7th Parliament · 2nd Session
Mr. Speaker (Hon. W. Elliot Johnson) took the chair at 11 a.m., and read prayers.
– There are in the Naval Branch, time-expired men who are still being kept on. They have been informed that they are to be taken from Australia on an extended cruise - they do not know where. As they signed for. the period of the war, they desire their discharge, so that they may return to civilian life.
– As I understand the position, these men signed on for three years or the period of the war, and the war will not have ended until peace has been ratified.
– I ask the Acting Minister for the Navy, in connexion with a telegram received yesterday afternoon concerning the position of men who, though volunteering only for the war, are liable to be sent out of the Commonwealth, whether he. can see his way to keep these men back, seeing that, so far as the Navy is concerned, the war is practically over?
– The honorable member’s question is similar to one which was asked by the honorable member for Yarra (Mr. Tudor). The answer is that these men were engaged for. three years or for the period of the war. . I shall make inquiries to see whether they can be retained, or may not be sent at any great distance away from Australia.
– Will the Acting Prime Minister lay on the table the official papers concerning the recently constituted Supply and Tender Board?
– I see no objection to laying them on the table of the Library.
– In view of the proximity of Woodman’s Point, the quarantine station in Western Australia, to centres of population, will the Minister who is in charge of the Quarantine Branch inquire whether arrangements could not be made temporarily for the use as a quarantine station of one or other of the islands near Fremantle ? Failing that, will the honorable gentleman see that the most stringent precautions are taken to prevent communication between the present quarantine station and the adjacent districts, and that all steps’ are taken to prevent quarantined persons from leaving the station?
– I shall be glad to look carefully into the questions that the honorable member has raised, and to consider the possibility of providing temporarily, for the quarantining of returning troops on some of the islands adjacent to Fremantle. The honorable member may rest assured that no steps -which may suggest themselves to the Government as likely to be of value in preventing this disease from getting to Australia will be disregarded. We shall do all that is possible in the circumstances to prevent the introduction of the disease, because we fully realize its danger.
– The Minister in Charge of Price Fixing has informed the honorable member for Brisbane (Mr. Finlayson) that the margin of profit on- sugar for retail grocers is under consideration. Has the matter yet been considered, and, if so, what decision has been arrived at ?
– The matter is still being considered.
Interest in Wheat Pool.
– It appears that the Income Tax Commissioner is now assessing wheat-growers on the full value of the wheat that they have in the Pool. Wheat producers complain that this is’ unjust, and say that they should he debited for the year only with the amount of dividends that they, have received out of the Pool. That appears to me to be only fair and reasonable. I ask the Treasurer if he can see his way to discontinue the present’ practice 1
– I cannot give the promise that the honorable member asks for, because the administration of the Act has been given by Parliament to the Commissioner. I know nothing of the facts, but I shall confer with the Commissioner on the subject as early as possible.
Order of Return - Applications of PARENTS.
– Will the Assistant Minister for Defence kindly ‘state what plan the Government is adopting in regard to demobilization? Are some men being brought back before others ; and, if so, to what men is preference being given?
– I gave the House, a few days ago, the information for which the honorable member asks, but I shall obtain it again, and give it to him.
– -I wish to know- from the Assistant Minister for Defence what is the policy of the Defence Department in reference to the large number of applications by the parents of sons who . are now serving with the Australian Imperial Force overseas?
-The honorable member is not in order in asking a question about a matter of policy.
– Is consideration given to these applications in cases where employment is guaranteed on the return of the men to Australia 1
– The Department has adopted a certain order, for the bringing home of our soldiers/ but applications for the early return of men under special circumstances are given full consideration.
– In view of the early closing of the present session, will the Acting Prime Minister arrange for a debate on the Estimates before the’ House is asked to consider the heavy taxation proposed under the War-time Profits Bill?
– The Government is re- sponsible for the order of business, and must accept their responsibility. I can give no such promise as is asked for. I am desirous of affording honorable, members as early as possible an opportunity to discuss the finances of the year, as provided for in the proposals for expenditure contained in the Estimates.
– Has provision been made for the employment, on their return, of the men who volunteered to go Home as munition workers? Failing employment, will they be provided for until they can get work?
– I shall make inquiries, and let the honorable member know.
– Recently an award was gazetted which was not* applied to certain officers in the Department of Works “ employed under the direction of the Navy, because the definition did not cover their case. Will the Minister for Works and Railways take early steps to bring these officers under that award?
– If the honorable mem-‘ ber will give me fuller particulars, I shall look into the matter.
REMOVAL of Sydney Quarantine Station.
– In view of the expressed desire of a large number of people in and around Sydney for the removal of the Quarantine Station from North Head, will the Minister in Charge of Quarantine have inquiries made regarding the suitability of Broken Bay for a quarantine station?
– I shall be glad to have inquiries made as to the best position for a quarantine station for New South Wales.
– In the absence of the honorable member for North Sydney, I ask the Minister in Charge of Quarantine if he will look into the suitability of Jervis Bay as a site for a quarantine station for New South Wales?
– Yes, I will do so.
– I ask the Acting Minister for the Navy if he is yet in a position to make any statement as to the selection of a suitable site to meet the requirements of naval training at Newcastle? If not, will the Minister, during recess, try to do something to remove the difficulties at present existing?
– The honorable member is aware that we applied for a piece of land from the Government of New South Wales, who declined to let the Department have the land asked for. I then gave instructions to have inquiries made as to other suitable places, but, up to the present, no place has been submitted as suitable. During the recess, I shall have more opportunity to look into the matter, and will see what can be done.
Badges fob Men DISCHARGED before Embarkation.
– I ask the Acting Minister for Defence whether men who had enlisted and were in camp when the armistice was completed will be presented with a badge or emblem of any kind in recognition of the services offered, or will action of any kind be taken in this regard ?
– I will submit the honorable member’s question to the Minister for Defence, and obtain a reply for him.
Case of R. H. Long
– I ask the Acting Prime Minister a question having relation to a sentence imposed upon a Mr. R. H. Long for waving a forbidden emblem. I understand that I may read a letter by way of . explanation of my question. It was addressed to me by the Australian Peace Alliance, and is in these terms -
At the meeting of the Council of the Alliance I waa instructed to draw your attention to the unjust sentence passed, upon Mr. R. H. Long, who is now serving a term of six months’ imprisonment for displaying an emblem which, to him, is tlie symbol of human brotherhood. In doing this, I desire to test if)’ as to tha character and disposition of Mr. Long, whose influence is great, though quiet and unostentatious. The Australian Peace Alliance, as you will observe, is a very representative ‘body, and in all its sections Mr. Long is highly respected. I sincerely trust you will use your influence to obtain his release, and also the discontinuance of the regulation under which he was charged. ‘
I ask the Acting Prime Minister, in view of the ending of the war and the signing of the armistice, if he. will direct his mind to the consideration whether that regulation might not now be repealed?- If it is. repealed, no doubt the release of this gentleman would be speedily secured.
– I will not at this stage deal with the latter part of the honorable member’s question, referring to the regulation, hut I will say, in respect to the first part, that a similar request was made to me at an interview, led, I think, -by the Leader of the Opposition (Mr. Tudor), and representatives, I understand, of Official Labour views, with regard to this particular case, and some others. I then promised an inquiry.
– That was about three weeks ago.
– I have taken the steps necessary in that direction, but the inquiry into some of the cases involves correspondence. I may inform the honorable member for Batman (Mr. Brennan) that as soon as the inquiry is completed, and I am able to deal with the matter, I shall intimate to him the decision arrived at.
– I ask the Assistant Minister for Defence, relative to the thirty-one clergymen, since increased to. thirty-three, who have Deen Drought out to Australia at the expense of the Commonwealth, whether he will lay all the papers incidental to the matter on the table of the House?
– I will ask the Minister for Defence whether he is prepared to do so.
Increase in Price of Butter - Scarcity of Bean and Pollard.
– I ask the Minister in Charge of Price Fixing whether, in relation to ‘the increase in the price of butter, he is prepared to lay all the papers connected with the matter on the table of the House?
– I hope in the course of the day to be in a position to lay the papers on the table of the Library.
.- I ask the Minister in Charge of Price Fixing whether he is aware that in the Tamworth district which is a wheat-producing district in northern New South Wales, it is impossible at the present time to procure any bran or pollard locally, and pig farmers and other people who use these commodities are consequently unable to carry on their industries ? Will the Minister .take steps to see that a regular supply of these commodities may be placed at the dis posal of those who require them? If possible, will the Minister arrange for a supply of second grade wheat for the use of poultry farmers and others?
– I am aware that there is a very great shortage of bran and pollard throughout New South Wales and Queensland owing to the drought. These commodities are in much greater demand at present than under normal conditions. Some of the mills have closed down. I shall look into the matter, and see if it is possible to have these mills operating again, to increase the supply of these articles. With regard to the release of a quantity of lower grades of wheat for feeding purposes, I will consult with my colleague, Senator Russell, and see whether what is suggested can be done.
Effect of Inter-Departmental Transfers
– I - ask the Minister for Works and Railways a question referring to the position of men transferred from the Naval Department at Cockatoo Island to the Department of Works and Railways. I may explain that prior to their transfer these men were entitled to certain annual leave under regulations. Since their transfer to the Works and Railways Department they are being denied the privileges which they previously enjoyed. Is the Minister prepared to give these men the privileges in connexion with annual holidays, and so on, which they previously enjoyed?
– The difficulty in dealing with the matter is that if the men transferred retained the privileges they enjoyed prior to their transfer they would possess advantages not enjoyed by other officers of the Works and Railways Department throughout Australia.
– These men are doing the same work for the Works and Railways Department that they did pre,viously.
– They were transferred from one branch to another. To concede what is asked would mean that a certain number of men would enjoy special privileges not accorded generally throughout the whole of the Works Branch of the
Works and Railways Department. I am in consultation with the Director of Naval Works to see whether anything can be done in the matter.
Resignation of Major Cunningham
– I ask the Assistant Minister for Defence whether he can give the House any information as to the circumstances under which the public have lost the invaluable services of Major Cunningham at the Repatriation Office, and whether he has any answer to make to the complaints made by that officer as to the reasons for his resignation ?
– I suggest that this question should be submitted to the Minister representing the Minister for Repatriation.
asked the Minister representing the Minister for Repatriation, upon notice -
Will he furnish members with a copy of the Report on Repatriation made by Messrs. Baillieu and Williams recommending control by a Commission; also a copy of the report prepared by the Department and furnished to General Pau, as to what has. been done, and what is proposed?
– The report of the Repatriation Board of Trustees was presented to Parliament on 1st May, 1918, and copies were duly presented to honorable members. The number of copies now on hand is not sufficient to permit of a fresh distribution to members, but the report is available in the Library. That report discloses that the Executive of theBoard of Trustees recommended that the Board should be constituted the repatriation authority with a Commissioner or Director as chief executive officer. Messrs. Baillieu and Williams concurred in the continuation of the Board, but recommended three Commissioners instead of one, such Commissioners to be members of the Board, and sit as its executive.
A copy of the statement prepared for General Pau for transmission to the French Government I now lay upon the table of the House.
Ordered to be printed.
asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
asked the Treasurer, upon notice -
– The information desired by the honorable member will be supplied as soon as possible.
asked the Acting Prime Minister, upon notice -
– I shall have the matter brought under the notice of the company referred to.-
Acting Prime Minister, upon notice -
– The answers to the honorable. member’s questions arc as follow : -
Statement by Captain Carmichael.
asked the Minister representing the Minister for Repatriation, upon notice -
Has he noticed a statement in the press cables that Captain Carmichael, M.L.A., stated in London that there was confusion there regarding the return of Australian soldiers to their homes and country, and, as a consequence, the numbers returning arc likely to be restricted to 10,000 a month, notwithstanding that Canadians and others are doing much better; also, that a great deal of shipping is available and could be utilized for speedily returning soldiers and afterwards take primary products hack to Great Britain?
– The press message referred to is plainly only an assertion by Captain Carmichael, and is not justified by anything within the knowledge of the
Government. Ministers now in Great Britain are giving close attention to the matter with a view to arranging the earliest possible return of men of the Australian Imperial Force to Australia.
asked the Acting Minister for the Navy, upon notice -
– The answers to the honorable member’s questions are as follow: - 1 and 2. Until the ships are available it is not possible to say what trade’ they will be engaged in. 3 and 4. I am not aware, but will make inquiries.
– I move -
That the House, up to and inclusive of the 19th instant, shall sit on the Monday at 3 o’clock p.m., on the Tuesday at 11 o’clock a.m., on Wednesday at 11 o’clock a.m., and on Thursday at 11 o’clock a.m.
I do not know that honorable members expect me to elaborate this proposal at any length.
– Why not sit earlier on Monday,
– It is thought that some honorable members who reside in other States might wish, notwithstanding the Friday sitting, to visit their homes during the coming week-end. I trust that honorable members will accept this motion, and, despite the differences of opinion there may. be on other questions, indicate their view that it is desirable to do all the work on the list that is possible before we rise on the date mentioned. [Reference was made yesterday by the honorable member for Cook (Mr. Catts) - if I may with propriety allude to this - to the effect that we propose to sit the clock round, starting at 11 o’clock in the morning. Although sometimes the answers we give from this side of the House might “lead to another impression, I beg honorable members to appreciate the fact that Ministers themselves are only human, and have no more power of physical endurance - in fact, some of us, with the strain put upon us recently, have perhaps a shade less - than honorable members who are not enjoying responsible positions at the present time. I desire to give - and it is the wish of the Government that it should be given - all the time that is possible to honorable members for the consideration of the important measures that are before us. I hope that in that spirit the House will consent to the carriage of this motion.
.- The honorable gentleman states that it is the intention of the Government to do all the business possible between now and when the House rises a week to-morrow.
– Eleventh-hour repentance !
– It means sitting from 11 to 11, with power by the Government to bring on new business after 11.
– We shall come to that matter later on.
– The first item on the business-paper is the War Precautions Act, and, probably, the second reading may be accomplished before lunch. An adequate consideration of the War Precautions Bill alone - to say nothing of the Estimates - would more than justify us in remaining here for a longer period than a week and one day, notwithstanding that we shall be called upon to sit all round the clock. Of course, I recognise the difficulties in which Ministers find themselves, and I specially sympathize with the position of the Acting Prime Minister, who is doing more work than is any other Minister.
– That is always the case.
– I admit that. It is absolutely impossible, I repeat, for us to deal with all the matters which are listed for our consideration before the day upon which it is intended that Parliament shall rise.’
– Move an amendment to the motion.
– What is the use of doing that? The responsibility of saying how much time shall be accorded to the consideration of any measure that may be brought before us rests entirely with the Government. The Estimates, which were prepared while the war was in progress, provide for an expenditure of £ S0,000,000 or £100,000,000, and we shall be expected to pass them after a few minutes’ discussion, not when fifty or sixty members are present, as there are now, but probably when only a very few members are present, and when some of them are asleep. That is not the way in which we should transact the business of this country. Then, in connexion with the Bill under which it is proposed to grant a pension to the Chief Justice of the High Court, we are invited to adopt a new procedure. I have nothing whatever to say against the distinguished occupant of this office. It is the principle of the measure with which I am concerned, and the fact that it will in the future be quoted as a precedent. We have been told that the Wartime Profits Tax Bill will be discussed chiefly by Corner Ministerialists, . and that the measure does not interest honorable members upon this side of the chamber. May I point out that it does interest us, and that, if a wrong principle be adopted in it, we shall be as much responsible as will honorable members opposite. Then there is the Ministerial statement which was made here last night - a statement involving the honour of the whole of the members of this Parliament. Is that to be shelved and thrust aside until we meet again? I know that Ministerial statements, which usually conclude with a motion “ that the paper be printed,” are frequently relegated to a position at the bottom of the businesspaper, with the result that debate upon them is rarely completed. I know that, during the last Parliament, I secured the adjournment of the debate upon three such motions. But surely a similar fate is not going to befall the Ministerial statement which was made last night. I have no desire to say one word which will prejudge, or prejudice anybody in connexion with its subject-matter. But the statement is of too serious a character to permit of its consideration being deferred for two or three months. It would be far better for the Government to candidly confess that there is not sufficient time before we rise to deal with the measures with which they desire us to deal, and to say that, in the circumstances, and having regard to the importance of the issues which confront us, it is their intention to call Parliament together early next year. My recollection is that we met either on the 9th or 16th January this year. Yesterday I urged Ministers to agree to the postponement of the consideration of the War Precautions Bill. There is no real urgency about that measure. The Act which it seeks to extend is already in operation, and will continue in operation until peace is declared. The Bill may very well, therefore, be allowed to stand . over until next year. Let us deal with the Estimates, and re-assemble early in the New Year to consider the problems connected with peace, which will then demand our presence here.
– The honorable member has been a long time in Parliament. Has he ever seen a different condition of things at the end of a session?
– I have been in Parliament a long time. I have attended the sittings of this House on more days than has any other honorable member. Since the first Parliament met, in 1901, I have been absent for only about eight sittings.
– You are a lucky fellow.
– I have been very fortu nate in that I have enjoyed good health.
– And the honorable member has lived alongside Parliament House.
– I recognise that. In my judgment it will be a long time before we remove the Seat of Government from Melbourne, notwithstanding the opinion of the honorable member for EdenMonaro (Mr. Austin Chapman). There will be no discussion of the Estimates in regard to Canberra. The items relating to expenditure there will probably be called on about 2 or 3 o’clock in the morning. The honorable member for Henty (Mr. Boyd) has asked me whether I have ever seen a different condition of things at the end of a session. In reply,
I challenge him to point to any occasion upon which a Government has proposed to deal with so much business in the brief space of one week. The proposal of the Acting Prime Minister is neither fair to the Government nor to honorable members.
– I move -
That the following words be added to the motion: - “And shall adjourn not later than
II p.m. on each day of sitting.”
– Parliament will not tie itself up in that fashion.
– We are asked to sit upon extra days, and if we adjourn at 1.1 p.m. each sitting will then have lasted twelve hours. That, I submit, is long enough even for the youngest member of this House, lt must be recollected that any Bill submitted by the Government to Parliament has previously been considered by Ministers, and that there is no obligation on them to remain here and. watch its progress through the Chamber. They may arrange to take turns in going home at night. There are a large number of Ministers, and they may agree to relieve each other. They can have sleeping berths made up in different parts of the building, and thus they may secure needful rest. But the obligation rests upon the members of a small Opposition,who desire to see that the basic principles of measures are just, to ‘ remain here, alert and watchful, during the whole of the sitting hours of the House: It is quite impossible for any honorable member to sit here for twelve hours and do justice to the subjects that come up for discussion. The Acting Prime Minister (Mr. Watt) says that the House should not tie itself as to when it should adjourn, but that statement is all very fine. The House is asked to tie itself as to the time when it should meet in the morning, but it is the Government who are to decide when it shall adjourn. The Acting Prime Minister has hinted that there will be no all-night sittings, but I have been here long enough to know what happens during the weeks preceding Christmas. We shall certainly have all-night sittings, and if the Government propose that proceedings shall commence each morning, at 11 o’clock and that there shall be all-night sittings, they might just as well move to have the whole of the business put through on the closure at one sitting as expect that the matters brought forward will be properly discussed. It will be impossible to give them proper consideration. I notice that more business has been added to the notice-paper. The War Precautions Bill should stand over. The Act it seeks to extend will not cease to operate before the House meets again, so that there is- no need for pushing it through before Christmas. Also, there is nothing urgent about the Chief Justice’s Pension BUI. From what I hear of the injustice brought about in certain exceptional’ cases by the war-time profits tax, I think that the Bill dealing with that matter is one upon which honorable members should devote a certain amount of time in order to lay down more equitable principles upon which the tax should operate, and the question of administration mentioned yesterday is an urgent matter that should be disposed of; but’, with the exception of the Estimates and the Wartime Profits Tax Assessment Bill, there is nothing on the business-paper which could not just as well be dealt with three months hence as in the coming week. The matters I have mentioned are all that we should be asked to consider before Christmas. The Estimates should certainly be given full consideration. The practice of rushing money through Parliament at the rate of millions a minute should cease. There can be no proper oversight of public expenditure when the Estimates are rushed through as continually occurs. It is a wonder to me that graver scandals have not arisen, because lack of supervision in regard to the, expenditure of enormous sums of public money must create the very circumstances which lead to such undesirable happen ings in public life. I ask members of the Government party to join us in carrying this amendment.
– I am quite in sympathy with the desire of the Acting Prime Minister (Mr. Watt) to sit the longest hours possible consistent ‘with reason, and I shall help him to keep a House, but I am extremely disappointed that we are not likely to deal with all the measures before Christmas we hoped to be able to consider. The Acting Prime Minister, in reply to the honorable member for Wimmera (Mr. Sampson) said that the Government will take the full responsibility pf arranging its own order of business.
– It would not be worth its salt if it did not do so.
– Of course. I entirely agree with the Acting Prime Minister; but, without seeking to hinder Ministers in accomplishing their desire to complete certain business before Christmas, I want to remind them that, while they have responsibility in this connexion, honorable members generally also have a responsibility.
– Hear, hear! Discharge it.
– It is my desire to discharge it. Therefore, I urge the honorable member to make a selection of the measures that are urgently needed before Christmas and leave the others to be dealt with after a month or six weeks’ relaxation.
– What does the honorable member mean by relaxation?
– Relaxation from parliamentary work. It will enable Ministers to apply themselves to their office work, which, I understand, is very pressing. I have never hindered the Government in their desire to carry on the business of the House, but I remind the Acting Prime Minister that when we adjourned in June last we were told that when we were called together again a considerable time would be allowed to enable us to discuss finance and public expenditure.
– I did not mention public expenditure. I mentioned finance. We have spent most of our time on it.
– Finance involves public expenditure, and we have not had the opportunity of discussing it. I feel my responsibility to my constituents, as well as to the people of Australia. The uppermostquestion in the minds of the people of Australia is public expenditure, but we have not been able to deal with it so far, and there seems to be no human probability of our being able to deal with it. In all earnestness, and with a strong conviction of my duty in this regard, I have given more attention to the matter of public expenditure than to any other question. It has never been more necessary to consider it than it is to-day.
Mr.Watt. - Including the matter of wheat advances.
– Yes, and all other advances which the Government have undertaken in a very admirable fashion, not merely for the people interested in wheat, but in the national interests. I urge that the Government should consider the position of a good many Ministerialist members, on whom they are putting a very severe strain.I am one of those who have promised to assist the Government in regard to the War Precautions Act, and I accept the assurances of the Acting Prime Minister (Mr. Watt). But, having done that much, I am not justified, without raising my most vigorous protest, in acquiescing in the carrying on of government by regulation throughout the period in which this Parliament may be in recess - a term, possibly, of six months. I am hopeful that the Government will call honorable members together again about the end of January or during February in order that we may be given a very necessary opportunity to properly represent our people at a time like this, when government is largely a matter of regulation, and not of the exercise of parliamentary responsibility.
– I would not have risen to close the debate but for the speech of the honorable member for Wakefield (Mr. Richard Foster).
– Are you closing the debate?
– To gag your own side!
– The honorable member is not usually rude, but, surely that is an improper remark.
– You are gagging the House.
– I am exercising the right of the mover of any substantive motion to reply when the debate is finished, and if the honorable member for Dalley does not know that, he should read the Standing Orders.
– I rise to a point of order. This debate is open to all honorable members, and before it is closed I want to claim my right to speak.
– You are too late.
– Order! Will the honorable member for Wimmera (Mr. Sampson) resume his seat? The Acting Prime Minister rose to speak. No other honorable member rose for the moment, and the Minister rose in order to reply.
– Several honorable members rose to speak.
– I saw none at the moment when the Acting Prime Minister rose, and no other honorable member called. If an honorable member desires to speak, he should distinctly call when he rises. But I point out that, in any case, it is customary to concede to a Minister the preference over any other when more than one honorable member rises with the intention of speaking.
– I assure honorable members thatI have no desire to close their mouths.
– It is the gag !
– Order ! If there are any further interruptions I shall have to name the first honorable member who interrupts after I have called for order.
– Mr. Speaker-
– Will the honorable member please resume his seat ? He has no right to speak at this stage.
– On apoint of order-
– There is no point of order. The honorable member will please resume his seat.
– When interrupted for the second time, I was endeavouring to state that I had no desire to close the lips of honorable members, and that it is my intention to move a somewhat similar motion, immediately following the passage of the one at present under discussion, which will give to honorable members any opportunity they may desire to speak with respect to any particular feature of the sessional orders governing the remaining hours of our sittings. I am not unmindful that thehonorable member for Wakefield (Mr. Foster), and many other honorable members, have expressed solicitude in regard to the public expenditure of the country. But what I wish to challenge is the implication in the honorable member’s remarks that the Government are recreant to their responsibilities concerning the financial expenditure of the country at this time. I do not take from the honorable member, or from any of his friends on this or the other side of the House, one word of credit for their own feelings and beliefs; nor for a desire to do ample justice to the interests and the views of their constituents. But, if there comes from that kind of remark a suggestion that the Government are blind to that phase of their duty–
– I never said anything to. justify that.
– I said “if”; and I add that then the Government would not be justified in receiving such scathing strictures in silence. I have not intervened on former occasions, but I say, without the slightest hesitation, in the presence of former Treasurers, that there is no man who during the last decade has been at the Treasury who has done as much in connexion with the economy question as I have done.
– It is a pity that such high testimony does not come from an independent source.
– It will, when the facts are known. Meanwhile, I am giving notice of my intention to receive it. And if the honorablemember for Batman (Mr. Brennan) would apply himself seriously to some of the problems to which the honorable memberfor Wakefield (Mr. Foster) has referred, he would be a much more useful member of this House - less academic, and certainly more useful.
– Blarney on the buckle-end of the strap!
– That is the cleverest and the most inappropriate thing the honorable member has ever said.
I repeat, without hestitation, that no Treasurer of any Government has done as much in the direction of economy as I have been able to do ; and if my honorable friend desires to put the microscope on that statement he may visit the Treasury. I invite him to do so, and there he may see what has been done to reduce expenditure at this time. I have not only been able to do substantial work with a meataxe - which is an unscientific way of doing it - ‘but the Government, with the approval of the party, have since appointed, with a view to the more careful review . of the finances of the country, a body of men, as competent as could possibly be gathered from the business world, to go through every item of public expenditure, . and to render as quick and as thorough a report as may be secured in time for the preparation of the next Estimates. My honorable friend, therefore, must not suggest - neither should any honorable member - that because the Government are adopting their own procedure in listing the’ business of the House they are endeavouring to burke discussion. I will stay here as long as any other honorable member. I am prepared to occupy any length of time that may be desired by honorable members to consider item No. 1 of the Estimates, which will involve a full Budget debate, or to consider any individual item of the Estimates. And, if the House desired, I would be prepared to sit longer still. Indeed, if honorable members sincerely desired it, I would be prepared to sit over the Christmas holidays. The Government are not unwilling.
– Do you mean after the holidays?
– No; during or after.
There has been in some organs of the press a vamped up expression of feeling that they are the sole custodians of public credit, and the only jealous guardians of public expenditure. And there are some honorable members, doubtless, who are swayed by feelings of that kind. I say plainly that I have no vendetta against the journalists; but I do not hesitate to add that I would sooner trust members of Parliament to do their duty in this regard than leave it to the critics of the journals. The last time I spoke of this matter I was accused of talking cheap nonsense; but it does not matter what the critics in the gallery may say. I have been long enough in Parliament to know that it is very easy to criticise, but that it is very hard to do all that one’s constituents hope for and expect. It is hard for the Government to live up to their responsibilities in time of peace, but in war-time the position is intensified a hundredfold. If there is any substantial feeling to the effect that the Government are neglecting their duty, I say let honorable members to whom that may apply bring forward a motion and tell the country of the whole business. The Government will then take their own course.
