House of Representatives
10 May 1918

7th Parliament · 2nd Session

  1. House of Representatives
  2. 7th Parliament
  3. 1918

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

Quorum formed.

Mr. Speaker read prayers.

page 4600

QUESTION

ENLISTMENT OF BOYS OF EIGHTEEN

Mr BRENNAN:
BATMAN, VICTORIA

– In view of the public criticism aroused by the arrangement for the enlistment of boys of eighteen without the consent of their parents, I ask the Acting Prime Minister whether he proposes to insist on this great children’s offensive?

Mr WATT:
Treasurer · BALACLAVA, VICTORIA · NAT

– I regard the phrasing of the question as insulting.

Mr SPEAKER:

– Questions must be couched in respectful language. I cannot allow to be put questions of an offensive nature.

Mr BRENNAN:

– Will the Acting Prime Minister take into favorable consideration the propriety of enlisting, instead of persons who, when the war commenced, were children under the age of fifteen years, men who then were under the age of forty-five years, but have since passed over the safety line?

Mr WATT:

– The matter has been considered, and representations urging an extension of the age limit have been made to the British Government.

page 4600

QUESTION

PREMIERS’ CONFERENCE

Mr WEST:
EAST SYDNEY, NEW SOUTH WALES

– Has the Acting Prime Minister read the reports of the Premiers’ Conference, now sitting in Sydney ? There are a couple of little matters in regard to which hemight be able to remove a bad impression when he attends on Monday. Sir Richard Butler is reported to have said that he’ would not climb down to the Commonwealth in any way. Is there no provision in the War Precautions Act to deal with rebels ? The next question is-

Mr SPEAKER:

– Only one question in ay be asked at a time.

Mr WATT:
NAT

– My answer to the question already asked is,” Yes.”

page 4600

QUESTION

ABSENCE OF QUORUM

Dr MALONEY:
MELBOURNE, VICTORIA

– Has the attention ofthe Acting Prime Minister been drawn to a statement in to-day’s newspaper regarding the absence of quorums, and will he inform the press of Australia that the Speaker, the Chairman of Committees, and the officers of the House are supposed to be blind to the absence of a quorum, and are not allowed to draw attention to it?

Mr WATT:
NAT

– It seems to me that the matter is one, not for the Government, but for the authorities of Parliament to consider.

page 4600

QUESTION

RETURNED SOLDIERS’ INSTITUTE

Appointment of Civilian

Mr SINCLAIR:
MORETON, QUEENSLAND

– I wish to know from the Minister representing the Minister for Repatriation whether a civilian has been appointed to take charge of an industrial institute for returned soldiers in Queensland?

Mr GROOM:
Minister for Works and Railways · DARLING DOWNS, QUEENSLAND · NAT

– The Minister informs me that he has learned that a Mr. McMinn, who is not a returned soldier, has been appointed manager of a returned soldiers’ institutein Queensland, and that the soldiers who were attending the institute have absented themselves by way of protest. My honorable colleague believes that the institute has received a subsidy from the Queensland Government, but he is unable to say by whom appointments connected with it are made. The bringing of all such institutions under the control of the Commonwealth Government is being considered.

page 4600

QUESTION

TARIFF: PROTECTION

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

– Does the Government propose, at any time during the life of the present Parliament, to introduce a tariff for the scientific protection of Australian industries?

Mr WATT:
NAT

– I do not expect to be in charge of the Government for the life of this Parliament, nor do I know how long that life will last. Therefore I am not disposed to hypothecate the policy of the Government by promises extending to an indefinite future.

page 4600

QUESTION

COMMONWEALTH POLICE FORCE

Mr WEST:

– Has the Government abandoned the Commonwealth Police Force?

Mr WATT:
NAT

– No.

page 4601

QUESTION

PACIFIC ISLANDS

Dr MALONEY:

– In the Age of the 4th May, the Acting Prime Minister is reported as having spoken of the Pacific Islands as being ‘ ‘ within naval striking distance of Australia for an enemy that would eventually challenge white rule in this country.” Is not this statement likely to be taken as an insult to Japan, whose actions as our Ally have been as noble as washer conduct in the Boxer rebellion ? Is it not to the cursed cancer nation called Prussia that the Acting Prime Minister was referring?

Mr WATT:
NAT

– The honorable member is forming a desirable habit, which I hope other honorable members may copy when they wish to ask difficult questions without notice, of giving a copy, a few minutes beforehand, of the question that he wishes to ask. I understand that the passage which he has quoted was taken from the report of an utterance made by me at Dandenong last week in connexion with the Flinders election. It is clear that what I was referring to was the suggestion of some persons in this country that it would be wise to offer to return to Germany, as a condition of peace, her oceanic possessions which Australia and New Zealand have helped to capture. I was showing what a danger it would be to Australia ifgreat naval bases were established within striking distance of this country. I regard it as an important condition that Australia should insist, so far as it can insist, on the retention of those islands for the future safety of her coastal trade. I did not intend any reflection on our Ally, Japan. I had in mind, rather, an enemy nation that, through mistaken views prevailing at the Peace table, might eventually jeopardize the safety of Australia.

page 4601

QUESTION

END OF SESSION

Mr HIGGS:

– Is there any truth in the common report that it is the intention of the Government to close Parliament within four weeks? Is there not sufficient urgent legislation to require that we should be kept here for three or four months ?

Mr WATT:
NAT

– I am glad to notice the repentance indicated by the question. Enough attempts have been made to frustrate the doing of business bythe Government. We have made no complaint;but we have had to meet two censure motions, and yesterday we had the adjournment moved, although it was grievance day - an almost unheard-of proceeding. There has been a waste of time-

Mr Brennan:

– The honorable member must withdraw that statement.

Mr WATT:

– I withdraw it.

Mr Austin Chapman:

– It is true all the same.

Mr WATT:

– Irecognise that there are many things which cannot be said in Parliament, but which we may think in our own minds. As to the common report referred to, I know, nothing of it.

Mr Higgs:

– The honorable member for Grampians said that you wrote to him to the effect that you were going to close up in a fortnight.

Mr WATT:

– I did not so write to that honorable member, and I do not think that he said I did.

Mr Higgs:

– It is so stated in the Age to-day.

Mr WATT:

– The honorable member must allow me to answer the question. I do not know whether the honorable member for Grampians said what he is alleged to have said, though I doubt it ; at any rate, I know I did not write what an honorable member is reported to have said I did. When the Government is able to indicate to honorable members generally what itsproposals are in relation to the session, it will do so in open House, and not trust to common report to inform them.

Mr HIGGS:

– I neither wish to misrepresent the Acting Prime Minister (Mr. Watt), nor to be misrepresented by him; and I may be permitted to explain that I based my question on a statement published in the Age, over the name of Mr. H. Glowrey, the acting secretary of the Victorian Farmers Union. In that communication, Mr. Glowrey says -

I hereby append a statement made by Mr. Watt, Acting Prime Minister, to Messrs. Allan and Weaver, M’s.L.A., at Federal Parliament House, in the presence of Mr. Edmund Jowett,M.P., on the 2nd May.

The statement is to the effect that there was this private interview with the Acting Prime Minister, who said he could not pledge the Government with regard to suggested legislation, but he expected the present sittings would close within four weeks, with the prospect of a spring session some time in August, when he would introduce certain measures. Does the Acting Prime Minister think it is necessary to adjourn for any period of the kind? Why should we not go right on?

Mr WATT:

– I shall not, of course, deal with the personal explanation made by the honorable member. I must say, however, that the publication of that letter to which he has referred is the grossest breach of faith I have ever been associated with or have known in parliamentary or public life - that, I am bound to say, whoever may be responsible for the breach. I do not blame the honorable member; the man who, signed the letter is, apparently, the man who is guilty. That letter contains a document, which, asthisgentleman properly observed, was written at my request by the honorable member for the Grampians (Mr. Jowett), and it correctly described my expectations at that particular time. But, as I said to the honorable member for Capricornia (Mr. Higgs) a moment ago, as soon as the Government is able to determine how long the present sittings will last, and what measures are to be dealt with, it will inform the House generally.

page 4602

CONSCRIPTION OF ITALIANS

Stoppage of Telegram

Dr MALONEY:

– I should like some explanation in regard to the stoppage of a telegram which the Italian residents of the Commonwealth desired to send to the Italian Government in reference to the Italian Consul here. If the telegram is stopped, the Government might, at any rate, return the £16 which the Italian people paid for its transmission.

Mr Brennan:

– That’s it! Stick to the money, and never send the wire!

Mr SPEAKER:
Mr WATT:
NAT

– The honorable member for Batman (Mr. Brennan), not content with interjecting, takes it upon himself to answer questions. If the honorable member for Melbourne (Dr. Maloney) will give me the particulars of the case, I shall inquire, because I do not approve of the retention of the fees if messages are not sent.

Mr BRENNAN:

– Is the Acting Prime Minister, as “head of the ‘Government, . prepared to send direct representations, on behalf of the Italian residents in Australia, to the Italian Government in regard to the Italian Consul in Australia ?

Mr WATT:

– I propose, in all matters in relation to our Italian Allies, to do our business through the properly -constituted authority resident in Australia.

Mr Brennan:

– Have the Italian peopleno redress against the Consul ?

Mr FINLAYSON:
BRISBANE, QUEENSLAND

– Will the Acting Prime Minister kindly inform the House whether any machinery exists which would allow people in Australia, who come from other than British countries, to make representations to their home Governments in regard to the Consuls who represent those Governments in Australia ? As an illustration, the Italian residents in Australia wish to protest to the Italian Government against the action of the Italian Consul in Australia ; and I should like to know whether there is any machinery to enable them todo so.

Mr WATT:

– I could not say; but if the honorable member will give notice of the question, I shall be glad to have inquiries made.

page 4602

QUESTION

ENLISTMENT OF BOYS OF EIGHTEEN

Mr BRENNAN:

– With reference to the enlistment of infants, in spite of the protest of their parents, will the Acting Prime Minister permit this House to discuss the question and take a vote on it ?

Mr WATT:
NAT

– There is no enlistment of infants properly so-called. There is a proposal to enlist minors, whom the honorable member, as a lawyer - or as a legal practitioner - may be able to distinguish from infants. As I have already intimated to the honorable member for Dampier (Mr. Gregory), there will be an opportunity on the general Defence Estimates to discuss the matter.

Mr Brennan:

– But the Government are seizing the children in the meantime !

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

– Debate cannot arise out of answers to questions.

page 4602

RECRUITING STATIONS

Appointment of Inquiry Clerks

Dr MALONEY:

– As a member of the Recruiting Committee of Victoria, I should like to make a statement in regard to the appointment of inquiry officers at recruiting stations in Melbourne.

Leave granted.

Dr MALONEY:

– As a member of the Recruiting Committee, I resent very strongly an ill-advised telegram which has been sent from Sydney, ordering the appointment of two inquiry officials, one at the Town Hall enlisting depot and the other at the offices of the Committee. In my opinion there is no necessity whatever for any such appointments. Mr. Gillespie, and those associated with him, have done splendid work, as will, I am sure, be admitted by the Minister who represents the Minister for Defence. Never have I known of a rebuff to any person whom I have sent down to the recruiting station or the offices on business. I suppose that each of these men will be paid at least £4 a week, and their sole duty will be to inform recruits as to what they ought to do. At the present time there are numbers of officers, both at the station and at the Committee room, and I regard the appointment of these two new men as a personal affront to the members of the Committee .

Mr Boyd:

– Who sent the telegram ?

Dr MALONEY:

– The Minister for Recruiting (Mr. Orchard), The whole position is ridiculous ; and I am sure there is not a member of the House who would desire to offend a man like Mr. Gillespie, who has done such splendid work right through. Any person who has the slightest doubt as to the value of the services of Mr. Gillespie and his associates has only to apply to the Director-General of Recruiting.

Mr Fowler:

– Were there no men at the Town Hall previously to answer inquiries ?

