6th Parliament · 1st Session
Mr. Speaker took the chair at 11 a.m., and read prayers.
– Is the Prime Minister aware that conflicting statements have been made concerning the way in which the soldiers at the front voted on the compulsory service referendum, and is it not . possible to set the matter at rest by making public the details of the voting?
– I should be very glad to make such a return public did not a request from the Imperial Military Authorities preclude me from doing so.
– Is there anything to prevent the stating of the result of the voting ?
– If the honorable gentleman asks whether, as a fact, a majority of those at the front voted for or against compulsory military service; I may say that the vote of the members of the Australian Imperial Forceabroad was substantially in favour of it.
– Are we to understand that a majority of the Australian Imperial Force abroad voted for the referendum?
– When I said that a majority of the members of the Australian Imperial Force was in favour of the referendum, I included nurses, doctors, and others entitled to vote. But, as a matter of fact, a majority of the members of the Australian Imperial Force entitled to vote recorded their votes for compulsory military service.
– The nurses had to be dragged in to secure a majority.
– In view of the interjection of the honorable member for Indi, I ask is it possible for the Prime Minister to say what was the percentage of the majority vote?
– I cannot tell the House that. As to the dragging in of nurses, one would rather drag in nurses than doctors, and it certainly was not necessary to embrace the nurses to obtain the majority that I spoke of.
– Will the Minister for Home Affairs, as superior landlord, lay on the table of the House a return of the revenue and expenditure of the State hotel in the Northern Territory ?
– Will the Minister for Defence consider the advisability of establishing a wireless station on Norfolk Island, or on Lord Howe
Island, or on both islands, for the convenience of shipping in the Pacific?
– The matter is under consideration.
-Has the Minister for the Navy yet received a reply to my question concerning the reinstatement of clerks who enlisted under the home service proclamation ?
– No. I have had to send on the question to Sydney, and have not yet received a reply to it.
– Will the Prime Min ister inform the House whether the farmers interested in the old pool may expect a Christmas box in the shape of another payment for their wheat this year? If not, what is the earliest opportunity at which they can expect another payment ?
– The honorable member refers to the wheat for which the farmers have already received 3s. 6d., and asks when will they receive the balance. That wheat has not yet left the country, and we have received nothing for it. Indeed, nothing will be paid for it until March next. The payment to be made in respect of the new crop will come out of an advance financed by the Commonwealth., I cannot indicate, even approximately, when the difference between the 3s. 6d. already paid on the old wheat - plus the cost of handling and railway charges - and 4s. 9d., the price at which the wheat was sold, will be paid to the farmers, but every effort is being made to expedite payment.
– Has the amount . per bushel of the advance for the new wheat been definitely arranged ? If so, is the money to be available on the delivery of the wheat by the farmers? Is it proposed to keep distinct, and separate the transactions of the two pools, and to wind them up separately?
– The old wheat is all covered by an advance made by the old pool. If a farmer has not received an advance for wheat that he has delivered, he will receive one. For all new wheat, farmers will get an advance of 2s. 6d. per bushel net.
– On the delivery of the wheat?
– Certainly. As fast as they can deliver the wheat we shall pay them 2s. 6d. per bushel for it.
– Recently the honor able member for Wentworth asked for some information concerning the purchase of locomotives for the Kalgoorlie to Port Augusta Railway. The following report from the Engineer-in-Chief is now available : -
With reference to the question raised as to the locomotives for the Kalgoorlie-Port Augusta railway, I have to report as under: -
In the early stages of the work the opinion was held that internal-combustion engines could be obtained which would haul material for building the line, for carrying on construction work, and be afterwards available to work the public traffic, and apparently the idea of obtaining these engines was not abandoned to the time of the present Engineer-in-Chief taking office. Presumably with such hopes, the ordering of steam locomotives was deferred.
When the present Engineer-in-Chief took charge, in April, 1914, it was found that engines on hand, or which had been contracted for, numbered thirty-two; of these, six were not suitable for railway construction work of such magnitude. They were light passenger engines that had been running many years on the New South Wales’ railways. They were procured in the early stages of the work because of the delay which occurred in the development of the internal-combustion idea and in having suitable steam locomotives built. They were not equal to the heavy construction traffic, nor were they capable of moving the tracklayer train from point to point as required to facilitate platelaying. So light and unsuitable were these engines that in assessing our requirements their services for main-line traffic had to be practically disregarded. They could only be deemed to be of value for minor runs and for shunting in the depôt yards. The number of properly serviceable engines provided for to this date was, therefore, twenty -six; of this number, two only had been delivered, eight only had been delivered by June, 1914, sixteen by July, 1914, but it was not until July, 1916, that any further deliveries were effected and engines put into running. Even now, only nineteen of the twenty-six have been delivered.
Serious water trouble had arisen in connexion with the locomotives, the boilers and tubes being badly affected thereby; also a decision was reached before the middle of 1914 to adequately ballast the line, this work to be carried out, as far as practicable, before plate- laying finished.
Additional locomotives were therefore needed, and, on 14th January, 1915, the then Government decided, on the recommendation of the Engineer-in-Chief, to procure twenty more, which would make forty-six main line locomotives in all.
Of these, eight were imported from Great Britain, as local manufacturers were unable to supply sufficiently early. The remaining twelve were submitted to tenders within the Commonwealth.
Representations by local manufacturers were made that twelve was too small a number for economic construction, and that better conditions could be secured by the Government if the number were increased to, at least, twenty.
It is1 understood that the Government at the time had in view the possible construction of a north-south railway, and a strategic railway eastward of Port Augusta, either during or immediately after the war. ‘It appears to have been seized of the importance of linking the capitals, as far as practicable, by railways of uniform gauge, and of the necessity, in particular, of connecting for defence purposes the standard gauge Commonwealth line with the New South Wales system of similar gauge, as subsequently recommended by theRailways War Council. This latter work, it might now be emphasized, is essential from a defence point of view. The Commonwealth line, without such linking up to make State rolling-stock available, would be of. little value for military purposes. It would be impracticable to hold upon it sufficient rolling-stock to adequately meet the defence demands, even for light transport. It is imperative, therefore, to have direct access to the rolling-stock of the New South Wales railways if regard isto be paid to effective service.
It would be apparent, also, at the time, from inquiries made among private manufacturers and the various State workshops, that the volume of work in hand was such that if the Commonwealth Government did proceed with any other railway proposition, either as a defence measure in some immediate emergency, or as a means of providing employment for returned soldiers, or for the development of the country, the difficulties, delays, and expense which have arisen from shortage of locomotives for the construction of the KalgoorliePort Augusta railway would be repeated in respect of the new work.
There was ample evidence, moreover, that prices of locomotive raw materials would rise, which has since been demonstrated, to the extent that most of them are now, and will continue to be, practically unprocurable. This condition will not be greatly eased immediately by the cessation of war, because of the war wastage to be repaired.
The Government accordingly accepted tenders for twenty-six locomotives to be manufactured within the Commonwealth (twenty in Queensland and six in South Australia).
The contractors, in consequence of difficulties arising from the war, have applied for eighteen months and nine months extension -in delivery time respectively.
It might be added that locomotive manufacturers in this country do not possess the requisite plant or facilities foi that of construction. Consequently it has happened, not infrequently, that locomotives had to be imported from abroad, by Commonwealth and State Governments alike, to meet requirements that were beyond the abilities of local manufacturers in the matter of prompt delivery.
– Will the Postmaster: General cause inquiries to be made as to the reasons why, between the 11th and 17th December, no mails were sent by the daily train between Brisbane and Gayndah, and why the working of the telephone service between Maryborough and Gayndah is so unsatisfactory?
– When honorable members have complaints to make, it is usual to submit them to the Department in writing. No honorable member has sent such a complaint to me without it receiving expeditious attention. ‘ I ask the honorable member to pursue that course.
– Is the Minister for the Navy aware that when coal is stacked and exposed to atmospheric conditions, it is liable to generate heat and spontaneous combustion follows? If so, has any precaution been taken to protect the , large quantities of coal at grass in the Newcastle district?
– I have sent instructions to the officer who controls the coal at grass to have the coal immediately transferred to a port, so that, it may. be shipped. I understand that the coal deteriorates, and that there is a risk of spontaneous combustion.
– Is it the intention of the Treasurer to introduce ‘this week a Bill to fix the rates of the income tax for the year ending the 30th June, 1917 ? If it is not his intention to do so, will the effect be to compel taxpayers to pay Federal and State taxation at about the same date, thus causing inconvenience?
– If business will permit, the Bill will be introduced to-day, and I hope that it may be passed before we adjourn for the holidays.
– On 7th December, the honorable member for Maribyrnong asked this question -
A number of those who were recently called into camp under proclamation were compelled to relinquish private employment, but were promised re-employment on their return. Many of them, however, have now found their places filled. Is the Commonwealth prepared to do something for those who have lost positions through obeying the proclamation?
The answer to the honorable member’s question is as follows: -
Large numbers of cases have been received by the Department, and the applicants have been informed that the matter is under the consideration of the Attorney-General’s Department, to whom the general question has been re-submitted as to whether section 134 of the Defence Act is applicable to Part IV. I should be glad to have a list of the names of those to whom the honorable member refers, in order that their cases may be directly - dealt with.
– What is the objection to allowing the wheat-growers to have representation on the Wheat Board?
– The objection to giving the growers direct representation on the Central Wheat Board was that the constitution of the pool provided only for the representation of Governments as such, on that Board, and the Ministers of Agriculture of the four wheat-producing States and the Commonwealth are directly represented. In the second place, there ia no need for the wheat-growers to have a representative on the Central Wheat Board, because they are directly represented on the State Wheat Board. The Central Board does not deal with handling, charges or with the arrangements for handling the wheat. In effect, it deals only with the sale of wheat, and for that reason the Board could not see fit to agree to the request of the, Farmers Conference.
– Will the Prime Minister inform the House what are the prospects of additional ships coming to Australia to take away the wheat now lying stacked in the country ?
– I cannot tell the honorable member w-hat the prospects are. I only know that the. best possible arrangements for the transport of wheat, in the circumstances, are being made. The greatest quantity of wheat ever despatched in any one year was that sent during the present year. I think that, in 1913-14, 1,2000,000 tons of wheat were despatched, whilst this year we have sent away about 1,500,000 tons. After the present harvest, all being well, there will be available in Australia, with the residuum of last year’s crop, nearly 3,250,000 tons. If we have the same facilities as we have had this year, it will take about two years “to shift that wheat. If those facilities are reduced, the time will be longer; if they are increased, it will be shorter. It is hoped that greater facilities for transport will be available.
– Will the old wheat be shipped and paid for before any of the new wheat is sent away ?
– I should not care to say that that arrangement will apply in all cases. The idea is to shift the wheat from the ports most convenient to Great Britain first. No man in the pool will be prejudiced by that arrangement. It does not matter to him which wheat is sent first, because the money received for it will be distributed evenly to all concerned. A few bushels of new wheat might happen to go before the old, but, speaking generally, obviously the old wheat will have to be shifted before the new wheat can get down in any quantity to the wharfs.
– I desire to ask the Prime Minister a question, so as to clear up the financial position with regard to the No. 1 and No. 2 wheat pools. For the future, will sales of wheat be credited to the No. 1 wheat pool until it has been wound up, or proportionately credited to the two wheat pools? Now that the value of the wheat has been definitely fixed in respect of both pools, we have a scrip which* is as good as money. 11 For the benefit of the growers and’’ the financiers of this country, I shall be glad if the Prime Minister can give me this information.
– Questions of this kind are a little difficult to answer off-hand. I should say, however, that each pool stands, if I may use such a term, on its own bottom. If, for instance, the sale of the 1915-16 wheat crop returned to the farmer 4s. 4jd. per bushel - I am taking that price only by way of illustration - it might happen that the new crop w.ould not return the same value, so that, if the two pools were taken together, it would follow that the man who grew wheat in only one year, and not in both, would be the loser. The idea is to clean’ up one pool - to -treat it separately - before we go on with the other.
– Will the Prime Minister state whether it is- not a fact that under the agreement made with the British Government for the purchase of Australian wheat for the two seasons, the arranging of freights is purely a matter for the Imperial authorities?
-Does the honorable member mean for the f.o.b. purchasers!
– The f.o.b. purchasers - the Imperial authorities - fix the freights and have to provide the freight. For the information of honorable members, I may say that the freight now equals the selling price of the wheat; That is to say, the cost of transporting a bushel of wheat from Australia to Great Britain is 4s. 9d., which is equal to. the price at which we sell the wheat itself.
– Will the Prime Minister make available for the information of honorable members a statement as to the trade ‘ in which the Commonwealth steam-ship fleet is engaged, and the extent to which it has been utilized for the transport of wheat?
– I have not the data at hand, and can make only a general statement. With one exception, all the vessels of the fleet have been used to carry wheat. In the case of the exception referred to the ship was loaded with copra for glycerine at the request of the Imperial Government, which required it for explosives. It was impossible to obtain freight for this purpose, because mixed freights pay much better, and private ship-owners were not prepared to carry copra. We placed one of our ships at the disposal of the Imperial Government at their express request. With that exception all our vessels have carried wheat. It was proposed to complete our c.i.f. transactions with Commonwealth steamers, because in that way we should be assured of freight being available for that purpose. It is only fair to explain to the House that we have been able to obtain only one steamer, and, I think, though I am not quite sure, five or six sailing vessels in four months. There is no freight to be got, and, as I have stated, it costs as much to take a bushel of wheat to London as the wheat is worth. To take it to Mediterranean ports it costs even more.
Elmore to Cohuna Service
– Having regard to the long delay in the final settlement of the agreement between the Railway Departments and the Postmaster-General for the carriage of mails over State railways, will the honorable gentleman at once give instructions for the mails to be carried over the Elmore to Cohuna line pending the determination of the final arrangements to be made?
– I have been most anxious to arrive at a decision with the railway authorities as to their charges for carrying our mails on existing and new lines. Under the present conditions the charges are exorbitant. In these times, when the Treasurer is pressing me, perhaps more than any other Minister, to economize, I cannot consistently do what the honorable member asks until I have had a report on the matter.
– In regard to the position of small wool-growers, I desire to ask the Prime Minister if he can so arrange that - (1) the growers have the right to employ independent valuers to protect their interests ; (2) that in cases of dispute a referee board shall be appointed to which the growers shall have the .right1 of appointing, at least, half the- members, and the right to cancel an appointment and to substitute another on his proving unsatisfactory; (3) that the values of the different combing qualities on which values are based be made known, so that a better idea of values can be more easily arrived at.
