House of Representatives
7 September 1917

7th Parliament · 2nd Session

  1. House of Representatives
  2. 7th Parliament
  3. 1917

Mr. Speaker (Hon. W. Elliot Johnson) took the chair at 11 a.m., and read prayers.

page 1835

INTERFERENCE WITH FIRE BRIGADE

Mr JOSEPH COOK:
Minister for the Navy · PARRAMATTA, NEW SOUTH WALES · NAT

-On Wednesday the honorable member for Grey (Mr. Poynton) asked whether a naval guard at Port Adelaide had refused to allow the fire brigade to board a schooner on fire unless a pass was produced. I have received the following telegram in regard to the matter from the District Naval Officer: -

Referring to your telegram 2010 yesterday, no foundation for report that NavalGuard. refused to allow fire brigade to board schooner on fire until pass produced; report following.

page 1835

INDUSTRIAL CRISIS

Supplyoffuel - Punishmentof

Ringleaders - Refusal to Work Hospital Ships

Mr FENTON:
MARIBYRNONG, VICTORIA

– Can the Minister for the Navyinform the House when it is proposed to cut off the supply of motive power, and whether a discrimination will be made between Government and other

Mr JOSEPH COOK:
NAT

– There will be no interference until Sunday at midnight, and I hope that) it mav be possible to continue as we are going for a little beyond that time.

Mr TUDOR:
YARRA, VICTORIA

– As many factories do not work on Saturdays, it being a fairly general practice now to observe the day as a complete holiday, will the Minister try to arrive at a decision early enough to-day to enable employers to Jet their employees know whether they will have work for them next week ?

Mr JOSEPH COOK:

– I have been in consultation with the Coal Board this morning, and havo insisted that it would be well to give twenty-four hours’ notice of any change. A proclamation of some kind will issue to-day, and I think it will be favorable to the continuance of industrial operations.

Mr FOWLER:
PERTH, WESTERN AUSTRALIA

– In view of the treasonable strike at Cockatoo Island Dockyard, which has seriously affected our transport and. hospital ship service, does the Government propose to mete out adequate punishment, at least to the ringleaders?

Mr Finlayson:

– That is right - “fire low and lay them out.”

Mr FOWLER:

– It is time that something was done.

Mr JOSEPH COOK:

– I suggest that the. honorable member should put his question on the notice-paper. The position is as difficult a one as we could have to deal with, and we are meeting it in what we think the best way in the public interest. I deeply regret and resent the strike at the dockyard, but I do not care to say anything more about the matter at the present time.

I wish, by way of personal explanation, to. correct a statement made yesterday. I then said that honorable members should know that menwere refusing duty on hospital ships. I have since ascertained that that statement was only partly correct. Owing to a misunderstanding on the wharfs yesterday morning-a complete misunderstanding on both sides, which is much, to beregretted - union labour was not engaged. This misunderstanding was not cleared up till lunch time, and by then volunteer labour had been engaged. It is true that the union labour on the ship refused to stay on board when volunteer labour was engaged ; that, of course, was reprehensible. I wish to make it clear, however, that union labour did offer, and was to have been engaged, but, because of a complete misunderstanding, was not engaged.

page 1836

LEAVE OF ABSENCE

Motion (by Sir John Forrest) agreed to -

That leave of absence for one month be given to the honorable member forEden- Monaro on the ground of ill-health.

page 1836

QUESTION

CENTRAL WOOL COMMITTEE

Mr FALKINER:
HUME, NEW SOUTH WALES

– In view of the repeated questions by the honorable member for Capricornia concerning the Central Wool Committee, will the Prime Minister invite the honorable member to avail himself of his privileges here to make a definite charge, instead of continually reflecting on the Committee by the questions that he asks ?

Mr SPEAKER:

– The question is not in order. Questions should be addressed to Ministers concerning public matters of which they are cognisant, or relating to their administration.

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

– As a personal explanation, the question of the honorable member for Hume seemed to reflect on me.

Mr Fowler:

– Can a point of order be raised on a question which has been disallowed ?

Mr SPEAKER:

– I was about to point out that it cannot.

Mr Higgs:

– On a point of order.

Mr SPEAKER:

– When the Speaker disallows a question his decision is final, and cannot be debated.

page 1836

QUESTION

QUESTIONS ON NOTICE

Dr MALONEY:
MELBOURNE, VICTORIA

– Will the Prime Minister kindly revert to the old method of reading aloud the Ministerial answers to questions on notice? The method adopted at yesterday’s sitting was very inconvenient, as it prevented members from knowingwhat the answers were.

Mr HUGHES:
Attorney-General · BENDIGO, VICTORIA · NAT

– I think that we must give the new system a trial. It certainly saves time.

Mr LAMOND:
ILLAWARRA, NEW SOUTH WALES

– Has the right honorable gentleman considered the advisablenessof adopting the New South Wales practice of circulating printed answers to the questions asked on notice? That is an improvement on both methods that’ have been followed here. There the answers are printed and circulated, and a copy given toevery member within an hour or two of the formal asking of the questions.

Mr. HUGHES. _ That practice was. not in Vogue when I was a member of the Legislative Assembly of New South Wales. . It is only shortly before the meeting of the House that Ministers have an opportunity to see the questions on the notice-paper. No Minister can be fully acquainted with a hundredth part of the details of the Department under his administration, and every Minister is therefore forced to rely largely on the replies furnished by his officials. Perhaps, Mr. Speaker will give consideration to the suggestion of the honorable member for Illawarra. My desire is to adopt the best means possible for providing members with the information for which they ask. Ministers, however, should have more time for’ considering the questions asked.

Mr SPEAKER:

– The system followed yesterday was adopted by the House on the recommendation of the Printing Com- mittee.

page 1837

QUESTION

MAIL BRANCH, SYDNEY

Mr WEST:
for Mr. Blakeley

asked the Postmaster-General, upon notice -

  1. Is it a fact that there is a good deal of discontent existing among the employees in the Mail Branch, General Post-office, Sydney, regarding the shifts they are called upon to work?
  2. Is it correct that the Commonwealth Arbitration Court referred the organization of employees to the Department or Parliament regarding the alteration of such shifts ?
  3. ls it correct that this question was discussed at a conference between the PostmasterGeneral and representatives from the organizations concerned as far back as the 24th March last?
  4. Is it a fact that since such date the Minister has repeatedly promised to give his decision regarding same?
  5. Is it a fact that the Minister now declines to adhere to such promise unless the booklet issued by the organization to members of Parliament is withdrawn?
  6. Will the Minister state how at this late hour it is possible to withdraw same?
  7. Is it not a fact that such booklet is an account of negotiations regarding an alteration of shifts compiled from departmental notes, and, if so, what objection does the Minister raise regarding the same?
  8. Has the Minister, completely finalized the question of alteration of the shifts which were discussed at the aforesaid conference?
  9. Will the Minister consider, in the light of the preceding questions, the advisability of finalizing the question of alteration of shifts, and convey his decision to the organization concerned ?
Mr WEBSTER:
Postmaster-General · MACQUARIE, NEW SOUTH WALES · NAT

– This matter generally cannot be decided until the strike is over and normal conditions again prevail.

page 1837

QUESTION

GAS MANTLES

Mr KELLY:
WENTWORTH, NEW SOUTH WALES

asked the Minister for

Trade and Customs, upon notice -

  1. How many gas mantles were imported into Australia for the years 1912 to 1916 inclusive?
  2. Has the Government of New Zealand prohibited the importation of gas mantles of foreign origin into that Dominion?
  3. Is it a fact that evidence given before the City of London Court last November seriously impugned the neutrality of origin of “ Dutch “ mantles shipped to the United Kingdom?
  4. Did a witness for the Home Office tell the Salford Court last December that British consular certificates could not be taken as absolute proof that the goods referred to were not of enemy origin 7
  5. What evidence of Dutch origin other than these consular certificates has accompanied the above shipments of “Dutch” gas mantles to Australia since August, 1914?
Mr JENSEN:
Minister for Trade and Customs · BASS, TASMANIA · NAT

– The answers to the honorable member’s questions are as follow : -

  1. Year 1912 - not separately recorded. Year 1913 - United Kingdom origin, 1,597,043; other origin, 1,592,358; total, 3,189,401. Year 1914- 15- United Kingdom origin, 2,677,774; other origin, 506,123; total, 3,183,899. Year 1915- 16- United Kingdom origin, 3,362,237; other origin, 1,028,406; total, 4,390,643.
  2. Inquiry is being made. 3-4. The Department has no information on these matters. It is known, however, that certain importations of mantles from Holland were seized by the Imperial authorities as being of German manufacture or containing more than 25 per cent. of enemy material.
  3. Consular certificates accompanying goods from neutral countries in Europe arc not taken in any case as alone proving that the goods are of non-enemy character. Each importation of mantles has been dealt with on its merits, and in consideration of all the evidence available, such as particulars on invoice, name of manufacturer, the packing of the goods, marking on the cartons, &c. Where there was reason to doubt thebona fides in any instance full particulars were reported to the British authority, and delivery of the goods was withheld pending advice, lt has been the practice for some time to detain all gas mantles from neutral countries in Europe unless special investigation has previously” been made by the British authorities and the bona fides of the manufacturers established.

page 1837

QUESTION

SEYMOUR CAMP

Mr HIGGS:

asked the Minister repre senting the Minister for Defence, upon notice -

  1. Is it the intention of the Defence Department to abolish the military camp at Seymour ?
  2. Is it intended to send to Bendigo all or any troops now at Seymour?
  3. Has the Minister taken into due consideration the effect of the removal of the camp upon Seymour drivers, carters, labourers, artisans, motor-men, cabmen, and other residents ?
Mr GROOM:
Honorary Minister · DARLING DOWNS, QUEENSLAND · NAT

– The answers to the honorable member’s questions are as follow : -

  1. No.
  2. No more than already have been sent.
  3. Yes. The medical authorities advised, owing to a few cases of meningitis occurring there, the removal of some of the troops for a few weeks in view of the exceptional spell of wet weather in the north-eastern district.

page 1837

QUESTION

TRADE MARKS AND TRADE DESCRIPTIONS

Mr HIGGS:

– I raise the point of order that the question proposed to be asked by the honorable member for Wentworth with reference to trade marks and trade descriptions anticipates the discussion of an Order of the Day, which stands in his name.

Mr SPEAKER:

– There is a distinction between the question and the Order of the Day. The Order of the Day deals with one particular country only, but the question is more general, and does not contain a specific reference to the country mentioned in the Order of the Day. I think, therefore, that it may be allowed.

Mr KELLY:

asked the Prime Minister, upon notice -

  1. Does the Government intend to prohibit the use within the Commonwealth of trade marks and trade descriptions originally owned by subjects of countries now at war with the British Empire?
  2. Does the Government propose to invite the attention of the British Government, and, through it, of the allied Governments, to this matter ?
Mr HUGHES:
NAT

– The answers to the honorable member’s questions are as follow: -

  1. The use within the Commonwealth of the enemy trade marks which have been suspended has already been prohibited by the Parliament of the Commonwealth.
  2. Yes.

page 1838

QUESTION

SENTENCES UPON MISS PANKHURST AND OTHERS

Dr MALONEY:

asked the AttorneyGeneral, upon notice -

Are the sentences passed upon Miss Pankhurst, Mrs. Baines, and Miss Suter under Commonwealth or State law?

Mr HUGHES:
NAT

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

The sentences passed on 4th instant on Miss Pankhurst and Miss Suter were under Commonwealth law. The previous sentences passed On Miss Pankhurst were under State law.

Those passed on Mrs. Baines on 4th instant were under Commonwealth and State laws.

page 1838

QUESTION

WATERSIDE WORKERS

Mr FINLAYSON:

asked the Minister for the Navy, upon notice -

  1. Whether it is a fact that members of the

Waterside Workers’ Federation are not allowed to resume work on the wharfs unless they offer themselves at the National Service Bureau ?

  1. If so, who has issued this order?
  2. If so, for what purpose is it proposed to thus depart from the usual method of engaging these men ?
  3. Will the Minister rescind this order, if it has been issued by the Government, so far as it affects the members of the above Federation, in order to help in the settlement of the present industrial dispute?
Mr JOSEPH COOK:
NAT

– No such order has been issued by the Government. The members of the Federation will be engaged for work on Government ships if they attend at the usual picking-up places.

page 1838

WAR LOAN BILL (No. 2)

Second Reading

Debate resumed from the 6th September (vide page 1803), on motion by Sir John Forrest -

That this Bill be nowread a second time.