Dr MALONEY:

– Yes ; and the officers have always been found most courteous. I do not wish to speak of another matter, but I may say that a. certain gentleman did go down to the recruiting station and, though he had not the courtesy to give his name to Captain Dyett, he expected to be attended to hand and foot.

page 4603

KINGOONYA WELL: COMPENSATION CLAIM

Mr.JOHN THOMSON (for Lord Forrest) asked the Minister for Works and Railways, upon notice -

With reference to the claim now being considered from Mr. Teesdale Smith for water from a well at Kingoonya- (a) What is the total amount of the claim, and for what service is the claim made; (b) What amount has already been paid for all the claims made; (c) What amount has been paid to Mr. Teesdale Smith ?

Was this water paid for of any value other than to the constructors of the railway, or to the employees employed directly by the Crown?

If so, of how much value?

Mr GROOM:
NAT

– As this matter is the subject of legal proceedings, it is not desirable to make public certain of the information asked for,but I may say that claimants have been paid £119 for water taken by agreement. They have claimed £4,747 for water taken prior to acquisition of the property, and a claim has been received for £102,934 in respect of the land acquired and severance, which, it is understood, does not include alleged loss of water owing to acquisition of the property.

page 4603

QUESTION

COMMONWEALTH SHIPS

Mr HIGGS:

asked the Acting Minister for the Navy, upon notice -

  1. Having reference to the report by the Minister that the steamships of the Commonwealth line made twenty-three voyages between October, 1916, and October, 1917, did. the whole of the fifteen Commonwealth steamers make these voyages, or only portion of them?
  2. Have any of the fifteen vessels purchased by the Prime Minister been sold or otherwise disposed of?
  3. Have any of the Commonwealth steamships been submarined or otherwise sunk; and, if so, why has the in formation been withheld from the public of the Commonwealth?
Mr POYNTON:
Honorary Minister · GREY, SOUTH AUSTRALIA · NAT

-The answers to the honorable member’s questions are -

  1. The fifteen Commonwealth steamers did not all make voyages up to the date named, because at the time they were purchased several of them were under charter, and we did not obtain delivery of them until expiration of these charters.
  2. No.
  3. Two of the steamers have, unfortunately, been torpedoed and sunk.

It was not considered advisable, in the public interests, to give earlier intimation.

“RYAN THOUSAND.”

Mr FINLAYSON:

asked the Assistant Minister for Defence, upon notice -

  1. Has he noticed the reports of a successful meeting held in Brisbane last Wednesday night, when the Minister for Recruiting was present, and announced the formation of a “ Ryan Thousand,” so named in compliment to the Premier of Queensland?
  2. Will the Minister explain the essential difference between the organization of a Scottish Thousand, and providing them with khaki kilts, and the organization of a “ Ryan Thousand,” and equipping them with khaki knickerbockers ?
Mr WISE:
Honorary Minister · GIPPSLAND, VICTORIA · NAT

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

  1. Yes, but does not know if report is correct.
  2. The attitude of the Government on this has been announced to the House.

page 4604

QUESTION

REFERENDUM AND INITIATIVE

Dr MALONEY:

asked the Acting Prime Minister, upon notice -

Will the present Government introduce a Bill to make law the Referendum and Initiative; if not, will an opportunity be given to a private memberto do so?

Mr WATT:
NAT

– The Government has not considered the matter.

page 4604

JAPANESE AND CHINESE

Arrivals and Departures

Mr WEST:

asked the Minister for Home and Territories, upon, notice -

Will he give the number of Japanese and Chinese that have arrived in and departed from Australia during the years 1914, 1915, 1916, and 1917?

Mr GLYNN:
Minister for Home and Territories · ANGAS, SOUTH AUSTRALIA · NAT

– The following tables give the information desired by the honorable member: -

These figures show an increase of Japanese of 242, and a decrease of Chinese of 1,665. The increases in Japanese for 1916 and 1917 are accounted for chiefly by a revival in the pearling industry after the slump of 1914-15. Of the totals for 1916 and 1917, pearlers account for 848 and 700 respectively. The Japanese commercial passport visitors were - 1916, 93; 1917, 79.

page 4604

QUESTION

INCOME TAX

Mr HIGGS:

asked the Treasurer, upon notice -

  1. What amount of money has up to the present been received by the Treasury from the “ Special Income Tax, Non-participants “ ?
  2. What amount of money does the Treasurer expect to receive from the “ Special Income Tax, Non-participants,” for the year ending 30th June, 1918?
Mr WATT:
NAT

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

  1. No money has been collected yet.
  2. The anticipated revenue is set forth in this year’s Budget.

page 4604

HENDERSON NAVAL BASE

Report of the Public Works Committee on the proposed breakwaters, excavations, quay walls, &c., at the Henderson Naval Base presented by Mr. Gregory, and ordered to be printed.

page 4604

PAPERS

The following papers were presented : -

Java and the East Indies, Singapore and the Straits Settlements - Report of the Commissioner (Senator the Hon. J. J. Long). Return showing the personnel, functions, and occupations of the members of commercial and other Boards, Pools, Committees, &c., operating under Commonwealth Government control.

Ordered to be printed.

page 4604

LOANS SINKING FUND BILL

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Watt) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a Bill for an Act to provide a sinking fund for lo.ans and for other purposes.

Resolution reported.

Standing Orders suspended.

Resolution adopted.

Ordered -

That Mr. Watt and Mr. Webster do prepare and bring in a Bill to carry out the foregoing resolution.

Bill presented by Mr. Watt and read a first time.

Second Reading

Mr WATT:
Treasurer · Balaclava · NAT

.- I move-

That the Bill be now read a second time.

This measure is to provide a sinking fund for Commonwealth loans. Honorable members know that we have, with regard to some of our loans, what is known as a Stock Redemption Fund, but it applies only to portion of the loans that we have floated. It does not extend to those loans which were obtained from the British Government, and it is felt that if we are putting aside a certain sum to provide a sinking fund inconnexion with loans locally floated, we ought to do the same in regard to loans on British credit. This Bill will be deemed to have come into operation on the 1st July, 1916, the object being to validate something that was done in that year.With the exception of a 5 per cent. contribution which was specially provided by Parliament for certain works, it seeks to establish a uniform sinking fund of½ per cent. per annum. In the year 1916-17 a sinking fund of 1 per cent. per annum was established by the Government of the day, but this applied only to loans for war purposes. We think it time that all loans should be placed on the same footing, and that instead of putting by irregular amounts applicable to portions of our indebtedness, we ought to establish a sinking fund of ½ per cent. in regard to all loans floated by the Commonwealth in connexion with the war. The Bill contains the usual provisions relating to the uses to which such moneys may be put. They may be used only for the purpose of repurchasing, purchasing, or redeeming any security issued under the Commonwealth Inscribed Stock Act 1911-15, repaying any moneys borrowed from the Government of the United Kingdom, . and paying any expenses incurred in connexion therewith. No purchased, re-purchased, or redeemed stock is to be re-issued. There is another provision which entitles the Treasurer, in accordance with established State practice, to invest any moneys standing to the credit of the sinking fund in the purchase of any securities of, or guaranteed by, the Government of the United Kingdom, the Commonwealth, or any Australian State, and he may at any time sell such securities. The proceeds of all such sales are to be paid into the sinking fund. All moneys standing to the credit of the Stock Redemption Fund are to be transferred to the credit of the Loan Sinking Fund. Those, broadly, are the purposes of the measure, and honorable members will, I think, on careful examination find this proposal a healthier and more regular way of doing “business than we have adopted in connexion with our loans in the past.

Debate (on motion by Mr. Higgs) adjourned.

page 4605

COMMONWEALTH INSCRIBED STOCK

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Watt) agreed to -

That it is expedient that an appropriation of moneys be made for the purposes of a Bill for an Act to amend the Commonwealth Inscribed Stock Act 1911-1915.

Resolution reported.

Standing Orders suspended.

Resolution adopted.

Ordered -

That Mr. Watt and Mr. Webster do prepare and bring in a Bill to carry out the foregoing resolution.

Bill presented by Mr. Watt, and read a first time.

Second Reading

Mr WATT:
Acting Prime Minister and Treasurer · Balaclava · NAT

– I move -

That this Bill be now read a second time.

The main object of the Bill is to supply a deficiency in the Inscribed Stock Act caused entirely by the last war loan. When the Government decided to invite the banks to enter into a closer partnership with them in connexion with the loan, and to consider the advisability of encouraging their clients, by special advances at low rates of interest, to lend money to the Commonwealth for the purposes of the loan, a new question arose. All the Inscribed Stock Acts of Great Britain, the Commonwealth, and the States have prevented a lien being registered against an inscribed stock registration. That is to say, nobody can pawn, or in any way hypothecate, the stock or interest. Yet it became plain that if the banks were to advance 90 per cent. of the war loan offerings of every customer, they had to be sure that the customer’ could not lift and sell his stock without paying the debt he had incurred to the bank on account of a special advance. In order that the banks might be protected when they gave favorable consideration to the Government’s proposals, I took the responsibility of advising the Government to issue a regulation under the War Precautions Act giving the banks temporary power to register such a lien with the consent of their client. The purpose of this Bill is to substitute for that regulation a direct legislative enactment. When honorable members study the clauses of the Bill, they will regard it as a wise precaution from the point of view alike of the stockholder and the bank.

Sir Robert Best:

– Does the Bill apply only to banks?

Mr WATT:

– It applies to those who assist their customers by special advances, and private persons do not do that.

Mr Bayley:

– Some firms have done so.

Mr WATT:

– That is true; but in the majority of such cases these firms have taken the stock in their own name. When an employee has paid the full amount they distribute in his name the number for which he has paid. That has been done to my own knowledge by a large number of companies and associations.

I propose to briefly explain the provisions of the Bill. Clause 2 is a mere drafting amendment to remedy a technical defect in the principal Act. Clause 3 is vital. It is to enable certificates of Hen to be accepted by the Registrar of Stock, in respect of moneys advanced by banks for the purpose of assisting the war loans. The banks naturally expect a continuation of this protection, and this will give it legislative and binding effect. Clause 4 deals with the interest on war savings certificates, which are here referred to by their technical name as “ Treasury bonds.” The interest on. these war savings certificates, or Treasury bonds, as honorable members are aware, is payable at the end of a definite time, namely, three years. The purchaser of a£1 certificate pays for it 17s. 6d. in cash, and it is worth£1 at the end of the three years’ period. The Treasury will pay that£1 at the period of maturity, but there is not in our law any provision to enable the Treasury to set aside every year the interest payable on these warsavings certificates. Thus, when a certificate matures at the end ofthree years, the whole ofthe interest payable in respect of it falls on that particular year.

Mr West:

– Then the Government are proposing to spread the interest payable over the three years’ period, so that at the end of that term, when the interest becomes payable, the money will be available for it?

Mr WATT:

– That is so. The Bill provides for the payment of the interest into a Trust Fund in three stages instead of one. The issue of war savings certificates has already become fairly large. It amounts now to over £6,000,000, andwe hope that it will become very much larger. As the result of advantages that we propose to offer in connexion with them, the savings ofthe people are more likely to be put into them than to be invested in other directions more fashionable before the war. We think, therefore, we should tackle this question now, so that the Treasury will not feel the weight of the full interest payment three years hence.

Mr Finlayson:

– The Government are not going to continue the issue of these certificates after the war?

Mr WATT:

– No; they are purely war measures. The second part of this clause - which will be known as section 51g - gives the Treasurer power to repurchase these certificates out of the proceeds of war loans. There are only two ways in which such certificates can be redeemed. They may be redeemed either out of revenue or out of loan money. This clause gives the Treasurer power, at the end of the three years - the period of maturity - to pay for the certificates out of regular loan raisings, for which parliamentary authority will have been granted.

Mr West:

– This will save taxation?

Mr WATT:

– It. will. It will take the money into a larger loan, offering at the end of the three years’ period.

Ma-. West. - We ought to have more taxation.

Mr WATT:

– The honorable member will have some of his wishes in that respect gratified this year.

Mr West:

– I am ready to pay my share of taxation.

Mr WATT:

– Then I shall hold the honorable member up to the community as an exemplar of the cheerful taxpayer.

There is in these war savings certificates a condition that if a person, from any special need, desires an earlier redemption, he can obtain it at the Treasury. This Bill will permit of advances for such transactions. If, for instance, a holder of any of these certificates has family troubles, or suffers great losses, and does not want to wait for the period of redemption, he can go to the Treasurer, under the conditions of purchase, and secure redemption.

