a State, and again’ in the case of The Federated Amalgamated Government Railway- and Tramway Service Association v. The New South Wales Railway Traffic Employes Association, in which it was held that the Commonmonwealth cannot interfere with the authority of a State by including its servants’ within a Commonwealth Arbitration Act. The position of the Commonwealth in this matter is exactly the same as that of the Federal Government of the United States. To allow of the proper exercise of the Federal authority certain privileges or immunities are recognised, which protect the agencies and instrumentalities of the Commonwealth. The Commonwealth has the power to create, define, and control its agencies and instrumentalities, and the exemptions and privileges necessary for their protection. That view has been recognised .in the United States. But it has also been held that, although certain banks were protected by the rule in McCulloch v. Maryland, Congress could waive its right to the exemption of its agencies and instrumentalities from taxation, and allow them to be taxed by the State authorities. Several Statutes have been passed by Congress to enable the States to tax Federal instrumentalities or agencies, and the validity of these Statutes has been upheld by a series of decisions by the Supreme Court of the United States. It was decided in 1898, in the case of the Owensboro National Bank v. Owensboro, that two elements were involved in the determination of this question: That is, the extent of the power of the respective States to tax national banks, and the ascertainment of the scope and purport of the law by which the taxes complained of were levied-
Early in the history of this Government, in cases affecting the Bank of the United States, it was held that an agency, such as that bank was adjudged to .be, created for. carrying into effect national powers granted by the Constitution, was not in its capital-, franchises and operations subject to the taxing powers of a State. McCulloch v. Maryland, 4 Wheat. 316; Osborn v. Bank of the United States, 9 Wheat. 738.
The principles settled by the cases just referred to and subsequent decisions were thus stated bv this Court in Davis v. Elmira Savings Bank, 161 U.S. 283.
National banks are instrumentalities of the Federal Government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that an attempt, by a State, to define their duties or control the conduct of their affairs is absolutely void, wherever- such attempted exercise of authority expressly conflicts with the laws of the United States, and either frustrates the purpose of the national legislation or impairs the efficiency of these agencies of the Federal . Government to discharge the duties for the performance of which they were created. These principles are axiomatic, and are sanctioned by the repeated adjudications of - this Court.
It follows then necessarily from these conclusions that the respective States would be wholly without power to levy any tax, either direct or indirect, upon the national banks, their property, assets or franchises, were it not for the permissive ‘ legislation of Congress.
The States could not have taxed these Federal instrumentalities without permissive authority from Congress. Section 5219 of the revised Statutes was quoted in that judgment, and is as follows -
Nothing herein shall prevent all the shares in any association from being included in the valuation of the personal property of the owner or holder of such shares, in assessing taxes imposed by authority of the State within which the association is located; but the Legislature of each State may determine and direct the manner and place of taxing all the shares of national banking associations located within the State, subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such Stale, and that the shares of any national banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associa-tions from either State, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed.
There is a large number of cases dealing with the constitutionality of such legislation, but it has been decided in America over and over again that it is constitutional. I shall not quote other decisions, because I do not wish to labour the matter. The Currency Act of 1894 was another measure passed by Congress to permit of the taxation of a Federal instrumentality by the States, and the preamble to that Act reads -
Be it enacted … .that circulating notes of national banking associations and United States legal tender notes and other notes and certificates of the United _ States payable on demand and circulating or intended to circulate as currency, and gold, silver, or other coin shall be subject to taxation as money on hand or on deposit under the laws of any State or Territory: Provided that any such taxation shall be exercised in the same manner and at the same rate that any such State or Territory shall tax money or currency circulating as money within its jurisdiction.
I wish to refer to one other decision on the subject, that in the case of Austin v. The Alderman, reported in 7 Wallace, 699, a decision given in 1868 -
The right of taxation, where it exists, is necessarily unlimited in its nature. It carries with it inherently the power to embarrass and destroy.
It is well settled that the States cannot exercise this authority in respect to any of the instrumentalities which the general government may create for the performance of its constitutional functions. It is equally well settled, that this exemption may be waived wholly, or with such limitations and qualifications as may be deemed proper, by the law making power of the nation ; but the waiver must be clear, and every well-grounded doubt upon the subject should be resolved in favour of the exemption.
It has been decided by the High Court that the public servants are Commonwealth agencies, whom it is desirable to protect for the purpose of enabling the Commonwealth objects to be carried out without State interference. But the American cases show that this protection can be waived by the Commonwealth, and that we can allow our servants to be taxed by the States. The American decisions amply support that position. We have, therefore, provided in the Bill that-
The taxation by a State, in common with other salaries earned within the State, of -
the official salaries of officers of the Commonwealth residing in the State earned in the State after the commencement of this Act; and
the allowances and salaries, paid after the commencement of this Act, of members of the Parliament elected in the State and of Ministers of State for the Commonwealth, and the Presiding Officer and Chairman of Committees of each House of the Parliament, all being respectively members of the Parliament elected in the State, shall not, if the taxation is not at a higher rate or to a greater extent than is imposed on other salaries of the same amount earned in the State, be deemed -
to be an interference with the exercise of any power of the Commonwealth, or
to be inconsistent with any Act by or in pursuance of which the salary is fixed or made payable.
The present immunity of the public servants of the Commonwealth from taxation by the
States rests on the ground that for the States to tax them would be an interference with the powers of the Commonwealth ; but the American authorities show that we have the right to waivethat exemption, and we now ask Parliament to sanction its waiver, and to permit the salaries to be taxed. In the United States it was held that a State Act providing for the taxation of a Federal official was inconsistent with the Federal Appropriation Act,, and to the extent of its inconsistency invalid. It miay be argued that there is no such inconsistency here, the exemption of our public servants from State taxation being based on the ground that they are Commonwealth instrumentalities and agencies, and should be free from control by any other authority. But, as we have clearly the power to remove the exemption, we are proposing to do so and also declaring that State taxation shall not be deemed inconsistent with the Federal Statute. The Bill provides that the official salaries of officers residing in a State, earned in it, may be taxed in common with other salariesearned in it, the “officer being required topay his fair share towards the cost of the State Government which he enjoys, and that the allowance and salaries of members and Ministers of the Commonwealth earned in a State shall be taxable within the State for which they are elected, so long as the taxation is not at a higher rate or to a greater extent than is imposed on other salaries of the same amount earned in the State. The intention of the measure is toremove what is an anomaly, and recognising that the decision of the High Court wasa good one as a matter of law, to-, place the members of the Commonwealth Public Service and Parliament on. the same footing as other members of thecommunity. I trust that the . House will pass the measure in the form in which it has been introduced, with a slight modification, which I shall submit in Committee.
– I think that the Attorney-General did very well in expounding the. general scope of the measure, particularly from the legal point of view. It would really be a display of a defective sense of proportion on the part of the House if we expended a good deal of time indiscussing whether the measure ought to be dealt with prior to the resumption of the Tariff debate, and neglected to put before the country’ its legal bearings when it did come before us. I do not know however, that we are called upon to give an exposition of the law on such an important matter as one upon which the Privy Council and the High Court have delivered different decisions. Of course, it is interesting to know what was decided, in the case of McCulloch v. Maryland, but if there be any means of getting out of the unfortunate impasse in which we have been landed we ought to adopt it. Personally, I think the policy of allowing the States to- tax such of us as are resident within their borders is a sound one. To the extent that we share in the benefits conferred by a State Government we ought to be prepared to bear our share of taxation. To my mind, therefore, . it is not a question of policy with which we have now to deal, nor, for guidance, is it a question of law. But 1 may, perhaps, be excused for saying a few words upon the probable effect of this Bill from .the legal point of view. The Attorney-General has referred to the case of McCulloch v. Maryland as establishing the fundamental principle under which not only are Federal agencies protected in America from State taxation, but State agencies are protected from Federal taxation. Last night, while the honorable gentleman was referring to the case of The Collector v. Day, in which it was decided that Congress could not tax a State instrumentality, I pointed out that the case of McCulloch v. Maryland should not be too strongly relied upon as an authority for that decision. In the judgment in McCulloch v. Maryland, which I re-read on Sunday evening last, a distinction was clearly drawn by Chief Justice Marshall between the position of a State in taxing an agency of the Federal Government and that of the Federal Government in taxing an agency of a State. If I am not mistaken, in some subsequent cases - if not in the. case of The Collector v. Day - the position expounded by Chief Justice’ Marshall, in the passage referred to, was pressed against the application of the principle of exemption from taxation where the tax was imposed by Congress upon the instrumentality of a State. In the United States Reports, No. 17, which has been referred to by the Attorney-General to-day, that distinction is clearly laid down by Chief Justice Marshall. Upon page 433 I find-
It has also been insisted that, as the power of taxation in the general and State Governments is acknowledged to be concurrent, every argument which would sustain the right of the general Government to tax “banks chartered by the States, will equally sustain the right of the States to tax banks chartered by the general Government. But the two cases are not on the same reason. The people of all the States have created the general Government, and have conferred upon it the general power of taxation. The people of all the States, and the States themselves, are represented in Congress, and, by their representatives, exercise this power. When they tax the chartered institutions of the States, they tax their constituents; and these taxes must be uniform. But when a State taxes the operations of the Government of the United States^ it acts upon institutions created, not by their own constituents, but by people over whom they claim no control. It acts upon the measures of a Government created by others as wei as themselves, for the benefit of others in common with themselves. The difference is that which always exists, and always must exist, between the action of the whole on a part, and the action of a part on the whole - between the laws of a Government declared to be supreme, and those of a Government which, when in opposition to those laws, is not supreme.
Upon the question of supremacy, I would point out that the provisions of our Constitution are not identical with those of the United States Constitution, because in the latter there is an express declaration that the Constitution and the laws of Congress thereunder have a supremacy which is not expressly attached to our laws.
– Is not the effect the same?
– Practically it is. But the United States Constitution contains an express declaration of the supremacy of the laws enacted by Congress under the Constitution. In effect, perhaps, our Constitution operates’ in the same way, though its wording is somewhat different. There is no doubt that the great decision of Chief Justice Marshall deserves the eulogium which has been paid to it by the Attorney-General, and other eulogies which have from time to time been expressed, because it was a decision which does not rely upon a single authority for guidance. It was simply an intuitive declaration. If was really the emanation of true reason from a judicial genius at a time when such a decision was required to save the integrity of the American Union. Marshall refers to the possibility of a tax being imposed which might be justified on the score of its uniformity of application to the instrumentalities upon which is was levied. He says= -
The Court has bestowed on this subject its most deliberate consideration. The result is a conviction that the States have no power, by taxation or otherwise, to retard, impede, burden, or in any .manner control, the operations of the constitutional laws enacted by Congress to carry into execution the powers vested in the general Government. This is, we think,- the unavoidable consequence of that supremacy which .the Con- stitution has declared. We are unanimously of opinion, that the law passed by the Legislature of Maryland, imposing a tax on the Bank of the United States, is unconstitutional and void.
This opinion does not deprive the States of any resources which they originally possessed. It does not extend to a tax paid by the real property of the bank, in common with the other real property within the State, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution,, in common with the other property of the same description throughout the State. But this is a tax on the operations of the bank, and is, consequently, ti lax on the operation of an instrument employed by the Government of the Union to carry its powers into execution.
I may mention that this tax was not a uniform tax of the class mentioned by Marshall, which might come under the general taxation laws of a State. It was a, tax distinctly levied upon institutions created by an outside body, and was not applicable to similar institutions created by the State itself. It was an attempt to prevent the National Bank, established by Congress, from operating within the State of Maryland. I merely mention this fact because we must not deduce a principle as unqualified from a decision in which the principle itself was time after time subjected to the class of qualification mentioned in the quotations I have made. Reference has recently been made in England to this very point in some dissertations prompted by the income tax case.
– The people in England have never heard of the .case of McCulloch v. Maryland.
– Or at any rate, they have not studied it very much.
– Does not the honorable member think that Sir Samuel Griffith is another John Marshall?
– I do not at all discount the comparative ability of our tribunal. No man has a higher opinion of it than I have. Although I opposed its establishment as being somewhat premature, I say that the ability displayed by the members of the High Court, and the general scope of that tribunal, are such as realize our highest expectations. In his speech, the Attorney-General omitted to mention that the real point upon which the validity of this Bill turns - assuming the universality of the principle enunciated in McCulloch v. Maryland - is not whether that principle applies to Australian conditions, but whether the power of exemption which is regarded as correlative to the power to protect is not confined to institutions created by the body that proposes to exempt. The
Attorney-General has referred to the Owensboro ca!se, which was decided in 1898. ‘ In the case of Van Allen v. The Assessors, reported in 3 Wallace, page 574, which was decided in 1870,’ which was the foundation decision! of all these cases, it is made evident that the basis of the power of Congress to permit taxation by the States was the fact that .it was Congress itself which created the instrumentality. That is the English law as well, because it is laid down in the case of Cushing v. Dupuy, reported in 5 Appeal Cases, that if Parliament creates a Court and gives it a right of appeal to the Supreme Court - such as the Bankruptcy Court of Canada - it has the power to take away that which it has given. This corelation of the power to take away, with the power to protect, is identical in principle with that enunciated by the Privy Council in the case of Cushing. v. Dupuy, in which it is laid down that what Parliament gives it may also take away again. We have, therefore, a concurrence of judicial authorities - American and English - upon this point: that the power to protect includes the power to permit exemption, because, if exemption be abused, it is possible to fall back upon the power to protect. If we can create we can abolish, and if the power to create includes the power to abolish, surely it includes the power to exempt I
– Do we not bring into being by our legislation the Executive of the Commonwealth?
– Not the office; though we can alter the number of Ministers and the salaries. I admit that the matter is doubtful, but I am certain, that the validity of this Bill can, with a fair show of success, be argued before the High Court. I do not mind the opinion of that Court; in fact, no opinion has really been given. The whole obiter dicta of the Chief Justice and Mr. Justice O’Connor were on the method that might be adopted, and were directed to an allegation by counsel that we were landed - I forget the words - in a peculiar or unfortunate position. What the Chief Justice and Mr. Justice O’Connor did was to merely suggest a way out, but there was no judicial opinion on the point. None would be more ready than those Judges to upset an obiter dictum which was merely a suggestion on a point raised by counsel - no one would be more ready, on argument, to reverse their first impression.