– I think the honorable member had better give notice of his question. I have explained the matter fully in reply to the honorable member for Echuca and other honorable members. The position of the wool-grower is that’ the Central Board is representative of the industry. The price of each man’s wool is determined, not by any Board, but by skilled experts. The only difference between the selling of wool to-day and the sale of it in ordinary times is that there is now a fixed basis of price, and that the value of a particular clip goes above or below that fixed basis as the quality may demand. Once the wool-grower realizes that the price is not fixed by any body at all, there will be no trouble. The basic price - the flat rate, as it were - is 15½d. per lb. for greasy wool. A bale is brought before an appraiser, who, having examined it, says, “ On that basis of value, this bale of wool is worth 22 £d.” And that is what the owner gets. There are three appraisers. Any one who is dissatisfied with their decision has the right of appeal to the Central Board. The interests of wool-growers are much better safeguarded than they were- in ordinary circumstances in the auction room. It is not now to any one’s interest to give them a smaller rate than that which they should receive. The only limitation is the basic price of 15£d. per lb. for greasy wool. No one denies that that is a perfectly fair price, and it follows that the interests of the small wool-grower are amply safeguarded. If it can be shown that the arrangements made fall in any way short of protecting the small woolgrowers, I will see that ample provision is made to safeguard their interests.
– Has it been definitely decided not to give the small growers representation on the Central Board ?
– The small growers will not have representation on the Central Board unless it can be shown that the representation now on the Board1 does not protect their interests in common with those of every one else. If that can be shown, I will see that the small grower does secure representation.
– Most wool-growers are disturbed in their minds as to when payment for the wool clip will be made. Will the Prime Minister state whether they will be paid when the value of the wool is appraised ?
– I understand’ that, in normal times, it is the practice to pay cash within fourteen days of the fall of the hammer, or within such other time as may be fixed in the conditions. For all practical purposes that practice will be followed under the present scheme, subject, of course, to the fact that we are now acquiring the whole clip. We shall not pay for the/ whole clip within fourteen days, but the time from which the wool will pass through the appraisers’ hands until the grower gets his money will be ‘ about the same as it would have been in the case of an ordinary auction sale.
– The Prime Minister has said that the man who sends in wool worth 22£d. per lb. will get that price for it, notwithstanding the basic value of 15jd. for greasy wool. I should be glad if he could clear a doubt in my mind as to whether he means that under the arrangement made a man may get 22£d. for any of his wool that is worth that price, but that in respect of his whole clip the price paid must not exceed 15½d. Where his wool is not worth 15Jd. per lb., will he get the actual value placed upon it by the appraisers?
– Let me illustrate the position by a reference to the procedure in regard to wheat. We sell .f .a.q. wheat for 4s. 9d. a bushel, but if a man comes along with a lot of chick- wheat we do not agree to take it at that price. In fixing the price for wool, the British Government said, “ We will pay you on the basis of 15Jd. per lb. of greasy wool.” As the honorable member knows perfectly well, some brands of wool always fetch much more than others. Some are sold for 6d. and 9d., while others fetch five or six times that sum. The only difference between normal sales and this sale to the British Government is that a sort of equilibrium is maintained so that the price cannot fluctuate wildly. It is only the quality of the wool itself which oscillates in regard to this level of 15Jd. per lb. for greasy wool.
– Will the Minister for Trade and Customs lay on the table of the Library all the papers relating to the appointment of Mr. Gibbs, an accountant of the third class, Customs Branch, Port Adelaide ?
– I do not think there will be any objection.
asked the Assistant Minister, representing the Minister for Defence, upon notice -
– The following replies have been received from the Minister for Defence: -
asked the Assistant Minister, representing the Minister for Defence, upon notice -
– The Minister for Defence has supplied the following replies: -
asked the Assistant Minister, representing, the Minister, for Defence, upon notice, whether he will inform the House as to -
– The answers to the honorablemember’s questions are as follow : - 1, 2, and 3. This information cannot be made public.
Accuratefgures representing total casualties under the various headings cannot be furnished. Many cases which were first reported wounded or missing have subsequently been posted as deceased and vice versa; similar alterations have been made from time to time under the remaining headings, consequently only net figures as at 31st October, 1916, are shown.
asked the Assistant Minister representing the Minister for Defence, upon, notice -
– The Minister for Defence supplied the following replies: -
asked the Assistant Minister representing the Minister for Defence, upon notice -
– I am endeavouring to obtain the information asked for, and hope to be able to give it to the honorable member at a later hour.
asked the Assistant Minister representing the Minister for Defence, upon notice -
– The following are the replies : -
Mr.FOWLER asked the Minister for Trade and Customs, upon notice -
Do the Customs authorities exercise any supervision over the introduction of picture films into Australia, and, if so, what is the nature of that supervision?
– The answer to the honorable member’s question is as follows : -
Where the Department becomes aware of an intention to introduce a film, the propriety of which is doubtful, an arrangement is made to have the picture viewed at a private screening.
There are only a few cases of the kind on record, and the general practice is to leave the question of censorship of films to State authorities.
Where military considerations are involved, this Department acts in aid of the Defence authorities.
asked the Prime Minister, upon notice -
If he will furnish a return showing -
– I could not furnish such a return without a great deal of trouble and time; but I shall endeavour at the earliest possible moment to give the honorable member such information as will be approximately correct.
Mr. SPENCE (Darling- Minister for
Home Affairs) [11.54]. - I move -
That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1013-14, the following work he referred to the Parliamentary Standing Committee on Public Works for their report thereon, viz.: -
Flinders Naval Base - Erection of powerhouse and workshops, officers’ quarters, and other lesser works required for that establishment.
Plans and detailed estimates of the cost of the proposed works are submitted herewith. The Department of the Navy is providing and erecting all generating plants for the power and lighting requirements of the Base, and also the plant for the equipment of the boiler and machine fitting shops. The buildings for housing the various plants have been planned on lines laid down by the Navy Department. The Department of the Navy proposes to carry out the construction of the condenser pit, and also of the circulating pipe line connecting the power-house to the sea. It is proposed to construct the building as a steel-framed structure, clothed by brick work and protected by a steel-framed roof with galvanized covering. The summarized estimate is as follows : -
Let us say that the total estimated cost is £41,350, which includes £500 for contingencies. There is a list of minor works which it is proposed shall be referred to the Committee, but for which details and other data have not yet been completed. This list will be laid before the Committee as soon as the details are finally arranged with the Navy Department.
Question resolved in the affirmative.
In Committee (Consideration resumed from 18th December, vide page 10148) :
Cl ause 8 -
After the 31st day of October, 1016, no person shall be admitted for payment to any entertainment where the payment is subject to entertainments tax except -
With a ticket stamped with a stamp (not before used) denoting that the proper entertainments tax has been paid
Amendment (by Mr. Poynton) proposed -
That the words “ After the 31st day of October, 1916 “ be left out, with a view to insert in lieu thereof, “ On and after the day fixed by proclamation inpursuance of the last preceding section.”
– I have no objection to the amendment proposed by the Treasurer, but I desire to know what effect this clause will have on the season tickets issued by sporting, athletic, social, and other clubs. The point could be raised on any of the clauses up to clause 12, but I think we ought to have some information now. There are many such clubs devoted to bowling, quoits, and other games, for membership of which working men and others pay £11s. or more annually. From such payments there is absolutely no gain whatever to any person; and clubs of the kind have now the greatest trouble in financing their way. As is well known, no charge is made for admission to any of their competitions, but members and others show a ticket or token, such as I suppose many honorable members possess, and such as I myself hold in connexion with the Melbourne Cricket Club. On my ticket, for instance, I presume the club, if such membership payments are liable to taxation, will have to pay about 3s. 6d. I am speaking on behalf of many athletic and social clubs, which are not moneymaking institutions. Many cricket clubs spend all the money obtained from members’ season tickets in beautifying their grounds. I wish to know whether a percentage of the revenue that these clubs obtain from members’ tickets hag to be paid in the shape of an entertainments tax. In many cases the holders of these season tickets pay their money, not for the purpose of being entertained by others, but for the purpose of taking part in sport themselves. For instance, the revenue derived from the annual subscriptions of rowing clubs does not equal the upkeep of the clubs. These clubs have also to depend upon donations, and the only return that the members get beyond the actual sport itself are the prizes for which they compete. The same remark applies to the big cricket clubs. They get practically no revenue apart fromthe football matches, and since the beginning of the war very little income has been derived from that source. As a matter of fact, with the exception of a few patriotic demonstrations, the Melbourne Cricket Club has not been able to provide any entertainments for the holders of its season tickets. The consequence is that the upkeep of the ground has had to be paid out of the revenue obtained from the membership tickets. In addition, it has been stated that the club has lost 2,000 members, or a revenue of over £4,000 a year. This club does not ask for exemption, but it and other clubs are entitled to fair treatment. There should be some exemptions. Possibly; the Board of Referees referred to by the Treasurer in his financial statement could pronounce upon cases where there should be exemptions. At any rate, I do not think it is the wish of the Government to tax clubs, the whole of whose revenue, obtained from membership tickets, is spent in maintaining and improving the grounds, and which are not run for the profit of the individual. I appeal to the Treasurer to exempt them.
– Wherever there is no charge for admission this tax will nol apply. Do I understand that the honorable member seeks to exempt the big attendances at football matches?
– No; merely the season tickets of these athletic clubs.
– Provision is made for season tickets in clause 11. The tax will be charged in respect of admission to all entertainments on which the tax is payable. If there are two entertainments in the year at which a charge for admission is made, a proportion of the annual ticket is taken to represent those two entertainments, and the tax is payable on that proportion. Where there is no entrance fee there is no charge against the annual ticket. There will be no hardship imposed.
.- Am I to understand from the Treasurer that where no charge is made at the gate this tax will not apply ?
– That is the case.
– I am pleased to hear the Treasurer’s reply, because I had in mind particularly the season tickets of bowling clubs, which occupy pieces of ground in parks, and beautify them for the benefit of the public generally.
Amendment agreed to.
Amendment (by Mr. Poynton) agreed to-
That the following sub-clause be added to the clause -
In all cases in which entertainments tax is collected by the proprietor of the entertainment or his agent, the tax so collected shall, until payment to the Commonwealth, be held by the proprietor of the entertainment or his agent as property of the Commonwealth.
Clause, as amended, agreed to.
Clauses 9 and 10 agreed to.
Clause 11 -
Where the payment for admission to an entertainment is made by means of a lump sum paid as a subscription or contribution to any club, association, or society, or for a season ticket, or for the right of admission to a series of entertainments or to any entertainment during a certain period of time, the entertainments tax shall be paid on the amount of the lump sum, but where the Commissioner is of opinion that the payment of a lump sum or any payment for a ticket represents payment for other privileges, rights or purposes in addition to the admission to an entertainment or covers admission to an entertainment during any period for which the tax has not been in operation, the tax shall he charged on such an amount as appears to the Commissioner to represent the right of admission to entertainments in respect of which entertainments tax is payable.
.- I wish the Treasurer to explain the meaning of the words “ the entertainments tax shall he paid on the amount of the lump sum.” Am I to understand that the tax will be paid on the lump sum, that is to say, on the guinea or two guineas as the case may be, charged by the club for the season ticket ?
– Whatever is charged to the public for admission to an entertainment provided by the club will be apportioned against the season ticket, and the tax will be charged on that proportion only.
– As I understand the Treasurer, the position is this: If a person pays two guineas for a season ticket and the club has one entertainment during the period and makes a charge of1s. or 2s. to the general public, the season-ticket holder will be called on to pay his proportion of the tax on the basis of the1s. or 2s.
– That will be the position.
Mr.Fenton. - The club will pay it.
– That is so, but I think that explains the position. The tax will not be on the full value of the season ticket, but only on the cnarge for admission which is made to those who do not hold season tickets on days on which entertainments are given.
– That is correct.
– There is a charge for admission every Saturday in connexion with football clubs.
– That is the case, and the tax will be paid accordingly, but the Bill will not affect clubs which are more social in their character, and to which the honorable member for Yarra was referring. The tax will only be paid when there is a charge for admission.
– Is the matter to be assessed by the Commissioner?
– A further point 1 wish to clear up is whether the Commissioner will charge the proportion on the whole of the membership tickets or merely on the tickets of those members who actually attend on a day on which a charge is made to the general public.
– An arrangement will need to be made with the club so that the actual attendance may be estimated. The charge will be made on the actual attendance, and not on the general membership roll of the club.
– And that charge will be according to the entrance fee which is being paid by the public?
.- The mere fact that we have the Bill before us shows that times are different from what they were. I know something about football clubs. Players who formerly received an allowance for playing in order to cover out-of-pocket expenses - and it has been stated that it used to be pretty high - now receive anything up to 5s. a week in order to recompense them for the time they lose when training, the allowance they formerly received having been donated to patriotic funds. But they are given honorary tickets. I wish to know whether these honorary tickets are to be taxed? There are also trainers’ tickets.
– Trainers are admitted without payment.
– The Bill will affect clubs that have already been hard hit, many of them being faced with a deficit which some members of the committees of clubs will have to stand behind. I wish to know if the Commissioner will consider the exemption of honorary tickets?
– He must exempt honorary tickets.
– There are men who, commencing as players, have become officers of clubs, and, in theend they have received life members’ tickets, entitling them to admission to any ground. I understand that those tickets will not be taxed.
.- The tickets referred to. by the honorable member for Yarra will not be taxed. Similarly, the tickets of admission given to trainers, jockeys, caterers, and others connected with a race meeting will not he taxed.
– Nor will tickets given to distinguished visitors ?
– That is so.
.- I hope that the drafting is clear m regard to the taxation of annual subscriptions, which give the right to admission to race meetings and other entertainments. Provision is made in the case of a subscription covering in part a period for which the tax is not enforced, that there may be apportionment, but I am not sure that the clause enables the Commissioner to take into account, when a subscription ticket is used to obtain admission to subsequent entertainments, that the tax was assessed in the first instance on a lump sum.
– Obviously there will be only one assesment in connexion- with season tickets. A subscriber to the Melbourne Cricket Club has the right to enter the. grounds whenever he presents his ticket at the gates, but while one member may avail himself of this privilege frequently, another may never use it at all. What will the Commissioner have to do? Is he to estimate the value of the ticket to the holder,’ and prepare a scale accordingly? The members of some agricultural societies have the right of entrance to the show-grounds even when they are leased for the purpose of some entertainment not connected with the society.
– These cases are to be met with chiefly in the big cities.
– Yes; but in connexion with places whose takings are very big. It will, according to the Bill, have to be left to the Tax Commissioner to assess the value of the tickets.
Mr. Poynton.The Commissioner will make adjustments that will prevent injustice.
– He will tax the ticket only on the days that it is used.
– But he must make his assessments on the lump sum paid for the ticket.
– A member of the Melbourne Cricket Club, in paying for his ticket, pays for other things besides’ the admission to entertainments. He gets the right to play cricket on the ground, for instance.
– I understand that that is provided for.
