12th Parliament · 1st Session
Mr.Speaker (Hon. Norman Makin) took the chair at 2.30 p.m., and offered prayers.
– I ask the Treasurer if he is aware that the Commissioner of Land Taxation has required owners of country lands in New South Wales to supply “within fourteen days” particulars, for the last ten years, of stock carried, purchases, sales, shearing tallies, stock on agistment and fencing, buildings, water supplies and other improvements effected
– I have no knowledge of such a demand, but I shall make inquiries and lei the honorable member have a reply.
– Has the Minister for Home Affairs any comment to make on the article published in the Canberra Times of to-day, under the headings -
Penaltyfor War Service
Order to Canberra Police
– I have seen the political and vindictive attack upon me; it is characteristic of the Canberra Times. In view of the gross misrepresentation it contains and in anticipation of questions relating thereto, I have prepared the following statement : -
– On a point of order. The Minister hasannounced that he proposes to make a statement. To comply with the Standing Orders, should he not ask leave of the House to do so?
– I must sustain the point of order. Is leave given to the Minister to make a statement on the subject of unemployment relief in Canberra ?
Honorable Members. - Hear, hear!
– by leave - Upon assuming office the Government made No. 4 camp available to the travelling unemployed; there water, sewerage. wood, and light are provided, lt is probably the best unemployed camp in Australia, and I invite honorable members to inspect it at any time. Incoming and outgoing rations on a liberal scale are given. Recently the Government, of New South Wales refused to issue rations to any travellers who were temporarily camped within the Federal Capital Territory, and I was confronted by about 130 men who were in dire need. They were suffering, and I placed them upon the Canberra ration list. The camp was made available only to those who were in need, and was never meant to bc used by those who had an income. I was advised, however, that amongst the inmates were men who were not in want, and were in receipt of income up to £2 a week; these men were occupying space at the camp, and were receiving relief. I then gave instructions that the- New South Wales regulations restricting the relief to be given to those in receipt of income and applying for rations should be generally applied, with the qualification, however, that .1 would personally investigate any such case. In New South Wales, the military pensions of applicants for relief, and of members of the same family as the applicant, are taken into consideration before rations are granted. This practice is not strictly observed in the Federal Territory, but each case is separately considered. Owing to the fact that accommodation is available in the camp for only 130 men, and that the camp is reserved for those in dire need, this restriction was applied. Three cases have already been referred to me, and are now being investigated. An interim report shows that one man is in receipt of a war pension of 8s. 6d. a week, and has not been refused ration relief. The other two cases are being reviewed. I . assure honorable members that the Government is not only caring for the unemployed residents of Canberra, but is doing more than its fair share to relieve the State of New South Wales of its responsibility for travelling unemployed. Up to 1,300 rations monthly have been issued to travelling unemployed by the Commonwealth Government. Large quantities of clothing during the ‘ last eighteen months have also been distributed, and as further material, including military stores, becomes available, this practice will be continued. From the foregoing facts it will be seen that the newspaper report is a gross misrepresentation of the facts.
– In assessing the incomo of an unemployed person in a Canberra camp is his war pension taken into account?
– That question is already answered by the statement I have made.
– Will the Minister state how many returned soldiers in the unemployment camp are in receipt of an income of £2 a week ? Is ho aware that onethird of the war pensions do not exceed 5b. 3d. weekly!
– I have nothing to add to the information I have already given to the House.
– I ask the Minister for Home Affairs .whether, when appeals for financial assistance are made to his department by war pensioners, it is the practice to regard war pensions ‘ as income?
– If the honorable member peruses the statement that 3 have just made on this subject, he will see that I have said that war pensioners in receipt of 8s. 6d. per week have not been refused relief rations. He will also see that two cases are under review.
– That is not an answer to my question.
– I ask the Minister for Home Affairs whether he still adhere* to his recent statement that the unemployed are treated more liberally in Canberra than in New South Wales, seeing that we have now been informed that returned soldiers in receipt of a pension of 8s. 6d. a week have been refused relief rations in Canberra, whereas in New South Wales they may obtain rations if their pension is not in excess of 10s. per week?