Mr Higgs:

– This will keep their price mp.

Mr WATT:

– Their price is not receding, because the condition to which I have referred is known, and a person holding a parcel of any size can always have them redeemed.

Mr Richard Foster:

– That provision refers to bonds?

Mr WATT:

– To war savings certificates, referred to in this clause as Treasury bonds. I come now to clause 5. At the. present time no war loan securities are liable for stamp duty under either Commonwealth or State law. This clause continues that provision, but with a proviso that such securities shall be free from taxation, unless declared by the prospectus to be liable. This provision is necessary, because in connexion with the last loan we introduced a new system - the system of issuing 5 per cent. bonds subject to taxation. I am aware that honorable members in some cases have doubted the wisdom of that system, but it is in operation to-day. We thus have two stocks running - the one free of taxation, and the other liable to taxation. We propose by this legislation to guarantee to those to whom we gave a guarantee of immunity from taxation a continuation of that freedom from taxation, but those who with their eyes open purchased the 5 per cent. bonds liable to taxation will be liable. Clause 6 deals with the same subject in another form. It merely gives the guarantee that the prospectus gives to the people who purchase stock. I think this measure will commend itself to honorable members as salutary and necessary, in view of the altered character of our recent loans offerings, and I hope it will be agreed to.

Debate (on motion by Mr. Higgs) adjourned.

page 4607

WAR LOAN SECURITIES REPURCHASE BILL

In Committee (Consideration of GovernorGeneral’s Message) :

Motion (by Mr. Watt) agreed to -

That it is expedient that an appropriation of moneys be made for the purposes of aBill for an Act to provide for the repurchase of war loan securities.

Resolution reported.

Standing Orders suspended.

Resolution adopted.

Ordered -

That Mr. Watt and Mr. Webster do prepare and bring in a Bill to carry out the foregoing resolution*’

Bill presented by Mr. Watt, and read a first time.

Second Reading

Mr WATT:
Acting Prime Minister and Treasurer · Balaclava · NAT

.- I move -

That this Bill be now read a second time.

The object of this Bill is to provide the Treasurer with moneys - not out of revenue, as was the case in respect of sinking funds, but out of war loan funds - for operating on the market in the purchase of war loan stock, so as to keep the market healthy. That puts the purpose of the Bill as clearly and as brieflyas I can state it.

Mr West:

-It is with the object of keeping up the price of our stock?

Mr WATT:

– Yes. As honorable members know, there has been a sagging in respect of our 1925 and 1927 war loans, and’ it is no one’s interest in particular to see that money is available to take in the slack in the market. Numbers who have invested their moneys in these stocks in quite a bonâ fide way, hoping to be able to keep their securities, have been driven by circumstances on to the market, and have had to sell below par. That sort of thing always injures a market, and we are now proposing to give the Treasurer of the day a power that every State Treasurer possesses. State Treasurers carry on these operations out of sinking funds, and have done so ever since they have had a sinking fund. They have resorted to such operations whenever it has been considered advisable to do so, particularly when they have been approaching the London market. The quotation they receive for a loan from the underwriter or offering bank is to some extent determined by the look of the market. If it looks weak, a Treasurer gets a low offer; but if it looks tolerably healthy and strong, he receives a better offer. Consequently, the State Governments have always had money in hand to keep the market active, and not to let it fall against the holder or Treasury.

The British Government has been doing this extensively in connexion with war loans, and the policy has been regarded as a sound one. We think we should have money for the same purpose, but the fund is to be governed by certain limitations prescribed by the Bill. We ask the Parliament to authorize us to set aside on the 1st of every month1/8 per cent. per annum of the whole of the war loans in Australia. That will not apply to the British war loan, because that stock is not on the market. It represents a loan between the two Governments, and there are no transactions in connexion with it. The setting aside on the 1st of each month of1/8 per cent. means1½ per cent. per annum, and on our present indebtedness it will amount to over £2,000,000 per annum.

The further condition that is attached in the Bill to the exercise of this power is that when the fund to be created under it amounts to £1,000,000, no more money can pass into it until it falls to £900,000. That means that if further payments into the fund are not necessary to keep the loans active, and the price satisfactory, the fund will be stationary; it will remain at £1,000,000, or between £1,000,000 and £900,000. But if the Treasurer and his advisers should consider it necessary to keep building up a loan, this1/8 per cent. may go out as fast as it is coming in. If that should be necessary, and no one can quite tell how far it will be necessary - ample opportunites for operations in respect of the several loans will be afforded by this Bill. Clause 3 contains the essential provision that the Treasurer shall not pay above par for the stock. That, of course, is vital, otherwise speculations would be extensive and unnecessary. It follows that any transactions conducted in connexion with such a fund as this will be beneficial to the Treasury as well as to stockholders. We shall be buying back our indebtedness at below par, and we shall be performing a double service in affording a market to those stockholders who for any reason feel compelled to sell.

I strongly recommend this Bill to the House, because I feel we have neglected these conditions too much in the past. Many patriotic and decent citizens have put small as well as large amounts into our loans, and have had to face a loss when realizing. This Bill will be a guarantee against loss and it will be an assurance of better market conditions as the result of these operations.

Mr Pigott:

– Any stock purchased by the Treasury will not be re-sold?

Mr WATT:

– No; the stock when purchased, must be cancelled.

Mr West:

– There is no power of compulsory purchase?

Mr WATT:

– No; we shall operate within the limits of the fund established just as we consider the state of the market justifies operations. There is in the Bill a provision which will enable the Treasurer to close the fund, if he thinks it necessary, at the end of the war. And then having achieved its purpose, if its purpose will have been achieved, the money passes back to the loan fund, from which it is appropriated by this Bill. It is thrown back into the cistern from which we draw it now. I hope that the House will accept the provisions of the Bill as another important factor strengthening the hands of the Treasurer in the matter of dealing with loan funds.

Debate (on motion by Mr. Higgs) adjourned.

page 4608

INCOME TAX ASSESSMENT BILL

In Committee (Consideration resumed from the 8th May, vide page 4505) :

Clause 41 -

Section 59 of the principal Act is amended by omitting sub-sections1 and 2 thereof, and inserting in their stead the following subsection : - “ (1) Notwithstanding anything contained in the last preceding section, any person who -

fails to include any assessable income in any return; or

includes in any return as a deduction an amount which is not lawfully allowable, or an amount which is in excess of that actually expended or incurred by him, shall, if a taxpayer, be liable, except as provided in this section to pay by way of additional tax . . . the amount of One pound or double the tax which would have been evaded if the assessment had been based on the return lodged, whichever is the greater, in addition to any additional tax which may become payable by him in accordance with section 43 of this Act:

Provided that the Commissioner may, in any particular ease, for reasons which he thinks sufficient, remit the additional tax or any part thereof.

Mr CHARLTON:
Hunter

.- I take exception to paragraph c of the proposed new sub-section because, if it is inserted in the Act, it will impose hardships on many people who include in their returns deductions which they consider are lawfully allowable, but which the Taxation Office may not deem allowable. It will impose a penalty on people who err in this direction quite innocently, and will place persons who are desirous of complying with the law, and have no intention of evading it, in a very invidious position. A case in point would be that of a member of Parliament who included his election expenses as a deduction, on the ground that they are expenses incurred in earning his income. In my opinion, election expenses are a perfectly fair deduction to include in one’s income tax return, but they are not allowed as such, and if an honorable member should include them in his return he would be liable to a penalty under this proposed new paragraph. The provision goes altogether too far, and is not a reasonable one. It is not a party matter. Honorable members are endeavouring to do all they possibly can to provide efficient machinery for the purpose of enabling the Commissioner of Taxation to collect the income tax. It should be our endeavour to rectify any blemishes that we find in the measure before us, and to effect any improvements in it. As I consider that paragraph c is a blemish to the Bill, I move -

That paragraph cbe left out.

Mr RICHARD FOSTER:
“Wakefield

– I agree with the honorable member so far as the first portion of paragraph c is concerned, but I do not think that the words “ or any amount which is in excess of that actually expended or incurred by him “ should be omitted.

Mr Charlton:

– I am agreeable to alter my amendment in order to allow those words to be retained.

Mr RICHARD FOSTER:

– The Commissioner of Taxation, in the preparation of his forms, has attempted fairly well to direct the attention of the taxpayer to what deductions are permissible, but he cannot contend that they cover everything that is allowed. There are conceivable points which are not covered by the deductions specified in the forms, and those are matters that should be left to the Taxation Office to deal with when the returns come to hand. I am sure that not 10 per cent. of the taxpayers of the Commonwealth really understand what are legitimate deductions. There are many which peoplemay believe to be legitimate, but which the Commissioner may not allow. Honorable members have been very sympathetic in their attitude towards the Commissioner. They have allowed him a very generous latitude in order that he may collect the income tax, and reduce to a minimum losses which his office should not be called upon to bear, but it is asking the Committee to go too far to ask it to render a taxpayer liable to a penalty for including in a return as a deduction an amount which is not lawfully allowable. Nothing in this Bill will incite opposition on the part of the taxpayer more than thi3 particular paragraph. I hope that the Treasurer, with whom I have already discussed the matter, will see his way to eliminate the first portion of it. (Sir ROBERT BEST (Kooyong) [12.10]. - Honorable members have recognised, with a great deal of sympathy, the. difficulty that the Commissioner encounters in performance of his duty, and they have permitted very drastic provisions to be inserted in this Bill regarding the furnishing of returns, because the object has been to prevent obvious leakage, and to throw on the taxpayers the burden and obligation of making returns. To do so was very necessary, because it is a notorious fact that there have been, considerable leakages in that direction. But the firstportionof paragraph c goes far beyond what the Committee should consider fair or reasonable. No one can say definitely what item of expenditure is deductable unless he goes to a Court for a decision. Many matters are subject for dispute. If this paragraph is allowed to stand, it will mean that if any item of expenditure is in dispute the view taken by the Commissioner must prevail, and the taxpayer will be liable to a penalty for having asserted his own view as to what is a doubtful piece of law. Giving to the Commissioner the arbitrary power to say what shall be the law in any particular direction is not the proper method of settling a dispute. He will practically have every taxpayer at his mercy, because the latter will be obliged to pay the fine or go to Court over any matter which is in dispute. That is hardly a fair proposition. I do not say this with any desire of reflecting on the present Commissioner. He is a very fair and just man, but he cannot possibly hope to deal with every case, and the taxpayer is entitled to some protection at our hands. I am pleased that the honorable member for Hunter (Mr. Charlton) has agreed to limit his amendment to the words, “ an amount which is not lawfully allowable “ ; but paragraph b - “ Fails to include any assessable income in any return.” - is also subject to very much doubt. However,, if we give the Commissioner the benefit of the doubt, and allow him to have the drastic powers for which he asks in. that respect, we should certainly not render any taxpayer . liable to. a penalty for including in. his return as a deduction an amount .which is not lawfully allowable.

Mr WEST:
East Sydney

,- I hope that the Treasurer will, agree to the amendment. In my last return I included an amount, which I thought was permissible, by way of deduction. However, it was not allowed. I paid the amount at which I was assessed, and afterwards en- “tered my protest, only to find that the amount was allowable. Very few honorable members understand what is legally disallowable under the Act. It is such a complicated measure. One return which I have seen included an amount set down for repairs to the whole of a man’s property, but that deduction was disallowed. It appears that under the Aof a deduction in this respect cannot be made more than once in three years. I do not think that this provision will be of any real assistance to the Commissioner of Taxation. It may possibly have the effect of preventing people including in their returns expenses which should be allowed, in the fear that if they do so they may be penalized. It is not necessarily a crime to claim a deduction which is not legally allowable. The officers of the Department must scrutinize every return, and it is an easy matter for them to disallow claims incorrectly made. In my view the Committee will be wise to accept the amendment.

