8th Parliament · 1st Session
Mr. Speaker. (Hon. Sir Elliot Johnson) took the chair at 3 p.m., and read prayers.
Statement by the Honorable Member for West Sydney.
– Has the Minister for Home and Territories seen a paragraph published in this morning’s Argus, in which it is stated that the honorable member for West Sydney (Mr. Ryan), in the course of a speech in Queensland, on Monday,said -
That, combined with the little piece of legislation which disfranchised 260,000 workers of Australia, succeeded in returning to power a Government in the Federal Parliament. . . .
Is it correct that so many electors were disfranchised at the last general election; and, if so; will the honorable gentleman state the reason for it?
– The honorable member having intimated to me that he proposed to put this question, I am in a position to furnish the following reply : -
Apparently Mr. Ryan has been misreported. I am not aware of any legislation which could possibly have the effect of. disfranchising 250,000 persons. The naturalized personsof enemy birth, not exempted, whowere precluded from voting at the elections held in December, 1919, would not exceed 20,000.
– For the whole of Australia.
– Yes. Probably considerably less than one-half of these persons would be workers in the ordinary sense and many of them would have voted for Nationalist candidates.
Purchase of Saw-mills and Timber Areas.
– Has the Treasurer given any consideration to the allegations made with regard to the purchase of sawmills and timber areas by the War Service Homes Commissioner ; and, if so, do the Government propose to direct an inquiry to be held?
– As promised on Friday last, when a question relative to this matter was addressed to me by the honorable member for Corio (Mr. Lister), I have made further inquiries and have also consulted the Prime Minister (Mr. Hughes). In addition, I have talked the matter over with the Minister for Repatriation (Senator E. D. Millen). I have to say that the Minister, as does the Government as a whole, welcomesthe fullest inquiry into these contracts. We have decided in all the circumstances to invite the Public Accounts Committee to inquire into the whole of the contracts, and hope that the inquiry will be as full andcomplete as possible. We have an excellent Committee to our hand for the purpose. It consists of the honorable member for Perth (Mr. Fowler), the honorable member for Robertson (Mr. Fleming), the honorable member for Maribyrnong (Mr. Fenton), the honorable member for Hunter (Mr. Charlton), the honorable member for Oxley (Mr. Bayley), the honorable member for Swan (Mr. Prowse), and the honorable member for East Sydney (Mr. West), as well as Senator Bolton, Senator Buzacott, and Senator J. D. Millen.
– A good Committee.
– I do not think we could have a better one. I hope that it will search these matters to the bottom, so that we. may know what is in these whisperings and innuendoes that are going round.
– I desire to ask the Prime Minister whether Australian-born women married to Germans, Austrians, and other enemy aliens who, up to the signing of the Armistice at all events, were deprived of their citizen rights are to have those rights restored to them? The United States of America has recently taken similar action.
– This is a question to be settled by the Nationality Bill and the naturalization laws generally. A woman takes the nationality of her husband. That has been the law for a very long time, and was not adopted, as the honorable member’s inquiry suggests, merely during the time of war. It has been in operation ever since we have been here. Whether we are to alter it remains to be seen. We have on the notice-paper the Nationality Bill, but whether it covers the matter I cannot, at the moment,say.
– Has the Prime Minister noticed that the Imperial Government has recently been endeavouring to stimulate cotton production within the tropical parts of the Empire? If so, will he offer facilities for cotton production in the Northern Territory, where the possibility of growing excellent cotton was demonstrated thirty years ago?
– I have noticed that the British Government is endeavouring - I hope I may say without offence - more or less spasmodically, to encourage the growth of cotton amongst other Empire products. I hardly think it would be correct to say that it is doing so as a component part of a comprehensive policy. One of the effects of its action in that direction in Egypt is that the Egyptians are giving up growing wheat and going in for cotton production. As a result, I think we shall be able to sell to the Egyptian Government quite a lot of our wheat. Thus, indirectly, cottongrowing is a very good thing for us, especially when it is carried on in other countries. So far as I know, there never has been any doubt that cotton can be grown here. I know that tea and coffee will also grow here, but the main consideration is as to whether we can grow cotton on a commercially profitable ‘basis. To do so, one of two things would be necessary : We should eitherhave to pick the cotton with cheap labour, or have machines for. the purpose. We cannot get the cheap labour, and the Government would be very glad to offer an inducement tostimulate the sluggish inventiveness of honorable members on both sides of the House, and that of citizens generally who are potential members of this Parliament. That, I hope, will be satisfactory to the honorable member.
Allowance Post Offices
asked the Post master-General, upon notice -
– The answers to the honorable member’s questions are as follow: -
asked the Treasurer, upon notice - .
Will he inform the House what the approximate revenue amounts to per annum on alcoholic stimulants and narcotics for the State of Victoria?
– Since the abolition of the book-keeping provisions of the Constitution, State distinctions have disappeared from Treasury accounts.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
– On 23rd September, the honorable member for Newcastle (Mr. Watkins) asked the following questions : -
I promised the information would be obtained. The following replies have been furnished by the Acting Public Service Commissioner : -
– On8th September the honorable member for Dampier (Mr. Gregory) asked the following questions : -
In view of the urgent need by settlers of large supplies of rabbit and dog-proof netting, can the Minister supply the House with information regarding -
What firms are now manufacturing wire netting in Australia?
What is the estimated capacity of output in tons of the plants now operating?
What tonnage has been produced in Australia during the year 1919-20.
If sufficient supplies at a reasonable price cannot be manufactured in Australia to meet present urgent requirements, will the Minister consider the advisability of removing the heavy impost of duty “in the 1920 Tariff Schedule?
I am now in a position to furnish the honorable member with the following information : -
Debate resumed from 22nd September (vide page 4817), on motion by Mr. Wise -
That this Bill be now read a second time.
.- I shall not be long in discussing the proposed increases in postal rates. I admit that when I saw the Budget, and before I heard the statement of the Treasurer and that of the Postmaster-General on this Bill, I imagined that what was proposed was a transfer of the war postage of ½d. per letter or paper to the old rates. I admit that I prefer some of the proposals of this Bill to the “War Postage Tax, which merely added ½d. per letter or paper to the original postage, whatever the amount of it might be. For instance, the ordinary householder sending a letter would pay1d. postage on it, and under the War Postage Tax he was called upon to pay lid. A business house might send letters through the post upon which the postage might be 6d. or1s., and under the War Postage Tax they were required to add only½d. more to the postage previously chargeable on the letter. I understand that what is proposed by this Bill is that a double rate shall be payable on every article posted.
– So that the ordinary business house sending out. a letter on which the postage is now 6d. will, under this Bill, be required to pay postage to the amount of1s. instead of to the amount of 6½d. as under the War Postage Tax. I think that on the whole that is a fairer proposal than was the War Postage Tax.
I have received a circular from booksellers of Melbourne on the subject of this Bill. I suppose that similar circulars have been sent round in the other States.
The booksellers desire to know why the book postage rate should be doubled. They say -
Why double the present rate? Is not a 50 per cent. increase enough? To increase educational facilities is the policy of all civilized countries. Free libraries everywhere are the embodiment of this idea. Free libraries, of course, seriously compete with the booksellers just as free overcoats would reduce the business of tailors.
Booksellers are the only traders who have Government and municipal competition, therefore, booksellers deserve special consideration from the State to help them distribute their wares. We would suggest that booksellers’ catalogues and circulars, if printed in Australia, should go through the post at the rate of one half -penny (½d.) for four (4) ounces. The wide distribution of these catalogues would considerably increase the postal business in books, thus materially benefiting the postal revenue at the same time. People of the “ OutBack” certainly deserve to be treated liberally by the Postal Department in the way of literature; books, magazines, and papers are their’ great connecting links with civilization.
W. Cole’s Book Arcade.
Robertson & Co.
Melville & Mullen Pty. Ltd.
Methodist Book Depot.
Book Lovers Library.
– Those firms have branches in Sydney.
– I believe that they have branches in the other States. In . my opinion, books have a greater educational value than newspapers.
– The Government have not taxed newspapers.
– Yes, the proposal is to increase the postage on newspapers proportionately with the increase on other articles. Still, the newspapers have a great advantage. The postage on newspapers before the War Postage Tax was imposed was1d. for 20 ozs., and the postage now is l½d. for 20 ounces.
– I believe that it does not pay the Post and Telegraph Department to carry newspapers at such a low rate, and many newspapers do not each weigh an ounce. I certainly think’ that in all the circumstances the case put up by the booksellers deserves consideration. They complain that they are in competition with the public libraries, but the public libraries obtain their books from the booksellers, and they do not get them for nothing. Lending libraries are referred to in the booksellers’ circular, and these send books into the country, which have to be returned. I think that a reduction of the postage in such cases is justified in the interests of people in the country who are entitled to some consideration as compared with people in the city who have libraries practically at their back doors. If the Postmaster-General can see his way to meet the booksellers in this regard I hope that he will do so.
I understand that it is impossible for a private member to move for an increase of the rate proposed on newspapers, because that would be imposing taxation.
– The rate should be increased. The newspapers are profiteering, and why should they be allowed to do so when they talk so much about others inthat connexion.
– I agree with the honorable member. He probably refers to thu large proprietary newspapers, but they are not affected by this proposal to the same extent as are small newspapers like that published, for instance, by the Single Tax League. In some cases I believe that as many as forty of these small newspapers are covered by the postage charged on 20 ounces.
– They cost as much to deliver as a letter, and I am anxious to know whether something cannot be done to put them on a fairer basis.
I regret exceedingly that the PostmasterGeneral has seen fit to double the rate. The increased rate for telephone messages is not dealt with in this Bill, but will be provided for by regulation. Some honorable members, so far as the Standing Orders will allow, would’ like to discuss the question of the increase in telephone rates, as well as the increase in the rate for letter telegrams, which are dealt with in this Bill. I personally held, when we introduced the lettergram, and agreed to send forty words for ls., that we were doing something which probably we would have to go back upon.
– Hear, hear!
– The honorable member for Herbert (Mr. Bamford) agreed with ane when I expressed that view. As I pointed out then lettergrams are chiefly used in big cities, giving the people in metropolitan districts an advantage not enjoyed by persons living in other parts. They are greatly used by business houses who keep their ordinary messages back to take advantage of the lettergram system. I think the Postmaster-General is .taking a step in the right direction by making this increase. However, I do not think he is justified in doubling the rate for the conveyance, of letters throughout Australia. I know that our distances are great, but, as a matter of fact, the majority of the letters posted are for delivery within a circumscribed area. I believe that 90 per cent, of the letters posted in Melbourne are for delivery within a radius of 10 miles. If an amendment is moved to decrease the (proposed rate I shall support it. On the other hand, I consider that there should be an increase in the postage rate on newspapers in order to bring it more into line with the rates that people are called upon to pay for other postal matter.
.- - I am pleased to see that the PostmasterGeneral is keeping in touch with the existing Act by allowing matter printed in Australia to be conveyed at a lower rate than is to be charged for books printed outside Australia. I am pleased also at the proposal to revert to 2d. postage. I opposed the reduction eleven years ago, because I considered that by charging 2d. for the conveyance of a letter considerable revenue could be raised in a very reasonable way. I do not know that the large daily newspapers will derive any great benefit from the magnanimous rates the PostmasterGeneral proposes for the conveyance of newspapers, but as large numbers of their subscribers who are not living close to railway stations are obliged to obtain their papers through the post-office, I presume that they will participate in this concession. There is a good deal of prating in the press about the voting of money by this Parliament, but I notice that the leading journals can form a very solid combine when they seek to impose fresh advertising rates on the public. In the Melbourne daily newspapers at the present time there are almost identical advertisements, increasing the advertising rates. I wonder if the proprietors of these papers consulted their clients by means of a referendum before imposing these extra charges, or whether they came under review by any price- fixing tribunal. At any rate, if it were possible to stop the “stinking fish” policy adopted by one section of the Australian press in respect to Australian interests, good service would be rendered to Australia.
.- The proprietor of a lending library has drawn attention to the fact that the postage on printed books is now to be doubled, to the great disadvantage of many people who live in country districts, and receive books through the post from lending libraries. Hitherto the postage rate upon a book sent out from one of these libraries has been 2id. The rate will now be 5d., but inasmuch as the same amount of (postage has to be paid on the return of the book, the total cost of sending out a book to the subscriber to a library and returning it will in future be lOd. instead of 5d. When goods are sent out by railway, they are often returned free, and it seems to me that a similar concession anight be made in regard . to books posted by lending libraries to country district subscribers.
– I am very pleased that the Government propose to revert to 2d. postage. Some people may call it a retrograde step, but I hold that those who get a service should pay for it. When Mr. “ Henniker Heaton “ Chapman was Postmaster-General, he always tried to surround Id. postage with a certain amount of sentiment, but there is no room for sentiment in business matters. The posting of a letter is a business transaction. The letter is intended to convey information for a certain purpose. However, now that we are to have 2d. postage, I hope that greater facilities will be provided in country districts through the extra revenue derived by the Department.
– There is an extra £1,500,000 on the Estimates for the Post Office,
– I hope that with this money there will be no need for the ever-recurring demand from honorable members representing country electorates for the increase of country postal services. There ought to be money enough to provide those facilities, and, although I am a respresentative of a .city constituency, I shall do all I can to assist country members in seeing that the additional revenue derived from 2d. postage is spent on providing postal, telegraphic, and telephonic facilities in country districts. One has only to; spend a holiday in an isolated country part to realize the disadvantages of the absence of (means of communication, both postal and telephonic. In fact, they are so limited that one wonders how it is after all these years we have not become more civilized.
– It is a wonder that any one lives in a country district.
– Exactly. In 1911, when Mr. Josiah Thomas, the then PostmasterGeneral, brought in a Bill to reduce the postage rate on letters to Id., I was daring enough bo move to’ maintain the rate at 2d., because I held that no rate should be imposed which might lead to a loss. At that time, the Post Office was run at an annual loss of £400,000 or £500,000, and I could not consent to a policy which meant a continuation of that loss to the advantage of big commercial houses. To-day I do not think the Government have gone far enough. There is a great deal more sentiment surrounding cheap literature. My experience is that most of the cheap literature sent through the post is not educational, but merely for amusement. I can find no educational value in the sending of cheap prints which are not really newspapers, but are principally advertising media. Coming from Sydney, members of Parliament, like everybody else, rush to get the Age and Argus in order to see the news. The moment they read the Sydney news, they say, “That is not the truth, anyhow,” and they know that, because they have just left Sydney. Yet they will take all the Melbourne news in those papers as gospel until they reach Melbourne, and find that it is not the truth either. If the newspapers gave the truth it might be news, but they do not do so. They only tickle the palate of some people to get their paper in as an advertising medium for some city warehouse or boot shop. The newspaper proprietors ought to pay proper rates of postage. I have always been against the running of cheap trains to send the Melbourne dailies into the country. One reason is that it is done for business, and the State has no right to lose money on it. So far as postage is concerned, the papers should pay- full’ rates. That policy would have many benefits, one of which, is that it would save lies getting into the country. I remember that the Age newspaper, during the great railway strike in Victoria, would print one edition for the country, telling the men in the country that the men in the railways here were going back and scabbing, and another edition for Melbourne stating that the men in the country were scabbing. They used their paper for that purpose, yet the statements were not true. Another good effect of the change I suggest would be to give the country newspapers a chance, and encourage journalism in the country generally, instead of it being crippled through the ability of the Melbourne dailies to reach the country towns with a lot more news and a lot more lies. The printing of country newspapers ought to be helped rather than discouraged.I have always expected some Government to be game enough to take in hand the task of charging adequate rates to newspapers for their transmission by post. Until the Postmaster-General or the Treasurer comes up to the scratch on that question, he will not be doing justice to the country. There is no reason why newspapers, more than any other commodity, should be carried at a loss. I am sorry the Postmaster-General or the Government have not seen fit to make them pay their just dues for their transmission by post, as is the case with other commodities.
