House of Representatives
8 December 1921

8th Parliament · 1st Session



Mr. Speaker (Hon. Sir Elliot Johnson) took the chair at 11 a.m., and read prayers.

page 14099

PERSONAL EXPLANATION

Homerule for Ireland

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– I am reported in this morning’s Age as baring called for three cheers for Dail Eireann at the conclusion of the Prime Minister’s announcement yesterday of the dawning of a glorious day for the British people. I did not do that; but, had I had time to think, I would have called for cheers for the people of England, Ireland, Scotland, and Wales.

Mr Bowden:

– And Australia.

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

– Australia, ofcourse, first, last, and always. Those four nations are now, I hope, like the four-leaved shamrock - in the closest and happiest connexion. What my mother taught me over half-a-century ago is as true to-day as when she uttered it. She, an old Somersetshire woman, to whom I owe everything, said, “Remember, my hoy, that, cruelly as Ireland has been treated in the past by bad laws, there are more poor people suffering in England than in Ireland, because there are more poor in England.”

page 14099

NOTICE-PAPER

Correction op Printer’s Error.

Mr SPEAKER:

-I wish to draw the attention of honorable members to a printer’s error in to-day’s notice-paper. It occurs in Order of the Day, No. 2, Government business. I was considerably astonished and perturbed, on reading the notice-paper this morning, to find set down, as an Order of the Day, the resumption of a debate on a motion beginning “ That this House approves of the execution of the Prime Minister.” But, when I had recovered my normal equanimity, and had read further, I saw that the motion was for the approval of the execution “ by the Prime Minister” of an agreement relating to wireless communication. Were the Order of the Day called on in the form in which it stands on the notice-paper, it might occur to some honorable member to move, as an amendment, the omission of all the words after the words “ Prime Minister,” and, should the House carry that amendment, and agree to the Order of the Day in its amended form, the position of the right honorable gentleman might be extremely uncomfortable.

Mr Hughes:

– I thought that there was something in thewind. Honorable members seem so happy.

Mr SPEAKER:

– I have had the notices altered to correct the error, which was due to the great pressure of work at the Printing Office; and honorable mem-‘ hers are, no doubt, relieved that the Prime Minister is in no immediate peril of his life, and will not be subjected, at any rate for the present, to the physical discomfort inseparable from an execution.

page 14099

PAPERS

The following papers were presented : -

Railways - Report, with Appendices, on CommonwealthRailways, 1920-21.

Ordered to be printed.

Uniform Railway Gauge - The Problem of the Breaks in the Gauges of the Railway Systems of Australia, by A. R. Dowling.; together with copy of correspondence relating thereto.

Public Service Act - Promotions of E. A. J. Benjafield and T. D. Carrol), Department of Trade and Customs.

Papua, Ordinance of 1921 - No. 15 - Appropriation 1021-1922.

page 14099

QUESTION

TRANSFERRED OFFICERS’ LEAVE

Mr BOWDEN:

asked the AttorneyGeneral, upon notice -

Are officers in the employment of the Com monwealth Public Service, who have been transferred from the Public Service of a State, entitled to receive from the Commonwealth either the full leave which was due to them at the date of transfer or compensation for such leave?

Mr HUGHES:
NAT

– No.

page 14100

QUESTION

SOLDIER LAND SETTLEMENT

Mr MACKAY:
LILLEY, QUEENSLAND · NAT; UAP from 1931

asked tie Minister representing the Minister for Repatriation, upon notice -

  1. What is the total amount of money advanced to each of the States of the Commonwealth for -

    1. Loans for resumptions and soldier land settlement?
    2. War Service homes?
  2. What is the number of soldier land settlers in each of the States of the Commonwealth?
  3. How many War Service homes have been erected in each of the States?
Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

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

  1. According to the latest advices received, the number of soldiers ‘ settled in each State under agreement with the Commonwealth is as fed lows: -

Together with 10,193 houses purchased; 1,396 mortgages discharged; making a total provision of 17,334 homes to the 31st October, 1921.

Mr GIBSON:
CORANGAMITE, VICTORIA

asked the Minister representing the Minister for Repatriation, upon notice -

  1. Has the advance of £625 to the States, or the grant of £375 for land per soldier, been varied or curtailed; ifso, why?
  2. Has the £1,000 per soldier advanced to the States, or any part of it, been stopped?
Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

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

  1. Under existing agreements, the Commonwealthhas advancedmoneys to the States for - (a) land resumptions; (5) public works incidental to land settlement; and (c) advances to the soldier as working capital. At the recent Premiers’ Conference it was decided, on completion of existing agreements, to revert to the original arrangement, under which the States find the land and the Commonwealth the working capital for the soldier up to an average of £625 per soldier settled.
  2. See No. 1.

page 14100

QUESTION

BUTTER POOL

Mr.CORSER asked the Minister for Trade and Customs, upon notice -

  1. Will he inform the House if he has been approached by dairymen of the Commonwealth relative to the establishment of a Butter Pool?
  2. If so, have the Government considered the proposition, and can he say what action is likely to be taken?
Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

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

  1. Representations have been made to the Government in reference to the formation of a Butter Pool.
  2. The matter is under consideration, but in no case will the Government be prepared to lend assistance - financial or otherwise - to a compulsory Pool. If the dairymen take any action towards the formation of a voluntary Pool, the Government are prepared to consider the question of assisting a co-operative effort of this character.

page 14100

QUESTION

WAR GRATUITY BONDS: ADVANCES

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

In view of the approach of the Christmas season, could the Prime Minister arrange to give an advance of 20 per cent. of the value of war gratuity bonds to all such holders who need it?

Mr HUGHES:
NAT

– Arrangements to do what the honorable member suggests already exist. The War Gratuity Boards are daily authorizing advances of cash to those who are in necessitous circumstances.

page 14101

QUESTION

WAR SERVICE HOMES

Mr HIGGS:
CAPRICORNIA, QUEENSLAND

asked the Minister repre senting the Minister for Repatriation, upon notice -

  1. What was the number of War Service homes -

    1. Erected by the Commonwealth Bank?
    2. Bought by the Commonwealth Bank?
  2. The total cost of said homes, also the average cost?
  3. What firm of architects was employed by the Commonwealth Bank?
  4. Was the construction of War Service homes satisfactorily carried out by the Commonwealth Bank and its architects?
Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The answers to the honorable member’s questions are as follow: - 1.(a) One thousand sevenhundred and forty-seven; in addition, ninety-eight applicants were assisted to complete their homes; at present, the Bank has in course of construction forty-three houses. (b) Five thousand one hundred and twelve: the Bank has also discharged 1,022 mortgages.

  1. To the 30th September, the total amount expended by the Commonwealth Bank in the provision of homes was £4,605,369. The average cost of the homes erected by the Bank, compiled at 31st May,1921, is - with land, £686; without land, £637. The approximate average cost of houses purchasedby the Bank equals £576 : . and the mortgages discharged, £368.
  2. Messrs. John and Herwald G. Kirkpatrick, architects to the Commonwealth Bank.
  3. On the whole, yes. The Bank and its architects have rendered good service in this undertaking. There have been, however, as must be expected in a large programme, complaints, some of which, on inquiry, have been found to be justified. Prompt remedial action has been taken in all cases brought to notice.

page 14101

QUESTION

COMMONWEALTH LINE OF STEAMERS

Repair Work by Contractors.

Mr MARKS:
WENTWORTH, NEW SOUTH WALES · NAT; IND NAT from 1929

asked the Minister in Charge of Shipbuilding, upon notice -

  1. Is it a fact that outside firms who have contracted for work on the Commonwealth Line of Steam-ships have been prevented from landing and carrying out such work on the ships concerned when berthed at Cockatoo Dockyard?
  2. Is it a fact that the Boonah was ordered to sea after the workmen of an outside firm had commenced work on board, and that after her return to Cockatoo Dock such workmen who had gone aboard to finish their work were ordered off the ship by Cockatoo Dockyard officials?
Mr POYNTON:
Minister for Home and Territories · GREY, SOUTH AUSTRALIA · NAT

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

  1. No.
  2. No.

page 14101

QUESTION

OVERHAULING OF S.S. KARUAH AT BRISBANE

Mr CAMERON:
BRISBANE. QLD

asked the Minister for Trade and Customs, upon notice -

  1. In view of the fact that there are a great number of sailor and soldier members of the Brisbane Branch of the Ship Painters and Dockers Union unemployed, will the Min-‘ ister arrange that the s.s. Karuah (Commonwealth Lighthouse Service) be overhauled at that port, instead of in Sydney?
  2. Is it not a fact that this vessel has been overhauled upon several occasions at Brisbane, with results entirely satisfactory in every way?
Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

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

  1. It is inadvisable to have the Karuah overhauled at Brisbane, as she has to undergo her number three special survey to comply with the British corporation survey, and it is essential that the Department take advantage of the Commonwealth dry dock foT docking: purposes.
  2. The first annual overhaul of the Karuah-. was made at Brisbane in the year 1918, and? it was then determined that it would be preferable to conduct future annual overhauls at Cockatoo Dockyard, as by this means advantage is taken of the technical staff at the dockyard, and no docking fees are incurred.

page 14101

QUESTION

RETURNED SOLDIERS: SOUTH AUSTRALIA

Accommodation for Soldier Mental Cases

Mr BLUNDELL:
ADELAIDE, SOUTH AUSTRALIA

asked the Minister representing the Minister for Repatriation, upon notice -

Is it the intention of the Government to provide suitable accommodation for mentallydefective returned soldiers in the State of South Australia?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The Repatriation Commissioners have recently been in communication with the South Australian authorities concerningthe provision of accommodation for soldier mental cases in South Australia, and it was arranged that, on his return to Melbourne, the Principal Departmental Medical Officer should proceed to Adelaide to personally investigate the matter. This he proposes to do immediately.

page 14101

QUESTION

SULPHATE OF AMMONIA

Mr GIBSON:

asked the Minister for

Trade and Customs, upon notice -

In view of the fact that sulphate of ammonia is selling for local consumption at £18 per ton, while manufacturers are selling for export at £12 12s. per ton, will the Minister declare sulphate of ammonia as a manure and place it on the free list for manurial purposes, only to operate until the price has dropped to world’s parity?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Inquiries are being made.

page 14102

QUESTION

NEW GUINEA

Medical Officer - Wives of Officers and Settlers

Mr BAYLEY:
OXLEY, QUEENSLAND

asked the Minister for Home and Territories, upon notice -

Whether -

  1. The medical officer advertised for in connexion with the Venereal Diseases Hospital (New Guinea) is for the white inhabitants, the natives, or both?
  2. Permission is yet granted to officials and settlers to take their wives to New Guinea; if not, why?
Mr POYNTON:
NAT

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

  1. For the natives, especially in New Ire land, where the condition, as regards venereal disease, is reported by the Administrator and the Principal Medical Officer to be serious.
  2. Permission is granted, provided evidence is produced that suitable accommodation will be available in the Territory.

page 14102

QUESTION

CAULFIELD MILITARY HOSPITAL

Mr FRANCIS:
HENTY, VICTORIA

asked the Minister representing the Minister for Repatriation, upon notice -

Whether it is a fact that the Department has offered to dispose of the Caulfield Military Hospital at Kooyong-road, Caulfield, to the Victorian State Government; if so, is it a fact that the soldiers now receiving treatment at the hospital will be distributed among the several public hospitals?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– During the period that Caulfield Hospital was controlled by the Department of Defence, the property was offered to the State Government ; but, so far, the State has not indicated whether it is likely to acquire the property. The transfer of the control of the hospital from Defence to the Repatriation Department has in no way cancelled this offer. There is no intention of closing the Caulfield Hospital as long as it is necessary for the number of soldier patients requiring treatment. In the event of this number diminishing sufficiently, treatment on the existing lines will be provided, under an agreement with the Alfred Hospital, in absolutely separate wards, and in complete segregation, the Department paying a per capita rate per diem for maintenance.

page 14102

QUESTION

CENSORSHIP OF PICTURE FILMS

Mr BAYLEY:

asked the Prime Minister, upon notice -

Whether he has considered the advisability of appointing a woman, or women, to the Censorship of Pictures Board; if so, what has been the result of his consideration?

Mr HUGHES:
NAT

– Yes; the result being that it has been decided that there is no necessity to appoint women to this Board. It may be mentioned that some time ago State censorships were instituted in South Australia and Tasmania for the express purpose of checking the work of the Federal censorship. Two married ladies were appointed to each Board. These Boards, in order to justify their existence, were particularly careful in the scrutiny of films passed by the Commonwealth film censorship. Yet, out of over 10,000 films passed by the censorship, the South Australian Board only condemned two, and the Tasmanian Board only condemned the same number out of a total of 4,500. This proves conclusively that the censorship’s work is satisfactory when tested from a woman’s stand-point.

page 14102

QUESTION

INCOME TAX

Holding up of Refunds.

Mr FLEMING:
ROBERTSON, NEW SOUTH WALES

asked the Prime Minister, upon notice -

  1. Is it a fact that the Income Tax Department is holding up refunds due under the Ramaciotti decision; if so, why is this being done?
  2. Is it the intention of the Government to pass legislation affecting these refunds?
Mr HUGHES:
NAT

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

  1. The refunds are being held up by the Commission of Taxation pending the decision of the Government.
  2. The matter is under consideration.

page 14102

QUESTION

INVALID AND OLD-AGE PENSIONS

Dr MALONEY:
MELBOURNE, VICTORIA · ALP; FLP from 1931; ALP from 1936

asked the Prime Minister, upon notice -

Is it fair, in calculating the value of property and income in estimating invalid and old-age pensions, that, where the property concerned is not the home of the applicant, the net income should be deducted after value of the property has also been deducted, making two deductions in respect of the same property?

Mr HUGHES:
NAT

– It has always been one of the principles of old-age pensions, under State and under Commonwealth laws, that there shall be deductions from pensions both in respect of the capital value of property and in respect of the income. If the deductions were made in relation only to capital, or to income, it would probably be necessary that the rate of deduction be increased soas to make it equal to the combined rates of deduction under the present law.

page 14103

QUESTION

UNIFORM RAILWAY GAUGE

Papers by Mr. Dowling.

Mr BLAKELEY:
DARLING, NEW SOUTH WALES

asked the Prime Minister,upon notice -

Whether he will lay upon the table of the House the following documents: -

The bound volume of typed matter lodged by Mr. Dowling with the Royal Commission on Uniform Bailway Gauge on the 28th April last?

The file of typewritten matter lodged by Mr. Dowling with the Honorable the Premier of Victoria on the 12th November last, and which was transmitted by the Premier to the Prime Minister on or about the 18th November last?

Mr HUGHES:
NAT

– I have laid them on the table.

page 14103

CUSTOMS TARIFF BILL

Bill returned from the Senate with the message that the Senate had agreed to it as amended at the Senate’s request.

page 14103

CONCILIATION AND ARBITRATION BILL (No. 2)

Order of the Day for second reading discharged; Bill withdrawn.

page 14103

CONCILIATION AND ARBITRATION BILL (No. 3)

Motion (by Mr. Hughes) proposed, by leave, and agreed to -

That leave be given to bring in a Bill for an Act to amend sections 14, 18a, 24, and 29 of the Commonwealth Conciliation and Arbitration Act 1904-20. (Bill presented by Mr. Hughes, and read a first time.

Second Reading

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

.- (By leave.) - I move -

That this Bill be now read a second time.

The purpose of this Bill is to relieve certain conditions existing for some time past in the Arbitration Court, and which have been the subject of considerable discussion in this House and elsewhere. The Act provides for the appointment of Deputies to assist the President, but the provision in the Act in practice has been found to present such difficulties as to make it, in effect, inoperative. The Bill remedies this by substituting an alternative which it is confidently expected will enable the Court to overcome the congestion that now exists. At present Deputies may be appointed to assist the President of the Arbitration Court, but, like the President, they must be Justices of the High Court or Judges of a Supreme Court of a State. Diligent effort has been made by the Government to obtain the services of Justices of the High Court or Judges of a Supreme Court of a State, but without success, and, as a result, Mr. Justice Powers, the President of the Court, has been left without assistance. Business has become so congested that the President has declared that it is impossible for him to carry out his duties properly unless he has that assistance. Early in the year he had cleared the list of cases before him, and he anticipated having no difficulty whatever in dealing with the work that was likely to come forward, but this has proved to have been too optimistic a view. The President must have assistance; Deputies cannot be obtained as the law stands. Under the Bill there will, it is anticipated, be no difficulty. Clause 2 of the Bill now provides that the Government may appoint as Deputies gentlemen who are barristers or solicitors, and the term of their appointment is to be whatever term is expressed in the instrument of appointment or, if no term is set out, then a term which coincides with the unexpired portion of the term for which the President of the Court has been appointed, which in this case is about six and a half years. This provision will enable the Government to appoint gentlemen who are not Judges, but who must bebarristers or solicitors, as Deputies to assist Mr. Justice Powers to clear off the business before the Arbitration Court, and relieve a congestion which has, to those who believe in the legal settlement of industrial disputes, created a position full of danger to the community. If I am asked why the selection is confined to barristers and solicitors, my answer is that, as originally draf ted. the clause made the field of selection wider, but the President of the Arbitration Court expressed the view that as points of law continually arise during the hearing of cases before the Court, the limitation as now provided in the Bill was necessary. It has been therefore amended accordingly. The Government must pay regard to the wishes of the President of the Court, for whom these men will act as Deputies. Two of the other clauses of the Bill have been inserted as the result of representations made iby the Deputy Leader of the Opposition (Mr. Charlton). Clauses 3 and 4 amend section 18a of the principal Act in such a way as to provide that where an award is made, and a party to that award assigns his business, or it passes in some way to another, then that other shall be hound by the award in exactly the sameway as if it had been made against him.But this applies only in cases where an award is made before the assignment takes place, or the business passes; it does not apply in cases where, although a plaint is filed, the award has not been made. I have only to add that this is a provision which is doubtful constitutionally, although the Court the other day declined to express an opinion on its validity. It is an amendment to which, in its very nature, no one can take exception; it is an eminently proper thing to do in the interests of the preservation of industrial peace. But I wish to make it perfectly clear that we do not say that it is constitutionally valid; ou the other hand, the Court, as I say, has expressly declined to declare it invalid.

Mr Charlton:

-.- What about clause 3 in reference to standard hours?

Mr HUGHES:

– Tha t is a suggestion made by the President himself. The present provision necessitating three Judges in the first instance delays the Court unduly. It is still thought necessary not to place the vital question of hours in the absolute discretion of any one individual ; but it is proposed to effect this by giving a right of appeal to three Judges. That certainly will enable the business of the Court to be carried out more speedily . The definition of standard hours is one that has been suggested by the Judge himself to remove any ambiguity; and I do not think honorable members can take any exception to that. It is now set out quite clearly what the standard hours of work in any industry really mean. The amendment clears up a doubt which was in the mind of the Court, and of many people; and for that reason I think it is quite unobjectionable. The two important points are - first, the appointment of Deputies, and, second, the substitution for the present provision that all applications involving a change of hours shall be determined by three Judges, the procedure under the Bill whereby one Judge may hear them, subject to appeal.

Mr CHARLTON:
Hunter

.- I do not desire to speak at any length on the Bill, because I concur largely with what the Prime Minister has said as to the necessity for the amendment of the Act. There is a good deal of congestion in the Arbitration Court, due to an insufficient number of Judges. The Prime Minister stated that the difficulty in this regard is due to the fact that he has not been able to get Judges of the High Court to occupy the position of Deputy; consequently it is proposed to amend the Act so that barristers or solicitors may be eligible. When the Prime Minister is making appointments it will be well for him to take into consideration the experience of men who have practised at the Bar in connexion with arbitration, or who have, in any other capacity, acquired a knowledge of arbitration work. It is not every man, whether barrister or otherwise, who is suitable for a position of the kind; he requires experience of the particular work in hand.

Mr Foley:

– The honorable member would not have those eligible absolutely defined ?

Mr CHARLTON:

– No, I am merely making a suggestion. I am not quite sure that there should not he some permanence in the appointment of these Judges. What I mean is that, if additional Judges are to foe appointed - and there are now some sixty cases listed - they should have some definite tenure of office. We cannot make such appointments for a month or two.

Mr Hughes:

– I thought I. indicated that the Judges can be appointed forthe unexpired balance of the present term of the President - six and a half years, or thereabouts.

Mr.CHARLTON. - I had not gathered that from the Prime Minister’s remarks. I do not know whether the right honorable gentleman will fall in with the idea, but I desire to make a suggestion for what it is worth. In view of the congested state of ‘the business, if any parties to a dispute awaiting decision desire to have a special tribunal under the Industrial Peace Act, will the right honorable gentleman give consideration to any application to that effect ? This matter is not embraced in the Bill, but I thought I would mention it.

Mr Hughes:

Mr. Justice Powers, when he accepted office, asked me particularly whether it was the intention to extend the functions exercised under the Industrial Peace Act.

Mr CHARLTON:

– With the amendments of the Act as set forth in clauses 4 and 5 I am in hearty accord; they are absolutely necessary if arbitration is to succeed. The very fact that, when a party to a dispute transfers his business to somebody else, the business does not come under an award, weakens, and may, indeed, nullify altogether the effect of arbitration. When a man purchases a business he seeks all particulars in regard to it, and if he knows that there is an award of the Court affecting it, he takes that fact into consideration. As the law now stands, unions may not get the benefit of an award, and the position is also unsatisfactory to other employers in an industry affected. The same! remarks apply to clause 5. and both clauses refer only to awards that have been given, not to plaints awaiting hearing.

I wish to refer to clause 3, which I regard as the only objectionable one in the measure. It is true, perhaps, as the

Prime Minister states, that the Court has recommended this provision, but I do not think that it will facilitate the speedy hearing of cases.

Mr Hughes:

– Surely it will be better than the present system.

Mr CHARLTON:

– I do not think it will. Section 18 of the Actprovides that the hours of. labour must be determined by three Judges. We, on this side of the House, were very strongly opposed to that, and sought to defeat the clause. The amendment now proposed in clause 3 seeks to obviate the necessity for having the hours determined by three Judges, in the first place, by allowing them to be decided by one Judge. But it gives power to either party to the dispute to appeal to a Court consisting of three Judges. One can hardly imagine a case in which one party will not appeal, an 2 this provision must lead to considerable dissatisfaction and delay. The Prime Minister would be acting wisely if he were to agree to eliminate section 18, altogether and allow one Judge to deal with the question of hours. Clause 3 will not do what the Prime Minister desires it to do, because either party will be able to appeal against the decision of the one Judge, and, consequently, an industry will remain unsettled pending the result of that appeal. This must have the effect of continuing the congestion that exists to-day. It would be far better to allow this question of hours to be decided by one Judgeas it was prior to the last amendment of the Act. Clause 3 will surely lead to two hearings of the case, and that must involve delay instead of giving expedition. I personally desire to help in the passing of any proposal that is for the benefit of the process of industrial arbitration, but I say frankly that if I had to choose between the present law, which requires hours of labour to be determined by three Judges, and this proposed amendment, which provides for an appeal, much as I dislike the existing law, I would prefer it to the amendment, which must lead to two hearings of almost every case.

Mr Hughes:

Mr. Justice Powers has had some experience, and he says that the present system leads to congestion, and that this amendment will help him materially. We must have some regard to the opinion of the man who does the work.

Mr CHARLTON:

– I do not wish to lightly brush aside the opinion .of the J udge. But this is a matter in regard to which we must use our own judgment. I, like the Prime Minister, have had a good deal of experience of industrial arbitration, and I say that in almost every case’ one” side or the other will appeal. That cannot lead to, expedition. No doubt it will help Mr. Justice Powers if one Judge can deal with the question of hours in the initial stage, but under this power to appeal every case will be re-opened and heard a second time. I ask the Prime Minister to carefully consider this matter. I think he has endeavoured to provide a remedy for the present congestion in the Court, although it is, perhaps, a little belated. The Bill is necessary, and, excepting clause 3, 1 am heartily in accord with it.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– I think every honorable member must agree as to the necessity for some amendment of the. existing Act that -will relieve the congestion in the Arbitration Court. But we should be very careful that in amending the law we do not make confusion worse confounded and get so deeply into the bog that we shall not be able to extricate ourselves very quickly. I was pleased to hear the Deputy Leader of the Opposition (Mr. Charlton) 6ay that he does not like clause 3. I expressed my view in regard to the fixation of hours last year. I think the hours to be worked in an industry are not a matter that can be decided very satisfactorily by a mere hearing in Court under existing conditions ; they should be dealt with in a scientific manner and on physiological grounds. But the danger that is to be apprehended from clause 3 is that the award of the one Judge will operate pending an appeal to the three Judges. For instance, one Judge may decide that Forty-four hours shall be the working week in an industry; that award will become operative ; three months later the three Judges may decide on appeal that fortyeight hours per week shall be worked, and we shall then have great difficulty in securing the observance of that award by reason of the fact that for three months the employees have been already working the shorter week. In those circumstances, I agree with the Deputy Leader of the Opposition that the working hours should be settled at one hearing, and we should adhere to the principle of having this matter decided by three Judges. The fact that this Bill will give power to the Government to appoint Deputy Presidents will, to a large extent, obviate the delay which has occurred in the past. If no other endeavour is made to amend clause 3, I shall propose certain amendments to provide that the award in regard to hours, like the judgment of any other Court, shall not be operative while an appeal is pending.

Mr FOLEY:
Kalgoorlie

.- I am pleased that the Prime Minister has introduced this Bill. He told us that the first clause had been inserted at the request of the President of the Court (Mr. Justice Powers), and he advanced reasons as to why the appointments to the offices of Deputy Presidents should be restricted to barristers and solicitors. T should like the Prime Minister, if he can do so, to tell us what were the reasons given by the President of the Court for limiting the choice to these professional gentlemen? I do not agree with the Deputy Leader of the Opposition (Mr. Charlton) that the granting of the right to appeal will appreciably prolong the settlement of cases. There will be appeals in some cases, but not in all. There may be appeals on the question of hours. I do not know why a man should have the right to appeal from the decision of all other tribunals but those of an Arbitration Court.

Mr Charlton:

– Appeals from Arbittration decisions have not hitherto been allowed.

Mr FOLEY:

– It is a good thing that the Bill- gives the right of appeal from such decisions.

Mr Charlton:

– The workers of New South Wales have, from the beginning, been opposed to the granting of the right of appeal.

Mr FOLEY:

– I have had some experience of Arbitration proceedings, and I have had experience as a worker, and I think that the giving of the right of appeal is a step in advance. When an appeal is made, the shorthand notes of the evidence taken at the original hearing will be available, so that very little additional evidence need be called, and the questions in dispute can be settled very quickly. When a question has been dealt with on appeal, the settlement will he more permanent than some settlements are now.

Mr Marks:

– Within what time may an appeal be lodged ?

Mr FOLEY:

– I think that the Government, after consulting the employers and the employees, will be able to fix by regulation the time within which an appeal should be lodged. If there is any weakness in the .proposal, I should like to have it pointed out, because I am very desirous that our legislation shall tend to the procuring of industrial peace.

Mr BRENNAN:
Batman

.- The Bill adds one more measure to the long list of amendments of the conciliation and arbitration law. In its main purpose it will be welcomed by the members of the Labour party, and by those outside who are interested in industrial activities, especially the workers in those activities. The honorable member for Darling (Mr. Blakeley), myself, and others have spoken in this Chamber quite recently of the unfortunate congestion of work in the Arbitration Court. That the Court is not staffed to an extent that even approaches adequacy has been the cause of grave unrest and dissatisfaction among wage-earners. It has been a public scandal that a high Judicial Tribunal, such as the Court of Conciliation and Arbitration, should be so ridiculously understaffed as to be unable to discharge the functions for which it was created. I ventured to say in this- place, not very long ago, that there was strong evidence for the supposition that the Government had determined, rather than destroy the Court deliberately, Ministers being pledged to support arbitration, to allow its business to drift into confusion and chaos, and that things were rapidly tending to that unhappy climax. The Minister for Works and Railways (Mr. Groom), in replying to my complaint, did not, by arguments or figures, endeavour to answer my contention ; he merely denied, indignantly, the facts that I had put before honorable members. ‘He said that the Prime Minister (Mr. Hughes) had already sufficiently answered the contention that there was any desire on the part of the Government to destroy the Court. It would have been much more becoming of the Minister had he made some explanation of the fact that the President of the Court (Mr. Justice Powers) had recently declared it to be impossible for him to carry on the work of the Court unaided. It would have been more fitting -had the Minister made some answer to my allegation that the cases now awaiting hearing are twice as many as when Mr. Justice Higgins was forced to retire from the position of President. Instead oV doing that, the honorable gentleman by a general denial endeavoured to convey the impression that I had spoken loosely, and without regard to my responsibilities, or the facts of the case.- If there were wanted any further proof that I was entirely right in the matter, it is afforded by the Bill, whose terms are an acknowledgement that what I and other members have saM lis accurate. The Bill empowers the- Government to appoint a number of Deputy Presidents, who for’ all practical purposes will have the same powers and duties as the President, in order to cope with the rush of work in the Court. I think that that provision is on right lines. The choice of Deputy Presidents will no longer be limited to the Justices of the High Court, which is well, because the feeling of those Justices towards the Government in this matter is quite apparent, and none of them would accept the position of President or Deputy President of the Court of Conciliation and Arbitration.

Mr Bowden:

– The seat is not an easy one. The other Justices of the High Court have much pleasanter seats.

Mr BRENNAN:

– The seat is a most uncomfortable one, and the work is most difficult and trying. For a number of years I had the deepest sympathy with Mr. Justice Higgins, who has given much of the best period of his life to the perfecting of a system of arbitration. Whatever bias some persons may have against him, I think that no one would deny that he brought to bear on the questions with which he has had to deal distinguished talents and extraordinary skill and patience. The proposed Deputy Presidents need not be members of the High Court Bench, but they must be barristers or solicitors, or barristers and solicitors, of the High Court or of the Supreme Court of a State. That provision leaves a fairly wide field of choice, and at that I do not cavil. But it is curious, and worthy of comment, that while we have taken all sorts’ of care to prevent barristers and solicitors from appearing in the Court, we take equal care to prevent the position of Judge from being filled by any others than those of the legal profession. There is some point in certain of the remarks of the honorable member for Kalgoorlie (Mr. Foley) when viewed in the light of historic facts. We exclude more or less learned gentlemen from appearing in the Court, though, as I have suggested, very often their presence might expedite and simplify procedure; but we say that no others shall be eligible to preside over it.

The next matter of principle in this Bill is the provision for an Appeal Court and the abolition of the requirement now existing that a full Bench of three Justices shall deal with an application for an increase or reduction in hours. The Bill, it is true, abolishes that requirement, but curiously enough it reinstates it, in another and more vicious form, by creating a Court of Appeal. Although one Judge may decide the question of an increase or reduction of hours, his decision is subject to an appeal to the President, sitting with two Deputy Presidents. The Deputy Leader of the Opposition has rightly pointed out that if there is one thing more than ‘another on which industrialists and those who sympathize with them have insisted it is that in matters of arbitration there should be no right of appeal from the direct and simple decision of one Judge. As I pointed out on another occasion, no person was more insistent in his objection to a Court of Appeal than was the Prime Minister himself at one time. His objection was well justified, because the existence of such .a Court is an invitation to appeal, and such an invitation will be accepted in nearly every case. Thus we have not got rid of the objectionable feature which Labour so strenuously opposed when this matter was last before us, namely, the necessity of having a cumbrous Court of three Justices to deal with the question of a decrease or increase of hours. Instead of getting rid of it this Bill makes the avenue to that cumbrous Court longer and more difficult. When we go into Committee I shall be found in opposition to that provision.

Another matter worth mentioning at this stage is the proposal to make awards resultant from agreements applicable to successors in and transmittees of any particular business which has been bound by the Court, if a business can be bound by it. The Prime Minister, in moving the second reading of the Bill, said that the clause in question was of doubtful constitutionality. Whatever may be its relation to the Constitution it is of very doubtful practicability. The intention, however, is wholly wise, and the Deputy Leader of the Opposition is to be congratulated upon bringing the matter forward and having such a provision for what it, was worth inserted in the Bill. This is by no means the first time that we have considered the principle in this Chamber. It is already law so far as regards the ordinary award. It is now proposed to make it law in the special case. There is, however, the very old principle that no person can be bound by the decision of a Court in respect of proceedings to which he was not a party, and although the Deputy Leader of the Opposition rightly points out that the transmittee or assignee of a business takes over that business at his peril in so far as the obligations relating to it are concerned, I think that the principle that a man may not be bound, by a decision given in proceedings to which he was not a party is likely to create difficulty and to make it impossible to apply our good in>tentions in this regard. It would be difficult even if a business were transferred and assigned in good faith, but where an assignee takes over a business, as he will do, with the special purpose of evading his obligations under an award, it is more than likely that he will be able to do so in such a way as to successfully evade such obligations. It is not for me to suggest the ways and means by which he will possibly do so. I understood the Prime Minister to say that this provision would not apply to businesses that had changed hands after a plaint had been filed but before the award relating to it had been made; but that it would apply to businesses that had changed hands after the award was made. I suggest to the Acting Attorney-General (Mr. Groom) that that curious statement is worthy of explanation. After a plaint is filed, and before the award; is made, an assignee or transmittee has some chance to come in and be a party to the proceedings. After the award is made he has no such opportunity. I am therefore at a loss to understand why we should expressly ex- elude those who have an opportunity to come in before an award is completed, whereas we intend to apply the provision with certainty to those who afterwards take over a business.

I shall not further delay the seconu reading of this Bill. I record, with some satisfaction, that the Bill, so far as it goes, is an answer to our repeated complaints. It is a very tardy and, apparently, reluctant concession of what we have asked for; but we aregrateful for it. I think that the Government, although somewhat late in the day, has acted, under pressure, with very great wisdom in not allowing Parliament to go into recess leaving industrial conditions as they are at the present time.

Mr Makin:

– This action on the part of the Government proves the foresight of honorable members of the Labour party.

Mr BRENNAN:

– It does. I congratulate the Government upon its eleventh-hour repentance. I quite see that the appointment of these new judicial officers - not necessarily High Court Justices, but able, competent men of training and experience - will have an exceedingly good effect on ube minds of the people generally, and, in particular, on the minds of those who axe striving to get the benefits of this Court.