Clause agreed to. Clause 12 -
Entertainments tax shall not be charged on payments for admission to any entertainment where the Commissioner is satisfied -
Motion (by Mr. Poynton) proposed - ,
That after the word “ philanthropic “ the word “ religious “ be inserted. - Mr. Groom. - A tax would not be collected on tickets for admission to an entertainment got up for a Repatriation Fund?
– Clause 13 provides that where the Commissioner is satisfied that the whole of the expenses of. an entertainment devoted to philanthropic or charitable purposes do not exceed 20 per cent, of the receipts, the entertainments tax paid in respect of it will be refunded. I think, however, that the Treasurer might exempt such entertainments without qualification.
– Or raise the percentage.
– Most of the institutions which, conduct entertainments of this kind have a hard struggle to make ends meet, but often refreshments have to be provided, and in such a case it is impossible to keep expenses down to 20 per cent. The entertainments to which I refer are carried on, not for a personal or private profit, but wholly . for philanthropic or charitable purposes.
.- I do not think that the amount expended in providing refreshments for entertainments such as the honorable member for Brisbane has spoken of would be regarded as part of the expenses of the entertainment.
– May I ask the honorable member to confine himself co the amendment?
– It seems to me that clauses 12 and 13 must be read together. Why should it be necessary to provide, as it is provided in paragraph c, that the entertainment is intended for the amusement of children?
.- While we desire to have the machinery of. this tax as perfect as possible, we wish to avoid inquisitorial administration. I have known entertainments to be got up in connexion with a convent to provide, perhaps, a playground. The children often try to assist by organizing separate entertainments to raise funds for, say, a stall. They may charge1d. for admission to their entertainment. In this way there is generous co-operation in philanthropic and religious effort. But under the clause the children would have to make application to the Commissionei for permission to hold their subsidiary entertainment. Is that intended? The clause says that the Commissioner must be satisfied ; that is, he must be satisfied in advance. It might happen, if persons in Western Australia, say, did not take the precaution of writing tothe Commissioner, that some one might, under another section, march into the convent to find out what they were doing.
– The Entertainments Tax Bill provides that no tickets of admission costing less than 7d. each shall be taxed.
– We must be careful not to provide too much administration for our ends. We are developing a system of continual supervision of everything. Not a day will pass without an entertainment of the class of which I have spoken being held somewhere in the Commonwealth. If the promoters have to apply to the Commissioner to carry on these entertainments there will be a good deal of annoyance and some congestion.
Amendment agreed to.
– I move -
That the words”without any charge on the takings for any expenses of the entertainment” in paragraph (a) be left out.
The amount of revenue to be derived from this source will be so small that I do not think the Treasurer ought to tax the efforts of those people who work so enthusiastically, for the various institutions.
– There is a possibility that in our anxiety to protect religious and philanthropic institutions we may go too far. Recently a lady in Adelaide received permission from the War Council to give an educational lecture for patriotic purposes. When the accounts were submitted they showed that the lecturer received £5 5s., and a gentleman £3 3s., and out of takings, amounting to nearly £30, only £2 was avilable for patriotic purposes. I do not think that any serious hardship will occur if the sub-clause is passed in its present form. In reply to the honorable member for Angas I may point out that the application will be made, not to the Commissionerin Melbourne, but to the deputy in each place, and the Act will be administered in such a way as to recognise all bond fide efforts.
.- I do not think that the Treasurer will lose any revenue by accepting this amendment. Today religious, charitable, and philanthropic institutions find it very hard to make both ends meet. It is difficult to raise any money at all for charitable purposes. The Institute for the Adult Deaf and Dumb some time ago held a bazaar in the Melbourne Town Hall for the purpose of raising funds for the erection of a building at Blackburn Farm. The whole of the work in connexion with the bazaar was voluntary. But the promoters had to pay rent for the hall and advertising expenses, and I think the expenses were over 20 per cent. of the takings. When a church is conducting any of these entertainments it has the advantage of the use of its own hall, rent free. In Victoria, if goods are to be sold, after 6 p.m., in connexion with any bazaar or fete, a permit has to be obtained from the Factories Department. Under this Bill another permit will be required from the Commissioner* of Taxation, and in addition to that, the organizing body, if the entertainment be for a charitable or philanthropic institution, will have to obtain a hall. It will be difficult for the expenses to be kept below 50 per cent.
– We can meet your objections by increasing the 20 per cent. in clause 13 to 50 per cent.
– I commend that suggestion to the Treasurer. Every honorable member knows the way in which women have to work for these bazaars and fetes, and that the rent of the hall is often one of the biggest items of expense. We have no right to impose taxation on those entertainments, practically the whole of the proceeds of which are devoted to religious or charitable purposes.
Mr. GREENE (Richmond) [12.381.- The amendment proposed by the honorable member for Brisbane will have an effect opposite to that which the mover desires, inasmuch as it will exempt only entertainments the gross proceeds of which are devoted to philanthropic or charitable purposes. If the paragraph is allowed to remain in its present form, and the percentage allowed in clause 13 is increased, the honorable member’s desires will be accomplished. Whilst I recognise that it is desirable to encourage efforts such as those referred to by the honorable member for Yarra, there is another class of entertainment which people organize ostensibly for charitable purposes, but which have no charity inthem except for the promoters.
– Allow this clause to pass,” and I will agree to increase the percentage in clause 13 from 20 per cent. to 50 per cent.
– That will meet the requirements of the honorable member for Brisbane, but I think we shall almost err in going that far, because there are not many genuine charitable efforts which absorb in expenses 50 per cent. of the takings. Of course, it sometimes happens that adverse weather conditions prevent the returns being as good as the promoters had anticipated.
.- It will be dangerous to make the allowable percentage of expenses too great. The great bulk of the proceeds of a charitable entertainment should go to charity, otherwise the effort ceases to be properly a charitable one. To increase the allowable expenses to 50 per cent. will permit of a very big slice being taken out of the proceeds of entertainments organized under the guise of charity. I should like to know how the Eight Hours Demonstration and similar efforts will fare under this Bill.. My impression is that, although the Eight Hours’ Day celebration in Melbourne is ostensibly for charitable purposes about 80 per cent. of the proceeds go into the coffers of the promoting organization.
– A big proportion is from the lottery. Only the charges for admission into the ground would be subject to the tax.
– What isto prevent the organization altering the nature of its demonstration in order to get the benefit of the allowance of 50 per cent.? The demonstration purports to be a charitable effort, but whether it will be so interpreted by the Commissioner, I cannot say. If we are to exempt the proceeds of certain efforts for religious and charitable purposes, the Committee should provide that only a minimum proportion of the takings is absorbed in expenses. An allowance of 50 per cent. is very great. If this clause has been framed on the basis of balance-sheets submitted by those who have conducted these efforts, the Committee is entitled to that information. We should not pass a clause like this without data, which would enable us to judge whether 20 per cent. or 50 per cent. is the more reasonable allowance.
– In view of the promise of the Treasurer to substitute 50 per cent. for 20 per cent. in clause 13, I ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
– Many of these entertainments for philanthropic and charitable purposes are a failure because of climatic conditions. In Queensland, where heavy thunderstorms suddenly come up, the promoters of such entertainments would be placed in a difficult position under the clause as it -stands.
– In such circumstances an entertainment might be run at a loss.
– Yes; but the tax would have to be collected. I ask the Treasurer to consider whether he cannot devise some means to meet such cases.
– Very well.
– One good purpose that this provision will serve is that it will prevent the getting up of entertainments unless they are likely to give a substantial return.
– I should like to support what has been said by the honorable member for Darling Downs by pointing out that in most of our taxation measures - in the Income Tax Act and the Land Tax Act, for instance - power is given to the Commissioner to remit the tax or refrain from collecting it in cases of hardship. The same sort of provision should be inserted in this Bill.
– That question should be dealt with on another clause.
Clause, as amended, agreed to.
Clause 13 -
Where the Commissioner is satisfied that the whole of the net proceeds of an entertainment are devoted to philanthropic or charitable purposes, and that the whole of the expenses of the entertainment do not exceed twenty per centum of the receipts, he shall repay to the proprietor the amount of the entertainments tax paid in respect of the entertainment.
Mr.FINLAYSON (Brisbane) [12.50]. - I have been trying to discover some way of meeting the difficulty to which the honorable member for Darling Downs and the honorable member for Maribyrnong have referred. I suggest that it could be met by providing, at the outset of this clause, that where the Commissioner shall be notified by the promoters of any entertainment proposed to be held under section 12, and “where the Commissioner is satisfied,” &c0 as the clause now reads, the tax shall not be collected. Under the clause as it stands, the tax must be paid, but if the Commissioner is satisfied that the expenses of the entertainment have not exceeded a certain percentage, a refund is to be made. That is an unnecessary piece of red-tape.
– What other check could we have?
– I suggest that the clause should provide that where the Commissioner is satisfied that any entertainment proposed to be held under clause 12 is being run for the purposes named in that section,’ then, after the balancesheet shall have been submitted to him, he shall assess the tax if any is to be paid. Under the Bill as it stands, the tax must be paid in any case, and .a refund may be granted. That seems to me to be unnecessary.’
– The tax is only to be paid after the balance-sheet has been prepared by the promoters of the entertainment, so that they will themselves know where they are.
– Under this clause the whole of the tax must be paid, and the Commissioner must be satisfied that the whole of the net proceeds have been devoted to philanthropic or charitable purposes before he can grant a refund. The matter could be got over better by regulation. Will the Treasurer ‘ agree to deal with it by regulation?
– I cannot agree to the amendment suggested by the honorable member. The tickets will be issued by the Department. It is in that way alone that we can keep any check over these entertainments. The adoption of the honorable member’s suggestion would lead to complications.
– I take it that the Treasurer means that his Department will issue, not the cards of admission to these entertainments, but an adhesive stamp to be attached to them.
– A stamp will be issued.
– Those of us who have had to do with the running of entertainments know that it is often an easy matter to get tickets out, but very difficult to get them back. It is often very hard to obtain the money for tickets that have been issued in that way. Many of the tickets sold for entertainments of this class will, no doubt, never be presented, but the tax will, nevertheless, have to be paid.’ In all probability, from 80 to 90 per cent, of this taxation will be derived from picture shows and theatres, race meetings, fetes, and carnivals, and not from the smaller entertainments such as tare held in local halls in the metropolis, as well as in country districts. As the result of experience, the Commissioner may find it’ desirable to ask for certain amendments of this measure. I agree with the proposal of the Treasurer to raise the percentage mentioned in this clause from 20 to 50 per cent. The honorable member for Wimmera, in his anxiety to attack trade unions, made a violent speech concerning the Eight Hours Anniversary Committee.
– The honorable member cannot rise to speak without making a personal .attack.
– The honorable member attacked trade unions and the Eight Hours Anniversary Committee regarding the way in which the Eight Hours carnival is conducted. The honorable member never misses an opportunity to refer to the subject. He has availed himself of this chance to attack the Eight Hours Anniversary Committee.
– And it wants some attacking. ‘
– The Eight Hours Anniversary Committee has done good work in trying to educate the people up to the necessity of a general recognition of the principle of eight hours. The people of Australia, as a whole, have not yet secured the recognition of that principle. A number of men year after year devote their time to- the work of the Committee, and because, when the carnival is being wound up, they receive a few shillings as payment for work on Eight Hours Day, the press and others never lose an opportunity to attack them.
– This must be a sore point with the honorable member.
– I was a member of the Eight Hours Anniversary Committee many years ago, but it is a sore point with me that the honorable member should attack men who are not here to defend themselves - that he should attack trade unions, which are doing their best to uplift mankind. The balance-sheets of the Eight Hours Anniversary Committee are open to public inspection. That cannot be said of every like concern. The expenses of the Committee, in some cases, may seem to be high, but an analysis of its balance-sheets will show that, in every case, its expenditure has been well justified.
Sitting suspended from 1 to 2.30 p.m.
Amendment (by Mr. Poynton) proposed -
That after the word “philanthropic” the word “ religious “ be inserted.
.- Clause 12 may, I think, affect agricultural shows, and any doubt on the matter ought to be cleared up.
– Clause 12 has been passed.
– I was not aware of that; but I should like to point out that agricultural shows do not make profits in the ordinary sense of the term, because all revenue over expenditure is put into subsequent shows, which are directed to educational and scientific objects.
– I think that paragraph b of clause 12 covers the point raised by the honorable member.
– I should think so; but I take it that if the point is not clear the Minister will make it so.
– I shall.
– We are all anxious to encourage production in every possible way, and some regard ought to be paid to such exhibitions as those arranged by the Australian Natives Association. They are clearly not for the purpose of gain or profit, but with a view to demonstrating the resources of Australia.
– I take it that the same provision covers such exhibitions.
Amendment agreed to.
– I should now like to submit the amendment of which I spoke, substituting an expenses allowance of 50 per cent, for the 20 per cent, provided in the clause.
.- An allowance of 50 per cent, is too large for all circumstances, and I suggest that we should provide that the whole of the expenses of the entertainments shall not exceed 20 per cent. , except in case of bad weather or other adverse circumstances, when they may reach 50 per cent. Our only object is to provide for cases where the weather is so bad that the expenses take up the great portion of the total receipts. If we allow 50 per cent., no matter how good the conditions may be, we may permit such, undertakings to become a source of profit to private individuals.
– Under the circumstances I think that, perhaps, it would be as well to leave the 20 per cent., and insert a proviso to the effect that if the Commissioner is satisfied that owing to “ adverse climatic conditions “ the expenses of an entertainment for religious or charitable purposes exceed 50 per cent, of the receipts, he shall return to the proprietors the amount of the entertainments tax.
– My suggestion is for “ bad weather or other adverse conditions.”
– I shall not move my amendment because of an undertaking by the Treasurer that the allowance shall be 50 per cent., not in exceptional circumstances, but as the general rule; and I am sure the honorable gentleman does not wish to go back on his promise.
– -I understood that that was for a specific purpose.
– I was advocating the absolute freedom of these particular entertainments from taxation of any kind, but to meet the wishes of the Treasurer, and not to disturb the revenue too much, I agreed to accept a proposal for 50 per cent. .
Amendment (by Mr. Poynton) proposed -
That the word “ twenty “ be left out with a view to insert in lieu thereof the word “ fifty.”
