8th Parliament · 1st Session
Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 2.30 p.m., and read prayers.
Statement by Major-General Sir charles Rosenthal - Appointment of Successor to Mr. Fisher.
– I desire to ask the Prime Minister whether he has observed a paragraph in to-day’s issue of the Age, reporting that at a meeting held in Sydney -
Major-General Sir CharlesRosenthal said that Australia must have populationbefore she could develop or defend herself. If we doubled our population by bringing out suitable immigrants we would halve our war debt. The High Commissioner in London was a nonentity inhis position. Mr. Fisher had never taken any interest in Australia since he had been in England…
Major-General Rosenthal is mentioned as likely to be appointed Military Commandant for the State of New South Wales. Is it not possible for the Government to take action to prevent persons occupying high official positions from making assertions of the kind? My knowledge of Mr. Fisher satisfies me that his standing in the community, and his reputation as a reliable man, are equal to those of any man in Australia.
– I have not seen the paragraph, and, therefore, cannot express an opinion in regard to it. I see it is stated that the speech to which the honorable member refers was made at a meeting held under the auspices of the Church Social Campaign. Most remarkable statements are made from time to time by different people, and if I took notice of one of them I should have to take notice of all. I fear that I am not the man to carry on such a business. I am not my brother’s keeper. This is a free country, where every one apparently is inclined to say just what he thinks. I have noticed statements made by different people - including Mr. Garden, for example - with which I do not agree. I agree with Major-General Rosenthal that we must have a larger population. As to the statement made by him concerning Mr. Fisher, I can only say that I have had the honour of Mr. Fisher’s intimate acquaintance and friendship for many years, and am sure that he takes the very keenest interest in Australia. I certainly do not propose to stop people, merely because I do not agree with their views, from saying anything that occurs to them. If any statement calculated to create disorder is made, however, I must take notice of it. I read in the newspapers that the other evening, during my absence from the House, the honorable member for Grampians (Mr. Jowett) made a statement in regard to subsidizing dances, or something of the sort. I have also read what Mrs. Stein, the Acting Lady Mayoress of Melbourne, has said about dances, and putting two and two together I am bound to say that the remark made by the honorable member for Grampians was not a very proper one.
– But the honorable member for Grampians did not reflect upon a public official. Mr. Fisher is not hereto defend himself.
– The honorable member for Grampians did not reflect upon a public official, but he suggested a course which, if followed by honorable members of this House, would be most immoral. I do not go about embracing women.
– Since reference has been made to the High Commissioner’s office, may I ask the Prime Minister whether he is in a position to make a statement to the House as to the appointment of a successor to Mr. Fisher as High Commissioner?
– Yes. I have a statement to make, and it is that at the proper time I shall make a statement.
Imports from Italy and France.
– Has the attention of the Minister for Trade and Customs been called to a paragraph in the press stating that large quantities of goods imported from Italy and France are in bond in Australia, and are likely to be returned to those countries owing to the dilatoriness of the Government in coming to a determination on the question of foreign exchanges in relation to the valuation of goods for Customs purposes?
– Yes. The Government are awaiting an opportunity to introduce the necessary legislation.
Mr.W ATKINS.-In reply to a question addressed to him yesterday by the honorable member for Hunter (Mr. Charlton), the Prime Minister said that a Board had not yet been appointed to fix the selling price of coal in Sydney, having regard to the increase in hewing rates granted to coal miners. According to today’s newspapers a Commission, consisting of Messrs. C. Hibble, H. Ling, and A. Jobson, has been appointed, and held a preliminary meeting in Sydney yesterday. I desire to ask the Prime Minister whether he misunderstood the question put to him, and whether the Commission to which I have referred has been appointed for the purpose?
– Messrs. Hibble, Jobson, and Ling are the members of the Commission. . Their functions are to determine what increase, if any, in the price of coal is justified by the increased wages paid to the miners. I do not know whether they have held a meeting, but their appointment has been approved, and they constitute the Commission which will settle the matter if official sanction be given. -If this increase be premature, the honorable member may accept the assurance that it is premature only in so far that it anticipates the fact by, say, a few hours. The functions of the Commission are quite limited ; they have to determine how much the increased wages justify an increase in the price of coal. .1 have no doubt that by the next miners’ pay-day we shall bo able to declare, at any rate, an interim price of coal. While on my feet, I might say that, in anticipation of the Commission’s . decision, I have taken it on myself to accept Mr. Hibble’ s recommendation that the prices for oversea coal shall be those he considered fair until the Commission has otherwise determined. Of course, the coal has to be sold on the ship, and when the ship takes it away the transaction is completed, and cannot be undone. I think I have covered the whole ground.
– Will the decision of the Commission be final as to the price the people of Australia will pay for coal, or will this House have an opportunity to review it?
– ‘The House can have an opportunity to review any decision, but the gentlemen engaged in this work are expert accountants, and their function is very simple. It is to determine how much the existing price of coal shall be added to as the result of the increased wages paid to miners. The House cannot, by any review, no matter how prolonged or meticulous, escape the fact that if more wages are paid for hewing coal the product must cost more. But the House can h’ave an opportunity to review the decision, and if the House says coal shall be free, I shall be perfectly satisfied, because I am a consumer.
Salaries of Clerks
– Has the attention of the Treasurer been called to the fact that a log has ‘been declared on behalf of the Bank Clerks’ Association of New South Wales? I wish to know whether any decision of the Arbitration or other Court, fixing the wages of bank clerks, will apply to the clerks employed in the Commonwealth Bank?
– I am quite unable to say what the effect will be in the Commonwealth Bank. I should imagine, however, that the clerks of that bank will be in, at least, as good a position as the clerks of any other bank. In any case, I do not control the Commonwealth Bank clerks; I have nothing whatever to do with them.
– Has the PostmasterGeneral paid the long-expected extra allowance to country mail contractors on account of the drought?
– I believe the allowance is being paid to those who have applied foi it.
Averaged Income Tax Assessments
– Can the Treasurer say whether he proposes to take steps to .accede to the request made on behalf of primary producers that their income tax assessments shall be averaged?
– I shall, shortly, have something to say on that matter, when speaking on the Income Tax Bill.
Subjects for Discussion - Method of Election
asked the Prime Minister, upon notice -
If, in connexion with the proposed Convention for the amendment of the Commonwealth
Constitution, he can inform the House regarding the following points: -
In view of the conflicting decisions re garding the respective powers of the Commonwealth and the States, and in view of the present serious overlap ping of their respective powers and functions, will the matters to be discussed at the Convention include the delimitation of the overlapping powers of the Commonwealth and of the States, and. thus deal with the diminished efficiency and unjustifiable expenditure which are alleged to be due to both the Commonwealth and the State Governments claiming and exercising conflicting authority in matters of legislation, administration, and taxation, to the grave disadvantage of the citizens of Australia?
Will the method of election to the People’s Convention be that of proportional representation within each State, namely, a method by which each State shall return an equal number of delegates, such delegates to be elected by the people underthe method of proportional representation ?
– The method of electing representatives to theproposed Convention, and the matters to be dealt with thereat, willbe decided by Parliament when the Bill authorizing the Convention is before the House. As I have previously indicated, the measure will be introduced as soon as the state of public business permits.
Mr.FENTON asked the Minister for Home and Territories, upon notice -
Whether an arrangement has been come to between the Commonwealth and the States’ Electoral Departments in respect to the compiling of electoral rolls for both the Commonwealth and the States, so as to prevent the duplication that has existed for some years?
If such an arrangement has not been made, will the Minister do his best to expedite the bringing about of this desirable reform?
– The answers to the honorable member’s questions are as follow: -
asked the Minister forWorks and Railways, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and 2. The sum of £3,298 was paid to Mr. W. B. Griffin for plans for remodelling the General Post Office, Sydney. He is not a member of the architectural staff of the Public Works Branch. It he had been, he would not have been entitled to fees. A sum of £659 was paid to Messrs. Webster and Gooding, quantity surveyors, for a bill of quantities in connexion with Mr. Griffin’s plans. 3 and 4. The architectural staff is thoroughly; competent, and is constantly engaged upon the design, construction, or alteration of somewhat similar buildings.
asked the Minister representing the Minister for Repatriation, upon notice -
– The Commission advises as follows : -
asked the Minister representing the Minister for Repatriation, upon notice -
Whether he will state -
The number of saw-mills purchased in Victoria ?
From whom purchased?
At whatprice each was purchased?
In what districts?
The area of each purchase?
By whom they were valued?
– The Commissioner advises as follows: -
The following paper was presented: -
Debate resumed from 2Sth September (vide page 5046), on motion by Sir Joseph Cook -
That this Bill be now read asecond time.
.- When I was granted leave to continue my remarks on Tuesday evening there seemed to be a tendency on the part of the Government to rush through the House this taxation proposal. No more important matter than taxation can come before the Legislature. Parliament may be likened to a dentist about to draw the people’s financial teeth, but no person would engage an ordinary dentist unless he was a man who thoroughly understood his profession. Yet there are members in this Chamber who give no thought to the question of taxation, and are ignorant of the principles upon which the raising of revenue from the people is based. The late honorable member for Hume (Mr. Falkiner) first brought before this House the suggestion that farmers should pay taxation on their average income over a period of three years. If honorable members will analyze that proposal they will find that there is really nothing in it. I do not think the farmers are anxious to evade their just share of the burden of taxation. I shall show the fallacy of the averaging proposal by an illustration. Suppose that a farmer had prosperous seasons in the years 1917 and 1918, and that his income in those years was £500 and £400 respectively. In the third year he might be affected by drought, and he would have no taxable income. Under the present system the farmer would pay taxation on an income of £500 in 1917, on an income of £400 in 1918, and nothing at all in 1919. The proposal that has been made on behalf of the farmer is that the income of the three years shall be averaged, and that he should pay on an income of £300 per annum. The total taxable income for the three years is the same under both systems. It must be borne in mind that nobody pays income tax until he has earned an income. In that regard the farmer is in a vastly better position than is the city business man or manufacturer, who has to pay Customs and Excise duty on his raw material before he can get the goods with which to earn an income. The farmer’s trouble is that he is often called upon to pay in a bad year taxation on the income be earned in the preceding two prosperous years, and in that respect is no different to other taxpayers.
– Very often the farmer experiences two bad seasons, and then one good one.
– His trouble is that in the bad year he has to pay the tax on his income for the good year. The farmers are being deluged by the averaging proposal, which will not be of any benefit to them at all.
Anybody who is attending to the interests of the farmer will admit that the exemption affects him as much as anybody else. The citizens to-day are required to pay a much larger amount in Customs and Excise duties than they did in 1911, when the amount of the present general exemption was fixed. In some instances Customs and Excise duties have increased from 40 to 50 .per cent. ] t is an old axiom that everybody should be taxed according to his means and ability to pay. If the averaging proposal is adopted, and the farmers do derive any benefit from it, the rest of the community will be required to make good the loss of revenue. In other countries the exemptions are higher than that allowed under the Commonwealth Income Tax Assessment ‘ Act. I see no reason why that should be so. The people of Australia claim a higher standard of living than do the people of other parts of the world, and we should exempt from taxation the amount of income necessary to maintain that standard. All taxation is passed on to the working or industrial classes, but none so easily as Customs and Excise duties, which are an indirect impost that everybody must pay.
The standard of living is fixed at the absolute minimum upon which a human being can exist. The exemption in connexion with income taxation was fixed at the low amount of £156 by a Labour Government which I had the honour to support in this House. But the Government did not realize at that time what was about to befall the world, although the war clouds were gathering on the horizon. The then Treasurer, in his wisdom, decided upon the lowest basis of exemption considered practicable under the conditions then existing. Honorable members are very familiar with the cost of living to-day, and with the tremendous increase since prior to the war. The proposal which I ask the Treasurer to accept is based upon the series of exemptions recommended by the British Commission dealing with this subject, and my figures are exactly the same as those adopted in Great Britain. They are virtually the same also as the exemptions existing in Canada and South Africa. In fact, in almost every civilized country to-day the taxation exemptions have been raised in keeping with the enormous increase in the cost of living. I am quite sure that the large majority of thinking people will indorse my request. Even those fortunate folk who are receiving more than an average income will agree that the industrial section of the community is having a particularly hard time, and that there should be a considerable increase in income tax exemption in order that they may be permitted to retain sufficient of their inadequate wages to maintain life in these difficult days. If the Government continue to extract a large sum from each working man in the community the injury will not fall upon the individual and his family alone, but will be felt throughout Australia.
The matter of exchange has been referred to. There is only one practical way in which this factor in keeping up costs can be dealt with, and that is to drastically cut down the importation of unnecessary commodities. Despite the fact that the people generally are poorer than ever to-day, there is a vast amount of extravagance, particularly, of course, among those who are making huge business profits, and have plenty of money to spend. Why should a man want a velvet collar on his overcoat nowadays? If people were satisfied with good, plain materials, and were to “ cut out “ the purchase of luxuries, the time would be much nearer when Australians would find themselves back again in that happier state which existed before the war.
I ask the Treasurer to accept the following scale of exemptions - which, I again remind him, are not my own figures, but are those which were accepted in Great ‘Britain, upon the recommendation of the Commission : -
For bachelors, £150 exemption.
For married persons without children, £200 exemption.
For married persons with three or more children, £350 exemption.
These proposed exemptions are based upon equity, and represent an honest endeavour to make the burden of taxation bearable.
– There will be widespread dissatisfaction at the Government’s failure to increase the income tax exemption beyond £156, and also the deduction of £26 for. each child. Personally, I think the exemption should be as high as £300, but, at any rate, I hope that before the Bill passes the Government will see their way clear to meet the very widely expressed feeling among the community that the existing exemption is altogether too low. In my opinion, the amount should be nearly double what it was five years ago, because, since the income tax was first imposed, with an exemption of £156, the cost of living has gone up by leaps and bounds; and since the Government have not done anything in the direction of fulfilling their vague election promises to reduce the cost of living, which so seriously affects the great mass of the people who are living to-day on the bread-and-butter line, the least they can do is to increase the income tax exemption. “When I was speaking recently on the Public Service Arbitration Bill, I mentioned that about 14,000 public servants in this country were compelled to accept a wage below what is really the basic wage in relation to the present cost of living; and I venture to say that, outside the Public Service, the numbers are still more startling. In fact, it is quite safe to say that at present a bare living allowance is not less than £220 per annum. Yet the income tax exemption is still maintained at what it was five years ago.
Some time ago, this House unanimously agreed to a motion submitted by the honorable member for Lilley (Mr. Mackay) that, for income taxation purposes, the incomes of primary producers should be based upon an average of five years’ earnings. I could imagine no one cavilling at such a proposal, and I am sure nothing has transpired since that motion was agreed to unanimously which would cause any honorable member to change his views upon the matter. But it is surprising to find that in this Bill the Government have made no provision whatever to meet the expressed will of the House in this regard. When the Treasurer (Sir Joseph Cook) was announcing the appointment of the Taxation Commission, and the honorable member for “West Sydney (Mr. Ryan) interjected, “ That is a sop to prevent further action by the primary producers,” implying that it was a means the Government had adopted to get out of their difficulty in regard to giving effect to the unanimous wish of the House as expressed on the motion moved by the honorable member for Lilley (Mr. Mackay), the right honorable gentleman replied, “ The honorable member always suggests something sinister in connexion with any proposal by the Government.” He threw cold water on the suggestion of the honorable mem- . ber for West Sydney that there was a motive behind the appointment of this Commission, or that it was really a move on the part of the Government to shirk their responsibility in regard to the matter of assessing primary producers’ incomes on five years’ earnings. The impression he conveyed, to my mind, was that -this question of assessing primary producers’ incomes -was not to be intrusted to this Commission, but was to be treated as a separate matter altogether. However, seeing that there is no provision in the Bill to give effect to the wish of the House in this direction, one is led to conclude that the honorable member for West Sydney had ample reason for suggesting that the real object of the Government in appointing the Commission was to avoid the difficulty created by the unanimous decision of the House.
– Does the honorable member believe that this Bill affords .x suitable opportunity for dealing with that matter?
– I do. We ought to take the first opportunity afforded us to carry out the unanimous wish of the House. I do not think that the honorable member for Lilley is of the opinion that it is a matter that ought to be thrown upon the shoulders of the Royal Commission. I could quite understand that matters upon which honorable members were not in agreement, or upon which the House required some light or leading, should be intrusted to the Royal Commission for investigation ; but this was something upon which our minds had been already made up, and upon which no difference of opinion existed among us ; and this Bill affords us the very best opportunity for carrying it into effect. Since the debate took place here upon the honorable member’s motion, I have received numerous letters from primary producers in my electorate and elsewhere, expressing the desire that Parliament should take the earliest opportunity of giving effect to the decision of the House. A farmer in New South Wales - which, owing to two years of most disastrous drought, is in a different position from that of the other States - has written to me stating that for the twelve months ending June, 1918, he made a profit of £2,000, whereas for the twelve months ending June, 1919, he went to the bad to the extent of £1,500, and for the twelve months ended June last showed a further loss of £1,000. Thus, during the two drought years, instead of making a profit out of his operations; he suffered an actual loss of £2,500. He points out rightly, but quite unnecessarily, since we are all aware of the position, that if the coming season is a good one, as he expects it to be, no allowance will be made in assessing his income tax in respect of the twelve months ending June, 1921, for the losses suffered by him during the disastrous years of drought.