Mr WEST:
East Sydney

.- Last night I drew attention to two items on the Loan Estimates, which seem to be of the same nature as items upon which in the past loan moneys have been spent by State Governments. In this respect it would appear that the CommonwealthGovernment proposes to follow the bad practice of the State Governments. If the expenditure proposed to be taken out of loan account were for works of a permanent character we could ignore it; but one item on our Loan Estimates is “ office expenses.” I am justified in assuming that “ office expenses “ will cover furniture, blinds, and floorcloth. These things are necessary in the furnishing of an office, but I do not think any person in the community would justify the expenditure of loan moneys in order to provide an office with blinds,’ oilcloth, or furniture. Blinds are articles which are easily destroyed; they do not give sufficient length of service to justify a timepayment furniture warehouse in supplying them to their clients on the timepayment system. I think that the time has come when honorable members should try to put a stop to this wholesale borrowing which has been carried on by State Governments, and which it is now proposed to inaugurate in the Commonwealth. Objection to such a policy was emphasized in the 1910 election. The people then exercised their judgment on the question, and their meditated judgment was that such services should be provided for out of revenue. I do not say that we can avoid loan expenditure altogether. There are many works of a permanent character that can justifiably be built out of loan account.

Mr Joseph Cook:

– On a point of order, it is quite apparent that the honorable member is going beyond the ruling given last evening by discussing items on the ordinary loan estimates, which is not permissible on the motion for the second reading of this Bill.

Mr SPEAKER (Hon W Elliot Johnson:
LANG, NEW SOUTH WALES

– I was waiting to hear the honorable member connect his remarks with the Bill. It is apparent to me that he is going beyond the scope of the measure before the H.ouse.

Mr WEST:

– I was merely taking the items on the loan estimates.

Mr SPEAKER:

– The honorable member must connect his remarks with the Bill before the House. Unless he can show that the items are connected with the proposed loan, he cannot debate them. He will have his opportunity of dealing with items in the loan estimates in Committee of Supply.

Mr WEST:

– I have looked up previous debates, and I thought that I was simply following the practice hitherto followed.

Mr SPEAKER:

– The point of order was raised last night, and I had to rule other honorable members out of order on the same ground.

Mr WEST:

– I was under the impression that the point of order raised last night was entirely different. One of my reasons for endeavouring to direct attention to the loan proposals of the Government is that many members of the present Government held office in what was known as the Fusion Government, which was very extravagant in its expenditure, and showed utter lack of economy in its administration of the finances of Australia. When the Fisher Government came into office there was a deficit of £450,000. It left office with a surplus of £2,653,000, which the present Treasurer afterwards converted into a deficit of nearly £1.000,000 in the shortest time on record. Honorable gentlemen with such a record are now asking us to pass a loan BiU for £80,000,000, and when I see items in the loan, expenditure which this Loan Bill is required to meet, I cannot help criticising them, and endeavouring to elicit some information as to what it is proposed to do with this large amount of loan money. Whether honorable members feel disposed to ignore the matter or not, there is a serious position ahead of us. If we prefer not to get as much taxation as we can out of the people, but to rely on loan moneys, such a policy will have a most injurious effect upon Australia. In my opinion, the present is a more favorable time for securing revenue than will be provided after the war. In any country with a population of only 5,000,000 people, where £40,000,000 or £60,000,000 of loan money is being circulated, a considerable portion of it must go into the pockets of the citizens. We are treading on very dangerous ground in attempting to extract heavy loans from the people, and in not providing out of taxation for a lot of the expenditure it is now proposed to meet out of loan funds. I do not say that expenditure out of loan funds is not justifiable, but I hold that we should rely, more upon taxation. In the next five years Australia will be called upon to redeem in London loans amounting to £78,645,569. In Australia during the same period, we will be called upon to redeem loans amounting to £57,617,922. The total amount to be redeemed in five years is £136,263,491, and what makes the position more serious is the fact that these loans have all been raised at rates of interest much below those at present prevailing.

Sooner or later the Treasurer must tackle the question of the redemption of loans. In fact, the matter might very well be discussed now, because the necessary machinery for the redemption of these loans will take some time to bring into operation. Ministers individually and collectively have told the people of Australia that at the present time Parliament Could very well deal with measures that are of a non-party character, ‘ or are not likely to ‘ create friction. However, I shall avail myself of every opportunity of bringing before Parliament the serious position ahead of us. The sooner we tackle it the less will be the difficulties to be overcome in connexion with the redemption of our loans, and also in connexion with our wholesale borrowing. I have placed a few questions on the noticepaper in reference to the last flotation. I am sure that the people of Australia, when they have the information brought under their attention, will give it a little meditation, and will support a Government that is prepared to spend revenue on many items that it is now proposed to provide for out of loan. In 1910 we had an experience of what the people think of loan expenditure. They gave their decision in a very commendable manner when they said that they would not have the naval expenditure proposed by the Fusion Government paid for out of loan moneys, and that only expenditure on works of a permanent character that would convenience future generations should be paid for out of loan funds. I do not desire to oppose the Government for the sake of opposition, but I am in earnest on this question, because I see danger ahead of us, and I believe that this matter is of sufficient importance to engage the attention of a deliberative assembly, the function of which is’ to conserve the best interests of the people. At the time when the Liberal Government introduced a Loan Bill for £3,500,000 for the purposes of naval defence, there was sufficient money in the Surplus Reserve Fund to finance that expenditure, but the Government were so wedded to the policy of financing from loan that theyoverlooked the surplus revenue.

Sir William Irvine:

– What has this Bill to do with surplus revenue? The honorable member is mentioning ancient history.

Mr WEST:

– It may be ancient history, but the same tendency is evident on the part of the Government to-day, and if the honorable member would give to this matter the same amount of attention as he gave to the war-time profits tax he would agree with me that there are items in this Bill that ought not to be charged to loan account. I know that borrowing is an easy way of financing,’ and that at the end of their term of office the Government will be able to say to the country,” See what great financiers we are. We have carried on the affairs of the country without increasing taxation,” but they will not tell the people that they paid for out of loan account items which no business man would agree should be financed with borrowed money. I do not know whether my words will have any effect, but I shall persevere in calling the attention of honorable members to the seriousness of the proposed expenditure from the loan account. The total loan borrowings of Australia to-day amount to £500,000,000, and the annual interest bill is £22,000,000. In 1918 we shall have to redeem matured loans to the amount of £36,312,625. I feel sure that honorable members are not thoroughly seized of the gravity of the position in regard to our loan account. I offer no opposition to the second reading of the Bill because many df the accounts mentioned in it must be paid, but in Committee I shall avail myself of the opportunity of repeating my objections to some of this proposed expenditure from loan, and of impressing upon honorable members the necessity for giving more attention to this matter than has been given in the past.

Mr MATHEWS:
Melbourne Ports

– On this question I differ altogether from most of the members on this side of the House. I believe that the Treasurer has adopted the proper course in proposing to borrow and charge to loan account as much as possible of our war expenses. There is a vast difference between this Bill and the Bill providing for the borrowing of £3,500,000 for the construction of the River class of destroyers. The latter measure was introduced in peace time, and I agree with’ the honorable member for East Sydney that the Government had no right then to borrow money for naval defence. The surplus in the revenue fund should have been applied to that purpose. In peace time we should provide out of revenue all defence requirements, but when war is in progress the Government should borrow for war purposes, and allocate the revenue to the ordinary needs of government. The Treasurer could not have done better than to allocate as much as possible of the expenditure on war services to loan account; by so doing we shall be able to know in future how much the war has cost the. country.

At the same time I object to much of the expenditure that is proposed in this Bill. There are to-day what are known as volunteer workers; we, on this side, apply another term to those who “ scab “ on the Labour movement. At cinema shows and in the illustrated newspapers we see pictures of the volunteer workers, and they are in uniform. The Government are not only trying to break u,p the unions by volunteer labour, but are providing money out of loan so that those men may clothe themselves as Nationalists.

Mr J H Catts:

– In New South Wales they are feeding them with cartloads of beer.

Mr Finlayson:

– Eleven lorry loads of beer were sent into the cricket ground

Mr SPEAKER (Hon W Elliot Johnson:

– I ask the honorable member to connect his remarks with the Bill. The remarks the honorable member is making will be in order if he can show that a portion of the money to be borrowed under this Bill is to be expended on uniforms for volunteer workers.

Mr J H, Catts:

– I think that this is a convenient time to call for a quorum. [Quorum formed.]

Mr MATHEWS:

– This . money is to be borrowed for war purposes, and amongst war purposes is the purchase of uniforms, boots, and accoutrements. I am endeavouring to show that the uniforms purchased for war purposes are being used for an entirely different service. If in the ordinary course of stevedoring work on the wharf men were to appear in the King’s uniform they would be sent off duty.

Mr Joseph Cook:

– Is this matter pertinent to the second reading of a War Loan Bill?

Mr MATHEWS:

– The Treasurer is proposing to borrow £80,000,000 for war purposes, which include the provision of uniforms.

Mr Joseph Cook:

– It is the principle of the measure which is under consideration, not the details.

Mr MATHEWS:

– Whilst agreeing with the Treasurer in his general loan policy, I am showing that I disagree from him in allowing some of this, money to be expended on uniforms to be worn by volunteer workers on ships. There are other purposes for ‘which loan money is being, improperly used. The censorship is a war service, and the censors ought to be paid out of loan money. The purpose of the censorship is to ensure that no information is conveyed to the enemy, and that nothing is published to injure the Government in the conduct of the war. But the censorship is being used in other directions. For instance, how can there be any connexion between the war, and the trouble in the Northern Territory over the re-appointment of Dr. Gilruth? Yet the censorship, which is financed out of loan money, is used to interfere with the public protest at Darwin against the action of the Government in making the appointment. The Government ought not to do these things. Why should they allow the censor to interfere with a matter of this kind? I have been expecting certain communications from the Northern Territory, but have not received them. They are censored.- I have endeavoured to ascertain whether the censorship is carried out by the military or by some officer of the Department of Home and Territories, but, so far, have been unsuc- cessful. The censorship is intended to be used for military purposes. The service is paid for out of loan money, and my complaint is that it is being used to prevent information reaching us in regard to difficulties in the Northern Territory associated with the re-appointment of Dr. Gilruth. If we agree to the raising of the loan for war purposes, it should be used only for such purposes. About a fortnight ago I received from Port Darwin a letter, in which the following statements occur: -

Your wire to band. Contents noted. I intend to forward to you at earliest convenience fuller details of conditions obtaining in the Territory, including other matter dealing with the Administrator and staff generally. No doubt you are aware the trouble we have to contend with up here is the despotic system of censorship which is carried out in anything but a national manner, inasmuch as that any postal matter whatsoever dealing with the maladministration of the Territory is generally censored to such an extent thatit is impossible for the receiver of the epistle to draw from the remains of same any intelligent meaning.

This proves my statement as to what is taking place in Australia to-day. Will the Treasurer explain what connexion there is between the administration of the Territory and the war ? Why should the censor who is stationed at Darwin especially to see that nothing shall be sent out that is prejudicial to the interests of this country, take up the. attitude that every little incident associated with the administration of the Northern Territory may have some bearing on the winning of the war? There are people who ask, concerning every action taken by the Government, “ Is this the way you are going to win the war?” People cannot be blamed for putting such a question, in their ignorance, when the Government allow their own officials to use the censorship to prevent the disclosure of information which really has nothing whatever to do with the war. I urge the Ministry to take- care that money allocated for war purposes shall be used only for war purposes.

Mr Joseph Cook:

– This matter has no relationship to the motion for the second reading of the Bill.

Mr MATHEWS:

– It should not have any such relation, but it has ; since the pay of censors is provided for out of loan funds. Will any one say that the trouble over the re-appointment of the Administrator of the Northern Territory has anything to do with the war?

Sir John Forrest:

– No; but the censor would not be stationed at Darwin if it were not for the war.