Mr SINCLAIR:
Moreton

.- I believe that the whole of paragraph c of the proposed new sub-section should be omitted. It seems to me that the object of the paragraph is rather “to reduce the clerical work of the Taxation Department than to prevent the undue inflation of deductions by taxpayers. In the preceding clause of this Bill, which has already been agreed to by the Committee, it is made an offence w> send in a return which is false in any particular. It must be admitted that the undue inflation of ex penditure to increase, a claim for deduction would render a return false in that particular and bring the taxpayer under the previous clause. There is therefore, no necessity at all events for the latter portion of paragraph c. I can give an instance to show how its operation would result in hardship to the taxpayer. I had the management of a trading concern, for which I sent in the income tax return. The whole of our expense for postage, was, connected with the conduct of the business, in sending out invoices, credit notes, and so on. I naturally thought that the postage would be a fair item for deduction, and so included it in the income tax return. It was disallowed by the Commissioner of Taxation. I am of opinion to this day it was fair to claim deduction for postage in that case. Under this paragraph that trading company would be liable for making a return of an amount in excess of that actually expended or incurred by the taxpayer. I do not think that an innocent mistake in the compilation of a return should be punishable. I agree that where there is a wilful attempt to evade taxation the provisions of the Act should, be as rigid as possible, and, as I have already said, I think that, the previous clause is made sufficiently tight to catch any one who makes a false return. There are many thousands of’ people in Australia who find it difficult to make out income tax returns. Thousands are spent every year in their preparation. It costs some people an amount almost equal to the tax they have to pay to cover the expense of making out their returns. If an item is included in the deductions which ought not to be so included it will be an easy matter for the officer of the Taxation Department to disallow it. I hope that the honorable member for Hunter will not agree to amend his amendment, but will insist upon the omission of the whole of paragraph c. .

Mr CHARLTON:
Hunter

.- I ask leave of the Committee to amend my amendment and to move the omission only of the words -

An amount which is not lawfuly allowable, or,

Amendment, by leave, amended accordingly.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

.- These words were not included without a great deal of consideration. In some cases a taxpayer will include in his return an item which is not allowable in connexion with another item which is allowable, and the result is an excess in the amount which should be claimed under the allowable item. We cannot get at that unless under the terms of the latter part of paragraph c of the proposed new sub-section. Cases of the kind to which I refer are fairly frequent, and many taxpayers take their chance, and in this way make claims which are not allowable. I, however, quite agree with honorable members that there are probably many cases in which taxpayers, owing to an imperfect knowledge of the law, include in their returns in quite a bonâ fide way items which are not allowable.

Mr Mcwilliams:

– There is great difficulty in making up these returns. The compilation of State and Commonwealth income tax returns is on. a different footing, and so it is an easy matter for a taxpayer to make a mistake.

Mr GLYNN:

– It is due tothe Commissioner of Taxation that I should state there have been cases in which frauds have occurred through the absence of such words in the Act as areincluded in the paragraph under consideration. In all the circumstances I think that it is, perhaps, better that I should aecept the amendment.

Amendment, as amended, agreed to.

Clause, as amended, agreed to.

Clauses 42 to 45 agreed to.

Clause 46-

Where it is shown to the satisfaction of the Commissioner that any person who was assessed to pay income tax under sub-section 2 of section fifteen of the Income Tax Assessment

Act 1915 has paid the tax out of his own moneys, and has not been able to recover the amount of the tax from his principal, the Commissioner may refund to the person assessed the amount of the tax so paid.

Sir ROBERT BEST:
Kooyong

– I ask the Minister in charge of the Bill to give further consideration to this clause. Under section 15 of the Act of 1915, agents carrying on operations on behalf of principals abroad were made personally liable, on and after the 30th June, 1916, for all business operations of their principals which took place in Australia. It was discovered later that this section seriously interfered with the business of British manufacturers, and practically gave a preference to the foreigner.

In an amending Act that section was repealed. It so happens that whilst the section was in operation many British merchants regarded it as their duty to obey the law, though they most strongly protested against it, and they paid the taxation levied under that particular section. There were others who resisted very strongly and never paid any taxation under it. Clause 46 of this Bill seeks to remedy, to some extent, the hardship created under section 35 of the Act of 1915. It provides that where an agent has paid on behalf of his principals any income tax incurred under the section which has been repealed, if the principal has refused to refund the taxation to the agent, the Government mayrefund it. There are a considerable number of cases in which theBritish manufacturers have actually repaid the income tax paid on their behalf by the agents. These men were honest, prompt, and fair, but they will be penalized under this clause by being placed in a position of disadvantage as compared with the men who refused to refund the taxation paid by their agents.

Mr Atkinson:

– The honorable member desires that the taxation paid under the repealed section shall be refunded whether it was paid by principal or agent?

Sir ROBERT BEST:

– Exactly ; I hold that the money paid by way of income tax under the repealed section by honest business men abroad should be refunded. I know that it is a difficult operation to take revenue from the Treasury once it has been collected, but it seems to me to be a serious hardship to British manufacturers, who promptly paid income taxation instead of disputing it, that they should be made to suffer under this clause as against those who protested against the taxation and refused to pay it, and who now cannot be made to pay it. I ask the Minister in charge of the Bill to give the case ofthese men sympathetic and generous consideration.

Mr ATKINSON:
Wilmot

.- The contention urged by the honorable member for Kooyong (Sir Robert Best) is a sound one, and I hope that the Government will see their way to accord equitable treatment to those men who recognised their obligations by paying the tax. I know that it is hard for the Treasury to be called upon to make refunds under existing conditions; but it would certainly be inequitable to allow men who had disregarded the law to go scot-free, whilst penalizing others who had respected the law to the extent of the taxation which they had paid. If Parliament had not repealed the provision relating to this matter at the earliest possible moment, there would not have been so much to be said in favour of the suggestion of the honorable member for Kooyong; but, seeing that it did repeal it at the earliest possible moment, the Government should either refund the money which was paid by those who honestly obeyed the law or collect the taxation which ought to have been paid by those who disobeyed it.

Mr WEST:
East Sydney

.- It is the duty of this Chamber to protect the revenue, and to see that no injustice is done. If the difficulty mentioned by the honorable member for Kooyong be a real one, the easiest way to overcome it is to vest in the Commissioner a discretionary power. I fear that the adoption of the suggestion which has been made would open the door, very widely to evasion of the tax.

Sir Robert Best:

– That question is not involved at all.

Mr WEST:

– The Commissioner at present has a discretionary power.

Sir Robert Best:

– Not at all. There are certain persons who have received their money back, and who are not covered by this clause.

Mr WEST:

– I think that honorable members ought to be very cautious in the matter of opening the door to the making of refunds.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– I quite recognise the difficulty pointed out by the honorable member for Kooyong (Sir Robert Best) that it is rather rough on some men who have paid the tax that others who were liable to it, and did not pay, should appear to be benefited by a change in the law.

Mr Rich ard Foster:

– They are benefited.

Mr GLYNN:

– They have not been discharged of their obligations if they can be got at. But I cannot see that we are justified in saying that the men who paid up under the law to which they were liable should have their money refunded to them. They were liable to the tax, and they paid it honestly.

Mr Atkinson:

– But we repealed the law immediately.

Mr GLYNN:

– The principle which I have enunciated isnot affected by the time during which the law was in force. Merely because the law has been changed, we ought not to refund moneys that were lawfully collected under it,

Mr Mcwilliams:

– But the Department is making no effort to recover from those who have not paid.

Mr GLYNN:

– Every effort will be made in that direction; but it is very difficult to get at men who live outside Australia, and who have no agents here. 1 quite recognise the hardships of which the honorable member for Kooyong has spoken.

Mr Mcwilliams:

– It is so unfair, is it not?

Mr GLYNN:

– It is not unfair on the part of the Government. The position is that a certain number of persons have paid their obligations without compulsion, whereas others have not. The proposal nowis that we should refund to the former class the money which they have paid. Whilst recognising the hardship to which reference has been made, I say that we would not be justified in doing that. It would be applying the law retrospectively.

Sir Robert Best:

– The Minister is attempting to do the same sort of thing another way.

Mr GLYNN:

– In every case, we are bound to protect the agent, and to see that he has an opportunity of recovering from his principal money which he has paid on his behalf. That is perfectly consistent, both with present and past legislation; but I cannot accept the honorable member’s suggestion that we should refund the money paid by men who were really liable to pay it.

Clause agreed to.

Clause 47 agreed to.

Clause48-

  1. The amendments of the principalAct made by paragraph e of section 2, section 5, paragraph d of section 8, and paragraph b of section 10 of this Act, shall be deemed to have come into operation on the date of the commencement of the Income Tax Assessment Act 1915.
  2. The amendments of the principal Act made by paragraph d of section 6 of this Act shall apply to assessments for the financial year beginning on the first day of July, one thousand nine hundred and seventeen.
  3. The amendments of the principal Act made by section 35 of this Act shall come into operation forthwith.
  4. Except as provided in this section, the amendments of the principal Act made by this Act shall apply to assessments for the financial year beginning on the first day of July, one thousand nine hundred and seventeen, and all subsequent years.
Sir ROBERT BEST:
Kooyong

– I suppose that this is the most important provision of the Bill - important from the stand-point that it provides for retrospective operation of certain clauses which are enumerated in it.

Under it we are asked to sanction the retrospective operation of the Act so far as those provisions are concerned. As I have previously pointed out, it is a vicious principle for Parliament to sanction retrospective legislation. Probably the most important clause that will be affected by this provision-

Mr Tudor:

– Paragraph 2 of section 2 is pretty bad.

Sir ROBERT BEST:

– I know that it is, but the money has already been collected. Probably section8 is the most important provision in the Act which will be made retrospective. The provision has been inserted because of certain cases that have been decided by the Court - cases involving some very difficult and technical questions. Tinder the old law, all accumulations outside of the profit and los3 account, prior to the 1st July, 1914, were exempted from taxation. But it appears that a Mr. Meares, who carried on a pastoralists business, had appropriated the sum of £26,000 to what was called an appropriation account. The Taxation Department ruled that this account was practically a profit and loss account. It is only fair to the Department to say that when the case went before the primary Court, Mr. Justice Barton agreed with that view. Subsequently, however, an appeal was made to the Full Court of the High Court, which decided that the account was not a profit and loss account, and that, therefore, the money standing to its credit was not liable to taxation. This decision, of course, completely altered the view of the Taxation Department, and the clause which we are now discussing has been introduced for the purpose of authorizing the collection of the tax in accordance with the former practice. Although the words are wide enough, I take it that the clause cannot possibly apply to the case of Mr. Meares, who has already obtained a judgment in his favour.

Mr Boyd:

– Is that point certain?

Sir ROBERT BEST:

– (It is not absolutely certain, but I know the practice of the Department, and it would be notihing short of an outrage if, after a judgment had been obtained from the High Court, an attempt was made by legislation to disregard that judgment.

Mr Boyd:

-We ought to have an assurance on the matter.

Sir ROBERT BEST:

– That is so. Then there were two other cases which came before the Court - one that of the Commercial Bank, Sydney, and the other that of the Bank ofNew South Wales - relating to the question of what were accumulations, and therefore what amounts were free of taxation prior to the 1st July, 1914. In both these cases the system adopted by the Departmentwas challenged. In my judgment, the interpretation put upon the law by, the Commissioner of Taxation was entirely in accordance with the intention of Parliament, and whilst Mr. Meares obtained a judgment, it must be recollected that he secured it, to some extent, upon technical grounds. I know that this question involves the sacrifice of a revenue of upwards of half-a-million sterling already paid into revenue, and consequently we need to be very careful as to how we deal with it. I am not prepared to accept the responsibility of opposing the clause for three reasons - first, because I believe that the interpretation placed upon the law by the Commissioner of Taxes, which was supported by Mr. Justice Barton, was really in accordance with the intention of Parliament; secondly, because Mr. Meares has practically succeeded on what was regarded as a technical point; and thirdly, that something like £500,000 of revenue is involved. Of course, we cannot lightly attempt to deal with the matter under those circumstances, but at the same time we should register a protest against this vicious principle of retrospective legislation. I am in sympathy with the Commissioner in this regard, but I hold that the Bill should have been introduced immediately after the decision in the action to which I have referred.