– It was a dictum in a carefully considered judgment.
– I do not think the AttorneyGeneral should rely on that dictum. If the Judges had given “ a final opinion without hearing argument, they would have been open to criticism. But there was no judgment - merely a suggestion, in reply, as to what might be done as regards legislation which might come before them for interpretation. We cannot take suggestions for our legislation from the Bench which may have to decide as to the constitutionality of our Act.
– It was only an answer to an argument raised by counsel; there was no suggestion as to what we should do here.
– That was all; it was never intended as a suggestion to us. I hope the Minister is not relying on the suggestion from the Bench as an authoritative pronouncement on the validity of the Bill, because it was not intended as anything of the sort. In all the cases in the United States where exemption has been granted, it has been on the ground that Congress created the instrumentality. Congress created, for instance, the national banks, and, therefore, could condition their existence, making one condition liability to State taxation. Congress could abolish the national banks; and, if so, it could permit them to exist, subject to conditions, one of which might be liability to State taxation. But in the case of Van Allen v. The Assessors, which is the basic case of all, there was a very great distinction which alone, perhaps, might be the ground on which the States were held to be incapable of taxing national banks., This case was in relation to the taxation of one of the national banks founded under the Acts of 1863 and 1864 in the United States. These, as the Attorney-General knows, are the celebrated national banks of the United States, which have been. established throughout the country, and taxed by States Acts passed by authority of Congress. The foundation Act was an Act of Congress, which provided for the establishment of those banks, and made them subject to States taxation. . But, in the very Act allowing these banks to be created, one of the conditions was that they should be incorporated subject to the right of the State to tax them. The basis of that decision was that the very existence of the banks was subject to an express statutory declaration of their liability to taxation by the States; on that ground alone the decision was founded. That decision was against the State, because the State had not strictly followed the provisions of the Act of Congress under which the State was permitted to levy the tax. That is, the State was allowed to tax. the shares of the bank, not the capital of the bank, and they could tax the sharesonly to the same extent that they taxed the shares of similar institutions created’ apart from the national banks, so that taxation on similar institutions should be uniform. As the United States Act was not complied with by the Act of the Stateof New York, which imposed a tax on the shares in the hands of their . holders - that is, because the State of New York did not provide for similar taxation in the case of the banks of the State - it was held* that the exemption granted by the Act of Congress did not apply. What I say isthat there is a vital distinction - perhaps I should not say vital - but there is a distinction on which a legal issue mayhereafter arise. There is a distinction’ between permitting by the Act, under which a bank is incorporated, the taxation of its shares, and holding that there may be indirect taxation of institutions, which may have been created, not by us, but by the Constitution. I say “ indirect,” because it is not proposed to tax the Department of Trade ‘ and Customs or the Department of the PostmasterGeneral, but it is proposed to allow salaries attached to those Departments tobe taxed. The question’ arises, is the taxation of the salary a taxation of the office or the Department? Let us turn to one of. the decisions on this point referred to by the Attorney-General. The honorable gentleman referred to the case of Dobbins v. Commissioners of Erie County, and I think I have here a quotation from thedecision. In that decision it is pointed out that a tax on the salary of the office is taxation of an instrumentality,: as being, through the salary, indirectly a taxation of the office. That decision was mainly on the ground that the office was a means or instrumentality, and that the salary or compensation for the services of the officer was connected with the office. But the office itself was the instrumentality; and a good deal of argument, turned on the point whether a tax on the salary indirectly did not amount to .a tax on the office. What is the instrumentality in the case of the Commonwealth? Is it 4he Department of Customs and its officers, or is it .the salary.? I ask that question, applying the decision to which I have referred. It is open to argument’ that the instrumentality is the Department of Trade and Customs, as the executive which must be created by the Constitution. It seems to me that the instrumentality must be the Post Office and the various Departments of State which, though not created by the Constitution, were transferred under the Constitution to our control; and that these Departments will be taxed through the taxation of the salaries. If that be so, we have no power to make the exemption. If honorable members turn to the Constitution, they will find it provided that there shall be a Federal Executive Council, which the GovernorGeneral has to select; and though we may vary the salaries of the Ministers of State, we cannot abolish the offices. If so, can we tax those Ministers, or tax the offices embodied in the Constitution, by the indirect means adopted by the States in the taxation of the salaries? Can we allow the States to do this? I do npt wish to press the matter, which I know is open to two strong views; but we must not be too sure that arguments founded on a somewhat too hasty assumption of the universality of the American decisions, will apply to the conditions of the Australian Constitution.
– They have been pressed too far already.
– Right through the decisions which were relied on in the Senate, and some of which have been referred to by the Attorney-General, the ground is that the office or instrumentality was created by the body which gives the exemption. Take the case of Austin v. The Alderman, reported in 74, United States Law Re-ports. I have the full quotation here, but I do not wish to read the whole. That was the case of a national bank created bv Conpress. The basis of the decision was that a national banking association, created under the law of Congress .might be taxed ; and at page 498 of the report there is this short passage1 -
Any of the instrumentalities which the general Government may create.
The general Government in that case was Congress. In the case of Owensboro National Bank v. Owensboro, Mr. Justice White mentioned that the bank was created for carrying into effect national powers created, again by Congress. In the case of Davies v. Elmira Savings Bank, the complaint was that the taxation impaired . the efficiency of the agencies of the Federal Government to discharge the duties for the performance of which they were created. Those agencies were created, not by the Constitution, but by Congress ; and to give ‘a more extended quotation from the judgment -
National Banks are instrumentalities of the Federal Government created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that any attempt bv a State to define their duties, or to’ control the conduct of their affairs is absolutely void, wherever such, attempted exercise of authority expressly conflicts with the law of the United States and either frustrates the purpose of National Legislation.
In all the cases I have examined, I do not think there is -one to the contrary. The agencies, the taxation of which Congress permitted, were’ created’ by Congress itself. I do not desire to refer at any length again to the case of McCulloch v. Maryland; but in the decision of that celebrated case we find these words -
The sovereignty of a State extends to everything which exists by its own authority, or is introduced by its permission ; but does it extend to those means which are employed by Congress to carry into execution powers conferred on that body by the people of the1 United States? We think it demonstrates that it does not.
Without for one moment saying that the principle in McCulloch v. Maryland is to the same extent applicable to Australia, I ain of opinion that, assuming its application, we cannot deduce from it, with any certainty, the principle of exemption, relied on by the Attorney-General. We have control over the salaries ; but my point is that we may not have control over the existence of the Departments, and what we tax may be the Departments. In the case of Cousins v. The Commonwealth, decided by the High Court, it was laid down that the preservation of accrued rights, such as salaries, applied only until some body of equal authority to that whose powers were transferred to the Commonwealth had interfered with those rights; in other words, that the Commonwealth Government could operate on the salaries similarly to the way irc which the States could operate- on them. That is the reason why the right to increases in salaries under State Acts has been denied in some cases by departmental administration under Commonwealth Acts. The High Court has decided thar we can reduce salaries as preserved, although ‘only temporarily, by the Constitution j but I say that we have not necessarily control over the Departments to the extent of permitting the States to impair them by taxation. Let me make one more reference to McCulloch v. Maryland. Last night I mentioned, trusting to memory, that it was possible that the principle in that case was, even by Marshall, C.J., pushed beyond the necessities of the occasion in 1819 ; and a fortiori, those principles may be pushed beyond the clear necessities of our time. In that case, Marshall, C.J., drew a distinction between the instrumentalities that were necessary, and instrumentalities that were absolutely necessary to the existence of the Government. The decision was, in effect, that the principle of exemption or protection did not apply merely to those that were indispensable or absolutely necessary, but covered agencies which might be conducive to the aims of government. At. page 205 there is the following passage -
If this limited construction of the word “ necessary “ -
That is limiting the instrumentalities to those that go to the very existence of the Federal power - must be abandoned, in order to punish, whence is derived the rule which would reinstate it, when the Government would carry its powers into execution, by means not vindictive in their nature? If the word “necessary” means “ needful,” “ requisite,” “ essential,” or “ conducive to,” in order. to let in the power of punishment for the infraction of law, why, is it not equally comprehensive, when required to authorize the use of means which facilitate the execution of the powers of Government, without the infliction of punishment?
I can only sa.y that if we apply to such a comprehension’ as that the theory of exemption, and declare that every instrumentality that facilitates the operation of the national Government is exempt from State taxation, we shall land ourselves in the position expressed in Cooley on Taxation in the final quotation that I intend to make. In other words, it may extend to a very large number pf instrumentalities, and so mean a tremendous exemption from State taxation. Honorable members will notice that if this be good law, then the States can tax us apart altogether from the law laid down by the Privy Council ; but I am speaking as if neither of the decisions touch .the question. If Cooley has enunciated that which is sound, the States can, it may be, tax us as long as they are not prevented from .doing so by the passing of a Federal Act.
– Is not that in cases of concurrent . legislation ?
– Marshall speaks of this power of taxation as being concurrent. In all these cases the power of taxation is referred to as concurrent, and in one of them there are. comparisons of concurrent quarantine powers. Cooley says -
And the State may tax the property of Federal agencies with other property in the State, and as other property is taxed, when no law of Congress forbids, and when the effect of the taxation will not be to defeat or hinder the operations of the National Government. A different rule, as has been well said, would remove from the reach of State taxation all property of every agent of Government.
I do not intend to further occupy the attention of the House, since I have already spoken at greater length than I had proposed to do. I have offered these considerations in support of the contention that possibly, when the question comes before the High Court, we may find that this Bill is not quite the sound constitutionality that the Attorney-General, perhaps, and some others, believe it to be.
– I believe . that there is a very general feeling in the House, as there is in the country, that some steps should be taken to remove the anomaly under which Commonwealth public servants and members of this Parliament are not liable to pay income tax imposed by a State. As the AttorneyGeneral has pointed out, I have often expressed what I believe is the view held very strongly by most honorable members, that this anomaly should cease. One of the difficulties in the way of its removal was that there was a general feeling, both in the. Public Service and in this Parliament, that the money paid in respect of any income tax should go to the State in which the officers were engaged, or in which members of the Parliament were elected. The feeling with regard to that phase of the question is very strong, and I see that it has been dealt with in this Bill. I have listened attentively to the very able analysis of the position by the honorable and learned member for Angas, and I feel indebted to him for the close attention which he gives to all very large and difficult constitutional questions. .That feeling is one which I am sure is shared generally by the House.
Honorable Members. - Hear, hear.
– I feel all the more indebted to him in this instance, since I have not had an opportunity to give much thought to the question. The very slight consideration that I was able to devote to it, however, suggested to my mind the doubts which have been so ably expressed and illustrated by my honorable and learned friend. If the High Court decided that, as a matter of fact, certain State taxation was an interference with our powers, it would be open, perhaps, to this Parliament to enact that it was not to be deemed to be an interference with our powers. But if the decision of the High Court was - and I believe it was - that any such taxation was ultra vires of the Constitution, how can we, by an Act of Parliament, overcome that difficulty? An amendment of the Constitution must be submitted to a referendum of the people, and must be approved by certain majorities. I speak with very great diffidence, because I have not been able for a long time to look at the judgment of the High Court which has led to the introduction of this Bill ; but the impression conveyed to my mind at the time that I read it was that the decision was that the power exercised by the States was ultra vires of the Constitution. If that be so, how can this Bill make the power intra vires ?
– That is undoubtedly so.
– I repeat that I speak on this subject with the greatest diffidence. I have not had an opportunity to give much attention to it, but my impression is that the High. Court laid down a great principle, which was really a part of the Constitution itself. If the decision of the Court was as I have stated, then this method of legislating in order to overcome the difficulty is perfectly idle.
– Mere make-believe.
– It is worse than that, because, while it will not effect the object aimed at, . it may lead us into far more serious difficulties than have yet been ex perienced. It is possible, of course, that no one will test the constitutionality of the measure; that every one will pay up, and that there will be no appeal to the High Court. In that case this Bill will be eminently sound ; but if there be an appeal under it, I am very much afraid that it will not be found to have removed the difficulties now existing. At the same time, I recognise that it . is a perfectly honest attempt to deal with them,and to rid us of a state of things which I think we are all anxious to remove. I am not going to oppose the Bill; I would prefer not to do so. The expression in the judgment cited by the Attorney-General is one that would be quite consistent with a proposal to effect our object in a different way. It is true that we can make our grants subject to anything, but the . question of whether or not this form of legislation will have the effect intended is quite a different matter. We can embody any provision in an Appropriation ‘Act. Anything that w.e include in such an Act as between the employes of the Commonwealth and the Parliament has all the force of law. We might, for instance, enact in an Appropriation Act that all the salaries of Commonwealth public servants should be subject to a certain deduction, and no power on earth could interfere with such a provision. The State has the power to modify its contracts with its servants in the way I have indicated, and if they are dissatisfied with the new contract they have a very simple remedy. The Bill is very important in the sense that it refers to the legislation of other Parliaments as a kind of legislation which will not be deemed to be an interference with the exercise of any power of the Commonwealth. That seems to suggest untold difficulties in the event of the question being tested. Then we have an exemption proviso.
– That proviso was not in the Bill as introduced in another place, and I have circulated an amendment.
– The opening sentence in the amended proviso proposed by the AttorneyGeneral is as startling as anything I have read in the Bill -
Provided that nothing in this Act shall be deemed to authorize the taxation by a State .
What an extraordinary sort of Bill we are considering - a Bill authorizing certain State Parliaments to legislate, but not to legislate in any other way than we suggest. The expression is a most remarkable one. How can we interfere with Acts passed by the States Legislatures ? This is a sort of business bargain which might be carried out between two individuals or between one Government and another, but when we endeavour to mould the Acts of the Parliaments of the States-
– To mould the legislative powers of the States.