Question - That the words proposed to be added be so added - put. The House divided.
Majority . . . . 14
Question so resolved in the negative.
Original question resolved in the affirmative.
– I move -
That standing order 70 he suspended up to and inclusive of Thursday, 19th instant.
If this motion is agreed to, it will make it possible for the House to take fresh business after 11 o’clock at night. One honorable member has expressed the fear that the removal of this embargo will result in a number of all-night sittings. I say plainly to both sides of the House that I am just as little in love with all-night sittings as is any honorable member, old or young. I appreciate the inroads which such endurance trials make upon the temper and health of honorable members. I have been through my share of them, and I know how ill-balanced honorable members are during all-night sittings, and sometimes immediately after them. The Government do not desire to resort to prolonged sittings; but it must be plain that if we wish to discharge even portion of the important business to which reference has been made, there must be freedom to sit late, otherwise the House will be at the mercy of our Standing Orders. We have no desire to involve the House in allnight sittings; but there is a desire to discharge a certain amount of public business before the House adjourns, and without carrying this motion, the House will be impotent to do’ that.
.- I was glad to hear the Acting Prime Minister say that the Government do not desire to have a series of all-night sittings. No doubt, having sat for about twelve hours, many honorable members will go to their homes, and I ask the Acting Prime Minister to give us his assurance that new measures will not be brought forward late at night and rushed through a small House. There should be an understanding between the Government and the House as to what business is to be dealt with each day. We, in Australia, pride ourselves on the fact that the ordinary working day is reduced to eight hours, and we have some hope of further reducing it to six hours. In Parliament there is no such limitation. But if the Government will give an undertaking to acquaint the House with the business to be taken each night, whilst I do not approve of the methods adopted by the Government, I think we shall have some safeguard against a number of Bills being put through the House when there is only a sparse attendance of honorable members.
– I acknowledge freely and frankly the hard work done by the Acting Prime Minister (Mr. Watt) during the time he has been in control of the House. I also appreciate the fact that as Treasurer he has made some very honest endeavours to reduce expenditure, and I can conceive that, in many instances, he has used the meat-axe in order to lop off big lumps of expenditure that otherwise would have been incurred. But acknowledgment of those services is no justification for the House surrendering its right to review the whole of the public expenditure. Surely no honorable member can say, having regard to the developments that have taken place in the wal situation, that the last word has been said in regard to the finances of the country and the reduction of proposed expenditure.
– The honorable member will not be in order in discussing that question on a motion for the suspension of the standing order which prevents new business being taken after 11 o’clock. On a motion of that kind, the honorable member cannot engage in a general discussion of outside subjects.
– My desire in introducing the question was to point out the imminent danger of the House being called upon to discuss the most important financial proposals of the year in the dying hours of the session, and, perhaps, after 11 o’clock at night.
– The honorable member may draw attention to that matter, but he may not debate financial proposals on this motion.
– It should be possible for the Government, in the interests of good government, and to preserve the rights and privileges of honorable members, so to order the business of the House as to make such a contingency impossible. The Estimates, which are certainly the most important matter that the House should be called upon to consider during the last few days remaining for discussion, should not be placed at the bottom of the notice-paper, as they are now, meaning that they will be “brought on during the last hours of the session, probably after 11 o’clock at night, but at the top of the list, in order that the House may have the fullest opportunity of discussing these important financial commitments, before being called upon to impose new taxation. The House has been most patient with the Government in connexion with its taxation proposals. We have passed Bills imposing additional taxation to the extent of millions of pounds, in order to carry on the Avar, to bring our soldiers back from other parts of the world, to repatriate them, and to provide war pensions. The raising of these millions has been freely authorized by the House before having the opportunity, which it had the right to expect from the Government, to review the finances, and ascertain whether legitimate reductions could be made in expenditure.
– Do you know that on one expenditure Bill this year between, sixty and seventy speeches were made in Committee, to ‘which the Government offered no objection ?
– That may have been.
– I must ask the’ honorable member not to pursue that line of argument. This discussion is absolutely irregular on a motion such as that now before the Chair, however important the subject may be in itself. The honorable member was in order so long as he asked the Government to take certain business before a certain hour of the day, but when he proceeds to discuss that business he is distinctly out of order.
– 1 am sorry it is not possible on this motion to give wider con- sideration to these important questions. The opportunity was lost by the closing of the debate on the previous motion. If I cannot review the situation at this stage,
I shall content myself by protesting against the House being deprived, as i3 now threatened, of its right to the due and proper consideration, on the Estimates, of the public expenditure of the Commonwealth, before it is called on to impose additional taxation, proposals for which take precedence of the Estimates for public expenditure on the notice-paper at the present time.
.- Every member should be prepared at all times, when an attempt is made to interfere with the Standing Orders, to ascertain the real intention behind the proposal. The Leader of the Government has wide power in connexion with the business of the House. He has every opportunity during the day or evening to notify the House what business he intends to take, instead of waiting until after
II o’clock at night to spring on members some measure or motion of which Ave, perhaps, have had no previous knowledge, and which Ave did not expect to be called on at that stage. There is, therefore, absolutely no necessity for the suspension of the standing order in question. The Standing Orders are framed to protect the rights and privileges of members, but members do not appear to rise to the necessity of safeguarding their rights by upholding the Standing Orders. The Government are showing a certain amount of weakness, because evidently their purpose is to spring some measure on us at 11 o’clock at night, and force it through after Ave have had a long day’s sitting. I shall always be prepared to vote to prevent any such infringement of the Standing Orders.
– Why do you say it is an infringement of the Standing Orders?
– Because this proposal is to remove a standing order which protects honorable members, who know that no new business can be brought on after 11 o’clock at night. If the honorable member takes even a cursory view of the position, he will see grave dangers in giving any Government power to suspend this particular standing order. * We all know that in both State and Federal Parliaments the necessity for some such safeguard of the rights of honorable members has been shown on more than one occasion. The Government can very well do without the additional power they are asking for. If they could show the House some cause for suspending the standing order, so, for example, that they could proceed with business which otherwise they were deprived of the opportunity of handling, I would have some justification for voting for a relaxation of a rule which has been found so necessary for the protection of members and the orderly conduct of business. If the Government wish to bring on any measure after 11 o’clock at night the Leader of the Government has the whole of the day and evening in which to intimate to the House what business he proposes to do that day. If he is in any way nervous, or fears that Government business will not be done, or that the House Will not be in a frame of mind to go through a lot of measures, let him put on half-a-dozen measures, and notify honorable members that unless these are passed it will be impossible for the Government to finish up the business. Our experience of giving extraordinary powers to the Government under the War Precautions Act ought to make honorable members very zealous of their privileges. The time has arrived when honorable members should be A’ery careful to guard their privileges most zealously.. One honorable member has referred to the guillotine. I am not particular about the name that is used, but I am certainly strongly against giving the Government power to bring on all manner of business after 11 o’clock at night. It is not a decent way of conducting business or of treating honorable members, and if a vote is taken 1 shall vote against the motion, in view of the powers which the Government^ through the Acting Prime Minister, already possess to arrange the business to be brought before Parliament.
– It appears to me that the House, once more approaching Christmas time, is engaged in the usual farce.
-Order!’ I must ask the honorable member to withdraw’ that expression, which is a reflection on the House.
– I withdraw the word “ farce.” Honorable members who wish to do business in reason able, hours in a reasonable way are placed in a very peculiar, if not” ridiculous, position As the honorable member for East Sydney (Mr. West) has well said, a Government usually takes advantage of an exception-, ally thin House, towards the early morning hours, to bring on very important measures, because at that stage honorable members are “fagged.” I am out for extra sitting days and shorter hours. The Acting Prime Minister said that if it were the desire of honorable members he would be prepared to ask the House to sit during the Christmas holidays; but I believe that he made that statement with his tongue in his cheek. Instead of seeking power to proceed with new business after 11 p.m., the Government should have brought forward a proposal to meet immediately after the Christmas holidays, so that we might deal with the business demanding our attention. In the early months of the New Year most important events, which will have a great influence on the future of Australia, will take place. Our men will be returning in considerable numbers, and the Parliament should be in continuous, session, so that we may do our duty thoroughly in. regard to the demobilization and other arrangements. We should not be asked “to sit at undue length. Surely we can bring to bear some business acumen in the discharge of our public duty, but a proposal of this kind makes us the laughing stock of the people.
– I am opposed to the Government proceeding with either old or new business after 11 p.m. When we gave* them the power’ contained in the new standing order, which enables them to regulate their business in an orderly and business-like way, I thought we should hear no more of all-night sittings. We might readily dispose of the business awaiting our attention if the Government would prepare a time-table fixing . the time at which the discussion on each mea- sure should stop, and associate with that system a reform that is urgently needed) and that is, a reduction in the time limit upon speeches. If that course were, adopted, the Government would be able to deal, with the business awaiting con-‘ si deration without putting upon honorable members the strain which all-night sittings involve. The forces at the disposal of the Ministry are sufficient to . enable them to order their business with? out asking honorable members to remain, here after 11 o’clock at night.
The Acting Prime Minister (Mr. Watt) is not the only member who may . have his tongue in his cheek. The honor-* able member for Cook (Mr. J. H. Catts) spoke pathetically of the strain put uponthe small Opposition ; but the division lists do not show that the strain of late sittings has been borne by many of them.
It is all very well for honorable members who live in Melbourne, as apparently the majority of the House does, to say that those who come from distant States should be summoned here to attend two or three” sittings per week. I should much prefer the House, to meet in the day time, and on additional days per week instead of our being called upon, as we have been during this session, to travel 1,200 miles in order to attend one sitting in. a week. The remedy for the present situation rests entirely with the Government, under the existing Standing Orders, and we should not be asked to remain here all night while those Standing Orders are in force.
.- I feel satisfied with the assurance given, by the Acting Prime Minister (Mr. Watt).
– The honorable member is easily satisfied.
– Not at all. I have never known the Acting Prime Minister to go back on hi 3 word. He says that if we make sufficient progress no new business will be called on after 11 o’clock. The”. Government must have this power, otherwise the whole of the business of Parliament might be held up by two or three members.
– They already have the power.
– They have not. Under this proposal the Government will have a chance to proceed with new business after 11 o’clock if we do not make reasonable progress. The Acting Prime Minister has never “ soldus a pup ; “ and I am satisfied that if this motion be agreed to, he will not take any unfair advantage of us. I candidly admit that I wish to do away with all-night sittings. Such sittings not only impair the health of honorable members, but often lead to incidents that we all regret. I would rather sit every day in the week than be called upon to undergo one allnight sitting in a session. The Acting Prime Minister has given us a certain promise, and I am prepared to give him the same chance that we have given him in the past.
Question - That the motion be agreed to - put. The House divided.
Majority . … 10
Question so resolved in the affirmative.
Debate resumed from 10th December (vide page 9014), on motion by Mr. Groom -
That this Bill be now read a second time.
– I rise with very much reluctance to take up any time in the House at all, owing to the fact, which cannot be gainsaid, that we have before us a session’s work to do before the 19 th of this month. Perhaps one way of emphasizing one’s position is by one’s vote in the House, but this is such a difficult problem that I cannot satisfactorily state my position in that way, and so I propose to occupy a few minutes to explain my views in regard to the Bill. This morning we had from the Leader ofthe Opposition. (Mr. Tudor) and other honorable members opposite a suggestion that it might stand over. But there is so much uncertainty about the whole position that that would be the very worst thing we could do for the business interests of this community, which are so much affected by the Bill. People do not know where they are at present. Parliamentary representation is becoming a farce. I do not know that I can influence legislation or control it in the slightest degree, and I do not know of anybody else who can. I speak with some sympathy for the Acting Prime Minister (Mr. Watt), because he has a very difficult row to hoe. He is representing another man, and we all know that the position of caretaker is a very unsatisfactory one. This morning the honorable member for Wakefield (Mr. Foster), who, in my opinion, is a very generous supporter of theGovernment, rose in an endeavour to place his position before his constituents, to whom he owes some responsibility, but yet we find he was whacked, and practically threatened, for his pains. I take it that the statement made by the Acting Prime Minister was practically a threat, but threats will have no effect upon me. I take up the same attitude as the honorable member for Wakefield. He is responsible to his electors, and so am I. I quite agree with him that we were promised, at the commencement of this session, that it would be practically devoted to the consideration of financial measures. That promise has not been redeemed, because, so far as we can learn, the most pressing financial problems contained in the Estimates are to be discussed in a few hours. When the Estimates are considered, we will be expected to scurry through them and vote millions of pounds iii as many minutes. Honorable members have practically no say whatever in the passing of the Estimates. I say without hesitation that they are a scandal, and when they come before us I propose to move that they be sent back to the Government for reconsideration, and alteration into something like shipshape form. This morning I heard an honorable member interject something about what the peop.e outside were saying. The people are saying that there is too much taxation, and too much government by Boards, instead of by Parliament. And that is what this Bill provides for. The people are saying that taxation has become so heavy that in many instances they are unable to bear it. Yet we must all realize that if the Government intend to pay for this war - and I presume they do - they will be forced, either to find more money by extra taxation, or effect substantial economies’ in administration. But by economies I do not mean the ruthless cutting down of all expenditure, thus causing unnecessary distress in the community. During the last week or two, as the result of considerable pressure from honorable members of this House, the Government have adopted some sort of economy. They have cut down, or postponed, as they call it, a tremendouamount of proposed expenditure in connexion with the Arsenal and the Naval Bases. ‘ They have also cut down expenditure at the Federal Capital to such an extent that it has become a scandal, because works which have been carried out there are falling into disrepair, so that money already expended will be wasted. Are honorable members satisfied with this brand of economy ? Are there not avenues of employment in which the people would be glad to have money expended ? It is up to the Government to do something.
The War Precautions Act was intended for a time of war, and not a time of peace. I doubt very much whether its continuance in times of peace will be constitutional. The Riot Act has been read in this country during times of great violence and public excitement. The’ reading of the Riot Act really means the establishment, for the time being, of martial law. And that is what the War Precautions Act means. It is martial law. We agreed to it because we were then at war, and because legislation could not have been administered properly without it. But are we going to perpetuate it? That is the proposal of the Government. Ministers tell us that, as the Act will expire immediately peace has been proclaimed, it is necessary to provide for the continuance of its operation, so that they may carry out contracts that have been entered into; continue the moratorium, and do other things that have to be done. Suppose we do what they ask. Peace is not to be thought of before March, and probably will not be ratified until June. Cannot the Government introduce before June legislation to supersede the “War Precautions Act? In my opinion, they might well introduce such legislation now. Tho honorable member for Dampier (Mr. Gregory) has made an acceptable suggestion in proposing to extend the operation of the War Precautions Act to the end of June or July, or the date of the declaration of peace, whichever may be the later date, but the Government will not accept that suggestion.
– .Six months should be a sufficient breathing space.
– If within six months we can.not pass the legislation that is needed, we are incapable, and should be sent to the country. Ministers have become so used to ruling by means of regulations that they are’ indisposed to return to the normal state of affairs. We are practically at peace now, and the Government has six months in which to introduce legislation to give effect to the desires of the people. It is the people’s representatives, elected on an adult franchise, who should make the law; legislation, should not be left to irresponsible bodies, like the thirty-four or thirty-five Boards or more - they arc being added to every day- which are now in existence. In the old days, sagacious public servants reported to Ministers concerning public affairs, and Ministers took the responsibility of action. Who takes responsibility now? Ministers do not. That is shown by the attitude of the Acting Prime Minister (Mr. Watt) this morning. We know that he has a hard row to hoe, and occupies a difficult position. I regret that he seems to be rapidly going the way of many others, and that his health is breaking down through overwork. But the honorable member for Wakefield (Mr. Richard Poster), who is a generous supporter of the Government, and has always given it the most genuine help, had my sympathy this morning when an attack was made upon him. Then when the honorable member for Wimmera (Mr. Sampson) endeavoured to get in a word he was shut up. Honorable members are not allowed to express their opinion. However, I propose” to express mine. Although I am a Nationalist, I am not bound to the Government’s chariot wheel. If we continue to carry on government by regulation, with extravagance and heavy taxation, there will be a revolution, at the next election, and most of us will be missing, with the result that honorable members opposite will be in power. I do not desire that. This Government was returned with a triumphant majority, and has been generously supported by its followers. No doubt, Opposition members have heckled Ministers, but, taking al] in all, Ministers have been allowed to do a great deal. They have not asked for the legislation for which they should have asked. I am prepared to vote for the second reading of the Bill on a Government assurance with a view to making in Committee the alterations that have been suggested by honorable members on this side. If those alterations are not made, I shall vote against the third reading. I have no -desire to take the conduct of business out of the hands of Ministers. It would be better to dismiss them altogether than do that. But honorable members’ should declare that the time has arrived for the return to Parliamentary Government, and the abolition of irresponsible Boards. :It is a scandal to propose to continue, in a time of peace, .methods that were justifiable only in time cif war.
– What will these Boards cost?
– That is not being considered. The policy now seems to be to spend and tax. That is a policy which I protest against.
– The objection to the Boards is that they are a substitute for Ministerial responsibility.
– Yes. Ministers seem to evade responsibility, and everything is being done by regula-. tion. The regulations that have been issued are now too many for any one to follow. I am told that there are three big volumes of them on the shelves.
– An honorable member needs a secretary to deal with them.
– Halfadozen secretaries are needed. In wartime anything may be permissible, but now that the armistice has been signed, the brake should be applied. We must consider how our war obligations are to be met. They can be met either by increasing taxation or by reasonable business administration. The newspapers during the past few days have- given evidence that we are not getting that’ kind of administration. .What private company would tolerate the methods that have been followed? I am sure that the Acting Prime Minister will not make the excuse that he has to carry on his shoulders nearly the whole burden of Government. It is a reflection on Parliament that we have to rely largely on one man. My position is that I am quite prepared to vote for the second reading if the Government will give an assurance that honorable members will be allowed to alter the mea- sure in a reasonable way in Committee, or will accept the suggested amendment of the honorable member for Dampier (Mr. Gregory) to limit the operation of the Bill to the 30th June, or the 31st July, or the declaration of peace, whichever is the later date. If the Government will -not accept that amendment, it is a confession that they will not legislate in these matters. We cannot throw overboard the moratorium or existing contracts; but, not being a lawyer - and, after all, lawyers are often the worst judges of the Constitution - I would like to hear some consti- tutionalist in this House say how, in peace time, we can carry on under war regulations. And there is practically peace now, though, of course, there may be much argument yet on the other side.
There is a proposal that another Minister shall go to London. At the present time there are two Ministers there, who are reported not to be on speaking terms, and a High Commissioner, with a salary of £5,000, a big staff, and headquarters erected at a tremendous cost, said to be the home of the Military. It is equivalent to saying that the High Commissioner has not the brains or ability to carry out the work of demobilization.
– Has he not to carry on the negotiations between the two Ministers in London?
– If he has, I should not like bis job. It is a fact that in London at the present time there are six Australian Agents-General, two Ministers of the Commonwealth, and a High Commissioner at Australia House; and if these representatives are not able to carry out the work of demobilization, it is time they were sent about their business, and the soldiers allowed to do the work.
– We are not always going to have two Ministers in London.
– No one knows, for we can get no information. When I ask the Acting Prime Minister (Mr. Watt) to let us know how soon the Estimates will be before us, he refuses to tell us ; and when we ask if a passage to England has been taken for another Minister, there is no information. I am told that if I say much about this matter today, I shall wake up to-morrow to find that some of my remarks are not in Hansard.
We require constitutional government, for we cannot go on under the War Precautions Act and proclamations for ever. People outside are told that the proclamations are those of. the GovernorGeneral, but old Ministers of the Crown and others know that, although the GovernorGeneral’s name appears on many official documents, they probably originate with some junior clerk in the Department, who submits them to the glance and approval of a superior. Then it goes to the Minister, who, in the stress of circumstances, has not time to go into the matter again, and when he does he finds a hornet’s nest in the Department. We have to fight a great number of public servants who have their tentacles in thiscountry. Under the operation of this Act there are now thousands of men who hold that they have a claim to the consideration of the Government. There are, I know, numbers of public servants who are overworked and underpaid; indeed, I cannot understand some of them submitting to the conditions.
– Many of them never work at all.
– There are armies of them doing nothing, and being well paid for it. Yet we hear talk about the rosy time enjoyed by the man on the land, who has to get up before daylight in the cold, and, perhaps, the snow, to milk his cows, while gentlemen in the Public Service arrange what shall be paid for butter, and wheat, and other products. But I am sure that there are many wheat- . growers and others who will thank members like the honorable members for Calare (Mr. Pigott) and the honorable member for Wakefield (Mr. Richard Poster) for the attitude they have taken in this House. I am taunted with always standing up for the primary producers in my district ; but I shall continue to do so, for I am sent here for that purpose. 1 ask for an assurance that weare going to have government by legislation, and not by regulation; if such an assurance is forthcoming, I” shall support the second reading of the Bill, otherwise I shall feel it my duty to vote against it.
Sitting suspended from 12.57 to 2.30 p.m.
.- I move -
That the word “now” be left out, with a view to adding to the motion the words “this day six months.”
I regret that the. Government are not satisfied with the powers they already possess under the War Precautions Act. The preamble of that measure says it is -
An Act to enable the Governor-General to make regulations and orders for the safety of the Commonwealth during the presentstate of war.
In - that preamble the Government have power to make all the necessary regulations and orders to give them complete and absolute power during war time in regard to everythingnecessary for the defence of the Commonwealth,and it was the feeling of all of us who voted for the measure when it was brought before the House of Representatives, on the 28th October, 1914, that the Government in time of war must have absolute power that induced us to consent, with very little opposition, to the passing of the Bill within the space, I suppose, of about twenty-four hours.
– It was less than two hours.
– I remember complaining at the time, as may beseen on page 374 of Hansard of 28th October, 1914. My words were -
I regret that it appears to be necessary to pass this Bill through all its stages in one day.
If those who now, parrot-like; keep repeating that the War Precautions Act was passed by the Labour party would only read the speeches of those who spoke adversely at that time, they would see that the only fear in our minds was, not that an injury might be done to the Australian citizens, but that possibly injustice might be done to those aliens whomwe had invited to come to Australia and make their homes among us. The whole trend of my remarks on the subject was in that direction. I wanted to know from the then Prime Minister (Mr. Fisher) and the then Attorney-General (Mr. Hughes) whether any injustice would be done to naturalized aliens, not by any member of the Government, but by the officers who had to administer the Act. We thought it possiblethat they might be tyrannical towards the aliens who had come to Australia and made their homes here. We never dreamt for a moment that the head of the Government would run amuck as Mr. Hughes afterwards did. Mr. Fisher had been Prime Minister for years, and not only his party, but Australia as a whole, has a great deal of confidence in his common sense, but when he retired, and Mr. Hughes took his place, things were done which no one can defend. Nevertheless, at that time Mr. Hughes gave his pledge. According to Hansard, page 378; of the 28th October, 1914, he said-
In reply to the honorable member forAngas, I said, in effect, that this clause was quite a separate and distinct Bill, and gave authority to the Government to make regulations clothing the Naval or Military Board, or any member of the Forces, with certain powers. The authority conferred on the Government is tremendous, and the responsibility is equally great; but circumstances demand that there should be this power.
It was on account of his repeated asseverations that the War Precautions Act would not be abused that we passed the Bill, as the Leader of the Opposition has said, within a period of two hours. Section 2 of the Act says-
Avar between His Majesty the King and the German Emperor, and between His Majesty the King and the Emperor of Austria, King of Hungary, has ceased.
Those words are quite clear; there is nothing ambiguous about them; the state of war continues from the 4th day of August, 1914, until the declaration of peace; and during this period the War Precautions Act remains in force. The suggestion of the Government is that they require the powers given by the Act at the present time because hostilities have ceased and an armistice has been signed. The general public is under the impression that the war is at an end. It may be, but, technically and legally, the war will not be at an end until the declaration of peace. I submit respectfully, and, speaking as a layman, that the Government already have all the powers they require under the War Precautions Act. that on the declaration of peace all those powers which stand outside section 51 of the Constitution, and the thirty-nine articles enumerated therein, will fall away from them automatically, and that nothing we can do in this House will give them those powers for a moment longer. I take it that any pastoralist . who desires to sell his wool to any other body than the British Government will be able to do so, and that, if an endeavour is made to prevent him, either by the Government or by any of its officers, and he has recourse to the High Court, that tribunal must give a decision in his favour.
In 1916 there was a doubt as to whether the Commonwealth Government had power to fix the price of sugar or the price of bread. I was Treasurer at the time, and, having taken over the control of sugar from the Prime Minister (Mr. Hughes), I was confronted by some shopkeepers, who said that they declined to sell sugar at 3½d. per lb. I consulted the Crown Law officers as to whether the Commonwealth Government had the right to fix the price of sugar, and they said that, in their opinion, we did not possess that power; but I paid no attention to their opinion, and the Government, at my request, issued a regulation fixing the price of sugar. We were supported in the view that the Commonwealth had the power to fix the price of sugar, and make it an offence for any one to refuse to carry out our order, by a decision of the High Court to this effect: that if the Commonwealth Government in war time were prepared to say that any action on their part was necessary for the defence of the realm, the High Court would hesitate before declaring it unconstitutional.
The ActingPrime Minister (Mr. Watt) has indulged in a number’ of alarmist phrases quite in keeping with the methods of exaggeration adopted by the Prime Minister (Mr. Hughes), in order to secure a continuance of the large powers which have been grossly abused by certain Ministers, and he selected the moratorium powers as those which were most necessary for the purpose of saving the Commonwealth from the dreadful disaster which would ensue from a. financial panic, if mortgagees sought to foreclose on mortgagors. He spoke of the untold millions that were involved. He spoke of the banks being put into a very difficult position, because outside their charters they had advanced moneys to their employees to subscribe to war loans. If that is the whole of his trouble, I may point out that the Commonwealth already has the power, under the Constitution, to deal with banking, and that if it is desirable that a Bill should be passed authorizing bankers to go outside their present charters to any extent, we have the power to pass such a measure. Of course, the general public has every sympathy with the man who borrows money. Most people are to be classed amongst those unfortunates who ignore Shakespeare’s advice -
Neither a borrower, nor a lender be :
For loan oft loses both itself and friend;
And borrowing dulls the edge of husbandry.
Naturally, there is a great deal of sympathy for the man who borrows, and very little for the person who lends, money. However, the moratorium powers have been abused. They have been abused by the Prime Minister (Mr. Hughes). Whoever heard of a more dreadful thing than the Prime Minister’s action in availing himself of the moratorium in order to avoid payment of his just debts to the lady from whom he had bought his house? Whoever heard of the moratorium being amended so that the mortgagee would be required to prove that the mortgagor had sufficient means to pay? That was done by the Government to allow the mortgagor to escape his obligations and in order to place upon the mortgagee the responsibility of proving that borrowers had the money to pay. It was not necessary for the mortgagor to prove that he could not pay. I submit that the Government have no power to deal with this matter after the conclusion of peace; but assuming that they have the power, they ought to compel those who have borrowed money to go into Court and prove that they are not able to pay their just debts, that an extension of time ought to be allowed, and that. they ought to be permitted to continue the mortgage at the rate of interest they have been paying.
– The best regulation made by the Government was that providing for the moratorium.