.- When speaking previously I instanced the Eight Hours Art Union in Victoria. The tickets for this, which is claimed to be a true art union, are sold broadcast in all parts of the Commonwealth, and not only give chances for prizes, but admit the holders to the demonstration. The receipts for that art union from all sources in 1915, amounted to £5,912, which, after deducting £300 temporarily drawn from suspense account, and £57 earned by way of advertisements on the tickets, meant a net revenue of £5,555. The distributions to charities, after deducting expenses and salaries, cost of luncheon to delegates, clerical assistance, bands, office expenses and so forth, amounted to £923,’ or only about 16 per cent. The art union is supposed to be purely for the benefit of charities and under the clause it will be possible for the promoters to claim exemption from taxation on the whole of the admission tickets sold. I believe that the feeling of the Committee is in favour of raising the allowance to 50 per cent., but, before that is done, the Treasurer should be able to give us the data on which he fixed it at 20 per cent. By raising the allowance to 50 per cent, we shall open the door to’ abuse, and enable people, under the guise of charity, to use such organizations for the purpose of providing billets and enriching themselves. The honorable member for Yarra took exception to my reference to this particular undertaking, and, as usual, defended it because of some association with trade unions. I am not surprised, however, at such championship, because honorable members in the Opposition corner have to obey instructions on all occasions; no matter what the case may be, if any of their own institutions, are affected, they must be defended. Is the honorable member satisfied that the sort of. thing I have instanced shall continue under the guise of charity ?
– I am assured by those who will have to administer the measure that the art union to which the honorable member has referred does not come under this provision, but even if it did, on hia own showing it would be a big improvement on what was contributed on the last occasion.
– My point is that they may increase the expenses to 50 , per cent.
– On the last occasion the expenses did not exceed 16 per cent. If they had been increased to 50 per cent., as the honorable member indicates might happen, they would have been subject to the tax. But in any case the institution does not come under this provision.
.- The honorable member does not lose any opportunity of attacking the working man. He is always anxious to get his knife into the working classes, but he need not be anxious, as I understand the State AttorneyGeneral has decided that the art union will not be permitted again, be- cause of the efforts of his friends in the Liberal party, which has always been anxious to crush the organization that promoted it. I have no doubt that they will never succeed in crushing that organization. Every time action is taken in that direction, the workers strive harder to improve their position. The expenses in connexion with the art union referred to may appear to be very high, but I believe that as much as 30 per cent, commission had to be paid on the sale of some of the tickets. Speaking from memory, I think the boys who sell the tickets in the streets of Melbourne are allowed about 15 per cent. The man who. hands out the tickets to the boys gets an extra 5 per cent’, to cover his risk. Agents in the country districts are paid 25 per cent., and agents in other States are paid 30 per cent. Honorable members in their desire to injure the trade unions point out one side of the picture only. They take very good care not to let the people know that the country barber or the country hotelkeeper, or others, are paid about 25 per cent, for the sale of these art union tickets. All the advertising is paid for by the central committee. The honorable member is interested in several country newspapers which obtain high prices for those advertisements.
– That statement is as correct as most of the statements made by the honorable member.
– I understood that the honorable member owned several newspapers. I know that he was one of a number of country newspaper owners who waited on me when I was Minister for Trade and Customs in connexion with matters in which they were interested, and I understood that he was largely interested in certain newspapers.
– What has all this to do with the amendment?
– I merely rose to reply to the honorable member, who is always anxious to attack anything in connexion with the Trades Hall.
– The point is whether it is worth while running the art union when the result was so small, so far as the charities were concerned.
– I know that the point taken by the honorable member for Wimmera was thatonly 16 per cent. of the gross takings went to charity, but the honorable member did not show where the rest of the money went to. He did not show that the biggest percentage was spent in advertising and in paying commission on the selling of tickets. The 50 per cent. agreed to by the Treasurer is a fair compromise, but as I have expressed the opinion privately to the Treasurer, I think that it will cost more to collect the tax from this source than will be actually received. I do not anticipate that the revenue from the very small percentage of entertainments that come under this clause will be more than £4,000 or £5,000 per annum. If this irritating taxation could be wiped out it would be a wise step on the part of. the Treasurer. If during the working of the measure the Treasurer finds that what I have said is true, I hope that he will bring down an amendment giving the Commissioner power to make certain exemptions, at the same time notifying Parliament as to the class of entertainments so dealt with.
– It is , absolutely necessary that there should be some check on the abuse of the word “ charity,” which is going on on all sides. The art-union referred to by the honorable member for Wimmera is not the only case. Entertainments are held for which ‘high prices for admission are charged, but from which there is but a small amount derived for charity. . If one is privileged to look at the expenses he finds that nearly all the money is mopped up by such items as refreshments, hire of costumes, hire of wigs, and so on. It would be well to make provision, either in the Bill or by regulation, to compel every one to pay the maximum amount of the tax until a duly audited balance-sheet is furnished when the Commissioner may make a rebate if it be necessary to do so.
– The Bill makes that provision.
Amendment agreed to.
Amendment (by Mr. Poynton) agreed to -
That the following words be added to the clause : -
Provided that when the Commissioner is satisfied that, owing to adverse climatic conditions, the expenses of an entertainment for philanthropic, religious, or charitable purposes in respect of which payments for admission have been made exceed 50 per centum of the receipts, the Commissioner shall repay to the proprietor the amount of the entertainments tax paid in respect to the entertainment.
Clause, as amended, agreed to.
Clause 14 (Power to officer to enter place of entertainment).
.- This clause applies to places of entertainment which may be exempted under clause 12; that is, they have been exempted by the Commissioner as having the whole of the proceeds devoted to charitable or religious purposes, yet the inspector may enter. In my opinion, the entry should be limited to entertainments liable to be taxed. The clause should read -
Any officer of the Commissioner authorized by him for the purpose may enter any place of entertainment to which section 12 does not apply.
– I will have that matter looked into.
Clause agreed to.
Clause 15 agreed to.
Clause 16 (Forging, &c, die or stamp).
.- Yesterday we were dealing with a Bill in which the maximum penalty for inciting to kill was six months, yet here we have fourteen years’ imprisonment as the, maximum penalty for forging a die or stamp. Apparently the object of the Government yesterday was to have the members of the Industrial Workers of the World tried by justices of the peace instead of making the offence an indictable one.
– Order !
– This is an extraordinary penalty that is proposed.
– It relates to a very serious form of forgery.
– How long could it go before being found out] I read portions of the Crimes Act yesterday. The penalties under that measure are nothing approaching the penalties provided in this clause.
– This is in the English Act.
– If the Treasurer says that it is absolutely necessary to retain this penalty I am prepared to vote with him, but it seems to me somewhat “ over the fence.”
.- The mistake in this Bill is that there are too many separate offences grouped under the one penal provision. There are six subclauses with great disparity between them as regards the enormity of the offence dealt with. Apparently the proposal is to leave it absolutelyto the discretion of theJudge in every case to say what penalty shall be, imposed. The reason why there are so many limitations as to sentences in our Statutes is that we distrust the wisdom even of Judges in regard to the imposition of sentences. In Great Britain there have been Judges who have inflicted sentences of fifteen years’ imprisonment for offences for which other Judges have not imposed sentences of more than twelve months’ imprisonment. The last’ offence provided for is the fraudulent gumming, sticking, or attaching to each other by any process whatever the pieces of a stamp or stamped ticket which has been divided or cut. Therefore, if a youngster fifteen years of age gummed together the pieces of a ticket to get admission into a subordinate entertainment, he would be guilty of an indictable offence, and could be sentenced to imprisonment for fourteen years if the Judge trying the case were foolish enough to impose such a penalty. The Treasurer says that he has been copying the English legislation in this matter, but I would point out that a good many of the faults in our war legislation are due to the slavish copying of the English law. Thus we have adopted the moratorium laws of the Old Country holus bolus, without regard to the action of the States. We ought not to copy English legislation without regard to our local conditions. However, as the Bill is to go to another place, I ask Ministers to consider whether they cannot provide a lower maximum penalty for some of the minor offences that may be committed under it.
Clause agreed to.
Clauses 17 to 21 agreed to.
.- A taxpayer who considers himself injured by the land tax - and I think there is the same provision with regard to the income tax - has the right to go before the Commissioner, and state his case to him. To give taxpayers under this Bill a similar right, I think weshould insert in it some provision such as this -
In any case where it is shown to the satisfaction of the Commissioner that a taxpayer liable to pay the tax has suffered such a loss that the exaction of the full amount of the tax will entail serious hardship, the Commissioner may release such taxpayer, wholly or in part, from his liability.
I take that provision from the land tax legislation.
– The person who conducts an entertainment is liable only for the tax that he collects.
– Suppose he were called on for more?
– That could not be done.
– The real taxpayers are the purchasers of the tickets.
Title agreed to.
Bill reported with amendments.
That the Bill be recommitted for the reconsideration of clause 2.
In Committee (Recommittal) :
Clause 2 - “Payment on admission” includes any payment made by a person who, having been admitted to one part of a place of entertainment, is subsequently admitted to another part
Amendment (by Mr. Poynton) proposed -
That after the word “ person “ the following words be inserted: - “as a booking fee for ‘admission or by a person.”
– I presume that arrangements will be made for the distribution of stamps or stamped tickets through the Post-Office or Customs Office in outlying places ?
– Through the PostOffice.
– What form is the stamp to take?
– I cannot say now.
– I presume that plenty of notification will be given before the Bill comes into operation, so that its provisions may work smoothly ?
– The Bill will take effect after proclamation.
– By that time, no doubt, regulations will have been made for the carrying out of its provisions?
Amendment agreed to.
Clause, as further amended, agreed to.
Bill reported with a further amendment.
Standing Orders suspended, and reports adopted.
Motion (by Mr. Poynton) proposed -
That this Bill be now read a third time.
– I desire to express my disapproval of the Bill. I am opposed to the Federal Parliament invading an arena of taxation which it was not intended that it should enter. The framers of the Constitution did not intend that this Parliament should impose taxation on every source of revenue, regardless of the fact that our Constitution is a Federal one, and that the States, as well as the Commonwealth, have financial obligations. The Bill provides for the taxing by two authorities - the Commonwealth and the States - of the same source of revenue. That is very undesirable. From all oyer the country come complaints of this double taxation.
– The Bill under discussion is merely a machinery Bill for the collection of a tax. The right honorable member should have made his remarks on the Tax Bill.
– The Bill is one to provide machinery, and we shall have two machines - the Commonwealth machine and the State . machine - doing the same work. The collection of the tax will cost a great deal. I object to the placing of a double burden on the people. The tax was originally proposed by the last Government, but this Government is almost identical with its predecessor. It is in consonance with the policy of the Labour party to do all that it can to destroy the Governments of the , States, and thus lose no opportunity to bring about Unification.
– I am sorry that I cannot subscribe to the tenets laid down by. the right honorable member for Swan.
– You are a Unificationist, I suppose.
– I take the position that in war time this National Government must have first place in every method of taxation.
– This tax is to continue after the war.
– We are dealing now with war time: and I think it would be better if the Stateskept off this grass altogether.
– It is their grass, not ours.
– I am afraid the Commonwealth must have some grass, after all, particularly in war time. The States have invaded every field of taxation except Customs.
– They had a land tax before Federation.
– Yes, and they have given two or three turns to the screw since Federation. I agree with the right honorable member for Swan that this double-banking of taxation must come to an end at some point. It cannot go on indefinitely; but I think this tax is an unfortunate one to choose for making a fight. If possible, I would rather see a clear line of demarcation agreed upon, so that our respective spheres of taxation may be adjusted scientifically. But in time of war. anything which savours of luxury is a proper subject for taxation for war purposes. I hope the time will soon come when we shall readjust altogether our ideas of taxation. The sooner we reach that day, the better; but, until that time, this National Government is entitled to tax any luxury for the purposes of the war, and not for the purposes of the ordinary civil administration of the country. At the same time, I agree with the right honorable member for Swan that if the double-banking of taxation proceeds as at present it will bankrupt both the States and the. Commonwealth. As to the suggestion that I am aUnificationist, I must let my record be my answer. Ever since I have been in the Federal sphere I have stood for reasonable State rights; and I think State rights rest on the safest and surest foundations when they recognise our national rights, and the supremacy of the National Government, particularly in the strenuous days of war.
.- I quite agree with the Leader of the Opposition that we must use every reasonable source of taxation in war time, and, of course, we cannot quibble at the amount of the sacrifices we are called upon to make, considering the tremendous pressure brought to bear on the men who are gallantly fighting for us in the trenches. In comparison with what they are doing, our little abnegations are not worth talking about. At the same time, in raising taxation it is incumbent upon us to raise it in the manner most productive to the State, most uniform, requiring the least machinery, and in the manner closest to economic principles. I do think that, in the taxation of entertainments, we ought not to be duplicating the machinery of the States. In America a meeting is held periodically to arrange between the State and the Federal authority what taxes are to be imposed by them respectively; for, while it is competent for both Congress and the State Legislatures to impose any direct tax, yet in matters of minor taxation they realize the folly of having two sets of machinery to produce the same result, and two sets of taxes on the same individual under different laws. I am glad that, after the slumberous composure of the last fifteen years, the Prime Minister and the Premiers are awaking to the importance of some measure of Unification in connexion with the direct taxation of land, electoral laws, and also income tax. This policy was recommended by many of us in the early days of Federation. In1901 I moved in regard tosome of these matters, andI find now an awakening to their importance. In the course of the debate in 1910, attention was drawn to the evil of having two methods of valuation for income-taxpurposes, and two sets of laws applicable to the same individual. It is for that reason that the right honorable member for Swan referred to the fact that it was expected that, whilst we would not surrender our powers of direct taxation, in minor matters some arrangement should be arrived at as to the exercise of our rights. It would be even possible to arrange that the total amount of the taxation should be collected for both authorities by the one set of machinery. I hope that some Administration will prove itself worthy of the good name that should attach to a wise Administration, by looking into these matters, which, though they do not pay for the moment, from a party point of view, are of great importance to the taxpayers of the States.
Question resolved in the affirmative.
Bill read a third time.
In Committee of Ways and Means:
.- I move-
That a tax be imposed on incomes derived from sources in Australia at the following rates, namely: -
Rate of Tax upon Income Derived from Personal Exertion.
The average rate of tax per pound sterling for so much of the taxable income as does not exceed £7,600 may be calculated from the following formula:. -
R = average rate of tax in pence per pound sterling.
I = taxable income in pounds sterling.
B = average rate of tax in pence per pound sterling.
I = taxable income in pounds sterling.
The rate of tax on each additional pound shall increase continuously with the increase of the taxable value of the income in a curve of the second degree in such a manner that the increment of tax for one pound increase of taxable income shall be - at a taxable income of £546, 11.713 pence, at a taxable income of £600, 12.768 pence, at a taxable income of £700, 14.672 pence, at a taxable income of £800, 16.512 pence, at a taxable income of £900, 18.288 pence, at a taxable income of £1,000, 20.000 pence, at a taxable income of £1,500, 27.600 pence, at a taxable income of £2,000, 331600 pence,
For so much of taxable value as does not exceed £6,500 the rate of tax on each additional pound shall increase continuously with the increase of the taxable value of the income in a curve of the third degree in such a manner that the increment of tax for one pound increase of taxable income shall be - at a taxable income of £2,000, 33.600 pence, at a taxable income of £2,500, 40.000 pence, at a taxable income of £3,000, 45.300 pence, at a taxable income of £3,500, 49.600 pence, at a taxable income of £4,000, 53.000 pence, at a taxable income of £4,500, 55.600 pence, at a taxable income of £5,000, 57.500 pence, at a taxable income of £5,500, 58.800 pence, at a taxable income of £6,000, 59.600 pence, at a taxable income of £6,500, 60.000 pence.
