9th Parliament · 2nd Session
Mr. Speaker (Rt. Hon. W. A. Watt) took the chair at 11 a.m., and read prayers.
– Is the Prime Minister yet in a position to make a statement in regard to the Geneva Conference?
– Not at this moment, but I hope to do so during this sitting.
Co-operative Estates Limited, Hobart.
Mr. FENTON broughtup the report of the Public Accounts Committee upon certain transactions between the Cooperative Estates Limited, of Hobart, and the War Service Homes Commission.
Ordered to be printed.
-I have received the following urgent telegram: -
View with grave concern Government’s introduction of measure to validate assessment of profits on realization of leases. Tills association strongly protests against any retro-‘ spective legislation being introduced, particularly legislation to validate a matter which has already been declared unlawful by the’ courts.
– All honorable members have received the same telegram.
– Will the Treasurer give the House an explanation in regard to the subject-matter of the protest?
– The Leasee Tax Bill will be considered by the House today, and the honorable member will have a full opportunity to obtain the information he desires.
Proportion of British Manufacture
– Yesterday I asked some questions of the Treasurer regarding communications between the Commonwealth and other dominions in relation to the proposal to alter the basis upon which preference is given to imports from Great Britain. The reply of the Minister for Trade and Customs referred only to New Zealand. Am I to infer that no communications on that subject have passed between the Commonwealth and other dominions?
– That is so.
-I rise to make a personal explanation regarding a report in the Argus, of some remarks I made yesterday when discussing the Canadian preference motion. After referring to dried fruits I am reported as having said -
For pater, too, Australia would find it best to stick to Britain.
– Is that for all kinds of paper?
– Yes. American and Canadian paper mills had fleeced Australian merchants during the war, a fact which had led to an arrangement between Australia and Britain.
I do not question the accuracy of the report, but it creates a wrong impression. In answering the interjection of the honorable member for Fawkner I referred only towhite paper, such as news-print and cream-laid paper. Other classes of paper have been manufactured in- Victoria and New South “Wales for many years, and I was not referring to them. Australia does produce some white papers also, thanks to the favorable arrangement by which British manufacturers Bend paper pulp to this country.
– Has the Minister for Defence seen the paragraph in one of the morning newspapers regarding the dis satisfaction amongst Australians at the Flinders Naval Base because of the manner in which they are being treated by the authorities? Will the Minister continue to deny that there is dissatisfaction amongst those men?
– I have not seen theparagraph to which the honorable member refers, bat so far as I can ascertain there is no dissatisfaction at the Flinders Naval Base because of the treatment of members of the Royal Australian Navy.
asked the Minister for Trade and Customs, upon notice - ‘
What restrictions now exist with respect to the importation of dyes manufactured in and/or imported from the following countries: -
Are there any, and what, restrictions upon the importation of American dyes which do not apply to other dyes?
– The answers to the honorable member’s questions are - 1. (a) There are no restrictions upon the importation of dyes manufactured in Great Britain, nor on any dyes of foreign manufacture imported from Great Britain, provided such dyes are permitted to be imported into Great Britain for use by manufacturers in Grunt Britain. (b), (c), and(d). Dyes manufactured in and imported from Germany, Switzerland, or theUnited States of America are prohibited importation except with the consent of the Minister for Trade and Customs. Permits to import these dyes are granted only in instances where it can be shown that effective substitutes of British origin are not available.
.- I move-
That the House, at its rising, adjourn until 3 o’clock p.m. on Monday next.
If we meet on Monday, honorable members should have ample time for the discussion of the measures with which the Government proposes to ask the House to deal this session, and be able to complete the business by Friday next. I think it would meet the convenience of honorable members to meet on Monday, rather than to continue the session into the following week, as may be necessary if we do not have an additional day of sitting. The business which the Government proposes to proceed with during this session is the Superannuation Bill, the Lessee Tax Bill, the Senate’s amendments in the Dairy Produce Export Control Bill and the Dried Fruits Export Control Bill, the Meat Industry Encouragement Bill, theImmigration Bill, and the Public Service Bill, which already appear upon the notice-paper, and also a measure to give effect to the proposed guarantee in regard to dried fruits, and two supplementary Estimates. If honorable members will study that programme, they will realize that an additional sitting day will give ample time for the adequate consideration and completion of all the business by this day week.
– I know that some honorable members from other states have been in Melbourne for many months attending to their parliamentary duties, and have not been able to visit their constituencies.
– Some of us have been in Melbourne continuously for five months.
– I have no desire to be churlish or selfish, but, having regard to the programme that the Prime Minister has set before us for completion next week, I think it likely that we shall have to sit not only five days, but also five nights. The Public Service Bill is very controversial, and three sittings at least will be required for its proper consideration.
– All the more need to meet on Monday.
– I realize that the day will come when this Parliament will meet away from Victoria, and that may induce some of us to change our opinions regarding the duration of parliamentary sessions. Some honorable members may consider that the present session has been too protracted, but many measures have been carried by physically exhausting the honorable members opposed to them, and the House has sat at hours which were a positive disgrace to a deliberative assembly of supposedly sensible men.
– There have been fewer all-night sittings during this session than in any other.
– I admit that in times of crisis, when certain measures must be considered expeditiously, in the public interests protracted sittings are necessary, but no such necessity arose during this session. All-night sittings waste, rather than save, time, and we have been engaged during this session in correcting mistakes in the legislation hastily passed in other sessions.
– What is the use of wasting time now? Let us get on with the work.
– I have every sympathy with honorable members from the other states; but, although I reside in Victoria, I am not able to return to my home very much more frequently than do honorable members from New South Wales and South Australia. Protracted sessions are just as inconvenient to the honorable member for Wimmera (Mr. Stewart), as they are to honorable members from other states, with the possible exception of Western Australia. I make my individual protest against measures being passed through this Parliament at the cost of the physical and mental exhaustion of honorable members. If next week should produce another orgy of legislation in the early hours of the morning, one more disgraceful page will be added to the history of this Parliament.
Mr.G ABB (Angas) [11.14]. - I protest against the Ministry making up its mind at this late hour that the House shall meet on Monday. Surely the Prime Minister could have given honorable members a week’s notice of this proposal. I have made other arrangements for the weekend, and I shall be prevented from participating in the discussion of the Public Service Bill, which is of great importance to my constituents.
.- The Government should show consideration to other honorable members than its own supporters. I am able to visit my constituency only once a week.
– What about those of us who have not been able to return to our constituencies once in five months?
– I have made arrangements to return to New South Wales this week-end, because the Eight Hours Day demonstration is to be held in Sydney on Monday next. It is the most important annual function in New South Wales. I do not wish to be absent from this chamber when important measures are being discussed, and I ask the Prime Minister to withdraw the motion. The Public Service Bill is the only important measure to be dealt with, and there is no reason why the House should not adjourn by Friday next without sitting on Monday. The Public Service Bill is a very important measure. The last amending bill was supposed to right the wrongs and ills of the Public Service. It was hasty legislation, and has consequently done great harm.
– It is not in order to reflect upon the decisions of Parliament.
– I quite understand that, but there axe times when one cannot help it. I urge the Prime Minister to withdraw the motion.
.- The proposal of the Prime Minister (Mr. Bruce), although not suiting my personal convenience, accords with my sense of public duty, and because of that I must support the motion. The right honorable gentleman has mentioned the bills that are to be dealt with during the remainder of the session, but, he says, one or two other measures will probably be introduced. . The number of bills on the notice-paper is 22; that number was there six weeks ago. The notice-paper is like the widow’s cruse of oil, inexhaustible; the more we do, the more there remains to be done. I suggest to the Prime Minister that no bills should be introduced beyond those he has mentioned, and I appeal to honorable members supporting the Government not to indulge in long discussions, but to allow the House to proceed with its business with expedition. The session has been Jong, and the Government has endeavoured by a process of attrition to wear down the Opposition. Just prior to the Leader of the Opposition (Mr. Charlton) leaving for England, we were threatened with desertion by the honorable member tor Angas (Mr. Gabb), when the bill for the construction of cruisers was before the House. Mr. Charlton was reluctant to leave, but I assured him that as Acting Leader of the Opposition I should perform my public duties in this House, even if I were the only one left to represent the Opposition, which, some one said, would be pretty certain to happen. The honorable member for Maribyrnong (Mr. Fenton) has said that measures had beer passed in this chamber while honorable members were in a* state of mental and physical exhaustion, but I myself think that no process adopted by the Government could bring the honorable members of this side to such a state. I certainly think that the House should meet on Monday in order to get through its business by Friday. Parliament should adjourn each night- at 10.30 to prevent interference with our slumbers, and to enable us to attend the chamber next day refreshed, and having had time to consider the business to be set before us. Apparently, however, even if the House sits on Monday, there is every possibility of the Government deciding to sit the following Monday, and this may continue indefinitely.
Question resolved in the affirmative.
The following papers were presented : -
Audit Act- Finance 1923-24- The Treasurer’s Statement of Receipts and Expenditure during the year ended ‘30th June, 1924, accompanied by the Report of the AuditorGeneral.
Ordered to be printed.
Central Australia - Report of Committee of Representatives of the Commonwealth and of South Australia, on the nature of the country between Kingoonya (South Australia) and Alice Springs (Northern Territory).
Lands Acquisition Act - Land acquired at Iron Knob, South Australia - For Postal purposes
Railways Act - By-law No. 30.
Motion (by Dr. EARLE Page) proposed -
That he have leave to bring in a bill for an act relating to certain assessments of war-time profits.
.- I wish to know how many bills in addition to those mentioned by the Prime Minister are to be introduced ? I certainly object to the introduction of further legislation.
.- When I was dealing with the previous motion I indicated that the Government was bringing down a guarantee bill and two sets of supplementary estimates, in addition to certain measures on the notice-paper. Of course there are also bills to be returned from the Senate. I know of no other measures that the Government contemplates introducing. The bill to which this motion relates has been indicated on very many occasions. I do not want to mislead the Acting Leader of the Opposition, but the Government will introduce further legislation if it is found necessary to do so. Still, so far as I know at present, no measures will be introduced other than those I have indicated.
Question resolved in the affirmative.
Bill presented, and read a first time.
In committee (Consideration of Go vernor-General’s Deputy’s message) :
– I move -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Superannuation Act 1922.
I shall explain the bill on the second reading.
– Will it be possible to amend the bill?
– The appropriation cannot be increased.
– This is the only stage at which amendments can be made, and objection taken to the bill.
– What is the appropriation ?
– It is only the appropriation that cannot be amended. I have with me a list of the appropriations to be made from year to year. The appropriation for the year 1924-25 will be £600, for the next year £1,800, for the following year £3,300, for the fourth year £4,700, for the fifth year £6,000, for the sixth year £8,800, and so on until for the 40th year it will be £42,000. I point out to honorable members that it will be possible to move at the committee stage any amendment relevant to the bill, but it will not be possible to increase the appropriation.
Question resolved in the affirmative.
Resolution reported .
Standing Orders suspended; resolution adopted.
That Dr. Earle Page and Mr. Bruce do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Dr. Earle Page and read a first time.
– I move -
That the bill be now read a second time.
