7th Parliament · 1st Session
Mr. Speaker (the Hon. W. Elliot Johnson) took the chair at 3 p.m., and read prayers.
– I wish to know from the Prime Minister if the Proclamation which has been issued under the . War Precautions Act, forbidding the assembling of more than a certain number of persons for the holding of meetings within a certain distance of Parliament House, prohibits the holding of meetings within the halls within the defined area. There are at least four such buildings : the Protestant Hall, at the corner of Exhibition- streetand Little Collins-street; the Masonic Hall, in Collins-street; the Socialists Hall, in Exhibition-street; and the Church of England Mission Hall, in Spring-street?
– The Proclamation applies not to the holding of meetings at all times, but only to the holding of meetings during the sittings of Parliament. Its terms are a replica of the provision in the Victorian Act, and the practice which has been followed under that Act will be observed in its enforcement. I assume that it will not apply to meetings within halls. The Government in issuing the Proclamation had not such meetings in mind. Should its legal effect be greater than was intended, the Proclamation may be modified. Its object is to prevent the assembling of large bodies of persons for the purpose of overawing Parliament, and thus taking away the prerogative of my friends opposite to say what they please about the Government.
– Will the Prime Minister have the Proclamation printed, so that it may be widely distributed?
– It has received a fairly wide circulation, but I shall be glad to take such further steps as may be necessary to make it known where it is most likely to be of service.
-Will the Treasurer today give the House an opportunity to consider the amendments which he proposes to move to the War-time Profits Tax Assessment Bill ?
– I am afraid that that will not he possible. It is the desire of the Government that honorable members shall to-day address themselves to the motion for the second reading of the Bill, and express their views fully regarding it. As soon as possible after the Bill has been read a second time, copies of the proposed amendments will be placed in the hands of honorable members, so that they may make themselves fully acquainted with what is intended before the Bill is considered in Committee. The Government wishes to give the House the fullest information, but it would not be a wise thing to circulate notices of amendments before Ministers had heard what honorable members have to say regarding the Bill.
-In tie event of the mail steamers which pass between Melbourne and Tasmania being laid up, will steps be taken to provide for the carriage of mails by the auxiliary schooners which trade between the mainland and Tasmania?
– The PostmasterGeneral is confined to his home through illness, but I shall have this matter brought under his notice. He is already looking into the whole question of mail carriage, because of possible disturbances.
– Tasmania being an island State, runs the risk of being shut off altogether from communication by mail.
– Quite so, and the fullest and most serious consideration should be given to the matter.
– In view of the undertaking by the Prime Minister that the industrial relations of employers and employees would not be varied in principle during the war, and in view of the fact that a serious and sudden departure was recently made from the industrial conditions in the New South Wales railway and tramway workshops, which has resulted in a disastrous strike, will the Prime Minister, now that the matter has become one of Commonwealth concern, convey the terms of his promise to the New SouthWales Government, and suggest that the matter is one that might properly be settled by arbitration?
– I am not aware that the subject-matter of the dispute falls properly within the category of industrial matters, but whether that be so or not, it is a condition precedent to all arbitration that there shall not be a preliminary recourse to the strike. Therefore, unless and until work is resumed by the employees, arbitration must be impossible and absurd.
– Has the Minister for the Navy recognised the enormous importance to Australia of aerial reconnaissance over the sea, and has his Department taken steps, by attaching officers to the
Royal Naval Air Service, to get information on active service which would be immensely valuable to this country after the war is over?
– The honorable member has taken good care that I know something about this subject, for he has many times brought it under my notice. I can only say that the matter is under the very serious consideration of the Department, with a view to taking steps for the inauguration of an Australian naval air service in connexion with Australian defence. For that purpose £5,000 has been already placed on the Estimates.
– If I may do So without causing him any embarrassment, I should like to ask the Prime Minister whether he is prepared to inform the House of the attitude of the Government in regard to the present industrial crisis?
– The general attitude of the Government has been already stated in the Proclamation I issued on behalf of the Government, and which was published in this morning’s press. There has been issued to-day a regulation, which will be gazetted during this afternoon, to give effect to that policy, particularly as it is set out in the last paragraph of the Proclamation. The regulation reads as follows : - 40c. Any person who, by word, deed, or otherwise -
The penalty for an offence is - On summary conviction, a fine not exceeding £100, or imprisonment not exceeding one year, or both. If tried on indictment, a fine of any amount, or imprisonment for any term, or both.
That regulation will take effect from the time of its gazettal this afternoon, and the Government propose to take such steps as are necessary to promptly and effectively carry out its provisions. We have issued an appeal to the loyal citizens of this country to forthwith return to work, and to others, who were not engaged in the occupations in which a cessation of work has taken place, to enrol themselves for national service. In addition the Government have warned all persons that any attempt to interfere in any way will be promptly and effectively dealt with. The regulation is the legal sanction of that notification. It is proposed to establish forthwith in each city places at which such persons as are willing to engage in the national work may enroll. Men are now’ being engaged in stacking the wheat that is lying on trucks and was in danger of being destroyed or greatly damaged by the rain. Watchmen have been stationed at the stacks, where, as I said this morning, many millions of pounds’ worth of property is lying exposed to attack by any evil-disposed person who chooses to take this opportunity of destroying it. The general policy of the Government in regard to the crisis is this: We regard the present industrial outbreak as an organized attempt to take the reins of government out of the hands of those duly elected by the people to carry on the affairs of the country. It is an attempt to reduce democratic institutions to a farce. It is, in short, a belated effort by those who were defeated on the 5th May to set aside the will of the people.
– Order ! The honorable gentleman’s answer is rather long. The right honorable gentleman’s reply involves a lengthy statement of policy. It will be more regular to obtain leave of the House to- make a statement.
– I have completed my remarks.
– Do the Government approve of the action of the New South Wales Government in introducing, during war time, a card system which is, without doubt, responsible for the present trouble?
– I direct the attention of the honorable member, and the citizens of the country generally, to the very clear and unambiguous statement set out in the Proclamation this morning, that the Government expresses no opinion as to the actions of the Commissioners of the New South Wales railways. We are not concerned with the merits of the dispute, or with the dispute itself. What we are concerned with is the reckless disregard of the welfare of the country by unions which have no dispute nor any pretext for any dispute. There has been no card system introduced in connexion with the Wharf Labourers Union as between employer and employee, or as between the seamen and their employers. There is not the slightest reason in the world why the men engaged on the wharfs should have refused work. . They interviewed me a few days ago and asked me if I would appoint a commission of inquiry into the cost of living. I have appointed that commission, but, despite that concession, on the very next day they evolved another pretext’, viz., that they would not be “ picked up “ except at a certain place. They abandoned that pretext on Monday, and, throwing all disguises aside, said that they will not work till next Monday. In the meantime, their delegates have gone to Sydney in motor cars. This is an exhibition of the dire poverty that is said to be in our midst, and yet the honorable member for Capricornia asked a question about the card system in the New South Wales railways.
– Order! This statement is going beyond an answer to the question that was asked.
– May I ask you, Mr. Speaker, whether honorable members generally will be allowed to debate the subject in this fashion?
– Unfortunately, the Prime Minister suffers under an auricular disability, as honorable members are aware, and very often does not hear the call from the CHair. However, when questions are’ asked which involve answers of unusual length, and practically amount to making a statement, it would be better if the Minister concerned were to obtain the leave of the House.
– Will the Minister for the Wavy say whether there is any dispute at the Cockatoo Island Dockyards in connexion with the. card system, since he understands that the men there have gone out on strike?
– The men at Cockatoo Island Dockyard are out on strike,. but what for this deponent knoweth not.
– I should like to ask the Prime Minister whether it is a fact that Miss Adela Pankhurst has been arrested on the steps of Parliament House under his instruction ? If so, does he not think his action was a little indiscreet?
– I receive the honorable member’s tidings as did Moses that of those who met him with good news of the promised land. I did not know that Miss Pankhurst had been arrested on the steps of the temple, and I offer no observation as to whether the arrest was an indiscretion or not. That is for the police to determine. I endeavour to live in peace with my fellow-citizens; above all, with my female fellow-citizens, and I am not going to say one word about the arrest.
– I wish to ask the Prime Minister if it is not a fact that the card system has been in operation for many years in connexion with the jobprinting branch of the Worker office, Sydney ?
– I do not know. If it has been in use, I have no doubt it has been a great success.
– I desire to ask the Prime Minister a question relating to a matter so serious that in order that he may be under no misapprehension when replying to it, I have had the question typewritten, and shall present him with a copy of it. I wish to know whether the Prime Minister is aware that in the industrial dispute in New South Wales the men have no objection to a mere change in clerical work ? Is he aware that already a system of booking the time of work is in vogue, and that this provides ample data for readily arriving at the cost of any and all work ? Will the Prime Minister state if he is aware of what is meant by the “ card “ system - the speeding; up of a workman to his utmost capacity, and pitting him against his fellows and against himself; a system which-
– Order !
– A system which aims to crush the last semblance of manhood out of him.
– Order ! The honorable member is now going beyond the asking of a question. I would remind him that questions are intended, not to impart, but to elicit information, and that it is not in order to embody in a question expressions of opinion or statements of fact.
– I did not desire sir, to commit any breach of the Standing Orders. I wish to ask the Prime Min ister whether he is aware of certain facts. If you say that I may not do that, then it seems to me, sir, that, having regard to the present crisis, you are perpetrating a great injustice?
– Order ! The honorable member must not cast any reflection on the Chair. I merely earned out the Standing; Orders in calling the honorable member to order. There are well known principles covering the asking of questions which honorable members must observe.
– I do not wish to cast any reflection upon you, sir, but at this crisis in the history of Australia something more than what is allowable under the Standing Orders-
– Order ! The honorable member must confine himself to the asking of a question.
– I shall give notice of my question for to-morrow.
– Will the Minister for the Navy say whether it is a fact that the employees in Cockatoo Island Dockyard are at present on strike?
– It is a fact that nearly all the employees are out. I think that the only exception at present is in respect of the Electricians Union, and I understand that the members of that union are taking a ballot to determine what they shall do. I really think they ought to finish the job.
– In the absence of the Assistant Minister for Defence, I ask the Minister for the Navy whether the military police, who are among the large crowd outside this building, went there by order of the Minister for Defence or any authority of the Defence Department ?
– I have no knowledge as to who sent thorn there, if they are there.
– They may be merely sight-seeing.
– I take it they are thereto keep the peace.
– What! The military police ?
– The military police to keep the peace.
– Order !
– And to protect honorable members from molestation.
– Do you not see-
– The honorable member for Batman is out of order.
– I do not know why this howling takes place.
– Because you are upsetting Hughes.
– Order ! The honorable member for Batman is again out of order.
– I have already said that I do not know who sent the military police there.
– You have said-
– The honorable member for Maribyrnong is out of order.
– The honorable member asked why the military police were there. I said I did not know, and I was proceeding to tell him why I thought the police were there. It is evident, however, that he does not wantinformation .
– I desire to ask the Prime Minister a question bearing on the statement made by him a few minutes ago. I wish to ask whether his resents ment of the action of the President and Secretary of the Melbourne branch of the Wharf Labourers Union in travelling to Sydney by motor car-
– Order !
– Is due to the fact that he himself travelled by a special train for which they paid-
– Order ! Questions of a personal character containing reflections are not in order.
– Will the Minister for Works and Railways state whether there is still going on amongst workers on the east-west railway a strike that is likely to seriously interfere with the completion of that work ?
– There is a strike on the eastern section of the east- west line. At the present time nearly all the men at that end are out, but, so far, the strike has not extended to those employed on the western section of the line.
- Mr. Speaker,- Am I in order in addressing a question to you, drawing your attention to the fact that in the basement of these premises thereare something like 500 policemen? I understand that they are here to protect honorable members from molestation. May I ask if I can have my quota here ?
– I remind the honorable member that frivolous questions are’ out of order. .
– When the Minister for the Navy was asked a question a moment ago with reference to the military police, I noticed that his answer was in reference to ordinary civil police. I desire to know whether the right honorable gentleman intended his answer to apply to the civil police or to the military police? In my opinion, there is an important difference.
-COOK.- It will be found, on reference to Hansard, that I clearly stated, in answer to the question, that I did not know anything about where the police came from, or who sent them here. It is only the sinister minds opposite which are trying to attach a significance to my answer.
– I must ask the honorable member to withdraw that reflection.
– I withdraw and apologize.
– I desire to draw the attention of the Minister for the Navy to the fact that there is a fire-hose laid all round these premises. I should like to know whether that hose is connected with the right honorable gentleman’s Department. I take it that that is a fact; and I should like to know what the Minister intends to do with it.
– I think a question about hose to put out fire comes appropriately from my honorable friend.
– Why did not the Prime Minister, when he first heard of the New South Wales trouble, endeavour to use his good offices to get a conference for the men in order to have the matter in dispute settled by arbitration ?
– What is my status in the matter”
– Are you not Prime Minister of the Commonwealth?
– My right to interfere begins when the business of the country can no longer be carried on. Directly that occurs I consider that the Commonwealth ought to interfere, law or no law. Directly we were told that we could not send our food to Great Britain, that we could not send our transports, and that we could not even coal a hospital ship, I thought it was time to interfere.
– I desire to ask the Minister for the Navy whether those observations in the Proclamation published in this morning’s press, over the name of the Prime Minister, impugning the loyalty and good faith of the principal sufferers in this strike, have the approval of the Government generally, and the approval of the Minister himself ?
– Surely the honorable member does not expect me to answer that question ?
– As the matter is of some importance to some of us, at any rate, I ask the Minister for the Navy whether he is responsible for the military police being brought within the precincts of this House ?
– I should like to again make it clear that I know nothing whatever about these police - where they came from, who sent them, or for what purpose they are here. I do not know whether they are civil police or military police.
– Has the Prime Minister seen in the newspapers a report of a meeting of the followers of Pluto - I mean the Plutocrats, which are just the same - in South Australia, where one man remarked that some blood-letting of the workers would do good? Is that not inciting to disorder and revolt, and ought not some action to be taken in connexion with this utterance? The remark was made at a meeting of the Employers Federation.
– It was not made in South Australia.
– I have not seen that statement, hut I have no hesitation in saying that if such a statement were made, the man who made it deserves the severest punishment that can be inflicted upon him. It is the most contemptible and damnable thing to say.
– It was said in Western Australia, not South Australia.
– I desire to ask the Prime Minister whether he has seen a statement in the press to the effect that he last night said that he had not received from New South Wales any communication whatever concerning the strike, its progress, or anything in relation to it, although the strike affected the whole Commonwealth, because it had led to trouble in which the whole Commonwealth had been involved? Did the Prime Minister give a pressman that information, in. view of what appeared in the Age of 4th August, to the effect that. Mr. Beeby, the Minister for Labour in New South Wales, had come over specially to Melbourne to consult with the Prime Minister and inform him about the strike? According to that newspaper, the Prime Minister, when seen subsequently to his interview with Mr. Beeby, stated that that gentleman had given him full particulars with regard to the state of affairs in New South Wales, and had discussed the general position resulting from the strike. Which is correct? Did the Prime Minister know about the strike, or did he not know about it?
– What I said to the press last night was that, since I had seen Mr. Beeby, I had had no information, good, bad, or indifferent, of any sort or kind. Although I have asked to be supplied with information as to the position daily, I have not been so supplied from any source at all; and I think I ought to be.
– I ask the Prime Minister whether, when Mr. Beeby waited on him on the. 3rd August, he did not assure Mr. Beeby that the Federal Government would stand behind the Government of New South Wales in regard to whatever action they took in connexion with the strike?
– Such a question ought not to be put. I decline to answer it, beyond saying that it is absolutely untrue that there was any such request made or assurance given. The honorable member has a mind like a toad in a cesspit.
– Order! I ask the Prime Minister to withdraw that statement, and apologize.
– What am I to withdraw ?
– The whole of the statement reflecting on the honorable member for Capricornia.
– All right. I withdraw it.
– I would remind the Prime Minister that the Presiding Officer must look to the head of the Government for assistance in the maintenance of order. The right honorable gentleman has made a very serious reflection on the honorable member for Capricornia, and
I think that he will see that it is his duty also to apologize.
– Very well; I withdraw the remark, and apologize.
– Is the Minister for Works and Railways in possession of the return he promised of the revenue and expenditure in the traffic branch of the transcontinental railway; and, if so, will he lay it on the table?
– The return is completed, and I shall have an opportunity to lay it on the table to-day.
– Has the Prime Min ister, in his official capacity or otherwise, made any representations to the Secretary of State for the Colonies with regard to representation by Britons at the Stockholm Conference? If the Prime Minister did make representations, what were the terms?
– I did make representations. I have not a copy of the cable here, and I do not know that if I had I should be justified in stating what it was, because it was a secret communication to the Secretary of State. I shall, however, endeavour to get the cable, and having done so will read it; but, broadly, it was to the effect that I did not believe in the Stockholm Conference, and did not think that there ought to be British representation thereat.
– I wish to ask the Prime Minister, in the absence of the Assistant Minister for Defence, if it is not a fact that, on the motion of the honorable member for Riverina, this House determined some months ago that the Government of the Commonwealth should lay the foundations of a stud farm for the breeding of Defence horses. In view of the dispersal of magnificent studs in the Old Country, and the consequent availability of the best blood in the world, will the Government avail themselves of the opportunity to obtain some of this stock with which to establish a stud farm for horse breeding for Defence purposes?