For every pound sterling of taxable income in excess of £6,500. the rate of tax shall be sixty pence.
Bates of Tax in respect of Taxable Income Derived Partly from Personal Exertion and Partly from Property.
In addition to the tax payable under the pre ceding provisions, there shall be payable, in the case of incomes in respect of which the tax is calculated under the foregoing provisions, an additional tax equal to 25 per centum of the amount of the tax so calculated.
Tax Payable in Certain Cases by Persons not Married and having no Dependants.
Notwithstanding anything contained in the preceding provisions, , the tax payable by any person who -
The Bill is framed on the lines of the Act which operated for the purpose of the first income tax assessment in the financial year 1915-16. The differences between the two measures are: - (1) The increase in the rates by 25 per cent.;
In 1915-16 the income tax produced £3,933,471. For 1916-17 Mr. Higgs estimated to receive £3,250,000, and from the 25 per cent. increase £1,000,000, making the total £4,250,000. I do not anticipate receiving £1,000,000 from the 25 per cent. increase, because a quarter of £3,250,000 is only £850,000 in round figures. I am informed by the Department that the reduction in the Estimates is caused by adjustments made in assessments and the general decrease in profits from business. So that we do not anticipate to receive as much from the income tax this year as was received last year.
– Does the honorable gentleman say that the difference of about £700,000 between last year’s return and this year’s estimate will be made good by the increase of 25 per cent. ?
– The Department estimates that the increase of 25 per cent. will bring in an additional £850,000. On the top of that I anticipate securing an additional £150,000 by the abolition of the exemption in respect of all incomes of £500 and over.
– Will the exemption of £156 disappear in the case of incomes of £500 and over?
– Yes, on such incomes there will be no exemptions.
– With the exception of the allowance in respect of children.
– The allowance for every child under this Bill is £26, as against £13 under the existing Act. On incomes of £500 and over, from either personal exertion or from property, there will be no exemption. I have here a few examples’ of the difference in the tax which will be paid under this Bill as compared with what is payable under the existing law. On an income of £400 derived from personal exertion, a tax of £3 19s. 7d. would have been paid under the old rate, whereas under this rate the tax will be £7 19s. 7d. On an income of £400 derived from property the tax was £6 18s. 2d., but under the new rate it will be £9 2s. 8d. On an income of £500 from personal exertion the tax under the old rate was £6 3s. ; under the new rate the tax payable will be £12 13s. 3d.
– This is a pretty big 25 per cent. increase!
– The increase in respect of the tax on an income of £500 from property works out in the same proportion. On an income of £600 per annum from personal exertion, the tax under the old rate was £9 8s. 9d. ; under this rate it will be £16 8s.1d.
– That is without allowing for any exemption.
– In these illustrations I am not taking into account the allowance in respect of children. Assuming a taxpayer has no children, these are the amounts he will have to pay under the rates now proposed.
– The Treasurer said that he had increased the rate of income tax by only about 25 per cent., whereas it would seem that he has increased it by about 80 per cent. in some cases.
– On an income of £800 from personal exertion, the tax under the old rate was £1711s.10d. Under the new rate it will be£25.
– The Treasurer surely does not say that is a 25 per cent. increase ?
– The increase is one of 25 per cent. It is the abolition of the exemption that accounts for the increase over and above the percentage.
– Then why say this is an increase of 25 per cent., when it would appear to be an increase of anything from 50 per cent. to 100 per cent. ?
– Apart from the abolition of the exemption it is an increase of only 25 per cent. An income of £1,000 from personal exertion under the old rate paid a tax of £27 17s. 3d. Under this rate it will pay £35 3s.1d. On an income of £1,500. from personal exertion, the tax formerly payable was. £53 18s.1d Under the new rate it will be £67 7s. 7d. On an income of £2,000 from personal exertion, the tax under the old rate was £87 10s. ; under the new rate it will be £109 7s. 6d. It will be observed that the increase in the tax becomes proportionately less as the amount of income rises. This is due to the fact that under the old law the exemption disappeared whenan income reached £1,020 per annum. It is the abolition of the exemption on all incomes of £500 and over that is responsible for the increased payments in respect of the lower incomes. On an income of £8,000 from personal exertion a tax of £1,097 10s. was payable; but under this Bill the tax payable will be £1,371 17s. 6d.
– Whom does the Treasurer blame for this ? Does he blame the mathematical curve?
– These are not my figures. They are from a scale I have had prepared, showing the taxation that will be payable on all incomes, from the lowest grade upwards. Under this Bill, the income of a person without dependants becomes taxable when it reaches £100 per annum; but there is a gradually disappearing exemption, which wholly disappears when an income of £500 is reached. Under the old law in respect of a person without dependants no tax was payable on an income of £156 from personal exertion. Under this Bill, however, a person without dependants earning such an income will pay £11s. 3d. Under the old law, l1s. 7d. would have been paid on an income of £200 per annum from personal exertion; under this law, a tax of £2 5s. 2d. will be paid. On an income of £300, a tax of £2 2s. 6d. would have been paid under the old law, but under this Bill the tax payable will be £5 2s. 6d. On an income of £400 under the old law, a tax of £3 19s. 7d. would have been paid by a person without dependants; under this law, the tax will be £9 7s. 6d. The increased payments are brought about partly by the abolition of the exemption in respect of all incomes of £500 and over, and partly by the increase of 25 per cent. on the flat rate applying to all incomes.
– What will be the position in regard to wartime profits?
– I anticipate dealing presently with the war-time profits taxation measure. In the Income Tax Assessment Bill, I am providing that the amount paid by way of income tax shall be deducted from war-time profits.
– The Treasurer anticipated losing about £700,000, as compared with the returns from 1915-16.
– The reduced return estimated to be received is due to several causes. For instance, it has been necessary to re-adjust certain assessments as the result of certain decisions of the Court. I am particularly anxious that this Bill and the Income Tax Assessment Bill should be passed before we adjourn for the Christmas holidays.
– I do not think the Treasurer will get this Bill as he is presenting it. It is a burglarious attempt.
– I do not think it can be so regarded. The Department is particularly anxious that this Bill should be passed without delay. I regret that time will not permit a much simpler form of taxation, but I hope that in the future either myself or another Treasurer will have the benefit of some arrangement between the States and the Commonwealth to insure uniformity of method. This would be a great saving, not only to the Commonwealth, but to the taxpayer, inasmuch as, at the present time, owing to the complex nature of the forms, it is necessary to engage an expert to make up the returns. However, there is to be. a conference early next year between representatives of the Commonwealth and the States with a view to arriving at some uniform basis for the future. There is no necessity, in my opinion, to have so many duplications as there are to-day. The ordinary taxpayer, when he makes out his return for the Commonwealth, ought to know that at the same time he has made out a return that will apply to the State.
– The exemptions are not the same, and they ought to be.
– They cannot be with the present form of taxation.
– I confess that the Treasurer has me completely “knocked out” with his curves and his schedule. However scientifically the honorable gentleman may express himself, and however precise may be his mathematics, we have the result here in plain cold figures; and it seems to me, looking atthe figures, that we have here a simple device to begin on the lower rungs of this tax, and make them as high as possible while leaving the others at, perhaps, a moderate rate. We have been led to believe that what was proposed was an increase of 25 per cent. in the income tax; but it turns out that, in some of its bearings, the increase amounts to nearly 100 per cent. Let us take the case already presented, namely, that of a man with £500 a year from personal exertion. This is the man who, with his fixed income, is to-day in many ways hard put to it, considering the social and other obligations laid upon him. Such a man, who feels the pinch, perhaps, as much as any in the community, will pay under the Bill £12 13s. in taxation as compared with £6 3s. previously - an increase of over 100 per cent. That, I venture to say, is a tax that nobody ever dreamed would be attempted when the Government made their announcement to the House. Surely, under the circumstances, some alteration should be made. We ought not topretend that we are imposing an increase of 25 per cent. when, as a matter of fact, the increase is from 75 per cent. to 100 per cent. I suggest to the Treasurer that he should do away with all this rigmarole of figures, wipe out his curves, and let Mr. Knibbs, as a sort of recreation, go over the matter during the Christmas holidays. The Treasurer could, I think, by a simple enacting clause, increase the taxation by 25 per cent. in the way promised. This ought not to prove by any means a difficult matter; and all the provisions about exemptions and so forth might be left to a future period, when we are reviewing the finances as a whole. This is not the time to deal with such a question exhaustively, and, further, this has come on us all as a surprise.
– I thought you all desired an increase in the income tax.
– Yes, but we do not desire to have incomes confiscated entirely. Men have to live, even in war time.
– A man with £500 a year will pay £6 more per annum than he has done hitherto.
– That is an easy way of putting it, but would not the proper way be to say that such a man is called upon to pay double what he paid before? In view of what it means in revenue, I question whether it is worth while getting at these men, who find themselves heavily taxed all round now. It all comes from the Treasurer slavishly following his predecessor, that Svengali who covered things up in his own way, and hypnotized us until we did not know where we were.
– If it is as you say, I should like to have time to look into the matter.
– Even the exTreasurer desires time to look into the matter ; and I think the better way would be to make some simple proposal, such as I have suggested.
– I feel myself somewhat in the rdle of an eminent consulting surgeon brought in to deal with a patient in extremis. The operation has been successful, but the patient is-
– Is about to die. I stand here as a humble but stalwart champion of this method of taxation. The calculation is scientific, equitable, and, by general consent, effective.
– You are really responsible for it; you began this curving business !
– In order to deal with the third degree in sub-section c, there is required an introduction to take the form of almost - well, I shall not say an Odyssey - but it requires a suitable introduction, whereas my colleague has broken it to the Committee too abruptly. The two sets of figures have to be read in connexion, and the fatal mistake of the Treasurer was in attempting to deal with them singly. I am not going to express any astonishment at the results that are allegedly declared by this method; all I say is - and no one can deny it - that the basis is scientific. By mathematical, infinitesimal, and equitable gradations, each £1 of additional income bears its fair additional increment of taxation. If the result prove unsatisfactory, that would appear to me to be ample proof that the taxpayer has unaccountably found himseli in the wrong place; if he were lower down in the schedule, the tax would press on him less hardly. The intention was to increase the taxation by 25 per cent. But the Treasurer, as he pointed out in his second-reading speech, decided to remove certain exemptions, and that has caused the trouble. I have no doubt the Treasurer will consider what has been said, and, if possible, proceed with the Assessment Bill while he and his officers have an opportunity to generally consider the position.
– Does that mean that I have to withdraw this Bill ?
– No, no. If it is found that the amount of money the Treasurer requires cannot be reduced, then, of course, it cannot be reduced. It is quite impossible to make an amendment such as the Leader of the Opposition has suggested, unless and until there has been an opportunity to find precisely what the effect would be on the Treasury; and it cannot be expected that this could be calculated at a moment’s notice. The amendment might, perhaps, make a difference of £100,000 in the revenue.
– It would mean a difference of £120,000.
– It is evident that the revenue cannot stand that. If an additional 25 per cent., with the exemptions removed, gives a certain revenue, and if to restore the exemptions means a loss of revenue to the extent of £120,000, perhaps the loss may be made up by increasing the income tax by 27½ per cent. I do not know whether that would be the case, but, no doubt, there must be an increment which would give an equivalent return. The Treasurer must have the money, and the question is how to get it with the least possible hardship on the community generally. I agree that people with incomes of £500 may already have burdens on them which are very difficult to bear, and that we have no right . to impose a heavier proportion of the tax on them than on the man with £50,000, but if we lessen the burden on the men with incomes of £500, we must place the burden somewhere else. That means that we must steepen. the curve, so that instead of the increase being 25 . per cent. on all incomes it may be 26 per cent. or 27 per cent. The Treasurer himself will indicate which course he prefers to follow: whether he will go on with the Assessment Bill now, and take the opportunity of reviewing the taxing measure at a later hour, or whether he proposes to deal with the latter now.
Mr.BOYD (Henty) [4.2].- When the Bill was passed last year just before the Christmas holidays, it was passed on the same attitude that the Prime Minister has adopted to-day. He admitted that he did not understand anything about’ it, but the House caught the infection of his genial laughter, and the Bill was allowed to go through without a solitary member knowing the ABC of it. Here, again, not a solitary member of this House can explain the schedule before us to-day. The position nowadays is that an officer of the Treasury, or a statistical expert of the Commonwealth, dove-tails some scheme for taxation drawn from the higher mathematics, and puts it before Parliament in the shape of a Bill, and when honorable members go to their constituencies they cannot explain its meaning. On several occasions I was asked by some of my constituents to explain the schedule of the last Bill, but I said that I would take home to my children the curve and the problem contained in it, and see whether they could work it out, for I could not do so. My constituents said to me, “ Then why did you allow a Bill like this to go through?” I candidly confessed that it was because I did not understand it, and that I had been told that it was a scientific, accurate, and equitable schedule. I am told that the schedule now before us is also scientific, accurate, and equitable.
– So it is.
– Well, I deny that it is. The man who says that this schedule is scientific, accurate, and equitable should be able to prove that it is. When the Prime Minister was asked to explain the schedule in the last Bill, he smiled broadly. But that was no explanation.
– One of my constituents, who is an expert mathematician, insists that the schedule is not accurate.
– If we wish to get a solution of the difficulty, let the right honorable gentlemen bring their two experts here to settle it between them ; we will all be dead by the time the explanation is given.
– What has the taxpayer got to do with the system of assessing the tax?
– The principal thing is that we should know what we have to pay. When I get a notification from my banker that my overdraft is so much, and that he wants me to wipe it out, I know what I have to pay. When the PostmasterGeneral charges me for telephone calls, many of which I know I have never used,I simply pay up. As representatives of the people we ought to understand clearly the meaning of these formula?. I reflect on no honorable member when I say that there are not two men in the House who could explain them.- When taxation is imposed is it not reasonable that the people who have to pay it should have some enlightenment upon it from those who have passed the legislation?
– How could we have a properly graduated tax without these formulas ?
– I do not care twopence about a graduated scale, so long as I can understand it, and so long as I am assured that it is all right ; but though we were told that the proposal was to place a 25 per cent. super-tax on the existing income tax, we find it works out that the man with an income of £500 pays an increase of over 100 per cent.
– Because he paid too little previously.
– That is a different proposition.
– It is accounted for by the removal of the deduction.