– I can understand the Canberra Times . publishing a statement which grossly misrepresents and distorts the conditions applying to the granting of relief rations in Canberra, when I find that in spite, of the statement I made a few minutes ago, an honorable member of this House can still say that war pensioners in receipt of 8s. 6d. per week have been refused relief rations.
The honorable member has put words into my mouth which I did not use. I said definitely that if war pensioners were in receipt of 8s. 6d. a week they could get nations. The honorable member has apparently refused to accept my statement.
– I was not in the House when the Minister made his statement.
– In that case, I am sorry that I referred to the honorable memberasIdid.
– The Government having decided to appoint and institute a public inquiry into the case of Mr. Jacob Johnson, will the Attorney- General restore to Mr. Jacob Johnson his do.cumen,ts, so that he may be able to present his case adequately to the tribunal ?
– Any documents which are in the possession of my department, and to which Mr. Johnson is entitled, will be made available to him. All necessary facilities will be given by the Crown Law Department to enable Shim to present his ease adequately.
– As part of the economy scheme designed to rehabilitate Australia, interest rates on bank deposits of all kinds, and on all bank loans, overdrafts, and advances, are to be reduced. I understood from, a statement that was made in this House by the Treasurer (Mr. Theodore) that the banks had promised thatthat would be done. Has the attention of the honorable gentleman been called to the following statement that appeared in the financial columns of the Melbourne Argus of the 11th instant, and is attributed to the chairman of the Associated Banks of Victoria, Mr. G. D. Healy : -
A generally applied 1 per cent. reduction of the overdraft rate would eat up £202,500 of the bank’s earnings. The bank states that neither from the point of view of the stability of the bank, norfrom a profit andloss outlook, is it preparedtoface such a sacrifice. “But”, it adds, “we are willing at all times to considerneedycases, and we are willing also that overdrawn customers shall receive the benefit of the outgoing”..
Does not the honorable gentleman regard that as a breach of faith on the part of the AssociatedBanks. of Victoria, in view of the fact that the public creditors are making such a great sacrifice to assist Australia ?
– The matter referred to by the honorable member is still receiving consideration, and is now the subject of negotiation between the Government and the banks. The Premiers Conference appointed a special committee to consult the associated banks with regard to a reduction in the rate of interest on loans, overdrafts and advances, and as a result of the negotiations that followed, a report was submitted to the conference, recommending a reduction which was the equivalent of 1 per cent. on the existing bank deposit rate and the rates charged on bank loans, overdrafts and advances. That recommendation was accepted by the conference, and became part of the plan. The Chairman of Directors of the Commonwealth Bank was to take up the matter with the savings banks and the trading banks to decide how and when the reduction should be put into operation. Correspondence has been passing between the Government and the Commonwealth Bank, and conferences have taken place between the Commonwealth Bank and the associated banks, but the matter has not yet been determined, and the proposed reduction has not yet been put into operation by all the banks. The Commonwealth Bank and most of the savings banks are operating the reduction of 1 per cent. on their loans and advances, but the procedure is not yet general throughout Australia.
– Has the attention of the Treasurer been drawn to the following paragraph which appears in the Daily Telegraph of to-day : -
The recommendation to ameliorate the difficulty, as proposed by the Gold Delegation of the League is to diminish the unnecessary use of gold as backing for small notes by substituting silver and other metals.
In view of the world swing towards the adoption of the principle of bi-metallism, will the honorable gentleman consider the advisability of taking advantage of the huge profits that may be made - approximately 450 per cent. - by minting a greater quantity of silver coinage?
– I entirely sympathize with the honorable member’s advocacy of bi-metallism.I assure him that I, too, am a bi-metallist, but it appears to me that other countries will have to adopt that policy before we in Australia can make much use of it.
– Pending the amendment of the Sales Tax Assessment Act, will the Treasurer advise whether the Government is prepared to consider extending the time for the payment of the tax from the 21st to the 26th of the month, to meet the convenience of traders generally ?