.- I have often argued that the Post, Telegraph, and Telephone Department could be made a very useful factor in helping the settlement of the back country. I think the request made to members by the various bookselling firms in Melbourne should be given heed to. They are not asking for very much. The amount of revenue that would be lost is not much, if any. In fact, there is a good chance of the revenue being improved, because if their request to be allowed to send circulars and catalogues through the post at the rate of½d. per 4 ozs. is granted, the possibility is that the volume of books and magazines carried by the Department will increase. The least we can do for the people who live out of the cities is to grant the concession. A great many of them read magazines and similar literature, and this habit ought to be encouraged, because it improves their information and widens their literary taste. To grant the request would at least have a considerable indirect advantage, and involve no direct loss.
– My experience is that those who can afford magazines and subscribe to libraries can well pay the increase.
– Yes, but that is not what is really asked for in this case.
– The firms are merely asking for cheap advertising.
– What is wrong with it, if it increases the revenue of the Department from the traffic in books and magazines through the post? It is a fair request on behalf of the people who live out of the city radius, and also on behalf of the booksellers themselves, who are already subjected to a lot of competition. A free libraryis not a benefit to the booksellers, but they have to put up with it. Every reading room endowed by a municipality is more or less in competition with the local booksellers. I hope the Postmaster-General will see his way to amend the schedule in the direction which the booksellers ask for.
.- I have listened with great interest to the criticisms offered by honorable members, and am surprised to find that they take more interest in the welfare of the rich publisher than in that of the poor selector and others in the back-blocks, who will have to pay the twopenny postage. I am opposed to an increase in the postage rate on the broad ground that it will not produce more revenue. The history of the world shows that the penny postage is a better revenue producer than the twopenny postage, in normal times. The aim of the world is to obtain uniform postage rates. That is the real objective of the International Postal Union, which discussed the matter from all viewpoints. It has been proven not only in theory, but in actual practice, that penny postage yields more revenue than twopenny postage, not alone in Britishspeaking countries, but all over the world. For that reasonI am not disposed to vote for twopenny postage unless it can be shown to me that it is going to do some good. I deny that it will bring in more revenue. If the history of the world shows, as it does, that penny postage is the best revenue producer, why put this further impost on the people? After all, those who suffer most will be the people in isolated districts, far from the centres of civilization, who do not enjoy many of the privileges which we in the cities have. A man with a family of three or four halfgrown children who want to write letters will find that this increase is a heavy tax on him, because it practically doubles his postage rates.
– Probably the letter rate pays. If there is any rate that does not pay, it is the newspaper rate.
– If the newspaper rate does not pay, why does not the Postmaster-General bring in a proposal to make it pay ? Why make the unfortunate selector and other small toilers in the country districts, debarred as they are from many of the privileges which we enjoy, pay for the concessions given to the rich newspaper proprietors? If, as the Leader of the Opposition says, the newspaper rate does not pay, and the others do, the Postmaster-General should have brought down a very different proposal from that contained in the schedule. The people in the country are not only being penalized, but, at the same time, their privileges are being cut away. I am not accusing the present Minister (Mr. Wise) of doing that, because I believe he has made a proposal to give some increase in the conveniences in country districts. Why tax those people’ to pay for the extra privileges which we receive in the city ?
– What about putting up the rate on Hansard?
– I shall read Hansard with very great pleasure this week, because it will contain the record of charges which the honorable member made in this Chamber. I propose to call upon him to prove them. I understand that he said that the vote of £150,000 for Canberra was brought in by the Government to bribe me. I shall call upon the honorable member to prove his statement, because no member has a right to come into this chamber and deliberately make assertions that are not true. Even when they are made at the dictation of the Age I cannot excuse him. Immediately one says a word in furtherance of the interest of the people outback, some honorable members, who represent metropolitan and suburban constituencies, regard it as a good joke, but they would take a different view if they lived in the back-blocks, 30 or 40 miles from the comforts and conveniences of civilization, with one mail a week. Even those who live in the cities, and have two or three deliveries a day, with a public telephone at every corner, sometimes grumble, but their grounds of complaint are nothing when compared with these of the people in the country districts, with their scanty mail service and no telephone without a guarantee of revenue. This Bill appears to me to be on a wrong basis; it is introduced for the purpose of obtaining extra revenue, but it is very much to be doubted whether that will be the result. Last year there was a surplus of £500,000 as a result of postal taxation, and it would be interesting to know where that money has. been expended. Can any country representative say that the postal facilities have been extended in his electorate? As a matter of fact, the reverse is the case, because the privileges hitherto enjoyed are being cut down. Those in charge of little allowance post-offices, who are paid £2 or £3 per year, are now receiving notices that, owing to the small revenue derived from those offices, . their magnificent remuneration is to be reduced by 10s. I protest against the proposal to increase the postal rates, because, as I have already said, all postal authorities are agreed that the cheaper rate results in the larger revenue.
– The present Postmaster-General has given us a better “ deal “ than any of his predecessors.
– I am not saying a word against the present Postmaster-General, who, we know, is much hampered in his efforts by the lack of material. In any case, there is no reason why the people outback should be penalized, while all improvements are reserved for the benefit of the residents of the cities. The present PostmasterGeneral will probably have to be two or three years in office before he can change the parsimonious policy that has prevailed in the Department for the last four or five years. Of course, we have been living under war conditions, which excuse anything and everything. It was quite right to raise money for the one supreme purpose of carrying on the war, but, nevertheless, we should insist that further consideration should be given to those who are so badly served postally in the country districts. We do not ask for many extra country mails, but more consideration should be given to the country people, who live under very trying circumstances. There are postal inspectors all over the country, but can any country representative say that an improvement in the services has ever been made at the suggestion of one of these gentlemen or any official of the Department? I do not know of one instance throughout my own extensive constituency; and my belief is that not 5 per cent, of the improvements in the last ten years have been made as the result of any action on the part of the representatives of the Department. It should be an inspector’s business to see where improvements can be made, and to make them; and, after all, the Post Office is cot what one might call a financial concern, but must be regarded as a great educator and civilizer, one of the objects of which is to bring the people closer together. I recommend the PostmasterGeneral to alter the present policy. I know that the honorable gentleman has already made efforts in that direction, and we ought to -encourage him to make more. I take it that this Bill is only a temporary measure, for it cannot be supposed for a moment that Australia is going to fall back in the march of progress, though latterly that would appear to have been the case. If the Department cannot provide wires for telephone extension, why not try a wireless system? Of course, we all know that any new suggestion of that kind is always “ poohpoohed,” ‘ just as was wireless telegraphy when first mooted in Australia. We in the cities have picture shows, theatres, trams, trains, and every comfort and convenience; but the people in the country are very differently circumstanced. With them, the arrival of the mail is an event, and it is eagerly met by men from all over the country - the very men who keep the professional men in the cities going. If a tidal wave swamped Melbourne to-morrow, it would not affect, the fertile country districts of Australia; but if these fertile districts were swamped, Melbourne would be nowhere. The present Postmaster-General has certainly tried’ to liberalize the terms on which our country mails are carried; but I do not suppose that 50 per cent, of the contractors are carrying out their contracts without a loss, owing to the increased price of fodder, and so forth. I should warmly support the proposals in this Bill, as a means of taxation, if they would result in more revenue; but that, I feel sure, would not be the case. For a month or two, more revenue may result, but the experience of the world is that the lower rate is more effective. Probably, these remarks apply,’ also, to the’ charges for telegrams, for the cost is the same whether a message be sent .10 or 100 miles. As I said before, the Bill, in my opinion, is on a wrong basis, and I hope that the Government will accept some improvingamendments in Committee.
– For much the same reasons as those advanced by the honorable member for Eden. Monaro (Mr. Austin Chapman), I do not feel inclined to support the proposed increased charges on letters and telegrams. If the increases would result in more revenue, and that revenue were used to give better facilities in country districts, and to increase the remuneration of the keepers of allowance post-offices, they would be supported by the majority of honorable members. We have asked repeatedly for extended postal facilities in country districts, and we would be very ungenerous if we did not give the present PostmasterGeneral all the credit due to him for the improvements that have already been made at his instance during the short time he has been in office. ‘ I am of opinion, however, that it is not necessary to increase the postal rates in order to effect the desired improvement to our country postal and telegraph services. By still further cutting down the facilities enjoyed by city residents, and by due economy in the many branches of the PostmasterGeneral’s Department, we can make such a saving as will render the proposed increases entirely unnecessary. It -cannot be denied that though the Economies Commission very severely criticised the administration of the Postal Department, and suggested where economies might be made to the amount of many thousands of pounds annually, the only recommendation of that body to which it is proposed to give effect is that increasing the salaries of the higher paid officials. I avail myself of this opportunity to bring under the notice of the PostmasterGeneral one of the improvements which may well be adopted in our country districts - an improvement which is desirable both in the interests of rural resi- dents and of the departmental revenue - the keeping open of our post and telegraph offices till 8 p.m. This demand is being made in the country districts throughout Australia.
– Order ! The honorable member is getting away from the subject-matter of the Bill.
– I hope that it is permissible for me to mention the fact, because the adoption of the course which I have suggested, would result in such an increased revenue as would obviate the necessity for increasing postal rates in country districts. Our farmers are usually busy till late in the evening, and it is very seldom that one of them can be communicated with over the telephone till 6 p.m. If the post-offices in country centres were kept open until 8 o’clock each evening I am confident that the business transacted by them would be almost doubled. This matter is one which is worthy of seriousconsideration at the hands of the Postmaster-General. I agree very largely with the remarks of the honorable member for Eden-Monaro (Mr. Chapman) in regard to postal administration, but he will not indorse my view that whilst the Government can find money to squander upon building the Federal Capital we should not support any increase in taxation.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 to 4 agreed to.
Clause 5 -
Part I. of the First Schedule to the principal Act is omitted, and the following Part inserted in its stead: - “Part I. - Newspapers.
– Iexceedingly regret that the PostmasterGeneral is suffering from such a sore throat that it seems almost inconsiderate to ask him to explain the meaning of this clause. Did I understand him to say that, before the war postage rates were imposed, the postage upon newspapers was only½d. per 20 oz. ?
– No, it was1d.
– Then the extra amount which it is proposed to levy will not fall upon newspapers ?
– That is so.
– In my opinion, the newspapers should pay as much by way of extra postage as should any person in the community. I should like to know why they are to be specially favoured under this clause? If a private individual posts a newspaper to a friend, he will be required to pay1d. postage upon every 10 ozs., or part thereof, whereas the newspaper proprietors will be permitted to post up to 20 ozs. for l½d. What is the reason for this differentiation ?
.- I would point out to the Leader of the Opposition (Mr. Tudor) that the proprietors of newspapers may post newspapers at the rate mentioned by him only to bond fide subscribers, or to news vendors, whereas private individuals who pay the ordinary rate can send newspapers to whom they may think fit.
.- There is a wonderful difference between the postal rates charged upon newspapers to-day and the rate which was operative twenty years ago. At that time, the smallest newspaper proprietor was obliged to pay½d. postage upon eachnewspaper forwarded through the post. Now the rate is only 1½ d. for 20 ozs. Of course, this rate will not touch the proprietors of the great dailies, because ‘they are in a position to increase the prices of their papers, and also of their advertisements.
– And country newspapers cannot do that.
– If they did, they would lose the majority of their subscribers. I had a number of years’ experience of the struggles of a country newspaper man, and I know that those struggles have been greatly intensified during recent times. The big daily newspapers of Australia enjoy a splendid bonus at the hands of the Post Office.
– There is no doubt about that.
– They are amongst the wealthiest enterprises in the community, and are in a position to pay taxation more easily than is almost any other class. I should like to see them contribute a little more to the revenue of the country, and would therefore welcome an addition to the newspaper postal rates, but for the fact that the increased burden would fall very heavily upon the country newspaper proprietors.
Clause agreed to.
Clause 6 (Part II., postal articles) -
.- I am opposed to this clause. The Postal Department should not be operated as a revenueproducing concern. The aim and object of the Department should be to place postal facilities within the reach of every one. Twopence per letter may be only a small charge, but I consider that instead of the rate being increased it should be reduced from1½d. to1d. The odd halfpenny was a war tax, and was not paid into postal revenue. That being so, the Government are now proposing to increase the postage rate by 100 per .cent. I believe this impost will press heavily upon the people, and I therefore shall vote against the clause.
Clause agreed to.
Clauses 7 to 10 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Standing Orders suspended, and Bill read a third time.
The following paper was presented: -
Inscribed Stock Act - Dealings and transactions during year ended 30th June, 1919.
In Committee of Ways and Means:
– I move -
That in lieu of the rates of tax imposed by the Entertainments Tax Act 1916-1919 upon payments for admission to entertainments there be imposed upon such payments as from a date to be fixed by proclamation a tax at the following rates, namely: -
.- The Treasurer informed me that he desired to get this Bill passed in order that the reduced tax may operate from the beginning of October. The Bill modifies an impost which my party is anxious to repeal entirely. I said during the last general election that if the Labour party were returned to power the entertainments tax would be repealed.
– The honorable member always does outbid us.
– The Minister for Home and Territories (Mr. Poynton), as an ex-Treasurer, knows that I was always opposed to the entertainments tax. I am willing to accept any amendment which will lighten the burden on the people, but I desire that the Treasurer shall go further. He has proposed that all charges under 3s. for admission to cinematograph and theatrical entertainments and concerts shall be exempt, but that on the first 3s. a tax of 3d. shall be collected, and an additional halfpenny for every 6d. or part of 6d., by which the payment exceeds 3s. But in regard to all other entertainments he proposes to commence the tax on an admission charge of 6d. That means that persons attend-: ing football or cricket matches or race meetings will be taxed on a sixpenny charge for admission.
– They can afford that. We must get a little revenue.
– I know the Treasurer desires to get revenue. .
– Well, let us get the Bill passed.
– I never knew a Minister more keen on getting a Bill through, and I never knew a member in Opposition more opposed to the Government getting their business done than was the right honorable gentleman when he sat on this side. I hope that when he is again sitting in Opposition he will be a much better tempered man than he was when he occupied the position that I now fill. I move - .
That after the word “ concerts “ in paragraph a the words “ and all other entertainments “ be added.
The effect of that amendment is that there shall be a uniform tax on all entertainments, whether picture shows, theatrical entertainments, football matches, or boxing matches. I am anxious that the theatrical companies should be. treated as provided for in the Bill.
– But while they are to be exempted, a dance held in the country once a week will come under the provisions of the Act. Why not make them all pay ?
– No. I am anxious to exempt them all. The Treasurer (Sir Joseph Cook) still has a well, in the shape of the income tax, into which he can dip for more revenue.
– Yes. In his Budget statement the Treasurer showed that we are the most lightly taxed ptople in the world. However, I will have another opportunity of discussing this matter on the Budget, and will deal with it then.
– It is only fair to point; out to the honorable member that if he wishes to move an amendment he should do so now, and not to the schedule of the Bill.
– But this is a proposal to exempt taxation. We could do it in the Bill, surely.
– If an amendment is to be moved this is the time to do so.