Mr MATHEWS:

– Many people at Port , Darwin are disappointed at the re-appointment of the Administrator, and the censor, who is stationed at Darwin especially for war purposes, should not interfere with correspondence relating to any difference of opinion between the Administrator and local residents. I can only bring before the House this maladministration of the censor’s Department by showing that the censorship is being used for other than war purposes. Residents of Darwin have to rely on the postal and shipping facilitiesto place their grievances before Parliament, and it is unfair that a censor appointed for war purposes should be allowed to use his position to assist the Administrator in breaking down any -opposition to him.

Mr GREGORY:
Dampier

– I do not desire to delay the passing of this Bill.

Sir John Forrest:

– We are anxious to send it up to the Senate to-day.

Mr GREGORY:

– Then I shall not discuss it provided I receive an assurance that we shall have another opportunity to deal with two or three items covered by it. There are such questions as the expenditure on the arsenal, the naval bases, and other items, which many of us will not allow to pass without some debate and, perhaps, a few divisions.

Sir John Forrest:

– The honorable member will have an opportunity to deal with them on the ordinary loan estimates which are soon coming on.

Mr GREGORY:

– Very well. I regret that honorable members of the Opposition have not been a little fairerin their criticism of the Treasurer. This is the first time, since I have been a member of this Parliament, that we have been able to deal with the financial proposals of the ‘ Government so early in the year to which they relate. Hitherto we have not had an opportunity to discuss them until something like twelve months after the money has been expended. Notwithstanding all that has been said by the Opposition regarding certain little expenditures out of loan moneys, the fact remains that the Government are proposing to expend out of revenue this year £4,702,000 in excess of the amount expended out of revenue last year. We must recognise, there fore, the difficulties that face the Treasurer in dealing with the financial position.

I rose principally to refer to several large items of expenditure on the loan estimates in connexion with which many of us desire that economy shall be observed, but if the Treasurer can assure us that we’ shall have an opportunity to discuss them later on I shall not debate them at this stage.

Sir John Forrest:

– Such an opportunity will be given.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clauses 1 to 3 agreed to.

Mr J H CATTS:
Cook

.- I move -

That the following new clause be added : - “ (4) No portion of any moneys borrowed under the authority of this Act shall be utilized for the purpose of interference in any industrial dispute by the Military and Naval Forces, or by the machinery provided under the War Precautions Act.”

I showed in my second-reading speech that the War Precautions Act, the administration, of which is being paid for out of loan moneys, and also the Naval and Military Forces were being . utilized in connexion with industrial disputes in Australia. It is the intention of the Parliament that this money shall be utilized in -connexion with the world-wide conflict now raging, and the Government should not be allowed to betray the confidence of the people by turning the strength obtainable from their patriotic enthusiasm for the welfare of the Empire into the channel of internal disputes between two sections of the community in Australia.

Mr.JosephCook. - I rise to a point of order. I submit that the proposed new clause has no relevancy to the Bill. This Bill, as its title sets out, is to authorize the raising of £80,000,000 for war purposes. It contains no reference to any industrial matter, and the proposed new clause, which relates purely and solely to some supposed industrial dispute, can have no relevancy to it.

Mr J H Catts:

– On the point of order, I submit that clause 3 provides for the manner in which these moneys shall be applied.

Mr.J oseph Cook. - For war purposes.

Mr J H Catts:

– Quite so. Every man who joins the Forces enlists for war purposes, but the Minister for the Navy knows perfectly well that some of these men are being used in connexion with industrial disputes within Australia.

Mr Joseph Cook:

– I contradicted that statement last night.

Mr J H Catts:

– If the Government have no intention of using these moneys for other than war purposes, then they cannot object to the proposed new clause which lays down that no portion of these funds shall be applied to other than war purposes.

Mr Joseph Cook:

– On the honorable member’s own showing that is unnecessary.

Mr J H Catts:

– The ex-Treasurer (Mr. Higgs) showed last night that the administration of the War Precautions Act is paid for out of loan funds, and I also read regulations framed under that Act to show that it is being used in connexion with the present industrial dispute. Does the Minister for the Navy deny that? The honorable member cannot do so, and, therefore, his point of order falls to the ground.

The CHAIRMAN (Hon J M Chanter:
RIVERINA, NEW SOUTH WALES

– I am called upon to rule whether the new clause submitted by the honorable member for Cook (Mr. J. H. Catts) is in order and applicable to the Bill. The proposed new clause reads as’ follows) : -

No portion of any moneys borrowed under the authority of this Act shall be utilized for the purpose of interference in any industrial dispute by the Military and Naval Forces, or by the machinery under the War Precautions Act.

It might seem, at first sight, that clause 3, which sets out the purpose for which’ money may be borrowed, and contains the words “ and applied only for the expenses of borrowing and for war purposes “ was somewhat in favour of the admissibility of the proposed new clause. I have, however, to take into consideration the principle of the Bill itself; and both, the title of the Bill and clause 3 determine that the money borrowed should not be used for any other than war purposes.

Mr J H Catts:

– Here are the Estimates and details of the proposed expenditure.

The CHAIRMAN:

– I have nothing to do with the Estimates at this stage’. I am not officially aware of what is in the Estimates; I have to deal only with the

Bill, which seems mandatory, both in title and in clause 3, that the money borrowed cannot be used for other than war purposes. As the money cannot be used for industrial purposes, I must sustain the point of order.

Motion (by Mr. J. H. Catts) proposed -

That the decision of the Chairman, Mr. Chanter, in ruling that the new clause proposed is out of order, be disagreed with.

The CHAIRMAN:

– Is it the pleasure of the Committee that the motion of dissent be taken forthwith ?

Mr Higgs:

– May I ask-

Motion (by Mr. Joseph Cook) proposed -

That the question be now put.

Question put. The Committee divided.

AYES: 34

NOES: 12

Majority … … 22

AYES

NOES

Question so resolved in the affirmative.

Question - That the Chairman’s ruling be disagreed with - put. The Committee divided.

AYES: 11

NOES: 37

Majority … … 26

AYES

NOES

Question so resolved in the negative.

Mr POYNTON:
Grey

.- Last bight I spoke of the disadvantages at which some investors in the war loans are as compared with others. To prevent that, I now move -

That the following new clause be inserted : -

The rate of interest shall be 5 per cent., and shall be not exempt from taxation.”

Mr Page:

– Why not make the rate of interest51/2 per cent. ?

Mr Tudor:

– That would be more equitable.

Mr Finlayson:

– And money borrowed at that rate would be cheap.

Mr POYNTON:

– With the permission of the Committee I shall amend my proposal by fixing the rate of interest at 51/4 per cent., which is the English rate. At the present time the maximum tax on incomes is 6s. 3d. in the £1, but income from war loans is exempt from taxation. It is apparent that in future we shall have to increase our income taxation, and probably before very long the maximum rate will be as much as 10s. in the £1. Thus it is evident that we shall lose a great amount of revenue by exempting the intereston future war loans from income taxation. In some instances, I think, those who have invested their capital in war loans get a return equivalent to 7 percent., making allowance for the exemption from taxation which they enjoy ; though, of course, investors possessing but little capital get only 41/2 per cent., their income in’ any case being too small to be taxed.

Mr Fenton:

– Can the honorable member say what the revenue would gain, by not allowing any exemption?

Sir John Forrest:

– It is difficult to arrive at. Mr. Knibbs and others have been unable to tell me.

Mr POYNTON:

– The probability of a heavy increase in income taxation isa strong inducement to invest in war loans, so long as the exemption continues. I can understand men putting everything into war loans.

Mr Falkiner:

– I do not know any one who has done so.

Mr POYNTON:

– We shall certainly have to increase the income tax to get enough revenue to . pay our way. The present exemption is not a fair one, because while it benefits the large holder, it does not benefit the small investor.

Mr Joseph Cook:

– I submit that the clause is not in order,because a private member may not make financial proposals involving increased expenditure.

Sir William Irvine:

– This is merely a limitation on the authority to borrow.

Mr Joseph Cook:

– If that be so, it affords opportunity for the raising of another point of order, which I do not wish to raise. There is nothing in the Bill about the rate of interest. This is an authorizing Bill, and nothing more. The rate of interest has not been fixed, and honorable members will have on opportunity to discuss the matter. It can also be dealt with independently.

Mr J H Catts:

– The Treasurer has said that a prospectus is to be issued tomorrow.

Mr Tudor:

– I submit that the proposed new clause is in order. It is not a proposal to increase taxation. Probably interest at 51/4 per cent., subject to income taxation, is not more than interest at 41/2 per cent., exempt from such taxation.

Sir William Irvine:

– Is there any other Bill in which the clause could be inserted?

Mr Tudor:

– No. If my memory serves me aright, when Mr. Fisher introduced the first Loan Bill, a copy of the intended prospectus was handed to every member. Parliament then made the mistake of authorizing a loan at 41/2 per cent., exempt from income tax, and we should correct this mistake at the earliest opportunity. This is the only opportunity that we shall get.

Sir William Irvine:

– Without referring to the merits of the proposal, I would point out that by the Bill the Government seeks authority to borrow money, and the Committee, I take it, can attach any conditions it may choose to the authority that it gives. So far as I know there is no other measure to be introduced in which the proposed clause could be incorporated, and if this opportunity passes the honorable member will have no other on which to bring forward his important proposal.

The CHAIRMAN (Hon J M Chanter:

– The Minister for the Navy has raised the point that no private member has the right to propose an increase of expenditure, and that, therefore, the proposed new clause is out of order. I do not think that the clause would increase expenditure. The right honorable gentleman has also taken the point that the clause is not in order because it fixes the rate of interest for the proposed loan. I am of opinion it is not out of order for that reason.

Mr West:

– The matter was dealt with in a special Act. ,

The CHAIRMAN:

– It is particularly desirable when the Chair is asked to give a ruling that the Chairman should be heard in silence in order that the ruling may be thoroughly understood and properly reported. I read the proposed new clause because the Treasurer intervened and asked me to state the nature of it. If I had any official knowledge that the matter has been dealt with in other legislation it might alter my mind and my ruling, but in the circumstances before me I can do nothing but rule that the proposed new clause is in order.

Sir JOHN FORREST:
Treasurer · Swan · NAT

– I hope that the Committee will not do what . has been proposed. It is an almost unheard of proposition to take the financial business of the country out of the hands of the Government. We are committed to the conditions attaching to the issue of these war loans and we have the support of the financial community in regard to them. Furthermore, what- we propose to do is exactly the same as what has been done before in regard to our previous four war loan issues.

Mr Page:

– If we have done wrong previously, why continue to do wrong ?

Sir JOHN FORREST:

– I do not think that we have done wrong. Honorable members forget the price of money in Great Britain. The last loan that we raised inLondon was at 51/2 per cent, and expenses of flotation, and we intend to get this money at 41/2 per cent., with much less expenditure on flotation. Of course, there are some conditions attaching to the issue.

Sir William Irvine:

– Is it understood that the prospectus for the £20,000,000 issue is ready?

Sir JOHN FORREST:

– Yes.

Sir William Irvine:

– Would the right honorable gentleman consider the matter in regard to further issues?

Sir JOHN FORREST:

– Further issues must be considered on their merits. Money may be cheaper or may be dearer. We cannot tell now. Hitherto the Government have been supported in their financial proposals, and I am surprised that an honorable member, who was Treasurer for a little while, by proposing to introduce another system which he did not adopt when he was Treasurer, should try to take the control of the finances from those really responsible to the House and the country. I am informed by those in financial circles that if we adopt the same system as an our previous four flotations for war loans - it will be viewed more favorably than by adopting another system - and, acting on that information and also on my own judgment, and on the judgment of Ministers, I have clearly stated . to the House what we proposed to do. I hope that honorable members will trust the Government to do the best they can. The Government know all the facts. Some people always like their own way, but I hope that the honorable member for Grey will not persist with his proposal. It is . really in the nature of a no-confidence motion. The Government are acting with the full concurrence ofthe Commonwealth Bank, the associated banks, and the financial authorities, and in accordance with what we think is best for the country.

