House of Representatives
6 December 1916

6th Parliament · 1st Session



Mr. Speaker took the chair at 3 p.m., and read prayers.

page 9431

PETITIONS

Mr. RICHARD POSTER presented a petition from 2,660 farmers of South Australia, praying that the existing Federal wheat scheme should be amended by abolishing the restriction to chartering ships by two firms only, and by providing for the representation of each State on the Board of Management, that an audit and an independent report of the whole workings of the scheme be made, and that the accounts of each season’s1 crop be kept separate.

Petition received and read.

Mr. HAMPSON presented a petition from employees in the gold mines of Bendigo, Ballarat, and elsewhere, praying that the provisions of the War-time Profits Tax Bill may not be applied to the gold mining industry of Australia.

Petition received and read.

page 9431

FEDERAL PARLIAMENTARY WAR COMMITTEE

Mr WATT:
BALACLAVA, VICTORIA

-Is it the intention of the Government to continue the existence of the Federal Parliamentary War Committee 1

Mr HUGHES:
Attorney-General · WEST SYDNEY, NEW SOUTH WALES · ALP

– How far the Federal Parliamentary War Committee will fit in with the new recruiting scheme of the Government ia being considered, and a determination will be come to on the subject as soon as Mr. ‘ Mackinnon has expressed his opinion regarding it. He is, I understand, now looking into the matter.

page 9431

QUESTION

SOLDIERS’ CLOTHING

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– Is the Assistant Minister for Defence aware that, since the Australian soldiers have left Egypt, they are required to purchase new hats, coats, or other clothing that may have been stolen from them or lost, no matter how the loss came about?

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– I am not aware that that is so, but I shall look into the matter.

page 9431

QUESTION

USE OF COAL

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA

– Is the Minister for the Navy in a position to make further concessions regarding the use of coal, particularly by electric light companies? In Adelaide, several factories are closed - their hands being out of work - which could re-open if the electric light company were permitted to supply the power they need, as it could do if the desired permission were given.

Mr JENSEN:
Minister for the Navy · BASS, TASMANIA · ALP

– In consultation with the Prime Minister and the officials of the Navy Department, I have prepared a statement which, by leave, I shall read to the House.

Leave granted:

Mr JENSEN:

– The statement is as follows: -

It is proposed to bring about a complete ‘resumption of all State enterprise at as early a date as is compatible with the safeguarding of every aspect of the situation.

The acute stage was reached approximately about the 23rd November, when ‘the situation became so grave as to necessitate the issue of a Proclamation controlling all fuel and power supplies, however held, to so regulate matters as to maintain the continuance of public utilities, work of national importance, and public necessities, such as food supplies, &c.

As a consequence, the Department had suddenly to cope with thousands of requests claiming permits to obtain fuel and power sopplies for the oarrying. an of all kinds of industries and utilities, and I have endeavoured to minimize public inconvenience as much as possible.

During this period special permits have been granted for power, ‘ fuel, &c., to the extent of more than 700.

Every case has been dealt with on its merits as. to necessity from the public point of view, and at all times keeping in view equality of treatment to those involved, whether employer oremployee.

The following gives a general indication of the services which have been maintained up to the present, in addition to special permits : -

Electric light.

Gas light.

Tramways.

Harbor and other Trusts.

Corporations.

Refrigerating works.

Butchers.

Bakers.

Dairymen.

Butter factories.

Hospitals.

Charitable institutions.

Hotels.

Caterers.

Laundries.

Milk preservers.

Milk foods.

Bacon curers.

Stevedoring.

Flour mills.

Newspapers and important journals.

Printing of urgent work.

Many classes of general work connected with the Defence Department, Navy, and other Government Departments, in addition to the foregoing.

Harvester factories have been kept in full operation to meet the demands for harvester, reaper and binder, twine factories for harvest.

Sugar works.

Munition and explosive manufactures.

Mining and smelting operations in connexion withmetals.

Partial operations have been maintained in the following industries for the purpose of saving loss of produce, &c. : -

Starch and food works.

Jam factories.

Tanneries.

Chemical works.

Breweries.

Maltsters.

Chaff and produce mills.

Flour sack and bag manufacturers.

Glass and bottle works.

Various other industries.

After carefully considering the whole position, and after having ascertained the stocks of fuel held generally and the prospects of anticipated supplies coming forward from the mines now operating, I feel that I am justified in making the following statement as to future operations : -

That necessary requirements for transports and shipping can now be depended upon to bring about a complete resumption of these operations to meet requirements as facilities of loading, &c., admit of.

By a judicious use of coal and coke in stock, and the verbal transfer of same from factories, &c., where these are held in excess of immediate requirements, it is proposed, with the aid of wood and other fuel, to carry out the following programme : -

In addition to maintaining the various operations already indicated in the foregoing to provide for general resumption of industrial and other undertakings in the following order : -

On Monday, 11th December.

Jam manufacturers.

Woollen mills.

Boot factories.

Felt hat factories.

Oatmeal mills and certain foods.

Superphosphates.

Tanneries.

Clothing factories.

On Thursday, 14th December.

All power from electric and gas works for the resumption of work dependent on such power, and general resumption of all undertakings dependent on fuel or power of any kind.

I desire to call particular attention to the fact that this can only be done with any reasonable certainty of success conditioned upon industries closing down for the usual Christmas holidays. It is obvious that this will be necessary on account of the fact that it is anticipated that the mines will be closed down also during this period, and it would be impossible to provide for a maintenance of supplies in January when general resumption is expected to take place, if this arrangement is not carried into effect.

ProposedLoadingArrangementsat Newcastle.

Order, Steamer, Destination,How to beUsed.

  1. Macedon, Melbourne, transports.
  2. Saros, Wallaroo and Port Pirie, smelters and Broken Hill mines.
  3. Period, Melbourne, hulks and gas.
  4. Tavuini, Hobart, hulks and gas company.
  5. Lammeroo, Breaksea for orders, hulks.
  6. Goulbum,Melbourne, hulks.
  7. Koonya, Devonportand Strahan, bunkering.
  8. Era, Adelaide, hulks and S.A. railways.
  9. Wakatipu, Launceston, hulks and gas.
  10. Barwon, Adelaide, bulks and S.A. railways.
  11. Aeon, Wallaroo and Port Pirie, smelters and Broken Hill mines.
  12. Alabama, Melbourne, hulks and country gas.
  13. Wear, Melbourne, Colonial Sugar Refining Company and hulks.
  14. Kooringa, Melbourne, hulks.
  15. Ashbrtdge, Western Australia, hulks.
Mr Fenton:

– Can the date not be made earlier than the 11th?

Mr JENSEN:
ALP

– It is impossible.

Mr Fenton:

– A large number of people are out of employment.

Mr JENSEN:

– There would only be a cessation of some of these industries before the holidays. The Department has gone fully into the matter, and no one is more anxious than the Prime Minister and myself to do everything possible to get the industries started, a matter which, of course, depends on everything goingright at the collieries. Every ship that we can use is being loaded as fast as possible, and is detailed to the place where its coal is most necessary for the industries.

Mr CHARLTON:
HUNTER, NEW SOUTH WALES

– Will the Minister for the Navy, in regulating the supply of coal to certain industries, make provision to unload the waggons of every colliery so as to prevent any colliery being thrown into idleness?

Mr JENSEN:

– Two telegrams dealing with that point were received by me from Newcastle to-day; and I think the replies I sent were satisfactory to all concerned.

Mr MATHEWS:
MELBOURNE PORTS, VICTORIA

– Do I understand the Minister to say definitely that the whole of the industries will be allowed to resume by the 14th December ?

Mr JENSEN:

– Yes ; and most of them will be able to resume on the 11th.

Mr FENTON:

– Having regard to the fact that at least 12,000 to 14,000 women and girls engaged in the clothing trade are out of work, will the Minister consider whether it is not possible to supply coal to clothing factories at an earlier date?

Mr JENSEN:

– The Department is at its wits’ end to comply with all the requests that are made. I appreciate the position of the women engaged in the clothing trade, and I assure the honorable member that I specially included the clothing factories amongst those which may commence work on Monday next.

page 9433

PERSONAL EXPLANATION

Mr FINLAYSON:
BRISBANE, QUEENSLAND

– I desire to make a personal explanation. Last Thursday I said in the House that the Premier of Queensland had sent a cablegram to the Agent-General of that State in London, advising the Queensland electors there to vote “No.” On Saturday the Argus reported a message from Brisbane to the effect that Mr. Ryan had said that I was under some misapprehension in the matter. It is only fair to Mr. Ryan and myself that I should now state what that honorable gentleman says of the matter.

I quote from the Brisbane Daily Standard of the 2nd instant the following statement by Mr. Ryan: -

Mr.Ryan stated that during the month of October he had been requested by the Anticonscription Campaign Committee to convey a message through the Agent-General in London to Mr. Phillip Snowden, M.P., asking him to put the other side of the case to the soldiers, in view of Mr. Hughes’ manifesto to them urging a “Yes” vote.

The Anti-conscription Committee paid the cost of the cable - £14 all but 6d. - and the message was sent - No. 50. Mr. Ryan subsequently received the following from the AgentGeneral : - “ No telegram No. 50 has been received during the current month.” “As the result of inquiries,” added the Premier, “I am satisfied that the message was never received by the Agent- General, and was probably never despatched from Australia by the authorities.”

page 9433

QUESTION

TASMANIAN SHIPPING SERVICE

Mr ATKINSON:
WILMOT, TASMANIA

– Can the Minister for the Navy say whether any definite arrangement has been arrived at in regard to which boats shall run from the mainland to Tasmania between now and Christmas? There is a great tourist traffic.

Mr JENSEN:
ALP

– It is proposed during the coming week that the Oonah shall be put on service again.

Mr TUDOR:
YARRA, VICTORIA

– Do I understand that boats are going to run for practically pleasure purposes this week, while factories are not to be allowed to have coal for another week ?

Mr JENSEN:

– No; I never made any such statement. I said “ during the coming week.” Factories will be permitted to start on the 11th - or most of them - and the continuance of the Oonah in traffic and trade will be considered later. I may add that the Oonah carries a quantity of produce and very few passengers.

page 9433

QUESTION

SALE OF WHEAT AND WOOL

Mr SAMPSON:
WIMMERA, VICTORIA

– I should like to know from the Prime Minister whether negotiations have been concluded for the purchase of the wheat and wool crop of Australia, and, if so, whether he can give particulars to the House?

Mr HUGHES:
ALP

– I am unable to supply the House with the information. The negotiations are not yet complete, but as soon as they are I shall take the first opportunity to disclose them.

page 9434

QUESTION

MORATORIUM

Mr PIGOTT:
CALARE, NEW SOUTH WALES

– I desire to ask the Prime Minister whether he will extend the moratorium so as to restrain any landlord from taking any steps to recover rent for land leased for wheat farming, by distraint or legal process, until an advance of at least 2s. 6d. on the present season’s wheat crop has been paid, the leaseholder not to be in any way prejudiced as regards his lease by the delay in payment of rent ?

Mr HUGHES:
ALP

– I am rather inclined to think that the existing moratorium covers such cases. If it does not, I shall look into the matter, and see how far an alteration is called for. I understand the position to be practically that, whereas in normal times a farmer is able to put his produce on the market immediately it is harvested, he is now precluded from doing so owing to the existence of the wheat pool. He is, therefore, dependent absolutely on the operations of the wheat pool for a return for his labour, and is unable to pay his rent. Is that the position?

Mr Pigott:

– That is the position.

Mr HUGHES:

– I shall see that in such case the farmer is protected.

page 9434

QUESTION

RECRUITING COMMITTEES

Mr SHARPE:
OXLEY, QUEENSLAND

– Does the Prime Minister not consider that it would be advantageous to have some members of the Cabinets of the different States included on the State Committees rather than the men who now compose them? I refer particularly to Queensland.

Mr HUGHES:
ALP

– I am afraid that the question is a little complicated, and the honorable member had better write it down, so that I may look into it between now and to-morrow.

page 9434

QUESTION

WOOL CLIP

Embargo on Export: Prices.

Mr HAMPSON:
BENDIGO, VICTORIA

– Will the Prime Minister state whether any attempt has been made by the Government to sell scoured wool to the British Government, or is it proposed to sell the whole of the wool unscoured?

Mr HUGHES:
ALP

– I am unable to give any information on that subject. The negotiations between the British Government and the Commonwealth Government are not yet complete.

Mr RILEY:
SOUTH SYDNEY, NEW SOUTH WALES

– In dealing with the wool clip, will the Government take into consideration existing industries, and see that the wool is scoured, and prepared as far as possible in Australia before it is sent overseas ?

Mr HUGHES:

– The sale of the merino and cross-bred wool clip of the Commonwealth to the British Government is a vast transaction, but all interests involved, including those of the manufacturers, scourers, and fellmongers, have been taken into consideration, and safeguarded. It is the intention of the Government to retain from the clip a quantity of wool sufficient for the purposes of the Commonwealth, and also to send overseas as much scoured wool as. possible in order that employment maybe given to our own men.

Mr CORSER:
WIDE BAY, QUEENSLAND

– In view of the shortness of the wool storage in Queensland, will the Prime Minister, under the terms of the embargo, allow wool to be shipped, and dealt with while on the sea, because if this is not permitted, very serious inconvenience will be caused to wool owners, in that State?

Mr HUGHES:

– I am quite aware that considerable inconvenience will, and, according to the honorable member, some loss may arise from the embargo on the shipment of wool, but the Government are not to be held to be directly responsible. The British Government have intimated to us that they are desirous of acquiring the Australian wool clip, and have requested us not to permit export. We have no alternative but to comply with that request; but we have submitted to the British Government as strongly as we could the importanceof their settling the matter at the earliest possible moment, thus relieving us of that inconvenience and loss, if the honorable member will haveit so, that arises from the embargo on export. Beyond this we cannot go. But I anticipate that, in the course of a few hours, at any rate by to-morrow, we shall be able to lift the embargo, and permit shipments to go forward in the usual way.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The price of the wool clip of Australia is about to be fixed, and it is a fixation of prices on a colossal scale, necessitated by certain circumstances with which we all agree, but I am anxious to know from the Prime Minister if there is any possibility of conflict between the tribunal that he is creating to appraise the value of the wool and the authority vested in the Minister who is handling the matter to fix the price himself, as happened in regard to wheat last year?

Mr HUGHES:

– As I pointed out last week, in reply to a question arising out of the same matter, submitted by the honorable member, the question of appraising the value of the wool clip has been vested in a Committee which was appointed by the conference of persons called to consider the question. The matter of appraising the price of wool is a highly technical one, and only the opinion of experts can be of any service at all. Of course, the Minister, who will probably be myself, may be technically and actually responsible, but what can any Minister who is not an expert know of the value of wool ? Therefore we must rely on somebody. The Committee which has been appointed is one of highly reputable men of great skill. Every regard will be had for the interests of the individual wool owners. I should like to add that the interests of the small man, no matter how small he may be, will be as carefully considered as those of the great pastoral companies. Subject, of course, to the price at which the whole clip is sold, he will get the full value for his wool as distinct from the wool of some one else which is of inferior or superior quality.

page 9435

QUESTION

SALE OF WHEAT CROP

Mr PATTEN:
HUME, NEW SOUTH WALES

– In the event of the British Government purchasing the wheat crop now being harvested, will the farmer be paid in full immediately the purchase arrangements have been completed? If not, will the Prime Minister see that an instalment of at least 2s. 6d. per bushel is paid to the farmers?

Mr HUGHES:
ALP

– It will not be possible for the farmer to be paid in full immediately for wheat that may not be deliveredfor six, ten, or eighteen months from the date of the purchase; but, as I have already stated, the matter of paying the farmer a reasonable advance has been, and is, engaging the serious consideration of the Wheat Board. The Board desires to pay the farmer an instalment of 2s. 6d. per bushel. In order to do that, it will be necessary to borrow £18,000,000; of course the difficulty arises in doing this.

page 9435

QUESTION

FIXATION OF PRICES

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– In view of the restraining influence of the Government’s proposals for the taxation of war profits, does the Prime Minister consider it necessary to maintain and develop the price fixation machinery ?

Mr HUGHES:
ALP

– The policy of the Government in regard to war-time profits will be made clear when the Treasurer makes his statement. The other matter to which the honorable member referred must be dealt with separately. I made a short reference to it in my Ministerial statement to the House. Any further matters arising out of it can be dealt with on their merits in the application of the principle I then enunciated.

page 9435

QUESTION

SECRETARY FOR LEADER OF AUSTRALIAN LABOUR PARTY

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

– In view of the reversion to the three-party system in this Parliament, and the fact that the Government allow the Leader of the Liberal party the services of a secretary, will the Prime Minister take into consideration the question of allowing the Leader of the Australian Labour party similar service ?

Mr HUGHES:
ALP

– I will look into the matter.

page 9435

PERSONAL EXPLANATIONS

Mr RICHARD FOSTER:

– I desire to make a personal explanation. On Thursday last I stated in the House that an inflammatory speech had been delivered by a notorious Industrial Worker of the World at Broken Hill, at a gathering of the Licensed Victuallers Association. The Licensed Victuallers Association has assured me that it disowns any connexion with the man, the speech, or the gathering. I unwittingly took the abbreviation L.V.A. to mean Licensed Victuallers Association; but I discovered that L.V.A. now indicates “ Labour’s Volunteer Army.”

Mr HUGHES:
ALP

– I am afraid that I lent some colour to the honorable member’s error. I am bound to say that I expected that the honorable member would correct me at the time otherwise I would not have allowed the statement to have passed uncorrected. To my horror, however, I found that the statement appeared in my Hansard proof as if it emanated from me. The licensed victuallers may have many sins, but this, certainly, is not one- of them.

page 9436

QUESTION

UNEMPLOYMENT

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– In view of the large amount of unemployment, especially among clerical workers, will the Prime Minister explain why so many pensioners are in the employment of the Commonwealth?

Mr HUGHES:
ALP

– As the question raised involves a matter of policy, if the honorable member will give notice, I shall give him a considered answer to-morrow.

page 9436

QUESTION

RETURNED SOLDIERS

Mr ORCHARD:
NEPEAN, NEW SOUTH WALES

– Is the PostmasterGeneral aware that a number of returned soldiers recently employed in the General Post Office, Sydney, have been dismissed? If such is the case, I wish to know whether employment of a permanent nature cannot be found for them?

Mr WEBSTER:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · ALP

– I have no knowledge of the dismissal of the men referred to, but I shall have inquiries made, and shall endeavour to furnish the honorable member with the reply to-morrow.

page 9436

QUESTION

ARBITRATION CASES

Mr SHARPE:

– Does the PostmasterGeneral consider it advantageous to detain Mr. Hesketh, Mr. Skewes, and Mr. Clemons, Public Service Inspector for the State of Victoria, for lengthy periods in the Arbitration Court, rather than to have cases settled by more expeditious methods ?

Mr WEBSTER:
ALP

– The Arbitration Court has its disabilities as well as its advantages. One of the disabilities is that parties on both sides, and the Judge also, are rather inclined to extend investigations further than may be necessary. If the honorable member, out of his wisdom, can suggest a more economical and expeditious way of dealing with these matters, I shall be pleased to hear it.

page 9436

QUESTION

CABLEGRAM WITHHELD

Mr FINLAYSON:

– In view of the statement of the Premier of Queensland that a cablegram, addressed to the Agent-General for Queensland, was not delivered, will the Postmaster-General say whether the message was held up under instructions from him, and, if such was the case, why it was done? Also, if the cablegram is not to be delivered, will the Department, refund the amount paid for the despatch of the message?

Mr WEBSTER:
ALP

– I shall look into the matter, and supply the honorable member with an answer to-morrow.

page 9436

QUESTION

SLAUGHTER OF FEMALE STOCK

Mr SHARPE:

– In order that steps may be taken to create a greater percentage of stock in Australia than exists at present, will the Minister for Trade and Customs communicate with the Ministers for Agriculture in the respective States of the Commonwealth in regard to the continued slaughter of female stock?

Mr ARCHIBALD:
Minister for Trade and Customs · HINDMARSH, SOUTH AUSTRALIA · ALP

– I shall look into the matter.

page 9436

QUESTION

PROTECTION OF WHEAT STACKS

Mr LIVINGSTON:
BARKER, SOUTH AUSTRALIA

– In. view of the fact that the new season’s wheat from some of the early South Australian districts is now coming in, will the Prime Minister make arrangements to have the wheat stacks covered and kept dry, instead of being left unprotected from the weather, as happened in some cases last season?

Mr HUGHES:
ALP

– We shall make every endeavour to see that the wheat is kept in good condition. I understand that provision is being made in that direction. I hope that we shall be able to shift the wheat that we are selling much quicker than we did last season’s wheat. Everything depends, of course, on the freight.

page 9436

INDUSTRIAL WORKERS OF THE WORLD NOTICES

Mr PALMER:
ECHUCA, VICTORIA

– Is the Prime Minister aware that the operations of the Industrial Workers of the World are being extended to country districts in Victoria, and that notices are being posted to this effect -

Wanted : Recruits, male and female, for the I.W.W. Must be determined, unscrupulous, and unafraid of gaol or death. Apply to-day at the nearest I.W.W. recruiting office.