One commentary may well be made. Over and over again we have been charged with disloyalty to the determinations of the Conciliation and Arbitration Court. Over and over again men, both outside and inside this Parliament, have been charged with flouting the Court and having a desire to uproot it. My position is quite clear. I am not an enthusiastic believer in the Court. The Prime Minister seems to think I am, and has suggested thatmy interest in it is professional rather than political. I leave the taunt with no further comment, because it is hardly worth more. Apart altogether from that, I am not an enthusiastic believer in the principle. I rather believe that in these later days men can do, by organization, co-operation, and loyalty to each other, everything that we thought it was necessary to have an Act of Parliament to accomplish. Allthey want is a proper spirit of comradeship in order that they may get justice in the bargains that they make with their employers. That being so, I arn not slavishly devoted to the policy of conciliation and arbitration. But, the Court being in existence, and the workers showing an even extraordinary readiness Co come under its jurisdiction, I can only repeat that it was, an act of gross politicalindecency on the part of the Government to prevent the Court from discharging its functions. This, the latest amendment of the Act, coming although it does at the close of the session, is to be entirely welcomed, and I think it will be fraught with very good results.

Mr BOWDEN:
Nepean

.- There are three principles embodied in this Bill, and in regard to two of them there is apparently very little dispute. I confess, however, that clause 3 causes me some concern. The original provision that any plaint involving the question of an increase or decrease of hours should be heard by a Court of three Justices is a fair one. I recognise the force of the objection raised bythe Deputy Leader of the Opposition (Mr. Charlton) that by making this amendment of the Act and providing for a Court of Appeal we shall not expedite, but rauher delay, the giving of decisions in such cases. Instead of having in each case one application to one Court, we shall have two applications to two Courts. The objection raised by the Leader of the Country party must also be borne in mind. He has pointed out that in tihe interval between the making of an award relating to hours of employment and the hearing of an appeal in respect of it, that award will operate, and that if the appeal should result in the award being set aside a great deal of difficulty may be encountered in enforcing the Appeal Court’s decision. On the other hand, I understand that in quite a number of cases that go before the Courtthe question of hours is only a minor consideration, but that the whole of the remaining questions involved in the plaint have to be held up until a Court of three Justices can deal with that minor matter of hours.

Mr Blakeley:

– That is not so now. They have recently been dissecting claims regarding rates and condition’s from questions of hours.

Mr BOWDEN:

– If that is so- if the decision in regard to other and more important matters is not delayed because of the necessity to first of all get the judgment of three Judges on the question of hours - the arguments advanced by the

Deputy Leader of the Opposition (Mr. Charlton) and the Leader of the Country party (Dr, Earle Page) will still need to be answered before I can agree to the provision.

Mr BLAKELEY:
Darling

.- I am in accord with the provisions of the Bill, except clause 3, which, although it purports not to limit the operations of the Arbitration Court, will permit of their being delayed in a manner that will not provide facilities to the parties who are asking for awards. The last amending Bill provided for the appointment of two Deputies to sit with the President of the Arbitration Court and deal with the question of hours. The Labour party strongly opposed the measure, because, from the beginning of arbitration, one Judge had always dealt with this matter, and dealt with it satisfactorily. It was only when pressure was brought to beaten the Government by the employers’ organizations that the Government consented to make provision for three J udge. to deal with this question; but, after having passed an amending Bill through Parliament in order to absolutely prevent the Court from dealing with the matter, Cabinet refused to appoint the two additional Judges. As a consequence, the question of hours could not be considered for nine months. The Bill provides a further amendment of section 18a, which will enable an appeal to be lodged from an award delivered by one of the Deputies. The difficulty in this regard will be this: No appeal can be heard until at least some time has elapsed - it may be’ three months - and in the meantime employers and employees will become accustomed to the new conditions provided in the award, and if the employees are satisfied with the hours it fixes, they are not likely to accept a varied award as made by the Appeal Court. In any case, there is no power to compel them to do so. This ‘provision for appeals from the awards of Deputies will prove not onlycostly to the parties, but also cumbersome. The Leader of the Country party (Dr. Earle Page) suggests that no award should come into operation until three weeks or a mouth after delivery, during which time an appeal may be lodged. But that would simply make the process more cumbersome and unwieldy.

Mr Prowse:

– What is the honorable member’s view of the suggestion of the Leader of the Country party that the question of hours should be removed from the Court and decided scientifically?

Mr BLAKELEY:

– I am in agreement with any method that will investigate, from a scientific or social stand-point, the question of the hours of the workers ; but the trouble is that, although our Government may investigate such a question, they will not go any further in the matter. For instance, they have already declined to carry out the recommendation made by a Commission, comprising representatives of the employers and employees, which was appointed to investigate the question of the basic wage. If a Commission were appointed to deal with the question of hours from a health point of view, or to consider how long men can work, what speed they can attain, and what their productive power may be under varying conditions of work, I am afraid that the Government would not carry out any conclusion arrived at. Similar investigations have been made in America and Great Britain, in the latter country notably by Lord Leverhulme, who is of opinion that, after a man works for six hours, his productive power declines so that it does not pay the employer to work him any longer.

Mr Poynton:

– Lord Leverhulme’s employees work for eight hours a day.

Mr BLAKELEY:

– I believe that they do in some instances. I would welcome the appointment of any tribunal to settle the question of hours, but if it recommended that the working week should be forty-four hours, I am sure that the Government would not accept the finding. When the Conciliation and Arbitration Act was amended in order to provide for the appointment of two Deputies to deal with hours of work, the Government displayed extraordinary reluctance in respect to making the appointments, and I hope that if the Bill before us is agreed to the Government will not similarly hang up the appointment of further Deputies, at any rate, not for another nine months until another deputation of employers’ organizations waits upon them. If the Government would appoint two Deputies for the unexpired term of the President of the Arbitration Court, namely, six and a half years, and another two Deputies for at least three years, the congestion now existing in Court would be very quickly overcome. But it would be a fatal mistake to take Justices from the High Court or a Supreme Court, and ask them to arbitrate in respect to a couple of cases only. I hope that care will be exercised in the type of men selected to fill the positions. There are many men in the Commonwealth with long experience of arbitration matters who could do the work with conspicuous ability, and I have not the slightest doubt that if such men are chosen the present congestion will be considerably lessened. I opposed the passage of the Industrial Peace Bill, but I believe that the provisions of that measure which enable the parties to disputes to come together in councils and local committees could be applied with advantage to the arbitration system. The Conciliation and Arbitration Act does not bring employers and employees together under an independent chairman for the purpose of settling a dispute.

Mr Hughes:

– I think it does.

Mr BLAKELEY:

– There is provision for compulsory conferences at which the representation need not be equal.

Mr Bowden:

– But they can only be called where disputes have arisen.

Mr BLAKELEY:

– Yes. A compulsory conference can be called upon the application of one of the parties, but that is about the only provision in the Act which meets the position that I am putting forward, that employers and employees ought to be able to come together, as they can under the provisions of the Industrial Peace Act. I am sure that if similar provision was made in the Conciliation and Arbitration Act there would not be the congestion which now exists in the Arbitration Court, and that a great number of the cases which now occupy the time of the President of the Court would be disposed of by the parties themselves.

Mr GREGORY:
Dampier

.- [ regret that this Bill has been brought a in at such a late hour of the session, and that it is not possible for us to deal with the principal Act. “We have had a lot of work this session, and possibly the Government have not been able to give the matter sufficient consideration, but it is time that we came to some definite conclusion in regard to the powers of the Commonwealth Arbitration Court. The expense to which the community is put in connexion with the hearing of claims before this Court is preposterous. The Constitution states clearly that the Commonwealth Arbitration Court can deal only with disputes of an Inter-State character, but there is hardly a calling of any description in the Commonwealth whose employees are not endeavouring to bring it within the purview of this Court. We have the anomaly of State Courts dealing with certain industries, and having their awards overridden by those delivered by the President of the Commonwealth Court. Some persons are constantly demanding the amendment of the Commonwealth Constitution to enable the trouble in this regard to be overcome, but I am sure that it can be done more easily in this Chamber by clearly defining the industries that are to come within the purview of the Commonwealth Arbitration Court.

Mr Brennan:

– The Courts have been defining that ever since they have been in existence.

Mr GREGORY:

– We ought to do it ourselves.

Mr Brennan:

– There «has been the widest definition.

Mr GREGORY:

– Quite so, but if we limited the Act to certain industries, which are Inter-State in character, we should get over many of our present difficulties.

Question resolved in the affirmative.

Bill read a second time.

In Committee,:

Clause 1 agreed to.

Clause 2 (Deputy Presidents).

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– I move -

That the following words he added to the clause: - “ and (c) by adding at the end thereof the following sub-section:-

A Deputy shall receive such remuneration as the Governor-General determines, and the Consolidated Bevenue Fund is to the necessary, extent hereby appropriated accordingly.’ “

This clause, insignificant as it appears, is not without its bearing on this measure.

Amendment agreed to.

Mr. atkinson (Wilmot) [12.37].-

Great care ought to be exercised in regard to the term for which these Deputies are appointed. There will be no difficulty about utilizing their services whilst the present congestion continues, but when this business has been disposed of there may not be many cases brought forward; the employers and employees of the country may get a little more sense, and find a better way of solving their troubles. I do not wish the Deputies to be appointed for too long a term, in case we find, before that term has expired, that their services are unnecessary. For how long is it proposed to appoint these Deputies ?

Mr. hughes (Bendigo- Prime Minister and Attorney-General) [12.38]. - I quite appreciate what the honorable member has said, but some security of tenure must be offered, and it should not be so short as to afford no inducement to responsible and suitable men to accept engagements. I quite see that in these days, after the Washington Conference and the settlement of the Irish question, we can never know what may occur; still, I think there is “ life in the old dog yet.” Industrial disputes will not readily die out. I believe that the business of the Court will require this assistancefor a good long while, and, therefore, subject to what the Committee may say, I am of opinion that the Government ought to have power to appoint these Deputies for the unexpired balance of the President’s term. If the Committee desire a shorter period, let us take a vote.

Mr. atkinson (Wilmot) [12.39].- There would be no difficulty in obtaining the service of suitable men from the Bar in Victoria, or other States, for, at any rate, a term of five years.

Mr Blakeley:

– What is the difference between the term of five years and six and a half years?

Mr ATKINSON:
WILMOT, TASMANIA

– I think that men suitable for the job could be found to engage for a term of three years.

Clause, as amended, agreed to.

Clause 3 -

Section 18 (a) of the principal Act is amended by omitting sub-section (4) and inserting in its stead the following sub-sections : - “ (4) Where the Court, not being constituted by the President and by two or more Deputy Presidents, makes an award -

increasing the standard hours of work in any industry ; or

reducing the standard hours of work in any industry to less than fortyeight hours per week, or, where the standard hours of work in any industry are less than forty-eight hours per week reducing the standard hours of work in that industry, the award so far as it relates ‘to such increase or reduction shall be subject to appeal to the Court constituted by the President and at least two Deputy Presidents, and the Court so constituted may vary the award in regard to hours ofwork, and may, in that case, make such other variations in the award as it thinks are required by reason of the variation of the award in regard to hours of work. “ (5) In this section the expression ‘ standard hoursof work ‘ has reference to standard hours at the time when the award is made.”

Mr. charlton (Hunter) [12.40].- In the second-reading debate reasons were given why this clause should not be included in the Bill. As I explained, I and others on this side are really opposed to this clause, and to section.18 of the principal Act, and I think it would be as well if the Prime Ministerwould, as he has power to do, propose that that section be eliminated, thus leaving the matter of the standard hours to one Judge. This, I think, would meet with the wishes of all who are interested. After all, prior to the last amendment of the Act, which was made when the times were considered to be abnormal, one Judge performed this duty, and I see no reason why we should not revert to that plan. If we agree to the amendment of the Act now submitted it will result in prolonging the hearing of cases, because there will always be an appeal from one side or the other.

Mr Hughes:

– Of all the cases that have been heard before the Court very few have come before three Judges on appeal.

Mr CHARLTON:

– That is the very argument I used in support of my view on a former occasion ; there have been very few cases determined in that way, but there may be more in the future. Possibly out of the sixty cases now pending some twenty or thirty may have reference to hours, and if these cases are heard before one Judge, with the right of appeal, that right will surely be availed of, thus involving a rehearing and additional expense.

Mr Maxwell:

– And it may work out that the ultimate determination is an expression of opinion by two Judges out of four.

Mr CHARLTON:

– As the honorable member for Cowper (Dr. Earle Page) pointed out, it is possible that a decision by one Judge to reduce the hours to forty-four may on appeal be reversed, and forty-eight hours made the rule. Such a reversal cannot fail to give rise to a good deal of dissatisfaction, because men are not likely to be willing to return to forty-eight hours after having worked for some time on a basis of forty-four. Altogether, I think the Prime Minister would be acting wisely if he deleted this clause and allowed one Judge to settle the matter; otherwise, this Bill is badly required, and will have my support.

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– I shall be very glad to meet the honorable member (Mr. Charlton) in any way, because I am certain that his desire is to attain the very object the Government has in view, namely, the smooth working of the industrial machine. It is undeniable, of course, that two questions stand out as the main causes of industrial disputes - one is the question of hours, and the other the question of wages, though, of course, there are others. But ihe honorable member is wrong in supposing that the great number of cases heard before the Court now have reference to hours. While wages are ever, as it were, trying to adjust themselves to a new level, hours, until quite recently, seemed to have found a settled and .permanent basis. For many years in this country, after the principle of the eight-hour day had been established, things apparently were on a satisfactory footing. If ten cases come into Court, it is quite wrong to say that all have relation to hours, though there may be six or eight of them, and these might be settled by arrangement between employer and employed. However, the best answer to the honorable member’s argument is the fact that the President of the Court, with all his experience, says that if we insist on maintaining three Judges, as now, he cannot go on; and the remedy he suggests is that now before the Committee.

Mr Charlton:

– Did the President say it was necessary to have three Judges for such cases?

Mr HUGHES:

– What I understood was that the President was of the opinion that if three Judges were required in order to settle hours, then he could not carry on unless these Deputies were appointed. I admit that I had not seen the President to speak to since last January, but we then discussed the position of the Court generally. He wished to know whether it was our intention to create any more Tribunals under the Industrial Peace Act. On that point the Judge desired certain assurances, which I gave him. Now we have his assurance that the proposed amendment will be of very great benefit, and the Court will work more smoothly and expeditiously. The hours of labour ought not to be continually in a state of flux, so that no one. knows from one day to the other what is going to be the standard in Australia. It would be a very good thing if some Court laid down, once and for all, what are to be the standard hours for a period of two or three years at least, and thus put, an end to this uncertainty and confusion. No one man can settle all industrial details in Australia; indeed, I do not think that one man- should have the right to do so. No one is a more stalwart supporter of the privileges or rights of tie people than I am, but I do not admit that forty-eight hours k too much for men. In all but a few industries, which can be counted on the fingers of my right hand, it fs not too much. As to mining, I do not offer any opinion, but I can say that in some mines forty hours may be far too much, in others not enough. But the great bulk of the workers of the country are engaged in work that I myself could do in a forty-eight hour week without fatigue; and what I can do others can do, and probably better. For men engaged in rock chopping, sewer mining, mining at great depths or under bad conditions, and some other strenuous occupations a working week of forty-eight hours may be too long, but by and large it is not too much. The honorable member for Hunter has suggested that after one Judge has awarded a week of forty-four hours there will be weeping and gnashing of teeth if, as a result of appeal to the three Judges, the .workers have to revert to a forty-eight hours’ week. That would be only natural. But the point I wish to make is that if I, as one of the Deputy Judges, awarded forty-eight hours per week, and an appeal were lodged, I would suspend the operation of the award until the appeal had been heard And in 99 cases out of 100 that will be done.

Dr. Earle Page. Why not make it mandatory ?

Mr HUGHES:

– If the honorable member can get such an .amendment carried through this .Committee I shall have no objection. I think any Judge will decide that while his award is the subject of an ‘appeal its operation should be suspended. Whilst I desire to meet the wishes of the honorable member for Hunter, I reluctantly have to refuse his request that this clause should be struck out.

Mr Maxwell:

– Suppose that the primary Judge fixes forty-four hours, and an appeal is made to an appellate Court consisting of the President and two Deputies. Suppose the President supports the view of the primary Judge that the hours should be forty-four and the two Deputies sitting with him favour a week of fortyeight hours, what will be the law?

Mr HUGHES:

– The decision of tha majority of the Court.

Mr Maxwell:

– That means that two Deputies may award a week of forty-eight hours, although the President and ‘another Deputy think that the hours should be only forty-four per week.

Mr HUGHES:

– At present there is one Judge in the Arbitration Court. We propose to appoint two Deputies.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– The Act provides for two or more.

Mr HUGHES:

– We are appointing two, and those two, together with the President, will constitute the Court of Appeal. Therefore an appeal from any one of the Judges must come before the whole three, including the primary Judge, who constitute the full Bench.

Mr Charlton:

– That is all right if the Bench consists of only three Judges. But the Act provides that there shall be not less that three.

Mr HUGHES:

– We shall not appoint more than three, including the existing President, and any appeal must be decided by the opinion of the majority of the Bench.

Sitting suspended from 1 to 2.30 p.m.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

.- I urge the Committee to hasten slowly, or the title of the Bill may become a misnomer, because the effect of the measure may be, not to conciliate and settle industrial disputes, but to create continual strikes. The Minister may suggest that what I desire might be done by regulation, but I think it would be better to deal definitely in the Bill with the subject of appeals. Personally I am opposed to the giving of the right of appeal in arbitration matters. An arbitration finding should be ‘final in regard to the case that is dealt with. Generally an arbitration award is a compromise, and that compromise having been arrived at, effect should be given to it. If the right of appeal is given, there will be no end to the decisions; a case will be taken from Court to Court, until ultimately it is won by the party having the longer purse. While it may be possible to arrange for appeals from decisions regarding rates of wages, I am satisfied that no system providing for appeals from findings on questions of hours would be satisfactory. If one Judge decided that the hours worked by a set of employees should be forty-four per week, and on appeal, four months later, it were held that forty-six or forty-eight hours should be worked, there would be a strike against the enforcement of the judgment of the higher Court. In no case, moreover, could a finding in respect of hours be made retrospective. I would prefer to allow to stand the provision to which we agr-d last year rather than have it altered in the way suggested, unless an award be made inoperative if appealed against until the appeal has been heard.

Mr Hector Lamond:

– That would provide an inducement for appealing.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Yes, and therefore I would prefer the law to stand as it is. The question of hours is so important that if we are to continue our present unscientific way of determining it, there should be three Judges to hear any case in which it arises. If, however, we dealt with it in the way in which it is beginning to be dealt with in all large manufacturing countries, that is, on a scientific physiological basis, the evidence that would be brought should be sufficient to enable one Judge to give a satisfactory decision; one that would satisfy not . merely those immediately concerned, but also the public.

Mr Foley:

– Would you apply that method to every industry?

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– I would apply it to the basic industries. In certain outdoor occupations it matters little whether a man works a couple of hours more or less in a week, but in indoor industries, especially in certain trades and manufactures, employment for more than a certain number of hours per week has been proved by the experience of the last seven years to affect detrimentally, not merely the output of the workers, but their general health and civic fitness. This Parliament has for months been considering a Tariff to encourage manufactures, and it is therefore the more important that means should be provided for properly determining questions of hours and conditions. We know what is being done in this direction in Great Britain, in Germany, and in the United States. During the war there was appointed in Great Britain the Health of Munition Workers Commission, whose work has since been taken over by the Industrial Fatigue Research Board, whose function it is to do what we in Australia are asking Judges to do, namely, to determine facts which are ascertainable only by scientific investigation. Fatigue is not to be judged merely by the sensation of tiredness. As has been proved during the past seven or eight years, it manifests itself by a diminished output. That is the first sign of overwork. Several big manufacturing concerns in Great Britain are employing continuously at big salaries scientific investigators, whose work it is to determine the number of hours for which each particular employee can best be kept at his job. In this way it is being found possible in many cases largely to reduce running costs by not working men after their output begins to decline. In rural occupations the health of the workers is not affected detrimentally by a slight extension of hours, but in big city workshops, where menare attending to machines, fatigue develops more quickly. In such occupations the application of some scientific method is desirable for determining the number of hours than can best be worked. At the present time the question of hours is settled on the mere ipse dixit of a Court before which little scientific evidence has been placed. The proper settlement of the questions of hours and conditions will have a decided effect on the national health. For the present I should like to see the settlement of these matters intrusted to a Court of three Judges, without appeal; but I hope that in the near future methods closely analogous to those which are being employed in other parts of the world, particularly in connexion with big manufacturing industries, may be adopted. The Commission of which I have just spoken says in its report that -

It is certain that unless our industrial life is to be guided in the future by the application of physiological science to the details of its management, it cannot hope to retain its position hereafter among some of its foreign rivals, who already in that respect have gained a present advantage.

I move -

That the following new paragraphs be added to sub-section 4: - “(c) Every such appeal shall be instituted by notice of appeal, which shall he served and filed as prescribed, and no other formal proceeding other than the notice of appeal shall be necessary.

When notice of such appeal has been duly instituted, the enforcement ot that portion of the award appealed from shall be stayed pending the decision of the Court, constituted by the President and by two or more Deputy Presidents, on the hearing of the appeal.”

Mr BLUNDELL:
Adelaide

.-I hope that the Committee will reject the clause. One reason for voting against it is the fact that the learned legal luminaries in the Chamber have expressed greatly differing opinions as to its effect. To my mind, the last explanation of the Prime Minister in regard to it wasas clear as mud. I have had experience of industrial litigation, and I have always found it to be the general feeling of employers and employees that there should be no right of appeal, because what is needed is finality. Parliament has already referred to three Judges the decision of the question of hours. To that I do not object. What is now proposed is to allow one Judge to determine an application respecting the number of hours to be worked and to give a right of appeal from his finding. That will mean the trying of the same case twice over, when there is already the machinery by which it can be settled in the first instance. The Prime Minister says that the provision has been put before Parliament because the President of the Arbitration Court thinks tha.t the method proposed will expedite business. I realize that that gentleman was appointed to the position he holds because of his special fitness and ability, and I have the greatest respect for him ; but even Judges are not infallible; and I think that he suggests a course which would mean two hearings of a case instead of one, and would create great dissatisfaction, because, as a general rule, the loser of the first hearing, whether employer or employee, would be sure to appeal. It would be better to let both sides know that if there isa question of hours to be settled there is a Court of three Judges available to determine it. Let us not provide for an appeal which is unnecessary, and which should be avoided in the settlement of industrial disputes.

Question - That the paragraphs proposed to be added (Dr. Earle Page’s amendment) be so added - put. The Committee divided.

AYES: 12

NOES: 39

Majority . . . . 27

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Question - That clause 3 stand part of the Bill - put. The Committee divided.

AYES: 24

NOES: 0

Majority . . 7

AYES

NOES

Question so resolved in the negative.

Clause negatived.

Clauses 4 and 5 agreed to.

Title agreed to.

Bill reported with amendments. Standing Orders suspended; and report adopted.

Message recommending appropriation reported.

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Hughes) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a Bill for an Act to amend sections. 14, 18a, 24, and 29 of the Commonwealth Conciliation and Arbitration Act 1904-1920.

The CHAIRMAN (Hon J M Chanter:
RIVERINA, NEW SOUTH WALES

– I shall have the matter inquired into, and will see that the bells are restored.

Resolution reported and adopted.

Bill read a third time.

page 14117

LOAN APPROPRIATION BILL

Assent reported.

page 14117

WAR PRECAUTIONS (COAL) BILL

Motion (by Mr. Hughes) proposed, by leave, and agreed to -

That leave be given to bring in a Bill for an Act to amend section 8 of the War Precautions Act Eepeal Act 1920.

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

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

(By leave.) - I move -

That this Bill be now read a second time.

The purpose of this Bill is to continue” for another year legislation now in force giving the Government power to control coal. It is known colloquially as the Commonwealth Coal Control Act, and is, technically, an exercise of powers conferred by the War Precautions Act Repeal Act. Unless this Bill is passed the existing measure will expire on 31st December of this year, but the coal proprietors and the miners desire an extension of it for another year, and, in pursuance of that generally expressed desire, I am moving to continue the legislation for the period named.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 14117

WAR PRECAUTIONS ACT REPEAL BILL

Second Reading

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– I move -

That this Bill be now read a second time.

The purpose of this measure is to amend section 7 and to repeal section 19 of the War Precautions Act Repeal Act 1920. Section 7 provides that the War Precautions Regulations controlling the registration and activities of companies and -firms operating within the Commonwealth shall continue until the end of the present year. This Bill will extend their operation until 31st December, 1922, but not in their entirety, because it is proposed to limit their applicacation so far as they affect firms, a matter which can easily be dealt with by the various State laws dealing with the registration of firms, and to continue the regulations for the extended period so far as they relate to foreign corporations and trading or financial corporations formed within the limits of the Commonwealth.

Mr Fleming:

– You still wish to keep control over financial corporations within the Commonwealth.

Mr GROOM:

– The regulations will apply, so far as they relate, to foreign corporations, and trading or financial corporations formed within the Commonwealth. During the war, and for some time afterwards, there was a suspension of the registration of foreign corporations desiring to carry’ on business in Australia, but latterly about thirty have been registered. Dealing with this subject, the Treasurer in his Budget speech said -

Foreign capital. Under the WarPrecautions Repeal Act 1920, it is an offence to register in Australia any company with capital partly or wholly subscribed outside the British Empire, except with the consent of the Treasurer. Since the beginning of the current year, authority has been issued for the registration in the Commonwealth of twenty-seven foreign companies with a total subscribed capital of, approximately, £13,500.000 sterling. The bulk of this capital has been found in the United States of America. Seven of the companies, with a subscribed capital of about £3,500,000 sterling, have been established to carry on industrial and productive operations iu the Commonwealth, two to conduct fire and marine insurance business, and eighteen to carry ontrading operations.

We are dropping altogether the necessity for the registration of firms as distinct from corporations.

Mr Charlton:

– You are reverting to the position that existed prior to the war ?

Mr GROOM:

– Yes, we are leaving the registration of firms to be dealt with by State laws. All we propose to do now is to continue the regulations so far as they relate to foreign companies and trading or financial corporations formed within thelimits of the Commonwealth. The . Treasury and the Crown Law Department have for some time had under consideration the question of submitting to the Commonwealth Parliament a comprehensive measure dealing with company law under the present constitutional powers. But at this stage it would be impossible to bring such a big Bill before the House. We are now simply asking for an extension for twelve months of the Commonwealth control over these corporations. In the meantime the matter of exercising more complete control over them can be taken into consideration.

The other part of the Bill deals with the repeal of section 19 of the War Precautions Act Repeal Act, which requires the agents in Australia of all overseas companies and firms to furnish particulars regarding the business of their principals to the Collector of Customs in the State in which their chief place of business is situated. These particulars include the name, address, capital, and balance-sheet of the company or firm. But under the Companies and Firms Acts of the States all companies and firms carrying on business in Australia in tiheir own names are required to be registered, irrespective of whether their head offices are established in Australia or abroad. The effect of section 19 has, therefore, been to require companies and firms already registered in Australia to be practically re-registered with the Department of Trade and Customs. This obligation has imposed a great deal of trouble on firms, and strong objection has been taken by British companies, especially to the provision requiring them to furnish particulars of their financial position to tiheir agents in Australia for submission to the Department of Trade and Customs. Having given consideration to these representations, the Department found it practically necessary to suspend the provisions of the section, and in. the circumstances they have come to the conclusion that it would be better to repeal it. The Bill provides for its repeal.

Question resolved in the affirmative.

Bill read a second time, and reported without amendment; report adopted.

Standing Orders suspended and Bill read a third time:

page 14118

ELECTORAL BILL

Second Reading

Mr POYNTON:
Minister for Home and Territories · Grey · NAT

– I move -

That this Bill be now read a second time.

I do not think that a long speech will be required from me to impress on honorable members the necessity for this simple little measure. A Bill was passed by the Tasmanian Parliament in 1907 enabling a member of the State Legislature to resign his seat and contest a Fede- . ral election. Provision was made that, on a request from the member so resigning his seat, the issue of a writ to fill the vacancy should be delayed until after the declaration of the poll of the election he was contesting. It was not provided that if he did not succeed in winning the Federal election his seat in the State Legislature should be kept for him, but that defect was remedied in 1917, when the State law was amended by the following provision: -

If the member so resigning his seat, and notifying the Governor as aforesaid -

  1. fails to secure election in Tasmania for the Parliament of the Commonwealth; and
  2. is nominated as a candidate for the vacancy occurring through his own resignation, as aforesaid - the Returning Officer to whom the writ is directed shall forthwith, without holding a poll, publicly declare him to be duly elected to fill the said vacancy, and the writ shall be so returned, notwithstanding anything to the contrary contained in this Act.

Following on that, every State in the Commonwealth has passed similar legislation.

Mr Jackson:

– And a number of people in Tasmania are ashamed of it.

Mr POYNTON:

– There are, however, two States in which the Bills have been reserved for His Majesty’s Assent, presumably on some constitutional ground. Our Electoral Act made the provision that a State member desiring to be a candidate for the Federal Parliament must resign his State seat fourteen days before the nomination; and the Bill before us maintains that position. I should like to draw attention to one or two anomalies that may arise under the legislation of the States; and here I may say that I am satisfied that this Parliament has the constitutional right to make any electoral law it desires.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Does this Bill increase the disqualification in any way ?

Mr POYNTON:

– No; the disqualification is exactly the same as before. However, let us suppose there is an election for the Federal Parliament, and that there are three candidates, one, the State member who has resigned his State seat, the retiring Federal member, and another candidate nominated’ from outside. Let us further, assume that the outsider wins, which, of course, is quite probable; and then what is the position? If there- happens then to be a vacancy in the Parliament of the State, the Federal member is not eligible to contest it because it is given back to the man who had resigned to contest the Federal seat,” and did not succeed. Let us take another case. We have heard a great deal of talk about parliamentary salaries, but I venture to say that £875 a year in New South Wales, the allowance of aState member, is infinitely better than- £1,000, the allowance of a member of the Commonwealth Parliament. Let us assume that certain , members of the New South Wales Parliament decline to contest a seat in a Parliament which meets in Melbourne, against which city there is much complaint because of the climate, and so forth, and because they regard £875 as a member of the New South Wales Parliament as preferable. One State member, however, may favour Melbourne, and decide to contest a Federal seat. He may win it, but if he is defeated, his State seat remains to him. The whole position is ridiculous. However, I shall not “stone-wall1” my own Bill, but simply move the second reading.

Mr CHARLTON:
Hunter

.- This is a Bill of practically one clause, evidently brought in, if I may say so, in a. .spirit of retaliation. 0 The State Parliaments, or some of them,, have passed certain legislation.

Mr Poynton:

– All of them.

Mr CHARLTON:

– I quite agree with the honorable member for Bass (Mr. Jackson) that such legislation is not to the credit of the States. But, after all, the State Parliaments are the judges of their cwn legislation, just as we are of ours. If the States do wrong, that is no reason why we should follow in their footsteps.

Mr Bamford:

– Let»us put them right!

Mr CHARLTON:

– We cannot put them right by means of this Bill. Although the States have passed the legislation described, I do not think that we here are doing right in preventing State members from, being candidates for this Legislature. When I was a member of the State Parliament in New South Wales, I had no desire to become a. Federal member, but my constituents requested me to do so, and, thereupon, I resigned my seat, throwing all into the melting pot. Had I been a, member of a State Legislature I should have opposed such legislation as they have passed in thisconnexion, but, at the same time, I submit that we are not justified in retaliating with a drastic measure of this kind.

Mr Hector Lamond:

– Who is to determine the qualifications for a seat in this Parliament 1

Mr CHARLTON:

– This Parliament, certainly; but I do not see why we should pass restrictive legislation which, as I have said, is really retaliatory. I can quite understand a Federal member on the platform opposing State legislation of the kind, but beyond that I think we ought not to go. If State members desire to compete against me, they are welcome to do so, and if they can succeed they will have been perfectly justified.

Mr Bamford:

– You are speaking individually.

Mr CHARLTON:

– I apply my word.? in a collective sense. Of course, honorable members may differ from me, but, in any case, I do not think it is necessary to pass this Bill.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

.- I regard the action of the various State Parliaments in making it possible for their members to contest Federal seats.and yet retain their State seats, as not fairly playing the political game, and as. indeed, a very dirty action. However, two wrongs do not make a right. I am satisfied that we will act unwisely, and place ourselves in a false light before the people of Australia, if we pass this Bill. THe measure increases the disqualification on men who desire to stand for election tr this Parliament, and I doubt whethethat is constitutional; but whether it i? constitutional or not, I am opposed te legislation of this character. We cannot, have the avenue to our National Parliament obstructed in any way.

Mr BRENNAN:
Batman

– J indorse the general view of the measure taken by my leader (Mr. Charlton), and I do not propose to give countenance to i either on the second reading or in detail. We are not really concerned with the motives that animated the action of the State Parliaments except in sofar as that action may directly concern our own powers and duties. Whenever an opportunity offers I shall widen rather than restrict the avenues which permit candidature for membership of this Parliament. I hope I shall never be a party to restricting the right of any individual to come here. I do not propose to examine the motives of the State legislators, and I do not intend to vote for a Bill which, apparently in a paltry spirit of retaliation very unbecoming the Australian Parliament, intends to rid members of this Parliament of any competition. We can afford to welcome competition from whatever source it comes; and if members; of the State Legislature desire to stand for this Parliament, it is their affair and not ours. This. Bill, however, is very much our affair, and I shall oppose it.

Mr HECTOR LAMOND:
Illawarra

– I point out to the Deputy Leader of the Opposition (Mr. Charlton) and the Leader of the Country party (Dr. Earle Page) that the law of the Commonwealth since its inception, or, at any rate, for the past fifteen years, has been that a member of a State Legislature who wishes to offer himself for election to the Commonwealth Parliament should resign his seat fourteen days before nomination. There has been a concerted move on the part of the State Parliaments to undermine by covert means that legislation. The Commonwealth ‘Parliament now proposes to assert its undoubted right to prescribe the qualifications of those who seek entrance to it, and to preserve the conditions which have existed until now, without question, so far as I have ever heard, by the electors of the Commonwealth or of the States. I have taken part in many political campaigns, in some as a principal, and I have never been questioned by an elector as to the power which the Commonwealth has maintained almost from the beginning in this matter. The arguments which led to that provision being placed in the Commonwealth Electoral Act are as sound now as they were the day they were passed by this Parliament. What we are asked to do to-day is not to make a new law, a “retaliatory” ora” mean and paltry ‘ ‘ law, as the honorable member for Batman (Mr. Brennan) describedit, but to preserve the law as it has prevailed throughout the history of the Commonwealth. There is one phase of the question, to which attention may be called. When the electors send a man into the State Parliament, it is to do State work. How can any one justify the contention that a man so elected to discharge State duties may throw over the State electors and contest a seat in the Federal Parliament, thus depriving the State electors who originally elected him of the right of pronouncing judgment on his conduct ? It is our duty to preserve the rights of the electors rather than the rights of State members-. If the Commonwealth Parliament thinks that that restriction should be removed, it is the authority to remove it. But we should resist, with all the power we have-, any attempt on the part of StatePaliajnents to prescribe the qualifications of candidates for this Parliament. That, undoubtedly, is the right solely of this Parliament.