I should like to recall to the minds of honorable members the reasons for the introduction of this bill. When the original Superannuation Bill was being discussed in the last Parliament, the promise was made that special consideration would be given to the cases of warrant and noncommissioned officers and men of the Military Forces, and officers of the Naval Forces, who were excluded from the benefits of the Act, because they were engaged for short periods, although those periods have been continuous. It was promised that the actuarial investigations necessary to include these men in the scheme would be made, and that when they were complete the Government would bring down a bill to provide superannuation benefits for them. Some delay has occurred owing to the necessity for very extensive investigations, many of which had to be carried out by individual actuaries. The investigations are now complete, and copies of the actuarial report have been circulated for the information of honorable members. Opportunity is also taken in the bill to carry out the promise, which was made at the request of all parties in the House, to remove some of the anomalies of the original act. There is no need to labour the argument about the reasonableness of putting our Defence Force officers in as good a position in their declining years as the remainder of the Public Service. The other suggested amendments will, upon examination, be found to be as reasonable as the proposal relating to those officers. It is largely a committee bill, and to enable honorable members to view it in proper perspective, I shall first deal with the provisions for removing anomalies in the Public Service generally. The first notable amendment is in clause 4, which alters the definition of the word “ service.” The definition is extended to include service as a military staff clerk, and the permanent state service of employees transferred from the service of a state to the service of the Commonwealth. Military staff clerks, who are members of the Permanent Defence Forces, have been attached to the Public Service, and are under the administration of the Public Service Board. For the purpose of the Public Service Act their services in the Defence Department are recognized, but for the purpose of the Superannuation Act their military services prior to the Defence (Civil Employment) Act of 1918, other than service under appointment to commissioned rank, could not be recognized as permanent service, because their engagements were for limited fixed periods. The limitation of the term “service” to service for the Commonwealth has been found to inflict hardship, particularly on that deserving class of men, the lighthouse keepers. As that branch of the Public Service was taken over from the states as late as 1915, those men have not had sufficient Commonwealth service to entitle them to the benefits enjoyed by other members of the Public Service. Many of them have long periods of state service, and the Government considers that the claim to recognize state service, where it is permanent and continuous with Commonwealth service, is just and reasonable. The bill enables state service to be regarded as Commonwealth service. Unfortunately, there are one or two cases that will have tobe dealt with separately, because no form of words can be devised to cover them. Onecase in the service of this House will have to be specially provided for on the Estimates. The extension of the definition of the word “ service “ will also have another effect. Under section 38 of the act, a widow of an employee who had been in the Service for at least ten years, and had died on or after the 31st December, 1920, and before the 5th January, 1923, when contributions commenced, was entitled to a free pension of two units. The widows of lighthouse keepers who died during that period could not, however, receive the benefits provided in the section, because the period of Commonwealth service did not total ten years. The recognition of state service will give to the widows of these men the benefit to which they are fairly entitled. The actuaries have reported that the extension of the definition as proposed will not necessitate a variation of the estimate of cost submitted by them in 1922, as they took into account all members of the Commonwealth Service without regard to whence they came. Another important amendment is contained in clause 6, which amends sub-section 5 of section 13 of the principal act. Under that section an employee who was, at the commencement of the act, not less than 30 years of age, had the privilege of electing, within three months of the date of the commencement of contributions, to contribute at the rate applicable to age 30, for two, two and a half, three, or four units. Unfortunately, there are hundreds of Commonwealth servants in remote parts of this country who apparently did not receive the information necessary to enable them to make the election within the prescribed period. In some cases employees have alleged that they made their requests in writing, but no evidence of that can be found in the department. All the employees were thus forced to contribute for two units at the rate for their age. In all cases in which it is evident that they had no opportunity to make the election within the prescribed time, it is proposed to give them the privilege of contributing at the rate for age 30, without any election, for not more than two units. If they are contributing for less than four units, and desire to increase the number to not more than four, they will be allowed to contribute for the additional units at the rate for age 30. so that they will be placed on the same footing as other members of the Service. There are some members of the Service who wilfully omitted to make the election, and for them no provision is made. The proposed amendment also has an important bearing on the contribution of military staff clerks over the age of 30 years. Those employees whose military service has not hitherto been recognized as Commonwealth public service have been compelled for that reason to take one of two courses. They could take four units of pension at the rate for age 30, in which case they were precluded from taking further units at rate for age. Alternatively they could take the number of units that their salary permitted at rate for age. We are now placing them in the same position as other members of the Service, and are allowing them to pay for four units at the rate for age 30, and additional units at rate for age. The amendment will rectify an anomaly that has existed since the passing of the act, and will place them on an equal footing with the rest of the Service.
– What about employees of the Navigation Department?
– Their services will count from the date when they entered the state Service. In framing their estimate of the cost to the Government the actuaries assumed that all officers over the age of 30 years would take advantage of the concession rate for age 30. Consequently the amendment will not involve any alteration in the estimate. The next important amendment is in clause 7, which proposes to give employees the option of contributing at increased rates to provide for retirement on full pension at the age of 60. The maximum age for retirement is 65, and contributions are based on retirement at that age, but the Public Service Board has the right to retire any public servant compulsorily at the age of 60. The option is with the Public Service Board. Representatives of the Public Service Associations have requested the Government to give consideration to a proposal to reduce the maximum age from 65 to 60 years, but it was recognized that to make such a provision compulsory” would inflict hardship, not only because a man would cease to earn his salary five years earlier, but also because contributions would have to be raised. On the other hand, it is felt that there are many employees, especially females, who would be glad to retire at 60 years of age if they could then receive a full pension. The Government has decided to give employees the option of contributing at an increased rate with a view to their contributions ceasing when they attain the age of 60 years, or of contributing at the present rate for a full pension at the age of 65 years, but it does not follow that, in the event of an employee electing to contribute for the full pension at the age of 60 years, he will be called upon to retire at .that age. If he remains in the Service, he will not, of course, be allowed to draw the pension as well as his salary. The additional cost to the Government of this concession is not available at present, because it is very difficult to compute to what extent advantage will be taken of the option, but it is believed that only a small number will desire to accept it, the feeling throughout the service being that the present contributions to the fund are sufficiently heavy. It is not anticipated, therefore, that the cost to the Government will be materially increased. Schedules 3 and 4 contain the fortnightly rates of contribution by male and female members based on a retiring age of sixty. The next important amending clause deals with the question of invalidity, and section 29 of the principal act is to be amended by omitting the condition of seven years’ service in respect of invalidity pensions. The effect of this amendment will be that a contributor retired on the ground of invalidity or physical or mental incapacity to perform his duties will become entitled to the full pension for which he was contributing, irrespective of his length of service. Representations have been made by Public Service organizations that the seven years’ qualification period was unnecessary, seeing that Commonwealth officers have to pass a strict medical examination, and there would be few cases, indeed, where an officer with less than seven years’ service would be called upon to retire on the ground of invalidity. The matter was referred to the Superannuation Board, which has reported that if the condition of seven years’ service is abolished, there will be ho addition to the cost to the Government of the scheme as reported by the actuaries in 1922, because in fixing the proportion of the contributions representing an invalidity benefit, the actuaries didnot take the condition of seven years’ service into account. The period of seven years is quite arbitrary, and under all the circumstances the Government considers it reasonable to waive the condition. The next important amendment will be found in clause 10, which provides for an amendment of section 38 of the act. I have already made reference to this section, which provides free pensions, not exceeding two units, to widows of employees who died after the 31st December, 1920, and before the commencement of contributions. The section does not, however, apply to the widows of employees with state rights, and it is proposed to extend the benefits of this section to them. The rights to retiring allowances under state laws lapse on the death of the officers, and their widows consequently receive no benefit in respect of them. There are cases, however, where compassionate allowances have been paid to widows of employees with state rights. These payments have usually been made in accordance with the practice that obtained in the state from which the employee with the right was transferred, and it is proposed to deduct the pension value of any such payment from the two units, but so that the widow shallnot receive less than one unit of pension. The Treasury has ascertained that not more than 40 widows and 41 children will benefit by this extension. The annual cost will be about £2,500, but the sum will be a diminishing quantity as the widows die or re-marry, and as the children die or attain the age of sixteen years. As I previously said, the benefit under the section is limited to widows of employees who died during the two years commencing the 31st December, 1920. The actuaries, in estimating the cost to the Government of the scheme in 1922, assumed that the benefits of section 38 would apply to the widows of all married employees who died during the period in question. The next important amendment has reference to the contributions under section 52 of the act by employees with state rights. These employees cannot elect to take up the full number of units corresponding to their salary groups. The most they can take is the full number, less the value of their rights, represented in units of pension. Employees who have become contributors under this section are, however, debarred from increasing the number of units for which they may contribute as their salaries increase, which is a right given to all other employees. In this respect employees with state rights are at a disadvantage. Many have rights that are worth very small amounts - in some cases so small as not to be worth calculating for pension purposes - and itis inequitable that the possession of these rights, which is of little or no benefit, should have the effect of preventing those employeesfrom contributing for the benefits which the act intended to give. It is proposed to remedy this defect by permitting employees with state rights to increase their contributions as their salaries increase, provided that the number of units for which employees may contribute, plus the value of their state rights, shall not exceed the number of units for which they could contribute if they had no state rights.
I have dealt with the whole of the amendments proposed in connexion with the general part of the act, and I now turn to those which deal particularly with the defence forces.
Following the promise made by the Government in 1922, to which I referred in my opening remarks, that action would be taken in the direction of providing superannuation benefits for the members of the military, naval, and air forces, the late Minister for Defence appointed a Departmental Committee to inquire into and report upon this important matter. The recommendations of the committee have received the earnest consideration of the Government, and after the receipt of a report from two of the three actuaries, who in 1922 advised on the Superannuation Bill, it has been decided to adopt the following scheme: -
Naval Forces. - The actuaries in their report in 1922 on the superannuation scheme, expressed the view that the proposed scheme could not satisfactorily be applied to naval ratings, in view of their periods of engagement and their early retiring ages of 30, 35, and 40 years. The officers and men of the sea-going branch of the Naval Forces receive deferred pay, but those of the Auxiliary Forces do not. The Superannuation Act applies to the officers of both branches, but not to the men. It is desirable that all the members of the Naval Forces should be placed on a uniform footing, either in respect of deferred pay or superannuation. Taking all the circumstances into consideration, it has been decided to bring the whole of the Navy under a system of deferred pay as being the more suitable. The scheme therefore provides that deferred pay as now granted to sea-going officers and men be continued, and extended to officers and men of the Auxiliary Forces. Provision is made under clause 5 of the bill for the exclusion from the superannuation scheme, of the members of the Naval Forces, but a few pensions already granted will be continued. Members of the Navy who are contributors will be refunded their superannuation contributions.
