7th Parliament · 2nd Session
Mr. Speaker (the Hon. W. Elliot Johnson) took the chair at 3 p.m., and read prayers.
Mr.FINLAYSON.- Has the Minister representing the Minister for Defence noticed that a considerable amount of public attention has been given to the question that I asked last week concerning the formation of a Scottish Regiment, and that last night at Sydney an enthusiastic meeting approved of the project, and sixty-five recruits enlisted?
– The following memorandum from the Minister for Defence sets out his views on the subject : -
Referring to the suggested formation of Highland Regiments to reinforce the Australian Imperial Force, the Government fully appreciates the pride of Australians of Scottish ancestry in the history and traditions of the famous Highland Regiments, and respects their desire for the perpetuation of those traditions amongst their descendants in the Dominions. The proposal to form a Scottish Regiment in Australia to assist in reinforcing the Australian Imperial Force cannot, however, he given effect to. The five Australian divisions now in the field are organized in brigades and battalions, which have won for themselves, by their courage and dogged endurance, traditions which it is desired to cherish and perpetuate in Australia. Owing to severe fighting, many of these battalions are sorely depleted in numbers, and the pressing need is for recruits to fill up the gaps in existing battalions. If new battalions were formed on thebasis suggested they would have to take the place in the existing brigades and divisions of the battalions referred to, and the Government feels that it cannot indorse such a proposal.
At the same time, appreciating the spirit of patriotism that has prompted the proposal, the Government will welcome the formation of units of reinforcements, and an assurance can be given to those of Scottish descent that if they enlist together, they will be trained together in Australia, sent oversea together, and, as far as military exigencies permit, will be kept together in the same unit. The course has already been followed with successful results in regard to the Riflemen’s Thousand and the Sportsmen’s Battalion. The Government is also prepared to extend this principle to other sections who are prepared to guarantee obtaining recruits on this basis, but it must be distinctly understood that the existing organization of the five Australian divisions will be retained.
It is not proposed at this juncture to make any alteration in the service dress, which has been demonstrated as suitable for all requirements, as a result of three years’ experience in this war.
– As the correctness of the report of a speech recently delivered by Dr. Mannix at Kilmore, which was published in Monday’s Argus, has been challengedby him, will the Government take steps to determine whether the report is accurate?
– The Government has already done so.
-Can the Honorary Minister (Mr. Greene) obtain, for the information of the House, a statement showing the quantity of butter produced -and exported in the months of January, February, and March of the years 1915, 1916, 1917, and 1918, and the prices at which butter was being sold in Australia during those months ?
– I shall do that.
– Is there any truth in the common rumour that the Government has decided torecruit boys of eighteen, in spite of the objection of their parents?
-I do not know that there is a common report to that effect. The Minister for Defence has stated the decision of the Government in this matter, and if the honorable member desires more explicit information, and will give- notice of his question, I shall get it for him.
– At the present time there is little chance of getting discussed a motion set down on the noticepaper by a private member. I, therefore, ask the Acting Prime Minister if, at an early date, he will provide the House with an opportunity to discuss the regulation permitting boys of eighteen years . of age to enlist without their parents’ consent?
– I cannot promise a special opportunity, for the consideration of the subject, but, incidentally, an opportunity will occur very Shortly in’ connexion with the consideration of the Defence Estimates.
– I wish to ask the Minister for Home and Territories whether he is aware that, notwithstanding the assurances given by him in this House, that naturalized persons would not be interfered with in connexion with the Military Service Regulation governing the deportation of Italians, the military, on at least three different occasions since he made that declaration, have entered the homes of naturalized persons? Is he aware, further, that while he is busy certifying that certain persons are naturalized, and, therefore, immune, his colleague, the Minister for Defence (Senator Pearce), is certifyingthat the very same persons are aliens, and are to be deported?
– The honorable member’s question is not urgent, and it is long enough to warrant notice; but since it involves a misunderstanding on his part, I shall reply to part of it. As a matter of fact, I did not give such an assurance as he suggests. A declaration, as he knows, is one thing, and an assurance quite another. What I said was that it was not the practice to deport naturalized persons; but that, possibly, in one or two cases a mistake might have been made as to whether certain individuals were naturalized or not. I said, also, that the one Department was. endeavouring to help the other. If the honorable member desires specific information as regards a particular case, I suggest that he give notice in writing. I shall then obtain the information for him,
– I desire to ask the Acting Prime Minister if, in view of the very serious drift of population from the country to the great cities, the Government will see that no further restrictions shall be placed upon country races, either registered or unregistered, until all racing on proprietary race-courses has ceased.
– I can only tell the honorable member that the Government are at present considering the matter. If he desires a more explicit statement, I shall be glad if he will give notice of his question.
Lack of Employment
– Is the Minister representing the Minister for Defence aware that at’ present there are practically 600 men unemployed at Lithgow, as a result of the stoppage of work iu the Small Arms Factory about ten weeks ago? If so, will he consider the advisableness of permitting married men with large families to return to work at that factory as soon as possible?
– I ask the honorable member to give notice of his question. Might I also suggest that, in regard to most questions put to me as representing the Minister for Defence, it is necessary that notice should be given, inasmuch as I have no control over many branches of the Department.
– A most interesting article appeared in the press, this morning as to several records established by the Postmaster-General. When will the Postmaster-General favour honorable members with the report on the subject, since it is a matter in which we are all deeply interested, not only personally, but politically.
– In due time.
– A few days ago there appeared in the Age or the Argus a. very interesting article by Lieutenant Brown, a returned soldier, who has been awarded a Rhodes scholarship. In this article Lieutenant Brown set out the terms and conditions under which such scholarships are awarded to Dominion soldiers. He mentioned incidentally that the South African and Canadian Governments were co-operating with the Home authorities in providing opportunities at both Oxford, and Cambridge for the training of soldiers, where it is believed that it would be beneficial to both the men and their country that they should be given an opportunity to finish their courses abroad or to obtain some high scholastic training. I ask the Acting
Prime Minister whether he will inquire into ‘the matter, and see that Australia also participates in the contribution to the establishment of ‘these scholarships.
– I shall certainly investigate the matter. So far, I know nothing of the conditions to which the honorable member has referred.
Civilian Manager at Brisbane.
– Will the Minister representing the Minister for Repatriation inform the House who is responsible for the appointment of managers of, or instructors at, the Soldiers’ Industrial Institutes, which are being established throughout Australia, for the purpose of teaching vocational callings. I also ask whether it is true that in a Queensland institute a civilian has been appointed as manager over the heads of competent returned men, and that ‘the men refuse to work under him. If it is true, what action do the Government propose to take?
– If the honorable member will at once supply me with the facts he has just stated, I shall endeavour to obtain an answer to his question tomorrow.
Non-payment of Returned Soldiers at Cockatoo Island.
– Is the’ Minister representing the Minister for the Navy aware that returned soldiers at Cockatoo Island, who were given a day off last Anzac Day, received no payment in respect of the time so lost ? If so, will he give the House reasons for the nonpayment of these men?
– I am not aware that payment was refused the men; but I shall make inquiries and advise the honorable member later on.
– On 10th April last the honorable member for Hunter (Mr. Charlton) asked -
Has the Minister representing the Minister for Defence noticed a cablegram which states that, in future, promotions in the British Army will be based on merit, and not on seniority, and can he state whether that method will also apply to the Australian Forces?
I promised to bring the honorable member’s question under the notice of the Minister for Defence, and the answer supplied is as follows: -
It is provided by Australian Military Regulation 103 that the Governor-General may promote an officer for distinguished service or for marked ability and gallantry on active service, without his passing the prescribed examination.
By Executive Council Minute, No. 484 of 25th July, 1917, the General Officer Commanding, Australian Imperial Force, has been vested with the power of appointing and promoting, subject to confirmation, officers who, in his opinion, are able and qualified to fill vacancies in the authorized establishment.
It will be seen, therefore, that provision has been made to allow of officers of outstanding ability being promoted without the question of seniority entering into the matter.
– As paragraphs have appeared in the press recently regarding possible disbursements in connexion with the Wheat Pool which are likely to cause some disappointment later on, and may help the operations of scrip dealers; will the Acting Prime Minister make an announcement at the earliest possible moment of the intention of the Government in regard to the matter ?
– I had hoped to be in a position to make a definite and final announcement respecting the matter last week, but negotiations are not yet finalized. As soon as they are completed. I shall make an announcement in the House. I may add that the Government reprehend most decisively ‘ the leakages of information that have taken place in New South Wales and South Australia, to which our attention has been directed.
– On Wednesday last the honorable member for Melbourne (Dr. Maloney) drew attention to a document left in one house out of six in a certain street, and in which the male occupier was requested to supply his name, address, occupation, age last birthday, and to state whether he was single, married, or a widower. He asked me to make inquiries and ascertain whether this was a form of conscription. The Minister for
Defence has supplied the following answer : -
The State Recruiting Committees of all States have been instructed by the DirectorGeneral of Recruiting to compile lists of males between nineteen and forty-four years of age at present in Australia.
The object of obtaining such lists is to deliver to such eligible men a card asking for their consent to submit their names to a voluntary ballot enlistment.
In order to complete these lists a house-to- house visitation is being made, and establishments where a number of men are employed are being asked to save time and ask their employees to supply their addresses, &c
– As many farmers’ organizations are already making their purchases of cornsacks, and as an early announcement regarding the position of the Government in regard to the acquisition of jute cornsacks, woolsacks, and bransacks would clear the air, I ask the Minister in charge of price fixing if he is yet in a position to make a full statement in regard to the matter, and also in regard to the basis of distribution?
– I am prepared to do so to-day. I ask leave of the House to make a statement in regard to the matter.
– The honorable member for Wakefield (Mr. Richard Foster) originally asked a question in regard to this matter, particularly in regard to certain statements made by Major Purcell, which had appeared in the Age. I wish to deal with those statements first, before giving the actual details of what the Government have done. One statement was to the effect that the bags we were purchasing in Australia cost very nearly double the price at which Argentine producers got their bags. I made special inquiries into that particular phase of the matter, and learned from a merchant in Melbourne that he had heard a similar statement, and thought it advisable to buy some of the bags in India. I have one of the bags with me. It is not nearly as large as the Australian bag is, it is made of very inferior material, and it is altogether unsuited for our trade. The gentleman who bought these bags has been trying very hard to get rid of them ever since. I believe that he is selling most of them to dealers in vegetables. The bag used by the Australian farmers is a very different article, and is worth more than double the money which is being paid for the bags supplied to the Argentine producers.
Major Purcell also said that the Commonwealth Government were blamable, because they had not tried to enter into direct negotiations with the mills in India for the supply of jute requirements. He pictured the Indian millers as bubbling over with generosity and philanthropic intentions towards the Commonwealth Government if we would only approach them directly and ask them to sell bags to us. Senator Russell, who is dealing more directly with this matter, has supplied me with the following statement in regard to it: -
In March, 1917, a cable was forwarded by the Commonwealth Government, through His Excellency the Governor-General, to the Viceroy of India, asking that quotations f.o.b. and c.i.f. be obtained from Calcutta millers for the supply of Australian standard cornsacks for the 1917- 1918 wheat harvest, which the Commonwealth Government proposed to purchase direct in India. In May, 1917, a cable was received from the Viceroy of India intimating that the mills refused to accept the offer of direct business.
The Commonwealth Government had already tried to do what Major Purcell has said that we ought to have done, namely, to purchase direct from the millers, and the millers have absolutely refused to entertain any offer of direct business with them. Senator Russell’s statement, I think, sufficiently absolves the Commonwealth Government of any charge of neglect an regard to the’ matter. The statement continues^-
Negotiations for the purchase of cornsacks for the 1918-1919 harvest were re-opened by the receipt of a cable in February last from the Viceroy of India intimating that the Indian Government had appointed a Controller of Jute Supplies, and asking if it would suit the Commonwealth Government to place its orders through him. Subsequently the Viceroy of India agreed to purchase cornsacks through the Controller, but declined to interfere - with the usual trade usages and customs in regard to other jute material. Two hundred thousand bales of cornsacks were eventually purchased, based on the Australian requirements. Up to the present no definite statement as to the price paid has been received by the Government, but it has been notified that the purchase is at a rate considerably below that which could be obtained by the trade in open market.
A figure has been quoted to us, but it is subject to a certain amount of adjustment in regard to matters over which we Have no control. The House will be given information as to the definite figure as soon as the negotiations are completed.
– What does the Government intend to do about the indents made prior to the undertaking to buy the 200,000 bales ?
– I understand that arrangements have been made to repurchase the greater Dart of those bags. One shipment was practically on the water, that is to say, it was being loaded into the vessel when these negotiations were in process of completion, and those bags have left India. The ‘ proposal is that they shall be the subject of adjustment later on.
– What about woolsacks ?
– The statement which I have read makes it quite clear that the Viceroy of India has refused to interfere with the usual trade usages and customs with regard to any other jute supplies than the actual purchase of cornsacks. Senator Russell’s statement continues -
The position regarding shipping has been definitely and clearly placed before the Shipping Board, and every ‘effort is being made by those in charge of the scheme to see that the maximum amount of freight space will be made available for the Australian requirements.
In this respect, however, it is necessary to let honorable members and the public know that much must depend on the exigencies of the war and the urgent demands of the Imperial Government and its Allies in connexion with the carrying of troops, foodstuffs, and munitions. This point of view cannot be too strongly urged. It may be that owing to these causes serious inconvenience and delays will be experienced, and no action taken by the Government will be able to avoid them.
– Whilst that is true, we’ are leaving no stone unturned to avoid these delays, if it is possible to avoid them. Senator Russell’s statement proceeds -
At the present time there is a great scarcity of bran bags, woolpacks, and jute-piece goods in Australia, but it is expected that relief will shortly bc available owing to the arrival of a cargo, the character of which is the result of the efforts made by the Government.
The probabilities are, of course, that these jute goods will come under the pricefixing regulations in the same way as other jute goods. The statement continues -
Although the urgent need of bran bags was strongly pressed by the Government, for some reason not yet made known no cargo of this line of goods was included in the freight above referred to, and no explanation was received beyond a receipt of a cable announcing that it was regretted that no bran bags had been shipped. .
In connexion with the next shipment it has again been urged how important it is that a supply of bran bags and other jute goods should be sent, and a priority list of the cargo desired has been submitted by the Government.
With regard to the distribution, while keeping in view the necessity for placing cornsacks with the farmer at the lowest possible cost, as the present transactions are carried out as a war measure, every effort will be made to preserve the trade as nearly as possible . in its normal condition, and the formation . of a general scheme for so doing is now under con- sideration.
I shall be very glad to give to the House the exact details of the scheme when the negotiations are completed.
– Are the Government prepared to give to farmers’ unions or organizations an opportunity to come in as distributors?
– Yes, I think I may say that we are.
– How about the manufacturers - the bag makers?
– They, I presume, will have to buy their piece goods in the ordinary way, and sell them in the ordinary way.
– On Thursday last the honorable member for Wakefield (Mr. Richard Foster) asked the following questions : -
In answer to inquiries, which were then made, I have received the following replies : -
These provisions, as well as the action taken by the Governments of the United Kingdom and the United States of America, with regard to priority of shipment, have the effect of conserving space for essential goods.
– On the 2nd May, in re ply to an inquiry by the honorable member for Melbourne (Dr. Maloney) as to whether information would be given in respect of fines imposed for breaches of contracts with the Department of Defence in connexion with the supply of food, &c, I stated that I would endeavour to furnish the information in the form of a return at an early date. I have since ascertained that the compilation of the information asked for would entail a vast amount of work, as the records in each Military District would have to be searched, and it would be almost impossible to compile complete lists. In view of the fact that a systematic inspection of contract business is now being carried out in every Military District, and prosecutions instituted where necessary, the results of which are published in the press, it is not considered that any useful purpose would be served by the expenditure of time and labour which the compilation of the information -would entail, especially as the Departments most concerned are understaffed.
Exportation to Japan
– On Thursday last, the honorable member for Capricornia (Mr. Higgs) asked a series of questions with reference to the export of wool to Japan, and as to any correspondence with the British Government in connexion therewith. I find, on inquiry, that negotiations regarding wool transactions between His Majesty’s Government and Allied Governments cannot be disclosed. This is a direct instruction from the Imperial authorities.
– I should like to know from the Acting Prime Minister whether petitions presented to this honorable
House receive the attention of the Government, and, if so, whether a recent petition, containing upward of S3,000 signatures has yet been considered?
Mr.WATT. - Speaking from a somewhat . extensive knowledge of parliamentary work, I do not think it is the practice of the Government to consider petitions presented to Parliament.
– In view of the press announcement as to certain gentlemen having been appointed a Commission in connexion with the Treasury, is it the intention of the Government to relegate to that Commission power to levy the taxation that will be necessary to carry on the Federal Government? Is it intended to relieve the Government of responsibility in regard to future taxation?
– In political life, we get some surprises, and it is one to me to find a gentleman, who recently spoke so’ authoritatively for the Opposition on finance, making such a mistake regarding a fundamental matter. No Commission’ has been appointed; but a Council of Finance has been created, which will be summoned to give advisory assistance to the Treasurer and the Treasury. That Council will have nothing to do with taxation, but it may be of great service, as found in the United Kingdom, in critical periods of finance, in assisting with its information and experience, the Government of the day.
– Will the Acting Minister for the Navy make a statement showing what ships have been taken from the coastal service, and what other steps have been taken to economize in the handling of coastal produce and passenger traffic, with special reference to the abandonment of the wasteful system of travelling to time-table, which used to obtain on the oversea service?
– I shall endeavour to get that information.