.- I am very glad to have your ruling, Mr. Chairman. I cannot understand the attitude of the Treasurer. If entertainments are to be taxed at all, they should all be treated alike, because what may be an amusement to one person may not be an amusement to another. For instance, the person who attends a football match as an amusement of that kind might not care to go to the picture show.
– Tax the lot.
– Yes; but the Treasurer proposes to exempt some forms of entertainment.
– Then he should not do it.
– Does the honorable member for East Sydney (Mr. West) want to increase taxation? His argument would lead one to believe he does.
– No, I do not. The Committee has to decide whether, in the matter of taxation under this Bill, preference is to be given to picture shows over other forms of amusement. I do notknow why they should enjoy this privilege. Surely it cannot be on tie ground of their educational value, because, so far as my knowledge goes, some pictures are far from being educational. I believe that a great deal of trouble arising from the use of firearms in Australia may be traced to excitement created by certain types of picture shows. The amount involved in the amendment is not very great, and, besides, the Treasurer . has other means of obtaining revenue. At present the great bulk of taxation is borne by the industrial section of the community. Customs and Excise duties fall chiefly upon the poorer sections of the people. They pay double the amount paid by the wealthier classes. I should like to see the Treasurer draw a little more upon certain reserves of taxation. If he cannot get what he wants by way of the war-time profits tax, then he ought to be able to do it by means of the income tax, and, if necessary, make the impost retrospective in regard to some of these companies that have doubled their capital out of profits.
– I have an income tax measure to introduce after this is disposed of.
– But I suppose the Treasurer will not double the amount if I ask him to do so. The proposal made by the Leader of the Opposition (Mr. Tudor) is only intended to secure justice to all forms of entertainment. If the tax is to be maintained on entertainments at all, it would be far better to leave it standing as at present than to exempt picture shows, theatrical entertainments, and concerts; as proposed. I do not know if pressure has been brought to .bear upon the Treasurer by the picture theatre managers, and if he fears their influence because of their opportunities to crititise him ‘by means of their picture films, but I feel that he would be doing a statesmanlike act if he refused to differentiate between one form of amusement and another. I remind him of the opposition when the proposal to tax the children was under discussion.
– And this is a proposal to take the tax off the children.
– But why not be fair to all sections of the community? There is no harm in a football match. I would rather attend a football game played by the youths of my district than waste my time at most other forms of entertainment. The English cricketers will be out here soon. If we go to see international cricket we shall have to pay a tax, whereas if we were to waste our time over pictures, inside a crowded building, instead of making the most of the open air, we would not be taxed for our entertainment. I hope the Government will accept the amendment.
.- I understand that theatrical entertainments and concerts are to be placed in the same position, with respect to the proposed tax, as picture shows. I am glad to learn, as regards first-class theatrical entertainments and concerts, that the relief is to be granted on the lowest priced tickets. My experience of theatrical shows in Australia is that they are among the best and cheapest in the world. Upon every occasion of my re: turn from travel abroad I ‘have been surprised afresh at the reasonableness of the prices charged as well as by the high standard of the talent displayed. We should do all that may be reasonably expected to encourage those people who spend large sums upon the salaries of highly talented artists, in order that Australian audiences may be provided with a splendid type of entertainment.
– I had intended to appeal to the Treasurer to grant exemption in respect of one particular class of public entertainers, but I understand that the amendment of the honorable member for Yarra (Mr. Tudor) will cover my purpose. I refer to country bands, and I do not know that I would press for exemption for bands in country parts alone; I would like to see exemption granted in regard to all bands. These organizations do excellent work for charitable purposes; but their general financial state, so far as my experience of country bands goes, is always more or less precarious. They are almost always “up against it,” and, in order to- keep going, they are frequently forced to organize entertainments and the like.
– In the matter of their concerts, these bands will be exempt.
– But if they choose the form of a social in order to raise money, they will have to pay your tax.
– That is, if the tickets are over 3s.
– Am I to understand that if bands endeavour to raise money by means of concerts they will go scot free, whereas if they prefer socials and .dances - as being more- attractive to a larger circle of the public - they will have to pay the tax’!
– It all depends upon the form of entertainment.
– Why not exempt them altogether, seeing that they are of very great assistance ro charitable institutions, such as hospitals, throughout Australia?
– I cannot agree to that.
– I am sorry. The bands do excellent work, as I have already indicated. Charitable entertainments all over the country are constantly, and consistently, benefiting by their public performances.
– Bands will notbe required to pay taxes when giving charitable performances.
– I am asking that they be exempted in respect of any form of entertainment which the bands themselves may organize for their own financial benefit. It appears to me, from the interjections of the Treasurer, that if a band calls a social and dance a concert, it will not be required to pay tax. However, this is not a matter on which we should split straws. I have been present on Hospital Sundays in various parts of the countryfor years past, and have noted that bands have always been the chief attraction; and their services have always been given without fee.
– There is no tax on anything of that kind.
– I understand the position, but we should assist and foster these organizations rather than handicap them by the imposition of any form of taxation.
– I cannot understand why the Government propose to differentiate between various forms of entertainment. If I read the schedule aright, it is proposed to exempt tickets, up to 3s., in the matter of cinematograph shows, theatre performances, concerts, &c., while the lowest priced tickets to sporting and athletic attractions, such as football, cricket, and swimming matches, are to be taxed. What is the motive of the Government in taxing a 6d. ticket issued in connexion with a cricket match, and in releasing from taxation a similarly priced ticket to apicture show ? I admit, of course, that what may be regarded as entertainment by one individual would probably be boredom to another. There does not appear to be any reason why the tax should not be similar on all classes of entertainments. We should not endeavour to discourage outdoor amusements, and confer a benefit on the many thousands who nightly patronize picture shows. If there is to be any differentiation, it should be in the interests of those who patronize outdoor amusements, which are more healthy and certainly better for the individual. I do not think there should be any proposal to exempt or reduce amusement taxes in any direction, particularly when we are in such dire distress for revenue.
– Were we not promised that this was to be a war-time tax only?
– I do not know anything about a promise; and if one was made, I am not responsible. Even if a promise has been made, I cannot see any reason why we should exempt or reduce the tax on certain forms of amusement, and continue it on others. It does not appear to me to be just. I cannot support the amendment of the honorable member for Yarra . (Mr. Tudor) ; and I shall be compelled, unless there is some further explanation from the Minister, to oppose the whole proposal.
– From the outset this form of taxation has been most unfair. I was exceedingly sorry to hear the honorable member for Grampians (Mr. Jowett) say that he was in favour of it. ‘ The honorable member is a representative of the Country party, the members of which are supposed to protect the interests of the country people; but he is apparently still a member of the old “ boodle “ party, which is alwaye anxious to take the tax off the wealthy and place it on to the shoulders of the poor. When an attempt is being made to benefit those in the country districts, one would have thought that every member of the Country party would have supported the proposal. Many honorable members know that what are known as Saturday night socials, the expenses of which are covered by a small charge for admission, are the only entertainments that many country people can attend.
– They cannot be held until a permit is received, and special stamped tickets are supplied.
– They cannot. Under this proposal, those living in the populous centres are to receive every consideration, while those who are frequently referred to by honorable members on the corner benches as the backbone of the country are to . be penalized. Are the members of the Country party going to sit idly by and allow the confidence trick to be played on them in this way? There are very few “ shows “ in. the country for which a charge of 3s. is made, with the exception, perhaps, of a few in the backblocks of Queensland.
– There has been a tax on country - picture show tickets, but that has now been abolished.
– If such is the case, the charges for admission must be different in South Australia from what they are in Queensland. A few weeks ago arrangements had been made to hold a euchre party in a certain district in Queensland, and the necessary permit, which was in the hands of a gentleman who lived 14 miles away, had been received from the Commissioner’s office in Brisbane. Owing to a heavy fall of rain, the person holding the permit was unable to attend, and the owner of the hall would not allow the promoters to open it.
– -If he did, he would have been liable to a fine of £50.
– If we do not support the interests of our constituents, who will ? It seems that this and every other Government, since the inception of Federation, have always been prepared to favour those in the populous centres, to the detriment of those in the country districts. If there are to be any exemptions, the weekly socials, held in country districts, to which I have referred, should not be overlooked,
– T am strongly opposed to the proposal, firstly, because we cannot afford the great loss of revenue that will result from the removal of this tax; and, secondly, because we are levying a tax on some entertainments where the charge of admission is 6d. or over, and abolishing it on others where the charge is up to 3s. The tax should be imposed on those who are conducting entertainments for profit. The honorable member for Maranoa (Mr. James Page) has referred to an instance which has come under his notice, and I could also quote others to which my attention has been directed. In many instances applications for permits are received from persons 200, 300, or 400 miles from the city. An instance came under my notice where the members of a fire brigade were anxious to hold a ball, but the difficulty was to get a permit. The owner of the hall would not allow the building to be opened unless a permit had been obtained, and many living a distance away were .considerably inconvenienced. . I- have been informed by the honorable member for Wakefield (Mr.
Richard Foster) that a procedure which is not permitted in my State is permitted in his.
– I do not think he is right.
– When last visiting a portion of my constituency, I was informed that a clergyman was advised that he had committed a breach of the Act because he conducted a church social without the necessary permit from the Department. 1 think that a tax should be continued on racing, football, and cricket, because the people who attend such amusements should be prepared to pay taxation. The tax should also apply to all who conduct cinematograph shows or other entertainments conducted as a business, but it ought not to apply to entertainments arranged for charitable purposes. A gentleman who had been instrumental in raising over £20,000 for the charities of Western Australia by means of concerts and other entertainments some time ago failed to observe a regulation of the Department in connexion with a concert that he held in one of the suburbs of Perth, with the result that he was brought before the Court and heavily fined. Representations were made to the Deputy Commissioner of Taxation, who recommended a reduction of the fine to £5 for each offence. There was no suggestion that this man had been guilty of misrepresentation or had attempted to defraud the Department, but he was heavily fined. .
I hope that the Treasurer will withdraw the Bill. Our taxation in the future will be exceedingly heavy. I fully realize the demands that will be made upon the Commonwealth by the timethat we have made arrangements te> honour all our promises and have pro>vided for those who’ were maimed or blinded during the war. Much still remains to be done. Heavy bills will have to be met, and I know of no better way of providing for such liabilities than by imposing a heavy tax upon luxuries and a tax on entertainments, race meetings., and sports gatherings generally. The tax should, of course, be proportionate to the charges for admission. Such taxation would tend, in some degree, to induce the people to economize; it is the duty of the Government to not only practise, but to enforce, economy, and I would support a heavy tax on expensive luxuries-. I know no reason why those who indulge in luxuries of this kind should not be compelled to make at least some small contribution to the. revenue. I repeat that entertainments for social, charitable, and religious objects should be exempt.
– They are.
– I can only say that on the occasion of my last visit to Kellerberrin I was told that the Reverend Father Fahey, whose name figured conspicuously in the details of the Gallipoli campaign, had been notified that he was to be prosecuted for a breach of the Act in connexion with a church social. The fire brigade in the same town had intended about the same time to hold a dance, but as the necessary permission had not arrived from the Taxation Department, the promoters were compelled to hold it in the fire station instead of the public hall, and to make a collection at the door instead of a charge for admission. I think that the Deputy Commissioner of Taxation in Western Australia is standing hard and fast by his regulations.
– Churches, charities, and philanthropies generally are exempt.
– I have merely instanced these as cases which were brought under my notice.
I hope that the Treasurer will give further consideration to this matter. He is thoroughly familar with the enormous demands that are being made upon the Treasury at the present time. He knows also that very large expenditures will have to be incurred in connexion with soldier settlements, War Service Homes, and repatriation generally, while we still have large payments to make to the Old Country. All this will mean heavy taxation. I regret that this proposal has been brought in, and I hope that the Treasurer will give the whole matter further consideration.
– I am not surprised that the Treasurer (Sir Joseph Cook) has been urged to withdraw this Bill. It certainly should be withdrawn. I fail to understand why the Government have introduced a measure exempting from the entertainments tax all tickets under three shillings each for cinematograph shows and theatrical entertainments. If there is a flourishing business in Australia today it is that of the picture shows.
– Picture show businessesare like Trusts - they are a good thing if you are in them.
– Exactly. Here wehave a proposal to exempt a form of business that is flourishing above all others in Australia. Since the passing of the entertainments taxtheatrical managers have not only compelled their patrons to pay the tax, but have greatly increased their charges for admission. I should be delighted if the Bill were withdrawn.
– I wish that my honorable friends in the corner, in that spirit of righteousness with which they urge matters from time to time would not tempt the Treasurer in this way.
– Our suggestion ought to be tempting.
– It is really a temptation. The position is that at the recent general election both Ministerial and Opposition candidates promised the electors-
– The Labour party promised that if returned they would repeal the whole tax. The Treasurer will admit that long before the elections I held the view that the tax should be removed,.
– I know that, and I was about to observe that similar promises were made by National candidates. By means of this Bill I am really salvaging a little out of the wreck and ruin of the tax which was agreed to by both sides of the House. My honorable friends, instead of asking me to withdraw the Bill, ought to compliment me on my action. I am trying to save a little of the revenue derived from this tax.
– The Government are throwing away one-half of the revenue that has been derived from the tax.
– I am preserving by this Bill more than one-half. Honorable members should commend me for trying to save as much as . I can out of a tax which has already been sacrificed by both sides of the House.
.- I agree with the, view that it is a mistake to remove this tax. There are two outstanding reasons why it should be continued. AsI see the position, the enormous revenue charges with which we are faced absolutely preclude the removal of any taxation unless it is so hopelessly unjust that it would be an iniquity to allow it to remain. It is difficult at this stage to make the point that is in one’s mind as to the whole question of taxation. We have not had an opportunity to consider our (present or future position with regard to our revenue as opposed to our obligations; but when we do we shall have to approach the whole matter in a very serious spirit. I think we shall be a little startled when we realize what we shall be faced with in the next financial year as distinguished from the year for which we have already made some attempt to provide.
Another factor which it appears tome must be considered very seriously is that we have no hope of making our way through our present financial troubles unless every member of the community, from the highest to the lowest, realizes how essential it is to economize. I unhesitatingly admit that this tax is most keenly felt by all classes, and particularly by those whose incomes are small. It is the very tax, however, that we should be careful not to remove, since by doing so we shall pull down one of the fingerposts pointing to the road of economy, which is certainly the only road that we can safely travel in the future. I have a lot of sympathy for those with small incomes who have to pay this tax. The cinematograph show, in particular, has brought brightness into the lives of many such people in this and other parts of the world. It is, therefore, to me a matter for deep regret that it should be necessary to impose such a tax, or to do anything which might conceivably curtail the opportunities afforded people with small incomes to bring a little brightness into their lives. But we are faced with the hard facts of life as it is after the war, and it seems to me that if we are even to pretend to lead this country, it is necessary for us to drive home to the people the lesson that they have to be taught.
One other aspect of this question which ought also to be emphasized is that, while with one hand we are givingup certain revenue which has come to the Government by way of the entertainments tax, we are replacing it by further taxation upon the postal facilities of this country. That cuts the ground from under the argument that the poor people of our cities, while this tax remains, are deprived of the facilities that were offered them before its imposition to visit a picture show. Even if they are slightly penalized, the unfortunate residents of country districts who have no cinematograph shows which but for this tax they might attend, are to be penalized by being called upon to pay extra postal taxation so that city residents may have restored to them the extra facilities for attending places of amusement which they enjoyed before the war.
Question - That the words proposed to be added be so added (Mr. Tutor’s amendment) - put. The Committee divided.
Majority … …. 17
Question so resolved in the negative.