– A thousand reasons may account for it, but if the Treasurer must have increased revenue, and an increase of 25 per cent. will not give it, then let the Treasurer, as the Prime Minister suggests, make the increase 26 per cent., or even 30 per cent., so as to secure the requisite revenue instead of putting before honorable members a lot of Egyptian hieroglyphics such as we have in front of us to-day, and which we are asked to agree to, and later on to explain to our constituents. It will not only put the individual honorable member in a ridiculous position, it will also make Parliament appear stupid. I do not know any State that has a scheme of income taxation similar to this. If we take the rough-and-ready method adopted in Victoria, where the graduated scale goes up in £100 stages, it is easily understood; but where we impose a graduated rise of (3 + 1 over 181.058) pence, what is the variation in the scale from £400 to £500 ? Will the Prime Minister work it out for me?
– It is only the second formula that is difficult.
– Can the Prime Minister explain this -
The average rate of tax per pound sterling for so much of the taxable income as does not exceed £,7,600 may be calculated from the following formula: -
R = average rate of tax in pence per pound sterling.
I = taxable income in pounds sterling.
– That is perfectly simple.
– It is as clear as mud.
– No. The rate of tax is to be per £1 as 3d. plus 3 over 800 multiplied by the income. That will give the result in pence. That is quite a simple problem. The honorable member will never get out of the lowest form unless he “ bucks up.”
– The Prime Minister got out ofthe form he was in last year when he shifted this proposition on to the Treasurer. It was evidently too steep for him. I would like to know how he got on in his last examination. But, seriously, I ask him and the Treasurer to consider the question of placing before honorable members the principle of the tax in such a way that every one can understand it; not only every honorable member, but also every person who has to pay the tax, so that he may understand what he has to pay, and be able to calculate it for himself. If I am sent up for trial, and the Court proceedings are conducted in the Greek or Dutch language, when I, as a Britisher, think that I ought to be tried in the English language, would I be satisfied with the verdict - unless I was let off? We are quite prepared to pay the amount of taxation that the Governmenr say it is necessary to raise in this war time, but the scheme laid before Parliament should be clear and distinct, and honorable members should know what they are doing. Furthermore, it should be the work of the Government, and nor. that of an expert in a Department, to propound schemes of this sort. Not one honorable member can understand the scheme before us to-day.
.- It is unfortunate that we have not before us a statement showing the operation of the proposed tax on varying; amounts. It was understood by honorable . members that the existing tax was to be increased by 25 per cent., but, according to the examples given to-day, instead of the increase being 25 per cent., it is over 100 per cent. on certain incomes. On an income of £500 the increase in taxation is about 100 per cent., and on an income of £600 between 75 and 80 per cent., because of the alteration that is proposed in the exemption. Previously, all incomes below £156 were exempt from taxation, but now the income of a person who has no dependants is not exempt if it exceeds £100. If it is fair that the man without dependants, getting a salary of £100 a year, should pay £1, it is equally fair that a man getting £156 should pay a like amount; but, in my opinion, neither salary should be taxed. I do not agree with the honorable member for Wannon that the exemption should be lowered so far as small salaries are. concerned.
– Does the honorable member regard £500 a year as a small’ salary ?
– I am speaking of men getting £156 or less.
– It was the Treasurer of the Government of which the honorable member was a Minister that proposed the lowering of the exemption.
– Then it is for him to defend it. I left the Cabinet before the taxation proposals were considered.
– A man drawing a salary of £150 a year will, underthese proposals, have to pay a tax of £11s. 3d.
– We should have a clearer statement of the incidence of the proposed taxation. If the Customs Department tried to deal with the public in the way here proposed, its’ charges would not be understood by the business community, who comprise, as a rule, the best educated persons in the country. Without the assistance of a ready reckoner, such as was issued by the Income Tax Department last year, most persons cannot know what they will have to pay.
– Parliament has always clamoured for a scientific graduation.
– We are given to understand that the method proposed is mathematically correct, but I doubt if even members who have had a University education can explain it. Unfortunately for them, not many of my constituents are called upon to pay income tax, and, therefore, I have never been asked to explain the methods of the Income Tax Department. If the suggestion of the honorable member for Wannon be carried out, and the exemption lowered, they will be taxed. The honorable member for Wannon said that the members of the Liberal party should not object to the lowering of the exemption so that men with small incomes might be taxed. It is unfortunate that this proposal has been sprung on us at what, perhaps, will be the last sitting of the year. The statement which has been made by the Treasurer this afternoon should have been circulated for the information of honorable members before the discussion of the measure. It seems to me that it would be better under the circumstances for the Treasurer to propose a simple increase of 25 per cent.
– Would not the honorable member agree to any reduction of the exemptions, even in respect of a salary as high as £500 a year ?
– I have not said so. Last year all incomes under £156 were exempt, and the exemption diminished by £1 in £10, until it disappeared in regard to salaries of £1,000 or thereabouts. As to the merits of that proposal, I have nothing to say now, but I consider it unfair to pass the present proposal without discussion and a proper understanding of it. I am certainly in favour of increasing the exemption in respect of children under the age of sixteen. It has been said that we should deal with this matter to-day, so that the community may not be called upon to pay the Commonwealth and the State income tax at the same time. The State of Victoria now requires returns for the financial year ending on the 30th June, instead of the calendar year - that is, for the same period as that for which the Commonwealth returns must be furnished. In my opinion, we should relieve taxpayers of the trouble of making separate returns, as they do now. Even honorable members whose salary is a fixed amount find the making up of returns a trouble, and to the business community it must be a serious undertaking. I plead for a simpler method of estimating the tax, and for a simpler schedule. We shall be meeting again in February, and I think, therefore, that the Treasurer might agree to a postponement of these proposals, so that honorable members may have an opportunity to study the examples that he has given, and to deal with the matter with full information.
.- I am in favour of raising revenue by income taxation; there can be no sounder or more equitable taxation. Some honorable members have captiously criticised these proposals without understanding them. The only points that are now at issue are whether the exemptions shall be retained at what they were or reduced, and whether the rate of the tax shall be increased by 25 per cent. We, on this side, have always contended that it is unfair to exempt one section of the community from taxation. The members of the Corner party claim that in practice all taxes are borne by the whole community. That is too big a subject for me to pursue this afternoon. It is of very little concern to the constituents of the honorable member for Yarra what the exact machinery for computing the income tax may be. That is entirely a matter for the taxation officials. Being highly scientific, the computation must be complicated. The scale makes a distinction between the taxation of small incomes and that of large incomes. It would be, however, unfair during war time to absolutely exempt from taxation persons who can afford’ to pay, putting the whole burden on the comparatively few well to do. The obligation of fighting for the country has been recognised by individuals in every class of the community. I should like to know why a single man with an income of £150 a year should not pay taxation. Every one whose income is above that amount might fairly be taxed on a graduating scale of increases, because it may be assumed that £3 a week will provide the necessaries for a home. The people, especially in war time, should be prepared to pay in accordance with the privileges which they enjoy. At a time like this all capital should be assumed for the purpose of taxation to return a certain minimum interest. Unless you make that provision you allow crafty individuals to hide their incomes and to evade taxation. A balance-sheet should be associated with every return of income, and there should be an assumed minimum return of, say, 4 per cent, from all the capital during war time. It may be that certain industries would be hard hit, and pay more than they should under that system ; but in war time, when money must be found, I cannot conceive of a more equitable system of taxation than the income tax. The present Government and their predecessors have forecasted a wealth tax to provide funds for the purpose of prosecuting this war. Let us imagine the case of a widow and her children, to whom £2,000 has been bequeathed. Under the proposed wealth tax, that £2,000 will have to bear a levy of £30, although the revenue from it, if the capital be invested at the highest rate of interest - 6 per cent. - would yield only £120. I have heard no honorable members in the Labour Opposition Corner raise their voices against the iniquity of taking away £30 from the capital from which the widow and children are to derive their income. But I have heard protests from all round the chamber because those who were previously exempt are to be hit by an equitable* form of taxation. I agree with the proposals of the Treasurer in the main. If there is one equitable form of taxation, it is the in- come tax, because it makes no distinction as to the source from which a man gets his income, whether from shipping, mines, or land. All must pay on the same basis. I have a distinct objection to that particular form of taxation which assails theman who puts his money into land. There are land-owners’ in this country who have not much equity, when they have to pay” two land taxes and two income taxes, while men; whose fleets are floating round the world, are collecting 200 per cent, and 300 per cent, more profits than ever before. Their industry is operated from nobase, but they are allowed to go free, whilst the men who carry on the primary industries of the country are singled out for special taxation.’
– I hope the Committee will hesitate beforeslaughtering the proposals of the Treasurer. There can be no doubt that the Committee agrees with most writers that the income tax is the fairest form of taxation. As the Leader of the official Labour party remarked, it is unfortunate that the Treasurer did not introduce his proposals at an earlier date, in order to give the House an opportunity of studying them in detail. As I understand these proposals, the Treasurer is asking the Committee to increase the rate of tax by 25 per cent , to lower to £100 the exemption allowable to those who have no dependants, and to make an allowance of an additional £13 for each child. He proposes, also, that the exemption shall et ase at £500, instead of at £1,020.’ In Victoria, the exemption has always terminated at £500. When’ this Parliament imposed the income tax last year, it made the exemption too high. The Treasurer has stated that, owing to the extent to which the war profits tax is likely to affect incomes, he expects the receipts from the income tax to be reduced by £700,000 or £800,000. If the Committee insists upon taking another slice from the income tax revenue, where is the Commonwealth to obtain the money with which to finance the war? A good deal of criticism has been offered in regard to the schedule. It is not a good principle to have’ increases in the rate of taxation at every £50 or £100. This schedule clearly sets out the basis upon which the income tax will be levied, and the amount of tax that will be paid on incomes of all amounts. An objection has been raised that the taxpayer will not be able to ascertain from this schedule what his liability to the Department is. I am confident that the majority of taxpayers, when they submit their schedules, leave it to the Tax Department to assess the amount of tax they must pay, just as we leave it to our banker to calculate the interest we must pay on our overdrafts.
– Do you say that the Department should never bechecked?
– Any trained accountant can work out the amount of the tax. on any income from this schedule.
– Every person is not a trained accountant.
– When my income tax assessment reaches me, I can calculate the tax accurately enough to satisfy me as to whether the computation of the Department is correct. I would sooner have a schedule based on a scientific principle than a schedule which increases the rates of taxation at every £50 or £100. For instance, in Victoria the lowest rate commences at £100. The tax then increases at various stages until at about £500 the exemption is extinguished. The effect is that the man who has an income of £490 gets the full benefit of the exemption, but the man whose income is £501 gets no exemption whatever. Under the system contained in this schedule a man pays on a graduated scale, every pound of income bearing its own weight, and receiving the exemption that is due to it. If the Treasurer could see his way clear to postpone further consideration of the tax until a later hour in the day, so that honorable members might have a chance of reckoning the effect of the adjustments he has made, it would be an advantage to all of us ; but having regard to the war profits taxation to be dealt with later, and to the levy in connexion with the repatriation scheme, I ask the Committee to hesitate before asking the Treasurer to slice off £120,000 from his income by altering this schedule, which, I say, is based on a thoroughly scientific and sound principle. If the exemption was too high before, the Treasurer has done right to reduce it. I understand that because of the exemption, and the raisins of the allowance for each child, the gradual extinction of the exemption until it expires at £500, instead of £1,020 as formerly, and the increase of 25 per cent. in the tax, there is a large apparent increase in the tax on incomes between £100 and £500. The schedule seems to have been adjusted in order to give us a more scientific system of income taxation, a method of taxation which every honorable member agrees is a fair one.
.-I would like the Treasurer to reconsider this scheme before he asks me to vote for it. Any proposal that may be brought forward on a scientific basis will receive my support if it can be shown to be fair and equitable. I am agreeable that what, is commonly known as a living wage should be exempt from taxation. If the living wage be fixed at £156, let incomes up to that amount be absolutely exempt.
– Nobody is objecting to that.
– But if that exemption is just in regard to a man who is earning only £156, there ought to be the same exemption of the living wage in the case of a man earning £1,000 a year. All income over and above that living wage the Treasurer may tax by any scientific formula he chooses to adopt. Income that has been earned is quite capable of bearing taxation. One of the reasons which’ the Treasurer has advanced for this scheme is that whilst he is decreasing the exemption on some income in a certain ratio, he is giving another concession in the form of an increased allowance for each child. The honorable member knows as well as I do that the men who are earning to-day incomes over and above the living wage are principally men well up in years, and that, their families being grown up, they do not get the benefit of this allowance for each child. Therefore, that increase in the allowance for children cannot operate as an inducement to pass the schedule. It operates merely in regard to those who are young, and whose opportunities are such that they can earn just the living wage, which I am willing to exempt. I say again, that if £156. is to be regarded as a living wage, it should be sacrosanct, and be exempt in regard to all income. That would be a fair and reasonable attitude for the Treasurer to adopt. Then those who are earning larger incomes could be made to bear the burden of taxation to whatever extent the Treasurer thinks necessary. Let me refer briefly now to the method by which the amount of tax payable on a given income is to be determined. Here we have what is commonly known as the mathematical curve. I can understand what it means, but it may be difficult to explain it to a general audience. We have an algebraic formula put forward as a means of ascertaining the tax payable on any income; but under that formula, in order to arrive at the actual amount of taxation payable on a given income, one might have to dive into no less than six places of decimals. It would be practically impossible for a man on a public platform to explain it to a general audience assembled to hear him give an account of his stewardship, without hurting the selfrespect of his hearers by treating them as one would treat a child in an elementary school. In order to make himself intelligible, he would have to do so.
– He would merely need a blackboard and a piece of chalk.
– And also a great deal of patience, in order to give his audience even an elementary knowledge of algebra. But when you come, as in this case, to something approaching the differential calculus, which is amongst the highest of our mathematical studies, the position is still worse. As it is, if a member were asked by an intelligent constituent in a public meeting how the formula was applied, he would have to hurt the feelings of other people, who could not follow his explanation unless he resorted to the simplest terms. If this system is to be adopted, then I suggest that every member of Parliament should be armed with a sort of ready reckoner, so that when a constituent approaches him to ascertain what is likely to be the tax on his income, he may be able to enlighten him without having to resort to the devious ways of the third degree, the mathematical curve, and all these algebraic formulae.
– Would a ready reckoner satisfy the honorable member?
– Personally, I do not need one; but it might satisfy the PostmasterGeneral. The point that I wish to emphasize is that, since on an income of £500 the increase in the tax would amount to something over 100 per cent., instead of 25 per cent., as we were led to believe, the Treasurer should allow the exemption to continue as before until an income of £1,020 is reached. That would give him an opportunity to increase the present rate of tax up to, say, 26 per cent, or 27 per cent, on incomes below £1,000 a year, without involving such a drastic and extraordinary increase as is embodied in the proposal now .before us. When the public realize what this proposition really means, I do not think they will thank -this Parliament for imposing a burden of over 100 per cent, increase in respect of certain incomes which cannot bear that additional impost. Incomes between £300 and £800 are to-day bearing a very large portion of the taxation of the country. The public will be surprised when they realize that those who have incomes of from £1,000 to £7,000 per annum are not being called upon, under this proposal, to bear anything like a proportion of the extra taxation’ which is falling upon those who have incomes of between £400 and £800. I ask the Treasurer to make his scheme a little more equitable, and, if possible, to do away with this algebraic formula for ascertaining the amount of tax payable on a given income, so that there may be an ordinary reply to an ordinary question that may be put’ to an ordinary politician in regard to the amount of tax payable on any income.