– I should like to ask the Acting Prime Minister if the glowing testimonial furnished by the honorable member for Gwydir (Mr. Webster) to the
Postmaster-General,and published in this morning’s press free of charge, is to be taken to foreshadow a painful change in thepersonnel of the Government?
– I have not had an opportunity of reading the testimonial to which the honorable member refers, but I am told that it was the gem in this morning’s press. As far as I know, it has no reference whatever to any ambitions which may have been excited in the honorable member for Batman by the reading of the paragraph.
– Has the Assistant Minister for Defence received a letter and statutory declaration complaining about the military authorities having visited the residence of an Italian, Mr. Picone, of 66 Bridge-road, Richmond. If so, will he cause an investigation to be made into the accuracy or otherwise of the charges made in the letter and statutory declaration ?
– I do not remember having received any such communication.
– On Friday last the honorable member for Ballarat (Mr. McGrath) asked a question relating to the transfer of men in the Australian Infantry to the Royal Flying Corps. The matter has been referred to the Minister for Defence, and I am informed that -
In view of the increasing shortage of reinforcements for infantry battalions at the Front, which now necessitates the breaking up of some of the existing battalions to reinforce others, it is not possible to approve of any proposal to still further weaken the infantry units. Should the position improve, however, we shall endeavour to give effect to the suggestion later.
– In reply to a question by the honorable member for Melbourne (Dr. Maloney) on Friday last, with reference to the allowance to soldiers’ dependants, I now inform him that -
The Australian rates have recently been increased from1s. 5d. to 2s. per diem for a wife, and from 4½d. to 6d. per diem for each child, to meet the increased cost of living, and it is not considered that a further increase in the rate is justified at the present time.
Penalties and Fines
– On Wednesday last the honorable member for Lilley (Mr. Mackay) asked a question with reference to penalties and fines on members of the Australian Imperial Force who may subsequently be killed. The answer is as follows : - a,
In the event of the death of a member _ of the Australian Imperial Force on active service all fines and forfeitures incurred by members of the Australian Imperial Force on account of venereal disease are remitted, but fines or forfeitures other than those for venereal disease are not remitted.
– I should like to ask the Minister for Home and Territories -
– I have had the question of afforestation under consideration, but it is not quite as simple as some nonexperts think. Like every politician, I approached the subject with absolute confidence, which dissolved as soon as the facts came into my mind. I sought the advice of three experts, two from Victoria, and one from South Australia, and I have been endeavouring, with their aid, to draw up some scheme by which I could meet the desire of the Minister for Repatriation to employ returned soldiers on the work of afforestation. I am not hopeful that a very great number can be so employed. For instance, to employ forty men, as I propose at present, if a scheme of afforestation is adopted by Cabinet, would require the expenditure of about £10,000 to £12,000 per annum, and for every additional twenty men something like £4,000 a year would have to be expended. The subject is a difficult one, but I hope to submit some definite scheme to the Cabinet within a week, and get it adopted.
– Wo shall give you an adjournment of the House tomorrow to provide an opportunity for a fuller explanation.
– With reference to an inquiry made on Friday last by ‘the honorable member for Batman (Mr. Brennan) in regard to Public Service examinations, I should now like to say that the matter received immediate attention, and is at present the subject of investigation. Inquiries are not yet complete, but a reply will be given to the honorable member as soon as I am in a position to do so.
– On Friday last the honorable member for Batman asked a question relating to separation allowances. I am now in a position to supply the following information: -
A member of the Australian Imperial Force who is married is required to allot in the case of wife alone 2-5ths, and in the case of wife and children 3-5ths, of his pay. If the member fails to make an allotment the Minister may authorize the deduction from his pay of such reasonable sum as he may think fit for the support of the_ wife and children.
If the wife is receiving an amount equal to the allotment prescribed above she is entitled to separation allowance, provided that the pay of the member is less than 10s. per diem.
In all cases of the nature referred to in the above extract the claim of the wife is investigated, and, if the circumstances warrant it, the necessary deduction is made from the pay of the member concerned.
The only case where separation allowance is not payable is where a_ legal or mutual deed or agreement of separation exists between the soldier and his wife.
– In connexion with the answer given on Friday afternoon by the Minister representing the Minister for Defence—-
– It is the practice of the House not to allow questions to be asked arising out of Ministers’ answers to previous questions.
– As a serious allegation has been made by the Minister for Defence (Senator Pearce) in assuming in connexion with a speech made by me in this House, that the Chicago Tribune is a pro-German publication, I ask the Acting Prime’1 Minister, in the absence of the Minister representing the Minister for Defence, if he will ask his colleague to name the article and the date of the issue of the Chicago Tribune to which he referred,- so that the matter may be cleared up.
– I have not heard, nor have I heard any allusion to, the statement of my colleague, or the reflection upon the important journal named, a journal which from many points of view is, perhaps, the most important in the United States of America. I shall be glad, because this reflects both on the knowledge of my colleague and on the reputation of the honorable member, if he will give notice of the question, so that I may have an opportunity to ascertain the exact facts.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
I may add, for the information of the honorable member, that, it having been ascertained by the Commonwealth Government that the Canadian Government were issuing permits for the shipment of molybdenite and tungsten ores to approved consignees in the United States of America and France, representations were made to the British Government that this action was causing extreme dissatisfaction to Australian producers, and that it was not consistent with the request to the Commonwealth Government that export from Australia to foreign countries be not permitted. It was added that, unless the British Government brought about uniformity throughout the Empire, it seemed impossible for the Commonwealth Government to prohibit the export of these minerals to other countries. No reply has yet been received.
asked the Minister representing the Minister for Defence, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Minister representing the Minister for the Navy, upon notice -
– The answers to the honorable member’s questions are as follow: -
At present, all vessels leaving Australia are taking stores for the round voyage, as far as the capacity of storerooms will permit.
asked the Acting Prime Minister, upon notice -
Mr.WATT.- The answers to the honorable member’s questions are as follow: -
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow: - 1 and 2. As a result of the inability of the British Government to. purchase the 1918 rabbit pack, the Imperial authorities were asked to submit an offer to the Government of the United States of America. When replying, on the 19th April, to a communication on the latter point, the Secretary of State added that he understood that the Board of Trade was arranging for the purchase of 600,000 crates of hook-skinned rabbits of this year’s pack, and had telegraphed direct to the Meat Control Board, Sydney. The Commonwealth Government, on the 27th April, despatched a telegram pointing out that contract for last year’s pack was made with Commonwealth Govern ment, and that offer of this year’s pack was submitted by Commonwealth Government, and that the arrangements referred to in his telegram were, therefore, not understood. It was further stated that it was very desirable, in view of previous arrangements and organization, that the Commonwealth Government should deal with the matter, more especially as the contract with one State would be sectional in character, and cause much dissatisfaction in others. If the purchase referred to . had not been completed, it was strongly urged that it be held in abeyance till the receipt of further representations from this Government. No further communication from the British Government has yet come to hand.
Message recommending appropriation reported.
The following papers were presented : -
Arbitration (Public Service) Act- Award of the Commonwealth Court of Conciliation and Arbitration, with plaints submitted by the Australian Commonwealth Post and Telegraph Officers’ Association-
Further variation (dated 28th March, 1918), and other documents, in connexion with application to vary, made by the Public Service Commissioner.
Further variation (dated 28th March, 1918), and other documents, in connexion with application to vary, made by the Association.
Commerce (Trade Descriptions) Act - Regulation Amended - Statutory Rules 1918, No. 106.
Public Service Act - Promotions of - A. W. E. Fewster, B. K. McDonald, C. R. Burdeu, Department of the Treasury.
Railways Act-Bylaw No. 4.
In Committee (Consideration resumed from 3rd May, vide page 4428) :
After section fifty of the principal Act the following sections are inserted: - “50a. - (1) In any case where any taxpayer employed by or receiving a pension from any person, local authority, corporation, board, commission, or body has in any year failed to pay the income tax payable by him within sixty days after he has been required to pay the same pursuant to the provisions of this Act, the Commissioner may declare such person, local authority, corporation, board, commission, or body to be the agent of such taxpayer so far as respects the income by way of earnings, salary, wages, allowances, pension, or stipend paid or allowed by him or it to the taxpayer. “(2) The Commissioner may give notice to such agent setting forth the fact that the taxpayer has failed to pay the tax payable by him, and requiring the agent to pay the same on behalf of the taxpayer. “ (3) The agent shall thereupon deduct and retain from time to time out of the earnings, salary, wages, allowances, pension, or stipend respectively payable by him to the taxpayer so much as is sufficient to pay the income tax, and shall pay the same in pursuance of this Act; and for any default in so doing the agent shall be liable, in addition to the tax, to a penalty not exceeding Five pounds. “(4) For the purposes of this section “ tax “ includes “ additional tax “ required to be paid in accordance with this Act. “ 50b. Where the Commissioner is of opinion that a person in receipt of income is liable to pay tax and that it is difficult to ascertain the whereabouts of that person or to collect the tax from him, the Commissioner, may require any person making payments to that person -
to deduct from any payment which is or will become due to that person such an amount as will be sufficient to pay the income tax which the Commissioner may assess to be paid by that person; and
to pay the amount to the Commissioner forthwith.”
Upon which Mr. Charlton had moved -
That sub-clause 3 be omitted from the proposed new clause 50a.
– I do not know whether the Acting Prime Minister has considered the amendment I moved last week. The provision which I wish to delete requires an employer to deduct from the wages of any individual in his employment any tax that may be owing by that individual.
– No; only when a demand has been made by the Income Tax Commissioner.
– It requires the employer to deduct any tax that may be owing by a defaulting taxpayer in his employment. There is a departure from the procedure hitherto followed, and gives the Commissioner too much power. I am afraid, too, that it will be found objectionable by both employers and employees. By fixing the exemption at £156, we have brought within the income tax law very manypersons who hitherto have not had to pay income tax, and who are unaccustomed to the filling inof returns. Furthermore, many persons who earn more than £156 a year are not taxable because of the deductions allowed in respect of children under the age of sixteen. It will happen in many cases that such a man, knowing himself not to be taxable, will not furnish a return ; but in his employer’s statement will be a list of employees, with the amount of their earnings, from which the Commissioner may gather the information that this man’s earnings are £170 a year. No return having been sent in by the employee, the Commissioner will have no knowledge of any deductions, and he will notify the employer that the employee is in default, and require the employer to collect the tax. This provision will create a good deal of dissatisfaction. Employers may ask those who come to them for work, “ Have you paid your income tax?” An applicant may say, “I do not know that I have to pay income taxation. At any rate, I have not sent in a return.” To that the employer’s answer may be, “Then you cannot get work here, because I am not going to have’ the bother of collecting the taxes of my employees.”
– Under the civil law, an ordinary defaulter is exposed to the danger of having his wages levied on.
– I do not object to the Commissioner employing the usual processes of law for the recovery of taxes.
– Before the Commissioner applies to the employer he will have assessed the employee, and given him an opportunity to state his position.
Mr.CHARLTON. - The employee would be assessed on the employer’s return of wages paid, the employee himself not having filled in a return.
– Even then the Commissioner will give the employee a chance to show that he has children.
– He may do so. Of course, if the person concerned does not reply to the notice sent to him he must be held responsible, to a large extent, for the consequences. . The fact remains, however, that most of these men have had no training in such matters. They do not understand them, and consequently will not furnish returns.
– Having regard to our education system they ought to understand them.
– I agree with the honorable member, but I venture to say that even in his electorate there are many who do not understand the requirements of the Income Tax Act. As a matter of fact, many who have had a university training are unable to understand the method of computing the amount of tax payable. In the New South Wales press this week a university professor points out that the system should be simplified. In these circumstances, therefore, it is idle for the honorable member to contend that persons who are practically illiterate should understand what is required of them under this law.
This provision, to my mind, is objectionable, and exception will be taken to it by both employers and employees. It would be better to allow def aulters to be dealt with in court by the ordinary process of law. Defaulters should be made to pay, but I object to the proposed new sub-clause, because of the confusion to which it will give rise. The Commissioner having received a list of men employed in a colliery or a factory, may see in it the names of men above the exemption rate, who he thinks have not furnished a return. He may then take proceedings against them under this provision, only to find out that the persons served, although of the same name as the actual defaulters, are not defaulters.
– But the person concerned is allowed three years in which to claim a refund.
– That will involve an appeal to the Commissioner, and the Taxation Department has so much work to do that a man is lucky if his appeal for a refund is dealt with within twelve months. There is not much satisfaction attaching to . the lodging of appeals. Where a man is entitled to pay income tax proceedings should be taken to recover the amount due through the proper judicial channel. I see no reason for any departure from the ordinary procedure in these oases.
– I hope to be able to persuade the honorable member for Hunter (Mr. Charlton) that his fears are groundless. I admit that this procedure is new, direct, and summary, but it is designed to cure what is one of the chief defects of income taxation in Australia, namely, the failure of the man near the margin, who should honestly pay, to make a return. The honorable member for Hunter suggests that if the clause becomes law, employers will furnish lists of their employees, and that theCommissioner, on seeing in any such list the names of certain men who are above the exemption minimum, will at once, or in due time, serve the employer with a demand to collect so much of summarily assessed income from such men. If that were so I would not ask for this clause, because it would be subject to all the disadvantages and disabilities which the honorable member apprehends. As a matter of fact, however, it is not the practice now, nor will it be the practice under this provision, to do anything of the kind.
– It might become a practice.
– If we deal with one fault at a time we shall secure, if not finality, at least simplicity of thought. The practice to-day is, when a list of employees is furnished,’ to locate the individual employee, and to oblige himto send in a return. That is a proper procedure. If the man refuses to furnish a return he can be dealt with under the ordinary process of the law. That, however, is cumbrous and expensive to both the tax-gathering Department and the person charged with making default. If this provision becomes law, the same practice will be followed up to the point I have mentioned; but, instead of assessing the man who primâ facie might be held to be assessable, since, according to the list, he receives over £156 a year, the Commissioner will serve him with a notice to furnish a return. No assessment will be issued, and no demand will be made through this new channel until that return is sent in, and the Commissioner is able, through his assessing officers, to determine whether or not the man is liable to pay income tax. If the honorable member will accept that statement provisionally, he will see at once that this clause, instead of being objectionable, will prove advantageous. If the honorable member desires it, I can, at a later stage, embody in the clause some provision requiring that, prior to the service of any such notice as is contemplated under it, the attention of the person concerned shall be drawn to the necessity for submitting a return. If, say, a person is earning £170 a year, he will be notified that he is by law obliged to send in a return, and must do so within fourteen or twenty-one days. That is the right kind of notice to give a man, and, as a matter of practice, it will be given. If anything more than my assurance that this practice will be followed is required, I shall see that the clause is amended later on.
– The clause could be amended so as to provide that the person concerned shall be notified.
– Notified prior to any demand being made on the employer or his agent. I do not mind a minimum time of thirty days being fixed with regard to the notification, so as to give these people a chance of complying with the law. Assuming that the position is as I have stated, there can be nothing inherently bad in the Commissioner adopting a direct and cheap method . of compelling those who try to make default to pay after due notice has been given them. After the demand has been made there can be no objection to the agent, who holds money for the person making default, being required to pay the amount of tax due. The agent wants to be indemnified before paying, and the Commissioner wants the power to make him pay. There ought to be no difference in the procedure where, instead of an agent, an employer is holding or owing money to the alleged defaulter. I see no difficulty in this provision. It was originally proposed by some of the taxation officers that it should be more drastic. As it is, I think the balance of responsibility as between employer and employee is well assigned, and that neither class can object. The employer will find no great burden imposed on him.
– But employers do object to such a requirement.
– There is a section of both classes who do and will object, but the decent, honest employer and employee can take no exception to a provision of this kind. No real abjection to this clause reached the Government from any responsible quarter until the Bill came before the House.
– Does not the Acting Prime Minister think that an employee wishing to make default in the payment of his income tax would get away before the Commissioner could serve the employer with notice?
– He might where it was a toss-up whether it would pay him better to leave his billet rather than pay the tax; but the average man would sooner pay the tax and retain his employment.
– There is a lot of casual labour.
– This provision will not cure the defect in respect of all casual labour. While it is partially aimed in that direction, it is also aimed at those in permanent employment who to-day make no return. The decent, honest men who come within the area of this taxation, and who cheerfully and promptly pay it, are interested in seeing that those who do not desire to pay are made to pay. It is the ordinary decent relationship between taxpayers that we seek to establish ; and provided the person concerned gets proper notice before any such demand as is contemplated under this clause is made by the Commissioner upon his employer or agent, I see nothing in it but advantage to all parties involved.
.- I have already taken exception to this clause, and the objections I have raised have not been met by that part of the Acting Prime Minister’s speech which I was privileged to hear. The objections are, from the point of view of the employer, that he is made a debt collector, which, in itself, is a grave objection, and from the point of view of the employee that the clause subjects him to invidious treatment.
– The defaulting employee.
– For the purpose of my argument, it matters not whether they are defaulting or otherwise. This clause will deliberately exclude employees from a right which every other section of the community enjoys. Such invidious treatment is justifiable from no point of view except that of expediency. It is said by the Acting Prime Minister that persons considered to be taxable will receive notice before the fund in the hands of their employers is garnisheed. That, however, is not sufficient. In the first place, the notice sent out may not reach the men concerned. Assuming that it does, they will still have no right, unlike all other sections of the community, to answer a claim for. indebtedness in a Court of law. I cannot be expected to countenance such a procedure. The Commissioner looks at the matter solely from the point of view of expediency. He says this is the cheapest and most expeditious way of compelling these people to pay. It may be, but mere expediency is not the chief consideration in connexion with the administration or enactment of legislation. Our main object should be to make our legislation equitable in its application. The wageearner should not .receive invidiously harsh treatment as against the employer.