– I concede all its merits during the time of war, excepting with regard to cases such as that in which the moratorium was abused by the Prime . Minister (Mr. Hughes). The Government ought to have gone further and fixed the rates in order to; protect the unfortunate tenants against the landlords. In that direction the Government had an opportunity to exercise some of their vast powers in a just and generous way. I contend that the Government have no power to engage in trade and commerce, to pass a general- company law, to create a Wool Pool or a Wheat Pool, or to deal with any of the country’s products after the declaration of peace. But if they are sincere and earnest in their proposal to protect the producers, distributors, and consumers, they ought to call immediately a meeting of the State Premiers, place before them the position outlined by the Acting Prime Minister, and invite them to at once introduce legislation in their own Parliaments to take over from the Commonwealththose unconstitutional powers which the Federal authority has exercised during the war. If any State Government or Parliament refused to do that, at their door would lie the responsibility.
With regard to the moratorium, the Acting Attorney-General is probably aware that at a very early period after the commencement of the war the South Australian Parliament made preparations to give relief in hard cases like those referred to by the honorable member for Franklin (Mr. Mc Williams) in order to prevent great injustice being done by the foreclosure of mortgages. The South Australian Parliament passed an Act, which was assented to on the 24th September, 1914, entitled “An Act to postpone the obligation to make certain payments,” and is cited as “ The Mortgages and Purchases Postponement Act 1914.” There are sections in that measure providing for the postponement of the due date of payments secured by mortgage and of purchase money, and section 6 gives the Governor power to, by. proclamation, prolong or further prolong the periods of postponement for a specified period. In order to deal with of injustice it was provided that a Judge should hear complaints, and in regard to the rates of interest, sub-section 2 of section 7 reads -
The rate of the interest payable at any time by virtue of this section shall, unless the rate thereof is hereafter agreed upon by the parties before such interest falls due, be -
The lender and borrower could meet before the interest fell due and decide what rate of interest should be paid ; but if they failed to do that, the interest was to be -
That Act contains provision for dealing with all cases that are affected by the moratorium regulations made by the Commonwealth Government. If the South Australian Parliament was prepared to take this step a month after the war started, why cannot every State Parliament be asked to carry on the moratorium after the declaration of peace in respect to all cases of hardship?
We are wasting the time of the Commonwealth in discussing this Bill. The Government will not have a leg to stand on after the declaration of peace, and inevitably, if some State Government does not feel called upon to challenge the Commonwealth’s attempts to invade the sovereign rights of the States, some private persons or companies will do so, and the High Court, which took such a reasonable and common-sense view of the National Government’s authority in wartime - deciding that the Commonwealth must have absolute and complete power, otherwise it would be hampered in its conduct of the war - will assuredly declare that there will be no occasion after the declaration of peace for the Commonwealth to assume the functions which the States themselves ought to assume, and which, according to the Constitution, they only can assume. Members of the Imperial Government have been quoted as having said that as soon as possible the pre-war conditions in the Old Country will be reverted to, and the Government will discontinue the carrying on of certain trading operations. But. there is no analogy between the position of the Imperial Parliament, and that of th Commonwealth Parliament. The Imperial Parliament is a unified Parliament possessed of supreme power;. it can deal with anything. But this Federal Parliament has limited powers, and if any honorable member doubts that contention I urge him to read the speeches of some of the legal gentlemen who have been recently invited by the Government to define our powers, at the time of the constitutional amendment referenda when we were asking for ‘power to deal with combinations in trade and commerce, and with arbitration and other industrial questions. Sir Edward Mitchell; K.C.; was most emphatic in warning the public against conceding to the Commonwealth the large powers that were being sought,, and how those gentlemen and the members of the present Government can now ask the Federal Parliament to take over powers which in 1911, and later, they denied the wisdom of the Commonwealth seeking, is beyond my comprehension. Therefore, I hope the House will agree to the amendment that the Bill be read this day six months, which I confess is a polite way of trying to kill the Bill. If that is carried, and later the Government, after considering the arguments advanced on this measure, are still of opinion that they have constitutional authority to operate these vast powers, they will be able to introduce another Bill of this kind six months hence. ‘ <
I hope to have the support of those honorable members who have spoken in opposition to the Bill. I call upon the honorable member for Eden-Monaro (Mr. Austin Chapman) to vote with me on the amendment. May I suggest, with great respect, ‘ that those honorable members who object from time to time to the Government proposals, will have to answer to their constituents, who will shortly commence to realize that speeches made “ against the Government are of -very little value unless they are supported by votes. Never since I have “been in Parliament have I witnessed -a ‘ more pathetic spectacle than that of the honorable member for Wakefield (Mr. Richard Foster), making this morning a fine speech in criticism of the Government; and then being immediately trounced by the ActingPrime Minister. I suggest that the honorable member ought to resent that sort of thing, and ought not to be carried away by the blarney of the Acting Prime Minister. I think it is Kipling who refers to using “blarney and the buckle end of a strap.” That is a very good way of getting through the world if one can do it. The man who gets the trouncing is so overcome with gratitude when he gets the blarney that he will agree to anything. I hope that the honorable member for EdenMonaro (Mr. Austin Chapman) and the honorable member for Henty (Mr. Boyd) will vote in consonance with their criticism of this Bill. The honorable member for Henty will agree that as soon as peace is declared the powers which the Commonwealth now exercise in regard to many .war-time activities will fall away from us like a mantle. The honorable member for Grampians (Mr. Jowett) is so aggressive at times as to remind one of an irate bull, such as one might see on some of his pastures. One would thinkthat the honorable member was dangerous. I have seen him with his head down as if ‘about to charge, but he never does. After due consideration, apparently, he always comes to the conclusion that he had better not vote against the Government. I have no desire to delay the business of the House; we can express our feelings as strongly as we” like, but we need not take up a great deal of time in doing so.
.- I am not sure that the discussion of the measure now before the House is not almost as important as the discussion that took place on the original Bill, which it is designed to continue. This is a matter which requires the very serious consideration of Parliament, and in ‘connexion with it there should be no interference with orderly debate. It appears to me - that the Government, in introducing this Bill, have been to some extent stampeded by reason of the somewhat unexpected termination of the war. Running all through the speeches in favour of the Bill there appears’ to be the thought that peace will be declared immediately, and that this measure, therefore, is a very urgent one. The Government seem to assume that all these precautions will immediately come to an end, and that, therefore, a period of six months of preparation is necessary before we can revert to normal conditions. To my mind, it is unlikely that peace will be declared for several months to come. I am inclined to think that the necessity for the continuance of this measure will disappear before peace is declared. So far as I am able to judge the situation in Europe, there will be a very considerable interval before the Allies are satisfied that it will be safe for them to revert to a condition which would in any way enable Germany to resume warfare. Germany is still obviously unrepentant. She is still prepared to throw obstacles in the way of an early settlement ; still desirous of throwing the apple of discord into the camp of the Allies, so that perhaps before we have arrived at a peace settlement, there may be a separation of the views of the Allies for the benefit of Germany. For these and other reasons I feel sure that peace will not be declared for many months, and that the Government, therefore, have shown an apprehension that is not at all justifiable in regard to a period of confusion occurring by reason of the sudden discontinuance of our war precautions.
We are all agreed that the state of affairs that has existed under the War Precautions Act should not continue a day longer than is absolutely . necessary. With very few exceptions, we all agreed that, in view of the war and the gravity of the situation, the Government should be given these unexampled powers. Since we were so far removed from the theatre of war that our conditions were different, and likely to remain different, from those of countries in the very thick of the conflict, we might very well have hesitated to give all these enormous powers. Parliament, however, was loyal to the Government. The people of Australia as a whole have also loyally accepted the conditions under the War Precautions Act, and have lived under them in a way that is entirely creditable to the community. There is no doubt, however, that irritation has been created by the operation of the Act. Some of the regu- lations framed under it were undoubtedly beneficial and necessary; others cannot have that justification. Some of them were positively mischievous. And yet we are asked to allow all these regulations which have been in operation during the war to continue for a quite unnecessarily long period.
We have handed over to a number of organizations of an irresponsible character the control of the affairs of the country. Parliament has set aside its functions of criticism and watchfulness, and Ministerialists, at all events, have given the Government practically a free hand. Thus the Government, in carrying out the aims and objects they have had in view, have been in a position of almost unexampled freedom and irresponsibility. Having regar’d to the responsibility that > we owe to the country and to our constituents, we. cannot, however, allow such an abnormal state of affairs to continue indefinitely. We must have good and substantial reasons for the continuance of the War Precautions Act. I listened to the very powerful and persuasive speech made last week by the Acting Prime Minister (Mr. Watt), in which he attempted <to justify the introduction of this measure. I am not at all satisfied that the case, even as put by him, was such as to entitle the House to pass this Bill without very serious consideration and criticism. The honorable gentleman failed to make good in several parts of his speech. In one. or two respects I think he overreached himself, and pictured a condition of affairs which was due more to his highly imaginative powers than to any actual foundation in fact.
While 1 do not wish to discuss the proposition at any great length, I agree with a good deal of the speech just made by the honorable member for Capricornia (Mr. Higgs), in which he reminded the Government that the State Parliaments and Governments have certain responsibilities in respect of matters that were necessarily « taken over by the Commonwealth Government during the continuance, of the war. He reminded the House that the States might reasonably be expected to supplement these special war measures of ours with such legislation as they might think necessary now that the war has come to an end. Seeing that the conditions in the various States differ materially, it would be perhaps much better in the interests of all concerned if they were given an opportunity to legislate in regard to matters that we propose to deal with by this Bill, rather than that we should continue to lump them together in the necessarily promiscuous manner of Commonwealth legislation of this kind. To one or two of the matters discussed by the Acting Prime Minister State legislation could not very well apply. . The control of shipping is one of these. I am not sure that the ship-owners of Australia would not be prepared to make a satisfactory arrangement with the Government, even if this law were allowed to lapse.
– They have agreed to do so.
– Then I suggest that such an arrangement would be far more satisfactory than the continuance of the present rigid regulations exercised by a Board that has shown a good deal of judgment and ability in carrying out its work,, but which necessarily restricts the freedom of the shipping organizations, and, therefore, to some extent, their utility as public carriers. Let us also take the question of the sugar control. The Acting Prime Minister reminded us* that it necessarily had to be carefully considered. The whole question, to my mind, requires immediate investigation. In view of the very unsatisfactory state of the sugar position, whether as it affects growers, manufacturers, traders, or consumers, I would suggest that it is about time that a Royal Commission was appointed to inquire into the whole subject. The recess might very, well be employed by a Commission that would give us some information as regards those features of the question to which I have just referred. Certainly the position can no longer be endured by Australia as a whole. The difficulties in the way of production seem to be increasing rather than diminishing. The cost of carrying on the sugar industry has been a heavy handicap on the people of Australia, and if we are not going to come down to a thoroughly business-like level with respect to the whole issue, then I see nothing but disaster ahead for the sugar industry as a whole. I do not want that to happen, but if light were thrown on the question in the way I have suggested it might possibly mean a. new lease of life for the industry, which seems to be limping along very badly.
I do not think that the continuance of the War Precautions Act will benefit the community so far as price fixing is con- cerned. Nothing done under that Act has been more absurd or ineffective. Comparatively few articles have been subject to the operation of the measure in regard to the fixing of their prices, the great bulk of the commodities in daily requirement by the public having been left to the unfortunate and unconscionable effects of the law of supply and demand. Time and again there has been mention in this Chamber of commodities whose prices have become altogether preposterous, and still no action has been taken in regard to them. ‘Speaking for the State of Western Australia, I say, without hesitation, that the community there has been put to a grave disadvantage by the price fixing operations of the Government, which, in some instances, increased instead of decreased prices to the consumer. The price of galvanized iron jumped from £12 per ton to nearly £100 per ton, and yet no action was taken by the Government. Under those circumstances, what can we conclude about the efficiency of the officials responsible for the fixing of prices, or the earnestness of the Government about preventing the exploitation of the community? In my opinion, the whole system is absolutely wrong. Instead of putting upon the consumer the’ onus of showing that prices have been unfairly increased.,- it should have been for the seller to justify the increase. Had a regulation been issued prohibiting a seller from increasing the price of an article beyond 10 per cent, on its ordinary selling price, unless it could be shown that there was need for a still further increase, and imposing salutary sentences on all who acted contrary to the law, the public would have been better protected than by the price fixing methods of the Government.
There are, of course, matters in regard to which the continuance of the conditions created under the War Precautious Act is necessary. I agree that the Wheat and Wool Pools should continue. They are, however, likely to continue without interference under the law as it stands at present. The present indefinite position of the relations of the belligerents that are parties to the armistice is likely to last for another six months, and, as it was to be gathered from the speeches in favour of the measure, that that is all the time the Government requires, I see no necessity for the Bill.
There is certainly no justification for the extension of the operation of the Act to preserve the censorship. The Acting Prime Minister, to some extent, overreached himself, and created a distinctly unfortunate impression, by what he said on this subject. . He spoke of the need of preventing irresponsible and objectionable utterances in certain quarters that might cause offence to our Allies. His remarks have, I think, created the impression that there is in Australia a considerable body of opinion which is hostile in some regards to some of our Allies, or, at least, to some of their interests. As a matter of fact, that is not so. The objectionable utterances and writings that might be made public if the present precautionary measures were abolished are mere insignificant bubbles on the stream of Australian political opinion. To give them prominence by continuing the censorship makes them appear more influential than they .are. The censorship has been abolished as between the United States of America and Europe in all matters affecting the war. This Government, I understand, proposes to do something in that direction. I do not know what has been done, but, at least, as much should be done here as ha3 been done in other parts of the world. The loyal way in which the press of Australia observed the injunction not to publish matter that might be prejudicial to the public interest in the conduct of the war, not only in letter, but in spirit, merits recognition, and it. should, at the earliest moment, be given the liberty which it enjoys under the common law of expressing its views without let or hindrance. The newspapers of the Commonwealth undoubtedly perform a very important function in connexion with the Government of the country, and I am desirous of seeing them restored to their former position. I have the misfortune to be criticised occasionally, just as the Government is criticised, but that is part of the life of a politician and of a Government, and on the whole we have no reason to fear the utterances of our newspapers. As for the one or two organs which represent the views of the extremists of the Yarra Bank, they should be given an opportunity to let off as much steam as they can.
– That is what the honorable member used to do when he was on the Yarra Bank:
– I never spoke on the Yarra Bank in my life. Had I done so, I should probably have told my audiences a few home truths that might not be palatable to such as the honorable member. The safety of the community is not being served by repressing these individuals. If we make martyrs of them, we strengthen their cause. Without a grievance, they are powerless, but with a grievance, especially one which appears legitimate, their propaganda thrives. To my mind, the disloyal elements. in Australia are insignificant, but whatever be their strength, we shall not do well by stuffing a War Precautions Act into the safety valve-. Let persons talk and write as they will, subject to the common law of the realm.. As the bulk of our newspapers and magazines solidly support law and order, the disloyal elements in the community can be entirely ignored. The suggestion that their utterances have any effect upon our Allies is too laughable to consider for a moment. Views such as they express were being published before the war, and will continue .to find publication after the war, but no person inside or outside Australia takes notice of them, except when provocation is given to crime or breaches of the ordinary law, and that the ordinary law can deal with effectively. . “ The question to .be considered in connexion with the Government’s proposal is : how long will it be before we can return to normal conditions? Peace is not likely to be formally declared for many months to come, and, therefore, the measure under discussion is unnecessary. Should peace be declared as suddenly as the armistice- came about, I would agree to the Government being given a little time in which to consider the position. But I am not sure that it would be wise to mention any specific period at which the Act must cease. Under the amendment of the honorable member for Dampier (Mr. Gregory), it would cease in June, or at the declaration of peace, whichever was the later date. It is just possible, however, that the end of June might mean a longer period than we should feel inclined to grant under certain circumstances. We might have a dissolution; and I must confess that the prospect of a general election- under the War Precautions Act is not one that I can regard with very much satisfaction, for I do not think it would be at all desirable. We are entitled, in my opinion, to some more specific indication by the Government as to what is really their mind with regard to the continuance of the Act. If peace conditions are not formally signed until six months hence, is the Government justified in asking for another six months’ extension of the Act? I do not think so. I also wish the Government to seriously consider whether the censorship should not be altogether abolished. These two matters I put forward very earnestly, because I feel they are the true, - salient features of the whole position. If we can get no explanation from the Government of a satisfactory nature, I shall certainly vote’ for the proposed amendment.
.- I do not desire to delay the House long, but, undoubtedly, this measure is one of the most important that has ever had to be considered, and it is only right that honorable members should define their position in regard to it. There has been, and is, a great deal of opposition in the. country to the War Precautions regulations being continued in any shape or form, now that we are in the fortunate position of having the armistice signed; and that’ opposition appears to centre around two sides of the operation of the regulations. One side is their operation,, in so far as restraint is put on the commercial activities of merchants and others engaged in business in this country; and the other relates to the question of free speech and the curbing of the utterances of certain people.- Dealing first with the side as it affects business, it appears to me that the commercial community is being a little maligned and made to appear as taking up an extremely unreasonable attitude. I have had the opportunity of talking to a good number of commercial men, and while they, like, I think f the most of us, are opposed to the regulations which interfere with the ordinary flow of commerce, they recognise that, after having carried on the affairs of the country in a certain way for four years, we cannot at once revert to the position we were in before hostilities broke out. The average commercial man is, I -think, perfectly prepared to be- patient, provided he has some reasonable certainty that the position - is going to be cleared up, and that we are not indefinitely to be controlled by war-time regulations. For my own part - and I think it is the view of most with any knowledge of busi ness - I would prefer to see a Bill brought in with a schedule attached, indicating exactly the activities over which the Government think it is essential to keep some control. But I remind honorable members that we have been in this war and fighting hard right up to the last few weeks; and the armistice has come on us rather suddenly. It is impossible, in the course of a week or two, to give consideration, to every one of these three volumes of regulations that have been referred to, and determine which’ can be dropped and which must be retained. The Government have not had an opportunity to consider that matter, but when they have,- and they bring down a proposal, it should be clear and definite.
I have some sympathy with the Government in the position in which they find themselves ; but may I suggest that some people in this country do not altogether, believe in politicians or in Governments, and the opinion has been very freely ex- pressed that, given another six months of the operation of the War Precautions Act, the Government, at the end of that period, will blandly express their regret that they have not had an opportunity to consider which of the regulations should be abolished.
– That is hardly fair, after the assurance given by the Leader of the Government.
– I remind the Minister that I am only informing the House of what various people in the commercial community think and say.
– I did not mean that the honorable member is not fair, but that those outside are not.
– I am afraid the honorable gentleman will find those outside extraordinarily “ unfair “ from . his point of view, and I am warning him of what they are saying. I urge, the Government to give some indication to the people that they are getting on seriously with their work - that they are shedding their powers under’ these regulations as quickly as they possibly can. As one of the commercial community, I realize that it is a difficult job to drop those powers at once, but there is going to he a very determined opposition if the commercial community find that the Government, if this extension be granted, are not seriously seeking to get rid of the restricting regulations and give the enterprise and ability of the commercial community a fair chance to show what it can do.
Having expressed that view, it certainly appears to me that next July would give to the Government reasonable and ample time in which to think over the matter and get out a schedule of what powers must he retained. I should be very pleased if the Government would accept that amendment, but whether they do so or not, I shall be compelled to support it. If matters are not straightened up by then a Bill could be brought down to extend some of the necessary powers, and that might contain a schedule of those to be retained.
But there is another side - the censorship side. We are all, I think, opposed to the censorship; but my friends opposite had better hear all I have to say on this point before they cheer. So far as I understand it, the censorship has two sides to it. There is the one side that has been referred to, the political censorship, to which I am bitterly opposed, and will do anything I can to fight. We have, however, an assurance from the Acting Prime Minister (Mr. Watt) that the censorship is not to be used politically. Although most honorable members accept that assurance, some have a wavering doubt, owing to the experience they allege they have had. I do not know whether they are justified in that experience or not; but I think they may take considerable comfort unto themselves, because we have a personal assurance from the Government, and more. We know that the acting head of the Government (Mr. Watt) is a shrewd man, and I think his wisdom would stop short of anything in the way of a political censorship now that the war is over, for he knows that it would cause such an outcry in the country that no Government could live under it. At the same time, I do not wish to be understood as in any way suggesting that I do not absolutely accept the assurance that has been, given.
The censorship has another form, and though I should like to. see this form abolished, I am not prepared to see it go at present. We must, I think, retain some power in this country to stop certain persons, and certain factions, from making wild statements that are prejudicial to the interests of the community. Unless some power is retained for this purpose we may have considerable trouble. I entirely agree with the view taken by many people that the best way to stop such trouble is to do what has always been done in British communities, and provide a safety valve in the absolute freedom of press and platform. This freedom has worked well in British history, but I remind honorable members that the reason it has worked so well is that we have ever had a wonderfully sane, well-balanced nation, the good sense of which has always seen to it that extremists do not do very much harm. I suggest, however, that . in this community at present we are not quite in that position. There are still absent more than 200,000 of our best and sanest citizens - the soldiers who have been ‘fighting. I do not consider that normal conditions have been restored here, or that we can allow the safety valve to operate until we have the support and assistance of the views of those who have proved themselves to be such thoroughly good citizens. For that reason we must retain some power - to be used by the Government, but only with considerable discretion - so that statements which may seriously disturb the country shall not be made, and that there shall be an opportunity to hold the community in restraint until the soldiers come back, and can express their views.
– And I hope that you will be satisfied when they do.
– I suggest to the honorable member that I have had considerably more experience with the class to which I refer thanhe has had. Another point a little over-emphasized by certain people is the fact that anything in the nature of censorship restrictions amounts to depriving the people of that British liberty for which our forefathers have fought ; but such remarks come with extremely ill grace from many whom I have heard referring to this betrayal of our liberty, and who yet had refrained from availing themselves of the unique and wonderful opportunity of showing their convictions by going to fight for that liberty when it was imperilled as it had never previously been. Now that the conflict in support of that liberty has been removed from the field of battle to the field of words, many of them are showing a most determined and bold front in the fight for it; but I think I am expressing the views of a large section of the soldiers who have been at the Front in saying that we could do without a good deal of that sort of talk. I am quite prepared to support the Bill on the basis that it is necessary. In regard to commercial affairs, time should be given to the Government’ to consider its position, andshed the various responsibilities it has taken. In regard to political censorship, I say freely and frankly now that I shall do everything in my power to oppose it if I see any sign of it; but I am in favour of the Government retaining its powers in regard to general censorship, provided they are used with discretion, because it is essential, in the interest of this country, that restraint should be put on certain individuals until the soldiers come back.
.- I suppose that this will be the last chance of saying what I have said many times previously in thisHouse, that, although the Government may take no notice of anything said on this side of the chamber, thank goodness, we are speaking to our masters, the people outside. They are the masters, not only of honorable members on this side, but also of honorable members on the Ministerial side. To the Acting Prime Minister (Mr. Watt), who is a student of political history, I say that tyrants, no matter what position they occupy in the public sphere of any country, breed the best organizers.
– The honorable member has always claimed that the best organizers are on his side.
– On this occasion there are a few of them on the honorable member’s side who are helping us. We are quite satisfied that this tyrannous measure should remain on the statute-book; but, naturally, we must protest - and I do so in a most vehement manner - against many of its provisions. The dear old Union Jack is second to no flag in the world. I have lived under it, have done well under it, and am willing to die for it; but there isa political flag under which some of us fight, and its colour is red. That is our party colour.
– It was white at the Perth Conference.
– Even if there is a little white in it, what difference does it make? It would not matter to the Government whether our colour was blue, pink, or green; so long as it was the flag of the workers, it would be hauled down. My advice to any man who believes in the red flag is to get a red handkerchief, wipe his nose with it well, and flutter it well in the breeze, in order to dry it again. If all those who believe in the red flag would follow my advice, we would soon see what the War Precautions Act could do with them. If the Government and the press had taken no notice of the flying of the red flag on the Trades Halls, no one would have been any the wiser. The red flagwas flying over the Brisbane Trades Hall for weeks, and, although I passed the building three or four times a day I did not know it was there until reference was made to it in the press. The Government seem to me to be like a “ bloke “ who has been on the drunk and who has been able to get as much booze as he wanted. They are afraid that if they do not keep the War Precautions Act in force they will not have, in the future, the financial and. political “ drunk “ which they have enjoyed in the past. If ever there was an illegitimate Act it is this measure. Certainly I do not condemn the whole of its provisions. The Government should be clothed with certain powers in perilous times,’ but they have not made use of the Act for war purposes only. They have also used it for political and personal purposes. Many good citizens of Australia are being persecuted under the Act to-day. This is the last country under the sun where a revolution could take place. The honorable member for Flinders (Mr. Bruce) wisely said that the free speech and freedom of the press we en joy in Australia are the safety valves of the community. How many times on the Yarra Bank on a Sunday afternoon have we heard fellows condemning the Government, and going off like a bundle of crackers? But has any one been killed? They simply have a little gathering among themselves, subscribe a few “ bob,” and are quite satisfied with getting a little talk off their chests. The same thing occurs in the Sydney Domain, and in Brisbane. Every Sunday men can be heard advocating some of the most harebrained schemes and forms of government it has ever been my lot to listen to. In fact it is quite a day out, and a pleasure to be one of the crowd of listeners.
– They are just as rough on Labour Governments as they are on other Governments.
– Of course. They are a party to themselves.
– They are always “ agin the Government.”
– Whatever Government is in power they are “ agin “ it. On the Yarra Bank I once heard a description of myself, and if I had not known myself I would have thought I was the greatest scoundrel on the face of the earth. Yet nothing happened to me. I can still walk through the streets of Melbourne in the same old way, and no one interferes with me.
– The honorable member is very lucky.
– If I had. done half of what the honorable member has done I would be lucky, because there are thousands of parents after his scalp on account of his actions as Minister in charge of recruiting. After their political “drunk” the Government are suffering from delirium tremens, and no one is more affected than the Acting AttorneyGeneral.(Mr. Groom), who can see red, green, blue, pink, and every other colour. It is on his advice that the Government seek to continue the War Precautions Act.I agree with the honorable member for Flinders (Mr. Bruce), who says that Ministers should come down to the House and ask for the specific powers they feel they need. Had they done so, I can say, on behalf of our party, that we would not have opposed anything that would be likely to operate for the benefit of the people of Australia.
Goodness knows, we, as a party, have not much to thank the press for, but still we believe in the freedom of the press, particularly our own press. In passing, I may say that there is a censor living on the premises of one newspaper in Brisbane, and every advertisement and paragraph must be submitted to him. This is not the case with other newspapers, but I suppose that the Government will claim that their action in this regard is justified because the newspaper in question would not obey the rules and dictatorship of the censor. Neither will they do so. They have been brought to Court and fined and confined, but still the paper is being produced. As I have said before, it is the exercise of tyranny that has made the Labour movement so strong. It was. brought into existence because of the manner in which unionists were treated in the 1890-1891 strike Our opponents tried to hound us out of the country or starve us into submission, but they forgot that we were made of the same material as themselves, and that British hearts beat in our breasts just as they beat in the breasts of the capitalists. As a matter of fact, we were of sterner stuff than our opponents, because we had an uphill battle to fight, just as to-day we have an uphill battle to fight against the War Precautions Act.