– Quite so. At the first glance, the fonn of expression used in the first part of the proposed amendment seems a most extraordinary one. The remainder of it is practically a repetition of the proviso as it appears in the Bill.
– It was drafted in order to allay certain doubts that have been raised.
– Evidently there have been some doubts in regard to the Bill since it was first introduced. The proviso in the Bill as it stands is -
Provided that in the case of any allowance or salary paid to a member of the Parliament such taxation in respect thereof shall be paid wholly to the State for which such member is a Senator or Representative as the case may be.
There has been a very serious slip since the proviso in the Bill does not cover the salaries of members of the Public Service.
– It was not in the original Bill, but was inserted as an amendment in the Senate.
– And that proviso had no reference to the public servants of the Commonwealth.
– Quite so.
– It was a slip.
– No; it was moved by a private senator.
– I have no doubt that the honorable senator overlooked the position in regard to the public servants of the Commonwealth; the same principle would apply in each case. The effect of the proposed amendment will be to extend a sort of protection to the States. I do not criticise the action of the Government, for I recognise that the matter is a most difficult one to deal with. I have no doubt that they have done their best to meet the difficulty, though I do not feel at all sure that the proper remedy hats been adopted. The chances are - and I hope that it will be so - that members of Parliament and Commonwealth officers will raise no difficulty, by loyally accepting the measure.
– The position seems to me to be this: The highest constitutional authority in Australia, after listening to the arguments of two of the ablest lawyers in the Commonwealth - Mr. Mitchell arid the honorable member for Flinders - decided that the taxation of Commonwealth salaries by the States is unconstitutional. Now, in response to public clamour, the Government bring forward this Bill as a soother.
– It is a reminder that we should do our duty.
– There is nothing to prevent the honorable member from paying income tax. The Bill will not affect me, because the State of Tasmania has not imposed an income tax. My point is that the High Court, having decided that a certain thing was wrong, thisgreat sovereign Parliament should not declare it to be right. We are really juggling in this matter. The great High Court decided that the States have not the powerto tax the salaries of Commonwealth officers. This Parliament was not created by the Parliaments of the States. It is as much the product of the people as are those Parliaments. It is not the creature of the States.
– The States passed the Constitution which created this Parliament.
– The people of the States voted for the Constitution which created this Parliament, and gave to us thirty-nine powers, which were takenfrom the States. In respect to those powers we are protected from interference by the States. I am not speaking on this subject as a lawyer, but am looking’ at it from a reasonable stalnd-point. It seems to me that progress in all linesshould be marked by sense, and’ that liberty should be governed by responsibility. If we declare to be right what we know to be’ wrong, and go on paying because we darenot test the legality of the charge upon us, from fear lest the newspapers may attack us, we show ourselves to be weaklings. Members of Parliament and1 private citizens ought to attack what they know to be wrong, and to support what they believe to be right. The question could not have beenbetter argued before the Supreme Court than it was. I attended at the Court every day, and no doubt the honorable member for Flinders put up a great fight. Now the clamour and excitement caused by the Court’s decision have died down,, and the people are beginning to see that right is right and -that wrong is wrong. A. few years ago I landed in Tasmania especially to come to this Parliament, and becauseI ran for the State Parliament after having been there three weeks, . and polled several hundred votes - being beaten by a few votes only - the Government of Tasmania became excited, and tried to prevent any one from standing for Parliament unless he had lived in the State for two years. They thought that that would reach me. A Bill was introduced to dividethe State into five Federal electorates, and the late Sir Edward Braddon moved that it be read “this day six months.” Members did not hesitate to say that, in view of the immense vote “this Yankee bounder “ had put up for the State Parliament, he was a certainty for the Commonwealth Parliament, but that if the voting were for the whole State he had not a hope of getting in. There is no doubt in my mind, that, if they had had the power to tax my salary, or to tax me into gaol, they would have done so at that time. The Returning Officer refused to accept my application and deposit until I threatened him with a law suit. I am mentioning these facts to show how dangerous it is to permit the States to interfere with the Commonwealth. Suppose the State of Tasmania says, “ As we cannot get rid of this Yankee in any other way, we will bring in a Bill to tax him out.”
– No such Bill would be valid unless it taxed, at the same rate, all othercitizens of the State earning the same income.
– I have had a big fight in that country, but they cannot keep me down. I am there to stay.
– I thought that there was an income tax in Tasmania.
– There is an ability tax, but it does not touch the man of ability. The tax is based on ability to pay.
– It is based on the payment of house rent.
Mr.KING O’MALLEY.- Ido not rent a house there, but live in hotels.
– I thought that the honorable member lived in a tent.
– Our allowance having been raised, it is not necessary for me to do so. No doubt Tasmania would not have permitted me to become a candidate for this Parliament if it could have prevented it. I heard the right honorable leader of the Opposition say, by implication, that the power does not exist in the Commonwealth Parliament to permit a State to tax the salaries of members of Parliament.
– Unless there is an amendment of the Constitution.
– I say that the Bill is a doubtful way of doing it. There may be otherways of doing it. I think that something might be done in connexion with the Appropriation Act which would be perfectly valid.
– I have no objection to being taxed, and if there were an income tax in Tasmania, I should willingly contribute to it, because I am able to pay. Taxation should be based on equality of sacrifice, and should be borne by those able to pay - the wealthy, and not the poor. After all, I should not pay, but those who pay me would do so. Taxation on rents and incomes is ultimately paid by those who sell their labour to make those incomes, or to pay those rents. We have no right to give to any State the power to so tax a man as to prevent him from serving people who want him to serve them. For ten or twelve years before the great American civil war of 1861 to 1865, the Southern States, where they had the power, would have taxed out of the Union every man who sympathized with it. Long before the war commenced, there was a clamour for some such action. But Marshall’s great decision barred the way. Why should we allow the States to have this power of taxation? There must always be an environment of prejudice. Our Chief Justice is the John Marshall of Australia, and we have confidence in every Justice of the High Court. If I did something, and they ordered me to be hanged, I would go out to be hanged with every confidence in the justice of the sentence.
.- Whilst I have no objection to pay taxation on my salary, and I intend to vote for the Bill, I must confess that I have been unable to follow the reasoning adduced by the Attorney-General in support of it. I was very closely connected with the railway men’s dispute, which was brought before the High Court, and followed the argument from point to point. It was decided in that case that the Commonwealth had not power to do anything which might increase the wages of the railway servants of the States. If that is so, I do not see how the States can constitutionally decrease the salaries of Commonwealth servants.’ Mr. Justice Higgins, speaking on this subject, said -
As to the other suggestion, that the Federal Parliament may make its grants of salary subject to the rights of the States to tax them, I merely refer to it, because I do not at present want to be committed to any definite view on the subject. At present I cannot see how, if an income tax upon the salary of a Federal servant is made invalid by the Constitution, the Federal Parliament can alter the Constitution by making the income tax payable.
He, therefore, reserved his opinion until the point is definitely raised and argued. It has been contended that the Commonwealth can waive its rights in this matter, and allow the States to tax the salaries of Federal officers. But, in my view, if 100 persons have certain constitutional rights reserved to them, 99 cannot, by waiver, deprive the hundredth of his right. If the Commonwealth public servants have
Certain rights under the Constitution, we cannot take those rights from them, except so far as they agree with that course, though, as I am a layman, I submit that view with very great diffidence. Another point occurs to me. The Bill assumes that a member of this House earns his salary in the State in which his electorate is situated. I do not think that that is so. The assumption implies that each member of this House represents only his constituency, whereas, in my opinion, he represents the whole Commonwealth, especially on national questions. I object to that portion of the Bill which will permit the Government of Victoria, during the continuance of the Seat of Government in Melbourne, to collect income tax upon Federal salaries aggregating £150,000 annually. I have taken the trouble to extract from the Estimates a -list of the salaries paid to Commonwealth public servants connected with the central administrative Departments in Melbourne. The list is as follows: - Senate, £5,872; House of Representatives, ,£6,445 > Parliamentary Reporting Staff, £5,605 i Library, £731 ; Refreshment Rooms, i Queen’s Hall, messengers, £434 ; gardeners, £432; engineers, £533 J a total of £20,565. In the Department of External Affairs the salaries paid amount to £3,691, exclusive of £760 paid to the clerks of the Executive Council, or £4,451 in all. Ministerial salaries total £12,000. I should like to know whether the salaries of Ministers are earned in Victoria? I do not think that they are.
– Only those Ministers who are elected in Victoria will be required to pay the tax here.
– My view is that the
Salaries of Ministers are earned - not in any particular State - but in the Commonwealth.
– The honorable member must recollect that in Victoria we get the use of Government House and Parliament House free of rent.
– Other salaries include: - Auditor-General, £1,000; Public Service Commissioner, £1,200; Public Service Inspectors, £3,500; High Court Justices; £13,815; total> £31,515.
– Three of the Justices of. the High Court reside in Sydney.
– In the AttorneyGeneral’s Department the salaries paid include - High Court Associates, £2,178; Crown Solicitor’s Department, £2,161 ; total, £6,678. In the Department of Home Affairs, the following salaries are payable : - Administrative, £5,582 ; Electoral Office, £2,120; Public Service Commissioner’s Department, £5,235; Public .Works Department, £3,326 ; Statistician, £2.356 ; Meteorological Department, £4,196 ; total, £22,777. I” the Treasury Department the salaries include - Administrative, £5,421; Audit Office, £5,327; Government Printing Office, £9,482 ; total, £20,230. The Department of Trade and Customs includes - Central staff, £4,938; Patents, £6,213; Trade Marks, £1,345; total, £12,496. The central staff of the Defence Department receive £14,473 in salaries, and that of the PostmasterGeneral’s Department £6,835. ‘ The aggregate total of these salaries is over £140,430. There are also other salaries not included in the list. Therefore, I am not far wrong when I say that £150,000 is annually paid in the form of Federal salaries to officers in Melbourne. This amount would be paid in New South Wales if the Federal Capital Site had been settled.
– No. Commonwealth officers would then be upon neutral territory.
– That is .a further reason why they ought riot to be taxed in Victoria. Taking the exemption at £200, I find that salaries amounting to £79,908 annually would be subject to taxation in New South Wales, which, under, the present income tax, would realize £2,000. per year. Whilst I have no kind of sympathy with those who oppose Federal administration really and mainly because they object to the democratic legislation of this House, still I do object to building up a set of circumstances which enables Victoria to reap huge benefits, both monetary and otherwise, from the unfortunate continuance of the Federal Parliament and Federal Departments of administration in Melbourne.
.- While this Bill has met with universal condemnation by honorable members, none of them seem disposed to vote against it. In the first place, I do not think that it should have been proceeded with whilst the Tariff is awaiting consideration. When I reflect upon the way in which the States Premiers have refused to accept the offer of this Bill, when I recollect that they have harassed our public servants by dragging them before the Privy Council and by declining to accept the decision of the High Court as twice expressed in cases involving the payment of income tax bv Federal officers, it seems to me that consideration of this measure might well have been deferred at least until pending litigation had been disposed of.
– What is the reason of the hurry to pass the Bill?
– I should not like to guess, because my guess might prove to be too true. Although a promise was made that the question of whether Federal officers were liable to State income tax should be settled by a decision of the High Court, I know that the Premier of Victoria, prior to his departure for England, issued special instructions that those officers were not to be treated with any mercy or consideration. Even now, he has allowed a number of cases against them to be simply withdrawn in order that he may be able at a later stage - assuming that he can obtain a decision from the Privy Council in his favour - to disregard the decision of the High Court upon this matter. Instead of coming to the assistance of the States at the present juncture, I feel that we shall be doing the wrong thing by enacting this legislation.
– Has not the High Court power to imprison anybody who violates its decision ?
– I should like to see it exercise that power. I am in favour of the principle of this Bill, but object to it, because I hold that this Parliament has no power to waive the constitutional rights of any man in the Commonwealth. Honorable members may waive their own rights. But ninety-nine men cannot waive the constitutional rights of the one-hundredth man. In the case of Austin v. The Alderman, which is reported in Vol. 74 of the U.S.R., it is laid down -
The right of taxation, where it exists, is necessarily unlimited in its nature. It carries with it inherently the power to embarrass- and destroy.
It is well settled that the States cannot exercise this authority in respect to any of the instrumentalities which the general government may create for the performance of its constitutional functions.’ It is equally well settled that this exemption may be waived wholly, or with such limitations and qualifications as may be deemed proper, by the law-making power of the nation ; but the waiver must be clear, and every well-grounded doubt upon the subject should be resolved in favour of the exemption.
There is not the slightest doubt that this Parliament, if it chooses, has power to de* clare that its own members shall be subject to income tax; but it has no power to decree that a single public servant who refuses to be bound by its action shall be liable to that tax. We have not the power to waive the constitutional rights of any man. Every public servant who refuses to be bound by this legislation, can decline to waive his rights under the Constitution. This Bill should not have been introduced until - after the Commonwealth had taken power to impose a general income tax on all persons within Federal jurisdiction. There is not the slightest doubt that, in trying to escape one anomaly, we are creating several and more serious anomalies.
– Why should the Commonwealth not impose a general income tax now ?
– I think that would be a very proper course. Under section 51 of the Constitution, .the powers of the Commonwealth in the matter of taxation are unlimited. If we pass this Bill, we shall tax the salary of the official in Victoria, New South Wales, Queensland, and South Australia, while we shall allow the Federal servant in Western Australia and Tasmania to escape. Under the Public Service Act, certain rates of remuneration have’ been fixed for certain services; and yet it is proposed by means of this taxation to differentiate between officers occupy. ing exactly similar positions. The Tasmania!! will have a smaller deduction from his salary than the Victorian officer.
– In Tasmania, Federal officials have to pay the ability tax.
– But not ‘ to such a ‘ large amount as the income tax in Victoria.
– Indeed, the taxation is higher in Tasmania.