– Does the honorable member think the wage-earner would be likely to take his case into Court?
– That interjection is very like one made last week by the right honorable member for Swan (Lord Forrest), who said that sometimes the amount of tax is so small that it is not worth suing for. In other words, he suggested that where the amount of tax to be collected is very small, it would be better for the Commissioner to take it instead of suing for it.
– Are they likely to take their cases into Court?
– Some may desire to do so, many may not; but because it means invidious treatment of a certain section of the community, the clause is utterly objectionable. Besides, it will be a nuisance to the employer if he is made a debt collector, and is put under the obligation of determining whether an employee has paid his income tax or not, or whether, in the last resort, he is liable to pay it or not. For these reasons I shall vote against the vicious form in which the clause now stands.
.- Instead of being a hardship to employees the clause will prove to be of advantage to them. It will avoid the necessity of suing them in the Court. I have received letters from farmers in my electorate complaining about being proceeded against in Courts 120 miles from their farms, because they have failed to send in their income tax returns in proper time. Rather than lose three or four days through being prosecuted in a distant Court they would prefer to have some penalty imposed on them if the notification of the fine could be sent to them. At any rate, they would prefer to have the opportunity of taking one course or the other. The Peace Preservation Act of Queensland made provision by which a fine imposed on any member of a union for striking without the sanction of the union, and being fined, the fine should be ‘collected ‘by his employer in any portion of the State wherever he may be,1 and I have not heard that any employer has objected to collecting fines imposed on employees in this way. The employee will be better pleased by being able to ascertain the amount he legitimately owes in this way than by being prosecuted in Court, and having; costs added to the amount of his just contribution to the revenue of the Commonwealth. According- to the honorable member for Hunter (Mr. Charlton), many employees cannot fill in an ordinary in-‘ come tax return, and even men of high education find difficulty in doing so. Men who have various ramifications of business may find a difficulty in preparingtheir returns, but the form which has tobe filled in by an employee is so simple that it seems to be a reflection upon the ability of the men -whom we have educated under our educational system to say that they cannot fill in their income tax returns. In any case, most employers are only too pleased to assist any man in preparing his return. I hope that, in the interests of the employees, the Minister will retain the clause with the slight amendment which he has promised to* make.
.- The clause will do more harm than good. The educational advantage of an occasional prosecution is very great. The taxpayer should be taught his civic duties. Every grown man should know his duty to the State. I do not believe in coddling the general public as the Treasurer proposes to do> in the new sub-clause, which he is willing to insert; because a very large number of people in the Commonwealth will say, “ We are not called upon to furnish any income tax returns until later on, when we receive due notice.” At present every taxpayer is advised by an advertisement in the press that he must send in his income tax return. We are all supposed to be acquainted with the law, and one of those things which the general public should understand quickly, and with advantage to themselves and to the State, is the principle of direct taxation. When the majority of the people understand that it is their duty to contribute towards the cost of the government of the country, and that the most economical method of doing so is the adoption of a system of direct taxation, ib will be better for all. This clause will allow a very large number of people to say, “ We may disregard the advertisements in the newspapers and wait until we get notice that it is our duty to send in a return.” If one man is entitled to wait until he receives notice in writing that he should send in a return, every man will be legally entitled to receive a similar notice from the Department. Therefore, the time and money which the Taxation Office and the Treasurer expectto save by this proposal will not materialize. On the other hand, there will be loss of time, and, I think, loss of money. Furthermore, I do not think that employers should be called upon to take up the position of tax-gatherers or policemen. The principle is wrong. I nope that the honorable member for Hunter will press his amendment to a division.
.- One would think, from listening to the arguments put forward by the supporters of the amendment, that all the employees of Australia were defaulters and ignorant. In the matter of intelligence, the average employee stands just as high as does any honorable member in this Chamber, and if, after he receives notice, he actually makes default, he should be penalized for not paying his proper contribution to the upkeep of the country. At election times we hear a lot of talk ~ about taxation; but many of those who are the loudest in calling for the imposition of taxation are among the first to make default The honorable member for Hunter (Mr. Charlton) argues that because many people will not be able, through ignorance, to make up their forms, they should not be called upon to pay this taxation. I admit that many farmers are unable to . fill in their taxation forms - many of them pay their solicitors two guineas or three guineas to fill in the form, although the actual . taxation they may have to pay may not exceed £2 or £3 - and the forms they are called upon to fill in may be regarded as somewhat difficult. On the other hand, the form which employees are asked to fill in is “simply a wages sheet. This is certainly new taxation to most of the employees, as it is the first occasion on which men in the Commonwealth receiving £156 per year have been asked to pay income tax; but after this year these taxpayers will realize their responsibilities, and take care to furnish their returns.
– But why should there be invidious treatment?
– If I fail to pay my tax, I have to pay a fine of 10 per cent., or run the risk of confiscation. The treatment of the employee is mild in comparison with the treatment which may be meted out to the employer who fails to meet his obligation to the Treasury. The honorable member for Batman (Mr. Brennan) claims that the employee should be entitled to appeal in a Court of law; but will a man who is called upon to pay 4s. or 5s. in income tax be willing to pay a lawyer a guinea or two guineas to appear in Court on his behalf? 1 give the employees credit for having more sense. However, if the honorable member desires to insert a provision by which the employee may have the right of appeal, I shall support him, but I do not think we should have half-a-dozen appeals in the course of twelve months. This is simply a straw bogy raised by the honorable member for his own purpose.
The honorable member for Barrier (Mr. Considine) made a remark about hanging a man before trial,” thereby inferring that this is a very drastic measure aimed principally at the employees. We ought to remember, however, that the treatment of employees, as proposed by the Treasurer, is mild in comparison with what we find in the Old Country. In the Fortnightly Review of February of this year, there is an interesting point bearing upon this question. I have lately been interesting myself in literature concerning the conscription of wealth, and in the course of my reading I came across this article. I wish it to be understood that I am not supporting the principle there advocated, and I read this quotation merely to show the difference between the methods adopted” by the Imperial Government and the - comparatively mild measures which the Treasurer proposes in Australia. A paragraph in the article in’ the Fort.nightly Review is as follows: -
Hitherto the wage-earner, although his income on the average has been nearly doubled, has managed to escape all the financial consequences of the war. He has met the rise in prices by demanding and securing successive rises in wages, and although Mr. MeKenna at length applied the income tax to wage-earners, the system of quarterly instead of weekly collection has led to great loss of revenue. The
Daily Telegraph of 21st December reported the case of a workman, lately employed at Butterfly Ironworks, whose wages during the year were stated to have been £998; he was ordered at Mansfield to pay £45 as income” tax on his earnings during the quarter ending 5th April, 1917.
It will be seen that the change from a weekly to a quarterly payment has led to great loss of revenue. If a system of that sort were proposed for Australia, I do not think it would receive the support of any member of this House; and every one will admit that the Treasurer in this measure is proceeding on considerate lines.
.- I am not so much afraid of the operation of the clause as explained by the Minister and the Commissioner, as I am of the clause as it stands in the Bill. It is quite possible that we might have another Minister and another Commissioner, who would administer the Act more harshly than is now suggested. The Acting Prime Minister (Mr. Watt), in his second-reading speech, told us that the Commissioner would be empowered to call on any employer of a taxpayer who is in arrears to deduct the amount due from any salary, wage, or other payment due to the taxpayer by the employer. When the Acting Prime Minister made that announcement, the honorable member for East Sydney (Mr. West) interjected that theproposal was “pretty strong,” and the Acting Prime Minister replied that if it was strong, it was necessary. The Acting Prime Minister later on said that the clause simply requires the employer, on receipt of a demand from the Commissioner, to take certain action with regard to future payments. The fear is that this provision may be used by employers to deduct money to which they are not entitled. The Commissioner has explained to me how the provision will work, but I am anxious that it should not be passed as it stands, at any rate not without some such proviso as the Acting Prime Minister mentioned to the House. The honorable gentleman said that he was willing to provide for a notice of, say, thirty days to a taxpayer to furnish a return, or to meet his liability, and that the agent should not deduct any amount unless such notice had been received. Such a proviso would, at any rate, convey to . the present, or any future Commissioner, what was the intention of the House. When we are passing legislation, we ought to make it as perfect as possible, and not leave too much to discretion, or to be rectified by future amendment. The complaint to-day regarding the War Precautions Act Regulations is as to their administration by different people. We may safely say that at least 40 per cent. of the wage-earning classes in Australia are not employed by the same employer for twelve months, particularly in the country ; and much difficulty would be experienced by the Commissioner in dealing, for instance, with harvest hands.
– The Department would not be able to, collect this taxation from casual employees.
– Quite so; and it appears to me that the clause could only operate in the case of certain classes of workers, every one of whom, so far as I know, is paying taxes to-day.
– The honorable member’s remarks might lead to a registration of addresses.
– That does not appeal to me as practicable. Quite recently, I saw an annual return of the Electoral Department for last year, and it disclosed 60 per cent. of alterations in one electorate alone.
– That was not your electorate, anyhow.
– It did happen to be my electorate, though, of course, it is possible many of these people had merely moved across the street, or to some other street in the same subdivision. It would be most difficult to have an effective registration of addresses such as is suggested. In the case of numbers of men, who are just as good citizens as any in the community, it would be difficult, if not impossible, to follow them by means of the departmental administration ; and, apparently, the only workers who could be effectively reached would be those permanently employed, or fairly permanently employed, in engineering shops, warehouses, and so forth. I agree that it is the duty of the Treasurer, as it is the duty of the Minister for Trade and Customs, to gather in every shilling that is due to the revenue, and we are here to assist to that end; but we are not here’ to pass provisions which may prove worse than the disease they are intended to cure. If the Treasurer does persist with this clause, I hope some proviso such as I have indicated will be added.
– I am not much, moved by the appeal of the honorable member for Batman (Mr. Brennan) on the sacred rights of the worker to be sued. The average working man would, in my opinion, much rather be “pulled up” in the way proposed in the Bill, and have to pay only what is due, than be summoned to a Court, and have to pay what is due, plus lawyers’ fees and costs- the fate of many who innocently fall within the ambit of the law. It seems to me that considerable hardship might be imposed on a working man who was called on to pay the whole of the income tax due out of one week’s wages. There is no indication in the clause that this could not be done, the idea evidently being that notice shall be served on the employer, and that he thereupon shall take from the current wages of the employee every penny due.
– The employer has to pay the money in one sum, but he need not take it from the employee in one lump.
– We may take it that whatever the Department asks the employer to do he will make the employee do; and I wish to have an assurance that some discretion will be exercised, possibly in the way of striking a percentage as between the wages and the amount to be deducted for income tax, in any one week.
– The Acting Prime Minister (Mr. Watt) pointed out that no serious objection had been offered by any important body of employers to the operation of this clause. I suggest that there has scarcely been time for objections to be manifested, and that, as soon as the body of employers throughout Australia get sufficiently acquainted with the proposals in the Bill, there will be a very strong outcry against the measure. Employers are saddled with a responsibility that is being evaded by the Government. In the Commonwealth Service we refuse to recognise the principle of the garnishee, and insist that those who enter into financial relations with our public servants must take the ordinary risks of business; yet it is now proposed to transfer to the employers of this country a direct responsibility in applying what practically amounts to a garnishee.
– That is just like a Government !
– It is an unfair devolution of responsibility. It is throw ing on employers a responsibility in regard to income tax that we ourselves are not prepared to accept in regard to ordinary affairs. We talk a great deal about all men being equal before the law, but this Bill proposes to differentiate between rich and poor. ‘So far as I can see, there is no provision that if an employer defaults some authority may interfere in his business, and levy upon his income or assets in order to satisfy the claims of the taxation Commissioner.
– His assets are a guarantee that he will pay.
– While the employer is to be subject to the ordinary processes of the law for the recovery of income tax, the employee will have two obstacles to overcome. In the first place, if he defaults he will be allowed 60 days during which the ordinary processes of law may be put into operation against him, and if the Government fail to catch him by that means, they may call upon his employer to deduct, from time to time, such portion of his earnings as will meet his income tax liability. There is no provision that the employer shall deduct only a certain percentage of a man’s earnings. He may deduct the whole amount of the liability from the earnings of one week or one month.
– It is possible to make a regulation which will protect the employee.
– The passage of a regulation to protect the employee against a levy upon the whole of his earnings for one week or month would be a poor way of minimizing the injustice of this provision.
– Surely the Department would guarantee that no more than the taxation payable would be deducted by the employer.
– I am not suggesting that the employer would deduct more than the amount of the tax, but I do suggest that the employer may make such deductions as will not only inconvenience the employee, but be a serious tax upon him, in addition to the ordinary tax. Obviously, if the employer withholds the whole of a man’s earnings for one week or month, in order to . satisfy the claims of the Income Tax Commissioner, the employee will be seriously inconvenienced, and be forced to increase his liabilities to his tradesmen.
– If the employee is to be allowed to pay by instalments all taxpayers should have. the same privilege.
– The Act provides that payments may be made by instalments, and I submit that the employee should be treated in the same way. “Usually the Government accepts the responsibility of collecting any taxation imposed by Parliament, but this Bill proposes to devolve the responsibility upon an intermediate authority. Already the larger employers are complaining of the continual harassment resulting from the making up of various taxation returns, and some are obliged to employ at least one clerk continuously for that purpose. The provision we are now considering will compel every employer to keep a separate account as between himself and each employee in regard to income tax.
– That” is a serious reflection upon the working classes.
– The very fact that the employer will be personally liable for the payment of taxation in the event of default’ by the employee will compel him to watch every operation of each employee after the income tax assessment is delivered, and in order to protect himself against a possible claim by the Government, it is quite possible that he will deduct, during the sixty days of grace, a certain amount from the wages of the employee.
– He cannot do that.
– He can do that or throw upon the employee the responsibility of leaving his job. If this provision becomes law, he may honorably retain sufficient of a man’s wages to protect himself against any possible claim by the Government after the sixty days of grace. Suppose that an employee, after receiving his assessment, changes his employment.
-. - The employer is not concerned until a notice from the Income Tax Commissioner reaches him.
– Either the previous employer will be liable for the taxes due by the employee, and have mo hope of collecting the money, or the new employer will be saddled with a liability contracted before the man came into his service.
– The employer will be liable only for the moneys in his possession and due to the employee.
– The only protection the employer will have will be that, after he ha3 paid the amount, he may deduct from the employee’s wages, from time to time, to. recoup himself.
– He may deduct, from time to time, as the man’s wages become due.
– :That means that if, during the sixty days’ grace, the employee changes his employment, the new employer may be suddenly called upon to make a financial arrangement with the employee for ‘the deduction from his earnings of a certain amount to pay the income tax. This will prove to be a very serious additional burden upon men who employ 500 or 600 hands. Many will find it necessary to employ a special clerk to keep a separate set of returns in regard to defaulting employees, and there will be an outcry for the repeal of this provision. A number of employees who are liable to pay income tax earn an amount so little above the minimum that a number evade payment for no other reason than that they do not consider themselves liable. On the whole, the men in small wage employments who evade the tax cost the country much less than do the persons of large income who evade payment of the full dues. Every man who makes up an income tax return tries to do the best for himself and the worst for the Government. I have never known a man who did not try to reduce his income return to the lowest passible amount; and the ability of some financial gentlemen to include in’ their returns deductions that the ordinary man would never think of claiming is remarkable. I do not blame them, if the Commissioner makes the net wide enough for them to escape. An employee whose income is small is liable for an infinitesimally small amount of taxation, and his ability to evade the tax is greatly reduced because his deductions are easily discernible, and his general items of expenditure are readily traced. The extra amount which the Government will be able to recover by this difficult and circumlocutory method will not compensate for the immense, disturbance and inconvenience that will be caused to both employer and employee.
– There is said to be a very big leakage.
– The principle is bad. The Government should accept, in the case of the employee, the same responsibility for collecting the tax as they accept in respect of the employer. The law should not discriminate between different classes of the community.
.- Although I have listened carefully to the arguments of the critics of the provision that it is proposed to delete, I have not heard any good reason why we should not assist our officials in the collection of taxation by adopting the method which they recommend for compelling payment of taxes by persons who would otherwise escape. It has been frequently said, both by income-tax officials and by members of Parliament, that many persons in the community who should contribute to the revenue by way of income tax, escape their just liabilities, and we should therefore give a trial to this machinery that is recommended for safeguarding the revenue. I do not think that the provision will cause the least hardship. After sixty days, the Commissioner may serve on an employer a notice requiring him to deduct the amount of the income tax due by an employee. No deduction will be made from the employee’s wages until such notice has been received from the Commissioner. It has been contended that as all are equal before the law, the procedure for the recovery of income tax should be the same in all cases; but it must be remembered “that the amounts to be recovered from employees will often be very small, not more than a few shillings, and to set in motion the cumbrous machinery of the law to obtain them would cost more than the tax. I shall support the provision unless some one can suggest a better means of preventing evasion of payment. So far, no one has been able to do this. Of course, my support is subject to the reservation that if in practice the provision is found to cause hardship, I shall be one of the first to ask for its repeal.
.- The adoption of the provision under discussion would establish a vicious principle in our legislation. We have always prided ourselves on the fact that all citizens are equal in the eyes of the law. I can understand honorable members opposite laughing at the idea of the workers being equal with the tony class.
– Is not that an unfair statement?