Mr PAGE:
Maranoa

.- Notwithstanding what the Treasurer has said about taking the business of the country out of the hands of the Government, I think that the honorable member for Grey should be complimented for moving his amendment. He has put up a very good case. Those honorable members’ in the corner who were so solicitous last week, and on Wednesday, about the interests of the small business men and the farmers - the backbone, if not of Australia, at least of Victoria - and particularly the honorable member for Wannon (Mr. Rodgers), who, while the Treasurer was speaking, was saying “Hear, hear!” all the time, have an opportunity of preserving the interests of those small, men by agreeing to the proposal before the Committee. If we continue to exempt the interest earned on Commonwealth war loan scrip from income taxation, it will be the small men of Australia who will have to pay the income taxation of the future. If honorable members understood the position thoroughly they would pot consent to allow the big man to escape the payment of income tax*- The honorable member for Grey pointed out last night that already one-sixth of the wealthy people of the Commonwealth escape paying income taxation on war loan bonds..

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

– Of course that was not correct.

Mr PAGE:

– The honorable member for Grey gave figures to prove his statement. He gave- us the benefit of the knowledge that he gained while holding the office of Treasurer.

Sir John Forrest:

– He brought in a Bill which was just the same as the one now before the Committee.

Mr PAGE:

– He did not propose to exempt the interest earned by war saving certificates from payment of income taxation.

Sir John Forrest:

– It is exempt.

Mr PAGE:

– Yes; because when the right honorable gentleman came into office he “burst up the show.” I propose to direct my attention particularly to the honorable member for Wannon, who last week, on the War-time Profits Tax Bill, pleaded so hard for the small man. If he is ‘anxious to assist the small man he has the opportunity to do so by supporting the honorable member for Grey.

By exempting the interest earned by investors in Commonwealth war loans from income taxation we are robbing the States of revenue. If we find that we are proceeding on a wrong course, surely to goodness we do not propose to continue on that course, as the spendthrift does, until insolvency brings us up. I would be prepared to agree to the payment of 6 per cent, interest rather than give this freedom from income taxation.

Sir John Forrest:

– It was the honorable member’s Government that introduced the system.

Mr PAGE:

– It is useless my continuing to argue that we have done wrong, and ought to pull up. The fact that we have been doing wrong in the past is no reason why we should continue doing wrong. I do not wish to take the financial problems out of the control of the Government. I would rather leave them where they are now, because if Ministers go on. as they are doing they will be the best political organizers that the Labour party could have. The honorable member for Grey has done service to the whole of the people of Australia by drawing attention to the .effect of this exemption, from income taxation. Is there anything dishonorable or dishonest in admitting that we have done wrong, and getting on to the right track so far as the future is concerned? No man should escape taxation, whether he is wealthy or not. Every person should contribute to the expenses entailed by the war, so far as he is able to do so. It is quite wrong to bring in a Bill to relieve anybody from taxation required for the purposes of the war. » *

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

.- When the first War Loan Bill was brought before this House I made a speech very much on the lines of ‘ that which has just been made by the honorable member for Maranoa. I pointed out, as well as I was able, that we had just passed through a great drought, in which a great deal of capital had been lost, and that when people realized that they could get 4£ per cent., and secure immunity from income taxation, they Would invest what I may call the movable capital of Australia in the war loan, realizing that in so doing they would be placed in a very advantageous position. I had a deeply-rooted objection to the proposal. ‘ I considered that a mistake was made in instituting it, and that it was a mistake to continue it, but when we already have £80,000,000 raised in Australia at a fixed rate of 4£ per cent, interest, the Treasurer is proceeding on right lines when he seeks to float another £80,000,000 on the same conditions. The immediate effect of the proposal of the honorable member for Grey (Mr. Poynton), if it were carried out, would be either to depreciate the stock of the previous loans, or to depreciate the new stock. If the honorable member wished to correctly inform honorable members as to which was the better investment, he should not have come here so ill-prepared in making his proposal to alter the financial arrangements of the country. He had the opportunity, as Treasurer, to secure an analysis of the effect of the exemption of £80,000,000 from income tax, but he did not make that investigation. He simply told us that £80,000,000 would not bear its fair share of income taxation. It was a fallacious statement. If he had been desirous of putting the position before honorable members correctly he would have analyzed the character of the subscriptions to the war loan; and ascertained what amount came from the smaller capital that would not pay the income taxation .to which, the honorable member referred. It is ridiculous to say that the interest on the £80,000,000 already invested in our war loans would pay income taxation at the rate of 6s. 3d’, in the £1.

I believe that the honorable member for Grey was the first Treasurer “to endeavour to popularize war loans. We went from factory to factory in the endeavour to induce the workers to subscribe, and they did contribute millions of pounds, their employers backing them up and finding the money in advance on certain terms. Included ‘in the £80,000,000 of previous war loans is an enormous proportion of money provided by men of small means. Then the big companies, such as the Australian Mutual Provident Society, in order to insure the success of the loan and safeguard the credit of - the country, made contributions of £1,000,000 and upwards. Every Treasurer ornaments his loan prospectus in order to improve the chances of the flotation, and the honorable member for Grey adopted exactly the same proposal as is being made by the present Treasurer. In every country the man who is responsible for making a success of a loan flotation adopts means to make the issue as attractive as possible. In Great Britain .we had to pay 5 per cent., and in addition we made a concession on the principal,, the loan being floated at £98. In Australia the concession was in .the nature of six months’ interest for a few weeks’ use of the money. When the honorable member for Grey was appealing to the money market he was not concerned about the equity of giving six months’ interest ‘ which had not been actually earned.

On the first War Loan Bill I resolutely objected to the principle of exempting this stock from income tax, but the prin ciple has been admitted, and already applies to £80,000,000 of war flotations. The effect of putting the new stock on the market will be to depreciate either the old stock or the new. Those who subscribed to the previous loans at 4£ per cent, were practically guaranteed that return from their investments, because it was a par loan and was immune from taxation. Now it is proposed that we shall place on the market a loan upon conditions which will make it either more attractive or less attractive, and. if it is more attractive the earlier loans will be at a discount. We have to-day reached a stage when “we are relying entirely upon our internal resources. All the financial institutions of the country are very carefully watching what is happening, and those who have the grave responsibility of financing the country are in close touch with the Government.

Mr Considine:

– Quite so.

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

– If the honorable member for the Barrier thinks that, we can play fast and loose with the . money markets he is making a great mistake. I thought that the first war loan, with its promise of 4£ per cent, free of taxation, was an excellent investment, for the reason that at that time our industries were practically at a standstill. That was the period of drought, and there was no encouragement to any one to invest in industry ; but the position to-day is different. To some extent there has been a thawing of tile great patriotic fervour which was evident in the early days of the war.

Mr Heitmann:

– The drought had an opposite effect. There was a greater call for money for building up the industries which had been affected.

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

– Not at all; the changed conditions are a result of war activities and the expenditure of money on equipment], &c. There is to-day an expansion in almost every trade with the exception of building. Money can earn more to-day than at any time for years past, and I do not mind admitting that many people will emerge from the war richer than they were at the commencement of hostilities. That is a condition of affairs which is not creditable, but it is a fact, and we must admit it. Money can produce a much higher rate of interest to-.day than at the outbreak of war. when the first loan was floated. At that time 4J per cent, with immunity from insome tax was a first-class investment.

Mr Considine:

– Is it not to-day?

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

– It is not. If the Treasurer departs from the principle which has been laid down he will either depreciate the previous loan stock or appreciate it.

Mr Lamond:

– What does that matter ?

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

– It is a question of keeping faith with the country.

Mr Tudor:

– The question we have to decide is whether the principle of exemption from income tax is right or wrong.

Mr Joseph Cook:

– The amendment will have the effect of appreciating the rate of interest.

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

– On the average -of the money invested in the War Loan no member in this Chamber, not even the Treasurer, can tell the people whether 4$ per cent, with exemption from taxation is a better investment than 5J per cent, with no exemption when we cannot know in advance how the money will be subscribed - whether it will come from all sections of the community in dribbles or be dumped down in huge sums by enormously rich men and corporations. In a time like this we must trust the Treasurer and- his financial advisers.

Mr Page:

– I know that I would sooner invest in stock carrying 4£ per cent, interest with exemption from taxation.

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

– The honorable member makes that statement because he is one of those lucky individuals who pav taxation on a large income, but were he amongst those of us who are less fortunate he would be very glad to have the 5£ ,per cent. The Treasurer is right in endeavouring to keep the war finances on a uniform basis. I believed that we made an error when we first adopted the principle of exemption from income tax, because we were reducing the number of those who bear the burden of taxation. But money is like water, and finds its own level. We have a standard -4£ per cent, stock in the country; let us stick to it.

Sir JOHN FORREST:
Treasurer · Swan · NAT

– I urge honorable members to support the Government in this matter. Already the idea has gone forth that the conditions of our war loans will be changed and that a higher rate of interest will be offered. The effect of doing that would be only to appreciate the value of existing stock. On that prospect there has been, I believe, recently a great deal of buying of 4£ percent, stock. As soon as we increase the rate of interest the 4£ per cent, stock will appreciate in value, and the ,people who have money to invest will buy the old stock instead of the new. If honorable members carry this amendment they will be playing into the hands of the people who hold the £80,000,000 stock already in existence. I should like to impress upon the honorable member for Maranoa that the course he is advocating will raise the price of money throughout the Commonwealth, and instead of getting money at 4£ per cent., we shall have to pay 6 per cent. That argument appealed to me. The proposal contained in the Bill has been carefully formulated after consultation with those financial authorities who are best informed in these matters ‘and who have promised to work in harmony with the Government in making the loan a success. Already there have been four instalments of War Loan issued. I hope we shall not ‘need to issue many more. We cannot go on the London market for another year, even for such small amounts as the £4,500,000 required for the States. Honorable members must not think that money is easily obtained. It will require all the inducements we can offer to get people to invest in this loan. I believe they will do so, but if we change the conditions attaching to our loans I do not know what the result may be.

Mr Bamford:

– Would it not be advisable to .wait and see the result of the war loan certificates scheme? Sir JOHN” FORREST. - War loan certificates are. for small holders, and £1,000 is the maximum amount that can be invested in them. If some honorable members, had their way the war certificates would be a continuous loan on the market. I do not think it advisable to have a continuous loan on the market. These war. loan certificates give small people all over the country an opportunity to invest.

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

– The Treasurer cannot expect a large amount of money from war certificates, which are not negotiable.

Sir JOHN FORREST:

– We have received a fair amount already, and I hope we shall get more. We are anxious to issue at once the prospectus for the first instalment of £20,000,000 of this loan, but the adoption of this Bill will not prevent us reconsidering the conditions when we desire to goupon the market again., On the next occasion we shall have to consider the whole position, and be guided by the conditions existing at the time.

Mr Falkiner:

– If we tax Federal loans, and State securites are not taxed by either the State or the Commonwealth, we shall be giving a bonus to the holders of State securities.

Sir JOHN FORREST:

– That is so. In any case this loan has a currency of only ten years. I again ask honorable members to support the Government on the principle that is now at issue.

Sitting suspended from 1 to 2.15 p.m.

Mr TUDOR:
Yarra

.- The question we have to consider is whether the principle involvedin the proposed new clause is right or wrong. Theoretically, every investor in our war loans receives the same rate of interest, but, having regard to the varying effect of the exemption from income tax, in practice that is not so. Our income tax begins at, roughly speaking, 3d. in the £1, and rises on a graduated scale to 5s., or plus the 25 per cent, increase, to 6s. 3d. in the £1. A married man with an income of £156 per annum is free from income tax, and so is a married man with two children whose income amounts to £200 per annum. If he receives £300 a year, and has two children under sixteen years of age, he pays income tax on about £100, at the rate of something like 4d. in the £1. If that income were derived from an investment in the war loan he would thus be relieved of the payment of income tax amounting to 4d. in the £1, but a large war loan investor whose income amounted to over £7,000 per annum would be relieved of the payment of income tax amounting to 6s. 3d. in the £1.

Sir John Forrest:

– There are not many so situated.

Mr TUDOR:

– Quite so; but surely our laws should be equitable. If the proposed new clause be agreed to - if we raise the rate of interest to 51/4 per cent., and make income derived from this loan liable to taxation, then the position of a man in receipt of an income of about £4,000 per annum will be practically the same as it is to-day; but those in receipt of a larger income from investment in the loan will be in a worse position. I hold that the honorable member for Grey’s proposition should be accepted. We have no right to say that a man who is in receipt of an income which, without the exemption of these loans ..from taxation, would be liable to pay the highest rate of income tax shall be in a better financial position than his less fortunate investor who has a- smaller amount to invest. I frankly admit that I was a member of the Government which first exempted from taxation income from war loans, but at that time we did not have a progressive Federal income tax, and when we find that we have made a mistake we should be prepared to acknowledge it, and -to makea fresh start.