– It is grossly unjust.
– There is no doubt as to that. This farmer is carrying on operations in a small way-
– His position is practically that of the primary producers all over Australia.
– My complaint applies more particularly to New South Wales, where the farmers have had to contend for two years with a most disastrous drought. Another primary producer in New South Wales writes to me -
My position is this : I am assessed on income for 1919-20, £1,113. Tax payable, £54 14s.11d. This year I have to borrow £500, and I even have to borrow what is necessary to pay this tax - the amount of £54 14s.11d.
The system is so inequitable and unjust that we should avail ourselves of the opportunity which now presents itself to remedy it.
– There is an opportunity existing under the law as it stands for that man to obtain relief if he likes to apply for it. He can have his case reviewed.
– Under section 64 of the Act.
– Those who make such applications are put to a very great deal of inconvenience and trouble, and in the end do not obtain much satisfaction. Our object should be to make the law so clear and straightforward that the people will know exactly where they stand. A debate which took place in this House a few weeks ago revealed the fact that honorable members werepractically unanimously in favour of so amending the Income Tax Act as to provide that in the case of primary producers assessments should be based on a five years’ average. We have an opportunity to amend the law in that direction to-day. We should insert such a provision in this Bill.
– Not in this Bill.
– What objection can there be to such a clause?
– I can give the honorable member quite a number of reasons.
– Will the right honorable gentleman bring down a Bill to give effect to what is evidently the view of the House ?
– When I am allowed to speak,I will tell the honorable member.
– It is not necessary to bring down another Bill for that purpose. We could insert the necessary provision in this Bill.
– Here is a chance for a bit of mischief. Go ahead! It is not the straggling taxpayer of whom the honorable member is thinking.
– We cannot make a suggestion to the Treasurer without being told that we have some sinister motive. When the right honorable gentleman was announcing the appointment of the Taxation Commission, the honorable member for West Sydney (Mr. Ryan) interjected that that would be a means of giving effect to the proposal for a five years’ average basis in the case of primaryproducers, and was told, in reply, that he had some sinister object in view.
– This is tedious repetition.
– The Treasurer does not like this criticism.
– I do not like this waste of time.
– The primary producers will not consider it a waste of time on my part if, as the result of my representations, they secure a much-desired amendment of the law.I feel so strongly on the point that, unless the Treasurercan show that it is unnecessary, I shall move the insertion of a new clause in this Bill.
– The honorable member knows as well as I do that this is merely a rates Bill. It is not a Bill to alter the general income-tax law.
– I see no reason why we should not make the amendment which I have suggested, and also insert a clause raising the exemption as it should be raised. The exemption which was just and equitable five years ago is not equitable to-day. I represent a portion of Australia where thousands ofprimary producers have been ruined by the last two years of drought.
SirJosephCook. - If those men have been ruined, they need not pay any income tax.
– What is the use of making such a statement? I have just read a letter from a farmer in the drought area, showing that he has been called upon to pay £54 14s.11d.
– I do not care what he says. I know cases where men so situated have obtained relief.
– The farmer to whom I havereferred tells me that the Deputy Commissioner of Taxation gave him until the 24thMay last to pay £54 14s.11d.
– Why did not he avail himself of section 64 of the Act, and obtainrelief?
– Why quibble! Why not have astraightforward clause in this Bill providing that primary producers shall be assessed upon the five-years’ average basis?
– That “ quibble “ happens to bethe simple truth. It is set out in plain terms in the Act.
– And yet the Deputy Commissioner of Taxation isapparently unaware of the simple provision to which the Treasurer refers, since he gave this man notice that he must pay his income tax by a certain date.
– I was not aware of the provision in question until a few days ago.
– Evidently the Deputy Commissioner of Taxation is not aware of it.
– He probably knows of it, but he never tells the taxpayers of it.
– That is a roundabout way of doingbusiness.
– It is; it shows that a certain amount of “ covering up “ is going on.
– Here is the Act; read itandseehow theprovisionas to relief is “ covered up.”
– The honorable gentleman canread it to the House when he is making his statement. Ishallbe pleasedto hearit.
– Meantime go on making all these fearsome statements of yours. No doubt they will be published in thelocal Thunderer, and the honorable member’s constituents on reading them will say, “Look what Parker Moloneysays. He is the boy!”
– It happens that all the “ thunderers “ in my electoratesupport theright honorable gentleman’s party.But, despite what they or the Treasurer may say, I always win. I carenot what statements they make ; my only desire is that justice shall be done to a great section of the people of this country who have been practically ruined by the drought, and who want to know exactly where they stand in the matter of income tax.
– And I desire, just as much as the honorable memberdoes, that justice shall be done tothose men.
– The righthonorablegentlemanwillhavean opportunity to prove thesincerity of his professions. Unless he can prove that my suggestion is unnecessary, I shall move in Committee the insertion of a new clause giving effectto the expressed desire of this House, that income tax in the case of primary producers shall be based upon a five years’ average.That will place the matter beyond all doubt.
Mr.BRUCE (Flinders) [3.32].- This Bill, as I understand it, is really a stopgap measure designed to carry onuntil such time as questions relating to the whole method of income-tax assessment and how the burden is to be borne can be determined. The Government have come to the conclusion that, in order that a proper determination may be arrived at, the whole matter must be inquired into by a Taxation Commission. With that decision I am entirely in accord. Various statements have been made during this debate to the effect that we have allthe information necessary to enable us toplace our income-tax lawsin orderthat there isno need to hesitate, but that we can go ahead now and so recast our income-tax legislation that it will operate justly and equitably. I entirely differ from that view. I would remind honorable members that this is probably the most difficult question that we have to consider, and involves more detailed and technical knowledge than the majority of subjects with which we have to deal. I have a good deal to do with income assessments in both Australia and Great Britain, and in respect of certain types of assessments I rather imagine I can pose as an expert. “When I go outside my own line, however, I am as helpless as a child in considering how the assessments should be dealt with, and the basis upon which the returns should be made. That being so, .1 most certainly consider that we can only hope to have the whole of our income-tax ‘ legislation placed on a just and equitable basis as the result of careful inquiry by the Taxation Commission. The Commission, having regard to its personnel, has an intimate knowledge of these matters, and can .gain any further knowledge it requires by the examination of witnesses. In this way we shall be able to secure a decision that will result in the burden of taxation that has to be carried being placed equitably on the shoulders of those best able to bear it.
We have had several references to the uselessness of Royal Commissions, but I am inclined to think we may have the same experience as in Great Britain. The British Income Tax Commission has issued its report, and any one who has read it must agree that it is truly a mine of information. Its recommendations are based on sane and sound principles, and, above all, they are directed to placing the burden upon the shoulders of those best able to bear it.
– It is a monumental report.
– The fact that the Chancellor of the Exchequer, in introducing the Budget in Great Britain, gave a special meed of praise to the work done by the Chairman and the Commission is a good augury for the results we may hope to .obtain from a similar inquiry in Australia. In Great Britain the problem is a very difficult one; but here, strange as it may appear, it is almost more difficult. Here questions have -to be considered in view of Great Britain’s decision regarding double taxation and similar matters. I defy any one who has not considerable knowledge of these questions to express an opinion as to what is a fair and equitable arrangement to come to.
As to double income tax, .we have a certain obligation; and I would like to ask the Treasurer whether the question has been considered, and whether we propose to take our share of the burden, the major portion of which has already been shouldered by Great Britain. Great Britain has undertaken to halve the burden of taxation, provided that elsewhere within the Empire a higher rate is being paid, or a rate which brings the amount paid by the taxpayer up to the maximum amount. But Great Britain will not go further than give relief to the extent of half the tax. The Chancellor has stated that Great Britain will do this; and the report of the Royal Commission recommends that the double income taxpayer shall be placed on equitable terms with the maximum payer in any part of the Empire, and that any further burden shall be borne by the Dominion concerned. But he made it clear that whether the Dominions are prepared to take any share of the burden or not, Great Britain is prepared to take her share.
– I thought you were going to say the Chancellor had made the whole thing very clear.
– It is a very difficult subject.
– It is as complex as can be.
– It is a complex subject, but I ask the Treasurer whether he has considered this point, and whether anything is going to be done. A simple example may, perhaps, make the matter clear. The rate of income tax in Great Britain is Ga. in the £1 for a company trading in Australia as- a British registered company, though the profits are all earned in Australia; and it also pays income tax in Australia. The British authorities gay that if such a company is paying an amount equal to 6s., they will relieve it to the extent of 3s., or one-half of the tax; and in Great Britain it will pay 3s. instead of 6s., provided it pays at least 3a. in Australia. But it might be that the company is paying here not 3s., but 3s. 6d. Great Britain, however, will only relieve the company to the extent of 3s., so the company will pay 6s. 6d. - 3s. in Great Britain, and 3s. 6d. in Australia. Great Britain suggests that as she has relieved the taxpayer of 3s., Australia shall relieve him of the 6d., and thus bring him into line; and, personally, I think that is a very equitable suggestion.
– If the corollary goes with it; that is to say, that we collect tax on incomes derived outside, in the same way as Great Britain does.
– I do not think that point arises at the moment. All they are attempting to do now is to see that, within the Empire, the taxpayer does not pay any more than I have indicated. Now, take the case of a British registered company, which does the whole of its trade in Australia. Supposing Australia gives relief to the extent of 6d. , such a company will pay 6s. in the £1 inside the Empire, while the Australian registered company would be paying only 3s. 6d. in Commonwealth and State taxation. The position is that the British registered company, with all this relief, will still pay 6s., as against the smaller amount paid by the Australian company.
– But if the British company registered in Australia, instead of Great Britain, it would pay the same rate as the Australian company.
– Companies may register in Australia, with the result that they are called upon to pay only one tax ; and that, indeed, is what companies are being driven more and more to do. So far as Australia is concerned, that appears, at first sight, to be a great advantage, but, as a matter of fact, it is really a disadvantage. While a company remains registered in Great Britain, it is simple enough, if it is a company of good standing, to raise capital for the development of Australian enterprises in Australia. But when a company registers in Australia it cannot raise capital in Great Britain unless in very exceptional cases; it is practically impossible to do so. The result is that such a company is driven to our own local money market. It is desirable, if we can, to create as many new enterprises as possible in Australia . and to that end we need a great deal of money. It is taken pretty well as an axiom that in the future we must finance our own Government expenditure, loan or otherwise; and with the demands for money for War Service Homes, repatriation generally, and in other directions, it will be very difficult to raise capital for commercial enterprises. It seems, therefore, a pity to do anything by our income tax law which may have the effect of making it almost impossible to obtain money from outside sources for those ordinary trading ventures.
The point raised by the Treasurer is, of course, a very material one.’ He says we are in a different position from Great Britain, inasmuch as Great Britain taxes all incomes, wherever derived, whereas Australia taxes only incomes derived in Australia. The principle that Great Britain operates on is that we have the protection of the British nation and the British Meet - that the British nation is behind us in our foreign enterprises - and for this we ought to pay. In Australia we take a different view, and this shows the necessity for a Commission to consider every phase of income tax assessment.
– Royal Commissions in the past have been the cause of much delay and of the shelving of projects, and, therefore, we are suspicious of them.
– That may be; but we have an example in the British Royal Commission, which did invaluable work. This is a question .in which we are keenly interested, and we are going to see to it that the report of the proposed Commission is in our hands within a reasonable time. If, as I anticipate, the report contains information that is valuable to us, we shall be better equipped to deal with this complex and difficult subject. That there are inumerable questions to be decided must be apparent to everybody.
Reference has already been made to the question of the collection of income tax at the source instead’ of from the individual taxpayer. That is an extremely important question; and it is very difficult to say which is the better system.
– While there is a progressive tax, each income should pay its proportion, and not be taxed at the source.
– That interjection shows how great are the difficulties to be faced, and how we must consider the whole position before we take any action. The honorable member says that, with a graduated income tax, the taxation should be obtained from the taxpayer, and not at the source.
– And that is the interjection of a man who thinks that all the big men should pay more, and not less!
– Hear, hear ! You do me no injustice in saying that.
– There are several considerations which make it very doubtful whether this taxation should be obtained from the individual. I havereferred to a hardship suffered by British registered companies; but with that hardship they have some slight privileges, one of which arises from the fact that we in Australia do not collect income tax at the source. All companies in Australia pay only on the undivided profit. This means that a British registered company trading in Australia, with, perhaps, the whole of the shareholders in Great Britain, pays 2s. 6d. income tax on its undivided profit, and on the balance, which possibly goes to people with large incomes, who should pay 3s.6d. or 4s. 6d., or even higher, instead of 2s. 6d., we receive only8d. by way of absentee tax. This case seems to show that there may be something in the proposalto collect the taxation at the source; the only trouble is that such collection may be beyond our constitutional powers, the persons concerned being outside our jurisdiction. To-day in Great Britain, where the tax is collected at the source, super tax is collected from the individual. A man with an income of over £2,500 a year pays 6s. in the £1 collected at the source for any shares he holds in a company, and then he has to put in his own return, and, in addition, pay the balance due for super tax. The same thing should operate perfectly well here. If the whole basic amount were collected at the source, it would facilitate the collection to a certain extent, the balance being collected from the individual taxpayer. I do not want to be understood as advocating the collection of the income tax at the source; I am merely putting it that the question is arguable. For that reason, it is imperative that the matter should be very ‘fully considered, and we should have the greatest possible volume of evidence before we plunge into what might prove to be hasty and, possibly, ill-conceived legislation. We should realize how complicated the subject is. There is, for instance, the question of the assessment of husbands and wives. Thai was attacked by many people in Great Britain, where a husband and a wife are assessed upon their joint income. If the joint income is £6,000- £4,000 for the husband and £2,000 for the wife - they each pay tax at the higher rates applying to £6,000 as if the two incomes were one. It has been argued that the joining of the two incomes is an infringement of the rights of the individual woman citizen by merely making her an appendage to her husband. Onthe other hand, it has been contended thatthe process is fair and just, because the basis of income taxation is the ability to pay, and if there is an income of £6,000 in the home enjoyed by two people living together they are well able to pay taxation at the higher rates. I have indicated some of the questions that must be considered very carefully by the Commission.
I ask the Treasurer whether he will give attention to the matter of the relief which hasbeen suggested by the Commission in the case of double incomepayments. If that is his intention, I appeal to him to do it within the next few years. My request may sound humorous, but it is not so ; it is based on hard facts. The war profits taxation legislation in Great Britain and Australia contemplated an arrangement between the two Governments whereby whichever tax, British or Australian, was the higher should be collected and then apportioned between the two Governments. That was to have been brought into force by an Imperial Order in Council, and by whatever is the corresponding procedure in Australia. So far as I have been able to ascertain, nothing of the sort has been done, although the arrangement is three years old. The inevitable result of the delay will be a heavy and serious loss in revenue to Australia. Itis well within the knowledge of honorable members thatthe Commonwealth was very late in imposing taxation on war-time profits,and that when thefirst collection took place in respect of the excess profits made during the first year of the war Britainhad already made three collections of the wartime profits tax. I know, for a fact, that the agreement between the two Governments has been drawn up, but, so far as I know, it has not yet been proclaimed. Mr. Collins, the secretary to the Treasury, is now in London, and I suggest that the Government should instruct him to finalize this arrangement. I am “ of opinion that Australia will be the loser in the long run by the delay that has taken place, because Great Britain has collected the tax for a number of years, and it will be difficult to readjust the accounts and ascertain how much was collected from companies that trade-in Great Britain and Australia, in order that Australia may get her fair- proportion. The unfortunate taxpayer might be asked to pay to both Governments in full. I do not think anybody will suggest that such an iniquity should take place; and that does not appear to be the intention of the taxation authorities here, because in all cases they have asked companies, when making up their figures for Australia, to state the amount paid in war-time profits taxation in Great Britain. I point out, however, what would happen if such an iniquitous thing were done. Great Britain has collected a tax of SO per cent, on all profits in excess of the pre-war standard. There is only 20 per cent, left for taxation. If Australia, so late in the day, is to come in and collect 75 per cent, of the 20 per cent., it will mean that the taxpayer will pay in taxation 95 per cent, of his excess profits to one Government or the other. But whilst the Treasurer might, with utter disregard to the unfortunate taxpayers, be prepared to commit that iniquity, I think he will not do it when he realizes that he must lose his fair share of the taxation collected by Great Britain, which has been taking 80 per cent, of excess profits for years, and there remains only 20 per cent, on which Australia can possibly levy its tax of 75 per cent.