– It is a fair interpretation of the provision under discussion, which imposes on the workers insulting and humiliating conditions, and, in effect, says to. the workers of this country, “ You are dishonest. We cannot trust you to pay your just debts to the Government, and, therefore, we are going to require your employer to deduct from your wages all amounts that may be due.”
– The provision applies only to defaulters.
– It empowers the Commissioner to call on any employer to deduct money from the wages of an employee.
– After sixty days’ notice and default.
– There is already procedure for the recovery of money due to the Crown.
– Does the honorable member hold a brief for the lawyers?
-No; I hold a brief for the workers.
– That is a subject about which honorable members opposite know nothing.
– Exactly. The provision establishes a cumbersome piece of machinery which will achieve no useful end. Its hollowness is seen directly you examine it. There are two classes of employees, permanent and casual. It is from the wages of the former alone that employers will be able to make deductions. But so far as those persons are concerned, the provision is unnecessary, because, as they are in permanent positions, they can be easily prosecuted for any failure to obey the law. As for the casual workers, the provision can do nothing to make them pay. A casual worker on a wharf or in a dockyard may be employed to-day in one place, to-morrow for a few hours somewhere else, and a little later with a third firm. How could employers deal with such men?
– They will afford a job for the Commonwealth police.
– If the casual employees happen to be dishonest, it will be impossible to rope them in by means of the provision under discussion.
– Then the only effect of the clause will be to give the employers a lot of useless trouble.
– And, as the honorable member for Barrier has observed, it will furnish occupation for that incubus, the Federal police. I have received from Mr. J. P. Franki, the managing director of Mort’s Dock and Engineering Company, Sydney, one of the largest dockyard employers in Australia, a letter setting out his opinion of the proposed new subsection. He says -
In the report of the Acting Prime Minister’s speech upon the second reading of the Bill, it is stated that “ an employer, to safeguard himself, would have to keep back part of the money coming to his employees,” which seems to impose the greater responsibility on the employer of deducting, from all salaries and wages ‘paid in anticipation of default, and involving a refund in most cases.
May I ask for your kind interest with a view to avoiding any misapprehension as regards the intention of the Bill, and preventing an injustice to the larger proportion of employees, and a hardship upon employers if deductions are to be made from all wages and salaries in anticipation of default, and involving, in most cases, a refund.
– That is only your friend Mr. Franki’s view. The Bill says, “ on’ default,” not “in anticipation of default.’’
– Mr. Franki is a constituent, not a friend. I understand the levity of the honorable member for Wentworth when a subject involving the interests of the workers is being discussed; it is characteristic of him. Mr. Franki points to the disabilities which it is proposed to impose on the employers, and I have shown how the provision would affect the employees, and how utterly futile it is, having in mind the object ‘ in view. It cannot be put into operation against casual workers, who, it is insinuated, will evade responsibility for taxes; and it will unnecessarily harass employers. Before agreeing to this clause we should have from the Treasurer a definite statement that many people are making default in the payment of income tax, and that a provision of this kind is absolutely necessary in order that they may be reached. The Treasurer should say definitely that it is estimated that the
Government is losing so much per annum for want of a provision of this kind. As it is, we are simply told that a section of the community is to be subjected to invidious treatment. We ought not to agree to anything of the kind, nor should we assist the Government iri its ‘effort to extend the pernicious principle of garnishee orders. The garnishee system is most repugnant. The Government is proposing an extension of it, but it will still apply only to employees. Ti we arc to have such a provision, let it be applied to the wool kings, to the members of the Stock Exchange, and others. Let us provide that those who do business with members of the Stock Exchange may be called upon by the. Commissioner to deduct from moneys payable by them to any member of a Stock Exchange an amount equal to the income taxation payable by that person. The principle which the Government are endeavouring here to impose on the workers will re-act upon them. We should legislate from the point of view that all men must be equal in the sight of the law. There should be no differential treatment.
– Does the honorable member suggest that we should tax everyone?
– All who ought to pay taxation, and especially the profiteers, should be taxed. The Government, instead .of proposing pinpricks of this kind, should be taxing the men who create corners in foodstuffs.
– Those are the men we want to get at:
– We should get a little bit more from those who get hold of the wool of the people. In that way more money would be secured for the Treasury, than will be obtained by this tomfoolery in regard to employees receiving a couple of pounds a week. Here we are setting up cumbrous machinery to attempt to get something out of men who are not able to pay anything.
.- Although I yield to no man in my desire to give every assistance to the Commissioner of Taxation in collecting taxes that are justly payable, yet I foresee a fatal objection to this clause. It undoubtedly takes from one section of the community a legal right, which is still left to others. It also outrages a prim- ary principle of justice since it will compel employers, under severe penalties, to act as honorary tax collectors. In its administration I feel confident it will give rise to a good deal of conflict as between employer and employee. This will be especially the case in respect of farmers and others who em-‘ ploy, for a few months in the year, men of whom, in many cases, they know nothing. In sacrificing principle, in the hope that this expedient will enable the Commissioner to reach a lot of men who shirk their obligations, I think we shall do very great injury. If this clause is to be used for the more effective administration of the bachelor tax, it will lead to a veritable Donnybrook Fair, so far as the men in the bush are concerned. But even assuming that it is intended to have a wider effect than that of providing machinery for the collection of the bachelor tax - which cannot be less than £5, and is in itself a very considerable sum for many to pay - what will be the position ? Take, for instance, the case of partially disabled or medically unfit or other single men who have not offered for service; but who, during the winter months trap rabbits, and sell them to various buyers. Such a man might deliver a cart load to one buyer to-day, and to another buyer to-morrow. Are all these buyers to be served with notice? Then, again, such a man, during the harvesting season, might be employed by me to drive a harvester for 10s. or 12s. per day. In view of this provision that makes me liable, I should not be slow in serving him with notice that I was required to deduct from his wages an amount equal to the tax payable by him. In that event, he would probably leave me at a moment’s notice - at a time when it might be impossible to’” replace him - and complications might result. If he protested that he was not the man in respect of whom I had been served with a notice from the Commissioner, how should I identify him* Should I be expected to come into conflict with him at a time when he could do me almost irremediable injury? The law, as it stands, provides that every employer shall furnish in his return the names of his employees, and all that is required is a little keener organization to get at those who are shirking their responsibilities. This disagree-, able duty should not be placed upon the shoulders of employers. It would do more to feed the flame of discord as between employer and employee than anything of which I know. Unless the Committee desires to impose unnecessary hardship upon employers, and especially farmers and others in the country, who do not keep a staff of accountants, it will reject this provision. It can serve no useful purpose. It cannot be denied that it is an outrage of principle, and is merely an expedient by which the Government hope to reach a certain number of .dishonest or thoughtless people who neglect to pay taxation for ‘which they are liable. It would be well in the interests of harmony to carry the amendment.
.- Some honorable members seem to have debated this question from the point of view of whether or not certain persons receiving small incomes should be taxed. The position is, however, that the existing law prescribes that persons in receipt of not less than a certain amount per annum shall pay income tax, and that being so, it is the duty of every honorable member to assist the Government in collecting that tax. The Government, in its wisdom, has determined that some additional means are necessary to enable the law to be carried into effect. So far as property- holders are concerned, the Crown has its remedy where default is made. It can always levy upon the property, and so recover the taxation payable. I am inclined to think that a large sum is lost to the Treasury by the failure of certain persons to furnish returns as they should do under, the law, and I certainly do not agree with those who say that employers as a class would object to be made the collectors of this tax. There is considerable resentment on the part of employers, who think that the law, as applied to smaller taxpayers, is not fully carried out; and, generally speaking, employers would be pleased to assist the Crown in its effort to obtain what, under the Act, it is entitled to collect.
The honorable member for Dalley (Mr. Mahony) has drawn a doleful picture of the hardship which this provision will impose on certain wage earners. Parliament has already determined that it is no hardship for those men to be taxed, and that being so, we should assist the Government in its laudable effort to collect what Parliament has said shall be collected. That, it seems to me, should be our guiding principle. If we think the exemption is too low, let us amend the original Act by raising the exemption. But as long as that is the law, let us assist the Government in carrying it out.
– Impartially, as usual ?.
– Yes, impartially. Make the wool kings pay whatever they have to pay, and let the workers pay whatever they have to pay. Let the same principle apply to all. If the law is bad, let us amend the law; but if the Government find that they cannot carry out the law as it stands, because certain methods have been adopted by some sections of the community, and if they ask for additional powers to enable them to carry it out, let us give those powers to them.
.- I was surprised to notice a paragraph in the press stating that the Employers Federation had carried a resolution objecting to the obligation which it is proposed to place on employers generally. At times like the present, when the Commissioner of Taxation is asking the employers for assistance in order to conserve the revenue of the country, and in order to help the Government to carry on the administration of affairs, such a resolution is unworthy, and out of season. It is also stupid, because the employers may be called upon to pay additional taxation in order to make up for any loss which may be sustained if they do not accede to the request of the Commissioner of Taxation.It is the duty of every honorable member to conserve the revenue and assist the Commissioner in his onerous duty of collecting it. We are only at the commencement of the imposition of taxation in the Commonwealth. All sections of the community will have to bear additional burdens if this Government, or future Governments, are to carry on the administration of affairs properly. Therefore, I hope no action will be taken to put any bar in the way of adopting a principle which will undoubtedly apply, not only to this taxation, but also to future taxation in which it may be involved. It would have been wiser had the Treasurer laid before honorable members an estimate of the revenue which is now being lost.
-The honorable member has already spoken twice, but only once on the amendment. He must now confine his remarks to the amendment.
– I do not see how I can confine my remarks to any particular phase of the question of the income derived by any employee, which is the matter under discussion. The Government should have given us something in the nature of an estimate of the amount which would be involved, and a statement, which could easily have been obtained from Mr. Knibbs, .showing the number of persons engaged in permanent employment, casual employment, and nomadic employment. When the Leader of the Opposition (Mr. Tudor) was speaking, I interjected that this proposal would impose on the Commissioner’ of Taxation the necessity for establishing a register of employees’ addresses ; but the honorable member seemed to think that it was an impossible proposal.
– I think it is impossible, so far as at least 30 per cent, of the workers are concerned.
– Default will occur in nearly every branch of employment, but a register will be necessary in regard to men in permanent employment; and I would place on both employer and employee, in the case of permanent employment, an obligation to notify the Commissioner of Taxation of any change of address. I recognise some of the difficulties which have been pointed out by the honorable member for Werriwa (Mr. Lynch), and others in the case of men in nomadic and casual employment. There are men who change their residences and their names frequently.
– Those who change their names will not represent the hundredth part of 1 per cent.
– I admit that a proportion of the tax cannot be collected. In the case of shearers who have their residential addresses, say, in Victoria, and go to Queensland ot New South Wales, and work back throughout the year to Victoria, the Commissioner of Taxation will send a notice to their usual addresses, and it will be sent on to them; but many of the objections that . have been raised to this provision will be met by placing on the employer and the employee the obligation to notify any change of employ- ment. On the whole it is a paltry and pettifogging attitude on the part of hon- orable members to raise objections in respect of trivial cases and generalities, when, in the great majority of instances, we can substantially assist the Government in the matter of obtaining revenue for the purpose of maintaining our share in the war.
.- I am not too pleased with the clause as it stands, because it is open to a number of objections ; but it is better than having no such clause at all. The difficulties which the honorable member for Werriwa (Mr. Lynch) and others have voiced will not be so great as they have indicated. If a harvester hand consents to work for the honorable member for Werriwa for the full year, the tax he will be called upon to pay will be about 13s. 6d., and I ask any one would the honorable member, with his cordiality of temperament and generosity of heart, allow that valued servant to leave him merely because he has to pay that amount? The probability is that the honorable member will pay the 13s. 6d., and make some arrangement with his honest employee by which the latter will pay him back the amount at the rate of 6d. or ls. per week.
– Did I not suggest that this clause might be used as machinery for the collection of the bachelor tax?
– Off-hand, I would not like to say that it is not possible to do so. When we passed the bachelor tax, we made it .portion of the income tax. But what I have risen to say is that we ought to be able to short-circuit all this procedure by merely taxing each wage received. If a man is in regular employment, let the employer stamp his wages. If a man earns £4 per week on a permanent sort of job, he will pay a tax of about 3d. per week. Let the employer affix a 3d. stamp per week on his wages receipt. The employer will thus be responsible to the Government for the 3d. One objection raised to the method I suggest is that if it should be adopted the men would go to the Arbitration Court and passion the obligation to the employer. But that would not matter) so long as the employees realize that they are contributing towards the taxation of the country. The greatest difficulty in regard to taxation is that a big section of the community honestly be lieves that it i3 paying no taxation, and, as a result, feels that it is without responsibility.
– What would the honorable member propose to do in the case of a casual worker?
– Take the case of a wharf lumper who works for different employers, although his occupation is constant; that is to say, he does not work at any other occupation during the course of the year. He probably earns 15s. a day, including overtime, and for that 15s. he might have to pay a stamp duty of £d. I admit that my suggestion means the introduction of difficulties; but, at the same time, it would be better than the system proposed in. the clause, to which a great deal of objection has been raised. I do not like the clause, but, as I have already said, I like it better than having no system at all. Even if an arrangement has to be made, by means of which the employer, in order to have continuity in his employment, has to have a fixed arrangement with his employees, it is better than having ‘ nothing, because it will make the employee realize that he is contributing towards the upkeep of the country.
– Do not make any mistake on that score. The employee realizes that he is carrying the whole show at present.
– He thinks so when you appeal to him in one sense. In another sense, he is asked to believe he is paying nothing, and allowing the rich to pay. My belief is that taxation, like water, will find its own level, but the great difficulty is that the public does not believe it; and I wish everybody to realize that they have some direct responsibility for the financial solvency of the community as a whole. I do not pretend to like the clause, and I should like the Minister to devise some better method, say, that of stamped receipts. However, the matter is not worth all this bother, because the taxation of a £4 income, after all, amounts to only about 160d. in a year.
– The Leader of the Opposition (Mr. Tudor) has suggested that the clause provides machinery for collecting the bachelor tax.
It does not do anything of the sort; there are no other provisions for that purpose. This clause, like the rest of the Bill and the principal Act, applies only to persons with incomes of from £100 to £150 and. upwards, the former being that of a taxpayer without dependants. The honorable member for Wentworth (Mr. Kelly) very properly said that there might be some objection to this clause; but I may mention, without being able to cite figures, that there is a large leakage in the taxation of incomes from £156 to £300. I looked up this matter twelve months ago, without any relation to the present Bill, and I think that, with a total amount received of something like £4,300,000, and the number of taxpayers, 234,000, the taxpayers with incomes of £156 to £300 paid less than £250,000. That is not due to the absence of income between the ranges, but to the fact that the persons liable cannot be followed. This Bill is intended to remedy that defect, and it will not apply as a matter of fact, though it does as a matter of law, to men of migratory habits. It is impossible to follow casual employees, but there are numbers of men, more or less permanently situated, who can be identified, and if they do not pay, it is due to the State and to the other taxpayers, who have to pay progressively more than they, that’ we should follow them, and obtain, at all events, a reasonable proportion. That is what this clause is intended to do, and, though the machinery is not perfect, it is the best we can devise under the circumstances. I cannot conceive any other course except that of taxation at the source of income. There might, of course, be a flat rate imposed, to be collected by the employer.
– Make every adult send in a return, whether he is called upon to pay taxation or not.
– That would only increase the machinery, and, as I contended at the beginning of the Commonwealth Parliament, originally in opposing the then establishment of an InterState Commission, we must beware of creating more machinery than is absolutely necessary for the management of public affairs. A proposal of the kind would mean a number of taxation officials out of all proportion to the results in revenue.
– What is the objection to taxing individual wages by stamped receipts 1
– I think that would entail a multiplication of taxation accounts, and so forth. The simpler we have the machinery the better, and I cannot see that there is an injustice done to the employees by the method proposed. . We have heard it said, for instance, that in some cases we shall actually attach a debt that is not proved to exist as it would be proved in a Court of law. It must be remembered, however, that the taxpayer will be saved the harassing expense of an action at law, and surely the Commissioner will know whether a taxpayer is liable or not?
– Why do you say that it would be impossible to collect the bachelor tax under this Bill?
– There is no provision in the Bill for returns for the taxation of bachelors, the only persons affected being those with £100 a year, without dependants, and those with incomes of £156 a year and upwards. The bachelor tax is a special tax, and we are not now seeking for machinery to collect such a tax.
– Where a taxpayer has given notice that he disputes the amount, no provision is made for the employer to hold the money pending a settlement.
– That will follow as a matter of administration. The Commissioner cannot give notice to pay unless payment is due, and the employee could ask the employer not to pay it. . The Commissioner must hear the responsibility of any action he may take.
– The honorable member for Hunter (Mr. Charlton) the other day instanced a case in which a man, who was not liable to pay, received notice to pay. Supposing an employer deducted the money under such circumstances?
– That point was mentioned by the honorable member for Batman (Mr. Brennan) at the beginning; but the same thing would occur if proceedings were taken by an action in Court. All that is proposed is that notice shall be given, and if the money is not payable it need not be paid.
– But under the clause the employer must deduct the amount, on receiving, notice to do so.
– The employer is in the same position as the wage-earner, in that he need not deduct the amount if it is not payable.
– Do you think the employer would refuse to deduct the amount, and run the risk of a fine?
– We must trust the administration to be as liberal and as fair as Parliament intends; we have to overcome the difficulty in the best way we can. The Commissioner will follow what is the common sense of Parliament, and not harass people when the facts are against him.