– If the honorable member will supply me with some data, I shall be gladto make inquiries.
– Will the Prime Minister confer with the Minister for Defence, and will his Government confer with the British Government, with a view to securing for Australia and thus retaining within the Empire the blood-horse studs of Britain, which have taken centuries to establish, instead of allowing them to be dispersed throughout the world?
– Yes, I shall.
– Will the Government consider favorably a suggestion that municipal councils and other public bodies in rural districts should be moved to convene public meetings for the purpose of reading the Government’s Proclamation relative to the strikes, and in order to give the public an opportunity of passing resolutions in support of law and order?
– As the Proclamation is directed to all citizens, the Government will be glad to avail themselves of the services of any municipal or district council for that purpose.
– Last week I asked the Honorary Minister a question relating to the transfer of infantry recruits to the artillery, but the Minister, in furnishing a reply at a later date, attributed the question to the honorable member for Adelaide. Will he see that the matteris corrected in Hansard? .
– I understand that the correction has already been made.
– When does the Prime . Minister propose to lay upon the table a copy of the agreement between the Government and the Colonial Combing and Weaving Company, which was promised a week ago?
– I will lay it on the table now.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Prime Minister, upon notice -
-The answers to the honorable member’s questions are as follow: -
General Murray’s Commendation : Commonwealth Bank Interest on Soldiers’ Pay.
asked the Minister representing the Minister for Defence, upon notice -
With reference to the reported statements attributed to Brigadier-General Sir Robert
McC. Anderson that General Sir Archibald Murray, recently commanding in Egypt, had told him that he (General Murray) would rather lose a division of other troops than a brigade of Australians, will the Prime Minister, in justice toGeneral Murray, cable to him to ascertain if the statement is correct?
Mr. JENSEN (for Mr. Groom).The Minister does not propose to take action as suggested.
asked the Treasurer, upon notice -
Whether he can inform the House what rate of interest is being paid by the Commonwealth Bank on allotments of pay which are being paid into the Bank on behalf of soldiers on active service abroad?
– The Governor of the Commonwealth Bank has furnished the following reply: -
Interest at the rate of 3 per cent. per annum, calculated on the minimum monthly balance at credit, is allowed on allotments of pay paid into the Commonwealth Bank on behalf of soldiers. The usual interest bearing limit of £300 is suspended in the case of soldiers, and interest is allowed on the full amount to the credit of bona fide military depositors who are on active service abroad.
asked the Prime Minister, upon notice -
Whether the Government has come to any decision with regard to uniformly closing all bars for the sale of intoxicating liquor throughout Australia at 6 p.m. ?
– No. The matter is being considered.
asked the Minister for Trade and Customs, upon notice -
In the interest of the farmers, and in view of the absolute need of up-to-date tractor cultivation, will the Government consider the offering of a prize or a bonus to any engineering firm who will place on the market a convertible motor car that can be converted into a lorry for carriage and into a tractor for cultivating the land?
– The matter will be considered.
asked the Minister for the Navy, upon notice -
Are there any officers in the Navy Department with the necessary experience of building merchant vessels; if not, in the interest of public expenditure, will the Minister employ officers from outside the Department who are possessed of the necessary qualifications?
– There are already officers in the Navy Department who are qualified ship constructors.
asked the Minister representing the Minister for Defence, upon notice -
Mr. JENSEN (for Mr. Groom).The answers to the honorable member’s questions are as follow: -
asked the Prime Minister, upon notice -
Willhe consider the issuing of instructions that all shops, warehouses, and purveyors of fixed-price foods should have placed in a con spicuous place a list of the prices of all fixedprice foods sold by them in order that the public may know the correct price to be paid?
– The matter is receiving consideration.
The following papers were presented: -
Public Service Act - Promotion of A. J. Rutherford, Postmaster-General’s Department.
War Precautions Act - Regulations Amended -Statutory Rules 1917, No. 182.
Wool Tops - Contracts and agreements for sale and purchase between -
Commonwealth Government and Whiddon Brothers Limited.
Commonwealth Government andThe Colonial Combing, Spinning, and Weav ing Company Limited.
Colonial Combing, Spinning, and Weaving Company Limited and -
Mitsui Bussan Kaisha Limited.
Iwai and Company Limited.
Whiddon Brothers Limited and F. Kanematsu.
Debate resumed from the 10th August (vide page 1016), on motion by Sir John Forrest : -
That this Bill be now read a second time.
Upon which Mr. Tudor had moved -
That after the word “ That “ the following words be inserted: - In the opinion of this House the Bill is utterly inadequate, and signally fails to place upon wealth its due share of the expenses of the war.”
– After the mild excitement that we have had a discussion of the provisions of the War-time Profits Tax Assessment Bill should have a soothing, if not a salutary, effect on honorable members. Personally, I do not intend to offer myself as the necessary sedative, as on Friday last I had practically concluded what I had to say about the Bill at this stage. The other matters to which I shall address myself are rather matters to be discussed in Committee than on the motion for the second reading. I wish to refer once more to the fact that the measure seems insufficient for the purpose for which it was introduced, the total amount of money which the Treasurer anticipates to receive from the imposition of the proposed tax hardly warranting the introduction of the Bill. I wish to say also that the taking away, by means of a war-time profits tax, of 75 per cent. of the excess profits gained during the last two years of the war period is, perhaps, the worst way in which money could be raised. Members are at one in thinking that the heaviest taxation should be levied on war profits; but if we tax. at the rate of 75 per cent. excess profits which are not war profits, we shall be taxing heavily a small section of the community, and following a course prejudicial, and possibly ruinous if carried very far, to the country’s interests. Like all the other countries engaged in this terrible war, we shall have shortly to face the most serious commercial and industrial position with which we have yet been confronted. There is now taking place an enormous destruction of the working capital of the community, and the task of reconstruction will require all the energy, organizing ability, and capital which can be devoted to it. Even then, it will prove almost overwhelming in magnitude and danger. If we are to succeed, we must maintain and restore our necessarily lowered credit and capital, so that the community may be in a condition to apply its energies to the production of wealth. Putting aside the proposal to tax war profits, let us deal with the Bill as a proposal to tax profits that are not war profits, but have arisen from greater skill or good fortune in the conduct of business. If you tax such profits at the rate of 75 per cent., you do the utmost to weaken the springs of energy and enterprise. For that reason, as I said on Friday last, the only justification for so enormous and confiscatory an imposition as this is that it is a tax on war profits, and on war profits only. If it is not such a tax, it should be brought as near to that definition as possible. There are many provisions in the Bill to which I shall refer in Committee; but I appeal to the Minister in charge of it to adopt the course which alone will enable it to be made workable, and to be applied with justice, and that is to make it appear, on the face of it, that its object is to tax the profits which have arisen by reason of the war, and to tax nothing else. Such taxation should apply to all persons who have derived such profits, without, any exemption whatever.
– My attitude in regard to the Bill will be easily and briefly stated. On the 8th December last I expressed the view that a measure such as this is not calculated to accomplish the results desired by the people. I object to this Bill for the reasons for which I objected to the last Bill. It is not what it represents itself to be, nor what the people had a right to expect, nor what they think it is. The people and the Government are of opinion that it is perfectly right to tax war profits made in war time.
– Profits made because of the war?
– Yes. This Bill has not been framed for that purpose; and if it had been, it would be rather a reflection on us than anything for which we might claim credit. There is a peculiar anomaly in the fact that during war time a section of the people should be able to so increase prices as to make exceptional profits. Surely where patriotism was anything better than what Dr. Johnson called it, “ the last refuge of a scoundrel,” it would be impossible for any man or any company to reap rich rewards in profits during a period of national struggle and danger. It is to our shame and disgrace, and indicates our inability to meet the systems that are operating in the world to-day, that there should be war profits; but during this, as during every previous war of which we have any knowledge, the same thing has happened. We have had in Great Britain, Russia, France, and Germany, exposures of enormous profit making, and in to-day’s newspapers there is an instance of the way in which America, who is now our Ally, took advantage of our National necessities earlier in the war. In one factory alone the British people are now making a profit of £8,000,000 over the prices charged by American manufacturers for the same goods. If the Bill sought to minimize the possibility of profit making during the war, there might be some attractiveness about it, but neither in the measure nor in the speech of the Treasurer do I find any reason for thinking that it will put a stop to the making of profits during war time.
– If no profits were allowed, all businesses would be closed.
– I hope to reply to the interjection later in exactly the terms that I used on the 8th December last. I wish to know what is to be done to prevent the making of profits during war time. I am more desirous of stopping the profiteer than of taking part of his excess profits. The Treasurer, in his secondreading speech, correctly pointed out that the profits made because of the war in Australia are iu a different category from those made by manufacturers in the Mother Country or in Canada, where huge Government orders for the manufacture of munitions have been placed. Australian merchants, having had no such orders, have made profits, not out of the British Government, but out of our own people. Our war expenditure has been about £100,000,000, and I cannot imagine that it has .been distributed through the various channels along which it has flowed at a less profit than 5 per cent. The Treasurer proposes to secure £1,000,000 of this £5,000,000 of profit over a period of two year3. It is a rather significant sidelight on the proposal that the Treasurer, in seeking for £9,000,000 to make up the deficit provides for. wartime profits taxation amounting to £1,000,000 for -two years, and for £500,000 by taxing widowers and single men between the ages of twenty-one and forty*five years. No matter what may be the underlying motive of the latter tax, the public will regard it as economic conscription, as intended to force young men between the ages of twenty-one and fortyfive years to enlist.
– It is a tax on all between those ages, not merely on eligibles
– The Treasurer has not yet made a definite statement regarding the proposal.
– No doubt there will be many exemptions and extensions, but in the public mind the idea is rooted, and I think quite correctly, that this pro-; posed tax on single men and widowers without children is another effort, not so much to raise revenue as to force men to enlist. I do not think the Treasurer should adopt any such measures. Rightly or wrongly the country has declared against conscription, and the Government have been fairly honest, and the Director-General of Recruiting particularly honest - I give them credit for it - in pointing out what the Government’s policy is. If that is true in regard to one aspect of conscription, it ought to be equally true in regard to the financial aspect. However, I do not wish to labour that point, because when the proposed tax comes before us we shall have an op portunity of objecting. My point is that £5,000,000 has been made in profits out of expenditure on the war. The Treasurer says that he sees his way to take only £1,000,000.
– I will take all I can get, but I am not sure of the amount. This sum is in addition to the income tax which they all pay.
– May I remind honorable members that the Prime Minister, when making his Ministerial statement on the 30th August, 1916, said -
There must be, as far as humanly possible, equality of sacrifice. Wealth has its duties; it owes all it has to the State, and must be prepared, if necessary, to sacrifice that all to the State. Many wealthy men have responded nobly to the call of duty; others have not. But they cannot be allowed thus to evade their responsibilities.
All other considerations must be swept aside. One great principle must now govern our every action. Whatever is necessary for the salvation of the country must be done; and, since we are calling upon men to sacrifice their lives, we ought not to, and shall not, hesitate to compel men to sacrifice their wealth.
– There is nothing wrong about that.
– No; the House approved of the idea then. Does the Treasurer still approve of it ?
– That is what is taking place to-day.
– Does the right honorable gentleman ask the people to accept this War-time Profits Bill as an indication of the intention of the Government to compel wealth to accept its share of its responsibilities in connexion with the war?
– It is one means. Those who make money must pay some of it to the Treasury.
– The Treasurer must admit that if this is ‘one means it is a very feeble, harassing, and unsatisfactory method. I agree entirely with the right honorable member for Flinders in questioning whether, if the Treasurer’s estimate of receipts from this- tax is based upon reliable figures, the Bill is worth having.
– A million pounds not. worth having ?
– The Treasurer need not put it that way. It is not a question of whether a million pounds can or cannot be got, but whether this is the best way of getting it.
– I think it is a very good way. Those who have made the money must pay some of it.
– I agree that those who make money should pay, hut I do not think that this Bill represents the best way of making them do that. Already, with very good reason, there is considerable restiveness amongst the commercial classes generally because of the multiplicity of returns demanded by the Federal and State Governments. This war-time profits tax will involve an additional burden. More returns will be required, and if the particulars sought by the Treasurer in the Bill are insisted upon they ‘will involve practically another delving into business methods, the employment of a number of clerks who will do nothing else but resurrect old returns, and look through accounts, and even then there will not be the slightest guarantee that the results will even approximate what they ought to be. Companies are too clever nowadays, and accountants are too agile, not to be able to so arrange their balance-sheets as to practically hide their profits. It is almost impossible to actually discover tha percentage of profits made by any ordinary company, although we do get occasional glimpses of what is taking place. For instance, these are the war profits made in connexion with the shipping industry in England : -
The profits were £50, 000, ‘000 in excess of the capital. That indicates what is taking place in the Old Country. But I do not suggest that the same sort of thing is happening in Australia. I do not believe that the shipping companies or the manufacturers in Australia are making the same profits as are being made on the other side of the world. They have inflated prices and placed fictitious values on commodities, but so far from the Government doing anything to protect the people .against the rise of prices, this Bill not only says in effect, ‘ ‘ We will take some of your profits from’ you,” but practically encourages men to make more and more profits.
– Does the honorable member say that this Bill is inequitable?
– I do.
– Do you know that the Brisbane Chamber of Commerce says that it is equitable ?
– I have received a communication stating that the Brisbane Chamber of Commerce has passed a motion to the effect that the principle of the taxation of .war-time profits appears to be equitable. I have no objection to the Chamber of Commerce expressing that view, but surely I may be allowed, with all humility, to hold a different opinion. I say now, as I said on the 8th December last, that I do not like the principle of this tax. If money is required there is an easier and less harassing way of getting it.
– Let us hear it.
– I shall repeat what I said last year to the previous Treasurer on this matter, as reported in Hansard, page 9629, vol. lxxx. -
– What is the honorable member’s alternative? He believes, I suppose, that we should make provision for returned soldi el’s.
– Absolutely. My alternative is to pile up the income taxation. I would take income, but not capital. The suggestion to take capital has already had an effect upon investments. I think that the Government should discourage “ wild-cat “ proposals; but everything possible should be done to encourage investment in enterprises making for “ the development of the country and the employment of its people.
I say that the tax is inequitable because it will hit people who have not made profits on account of the war, although they have made profits in war time. I know of businesses which were in a bad position prior to the war, but, having changed hands and new methods1 having come into operation, they became converted from losing into profitable undertakings. Their profits are being made during war time, .but are not made because of the war. They are not made through the supply of any commodities needed for the war; yet the owners are to be penalized because they have made a success of their business. This tax will be inequitable also because it will make it more difficult to get ,people to invest in industries. With the possibility of such a war-time profits tax operating, what company or individual would launch out into expenditure in the establishment of new industries? In the Bill there is nothing to encourage industry, but everything to discourage it. No honorable member of the House would be prepared to invest money in starting a new industry, because the profits he might make would be taken from him.
– There is a 10 per cent, reserve.
– I know there is a 10 per cent, reserve and a £200 exemption. But the alternative, the increase of the income tax, is so much easier, that there is no necessity for this impost. That brings me back to the point that business people will be further harassed by this additional investigation of their books, and that there will be another expensive Department created. We shall be simply, piling agony on agony without any correspondingly satisfactory result. For an additional income -tax or super-tax the machinery is already in existence. We have the officers and the returns, and all we have to do is to compute the additional tax. Against such a tax as I am suggesting nobody would complain, because the loyalty and patriotism of the Australian people is so developed that no honest man would object to any equitable tax imposed for the purpose of doing justice to our soldiers.
– Does the honorable member think that profits made as a direct result of the war should be levied on only to the same extent as profits* made in the ordinary course of business, and not traceable to the war?
– The amount of profits directly traceable to the war is so small, comparatively speaking, that it is not worth while establishing new machinery to net a share of them, especially when the Government could achieve their desire so easily by means of the income tax.
– The profits are confined to very few people.
– That supports my argument that there is no necessity for this Bill.
– The businesses may be few, but the profits may be considerable.
– I suppose the Treasurer has some grounds for his estimate of £1,000,000 for two years’ operation of this tax. But even that estimate does not justify this Bill, the harassment of the commercial community, and the introduction of new machinery. That estimate must include the tax on not only profits made because of the war, but also the larger portion of profits made during war time, but not directly traceable to the war. If we deduct from the total profits the amounts made during the war, but not traceable to the war, we shall have but a very small amount of war profits to be taxed.
When I was discussing this matter last year, the honorable member for Flinders (Sir William Irvine) asked how I would give effect to my suggestion in regard to the limitation of pro- / fits. I pointed out then, as I have to point out now, that with an income tax on the one hand, and the fixation of prices on the other, we could practically, if not wholly, prevent the making of profits during war time, and also protect the public from inflated prices. We have the machinery at our disposal at the present time, but the Government have made but little honest effort to fix prices. I quite admit all the difficulties associated with such an effort. I know, too, the evolutionary aspect of the movement. This war, however, ha’s made very easy many things which were previously considered impossible. The fixing of prices has been accepted by every country to-day as necessary to secure, not only success in the war, but the protection of their own people. If we associated with an income tax the fixing of prices, we could achieve a much better result than would be possible under this Bill, and could achieve it at much, less cost.
– It could be done more equitably under this Bill than under the income tax.