The only reason why I speak on this measure at all is to emphasize the extreme complexity of the taxation problem. I think I have probably had as much experience as have had most honorable members on questions relating to income tax, but I am not prepared to make a serious attempt to put income taxation on a proper and equitable basis until I have had the opportunity of considering the evidence to be obtained, and the report to be made by the Royal Commission. Meanwhile, revenue must be obtained, and as we are not in a position to deal with the whole question of taxation as it should be dealt with, I am prepared to support the. Bill as merely a stopgap arrangement.
.- Thousands of people throughout Australia will be disappointed by the failure of the Government to increase the amount of the general exemption. The honorable member for Flinders (Mr. Bruce) has argued that in view of the fact that a Royal Commission has been appointed to inquire into taxation matters, this Bill should be supported as a stopgap measure. He pointed out that there are many complex questions involved which make it necessary that a thorough inquiry should be made into the whole subject. Whilst that is true, there are certain facts which stand out so clearly that no Commission is required to report upon them. I refer particularly to the amount of income on which the Government can commence to impose taxation. I remember that when Parliament passed the measure in 1914 for the purpose of raising revenue to defray portion of the cost of the war, the basis of exemption was the income necessary for a person to live and maintain a family in reasonable comfort. ‘ Parliament fixed the amount at £156, although even then I thought it was too small.- But whatever justification may have existed for fixing the amount of exemption at £156 in 1914, has disappeared. The cost of living has increased considerably; including clothing, food, and other necessaries, it has probably doubled. That being so, and if Parliament accepts the principle of not taxing the minimum living income, we should at least double the exemption. An income- of £300 is little enough on which to maintain a home under present conditions. Unfortunately, during the. war, when the cost of living was increasing, the Act was amended in order to further tax the poorer people. Parliament provided that the exemption of a single man should be only £100, and that for every £4 earned by him in excess of the £100, £1 should be deducted from his exemption. Thus a man with an income of £140 would be entitled to an exemption of only £90. In the case of the married man Parliament provided that for every £3 in excess of £156, £1 should be deducted from the exemption. Thus, a married man who earned £200 would have his exemption reduced by £14. Yet we have evidence on every hand of the increase in the living wage, due to the fact that the purchasing power of a sovereign to-day is no greater than that of half a sovereign when the income tax was first imposed. In view of these facts can we shelter ourselves behind a Commission, and take no action pending the receipt of a report from that body? It is absolutely necessary that the Act should be amended immediately in order to increase the exemption. Almost every industrial organization throughout Australia has, by resolution, instructed its representatives in Parliament to take steps to have the exemption increased, but, in spite of that fact, the Government are doing nothing. Reference has been made to the Royal Commission which inquired into taxation matters in Great Britain, and the Treasurer remarked by interjection that the voluminous report of the Commission contained a vast amount of valuable information. Exemptions in the Old Country are generally below those in Australia, but the Imperial Commission recommended that the exemption for a bachelor should be £150, or £50 more than we allow in Australia; for a married couple with no children £250; and for a married couple with three children £350.
– Make it £600.
– A few moments ago the Treasurer was commending the Imperial Commission’s report; but when I quote one of its recommendations, he ridicules it.
– I remind the honorable member that the British workman pays 30s. per head more in Customs taxation than does the Australian workman.
– The Treasurer is trying to raise a side issue. I am very concerned as to whatour people will be paying in the way of indirect taxation in the near future, because we do not yet know the effect of the new Tariff. We do know, however, that the poor people will have to pay very much more than they do to-day.
– I thought protective duties cheapened goods.
– The right honorable gentleman knows from his Customs receipts what the effect of the new Tariff has been.
– The honorable member is an old Protectionist, and he used to argue that protective duties would mean reduced prices.
– I am an old Protectionist; but I am pointing out that the indirect taxation on the poor people will increase until we get our own industries established.
– I suggest that our indirect taxation is not nearly as heavy as that which the British people pay.
– The facts I have quoted speak for themselves. Nothing the Treasurer has said controverts them.
– I am merely set ting against them another set of facts.
– The Imperial Commission reported -
The reasons which have been given to usfor raising the exemption limit are -
That the cost of living has greatly increased since the present limit was fixed ;
The same argument applies to Australia, where the cost of living has doubled since the exemption limit was fixed -
That is the argument I have just adduced -
– Hear, hear! That is the point I have just been citing.
– I am pointing out to the House that the very thing which that Commission condemns is being practised in Australia, and for that the Treasurer is responsible through his Budget proposals. This is a matter of vital importance. It is not fair to increase the amount of a person’s taxation when there is every reason why it should be reduced. Put it is now intended to impose 5 per cent. upon income assessments. I emphasize that this new imposition, in a period of stress, when everybody is hoping for a decrease in the amount of income tax, will prove a shock to the community. I have realized all along, of course, that the war was bound to create a huge burden for us to carry, and that enormous sums would have to be specially raised and ear-marked to meet our liabilities arising from it. It was inevitable that fresh taxation should be imposed to permit of the payment of interest on borrowed money, and to provide a sinking fund to wipe out the debt in a reasonable number of years. But I stress the point that the money should be derived from those in the community who are best able to pay. The Treasurer once told honorable members that the difference between the number of those who received £156 per annum and those who earned £200 per annum amounted to only about 4 per cent. If the exemption were to be made £250 the percentage of difference would not represent more than about 8 or 9 per cent. The necessary money could still be secured if the Government would agree to raise the exemption.
– You agreed to take away money from the Treasury when the tax upon picture shows was reduced the other day.
– However that may be, the amount required could be collected by increasing the rate of taxation in respect of persons with incomes above the proposed exemption.
– Hear, hear ! Stick it on to the other fellow.
– The Treasurer is sticking it on to people who should not be asked to pay. We borrowed a huge sum of money to pay our soldiers for their services. Our men have returned, and the majority of them to-day are earning salaries ranging around £200 per annum; many of them, too, are supporting families. We say to those men, “ You went away to fight for us, and we were compelled to borrow money to pay you for your services. Now that you are back home we are going to ask you to pay us something out of your wages so that we may repay what we borrowed on your behalf.” That is not fair. We should not ask such a thing. Most of the Labour organizations throughout the country have carried resolutions urging that the exemption in connexion with income taxation should be raised to an amount varyingbetween £250 and £300. I think, personally - and am only consistent in expressing the view - that the exemption should not be less than £300. I have never, even prior to the war, favoured the exemption being fixed below £200. And, remembering the high cost of living to-day, I would still be no more than consistent if I were to advocate that the exemption should be nearer £400. We cannot lose sight of the fact that, generally speaking, there are very many people in the community who made huge fortunes during the war, and who nowhave larger incomes than they dreamed of prior to 1914. There is no reason why they should not be made to pay taxes on such a basis as will very materially assist the Government to discharge their liabilities arising from the war.
As for the formula, its alteration may be a matter for consideration by the Commission; but I stronglyurge that it should be simplified. There are very few people who understand the formula. Why should not the Government simplify it? Why should they not say that, in connexion with incomes between £300 and £500, taxpayers should be required to furnish a fixed sum in the £1; and similarly upon incomes above £500, and so on? Thus, everybody would know just how much he was required to pay. I have no complaint to make of the actual assessments issued by the Department. The officers do good work, and I have not known them to be at fault; but because people do not understand the system, they believe that mistakes are made. Even explanations are very difficult to furnish which are convincing in the eyes of aggrieved parties. In New South Wales we have no such formula as in the case of the Commonwealth Department. The State authorities require a fixed amount in every £1, and taxpayers know, or are in a position to know, just how much they should pay.
I have a complaint to make which chiefly concerns tenant farmers. There are large numbers of these folk scattered throughoutAustralia, and I represent some who are established in my own district. A tenant farmer takes a farm, and pays so much per annum by way of rent. There is a house on the property, in which he resides; and he pays rent for that. Under the present method of assessment, the tenant farmer is charged income tax on the capitalization of the house. I do not think it was ever so intended by Parliament. Honorable members never realized that a man placed in such circumstances would be taxed for something which did not belong to him.
– Oh, yes; clearly. I remember the debate very well.
– I am not too certain about that.
– Any honorable member who was in Parliament at that time must have been fully aware of the position.
– I will read the instructions which are sent out to fanners and graziers by the Department -
Income earned in .pastoral and agricultural industries, such as farming, dairying, vinegrowing, fruit-growing, or market gardening, should bc returned in Part D of the form of return. If you own the land and reside thereon, you should show 5 per cent, of the fair capital value of your residence under item 21.
That is a fair proposition, and is what I had understood all along. The instructions proceed -
If your land is leasehold, not in course of purchase from the Crown, you should not return ,5 per cent, of the value of the residence thereon.
Is that not plain enough ? Here are the instructions despatched from the Taxation Office to the man on the land, telling him that it is not necessary that he should include in his return the item of 5 per cent, as the equivalent of the capital value of his residence; that is, if he is holding his land on leasehold. But, if it is necessary for him to do so, then it is tantamount to double taxation. If I own a certain property, and lease it to some one else at a rental of £100 per annum, that amount, being pant of my income, must be shown as such in my return; but if my tenant is also to be charged a capital value percentage, the practice amounts to double taxation.
– But a tenant pays for the leasehold; he does not pay for the house.
– I have read the instructions sent out from the- Department, and there is no getting away from them.
– Then, seeing that the Commissioner tells a tenant’ that he is not required to show 5 per cent, of the capital value of His residence, if the tenant does show the amount, he is a. fool.
– My complaint is that the Taxation Department makes these leaseholders show the amount. And - what is more - if the taxpayers concerned have not done so in their returns for previous years they are called upon to furnish reasons why, and are compelled to pay up. I will now read a letter, bearing upon this matter, from the Acting Deputy Commissioner in Sydney to a reputable citizen for whom I can vouch, but whose name it is not necessary to give : -
Adverting to your letter of the 20th June, 1920, protesting against the addition to your income in the assessment issued in respect of the above-mentioned return, of £20 as representing 5 per cent, of the capital value of your residence, on the ground that you do not own any property, and pay rent for your farm, I have to invite your attention to section 20 (/) of the Income Tax Assessment Act, which provides - “ A deduction shall not in any case be made in respect of rent of any premises or part of premises not occupied for the purpose of producing income.”
Would any one say that a man who was paying rent for premises., in the case of his leasing a farm, was not occupying those premises for the purpose of producing income? Such a person would be living in the house because. he was compelled to do so, it being part of the bargain into which he had entered when taking over the leasehold. Yet the authorities say that they will make this man pay income tax in respect of a house upon .which some one else is already paying taxation. Since I held the view that the Deputy Commissioner in Sydney was wrong, I personally submitted the matter to the Federal Commissioner in Melbourne, and received the following reply. -
With reference to your letter and attached correspondence, the assessment as made is correct.
The action taken is really not to include the £20 as income, but to disallow as a deduction that portion of the annual rent which was paid for the residence. Section 20 (/) quoted in the letter of the Deputy Commissioner to Mr. - , clearly requires this to be done.
Instead of allowing a net deduction of £80 for rent paid, the full amount of £100 paid is allowed, and £20 is included as income. The ultimate result is the same.
The Act forbids deduction of rent paid for a private residence, but it permits a deduction of so much of the rent as is attributable to any part of a residence which is set apart and used for incomeproducing business purposes.
There is no double taxation in this case any more than there is double taxation in the case ofmoney which the taxpayerpays to his tailor for clothes. Thetailor paystax on the money so paid, but the ‘person paying it is not allowed to deduct the expenditure in his income tax assessment.
In the present case the taxpayer is merely debarred from deducting the rent from his income, however derived, whether from wages, dividends,business, orfarming profits, or other sources.
There is no relationbetween my paying a billto a tailor and this matter which I have taken up on behalf of a tenant farmer. If I pay my tailor hie billhe must show the amount received as part of his general income when furnishing his annual return; and uponthat returnhe is taxed. In the case of a leaseholding tenant-farmer, rent is paid to another party, and the latter individual shows it in his returnas part of his income, upon which he is accordingly taxed. But the authorities then say to the tenant-farmer that he must pay tax upon the capitalized value of the residence for which he is paying rent. I repeat that I , do not think that was ever contemplated by Parliament, and that expression of opinion is supported by the very language of the instructionssent out by the Taxation Department to guide farmers and graziers in furnishing their returns. I realize, of course, that it is the duty ofthe Departmentto secure the largest amount legitimatelypossible; but here, I think, there isthe straining of a point to get money to which the authorities are not properly entitled. At any rate, it is a palpable injustice, and is particularly hard on a type of primary producer who goes on improving and further improving a property year by year, and who, perhaps, at the end of his period of leasehold, has to get out without reaping the benefit of any of his improvements.
– Will the honorable member furnish me with the particulars of the case which he has mentioned ?
– I will gladly do so,and I hope the Treasurer willreconsiderthe decision of the Department.
– My officers are puzzled with this case;they say that it should not beso at all.
-But they have been making the farmer pay.
– If hehas paid wrongly,he can get the amount back.
– I reiterate that theexemption should be raisedto £300 at least ; and I hope that, if the Government will not agree to thesuggestion, honorable members will clearly bring home to the Treasurer their unanimous desire for an amendment of the law in that direction.
.- Honorable members have already advanced views with which I am in agreement, so that I need not say much upon the second reading of this Bill, but I urge the Treasurer to endeavour to make some arrangement in regard to the exemption. No doubt he will reply that every penny of the money proposed to be raised is badly needed, and that in these times of emergency every one inthe community should be called upon to contribute. Mr. Knibbs informs us that there are 282,000 persons in Australia whose taxable income is under £200, and that the income tax paid bythem amounts to £489,000. These people pay about £1 15s. per head, or 4½ per cent. of the whole of the income tax collected by theCommonwealth. No doubt the Treasurer will say that, although he is aware of the struggles of this section ofthe community to make ends meet owing to the high cost of living, he cannot afford to relinquish the revenue he derives from them; but the majority of these people arenot in the position if the richman, who can pass on any taxation he iscalled upon to pay. They cannot pass it on. The taxation of this country is passed on by all taxpayers, except landholders and people on fixed salaries.
SirJosephcook. - If we remit this £1 15s., will not some one else higher up in the scale be obliged topay it, and pass it on, as the honorable member will contend, with somethingadded to it? What relief, therefore, would be afforded tothe person whom the honorable member wishes toexempt ?
– As a rule, the man whom Iwish to exempt has a fixed salary, withnomeans of passing on the tax.
– And he cannot , pass it on “with somethingadded to it.”
– Evidently the Treasurer means that if we relieve these 282,000 taxpayers from the obligation to pay income tax, the other man higher up the scale, who would be called upon to pay more, would still pass it on with an addition.
– It is the honorable member who says so, and I am inclined to think that he is not far wrong.
– What the right honorable gentleman says only serves to indicate how iniquitous this form of taxation may be. Honorable members on all sides confess that the poorer section of the community and those who work on the land cannot pass on any form of taxation unless some of the latter happen to be in a position in which they can fix the price of their produce.
– The honorable member is a great reformer. Can he suggest any scheme by which taxation may not be passed on?
– Not for the moment, but the time is coming when relief must be granted to the stragglers in the community by’ preventing the steady increase from day to day in the prices of clothing, foodstuffs, boots, and all the requisites for the maintenance of human beings in our midst, by which merchants and others pass on this form of taxation. Even under our Constitution as it stands today, the Commonwealth Parliament could grant some measure of relief to the poorer sections of the community.
– But the honorable member cannot prevent taxation from being passed on.
– I maintain^ that wecan prevent a great many of the injustices that are now being imposed on the community. We cannot always fall back on a faulty Constitution as an excuse for not helping people in distress. Without commenting upon the composition of the Taxation Commission recently appointed, I wish to say that I expect very little relief from the result of its investigations. According to the honorable member for Flinders (Mr. Bruce), it will follow the example of a similar body in Great Britain, and go into all the pros and cons of the incidence of taxation, and formulate a scheme for submission to this House by which taxation will be more equitably distributed; but, in my opinion, taxation can never be equitably distributed by any Parliament or any Commission unless at the same time steps are taken to relieve people from being overcharged for the goods they need. That is the method by which the rich man avoids paying taxation. He merely laughs at any tax we may impose upon him. If he is called upon to pay a tax of £15,000 in one year he promptly adjusts the matter by increasing the price of his goods, making sure at the same time, as the Treasurer has hinted, that he has added a little more than may be actually required.
– The honorable member is evidently supposing that there is no competition in business, that everything is a monopoly, and that all prices are regulated as by a Price-fixing Commission.