Mr FENTON:
Maribyrnong

– Some time ago I asked a question of the Prime Minister in regard to this matter; but I. had not. in mind the purpose of the Bill which is now before us. Four of the six State Parliaments have made provision that although their members may resign in order to contest Federal seats, their State seats shall remain vacant until the Federal election is over. If a State member, who has resigned, is not. successful, he automatically returns to his seat in the State Legislature.

Mr Foley:

– He does not resign; he merely places his resignation in the hands of the Speaker.

Mr FENTON:

– Unless he can prove that he had resigned from his seat in the State Parliament before nominating for this Parliament he cannot occupy a Federal seat. If he had not legally resigned, he can, if elected to this Parliament, be unseated.

Mr Riley:

– He writes out his resignation; but asks the Speaker not to give effect to it.

Mr FENTON:

– I, as a layman, contend that unless he can prove that he has resigned according to the law he is not eligible to stand for a Federal seat, and, if he were elected, a protest by the defeated candidate wouldprobably unseat him.

Mr Brennan:

– The honorable member is now discussing a point which is not before us, but which might arise.

Mr.FENTON. - I am pointing out the privilege which the State Parliaments have granted to their members, and am contending that such members must bond fide resign their seats before they can be eligible to nominate for a Federal seat.

Mr Poynton:

– The resignation is only make-believe, and no by-election follows if the State member is not successful in his candidature for a Federal seat.

Mr FENTON:

– I would hesitate to take a chance of getting a seat by what I consider a very doubtful point in law.

Mr Jackson:

– The Leader of the Opposition in Tasmania opposedthe honorable member for Darwin (Mr. Bell), without resigning from the State Parliament.

Mr Maxwell:

– If he held an office of profit under the Crown he was not eligible for election to this Parliament.

Mr FENTON:

– I understand that the State Parliaments have made the seats of their own members safe according to State laws, and have endeavoured to, at the same time, keep within the four corners of the Federal law, so that, if a State member who contests a seat is successful, he can hold the seat. A number of members of this House, and, I dare say, many of the outside public, inferred from the question I put to the Prime Minister that I wished to deny the right of the State member to have his seat safeguarded while he contested a Federal election. That was not my policy, and I intend to vote against this Bill. I did ask the Prime Minister if the State Parliaments made provision for their members to contest a Federal election without forfeiting their State seats, he would be prepared to make provision for Federal members who desired to contest seats in the State Legislatures, to have their Federal interests safeguarded in the same way.

Mr Foley:

– Would that be fair?

Mr FENTON:

– I agree with the reply that the Prime Minister gave to me that in fairness what was sauce for the’ goose was sauce for the gander. The State Parliament is the goose, and the Federal Parliament is the gander. If the Government will introduce a Bill which will give Federal members rights similar to those which the State Parliaments have given to tiheir members, I shall support it; but I must vote against this measure.

Mr CHANTER:
Riverina

.- I wish to put before the House two phases of this proposal. It is clearly laid down in the electoral law that no person can occupy the dual position of member of the House of Representatives and member of the Senate, and that principle was embodied in the Commonwealth electoral law, which provides that a State member must resign his seat fourteen days before nominating for a seat in the Commonwealth Parliament. That is,I believe, a wise provision. All the State Parliaments have passed certain legislation, not identical, but of similar purport, to allow State members to retain their seats while they are soliciting the suffrages of the Commonwealth electors. You, Mr. Speaker, know that a resignation which is not to have effect is not a resignation. Under the electoral laws of both the States and the Commonwealth, immediately a resignation has been received by Mr. Speaker, if it is bond fide, the seat of the retiring member is declared vacant, and any qualified person in the community may then nominate for the vacancy. But that is not what is proposed under the new State laws. The resignation is to be a mere formality. It is to be held in abeyance by the Speaker; if the State member who is contesting a Federal seat is successful, effect is given to it; if he is not successful, he simply resumes the seat which he occupied before he nominated for the Federal Parliament.

Mr Poynton:

– And in a number of the Stateshe would continue drawing the salary ofa State member.

Mr CHANTER:

– While his resignation is held in abeyance he remains a member of the State Parliament, and is entitled to any emoluments attaching to the office. This Bill does not impose any new disability; it is simply giving affect to the Constitution, which requires a State member to resign bond fide his State seat fourteen days before nominating for this Parliament. Another unfair advantage will be given to the State member over other possible competitors for the same seat in the National Parliament, and from personal experience I know what the effect will be. The honorable member for Maribyrnong (Mr. Fenton) is in the fortunate position, financially, of representing a metropolitan constituency, an election for which does not involve much travelling or expense. But I ask him to consider the vastlv different conditions in a country electorate, where electioneering involves :ravelling hundreds, and in some cases thousands, of miles by railway and other means. If one of the candidates is a State member, he will hold a railway pass, and that’ will give him an unfair advantage over his competitors. A candidate who is neither a retiring member of this Parliament nor a member of the State Parliament will have to pay his fares wherever he goes.

Mr Makin:

– Might not the same argument be urged in relation to ourselves at a general election ?

Mr CHANTER:

– I have said so. But when the State member resigns his seat he ceases to have parliamentary duties to perform, whereas the Federal member who goes up for re-election has his parliamentary duties to perform right up to the date of the election.

Mr Maxwell:

– Can a man use his railway pass after he ceases to be a member of Parliament?

Mr Poynton:

– He retains it until his successor has been appointed.

Mr CHANTER:

– The Railways Commissioners call upon a defeated candidate a few days after an election to return his pass, so that it may be given to his successor. A member who resigns his seat has to return his pass immediately effect is given to his resignation. I think it would be unfair to place a handicap ,on men contesting Federal seats, especially in large country electorate?, where a great deal of travelling has to be done. In my view, we should give effect to the intention of the framers of the Constitution, and make it impossible for a man to be at once a member of a State and the Federal Parliament.

Mr Gregory:

– There is nothing in the Constitution which prohibits that.

Mr CHANTER:

– It was the intention of the framers of the Constitution, who were the framers of our first electoral law. I think that the Bill is needed, and I shall support it:

Mr MAKIN:
Hindmarsh

.- I. agree with the Deputy Leader of the Opposition (Mr. Charlton) that if the State Parliaments have done something wrong, although personally I do not contend that they have done so, we shall not do well in following their example. I find no justification for the course proposed by the Minister.

Mr Poynton:

– All we are doing is to prevent the State authorities from evading our law.

Mr MAKIN:

– Anything done contrary to, “or by way of evasion of, our law can be brought before the proper tribunal, the High Court, by appeal. It seems to me that the measure is a saving-of-seats proposition, and has been rightly described as the “ S.O.S.” of the Government. The people should have the widest choice iu electing representatives to this Parliament. I always realized the injustice when a Government worker, being required to resign my position to contest a parliamentary election; it is an absolute restriction to the attainment of a higher degree of public service and citizenship. I will, as far as possible, endeavour to remove all such barriers.

Mr Jackson:

– If a Federal member is defeated he has no chance of winning a State scat.

Mr MAKIN:

– At all events, we should do nothing to restrict the choice of the people. I have a right to the position of a Federal representative only while I . retain -the confidence of the people. ,

Mr Foley:

– But both Federal and State candidates should start off the same mark.

Mr MAKIN:

– As a Democrat, and one who desires to retain his position only with the good will of the electors he has the honour to serve, I cannot support the measure.

Mr BELL:
Darwin

.- I am not in favour of restricting the choice of the people in the election of representatives to this Parliament, and, therefore, I shall vote against the Bill, even though the State Parliaments may have found a way of circumventing the intention of the Federal authorities that a State legislator should not be a candidate for Federal honours. As a sportsman, I wish the field to be as wide as possible, because the greater the competition the more valuable the victory. If I am de- feated by an opponent who is a member of the State Legislature, obviously my services have not been altogether satisfactory to the electors, and I must bow to their decision without complaint. But if I am chosen against the competition of a State legislator, my victory is the more meritorious. In Tasmania, when a vacancy occurs in the State Parliament, a by-election is not held, but a recount is made of the votes cast at the last general election, and the next man on the list is chosen to fill the vacancy. We have there group electorates, each returning six members, elected by preferential voting on a system of proportional representation, and the seventh man is chosen without a contest to fill any vacancy arising through the resignation or death of any ot the elected members of a, group. Therefore, it seems to me that the proposed legislation will not do what it is intended to do, because, if a State member stands for a Federal constituency and is defeated, he will have the right, although he has resigned his State seat, to take it again, being preferred before the candidate next below him on the poll at the previous State election. But, in any case, I desire, as I have already said, that the ‘ people shall have as wide a choice as possible. The proposed legislation seems to me retaliatory, and likely to be resented by the States. It may create a feeling between the members of the State and Federal Parliaments which we do not wish to create.

Mr ATKINSON:
Wilmot

.- I do not think that we can afford to pass legislation of the kind now proposed. The people should have the widest choice in the selection of representatives to this Parliament. I am not in favour of curtailing their choice.

Mr Poynton:

– The Bill does not impose any restriction other than has existed since the inception of Federation..

Mr ATKINSON:

– If we say that a State legislator is ineligible for a Federal seat, we impose a restriction on the choice of the people, and whatever the State

Parliaments may have done, we should not follow a bad example. In Tasmania, under the proportional system, members are elected in groups, six for each division. At one time, when a* State member resigned his seat to contest a Federal constituency, he accompanied his letter of resignation with a request to the Governor in Council that the State by-election which the resignation would render necessary should not be held until after the Federal election. Then, if he lost the Federal contest, he had a chance of regaining his State seat. But as it was found that the frequent holding of hyelections tended to upset the balance of representation secured at the general election, it was decided not to hold byelections, and to fill any vacancy with the candidate next on the poll after the six which had been chosen for any group.

In no circumstances, therefore, is the retiring Federal member given a chance’ to contest the State seat. We are not here, however, to serve our own personal interests. We have to take a broader view of these matters. It might be very convenient for us personally to render it impossible for A, B, and C, who have seats in the State Parliament, to run against us. A State member certainly has a great advantage over, a Federal member if he chooses to take* opportunity by the hand. Those of us who represent distant States have to be away from our electorates for mouths at a time while the Federal Parliament is in session. On the other hand, a member of the State Parliament is constantly moving amongst the people, and it is very easy to put forward the suggestion that the Federal member is rarely in his division. The fact that the Federal member is attending to his duties in this Legislature is often overlooked. I have no reason to complain, because I have notsuffered in that direction; but I know that the seats of many Federal members have been undermined in their absence. Having regard to all the facts, however, we cannot properly cut into the broad, general principle that the people should have the widest choice in the selection of their representatives, and for that reason I cannot support this Bill.

Mr LAVELLE:
Calare

.- Before setting out briefly the grounds on which I oppose this Bill, I wish to congratulate the honorable member for Riverina (Mr. Chanter) on the excellent case he has put up on behalf of those who support it. I cannot say that I agree with the statement made by him, that this is really an attempt on the part of the Government -to safeguard the rights of the people, and to observe the spirit of the Constitution. In my view it is a deliberate attempt to debar members of State Parliaments from entering this House, and would, therefore, restrict the choice of the people. As the honorable member for Hindmarsh (Mr. Making has said, this might well be called “ A Save Our Seats Bill,” and I hope that it will be rejected. I am not going to cast a vote to restrict the choice of the people or to impose any obstacle in the way of a member of a State Parliament who desires to offer himself for election to this

Legislature. There are a great many excellent men serving the people in the smaller sphere of State politics. If they desire to enter the Commonwealth Legislature, or if the electors desire that they should represent them here, those men should have the right to submit themselves to the will of the people withouthaving to resign their State seats. If that were not allowed, then the people might be deprived of the services of such men in both State and Federal politics. I regret that it .should have been considered necessary for the State Parliaments to pass an Act requiring, any of their members who proposes to stand for a Federal seat to put in a “ make-believe resignation.” It should be unnecessary even to “make-believe.” The Commonwealth Electoral Act should be so wide as to enable State members to contest Federal seats without resigning or pretending to resign their membership of the State Parliaments. A member of a State Legislature could not be returned to this House unless a majority of the electors in the division for which he stood determined that he should represent them.

The Minister (Mr. Poynton), in moving the second reading of this Bill, said that members of the New South Wales House of Assembly were receiving £875 a year, and were really in a better position than are members of the Commonwealth Parliament, who receive £1,000 a year. I recognise that from a financial point of view they are better off; and, while I admit that £1,000 a year is an insufficient allowance for a member of this Legislature, I do not think that any member of Parliament has sought election merely because of the allowance attaching to membership. I am convinced that the majority of the members of the State and Federal Parliaments have sought election only because of a sincere desire to serve the people. We may not all look at political questions from the one stand-point; but I do not think the members of either the Federal or any State Parliament have been moved to seek election merely to secure the allowance attaching to membership. One honorable member has said that it might be advisable to provide for members of this Parliament contesting seats in the Legislatures of the States without having to resign. I do not think, however, that any member of the National Parliament would willingly retire from Federal poli- tics for the sake of entering a State Legislature. If there are any who would do so, no obstacle, such as resignation from this Parliament before seeking such election, should be placed in their way. An important point was touched upon by the honorable member for Riverina, when he pointed out that State members contesting a Federal seat receive their parliamentary allowance up to- the date of election, whereas as soon as this House is dissolved, Federal members cease to draw their allowance, although their Federal duties continue up to the very day of election. That is not an argument in favour of this Bill; but it is certainly an argument in favour of a further amendment of the principal Act, so that Federal members shall be paid up to the date on which they go out of politics, either voluntarily or by the will of the people. I feel sure that the good sense of the House* will prevail, and that this Bill will be rejected. I am convinced that its sole aim is to prevent members of State Parliaments from standing for election to the Commonwealth -Parliament without running the risk of losing their State seats. This is not, as has been urged, a Bill designed to carry out the spirit of the Constitution or. to protect Commonwealth rights. It springs from a spirit of retaliation, and its object is only to safeguard the privileges of members of the Federal Parliament by restricting those of members of the State Legislatures.

Mr FOLEY:
Kalgoorlie

.- T propose to offer a few observations with regard to this Bill, which gives rise to a question with which we shall be faced whenever the next general election takes place. A man who enters into competition with others, whether it be in business or in sport, should be satisfied with a fair handicap. If a man, in his desire to represent the electors, would impose an undue handicap on his competitors, he is not fit to hold a seat in Parliament. Under the State law any person holding an office of profit under the Crown is not eligible for election. For instance, a member of the Public Service must resign in order to contest a seat. Honorable members talk of ‘the honour and glory attaching to membership of a State Parliament ; but it seems to me that the recent State legislation, under which a State member may seek election to the Federal Parliament without resigning his seat, is about the most “one-eyed “ and ‘hungry law of which I have heard. If a member of. a State Parliament desires to enter the Commonwealth Legislature, or the Parliament of any other State, he should be prepared to give his opponent an equal opportunity. Both should start off the one mark. The State member should resign, just as a public servant is required to resign his position before he can be returned to a State Legislature. It is just as well that we should analyze the so-called “ broadness of mind ‘ ‘ which some honorable members have said is displayed in the State legislation bearing on this question. No one can honestly say that it has been’ passed because of a desire on the part of the State Parliaments to widen the choice of the people. Its sole object is to give State members an advantage over others seeking election to this Parliament, and at the same time to make a close corporation of the State Parliaments. I can well understand the Opposition being almost unanimously in favour of such legislation, because months before a general election they have a pre-election ballot, and know who is to be their candidate in each electorate.

Mr Gabb:

– So do the Nationalist party. Already a Nationalist candidate has been selected to run against me at the next general election. He is a State Minister.

Mr FOLEY:

– Then, in fairness to the honorable member, he should not be entitled to oppose him without resigning his seat in the State Parliament. The honorable member might vote to-morrow to bring about the defeat of the Government, and if he were successful, with the result that a dissolution took place a fortnight hence, surely having taken that action in all good faith, honestly desiring to do the best for the people, he should not be opposed by a member of a State Parliament who has done nothing to risk his seat, and who, if defeated, would continue to sit in the State House. My opinion is that if a thing is worth having it is worth fighting for, and that a State member who wishes to stand for a Federal division should be compelled, first of all, to resign his membership of the State Parliament. Under the pre-selection system adopted by the Labour party they know in every case who is to be their candidate, and are thus able to direct all their forces against his opponent. That, however, is not the position of every party. We might have a case in which the retiring Federal member was opposed by a State member and a man not in politics. If the outside man were elected, the State member would continue to sit in the State House, and the retiring Federal member would be the only person disadvantaged. Thus it is clear that the State Parliaments are not willing to give Federal members a chance to fight on equal terms with them. A State member seeking election to the Federal Parliament should have the courage to resign. I am not supporting the Bill because I wish to restrict the choice of candidates for Federal seats, but because I wish to put all candidates on an equal footing. When I was fighting the Kalgoorlie byelection twelve months ago, there would have been a dozen members of the State Parliament willing to contest the seat, except that they did not have the courage to resign their State seats. If a man has not the courage to resign a seat in the State Parliament to contest an election for the Federal Parliament, he is not fit to occupy n. place in this Parliament. All my life I have been preaching equality of opportunity, and I propose to vote for it now by according my support to this Bill.

Mr GABB:
Angas

– I oppose the Bill. I know that, looking at it from a personal stand-point, I should support it; but I have good reasons for my attitude. One reason that is uppermost in my mind is that the action taken by the State Legislatures - and in the Bill before us - is, as it were, the - scum that comes to the surface in the political copper, revealing some of the inner selfishness which is so manifest in political circles. Why should we do wrong because the States do so? The other day the honorable member for Capricornia (Mr. Higgs) was blaming the press for bringing politics into disrepute, and there was a certain amount of truth in what the honorable member said. But such spectacles as we have confronting us today certainly do more than anything else to bring politics into disrepute. On the one hand, members of State Parliaments are engaged in an endeavour to make bettor jobs possible for themselves while risking nothing; and on the other hand we, who are holding fairly good positions in this Parliament, are seeking to do exactly what the honorable member for Kalgoorlie (Mr. Foley) said just now the State Parliaments were attempting to do, namely, to make their Legislatures a close corporation. Such, spectacles also tend to make the electors become more and more apathetic, because of the all too-evident selfishness displayed by those they send hero to represent them. “We often hear people say, “ You are only there to get* what you can make out of your position “ ; and if we seek to make our positions safer by preventing the fullest campetition we shall always expose ourselves to such an accusation. It is said that if this Bill is not passed, the action taken by State Legislatures will make it easier for members of State Parliaments to be elected to the Federal Parliament. But I am rather inclined to support the Bill for that very reason, although my personal opinion is that we do not want in this House new members who. have been in politics for a considerable time, and that it is an advantage to have fresh men coming in who are not adepts at camouflaging their real opinions and steeped in political cunning.

Mr Mathews:

– If I said that I would like to have fresh blood next time instead of the honorable member, what would my” party think of me?

Mr GABB:

– I would not fall out with the honorable member for saying it.

Mr Mathews:

– But my party would.

Mr GABB:

– If the honorable member wants it straight from the shoulder, I can tell him that I know that there are some members of my party who, if they dared speak the truth in this Chamber,, would be only too ready to say it concerning me. X would forgive the honorable member for saying it ; but I would remind him that if I have not given evidence of the advantage of having fresh blood in this House I, at least, have shown that I am able to stand up as one man against the rest of my party, both in the House and in the party room. I have had sufficient courage to do so, and I believe that we want men here who are prepared to show that they have the courage of .their convictions.

Mr Mathews:

– You are a “ scab.”

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

– I ask the honorable member for Melbourne Ports to withdraw that expression. It is one that should not be used.

Mr Mathews:

– I withdraw it.

Mr GABB:

– I wish to set before honorable members my main reason for opposing the Bill. The Labour party can never hope to control the South Aus tralian Parliament while the franchise for the’ Upper House remains as it is. The Commonwealth Parliament is the only Legislature in which the Labour party can hope to secure the power it desires.

Mr Lavelle:

– The Labour party has secured power in the New South Wales and Queensland Parliaments.

Mr GABB:

– That is so; and I am pleased to see that the Queensland Government has tackled the question of the Upper House. I hope that the New South Wales Government will follow suit. I am looking at the matter, however, from the point of view of a South Australian. The Commonwealth, Parliament is the National Parliament. Neither the Queensland nor New South Wales Legislatures can be so regarded. It is an expensive and difficult matter to fight a Federal election, particularly a3 I had to do on the last occasion; pushing my ‘ bike ‘ ‘ through a huge electorate. I oppose the Bill because I can see that it prevents Labour men winning the smaller districts represented in the State Parliament, and ultimately using their gold passes to enable them to fight the larger Federal seats. I can see more Labour men coming into this House by this means. Honorable members opposite have the money to enable them, to fight elections; Labour men have not the money to enable them, to do so. Here will be their opportunity to fight Federal seats. Across the chamber the Minister (Mr. Poynton) has interjected that a Minister of the Crown in South Australia has been chosen to oppose me at the next election, the suggestion, of course, being that this gentleman will continue to draw his Ministerial salary whilst he, is contesting the seat. I do not claim that this would be fair, especially as during the two months’ campaigning I will receive no parliamentary allowance. In any case, it would be but further evidence of the selfishness of the. State Parliaments. But I have already had to fight, two Ministers of the Crown, and I do not mind fighting a third. At any rate, I do not propose to do’ anything to limit the choice of candidates for the Commonwealth Parliament.

Mr. FOWLER (Perth) [4.251– I do not wish to approach the proposition submitted by the Government in any personal spirit, and I think I shall be free from the charge of doing so, because it is a very weak argument to .put forward that a. member of the State House is in a. better position than is a member of the Federal Parliament in fighting a seat for this House. If a member of the State Parliament has the right to come forward and fight an election against a sitting member of. a Federal House, I do not think he is likely to .commend himself to the electors by hanging on to his State seat while undertaking to win a Federal seat also. A State member with any spark of honour or fairness in him would resign his seat if he wished to fight fairly and squarely a Federal election, for one reason as much as another, because he would feel that the electors would resent his coming forward as a candidate for a Federal seat while he was still a member of a State Parliament. I do not think that any member of the Commonwealth Parliament would be in the slightest danger of being beaten by a candidate who, being a member of the State House, could fight the election without first having to resign his State seat. However, I want to try to find the principle underlying the Bill. The Electoral Act states that certain persons may not sit as members of the Federal Parliament, and are nob even eligible to nominate as candidates. It is proposed that a member of a State Parliament shall be allowed to nominate for election as a member of the Commonwealth Parliament, but no one suggests for a moment that any member of a. State Parliament, while still holding that position, should be allowed to: enter the Federal Parliament. It would be preposterous to suggest that a member of a State Parliament could also’, while holding that position, come into this Parliament. My principle, therefore, is simply this: that if a person is not eligible to take a seat in this Parliament, he is not eligible to contest an election for this Parliament. It is a. piece of hypocrisy to say that a person disqualified from taking a seat in the Commonwealth Parliament should be allowed to contest an election for this Parliament, or even to nominate as a candidate for such an election. The position is so obvious that there is no getting away from h, and to pretend that our existing Act limits the choice of the public is sheer nonsense. John Smith, member of the State Legislature, is as free as any one else to contest a Federal seat if he resigns a position, which makes it impossible for him to get into the Federal Parliament, even if lie is elected, until he does resign. It is undoubtedly a self-imposed restriction. If a man chooses to hang on to a position which makes him ineligible, why on earth should this Parliament be asked to open a door to him that Ave do not open in every direction 1 There are certain persons who are not eligible to sit in the Federal Parliament. For instance, a bankrupt or a criminal is not allowed to nominate. If we desire to be consistent we certainly ought to give such persons the right to nominate.

Mr Makin:

– Surely, the honorable member does not put bankrupts and criminals on the same level as State members ?

Mr FOWLER:
PERTH, WESTERN AUSTRALIA

– I put them in the category of persons who are excluded under the Act. I am arguing on principle ; and if .the electors of a constituency desire to put a man in Parliament who happens to have been unfortunate enough to be a bankrupt, we ought to consider whether we should not allow such a person the right to nominate.

Mr Considine:

– It does not follow that bankruptcy is the man’s own fault.

Mr FOWLER:

– Quite so; I concede that there are good and worthy men who become- bankrupt through no fault of their own, and whose membership would probably be an advantage to any Parliament. But we exclude bankrupts, not only from Parliament, but from contesting a seat. If we allow a person any special privilege, simply because he is a member of a State Parliament, we have no right to refuse to any constituency the right to select, if they chose, a bankrupt, for instance. There is only one way of deciding this matter, and that is to say that a person who is not eligible to sit in this Parliament shall not be eligible to contest a seat. But it is proposed to say to a man, “ No, you are not eligible, under certain conditions, to sit in this House, but you &re still eligible to nominate and contest a constituency”; and that is an absurd and impossible position. We must do one thi ug or the other. The present law is sometimes evaded in practice. I know of cases in which a State member, holding a secure position, has resigned, a dummy taking his seat until after the Federal contest. If that candidate happens to he defeated, he takes his old State seat ; the dummy, who is “ under thewhip,” has no alternative but to do what he is told, sliding out. It will be seen that there are ways of evading the Electoral Act as it stands.

Mr Gabb:

– Can the honorable member give any instances ?

Mr.Richard Foster. - Yes ; inWestern Australia.

Mr FOWLER:

– Does the honorable member for Angas (Mr. Gabb) suggest that such things are not done?. Why, they are notorious!

Mr Gabb:

– I know of no case, and ask the honorable member to give me one.

Mr FOWLER:

– If the honorable member asks me to enlighten him on all matters of which he does not know anything, he is giving me a very big job. I repeat that I take my stand on simple principle, and I shall vote against any proposal that makes any person eligible to contest a Federal constituency who is not eligible also under exactly similar circumstances to take his seat in this House.

Mr CONSIDINE:
Barrier

.- I understand that in some of the States, if not in most, while State members propose to safeguard themselves in contesting Federal seats, they do not extend the same safeguard to their own State public servants in the case of State elections. A State public servant must resign his position if he wishes to become a candidate. Before this Parliament accedes to a proposal to allow State parliamentarians to hang on to their seats while contesting Federal seats, those State members should at least put their own house in order, and extend similar facilities to their public servants. As to the value of a State member as against a Federal member, when it is a question of selection by the people for a Federal constituency, I have not yet seen the State member against whom I should be afraid to take my chance. But it does not much matter what are our views as to the relative importance of State and Federal members - that is a matter for the people to decide. I support the Bill for the reason I have already indicated.Until State members of Parliament extend a similar privilege to the public servants in their juris diction, I, for one, will keep them where they are in relation to the Federal Parliament.

Question - That the Bill be now read a second time - put. The House divided.

AYES: 34

NOES: 24

Majority . .. . 10

AYES

NOES

Question so resolvedin the affirmative.

Bill read a second time and passed through its remaining stages without amendment or debate.

page 14128

INCOME TAX ASSESSMENT BILL

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

Second Reading

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

(By leave) I move-

That this Bill be now read a second time.

Honorable members are aware that a Royal Commission was appointed to inquire into and report upon the taxation systems of the Commonwealth, and States, and to recommend such amendments of the law as are necessary to remove anomalies and place taxation on a more equitable basis. This Bill is intro°duced to give effect to such recommendations of the Royal Commission as it has so far made modified in such manner as I shall indicate, and to make such other amendments as “ this opportunity offers and the circumstances warrant.

The definition of “ absentee” has been altered so as to exclude a resident of Papua. This is one of the alterations required to exempt the residents, of the Territory from the taxation of incomes derived from sources therein, and it is considered that this relief should be granted in order to encourage settlement in Papua, and leave the income fully available for taxation by the governing authority of the Territory. The Royal Commission made no recommendation upon this point.

Another matter in regard to which the Royal Commission made no recommendation arises out of a case recently brought before the High Court in connexion with State income taxation. The Court decided that there is no assessable income arising from the sale of a business as a going concern. In order to prevent the application of that decision to Federal income taxation, an amendment has been drafted which provides that such income shall be assessable.

I come now to a matter of considerable importance upon which many representations have been made inside and outside this House, and in regard to which the Royal Commission has not yet reported. I refer to the demands made by members of co-operative societies’ that they should foe free from taxation in respect of rebates paid to them by the societies on the amounts* of their purchases. Provision has been made as desired, the Bill exemping any rebate received by a member of a co-operative society, based on pur- chases from that company, when it is one that usually sells goods only to its own members.

Clause 2 provides a new definition of trading assets, and is inserted in order to make it clear that such assets do not include live stock used as working animals or for breeding purposes. This definition is in favour of the owners of working animals or stock used for breeding-purposes, because the profits from the sale of them will not be taxable. It is to be noted that, whilst the present practice -of the Department in regard to what are known as walk-in and walk-out sales is preserved, the amendment will place the pastoralists in a better position in regard to sales of working animals and breeding stock.

The method of assessing income on the basis of previous years has given rise to more criticism than, perhaps, any other feature of income taxation. It has been argued in this House, and outside, that this method is unfair, especially to the primary producer. It has been pointed out that a primary producer who, in the year 1917, had a taxable income of £8,000, in 1918 an income of £3,000, and in 1919 an income of £1,000, and is taxed in each year on the amount he received in the previous year, pays in the year in which he had an income of £1,000 taxation on the previous year’s income of £3,000, and in the year in which he had an income of £3,000 is taxed on an income of £8,000. It was suggested that a fairer basis would be to average his” income over a period of years. My late right honorable colleague (Sir Joseph Cook), when delivering his Budget speech, announced the intention of the Government to introduce legislation providing for such a system. That the Bill does. I direct the attention of honorable members to the principle that is laid down. The Royal Commission on Taxation dealt with this matter very exhaustively. It considered the system that has been in. vogue in Great Britain for a considerable time, and the objections to it that have been raised. On page 10 of the Commission’s report it says -

Our inquiry has led us. to the conclusion that harsh, and inequitable incidence in the cose of widely fluctuating incomes, when each year is strictly segregated from its neighbours, is inseparable from any system of income tax in which steep graduation is a feature, and that escape from the inequity of such a tax can best be secured by a breaking down of the wall of partition between the years, by some method of merging or averaging, which substantially mitigates - if it does not wholly remove - the cause, viz. : - the unsound assump- tion that each year’s income or loss standing alone must determine taxable capacity, whereas the circumstances require that the longest period practically possible be brought into account. When as many years and as many vicissitudes as is practically possible are brought into line through merging or averaging the annual incomes, the true taxability of the subject - that is, his taxable capacity - can be fairly determined.

It must be noted that the British system, which adopts the average income over a period of three years, has given rise to considerable criticism, not because of the adoption of the averaging system, but because the basis of liability is assumed to be identical with the measure of taxable capacity, which it is not. Therefore, in order that the inequity of the present system shall be removed, whilst at the same time having regard to those practical requirements which are inseparable from any taxation system, the Commission has recommendedfor adoption the following principles: - A quinquennial period is taken, and it determines the rate of tax; but the amount of tax is determined by the actual income received in the year previous to the assessment. I may explain what I mean by taking for convenience, because the calculation is easier, a triennial instead of a quinquennial period. In the year 1917 a man had, say, an income of £8,000 ; in the year 1918, an income of £3,000; and in the year 1919, an income of £1,000, or an average income for the period of £4,000 per annum. If he were taxed on his average income, he would be taxed on £4,000, although in the last year of the period his income was only £1,000. Therefore, the Commissioners recommend that, in order to treat the taxpayer equitably, and to have due regard for the circumstances of the State, the rate of tax shall be determined in accordance with the average income over a period of five years. Reverting to my illustration of an income during a triennial period, the taxpayer would be charged for the year 1919 on an income of £1,000, at the rate per £1 fixed for an income of £4,000. Let us suppose, for the sake of example, that the rate of tax on an income of £4,000 is 5s. in the £1, and that the rate of tax on an income of £1,000 is 2s. in the £1 :in the case which I have given as an “illustration, the taxpayer, whose income in the year 1919 was ‘£1,000. would pay tax on that amount, not at the rate of 2s. in the£1, but at the rate of 5s. in the £1. He would pay 5s. in the£1, but would pay only on his actual income for that year, viz., £1,000. The average income for a quinquennial period determines the rate of tax, but the number of pounds on which that rate is paid is the amount of the actual income received during the year for which the taxpayer is assessed.

I come now to another matter of first importance, that of double taxation.

Until recently, persons in Great Britain whose income is drawn both from sources in the United Kingdom and from sources in Australia, paid taxation on the whole amount; but as the result of a conference in London, at which Mr. Knibbs was our representative and put the case with admirable lucidity and force, the British law has been amended, and a rebate equal to half of the tax is now granted. A man in Great Britain who has an income from Australia receives a rebate on an amount equal to the sum of the Australian taxes, Federal and State, where that is not more that half of the British income rates, but where it is greater than half, the Government of the United Kingdom rebates half of its tax. On the other hand, aman domiciled in Australia who receives income from Great Britain and also from sources in Australia, gets a rebate from the British Government, but receives none from us. We wish, however, to make an arrangement which will materially lighten the taxation of those thus circumstanced. The provisions by which it is clone are set out in clause 5, and are as follow : -

  1. Any person who has an amount of income which is liable to income tax for any year of assessment -

    1. under this Act and in the United King dom; or
    2. under this Act and in the United King dom and in a State of the Commonwealth of Australia. and who satisfies the Commissioner as to -
    3. the amount of the income which is so liable; and
    4. the amounts of taxes to which the in- come is so liable, together with the rate or rates of those taxes, shall be entitled to a rebate of tax upon that amount of income at a rate which shall be ascertained as follows : -
    5. In the case where the amount of income is liable to tax under this Act and in the United Kingdom, and the Commonwealth rate is greater than one-half of the British rate -
    6. Where the Commonwealth rate is greater than the British rate, the rate of rebate shall be one-half of the British rate;
    7. Where the Commonwealth rate is not greater than the British rate, the rate of rebate shall be the excess of the Commonwealth rate over one-half of the British rate :

Provided that no rebate shall be claimable under this paragraph with respect to any amount of income to which the next following paragraph is applicable;

  1. In the case where the amount of income is liable to tax under this Act and in a State and in the United Kingdom, and the sum of the Commonwealth and State ratesis greater than one-half of the British rate, the proportion which the Commonwealth rate bears to the sum of the Commonwealth and State rates shall be ascertained, and the rate of rebate shall be that proportion of the following rates : -
  2. Where the sum of the Commonwealth and State rates is greater than the British rate - one-half of the ‘ British rate;

    1. where the sum of the Commonwealth and State rates is not greater than the British rate - the excess of the sum of the Commonwealth and State rates over one-half of the British rate.