Mr HUGHES:
ALP

– I have not seen this notice before. If the honorable member desires to know whether the Government are going to deal with these people, I can only say that recruits of the type described in this notice would be rather difficult to deal with. The matter is, however, engaging the attentionof the Government, and I shall shortly declare our policy with respect to it.

Mr TUDOR:

– Bearing on the question just put by the honorable member for Echuca, I should like to ask the Prime Minister whether the advertisement - if it is an advertisement - cannot be traced, since it must have been paid for by somebody? Is there a note showing in what newspaper it appeared? If it is merely a small printed circular, does it not bear an imprint? If it does, the Prime Minister can ascertain who issued it, and if it is a punishable offence, these men can be dealt with.

Mr HUGHES:

– There is no imprint on this “ dodger.” The people who publish these things do not bother about imprints or anything else. The honorable member knows that perfectly well. One might just as well look for the name of the Deity on a publication out of Hell as expect to see the name of the printer on such a publication.

page 9437

QUESTION

NAVAL ESTABLISHMENTS

Furlough and Leave of Absence

Mr MAHONY:
DALLEY, NEW SOUTH WALES

asked the Minister for the Navy, upon notice -

Whether the period of service qualifying for leave of absence and furlough to officers and employees in naval establishments (under Statutory Rules 1916, No. 243 - Regulations for the Conduct and Management of Naval Establishments) dates from the commencement of their employment or only from the date of the issue of such Regulations?

Mr JENSEN:
ALP

– The answer to the honorable member’s question is as follows : -

The Regulations operate from the date of issue, namely, 4th October, 1916. As regards leave of absence, when the time for the annual leave has been decided on, all officers and employees who have twelve months’ continuous service will be granted leave with pay (see Regulation 42) ; that is, of course, subject to their behaviour having been good and attendance regular.

As regards furlough, the qualifying period will commence from date of permanent appointment under State or Commonwealth Governments. (See Regulation 44, sub-section 2.)

In cases where there has been no permanent appointment the qualifying period will date from 4th October, 1916.

page 9437

QUESTION

MUNITION WORKERS AND SHIPBUILDERS

Recruits for the United Kingdom.

Mr JOHN THOMSON:
COWPER, NEW SOUTH WALES

asked the Prime Minister, upon notice -

In view of the urgent necessity for munition workers and shipbuilders in the United Kingdom, will the Government provide facilities and make the necessary arrangements for recruiting, as an Australian contribution, say 1,000 men from Cockatoo dockyards, for such purpose, seeing the work these men are at present engaged upon cannot assist in the present war?

Mr HUGHES:
ALP

– The matter will be inquired into, and will receive the consideration of the Government at an early date.

page 9437

QUESTION

EXPEDITIONARY FORCES

Case of Dr. Heupt McLeod - Pay of

Married Men - Arrest of Alleged Deserter - Civilians and Military Titles

Mr PATTEN:

asked the Assistant Minister, representing the Minister for Defence, upon notice-

Whether he will have all the papers in connexion with the request of the War Service Committee of Tumbarumba, New South Wales, to have an open inquiry on oath, held in Tumbarumba, into the alleged statements of Dr. Heupt McLeod laid upon the table of the House ?

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– The papers will be made available for the perusal of the honorable member at the Defence Department.

Mr CHARLTON:

asked the Assistant Minister, representing the Minister for Defence, upon notice -

Whether the maximum amount of eight (8) shillings per day to married men serving in the A.I.F. has been increased to ten (10) shillings per day ; if so, what are the respective amounts paid as separation allowances and for each child ?

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– The Minister for Defence has supplied the following reply: -

In regard to members of the Australian Imperial Force enlisted for service abroad, separation allowance may now be drawn up to an amount which, added to the member’s pay, does not exceed 10s. per day. The rates remain the same as previously, viz.,1s. 5d. per day for a wife and 4½d. per day for a child, and the result of the new regulation is that better provision is made for the families of soldiers who have a number of children.

Mr BOYD:
HENTY, VICTORIA

asked the Assistant Minister representing the Minister for Defence, upon notice -

  1. Whether his attention has been called to a letter in the Argus of the 1st inst., from a Mr. Wm. Lane, of Clarence-street, Caulfield, complaining of a visit from two military police at 2.30 a.m. for the purpose of arresting his son as a deserter from the A.I.F., when the said son had been discharged five weeks previously ?
  2. Will he take steps to see that such an action is impossible in future ?
Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– The Minister for Defence has supplied the following reply: -

A Court of Inquiry has been appointed to investigate this case. Domiciliary visits by the police to arrest deserters have been forbidden, and the withdrawal of all warrants in the hands of the civil and military police has been ordered so that they may be revised.

Mr FOWLER:
PERTH, WESTERN AUSTRALIA

asked the Assistant Minister representing the Minister for Defence, upon notice -

  1. Is it a fact that many civilians holding positions in the Defence Department have had military titles conferred upon them?
  2. Will the Minister lay on the table of the House a return showing the names and positions of such persons, the military titles they hold, the date of conferring such titles, and the steps, if any, by which they have reached their present military distinctions ?
Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– The Minister for Defence has supplied the following replies : -

  1. Yes. The appointments referred to have been necessitated by the formation of the Australian Army Pay Corps. This course was decided upon as the best means of securing the strengthening of the accountancy staffs of the Department, a matter which had become an urgent necessity in view of the constantly increasing expenditure, and the fact that of the pay staffs approximately 10 per cent. only were permanently employed officers of the Commonwealth or States.

Unfavorable developments in certain military districts rendered it imperative that not only should the Department secure a better control over those men who were employed, but that a better class of employee than those ordinarily available as temporary employees should be attracted into the service. The organization of the Military Pay Offices as a Military Unit is accomplishing these purposes.

  1. Yes.

CIVILIANS WITH MILITARY RANK.

Military rank has been conferred on those shown in the following list, all of whom were at such time employed in the Defence Department Pay Offices in a civilian capacity : -

The above includes- only permanent civilians employed in the Department. A number of temporary employees have been similarly granted military rank in the Pay Corps and Base Records Corps on enlistment.

page 9440

QUESTION

COMPULSORY MILITARY TRAINING

Cost of Camp

Mr PARKER MOLONEY:
INDI, VICTORIA · ALP

asked the Assistant Minister, representing the Minister for Defence, upon notice-

Whether he will inform the House and the country as to the expenditure entailed in maintaining the men called up under Proclamation and remaining in camp between the date of the defeat of the Referendum (28th October) and the withdrawal of the Proclamation?

Mr LAIRD SMITH:
DENISON, TASMANIA · ALP; NAT from 1917

– The Minister for Defence has supplied the following reply: -

The official announcement as to the result of the Referendum was made on 22nd. November, 1916.

The expenditure entailed in maintaining the men called up under Proclamation and remaining in camp between the date mentioned by the honorable member, viz., 28th October, 1916, and 22nd November, 1916 (when Proclamation withdrawn) was -

page 9440

QUESTION

MILITARY SERVICE REFERENDUM

Instructions to Returning Officers

Mr HIGGS:

asked the Minister for Home Affairs, upon notice -

  1. Did the Chief Electoral Officer of the Commonwealth (Mr. Oldham), or any person acting on his behalf, issue instructions to Divisional Returning Officers as follow or to the like effect : - 2. - (1) At the polling at the Referendum under the Military Service Referendum Act 1916, to be held on the 28th day of October, 1916, the presiding officer may put to any male person claiming to vote who, in his opinion, is under thirty-five years of age, the following question, in addition to any or all of the questions prescribed by the Military Service Referendum Act 1916 : - “ Are you a person to whom the Proclamation of 29th September, 1916, calling upon single men under 35 to present themselves for enlistment, applies ?”

    1. If the answer of the person claiming to vote is in the affirmative, the presiding officer shall put to him the following question : - “ Have you presented yourself for enlistment accordingly or been exempted?”
    2. If the answer to the question specified in the last preceding sub-regulation is in the negative, or if the presiding officer has reason to believe that the person claiming to vote is a person to whom the Proclamation applies, and that he has failed to obey it, the presiding officer, before permitting him to vote, shall mark the ballot-paper with the word “ Proclamation “ or the abbreviation “ Proc.”
  2. Did the Chief Electoral Officer issue the above or similar instructions on Friday, the 27th of October, and, if so, at what hour?
  3. If the Chief Electoral Officer or other person issued the above or similar instructions, under what authority or by whose direction did he issue the same?
  4. Was the Chief Electoral Officer requested by the Prime Minister, or any person acting on his behalf, to countermand the above or similar instructions on Friday, 27th of October, and, if so, at what hour?
  5. Were any voters in any of the polling booths on the 28th of October asked any questions such as those referred to in the above quoted instructions, and were any ballotpapers marked “ Proclamation “ or “ Proc.” ?
Mr BAMFORD:
Minister for Home and Territories · HERBERT, QUEENSLAND · ALP

– The answers to the honorable member’s questions are: - 1 and 2. A direction in the terms set forth was issued by the Chief Electoral Officer to the Commonwealth Electoral Officers for the several States on Friday, 27th October, at about 3.30 p.m., for transmission to their respective Divisional Returning Officers, in anticipation of the issue of a regulation to that effect. The telegrams were actually despatched from the Telegraph Office at a later hour. Inter-State telegrams were not despatched until about 6 p.m.

  1. The direction was given by the Chief Electoral Officer as a result of a notification officially forwarded to him by the AttorneyGeneral’s Department, with an intimation that the regulation had been approved. The Solicitor-General had been informed by the Prime Minister’s Department that the regulation was not to be issued until further instructed. As the time in which to issue instructions to electoral officials was very short, it was necessary to anticipate the actual issue of the regulation. It is not an uncommon practice where it is necessary to reach distant parts of the Commonwealth to issue instructions in anticipation of the issue of regulations.
  2. The Chief Electoral Officer received an official intimation from the Solicitor-General before 10 p.m. on the night of the 27th October that it had been decided not to issue the regulation, and forthwith tookevery practical step, by means of the telegraph and otherwise, to notify the State and the Divisional Electoral Officers accordingly.
  3. It is posible that in a very few cases electors were questioned during the earlier stages of the polling, owing to the inability of a Divisional Returning Officer to get in touch with a Presiding Officer prior to 8 a.nv. on Saturday, 28th October, but for all practical purposes the withdrawal was effective.

Regulations have no legal force unless, and until issued. This regulation was not issued, and never had any legal effect.

page 9441

QUESTION

MOTION OF WANT OF CONFIDENCE

Mr KELLY:
WENTWORTH, NEW SOUTH WALES

asked the honorable member for Yarra -

Whether the motion of no-confidence moved by him on the 29th November was prepared by the executive of his party?

Mr TUDOR:

– The procedure followed on the occasion referred to did not differ in any respect from that followed when a motion of no-confidence in the ReidMcLean Government was moved by the Hon. J. C. Watson, and when a similar motion was moved against the Fusion Government by the Hon. Andrew Fisher. No person outside the members of the Labour party - except the Prime Minister - knew that the amendment was to be moved. A letter was written to the Prime Minister notifying him of the intention to move the amendment, and it was handed to him by the honorable member for Maranoa on the afternoon when the amendment was moved. No one outside the party was consulted or knew the terms of the amendment.

page 9441

QUESTION

COAL MINES IN NEW SOUTH WALES

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

If he will obtain from the New South Wales Government and give to the House a statement showing -

The rents paid to the New South Wales Government by Mr. Brown for his coal leases in New South Wales?

The quantity and value of coal raised from his mines for the year 1915?

Mr HUGHES:
ALP

– I have forwarded the honorable member’s questions to the Premier of New South Wales.

page 9441

QUESTION

SALE OF RAW SUGAR

Mr CORSER:

asked the Treasurer, upon notice -

  1. Whether the Treasurer authorized the sale by a sugar mill or mills of raw sugar at £22 per ton?
  2. If so, will the Treasurer take steps to secure to growers also an increased price for their cane?
Mr POYNTON:
Treasurer · GREY, SOUTH AUSTRALIA · ALP

– Authority was given to a mill for the sale of 100 tons of raw sugar direct to storekeepers to tide them over the temporary shortage caused by the coal strike, and the intention was that the mill should sell at £18 per ton, that being the standard price paid to all the mills by the Queensland Government for raw sugar, but, owing to a misunderstanding, the mill charged £22 per ton, which will be rectified.

page 9441

PAPERS

The following papers were presented : -

Inter-State Commission Act - Inter-State Commission - Tariff Investigation - Report on Paper, Paperboards, Manufactures’ of Paper and Wood Pulp.

Ordered to be printed.

The War - Allied Territories in the Occupation of the Enemy - Correspondence respecting the Relief of. - (Paper presented to the British Parliament.)

Commerce (Trade Descriptions) Act - Regulations Amended - Statutory Rules 1916, No. 292.

Public Service Act - Promotion of W. H. Gibson, Postmaster-General’s Department.

page 9441

SUPPLY

Interim Financial Statement - Ministerial Policy

In Committee of Supply:

Mr POYNTON:
Treasurer · Grey · ALP

.- I move -

That there be granted to His Majesty for the service of the year ending 30th June, 1917, a sum not exceeding £3,293,200.

I propose to make a statement on the financial proposals of the Government. On the 27tb September last, just before the adjournment, the former Treasurer, tho Honorable W. G. Higgs, made a statement concerning certain taxation proposed by the late Government : T refer to the war-time profits tax, a Bill for which was introduced on the 17th May last; the proposed increased income tax; the levy on wealth for repatriation purposes; and the entertainments tax.

Since my appointment to the position I hold in the Hughes Government, it has been part of my duties to examine these instruments of taxation. The war-time profits tax, as proposed by the exTreasurer, applied to all businesses - whether continuously carried on or not - of any description carried on in Australia, or owned or carried on in any other place by persons ordinarily resident in Australia. The Bill, as originally drafted, provided that 50 per cent, of the war profits should be taken, but at a later date, the 27th September, the exTreasurer announced that it was proposed, in the second year of the operation of the Act, to take 100 per cent. of such profits. In examining this proposal I have taken into consideration the following factors : -

  1. Its effect on new businesses particularly; and
  2. Its effect on business and industries generally.

In England there is a similar tax in operation, but there the tax was 50 per cent. in the first year, and 60 , per cent. in the second year. I should like to submit that the operation of such a tax in an old and established country, where businesses, generally speaking, are of long standing, is not a reliable guide to us in a new country, where businesses and industries are springing into existence almost daily - a condition which it should be our policy to encourage.

An examination of some 300 balancesheets of companies discloses the fact that old and established businesses are not affected by war-time profits legislation to nearly the same extent as businesses of recent formation. That is chiefly owing to the war-time profits being based on the actual results of what is known as the pre-war standard of profits. In other words, companies or businesses thoroughly established prior to the war, and then showing large percentage profits, will not be nearly so much affected as new companies, or those companies or businesses which, prior to the war, did not exist or showed small percentage profits, and, in some cases, losses.

It is very clear that a very large portion of the revenue that will be derived from this source of taxation will be from businesses recently established, and such businesses as prior to the war showed a small percentage of profits. Unless some alteration is made in the Bill to treat these companies or businesses on a somewhat different basis from that which may be applied to old and established businesses, which in the pre-war period had earned good profits, the result will be inequitable.

In the ex-Treasurer’s financial statement the £1,000,000 estimated to be received from the war-time profits tax in the first year was based on a percentage standard of profits of 6 and 7 per cent., 6 per cent. being allowed in the case of companies, and 7 per cent. in the case of any other business. In the second year the percentage standard was increased to 7 and 8 per cent. respectively.

What Constitute War Profits. The Bill as drafted applied to all mining companies, and while it may be clearly demonstrated that the output of many products of the mines, such as lead, copper, molybdenite, tin, zinc, and other byproducts, has been enhanced very materially as a direct result of the war, it is difficult to find any argument that would justify the inclusion of gold mines amongst the taxable. Gold has not been enhanced in value as a result of the war. As a matter of fact, the war has depreciated the value of the sovereign very materially, if viewed from the stand-point of its purchasing power. The gold-mining industry, instead of deriving a benefit from the war, is being affected in the opposite direction. The prices of all material used in connexion with the industry are far in excess of what they were prior to the war. The Government have, therefore, decided to exempt the profits from the production of gold mines from the imposition of this tax.

Another important phase of this question is what is termed wasting or depreciating assets. It must be apparent that some companies and businesses may grow more valuable as they grow older, whereas there are other companies and businesses which have a limited life, and each year their assets are reduced in accordance with the extent of their output, or the term of their lease. This is clearly recognised in the Income Tax Assessment Act, section 17 of which provides that the capital expended by a person carrying on mining operations in necessary plant and development shall be divided by “ the estimated number of years during which payable mining operations may be expected to continue under normal conditions, and the quotient thus obtained shall, in addition to any other deductions allowed by the Act, be deducted from the income.”

A similar provision will need to be made in the War-time Profits Bill. It is quite apparent that, no matter how careful one may be in his endeavour to guard against injustice, there will undoubtedly be many cases of hardship as the result of the passing of the Act, and to meet that contingency it is proposed to establish a Board of Referees, to which, where the Commissioner is satisfied that hardship may be caused, cases shall be referred for decision.

Allowance should also be made for the deduction of amounts paid in respect of Commonwealth and State income taxes.

In estimating the revenue to be derived from this taxation I have reduced the amount which was originally expected to be received in the first year by £400,000, and in the second year by £1,100,000.

The Government do not propose to take 100 per cent. of the profits on the second year’s operations, and have decided to limit the tax to 50 per cent. on the first year, and 75 per cent. on the second year. If all profits were taken, there would be clearly no incentive for business people to extend their operations. It is further proposed to exempt fruit-growing from the operation of the Act. The loss of revenue from this will be negligible, and the exemption will save those in the industry the trouble of filling in returns.

Levy on Wealth for Repatriation Purposes. In examining this proposed instrument of taxation I have tried to ascertain -

  1. Our actual needs.
  2. The effect of such a levy on our borrowing within the Commonwealth if passed in its present form.
  3. Its effect upon the taxpayer generally.

Under the proposal of the ex-Treasurer the payment of1½ per cent. was spread over a period of three years, and it was estimated to yield £3,333,000 per year, or a total of £10,000,000 for the three years. Before deciding on the term over which these payments may be made, it is well to consider our necessities in this direction. In other words, there is no justifiable reason why we should impose on the wealth owner, even for this laudable object - the repatriation of our Australian soldiers - more than will be necessary to meet our requirements. On inquiries I have made from the Defence authorities, it isconceded that we shall be unable to expend this amount in the time originally contemplated. Assuming the war to finish by this time next year, it would take well into two years before our troops would return to Australia. I therefore propose to extend the period of payment over five years, collecting onefifth of the total amount each year. This will lighten the burden, and, instead of raising £3,333,000 per year as originally proposed, the amount expected to be derived under my proposal will approximate £1,835,000 per year, or £1,498,000 less than Mr. Higgs’ proposal. As the result of inquiries now in progress it may be possible to reduce the amount payable in the earlier years. The levy may be paid in five equal yearly instalments, or the contributor may pay cash, in which latter case he will be entitled to a rebate or discount calculated on the basis of war loan interest for the period covered by the prepayment. Donations of £5 and upwards to the Repatriation Fund will be credited as payment or part payment of wealth levy.

The proposal already made includes war bonds and inscribed stock as being subject to levy. There are some honorable members who believe that no promise or pledge was given that these bonds should be free from all taxation, and on examination of the War Loan Prospectus that contention can be maintained, as therein it is stated that “ all bonds and all transfers of inscribed stock will be free of Commonwealth and State stamp duty, and interest will be free of Commonwealth and State income tax.” Clearly they were not to be free from all taxation, but many of the public appear to have been under the impression that the principal would not be taxed in any way, and the announcement that a levy of½ per cent. per. annum for three years on war bonds, as well as on ordinary wealth, was to be imposed, has unsettled the value of these securities, and in some few instances, so I am advised, investments have gone to other countries because of this proposal. The position of the Commonwealth is a dual one. In addition to our intention to increase taxation, we are also a borrower within our territorial limits, and early next year we shall have to raise about £18,000,000 for war purposes. Later on, if the war continues, we will most certainly have to raise a much larger amount. If we insist upon levying½ per. cent. for three years, we may find ourselves in the position of having to give an increased percentage for ten years on the balance of the loans we require, and the result would be that the increased amount to be paid for new loans would far exceed what would be gained by imposing the levy on war bonds.

My financial advisers tell me that if the proposed levy be maintained on war bonds and inscribed stock it will seriously interfere with the next issue; but if the public be assured that no taxation will be enforced on war loans it is thought we will be able from time to time to raise all the money we require locally for war purposes. We have, therefore, decided to exempt war bonds and inscribed stock from the operation of the wealth levy.

There is another phase of the proposed levy which should receive earnest consideration. That is as to whether some provision should not be made to meet bard cases. Many of those who will have to pay are persons whose income is not great, and there may be others who, while owning considerable property, may yet not have liquid assets to satisfy the levy, and who thus may suffer an injustice if forced to realize on some portion of their property to enable them to pay.