.- There is no logical reason for the remission of a tax on picture shows if it is to be imposed on cricket matches and other forms of recreation and amusement, but I sympathize with the Treasurer, nevertheless, because at the last election both parties went to the country promising this exemption. I see as clearly as does any other honorable member, and have seen for years, the tremendous difficulties confronting us in making both ends meet owing to the debt with which Australia is saddled, and I recognise the necessity of inducing every member of the community to practise economy; but as this promise was made to the country by the Government, we cannot blame them for adhering to it, and, in the circumstances, I shall vote with the Treasurer on this schedule.
– I listened with attention - to the honorable member for Wilmot (Mr. Atkinson), but I do not agree with what he has said as to a promise made to the electors.
– The honorable member stood on it.
– I stood on nothing promised by any political party. I do not think that I have even read the Prime Minister’s policy speech. That, however, is beside the question at the present time. I stood as a Nationalist, because the Nationalist platform was the one with which I agreed most closely. So far as any promise with regard to the remission of this tax is concerned, I know nothing of it, and am not bound by it. Further, if the Government were pledged to the remission of the entertainments tax, they are not pledged to its remission in part, as applied to special entertainments such as cinematograph shows, theatre performances, and concerts, and to retain it as applied to other forms of recreation and amusement. I can see no justification for what is now proposed, and I shall be surprised to hear the Treasurer (Sir Joseph Cook) claim that the Government are adhering to the letter to the promise which has been referred to. I shall be very sorry if the Government press this schedule to a vote, as I feel sure that a majority of honorable members realize that a mistake is being made. We should endeavour to be as consistent as possible, and if we wish to be consistent and fair, we cannot justify this proposal. I hope that the Treasurer will look at the matter from this point of view. I do not see how honorable members representing country districts can possibly vote for this schedule. People in the districts they represent have very few opportunities of enjoying such forms of amusement as are proposed to be exempted from taxation under this schedule. Apart from any question of town or country, a member of the community who likes to attend a football match on a Saturday should not, in the matter of taxation, be treated differently from another who prefers to spend a few shillings at a picture show during the week. This proposal is quite inconsistent, and I am opposed to it.
– I see a very clear distinction between these different forms of amusement. The honorable member for Darwin (Mr. Bell) says that he knows nothing about the promises made at the time of the elections, but there can be no doubt that such promises were made.
– Hear, hear !
– The Leader of the Opposition (Mr. Tudor) promised to sweep away the whole of this taxation. Members of the Government, including the Prime Minister (Mr. Hughes), promised that this tax should go. I, however, have not been in favour of the remission of the whole of it. I like to honour any promises made at election time as far as possible, but it seemed to me that there was an opportunity afforded me to step in and save some of this taxation for revenue purposes. A distinguishing line can be drawn, and it is that which is drawn in the Bill between those forms of amusement which are educational and those which are not. It is of no use for honorable members to say that picture shows are not educational.
– They are often educational in the wrong direction.
– I am afraid that there are objectionable features attached to nearly everything in life. I suggest that the ordinary “ gazettes “ at the picture show are highly educational and instructive. I often think when I go to a picture show that the “gazettes” alone are worth more than is charged for the whole entertainment. The last time I visited a picture show, I saw a picture of a telephone dissected, and the exhibition was of a really instructive and educational kind. Then, again, take- such operas as are now being produced in this city, and no honorable member will claim that the cultivation of musical taste of that kind is not differentiated from mere amusement. If we take the Shakespearian season which this city is fortunate enough to be enjoying just now, will honorable members say that it is not educational? It is, in its very essence. There is a clear distinction to be drawn between such forms of entertainment and horse-racing, dancing, skating, and so on. The schedule is a compromise, and I ask honorable members to let it pass.
– This is absolutely unique - a Treasurer pleading for the remission of taxation.
– May I suggest to my honorable friend that what is proposed is a compromise, which is the very essence of politics, and one which will represent a saving of £350,000 at the very least.
– How much is the Treasurer losing ?
– About £200,000, and nearly all of that from the taxation of pictures.
– I intend to move a slight amendment, to which I do not think the Treasurer will take grave exception. I move -
That after the word “ concerts,” in paragraph a, the following words be added “ and band socials.”
Bands do excellent work, and they are always on the side of charitable effort, but if they hold a social in order to raise money for themselves they are compelled to pay this tax. They are generally in a state of financial hardship.I do not know one of them which has a credit balance in the bank. They frequently travel long distances to take part in charitable concerts and such-like entertainments, and the least we can do is to give them some sort of encouragement by. exempting them from the payment of this tax. I think the Treasurer will see that this is a reasonable request.
.- I make a final appeal to the Treasurer, on behalf of the bush-whackers of Australia, for the exemption’ of their one form of amusement, the bush social. The promoters of these gatherings are now compelled to send hundreds of miles for a permit, and their exemption would avoid all the necessity for this permit business. At any rate, when bouquets are being thrown about in the cities, one or two might also be dropped in the bush, where they are more needed. However, our Treasurer is as hard as flint where people living in the bush are concerned.
– Others say that I am as soft as putty.
– So you are where the towns are concerned. Every Government has catered for the towns as against the country districts. It is like drawing teeth out of a camel to get any concessions for the latter.
-Country telephones have been exempted from the 25 per cent. increase, which represents a loss of revenue to the extent of £100,000.
– Thanks for nothing. The Treasurer has nothing to get excited about. People in the country areas have; no telephones. They have nothing but promises so far.
– This discussion is quite outside the Bill.
– But it is not out of order to refer to the taxation from which the people in the bush are suffering. I ask the Treasurer not to be adamant in regard to the request to exempt this little form of amusement in the bush. The revenue he would get from these socials would not be more than a few pounds at the most.
– How many persons would attend a social for which the charge is1s. 6d., refreshments included?
– I have seen a couple of hundred people at one of these en tertainments .
– In that case the tax would be a little over £1. Would that hurt them ?
– It is the principleof the thing.
– It is the principal that I am after just now.
.- I appeal to the Treasurer to exempt socials and dances in the country when arranged by bona fide sporting clubs. I cannot understand why the honorable member for Hume (Mr. Parker Moloney) has not included them in his amendment.
– Because I could see no chance of the Treasurer agreeing to exempt them. In any case, bands do a great deal of work for charity.
– These entertainments in country towns are a great means by which young people get together, and they make life more enjoyable for the country people, who will feel the tax more keenly when they learn that certain other forms of entertainment, carried on for private profit, are now to be exempt.
.- Many bands give all their entertainments without receiving any fee or return for themselves, except, perhaps, when they are seeking to raise funds to buy instruments. Then it is not the individual, but the band itself, which owns the instruments purchased in this way, and when the individual resigns his membership he is obliged to surrender all his claim to his instrument. A gentleman, who has been the honorary secretary of a band for manyyears, has written informing me that while the income tax continues to be charged in such cases, he does not feel inclined to do anything else but resign his position. His band was called upon by the Commissioner of Taxation to furnish returns for three years back and pay a penalty of 10 per cent, for overdue payments of the tax for that period. It cost the members of the band £34. When I appealed to the Treasurer to grant- them some relief he was sympathetic, but upon the case being submitted to the Commissioner of Taxation he pointed out that he was obliged to carry out the law, and that he did not see how he could avoid doing what he had done, except by giving time for payment. I appeal to the Treasurer now to exempt from the payment of this tax band socials which are provided for educational, religious, or charitable purposes. I am sure the public would appreciate our action a great deal more if we cut o*t tins kind of taxation rather than adopt the full proposed reductions on picture shows.
.- I wish to explain my reasons for opposing the amendment of the honorable member for Hume (Mr. Parker Moloney). It will be very difficult to decide exactly what form of entertainment is to be exempt under his proposal. If I understand it aright, a concert given by a band, or in aid of a band, would be exempt, and a social where a baud is playing without charge would also be exempt. I can see no reason why such a social should not pay the same tax as one where the music is supplied by a. pianist or a violinist. I am sorry I cannot support the amendment. I have a great deal of sympathy with the proposal, but to my mind there is only one thing to do: either to exempt all tickets up to 3s., as proposed by the Treasurer in the case of cinematographs and theatres, or else to charge the tax on all. Nothing else will satisfy me. We must have one or the other, and I do not care very much which.
– I have much pleasure in supporting the amendment of the honorable member for Hume (Mr. Parker Moloney), and indorse everything that has been said for it. Every word said by honorable members about the .people in country districts is true. I know from my own experience in the running of these functions, that, as the honorable member for Maranoa (Mr. Page) says, it is not so much the payment of the tax, as the getting of the permit, that i3 the trouble. In a great many cases, we are hampered to such an extent by the delay in the mails that we are forced to wire for- the permit in order to obtain it in time. If it is delayed, we have to follow the first wire up with more, and in the end it perhaps costs us fi to get the permit before we can start off at all. If this trouble were wiped out, it would be a great convenience to us in the back-country districts. City dwellers do not realize the amount of inconvenience we put ourselves to in the country in order to raise funds for such purposes as the honorable member for Hume wishes to exempt. Country bands do an immense amount of good. Many a person who shines to-day in the cities as a musical genius received his first musical education from a country bandmaster. In Inverell, my home town, we have a man who has been a bandmaster for twenty-six years without receiving any fee or reward whatever. The band have never received assistance from Government or municipal funds, but have been responsible for giving the cities many of the best musicians that have come from that district. They have always done everything they could to support every charitable institution.
– Why exempt a band, and not a pianist or violinist?
– In many cases, the pianists and violinists are professionals. The members of the bands are amateurs. The cases are not at all analogous. The country band is composed of amateurs pure and simple, who devote an enormous amount of time to the work. They help to make life livable in country towns. I hope the Treasurer (Sir Joseph Cook) will take note of the fact that in many country towns life would not be nearly so pleasant as it is were it not for the bands. The cities have plenty of musical entertainments, But the band is really the life and soul of the country town. It helps in all entertainments run for social or charitable purposes, and in all demonstrations for war loans, or movements to raise funds for any public purpose whatever. When we have an object of that sort in mind, we go first to the country band, and get them to come along. They are the great draw for the crowd. That is how we, in the country districts, raise the funds that we do for charitable and public purposes, in which honorable members are often pleased to have our assistance, when they are appealing for help from citizens throughout the length and breadth of Australia.
– In that case there should be no difficulty in getting up a concert in aid of the funds of the band, when they would be exempt.
– Where no individual receives financial benefit from these entertainments it is only imposing hardship to tax them.
– You could not put it in that way exactly, because then you would bring in the racing clubs. You do not want to do that.
– There is no connexion between the racing clubs and these entertainments, because a large number of individuals get their living on the race-course. That cannot be said of an entertainment run by a band in the interests for which the honorable member for Hume is pleading.
– I mean that you cannot get a definition of that kind into the Bill.
– If the honorable member so desires, he can move for the insertion of a definition, and the Committee can deal with it. The Treasurer should extend consideration to all entertainments such as we have spoken of , for the purpose, as much as anything, of saving us the trouble of having to obtain permits. In many cases this has caused us endless trouble and worry. In one case I paid 15s. out of my own pocket for urgent wires to enable us to advertise the function far enough ahead. It is not that we wish to evade the payment of the tax. We look at the question in the light of what is intended by the entertainment. I do not think if the function were run for the profit, of an individual it should be exempt, but consideration should certainly be extended where the object is to benefit a charitable or public institution, or to forward a public purpose. I trust the Treasurer will help us in this way to make life more livable for residents in country districts.
.- I do not think we can insert here any definition of ‘ ‘ entertainment ‘ ‘ that would meet the desires of honorable members generally. My impression is that the tax should be imposed where entertainments are carried out for profit, or people make a business of them. It should apply also to race, football, and cricket clubs, and matters of that sort. It should not be imposed where a little social is being held, and a great deal of trouble is caused in obtaining a permit. I have had the same experience as the honorable member for Maranoa (Mr. Page). People in a little country town 40 or 50 miles from a railway have to send all messages to the city by telegraph or telephone, and must obtain the permit before the night of the entertainment. I have in my bag some correspondence on this subject which is worth reading. It tends to show the difficulties that are in the. way when an Act of Parliament is strictly administered. It might meet the case if a paragraph could be inserted at the end of the schedule stating expressly the classes of people who have to pay the tax. That would be better than asking that band socials should be exempt while other classes of entertainment that might well come within the same category are taxed. I should be glad if the Treasurer (Sir Joseph Cook) would exempt entertainments where no effort is made to make a profit for the individual; but, of course. not exempting race clubs and institutions of that sort. A yachting club, for instance, that runs a big carnival, should pay the tax.
– It is the man who buys the ticket that pays the tax.
– The tax should operate in cases of that sort. I do not want to see people able to go to the racecourse without having to pay it. Later I shall move to strike out the words “ exceeding 3s.” in order to insert a lower amount. If the Treasurer could promise to insert a paragraph at the end of the schedule making it clear that the class of entertainment for which honorable members generally have been appealing will be given consideration, that would be much better than to carry the amendment of the honorable member for Hume.
– I am rather surprised at the attitude of the Treasurer towards the amendment, and I am also surprised generally ‘by the resolution which he asks the Committee to pass. I was under the impression that he was going to give the people of Australia something real in the way of a reduction of the entertainments tax, but so far as I can see, he. has given them very little. He has exempted from taxation cinematograph and theatrical entertainments and concerts, where the charge for admission is less than 3s., but has failed to exempt all other entertainments. As was very ably and correctly pointed out by the honorable member for Maranoa (Mr. James Page), the resolution, as it stands, will inflict great hardships on the residents of country districts. I noticed a number of honorable members smile when ‘the honorable member (pointed out the manner in which the measure will affect those districts. Their smiles proved to me and others conversant with country conditions that they did not know anything about them. Those of us who do understand them, realize that practically the only forms of entertainment provided in real out-back districts are the annual day’s horse-racing, and a periodical dance. If the Bill goes through in its present form, the residents in those districts, who have to nut up with more than sufficient hardships as it is, will be taxed when they attend the only entertainments at their disposal. For these reasons, I am sure the Treasurer will accept the amendment, and will exempt, so far as the amendment goes, although it does not go as far as I could wish, those forms of entertainment mentioned by the honorable member for Hume.
– Do not forget the entertainments got up for poor widows.
– Quite so; it is customary to get up entertainments for widows and others in need, and such entertainments are taxed by the Bill. For the Treasurer to bring a measure before us, and try to convince us and the electors that he is affording some real relief, is, to my mind, only a piece of political humbug. A few forms of entertainment in the cities will be exempt, but no redress will be afforded in country districts. I hope the Treasurer will accept the amendment; then, bad as the measure is, it will be more acceptable than at present.
– Thank you for nothing !
– You are giving us nothing by this measure.
– I see the difficulty, and it is a real one. The rigid application of the Act in its present form might, indeed, impose hardship on country bands and such like institutions. After all, the test is - Are the entertainments carried on for profit, or are they not? May I suggest that the honorable member for Hume withdraw his amendment, with a view to the insertion of the following words after the word “concerts”: - “or entertainments for the purpose of raising funds for musical societies, associations, or bodies’ not carried on for the profit of the individual members thereof.”
– That doe3 not apply to race-courses ?
– Will the suggested amendment cover bands?
– The word “ bodies “ must, of course, cover bands.
– On that assurance I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment (by Sir Joseph Cook) agreed to -
That after the word “ concerts “ in paragraph a, “the following words be inserted: - “ or entertainments for the purpose of raising funds for musical societies, associations, or bodies not carried on for the profit of the individual members thereof.”