This Bill reminds me of an illegitimate child whose parentage has been denied by quite a number of young fellows who have been summoned to Court to show cause why they should not pay for its maintenance. It is nobody’s “‘kid.” . It belongs to no one. Even Government supporters are running away from it. N.obody. will father it except, perhaps, the honorable member for Darling Downs (Mr. Groom), and he is a silent father ‘ who has not even given it one drink of milk to-day. One by one members on the Government side deny the paternity of the child and “implore the mother - in this instance the Acting Prime Minister (Mr. Watt) - to take it away, wash it, and bring it up again, when they will feed it. Under the War Precautions Act the Government have done some wonderful things. They have stopped persons from waving the. red flag. They will not permit persons to put two holes in a kerosene tin. Before a man away back in Queensland can put a second hole in a kerosene tin he must get permission of the Minister for Defence in Melbourne, and now, at the end, we have this illegitimate “ kid “ whom no one will own except, perhaps, the honorable member for Darling Downs (Mr. Groom). He fathers the kid to-day, but he wishes to get rid of it as quickly as possible. In all seriousness, I ask the Government to abandon the Bill, and to adopt the suggestion of the honorable member for Flinders (Mr. Bruce). If they do that, they will meet with no opposition from this side” of the House, and they will satisfy the disgruntled members in the Ministerial corner. In conclusion, I warn the Government that, although they may beat us in this Chamber and in another place, they will not be able to beat us in the country when they are called upon to face the music. “
.- A good deal of time has been devote/l to this Bill, but its importance warrants every honorable member defining his attitude in regard to it. I, in common with many others,* have. been restive under the system, of legislation that has been in operation for the last four years. Every honorable member has repeatedly felt belittled by the fact that this country was being governed under regulations made by Ministers, and in respect of which. Parliament was not consulted at all. Every private member felt that he was almost a cypher, and that the views which he was returned to Parliament to express on behalf of his constituents were not receiving the consideration which was their due. ‘ At the same time, when considering the War Precautions Act and the regulations made under it, we must remember that Australia stands in an altogether different position from any other country in the world, inasmuch as under the Constitution the Commonwealth has not those powers which other national Parliaments have to deal legislatively with commerce and the various other matters that have been controlled under the War Precautions Act. In that respect the position of Australia is markedly different from that of the United Kingdom and the United States of America, and there was more justification in Australia for this method, of legislation than there could be in any other country. I remind members of the Opposition that, although they describe this Bill as illegitimate, they were the fathers of the original Act, having been responsible for its birth. No doubt, greater powers were contained in it than they, or any member on this side of the House anticipated, but the affairs of Australia could not have been carried on unless some measure of this kind had been enacted, having regard to the peculiar circumstances in which the Commonwealth found1 itself in being without power to deal with various matters, the control of which was necessary in the national interest. I was pleased with the speech made by the Acting Prime Minister (Mr. Watt) ; it removed from my mind a considerable amount of apprehension.
I am satisfied that the honorable gentleman wishes to keep his pledge, and will do everything he can .to get rid1 of the War Precautions regulations as soon as possible. But I differ from him on some points, particularly in regard” tt> the statement that it is not possible to fix a date when the Act should definitely cease. The very fact that we cannot anticipate “the exact date of the declaration of peace is an additional reason why we should fix a date for the termination of the Act. As was pointed out by the honorable member for Perth (Mr. Fowler) and other honorable members, the final signing of the peace contract may be deferred for ‘twelve months, or it may take place at the end of January. “It is necessary that the Government should have some extension of their powers, so that the Act may not stop suddenly at an early date, but the Government should say, “ Before six months we shall be able to come to the House with a full knowledge of the powers that we shall require to operate after the declaration of peace, and we shall ask Parliament to give us by -legislation definite powers in respect of those matters and no others.” The blank cheque which the Government are seeking is too much to ask from this House, and I suggest that the Acting Prime Minister and the Minister in charge of the Bill should consider whether they cannot agree to the .desire of members on this side by fixing an early date upon which the War Precautions Act shall terminate, and, before that date, approaching Parliament for any extension of power which is necessary in respect of certain specified matters. If they will adopt that course, I feel sure that the Bouse will be prepared to give them the power they need. Another reason why the date of the termination of the Act should be specified was given by the Acting Attorney-General (Mr. Groom) when he expressed some doubt as to whether, when the war ends, the Government’s operations under the War Precautions Act will be legal.
– I did not say that.
– Well, there is a doubt in my mind and in the minds of other honorable members.
– We believe we have the constitutional power to do these things, and we have received advice to that effect-
– The Minister said that he called into consultation some of the best legal minds in the Commonwealth, in order that he might be advised as to what powers he had. That statement shows that he must have had some doubt as to his powers.
– In taking this important step, it was” only fair to get outside opinion, in view of the magnitude of the interests involved.
– The Minister was right; but the fact that there is a doubt as to the legality of the exercise of these powers after the declaration of peace makes it more necessary that the Government should start at once to repeal the various regulations, because, if it be found later that the Government cannot legally carry on the operations in which they are now engaged, and that all the regulations, must cease at once, disaster may befall the community.
Strange to say, although the Acting Prime Minister (Mr. Watt) convinced me by his argument on certain subjects, he failed to convince me in respect of those matters to which, I think, he attached the most importance. I refer to the finance regulations and powers. I .may be considered egotistical in challenging the view of a gentleman of the standing of the Treasurer, who, no doubt, is supported by the opinions of the big financial experts in the Commonwealth. But I am emboldened to do so by the knowledge that, of all experts throughout the world, the financial experts have been proved to have been most wrong in their conclusions throughout the war. For instance, I do not see that the flotation of war loans would be helped by a general tightening up of the financial- provisions which curtail investment in new companies and industries. On the contrary, I believe that the war loans would be helped if all those restrictions were withdrawn. At the present time there is a feeling in the community that industry is being stifled, progress retarded, and employment lessened by these restrictions; and I am convinced that the Government would be doing well to withdraw them after giving, say, a month’s notice.
In regard to the moratorium regulations, the Acting Prime Minister drew a woeful picture of what would happen if they were withdrawn, and all the protected debts became duo on the one day. Surely the honorable gentleman would not proceed in that way. I imagine that he would gradually withdraw the regulations, and would ‘provide that all debts would not be payable on’ the one date, but in chronological sequence, and upon the dates upon which they were payable in the years in which they were actually due. If that were done, the vast amount of money that is involved by the protected mortgages and debts would not be required at once, as the Acting Prime Minister feared might be the case. Certainly there would be a three years’ accumulation of the debts due on, say, the 1st of March.
– We should be giving an advantage to some mortgagors over others.
– I differ from the honorable member. Debts that were due on the 1st March, three years ago, would be made payable on the 1st March of next year.
– That would be all right if we had twelve months in which to make arrangements for that; but if peace should be signed at a very early date, and this Act should die in February or MaTch next, the honorable member’s scheme would be of no use.
– I agree with the Acting Prime Minister. Peace may possibly be declared at the end of January, and there would be an interval of a month or so before Parliament could meet and .pass the legislation requisite to give the Government a continuance of the powers they may need. I believe that that arrangement would be disastrous to the country, and for that reason I am opposed to the amendment moved by the honorable member for Capricornia (Mr. Higgs). But the Acting Prime Minister persisted in saying that we cannot fix a date for the termination of the Act. That is the very thing we ought to do.
– I said that we cannot fix a date when different activities will terminate - that date would depend more on conditions than upon the period of time.
– The Acting Prime Minister must know that in the country there is a. considerable amount of distrust as to the extent to which the War Precautions Act and regulations should be withdrawn, and he will dissipate that distrust if he says plainly to this House that, although this Bill cannot be withdrawn alogether he is willing to fix a definite limit to the continuance of the Act, and that, before the date of its. expiry, he will come to the -House and ask for an extension of the Government’s powers in certain specified directions. If- the Government then give reasons for that extension, I believe the House will grant it. I feel sure that the Acting Prime Minister will do himself justice, and will help Parliament and the people if he will adopt that “course. We do not desire that legislation should be passed behind the backs of honorable members. The Government ask us now to sign a blank cheque in respect of some of these powers extending, as I understand they will so far as the metal trade is concerned, over a period of ten years.
– The contracts extend over ten years, but the passing of this Bill will not mean an extension of these powers over that period.
– In clause 3 we have this provision -
Provided that any regulation, order, or proclamation heretofore made, or any provision therein contained, operating by force of its terms for a longer period than six months after the termination of the present state of war, shall remain in force, unless amended or repealed, during the period provided therein.
– That provision is inserted because some of the regulations have been so drawn as to terminate six months after the period of the war.
– I understood the honorable gentleman to say that - in respect of the control of the wheat, wool, and certain other industries it was desired that these powers should be continued for, at all events, two years.
– I did not intend to convey that idea, but I explained, among other things, that long contracts had been entered into.
– I understood the honorable gentleman to say, in’ dealing with the metal trade, that the futures of some metals had been sold for ten years.
– In one line that is so.
– Then that bears out my contention*
– The contract extends over ten years, but none of the regulations under the War Precautions Act will extend over that period.
– Are we to understand that if this Bill is passed the Government will have no power under it to control the wool, wheat, and metal industries beyond six months after the termination of the war?
– Not only is that so, but I said that the six months’ period would give us sufficient time to bring forward, as the honorable member suggested, proposals for specific statutory provisions to supersede the Act.
– If that is so, the Acting Prime Minister surely ought not to object to say, “ We will take an extension of the Act for six months, and if we want it continued beyond that period we will ask for a further extension.”
– That is what the Bill, in effect, does.
– The honorable member says that peace may be declared at the end of January, or that six or ten months may elapse before the peace terms are signed. Under this Act these powers will be operative for six months after the signing of peace.
– The present Act will remain in operation until then, and in this Bill we are asking for a six months’ extension.
– If the Acting Prime Minister would say, “ In any event we shall not ask for an extension of the existing: Act after June next,” then, in view of the promises he gave on the floor of the House, and my belief that he will carry out those promises. I should be prepared to give him this Bill. But unless he can meet me by placing a limit upon the extension of time proposed I feel that I cannot vote for the Bill.
Mr.- Watt. - The honorable member suggests that we should say that the Act shall not continue after the 30th June next. The peace terms might be signed in May, and the peace conditions might determine the character of the legislation that should supersede this measure. The House must give us some “turning round” time.
– I do not recognise much force in that argument. We are actually in a state of peace now, and the Government tell us that they intend to remove without delay as many of the regulations as possible. If 30th June next were fixed as the date to which the operation of the existing Act should be extended the Government would have practically six months of peace conditions before they would have to tell the House what were the precise statutory powers they required in this respect. I ask the Acting Prime Minister to reconsider this matter, and to see whether he cannot meet us by stating in the Bill the exact date upon which its operation shall cease.
.- I was out of Australia when most of the bitterness engendered by the War Precautions Act arose. I was one of the five who voted against the original Bill. I did not believe in giving such unlimited powers even to our own Government, which was then in- power, and it would seem that I and my four fellow-members who took that stand were very nearly right. I cannot understand why the Acting Prime Minister (Mr. Watt J should have introduced this Bill. There are other matters of pressing urgency awaiting our attention. . The Repatriation Act requires to be immediately amended. No one is to blame, because the last amending Bill did not cover all the difficulties to be surmounted in connexion with the repatriation of our soldiers. New difficulties must arise as we go along, and undoubtedly many new difficulties have been discovered, but we have had no promise of an amending Bill.
– Repatriation is outside the scope of the War Precautions Bill.
– Quite so; but since the honorable member for Eden-Monaro (Mr. Austin Chapman) was allowed to discuss the Estimates and many other extraneous matters when speaking to this motion, I do not know why I should he denied the right to refer to the question of repatriation.
– I am not objecting.
– An amendment of the War Pensions Act - particularly as it affects blind soldiers - is also urgently necessary, but we are- going into recess without any promise of an amending measure. We are wasting time in discussing a Bill that might well be allowed to stand over until next session. The existing Act will remain in force for six months after the proclamation of peace.
– Not unless this Bill is passed.
– Should the peace terms be signed sooner than we anticipate there is no reason why the Government should not call upon Parliament to discuss the situation, and to consider whatever proposals they have to make in regard to the control of these activities.
The honorable member for Bourke (Mr. Anstey) and I handed to our local committees and executives our resignations as members of . this Parliament, because we believed the Labour Government were not going as far as they ought to go under the War Precautions Act in fixing prices, controlling foodstuffs, and dealing with profiteering. I feel that the .present Government, also, is only playing with such questions. As soon as peace is proclaimed they will have no power to deal with these and other matters under the War Precautions Act. The Labour party was right in advocating an amendment of the Constitution, so as’ to give this Parliament increased powers. We have recognised for years that the Commonwealth Parliament should have such powers as those mentioned by the Acting Prime Minister last week. The fixing of prices, the passing of adequate legislation with regard to companies, and a dozen and one other matters are quite outside our present limited constitutional powers. On two occasions the Labour party when in power appealed to the people for increased powers for this Parliament, but on both occasions they were unsuccessful. The difficult position in which the Acting
Prime Minister finds himself to-day, in. so far as the control of these activities is concerned, arises from the opposition of his party and its supporters to the extension of the Federal powers as sought by us.
The honorable gentleman has said that he will have a conference with the State Governments in regard to the questions which this Bill involves. The members of our ,party will recollect that the present Prime Minister (Mr. Hughes) induced us in Caucus one night - it was nearly midnight - to agree to the abandonment of the proposed referendum on Bills to amend the Constitution by saying that he would have a conference with the State Governments, who had agreed to surrender certain powers, and to give the Federal Government greater powers than they possessed. The same promise is given by the Acting Prime Minister today.
– The Prime Minister pointed out the extreme likelihood “of our proposals being defeated.
– Yes; but that has no bearing upon my argument. The Victorian Legislative Council, controlled by the wealth of this State, will not give up a tittle of its powers. If the Government wish to do the right thing, instead of allowing the House to waste time in discussing this Bill, they will withdraw it and appeal to the people for increased constitutional powers.
No one recognises more than I do the force of the speech in support of this Bill which was made last week by the Acting Prime Minister. The honorable gentle- man pointed to the financial troubles ahead, and to the dangers which would confront the oommunity if the moratorium lapsed, or if the Government relaxed its control of shipping and the fixation of prices. For a few moments after the conclusion of his speech I . felt that, after all, he was advocating a just cause, and that we should offer no hostility to it. Then I remembered that the promises made by him could be of no avail, since, with the signing of the peace terms, we should have no power to control any of these activities under the War Precautions Act. It would then be possible for the ship-owners to send their vessels into waters where they could earn more money, and for money lenders to take whatever proceedings they pleased in regard to advances made by them.
I have heard many people say that the Act is necessary to prevent the flying of the red flag. One would imagine that that flag had only been heard of in Australia within the last few months. As a matter of fact, in 1904, I carried the red flag into a country electorate and won the seat. I agree with the honorable member for Maranoa that one could not wish to live under a better flag than the Union Jack. To me it is everything. I recognise that we have the freest of Constitutions; but if any party desires to fly a political flag it should be permitted to do so. I would not bother about the red flag; but if others wish to fly it they should be allowed to do so. To many it is more than a sentiment; it is a. religion. It stands, not only for the working classes of Australia, but for the workers all over the world, and if they desire to fly it they should not be hindered. The Acting Prime Minister showed in the very fine letter that he wrote to the Trades Hall that he knows what the red flag stands for. It does not, as some people imagine, stand for a bloody revolution, but it stands for a -revolution in thought, for an alteration of our economic conditions. It is worshipped by a number of our people as a sign of the time to come when the working classes will be the rulers of the world. I believe that time to be not far distant. The world to-day is in a state of chaos. In Russia, Germany, Austria, Bulgaria, Servia, and even France, things are very disturbed, and in Great Britain trouble has been staved off only by broadening the franchise and giving constitutional opportunities for the redressing of grievances. In this country there should be no talk of revolution, because there is every opportunity for dealing with grievances constitutionally, I totally differ from the honorable member for Hindmarsh (Mr. Archibald) in regard to the statement that the people whose opinions are contrary to his should be prevented from talking. By seeking to prevent people from talking, you give them- an advertisement, make martyrs of them, and stimu-
Mr. McGrath. late the growth of their cause. In that way you do more to help those who preach revolutionary methods and Industrial Workers of the “World doctrines than they could do for themselves. You help, too, the growth of this party. Indeed, the Ministry has only to continue its present course of conduct for another twelve months to bring about a reversal of the present position of political parties. The military authorities have been allowed to become the administrators of the War Precautions Act. I would not trust them to deal with any civil matter. Indeed, they are not too competent to deal with Defence matters administratively, as has been shown over and over again. It has been wrong to allow military men to act as censors, and to decide who should be prosecuted for some speech or other. I realize the difficulties of the Ministry, but I believe that more trouble will be created by continuing unnecessary restrictions. E hope that the Bill may be defeated.
.- In listening to the debate* this morning and this afternoon, I have ‘become conscious of a certain suspension of animation in the Ministerial party, and of a feeling of wonder as to what developments are to come, while on the Opposition benches there is an air of expectancy, and the hope there that, whatever may come out of the situation, please Heaven, it may be to their advantage. As if to crystallize the position, the honorable member for Capricornia (Mr. Higgs), after’ two or three firm but temperate speeches had been delivered from this side of the Chamber, leapt to his feet, took his courage in both hands, and moved that the Bill be read this day six months. By doing this, the honorable member -hoped to secure for his party any advantage that might accrue from the fact ‘ that it is strongly felt on both sides that the powers exercised under the “War Precautions Act should be brought to an end as soon as can be done consistent with the public safety.
We are always hearing the words “peace” and “armistice” used loosely, and I wish to put my views of the present international position in order that the House and the country may .understand my attitude towards the Government proposal. It is true that we have not yet achieved peace, that the relations between the great Central Powers and our Empire and her Allies are technically known as an armistice. It is, however, clear that whether the war definitely concludes or not - in other words, whether it leads, to other wars or not - the severity of the conditions of the armistice make it practically impossible for the Central Empires to renew hostilities. Therefore, for the purposes of the original Act I am bound to regard the war as at an end. That Act refers to the Central Empires in the clearest terms, and speaks of powers and potentates that have ceased to be. It refers to the Emperor of Austria and the Emperor of Germany, but it would be difficult for any one to give the address of these gentlemen at the present time. But whilst the war, which brought the Act into operation, is practically finished,we should be wanting in common prudence if we thought that the occasion had definitely passed for the continuance of the exercise of considerable caution on the part of our public men and the country generally, with a view to preventing further friction and trouble.
– Between whom 1
– That is the sort of question that I wish to avoid. I am dealing with this matter on the broadest lines. Honorable members will remember that very shortly after the Balkan Powers had given the old Turk the licking of his life, the quarrelling over the lion’s pelt began, with the result that Bulgaria, which had taken a large share in the fighting, finally found herself in the humiliating position from which the Turk, owing to her action, had been able to partially liberate himself. “When the- representatives .of the Allies meet in the Peace chamber, they will include the representatives of a number of associated peoples that have taken no extremely active part in the war, were responsible for no decisive action on the field, and were not sacrificed to the blood lust of Germany. It is then that German anil enemy influences will play their last card by endeavouring to ‘ create that friction which alone will allow Germany to escape payment, and her late rulers to escape punishment for the crimes ot the last four and a half years.
I feel that from now on, so far as the domestic government of Australia might be affected, the War Precautions Act should cease to operate. In a community with the British temperament, the. greatest element of Safety lies in freedom of speech. But whilst there should be absolute freedom of speech in regard to the solution of our local problems, we cannot be too much alive to the necessity of seeing that there shall be no misuse of our platforms, and of our local quarrels, to create differences between the Allies, whose councils are to decide our future destiny. -In the press, and in public speeches, one learns of the operation of the War Precautions Act mostly in connexion with the censoring of articles and speeches; but, in my, humble judgment, the newspapers, however many cablegrams for which they had paid may have been suppressed by the censors, have” escaped more lightly under the War Precautions , Act than any other trade interest in the community.
– That may be true of one section of the newspapers.
– I do not wish to enter upon debatable ground; I am dealing with the subject broadly. The War Precautions Act has operated along the whole gamut of Australian industry. It has been applied, sometimes, no doubt, with the wisest and most patriotic intentions, to the bafflement and discouragement of industry and enterprise. Sometimes this industry and enterprise was not consistent with the public welfare, though unobjectionable in the days before the war had altered our position in the world. Still, throughout Australia, industry has been fettered for the first time, and it has felt its fetters morS keenly than the newspapers have felt theirs. It has been inarticulate, and unable to voice its protest. The newspapers could bring to the public some slight knowledge of what they were suffering, but the private trader has had no outlet for his feelings. That state of things is dangerous, and should be ended as early as possible.
I wish to place before the House what I think would be a fair thing for the
Government to do;’I would not ask them to do more than a fair thing. I was rather struck by the tenor of the introductory speech of the Acting ‘ AttorneyGeneral (Mr: Groom), from which it would appear that the principal reason for the continuance of the business side of the War Precautions Act lay in the anxiety and desire of all those estimable gentlemen who. are presiding over committees to continue the good work in which they are engaged. When I heard the speech, I became for a moment a Bolshevik. I could see only one end in view, and that was the discouragement of these excellent gentlemen, who, however patriotically they may have carried out their work during the past four years, ought to be got rid of as early as the public convenience will permit, which means a3 early as we can frame legislation to take the place of regulations. But I am bound to say that the subsequent speech of the Acting Prime Minister struck me with very considerable force. He did not make any claim for those estimable .unofficial dictators, but said that we would be in a state of chaos if they were immediately removed. Knowing the Government and the administrators, I am quite satisfied . the honorable gentleman was speaking the truth.
There is just one regard in which, I think, the Acting Prime Minister fell short of what reasonable men might desire. Ho did not, to my mind, express as clearly as he might the view which I and, I believe, a number of other honorable members hold - that the real test of the ability of this Government is how quickly it can divest itself of these powers and the country- of the Boards. It is not a question of fixing some vague point of time, like the signing of peace between numerous contestants who were not, perhaps, the original contestants; it is a question of how quickly we can get rid of the regulations. I should have liked’ the Acting Prime Minister (Mr. Watt) to be able to assure the House and the country that, so far as those business activities of Sir John Higgins and his collaborators are concerned, no fresh enterprises will be indulged in between now and the definite’ conclusion of hostilities.
But I ask myself whether, on amotion of this kind, this is the time to satisfy ourselves: Is this the time to do more than state one’s position? Is this the time to demand pro-, mises or statements ? I think not. Holding the view I do, I think the right time to settle all these points is at the Committee stage of the Bill. I frankly confess to the Government that I shall want this extension of powers very rigidly hedged round when we get into Committee. I shall want a promise as to the non-extension of the activities of those unofficial dictators, and promises as to the non-political use of the powers of the censorship, and I shall want those promises in the black and white of the* Bill. But this motion does not represent the proper time.
It would be- unfair to the Government to hold them to the original Act, bringing’ the powers to an absolute full stop with “peace.” There are many possibilities in Europe. I do not know how peace is to be signed between the original contestants and ourselves, for the Central Empires are in a thousand fragments. Of course, persons representing sections may meet at the Peace table, and bind themselves as representing former integrants of the old Empires, severally and individually, to the fulfilment of the contract. If they do that, peace may come almost instantly; and for that reason I feel that we ought to give the Government some extension of the powers under the Act. I do not ask for this extension in justice to the Government, but mainly in justice to the country. Honorable members must remember that since we entered this .war a number of ordinary principles that govern human economy have changed - only, I believe, for a time, but still have changed - and until we can win back to the old laws of prudence and of supply and demand’ - until we can win back to those principles on which progress in the past has been based - it would not be safe to give free rein to profiteers or other clever men ready to take immediate advantage of the shortness of resources of individuals, companies, or the community. We must first see where post-war conditions may lead us.
I have made my position clear. I shall vote with the Government against the amendment, but I hope it will not be necessary to vote on the second reading. I desire the Bill to be amended in Committee, and the right time to consider a proposal of the kind I have indicatedin which, in my opinion, there should be no politics - is on the Bill as it leaves the Committee - in other words, on the third reading.
Question - That the Bill be now read a second time- put. The House divided.
Majority . . . . 8
Question so resolved in the affirmative.
Bill read a second time, and committed
Debate resumed from 27th November (vide page 8411), on motion by Mr. Watt - .
That this Bill be now read a second time.
.- When introducing this Bill the Treasurer (Mr. Watt) said that it was intended to alter the law in two or three important directions. He told us that persons who were merely acting as commission agents, who, as a gentleman put it in a letter to the. pressthe other day, sell goods, and whose only capital is a pocket-book and pencil, were to escape “ scot free,” and that this would mean a loss of about £20,000 or £25,000 to the revenue. I do not think that he made out a very good case for exempting these people. I have forgotten for the moment how long this measure is to operate.
-It is very clear from the Act that it applies to the profits of any business until the 30th June next after the declaration of peace.
– That means that if peace is not signed until after next June the tax will operate until June, 1920, or the next June after the declaration of peace. As in the case of the additional land tax, a termination for the operation of the tax is fixed, whereas apparently the tax on kiddies’ entertainment tickets is to have no termination.
When we were discussing the main Bill, I. raised several points of objection. I objected that the Bill did not come into operation speedily enough, that the amount of profit it allowed people to make was too great, and that the exemption was too high. None of these objections have been removed by the Bill before us to-day: Certainly the Treasurer intends to deal effectively with excessive watering of capital, and excessive advertising.. If a firm spends £1,000 a year in advertising where it previously spent not more than £100 a year, the Commonwealth, which would have taken 75 per cent. of the difference, namely, £900, is really paying 75 per cent. of the cost of the firm’s advertising. I do not think that persons should indulge in excess of advertising with the object of evading payment of the war-time profits taxation. It is quite possible that during the past two or three years metal companies, whose product has been used in the prosecution of the war, have made excessive profits, but according to the Treasurer, mining companies, which are to be exempted, are to be specified by proclamation. I think that they should be specified in the Act. If one Government can exempt certain businesses from the operation of the Act it will also be within the power of another Government to remove that exemption by proclamation. Parliament should be able to deal with the matter by having the exemption specified in a Bill. The main com- plaint of honorable members during the l ast few sittings has been that too much power is given to the various’ departments to frame regulations . and bring various provisions of Acts into course by proclamation. It is well known that Parliament has never the opportunity of discussing proclamations or regulations framed in this way. Therefore, I trust that the Treasurer will state what mining companies are to be exempted, and furnish, the House with reasons for exempting any class of business from the operation of this tax. The Treasurer, speaking of the profits of agencies, said -
The profits of agency work arising exclusively from commissions on purchases or sales, wherein little or no capital is required, are exempted.
I see no reason why they should be exempted.
We have heard complaints that the tax has hindered the establishment of new businesses, and there is recognition of this fact in the Bill. before us, because it exempts shipbuilding; but if a firm has sought to establish a new manufacturing business, it will be called upon to pay 50 per cent. of its profits for 1915-16, and 75 per cent. for subsequent years, and can only claim an exemption which in the case of a company amounts to about £1,500. It is a hardship on persons who are establishing new manufacturing businesses. A few days ago Parliament agreed to the provision in the Iron and Steel Bounty Bill which allows a company to make a profit of 15 per cent., inclusive of the bounty - honorable members on this side urged that the percentage was too high - yet the Government will tax these new businesses to the extent I have indicated, while they will allow a man with an agency, in which, as the Treasurer says, little or no capital is required, to be exempted. Mr. Horne, secretary of the Taxpayers’ Association of Western Australia, has written a letter to the press, in which he has put the position very accurately. He says -
The idea appears to be that because large incomes can be made upon capital consisting principally of a note-book and pencil that the income should therefore be exempt from tax, while another person who has the hardihood to invest capital in a manufacturing business must be penalized, and possible imitators must be discouraged by the confiscation of 75 per cent. of his profits in excess of 10 per cent. on his capital. In order to encourage the middleman or broker, the Treasurer proposes to give him relief to the extent of £20,000 per annum, while the struggling manufacturer who has risked his capital is taxed to its hilt.