– The suggestion of the honorable gentleman will be considered. I shall take it up with the commissioner, and see whether it is practicable.
– In view of the answers supplied to my question, to the effect that not one of the 27 Sales Tax Acts provides a penalty for the punishment of any person who superimposes on the prices of his commodities more than the prescribed tax, and as I have been informed that any purchaser so overcharged must look to the vendor for justice, will the Treasurer take steps to insert in any amending legislation to the said Sales Tax Acts a penalty clause providing for the punishment of anybody who is so unjust as to charge more than the prescribed rate of the 2½ per cent.
– I understand that there is some constitutional difficulty which prevents the Commonwealth Parliament from fixing prices or prescribing penalties for overcharging. The point raised by the honorable member might well be considered when the Sales Tax Amendment Bill is being discussed in committee.
– Is the Minister for Trade and Customs aware that recently proceedings were instituted in the Preston court, Victoria, for the foreclosure of a mortgage held by Edward James Holloway and Maurice McCrae Blackburn, acting as trustees for a Russian building syndicate? Has the honorable gentleman madeinquiries to ascertain whether consignments of Russian timber that have recently arrived in Australia were destined for that or any other Russian building syndicate? If not, will he do so?
– I have no information on the matter raised by the honorable member.
– Will the Prime Minister advise whether it is the practice in governmental departments to take pensions into account when computing the income of employees?
– I do not know to what the honorable member refers. If he will be more specific, I shall be glad to give him a specific answer.
– Will the Prime Minister advise whether the Government is yet in a position to make an announcement regarding the nature of the proposals that are to be submitted to the people by referendum at the next federal election ?
– As that is a matter of policy it cannot be stated in reply to a question.
– Some weeks ago I asked the Prime Minister whetherthe Government was considering the making of a referendum to the people of Australia at the next federal election. The right honorable gentleman replied that: it was, and that an announcement would be made in due course. I now ask whether, before coming to a determination in the matter, the Government will takeinto consideration the views of the various movements that have sprung up in Australia, such as the Riverina, New England and Monaro movements, concerning proposed constitutional alterations in their relation to the creation of new States ?
– I shall be glad to receive representations from the leaders of these movements, and I assure the honorable member that they will receive the fullest consideration.
– Has the attention of the Treasurer been drawn to a summary which appears in this morning’s Sydney
Morning Herald of the report of the Committee on Finance and Industry, presided over by Lord Macmillan? If so, has he noticed the following paragraph in it, which gives the opinion of the members of the committee: -
Some of us take the view that, provided the policy was adopted by central banks generally, this would be the most hopeful attack on the existing depression; but it is stressed that such a policy can only be pursued by all central banks, otherwise the only result will be loss of the gold reserve.
The policy referred to is the policy recommended by the committee. Is the Treasurer in agreement with the view that Australia cannot participate in such a movement until it has a central reserve banking system? If so, what steps does the Government intend to take to enable Australia to participate in this world attack on the existing depression?
– That part of the honorable member’s question in which he seeks an expression of personal opinion, is not in order.
– I have not read the summary of the report published in the Sydney newspapers; but I read the brief summary of it which appeared in the Canberra Times this morning. “We must all agree with the statement in the report that to attack the depression by means of monetary policy requires action by all the leading countries which have central banking systems. It must be generally recognized that before we can cure the existing world-wide depression, action must be taken by more than one country, and, perhaps, by more countries even than those which have central reserve banking systems. As to whether Australia can assist in this attack, or whether it is necessary that in order to do so she must have a central reserve banking system, I point out that we have a central banking system, inasmuch as the Commonwealth Bank functions as a central reserve bank. But, unhappily, because it is also a trading bank, it does not function as a central reserve bank as effectively as it should. The Government desires that ultimately the central reserve bank functions of the Commonwealth Bank shall be separated from the trading bank functions of it, so that each may function unhampered by the other.
asked the Minister for Repatriation, upon notice -
– The figures requested are as follow: -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions areas follow : -
asked the Treasurer, upon notice -
Of the amount of £39,676,537, by which the national debt on account of States increased during the financial year ended 30th June last, what sums are attributable to the several States respectively?