The long and short of that arrangement is that where the British tax is greater than the Commonwealth and State rates combined, the taxpayer will pay in the aggregate only the British rate, but where the combined rates exceed the British rate he will pay only at the combined rates. The higher rate will always be charged, and the lower tax will be wholly rebated. There will be no adjustment between Governments. The Commonwealth will not have to make an adjustment with the States or with the United Kingdom, nor the United Kingdom with the Australian, authorities. The whole matter will be arranged by the Taxing Commissioners. The assessment in the case of the United Kingdom will take note of the liability to taxation under Commonwealth laws, and, in the case of the Commonwealth, of liability to taxation under the British law, and the rate of tax will be fixed accordingly. What the effect of the ar-. rangement will be may be shown by an actual case. A taxpayer residing in the United Kingdom, who has a taxable income in the United Kingdom of £44,436, and draws from the Commonwealth a taxable income of the same amount,pay British taxation at the rate of11s. in the £1, which would come to £24,440, and Commonwealth taxation at the rate of 7s. 7d. in the £1, which comes to £16,849- a total of £41,289. But he is given a rebate of £12,220, on one-half of the British tax.

Mr Bruce:

– Are you sure that he gets that rebate? I understand thathe the United Kingdom the rebate in the case of double taxation is only in con nexion with the ordinary income tax. not the super-tax, and that the ordinary income tax does not exceed 6s. inthe £1.

Mr HUGHES:

– I am informed that the rebate is allowed in the United Kingdom in connexion with the super-tax. At the present time the taxpayer whose case I am citing gets a rebate of £12,220, and, therefore, pays taxation in the United Kingdom amounting to £12,220, and £16,849 in the Commonwealth, wherehe gets no rebate, the total tax paid by him being £29,069. Under this Bill, however, he will receive from, the Commonwealth s rebate of £4,629, so that, instead of paying £29,069, he will pay £24,440. That would be the effect of the application of this rebate to a concrete case where the taxpayer at present gets the rebate in the United Kingdom under the arrangement which was made, and under which we art in honour bound’ to reciprocate. Tht arrangement was on a reciprocal basis but owing to the fact that we have not hitherto provided for it, the taxpayer has only had the benefit of a rebate in England but not here. This will pui him in a better position, and require him to pay £4,629 less by way of taxation than he now does. The Royal Commission recommended that the Commonwealth Government should grant such relief as would avoid double taxation, but did not indicate how that relief should be granted. It may be said, however, that the proposals which I have just outlined are generally in accordance with its recoinmendations. This Bill, of course, provides only for relief to be given by the Federal Department of Taxation. A full adjustment of the matter will not be effected until the State Legislatures also arrange to rebate a portion of their cwn taxes.

I come now to another matter of considerable importance. Clause 6 of the Bill which amends section 14 of the principal Act provides for the exemption oi a shareholder in a company from income tax in relation to any profit which is not the result of the ordinary trading of the company - for example, profit on the sale of a fixed capital asset, or the amount by which the value of a fixed capital asset may be written up.

Another important provision in the clause is that which exempts profit arising from the sale of a mining property where it is sold by a bond fide prospector or by a person who does not make a business of buying and selling properties. Where such a person purchases a property from a bond fide prospector, and works the property in a proper and efficient manner, that property will be exempt from the tax. The Government hope that this will prove beneficial to the country, and that it will be an encouragement not only to prospectors, but to mining ventures in the early stages of their development. It may be mentioned that this amendment follows the lines of one recently introduced by the Government in the Legislature of Western Australia in relation to its own income tax. That Bill has not yet become law.

The last portion of clause 6 deals with a matter of considerable importance, and protects the revenue in caseswhere it needs protection. It provides that where anytrading asset passes, by gift, the in- ‘ come of the donor shall include the market value of the asset. That is to say, where in any statement of accounts a trading asset appears, and is transferred by gift, then the income of the donor shall be liable for the market value of the asset. The amendment will check what appears to be a growing practice. Under the law as it stands at present, a. business owner who makes a gift of trading assets would not; of course, show the value of the assets in his trading account as stock on hand at the end of the tradingperiod, nor would he show it amongst his sales. He would, nevertheless, show it among his purchases. Such action would operate to reduce the profit on the sales of the year, and so result in avoidance of tax. There is no hardship in the course proposed, because it is intended merely that where money is included in the accounts for the purchase of goods, their value should be shown by proper contra entry when the goods pass out by gift.

Clause7 of the Bill arranges merely for the transposition of certain words in order to make the meaning of the principal Act clearer than it is at present. Under a recent judgment of the High Court, it appears that a taxpayer could deduct from his income all losses and outgoings incurred outside Australia. That was not intended when the Act was passed, and has not been the practice of the Taxation Department. The amendment makes it clear that the losses and outgoings must have been actually incurred in Australia. Sub-paragraph c repeals a provision of the lawwhich exempted gifts made, during the continuance of the war, to patriotic funds. The law in this direction has ceased to operate, and the portion of the Act referring to it might now well be deleted. The last part of the clause provides for an increase of the deduction for children from £26 to £30. Clause 8 effects, as recommended by the Royal Commission, an increase from £100 to £104 of the general exemption applicable to persons having no dependants.

I come now to another important clause. I refer to clause 9, which is to impose income tax upon profits derived by exAustralian principals from the sale of their goods in Australia. Honorable members perhaps have had their attention drawn to a practice which is becoming common, and is notorious in the case of one particular company where an Australian branch house is believed to be debited by the foreign house for goods at a price which leaves little margin for profit on the sale of such goods in Australia. These allegations have been made from time to time in this House. It has been said that one company in particular has resorted to some such method in order to escape the Australian tax. The proposed new section will give the Commissioner power to assess and charge taxupon what appear to be the real profits. Honorable members can follow that provision quite clearly. Further comment by me is unnecessary.

Dr.EarlePage. - Is the provision to be retrospective?

Mr HUGHES:

– The Court always assumes that a section is not retrospective unless it is clearly stated to be so.

The matter of Appeal Boards, which will interest honorable members, is the next subject with which I have to deal. Honorable members are aware that one of the questions that engaged the attention of the Royal Commission on Taxation was that of creating Tribunals, other than a Court, to deal with numerous cases under the Income Tax Act in which taxpayers dissent from the decisions of the Commissioner, but for various reasons are unable or unwilling to assert in a superior

Court what they believe to be their rights. The Commission said it was satisfied -

  1. That with the present heavy burden of direct taxation it is imperative that some action be taken to allay existing discontent by giving taxpayers access to an independent Tribunal (with a simple and inexpensive procedure) for the determination of disputes with ths Department.
  2. That the expense of maintaining a Tribunal to meet the clamant requirements of taxpayers is abundantly justifiable.
  3. That there is no justification for the immediate creation of a number of Boards, some of which might become redundant.

We are, therefore, making provision for the appointment of Boards, and, as suggested by the Commission, we shall start by appointing only one. As many more can be created as the circumstances demand. It is estimated that each Board will cost £10,000 per annum. It may be necessary, ultimately, to have as many as ten Boards, so that in that event the expenditure in respect of them would amount to £100,000 per annum. Let me now point out the relief that is provided for under this Bill, and in the Act itself. Where questions of law arise, the taxpayer has the option of appealing to the High Court or to the Supreme Court of a State. Where a question of fact is involved, he can appeal to one of these Appeal Boards. When it is a question of law and of fact, he can appeal to the Board in regard to the fact and to the Court as to the law. But he has the option of appealing to the High Court or the Supreme Court of a State on questions of law, and he can go to the Court on questions of law and of fact; but he can go to the Tribunal only on questions of fact. There is one class of cases which neither the Tribunal nor the Court can deal “with. I refer to cases of hardship, which are specially provided for> and which will be heard, as now, before a Tribunal composed of the Taxation Commissioner, the Secretary to the Treasury, and the Comptroller-General of Customs.

I do not know that there are any other clauses to which I need specially direct the attention of honorable members. When we go into Committee, we can discuss such points as are of importance, and I shall then supply honorable members with any further information they require. This measure has been introduced to give effect to the promises made by the ex-Treasurer. (Sir Joseph Cook), and follows the recommendations of the Royal Commission on Taxation. Where it deals with matters not yet reported on by the Commission, it follows the generally expressed desire of honorable members and taxpayers. It is hoped that the Bill will improve our taxation machinery, although it must necessarily continue to fall short of what we desire, since much of the trouble arises from the clashing and overlapping of State and Federal Tribunals or taxation schemes. But that is a matter for which tha Commonwealth can hardly be held responsible, because we have always been ready to come to any arrangement that will enable the taxpayer to have one taxation form. Personally, I think it would be a good thing for this country if there was only one tax gatherer.

Mr Gregory:

– Will a special effort be made during the next twelve months to try to get the States together in an endeavour to obtain the desired uniformity ?

Mr HUGHES:

– Tes. Some States are showing much more readiness than . others to fall into line.

Mr CHARLTON:
Hunter

.- I understand that the amendments contained in this Bill are in accordance with the promise made to Parliament by the ex-Treasurer (Sir Joseph Cook), namely, that these amendments would deal with certain phases of the taxation question only, and that at a later period, when ibo. Government received the final report from the Taxation Commission, and had time to examine it, other amendments, if necessary, would be made.

Mr Hughes:

– Practically all the amendments recommended by the Commission are included in this Bill. Of course, the Commission has not yet concluded its work.

Mr CHARLTON:

– The amendments outlined by the Prime Minister will effect improvements in several directions, par- ticularly the amendment which deals with co-operative societies, which, however,, does not go far enough. The trouble; * which exists to-day in regard to these, societies is that we ask their members who, already pay income tax on their earnings to also pay income tax on the periodical rebates made to them by their societies. The Rochdale co-operative system, .which was inaugurated in England, and subsequently established in New .South Wales, provides methods by which bodies of workmen may band together and run business for themselves. It is true cooperation. The members who hold shares in a society buy the commodities they require from the society, but, instead of the lowest possible price being charged for those commodities, the members are called upon to pay for them a price which is equivalent to the current rates charged elsewhere. It is necessary to do this in order to enable the business to have sufficient money in hand to meet any emergency. In a large business one never knows what may happen. However, at the- end of every three or six months, as the case may be, whatever surplus is left over after running the business is distributed among the shareholders in the form of rebates, and an amendment in this Bill provides that in future these rebates shall not be taxed. My regret is that the Government have not seen fit to make the provision retrospective. In fact, several of these amendments could easily have been made retrospective. I am sure that Parliament never intended that a body of men who band together should be obliged to pay tax on what they may receive through the distribution of any surplus made in their co-operative movement, particularly when they have already paid individually income tax on their earnings. If I. go -to Anthony Hordern ‘s, in Sydney, and get a rebate om a big purchase, the allowance made to me in that way is not subject to income taxation, but if I happen to be a member of a co-operative society and get a rebate in the way I have’ described at the end of six months, I am taxed upon it. An effort has recently been made by the Commissioner of Taxation to collect income tax on all rebates distributed from as far back as 1916. As a matter of fact, the matter has. been held in suspense, and the tax has not been actually collected, because recently a deputation waited on the exTreasurer to place the position before him, and he came to the conclusion that it was wrong to tax these rebates, and he therefore asked the Commissioner to refrain from collecting taxation upon them. The Deputy Commissioner in New South Wales’ had been pushing the members of co-operative societies to pay tax on rebates received for the previous five years, and this amending Bill, while it will exempt these rebates from taxation in future, still leaves it open to the Taxation Department to collect tax on these past rebates, although we declare by this Bill that it is wrong in principle to do so. The shareholders of these cooperative societies, being ignorant of the fact that they were liable to pay tax on these rebates, had not included them in the returns of their income, but “quite recently the Deputy Commissioner in New South Wales informed them that they would be obliged to furnish returns of all rebates received by them since the passing of the Act.

Mr Bowden:

– If the tax has not yet been paid, we can easily make the provision retrospective.

Mr CHARLTON:

– That is why I say it should be made retrospective. The ex-Treasurer said that he would ask the Commissioner not to collect this tax until Parliament had dealt with an amendment to the Act, showing clearly that, in his opinion, the provision should be made retrospective. If it is not made retrospective the tax gatherer will be pestering men to pay taxation at a time when they are least able to pay it.

The coal trade, in which many of the members of these societies are employed, is providing less employment to-day than it was when these rebates were distributed, and any endeavour to collect the tax from these people now will be very hard on them.

Mr Marks:

– Seeing that the Government have not collected anything, they will lose nothing by making the amendment retrospective.

Mr CHARLTON:

– To illustrate the. absurdity of the position, these members of the co-operative societies whose shares are in the names of their wives will escape taxation, while- those men whose wives happen to have put the shares in husbands’ names will find that the rebates they have received will be regarded as income upon which they will be required to pay income tax. There is no equity in this, and I ask the Government to give careful consideration to the aspect of the question I have put forward, and see if they cannot make this amendment retrospective in its application.

Many co-operative’ societies have increased their reserves for the purpose of adding to their businesses or in order to provide additional accommodation. The money so utilized ought not to be taxed. It belongs to the members who have already paid tax on their earnings. These societies are not earning income out of this expenditure.

Mr Bowden:

– But would not the same arguments apply to any company ?

Mr CHARLTON:

– No. A company, being a speculative concern, is on quite a different footing from a Rochdale cooperative society. It is provided in the amendment to which I have just referred that the societies who are to benefit by the exemption must confine their operations to their own members. There are very few of these societies which sell to non -members, and in order to get the benefit of the provision they will be obliged to got rid of their non-member customers ) but I cannot see why they should be compelled to pay tax on the money they use in extending their businesses. The shareholders have already paid individually income ta.x on whatever they have paid into the societies. It is always, claimed that it is the duty of a Legislature to encourage co-operative principle, and in all walks of life a great improvement would be effected if cooperation were to come into general use ; but here we hamper the movement. If a society, instead of giving back £1,000 to its shareholders out of the surplus it has earned after paying working expenses, devotes the money to the erection of additional accommodation, the Taxation Commissioner claims income tax upon it, whereas if the £1,000 were distributed in the shape of rebates to the members it would not be taxed under the amendment included in this Bill.

When we come to the question of the averaging system, it appears to me from what the Prime Minister has said that we take the average of three years in order to fix the rate of tax. A man with an income of £5,000 in one year, £3,000 in the second year, and £1,000 in the third will be taxed on the average yearly income of £3,000. In the last’ year, of course, considering his low income, the tax will be comparatively heavier, but a good year may follow, for which he will pay less in proportion. Whether this method will prove of any great benefit is questionable.

Mr West:

– It depends on whether it is operated honestly.

Mr CHARLTON:

– If it is operated honestly, I do not know that it will make much difference; over a number of years, I think, the ‘.average taxation will be found to be much the same as to-day. As to double taxation, I do not consider it to be fair. If this proposed amendment is applied equitably, as between taxpayers in the United Kingdom and taxpayers here, there will .not be much fault to find.

I now. wish to refer to a matter with which the Prime. Minister did not deal. It is proposed by this Bill to raise the exemption in the case of single persons from £100 to £104, representing exactly £2 a week. At present, for every £5 over £100, the exemption, in the case of single persons, is reduced bv £1, and under the Bill for every £3 over £104 the exemption is reduced by £1. It will be seen that by the time £130 is reached the taxpayer is in exactly the same position that he is to-day, whereas, with an income over £130, a single person becomes very much worse off from a taxation point of view, because, instead of getting any relief, his taxation is increased.

Mr Gabb:

– It is a sort of a bachelor tax.

Mr CHARLTON:

– Tes; and I have always complained of the taxation imposed on single persons. The exemption is far too low, and the proposed amendment doe3 not at all meet the case, but rather makes the position worse. A single person may earn from £150 to £200, and all income over £130 will be more heavily taxed than now. I was under the ‘impression that it- was proposed to give relief to single persons, but that is not so. Personally, I believe that the exemption should, be largely extended; at any rate, in view of the high cost of living we ought to considerably increase it. When the Income Tax Assessment Act was passed in 1914-1915, the purchasing value of the sovereign was much higher than to-day, and we then made the exemption £156 in the case of single1’ persons. The Act was amended during the war, when we were endeavouring to get as much revenue as possible, and the exemption was made £100. In my opinion, it would be only a fair thing to make the exemption at least £200.

Mr Maxwell:

– Would it not be better to reduce the rate than to increase the exemption ?

Mr CHARLTON:

– I do not think so; it is better to fix the exemption at such a figure as to leave sufficient to enable persons to live in a respectable way, and put by a little in view , of marriage. Single men cannot now get board and lodging under 30s. a week, and, allowing for washing, purchase of clothing, and other expenses, an exemption of £200 is not too high. When wereach the Committee stage I shall give honorable members an opportunity of expressing an opinion on this and other points.

In the case of married men, who have the care and burden of a family, the exemption is £156; but can it be claimed that this is not now far too low a point at which to start taxation? I often wonder how a marriedman with a wife and four or five children manages to get along, especially in those cases where the family is entirely dependent on the husband’s earnings.

Mr Bowden:

– There is an exemption for children.

Mr CHARLTON:

– Yes; there is an exemption of £26 for each child under sixteen, years of age; but in New South Wales the exemption is £250, with an allowance of £50 for each child. Taking into consideration the purchasing power of money to-day, I suggest that an exemption of £300, with an allowance of £60 for each child, would be a fair thing; and., in Committee I intend to move accordingly.

Mr BOWDEN:
NEPEAN, NEW SOUTH WALES · ANTI-SOC; NAT from 1919

– The Bill proposes to make the allowance of £30 for each child.

Mr CHARLTON:

– That is infinitesimal - an extra £4 for each child. All these matters ought to receive consideration at the hands of honorable members; and it is no use our waiting for any further reports. The ex-Treasurer (Sir Joseph Cook) stated that we would have the final report of the Taxation Commission before we finally dealt with this Bill ; but the Prime Minister has now told us that almost every recommendation of the Commission has been adopted in this measure. That conveys to me that, whatever legislation we pass now will probably stand for two years or more; and as the people outside are clamouring for a considerable increase in the exemption, we are not justified in accepting the Bill in its present form.

Mr Marr:

– The allowance for a child should be at least £39.

Mr CHARLTON:

– I propose to fix it much higher. I am glad to see that an amendment is proposed in regard to bonus shares, because many people in the past have escaped taxation in this respect, especially during the war. Companies have made . huge profits, and after distributing good returns to shareholders, have accumulated large surpluses, which have been allotted to shareholders in the form of what are called “ bonus shares.” This means that a man holding shares in a company was allotted bonus shares in the ratio of, say, 1 to 10 : at any rate, in this way income taxation has been evaded.

Mr.Bowden. - Income tax is paid on bonus shares, and there is a proposal in the Bill to alter the system in part.

Mr CHARLTON:

– I am glad to have that correction. Generally speaking, I am favorable to the amendments placed before us ; my only complaint is that they do not go far enough. As I have indicated, I shall take action in Committee to test the opinion of honorable members in regard to amendments which I have foreshadowed, and I shall try, if possible, to make the amendments retrospective in regard to co-operative associations. I realize that I cannot obtain all I desire, however strong my opinions may be ; but I hope to see the Bill emerge from Committee a very much improved measure.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

.- Though the measure does not give the primary producers of this country exactly what they have asked for or desire, it provides a great improvement on our present system of taxation; and one must be thankful for small mercies. I hope that on some future occasion a full measure of justice will be meted out.

Mr West:

– You mean that this Bill will result in the reduction of income tax in the case of the primary producers?

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– I say that the Bill will be the means of doing something like justice to a body of men who have to face uncertainties, and fight the elements in a way unknown to ordinary business men. If we care to read through the report presented by the

Royal Commission, we may see numerous instances of the inequalities that have obtained in the past. On page 5 of the report there is a talble giving striking figures in connexion with the grazing industry. In one case, amanwho,in seven years, made a net profit of £56,000, paid in Federal tax £60,000, or £4,000 more than the income. This was quite apart from Stateincome tax. In the case of a city man, however, whose income over that period had been a steady £8,064 per annum, the Federal income tax amounted to only £13,299. ‘ Similar inequalities are shown throughout the report. I am prepared to abide by the decision which the majority report recommends, namely, that the system of averaging the rate of income tax, as explained , by the Prime Minister and outlined in the Bill, shall be adopted. I realize that it cannot affect steady, regular incomes, such as salaries, nor will it be nearly so equitable or just as the averaging method, with an allowance for suspense credits.

Mr Bowden:

– It comes to about the same thing.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– It comes to much more; but the inequalities will be nothing compared with those in the past. The Commission explained that if this method were adopted it would inevitably lead to a great increase in. the expenses of the Taxation Department. As we are in fairly desperate straits financially, the primary producers, although not exactly satisfied, will be very much more pleased with what is proposed by the Government than they are with the present system of taxation. The Taxation Commission recommended that two canons - certainly as to what the taxpayers will be called upon to p.ay, and economy in administration - will be better fulfilled by this method than by any other that has been suggested. In those circumstances, we are prepared to support this measure in the main.

I think the definition of “ primary producer “ should be more explicit, so that there may be no possibility of an actual primary producer being excluded from the benefits to be conferred by the proposed amendment. In regard to doubletaxatiou,I welcome the relief that this Bill will bring ; I think it will have a very beneficial effect in promoting an influx of capital to assist in Australian development. With regard to the amendment dealing with companies trading outside the Commonwealth, who, by reason of various devices, have been able in the past to escape the payment of income taxation - as, for instance, the various oil companies to which reference has been previously made - I am glad that at last the Government are taking steps to stop this leakage. All I regret is that this proposed amendment is not to be made retrospective, as, apparently, some other provisions in the Bill are to be, so that some of the money that has been lostmight be recovered.

I agree with the remarks of the Deputy Leader of the Opposition (Mr. Charlton) that the exemption per child is not sufficiently high. I would like it to be raised to approximately the allowance made in the New South Wales Income Tax Assessment Act. If the Department has any statistics regarding the amount of taxation that would be lost by the adoption of, say, £50 per child, such information would enable honorable members to better judge whether the finances of the country will permit of such relief being given to income-tax payers.

Mr FOLEY:
Kalgoorlie

.- I intend to confine my remarks mainly to the mining industry as affected by this Bill. In passing, I express my pleasure that the Government are proposing to liberalize the law in regard to co-operative societies, and the exemption for children. I think the general exemption of £156 is too low at the present time; but if the Government cannot see their way clear this session to raise it to £200, I trust that in the near future they will introduce a proposal to that effect. An exemption of £50 per child would be only a fair consideration to extend to married people.

I am pleased that at last something is to be done to give more encouragement to the mining industry. The taxation of the proceeds of the sale of mining leases is no doubt legal, but it is none the less unjust. There is no resemblance between the sale of a mining lease, and the sale of an agricultural or city lease. In the two last-named cases the lessor receives his property at the expiration of the lease in substantially the same form as it was in when he leased it; often it is improved. But with a mining lease the case is the reverse. A mining lease is, in fact, only a licence to deplete the resources of a property by removing its mineral contents. The vendor of a mining lease parts with it outright in exactly the same manner as does the owner of a. city property or a farmer who parts with his land. But the incidence of taxation affects those three classes of persons quite differently. The Government have taken note of the existing discrimination, and the proposal which they are submitting to the House will give a great deal of relief. I desire to remind the House of how the incidence of taxation has retarded mining operations during the last two years. After our soldiers returned from Europe there was n period of deep depression. But in Western Australia, there soon occurred one of those bursts of sunshine that are incidental to the mining industry, and people invested money in mining property very freely. Unfortunately, a period of boom followed, which did more harm -to mining generally than anything else could have done *at that time. When the boom burst, and normal conditions were restored, people started prospecting for what they could honestly win from the earth, and not for the purpose of selling to the public leases, many of which consisted of only four pegs in a valueless block of ground. Many of these men had been prospecting for many years, and when, their efforts resulted in the discovery of lodes or reefs, as they could not work them without capital, they thought it better to take the opportunity to sell. I mentioned recently the case of a man at Lake Austin, who, for twenty-five years had prospected in Western Australia, and at last discovered gold to the value of £7,500. The taxation authorities took from him. £4,200, so that more than half of the results of twenty-five years’ industry was lost. Another case is that of. Mr. Thompson, M.L.A., of Western Australia. Being an enterprising man, he thought that the iron deposits at Yampi Sound should be developed. He pegged out a lease and did developmental work. Later, he arranged to sell the deposits to the Queensland Government for £30,000, of which he was to receive £3.000 in cash, and the balance in shares. The whole of the amount of £30,000 was treated by the taxation authorities as earnings, and he was taxed to the extent of nearly £19,000. He had not handled more than £3,000, and was not in a position to pay the £19,000 that the Commonwealth and State Governments demanded of him. I am glad that the Government have at last brought forward a proposal that will give relief in cases of this kind. The money which Mr. Thompson received represented, not earnings, but conversion of capital. If a, man sell a house for £1,000, the Department regards that as a conversion of capital; but the whole proceeds of the Yampi Sound transaction were treated as taxable earnings. Another case is that of a man who for fourteen years had been prospecting, and at last struck a little gold at Hampton Plains. He sold his “show” for £6,000 in cash and shares; but, as the vendor, be had no right to trade in the shares for a period of twelve months. He discovered that the tax-gatherers intended to take from him £2.360 because he had found that mine. We want all the gold that can be won from the soil of Australia. That is why men of this type should not be discouraged; and the Government are to be commended for introducing this relief legislation. The man to whom I have’ been referring wa3 fearful that something might happen. Therefore, he did not bank his money, but carried it about with him. He was later notified of the amount of his taxation assessment, so he packed up, let his shares go for the time being, and went to New Zealand. He still has his money, and he has evaded the payment of taxation which the Commonwealth Government rightly considered to be due. But he had taken a certain portion of his payment in shares. These were assessed at their full valuation. They were regarded as part of his earnings; and, although they were worth, perhaps, only ls., the asses-mem was made at the rate of about £1 per share. Before leaving for New Zealand he mentioned that if he had collected the same amount through Tattersalls sweeps, 14 per cent, would have been deducted by way of taxation. He contended that prospecting gave him about the same chance of drawing a prize from the soil as he would have had by regularly contributing to Tattersalls. I say that these prospectors are to be in every way encouraged.

Another case recently came under my notice in Western Australia. A man had been prospecting for twenty years, and the only bit of good luck he had had was when he struck a patch which returned him 400 ounces of gold. That was seven years ago. He sold the mine, in conjunction with three backers, for £4,500. But the mine was in his name, although he possessed only a one-fourth share. He was assessed by the State taxing authorities to the extent of £1,000, so that, eventually, his share was worth to him axactly £78. The State Department had taken so much from him that there was nothing left for the Commonwealth Department, which also wanted to claim about £1,000. These instances reveal the need for affording relief. As for mining companies, I desire the Government to consider the possibility of affording still further relief. They should regard a mining lease as a diminishing asset. It should be classed as a chattel, just as are the implements on an agricultural holding.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The Government’s proposal to accord relief to primary producers certainly goes a long way, but I do not think that it entirely meets the views of honorable members, who expressed their views in this Chamber when a motion proposed by the honorable member for Lilley (Mr. Mackay) was debated, and agreed to, earlier in the year. The terms of that motion were -

That this House is of opinion that the fairest method of calculation for purposes of the Federal income tax, as applied to primary producers, would be upon a basis of five years’ operations.

I interpreted the resolution to mean that, if a person engaged in primary production is operating over a number of years, the losses sustained throughout the operations will be taken into account. I have previously mentioned the case of a man who, in his first year, made a profit of £1,000; in his second year, a loss of £2,000 ; in his third, a profit of £3,000; in the fourth, a profit of £500; and in his fifth year, a profit of £1,000. I made calculations on the basis of the theory which I had in mind. Those showed that, calculated on the “income from property basis,” he would be taxed, on the sum of his first year’s profits, to the extent of £74 17s. 8d. In the second year, seeing that he had made a loss, he would not be required to pay anything. In the third year, there would be calculated the profits of his first and third year, making £4,000 in all; from which would be deducted the loss in his second year, namely, £2,000. That would leave a total of £2,000, which, divided by the three years of his operations, would represent a profit for that third year amounting to ‘about £666. On that he would be required to pay £34 in taxes. Calculating the other years on the same basis, he would pay a total for the whole period of £177. Against that, he will be required to pay, in accordance with the provisions of this Bill, £307. I do not know the views of members of the Country party, but I understand that they have agreed to accept the recommendations of the representatives of the primary producers upon the Royal Commission.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Any averaging system is bound to produce certain peculiar results.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I admit that; butI desired to secure the greatest possible measure of relief for those who follow an occupation the conditions of which are so fluctuating that their position differs entirely from that of ordinary individuals.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Although the honorable member has indicated cases of hardship, there would be instances where persons would reap a greater advantage than under the present system.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I have made calculations on the basis of three different propositions. Under the scheme which I had in mind a man in receipt of the income, from year to year, which I have just stated, and making the losses to which I have referred, would be required to pay a total of only £177, as against £307 required of him under the method of assessment set out in the Bill. If no account were taken of losses, and the annual income we.re averaged, this same individual would be required to pay £384. The honorable member for East Sydney (Mr. West) said he did not think the Bill would really effect much of a change. In that regard he is wrong. Taxpayers will be afforded a greater measure of relief than is provided to-day.

Sitting suspended from 6.30 to8 p.m.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– This Bill does not give the full measure of the relief to which those who are engaged in primary production are entitled, but it makes some attempt to give effect to a resolution which was carried in this House some time ago. I have shown how the incomes of those on the land are subject to fluctuation. Their handicaps are much greater than those of any other section of the community. It might be asked why should an exception be made in favour of the primary producer; why should not a concession granted to him be given also to the manufacturer, but a mere glance at the conditions under which the man on the land works will show that no comparison can be made between their respective positions. A manufacturer can always guard against a decline in the demand for his commodities, but a primary producer may be afflicted with a drought in one year, bush fires in the next, and a plague of caterpillars, or some other form of pestilence, a little later. He is affected by conditions which he cannot alter’ or guard himself against, and consideration should be given to this circumstance. I have referred to the case of a constituent of mine whose total income over a period of five years amounted to £3,500. His income tax amounted to £722, although his average income was only £700 a year, but a man in receipt of a steady income of that amount, as many a professional man is, pays only £140 in five years. Under the Bill the primary producer of whom I speak will pay £307 a year, which, of course, means that he will get some relief, hut he will still pay more than twice as much as the man who gets as much as he does in five years, but draws it in equal annual amounts. I would like the Government, in dealing with cases of this kind, to make proper allowance for losses. In the case to which I am referring, the first year’s income was £1,000, but in the next year a loss of £2,000 was incurred. ‘ In the third year there was a profit of £3,000 made. What should be done in a case like that, I think, is to add the profits of the first and third year and subtract the loss of the second year. The average income for the three years was £666, and it is on that amount that income tax should be levied. Had the man whose case I am citing been dealt with in that way he would have had to pay only £177 in five years. It may be contended that my proposal would mean a serious diminution of revenue.

Indeed, I am inclined to think that the Taxation Department does not wish the primary producers to have even that measure of relief which is granted to them by the Bill. But it must be remembered that those who are in the backblocks are without the comforts and conveniences that city folk enjoy, and never know from year to year what their income will be. Therefore, I think that to agree to what I propose would not be to do too much for them.

The Deputy Leader of the Opposition (Mr. Charlton) intends to move an amendment to increase the exemption, and I think it should be increased. He wishes to raise it to £300. Considering how conditions have altered since the present exemption was fixed, I do not think that an unfair proposal.

Mr Fenton:

– Even when originally fixed, the exemption was unfair.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is so; and now that the cost of living is so high, a man should have at least £300 free of income taxation. I hope that members generally will support the honorable member’s proposal, and that another proposal which he intends to bring forward - an amendment for increasing the allowance for each child to £60 - will also receive sufficient support to carry it.

The amalgamation of the Commonwealth and State Taxation Departments is a reform long overdue. The system under which taxation is now collected is a wasteful one, and the Government should arrange with the State authorities to put an end to it, It is an old saying that what is every one’s business is no one’s business; but the Federal Government should move in this matter, and I * believe that if they set about things in the_ right way an amalgamation would be agreed to by the State authorities which would save much of the expense of collecting the taxes. Economy is much talked of, but seems honoured more in the breach than in the observance. I know, of course, that an amendment could not be moved on this Bill which would effect the amalgamation that I suggest, because nothing can be done without an arrangement with the State authorities; but I hope that this amalgamation will soon take place.

Mr WATT:
Balaclava

.- I am very sorry that the Government has introduced this important Bill so late in the session. A number of honorable members would welcome the opportunity to study the technical phases of a measure of this kind; but when one glimpses these clauses and compares the principal Act with the amendments that are proposed, it is plainly hard to understand not merely the verbiage of the measure, but its object and the motives of those who are responsible for it. As one who has had something to do with the later Commonwealth taxation Acts and the earlier State Income Tax Acts, I confess my inability to grasp the full meaning of these proposals at such short notice; and I think that unless the measure is urgent - certainly not all of it is urgent - it would be safer to lay it aside so that we may study it at our leisure and in conjunction with the proposals for amendment made during the debate.

Mr Richard Foster:

– The adoption of the averaging system is urgent.

Mr WATT:

– It is certainly an important matter, not an urgent one, and whatever settlement be arrived at it could not take effect upon the assessment for the present year.

Mr Richard Foster:

– Not if the Bill were passed at once?

Mr WATT:

– I do not think so. I do not think that the assessments for this year, based on the income of last year, would be altered, and that being so, the Bill is- not urgent, even so far as the matter referred to by the honorable member is concerned. X,do not know whether the mover of the second reading stated that the Bill is an urgent one.

Mr Gregory:

– That was the impression his speech conveyed.