– We may agree to differ on that point. This Bill will not help us in any way to reach the people whom we desire to reach. If it is true - and I think it is true to only a limited extent - that we have in Australia people who are making money out of the war, then, to my mind, we can get at them only by subjecting them to an income tax both hot and strong. There are in Australia to-day people who are making huge profits, not directly out of the war - not by supplying goods to the Imperial Government, nob by manufacturing shells or anything of that sort - but by. purely artificial increases in the prices of commodities. We want to put a stop to that sort of thing, but we shall not do so either by an income tax or a war-time profits tax. There is only one way of accomplishing our purpose, and that is by so severe a limitation of prices as will prevent people making profits during the war.
– A limitation of profits.
Mr.FINLAYSON.- Quite so, and we can only limit profits by limiting prices. I see no other way of achieving our object.
I was interested in reading the other day that Mr. Henderson, who was, until very recently, a member of the British War’ Cabinet, had said that if we had tried to get compulsion of wealth, the war would have been over before the Bill was through the House of Commons. . If this Bill was even an instalment of a conscription of wealth, as we understand the term - and I confess it is almost impossible to give a definition of what is meant by ‘ conscription of wealth ‘ ‘ - there would be some satisfaction in the minds of the people. But this Bill does not propose to tax wealth. It does not propose to hinder profiteering, or to put any limit to profitmaking. It does not propose in any way to prevent people amassing as much wealth as they can. It says, in effect, to such people, “You can go on making profits - you can go on putting up prices as much as you like, but let the Government have a share of the loot.”
– They would not make any profits if the Government proposed to take all profits. They would not work for nothing any more than the honorable member would.
– I have pointed out that the very fact that the Government propose to share the loot with the profiteers is not going to encourage what we want more than anything else, and that is the utilization of capital in enterprises and industries so as to make wealth. If I thought this Bill would help in that direction, I would support it. I can find in it, however, nothing that would help such a thing.
– Under this measure we can help to do what the honorable member suggests only by providing for liberal exemptions.
– I am entirely with those who disapprove of the proposed exemptions. There should be no exemptions whatever.
– So that the honorable member wishes to make this, not a War Profits Bill, but a War-time Profits Bill.
– I do not desire to make anything of it. I do not believe in the principle, and am not in favour of the Bill. As I have already said, it is a fraud, since it is not what it pretends to be.
The Newfoundland Upper House has rejected a Bill for the taxation of business profits arising out of war revenue. That Chamber, I suppose, is a fair replica of most of the Upper Houses in the world. I know that the British House of Lords was not very favorably disposed to the War-time Profits Bill, but it had to make the best of it. Mr. Bonar Law, in a parliamentary paper, says that the number of income taxpayers in the United Kingdom increased from 1,200,000 in 1913-14 to 3,200,000 in 1916-17. What has been the increase in the number of income taxpayers in Australia during the war period ? I believe there has been a very general advancein the incomes of business people during the war. Why should not the Treasurer avail himself of the Income Tax Act, with all the machinery now athis disposal, to reach the money so made ? By means of the income fax he could raise a million with much less trouble to himself and the community than would be possible under this Bill.
– And with practically no more expense.
– With no increase on the present expenditure.
– In that event, a lot of people would be penalized, while many who have made war-time profits would escape.
– No one escapes an income tax.
– Would the honorable member levy income tax on the incomes of enterprises like the baser metal companies and shipping companies at the same rate as that imposed on incomes generally ?
– I certainly would make the basis of income tax payments practically the same all round. I would do so for the reason that it is difficult to distinguish between income derived from any man’s individual exertions and incomes derived from his being associated with other men. There is certainly something to be said in favour of the man who makes his income by his own individual exertions rather than by the employment of the brains and the, abilities of other men. Admittedly there is a difference, but, after all, the income comes from the same people. It is made practically in the same way, because individual application must apply all the time. I do not think there is room for making these differentiations, which at all times cause trouble and annoyance to the Government Departments as well as a good deal of heart-burning on the part of the people affected. They are more of an annoyance than a help to the Government Departments.
I notice with considerable interest that Mr. Booker, M.L.A., of Queensland-
– Is he a good Labour man, or is he a colleague of the honorable member for Wide Bay (Mr. Corser) ?
– He was a colleague of the honorable member for Wide Bay. On 11th August, 1914, he said -
I have discussed the question of prices during the last few days with a great number of cattle and sheep breeders, and I have not met one man who has not stated that he would be prepared to sign an agreement fixing” the price for the output during the war at the mean basis price of a week previous to the outbreak of war. That is the sentiment in the heart of almost every cattle and sheep breeder.
– There is nothing wrong with that.
– It is a very fine sentiment, with which I heartily agree.
– The Queensland Government would not allow what would have been a patriotic action on the part of the meat and wool producers if they had agreed to accept for the period of the war the prices in operation at the beginning of the war.
– The price of meat at that time was high.
– It was then 25s. per cwt., whereas it is now about 45s. per cwt.
– What is the honorable member’s authority for those prices?
– I have taken them from the Sydney Bulletin. In commenting on Mr. Booker’s statement, the Sydney Bulletin wrote -
The price was then 25s. per cwt. ; in Queensland now it is about 45s., and still there is an outcry against the Ryan Government for so fixing prices that the northern meat grower is making nothing by comparison with the southern pastoralist. Familiarity with war has bred contempt in the profiteer for most of the fine patriotic sentiments it started off with. But that is no reason why the instinctive justice of the early sentiments should’nt still be recognised by the Government, which has to finance the war.
The world is deluged with war, and there is trouble, sorrow, and difficulty in all the affected countries. However anxious we may be to see the end of the war, there is only one opinion in the minds of honorable members, and that is that we should secure a speedy and honorable peace. While the war lasts, there is one class in the community who may have a different opinion ; and though that class is small, it exercises wonderful power and influence. I refer to that section which, in our own and every other country, is making money out of the war. Selfishness is stronger than their patriotism; and the consequence is that while the masses of the people are feeling the burdens of the war - facing the taxation, sorrow, suffering, and sacrifice - these few others are making profits. Cannot we find some method whereby this profiteering may be put a stop to? The opportunity is easier in Australia than in any other country, because, as I pointed out before, we are not directly interested in the manufacture of any of the necessities of the war. We are more concerned about keeping up the food supply, and are not in the same position as some of the other countries, where there are huge contracts, with enormous opportunities for money making. We are more in the nature of a people who are being bled to pay for those contracts in other countries, rather than getting any backward flow from that expenditure of money; other countries are growing rich at our expense. The unfortunate thing is that, even in Australia, though we have not those direct opportunities, there are a number of people who are getting richer and richer in consequence of the war. This is not directly because of the war, but they are able to take advantage of the fact of the war to increase their profits. That is not a position that Can commend itself to honorable members on either side, nor one that would appeal to the honest, intelligent mind of any citizen. I am more concerned about finding a way of stopping these profits than I am about permitting people to go on making them, and then imposing taxation. Prevention is better than cure, even in profiteering in war time.
– Would you not take any of the profits from these people ?
– Yes; but by a different method. I have already quoted a reply that I gave to the honorable member for Grey (Mr. Poynton), when Treasurer, last December, that my alternative then, as it is now, was to use the income tax for this purpose, and to fix prices. As I have said, my attitude in’ regard to this Bill is easily and briefly stated. I am trying to find out if it represents one way of winning the war. I have promised that I will assist the Government in every possible way to win the war ; .and if the Treasurer tells me that this Bill is necessary for that purpose, I shall have to support it. I cannot see, however, how this measure is going to help to win the war; but I do see in it tremendous opportunities for annoying the public, harassing the business community, and doing in a roundabout way what we could accomplish in a direct way. Therefore, I am prepared to oppose the Bill.
– It was the policy of the last two Governments.
– Quite so; but I was opposed to that policy then. I know such a measure was part of the policy of the Labour party at the last election ; but I was quite frank with my constituents, and said that, so far as I was concerned, I did not place any value whatever on a War-time Profits Tax Bill, either as a means of raising revenue or of prevent ing profiteering. There is nothing in the Bill to prevent people making money.
– And when there is a chance of taking some of the profits, you suggest that we should not do so.
– That is not so; but I would take the profits in another way.
– An income tax would penalize everybody.
– Not necessarily, because we could impose a super -tax. I agree with Mr. Arthur Henderson, who, quite recently, just before he became a member of the British Government, said that if Great Britain tried to impose compulsion of wealth the war would be over before the Bill was through the Houses of Parliament.
– In what way would that affect the Germans ? It is absurd !
- Mr. Henderson’s statement may be absurd in the opinion of the honorable member, but I think that what was in his mind, as it is in the mind of all of us, was that there are a number of people in -the community who are making much profit out of the war, and who will, be the more satisfied the longer the war lasts. Even the British Government has introduced a Bill to tax war-time profits, and estimates to receive from this source £200,000,000 during the current year.
– But in England they are making munitions of war, and we are not..
– The British Government estimates to receive that amount during the third year on an 80 per centi. taxation, though they know that the profit making is going on all the time.
– The English measure is on exactly the same principle as our own, although ours is a litle more liberal.
– The fact that . something of this kind is necessary in England is no reason why the same thing should “be imposed here. We have almost slavishly followed the precedent set us by the British Government in our war legislation.
– In this Bill?
– And in other Bills. A Daylight Saving Act was passed in England, and we immediately rushed one through here, only to discover later, what we ought to have known .at the time, that the meteorological conditions there are quite different from our own. The position of England in regard to war profits is not at all a- basis for similar legislation here; the same standards are not in operation. If honorable members could show that profits are being made here on the same lines as in England, there might be a- justification for following the British precedent.
– Is there a business firm in this or any other city that has not marked up prices on the stocks they had in hand?
– That is quite true ; but how is the Bill going to stop them? What the Bill really says is, “ Go on making profits, and as fast as you make them, give us our share - go ahead!”
– Is not a tax of 75 per cent, better than doing nothing, as the honorable member proposes ?
– I do nob suggest that we should do nothing. On the contrary, I say that what we can do more easily is to increase the income tax, and stop the inflation of prices.
Mir. Corser. - And stop importations?
– I place no limit on my desire to stop importations, because the more we can manufacture in Australia what we need for ourselves, the better for the country.
– Quite so, if we can do it.
– We cannot do it) to-morrow, but we can prepare to-morrow to do it next year; and in this connexion the Bill will not help us. The measure is not what it pretends to be. It, will not impose a tax on war profits ; and it is going to be a serious handicap to people who are carrying on legitimate business in Australia. It will not do what we desire in the way of limiting the price of the commodities of life; it will not help the Government to obtain revenue, or the people to establish and carry on their businesses more easily; but it will cut right across everything that is helpful and useful, and will build up another Department to harass and annoy the public
.- It is desirable that every member sitting behind the Government should state his position in regard to any measure that is introduced. So far as I am aware, the Bill will pass the second reading without a division, and it is only fair that the Government, and the Minister in charge, should know exactly where their support comes from. If a division be taken, I shall vote against the second reading. It may be said that, in the past, I have been a fairly good parliamentary hack, and a good party hack, too - that I have usually followed the lead set me ; but there have been occasions when I have found it necessary to vote against the Government behind which I was sitting; and this is one of those occasions. I do not oppose the Bill on the grounds which have been put forward by many of the honorable members who have spoken, but I follow, to a great extent, the line adopted by the honorable member for Brisbane (Mr. Finlayson), with whom I am somewhat in accord. The Bill makes no attempt to provide for what the people of Australia are asking for. The people are asking us to prevent exploitation ; but there is not a word in the Bill which attempts to provide against exploitation. As a matter of fact, the measure gives a licence to the exploiter. It is a wicked and immoral Bill.
– I would have been very thankful for that opinion when the honorable member was Minister.
– The Bill was not thoroughly discussed during my term of office, and in any case, I had not studied the Bill in all its aspects at that time. I am sure that if the Treasurer would scan the measure with that moral microscope that he has put on to other measures, he would have taken it into another room and committed it to the flames. The Bill is objectionable. It favours the exploiter. The Government first says to the exploiter, “ You have had a very good year. We have allowed you to do what you liked. We have permitted you to squeeze whatever profits you could out of the public,” and the Treasurer then cries “ halves.” Then, next year, they say to him, “ You have had a better year. I suppose you knew what was proposed, and have provided for it; therefore we want a bigger ‘ whack ‘ of your profits. We ask for three-fourths.” The Bill should really be called a measure to encourage’ governmental and commercial depravity. It establishes a highly immoral principle in saying that a section of the community may exploit all other sections, and that the Government will come in later on and take a share. If we are to tax the people, let us do it in a straightforward way by increasing the income tax.
In some parts of the East, the practice of farming out taxes is pursued. An individual, or a number of individuals, go to the Government and put down a sum of money, for which they get a concession or a franchise to tax the .people. Thereupon they proceed to squeeze the people to the greatest possible extent. Exactly the same principle is followed in this Bill. There is no difference.
– Except that, in this case, the Government are doing it without having contracted to do it.
– Of course we have the option of putting the Bill where it ought to be put. In Eastern communities, the people have not that opportunity; but the people of Australia have a say in regard to legislation, and, as a representative of the people, I shall vote against this Bill. Before the advent of British or French rule in India, the native rulers, during times of plenty, filled’ large granaries with the grain of the country, and during times of famine, retailers bought the grain and sold it at a fixed price. If any retailer charged more than the price fixed by the rulers, he had to suffer the penalty of the bastinado. The victim of the bastinado is laid down on his stomach, and his legs are bent at the knees, and he is flogged on the soles of his feet until, possibly, he is crippled for life. That is how, what would at that time be termed, a barbarous Country dealt with exploiters I suppose the method would be too drastic to adopt here ; but the commercial ghouls who have been fleecing the people of Australia should be dealt with drastically. This Bill proposes to increase the revenue to the extent of £1,000,000. We have heard the Treasurer say, “What is a million? It is too paltry to talk about.”
– The honorable member should give the context of that remark, and what led up to it. In this case, he is anxious to get rid of a million.
– I am merely following the lead of the right honorable gentleman, who said that £1,000,000 was not worth talking about. The Bill does not attempt to deal with the exploiter. About a year ago, I met a business man, formerly a member of this Chamber, who said that he had just met a South Brisbane merchant, who informed him that he had made a profit of £3,000 from matches alone. I wonder what that merchant has made out of matches since then ? The honorable member for East Sydney (Mr. West) will, I think, bear me out in regard to this matter, that is, that a Sydney firm had a warehouse at Glebe Point stocked from floor to roof with corrugated galvanized iron. This iron was sold before the war at under £20 per ton. Immediately after the war broke out, the price increased by 30 per cent., 50 per cent., and 100 per cent., and to-day I do not Snow exactly what it is.
– It is .selling at £80 per ton.
– That is nearly 400 per cent. It is an outrageous profit, and yet this Bill will not hurt these people. As a matter of fact, the Government have given us no indication that they will deal with such people, except by this paltry measure, which I do not hesitate to repeat is an immoral one, because it lays down the principle that a section of the community is licensed to exploit other sections to any extent whatever; and then the Treasurer is to come along and say to these exploiters, “ Let us go whacks.” I have no time for this Bill. The Government are taking an entirely wrong step in introducing such an immoral principle into our commercial life. I shall not speak in regard to the exemptions. They are a matter quite apart from the chief issue, namely, that the people are being exploited, and the Government are making no attempt to prevent that exploitation. I hope that the Bill will be defeated. If I had been asked what attitude I intended to take up in regard to it, I would have unhesitatingly expressed my opinion to any one authorized by the Government to ascertain the feeling of honorable members; but that step not having been taken, I take this opportunity of defining my attitude towards -the measure.
.- To a great extent I agree with the honorable member who has just resumed his seat, that the Government, in taking any percentage of profits, are making themselves the accomplices of the class of people who take advantage of a country’s distress to compel their fellows to pay too much for commodities. Every landlord who raises his rent is an exploiter, and should be placed in Pentridge. Recently I went to a man who was said to have the hardest heart in Melbourne. He is a man belonging to an older faith than Christianity. I approached him in regard to three terraces of houses, and pointed out the unfairness of increasing the rents. He went into the matter, and told me that he had spent a lot of money on the buildings, and that he was only anxious to earn 6 per cent, from them, which he said he intended to get. I left him with the intention of bringing the matter before the House, but I had misjudged him, because he sent for me next day, and said that, having had time to think over what I had pointed out, he had decided that there would be no increase of rents in any of the houses controlled by him until after the war. He also said that the same rule would apply in regard to the property of a company of which he was a member. But he asked, ‘ ‘ Why does not your Government bring in a Bill to prevent any landlord from increasing rents ? Why should you have to appeal to me, as a man, for others? “ I say the same. The Prime Minister, in answer to a question of mine, said that any landlord who put up his Tents should be held up to public opprobrium of the severest kind, but that treatment would not hurt such men. I know of a case of a woman whose family was smashed during the land boom, and who took up the hardest employment possible for a woman, that of keeping a house for board and lodging. Her rent has been increased by 36 per cent., after she has been twenty years in the same house under various landlords, and the other day she received notice that her tenancy was to be ended at the end of the month. The action taken was afterwards regretted. I approached the agents, one of the chief house and land agents in Melbourne, and the principals told me that they were sorry the notice had been sent out, because they had it noted in their books that the lady in question was a most reputable tenant, and had been on their books for years. The Prime Minister spoke of a landlord owning property worth £500, and increasing its value to £1,000, and said that such a landlord would be justified in raising his rent. No one would object in such a case, but the class of whom I am speaking go a little further, if the opportunity presents itself.