– The honorable member will admit that prices are fixed today. By whom? By the vendors of the goods.
– Not in every case.
– No; I am not speaking of primary production in this connexion. The primary producer can only pass on the tax when he can fix the price of his products. In most instances he cannot do so. On the other hand, big merchants frequently, if not always, combine to fix prices among themselves, and pass on this form of taxation to the persons who buy their goods. I was disappointed by some of the remarks of the honorable member for Flinders (Mr. Bruce). I contend that we ought to be able to tax to the full the profits of any company registered in Britain which makes profits in Australia. The honorable member pointed out that it is easier for a company with a registered office in London to approach the British money lenders for the purpose of raising funds by debentures or otherwise whenever it is necessary to do so than for a company registered in Australia to raise money in Britain, and I am quite aware that we have obtained a fair amount of capital in that way, but the interest bill which is payable to British investors has to be met by the Australian consumers, and it is better that any interest payable on money invested in Australian enterprises should be distributed among Australians.
– It is handy to have a little capital coming in at the present time.
– If the honorable member perused the commercial columns of the newspapers he would see that during the past few months quite a number of companies have been registered in Australia or have increased their capital, and the money involved amounts to millions, which has all been raised in Australia. As a matter of fact, Australians are now becoming accustomed to finance themselves, not only in a public, but also in a private sense. It is better for all concerned. At any rate, it means that we are not paying so much interest to investors in other parts of the world, I hope that the Treasurer’s brightest anticipations with regard to the labours of the Taxation Commission will be realized, and that it will submit to this House some .scientific scheme for the application of taxation which will overcome the possibility of the rich man passing it on to the poor man. The Treasurer ha6 promised me privately that he will take steps to have a leaflet issued from the Taxation Department that will explain by a number of examples ‘how the income tax is imposed, thus enabling any taxpayer to compute ihe tax that may be levied upon a certain income. The system now employed would puzzle the wisest and cleverest mathematicians in our community. I trust that in this Bill or in another measure the exemption will be increased. I hope that the Commission will bring down a report speedily, and that this Parliament may soon get to work to devise a more equitable system of taxation.
Mr. Mcwilliams (Franklin) [4.31]. - I have no intention of dealing with general financial questions on this Bill. The Treasurer will need every penny he proposes to raise by this tax to meet the expenditure which he has proposed, and I regret that I was not here to try to prevent a certain tax being taken off which provided a fair amount of revenue.
I wish I could look with the faith that some honorable members have on the appointment of the Taxation Commission. There are not many phases of income taxation which have not already been tried in Australia. The method of collecting the tax at the source has been tried under the Companies Act; the sys tem of collecting from the individual is to be found in our own Act, and there is hardly any State in which one or other of the methods referred to by the honorable member for Flinders (Mr. Bruce) has not been tried. I. candidly confess, therefore, that I am not looking forward with very much hope to the result of the labours of this Commission, because the ground they will cover has already been covered in one State or another. How- ever, there are some matters which this Parliament ought to face immediately. There’ are some features of our income tax which are manifestly unfair, and should not be allowed to continue a day longer. The honorable member for Grampians (Mr. Jowett) has given notice of his intention to test the feeling of the House in regard to one of them.
– I hope that he will not try to test it on this Bill. It would be unusual to do so. This is not an Assessment Bill.
– This Bill incorporates the Income Tax Assessment Act, and it is proposed to ask for a ruling from the Chair as to whether the matter cannot be tested upon it. I venture to express the opinion that it may be. As to the fairness of the honorable member’s proposal there can be no question. During the last two years many primary producers throughout Australia who have been absolutely ruined by the drought, have yet been called upon to pay income tax on stock which has died in several States. There are two features of the Income Tax Act which, so far. as the landowner i3 concerned, are so pronouncedly unjust that I hope we shall be able to deal with them, if not in connexion with this Bill, at least during the present session. We ought to provide that primary producers shall be assessed in respect of their average income over a period of years, and we should eliminate entirely the provision which calls upon pastoralists to pay income tax upon the value of the natural increases in their stock. These natural increases do not represent income until they have been realized. When they have been sold and the owner has received payment for them, then that payment represents income on which he should be taxed. Under the law as it stands, stock-owners are compelled to include in their return and pay income upon the value of the natural increase in their stock. Very often, as a result of drought, the whole of that increase is swept away. Tasmania has just passed through the worst year in its experience, and I am sure that the Treasurer is aware thata very considerable part of New South Wales has also suffered for two years from a most disastrous drought. The same remarkwill apply to portions of Queensland. When a man is compelled to pay income tax on the value of the natural increase in his stock, and the whole of that increase is sweptaway as the result of drought, he is doubly injured. He not only loses the value of that increase,but has topay income tax upon something on which he has never realized.
– After all, there are men who do not Jose the natural increase in their stock by reason of drought.
– In that case, what happens? In the case of sheep the owner shears them, and pays income tax on the returns from his wool. If they are cattle he has to sell them, and pays income taxupon the returns so secured.
– Heneed not necessarily sell them. He may keep them to build up his herds.
– Does the Treasurer thinkthat a man keeps cattle on his run for fun ?
– Does the Treasurer think that a man keeps stock on his run until they die? As a rule, he sells his stock from time to time, and the moment that he does sohe obtains a return on which he mayfairly be called upon to pay income tax.
I hope the House will recognise the justice of my contention - that honorable members will insist upon the adoption of the average basis inrespect of the income of primary producers, and that stockowners, like every other man in the community, shall be required to pay income tax only when they realize on their stock. A warehouseman is not called upon to pay income tax in respect ofgoods that he passes through theCustoms House, and puts into his warehouse. It is not until he sells those goods that he pays income tax uponthe income so derived. I hope that the Treasurer will agree to deal with stock on the hoof exactly as he deals with stock in awarehouse, so far as income tax is concerned.
– There is no similarity between them.
– The only difference betweenthem of which I can conceive isthat when a man getshis stock into a warehouse he is sureof realizing upon it and obtaining a profit, whereasa primary producer never knows when he will be able to realize uponhis stock. The whole of it may be swept away by a drought. Why should we compel the farmer and grazier topayincome taxon something which he may never realize upon?
– The honorable member will admit that on account of a drought a merchant may have bad debts,and very large ones.
– But he does not pay income tax upon them.
– Hepays income tax on his undistributed profits.
– The Treasurer does not appear to realize that the average trader is careful to protect himself from bad debts. He will agree with me that such a man’s bad debts are fairly well distributed amongst his good debts.
– I merely desired to suggest that a grazier’s natural increase in stock, ifhe realizes it and turns it into capital, ismuchthe same as the undistributed profits of a warehouseman.
– The pastoralist who sells his natural increase in stock should pay income tax upon income so derived,but it is unjust to compel him to pay income tax on somethingwhich is not income and may neverreach the income producingstage.
– I amnot quite sure that the honorable member’s remedy wouldnot be worse than the disease.
– Weare ready to take the risk.
– We must try to save you from yourselves.
– I know that the Treasurer treatsthis matter as a joke.
– I do not; butI thinkthe honorablemember is overstating his case. That is all.
– I invite the Treasurer to consult the representative of any pastoral district in Australia as to whether or not I am overstating my case. That is a fair proposition. We know that stock-owners are compelled to return as income the natural increases in their flocks. On that they pay income tax, although those increases, may be swept away by drought, and. not a. shilling may be realized in respect of them. That is not fair.
– Is that the end of it?
– It is, so far as the stock-owner is concerned.
– It is not. He can and does get relief.
– On what valuation does the Department work, so far as natural increases in stock are concerned ?
– In the case of sheep the valuation is £1 per head in the State, and 10s. in the Federal, returns. If they were sold for more he would have to pay income tax on the difference. My point is that under the present system stock-owners are called upon to pay the tax in respect of stock which they may never sell.
– And because of that the’ honorable member would not compel a man who is able to dispose .of the natural increase in his flocks to pay income tax upon the money so obtained.
– He has to do so at the present time. The Treasurer does not understand the position.
– Perhaps not. I bow to the honorable member’s superior intelligence.
– i do not think the Treasurer has taken the trouble to ascertain the actual position. By introducing the system’ of averaging the income of farmers and pastoralists over a period of years, we should get rid of at least a certain percentage of the gamble that now goes on,
– Would not that also overcome the difficulty in regard to the taxation of the value of the natural increase in stock ?
– it would, to some extent. There is one other point in respect of which the farmers have a right to claim consideration. At the present time we allow a deduction’ of £1 per week for the maintenance of farm hands. That deduction was reasonable seven or eight years ago-
– A deduction of only 12s. 6d. a week per farm, hand was allowed until quite recently, when the amount was increased to £1 per week.
– It is quit© impossible to keep a man on £1 a week.
– May I ask the honorable member what is the difference between lambs, for instance, and the apples which fall off a tree?
– The Department only taxes the fruit-grower in respect of the fruit that is sold.
– He markets his fruit, gets his money, and pays income tax.
– And my contention is that when the- stock-owner sells the natural increase in his stock, and gets his money, he should be called upon to pay income tax upon the amount so received.
– But when a fruitgrower loses his apples, and they go bad on him’ - what then?
– He is not taxed.
– And the position is exactly the same in the case of the stockowner who loses his lambs.
– Not at all. He is taxed on the natural increase, although he may never realize a penny therefrom. To return to the point I was making, when the Treasurer interrupted me, I contend that it is quite impossible to maintain a farm hand on £1 a week, and that the deduction should, therefore, be increased to at least 30s. per week. I know of no part of Australia where farm hands can be kept, as they are kept to-day, and as we are glad to see them kept, for a less amount.
I have not dealt with the principles of income taxation nor with the question of the necessity for raising additional revenue; these matters can be discussed on the Budget. So far as I can see, the whole of the revenue expected from this taxation will be required, but I do ask that the manifest injustices I have pointed out shall be removed.
.- I urge on the Treasurer (Sir Joseph Cook) the necessity for increasing the exemption. I do not know how this taxation affects farmers and cattle dealers, but I know how it affects the working people in receipt of small salaries. A working man, who earns £2 14s. per week, has to pay £1 in income tax each year; and I question very much whether it is worth while collecting such sums. I suppose that this man will have to pay more income tax under this Bill.
– I am sure that the community generally do not wish this Parliament to tax people who cannot afford the money; and I suggest £250 as a fair exemption. When the exemption was fixed at £156 wages were only about half what they are now, and the cost of living has been nearly doubled. There ought to be a re-adjustment in justice to the poorer classes of the community.
– I would first like to say a word on the suggestion for the increase of the exemption. The whole incidence of taxation is, to be inquired into by a Royal Commission, which has been appointed after careful selection; indeed, I never gave more time and effort to selecting the right man for a Commission than I have on this occasion. Honorable members’ opposite are now very keen about having proper representation, but when they had an opportunity to secure it they turned the suggestion down, and would have nothing to do with it. Then, apparently, the question of the exemption had no interest for them; at any rate, no interest was shown in it by the Trades Hall. Even now, my honorable friends opposite ought to make an effort to place a representative taxpayer on this Commission. If they will give me the name of a man to represent them, I shall put him on the Commission to-morrow. It is a calamity that there is not such representation. If there is any class in the community which should be represented on a Commission of this sort - a Commission to inquire into the whole incidence of taxation, as it affects their homes, their work and life, surely it is that class with the minimum income.
– Would you give them two representa ti ves ?
– I remind the honorable member that on the Royal Commission already there areone or two men who will look after the interests of the wage-earners very well; but I would like, in addition, a direct representative of the working classes. It is not the fault of the Government that there is not such a representative now, and it is not too late. I appeal to the Leader of the Opposition (Mr. Tudor) to see if he cannot pick out a man whose bona fides cannot be cavilled at, and who, when appointed, would be accepted as a representative of the working people of the community.
– Cannot the exemption be increased by this Bill?
– No. This is only a rates Bill, and not a Bill proposing general or fundamental alterations in the law. The only alteration is in the rate of the tax.
– Can the Treasurer give us any idea of what the proposed 5 per cent. will mean to a man who pays £100 in income tax?
– I have some figures here that will supply the information to the honorable member. A man with £100 of taxable income now pays £2 5s. 8d., and, under the Bill, will pay £2 7s.11d.; £200 of taxable income now pays £51s. 7d., and will pay £5 6s.8d.; £300, or an income of £450 a year, now pays £8 7s. 7d., and will pay £816s. ; £400 of taxable income, meaning a total income of £550, now pays £12 3s. 9d., and will pay £12 15s.11d.; and a taxable income of £1,000, or a total income of £1,150, now pays £45 4s.1d., and will pay £47 9s. 2d., or a little over £2 extra. Such increases will not hurt anybody. Roughly, the present tax. gives £12,000,000, and I propose to obtain £600,000 more. As some honorable members have said, this is merely a tentative proposal. If I remain where I am, I am going to have the whole question of taxation revised as far as possible, and placed on a sound footing. I know that taxation is a very difficult problem - the problem of the ages - and it is always complicated, I am afraid, by the temperament, psychology, and differences in the positions generally of the taxpayers.
We always think a system is wrong if it happens to hurt us. We have to keep those facts in mind when discussing taxation.
I do not propose to deal at any length with the points raised during the debate. I should, however, like to refer to the question of averaging this tax. May I suggest to my corner friends that, although they have made up their minds definitely, they have entered on a path which is thorny and full of trouble; the question is not half so simple as they appear to imagine. If they go on, they will plunge themselves into a sea of difficulties, from which people everywhere else are seeking to escape.
– No, no !
– If we reach that stage, we shall not blame the Treasurer.
– I have already told the honorable memberthat I must try to save him from himself. The honorable member for Grampians (Mr. Jowett) calls out “ No, no” ; but I point out to him that the inquiry in the Old Country was a very complete one. I see that the honorable member has a copy of the Royal Commission’s report, and I invite him to read paragraph 479, as follows : -
It is clear to us that public opinion has moved since that report was written, and possibly in consequence of that report. There has been a surprising weight of evidence in favour of the profits of the preceding year (i.e., either the year to the 5th April immediately preceding the year of assessment, or the last business year completed prior to that date) being taken as the basis for Schedule D assessment. Hardly any one has had a good word for the average.
– That refers to ordinary businesses; there are no Australian droughts there.
– Even a drought is a relative thing. I remember,when we were leaving England for Australia at the beginning of July, all the London newspapers were full of black head-lines: “ Drought Continues. No Rain During the Whole of June.”
– If there had been a drought there for years, the report might have been different.
– I venture to say that if there had been drought in
England for five or ten years, the report would not have been very different. So far as I can see, there is a better and fairer method for the man on the land than that of averaging. The honorable member for Grampians appears to have made up his mind on the point.
– The farmers of Australia have.
– I suggest that that does not quite settle the matter. Men sometimes make up their minds in the wrong direction; it may well be that the people who helped to shape the farmer’s mind on the question have shaped it on a course which I suggest is not the best. Let there be no mistake as to my position - I agree with my friends in the corner in the objects which they seek. I agree that the present system is unfair, and that some amelioration must be found; it is only a question of which is the better method - whether the averaging system proposed by the honorable member for Grampians-
– The honorable member has given a lot of consideration to it.
– I know; but still there is room for difference of opinion. We all desire to reach the same goal, and by the fairest method we can contrive. In Great Britain, after an experience of averaging, they turned down the idea because it had not worked well. The report goes on -
The chief benefits we see in taking the preceding years’ profits as the basis of liability under Schedule D are -
That it will make the amount of profits assessed correspond much more closely in point of time with the amount of profits actually being made;
– That is great satisfaction to the man who has been ruined by drought.
– I do not see that that interjection is relevant -
We have, therefore, no hesitation in recommending that the change be made.
That is, the change from the averaging system to the method suggested.
– Has the averaging system operated in Great Britain?
– Has it been abandoned ?
– The Commission recommended that the averaging system should be abandoned. There are several variations of the system in Great Britain. I think manorial incomes are averaged over a period of six years, incomes from coal mines over five years, and incomes from farming over three years. The very people who are living under the averaging system say that it is unfair.
– They do not say that it is unfair.
– They do. The Commission reported that hardly any one had a good word to say for it.
– Nobody said that it was unfair.
– Nobody had a good word to say for it because it was fair.
– I suggest that the honorable member for Grampians is a little too cute over this matter.
– Because this is the recommendation of an English Commission, there is no argument in it.
– The honorable member will admit that farming conditions in Great Britain are totally different from these in Australia.
– The honorable member has suggested that the average should be taken forward. That will mean that we shall require to take the averages each year, and keep turning back over former years to correct them.
– Only for the first year.
– That will continue in perpetuity, and will increase the clerical work in the Department 400 or 500 per cent.
– Oh, no!
– That is what my officers tell me, and that is one objection they have to the system. They suggest that the same goal may be reached by a simpler method.
– We know their suggestions.