.- I support the clause because, after hearing the debate, I regard it as the most just, economical, and efficient method of collecting what is due in the way of income taxation. It must be remembered that this clause will not come into operation until a man, whether inadvertently or wilfully, has become a defaulter - until the Commissioner is satisfied that he has defaulted. We are all agreed that if an income tax is levied, and the great majority of people pay it, whether they enjoy the paying or not, it is only fair that others should not be allowed to evade it. We are not now discussing the merits of the tax; the question is purely whether evasion shall be allowed, and, if not, what is the most economical method of enforcing payment. We must either allow dishonorable or careless men to escape, or devise some means of compelling them to pay. The honorable member for Batman (Mr. Brennan) contends that a defaulting taxpayer should be summoned; but, in many cases, taxpayers whose employment has taken them, perhaps, 100 miles away, would be compelled to either lose three or four days’ work or to employ a barrister or solicitor. My own opinion is that not one out of a hundred men who knew they had to pay in the long run would object to the method proposed in the Bill, as contrasted with that of proceedings in a Court. The real objection to the clause has been raised by the Employers Federation, on the ground that’ the collection of the tax in the way suggested places on the employer a great deal of trouble and inconvenience, while tending, to a certain extent, to make them unpopular with their employees. I totally disagree with the resolution passed by the Employers Federation. At a time like this, when therevenue should be protected, the Employers Federation, if it objects to carry out this duty, is; to a certain extent, unintentionally and innocently, no doubt, endeavouring to evade a proper . obligation. It is the duty of the employer, under the circumstances, to make the collection of the taxation as light as possible to their employees; and no better plan has been devised than that provided in the Bill.
.- I understood the Minister to say that the collection of the bachelor tax does not come within this Bill.
– That is right.
– I must say that I have my doubts as to the accuracy of that view. The Bill is to amend the principal Act, and, if passed, will become part and parcel of that Act. However, I do not like the clause. I believe that, at a time like this, every person should pay some small portion of what he earns to the revenue. But I do not think it is fair to ask the employer to collect these moneys. The. provision does not relate to men who are permanently employed, and, as was pointed out by the honorable member for Werriwa(Mr. Lynch), a great deal of trouble may occur in connexion with temporary employees in the country. I suggest that every adult should be compelled to submit a return of income. The Minister has objected to that course on the ground that it would involve enormous expense. A conference of taxation experts suggested certain amendments of the taxation law for the purpose of bringing about uniform taxation throughout Australia. This Bill is an extreme departure from the proposals of the Conference, and the Government must know perfectly well that the States will never agree to certain portions of it. Of course, if the Commonwealth is indifferent to the opinions of the States, they maybe forced to accept proposals with which they do not agree, and which may be inimical to the primary industries. The returns that employers have been obliged to furnish in connexion with different forms of taxation have represented an enormous burden in the past, and the whole responsibility and expense have been thrown on the taxpaying community. I do not care to what extent the Government increase the super tax, but every person with an income should pay some taxation. I suggest that the clause should be amended so as to compel every adult to submit a return of income, and the penalty for default should be disfranchisement. I think the Government are shirking their obligations and responsibilities.
– There is such a thing as indirect taxation pressing on the masses.
– The Government passed a bachelors’ tax last year, and I have not heard that’ they have yet made any effort to collect it. I did not agree with the tax, because I thought it should have been a tax only on men eligible for military service. This clause will be utilized for the purpose of collecting that money, and it may create an enormous amount of difficulty for the employers. However, if the Government cannot offer anything better, I shall support the clause.
– I assure the honorable member that other forms were considered, but found impracticable.
– If the Government are tied to this provision, I shall vote for it, because I desire them to get revenue.
Question - That the sub-clause proposed to be omitted stand as printed (Mr. Charlton’s amendment) - put. The Committee divided.
Majority … … 14
Question so resolved in the affirmative.
Clause agreed to.
Clauses 33 and 34 agreed to.
Clause 35 -
After section fifty -two of the principal Act the following sections are inserted: - 52b. In the case of cash prizes in lotteries, the Commissioner may, if he considers it necessary for the protection of the revenue so to do, appoint the person liable to pay a cash prize in a lottery as agent for the person entitled to receive the prize, and may call upon the agent to pay income tax at such rate as is declared by the Parliament:
Provided that the agent shall not be entitled to any of the deductions allowed under this Act.
.- I object to the Government, while professing to be opposed to Tattersall’s and in the Postal Act prohibiting people from communicating with that institution, proposing in this clause to collect at the source 10 per cent. of all winnings. This is apparently the first step towards legalizing gambling, and I object to this step being taken by a Government who profess to be opposed to gambling. I shall vote against the clause.
.- I move as an amendment -
That proposed new section 52b be struck out.
Tattersall’s sweeps have had a curious history. They were established in New South Wales, and flourished there for a considerable time, until an enlightened public opinion drove them elsewhere. For a time, they found a resting place in Queensland, and they must have been driven out of at least four of the six States of the Union, remaining finally in Tasmania - which seems to wish to be an Australian Monte Carlo, where tourists may indulge in gambling. The Tasmanian Government, being sorely pressed for revenue, saw in. the sweeps an excellent opportunity for obtaining the wherewithal to carry on the administration of the country; and, in spite of the opposition of the clergy and their parishioners, and of a number of persons who do not go to church, but object to legalized gambling, they passed a law for the taxing of Tattersalls. In a weak moment, the Commonwealth Parliament enacted a provision for the collection of income tax from the winners of Tattersail’s prizes - a most immoral tiling.
– The honorable member speaks with all the warmth of one who expects to win a prize.
– I do not expect to win a prize, and I doubt that it would do me any good to win one. I have heard of many cases in which poor men have found their undoing in the winning of a prize in Tattersalls. Some, on winning a prize, have given up their ordinary occupations to enter into business, and have lost their money; and others have wasted their money in a less worthy manner.Section 57 of our Post and Telegraph Act says: -
If the Postmaster-General has reasonable grounds to suppose any person to be engaged either in the Commonwealth or elsewhere in receiving money or any valuable thing -
for promoting or carrying out . a scheme connected with any such assurance, agreement, or security, or a lottery or scheme of chance, or an unlawful game . . . he may by order, under his hand published in the Gazette, direct that any postal article received at a post-office addressed to such person, either by his own or fictitious or assumed name, or to any agent or representative of his, or to an address without a name, shall not be registered or transmitted or delivered to such person.
The Postmaster-General, who, I am informed, has given himself an excellent testimonial in this morning’s newspapers, which I shall be pleased to read when I get the opportunity-
– The honorable member is wrong, I think. It is in the third person, written by the editorial staff.
– That makes it the more interesting, because for many months past the newspapers have been adversely criticising the honorable gentleman’s administration. For some time past, we have been countenancing gambling by allowing the newspapers to publish advertisements under more or less fictitious names ; but I am surprised that the Treasurer should have approved of the proposal in the Bill. I thought that when he became Acting Prime Minister he would set himself up as an ideal, not only of amiability, but also of conduct. He has slipped, but I hope that he may recover his footing, and accept the amendment that I have moved.
Sitting suspended from 6.30 to 745 p.m.
– The honorable member for Capricornia (Mr. Higgs), in speaking to this question, inferred that ‘the Government, by this particular sub-clause, was establishing some new principle. I wish to make it plain to the honorable member, who is familiar with the principles of income taxation, and for a time was responsible for a good deal of the administration of our income tax legislation, that the original Act of 1915 established definitely the principle of taxing lottery prizes, and . included such prizes in the items that were subject to income taxation. The law stood in that way until last year, when, in the Income Tax Bates Bill, which was passed on 28th September last, we made a further definite stand as to the amount that we would take by way of income tax from such prizes.
– The honorable gentleman is historically accurate, but there is no reason why wo should not now retrace our steps.
– I shall deal later on with the merits of the question, but I desire to present, in chronological array, a few facts for the information of the honorable member. Section 7 of the Bates Act of 1917 reads -
There shall be payable in respect of a cash prize in a lottery income tax to the amount of 10 per centum of the gross prize money.
The inclusion of such items of income in individual schedules was, therefore, made necessary by that Act. All that we do in this Assessment Bill is to provide that we shall tax this prize money at its source- before distribution - instead of allowing it to leak out, and so to lose a great deal of the taxation payable in respect of it. This, therefore, ‘ is not new legislation. It is but the third step in relation to the taxation of prize money. The primary step was taken in the Act of 1915, and we advanced to a more definite basis in the Act of 1917. In this Bill we merely change the mode of assessment.
As to the principle involved, I “do not. agree with the honorable member that we should not levy on cash prizes of this kind. The taxation office, as a matter of fact, has been levying upon them in accordance with the two Acts already in force. If the honorable member won a
Tattersalls prize to-morrow-
– He says that he would not take it if he did win it.
– Which, to keep his conscience clean, may God forbid. He is the only man I have ever heard say, without his tongue going into his cheek, that he did not want to win a Tattersalls sweep. Assuming him to be as sincere as’ his words implied, and his appearance, as he spoke, indicated, the position is that, if he did win a prize, then he would have to include the prize money in his schedule, whether this Bill became law or not, and would be taxed to the extent of 10 per cent, upon it.
– If he won it he would pay it forthwith into the Consolidated Revenue’.
– Then I withdraw the hope that I have already expressed, and sincerely trust that he may win a- prize. These prizes are in the nature of windfalls. I do not invest in sweeps. I think I have had only one investment in a Tattersall’s consultation . I did not win a prize, and was so severely disappointed that I swore off for life. I did so, not because I am opposed to the principle, but for the reason that I think it a bad investment. I can spend my money more profitably and enjoyably in other directions. When a man wins a prize in a sweep, especially in war time, the Commonwealth surely is entitled to ask for a proportion of it. If the only question is as to the mode of collection, then this is the best way to collect the tax on such windfalls. Leakages are less likely, and we are liable therefore to obtain more revenue this way.
– The honorable member for Capricornia (Mr. Higgs), when Treasurer, did not object to collect revenue in respect of income tax on prize money.
– I doubt whether the honorable member really understood that this was the principle of the law which he administered when he was Treasurer.
That is the most generous view I can take of his attitude and utterances, since if he objects now for the first time, he has either been suddenly converted, or is not sincere. I would sooner assume that he is sincere, and did not appreciate the full responsibility which he carried when in office. I do not know” what revenue we shall derive from this source, but we are entitled to whatever it does bring in, and I do not think a man who wins a prize will object either to the principle or to the mode of procedure adopted in this clause.
.- I take this opportunity of protesting against the infamous humbug. and hypocrisy of every member of the Commonwealth Parliament in permitting Tattersail’s sweeps to be carried on as at present. Every one knows that the law in respect of Tattersalls is repeatedly evaded. It has been asserted that information is sometimes given through the Post Office to persons to whom applications for tickets in Tattersalls are addressed, that they must be careful if they wish to avoid a prosecution. As soon as the delivery of letters at a suspected address is prohibited by notice in the Government Gazette, new addresses are supplied to intending investors. Whenever I visit Tasmania, I take a ticket in one of Tattersall’s consultations. ‘We cannot put down gambling, but we can keep it under control, and I think we could best control it, and also derive a considerable income by nationalizing Tattersall’s. I would also nationalize the whole of the totalizators throughout the States. I know that the wowsers, who gave the Acting Prime Minister such a lively time the other day, will object to anything of the kind. The bitterest amongst the members of that deputation was a man named Leeper, who is generally known as “Leper.” He said he would rather we should lose the war than that a moral law should bp broken. Every one knows that some of the members of that deputation break moral laws and all the Commandments. I have specially in mind Archdeacon Hindley, whom I have personally accused of lying in the pulpit of the house of God. If that is not a breaking of one of the Commandments, I do not know what is. The Government could shut down Tattersall’s consultations if they desired to do so. Tasmania needs revenue, and the Commonwealth in its generosity has made that State a present of £900,000. I would far sooner see the Commonwealth make another grant to Tasmania than that the Government of that State should derive revenue from a system of gambling which nominally is not permitted under Commonwealth law, but which is, and has been, winked at by this and every previous . Commonwealth Government. Now is the time to nationalize Tattersall’s consultations, at all events, for the period of the war. If the people were given the power to control Parliament by means of the referendum and initiative, then they could say whether or not they desired the nationalization of Tattersall’s to continue. I shall vote against this amendment as a protest against a system of hypocrisy of which I am tired. I shall be prepared to vote for the nationalization of Tattersall’s and of all totalizators throughout Australia. It is not the wowsers in the community that provide for the government of the country, but rather their opponents and the middle class between the wowser and the fair-living man. I do not approve of the Government indirectly recognising Tattersall’s. They could nationalize it by means of a regulation under the War Precautions Act, and they could also nationalize the whole of the totalizators throughout Australia in the same way. The Commonwealth would thus be able to take a proportion of the income derived from such sources.
.- The honorable member for Capricornia (Mr. Higgs) has briefly traced the history of Tattersall’s in Australia; but I think he will admit that the Government with which he was connected was just as responsible for the continuation of that system of gambling . as the present Administration are. I am under the impression that no Government in Australia has yet seriously attempted to suppress Tattersall’s, otherwise some effort would have been made to deal with the tobacconists who display in their windows such notices as “We communicate direct with Hobart,” or “ Mail for Hobart closes at such-and-such a time.” Then again a Government that was really sincere in the desire to suppress gambling could not possibly countenance the numerous registered and unregistered meetings that are taking place in Australia from day to day. Thegambling that occurs on race-courses is far worse than the gambling associated with Tattersall’s sweeps. Since no Government has made any genuine attempt to suppress Tattersall’s, and seeing that a lot of money is distributed through that agency, I think the Ministry are perfectly justified in attempting to obtain some income from it.
– In opposing the claim of the States that they should obtain revenue from “ windfalls “ in the shape of prizes in lotteries or successful land deals, the Treasurer seemed to take a view entirely different from that behind the proposal which we are now discussing. “The Commonwealth taxation officers say that such windfalls are in the nature of an accretion of capital, and they refuse to tax them, whereas, in my view, a taxpayer who unexpectedly makes a couple of hundred pounds in a land deal, or by means of an investment in Tattersall’s, finds it much easier to make a contribution to the revenue than it is for a man to contribute from his ordinary, and sometimes rather limited, income. I should be glad to learn that the Treasurer has changed his attitude in regard to the taxation of profits made on single deals in land, sheep, merchandise, and so on, as they seem one of the readiest subjects for taxation. Believing that, I shall vote for this proposal. To honorable members who object to taking revenue from prizes in Tattersall’s because it is an immoral undertaking, I would point out that, by the time the investor pays 5 per cent. to Tattersall, 10 per cent. to the Commonwealth, and another proportion to the State, as happens in New South Wales, and also pays the fellow who owns the horse, there will be very little left. No quicker way of making investments in Tattersall’s unpopular could be devised than to increase the amount of taxation payable on prizes when they are won.
Question - That proposed new section 52b proposed to be omitted (Mr. Higgs’ amendment) stand as printed - put. The Committee divided.
Majority . . . . 15
Question so resolved in the affirmative.
Clause agreed to.
Clauses 36 to 38 agreed to.
After section 57 of ‘ the principal Act, the following section is inserted: - “ 57a. ( 1 ) Any person who fails or neglects to duly furnish any return as and when required by this Act, or the regulations, or the Commissioner, shall be liable to pay, by way of additional tax, on demand by the Commissioner, a sum of One pound for each month, or part thereof, during which the failure or neglect to furnish the return continues. “ (2) The Commissioner may, in any particular case, for reasons which in his discretion ‘he thinks sufficient, .remit the additional tax imposed by this section or any part thereof. “ (3) If the Commissioner considers that the circumstances of any case warrant action being taken to recover the penalty provided by the next succeeding section, such action may he taken by the Commissioner, and in that case the additional tax payable under this section shall not be charged.”
.- This proposal is far too drastic. The principal Act already imposes a penalty of not less than £2, or more than £100, for failure to make a return. Now it is proposed to make the person pay, by way of additional tax, on demand by the Commissioner, no less than £1 per month for each month or part thereof during which the failure or neglect to furnish the return continues. The Government have done many drastic things, and no doubt will’ propose others during their existence - which I sincerely hope will not be too prolonged - but this proposal seems to go a long way too far, and I hope the Minister will agree to wipe it out. A man may be unable, or may neglect, for good and sufficient reasons, to send in a return at the proper time. If he does so fail, he is liable to the existing penalties. Why, then, does the Treasurer propose this additional drastic penalty ? If the Treasurer does not explain the proposal satisfactorily, I hope the Committee will reject it-
– The penalties under the principal Act are inflictable by a Court on prosecution for various offences. This is not that kind of penalty, but an additional tax which the Commissioner may inflict, and may, under sub-clause 2, remit, when full information is placed before him.
– Which he will not do.
– I hope my honorable friend will cheer up. There are great difficulties surrounding the collection of income tax,, which this power will to some extent remove. It is sometimes very hard to prosecute, no matter what the provisions of the Act may be, and convince a Court of summary jurisdiction that the law is on the side of the Crown, and the fault on the side of - the accused. After notices are inserted in the newspapers, posted at post-offices, and proclaimed annually as loudly, and as far as possible, people should be prepared to put in their returns, and ‘the knowledge that they are liable to this additional tax will accelerate their obedience to the law. If there were no power to remit, as in sub-clause 2, I should say the proposal was too Draconian in principle or in amount, but the Commissioner will operate this part of the law with the same discretion that he has exhibited in the difficulties which have surrounded him during the last two or three years. If a person who is fined £3 for being three months late with his .return could- furnish the Commissioner with satisfactory reasons, such as illness, absence, difficulty, or impossibility of rendering the return, the Commissioner in his judgment will remit the penalty, but the clause is a very salutary dispensation, and will, I am sure, increase the revenue from those who at the present time show annually a tendency to make default.