Mr WATT:

– An impression is one thing, but the facts may be quite otherwise. I do not think it can be said with confidence that the Bill will affect this year’s assessments, but it contains important provisions, and honorable members should have an opportunity to study them. I have endeavoured in the brief time that has elapsed since the Bill was laid on the table to arrive at an understanding of some of its provisions, and these I wish to discuss. I do not at all believe in the averaging of the income of primary producers, although I know that that is an unfashionable statement to make at the present time. The idea appears to be abroad that if the incomes of primary producers were “ averaged in accordance with some of the many methods which are possible, all the difficulties of the man on the land would be solved. I do not believe that, but in providing for the principle the Government are making, or are liable to make, two” very important mistakes. The first of these is that they will remit a substantial amount of taxation. I do’ not know how much it will be. It is possible only for the expert officers of the Taxation Department to inform us, and the Minister should give the Committee their calculations before the clauses dealing with the average principle are disposed of. I think the effect on the revenue of the year in which the provision operates will be substantial, and I do not believe in this attempt to make remissions to one particular class of people. My own impression is that if this community can stand less taxation, and I believe we shall have to face that condition shortly, the taxation should be remitted, not to one section of the community, but broadly and equitably according to the circumstances of all taxpayers. In saying that, I do not admit that all taxpayers are .subjected to-day to equality of sacrifice. On examination it may be found that some deserve a heavier rate of remission than others ; but certainly one section should not be relieved while all the rest continue to pay as they have been doing. I speak now as the representative of a metropolitan electorate, but as one in whose constituency there are substantial rural interests, perhaps .as heavy as those in the divisions represented by honorable members who speak for the actual primary producers.

Dr. Maloney. Where are those interests ?

Mr WATT:

– The honorable member will know that in the electorate I represent there reside large squatters who are interested in rural concessions. They are just as much interested in them as the farmers who live up-country, because remissions of this kind will affect them in the same way. I urge, first of all,’ that the. question of the remission and the amount ought to be a matter for careful study by the House.

The second mistake is, I think, that this is an invidious distinction between classes of taxpayers, and cannot be justified on any ground of principle. The honorable member for Hume (Mr. Parker Moloney) just now assumed, rather than explained, that the primary producer on the land was subjected to more vicissitudes than any other class of die community.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– And I mentioned those vicissitudes.

Mr WATT:

– Yes. The statement is perfectly true, particularly in respect 01 those who are struggling in the low rainbelt areas of Australia. Not so much in Victoria - although the north-west would show the same relationship - but in South Australia, New South Wales, Western Australia, and, possibly, in portions of Queensland, there are areas where men are struggling under conditions that sometimes strike with overwhelming force and cripple them. I would go so far as to say, with regard to those carrying on operations in. the low rainfall belts of Australia, that there should be some special arrangement for averaging their income. No such arrangement, however, should be made in respect of the whole of the farming territory of the Commonwealth. Let me take an example to illustrate what I mean. We have in Australia a great number of irrigators. The number, happily, is increasing year by year as water conservation and storage become more general, and are more fully appreciated. These men are not subjected to the vicissitudes of drought that the cultivators in the back parts of the States I have mentioned have to fight against.

Mr Richard Foster:

– It was really the position of those in the dry areas that excited the first demand for this concession.

Mr WATT:

– Quite so. But the conditions vary. The Western District of New South Wales, for instance, is different from the Western District of Victoria, where the variability of the rainfall is slight, and the conditions of production are more uniform, and it would lie absurd, out of a sense of consideration for the men who have to meet the shocks of time and chance, to give these other highly favoured cultivators and pastoralists the same consideration that we give those who are struggling in the low rainfall areas.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– How would the honorable member define such areas 1

Mr WATT:

– We could specify certain areas or rainfall belts, because the rainfall figures of recent years, as Dr. Tay lor’s map shows, indicate that portions of Australia with a low rainfall have a larger proportion of failure of actual rainfall than, the high rainfall districts. It would be perfectly safe, therefore, to take given belts with a rainfall pf S, 9, or 10 inches and up to 12 inches, and give to the men in those belts a concession which we would not grant to the favoured people of the coastal belts, who do not need the same treatment.

Mr Hill:

– Quite a number of failures on the part of men on the land can be attributed to other causes than want of rain.

Mr WATT:

– I was going to mention that fact. At present I am dealing only with the position of those who are endeavouring to continue “primary production in districts liable to drought. There may be other causes of failure such as rabbits, wild dogs, bush-fires-

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Caterpillars.

Mr WATT:

– Caterpillars, locusts, and so on. There are quite a number of forces working against the farmer and the producer on the land, but they do not work equally against all classes of them. There are a great number of other people in the Commonwealth who are subject to forces which they cannot control. The honorable member for Hume suggested that the manufacturer, when met by a declining demand, can restrict his incomings and output. It is all very well for the honorable member to make that statement; but very many manufacturers and traders in this country have been hit by the re-active effects of drought and depression, over which they have no control. Take the country storekeeper in one of these drought-ridden districts of which we have been speaking. We find him assisting the land-holder, who is to enjoy this remission of taxation, whereas he, in his own turn, is to get no such remission. Surely, that is not fair.

Mr Lazzarini:

– There are not many country ‘storekeepers who “ go broke.” They all get their money eventually.

Mr WATT:

-rI suppose they do; but meantime, they pay heavy taxation in good’ years and get no remission in the lean years. As to their “going broke,” I do not know of the failure of many big pastoralists, but they are to enjoy this remission.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The honorable member will admit that the position of the man on the land who, in a given year, gets no return, because his holding has been devastated by drought, is worse than that of the country storekeeper, who will, sooner or later, get his money.

Mr WATT:

– If that werethe exact position, I should agree with the honorable member, but he must not imagine that the “primary producer,” as defined in this Bill - and there is a very narrow definition of the term - is the only man who can claim consideration at the hands of the tax-gatherer through the operation, of forces over which he has no control.

I say, therefore, that this is an invidious distinction in favour of one class of taxpayers, and is not equitable as between sections of that same class. It is also a premium on speculation. Yet no premium of a similar kind is given to speculators in other lines. Take the man who has a grazing area, freehold or leasehold, and engages in dealings in sheep or cattle. Under this Bill he is to get a remission of taxation; but his losses may be due to speculations in live stock. If a trader speculates - if, exercising exactly the same ambition and desire to get rich as the grazier who has been speculating in live stock, he overstocks and loses - he is not to get any remission of taxation.

Mr Prowse:

– It is a pity that more do not speculate on the land.

Mr WATT:

– The honorable member’s interjections are seldom illuminating, although they are more frequent than those of any other honorable member.

Mr ROBERT COOK:
INDI, VICTORIA · VFU; CP from 1920

– His interjection in this case is true, even if it is not illuminating.

Mr WATT:

– It may be; but, if so, it is a rare exception. I point out that, by this class of remission, we shall open the door to speculative results, so far as certain classes of people are concerned, whereas no other section of the community is to enjoy a similar consideration. I ask the House not to imagine that this Bill is going to bring about the millennium, or that it establishes a perfect system of taxation.It does nothing of the kind, and after it has been given a trial for a few years, either this or some succeeding Government will be endeavouring to patch up the mistakes that have clearly occurred through remissions of this kind which have been made.

Another matter dealt with in this Bill is the taxation of bonus shares. I understand that a distinction isbeing made with respect to two different classes of bonus shares. Bonus shares that are given in lieu of dividends out of accumulated profits are to be taxed; the others are not. There is a significant feature associated with this proposal. A dispute on grounds of principle has occurred between distributers of bonus shares and the Taxation Department, under the existing Act, and a test case has been listed for consideration iby the Court.

Sir Robert Best:

– (Several such cases have been listed.

Mr WATT:

– There may be others; but I have in mind one particular case, that of the Broken Hill South Company. It was deemed advisable that those interested in this kind of operation should combine to have a test case brought beforethe Court. The effect of this provision, I take it - and the Acting AttorneyGeneral (Mr. Groom) will say whether I am right or not - is to determine,’ as the Taxation Department would have them determined, all those issues except with regard to the case which is sub judice.

Mr Bowden:

– The clause in question also covers cases that are sub judice.

Mr WATT:

-I do not know whether it can do that. The Acting AttorneyGeneral will probably enlighten us on that point. I do not believe in legislating in regard to cases that are actually before the Court.

Mr Riley:

– This is going to save the country hundreds of thousands of pounds.

Mr WATT:

– It is not a question of saving the country hundreds of thousands of pounds, but, rather, of interpreting the law. If the Court says that the resisting taxpayer’s interpretation of the Act is right, it is then for the Government to say that it will ask for an amendment of the law; but while the existing law is being tested, I regard it as an evil principle for the Government to come down to Parliament witha Bill to settle all these issues before the Judge has a chance of considering them.

Mr Mathews:

– Does not the honorable member think that the intention of the. Act ought to be considered, and any defect remedied?

Mr WATT:

– The intention of the Act must be determined by the wording of it. In deciding such a question, we cannot have regard to what, for example, the responsible Minister said when introducing it, or to what was said by honorable members when debating it. The Court endeavours to read into the verbiage of an Act the motive and intentions which appear from its wording. Legal members of the House have explained that fact on many occasions.

Sir Robert Best:

– The cases affected by this measure are those where bonus shares are issued in respect of accretions of capital.

Mr WATT:

– The honorable member refers to the provision, which simply says that where bonus shares are issued because of an increase in the value of the assets of a company, they are not to be taxed.

Sir Robert Best:

– That is right.

Mr WATT:

– But I am not dealing with that now. I am dealing with the cases where bonus shares are not issued in respect of an increase in the value of the assets, but because of profits not distributed, and for which shares are written off. This Bill says that shares issued in such circumstances are liable for taxation. That is the issue now before the Court, and therefore this House is being asked to determine something which has been listed for consideration by the chief Tribunal of the country.

Mr West:

– I understand that some companies, in order to evade taxation, have taken their reserves and reconstructed. As the Government do not know them in their new form, they are not amenable to taxation.

Mr WATT:

– My experience leads me to say that it is not possible for any company to reconstruct without the Government knowing all about it through its Taxation Office by means’ of the balancesheets which have to be rendered to the Taxation Commissioner, and explained to the shareholders. Therefore, all the facts are ascertainable, and if certain corporations are evading the law, the law should be administered. If the law is not sufficient to cover the emergency, it should be strengthened.

The only remedy a citizen of this country has against the demand qf the taxing officer is to go to the Court, whether he is rich or poor. Certain demands have been made on certain classes of interests in respect to bonus shares. These interests dispute the interpretation placed on the Act by the Commissioner for Taxation. They say, “ We will take it to the Law Court; that is the proper place to. decide it.” And that is what I say. This anticipatory legislation, as I think it is, is, therefore, objectionable.

Mr Groom:

– I do not know that the honorable member is correct in saying that this legislation will affect the right of any particular person.

Mr WATT:

– I think that the Minister will find that it does. so.

Mr Groom:

– There, may be several cases before the Court; but the point is. whether their rights will be affected by this legislation.

Mr WATT:

– I have just been arguing tthat this legislation determines a case that has been listed for issue before the Court.

Mr Charlton:

– If this legislation is not retrospective, it will not affect any matter before the Court.

Mr WATT:

– I do not know that it is not retrospective. One of my first complaints on rising to speak was that it was difficult for a layman, and even for a student of income taxation, to grasp in a few minutes the very many technical provisions of a Bill like this, and that it was reprehensible that we should be asked to deal, in the closing hours of the session, with a matter that might detrimentally affect large interests throughout this country. May I give one illustration of this, and ask for an interpretation of clause 7 ? In the opening words of the clause, there is a change in the form of the wording of the principal Act. In comparing this clause with section 18, paragraph a, subsection 1 of the principal Act, honorable members will see a wonderful similarity in the actual language employed, but a difference in the order of the words. Already in Melbourne there is a large number of men who think that the alteration has been made designedly by the Taxation Commissioner in. order to get very much heavier taxation from certain interests than the Act has hitherto entitled him to collect. In calculating the taxable income of a taxpayer, the Act provides that the total income derived from all sources in Australia shall be taken as a basis, and that from it there shall be deducted -

  1. All losses and outgoings (not being in the nature of losses and outgoings of capital) including commission, discount, travelling expenses, interest, and expenses actually incurred in Australia in gaining or producing the gross income.

In other words, everything that is spent as an outgoing in the legitimate production of income is deductible.

Mr Groom:

– Even if the expenditure occurs outside Australia.

Mr WATT:

– Yes; but the proposed substituted provision allows as deductions -

  1. All losses and outgoings (not being in the nature of losses and outgoings of capital) actually incurred in Australia in gaining or producing the assessable income, including commission, discount, travelling expenses, interest, and other expenses.

The words that Wave been transposed are “ actually incurred in Australia.” They have been put earlier in the proposed new paragraph, and it is feared by the mercantile interests that a number of deductions formerly permitted will no longer be allowed. Take, for instance, the question of debenture interest. I do not dogmatize to the Minister in charge of the Bill ; rather do I submit this matter for consideration by the Commissioner of Taxation and the’ officers of the Treasury to see exactly what will be the effect of the transposition. There are a large number of big companies in Australia, some in the pastoral business and some in mercantile business, who have, raised debenture money in England, and the question, is whether the interest on those debentures is to be treated as a deduction in future, under the’ wording of this proposed new paragraph, as it has been in the past. These people claim that if it is not, the difference in the effect on taxation will be as from about 8d. in the £1 to 2s. 6d. in the £1, and this will mean,” in the aggregate, a considerable amount on the vast sums involved, because, broadly speaking, millions of pounds have been advanced by Britishers as loans to corporations operating in Australia. I ask the Minister to carefully consider what effect the new provision will have on debenture interest, or any of the other outgoings formerly allowed as deductions?

Mr Richard Foster:

– If theassumption of these people is sound, it will be a very serious matter for them.

Mr WATT:

– I am not saying that it is sound ; except that I say the mercantile interests likely to be affected are already experiencing considerable apprehension and concern as to the likely effect of this amendment. The Bill was submitted so late this afternoon that I have not had more than a casual opportunity of conferring with them. I do not think that wo should enact legislation in a hurry and repent it at leisure. It is not a scientific way of doing things. In any case, I ask the Minister to explain the object of the amendment, apart from the effect of the transposition of the words to which I have referred. I think I understand something of the operation of the old deduction provision, and I confess I cannot see any reason for the amendment. At any rate, we should be clear, before we assent to the clause in Committee, as to its object and effect upon the interests concerned.

Mr West:

– Probably it is the outcome of the report of the Taxation Commission in Great Britain upon double taxation.

Mr WATT:

– It has nothing whatever todo with that phase of the question, so far as I can see.

Mr West:

– The debenture-holders in Australia might be called upon to pay taxation on the interest earned in England.

Mr WATT:

– Although that may be a phase of the question,’ it is not the one to which I have invited the attention of honorable members.

I was about to deal with the matter of double taxation. I have not the report of the British Commission in which the Commonwealth Statistician participated, but from memory it appears to me that the wording of the clause in this Bill which deals with that aspect of taxation adopts the recommendation of that Commission. I assume that the Minister has satisfied himself upon that point, and. if so, I say that this is a decided step in advance in Empire taxation relationship that will do far more than we, perhaps, at the present time understand to increase the trading and financial interchanges of all parts of the Empire.

Sir Robert Best:

– This clause is framed in pursuance of the. arrangement with the Imperial Government.

Mr WATT:

– A Commission was appointed by the British Government, and the Dominions who had been complaining about this double taxation were asked to send representatives to it. Mr. Knibbs was sent on behalf of Australia, anc] after - weeks of argument, because it was a knqtty question - we saw enough of it from our end to know that - when men gottogether from every part of the Empire, and began to see the complications and ramifications of the problem, to their surprise and pleasure they got to a settlement which was adopted with characteristic promptness by the British Government, and only needs this confirmation from us to become reciprocally operative. It appears to me that the wording of this clause adopts and renders immediately operative the remission system as between the Old Country and ourselves.

Mr RICHARD FOSTER:
WAKEFIELD, SOUTH AUSTRALIA · ANTI-SOC; LP from 1910; NAT from 1917; LP from 1922; NAT from 1925

– The Prime Minister has said so.

Mr WATT:

– I did not hear him on that point, and no doubt it is the intention of the clause, but we need to be quite sure - because it is a tangled problem - that the recommendations of the Commission are given effect to in this clause. Those traders who either spread abroad from Australia, to the Motherland, as many of our enterprises have done or spread from the Motherland to Australia, will welcome this provision as an act of statecraft that will be beneficial to every one concerned. Of course, it will mean a loss of revenue to a certain extent to both countries, and more so to Great Britain than to us, because of Great Britain’s generosity in connexion with the arrangement; but still it will be beneficial to the Motherland, and indirectly the taxing officers of both countries will eventually get more money for their Treasurers with less harm than they would create by continuing the duplicate system that has unfortunately run ever since income taxation was first adopted in Australia.

I do not wish to detain the Committee further than to say that I hope proposals for relief, such as that which the honorable member for Hunter (Mr. Charlton) has voiced, by increasing the exemption, will not be pressed on this Bill. I would rather have seen this matter, the averaging provision and all other matters ex cept the double taxation clause, which is not a class one, postponed until we can get a chance of understanding more fully the preliminary and final reports of the Taxation Commission. We have apparently lifted one recommendation out of that report for sentimental and political reasons, and are attempting to give it a hasty passage through this Parliament. But the best thing to do with the report is to have it sent in its final form to honorable members, and let it be deliberated on by them, and to let any reorganization of taxation that must be attempted in the near future follow the evidence submitted to the Commission.

Mr Considine:

– What does the honorable member suggest is the political reason ?

Mr WATT:

– I am not suggesting anything more than the remark, but the honorable member’s fertile and imaginative mind will at once see how useful this Bill would prove in binding the rural interests of Australia. I would ask the honorable member, by the way, inquisitive and courageous political thinker that he is, whether he is satisfied with the definition of ‘ ‘ primary producer ‘ ‘ ? Does the definition include the man on the Barrier, whom the honorable member represents ?

Mr Considine:

– Like the honorable member, I have to plead guilty to not having had time to look into the matter.

Mr WATT:

– I advise my honorable friend to see whether the miner is included. Why should he not be included with the primary producers?

Mr Considine:

– Do you mean the mining director or the working miner?

Mr WATT:

– I mean both; if one is included, so should the other.

Mr Considine:

– The mining director is well able to look after himself !

Mr WATT:

– Is that why the honorable member is not attempting the job ?

Mr Considine:

– No; it is because you have already taken it on.

Mr WATT:

– Putting this persiflage aside, it is worth while to note; that the mining interests, although essentially primary, are not included in the definition.

I urge the Minister (Mr. Groom), when the Government come together after the session closes, to impress on his colleagues the necessity of taking a review of the whole taxation sytem of the Commonwealth. I am quite sure that if we were to put the microscope on many of the things we did in finance during war time, none of us would like to perpetuate them indefinitely, particularly the incidence of taxation. I felt it my duty a little while ago to give some illustrations of how income and land taxation, was pressing on some of the primary interests of the country. If honorable members have time in recess to study the figures of the five cases I gave in the hurry of the moment, they will be astounded at the amount we take out of some incomes, to the jeopardy and eventual ruin of some of the abiding interests of the country. I urge that direct taxation shall be dealt with in a general way, and not piece-meal. Let us study again the principles that are operating in our system, and see whether we cannot find one more equitable to the Treasury and to the individual taxpayer, and more particularly to the producing, manufacturing, and exchanging interests of this country.

Mr PROWSE:
Swan

– I rise to support the .Bill, notwithstanding that I feel it is inadequate as an instrument for fairly collecting taxation from the people of Austrafia. I found it somewhat difficult to follow the Prime Minister (Mr. Hughes) when he was introducing this Bill; indeed, I do not think he had a thorough grasp of the situation himself. He referred to a person receiving an income of £8,000 in the first, £3,000 in the next, aud £1,000 in the third year, Of course, if the incidence provided by this Bill were, to commence operation in the third year, and go to the first year with its £8,000, honorable members would recognise that such a taxpayer would be sorry that there had ever been an amendment of the Act; because, on the £8,000 he would pay the tax applicable to £8,000, or .53d. in the £1, and on the £3,000 year he would pay on £5,600, while on the £1,000 he would pay at the rate of £4,000. Honorable members will see, therefore, why I say such a taxpayer would be exceedingly sorry that such a Bill had ever been passed. I repeat that the measure is altogether an incomplete instrument for the purposes desired and which it was hoped it would accomplish. All that the primary producer expects is mere justice. I follow the honorable member for Balaclava (Mr. Watt.) when he says that this law of average should apply to every taxpayer. In justice I concede that that is only reasonable.

Mr Considine:

– The trouble about the argument is that the honorable member did not say that.

Mr PROWSE:

– I understood the honorable member for Balaclava to say that this average method applied to only one section, and I think I am quite right in what I say. But there is certainly much more ground for applying this method to the primary producer than to any other section. The operations of the primary producer may be described as speculative, but I regard them as a necessary hazardous business that is in no way a gamble except to the person engaged in it. It is. an occupation that is highly in the interests of the country ; all our revenue is obtained from primary production, even the wages of the boy who sweeps our streets. Any man who goes out to develop the natural resources of the country ‘and increase its fertility runs tremendous risks. However, I contend that £1 is £1 no “matter who receives it, and we have taxation on one year’s income. To one that receives the same income every year that does not matter ; but a primary producer runs risks from drought and in many other ways. He may lose on some years, and when he eventually strikes a prosperous period with good prices he is unreasonably taxed, taking into consideration his previous low returns. The same remarks apply to the miner and the prospector. The latter may spend £2,000 or £3,000 in searching for gold, and when he has found it to perhaps the same value after years of work he is fully taxed on it without any regard to his previous expenditure. Such a system is not in the interests of the development of the country. When a system of graduated income taxation came into force, the Socialistic idea was met, and there is no desire on the part of the primary producer to set it aside; the whole cause of the trouble of the primary producers arises from the graduated tax and the irregular income. If there were a flat rate the primary producer would have no ground for complaint. Whatever income he received he would pay on that flat rate: but, as it is, if after some bad years he strikes a prosperous year, the graduated scale results in 25 per cent, or 30 per cent, of his income going in taxation, although he badly needs the money to make up his losses. If we devised a flat rate, that would solve the whole problem; but I take it that honorable members opposite would not agree to that. I appeal to them, however, on the grounds of equity and justice.

Mr Considine:

– It was on those grounds that the graduated income tax was introduced.

Mr PROWSE:

– But we want a system that will act fairly all round. However, this Bill is not an equitable instrument, but far from it. It is possible for two persons, each receiving £10,000 over five years to pay in one case £1,146 in taxation, and in the other £520, a difference of £626. Can it be an equitable system under which such a thing is possible? This, of course, may be an extreme case; but the fact remains that in the five years each of the taxpayers had an income of £10,000, and £10,000 is as valuable to one man as to the other, and, therefore, both should bear the burden equally. In tile case I have cited the income for the first year is £4,000, the next year £3,000, and the third year £2,000, the fourth year £1,000, and the next year nothing, or £10,000 in the five years, and the. result is what I have said, viz., £1,146; but reverse the figures so that a rising revenue will bel shown, when a tax of only £520 would be paid. No one can call the present one a complete instrument of taxation. I regret very much that such an important measure as this has to be dealt, with at this stage of the session. It is for a mind of equity to devise a scheme equitable to all citizens who are equally able to contribute to the revenue? I should like the Government to pass this Bill - though,- after all, it is not entirely on the lines of the recommendation of the Commission - bub in such cases as I have cited, where obvious hardship and injustice are inflicted, let us give the Commissioner power at the end of fiveyear periods to make an adjustment with the taxpayer.

Mr Groom:

– Would you leave it with the Commissioner to bargain with the taxpayer without laying down any principle ? /.

Mr PROWSE:

– A man who receives £2,000 a. year for five years receives the same amount of £10,000, and he is on the £2,000 scale all through.

Mr Considine:

– Do you mean a man with a, salary, or what?

Mr PROWSE:

– I* mean a man with a salary or a steady income from investment or any other source, and I say that such a man gets off as cheaply as is possible under the present system, for he only pays £736-. If the primary producer, who receives £10,000 in five years, pays more than that, not only he, but the country, suffers an injustice.

Mr Groom:

– It could not be left to the Commissioner to1 make adjustments in any arbitrary manner, without laying down some principle that would apply equally to all taxpayers.

Mr PROWSE:

– If that standard were fixed, £736 would be the least a man receiving that income should pay.

Mr Groom:

– The honorable member suggests that it should be left to the Commissioner to adjust the taxation after five years on such a basis as he thinks equitable. We could not do that.

Mr PROWSE:

– Will the Minister contend that any instrument for the assessment of taxation which requires the primary producer to pay more than a man on a steady income pays is fair ?

Mr Groom:

– I am suggesting that the remedy is to devise some equitable basis, and not to leave the taxation to be adjusted at the Commissioner’s discretion.

Mr PROWSE:

– I suggest that £736 should be the standard amount of taxation to be collected from persons with an income of £10,000 over a period of five years.

Mr Mathews:

– The honorable member forgets that a man receiving a regular salary has no chance of increasing it. The primary producer is speculating, and in one year he might make £1,000 or £20,000.

Mr PROWSE:

– The man on a regular salary does get increases, and if he has merit he will have an excellent chance of increasing that income without any risk ; but whether income is derived from salary or from pumpkins, a pound is a pound ; but because of the uncertainty of the income of the producer, he is hit by the taxgatherer extremely hard.

Mr Mathews:

– The man with a fixed salary cannot pass on the taxation; the other man does.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Does the honorable member approve of the principle of carrying on a man’s losses ?

Mr PROWSE:

– I do, and it is one of the most scandalous features of the taxation system of this country that a man who loses £1,000 in one year, and makes £1,000 in the next year, is taxed upon the income of £1,000 although when the two years are reckoned together he has not made one penny. I repeat that I am sorry that the House is forced to deal with this Bill to-night. An amendment of the Income Tax Assessment Act was promised nearly eighteen months ago and we should have received it earlier; but I accept the instalment of reform contained in the Bill, and hope that the Government, at a later stage, when the operation of these amendments has proved them to’ be inadequate, will bring down a more complete proposal.

I have before me the particulars of a case in which something like £35,000 was invested. The profit over a period of seven years was £12,330 - an average of £1,761 per annum, or less than 5 per cent., on the outlay. Had that income been’ received in annual amounts of £1,761, the taxation paid in the seven years would have amounted to £841, but because it’ was received spasmodically, in amounts varying from £250 upwards, the taxation actually paid was £2,150.Can that be considered to be even in the region of fair play? Oneman receiving £1,761 per annum regularly, but producing no wealth, would pay only £841 in taxation over the seven years, but the man who invests his capital in the development of the country, and takes all the hazards, has to pay £2,150. I know of no injustice in connexion with our legislation that is greater or does more to retard the progress of the country. This Bill is an admission of the necessity for some remedy, and as such I accept it. It is clumsy and inadequate, but it is a step in the right direction, and I hope that the Government will offer an early opportunity to honorable members to consider a revised instrument for the assessment of taxation which will be equitable all round, and not continue the heart-burning that is now caused to citizens by the unjust and cruel incidence of taxation.

Mr BOWDEN:
Nepean

.- The time and manner of the introduction of this Bill are certainly most unfair to honorable members. It is a most important measure, with a very wide scope, and we should have had it earlier.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The honorable member will admit that the Government had to await the report of the Taxation Commission.

Mr BOWDEN:

– We have not yet received the final report of the Commission, although the first report has been before us for a considerable time. The motion for leave to introduce this Bill has been on the notice-paper for some time; but as it was only advanced to the first reading to-day, honorable members did not earlier receive copies of it.

Mr Groom:

– The ex-Treasurer, in his Budget speech, announced many of the alterations which are contained in the Bill.

Mr BOWDEN:

– But a good many other alterations that were not announced are included. If we could have had a short Bill to deal with the reciprocal arrangements between the Mother Country and the Commonwealth for the avoidance of double taxation, to give relief to primary producers, it might have passed through the House in a very short time, but apparently the Government and the Commissioner, knowing that the House wanted those amendments, have dragged into the Bill other things which honorable members should have ample time to consider before being asked to finally decide upon them. The honorable member for Balaclava (Mr. Watt), said that the proposed relief for the primary producer should not have been proposed at this time, and in any case should be wider in its scope and different in its outlook; but I think that at the earliest possible moment some relief should be given to those taxpayers. One has only to read the report of the Taxation Commission, and the numerous cases cited therein, to realize that a very grave injustice has been done, not only to the big grazier, but also to the small man on the land. One of the most striking cases that it is possible to imagine is cited in the Commission’s report. Over a period of seven years a grazier made a net profit of £56,447, the result of his transactions in each year being - First year, a profit of £24,015; second year, a profit of £28,804; third year, a loss of £34,645; fourth year, a loss of £67,255; fifth year, a profit of £4,162; sixth year, a profit of £55,531; and seventh year, a profit of £45,835. Although the net result of seven years’ transactions was only £56,447, he was asked to pay in Federal income taxation alone £60,161, to say nothing of State income taxation. If that man had invested his money in city property or in war loans, or in something else that produced a regular annual income of £8,064, he would have paid in taxation only £13,299 in the seven years, and he would have taken no risks and no responsibility. He would have sat down quietly and reaped £8,000 per annum from gilt-edged securities, and would have paid in the seven years £13,299 m taxation, whilst the man who took all the risks - and that there is a risk in the pastoral industry is shown by the fact that in one year he lost £67,255 - was required to pay in taxation more than he actually received. That is not the way in which to encourage primary production, or induce people to leave the cities and go upon the land.

Mr Considine:

– Has that man gone out of business?

Mr BOWDEN:

– I do not know; his name is not given; but in any case the incidence of the taxation is most unfair. Another pastoralist had a net income in five years of £4,802, equal to £960 per annum. He was required to pay in Federal income taxation £2,285, and in State income taxation £716. Thus out of his total income of £4,802 he paid out £3,001 in taxation to the Federal and State authorities. Had he been in receipt of a regular annual income of £960, he would have paid in taxation over the five years only £440. About 130 of these cases were examined by the Commission, and I think that that body is justified in its conclusions -

These examples exhibit a state of affairs which cannot be regarded with complacence, and even if they stood alone as special and peculiar, they call for some remedial measure. But they are, unfortunately, typical of a large number. The total taxpayers who are primary producers cannot be ascertained from the latest departmental statistics available, but they number, probably, 100,000. The first of these three examples is admittedly an extreme case, but it “is an actual case.” A system under which such a result is even possible is faulty in both conception and incidence.

These cases show that there is ground for some relief. The system of suspense credits would have been better than that which is proposed; but a certain measure of relief will certainly be afforded. With respect to bonus shares, another phase is opened up in regard to which relief should be given.

Mr Mathews:

– Why do not companies pay in profits and not in bonus shares ?

Mr BOWDEN:

– There may be several reasons.

Mr Mathews:

– Evasion is the reason

Mr BOWDEN:

– Not necessarily. Take the case of a small company, which would be known in . this State as a proprietary company. I am referring to a Sydney firm, which has a share capital of £10,000. It became necessary “for the company to approach a bank in order to borrow money to carry on. It had been running for about twenty years, and, in that time, it had accumulated about £15,000 of reserves, which had been turned into stock. A sum of £10,000 was required. . The bank authorities said, “ You want as much as the whole of your capital “; but the representatives of the company replied, “ We have reserves,” and they mentioned the amount. The objection of the bank was that there was nothing to prevent the company from distributing those reserves; which, if that were done, would materially affect the asset against which it was desired to borrow. The bank officials added, “ If you convert your reserve into shares °and make your capital £25,000, we will lend you the money you need.” The firm, converted the capital into shares.

Mr Mathews:

– But those people never paid any taxes.

Mr BOWDEN:

– They had been paying taxes, on the 2s. 8d. rate, upon the whole of their reserves, which had been earned since the taxation was imposed. The effect is that the whole of the £15,000 has been brought into the ambit of taxation in one year. The rate has been “ skied,” although there has been no change in the company. The amount of money invested in the company is the same; its assets are the same. All that is different is a bit of paper, the scrip. I emphasize that the income is the same, whether one speaks of reserve and capital or describes it all as capital. But the important fact is that there is brought into taxation, in one year,, twenty years’ accumulation of reserves; so that this company, which was in need of money to assist it to carry on its activities, would be called upon to pay thousands of pounds by way of taxation simply because it had capitalized its reserves.

Mr Mathews:

– Why did those people want to borrow money from the bank if they had £15,000 in reserve?

Mr BOWDEN:

– It was ail in stock. They wanted cash to enable them to carry on their business. Another consideration is that shareholders have practically no option in New South

Wales. In, Victoria, however, when reserves are proposed to be capitalized, the shareholders are given an option of taking proposed capitalized reserves in cash.

Mr Considine:

– If a person is taxed on his income and he turns part of it into capital, upon which he derives interest, he is taxed upon that interest. Why should not the New South Wales firm be taxed upon the income derived, from the £15,000 ?

Mr BOWDEN:

– They would be taxed on the income- but what I am complaining of is that they are taxed upon the £15,000 capital as though it were income. I invite the honorable member to suppose that I have 500 shares in a company which pays 10 per cent. I get £50; that is my income. If the company doubles the1 capital out of reserves, the reserves are still in the company, and are bringing money into the company. Suppose that it capitalizes its reserves, and I get 1,000 shares, upon which I receive 5 per cent, instead of the 10 per cent, on 500 shares, my income from the shares is still £50. But the Taxation Commissioner holds that my income is not £50, but £550, which is absolutely absurd. I desire to emphasize the remarks of the honorable member for Balaclava (Mr. Watt), who pointed out that the matter of interpretation of the Act is at present before the Court. The proposal in the Bill is, in effect, that where the Commissioner has a doubtful case before the Court-

Mr Groom:

– No; that is not the position at all.

Mr BOWDEN:

– It is. The intention is to alter the interpretation of ‘ ‘ income” in order to make it clear that bonus shares shall be made taxable, and this measure will make the new provision retrospective to 1915.

Mr Groom:

– The intention is to give relief in the direction in which relief is deemed to be merited.

Mr BOWDEN:

– It also practically imposes new taxation. Parliament has never passed retrospective legislation upon matters such as these. It is quite a new departure to introduce retrospective legislation bearing upon cases actually before the Court. Where there are cases proceeding which come within the ambit of a measure before Parliament, there is always a slaving clause specifically exempting those cases.

Mr Cunningham:

– But no decision has been arrived at in the present instance.

Mr BOWDEN:

– The position is that Parliament passes a taxation measure in which it is set out that certain things shall become taxable. The Court is appealed to to say whether or not a person is liable to taxation thereunder. It is fair that the Court should be approached and asked, “ Am I liable or not?”

Mr Groom:

– This Bill will not affect the case of any particular person before the Court. His right will be recognised.

Sir Robert Best:

– It will, unless express reservation is made.