In regard to prices, I have seen a list where a certain drug has been sold at a price which is 1,700 times more than what the article was sold for before the wai;. That drug, so far as my informant could state, has not been imported since the war began. Honorable members will see that an increase of 1,700 times runs to something like 170,000. If the Government took half of that profit, it would, to use the expression of the honorable member for Herbert (Mr. Bamford), be licensing the profiteer to continue preying on his fellow-men. To take every pound and every shilling of profits over and above the average earned prior to the declaration of war would be right, and a just punishment on those who had made such profits; but it would be unworthy of the Government and of the Parliament” to become co-partners with those who have made these huge profits, it being a well-known maxim that the receiver is worse than the thief. If we did such a thing, history would point at us. We are blessed by having a wide ocean between us and the scenes of the present terrible fighting, and we should not allow those in our midst who, for the love of filthy lucre, would rob even their’ nearest relation, to take advantage of their situation. It is stated that in the late nineties, when a war with Germany was never dreamt of, Lord Tollemache, during a conversation, asked Gladstone whether he thought that in the event of such a war the shipping companies, if they were paid well enough, would bring enemies to England? Gladstone’s answer was, “ I believe that the shipping companies would, for lucre, land enemies in the port of heaven, if that were possible,” We know some such companies here. I propose now to read a list of companies which have made profits during the present war. It was obtained on the’ suggestion of the Premier of Victoria, and shows in each instance the net profits made in the years 1914, 1915 and 1916.
– Of what use is it to state the profits earned without saying how much capital is invested ?
– I am unable to give that information now. The list to which I refer is as follows : -
The facts mentioned by the honorable member for Herbert (Mr. Bamford) with reference to the increase in the price of corrugated iron are so well known that the Government should certainly take every penny of the increase. If the seller knew that he could only make the fair profit that he made during the three years preceding the war he would then have no incentive to sell at an enhanced price, and take advantage of the needs of his fellow men. Farmers could not buy galvanized iron with which to shelter their wheat, and as a result millions of bushels of grain have been ruined. The statement as to iron not being imported, or imported only tlo a limited extent, can easily be verified by reference to the Customs House. Let a fair profit be allowed on imported iron, but why do not the Government start works for the manufacture of galvanized iron ? They may be able to get from the steel and iron works of the Broken Hill Proprietary black iron that could be galvanized. The suggestion made by the honorable member for Flinders that this Bill should be altered from a war-time profits tax to a war profits tax was made, am afraid, not with the object of benefiting the Treasury. Such an alteration would increase the “difficulties of collecting the tax, and I compliment the Treasurer on having refused the suggestion. War-time profits clearly mean profits made during war time, but profits made from the war would be very difficult to discover. It would be contrary to logic to change the name of the measure.
I still advocate the fixation of prices for the principal commodities. Last year I suggested to the Government that they should display outside every post-office in the Commonwealth a list of the prices that should be charged for wheat, bread over the counter, sugar, and meat. Every caller at the office would see at a glance the price which he or she should pay for those commodities. The notice should also show the name of the officer to whom a citizen should write if charged more than the fixed price. The answer I received from the Minister of the day was that1 the Commonwealth Gazette was hung at the post-office, but any person who tried to discover the locality prices of commodities from the Gazette would be very puzzled. I also suggested that all shopkeepers and purveyors of goods should be obliged to display in a position where it could readily be seen by any cus- tomer a list of the prices fixed by the Government. The adoption of these proposals would prevent a lot of trouble and annoyance. Mr. H. L. Wilkinson, M.C.E., Melbourne University, A.M. Inst. O.E., London, who won the HarbisonHigginbotham Scholarship for a thesis on Economics, is responsible for the first publication of any standard merit in regard to the Trust problem in Australia. That book shows that, in 1907, when flour was sold at £9 5s. per ton, bread was from 5£d. to 6d. per 4-lb. loaf. In 1909, when £11 10s. was charged fop flour, bread was still from 5£d. to 6d. per loaf. Flour is now £10 15s. per ton, that is 15s. less than it was in 1909, and bread to-day is sold at 7d. . To show how the public are exploited, I may mention that, in 1911, when flour was only £8 per ton, the price of bread was kept up tlo 5Jd. and 6d. I recognise that the making of large profits is a stimulus to private enterprise, and that no Treasurer would wish to destroy that stimulus. At the same time it seems to me that this proposed tax does not go even so far as the war profits tax in Great Britain. As reasoning men we have only to ask ourselves: - Would nob the manufacturers and sellers of goods in poor unfortunate Belgium be satisfied to keep their business without making a loss, let alone making abnormal profits, The’ same question could be asked of the people of Servia, Roumania, Montenegro, and of the invaded portion of France, the people of which are fighting for their lives at the present time. In the Homeland, too, apart from the ghouls and vampires who are battening on the English people, how many of those people who have been ruined, would have been content to retain their businesses without making profits? Yet the Treasurer proposes to tax war-time profits only to the extent of £1,000,000 in two years. It seems to me that somebody is seeking to control “ the Government, and unless the Treasurer wisely agrees to an alteration of this tax the Government will in future have the reputation of having invited men in our midst to batten on the community and thin the faces of the poor. Ask any mother who controls the household how she is managing in the face of these increased prices. Ask any father who has to struggle to keep a home for himself and his dependants. One man in Collinsstreet told me that whereas formerly he used to allow £20 a week for his house- hold expenses, not including rent, as the house was freehold, he has now to allow £32 per week. Some may say that that statement is an exaggeration, but from the figures shown me I can assert that that house was not expensively conducted in comparison with the homes of men and women in the same social position. I ask - the Government to act boldly, and to fix prices at which bread, meat, and sugar should be sold, making it a criminal offence to sell in excess of those prices. If the stocks of iron referred to by the honorable member for Herbert (Mr. Bamford) exist, let the Government seize them and sell the iron at a fair value, at which the owners would have been content to sell them before the outbreak of war. I was struck with some words which Demosthenes uttered at a time of war when cries for peace were echoing throughout the community, and some were calling for peace at any price., He said : -
I know well that anything given up in passing from war to peace is lost to the careless side; since, when people generally have once made up their minds for peace, they will not renew the war for the sake of what has been sacrificed; this, therefore, remains in possession of the holders.
I ask the Government no* to be careless in this matter, but to be firm and determined in claiming a larger share of war profits than this Bill proposes to take. I assure the Treasurer that if business people know that their extravagant profits would be taken from them they would no longer have the same incentive to exploit the people. Did I not expose in this Parliament how Angliss, on more than ohe occasion, supplied diseased meat to the unfortunate sailors and soldiers on the transports? I have not been yet able to discover from which abattoirs the diseased meat came. The municipality of Melbourne denies that the meat was ever in its abattoirs.- I know that Angliss has private abattoirs. I am told that when I speak publicly, my words are reported, but I say everywhere what I am saying here. I cannot say that Angliss wilfully supplied diseased meat, but it was supplied several times in large quantities. On one occasion the quantity was 1.000 lb. of bullocks’ liver, not all, but a certain percentage of which was diseased. It was a Commonwealth officer who prevented those livers from going into consumption on board the transports. If Angliss, or his foreman, knew that those livers were diseased, then he should have been strung up; hanging, indeed, would have been too good for him. This man Angliss is making vast profits. His name is included in the list from which I quoted a few moments ago. He has had the cool cheek to refrain from taking steps to clear the abattoirs on which suspicion has been cast. The Minister for the Navy has not yet informed the House from what abattoirs those livers were taken, but, thanks to the action of his predecessor in office, the honorable member for Bass (Mr. Jensen), no more livers are allowed to be put on board transports. We are entitled to ask what was the position of the public in regard to that diseased meat. Who was to examine it for their protection ? Who was responsible for its leaving the abattoirs as it did ? And this is the type of men who are battening upon the people and raising prices.
All history goes to show that every great revolt or revolution has been preceded by a period of great unrest. Would any one be astonished to read in to-morrow morning’s newspapers that the King of Spain had been shot, aud that Spain had declared for a Republic ? There is a spirit of unrest throughout the world. Efforts are being made by men who perhaps are idealists to make the world better, and to uplift humanity generally. Such efforts are being made, not only in Russia, but in Germany, although in the last-named country they are being controlled by terrible Prussian discipline. I hope, as we all do, that the Prussian military pOwer, with all its evil consequences, will be utterly destroyed. Not only in Russia and Germany, but in England to-day - where only one out of every three men has a vote - reforms are being demanded. I hope that this Government will not let the idea get abroad that they are indifferent to the increases in the prices of / foods that are taking place. The increase in the cost of living is of the greatest moment to every little home in Australia, and of the utmost significance to those who. look at the signs of the times. Great generals have said that an army moves on its stomach, and I hold that that nation which is best fed and best housed will, other things being equal, do most for the civilization of the world.
I wish now to refer to the position of proprietary companies under this Bill. At the outset I would c.ongratulate the Government on the provisions of subclause 7 of clause 14, which deals with such companies. A proprietary company, under the Victorian law, may consist of only two or as many as fifty persons. Such companies, I understand, are not compelled to publish balance-sheets, bub the Commissioner of Taxation can require them to supply him with them. . I am confident that the Commissioner and his staff will scrutinize very carefully all increases in the salaries of the officers of such enterprises. Sub-clause 7 reads -
Provided that in the case of a business which has been established since the commencement of the present state of war, (a) if the business is owned by a company, the total deduction allowed for the remuneration of directors shall not, unless the Commissioner otherwise directs, exceed the sum of £1,000.
That means, I take it, that the directors of a company, no matter how successful it may be, shall not receive fees exceeding a total of £1,000. Legal minds, however, can discover technicalities and loopholes whereby the State is often deprived of its rights. Let us suppose that A, B, C, and D form a proprietary company. In order to evade this provision, would it not be possible for A to put his name in the salary list as that of manager, re- .ceiving so much per annum; for B to set out that be was receiving so much per annum as accountant; and for C to put himself down as inspector of works; and D to describe himself as chief clerk, with certain salaries allotted to each position! In that way they might be able to drive the proverbial coach and four through this clause, increasing their salaries, and thus reducing the amount of profits taxable under the Bill.
I will not definitely state that I shall vote against the Bill. I am deeply disappointed, however, with its provisions, and particularly with its exemptions, which are many and far-reaching. Why, for instance, should medical men be exempt? Owing to the many wounded soldiers returning to Australia, and needing medical assistance, the incomes of medical men may be materially increased. Sir Anderson Stuart, who occupies a very high position, stated recently that there were in Australia medical men who were earning from £10,000 to £15,000 a year. Such incomes include profits which surely’ ought to be taxed. Every medical man to whom I have spoken on the subject has said that the medical profession ought not to be exempt. Shopkeepers and others with whom I have conversed say that no one should be exempt. If one were to throw an apple over to the Government side of the House, as a rule, one would hit at least three lawyers, and I should like to know why the legal profession should escape this taxation. Iti is certainly unjust that they should be exempt. If in Committee an amendment is moved to eliminate all exemptions, I shall have pleasure in voting for it. My only regret is that the people themselves cannot determine this question. If the men and women of Australia could vote upon it, their verdict, I am sure, would be that there should be no exemptions. They would say, “ Let every profit made during this accursed war over and above the average profits of the two preceding years’ be taken by the Treasury.” And the Government would earn honour by adopting that decision.
Some time ago, when the Barrier mines threatened to close down, I brought before Mr. Andrew Fisher, who was then Prime Minister, a proposal which I thought would save Broken Hill. The Barrier, as we all know, depends upon the output of its mines. If there were no mines there, there would be no Broken Hill to-day. Shortly after the outbreak of war I addressed a letter on the subject to the editor of the Age, and it was published on its war page. In that letter I advocated, as I do to-day, that the Commonwealth Government should take over all metals at the price at which they were being sold in England before the declaration of war. I pointed out that in consideration of the Government taking their output at the pre-war prices, the Broken Hill companies should be compelled to work full time. In that way Broken Hill would be saved. If the companies refused this offer, I suggested that the Government of New South. Wales, by the law of eminent domain, should take over the mines and carry them on at the risk of the shareholders. Subsequently the Broken Hill - Proprietary Company asked me to give them an interview. I gladly acquiesced, and Mr. Baillieu at that interview empowered me to make to Mr. Fisher an offer on behalf of the company to give the Government all metals at 30 per cent, less than the selling price. Silver was then 2s. per oz., so that “the Government could have purchased the silver output of the company at ls. 4 4-5d. per oz. Every ounce of silver coined will give a return of 5s. 6d. in silver currency. The Government would thus have made a profit of 290 per cent, in respect of every ounce of salver minted. I pointed out to Mr. Fisher that he could hand over to the company £1,000,000 in Australian notes, and in return obtain silver, won by Australian miners from Australian ‘ soil, which would give him a silver- currency of over £2,900,000. I showed him how in that way he could purchase every good silver mine in Australia at the current, market prices. The offer made by the Broken Hill Mining Company was a splendid one, but Mr. Fisher would not accept it. To-day the company is getting 3s. an ounce and over for its silver, or a very high percentage in excess of the amount it was willing to take from the Commonwealth’ Government. The increase also applies to their zinc, lead, and concentrates. I would urge the present Treasurer to fix the prices of these metals, allowing, of course, a fair profit to the companies.
Then again, I would urge the Government to fix the price of wheat. No one has more sympathy with the farmer than I have. There is no member of this House who went on the land before I did. Forty-five years ago I pegged out a block in Gippsland, the most heavily timbered part of Victoria, if not of Australia. The only returns I got from it were a fair-sized chest and good health, for which I am grateful. While there I was like a man in prison. The circumstances were such that I was helpless and hopeless. Is it not reasonable, therefore, that I should have every sympathy for the farmer? I would urge the Government to fix the price of wheat, and to fix it at such a rate as will give the farmer a good profit. No one in this House will deny that the farmer is worthy of a fair return for his labour. In Chin,a the farmer ranks practically next to the Emperor, and one of the first duties of the Emperor was to plough a furrow in order to show how high the farmer ranked in the esteem of the whole community. My desire is that the farmer in Australia shall be equally respected. The price of wheat at the station to-day is, I believe, 4s. 3d. Let us fix it at 4s. 6d. per bushel. Three thousand lbs. of wheat will make 2,000 lbs. of flour, and 2,000 lbs. of flour will make 2.600 lbs. of bread, the flour, taking up 600 lb. of water which is sold in the shape of bread. We could fix the prices for flour and bread so as to allow a fair profit. Page, of Elsternwick, when fighting the combine of millers, was able to sell his bread at Id. per loaf less than did other bakers who were controlled by the combine. It is no use contending that there are no combines here; and it ought not to be said of this Parliament or Government that they are the friends of combines, trusts, and syndicates. On the other hand, the Government ought to go down to posterity with honour; and their only way is to prevent any undue rising in the cost of food, rent, and clothing. That cannot be brought about by means of this Bill, though if the Bill be only a commencement, I wish them good luck, and will vote for any clause that tends to its improvement. I shall not, however, vote for the percentages proposed in this measure. The figures of Sir Alexander Peacock, who has had, perhaps, as much experience as has the Treasurer of the Commonwealth, show very clearly what profits have been made; and why should’ we allow these enemies within the gates, who are really more despicable than those with whom we are in open combat? In another day these people would have been’ put up against a wall and shot, or hanged. Napoleon, with that magnificent intellect of his, saw that there was a possibility of trusts and combines ruling the world; and his criminal code provided that any man, or body of men, who bought goods for the purpose of selling them at an undue profit, should be fined 20,000 francs and imprisoned for twelve months. There was no alternative but fine and imprisonment, so that the rich man could not escape; and if the offence were committed in regard to foods, such as flour, bread, or wine, the fine and the imprisonment, were doubled. What would Napoleon have done to such men and firms as appear in the list ‘ I have read? For a man who, either himself, or through his manager or foreman, sells diseased food for profit, there is, to use the words of the Minister for the Navy, no punishment too heavy.
– And that should apply at all times.
– Absolutely; and I think that if a vote were taken I should not find a single honorable member against the suggestion I have made.
We do not -know how this war will end. I am doing my best for voluntarism ; and I am proud of what Australia has done.
No country in history has done so much; and it is the duty of the Government, in ruling for the benefit of the whole of the people, to see that these undue prices are not charged As the honorable member for Herbert (Mr. Bamford) has asked, what is the use of letting traders charge these high prices, and then fining them, perhaps, half the profits? I would prefer to see very little garnered under this Bill, . if a proper list of prices were prepared and published. It may be thought that I am unduly harping on this question; but it is the question of the hour. Give the people outside food, shelter, and clothing, and we shall have a happy community, but place obstacles in their way and we shall misery, unrest, revolution, and disaster. If Queensland can, by management, cause meat to be sold at half the price paid elsewhere, there is something wrong generally; and the Commonwealth Government, who can make all the other State Governments subservient, ought to ascertain how this is done, and do it. If, as I hope, the list I have read of the profits made, appears in Hansard, the people outside will realize that more should be done than is proposed by the Bill, and I shall support the Government to that end.