– The present system is too complicated for any grazier to follow.
– That is admitted, and if honorable members know of a simpler method I wish they would bring it forward.
– I have suggested a simpler method two or three times.
– The honorable member’s method is very simple; it would enable thefarmer to escape most of the taxation. So would the proposal put forward by the Leader of the Country party (Mr. McWilliams). It is a method of escaping the great bulk of taxation. I would like honorable members to realize that if taxation is lifted from the farmer in the way they suggest, the Department must get it back in some other way. We must have the money.
– I do not think we have been very unreasonable.
– The primary producers are quite willing to bear their fair share of taxation.
– I believe that; in any case, they will have to do it, whether they are willing or not. It is my unfortunate task to gather in these taxes, and I desire only to do what is fair. I suggest a course which will achieve the object which honorable membersdesire in shorter time than any other procedure. They have asked for the averaging system to be applied to the current financial year.
– We desire that last year shall be the firstin theaveragingperiod.
– The Royal Commission on Taxation is commencing its investigations. Ihave talked thismatter over with the Chairman, and I havesuggested that the Commission should make the averaging proposal the first subject of inquiry, and supply me with an interim report at the earliest possible moment. The making of such a report cannot take very long, and the moment it reaches me I shall consult the House regarding it.
– It will be two years before we get any alteration of the law by that method.
– The honorable member ismaking another of his exaggerated statements. He will not accept my word.
– If the report of the Commission is in favour of adopting the average system-
– I shall proceed to take steps to give effect to it at once.
– That is another definite statement.
– If the Commission recommends the adoption of the averaging system I will take steps at once to rive effect to that recommendation. The Commission comprises a body of experts, and the farming interests have an excellent representative, who is au fait with this question. The course thatI am suggesting will give relief quicker than will any other method.
– Provided that we can get an amendment of the law passed this year.
– The moment the report comes in I shall take stepsto give effect to it. I cannot say more than that.
– It will take two years to do anything.
– The Leader of the Country party may carry his proposal and alter the Bill to-night, but he cannot do anything quicker than the course I am suggesting.
– I shall take the chance.
– The honorable member may take his chance.I believe he would take any chance. He is becoming the most unreasonable man of any I know. Nothing one can do will satisfy him.
– Will the Treasurer hold back the Bill until the Royal Commission reports on this question?
– I will not. I require the money that will be raised under this Bill. In. regard to the hard cases thathave been mentioned, I remind honorable members that relief is already possible. Section 64 of the Act provides -
In any case- whether it be in respect of land, apples, wheat, or anything else - where it is shown to the satisfaction of a Board consisting of the Commissioner, the secretary to the Treasury, and the ComptrollerGeneral of Customs-
that a taxpayer liable to pay income tax has become bankrupt or insolvent; or
that a taxpayer has suffered such a loss, or is in such circumstances, or, owing to the death of a person who, if he had lived, would have paid tax, the dependants of that person are in such circumstances that the exaction of the full amount of tax will entail serious hardship, the Board may release the taxpayer or the executor or administrator of the deceased person (as the case may be) wholly or in part from his liability, and the Commissioner may make such entries and alterations in the assessment as are necessary for that purpose.
I admit that that affords only partial relief.
– If all the men who suffered very heavy losses during the last two years submitted claims, five years would elapse before they would all be considered.
– I admit that that is so under the existing machinery. The trouble is not in the law, but in the administration. These Tribunals have never been set up in various parts of Australia, and if the law is to remain as it is I shall establish a number of them, costly though they may be. We must take justice around a continent like Australia and bring it as closely as possible to the people, as we do in connexion with the High Court.
Reverting to the question of averaging, I shall do what I have promised in the interest of the Department. I hope honorable members will understand that I am not asking the Commission to report whether or not the averaging system is the best; the Commission may do that on its own account. But I have explained to the chairman the position in this House, which has already approved of. the averaging principle, and I have asked that the Commission shall report upon this matter at once. When the report is received I shall take action accordingly.
– If the Commission recommends an increase of the general exemption, will the Treasurer follow the same procedure?
– Yes. I see no reason why action should be delayed.
– Will the averaging principle apply to everybody?
– Our desire is that it shall.
– Another matter to which reference has been made is the taxation of incomes at the source. That system has been advocated on all sides of the House, and I believe it would be simpler than the present method.
– Most countries operate it.
– And I am in favour of it, for one reason, namely, that all the reports I have received suggest that the Treasury will derive a lot more revenue by that means. The Imperial authorities fear to abolish the system of taxing at the source and substitute a method of secondary taxation, because it would mean a tremendous loss of revenue. They say -
We are convinced that to abandon taxation at the source would involve an enormous loss of revenue.
Therefore, for us to adopt the method of taxation at its source would provide an enormous accretion of revenue.
– The Treasurer should be a most ardent advocate of the system.
– I am; and I am glad to find the Country party standing up to its taxation obligations, and suggesting to me that, by this method of taxing directly at the source, I would get some revenue out of them as well as other people. I suggest, however, that all these matters are irrelevant; I do not mean in regard to a debate of this character, but that this is not a measure in which to make large and fundamental alterations of our taxation laws. After all, this proposal is only tentative. I hope the Commission will quickly get on with its work, and inquire into the whole incidence of taxation.
– Has the Commission got going yet?
– Yes; there has been some little difficulty in the matter of finding officers and offices, but those troubles have now been overcome, and the Commission is ready to begin work. I impress on honorable members opposite that their party should nominate a gentleman who would represent the working men of the country, so that he might take his place on the Commission. We want to make that body as fully representative as possible. It is a competent Commission in every way, and commands the confidence of the country. That, at any rate, has been my great object, and I believe I have secured the type of men who will prove worthy of confidence. I have done my best, and can do no more. The sooner the Commission furnishes its report the better for all concerned, and the better in order to allow us to shape our course to the. re-adjustment of our post-war difficulties. I ask honorable members, therefore, not to press their proposed amendments.
– Will the Treasurer remit to the Commission the question of securing revenue by taxing Tattersall’s tickets ?
– The Commission is to inquire into the whole incidence of taxation, which includes everything.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 (Incorporation).
.- Seeing that this clause states -
The Income Tax Assessment Act 1915-1918 shall be incorporated and read as one with this Act- and seeing that the principal Act deals with the methods of calculating income, I move -
That the following words be added: - “ Commencing with income earned during the twelve months ended on the 30th June, 1920, tax shall be levied for each year as follows: -
In respect of the income earned during the year ended 30th June, 1920, on the taxable income of that year subject to the following provisions of this clause.
In each succeeding year the income of that year is to be taken as the average of that and the previous year or years until the income of five successive years has been so averaged, and thereafter each year’s assessment shall be based on the average arrived at by taking the income of that year and the four previous years into consideration. For the purpose of this clause losses shall be taken into consideration in arriving at the average income.
Where the effect of averaging incomes within such period of five years is to reduce the income of any year, the tax payable for that year shall be adjusted accordingly, and a rebate made or credit allowed to the taxpayer, and vice versâ.
Where a trade, profession, business or occupation is discontinued, the taxpayer shall be entitled to be assessed on the actual income arising from such trade, &c., during the year, and if the total amount of tax paid for the five previous years exceeds the total amount which he would have paid if he had been assessed for each year on the actual amount of income arising in that year, he shall be entitled to a repayment of the excess.
Where during any period of five years a taxpayer’s income diminishes, no such taxpayer shall pay any more income tax than he would have paid if his tax had been assessed upon each year’s income separately.”
– You have got a whole new Bill there, and you have not had the courtesy to furnish me with a copy.
– Here is one, sir.
– I will not look at it now.
– The honorable member for Grampians (Mr. Jowett) presumes that the Bill now before the Committee is one with the principal Act, which can be amended. That is not so. . It is true that the clause under discussion states that this measure shall be incorporated with the principal Act.Notwithstanding that, however, this Bill must be kept entirely separate from the principal Act, according to the terms of the Constitution. . The honorable member’s amendment, therefore, is not in order.
.- I merely desire to intimate that the honorable member for Hume (Mr. Parker Moloney) has just been called away on business, and that he asked me to move an amendment in terms similar to that which has just been moved. The honorable member for Hume, however, had intended to propose its insertion in clause 4. Seeing that the amendment of the honorable member for Grampians (Mr. Jowett) has been ruled out of order, I take it for granted that the same decision will apply to that which I was about to move. I make this explanation in justice to the honorable member for Hume.
Clause agreed to.
Clause 3 (Imposition of income tax).
.- I do not know how far the Chairman’s ruling will go, or whether it will be possible to move amendments of any kind whatever;
– If the Bill cannot be amended it is a farce to proceed with this discussion in Committee. The clauses may as well be agreed to in toto.
– Several honorable members have intimated their desire to move amendments. The raising of the exemption has been advocated on all sides. I take it that there can be no objection to the insertion of a provision to the effect that the exemption shall be raised. Figures supplied by the Treasurer, in the course of his Budget speech, showed that the amount collected from people with small incomes is comparatively small. The honorable member for Balaclava (Mr. Watt) remarked, some months ago, that a tremendous amount of money was spent by the public in the preparation of returns. It is not long since the Deputy Federal Commissioner of Taxation in this State resigned in order to open an office in this city as an expert taxation adviser. He obviously considered it would pay him better to launch out in private practice rather than remain in the Department to draw the comparatively high salary of Deputy Commissioner. In the Budget papers presented by the Treasurer, it was pointed out that of the sum of £10,800,000 collected last year about £9,000,000 was received from persons in possession of incomes of more than £1,000 per annum. It was shown that 44 per cent. of the grand total was paid by people having incomes ranging from £1,000 to £10,000 per annum; 34.4 per cent. was received from those whose incomes ranged between £10,000 and £100,000; and 4.3 per cent. was received from persons or companies having incomes of more than £100,000 per annum. From these people and companies the Treasurer could secure his requirements by increasing the rate of taxation; and he could, at the same time, raise the exemption. In a pamphlet recently distributed by the Minister for Trade and Customs (Mr. Greene), containing the annual report of the Director of the Bureau of Commerce and Industry, there is an interesting statement having to do with companies. The followingreturn shows the total issues authorized by the Commonwealth Treasurer in respect of new and existing companies, from the 26th January, 1916, to. the 31st December, 1919, and the purposes for which the issues were authorized : -
The shareholders in these companies, which have in this period transferred to capital £12,571,506 of reserves and undivided profits, and £36,218,188 by transfer of assets other than cash - this all represents watered stock - are the people who should be taxed at the highest rate. It is interesting to note that, during war time, the Government authorized a total issue of £111,716,478, when, at the same time, they were appealing to the Australian public to subscribe over £150,000,000 to war loans. The Treasurer saysthat honorable members of the Opposition are always anxious to make the big man pay. I admit it. It is because I am so anxious to relieve the worker from taxation. An income of £250 to-day will not purchase what £156 would have purchased in 1915, when the Commonwealth Income Tax
Assessment Bill was first introduced, and in which the exemption was fixed at £156. A few days ago I suggested that, at the taking of the next census, another wealth census should also be taken to enable a comparison to be made withthe figures furnished some years ago. According to Mr. Knibbs, 2,191,945 persons filled in and returned wealth census cards, and, out of this number, the returns show that 1,285,190 persons, about 60 per cent. of those who filled in the cards, had practically no assets, while the other 40 per cent. owned £1,188,137,013 out of £1,216,231,662, which was estimated to be the total wealth of Australia. That is to say, the other 40 per cent. own 97 per cent. of the total assets of Australia. The population of the Commonwealth is 5,247,019, therefore 906,775 persons, the difference between the 2,191,945 and the 1,285,190, or 17 per cent. of the whole of the population, held 98 per cent. of the assets of Australia, and 83 per cent. not more than 2 per cent. The figures applying to assets apply equally to incomes. Out of 1,380,208 males in the Commonwealth 345,575, about 25 per cent., received £156 perannumand upwards, and out of 811,737 females only 35,983, about 5 per cent., received £156 per annum and upwards. More than 50 per cent. of the income of Australia was being paid to 18 per cent. of the population. These are the persons who should be hit the hardest by taxation. How can any man keep a wife and bring up a family on £3 per week ? Can any honorable member contend that 10s. a week, representing the deduction of £26 per annum for each child, is sufficient to maintain a child at the present time ? The honorable member for Dampier (Mr. Gregory) has told me that he is in favour of increasing the deduction for each child wholly dependent on the taxpayer.
– The trouble is that there is no opportunity of doing it on this Bill, but the Treasurer has promised, if possible, to bring down an Income Tax Assessment Bill in which the amendment can be made.
-It may be out of order to attempt to amend this Bill for that purpose, but an effort will certainly be made to do so. We ought also to take into consideration the case of widowers, whose exemption is only £100. Many widowers have been penalized for not having furnished returns for several years past. Unfortunately, they have not noticed the fact that in their case the exemption is so limited. However, when we find from the figures furnished by the wealth census card that18 per cent. of the people who filled in returns enjoy more than half the income of Australia, that 82 per cent. get less than 50 per cent. of the income of Australia, that only 13½ per cent. of the population own freehold estates, that 8 per cent. own 7 per cent. of the value of the land of the Commonwealth, and that 2 per cent. own 75 per cent. of it, we cannot remain silent simply because thisBill may not present the opportunity for us to move an amendment to increase the exemption. The Treasurer says that he has invited representatives of the workers to take part in the Taxation Commission. I advise the workers to be represented on that Commission by one or more persons, who may be able to put forward their views as to the amount of the exemption and as to the unequal distribution of wealth which justifies the demand that the persons with large incomes should be hit harder. I do not agree with the principle that income should be taxed at its source. I do not know any of the shareholders of the Metropolitan Gas Company of Melbourne, and I merely cite the case of this company because I know that it is a big concern, which, presumably,has among its shareholders men who are at present paying income tax at the rate of8s. 1½d. in the £1.
– Under this Bill, they will be paving 8s. 6d. in the£l.
– If the dividends of the Metropolitan Gas Company are taxed at the source, the tax will be spread equally over the large body of the shareholders of the company, the deduction from the dividend of the wealthy shareholder being the same as that deducted from the dividend of the shareholder who may not have sufficient income to justify the payment of any income tax. I contend that each taxpayer should pay income tax according to his own personal schedule. The honorable member for Hunter (Mr. Charlton) has intimated that he intends to move an amendment to increase the exemption, and I shall vote for it, because I believe that we can attach to this Bill a proviso that the exemption shall not be less than any amount which the Committee decides upon. Under the graded scale of the tax, it is not likely that honorable members’ salaries will be affected. We are all anxious to afford relief to a large body of the community, not only from the payment of the tax, but also from the necessity to furnish returns, when they are earning under, say, £250 a year. Even with such an exemption, the position of these people would not be as good as it was in 1915, when we decided that an exemption of £156 should be allowed.
Clause 4 -
Notwithstanding anything contained in the last three sub-sections, the tax payable by any person who -
.- I move -
That after the word “Act,” sub-clause (1), the following words be inserted: - “provided that the exemption shall be not less than £250.”
I submit this amendment believing that it must be apparent to every honorable member that the time has arrived when the exemption should be raised. The present exemptions of £156 in the case of married men and of £100 in the case of single men are altogether too small, having regard to the fact that since 1914, when they were determined upon by the Parliament, the cost of living has practically doubled.We fixed these exemptions in 1914, believing that they would afford a fair living margin, and since the cost of living is double what it was at that time, we ought really to double the exemption. This matter has been dealt with in Great Britain, where Commissioners have reported that abachelor should be allowed an exemption of £200; a married man, without children, £250; and a man with a wife and three children, £300. If those exemptions are considered reasonable in Great Britain, should we have a lower exemption here? Apart from the finding of the British Commissioners, it must be obvious that the time has arrived when the exemptions should be raised. A single man cannot keep himself decently on £100 a year. I know young fellows who, in connexion with the railway service, have had to leave their parents’ homes, and some of whom have to pay 27s. 6d. for their board, in addition to paying for their washing. In other cases they pay 35s. per week for board alone. Then, again, a man has to pay about £11 for a tailored suit for which he paid only £5 prior to the war. Taking all these facts into consideration, it must be recognised that we shall do a serious injustice to the great working population of Australia if we do not raise the exemption. On the motion for the second reading of the Bill I gave reasons why the exemption should be increased, and I shall not delay the Committee by enlarging upon the subject. I hope the Treasurer will agree to this amendment. The Government cannot shelter themselves behind the plea that the Taxation Commission is going into the whole question, since that Commission cannot possibly report in time to enable effect to be given to its recommendations in respect of income taxation for the current financial year.
– What is the good of having a Taxation Commission if we are to ignore it?