Military Forces. -All ranks will be subject to the new scale of contributions based on retirement at the age of 60 years, as set out in schedule 3. On retirement at that or a later age, full pension will be paid, but contributions will cease at the age of 60 years. An employee retiring between 55 and 60 years of age will be given the option of paying his contributions until he reaches the age of 60 years, in which case he will receive on retirement a pension which is the actuarial equivalent of the full pension payable at the’ age of 60. If the employee does not pay up his contributions until he reaches that age, the pension payable on his retirement will be the actuarial equivalent of his contributions paid, and of the share of pension payable by the Commonwealth. This is the application of the principle laid down in the Superannuation Act in respect of retirements from the Public Service between the ages of 60and 65 years. . Full pension will also be paid on retirement on the ground of invalidity, provided that the employee is at least 50 per cent. incapacitated. Where the invalidity or incapacity is less than 50 per cent., it is proposed to give the employee a refund of contributions in lieu of pension. It has been found necessary in many cases in the Defence Forces to retire men on the ground of invalidity or incapacity where such invalidity or incapacity is only slight, and does not in any way preclude the men from following occupations in civil life. There are comparatively few positions in the Defence Department to which these incapacitated men could be transferred. In these cases there is no option other than to retire, but it would not be reasonable to grant them pensions on retirement. If an employee is retired owing to invalidity or incapacity which is due to his fault, he will receive a refund of contributions in a lump sum instead of a pension, as provided by section 30 of the act. Should any question arise in respect of the invalidity of a contributor, a medical officer of the arm of the Service to which he is attached will be associated with the medical officer of the board in respect of any report made thereon. Following on these arrangements, the Defence regulations will be. amended to provide for the retirement of members of the Forces at the following ages: - LieutenantGenerals at 65 years, Major-Generals at 62 years, Majors, Captains, and Lieutenants at 55 years, and all other ranks at60 years. The other provisions of the principal act in respect of contributions, and the payment of pensions are to apply as far as practicable.
Air Forces. - Airmen, other than officers, will be treated on the same basis as the members of the Permanent Military Forces. They are not entitled to deferred pay, and flying operations are not part of their ordinary duties. Air officers have rights to deferred pay. In view of the hazardous nature of flying operations, and the possibility of disablement or death, these officers will be permitted to contribute for pensions for themselves - with widow’s and children’s benefits - in the event of retirement owing to invalidity or incapacity, and for pensions for their widows and children in the event of death, during the course of their service. If an air officer retire for any reason other than invalidity, he will be granted his deferred pay, but nothing in respect of hiscontributions for invalid or widow’s pension. In the event of invalid or widow’s or children’s pensions being granted, the deferred pay will be paid into the ConsolidatedRevenue, the principle being that either deferred pay or pensions should become payable, but not both. These briefly are the details of the scheme that it is proposed to apply to the Defence Department. The provisions relating to the Military and Air Forces have been embodied in Divisions 1, 2, and 3 of Part IVa. Division 1 contains general clauses which bring the members of the Air and Military Forces under this part of the act. Division 2 comprises machinery clauses, which cover contributions, and apply, as far as .practicable, the principles of the act as contained in Part III., which relates to contributions. Division 3 deals with pensions and benefits, and, subject to the special conditions therein provided, applies the corresponding provisions contained in Part IV. of the principal act. Honorable members will be interested in the statement furnished by the actuaries, which has been circulated, showing the cost to the Government of the defence scheme, and the basis upon which the calculations have been made. I have prepared a table showing, over a period of 40 years commencing with the year 1924-5, the estimated cost to the Government of the combined Public Service and Defence schemes. The figures regarding the Public Service are those referred to in the report made by the actuaries in connexion with the 1922 Superannuation Bill. It may be mentioned that the actuaries’ figures are based on the assumption that the proposed scheme would become operative as from the 1st July, 1924; but, in view of the promise made by the Government when the Superannuation Bill was before the House, that proposals in respect of the Defence Forces would be brought forward as early as practicable, it has been decided to give the scheme the same retrospective effect as the principal act. That is to say, those employees who were retired on the ground of old age or total invalidity, also the widows of employees who died after the 31st December, 1920, and before they could become contributors, will become entitled to free pensions as from the date of the commencement of the amending act. The actuaries estimate that the additional annual cost to the Government as a result of making the act retrospective will be about £7,000. It will, therefore, be necessary to add £7^000 to the estimate of the first year. This amount will become a decreasing quantity as the beneficiaries die. . It will add very little to the cost of the scheme over the 40 years’ period, so that the actuarial calculations may be taken as being substantially correct. The table for the 40 years is as follows: -
I have pleasure in submitting the bill for the consideration of honorable members, for I believe that it will be found to provide a fair and reasonable solution of the difficulties that have been brought under the notice of the Government both in regard to the ordinary Public Service and the Defence Department.
– Is it. proposed in the bill to do anything for former government employees who were taken over by the Shipping Board, and who are now engaged at Cockatoo Island Dockyard ?
– The bill will not provide for them, for they are work- ing for the Shipping Board, which is not adirect government activity.
– But the men I have in mind were Government employees before they were transferred to the Shipping Board. I hope that the Government will consider doing something for them, for some of them have been for 30 or 40 years in government employment.
– That matter can be discussed under clause 4 of the bill, and in the meantime the Government will give it consideration.
– Does the bill provide for the dependants of single men who die or become incapacitated 1
– It does not. The actuaries have reported that when the original scheme was arranged provision was not made that on the death of single men their contributions should be repaid to their dependants. To alter the basis of the scheme to provide that the dependants of single men should be paid a pension would mean that the payments of every contributor would have to be increased.
Debate (on the motion by Mr. Fenton) adjourned.
Bill returned from Senate without amendment.
Bill returned from the Senate with an amendment.
Bill returned from Senate without amendment.
Debate resumed from 1st October (vide page 4958) on motion by Dr. Earle Page -
That the bill benow read a second time.
Mr.GABB (Angas)[12.7].- I have examined this measure, and there is very little dm it that I can find fault with. My reason for moving the adjournment of the debate was to give honorable members an opportunity to ‘consider its pro visions. Clause 8 provides that the measure shall not apply to any payment made in respect ofthe assignment or transfer ofa lease regarding which any person had, before 30th June, 1924 -
Would it involve the Government in heavy expense, or cause the departmental officers a great deal of research work, to extend that provision to any person who lodged an objection with theCommissioner ofTaxation against the taxation imposed upon him in respect of any assigned or transferred lease prior to 30th June, 1924 ? It seems to me to be fair that persons who objected to the assessment of taxation upon them in respect to the sale or transfer ofa leaseshould be ‘entitled to consideration, even though they may not have applied to the Commissioner of Taxation for the transmission to a court of their objection.
.- I am doubtfulabout the wisdom of agreeing to this bill as a whole, and I object strongly to certain clauses of it. The three salient features of the measure are: first, that it makes capital taxable as income; secondly, that it selects certain classes ofl easesfor taxation, and exempts certain other classes; and thirdly,, that its provisions are retrospective. I question the fairnessof treating capital as incomef or the purposes of taxation. The proceeds from the sale of freeholds are not taxable. Unearned increment or accrued valueof freeholds is capital, and is not subject to income tax.The same remark applies to such personalproperty as shares, although I am aware that in somestate acts provision is made for taxing the profitson the sale of shares of persons who traffic in shares. It is at least doubtful whether it is wise to treat leases as in a different category from other forms off personalty, and from realty. The secondfeature which I mentioned was discussed in a letter that appeared this morning inthe Melbourne Argus from Messrs. Whiting and Byrne, who were thesolicitors for Mr. Dalrymple in the case before the High Court whichled to the introduction of this bill. I quote the following paragraph from it, for it expresses my point of view well.
The bill now under discussion does not attempt to describe the proceeds of the sale of a leasehold as income, but frankly imposes a tax on capital; and further, it imposes that tax on a class. A freeholder may realize his property at a profit, but pays no such tax. but if a. leaseholder so realizeshe will have to pay tax on his property. To illustrate our point - If a man should have the courage to take up under lease from the Crown a tract of outback country and risk his capital in improving and stocking it, and if, after years of welldirected effort, backed by his personal skill and ability as well as his capital, he should have won such a reputation for his property that he is able on realization to obtain a price forhis interest in the lease, then under the proposed law that price would be taxable. If the same man had purchased freehold, and on realization obtained a profit, he would not be taxed on that profit. Why the leaseholder should be taxed on his capital profit is difficult to comprehend.
Another consideration is that a law such as is proposed may make lessees less inclined to transfer their leases, and that would not be generally approved by honorable members. If a leaseholder’s property increases in value and he can sell it at a considerable profit, the fact that that profit will be taxable as income may deter him from selling. Clause 4 seems to me rather unusual. It exempts the proceeds of the assignment or transfer of leases of mining property - other than coal mining - and leases from the Commonwealth or a state, being perpetual leases without revaluation or leases with a right of purchase. In effect, that clause exempts from both retrospective and future taxation lessees of that class. I say nothing against them ; I dare say they are deserving of every consideration, but it seems anomalous that they should be exempted from the operation of this measure, when others are not exempted, and presumably have had no opportunity of proving that they are entitled to the same consideration. But the portions of the bill to which I chiefly object are the retrospective clauses, 6, 7, and 8. I had something to say in the House recently on the subject of retrospective legislation, and I do not desire to go over the same ground to-day. This bill is substantially similar to the 1915-18 Income Tax Act. I notice in the Argus LawReports that the judgment of Chief Justice Knox and Justices Gavan Duffy and Starke, of the High Court, in the Dalrymple case, stated “ that the language of the sub-section is not easy to interpret.” If the Chief
Justice of Australia and his fellow judges have difficulty in interpreting a statute, how can we expect the man in the street to know its meaning? The original act was difficult of interpretation by even a lawyer, and so is this bill, which I would like to see couched in simpler phraseology . I shall not attempt to explain the legal details of the Dalrymple judgment,butI shall try to state simply what will be the practical effect of this proposed retrospective legislation. No doubt the intention of the Parliament when it passed the 1915-8 Income Tax Assessment acts was that capital should be taxed as if it were income, but a statute is construed, not according to the intention of the legislature, but according to the words actually employed in the act. Under that act, an amount of £100,000 has been improperly assessed and paid, and is held by the Taxation Department under a misunderstanding of the law. In the Dalrymple case, the High Court declared the law, and the Government, realizing that it has no title to the £100,000 in its possession, is seeking legislative authority to retain that money instead of handing it back to the taxpayers. The Treasurer stated that the application of the Dalrymple judgment to all past assessments would involve the Treasury in refunds amounting to £100,000, in addition to the heavy expense which would be incurred in amending the assessments. I submit that the amount at stake has no bearing upon the equity of the matter. If the money does not belong to the Government, it should be refunded, and the re-assessments necessary to enable that to be done are a moral obligation upon the department. The Government would not object to reassessments which would mean an increased return to the department, and, similarly, it should not seek to evade reassessments, for the purpose of refunding money which the department has wrongly collected.
– This proposal is akin to a burglar putting his loot in safe deposit.
– Another reason advanced by the Treasurer is that as deductions are allowed to purchasers of leases it would be unfair for the lessee to escape taxation. That argument may have some force, but I think that the bill arises out of a conviction that many people who should be paying taxation are not doing so. That, if it is correct, is the best)- justification that can be offered for amending existing legislation : but itdoes not warrant this Parliament in agreeing to the proposed retrospective provisions. The Government has no right to retain money which has been illegally collected from certain taxpayers, and it should not ask. Parliament to pass legislation to enable it to do so. Clauses 6, 7, and 8 provide, in effect, that any payment which has been made, or any money which, was wrongly regarded as income, shall legally be so regarded. An exception is made in favour of Mr. Dalrymple, because he is protected by the Bligh Court judgment. The honorable member for Angas (Mr. Gabb) asked a question as to the position of those taxpayers who had lodged objection against their assessments. The Treasurer said that thirteen taxpayers would be excepted, and I assume that a great number of others are affected. Probably many have lodged objections, but have not gone the length of asking that their objections be submitted to the court, and they seem to me to have a good claim to exemption from the retrospective provisions of this bill. In fact, all taxpayers who have’ wrongly paid money under a misapprehension of the law should be released of the obligation which the bill seeks to create.