.- The Bill proposes to tax profits made during the war, and not only profits made out of the war. The honorable member for Kooyong (Sir Robert Best) mentioned that this legislation had been withdrawn in New Zealand; and I presume the Government have made some inquiries- as to the reason for its failure there. However,’ there is the best reason in the world why the Government should honour the promise recently made to the electors. Much attention has been drawn to excess profits made during the waT; and the honorable member for Melbourne (Dr. Maloney) is inclined to think that these have been made in a manner that does not do credit to the business people of Australia. But, to a great extent,, the cause of these high prices is more in the distribution than in any extra charges made by people in business. If the trade unions will drop their cry for nationalization., and use their organizations and money in forming co-operative stores, much of the trouble about high prices would disappear; and I make that suggestion to those bodies, which, by adopting it, would be able to buy direct from the farmers, and supply their own members. It is very necessary that legislation of this kind should be introduced, if only for the purpose of meeting the charge that the Government are not willing to make wealth bear its fair share of taxation. The Treasurer has said that much ‘will be required for repatriation purposes; and I believe the Government have made an honest attempt to raise part of the money in this way.
I do not regard this Bill as being complete from any point of view, but accept it simply as an- instalment, to be followed by something in the way of an addition to the income tax. It is perfectly clear that the measure cannot deal with every known cause of excess profits. In many instances high profits made during the war have been made possible simply owing to the fact that, as in the case of shipping, there has been an unusual demand,’ The members of the Opposition should recognise that high prices ruled during the term of the Labour Government, and that they had just as good an opportunity as have the present Government of dealing with the matter. I consider that every man who has made excess profits during the war ought to be taxed pretty freely ; and I regard the provisions of the Bill as generous. A man who has had the good fortune to maintain his pre-war profits is to be .envied when we consider the unfortunate people on the other side of the world. Companies which are allowed 10 per cent, are very generously treated, and I think that the provision referring to the exemption of £200 should be deleted.
The Bill should serve one of two purposes. If the Treasurer has made an under-estimate of the revenue to be derived, we shall all welcome the addition ; and if, on the other hand, there has been an over-estimate, it will convince the people of Australia that the term ‘ ‘ profiteers “ cannot well be applied to the business people of Australia. During the election, our opponents were constantly saying that huge profits were being made out of food and other commodities; and the. Bill will serve to put the true facts before them.
– Your own leader has said that. .
– My leader, apparently, now sees .things through different spectacles from those he looked through when on the other side; and the same applies to honorable members on the other side now. They offer criticism of this and other measures introduced, but when they were behind the Labour Government things appeared quite in a different light. That, however, may be part of the game of politics. Seeing that such a song was being made of the profits raised in war time, I think it was up to the Labour Government, when they had the opportunity, to do something. J The honorable member for Melbourne (Dr. Maloney) read out a long string of figures which he regarded as showing excess profits; but these figures really conveyed no intelligent idea to the House as to where the profits came from. If excess profits have been made to such an extent, then, apparently, the Treasurer’s estimate is going to be considerably exceeded ; and I do not think there ‘ is one of us who would regret to see huge sums rolling into the Treasury as a result of the tax.
The exemptions proposed under the Bill are to some extent justified. I allude particularly to the case of fruit-growers and dairymen, who suffered much from the dry years 1912-15. Dairymen, as a rule, are men of small capital, who have to work very hard, and frequently find their herds depleted in years of drought. In any case, I do not. think dairymen would be likely to come under the Bill; but, considering that it is the policy of the Government, and in the interests of the country, to promote primary industries, it is right that they should be exempted. Then, again, gold-mining has played a very important part in the history and development of the country. In nine cases out of ten, a man who invests in gold-mining does not make a “pile”; and he has only to stick to it long enough to find that his calls exceed the dividends. A gold-mining company may have a series of non-paying years, and it would be unfair, under all the circumstances, to take a slice of the profits made in any particular year. The price of coal, copper, and other minerals has risen considerably during the war, and we could reasonably expect the companies who have secured these profits .to pay some share of them. I do not agree with the exemption of professional men, such as doctors and lawyers. They can well afford to pay the taxation proposed in the Bill, and I hope that the measure will be altered in Com- mittee in that regard. It is not my purpose to say much about the Bill, but I really thought that it was time some one rose to say a good word for it. I regard it as an honest attempt on the part of the Government to reach that class ‘ of people which honorable members have condemned very roundly for a ‘considerable time past. Even if the Treasurer’s estimate is not exceeded, it will be a very handsome addition to “the revenue. On the other hand, if his estimate is exceeded, the revenue will benefit accordingly. I hope that honorable members will do their best to improve the Bill in Committee. I feel that the National Government are national in their policy as well as in name, and I believe that they will be willing to accept any amendments ‘that are likely to improve the machinery of the Bill, and make it work more satisfactorily.
– My present intention is to vote against the Bill, lock, stock, and barrel, not because I do not desire to see the exploiters made to pay for their exploitations, but because I do not think ‘the Government have any intention tlo tax wartime profits in this Bill. Much has been said as to the distinction between war and war-time profits. Of course, they can be separated very easily. A profit which is made in an ordinary business during war, but which is not brought about by the war, is not a war profit. A profit which is brought about immediately as the result of the war is a war profit. What influences people mostly, not only’ those who support honorable members sitting on this side, is the fact that, while a large percentage of the community, men of business and men who have invested money in different lines, have lost heavily during the war - there is not an honorable member in this House but can place his fingers on dozens of cases of business nien upon whom the war has had the effect of injuring their businesses - those who have made money during the war are allowed to make profits by exploiting others. The people who realize this must reflect and say that the Government are acting not in the interests of the people, but in the interests of a, section of the community. If the Government really meant business they would set out to tax war profits to the fullest extent, not from a spiteful point of view, and not merely for’ the purpose of getting revenue, but with the object of preventing people from making profits during the war. The revenue that is likely to accrue from this form of taxation is nothing in comparison with attaining that object.
The unrest prevailing in Australia, in Great Britain, on the Continent, and in America does not arise so much from the fact that the people are against war as it does from the fact that they feel that, while they are suffering and their kith and kin dying, some people are making money out of the war. It is not very pleasing for a man to know that’ while he is endeavouring to get his wages raised and- to have his conditions of work improved, Parliament proposes to allow people to put up their prices so that, no matter how high his wages are raised, he is in exactly the same position as before. If a man’s wages were to be raised from 8s. a day even to £8 per day, and the exploiter to go on aa he has been doing during the last three or four years, it would be useless to increase his wages even to that extent. The majority of the electors in my electorate do not earn more than £3 per week. How can a man, in the present state of affairs, support himself, his wife, and three children on £3 per week, even if he gets that wage all the year round ? The majority do not earn it each week all the year round.
I am not in the habit of quoting figures, and I do not desire to quote those of Mr. Knibbs. ‘ They are the best he can give, and they generally .come to hand too late to be of service, but I do not think that I would accept them as a guide. All I know is that every commodity has increased in price. Naturally, rents have gone up. A great deal has been said about bread. I admit that bread is cheaper here than in any other part of the world; but in no other part of the world would bread be so dear as it is here if there was as much wheat available as we have in Australia. The people would not tolerate it.
– What does the honorable member consider should be the selling price for wheat?
– I am quite aware that the man who grows wheat is just lib the man who works on the wharf or makes a pair of boots. He is a workman, and should be paid for his work.
– He is nothing but a white slave.
-.- We have all had the opportunity of observing men working at growing wheat. That is not what I am talking about. I am’ pointing out that there is a superabundance of cereal production in Australia, and that the price of bread is at a figure which would not rule in any other country if there was the same quantity of wheat available there. I admit that the man who grows the wheat must be just ‘as much considered as the man who’ makes a pair of boots, but I do not propose to be drawn into a decision as to the relative position of the two, though I say that I would rather be a farmer than make boots.
– If the honorable member talks like that he knows very little about farming.
– And the honorable member knows very little about boot making. I would like to take him to some boot, or snob, shops in Victoria. From the point of view of comfortable living, the farmer’s occupation is the more healthy and the more desirable. It is unfair and unmanly for honorable members - and the honorable member for Echuca (Mr. Palmer) -is one - to try to make one section of the people believe that they are worse off than another by saying that one trade is more injurious to health than another. Whatever occupation a man follows, he has certain rights which should be given to him.
I was saying that it was a marvel how a man, with a wife and three children, could live on £3 per week, and I was dealing with the price of bread, but, to my mind, the greatest commodity in regard to which the people in Australia are being robbed is meat in all its forms, whether it be fish, flesh, or fowl. In fact, it is a marvel to me how people can buy it. I have seen meat marked in butchers’ shops at 8d. and lOd. per lb., but I am assured’ that meat at this price is tough and tasteless, and is not edible. If a person is anxious to buy any meat at all edible, especially beef, he must pay between ls. 3d. and ls. 5d. per lb. If an ox costs £26 or £27, one would naturally say that beef must be dear, . but by the time the beef gets to the consumer the £26 or £27 is increased by 120 or 130 per cent. Other ‘articles of consumption, rice, sago, and tapioca, cost a great deal more than before the war. Even oatmeal, of which we have plenty in Australia, has increased in price. I do not knew whether any one put in a stock of clothing, socks, and boots before the war, but if he did he was lucky. The cost of many of these articles has gone up 60 per cent. and 70 per cent.
Let us approach the consideration of this subject dispassionately, if we can, and try to place ourselves in the positionof a man, with a wife and family dependent upon him, who is earning only £3 a week. There are some personswho will say that such a man should not expect to have carpets on his floor, or curtains before his windows, or a cloth on his table, and butter with his meals. Not many honorable members of this House would say that. There is one present who might, and, perhaps, one or two of those who are away would do so. Many, however, would say that the wage-earner has no right to go to picture shows. Now, while many business people are losing money, and the wage-earner is in a very difficult position, there are individuals and firms making great profits. According to information supplied to the Victorian Parliament by the Premier of this State, the profits earned by 265 firms in Victoria last year exceeded the profits made by them in the first years of the war by some £3,800,000.
– We are going to put on a thundering big tax.
– There is only one way of satisfying the people in this matter. Those who are in what was my own line of business beforeI entered Parliament have suffered considerably during the war. Their best customers have gone to the war, leaving behind those who do not care much about their personal appearance. It hurts them to see others make war profits big enough to pay for motor cars and villas.
– Does the honorable member think that the Bill will getat those who have made unfair profits?
– No ; and it is not intended to do so, though I believe it will bring in twice as much revenue as the Treasurer estimates. In my opinion, the Government; should take every cent of profit over a normal amount. That would prevent the unfair raising of prices. If the Government takes 50 per cent. of the excess- profits above 10 per cent., or even 80 per cent. of them, there will still be an incentive to raise prices; the only panacea for exploitation at the present time is for the Government to take all profits above a certain percentage.
– That would destroy all energy and enterprise.
– I would not allow even a £200 exemption. To my mind, it is enough to exempt 10 per cent. of the net profits of the business after managerial and other expenses have been deducted. A man should be very well pleased at making so much profit as that, especially at a time when millions of men are dying at the Front to enable him to do it. The trouble that exists in Sydney and Melbourne, and in Russia, America, and Great Britain, is due to the knowledge of the workers that they have been exploited, and that no Government has reallytried to prevent this exploitation. Lloyd George has only trifled with the subject.
– The taxation in England has increased five-fold since the war.
– The Treasurer stated the other day that, although Mr. Bonar Law had said that capital which he, had invested in the shipping business had returned him an enormous profit . during the war, he had lost money. No doubt that is so. But there are thousands who are making money out of the war. No doubt the Treasurer regrets that as much as I do, but why does he not attempt to prevent it?
– The Bill has been introduced to prevent it.
– The Bill does not touch the fringe of the subject.
– There is an income tax in addition to this War-time Profits Tax.
– The Treasurer is allowing people to retain more than fair profits.
Sitting suspended from 6.30 to7.45 p.m.
– I was saying that there was justifiable indignation because of the fact that, whilst some people are making money out of the war, others are suffering hardships.
– I think we should have a quorum.[Quorum formed.]
– The Government say that they desire to do a fair thing, but they are evidently determined to use all the methods, military and otherwise, to suppress any demonstration that is made against the present state of affairs.
– I know whose the fault will be if rebellion does come about.
– Order ! The honorable member is straying from the question before the Chair.
– My opinion is that the present disturbance is caused by the fact that all necessary commodities are at such high prices that people cannot live on the wages they receive to-day. But not only are the Government determined to allow to escape the men who have actually robbed the people, but they are throwing other men out of work. I suppose I shall be told as usual that the men leave their work. Of course they do. All through the ages the workers have had to leave their employment in the hope of getting better pay afterwards.
– The honorable member does not say that the workers have struck for more pay.
– The honorable member knows that any effort made to interfere with the conditions of the workers is likely to be injurious to them.
– Order! The honorable member is not now discussing the Bill.
– The question of taxation, especially as it applies to wartime profits, is so closely connected with the present industrial disturbance that I cannot dissociate the two things. I wish to show that we could settle almost the whole of the turmoil by effectively taxing excess profits. If people were not allowed to keep those profits they would not endeavour to make them.
– What is your objection to the Bill ?
– It does not go far enough. Profiteers are to be allowed a profit of 10 per cent., and of all profits above that margin they are to pay an increasing percentage .to the Treasurer. That is an inducement to exploit the people, and to still further raise prices. I am showing that, whilst the Government refuse to tax these people adequately, whilst they are allowing them to male enormous profits, they are throwing other men out of work. The Treasurer estimates to expend on the war from revenue during the current financial year £13,109,000. To get that morey the Government are throwing men out of work instead of keeping them employed on reproductive works, and insuring chat the money is spent in Australia.
By that action they are accentuating the position brought about by the high charges for the necessaries of life. If the Treasurer were to allow that money to be expended in Australia on reproductive works we should not have the turmoil with which we are confronted today. I ask the Treasurer, having regard to the peculiar position in Australia , to-day through lack of employment, does he not think that when men are out of work, and other men are doing badly in their businesses, those who are exploiting the people should not have their excess profits taken from them ? However, i suppose the Ministry have made up their minds on this question, and will use the whip on their supporters. I know that there are honorable members on the Government side who indorse my ideas regarding this Bill. They know that if the present condition of affairs is to continue weshall have more trouble.
No Government seems to have grasped firmly the problem of dealing with excess profits. The British Government, in the first place, were the cause of the whole trouble by allowing the shipping companies to amass such large fortunes out of their ships. Now, for purposes of taxation the profits are based, not on the value of ships in pre-war time, but on the inflated value of ships to-day. Ships have risen in price bv 1,000 ‘per cent, to 1,500 per cent., and the profits are being based upon those high prices.
– The companies could not replace the ships for any lesser amount.
– That is not the point. A ship worth £20,000 in pre-war times has been sold for £300,000, and the profit of the company is based on that £300,000 value instead of on the original value.. If the British Government had given a proper lead in this matter, the Australian Government might have followed suit. Because of the excessive charges for shipping, our wheat is left in Australia to rot and be eaten by mice, and the high cost of living is the result. The farmers of Australia are getting 4s. 1½d. for their wheat, whilst farmers in other countries are getting up to lis. But, it costs more to carry the wheat of Australia in ships with inflated values than the farmer receives for his wheat. The British Government, had they liked, could have commandeered every one of the ships, and allowed the companies 10 per cent, on their real value. The inflated value of shipping has been passed on to
Australia. The present Government is like all other Governments. An honorable member asked, this afternoon, why the Labour Government did not do what I am suggesting. The reason is that the men who were in the Labour party then, and have since left it, would not let us do what we desired. The Prime Minister is the principal offender of the lot.
– Why did you sit behind him ?
– We had to support those who were in office then or accept a Government that would be worse. The Prime Minister is the man responsible for the excessive profits being made in Australia. He has power to stop profiteering. He had strength of mind enough to do many things which few others would have attempted, and yet he has allowed the profiteers to exploit the people.
– And you had not sufficient strength of mind to resist him, even though you had the numbers.
– The honorable member is trying to be funny, but the position in Australia to-day is not comic; - if is tragic. What I desire is the proper taxation of war-time profits. I desire legislation that will protect the public from the exploitation of profiteers by providing for the Government taking all war-time profits, over and above a certain percentage. I shall not vote for the second reading of this Bill, but if it be carried into Committee I shall there assist others in the effort to improve it, and if it be so improved as to be of any value, I shall then vote for its third reading.
.- So far as it can be regarded as representing part of the burden of the war, I am quite prepared to see the community, and particularly the non-combatant section of the community of Australia, bearing its full share of taxation. I cannot say, however, that I welcome this measure, since I believe it to be both imperfect and narrow in conception. I do not look upon the Treasurer, who introduced the Bill, as having conceived it. I view it rather as being one of the inheritances of our party. It is almost the adopted son of the party. Its name has been changed, but still it is unpopular. It first saw the light of day as a “ War Profits Bill.” Later on it came along as a “War-time Profits Bill.” For its origin, however, we have to look beyond the Treasurer. The first War Profits Bill to be introduced in any part of the Empire after the outbreak of war was the Imperial measure. We in Australia have followed closely and almost devotedly most of the war legislation of the Mother Country. Britain set out to deal with the inordinate profits that were being made by the ship-owners and manufacturers of munitions in the United Kingdom. Australia, on the other hand, stands in quite a different position in relation to the war. With the exception of the vessels recently acquired, not one ship Australian owned has carried any food-stuffs or munitions to the Mother Country. As a- matter of fact, no munitions for the war are being manufactured here. In these circumstances, therefore, we cannot have the same reasons that Britain had for the promulgation of a Bill of this character.