.- I have no wish to shelter any one who deliberately refuses to send in his income tax return, but we are liable to cause a great deal of hardship to some individuals if we pass this clause providing that a person who fails to send in his return is liable to a fine of fi for every month that he is in arrears. Many people believe that because of the size of their families or the smallness of their earnings they are not called upon to furnish returns, and the Commissioner of Taxation does not find out for at least twelve months afterwards, when he sees from the employers’ sheets that certain incomes have been earned, that they should have furnished them. In such cases the penalty would be at least £12.
– Would they not be fair cases to put before the Commissioner ?
– But before the Commissioner will consider any appeal the fine must be paid. At least that is the practice of the Department, so far as I understand it. If the Commissioner could deal with an appeal before asking for the payment of the penalty, I would not oppose the clause; but as the practice of the Department is to call upon the taxpayer, who is over-assessed, to pay the tax before his appeal is heard. and, believing that the same practice will be followed in this case, I “must vote against the clause. If my contention is not correct, of course my argument falls to the ground. I hope that the Minister will give the matter his most careful consideration.
– It seems to me that the line now being followed is that of giving the Commissioner the opportunity to get revenue more by imposing penalties than by collecting taxation. There is already a penalty provided for not furnishing returns, and I think the law could be very well left as it stands. Letters are frequently lost in the Post Office. , What will happen if a return sent through the Post Office does not reach the Taxation Office? A return which is sent in before the time for furnishing returns expires may easily go astray, yet the taxpayer is called upon to pay a fine. He may assert that he has sent in his return, but the Department swear that it has ‘not been seen though it may be kicking about in the office for all the Commissioner’s officers know or care* I know of a case in which a return was” sent in, and a second return had to be furnished.
– Does the honorable member know the person who furnished that return?
– Tes, I know that it was sent in, but I do not know what became of it. It must not be forgotten that if we propose to adopt a policy of securing revenue by inflicting fines, we may inflict them on poor men. Fines should not be imposed unless they are absolutely necessary. It is said that the Commissioner will take into consideration any claim submitted for the disallowance of a fine to which the taxpayer may become liable; but I undertake to say that he will make no such disallowance. All that he will worry about will be getting revenue by means of imposing fines. I do not propose to be a party to giving him that power, -and I shall certainly vote against the clause. The Commissioner already has ample powers. There is no need to increase them.
.- The usual practice is to* base penalties upon a percentage of the amount of tax to ,be levied, but here it is proposed to inflict a fine of £1 per month.
– For default in the matter of furnishing returns.
– That may be so; but the principle is a wrong one. The penalty should be upon a percentage’ basis. In another clause the Treasurer has promised to add a proviso by which notice has to be given and proved. Persons do make mistakes regarding the date for furnishing returns. Members of this Parliament have quite bond fide forgotten to send in their returns. There are so many returns to be furnished that it is easy to forget the exact date upon which any particular return has to be sent in.’ Most people leave the matter to the last day. I suppose that more income tax returns come into the Taxation Office on the last day than at any other time. Many causes prevent people from furnishing their returns. Illness may prevent them from doing so. I shall vote against the clause.
– We should have had some information as to the amount of fines which have been imposed during the past year as an indication of the spirit in which the penalty provisions are administered. My experience does not agree with that of the honorable member for Hindmarsh (Mr. Archibald). In the only case which has come under my notice, where an aged taxpayer forgot to send in his return until some months after the period when it was clue, upon the facts being related by him, and upon certain people vouching for his integrity, the fine was immediately remitted. I do not agree with the Leader of the Opposition (Mr. Tudor) that the penalty should be in proportion to the amount of the taxpayer’s income or tax. It is just as much an offence to withhold a return for £10 as it is to withhold a return for £100. Honorable members are apt to look at these matters from the wrong point of view. The income tax is a direct tax payable by certain people, and those who owe money to the community should pay it, and should not be allowed to put off making their returns from month to month. The task of the Commissioner is a difficult one. It is not easy for him to decide whether a man has failed to furnish his return wilfully, or because he has had so many returns to furnish that he has overlooked the proper date. We are doing our best to secure a single return for all taxation, and I hope that it will- not be long before there will be no excuse on this score for not sending in the taxation return in the proper time. One honorable member has alluded to the host of clerks that will be necessary for filling in taxation returns. If we adopt the suggestion of the Leader of the Opposition and impose the penalty in this case on the percentage basis, a host of clerks will be required, who will be paid by the Commonwealth, and not by the people furnishing returns. The better principle is to have one fine for each offence, and if we ascertain that the Commissioner has been abusing the power which is given to him, Parliament can soon remedy the matter.
.- I admit that there should be a penalty for not furnishing a return; but, as the honorable member for Hunter (Mr. Charlton) has pointed out, if a man’s return is twelve months overdue, it will mean a fine of £12, though the amount of the tax may not be more than 5s. I know that in regard to excise duties, if a publican omits to delete the duty stamp on a cask of beer, he is fined 10s., but is not fined £1 for every day of the month that he has failed to comply with the law.
– He is fined £1 for the second’ offence.
– There is no second offence about this matter at all. If the Government are not prepared to drop the clause I shall move an amendment. Before a conviction is secured there should be evidence of wilful neglect. All our criminal laws are based on this principle, and in the case of evasion’s of the income tax, the Commissioner himself should be satisfied of an intention to defraud the revenue before a taxpayer is fined. I know that in my own case, I always send my return in on the very last day, because I endeavour to find out how much I can avoid paying, and I am satisfied that all other honorable members do the same thing. I move -
That the words “ for each month or part thereof during which the failure or neglect to furnish the return continues,” lines 7 to 9, be left out.
– I am afraid this will make the position far worse for the small taxpayer, because it is ridiculous to expect that the fine then to be imposed would be an effective penalty, with f-he result that the Commissioner would have to fall back upon the next section under which there will be a penalty of not less than £2, nor more than £100, to be imposed on a taxpayer who fails to furnish a return.
– That should be knocked out, too.
– In that, case honorable members would then be knocking out a provision previously assented to by Parliament, of which the honorable members opposite were supporters, and were responsible for passing.
– Not this provision.
– I am referring to the original Act passed in 1910. I believe very great difficulty is experienced in following up some men, and that considerable search has to be made to ascertain whether returns have been furnished or not. The public are notified that they are expected to send in returns, and there is some obligation upon taxpayers to help in the administration of the law. This proposed penalty may in some cases appear harsh, but I ask honorable members to assume that the Commissioner will apply it with a very great deal- of consideration. It is intended to enable him to.impose fines without proceeding against defaulters in Court, and if the taxpayer finds that the longer he neglects to discharge the obligation imposed upon him, the heavier will be the fine, I think there will be a greater inclination on his part to observe the law. It has been stated by some honorable members that the taxpayer must first pay the fine before he can appeal to the Commissioner, but that is not the case at all. It is incumbent on the Commissioner first to find out whether a return has been furnished, and after that has been ascertained, he may impose the fine. In other cases there will be an actual imposition of the penal tax of 10 per cent. per annum for notpaying within the time specified, but this may be remitted. Proceedings in Court ought to be avoided in the interests of the taxpayer.
– The House ought to be very careful before it authorizes an extension of the principal Act. This is not the time for experiments of this character, and I urge the Government to drop the clause altogether. They would be perfectly right in retaining the provision imposing a penalty of 10 per cent. I would not object to a fair and reasonable proposal like that, and I hope the Commissioner will exercise with consideration: the power vested in him. What is to prevent us from continuing in the administration of the Act, with the existing penalty provisions in force? No doubt, we shall have to deal again with the Income Tax Act next year, and then, with the experience of this year to guide us, we shall be better able to appreciate the difficulties urged by the honorable member for Hunter (Mr. Charlton) . It is probable they will be experienced, because we are legislating very much in the dark, and, though I am not worrying about whether this measure will be regarded as unpopular, I should be concerned if the people formed the impression that we had hastily put a burden upon them. It would be as well to omit the proposed new clause, and retain the penalty provisions that already exist. I would not interfere with them, for the simple reason that aggravated cases, in which a taxpayer, is defying the Commissioner, might occur, and in such cases an adequate penalty should be imposed. The proposed new clause is bound to become vexatious and harassing until the provisions of the Act become well known, and the administrative machinery is working smoothly. We should be, careful not to harass and worry the people more than is absolutely necessary. I hope, therefore, that the proposed new clause will be rejected.
.- I hope honorable members will not consider the amendment now before the Committee for the omission of the clause as a party question. The Bill is not a party measure. The excuse made by the Treasurer (Mr. Watt) seemed to me to be a very flimsyone, and it might account for his strategical retreat shortly after his speech.
– That is unworthy.
– Perhaps the honorable member will not think so after he has heard what I have to say. What is the reason given by the Treasurer for this proposed new clause? He said it was a very difficult matter to convince the Court that the Commissioner was right and that the taxpayer was wrong, and therefore, he wanted to make the Commissioner the judge.
– Is it not optional whether steps are taken in Court or not ?
– Not so far as this proposed clause is concerned.
– The Government propose to strike out of the principal Act the following provision, which already deals with the offence: -
If we turn to section 43 we find the following penal tax : -
If the income tax or additional income tax payable on an amended assessment is not paid before the expiration of the time specified in section 41 of this Act, or such further time as may be allowed….. the taxpayer will be liable to an additional tax, amounting to 10 per cent. per annum on the tax unpaid. That is, if a man’s income tax is£1, and he delays sending in a return, he is fined 2s., while another who is assessed at £100, and similarly offends, will pay £10, and so on. But what would be thought of such an excuse, in the case of any other offence against the laws of the Commonwealth, as that it would be difficult to convince the magistrate or judge! These gentlemen are accustomed to weigh evidence, and eminently suited to perform the judicial work of deciding whether a taxpayer is guilty of an offence. Only the other day we saw in the newspapers that a man had been fined £30 in an income tax prosecution ; and I ask the Ministry whether they have considered that their proposal means that people in all the towns throughout the Commonwealth will probably neglect to send in returns at the proper time. Under the present law, I presume such, offenders are brought to the Court in the nearest principal town; but under the clause offenders will have to write to the Commissioner in Melbourne, or his representatives in Sydney and the other capital cities.
– They would rather do that than travel a hundred miles to the nearest Court.
– And would find it far less expensive.
– Do not honorable members see that they expect the Deputy Commissioner in each capital city to decide these cases ? There will be no arbiter to decide whether the Commissioner or the taxpayer is right, or to consider any explanation by the taxpayer as to why the return was not sent in at the proper time. I consider the proposal of the Government most drastic and injudicial.
– The Commissioner ought to be the best judge, and will certainly prove the cheaper judge:
– We have to consider that the Commissioner and the Deputy Commissioners - and I have a great deal of confidence in the judicialcapacity of the Commissioner-will for some time have a great deal of business to do in connexion, not only with the income tax, but with the war-time profits tax - a very complicatedimpost - and also the entertainments tax. In my opinion, neither the Commissioner nor the Deputy Commissioners will have sufficient time to consider these cases in the judicial way theyought to be considered, and in the way they would have to be considered if the Commissioner were compelled to take the before the Courts as under the present Act.
– The effect of the clause will be to lessen the Commissioner’s work ultimately.
– I do not know about that. A great deal of hardship may be caused to people who fail to send in returns at the proper time. Under the present law, a person who fails or neglects to furnish any return is guilty of an offence, and is liable to a penalty of £100, or so much less, as the magistrate or Judge may care to impose. By this Bill it is proposed to amend that section so as to provide for the penalty of not less than £2, thus binding the magistrate or Judge to observe that fine as a minimum. That, in my opinion, is wrong, and discretion should be allowed. We must not forget that there is the additional penalty - and a penalty it is - of having to attend the Court, involving both time and expense. The whole measure seems to be too cast-iron and oppressive ; and I hope the Committee will be satisfied with the provisions in the principal Act.
.- I can-: not understand how the suggestion of the honorable member for Capricornia , (Mr. Higgs) in regard to a percentage basis, would operate so far as this Bill is concerned. This clause deals, not with the amount of the tax, butwith the failure to send in returns, and before a return is sent in, how can a taxpayer compute the rate or percentage? The Government is to be congratulated on dealing drastically with those who neglect to perform their public duties. In this period of war, when every shilling is required, we find numbers shirking their obligations, and everything should be done to bring such people to boot. It is always the case that honest people have to suffer for the actions of the dishonest. Only the other day I was talking to a storekeeper, who informed me that his estimate of losses from had debts was 10 per cent., and such losses had to be made up by the honest members of the community. This same argument, of course, applies to taxation, because when people do not discharge their public obligations, others have to pay enhanced amounts. I shall certainly support the proposal of the Ministry.
.- I move -
That after the word “ continue “, line 9, the words “ after such person has been notified by the Commissioner “ be inserted.
We ought to be very careful not to make this clause too drastic.
– How could the taxpayer be notified when he has not sent in a return?
– When the Commissioner finds that a return has not been sent in he, instead of taking immediate action to impose a penalty, could notify the taxpayer. Then, of course, if the taxpayer still neglected to send in a return, a fine might be inflicted.
– An army of clerks would be required under such a proposal,
– The proposal ls much on the lines of a previous amendment agreed to by the Acting Prime Minister (Mr. Watt), who saw the injustice likely to be done under the .’clause then before the Committee. It is all very well to suggest that an army of clerks would be required if my proposal were adopted, but I remind the Committee that there will be hundreds of wageearners who would fail to send in returns, simply because they do not know that it is necessary for them to do so. When the Commissioner receives the lists of employees from the employers, he will be able to pick out those who have not sent in returns; but by that time twelve or eighteen months will have elapsed, and the penalties will have amounted to £12 or £18. The Commissioner can just as easily notify the taxpayer as I suggest, as he can put the law into motion to collect a fine.
– In the one case the Commissioner knows the taxpayer. whereas in many cases he does not know him.
– Exactly. How is the Commissioner going to impose a fine if he does not know the taxpayer?
– He can when he ultimately finds out.
– When the Commissioner finds that a man has not sent in a return he ought to notify that man, and give him an opportunity to send one in. Honorable members take it for granted that all who do not send in returns are wilfully trying to evade payment of the tax. Such is not the case, and we ought to put ourselves in the position of these men, many of whom are not accustomed to this sort of taxation. Under the State laws there are exemptions up to £200 and £300, thus leaving great numbers of working men unaffected ; but under the Commonwealth law every one with an income of £156 is liable, a fact not generally known amongst the wage-earning classes. Let me point out that to-day in New South Wales many have not received Commonwealth income tax assessments, although the tax ought to have been paid a couple of months ago.
– Many have not yet received assessments.
– And such cases as will come within this clause cannot be dealt with until all the assessments have been completed, when the Commissioner and his clerks will have a little time to look into the .matter, and see what returns have not been sent in. Every month that a taxpayer is behind in furnishing a return he is fined £1, so that, in the many months which must elapse before this business is reached, the fines may amount to £15 or £18.
– They will never be imposed.
– There lies the danger. We do not know that the fines will never be imposed. Is it not better for this deliberative Parliament, knowing that such a position may arise, to insert a proviso permitting the Commissioner to notify the taxpayer before inflicting a fine? I do not agree with any man endeavouring to shirk his duty in the matter of taxation; but I was reared amongst working people, and was an industrial worker myself until I entered public life ; and 0 knowing the circumstances as I do, I feel I have a perfect right to protect those persons who, from sheer ignorance, may render themselves liable to heavy penalties.
– I hope the amendment will not be agreed to, for it would have the effect of neutralizing the clause. It would mean that it would become the object of every man to evade his responsibilities. There has been a great deal of trouble’ in applying the provisions of the Act in relation to the persons whom the clause is intended to affect. The Act has been in operation since 1910, and the amendments made in it from time to time have been found necessary for its proper administration. The Commissioner, before prosecuting, sends a final notice in every case. That, of course, is if he can find the party.
– And if he cannot find him, he does not fine him.
– It has been said by honorable members on the other side that one could not fine a man unless he was first found out. In this case, it is a penalty imposed upon a person who cannot be found, and there is, therefore, an inducement to discover himself implied by a continuous penalty. There has been a great deal of trouble, as I have indicated, in collecting the taxes. Many fines were imposed last year, and from the beginning of the operations under the Act, which cost a great deal of money in bringing about. One thing which has been markedly noticed is that if a fine is imposed for an offence in a certain district there is a wonderful awakening to their duty on the part of other persons in the same neighbourhood. Under this clause, if once a man is fined for not sending in his return, the experience of the Department justifies me in stating that he will never commit the offence again.
.- It has been said by some honorable members that “this provision is taken from the Customs Act. Anybody who says that does not understand the Customs Act.
– You say, yourself, that men are repeatedly fined and not taken into Court.
– Of course, but there is nothing in the Customs Act that fixes a penalty, and a man always has an opportunity of choosing whether or not he will go into Court. Here, however, he has no option.
– How often does a case get into the Courts?
– It is cheaper, of course, and better to go direct to the Minister. But I repeat that we are giving no option here at all. Honorable members will have some knowledge of scores of cases under the Excise Act where the Minister concerned has had to deal with the facts upon their merits after the person involved has signed an agreement that he will not go into Court.
I know that one would prefer in every instance to go- to the Minister or the Commissioner rather than into Court, and I am anxious to give an option in the matter. I take the same view as the honorable member for Hindmarsh (Mr. Archibald), and say that we have no right to fix the penalty. In some cases under the Customs Act there are fines inflicted, and it is stated distinctly in every order issued that “ in the above case there has been no fraudulent intent.” Here, let the Commissioner impose any penalty he thinks fit; but I will not vote for a clause as the outcome of which a person may be fined and may not know that he has been fined. It is more than possible that a person may make an honest mistake as to his liability under the Income Tax Act. We are again altering the details of the exemptions, and a person may genuinely fail to realize that he should send in a return. Is he not to have an opportunity of appealing against the punishment meted out’?