Sir John Forrest:

– In the circumstances we think the Government’s proposal is the better one.

Mr TUDOR:

– The right honorable gentleman is welcome to his opinion. I would remind the Committee, however, that this Bill relates, not only to the £20,000,000 in respect of which the Treasurer proposes to issue his prospectus as soon as possible, but to the full amount of £80,000,000.

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

– If this amendment were adopted, would it not at once - provided the loan is floated - put the old war loans at a premium, and so give a big present to those who invested in the old war loan 9

Mr TUDOR:

– The sole question to be decided is whether the principle of this amendment is right or wrong. We have declared in our Income Tax Act that the man whose income amounts to £7,000 per annum or more shall payincome tax at the rate of 5s. in the £1, plus a 25 per cent, increase, but by exempting all income from war loans from the payment of income tax we are placing the man with an income of £7,000 a year on exactly the same footing as the man who receives only £150 a year. That is unfair; because, as I have already stated, one gets no exemption at all, and others from 3d. in the £1 to 6s. 3d. in the £1. If we recognise that we began on wrong lines we should not hesitate to avail ourselves of this opportunity to get on right lines.

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

– Without considering the effect?

Mr TUDOR:

– I do not wish to do anything that will hamper the Treasurer in any way in floating this loan, but I am sure that at some time or other we shall have totake the step now proposed by the honorable member for Grey (Mr. Poynton). I honestly believe that there must be an increase in the income tax, and no one will say that the small man should have to pay the same rate of tax as the man with a -very large income. That, however, is the effect of our decision in respect of previous war loans. The honorable member for Grey is to be commended for his action. We have already raised £80,000,000 in respect of war loans; it is now proposed to double that indebtedness, and we shall be acting wisely if we adopt this proposed new clause, and so get upon right lines without further delay.

Mr FALKINER:
Hume

.- I sincerely hope that the loan will be floated on the same terms as previous issues. Unless that be done a premium will be offered to the holders of the old loan as well as to the holders of the £357,000,000 of State securities. In order that the income of £3,600,000 from this loan of £80,000,000 may be liable to taxation, we are asked to give a bonus to the holders of £357,000,000 worth of State securities, plus £80,000,000 of Commonwealth war loan, or a total of £437,000,000, and at the same time to makethe success of this loan very questionable.

Mr Watt:

– How does the honorable member arrive at his total of £437,000,000 ?

Mr FALKINER:

– I am referring to the fact that £357,000,000 of State securities and £80,000,000 of Commonwealth securities will be free from taxation, while investors in this war loan will be taxed.

Mr Watt:

– The bulk of those State securities are held in London.

Mr FALKINER:

– £126,000,000 of the State securities are held in Australia, so that, to be exact, the honorable member for Grey proposes to give a bonus or premium to £206,000,000 of securities held in Australia by placing those stocks at a premium, and to do this merely for the sake of securing the right to tax some partof the £3,600,000 of interest on this £80,000,000 loan. There are many businesses earning from 8 per cent, to 10 per cent, that have put money into our war loans. Surely we cannot expect money to be taken out of those businesses,and to be invested in a war loan at 5 per cent., if the income so earned is to be liable to taxation ! I doubt whether the public would be inclined to subscribe to the loan under such conditions, and the honorable member for Grey would be well advised if he withdrew his proposed new clause.

Mr FENTON:
Maribyrnong

– There seems to be a considerable difference of opinion as to whether the principle embodied in the proposed hew clause is right or wrong. As the Leader of the Opposition pointed out, the only persons who will receive no benefit from the adoption of this proposal are those who are in receipt of an income of £5,000 a year and upwards. Below that amount the holders of stock or debentures under this Bill will, in a sense, be in a better position than they- would by investing it at 41/2 per cent. It is very difficult to know how the new clause would operate. For instance, there are big mutual insurance societies, such as the Australian Mutual Provident, the National Mutual, and other institutions, who, with the Commonwealth Bank, are the largest investors in our war loans, and who will still invest.

Mr Fowler:

– There is the Mutual Life and Citizens Society.

Mr FENTON:

– If it is a proprietary affair I do not. care how hard it is hit. I believe it is partly mutual and partly proprietary.

Mr Watt:

– It is co-operative.

Mr FENTON:

-All insurance societies are, in a way, co-operative. These big institutions have participated in past loans, and no doubt will contribute to the proposed loan, and they would be brought under the proposal of the honorable member for Grey (Mr. Poynton). Sir Joseph Ward, in his Budget statement over a month ago, said that if the time arrived when the people of New Zealand, who could afford to contribute, did not contribute to the loans at 41/2 per cent., he would be prepared to make their contributions compulsory. Since then Sir Joseph Ward has floated a loan which was over subscribed. What I wish to know is, whether the Commonwealth will be placed in a better position by offering 51/4 per cent, under the proposal of the honorable member for Grey.

Sir John Forrest:

– I do not think we should be so successful with the loan.

Mr FENTON:

– I remind the Treasurer of Sir Joseph Ward’s warning to those institutions and individuals of New.

Zealand who, while earning from 6 per wait, to 10 per cent, in their own businesses, are not prepared to show a proper patriotic spirit in connexion with a war loan. The idea of Sir Joseph “Ward was, in the event of certain conditions arising, to place a forced loan, and impose a tax on all incomes of over £700 a year.

Mr Pigott:

– Where would the money come from?

Mr FENTON:

– If the people refused to contribute Sir Joseph Ward would use the whip of taxation.

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

– We had better leave well alone.

Mr FENTON:

– There is a very different tone in this debate from what there was in the debate last week on the Wartime Profits Tax Assessment Bill, and honorable members opposite are not showing much consistency. There is certainly a great lack of information,; and, at any rate, we ought to know which policy would be best for the Commonwealth. In which position would the Commonwealth be best off?

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

– You do not know, and you have to vote directly.

Mr FENTON:

– Does the honorable member know?

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

– No, but I am willing to leave well alone.

Mr FENTON:

– Rather than make any mistake,, it would be well to allow a little time for consideration, so that the Treasurer may learn from the taxation officials exactly how the Commonwealth would stand under either of the proposals before us. This is the first moiety of an £80,000,000 loan, and we have before us a proposition that. we shall have to meet sooner or later. This is a very serious matter; and it is only reasonable to suggest that there should be a postponement.

Mr Corser:

– How do yon know that the Treasurer has not all the necessary information ?

Mr FENTON:

– If the Treasurer has the necessary information,, he is leaving the Committee in the dark.

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

– The responsibility is on the man who wishes to have the system altered.

Mr FENTON:

– Not necessarily; it would not be fair to transfer the responsibility from the Treasurer to the honorable member’ for Grey.

Sir John Forrest:

– The honorable member never votes for any proposal of the Government.

Mr FENTON:

– There seems to me some division in the ranks behind the right honorable gentleman; and what would be his position if he were now faced with an adverse vote?

Mr J H Catts:

– He depends on the party Whip !

Mr FENTON:

– Of course, if this is made a purely party matter the result must be detrimental to the interests of the Commonwealth. At any rate, we intend to exercise our right of free speech until we have the information necessary to enable us to record an intelligent vote. Honorable members may, if they like, regard Sir Joseph. Ward’s words as a threat, but the words did not fall from a Labour man, or a “ Yarra-banker,” but from a Fusion Treasurer in a Fusion Government. Since then, as I have said, Sir Joseph Ward has floated an oversubscribed loan; and my opinion is that many institutions and individuals who did not contribute to previous loans have contributed to the last one.

Mr Falkiner:

– There is so much money in New Zealand that people do not know what to do with it !

Mr FENTON:

– I am sure that if our Treasurer could show as fine a surplus as that shown by Sir Joseph Ward, of over £6,500,000, the honorable member for Hume and others would be asking why there should be any new taxation.

Mr Falkiner:

– New Zealand has that surplus because it never had a Labour party !

Mr FENTON:

– One of the reasons for New Zealand’s success since the early nineties is that two statesmen, one named Ballance and the other named Seddon, set in motion legislation, on distinctly Labour lines, that has been of great benefit to the country.

Sir John Forrest:

– It is desired to send this Bill to the Senate this afternoon.

Mr FENTON:

– The Government have up to the 15th of November in which to raise this money.

Sir John Forrest:

– When the £50,000,000 loan was proposed you never said a word. This is obstruction!

Mr FENTON:

– I ask the Treasurer whether, in the event of wealthy institutions and people not responding, he will follow the example of Sir Joseph Ward?

Mr Fowler:

– Why discuss a hypothetical case?

Mr FENTON:

– The Treasurer has told us that unless liberal terms are given people will not remove their money from other investments to put it into the loan. Should that prove to be the case, will the Treasurer have the courage to follow the example of Sir Joseph Ward?

Mr Falkiner:

– I rise to a point of order. The Bill, and not the Treasurer’s courage, is before the House.

The CHAIRMAN (Hon. J. M, Chanter) . - The honorable ‘ member for Maribyrnong is certainly travelling outside the question.

Mr FENTON:

– We have two proposals before us, and in regard to neither is there proper information. I suggest that the further consideration of the Bill be postponed till Wednesday next, the Treasurer in the meantime to obtain the information I have indicated, which might result in his obtaining the support of the whole House for his proposal.

Mr JOSEPH COOK:
ParramattaMinister for the Navy · NAT

. - I wonder if I can successfully appeal to the Committee to come to a decision of some kind very shortly.

Mr Fenton:

– What difference would a week’s delay make? .

Mr JOSEPH COOK:

– It would mean that we should have to undo all our arrangements for the launching of the loan to-morrow.

Mr Higgs:

– What right had the Government to make such arrangements before getting the Bill through?

Mr JOSEPH COOK:

– The right of custom. Our financial organization for dealing with loans has now been in existence for three years, and is fairly complete, but would have to be entirely reshaped if the proposal of the honorable member for Grey (Mr. Poynton) were carried.

Mr Poynton:

– The carrying of my amendment might mean the withdrawal of a prospectus that has been already printed, but it would not affect the organization of which the Minister speaks.

Mr JOSEPH COOK:

– During the past few months there has been an organization of finance to meet the demand that is to be made, and if at the last moment we vary the terms and conditions of the loan, ‘who can say what the effect will be ?

We need the money, and must get it; that is the first and chief consideration.

Mr Poynton:

– The first English war loans were exempt from income tax, but the last have not been.

Mr JOSEPH COOK:

– It is wonderful that ex-Treasurers who were content while in office with the present arrangement now agree that things are rotten ripe for a change. The great thing now, both here and elsewhere, is to maintain confidence in our financial arrangements.

The Leader of the Opposition (Mr, Tudor) referred to anomalies that would arise under the Bill, but there have been similar anomalies in existence for three years past. They were created by a Government of which he was a Minister. This is not the time, on the eve of floating a new loan, to re-adjust our financial arrangements.

Mr J H Catts:

– We want information.

Mr JOSEPH COOK:

– I have not risen to give information, and have none to give. The Treasurer will do that. I appeal to the Committee to let us have a vote on this question and get the Bill through. When the last big Loan Bill was before the Chamber there was no debate upon it, but on this measure there has been something like persistent obstruction.

Mr Tudor:

– The amendment was moved by a Government supporter.

Mr JOSEPH COOK:

– I appeal to the House to let the Bill go through, and for this once to put aside predilections for one and another method of financing, and remain on the beaten track which has served us so well hitherto.

Mr MATHEWS:
Melbourne Ports

– While there is much in the contention that the exemption of war loan interest enables many persons to escape taxation, I shall support the Government on this matter. In my opinion, every form of investment should be taxed down to a yield not greater than the interest on the war loan. One poor man whom I know put £5,000 into the war loan, and his poor brother-in-law invested £8,000 in a business. The brother-in-law is making 16 or 18 per cent, on his capital.

Mr Fowler:

– But he has the usual business risks to run.

Mr MATHEWS:

– The Government take care that, those risks shall not reduce his profits to an interest rate as low’ as that given on loan investments. How can we now alter the conditions on which we borrow, either in respect of exemption from taxation or in respect of interest? If we do, we shall increase the value of the loan already issued and diminish the inducement to invest in new loans.

Mr Poynton:

– They made the alteration in England.