– While I have the greatest admiration for the highly-cultured gentleman who supplied the Treasury with this system of determining the taxation payable on incomes, I am afraid that his formula will be the cause of many headaches. I should like to compare this system of ascertaining the amount of taxation payable with that prevailing in Great Britain, and particulars of which are to be found in Hazell’s Annual. The system followed in Great Britain appears to be simplicity itself, compared with the highly-technical formula adopted by us. It can be understood by a schoolboy, whereas our method can be understood only by clever accountants. I asked three different accountants to explain to me a certain matter relating to income tax payable under the Commonwealth Act; but, apparently, .they were puzzled, since I could not get two of them to agree as to the amount to be levied. At page 582 of Hazell’s Annual for 1915 there appears a table showing the amount of tax payable on certain incomes under the Imperial Finance Act of 1914, and under the proposals made by the Chancellor of the Exchequer on 17th November, 1914.
I take the following examples from that table : -
Under such a system as that adopted in Great Britain, any one can readily ascertain what taxation he has to pay on his earnings. It should be the duty of every statesman to try to make the taxation proposals of the Government so simple that every taxpayer can clearly understand what he has to pay, without having to consult an accountant.
– All the taxation schemes of the late Government were based on the same lines as that now before us. This system was originated by the late Government in connexion with the land tax.
– I have never defended it. I objected to the system as introduced then, and I object to it now. I do not deny that the eminent gentleman who supplied this system to the Treasurer thoroughly understands it. He is a gentleman who can estimate the distance from star to star, and is one of the greatest statisticians in the world; but we do not want to be called upon to go into tremendous . mathematical calculations, such as are applicable to astronomy, in order to ascertain the amount of tax payable on any income. The Treasurer ought to sweep away all these degrees, and have a simple table, so that the man in the street may thoroughly understand the position.
.- Like most other honorable members I quite believe in the principle of the income tax, and if we depended more on this than on other methods of raising money it would be better for the community generally. I object to the Treasurer telling us that the income tax was to be increased by 25 per cent., and. then introducing a “scienti fic ‘ ‘ method by which incomes of £400 and £500 are called upon to pay an increase of, in some cases, 250 per cent. I am pleased to notice that the Treasurer has raised the exemption on account of children to an amount equal to 10s. a week each ; but I think that he might well go further and also provide exemptions for older children who are attending our secondary schools, and even the University. Parents in poor circumstances often deny themselves many luxuries in order to give their children the benefits of education ; and it is the nation with the highest standard in this regard that prospers. Here we have one of the best investments for the State, largely due to the self-denial of such parents, and when an opportunity offers I shall certainly move an amendment in the direction I have indicated. Another suggestion I make is that, as in the case of the wealth tax, people might be permitted to pay their tax by instalments. More especially is such a reform necessary in the case of death duties.
– You would not suggest such a scheme for the income tax
– In the case of big amounts I should. In the long run these taxes have to be Borne by the banks, and when as is the case at present, the State and Federal taxation all falls due at the one time, it is a tremendous strain on the financial institutions of the country.
– In cases of embarrasment or serious inconvenience, the income tax may be paid by instalments.
– I am glad to have that information, but I should like to know whether it applies to death or probate duties.
– I think not, but for these war bonds are accepted. ‘
– A friend of mine, who died a few months ago, left an estate worth £127,000. He had money out on loan, and much embarrassment was experienced in paying the death duties, the bankers refusing to advance the necessary sum of some £20,000 or £30,000.
– The estate must have been loaded up’ with mortgages.
– No, it was not; and it “would be a great advantage, especially in the case of business estates, if the payment of probate duty could be extended over a period of, say, two years. This would not only prove of considerable assistance to those interested in the estates, but keep the financial market steady. As I said before, I am very glad to find that consideration, in the case of the income tax, is given to married men with , families, for no ‘doubt such men are serving the State unselfishly, and to the best advantage. A married man with a large family spends three or four times as much as does a single man, and, moreover, contributes in a much greater degree to the revenue through the Customs House. Our Customs- revenue is something like £17,000,000, or £3 8s. per capita, and a married man with six children contributes £27 4s. before he is touched by the income tax, as against £3 8s. spent by the single man. As the children grow up, the married man’s expenses increase, and calls are made upon him at every turn. We pay enormous sums of money to promote immigration; and a man cannot serve his country better than, by rearing a large family. It may be information to the Treasurer that, according to Mr. Knibbs’ statistical records, there are 26,000 more single men up to forty-five years of age than there are married men within the same limit.
– You mean that there were that manyl
– I am speaking on the authority of the latest Tear-Book of 1914-15. It is gratifying to’ hear that an effort is to be made to arrive at some co-ordination between the Commonwealth and the States in regard to the basis of taxation, for there is no doubt that at present the varying methods are most confusing, especially in the country districts. It is not so much the amount of the tax that is objected to as the complex returns, the making out of which involves the expense of engaging experts. I shall support the Treasurer’s income tax proposals, provided the increase does not exceed 25 per cent, in each individual case, as just and equitable, and I hope he will .take into consideration the few suggestions I have made.
.- We must, of course, provide the Treasurer with the money that is necessary; but, considering the importance of the matter, these proposals, with the examples, ought to have been before us several’ days ago, so that we might have had an opportunity to thoroughly study them. I must confess that, the examples are a perfect eye-opener to me. It appears that it is not until incomes of £1,500 are reached that the proposed increase of 25 per cent, operates, and that down to £400 the tax is almost doubled, while in no case is it only 25 per cent. But we are only having the usual experience when we find such proposals as these introduced ‘ on the last day of the session, when, of course, they have to be rushed through. Something has been said in condemnation of the Federal basis of taxation, but I infinitely prefer it to that of the States. I do not profess to be able to explain the mathematical aspect, but I know that I have to pay a great deal less on the Federal basis than I have to pay under the rough-and-ready system that prevails, not only in my own .State, but, so far as I know, in every State in Australia. The States basis is not only unscientific, but absolutely unfair. Surely the Labour party have been in power long enough to make some effort to have a uniform basis of valuation and taxation, and to providethat the returns shall be made at one period of the year. At present two sets of income tax returns and two sets of land tax returns have to be sent in at different times; one has no sooner done with the State returns than the Federal returns have to be prepared. Taxation is mounting up in a most extraordinary way, and if it continues this will be a good enough country to get out of. I quite agree with the suggestion that there should be some simple amendment of the law to provide for an increase in the income tax of 25. per cent.’, leaving the other proposed alterations for future consideration.
– This Bill is absolutely in accordance with my financial statement, and I do not feel inclined to withdraw it and introduce another.
– But the examples show that the increase is much more than 25 per cent. until the big incomes are reached. The present proposals may have been in the mind of the Treasurer, but members generally have had no opportunity to consider their real effect, and suggest possible improvements. Under the circumstances, it would be infinitely better to have a postponement. The Treasurer practically presents a pistol at our heads, saying, “ I must have the money, and this is the way in which it will be gathered.” All the trouble arises from the fact that, in the true Micawber . spirit, the Government defer making any provision until the last moment. We have passed Loan Bills and Supply Bills and acted as if that settled the whole matter, but now we are faced with the result and find that the taxation is a perfect surprise to us. ,
.- The Treasurer might give a little more time for the consideration of this matter. The proposal to increase the income tax by 25 per cent., has met with the general approval of honorable members.
– But an increase of 25 per cent. only will not give me the revenue that I need.
– Would it not be better to make the increase uniform throughout the whole of the incomes to which the tax will apply?
– It would not be so equitable.
– It is not equitable to charge a higher rate of increase on the lower incomes and a smaller’ rate of increase on the larger incomes. The position we are in proves what I have contended in regard to the scientific method of calculation - that it does not give what really is in the minds of honorable members. I raised this objection when the scientific method of calculation was first introduced in regard to the land tax, and. I raised it again when the income tax was introduced.
– It has worked very well.
– It has worked, but the honorable member is unable to calculate by the formula before us exactly what income tax he will have to pay.
– A man with a taxable income of £150 will pay £11s. 3d. Is that too much in a time of war ?
– I do not say that it is, but I object to the large increase falling on the lower incomes rather than on the higher incomes.
– An income tax to the extent of quarter of a man’s income is, surely, high enough on incomes of over £6,500.
– Taxation is growing to such an extent that it will not be long before the people rise in protest against it. Once the war is over I do not think that the people will allow their incomes to be taxed to the extent they are now taxed without calling out for a change.
– Does the honorable member approve of the exemptions embodied in the principal Bill?
– I do not object to the exemptions: Instead of the inclined plane in which every pound carries its particular tax, I prefer the system generally adopted of having graduated steps. However, if the Treasurer insists on having the Bill passed - as it stands, I shall not seriously oppose it.
Question resolved in the affirmative.
Standing Orders suspended, and resolution adopted.
That Mr. Hughes and Mr. Poynton do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Mr. Poynton, and passed through all its stages without amendment.
.- I move-
That this Bill be now read a second time.
Apart from the amendments that are necessary to give effect to the new scales adopted in the Bill just agreed to, this measure contains a number of amendments which have been brought forward in order to clarify some doubtful interpretations that have been placed on the wording of the Act, and to remove some serious anomalies that have caused a considerable amount of hardship. I shall be in a better position to explain the clauses in Committee.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Amendment of section 3; Definitions) .
Amendment (by Mr. Poynton) agreed to-
That the following new paragraph be inserted : - and(c) by inserting after the definition of “Person” the following definition: - “ Shareholder “ includes stockholder.
Clause, as amended, agreed to.
Clause 3 agreed to.
Clause 4 -
Section 11 of the principal Act (Exemptions) is amended…..
– I move-
That the clause be amended by inserting the following paragraph: - “ (aa) by inserting in paragraph (f) after the word ‘ business ‘ the words ‘ and the income of a fund established by any will or instrument of trust for public charitable purposes if the Commissioner is satisfied that the fund is being applied by the trustees to public charitable purposes.’ “
The Department recommends this alteration for the sake of greater clearness, and to remove cases of hardship.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 5 -
Section 14 of the principal Act (Income) is amended - (aa) by inserting in paragraph (b) after the word “shareholder,” (first occurring) the word “stockholder”; and ….
Amendment (by Mr. Poynton) agreed to -
That paragraph (a) be left out,and that the following paragraph be inserted: - “ (aa) by inserting in paragraph (b) at the end of the third proviso the words ‘but where it is proved to the satisfaction of the Commissioner that anamount standing to the credit of a profit and loss account before the first day of July, One thousand nine hundred and fourteen, has been appropriated by a company for the purpose of crediting a dividend to the shareholders and the dividend or a part thereof is retained by the company for the purpose of paying for an increase in value or number of shares issued to the shareholders, the shareholders shall not be liable to pay tax on the dividend or the part of the dividend so retained.’ “
Amendment (by Mr. Poynton) proposed -
That the following paragraph be inserted: - ” (ab) by inserting at the end of paragraph
the words and the amount of any pay ment received by a lessee upon the assignment or transfer of a lease to another person, after deducting therefrom the part (if any) which, in the opinion of the Commissioner, is properly attributable to the transfer of any assets belonging to the lessee and so much of any fine, premium, or foregift paid by the lessee or any amount paid by the lessee for the assignment or transfer of the lease as, in the opinion of the Commissioner, is properly attributable to the period of the lease unexpired at thetime of the assignment or transfer by the lessee.’ “
.- I suppose that the meaning of the provision is that if a lessee makes a profit by an assignment he is to be taxed on that profit as income. This introduces a new principle. It is very hard to say whether this profit should or should not be taxed. It is often difficult to determine what is capital and what is not, and a profit obtained in this way may have been accruing over several years instead of coming in one year. However, I shall not oppose the amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 6 (Taxation of companies).
.- This is a clause that requires a good deal of study, though I think that, on the whole, it is right.Under section 16 of the Act the income of a company is the balance of the total income after deducting the payments by way of interest or dividend. There was a doubt whether, in the case of a company carrying on businesshere, but incorporated elsewhere, payments of interest to debenture-holders not resident in Australia were liable to income tax, that is, whether we had the jurisdiction which wo professed to have in respect of them, and could tax the interest paid to them.. It has been decided in America that a similar tax is invalid. An inconvenience, which was pointed out by a few of us when the measure was under consideration, is that by making the company here an agent for the absentee shareholder or debenture-holder who is living in London or elsewhere, for the purpose of levying the tax in respect of his dividends or interest, we can prevent the company from being sued for thereimbursement of the amount. Although we collect the tax here, and make it compulsory on the company topay it, we cannot empower the company to deduct it in England, and, therefore, if the absentee preferential shareholder chooses to sue the company at home, it can he obliged to pay to him the tax that the Commonwealth has collected. The amendment of the law now proposed enables us, without any doubt, to tax the interest paid to preferential shareholders resident in England; and to tax dividends paid to absentee shareholders. If a company, registered in England, starts business in Australia, we tax the whole of its profits here, and under the amendment now proposed we endeavour to make the preferential shareholders or debenture-holders pay taxation. We tax the whole of the company’s income made here, and then allow the debenture-holders, if resident in Australia, to get an abatement in respect of their proportion of the tax. But if a debenture-holder or preferential shareholder resides in England, there is no power to allow the company to make a deduction in respect of his interest. We collect the tax from the company, but I am almost convinced that we have no power to make absentee debenture-holders contribute to our revenue. An absentee, on suing the company, could recover any amount deducted by it from’ his interest. We have provided that -
A company, notwithstanding any contract, agreement, or arrangement entered into by it, may, with the approval of the Commissioner, charge pro ratâ, the amount of the tax actually paid by it against those beneficially interested in the income of the company.
In other words, if the company under the earlier portion of the clause has paid income tax on so much of its assessable income as is distributed to shareholders or stockholders who are absentees, or if it has paidincome tax oninterest paid or credited by it to an absentee, then we profess to allow it to charge them with what it has paid on their share of its total income. We profess to do that and to apply the same principle in regard to resident debenture-holders or shareholders. But while the Treasurer can collect the tax, he cannot enable the company to charge it to debenture-holders or shareholders who are absentees, because it has been decided in Queensland in the case of Spiller v. Turner that the absent preferential shareholders are bound by the contract entered into in England, and that we have no power to bind them in respect of interest paid by the company elsewhere. Although we have power to tax a company on the whole of its local profits, andlthough the
Treasurer can thus get at the interest paid to shareholders here, I do not think he can enable the company to regain what it pays from the shareholders or debenture-holders resident in England. That difficulty might be overcome by an amendment as follows: - “ Provided that a company shall not be liable under (1a) of this section to pay income tax on incomes or interest in respect of existing debentures or shares in cases to which (1b) of this section is, from lack of jurisdiction, inapplicable.”