To meet this latter contingency, it is proposed to accept a first mortgage on such properties, and to charge interest on the amount of the mortgage. That would mean, instead of having to find the whole of the cash, they would pay interest on the mortgage, and have the right to pay off at any time they desired within the five years. It has also been decided that a Board of Referees shall be appointed. The personnel of this body will be the same as that appointed to deal with cases of hardship under the war-time profits tax. The taxpayer who considers himself oppressed will thus be given an opportunity to seek relief.

There will be an exemption of £500, but it is not intended to continue this exemption through all gradations.

Amendment in Present Income Tax. It is intended to increase the income tax by 25 per cent., and provision will be made so that the exemption will disappear on incomes of £500 and over. It is further proposed to increase the amount allowed to be deducted from taxable income to £26 for each child under sixteen years of age, and in the case of single persons without dependants the exemption will be reduced to £100. The only alteration in this tax, compared with the proposals of my predecessor, is the abolition of the ex- emption on incomes of £500 and over. The present exemption of £156 on income from personal exertion is allowed in full on all net taxable incomes not exceeding £500. Over that amount it diminishes by £3 for every £10 increase in the net taxable income, until it disappears entirely, when the net taxable income reaches £1,020.

In the case of income from property the exemption is £156 when the net income does not exceed £156. The exemption diminishes by £2 for every £5 by which the net taxable income exceeds £156, until it disappears entirely when the net taxable income reaches £546.

In the case of composite incomes, i.e., a total income derived partly from personal exertion and partly from property, the general exemption of £156 is apportioned between the net taxable income from the two sources, until the income from property reaches £546, and then the diminished deduction, which may still be allowable, is deducted from the income from personal exertion until that reaches £1,020, when it vanishes.

To make the general exemption of £156 vanish in all cases when the total net taxable income from all sources reaches £500, it will be necessary to provide that it shall diminish by £5 for each increase of £11 in the total net taxable income above £156.

In the case of a single person without dependants, the exemption of £100 will diminish by £1 for every £4 in the total net taxable income above £100, so that it also will vanish when the total net income reaches £500.

Entertainments Tax. The Government propose to go on with the entertainments tax, but will not impose tax on tickets of a less value than 6d. The ex-Treasurer estimated to get £1,000,000 in six months of the first year, but on the latest information I can obtain on this subject I have been compelled to reduce this estimate very materially, and do not expect to get more than £700,000 per annum from this source.

Economy. One of the first things done by me on assuming office was to summon the heads of the chief spending Departments, with a view of seeing if the Estimates of this year could be reduced, and at these interviews I impressed on the officers that I was not asking them to do anything which would in any way impair the efficiency of the many public services, but stated that the prosecution of the wax was paramount to all other questions, and that to do this” men, money, and munitions were essential. As a soldier at the front has stated, “ The internal decorations of our house can well wait until we have made the foundations safe from attack from outside.” I am not at all doubtful of the ultimate result of the war, but the hour of peace is not yet at hand. When it is, it will have to be on the terms of our Allies. Anything short of this will leave the whole world in constant dread of a repetition of the dreadful carnage of the past two years. The fact of the war being so far from our shores seems to have dimmed our vision of what our fate would be if by any chance the Allies were defeated. We have passed through a phenomenal decade of prosperity, which is indicated by the following figures : -

There has been no period in our history that has been more prosperous than the past ten years, and this may account for the revel in public expenditure which is still rampant in both the Commonwealth and the State activities. The time has surely arrived when we should call a halt and prepare for the aftermath that is certain to follow this world-wide war. I am pleased to report that my appeal to the officers and my consultations with Ministers were not in vain, but greater economies will yet, I think, be made.

This portion of the Government’s policy is far-reaching, and will embrace not only a close scrutiny of all departmental proposals for’ expenditure, but an early and full consideration in relation to each of the large spending Departments as to whether current expenditure can be re duced without affecting efficiency, and without reducing existing public facilities and conveniences beyond what is fair and reasonable to provide in time of war.

Coming into office when nearly half the year has gone, I find that Departments have already put in hand the several schemes of the year, and it is difficult to at once effect the economies which might have been made before the year’s work began. I have already found it possible, however, to curtail expenditure in some directions, and am continuing my investigations.

I am keeping in view that it is necessary to economize the resources of the Commonwealth in order that the war may be carried on, also that costs are at present so high as to demand the postponement, where possible, of works which, under more favorable circumstances, might be undertaken. As regards the extra costs, it will be useful to quote the following figures, which have been supplied by the Commonwealth Statistician, namely: -

The alterations made by me to date in the Estimates submitted by my predecessor on 27th September are as follow : -

Revenue. -

Expenditure Out of Revenue (not including War Expenditure). -

In the above decreases I have included £637,900 for expenditure on Additions, New Works, and Buildings.

I might, however, have taken credit for a decrease of £730,884, because I found that after Mr. Higgs’ speech of 27th September, 1916, his Estimates were increased at the request of the various Departments to the extent of £92,984.

According to the amended figures supplied by the Defence Department, and allowing for the improvement shown above, the amount which Mr. Higgs expected to borrow for war during the financial year may be reduced by £5,850,000.

Sinking Fund. In the financial statement which the late Treasurer made to the House on 27th September last, provision was made during 1916-17 for contributions to sinking funds on all loans for works purposes in accordance with the existing law, and in addition 2¼ per cent. on all war loans. The amount so provided was £2,747,000.

A sinking fund of 2¼ per cent. per annum accumulated at 4½ per cent. per annum would extinguish the debt in twenty-five years.

If contributions to the sinking fund during 1916-17 are limited to the requirements of the existing law, namely, 10s. per cent. per annum on Commonwealth Inscribed Stock issued for Works, with 5 per cent. per annum in respect of certain rapidly wastingworks, also a 10s. per cent. per annum contribution on war loans raised from the public in Australia, the amount so required would be £423,555, or a saving of £2,323,445 on the amount provided by Mr. Higgs.

A sinking fund of 10s. per cent. per annum accumulated at 4½ per cent. per annum would extinguish the debt in fifty-three years.

If a 1 per cent. contribution to the sinking fund were made on all loans raised by the Commonwealth, excepting the loans raised in London for the States, the amount required would be £1,301,778, or a saving of £1,445,222 on the amount provided by Mr. Higgs.

A sinking fund of 1 per cent. per annum accumulated at 4½ per cent. per annum would extinguish the debt in thirty-nine years.

The question of the proper disposal of Commonwealth Sinking Funds is important.

At present, we have at the credit of Commonwealth Sinking Funds the amount of £388,313. Of this, £158,380 has been invested in Commonwealth Treasurybills, and £140,630 in Commonwealth Inscribed Stock. The balance, £89,303, is held in cash, and is now awaiting investment. Following the usual practice, the investment would probably be made in the War Loan. Thus our Sinking Funds are not held for the redemption of our loans, but have always been used for subscribing to fresh Commonwealth loans, and the money has been expended for the Commonwealth’s current needs. The position created is equivalent to the direct expenditure of that money on Commonwealth present requirements.

It is right that taxation should be arranged so that, in addition to an amount sufficient to meet ordinary expenditure, there shall be raised an amount to be taken in reduction of loans. Assuming that the returns from taxation can be kept up to about the same level, it is clear that at the end of the war there will be a margin above current needs which can then be paid into a sinking fund. During the war, however, it does not seem wise that the amount raised by taxation in excess of ordinary requirements should be paid into a sinking fund. As the law stands, such sinking fund could be used for the purchase of new Commonwealth securities, and be expended on works or other services. Assuming that such investment were prohibited by law, it seems that the sinking funds could be used only in one of two ways, namely: -

  1. To repurchase Commonwealth securities in the market and to cancel them, or
  2. To place the funds in the hands of the Treasurer or trustees with directions to invest them in short-dated securities other than those of the Commonwealth, so that the money will be available at the dates of maturity of Commonwealth loan.

As regards the first course, it may be said that no advantage would be gained at present. Indeed, we might pay in the re-purchase a price higher than the subscription price, especially when we consider that certain commissions have to be paid on the raising of loans.

As regards the second course, it must be pointed out that it is not possible to place funds beyond control of the Parliament of the day. Even if the Constitution were altered, it could be again altered. Particularly during the present crisis does it seem unwise to create a large sinking fund, because, should the war last much longer, every resource of the Commonwealth will be used for existing requirements, and it is not likely that sinking funds would be left intact.

I suggest the wisest course is to arrange taxation so that, above other requirements to be met out of taxation, there shall be raised an amount equal to 1 per cent. of the whole amountof war indebtedness. The additional amount of 1 per cent. would be used to meet war expenditure, and thus the raising of so much of war loans would be avoided.

The effect of such a course would be practically the same as if the 1 per cent, were placed at the credit of the sinking fund and used immediately for the re-purchase of Commonwealth War Loan securities. The proposed method will be an effective way of insuring that the extra taxation shall go to the relief of War Loans, and arrangements will be made so that, immediately on the cessation of war, the amount of 1 per cent, on all loans shall be paid into the credit of a sinking fund, and definitely ear-marked for the sole purpose of paying off the loans.

Questions are frequently asked as to the number of years required to pay off a debt by means of a sinking fund, and the following particulars may be found useful by honorable members. It is assumed that the sinking fund will earn interest at the rate of 4^ per cent, per annum.

Treasurer’s Advance. In the first Supply Bill of the current financial year there was granted as advance to the Treasurer the sum of £600,000, and in the second Supply Bill the sum of £1,100,000, or £1,700,000 in all.

On taking charge at the Treasury I found that the Treasurer had authorized for expenditure since 1st July last the whole amount of his advance, namely, £1,700,000. Now it seems to me that a change is required. That was a very large sum of money for the Parliament to grant to the Administration.

It must be remembered that there is really no restriction upon the Treasurer as to the purposes on which he can expend the moneys granted from his advance. The amount is voted in a lump sum, which is described in the Supply Bill merely as “ Advance to the Treasurer.”

I am not criticising any particular Minister in bringing this matter under the notice of Parliament. All my predecessors have been intrusted with large sums, hut there has been a tendency to increase the amount intrusted, and I think the time has come when Parliament should reconsider the position. It can scarcely be contended that the practice which has sprung up tends towards economy. It is necessary, in my opinion, that, as far as possible, Parliament should indicate the purposes for which it grants public funds.

It is not contended that some amount of advance should not be given, because all Governments find that, in spite of most carefully estimating the proposed expenditure, circumstances arise which could not have been foreseen, but the amount given to the Treasurer for purposes to be decided upon by himself should be kept as low as possible.

No amount has been included in the present Supply Bill for Treasurer’s advance. The Bill includes provision for works which, during last financial year, were paid for out of Loan Funds. These works include construction of Kalgoorlie to Port Augusta railway, railway in the Northern Territory, placing telephone wires underground, erection of Commonwealth Offices in London, machinery at Cockatoo Island, and purchase of postal lands and lands in the Federal Capital Territory. For some years prior to 1st July last, it was the practice to provide for these works by loans from the Notes Fund. The notes in circulation having now reached the large amount of £46,000,000, it is not thought wise to make any further issue for works purposes. Also it seems inadvisable, while the necessity for raising such heavy loans for war purposes exists, that any attempt should be made to raise a loan from the public for works.

It seems a necessity, therefore, that works shall be provided for out of current revenue. The money for these works should be provided for in the Supply Bill. I have included not only provision to carry us on during the next three months, but have included also the amounts paid out of revenue since 1st July last, and charged to Treasurer’s advance. This seems necessary, because the whole amount required for the eight months of the financial year should be brought for appropriation by Parliament.

The following table shows the amounts included in the Supply Bill for works paid for in previous year from Loan Fund:-

When the Supply Bill has been passed, the expenditure on these works will be cleared from Treasurer’s Advance and charged finally to the votes in Supply. This will leave the Treasurer with a balance in Treasurer’s Advance, which will be available to meet the unforeseen re quirements of the Government, and thus it has become unnecessary to ask for any amount of Treasurer’s Advance at present.

Australian Notes Fund. The following particulars relating to the note issue may be found useful : -

Large Treasury Balances. Another matter to which I desire to draw the attention of the Committee is the very large accumulation of Treasury balances which are not earning interest. On 31st October last there was in the Commonwealth Bank in Australia at the credit of current account a total of £20,275,570; there was on fixed deposit in the Commonwealth Bank, bearing interest at 2 per cent. per annum, £2,000,000; current account in English, Scottish, and Australian Bank, Darwin, £1,186; total, £22,276,756. In addition, there was in London, on the same date, £4,155,095; a grand total of £26,431,851.

Included in the foregoing are moneys borrowed for war purposes, amounting to £20,468,771.

The amount of £4,155,095 in London was nearly all lent to the market at current rates of interest.

I am looking into the matter in anendeavour either to obtain interest on larger portions of these funds, or to provide that moneys lent to the Commonwealth shall be paid into the Treasury at dates more nearly corresponding with the dates on which moneys have to be expended.

Supply Bills. For this financial year Parliament has already passed two Supply Bills for ordinary services, and two for new works. The third Bills now submitted are to cover expenditure for three months, and will provide for the needs of the Commonwealth up to 28th February. 1917.

First ordinary Supply Bill, without Treasurer’s Advance and refunds of revenue, £2,082,388; second ordinary Supply Bill, without Treasurer’s Advance and refunds of revenue, £3,823,580 ; third ordinary Supply Bill, without refunds of revenue (no Treasurer’s Advance), £3,143,290.

New Works Supply Bills - First, £662,085; second, £918,000; third, £2,702,760.

The third new Works Supply Bill includes £1,776,500 for works which last year were paid for from loan, and which up to the present, in this financial year, have been charged to Treasurer’s Advance. Deducting that amount, the present new Works Supply Bill provides for £926,260 for ordinary new works.

The Supply Bills do not contain expenditure for any new propositions. They contain provision for only the usual requirements of the Commonwealth, including the continuance of works authorized by Parliament in last financial year.

Mr POYNTON:
ALP

– No. That is a matter of policy. I beg to submit the motion.

Sir JOHN FORREST:
Swan

.- At the request of the Leader of the Opposition, I propose to open the debate upon the financial statement. First of all, I congratulate our old friend on his appointment to the position of Treasurer of the Commonwealth. I am sure that every honorable member will recognise that he has come into his estate very recently, and that we must be generous in dealing with him. The financial figures were placed before us in September last by his predecessor in office, but action was not taken in regard to many matters, and the duty of bringing them before us again has devolved on him. The alterations that he has submitted are, in the main, in the right direction, but I disapprove altogether of some of the. methods of taxation proposed by the late Government, and adopted, with modifications, by the present Government. In criticising the financial statement, the views I express are my own, though I dope that my friends on the Opposition side will be found to a large extent in accord with them, and I am not actuated by any political motives, and am anxious to assist the Government. Money must be found for the war and for other purposes, but some of the methods by which the Government propose to raise it do not meet with my approval, nor do they follow any principle. We ought to adopt the easiest and best means of obtaining funds, and follow some principle in regard to financing the war, and adhere to it as far as possible. The principle that we should follow is that on which we have acted for the most part so far, though not altogether, namely, meeting the main expenditure out of loan funds, and providing interest and sinking fund “from revenue. It is a sound principle, especially in a new country, where there is so much to be done, and where our greatest duty is to increase the means of productivity. To talk of the country having millions of acres, without making those acres productive, is useless. The obligation rests on the Commonwealth to use all the money it can spare in the direction of increasing production. I quite agree with the Treasurer in regard to the exclusion of the Commonwealth war bonds from the proposed wealth levy. Their inclusion would have had a very disastrous effect, apart from the point of honour concerned. It was thoroughly understood that these bonds were to be free of taxation, and the proposal to put them in, the category of wealth liable to be levied on would mean that they might be rendered of little value if the process were continued, while it would act disastrously in regard to the securing of further loans. Therefore, I consider that the Treasurer has acted wisely and justly, and also in the interests of the Commonwealth, in proposing to exempt them.

Dr Carty Salmon:

– The price of the bonds in the market shows it.

Sir JOHN FORREST:

– Besides the alterations of the market price, there would also be a disinclination to invest further in Commonwealth war loans, and that is a matter which we should try to avoid. We should adopt the principle of paying for the war from loan funds, and providing interest and sinking fund from revenue. All the nations at war, including Great Britain, are in the main, and in some cases wholly, financing the war from loan funds.

Mr Poynton:

– Great Britain is providing an amount about equal to 1 per cent, from revenue.

Sir JOHN FORREST:

– The proportion is small in comparison with the total expenditure. To a large extent Australia has been doing as the belligerent nations have been doing. I wish that it had done so to the full extent, because there are plenty of means of spending all that we can raise in wealth-producing works and industries. All that is necessary, and all that is advisable, is the annual provision of interest and sinking fund from revenue. The taxation methods of Australia are foolish, serious, and dangerous. In this new country, with a young, energetic population, desirous of reclaiming the wilderness and building up a great and virile nation, who would believe that there are two taxing machines in operation - the Federal Parliament and the State Parliaments - with plenary and equal powers of taxation, both engaged independently, and without much regard to what the other is doing, in taxing the same people and the same property ?

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– And allowing hundreds of thousands to escape altogether.

Sir JOHN FORREST:

– There are two land taxes - the Federal and the State. There are two income taxes - the Federal and the State. There are two probate duties - the Federal and the State.

Mr Tudor:

– What is the right honorable gentleman advocating - Unification ?

Sir JOHN FORREST:

– I am not here to advocate a scheme just now. I am merely pointing out the fact. I do not think that such a system ought to exist, and I feel sure that it cannot exist for any length of time. It was never contemplated by the framers of the Constitution. We talked around the subject, but it was said that there would never be a Commonwealth tax upon land and incomes except in times of great financial difficulty and emergency. We therefore left the Commonwealth and the States with complete co-ordinate powers of taxation.

Mr Webster:

– The exercise of those powers by Commonwealth and States was not foreseen by the framers of the Constitution ?

Sir JOHN FORREST:

– We knew that they could be exercised, but we did not think for a moment that such a suicidal policy would enter the minds of a Commonwealth Government. As a matter of fact, for a long time it did not. If we are a practical, common-sense people we ought to deal with this matter.

Some one has suggested that we must have Unification. I do not know about that, but I do know that if this system of double taxation goes on it must destroy the Federation, because the people cannot and will not for long endure these two taxing machines operating upon £hem. I hope that the Treasurer will not think that I am altogether blaming him for this policy, although he is now seeking to give further effect to it. I put the whole blame on the Labour party. The taxation of land and incomes was not proposed in the Commonwealth Parliament by the Liberal party, and never would have been proposed by them. It was brought forward only when the Labour party came into power in 1910.

Mr Tudor:

– The right honorable member and his party can alter the system to-day if they wish to do so. They are keeping the Government in power.

Sir JOHN FORREST:

– The honorable member knows that it is not easy, and especially in this time of war, to make alterations. For ten years, and until Mr. Fisher and his party came into power, about the time when the Braddon blot terminated, the finances of this country were carefully administered. The law was observed. The Treasurer’s advances were carefully controlled, and everything was done with the strictest regard for legality. Can any one say that this is so to-day, or that such a policy has been adopted since the Labour party came into power in 1910? No. All is now changed. Recklessness and illegality have been rampant. Parliament has been ignored. The solidarity of the Caucus has defied attack.

Mr Fenton:

– Which Caucus?

Sir JOHN FORREST:

– Your Caucus - the Labour Caucus. They were solid, and for «years defied attack on any subject whatever. Only recently the late Government purchased ships at a cost of £2,068,000.

Mr Fenton:

– Who did that?

Sir JOHN FORREST:

– The Labour Government which the honorable member supported, and, so far, I have never heard a word in condemnation of it either in Parliament or out of it.

Mr Patten:

– That action was taken, and did not produce one resignation.

Sir JOHN FORREST:

– It did not.

Mr Tudor:

– I approved of that action.

Sir JOHN FORREST:

– But the Government to which the honorable member belonged had no authority to take it. They acted without the authority, and even without the knowledge, of Parliament. No explanation of the transaction has ever been given to Parliament, no attempt has been made to secure the necessary authority for it. No one, however, seems to care. Such illegalities, a few years ago, would have sounded the deathknell of the Government responsible for them. Nowadays they are passed by because the solid Labour Caucus majority has defied every attack. For all practical purposes during the last six years, in regard to finance, there might just as well have been no Parliament.

Mr Fenton:

– The right honorable member’s party were in office not very long ago.

Sir JOHN FORREST:

– But we had very little power. On the other hand, the Labour party have been in office with a large majority, and we might as well have had no Parliament at all as a Parliament controlled by their Caucus. I repeat that they have defied attack. They have been absolutely irresponsible, and have had no regard for our protests. There is on these Estimates a proposed vote of £500,000 in respect of certain sugar transactions. The little I know of the matter leads me to say that this expenditure is due to* bad administration on the part of State and Commonwealth Governments. Some one has blundered, and the people, in consequence, have to pay £500,000. But no one seems to care. And this is what we call parliamentary control of finance!