I now submit to the Minister another matter. Under section 37 of the Act the taxpayer, when served with his assessment, has the right within thirty days, I think, to lodge his objection by way of appeal. Many objections have been lodged, and these have accumulated and have not been dealt with. I submit it is unfair that those objections should be wiped out in this way. I am sure the attitude will be taken, so far as the cases decided are concerned, that those verdicts should not be disturbed ; but there are other cases where men have objected that they were not liable, and if we pass the clause in its present form those objections, and all pending litigation, will be wiped out. I recognise that there is a large sum of revenue involved, yet those who have appealed are entitled to the sympathetic consideration of the Minister, and to some relief, since, by their deliberate action, they have sought to conserve their legal claims.

Mr BOYD:
Henty

.- I heartily re-echo the sentiments of the honorable member for Kooyong (Sir Robert Best). This is not the first occasion on which I have taken objection to retrospective legislation. The community is entitled to be governed by the Acts upon our statute-book. Every individual has the right to whatever privileges or exemptions the Courts may confer. It is a sound principle. The consideration operating in the mind of the honorable member for Kooyong, that he would not care to press his point because of the money involved, is the weakest argument he has adduced. Such a consideration should not prevent Parliament from doing what is right. If we have illegally collected from the taxpayers £500,000 in revenue we should not be put in the position of having to legislate three years afterwards to ratify that collection. It is a vicious principle, and I shall vote against it.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

.- The honorable member for Kooyong (Sir Robert Best) has put the case fairly. Concerning the question of profit and loss account, the earlier section of the Act was intended by Parliament to apply as the Commissioner applied it. It may be possible to manipulate a trading account in such a way that really what is a profit and loss account might be nominally called an appropriation account; and, under the decision in the Meares case, by the manipulation of his accounts, a man could escape taxation altogether.

Sir Robert Best:

– In respect of taxable moneys prior to July, 1914?

Mr GLYNN:

– Yes, under this particular section. So far as I can see, from the complicated cases mentioned, it was merely a technical distinction which got Meares out of the position in which he found himself. But in some cases there was really an appropriation account, operating as a profit and loss account; and, though only technically an appropriation account, the money was not liable to taxation.

Mr Boyd:

– Will you say how the Government view the suggestion of the honorable member for Kooyong that, a man having secured a verdict of the Court, this clause means that he may be taxed? Will he still be taxed, following upon that verdict ?

Mr GLYNN:

– This section will apply to taxes that ought to have beencollected. However, the best course is not to pass the clause under discussion at present. There are some amendments to be made which will necessitate the recasting of the whole clause. It will be better therefore to postpone consideration.

Sir Robert Best:

– Will the Government reconsider the objections to appeals ?

Mr GLYNN:

– We will look into that.

Clause postponed.

Sitting suspended from 12.53 to 2.15 p.m.

Postponed clause 2 -

  1. Section three of the principal Act is amended -

    1. by omitting the definition of “In come “ and inserting in its stead the following definition: - “ ‘ Income ‘ includes -
    2. interest upon money secured by mortgage of any property in Australia ;
    3. in the case of a club, society, or other similar association, the subscriptions and entrance fees of the members; and
    4. in the case of a co-operative company or society, all sums received from members in payment for commodities supplied to them or received in respect of commodities sold by the company or society whether on its own account or on account of its members.”
    5. by adding at the end of the definition of “ Income from personal exertion “ the words: - “and any income from any property where the income forms part of the emoluments of any office or employment of profit held by the individual “ ; and
    6. by omitting the definition of “Partners” and inserting in its stead the following definition: - “’ Partnership ‘ means an association of persons carrying on business as partners or in re-‘ ceipt of income jointly, but does not, include a company.”.

Section proposed to be amended - “ Income “ includes interest upon ‘money secured by mortgage of any property in Australia. “ Income from personal exertion” or “ income derived by any person from personal exertion “ means income derived in Australia consisting of earnings, salary, wages, commission, fees, bonuses, pensions, superannuation allowances, retiring allowances and gratuities not paid in a lump sum, allowances received in the capacity of employee, and the proceeds of any business carried On by the taxpayer either alone or as a partner with any otlier person. “ Income from property “ or “ income derived from property “ means all income derived in Australia and not derived from personal exertion. “ Partners “ includes persons who are in receipt of income jointly. . . .

Mr CHARLTON:
Hunter

.- I am sorry to be obliged again to ask the Minister for an assurance with regard to the position of co-operative societies, about which there seems to be some misunderstanding. I have had an assurance from the Minister that the method of taxation with respect to such bodies will not be altered by this amending Bill, but I am still receiving letters to the effect that those associated with co-operative societies doubt very much if this is so. I think it would be very much better if, in addition to giving the Committee an assurance, the Minister could, by means of the press, remove any doubt in connexion with this matter.

Mr GLYNN:
Minister of Home and Territories · Angas · NAT

– I have already told the honorable member that the Bill will not make any alteration with reference to co-operative societies, and I shall be only too pleased to draw attention to the fact in order to remove any misconception in the minds of those concerned.

Mr MACKAY:
Lilley

– I should like a clearer definition of a “ club, society, or other similar association.” When I brought this matter up before, I do not think the Treasurer (Mr. Watt) gave the Committee a very definite reply. I pointed out that there were a number of associations outside the clubs to which the Treasurer alluded, and which, apparently, will be liable to taxation under this provision. I think the Minister in charge of the Bill should be in a position to say definitely whether the organizations I mentioned will come within the scope of this measure.

Mr GLYNN:
Minister for Home andTerritories · Angas · NAT

– The position of clubs is set out in the decision in the Bohemian Club case, reported in the Argus Law Reports of 16th April. In that case it was decided that the annual subscriptions of members of social clubs were not regarded as income within the meaning of the Income Tax Assessment Act of 1915-16. I think the Chief Justice decided that the subscriptions of members were to be regarded in the same light as if a single man had paid a sum of money for a certain benefit. That is to say, if one man, by paying a certain amount of money, could get certain social benefits, he would not be liable to be taxed upon that payment as such, and if the persons making the payment were multiplied by 100 or 500, the position would not be altered.

Sir Robert Best:

– I think the judgment went further, and stated that subscriptions were not revenue, but capital. That is practically what it said.

Mr GLYNN:

– Perhaps it would be as well if I read the remarks of the Chief Justice on this point -

The argument is, indeed, founded upon a complete misconception of the nature of a club, which is a voluntary association of persons, who agree to maintain for the common personal benefit, and not for profit, an establishment, the expenses of which are to he defrayed by equal contribution of an amount estimated to he sufficient to defray those expenses, and the management of which is intrusted to a committee chosen by themselves. On principle it is quite immaterial whether the contributors are 2 or 300. If there were two or three only it would not occur to any one to say that the two or three are collectively in receipt of income from the individual. Nor are the committee of the club, or the club itself.

That is to say, the judgment did not make any distinction between capital and income in the ordinary sense of the word.

Sir Robert Best:

– It states virtually that the income is capital.

Mr GLYNN:

– These subscriptions were regarded as contributions of money by themselves.

The contributionsare, in substance, advances of capital for a common purpose which are expected to be exhausted during the year for which they are paid. They are not income of the collective body of members, any more than the calls made by members of a company on their shares are income from the company. If anything is left unexpended, it is not income or’profit,but saving, which the members may claim to have returned to them. The notion that such savings are taxable income is quite novel, and quite inadmissible.

As a matter of fact, without reading the report of the judgment, I think I gave the same reasons during the debate on the second reading of the Bill. Under the Act as it stands, a club managed for profit, that is to say, mixing up social benefits with profit, is liable to taxation. The English decisions state that English clubs which depart from the object for which they were formed, and are not now being carried on as social clubs, come within the schedule of the Act, and are taxable. I do not know whether it would be possible in this Bill to include the institutions referred to under the term of proprietary clubs, but I am afraid it would probably lead to trouble in interpretation. In the judgment on the Bohemian Club case, the position of the Carlisle Golf Club, an English case, was quoted, showing that taxation was imposed in respect of visitors’ fees as representing income outside the ordinary functions of the club. That really is the decision as regards clubs. Any clubs that do not depend merely upon subscriptions will be liable under the existing law for taxation.

Mr Boyd:

– In view of the probable revenue, is it worth while to cause so much irritation throughout the country?

Mr GLYNN:

– It is expected that a fair amount of revenue will be obtained from club taxation.

Mr AUSTIN CHAPMAN:
EDEN-MONARO, NEW SOUTH WALES · PROT; LP from 1910; NAT from 1917

– How much?

Mr GLYNN:

– I am not sure, but I think it will amount to £10,000 or £11,000. It really depends upon how much of the revenue of a club comes from subscriptions. If only an insignificant portion of club revenue were so represented, it might not be desirable to insert this provision; but if a larger portion comes from outside sources, it would not be wise to knock out the exemptions.

Mr Boyd:

– If an amendment were inserted to exempt social clubs and lodges, would not that meet the case?

Mr GLYNN:

– Friendly societies are already exempted. It is very hard to discriminate between the different classes of clubs that will be affected by this Bill. Perhaps the honorable member would like further consideration of the point, but at present I cannot see any good reason why clubs should be struck out of the definitions.

Mr Boyd:

– Will the Minister consider a suggestion to exempt these organizations ?

Mr GLYNN:

– Yes.

Sir ROBERT BEST:
Kooyong

– Social clubs other than those of a trading character should never have been included, because they have been established to enable members to come together for social purposes only. Owing to the comprehensive divisions of the Bill, other classes of clubs which should not have been included are affected. According to the State law, manufacturers’ and employers’ organizations are exempt from taxation, andaccording to Federal legislation, trade unions and employers’ federations which are registered, are also exempt;but manufacturers’ and employers’ organizations which are not registered would now come within the provisions of the term “ club.” The Chamber of Manufactures in Melbourne may be regarded as a typical example of what I mean. In that body, manufacturers are joined together for purposes similar to those which animate unionists when they join a union, namely, to protect their own interests.

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

– The Hardware Club, for instance, does a lot of benevolent work.

Sir ROBERT BEST:

– Precisely. These organizations are not formed for the purpose of making money, but simply to enable members to protecttheir own interests, and so subscriptions are regulated by the amount of expenditure necessary to carry them on. It would be absurd to suggest that their subscriptions should be subject to income tax. It was practically decided in the Bohemian Club case, to which the Minister referred, that subscriptions are virtually capital, and that, therefore, they cannot be regarded as income. I hope the Minister will see his way clear to exempt social clubs, and make the provisions wide enough to include the organizations to which I referred.

Mr TUDOR:
Yarra

.- I regret that I was absent from the chamber while the Minister was making his explanation, but I understand that he intends the provision to apply only to proprietary clubs.

Mr Boyd:

– That has not yet been decided definitely.

Mr TUDOR:

– I have taken the trouble to get a few examples of clubs which should be exempted, and have here the balance-sheet of a club with a liability of about £4,000, with assets valued at £4,700, and £3,235 owing on debentures issued for the erection of a grand stand. It is in default in respect of payment of interest to the debenture holders, and is going back at the rate of £161 12s. a year. Last year’s income was £168 10s. The committee of management were informed that the reduction of the overdraft by £2611s. 7d. was not an allowable deduction.

Mr Boyd:

– I suppose that is the Richmond Cricket Club.

Mr TUDOR:

– Yes. I have here a letter from the secretary, who states -

I enclose a copy of our last balance-sheet, on which I have marked the items which the Income Tax Office would not allow as deducted. The present method of assessing a club’s income is to take all income, even including voluntary donations-

Sir Robebt Best:

– Does he say “ including voluntary donations”?

Mr TUDOR:

– Yes, but the Commissioner tells me that is wrong - and allow therefrom certain deductions, such as rates, rent, wages, and general working expenses. The balance is treated as profit, but in the case of the club it is not so, because we were actually defaulting on the debenture interest, and, had we been a proprietary affair, would have been in the Bankruptcy Court. Furthermore, any amounts paid off the stand cannot be considered an addition to the assets of the club in a taxable way, because the club could never realize on the asset, on account of the building being on Crown land, of which our tenure is only a permissive occupancy. A clause to the effect that any club not existing for the purpose of profit, and occupying Crown or municipal land on permissive occupancy only, should be exempt from the operation of the Act, would amply protect all similar clubs to ourselves.