– The amounts of increase for the individual States are -
asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
What was the cost, of overseas delegations to conferences, &c, for each of the years from 1925 to 1930, inclusive?
– The cost to the Commonwealth of delegations to overseas conferences, &c, from 1925 to 1930 was as follows : -
Industrial Mission to the United States of America ( 1 927 ) . -£6,1 15.
International Labour Conference. - 1925, £1,370; 1926, £1,076; 1927, £909; 1928, £1,035; 1929, £2,093; 1930, £1,483.
League of Nations Assembly. - 1925, £3,117; 1926, £3.480; 1927, £3,468; 1928, £3,883; 1929, £4,079; 1930, £3,481.
Naval Disarmament Conference (1930). - £2,239.
Imperial Conference. -1926, £10,663; 1930, £8,171.
The cost of representation at certain minor conferences for the years 1925 to 1930 is not readily available, and could not be obtained without a detailed examination of the accounts of the PrimeMinister’s Department, necessitating a considerable expenditure represented by the salaries, &c, of officers.
asked the Prime Minister, upon notice -
– The answers tothe honorable member’s questions are as follow : -
asked the Minister for Trade and Customs, upon notice -
Mr.FORDE. - The answers to the honorable member’s questions are as follow : -
asked the Treasurer, upon notice -
Whether, in view of the prevailing distress, and the necessity for taxpayers to maintain relations or friends at some financial cost, he will consider allowing such payments to he treated as deductions from the income tax schedule?
– Certain deductions are allowed in respect of the wife and children of a taxpayer, but it is not practicable in present circumstancesto allow deductions in respect of other relations or of friends.
asked the AttorneyGeneral, upon notice -
On how many days, since 1st February last, have (a) the Full Court of the Commonwealth Arbitration Court and (b) single judges of that Court sat for the hearing of matters?
– Since 1st February last, the sittings of the Commonwealth Oourt of Conciliation and Arbitration were as follow: - Full Court, 44 days; court constituted by a single judge, 47 days.
– Yesterday, the honorable member for Kooyong (Mr. Latham) asked me, without notice, when the unemployment statistics for the quarter ended 30th June last would be made available to honorable members. I then stated that the honorable member would receive the information to-day. I regret that, on inquiry, I find that the particulars will nothe available until the beginning of next week. I shall advise the honorable member as soon as the information is available.
The following paper was presented : -
Sales Tax Assessment Acts (Nos. 1 to 9) - Regulations amended - Statutory Rules 1931, No. 87.
Bill returned from the Senate with amendments.
In Committee of Ways and Means:
– In lieu of the first sales tax motion, which I moved on Friday last,I now move -
That in lieu of the rates of tax imposed by the Sales Tax Acts (No. 1) 1930 there be imposed sales tax at the rate of six per centum upon the sale value of goods manufacturedin Australia bya taxpayer, which are sold by him or applied to his own use on or after the eleventh day of July, One thousand nine hundred and thirty-one, or treated by him, on or after that date, as stock for sale by retail.
– I suggest that theTreasurer (Mr. Theodore) should ask tbe leave of the committee to withdraw the motion he moved on Friday in order that he may move that which he has just submitted to the committee. It appears to me that if any other procedure is adopted confusion is likely to occur.
– I am advised by the Crown Law Department that unless the procedure which I have adopted is followed, the provisions of the motion which I moved on Friday may be vitiated, with the result that the tax cannot be made to apply from Saturday last, as was intended. If the first motion is withdrawn legal difficulties may be caused. It may be that we are establishing a practice with regard to sales tax resolutions similar to the practice which we follow in connexion with customs resolutions. I shall be obliged if honorable members will not at this stage raise any objection to this procedure.
I should liketo know whether the committee would prefer me to make my speech on the bill at this stage, or on the motion for its second reading. As this is a matter for consideration in the Committee ofWays and Means, it may be advisable forus to follow the cus tomary practice, and discuss the subject now with the object of curtailingthe debate on the later stages of the bill.