I wish now to deal with the Govern ment’s war profits proposals. I am absolutely opposed to the application of this war profits principle to the primary industries of Australia. Such a policy is unwise and suicidal. The primary industries are already subject to taxation. The land is taxed twice over by two different taxing masters, and any income derived from it is also levied upon by two different taxing authorities.

Mr Fenton:

– But that applies to every industry.

Sir JOHN FORREST:

– I am dealing now with the primary industries. The honorable member may refer to the others when he proceeds to discuss the financial statement. The primary industries are already subject to two land taxes and two income taxes, and this further levy is now proposed on the same assets. It will kill the goose that is laying the golden egg. I am very glad that the present Treasurer has* exempted gold mining, which I regard as a primary industry, from his war profits proposals; but, as one who knows something of the subject and who is anxious to be fair. I must say that I see no more reason for exempting gold mining than there is for exempting coal, copper, tin, and lead mining, as well as the other mineral industries.

Mr Fenton:

– But what about the profits made by the other industries?

Sir JOHN FORREST:

– Even if they are making a profit, these particular taxation proposals will not apply to them unless their returns are greater than they were in pre-war times. The copper, tin, lead, and other mining industries will not produce much revenue under this scheme, but the effect of the war profits taxation will be to do a great deal of injury to them, by restricting and discouraging enterprise. Gold, copper, tin, lead, and other mineral industries do much good to other industries. They are not in competition with any other enterprise, and no industry is affected by them except in a beneficial way. This wealth, which comes out of the bowels of the earth, has an influence for good on every other industry, and should not* be levied upon, except by means of the ordinary land and income taxes. Such industries, on the contrary, require additional encouragement and assistance at the hands of the Legislatures of this country. I am therefore altogether against this proposal. It has already injured and retarded mining enterprise throughout Australia. The result is that no one will now ‘‘look at a mining investment because of these war profits taxation proposals. In their effect they are very like the action of the late Government in interfering with the flotation of mining companies, because, forsooth, some one might possibly be taken in. Is not that danger always going on1! Caveat emptor! “ Let the buyer beware.” He has always had to be careful, and why should he be exempted now from the necessity of taking reasonable precautions? Why should enterprise be stopped and the flotation and development of mining undertakings be interfered with at the present time, when capital is so hard to secure ? It is difficult for me to understand how it could have entered any one’s mind to interfere with mining enterprise at a time like the present, when our desire should be to encourage every one to launch out and invest capital, so as to increase employment and produce more wealth.

Mr W Elliot Johnson:

– The same remark Will apply to farming and other industries.

Sir JOHN FORREST:

– Quite so; but there are not so many company flotations in connexion with agricultural pursuits as there are in regard to mining operations. Mining, as most of us know, is very risky and precarious, and, as a rule, the profits derived from it are not very large. In some cases splendid returns are obtained, I am told, but it is not so in respect of every mining, venture. We must not cease to remember that already mining enterprises have to pay income and land taxation, and now, for no reason at all, this additional burden is cast upon them. I refuse to believe that any one will invest his money in mining ventures when, at the most, a profit of only 7 per cent, or 8 per cent, can be secured. The chances are, in many cases, that the mining investor will lose his money; at all events, he has always to take the risk. To say, therefore, in such circumstances, that when he does strike a good thing, he will be satisfied to get 7 per cent, out of it, is to say that which no one will believe. If 7 per cent, is to be the full extent of his good fortune, he will leave mining investments alone. Another point worthy of consideration is that some of the old and flourishing companies which have been paying high dividends for many years will not be affected in any way by this war profits taxation. On the other hand, a new enterprise which, since the outbreak of the war, has been fortunate enough to strike a rich patch, will have from 50 to 75 per cent, of its profits taken by the Government, while the shareholders will receive only 7 per cent, on their invested capital. Such interference with the industry must rebound upon those responsible for it, and end in disaster. It will do no good, but, on the contrary, will result in a great deal of harm.

Mr Higgs:

– Would the right honorable member tax the old and flourishing companies which have” been earning these higher incomes?

Sir JOHN FORREST:

– That is not the proposal. I am dealing with what was really the honorable member’s own proposal when he held office as Treasurer. This legislation, which I believe emanated from the fertile brain of the honorable member for Capricornia, in so far as it refers to the primary industries, should be entitled, “ A Bill to destroy enterprise in the development of the primary industries of Australia.” I have made these observations with a view of showing the Government how far I disapprove of certain of their proposals, and I appeal to them and to the Treasurer not to proceed in such a suicidal course.

Mr Mathews:

– That is a bit of a threat.

Sir JOHN FORREST:

– The honorable member would like it to b’e, but it is not. I appeal to the Treasurer not to proceed in such a suicidal course so as to injure the primary industries. Money, I know, is required, but I object to this method of raising it. I want what I believe the Treasurer himself desires, and this is as much economy as possible.

I come now to the levy on wealth proposals of the Government. I am glad that the Treasurer has decided to extend the payments over five instead of three years; but I should like to see this levy wiped out altogether, and the necessary revenue obtained annually in the same way as other war expenditure, the revenue bearing only interest, and sinking fund. The proposed levy is as unnecessary as it is unjustifiable. The income from land and that from other sources are already taxed twice over, by the Commonwealth, and by the Governments of the States. Are the savings of the people to be taxed out of existence? capital is what we most want in this country, and it is practically being all taxed away. My objections to this proposal are that it is bad in principle, and that this method of obtaining the money is not required.

Mr Poynton:

– Some provision must be made for returned soldiers.

Sir JOHN FORREST:

– There is another and simpler way in which such provision can be made. There is neither reason nor necessity for adopting a different method for this particular part of the war expenditure. The people must pay, but they should be asked to pay under a method that is fair; their capital should not be taken from them.

Mr Mathews:

– The right honorable member will say that we ought to borrow the money.

Sir JOHN FORREST:

– Yes. I would borrow it in the same way as we will have borrowed by the end of this year the £141,000,000 for the war. The honorable member supported a Government that borrowed largely. Wealth in land and in other investments is already taxed both by the Commonwealth Government and by the Governments of the States, and it must continue to bear the burden of taxation. I am not advocating that those who possess wealth shall not be taxed. The wealthy must be taxed, and I believe that they are willing to pay the necessary taxes, but the taxation should be made as easy as possible, so that the country may not be injured by it. We do not want spoliation and confiscation, which is what some honorable members have been preaching. They would take by force from the people their possessions. No doubt the honorable member for Capricornia is not personally responsible for this proposal. I think that he would not have made it could he have helped himself. But he was forced to pander to a clamour for the conscription of wealth, which was ungenerous, and without just foundation. The majority of the people of this country have not unduly suffered by the war. That ‘is shown by the fact that last year the deposits in the savings banks were increased by £5,000,000, and those in the other banks by £20,000,000- a very satisfactory state of affairs.

I come now to the expenditure” proposed by the Treasurer. The normal expenditure of the year immediately preceding that in which war broke out - 1913-14 - was £23,161,000, and the normal expenditure for this year - 1916-17 - is to be £32,586,000, an increase of £9,425,000. Had the honorable member for Grey been long in office I should have felt justified in very adversely criticising; this immense increase. The expenditure in the year before the war was almost the largest on record, and it should not have been greatly exceeded in following years in which war was raging. There will, of course, be the increases caused by interest on war loans and contributions to sinking funds, but the large in creases that we have had have been the result of want of reasonable caution and of reckless expenditure. It seems to be the rule with Governments ridden by Labour Caucuses to be extravagant and to waste money. I hope that this Government - now that it is no longer Caucus ridden - will break away from that tradition. The Labour Governments which preceded it had the note issue fund to draw on, but this Government will not be able to get money from that source, and will, therefore, be brought up with a round turn. Unfortunately, however, it is proposed to continue out of ordinary revenue the spendthrift policy which has prevailed during the last six years. The normal expenditure for this year is £8,521,000 more than that of last year. Here are some of the increases - Old-age pensions, £800,000; war pensions, £870,000; Home Affairs, £230,000; new works and works hitherto paid for from loans, £3,778,000; and other items which make the total increase that I have named. It must be borne in mind that those are the increases over the corresponding expenditures of last year and not the total sums to be expended. Although the Treasurer has told us in his financial statement that “ The Supply Bills do not contain an expenditure for any new propositions,” there is an increase of £3,778,000 from revenue in the expenditure on public works. The total expenditure on public works payable from revenue is to be £6,664,974, including £2,270,790 expended on works hitherto constructed out of loan money. The loan money was obtained from the note issue fund, but the Treasurer tells us that the note issue is now as large as he thinks it wise to make it. Therefore, no money is available from that source. We are paying, as I have said, out of revenue this year a sum of £2,270,790 for works which previously were paid for from loans, viz., £1,400,000 for the Kalgoorlie to Port Augusta railway, £392,790 for conduits, £100,000 for Federal Capital land, £173,000 for the construction of offices in London, £70,000 for post and telegraph buildings, £70,000 for the Katherine River railway, and £65,000 for the Cockatoo dock. Already, on the seven items that I have enumerated, nearly £8,000,000 has been provided out of loan funds. About £9,000,000 has been provided for public works out of the note issue fund; about £20,000,000 more being accounted for in advances to the States, and in other ways. The balance of the £6,664,974, amounting to £4,394,184, goes to provide for the ordinary new works of the year. That money has also to be obtained out of revenue. The increase in the expenditure on new works this year over the expenditure of last year is £1,527,573. The amount of £4,394,184 to be expended on new works is made up of £1,140,000 for naval and military works, £150,000 for Federal Capital works, and expenditure, amounting to £3,104,184, on miscellaneous services. The sum of £856,618 has already been spent on Federal Capital new works.

Mr Poynton:

– The right honorable member must admit that this expenditure was approved by Parliament. It has nothing to do with the present statement.

Sir JOHN FORREST:

– These works, proposed to be carried out during this year, and to cost £6,664,974, may be covered by interim Supply Bills, but will come up for consideration in detail under the general Appropriation Bill. However, that amount to be expended on public works is chargeable against the revenue this year.

Mr Sampson:

– That is supposed to be raised by taxation.

Sir JOHN FORREST:

– Yes, it has nothing to do with the special war taxation, but is on current account.

To those who clamour for conscription of wealth, it may be interesting for them to be told that this year £15,654,499 is being conscripted for financing the war, all from revenue and special charges. Amongst these special charges are - war expenditure, £6,343,499; war pensions, £1,000,000.

Mr Richard Foster:

– The probate tax is not for the war:

Sir JOHN FORREST:

– It was a war measure.

Mr Richard Foster:

– It is spent on the civil side.

Sir JOHN FORREST:

– Both income tax and probate tax were brought in as war measures. Then we have the interest and sinking fund, £6,476,000, and repatriation, £1,835,000, making a total of £15,654,499. It will be seen that on public works, and on the war, there will be paid this year from revenue, £22,319,476.

I now come to the cost of the war. The estimated cost of the war this year is £78,956,001 from loan, and £6,343,499 from revenue, making a total of £85,299,500. We had loan moneys in hand on 30th June, 1916, £17,074,192. We have, therefore, to raise the balance of £68,225,308, and it is proposed to obtain it in the following way: - From revenue, £6,343,499; from British Government, £13,000,000; repayment of advanceby States, £2,950,000; and by loan, £45,931,809; a total of £68,225,308. The estimated total cost of the war up to 30th June next, according to the published figures, will be £141,500,000; and of this, £131,000,000 will be raised by loan and £10,500,000 by revenue.

I should like to say a word about what I may describe as the financial orgy which has been going on, not only in the States, but in the Commonwealth, during the past two years. On 30th June, 1914, before the war, the indebtedness of the States amounted to £325,500,000. In one year, by 30th June, 1915, this indebtedness had increased to £350,500,000, an increase of £25,000,000 in one year, the largest increase on record. I am sorry I cannot give the exact figures, because I could not get them in accurate form from the Statistician or the Government for the year ended 30th June last. Australia must be a great country to stand this reckless exploitation.

Mr Higgs:

– The right honorable gentleman must remember that the transcontinental railway is included in the expenditure.

Sir JOHN FORREST:

– The exTreasurer will allow me to say that the money for the railway up to the present time has not been obtained from borrowing, but from the Note Fund, which has cost next to nothing. I do not propose to say anything more. I should have been better pleased had I had something more agreeable to say to the Treasurer, who, of course, has not had time to deal with all these difficult matters. I hope, however that the honorable gentleman will take into consideration what I have said as an expression of opinion from one who has looked into the matter, and who thoroughly believes in the arguments he has put forward. I also hope that the Treasurer will reconsider the matter of the taxation of profits on the primary industries, because such taxation I regard as mischievous. I should further like the Government not to think of levying on wealth or capital for repatriation or other purposes, but to obtain the money in the same way as it obtains the money required for the war. Such revenue as is required can be raised in the ordinary way, and not by taxing that which is doubly taxed already, and by means which would prove an interference with, and would reduce, the wealth-producing power of the people. Under all the circumstances, I hope andtrust that the Treasurer will takethe usual means for raising the necessary money. We ought to make each year finance itself - that is the basic principle of our public finance. We ought to raise enough money for each year, and, if possible, at the end of each year, have a small balance in hand. I feel sure, from what the Treasurer has said in the course of his statement, that he will economize wherever he can, and that what he terms “ the revel in public expenditure which is still rampant in both the Commonwealth and the States ‘ ‘ will cease. The note issue is not now available for any continuance of reckless expenditure; and I can only hope that a saner system of finance will be established, and that the financial orgy of the past few years has now come to an end.

Mr TUDOR:
Yarra

.- Is the Treasurer willing to grant an adjournment of this debate?

Mr Poynton:

– We did no business last week, and we have all these financial proposals to deal with.

Mr TUDOR:

– Every other honorable member in the House is at a disadvantage compared with the right honorable member for Swan, to whom a copy of this statement was handed last week.

Mr Pigott:

-Did you ask for a copy?

Mr TUDOR:

– I did.

Mr Poynton:

– I did not give the right honorable member for Swan a copy.

Mr TUDOR:

– While the Prime Minister was speaking last week, I saw a’ copy passed to the right honorable member forParramatta, who handed it on to the right honorable member for Swan. Copies had been given to the press also, and the Treasurer was busy until midnight withdrawing them. Yet no member of the party which I have the honour to lead could obtain one. I remind the Treasurer that that is not the way in which to get business conducted pleasantly.

Mr Joseph Cook:

– That is the way your side always acted.

Mr Higgs:

– You know that that was not so.

Mr Poynton:

– Had the honorable member for Yarra told me that he intended to move a motion of want of confidence, I should not have issued the copies.

Mr Joseph Cook:

– Did not the late Treasurer give copies of his statements to every newspaper before he delivered them in the House?

Mr Higgs:

– No.

Mr TUDOR:

– To-day I desired to proceed with the discussion on the Prime Minister’s statement. The right honorable member for Parramatta stated that he was not prepared to proceed with the debate on that statement, and I sent word to the Prime Minister that I would be ready to proceed with the debate. In my opinion, it would have been better to have debated the statement which the Prime Minister made with regard to recruiting, the conduct of the referendum campaign, and other matters.

Mr Fenton:

– Both statements are to be debated together.

Mr TUDOR:

– Every honorable member except the right honorable member for Swan is placed at a disadvantage in being called upon to proceed to-night with the debate on the Treasurer’s financial statement.

Mr Joseph Cook:

– You tried to interrupt it altogether by moving a motion of want of confidence.

Mr TUDOR:

– The object of that amendment was to place Liberal members behind the Government, as they oughtto be.

Mr Joseph Cook:

– And incidentally to knock the financial proposals sky-high.

The TEMPORARY CHAIRMAN.Order !

Mr TUDOR:

– I resent the fact of any honorable member being granted privileges which are not granted to other honorable members. If advance copies of the Treasurer’s statement are to be handed out, they should be given to all honorable members. If the Government intend to recognise only the Leader of the Liberal party, the sooner we are aware of that the better. The Government, if they intend to ignore one section of the

House, cannot expect the business to proceed as harmoniously as it otherwise would. The Treasurer has produced a statement, in which he has shown how he has altered the proposals of the honorable member for Capricornia, who, as Treasurer, represented the Government of which the honorable member for Grey was a follower at that time. It is known to most honorable members that an outline of the late Treasurer’s financial proposals, namely, that the Government should tax 50 per cent, of the war-time profits for the year ending the 30th June last, and 100 per cent, of such profits for the year ending 30th June, 1917, was agreed to by a meeting of the then Ministerial party.

Mr Joseph Cook:

– We have put a little spoke in that wheel.

Mr TUDOR:

Sir George Reid said on one occasion that Mr. Deakin, with his meagre following, was obliged to say “Yes. Mr. Watson “ to the then Leader of the Labour party, which was supporting the Deakin Ministry. To-day the Prime Minister says, “ Yes, Mr. Cook. What is it you desire? We will amend our legislation to suit your party. Do you desire that only 75 per cent, of war profits shall be taken? Very well, Mr. Cook, and if you wish any further reductions in our taxation proposals we will be pleased to oblige.”

Mr Poynton:

– The right honorable member for Swan does not agree with this taxtion at all..

Mr Pigott:

– The honorable member for Yarra and his supporters placed the Prime Minister in his present position.

Mr TUDOR:

– I am not sorry for that. But the present position is that the Government must ascertain from the Leader of the Opposition what their taxation proposals are to be. The war profits tax is to be reduced, and we are told that other exemptions are to be made. I was not in favour of some of the exemptions which had been promised by the late Treasurer, but I notice that additional exemptions are to be given, notably to fruit-growers. Those people are obtaining to-day from jam factories prices for their fruit which they would not be able to get if there had been no war. The War Office has ordered from Australia many /million pounds of jam - one order alone comprised 25,000,000 lbs. - and everybody knows that but for these enor mous jam orders fruit would not be fetching anything like the price which is being obtained to-day.

Mr Joseph Cook:

– The price of fruit in Sydney to-day is down to zero.

Mr TUDOR:

– The explanation is that, on account of the coal strike, jam factories were unable to work. Had there been no coal strike, the factories would have been in full operation, and fruit-growers would be getting better prices- for their product than if there had been no war in progress.

Mr Joseph Cook:

– The fact remains that the fruit-growers have not received these high prices.

Mr Bamford:

– You should not be so severe on the poor fruit-growers.

Mr TUDOR:

– If the Minister for the Navy would also interject, we should then have the opinion of three fruit-growers - the honorable member for Parramatta, as representative of oranges and lemons ; the honorable member for Herbert, as representative of Croydon cherries; and the Minister for the Navy, as representative of North Tasmanian apples.

Mr Poynton:

– Do you know that ‘I have been advised that the Government would get no revenue by taxing fruitgrowers’ war-time profits ?

Mr TUDOR:

– I am not averse from exempting these people; but it cannot be denied that but for the war there would not be the high prices ruling for fruit which the jam factories are paying today.

Mr Joseph Cook:

– How absurd that statement is in view of the fact that the summer crop in New South Wales has been spoilt. The growers will get practically nothing for it.

Mr TUDOR:

– We are told now that the exemption is because of the damage done by the frost and rain. Does the Treasurer propose to treat in the same generous way other industries which have been similarly affected by climatic conditions ?

Mr Poynton:

– Each industry will be dealt with on its merits.

Mr TUDOR:

– I see that the Treasurer has provided for the appointment of a Board of Referees.

Mr Fenton:

– Does that mean fresh appointments to the Public Service?

Mr TUDOR:

– I do not kp.ow whether they are to be permanent appointees or whether the Government intend to appoint gentlemen from outside the Service.

Mr Joseph Cook:

– I expect the Government will stuff the Board with their own political supporters, as the late Government did in connexion with the Price-fixing Board.

Mr Fenton:

– There were two members of the Liberal party - the honorable member for Moreton and the honorable member for Robertson - on the Price-fixing Board.

Mr Joseph Cook:

– I refer to the permanent appointees, who are receiving big salaries.

The TEMPORARY CHAIRMAN:

– Order ! I ask honorable members to cease these interruptions.

Mr TUDOR:

– If, as the right honorable member for Parramatta predicts, the Government intend to appoint their own political supporters to the Board, it will be interesting to know what the political complexion of the Board will be. This proposal to have a board of referees in connexion with the war profits taxation is entirely new. In his financial statement, the Treasurer says -

A similar provision will need to be made in the War Time Profits Bill.

Such as exists in the Income Tax Assessment Act.

It is quite apparent that no matter how careful one may be in his endeavour to guard against injustice, there will undoubtedly be many cases of hardship as the result of the passing of the Act, andtomeet that contingency it is proposed to establish a Board of Referees, to which, where the Commissioner is satisfied that hardships may be caused, cases shall be referred for decision. This portion of the financial statement deals with the mining industry. Will the board consist of men connected with the mining industry, or will it be composed of public servants ? I was dealing with that point when the honorable member for Parramatta, by way of interjection, stated that if the present Government were like the late Government, they would fill the positions with members of their own party, or, to use the elegant phrase of the honorable member for Wakefield, with “ men of their own kidney.”