The present Prime Minister of Great Britain, Mr. Lloyd George, as a very astute man, recognised that in order to obtain, and obtain quickly, the munitions that Britain required, it was necessary to offer the premium of immense rewards to the great manufacturers of the Old Country to give up their previous occupations and to convert their great organizations into huge arsenals. Having induced them to do that, he very astutely cut them down to a reasonable price by legislating to take over a large proportion of the war-time profits secured in the manufacture of munitions. Such a condition of affairs does not obtain in Australia, nor are the conditions prevailing here at all applicable to the United Kingdom.
This is neither a War Profits Bill nor a War-time Profits Bill. It is, in my judgment, a measure to impose a wartime profits tax on some of the people of Australia and to exempt many more who are earning profits even greater than those who come within its scope, provided only they were also in receipt of huge incomes or profits before the war. I should like, in the first place, to endeavour to show the Treasurer that all owners of capital - all lenders ‘ of capital - who are not solely engaged in the Business of lending money, will escape the incidence of this tax. Notwithstanding that since the war the rate of interest has increased from 4½ per cent, to 6½ per cent, on the stable securities of this country, there is not a lender of money in Australia whose business is not primarilythat of lending money but will escape paying a tax on the increased interest under the Bill. It is very questionable also whether some of the great houses whose money lending is merely incidental to the carrying on of their business will not escape this taxation.
It is surely a fundamental error in principle that such a great increase should bake place in the value of money - an increase incidental, of course, to the war - and that the profits so made should not come within the scope of the Bill. Let us analyze a few cases. Let me take, by way of example, the position of the great insurance companies. Their business is not that of money lending. Their primary business is insurance, but we know that they are the great - domi-‘ ciles of money in the Commonwealth. It is questionable, however, if they will come within the scope of the Bill. Then again, take the position of trustee companies. Their money-lending transactions are but incidental to the carrying on of their business; yet they are fiduciary institutions which take the place of business men who do lend money. They will, however, not come within the provisions of this measure. I might instance also the position of members, of the legal profession, who have the control of trust funds, but I do not expect that in that respect they should be dealt with as trustees.
Let us come to another fortuitous type of man - the man who has finished the carrying on of his life’s business. He liquidates his life’s work, and decides to put his money into the most stable form of security that he can obtain in Australia. In other words, he decides to invest in land. He purchases real estate; and lets it as landlord, but whether it be broad acres, residential properties, or business shops in the heart of the city, unless his business be solely that of a landlord buying and letting properties or dealing in land, I doubt very much whether he will come under this Bill. If the Government conceive it to be the duty of those who, in war time, earn profits in excess of their pre-war returns, to contribute their quota of the money required for the carrying on of the war, then I say that, after making provision for the rectification of a few anomalies, there is no good reason why the whole of the non-combatants of Australia should not come into the fold of taxation.
I cannot understand what justification there is for the exemption of individuals or groups of individuals. We have laid it down - and I am one who believes in the principle - that when a nation is at war all its resources should be organized for the conduct of that war. That principle has been put to the test recently, so far as the man-power of Australia is concerned. I regard that as only a section of the obligation that’ the country owes. The man-power is one section, but all the other resources of the country should be marshalled and put at the disposal of the country.
I am not satisfied with this Bill, and as I have already said, I do not believe it was conceived in the mind of the Treasurer. I regard ib as the adopted son of the party. In my judgment, it is a misfit* intended to apply only to a section of those who are earning war-time profits.
– Would the honorable member strike out all exemptions ?
– I shall answer the honorable member’s question in this way : In 1914 - the year when the war broke out - this country suffered one of the most devastating droughts in its history. As the result of that drought, I believe we lost, an the very least, £100,000,000 by reason of exhaustion of stock and nonproduction of produce of all descriptions. The very face of the earth was bare and unyielding. I would, go ;the length of saying that all who suffered from the drought should have a fixed period for recovery, so far as this Bill is concerned. In the case of such people, however, this Bill practically proposes to tax capital instead of earnings, or what would really be income in the period of recovery.
I do nob propose at this stage to discuss the machinery of the Bill ; a more suitable opportunity will offer when the measure is in Committee. Like the honorable member for Flinders (Sir William Irvine), I think the Government are proposing to place an impossible task in the hands of the gentleman who is to administer this law. The House is not attempting to define it’s object. Under the Bill it is not a war profit, nor is it a wartime profit that we are proposing to tax in respect of the whole of the people of Australia. The Bill is so drawn that any sensible person looking at it, and knowing anything of the commercial, financial, and rural interests of the Commonwealth must recognise that grave injustices are going to be done under it. The Commissioner is to be given very wide powers. The National Government has been very fortunate, since the inception of its direct taxation policy, in having as its Taxation Commissioner a man so eminent and so broad-minded as was the late Commissioner. In his successor - the gentleman who is to-day filling his place - the Government have a very capable, able, and earnest officer, who I believe will give the taxpayers a fair deal. But the time may, and will come, no doubt, when the Treasurer, beginning to find that he is getting short of money, will think that too liberal a construction is perhaps put upon the Act by the Commissioner administering it. The Commissioner will then be elbowed to secure more revenue from this source, and, in my judgment, his interpretation of the law may become less favorable.
This Parliament ought to be capable of declaring what itsets out to do. Let it make known its intentions in clearer and more definite language than is employed in this measure. As it stands, the Bill is imperfect. It is not right that a Minister should pass over his responsibility to the Commissioner to such an extent as is here proposed. If the Bill goes through in its present form, the whole burden of responsibility will be placed on the Commissioner. The responsibility is one which Parliament should take. We should be more specific and definite in stating what we seek to accomplish.
– It leaves the responsibility upon him, without any guid- ing principle.
– That is so.
– The Commissioner’s great powers are chiefly in respect of new businesses.
– He has very much wider powers in relation to other matters. Under one provision he has power practically to use his own discretion.
– There is a definition of “ capital “ in the Bill.
– I venture to say that that definition is altogether wrong, and that if it be allowed to stand it will cause grave injustice to many. Clause 16 provides that -
The amount of the capital of a business shall be taken to he the amount of its capital paid up by the owner in money or in kind, together with all accumulated profits invested in the business, with the addition or subtraction of balances brought forward from previous years to the credit or debit respectively of profit and loss account.
If the Bill remains as it is, what will be the position of those in business? They will get only the benefit of the 10 per cent. exemption in regard to their own capital in the business. The very world revolves on public credit; nation lives on nation, and” individuals on one another; and it is the custom for the fortunate man to lend to his less fortunate brothers. The taxing master knows that many of the great business undertakings of this city could not survive for half a year if the borrowed capital were with-‘ drawn. A full allowance of 10 per cent. should be allowed on all capital in a business.
I must say that, in my judgment, the Treasurer, as far as the Bill will allow him, has shown a disposition to meet practically every interest which he believes has a genuine grievance. I, along with other honorable members, have brought some cases under his notice, and he has given us most considerate treatment; and what I complain of is that the Bill, as constructed, will not permit him to do justice. In respect of capital, 10. per cent. is allowed by the Treasurer, and honorable members, particularly those opposite, say that that is excessive. To-day the value ofmoney, apart altogether from investments in business, is from 6½ per cent. to 7 per cent. on overdraft. There is a margin of 3 per cent. for the risk of carrying on the business, for losses, and for management; and that is a very small sum in a great commercial community.
– If the Treasurer had stuck to the 6 per cent. and 7 per cent. that anomaly would not exist.
– I agree, but a grave injustice would occur, and I congratulate the Treasurer on recognising that industries cannot go ahead without some inducements.
– Eight per cent. is a very good inducement. Half the industries are not earning 8 per cent.
– That makes the honorable member’s position so much the worse, because the business man gets no margin at all, practically, for carrying on the business. A man with no risks, no organization to provide for, and no industrial troubles, gets the benefit of 6 per cent. and 7 per cent., while, in the other case of a business, it is said that 8 per cent, is sufficient under the Bill.
– He gets 8 per cent., and then half the profits.
– Of course, he does, and I think the Treasurer has done well to allow that margin. As the Bill is constructed, it adversely affects the man who has come through a drought period; and it does not matter whether he be on the land or in business, for every business suffers with the rural industries. In the stock business, of which I have had some experience, it is customary for business firms to arrange credits for stockowners, who pay 6 per cent, and 7 per cent. Under the proposal of the honorable member for Grey (Mr. Poynton), there would be no inducement whatever for a country auctioneer to employ any capital except his own.
– How is that got over in the case of the English Act?
– The conditions in Great Britain are altogether different from the conditions in Australia. “I would be very slow to make any plea in the House or elsewhere that any person should evade his proper financial obligations at war time. I do not believe in the Bill; but if the Government regards it as a vital part of their financial proposals, it, of course, becomes an obligation on Government supporters to see that the money is obtained by this means. The Bill is an attempt to build commercial principles on a political Bill, for this Bill in Australia is mainly polltical.
– That is pretty rough !
– It has been in the “window-dressing” of three different Governments, ‘ but it will not fit, ‘ in an equitable way, the financial and commercial interests of this country. The result is that the incentive to- business is removed immediately you take over 75 per cent, of the profits, and credit will be restricted.
– You are referring to profits that are not derived from the war ?
– Of course; I am referring to the carrying on of all the .financial and commercial operations of the country, very few of which have direct relation to the supply of war requirements. In England, Mr. Lloyd George, with a view to the delivery of the war goods at the earliest possible moment, gave an excessive reward for the provision of munitions and equipment, and got back a fair portion by taxation. We must recognise that a tremendous financial exhaustion .has gone on in every country, and we are still in the middle of a great ‘ war, the end of which no one can see. We here, however, have not yet felt this devastating exhaustion of capital, because we are living on an artificial inflation of internal credit. ^ But we must reach the stage when we must either continue to carry on under these artificial conditions, or come back to financial soundness and stability
I take it that the Treasurer wishes tq see new wealth created in order to make up for this exhaustion and to meet our enormous interest debt. Further, we have to remember that 350,000 to 400,000 men will have to be restored to citizen life, and this will cost a large amount of money. This Parliament has two great obligations: first, to keep the men backed up on the battlefields, and, secondly, to compensate them reasonably for what they have done on their return. To meet the circumstances the wheels of every industry, rural and secondary, must spin at top pace. To-day, in this city of Melbourne, at any rate, there is unemployment, and I submit that if we take away the wages fund by taxation under this Bill we shall increase unemployment.
– Would the honorable member allow a man to make any profit he chose?
– If the honorable member looks at our taxation legislation he will find that all our Income Tax Bills are so graded that all are reached, and we could, if necessary, increase the gradation.
Under this Bill a business may be making a profit of £100,000 a year and, providing it has always done this, and that the profit is within 10 per cent, of the capital, it will not come under the Bill. . On the other hand, a struggling stock farmer, who is trying to emerge from the drought period, and in the recovery period has a very good year, may ‘probably find himself called upon to pay £1,000 or £2,000. In my opinion, the Bill is narrow, and allows too many to escape. Every one in business here is having his life and his business defended, and all ought to pay in their proper proportion on incomes.
– What about the exemption of agriculture?
– I say that in effect that is not a complete exemption. What wheat-grower is not also a stock-farmer? He will escape in respect of his agriculture, but will pay as a stock-farmer; and how is he going to divide the two branches of his business? I dare say, however, that the taxing master will be astute enough to devise some means. Personally, I think that the portion of the farm which, for the time being, is under agriculture will be exempt, while the balance carrying stock will be liable. In appearance there is an agricultural exemption, but in reality there is not, because in respect to the very horses he breeds and uses for agriculture the Bill will apply. However, the farmers of the country are as patriotic as any other section. Their sons are away fighting our battle, and they have their hardships, but, providing they are given a period of, say, two years or . more to recover from drought, they are prepared to pay their proper share of taxation.
There will be many cases of hardship under the Bill, but the proper place in which to deal with these is Committee. New businesses will.be particularly hard hit. A young business will find itself with hobbles on, unable to move, in the absence of a pre-war standard - it will not be able to move beyond the point that the Treasurer lays down. My experience of taxing measures is that once they are passed they are very hard to get rid of. Once we admit that a principle is right in legislation, it is very hard to get the principle or the measure removed.
– Do you think that under the Bill the only amount to be allowed is 10 per cent. ?
– I am not going back on that old question. If businesses were limited to the 7 per cent, or 8 per cent, that the honorable member proposed when Treasurer, a tremendous amount of incentive to push them ahead would be gone.
– That is not fair to me. The Bill, as it left my hands, allowed for new businesses which would be seriously, affected as high as 20 per cent, on pre-war rates.
– I am afraid the honorable member is thinking more of his position in relation to the Bill than of its effects on the commercial and financial community generally. I am convinced that a tremendous amount of injustice will be done under the Bill, particularly to rural industries. Go through a drought of the kind I have described and you will find that it takes years and years to recover.
As regards old reconstructed businesses previously unprofitable, those who embarked in them in this country knew that for years they would be unprofitable, because they would remain so long in the foundational or pioneering stage, but that ultimately they would become very profitable. Will the Treasurer say how those businesses are to be carried on under this Bill ? When they reach the profitable period they will have to deliver over to him three-fourths of their earnings. We have not reached the stage in the public life of this country where individuals are going to carry on their businesses for the benefit of the community.
– The three-fourths is taken only after 10 per cent, has been allowed.’
– I am referring to businesses that have been reconstructed or launched on a basis that will take a certain number of years to make them profitable. Generally, they come into their own at the end of that time, but, under this Bill, those concerned in them will not be able to get the reward necessary to make up for the continuous losses during the earlier stages. The honorable member for Grey (Mr. Poynton) must know that there are many industries into which men have gone with a certain knowledge that they must stand severe losses for years and years, although, ultimately, when they are put on a sound basis, they will get it all back in big profits. Under this proposal the incentive to carry on businesses of that kind will be lost.
I am pleased to see that the Bill allows credit for new businesses based on patent rights. It has been the policy of this country to protect the brains of men who give it new devices for quickening production. . Ordinarily, the protection is extended under the patent law for fourteen years. Under this Bill the patent is to be regarded as a potential asset, and I hope that, in that respect, both the Treasurer and Commissioner will be liberal. I know of a small industry based on a patent. A family of farming brothers dropped on a simple device. Not much capital is employed, but the profits on an industry of that description have to be substantial in the early days, otherwise we should not have in this country captains of industry like Mr. McKay, at Sunshine. That man started in the most modest way possible, protected under patent rights. I never object to a man making a good profit providing that he employs it m his business, which, in turn, gives employment to the people of the country. That is one- of the reasons why I never object, under the policy of Protection, to a manufacturer getting a good profit. You would never have the bigger wheel of industry if you stinted the manufacturer. If we keep people down to a very low margin of profit we shall never obtain the big producing, commercial, and industrial effort necessary to carry us over the war period without substantial loss. If the Bill restricts1 profits to the pre-war standard, the effect will be the very opposite to what we want. We must make up for the tremendous war losses, and make provision to absorb the fighting men when they come back. To do that, industry must be stimulated.
I notice that no provision is made for the exemption of a man whose business is being carried on while he is away fighting for his country. This must be an oversight, and I hope the Treasurer will see that, as regards personal exertion in his business, a soldier on active service is placed in the same position under this Bill as he is under the Income Tax Act.
– If he has a share in a business which has made larger profits out of the’ war, why should he be exempt ? This is not like the Income Tax Bill.
– Here again, I am afraid the honorable member for Flinders fails to appreciate the very cogent and potent arguments he put forward himself. Take the man who is carrying on stockfarming. There has never been in the history of Australia a period when the returns of the stock farmer have increased as they have since the last drought. I prefer to say “ drought “ rather than anything else, because the immediate cause of the rise in the value of stock was the drought, and not the war.
– Then those are not war profits.
– Not as the honorable member likes to define them, but they are war-time profits as defined in this Bill.
– There is the provision as to pre-war profits to go by.
– Although you have a pre-war standard the increment in value is due to the drought rather than to the war.
– I know all about that.
– I believe the Treasurer has been hit as well as many other pastoralists in this country. I hope that, knowing his own position, and being so well able to stand it, he will recognise that many others cannot stand paying into the Treasury money that they have earned, but that really belongs to the men who gave them credit, and that is not their own surplus money to hand over to the Treasury.
– The pre-war standard will help a good many. That was before the drought.
– The pre-war standard will not be sufficient if a period of non-production has intervened. But for the system of balancing good years against bad, the pastoral life of this country could not have been kept going. Every . encouragement should be given to the pastoral industry. There ‘ appears to have grown up in Australia a contemptuous feeling towards the man who has prospered by grazing.
– Not contemptuous - only envious.
– It has taken the form of punitive legislation.
– That is only among the new generation that knows not Joseph.
– We in Australia are engaged in hawking corn 13,000 miles around the world for less than Id. per lb., although our country is eminently suited for stock raising, and we get 6d. per lb. for beef, ls. 3d. per lb. for wool, and proportionate prices for dairy produce. Yet we are all hastening to grow corn instead of building up our flocks and herds.