Mr MATHEWS:

– The British Government during the war has made many mistakes, financial and otherwise, and notwithstanding its alteration may eventually come back to its startingpoint. It is not the man who is investing in the war loan that I would tax, but the man who is making 30, 40 and 50 per cent, from other investments. If possible I would borrow money compulsorily without interest.

Mr Considine:

– Yet the honorable member wishes now to give 41/2 per cent. free from taxation.

Mr MATHEWS:

– Yes; because men are allowed to make enormous profits out of other investments. I do not see why we should penalize those who put their money into war loans.

Mr ARCHIBALD:
Hindmarsh

. -I appeal to the honorable member for Grey (Mr. Poynton) to withdraw his amendment. The argument of the Leader of the Opposition (Mr. Tudor) was a reiteration of the maxim. “Let justice be done though the heavens fall “ ; but in practical politics it is not always possible to give effect to that maxim. In my opinion, it is not desirable at a time like this to make a change in the conditions under which . we borrow money.

Mr Poynton:

– They have done it successfully in Great Britain in respect of a loan for £1,000,000,000.

Mr ARCHIBALD:

– Anything done by the English financial authorities would have much weight with me, but I am not entirely bound by their example, any more than by the statements of Sir Joseph Ward. As to the latter, I think we have enough brains in this Parliament to find a solution of our financial difficulties without going to New Zealand. We know that it is very difficult for Great Britain to finance the war. The British Government find it necessary to. practically prevent other investments, so that money may not be diverted from their war loans. They would do anything they could to assist Australia or any of the other Dominions; but we know that they do not want us to go on the London market to borrow, and it is not desirable to approach them for assistance if we can avoid doing so. We should, as far as possible, having regard to the necessities of our trade and commerce, do our borrowing in Australia. Abraham Lincoln said that the middle of the stream is not a place to swop horses.- The honorable member for Grey asks to swop horses in the middle of the stream.

Mr Poynton:

– I am merely proposing to do what the British Parliament have done.

Mr ARCHIBALD:

– The circumstances are not the same. There are few negotiations in regard to financial matters in which the Bank of England and the Bank of France were not in consultation. I do not know that we are in a position to consult the Bank of France. The honorable member’s proposition is perfectly correct in the abstract, and it should be adopted, but not until after the war, when we can educate people to the altered circumstances. State loans are exempted from State income tax.

Mr Page:

– We will not need war loans after the war is over.

Mr ARCHIBALD:

– We will need loans for other purposes, and if. this argument is sound in regard to war loans, it will be sound in regard to other loans. What I fear is that if the proposition of the honorable member for Grey is carried out, the public will not “ catch on,” and the effect will be injurious in this time of difficulty. Our most important object is to get money for the purpose of carrying on the war, and in doing that we should not run counter to the practice to which the people are accustomed.

Mr Poynton:

– Is there any sense in giving one man 41/2 per cent, and others 6 per cent. ?

Mr ARCHIBALD:

– That is entirely a matter in the abstract, but we cannot deal with matters in the abstract. It would be a thousand times cheaper and better for the Government to put a poll tax on every citizen in Australia, and abolish Customs and Excise taxation; but would the people of Australia stand it? The Government which put forward such a proposal would not last a week. Abstract propositions are useless in a practical age, and during a time of war.

Mr Poynton:

– It was not looked upon as an abstract proposal in the Imperial Parliament.

Mr ARCHIBALD:

– There is no analogy between the position of affairs in Great Britain and in the position of affairs here. A poll tax is a sane method of collecting direct taxation. Honorable members opposite have frequently talked of the advantages of direct taxation, but not one of them would have the pluck to put such a proposition before the people. Honorable members know that it would not be listened to. I shall vote with the Government on this matter, because the present is not tbe time to run any risks. We cannot afford the luxury of running risks in war time.

Mr Poynton:

– How was it that Great Britain ran the risk?

Mr ARCHIBALD:

– In Great Britain there is a greater field for obtaining money.

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

– It might be said, also, that there is no analogy between the British loans and our loans in regard to the rate of interest and the value of the stock.

Mr.- ARCHIBALD. - I am not going into that aspect of the question. The average lender does not go into it. The rich investor may do so. As regards the taxation of the rich, surely this Parliament has sufficient brains to see that taxation is levied in the right direction. The average citizen “ catches on.” In trading circles customers are secured by “catches.” The exemption from . income taxation in regard to State loans and our war loans is a catch. It has “ caught on “ with the public. If we reverse that policy we will run a risk, and we cannot afford to run risks at this time.

Mr. HEITMANN (Kalgoorlie) [3.51. - I am inclined to agree with the honorable member for Grey that it is a bad business policy to exempt the interest on our war loans from income taxation. There is a rate of interest in the world’s money market, and we cannot pay a higher or a lower rate than that in Australia without finding ourselves in trouble sooner or later.- We may set up a distinct standard for the time being in Australia, but sooner or later we must come to the common rate of interest prevailing in the world’s market. I would be pleased if the Treasurer could tell us what interest will be paid for this money.

Mr Tudor:

– He has told us that the rate will be exactly the same as is being paid on the other war loans, that is41/2 per cent., with exemption from income taxation.

Mr HEITMANN:

– But when we say that we propose togive other privileges we immediately get into the position that there is. nothing definite as to the actual rate of interest that we will have to pay. It is the actual rate of interest that has to be paid that governs the floating of a loan, leavingon one side all patriotic motives. We do not know that we can tell any financial institution what the actual return’ will be on the money invested. We propose to pay 41/2 per cent, interest, but in addition we may increase our income taxation tremendously. If the Treasurer could ascertain the equivalent in interest to the exemption from income taxation he proposes to give tothe investor, it would be much fairer, and much more business-like, to increase the rate of interest to whatever figure the equivalent to the exemption on income taxation would augment it, whether it be 5 per cent., . 51/2 per cent., or 6 per cent. It. is always necessary, particularly in such a time as this,to make our loan prospectuses as attractive as possible. I contend that our prospectuses can be madeattractive by setting out clearly what the actual return will be for money invested in our war loans. In present circumstances we do not know what that return will be. The man with spare capital may be looking forward to a time when the income tax will be largely increased. However, while I support the honorable member for Grey in laying down the principle that we should not exempt investors in our war loan from income taxation, and that we should show exactly what we propose to pay for the money borrowed, it would not be good business to limit the amount of interest that the Treasurer must pay. That is a matter even the Treasurer cannot control, particularly seeing that we may have to go abroad to the world’s money markets for money.- If the honorable member will be prepared to divide his proposal, and simply lay down the principle that investors in our war loans shall not be exempt from income taxation, I will support him, but I cannot support any limitation to the attractions which the Treasurer may set forth in his prospectuses.

Mr PIGOTT:
Calare

.- It is not fair to compare the conditions prevailing in Great Britain with those prevailing in Australia. Great Britain is a lending country, and has always been floating loans for the assistance of the Commonwealth and other parts of the British Dominions where money is required. On the other hand, Australia is a borrowing country. The war loans in the Old Country were floated at 3 per cent, at the outbreak of the war. The rate of interest is now h per cent. That is an increase of 2J per cent. The honorable member for Grey proposes that we should increase our rate of interest by ‘i per cent. The honorable member for Yarra (Mr. Tudor) has spoken of a case where the income amounted to over £7,000, Let me point out that the surplus over that £7,000 would carry income taxation at the rate of 6s. 3d. in the £1. The crux of the honorable member’s argument is that in order to debar a man from making about 30 per cent. . we should raise the rate of- interest on the Commonwealth war loans by % per . cent. It is foolish to imagine that by making ‘the rate of interest per cent, instead of 4^ per cent, we would prevent the making “of the extra profit to which the honorable member has referred. We have already raised £80,000,000 at 4i per cent., and I do not see why we should give a preference to the .holders of that £80,000,000 worth of’ Commonwealth stock over future investors in our loans. The honorable member for Maribyrnong (Mr. Fenton) would create a financial panic by compelling people to subscribe to our loans. In our war-time profits taxation we have made an exemption of 10 per cent., instead of 6 per cent, as proposed by the Labour party. The honorable member would bring it down to 5 per cent. That is really the logical conclusion’ of his argument. However, I intend to reserve my remarks on this question for some future occasion.

Dr MALONEY:
Melbourne

.- I have always had doubts as to whether it is wise to issue bonds the interest upon which cannot be taxed. The great Napoleon said that property consisted of two kinds - that which was movable, and that . which was immovable, the latter being the land. With the exception of a few lands held for church purposes in the Orient, no property in any country has been given immunity from taxation, and it is somewhat incongruous that in this twentieth century we should issue bonds the interest on which is placed beyond the reach of taxation. That system makes it possible that the terrible word repudiation may be used by our successors. I have never advocated repudiation, but, as a result of a system of evolution the compulsory surrender of these bonds may be demanded in the future, and the holders forced to accept the full market value of their stock in Commonwealth notes. The figures quoted by the Leader of the Opposition showed that the small man holding bonds to the value of from £30 to £100 will derive practically no benefit from this exemption. If such a man has an income of ‘£156 he pays no income tax. If he has an income of £200, and is blessed with two children, he also will be . free of income tax. If he has an income of £300 he will pay an amount so small that he will not feel it. A man who has an income of £5,000 from war bonds would be paying in the ordinary course an income tax of 6s. 3d. in the £1 ; but under this Bill such income will be immune from taxation. That policy is not right.

There is no financial expert but recognises that this war has brought about a change in finance that no other epoch has shown. Economists are recognising that the nations engaged in war will not be able to struggle along under their huge national debts. The load which Pilgrim had to carry is nothing to the debt of the British Empire, and that debt is mounting higher and higher. Today it is £7,’X)00,000,t)00, and if the war continues it will’ be £10,000,000,000, which, at 5 per cent., will absorb £500,000,000 in interest. The Empire cannot support such a burden. The whisper has reached me that men of large means who are anxious to escape income taxation are investing largely in war bonds. I believe the Treasurer could count on the fingers of his two hands the wealthy men who, from patriotic impulse, are returning to -Che Treasury the interest they receive from their war bonds. It would be interesting to hear from the Treasurer the exact number of wealthy men who are doing that. The exemption of war loan bonds from interest hits the small investor every .time. What gave France its wonderful financial stability? It was the institution by “Napoleon of the Rentes, by which anybody could buy for £4 a bond worth 100 francs. To-day people in France can buy 50-franc bonds. The financial government of France has never been equalled in any other country in the world. One sees the interest barometer in the London market rising and falling continually, whereas in France it has been almost stationary for the last fifteen years, and even in war time is more steady than it is in the heart of the British Empire, notwithstanding the great financial power of Britain.

Mr Considine:

– I call attention to the absence of a quorum. [Quorum formed.]

Dr MALONEY:

– It is quite within the possibilities of the future that income taxation may reach 10s. and even 15s. in the pound. It may be that, if the needs of the Empire so demand, every penny over a certain income will be seized by the State. Therefore I view with some perturbation the borrowing of £80,000,000, the interest for which will be free from taxation. War bonds to the value of £80,000,000 are already in circulation, and with this new issue of £80,000,000, a total of £160,000,000 will have been removed from the taxable assets of the country. If this system is carried further, we may give immunity to the whole of our taxable assets.

Mr J H Catts:

– All property in a few hands will be beyond the reach of taxation.

Dr.MALONEY.- Nothing could be more detrimental to the community than that there should be a few very rich men and a large body of people who are absolutely poverty stricken. I can see rapidly approaching a changed policy, which may be called repudiation, to use the vilest and coarsest description, or may be more scientifically designated evolution. Every financial expert and economist is apprehensive of the troubles that will confront the nation when the war ends. I commend the honorable member for Grey for moving, the amendment. Much good may be done if publicity is given to the amendment by the press, and the people may realize that the time has arrived when we should cease issuing any security which will give the right to any people in our midst to say, ‘ ‘ You have no right to tax, this wealth of mine. By the bond of Shylock, it is beyond your reach, because it is represented by war bonds.”