Mr Joseph Cook:

– Yes, as they did in connexion with the price-fixing arrangement in the various States.

Mr TUDOR:

– The right honorable gentleman refers to the price-fixing Commissioners appointed in each State. If he desires to alter that arrangement, he has only to send a wireless through his

Whip, and it will be, “ Yes, Mr. Cook; it will be done as you desire.”

Mr Joseph Cook:

– The honorable member is suggesting that I should encourage the Government to break contracts.

Mr TUDOR:

– What contracts have been made that would be broken?

Mr Joseph Cook:

– One was the engagement to pay these men £600 a year for three years. I understand that two of them were ex-Labour members, and a third is a great friend of your side.

Mr TUDOR:

– My side? I should like to know what side the right honorable gentleman is on. He is now sitting on the cross benches, though I do not desire to give him notice to quit.

Mr Joseph Cook:

– I give the honorable member leave to put the honorable member for Henty out of his corner seat.

Mr TUDOR:

– I have no desire to do so. In accordance with the arrangement as to seats, I said that I would do my best to get honorable members of my party to sit on these cross benches, and the right honorable gentleman agreed to get his followers to shift from them; but when I came into the House I found the honorable member for Henty still occupying his old seat.

Mr Joseph Cook:

– There are still five or six of your party on our benches.

Mr TUDOR:

– That is because we have . no room for them on the cross benches.

The TEMPORARY CHAIRMAN.Order !

Mr TUDOR:

– We should learn something from the Government as to the type of men to be appointed as referees, because the selection of industries to be exempted will have a most important effect upon the whole of our taxation proposals. The war time profits tax, as originally proposed, may have affected many Australian industries and interests adversely, particularly those companies drawing all their income from abroad. For example, there are many tin-dredging companies operating in the East that have their head-quarters in Australia. I read in the press the other day that, on account of the foreshadowing of this taxation, one of these companies had already made arrangements to transfer its head-quarters from Sydney to Penang, or some other place in the East, in order to escape the tax. We may be able to prevent Australian mining companies carrying on operations in Australia from transferring their head-quarters to a spot outside the Commonwealth in order to escape taxation, but I cannot imagine that we can have any opportunity by means of a war time profits tax of dealing with companies which, though they may have Australian money in them - which money we get at through the income taxation - draw their income from outside Australia, and choose to transfer their head-quarters to some spot outside. There are half-a-dozen or more tin and gold-dredging companies operating in the Philippines and elsewhere with their headquarters in Australia, and we should be careful in our financial proposals to avoid doing anything to cause them to transfer their head-quarters from here to elsewhere, because they have been the means of finding employment for many Australians, not only in the actual dredging operations, but also in the manufacture of the dredges ana other equipment, which has been secured here. Mining and dredging companies occupy a unique position. As the Treasurer has pointed out in his financial statement, every year they operate their assets decline.

Mr Mathews:

– Gold has not enhanced in value owing to the war.

Mr TUDOR:

– Other metals have not enhanced in price. I commend the Treasurer for having placed in his financial statement a table showing the average wholesale price of certain manufactured metals used in building, but it would have been well if he had added another table showing the average price of the raw metals, such as tin, lead, copper, and zinc. We would have been in a far better position to deal with this matter. If copper has increased 40 per cent. owing to the war, we are entitled to tax copperproducing companies proportionately, and what applies to copper applies to every other metal whose price has been enhanced because of the war. I understand that the original War Time Profits Bill proposed to exempt certain industries. I am not sure whether the pastoral industry was exempted.

Mr Poynton:

– No.

Mr TUDOR:

– Wool has increased in average price from 9¾d. in 1913 to 1s. 2 ll-16d. in 1916.

Mr Pigott:

– What about the decrease in the number of sheep?

Mr TUDOR:

– That fact has not affected the price of wool. The war alone has fixed the price of wool. In normal times, the average consumption of wool per male inhabitant in the United Kingdom is about one-third of what it is today.

Mr Pigott:

– In 1902, when there was no war, the price of wool was just as high.

Mr TUDOR:

– Wool does not increase in value because of any drought. The war has been the greatest factor in the increase in the price of wool to-day. The Argus recently pointed out that the wool-owners had been receiving from 90 to 100 per cent. more for their wool than they obtained for it in the pre-war period.

Mr Poynton:

– I think that the prices of copper will show a like result.

Mr TUDOR:

– Perhaps so.

Mr Pigott:

– Why did the price of wool go up in 1902 ?

Mr TUDOR:

– I am dealing with modern and not with ancient history. The honorable member will have an opportunity later on to discuss that phase of the subject. The prices of wool, wheat, and meat have gone up, as well as the price of butter.

Mr Poynton:

– I think the present-day price of butter, compared with the prices ruling in 1914, shows a reduction.

Mr TUDOR:

– No; the price of butter in December, 1916, is 4d. per lb. higher than that ruling in December, 1914, and 4d. per lb., if not 5d. per lb., more than was paid in December, 1913. The honorable member for Richmond will bear me out in saying that the wholesale price of1s. 4d. per lb. in Australia is about 4d. per lb. in excess of what was the average December price for at least five or six years preceding the war.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Yes; but it has not nearly made up the losses of last year.

Mr TUDOR:

– I am not suggesting that the losses of last year have been made good. The butter industry is not exempt from the operations of the Board of Referees. I should like to know whois to be exempt from the war profits taxation.

Mr Gregory:

– The lawyer.

Mr TUDOR:

– Yes, the Collins-street farmer - the man who farms the farmers, and who organizes farmers’ unions.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The honorable member will not have to pay any war profits taxation on his Ministerial salary.

Mr TUDOR:

– Why?

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Because it comes under the heading of. professional earnings.

Mr Joseph Cook:

– And because there has been no* increase.

Mr TUDOR:

– There has certainly been none for the last two or three months, but as to. that I have no complaint to make. The point that I wish to emphasize is that all these people, on account of the war, are receiving increased prices. The ship-owner has doubled or trebled his freights because of the war. It cannot be said that that increase is due to the submarine menace. In making my estimate I have allowed for the insurance rates. The insurance paid to-day in respect of war risks is probably about 5 per cent., whereas prior to the war it may not have been J per cent. That 5 per cent., however, is nothing compared with the enormous profits that ship-owners are reaping to-day. My complaint is that when any body of workmen make a demand which will even up conditions, having regard to the increase in the cost of living, they are told that they are holding a pistol at the head of the community. I object to that being said of the worker? when it is not said of the squatter, who is getting 100 per cent, more for his wool, or of the butter producer, the meat producer, and others, who are all reaping enhanced prices. They are entitled to those increased prices if they can secure them, and at the same time the working man has a right to his increased wage if he can obtain it. ‘I should have been glad if an opportunity had been given us to digest this financial statement before being called upon to discuss it. As it is, it has been sprung upon us to-day. Apart from the forecast which appeared in the Age about a week ago, no honorable member of our party knew what the proposals would be. The Age announced that the war profits taxation would be decreased from 100 per cent, to 75 per cent., and that the payment of the wealth tax would be spread over five years instead of three years. The Age made a very good guess.

Mr Poynton:

– It presumably went on the policy of “ splitting the difference,” just as the Wages Boards do.

Mr TUDOR:

– Either the Treasurer followed the Age policy, or the Age happened to guess correctly what he intended to do. We are told now that, instead of taxing war profits this year to the extent of 100 per cent., the levy is to be reduced to 75 per cent.

Mr Gregory:

– And the Treasurer gave good reasons for the reduction.

Mr TUDOR:

– He says that, if 100 per cent, were taken, there would be no incentive to any man to make large profits. I am reminded of the fact that a gentleman in a large way of business told me the other day that, in view of this taxation, the making of large profits was of no advantage to him - that he would not increase his business, as the late Government proposed to take the whole of his war profits. He was setting out to play golf when I met him, and I could not help thinking that the adoption of such an attitude by him would give his competitors a better chance to make a living. It is the big businesses that are making the large profits. I do not desire to mention the names of any large firms in Melbourne’ - such, for instance, as a firm which has sixty or seventy grocery stores, or the owner of huge stores who conducts, in association with them, large manufactories, and probably employs 2,000 or 3,000 hands. What applies to Melbourne in that regard would no doubt apply to other State capitals. If exorbitant charges are imposed on the people, we have a right to take cognisance of those charges, and to take as much as we can of the additional profits, in order to pay for the cost of the war. People in a large way of business have as much to> lose as have any other members of the community. I give way to no one in my desire that the Allies should be successful; but if they were unsuccessful, with the result that the enemy landed in Australia, these people would find out that they had as much to lose as any one in the community. Those who are building up huge profits should be taxed to the uttermost.

Mr Gregory:

– What about the small man who is also making profits; would the honorable member take all his excess profits by way of taxation ?

Mr TUDOR:

– No. There is an exemption of £200 in the case of the small man. These people are to be allowed to make 7 or 8 per cent, on their investments, and an exemption of £200 is allowed. While the big man is growing bigger, the small man is being crushed. That, apparently, is inevitable in our present state of civilization. The grocer who is able to carry on a number of shops can buy at a lower rate than his smaller competitors. In some cases the whole profits of a grocer in a big way of business have been gained by way of special discounts obtained from other companies, from whom they have been able to make large purchases. I am not prepared to say now what action I shall personally take when the proposal comes before us to reduce the war profits tax from 100 per cent, to 75 per cent. With regard to the levy on wealth for repatriation purposes, the only alteration proposed is that the payments shall extend over five instead of three years, so that this year the Government will take only one-fifth of the levy.

Mr Poynton:

– I may not take that amount, because the figures as to our requirements for this year are much less than one-fifth of the total levy. I may introduce a sliding scale.

Mr TUDOR:

– We shall have an opportunity to deal with the levy when the Bill is before us. I should have liked to have from the Government a statement as to their intentions with regard to the immediate future. A Supply Bill has been thrown on the table, and instead of discussing it, we are proceeding to debate the financial statement that has been submitted by the Treasurer. I should like to know when it is proposed to adjourn for the Christmas vacation. The Government apparently hope - I say “ hope “ advisedly - to secure three months’ Supply, but I give the Treasurer notice that we do not desire that he should obtain more than two months’ Supply. We have not been told when the general election is to take place. An extension of the life of the ‘Senate, so as to make the Senate elections concurrent with those of the House of Representatives, has been mooted for some time.

Mr Thomas:

– The honorable member is in favour of that.

Mr TUDOR:

– It is immaterial to me whether the term of .a senator is extended or not.

Mr Gregory:

– But the honorable member, as a member of the late Government, approved of the proposed extension.

Mr TUDOR:

– -As a matter of fact, 1 did not. We have already granted five months’ Supply under two Supply Bills, and to-day we are asked to vote another three months’ Supply.

Mr Burchell:

– When did we get last year’s Estimates?

Mr TUDOR:

– The situation is different to-day, since the term of office of certain honorable senators will expire at the end of June next unless the Constitution is amended. No proposal has been made in this House, except in the case of a Referendum Bill, which was unanimously agreed to, to extend the period of service in the Senate.

Mr Poynton:

– The honorable member must realize that it is necessary that we should pass a certain proportion of these taxation proposals before Christmas.

Mr TUDOR:

– Let me deal first of all with the life of the Senate. The proposal introduced into this House was to amend the Constitution, so as to make the term of senators in one class three years and two months, and in the other class six years and four months, so that members of the House of Representatives should be able to serve their full time - a condition of affairs that has never existed.

Mr Wise:

– Yes- in 1910.

Mr TUDOR:

– At any rate, we should know the intentions of the Government in this matter before Supply is granted for even a month. Is it proposed to introduce a Bill to extend for three or four months the senators’ term of office, so as to make it conterminous with our own, ending it in September, the date on which we were elected, or the 8th October, the date on which we were sworn in ?

Sir William Irvine:

– Does the honorable member wish for the extension ?

Mr TUDOR:

– Will the honorable member put his question on the noticepaper ? The honorable member for Wentworth to-day asked me, a private member, a question on notice, and thus initiated an admirable practice, which may be followed in the future with great advantage. I see endless possibilities in it.

Mr Wise:

– The honorable member’s answer was as. good as a Ministerial reply. He did not touch the point of the question.

Mr TUDOR:

– I said that the amendment about which I was asked was prepared in the same way as all other noconfidence motions that have been moved by Leaders of the Labour party. There are on the front bench half-a-dozen exmembers of Caucus, who know how these motions were prepared.

Mr Thomas:

– I remember the time when we were all in favour of extending the Senate’s term.

Mr TUDOR:

– I think that I have always been opposed to it. Does the Government propose to introduce a Bill, ot is it intended to ask the British Government to alter our Constitution without this Parliament having a “say” in the matter?

If Supply is granted for three months, it is not likely that we shall be called together again before March. I am not prepared to vote for more than two months’ Supply.

Mr Poynton:

– That would not give the representatives of Western Australia an opportunity to return to their homes.

Mr TUDOR:

– Yes, it would. When the Tariff was under discussion in the first session, we resumed our sittings early in February, I think, after a vacation of less than two months. I understand from the electoral officials that, to enable honorable senators to be sworn in on 1st July, an election must take place not later than May, so that it is time that we heard from the Government on the subject.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Why anticipate any alteration of the law?

Mr TUDOR:

– In 1912 we finished the session before the end of December, passing the Estimates, and there was no sitting from that time until May, 1913, when the election was held. It has been considered that two months are needed to enable honorable members generally, and party leaders, to travel throughout the States, to place their views before the electors.

Sitting suspended from 6.80 to 7.£5 p.m.

Mr TUDOR:

– I have urged the inadvisability of granting any Supply until we have a statement from the Government as to their intentions regarding next general election. I am well aware that these are abnormal times, and that in other countries within the Empire the life of Parliaments have been extended. It must not be forgotten, however, that we have a written Constitution, and that it is impossible to extend the life of Parliament without an amendment of that Constitution. Before any amendment of this kind can be made, the question must be submitted to the people; and we cannot contemplate any amendment by means of the Imperial Parliament without some reference to the electors. If this Parliament, or any section of it, refused to pass a Bill of the kind suggested, we should be faced with an election for, at least, one House at the latter end of May next year.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– What has the superparliament down the street got to say about it?

Mr TUDOR:

– I suggest that the honorable member should go down the street and find out.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The honorable member will get his instructions directly.

Mr TUDOR:

– The honorable member for Maranoa is a delegate to the Labour Conference, and I, myself, was privileged to be present to-day; and I can assure the honorable member for Richmond that up to the present no advice to me on the subject has come. By the way, I think it might be advisable to change the name of the honorable -member’s constituency, because, as it is, he is very apt to be confounded with me in the public mind.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– What about the superparliament ?

Mr TUDOR:

– Up to the present, the super-parliament has not said anything on this particular matter. At the present time, my only anxiety is to know the intentions of the Government in regard to the next general election, and ‘I shall be glad to hear something from- the Prime Minister, who, I see, is now present. In the statement we had this afternoon, the Treasurer points to a decrease in the expenditure out of revenue on Home Affairs, military and naval matters, amounting in round figures to £760,000; and I should like to know whether that means that works have been cut down to that extent. This, of course, is a time when we are all anxious to economize; but when our soldiers come back they will not all be able to resume their former trades and avocations, and this reduction on public works for the remaining six or seven months of this year is a serious matter. I cannot read anything into the statement except that there will be this much less expenditure than that proposed by the ex-Treasurer. I should like to know in what directions the cutting-down is to be -done? Is it intended to curtail on the East-West railway, or on the work at Canberra ? I am sure we should be obliged if the Treasurer would supply us with a schedule of the works that it is proposed to proceed with, and, of course, those with which it is proposed not to proceed. There is a feeling abroad that advantage has been taken of the coal strike to shut down factories long enough to throw men out of employment, so that they would be compelled to enlist. The statement that coal will not be available until the end of January has caused many people to say that this is due to a desire to put a kind of compulsion on men to which they ought not to be subjected.

Mr Gregory:

– Some people say that that is why the miners went on strike - to enforce enlistments.

Mr TUDOR:

– This is the first time I have heard of that reason.

Mr Thomas:

– This is the first time I have heard of the reason mentioned by the honorable member for Yarra.

Mr Burchell:

– Does the honorable member for Yarra agree with the reason he has mentioned ?

Mr TUDOR:

– No, I do not; and I have already said I am pleased to hear the Minister for the Navy say that it is the intention of the Government to so facilitate matters that the factories, in the majority of instances, can be started on Monday next; indeed, I hope that all the industries may be started on that date. However that may be, if there is to be the decrease in public works indicated by the Treasurer’s figures, we have a right to know in what directions the expenditure is to be cut. The Treasurer talks of economy, but the printed statement he read to-day is sent out in an expensive cover, although we all know there is a shortage of paper all over the world at the present time.

Mr Livingston:

– That is a miserable statement from a miserable mind.

Mr TUDOR:

– Thank you. When the ex-Treasurer’s statement was before the House, we were told of a sinking fund that would wipe out the debt in, I think, twenty-five years; whereas now we have suggested a sinking fund of 1 per cent. which shall have that effect in thirtynine years. Where is the sinking fund to come from at the present time? I take it that the only way in which an individual or a Government can pay off a debt is by having a larger revenue than expenditure; but, apparently, we are to provide a sinking fund by borrowing more money.

Mr W Elliot Johnson:

– It is not to be provided in war time.

Mr TUDOR:

– I confess that we are somewhat at a disadvantage, so far as this financial statement is concerned. The right honorable member for Swan, it is true, has had a copy of this statement for a week; whereas we members did not receive a copy until this afternoon. Further, this is the first financial statement, in the history of this Commonwealth Parliament, on which an adjournment has not been granted., I know it will be urged that there is a shortage of time.

Mr Poynton:

– That is the only reason.

Mr TUDOR:

– But copies of the statement might have been distributed last week. I saw copies about the chamber, and asked the Treasurer’s private secretary about them; but, as I was told they were not available, I, of course, did not take one.

Mr Poynton:

– It was the honorable member who prevented me from making my statement earlier.

Mr TUDOR:

– And I should do so again, under the circumstances. The Prime Minister refused to recognise my amendment as a vote of want of confidence ; and if I am so treated as a private member, I shall use the forms of the House in any way I feel to be perfectly legitimate. We have had a statement from the Minister that the Chief Electoral Officer, Mr. Oldham, did issue instructions anticipating the regulations; and every member of the Liberal party is aware of the fact, though the honorable member for Lang was conveniently absent, knowing that something had been perpetrated that could not be defended. Honorable members of the Liberal party will find it difficult to defend their position on the hustings.

The CHAIRMAN:

– The honorable member is not in order in discussing a matter that has already been decided by the House.

Mr TUDOR:

– Are we not discussing the financial statement - are we not in Committee of Supply?

The CHAIRMAN:

– We are discussing the financial statement, but the honorable member proposes to discuss something that has already been decided by this House.

Mr TUDOR:

– At any rate, when we are discussing the Supply Bill, and the vote for the electoral branch is before us, I shallhave an opportunity to say what I desire.

Mr W Elliot Johnson:

– The honorable member is not in order in discussing a vote of the House.

Mr TUDOR:

– That may be; but I shall be in order on the Supply Bill when I discuss the action of an official whose salary is under review.

Mr MASSY-GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– As Minister for Trade and Customs, you often issued regulations in advance.

Mr Poynton:

– If you had followed closely the remarks of the right honorable member, you would have noticed that most of his criticism was based on the statement of the ex-Treasurer.

Mr TUDOR:

– I would not be surprised if that were so. The Liberals live on the Government, and the Government live on the Liberals. Like Siamese twins, united they stand, divided they fall. While the Liberal party supports the Government, the Ministry are absolutely safe. But, as I told the Treasurer earlier, I do not think one penny of Supply should be granted until we have a statement from the Government as to what they propose to do in regard to the elections. Even when the House has received that information, I shall not be prepared to grant Supply for more than two months. That would enable the Government to carry on until the middle of February, when Parliament would re-assemble, and honorable members would have an opportunity of dealing with the various taxation proposals in a proper way, -instead of rushing through them, as the Treasurer asks us to do. Bills to impose this taxation will be brought down, and the Standing Orders suspended so that the measures may be rushed through with a minimum of delay. I again tell the Treasurer that time should not be made an excuse for hurrying such legislation through the House, without allowing opportunity for due consideration by honorable members. £4, 000, 000; an increase of 25 per cent, on that amount would represent, roughly, another £1,000,000.

Mr Poynton:

– Tes, that is the amount.

Mr CHARLTON:

– My complaint is that those figures are not shown in this statement at all.

Sir John Forrest:

– The amount is stated in the original financial statement by the honorable member for Capricornia.

Mr CHARLTON:

– But in this financial statement we should be able to discover the exact financial position.

Sir John Forrest:

– Read the two statements together.

Mr CHARLTON:

– That advice is all very well, coming from an honorable member who has had this statement in his possession for a week or two, but what opportunity have other honorable members had, who have seen this statement to-day for the first time, to study it and compare it with the previous statement? If the right honorable member argues in that way, there ought to have been an adjournment of this debate.

Mr Poynton:

– In my statement I make it clear that the only alteration is in regard to exemptions.