Mr BOWDEN:

– The section of the Act which dennes ‘ ‘ income “ is to be altered. In clause 12 of the Bill it is provided that the amendments of the principal Act made by certain specific paragraphs, and including so much of those which embrace in the definition of “income” the amount for which trading assets have been sold, shall be deemed to have come into’ operation from the date of the commencement of the Income Tax Assessment Act 1915. The effect will be to make the legislation retrospective so far as bonus shares and having assets are concerned.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– What is the honorable member’s objection to profits which are distributed in the form of bonus shares being made liable for taxation?

Mr BOWDEN:

– The profits are not distributed in the first instance. They are capitalized - sometimes against the wishes of the shareholders.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– Take the case of a primary ‘producer who derives his additional capital in the form of additional stock. He is taxed upon that. Why should not another man be taxed on his bonus shares, which are accumulated profits?

Mr BOWDEN:

– For the reason that he never receives it as income. There is an increase shown on a bit of paper, but the income is not in any way increased ; bonus shares are still capital. There is not, and has not been, any opportunity of spending it. I have known cases in which poor women, who have received bonus shares, have been assessed, and have had to sell those shares in order to pay the taxation. The very unfair point is that there will be brought into one year’s sphere ‘of taxation profits accumulated over a period, perhaps, of twenty years, and by that means the rates are “skied.”

Mr Considine:

– The receivers of these bonus shares have been paying less income tax because of the putting of profits to reserves.

Mr BOWDEN:

– Not necessarily, because the extent to which any particular shareholder is interested might be very small, and the company has already paid income tax at the flat rate. A great many things have been dragged in by this Bill which might have been left over for another occasion. A gift of assets is made taxable as income. If a man goes out of business, leaving it to his son to carry on the concern, which happens occasionally, the whole of the stockintrade, good-will, and everything else is treated as income for the year in which the gift is made, and the taxation upon it may ruin the business. Then, when a business is sold, good-will is treated as income, although it takes many years to build up a good-will that has any considerable value. When a man dies, however, good-will is treated” not as interest, but as capital.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I think the honorable member is in error in that matter.

Mr BOWDEN:

– I have accepted what the Prime Minister told us. The Minister’s interjection shows that more time is needed for a careful analysis of the provisions of the measure. I would rather the Bill stood over until next session, so that we might deal with it as it should be dealt with.

Mr CUNNINGHAM:
Gwydir

– I join with those who have protested against the introduction of the Bill in thy dying hours of the session. The measure has, so to speak, been thrown at us with the threat that if we try to amend it the Government will not proceed with it. I hope that the House will resent that threat, and let Ministers carry the odium of withdrawing the measure because members have seen fit to exercise their rights of discussion and amendment. Members have told me that they would move amendments if they were not afraid of the withdrawal of the Bill, so that evidently the threat of the Government is preventing Parliament from functioning as it should do. No private member would like to have attached to him responsibility for the loss of a Bill which affords some small measure of relief to the taxpayers. But no threat will pre vent me from doing what I consider to be necessary in the interests of those who sent me here. It is an insult to Parliament to bring down a Bill of ten pages the day before it is proposed to enter upon a recess of five or six months, more especially a Bill bristling with intricate technicalities. Every business man knows how difficult it is to prepare income tax returns which will not involve trouble with the Commissioner. More time should be given for the discussion of the Bill, even if we have to sit longer. Those who now suffer a great injustice by the operation of the income tax law should be given relief by the removal of anomalies. I am glad that the Deputy Leader of the Opposition (Mr. Charlton) intends to move to increase the exemption. At the present time persons who have an income of only £100 a year are taxed, although the Courts have fixed £4 5s. per week as the living wage. Many men, taking into consideration the time when they are not working, do not make more than £3 or £3 10s. per week, yet though not in receipt of the living wage, they are expected to furnish income tax returns, and to pay taxation on their income. I am surprised that no notice has been taken of the protests which have been raised repeatedly against the unfair operation of the income tax in the assessment of live stock. A struggling man with 1,000 breeding ewes may lose half the number in a drought, but from the remaining half he may get 400 lambs, so that at the end of the year he has 900 sheep where previously he had 1,000. The present method of assessment takes no account of his losses, but regards the natural increase of 400 as so much income, and this method of assessment has been in operation for years. It may happen that the lambs which are born within the year for which they are assessed as income die before anything can be got for them. Hundreds of cases of that kind have occurred in my electorate during the past few years.

Mr Jowett:

– The Bill gives relief in such cases.

Mr CUNNINGHAM:

– No; it does not amend the section under which this live stock is assessed as income. It must not be forgotten that the breeder of sheep is taxed on the money that he gets for their wool or their carcasses. The Go- vernment should have granted relief in this matter long ago. The honorable member for Nepean has shown how harshly the law operates at times towards persons interested in companies, and we who represent country constituencies, and are not so familiar as he is with the kind of case of which he has spoken, are indebted to him for the remarkably clear manner in which he has exposed the anomalies of the law. Members should have time to weigh speeches such as his. Presumably, it is intended that there shall be an all-night sitting, in which the Bill may be forced through.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I never knew a Government to intend an all-night sitting.

Mr CUNNINGHAM:

– Surely it is not expected that a Bill of ten pages will be put through in an hour or an hour and a half !

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I have seen a Bill of that length put through in ten minutes.

Mr CUNNINGHAM:

– Some of the Government measures work so badly that they might seem to have been put through in that time. Ministers are not acting fairly towards members in bringing forward a Bill like this so late in the session. I hope that the House will not bs influenced by the threat that the Bill v. ill not be proceeded with if attempts are made to amend it. It would be better to let the measure go over to next session than to place it hurriedly on the statutebook. If we pass it to-night, and, later, attempt to get the anomalies which it will create remedied, the Government will say, “Why did you not have these matters dealt with when the Bill was before Parliament V The Government has had two years in which to bring down amending income tax legislation.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The honorable member has done his share in occupying with talk time that could have been used in the consideration of clauses.

Mr CUNNINGHAM:

– The way in which Government measures are presented to Parliament provokes criticism. The Convention Bill was introduced in a form in which it was not in the least acceptable to the House - in a form., indeed, that was not acceptable to any one. I do not think the Prime Minister himself thought very much of it. This Bill follows on very much the same lines. It has been hastily thrown together, and honorable members are now asked to pass it in the course of a couple of hours, leaving the Taxation Commissioner to do the rest. The Bill having become law, the Commissioner will interpret it, and if a dispute occurs between him and a taxpayer, the latter, in order to get justice, will have to appeal to the Court. It is not every man who cares about incurring the cost of law proceedings.

Mr Considine:

– It would be cheaper to pay the tax.

Mr CUNNINGHAM:

– I agree with my honorable friend. Many men would prefer to suffer an injustice rather than incur the expense of going to law. I would pay the taxation demanded by the Commissioner, even if I considered it to be unfair, rather than suffer the risks of going to law; because the Commissioner has behind him the whole of the resources of the Commonwealth. The late Mr. Ryan, K.C., used to say that the only Court (hat was right was the last on© to which a man could appeal, and that it was right only because it was the final Court of appeal.

The Opposition will assist the Government to so amend this Bill, that it may be more acceptable to the people. That, however, cannot be done properly in the time at our disposal. As it is. we are asked to agree to the Bill being rushed through Parliament, with the result that it will not receive the consideration which its importance demands. Many honorable members are not prepared to remain here all night, and even if they were, we know that by 4 a.m. or 5 a.m., honorable members become so mentally as well as physically fatigued that they are unable to properly analyze the provisions of a measure of this kind. The Bill has many anomalies, and it will only be after it has been passed and the people are suffering under it that; honorable members will realize how foolish they were in allowing legislation of such a character to be rushed through Parliament in the dying hours of the session.

Mr GREGORY:
Dampier

.- While I regret that there has been some delay in introducing this Bill, I welcome it because of the most important concessions for which it provides. The necessity for ‘ making such concessions has been proved over and over again in evidence given before the Royal Commission on Taxation, and I hope that there will be no delay in passing the Bill.

Mr Considine:

– This is a new note.

Mr GREGORY:

– Not at all. The Royal Commission on Taxation has not yet finalized its work. I hope that when its final report has been presented the “Government will submit a measure providing for many necessary taxation reforms, and that we shall be given ample time to consider it. We are looking forward to the introduction of an amending Bill that will make for simplicity of taxation methods, and provide also for uniformity. A special effort should be made to induce the States to come into line with the Commonwealth in order that we may secure uniformity of taxation, and thus reduce the cost of collection, and at the same time lessen the troubles of taxpayers, who now have to prepare so many varying returns. The report which has been presented by the Commission shows how essential it is that we should have amending legislation to give relief to primary producers, who have for long been most inequitably treated. I should have been better pleased had the Bill provided for the payment of taxation on actual cash profits as far as primary producers are concerned, and not on increases of stock. The honorable member who has just resumed his seat (Mr. Cunningham.) has referred to the losses of stock that have been suffered by graziers and others who have been taxed on increases in stock, hut I am glad that the Government are now1 giving us a portion, at least, of the concessions for which we have so long been asking. They are giving us the average system which we have been demanding for some years, and while the provisions of the Bill do. not go as far as we would like them to go in that direction, they will, at least, grant some relief to a class of the community which has been very harshly treated. I thank the Government for this Bill, and I hope that when the final report of the Commission has been received those who. go into the back country and help to develop Australia will be granted greater concessions than are extended to those who carry on business in our cities.

I was more than surprised at the speech made to-night by the honorable member for Balaclava (Mr. Watt). The primary producers might well have expected a little sympathy from him. His speech displayed a lack of consistency on his part. When he held office as Treasurer and the war-times profits tax was before this

House, I pleaded with him for some consideration to be extended to those who for years before the war had started in the pastoral industry, but who, up to the outbreak of war, had shown no profit whatever on their operations. I quoted, among other instances, the case of a man who had invested £20,000 in the pastoral industry and who, for some years before the outbreak of war, instead of making any profit, had suffered big losses. That man, however, in one year of- the war made a profit of £4,500, and was called upon to pay £2,250 in respect of the war-times profits tax in addition to the ordinary State and Federal taxation. The honorable member, however, as Treasurer, specially exempted from war-times profits tax -

Any agency (in which little or no capital expenditure is required) to the extent to which the Commissioner is satisfied that the profits arise from commissions in respect of purchases, sales, leases, loans, insurances, or collections of money made on behalf of any other person. …

Thus a city man who during the war made a profit of £10,000, £15,000, or £20,000, not by investing any capital, but by “jobbing,” and so making things dearer for the people, was absolutely exempt from the war-times profits tax, whereas men who nad been battling for years in the bush had to mortgage their holdings in some cases in order to pay that tax. The provision in this Bill in regard to average income is a concession in a small way, and is -badly needed. Those who read the report of the Commission will realize how necessary such an amendment of the law is. I also hail with satisfaction the provisions of the Bill in regard to the mining industry. We are all familiar with the difficulties attending the opening up of a new field. I know of men who1, after battling in the ‘ ‘ never-never country “ for fen or fifteen years, made a “find,” which they were able to dispose of, receiving payment partly in cash and partly in shares, and were compelled to file their schedule because of the taxation demanded in respect of those shares. I thank the Government very heartily for this concession to the mining industry. A prospector makes a little profit, perhaps only once in a life-time, and hitherto the Income Tax Department has been taking a very great proportion of such profit. I do not desire to delay the House further, except to express the hope that when we go into Committee the Prime Minister (Mr. Hughes) will explain why clause 12 has been made retrospective, because it seems to me to be so farreaching that it may be unjust in its incidence.

Mr CORSER:
Wide Bay

.- While this Bill may do much good it is also calculated to work much injustice, aud I enter my protest against its introduction at this late stage of the session, unless we can. secure considerable alterations from the Minister <when we go into Committee. It is impossible, in the’ circumstances, for it to receive due consideration. If it be carried, large business firms in Queensland, who realized the necessity of putting aside reserves - in respect of which they had already paid the war-times profits tax and income tax - in order to meet losses that must inevitably occur when the slump comes, and their stocks are consequently reduced in value, will find themselves, so to speak, between the devil and the deep blue sea. The State Taxation Department has collected income tax not only on the profits that have been distributed in the shape of bonus shares, but also on such reserves. Take a company with a. capital of £200,000 in 200,000 shares of £1 each, which had reserves amounting to £25,000. No deduction was allowed the company in respect to its earnings on that £25,000. The tax was based on the smaller amount, and, consequently, was much heavier than it should have been. The legal advisers of various firms told them that the best course for them to adopt would be to distribute their reserves in the form of bonus shares. That was done. After these bonus shares were distributed, in order to avoid being unjustly taxed by forcing the State Taxation Department to distribute the earnings on the whole of the capital, and not on a portion of it only, we have had the Commonwealth Taxation Department saying, “ The shareholders must a.t once pay heavy taxation on the whole of the bonus shares allotted.” To comply with this demand would have meant almost ruination to some firms, and I am told on good authority that there are cases now pending in the Courts concerning the matter. When I know that many facts would have been supplied to me, if time had permitted, by people in Queensland, I feel that I am not justified, as a. representative of a

Queensland constituency, in voting for this Bill to-night unless we secure amendments. Honorable members should have tim’e to consider every clause of the measure and its probable effect on every part of the Commonwealth, and not on one State alone. We have not time to communicate with Chambers of Commerce or people who are largely interested in such a Bill. One honorable member has pointed out that if bonus shares are distributed, the recipient gets a larger income, but such is not the case. A company which distributes bonus shares is losing it’s reserves upon which it has been earning -money with which to pay” dividends to its shareholders, and the receipt of bonus shares does not mean a larger dividend. The distribution of bonus shares in Queensland was undertaken because the State taxing officers collected the tax on the basis of the paidup capital of a. company, and did not distribute the earnings on paid-up capital and reserve funds. We are not given the opportunity of discussing this Bill on itsmerits as we should. 1 appeal to the Government to lay it aside until honorable members have sufficient time to get in touch with those who are affected by it, so that we may see what action it is advisable to take, or agree to make amendments.

Question resolved in the affirmative.

Bill read a second time.

In, Committee’:

Clauses 1 to 3 agreed to.

Clause 4 (Rate of tax on income from primary production).

Mr BELL:
Darwin

.- I am afraid that the definition of “ primary producer “ will lead to a great deal of trouble in the administration of the measure. There are many people engaged in industries who can as readily be termed primary producers as those who are included in the definition in this clause. I cannot understand why people who are engaged in the mining industry should be excluded.

Mr Groom:

– Provision is made for mining in other parts of the Bill.

Mr BELL:

– The income of persons engaged in mining fluctuates possibly more than does that of those who are defined in the clause as primary producers, and I think that they ought also to get some measure of relief.

Mr Bowden:

– I would like to know whether dairymen are included in the definition of primary producers?

Mr Groom:

– They are included as persons engaged in primary production resulting directly from the maintenance of animals or poultry.

Mr Wienholt:

– I notice that beefarmers have been omitted from the definitions of primary producers.

Clause agreed to.

Clause 5 agreed to.

Clause 6 -

Section 14 of the principal Act is amended -

  1. by omitting from paragraph (b) thereof, the words , “ credited or paid”, and inserting in their stead the words “ which are credited or paid, or which are distributed by an increase in value or number of shares” ;
  2. by inserting in paragraph (b) thereof, after the word “ debenture-holder “, the words “ out of the current or past trading profits “ ;

Section proposed to be amended -

The income of any person shall include -

  1. dividends, interest, profits or bonus credited or paid to any depositor, member, shareholder, or debenture’ holder of acompany……
Mr BOWDEN:
Nepean

.- I move -

That paragraphs (a) and (b) be left out.

If this amendment is agreed to the position will be as it is at present, and we shall not be imposing in an indirect way taxation on transactions that occurred, perhaps, five or six years ago, and in respect to which persons rendered liable by this clause for the payment of taxation may not now have the means to pay it after such a length of time. If we agree to clause 12, these paragraphs will have a retrospective effect, and impose taxation on the distribution of bonus shares and other similar dealings dating back to 1915.

Mr WATT:
Balaclava

.- The desire of the honorable member for Nepean (Mr. Bowden), will best be met by omitting clause 12, the retrospective nature of which makes the paragraphs the honorable member seeks to omit very dangerous. No reason has been given for the presence of clause 12 in the Bill. I cannot imagine why the scope of the measure should be permitted to stretch back as far as 1915, and the Minister might, at this stage, give some explanation of the necessity for the retrospective nature of the provision. Otherwise the Committee would be justified in agreeing to the amendment.

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– The object of making clause 6 retrospective is for the purpose of affording relief in certain cases promised by the exTreasurer (Sir Joseph Cook) in his Budget speech in these words -

The law will he amended so as to grant exemption from income tax to shareholders in companies . in respect of any distribution, whether in cash or in shares, of value representing profit on the sale of capital assets, or writing up of value of capital assets.

It is intendedto make this amendment of thelaw retrospective for all years.

Mr Bowden:

– Is it the only object of the clause to give relief?

Mr GROOM:

– And also probably to prevent refunds. Assessments have now been made and closed, and it might have the effect of compelling the refund of some of the past collections.

Mr Bowden:

– Does the Minister say that this clause will not affect the cases that are before the Court now?

Mr GROOM:

– I believe there are a number of cases before the Court, and, speaking without having the documents here, I believe that individual ‘ cases may be affected, though I cannot say definitely.

Mr Watt:

– Surely you can say whether or not the clause will affect cases where bonus shares have been distributed to cover accretions of accumulated profits.

Mr GROOM:

– Subject to correction, I understand that if assessments are completed and closed it is not intended to use this clause for the purpose of reopening them.

Mr Watt:

– But surely you will not by forceof law interfere with cases that are notclosed but disputed and sub judice.

Mr GROOM:

– As to the particular case before the Court now, I understand the object to be to obtain an interpretation of the law as at the time the ground for the proceedings arose.

Mr Bowden:

– But the Minister knows that it is only a test case.

Mr GROOM:

– A particular individual is bringing an action.

Mr Bowden:

– The Commissioner has brought a test case, and other cases are held over pending the decision.

Mr GROOM:

– We cannot be prevented from declaring the law on which the Department has been actingall through.

Mr WATT:
Balaclava

.- It is important to know that two principles in the Bill are properly, understood by the Minister (Mr. Groom) and by the Committee. One principle is the retrospective effect of this clause on many other clauses, and we have not had a proper explanation of that. The other has reference to bonus shares, and the question is whether this law, retrospective or otherwise, will close the Court to certain litigants. With all respect to the Minister, I say it is not a case of our making the law clear; the Court has been asked to do that on a test case. Nothing we do should take away from that tribunal the power to settle the law as it was when those cases arose. Parliament does not do the sort of thing suggested. If, after the decision, the public interest is not properly safeguarded, .it is for the Executive to recommend legislation to put matters right.

Mr Hughes:

– That can be dealt with by a proviso in clause 12 exempting those cases from the operation of the clause.

Mr WATT:

– That will satisfy me with respect to t”he particular case, but I would like to be satisfied as to the necessity for any retrospection in clause 12.

Mr Hughes:

– Where the effects are to the benefit of the taxpayer, surely they are good ?

Mr WATT:

– Yes, for the taxpayer. I do not care whether the effects are for or against the taxpayer, there must be ample justification for retrospective legislation, and the onus is on the man who proposes it. We do not know whether it will “ kick “ against the Treasurer or the taxpayer ; but whatever the result there must be urgent justification before we assent to retrospective legislation. On the second reading I asked the Minister to explain the object and purpose of the retrospection, and of several other proposals, but that has not been done. If it is proposed to pass all these clauses now, unarrested by the amendment of the honorable member for Nepean (Mr, Bowden), our only remedy is to throw out clause 12, although we may approve of some of it.

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– Suppose the law were declared against the Commissioner’s view, it might mean, without this clause, “ that the Treasury would lose a considerable sum of money. A case is before the Court for the inter pretation of this particular individual’s right; but it is essential that we secure that there can be a demand made for moneys collected under what was regarded as the law. The Commissioner has been acting under what he believed on advice to be the law.

Mr Watt:

– Suppose the Court decides in this particular case that the Commissioner was wrong - you must not close the door to refunds.

Mr GROOM:

– In the particular case the litigant’s claim will be honoured. The desire is to have a declaration of the law to protect the revenue in either case.

Mr Watt:

– Well, then we must vote against this clause.

Mr BOWDEN:
Nepean

.- The Minister (Mr. Groom) must know that it was agreed that the particular case now before the Courts should be taken as a test case, there being, I should say, scores of assessments depending on the decision. If only in one case the claim is to be honoured, then I say it is unfair. Now that a test case has been stated, the Commissioner comes to Parliament, and, in effect, says, “I am afraid I am going to be defeated ; will you alter the law before the case comes on?” I must say, speaking from experience, I have found the Commissioner a most unreasonable man to deal with. On one occasion, when I wished to see him in connexion with a case, he put off the interview’ for two days, and then told me to come in and see him the following week. I journeyed from Sydney to Melbourne for that express purpose, and he then asked me to put my objection in writing, for he could not interview me. He treated a client of mine in a similar manner, absolutely refusing to see him, although he also had come over from Sydney. I do not wish to accuse any officer of unfairness, but merely give my. experience. We have no right, by side-tracking, to prejudice the decision of the case which the Commissioner has practically decided shall be a test case. The Minister tells us that this clause is only to give relief. If that is the case, would it not be well to have a proviso like this added to the clause -

Provided that nothing in this Act shall be deemed to impose any additional taxation on any income accruing before 8th December, 1921.

Mr Watt:

– That could not be done because some of the provisions relating to deductions will have the substantial effect of imposing taxation.

Mr BOWDEN:

– I must say that I would like to have the retrospective portions of the Bill deleted.

Mr.Fenton. - What is the nature of the cases before the Court?

Mr BOWDEN:

– There are four or five different cases on different points connected with shares. The one I have in my mind now is a case in which accumulated reserve profits have been capitalized and distributed; and it is a very arguable point whether these profits are liable to taxation. It has been decided in America, where the wording of the Act is not exactly the same, that an alteration of capital is not income.

Mr Groom:

– The test case is simply to determine the law at the time when the cases arose, not to determine the law for all time.

Mr Watt:

– Of all cases up to date.

Mr BOWDEN:

– That is so; and it is now proposed, before the test case is settled, to alter the law so as to have the decision in favour of the Commissioner, and make it retrospective from the beginning of the operation of the Act.

Mr Watt:

– What is required is a common rule in law applicable to all similar cases; and this Bill will stop that.

Mr BOWDEN:

– I do not wish to be unreasonable, but it does seem preposterous that while a case is pending the Minister should ask the Committee to alter the law in such a way as to decide that case in this Parliament by making this interpretation retrospective to the commencement of theoriginal Act. I recognise that the excision of clause 12 will do more than I desire to do, but I see no other way of achieving my object.

Mr Groom:

– The honorable member is only concerned as regards the retrospective effect of this clause upon cases that are now sub judice.

Mr BOWDEN:

– As the only judicial cases are test cases, the decisions should apply to all assessments of a similar character.

Mr Watt:

– What we all desire is to keep the door open until the law on this question is declared. This Bill is closing it against all but the actual litigants whose cases are now pending.

Mr Groom:

– But the honorable member for Nepean has no objection to declaring the law as to future cases.

Mr Watt:

– He does not agree with the Government proposal as to what the law shall be in future.

Mr Groom:

– I understand that he does not object to this proposed relief being given.

Mr BOWDEN:

– I do not object to relief being given to holders of bonus shares representing accretion of capital, but I object to other bonus shares being made liable to taxation.

Mr MATHEWS:
Melbourne Ports

– I quite agree with the honorable member for Balaclava that if, under the present law, these people had no liability, we have no right to pass a retrospective law to impose a liability. But . I desire some information from the Government. Was the effect of transferring theprofits of a company to a reserve fund an evasion of taxation?

Mr Watt:

– No.

Mr MATHEWS:

– Would a shareholder, who had other income, have paid a higher rate of taxation if the profits of the company had been distributed in dividends?

Mr Bowden:

– He might, or might not.

Mr MATHEWS:

– By keeping those profits in the possession of the company and paying the taxation at the source, did he pay less taxation in respect of his individual income?

Mr Watt:

– The honorable member knows that the undistributed profit is taxed at the flat companiesrate, which, in many cases, is very much higher than the rate paid by the individual shareholder.

Mr MATHEWS:

– I understand that, but what I desire to know is whether, if these profits had been transferred to the individual shareholder, the rate of taxation paid by him would have been higher?

Mr Watt:

– In some cases it would, and in others it would not.

Mr MATHEWS:

– Were these profits transferred to a reserve fund in order to avoid taxation? If so, we should amend the law as the Minister desires, but if the existing law did not impose a liability which has been evaded we should not amend it retrospectively in order to impose a new liability.

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– I have listened to what has been said by the honorable member for Nepean (Mr. Bowden) and others, and after having discussed the matter with the Commis- sioner of Taxation and the Treasury officials, I am agreeable to the excision from clause 12 of the words “ paragraphs (a), (b), and (c) of section 6.” These words cover all that class of cases to which reference has been made, and their deletion will alter the application of the Bill in a very material way.

Mr.Watt. - Does the Prime Minister feel at liberty, at this stage, to explain the necessity for the retrospective operation of other portions of clause 12?

Mr HUGHES:

– That is necessary in order that the taxation may remain as it is on the assessment as made. A recent decision of the High Court, to which I referred when moving the second reading, only applied to the State Act, but if it should apply to the Federal Act it would, I am informed, make a difference of hundreds of thousands of pounds to our revenue. That is a possibility we cannot afford to face.

Mr.Watt. - This retrospective provision is to prevent the heavy refunds that may be called for ?

Mr HUGHES:

– That is so.

Mr GIBSON:
Corangamite

.- Will the retrospective operation of clause 12 apply also to clause2, paragraph (c) ?

Mr Hughes:

– No.

Mr GIBSON:

– I think it should. The same anomaly exists in connexion with primary production as in connexion with shares. A person selling his property at any time since the commencement of this Act would be simply transferring his trading asset into capital. The new definition of “ trading assets “ will apply only to his cows, ewes, and working horses. It will not include his bullocks or wethers. A man who had transferred his cattle or ewes might be mulct in retrospective taxation right back to the year 1915-1916.

Mr Bowden:

– “With the permission of the Committee I desire to withdraw my amendment.

Amendment, by leave, withdrawn.

Mr CUNNINGHAM:
Gwydir

– I move -

That the following paragraph be inserted before paragraph (a) - “ (aa) by inserting in paragraph (a) thereof after the words ‘ live stock ‘ the words ‘ existing at the time of furnishing his income tax returns.’”

That is to provide for cases such as I mentioned to-night. A man who has, say, 1,000 breeding ewes loses 500 of them through drought, such as was experienced for a couple of years preceding last year in the northern district of New SouthWales, and is frequently experienced in other parts of Australia. From the 500 remaining he may get a natural increase of 400, bringing his total to 900. Even then he is 100 short of his original stock, but the present method of assessment allows him nothing for the 500 he has lost; he has to pay on the natural increase of 400 as though the increase were income. In reality, his original capital shows a loss, because his live stock are his capital, and he has 100 less than he started with. I contend that he should not be assessed on that- natural increase as though it were income. Another case has to do with a man owning 1,000 head of breeders. His natural increase may be said to be 600. Drought supervenes; and the lambs may die. He cannot realize upon that lost stock; yet he will be required to pay as though it were income. If those sheep continued to live the breeder would shear wool off their backs; and on such income as he derived from the sale of the wool he would be required to pay income taxation. If he should dispose of that stock the returns would be shown in his schedule as income, and he would pay accordingly. But, I repeat, if that stock dies, he still has to pay upon the natural increase as if it were income. That is grossly unfair, and it entails great hardship upon struggling men in the back country which is periodically visited by drought, fire, and flood. The Government should not levy upon the natural increase until the taxpayer has realized upon it. As sales are made from the produce of the natural increase the person concerned pays upon his income as it is derived. There are many men to-day who are in a most unfortunate position. Almost the whole of their stock have been lost, , what with the drought of two years ago and recent floods, which have wiped out practically all survivors among the natural increase.

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– The point raised by the honorable member is very important. This matter was among those referred to the Taxation

Royal Commission. It is one to which the Commissioners are at present giving particular attention. It is well known that they have presented a report covering a portion of the matters referred to them; but, upon this subject, they have not yet reported. The Commissioner for Taxation says that, in his opinion, the matter is very complicated, notwithstanding that the honorable member for Gwydir (Mr. Cunningham) has expressed the opposite view. I hope the Committee will accept the assurance of the Government that the subject is receiving from the Taxation Royal Commission the most careful investigation; and that the Government, directly the Commission has presented its report-even if it should ignore the matter, or put forward no satisfactory or practical method of relief - will afford Parliament the earliest possible opportunity for the discussion of the problem upon its merits. I cannot accept the amendment, but not because I am not desirous of helping the man on the land. I quite appreciate that there must be very many taxpayers who find themselves in precarious and unenviable positions such as have been described. The Royal Commission has done excellent work, and the Government have taken the earliest opportunity to embody its recommendations, to date, in a Bill which, without further delay, should be a law of the land.

Mr McWILLIAMS:
Franklin

– I look upon the amendment as being of considerable importance so far as stock-owners areconcerned. The incidence of the tax is simply brutal. The specific case has been recently brought under my notice of a man who branded more than 4,000 calves. He lost all in a draught, together with 62 per cent. of their mothers, but he had to pay income tax on the calves that had died. The position is. not complicated,as the Prime Minister alleges. To compel a man to pay income tax upon capital which has gone cannot be justified.

Mr Watt:

– Has the honorable member ever argued the matter with the Commissioner of Taxation ?

Mr McWILLIAMS:

– Yes, very fully, and the arguments advanced by the Commissioner have not been at all convincing. I hope that if the’ Prime Minister cannot see his way clear to accept the amendment, he will afford this House an opportunity next session to fully discuss the whole matter. I shall support the amendment.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– There can be no two opinions concerning the unfairness and injustice of the present system of taxing upon the natural increase, especially in times such as the present, when stock is practically unsaleable. There are men in my . electorate who live by breeding, and who have been required to pay £400 or £500 by way of income tax, although they have not been able to sell a hoof in the past two years. And the situation becomes only the more aggravated as the stock grows older and bigger. One of my constituents offered to forward to the Taxation Commissioner the equivalent of his income tax assessment in kind. The Royal Commission has investigated the whole question. I differ from those honorable members who have said that this matter is not complicated. Primary producers are represented upon the Commission by men who are trying to grapple with the position as fairly and squarely as possible. I do not think good will come of hasty legislation at this stage; it might result in more trouble for primary producers.

Mr Mcwilliams:

– They are willing to take a risk about that.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Perhaps; but before long the final report of the Commission will have been presented. If the Act is now to be amended it should be so obviously improved as to receive the indorsement of the members of the Commission. In South Africa, where a system has been in vogue similar to that which is now suggested, the authorities are desirous of making a change and of adopting the Australian practice. That ir, significant. I would like to receive from the Prime Minister a definite assurance that as soon as Parliament meets again, following npqn the receipt of the full report of the Commission, the decisions of that body will be given effect to by way of’ an amending measure.

Mr HUGHES:
BENDIGO, VICTORIA · NAT

– I shall certainly undertake to promise that.

Mr HUNTER:
Maranoa

.- In Queensland graziers may take advantage of a provision which permits them to leave out stock both at the beginning and at the end of a financial period. This is contained in an old Act. Taxpayers are given their choice as to whether they will come in thereunder - just dealing with purchases and sales - or whether they prefer to act as an ordinary business man does - that is to say, by taking a full stock at the beginning and at the end of the. year. Many graziers are at present working under the provision to which I have just alluded. So far as concerns a man who is purely a breeder, and who sells his income, that provision is very beneficial; but if he deals in any shape or form - buying or selling - he is very hea.vily penalized in some years. I desire to assure honorable members that I know what I am. talking about, as I am a taxation expert. For the past eleven years I have been doing nothing else but working along these lines for graziers and farmers. I have always advised them, wherever possible, to keep clear of this simple matter of purchasing and selling. The whole question is certainly very complicated. Every grazier does not carry on the same class of business. One man may be a dealer pure and simple, another may be a breeder solely ; but if a grazier undertakes the slightest dealing, intermixed with breeding, he will find that the effect of the proposed amendment will be entirely against his best interests.

Amendment agreed to.

Clause, as amended, agreed to.

Mr Hughes:

– There is such an incessant babble of conversation that I am not sure that I understand the position. I was under the impression that the amendment had been negatived. If you, Mr. Chairman, say that it has been carried, the Government cannot proceed further with the Bill.

Mr Watt:

– If a mistake has occurred, let it be remedied by the recommittal of the clause.

The CHAIRMAN:

– Honorable members converse with each other in such loud tones that it is difficult, no doubt, to follow what is taking place; but in the first instance I stated the amendment clearly, and when the discussion finished, I put the question “ That the amendment be agreed to,” and the majority of the voices being in the affirmative, I declared it carried.

Mr Hughes:

– But the mover of the amendment called “No!” and my honorable colleague the Minister for Works and Railways said to him, “ You are quite right, the ‘ Noes ‘ have it.”

The CHAIRMAN:

– I was surprised at the mover of the amendment calling “No!” but his was the only voice I heard against the amendment. My decision not being challenged, I then put the question “ That the clause, as amended, be agreed to,” and the declaration was again in the affirmative. If a mistake has been made, it can be remedied by the recommittal of the clause.

Mr Cunningham:

– Would it not save time to take the vote over again now ? I said “No!” because the Prime Minister said “Aye.” We have been so long at variance that I thought that I must be right in calling the contrary.

The CHAIRMAN:

– It will be better to follow the proper procedure.

Clause 7 -

Section 18 of the principal Act is amended -

by omitting paragraph (a) of subsection (1) thereof, and inserting in its stead the following paragraph : - “ (a) all losses and outgoings (not being in the nature of losses and outgoings of capital) actually incurred in AustraIia. in gaining or producing the assessable income ….

by omitting from paragraph (k) of subsection (1) thereof the word “Twenty-six,” and inserting in its stead the word “Thirty.”

Sectionproposed to be amended -

( 1 )In calculating the taxable income of a taxpayer the total assessable income …. shall he taken as a basis, and from it there shall bc deducted -

all losses and outgoings, not being in the nature of losses arid outgoings of capital ….

the sum of Twcnty-sias pounds in respect of each child ….

Mr WATT:
Balaclava

.- On the second reading I drew the atention of the Minister to a transposition of the words “ actually incurred in Australia,” which seemed to me to adversely affect the carriers of debenture money. As the Minister has had time now to consider the matter, I ask him whether the fears I expressed are likely to be realized, or can he give me the assurance that the effect is not as I anticipated.

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– The question raised by the right honorable member was whether interest on debenture money is an outgoing actually incurred in Australia?

Mr Watt:

– Interest on debenture money raised in England, and used here.