– I move -
That the words “ three shillings “ in the second column of paragraph a be left out, with a view to insert in lieu thereof the words “ one shilling.”
This amendment, if carried, will, of course, involve consequential amendments, and any charge over1s. for admission to any entertainment will have to be taxed. There is great necessity for economy, and also for revenue, in this country at the present time, and I do not regard a tax on any charge over1s. as excessive. I may say that, even if my amendment is carried, I shall vote against the Bill as a whole; but if it is to be passed, then I wish it to produce as much revenue as possible. I am sure that the suggestion to introduce this Bill never came from the Treasurer himself, but must be in fulfilment of a Government pre-election promise. That being so, the Government will have done its duty in asking the Houseto accept it, and, 1 think, the duty of honorable members is at least to accept the amendment I now propose. Many honorable members are anxious that children shall not be taxed on their admission money to entertainments, and the amendment will leave them quite free. I do not see why in times like these persons who are prepared to pay 2s. 6d. or 3s. for an entertainment should not pay a tax. I can see no justification for exempting them.
– I can see no justification for taxing them.
– We must have revenue, and the honorable member will have an opportunity to reduce taxation when we come to deal with the Tariff, which presses very hardly on poor people, in view of the increasing cost of living. Surely it is better to tax the person who pays 2s. 6d. or 3s. for an entertainment, than a poor woman who purchases some tinned fish or something of that sort. As a matter of principle. I think we are quite justified’ in reducing the amount.
– I am inclined to think that the amendment is not in order.
– Words have just been added, on the motion of the Treasurer
– It is quite competent for any honorable member to move in the direction of reducing taxation, but it is not competent for him to submit a motion that will have the effect of increasing it. The amendment moved by the honorable member will have that latter effect, and, therefore, I am of opinion that it is not in order.
– Did this Bill come down with a message from the GovernorGeneral ?
– I submit that my amendment does not have the effect of increasing taxation.
– Then your amendment has no effect.
– The taxation is already on the statute-book.
– You are preventing its reduction.
– Quite so; my amendment is a reduction of the exemption. As the Act stands at present, I submit that I am really proposing, to reduce taxation.
– You are reducing the exemption.
– I am reducing taxation.
– You are reducing the exemption, and, therefore, you are increasing the taxation.
– The resolution before us is merely a proposal, and it is one to reduce, and not to increase, taxation. At the present time certain taxation is imposed on entertainments, and the Treasurer proposes to reduce it. I am seeking to prevent that reduction, by not giving effect to it to the extent he desires. But I am not increasing present taxation ; I am reducing it.
– The point is, I think, that the honorable member for Dampier (Mr. Gregory) proposes to increase the amount provided for in the Governor General’s message, and in that sense is, undoubtedly, increasing taxation.
– I submit that the honorable member for Dampier. by his amendment, is increasing the taxation of the people, which is not within the competence of a private member, any more than it would be competent for me to move an increase of Tariff duties. Only a Minister of the Crown can propose to impose taxation. The honorable member for Dampier proposes to make every person who pays between1s. and 3s. for an entertainment, pay a tax; he brings all such persons within the ambit of taxation.
– Every person is within the ambit to-day.
– No; only the Treasurer can propose to impose taxation.
– Quite right; all those people are within the ambit of taxation, and I am proposing to take them out. The honorable member for Dampier proposes to retain them there.
– I submit that it is not competent for an honorable member to propose to retain those people within the ambit of taxation, when the Treasurer proposes to take them out.
– The Treasurer has told us that his proposal will involve a reduction of taxation to the extent of about £200,000. The honorable member for Dampier (Mr. Gregory) wishes to reduce that amount to £60,000, or, approximately, one-third.
– I submit that it is not competent for a private member to do that. It is, however, open to the honorable member to object to the whole financial proposals of the Government.
– I am attempting to reduce taxation.
– The honorable member is attempting nothing of the kind. His aim is to secure more revenue. Otherwise he would vote to wipe out the whole of the tax. I submit that his proposal is not in order.
– May I point out that the Treasurer (Sir Joseph Cook) has moved a resolution in accordance with a message from the Governor-General. That, I submit, is the question now before the Committee, and upon that question the honorable member for Dampier (Mr. Gregory) has attempted to move an amendment for the purpose of increasing the amount of revenue which will be derived under the proposal of the Treasurer. I, too, contend that he is not in order in adopting that course.
– I have not yet given any ruling upon the proposal of the honorable member for Dampier (Mr. Gregory), although I stated that, in my opinion, it was out of order because it is not competent for a member of the Committee to submit any proposal which would have the effect of increasing taxation. The position is clearly set out in standing order 171, which reads -
No amendment for the imposition or for the increase of a tax, rate or duty shall be proposed by any non-official member in any Committee on any Bill.
But when I expressed my opinion upon the proposal of the honorable member for Dampier I overlooked the fact that we are not now dealing with a Bill, but with a resolution in Committee of Ways and Means. T. am, therefore, obliged to recall a ruling which I gave in the first Parliament of the Commonwealth, when the first Tariff was under consideration. Upon that occasion a non-official member of the Committee sought to increase a rate of duty, whereupon I ruled that at that stage, and at that stage only, it was competent for an honorable member to move in the direction indicated. I then gave my reasons for that ruling. A very long debate ensued, in which the greatest constitutionalists of that day, including the late Sir George Reid, the late Mr, Alfred. Deakin, and a number of others took part. After I had given my ruling, the matter was referred to the late Mr. Speaker Holder for his final decision. Helistened attentively to the debate which followed, and, in a very lengthy ruling, stated that, much against his wish, he had to confess that the ruling which I had given was in order, and that, therefore, it would stand. Having ruled in the way that I did upon that occasion, I must give a similar ruling now.
– Not necessarily.
– I wish to be fair to the Committee.
– The High Court has just reversed its decision upon an important matter.
– The High Court may do so, but, until sufficient reason has been given for a departure from the ruling to which I have referred, the higher Court of Parliament should not act similarly. Consequently I now rule that the amendment of the honorable member for Dampier is in order, notwithstanding my opinion that it seeks to increase a rate or duty in opposition to the provisions contained in standing order 171.
Resolution, as amended, agreed to and reported.
Standing Orders suspended ; resolution adopted.
That Sir Joseph Cook and Mr. Poynton do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Sir Joseph Cook, and read a first time.
Motion (by Sir Joseph Cook) proposed -
That this Bill be now read a second time.
.- I desire to take a test vote upon this motion, and am quite content to go to a division forthwith.
Question - That the Bill be now read a second time - put. The House divided.
Majority . . . . 26
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment.
In Committee of Ways and Means:
– I move -
That a tax be imposed on income derived from sources in Australia at the following amounts and rates, namely: -
-Rate of Tax upon Income Derived from Personal Exertion.
For so much of the whole taxable income as does not exceed £7,600, the average rate of tax per pound sterling shall be Threepence and three eight-hundredths of one penny where the taxable income is One pound sterling, and shall increase uniformly with each increase of One pound sterling of the taxable income by three eight-hundredths of one penny.
The average rate of tax per pound sterling for so much of the taxable income as docs not exceed £7,600 may be calculated from the following formula: -
For every pound sterling of taxable income in excess of £7,600 the rate of tax shall be Sixty pence.
-Rate of Tax upon Income Derived from Property.
For every pound sterling of taxable income in excess of £6,500 the rate of tax shall be Sixty pence.
For every pound sterling of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Subdivision B if the total taxable income of the taxpayer were derived exclusively from property by the amount of the total taxable income.
In addition to the tax payable under the preceding provisions, there shall be payable, in the case of incomes in respect of which the tax is calculated under the foregoing provisions, an additional tax equal to twenty-five per centum of the amount of the tax so calculated.
In addition to any tax (including additional tax, if any) payable under the preceding provisions, there shall be payable a super tax equal to thirty per centum of the totalamount of the tax so payable.
In addition to any tax (including additional tax and super tax, if any) payable under the preceding provisions, there shall be payable an additional super tax equal to five per centum of the total amount of the tax so payable.
Notwithstanding anything contained in the preceding provisions, the tax payable by any person who -
would, apart from this provision, not be liable to pay an income tax of One pound or upwards, shall be One pound.
Prize in a Lottery.
There shall be payable in respect of a cash prize in a lottery won after the commencement of the Act passed to give effect to this resolution, income tax to the amount of fourteen per centum of the gross prize money.
– Rates of Tax upon the Income of a Company.
This Bill imposes the rates of income tax for the financial year 1920-21. As I indicated in the Budget speech it is the intention of the Government to propose a general increase in the income tax rate of 5 per cent, on the rates of the preceding year. I find that that announcement is misapprehended in many quarters. People imagine that we are imposing a new rate of 5 per cent, on the total income of the people. That is not so. It is a 5 per cent, increase on the rates of last year; that is to say, a person who paid £100 in taxation last year will pay £105 under this proposal. The proposed rates represent an increase of 70§ per cent, over the rates originally fixed in 1915. It will be remembered that those rates were first increased by 25 per cent, in 1916, and in 1918 the rates then in force were further increased by 30 per cent. This increased the original 1915 rates by 62£ per cent. The present proposal means an increase of 5 per cent, on the 1915 rates, plus 5 per cent, on each of the latter increases mentioned. The first, second, and third schedules of the Bill are on the same basis as those of the original Act. It is not considered desirable to revise the schedules so as to embody the proposed rates of tax, as it would be necessary to so revise them as to set out the curves of the second and third degrees increased by that percentage. Such schedules would be complicated and cumbersome, and I therefore propose to leave the curves alone for the time being.
– Keep to the straight; never mind the curves.
– But the curves remain in the Bill.
– The Treasurer does not understand them.
– No, and I am sure the honorable member does not. The better method for the present is to retain the original schedule, and. to provide in the substantive portion of the Act for the addition of certain specified percentages to the amounts as calculated under the schedules. Although the desirability of abolishing the schedules in the present form, with a view to the substitution of a simpler form, has been considered, it is not deemed desirable to alter the present method, pending the report of the Royal Commission on Taxation, which is now beginning its investigations into the whole incidence of taxation, Federal and State. All previous collections of income tax have been made on the basis of those schedules, and, consequently, the additional amount of tax to be derived from’ any percentage of increase can be calculated with accuracy. If these schedules were cast aside, and some simpler method were introduced, it could not be guaranteed with any degree of certainty that the incidence of the rates would remain the same, and that the desired amount of tax would be collected. A very difficult process of adjustment . would be entailed. The curves would require to be examined and mathematically drawn again; therefore, it is better, on the whole, to leave them alone for the present. In connexion with the 5 per cent, increases, one or two litle anomalies occur. For instance, as regards the rate on cash’ prizes in lotteries, the rate last year was 13 per cent., and as a 5 per cent, increase on this would give only a fractional increase on the previous rate, for simplicity of calculation the rate has been increased to 14 per cent. Similarly, in the case of companies, as the exact 5 per cent, increase would make the rate on undistributed profits of a company 2s. 7£d., it has been decided to fix the rate at 2s. 8d. This will make for simplicity of calculation in the assessment, and, in addition, the Department will get an extra £d. in the £1.
.- I am sorry that we have not before us the Income Tax Assessment Act, which fixes the amount of general exemption and the amount to which a parent shall be entitled to deduct for each child. The Federal Act is much fairer in that respect than are some of the State Acts, which give no exemption for children. I have said on each occasion when the Income Tax Bill has been before Parliament during the last two or three years, that the exemption of £156 is not of anything like the assistance that it was when it was fixed in 1915. The (purchasing power of money to-day is much less; £3 per week then had probably a greater purchasing power than £4 has to-day. The amount of the general exemption should be increased. The increase in the rate of tax which the Treasurer is proposing is more than 5 per cent. If a man was paying £100 in income tax in 1915, he had to pay under the 1916 Act £125. Since then, we added the supertax of 30 per cent., not on to the £100, but on the £125. . This would represent £37, which, added to the £125, would bring the amount to over £162, really more than is estimated under this measure. The Taxation Department officials use a ready reckoner, which shows what each £1 of income is liable for under these curves. They merely added the 25 per cent., then the supertax of 30 per cent., and now they will add this proposed 5 per cent. increase.
– When these resolutions are submitted, it would be much betterif we had a simple illustration of what an ordinary income would be called upon to bear.
– That would not be a bad idea. On page 20 of the Budget papers there is set out a table showing that individuals and companies with incomes of £1,000 and upwards paid over £9,000,000 out of a total of £10,800,000 income tax collected last year, but if we look at the percentage of total tax assessed, we find that the only substantial increase is in the case of incomes of £10,000 and upwards. Since 1915-16, they have increased 6.9 per cent. The percentage of total tax assessed has increased, in the case of incomes below this amount, from about½ per cent. to 1 per cent. I agree with the Treasurer that the Taxation Commission may be able to throw some light upon the incidence of taxation, but Parliament must take any responsibility for altering the exemption limit, and of deciding how the tax shall be borne by the community. When the Minister for the Navy (Mr. Poynton) was Acting Treasurer last year, in the absence of Mr. Watt, I brought under his notice the fact that, while an exemption is granted in the case of unmarried persons who may be supporting relatives, a married man who may also be contributing to the support of relatives does not enjoy this relief. This, I think, is a matter which might well be inquired into by the Taxation Commission. I have no objection to the Bill at the present time. I understand the Treasurer is anxious to get these taxation proposals through in order that they may become operative for the current year, but I think we ought to deal with the question of raising the exemption in the Income Tax Assessment Act.
– The Commission will inquire into the incidence of the income tax.
– It is all very well for the Treasurer to say that. The Commission will, no doubt, look into the incidence of the tax, but if we allow the present exemptions to stand the Commission will not be able to do anything in that direction. In sub-paragraph b of paragraph G, it is provided that the tax payable by any person with a gross income of not less than £100, or in the case of a person carrying on a business in Australia with an income from the business of not less than £100, after making allowable deductions under the Income Tax Assessment Act, shall be taxed £1. But that does not affect the exemption of the ordinary citizen.
– We are not proposing to alter that in any way.
– I know that. The only alteration is this 5 per cent. increase, and it will operate in the case of a person winning Tattersall’s Sweep, which is about the only lottery in Australia.
– No. There is a lottery in Queensland.
– Yes. The Queensland lottery, I understand, is called the Golden Casket. We have been told that the undistributed profits of companies will now be taxed to the extent of 14 per cent., the rate, I understand, being increased from 2s. 6d. to 2s.8d. I repeat that I am anxious to increase the exemption of ordinary incomes, which was fixed in 1915-16 at an average of £3 per week. The Treasurer, no doubt, is quite right in endeavouring to get his taxation proposals through, but we did not expect to deal with them to-day, and when we enter upon the discussion of the Budget the new imposts will be operative.
Sitting suspended from 6.30 to 8 p.m.
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Sir Joseph Cook and Mr. Poynton do prepare and bring in a Bill to carry out the foregoing resolution.
Bill presented by Sir Joseph Cook, and read a first time.
Motion (by Sir Joseph Cook) pro posed -
That this Bill be now read a second time.
.- Since this is not a ‘machinery Bill, I take it that the House will not be free to deal with various phases of the levying of income taxation, such as have already been indicated and discussed in this Chamber. The honorable member for Lilley (Mr. Mackay) introduced a motion some months ago which was agreed to, I understand, without division, and which was to the effect that the Government be recommended to introduce the principle of assessing the income of primary’ producers upon an average taken over a period of five years. That is something different from any procedure hitherto followed with respect to taxation in Australia. The idea is that if primary producers suffer from a bad season they should be able to spread its effects over a five-year period ; or, that if there are four bad seasons among the five they should not be asked to pay income tax separately upon that prosperous fifth season, but should be assessed upon an average covering the whole period. I understand from -the Treasurer (Sir Joseph Cook) that this matter is among those submitted to the recently appointed Royal Commission.