Mr CHARLTON:

– Just so, and my complaint is that an honorable member has to study the previous statement in order to ascertain what the real proposal is. The previous proposition ought to have been included in this statement.

Mr Webster:

– The Treasurer is .trying to economize.

Mr CHARLTON:

– In this instance he , has economized to the extent of a couple of lines of print. We are principally discussing the proposed new taxation, which is mainly for lie purpose of paying the interest on our abnormal war expenditure. I contend that the total indebtedness of the Commonwealth and the interest thereon should be stated, together with the aggregate new taxation, in order that honorable members might see at a glance whether the proposed additional impost will meet the interest bill. It is not fair that honorable members should not know the exact financial position. The previous Treasurer estimated to receive £2,000,000 from the levy on war profits for the year, and the present Treasurer estimates the receipts to be short of that in the second year by £1,100,000, making his receipts from this source £900,000. From the tax on entertainments he anticipates £700,000, as compared with his predecessor’s estimate of £2,000,000. From income tax, the previous Treasurer estimated to receive £4,000,000 plus 25 per cent. The present Treasurer proposes an increase of 25 per cent., which may be estimated to produce another £1,000,000. If the Treasurer obtains a further £150,000 from that source by wiping out exemptions, the total receipts from new taxation will be £6,750,000. But what is the debt of the Commonwealth? Again we have to refer back to a statement of the former Treasurer, and we find that at the 30th June, 1916, the public debt of the Commonwealth was £101,252,949, whilst at the end of this financial year it was estimated to reach £175,597,000. If that is to be our indebtedness, it is fair that this Parliament should raise sufficient money by additional taxation to at least pay the interest on that amount. Are we doing that? The interest on that indebtedness, at 4£ per cent., will be £7,900,000, and the total receipts from new taxation are estimated to be only £6,750,000, leaving a deficit of £1,150,000. It is just as essential that the war should be regarded from the financial point of view as from the point of view of man-power. We cannot prosecute the war to a successful finish unless we have the necessary money. We have to provide the money, and the Government have set before us proposals estimated to raise an amount of additional taxation considerably less than is required to pay the interest on our borrowing. Parliament should at least be able to show the public how it is proposed to pay interest on this large indebtedness. Even though the Treasurer estimates to receive £6,750,000, it is quite possible that his anticipations will not be realized. Although he is expecting £700,000 from the tax on amusements, he may not get it. In regard to war profits, in order to give an incentive to those who are making as much as possible out of their businesses, the Government propose to levy only 75 per cent, of the profits, instead of 100 per cent., as proposed by the previous Treasurer. It may be thought by many people that it is hardly worth while increasing their profits to any extent if they are to receive only 25 per cent, of the total. Profits may thus decrease, and if that happens, from what source are we to obtain the interest on all this money which we are obliged to borrow? I venture to say that we are not to get it under the proposals of the Treasurer. I am probably alone in this House in saying that there should be one tax only. I do not consider that the method of taxing different things is in the interests of the great masses of the people. I am aware that the masses of the people would say that the proper thing is to tax wealth, but I claim that all taxation of wealth falls back on the masses. It is certainly well known that if wealth is taxed to any great extent - that is wealth as we know it in Australia - it means taxation on industries, and that must be passed on to the workers, and the workers have to pay it.

Mr Palmer:

– Does not that apply in every case ?

Mr CHARLTON:

– Yes; I have argued in that way for years past. It is misleading the people to say, “ We are putting this tax on the rich.” The poorer people pay all the taxation that is imposed on the rich. In a time of national stress, when it is necessary to raise money in order to prosecute a war, the only legitimate way in which we can prevent the passing on of the taxation to the great masses of the people is to have nothing but an income tax, and to say to those people who have incomes over a certain amount, “In a time of national stress, when men are going to the front to fight in the interests of the country, and in order to protect the property of the country, you should hand over your income to the Treasury for the purpose of prosecuting the war.” If we take all incomes over a given amount, the taxation cannot be passed on to the poor man. My suggestion is that all incomes over an amount sufficient for the domestic life of the individual should be made available to the Commonwealth Treasury.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Wealthy people for the most part would pay a wealth tax out of income and not out of capitalized wealth.

Mr CHARLTON:

– They can pay it in whichever way they like, but that would be an infinitesimal contribution compared with giving over a definite portion of their incomes for the purpose of carrying on the war. We cannot advocate sending away every man we can possibly secure, and at the same time heap up a very large debt, and tell these men when they come back that, though they went away to risk their lives for the country, while we remained at home and imposed certain taxation, which even failed to pay interest and sinking fund on that debt, they must take up the debt incurred to pay for their services at the front, and continue paying interest on itas long as they remain in Australia. The time has arrived when we should face the position. It is just as necessary to get money from the people who possess it as it is to get men to go to the front. But we are not facing the issue. Every man with an income over an amount sufficient to keep his domestic arrangements going should place the surplus into the Treasury during the continuance of the war.

Mr Boyd:

– What does the honorable member regard as “enough”?

Mr CHARLTON:

– At a time like this, taking into consideration the differences in our daily occupations, all income over £400 a year should go into the Commonwealth Treasury. It would provide nearly sufficient to carry the war right through. If we raise £4,000,000 from the income tax, the tax is less on the average than1s. in the £1. If we base our estimate on twenty times the amount derived from the income tax, we should derive £80,000,000 in the direction that I have suggested.

Mr Boyd:

– Then the Commonwealth would have the lot and the people would starve.

Mr CHARLTON:

– Whoever would starve on an income of £400 a year in a time of war would deserve to starve.

Mr Boyd:

– Then let us start by cutting down our salaries by £200 a year.

Mr CHARLTON:

– Exactly ; everyone should pay. I have considered this matter for a long time, and the more I have looked into it the more it has come home to me that if we wish to avoid heaping up a huge national debt we should do something on the lines that I have suggested.

Mr Sampson:

– Does the honorable member say that the present generation should pay the whole cost of the war ?

Mr CHARLTON:

– In a time of national stress, when we take the platform and say to every fit man that it is his duty to go to the front, we have also a duty to see that the loan indebtedness thai is being heaped up for the purpose of prosecuting the war should not be handed on to him when he comes back.

One can be patriotic in other ways than by going to the front, and it will be patriotism to find the money for the prosecution of the war. Something will have to be done to find the necessary money. If the war should continue for a couple of years the Allies will find great difficulty in financing it. There are very few honorable members who wish to see any compromise in regard to the war. We all wish to thrash the enemy at least, and to make reasonable terms so fax as the Allies are concerned, but we are not making provision for doing so. It is my duty as a public man to point out how necessary it is to make this provision. In my opinion the taxation proposals do not go far enough. We should have one tax only, and that an income tax. A wealth tax will inflict many -hardships. There are many widows with two or three houses valued at, say, £1,500 who are receiving from them just sufficient income to keep themselves and their families. To take awealth tax from them is to take from them something which they do not possess. The Treasurer has endeavoured to meet their case by providing that they can defer the payment of the levy, and pay interest on the money; but that is really in the nature of a mortgage on their property. Many of them have had a hard fight in the past to get clear of mortgages, and they will not be anxious to renew them in this way. I see clearly that the wealth tax will have an effect quite different from what was expected of it. Therefore I Urge that there should be one tax only.

Mr Patten:

– What provision would the honorable member make to meet the case of those who pay State income tax ?

Mr CHARLTON:

– When we are at war the States should endeavour to live Without taxing incomes. Income taxation should be a field for the Commonwealth during the war. I do not hold with so much State taxation. Immediately the war broke out, the State of New South Wales, without justification, increased its income taxation.

The proposed recruiting scheme is a step in the right direction. Something should be done to popularize recruiting as much as possible. As one who opposed conscription, believing that the voluntary system should be continued, I consider that we should endeavour to do the best we can with it, and I am prepared to use my best efforts towards making a success of any recruiting scheme. I have received a letter from the Director of Recruiting, in which the following passage occurred : -

The Federal member will invite the cooperation of the State members within his division, of the local governing bodies and their organizations. The Military Registrar appointed under the recent Proclamation in each Federal division will be the District Recruiting Officer. He will be supplied with such clerical assistance as may be necessary, and, under the direction of the State Committee, will make all arrangements for meetings, recruiting arrangements, medical examinations, and the forwarding of recruits.

I want to know what the district committees will, have to do. Power is to be given to recruiting officers to employ all labour, conduct all meetings, and’ appoint speakers. All that the Federal member has to do is to call the representative bodies in his electorate together, lay the scheme before them, and set the organization in motion. The Director of Recruiting will regulate all meetings. This is a weak spot in the scheme, and if it is intended to continue on those lines there are very few honorable members but will soon be coming into conflict with the Director of Recruiting, however much they are inclined to render assistance. The last recruiting campaign failed largely because men were appointed to address meetings who were not suitable. They were offensive, and insulted the people. By allowing the military authorities to send along speakers there will be a repetition of this. If I take any part in the scheme I shall make it clear that each man who goes out shall be courteous to all, and shall not be offensive, but shall state the position fairly. If he does so, he will be doing his duty. In .New South Wales and in Victoria I have heard men engaged in recruiting work making statements of which they should have been ashamed. That method does not secure recruits, and it does not help the cause.

Mr PARKER MOLONEY:
INDI, VICTORIA · ALP

– It kills it.

Mr CHARLTON:

– Yes; because people resent such language. Whoever is at the head of the scheme will need to be careful in the selection of those who are to address meetings. Men should be chosen who can put the position fairly without giving offence to their hearers, and men who are appointed as housetohouse canvassers should be men specially adapted to the work. I believe we can get sufficient suitable men from the returned soldiers, but let the selection be wise. If any one and every one is put on the recruiting business the scheme will be doomed to failure. Once we take in the mayors, and shire presidents, and leading men in connexion with the other movements in an electorate we should give them some power and permit them to have some control in their own electorates. We should not permit any one either in Sydney or Melbourne to have power over the local committees. Under the proposed scheme there is an appeal by the Military Registrar direct to the State Council, and if the State Council agrees to certain proposals, the local body is not considered, and has no say in the matter. How long will such a scheme last? About a fortnight. The Director of Recruiting will do well to take the matter thoroughly into consideration. The Defence Department is to blame to a very large extent for the falling off of recruiting. They went to Kurri Kurri and Weston, in the Newcastle district, for 128 men for reinforcements for the Miners’ Battalion, and they immediately got the full number required. The men were taken to camp at Broadmeadow, in the Newcastle district, and then they had their final leave. After this they were sent to Seymour in the middle of winter, and when they arrived there was no meal provided for them. The weather was extremely cold, and rain fell for the first few weeks.

Their tents were like sieves, the water running through them, and their food was badly cooked. These men while in the Newcastle Camp had never a complaint to make. They were perfectly satisfied, but under these conditions they naturally began to complain. They wrote to their parents or friends, and, as the result of inquiries, it was found that their statements were correct. The Department had to send them 100 new tents. It was admitted also, that while the food was good, it was badly cooked, and that it was true that when they arrived in camp there was no dinner for them. Experiences such as these have done much to kill recruiting in my electorate.’ Many men say, “If this is the sort of treatment one gets on enlisting we will not volunteer.” Then, again, these men were brought over to Melbourne ostensibly to undergo a short course of special instruction, the understanding being that they were to leave for the front at an early date. They were granted final leave be- fore they left Newcastle, but on arrival here they were kept at Seymour for fifteen or sixteen weeks, hundreds of miles away from their friends. Some of their friends came over here to see them. They expressed a desire to be allowed to go over to Newcastle to see those who were near and dear to them, and after battling’ for some weeks we received from the Department an intimation that as these men had been granted final leave while in Newcastle, there was no power under the regulations to grant a second final leave, but that it had been decided that they should be permitted to go over to Newcastle for a week-end to see their wives and families. I thought that was a fair thing, and I told the men so. But what happened? The Department actually stopped their pay for the ten days that they spent in visiting their friends,, and made them pay their own fares to and from New South Wales. Is it any wonder that men in my district should be opposed to recruiting? After these men had embarked, I received a letter on the 24th of last month from the wives of four of their number stating that although they had been away for a monthno pay had been received by their women folk, who were waiting for the money with which to pay their household bills. These complaints are circulated all over my district. How can one expect recruits to be coming forward in such circumstances? I have been stating actual facts. I received a letter a fortnight ago from four me» who volunteered in New South Wales to join an aviation corps. They were told that they would have to come to Victoria. They willingly volunteered, came’ to Victoria, and, they tell me, were asked by the officer here from what State they came. An examination was then held, with the result that not one man from New South Wales was successful. These men were t then transferred to the infantry, although they had enlisted for the purpose of joining the aviation corps. They were transferred to the infantry in victoria, although they could have joined an infantry regiment in their own State. Upon receiving their complaint, I made representations to the. authorities, with the result that they were transferred to another camp, and I was informed yesterday that they were to besent back to New South Wales. Stories, of these experiences are circulated all over New South Wales, with the result that-. many will not enlist, because they believe that they will not receive fair treatment. Incidents of this kind do more to injure recruiting than anything of which I know. If we are to have a recruiting campaign let us do the best that we can for these men. They are certainly worthy of the very best we can do for them, and should receive every consideration. I do not know who is responsible for these happenings. I do know that the Minister is not at fault. He is not conversant with all that is going on.

Mr Mahony:

– He ought to be.

Mr CHARLTON:

– No man at the head of such a Department could be conversant with everything that is going on in connexion with it. I contend that action should be taken to prevent the recurrence of these things. Men taken from New South Wales, where the climate is warmer than in the south, and put into camp near Melbourne, where the weather is constantly changing, are more liable to sickness than they would be if they remained in their own State. Why cannot they be allowed to remain in their own State, where they are thoroughly acclimatized ?

Mr Sampson:

– Is the percentage of these transfers very large ?

Mr CHARLTON:

– A good number have been brought here from New South Wales.

Mr Finlayson:

– And also from Queensland.

Mr CHARLTON:

– For some reason or other they are centralized in Victoria by the military authorities.

Mr Mahony:

– To make up the shortage in Victoria.

Mr CHARLTON:

– There is only one other matter to which I desire to refer. It relates to the Postal Department. Notwithstanding that the cost of living has considerably increased during the last few years, no provision has been made to meet the altered conditions of those who keep allowance post-offices. There is a rule under which the salaries of those in charge of allowance post-offices are regulated by the revenue derived from those offices. There are many cases of hardship in my electorate; I shall cite only one. It is that of a lady who has been keeping an allowance office for years, and has been in receipt of £23 per annum. She has to be at the beck and call of the public all day long. She must always be about the office to attend to the duties attaching to it. But as the revenue has fallen off slightly, the Department are reducing her allowance from £23 to something like £21 10s. per annum. The lady has refused to take this reduced amount, and the Postmaster-General states in a letter I have received from him that an effort is being made to get some one else to take up the work. I hold that it is. unfair to constantly cut down the salaries of these low-paid officers. If such reductions are necessary, then we are not justified in introducing penny postage.

Mr Webster:

– Two years ago the Government provided £30,000 to increase the scale for allowance officers.

Mr CHARLTON:

– That may be; but the fact remains that the pay of these people is being reduced.

Mr Webster:

– Where the revenue is falling.

Mr CHARLTON:

– In this case, the revenue apparently has fallen slightly, and the pay has been reduced by 30s. per annum. The Department ignores the fact that the mail porter who delivers letters in the district also collects letters from House to house in order to save the residents the trouble of walking to the post-office. Itdoes not credit the office with the revenue received in respect of those letters.

Mr Boyd:

– If it did, then it would not have to pay this man to collect them.

Mr CHARLTON:

– He has to deliver the mail, and he takes these letters for the post in order to convenience the people.

Mr Webster:

– -Would the honorable member suggest that we debar the mail porters from collecting letters on the road ?

Mr CHARLTON:

– No; but the Department should credit the office with the revenue in respect of letters so collected.

Mr Webster:

– One cannot get any account of them.

Mr CHARLTON:

– While that is so, the Minister could surely make some allowance for letters so collected, instead of cutting down the pay of these officers. Some porters travel many miles a day.

Mr Boyd:

– These allowances cannot be considered as salaries.

Mr CHARLTON:

– But we must take into consideration the fact that those in charge of allowance post-offices in country districts must be in attendance all day long.

Mr Pigott:

– They have to attend to the telephone calls, amongst other things.

Mr CHARLTON:

– That is so. They cannot close their offices, and they have to spend most of their time in them. In return for this, they get a miserable pittance, which is cut down from time to time. I urge the Postmaster-General to give consideration to the question of these allowances, and to try to devise a scheme whereby the pay of these officers, even if it cannot be increased, will not, at all events, be reduced.

Mr FENTON:
Maribyrnong

.- Referring to the closing remarks made by the honorable member for Hunter, I would remind the Committee that the Postmaster-General has been exceptionally busy in recent times, and has been laying claim through the newspapers to having made immense savings in his Department. It is an easy task for any PostmasterGeneral to save money by curtailing postal facilities. The fact is that the revenue has increased during his term of office, because the chargeshave been raised, and that he effects savings either because he is cutting down poorly-paid officers or is lopping off long-enjoyed services. That is particularly so in respect of the back-block postal services. The honorable gentleman, as the representative of a country electorate, should be more generous in his treatment of those who are pioneering in Australia.

Mr Webster:

– What you say is not true.

Mr FENTON:

– I ask that that remark be withdrawn.

Mr Webster:

– I withdraw it, and say that the statement made by the honorable member is “ teetotally “ inaccurate.

Mr FENTON:

– That reply is quite on a par with the wonderful “ cramograms “ that the honorable member despatched during the referendum campaign, I represent the outskirts of a goodly part of Melbourne, and I find that the telephone charges have gone up, while postal facilities have been cut down to the bone. I repeat that any Postmaster-General can save money by lopping off postal facilities in various parts of the country. In whatever other qualities he might be lacking, I always thought the Postmaster-General would not be wanting in those qualities which tend to increase the telephonic and postal facilities enjoyed by people in the back-blocks. Before the honorable member took office, I often heard him speak in this House of the fine work of our pioneers, and I remind him now of some of the disabilities which country people are suffering at his hands.

Mr Boyd:

– What method would the honorable member adopt?

Mr FENTON:

– I am not going to unfold a programme for the benefit of the honorable member. I shall have something to say concerning him later on. The reply made by the Postmaster-General to the honorable member for Hunter was that, where the revenue of an allowance office falls, a reduction is made in thepay of the officer in charge of it. Does he apply that principle, or want of principle, to every other man or woman in the service?

Mr Webster:

– When the revenue rises, the salary of the allowance officer also rises.

Mr FENTON:

– We know that; but, during the honorable gentleman’s term of office, we have had all the time a falling off, and not a rising, of salaries.

Mr Webster:

– That is not correct.

Mr Boyd:

– Before the referendum the honorable member for Maribyrnong was constantly praising the PostmasterGeneral.

Mr FENTON:

– That is not so.

The right honorable member for Swan asked this afternoon how much longer the long-suffering public of Australia were to submit to the heavy burdens of taxation imposed upon them. He complained very bitterly about those burdens. There is one very fine avenue open for the cutting down of expenditure; but I do not think that the Parliaments of Australia will avail themselves of it unless the people take a hand in the matter. We have, all of us, to contribute to the taxation of the country, but I hear complaints from persons of all shades of political opinion to the effect that they have to pay double, treble, and sometimes quadruple taxation. In my judgment, the only remedy for that is - to use a word which to some has an ugly sound - Unification. We have too many Governments and too many Parliaments.

Mr Bamford:

– Hear, hear!

Mr FENTON:

– I am glad to hear the Minister support my remarks, and I hope that he will use his influence with the Cabinet, and with those who direct the affairs of his own State, for the alteration of this state of things. Some of us have advocatedUnification for a number of years. In my opinion, it alone will bring about the reduction of expenditure. In the interests of true economy we should get rid of the salaries of State Governors and Agents-General, and abolish many excrescences in the Constitutions of the States.

Mr Boyd:

– How would the honorable member do this ?

Mr Corser:

-Unification may suit Victoria, but it would not suit Queensland.

Mr FENTON:

– I think that Queensland would be prepared to accept a wellconsidered scheme of local government. I would create something in the nature of provincial Governments, elevating municipal government to some extent, and abolishing a number of municipalities.

Mr Hampson:

– And give one adult one vote.

Mr FENTON:

– The franchise should be the same as the Federal franchise. Every person over the age of twenty-one years should have the right to elect the representatives in the provincial councils. We are unable to carry out many reforms here, the sovereignty of the States being an obstacle.

Mr Boyd:

– How would the honorable member remove it?

Mr FENTON:

– I have said here, and on the public platform, even when a candidate for a seat in a State Parliament, that the Constitutions of the States and of the Commonwealth should be put into the melting pot. If that were done, I think that we might get a Parliament that was national in character, and could exercise national powers.

Mr Boyd:

– The difficulty is that the States are sovereign powers, but the Commonwealth is not.

Mr FENTON:

– True. The honorable member does not find himself altogether comfortable as a member of the National Parliament under those circumstances.

Mr Boyd:

– We are unable to alter things.