The writer of this letter has indicated a phase of the question of which the Treasurer may not have been aware. Honor- . able members like myself, no doubt, have received communications from various firms, manufacturers, importers, and others, showing how this legislation has affected them, and how it will affect them if it continues to operate in the future. We know that it will not operate beyond the month of June following the declaration of peace, but I claim that the Treasurer should not exempt broker’s businesses, or men who, as Mr. Horne says, have no more capital in their businesses than is represented by the cost of a pocket-book and pencil, while he proposes to tax manufacturers up, to the hilt.
– Is not a commission agent on the same footing as a barrister or a doctor?
– Yes, and in that respect he would receive his exemption of £1,000.
– Barristers and. medical men are exempt.
– And so are politicians.
– I did not understand that professional men were exempt. If politicians were not exempt, the tax could only apply to Ministers. The granting of an exemption to professional men was a mistake. Farmers also are exempt, and now the Bill proposes to make commission agents immune from this taxation.
– The sheep farmers are not exempt.
– In their income tax returns, they value their sheep at a very low rate, but they have made enormous profits out of the war on account of the high price of wool.
– Under this Bill, they will be required to pay the tax.
– Yes ; but the general agriculturist’ is exempt. Half-a-dozen honorable members in the House voted against that exemption. Apparently the agent selling on commission is to be allowed, under this Bill, to escape taxation. It is quite possible that, after the war, the same principle as is embodied in thisBill may be continued in other legislation, and that will mean the penalizing of the manufacturer. I well remember the reasons for the introduction of the original war-time profits tax. Similar imposts had been made in the United Kingdom, Canada, and New Zealand; although later the New Zealand tax was repealed. Having those precedents before us, and knowing that many persons in the community had made enormous profits out of the war, we felt that they should be called upon to make some contribution to the revenue beyond what could be obtained by the ordinary income tax.
– The sellers of galvanized iron, for instance.
– The sellers of galvanized iron, softgoods, and various other stocks. The Acting Minister for Customs (Mr. Greene) told us that, soon after the armistice was signed, the price of galvanized iron dropped from £80 to £50 per ton. According to the Treasurer, the war-time profits tax yielded, in 1915- 16, only about £1,200,000, which means that the excess war profits made in Australia in that year did not exceed £2,500,000. No one can make me believe that the excess war-time profits were not greater than that.
– Next year, the receipts from this tax will be larger.
– One reason for that is that the Treasurer will be collecting 75 per cent. instead of 50 per cent. of the excess profits. Moreover, the Taxation Commissioner is continually discovering people who, in the past, have managed to escape portion of the taxation they should pay. The Taxation Department is different from the Customs Department, which has been running so long that the officials know all the old tricks of the importers, and soon discover any new tricks which are devised in order to cheat the revenue. The Commissioner of Taxation is continually calling upon defaulters to pay taxation, and no doubt many persons who should have paid the war-time profits tax, and did not do so, will be rounded up and compelled to pay.
– We should not reach out after the profits ; what we should do is to shoot the profiteer.
– The honorable member belongs to a party which, instead of shooting the profiteer, would feed him.
– What does the. honorable member call a profiteer?
– A man who is making an extortionate profit at the expense of the community. We know that persons who bought sheep and lambs at the time of the drought for l½d. per lb., and placed them in cool storage, later compelled the people to pay 8d. and10d. per lb. for the same meat.
– They are selling now for 3d. per lb. mutton that cost them 6d. per lb.
– All I know is that the butcher is’ charging me 10d. per lb. for mutton .
– The pastoralist is not getting the advantage of that price.
– The advantage goes to neither the producer nor the consumer, but to the middleman, whom the Treasurer will allow to escape from the operations of this tax. The men who are getting all the benefit of the high prices for meat are the commission agents who risk nothing, whose only capital outlay is in the purchase of pencils and pocket books, but who have raised their charges since the war started.
– They have not. The rate of commission is still % per cent.
– Those are the persons whom the Treasurer proposes to exempt from the war-time profits tax.,
– On Friday last in the Newmarket yards, fat mutton was sold at 3d. per lb.
– And I guarantee that in even the poorest suburbs the consumers are paying from 7d. to lOd. per lb.
– If the Government would leave these matters to be regulated by the natural laws of supply and demand the prices would be lower.
– There is no price fixation now so far as meat is concerned. The natural laws are supposed to operate, but the commission agents and other middlemen stand between the producer and the consumer. The commodity is loaded with an extra charge for every handling. We were told by the Acting Minister for Customs that galvanized iron has been handled a dozen times between the factory and the final purchaser. The iron was loaded with a dozen commissions, but the persons who received that money are not to pay taxation under this Bill. The stock-growers complain that they are only receiving 3d. per lb. “for their stock, but I “know that the consumer does not get the advantage of the decrease in prices.
I am glad that the Government propose to allow only 10 per cent, profit on new capital invested, particularly in view of the fact that in a Bill which has passed recently 15 per’ cent, was the standard, rate of interest. It is also provided that the new capital shall be genuine, and that there shall be no allowance of 10 per cent, on a lot of watered stock. According to sworn evidence before the Inter-State Commission recently a brick company had an actual capital of only £100, but its declared capital was £50,000, and upon that sum dividends were paid. I am pleased that the Treasurer proposes to deal with this inflation of capital, and to try to keep the people moderately honest in the flotation of companies or the increase of capital.
In respect of- many of the alterations proposed by the Bill the Treasurer is pro ceeding upon right lines, but I hope we shall have an opportunity of amending the measure in the direction of placing commission agents in exactly the same position as the manufacturers. What is the use of having a war-time profits tax from which everybody is ^ exempted? I well remember the then honorable member for Flinders (Sir William Irvine) speaking from the Ministerial crossbenches upon the original War-time Profits Tax Bill, and saying that it did not honour the promise given to the people that .war-time profits would be taxed, that it would not catch the rich manufacturers, the shipping companies, or the chemical companies, and that it might as well be thrown into the. wastepaper basket.”
– Unfortunately, the Act allows to escape the people who are chronically richi -
– I can quite understand that. The honorable member refers to persons like the honorable member for Grampians (Mr. Jowett). They will take care that they escape this tax as long as they can. I am reminded that the honorable member for Echuca (Mr. Palmer) said recently that certain companies were escaping payment of income tax.
– It is perfectly true.
– If any person or company escapes payment of income tax it would be the fault of the Commissioner; but I have every faith in the present Commissioner of Taxation. It would be difficult to find a better man for the position. His predecessor (Mr. McKay) was a splendid officer, and with three or four other public servants he stood out prominently for efficiency of service. Mr. Ewing, the present Commissioner, is another. He will see that people liable for taxation pay; but if we so frame our . legislation that it is possible for any rich, company to escape, then the fault must be with the Legislature, and not with the Commissioner.
– Do you not think that we ought to be quite honest, and admit candidly that this measure- has always been a complete misfit to Australian conditions”.
– I am not sure. If the honorable member for Wannon is of that opinion he will have an opportunity of expressing his views.
– And I propose to exercise that right.
– If honorable members opposite express their views clearly this measure will not be passed as rapidly as was another to increase taxation by 30 per cent., and upon which opinion was so unanimous that it was rushed through in about two and a half minutes without a dissenting voice.
– Perhaps that was because it was recognised as being necessary.
– No; there was another reason. Therehappened to be only a few honorable members present when it was passed, and I am afraid many measures on the notice-paper will be treated in the same way in the closing hours of this session, because there will not be sufficient time for adequate discussion upon them.
Here is a Bill of the utmost importance to the community. If, as the honorable member for Wannon has said, it is an absolute misfit to Australian conditions, and if honorable members can prove it to be so, to my satisfaction, I shall be prepared to vote for its repeal, provided, of course, that we can in some other way obtain the extraordinarily large profits that have been made by some people in this country. We know from the Estimates of a former Treasurer (the late Lord Forrest), how much the Government expected to realize from this measure; but it has not been so successful, because such a large number of firms and persons have been able to escape its provisions.
– Or for the alternative reason, that they have not made such huge profits that some people think they have made.
– Judging by the return furnished by Sir Alexander Peacock in the Victorian Parliament, a portion of which I put on record in Hansard while this subject was last under discussion large profits have been made, during the war, in Australia. The honorable member for Melbourne (Dr. Maloney) some time ago asked the Treasurer (Mr. Watt) if he would be prepared to authorize the publication of a similar return for all Australia, giving, not the names of individuals or firms, but numbers only; we have not yet obtained such a return.
– I think the profits mentioned in the return you have referred to were aggregate, instead ofpercentage profits.
– The returns showed that in oneyear a business might have made a profit of £8,000 and the next year a profit of £40,000.
– But was that profit made on the same amount of capital ?
– The capital may, of course, have been increased by watered stock as is done so frequently. But the statement was a fair return prepared, not by a Labour man, but by the. Commissioner of Taxation at Sir Alexander Peacock’s request.
– Much depends upon how the return is asked for. Figures cannot lie, but you know the end of the proverb.
– I have heard it frequently, and often I have thought that the latter portion of that proverb might appropriately be applied to honorable members opposite. In a return prepared Borne time ago by Mr. Knibbs, we find that five-sixths of the assets of this country are held by one-sixth of the people, and that two-elevenths of the people are in receipt of only half the income of the country, the other nine-elevenths getting the balance. These figures disclose the fact that one set of people gets an extraordinary large share of the national income, while the rest of the community apparently have a big struggle to live. This information was supplied by the persons themselves in a schedule prepared under the war census regulations, and probably it was upon information so obtained that the Government have decided to bring in this measure. If the Bill is intended to tighten up the provisions of the existing law, and enable the Government to obtain more of the money which should be paid in the form of taxation on war-time profits, I welcome it; but I strongly object to those exemptions which, according to the Treasurer, will mean a loss of £20,000.
– What exemptions do you refer to ?
– The Treasurer said that the exemptions in regard to profits on agency work arising exclusively from commissions on profits and sales, -in the earning of which little or no capital was required, would involve a loss to the revenue of about £20,000.
– And some of those ave indent agents, who have made all the money.
– It is a wrong principle to exempt such businesses, especially when we tax a man who puts money into a new enterprise. A man who pioneers a new business is taking a risk.
– Do you not think it is a mistake to exempt professional men ?
– I do. I think, however, that that provision was put through in the early hours of the morning, and 1 am not sure if a division was called, but I was opposed to the principle.
– So was I.
– Then for once, the honorable member and I were on the same side. But the trouble with the honorable member is, that while he talks the right way, he votes the wrong way. The Government do not- mind if a supporter criticises them so long as he votes for them. This exemption of commission agents is quite wrong, because, as has been said of them by Mr. Home, of Western Australia, their only capital consists of a .lead-pencil and a pocket-book.
– They have to exercise their brains in much the same way as a doctor or a barrister.
– I hold no brief for the doctors, who have been on strike in Melbourne for nearly twelve months; but there is -a difference between professional men and commission agents.
– Then you do not believe in strikes?
– I did not say that. I have done as much to settle disputes without strikes as has any honorable member. I think even my friend the Assistant Minister for the Navy (Mr. Poynton), who is in charge of the House, will admit that I have done something during the past few months to prevent strikes from spreading. I hold.no brief for members of the medical profession who have been on strike lately. It .is probable, that there ‘ were mistakes on both sides, and had reason prevailed the trouble would not have occurred. I am glad to know that it is practically over. But there is this to be said for the doctors as against commission agents, who are also exempted: A doctor has to study for his profession. The Treasurer will have to give better reasons for throwing away £20,000 of revenue as is proposed by the exemption in this Bill before the proposal has my support. If the Bill deals with watered stock of companies, that is capital which really does not exist except in. the air, and upon which the workers have to pay dividends, and if it is ‘to deal .also with the expenditure on huge advertisements in the daily papers, I feel it will be going upon right lines, but I shall vote against the exemption o’f commission agents.
– I do not disguise the fact that I have from the first ‘strenuously opposed the War-time Profits Act. I opposed the original Bill because I was satisfied that it would not reach its intended objective. Any Bill designed to prevent illegitimate profiteering would have the full and hearty support of not only myself but honorable members generally on this side of the House; but it is because I am convinced that this form of , taxation is most inequitable in its incidence, and does not reach its objective, but creates the most serious anomalies, that I am,’ and always have been, opposed to it. The honorable member who has just resumed his seat (Mr. Tudor) said that if he could be satisfied that the principal Act was totally inapplicable to our conditions - that it was a misfit - he would be prepared to seriously consider its repeal. I challenge him to compare the conditions prevailing in the Old Country, when this form of taxation was introduced, with those operating in Australia. If he does, he will realize, not .only that legislation of this kind is a misfit, but that its effect is the very opposite of that intended. It was because the British Government was desirous of diverting all .the ordinary avenues of peaceful industry into munition-making and the manufacture of armaments, that a war-time profits tax was passed hy the Imperial Parliament. It was desired that the country should practically become one huge Arsenal. The exigencies of the war were such that it was essential that the industrial centres of the United Kingdom should concentrate on the supply of munitions and armaments; and this form of legislation was introduced, first of all, to divert peaceful industries into the channels I have mentioned; and, secondly, to enable the Government to secure a reasonable share of the. extra profits being made by army contractors and agents. It was to deliberately discourage the expansion of ordinary channels of industry, and to encourage munition and armament making, that the British Act was passed. Australia is in quite a different position^ We are not engaged in the making of munitions of war, nor do we desire that our industrial centres should divert their operations. On the contrary, we recognise that, in view of our heavy war expenditure, it is essential that we should develop, expand, and encourage our industries in every direction in order to increase production,, so that we may be able to meet our liabilities. The conditions here are the very opposite to those which existed in Great Britain when the Wartime Profits Bill was introduced there.
Any man who gives honest and thoughtful consideration to the. terms of the principal Act will realize that it seeks to secure revenue at the expense of industrial expansion. It is anomalous that, while on the one hand we pass Bounty Bills to encourage industry, on the other we pass legislation of this kind, which is immediately destructive of all incentive to enterprise and the starting of new industries. This class of legislation retards and stifles industry. I have urged from- the first that it is a mistake; and the arguments that I used when the original Bill was before us in 1916 are now being realized. The Acting Prime Minister (Mr. Watt) practically tells us that, in the original Act, we made a mistake. He tells us that, as the result of that Act, industry has been retarded, but that he hopes to modify the conditions that have brought about the discounting of our industrial efforts. When introducing this Bill, he said, speaking of the existing Act -
I believe, too, that, to some extent, it has retarded new business enterprises, and has discouraged the expansion of existing undertakings. I hope that the proposal now submitted may relieve the situation-
It will relieve it to only a very slight extent - causing the tax to operate more equitably, and with a less repressive effect. .
Later on, he said -
The argument against the original measure was that it would operate, not only to discourage, but even to crush new enterprises.
That was the argument that I strongly advanced in 1916 -
In studying the circumstances of the new businesses that have come within the 1915-16 assessment, it is plain that the tax has operated with repressive effect.
This is the testimony of the Acting Prime Minister, after full consultation with his executive officers. Here we have the clear evidence of a man qualified to speak with authority on the subject, that the effect of the War-time Profits Act has been to injure, repress, and retard industry, and to strike a blow at our industrial concerns. All along I have urged that it is the duty of this Parliament to repeal the principal Act. It is all very well to suggest that to repeal it would be to grant relief to those who have been profiteering. If the revenue which would be raised by means of this measure must still be secured, there is an infinitely more - effective means of obtaining it, and one that would relieve our taxation system from the extraordinary incidence of this Act.
The War-time Profits Act- . practically eliminates all the fundamentals of taxation. Such a thing as equality of sacrifice cannot be discovered, even in microscopic form, within its four corners. It has sunk, beyond all trace, every fundamental principle of taxation. . On the other hand, it bristles with the most inequitable features. The’ New Zealand Government took action to repeal it3 War-time Profits Act after it had been in operation for only twelve months. Under that Act there was only a 45 per cent, instead of a 50 per cent, and 75 per cent. tax. The Government realized, however, . that the cost of administering it was so great, and that it was so inequitable in its incidence, and so inapplicable to the conditions prevailing in the Dominion, that it must he repealed forthwith. I have here the remarks made by the Treasurer of New Zealand, which go to show that it was in the interests of the Dominion that the Act should be repealed. If I remember rightly, the New Zealand Government imposed in its stead a special war tax of so mu.ch in the £1 above a certain income.
As I have already said, the Acting Prime Minister has condemned, in the most unmistakable terms, the operation of the principal Act. In introducing this Bill, he said that it was proposed- to amend the definition of new businesses which had been disastrously affected by the Act at present in operation. The only modification that he suggests, however, is that the definition of “ new business” shall be as follows: -
A business which, in the opinion of the Commissioner, was not commenced until on olaffter the .4th day of August, 1913, and was not reasonably established until on or after the 4th clay of August, 1914.
There were many struggling industries started one, two, three, or four years before then, and they will practically get no relief under this Bill. They, perhaps, only gave profitable returns after the beginning of the war, and they will thus be subject to the payment of this tax. I am aware that the Acting Prime Minister further seeks to meet the position by saying that, so far as the pre-war standard is concerned, they will be entitled to what is regarded as the average profit associated with such enterprises.
– That is far more liberal than is the provision in the principal Act..
– The honorable member realizes that the terms of the original Act were disastrous to new businesses. - This is only a modification of them. It cannot be overlooked that . huge businesses, with high pre-war and special war profits- of from 25 per cent, to 50 per cent. - and upwards, are not affected by this tax.
– They do not pay one penny under it.
– ‘That is so.On the other hand, new businesses that happen to be of a progressive character, and to have the benefit of increasing profits year after year, are made to suffer,although their older .competitors, with huge returns, are subjected to no taxation whatever.
– Very many of them are subject to taxation.
– I am speaking broadly and generally, and my statement cannot be refuted. I speak with full knowledge of this matter when I say that the huge businesses carried on here are! as a rule, fully capitalized, whereas the new businesses are under-capitalized; arid it is these new businesses that are picked “out for special taxation under this measure, whereas the fully capitalized, businesses escape taxation completely.
– As a business statement; that is absolutely correct.
– No business man would venture to deny that I have stated the true position. There are a few outstanding features of the Bill with which I specially desire to deal. The first is contained in clause 5. which proposes’ an alteration of section 12 of the existing Act. Honorable members will remember that in the case of increased capital, sec-‘ tion 12 of the existing Act provides that any increased capital is entitled to the same percentage of profit as the pre-war standard of profit, or, in the alternative, to a statutory percentage of 10 per cent, profit. Now, in a most short-sighted way, this Bill proposes to abolish that option. It proposes to limit the profit on increased capital to a statutory 10 per cent.. If a business has been making 12 percent, or 15 per cent, on the average pre-war capital, it is not to be permitted under this Bill, to carry that pre-war standard of profit upon its increased capital. That is a most serious matter, and the unfairness of such a procedure is accentuated, by the fact that this measure proposes that this unfair provision shall be made retrospective.
– But what are honorable members opposite going to do about it?
– I think that even my honorable friends on the other side will agree with me that, if such a provision be enacted, it will amount to a deliberate breach of faith on the part of this Parliament. According to this Bill, the. provision destroying the option to which I have referred is to date back to the 1st July, 1916. Now let me prove that to pass such a retrospective clause would be an act of repudiation by Parliament. The honorable member for Capricornia (Mr. Higgs), as Treasurer, introduced the first measure in July, 1916. In that Bill, the honorable gentleman followed the British provision, not so far as the percentage rate of profit he proposed was concerned, but he provided that increased capital should, in the case of companies, be entitled to deduct a statutory percentage of profit equal to 6 per cent., and, in the case of individuals, to 7 per cent. That Bill was not passed, but in August last a Bill was introduced by the late lamented Lord Forrest, then Sir John Forrest, in which he asked Parliament to alter the terms so far as increased capital was concerned. He proposed, in addition to the statutory percentage standard of profit, which was fixed at 10 per cent., that -increased capital should have the benefit alternatively of the pre-war rate of profit, whichever happened to be the greater. That was a new provision deliberately inserted in the measure by this Parliament at the request of Lord Forrest, and the taxpayer was thereby given the option of the pre-war standard of profit or the statutory percentage of profit, and it is this new provision thus inserted and passed that the Bill proposes to strike out from the 1st of July, 1916. In other words, Parliament is asked to declare it made a mistake, and that the new provision should be regarded as though it had never been inserted. Upon the faith of that provision, deliberately enacted by this Parliament, traders and manufacturers have regulated their businesses, and, in a vast number of cases, instead of taking out their profits, they have capitalized those profits. They have put them into plant, machinery, and improvements of various descriptions.
– As they were invited to do.
– Just so; that was the object of the provision. They were deliberately invited to put their profits into plant, and expand their industries. We legislated to encourage them to increase their capital, but the Bill now under- consideration provides that stationary capital is to be untaxed, but the progressive individual, the man who is not content with a mere stationary capital and desires to increase his capital and extend his industry, is to be penalized and taxed because of his enterprise.
– Have .not several companies put by sufficient money to meet this retrospective tax ?
– That is quite beside the question, and I am not arguing that point. I have said that huge businesses which are fully capitalized, and have a good pre-war standard, are not taxed in any way by this Bill, although they are the competitors of the progressive businesses that are specially picked out for taxation under it. That is a blow at industrial expansion, and is completely destructive of all incentive in business undertakings.
I can give one or two illustrations of the effect of- this measure, and I shall be prepared to submit the figures to the Minister in charge of the Bill, or to his officers, for verification. Honorable members must realize that, as every business man knows, it is the greatest mistake imaginable to judge an enterprise or business merely by its capital. Capital is no real test of the scope of operations of a business. _ There is a vast number of businesses, such as those dealing with millinery, neckwear, knitted goods, underclothing, mantles, and costumes, which turn their capital over three and four times a year. In the case of such businesses the capital is no proper index to the character or magnitude of the business. The true test, and what should be considered, is the percentage of profit to turnover. I can give one or two instances to show what I mean : Here is a small manufacturing business which will be seriously affected by this measure.
On the 30th June,- 1918, its capital was £6,200; borrowed money, £1,800; profit, £2,500; drawings, £500; Federal income tax payable, £209 9s. 4d. ; tax payable under existing War-time Profits Act, £187; but the tax which will be payable under this Bill, if it is passed in its present form will amount to no less than £869, as against £187 under the iniquitous terms of even the existing measure.
– On what profit?
– On a profit of £2,500; but I want my honorable friend to understand that this is one of those businesses in which the capital is turned over three and four times a year. That is what we desire. We wish to encourage men to expand their industries. In the case of this business, taking the estimated figures for 1919, the capital would be, £8,200 ; borrowed money, £1,800 ; profit, £3,000; drawings, £600; Federal income tax payable, £2S9; and while the war-time profits tax payable’ under the existing Act would, in this case, be nil, the owner of this business would, under this amending Bill, be taxed to the amount of £1,062. I have here particulars of the position of a large merchant, who is known to most of us, a gentleman of high reputation in business circles and’ in the public life of this community. I do not disclose his name, though I will, of course, give it to the Minister in charge of the Bill. He has written me a letter, in which he says, referring to the effect of this Bill-
Our position with regard to this tax is no doubt typical of many others. In 1914, my partner and myself decided that we would not draw any profits out of our business during the period of the war, nor until such time after, the war as we considered things had become more or less normal. As a result of that policy, we added, during ‘the year’s 1.914, 1915, 1916, and 1917, largely to our reserve fund. This, of course, provided the firm with a considerable amount of extra capital, which enabled us to do a considerably increased business. But, on this increased business, we have not attempted to get more than our ordinary rate of profit as in pre-war years, believing in the principle that it is better to have a big trade at a lower rate of profit than a small trade at a high rate.
For the years 1912, 1913, and 1914, say the three pre-war years, our profits on cost averaged 17 per cent., whereas for the years 1916- 17-18 they have only averaged 15 per cent. But because of the increased turnover due to the expansion of capital, we have made a considerable amount of extra profit, never, of’ course, thinking that the Government, or any Government, would repudiate an Act which had been passed by Parliament, and make it retrospective for a period of two years.. This* is grossly unfair on people like ourselves who have not engaged in profiteering, but havecarried on our business legitimately as merchants.
He goes on to say - °
The cruel part of this war-times profits tax is that the Government not only take the bulk of the profits which we have employed in the business for the purpose of expansion, but it now proposes only to allow us 10 per cent, on the added capital instead of the pre-war rate which the Act originally provided for, and which is regarded as’ only fair.
I again emphasize the point that the Government should consider in connexion withit’s’ War-time Profits Act amendment the postwar losses which merchants will have to face.
I shall deal with that aspect of the matterin a few- minutes. The writer of thisletter continues -
In one factory which we control, and from which we have not had a dividend during the currency of the war, having been obliged to allow profit to remain in to provide for theexpansion of the business, we employed in 1914, before the outbreak of the war seventy hands,, whereas at the present time we have 450.
In this instance, too, big losses will have tobe faced in connexion with the stock that, is carried, and the whole of the profits have been left in the business, and have gone into machinery, plant, and buildings.
That information is from a man in a large way, whose name I am prepared togive to any honorable member privately. He is an enterprising man, who, following the policy laid down by Parliament,, has increased and expanded his business,, and. now, after he has invested his capital in it, it is proposed to punish him for hisenterprise. I could give a number of similar cases. I have here another case,, in which a man with a capital of £34,000’ is to be penalized to the amount of £7,782, whereas’ the proprietor, of an oldestablished business in the same line would pay nothing.
The refined cruelty of the measure isnoticeable from this- aspect of it, that the percentage standard is not merely to> apply to the increase of capital, beyond that employed by the taxpayer on 1st July, 1916, the date to which the measuregoes back, but to the increase beyond the average capital for. pre-war years. When an amending Bill was introduced by our lamented friend, the late Lord Forrest, I fought strongly for the inclusion in it of a provision which was clause 10 of a Bill introduced by the honorable member for Capricornia (Mr. Higgs), and embodied the British law on the subject. Unfortunately, the right honorable gentleman did not accept my proposal. The British law provides that an average is to be taken, extending over the period of the war, to ascertain what the war-time profits are, and these are to be taxed accordingly. That is a sound and legitimate provision. A measure providing . for the taxation of war-time profits should do what it says - that is, it should tax excess profits made during the whole period of the war. Under the Bill before us, if a man made a profit of £10,000 in the year 1915-16, a heavy loss in the next year, another loss in the third year, and a small profit in the fourth year, he would be taxed on his profits, but would receive no allowance in respect of his losses. Under the English law there is an averaging of profits and losses over the period of the war. We provide for the averaging of capital in pre-war years, and for an averaging of pre-war profits, but when we come to deal with war-time profits, we take each year by itself. If a man makes a profit in one year, he is taxed on it, and if he makes a, loss in the next year so much the worse for him, he receives no allowance. I do not desire that the British law should be slavishly followed, but, as a matter of principle, when taxing war-time profits you cannot fairly consider only the years in which profits have been made, and leave out of account the years in which losses have been incurred. I urge that an average should be made of the profits and losses during the period of the war, to ascertain the amount on. which a business is properly taxable. No business man can know until the war has ended, and his stocks are realized, whether he has made any profit during the war. Merchants have had to buy stocks at vastly-increased prices, and have now to realize them on a fallingmarket, and, therefore, will inevitably suffer heavy losses.
– I know a firm which is likely to lose £50,000.