.- I have always opposed the taxation of leases, because a lease has always been held to be a chattel. The taxation of leases emanated from the desire to catch in the tax-gatherer’s net those persons who were making huge profits by trafficking in hotel leases. It is only right that income so derived should be taxable, but I cannot understand the taxation of genuine leaseholders who engage in opening up the out-back country. The state which controls the land says to such a man, “ We realize that you need a huge area for your industry, but as we do not know the worth of the land-, we cannot give you the fee-simple, as we do with city and agricultural areas; we shall give you, instead, a lease for’ a long term.” To all intents and purposes a lease instrument “ is a chattel, the same as a title to a piece of land, and should, therefore, be subject to the taxation laws qf this country, and dealt with in exactly the same manner as is a tenure in fee-simple. Why should we draw a distinction in this case? If a man buys a- city property, say, for £1,000, and after twenty years sells it at. say, £100,000, his profit for taxation purposes1 is regarded as capital, and not income. The same applies to a person who buys, an agricultural block, and after improving it, sells it at considerable profit. But the man who sells a lease instrument is in a different position. Any profit that he makes after battling at great risk with the elements to develop an out-back block of land, is classed as taxable income. The strange thing is that under the bill a company that sells a lease is taxed at a much lower rate than is an individual with probably less capital behind him. One cannot but conclude that our taxation laws have been designed more for the protection of those people who have the biggest influence in this Parliament. I remember, when dealing with the Wartime Profits Tax Bill, how difficult it was to get this Parliament to give consideration to the people living in the interior, when every consideration was given to the people residing in or about the cities. I wish now to deal with the proposed alteration respecting the taxation of mining properties. The Government is desirous of fostering the gold-mining industry. The assessment bill provided rein-19 ‘ sion from taxation on profits made from mining, principally for gold. It is realized that of recent years little capital has come into this country to develop the goldmining industry. There has been a considerable reduction of labour in our mines. In ten years the number employed has dropped from 126,000 to 65,000. From my experience in the goldfields of Western Australia, I know that every miner provides employment for four persons in other avocations depending on his labour. If 10,000 miners were employed in one district it would mean that a considerable population would find a living there
– That is. in the immediate district.
– The honorable mem ber is referring to population, but I refer mostly” to the working class itself through out the state. The manufacture of the ‘ machinery and other requirements of the ‘ mines make a wonderful difference to the progress of the country. The Government has dealt generously with the goldmining industry by exempting it from the operations of the income tax, . al- ‘ though it may not be for all time. There _ is a difficulty respecting the definition of’ a prospector. A man may be constantly prospecting foc twenty years, living from band to> mouth, and then suddenly strike gold- Any profit that he makes would be taxed probably 60 per cent under state and federal taxation.
– Tattersalls sweeps are subject to a similar tax.
– Surely the honorable member realizes that a prospector is in a different category from the subscriber to a lottery. His profits should be averaged over the whole period during which he has. been working. At present, if he strikes gold,, over half of Ms profit is taken from him in taxation.
– In the case the honorable membear mentions,, the prospector will be free. from, taxation.
– The difficulty is to decide who is the. prospector. The desire of the. Government some time> ago was to free the prospector from taxation. On this occasion it. is. going a little further. Tha. clause provides that the lease, of a mining property/ will be free- from taxation. The clause reads -
This act shall sot apply to the proceeds of the, assignment or transfer of -
the lease of a mining, property (other than coal mining), where the Commissioner of Taxation is satisfied) that th& lease; baa been assigned or transferred -
That portion of the clause is all right. It continues - and that, purchased the- lease from a bona fide prospector and worked the property in a proper and efficient manner; ….
Reading those words, the general assumption would be that if a prospector, assisted by a number of persons engaged’ in the mining industry,, made a discovery of gold, those; jjersons,, if they sold the property,, would be free; from taxation.. We have to decide who* is the prospector, and in this connexion we have, had considerable difficulty in. Western Australia. I know of an instance in which a man. sold a lease* and. waa foolish enough to take. a. number of shares in part payment, which were then, of little, worth. That man went insolvent ills aider to meet the taxation levied upon him by the: federal and state authorities.
Six months ago- a person sold a, mineral lease, for oil to the Freney Kimberley Oil Company. He received less than £1,000 in cash ‘and £10,000 in shares. The- assessment he received from the state- and federal authorities amounted to £5,000 or £6000. No doubt the Taxation Department held that he was not a prospector.. In another instance a man sent a prospector into the north-west and a discovery was made. One of the properties waa sold to the Queensland Government, and the taxation on. that sale- amounted to over £6,000. The person received only £3,000 in cash, and the- rest in bonds. The following letter dated the 16th February of this, year was written by the Mining, Association of Western Australia to the Deputy Commissioner of Taxation in Melbourne in February of this year : -
This association is constantly . being asked by that moat deserving section of the community - prospectors and their backers - to give advice regarding liability to taxation upon the transactions which ordinarily take place when land held under the various, tenement rights of our mining act is dealt with. This state is possessed of great mineral resources, in all probability, resources that are greater than those possessed by any other two- or three of the states of the Commonwealth’ combined, and it is very important, in fact, we think it is not stressing the matter to say it is. absolutely essential that encouragement should be given to the persons who either engage in prospecting or provide the financial backing which enables prospectors, to carry on, so. that the mineral resources, of the state may be exploited and capital induced to flow, into the country.
As you administer both state and federal Taxation Acta, this, association, will be greatly obliged if you will define “ a bona fide prospector,” within the meaning of section 16 (5) of the state act, which does not contain a definition of a bona fide prospector. We are aware of the definition you; have given in order number 1052,, namely - “ Prospector “ in this’ section includes a person who, thoughi not personally performing the work of prospecting, is the person or one of the persons upon whom there is a legal liability, under contract or arrangement to contribute to the costs of the prospecting, and in whom lies the legal right to the whole or a part of any profits from the sale of a lease of a. mining property discovered, by the prospector.
What we desire te know is. whether in your adjudication upon such issues the assessment, or exemption from, assesunent,. to state income, tax will be determined according to that definition, and, if not, will! you be good enough to inform us. precisely what is the state’s definition of “ a. prospector.”
The act has not been administered in Western Australia int accordance with that definition of the Commissioner. It isi nob. the design under the act. The bill proposes to exempt the person, partnership, or syndicate that sends out a prospector, or purchases a. property from a prospector. It is always difficult to get the head of the Taxation Department to decide who is a prospector. There seems to be a desire to grab taxation from persons interested in gold-mining. Honorable members representing Western Australia will remember the sale of the Celebration lease. The person who sold that property accepted shares in part payment, and went insolvent to meet the department’s assessment of his obligations.
– There must have ‘been something wrong with the assessment.
– The shares were treated as of taxable value.
– It is an absurd position.
– The whole thing is preposterous. I want the clause to read as I believe the Government desires it to read. When the bill is in committee, I shall move to amend the clause so that the word “prospector” shall include a syndicate, but not a broker or person trafficking in leases. It is quite clear what the intention of the Government was in 1922. I do not like retrospective legislation, but I hope that the Government win agree to make my proposed amendment retrospective. There .can be no objection to it other than the general objection to retrospective legislation. The desire waa that these people should be free from taxation.
.- I have listened with pleasure to the remarks of the honorable; member for Swan (Mr. Gregory), and I trust that his proposed amendment will be accepted by the Government. There is a special difficulty with gold-mining that does nob exist with other industrial enterprises. Nowhere in the world does gold-mining pay, but the speculative nature of the undertaking is attractive to many men. A man with a few shillings in his pocket, barely sufficient for the purchase of food, goes into the back country to try his luck in this industry, just as a man in town buys a ticket in a Tattersalls sweep. The spirit of speculation, the desire to discover, is responsible for men undertaking “prospecting work. This work is undertaken even in most depressing conditions in Australia to-day.
– The gambling element keeps the industry alive.
– Exactly ; and, but foi it, gold-mining, which is already at a low ebb in this country, would nave ceased years ago. In all parts of the back country, particularly in Western Australia, there are many opportunities of discovering gold. Many men who have discovered gold-mining properties in Western Australia have been made the poorer foi it because of the taxes levied. It has become an axiom that the worst thing one can do is to go into the bush and discover gold. A man who discovers a gold mine in the interior of Australia cannot work it efficiently himself. He has to go into the market with it, but no syndicate or man of wealth will take up such a proposition unless the prospector is prepared to- take only a very small amount in cash and the balance of the purchase price in shares.
– That statement applies equally to silver, lead, and copper mining
– I assume that the amendment will include base metal, as well as gold, miners. If I use the expression “ gold-mining “ it is because most of my experience has been in that industry. Capital cannot be obtained for any mining proposition in Australia to-day unless the prospector is prepared to take almost the whole of his reward in the form of shares. It is easy to understand the reason for that. It is impossible to know how a gold-mining proposition will turn out. Although the surface show may be very good, and the proposition, in the opinion of the prospector, may be very valuable, a syndicate, having regard to the peculiar nature of the industry, will not risk a large amount of money in it.. They tell the prospector that, if he is convinced that the proposition is a good one, he should be satisfied with a large number of shares in the company that, will develop the mine. The intention of the prospector in accepting the shares, and of the syndicate in offering them, is good. The Taxation Department levytaxation on the face value of the shares, although the mere act of trying to realize on them in the early stages of a mine renders them worthless. There has been a great deal of misinterpretation of the act, as a result of which prospectors have been penalized. These men often live for years on poor food and poor water, miles away from civilization. They suffer so much hardship that they should not he deprived of the wealth they may acquire. What has become of most of the Australian prospectors? Australia produced more gold than any other country during certain periods in its history. Can any honorable member point to a dozen men who assisted to open up this industry -in the early fifties, and are wealthy to-day? “ Paddy “ Hannan, the discoverer of the greatest gold-field on earth, is to-day in Melbourne living on a paltry pension given to him by the Western Australian Government. He discovered the Golden Mile, by which £150,000,000 was added to the wealth of Australia. The Government should do everything possible to encourage prospecting. It is because of the incidence of taxation that there are so few prospectors in Western Australia today. There are scores of thousands of square miles in that state, particularly in the north-west, that are very rich in mineral’s. The greatest difficulty at present is transport, but on top of that we have lack of knowledge in the administration of the taxation laws. The departmenthas always been on the track of the prospector trying to get its last pound of flesh out of a very deserving section of the community- These men, in ninety-nine cases out of a hundred, die poor.
– I support- the remarks of the honorable member for Swan (Mr. Gregory), and the honorable member for Kalgoorlie (Mr. A. Green). I wish to touch upon the aspect of the bill referred to by the honorable member for Boothby (Mr. Duncan-Hughes), namely, the assessment of profits on the sales of shares. The Dalrymple case, with which the bill in part attempts to deal, indicates that the Government desires to act fairly towards the man who felt the injustice so much that he sought the aid of the courts of the country. He, with others who took similar action, will receive consideration under the provisions of the bill. The Government should adopt the axiom that financial considerations should not he used as an argument for injustice. If the courts found that Mr. Dalrymple’s contention was correct, every other taxpayer who was in the same posi tion and subject to the same law is entitled to the same consideration. Parliament should maintain the confidence of its citizens by giving them the measure of justice that they have a right to expect. The other matter to which I wish to refer relates to the sale of prospecting leases. It is proposed to broaden the act so as to foster the sentiment and spirit of prospecting. To that extent, the bill will promote the speculating spirit, which is good for Australia. It was that spirit that brought so many noble people to this country from the Old World. Gold is the finest populator in the world, for it will take people into any country, whether in the frigid or torrid zones. Gold has done more than anything else to settle people in Australia. It is as important now as it was in the past that we should encourage attempts to discover gold. It is well known, as the honorable member for Swan (Mr. Gregory) has indicated, that many men who have devoted their lives, with varying success, to goldmining, have profited very little by it. The hope of success induced them to spend their energy and money in the quest for gold. To find gold was their goal in life. There is nothing more galling, or heart-burning to a man than to have his success or failure dependent upon a determination of the Commissioner of Taxation as to whether he is’ a prospector or not.