– The House was promised that that would be done.
– I take it, then, that we must wait until the Commission has presented its report. I do not know whether’ the Commission will be free to report generally, also, upon the matter of exemption. I desire that the matter of exemption shall be reviewed, both in respect of married and single persons. The levying of a tax of £1 upon people in receipt of incomes of £100 will hit certain grades of school teachers very hard. Numbers to-day are receiving £100, and, what with the everincreasing cost of living, they are finding it more and. more difficult, year by year, to live. Their salaries have not increased proportionately to the cost of things, so that they will not be in a position to meet the demands of the Taxation Commissioner. It is my intention, in Committee; to move for the insertion of a new clause to raise the exemption not only in respect of single persons, but also with the object of making the general exemption higher than £156. Wages in various industries have been increased on account of the. cost of living, but men to-day are finding themselves worse off at £200 per annum than when their pay was £156, prior to the war. Knibbs points out that the increase in the cost of most of our necessary staples of food and clothing amounts to nearly 100 per cent.
– That is on some things.
– Practically everything required in an ordinary home has doubled in price. On most articles of wearing apparel that is certainly the case; while in regard to food and groceries the increases are, according to Knibbs, between 60 and 70 per cent.
-And the total increase in the cost of living, so Mr. Knibbs says, is about 40 per. cent. ‘
– I am surprised to hear that.
– So was I.
– I think the general increase will be found to be much more than 40 per cent. ; but, even if such were the case, and taking that percentage as a basis, the exemption should be raised to £218.
– That is a curious kind of reasoning.
– At any rate, I shall endeavour, in Committee, to secure the raising of the exemption.
.- I do not see- any reason for delaying the assessment of income tax over a five years’ average until the report of the Taxation Royal Commission shall have been presented. Honorable members have’ fully discussed and unanimously agreed’ upon this method, and the Government must have accepted it as. a very strong recommendation. From the in.ception of ‘the Country party, the principle has comprised one of the most important planks in our platform. Many other honorable members, beside those in the Country party, strongly favour the granting of this just and equitable concession. As for the argument that it has not hitherto been tried in Australia, we need not go further for precedent than to examine the history of income taxation in Great Britain. Practically, since the levying of taxation on income was first adopted, the method of averaging on a basis of three years- has been practised. It has always been recognised in England, at any rate, that to levy separately, from year to year is grossly unjust to those engaged in somewhat hazardous and precarious pursuits. Seeing that the system has been long tried, and is unquestionably accepted in the Mother Country, where seasons are not so precarious as in Australia, it is only right that the Commonwealth Government should adopt a like procedure. However much seasonal conditions may vary in Great Britain, the variation in Australia is considerably more marked, and the difficulties of those engaged in the primary and secondary industries - which are closely allied to our primary industries - are immensely greater than in the Old Country. 1 do not intend to labour the question; but I ask the Treasurer (Sir Joseph Cook) even if an amendment be not moved when the Bill is in Committee, to give the House some assurance that this matter will be taken into full and adequate consideration, and that an opportunity will be given to enable this House to come to a decision. I hope it is not the intention of the Government, upon this point at all events, to wait until the whole matter has been threshed out by a Royal Commission. The question at issue is of vital importance to those engaged in country districts, and particularly those connected with our , primary industries. Our primary producers are unanimously in favour of the proposal, and I feel so strongly on the subject that I. again ask the Treasurer to give the House some assurance that the Government will not wait until the report of the Royal Commission is furnished before taking action, but that he will make an endeavour to bring the change into operation as soon as possible.
– I was pleased to have the opportunity a few months ago of submitting a motion to this House dealing with the proposal to base the incomes of primary producers on returns over a five-year, instead of a one-year, period, as has been the custom in the past. When the motion was before the House the then Treasurer promised that the question would be referred to a Royal Commission, which was to be appointed to go thoroughly into the question of taxation, and, personally, I have every confidence that that will be done. I feel certain that it would be practically impossible to immediately bring this reform, which is generally regarded as a very necessary one, about. I can see that it will take considerable time before it can be successfully brought into operation, and it is, therefore, likely that some time must elapse before a scheme that will be generally acceptable can be introduced. I cannot think that the honorable member for Grampians (Mr. Jowett) is really in earnest when he asks the Treasurer (Sir Joseph Cook) to give a definite promise to introduce the reform forthwith.
– I am quite in earnest.
– I cannot imagine the honorable member being in earnest in making such a suggestion, because he must realize that there are many difficulties surrounding the question.
– What are the difficul - ties?
– The honorable member for Dampier, who has had Ministerial experience, must know that there is a considerable amount of information to be obtained.
– The Department has all the information.
– I admit that the Taxation Department has records extending over a period of years, but I cannot for a moment believe that there is an officer in the Department who is prepared to come forward and say that he has sufficient information at his disposal on which to base a satisfactory provision for embodiment in a Bill.
– The present principle is unjust.
– I realize that, and I would not have submitted the motion, to which’ reference has been made early in the session, if I did not believe that the primary producers were being unfairly treated. It must be admitted that there are difficulties to overcome.
– I want to assist in overcoming them.
– I would strongly oppose any unnecessary delay in connexion with this matter. I expect the Treasurer to treat it as urgent, and to introduce a satisfactory proposal when the House meets early next year.
.- I am not quite sure of the usual procedure when Bills of this character are introduced. I believe, however, that it is customary for the Government to place upon the notice-paper the business to be brought forward during the day so that honorable members may have an opportunity of collecting -any information they may desire to enable them to properly debate the questions before the House It is somewhat difficult when important measures are brought forward without the slightest notification.
– This is not an amendment of the Income Tax Act, but merely a slight alteration in the method of assessment.
– I realize that; but in discussing measures of this nature other questions relating to taxation naturally arise.
– But they cannot be dealt with on this Bill.
– I understand that, and it was my intention to draw the attention of the Leader of the Opposition (Mr. Tudor) to that fact. Nevertheless, “honorable members generally consider that when a measure of this character is before the Chamber they have an opportunity of drawing the attention of the Government to certain specific matters in the hope of obtaining promises that legislation will be throught forward to give relief where they consider it necessary.
It was my intention to deal with the question of exemptions, which has already been mentioned by the Leader of the Opposition, but I can see that there is no opportunity to do so on this occasion. I may say, however, that I am a great believer in every one paying something, however small, in the form of direct taxation, because it helps people to become better citizens and to realize their responsibilities when selecting their political representatives. In view of the great increase in the cost of living I think it would be wise for the Government to give consideration to the question raised by the Leader of the Opposition, but the better way would be to relieve ia taxpayer according to the family he has to support, instead of increasing the exemption. If such a proposal were submitted to the House it would have my support. Some time ago various matters were brought before the Treasurer (Sir Joseph Cook), and a Royal Commission has been appointed to make full inquiries. I was out of the Chamber when the Treasurer delivered his speech, and I would, therefore, like to ascertain whether we are likely to have the report of that Commission during the present, session, and whether it will be possible to give effect to its recommendations if the Government approve of them.
– I hope so.
– The matter is of great importance, and I have received communications from all parts of the country. Here is one from the Producers Association’s Central Council of New South Wales, which reads -
For some years past, it has been very apparent that the system of taxing the primary producers upon the results of each individual year’s operations has proved most inequitable and unfair owing to the extreme fluctuations that come from seasonal conditions. One year the taxpayer has to pay upon a large profit, am’, the next year lie may have a huge loss owing to drought, and it may take him years to recover his position; but, except that lie pays no tax on the year of his extreme loss, he gets no other relief, for, as soon as he can again show a profit over working expenses, the Taxation Department is down upon him again, though his previous year’s loss may have only been covered in a small degree.
That is apparent to every man who goes on the land. Periods of severe drought are usually followed by exceptionally heavy rains and floods, and it often happens that thousands of head of stock are destroyed. Many poor devils who have been contending against drought for years lose their stock when heavy rains fall, and are frequently called upon to pay taxation upon the value of the stock they have lost. Surely there” is something grossly unfair which compels these people to pay taxation upon the value of stock which they have lost, after having spent considerable money in an endeavour to keep them alive. In Great Britain . the income of a primary producer is averaged over a period of three or five years.
– Three years.,
– Then I think the same principle’ should apply in Australia. We have passed some very unfair taxation proposals in this Chamber, and I am never likely to forget the amendment of the war-time profits tax, brought forward by the late Treasurer (Mr. Watt). Any one who realizes the huge expanse of territory we have in our back country, and who knows the vicissitudes and hardships experienced by many of our primary producers, can realize how unfairly the wartime profits tax ha* affected many of. them. They have had to contend against difficulties and dangers year in and year out, and surely, when it comes to a question of taxation, they are worthy of some consideration. I have, on previous occasions, referred to a man who had invested £17;000 in the back country, and who, for seven years prior to the war, showed a loss. In the first year after the war he showed a profit of £1,200, and in the next year £4,800, but after paying land tax and income tax on that £4,800, which was a book profit only, as he might lose the whole of it the next year, he was asked to contribute £2,750 as a war-time profits tax. On the other hand, a man may remain in the city and place a similar amount of capital out on mortgage, which would give him an assured income without the slightest risk. The man on the land had to pay £2,750 on an income of £4,800, but the man who had money out on mortgage would not have to contribute a single penny, even if he in the same period earned £50,000 or more as a commission agent, because he made his income with his brains. That is a grave reflection on the laws of this country, and such a provision is grossly unfair. I have also heard of another man who, in 1911, showed a loss, of £840: in 1912 a loss of £623; in 1913 a loss of £126; in 1914 a profit of £283, and in 1915 a profit of £158. In 1916 he made a loss of £33. He had a large amount of capital invested, and after battling in the bush, fighting against nature for all these years, he showed a net loss of £1,181 up to the 30th June, 1916. For the year 1916-17 he showed a book profit of £3,035, and for , the year 1917-18 a book profit of £2,506. In respect of those two years, after paying land and income tax, he was called upon to pay £1,703 by way at war-time profits taxation. In other words, this man, allowingfor his losses, was asked to pay to the Commonwealth by way of taxation 70 per cent. of his actual income.No one will say that that is fair.
– It is all due to the fact that an averaging clause was not inserted in the original Bill.
– That does not apply so much to the war-time profits tax.
– It does. Such a provision was inserted in the British Act, but it was omitted from the Commonwealth Act.
– In connexion with the war-time profits tax, we gave pastoralists the right to average their income over a period of six years.
– According to the pre-war standard.
– Yes. Unfortunately, while it was agreed that their war-time profits taxation should be based on their average profits for six years prior to the war, the House refused to insert in the original Bill a clause suggested by me under which the pastora- lists would have been allowed 10 per cent. on their capital, and would have been taxed on all income in excess of that amount. I should have been satisfied with such a provision.
I mention these matters, not because they actually come within the scope of the Bill before us, but to show how necessary it is that the Government should review as quickly as possible their whole system of taxation. Every honorable member, no matter on what side of the House he sits, desires that something like fair play shall be meted out to all sections of the community. Income tax based on book profits may be all very well in the case of the ordinary business man, who is permitted to make a reduction in respect of bad debts, and whose stock is such that it will be of value in the succeeding year; but it is not applicable to those engaged in primary pursuits. It may not work any serious injustice in the case of pastoralists in Victoria, where a drought rarely occurs, but it is wholly unjust in the case of men who take up country that is subject to periodical droughts. It should be our object to help and encourage such people. The more wealth they can produce, the better for the country. The man who can make huge profits should certainly be compelled to pay income tax upon them, but the taxation should be based, not upon his book profits, but upon his actual earning?, and when the opportunity arrives I shall strongly press for an amendment in this direction.
Here is yet another fallacy associated with the Income Tax Department. The taxation authorities require of every grazier a complete balance-sheet, and they value every lamb and calf produced upon his property and tax him accordingly, although he may not have realized upon them.
– Stock increases do not necessarily represent income that has been realized.
– The Department holds that they do, and it requires graziers to pay income tax upon the value of every lamb raised on their holdings.
– That taxation, however, is based upon a value of about 10s. per sheep.
-The valuation varies j it is less in the north than it is in the south. I know of a man who bought a station in the northern part of Western Australia, on which there were a number of cattle. Desiring to convert it into a sheep-station, he sent 400 head of cattle down south to Cue. I dare say that those cattle in ordinary circumstances would have been worth from £12 to £15 per head, but after allowing for the cost of droving, selling, and losses en route - owing to the drought there was lack, of water on the route, and nearly every head of cattle was lost - the owner of this station made an actual loss of £120 on the sale, when he lost all his cattle, and £120 in addition. Extreme difficulty was experienced in inducing the Taxation Department to believe that loss .came within the scope of the section iri the Act which provides for deductions in . respect of losses due to drought. It was said that the drought had not occurred on the station property, and that, therefore, the1 case did not come within the meaning of the Act. I cite this case with the object of emphasizing the point that a man should be compelled to pay income tax1, only upon the1 profits actually realized by him. Sooner or later a grazier must realize upon his- stock, and when he does - when he secures payment^- he should be taxed. Honorable members would not think of paying taxation in respect of salary which they had been promised but had not received. In the case of the primary producer income tax should be levied on the average basis, and should be collected only in respect of profits actually made.
Another point is that the income tax assessment forms should be simplified. It ought to be possible for the Department to prepare a form compelling taxpayers to furnish all the information required, and yet so simply framed that the average man would be able to fill it in without having to seek the assistance of agents. The Treasurer (Sir Joseph Cook) has promised that the Taxation Commission will be asked to make recommendations for the simplification of income tax forms, and I hope that when those recommendations are made they will receive treatment different from that meted out to those previously made in connexion with other taxation proposals. Some time agoa Conference of the Federal and State Commissioners of Taxation was held, and one of the most important decisions arrived at. was that the profits of companies should be taxed at their, source. In other words, it was decided that companies should be compelled to pay income tax on all profits that were apportioned to shareholders. Had that recommendation been adopted, the Department would have received, from companies every penny payable by way of income tax on their dividends. At the present time they collect the tax from . the individual shareholders who receive the dividends. Some people who receive only small dividends might forget to include them in their returns.
– But in many cases the tax payable is on a much higher basis where it is collected from- the individual.
– That matter was discussed and threshed out on a previous occasion. The companies should, be compelled to pay the taxation on the basis laid down by the Income Tax Assessment Act. Under the system recommended, if a man had an income of £1,000 per year, one-half of which was derived from dividends, on which, let us say, ls. 6d. in the £1 had been paid by way of income tax, whereas the rate of tax on the total income of £1,000 was 2s. in the £1, the Department would surcharge him to the extent of 6d. in the £1 in respect of the dividends amounting to £500, on which ls. 6d. in the £1 had been paid by the company from which they had been received. On the other hand, it would make a rebate where the amount paid was in excess of the rate in respect of which the taxpayer was liable.
– That is being done in Britain to-day. There they have taxation at the source, and a super-tax is paid by the individual.
– But there they have a huge Inland Revenue Department.
– Nothing of the sort would be required here. This system would very much simplify matters. The Commonwealth and State Commissioners of Taxation unanimously agreed to the recommendation.
– I do not think the Commonwealth Commissioner of Taxation agreed to it.
– He did; I have no doubt on the point.
– The States are adopting that system.
– That is so.