– There is . a clause later on dealing with that.
– We do not want to let this get past us. Under the Customs Act particulars of cases must be published in the Gazette, so that everybody may see the names of parties who have gone before the Minister, and may know whether they have been adjudged fraudulent or not. Under the Income Tax Act, the Commissioner previously had to send in an annual return, and state the reason why fines had been remitted ; but that has been struck out now. I want to help the Ministry to reach all defaulters. I would be willing to make the penalty higher, where there has been deliberate intent to evade the Act. That is why I would give the Commissioner a free hand. I shall vote for the amendment, knowing that the practice of the Department to-day is that when it is ascertained that a person has not sent in a return, he is notified; and thereafter it is only right that he should be penalized.
– How does the Department know the notification reaches the party?
– It takes good care of that by sending through the Post Office.
– They do not prosecute at all. They find a man, and then give him notice of prosecution.
– The Commissioner should deal with the matter on its merits, and there should be no fixed penalty. Further, a person should have the opportunity of knowing that he is in default before he is punished. I hope the Committee will wipe out the fixed penalty as it stands to-day, and retain the provision whereby a person must be ‘notified of his liability to send in a return ; after which, if he fails in his duty, he should rightly be dealt with
– The amendment will mean that nobody would send in a return until the Commissioner demands it, which would be reducing the matter to an absurdity.
Question - That the words proposed to be inserted be so inserted (Mr. Charlton’s amendment) - put. The Committee divided.
Majority . . . . 11
Question so resolved in the negative.
Question - That the clause be agreed to - put. The Committee divided.
Question so resolved in the affirmative.
Clause agreed to.
Clause 40 -
Section 58 of the principal Act is amended - (b)by omitting paragraphc of subsection (1) thereof and inserting in its stead the following paragraph: -
Sectionproposed to be amended -
Penalty: One hundred pounds.
.- Paragraphs b and c are too drastic. Anybody who fills in a return, which he believes to be accurate, but which is found subsequently to be wrong in any particular, will be liable to a penalty of not less than £2, and not exceeding £200.I quite agree that any person who wilfully makes an inaccurate statement in his return should be subject to a penalty, but I think we are going too . far in making an offence of an inadvertent misstatement. A man in filling in his return mightunintentionally overlook some important fact, and he would be liable to a fine exceeding £100. I move as an amendment -
That paragraphs b and c be left out.
– I am wholly in agreement with the mover of the amendment. It is entirely wrong to make purely artificial offences in thousands, as paragraphs b and c will do. The Treasurer (Mr. Watt) stated a few nights ago that the only reason for this proposed amendment of the Act is that the Treasury officials have been unable to convince the Courts that persons have wilfully made misleading statements. I, myself, have quite innocently made misstatements in my returns which would have rendered me liable for a fine if this provision had been in force. It is extremely difficult for the taxpayers to determine whether this thing and that thing should be included, in a return, and to make offences of inadvertencies which the Department knows are innocently committed by many taxpayers every year is going too far. We are told that the Treasury officials will only press for these penalties in suspicious cases, but I do not think it right that in order to reach a few individuals who deliberately make false returns we. should extend the law in’ such a way as to make hundreds of innocent persons liable to a heavy fine.
.- The Treasurer has already explained that this amendment has been drafted because it has been found exceedingly difficult, if not impossible, to get convictions under the sub-section which contains the words “ knowingly and wilfully,” because the Department has to prove a state of mind that cannot be set up in evidence. The wording which is now proposed runs through all our Acts, but only in cases of cogent necessity has it been found necessary to press, for penalties. Those Acts have not passed without a good deal of observation by those whose business it has been to study their provisions. In the Customs Act, for example, there are very many sections in which the use of the word “ wilfully “ is discarded - sections which constitute it an offence for any person to make a false declaration and which leave the administration of the Act to the common sense of the authorities wherever discretion is vested in them in regard to prosecutions. Section 234 of that Act provides that noperson shall make any entry which is false in any particular, otherwise he shall be liable to a penalty of £100. All that we are now asking is that, in the light of experience, similar power shall be vested in the Commissioner of Taxes. The effect of rendering it incumbent upon him to prove that a person has knowingly and wilfully made a false statement will be that he will not secure a conviction in one case out of one hundred. There are a number of other sections in the Customs Act which make the actual fact, rather than the intent, the evidence of one’s guilt.
– What is meant by “ false”?
– Since the honorable member has asked that question, I think that, as a rule, the Courtwill construe it to mean what is diametrically opposite to fact. “False” is the exact opposite of truth. Under this clause, it will be incumbent on the prosecution to show that any statement by a taxpayer is false. In addition, the Commissioner will have to prove that the statement was wilfully and knowingly false. That is exceedingly difficult to prove. This provision has been inserted because it is really necessary for administrative purposes, and the precedent which I have quoted justifies its inclusion.
.- I scarcely think that the Customs Act, which has been cited, can be regarded as a parallel case. From a long experience with Customs matters’, I know that, in ninety-nine cases out of every one hundred, any man who makes a misstatement in regard to a Customs entry does so wilfully. He has all his invoices before him, and consequently there is no excuse for error. But the preparation of an income tax schedule is an entirely different proposition. A man may unwittingly ‘ omit some item from his return, and, under this clause, that omission will render him liable to a penalty. If the provision be agreed to in its present form, I fear his statement will be regarded as a false one, even though it was unintentionally false.
– Does the honorable member think that the Commissioner would take action in such. cases?
– Under this provision, I think that he would be obliged to do so. T should like to hear the Minister’s opinion in regard to it.
.- There can be no doubt as to the desire of honorable members to assist the Government in insuring that this measure shall cover all persons who are liable to pay income tax. But the net which it is here sought to introduce has such a very fine mesh that I fear it will inflict hardship upon many persons. This clause will not only take away the protection which a taxpayer would otherwise have in regard to a statement which was not knowingly and wilfully false, but it provides for prosecutions being instituted in regard to statements that are “ false in any particular.” Now, a wrong date may be regarded as a false statement. The words “ false in any particular “ seem to me to condemn the entire clause, because they will cover any misprint in typing, any mistake in wording, and any error in the addition of figures. It is a pood old principle of government that we should make it easy for the people to do right and hard for them to do wrong, but this clause will have the very opposite effect.
– Many honorable members appear to imagine that the gentleman who sits at the receipt of custom is as rigid and oppressive as were similar gentlemen in days of old. I do not think that he is. All through the Bill we have had to vest discretionary power in the hands of the Commissioner, and necessarily so. But it is not likely that he will be remarkable for unjust decisions, because, in that event, he would be absolutely intolerable. Ever since the first income tax in Australia was passed by the South Australian Parliament, I’ have had continuous experience of the treatment of my constituents by the Commissioner of Taxes for that State, and out of scores and scores of instances, I have never known one in which that officer wittingly gave an unjust decision. If we do not vest in the Federal Commissioner of Taxation the power that is here sought, we shall make efficient administration of his Department absolutely impossible. If we wish to cheapen that administration, the power sought to be conferred by this clause is not greater than we ought to concede to the Commissioner.
Mr. WEST (East Sydney) [9.41J.- Whilst I think that we should clothe the Commissioner of Taxation with reasonable discretionary powers, I do not’ believe that we should go so far as is contemplated by this clause. Amongst other things, it provides that if any statement made by a taxpayer “ either verbally or in writing “ be false, a prosecution may be initiated. Without any intent to deceive the Commissioner, a taxpayer may very easily make a false statement - particularly an oral statement.
– Nearly all prosecutions for perjury are founded on oral state-‘ ments.
– But in those cases the offenders are prosecuted for statements made upon oath. Under this clause, if I were to go before the Commissioner of Taxation, and make a statement which was incorrect, I should be liable to a penalty. That is altogether unjust. Honorable members upon this side of the chamber are exceedingly anxious to assist the Government to perfect this measure, but their efforts in that direction are thwarted because Ministers have a solid majority behind, them. What is being asked for is an unnecessary power. Under the clause the Commissioner might fine a man £200 or £300 for merely making some incorrect statement in his office. Such a thing is unheard of in a court of law. Would it not be possible to strike out the word “ verbal “ I
– No, because of the connexion of this clause with other clauses.
– It would be sufficient to provide a penalty for making any false answer in writing. I am sure that the Committee would strike out the word “verbal” if the question. were not made a party one, and I defy the Minister to show me an instance in our civil or criminal law in which the word is similarly used. Of course, perjury is the result of a verbal statement; but it must be a statement on oath. The mere making of a false statement in the street is not perjury. I have no desire to help people to evade “taxation, but we should legislate within the realm of reason.
– You are sheltering the fat man.
– It is the small taxpayer for whom I am speaking. He is not so deep and cunning as those who pay the big amounts. As a representative of the people, it is my duty to see that no injustice is done to any class of the community, but when extraordinary and unnecessary powers are given by an Act of Parliament, there is at least a possibility of injustice.
– The provision in the principal Act which we desire to strike out makes it an offence to knowingly and wilfully make and deliver any false return, and to make any false answer, whether verbally or in writing, in relation to any matter; the provision which the honorable member for East Sydney (Mr. West) has criticised is to be inserted in lieu of that. The question naturally arises, “What is meant by making a false answer Verbally?” Well, it is provided in section 27 that the Commissioner may, in writing, require any person, whether a taxpayer or not, to do certain things. He may require information or evidence to be given on oath, and either verbally or in writing. If a false statement is made at an inquiry which has been deliberately summoned by the Commissioner, the person who makes it can be prosecuted, but it is exceedingly difficult to obtain convictions under the law as it stands, and although there have been very many cases before the Crown Solicitor, the difficulty of proving them has been insurmountable. Very large sums of money are thus held back, and we ask that facilities shall be afforded for bringing the cases more easily before the Court.
.- If the honorable member for Hunter (Mr. Charlton) will restrict his amendment to the omission of paragraph b, I shall be prepared to support him. That would leave the law as at present so far as the punishment of persons making false returns isconcerned.
– That would be the effect of my amendment as I have moved it. If my amendment is carried the present section will remain, and it provides for the penalty.
– It would leave it optional with the adjudicator to make the penalty what he pleased, from1s. up to £100. In the proposed new section a minimum penalty of £2 is provided for in the case of a person making a false statement in a return.
– How is the offence to be proved ?
– It has to be proved at the present time before any punishment can be imposed, and the objection of the Minister is that under the present section it is almost impossible to prove the attempt to wilfully deceive in making a false statement. I personally consider that the existing law is fairly watertight without this amending provision. It appears to me that by passing this Bill we shall be making it rather a dangerous matter to send in anyreturns at all.
.- I ask leave to amend my amendment by moving the omission of paragraph b only.
Amendment, by leave, amended accordingly
.- I am disposed to support the amendment submitted by the honorable member for Hunter (Mr. Charlton). I sympathize with the Minister inthe fact that it is extremely difficult for the Commissioner of Taxation to sheet home a false statement to the guilty party. But the proposed new section is very far-reaching, and very grave injustice might arise under it. The majority of people on the land, including even those who are in a fairly large way, do not keep books. They depend upon bank managers, and commission and other agents in towns and villages adjacent to their properties to make out their returns for them. It is now rather an expensive business in many cases for people to have these income tax returns made up, and with this new provision making the agent liable also, it will be a rather risky business for persons making up the returns of others who do not keep books.
.- I have consulted the Minister in charge of the Bill, and also the Commissioner of Taxation, and I find that in such cases as those to which I referred, there would be no possible chance of imposing a penalty. I understand that such cases are very numerous, and the purpose of this amending provision is merely to put the Taxation Department in a position to impose penalties where people have wilfully made false returns. Under the existing law it is almost impossible to prove that false statements in the returns have been made wilfully. People who make these false returns will continue to try to evade taxation unless some penalty is attached to their action. I am satisfied with the assurance I have received from the Minister and the Commissioner.
– The Minister might also assure the Committee.
– I hope that he will make the same explanation to the Committee that he has made to me. He has satisfied me that the Government are asking for the amending provision merely in order to protect the Treasury, and with no idea whatever of penalizing those who may have unwittingly made a mistake in the preparation of their returns.
.- I have listened with the greatest interest to what the honorable member for Wide Bay (Mr. Corser) has said. I was anticipating that after the honorable member sat down the Minister would be equally frank with the Committee. I object to these secret conferences between Ministers and prominent supporters! They do not bind the Taxation Department at all. But any words fromthe Minister in charge of the Bill would, perhaps, receive some passing acknowledgment from the gentlemen intrusted with the administration of the law. For that reason I shall be glad if the Minister will make to the Committee the statement which he has made to the honorable member for Wide Bay.
– I have already mentioned that the Commissioner of Taxation will regard with a great deal of leniency any offence that has not been deliberately intended. The honorable member for Wide Bay asked me about the matter, and I told him what I had already told the Committee. I did not consider it was necessary torepeat my previous statement to the Committee. But now that I have risen again, I will say that the section which this clause proposes to amend is a very difficult one to enforce. I do not believe that any cases under it have ever reached the Court. There have been cases in which sums of money running into many thousands . of pounds have not been included in returns. Men in a big way of business very often employ agents tomake up their returns. We can very seldom hope to get a conviction against a man who, when charged with having wilfully and knowingly made a false statement in an income tax return, is in a position to say that the return was made up by an agent. For that reason it has been considered that it is necessary to do in connexion with this measure what we have already sanctioned in connexion with the Customs Act and other Acts in order to protect the revenue.
Question - That paragraphb, proposed to be left out, stand as printed (Mr. Charlton’s amendment) - put. The Committee divided.
Question so resolvedin the affirmative.
.- I hope the legal members of the Committee will correct me if I am wrong in saying that an entirely new principle is introduced into our legislation by paragraph c of clause 40, in which it is proposed to provide that a penalty of “not less than Two pounds” shall be imposed. In the Customs Act we find, at the end of each section, the words “Penalty, £100 “; “ Penalty, £50 “; and so on.
– That, under the Acts Interpretation Act, is the maximum penalty.
– Quite so; and the magistrate dealing’ with a case under the Customs Act may fine the defendant any sum below the penalty set out in the section. We are anxious that magistrates dealing with offences under this measure shall have full power to impose whatever penalty they think fit, provided that the maximum is not exceeded. If they think that an offender should be fined only 10s., they should have the power to do so. Here, however, it is proposed to compel magistrates to fine the defendant in a prosecution under section 58 of the principal Act not less than £2. I do not think a magistrate should be put in such a position that he might be tempted to dismiss a case rather than fine the defendant £2, when he thinks he ought not to be fined more than 10s. I moves -
That paragraphc be left out.
.- I cannot see why the magistrates should not be trusted outright. The Acts Interpretation Act is very clear as to the meaning of the maximum penalty. It simply means that the magistrate has a discretion up to the limit of the amount stated in the Act. I do not know that it is wise to limit him. It is possible, as the honorable member for Capricornia (Mr. Higgs) says, that he may be tempted, if he does not think the offence is worth a fine of £2, to wipe out the fine altogether, and that is not what we want. We want the penalty to fit the crime, and the best man to decide that is the man who tries the case. I do not suppose the Minister cares whether the proposal is carried or not.
– I think it is desirable on the facts before me to carry it.
– We are asked to do something entirely novel in Federal legislation.
– It is not novel. There is a provision for a minimum fine of £5 under the Entertainments Tax Act, with a maximum of, I think, £100.
– Then the proposal is not novel; but, as we are not familiar with the facts, I should like to know what is in the Minister’s mind.
– I, also, am curious to hear what the Minister has to say. My experience is that where the maximum fine is £100. magistrates take the view that in every case where there is to be a conviction there must be a really substantial penalty.
– The proper course then seems to be to change the magistrates and not the law, which is very explicit.
– I rather agree. There is a heroic movement on foot in Melbourne to, change the magistrates; and I hope, though I say it with fear and trembling, that it will be successful. The effect of putting in a small minimum would be to induce magistrates in many cases to impose only the minimum penalty. A week or two ago, a case was tried in Melbourne under the Entertainments Tax Act, in which the Police Magistrate, having heard the evidence, fixed the penalty at 40s. The officer of the Crown Law Department told him he had no power to do so as the minimum penalty was £5. The magistrate then made the penalty £5, although he had declared that in his opinion 40s. would be an adequate penalty. He was obliged by the Act to make the penalty £5, which is a very anomalous position. If we are fixing a minimum, let us by all means fix a low one; but I am curious to know what is in the mind of the Department in regard to this proposal.
.- I understand the object of inserting a minimum is to make the penalties as nearly uniform as possible in every State.
At present, a magistrate in one State may find the defendant guilty and yet refuse to inflict a penalty, or, perhaps, whilein another State another magistrate imposes a penalty of £2 for exactly the same offence. The magistrates will still have the right to go above the minimum.
.- The honorable member for Wide Bay (Mr. Corser) has stated the reason for the proposal. We want some uniformity in the penalties, and that uniformity does not now exist. Some magistrates impose a fine of1s., and others of £3. If we insert a minimum of £2, it willbe some guide, and the honorable member for Batman (Mr. Brennan) knows that magistrates must have something to guide them.
– Just now the Minister, in getting paragraph b assented to, said that taxpayers would not be proceeded against for mistakes that were not intentional. Does he then propose to ask for a minimum fine of only £2 for fraudulently false statements?