Debate (on motion by Mr. Bruce) adjourned .
Sitting suspended from 1 to 2.15 p.m.
– (By leave.) - I think that honorable members and the people of Australia are desirous of knowing exactly what is taking place in the Assembly cf the League of Nations at Geneva. They, no doubt, wish for accurate information as to the exact significance of the many press cablegrams which have been published in Australia, whose tendency must be to create anxiety, and to cause the impression that Australia is being placed in a situation which the people of this country are not prepared to accept.
Before stating what has been done at Geneva, I wish to make it clear that nothing that has been agreed to there in any way binds this Parliament or the people of Australia. A protocol, of which honorable, members will have read a good deal, is being prepared, and by the resolution of the Assembly it will be referred for their consideration to the nations that are members of the League ; but in no way will Australia be bound by anything contained in it until this Parliament has given approval to its provisions. I say that to remove the misunderstanding that appears to exist in the minds of some people.
A determined effort has been made at the meeting of the Assembly of the League to amplify the provisions of the Covenant embodied in the Treaty of Versailles so as to make them more effective for the achievement of the purpose for which the League was created, which was the securing of peace among nations by means of arbitration and conciliation, and the gradual, but steady reduction of armaments. The necessity for both these things was stressed at the international conference held in London recently to consider the Dawes report. Those who attended that conference, and, in particular, the Prime Ministers of Great Britain and France, clearly indicated that it was the desire of the nations which they represented, that some practical step should be taken in the near future for a further reduction of armaments. The meeting of the Assembly of the League of Nations took place shortly after that conference, and those Prime Ministers spoke again in its plenary session, both strongly insisting that a determined effort must be made to increase the authority of the League, and early action taken for the further reduction of armaments. From their speeches, three points emerged very distinctly. While both speakers affirmed the necessity for achieving these objects, each made it clear that the achievement of what was desired depended upon a certain sequence in the action, to be taken; that it was necessary to provide first for security, then for disarmament, and finally for arbitration. They insisted that there was no hope of bringing about disarmament until guarantees of security had been given to the nations concerned, and that a further reduction of armaments was a condition precedent to com pulsory arbitration. The ideal of the League is to bring about compulsory arbitration among nations, but it has all along been recognized that that cannot be done until security is given to the nations that submit themselves to it, and there has been a substantial reduction of armaments.
After the” first speeches in .a plenary session of the Assembly the matters under consideration were referred to two committees - some to what is known as the Third Committee and some to the First. These two committees have been addressing themselves to the problem of devising means so to strengthen the provisions of the Covenant that the nations that are members of the League may feel that their security is assured should they be at any time subjected to aggression or attack. An attempt is also being made to alter the statute by which the permanent Court of International Justice was established by defining exactly what the matters of reference would be if a nation subscribed to its compulsory authority; and with a view to making the statute and the authority of the permanent court more acceptable to the nations generally. The First Committee has made suggestions for certain definite atlerations in the Covenant itself-. The first of these is an amendment of Article 12. That article reads - .
The members of the League agree that if there should arise between them any dispute likely to lead to a rupture, they will submit the matter either to arbitration or to inquiry by the council, and they agree in no case to resort to war until three months after the award by the arbitrators or the report by the council.
It is proposed to strike out the words under which the nations undertake not to resort to war until three months after the award by the arbitrator, and to substitute for them words stipulating that no member of the League shall resort to war against any other member except to resist aggression or with the consent of the Council or Assembly. That, of course, is a much stronger provision. The next suggestion i3 to amend article 15, which lays down what shall be done in the case nf a dispute arising. Article 15 reads -
If there should arise between members of the League any dispute likely to lead to a rapture, which is not submitted to arbitration in accordance with Article 13, the members of the League agree that they will submit the matter to the Council. Any party to the dispute may effect . such submission by giving notice of the existence of the dispute tothe Secretary-General, who will make allnecessary arrangements for a full investigation and consideration thereof.
For this purpose the parties to the dispute will communicate to the Secretary-General, as promptly as possible, statements of their case, with all the relevant facts and papers, and the Council may forthwith direct the publication thereof.
The Council shall endeavour to effect a settlement of the dispute, and if such efforts are successful a statement shall be made public giving such facts and explanations regarding the dispute and the terms of settlement thereof as the council may deem appropriate.
If the dispute is not thus settled, the council, either unanimously or by a majority vote, shall make and publish a report containing a statement ofthe facts of the dispute and the recommendations which are deemed just and proper In regard thereto.
That article gives no- compulsory power to the Council to insist on matters being . referred to arbitration. It deals only with matters that are submitted to the Council, and no provision is made for what is to happen in the event of there being no decision by arbitration. The amendment which is suggested provides that, failing agreement by two parties to submit their dispute to arbitration, the Council shall have power to submit it; and when that has been done, the whole of the forces of the League will be behind the action of the Council. That, again, is a very great strengthening of the provisions of the Covenant. In this part of the protocol, matters of domestic jurisdiction are completely excluded. The third suggestion is to strengthen Article 16, which deals with what is known as the economic sanction, and reads: -
Should any member of the League resort to war in disregard of its Covenants under Articles 12, 13, or15, it shall, ipso facto, be deemed to have committed an act of war against all other members of the League, which hereby undertake immediately to subject it to the severance of all trade or financial relations, the prohibition of all intercourse between their nationals and the nationals of the Covenantbreaking state, and the prevention of all finan cial, commercial, or personal intercourse between the nationals of the Covenant-breaking state and the nationals of any other state,’ whether a member of the League or not.
The suggested amendment contemplated carries out the idea embodied in the Covenant, but it extends the sanctions so as to interpret them to include an obligation on member nations to co-operate against an aggressor by economic action, and to support the threatened or attacked state with supplies of raw materials, food, credit, transport, and ensure the safety of its communications.
Those are the three principal alterations which have been discussed in regard to the Covenant itself; but there are two other points, and it is in regard to them that the main discussion has taken place, because they concern matters ‘ that are properly the subject of domestic jurisdiction. As to the three suggested amendments that I have spoken of, I think that the people of Australia will welcomethem as an effort to strengthen the League, and make it a more effective instrument for the prevention of war by enabling it to insist on disputes between nations being referred to arbitration.
I come now to articles 5 and 6 of the protocol, in respect of which considerable difficulty arises, for they are the articles in which Australia is most interested, and in regard to which we must exercise the utmost vigilance, because the interpretation of “matters of domestic jurisdiction “ is involved. An impression seems to be abroad that under the Covenant it is sufficient for a nation to say that a matter under consideration is a matter of domestic jurisdiction to prevent any other nation from challenging it, or interfering in the matter; and that if a question is a matter of domestic jurisdiction it cannot, in any circumstances, become the subject-matter of discussion by the League. That is not the case. Article 15 of the Covenant provides, inter alia -
If the dispute between the parties is claimed by -one of them, and is found by the Council to arise out of a matter which by international law is solely within the domestic jurisdiction of that party, the Council shall so report, and shall make no recommendation as to its settlement.
If, on the other hand, the Council finds that a matter so referred to it is not a matter of domestic jurisdiction, the ordinary provisions of the Covenant for the settlement of disputes between nations will apply.
– What is the meaning of the term “ matter of domestic jurisdiction,” according to international law?
– It is upon the answer to that question that everything depends.
Under the Covenant the . Council may role that a question, submitted to it by two n*t.1011.9 is not one of domestic jurisdiction. If it did so rule, the question at issue would be subject to the ordinary terms and conditions of the Covenant. Article 11 of the Covenant is also important in this connexion. It reads -
It is atea declared to be the friendly right of each member of the League* to bring to the attention of the Assembly, or of the Council, any circumstance whatever affecting international relations which, threatens to disturb international peace or the- good understanding between nations upon which peace depends.
It is apparent, therefore, that it is open te any member nation to bring any question under the notice of the League, whether it is considered a domestic’ matter or not, if a dispute regarding it tends to break the friendly relations of the nations of the world. Under the Covenant, every member nation, Australia, included, is able to submit to the League any subject in which she- has a fundamental interest, whether it is regarded as a matter of the domestic jurisdiction of some other country or not. The difficulties now to be faced are created by the proposed alteration of the Covenant. There is in the Covenant as it stands no provision by which the nations pledge themselves not to resort to- war. All that they are pledged to is the adoption of a certain procedure, and if, at the end of three months after the award of the arbitrators or the report of the Council, a satisfactory settlement of the issues involved is not made, the aggrieved nation may resort to war. The suggested alterations of the Covenant will greatly strengthen it in this matter, for they provide that no nation may resort to war except (1) when it is the subject of aggression, or (2) when, it has the unanimous consent of the League to do so. As these alterations affect even questions which may be defined as matters of domestic- jurisdiction, it will be necessary for us to give careful consideration to them. The portions of the protocol which have been the subject of so much discussion are articles 5 and 6. I shall deal first with the latter. In article 6 of the protocol the word “ aggressor “ is used, and the term is very clearly defined. It will be necessary, therefore, to ascertain who would be the aggressor in circumstances which might arise.. The definition- originally proposed read -
Every state which resort* to- war in. violation1 of the* undertaking in the- Covenant, or the’ present- protocol is. deemed to- ‘be an. aggressor.
Violation, of status in a demilitarized zone’ is equivalent fo- resorting to war..
In the event of hostilities breaking, out, any state shall be deemed1 an aggressor unless unanimous, decision, of council otherwise declares;
Firstly. - Any state refusing to submit dispute for pacific settlement under articles 13 and 15 of the Covenant as amplified by the present protocol or to comply with ‘judicial sentence, or arbitral award, or unanimous- recommendation of Council, or which has disregarded unanimous report, of. Council, judicial sentence, or arbitration award recognizing dispute between it and other- belligerent state arising out of matter which by international law is. solely within the domestic Jurisdiction of latter state.
I direct particular attention to the last words. They provide that if the Council, the permanent court, or the arbitrating authority, to which any question has been referred, declares that the matter at issue is one of the domestic jurisdiction of one country and the other country concerned should go to war upon that question, it would be regarded as being the aggressor. That is the significance of those words. The Japanese delegation moved for their deletion. The effect of the deletion would be that if the League ruled that a matter was one of domestic jurisdiction and a country went to war on the subject, it would not, of necessity, be defined as being the aggressor. Obviously, Australia could not agree to that. Immediately the Government received notice of the proposed omission’ it cabled to the Australian delegates that in no circumstances could it agree to it. The question was discussed at great length at Geneva, and was the subject of a great deal of negotiation. Eventually it was agreed to leave the words in the protocol, but, at. the instance of the Japanese delegation, the following words were added to the article: -
Nevertheless, a state shall only- he presumed- to be the aggressor if it has not submitted the question to the Council of the League of Nations or to the Assembly of League of Nations.