– If that be so, it only shows that it is the Tasmanian Federal official who is ill-used, and that is equally anomalous. The highest income tax in Australia is levied in Queensland ; and the effect of this Bill will be that Commonwealth public servants will, by means of the varying rates of income tax, receive various rates of remuneration, simply because, by direction of the Public Service Commissioner, they have been located in a particular State. There is even a greater anomaly. Under the Bill, the Attorney-General, for instance, will pay scarcely any income tax. His duties require him to be in Victoria the greater part of the year, and in Queensland he will be charged income tax only for the days during which he resides there. The same applies to any representative of Queensland who, in the course of his parliamentary duties, has to spend ninetenths of his time in Victoria, leaving only one-tenth of his income to be assessed for income tax in Queensland. Honorable memberswill see that as there is usually an exemption up to a certain amount, such a member will pay no income tax. In the case of members of the Government, who receive large salaries, those from other States will pay no income tax. although the Victorian Minister will have to pay the full demand.
– An honorable member or Minister will have to elect to live in one State or another.
– The Bill provides-
Provided that nothing in this Actshall be deemed to authorize the taxation by a State -
of the allowance or salary of a member of the Parliament, or of a Minister of State, or of the Presiding Officer or Chairman of Committees of either House of the Parliament, unless he is a senator or member of the House of Representatives elected in that State.
Under this clause, the Victorian Government cannot impose taxation, although a member from a distance may spend ninetenths of his time within the State. Then, again, this Bill exempts the Justices of the High Court from income tax.
– That is wrong.
– The Bill says-
Provided that nothing in this Act shall be deemed to authorize the taxation by a State -
of the salary of an officer of the Common wealth, unless the officer resides, and the salary is earned, in that State.
Although three of the Justices reside in Sydney and two in Melbourne, their salaries are earned in no particular State -they are absolutely Federal officials.
– Is it true that the salaries of the Commonwealth Justices are protected from any taxation ?
– In the case of Sir Pope Cooper v. The Queensland Commissioner of Taxes, it was held that the income tax is not a diminution of salary under the Constitution; and if it were not for the provision which I have just read, the Justices of the High Court would have to pay. The Inspector-General of the Forces, and other officials, will not have to pay income tax, simply because his salary is earned in every State of the Union.. These, however, are only illustrations of a large number of similar anomalies. I do not think there is any necessity to amend the Constitution. I must say that the States in this matter have acted in the most childish manner; and I do not think that it is right, while litigation is proceeding, that the Federal Parliament should step in with this legislation. Since the States insist on appealing to the Privy Council as against the High Court, I should welcome a proposal to postpone this Bill. Although we have power without any amendment of the Constitution to bring salaries under States taxation, I do not think that is a proper way of attaining our object. I regard this Bill as unconstitutional and illegal, though, of course, I respect Mr. Speaker’s ruling that it is properly before the House. I think, however, that the view I have indicated would be a proper one for a public servant to take in the High Court. There has been discrimination between the citizens of the Commonwealth, in transgression of the Constitution ; and I do not think that a public servant, who resisted the payment of income tax next year, will have his position altered in the slightest by this Bill. It appears to me that the Government have jumped at a casual reference by a Justice in the High Court, although another Judge thought the procedure wrong. I shall vote for this Bill, not because I approve of it, or because I think it will accomplish its purpose, but simply because it seems a sort of public effort to do a just thing - an attempt to meet the public conscience.
.- I am glad that this Bill has been introduced. I have always included my parliamentary stipend in the return of my income. I hold it infamous that I, as a member of the Federal Parliament, should escape taxation while a member of the State Parliament, who lives near me, has to pay the income tax. I have never heard of a Victorian member of Parliament who would advocate that a member of the Federal Parliament from another State should pay the Victorian income tax. I trust that this Bill will be carried through its present stage, though alterations may have to be made in Committee. I resent the idea that any officials who draw salaries from the community should escape taxation; and, therefore, if a vote be taken, I shall be tempted to oppose clause 3.
.- In my opinion, it would have been much better if this matter had been arranged in some other way than by the introduction of this legislation. When the Commonwealth Parliament first assembled, honorable members had not been long here before they received notice from the Victorian Income Tax Commissioner to make certain returns, and, eventually, were assessed on their parliamentary allowance. I do not think that any honorable member objects to paying income tax in his own State; but we do object to the Victorian Income Tax Commissioner being in a position to compel us to pay income tax to the Victorian Government. That seems to be the whole difficulty. Honorable members from other States objected to pay income tax levied by those States when they had hanging over them a possible liability to pay income tax also in Victoria. We were threatened with all sorts of pains and penalties if we did not pay the income tax levied by, this State, and it was only when we took legal advice that we decided to resist the demand. I do noi think any of us objected to pay income tax in the States of which we were representatives.
– A great many of us paid the Victorian income tax.
– That shows that the right honorable member and others did not give the question the consideration that it demanded. We have had an Income Tax Act in operation in Queensland for some time, and I think that honorable members representing that State have no objection to pay the impost levied under it. At the same time, I hope that this Bill will not place us in a difficult position.
– The honorable member will not have to pay any income tax, since he is living here.
– I shall have to pay income tax just as other honorable members will have to do.
– The honorable member’s liability to pay income tax in Queensland will depend upon what he has earned in that State.
– That is where the difficulty arises. I think that we should be called upon to pay income tax in respect of the whole year when it is levied by the State .from which we come. Since «ny parliamentary duties call me away from
Queensland for about eight months in the year, I shall have to pay income tax levied by that State in respect of the allowance received by me during only four months.. The position seems to be a ridiculous one. If we are to pay income tax, we should pay to the State from which we come on the full amount of our allowance. As it is, I shall have, to keep a diary, and note the day when I return to Queensland-, and the day when I leave it, in order that I may be able to submit a proper - statement of the taxable amount of my income. Judging by the views expressed by the lawyers in the House, it seems to me that, under this measure, we shall be called upon to pay only a portion of the income tax that we should legitimately pay in common with other citizens of the States in which we reside. We shall be called upon to pay, not because we can be legally compelled to do so, but simply because we do not wish to occupy a position different from that of other citizens. Such legislation, in the opinion of the Government, may be satisfactory, but I consider it to be the worst that we could enact. I have no objection to the passing of the Bill, but I think that if we have not the power to pass an enactment that will compel every honorable member to pay income tax levied by the State of which he is a representative, then we should procure an amendment of the Constitution so that we may be placed on a level wtih other citizens of the States. I am certainly astonished to learn that, under this “Bill, I shall have to pay income tax* only in respect of the allowance received by me whilst resident in Queensland.
– I understand that the honorable member for Kennedy complains that, under this Bill, Queensland will not be able to require him to pay income tax in respect of the allowance received by him when he is not resident in that State. The desire of the Government, in introducing this measure, is to place honorable members on an equal footing with other citizens of the States. I think, under the Income Tax Acts of all the States, only salaries earned or allowances received in the State in which the impost is levied are taxable.
– Shall I have to pay so’ much in Victoria and so much to Queensland in respect of income tax on my allowance ?
– No; the honorable member1 will be liable for the payment of income tax only in respect of the State of which he is a representative. When an honorable member is away from his own State he is not liable.
– Is there anything to prevent the honorable member from paying income tax to Queensland in respect of the full allowance received by him?
– Does the honorable member suggest that honorable members when away from their own States are not liable to Da.y income tax?
– They are liable to pay income tax in respect of the allowance earned by them whilst they are in their own States.
– What will be the position in regard to the representatives of New South Wales and South Australia who go home every week end?
– That will be a matter for adjustment.
– The South Australian Commissioner has decided that we are not touched by the State Act.
– To a* large extent, the States’ laws will govern the position-.
– Yes, but there is a limit to the operation of the States’ laws. In other words, a State will not be able to impose upon honorable members a greater tax than it can impose upon its other citizens; it will not, under this Bill, be able to tax them in respect of salaries earned or allowances received while they are away from it.
– The representatives of Victoria will have to pay income tax in respect of allowances received during the whole year.
– If they are residing here. The Bill has been subjected to some criticism. The honorable member for Corio is under the impression that it has been originated simply because of the suggestion offered in a certain judgment. As a matter of fact, the question was considered long ago by the Crown Law officers of ‘ the Commonwealth, and on the decision then arrived at the Government decided to introduce a Bill of this description. That being so, it cannot be said that this measure rests merely upon the alleged suggestion contained in a judgment of the High Court. The question of - its constitutionality was very carefully considered. When this question first arose the general opinion seemed to be that there was no way of overcoming the difficulty ; that since this legislation of the States wasultra vires of the Constitution of the Commonwealth, we could not confer upon them the power to tax Commonwealth public servants or members of the Federal Parliament. That question was raised at the outset, and it has been raised^ again this evening. The honorable member for Angas has referred to a matter concerning which I had some doubt when I first investigated the position. It was perfectly clear to me on the authorities that whatever the Commonwealth has power to create it has power to. regulate, and that it has power to decide whether or not its instrumentalities shall be taxed. I do not think there is any doubt on that point. The only misgiving I had was as to whether or not those particular operations or functions which were not created by the legislative authority of the Commonwealth could be subjected to taxation. The honorable member for Angas, with that accuracy of research which always characterizes him, came upon that point. T have here a recent case in which this very point was raised, and To which I intended to refer when moving that the Bill be read a second time. I refer to the case of Home Savings Bank v. Des Moines (October term, 1906, U.S.R.). In that judgment the following passage occurs -
From that lime no one has questioned the immunity of national securities from State taxation. It may well be doubted whether Congress has the power to confer upon the Slates the right to tax obligations of the United States.
A doubt is there raised as to whether the obligations of the United States are liable to taxation.
– What does the honorable member mean by “ obligations “ ?.
– Obligations in respect of loans. If a State could interfere with the power of Congress to float its own loans by heavily taxing its bonds, it would greatly embarrass the national operations and lower the price of the national securities.
– Would the honorable member put a Federal officer in the same category as a bond?
– No ; the two are entirely distinct. In the first place, we have the power to decide how Federal officers shall perform their functions;- whether they shall be partly .State officers or whether, as is the case in the United States, we shall contract for certain services tobe, performed for us.
– That, I think, is what we do.
– That is a position which might arise. The offices held by our servants are created by virtue of our legislation. They are under the complete control of the Parliament, and their salaries are entirely created by the appropriations of the Commonwealth Parliament itself. Therefore, I am of the opinion that, according to the United States authorities, we have the power to deal with these matters. The leader of the Opposition, referring to the point raised by the honorable; member for Angas, said that he had not recently read the judgment of the High Court in the case referred to, but it appeared to him that thp Court had declared that it was unconstitutional for the States to tax Federal agencies, and that therefore we could not confer upon them the power to do so.
– I said that it was ultra vires of the Constitution, and the honorable and learned member for Flinders agreed that it was.
– It is true that the Court held that the Income Tax Act was to that extent inoperative, but we have to look to the reasoning in the judgment. The Court held that the State taxation of Federal officers was unconstitutional, since they were instrumentalities or agencies usedfor carrying out the functions of the Commonwealth Government.
– To the extent that we have a contract with them to perform certain work only.
– The exemption of Commonwealth servants from State taxation is to secure the Commonwealth from interference in the discharge of its proper functions, and it has been held by the United States Courts that the Federal authority has control over exemptions of this kind, and the right, if it chooses, to waive the benefit of them.
– Does that extend to the taxation of our officers in any respect, or only in respect to their salaries ?
– It does not extend to the protection of incomes derived from other sources.
– Will it extend to protection from a per capita tax?
– That opens up another question, and I do not wish to consider difficulties other than those which have been already raised.
Question resolved in the affirmative.
Bill read a second time.
In Committee :
Clause 1 agreed to.
Clause 2 -
The taxation by a State, in common with other salaries earned within the State, of -
the official salaries of officers of the Commonwealth residing iii the State earned in the State after the commencement of this Act ; and
the allowances and salaries, paid after the commencement of this Act, of members of the Parliament elected in the State and of Ministers of State for the Commonwealth, and the Presiding Officer and Chairman of Committees of each House of the Parliament, all being respectively members of the Parliament elected in the State, shall not, if the taxation is not at a higher rate or to a greater extent than is imposed on other salaries of the same amount earned in the State, be deemed -
to be an interference with the exercise of any power of the Commonwealth, or
to be inconsistent with any Act by or in pursuance of which the salary is fixed or made payable.
Provided that in the case of any allowance or salary paid to a member of the Parliament such taxation in respect thereof shall be paid wholly to the State for which such member is 1 senator or representative as the case may be.
– I agree with the Minister that it is equitable and desirable that the public servants of the Commonwealth shall pay their fair share towards the cost of the government of the States in which they reside, and that the members of this Parliament should not be freer from taxation in the States which they represent than are the members of the Parliaments of those States. But this clause deals only with the taxation of salaries, and I wish to know from the Minister whether it is in tended that all taxation levied upon Commonwealth public servants and members of this Parliament equally with other State citizens, no matter whether imposed on salaries or as a capitation or other tax, shall be payable to the States. I do not know whether a capitation tax exists in any of the States.
– In Queensland there was what was called a poll tax, but it was reallv a general income tax.
– If this measure becomes law, would the public servants of the Commonwealth living in a State in which such a tax was imposed be liable to it? In Tasmania there is an ability tax, assessed in accordance with the rental of the house occupied. _ Would Federal servants living in that State in which such a tax was imposed Le liable to it ?
– That might possibly be held not to be a tax on an officer’s Commonwealth salary. The officer subject to it would have to pay it because he was living in a house having a certain rental value.
– I wish to be informed clearly by the Minister whether it is intended that, so long as taxation is imposed equally, Commonwealth officers and members of this Parliament will be compelled to pay their share like other citizens in the State in which they reside ; or is it intended to deal in the Bill with the one inequality that has already arisen, deferring to another occasion the consideration of other inequalities that may arise? Personally, I think that it will be better to provide against all inequalities, instead of leaving loop-holes for further inequalities.
– The loop-holes are very small.
– That may be so; but the nature of the inequalities that may arise will depend on the forms of taxation adopted by the States.
– Each State is. at liberty to impose such taxation as it may think fit.
– The Bill deals only with the taxation of salaries.
– We do not interfere with, the taxation .of the property of Commonwealth servants.