Mr FENTON:

– When the people realize how they are being fleeced, they will demand constitutional reforms, and all parties will have to listen to them.

Mr Sampson:

– Why not have economy under existing conditions?

Mr FENTON:

– I want Australia to have a Constitution like those of South Africa and Canada, where the National

Parliaments are supreme. Our Constitution, unfortunately, was copied from that of the United States, which was at the time over 100 years old. When Canada federated, it did not copy that Constitution. She saw its defects, and therefore made her National Parliament supreme. General Smuts, one of the brainiest men in the Botha Cabinet, has stated that South Africa has avoided the mistakes of the Australian Constitution by making her National Parliament supreme. We should try to make our National Parliament supreme, and to bring about reforms which will lead to the reduction of the heavy financial burdens of the country. Australia is at present the laughing-stock of other countries because of the number of Parliaments and Governors that she has to maintain. The taxpayers cannot get proper relief until the Constitutions of the States and of the Commonwealth have been thrown into the melting pot.

Mr Boyd:

– The result of that might be the abolition of this Parliament.

Mr FENTON:

– If, sixteen years ago, the people of Australia could have foreseen the present situation, the vote for Federation would not have been carried.

Mr Corser:

– Does the honorable member think that a vote for Unification would have been carried fifteen years ago ?

Mr FENTON:

– No.

Mr Corser:

– Nor would it be carried now.

Mr FENTON:

– Thousands of persons have realized the mistake that was made in slavishly copying the American constitution. They see that it has worked against the interests of the community. This Parliament can exercise only powers delegated to it by the States, and is therefore under an influence to which it should not be submitted. The right honorable member for Swan is a great Statesrighter, but I tell him that so long as we continue the present system we shall have large expenditure and heavy taxation.

Mr Corser:

– That is better than no representation.

Mr FENTON:

– There would be proper representation under the system that I suggest. I would give a larger measure of local government than is at present enjoyed. Does the honorable member support the Queensland Government in its action in preventing the export of stock from the State, or that of the

Government of New South Wales in preventing the exportation of wheat, the High Court ruling that the Commonwealth cannot interfere because to do so would be an interference with the sovereign rights of the States?

Mr Corser:

– The honorable member is discussing what is being done in war time. When the war is over we can deal with these matters.

Mr FENTON:

– I do not wish to wait until then. Australia is too far behind in regard to internal reforms, and in preparation for the time when the war will be over.

Mr Boyd:

– The first thing to be done is to win the war.

Mr FENTON:

– I agree with the honorable member, but there are many things to be done in Australia in preparation for the aftermath of the war. If they are not done, this country will be in a worse position than it is in now.

Mr Boyd:

– So far, it has done very well.

Mr FENTON:

– Certain industries have done well, but Australia is disorganized compared with other parts of the Empire.

Mr Boyd:

– Look at the attendances at picture shows and theatrical entertainments.

Mr FENTON:

– The condition of the country cannot be gauged entirely in that way. Certain persons would patronize amusements even though the heavens were falling.

I join with the honorable member for Hunter in saying that the financial statement might have been much more lucid. It would have been better if the Treasurer had given us tables comparing the effect of his proposals with those of the honorable member for Capricornia. He might also have given us other information. As for the proposal to exempt the gold-mining industry from the operation of the war profits tax, the Ministers would have found themselves without a supporter had any other proposal been made. Had the honorable member for Capricornia remained in the Treasury, he would have listened to the representations which would have been made to him from all quarters as to the advisableness of exempting gold-mining from war profits taxation. We are all glad that this is to be done. The right honorable member for Swan asked, “ Why not exempt all other forms of mining.” In reply I would point out that the prices of some metals have risen very high because of the war. According to to-day’s Argus, electrolytic copper is now quoted at £168 10s. a ton. In the pre-war days it was about one-third of that price.

Mr Webster:

– I have known it to be £40.

Mr FENTON:

– It was generally between £50 and £60 a ton, I believe.

Mr Burns:

– And has been up to £100 before the war.

Mr FENTON:

– I understand that the British Government has an arrangement with this Government, on its own behalf and on behalf of the French Government, for taking a proportion of the Australian output of copper at £100 a ton. This arrangement, of course, may have been varied, but the figure was £100 or thereabouts. Manufacturers and the Government, who are turning out munitions of war, use a considerable amount of copper, and it stands to reason that they must be paying more now for their raw material than they did when the price was between £50 and £60. The price of copper, we know, is practically fixed in America, which is a large producer of the commodity; but when the War Precautions Act is used, as it has been, against the interests of the people, why should it not be used in order to prevent the ‘ ‘ copper kings ‘ ‘ from fleecing the Government and the people?

Mr Hannan:

– The Government have not done so in the past, and are not likely to do so in the future.

Mr FENTON:

– I understand the honorable member to mean that the industry is controlled by those who are friends of the “ copper kings,” and that the Government will not be allowed to bring in any regulation that would have the effect of making prices reasonable.

Mr Corser:

– Is the honorable member aware that a number of copper mines were closed down on account of the low prices, and are only now at work again ?

Mr FENTON:

– I know that the price of copper is exorbitantly high - higher than ever known before - and those who have to manufacture munitions should not be fleeced, but should be protected by the Government. It might, perhaps, be permissible to allow the price to go to £70 or £80, but double that is too much. When the right honorable member for Swan suggests that ordinary mining propositions ought to be brought under the same rules as gold-mining, he talks in a manner which would indicate that he has not carefully considered the question. Only a few months ago the British Government were dealing with a, German firm which was robbing the British people of hundreds of thousands of pounds on this line alone.

The honorable member for Yarra touched on a very important question when he asked what the Government intended to do in regard to the ‘elections for the Senate in the coming year. There is no doubt that we ought to have a concrete proposal in this regard. The Sydney Sunday Times, in a piece of news published on Sunday, and dated from Melbourne, gives some information in which the honorable member for Parramatta, and those who support him, ought to be much interested. The piece of news is as follows -

Whatever the future may hold for the diminutive Ministerial party in the Federal Parliament and its diminutive Leader, no chances are to be taken. Even now arrangements are well in hand for the electioneering campaign, which before long will have to be started, and, in order to reduce the chances to a minimum, the arrangements include an understanding under which the present Ministerial party and the Liberal party will not come into conflict.

Most of the arrangements are in the hands of Mr. W. A. Watt, M.H.R., who throughout the referendum campaign was in close touch with the Prime Minister. Negotiations so far mean that where a member of the Ministerial -party is contesting a particular electorate, the Liberal party will not put up a candidate against him, and the same arrangements will apply to candidates of the Liberal party. . . . It would be almost impossible for Mr. Hughes to return from an election with a party sufficiently strong to enable him to do anything except on the present basis of support from the Liberal party, and he is not likely to go to the country suggesting that the people should support either his own or the Liberal party, in order that he might get in again.

Both he and the members of the Liberal party are showing their wisdom by getting their arrangements well in hand before the Labour party has a chance of splitting the alliance which seems to be working so well at present. Whether the present session of Parliament will continue beyond Christmas is not known. Even the Prime Minister does not know. Talking of such a possibility this morning, he said he would be very much obliged if any one could enlighten him on the point. “ If you ask Mr. Tudor and his party,” he added, “ perhaps you might get to know. Anyhow, I hope it’s going to end before the festive season.”

Mr Palmer:

– Who is the author of that rubbish?

Mr FENTON:

– I am quoting from a Ministerial paper, which is usually very well informed; and the report lends some colour to a speech of the honorable member for Henty during the campaign. Here I may say that the honorable member for Henty seems to be always in the counsels ofthe honorable member for Balaclava. I remember once, when these two gentlemen were members of the State Parliament of Victoria, meeting them at some country show, and the honorable member for Henty introduced the honorable member for Balaclava as the leader of “our party.” To this introduction, however, the honorable member for Balaclava demurred, and asked to be allowed to say that if he were a leader of a party, it was a party of’ two. However that may be, the honorable member for Henty, speaking at Mordialloc, said -

If by any accident the referendum was negatived, then a National Government would be formed, and the necessary men supplied under the War Precautions Act.

Mr Boyd:

– “Should be,” not “ would be.”

Mr FENTON:

– The newspaper says, “would be.”

Mr Boyd:

– I said “should be” - the newspaper is wrong.

Mr FENTON:

– Did the honorable member say that a National Government would be formed, and that the necessary men should be found under the War Precautions Act?

Mr Boyd:

– I said so then, and I say so now.

Mr FENTON:

– And you would go to the country on the question?

Mr Boyd:

– I would go to the country on it.

Mr FENTON:

– You would flout the will of the people, and bring in something that the people declined to sanction ? Would you do that ?

Mr Boyd:

– Yes.

Mr FENTON:

– Then the country wants leadership, and you ought to be the leader.

Mr Boyd:

– Now you are talking sense.

Mr FENTON:

– I can see that there are certain intentions on the part of the Liberals and the Hughesites, and that there is an understanding that they shall not oppose one another, though they will go to the country as two separate sections if they can.

Mr Joseph Cook:

– The honorable memberwas as near as possible - he came out of the Caucus room.

Mr FENTON:

– The honorable member for Parramatta is trying to divert honorable members from the question before us.

Mr Joseph Cook:

– Why did the honorable member go back to the Caucus room ?

Mr FENTON:

– The honorable member for Parramatta is always imagining that he is at a Methodist bazaar, and conducting a sort of Dutch auction.

Mr Joseph Cook:

– Why did you go back to the Caucus room after coming out with the Prime Minister? It would be very interesting to know.

Mr FENTON:

– They are going to the country as two parties, trying to make the people believe that they are two parties; but when the election is over we shall see an attempt at a Fusion Government. They know that to go to the country as a fusion would only mean their doom. No doubt, this information is leaking out a bit too soon; but what is given by the newspapers is very correct. I am only endeavouring to let Liberals and honorable members opposite know that we, as well as they, know a little bit.

Mr Joseph Cook:

– I am much obliged to the honorable member for giving me some information.

Mr FENTON:

– If the honorable member still professes to be the Leader of the Liberal party, he should bring to heel some of . those honorable members who are acting without his consent.

Mr Joseph Cook:

– But you did come out of the Caucus room, did you not?

Mr FENTON:

– I should like to address you, Mr. Chairman, only the honorable member for Parramatta makes so much noise and is drawing upon his imagination.

Mr Joseph Cook:

– I shall not ask any more awkward questions.

Mr FENTON:

– What you are saying is all moonshine.

The Sydney Daily Telegraph, of 21st August, published a long list showing the profits made by forty of the leading Australian companies during the years 1914, 1915, and 1916, and the list discloses that the various companies and institutions did magnificently for their shareholders. This financial column is supposed to be written by one of the best financial journalists in Australia, and we know that if anything is written in a financial column which is not strictly in accordance with fact, the paper concerned is laughed at by the commercial community. The list includes the following statements of profits for the year 1916 : -

Honorable members will see that all those concerns made very fine profits indeed. The results of the operations of the Colonial Sugar Refining Company are not included, although the profits of the company are known to have been high. Many other important companies are not included in the list. At the time this statement was published the companies mentioned had just held their annual meetings, and announced in their balancesheets the results of the year’s operations. In almost every case the profits for 1916 compare very favorably with those for 1914.

Mr Palmer:

– What is the value of these figures as to profits unless you state the amount of capital invested in the various concerns?

Mr FENTON:

– I am only quoting the figures published in the newspaper. The companies mentioned are some of those which will be affected by the tax on war profits, and the figures were published for the three years, 1914, 1915, and 1916, in order to enlighten the public as to the profits being made during war time. The right honorable member for Swan endeavoured to make the Committee believe that no profits are being made at the present time.

Sir John Forrest:

– I was speaking of primary industries.

Mr FENTON:

– The right honorable member referred to the primary industries being subjected to imposts by two different land-taxing authorities. Every other industry in the Commonwealth is subjected to double taxation. Of course, the right honorable member will argue that the primary producer very often is unable to pass on his taxation. I am prepared to admit that that is so to a large extent. There are a few industries, in which, through co-operative action, the primary producer is able to control the disposal of his produce, and to have a voice in fixing the selling price. It is an unfortunate thing that the producer has not gone in more extensively for cooperative action. If the producer will continue to support the middleman in the cities, it is his own fault that he has to carry that burden. He can become the marketer of his own produce and thus save thousands of pounds.

Mr Sampson:

– But that will not relieve him of paying heavy taxation.

Mr FENTON:

– No; but if the farmers can make profits out of the direct marketing of their produce, they can be in a better position to pay taxation than if they allow other men to pocket their profits.

Mr Sampson:

– Co-operation is good, but taxation is quite another matter.

Mr FENTON:

– Taxation will often drive men into co-operative action for their own protection and in order to be. better able to raise the money to pay the taxation.

Another matter to which I wish to refer is the encouragement of Australian industries. I do not say that this is a matter which ought to have been referred to by the Treasurer, but I think the Prime Minister ought to have made reference to it in his Ministerial statement a few days ago. I have been expecting action by the Prime Minister in regard to this matter, for, although some of his colleagues are different from those who sat in his Cabinet a few weeks ago, he is still Prime Minister of Australia, he is still a gentleman of unbounded energy, and a person who can do much for the people of this country. I realize that he is an exceptionally busy man, and I believe that many of his recent mistakes are due to his having taken too much upon his own shoulders. I say, however, that it is his duty to carry out. the promise made to Parliament over eighteen months ago, and by Mr. Fisher, when Prime Minister. In October, 1914, I asked the then Prime Minister what the Government intended to do to encourage, not only industries already established in Australia, but also the establishment of new industries. With the exception of the creation of a bureau of science, little or nothing has been done in that direction up to date. The honorable member for Parramatta and other honorable members argue that we should devote the whole of our energies to the conduct of the war, and only when it is over turn our attention to domestic affairs. The day is coming when many of those men who went to the war will be returning, and when this part of the world will be put to a greater test in the finding of employment than it is undergoing at the present time. It behoves every far-seeing Government to make some provision for that time. It does not appear as if we may expect the cessation of hostilities in the near future. Nevertheless, this great war may end suddenly, and if we make no effort now at organization in Australia, we shall be, when the war is over, one of the most backward portions of the British Empire. In Canada they are organizing, not only for the equipment and despatch of troops to the front, but also for the establishment of new industries and the revival of old ones. In Australia we are doing practically nothing. It is stated by historians that, great though the losses were, the Civil War did more than anything else to establish American industries, of course in conjunction with a protective Tariff. I shall quote figures, comparing the years 1860 and 1870, and it must be remembered that for nearly half of the period covered by those dates the American Civil War was in progress.

From these figures it will be seen that in ten years American industry more than doubled, although that was a very stressful period indeed in American history. I propose to quote, also, from a pamphlet entitled Business After the War, which is a reprint of an address delivered by George E. Roberts, assistant to the president of the National City Rank of. New York-

The critical period will be at the end of the war, when the armies are dissolved and millions of men must find their places in civil life, and while there is still bewilderment and uncertainty as to what the state of industry and trade will be. The problem will be to integrate the industries, not only at borne, but throughout the world, and get them on a mutuallysupporting basis, for every man who has work will be able to buy the products of others.

That is the opinion of one of America’s bankers looking at the war from the American stand-point. I have read other American opinions. The discussion has been as to whether Great Britain would be the leading financial country after the war, and they have given the verdict that she will continue to occupy the proud position that she held prior to the war. We all hope that she will, but in order to show that at the very centre of our’ Empire, where there is now organization of food, &c, steps are being taken not only to conduct the present war, but also to prepare for what will take place after

Mr. Wenton. the war, I shall quote from a speech delivered on 15th August by Mr. Montagu, who was associated with the Ministry of Munitions. Mr. Montagu gives this word picture of the condition of affairs in Great Britain -

Old-fashioned machinery and slip-shod methods are disappearing rapidly under the stress of war, and whatever there may have been of contempt for science in this country, it does not exist now. There is a new spirit in every department of industry, which, I feel certain, is not destined to disappear when we are at liberty to divert it from its present supreme purpose of beating the Central Powers. When that is done, can we not apply to peaceful uses the form of organization represented by the Ministry of Munitions? I am not thinking so much of the great buildings which constitute new centres of industry, planned with the utmost ingenuity so as to economize effort, filled with machines of incredible efficiency and exactitude. I wish rather to, emphasize the extent to which all concerned - and each section is vital to our objects - are co-operating to obtain the best results from the material in our hands. We. have the leaders of all the essential industries now working for us or co-operating with us in the Ministry. The great unions render us constant assistance in the discussion and solution of difficulties, whether with our officers or within their own body. On technical questions of the most varied character we have the advantage of the best expert advice in the country.

We have in being, now that British industry is organized for war, the general staff of British industry. I am sure that we should sacrifice much if we did not avail ourselves of that staff to consider bow far all this moral and material energy can be turned to peaceful account.

Not only is Mr. Montagu pleased to know that British industry has been organized and placed on a sounder footing than ever for the manufacture of munitions of war, but also he is able to show that immediately the war is over the labour and machinery employed in the manufacture of munitions of war will be diverted to other channels, and Great Britain will be in a position to manufacture the articles needed in industries conducted during the time’ of peace. A perusal of the British House of Commons debates or British periodicals will show that in Great Britain, where the task of carrying on the war is so heavy, and where they are doing all they possibly can to keep faith with the demands made by an immense war, there is an organization of scientists, chemists, engineers, workers, and employers concentrating its efforts not only on the manufacture of munitions, but also on the building up of future industry. Where thousands to-day are employed on the manufacture of munitions of war, they will at once be in a position when the war is over to conduct those industries so essential to the welfare of a country in times of peace. Sir W. Essex speaking in the House of Commons said -

I think the products of this Armageddon are going to be real and substantial. I know the price we shall pay for it will be enormous; but we shall not begrudge it, or a tithe, or a hundredth of it, but a great by-product will be that our mechanical industry and our chemical industry, and all the industries which are touched - and hardly an industry is not touched more or less intimately - will have been revivified, modernized, and invigorated to an incredible degree, and that must of necessity react on the whole industrial work of our Empire, and will not only maintain, but enormously enhance, all the advantages which, as a, manufacturing nation, we have hitherto enjoyed.

Our Ministers may say that their hands are full at the present time, but I see no reason why we in Australia should not make more use of the brains of our country. Of what use is it to have certain materials practically lying idle? The other day a young inventor was introduced to one of our Ministers, who was pleased to inspect the model of a submarine submitted, and was so taken with it that, after consultation with his officers, he found it worth while to give that young man a trial in the Commonwealth workshops. I believe that in a few days the young man will probably be placed in the dockyard at Cockatoo Island and given the opportunity to prosecute his work with the best tools available, and the best machinery and advice at his disposal. The Minister has taken the right step. Our young men should be encouraged more. Many a young Australian inventor has been turned down. Some time prior to the war two young engineers who had in collaboration worked on two ideas for a number of years, submitted their proposals to a number of engineering firms in Australia, but were turned down. They proceeded to Great Britain, and interviewed some of the big engineering firms there, but were also turned down. They then said to themselves, “ If our own kinsmen will turn us down, let us go to Germany.” They did so, and submitted their designs to engineering firms there. The German firms seized the opportunity, and gave the young men every facility to complete their invention, and get their machines going, and they were a great success. This happened prior to the war. I asked a friend of these young fellows how they were getting on at the present time, and he said that so far as he knew they had been interned. This is only one case in which Australian ideas have been turned down by our own people, and the inventors have had to seek in foreign countries the opportunity to complete their ideas. If I had my way, I would give every young man whose invention is shown ‘ by a preliminary investigation likely to be of use to the community the opportunity of going into some firm or Government establishment where he could carry out all his experiments and complete his invention. Over and over again, inventions have revolutionized industry. We should do all we can to get the brains of Australian chemists, engineers, and others to work together to do something for Australia, so that at the close of the war we may be ready to take our place in competition with other parts of the world. Otherwise, we shall be all behind. Canada has organization of industrial matters side by side with its organization for the carrying on of the war. It is the same in Great Britain, and if Australia is to be in a proper position after the war, we must do something. I regret that the Prime Minister is not prosecuting with greater energy the ideas on which he started eighteen months ago. All that has been done is the appointment of a number of university professors and a few others supposed to be captains of industry. They have met from time to time, but no results have been achieved.

We are told that there are some difficulties with regard to proceeding with the consideration of the Tariff. We have nothing but a mongrel Tariff now. It is of little or no good. Every year millions of pounds’ worth of goods are flowing into Australia, a large portion of which could be made by our own workmen. One of the increases shown in the Treasurer’s Estimates over those of his predecessor is £250,000 in Customs duties, showing that even in war time, when there is supposed to be very little money in circulation, and when there is supposed to be lack of employment, our imports are mounting up. If they are to continue, it will mean that

Australian artisans will be put out of employment. If we cannot stop it by Tariff regulation, it is time we had the genius, energy and will to put into operation something that will afford us equal protection against those who are manufacturing in low-wage countries. There are a hundred-and-one ways of doing it. Side by side with doing the best we can in regard to sending men to the war - and Australia has done splendidly in sending men, money and materials to the other side of the world; I know of no other part of the Empire that has done so well in proportion to population - we should encourage Australian industry. The increase in the cost of raw materials has made a great deal of difference in the employment of labour. Some industries are dependent upon raw material and are practically idle at the present time, because that material is unobtainable, or is too costly. The figures as to the average prices for the nast four years are given by the Treasurer in re gard to a number of items. I shall refer to one only - one that is under consideration in another quarter. I speak of cement, which is used in most of our public buildings, and is, therefore, of great importance to the Government. If we could produce cement to-day at 13s. lid. per cask - the price ruling in 1913 - instead of having to pay 18s. per cask, which is now the market price, we should be in a much better position.