Another reform that is urgently needed is the institution of one collecting authority and one form of taxation forCommonwealth, State, and municipal land taxation. Just as many people think that on applying to be enrolled for a State electorate they will also be enrolled for a Federal electorate, or vice versa, so many people are greatly confused by the varying forms of Federal and State land taxation. We should endeavour to adopt as quickly as possible a uniform system that would give relief to the taxpayers, and earn for us their gratitude and respect. Under the present system we have a conglomeration of returns which have to be sent in to the Federal and State authorities, and huge expense is unnecessarily incurred in their printing, distribution, collection, and examination. I believe that the additional labour, cost of printing, and loss of time involved must represent something like £750,000 per annum. I hope we shall be able to obtain from the Treasurer an announcement that he will make a special effort to bring the States into complete harmony with us in this regard, and that we shall have very soon a measure providing for simplicity of taxation forms and one collecting agency for the Commonwealth and the States.
– I am extremely disappointed that the Treasurer (Sir Joseph Cook), in submitting this Bill, has made no provision for increasing the amount exempted from income tax. The sovereign of 1911 is now worth no more than about 13s., but the present high cost of living has not been taken into consideration as it ought to have been. I think that some relief should be given to taxpayers by the increase of the amount exempted from taxation to more than £156.
– Suppose that wages have increased to the same extent as the cost of living? In that case a man would be as well able to pay the tax now as he was before.
– Different Commissions that have investigated the question from time to time have found that the increase in wages has not kept pace with the increase in the cost of living. So far as I can learn, the Basic Wage Commission will shortly recommend a basic wage of £6 per week, and I have no doubt that its decision will be based upon the evidence collected by it.
– That will mean more taxation, will it not?
– It is very clear that present rates of wages are insufficient to cope with the increased cost of living.
– The honorable member is telling us in one breath that we should have fewer persons liable to taxation and less taxes, and in the next that our people should receive higher incomes.
– My complaint is that no allowance has been made for the depreciation in the purchasing power of the sovereign, and it is because of that depreciation and because wages have not increased in anything like the same ratio as the cost of living, which will be proved conclusively when the Basic Wage Commission issues its report, that we believe that the amount exempted from income tax should be increased. I intend when the Bill is in Committee to move to increase the exemption to £200, and I hope that the Treasurer will be satisfied with that proposal.
– We cannot do that.
– The question of assessing the incomes of primary producers on a five years’ average has been discussed in this House before, and a majority of honorable members have decided in favour of it. It seems to me that the Treasurer might have taken the trouble to give effect to that expression of opinion by honorable members.
– It was unanimous.
– I believe that the decision was a unanimous one. It is undoubted that a majority of the members of this House are in favour of the adoption of that method of assessing such incomes, and the Treasurer should meet the wish in that regard that has been expressed. In some parts of New South Wales, in 1915, people had a good year, but in 1916, 1917, 1918, and 1919 the residents of those parts experienced bad years. They paid on their incomes in 1915, and in some cases they had a good season in 1916, and paid on their incomes during that year. At the present time they are mortgaged up to the hilt, and I have had applications from graziers, selectors, and farmers to obtain for them time within which to pay their taxation. They have had to spend the incomes of good years in the purchase of fodder to carry them over bad years. They are now head over heels in debt,and although they will in all probability have a splendid season this year, all that they will make will have to go to pay off debts contracted during the last three or four years. In the circumstances, it is, I think, clear that the average income over a period of five years is the fairest basis of assessment for taxation.
On the question of the simplification of the income tax schedules, I understand that a new form of schedule has been drafted and has been submitted to the State Governments. It is to be hoped that they will agree to adopt the common form proposed, and that in future the Commonwealth will be the only authority collecting this taxation. The simplification of the schedule is highly desirable, especially in the interests of those who do not reside in the towns, where accountants may be employed to assist taxpayers in filling up their schedules. I believe that the Government should take early steps to raise the exemption to £200, though, personally, I should like to see it raised to £250.
– I should like to see it raised to £400.
– I personally have no objection to pay income taxation. I wish that I were paying considerably more income tax than I am paying today.
– On the honorable member’s present salary he would like to pay a higher tax ?
– No, but I should like to be paying the present tax on a salary of £2,000 or £5,000. I urge upon the Government the desirability of adopting the five years’ average in assessing the primary producer’s income, the increase of the exemption to £200 or £250, and some expedition in the adoption of the new method of taxation, and of one form of income tax schedule for Commonwealth and State.
.- I agree with what has been said as to the necessity for greater simplicity in the form of the income tax schedule. I go further than some honorable members, and urge that there should be infinitely greater simplicity in the method adopted for arriving at the amount of tax to be paid in respect of any income. I venture to say that there is not an honorable member present who has the remotest idea of what is meant by the mathematical conundrum set forth in the schedule to this Bill. Indeed, the Treasurer has no idea what it means.
– I certainly have not.
– Can the honorable member suggest any better method.
– I can suggest the method adopted by the State Governments. They do not resort to abstruse mathematical problems for the purpose of fixing the amount of tax.
I welcome the appointment of the Taxation Commission. I realize that there are anomalies connected with our system of taxation to which attention should be drawn, and which should be rectified. The Taxation Commission should be greatly assisted in its investigation by the labours of the British Commission, composed of financial and taxation experts. This Commission secured the assistance of the best intellects of the Old Country in arriving at a decision as to the best form of machinery and manner of assessment to recommend for adoption. ,
– Does the honorable member believe that the Taxation Commission will secure any more information than the Department has already in its possession.
– I think so.
– I realize that in our present system there are many anomalies which ought to be adjusted, and it is with a view to the rectification of these anomalies that the Commission has been appointed. Originally, the Wartime Profits Tax Bill introduced in this House contained a clause providing for the averaging of profits and losses over a period of years, but that provision was deliberately omitted from two subsequent measures of the same kind which were introduced. On two occasions I fought strongly for the reintroduction of that provision, but it was resisted by the Government of the day, because, it was said, it would involve a dislocation of the finances. It was of no use whatever to direct attention to the fact that the finances of the Mother Country were colossal as compared to those of this small community, and my request for the reintroduction of the provision I have referred to was successfully resisted. The result has been to bring about anomalies which have worked gross injustice.
For one or two years, I also strongly urged greater consideration for the system of taxation at the source, a system which is adopted in the Mother Country, in the State of Victoria, and, to the best of my knowledge, also in the State of New South Wales. There is much to recommend this system . of taxation. This is a matter which received , very close attention from the expert Commission in the Mother Country to which I have referred. I read a portion of the report of that Commission, and particularly that portion- dealing with taxation at the source. The Commission, after taking a great ‘volume of evidence on the- subject, and’ assessing the value of that evidence, came ito the conclusion that taxation at the source was> the correct system to adopt’,, as it was just and fair: The system: which obtains, in Australia received’ full consideration; but, after a thorough investigation of the whole subject by this expert Commission, they wound up their report by recommending , that the system of taxation at the source, which had obtained in the Mother Country, should be continued. That system is deserving of consideration by the Taxation Commission appointed here, and I hope it will receive it.- The objection urged to it here is- that we have a. graduated tax,, with which the system of taxation at the source is inconsistent. Under our system a company pays dividends in cash in the ordinary way, or bonus shares, and. so soon as the cash or shares are received by the taxpayer they are taxed in his hands. They are not taxed in the hands of the company, but only when they are distributed to the shareholders. In that way the income of the shareholder is assessed, and is taxed according to the graduated scale. I submit that taxation at the source is quite consistent with the system of graduated taxation, because it would be quite possible to give credit for the amount paid by the company on behalf of each taxpayer receiving dividends. I hope that this phase of the question will also receive consideration.
As to the Bill before us, the necessity for this taxation is, no doubt, a cause of deep disappointment and regret to all of us, and of bitter resentment to a great many, because it is, to some extent, brought about by the waste and extravagance of the Government in other directions. However, there appears to ‘be no doubt that the majority of honorable members are determined to pass it, so we must submit to the inevitable. But what is the position? Upon the original tax we added 25 per cent. Then we proceeded to add another 30 per cent.,, and then a super tax of 5 per cent. To-day it is proposed to add still another 5 per cent. That is to say, on to the original tax 70 per cent, will have been added. When we were told that incomes were to be taxed by a super tax of 5 per cent., we innocently believed that it was a tax merely on the original income. But such is not the case. Much more than 5 per cent, is to be added to the income tax payable in order to produce the £600,0.00 the Treasurer requires. It is practically a tax added to a tax already added to and to a super-tax previously imposed.
– But still it is 5 per cent.
– But not on the original income.
– It simply means that the individual will pay 5 per cent, more than he paid last year.
– That is the position. The general idea was that it was merely to be 5 per cent, on the original income tax. This increase of 70 per cent, on the original tax is most regrettable, but I suppose that we must accept it for the present. Indeed, we have no alternative, but I do so distinctly under strong protest.
.- I am not concerned so much about the 5 per cent, which is to be added to “the income tax. To my mind, the increase is too small in the case of large incomes, which, I think, ought to pay an additional 20 per cent., so that wealth may be called upon to do something which we were told it- was to do, and which it ought to have done, in order to help to’ meet the national obligations. I rise to say a word or two upon the pennywiseandpoundfoolish principle of maintaining the flat rate of £1 on all wageearners with an income of £100, and keeping the exemption at £156, with £26 for each child. The burden which this tax represents to-day, with the present high cost of living, and the economic position of the workers, is much greater than a 20 per cent, increase would re-‘ present on large incomes. The fundamental principle of income taxation is that each man should pay according to his income, the individual with the biggest income paying the biggest tax; but that principle does not apply to-day. The exemption should be raised to £250, and if it were so graduated that the man with a wife and three or four children could be exempted up to £300, it would be little enough. The deduction of £26 allowable for each child is too small, and should be increased to £50, which would only make it equal to the exemption allowed by the New South Wales State Act.
– I agree with the honorable member in that respect.
– Early in this Parliament we were told that wealth would be made to pay a bigger burden of taxation, and that stern measures were to be taken against profiteers - in fact, they were to be shot - but now we find that the bullet aimed at the profiteers is merely a 5 per cent, increased tax on big incomes, which are increasing all the time. The honorable member for Kooyong (Sir Robert .Best) hopes that a Royal Commission will take the incidence of this taxation into its consideration. But that is the trouble with the Federal Parliament to-day. It decides nothing. It is an insult to the intelligence and standing of this House that anything intricate, and requiring the exercise of brain-power, has to be solved by a Royal Commission, appointed at great expense to the country, the Government assuming no responsibility in any direction. Half the time the people do not realize that they are being put to this extra expense, and that the Government are shelving their responsibility in this way. I have already said that ‘ the fundamental principle of the income tax is that a man ought to pay according to his income, but the primary producer of Australia is in a unique position as compared with persons on fixed salaries or in business. Industrial troubles may dislocate a business undertaking for a few weeks, but it is very seldom affected by such things as floods, droughts, or bush fires. A commercial man’s income may fluctuate a little, but, as a rule, it is fairly steady, and one year’3 return is a. fair criterion of what he will receive year in year out, making allowance, of course, for any extensions. On the other hand, the farmer may devote to his work the highest intelligence and the greatest industry possible, and he may slave, morning, noon, and night, but if the rain does not fall, he has no crop, and if it falls too heavily he may lose the result of all his labour through rust. He may make £2,000 in one year, ‘ and may lose £1,500 in the next year. For two years he may do well, but for the following three years he may be crucified and practically compelled to leave his farm. Is it right to make him pay income tax on £2,000 for one year, when he may suffer a loss of £1,500 in the next year?
– Is this the man on whom the honorable member wishes to place an extra 20 per cent, tax?
– No ; I do not class the primary producer among the profiteers. The National Government have taken great care to prevent the primary producer from profiteering, while allowing the middleman to do it. If they refuse to accept the suggestion of honorable members they will increase the burden on the primary producers.
– But the honorable member did say that he would increase the income tax by 20 per cent.
– Yes; and I go so far as to say that the primary producer who has enjoyed a large income over five years is entitled to pay an extra 20 per cent. I would say that on any platform. I believe that the old law in New South Wales permitted any person who suffered a loss in one year to set it off against another year’s profits.
.- I am in agreement with the honorable member for Dampier (Mr. Gregory) and others who preceded him, that it would be fairer to relieve a man according to the number of his dependants, rather than exempt the man with the fixed income of £150 a year or less. Every man should pay income tax according to his ability to pay it, and there is no reason why a; person with an income of £150 should not be called upon to pay his proper share of the taxation; but when we realize that there are only 371,580 individuals in the Commonwealth who pay income tax - that is, one out of every fourteen persons - it must be admitted that there are many persons with incomes over £150 who are not paying income tax. It may be that many thousands of people are not rendering returns, or that because the exemptions already provided for are so generous they are not called upon to pay the tax.
– It is due to both causes.
– I do not intend to enlarge upon what has been said by honorable members with regard to the proposed system of assessing incomes over a period of years. Honorable members generally agree that it is the most equitable method to adopt, and I see no reason why it should not apply to business men as well as to farmers. No doubt it is the only just method of assessing a farmer’s income. The primary producer appears to have a lot of friends in this Chamber. I am extremely pleased that he has so many, and for that reason all his troubles should be put right in the very near future. I know only too well that the farmer, at the present time, pays taxes several times over, whereas the man in business or the man who derives his income from mortagages, dividends, or Government securities pays only once. There certainly should be a readjustment of the principles of taxation, but I am afraid we are not going to derive much benefit from the report of the Commission which is about to sit and decide as to the best or fairest method of applying taxation. We have had a number of Commissions, but my experience is that we have not acted upon many of their reports so far. There is not much doubt in any honorable member’s mind as to the most fair and equitable way of adjusting taxation. We do not need a Commission to tell us that. I am afraid it is not a question of what is most fair and equitable, but rather a question of expediency with the Government when they have to decide who shall pay the taxes. We had an example of that this afternoon. There is not the least doubt that the reason why the Government decided to exempt amusements, such as picture shows and theatres, from the entertainments tax was” that many hundreds of thousands or people would benefit, and that, therefore, the move would be very popular, as compared with the few people that attend athletic sports, cricket matches, and other such gatherings, and who will still have to pay the tax even on 6d. tickets, while tickets up to 3s. at picture shows and theatres will be exempt. I am, therefore, very much afraid that any inquiry we may have, or any report that the Commission may make, will lead us very little further than we are at present. I am not in favour of increased taxation at the present time. I can see no necessity for it. What we want is economy in administration. The honorable member for Kooyong (Sir Robert Best), in his closing remarks said that the Government was guilty of great waste and extravagance. He was opposed to the increase in the income tax, but was afraid that we should have to put up with it for the time being. I cannot view the matter in that way. I will not use the words “ waste “ and “ extravagance,” but I am convinced that when we can spend money as we are proposing to do, on such enterprises as were passed last week - without mentioning any names - it is not necessary to impose increased taxation to fulfil those so-called obligations. For these reasons I am compelled to oppose the increase in the income tax by 5 per cent, at the present time.
– I look upon this proposal as simply a stop gap.
– Hear, hear! That is all it is.
– A stopgap due to the great appetite of the Treasurer (Sir Joseph Cook) for coin. All legislation seems to be of a stop-gap character at present, and the Income Tax Bill does not differ from other legislation in that respect. Anything that takes money out of one’s pocket is unpalatable, but what I object to is that we carry on week after week, month after month, and year after year in this manner. Why cannot we have a sensible proposal for income taxation? We have a Treasurer of great experience, politically and in every other way, in Charge of the exchequer, and yet he cannot tell us what our income tax system means. Not one member in this Chamber can explain it.