– The correspondent from whose communication I have already quoted says about this -
Now, with regard to the profits we have made during the war years, we take the view, which no doubt many others in our way of business do, that these profits can only be held as a set-off against the post-war losses which, we feel certain, must accrue. All the money that we have made has gone into extra stock, plant, &c. What we have in stock now, in the shape of goods, has been purchased at a price ranging from 100 per cent. to 300 per cent. more than what they were in pre-war years. Now, since the signing of the armistice the reaction has set in, and during the last three weeks, on one section of our goods of which we hold a stock of £150,000, there has been a fall of 15 per cent. ; on the whole of our stock, which represents probably £400,000, it is safe to say that we will have to write off by next stocktaking at least £100,000 to bring it down to current values, and further losses than this will have to be . sustained before bed-rock is reached.
– What would be our position if we applied the principle of averaging to our general taxation?
– Adjustments and refunds are provided for in the income tax law, but, in any case, justice ought to be done. In seeking to tax wartime profits, we should see that only the excess profits made during the period of the war are taxed. We ought not to tax the profits made in one year, and take no account of the losses suffered in the next.The true method upon which to proceed is to ascertain what the excess wartimeprofits are, and to tax them. It is extortionate and. unfair to compel the business community to pay on the profits of particular years without allowing it to set against these the heavy losses of other years during the. war period.
Sitting suspended from 6.29 to 8 p.m.
– There are two or three other points which I desire to emphasize in connexion with this Bill. I have already strongly protested against the principle of retrospective legislation.. I have demonstrated, I hope, that if the Bill be passed in its present form, it will inflict very serious hardship in several directions. I do not dispute for a moment the right of this Parliament to alter the law from time to time, as it may think fit, but I do protest against the enactment of retrospective legislation. The general community are justified in basing their business, and other arrangements, upon legislation as they find it. Their business policy is guided by the law as it exists for the time being. That law may be altered so long as it refers only to the future. But it is a vicious practice to make it operate retrospectively.
There is in this Bill a provision in regard to advertising. It is proposed to amend section 15 of the principal Act by inserting at the end of sub-section 2 the following proviso : - “ Provided that where, in the opinion of the Commissioner, any deduction claimed for advertising in the accounting period is excessive, having regard to the expenditure on advertising for the business during the last three prewar trade years, he may reduce the deduction to such sum as he thinks reasonable and just.”
In dealing with this proposal the Acting Prime Minister (Mr. Watt) said -
It is believed that there have been many cases of advertising on an extravagant scale, thus reducing profits and really causing the Commonwealth to pay 75 per cent. of the excessive cost of advertising.
It is rather too late in the day for us to seriously doubt the value of advertising. The objective of all advertising, particularly in businesses of a retail character, is to insure quick returns and corresponding profits. A number of enterprising men have followed this policy of advertising for years, and they have found that it pays them to follow it. Having advertised extensively, they have proportionately increased their profits, and by so much as they have increased their profits they have become liable to more taxation. Instead of the Commonwealth having to pay 75 per cent. ofthe excessive cost of advertising, the Commonwealth will get a benefit from the increased profits made as the result of advertising, in addition to which the increased profits made by the newspapers concerned will also be liable to taxation. In such circumstances, and seeing that thisadvertising has meant increased profits, it is unfair to make this legislation retrospective.
– But the honorable member must admit there is a rational limit to advertising?
SirROBERT BEST. - In certain businesses the more one advertises the greater will be his returns and the greater the increase in his profits.
There is one feature of the Bill which I regard as of a very serious character. I refer to the vicious principle which is sought to be introduced in connexion with the amendment of section 8 of the principal Act. In clause 3 it is proposed to amend that section by inserting the following paragraph: - “ (1) Such mining businesses or sub-classes of mining businesses (not including any coal mining business) as are specified by proclamation, as from the date, to the extent and on the conditions set forth in the proclamation.”
I wish it to be clearly understood that I do not object to the exemption of mining from the provisions of the principal Act, but I do object to the dangerous principle of empowering the Minister to exempt from taxation any particular class of taxpayers that he may think proper.
– That is not nearly as great a power as the honorable member was willing to give him this afternoon under the War Precautions Bill.
– The War Precautions Act was enacted for the purpose of dealing with war conditions, whereas this measure is intended to deal only with ordinary war-time profits. It is quite possible that the War-time Profits Act of last year may not terminate until 1920, and the principle to which I have referred is a vicious and dangerous one, inasmuch as it will vest in the Minister power to exempt any class of people from taxation.
Of a cognate character is the discretion which it is proposed to vest in the Commissioner for Taxation. I have already expressed my appreciation of the ability and fairmindedness of the present occupant of that office. But I do not think it is fair to him or to the taxpaying community that he should be called upon to tax one individual and exempt another. I have no doubt that if he is obliged to do so he will act conscientiously. But it must be remembered that he is dependent on his officers, and is subject to all sorts of representations that may be made.
I protest against the principle which permits of a discrimination being exercised as between taxpayers, because I regard it as a most undesirable one.
The War-time Profits Tax Act has had the effect of seriously discouraging investment in our war loans. Whenever a man has taken money out of his business to invest it in our war loans, his business has suffered, and he is recouped only to a small extent by the interest cn his bonds.
– In many cases he has lost 10 per cent.
– And in some cases even more.
There is one matter connected with this Bill in regard to which we ought certainly to arrive at a decision, viz., the date upon which it shall terminate. The position is that, so far, only the profits for -the year 1915-16 have been taxed. Something like £680,000 has been collected in this connexion, and it is said that several hundred thousand pounds are still outstanding. The profits for the year 1916-17 have not yet been assessed, but are now being assessed, and the profits for the years 1917-18 and 1918- 19 have yet to be assessed. Now, assuming that peace is declared before 30th June, 1919, the Department will then have to levy in 1920 upon- the profits made during the year ended 30th June, 1919. But if, by any chance, peace is not signed until after 30th June next, the Act will continue to operate until 30th June, 1920, and the profits for the year 1919- 20 will have to be levied upon in the year 1920-21. I do not think that that is fair. We ought to make definite provision in this measure that it shall terminate on the 30th June, .1919..
– Why did the honorable member not say that this afternoon ?
– My honorable friend ought not to be too hasty ; the Bill to which he refers has not yet left the Chamber. The public have a right to know when this measure will terminate. I hope that the Acting Minister for the Navy will bring the matter under the notice of the Acting Prime Minister.
I again appeal for a reconsideration of the whole position. I have endeavoured to show, by definite cases and by various other evidence, how this Bill has been misdirected, and how the effect of our War-time Profits Tax Act has not been the destruction of profiteering, while it has dealt an alarming and serious blow at the industries of this country. At the same time it has discouraged the investment of capital. I have quoted the Acting Prime Minister for the purpose of demonstrating that fact, and I merely wish to add that this policy is in direct opposition to the enlightened policy that has been followed by other communities. Take the case of Japan, for example. She is so solicitous about the expansion of her existing industries, and the creation of new ones’, that the Government there have even gone so far as to guarantee to people who are prepared to start industries in various directions, a profit of 8 per cent. After all, that is an enlightened policy to adopt, and it has been wonderfully successful in Japan. A similar policy was followed in Germany with equally gratifying results. In the United States of America it has been discovered that the effect of the war - although she has been in it only since Good Friday of 1916 - has been to direct all industries toward munition making, and to seriously depress other industries. But America has been very cautious in this particular. The Government have made it understood that it does not suit the national policy to let .these other industries be extinguished or become unfinancial. Only the other day I read that the Government of the United States were quite prepared to stand by men in - their ordinary peaceful industries, with a view to enabling them to bear the stress and strain of war, and ultimately be revived when normal conditions return. This, I say, should be our policy. We should look forward to the extension of our industries and to the increase .of production. That is the object we have to aim at, and I trust I have shown that this Bill is destructive of such an objective, and removes incentive to enterprise.
I should like to read the remarks on this subject of the Treasurer of New Zealand (Sir Joseph Ward), who, after an experience of twelve months, decided that it was necessary to repeal the excess profits tax of the Dominion.
– ‘Why cannot we do the same?
– Exactly ; that is what I am strongly urging in the interests of local industries. The New Zealand Treasurer said -
On investigation i.t was found here, as it had been found in England, and was afterwards found in Canada, France, and the United States of America, that the difficulties of ascertaining exactly the actual profits resulting from the war were almost insuperable. The machinery needed for the purpose was too elaborate to enable the revenue to be collected when it was required. The method adopted hero was substantially on the lines of the English excess profits tax, but, as the amount realized did not reach my estimate, I propose this year to re-adjust this form of taxation.
I venture to say that the Treasurer of the Commonwealth will receive a rude awakening by the results of this war-time profits tax, which will not produce anything like what we expect. I do not look forward to the tax producing anything, so far as the .profits for the current year are concerned.
I may say that if the profits tax were to be retained and doubled in rate, so as to make it 00 per cent., it would not provide the amount required. I, therefore, must ask the House to authorize such a change of taxation as will make it certain that larger sums shall be contributed by those who have not paid their just share under the profits tax. The adjustment I propose will not only provi.de, the amount of revenue i require, but it will insure that every one shall contribute in proportion to his means.
That is the point. The New Zealand Treasurer there shows that wealthy industries have been permitted to absolutely escape - huge industries making enormous profits- and the smaller industries alone have suffered.
Experience of the excess profits tax has also shown that it is ‘inequitable. The concessions necessary to avoid hardship in some cases resulted in the escape of many other taxpayers who were in a position to pay, and, in my opinion, should have paid. The main reason for this is that the conditions here are different from those in the older countries. In this young country there is a larger proportion of concerns in the process of development than is the case in the older countries, and the tax presses ‘unduly on them. The profits made on shipping and munition contracts in Great Britain aTe enormous. There are thousands’ of long-established industrial, commercial, and general businesses that can be safely relied on by the Home Government to insure a largo amount of revenue from a profits tax. It is not so here; on the contrary, the purchase by the British Government of our principal staple products has largely reduced the profits that under ordinary conditions would be earned by export business houses, and an equivalent amount cannot bc collected spread over such a large number of producers who are selling their produce to the British Government, nor could it be charged to the buyers- the British Government.
These are words founded on experience of a similar tax in New Zealand, and I venture to say that the experience here is precisely the same. The only true policy of the Government under all the conditions is to grasp this problem, and repeal the whole Act, thereby doing a fair measure of justice to our industries.
.- Any man who has made excess profits in consequence of the war should, in my opinion, “shell out” some of those profits. There are men, particularly in Melbourne, Sydney, and Brisbane, who have made enormous profits; and only a few weeks ago the Bulletin instanced one shipping firm which has done so. It is to those people we should direct our attention, and not to the primary producers. If there is one man more than another who has ‘to face the vicissitudes of nature, it is the man who is getting a living off the land; and I am sure there is not an honorable member who would like to tax him- off his holding.
If this measure passes, I know many properties in’ Western Queensland which Will become practically valueless. There are several instances in my mind of men who had been struggling for years before the war, and had spent huge sums in retrieving their herds, purchasing bulls at very high prices in order to improve the quality of the breed. Yet these men. have made hardly anything out of their runs, though we know that when a person enters business it is not on philanthropic grounds ; if he puts his good “gilt” into an enterprise, lie expects to get some good “gilt” out tff it. There is .a case in which a property in Western Queensland was left to a family, some members of which preferred to take it up and do some pioneering work, and these brothers so improved the herd as to make it second to none in the Commonwealth. This has been done at a cost of hundreds of thousands of pounds, and every pioneer up to 1913 who put in improvements had to face a similar outlay; for improvements in that part of Australia mean fencing and boring for water, and fencing and other material has in some cases to be carted many miles. The station to which I am referring is some hundreds of miles from the railway terminus, and the Queensland railways run 600 or 700 miles due west.
– I have had to cart fencing material 270 miles, after paying railway freight for 450 miles.
– And there are others who have had to do the same. Every penny ‘that these brothers made up to the time of the war was put into improvements; and now, as I say, their herd is the best in Queensland.
Up to six or seven years ago, cattle in Queensland was “ anybody’s money.” There is one particular herd that the honorable member for Grampians well knows - the Mount Cornish herd of shorthorns - which is one of the most beautiful in Australia.
– In the world!
– In the world. In size, they are more like elephants than bullocks. Yet the owners of this station, through the low price of stock, only a few years ago - since I have been in the Federal Parliament - had to get rid of the whole of their cattle and take up sheep. If the herd of cattle had remained there to this day, the taxation on the owners would have been enormous, notwithstanding their losses during drought.
The pastoralists of Western Queensland do not object to pay this tax, but they do object to paying it on their losses. When, in 1915, the then Treasurer of the Labour Government (Mr. Higgs) introduced a War-time Profits Bill, it contained a clause designed to get over that difficulty. It wasclauses 10 of that Bill, and, as it appeals to me as a most reasonable one, I think it ought to be read -
Where a person proves that in any accounting period, ending after the 30th day of June, 1915, his profits have not reached the point which involves liability to war-time profits tax, or that he has sustained a loss in his business, he shall be entitled:
to repayment of such amount paid by him as war-time profits tax in respect of any previous accounting, period, or
) to set. off against any war-time profits- tax payable by him in respect of any succeeding accounting period during the war such an amount as will make the total amount of war-time profits tax paid by him during the whole period accord with his profits or losses during that period.
If I am not successful with the amendment I intend to propose in Committee, I shall take steps to have the clause I have just read inserted. Even the principle of the clause of the 1915 Bill is not acknowledged in the measure now under discussion and there ought to be something done in order that men may not be ruined.
To-day, in Western Queensland there is raging one of the most serious droughts we have had. Prior to the drought the pastoralists and farmers had suffered from very severe bush fires. What grass there was they had been shepherding until the monsoons should come along. But that has all gone now. Stock has been burned, and since then the drought has descended and has done its worst. They are now losingstock from that cause. And it is not only the burden of the war-time profits tax that they have to carry. The taxes on pastoralists’ holdings in Queensland are amazing. The first is the rabbit tax. Then there is a stock tax. Next there are the State and Federal income taxes. Then there are the State and Federal land taxes.
– Only wealthy men are called upon to pay those taxes.
– Are they? I will give the other side of the picture directly. There is also the marsupial tax, after which there is the meat and dairy encouragement tax. On top of all, there are the municipal and shire taxes. The worker has not one-tenth of what the man on the land has to pay by way of taxation.
– He has, compared with his income.
– My son, on the land, has 8,000 sheep, and he would be prepared to swap his bank balance with that o£ the honorable member to-morrow. I invite the honorable member to take over his property and my boy will take his job.
– That is bluff.
– It is fact. If the honorable member would take over his liabilities my lad would be quite willing to take over the honorable member’s. He not only has to pay all these taxes, but has to fight the bush fires.
A friend whom I know has risen from the ranks of the working men. He was a carrier. He put his little all into a grazing farm and increased his stock. As he got on he came at last to hold between 14,000 and 15,000 sheep; and he had a family of nine children.
– He is what you call a “ small man,” and he has 15,000 sheep !
– Yes. Listen to what happened to him. He took up a. slice of land and was a good citizen. He was doing something, not only for himself, but for the country. These men who go out and do the pioneering are the chief support of the industries in the electorate of the honorable member for South Sydney (Mr. Riley). I have heard him repeatedly asking for a bonus on wool tops ; - a bonus for those who shear the grazier, the .people “who do the woolscouring and the pelting; and, when there have been, no skins to be sent down to be fellmongered, the honorable member has wanted a bonus for the men who were out of work. Who paid the workers of Botany? It came out of the pockets of the primary producers in the shape of taxation.
– Come over here.
– No; but I want my constituents to get a fair and square deal. They are not squealing and asking that they shall not be required to pay these taxes; hut I am appealing for fair play on their behalf. This friend to whom I have referred had those few thousand sheep, and he reared also a good family. He lost two sons at the war. He went to bed one night a fairly well-to-do man. In the morning all his fences were gone; his stock were burned, and he lost another son in the bush fires. To-day he is at poverty point. I cite this case to indicate some of the difficulties that these men have had to put up with; and, whether I represent Labour or anything else, I shall stand up for the downtrodden man. These pioneers of the pastoral country are the “ bottom dogs “ today.
– In the circumstances you have mentioned, that man would not have to pay taxes.
– He has to pay taxes. He has to pay this war-time profits tax. It is retrospective. He was assessed before disaster came upon him.
– But he cannot pay if he has not got the money.
– What can he do? Lots of people - even the pastoral companies around that neighbourhood - have already offered him stock on loan.
– The Act refers to deductions to be allowed for losses by fire, flood, accident, robbery, or embezzlement.
– If honorable members . will consent to insert clause 10 of Mr. Higgs’ Bill I shall be satisfied. That is all I am asking for.
– The Act makes no provision for refund.
– That is so. Arguments have been advanced that it is unfair that these men should escape taxation, and that the people in the towns are being taxed up to the hilt. I have yet to learn that the man in the country is escaping taxation, any more than the man in the town.
If any of my constituents come down to Brisbane - and they generally do so once a year - everybody in Brisbane is waiting to try and take them down, and they do take them down. These men from my country have not only to face the bush fires, but I would like the honorable member representing Botany to come out my way and see the devastation committed by Providence. There are not only droughts and bush fires, but the opposite also - the floods. And, if there is a glut in the market, either with respect to their wool, or their hides, or their meat, they have to accept whatever prices are ruling. If prices are low, who suffer ? The producers, every time. They have to cope with falling markets; and last, but not least, for the benefit of people living in populous centres, they find the prices of their produce fixed for them. Where does- the fairness of it all come in ? I do not want honorable members to be under the impression that these men desire to escape taxation. They do not. They want to be put in such a position that if they can prove to the satisfaction of the Commissioner that there have been losses through drought, flood, or fire, the Commissioner shall be empowered to take into consideration the amount of their profits.
I will read an account from one of my constituents. And, by the way, I heard once from a constituent of mine who visited Sydney. When he returned, I asked him what he thought of the harbor. ‘’ It is a beautiful place,” he said, “ But isn’t it a pity that we have not such a fine, big water-hole on the Barcoo or the Warrego?” With all the beauties of Sydney Harbor, the “ bushwhacker “ from my country thought of it merely in terms of a waterhole. Water-holes are what he wants in his country - and not beautiful views. So far as Queensland is concerned, it is a paradise for the working man. If I were to be dumped down in Rockhampton this day week with nothing but my swag, in twelve months I would have a little bank balance.
– You would not be one of those who would lose it in Brisbane.
– No; I let them think I am simple in Brisbane. They do not know that I am not so simple as I look.
I was about to quote something firsthand from a man on a pastoral holding. He says, respecting this tax -
It is unfair, whore the chance of a reserve force is being unduly diminished. For safety, these enterprises should be allowed a larger standard percentage. , If they can only get 10 per cent, in their few good years, they cannot carry on through the inevitable bad ones. It does not require much arithmetical ability to soc that argument. If 10 per cent, is a- fair profit in ordinary business, it is too low in a risky business.
I have often said that the only assets we have in this country are grass and water. Without rain, we cannot get grass; and only a few years ago, there were many places where there was beautiful grass country. I refer particularly to a station called Wellshot. Since the advent of artesian boring a big water- supply has been secured for that dry but beautiful grass country. There are hundreds of square miles on those Wellshot downs, which were practically waterless, but which to-day are carrying hundreds of thousands of head of stock. Surely those men responsible- for the improvement of that territory are entitled to something for their enterprise. Will any one tell me of a more risky game than stock-raising, particularly in Queensland?
I do not forget that we have te thank Victoria for much of our success in stock-raising in the back of Queensland. I suppose that fully 80 per cent, of the capital invested in Western Queensland came from that State. It has sent us workers, selectors, and station-owners of the very best class. They have taken their courage in both hands, and their money in their pockets, and spent it in Western Queensland like toffs. Two of them went through with nearly £80,000, and took up Stainburn Downs. They were model employers. In those days things were very “umptidoo.” There were no showerbaths, and coffee and rolls could not be had for breakfast. Sodden damper, johnny cakes, and salted beef comprised the menu. I have heard since that when these two gentlemen left the district they did not have as much as a buggy and a pair of horses to take them away.
– There are lots of similar cases.
– But how many men have been successful?
– I shall wire to Brisbane to-morrow and get the information foi the honorable member. Thirty year? ago £80,000 was a great deal of money In another instance a real old toff, Mt Smith, of Isis Downs, than whom s better employer could not be found thi side of the Equator, failed through circumstances over which he had no control. as the owners of Stainburn Downs had failed. Droughts and fires brought about their ruin. Yet all squatters are said to be rich.
– I know many men who have worked all their lives, and died in the poor-house.
– Any man with energy and a desire to get on who comes to me I will put “fly” to the means by which lie can” come hack to Melbourne and enjoy life, by the time he is fifty years of age, but if he wants to .take picture shows, comic operas, and revue “ tarts “ with him, I would advise him to stay in ^Melbourne. Many young men have come to me in Victoria, telling me that they would like to go on “stations in “Western Queensland, and I have wired .to friends of mine whom I knew to be good bosses. In no instance has one of them refused to take any person whom I recommended. To-day some of those whom I sent away in those circumstances are prosperous grazing farmers in Queensland, while others have come back with £300 or £400 each, and commenced dairy farming in Victoria. All that has happened within the last eighteen or nineteen years. But those men were anxious to get on. They took their courage in their hands when they went to North Queensland, and now that they are twenty years older, they are enjoying the benefits of the work they did up there. It shows that the district is not too bad after all. I want to instil this into the mind of the honorable member for South Sydney or Botany Bay, as I, from lack of the geographical knowledge of Sydney, am in the habit of calling the district where so much fellmongering is carried on.
The letter which I have received proceeds -
There is another way of looking at it. This business has been carried on for forty years; nothing has ever been taken out of it; in that period, or during the thirty years of the present owner’s control, a certain amount of the profit has gone into it. A fair method of fixing the capital on which the 10 per cent, (the percentage standard to be allowed in order to arrive at standard profits) would be to allow 10 per cent, simple interest annually on capital put into the concern, including original cost, and to set off against this 10 per cent, for any year the amount of profits returned to the business again.
There is a third way, and simple way, ;and it looks as .if this was one reading of the present Act; but it. is not too clear. See section 17(H) of the present Act. There, the capital of a business is taken to bc the amount of the capital “ paid -up .by the owner in money or in kind,” &e., &o.. Some hold the view that this means that the capital should be valued, because, in the case of a pastoral property where breeding goes on, ‘the natural increase may be said to be a contribution in kind. It might, however, be made quite clear that the capital was to be ascertained by calculation as at the time of the imposition of the scheme of taxation, or even at the date of the outbreak of war.
– Hear, hear! There ought to be capitalization.
– Many honorable members do not know how the assessment is made. In one case the assessment was made on the number of lambs. The owners paid the tax on that basis, but twelve months afterwards a drought had killed off every hoof. In another case the owners were assessed on the number of calves, at 5s. per head. In this instance within twelve months the whole of the calves were dead. The owners had paid the tax, but they did not have a hoof alive. The letter proceeds -
With pastoral properties, there should be no difficulty about that. Tlie value of the stock is known,- and the value of the holding, which largely consists of the improvements on the property; and these have been paid for out of capital. Whichever of these modifications of the law is made, it is plain, if justice is to be done to those who have had the pluck to try and create settlement in these drought-stricken areas, one or other alternative should be conceded. The increased income is only remotely connected with war. Probably, if there had “been no war, and a “patriotic’’ contract for the benefit of the Army meat supply had not been made by the Queensland Government with the Imperial Government, there would have been more profit in an open market. For the world, in- 1913-14, was short of meat, anyhow, and getting shorter every year. Tlie profit is entirely due to good seasons, and it is on these good seasons that these pastoralists depend for the purpose of maintaining themselves through the inevitable drought years, which to-day threaten to recur.
The honorable member for South Sydney (Mr. Riley) still keeps on droning, “ The poor pastoralist.” Pastoralists are not poor; but surely the honorable member would like to be fair. If he puts any money into an industry at Botany Bay, he expects to get his own back again, even if he does not get a little bit of interest on it. That is all that the pastoralists want: The honorable member would not have any wool for the making of wool tops if he did not encourage the pastoral industry. He- could not grow it on cotton bushes at Botany. It must come from the sheep’s backs. I look upon every hoof of cattle, horses, sheep, or swine as a national asset, and as part and parcel of the wealth of Australia. The more wool we have, the more wealth the country has, and the shearer, the rouseabout, the shearers’ cook,, and the shed cook get the benefit of it. Even my friend from Botany gets benefit through the increased employment which is given to the people in his district in making wool tops, scouring fleeces, or f fellmongering. If there were no sheep in Australia there would be no work for his constituents, and if there is one thing more than another he ought to get on his marrow-bones every night to pray for, it is that the Almighty should send plenty of rain to the western areas of Queensland, so that the employees in the Botany district may have plenty of work. As a matter of fact, I believe the honorable member does do it.
I am not pleading for the exemption of big pastoral properties. .Such a thought is far from my mind, and from the minds of the owners of these pastoral properties. They want to pay their share of the burden of taxation. Every day we can see in the papers that they admit that, had it not been for the contracts the Commonwealth Government have made with the Imperial Government,’ the pastoral industry would have been “ up a tree.”
-. - The Argus has not admitted it.
– I have seen it frequently in the press.
– It was only this morning that the honorable member was giving me a lecture on the wool-top industry. He was reading from some paper. ‘ It may have been the War Cry.
– The people engaged in the wool-top industry at Botany have to pay their full share of taxation.
– They are doing very well. The wooltop business is a bit smellful, and I hope there is not. going tobe another Naval Commission over it. It. is a bit fishy, and it is not altogether wool’ that is in that business either. When thecleaning up comes after the war, I think, we shall find a lot of things that smell,, as well as the matter that has lately been brought under our notice. That, however, is by the way.
The people in my constituency do not want to escape their just taxation,- but. they want to be treated in a fair and square way.
– So they will be under this Bill.
– It all depends upon the point of view. .The honorable member regards fair and equitable dealing towards the pastoral industry from the Essendon point of view. A big sheepfarmer in Victoria has half-a-dozen sheep, two pigs, and a cow.
– I have more wool in my constituency than you have in yours.
– The product from all over Australia comes to the wool stores in the honorable member’s constituency^ I have seen some wool there bearing a. Western Queensland brand. That showshow democratic we are. We do not. want the whole of the money for thatwool once it is off the sheep’s back. Vesend it to Victoria, so that they can get. a few “ bob “ out of it, and yet the honorable member is not satisfied. I do not know what would satisfy him. I represent one of the biggest pastoral districts in Australia, and so far as wealth is concerned, as represented by primary industries. I think it is one of the wealthiest’ districts in Australia. Surely that is . worth fostering, and these men’s voices. - should be listened to with regard to this=.tax.
If there is one thing more than another that our party have prided themselves on it is that they are opposed to> all class taxation.
– What about the pictureshow tickets ?
– That is a Botany Bay industry ?
– The squatters on the other side voted to tax the poor children’s picture shows.
– I did not, and on this auspicious occasion the honorable member should return good for good. If I support his industry in Botany he should surely support mine in Maranoa. This is a class tax which falls only on those engaged in the pastoral industry.
– This Bill taxes all round.
– Not with regard to pastoral properties. If a tax is imposed on me, and not on the honorable member, is not that a class tax? These men are quite willing to pay whatever tax the House puts on them, and will not squeal, but they ask for a fair deal with regard to their losses by flood, drought, or fire.
– The Bill provides that.
– It does nothing of the kind: How child-like and bland honorable members are when an industry that they know nothing about is affected.! It would, be a different matter if the proposal was to put a poll-tax on every worker in the big metropolitan constituencies.
– They have it on them now.
– They are not paying any more than the other fellows pay. We are all paying taxes. Of course no man likes to pay taxes, but always says, “ Tax the other fellow.”