Those words are’ extremely difficult to interpret. A position may arise in which, even after a dispute has been referred to the Council of the League or the Permanent Court of International Justice-, and the ruling has been- given that itaffects a question of domestic jurisdiction, a nation may decide to continue the dispute. If the terms of the protocol had been left as originally proposed, such a nation would be deemed the aggressor; but the addition of the words proposed by the Japanese delegation may alter that. I tell the House frankly that at this distance from .Geneva, and on the information that is in the possession of the Government, it is impossible to say what the exact meaning of that article of the ..protocol now is. The legal authorities whom our delegates at Geneva consulted expressed the opinion that the words added were innocuous, and that Australia’s position with regard to her own jurisdiction was absolutely safeguarded. Both Sir Littleton Groom and Mr. Charlton have advised the Government to agree to the words being included in the protocol, as that was the only way to secure agreement to it; but I remind honorable members that the adoption of the article of the protocol will be a matter for the consideration of this Parliament. Anything clone now at Geneva in regard to it does not in any way bind Australia:
– The words appear to be innocuous and also useless.
– I am not sure that the term “ useless “ should be applied to them.
– It would appear that a nation could submit a matter to the League and then proceed to take its own course.
– I do not propose to discuss now what the words mean. I am making this statement simply to put the position in respect to the protocol clearly before the House. It will have to be dealt with when the protocol is brought before the House for consideration. The other article of the protocol which has been discussed is No. 5, which reads -
If in the course of arbitration such as is contemplated in article 4 one of the parties claims that the dispute or part thereof arises out of a matter which, by international law, is solely within the domestic jurisdiction of that party, the arbitrators shall on this point take the advice of the permanent Court of International Justice through the intermediary of the Council of the League of Nations. If the court replies that, in fact, the dispute does arise out of such a matter, the arbitrators shall confine themselves to so declaring in their award.
The Japanese delegates moved to add to that article these words -
The above provision shall leave unaffected the Council’s duty of endeavouring to conciliate the parties so as to ensure the maintenance of peace and a good understanding between nations.
Those words mean that, a determination having been made that a matter in dispute is one of domestic jurisdiction, one of the parties may pursue it further with the Council of the League. Thaiamendment was not accepted, but the following alternative was adopted : -
IF a question is held by the court or the Council of the League of Nations to be a matter solely within the jurisdiction of a state, .such decision shall not prevent consideration by the Council of the League of Nations or the Assembly of the League of Nations under article 11 of the covenant of the League of Nations.
Those- words permit a subject to be further pursued after a determination has been arrived at by the Council or some other tribunal, but do not substantially alter the existing position under the covenant of the League. They merely underline article 11 of the covenant.
– They alter it fundamentally, so far as Australia is concerned.
– Oh, no!
– Oh, yes !
– I disagree with the right honorable gentleman. The words do not fundamentally alter the existing position. A country that does not accept the contention that a matter in dispute is one of domestic jurisdiction can, at the present time, bring the matter before the Council of the League or the Assembly of thi League, under article 11 of the covenant, which says -
It is also declared to be the friendly right of each member of the League to bring to the attention of the Assembly or of the Council any circumstance whatever affecting international relations which threatens to disturb international peace or the good understanding between nations upon which peace depends.
I am not now debating whether it is good or bad to give power to pursue a matter that has been already determined to be one of domestic jurisdiction, but I certainly say that the amendment which has been made to the protocol merely emphasizes powers already conferred by the covenant.
– Does the right honorable gentleman contend that the Council may now claim to have juris- diction in a matter declared by a state to be one of domestic jurisdiction? I say that a fundamental change has been made.
– I still say that by article 5 no fundamental change has been made. Article 5 of the protocol, as amended, merely underlines article 11 of the covenant, and certainly does not fundamentally alter the existing position.
– The position may not have been altered by article 5, but it has been altered.
– Article 11 of the covenant is wide enough to embrace any subject in dispute.
– Yes ; but it gives the right to refer any matter to the Council or Assembly of the League for friendly intervention and assistance. Australia’s attitude to these amendments will depend upon whether the first amendment to the covenant, by which the powers of the League are increased, will make more burdensome our obligations. If the League has no power other than to express a pious opinion, article 5 of the protocol may not be regarded as particularly dangerous to any country; but if the League is to be made a force which can exert the strength of the combined nations to discipline any state which merely affirms its right to control matters of domestic concern, the article might become very onerous, and as such Australia could not subscribe to it. That question will require to be considered when all the amendments are before the House. I have already said that article 5 of the protocol does not seriously alter the existing position; but article 6 requires much more careful consideration, because, if it had been adopted in its original form, without the words which have been added at the instance of Japan, a state would not have been able to pursue a dispute in regard to a matter that had been declared to be one of domestic jurisdiction, without incurring the danger of bringing against itself the whole force of the League of Nations. .It would have been a very powerful article indeed, and immediately a matter was declared to be one of domestic jurisdiction, the door would have been shut in the face of .any power that wished to further pursue the dispute. Whether the . position will remain the same in view of the words that have been added is a matter which will require very careful consideration when the whole of the text of the protocol is before the House. In considering the amendments that have been suggested by Japan, we have to recognize exactly what was the object of the Japanese delegation in suggesting them. I do not think there has been any hesitation on the part of the Japanese to indicate what is their object in the matter. I have seen it suggested that this is the first time that Japan has made her position quite clear. But the right honorable member for North Sydney (Mr. W. M. Hughes) will bear me out when I say that that is not so. The representatives of Japan made their position very clear in 1919, at the time of the framing of the original Covenant of the League of Nations. In April, 1919, Baron Makino said in respect to the Japanese proposal to insert a clause in the Covenant’ of the League concerning racial equality -
I feel it my duty to declare clearly on this occasion that the Japanese Government and people feel poignant regret at the failure of the commission to approve of their just demand for laying down a principle aiming at the adjustment of this long-standing grievance - a demand that is based on a deep-rooted national conviction. They will continue in their insistence for the adoption of this principle by the League in future.
The Japanese have emphasized that posi-tion since. Every one in Australia realizes and understands the Japanese attitude, and we, for our part, have made our position clear. I think that Japan understands that the Australian legislation to which they take exception is not intended to place the Japanese in an inferior position, or to discriminate between nations, but is based purely upon economic considerations. At the same time, she has all along contended that she should be placed in the position referred to by Baron Makino. Obviously, on this subject, there is a great difference of opinion between the two peoples. But we stand as we always have stood by our claim, that this is a matter of domestic jurisdiction, in exactly the same way as a similar question would be one for domestic jurisdiction in Japan. And Australia cannot allow action regarding a question of domestic jurisdiction to be dictated to her by the League of Nations, or by any other outside authority. That is the ground upon which we must base our very careful scrutiny of the suggestions which it is proposed to embody in the present protocol. We are not alone in our attitude in this matter. The people of the United States of America take exactly the same view. I regret very much that at this time, when the League of Nations at its Assembly has been making a great effort to strengthen the Covenant, and to reinforce its authority, the question of domestic jurisdiction should have arisen, because I am certain that this will render more difficult the inclusion of the United States of America in the League, and will also render it more difficult to obtain her assistance and aid at a disarmament conference, if one should be held next year. America takes the view that she cannot allow any outside authority to dictate to her the policy she should adopt with regard to questions within her own jurisdiction.
– Did I not understand the right honorable gentleman to say that the Council of the League of Nations, even under the Covenant, has the right to decide what are questions of domestic jurisdiction t
– Under article 15 of the Covenant of the League of . Nations, a nation can refer to the Council any question to determine whether it is one of domestic jurisdiction. If the Council . finds that it is a matter of domestic jurisdiction, it takes no further action; but, if, on the other hand, it finds that it is not a matter of domestic jurisdiction, then the machinery of the League would come into operation.
The statement I have made is designed merely to clarify the position, by informing honorable members as far as possible what are the provisions of the protocol. The information we have gives some indication of the significance of these provisions, but without the full text of the protocol, without the legal opinions as to its effect given to the Australian delegation at Geneva, and without the opportunity to hear from our delegates the impression created upon their minds, it is useless to discuss the matter. The protocol will in due course be forwarded to Australia as one of the member nations of the League. It will then be submitted to this House for full discussion and ratification if thought necessary.
Mr.O’Keefe. - The Prime Minister should prevent the press from using scare headlines when publishing information on this subject.
– I believe that it is the desire of the people of Australia that the Government should assist in strengthening the League of Nations, and in augmenting its authority, so long as our domestic jurisdiction is safeguarded, and our sovereign rights are not interfered with. I hope that the protocol will be found to contain provisions to which we can subscribe. At the Assembly of the League of Nations the Australian delegates subscribed to the resolution referring it for consideration to the nations which are members of the League. That was done with the unanimous consent of all the delegates, and after the fullest consideration of all factors.
– Is Australia bound by the decision of a majority of the League?
– Australia is not at present bound at all. I trust that our people will uphold the judgment of our delegates, until we have had the opportunity of considering and investigating the protocol. I should appreciate the need for action if Australia were in any way bound by what has takeu place at Geneva. But we should do nothing at this time to prejudice Australia’s future action regarding the protocol. The present effort is the greatest hitherto made in the history of the League to progress on the lines laid down by the original framers of the Covenant. I believe that it is the desire of this Parliament, and of the people of Australia, to lend our aid towards the realization of the aims’ of the League, and to do nothing to hamper its operations, unless in the protocol there is some provision that may interfere with our sovereign rights in matters of domestic jurisdiction. I regret that there is no more information I can give to the House. The Government has been in close communication with the Australian delegates during the sittings of the Assembly, and our delegates there have acted in close cooperation with us.
Debate resumed (vide page 5130).
.- (By leave.) - At the adjournment of this debate I was dealing with the position of a prospector who had spent almost the whole of his life searching for gold or some other mineral, and, having secured a find, and being unable to work it himself, had sold the lease for part cash and part stares. This Government has decided that in such, a case the prospector would not he taxed on the proceeds of the sale. It is just at this point that there is a weakness in the law. The Government has decided to delegate to the Federal Commissioner of Taxation power to determine whether that person is a prospector or not. I know of certain decisions by the Commissioner that have caused bitter disappointment.I know of one person who for over a quarter of a. century prospected for gold, and yet he is not recognized as a prospector by the Commissioner.When he became too old to prospect he arranged with others to prospect for him. These men made a discovery, and an arrangement was made with them and the property sold. The Commissioner has now decided that the proceeds received by that person are taxable. It must be remembered that this prospector wasted thousands of pounds looking for gold. This is an unjust tax on our citizens, who have taken the risk of looking for wealth hidden in the soil of this country. It is a retarding factor in the development of mining. I hope that the amendment foreshadowed by the honorable member for Swan will be agreed to in committee, so that justice will be meted out in cases such as that I have mentioned.