Mr. HIGGS (Capricornia) [3.271. - I deprecate the tone of the remarks of the Acting Prime Minister. If anybody ventures to speak on the question of finance, he has to submit to ridicule and even opprobrious epithets from tha right honorable gentleman. Is it suggested, because a few honorable members have taken an intelligent interest in the finances of the country, that their action is to be deprecated ? We have been asked to pass the Bill to-day. Why this curious haste? Other measures could be delayed for “ days until the Treasurer had an opportunity to consult his supporters. I again suggest that the Treasurer -should report progress, and, in the meantime, before Wednesday, get the views of Government supporters in regard .to this measure. The statement of the Acting Prime Minister, that all arrangements have been made for the issue of a prospectus to-morrow, indicates that the Treasurer has been at his old trick of doing things he has no right to do. He had no authority to prepare a prospectus before the Bill was approved by Parliament.

The CHAIRMAN (Hon J M, Chanter:

– I ask the honorable member to confine his remarks to the question before the Chair.

Mr HIGGS:

– Am I not permitted to answer the argument advanced ‘ by the Acting Prime Minister? -

The CHAIRMAN:

– Order! I permitted the Minister for the Navy to make an appeal, and I have permitted the honorable member to reply, but I do not intend to permit a discussion which is outside the question before the Chair.

Mr HIGGS:

– Some honorable members have advocated that the Bill should be passed this afternoon because the prospectus is ready, and every arrangement is made for its issue to-morrow. The Treasurer ought to have waited.

The CHAIRMAN:

– Order ! I do not intend to bandy words with the honorable member. I ask him to comply with the request of the Chair. He knows as well as any other member of the Committee that if he disagrees with my ruling there is a proper course for him to take. It would be wrong of the Chairman to allow on tha question now before the Chair a desultory discussion to take place as to whether the Bill should be postponed or not.

Mr HIGGS:

– I invite honorable members, without any party feeling, to view this proposition from a business standpoint. The honorable member for Grey proposes that the loan shall be raised at 5J per cent., and that subscribers to it shall be liable to both State and Federal taxation. The Treasurer has pointed out that we have already raised £80,000,000 at 4£ per cent., and that the income from that investment is free from Commonwealth and State taxation. Taxation in some of the States is very heavy. In New South Wales it is much heavier than in Victoria, while in Queensland the taxation on the larger incomes is still heavier. A number of very large investors have put their money into the war loans in order to escape Federal and State taxation.

Mr Joseph Cook:

– The honorable, member will admit that when he was Treasurer he was treated perhaps more generously than any of his predecessors.

Mr HIGGS:

– One reason why I was not interfered with by the right honorable gentleman and the present Treasurer was that the Government of which I was a member was proposing to float a war loan at 41/2 per cent, free from taxation, so that we were doing exactly what they desired we should do in the interests of the big investors.

Mr Joseph: Cook:

– That is not the point I had in mind. I am suggesting that, as the honorable member will have ample opportunity to discuss this question in the immediate future, he should allow us to get this Bill through to-day. ‘

Mr HIGGS:

– Another place will be occupied with the War-time Profits Bill next week, so that there is no immediate hurry for the passing of this Bill, more especially as we have lying idle in the Commonwealth Bank some millions that we shall not be called upon to expend for some time.

The honorable member for Hindmarsh suggested that a Treasurer, in floating a loan, has to adopt methods very like those followed by business people in selling their goods. A man anxious to sell stockings marks them at, say, 2s.111/2d. instead of 3s., hoping in that way to induce unthinking people to buy them. I would remind the honorable member, however, that we cannot deceive the investor. Those who accumulate money are men of brains; even if they do not themselves calculate the return which an investment will give, they have clerks and accountants who do so for them. The various banking companies, before advising the Treasurer to issue this loan at 41/2 percent., probably asked their actuaries to figure out whether they would be better off if they invested £1,000,000 at 41/2 per cent, free of State and Federal taxation than they would be if they invested it in a loan at 51/4 per cent, liable to taxation. The Treasurer tells us that the Government have been advised by the financiers to issue this loan at 41/2 per cent. As a matter of fact, the actual return will be a little more than that. In the case’ of the last 41/2 per cent, loan, I think that the return amounted to £4 13s. l0d. per cent.

We ought not to pay too much attention to the financiers of the country. They naturally ask themselves, “ What is the best form of investment for our surplus wealth? Shall we invest it in State stocks or in Commonwealth war loans? Shall we invest it in gas or insurance company shares, or in the shares of - electric light companies?” They run over the whole gamut of investments, and select what they think the best. The old gentleman who has a large amount of money to invest, and wishes to leave it to his relatives in such a way that they will not have to look for some time for other investments, will probably put it into Government stocks. The longer the term of the loan the better, in his view, for those who are to come after him, since they will not have to seek a new investment. The proposal is, I think, that this loan shall be payable in 1927. When that time arrives I dare say the funding process will be gone through, and all these war loans will be put into one big loan covering twentyfive or fifty years. The rate of interest to be paid will depend upon the state of the money market. Meantime investors look upon these war loans as a very profitable form of investment. We find that the Commercial Banking Company put £750,000 into the last issue in August, 1916’; the Bank of New South Wales, £750,000; the ‘Bank of Australasia, £500,000 ; the Union Bank, £250,000 ; the English, Scottish, and Australian Bank, £100,000; the National Bank, of Australia, £100,000; the Australian Bank of Commerce, the London Bank of Australia, the . Colonial Bank of Australia, and the Bank of Victoria, £50,000 each ; and the Queensland National Bank, £25,000. Certain individuals also invested largely in that loan. I am pleased to observe amongst the subscribers the name of “ F. B. S. Falkiner “ for £13,000. It is wrong to suppose that the man who has money has no brains, or that the man who has no money is without brains. Everything depends upon a man’s temperament. Some men of brains like to devote their time to money making; others prefer to spend their time and energies in other ways.

I have gone into this matter as fully as possible in the brief time at our disposal. Had the honorable member for Grey given notice of his intention to submit this proposed new clause, he would probably have secured for it a much wider support. I would point out that an investment of £100,000 at 51/4 per cent, would give a return of £5,250 per annum. If the investor were living in New South Wales, his State and Commonwealth taxation on that income would be £1,446 per annum. Under the Treasurer’s proposal the investor who put £100,000 into this war loan at 41/2 per cent, will receive £4,500 per annum, and that return will be free from State and Federal taxation. On the other hand, if this proposed new clause be adopted, then the man who invests £100,000 in this war loan at 51/4 per cent, will have to pay £1,446 by way of taxation, which will bring down his income of £5,250 to £3,804. This means that a person, firm, or company who invests £100,000 in the war loan at 41/2 per cent., as against the other terms proposed, will save-

Motion (by Sir John Forrest) proposed -

That the question be now put.

Question put. The Committee divided.

AYES: 31

NOES: 11

Majority … … 20

AYES

NOES

Question so resolved in the affirmative.

Question - That the proposed new clause (Mr. Poynton’s amendment) be agreed to - put. The Committee divided.

AYES: 13

NOES: 32

Majority … * … 19

AYES

NOES

Question so resolvedin the negative.

Proposed new clause negatived.

Amendment (by Mr. Fenton) proposed -

That the following new clause be inserted : - “ That the rate of interest shall not be ex empted from taxation.”

Amendment (by Mr. Fenton) proposed -

That the following new clause beinserted : - “ The loan shall be subject to any taxation imposed upon general taxpayers.”

Motion (by Mr. Joseph Cook) put -

That the question be now put.

The Committe divided.

Ayes … … … 29

Noes … … … 11

Majority … … 18

In division :

The CHAIRMAN:

– Will the honorable member wait until the division has been taken?

Question so resolved in the affirmative.

Question - That the proposed new clause be inserted - put. The Committee divided.

AYES: 11

NOES: 30

Majority … … 19

AYES

NOES

Question so resolved in the negative.

Proposed new clause negatived.

Mr JOSEPH COOK:
Minister for the Navy · Parramatta · NAT

– I understand

Mr Higgs:

– On a point of order, during the division, I drew attention to a most offensive epithet to which the Acting Prime Minister gave utterance. I ask that he be called upon to withdraw it.

Mr JOSEPH COOK:

– I withdraw it, and apologize. I beg to move-

Mr Higgs:

– I thought that I had the call from the Chair.

Mr JOSEPH COOK:

– I understand that the question now is -

That the title be the title of the Bill.

I move -

That the question be now put.

The CHAIRMAN:

– The honorable member for Capricornia intimated to me that it was his desire to add a newclause to the Bill.

Mr HIGGS:
Capricornia

.- This is the clause that I wish to have added to the Bill-

Mr Joseph Cook:

– On a point of order, are we to understand that if an honorable member keeps on intimating that he has new clauses to move, he must be called upon to move them ? If that is so, the purpose of the closure is defeated.

The CHAIRMAN:

– Will the honorable member intimate the nature of. his proposed clause?

Mr HIGGS:

– The new clause that I wish to have added to the Bill is as follows : -

Such amount of money as is borrowed from the banks of the Commonwealth under this Act shall be allowed to remain in the said banks until it is required ‘ by the Commonwealth, due notice of such requirement being made by the Commonwealth; provided that the banks shall pay interest on such loan moneys while the said loan moneys are in their possession.

Mr Joseph Cook:

– If the honorable member proceeds to argue the matter, I must move the closure.

Mr HIGGS:

– I hope that I will be allowed a few minutes in order to explain my purpose in moving this new clause.

Mr. Joseph Cook__ On a point of order, this is a Bill authorizing the raising of a loan, and I submit that the proposed clause has no relevancy to it.

The CHAIRMAN:

– In my opinion, the proposed clause is outside the scope of the Bill. It is not in order.

Mr Higgs:

– Then I must move -

That the Chairman’s ruling be dissented from.

Mr Jensen:

– On a point of order, does not the motion moved by the Minister for the Navy take precedence over all points of order ? The Minister moved “ That the question be now put.”

The CHAIRMAN:

– I did not hear the Minister do so. The question is -

That the ruling bo dissented from.

Mr Higgs:

– May I debate the point?

The CHAIRMAN:

– No. I have already interpreted the standing order to mean that the question must be put forthwith, and without debate.

Question - That the ruling be dissented from - put. The Committee divided.

AYES: 11

NOES: 28

Majority … … 17

AYES

NOES

Question so resolved in the negative.

Mr HIGGS:
Capricornia

.- I desire to move an amendment.

Mr Joseph Cook:

– I have moved “ That the question be now put.”

Mr HIGGS:

– I move.

That the word “ Australia “ be inserted after the words “ war loan “ in the title.

Mr Joseph Cook:

– I have twice moved that the question be put.

Mr Brennan:

– The Minister for the Navy cannot move two motions at once.

Mr HIGGS:

– He’ apparently can, and he is wicked enough to do it, too.

Mr Brennan:

– This is an improper procedure, and ought not to be sanctioned by the Chamber.

Question - That the question be now put - put. The Committee divided.

AYES: 29

NOES: 11

Majority … … 18 - Question so resolved in the affirmative.

AYES

NOES

Question - That the title be the title of the Bill - put. The Committee divided.

AYES: 0

NOES: 11

Majority … … 17

AYES

NOES

Question so resolved in the affirmative.

Title agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Sir John Forrest) proposed -

That this Bill be now read a third time.

Mr HIGGS:
Capricornia

.- I desire to make a few remarks.

Motion (by Mr. Joseph Cook) put -

That the question be now put.

The House divided.

AYES: 25

NOES: 10

Majority … … 15

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 1861

DAYLIGHT SAVING REPEAL BILL

Second Reading

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– I do not intend at this hour to say more than that this measure, which was introduced in the last Parliament, and which, with the common approval of all sections, has proved a great success, is being repealed with the approval of the whole community. I beg to move -

That this Bill be now read a second time.

Mr FINLAYSON:
Brisbane

– I am one of those unfortunate persons who are not of theopinion that the Daylight Saving Act ought to be repealed. I find, myself still a supporter of the principle of daylight saving. Unfortunately, daylight saving was introduced into Australia at the wrong time last year, and suddenly brought uponthe people new conditions and new arrangements for which they were entirely unprepared. Had it been introduced in September, as was originally intended, and the people had become gradually accustomed to the change, I think that a very different result would have been attained. However, I do not think that daylight saving is as applicable to Australia as it was to England.- Honorable members know that in this matter we followed the example of Germany and, later, of France and Great Britain with that slavishness which has been adopted by the. present Government all through. We followed the daylight saving legislation with unsatisfactory results. I believe that in the winter time a Daylight Saving Act would be an excellent thing in Australia.