– I do not suggest anything of the kind. The returns in respect of income from personal exertion had to be furnished at the end of July last. The departmental officers will base their assessments onthose returns, and will have to observe the provisions of this measure. We cannot hope to obtain from the Commission a report in time to enable the passing of the legislative machinery necessary to give effect to its recommendations in respect of the current financial year. That being so, the Committee should amend the Bill in the direction proposed by me. I hope the Treasurer will accept my amendment.
– Would the honorable member be prepared to allow working men here to be taxed to the extent that they are taxed in Great Britain?
– Whenever an honorable memberbrings before the House a case possessing some merits - and this amendment has a lot of merit in it - the right honorable gentleman raises a side issue. He tries to side-track honorable members by bringing up an entirely different question.
– Not at all. The honorable member is dealing with the general question of capacity to pay the tax.
– The indirect taxation which the people are called upon to pay will probably be higher than it is. We do not know what it may be by the end of the financial year. We certainly know that it will be increased; arid surely if the cost of administering this country is less than the cost of administering the affairs of -Great Britain, we should not burden our people by imposing taxation to the same extent as in the Old Country. We do not want to impose unnecessary taxation. We must deal with every question on its merits, and on its merits no one can say anything against the amendment. A single man cannot live on £100 a year, nor can a married man live on £156 a year.
– Who says that they must live on such a wage ?
– They must pay their way on what they get unless they are dishonest.
– But we are not requiring men to live on such a wage, and I hope that they are not being compelled to do so.
– When the original Bill was before this Parliament, the idea was that we should fix an exemption representing a sum sufficient for the maintenance of a man and his family. That was in 1914, when it was thought that an exemption equal to £3 per week was a fair thing. Having adopted that basis, we should now increase the exemption in accordance with the increase in the cost of living.
– If the cost of living has increased 100 per cent., and if wages have increased to the same extent since 1914, is not a man as well able to pa, this tax as he was at that time ?
– If, owing to the increase in the cost of living, it has been necessary to increase wages to the extent of 100 per cent., and those wages are still only sufficient to enable a man to support his wife and family, then the exemption of £156 which was fixed in 1914 should also be increased by 100 per cent. On the right honorable gentleman’s own showing, therefore, the exemption should be raised to £31? There is no escape from that point, and I hope that the Treasurer will accept my amendment.
– I do not think that the amendment is in order.
The CHAIRMAN (Hon. J. M.
Chanter). - During the course of the honorable member’s speech, I was able to give this question some consideration. I have to refer honorable members to the ruling which I gave a little earlier in the proceedings. The honorable member proposes to insert in the clause words providing that the exemption shall be not less than £250. He seeks, in effect, not to amend the Bill before the Committee, but to amend the Income Tax Assessment Act, in which the exemption is fixed. It would not be in order to insert such an amendment in this Bill since it. dees not contain any provision which has been before the Committee of Wa)’s and Means in respect of the fixing of an exemption. Sections 18 and 19 of the Income Tax Assessment Act de-il with the question of exemptions, and the proper course for the honorable member to pursue would be to endeavour to secure such an amendment in a Bill to amend the Income Tax Assessment Act. I have to rule the amendment out of order.
Sir JOSEPH COOK (Barra matta-
Treasurer^ [6.01. - I hope that the honor-‘ able, member for Hunter (Mr. Charlton) will not press this matter further.
– According to the Chairman’s ruling, we can do nothing. This Parliament is helpless.
– The Parliament is not helpless, but this is not the time to take the action contemplated by the honorable member. In accordance with well-known rules of parliamentary procedure, the amendment which he desires to make must be secured in some other way.
– I shall take another course in connexion with this Bill. I am not going to be defeated in this way.
– If the honorable member is determined to follow his own course, it is useless for me to make a suggestion. I was going to point out that, in my opinion, if the honorable member would allow this matter to remain in abeyance, and 1st the Taxation Commission get to work, relief would be secured in a much better way than is possible by these blundering methods.
– The right honorable gentleman thinks it would be a blunder to raise the exemption by even £1.
– No. I aim in sympathy with the proposal to lift the exemption, but I prefer to await the report of the Commission. As a resultof the Commission’s inquiries and recommendations, we are likely to get a. better scheme of taxation than is possible by taking action in this piece-meal fashion. ,
.- This Bill determines what shall be the rate of income tax payable. Clause 4 sets out that -
The rate of the income tax in respect of income from personal exertion shall be as set out in the first schedule to this Act…..
In the schedule to this Bill the formulae for determining the rates of tax upon incomes derived from personal exertion and property are set out. I desire to embody in the Bill itself a provision that in determining the income tax payable under the schedule, an exemption of not less than £250 shall be allowed. It seems to me that such an amendment would come within the scope of thismeasure. It does not deal with anything properly relating to the Income Tax Assessment Act.
– It does. The Constitution definitely lays it down that laws imposing taxation shall deal only with taxation, and that the machinery relating to taxation must be provided for in a separate measure. The honorable member will find that section 19 of the Income Tax Assessment Act deals with exemptions.
– Then what is the use of our wasting time in considering a measure of this kind?
– It is of no use since this Bill relates only to the rates of tax.
– I am not going to challenge your ruling, Mr. Chairman, but I shall adopt another method of achieving the object I have in view. I move -
That the words “ One hundred pounds “ in paragraph b, sub-clause 4, of clause 4, be left out, with a view to insert in lieu thereofthe words “ Two hundred pounds.”
.- Do I understand, Mr. Chanter, that the amendment proposed by the honorable member for Hunter (Mr. Charlton) is in order ?
– I have not given any ruling otherwise.
– I assume, then, that the amendment is in order, and I suggest that instead of the exemption being fixed at £200, it should be fixed at £150.
– If the honorable member moves to that effect I shall withdraw my amendment.
– Honorable members will agree that, evenwhen a man has no dependants, but simply himself to keep, he is “ hard put to it,” in view of the present purchasing power of money. Many years ago I had the experience of living in Melbourne on £100 a year, and my recollection of the shifts I had to make ends meet arouses my sympathy for men who have to live on such an income. A man ought to be able to support himself before he is called upon to contribute to the support of other people; and an income of £100 a year ought to be exempt from income tax. If a man’s income be £150 he ought to be able to contribute a modest £1 a year. I desire to move that the words “ and fifty “ be inserted after the word “ hundred “ in paragraph 6.
– I ask leave to withdraw my amendment.
Amendment, by leave, withdrawn.
– I now submit my amendment.
– For the information of honorable members, as well as for my own relief, I once more call attention to the fact that, when in Committee of Ways and Means, members are at liberty to alter or amend the motion, but when that motion has been passed, reported, and adopted by the House, whether in its original form or amended, it is not open to any further amendment. This clause is absolutely based, word for word, on a resolution which the House has already indorsed.
– Then, what is the use of arguing about it?
– There is no argument about the matter at all; I am asked to give a ruling, and I am giving one. In Committee of Ways and Means, members may amend the motion in any direction they think fit, but once it has been passed, reported to the House, and adopted, it cannot, as I have already said, be further amended. I have on previous occasions given several rulings on this same point.
– We seem to be in a most extraordinary position. We are considering a Bill in Committee, and yet we art told that we cannot alter one word ofa clause. This seems to me an absolute farce.
– The Chairman has given his ruling.
– Then, what is the use of the Chairman submitting these clauses to the Committee? Must we either reject the Bill as a whole or accept it as a whole? If honorable members have not the right to make amendments, then our proceedings are a farce and a waste of time.
– No !
– The Chairman has said that we cannot alter the Bill in any way.
– I did not say that; I said the Committee could not alter or amend a resolution previously adopted in Committee of Ways and Means and reported to and adopted by the House.
– That means that we cannot alter the Bill at all.
– At this stage.
– We are in Committee, and I submit that we may amend the Bill.
– We have really been in Committee already on the Bill.
– Then, what are we doing now? The Government are apparently wasting time.
– The purpose of this Committeeis to take care that the principles of the Government’s action in the matter as embodied in the Bill are not departed from, but become clothed in the habiliments of this new law. The real Committee stage on these matters is in Committee of Ways and Means. That is what that Committee is for - to discuss ways and means. We went into Committee of Ways and Means before the Bill was brought in, and the Bill is founded on the resolutions arrived at in that Committee. This resolution and the schedule, shaped and passed in Committee of Ways and Means, is now going through the House formally in the dress in which we clothed it; and all we can do at this stage is to see that the resolution is properly conveyed in this instrumentality.
– May we not alter the clothing ?
– I do not like to dispute any decision of the Chair; but you, Mr. Chanter, have ruled in Committee of Ways and Means that an honorable member has no power to submit an amendment which would have the effect of increasing taxation. Are we now to understand that no honorable member has the power to move to reduce taxation, or to amend this Bill in any salient feature? There is an innovation in the Bill, to be found in the last clause. In previous Bills of the kind, the Treasurer has always asked for power to impose taxation for the preceding year in which the incomes are taxable. That was so in the income tax measure of 1914-15, but the Bill before us, according to the clause, applies not only to last year’s assessment, but also to next year’s assessment. If we have no power to deal with a provision of that kind, our work here is thrown away. I do not think that when members realize the meaning of the clause to which I refer, they will agree to it. I always understood that at the Committee stage an honorable member had the right to move to reduce taxation, but not the right to move to increase it.
– That question has not yet arisen.
– But the amendment moved by the honorable member for Fawkner (Mr. Maxwell) would have the effect of reducing taxation, and yet you have ruled that it is not in order.
– The honorable member for Dampier (Mr. Gregory) is quite correct in some of his statementsregarding my previous rulings. But I have again to point out the difference between the Committee of Ways and Means and the Committee on the Bill. I have several times informed honorable members that they may shape a resolution in Committee of Ways and Means, but once that resolution has been reported and adopted by the House, it cannot be altered - the Bill founded on the resolution cannot be altered. The honorable member for Fawkner proposes to insert some words which were not agreed to in Committee of Ways and Means, and his amendment is, therefore, not in order. But verbiage of the Bill, which is not the verbiage of the resolution reported to the House, is certainly open to amendment, if the amendment be otherwise in conformity with the Bill.
– Can no amendment at all be made?
– I did not say that.
.- I do not rise to question your decision, Mr. Chairman. I did not understand it, but I think it is correct. If I did understand it, but did not agree with you, I still should not dispute your ruling. I rise merely to point out the position in which the Committee finds itself. We carried a resolution which bound us to the terms of a Bill to come before us later for consideration. We can waste hours - those of us who do waste time - in discussing the second reading of that Bill, and our labours can come to nothing. We can also discuss it in Committee, but cannot amend a single line of it.
– The Chairman did not say that.
– We can discuss the Bill clause by clause for as long as we like, and twist every sentence, but we cannot alter one line because at one stage in the past we carried a resolution which we did not understand, but which bound us to the terms of a Bill which we had not seen. God help us; we are in a nice position !
.- It must be clear to the Treasurer that a majority of the Committee are of opinion that the amount of exemption should ba increased. Unfortunately we are in the position of not being able to move any such increase. In order to indicate to the Minister my view in regard to exemptions, I intend to vote against clause 4.
– I wish we could dispose of this Bill before dinner.
– Does the Treasurer realize the hardship that is imposed on thousands of working people ?
– I do, and I am trying to ameliorate it; but for that I get no credit. I have indicated my proposal, which will achieve what the honorable member desires better than anything he can do. What is the use of wasting time?
– Why not give the Committee an opportunity of declaring that the amount of exemption should be increased ?
– It is not within my power to give that opportunity.
– Will the Treasurer take steps to have the amount of exemption increased ?
– I have taken steps already by asking the Royal Commission to report upon the. whole question.
– The Treasurer knows that that answer is only humbug. The Commission may not report for twelve months, but the Bill with which we are now dealing fixes for the current financial year the amount of tax to be collected and the amount of exemption to be allowed. Although the Commission has been appointed for a month it has not yet held one meeting. What is the use of this humbug and twaddle about the Commission dealing with the matter ? The responsibility of handling this question rests upon the Government, who, if they are sincere, will introduce an amending Bill to grant relief to people who are suffering an injustice. Everybody will admit that the taxation of a man who has an income of only £100 is ridiculous. Men in the working-class district which I represent are asked to submit income returns, although they know nothing about the preparation of them. If they fail to make a return they are haled before the Court and fined. Yet some of them hardly earn enough money to keep body and soul together.
– 1 know the workmen of the honorable member’s electorate, and I know they are not the poverty-stricken, down-trodden people lie is picturing, and if T were one of them, I would resent his remarks.
– I am willing to introduce the Treasurer to a number of men in my electorate who would have a great deal to say to- him about the inadequacy of the present exemption.
– They are not the down-trodden poverty serfs that the honorable member describes. They are men earning a very good wage.
– Men in my electorate who are earning £100 and £200 per annum are nailed upon to pay income tax, and they resent it.
– Of course ! Even the honorable member does not like paying taxation.
– I am always pleased to .pay my share. ‘My only regret is that my income is not such as to require me to pay more. This question of exemp-. tion vitally affects the workers, and the Government should give it their consideration. The exemption was originally fixed when the cost of living was considerably lower than it is to-day, and when the purchasing power of money was much greater. Statistics prove that the purchasing power of money has decreased, by nearly 50 per cent, since 1914. To ask a man earning £200 per annum to pay income tax is as unjust as would have been a demand in 1914 that a sing e man earning £50 per annum and a married man earning £100 should pay taxation. Had such a proposal been made when the original Bill was before the House it would have been justly resented.
Sitting suspended, from 6.30 to 8 p.m.
– I have no desire to prolong the discussion, but it must be apparent to every honorable member that there is a great deal of hardship throughout Australia on account of the low margin of the exemptions. Single men, and women too, who are in receipt of salaries of £100 per annum must find it almost impossible to live. It should be remembered, also, that even of that slender wage, a considerable sum is disbursed in indirect taxation. And it is iniquitous that married men in receipt of £156 per annum have to part with portion of that inadequate amount by way of income taxation. A man who is trying to suppert himself and his wife and children on £156 must find himself degrees below the bread line. A judicial inquiry in New South “Wales recently determined that £3 12s. 6d. should be regarded as the basic wage. It was agreed that that was the lowest sum on which a man could maintain himself and family. Yet the Government are taxing family mon whose incomes are actually less than the basic wage. Has the Government any intention of relieving the position ? I ask the Treasurer to introduce an amending Bill in that direction.
– For every shilling pa:d in income tax one pays £1 through the Customs.
– That is true, I dare say. When the present exemptions were fixed, in the early stages of the war, the value of money was far different from to-day. Comparing those times with these, the amounts of the exemptions should now be doubled. It is of no use for the Treasurer to say that the Royal Commission will inquire into this and all other like matters, and that, upon its recommendations, the Government will probably act. We are dealing with taxation proposals for the current financial year, and the Commission may not present its report for six months or twelve months. Meanwhile, hard pressed people are be:ng compelled to pay income tax when they are in’ receipt, in some cases, of less than a living wage. I suggest that the Treasurer give instructions to his officials that the tax be not collected this year from those who are placed as i have just described, pending the receipt of the report of the Royal Commission. Such action would grant a welcome measure of relief.
The Treasurer has already stated that it is h.s intention to refer the whole system of taxation to the Royal Commission,. I suggest that he call particular attention to the taxation of those who are in receipt of only £10Q per annum. Incidentally, I doubt if it is worth while, collecting individual amounts of £1 from these persons. True, £1 may appear to some to be only a small item, but it looms very large in the eyes of single men and women who are trying to live, in these times, on £100 a year. It is, relatively, a heavier tax upon them than is a tax of £5 or £6 upon a person in receipt of., double the amount of income. I do not want to vote against the clause, but I1 would have supported an amendment to exempt people whose income is £100. It is unfortunate that the proper opportu-11 itv for proposing such an amendment, was not seized. In the circumstances, I. ask the Treasurer to recognise the strong and very apparent feeling of the Committee; and I trust that, when the report of the Commission shall have been presented,- we will learn that its views coincide with our own.
.- - I indorse the remarks of the honorable’ member for Wilmot (Mr. Atkinson). I” make a special appeal to the Treasurer” in the matter of deductions of charitable’ gifts of £20 and over. There are many people who, in the course of a year, give far more than £20 to charitable institu-tions, but who disburse their offerings in small amounts. The fact is that philanthropic gifts, spread , over small sums,’ rather than provided in totals of £20 or more, often do the greater good. I ask the Treasurer to permit deductions of charitable gifts in respect of aggregates, which could be supported by statutory declaration, as well as in the matter of specific sums.
Sir JOSEPH COOK (Parramatta-
Treasurer) [8.13]. - All these suggestions will be carefully inquired into; but, when T am asked to bring in a special Bill for one purpose and for another, and to do so instanter, I must say that
I ‘ can make no such promises. I am asked by honorable members opposite to introduce a measure to deal with exemptions. How would I. get on in this chamber when piloting a Bill of such a character ? There are probably ten or a dozen different points involved generally, and to deal with any one of them in’ a general measure would mean reopening the whole question of taxation. The plain fact is that I must raise money, and that any money which I may knock off in one direction must be provided for in another. That would involve revision of the whole of the rates of taxation. As I have said more than once to-day, the entire system of taxation is to be revised. This i6 the last year in which the Government will collect the war-time profits tax, and thai fact will entail a revision of “the whole subject of direct taxation.