Mr GROOM:

– Yes. The interest paid in Australia will be regarded as an outgoing incurred here.

Mr Watt:

– That is all right.

Mr CHARLTON:
Hunter

.- I move -

That the word “Thirty” be left out with a view to insert in lieu thereof the word “ Sixty.”

I shall not repeat now what I have already said in favour of this proposal beyond remarking that £60 is a small enough allowance for each child maintained by the taxpayer,seeing that living has become so dear, and the purchasing power of the sovereign has fallen.

Mr Watt:

– Can the Minister say what loss of revenue the carrying of the amendment would entail ?

Mr Groom:

– Yes. By increasing the exemption from £26 to £30, as the Government propose, there will be a loss of revenue amounting to £30,000 per annum, and if the exemption were increased to £60 the loss of revenue would be between £300,000 and £400,000.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

.- I would like to support the amendment; but I think that in the present state of our finances we cannot afford the loss of revenue which it would entail, and, therefore, I shall vote against it.

Question - That the word “ Thirty,” proposed to be left out, stand part of the clause - put. The Committee divided.

AYES: 40

NOES: 16

Majority . . 24

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Clause agreed to.

Clause 8 -

Section nineteen of the principal Act is amended -

by inserting in sub-section (2) thereof after the words “ One hundred “ (wherever occurring) the words “and four “ ; and

by omitting from sub-section (2) thereof the word “ Five “ and inserting in its stead the word “ Three.”

Mr CHARLTON:
Hunter

.- I move -

That the following paragraph be inserted before paragraph (a) - “ (aa) That section nineteen (1) of the Income Tax Assessment Act be repealed and the following sub-section inserted in its stead: -

( 1 ) In the case of a person (other than a company, an absentee or a person who is not married and has no dependants) there shall be deducted, in addition to the sum set forth in the last preceding section, the sum of Three hundred pounds.’ “

I submit this amendment with the object of increasing from £156 to £300 the exemption for which section 19 of the principal Act now provides. Times have altogether changed since the original Bill, providing for an exemption of £156 was introduced. It was passed at the beginning of the war. Since then the cost of living has gone up enormously, and the purchasing power of the sovereign has been very materially reduced. Honorable members of the Labour party therefore think that this additional relief should be granted.

Question - That the words proposed to be inserted be so inserted - put. The Committee divided.

AYES: 15

NOES: 37

Majority . . . . 22

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Mr CHARLTON:
Hunter

.- I move -

That the following paragraph he added: - “ (c) That section 19 (2) of the Income Tax Assessment Act be repealed and the following sub-section inserted in its stead: -‘ 19 (2) In the case of a person (not being a company or an absentee) who is not married and has no dependants there shall be deducted, in addition to the sums set forth in the last preceding section, the sum of Two hundred pounds.’ “

This is an amendment I foreshadowed earlier in the day. My object is to make the deduction in the case of a person who is not married and has no dependants £200 instead of £100, and by omitting paragraph b, which seeks to reduce the deduction by £1 for every £3 by which the income exceeds the deduction, I propose to leave the reduction as it stands in the Act at the rate of £1 for every £5 by which the income exceeds the deduction.

Question - That the amendment be agreed to - put. The Committee divided.

AYES: 13

NOES: 35

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clauses 9 to 11 agreed to.

Clause 12 -

The amendments of the principal Act made by paragraph (a), so much of paragraph (b) as includes in the definition of Income” the amount for which trading assets have been sold, paragraph (c) of section two, section three, paragraphs (a), (b), and (c) of section six, and paragraphs (a) and (b) of section seven of this Act, shall be deemed to have come into operation on the date of the commencement of the Income Tax Assessment Act 1915.

The amendments of the, principal Act made by so much of paragraph (b) of section 2 as excludes from the definition of “ Income “ certain rebates received by a member of a cooperative company, section 5, paragraphs (d) and (e) of section 6, paragraph (d) of section 7 and sections8 and 9 of this Act, shall apply to assessments for the financial year beginning on the first day of July, One thousand nine hundred and twenty-one, and all subsequent years.

Amendment (by Mr. Hughes) proposed -

That the words “paragraphs (a), (b), and (c) of section six be left out.

Mr BOWDEN:
Nepean

.- I do not understand Whether the Prime Minister is proposing to omit paragraph c of section 2. I know that in Western Australia a decision in a case against the State Taxation Commissioner has put a certain interpretation on what is to be regarded as the taxable income of trading assets. The State Act is, I believe, similar to the Commonwealth Act. The case to which I refer is Newman v. The Taxation Commissioners, and, if that is the position, I have no objection to the Prime Minister removing the possibility of paragraph c of clause 2 having any retrospective effect.

Amendment agreed to.

Mr CHARLTON:
Hunter

.- I move -

That in sub-clause 2, after the word “company;” the following words be inserted: - “ shall be deemed to have come into operation on the date of the commencement of the Income Tax Assessment Act 1915.”

So far as I know in the case of the Rochdale Co-operative Society, in my district, no rebates have been paid on, and this Bill is to obviate the necessity for doing so. The members of the society were not aware that the payments had to be made; tut the Commissioner, in the course of It is duty, has included the amounts in their assessments. They feel that it is most unfair that they should be taxed twice, seeing that they pay income tax on their earnings. I wish to have this clause made retrospective, so that claims may not be made against the co-operative societies after years have elapsed.

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

.- I understand that the Commissioner is not favorable to the suggestion.

Mr Charlton:

-Surely it is for the Committee to decide..

Mr GROOM:

– Relief is being given in the future.

Mr Charlton:

– This is a burning question, I may tell the honorable gentleman. There was a deputation to the ex-

Treasurer (Sir Joseph Cook), who admitted the merits of the case.

Mr GROOM:

– If this is made retrospective, does the honorable member desire refund?

Mr Charlton:

– No.

Mr GROOM:

– The objection to a retrospective amendment of the kind is that it may necessitate refunds; but if the honorable member refers simply to claims outstanding, I understand that the Commissioner is prepared to meet the wishes of the honorable member.

Mr Charlton:

– Then I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments.

Motion (by Mr. Groom) agreed to -

That the Bill be recommitted for the reconsideration of clause 6.

In Committee (Recommittal) :

Clause 6 (What is included in income) .

Motion (by Mr. Groom) proposed -

That new paragraph (aa) relating to live stock be left out.

Question put. The Committee divided.

AYES: 31

NOES: 14

Majority . . . . 17

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Bill reported with a further amendment.

Standing Orders suspended; reports adopted.

Message recommending appropriation reported.

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Groom) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a Bill for an Act to amend the Income Tax Assessment Act 1915-1918.

Resolution reported and adopted.

Bill read a third time.

page 14165

INCOME TAX ASSESSMENT BILL (No. 2)

Motion (by Mr. Groom, by leave) agreed to -

That leave be given to bring in a Bill for an Act to amend the Income Tax Assessment Act 1918.

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

Second Reading

Mr GROOM:
Minis ter for Works and Railways · Darling Downs · NAT

– I move -

That this Bill he now read a second time.

This is a short Bill for the purpose of amending section 48 of the Income Tax Assessment Act of 1918. In the Income Tax Assessment Act of 1915, exemption as regards income from personal exertion was given to any person “ who is on active service during the present war with the Military or Naval Forces of the Commonwealth, or any part of the King’s Dominions, or of an Ally of Great Britain.” That was intended to apply only to soldiers who were on active service overseas, and not to home service men, and, was so interpreted and applied. In 1918, an amendment of the Act expressly set forth that that Act was to apply to soldiers overseas, and should date as from 1918. An action was brought against the Commonwealth by a soldier who was engaged on home service, and the case of Ramaciotti versus The Federal Commissioner of

Taxation is thus reported in the Commonwealth Law Reports -

Section 13 of the Income Tax Assessment Act 1915-1916 provides that “This Act shall not apply to any person who is on active service during the present war with the Military or Naval Forces of the Commonwealth. so far as regards income derived from personal exertion and earned prior to the commencement of this Act or during the present state of war.”

Held that thewords “ active service “ in that section have the same meaning as they are given by section 4 of the Defence Act 1903-1915, namely, “ service in or with a Force which is engaged in operations against the enemy, and includes any naval or military service in time of war”.

Held therefore that an officer of the Military Forces of the Commonwealth who had been mobilized for duty in 1915, and during the year ending on 30th June, 1917, was District Commandant of the 2nd Military District and Inspector-General of Administration, was on active service during that period, and was entitled to the benefit of section 13 in respect of income tax for that year, although his service was performed within Australia.

The object of this Bill is to make it perfectly clear that the law gives exemption only to the soldiers who did actual service overseas.

Question resolved in the affirmative.

Bill read a second time, and reported without amendment; report adopted.

Standing Orders suspended.

Bill read a third time.

page 14165

NEW BUSINESS

Motion (by Mr. Groom) (by leave) agreed to -

That standing order No. 70 be suspended.

page 14165

APPROPRIATION BILL 1921-22

Bill returned from the Senate with requests.

page 14165

TARIFF BOARD BILL

Bill returned from the Senate with the message that it had agreed to the amendments upon its amendment No. 7, and did not insist upon its amendment No. 1.

page 14165

BILLS FROM THE SENATE

The following Bills were returned from the Senate without amendment or request -

Treaty of Peace (Hungary) Bill.

Loans Redemption and Conversion Bill.

Loan Bill (No. 2).

Invalid and Old-age Pensions Appropriation

Funding Arrangments Bill.

Supplementary Appropriation Bill1919-20.

Supplementary Appropriation (Works and Buildings) Bill 1919-20.

page 14166

CUSTOMS TARIFF (NEW ZEALAND PREFERENCE) BILL

In Committee of Ways and Means:

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I move -

That the duties of Customs which shall be imposed upon any goods which are imported into the Commonwealth from the Dominion of New Zealand, and are the produce or manufacture of that Dominion, and which are specified by the Governor-General by proclamation, shall be the duties respectively specified in the column headed “ British Preferential Tariff “ of the schedule to the Customs Tariff 1921.

Owing to the provisions of the Customs Act, we are obliged to submit to the Tariff Board any proposal for reciprocal Tariff relations between the Commonwealth and other parts of the British Dominions. During the last few weeks we have been conducting negotiations by cable with the New Zealand Government in regard to reciprocal Tariff relations, and we have practically come to an agreement on the basis that New Zealand shall concede to the Commonwealth British preferential rates, and we shall concede to New Zealand British preferential rates. As we shall get from New Zealand a much greater advantage than New Zealand will get from us, the Commonwealth’s trade with the Dominion being about £2.500,000 per annum, and the Dominion’s trade with us amounting to about £7,500,000 per annum, it is eminently desirable that at the first possible opportunity the agreement with New Zealand should be ratified. We propose in the Bill which will follow the resolution of this Committee to take power by proclamation to give New Zealand British preferential rates as soon as the agreement has been ratified. I assure the Committee that untilweare satisfied that New Zealand will extend to us the same treatment as we are extending to it, we shall not issue that proclamation. I feel quite satisfied that the projected arrangement will be entirely advantageous to the Commonwealth, and that we shall run no risk, from a Protectionist point of view, by its ratification.

Mr Fenton:

– New Zealand has brought you to heel.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I regard it as the first fruits of the arrangement we introduced to Parliament to permit of negotiations for reciprocal Tariff arrangements with other parts of tihe world.

Mr Hay:

– Will this proposed arrangement be extended to Fiji and other Dependencies ?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The principle certainly will apply to all other parts of the Empire that care to enter into reciprocal arrangements with us.

Mr Prowse:

– Do the Government wait until they are approached by another Dominion?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– That depends on the circumstances. If reciprocity is likely to be more advantageous to us we take the initiative; if it is likely to be more advantageous to the other country we leave the initiative to it.

Question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

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

Bill presented by Mr. Greene, and passed through all its stages without amendment or debate.

page 14166

CUSTOMS TARIFF BILL

Mr. SPEAKER reported the receipt of the following message from the GovernorGeneral : -

In accordance with section 58 of the Constitution of the Commonwealth of Australia the Governor-General returns to the House of Representatives a proposed law intituled “ An Act relating to Duties of Customs “ which has been presented to him for the King’s Assent, and transmits the following amendments, which he recommends to be made in the said pro- posed law: -

Page 4, clause 12, leave out sub-clause (3).

Page 4, clause 13, leave out sub-clause (2). Page 5, after clause 14, insert the following new clause: - “ 15. This Act shallnot affect the provisions of the Customs Tariff (South African Preference) 1906 (No. 17 of 1906), the Tariff proposals proposed in the House of Representatives on the following dates, namely: - 3rd December, 1914 - (Relating to the Tariff on goods imported from, and the produce or manufacture of, the Union of South Africa) ; and 25th September, 1918 - (Relating to the Tariff on goods imported from, and the produce or manufacture of, the Union of South Africa), and the duties imposed by that Act and those proposals shall continue to he collected in accordance with that Act and those proposals:

Provided thatno higher duty shall he payable under that Act or those proposals on any goods than the duty under the general Tariff in this Act:

Provided further that no duty shall he payable under that Act or those proposals on any goods which under the general Tariff in this Act are free of or exempt from duty.”.

The Schedule, Tariff itemsNos. 136 (f), 137 (b), 147, 152 (a), 16S (b) (1), 194 (d), 197 (b), 278 (a) (1), 278 (b) (1), 279, 324 (a), 388, and 430, leave out “1st January, 1922” (wherever occurring), insert “31st March, 1922”.

The Schedule, TariffItemNo. 278 (a) (2), leave out “ 1st October, 1922”, insert “ 31st March, 1922.”

In Committee (Consideration of GovernorGeneral’s message) :

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The reasons for the message of His Excellency the Governor-General may he set out thus : There are quite a number of deferred duties which are to come into force automatically on the 1st January, 1922. The Customs Tariff Bill provides a means whereby those duties may be further deferred. It requires that the Tariff Board shall report, and that the Minister shall act as he thinks fit upon the report of that Board. In all probability, it will be impossible for the Tariff Board to be constituted and to inquire into all these various matters before the beginning of the new year. What the Government propose to do in this connexion is to further defer those deferred duties to the 31st March, in order to permit the Board to be constituted and be in a position to present its reports to the Minister, so that the latter may take action when the 31st day of March has been reached. That is the net effect of the message in regard particularly to a large number of items indicated therein.

The remaining portion of the message relates to the South African Tariff. Negotiations are being conductedwith the Government of South Africa concerning a reciprocal Tariff, and I believe that they will be carried to a successful conclusion.

Mr Jackson:

– What is the position with regard to Canada?

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– We have not got that far yet.

Mr Blakeley:

– Three months ago Canada intimated that she was waiting upon us.

Mr GREENE:
RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– The Government ask Parliament to place them in a position where they may be able to doso to carry these negotiations to a successful conclusion. I move -

That the amendments recommended by the Governor-General be agreed to.

Question resolved in the affirmative.

Resolution reported and adopted.

page 14167

IRON AND STEEL BOUNTY BILL

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

(By leave) - I move -

That leave be given to bring in a Bill for an Act to amend the Iron and Steel Bounty Act 1918.

The object of this amending measure is as follows: - Some time ago Parliament passed a Bill to grant a bounty on the manufacture of black sheets and galvanizediron sheets. The measure provided that the amount of the bounty should be conditioned by the rates of freight as between Great Britain and Australia; and it further laid down that the authority to determine what those rates of freight were, at the particular time when the bounty was payable, should be the Board of Trade, in England. That Board has informed the Commonwealth Government, by cablegram within the past few days, that it has no official information and declines to give an official opinion concerning what the rates of freight are. Consequently, the Government have had to fall back on another authority. In this short measure the intention is to, give to the Minister for Trade and Customs power to declare what the rate of freight is, for the purposes of the Iron and Steel Bounty Act. The point will be determined probably upon the basis of what the manager of the Commonwealth Line of Steamers declares to be the rate of freight for the class of goods concerned as between England and Australia.

Question resolved in the affirmative.

Bill presented by Mr. Greene, and passed through all its stages without amendment or debate.

Sitting suspended from 12.29 to 1 a.m. (Friday).

page 14168

INCOME TAX BILL (No. 2)

In Committee of Ways and Means:

Motion (by Mr. Groom) agreed to -

That a tax be imposed on income derived from sources in Australia at the following amounts and rates, namely: -

-Rate of Tax upon Income Derived from Personal Exertion.

For so much of the whole taxable income as does not exceed £7,600, the average rate of tax per pound sterling shall be Threepence and three eight-hundredths of One penny where the taxable income is One pound sterling, and shall increase uniformly with each increase of One pound sterling of the taxable income by three eight-hundredths of One penny.

The average rate of tax per pound sterling for so much of the taxable income as does not exceed £7,600 may he calculated from the following formula: -

For every pound sterling of taxable income in excess of £7,600 the rate of tax shall be Sixty pence.

In addition to the tax payable under the preceding provisions, there shall be payable, in the case of incomes in respect of which the tax is calculated under the foregoing provisions, an additional tax equal to twenty-five per centum of the amount of the tax so calculated.

E.-Super Tax.

Inaddition to any tax (including additional tax, if any) payable under the preceding provisions, there shall be payable a super tax equal to thirty per centum of the total amount of the tax so payable.

In addition to any tax (including additional tax and super tax, if any) payable under the preceding provisions, there shall he payable an additional super tax equal to five per centum of the total amount of the tax so payable.

G.- Tax Payable in respect of a Cash Prize in a Lottery.

There shall be payable in respect of a cash prize in a lottery won after the commencement of the Act passed to give effect to this resolution, income tax to the amount of fourteen per centum of the gross prize money.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Groom and Mr. Laird Smith do prepare and bring in a Bill to carry out the foregoing resolution.

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

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– I move -

That this Billbe now read a second time.

The Bill is the same as that passed last year, except that the section providing for the taxation of single persons and widowers without dependants who are in receipt of an income in excess of £100 is omitted. This will mean a loss of revenue of about £65,000.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– What is the reason for it?

Mr GROOM:

– To give, relief to a class of persons hitherto taxed.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 14169

REPATRIATION LOAN BILL

Message recommending appropriation reported.

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Rodgers) agreed to -

That it is expedient that an appropriation of moneys be made for the purposes of a Bill for an Act to authorize the raising and expending of the sum of £10,000,000 for repatriation of soldiers.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

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

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

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

– I move -

That this Bill be now read a second time.

Parliament has already passed legislation for the raising of money to carry out repatriation and similar services until the 30th June next; but it is almost certain that the fund now available will have reached a very low ebb, if it has not been entirely depleted, by that time, and it is desirable that authority shall be obtained for the putting in hand of the preparations necessary for the floating of a further loan of £10,000,000, so that advantage may be taken of a favorable opportunity to borrow. It is not’ proposed to use any of this money during the present financial year, nor, indeed, to float a loan during the present year; but it takes two months to prepare the organization and machinery needed for the floating of a loan, and it is desirable that the Treasurer shall be able to select the most favorable opportunity for floating it.

Mr Wienholt:

– Here, or at Homer?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– That will be for the Treasurer to decide.

Mr CHARLTON:
Hunter

– I realize that the money borrowed last year is likely to have run out before we meet again, and that there must be authority for the raising of more money, because we must keep our promises to the soldiers. At the same time I remember that Sir Joseph Cook told us, when . he asked for authority for the raising of the last loan, that that loan would be really the last. I hope by the time this money is spent that circumstances will be so changed that we shall be able to finance our obligations to the soldiers without going on the market to borrow, because there must come an end to borrowing. I hope, too,that there will not be as much waste of money in the future as in the past. I take it that part of the money it is proposed to borrow will be spent on War Service homes.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The money is needed for land settlement and War Service homes.

Mr CHARLTON:

– I hope that the Minister will see that it is used to the best advantage, and that none of it is squandered.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Like the honorable member for Hunter (Mr. Charlton), I remember Sir Joseph Cook saying that the last loan raised for repatriation purposes would be the last. In my opinion, the time has come when we should provide money for repatriation by savings out of revenue, instead of borrowing it. We must, of course, fulfil our obligations to the soldiers. That a certain number of them have been assisted does not relieve us of our obligation to the rest; but a discrimination has already been made between the earlier applicants for assistance and those who are now asking for land settlement. There is a great difference between £1,000, the amount formerly promised, and £625, which is now being offered. Money has been voted for repatriation in a most liberal spirit, and Parliament looks to the Government and to the Minister for Repatriation to see that it is not wasted. During the next few months the Minister will have an opportunity of showing whether he has profited by the lessons of the past. If he does not so profit, condign punishment awaits him. Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 14170

RETURNED SOLDIERS WOOLLEN COMPANY LOAN BILL

Message recommending appropriation reported.

In Committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Rodgers) . agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a Bill for an Act to authorize the making of a loan to the Geelong U.S. and S. Woollen and Worsted Co-operative Manufacturing Company Limited.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

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

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

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

– In moving -

That this Bill be now read a second time,

I would point out that it is designed to enable a truly co-operative enterprise to commence operations. The capital of the company is £100,000, divided into 5,000 shares of £20 each, and is payable in war gratuities or cash, or both. The membership of the company is confined to holders of war gratuity bonds. In the main, the shareholders will be soldiers, but the privilege also extends to the next of kin of deceased soldiers who are holders of bonds. The advances for which this Bill provides could not be made in the ordinary way under section 48 of the Australian Soldiers Repatriation Act, because it does not apply to a co-operative enterprise of this description. That section was framed for the purpose of enabling assistance to be given to soldiers who, with their own capital and their own labour, engage in an enterprise, and devote the’ whole of their time to it. In the caseof a co-operative company of this kind, it would be impossible for all the shareholders, who number more than 1,400, to personally engage in the industry.

The enterprise has been launched in Geelong, where the woollen industry flourishes. It is under skilful management. Its directors, with one exception, are soldiers; and there is nothing of a wild-cat nature about it. It has been started by skilful business men ; it has hardheaded and shrewd directors, and is supported by many whose names will be lastingly associated with the success of the woollen industry in the city I have named. Honorable members may rest assured that, in making these advances, we shall not lose sight of the principle which has been laid down by the Parliament that genuine and practical encouragement shall be given to soldiers to invest their war gratuity bonds in enterprises carried on for their own benefit. The Bill provides for the requisite security being given. The necessary safeguards will be found in the measure, and honorable members may rest assured that the Cabinet has carefully examined the company’s articles of association, and has found that in all respects they conform to the requirements of the Bill.

Mr BELL:
Darwin

.- I have no objection to this Bill; but I should like to ask the Minister (Mr. Rodgers) whether section 48 of the Australian Soldiers Repatriation Act, to which he has referred, has been availed of, and whether under it any money has been advanced to returned soldiers.

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

– During the short period that I had the personal administration of the Act, one advance was made under it. The honorable member for Flinders (Mr. Bruce) brought under my notice a genuine case where nine men who had a thorough knowledge of the timber industry had combined their capital, and had secured rights in respect of certain timber areas. They were desirous of obtaining an advance, and, finding that they thoroughly understood the whole business, we made them an advance, with the result that their industry to-day is nourishing.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

The CHAIRMAN (Hon J M Chanter:

– Is it thepleasure of the Committee that the Bill be considered as a whole?

Honorable Members. - Hear, hear!

Mr Fenton:

– Are the Government going to have a representative on the board of directors of this co-operative company?

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

. - We are not going to have a representative on the board, but our interests are thoroughly safeguarded under clause 6, which provides that -

  1. 1 ) It shall be a condition of any loan made under this Act that the Treasurer may, if he thinks fit, from time to time require the observance by the company of such directions in the management of the business of the company as the Treasurer thinks necessary.
  2. Upon the failure of the company to comply with any directions required to he observed in pursuance of this section, the Treasurer may enter into possession of all the assets of the company, and work, manage, or dispose of those assets as he thinks fit.

Bill agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 14171

LEAVE OF ABSENCE

Motion (by Mr. Groom) agreed to -

That leave of absence for one month be given to the honorable member for Fremantle (Mr. Burchell) on the ground of urgent private business.

page 14171

AUSTRALIAN SOLDIERS REPATRIATION BILL (No. 3)

Motion (by Mr. Rodgers) agreed to -

That leave be given to bring in a Bill for or Act to amend section 23 of the Australian Soldiers Repatriation Act 1920.

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

Second Reading

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

– I move -

That this Bill be now read a second time.

Notwithstanding the liberal provisions of the principal Act many cases of very great hardship and distress which do not come within its scope have been brought under the notice of the Government. Those are cases where the death or incapacity of a member of the Forces has arisen from what are popularly known as pre-existing disabilities. This amendment of the principal Act is not lightly proposed, because the experience of other countries and former wars has shown that a pension scheme having once been framed it is most dangerous to interfere with it. The Government have been moved to take this action only because of the distressing condition of men who served in the recent war and for whom, at the present time, no adequate provision is made. It has endeavoured so to safeguard this extension of the principal Act as to insure that those who by their own wilful act, or by remissness or carelessness, have contributed to their incapacity and are not entitled to a pension, shall not have public money ladled out to them. I think honorable members will appreciate the object which the Government have in view in submitting the measure. Under it pensions will be payable to men whose incapacity has arisen from a latent disease or constitutional defect which did not manifest itself before they went abroad. Even in such cases a pension will not be granted unless the soldier served in camp in Australia for at least six months or embarked for active service with the Forces overseas. Some of the most painful cases which have come under the notice of the Commission and of honorable members generally are those of men who are suffering from tuberculosis. Even after the most careful medical examination it is difficult to determine whether the disease was pre-existent or arose from war service or exposure while the men were in training in camp in Australia, undergoing preparation overseas, or actually serving at the Front. Of all wars that through which we have recently passed has been the most productive of this dire disease, owing to the prevalence of poisonous gas fumes on the battlefield. Even after the most careful examination medical officers, in many instances, have found it most difficult to determine whether the disease was latent in the individual at the time of enlistment or was the result of war service.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– Why not give the men the benefit of the doubt in such cases ?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– This Bill is intended to remedy the position in that respect. It will involve a very considerable expenditure, but the Government have determined that no consideration of pounds, shillings, and pence should come between this country and its duty to the men whose health has broken down as a result of war service. At the same time we have provided the safeguards necessary to prevent a pension being paid in any undeser ving case.

Mr CHARLTON:
Hunter

. Ithink that all honorable members are pleased that the Government have introduced this Bill. For a considerable time past we have been asldng for such a measure, because we realized how necessary it was that something should be done to place our soldiers who have become incapacitated, permanently or partially, in a much better position than that in which they find themselves under the provisions of the Australian Soldiers Repatriation Act in its present form. The pensions of many partially-incapacitated soldiers have been cancelled because they are deemed not to be suffering in consequence of warlike operations. I want to know whether their cases can be reviewed under this Bill.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Yes, where it has application to them.

Mr CHARLTON:

– I want to know, further, whether the Board referred to in the Bill is tobe a special Board to deal with these cases.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– No, it is the Board already provided for in the Act.

Mr CHARLTON:

– That is to say, the Board that is already dealing with war pensions ?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Yes, under the machinery provided by the Act; but it has not had the benefit of the provisions set out in this Bill.

Mr CHARLTON:

– I am chary about giving further power to administer pensions to the Board which is already in existence.

Mr Hector Lamond:

– Especially if it is ohe of the State Boards.

Mr CHARLTON:

– Yes, if it is a State Board, I do not see in the Bill any hope for returned soldiers. They have been given no consideration whatever by the State Board in New South Wales.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– This measure is to be a direction to the Board to grant pensions, which, under the terms of the Act, it cannot now give.

Mr CHARLTON:

– I would rather see the administration of war pensions placed in the hands of the Department which is administering invalid and old-age pensions, because that is the only place where the soldiers can get justice. I can have no faith in the people who have been administering war pensions during the last fourteen months. They have done nothing but cancel pensions. I havebeen asked to address a public meeting at Abermain in connexion with the case of a returned soldier who is now in” a mental asylum as the result of the cancellation of his pension on the ground that the disability for which he was drawing the pension was not the result of warlike operations. I mention this case so that the Minister may make a note of it. Other honorable members representing New South Wales constituencies will agree with me that they have not received that satisfaction and sympathetic treatment that they are entitled to receive. How many cases have they brought up in this Chamber t These cases have been sent by the Minister to the Board concerned for reconsideration, and in every case the Board has returned them, simply indorsing its former decision.

Mr Lister:

– Yes; it is the same Board eachtime.

Mr CHARLTON:

– That is so. This Bill now proposes that these State Boards shall still continue to act in the same way. There is not the slightest chance of getting any satisfaction from them. If we submit a case to the Minister he is sympathetic, and says that he will look into it, and send it on to the Board for report; but the Board simply sends it back again to him, as I have already said, indorsing its previous decision. The position is not satisfactory to honorable members, nor to the soldiers, and I think it would be well for the Minister to devise some other means by which war pensions can be dealt with.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– This Bill is a good many months overdue. In fact, I think it is three years overdue, and although the hour is very late, it behoves us to see that it is the best means of carrying into effect the ideas and sentiments expressed on the floor of this Chamber for so many months past. “We may possibly find that it does not carry into effect these ideas, and I fear that if the administration of the measure is left in the hands of those who have been handling war pensions so far, the desire of honorable members that liberal treatment should be bestowed upon our maimed soldiers, who are in many cases in dire need, will not be carried into effect. I cordially support the proposition put forward, on the score of economy and efficiency, and also, I may add, of intelligence, that the administration and investigation of war pensions should be in the hands of the Department which has had considerable experience in dealing with invalid and old-age pensions, and has proved itself to be quite capable of handlingthe subject. There are qualifying conditions in the Bill which may defeat the object we desire. For instance, it provides -

Notwithstanding that the origin of the cause of the death or incapacity of a member of the Forces, who, after enlistment with those Forces, served in camp in Australia for at least six months, or embarked for active service with those Forces overseas, existed prior to his enlistment……

This provision does not cover a case I have in mind, that of a soldier who went into camp, and contracted cerebro-spinal meningitis within three or four weeks. He would not have contracted that disease if he had not been put into camp. At any rate, he is now suffering from post-meningitic symptoms, which cause him to have fits, and prevent him from earning a proper livelihood. Although he applied with numerous medical certificates, which I have in my possession now, to have his pension increased, and he was ordered to report in order that the Board might see whether his application should be granted, he suddenly found that the pension he was already drawing was stopped by reason of the fact that the Act did notcover his case. I am afraid that the Bill will not cover his case either.

Mr Groom:

– I think it will be covered by section 23. Would the honorable member give the name of the soldier?

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– The case has been forwarded to the Minister. The applicant has been endeavouring for eight months to have his pension reinstated.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The Act as it stands is quite wide enough to cover the case.

Mr Groom:

– The law is there, but the question is whether the facts can be established.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– I dot not want this man to be cut out by the provisions of this Bill. It is useless to say that the Act already covers his case, when he has been deprived of a pension because of limitations imposed by it.

Mr Charlton:

– It is not what the Act provides; it is what the Board decides.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– In Committee, I shall ask to have the words “ substantially contributed “ modified.

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– I have listened carefully to the honorable member for Hunter (Mr. Charlton) and the honorable member for Cowper (Dr. Earle Page). I cannot help feeling that there is a good deal of truth in what they say. I mentioned the other night that, literally, thousands of soldiers had complained tome, and that while quite a number of their claims had been adjusted, there were some with good cause for complaint, for whom no remedy could be found It was because of that, and as a result of the statement I made here the other night, that this Bill has been introduced. The criticism of the measure amounts to this: Very little objection is taken to the Bill itself, which is admittedly a step in the right direction, but it is claimed that the Board is unsympathetic.

Mr Charlton:

– That is so.

Mr HUGHES:

– The answer is that the Board is limited by the terms of the principal Act, and cannot afford to allow its sympathies to have full play. The Bill will enable it to look at cases from quite another angle.

Mr Charlton:

– Is the Prime Minister aware that the Board has cancelled pensions which were given for incapacity due to war-like operations?

Mr HUGHES:

– The Board has felt itself constrained by reason of the wording of the Act for which this Parliament is responsible, to confine pensions to cases in which it has been clearly established the injuries have arisen as a direct result of the war. However, I ask honorable members to give the Bill a trial. It is impossible in the limited time at our disposal to make the far-reaching amendments which honorable members propose. Let us have an opportunity of seeing whether this amendment will enable the Board to carry out its duties, and grant relief to these special cases. If it does not do so, we can substitute another Board when the House meets again. I think that I have shown pretty clearly where my sympathies lie. I am sure there are many soldiers who will say I am the last one to bother about red tape. At the same time, I must say that the Act seems perfectly clear, and that, in the face of the specific directions given to it by the law already in force, the Medical Board has had little or no option. Now we are giving it a direction of quite another kind. If the Board does not interpret the directions in the spirit intended, and in the face of these declarations by the Assistant Minister for Repatriation (Mr. Rodgers) and myself, then-

Mr Charlton:

– If the word “ substantially “ is allowedto remain in paragraph a of Clause 2 it will be interpreted against the soldiers.

Mr HUGHES:

– If the Board does that, in the face of what I am saying now, it will not be there very long !

Mr MARKS:
Wentworth

– I congratulate the Government on the introduction of this Bill so quickly, because I think it will cover what is breaking the hearts of many ‘ ‘ diggers “ throughout Australia to-day. I desire, however, to cross a lance with Senator Millen, the Minister for Repatriation, in reference to one case that I have had before him for weeks, and which was brought under my notice by the Hon. W. P. Latimer, M.L.C., of Sydney. Several communications have passed from me to him in the last ten days, and I cannot even get an acknowledgment. . The case is one of the gravest that ever came before me. It is that of one, George Rodgers, who lives in my electorate, and who received a gun-shot wound in the face at Gallipoli. That man has been refused a pension on the ground that the wound in his face, which blinded him, is not really a war injury. According to the Repatriation Department the doctor who examined ‘ him says that he is suffering from tertiary symptoms of syphilis. The reply of George Rodgers is that the doctor mentioned has never seen him or examined him. One doctor, who has examined him, says that there is not a sign of syphilis in his blood. Rodgers to-day is lying in a hospital in Sydney, and is in a very bad way indeed. Amongst the documents I sent in to Senator Millen was a copy of Pictorial London, containing a picture of a soldier with bandaged face leaving, I think, Buckingham Palace, and over the picture in big black letters are the words, ‘ ‘ What our soldiers have done for us.” That man was Rodgers, but on his behalf I can get no satisfaction from the Department. No doubt this Bill will do good, and before he “ passes out,” for he is very sick, it is to be hoped he will receive a pension. I am just “ fed up “ with the treatment I have received from Senator Millen in connexion with this case.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clause 1 agreed to.