.- It is somewhat difficult after listening to a discourse on important world affairs to turn one’s mind back to the apparently small matter of domestic concern with which, this bill deals. But the subject brought up by the honorable member for Swan (Mr. Gregory) is really of far more importance than appears on the surface. Probably honorable members may not realize how . important this bill is to Western Australia. Of course, I know that gold-mining has been of vast importance to the other states, but its relative value to Western Australia is far greater than to any other state of the Commonwealth. In that state a -very large area ofmineral bearing country still remains undeveloped, some of which is not altogether suitable for the settlement of population. Some would have never been opened up at all but for the romantic attraction of the golden metal, which has led people to venture out, and prospect In some of the most remote parts of the continent. Gold-mining in Western Australia is, therefore, one of the great pioneering forces, and that state is suffering to-day from the fact that that pioneering force is. to a great extent, ceasing to operate . It is generally believed by those who know the metalliferous country that there must be vast deposits still undiscovered, but the conditions are not so attractive as they were a few years ago, as prospectors are now compelled to travel much further in the effort to discover mineral of a sufficient value to justify development. As there are no superficial indications, a good deal of labour and detailed examination is necessary, and consequently the work is more expensive and protracted. The gold resources of Western Australia are not being investigated as they might be, and the members representing that state are particularly anxious, not only in the interests of Western Australia, but in the interests of the whole Commonwealth, that immediate relief should be afforded.
– Action, should have been taken two years ago-
– Yes; I shall deal with that. I am doing only what the members of this House expected would be done two years ago. In 1922, when an amending measure was introduced, it was the intention of Parliament to extend the benefits which we are now seeking, but that has not been done. There is a legal phrase, “ The king can do no wrong.” That is intended to mean that anything which the king does cannot be wrong, but it should be taken to mean -that “No wrong should be done by the king.” The Parliament should be the fount of justice. The honorable member for Boothby raised a very important objection to retrospective legislation, and said that possibly the only justification for introducing such legislation, in this instance, is that people who ought to be taxed would otherwise escape taxation.
– I think. I sold that that was what is claimed.
– Yes, I do not -wish to misrepresent the honorable member, and I do not think that this House deliberately desires to do any one an injustice. At the same time a great responsibility rests upon us when some who ought to have contributed to taxation have escaped their liability. I find it difficult to make up my mind as to what is right in this instance. If it is justifiable to apply the principle of retrospective enactment to obtain money which ought to have been collected, it appears to me that the principle, is equally applicable in the case of money wrongly collected by the Government. If the Government have been wrongly collecting taxation, it should be refunded. In 1922 relief for prospectors “was provided in the act, but owing to a technicality, a misreading or a misapplication of the law, its provisions have not been given effect. The Commissioner has nob applied the definition of “ prospector “’ laid down in his departmental order, ‘ arid the practice of taking the face value of shares received in return for the sale of a lease is quite ridiculous. In many instances a prospector receives shares when his lease is taken over and a company floated; but he may be prevented by agreement “from placing the shares upon the market.
– Very often for two years.
– Yes, for the obvious reason that if he did their value would immediately depreciate. If he cannot place them on- the market, they are of no value to him for the time, and are as so much waste paper. Notwithstanding that, the holders are taxed as if they were of value, and in some instances the holders of such shares have had to go through the insolvency court because they were unable to pay taxation on income which they have never received.
– It is awful.
– It is a Gilbertian procedure. That was never intended, and relief should be given as was expected in 1922. Undue hardships have in many instances been created, particularly because this provision has not been applied as was originally intended. I feel sure, the sympathy of the House is with us in endeavouring to afford real relief to prospectors who are doing the pioneering work and who are suffering such great hardships. They have had to suffer severe hardship, because the intentions of the Parliament have been misinterpreted. I therefore ask the House to grant the relief, and to make it retrospective to the time when it was intended that it should be granted. I support the amendment that the honorable member for Swan (Mr. Gregory) intends to move, and trust that the Treasurer will realize the justice of the claims put forward, and will honestly do his best to give the necessary relief.
.-I have considerable pleasure in supporting the amendment foreshadowed by the honorable member. for Swan (Mr. Gregory). I do so for the reasons urged by him and the honorable member for Kalgoorlie (Mr. A. Green).
– The House knows nothing of an amendment.
– One has been circulated.
– The amendment circulated is for the use of the committee, not of the House.
– I trust that the committee will accept the projected amendment. Except that I do not wish to delay the House at this (hour, I could support with many instances from my personal knowledge the arguments put forward by the honorable members for Swan and Kalgoorlie. I could cite prospectors who, after spending half their lives undergoing terrible hardships, and after displaying that pluck, enterprise, and spirit that have made this country what it is, have died almost in poverty. It was they who brought the mining industry to the state of prosperity that it enjoyed a few years ago, but does not, unfortunately, enjoy to-day. When any of these men happen to make a good find they are virtually compelled to sell it to people who are prepared to invest the necessary capital to develop it. The arguments that have been applied to the gold-mining industry could be applied with equal force to tin, copper, and silver-lead mines. Prospectors have frequently had to work for six months or a year to earn a few pounds to enable them to buy food and support themselves while prospecting in the “Never Never.” The’ few of them who have succeeded in finding something attractivehave had to accept in return for it a certain number of shares.
– Which are usually tied’ up.
– Not always. I havehad to do with many instances -in which they were not tied up. I have been as- sociated with the mining industry since I was a boy. I have been a miner, and to a less extent a prospector, and I have been in close association with many of the hardiest prospectors of Australia. The men who discovered Mount Lyell, which is one of the largest copperproducing mines in the world, died almost paupers. Only one of the half dozen that claimed to be the real discoverers of the mine possessed any money in his old age. He was fortunate in being able to hold the shares paid to him. One of these men had to get a small grant from the State of Tasmania, to support him in his declining years. The history of the discoverer of the Mount Bischoff mine, which for many years was the greatest tin-producing mine in the world, reads almost like a romance. For long periods be lived in the impenetrable fastnesses of the West Coast, which was covered with a dense jungle, through which a man could travel at not more than a mile a day. He had to hew his way with a half axe, while he lived- on flour and bacon, bandicoots, badgers, and anything lie could catch. He was popularly known is Philosopher Smith. Fortunately for him, the shares he received in return for his find proved sufficiently valuable to provide him with a decent reward for hia hard toil. I have personal knowledge of many of these men. More capital is needed for mixed metal propositions than for gold-mining. It is frequently possible to get something out of a gold mine with a plant worth not more than a few thousand pounds, but hundreds of thousands of pounds are someHi n rs required to make other mines profitable. It is an injustice and a hardship that prospectors should have to pay, not on the actual, but on the nominal, valve of the shares they hold.
– The face value.
– I should not. call it the face value, but the nominal value. There are hundreds of instances in which 100,000 £1 shares are issued, but only £10,000, £15,000, or £20,000 of capital is. called up. The payments may be 2s. on application and 2s. on allotment, and rarely is more than 5s. per share called up. ‘ Out of the £25,000 thus raised very little goes in cash to the discoverer of the mine. Many of the most profitable mines in the Commonwealth would never have been discovered but for the pluck of the pioneering prospectors under most adverse circumstances. It is absurd to levy taxation on the nominal value of shares ‘ which they have received. In many cases their actual value may be under 5s. J shall have pleasure in supporting the amendment when we reach the committee stages of the bill, and I feel sure that if the Treasurer had had as much experience of the pioneering prospectors as many other honorable members have had lie would have no hesitation in accepting it.
– I intend, when the bill is in committee, to move to delete paragraph b of clause S, which provides for exemption in cases where judgment has been obtained or ob- ‘jection lodged, with the object of securing exemption for lessees who have recorded a protest in writing against the principle of the assessment declared to be invalid by the High Court. This bill touches the whole principle- of retrospective legislation which I do not approve, except in special circumstances. Unfortunately, there is a disposition on the part of legislative bodies throughout the world - and the Commonwealth Parliament is no exception - to resort to retrospective legislation in a manner that would not have been attempted a few years ago. If, as the result of mistakes made, either departmentally or by Parliament, the judgment of the court is against the, departmental interpretation of the law, it should, be the business of the Government arid of Parliament to start afresh. If the judgment of the High Court in the Dalrymple case clears the appellant, the Government has no option but to return to him the amount which he has been illegally obliged to pay in taxation. The Government proposes to grant the same concession to other appellants who have taken steps ‘to approach the court. The same principle should apply to all lessees in a similar position. I am aware that it is difficult to draw the line, but, in justice to all, there should be no discrimination. The Commissioner of Taxes must be well aware, that many other cases have been in dispute for twelve or eighteen months, payments having been made under protest. Some of the taxpayers would have been before the court long ago but for the fact that their cases have been delayed by the Commissioner. As a. result* tb.«y «e. not tot receive the benefit of the exemptksi, I ask the Treasurer not to take the bill beyond, the second-reading stage today.. It affects a considerable number ol people in all parts of Australia. Every honorable member who represents a producing constituency has received proteats, against the principle of this bill.. The. Government intends to- make definitely legal1 a principle that has been declared by the High Court, to be illegal j but, it will, not apply to freeholds at alt. It has been applied to land held under a right-of-purehase agreement, or with a covenant of purchase, and to. perpetual, leases,; and I want to know why it should not be applied to, Crown leases, the terms of which indicate ait once that their value is very. much, above that of pastoral leases^ which may have a currency of from 21 to 42 years. Grown leases held? with a covenant of purchase are; naturally located, in what is known as the inside, country, and because of their value, the lessees, have reserved the1 right to make them freehold’s.. But, why should this: principle be applied, to. land of the lowest value: and not to the most valuable country? The owners of leases in the outside areas are blazing the track for succeeding generations;, and every inducement shouldi be offered them to continue their self-sacrificing work. They are. hard- working a&d enterprising men, prepared to take many risks> and the result of their Me?s work, is to create, on leases that, were valueless when; first taken up> values that are permanent. “Where, In other, directions,, do we find the Government, taxing capital instead of the income that capital produces? I hope, that the Treasurer will not press the second reading of this bill to a division. About 25 pears, ago several of the State-Governments applied: this pernicious principle to freehold; land, and their action, was, challenged. I think that, the “Werooota case, in South Australia led to* its abandonment. I incite honorable members to read the High Court decision in the Dalrymple case, and make up. their minds as to how far this Parliament should go in the direction r>f rectifying the mistakes of the past by the un-Britisb practice of retrospective legislation.
.There are a number of points that: I would have, liked to discuss on the second reading, of the bill, because I think they are more> appropriate! to the secondreading than to the eonunittee stage; They are matters of principle which, have beea adverted to by other speakers- who ham preceded me, and are. not mere matters., of detail. But having regard to. the hour, and’ seeing: that there ia a little more, work to- be. done before, the adjournment,, I shall defer foe the/ most part what. I have to. say until the bill, is,- in committee.. I propose to argue that the, measure is an attempt to introduce- the, new and vicious principle of. taxation of capital under- the guise of taxation, of income* and, that this; ia being done by a process of definition arising out of the discretion! which. is vested in the officers administering- this important department. The Commissioner of Taxation1 was described in oneinstance by Mr. Justice Isaacs as an expert, conscientious, and impartial officer. He is> expert and conscientious I have nodoubt; but that he is’ impartial I deny, because it becomes the business and instinct of a Commissioner of Taxation to use hiss discretion, to- the limit of his powers in producing revenue from the- community. Inthe second place, I criticize very strongly the policy of taxing-transfers of leaseholds.. I do not, think there is any- just principleupon which transfers of leaseholds canbe taxed under an Income Tax Assessment Act. I protest against the proposal outrlined by the Treasurer to give only to. the executorst of a big estate the special benefit of the High Court judgment in. the Dalrymple ease. I see- no reason why other persons who are similarly situated’ in. principle, if not in means, should not have, the benefit of the- High Court’s,definition of the’ law. The High Court does not legislate, it merely defines what the law is, and what it was when it leffc this deliberative assembly. Every citizen should benefit equally by any definition that it gives. The honorable member for Wakefield (Mr.Foster) has-, pointed out that other persons intended” to test this matter. That is beside thequestion. The fact is that as citizens theyare entitled to- the benefit of any interpretation of the. law given by the High Court.