– It is purely an accountant’s job.
– Why should it be? Why have this system of curves? Why not adopt a simple proposal, so that people may know what it means ?
– An ordinary individual ought to be able to know.
– That is correct. The Government are appointing a Commission, which, after all, can give us no new information, although we are told that the British Income Tax Commission collected useful information and made very valuable suggestions. We have had Commission after Commission at considerable expense, but nothing is done with -their reports, and I often wonder where they go. The report of this Commission will meet the same fate, no matter what they do. We have all the information, and if we have not we have officers who ought to be able to give it to us. If they cannot, they are not fit for their posts.
– We have the information.
– And we have the men who can give it to us. Why could not the Treasurer consult the trusted officers of the Taxation Department and give us a common-sense” measure that we, and the man outside who has to pay. could understand?
– Would it not be better to have a Finance Committee in the Chamber, able to call evidence and report to the House itself?
– It would be, but it would be still better for the Treasurer to sit round a table with the officers of the Taxation Department, so that together they might frame a system that the House could understand, and that would be acceptable to the people of Australia. Everybody rails at the officers. That is an unfair method of doing things; for, after all, the officers have a very ticklish and responsible position, requiring ability and courage. Th«y have to analyze very difficult accounts. The information they receive is very confidential, and they know everybody’s affairs. I doubt if many of them could tell us offhand what the curve business means. The officers do remarkably well. That is my experience, at any rate, and the absolute faith that the people have in them is complimentary and striking. We had a practical Committee of the officers of the Federal and State Departments meeting in conference. That was much better than the proposed Royal Commission. They not only went into these questions, but practically agreed on a line of policy, and if my memory serves me right, a Bill was actually prepared. What has become of it? Has it gone to the limbo where all these reports go? Nothing has been done. One of the things they suggested was that amalgamation should take place. What has become of their suggestions?
– Turned down by the States.
– How could the Bill be turned down by the States if responsible Ministers in this Parliament brought it forward and said, “We are going to pass it into law”? It is very easy for the States to blame the Commonwealth, and the Commonwealth to blame the States, but until some determined effort is made we shall never get any further forward.
– The last scheme was turned down principally, I think, by New South Wales.
– New South Wales will be in the same position with regard to the Royal Commission, which will tell us nothing more than the conference of officials told us.
– We cannot put a Bill through defying the States.
– Why cannot the Treasurer get into conference with the State Treasurers, who are themselves complaining’ about duplication? What do we want two different Taxation Departments for?
– For the first time in the history of the whole thing we have reached an agreement now, so far.
– I believe the trouble is that the States say they ought to collect the whole lot, because they can do the work better and cheaper than the Commonwealth. The Commonwealth Department has to collect the entertainments tax, and a number of other taxes which cost a good deal of money to bring in, but the States do not take that fact into consideration.
– I will tell the honorable member directly what the real trouble was. in my opinion. It is very simple.
– I am glad to hear it. It may be simple to the right honorable gentleman, but before he can elucidate the point, he will probably get the information from the very officers who, in my opinion, ought to be able to give it direct to the House. Why should we not have the information given to us when a Bill like this is brought down ? There are many things I should like to do in this Bill. x but what is the use of putting a spoke in here and a spoke in there, seeing that, after all, the Bill is a stop-gap ? It is of no use attempting to put in any of the different proposals which -have been made to-night, some of which I am in favour of. I represent a community of fanners and graziers, and I maintain that the farmers and graziers are entitled to an average system of incomes, but why should not the business men have it too?
– They are just as much entitled to it as the others.
– A system of averages has been found to be the best in countries which have had a long experience of income taxation. We are only novices at it. Why not apply the average system to all men who have to pay income tax? The exemption has been spoken of, but the difficulty there is that it opens the door to let a number of people out. According to statistics, and the figures quoted by the last speaker (Mr. Pell), a lot of people do not pay income tax, but every day in the papers we see that the officers are on their tracks. Fines of £20, £50, and £100 are recorded, but the whole system is unsatisfactory. I believe the income tax is the fairest of all taxes. We cannot have anything fairer, so long as its incidence is right, and so long as we have a decent Act. A better Bill than this could be framed and put into force by schoolboys, to say nothing of a Parliament. Why not have common-sense legislation on an. equitable basis that we can understand ? I am in favour of having one Income Tax Department, and that should bc the Federal. After all, we know the time is coming when these duplications will have to cease. What a retrograde step it would be to go back to the rule of the States! The change must come, because we all know that we cannot go on indefinitely with seven different Governments, and seven different Governors. It is only a. question of time. Why cannot ‘we adopt the best of the seven systems ? Instead of bringing in this stop-gap legislation, why did not the Treasurer have the courage to say to his officers, “ We are going to alter the income tax system. Let us bring down a Bill on proper lines that the people and. Parliament can understand, and that I myself can understand and explain”?
– Is that gun loaded ?
– I am quite prepared to “ dish into “ this Government when I think they deserve it, but before I go too far, I have to consider the awful alternative, which appalls me. I am- in the unfortunate position of being obliged to vote for this Bill to support the Government. They are on the right” track, because they want more money. We must pay what we owe, and the income tax is a good way to obtain a large part of what we need. The people are pleased that the increase was only 5 per cent. Most of them expected 10 per cent, at least, and it was a ‘pleasant surprise to many business men and others that I have spoken to to find the increase so moderate. I guarantee that the honorable member for East Sydney (Mr. West), who, we know, is a financial expert, cannot explain the curve system . to me. He does not know where he is on it.
I appeal to the Treasurer (Sir Joseph Cook) to drop these Commissions. I believe the Taxation Commission is a very good one; but if I required suggestions I would rather appeal to men who are dealing with such matters every day.
– The Department says that, this Bill is necessary.
– Because it is necessary to raise money.
– And if we do not get it in this way, we must find it somewhere else.
– We must find the money, and those with large incomes should be prepared to find it.
– Make the taxation equitable.
– Who is to say what is equitable? Those with big incomes should be made to pay; and when we get above the living line, what does it matter at what rate the income tax is levied if the taxation is justified? The time has arrived when all our taxation should be put on a fair basis. At present, the principles of our income taxation are neither satisfactory nor understandable, and everybody laughs at the whole thing.
– You may laugh, but you have to pay !
– But it would be more satisfactory if we understood the principles on which the taxation was levied. People grumble because, perhaps, they think that the money so gathered is wasted; but who is to decide what is waste ? What, for instance, does the honorable member for Dampier (Mr. Gregory) say about the expenditure at Canberra ?
– It is wasted, of course.
– Then what about that foolish measure, which was rushed through so cleverly by the Government, to provide silos in Western Australia ? Perhaps the best way to settle the question is to ask whether the proposed expenditure will pay; and I am just as confident that the expenditure at Canberra will pay as I am that the silos will not.
– Remember, a number of people denounced the grant to Tasmania as waste.
– Those denunciations are nothing to what the Treasurer will hear in the future, though there should be no more trouble about Tasmania, as it is understood that a syndicate will be formed to purchase theisland. As I say, I am in the unfortunate position of having to vote for this stop-gap measure? I believe we could alter it as to make it more acceptable, but to deal with the question of taxation in a piecemeal way is hopeless. We may have some result from the Commission, though I am afraid it will meet the same fate as other Commissions.
– I do not think so, for I believe we are on the right track.
– I hope we are. I regret that the Treasurer did not call a round-table conference with his principal officers, so that he might have had some common-sense proposals to place before us. Why should we go on passing legislation with which no one is satisfied, and which everybody regards as absurd ?
.- The honorable member for EdenMonaro (Mr. Austin Chapman) says that no one is satisfied with our income tax system; but did any one ever know a taxpayer who was satisfied ? It is necessary to introduce a Bill of this character every year in order that the income tax may be collected, hence the measure before us. I must say, however, that I do not think the Treasurer (Sir Joseph Cook) has taken much interest in the question of taxation. He knew that he had to do something, and he has introduced a measure which he thinks will prove plausible to some people at any rate, but the result can only be to create widespread discontent. If the Treasurer were really in earnest, he would make himself a student of taxation (principles, and adopt the best means of removing the incubus on Australia. There is one point to which I would like to refer, namely, the tax imposed on the incomes of public companies. Some years ago there was some trouble in Sydney in connexion with this matter, and it was decided that public companies should pay at the rate of 2s. 6d. on all undistributed profits. My opinion is that the late Commissioner, who was then in. office, had no idea of the extent to which proprietary and part proprietary businesses were being turned into public companies in order to take advantage of that rate of 2s. 6d. What these companies are doing is to take the undistributed profit of one year, and with it to water their capital, and this to their great pecuniary advantage. So widespread is this practice that I doubt whether there is one company which has not doubled its capital, and which should pay a much larger rate than 2s. 6d. On more than one occasion I have suggested that in this regard we should follow the example set by Great Britain when large sums of loan money were in circulation during the war.
– Why did you not raise your voice about it ?
– I did, but, unfortunately, the press of Australia, in the interest of public companies, take care that no words of mine shall go beyond this Chamber.
The honorable member who has just interjected has advocated one uniform system of collecting this taxation, and that suggestion has been made frequently. It has not been acted upon simply because during the last few years we have had no one in the position of Treasurer strong-minded or courageous enough to deal with the matter; indeed, if there had been a Treasurer desirous of doing so, he would not have obtained the support of his Government. In order to have one uniform system’ we must either take away from- the States the right of direct taxation, or out of the income tax collected return to each State a per capita amount. This is an arrangement that could be easily made, with the result of rendering our taxation much more equitable than at present.
– Will you pledge yourself to do that when you are Treasurer ?
– I will if I have the opportunity. We must remember that, although this is a National Parliament, there are many honorable members who have not sufficient national spirit to fight the State-righters in the State Parliaments, and who are willing to do an injustice to the people of Australia in order to keep a Nationalist Government in power. When an appeal was made to the country in 1910, there was a desire on the part of the Fisher Government and the party behind it to get rid of the “ Braddon Blot,” which had been in serted in our Constitution in the first instance merely as a temporary expedient. The late Lord Forrest favoured achieving this end by agreeing to refund to the States 25s. per head out of our Customs and Excise duties in perpetuity, whereas the Fisher Government desired to limit that payment to a period of ten years, and this was approved at the elections. At a later stage Mr. Watt, who was then Treasurer in the present Government, attended a Conference of State Premiers, at which he proposed that the States should be annually deprived of 2s. 6d. per capita until the amount being paid at present had entirely disappeared. I was absolutely convinced of the late Treasurer’s sincerity in this matter, and was firmly of opinion that his proposal would have been adopted. But the Government had not the courage of their convictions, and just before the last election, the ‘Prime Minister (Mr. Hughes) publicly announced that he was not in agreement with his own Treasurer upon this matter. Consequently the reduction of 2s. 6d. per capita did not materialize. My own idea is that the National Government should have exclusive control . of the revenue derived from indirect taxation in the form of Customs and Excise duties. But nobody upon the Treasury benches has the courage to give effect to that programme. Ministers think more of their political skins than they do of the adoption of right principles.
To-night, my Leader, the honorable member for Yarra (Mr. Tudor) invited our attention to the question of exemptions’. But his appeal fell upon deaf ears. Very few members indeed exhibited the slightest interest in his remarks. Most of them walked out of the chamber, whilst the Treasurer, with a bland smile, endeavoured to induce us to pass the Bill. The honorable member for Yarra stressed what must be perfectly obvious to every man who, gives the matter a moment’s consideration, namely, that if £156 was a fair general exemption in 1911, and if £13 was a proper deduction to allow for children under the age of sixteen years, those amounts need to be considerably increased to-day owing to the greatly reduced purchasing power of the sovereign. I need hardly remind honorable members that Great Britain has adopted exemptions very much larger than are our own. There this question has been very closely investigated by a Royal Commission, which in its report says -
Our proposals will have the following results : -
No wholly earned income will pay tax if it does not exceed - £150 in the case of a bachelor. £250 in the case of a married couple with outchildren. £350 in the cans of a married couple with three children.
No wholly earned income will be charged at more thanhalf the standard rate of tax if it does not exceed - £400 in the case of a bachelor. £500 in the case of a married couple with out children. £600 in the case of a married couple with three children.
No wholly invested income will pay tax if it does not exceed - £135 in the case of a bachelor £235 in the case of a married couple with out children. £315 in thecase of a married couple with three children.
No wholly invested income will be charged at more than half the standard rate of tax if it does not exceed - £360 in the case of a bachelor. £450 in thecase of a married couple with out children. £540 in the case of a married couple with three children.
Then, examples are given as to how these payments pan out. That Commissionwas composed of men who possess an intimate knowledge of income tax matters - a much greater knowledge than we can possibly possess, seeing that the first British income tax was imposed as far back as 1842.
The income tax was originally imposed in Great Britain as a war tax, and, although it has never been entirely repealed, it has been altered from time to time to meet the circumstances of the Treasury. At times the rate of tax was small; at other times, when the need for revenue was greater, as for instance during the period of the Boer War, a considerable sum was raised by this means, of paying the cost of the war. The Government would be justified in increasing the exemption. Unfortunately, the matter of imposing taxation is entirely within the hands of the Government. That is an old constitutional practice, established no doubt as a safeguard against any crank reducing the amount of tax, and thus leaving the Government with insufficient funds with which to carry on the administration. A wise Government, however, will raise only sufficient money as is necessary to carry on the affairs of State. A Government which raises more money than is necessary shows that it does not understand the principles of finance, because it is extracting more money from the people, byway of taxation, than is justified. That policy is not conducive to the well-being of the country.
For some time past honorable members have been asking the Treasurer to explain the curves of the second and third degrees. These curves were brought under the notice of the British Taxation Commission, and also an American Commission. Both admitted that this is the most just system of levying taxation. Under the system first adopted by this Parliament, and still in operation in the States, a man is taxed, say, eightpence in the £1 on an income of £700, and if Ms income is a few pounds in excess of that amount the rate of tax is increased a penny. That system is not just. The British Commission admittedthat, although the curves were not understood by the ordinary citizen they worked out with absolute accuracy and justice to the taxpayer. They represent the most equitable system of arriving at the proper amount of taxation to be paid by each individual.
Reverting to the matter of exemptions. In the United States there is a general exemption of £500. On incomes from £500 to £1,000 the rate is increased on. a gradual incline. On incomes above £1,000 the incline becomes steeper, and on incomes above £5,000 the rates rise very suddenly. That is a good way of levying taxation. The citizen should be allowed an income free from taxation - except Customs and Excise duties - sufficient to buy for himself and family the necessaries of life. I notice that the Minister for Trade and Customs (Mr. Greene) told a deputation, a few days ago, that the present tariff is designed for revenue-producing purposes rather than as a protective medium. That affords me a further justification for endeavouring to get the amount of exemption increased.
– The honorable member has tired out everybody. Nobody is listening to him.
– I am sorry that the Committee displays such a lack of intelligence. Taxation is the most serious matter with which Parliament has to deal, and yet very little attention is paid to the subject. That fact emphasizes the necessity for a change of Government. Will the Treasurer agree to report progress?
– We shall treat the honorable member as he treats everybody else. No man in the House has less consideration for others than he has.
– No honorable member representing a big constituency speaks less frequently than I do.
– Here is a man who has been talking for a solid half-hour, and now asks for an adjournment so that he may continue.
– I may tell the Treasurer that only a man of ability and knowledge can address the House for half-an-hour.
– After that yon may have the adjournment.
House adjourned at 10.11 pm
Cite as: Australia, House of Representatives, Debates, 28 September 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19200928_reps_8_93/>.