– The Tasmanian ability tax is really an income tax, the taxable amount of the income being estimated according to the value of the house ih which the taxpayer lives.
– A tax of that kind would not come within Baxter’s case.
– I am aware that the Bill deals with a decision already given by the High Court; but the point I take is that it would be better to apply it to all taxation by saying that State taxation shall be paid by Commonwealth public servants and members of this Parliament equally with other citizens of the States in which they reside.
– We can legislate only in respect of . the salaries which they receive from. us. We cannot interfere in regard to the taxation of property which they hold as citizens of the States.
– But the limitation to salaries may create further inequalities.
– If we tried to go further, we might extend the provisions of the measure to something with which we have not power to deal.
– We could not extend them to something with which we have not power to deal, but we could make sure that we are dealing with everything with which we have power to, deal in this matter. I am not certain that we do so by the Bill as it stands. When the Federal territory is fixed, and the Seat of Government located there, a Federal income tax may be imposed, and it would be unjust to compel Commonwealth officers residing in the territory to pay such an income tax if the Commonwealth officers residing elsewhere in the States were allowed to escape the payment of income tax. That is one of mv reasons for supporting this Bill.
– Even when the Bill is passed, the Commonwealth officers who live in States in which there is no income tax will have no income tax to pay.
– Probably in those States sufficient revenue is raised for the purposes of government by other forms of taxation, to which public servants contribute equally with other citizens of the States.
– The honorable member is looking a long way ‘ahead when he speaks of what may happen in the Federal territory.
– Yes, apparently, though probably by-and-by we shall make up our minds to see that -justice is done in this matter. I think that the point raised by the honorable member for Corio is a very important one. Under the Bill as it stands, some members of this Parliament, and some members of the Commonwealth Public Service, will escape the payment of the full income tax which, if they were ordinary citizens, they would have to pay.
– Not many public servants.
– The Judges and. the head of the. Military Forces were mentioned. Under’ the Bill, Commonwealth officers and members of Parliament will have to pay income tax only in respect of that portion of their salary or allowance earned while they are within the States in which they reside. Therefore the -Bill itself creates an inequality.
– In any case, that inequality will cease to exist as soon as Parliament is removed to the permanent Seat of Government.
– The Minister’s interjection provides an argument for not going on with the Bill.
– Ministers, who from the nature of their work are kept for the greater part of the year in Melbourne, will have to pay taxation only in respect to that portion of their remuneration earned while living within the States in which they reside, which may be only one-fourth of the full amount, while ordinary members who travel backwards and forwards between Melbourne and their homes every week, will have to pay taxation on the full amount of their allowance.
– Some Ministers will have to pay taxation on the full amount of their allowance and salary.
– While the Parliament meets in Melbourne, Ministers residing in Victoria will have to pay taxation on the full amount of their salary and allowance, while Ministers partially residing in other States will have to pay on only a portion of the total amount which they receive. That is another inequality.
– I think that we should pay income tax to the State in which we reside on the whole amount of our yearly allowance.
– A commercial man who resides in Sydney, if he spends three or four months a year on business in Victoria, and perhaps another part of the year in a third State, has to pay income tax in each of those States. Does not the Minister think it would be fairer to provide that Ministers and members of the Parliament and Commonwealth officials should pay income tax to the States which they represent on the full amount of their allowance and salary?
– The intention of the Bill is not to compel those whom it affects to pay a greater rate than the ordinary citizens of the States in which they reside. The State of Queensland does not tax salaries which its citizens earn elsewhere.
– The Bill protects from taxation the salaries of Ministers and members while they are living out of the States in which they usually reside, but no similar exemption is provided for other citizens of a State.
– The Bill provides for the taxation of only so much of the salary or allowance as is earned in the State imposing it.
– Ordinary citizens are compelled to pay taxation to other States on what they earn outside the State in which they reside, but the Bill places members of this Parliament and Ministers on a different footing.
Sitting suspended from 6.30 to 7.45 p.m.
– The honorable member for North Sydney has directed his criticisms of this Bill to two points. He claims that we ought to enact that Commonwealth officers shall be liable to any forms of taxation which may be adopted by the States. He expressed the fear that by retaining the Bill in its present form, we may allow a certain number of persons to be exempt from income tax, and to escape their just responsibilities. What are the forms of taxation which may be adopted in the various States? Obviously they must be in the nature of direct taxation. That taxation would either be in the form of a stamp tax, an income tax, a land tax, or a property tax.
– It might be a poll tax or an ability tax.
– That is so. But I would point out to the honorable member that the exemption from taxation by the States of the salaries of Commonwealth officials only protects them so far as that taxation can be said to interfere, impede, control, or hinder them in the performance of their official functions. The decision of the High Court is that if the Commonwealth creates an office and fixes a certain salary in respect of it, the imposition by the States of taxation upon that salary constitutes an interference with the office, because the power to tax implies the power to destroy. Consequently, it is only salaries which are regarded as essential for the upkeep of Federal offices which are held to be exempt from taxation. The judgment of the High Court will not protect Federal officers from other forms of taxation which the States may impose. The mere fact that the owner of property in any other form is a Commonwealth servant would not protect him. As regards a poll tax, I would point out that taxation of that character would probably partake of the form of an income tax. I do not know of any State at the present time in which a poll tax is operative. It is a form of taxation that is almostas obsolete as is the collection of tolls upon the highways. In Queensland, at one time, every person who earned an income - no matter how small it may bewas required to pay income tax. The ability tax, I understand, proceeds upon different lines. It is really an alternative to an income tax. In Tasmania, I think that citizens may either declare their income and be taxed upon it, or they may be taxed upon their ability to pay, in which case the house in which they reside and its rental valuation is taken as the basis of taxation.
– If the valuation is above£400 they may be taxed upon their incomes.
– Residents . of Tasmania pay taxation which is based upon the fact that they are the tenants of certain property. I do not see how we can widen the scope of this Bill to include more than we do. We have merely sought to exercise powers which it seems clear that we can exercise. That is the safe course to pursue. For practical purposes, the Bill will remove the grievance that is at present entertained by the States and the people. The second point which was raised by the honorable member for North Sydney is that it is open to question whether the States should not be permitted to impose taxation upon the full amount of the salaries of members of this Parliament.
– I desire that the salaries shall be deemed -to be earned in the States in which honorable members reside.
– It is a doubtful point whether we can declare that. In this Bill we do not impose any taxation, and we cannot attempt to extend State Acts by the insertion of any such words. The position is that the States tax only the income which is earned within their borders. We propose to leave to them exactly the same power in respect of members of this Parliament as they exercise at present in respect of. other citizens. We should not suggest to the States that they shall discriminate between their own residents, so far as income tax is concerned. If effect were given to the suggestion of the honorable member the States Income Tax Acts would in effect declare : “All citizens in this State shall be taxed upon the incomes which they earn within its borders, but members of the Commonwealth Parliament who reside in this State shall be taxed upon the whole of their income, irrespective of where it may be earned.”
– That is what the Government have provided in this Bill.
– No. The proviso which was inserted in the Bill by the Senate was intended to overcome a doubt which existed in the mind of a certain honorable senator lest Victoria would attempt to tax the salaries of members from othei States. I am not aware that any of the States charge income taxupon salaries earned outside their own borders. All the salaries earned or received in the State of Victoria are liable to income tax.
– The jurisdiction of the States does not extend beyond their own boundaries.
– An attempt to make members of this Parliament liable to income tax in their own States for salaries earned in, -say, Victoria, might be questioned.
– If Madame Melba comes to Victoria, and . remains here for a brief period, she has to pay income tax?
– The AttorneyGeneral himself is making a distinction.
– No doubt the Bill does make a distinction as between members of Parliament. Immediately they cross the borders of their own State, they are not liable to income tax in their own State. I sincerely hope that we shall remain in Melbourne for only a few years longer.
– If that be so, where is the necessity for the Bill ?
– The Bill deals with public servants who will be permanently located in certain parts of Australia. There is no doubt that when we reach the permanent Seat of Government, honorable members and public officers’lresiding within its sacred precincts-
– Under this Bill, where will it be held that Queensland representatives earn their salaries?
– If the Queensland Income Tax Act provides that whoever receives or earns income in that State shall be liable to taxation, Queensland representatives will be liable to pay the tax only in respect of the period during which they are resident there.
– Will they be liable to pay income tax in Melbourne?
– No. The South Australian representatives will be liable to taxation only in respect of the period during which they reside in their own State.
– In this Bill we do not impose any restriction of that sort.
– We are declaring that the salary which an honorable member earns while he is in New South Wales - assuming that, he is a representative of that State - shall be liable to taxation in the same way as is the income of any other citizen.
– Why not let the States Acts operate as they may?
– The States do not, I think, impose income tax upon salaries earned outside their own borders. Should we purport to give them more power to tax than they exercise?
– Why mention the matter at all?
– We simply say to the States, “ Whatever power you may possess to impose taxation upon citizens within your borders we leave to you.” Should a member of this Parliament, when outside his own State, be required to pay more than his proportionate share of taxation ?
– He should pay his share of taxation, no matter where he may be, and then things would average themselves.
– That might create an unfair condition of things. I may tell the honorable member that I had not been in Victoria six months, therefore I was taxed in excess of other members who had been here for nine months.
– That practice has now been abolished.
– I merely mention it with a view to show the anomalies which may be created by allowing a member to he assessed at the different rates prevailing in the States where he happens to be. Is it not better to allow him to be treated in the same way as the other citizens of his own State? All the Bill provides is that. Federal members when in their own States shall be on exactlv the same footing as their fellow citizens. In my ooinion, the scheme of the Bill is fair and iust. and I ask honorable members to acceDt it as introduced.
.- The honorable member for North Sydney is, I think, right on both points. The Minister must admit that there is an omission in line 11, which deals only with the official salaries of officers of the Commonwealth, although there are other sources of income exempt under the High Court judgment. Many Federal officers receive bounties or bonuses in addition to salary, the word “ salary “ having a definite meaning.
– Would not such allowances be reckoned as part of the salary ?
– Certainly not; a salary is the amount earned annually.
– “ Salary “ could not include allowances and bonuses.
– Does the honorable member for Corio not think that such bonuses are very exceptional?
– Certainly not, because in the Estimates, which will come before us, there are several cases in which bounties or bonuses have been given in addition to salaries ; and I think that, under the circumstances, the Attorney-General ought to submit an amendment. The Bill professes to do away with anomalies’, but, as a matter of fact, it creates further anomalies. The Attorney-General pointed out that a Victorian member of the Federal Parliament will pay tax on income earned in 365 days in the year ; a New. South Wales member on the earnings of about 100 days, and Queensland members on the earnings of about two months. There is no doubt that a Federal member from another State, when in Victoria, enjoys the protection of the laws of Victoria; but in answer to that argument the Attorney-General replies that such a member is compelled to come to Victoria in fulfilment of his parliamentary duties. Are Victorian members not compelled to stay in Melbourne? If I, as a Victorian member, stay here and attend to my duty I shall be taxed, but if I chose to neglect those duties and depart for Queensland, I shall, according to the AttorneyGeneral, cease to pay the Victorian income tax in respect of the days I am absent. That is a most extraordinary position, and I shall move an amendment to meet these inequalities when the AttorneyGeneral submits his proposal.
– No honorable member wishes to evaide the payment of any income tax for which he may be liable; but, at the same time, I wish to know whether it is proposed to give to the States a definite power, or to give them an arbitrary power which can only give rise to a; great deal of litigation.
According to the Attorney-General, South Australian members will pay income tax only in respect, of the time they spend in their own State, and not for the time they are in Melbourne ; and some idea ought to be given us of how the exact periods spent in each State are to be arrived alt. My own idea is that there should be no discrimination, but that all should be placed on the same footing by means of a Federal income tax, which will no doubt have to be imposed in the future. I usually spend several days in Victoria, and then several days in South Australia, and part oT every year I am travelling between the two States, on what may be described as no man’s land, about which there is a doubt as to whether it belongs to Victoria or South Australia.
– But the honorable member would claim that land for South Australia.
– Then the honorable member is in no difficulty.
– While we are willing to pay all necessary taxation, we object to giving a State an arbitrary power, which will enable a State officer to determine how much we have to pay. An important principle is at stake; and there ought to be definite powers laid down in order that litigation may be avoided. In my own case, the Income Tax Commissioner of South Australia has disputed the returns I have sent in, and I have had to produce a balance-sheet in order to satisfy him. Under present conditions, trouble and irritation are caused; and officers of the Commonwealth have carried their_ opposition to the Privy Council. Is it desirable to pass this Bill, and thus give rise to endless litigation? It would be better for the Minister to reconsider the matter, with a view to handing over definite, and not arbitrary, powers to the States.
– The honorable member is asking me to take an extraordinary course, namely, to introduce such a complete scheme that no State officer shall be able to make an unreasonable demand. What the Bill provides is that an honorable member shall be liable for income tax on all he earns in his own State. He may keep an account, and on any one who disputes that account the onus of proof will lie. Such disputes arise in connexion with all taxation. Does the honorable member know of any. system of taxation in any part of the world which does not give rise to disputes ?
– That is different from passing legislation which, in itself, will cause disputes.
– The Bill does not attempt to lay down any scheme of taxation. All that is provided is that if an honorable member earns an allowance in his own State he will be liable for income tax on that allowance, in the same way that all the residents of that State are liable on their earnings.
SirJohn Forrest. - Not necessarily on allowances earned in his own State ; it depends on the local law.
– It depends on the local law of the State; and the Bill leaves an honorable member in the same position as the citizens of the State in which he earns his allowance .
– It may be not only on what he earns, but on other sources as in England.
– But the Bill can only make an honorable member liable in respect of what he receives from the Commonwealth.
– Does the AttorneyGeneral say that an honorable member will be liable for income tax in his own State, on the whole of his parliamentary salary, if he is living in Melbourne?
– No, under this Bill a member will be liable in his own State only for the amount earned in his own State.
– But what if the local law provides, as in England, that a person is liable for the whole of his income wherever it may come from?
– The English law possibly makes a distinction between incomes from personal exertion and incomes from property.