– I wish to make one or two. comments, in order that, honorable members, when they come to- discuss* thi* mat- ter is committee may have additional facts to guide them. It is, of course, recognized that, this is a taxupon an accretion of capital. The reason for the imposition of this tax may be briefly stated. The original act did not deal -with the amount of payment received by a lessee, upon the assignment or then transfer of a lease. It dealt only with the purchase price, paid for a lease - that is to say, the profit- that was accruing from the transfer or assignment of a lease to a subsequent purchaser. The amendment dealing with this, aspect was first brought about through a request for the deduction allowance of the price paid by the purchaser, and, consequently, the price received was. taxed in the hands of the vendor. Up to the time of the Dalrymple case the interpretation placed upon the law by the department was accepted. Thousands of taxpayers have, paid the tax during the last eightyears, well knowing that that was the intention of Parliament.
– Until the price of wool increased they did not have much, to pay.
– The tax was originally imposed on account of the sale and re-sale of hotel leases, in which huge profits were being made rapidly and repeatedly. We are now taking- actionto validate the collection- of that tax, which was specifically imposed by Parliament. I desire to draw the attention of honorable members to what has, happened recently in England. During the war and the post-armistice period bonuses were paid to employees, by the British Government, municipalities, and other employers to meet the increased’ cost of living. Under the British income tax system the salaries of employees were not averaged over three years, as other profits were, but a year ago the House of Lords held that such bonuses were perquisites, and had to be averaged. Many thousands of employees had paid the full tax without averaging, and the decision of the House of Lords would have necessitated an enormous’ number of refunds, involving millions of pounds. Consequently, a finance bill was introduced into the British Parliament which retrospectively validated all those assessments. The honorable member for Wakefield seeks to introduce a new clause exempting these who have notified their objection to the tax. Surely, if equity demands, anything it demands’, that all those who have paid the tax should be included.
– That would involve an examination of the whole of the assessments that have been made since 1916-. It would obviously be unfair to make a refund only to those, who have specifically applied for it. From 4,000,000 to 5,000,000 income-tax assessments would have to be examined to enable complete equity to be done. Under the circumstances, the Government feels that the, intention of Parliament should be carried out; that the tax should, be retained, and that its collection should be validated in this, way.
Question resolved in the affirmative.
Bill read a second time,.
Clause 1 agreed to.
Bill returned from Senate without request.
Commonwealth Bank Directorate - Cash of Allan Leak - Care of Mentally Afflicted Soldiers - Late Seaman Ritchie - Co-operative Estates Company.
.-I move -
That the Housedo now adjourn.
I am now in a positionto announce totheHousethe names of the gentlemen, with one exception, who have, been chosen for appointment as directors of the Commonwealth Bank. Honorable members will remember that, the measure, which recently passed Parliament provided that there should be a board of eight directors to manage and control the Commonwealth Bank. Two were- to be the Governor of the Bank and the Secretary to the Treasury. Of the other six I ana able to give the- names of five; and I hope to make an announcement in respect to the sixth in the course of. a day or two. The five who have been appointed are: - Sir R. Gibson, SirSamuel Hordern, and Messrs. R. S. Drummond, John Garvan, andJ. McKenzie Lees.
.- -I direct the attention of the Prime Minister to the case of a young fellow named Allan Leak, who was employed for some time in the Postal Department at Adelaide. He passed every examination to qualify him for admission to the Service as a permanent officer, but was not appointed on account of a departmental medical officer, to whom he had to submit himself for examination, reporting that he was suffering from a chest complaint. The young man is an athlete, and plays football and cricket, and his own medical adviser disagrees with the finding of the departmental medical officer. I appealed to the Deputy Postmaster-General of South Australia (Mr. Kitto) on his behalf, but was unsuccessful in preventing his dismissal. Matters had reached that stage when I had to leave forRabaul with the Navigation Commission. I expected that something would be done while I was absent to reinstate him, but I find that no such action has been taken. I was surprised to learn a day or two ago that he had been called up for military service, had been passed by the military medical examiner, and ordered to carry out his military duties, which involves going into camp when the time comes. I submit that if he is fit to do military service for the country he is fit to do civil service for it.
– He may be doing military service to improve his disability.
– That is possible; but it seems to me that something is seriously wrong when an athletic young fellow, such as he is, is debarred from entering the Public Service, but is sent to do military service. If he has a chest complaint it will do him no good to be in camp sleeping on the damp ground, and undergoing the hardships of camp life. He has not had fair treatment, and I hope that the Prime Minister will take steps to have his case reviewed.
.- I urge upon the Government the necessity for giving serious consideration to the present unsatisfactory position of mentallyafflicted soldiers and for liberalizing the conditionsapplicable to them. I was surprised to learn recently that nearly 50 per cent, of the mentally-afflicted soldiers in Western Australia were under the care of the State Government. I presume that the same position exists in other states. I take it that this is so for the reason that the ordinary provisions of the Repatriation Act are made to apply to mentally-afflicted soldiers as well as to others. It is well known that many members of the Australian Expeditionary Force were subjected to conditions of living and to temptations through drink and other things which they would not have had to face had they remained in civil life. I trust that in these circumstances the Government will liberalize the conditions under which mentally-afflicted soldiers are controlled, and accept full responsibility for their maintenance and welfare.
– A careful examination is always made’ of the cases of mentallyafflicted soldiers, and a liberal interpretation is given to the words,war causation of mental diseases.” It is now ten years since the war began, and honorable members must recognize that many causes other than war service itself render ex-soldiers liable to mental diseases just as they are liable to other diseases. Lest there should have been a too rigid examination or any harsh treatment of mentally-afflicted soldiers however, I have requested the royal commission which has been considering the whole question of the repatriation medical examination of ex-soldiers to investigate this matter, and to submit a special report upon it.
.- I ask the indulgence of the Prime Minister while I bring under his personal notice and under the notice of his Government the case of the late George Ritchie, an ordinary seaman on the H.M.A.S. Brisbane, who, it will be remembered, met his death under exceptionally tragic circumstances on the 18th April this year, in consequence of a homicidal attack made upon him while he was asleep bya fellow worker on the vessel, who was employed as a cook or in some similar capacity. The coroner who investigated the circumstances of the tragedy decided that Ritchie was murdered. He was quite satisfied on the evidence submitted to him that the man who was guilty of the attack was known to many of the ship’s company as a dangerous “ homicidal person. Evidence, apparently quite satisfactory to the coroner, was given that he had attacked at least two other men while they were asleep - had struck them with some heavy weapon - and that, in consequence they had been perilously near to losing their lives. Young Ritchie lost his life in the discharge of his duties. I raised the question by correspondence with the Minister, who referred it to the secretary of the Navy Department, In due course, the following letter was sent to the boy’s father -
With further reference to your letter of 20th May, applying for compensation in respect of the death of your late son, Ordinary Seaman George Ritchie, I am directed to inform you. that compensation ia payable under regulations only to a deceased member’s widow or to persons who were dependent on him for support.
It does not appear from your letter that there were any persons dependent for support upon your son (who was unmarried). I shall be glad, however, if you will give full information on this point, and’ if there was any dependancy, state the relationship and extent to which dependants were supported by him. This information iB desired in order that your application may be considered by the Naval Board from every aspect.
I take no exception to that letter, because it appears to have been designed to strain the regulations as far as possible to allow of compensation being made to the relatives of this unfortunate youth. His father is a tradesman who was not dependent on his son, but he was no doubt very proud of him, and entertained great hopes concerning him. He probably looked forward to the time when he could, if necessary, look to his son for support, and, in any case, receive from him the comfort that a good son can bring to his parents. Apparently, the department was hampered by the fact that there was no legal ground UPOn which compensation could be granted, the case being .outside the Workmen’s Compensation Acts altogether. Even if it came within the scope Of those acts, the position would not have been very different, because even under those acts a person has to establish dependency and show financial loss. The department now proposes to pay to the father the sum of £50/ and has sent to him a document for his signature, asking him to receive “ a lump sum of £50 as a solatium for the death of my son, the said George Ritchie, subject to my executing these presents.” It is proposed to give that sum “ as an act of grace, and not in any way admitting liability.” I take no exception to that, so far as it goes. I do not ask the department to admit the legal liability, although I consider that a moral liability rests upon it. I recognize that the Naval authorities are confined within the limits imposed by the regulations as’ to dependency, and so on, but the Prime Minister will realize that this youth, who waa serving on board the Brisbane, and had a promising future before him, was stricken down in this extraordinary and unprecedented manner, and that to offer his father £50 “ as a solatium” is really contemptuous. We all realize that no payment can compensate the father for the loss of his son, but when we discuss this matter-, on the basis of finance1 - which is the only basis for discussion which remains - we should, at least, refrain from offering a sum which, in the circumstances, is contemptuous, and calculated to make the wound rankle rather than to heal it. I put it to the Prime Minister that the amount paid should, in some slight way, be expressive of the sense of loss that the boy’s parents have sustained, and I leave it to him to say whether he thinks that so trifling a sum as £50 will not tend to aggravate, rather than to heal, the wound that has been caused by the tragic death of this youth.
.- This, morning there was presented to the House a report -by the Joint Committee of Public Accounts in connexion with certain transactions’ between the War Service Homes Department, and the Coopera’tive Estates Company, Hobart. Honorable members will remember that some time ago, I moved the adjournment of the House for the purpose of having this matter investigated by the Public Works Committee. There was some difficulty in the way of that committee making the investigation, and for that reason the Joint Committee of Public Accounts undertook the work. Now that the report, has been presented, I om not quite certain as to the subsequent procedure to be adopted, but I understand that the report will be considered by Cabinet. The recommendations which have been made vindicate the attitude I took up in this matter. In view of the fact that it has been dragging on for a long time, I ask the Prime Minister if he will, without delay, announce to the House whatever determination the Government arrives at.
– Regarding thecase brought forward by the honorable member for Adelaide (Mr. Yates), I shall have investigations made to ascertain the facts. We are all, of course, extremely sympathetic -with the position of the parents of the unfortunate young seaman referred to by the honorable member for Batman (Mr. Brennan). The case was very fairly stated by the honorable gentleman, who pointed out that under no act was the Government liable to pay compensation in connexion with the death of the youth referred to. It is merely a question of whether the Government is prepared to make a payment as an act of grace. I shall look into the matter tosee. whether anything further than the offer already made can be done. I assure the honorable member for Denison (Mr. O’Keefe) that the earliest opportunity will be taken by the Government to consider the report to which he has referred. ‘
– Will it be considered before theHouse goes into recess?
– I trust so,but, as the honorable member knows, we shall be meeting every day next week, and this is a matter for Cabinet consideration.
Question resolved in the affirmative.
House adjourned at 4.19 p.m.
Cite as: Australia, House of Representatives, Debates, 3 October 1924, viewed 22 October 2017, <http://historichansard.net/hofreps/1924/19241003_reps_9_109/>.