– My trouble is that I have not enough to pay taxes on.
– I regret to find His Grace the Duke of Melbourne Ports pleading poverty in this National Parliament. It is time he did something, but I do not want to see him abdicate.
The amendment I propose to move in Committee provides that the Commissioner shall take into consideration losses by flood, drought, or fire, and allow as high as 20 per cent. for them.
– The Government will Consider it; they are good at considering.
– Many of the Government supporters are quite willing to help me; but my trouble is to appease the members of my own party.
– The novelty of such a suggestion coming from the Opposition amuses me.
– The honorable gentleman said to-day that these were not party measures, and should not be considered in a party spirit. I want the Acting Prime Minister to know that I represent a pastoral constituency. The men who are asking me to bring this subject before the House, and do something for them, although they are not political supporters of mine, are friends of mine, and have been friends for the last thirty years. They are not political enemies in the ordinary sense of the word, because they do not do much against me. One of them who lives near Barcaldine, and whom the honorable member for Grampians (Mr. Jowett) knows, told me that I could have anything that I wanted that belonged to him, except his vote and his wife. If these men do not know when they have a good representative, I know when I have a good constituency, and that is why I am “ barracking “ to-night for it. I believe in the war-time profits tax, and hold that the people who have made excessive profits, or done profiteering, should pay. The whole House agrees to that principle. All 1 am pleading for is equity. It is not fair to tax stock which are born this year and die the next; yet the pastoralists are assessed for that stock. When my amendment is put in Committee, I hope my brethren on this side of the House will rally round me on the war-time profits tax, as I rallied round them on the War Precautions Bill.
.- It is very satisfactory to know that there is on the Opposition side one man who understands the conditions of the pastoral industry, and who has the candor and manly justice to put the case fairly before the House. Too often, when we endeavour to adjust a measure of this description on an equitable basis, we are accused of attempting to exempt our particular friends from taxation. In pleading for some consideration for the pastoral industries, we are doing nothing of that kind. We merely ask that this taxation shall apply with something like equity.
The honorable member for Maranoa (Mr. Page) has very ably put the pretty bad case of the northern pastoral industry, and the northern cattle industry in particular, as distinct from the northern sheep industry. In cattle raising, you do not get an annual clip. The rainfall in those areas is very low, and the history - of the migration from Victoria to Queensland is very much as described by the last- speaker. Many men left Victoria prior to the ‘nineties, taking their cattle with them. Many of them mortgaged Victorian estates, and embarked in the industry in Northern Queensland. The history of a number of them has been disastrous. Many of them have been driven out of the business ruined, although they held excellent positions in Victoria, and have had to take positions as boundary riders, or in other capacities on stations.
I have here a specific case. The figures and facts are vouched for, and I propose to put them on record. The property has been for twenty-six or twenty-seven years in the hands of one family. During that period there were sixteen years of profits and ten years of losses. Prom 1890 to 1892 was what they called the “knockout” period in Queensland, when men who had not big banking accounts behind them, or credits in other States, went right out of the industry. From 1896 to 1901 was throughout a droughty period, and the cattle on this property were reduced from 22,000 head to 1,800 head. The honorable member for Maranoa (Mr. Page) has stated the position of these men in a general way. I am dealing with a North Queensland cattle proposition, in a light rainfall area, where the industry cannot be sustained except by balancing the good years against the bad years. I propose to give a list of twentysix years’ operations on one of the finest cattle stations in Queensland. The aggregate, profit for the sixteen successful years was £53,000, and the aggregate loss in the ten bad years was £30,000, leaving only a net profit of £23,000. During the whole of that time the family has not drawn £1 from the property, except for working and living expenses. By astuteness and the employ ment of their capital in careful selection and breeding they built up the property until, during the last three or four years,’ it yielded the greatest profit in its history. But, strangely enough, -those years” fall within the taxable period prescribed, by the Act. Through all those otheryears they battled on in the developmentof their property, and now the incidence of this taxation is to swoop down upon the profits made in the three years when the family were reaping what may be considered a fair reward for their life’s work, taking 50 per cent, in the first year and 75 per cent, in the subsequent years. The section of the Act defining “ capital “ affords no relief to this family, and I ask that there shall be allowed, in respect of all such properties, a capitalization at 7 per cent., commencing from the date when the property was acquired. or a greater percentage of profit. This station was purchased in 1888 for £50,000. It is entirely a cattle proposition. During the whole thirty years there have been alternations of good and bad seasons. In 1902 new holdings were added, and boring was undertaken for artesian and sub-artesian water with more or less success. The net profits made in the good years were re-invested in the property, until in 1915 the capital actually sunk in it amounted to £115,000. At this time, owing to the increase in the water supply and general improvement of the property, they had increased the number of calves branded from 2,000 to 6,000 in one year, but the. honorable member for Maranoa will admit that 6,000 calves may be branded and brought into a man’s taxable assets, but all of them may die before they can be brought into his balance-sheet.
– What is the estimated value of the property to-day?
– The family would be content with a valuation of £118,000. I ask that, in respect of such cattle propositions in Queensland - not in a State like Victoria, which has a fair climate, and where the average results are fairly good - there shall be a capitalization at 7 per cent, simple interest from the date of commencement, or a higher rate of profit, say, 20 per cent.
– Such a capitalization will not mean much unless the interest is compound.
– Over the whole of the period that the property has been in the possession of the family it has not returned anything like 7 per cent, on the capital employed in land and stock.
– Does the. honorable member ask that the interest should be cumulative? .
– The proprietors will be quite content with a 7 per cent, capitalization added for each year. The following have been the net profits and losses in each of the last twenty-six years: -
– On the original purchase price, it looks like a profit of 2 per cent, per annum-
– Tes. As the. honorable member for Maranoa said, all we ought to he concerned about is to do mere justice to those men who tackled a tough proposition in a light rainfall area, where the climatic conditions are bad. In this case, at a time when the owners, after a life’s work, might expect to reap a decent reward for their ‘ labours, the war-time profits tax takes 75 per cent, of the net earnings in’ the years of greatest fruitfulness.
I ask that the leaseholders in these areas in Queensland should be allowed to make out their case to a Board, which, I suggest, should be constituted of the Taxation Commissioner or the Secretary to the Treasury and two business men - say, one man acquainted with rural con ditions and another man well versed ir* the trade, commerce, and finance ~of thecommunity. Such a Board would heir* the Treasurer and the Commissioner tosee that justice waa done.
– The original Act made provision for the appointment of such a Board.
– I am aware of that, and I am making a suggestion as to how the Board might be composed. The creation of such a body would be viewed .by the taxpaying community as a step in the: right direction. We wish to do a fair thing by the Treasurer, and we desire that he and his taxing master shall havean intimate knowledge of the working of the industry.
– The hard cases are notconfined to the northern States.
– Or to leasehold areas.
– Australia is a land subject to drought, and the honorable member cannot point to a proposition in any other .State which, in twenty-six years, had ten years of absolute loss.
– (But there are otherforms of injustice equally severe.
– I invite the honorable member to indicate them to the Blouse. These northern pastoral properties can be worked only by the employment of a huge amount of capital. It is heavy country to work, it must be held in big stretches, and requires a large expenditure for artesian and sub-artesian boring and general management. If the Government, by their taxation measures, drive away- the men who are operating these properties to-day, how will they find other capitalists to take them up at a time when the tendency of capital is toseek city investments ? The Treasurer (Mr.. Watt) may reply that the existing provisions of the Act meet such cases. I have carefully examined the Act, and I tell the Treasurer that its provisions do not afford the necessary relief.’ I am aware that there are sections under which some relief may he obtained;, hut I am not content with that. I ask that a specific arrangement shall be made by which the Commissioner will know the mind of the
Legislature in regard to such propositions.
I now call the attention of the Treasurer to a glaring anomaly in the administration of the war-time profits tax, and to what I believe to be an ambiguity in theAct itself.Section 17 gives this definition of “ capital “ -
The amount of capital of a business shall be takento bethe amount of its capital paid up by the owner in money.
I desire to bring under the notice of the Treasurer the position occupied by owners of landed property - that is, several owners holding freehold land separately, but working it jointly in partnership. In his administration of the Act the Commissioner interprets the word “ owner “ in the singular, and not in the plural sense, with the result that owners holding land separately, but working it jointly, do not get the benefit of the 10 per cent. exemption on their capital. I also remind the House of the definite statement made by the former Treasurer, the late ‘Lord Forrest, when he brought down this measure. “ This,” he said, “is not a tax on individuals. It is a tax on a business.” I respectfully submit for the Treasurer’s consideration that it does not matter whether a business is carried on by a single individual or whether it is carried on by three or four persons in partnership. It remains a business, and all the capital employed in it should be regarded as capital of the business, and enjoy 10 per cent. exemption.
– Is the honorable member referring to a case in. which the stock of the business is jointly owned, and the land severally owned ?
– Yes, and I remind the Treasurer that another enactment has been passed, the Federal land tax, to prevent the aggregation of holdings. Well, here is a case in which a family property had been divided into four sections. Four sons each took a section, but agreed, for the purpose of economy, to manage it as one property, pooling their land and their stock, but the land remaining as the separate property of members of the family. That, I claim, is only one business.
– You cannot have both. They cannot divide property to evade the land tax and also escape this tax.
– I am glad the Treasurer has made that statement, because I thought that was in his mind, but I believe that eminent legal authority in this country holds an opposite view. But that does not matter for the purpose of my case. The intention of the Legist lature in regard to that measure was that estates should be cut up, and in the case to which I refer, the property was divided into four holdings.
– That was not the intention of the Legislature.
– It does not matter. I again remind the Treasurer of the statement made by the Prime Minister (Mr. Hughes) at the time. He pointed out that he did not mind if that was the result, so long as there was a cutting up of the main estate.
– What the Legislature wanted was a bona fide dispersal.
– Then I venture to say that the traditions of this country show that as families grow up, the lands are divided by the sons bona fide taking their shares of the property. I want to argue this question on its merits. I submit that in the case to which I refer the family had complied with the intention of the Legislature. Suppose four brothers enter into partnership in a business in this city, and employ, say, £100,000 for the purchase of a business, renting a Flinders-street property. On the whole of that capital they will get the advantage of a 10 per cent. exemption. But if they determine to go into partnership on the land, and in a bona fide manner purchase four separate holdings side by side, but decide, for the purpose of economy, to work them in partnership, they could not get the benefit of this 10 per cent. exemption on. their capital.
– They will get treated exactly the same if they go into partnership and put in money or kind.
– I do not think that is so. The Treasurer has pointed this out before to me, but his statement is not in accordance with the Commissioner’s interpretation of the Act. I have no desire to labour the question, but I am convinced that a great injustice is being done to a particular section of the community. The Act says that the capital of a business shall be taken as the amount paid by the owner in money or in kind. That does not affect the point I am making. The trouble is that there is no definition of “ owner.”
– -That is not the point. The question is, do they pool their lands and stock? If so, then it is capital of the business, and is allowed accordingly. If it is not pooled, but is held separately, there is no allowance. ‘
– Again, I say the Treasurer’s statement is not in accordance with the views of the Taxing Master.
– It is correct, anyhow.
– ‘The whole tiling hinges on the interpretation of the word “ owner.” lt appears in the singular, and the Commissioner holds that it does not apply to owners’ of land held separately, although worked in partnership. If the Treasurer will tell me that he is content to regard the word “owner” as incorporating “ owner “ or “ owners,” I shall be quite satisfied.
– As far as I know, the difficulty does not arise out of the interpretation of the word “ owner “ at all, but whether the land is pooled, as the stock is, and whether it is brought into the partnership.
– Let me take that statement and analyze it. The Act allows for a pre-war standard for exemption of 10 per cent, on capital. The fundamental intention of the Legislature was to give all the capital employed in a business, whether a single business or a partnership, an immunity of 10 per cent. But, later, some cases which had cropped up were submitted for the consideration of the Treasurer, and he agreed that if there were greater earnings than 10 per cent., the taxpayer would have the right to select, as a pre-war standard, any two of the six pre-war years. For the life of me I cannot see anything in the Act Which gives the Treasurer or Taxing
Master the right to treat “ owners “ differently from “ owner.”
– If the honorable member will look at the Acts Interpretation Act 1901, he will see that words in the singular include the plural, and vice versa. There is no legal difficulty about that, so far as I am aware.
– I .believe eminent counsel have been looking into this matter, and expressed the opinion that owners or partners are entitled to the full exemption of 10 per cent- I .would much prefer that this matter were made clear in the Act, because we do not want our taxpayers to be involved in litigation or come into conflict with the Commissioner on a matter of interpretation. In order to make the matter perfectly clear, I have already circulated an amendment, for Which I ask the earnest consideration of the Treasurer.
– But what is the advantage of. that opinion if. the Court has decided against them.
– The Court has not decided against them. I know the Treasurer is sympathetic with men who are placed in a false position, and I should like to put this case before him clearly.
– Yes ; and I am anxious to get the Bill through, too.
– 1 will not detain the House for long. I do not mind telling the Treasurer that I came from a distant constituency to place this subject before him to-day, and I am. leaving again in the morning.
I desire to give the Treasurer one or two illustrations of the difference between the positions of propertyowners affected by this legislation. I am going to show that if a property is held in partnership it is taxed under the War-time Profits Act, even though it may not yield 5 per cent, interest on capital. Surely this is a grave injustice, seeing that captains of industry - wealthy men - can enjoy incomes up to 10 per cent, and escape taxation. I submit now a clear case of injustice. The capital of the property to which I refer, including land and stock, for the 1915-16 taxable period, when the 50 per cent, increase operated, was £15,853, and the loss in that year -was £1,500, so . no tax was paid. But, in 1916-17, on a capital of £22,160 the profit was £6,300, and the tax payable, £4,225. Now, if that property were held by one single owner the tax would have been nil; but, as it was held in the partnership, the tax was £4,225. Surely that is a glaring injustice. Let me also take the year 1917-18, when the 75 per cent, increase operated. In that year, the capital was £26,308, and the tax payable £1,896. If the property had been owned by a single person, it would not have been taxed ; but, as- it was held in partnership, it was taxed to the amount named, although it does not yield a return of 10 per cent, profit on capital. This House should rectify that anomaly.
– They increase their capital every year.
– They increase their capital by increment of stock, but, during’ a period of drought, they might lose £3,000 or £4,000 by loss of stock.
– I do not see how they could lose morney and yet put profits into capital.
– They could increase their capital in any way they pleased. Surely the honorable member does not think that if £22,000 capital is employed in a property that, earns a partnership profit of £63,000, a tax of £4,225 should be paid by the three partners, whereas if the same property were owned by one man it would pay no tax at all.
I am afraid that I am unable to impress the Treasurer, but I hope I shall obtain from him the promise that the two cases I have named - that of the northern cattle-owner carrying on operations in the drought area, who has to balance his good years with his bad years-
– I am afraid that we cannot confine it to any particular area.
– I point to thi? only as a typical case. I know that in our legislation we cannot discriminate between States or parts of States, but I ask the Treasurer to give this case the most earnest consideration.
– I will consider it, and will confer with the Commissioner with respect to the joint and several ownership question raised by the honorable member.
I am convinced that the honorable member, when he secures the Commissioner’s view, will find that he has made some error.
– I should be glad to learn from either the Treasurer or the Commissioner in what respect my statement of the case is incorrect. I have clearly pointed out that, in the case of a specific property, where the business is carried on as a partnership, a tax of £4,225 is paid in one year, whereas, if it were carried on by one individual employing the same capital, it would not have to pay anything under the Act.
– I know the case referred to. It is quite correct.
– I have stated the two cases in which I am particularly interested, and we shall hopefully, await some result of my explanation of it.
The honorable member for Kooyong (Sir Robert Best) made a general and very good survey of the operations of the Act. I appreciate what the Treasurer and the Government have done in so far as these amendments of the principal Act go; but they are insufficient. They do not meet all the cases. I have always felt that this is not the most equitable means of collecting revenue in time of war. The one provision which gives me some satisfaction is that declaring that the Act shall expire on 30th June following the declaration of peace. When it passes out it will certainly have no mourners. I do not desire that- any one who has mad? inordinate profits shall escape taxation, but in the War-time Profits Tax Act we have departed from a principle that is embodied in all our other direct taxation measures. In the direct taxation of the Commonwealth we have always considered the capacity to pay as the governing factor, but here we have a flat tax of 50 per cent. , irrespective of what profit is made. I do not know whether the Assistant Minister for Defence (Mr. Wise) can tell me what is the reason for this departure. Under this taxation the comparatively small man, making a profit of over £1,000 a year, pays the same percentage of tax as does the man who makes a profit of a quarter of a million. Surely that is not equitable. I am afraid, however, that it is too late to have this anomaly removed. The Bill is fast approaching the date when it will expire, and will soon pass out.
The Leader of the Opposition (Mr. Tudor) spoke enthusiastically of direct taxation, «nd said he wished that we had more of it. In my judgment no factor has operated more in the direction of increasing the cost of living than has the war-time profits tax. Immediately the tax was passed there was a fresh stocktaking ‘throughout Australia. Everyone began to consider how he could adjust his business and make his old-time profits with less risk on a smaller turnover. I do not desire that men who make big profits should escape proper taxation, nor do I find much comfort in the statement that taxation similar to this is in operation in the Old Country, since the conditions operating there are altogether different. I am content to allow this law to operate until the period fixed for its termination, and I hope we shall have from the Treasurer a distinct promise that at the very outside it will not be continued after 30th June next.
.- On a pre,vious occasion this evening I was not afforded an opportunity to record my protest against a Bill that had been introduced by the Government; but in this case I wish to explain that, although I strongly favour the principle of taxing those who make profits out of the war at the expense of their country, I do not believe in hampering businesses that are struggling for existence in a new country. In a comparatively new country like this there must always be young businesses which are developing and growing as the years go by, quite irrespective of whether we have war or peace. If men have made undue profits during the war they should bo taxed, but surely the section in the British Act which averages the profits that a man has made over the four years of war provides an equitable method of determining whether or not he has been profiteering. When I asked the Leader of the Opposition (Mr. Tudor) to-day what he meant by “ profiteering “ he said that profiteering was the making of undue profits. I was interviewed this week by men who have been doing a tre mendous turnover. They turned over their capital no less than seventeen times in the one year, but they made a profit of only 2 per cent, on their purchases.
– Two per cent, ‘on each turnover of capital?
– These men sold their goods at a profit of 2 per cent., so that since they turned over their capital seventeen times they made a profit of 34 per cent, in the year. But because a man has the industry and energy to turn over his capital so many times in a year, are we to say that, although he makes -only 2 per cent, on each turnover he is robbing the people, or profiteering?
– A greengrocer turns hia capital over twice a week.
– No doubt. If a man is selling his goods at a profit of 2 per cent, it cannot be said that he is profiteering. The War-time Profits Act has caused more irritation and disturbances of feeling on the part of the commercial community than has any other Act of Parliament.
– Except the War Precautions Act.
– That is a mere baby compared with the War-time Profits Act. Honorable members generally desire that no man should make undue profits out of his fellow citizens when the nation is passing through a period of stress and trial.
Let us look at the facts in this case. It was estimated that the Government would collect about £1,400,000 in respect of the operation of this tax last year. I understand that the Department only collected £600,000.
– The estimate was £1,000,000, and £600,000 was collected in the first year, and practically the balance has since been collected as arrears.
– That means that people got into financial difficulties, and had to make arrangements with their bankers or other persons to finance them to enable them to pay the taxation imposed by the Government.
– No, it was due to delay in assessments sometimes.
– It. may have been to some extent, but it certainly created1 a great deal of difficulty for traders and business people generally. The Bill now before the House will create a great deal more difficulty. By an Act of this Parliament, we said to business people, “ There is the law, and under it you can conduct your business.” Now the Government propose to amend the law by altering the fundamental conditions on the faith of which men have invested their capital. They have invested money in machinery, in new buildings, and in’ other means to develop and expand their businesses, and all this has given increased employment, but now the Government tell them under this Bill that they will be allowed only a profit of 10 per cent, on the new capital which they have put into those businesses.
The Treasurer (Mr. Watt), in introducing this Bill, said - “ I am aware that the Act has proved irritating to many persons.” “ The Government is alive to the fact that during the last twelve months there has been a sustained agitation for the repeal of this Act.” “ In studying the circumstances of the new businesses that have come within the 1915-16 assessment it is plain that the tax has operated with repressive effect.”
– Who said this?
– The Treasurer.
– It was rather a good speech.
– It was a very fine speech indeed. There was some little interlude between the honorable member for Capricornia (Mr. Higgs) and the Treasurer, and I believe that the honorable member for Indi (Mr. Leckie) interjected, “This will be retrospective for three years,” and the Treasurer said in reply -
That is one of the difficulties in regard to the operation of War-time Profits Acts; but, since our “financial necessities are great and increasing, we cannot write an indemnity ticket for any citizen who speculates.
– That was in relation to shares.
– Quite so. There is no doubt that the necessities of the Treasurer were pressing when this legislation was introduced. Every member of the House must sympathize with the honorable gentleman in his desire to obtain money wherever he can to meet the necessities of the Government during the current financial year. But times have changed.
– The interest bill has not gone down.
– That is so, but the Treasurer can see at least £20,000,000 cut off his anticipated total of £80,000,000 for war expenditure, and in view of that saving in expenditure, and in view of the fact that £1,600,000 is all that will be collected . under this measure, if the whole of the taxation due under it is obtained, I ask the Treasurer to consider whether the continued imposition of this wartime profits taxation is worth while.
– The £20,000,000 to which the honorable member refers as likely to be saved will be saved from loan expenditure.
– I know that that is so, but the Treasurer is contributing a considerable amount of revenue this year towards the payment of the war debt.
– That is fixed, of course.
– I know that. No one knows better than does the Treasurer the fear, turmoil, and tribulation which the war- time profits tax has caused, and I ask him to consider whether it is worth while, for the sake of £1,600,000, to create so much trouble in the community, and so much turmoil in business, when at the same time the honorable gentleman is aware that it is impossible to impose taxation of this kind scientifically. I venture to think that if the Treasurer will seriously consider the matter he will find that for the anticipated revenue from it, it is not worth while to continue this taxation.
I intended to speak on this Bill at some considerable length, but as the honorable member for Kooyong (Sir Robert Best) has dealt very clearly with many of the points I intended to put, it is not necessary that I should repeat what he has said. In connexion with the appeals that are being constantly made, and one of which I submitted to the Treasurer today, I urge that it would be wise for the Government to appoint the Board of Referees provided for in the principal Act at the very earliest moment. Rightly or wrongly, when a man appeals to the Taxation Commissioner, and that official disagrees with him, he comes away with a feeling that it is the duty of the Taxation Commissioner to get all the revenue he possibly can, and he has not, therefore, been given justice. I am certain that capable and honorable men can be found “ for appointment to the Board of Referees provided for, and they would do justice to the Treasury, and, at the same time, give hard cases a fair deal.
There is another matter which I should like the Treasurer to consider. He proposes an amendment of the existing Act, granting exemption from war-time profits taxation to agents who make their livelihood from a purely agency business. That will give considerable relief to these men, no doubt; but it is difficult to draw the line of demarcation between a man who makes his living as an agent and one who makes an income from commission as an agent, and at the same time is concerned in some small business for the sake of increasing his income. I have in mind the case of a gentleman in this community who can retire from the business in which he is engaged, and still make £10,000 a year profit out of his agency, without a cent of his own money being invested in the business for which he is agent. I know the case of another man who makes £600 a year out of an agency business, and who from a side line in commercial life makes £800 or £900 a year. The latter man making £1,500 a year from his agency and his business will be taxed under this Bill on the whole of his profits, whilst the other man can make £10,000 out of an agency, and, as he is not carrying on a business, will not be taxed under this measure at all. If it is right in principle to exempt an agent, the exemption should apply to all agents.
– Why not include them all?
– If all are included, my argument falls to the ground; but if some are exempt and others are included, the Bill will treat those who are included very unfairly.-
The only other matter to which I wish to refer is the proposal to allow only the statutory percentage of 10 per cent, profit on new capital. The Government will be well advised if they reconsider their proposal to limit the interest on new capital invested in a business to 10 per cent. If the limitation were to be made to apply to the current year 1918, no mau. could raise his voice in opposition to it. Business people would be given a fair warning that the limitation would apply to their operations this year, and before they had allocated their profits. But it is proposed under the Bill that the provision shall be retrospective for two and a half years. After a man has operated his business under the provision of the existing law, by which he is entitled to the pre-war standard of profits on his increased capital, it is not- dealing fairly with him to make an amendment of the conditions under which he has carried on his business, retrospective. If the Government would say that they require that the profit allowed on new capital shall not be more than 10 per cent, for this year, I should be prepared to support them, because then every man in business would know what he had to expect. I believethat, on reflection, the Treasurer will probably consider that it is unwise to make this proposal retrospective for two and a half years. As the honorable gentleman is aware, I have in the State Parliament of Victoria, as well as in this Parliament, always strenuously opposed retrospective taxation or legislation of any kind. I do not believe in it. I consider it immoral on the part of any Parliament to legislate backwards.
– What about the immorality of the profiteers?
– I have heard a lot of “ tripe “ of that kind talked. We hear general statements made about profiteers, but no one in this House, or anywhere else, has yet said who the profiteers are.
– The honorable member said that he has no sympathy with them .
– Nor have I.
– The honorable member now says that they do not exist.
– I do not think that they do exist in this country. There has not been the opportunity for profiteering here. Honorable members have referred to the high price of galvanized iron. They have said, “Look how we are being robbed ! Galvanized iron is £70 per ton!” They do not say that any one has bought it at that price.
Withdraw the regulations under the War Precautions Act, and the commercial life of the country will soon stabilize itself. To-night I heard that the moment the war collapsed wire-netting, which had been quoted at £112 per ton, was quoted by a firm at £45 per ton. They had not any on hand, but they knew where they could get some.
– Why did the price of boots go up 50 per cent. ?
– I suppose the difficulty of manufacturing them increased, or that there was more difficulty in obtaining leather. You must know the whole of the circumstances surrounding an increase in price before you can be sure that there has been profiteering. The price of kerosene, for instance, is three times as high as it was before the war, and people exclaim that the man who is selling kerosene is profiteering. No regard is paid to the fact that he probably was charged six times as much for freight as he had formerly to pay. When reference is made to the increase in freight, it is thought that the ship-owner must be making huge profits; it being forgotten that half his vessels have been torpedoed, that wages have gone up, that the crowd supporting honorable members opposite goes on strike occasionally, and that then ships lie at the wharfs, piling up demurrage. All these things honorable members forget deliberately.
I make a final appeal to the Treasurer to reconsider the operation of the 10 per cent, on added capital, and ask him to agree to an amendment to make it apply to this year only, and. not retrospectively for two and a half years.
, when speaking on the War Precautions Act, expressed a desire that we should get back to normal conditions of trade and industry as soon as possible. He has an opportunity to expedite that process by putting an end to’ the operation of this tax at the earliest possible moment. I do not think that it should, continue a day beyond the end of the present year. It is a war-time profits tax; the war is now over; and the tax should, therefore, end with this year.