– But in England income tax is charged on property which is situated out of England.
– But the income tax contemplated in the Bill is on an income earned by personal exertion.
– What would be the position of a commercial traveller?
– He would be in the same position as other residents of a State.
– I think that the word “ salary “ is the proper one to use, because it isthe designation employed in the Commonwealth Public Service Act that we wish to touch. If we use another word we shall really give power to tax gratuities which have noth ing to do with the constitutional operation of principle. The other word used in the clause as regards members of Parliament is” allowance,” and that is taken from the Constitution, so that we have exhausted the two categories that we wish to touch.
– What about pensions?
– We do not desire that pensions shall be taxed. Surely we give pensions not to officers, but to men who have ceased to be officers of the Public Service.
– But a pension is part of a Federal right, and is protected by the Federal cloak.
– As soon as a person ceases to be an officer he becomes an ordinary private citizen receiving a pension for what he did as an officer.
– Is a Federal pension exempt under the decision in the Baxter case ?
– I do not think it is. I do not think that we can say that a salary paid in a State is paid as a pension,or in other words that an officer is remunerated in futuro. If that decision does touch a pension then that pension is a postponed salary. My first impression was that this clause should commence with the words, “ The taxation by a State, in common with other salaries, subject to the taxing power of the State.” I do not suggest that we should give power to tax the whole of the salary, because that would mean that a State would be empowered to tax all income, although it might not be wholly earned in the State in which the member or officer for the time being resided.Upon consideration, I think that the safest course to follow is to provide that a State shall have power to tax salaries “ earned “ in that State. That will practically mean that a member will be taxed in each State only in respect to salary earned during his residence there. Acting on that principle, I paid income tax even before the decision of the High Court. I paid it in Victoria in proportion to the number of days I served here, but although ready and willing to do so, I did not pay it in South Australia, because the Commissioner, in reply” to some correspondence that I sent in, told me he did not think the local Act touched the position.
– I recognise that the legal questions arising under this Bill must be left for the lawyers in the House to deal with; but so far as the broad principle at issue is concerned, I think that every honorable member in respect of his total allowance should pay income tax to the State of which he is a representative. There are members of this Legislature who have from the first paid income tax to their own States. Would it not be manifestly unfair for an honorable member to pay to Victoria income tax in respect of the allowance received by him whilst attending to his parliamentary duties in Melbourne for, say, ten months, and to pay income tax in respect of only two months to the State in which he was elected?
– Representatives of other States will not pay income tax in Victoria.
– I am inclined to think that a good deal will hinge on the definition of the word” residing.” Many of us have our homes in other States, but are compelled to reside here for seven, eight, or ten months, according to the duration of each session. I think we should clearly provide in the Bill that income tax shall be paid by members of this Legislature to the States in which they reside, or, in other words, to the States where they have their homes. Some of us have not taken advantage of the technicalities of the law to avoid payment of the tax. We have paid income tax into our own States’ treasuries, and it would be unfair to ask us ‘to pay a second tax into the treasury of another State. I intend to pay income tax in Tasmania, and when I have done that I feel that I shall have done all that I should be asked to do. Endless difficulties would arise if the income tax payable by us were to be divided amongst two or three States. The whole of the officers of the Commonwealth public service, as well as the members of the Federal Parliament, should bear a reasonable share of the taxation of the State from which they derive all the benefits of citizenship. Federal officers who have taken advantage of the law to resist the payment of income tax, which State civil servants receiving lower salaries have to pay, have, to my mind, acted rather meanly. Unless the position is made clear in this Bill, I shall move the insertion of a clause in the Appropriation Bill providing that all officers of the Commonwealth shall be compelled to accept the full and complete responsibilities of citizenship borne by other members of the community: They should contribute to the cost of the government of the State by whose laws they are protected and benefited.
.- I should like the Attorney -General to make it perfectly clear that under this Bill members of the Federal legislature will be called upon to pay income tax in the States in which they are elected. I agree with the honorable member for Franklin that that course should be adopted, but I fail to see why I, as a representative of South Australia, should be called upon to pay income tax in Victoria. If our liability in this respect were to be divided among two or three States, we should have endless difficulty in keeping a set of books to determine the proportion of income tax to be paid in each of the States of the Union.
– Under this Bill, every honorable member will have to pay income tax only in his own State. I have an amendment which will make that point perfectly clear.
– Where will Ministers pay income tax?
– In the States in which they are elected.
– They may not pay at all. A Minister might reside here continuously, and yet not be liable to pay income tax since he was elected in another State.
Mr.GROOM.- That is an exceptional case.
– But surely it suggests bad drafting.
– We should not alter the general scheme of the Bill merely for the sake of providing for a possibility.
– But the Bill as it . stands will exempt all Ministers.
– No. Lastyear I paid income tax in Queensland in- respect of the allowance received by mefor the four months during, which I was in that State.
– But it cannot be said, under this Bill, that the honorable member earns his salary there.
– I contend that I do when I am attending to my parliamentary duties in that State, and I plead guiltv to having done a good deal of administrative work while in Toowoomba.
– The honorable member would pay income tax only in respect of the time that he was in Queensland ?
– That is so. T think T have answered the question raised by the honorable member for Barker.
– Will the honorable member make it clear that under this Bill Ministers will have to pay income tax?
– It is clear that they will pay income tax in respect of the allowance received by them whilst in the States in which they were elected.
.- Under the Bill, as it stands, Ministers will be exempt. The tax relates to salaries earned in a State. Ministers, if they earn their salaries - and some of us have some doubt’s on the point - earn them in Victoria. But under this Bill they could ‘ not be taxed in Victoria if they were not elected here. In these circumstances, the Government think this is a splendid Bill, and are anxious to pass it. On the spur of the moment, I cannot suggest an amendment to meet the difficulty, but if the Minister will follow the lines of the amendment suggested by me and insert a provision that a member is not to be taxed in two States he will do well .
– It is difficult to alter the scheme of the Bill.
– Bring the Ministers within its scope.
Mr.Groom. - They are.
– The honorable member should bring them within the scope of the Bill by inserting words showing that they come within the scope of laws -aonlfcable to persons in their positions, and then’ provide that no man is to be taxed in two States. If that be not done, a man may be taxed in South Australia and Victoria in respect of the same salary.
– I think that the honorable member for Angas. is under a misapprehension in regard to the position of Ministers under the Bill. Let us take a concrete instance. All Ministers elected in Victoria will pay income tax on salaries” earned whilst in this State. Then again the representatives of New South Wales in the Ministry reside, I believe, in that State during the recess, and will be liable to pay income tax in respect of their period of residence there. Ex-Senator Plavford, when in the Ministry, always resided in South Australia.
– He was not earning his salarv there.
– He was, while there. Where a man is paid so much per month one cannot split up his salary saying, “ He did this thing in one
State, and it is worth so much, and he did this in another, and it is also worth so much.” His salary is dealt with upon a monthly basis. The only Ministers who would be exempt are those coming from a distant State like Queensland or Western Australia, and who might be here all the year round.
– Why shouldnot such Ministerspay income tax?
– They will in respect of the time they reside in their own State.
– As a matter of fact, Ministers often reside here all the year round.
– Some of them do, butI do not think that any of them give up their homes in the States in which they are elected. We have to deal with these matters upon a general principle.
– Surely we cannot legislate for the exceptions.
– We cannot legislate to meet one or two individual cases. The Bill has a general application.
– There is an attempt under this Bill to legislate as if we were not only a Commonwealth Parliament, but a Legislature possessing the powers of the States Parliaments. We propose to relieve the States from the difficulty which has arisen owing to the decision of the High Court that the State taxation of the salaries and allowances of Federal officers and members of Parliament is an interference with the instrumentalities of the Commonwealth. We could pass a Bill declaring, as this Bill does, that the taxation by the States of Commonwealth officers, members, or Ministers, shall not be deemed to be an interference with the powers of the Commonwealth; but we cannot in our legislation lay down conditions governing the framing of State taxation legislation. Therefore. I think that these proviso? would be ruled out as containing merely idle words ; that the High Court would probably give effect to the main provisions of the measure, and say in regard to the other provisions that we have no power to dictate to the Parliaments of the States how thev shall legislate.
– We have not even the power of suggesting.
– We have the power of suggesting which the man in the street has. While we propose to remove a constitutional difficulty by saying to the
State authorities, “ You may tax the salaries of Commonwealth public servants, members and Ministers,” we say at the same time, “ We shall not allow you to tax them unless you frame your Income Tax Acts as we tell you to frame them.”
– I donot see words in the Bill which support that view.
– By passing the Bill we propose to waive our right not to have the instrumentalities of the Commonwealth interfered with, which is equivalent to saying to the authorities of the States, “ You may tax Commonwealth officers, members, and Ministers who reside within your jurisdiction.” But having done that we say, “ Whilst we waive our existing right, allowing you to tax these salaries, you must tax them only in a certain way,” thereby introducing a stipulation which we cannot enforce, because we cannot limit the powers of a State Parliament in regard to income tax legislation.
– We can define the extent to which our waiver shall operate.
– By passing the Bill we are declaring that we waive certain rights; but it is proposed to add, “ Providing that the State legislation is such as we wish it to be.” I think that the Court would give effect to the waiver, and put aside the attempt to interfere with the legislation of the States. Does any one in the wildest flight of folly . imagine that we can dictate to the Parliaments of the States in regard to a matter completely within their jurisdiction? The AttorneyGeneral suggests that we are merely stating the conditions of the waiver. We cannot do that. We cannot by an Act of Parliament create a treaty or bargain. The consent of both parties concerned is essential to the validity of such an arrangement. I am inclined to think that there is a number of hidden difficulties in the Bill, but this absurdity is obvious. We cannot say to the States in one breath, “ We shall not regard your exercise of your power to pass income taxation affecting. Commonwealth servants, members and Ministers as an interference with our instrumentalities.” and, in the next, “ We shall regard it as an interference unless you pass your Income Tax Acts in a way which will suit us.” The two statements are inconsistent, and, to give effect to the measure, one of them must be rejected. In my opinion, if the Bill is constitutionally valid, about which I am not at all sure, effect will be given to the waiver alone. If after the Bill became law the State of Victoria claimed the right to tax the full amount of a member’s salary, and its claim was resisted, 1 think it likely that the High Court would say to the appellant, “You are relying upon words in the Commonwealth Act which have no force, because a Commonwealth Act cannot limit the power of a State in reference to the passing of. income tax legislation, though the Commonwealth can waive its right as regards interference by such legislation.” We cannot interfere with the legislative powers of the States in matters wholly within the sphere of their authority. If we wish to make a bargain, we should approach the authorities of the States, and say, “ We shall pass this waiver if you will agree to frame your Acts on the lines that we suggest.” We cannot make a bargain merely by passing this measure, and the probabilities are that, if we agree to a waiver, it will be enforced, and the proviso regarded as. mere surplusage which cannot have any operation. We all are of opinion’ that there should be this waiver, and differ only on matters of detail. If we were legislating in respect of a matter wholly within our jurisdiction, we could impose any conditions we choose; but we cannot say to the Parliaments of the States that they shall legislate in respect to matters wholly within their jurisdiction only as we wish.
– This Parliament is making a concession to the States Parliaments by passing the Bill. Cannot we limit this concession ?
– The limitation is incongruous. We say in effect to the States, “ Your Income Tax Acts will not interfere with the instrumentalities of the Commonwealth if you pass them in the shape in which we think they should be passed; but, if you do not, they will interfere with our instrumentalities.” There is no sense in that position. Either the Income Tax Acts of the States do interfere ‘with Commonwealth instrumentalities, or -they do not. If they interfere, it is for a constitutional reason, which I am afraid a Bill like this will not get rid of. If it can get rid of it, that part which attaches conditions to our waiver by interfiling with the legitimate powers of the Parliaments of the States will, in my opinion, be a dead letter. If the measure is regarded as valid, the Court will probably say, “ We can give effect to it only by recognising the waiver and ruling out all the irrelevant provisions.” The Court could not say, “ The measure lays down a condition in regard to the waiver,” because the representatives of the State would reply, “ What we have done is entirely within our legislative competency, and no Commonwealth Act can interfere with it.” We cannot mould State legislation in regard to matters in which the States are supreme. I admit the difficulties of the position. The end in view is a proper one; but I think that the measure should’ apply to Ministers as well as to members.
– So it does.
– Is not a Minister a member?
– Yes; but his salary as a Minister is a different thing from his . allowance as a member.
– Will not the word “salary” cover his remuneration?
– Yes, if used in conjunction with the term “ Minister.” The main object of the Bill is to allow the States to tax the Commonwealth servants, members, and Ministers, and it is proposed to insert in it this proviso -
Provided that nothing in this Act shall be deemed to authorize the taxation by a State -
of the salary of an officer of the Commonwealth, unless the officer resides, and the salary is earned, in that State ; or
of the allowance or salary of a member of the Parliament, or of a Minister of State, or of the Presiding Officer or Chairman of Committees of either House of the Parliament, unless he is a senator or member of the House of Representatives elected in that State.
We cannot pass a provision dictating how the States shall frame their laws. Any attempt to do so is absurd, and beneath our dignity as a Parliament. If there are to be bargains, they should be made and then embodied in legislation. It is absurd to attempt to make them by legislation. What we are trying to do now is to enact that, in order to get the benefit of our waiver, the States must frame their laws in a’ certain way. We cannot treat independent sovereign authorities in that manner. Therefore, the proviso will be of no effect unless it is accepted by the States Parliaments as an indication of our wishes in this matter. But the Bill will apply in respect to the State legislation that now exists, and the waiver will be considered as bringing it into operation in respect to Commonwealth servants, members, and
Ministers, while I am afraid that the conditions attached will be considered ultra vires, and impossible of enforcement. Our relationship to the States is not such that we can bind them by making a waiver conditional upon their Parliaments passing laws framed in a certain way.