We legislated on the subject because it had been dealt with in Great Britain. Fortunately, we have found out our mistake, and the community as a whole, I believe, thought it was a mistake, and now it is proposed to repeal the Act. ‘ We have had, other illustrations. I might instance the War Precautions Act and the War-time Profits Tax Assessment Bill as two glaring illustrations of where we have followed the example of the older country, and increased our difficulties, and landed ourselves in unexpected circumstances which have been far from . happy and agreeable to the interests of Australia. In this case we can retrace our steps with little difficulty, and, although I am not going to hinder or obstruct the passage of this measure, I want to express my opinion that the parent measure was wrongly conceived and wrongly worked . - It was stupidly brought into operation, with no consideration of the effects in Australia as compared . with the effects in Great Britain. I believe that even yet the principle of daylight saving could be applied, to Australia with satisfactory results. I, for one. will be prepared at any time to support a measure which will give to the people of Australia the opportunity to do- their work in the daylight, instead of under artificial conditions, thereby saving, not only the health, but money of the people. However, the people say that they are tired of this measure, though, in my opinion, they have not had a fair chance of testing it, or otherwise they would probably not be so anxious to repeal it.

Question resolved in the affirmative.

Bill read a second time and reported without amendment; report adopted.

Standing Orders suspended.

Motion (by Mr. Hughes) proposed -

That this Bill be now read a third time.

Mr HIGGS:
Capricornia

.- I wish to point out that this measure did not suit the district ofRockhampton or the central districts of Queensland. However, I rose more particularly to say that when the Government bring forward a measure that we on this side are of opinion ought to pass, we make no attempt to obstruct it. We did offer some objections to another measure - to which I cannot refer just now - because we thought that it could be improved. There will be no obstruction on the part of honorable members on this side when they think a Bill introduced is for the good of the general public.

Question resolved in the affirmative.

Bill read a third time.

page 1862

PUBLIC WORKS COMMITTEE BILL

Bill presented (by Mr. Hughes), and read a first time.

page 1862

COMMITTEE OF PUBLIC ACCOUNTS BILL

Bill presented (by Mr. Hughes), and read a first time.

page 1862

PAPERS

The following papers were presented : -

British Trade Corporation– Copy of the

Petition of Promoters, the Deed of Settlement, and theRoyal Charter of Incorporation. - (Paper presented to the British Parliament.)

Papua - Infirm and Destitute Natives Account - Statement of the Transactions of the Trustees, 1916-17.

Public Service Act - Department of the Treasury - Promotions of -

P. Pogson. .

T. P. Walsh.

page 1862

ADJOURNMENT

Order of Business - Northern Terri tory : Censorship - Case of Mr. j. B. Siddall - Restriction of Landlords’ Rights - Central Wool Committee.

Motion (by Mr. Hughes) proposed -

That the House do now adjourn.

Mr TUDOR:
Yarra

– I desire to know from the Prime Minister whether the order of business of Wednesday next will be the order as set out on the noticepaper, or whether he proposes to proceed with either of the Bills he has introduced to-day. When does the right honorable gentleman propose to take the Repatriation Bill?

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– The Bills introduced to-day I regard as minor measures, the result of circumstances with which the honorable gentleman is acquainted. On Wednesday, the Government propose to deal with the Loan Bill. The War Loan (United Kingdom) Bill, next on the list, is merely formal. Leaving out the two minor measures introduced to-day, we shall dispose] as far as possible, of all those on the businesspaper that relate to finance, and then proceed with the Repatriation Bill.

Mr GROOM:
Hon orary Minister · Darling Downs · NAT

– Some time ago the honorable member for Melbourne Ports (Mr. Mathews) made a statement in the House, and asked some questions in reference to certain communications from Darwin, which he said were being cen sored, mutilated, and, in many cases, stopped altogether. The honorable member asked me to ascertain if communications were interfered with in this way; and the reply to his question, as supplied by the Deputy Chief Censor, is as follows -

With reference to the question asked in the House of Representatives by Mr. Mathews, I have to state that messages from Darwin are not being censored or mutilated, or in any case stopped altogether.

Communications from Darwin to Mr. Mathews have not at any time been censored and stopped or prevented from reaching him in the ordinary course.

The honorable member for Adelaide (Mr. Yates) some little time ago brought up the case of Mr. j. B. Siddall, of Bowman’s Arcade, Adelaide, and suggested that the military authorities had been concerned in the matter. I have now to inform the honorable member that a report has been received from the Military Commandant at Adelaide as to the incident at the shop of Mr. Siddall, referred to by the honorable member. The Commandant reports that the military authorities had nothingto do with this incident, but that the chairman of the South Australian Recruiting Committee, seeing in Mr. Siddall’s window a streamer which he considered likely to prejudice recruiting, advised Mr. Siddall to remove it. At the same time, the chairman of” the Recruiting Committee advised Mr. Siddall that he was committing an offence in exhibiting the streamer. Mr. Siddall replied that he had no desire to offend against the law, although he felt very sore at the action of his landlord ; and he removed the streamer.

The honorable member for Adelaide also raised the question of the restriction of landlords’ rights. There is not at present any restriction of the right of landlords to raise the rents of properties occupied by soldiers. Regulations with reference to this subject are now being prepared.

Mr FALKINER:
Hume

.- Today, whenI endeavoured to ask the Prime Minister a question without notice, I was ruled out of order. That question had reference to many questions which have been put on the notice-paper by the honorable member for Capricornia in regard to the Central Wool Committee. For nearly five weeks now the Central Wool Committee have been very busy trying to get the machinery more perfect than it was on the last occasion to deal with the 1917-1918 clip. We have been working with a technical advisory committee of about twenty-five; and every day there have been questions asked by the honorable member for Capricornia, which seem to me to reflect more or less on the committee, or some members of the committee. We have carried out a contract with the Imperial Government for a huge amount, £25,000,000 - a contract that proved very difficult to administer. If the honorable member for Capricornia has anything to say, or entertains any suspicion against the chairman, or any member of the Central –Wool Committee, he is privileged in this House to make a charge; and that, in my opinion, would be preferable to the continued asking of questions, which may give the public an idea that there is some wrong-doing on the part of the chairman, or some member of that body. I think it is a fair thing that the honorable member should come out openly and state what he knows on the floor of the House. This continual asking of questions is, I think, mean, unmanly, and undeserved.

Mr Higgs:

– I ask that that be withdrawn.

Mr DEPUTY SPEAKER (Hon J M Chanter:
RIVERINA, NEW SOUTH WALES

– The honorable member for Capricornia takes exception to the expression which has been used, and I ask the honorable member for Hume to withdraw it-

Mr FALKINER:

– I withdraw the other adjectives and say that the honorable member’s action is not justified.

Mr Higgs:

– What one can say in the stockyard he cannot say here.

Mr FALKINER:

– No ; one is more polite in the stockyard. There are no asses there. The chairman of the Board looked after the metal business for the Government of which the honorable member for Capricornia was Treasurer. I have been associated with many classes of the community, and the chairman of the Central Wool Committee is one of the most capable business men it has ever been my lot to meet. If the honorable member for Capricornia thinks that any member of the Wool Committee has done anything wrong, or if he has any suspicion about the members of the committee, let him state it openly on the floor of the House.

Mr HIGGS:
Capricornia

.- The remarks of the honorable member for Hume are quite uncalled for. What is the matter with the Central Wool Committee? Is a cap fitting them in any way that they have become- so restive? I have been endeavouring to obtain some information, and the questions I have put to the Prime Minister have been quite clear. My first question was whether the Government had made any arrangement to share any profits on the sale of wool tops with any firm. I was told that they had. Then I asked what was the name of the firm, and whether any other firm might enter into an agreement similar to that made with the Colonial Combing and Weaving Company and Whiddon Brothers. Did I get a straight answer to that question? No, it- was evaded by the Prime Minister. I was then forced to task another question. Even then I did not get a candid answer. As honorable members will observe from the. questions I have put, I have been compelled to ask them because of the difficulty of getting information from the Prime Minister or the Central Wool Committee. I am- asking my questions because -it is said that one of the members of the Central Wool Committee is largely interested financially in the agreement to share the profits of the sale of wool tops with the Government. I am endeavouring now to get from the Central Wool Committee a list of the shareholders of the Colonial Combing and Weaving Company, in order to discover to what extent this particular member of the committee is interested in the company. I could not obtain that information. The Prime Minister had to refer me to the Registrar for New South Wales. He said that the Government had not a list of the shareholders of ‘the company, although according to the agreement made with the company a list of their shareholders should have been furnished to the Government. The company did not furnish that list. Why did not the chairman of the Wool Committee call upon the company to do so ? I am not reflecting in any way upon, the chairman of the committee, but his language to me and the language of the honorable member for Hume (Mr. Falkiner) this afternoon prompt me to suggest that, however able the chairman of the Wool Committee and the honorable member may be, the committee appears to have been caught napping - I will go that far - by this gentleman, who is one of the members of the committee, and who has been able to secure an agreement with the Commonwealth Government which apparently no other firm has the privilege of securing. The matter has been done in such a way that, in my opinion, it has not been openly done.

Mr Falkiner:

– I take exception to those remarks.

Mr DEPUTY SPEAKER:

– Will the honorable member indicate what words he takes exception to?

Mr Falkiner:

– The agreement was entered into by the full Board, and the honorable member has said that , it was not entered into in an open manner.

Mr DEPUTY SPEAKER:

– That is not out of orders-

Mr HIGGS:

– When I say that the agreement was not entered into in an open manner I mean to say that in the case of a business proposition of this kind from which the Government expect to make £70,000, and from which the Colonial Combing and Weaving Company will make at least another £70,000, the public of Australia generally should have been invited to enter into it.

Mr Joseph Cook:

– Are we making £70,000 out of it?

Mr HIGGS:

– The Prime Minister said that the Government would make that much out of it. The honorable member for Hume (Mr. Falkiner) must see that in a business transaction like that in connexi’on with which a firm like the Colonial Combing and Weaving Company may make such profits, a similar opportunity to participate in the profits on the sale of wooltops should have been afforded to the public generally of Australia. An advertisement should have been inserted in the newspapers to the effect that the Commonwealth Government were prepared to enter into an agreement with any company possessing wooltops manufacturing machinery, or prepared to bring it into Australia, upon certain terms that would be fair and aboveboard.

Mr Falkiner:

– Will the honorable member say what other firms would be concerned ?

Mr HIGGS:

– That has nothing to do with it.

Mr Tudor:

– Our own mill, at Geelong, and Foy and Gibson’s make wooltops.

Mr HIGGS:

– That has really nothing to do with the question. The Government desired to enter intb an agreement in connexion with this business, and they had a right to let the public know. The Central Wool Committee, and the members of the Government knew all about this matter, and they entered into this private arrangement - private in so far as the public knew nothing about it - with the Colonial Combing and Weaving Company. My questions on the subject have been direct and straightforward, and they should have been answered directly and straightforwardly. I put a question on the paper about this matter today, but the Prime Minister could not answer it straight off. He asked me to give him three or four days’ notice, and it is to be answered next Wednesday. This question is asked to enable me to learn who is the member of the Central Wool . Committee who is interested in this matter. I am aware that the committee is an honorary committee, and that its members are not paid. There are eleven members of the Government, and if they were largely interested in a contract with the Government, would the honorable member for Hume consider that regular? The Central Wool Committee are no doubt carrying out their duties very ably, and in an honorary capacity, but they should not in their position enter into an arrangement with a company privately that is npt open to the general public. Does the honorable member for Hume (Mr. Falkiner) not see that? This is the reason for my question. When I get a list of the shareholders of the Colonial Combing and Weaving Company and discover whether it is true that a member of the Wool Committee is interested in the agreement, it will be my duty to ask the Government to give me an opportunity to discuss the matter, or take advantage of such opportunities as I may be able to secure under the forms of the House to do so. I can assure the honorable member for Hume (Mr. Falkiner) that, so far as I am concerned, he will then have every opportunity to answer any statements I may make. I believe that this business has not been carried out as’ it ought to have been, and that is owing, I believe, to the fact that the Central Wool Committee has been caught napping, as I said before, by one of its members, who is a little more clever than the rest.

Question resolved in the affirmative.

House adjourned at 5.10 p.m.

Cite as: Australia, House of Representatives, Debates, 7 September 1917, viewed 22 October 2017, <http://historichansard.net/hofreps/1917/19170907_reps_7_83/>.

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