I know the Commissioner is against that proposal, because he says it would exempt such clubs as the Victoria Racing Club and the Victoria Amateur Turf Club. None of the clubs to which I am referring have made a penny of profit during the last four years. I am not alluding to racing clubs, which, I understand, have given the whole of the money to patriotic funds, but to cricket, football, bowling, rowing, swimming, and other sporting clubs. Where a club is going back in its debenture account, as the club I have quoted is doing, it ought not to be charged on an alleged income from subscriptions. This club, while receiving an income of £168, went back £161 12s.

Mr Boyd:

– There is no cricket club around Melbourne to-day that can pay its rent to the Parks and Gardens Committee for the public ground that it occupies.

Mr TUDOR:

– This club had to pay for “ permissive occupancy and maintenance, Yarra Park,” £26, according to the balance-sheet, but it owes £78 5s. to the Parks and Gardens Committee. If £26 is one year’s rent, the club has gone back three years. I quoted the case of the St. Kilda Cricket Club, in the Treasurer’s own electorate, when speaking on the second reading. Tt is not their own ground that these clubs have to plant trees or erect buildings upon, but the rent they pay to the Parks and Gardens Committee means payment of wages and the planting of hundreds of trees in the surrounding parks. What the Richmond and Melbourne Cricket Clubs, and, I presume, the East Melbourne Cricket Club, have paid has gone to beautify the Yarra Park right down to the river. The Fitzroy and Carlton Cricket Clubs have made the same complaint about this clause, and it is safe to say that no club of this class is to-day in a solvent position. A great number of their members are away at the Front, and, from my personal knowledge as a member of it, I can say that the Melbourne Cricket Club is keeping every one of its members good on the books while they are away. The swimming clubs also feel that they will have to pay under this proposal if they make £1 of profit, andpay, too, at a higher rate than the ordinary individual. The secretary of the Swimming Association tells me that, in some of the swimming clubs, 90 per cent. of the eligible members have gone to the Front, and the average is over 70 per cent. for all the clubs. Not a great number of persons join swimming clubs as members for what they can get out of it, and the membership consequently is not very large; but two years agoI unveiled an honour board with over 100 names on it at the head-quarters of the. Melbourne Swimming Club, at St. Kilda. What is true of that club is true of others. I hope we shall not penalize purely sporting clubs that are getting no income, and cannot pay their way. The Commissioner is proposing to charge them upon a basis of income on which I do not think they should pay.Will the Minister in charge of the Bill frame a clause to prevent them being penalized in view of the strenuous times they are passing through ?

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– It is better to knock that part of the clause out altogether, as I cannot find any modification which would accomplish what is in honorable members’ minds without leaving the interpretation somewhat doubtful. We do not want to tax purely social clubs depending on subscriptions, and had better leave the existing law as it stands, because the High Court decision in the case of the Bohemian Club is confined to purely voluntary social clubs not for profit. I move -

That sub-paragraph b of paragraph e be left out.

Amendment agreed to.

Mr GLYNN:
Angas · NAT

– Subparagraph c of paragraph e provides -

In the case of a co-operative company or society, all sums received from members in payment for commodities supplied to them or received in respect of commodities sold by the company or society, whether on its own account or on account of its members. -

The word “commodities” does not cover all the things with which these companies or co-operative societies deal. I therefore move -

That after the word “ supplied “ the words “ or animals or land sold,” and after the word “ commodities “ the words “ animals or land “ be inserted.

Mr SINCLAIR:
Moreton

.- Has the Minister studied the effect of the amendment on bacon-curing co-operative companies, whose business is wholly the purchase and re-sale of pigs, either alive or dead? The Minister seems to be hitting up that industry.

Mr Austin Chapman:

– And the rabbit industry.

Mr SINCLAIR:

– Ishould think that will be covered by the amendment also.

Amendment agreed to.

Mr GLYNN:
Angas · NAT

.- I move -

That the following new paragraph be inserted:” (ee) By inserting in the definition of income from personal exertion, after the word ‘ derived,’ the words ‘ from sources.’ “

The principal Act refers to” income derived in Australia. We put in the words” from sources ‘ ‘ to make the Act clearer.

Sir Robert Best:

– That is. the same wording as the war-time profits tax.

Mr GLYNN:

– Yes.

Amendment agreed to.

Definition of income from property similarly amended.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– I move -

That after paragraph g the following paragraph be inserted : -

  1. by inserting at the end thereof the following definition : “ Value in relation to live stock means the value as prescribed.”

There is a regulation which allows the Commissioner to take for the valuation of live stock what is called the standard value, and the question has been raised whether this regulation is valid. The amendment is to remove all doubt on the subject.

Mr Pigott:

– This amendment may seriously affect graziers and others. As it has been sprung on the Committee, the Minister should promise to recommit the clause to give us an opportunity to consider the provision.

Amendment agreed to.

Clause, as amended, agreed to.

Postponed clause 48 -

  1. The amendments of the principal Act made by paragraph e of section 2, section 5, paragraph d of section 8, and paragraph 6 of section 10 of this Act shall be deemed to have come into operation on the date of the commencement of the Income Tax Assessment Act 1915.
  2. The amendments of the principal Act made by paragraph d of section 6 of this Act shall apply to assessments for the financial year beginning on the first day of July One thousand nine hundred and seventeen.
  3. The amendments of the principal Act made by section 35 of this Act shall come into operation forthwith.
  4. Except as provided in this section, the amendments of the principal Act made by this Act shall apply to assessments for the’ financial year beginning on the first day of July One thousand nine hundred and seventeen and all subsequent years.

Mr. GLYNN (Angas- Minister for clause was postponed with, a view to; making a redraft ‘of it. The honorable member for Kooyong ‘ (Sir Robert Best) has directed criticism against it, but.- as I have mentioned, we were obliged to make the measure retrospective in regard to some matters, and particularly in regard to the taxation of companies. If we did not, the revenue would suffer to the extent of about £500,000, because we should have to make refunds to nearly that amount. The original intention of Parliament was to tax those to whom, if the BUI were not made retrospective in this particular, we should have to make refunds. In the Meares case the Court held that money paid into an appropriation account was not money in a profit and loss account within the meaning of section 14, and therefore was not taxable as income. Cases have arisen which show that the accounts of companies have sometimes been so manipulated that what is in reality a profit and loss account may appear to be an appropriation account.

Sir Robert Best:

– I agree as to the need for the amendment, but I think, that it should not be made retrospective.

Mr GLYNN:

– It is made retrospective to validate collections which have been made on the assumption that the Department was entitled to tax this money. In the Meares case the Court decided that we could not collect taxation on an amount of about £26,000. The honorable member has referred to certain objections to assessment which have been lodged. I would point out that no decision has been given in favour of those who have lodged these objections.

Sir Robert Best:

– The Meares case was a decision in their favour.

Mr GLYNN:

– That was a decision affecting a particular person. We do not collect money which the Court says should not be collected. But we say, in regard to what may be considered speculative objections lodged by persons who have not pursued the matter to a finish, that the tax should be retrospective.

Sir Robert Best:

– The objectors have not had an opportunity to pursue the matter to a finish.

Mr GLYNN:

– They lodged objections, but did not go on with their cases.

Sir Robert Best:

– They wished to do so, but the Commissioner had not time to deal with them.

Mr GLYNN:

– If the” measure is not’ made retrospective in these cases, there will be large refunds of taxation to persons whom it was the intention of Parliament to tax.

Mr SINCLAIR:
Moreton

.- My objection to this proposal of the Government is that the taxation of profits will be retrospective to the year 1915. However imperative the duty may be to contribute towards the revenue of the country from year to year, companies ought not to be taxed on profits that have been distributed.

Sir Robert Best:

– The companies have paid the taxation.

Mr SINCLAIR:

– They have not.

Sir Robert Best:

– As a rule, they have.

Mr SINCLAIR:

– It is the exception I am thinking of just now. It would seem that the Government have not taxed companies on what are purely commercial transactions outside their ordinary business in the past, and now they wish to make the taxation retrospective for three or four years, thus involving the taxation of distributed profits. This will be a hardship in many cases.

Mr Atkinson:

– I do not think the Government really mean to do that.

Mr SINCLAIR:

– That is, without doubt, the effect of the clause.

Mr ARCHIBALD:
Hindmarsh

. - The proposal of the Government seems to me very fair and reasonable. Honorable members are inundated with letters from companies and other trading concerns, urging that these should be exempted from income tax, and, in my opinion, there is nothing tff justify requests of the kind. If a business, whether involving hundreds or thousands of pounds, has shown a profit, it is only fair that that profit should be taxed. If, then, a company chooses to build up a fund, called by what name they please, it certainly ought not to be taxed twice; but I should say that about two-thirds of the funds that are created are the results of profits, and ought to be taxed. We see here the sort of “thimble-rigging” that goes on, not amongst the honest and respectable section of the commercial world, but in that section which always seems to be scheming to defeat the revenue, and whose efforts in that direction should receive no encouragement. I do not pretend to understand the matter from a legal point of view, but, as I say, if funds of this character are created by profits, then the taxation ought to apply. I have a strong suspicion that for many years past shipping companies have built a large portion of their fleets from reserve funds on which no income tax at all has been paid.

Mr West:

– And ferry companies, too.

Mr ARCHIBALD:

– When the Government tell us that the revenue must be guarded, we ought to support them unless we have very strong reason for acting otherwise. If there is one thing more annoying than another to a taxpayer, whether an individual or a company, who conscientiously complies with the taxation laws, it is to find that there are others who are ever seeking to dodge their obligations. Taxation ought to be paid by all those whom it is intended to reach, and if there is something like £500,000 at stake, when we are called upon to do our utmost to meet the expenses of the war, we ought to be very careful before we assist people to obtain remissions.

Mr AUSTIN CHAPMAN:
EdenMonaro

– If the Government make this proposal for the purpose of safeguarding the revenue to the extent of £500,000 we ought to give them our assistance. I maintain, however, that the honorable member for Moreton (Mr. Sinclair) is quite right in his contention, and if this clause is intended to affect co-operative companies and others retrospectively for about three years, we ought to have some assurance regarding it from the Minister. We seem to be legislating in the dark, and further information is eminently desirable. The honorable member for Hindmarsh (Mr. Archibald) talks about “ thimblerigging “ in the commercial community, and it would seem from some remarks we have heard during the discussion that nobody who has any possessions whatever can be honest. From some honorable members we hear plaintive cries and requests that men should not be fined for not sending in returns, because the omission is due to their ignorance, and yet co-operative companies, and other institutions so important to our primary production, are attacked, and have nasty things said about them, if they seek to protect themselves from injustice. I am glad that the honorable member for Hindmarsh ad mits that he does not properly understand this matter.

Mr Archibald:

– I said I did not understand it from a legal point of view. You only understand it as a bush lawyer !

Mr AUSTIN CHAPMAN:

– I even give way to my honorable friend as a bush lawyer, and only endeavour to bring my common sense to bear. We are passing an important measure, the ultimate effects of which we do not know, and we may be very prejudicially affecting graziers and other primary producers who, like other people, are entitled to fair play. I should be surprised if there is any one here who could explain what the Minister really means ; indeed, I doubt whether the Minister knowshimself . The profits in question have already been distributed in pennies and threepences to the small producers, and if we are to come down on these companies for retrospective taxation, we ought to have some assurance that they will receive a fair deal. Unless the point is made clear I shall deem it my duty to vote against the clause.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– I can quite understand that, looking at the clause as it stands, and in view of the. amendment we have already made, it really seems as if we were applying some construction that would retrospectively increase the taxation of the co-operative companies and others referred to.

Mr Austin Chapman:

– Will the taxation be retrospectively collected ?

Mr GLYNN:

– It has already been collected on the assumption that commodities cover land - just as though the words now proposed had been included in the section - but because of the fear that hereafter, in imposing the tax, the question might be raised whether commodities do include land and other things sold, the amendment is intended to make the position clear. I can give the assurance that not a penny more taxation will be levied on these companies than they have already paid.

Mr Charlton:

– It will not make any difference to co-operative companies ?