– I am afraid that the honorable member for East Sydney is under a misapprehension as to the constitutional powers of this Parliament. He has affirmed that it is impossible for us, when we make a waiver to lay down the conditions under which the States shall exercise their powers of taxation. In this connexion, I propose to read one of the United States statutes for the purpose of showing the manner in which that country permits of similar taxation being imposed, and lays down its own conditions - just as we are doing here - in matters in respect of which the States would have no authority to act without the permission of Congress. This Act reads -
Be it enacted, &c, that (1) circulating notes of national banking associations and United States legal tender notes and other notes and certificates of the United States payable on demand and circulating or intended to circulate as currency and gold, silver, or other coin shall be subject to taxation as money on hand or on deposit under the laws of any State or Territory.
That is a general enactment enabling the States to tax all these certificates and notes-
– But they cannot tax them in two States.
– The Statute adds-
Provided that any s’uch taxation shall be exercised in the same manner and at the same rate that any such State or Territory shall tax money or currency circulating as money within its jurisdiction.
As a matter of fact, there is a whole series of American decisions upon the legislation under which Congress allows the States to tax certain banks. Some of those decisions have held the action of the States to be valid and others have pronounced it invalid, according to whether or not the States had complied with the conditions laid down by Congress. It stands to reason that Congress must have that power, because the power to tax implies the power to destroy. If we were to waive our privileges, and to simply say that Federal officers shall be liable to taxation by the States, the latter might specially select those officers for taxation, and allow all other citizens to escape. The honorable member for East
Sydney has overlooked the very reason underlying the decision of Chief Justice Marshall in the case of McCulloch v. Maryland.
– Would any State act in the way that the Attorney-General has suggested ?
– It is not a question of whether a State would. act in that way but oj” whether it has the power to do so. Fortunately, in Australia we live upon terms of perfect amity with one another, but in the United States it was pointed out that if a uniform basis of taxation had not been laid down the States might have exercised their powers without restriction. Consequently, Congress enacted that the States might tax the banks within their , borders upon the condition that they taxed them1 only , upon equal terms. ‘
– That is not a parallel case.
– What is the position in Canada?
– There the ‘ Courts have held that Federal officers are not liable to income tax, and that decision has been allowed to stand. Canada has not, I believe, done what we are now doing, neither has the United States.
– The United States cannot do it.
– Under its Constitution it may.
– It cannot make the individual waive his rights.
– No. But Congress can’ waive its rights. The fact remains that Congress has passed tin Act permitting the banks to be taxed by. the various States. By its action, the States obtained an authority to tax which otherwise they would never have enjoyed. What sort of Parliament would this be if we could legislate only upon certain lines?
– We insert provisos in every Bill that we consider.
– If we had not the power to lay clown the conditions of our waiver, T would be no party to making any waiver at all. In the absence of those conditions, we should place Federal officers at the mercy of any State which might desire to take drastic action against them. .But what we propose to do is fair. We say that Federal officers shall Le placed upon exactly the same footing as other citizens of the States. They enjoy all the benefits arising from the establishment of schools and from the maintenance of a police force, and why should they not be obliged to contribute their share of State taxation? I do not wish the honorable member for East Sydney to be under a misapprehension. He appeared to think that the proviso inserted in the Bill was the only limitation of the powers of the States which the measure contains. But he will see that the taxation which the States may impose is limited, even in the earlier portion of the clause. Theproviso whichit contains was inserted at the instance of a senator who feared that in its absence the allowance payable to senators from other States would not be exempt from income tax in Victoria.
.- Seeing that the second reading of this Bill has been agreed to, it isunnecessary to argue whether the power to tax the salaries of Federal officers ought to be granted to the States. The point to which we must now direct attention is, “ How are they to exercise that power ?” To my mind, the proper thing to do is to allow any State to tax the income earned by any person during the period that he is resident within that State. ‘ If honorable members are located in Melbourne for six months in the year, they ought to pay income tax upon that proportion of their salary. What does it matter where we are elected? We ought to pay the tax where we are protected by State institutions. If that principle be adopted, it will prevent the duplication of taxation. Under this Bill, a man may be taxed upon his salary in two States. That is the difference between the position occupied by the American Banks to which the Attorney-General has referred, and that occupied by us under this Bill. The States of America cannot possibly tax bank notes twice, because the currency in respect of which they have powers is limited to one State only. What we have to avoid is the possibility - if we apply the general law of the States without some qualification - of taxing an honorable member upon the whole of his salary who resides in Victoria for three months of the year only. If we make the application of the State laws to our salaries the test, a man may be taxed in two States upon the same salary. That ought tobe avoided. The true principle is to apportion the salary between the States in which a man really earns it. Acting upon that principle, during the first year that I was a member of this Parliament, I paid income tax upon the amount which I had. earned during the 109 days that I had resided in Victoria. In other words, I had earned that proportion of my salary here. The South Australian law did not touch me upon that occasion, so that I did not pay upon the balance of my salary. Next year, when I forwarded my cheque to the Victorian Commissioner of Taxes, he returned it because I had overlooked the amount of the exemption. We ought to make the clause read, “ The taxation by a State, in common with other salaries and income,” &c., because, if we make salaries the test, there may be a peculiar law in operation in a State which does not apply to incomes. What I suggest would cover the principle of uniformity very well, and might prevent the taxation by another State of the same income, because it would not then be taxed “ under like conditions.”
– Where would the honorable member insert those words?
– At the very beginning of the clause. To make assurance doubly sure, we might add that no man should be taxed in more than one State.
– Or in respect of income covering the sameperiod. He ought not to be taxed twice upon the same income.
– What power could prevent Victoria from taxing a man upon his income, and what power could prevent South Australia from doing the same thing?
– At the end of the clause we might declare that taxation shall be only once imposed upon the same income.
– Each State would say that their taxation was the “ once. ‘ ‘
– I am not giving the exactwords, but simply suggesting, as I did in the beginning, that we ought first to agree on what we desire. I am making an imperfect use of language - and I know that it is not strictly accurate - in order to convey the idea nebulously; but when we decide on what we desire we may use scientific language to exactly express my meaning. I ask the Attorney-General to consider the suggestion to apportion the salary between the States in which a man earns it, and not to allow the same salary, or a portion of it, to be taxed in more than one State.
– The framers of the Commonwealth Constitution, with their knowledge of American conditions, based the sections largely on the lines of the United States Constitu- «tion. They recognised the necessity of preventing the States from differentiating in taxation between State public servants and Federal public servants and the people ^.generally. That is a correct principle, because, otherwise, the whole Federal machinery might be rendered inoperative. Just recently, iri New South Wales, the Premier took a very high-handed action in -connexion with proposed Tariff legislation. But for the provision in the Constitution to which I have referred, nothing would have been easier than for Mr. Carruthers to convene the State Parliament, and to impose such differential taxation as would have the effect of driving Federal servants out of the State. There would then have been no need to bring -down an army of policemen in order to seize the wire netting which was in the -custody of the Customs authorities. The necessity for this, provision in the Constitution has been questioned, but it has been decided by the Courts that a State, in the matter of taxation, cannot differentiate as against Federal servants. Of course, we recognise that Federal servants receive the protection and other benefits of State legislation, and are, for the time . being, State -citizens ; and there is no desire that, while they have a voice in determining the nature of the taxation, they shall escape the duties -of citizenship. All we desire is that there shall be no differentiation ; and by this Bill we propose to give the States the right to tax Federal servants and Federal representatives on the same lines, and to the -same extent, as State public servants and citizens are taxed. If the Bill meant handing over to the States the right to differentiate, I for one, would not be disposed to favour the measure, because there are reasons, and other reasons may arise in the future, why the States should not have that power. I do not altogether agree with the right honorable member for East Sydney that we have no right to indicate the lines -of the legislation of the States in this connexion. In my opinion, we are quite within -our rights in doing so; and if the legislation of the States is not in harmony with Commonwealth legislation, that is a! matter for the States. We are giving the States certain rights-
– What rights are we giving the States under the Bill ?
– We are giving the States the right to impose income taxation on Federal officers and Federal members of Parliament - a right which the
States do not possess under the Constitution. We are taking away no rights or powers from the States, but, on the contrary, are conferring on them increased powers. If we do not indicate the lines on which the legislation of the States must proceed, the safeguards of the Constitution will cease to exist. First, I hold that all Federal public servants should bear their share of the burdens of the State in .which they reside, seeing that they have the protection of the State’s laws, the benefits of legislation relating to education, and so forth. Members of the Federal Parliament do not desire to shirk their duty towards the States. They could not be in this Parliament unless they were citizens of the States, and they should contribute to the taxation in return for the benefits which they receive from the particular States they represent. I do not agree with the honorable member for Angas that, because,, for a certain period of the year, a member of the Federal Parliament has to reside in Melbourne, he is under an obligation to pay Victorian income tax. Melbourne is the temporary seat of Government, and a member is here for the purpose of discharging his duty, not to Victoria particularly, but to his own State, and the Commonwealth generally. Further, it is not the Victorian taxpayers who provide his salary, or bear the expense incurred in connexion with his presence here - it is his own State . which has1 to provide that money. Therefore, in mv opinion, it is the State represented that has the primary, right to. tax the representative. It is part of the duty of a Federal member to make himself acquainted, not merely with the conditions of his own State, or with those of” Victoria, in which he has- to legislate for the time being, but, as far as opportunity permits, with the conditions of all the States of the Commonwealth. Several honorable members, including myself, have been in the Northern Territory during a portion of this present year, and we have also spent some time in Queensland. I have, myself, arrived from South Australia only to-day ; and I usually spend a good deal of time in my own State of New South Wales. How is it possible, under such circumstances, to apportion the amount of income earned in the various States, by calculating the number of days, weeks, or months spent in each on public business ? Any attempt to give effect to the suggestion of the honorable member for Angas must break down. For instance, most of the members from New South Wales travel to their own State every week-end, and a considerable portion of their time is occupied in travelling, only the actual days of sitting being spent in Melbourne. Members from South Australia are similarly circumstanced; but, of course, members from more distant constituencies do not travel to the same extent. But, as one honorable member suggests, there would be a difficulty in determining in what State we were at any particular time, seeing that some of us travel so much. In my opinion, there should be no attempt to apportion the taxation in accordance with the time spent in one or other of the States. A member is here as the representative of a State, whether he be a Minister or a private member; and, as a citizen, he owes obligations to the State he represents. It may be that his parliamentary duties require him to spend a considerable portion of his time in Victoria, but he is a citizen of the State which provides his salary and travelling expenses. In the case of a Minister also, his increased remuneration has to be - provided by the State which he represents; and the simplest way to meet the difficulty would be to leave each member subject to the income tax of his own State.
– The honorable member means in regard to the whole parliamentary income?
– Yes; and I should draw no line as between a Minister and a private member of the House.
– The AttorneyGeneral has said that that will be the effect of his amendment,
– I am glad to hear that, though the Bill does not make the point very clear. I am now simply pointing out what appears to me to be the correct principle on which we ought to act. We should, first, give the States power to levy taxation on Federal public servants, just as they levy taxation on their own public servants and citizens, and, secondly, we should leave members of Parliament, whether Ministers or otherwise, to be taxed in common with the citizens of the States they represent. If a State has no Income Tax Act in operation, honorable members representing that State will escape such taxation ; and if, on the other hand, it has, then they will be called upon to bear an equitable share of taxation in common with all its other citizens. Whilst it is wise to have in the Constitution a provision to insure the supremacy of the Commonwealth, and to maintain the efficiency of its ser vices, we shall be quite within our rights ii» conceding these powers to the States. In passing this Bill, we shall simply safeguard the constitutional principle at stake by indicating the lines on which State legislation of this kind will be effective. We shall not dictate to the States the classof legislation to be passed by them; we shall simply say -in effect to them, “You are at liberty to deal with members of - this Parliament and with public servants of the Commonwealth as you deal with all your other citizens; you shall not differentiate between them and other citizens;” In taking this step, we shall safeguard that principle of the Constitution which is des. tined to make the Commonwealth supreme and effective in its legislation and administration. I hope that the Minister will not ask the Committee to legislate in a way that would require honorable members to pay income tax in several. States.
– In that event, we should require a private secretary.
– It would be so irksome that honorable members would prefer to pay income tax in every State which made a demand upon them rather than submit to the inconvenience of having to keep an elaborate account of the time spent by them in each State. If theMinister follows these clear lines, he cannot, go far astray, and I shall be prepared fo support him.
– I do not agree with the honorable member for Calare that it isnecessary to have in the Constitution such an extreme power as the High Court has determined that we possess in respect toState taxation of Federal salaries and allowances. It is to be regretted that the Constitution does not provide that Federalmembers, Ministers, and officers shall pay taxation to the States provided there is no differentiation as between them and other citizens. We should, in that event, be quite secure against any attempt to unduly affect the powers of the Commonwealth by means of taxation such as that to which the honorable member has referred.
– Does the honorable member think there is any danger of such persecution ?
– I do not think that there is. But we could have secured- ourselves from such a contingency. The Committee appear to support the view of the Ministry that members of Parliament and officers of the Commonwealth: should be liable to State taxation, and I hold, that to secure this effectively we should have had at the last general election an amendment of the Constitution submitted to a referendum of the people.
– Litigation was then pending.
– The decision of the High Court had been given.
– The case went on appeal to the Privy Council, and the. decision of that tribunal was not given until 6th December last.
– Before that date, at least one Federal Ministry had indicated to the representatives of the States in conference that it favoured a removal of these inequalities.
– The present Prime Minister made a similar statement in 1906.
– That is so. The opportunity to secure an amendment of the Constitution was not availed of, and we are now trying to effect by legislation of our own what could have been more satisfactorily secured in that way. We can only accept the Bill in- so far as it really carries out what is intended. I have no more desire to bear taxation than has any other honorable member, but when we set out to remove what we recognise as an injustice or incongruity, we should take an honest and effective step, and not allow a portion of the salaries of Ministers or the allowances of private members to escape taxation when the whole of the incomes of other citizens are liable to it. The discussion has confirmed the opinion previously expressed . by me that the Minister should insert in the Bill a provision to secure payment of- income tax on the whole of a Minister’s or private member’s salary or allowance.
– I propose to do that.