From my personal knowledge, I can assure the Treasurer that there is going, to be a great injustice done to grazing and stock farming interests as a consequence of the drought if their recovery profits are to be taken from them. I would suggest to him for a start to give, say, a period of two years to recover from the drought. If, as he says, they will be covered by the 10 per cent, provision, he is giving nothing away; but if, as I believe, their recovery profits will largely exceed 10 per cent., they will be giving to the Treasurer in taxation capital which belongs, not to them, but to the men who have financed them. He will be doing them a good turn by re-considering the drought effect on their industry. Let me give him a specific instance. Many people of necessity, and by the encouragement of all Governments, set to work to obtain increased production from the land. Every Parliament called out to these rural men to increase their production. Many, impelled by the necessity of drought losses secured credit to buy stock. One man lost £7,000 during the drought. He borrowed capital to restock. Those who were concerned in it used all their activities to get’ him the right class of stock, and to get it cheap. He recovered in the first year over £4,000 net. His previous pre-war standard for the very highest of the six years allowed was £1,200.
– Surely in those six years he will get two that were pretty good.
– The very best of the six years that the right honorable gentleman allows him to roam over and pick from was one which gave him £1,200. Under this Bill the Treasurer will take from him, of the £4,000 that he made in the first year after the drought, £1,500, if not more. That money is not his. It belongs to the man who lent him the capital to re-stock, and he wants it to make up the previous loss of £7,000.
– What about tine capital clause)
– That will not cover him.
– Then he is very hard to cover.
– He is; but that does not get away from the injustice of the case.
– If the pre-war standard will not cover him, and the capital clause will not cover him, what will ?
– The point is that he has had a drought in between. He was encouraged by Governments, and impelled by his own necessities, to make another and special effort at recovery. He had his financier behind him, and he was compelled to go at top pace to make the biggest profit he had ever made, to cover his loss. What he has’ made belongs to the man who financed him. It is not his to give.
– If the honorable member will give me particulars of the case I shall look into it.
– I shall furnish to the right honorable gentleman the particulars of six specific cases.
– Under the Bill a man is entitled to make up his losses.
– No. There was an averaging provision in the old Bill, but it has been dropped out. There are wartime losses as well as war-time profits, and if a man’s profits, whether capital or not, are to be taken from him, his losses should be set off against them. I ask the Treasurer to give careful consideration to the case of this man and to that’ of others similarly situated, whether engaged in rural or commercial pursuits.
.- 1 do not know that the right honorable gentleman who presides over the destinies of the Bill. (Sir John Forrest) is abundantly satisfied with the criticism of it that he has heard, particularly from members of his own party. The speeches of the honorable members for Flinders (Sir William Irvine), Wannon (Mr. Rodgers), Kooyong (Sir Robert Best), and others make me think that there must have been a lively time in the Nationalist Caucus when the Bill was under discussion there the other day. Evidently what has been said has made some impression on the Treasurer, because he has intimated, through the press and in reply to questions in this House, that in Committee the Bill will be remodelled almost out of recognition.. The honorable and learned member for Flinders is very dissatisfied with the Bill. He does not like its title. I agree with some of his concluding remarks. He spoke of the great problems that will confront this and every country when the war ceases, and referred to the need for organization. .1 have not the slightest doubt that in the financial, commercial, industrial, and rural occupations all the genius of the community will be needed to make this re-organization successful. Unfortunately, we have not yet commenced it, and when the war ceases every other country will be in a better position than we- shall occupy in Australia.
– This Government has been in office only six months.
– If you scan the pages of Hansard you will find that on this subject I have been like a “ voice crying in the wilderness ‘ ‘ almost since the war began. The honorable member for Herbert (Mr. Bamford) gave the Bill a new title.
– The best it has had.
– He said that the Bill practically indicates that we are trying to force on the country a measure to enable persons to indulge in immoral practices. His opinion concerning the measure, and its failure to deal with the cost of living, has been re-echoed on this side, but there has been a remarkable silence on the other concerning the increased cost of living, which is at the root of the discontent now prevalent throughout the world. It is not only the industrial classes that are discontented; small and even comparatively large business men, and the community in general, are crying out, and the cry will be so loud that the Government will have to pay heed to it. For a long time past it has been my opinion that a condition precedent to taxation is the prevention of the passing on of taxes. The honorable member for Calare (Mr. Pigott) coined a new phrase when he referred to some of the central executives as super-parliaments. I am not afraid of them as super-parliaments. In my opinion, the real super -Parliament in this and every community is composed of those who control the supplies of the nation, and fix the prices of its commodities. Parliament may impose war-time profits taxation, income taxation, or any other taxation, and it is passed on. The Minister for Works and Railways has said that there is a process of filtration by which, with very rare exceptions, taxation passes down until it comes to the bedrock - the workers of the community. We may talk as we please about taxing the rich; this super-Parliament of which I speak - whose powers are greater than the powers of this Parliament in determining the distribution of taxation - passes it on.
– This super-Parliament is not. only greater than this Parliament, but also is well represented here.
– No doubt. Many members would not be here if they had not had the solid support, financial and otherwise, of those to whom I refer. I wish now to refer to some of the remarks of the honorable member for Kooyong (Sir Robert Best). He quoted a few lines from an article by Mr. Raymond Rad- clyffe which appeared in the May number of the English Review. I intend to quote somewhat more extensively, because I prefer to put the view’s of this writer into Hansard in his own words instead of in my own. He writes; -
That traders do add taxes to the cost of goods can be readily seen in the annual reports of the thousand and one limited companies which appear every year. If these companies struck their balances before adding the excess profits tax, we should, perhaps, not be able to point the moral; but they don’t. Almost all give net profits after deducting the tax, and also after deducting income tax, the only exception being persecuted rubber companies, who invariablygive the gross profits, and fight for the tax.
I condemn previous Governments even more than this Government for their inaction in regard to war profits taxation. This taxation should have been imposed almost at the beginning of the war. In the latter part of 1914 the Fisher Government, which I supported, should have done in Australia what the British Government did. The war broke out in August, 1914, and a little later the then Chancellor of the Exchequer, Mr. Lloyd George, introduced a Bill providing for the taxation of war profits, the operation of which was made retrospective from the 1st September, 1914. In Australia war profits were larger at the beginning of the war than they were later, because there were leakages at first which have since been repaired. To continue my quotation : -
Now, what do we find? Nine hundred and thirty-three companies made £61,070,697 in 1912, £70,510,414 in 1913. In this last- the pre-war year - the companies made 11.7 per cent. on their capital. In 1914, there was no excess profits tax, and the first seven months were months of peace - low prices in rubber, iron, and steel; and the last five were months of collapse in money markets, some panic, and falling prices. Yet net profits in 909 companies included in the tables of the Economist were £69,684,531, an increase of 0.9 per cent. on the same companies in 1913. If we take 1915, we find that 928 companies made £66,926,983, a decrease of 3.2 per cent.; but the companies made 10.2 per cent. on their capital. We now come to 1916, in which year the 60 per cent. excess profits tax was in full working order, and the 5a. income tax also doing its best. Have the companies been injured? Not a bit of it. They have never done so well. Nine hundred and thirty-two companies made £86,587,823, an increase of 28.6 per cent. over the profits made by the same companies in 1915. These companies made 13.2 percent. on their capital. Here we have a splendid example of how the excess profits tax works. Every manufacturer has made more money than he ever made before, and has made it after paying all the preposterous taxes.
Later he says -
Provision shops have had to pay more for provisions, and workmen find the cost of living higher; and, when the Budget comes along, we mayfind the excess profits tax raised to 75 per cent., which will automatically raise the whole cost of the war 15 per cent. Nay, it will do more, for it will raise the cost of the workman’s food, and this means discontent, strikes, and then higher wages.
I propose now to quote from the leading article of the Melbourne Age of the1st August, 1917. It refers to the Commonwealth Government, and is on the same lines regarding the matter dealt with by Mr. Radclyffe in his able article.
– Who says that it is an able article?
– The honorable member will find it difficult to dodge Mr. Radclyffe’s deductions, though I do not agree with him that it is useless to impose wartime profits taxation because such taxation is passed on. As I have said, we should prevent the passing on of taxation. There should be some method of limiting profits, or of fixing prices.
– Does not the honorable member believe that all taxation is passed on ?
– The cost of goods is increased. As the honorable member for Balaclava (Mr. Watt) has said, a man who is taxed tries his best to find some other shoulders on which to place the burden, and, as a rule, is successful in his quest, As a rule, the man on the land cannot pass on his taxation. The Age article to which I have referred reads -
The time is steadily approaching when the Government of the Commonwealth will have to choose between continuing its present policy, which is intrinsically a policy of strike promotion and the creation of general tumult and disorder, and adopting a policy scientifically calculated to banish discontent, that is to say, a general policy of price fixing.
Unless the Government do something soon in regard to price fixing, the state of discontent predicted in that article, and the picture presented by the writer in the English Review, will manifest themselves in our midst, and will extend to every section of the community, because people in all classes of life are groaning under a load of taxation which they cannot longer bear, simply because the taxes imposed by the Federal and State Parliaments, and by other authorities, are being continually passed on to the general mass of the people.
– Why take such a pessimistic view?
– It is not a pessimistic view. It is a view shared by everybody who has had experience of financing a household.
– You are always crying “Wolf! Wolf!”
– I am merely trying to relieve the people of the increasing load of taxation that is imposed from time to time. Who pays many of our Excise duties? They are. all passed on.
– Who do you think is going to hear the duties except the people who use the commodities that are taxed?
– It is the last straw that breaks the camel’s back. It is a marvel to many in this community how it is that working-class families manage to struggle along at the present time, and, unfortunately, many of them are the wives and dependants of men who are fighting our battles at the Front. We cannot allow this condition of things to continue. We call ourselves a National, Parliament, and we ought to be prepared to stretch forth our hands to help and succour those who are weak, as we must realize that the people cannot for long re- sist the increasing pressure that is being put upon them. If we wishto make the people more discontented, let a little more of this taxation be passed on, and the cost of living further increased, and we shall bring about such trouble as the Treasurer will regret for many years.
– You have been saying the same thing for years.
– When the honorable member for Capricornia (Mr. Higgs) was Treasurer, I made the same appeal to him, and he admitted that we would have to devise means of preventing taxation being passed on. The same classes of people who have borne the burden of taxation all along are bearing it to-day; and in time of war we are making that burden heavier than ever. It is high time we put our house in order. The honorable member for Kooyong (Sir Robert Best) waxed eloquent over the fact that, after a trial for one or two financial years, New Zealand has repealed this form of taxation.
– It was a rank failure.
– But remember that, although the New Zealand Parliament repealed the War Profits Tax, it has substituted other taxation. A population of about 1,000,000 people is paying in ordinary income tax £1,600,000. There is a special war tax of £3,000,000, and in the last Budget-speech delivered by Sir Joseph Ward the Government announced their intention of imposing an amusement tax, yielding £800,000. They have also increased their revenue from Customs and Excise by £275,000. and from land tax by £500,000.
– You forget that New Zealand differs from the Commonwealth, inasmuch as there are no State Parliaments imposing taxation there.
– I take that fact into account, and I repeat what I have said on previous occasions - that it is about time we reduced the number of Parliaments in Australia. The Treasurer, as one who took a prominent part in the initiation of Federation, knows that the leaders of the Federal movement promised faithfully that the Federation would cost the people of Australia a mere bagatelle. They said that the Commonwealth would relieve the States of so many duties and responsibilities that their expenditure would be considerably decreased.
– Are you advocating Unification ?
– I do not say that I go to the extent of advocating Unification; but I am inclined to prefer the South African form of Federation to that which we have in Australia. The people to-day are groaning under the present load of taxation; and they will demand, amongst other things, a decrease in the cost of living, and in the number of parliamentarians and the fripperies associated with the various Parliaments.
– They did not groan before the Labour party came into politics.
– The honorable member ought to be the last to complain about the Labour party coming into politics. The Labour party has placed reform legislation on the statute-book, and brought into existence institutions that have been the great bulwark of the Commonwealth in this time of stress. Without the Commonwealth Bank and the note issue, the people of Australia would be handicapped almost out of existence.
– Order ! I ask the honorable member not to reply to interjections which have no reference to the subject-matter of the Bill.
– I propose to read an extract from the American Review of Reviews. It is not myintention to compare American manufacturing profits with those made in Australia. Until recently the United States of America stood out of the war, and was executing large orders for munitions for every one of the allied Governments. Naturally, the manufacturing industries of that country have gone ahead by leaps and bounds, and their incomes have shown the natural increase that comes from a greater volume of business. But a writer in the American Review of Reviews, dealing with the increase of profits in America, said -
In 1913, eminent economists could, and did, prove that a world war could not he fought for two years with the gigantic demands of modern war financing. They showed that the stored up capital of the world was not sufficient to stand the strain; and they were right.
But a greater conflict than they promised has gone for nearly three years, and may go on much longer….. this is possible simply because the current productivity of the human race has been increased by greater efficiency and effort, largely by the efficiency of more highly socialized industry.
I believe that. The nations of the world would never have been able to stand the strain of the war but for superior organization and the socializing of industry. In this time of storm and stress the socializing of industry has practically saved the situation; and I am convinced that what’ has proved good intime of war will be proved, from efficiency and productivity points of view, equally good in time of peace. The writer went on to quote the net income of leading industrial corporations -
– But those figures relate to America.
– One would infer from some of the arguments used to-day that no war profits at all were being made in Australia and other places. Although I do not agree with many of the provisions in ithis Bill, I must confess that, notwithstanding that we in Australia have not had big war contracts for munitions, we have had big war contracts for wool and woollen goods, for clothing, and other commodities ; and the suppliers of those goods, as well as others in the trading community, have made during war-time very big profits.
– Whilst we have made thousands of pounds, the American manufacturers have made profits of millions.
– Certainly; but there is no reason why, with a proper system of war profits taxation, we should not tax those thousands. I think the figures in the last New Zealand Budgetwill show a proposed increase of nearly £5,000,000 in taxation; and although the war profits tax has been repealed, the Government are proposing other taxation which will be perhaps even heavier than that which has been withdrawn. No doubt, the New Zealand Government will have special provisions in those new taxes to deal with the people who have made big profits in war time.
– The war profits tax was abandoned in New Zealand because of unequal treatment and the cost of collection.
– No one desires the creation of a costly Department for the administration of this tax. The existing Taxation Department has been successful in handling other new taxes, and I dare say this tax can be administered by it with the addition of a few extra officers. The imposition of this tax should not require the appointment of additional highly-salaried officers.
Several attempts have been made to discount the importance of. the figures produced by Sir Alexander Peacock in the Victorian Legislative Assembly showing the extent to which certain incomes have increased in this- State. Whilst I am not a political admirer of that honorable gentleman, I think he would be the last man in the Victorian Parliament to try to mislead it, and as Treasurer of the State it is only reasonable to assume that he is well acquainted with its financial operations. In this respect our -cir cumstances may not find a counterpart in all the other States, but the position in one State is very often a fair index of what is going on in the others. At pages 91-2-3 of No. 2 of the Victorian Parliamentary Debates of the present session, certain figures cited by Sir Alexander Peacock in the course of a want-of confidence debate are given. The Leader of the Opposition has already quoted some of the figures given by Sir Alexander Peacock, and they have been amplified by the honorable member for Melbourne (Dr. Maloney).
– They are misleadiing, and of no value.
– I join issue with the honorable member. The honorable member for Kooyong (Sir Robert Best) admitted a few moments ago that Australia in no way compares with either the United States of America or Great Britain in regard to the manufacture of munitions and the profits arising therefrom. That being so, from a business point of view the ordinary trade and industry of the Commonwealth since the outbreak of the war must have been pursuing more or less the even tenor of its way. During that time prices have materially increased. Woollen goods, for instance, have doubled in price. Some one must have obtained the benefit of these increases. Then again, we have required clothing for our men at the front, and although at present part of the Exhibition Building is practically filled with the products of our woollen mills-
– Does the honorable member say that the price of wool has doubled since the war?
– I am referring more particularly to the prices of woollen goods, such as flannels, which are double what they were in 1911. In 1912, according to Sir Alexander Peacock, there were in Victoria 1,056 taxable persons or companies with revenues or salaries of £2,200 and over, and in 1915-16 the number had increased to 1,362. In 1912 the total income of these persons or companies, whose revenues or salaries amounted to £2,200 and over, was £7,712,000; in 1913 it was £9,439,000; in 1914, £9,436,000; in 1915, £9,599,000; and in 1915-16, £9,481,000. For the twelve months ended 30th June of this this year, Sir Alexander Peacock said the amount had gone up to £10,963,000, or an increase of £3,251,000 per annum in the earnings of these companies and persons since 1912. In view of these figures honorable members opposite say that the Treasurer’s estimate of only £900,000 as the revenue likely to be received from this tax for a two years’ period must be an under-estimate.
– The figures are not worth the paper they are written on in the absence of more facts. We do not know what additional capital has been used.
– That criticism applies not to ‘me but to Sir Alexander Peacock.
– The honorable member does not know to what extent the capital employed in these businesses was increased during the period under review.
– The honorable member will admit that the extra capital put into such businesses during the period named has not amounted to anything like £3,251,000. If there has been no such increase in capital, then the war-time profits in Victoria must have been considerably more than the Treasurer estimated.
– The estimate is not mine; but I hope the honorable member is right.