– If the honorable member will let me have that suggestion, I will have it inquired into.
– While the Treasurer is taxing the company on its income from all sources, we are not allowing it to make any deductions in Australia in respect of the interest that it has to pay in England. After the company pays taxation here, the preference shareholders in England . may recover from it their share of it, and the result will be that the resident shareholders in Australia will have to bear the brunt of double taxation.
Clause agreed to.
Clauses 7 and 8 agreed to.
Clause 9 -
– I move -
That at the end of sub-clause (1) the following paragraph be added: - “And (k) by adding- at the end of the subsection the following paragraph: - “ and (m) the interest paid on a mortgage of land to1 which section fourteen, paragraph (e) of this Act applies if the taxpayer satisfies the Commissioner that the mortgage was entered into ingood faith.
The first two amendments proposed make the intention of the first part of subsection 1 of section 18 of the principal Act clear, by specifically stating that the section deals only with assessable income. i.e., income which is not exempt, and that the deductions allowable are in respect of expenditure incurred in producing the assessable income.
.- Does the Treasurer propose to levy a tax on that portion of the war-time profits that is paid to the Commonwealth? In other words, does he propose to take 50 per cent, of the war-time profits, and then to tax a person on his total income, including war-time profits?
– I understand that the person will not be taxed a second time in respect of war-time profits.
– The taxpayer in making out his schedule will set out his list of deductions for rates, land tax, State income tax, and war-time profits; then he will be taxed on the balance. He will not be assessed twice for the same amount.
– Suppose a taxpayer had a large cumulative income derived from many sources only a portion of which represented war-time profits, would the contention of the honorable member still apply ?
– I should say that the income other than war-time profits would not be subjected to the war-time profits tax.
Amendment agreed to.
.- Under paragraph k of section 18 of the principal Act as proposed to be amended by this Bill, provision is made for an exemption of £26 in respect of each child who is under the age of sixteen years at the beginning of the financial year in which the income was received, and who is wholly maintained by any taxpayer who is not an absentee. I should like to move the omission of the words “ who is under the age of sixteen years at the beginning of the financial year in which the income was received,” so that the exemption would apply to all under twenty-one years of age. Any man who is supporting a boy or girl who is attending the University or is apprenticed to a trade or articled to a profession is doing his duty to that child and to the S;tate, and should receive some consideration. It costs as much to maintain a youth of eighteen as it does to maintain a man. My proposal would also meet the case of those who have to maintain invalid children over sixteen years of age.
– They come under the invalid division of the Old-age and Invalid Pensions Act.
– Not at all. We frequently speak of the value of our educational system, and citizens should be encouraged to avail themselves of it, and so to render all the assistance they can to the State by sending their children first of all to the primary schools, then to the secondary schools, and finally to the University.
– The amendment; suggested by the honorable member can- not be made at this stage. He might propose to provide for it in another part of the clause.
– I am sorry if I have missed my opportunity.
Clause, as amended, agreed to.
Clause 10 -
Section 10 of the principal Act is repealed, and the following section inserted in its stead : - “ 19. (1) In the case of a person . . . there shall be deducted . . . the sum of one hundred and fifty-six pounds, less five pounds . for every eleven pounds by which the income exceeds one hundred and fifty-six pounds.”……… .
.- I appeal to the Treasurer to reconsider his decision with regard to the abolition of the exemption in respect of all incomes of £500 and over. I propose that the exemption should gradually be reduced until it disappears on incomes of £1,000, just as it does under the existing law. I move -
That the word “ eleven,” line seven, be left out, with a view to insert in lieu thereof the words “twenty-two.”
My amendment, if carried, would carry out what I think the public were originally led to believe was the intention of theTreasurer, namely, that the income tax should be increased by 25 per cent, all round. As the Bill stands, the tax on incomes up to £500 is increased by over 100 per cent, instead of by 25 per cent. In other words, such incomes are called upon to bear a burden which is too much for them. Will the Treasurer accept my amendment ?
– I cannot.
.- This clause really carries out what the Treasurer announced some time ago that he intended to do. In making his financial statement he said, as reported in Hansard, page 9444 -
The only alteration in this tax, compared1 with the proposals of my ‘ predecessor, is the abolition of the exemption 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 £§’ for every £10 increase in the net taxable income, until it disappears entirely, when the net taxable income reaches £1,020.
That is the only respect in which this proposal varies from that made by the ex-
Treasurer. The honorable gentleman himself pointed out that this variation front the proposals of his predecessor would increase to a very great extent the income tax payable on the lower grades of incomes. The increase of 25 per cent, is reached only when we come to the higher grades ; the increase on the lower grades of income is more than 25 per cent. Will the Treasurer tell us what loss of revenue the adoption of this amendment would involve ? Is the amendment so serious that it would greatly impair his proposals before the Committee ?
– I would remind honorable members that they have already agreed to a Bill which makes provision for the abolition of the exemption in respect of all incomes of £500 per annum and over. In making my financial statement I distinctly told honorable members that an all-round increase of 25 per cent, in the income tax was proposed. I also said that the exemption of £156 would disappear when an income of £500 was reached. In the working out of this system it is found that incomes of between £200 and £1,020 will be subjected to more .than an increase of 25 per cent, in the tax. That is in consequence of the abolition of the exemption. I am not quite sure what would be the effect of this amendment.
– It means that the exemption would disappear at about £850.
– On incomes of between £800 and £900 and over.
– What loss of revenue would it involve?
– From £120,000 to £130,000 per annum.
– This amendment would not involve Such a loss.
– It would. The acceptance of the amendment at this stage would mean the withdrawal of the Bill, and the introduction of another, and I cannot agree to it.
. - Without expressing an opinion one way or the other, ~’L take it that the amendment suggested would not interfere with the schedule. If it was desired to raise the same amount of money the schedule would have to be altered, but otherwise the Treasurer Eas only to shade off the exemptions at a more gradual rate. Of course, the Treasurer knows his requirements, and we must, to a large extent, depend on his recommendations. If he feels that the sacrifice involved is too big for him to make, that ends the matter so far as 1 am concerned. The whole scheme, to my mind, is most equitable and just.
– Ihe honorable member for Hume could not have submitted’ the amendment at any other point.
– That is quite true; but the Treasurer says what is objected to is an essential part of the scheme, and we must bow to his judgment in the matter.
.- Does the Treasurer propose to carry the Bill through at this sitting?
– I do.
– Some of us made inquiries, and we were told that the Bill would not now be pressed to a final stage. There are certain mercantile interests involved, and those concerned have been told, by myself amongst others, that they need not worry, because it was understood the Bill would not be proceeded with before Christmas.
– I understood that.
– I have never given anybody to so understand; but, on the contrary, have said that I wished the tax to operate this year.
– I do not think that, so far as administration is concerned, it can be so essential to the Treasurer that the measure should be passed now.
– Are those whom the honorable member has mentioned not satisfied with the measure?
– I do not say that the Legislature is to stand still because of those mercantile interests, but if we have given those concerned to understand that the Bill would not be proceeded with, it may embarrass them somewhat.
– Does the honorable member know the exact point in which those people are interested ?
– I do not. I have not inquired, because 1 was under the impression that the measure would not be proceeded with until next February. Of course, there may have been a bond fide mistake for which the Treasurer is in no way responsible. The great necessity to the Treasurer is the fixing of the rate for the year; all the other points are minor matters of administration.
– Taxes cannot be assessed until the basis of the exemptions is known.
– The Commissioner will not, I think, assess any taxes between now and the next meeting of Parliament.
– The interests mentioned have not made any representations to me.
– I was just about to ask a question as to that.
– No point has been raised that has not been dealt with.
– As I say, there may have been a mistake, and some of us will have to answer to our constituents for sending them away. However, those whose interests are supposed to be voiced in this House have not had a chance of presenting their views. The Bill has not been very long before us.
– The Bill has been before the public for about twelve months.
– I think not.
Mr.Poynton. - The Bill has been on the notice-paper forI do not know how long.
– The Bill was read a first time only on the 13th December, and, frankly, I do not feel competent to pronounce upon some points. I suggest that the Treasurer should not proceed finally with the Bill at this sitting, but give some of us an opportunity to consult those interests which are supposed to be affected.
Sitting suspended from 6.30 to 8 p.m.
Clause agreed to.
Clause 11 -
Section 20 of the principal Act (Deductions not to be allowed) is amended. . . .
Amendment (by Mr. Poynton) agreed to-
That in line 1, after “ amended,” (a) be inserted,
Amendment (by Mr. Poynton) agreed to-
That the following words be added to the clause: - and (b) by omitting the proviso to paragraph (i) and inserting the following in lieu: -
Provided that where it is proved to the satisfaction of the Commissioner that any taxpayer (being the lessee under a lease or the assignee or transferee of a lease) has paid any fine, premium, or foregift, or consideration in the nature of a fine, premium, or foregift for a lease, or a renewal of a lease, or an amount for the assignment or transfer of a lease of premises or machinery used for the production of income, the Commissioner may allow, as a deduction for the purpose of arriving at the income, the sinking fund according to calculations based on the prescribed tables for the calculation of values required to recoup the taxpayer the amount so paid for the lease or renewal of the lease or the assignment or transfer of the lease.
Clause, as amended, agreed to.
Clause 12 (Repeal of section 24).
.- Has the Treasurer had the opportunity to confer with his officers in regard to the point I have raised concerning debenture-holders?
– Then the matter may as well stand over, but it involves a point of considerable importance. As things now stand, if a company that is registered in England, and carries on business in Australia, borrows money on debentures in England, and the contract is to pay the interest on the debentures in England, we cannot interfere with that contract beyond declaring that the company, in its operations here, can be taxed on the amount of interest paid on the debentures. We leave it to the company to recover from the debenture-holders the amount of the income tax paid on their behalf. As a matter of fact, the company has no recourse against the English debenture-holder as long as the debenture-holder resides in England and lends the money to the company under a contract by which the interest is to be paid in England. The provision made in the Bill, by which the company may make a deduction’ from the interest payable to debentureholders in respect of the proportion of the income tax paid, that might be debited to them, is all right sofar as it applies to those who receive their interest or their dividends in Australia, but it will not apply in the case of those of whom I have spoken. Consequently, the company will have to pay for something that it cannot recover.
– I am informed that if I should agree to the amendment which the honorable member has suggested it will mean the loss of considerable revenue.
– I am not framing an amendment. That was a suggestion I drafted on the spur of the moment. It is a question of morals. We are attempting to tax absentee shareholders and absentee preferential shareholders by taxing the company.
– Why cannot the companies deduct the taxation from the dividends, as is done in England ?
– Because we have no jurisdiction in that regard. This point has been decided in several cases, and particularly in the case of Spiller versus Turner, a Queensland case, decided in 1897, in which the decision was that the terms of an English contract with the company, under which the company was bound to pay, without deduction, the full amount of interest, could not be altered. Now we propose to tax that interest, and, apparently, give power to the company to deduct it in face of the contract with the debenture-holder in England, but it cannot be done.
– Should we not deduct the taxation before the interest is paid?
Mr.GLYNN. - We deduct the amount of taxation we require by declaring that the whole of the income of the company is liable to taxation, and we allow the person who receives interest to claim an abatement of his personal taxation in respect of that portion that ought to be debited to that interest, but we enable the company which pays the interest to charge proportionately to the debenture-holder the taxation that it pays collectively. Tn other words, the company will pay the taxation, and not the individual shareholder, but. the company cannot have recourse to the preferential shareholder who resides in England, and has lent his money to the company in England. It is an English contract to pay the interest in England, and is beyond our jurisdiction. Therefore, although it is a proper proposal to get at these preferential shareholders, we will not be doing’ so. The company will have to pay the taxation, and will be unable to deduct the proportion payable by these people, or to recover it from them.I raised this question on theoriginal Bill, and pointed -out that the provisions were ultra vires. It has since been discovered that they were wrongly drafted, and now the measure has ‘been very properly amended, giving the powers that I have indicated ; but, incidentally, we are not giving the company the power to pass on the tax to the absentee shareholders:. The only method of meeting the difficulty is to have an arrangement with the Imperial Government to enable it to be done, or to passan amendment such as I have suggested, namely, that the tax will not apply in the case of existing shareholders against whom these companies have no recourse to recover what is paid on their behalf. But I do not press the point, although it affects a considerable number of companies operating in Australia.
Clause agreed to.
Clauses 13 to 17 agreed to.
Clause 18 verbally amended and agreed to.
Amendment (by Mr. Poynton) agreed to -
That the following be inserted as clause 5a : - “ Section 15 of the principal Act is repealed.”
Title agreed to.
Bill reported with amendments.
Standing Orders suspended, and Bill passed through remaining stages.
Bill returned from the Senate without amendment.
By leave of the House, I should like to move to appoint the honorable member for Moreton a member of the Public Works Committee in place of the honorable member for Denison, who resigned when he became an Assistant Minister.
– I object.
Bill returned from the Senate without amendment.
Bill returned from the Senate without request.
– Have I the leave of the House to give notice of the motion of which I have just spoken.
– I object.
– Could not the Prime Minister move to suspend the Standing Orders to enable notice to be given ?
– That would require an absolute majority of the members of the House.
– There will be an opportunity to consider the matter during the suspension of the sitting.
Sitting suspended from 8.22 to 11.15 p.m.
Bill returned from the Senate with an amendment.
That the Senate’s amendment be taken into consideration forthwith.
– This is an amendment to paragraph c of clause 12, which grants exemption to entertainments intended only for the amusement of children, and the charge for which is not more than1d. The Senate has amended the sub-clause to provide that the charge shall be not more than 6d. I move -
That the amendment be agreed to.
Question resolved in the affirmative.
Bill returned from the Senate without request.
The following paper was presented: -
Typhus Epidemic at Gardelegen - Report by the Government Committee on the Treatment by the Enemy of British Prisoners of War during the spring and summer of 1915 - (Paper presented to the British Parliament.)
Motion (by Mr. Hughes) agreed to-
That the House, at its rising, adjourn until to-morrow at 2.30 p.m.
– I move -
That the House do now adjourn.
I am sorry that there appears to be on chance of completing the business tonight, although the only matter the Government desire to deal with is that which has been already mentioned. However, honorable members will be able to make train arrangements to leavefor their homes to-morrow.
Question resolved in the affirmative.
House adjourned at. 11.24 p.m.
Cite as: Australia, House of Representatives, Debates, 19 December 1916, viewed 22 October 2017, <http://historichansard.net/hofreps/1916/19161219_reps_6_80/>.