Mr GLYNN:

– Not the slightest. I did not explain the retrospective effect on co-operative societies until the honorable member for Moreton (Mr. Sinclair) and the honorable member for Eden-Monaro (Mr. Chapman) raised the question. I can only give the assurance that the moneys have been already paid by the societies on the assumption that commodities ave covered, and we are only proposing to make the phrasing more clear for the future. In reply to the question by the honorable member for Kooyong (Sir Robert Best) regarding the Meares case, the retrospective provisions of the Act will not apply to cases in which verdicts have been obtained, because we shall never interfere with the judgment of the Court. The main object, therefore, of this provision is to prevent the Treasury having to refund money that has been already paid. Amendments made in the clause have necessitated a re-drafting, and I move, therefore -

That all the words after the words “ Principal Act,” line1, be omitted with a view to the insertion of the following words in place thereof : - “made by paragraphs (e) and (h) of” section 2, section 5, paragraph (d) of section8, and paragraph (b) of section 10 of this Act shall be deemed to have come into operation on the date of the commencement of the Income Tax Assessment Act 1915.

The amendments of the principal Act made by paragraph (d) of section 6 and by section 11 shall apply to assessments for the financial year beginning on the first day of July, One thousand nine hundred and seventeen and all subsequent years.

Theamendments of the, principal Act made by paragraphs (c) (d) (f) and (g) of section 2, paragraphs (a) and (b) of section 6, section 7, paragraphs (a) (c) and (f) of section 8, paragraph(a) of section 10, and by sections 14 to 23 (both inclusive), and by seotion 34 shall apply to assessments for the financial year beginning on the first day of July, One thousand nine hundred and eighteen and all subsequent years.”

The substituted clause will cover the amendments, that have been already made, and will involve no alteration in principle, except that it will bring the clauses dealing with penalties into force as soon as the Bill is passed. As the Bill has been drafted, the enforcement of those penalties might have been postponed to a period which was not intended.

Mr TUDOR:
Yarra

– I guarantee that no honorable member understands the effect of the clause which the Minister proposes to substitute. We are making portions of this legislation retrospective to the commencement of the Act in 1915. We have already passed clauses which, we were told would relate only to subsequent collections, but we find that, according to the substituted clause, those provisions are to be retrospective. If we are making legislation retrospective, every honorable member should have an opportunity of knowing the exact effect of what we are doing. The proposed amendment should be circulated amongsthonorable members, and, in the meantime, the clause should be postponed.

Mr GREGORY:
Dampier

.- The Minister has promised to recommit the Bill, and I think it would be wiser to include this proposed substituted clause in the recommittal. Then the amendment he desires to make can be placed on the notice-paper, and honorable members will have an opportunity of seeing its effect. I protest strongly against an amendment such as the Minister has read being pushed through the Committee without a copy of it being in the hands of honorable members.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– It might suit the convenience of honorable members to pass the substituted clause now, so that it can be printed in the Bill, and then I shall move for its recommittal. The first part of the clause deals with what the Committee have already validated, and the second part deals with matters such as the exemption of horticultural societies, which was urged by honorable members last year. We are constantly making the Bill retrospective for the benefit of those societies. This clause is only carrying out the promises I gave to the Committee. I therefore ask honorable members to agree to it now, on the understanding that it will be recom mitted.

Amendment agreed to.

Clause, as amended, agreed to.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

– I move -

That the following new clause be inserted : - “ 43a. After section61 of the principal Act the following section is inserted : - ‘ 61a. A prosecution in respect of an offence against either of the last two preceding sections may be commenced at any time within three years after the commission of the offence.’ “

This is to make provision that prosecutions in respect of offences against certain sections of the Act may be commenced at arty time within three years after the commission of the offence. Under the

Crimes Act the limitation is, I think, one year, hut it was not intended that that limitation should apply to all legislation.

Proposed new clause agreed to.

Title agreed to.

Bill reported with amendments.

page 4622

LANDS ACQUISITION (DEFENCE) BILL

Motion (by Mr. Glynn) proposed -

That the report he now adopted.

Mr TUDOR:
Yarra

– I desire to protest against the action of the Government in taking over these park lands unless they have arranged to make available to the people another suitable area in the same locality. Not a foot of park lands has ever been alienated without the responsible Government putting forward some excuse for their action. The honorable member for Dalley (Mr. Mahony), within whose electorate this land is situated, went specially to Sydney last week to get into touch with the people concerned, and he will inform the House that their view is not what we were told it was. The Minister should give us a definite statement as to how far the Governmenthave gone towards securing other land, in the district, that is suitable for recreation purposes.

Question resolved in the affirmative.

Report adopted.

Standing Orders suspended.

Third Reading

Motion (by Mr. Glynn) proposed -

That this Bill be now read a third time.

Mr MAHONY:
Dalley

.- When this matter was brought before the House previously, the Acting Prime Minister (Mr.Watt) said that the Government were prepared to give another recreation ground in lieu of this park land which is being taken away from the people of Leichhardt for the pur-pose of Ordnance Stores, and the Minister for Home and Territories (Mr. Glynn) stated that the Leichhardt Municipal Council had raised no objection to the proposal, and that so far as he knew the Department was not aware of any objection having been raised by thepeople of. the district. On visiting ray electorate at the last week-end, I discovered that there was a good deal of objection on the part of the people, and the mayor and town clerk of the municipality assured! me that when they received the notification from the Department, and the Gazette notice from the Department, they took it that the whole matter was finalized, and that no protest on their part would be of any avail. They further assured me that they had had no intention of agreeing to the proposal. On learning this, I asked the mayor of the municipality to put the views of the council in writing, so that I could place them before honorable members, and in furtherance of that request I have received the following letter signed by the town clerk of Leichhardt -

Referring to the interview of His Worship the Mayor and myself with you this morning respecting the matter of the acquisition of certain park lands in this municipality by the Commonwealth Government, I am directed to inform you that this council did not formally protest against such resumption, as it understood that, at the date of the receipt of the first intimation thereof, the transaction had been completed, that is to say, the departmental communication covering such intimation was under date 10th April, 1918,whilst the specific proclamation of the acquisition was published in the Commonwealth Gazette of 18th March. Some day or two only before 10th April, an officer of the Government interviewed the mayor on the subject, and gave him to understand that due compensation would be made by the Government in respect of the area thus taken. For these reasons the council did not consider that a protest would be effective, although it was, and is, most emphatically of opinion that the Commonwealth should provide another area for public recreation purposes in lieu of that resumed, so that the park lands of this closely populated municipality shall not be curtailed. When it is remembered that the population of the municipality is over 30,000, and that it now has but one recreation ground (exclusive of the one under notice), and that at the extreme northern end of the area, the importance of this aspect will be apparent. It is recognised that difficulty may be experienced in securing another area of the size in the municipality, and I am, therefore, to suggest that the substitution might take the form of the conversion of the area known as the Balmain Cemetery into a recreation ground. That area comprises some ten acres, situated at Norton-street, Leichhardt, in about the centre of the municipality. For many years the cemetery has been closed against burials, and the graves and area generally are in a dilapidated and unkept condition. It is in a main thoroughfare traversed by a tramline, and is right in the heart of dense population; so that from all points of view its continuance is very detrimental to the locality. The area is at present vested in this council, subject to certain restrictions as to its use, which might possibly, in the hands of the council, require adjustment by State legislation, and, further, the removal of bodies therefrom would have to be provided for; but, on the oilier -hand, the purchase of land would be avoided, lt is felt that such matters should not be incapable of adjustment, and I lim, therefore, to suggest it to you as a practical means of overcoming the difficulty referred to.

The site suggested by the council is an admirable one. It is a burial ground containing 10 acres which has been closed for years. If the Government who are taking away the people’s park will undertake to meet the expense of removing the bodies and the tombstones in the cemetery, and will vest the area in the council for the people of the district, I shall be prepared to vote for the third reading of the Bill. The suggestion put forward is a very fair one, and only carries out the offer made by the Acting Prime Minister. If the Minister will give me an official communication which I can forward to the municipal council stating that the Government will meet their wishes in- this matter, there can be no objection’ to the Bill.

Mr BAYLEY:
Oxley

.- As one who has always been .opposed to taking away park lands from the people, I made it my business to visit the electorate of the honorable member for Dalley (Mr. Mahony) last week-end, and found that the area which it is proposed to acquire for the purpose of Ordnance Stores is altogether unsuitable for park purposes. It contains about 5 acres of park land. I understand that it is the intention of Ure Government to resume another 5 acres which will increase the area to 10 acres. The land borders on the Leichhardt Canal. It is altogether too narrow for recreation purposes.

Dr Maloney:

– Not for a playground for children ?

Mr BAYLEY:

– I rise to support the suggestion put forward by the honorable member foi- Dalley because I realize that the site chosen by the municipal council is far more suitable as a playground for children. The area to be acquired is not more than 300 yards from the Leichhardt Canal, and is right at the extreme end of the suburb, whereas the cemetery which it is suggested should be taken in exchange is situated exactly in the centre, and is far more accessible to the children and residents of the district. I sincerely trust that the Government will see their way clear to give effect to the transfer, because if it be carried out, not only will residents of Leichhardt not be deprived of park lands, but they will also be benefited by- it.

Mr FENTON:
Maribyrnong

– I object to the whole proposal contained in this Bill, notwithstanding the fact that the honorable member for Dalley is prepared to accept another area in lieu of the park which the Government propose to acquire for the new Ordnance Stores in Sydney. We shall require to establish Ordnance Stores in all the capital cities of the Commonwealth, and at present the buildings used for the purpose are situated upon valuable city areas. The Defence Department have purchased in the different States very considerable areas of land as manoeuvre areas. In New South Wales they have spent a considerable sum of money in the purchase of hundreds of acres at Liverpool Plains. They have also purchased a large area of land at Broadmeadows, about 10 miles outside of Melbourne. One of the reasons given for the purchase of the land at Broadmeadows was that later on the Department would be able to devote a portion of the land to the establishment of military stores.

Mr Sinclair:

– In this case a water frontage is wanted.

Mr FENTON:

– Why?

Mr Sinclair:

– The Department does not say.

Mr FENTON:

– The Naval and Military men never do say why they want a particular thing. They are quite prepared to pick the eyes out of a city park if it suits their convenience.

Mr Atkinson:

– I should say that water frontage is required for the convenience of transport.

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

– Convenience of transport by rail and water is desirable.

Mr FENTON:

– There is a railway to Liverpool. I remind honorable members that there is no railway connexion with the Ordnance Stores at South Melbourne. Everything has to be carted from the railway to those stores. Later on, I understand that the Ordnance Stores for Melbourne will be established on some of the land purchased at Broadmeadows. I have yet to be convinced that it is essential that military stores should be in close proximity to the general Post Offices of our principal cities. The Defence Department are already in possession of land .upon which Ordnance Stores might be established in New South Wales.

Mr Austin Chapman:

– Where?

Mr FENTON:

– At Liverpool. It would appear that a different policy is to be adopted for New South Wales from that followed in Victoria, and land for Ordnance Stores is to be purchased at considerable expense in Sydney, although the Government are already in possession of land suitable for the purpose of the erection of permanent Ordnance Stores.

Mr Richard Foster:

– The Ordnance Stores to be erected at Leichhardt are to be permanent, according to the statement of the Acting Prime Minister (Mr. Watt).

Mr FENTON:

– That is so, but we have been told that the Camp at Liverpool is to be permanent. I want to know why it should be necessary to encroach upon park lands within 4 miles of the Sydney General Post Office, in order to secure a site for the erection of Ordnance Stores.

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

– Is it not a fact that the erection of the stores at the Leichhardt site would save hundreds of pounds in transport charges.

Mr FENTON:

– No. I do not think that this should be a matter of bargaining between the honorable member for Dalley (Mr. Mahony) and the Government. If this proposal is agreed to we shall have the Naval and Military authorities seeking to invade other public parks to suit their personal convenience, when the purpose to be served might be just as well met by the acquisition of sites outside city areas. In the course of the inquiries by the Public Works Committee it was found that big firms in Sydney and other places were adopting the policy of purchasing land in suburban areas, where sites could be obtained cheaply, for the erection of their large store houses. That is a commercial policy now being adopted in all the large cities of the Commonwealth. If private individuals see their way to save money by the adoption of that policy we may safely take a leaf out of their book. I had no opportunity to speak on the other stages of this Bill, so I enter my protest at this stage. I stand up to protect the few park lands we have in close proximity to our large cities from the invasion of the Naval and Military authorities, especially when the Defence Department already has land better suited for the purpose of military establishments.