– By way of illustrating the profits made, I- may refer to an item the increased cost of which is known to every one who has had anything to do with the building of a house. I refer to corrugated iron. I have it on the authority of those in the trade that one Melbourne firm alone has made £100,000 out of its stocks of that commodity. I am not surprised that such a profit should have been made if the firm in question made its purchases early iri the war. Immense profits have also been made on other lines. Some of those .who talked largely of patriotism at a meeting of the Chamber of Commerce in Adelaide about two months ago were able to commandeer large supplies of certain chemicals and other lines at the commencement of the war, and, by holding them, to make profits of thousands of pounds. Articles that used to be sold for 6d., 9d., and ls. a lb. went up in price to something like 2s. 6d., 3s., and 5s. per lb.
– But what do they cost to land to-day? “
– These prices were obtained for goods which were purchased or held in stock at the beginning of the war.
Some of those who are regarded as among the most reputable ‘ business men in the community are amongst the biggest trading gamblers in Victoria. These increases in prices were in respect of articles necessary for the health and welfare of the community. In some of our hospitals we have had the greatest difficulty in obtaining certain requisites.
– I do not be lieve it.
– The honorable member may speak for South Australia, but he must admit that there are certain limitations to his knowledge. I am speaking by the book, and, if desired, I can supply names and addresses.
– Are not Condy’s crystals 1,700 times- dearer than before the war?
– They cannot be obtained.
– I can only say that I do not believe in that class of business morality which permits a man to buy up large stocks of chemicals or other materials to store them away, and to take advantage of rises in prices week after week and month after month until he is able to obtain almost exorbitant rates. When we have in the community people who are prepared to resort to that class of trading - trading of the most immoral character - it is time that we did something to prevent them passing these high costs on to the people, and to extract from their exchequers some of the money they have thus taken from the public so illegitimately.
Coming to the exemptions in the Bill,
I consider they are altogether too many. . If this is to be a war measure there is no reason why any one’ should be exempt from it. If a farmer has made during war time profits in excess of his pre-war returns, why should his peculiar occupation exempt him from the provisions of the Bill? Then, again, why should professional men be exempt? Some of them have earned magnificent incomes since the war. We have sent to the Front between 400 and 500 medical practitioners, who are doing there a noble service. Some of them gave up lucrative practices in order to serve their country. Those who have remained behind have consequently had more to do, and their revenues have immensely increased. It is true that many of our medical men are working night and day. It is ‘ equally true that they are making more money than they would earn if their brother medical practitioners at the Front were here to-day. Enjoying, as they do, these increased incomes, there is no reason why they should not come within the scope of this measure. Many of the legal fraternity are in the same position.
– The honorable member and his fellow legal practitioners are doing very well. I might in this connexion quote what Mr. Wells has to say about Sir Edward Carson, who belongs to the honorable member’s profession. Mr. Wells points out that even during this critical war-time period Sir Edward Carson, who is now a member of the British Cabinet, has been in the Courts earning a splendid income. Although many of our men have gone away to fight for us, there are still many fighting as between themselves in Australia. There are many litigants, and where there are litigants the lawyers gather. Where the lawyers gather there are handsome fees.
– The honorable member is now on solid ground.
– When we pass by the farmer and grazier and proceed to urge that lawyers should come under the tax, the honorable member thinks we are on solid ground. Those who are making profits in excess of pre-war standards should come within the scope of this Bill.
There have been so many threats, both in the course of the speeches of honorable members opposite and by way of interjection, that I should not be surprised to see a. number of them voting against the second reading of the Bill.
– The Opposition would like to see it thrown out.
– No, but I should like to see some of the honorable member’s party assisting us in amending it in certain directions.
– Those who say they do not wish to destroy the Bill, and yet attack it, are not very consistent.
– The Treasurer has just been assured by the Government Whip that the second reading of the Bill will be carried, and he is consequently smiling. I can assure the House that any amendment that will tend to improve this Bill and to knock it into something like reasonable shape will have my hearty support. In my opinion, this Bill is neither more nor less than a hollow sham. If the Ministry and their supporters, who are always prating about their sympathy for the “ under dog,” have any backbone at all, they will do their best to reduce the cost of living as a step which ought to precede every taxation measure. I urge the Treasurer, as a level-headed, thinking man, backed up by a strong party, to consider the matter calmly and soberly, and to try to persuade the erratic Prime Minister to bring down a measure to protect the people from exploitation, and remove some of the burdens which, if allowed to remain, will bring upon the Government consequences that always follow when the people are not treated as they ought to be treated.
– I think we ought to have a quorum. [Quorum formed.]
. -I am sure the Treasurer is to be congratulated on the way in which the Bill has been received from honorable members opposite, who hitherto have stumped the country promising the people that if they were returned they would tax war profits and everything else. Now, however, we find them very busy “ slanging “ this proposal of the Treasurer. I say straight away that, if I thought for a moment this Bill would bring in only £500,000 per year during the two years, I should regard it as not worth troubling about. However, my estimate as to the revenue is something like double that of the Treasurer. We have heard figures from the Leader of the Opposition and the honorable member for Melbourne (Dr. Maloney), supplemented, to a certain extent, by the honorable member for Maribyrnong (Mr. Fenton), indicating that, in Victoria alone, incomes have risen enormously. If those figures have been prepared on a fair basis, and are correct, will thoseprofits not come within the operation of this Bill? The year 1914, as all who are connected with the country in any way must! know, was one of the very worst years Victoria ever went through.
– TheYear-Book does not bear out your statement, for it shows that 1902-3 was a worse year.
– In the Western District, 1914 was absolutely the worst year; and the dairying industry was in such straits that the State Government hadto come to its assistance. But for this, the industry to-day would have been in a very poor way. Some honorable members opposite have made speeches, nob dealing with war profits taxation, but with the fixation of the prices of commodities, and the reduction of the cost of living. It is perfectly well known that the great rise in the price of meat has been caused to a very large extent by the drought. As to beef, the rise is owing to the great losses that occurred during the calving period ; and if it is desired to fix prices, we should fix the price of the unborn calf, and varying figures for the one-year-old, the two-year-old, and so forth. It is idle to suppose that any attempt to fix the price of beef will have any effect in reducing it. Victoria does not. breed anything like sufficient cattle to keep the Melbourne market alone going, and stock has to be brought from other States at enormous cost. I am, not now interested in cattle in any of the States, so that I can speak with some freedom. I have seen cattle coming down in a very low condition, at a cost to the graziers of £19 a head, and although they were a decent kind of bullock, the graziers will never get their money back. . They have to go to New England and the Queensland border to buy stock, because it is impossible otherwise to get what is required for the Victorian market.
I shall leave the question of the profits made by warehousemen to other members to deal with, but I believe those profits have been enormous, and that they will be dealt with under this Bill. Those interested in woollen mills and kindred industries have also made large profits; and I cannot see why honorable members opposite are not prepared to tax them by means of this measure, the opposition to which, so far as I can see, comes largely from .the friends of the manufacturers.
I do not think that very much revenue will be derived from the rural industries, especially in the more settled portions of Australia, but a fair amount will be realized, if the Bill remains in its present form, from leasehold properties in other States, more particularly in Queensland. I am interested in a leasehold property in that State, though I am not engaged in breeding cattle. I had my lesson in the cattle industry some years ago on a property on the Gulf; and I remember that it did not matter whether we sold or did not sell, we never had more than 5,000 head. When things got very bad indeed, and we found there were only a few bullocks of five years old fit for market, we boiled the lot down, horns and all, and only realized 17s. 6d. per head. At the present time, as I say, I am not in the cattle trade, but am interested in wool. I am not growling at the proposed taxation as it affects wool, because the wool-grower gets his money and the profits.
– It has gone up 50 per cent. - that is, woollen goods have.
-There has been, I know, an increase of 50 per cent, in the price of some kinds of wool compared with the pre-war rates ; but in the case of other grades 1the increase has been nothing like that. In any case, even if wool generally had increased in price to that extent, it would be perfectly fair to take some of the increase back in taxation. Much wool in the Commonwealth is bringing a lower price to-day than it was prior to the war. If wool does not fall into one particular grade, and has to drop to a lower one, it brings 3d. per lb. less. I am not complaining of that; but it is a hardship that has to be borne. What will really be taxed will not be the increased profit on the wool, but the increased output on the property. If a man was shearing 5,000 sheep prior to the war, and, by cultivation or other means, is now able to carry 6,000, the whole of the return from the 1,000 sheep is to be taxed, and that,. I submit, is not fair. If, however, the increased price per lb. of the wool was taxed, it would be a fair proposition.
I should like to deal more particularly with the question of cattle stations, of which I know something, in Queensland. In the case of one property on the Northern Territory boundary in Queensland, a start was made, when the drought began, with 17,000 head, and when the drought had finished there were 1,700. It was then felt to be no good carrying on the work under the then circumstances, and it was decided to go in for improvements. Fencing wire was carted to the property at a cost of £40 per ton, and a considerable amount of water was provided. In 1913-14 the proprietors were branding 2.000 calves, and. in 1915-17 6,000 calves, an increase of 4,000. Under the Bill as it is now, this 4,000 increase will be taken as representing the profit for each year, or a total of £16,000 for the two years. The assessment is not made on the market value, or on the stock that is sold, but on the calves -which, are branded and many never see the market. If these people were hit with another drought, they would have no profit at all. This property consists of country which does not carry very much stock. There are 8,000 head of cows, 6,000 one-year old calves, 6,000 two-year olds, and 6,000 three-year olds, with 3,000 four-year old bullocks fit to sell, with 1,000 others, or 30,000 in all. They sell from 3,000 to 4,000 cattle off the property per year. A few cows, also, are “sold, but the loss that takes place among the cows from time to time nearly wipes that item out altogether. Under the proposed tax these people would have to pay war-time profit taxation on a profit of £32,000, for calves and oneyear’olds which may never see the market. That is a book profit only. Those are the kind of people we want to encourage to go out into this country. After paying their war profits tax, it would pay them very much better to take the whole of their 30,000 head of cattle off the place altogether, bring them down to the markets, and sell them, and leave the country vacant, because they would get from £120,000 to £130,000 for them. That is the sort of proposition you have to look to as regards the development of Australia. The value of leasehold property away out in this country is simply the value of the stock, and these people would be perfectly justified in selling the whole of their stock and throwing the property back on the hands of the Government 3 the Bill passes in its present shape.
– Must the flocks and herds be brought up to a certain standard before the people can look for a reduction in. the price of meat?
– Yes. If the honorable member toured Victoria he would find it almost impossible to buy any store or four-year-old cattle bred in Victoria, because of the drought period in which all the calves were lost. The only place we can get them from is Queensland, and there we are, to a certain extent, shut out.
– Did they not slaughter a lot of female sheep and cattle in 1914 ?
– In some places they had to kill off the old ewes in thousands to save the younger and more valuable ewes that were coming on.
– Did they not kill them for food?
– Decidedly. They sent a tremendous lot of the older ewes and cows to the market in order to keep the others on.
– Does the honorable member say that the shortage of cattle will adversely affect the export trade while the prices are kept up in Australia ?
– The only way to export from the southern States is to be able to afford to pay more than the stuff1 will bring in the open market. The Queensland meat is commandeered at a certain price. It is very hard for the exporter to get hold of beef in this country, but he can get a certain amount of lambs. Beef in Queensland prior to the outbreak of the war was worth about 20s. per cwt., although it was pretty hard to get 20s. The last big sales which have taken, place in Queensland have been at about 37s. 6d., . with a bonus of 2s. 6d. per cwt., making about £2 per cwt. The war profit is the difference between £1 per cwt. and £2 per cwt.
– Apart from that, the skin and the offal are worth considerably more. The hide to-day is worth over £2 10s.
– But the breeder of the cattle is not getting it.
– Unfortunately, the consumer has to pay it.
– I am quoting prices at places which are not quite on the railway line in Queensland. The slaughterman gets the profit out of the hide and offal.
It is provided by sub-clause 11 of clause 15 that, if a business changes hands, the new owner, on applying to the Commissioner, can claim the right to carry it on as an old business, and get the prewar standard, taking credit for the whole of the capital invested. Thus, if a property is worth £50,000, and it changes owners or is let as a whole, and the new tenant or owner puts in £10,000, he can claim 10 per cent, on a total of £60,000. That seems fair, but if the property is cut up and let to three different individuals the previous capital invested cannot be claimed, because it becomes a new business. It is very easy to get over that difficulty by capitalizing the rental the various individuals are paying, and so arriving at the capital value of the money invested.
A clause which affects the development of Australia considerably is the average clause inserted by the honorable member for Capricornia (Mr.Higgs) in his Bill. By this a man who made a profit in one year, and was assessed on it, could set off against it any loss he made in the next year. The present Treasurer (Sir John Forrest) is opposed to this, because he claims thatthe Treasury should not he called on to refund what might amount to a considerable sum. Refunds are made under the Income Tax Act and Land Tax Act, sometimes extending over several years.
– Not for losses.
– Thank goodness they are made for overpayments, and sometimes amount to a considerable sum. There is, therefore, no logical reason why refunds should not be made under this tax. A man who makes a considerable profit this year with the good seasons that are going, may next year be struck by a drought in Queensland, . and find practically the whole of his assets disappear.
– The Melbourne Tramway Company had over £3,000 refunded for over-tax.
– Of course, there is no argument as regards the Treasury not being able to pay back the money.
– The Treasury do not make any refund for losses.
– They can refund it quite easily. If the whole of a man’s profits disappear next year, and the whole of his assets into the bargain, he is entitled to a refund.
I know we are not going to get many concessions out of the discussion on this measure, and we shall have to make the best of it. I want the Bill to be fair in its incidence. I want it to hit all, and hit them all equally.. I want to see a man who puts in his time, and runs a risk in developing the back country, given an opportunity to carry on. Ten per cent. is no good to a man in the good years out in the Never-Never, seeing that he has to run the risk of losing all his capital if he strikes a bad year.
A man carrying on two businesses may have to pay a war-time profit tax on one and make practically nothing on the other. If he makes a profit of only £100 on one business, and a considerable wartime profit on the other, he has to pay the tax on thesecond, and is allowed no deduction for the other; but if he makes ‘ a loss on the one business, and a taxable profit on the other, he is allowed a deduction. I contend that unless he earns the percentage on both businesses he ought to he allowed to deduct one from the other, or amalgamate the two businesses, provided that both are carried on on the same lines.
If the Bill is going to pass, which I hope it is, I trust that an opportunity will be given to those affected to pay the tax either by war debentures or by inscribed stock. That will be a very great convenience to those who have to pay, many of . whom have invested their money in the war loan.
Debate (on motion by Mr. Pigott) adjourned.
Australian and British Soldiers. - War-time Profits Tax Assessment Bill : Amendments.
Motion (by Mr. Cook) proposed -
That the House do now adjourn.
– This afternoon I had on the noticepaper the following question: -
With reference to the reported statement attributed to Brigadier-General Sir Robert McC. Anderson that General Sir Archibald Murray, recently commanding in Egypt, had told him that he (General Murray) would rather lose a division ‘of other troops than a brigade of Australians, will the Prime Minister, in justice to General Murray, cable to him to ascertain if the statement is correct?
I think that, in justice to a gentleman who is nob here to defend himself, the Minister might do what I ask. I believe that Brigadier-General Anderson has lied in . attributing to this soldier a statement that he would not dare to repeat to him before his face. If General Murray has said, in other words, that he would prefer to see’ five British soldiers killed rather than one Australian soldier, I tell him that Australians do not want that sort of praise. Every returned soldier honours the English Tommy, and would be glad if they could be paid as well as he was. Our Australians do not. want credit from a gimcrack brigadier-general. What knowledge of war has Brigadier-General
Anderson ? Is not his title merely one of honour? He may be a splendid accountant, but he knows nothing about war.I do not think there is a man or woman in Australia who believes his vile insinuations against General Murray. I ask him to prove this statement. General Murray is known as one of the most dashing soldiers under the English flag. Has he not been given a certain duty because he is a man of resource, quick to act in moments of danger? Has not a town in Palestine surrendered to him, though I believe that he has since retired? When a gimcrack brigadier-general casts a slur tin a soldier, he should prove his words. I think that Wellington would have had any man shot who dared to say that he would prefer to sacrifice five men for one other man of the same race. If General Murray said, in a moment’ of confidence over a glass of wine, or at a dinner, what Brigadier-General Anderson has repeated, the latter’s action was despicable. I ask that a cablegram be sent to General Murray, asking if the infamous statement attributed to him by Brigadier-General Anderson is true.
.- I ask the Minister for the Navy why the Government are keeping secret the proposed amendments of the War-time Profits Tax Assessment Bill? The Treasurer asked honorable members to let him know what amendments they proposedto move, so that he might have due notice of them ; and when I asked him if he would accord us the same courtesy, he repliedthat he would be happy to doso. In this morning’s newspapers it was stated that the Government had considered certain amendments, hut that the Prime Minister would not let the press have them until they were brought forward at the Committee stage. Why is this method of doing business adopted ? Are the Government afraid of discussion? The Treasurer said this afternoon that it would be a mistake to give notice of the amendments before the second reading bad been passed. It was said that Ministers would restore responsible government; hut they do not seem to wish to take responsibilities upon themselves. Apparently they are willing to surrender their powers to the Liberal Caucus.
Question resolved in the affirmative.
House adjourned at 10.5 p.m.
Cite as: Australia, House of Representatives, Debates, 15 August 1917, viewed 22 October 2017, <http://historichansard.net/hofreps/1917/19170815_reps_7_82/>.