– Parliament has already given the Courts power to impose a fine of up to £100, which gives the magistrates a very wide discretion. Before 1904, the practice was always to insert a minimum for guidance - I think I may say that that was so in criminal legislation generally - but, for the sake of brevity in drafting Acts, we followed the precedent established, I think, by the late Mr. Kingston in South Australia, by putting at the bottom of the section a sum which would be the maximum within which penalties might be imposed. The removal of the minimum in some cases worked badly, because it led to varying penalties, as I have stated, in cases where the merits were practically similar. What has been done is to take the character of offences covered by this section. It is thought that the Commissioner will not decide to prosecute unless the merits are fairly clear. If he does, it is a case in which a minimum penalty of £2 should be imposed. Under the previous clause he may have considered that a penalty of £1 a month should be imposed, but may decide not to take action under that clause, and to prosecute under this clause. If he does, the penalty of £1 under the previous clause is not imposed.
– Can you imagine any case of real fraud which a penalty of £2 would meet?
– There will still be a discretion to fine up to £100.
– The Minister said this clause would be used only in case of fraud.
– I did not say “ in cases of fraud,” because “ fraud “ has a technical meaning. I meant that neither this nor the last section would be availed of unless there were clear merits to show that the man ought to be convicted. The Commissioner does not prosecute in every case. Where he finds that an offence has been committed and discovers the offender, he gives him notice in every case. It may be to correct something or give him an opportunity to explain. If a prosecution is begun, it means that on the merits the Commissioner thinks there should be a conviction, in which case there should be a penalty of at least £2. The present law on the subject has been working so irregularly that there is a feeling in the community that justice is being rather unequally administered.
.- I understood the Minister to assure the Committee that proceedings would only be taken in cases where, although fraud could not be proved, it was quite clear in the mind of the Commissioner. If that is the case, we should leave the penalty clause as it stands in the Act.
– I presume that the honorable member means cases where there has been deception, and not a purely involuntary offence.
– Any deception should be heavily punished, and- we should not give any guidance to magistrates to impose a minimum penalty.
– One magistrate may impose a penalty of 5s., and another may make the fine £5.
– The magistrate who would impose a penalty of 5s. or £5 in a case of fraud would not be fit for his job. Some honorable members, in view of the Minister’s previous explanation, might apprehend that the proposed administration ‘ of the Act would notfollow the lines indicated by the Minister.
– There will be no prosecution unless the merits are fairly clear to the Commissioner.
– In that case we should allow the section to ‘stand, with the maximum penalty only stated.
– But there are other offences in the section.
– I am aware of that, but they are serious offences, dealing with neglect or refusal to attend to give evidence, or with failure to answer any questions, or produce any books or papers required. These are not trifling offences for which a minimum penalty should be fixed as a guide. I hope that the . Minister will reconsider the provision, and not ask the Committee to go to a division on the matter.
.- The Minister is endeavouring to attain the unattainable in seeking to have all magisterial decisions uniform. A great deal depends upon the magistrate, and upon his state of mind, and the hour of the day. A very judicial-minded gentleman who was Chairman of the Tariff Commission would say very politely to the witness at 10 o’clock in the morning, “ What is your name, please; will you kindly take a seat?” but at 3 o’clock in the afternoon, when a witness appeared, he would say veryabruptly, “What is your name? Sit down.” We can imagine a magistrate inflicting a fine of 10s. in the morning, and after dinner inflicting a fine of £2 or more for the same offence. I quite agree that we should allow full discretion to every magistrate, because we cannot get uniformity. If the Minister gets uniformity in regard to the £2 penalty, he will not get it in regard to fines ranging higher than £2.
– This particular point was discussed by the Conference of Taxation Commissioners, and the representatives of the States, being concerned with State legislation, made a strong recommendation for the inclusion of this provision, owing to the great effect the irregularity of the penalties imposed has had upon the administration of the tax.
.- Persons can be penalized by a minimum fine of £2 if they do not send in returns in connexion with the bachelor tax, for the collection of which this Bill provides the machinery. In order that the Commissioner may ascertain the taxpayer’s liability to pay the heavier rate imposed by the bachelor tax, which was passed last year, each person must send in a return, and if he fails to do so is liable to the penalties in the clause with which we are now dealing.
– That is not correct.
– The Minister knows that there is no other machinery for the collection of the bachelor tax. I object to the clause, and I shall , vote against the fixing of a minimum penalty. I believe discretion should be allowed to the magistrate.
– Section 28 provides for returns by persons with incomes over a certain amount. The tax will not apply to persons who are not called upon to make returns. ,
– In this Bill, it is distinctly stated that nothing in that section shall relieve any person of his liability to pay income tax under any other provisions of the Act.
– In the other Acts, “taxable income” means income of a certain amount.
-It states £5 or 5 per cent., whichever is the greater. I object to this fixed penalty; but, of course, the Government, with their majority, will be able to pass this proposed new paragraph, as they were able to pass the bachelor tax, which they have not yet put into operation. We are now within seven weeks of the end of the financial year, and I am anxious to know what the Government propose to do in regard to that tax”; after having whipped up their followers to pass the measure which, apparently, they have now abandoned. I object that persons taxable under that Act should have imposed upon them a penalty set forth in this measure, and I shall vote against the £2 penalty.
Question - That paragraph c proposed to be left out (Mr. Higgs’ amendment), stand as printed - put. The Committee divided.
Majority . . . . 11
Question so resolved in the affirmative.
Clause agreed to.
Reprint of Members’ Speeches: Seizure by Military Authorities - Lands Acquisition (Defence) Bill - Enlistment: Age Limit and Parental Consent : Alleged Compulsion by Employees.
Motion (by Mr. Watt) proposed -
That the House do now adjourn.
– I ask the Acting Prime Minister (Mr. Watt) if he will be good enough to see that the reprint of speeches, belonging to me, and seized by the Defence Department, are returned. Many reasons have been given for the seizure of those parcels, and every one of them has absolutely fallen to the ground.
It was at first stated that the printing of the coat-of-arms on the front page was illegal; but this matter having been referred to the Crown Solicitor’s Office, the Crown Solicitor stated that no breach of the law had been committed.
Secondly, the Government initiated two prosecutions, the first charging that the reprint was likely to prejudice His Majesty’s relations with a foreign Power. That issue, on public trial, has been found invalid as a matter of fact, and the question was thus beyond any possibility of appeal.
Thirdly, it was charged that the reprint was seized upon an inducement to the Government Printer to break the censorship regulations; and the magistrate, upon public trial, dismissed that case.
Then Senator Pearce, when all the legal grounds had been dissipated, and when again challenged in the Senate on this interference and seizure, gave as his justification that there was a quotation in that speech from a proGerman publication. That was just one of those falsehoods which a weak man, who has not got a reason, and who has not the courage to admit that he has made a mistake, at times falls back upon.
In regard to this so-called pro-German publication, Senator Pearce made two points - first, that the publication was pro-German; and second, that the article in question was written and produced in the publication before America entered the war. Senator Pearce, apparently, put forward the second reason as accounting for the fact that such an article had appeared in an American newspaper, his insinuation being that it could not have appeared after America had entered the war, because America and Japan were then allied.
It has taken some weeks to drag any kind of explanationfrom Senator Pearce in this respect. I asked what was the proGerman publication referred to, what was the date of the article, and what was the article of which he complained. After quite a number of attempts, Senator Pearce has at last given his answer, such as it is. He says, “ I have made a mistake ; this article wasnot produced before America entered the war; I was wrong in that respect.” He says the paper is the Chicago Tribune, and that he imagined it was a pro-German publication because of the nature of the article. The Chicago Tribune is known as one of the most powerful newspapers in the world, if not, as I was going to say, the most powerful; at any rate, I believe it has the largest circulation of any newspaper.
– Who controls that newspaper ?
– Mr. Medell McCormack, a Congressman for the State of New York, is chairman of directors. He sits in the House of Representatives, elected, I believe, at thehead of the poll for the whole State, as one of two alternate representatives; and, although sitting in that House, has, under the American arrangement, a kind of roving commission. Mr. McCormack complained of America’s insufficient preparations in connexion with the war; and, after an agitation, brought about the visit of a Commission, of which he was chairman, to the Italian and French Fronts, which came back with a report admitted on all hands to have greatly accelerated the assistance of America to the Allies.
Senator Pearce now admits that on one point he is wrong, and that the article was not written bef ore, but since, America entered the war.
On the other point of the nature of the publication, my position is strengthened by the Acting Prime Minister, for, when I rose to-day to ask if- he would push this matter to some definite conclusion in order that Senator Pearce might substantiate what he had said, or withdraw it like a man, the honorable gentleman in his opening remarks referred, in probably more glowing terms than I could use, to the power and influence of this American journal.
– It is one of the most powerful journals in the United States.
– And I think you know sufficient to be able to say that it is certainly a pro-Ally newspaper.
– What is the good of referring again to the question now? You brought up the question before, and I promised to make inquiries.
– I am not on that phase now, but dealing with the points one after the other.
– We reported progress because honorable members desired to go home.
– I shall not keep the House more than a few minutes, and only take this opportunity because I shall not be here on the adjournment tomorrow.
– I am grateful !
– This seizure took place about two months ago. It was admitted that, of these reprints, 4,500 were still being held in the. Department, although all the legal points raised in favour of the seizure had been beaten. Then there was the point as to the coatofarms, and the absolute failure of the two prosecutions, without the defendant being called upon to go into the box. Now, on the admission of Senator Pearce, and according to the statement of the Acting Prime Minister, the contention as to this being a pro-Germanpublication has disappeared. There is absolutely no grounds in the world for the retention of these reprints.
– Would it be fair to ask the honorable member what he proposes to do with the reprints.
– I propose to circulate them mainly in my electorate.
– That is hardly fair to the honorable member.
– That is just one of those little, jokes of the honorable member which can be accepted in the same good humour as that in which he laughingly submits it. All I now say is that this seizure resolves itself into neither more nor less than a pure act of common theft ; ‘ it has no legal ground or basis. I have waited for some considerable time to see whether the Defence Department, or whatever authority controls the matter, would have the common decency to return the parcels seized in these parliamentary buildings without any legal warrant or justification.
– You have remarkable faith if you expected anything of the kind!
– I say quite candidly that I am anxious to circulate this statement, for the reason that it contains what I conceive to be Australian Labour’s attitude towards this war. The reprints are intended primarily for circulation in my . electorate. I therefore hope that, as all these grounds for the seizure have now fallen, the Acting Prime Minister will-
– Let the matter drop.
– There is another point. There is a bill from the Government Printer for £12 odd, which I informed him he had better submit to the Speaker’s Department, since those goods had been delivered to an officer of Mr. Speaker, and were never delivered to me.
– I think Mr. Speaker ought to pay it out of his salary.
– And, if the Government Printer would deliver to me my order for copies of the reprint, I added that I should be very pleased to pay for them.
– You ought not to be asked to pay that bill.
– That is a very sensible and statesmanlike utterance from the honorable member, and, having gained that much sympathy, I shall close by again asking that the speeches be returned to me, there being no justification for their retention.
.- I desire to make a personal explanation. When the Lands Acquisition (Defence) Bill was being debated in this Chamber a few nights ago, I said that I intended to vote against the second reading. I find that the division was taken during my temporary absence, and, not expecting to be long away from my seat, I was unfortunate enough not to have obtained a pair. In the division list I note that I am put down as having paired in favour of the Bill, whereas if I had been here I would have voted against it.
Mr.CONSIDINE (Barrier) [10.59]. - I desire to say a few words with respect to the action of the Defence Department in connexion with the removal of the prohibition by guardians of those under age who desire to enlist for service overseas. I intend to quote a letter from a Moama resident which will show how the business people of Melbourne are treating lads who are just becoming of military age. This is written by a youth who recently, came to Melbourne from Moama looking for work: - 239 Lonsdale-street, Melbourne.
My dear Mother,
Just a few lines to let you know that I am in the best of health, and hoping to hear that you are the same. Well, mother, I have a bit of crook news to tell. I went to Swallow’s, and they said they were only employing sixteen to seventeen years, and would not start me.
– One swallow does not make a summer.
Mr.CONSIDINE.- No, but this swallow might make a stir. The letter continues -
I told them I was on holidays, and my time was up to start Monday night. But they said they were putting off those who are of age. But I suppose I will get another job sooner or later. 1 hope so, anyway. I have been to a couple of places, and they said I was a bit too old for what they want me to do, but that I was good enough to go to the war.
This lad is 17 years of age. His letter continues -
If I had known this, I would have taken on Moreland. But I suppose it is taken. I will give it this week, and if nothing crops up I will have to take the war on. I am a bit too old now.
If you say you are seventeen, they will give you 15s. and find yourself; and if you say eighteen years, “ Go to the war.”
This shows that such things are taking place. There has been a lot of discus sion regarding the economic conscription of those over twenty-one years, who can please themselves whether they go or stay home from the war. Things like this come from patriotic employers, such as the individual who gave a lad two hours off on. Anzac Day, and then docked those two hours from his pay. That occurred in another establishment in Melbourne.
We have seen in the press that there have been a number of youths of eighteen who, by reason of the removal of the prohibition, have joined the Forces. But if this kind of thing is going on, and the Government allow it, lads of about that age will be forced out of employment in the same way as unscrupulous employers have forced older men out to make them go to the war. In view of the promises of the Government at the Recruiting Conference that no economic pressure would be brought to bear to force recruits into camp, it is up to them now to give those employers in Melbourne and elsewhere the hint that their actions are contrary to Government policy.
. - One phase of the subject brought before the House by the honorable member for Cook (Mr. Catts) has been passed over, which should be kept in mind by those having the ultimate decision in the matter. I have not had an opportunity of reading the reprint of the honorable member’s speech, but I understand that it contains the same reference to one of the Allies as that which appears in the official Hansard. If that is so the release of the documents is not so easy as the honorable member would have the House believe.
– That has been dealt with at a public trial.
– And in a way which, it seems to me, makes it necessary for the Government to consider seriously before they associate themselves with the release of the pamphlets.
– The Court dealt with it in no very complimentary way, from the viewpoint of the honorable member for Cook (Mr. Catts).
– It was shown that there was no legal justification for it. It was a bit of nastiness by Bryant.
– The finding of the Court, as I read it in. the full reports of the Melbourne papers, was most offensive to the honorable member for Cook (Mr. Catts), and embodied the curious point of law that a statement coming from one person might be entirely innocuous, which, coming from another, would be likely to provoke international disturbances.
– That statement was made by Bryant, who was paid by the Government to act as prosecutor.
– I am speaking on the authority of the report I read in the Melbourne newspapers. The words were so extraordinary that they live in my memory. In those circumstances, I feel that the Government would be taking a considerable risk if they associated themselves in any way with statements which were declared to be innocent only because of their source.
– In reference to the representations of the honorable member for Barrier (Mr. Considine), and the letter he read regarding an apparent case of what, I think, is falsely called economic conscription, the Government have no hesitation at all in saying that they do not believe in pressure of that description. We have said so before, and I say so now. ‘
– You know that it is going on.
– I do not know that it is going on. *
– The honorable member must be very blind.
– I am not idle like the honorable member. I am busy with other essential things. If I knew that economic conscription was taking place, I should say so. I do not wish the House to imagine that the conduct of which the honorable member complains is general. He implied that all the employers were embarking on what he called an unpatriotic course of action. I do not believe that. At the Recruiting Conference representatives of the employing class adopted most cheerfully the undertaking of the Commonwealth Government that there should be no economic conscription; and, so far as I am aware, they ‘ are, through their organizations, giving effect to that undertaking. It is the wish of the Government that the promises made at the Conference shall be observed, and we shall endeavour to see that that is done. I ask the honorable member to accept that assurance. I would remind him that he has- not yet, proved that the statements made in the letter he quoted are correct, and he is old enough to know that one story is good until another is told.
In regard to the complaint of the honorable member for Cook (Mr. Catts), I remind the honorable member that what he tried to do in this House was, in the judgment of a majority of members, reprehensible.
– That was a view taken by a party division.
– The honorable member tried to do through the agency of Hansard and a reprint from Hansard, what he knew he would not be permitted to do outside this House, and his action had special reference to the relationship of this country, with an Ally of ourselves and Great Britain. He knew very well that, had he uttered on the public platform the sentiments to which he gave expression in the House respecting that Ally, the censor, for legitimate military reasons, would not have permitted their publication in the press. But the honorable * member carnie to this House, and, in the exercise of a privilege that is very often abused, sought to get a reprint of his speech in the House for circulation in his own electorate and perhaps elsewhere.
– He was bound over by the Court not to repeat the statements.
– That is so ; and I remember that, on two occasions I, as a Minister, .begged the Chair not to allow those references to be made by the honorable member. His conscience is not satisfied by any proclamation of what his own. belief is. The honorable member knows that this country is at war, and if there is to be a censorship at all– and we all agree that there should be - for military reasons certain things ought not to be expressed or published.
– I believe that I am doing perfectly right.
– Then I say the honorable member is deaf to the teachings of this war, and, with very great respect to hi3 views, I say he is blind to the dangers of indiscreet utterances, which may be serviceable to the enemy and hurtful to our Allies. I cannot hold out any hope that the reprints of his speech will be released. That is my own view; but it is not fair to spring such a question on me at the termination of the sitting, and expect me to give an answer. I promise that I shall obtain the views of my colleague who presides over the Defence Department.
Question resolved in the affirmative.
House adjourned at 11.10p.m.
Cite as: Australia, House of Representatives, Debates, 8 May 1918, viewed 22 October 2017, <http://historichansard.net/hofreps/1918/19180508_reps_7_84/>.