– I am glad to hear it. If that step be taken, it will not be possible for any one to charge us with nominally removing an injustice but really refraining from doing so. The proposal which has been made that we should be liable to pay income tax on our allowances in more than one State is highly undesirable, and would not work equitably. We derive our incomes not from the State where we happen to be carrying out our legislative duties, but from the States in which we are elected. Each has to bear its proportion of the Commonwealth expenditure. The suggestion that we should allocate the income tax on our earnings among the different States would be wrong in principle, inconvenient in practice, and calculated to create differences between members and States and between State and State. It would be far better to provide that the State which each honorable member represents should receive the benefit of the income tax paid by him, and that we should pay income tax in respect of the whole of our allowances.
– I have followed closely the views expressed by honorable members, and have endeavored to come to a conclusion as to what is the right course to pursue. After careful consideration, I have decided to move a further proviso, which will have the effect - or, at least, is intended to have the effect - of enabling each State to impose taxation on the members and Ministers elected in that State, and in respect of the whole of their allowances or salaries. I have, however, some doubts on the proposal. I hope the Committee will clearly understand that what we are proposing to do is not to tax any one, but simply to enable the States, if they think fit, to impose taxation. If this further proviso be inserted, it will simply provide that if the States desire to impose taxation upon the whole of the salaries and allowances received by members, including Ministers, they may do so.
– We are to be in the same position as other residents of a State?
– In the same position as one who resides all the year round in the same State.
– We shall not be compelled to pay taxation in more than one State?
– That is so.
– How will that apply to honorable members of this House ?
– Let us take the honorable member’s own case. He is a representative of the electorate of Calare, in New South Wales, and receives an allowance of £600 per annum. Under the amendment which I propose to submit he may be made liable to pay to New South Wales income tax in respect of his total allowance, although he may be in Victoria for six months out of the year.
– What about my liability to this State?
– The honorable member will not be liable to pay income tax save in the State in which he is elected. Ministers will be in exactly the same position as private members. They will be liable to the State in which they are elected in respect of income tax on the whole of their official income. The further amendment which” I propose later on to move will read as follows -
Provided further that members of the Parliament, Ministers of State for the Commonwealth, and the Presiding Officer and Chairmen of Committees of each House of the Parliament shall be deemed to have earned the whole of their allowances or salaries within the State in which they were elected.
I shall move this tentatively; and will have the whole matter carefully looked into. The Bill will be returned to the Senate, and it mav be necessary to closely examine this further proviso.
.- It seems to me that the Minister is only making a hole in the Constitution. No one can question the equity of these proposals. I have always held that Commonwealth servants, members, and Ministers should” be in every respect under the same laws, and pay the same imposts, as other citizens ; and I think that the bulk of the Public Service, and honorable members generally, have no desire to evade the payment of income tax. But as a representative of New South Wales, I have not cared to pay income tax to Victoria. In effect, it is the State which’ a) member represents which pays his allowance, because the States contribute in proportion to their population to the expenditure of government. In my opinion, the proper thing to be done is to amend the Constitution. The matter might have been referred to the people at the last election. Probably in future elections we shall have a series of amendments referred to them. What the lawyers speak of as a waiver, I regard as an intimation to the authorities of the States that we are willing to pay income tax. The New South Wales authorities have from the first re’alized that they could not enforce the pay1 ment of their income tax, and, therefore, have not demanded it from Commonwealth members.
– They have refused to take it.
– Yes. The action of Victoria is very different. The passing of this Bill is. to my mind, merely equivalent to the holding up of a placard announcing our desire to do what is equitable. Thehonorable member for East Sydney saysthat the provisos which have been inserted* will have no effect, because they are an.: attempt to dictate to the States how they shall frame their income tax legislation. If a State endeavoured to dictate how weshould frame our Tariff legislation1, weshould resent its interference, and, similarly, these proposals are Calculated toarouse the jealousy of the States. In my opinion, the Bill is merely a suggestion tothe assessors that they mav make application to Commonwealth public servants, members, and Ministers for income tax, and the probabilities are that its constitutionality will not be tested. It was neverthought that any citizen would be rendered exempt from taxation. As tothe Minister’s fear that the State authorities will endeavour to persecute those affected”1 by the Bill by imposing special penalties on them, I cannot conceive that such differentiation will be attempted. But if theMinister thinks the provisos necessary for thc preservation of Commonwealth rights, I shall vote for them. If they prove tobe only so much verbiage, no- harm will bedone. I agree with the honorable member for North Sydney that it is the State by which we are returned which pays our allowance. As I ha.ve said, the proper way toget over the difficulty would be to propose an amendment of the Constitution. Anotherway open to us would be for the Commonwealth Treasurer to make a deduction from the salaries and allowance of the public servants,, members, and Ministers every month, distributing the amount deducted amongst the States Treasurers. But as theGovernment have thought fit to bring in this Bill, I am prepared to give their method a: trial.
.- I amglad that the Minister has promised to accept an amendment which carries out a suggestion which I made before the dinner adjournment. I would point out to him, however, that in his further proviso heshould insert the words “ resided in,” because otherwise some of those to whomthe Bill applies may be deemed absentees, and be called upon to pay taxation at a.higher rate. . Under the. Victorian law acitizen of the State who was absent for six: months was an absentee, and the feeling infavour of absentee legislation is extending.
– I am willing to make that amendment.
Amendment (by Mr. Groom) proposed -
That the proviso be left out, with a view to insert in lieu thereof the following provisos: - “ Provided that nothing in this Act shall be deemed to authorize the taxation by a State -
of the salary of an officer of the Commonwealth, unless the officer resides, and the salary is earned, in that State; or
of the allowance or salary of a member of the Parliament, or of a Minister of State, or of the Presiding Officer or Chairman of Committees of either House of the Parliament, unless he is a senator or member of the House of Representatives elected in that State.
Provided further that members of the Parliament, Ministers of State for the Commonwealth, and the Presiding Officer and Chairman of Committees of each House of the Parliament shall be deemed to have resided in and earned the whole of their allowances or salaries within the State in which they were elected.”
– It seems to me that the words “ resided in “ are unnecessary. The word “ earned “ covers everything.
– A man could earn his salary in a State and still be regarded as an absentee, if he were out of it for more than a certain period.
Amendment agreed to.
– I wish to know if the Minister cannot see his way to provide for the cases of such public servants as the InspectorGeneral, the Justices of the High Court, and other officers, who must be regarded as earning their salaries, not in any one particular State, but in all the States. As all other public servants, members, and Ministers will be called upon to pay income tax, I do not see why these should be exempt.
– I do not think we can deal with them specially. My opinion is that the clause as it stands is a fair one.
Clause, as amended, agreed to.
Clause 3, preamble, and title, agreed to.
Bill reported with an amendment.
Motion (by Mr. Groom) agreed to -
That the Standing Orders be suspended to enable the Bill to pass through all its remaining stages without delay.
Bill read . a third time.
– I move -
That this Bill be now read a second time.
The consideration of this measure ought not to occupy very long.
– It ought to be rejected, I think. What is the use of flooding the statute-book with legislation that is not required ?
– This Bill has been introduced in consequence of a report which was made by the Standing Orders Committee of the Senate. That body found that it was necessary that the Commonwealth should have a Parliamentary Witnesses Act of its own. At present we are dependent upon section 49 of the Constitution, which provides that -
The powers, privileges, and immunities of the Senate and of the House of Representatives and the members and the Committees of each House shall be such as are declared by the Parliament, and until declared shall be those of the Commons House of Parliament of the United Kingdom, and of its members and Committees at the establishment of the Commonwealth.
Therefore, in order to ascertain what are our rights and privileges over parliamentary witnesses, we have to find out the practice of the House of Commons, and to examine Imperial Statutes. Practical difficulties have arisen in this connexion, and the Bill now before honorable members has not been introduced from a mere desire, to clothe ourselves with our own authority. The Standing Orders Committee declared that -
Although the Committee consider that both the Senate and the House of Representatives and the Committees of either House have power, under the Constitution, to administer oaths, and that the Senate and the House of Representatives have power respectively to deal with any witness who refuses to attend, to be sworn, or to answer questions, they do not consider that the time of Parliament should be taken up by matters of this nature, but that the Courts are better constituted to adjudicate on such matters.
The Bill shortly provides that Committees of either House shall have power to summon witnesses, and to order a warrant to be issued for disobedience of such summons. It provides penalties for escape from custody, for resisting apprehension, for refusing to be sworn, and for giving false evidence.
– Do Ministers favour the penalties provided in the Bill?
– In most cases, they are penalties which correspond with those prescribed for offences of a similar nature.
– That a witness may be imprisoned for two years for refusing to answer a question, seems to me the most dreadful thing of which I have ever heard.
– What are the provisions of this Bill copied from?
– The Bill was prepared by the Standing Orders Committee, and revised by the Parliamentary Draftsman.
– Does it run parallel with legislation in other countries?
– Some of its provisions are copied from English legislation.
– From legislation relating to Parliamentary Committees?
– From the Protection of Witnesses Act!
– In the law Courts ?
– A general Act.
– That is a very different matter.
– Clause 16 provides for protection to witnesses. The general scheme of the Bill is simply to complete the machinery of Parliament, so as to enable witnesses to be properly summoned, and sworn, to afford them protection, and to punish them if they tender false evidence.
.- Personally, I’ am inclined to vote against this Bill. I do not think that it is necessary, and that fact was very clearly shown by the former President of the Senate, when the measure first came before the other branch of the Legislature. I believe that it was originally introduced by Senator Neild. Upon that occasion, ex-Senator Baker pointed out that the reason why Great Britain had legislated upon this matter was that, although the House of Lords had always powers such as are contained in this Bill, until the Act of 34 and 35 Victoria was passed, the Commons did not by Statute assert the existence of similar powers. The reason the Lords possessed these powers was that’ that House was regarded as a Court of judicature. Therefore, it had the power to examine witnesses. The result was, as May points out -
At length, in 187T, >n pursuance of the recommendations of a Select Committee of i86q, Act 34 and 35 Victoria, c. s3 was passed, empowering the House of Commons and its Committees to administer oaths to witnesses, and attaching to false evidence the penalties of perjury. B>’ Standing Orders Nos. 8s and Sg, oaths and affirmations under the Oaths Act 1888 (see i>. 156) are administered to witnesses, before the House or a Committee of the whole House, bv a clerk at the table; and before a Select Committee, by the Chairman, or by the clerk attending the Committee.
I do not know whether the Senate is responsible for this Bill being copied from the English Act, but, in passing, I may say that that practice is becoming too common. The Commons then assented to the power exercised by the House of Lords. When our Constitution was enacted, we derived under it all the powers which the Commons possess and as Act 34 and 35 Victoria preceded our Constitution we have the power conferred by that Act. We can also regulate this matter by standing orders. Another provision in the Bill deals with the punishment of persons who are guilty of any interference with witnesses. I think’ that some complaint was made in the Senate -regarding an alleged interference with the liberty of action on the part of a witness who had given evidence before a Select Committee, and who was subsequently dismissed from his employment. If honorable members will look at pages 120 and 121 of the Tenth Edition of May they will see that, among the privileges of parliamentary witnesses, is freedom from arrest and punishment for any evidence which they may give. Therefore, that protection exists at the present time. This Bill, from beginning to end, seems to prescribe penalties. Indeed, it is nothing more than a series of penalties for the violation of powers which we already possess. I am not inclined to vote in favour of converting every man who refuses to answer a question into a criminal who is liable to two years’’ imprisonment.
.- During my twenty-seven or twenty-eight years of experience of parliamentary life, I have never seen a Bill which prescribed such penalties as are contained in this measure. A witness may be undergoing examination at the hands of a Parliamentary Committee- ^-perhaps upon some political matter concerning which there is a great deal of heat - and he may be asked a question by a member of that Committee. From considerations of personal honour, he may feel indisposed to answer that question, but if he refuses to do so, he is made liable under this Bill to two years’ imprisonment. Surely we do not wish to push our parliamentary privileges to that extent.
– A witness may decline to answer upon the ground that his reply may incriminate him.
– There is a clause in the Bill which makes provision for that. But I do not think that we want to begin upon the lines laid down in this measure. The very thought that a man who may be acting from the most honorable motives in refusing to answer a question may be made a criminal shocks one’s sense of propriety. The Bill simply proposes to revive antiquated methods’ of punishment which are quite unworthy of this House. It is not a Government measure.
– It was originated by Senator Neild.
– There may be occasions upon which a man in refusing to answer a question may be acting in the most honorable way.
Debate (on motion by Mr. Crouch) adjourned.
– In moving -
That the House do now adjourn,
I wish to say that I had hoped we should be able to commence the consideration of the Tariff after the -adjournment for dinner this evening, but as it is now so late I do not think that honorable members expect me to proceed with it. As objections have been raised to certain provisions in the Parliamentary Witnesses Bill, which is really not a Government measure, I think that we may fairly adjourn now. To-morrow we shall ‘ commence the consideration of the Tariff in detail, and, as I have. previously said, I hope that nothing will interrupt its discussion until it has been finally disposed of.
.- There is just’ one matter which I desire to bring under the notice of the Minister of Trade and Customs. It has reference to a statement contained in Mr. Beale’s report.
– That report is in thi- custody of Mr. Speaker.
– Do I understand that there is a medical man inquiring into its allegations ?
– Not at present.
– I have been requested by Mr. W. H. Hearne, of Geelong, to say that the statement published in Mr. Beale’s report that his bronchitis cure contains chloroform and morphia is not correct. Mr. Hearne asserts -
It does not contain any poison, morphia or chloroform, as stated in Scale’s report; but it does contain - besides other necessary ingredients - some aqua chloroformi (Chloroform-water) allowed by the Pharmacy Board for preservative influence without use of any spiTit. Will you please take the earliest opportunity of announcing this in the House?
Question resolved in the affirmative.
House adjourned at 10 p.m.
Cite as: Australia, House of Representatives, Debates, 26 September 1907, viewed 22 October 2017, <http://historichansard.net/hofreps/1907/19070926_reps_3_39/>.