– Or the Government could go in for retrenchment to make a saving which would counter-balance the loss from the source mentioned.
– If the honor able member can, by means of retrenchment, reduce the estimates by £4,000,000 or £5,000,000, I invite him, with all my heart, to do so. I only hope that when gentlemen go out on this economy stunt they will take good care to see that the economy is spread evenly over all the interests represented in this Chamber, for then I would not be a bit afraid.” Because it is. the same with economy as with taxation; it is always the other fellow who must suffer it. However, I invite honorable members to discuss the question of economy when we are dealing with the Budget.
– I promise the right honorable gentleman that we shall do so.
– I hope so. The honorable member will do me a good turn if he can knock off a few millions fairly. Honorable members who talk about this being a big Budget should have seen the draft Estimates sent to me by the Departments. The Treasurer is supposed to be just a sort of sponge through which all things are to be wrung without his attempting to interfere with them, and if I had played that part this year’s Budget would have been many millions of pounds in’ excess of what it is. One gets no credit for the expenditure he cuts down, but I want honorable members to know that the
Estimates, as presented to them, are £15,000,000 less than they were when they originally came before me. It is clear that I cannot bring down a Bill to provide for this matter of exemption alone, particularly after the wonderfully industrious way in which almost every section of the Committee to-night has endeavoured to get something else into the little proposal I am making. I am sympathetic with the suggestion that the exemption should be raised, and I am inclined to think that it should be done. It is a hardship to impose the minimum tax of £1 on people whose income is £100 a year. Therefore, I will have the whole matter inquired into with a view to seeing whether there is not some way out of the difficulty, and if I can find a -way I will honestly follow it, but I cannot promise to come down to the House with a Bill to relieve every little difficulty that arises, particularly after my experience to-night. This little proposal of mine is getting a verybad passage. As I have already pointed out, it’ is only a tentative proposal for this year, because the whole system must be recast. Any one in my position would be a fool to attempt to recast the whole scheme of taxation without the fullest investigation into every phase and every side of it.
– The right honorable gentleman is relying too much on the Commission.
– I am, in the minds of men who feel that they can do all these things themselves. I am not half as confident in these matters as are most honorable members, but that is because I feel that I have a little more responsibility. I dare say that before to-d.ay I have headed stunts similar to that which is being conducted now.
– I thought that the right honorable gentleman was sympathetic.
– I am, but I do not like what the honorable member did this afternoon. I showed him my hand fully, but he had something up his sleeve. However, let that matter pass. The Government will give the fullest and most earnest consideration to the question of averaging the tax over a number of years, and the matter of the minimum tax.
– Good old “consideration “ !
– -If the honorable member can do it, let him do it. I am’ doing the best I can in a situation full of difficulties, and, apparently, with little consideration from honorable members. The position of the Commonwealth Treasurer is more difficult to-day than it has ever been in the history of Federation, and I am a bit tired of being “ shot at “ both inside the House and outside by every one who thinks that he can- teach me how to *’ do the job.” I do not pretend to be an expert. I regard matters as a plain man would, and I believe that I can get through all the difficulties if I am only given just a little fair play, and that is what I think I am entitled to get. I ask members not to press these matters further, promising them that they will receive the fullest and most sympathetic consideration from the Government.
Clause agreed to.
Clauses 5 to 8 agreed to.
Clause 9 -
.- I move -
That the following words be added to subclause (2): - “Provided that nothing in this section shall be deemed to prevent the assessments for the financial year beginning on the first day of July, 1921, from being computed upon the average of the incomes for ‘the two years, namely, 1919-1920 and 1920-1921.” ‘ I have listened with tlie greatest interest and attention to the rulings given by the Chair as to certain matters which cannot be added to the Bill, and amendments which are not in order; but I think that this amendment, which is quite different from others which have been submitted previously) will be exempt from Mr. Chairman’s ban. It will not alter the decision of the Committee of Ways and Means, deduct from the amount of- income which can be realized^ or in any way vary the incidence of the tax for the year to which this Bill applies… It, is in the nature of a clarifying amendment, disturbing nothing, but making clear the meaning of the resolution adopted by the Committee of Ways and’ Means. . Sub clause 1 deals with the income tax to be levied during the financial year beginning on the first day of July, 1920, in respect of income earned during the financial year 1919-20, and the whole of the other provisions of the Bill apply to income earned during the same period. This remark, however, does not apply to subclause 2 of this section, which applies to income earned during the financial year 1920-21, upon which we have just entered, * and the levying of the tax upon that income in the following financial year, namely, 1921-22. My amendment, however, makes it clear that nothing in the clause shall be deemed to prevent the assessments made during the financial year beginning on 1st July, 1921 , upon the incomes earned in 1920-21, from being computed upon the average of the incomes for the two years 1919-20 and 1920-21. My object in submitting this amendment is to do justice not only to one section but to every section of the community in regard to the method of assessing income tax.
– What revenue would be lost as the result of the adoption of this amendment?
– That matter has been fully considered, and ‘ the answer is that the carrying of this amendment will not result in the loss of one penny in respect of income tax for the present financial year. We have been asked to suggest a time from which this averaging period should start, and our contention is that it should commence from the year in respect of which the assessments are now about to be made. It is not necessary, neither would it be just, to make this scheme retrospective. We propose that a start should be made upon a new basis. In that respect, for the purposes of .the income tax assessments, every business will be treated on the starting year, as in Great Britain, as a new business. My object is to make it quite clear that nothing in the Bill shall he deemed to prevent incomes made during the present year, 1920-21, the assessments in respect of which will be made next year, from being averaged with the income of the preceding year, namely, 1919-20. That is in accordance with the soundest principles of finance and the fairest method of levying taxation.
-is the honorable member speaking for his party?
– I speak for myself and those whom I represent. The vast majority of my constituents are engaged in primary pursuits. I do not propose, however, that the relief which will flow from this averaging system shall be confined to the primary producers. My intention is that all income tax payers shall reap the benefit of it. Another point which I wish to make clear is that all we ask is that a man whose income, from the very nature of the occupation followed by him, is precarious, should not be called upon to pay a heavier tax than a man or woman whose income is fixed. Let us assume, for the sake of argument, that a man follows a certain occupation from which in respect of a period of five years his net income is £5,000. That represents an average of £1,000 per annum. In justice to all, we ask that a man whose income, while precarious, is on the average £1,000 per annum, should pay no more by way of income tax than a man whose income is £250 per quarter and is paid regularly, as in many cases it is, into his banking account.In five years each receives the same amount,andthey should be regarded as equal before the law. It has been well said by Saint Augustine, and ought never to be forgotten by us, that “ The State that is without justice is only a robber band.” That reproach might be directedto some of those who resist the meting out of even-handed justice to every income tax payer or citizen.
.- The Treasurer (Sir Joseph Cook) has told us very emphatically that the Taxation Commission is going to inquire into the whole question of taxation, and will bring in a report which will enable him to adjust the income tax on more satisfactory lines. I take it that the Commission cannot bring in a report in time to enable its recommendations to be applied to assessments in respect of income earned during the present year. Under this clause, however, we are making provision for the levying of income tax in respect of income earned, not only during the financial year beginning on the 1st July, 1920, but during the financial year beginning on 1st July, 1921.
– I think the Commission’s report can be brought in in time.
– Then why should we be tied up in this way in view of the fact that the Commission may be able, according to the Treasurer, to bring in recommendations in time to allow of their application to assessments in respect of the present year?We want to know exactly where we are. In order to assist the Treasurer to pass this measure we have given way to him to a considerableextent, because of his promise that he will do his very best to give effect to the wishes expressed by the Committee; but I point out that, under this clause, we are legislating in respect of incomes earned during the financial year 1920, and also the year 1921. The honorable member for Grampians (Mr. Jowett) hopes to secure the support of some of our party for his amendment. I am sorry to say that he has not made out a case that I can follow. His amendment is altogether different from that moved earlier in the proceedings, and which I would have supported.
– We could not get it in.
– Under the original amendment it was proposed that the income tax of primary producers should be based upon an average return covering a period of five year? That I should have supported, because, in common with others, I know what the primary producers have suffered from drought, especially in my own State. I wish togive them a fair deal, and to that end it would be a proper thing topermit them to average their income ; but with a general provision to permit anybody and everybody to average their incomes over twoyears, the Treasurer would be confronted with a considerable difficulty, because he would never know where he stood in regard to the revenue. If we provide that all taxpayers may average their incomes-
– The increase in the tax would have to be made 10 per cent. instead of 5 per cent.
– Even that would not meet the case
– The Treasurer could geta much more correct estimate of the revenue.
– Buthe would get much less revenue.
– The amendment would not affect the revenue for the present financialyear by one penny, because it would not apply to this year.
– Exactly, because all the returnsare in but it would affect the following year very considerably, because, in clause 9, we make provision for the assessment of next year’s taxation in accordance with the present assessment. Then there is a proviso whichgives the option to certain individuals - it may be all of us, or only a section - if it suits them, to average their incomes over two years. If that were permissible, a man with a small income this year and a large income next year would take advantage of such a provision to his own benefit, while the man with a large income this year and a small one next year would not do so.
– There is no suggestion whatever in my amendment that the taxpayer himself shall have any option; it merely means that the Treasurer or Commissioner will not be precluded from adopting the averaging system when making the assessments twelve months hence.
– The amendment provides that nothing shall prevent the assessment being computed on the average of income for two years.
– That is computed by the Income Tax Commissioner.
– I take it that any one would be at liberty to average his income over the two years. If it does not mean that it means nothing.
– No, no.
– If this amendment is inserted it will give the right to average the income.
– The amendment is moved so as not to preclude the possibility of the Government doing that.
– In other words, it is proposed to leave the matter to the Government. If that be so, I have no doubt the Government will stand by clause9. Itis a farce to insert a provisionthat will be inoperative.
. -If it will lead to getting on with the business, I am prepared to accept this amendment.
– I shall call for a division, for the amendment is a farce.
– I hope the honorable member will not say that. I have already said I am in favour of trying some better method of averagi ng incomes than we have at present. Duringthe discussion I have made that quite clear repeatedly, and I have no objection to the amendment.
– I should like to know really what this proposed proviso means. I ask the honorable member for Grampians whether it means that the income for the year commencing on the 1st July, 1921, and ending the 30th June, 1922, is to be computed on the average income over the years 1919-20-1920-21.
– Not exactly; it is not that at all. The amendment means that nothing in the Bill shall preclude that from being done.
– There is nothing in the Pill that does.
– I mustconfes s that I do not understand the amendment, if my interpretation is not correct. The honorable member for Grampians in one breath says that my interpretation is correct, and in the next breath says that it is not.
Clause agreed to.
May I ask the Treasurer whether a special effort will be made in the future to simplify these income tax schedules. Could the Treasurer from this schedule, inform me what would be the assessment on a net income of £380, after the usual deductions?
– If the honorable member will sit down I shall have a try.
– Halfa dozen of us here have been endeavouring in vain to make something of the problem. We have the assurance of the Treasurer that the Royal Commission will specially inquire whether there cannot be prepared a schedule that a person of ordinary intelligence may understand in some slight degree. I do not think there ison e honorable member here who could work out the problems presented by this schedule.
– Speak for yourself!
– I amspeaking for half-a-dozen membersbesideme and I hope these schedules will be made simpler in the future.
– I take the view that, with a constantly increasing income tax, a different formula should be applied to the computation of increasing amounts. It is a serious matter to those who are on the lower grades of incomes to have these constant increases placed on them ; but the Treasury officials, apparently, take no notice of that fact. We apply exactly the same ratio of increases that we did when the tax was much lighter than it is now; and, as a result, we place a relatively much heavier burden on the small incomes than on the higher. With such a great demand as there is now for revenue we should take more notice of the inequality of incomes, and derive a larger proportion from the higher, relieving those on the border line. The conditions are entirely changed by the necessity of raising more revenue; and I hope that in the future we shall have something better than the “ circle of the third degree “ now presented.
Schedules agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Assent to the following Bills re ported : -
New Guinea Bill.
Appropriation (Works and Buildings) Bill
In Committee (Consideration resumed from 3rd September, vide page 4213) :
Clauses 81 to 90 agreed to.
Clause 91 (Regulations).
.- I understand that, in reply to representations by the Fremantle Chamber of Commerce, the Minister promised that a pronouncement would be made by the Government as to the date on which Australianowned ships, running on the Australian coast, should have the full benefit of the protection afforded by the Act. The coastal trading provisions of the Act impose definite conditions which must be complied with by Australian registered steamers before a licence can be obtained to carry passengers or cargo on the coast, whilst this Bill proposes an amendment to section 286 to allow the Minister to grant permits to unlicensed British ships to engage in this trade, without complying with such conditions. I know that this is a thorny subject, because some parts of the Australian coast rely upon British-owned steamers for the maintenance of a reasonable service. I refer particularly to North-western Australia and to portions of the Queensland coast. The general opinion of those interested in the InterState steam-ship service in Western Australia is that, as the Inter-State companies nave spent considerable sums of money in providing really first class vessels for the trade, and as those vessels are not fully loaded with either passengers or cargo, the companies should be given the full protection that was intended when the original Act was passed against the competition of British-.owned vessels which trade between Fremantle and Adelaide. I should like to hear from the Minister as to when the Government expect to proclaim the coastal trading provisions of the Act.
– All I can say is that we are hastening on with the necessary preparations as much as we can, and, when the organization is sufficiently complete, we hope to proclaim the coastal trading provisions of the Act, provided that at the time we are satisfied that the ships on the Australian coast are able to take care of the coastal trade with such assistance as may be reasonably anticipated from such oversea vessels as comply with these provisions of the Act.
– I think the Minister’s attitude is fair, and it will be approved by those whom I represent. There is no objection to British-owned steamers plying on the coast so long as they comply with the coastal trading provisions of the Act. I understand that when the Director of Navigation has organized his staff, and when shipping is normal, the coastal trading provisions will be proclaimed. I realize the difficulty that the Minister has in dealing with the outlying portions of the Australian coast, and I am glad to receive the assurance that he has given.
. - I intend to move, later, to insert a new clause to prevent Asiatic or coloured labour engaging solely in the Australian coastal trade. Generally speaking, the rates of pay and conditions of employment on Australianowned vessels are about 100 per cent. better than those on vessels employing coloured labour. If Australian-owned ships engaged in the coastal trade are obliged to comply with certain conditions regarding wages, accommodation for crew and passengers, and hospital accommodation, we should give both the owners and the employees a reasonable amount of protection. As we are allowing a number of clauses to , pass without discussion, in order to facilitate business, 1 hope that the Minister will allow us every opportunity to discuss those other portions of the Bill which we consider vital, and also such amendments as we think necessary for the better working of the Act.
Clause agreed to.
Clauses 92 to 95 agreed to.
Clause 96 -
Section 286 of the principal Act is repealed and the following section . inserted in its stead : - “ 286. ( 1 ) Where it can be shown to the satisfaction of the Minister, in regard to the coasting trnde with any port or between any ports in the Commonwealth or in the Territories under the authority of the Commonwealth -
that no licensed ship is available for the service; or
that the service as carried out by a licensed ship or ships is inadequate to the needs of such port or ports, and the Minister is satisfied that it is desirable in the public interest that unlicensed ships be allowed to engage in that trade, he may grant permits to unlicensed British ships to do so, either unconditionally or subject to such conditions as he thinks fit to impose. “ (2) The carriage, by the ship named in any such permit, of passengers or cargo to or from any port, or between any ports, specified in the permit shall not be deemed engaging in the coasting trade. “ (3) A permit issued under this section may be for a single voyage only, or may be a continuing permit. “ (4) A continuing permit may be cancelled by the Minister upon six months’ notice to the master, owner, or agent of the ship of his intention to cancel it. “ (5) The Minister shall, within fourteen days of the granting of any permit under this section, notify in the Gazette the issue of the permit, with particulars thereof.”
.- This clause permits the Minister to grant permits for vessels to ply on the northwestern and north-eastern coasts without complying with the coastal trading provisions of the Act. The Committee must recognise thenecessity for such permits under the existing abnormal conditions. But for the Singapore line of steamers the whole of the north-west coast and the hinterland would have been completely paralyzed and its people ruined. Even at the present time the conditions are almost unbearable. I have received complaints from Port Hedland and other ports further north that the people had been for six weeks without a mail from Perth owing to the paucity of shipping on the coast. I think honorable members will agree with this clause giving the Minister power to grant permits for vessels owned outside of Australia to engage in this trade while existing conditions continue. When shipping is normal and theMinister is satisfied that there is sufficient shipping on the coast to meet the requirements of the people, the permits can be withdrawn. But- if any steps were taken by the Government now to prevent the running of the Singapore boats on the north-western coast, the few people who are there would be ruined. If there is. one thing to which Parliament should direct its attention, it is the populating and developing of the northern parts of Australia. We shall be living in a fool’s paradise so long as we allow that vast Territory to remain unpopulated, as at present. I move -
That paragraph(a) be left out.