Mr Tudor:

– Then, again, we import £1,000,000 worth of galvanized iron every year.

Mr FENTON:

– I believe that nearly £500,000 worth of cement is annually imported into Australia.

Mr Archibald:

– It ought to be made here.

Mr FENTON:

– We have here all the materials for the manufacture of cement, and I hope the Minister will induce his colleagues to take action to carry out the recommendation of the Public Works Committee that a Commonwealth cement works should be established. We have mountains of material, one might almost say, in a splendid position, and if, instead of paying 13s. lid. a cask, as we did in 1913, we could manufacture it here, and supply it at the Federal Capital, as has been estimated, for 9s. or 10s. a cask, or one-half the present ruling price, the Government would effect a very substantial saving. That is one of the many industries that ought to be pushed ahead in Australia. I have referred to these items merely to indicate what ought to be done. Had the Government been alive to the true interests of the Commonwealth, the recommendation I have mentioned would have been at once adopted, and by this time a cement works would be in full operation, turning out cement at half the cost which we have to bear to-day.

Mr Boyd:

– We are manufacturing Portland cement at Geelong.

Mr FENTON:

– And also in several other parts’ of Australia, but the local production is not sufficient to meet more than half the demand. It is time these works were established. Why should wo go on importing millions of pounds’ worth of material that we can manufacture here? When the war is over, we shall be in Queer Street unless we organize our industries better than we have been doing. I have quoted Mr. Montagu, the Minister for Munitions in Great Britain, as well as leading industrialists, and have also pointed out the wonderful revolutions in industry that took place in America even during the Civil War. Historians and others have declared that the American Civil War, notwithstanding its terrible calamities and its sacrifice of at least a million lives, led to America setting up her own industries. Let it be said to the credit of Lincoln and others that they took care that America was well protected. With a good Tariff, and the proper ‘encouragement of industry in other ways, there is no reason why we should not rapidly enter upon the manufacture of many goods that we are now’ importing from other parts of the world. We are also in an unfortunate position from a defence point of view. I understand that if a steel plate were required for one of our war ships, we have not in Australia a machine to roll out one.

Mr Boyd:

– Go down to the State shipbuilding yards !

Mr FENTON:

– They are practically to let. There was some talk of the establishment of an arsenal in Australia many months ago, but I do not know that a single peg has yet been put in. In connexion with that arsenal, it was proposed that steel works should be established. Such works are sadly needed in Australia. Some honorable members may imagine that the steel works established in Newcastle by the Broken Hill

Company are suficient to meet the requirements of the Commonwealth. I would tell them, ho’wever, that, in respect of steel rails and a few other materials, those works are already unable to supply the orders that are being sent in. Unless Australia is to lag far behind all progressive countries in the matter of industry, she will have to establish, not merely one steel works, but, in all probability, halfadozen. Cement and steel will continue to play a very important part in all construction work, and when the war is over, it will be impossible for some years to obtain various “classes of steel from the outside world. In that case, where will Australia be unless she is capable of supplying her own requirements in this respect? I hope that the Assistant Minister, who knows how essential it is that we should have in Australia an arsenal and a steel works in conjunction with it, will use his influence with the Cabinet in order that such an enterprise may at once be entered upon,- It is essential to the defence of this country, as well as to the multifarious works that we have to carry out.

I have now to bring before honorable members an interesting piece of information from Joseph Palmer and Sons’ Monthly Share List, compiled to 21st November, 1916 -

It is to be deplored that so influential a body as the Council of the Sydney Chamber of Commerce should have recommended a forced loan to the Federal Government aB? a method of raising money.

I did not know, until I read this report, that such a recommendation had been made -

It would be hardly possible to imagine a more dangerous, and, if acted on, more mischievous financial proposal. Such a method of confiscation is all the more perilous from the very fact that, bearing interest, II conveys a false appearance of equity. The consequences to be feared are so disastrous that it would be unwise at the present critical time to discuss them, but no experienced student of the science of political economy could contemplate such a measure without alarm.

I am surprised that such an influential body should have suggested it -

Far too much fuss is being made about the proposed so-called wealth tax. Its exceptional character is recognised by its being for a limited period only, and for a special purpose. With this safeguard, and being so moderate in amount - £5 per year for three years on each £1,000 of property of all descriptions owned by the citizen, less an exemption of £500 - there is no cause to be distressed.

The Treasurer ought to take advice from this quarter. These are the views of financial men.

Mr Poynton:

– I have seen the report.

Mr FENTON:

– The Treasurer’s proposals do not show that he has adopted the advice given by these men, who go on to say-

There are worse forms of taxation than a wealth tax. Income tax, for instance, which is really a tax on conscience, being evaded by lots of people who ought to pay, and which takes no account of the manner in which income is disposed of, whether in a person’s sole self-indulgence or in a manner beneficial to the whole community.

I presume that, with the assistance of the solid Liberal party, the Ministry feel perfectly safe in carrying their financial proposals through this House. Their proposals have been somewhat watered down as compared with those submitted by the ex-Treasurer. And it is because they have been so watered down, I presume, that they are more acceptable to the Liberal Opposition. I do not know whether they conferred with the Government, but I do know that the Leader of the Liberal party, in the course of a press interview, laid very considerable emphasis on the point that> the financial proposals of the ex-Treasurer would need to be considerably amended in order to be acceptable to his party. That was a hint to the Treasurer. Whether it was taken without any more pressure on the part of the Leader of the Liberal Opposition, I do not know, but the fact remains that the financial proposals of the late Government have been amended, and amended in a direction that will not meet with the unanimous approval of the Labour party.

Mr Hampson:

– Does the honorable member say they have been “ Cooked “ ?

Mr FENTON:

– They have been altered, perhaps, under the influence of the warmth of a Cook. Had the .Labour party remained as it was a few months ago, there is not the slightest doubt that, with the exception of the exemption of the mining industry from the war profits proposals, no change would have been made in the taxation scheme of the Government. There would, at least, have been no reduction. Rather would there have been an increase* but subject to the excellent safeguard which some of us -would like to see introduced to prevent taxation being passed on. Some scheme should be evolved whereby those who can well afford to pay taxation should be compelled to bear it. Most of our taxation is passed on. That is not a mere clap-trap statement. A fairly high financial authority - the honorable member for Balaclava - when dealing with Mr. Fisher’s Budget proposals in this House, said he knew that the whole community would have to bear the taxation then proposed. He said, “ They filter down through various human activities to the bedrock, that is, to the unskilled worker. It is he who nearly always pays taxes.” This being so, it is the bounden duty of every member of the Labour party, inside and outside of Parliament

Mr Boyd:

– Which Labour party ?

Mr FENTON:

– There is only one Labour party, and it has gone straight on. Naturally we do not look for support from the Liberal ranks. But, so far as we can, we must provide against the passing on of taxation, so that the financial load may no longer be borne by the masses instead of by the wealthy. The people cannot bear this burden for ever. Education is spreading, and the community is beginning to realize that the workers have been imposed upon too long. The day will come when they will demand some reform, and it is for us to endeavour to see that those who have fewest of the comforts of life, and who are least remunerated, are freed from unfair taxation. I have spoken of Unification, and the remodelling of the Constitution of Australia as a means to reducing expenditure and taxation. I shall do my best, in conjunction with any party, for the lightening of the burden of the masses by shifting it on to the shoulders of those who can better carry it.

Mr HANNAN:
Fawkner

.- I desire to bring certain matters before the Minister, and to enter an emphatic protest against the action of officials in the Defence Department in sending military police to arrest those whom they term deserters. About 1 . 15 last Thursday morning, Mr. Robert Anderson, of Murphy-street, Port Melbourne, with his wife and seven children, were awakened by loud knocking at their door, and a demand for admission. When he asked who was there, he was told, “ Military police.” He naturally concluded that something had happened to his son, who was absent on active service. As he walked towards the door, he heard persons running past the side of the house, and when he opened it, two military police rushed in. They immediately went through the front room, the main bedroom, and the children’s room, and, having made a thorough search of those apartments, returned to the front room. On Mr. Anderson asking whom they wanted, they replied, “ Your son.” Mr. Anderson said, “You must take a long journey to get him, because the last information I received was that, over two months ago, he was at Salisbury Plain, and was to leave for France on the following day.” A photograph of the son was hanging on the wall, and Mr. Anderson had a number of his letters from England. He having satisfied the police that the son was actually at the front, the man in charge said that he accepted no responsibility for the visit, having been instructed by head-quarters to make it. He added that he had nine other visits to pay in that district that morning, and said that the next place to which he was going was that of a Mr. Gibbons, whose son Frank had deserted. Mr, Anderson immediately said, “ Mr. Gibbons, like myself, is a family man, who has his work to go to in the morning. Do not wake him. His son sailed in the same steamer with mine, on the 3rd July last.” Private Anderson has been listed as a deserter for some time, although his parents have been drawing _ part of his pay from the Defence Department ever since he left on active service. No visit was paid by the military police to Mr. Gibbons that morning, but, two days later, a man, who represented himself as an old employer of the lad, who wished to make certain inquiries concerning him, knocked at the door, and was admitted by Miss Gibbons. She showed him a photograph of her brother, which was hanging on the wall, and he, after one or two casual questions, left. The Gibbons family were at a loss to account for this visit, until, two days later, Mr. Anderson told them of the visit which had been paid to his house. The Gibbons family then found that the supposed employer was really a member of the Defence Department, who had called to verify Mr. Anderson’s story. Personally, I think it is a scandal that the homes of men who have been on active service for months should be raided in this way in the middle of . the night; and something should be done to prevent the recurrence of such, events. I am satisfied that the departmental list of deserters, judging from what has occurred recently, could he reduced by 30 per cent., if the so-called deserters, who are on active service, were deducted. The whole circumstances show that there is some person or persons in the Department responsible for serious blunders, and they ought to be brought at once to book. Much personal suffering and alarm is occasioned by these ill-timed visits; and surely the parents of boys who have gone to the front are worth more consideration than has been shown them in this regard by the Department. I trust that the Minister for the Navy will make a note of the cases I have cited, and see that these military regulations and duties are carried out more carefully. I should now like to refer briefly to the financial proposals of the Treasurer. As one who occasionally goes to a football match, a theatre, or a picture show, I take strong exception to the proposed tax on amusements. Of course, there is a certain class of people who do not smoke, never visit football matches, or places of amusement, but who are very keen on advocating that people who so indulge shall be subject to some form of taxation. I feel certain that a greater portion of the £700,000, which is estimated to be thus raised, will come out of the pockets of the working classes, for we may safely conclude that at any picture show in Melbourne, fourfifths of the audience is composed of wageearners. We may be told, and probably will Be told, that no extra charge for admission will be made in consequence of this taxation, but judging from what one hears from people who have recently visited the Old Land, the person entering the theatre pays the ½ on the 6d., the Id. on the ls., or whatever the tax may be, to the person who sells the ticket. It is very probable that those connected with our theatres and picture shows in Australia will adopt the same method. Surely there are other ways of raising money for the purposes of the war. I have no objection to -taxation, but I do object to this form of it. I now ask the Treasurer how he can possibly take credit for any large saving by means of his sinking fund. We are told in the Treasurer’s statement that the previous Go- vernment were making provision for the establishment of a sinking fund with a view to paying back loan moneys in a certain number of years, and that by an alteration of the system, and a reduction of the amount to go into the sinking fund, there is to be a saving of practically £1,445,222 per annum. I fail to see where any saving comes in, and I do not know that the Treasurer himself could point to any actual result in that direction.

Mr Poynton:

– It is a lessening of taxation.

Mr HANNAN:

– But it is not a saving. The Treasurer takes credit for saving over £1,000,000 per annum, as compared with the arrangement proposed by the ex-Treasurer.

Mr Poynton:

– In taxation.

Mr HANNAN:

– It is a saving in taxation.

Mr Poynton:

– That is all I claim.

Mr HANNAN:

– But it is not a saving to the community.

Mr Poynton:

– Of course it is; the community pays that much less.

Mr HANNAN:

– The community will ultimately pay more; they will go on paying interest for a greater period. Compared with the proposals of the honorable member for Capricornia, the Treasurer is claiming a saving of over £1,000,000, which I say he is not entitled to claim. Such a statement, if allowed to go out to the public, will be absolutely misleading.

Mr Poynton:

– It is an immediate saving of taxation to that amount.

Mr HANNAN:

– It is a saving to a section of the community, but it is not a saving so far as the Commonwealth finances are concerned. It .would appear from the statement that the Government wish to take credit for a saving in comparison with the proposal submitted by the late Treasurer. I dispute their right to do that.

I recognise the difficulties which confront the Government in meeting their financial responsibilities. Probably the imposition of too heavy a form of taxation might be injurious to those who are responsible for the carrying on of our industries, and that to the extent of the injury thus done unemployment would be created in our midst. No doubt, when framing their proposals, the Government had in mind the desirability of imposing a certain form of taxation, which, while producing the necessary revenue to enable them to carry out their obligations, would not discourage those to whom we look for the conduct of our commercial and industrial activities.

I propose to refer to one or two matters that have received a great deal of prominence during recent weeks. A statement was made by a Minister of the Crown in another place that the influence of the Industrial Workers of the World was in operation in Australia, and that the gospel of slowing down preached by that organization is having its effect on the workers of the Commonwealth. I have come out of the workshop more recently than any member of the present Government, and I have not seen any indication whatever of the operation of that policy, . which is so much talked about by a certain section of the community. I have heard statements made by the Prime Minister that the Labour party to-day is advocating sabotage’. I have seen no indication of that. That there are people in Australia who believe in that policy I will not deny, .but to any one who says that the principles of slowing down and of sabotage are in operation in the recognised industrial movement of Australia, or are believed in or advocated by those connected with that movement, I give the lie direct. I have fought the Industrial Workers of the World in Trades Hall Councils and political conferences whenever I have had the opportunity. There is in every English-speaking community a branch of the Industrial Workers of the World, who comprise men who believe in what they term direct action, and not in political action. Their methods of bringing about social and industrial reform are the exact opposite of the methods of the recognised political and industrial movement in Australia. We believe in securing our political and social reforms through the medium of the ballot-box, by sending men to Parliament to effect reforms in a constitutional manner. The Industrial Workers of the World do not believe in parliamentary representation, but only in industrial organization. That body believes in the strike and in sabotage, and its members advocate those methods from platforms throughout the world. Not one of the men who assert that the genuine Labour movement is abandoning the policy which it has fol-

Mr. Hannan. lowed for years, and, instead, is advocating slowing down and sabotage, has produced one tittle of evidence to support the allegation. I have never had any sympathy with the Industrial Workers of the World or their policy, but for years that organization has been established in New South Wales. There are certain classes of men and women who, believing in the doctrines of the Industrial Workers of the World, formed a branch in that State. Other individuals have joined the branch, and we are told that they came from other parts of the world, and have used the organization as a cloak to carry on quite another class of work. I have never had any sympathy with these people. A number of them have been sent to gaol, but one of them upon being sentenced gave expression to a sentiment which I heartily indorse. I stated here the other evening that I have no sympathy with some of these men, but that accused persons on their trial, even for ‘murder, were at least entitled to fair play, and that these men had not received it. I say that fearlessly. It is not a popular thing to say, and there are electorates in this country in which to say it would mean one’s political death. But when men are fighting a just cause they need not attack others who are within the shadow of death in order to bolster up their own case. According to the Herald of the other evening, one of these men, upon being convicted in Sydney, said that the Prime Minister of Australia had practically sentenced him and his companions before they had obtained a hearing. I indorse that sentiment expressed from the dock. With their crimes I have nothing in common. They have been adjudged guilty, and I am not going to question the decision or the sentences which have been imposed on them. But I do question the right of certain individuals in our midst to make political capital out of the crimes of these men, and to seek to attach opprobrium to the Labour movement with which I am identified.

Mr Finlayson:

– Who did that !

Mr HANNAN:

– The Prime Minister. Only the other day he said that the headquarters of these men were in the Trades Hall. I say that their head-quarters are not in the Trades Hall.

Mr Joseph Cook:

– I would not say that their head-quarters are there, but I think that the honorable member will admit that they are making pretty good use of the Trades Hall.

Mr HANNAN:

– They have no connexion with the Trades Hall.

Mr Joseph Cook:

– Are there or are there not Industrial Workers of the World men in the Trades Hall ?

Mr HANNAN:

– I dare say that the members of the Stock Exchange would not be ready to accept responsibility as ti body for the actions of all their members, and the same remark applies to every section of the community. There are men and women in the Industrial Workers of the World in Sydney who have been connected with that organization for years, and who do not believe in political action. They have only one idea of bettering their social and industrial conditions, viz., by direct action by means of strikes. But they do not lend themselves to the policy of burning down buildings and taking human life. If a number of clever men from another part of the world get into an organization like that and utilize it to give effect to their improper methods, would the honorable member for Parramatta blame every man and woman in the organization ?

Mr Joseph Cook:

– Certainly not.

Mr HANNAN:

– At the corner of Goulburn-street and Bathurst-street, in Sydney, meetings have been held of a Saturday and Sunday night for the past three years, and I have never heard one member of the Industrial Workers of the World say -a word against the Leader of the Opposition. I have never heard them attack Mr. Wade, but I have frequently heard them attack the Labour party and the Trades Hall. They have called both State and Federal Labour members parasites, and have applied the same epithet to every organizer and officer connected with the Labour movement. The conscription question arose, and for once the leading man in the Industrial Workers of the World saw eye to eye with the majority of members of the Labour movement in Australia. The Industrial Workers of the World were opposed to conscription, not - as was explained by Tom Barker - because they believed, as the majority of Labour men believe, in the voluntary system. They were opposed to militarism, and to a single man in Australia having to take part in the war. But the Labour Government are responsible for having sent hundreds of thousands of Australians to participate in it. There is the cleavage between the two parties. My complaint is that the Prime Minister, in conducting bis campaign, went from end to end of the country exclaiming, “ Here is your Labour movement under the control of the Industrial Workers of the World, under the influence of Germany, and in receipt of German gold.” He tried to flog our movement by attaching to it responsibility for the doings of the Industrial Workers of the World in Sydney. I strongly resent his action, because his charges were unfair and untruthful.

Mr Joseph Cook:

– I do not think the honorable member is quite stating the case. I do not remember the Prime Minister trying to saddle the Labour party with the guilt of these men.

Mr Hampson:

– He said that we were linked up with them.

Mr HANNAN:

– It is quite evident that the right honorable gentleman did not read the speeches delivered by the Prime Minister during the campaign.

Mr Joseph Cook:

– I am afraid that I did not read into them what the honorable member has.

Mr HANNAN:

– Every person in Australia could read it into them. For instance the Prime Minister deliberately endeavoured to damn the honorable member for Bourke politically, because of the action of the members of the Industrial Workers of the World in Sydney, and because the honorable member had written a letter from thiB House to Mr. Barker.

Mr Finlayson:

– Is there any one in the House who knows more about the Industrial Workers of the World than the Prime Minister 1

Mr HANNAN:

– Probably there is no one in the House who knows more about the methods of the Industrial Workers of the World than the Prime Minister. If I wished to know how to create a strike or how to get my union into the Arbitration Court, perhaps to the disadvantage of another union that had been waiting for two years to have its case heard, I would go to the Prime Minister for advice. Yet when the fight in regard to the conscription issue came round, when all other arguments failed, this question of the Industrial Workers of the World was the trump card played throughout Australia. During the last two weeks it was given more prominence than all other arguments except the inspired messages from other parts of the world, and some of the literature that was put into circulation by those who were conducting the conscription campaign deliberately linked up the official industrial and labour movement of Australia with the crimes of certain men with a view to misleading the people. On the top of all this we are told now that there was no harm meant.

Mr Joseph Cook:

– If the literature issued during the campaign is compared you bad the best of it. I never read such hot lying in my life.

Mr HANNAN:

– I propose to continue my remarks to-morrow.

Progress reported.

page 9484

ADJOURNMENT

Order of Business

Mr. HUGHES (West Sydney- Prime

Minister and Attorney-General) [10.46]. - I move -

Thatthe House do now adjourn.

It is proposed to continue the debate on the Supply Bills to-morrow, but it will be most convenient if the general policy of the Government can be discussed along with the financial policy.

Question resolved in the affirmative.

House adjourned at 10.47 p.m.

Cite as: Australia, House of Representatives, Debates, 6 December 1916, viewed 22 October 2017, <http://historichansard.net/hofreps/1916/19161206_reps_6_80/>.