Mr HIGGS:
Capricornia

.- I also desire to utter a final protest against the passing of this Bill. I deplore the tendency of modern times to encroach upon park lands dedicated to the public. Wherever we go we find business men taking the most direct and easy way to obtain their ends. They appear to find it the easiest way to encroach upon public parks for commercial purposes. It is characteristic of the age, which is distinctly a commercial one. Thirty years ago it would have been impossible for any Government to take lands which had been set apart for the use of the public. I have no doubt that you, sir, have taken part in agitations against the use of public parks for improper purposes. I can remember the time when the people of Sydney used to take up thefences put round lands there, and I believe that the name of Mr. Speaker (the Hon. W. Elliot Johnson) was associated with an agitation of that kind. We appoint medical commissions to inquire into the best means of maintaining the public health. “How to save the babies?” is a question that is now frequently asked, and we have doctors appointed to take the height and weight, and examine the eyes, ears, and teeth of children in our State schools, with a view to securing a standard of health amongst them which will ensure a virile race of people. In spite of this we neglect one of the best means of keeping children in good health by failing to supply them with sufficient playgrounds attached to their schools and sufficient public areasin which they may play. I do not happen to know the particular site referred to in this Bill, but it is quite sufficient for me that the Government of New South Wales thought it good enough to proclaim it as a public park. Although I may not go so far as to call for a division on the third reading of the Bill, I shall be prepared, if it goes to a division, to vote against it.

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

– I should like to say that I also am totally opposed to any public parks being acquired by the Government or any one else if the lands set apart for the purpose are suitable. On making inquiries I find that the lands sought to be acquired under this Bill at Leichhardt are not suitable for a public park, and we have a promise by the Government that they are prepared to enable the municipality concerned to purchase a more suitable site. The present park at Leichhardt is dangerous to the children, whose health the honorable member for Capricornia (Mr. Higgs) would like to conserve. I have been informed that two children have been drowned at this site owing to the fact that it has a water frontage. The honorable member for Maribyrnong (Mr. Fenton) has made an extraordinary suggestion. At a time when we should be anxious to make every saving possible he suggests that these Ordnance Stores should be established at Liverpool, that the stores should be taken all the way to that place and then taken back to Sydney for distribution. The interest upon the sums which we pay for freight at present would go a long way towards defraying interest upon the cost of constructing these buildings. I am of opinion that the erection of the proposed Ordnance Stores in the park will not constitute a menace to the locality, but will, on the contrary, improve it by securing the utilization of land which is not suitable for recreation purposes.

Mr WEST:
East Sydney

.- I protest against the resumption of this land for the erection of Ordnance Stores. In other suburbs of Sydney ample areas, eminently suited for that purpose, are available, and any of these areas might be utilized without encroaching upon park lands in the immediate vicinity of the metropolis. Everybody knows that the foreshores of Port Jackson have already been alienated to such an extent that the public can scarcely gain access to them. This is a deplorable condition of affairs, and one which evidences great shortsightedness on the part of those responsible for it. It is true that the suburb of Leichhardt has a population of only about 30,000, but it must be remembered that this particular park serves as a recreation ground for at least 100,000 people. I am glad that in 1906 this Parliament, in its wisdom, decreed that no public reserves should be resumed by the Commonwealth. It evidently recognised that the time would come when the House would contain a number of park butchers. I protest against the resumption of this land, which is situated in the most densely populated portion of .Sydney. As a matter of fact, it provides the .people of the suburbs immediately adjacent to it with their only outlet to the water, to which the State Government have provided a tramway to convey the people. For proposing such a rascally move, a vote of no-confidence in the Government is abundantly warranted. However, I can only place upon record my disgust and contempt for the action of Ministers in thus attempting to. rob the people of their reserves.

Mr GLYNN:
Minister for Home and Territories · Angas · NAT

] 3.55]. - I .have been asked by the honorable member for Dalley (Mr. Mahony) whether I ‘ could give an assurance in the matter of the Government helping to secure a park for the people concerned. Originally it was stated by the Acting Prime Minister (Mr. Watt) - and I now repeat it - that no proclamation would be issued for the taking over of this land unless some arrangement was first made with the Government of New South Wales to obtain a park in lieu of the acreage secured. The honorable member has suggested a way of doing that, in the letter he has placed before me, which indicates that there is a cemetery in the centre of the district that could be used as a play-ground after necessary work upon it. The Federal Government could not interfere with the State in its relation to cemetery matters. We could only promise to make representations to the New South Wales authorities. I hope that what was proposed in the telegram which I read out from the representatives of the Commonwealth in Sydney, namely, that the council was favorable to the transfer on the assumption that the State would apply the money to secure another park, will be carried out. All we can do, however, is to ask that the purchase amount be applied for that purpose.

Mr Mahony:

– Will you put that undertaking in writing to me, and definitely state that the proclamation will not be issued unless what yon have indicated is done?

Mr GLYNN:

– Yes, I will do. that, in accordance with the promise of the Acting Prime Minister. I shall suggest that the proposition receive very careful consideration, while remembering, of course, that we cannot dictate to the State.

Question - That this Bill be now read a third time - put. The House divided.

AYES: 26

NOES: 9

Majority … … 17

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 4626

ADJOURNMENT

Pessonal Explanation - Australian Imperial Force : Age of Enlistment, and Parental Consent

Motion (by Mr. Watt) proposed -

That the House do now adjourn.

Mr HIGGS:
Capricornia

.- During my remarks in connexion with the war last evening honorable members became somewhat heated. I found in press reports this morning an interjection bythehonorable member for Grampians (Mr. Jowett) - “ Say a good word for England by way of a change.” That, to me, is a most offensive remark, and the honorable member who made it has been good enough to express regret for what he said. I shall, of course, accept that expression in the spirit in which it. was was made; but the interjection has probably gone to every daily newspaper throughout Australia.

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

– Hear, hear! I read it at Lang Lang at six-thirty this morning. Splendid for the Flinders byelection !

Mr HIGGS:

– Yes, no doubt, and reported in every newspaper in the Commonwealth. I remember reading somewhere in Edmund Burke’s speeches that one could never impeach a nation. That is so true, to my mind, that in none of my speeches throughout my political career will it be found that I have said anything against any nation, whether Japanese, Chinese, Spanish, French - I will not say with regard to the Germans since the war. But there has never been any word of mine against any nation. The majority among a people must be good in themselves; otherwise they, as a nation, would soon become extinct. With regard to England, I have never said anything against her. I have on occasions deemed it necessary to criticise some of the rulers of England, because we cannot forget- I do not want to go into thesemattersat this particular time - that,prior to the war, there were from 10,000,000 to 12,000,000 people in England who were unable to get enough to eat. But I have never said anything against the English people. Indeed, I could not, because my people on my father’s side came from Cornwall, and my relatives there would be extremely pained if they read the interjection by the honorable member for Grampians (Mr. Jowett), “ Say a good word for England, by way of a change” - because, no doubt, they would conclude that I have been continually attacking the English people. I hope the press will be good enough, since no doubt theypublished the interjection of the honorable member throughout Australia, to report what I am saying now. I have never said anything against England.

Mr JOWETT:
Grampians

.- I rise to support the remarks made by the honorable member for Capricornia (Mr. Higgs), and to echo his wish, that the press will take full notice of his .remarks to-day, as it did of my most unfortunate interjection last night. Since I made the interjection, I have been deeply distressed, because I realize that a remark made in a careless moment like that cannot be recalled.

Mr West:

– All new members make mistakes.

Mr JOWETT:

– My friends, including the honorable member for East Sydney (Mr. West), and the House generally, are very kind to me in this- matter. I think that the interjection I made last night was offensive and uncalled for. I know that I cannot atone for the pain caused, and 1 can only offer my deepest regret to the honorable member.

Mr BRENNAN:
Batman

.- I do not desire to say anything concerning the matter upon which the honorable member for Grampians (Mr. Jowett) has made such a manly and generous withd ra.wai , but’ I wish to -take advantage of this opportunity - as no other has been afforded to us by. the Government - of entering my protest against the policy of the Government in enlisting youths of eighteen years of age for active service abroad. I have quite a vivid recollection of allegations, levelled more than once against the Labour party bv supporters of my honorable friends opposite, to the effect that the Labour party was the party, of all. others, which had no respect for the sanctity of the home, and I cannot imagine anything mora calculated to break down family life than this proposal of the Government to deliberately offer a premium to the youths of this country of eighteen years of age to disregard the wishes; of their parents- in respect of this important matter of enlistment.

Mr Corser:

– Does the honorable member say that a premium is being offered because the young men desire to serve their country?

Mr BRENNAN:

– When strong men, in the fulness of their manhood - and animated, as they would have us believe, by a burning patriotism, themselves refrain from enlisting, and refrain also from raising the maximum age to enable strong, able-bodied men to enlist and serve their country - seek to induce youths to disregard the wishes of their parents in this matter, I cannot help thinking that this Government and the party that stands behind them desire to fight their battles with children in the front rank, and men in the area of safety. The war has been in progress for nearly four years, and the proposal of the Government now affects a class of persons wh’o were under fifteen years of age when the war was declared, while at the same time there remain exempt from service men who, when this war broke out, were well under 45 years of age - men; in fact, who told us that, at a later stage, they would enlist. I can well understand, the restiveness of honorable members opposite at the thought that the Government are proposing to take children for- active service abroad, and that the new regulation will immediately release a certain class of youths who will now be able to say to their parents, “I am going in spite of you,” and will also enable the Defence Department to say to the mother or the father, “ We are going to take your boy in spite of you.”

Mr Webster:

– The honorable member would not allow anybody to go.

Mr BRENNAN:

– In this chamber, T have heard the former honorable member for Flinders (Sir William Irvine), who is now occupying a distinguished position elsewhere, amidst the applause of members on his own side, deprecate the enlistment of boys of eighteen years, even with the consent of - their parents. I wonder, what his viewwould be now if he were called upon to excuse the position now taken up by the Government, which seeks to take boys without the consent of their parents, without the consent of, it may be, the widow who, perhaps, has said to herself, “ My son wants to go to the .war, and perhaps in a year or two, when. he is twenty-one years of age, when his health, education, and my position, may be such as to justify it, I may be reconciled to the thought of seeing him go.”’ Such a . parent may now be told, “ W© do not care what your views are ia this matter. The boy is- willing ; he is actuated by the spirit of adventure; and is prepared to take the risks of. active service abroad-; so- it does not matter what you, with your riper opinion and better judgment, may think. We propose to enlist him whether you will or not “-

Mr Pigott:

– Let us have conscription to apply to all ages between forty-five and fifty-five.

Mr BRENNAN:

– If the need of men has become so acute that it is necessary to enlist those outside the prescribed ages, let us enlist some active men between the ages of forty-five and fifty. Let us get, into the firing line some of those lipfighters that talk so glibly about the thing in this House and elsewhere.

Mr Webster:

– Some of those between thirty and forty.

Mr BRENNAN:

– The honorable member might just happen to miss me.

Mr Webster:

– That would not be much loss.

Mr BRENNAN:

– No doubt he thought he would include me. I can discover no justification for this departure of the Government, nor do I believe that it has the unanimous support of the Government. I cannot imagine the Acting Prime Minister (Mr. Watt) being favorable to it. I have no ill-will against him, but when I remember his own attitude in regard to the war and his duty to the war, and when I see him there with others in their middle age, strong and hefty, deliberately moving these regulations for the purpose of taking youths against the will of their parents, I cannot believe that it has his approval or his sincere assent. It may satisfy the ambitions of honorable members who, not having been able to obtain conscription, want to go as close to conscription as possible. They have tried the process of industrial conscription, and have experimented with the plan of conscripting our allied friends here whose bodies they have seized, and whom they are attempting now to deport against the will of the majority of the Australian people. Lastly, they have introduced this mean device, the conscription of the mothers and fathers of children whom they propose to take without the consent of the very people whose responsibilities should be regarded and whose views should be respected.

Question resolved in the affirmative.

House adjourned at 4.18 p.m.

Cite as: Australia, House of Representatives, Debates, 10 May 1918, viewed 22 October 2017, <http://historichansard.net/hofreps/1918/19180510_reps_7_84/>.

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