I do not propose to traverse the arguments of previous speakers. I support the appeal that the 10 per cent, on added capital shall not be made retrospective. I hope, too, that the honorable gentleman will take note of the cogent reasons that have been advanced in favour of Averaging profits during the accounting period, so that the tax may be levied on the profits actually made . during the period of the war, and not assessed on returns for individual years. I shall not labour these points, because the Bill is one to be dealt with in Committee, where they can be discussed separately, and settled. I consider the amendments now proposed an improvement on the original Act, but we should at the earliest moment relieve those who are prepared to invest capital in new businesses by the abolition of this tax. It is by the establishment of new businesses that the pressing liabilities incurred during the war will be met. Tlie tax should be abolished, not only so that those investing in new businesses may be able to make a profit from their enterprise, but in order that confidence may be given to investors. The Treasurer’s speeches are generally very able; indeed it sometimes takes the House a considerable time to recover from their hypnotic influence, and to discover that the proposals which they support are not as perfect as they had been made to appear. In a very able speech regarding this tax the honorable gentleman said -
I believe, too, that to some extent it has retarded new business enterprises, and has discouraged the expansion of existing undertakings.
That, to my mind, is an indictment of the tax, and the Treasurer should meet the wishes of members generally by striking it off the statute-book as soon as possible. In my opinion that would cause no serious loss of revenue. During this and the next half-year business men will have to unload at very reduced prices large stocks bought at very heavy cost, and for that reason this financial year is not likely to yield nearly as much from the tax as was originally estimated.
– What is being collected this year is the tax on the 1916-17 assessment.
– But the tax on the profits of this year will be collected later.
– The Treasurer in his Budget speech stated that £1,800,000 with arrears was likely to be yielded by the tax during the current year. Reduce that amount by £300,000, which makes it £1,500;000, and assume that the yield during the present year will be only half that amount, or £750,000, and that may be taken as the loss which would accrue to the Treasury if the tax were abolished at the end of the year. I know the great financial abilities of the Treasurer, and I am satisfied that in the lightof the new conditions due to the cessation of hostilities, he could take back the Estimates, and reduce his proposals for expenditure by £750,000 or £1,000,000, which would be more than the amount lost by abolishing the tax. I hope that in Committee it will be possible for the honorable gentleman to meet the wishes of honorable members and of the commercial community by encouraging the establishment of new businesses to meet the pressing financialobligations which have been forced on the community by this terrible war.
Some little time ago the Government asked the Inter-State Commission to inquire into the possibility of establishing new businesses in the Commonwealth, and if any one will take the report of the Commission, he will see that there are dozens of businesses which can be expanded, and many new businesses which can be started, businesses which we should have had in Australia long ago. We have imported from other countries 10,000,000 lbs. of tobacco leaf, and only 1,000,000 lbs. have been grown in Australia; and similarly we import the greater proportion of the hats, olive oil, and paints that we use.
– Order! The honorable member is now going Tight outside the scope of the Bill.
– I am merely showing that if this tax were removed it would be possible to establish new businesses in Australia. When we return to normal conditions, those who wish to do so will be able to embark upon enterprises not merely of a secondary, but of a primary character. The reports of the Inter-State Commission show that there is room for the expansion of new businesses all over Australia. I am sure that the continuance of this tax will seriously retard the establishment of those businesses by reason of the loss of confidence which its operation will engender. In these circumstances I hope that it will be possible for the Treasurer to meet the wishes of those who would otherwise embark upon primary and secondary industries by declaring that this tax shall cease to operate on the 31st December. There may, of course, be some difficulty in the way of abolishing the tax in the middle of the financial year. But large numbers of the commercial community undertake their balancings at the end of the calendar year, and many of their balancesheets up to that date are accepted by the Commissioner of Taxation. I hope that, in Committee, it will be possible to make amendments in the principal Act in the direction of the finding of the profits over the accounting period, of affording some relief from the retrospective effect of the allowance of 10 per cent. on capital, and of aiding new businesses to the extent, at least, that is contemplated by the Treasurer. But the greatest relief of all must come from the early termination of the Act. I trust that, in Committee, the Treasurer will announce that the measure will not be continued beyond the end of the present financial year.
.- This Bill is so very important that I do not care to allow it to pass without making some confession of faith, or want of faith, in respect of it, especially as I was not a member of this Chamber when the principal Act was passed, and have not previously spoken upon the question of wartime profits taxation. I am emphatically in favour of war-time profits taxation, because I believe that if profits are earned during war time in excess of those earned in pre-war days, some taxation should be placed upon them. There are, I think, three main reasons advanced in opposition to war-time profits taxation in Australia. The first argument is that, in the true sense of the term, there are no such profits being made here. I agree with this to the extent that there are no great armament or shipbuilding firms in Australia which are making enormous profits. But the profits which are being made in this country to-day are entirely attributable to the war, and to the fact that the people possess a very much greater spending capacity than was ever possessed by them ‘ previously. I can say from my personal experience as managing director of a large business, that, at the present time, the main reason which is contributing to the success of almost all businesses in this country is that more money is being expended by the people. That money is coming from the prices which are being received for the produce of this country, from the expenditure of the Government in respect of the war, and from the great inflation owing to our enormously increased note issue. But all these factors are attributable to the war, and they are the factors which are enabling businesses to be conducted successfully. For this reason, nobody can maintain, with any show of reason, that no war-time profits are being made in this community.
The second reason urged against wartime profits taxation in Australia is that it would be more equitable to raise the revenue that is required by the Government by means of an all-round increase in the income tax. At first sight that appears to be a sound proposition, because we have to recollect that the businesses which are making more money to-day than they did formerly, would then have to pay taxation, not merely upon their excess profits, but also upon the profits which they made in pre-war days. However, I do not think that that is a fair proposition, because there are certain persons whose ‘ incomes during waT time have not increased, or even ‘ remained stationary, but have decreased. It seems scarcely reasonable that we should levy an additional burden upon people of that class. The third argument advanced against war-time profits taxation is a much more vital and a better one. It is that it puts a curb upon the establishment of new industries. With tha’t contention I entirely agree, and in the absence of some relief in that connexion, I would be ‘compelled to oppose the Bill. But upon this particular matter a concession has been made, and consequently I ‘think that the ‘whole three arguments have been wiped out.
There are various matters upon which I desired to touch in connexion with this Bill, but most of them may he more appropriately discussed in Committee. There are, however, one or two broad principles embodied in it to which I wish to refer very briefly, in order that they may have been mentioned before we reach the Committee stage. I allude to certain clauses in the measure relating to new businesses and to other clauses dealing with the introduction of new capital into old businesses. The Government have decided to insert in the Bill two clauses dealing with new businesses, under which they propose to allow such businesses the average rate of profit on capital that is allowed to a successful business of a similar character. In the case of businesses where, there are not similar businesses in existence, the matter is more or less at the discretion of the Commissioner; but, taking ‘the case of a business similar to existing businesses, I personally cannot see that the concession being made is of any real value. I believe that the Government, quite sincerely, think that they are helping enormously; but I cannot see that they are. There is, in my opinion, very little inducement for new businesses to be started on the same basis as an old, wellestablished, and successful business; and I have worked out as simple an instance as I can in order to demonstrate what will actually happen. Let -us take the case of an ordinary business with a capital of £2,000. In the early days of a business, a man has very likely only that £2,000, and before he can put any more in, he has to shift some of the goods he has purchased, for he cannot afford to carry a dead stock. The result is that he pushes his business extraordinarily hard, and will very likely turn over his stock the first year five or six times, or even seven times. The result of this, on the capital of £2,000, will be, to put it mildly, that if he turns it over from four to five times he does a trade of about £10,000 a year, and his net profit on that turnover is possibly in the region of 7 per cent, or 8 per cent., or a profit of £800. If he has turned his stock over at that rate, he has run it on a margin of ls. 6d. in the £1. He has not been profiteering, but has been merely thrusting his trade because his capital is so small. The result of this legitimate trade in the first year is, as I say, that on the £10,000 he has made a profit in every way legitimate of £800. Let us take the rate on capital to be shown by an established business of a similar character, and put it pretty high, say, 15 per cent. That will mean 15 per cent, on £2,000, or £300; while he has actually made £800. I suggest that this man has ‘done nothing but be a hardworking, industrious trader; he has made no excessive profits; everything he has sent out to the public has been sold at a fair profit if he only gets 7 to S per cent, on his turnover. It may not be in the knowledge of all honorable members, but a man simply cannot run the risk of conducting a business, unless it is a business of the nature to which the honorable member for Henty (Mr. Boyd) referred, and doing an enormous turnover, on the basis of ls. in the £1, or 5 per cent., because he is almost certain to come to grief. In the instance I have given, the man has been working on 8 per cent., and there is no reason why he should not be entitled to keep that to build up his business. I have given a concrete instance to make honorable members realize that a return on capital in new businesses is not a fair basis to operate on. In an oldestablished business, it is a different matter, for we generally find that if the ratio of the stock to turnover is 3-& to 4 times, it shows an extraordinarily good and efficient management. The reason is that the man has to carry a lot of dead stock that possibly does not go out once a year; and the result is that what is a good percentage for an old business is absolutely an impossible basis for a young business which has no capital it can leave dead or idle. I certainly think it would be a good thing if some consideration were given by the Treasurer to this point, because it is a serious one to many businesses. As I have said, I do not think that the encouragement the Government think they are giving to new businesses is, in fact, operative. I can tell the Treasurer that many people, on first looking at the proposal, entirely agreed that the Government had done everything to help; but when they investigated, they found that it did not help very materially.
The other point I wish to refer to is with regard to the wiping out of the permission to the proprietors of a business to take its average rate on capital before the war on new capital, and this is a difficult one. I have at the back of my mind a suspicion that certain young businesses started just prior to the war may have earned quite legitimately in the pre-war period a return on capital of 40 to 60 per cent., or even higher, and are still enabled to retain a return on capital at such rates; although, through the introduction of new capital, such a return is out of all reason, and opens the door to ‘ profiteering. For that reason, I cannot vote against what is proposed ; but, at the same time, I feel it is a bad principle to go back, and now say we are going to collect for two and a half years. The Act was passed on the 22nd September, 1917, and ever since then the business community have imagined that they have a contract with the Government to retain certain profits. On this they have acted, and either distributed their profits or put them into their businesses. It is a dangerous thing to now upset the whole of these commercial operations; but if the Treasurer assures us that the returns for the first year disclose such a position as I have suggested, and certain businesses are getting an improper rate on new capital, I am not prepared to offer opposition. I think that when we get into Committee we shall be well-advised in seeing whether we can amend the particular clause so as to catch the profiteer, but do no harm to the man who is making a legitimate turnover and getting a reasonable profit. I suggest that when we come to the consideration of new businesses, we can introduce a new principle, which is the principle of percentage to turnover. And I think we had better look at the next clause as to additional capital, and see if we cannot do the same thing. If we can do that, we shall do no harm to the man who has been making a large turnover and getting a reasonable profit, which means that he is selling at a fair and honorable price, and we shall catch the man who has been doing a turnover made up mostly of profit. I will give an example. Suppose a man does £300 of turnover, which is quite legitimate in that he is legitimately selling something of a value of nearly £300. That is to say, he is selling goo.ds of that value at a decent profit. No harm would come to him. But if a man has had £100’ worth of goods, and has sold them for £300, because the market is bare, or for some other reason, he will have the whole lot taken away. That will be because he cannot show a reasonable rate of profit upon the turnover. For the reasons I have given I believe that we could get over the more serious difficulty by changing the basis for back years of taxation in respect of new capital from a percentage on capital to a percentage on turnover. Under tlie Government proposals we would be doing a very hard, and, to my mind, dangerous thing; but I would be prepared to support those proposals if the position were that some one had been behaving in an improper manner.
I desire to refer briefly to a suggestion which has been made several times during the course of this debate. With respect to the pastoral industry, it may be an excellent idea, but as for trading and commercial concerns, the project is, in my view, one of the most dangerous that could possibly be presented. I refer to the matter of averaging over the war-time period. The war-time profits tax extends over the past three and a half years, and there is only half a year to go. Those profits during that past period have ali been made. Every party concerned knows where he is in regard to them. Every one has paid only his first year’s taxation. At the time of the commencement of the period covered by the Act, it might have been an excellent plan to include an averaging clause; but to insert it now would mean that every trader who is holding a big stock would take immediate steps to realize. His incentive to do so would be that he would recall that he had made considerable excess profits on which he had not yet been called upon to pay the tax. But he would realize that that payment would be coming due, and he would wonder whether he had not better get out at any price, taking advantage of the protection open to him by way of the averaging proposition. It would be an incentive to him to get out of his existing stock because the Government, to all intents and purposes, would be paying him.
– The man who buys in would have to pay the tax.
– Yes ; but there are two sides to that. That man would get the stock more cheaply, but, inevitably, the public would have to pay more for it. If an averaging clause were inserted, all the big wholesalers would get rid of their heavy stocks; they would do so in selfdefence. The goo.ds would get into the hands of the retailers, and, very likely, later on there would be a shortage. The retailers would not see any reason why they should not make the profits open to them. The more serious side is that there would probably be created something like business chaos if an averaging provision were inserted at this stage. Possibly, it would ruin half the small traders. Any one who advocate3 the insertion at this stage of an averaging clause, when the Act has practically run its course, would be offering a direct incentive to those who were carrying a big stock at high prices to get out, under cover of that averaging clause, at the virtual expense of the Government. And it would be of no benefit to the community at all. I feel strongly that this side of the question should receive consideration. Personally, I cannot quite see the end of the disasters which ‘might occur if the community were faced with the position of every person and company that carried heavy stocks clearing them practically at the expense of the Government.
.- I -would like to see the War-time Profits Act wiped off the statutehook, if that were possible. But for the statements of the Treasurer (Mr. Watt) that there are so many instances of great profiteering going on, and that it would be unfair to the community to repeal the Act at this stage, I would like to see it go altogether. I would prefer that- a super-income tax were imposed in its stead. When the measure was first presented in this House, honorable members realized the inequalities and inequities which must exist under it. So far, the Act has been anything but fair in its application to the community generally. I do not wish to go into any great length of detail at this stage, in connexion with the amending Bill ; but there is not the slightest doubt that the Treasurer has been listening chiefly to the business people in the cities. They are the folk who, apparently, are to be the most cared for under the amendments now proposed. I cannot understand why the Treasurer has consented to present an amendment which is to have the effect of releasing the jobbers from taxation. A certain section of traders have been living on the necessities of the people. These men have been getting first-hand information and buying up supplies. They are solely and wholly jobbers. They have no capital; and now they are to he exempt from this form of taxation. I cannot understand why it should be so, and I hope the exemption will not be granted.
I desire to speak particularly on behalf of those people who have started out in the pastoral industry during the past five, six, or seven years, and who, up to the commencement of the war, have shown little or- no- profits. I shall give one instance. A certain individual put a large amount of capital into ,the pastoral industry. During the whole period, up to the beginning of the war, he showed *a loss each year. He did not make interest on his capital, nor was he allowed to charge it in his return. At the beginning of the war he had up to £20,000 invested’ in a station. In the first war year he showed a profit of £1,200 without interest on capital. Next year his profits amounted to £4,800. Then that man received notification that he must pay £2,050 by way of war-time profits, whereas, probably, his neighbour, who might have made £20,000 that year, would not be called upon to pay a single sixpence. I have given notice of an amendment to provide that any person starting in a business of this sort shall be permitted to make 10 per cent, interest on the capital employed in the pre-war years. A pastoralist is not even allowed to deduct his losses. I have particulars of one pastoralist who in one year lost £788, and in the next year £618. He was anxious to deduct these losses, which had been incurred in the pre-war. years from his total profit of £1,522, but he was not permitted to do so. Honorable members have talked about, traders getting 10 per cent, interest on their business concerns before this tax operates, but no such allowance is made to the pastoralist, and if he does happen to make a small profit during the war period he is not allowed to deduct any losses incurred by him in the three pre-war years. The Taxation Department, in a letter to one pastoralist, dealing with this point, has said -
In reply to your letter of the 16th inst., relative to your claim of allowance of deduction of the losses of your station, I would point out that, in order that a deduction may be allowed, section 15 (13) requires that the profits of the pre-war years shall have been invested in the business and lost, and that profits of the accounting period shall have been applied in extinction of that loss.
As no profits of the pre-war year were invested and lost in the business, the section is inapplicable.
I have the particulars of about eight or ten cases of men who six or seven years ago started in the pastoral industry in. Western Australia, put all their capital and labour into it, and showed no profit until within the last couple of years. The Government now claim 50 per cent, and 75 per cent, of those profits, and the pastoralists are not permitted to deduct their losses. They are told that they can only deduct them out of any profits made in the respective accounting periods, but if they made no profits, how can they do so? These deductions are allowed in other businesses. “Why cannot the pastoralist be put on the same footing? The Treasurer has made provision in the last clause of the Bill by which a Board may grant relief where hardship has been occasioned, but why cannot- the same relief be given pastoralists as is given to men in other businesses ? I am not speaking on behalf of pastoralists who have made huge profits, and have a hig prewar standard. ‘If such a person has made bigger profits during the war he can well afford’ to pay this tax, but surely it must appeal to every one as unjust that a poor man, who has been .battling year after year without showing a profit, should be called upon to give up 50 per cent, and 75 per cent, of the small profit that he has finally managed to secure, and which may only ba a book profit, owing to increase of stock upon which he may never realize, while a man with a big pre-war standard will not be called upon to pay any of this taxation. I hope that in Committee a proper allowance will be made to meet the cases I have mentioned.
It should be the duty of the Government to encourage production, but no Government has been so neglectful of the interest of producers. The way in which the primary producers of Australia have been neglected is preposterous. Everything seems to be done for the benefit of the business man who is hanging about the city. The way in which people in the bush are treated in regard to postal and other facilities is almost criminal. The Government advise men to go out and develop the country, but when they get them there no one seems to care, a rap for them ; probably because they are few in number and their voting power is small.
There has been a great deal of talk about the metal industry. The Government have a proposal in the Bill to grant relief to mining companies by proclamation. Relief from this taxation has been asked by tin miners, lead miners, and others. They have urged that it should be given in regard to new mines. They have not asked for total exemptions, but simply that a pre-waT standard of the value of their product .should b.e fixed, as against a war standard, and an. allowance made for the increased cost of production, after which the 50 per cent, and 75 per cent, payment should be claimed by the Treasury. On my last visit to “Western Australia I inspected some lead mines 80 miles from Geraldton. They are marvellously rich, but it is absolutely impossible to induce people to invest capital in them for the purpose of developing them, when the only advantage that they could rely on under this tax would be an allowance of 10 per cent, on the capital invested. Approximately 95 per cent, to 97 per cent, of mining shows have proved to be dead failures. Mining is the most speculative of all industries. What applies in the case of ordinary business does not apply to mining, more particularly mining for base metals. For the last twelve or eighteen months relief has been sought in. connexion with new mines, and now we find that the Governor in Council is to proclaim exemptions in certain directions. If the Government cannot make up their minds now what relief should be granted, how will they be in a position to ‘ do so in the future? I ask for no favours in any particular direction that cannot be given in other directions. If the Government would only allow people to win back from the products of lie mines they develop the money put into them before any taxation is imposed, the position would not be so bad. Either this should be done or the Government should accept the proposal to fix a pre-war standard of value, and make an allowance for the increased cost of production, taking its percentage of the balance. When we get into Committee I hope to be able to go into this matter more fully.
I trust that some better explanation will be given for exempting brokers. When everybody else is to be asked to pay this special war-time taxation I cannot understand why jobbers or brokers are to be- exempted. I have heard a great deal about a number of these people who have been living on the necessities of the community. There are men who have been’ making a ‘living by ascertaining where there is a scarcity of any commodity and by getting special information in regard to shipping which has enabled them to buy up certain products and export them. In this way they have made enormous profits. Yet they are to be exempted from this taxation. I shall do my best to prevent that, more particularly when I find how unequal the taxation is in regard to . many other persons engaged in different industries. If I had my way I would remove this legislation from the statute-book altogether, and impose a super-income tax. It is most unfair to some people, particularly those starting in new businesses such as I have mentioned, and to men who have had bad times on their stations, and are now making a little profit. It is not right that they should be compelled to pay from 50 per cent, to 75 per cent, of their profits now, while others who have been making huge profits during the last ten or fifteen years, and are making no greater profits now, should not be called upon to contribute anything under this tax. There are men and companies making probably £100,000 a year now, and, because they have that big pre-war standard, with similar profits in the past, they are not compelled to pay a single 6d. under this tax. It is the inequity of the measure that I do not like. But now we have it, and I suppose must continue it for a time. I do hope that some effort will be made by the Government to meet the views of those who are trying to protect the people who are developing our primary industries. If that effort is made the Government will have my assistance. If it is not I am sure an attempt will be made to grant some relief to those people on whose behalf I have been speaking.
.- I do not want to appear as opposing the Bill altogether, because, as an amending measure, it certainly gives some relief that was badly needed. But, on the other hand, it inflicts a hardship which more than compensates for any little advantage the Government may be offering to the community. If the Act had to be passed de novo, I would point out that the result of the tax has been to restrict industry in every way, to lessen employment, and to kill revenue. The Treasurer (Mr. Watt) has accentuated the point that the measure was intended to raise revenue, and that he could not afford to give it up. But I believe the real effect of the Bill, so far, has been actually to kill revenue by preventing men from going into business, and getting the due reward for their industry. We are paying a very big price in not having industries established which would have been established if this tax had not been imposed. The clauses relating to new businesses certainly give some relief, but I am surprised to find that some clauses are not included which I certainly expected to find in any amending Bill.
The first is the clause dealing with the average of profits over the years during which this tax is to be collected. From the point of view of the pastoralist that is almost an essential, and I should have thought that the Government, who are supported by country members generally, would realize the position of the pastoralist who has his lean years as well as his plentiful years, the lean years, for the most part, more than counterbalancing the good ones. I expected them to give some consideration to the suggestion that an effort should be made to enable the man who made, a loss in one year to balance it against the succeeding or preceding good year. But what I particularly want is an alteration in the way of fixing 10 per cent as the pre-war standard. The Government have not altered in any way the accounting period which has been fixed as the pre-war standard on which the profits are estimated. As a consequence they have perpetuated that injustice upon a good many firms whose accounting period did not end until a month or two after the 4th August, 1914. They should still take that into account, and allow those firms whose accounting period ended in September or October, 1914, to take into their accounting period those six or twelve months. That was an injustice under the old Act, but, under this Bill, the injustice is accentuated, because the capital they had at the accounting period previous to August, 1914, is taken into account in fixing the pre-war standard, and not the capital they actually had on 4th August of that year, when the war broke out.
Unless this clause is withdrawn, hundreds of firms willbe badly hit under this Bill.
The retrospective action of the measure, as at present drawn, seems to carry it beyond the scope of legitimate parliamentary taxation. The Government told the community that they were going to tax excess profits during war time, and some of the people, though hardly hit, went on building up their businesses on the assumption that they were to be taxed on those lines, and they cheerfully paid the amount at which they were assessed. But the Government now say that they are not going to tax on those lines at all, and the men who have expended their profits in buying machinery and extending their businesses to give employment find, at the end. of this period, after they have dispersed their profits either in dividends or in advancing their businesses, that an extra tax is put upon them. They will be called on to pay very large sums in some cases, which they did not expect to pay, and had not provided for.
– Apparently, it will be more difficult to extract the last shilling than the last man.
– I do not know that the Minister wants to extract the last shilling from those firms who are providing the cash whereby this country is to be run - from the businesses which, after all, will have to provide funds to meet the inevitably large expenditure whichthe Government will have to bear.
The clause regarding the10per cent. acts in a most peculiar way. In a case where, instead of apre-war standard, the 10 per cent. standard is brought in, a firm that was making 15 per. cent. on its capital, and doubled its capital during the interval, is allowed to make a profit of only 13 per cent. instead of 15 per cent. On the other hand, a man who has decreased his capital is allowed to make nearly 17 per cent. on the capital employed, and in addition he can invest the capital he has actually withdrawn from his business in war loans or in some other way, thus making nearly as much money as he earned with the extra capital in his business. So the man who decreases his capital gains under this Bill, and the man who has progressed and increased his capital is penalized. I hope that before the Bill goes through Committee the Government will see that they are doing a very grave injustice to individuals and firms. They are also doing a grave injustice to Australia, because they are killing the very things they ought to encourage, and killing the very employment we need to provide for the soldiers who are just returning. When the Bill went through last year, it was after all-night sittings, when members were fagged. We sat here hour after hour, with the Minister seated at the table and saying, no matter what was suggested to him, “We are going to get this Bill through.”
– That is quite incorrect.
– The. Minister accepted hardly any suggestions.
– I do not think the House was ever treated more fairly than I treated it in regard to that Bill.
– The Minister is the best Minister for standing “ pat “ that I ever met.
– Two out of three of the honorable member’s amendments I had to draft and put in myself.
– I do not remember that, nor do I think the honorable member remembers it. One amendment I really did want to get in I missed the opportunity of moving, through coming in late after an all-night sitting . The Minister promised to look into it, and put it in in another place, but that was the very amendment that he did not put in. The real effect of it was not brought home to the minds of honorable members.
I can tell the House of one business which was established since the beginning of the war by an American firm which started to manufacture its goods in Australia. It has been assessed for two years, and has paid in war-time profits tax and Commonwealth and. State income tax an amount equal to over 95 per cent. interest on the. capital involved. There was left to the firm itself only 4.6. per cent. interest for those two years. I know of a man who was approached a little time ago and tasked to invest £2,000 in a business which would show a clear profit of £1,000 if he were prepared to take a pretty big risk. On consideration, he found that he would have to pay £750 of the profit to the Commonwealth under a war-time profits tax in addition to income tax, and although the enterprise would have given employmentto twenty-five men, he would have nothing to do with it. I know of places in Melbourne where the proprietors are oiling their machinery prior to putting it away if this Bill is agreed to.
– The men who fought at the Front had not their lives to put away; they were taken. I am getting about tired of this pleading for the man with money.
– The Assistant Minister is not fair. No one has denied the money that was necessary to carry on the war, and to pay for repatriation; but many of us contend that themoney could be raised equitably from all classes of the community. Men who possess hundreds of thousands of pounds will escape every penny of this taxation, whilst small firms with a capital of £2,000 or £3,000 are being heavily hit. The Minister talks to me about trying to. shirk the financial consequences of the war. One man to whom I referred as oiling his machinery before putting it away lost two brothers at the war. His father has exactly the same income as he has, but- his money is invested in mortgages and other securities, including War Loan stock. He is sitting tight.. The son has put his capital into industry, and has given employment to over 250 men. Which of the two does the Minister think is giving the greater service to his country? I could quote numbers of such instances. I hope that the Acting Attorney-General, and the Government generally, will see that before the Bill leaves this chamber the inequitable amendments will be withdrawn, and that there will remain only those clauses which will give relief to a suffering community.
Mr.LAIRD SMITH (Denison) [11.20].- I desire anassurance from the Government that something will be done in Committee to give relief to thetin-mining industry, so thatitmay progress, and give employment to scores of men who at present are out of work owing to uncertainty . as to theGovernment’s intentions in connexion with this tax. I was a member of a deputation representative of both parties in the House which waited upon the Acting Prime Minister (Mr. Watt), and I understood from him that the tin-mining industry was tobe exempted under this Bill.
– Everybody thought that.
– I hope the Minister will give the House an assurance now that will relieve our minds in this regard. If he does that, I shall offer no opposition to the passage of the Bill. I ask him to make a brief statement that the question has been considered by the Government, and that tin-mining, and probably mining for other metals, with which I am less acquainted, will beexempted from the war-time profits tax.
Question resolved in the affirmative.
Bill read a second time, and committed pro forma.
Bill returned from the Senate with an amendment.
House adjourned at 11.24 p.m.
Cite as: Australia, House of Representatives, Debates, 11 December 1918, viewed 22 October 2017, <http://historichansard.net/hofreps/1918/19181211_reps_7_87/>.