Clause 2 -

Section twenty-three of the Australian Soldiers’ Repatriation Act 1920 is amended by adding at the end thereof the following subsection: - “ (2.) Notwithstanding that the origin of the cause of the death or incapacity of a member of the Forces, who, after enlistment with those Forces, served in camp in Australia for at least six months or embarked for active service with those Forces overseas, existed prior to his enlistment, where, in the opinion of a Board -

the conditions of his war service substantially contributed to the death or incapacity of the member; and

neither the death or incapacity, nor the origin of the cause of the death or incapacity, was due to the default or wilful act of the member, the Commonwealth shall, subject to this Act, be liable to pay to the member or his dependants, or both, as the case may be, pensions in accordance with this Act:

Provided that no pension shall be payable under this sub-section except in pursuance of a claim made within six months after the commencement of this sub-section.”

Mr CHARLTON:
Hunter

– I had intended tomove an amendment-, but I shall refrain, providing the Government will adopt the suggestion I have made, and delete the word “ substantially “ from paragraph a. If that word is allowed to remain I am sure it will be’ construed against the men.

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– It is extremely difficult to say whether a thing contributes to bring about a certain result; and when the Courts are called upon to deal with cases of contributory negligence they are confronted with a position that is very hard to resolve. It may be said that taking a cup of tea may contribute to a person’s death, or that the abrupt entrance into a chamber set apart for ladies in a certain state may bring about a most unfortunate result. The question of whether there is homicide, and, if so, whether it be justifiable homicide, are questions that afford opportunities to lawyers of earning an honest living. But I do not feel that I should he justified altogether in deleting this word “ substantially,” and leaving the word “ contributed.”

Mr Charlton:

– In the first draft of the Bill the word substantially “ was not used.

Mr HUGHES:

– I am rather astonished that honorable members cannot accept my assurance that if the Board does not interpret this Bill in a proper spirit, we shall have to amend the Act by substituting some other Board.

Mr Charlton:

– Let the administration be given to the Invalid and Old-age Pensions Board, and I shall be prepared to let the clause stand.

Mr HUGHES:

– I should like to know what the honorable member for Cowper (Dr. Page) has tol say, in view of my statement.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– If the administration were to be on the lines of the Invalid and Old-age

Pensions Board, I should be prepared to allow the word “ substantially “ to remain.

Mr Hughes:

– I assure the honorable member that if this Board does not administer this Bill in the spirit that this House thinks it should, well, we shall get another Board.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– In regard to the medical side, I venture to say that no medical man would say that war service had contributed except it had contributed very substantially to the diseased condition. Underthe circumstances, I think that, with the medical officers the Department has at its disposal, the Government will be adequately protected if the word be deleted.

Mr BELL:
Darwin

.- I should very much like to see the word “ substantially “ deleted for the reasons that have been adduced by the honorable member for Cowper (Dr. Earle Page), and also for the reason that I know how the Act has been administered by the Board in the past. We know how exacting the Board is, and when any protest is made, the members of the Board say that they have to. administer the Act as they find it; and they do so strictly.

Mr Hughes:

– The members of the Board are soldiers.

Mr BELL:

– I do not care whether they are soldiers or not; we are legislators, and responsible for the measures we pass. I should like to mention a case I referred to before of a man at Deloraine, Tasmania, who enlisted and went into camp, where, after about two months, he contracted disease. He was, in consequence, in hospital for six months, and was given a pension, which he drew for two years. Seven months ago, however, that pension was cut off, because the medical Board, or whatever Board it was, decided that his injury was not due to military service. This man is very ill to-day, and much more in need of a pension, than he was previously. He cannot do a day’s work, and he has a wife and family. Senator J. D. Millen, the honorable member for Wilmot (Mr. Atkinson), and myself have been pleading with the Commissioner for months on behalf of this man. He has produced letters and other evidence to show that he never suffered from disease of any description, or was under a medical man prior to going to camp; but the Department is adamant. In view of administration of this kind, I regret that I cannot be satisfied with the Prime

Minister’s promise. I have been relying on this amending Bill to afford relief to this particular man, whose case is only one of many. If we wait until Parliament meets again after recess, to see how this Bill operates, this man in all probability will be dead. We have waited years for this Bill, and it would be hard to have to wait for a remedy until Parliament meets again, when the matter could be arranged by striking out the word “ substantially.” If this man served for only one month, and, as a result, he became incapacitated, he ought fo have a pension; and nothing, less will satisfy me.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– A man gets a pension under the Act for anything but preexisting disability.

Mr BELL:

– This man is anxious to have an opportunity to state his case, and is prepared to submit evidence; but he cannot get the opportunity. His illness was due to service in camp, but the authorities will not hear him on the case. Owing to the lack of sympathy, and through the exacting manner in which the Act has been administered, I repeat that I cannot be satisfied with the Prime Minister’s assurance, sympathetic though I know him to be. Something is wrong in the administration, and it is for us to find out what.

Mr CUNNINGHAM:
Gwydir

– I shall move that the word “ substantially,” in paragraph a, be left out. Everybody with, experience of the Board knows that it sticks within the four corners of the Act, and that it will take no notice of any promise made by the Prime Minister (Mr. Hughes), or of any discussion in Parliament^ When the men enlisted and went to the war they were told that a Board would interpret such an Act as this in the strictest possible manner.

Mr Hughes:

– This Board was appointed as a result of representations by the soldiers, who insisted that it should be composed of soldiers.

Mr Charlton:

– And they are now very sorry !

Mr CUNNINGHAM:

– The public outside are entitled to some consideration, and at least one civilian should have been on the Board. Unfortunately every Act of Parliament proves in practice to be different from what was intended by the Legislature. It will really be to the political advantage of the Opposition if this Board continues, because the longer it remains in existence the greater the number of votes that will be recorded against the Government at the next election. But we are actuated to move as we ar6 doing by the severity of the rulings which have been given against the soldiers by the Board. It is most obstinate in its decisions, the reasons for some of which the Lord Himself could not explain. I know of men who have been practically hunted out of the presence of the Board for daring to apply for a pension. Some of them have been men with whom I ha.ve worked, and I know that they never drank and that the Prime Minister’s reference to certain diseases could have no application to them. Their cases are entirely deserving, and yet over and over again they have been refused a pension. I would like to see the Board abolished and the administration pf the pensions handed over to the Old-age and Invalids Pension Branch. We would then get sympathetic administration of the Act, which we do not get from the returned soldiers on the Board. Unfortunately, in many cases, when a returned soldier is placed in an official position, the first thing he does is to apply theboot to his mates.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– That is not true.

Mr CUNNINGHAM:

– I am justified in making that statement in view of the complaints that are made from all parts of- the Commonwealth and the statements that, emanate from even the soldier members on the Government . side of the House. The time of Parliament has been occupied repeatedly with discussions regarding the inconsiderate treatment meted out to returned soldiers by this Board, which takes advantage of every possible loophole in the Act and the medical reports in order to evade the payment of pensions. The Government can.not, shirk their responsibility by saying that the Board is to blame, because they can supplant the Board at twenty-four hours’ notice.

Mr Considine:

– Parliament can dc the same to the Government, so we cannot shirk our responsibility.

Mr CUNNINGHAM:

– Of course, the individual members of Parliament must shoulder their responsibilities, and we shall do so when we go before the electors. If the Government allow the present conditions to continue it will be the duty of the people to see that the promises made to our soldiers when they enlisted are carried out. Those promises are not being honoured when advantage is taken of every loophole to prevent a man getting a pension. I know of some men who were navvies before the war. They were gassed at the Front, and although outwardly they seem all right, they go to pieces when they tackle heavy work. The Board says that they are one-tenth incapacitated, and that they can find light employment. They cannot get such employment. They are told to look for clerical work, but they have not the education requisite for that work. In fact, the avenues in which they can be employed are limited. If a man’s occupation when he enlisted was that of a general labourer, and after his war service he is incapable of resuming that occupation, his disability should be liberally provided for.

Mr Hughes:

– Should such a man get as much as one who lost a leg or an arm ?

Mr CUNNINGHAM:

– In some cases he should get more. A clerk who loses his left arm is not incapacitated to the same extent as a labourer who has diseased lungs through being gassed. A principle of British justice is that 100 guilty men should go free rather than that one innocent man should be punished; but that principle is being reversed, and 100 de- serving men are refused a pension because one man is a malingerer. I hope that the Committee will agree to the amendment I now move, so that the Board, which I hope will not long continue in existence, may be deprived of one of the barriers behind which it now shelters.

Mr Bell:

– I have a prior amendment.

Amendment, by leave, withdrawn.

Amendment (by Mr. Bell) proposed -

That the words “ for at least six months “ in proposed sub-section 2 be struck out.

Question - That the words proposed to be omitted stand part of the clause - put. The Committee divided.

AYES: 25

NOES: 20

Majority … … 5

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Amendment (by Mr. Cunningham) proposed -

That the word “ substantially “, in paragraph (a), be left out.

Mr.PROWSE (Swan) [2.16 a.m.].If the Board administers, the Act unsympathetically it should be removed; but why should Parliament pass a foolish Act? Cannot a better word be substituted than “substantially”? If the clause is to be altered at all, I suggest that the paragraph be made to read -

The conditions of his war service can reasonably be shown to have contributed to the death or incapacity of the member.

If the Act is sympathetically administered the word ‘ ‘ substantially “ is not too strong. A contribution in the form indicated in the paragraph can be the smallest possible fraction.

Mr LAVELLE:
Calare

– I hope the amendment of the honorable member for Gwydir (Mr. Cunningham) willbe agreed to. it is becoming more and. more apparent that, so far as the Government are concerned, there is being witnessed a repetition of that which has happened in respect of every Government of every country in the world following every war that has ever been fought, with which Governments have had to do. While this country was involved in the war every conceivable promise and inducement was held out to men to go away and fight. Now, however, the Government are doing all they cancontrive to evade their responsibilities. It cannot be said that this Act is being sympathetically administered, or is giving satisfaction to returned soldiers. Every chance of cutting down pensions is being availed of. If the word “substantially” is left in the proposed new sub-section under consideration it will be practically impossible for a large number of former soldiers, who are unquestionably entitled to pensions, to obtain any measure of assistance or relief.

Mr RODGERS:
Assistant Minister for Repatriation · WANNON, VICTORIA · LP; NAT from 1917

– The Government are anxious to comply with the wishes of Parliament, especially those expressed by former soldier representatives. But to omit the word “ substantially” would leave widely open the question concerning whether a man’s war service had in any way contributed to his death or incapacity. If the word is deleted there will be given to the Board, which is called upon to determine very difficult matters, no form of direction whatever. The Government are now bringing within the scope of the pensions legislation a completely new class of former soldiers; and while there are general complaints that the Board is not sympathetically administering the Act, I am bound to point out that it has had no direction from Parliament concerning how it should proceed. I say that in fairness to men who have had a very serious and extremely heavy task to perform in respect of almost a million beneficiaries. To date nearly £24,000,000 has been distributed. That task has imposed upon the Board far more difficult obligations than honorable members realize. There is an obligation, first, to the soldier and, secondly, to the country, which has to find the money, to show that the expenditure is justifiable. If honorable members can agree to substitute something more properly applicable than the word ‘ ‘ substantially “ the Government will be prepared to accept it. What is required is a word, or a phrase, which will indicate the degree to which a man’s war service has contributed to his disability.

Mr Marks:

– What about the word “materially “?

Mr Charlton:

– Where is the difference ?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– The Government will be prepared to accept that word in lien, of “substantially”; but to leave out the latter and replace it with nothing would mean that the Board is given no direction. The probable effect would be to leave the intended participant completely at the discretion of the Board. The Government desire to do away with the position which has been created, namely, that the Board, while being blamed all over the country, has really had no direction from the Parliament or the Government in respect of the granting of pensions. The Government have now taken responsibility - as I have just mentioned - for including within the ambit of the Act, a large new body of participants; and if this question is left open many of those who had enlisted in good faith, but whose condition of health did not enable them to participate in the war, may actually be found ‘to be more materially benefiting now than those who served at the front and lost limbs. The Prime Minister has pointed out that if the intentions of the Government, with respect to the administration of the Act, are not carried out sympathetically internal changes will take place respecting the personnel of the Board.

Mr CHARLTON:
Hunter

– It would appear that the Government are prepared to accept any word rather than agree to leave out “ substantially.” What is the difference between that and the word suggested by the honorable member for Wentworth (Mr. Marks) ?

Mr Blakeley:

– Tweedledum and Tweedledee.

Mr CHARLTON:

– Honorable members who have interested themselves in these hard cases have become tired of making what appears to be hopelessly unsuccessful appeals. The Minister (Mr. Rodgers) has just referred to a very large sum which has been distributed in the form of war pensions. He has mentioned also the fact of the Board having been appointed at a time when the call upon Government funds for the payment of pensions was at its height. It occurs to me that the Board was obviously given instructions to cut down expenditure in this direction.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– That is not a fair statement, and I deny it absolutely.

Mr CHARLTON:

– The fact remains that, from the moment when the change took place, dozens and dozens of former soldiers, who had been in receipt of pensions, found themselves cut off from relief.

Mr Atkinson:

– That was due largely to the inauguration of a system for the review of pensions.

Mr CHARLTON:

– Let me suggest that there are 100 men who have returned from the war. The doctors who examined them soon after they had reached Australia, certified to their incapacity, whereupon they were given pensions. These men were unable to do any work, even six months later. The pensions were reviewed, and the doctors who had originally examined them again overhauled the incapacitated men, and they continued to draw their pensions. At the end of twelve months, however, a Board was appointed, and immediately pensions were cancelled right and left. The Government now desire that the word “ materially “ shall be inserted in lieu of “ substantially.” I say frankly that I have no faith in this Board. I feel confident that our men will not get justice from it, and I know that the outcome will be that members of Parliament will continue to be constantly appealed to. The Assistant Minister will say, as he has said all along, “ Give me specific cases and I will undertake to have inquiries made.” The Minister has been given all the particulars of many a case, and, of course, he has sent them on to those very officials who have already dealt with the cases. Naturally, their replies indorse their own attitude. There are, perhaps, twenty or thirty returned men in my own district who can do no work, or, at best, can only take light employment. There is no hope of their return to their one-time highly remunerative work of coal getting. Some are required to support a wife and several children. Their pensions have been cut off.

Mr Hughes:

– The honorable member is not willing to take the suggestion oi anybody else, but wants his own way.

Mr CHARLTON:

– It is not fair to say that.

Mr Hughes:

– I have had hundreds of cases brought under my notice, and I have done my very best.

Mr CHARLTON:

– I can quite believe that. I certainly find no fault with what. the Prime Minister has done or has sought to do. But here is a word, in a proposed addition to the Act, which, if it remains, will permit the Board to carry on as it has done in the past. I urge that it be left out.

Dr EARLE PAGE:
COWPER, NEW SOUTH WALES · FSU; CP from 1920

– It is necessary to have some qualification of the word “ contributed,” and I suggest, and am prepared to move when the opportunity occurs, that the words, “ in a material degree “ be substituted for the word “ substantially.”

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– That would be acceptable.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I do not know why the Minister objects to the omission of the word “ substantially.” If war service has contributed to a soldier’s incapacity he should be eligible for a pension.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– Every soldier, other than the men to whom this Bill relates, who is eligible for a pension has been dealt with, and we say, in respect of the men covered by the Bill, most of whom would not have been in action, that .it must be proved that their war service substantially contributed to their condition.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Applications will be referred to the Board, and it will be for it to say to what extent war services have contributed to the applicants’ condition. I have a case in which a man complains of the smallness of his pension. The Board cut it down to the minimum, and said that only one-sixth of his incapacity was due to war services. If the Board can make such a nice calculation as that, it does not matter whether we have a qualification or not. The, Board has proved itself unsympathetic enough, in all conscience, and, judged by past experience of it, will not grant a pension unless war services have substantially contributed to the condition of the applicant. The Board will deal with each application for a pension as if the word “ substantially “ were in the clause.

Mr Hughes:

– You must have some word to qualify the word “ contributed,” because otherwise, whatever the circumstances, the claim .that the war had contributed to an applicant’s condition would have to b’e accepted. A man might be knocked down by a tram and might argue that if it had not been for the war he would have got out of its way, or, if he were intoxicated at the time “of the accident, he might argue that had it not been for the war he would not have been drunk.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– Personally, I do not see the need for any qualification. If war services have not contributed to a man’s condition he should not get a pension, but if they have contributed to it he is entitled to one.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– We are now giving a specific direction to the Board, and the result will be much more liberal treatment. (

Mr HUGHES:
Prime Minister and Attorney-General · Bendigo · NAT

– The overwhelming bulk of the men who went to the war have been repatriated or pensioned, and there is no complaint to be urged on their behalf, though there will always be hard cases on some border line. Under the law as it stands, when a< man applies for a pension on the ground of incapacity, the Board says to him, “Has your incapacity resulted from any occurrence while you were a member of .#the Australian Imperial Force, or from your employment in connexion with naval or military preparations or operations?” There is no difficulty where the applicant has lost a limb, or an eye, or has been wounded, but where the complaint is a break-down in health, the case is often a difficult one to deal with. Should ill-health be established, the question is, Did the conditions of the applicant’s war service contribute to it? Under the Bill a period spent in a camp will be counted as war service. In any camping, rheumatics, or some such trouble, may be picked up. Then men may have been knocked down, or have fallen from horses. Without the word “ substantial,” the war will have to be regarded as having contributed to a man’s condition, though it might be only to the smallest extent possible. It is impossible to say how I became deaf, whether it was because I got wet on one particular day or on some other day; but were I among those covered by the Bill, I could claim that my war service had contributed to my condition, and it would be impossible to gainsay me. The doctor would be compelled to give me the benefit of the doubt, and put me on a fund from which has been expended already £23,000,000. In addition, the Government has spent £89,000,000 om returned men in various ways, and has given pensions to 222,000 persons ; -so that it cannot be said that our soldiers have been treated illiberally. As a private member I have done what I could for the soldiers, and I will continue to do everything I can to help them. The qualifying words suggested by the honorable member for Cowper (Dr. Earle Page) are acceptable to the Government, and surely the honorable member, who is a doctor and was a soldier, can speak with some degree of authority in this matter. If at the end of six months the measure is not working satisfactorily, and some persons are shut out from its benefits who ought not to be excluded, I shall have it amended, or, if necessary, put another Board in place of the existing Board.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I would direct the special attention of the Prime Minister (Mr. Hughes) to the wording of section 23 of the principal Act, which provides for the payment of a pension to a member of the Forces whose incapacity - results or has resulted from any occurrence happening during the period he was a member of the Forces.

In my opinion, that provision is less restrictive in its character than is the clause we are now discussing, and under which it is provided that a pension shall be payable to a soldier where, in the opinion of the Board, the conditions of his war service “substantially” contributed to his incapacity.

Mr Hector Lamond:

– The use of- the words “ any occurrence “ in section 23 of the principal Act has given rise to much difficulty.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– We all know how difficult it has been for returned men to secure a pension because of the wording of that provision, but I think the difficulty will be still greater under the clause we are now discussing.

Mr Charlton:

– The men will not be a bit better off.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– That is my view. There has been great difficulty in inducing the Board to take a humane view of the provision in the principal Act, and we are not going to obtain from it any greater degree off satisfaction ‘ as the result of the passing of this clause.

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– But this clause deals with a totally different class of cases.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I do not appreciate the Minister’s point. It applies to men who have been seeking a pension under the principal Act, and unless the word “ substantially “ he struck out it will afford them no relief. My experience of the Board satisfies me that it will make use of the word “ substantially” whenever it can do so to defeat an application for a pension.

Mr Marks:

– We have the Prime Minister’s promise that if this provision proves unsatisfactory he will bring in a further amending Bill.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– The Prime Minister has for years been making promises to our soldiers, but the trouble is that he has not the settlement of these pension claims, and that the Board, which deals with them, takes no notice of his promises.

Mr Higgs:

– The Prime Minister has agreed to accept the suggestion of the Leader of the Country party, that the words “ contributed in a material degree “ be substituted for the word “ substantially “.

Mr PARKER MOLONEY:
HUME, NEW SOUTH WALES · ALP

– I do not think that would be an improvement. There are a great many men who, because of the attitude taken up by the Board, are suffering an injustice, and it is our duty to see that justice is done them. In my opinion, the Board has done enough to justify its abolition, and if honorable members were to vote in accordance with their experience of it, it would be immediately abolished. This is neither more nor less than camouflage. The Government have promised to give these men relief ; let us see that they get it. If we do not strike out the word “ substantially,” any number of men will still be denied the pension to which they are properly entitled. They ought to be able to get justice without having to call in the help of a member of Parliament. I hope that the Committee will agree to the amendment.

Mr HECTOR LAMOND:
Illawarra

– Are we to understand that the Prime Minister (Mr. Hughes) is willing to accept the suggestion made by the Leader of the Country party (Dr. Earle Page), that the words “ contributed in a material degree “ be substituted for the word “ substantially “ ?

Mr RODGERS:
WANNON, VICTORIA · LP; NAT from 1917

– That is so.

Mr HECTOR LAMOND:

– Then I have nothing more to say.

Amendment agreed to.

Amendment (by Dr. Earle Page) proposed-

That after “contributed”, in paragraph (al. the words “to any material degree” be inserted.

Question put. The Committee divided.

AYES: 35

NOES: 12

Majority .. ..23

AYES

NOES

Question so resolved in the affirmative.

Amendment agreed to.

Clause, as amended, agreed to.

Title agreed to.

Bill reported with amendments.

Standing Orders suspended and report adopted.

Bill read a third time.

page 14182

HIGH COURT PROCEDURE BILL

In Committee (Consideration resumed from 12th October, 1920, vide page 5522) :

Clause 2 (Duration).

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– Honorable members will perhaps remember that last year we passed the Judiciary Bill, dealing with the jurisdiction of the High Court in connexion with indictable offences under the law of the Commonwealth. The Bill now before the Committee provides the necessary machinery to enable the High Court to exercise that jurisdiction. During the war this jurisdiction was exercised under the Judiciary Act and the High Court Procedure Act 1915, but the provisions of the measures were limited to the period of the war and six months afterwards.

Clause agreed to.

Clause 3 (Juries in civil cases).

Mr CUNNINGHAM:
Gwydir

– I would like to hear the opinion of honorable members upon the method of selecting juries for civil cases heard before the High Court. It is provided in the original Act that the State laws and rules applying to the selection of juries shall apply to the selection of juries for the High Court, but this has resulted in grave dissatisfaction and complications. For instance, the qualification and the method of compiling the jury lists in Victoria are entirely different from those in New. South Wales. In a democratic country such as we claim to be, it is not fit tin j* that the juries for the High Court should be drawn from what I may term the privileged classes of the community. The result of this practice is that the juries aTe not representative of the people of the country, and are in many cases biased against the men of the political faith of those who sit on this side of the House. The Labour party claim that in a democratic country any man who is a reputable citizen should he eligible for any position.

Mr Bowden:

– There are not many men very eager to serve on juries.

Mr CUNNINGHAM:

– It is not a question of whether men are eager to serve; a man serves because it is demanded of him as a duty to be performed in the interests of his country. It is curious to reflect that a man, while eligible to become a member of this Parliament, and make laws, may not serve on a jury in the High Court in Victoria or New South Wales. .Such a fact is a disgrace to the community. I do not speak as a legal man, but I can say that the question has been discussed for a considerable time by the Labour party, who have been watching for an opportunity to obtain an expression of opinion from this Chamber. There is a great principle involved. Men eligible to sit in Parliament are not eligible to sit on a jury, because of the reactionary legislation by “diehard” Legislative Councils, particularly in Victoria and New South Wales.

Mr Jowett:

– Where do you find any thing about this in the Bill?

Mr CUNNINGHAM:

– I am complaining that the Bill does not deal with the matter, and I intend to move an amendment to insure that it shall. In Brisbane the High Court juries are selected on quite a different qualification from that in Victoria or New South Wales, and are drawn from a different class. In Victoria there is a £3,000 property qualification. I may say that the late Mr. Ryan was fully seised of the importance of this question, and strongly urged that, when a Bill of the character of that before us was called on, we should take steps to move in the direction I have indicated. Honorable members will admit that in Australia, and, perhaps, in the British Empire, there was no sounder lawyer than Mr. Ryan, and, moreover, he’ was a great Democrat. His appeal in certain litigation is sub judice, and therefore cannot be discussed; but when it has been disposed of, and opportunity offers, there may be some revelations in this Parliament in regard to the jurymen and the attitude they adopted. As a fact, we are convinced that no Labour man has a chance of justice before the High Court in Victoria, because of the way in which the juries are constituted. Apart from that, the principle adopted in the two main States is wrong, and it is that principle we are fighting, and which Mr. Ryan fought. “He used to point out how a man is eligible to elect another man into Parliament, and to enter Parliament himself, and make laws, but, owing to the legislation of the reactionary laws in some of the States, he is not qualified to sit on aHigh Court jury.Such a man may, in a Supreme Court, try a man for his life, or, at the Quarter Sessions, decide a case which may mean imprisonment for years, but he is not eligible to sit on a jury of the High Court. It is, I submit, the duty of this Parliament to register its opinion on a question so important, and it should be possible for us to so legislate that the jury lists are prepared without any regard whatever to a property qualification. I move -

That the following, words bo added to the clause: - “and the jury list for all High Court cases shall be compiled from persons qualified to vote for a representative to the Commonwealth Parliament.”

I think that amendment fairly covers the ground. It is undemocratic to say that because a man has not £3,000 worth of property he is not fit to sit on a jury. The very fact that a man is worth £3,000 worth of property may only prove that he is narrow-minded, ungenerous, and not humanitarian. There are many people who owe their wealth to the fact that all through their lives they have thought only of themselves, because, as a rule, the good-hearted man does not possess £3,000. I believe that the great majority of the members of this Parliament, if they were to leave Parliament, would not be eligible to sit on a jury of the High Court in Victoria, although they may have enacted the very laws which the Courts are administering. I hope that the Minister (Mr. Groom) will agree to this amendment, which has been too long delayed, and make whatever other alterations in the law are necessary to carry it into effect, so that future juries may be drawn from the great democratic section of the community.

Mr GROOM:
Minister for Works and Railways · Darling Downs · NAT

– I cannot accept the amendment of the honorable member for Gwydir (Mr. Cunningham). It runs counter to the whole principle on which the judicial system has been built up. The idea has been to provide, as far as possible, that the practices and procedure of the various States where the High Court sits shall apply. The honorable member is asking us to override the laws of every State in Australia, and to introduce a new qualification, which will mean setting up entirely new machinery all over Australia. If ever there was duplication of machinery, and the creation of costs and difficulties, it is found in the proposal that the honorable member has submitted.

Question - That the words proposed to be added be so added - put. The Committee divided.

AYES: 9

NOES: 30

Majority . . . . 21

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clauses 4 and 5 agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Standing Orders suspended, and Bill read a third time.

page 14183

SUPPLEMENTARY APPROPRIATION BILL 1920-21

Bill returned from theSenate without request.

page 14184

TRADING WITH THE ENEMY BILL

Bill received from the Senate, and on 6,0tion (by Mr. Grebne) read a first time.

Standing Orders suspended.

Second Reading

Mr GREENE:
Minister for Trade and Customs · RICHMOND, NEW SOUTH WALES · LP; NAT from 1917

– I move -

That this Bill be now read a second time.

The purpose of this measure is to effect two technical alterations in the Trading with the Enemy Act. It enables certain legal proceedings arising out of the windingup of enemy companies to be completed. The necessity for this measure has recently become apparent as the result of the decision of the High Court upon an application made by the controller of the Australian Metal Company. The question raised in the application related to the settlement out of the assets of that company of certain claims by Australian companies and the Sydney Municipal Council. The Court dismissed the application on the ground, amongst others, of the absence of procedure applicable to the winding up of the Australian Metal Company under the Trading with the Enemy Act 1914-15. This Bill makes specific provision for the making of applications to the Court by persons claiming to be creditors of an enemy company that has been ordered to be wound up, and authorizes the High Court or a justice of that Court to hear evidence and determine the question. Under the existing law, only the Minister can move the Court, and if the action be against the Minister he has to move the Court against himself. This amendment will enable other parties than the Minister to apply to the High Court. The other amendment in the Bill enables proceedings to be taken, notwithstanding that the time limit fixed in the Statute of Limitations had! expired, by excluding from such time the period of the war.

Mr CUNNINGHAM:
Gwydir

– Honorable members, particularly those of us who have always ‘ contended that, the war being over, we should not continue to sing a “Hymn of Hate” against our late enemies, will welcome this Bill. It is another example of the charming inconsistency of the Government, who, during the war and subsequently, reiterated from every platform throughout Australia that they would never again trade with our late enemies. The Prime Minister (Mr. Hughes) said that he would resign from the Government if any attempt were made to resume trading with Germany. I remind him of this fact when at last he has apparently been converted to our way of thinking.

Mr Wise:

– This Bill has nothing to do with the matter to which the honorable member is referring.

Mr CUNNINGHAM:

– It has everything to do with it. We are now about to resume trading relationships with our late enemies, the Germans, who, prior to the world war, were our friends, and some of whom were relatives of the great dignitaries of the Empire. Of course, in those days, war between Germany and Great Britain was never thought of. In my opinion, the Government are acting inconsistently when, whilst prepared to trade with Germans in Germany and to purchase their goods, the result of long hours of work and low rates of pay, and produced in competition with Australian workmen, they, at the same time, are expropriating Germans in our own territories. Make no mistake, the Germans will recapture the markets of Australia with their cheap products, to the detriment of our own people, and we are driving Germans out of British territory to Germany, where they will work in competition with our artisans. I particularly refer to the German nationals that we are expropriating from the former German Possessions in the Pacific. _ We 3hall trade with those people when they have returned to Germany, and buy their goods which are produced in competition with our own people.

Mr Hughes:

– This Bill has no more to do with what the honorable member is speaking of than it has to do with Noah in the Ark.

Mr CUNNINGHAM:

– Is the Prime Minister sure that Noah ever came out of the Ark? I appeal to the Government to do a fair thing by men, whether the product of their labour comes from Rabaul or Germany.

Mr Hector Lamond:

– I ask your ruling, Mr. Deputy Speaker, as to whether the matter which the honorable member ia discussingis relevant to the question before the Chair.

Mr DEPUTY SPEAKER (Hon J M Chanter:
RIVERINA, NEW SOUTH WALES

– I have given the Bill as much consideration as is possible within the short time at my disposal, and I rule that the honorable member, will not be in order in discussing on this Bill the whole subject of trading with our late enemies.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 14185

PATENTS BILL

Bill received from the Senate, and (on motion by Mr. Groom) read a first time.

Standing Orders suspended.

Second Reading

Mr GROOM:
Minister forWorks and Railways · Darling Downs · NAT

– I move -

That this Bill bs now read a second time.

Its main object is to bring the patents law of the Commonwealth into line with English law, so far as regards the duration of the original term of a patent and the extension of the term. At the present time the term of a patent is limited to fourteen years from its date. The Bill proposes to increase the original term to sixteen years. At the same time, provision will be made to reduce the period for which the term of a patent may be extended to five years, or, in exceptional cases, ten years, instead of seven and fourteen years respectively. Thus a patentee in ordinary cases will be eligible to have the full benefit of his patent for twenty-one years, as at present. The reduction of two years in the period of extension in exceptional cases is proposed for the reason that the period of ten years is considered quite sufficient in view particularly of the number of petitions made for extension. The number of petitions made for extension since the commencement of the 1903 Act is seven. The original term of existing patents will be extended to sixteen years, subject to the condition that any licences granted by the patentees will be extended for a like period. As regards the extension of the term of a patent, under the existing law the Court, in considering its decision, is required to have regard to the nature and merits of the invention in relation to the public, and to the profits made by the patentee as such, and to all the circumstances of the case. During the war,however, some patentees were, on account of the existence of hostilities, prevented from successfully exploiting their inventions, and consequently suffered loss or damage. The Bill makes special provision for those cases, and proposes to enable a patentee who has so suffered loss or damage, including loss of opportunity of dealing in or developing his invention owing to his having been engaged in work of national importance connected with the hostilities, to make application to a Judge in chambers for an extension of the term of his patent. In such a case it will only be necessary for the patentee to satisfy the Court that the loss or damage suffered by him warrants an extension. This privilege, however, is not proposed tol be granted to patentees who are subjects of a country with which Great Britain was at war, or which are companies carried on for the benefit of such subjects. Under the existing Act a petition for extension of the term of a patent must he made art least six months before the original term lapses, and there is no provision for the extension of the time for presenting the petition. The Bill proposes to give power to the Court to extend the time whether the proceedings are by petition or originating summons. In connexion with rights of priority of patentees under international arrangements, the Bill proposes to extend the protection, at present afforded to the patentee only, to the legal representative or assignee of tho patentee,

Provision is also included to validate the Patents, Trade Marks, and Designs Regulations 1920 (Statutory Rules 1920, No. 61), which relate to the revival of patents and the like, which lapsed during the war, and to extend the Act to New Guinea.

Question resolved in the affirmative.

Bill read a second time.

In Committee:

Clauses 1 to 5 agreed to.

Clause 6-

The Patents, Trade Marks, and Designs Regulations 1920, being Statutory Rules 1920, No. 61, shall he deemed to be as valid and effectual as if they were enacted in this Act.

Mr HECTOR LAMOND:
Illawarra

– I wish to know whether the provisions of this clause will prevent the printing, over a design or trade mark, of. another design. Oases have come under my notice in which manufacturers in the Commonwealth have placed upon their goods a name or design to indicate their grade and quality. These goods are placed on the wholesale market. Sometimes a retailer who purchases them places over the original design or trade mark his own trade name or some other design which obliterates the registered design by which the goods are known. I understand that there is no provision under the laws of the Commonwealth which constitutes this practice an offence. If the regulations mentioned in this clause cover the situation, well and good; but if not, I desire to move an amendment which will effect that purpose.

Mr Hughes:

– I think the matter is one which should bc dealt with under the Trade Marks Act. In any case, I shall undertake to have inquiries made; and, if there is no existing provision calculated to discourage this improper practice, I will introduce the necessary measure at our next sittings.

Clause agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Bill read a third time.

page 14186

SUPPLEMENTARY APPROPRIATION BILL (WORKS AND BUILDINGS) 1920-21

Bill returned from the Senate without amendment.

page 14186

SPECIAL ADJOURNMENT

Motion (by Mr. Hughes) agreed to -

That the House, at its rising, adjourn until 12 noon to-day.

House adjourned at 3.54 a.m. (Friday).

Cite as: Australia, House of Representatives, Debates, 8 December 1921, viewed 22 October 2017, <http://historichansard.net/hofreps/1921/19211208_reps_8_98/>.