It is undesirable that any Minister should assume that, because one licensed ship was available for the service, the granting of permits to other vessels was unnecessary. He should be able to grant a permit so long as he is satisfied that the licensed shipping is inadequate for the needs of the people.Later, I shall move a further amendment to sub-clause 4 so that twelve months’ notice, instead of six months’, must be given of the cancellation of any continuing permit. Shipping people have to make their arrangements well in advance - possibly they may have to charter vessels for. a period and to give merely six months’ notice of the cancellation of a permit would be absurd. If the Minister will agree to these amendments, I believe they will help to obtain shipping for services that mean very much to the future developmentof the outlying portions of the Commonwealth.
– I support, generally, the remarks of the honorable member for Dampier (Mr. Gregory). Again I am requested to do so by the Fremantle Chamber of Commerce, which points out that the licensing of ships to trade on sections of the coast thatare not provided for by Australianowned and controlled steamers is of vital importance to the north-west portion of Australia. While the Minister is empowered to grant monthly, and even up to six-monthly, permits, there is also provision for the granting of continuing permits. I agree that continuing permits should cover a period of at least twelve months. That would enable those directly interested in the trade to make necessary arrangements in the matter of cargo, passenger, and mail service and accommodation. I do not agree with the honorable member for Dampier (Mr. Gregory), however, that paragraphsa and b are contradictory. I think his purpose would not be achieved if paragraph a were left out. On the northwest coast - apart from those of the State Steam-ship Service - there are no vessels carrying on the trade except the ships indicated, which are registered and controlled oversea. I repeat that the Fremantle Chamber of Commerce is very anxious that the period for which licences may be granted shall be twelve months.
.- The north-west coast will be more affected by the proposed new section than any other part of the Australian coast-line. It should not be lost sight of that shipping generally is becoming more normal every day. A leading article in one of the Melbourne newspapers, published within the past few days, stated that ships which were saleable at the rate of about £70 per ton prior to the armistice, are now only worth about £20 per ton. If Australian owners find a profitable trade on the north-west coast, they will be prepared to cater for it.
– They never were very keen upon that trade.
– I would not be prepared to give twelve-month permits, which would have the effect of shutting out Australian coasters which are required to comply with our legislation respecting wages and living conditions.
– When the honorable member knows the general condition of the Inter-State service, he need not worry about the matter of twelve-month permits.
– I am not much concerned about the owners of these vessels, but am speaking from the stand-point of their crews. No ships will be licensed to ply along the coasts of Australia unless they comply with the conditions laid down in our legislation. In our first Navigation Bill, introduced by the late Hon. C.C Kingston, about 1904, and before the Navigation Commission was appointed, there was a clause which read to the effect that “ The GovernorGeneral may, by order, declare that the conveying of passengers between specified ports in Australia by British ships shall not be deemed engaging in the coasting trade.” The purport of that clause is embraced in our existing navigation laws. It was inserted, before the construction of the east-west railway, to provide that the Orient and P. andO. liners which called at Fremantle and brought passengers east, should not be deemed to be engaged in the coastal trade.
– We are not worrying about the southern coast; but the difficulty is thatwe cannot make any distinction in the Act.
– The men employed on coastal traders fear that if a licence is given to an unlicensed ship, which does not comply with Australian conditions, either in the matter of accommodation or wages, they will be treated unfairly. I understand that if there are no Australian trading ships available for the northwestern coastal business, there would be no objection to other vessels picking up the trade; hut the men engaged on our ships do not favour the entrance of these ships.
– I assure the honorable member for Yarra. (Mr. Tudor) that there is not the slightest desire to interfere with the conditions embodied in the Act for the protection of seamen and others. The question is one of fostering the northwestern coastal trade by making provision for the issue of special permits. If such provision is not agreed upon, the people along the coast and the settlers inland will be deprived of means for getting rid of their produce and receiving supplies. The Sea Carriage Select Committee has dealt with this matter, and it has learned very definitely that there is no disposition on the part of Australian ship-owners to cater for this trade. It is not sufficiently enticing; and, so far as the outlook for the future is concerned, the owners would not give an assurance of the likelihood of their taking an active interest in the matter.
.- While I do not for one moment desire to harm the settlers in the north-west of Australia, it must be remembered that already boats have been plying between Melbourne and Sydney with cheap labour on board.
– The proposed new section would not apply to cases of that sort.
– Those vessels are working under the Act.
– No; the Act is not in force. The Merchant Shipping Act is the Statute at present operating.
– The ships are working along the southern and eastern coasts now, and will continue to do so unless we protect Australian shipping from such an invasion.
.- The proposed new section is not an amendment of existing legislation, but contains an entirely novel provision. Its insertion was decided upon very largely to comply with the representations of Western Australian members who desired to meet the peculiar conditions on the northwestern coast. At the same time, one or two other points on our coast are in mind, which it may be found necessary, at different periods, to deal with. It is difficult to say with certainty what conditions may arise from time to time with regard to the further parts of the Australian coastline. The honorable member for Dampier (Mr. Gregory) suggests the deletion of paragraph a. I have no objection to that, but it was inserted with the express intention of strengthening the very position which the honorable member desires to maintain. Where it can be shown to the satisfaction of the Minister, that a service, as carried out by a licensed ship, is inadequate to the needs of any port or ports in the Commonwealth, or in the Territories under the authority of the Commonwealth, and that it is desirable in the public interest that unlicensed ships be allowed to engage in that trade, he may grant a permit to an unlicensed British ship to do so. Hecan also take this action if no licensed ship is available for the service. If, for instance, there is a new port, to which none of the licensed ships trading on that particular part of the coast can be sent, the Minister will be in a position to meet the new condition thus arising. The proposed new section really affords a double-barrelled protection for the object which the honorable member and the Government have in view. If the Committee desire the elimination of the Minister’s power to take this action when no licensed ship is available for the service, I have no objection; but I am prepared to accept the other amendment which the honorable member has forecasted, and, if necessary, to provide that a continuing permit may be cancelled Upon “ not less than “ six months’ notice. I can well imagine circumstances where less than six months’ notice may not be sufficient, either for the people already trading on the coast or for others, to make the necessary arrangements in advance.
.- Under the proposed section, as printed, I think the Minister would be at liberty to give twelve months’ notice of his intention to cancel a licence. In this case we are not dealing withlong voyages overseas.
– But we are dealing with a service for which vessels may have to be chartered.
– If we accept the Minister’s amendment, we ought also to provide for a maximum period. Perhaps the difficulty could be overcome bya mending sub-section 5, and providing that, in addition to notifying in the Gazette the granting of a permit, the notification of any cancelation should also be gazetted, thus enabling Parliament and thosemost interested to knowexactly what is being done.
– I am agreeable to that suggestion, and shall draft an amendment to give effect to it.
Amendment, by leave, withdrawn.
Amendment (by Mr. Greene) proposed -
That after the word “ upon in sub-section 4, the words “not less than” be inserted.
– A sub-committee of the Fremantle Chamber of Commerce, which investigated this matter, has asked for a twelve months’ continuing licence, and that if one Minister desires to renew a licence for a further period of twelve months he may also take advantage of sub-section 4 to terminate it on not less than six months’ notice. I understood that the proposed section provided, first of all, for the issue of monthly licences.
– No; it provides for single-voyage licences.
– Or for continuing permits which continue until such tun© as the Minister gives notice of cancellation, and that notice cannot be less than six months.
.- While ordinarily six months’ notice may be little enough to give to any shipowner whom the Minister wishes to drive off the coast, circumstances may arise in which there may be every reason for taking action promptly, which will be impossible if not less than six months’ notice must be given. It is better to allow the Minister a discretion to give ample notice according to circumstances as they arise.
– We must give sufficient notice to enable persons to make their arrangements.
Amendment agreed to.
Amendment (by Mr. Greene) agreed to-
That all the words after “ section “ in subsection (5) of the proposed new section be left out with a view to insert in lieu thereof the words “ or the notice of intention to cancel any such permit, notify in the Gazette the issue of the permit or the giving of the notice, as the case may be, with particulars thereof.”
Clause, as amended, agreed to.
Clause 97 agreed to.
Clause 98 (Payment of Australian rates of wages).
.- Under this clause it is proposed to amend section 289 of the principal Act by inserting at the end thereof the provision, amongst others, that -
Where a British ship, trading to places beyond Australia, is engaged upon a voyage to terminate in any part of the British Dominions, the Min:ster may require and take security, to his satisfaction, from the owner, master, or agent of the ship that the seamen employed on the ship during the period of her engagement in the coasting trade will be paid, on their discharge, the wages to which they are or may become entitled under “this Part of this Act. …
Why limit this requirement in regard to the payment of Australian wages to British ships? Should it not also apply to all other vessels ?
– Where any ship engages in the coasting trade and becomes a licensed vessel we have power to insist upon the payment of Australian rates of wa’ges to her crew. This provision, however, relates to British ships trading beyond Australia.
– We impose this condition upon a British ship that trades between one Australian port and another while on an outward or inward voyage. Why should not the crew of a vessel flying other than the British flag be also entitled, in the same circumstances, to Australian rates of pay ? We can only impose this condition in respect of the period during which a vessel is in Australian waters.
– That is all that this clause does.
– But while we insist upon the observance of this condition in the case of British ships,, Japanese, American, or other vessels trading to places beyond Australia might, on an inward or outward voyage, trade between different Australian ports, and be free from this requirement.
– They could not get a licence unless they paid the Australian rates of wages.
.- Section 289 of the principal Act, which it is proposed by this clause to amend, comes within Part VI. of the Act, which deals with the coasting trade.
– The position is, roughly, that, in the case of a foreign-going vessel, which is not a British ship, the wages have to be paid before it leaves Australia. In-the case of a British ship, for the convenience of all concerned, it has been permissible for the Minister to take security that the seamen, on their discharge, will be paid Australian rates of wages in respect of the period during which she was engaged in the Australian coasting trade. The* clause enables that to be done.
– Then I have no further . comment to offer.
Clause agreed to.
Clauses 99 to 108 agreed to.
Clause 109 (Unauthorized persons acting as pilots).
.- Section 352 of the principal Act provides that, in certain circumstances, “ an unauthorized . person may take charge of a ship ais pilot.” Under this clause, it is proposed to amend that section by enacting that “ an unauthorized person may pilot a ship,” and that, in any such case, the master shall cause the “ piloting “ of the ship to be at once given up to him. A ship might go to a port at which there is not an authorized pilot, but where there might be available an unauthorized person who was familiar with the channels and the marks in the river or harbor, and could bring the vessel to her proper moorings.
– The amendment of the principal Act, for which this clause provides, is merely to make it quite clear that, in such circumstances, the captain, and not the pilot, is in charge of the ship.
– That is so. I take it that the captain is left in charge, and merely gets the other man to show him in.
Clause agreed to.
Clauses 110 to 112 agreed to.
Clause 113 (When Court shall hold inquiry).
.- Why is the power taken away from the Court to hold an inquiry if it thinks an inquiry should be made?
– It has been found in practice that no inquiries of this nature are held except at the request of the Minister, and it is thought better that the whole responsibility should be thrown on him.
Clause agreed to.
Clause 114 (Repeal of section 368).
.- This clause entirely repeals section 368, which provides - that it shall be the duty of the person who has moved a Court of Marine Inquiry, to undertake the management of the case and assist the Court by all the means in its power. Of course, it is quite possible that this is a consequential amendment on clause 113.
– That is so.
– This is a serious matter. By a mere error of judgment a man’s whole career may be blasted, and he may have no means of compelling an inquiry to be held. Under the circumstances grave injustice may be done.
– According to the original Act, it was competent for other people to move the Court, but by clause 113 the definite responsibility is thrown on the Minister, who must necessarily make all the arrangements for the conduct of the case. The present section is so much surplus matter.
. - I regard this clause as a retrograde step, because it leaves a serious matter to thesport of politics. If a Minister chose to close his eyes there is no possible way in which an inquiry can be brought about, and it should be possible for somebody to move the Court in defiance of political considerations. Notwithstanding the fact that in the great majority of cases there are few departures from correct principles, it happens now and again that a Minister has to be compelled to do his duty.If there is no power to compel a hearing, it is a serious defect in the law.
– The honorable member is really referring to clause 113, to which the Committee have agreed. Experience has shown that in no single case has any one but the responsible Minister moved the Court.
– To have an ordinary marine inquiry? I am astounded.
– I cannot, of course, speak of my own knowledge, but that is the information supplied.
– Supposing that two vessels collided in the River Yarra, as has happened on more than one occasion, could only the Minister order an inquiry ?
– That has been the invariable practice.
– Is it the custom to order an inquiry in every case?
– I believe that is so ; it is done as a simple matter of routine. The Committee having agreed to clause 113, it follows that nothing is to be gained by retaining this section we propose to repeal.
– If an aggrieved person has not the right to compel an inquiry by the Court, we can give him the right to compel an inquiry by the Minister.
– In actual administration, it is a matter of ordinary routine business, the Minister having nothing to gain by refusing an inquiry. I do not think that any of the dangers that honor- able members have intheir minds are very likely to arise.
.- I raised a preliminary objection on clause 113, to what I conceive to be a weakness in the Bill. I ask the Minister whether he would have any objection to the recommittal of that clause after he has consulted his officers and others, if it is shown that I am correct in regarding the amendment as likely to prove a weakness. I have had no actual experience of Marine Boards, hut I Know that in Victoria it is the practice for the Marine Board, on its own initiative, to hold inquiries, and the same, no doubt, applies in every other State. At present I wish the matter left open, because it would be difficult, in the case of anything happening in Western Australia or Queensland, for those concerned to come to Melbourne to get the authority of the Minister to hold an inquiry.
– In such a case as that, I imagine there would be the ordinary delegation of authority. If a Minister had to perform all the duties thrown on him by the Acts he administers, he would never get to bed.
– That, in effect, would amount to what is permitted by the original Act, and it would, be better to permit the section to remain.
– I shall make further inquiry, and if I find that there is any good reason to recommit the clause, I shall do so.
Clause agreed to.
Clause 115 agreed to.
Clause 116 (Amendment of Section 377).
.- I notice that this clause substitutes the word “unsafe “ for the word “ unseaworthy.” I submit that a vessel may be unsafe, and yet be seawortthy, as in the case of a boiler trouble, or anything of that kind, inasmuch that she could still keep afloat. I am not sure whether the section is strengthened by the change. I think the word “ unsafe “ is taken from the New South Wales Act and the Merchant Shipping Act. It will all depend on the definition of “unseaworthy.”
.- This is a verbal amendment to bring this part into line with other parts of the Act. The original section was taken from the Merchant Shipping Act. from which the New South Wales Parliament also took it, but we have used the word “ unseaworthy” in the Navigation Act, and, as I say, this clause merely makes a verbal amendment.
Clause agreed to.
Clauses 117 to 120 agreed to.
Clause 121 (Powers of Minister).
.- This clause amends section 413 of the Act, which provides that the Minister, or any person authorized by him, may go on board any ship, and inspect the “ equipments, life-saving appliances, boats, compasses, and signals.” The amendment is to strike out those words, and substitute “ equipment (including the apparatus for wireless communication, if any).” Does “ equipment “ cover what it is proposed to strike out?
– “ Equipment “ covers all.
– Is the definition section amended to that effect?
– “Equipment” is definedin the principal Act.
Clause agreed to.
Clause 122 agreed to.
Clause 123 (Seal of Minister).
.. -This clause makes an ‘alteration in the design of the seal of the Minister. What is the reason for the change?
.- Section 419 of the principal Act provided that the seal of the Minister should consist of the Commonwealth coat of arms in a circle surrounded by the words “ Minister for Trade, and Customs, Commonwealth of Australia..’’ We found it practically impossible to design such a seal, except of an unwieldly size, the Commonwealth coat of arms being much broader -than it is long. Therefore another seal was designed, from which this clause has been drafted. The wording provided for in the original Act was too lengthy, and as the word “ Australia “ already appeared in the Commonwealth coat of arms, and it did not seem necessary to insert it a second time, merely the words “Minister for Trade and Customs “ have been placed in the surrounding garter.
Clause agreed to.
Clauses 124 to 126 agreed to.
House adjourned at 10.23 p.m.
Cite as: Australia, House of Representatives, Debates, 30 September 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19200930_reps_8_93/>.