– We require details of the bill.
– We are now on the rates resolution, and there can be further discussion on the assessment hill. The course being followed will not deprive any honorable member of the right to discuss the measure. ‘ It may be more convenient to have the general debate now.
– Will that not take up more time?
– Discussion, I presume, will take place at some stage, whether in considering the present motion, on the second reading, or in committee. If we have the discussion at this, the earliest stage, we may meet the convenience of all members.
– The effect of the adoption of the motion before the committee will be to alter the rates of the sales tax. That is an important subject which, of course, will engage the attention of the House; but, in the Sales Tax Assessment Act, certain amendments are to be made, as indicated in the budget speech of the Treasurer. I should think that quite a number of honorable members will have received communications from trading associations of one kind and another, suggesting further amendments, and, until we see the bill for the amendment of the Sales Tax Assessment Act, we shall not know exactly what the proposals of the Government are in relation to the sales tax. The present resolution in committee must be followed by a rates bill. I suggest that the time of the committee and the House would be saved if this resolution were allowed to go through, and the Treasurer then introduced the amending assessment bill, and thereafter the rates bill. We could then discuss the details of the amendments in the assessment bill and the rates bill on one occasion.
– I appreciate the suggestion of the Deputy Leader of the Opposition (Mr. Latham), but, unfortunately, the assessment bill will not be ready fpr presentation until to-morrow. I propose to give a general survey of the operation of the sales tax, and the increase now proposed. At the same time, I shall refer to the exemptions and the reasons for them. This will permit’ of a general discussion on any points that honorable members may desire to raise in connexion with this legislation. In dealing with the assessment bill, reference will be made to some of the proposed amendments, which can be more fully explained in the committee stage.
I remind honorable members that the sales tax has been in operation for only about a year. It was introduced for the first time in Australia when a tax at the rate of 2£ per cent, was placed upon the sales value of taxable goods. “ Taxable goods “ were defined in the acts as being goods imported into, or manufactured in Australia, and not specifically exempted. In saying that, I give, not the text of the definition, but its general effect. The exempt goods under the scheme of the acts now in force fall under four or five separate headings. I refer to these because we have to give consideration to the principles to be followed in the matter of exemption. The practice adopted last year is, I think, sound in principle. We exempt basic foodstuffs, primary products, and certain goods used in primary production, such as containers for the marketing of primary produets, fertilizers, and materials for the.manufacture of fertilizers. The exemptions also cover certain goods and substances used in mining and secondary industries, and certain goods upon which, special revenue duties of customs and excise have been imposed. There is justification for exemptions under one or other of these heads, and, in the new proposals, we observe the same principles, although we enlarge the list of exemptions. I shall refer later to the additional list of exemptions which will be included in the new measures.
The general scheme of. the sales tax is to tax, at the time of entry at the customs, all goods imported by any person for retail sale, or for his own use, and to tax all sales in Australia made by a manufacturer or wholesale distributor. Th, tax payable at the customs is paid on the sales value which consists of (a) ibc value for duty; (&) the duty; and (c) 20 per cent, added to this value. There has been a controversy on the question whether the charging of 20 per cent, added value to the import value, plus duty, is fair; but it is claimed that the adding of 20 per cent., where the- tax applies on the entry of the goods at the customs, is reasonable, and no more than necessary to make up the wholesale value of the article imported, in most cases representing far less than the average added value when the goods pass from the hands of the merchant for sale to his customers. The sales tax which is not collectable at the customs is usually payable by the manufacturer or wholesale merchant on the prices at which he sells the taxable goods. In the case of goods which are treated as stock for sale by retail, the tax is paid on the fair market value at the time of manufacture.
It was estimated that the sales tax would be payable on a total sale value of about £240,000,000. A tax of 2i per cent, on that for one year would have been £6,000,000, arid it was estimated that a revenue of £5,000,000 would be obtained in the last ten months of the last financial year in which the tax was payable. The actual taxable field proves to be about £160,000,000 on a twelve months basis. The total sales of taxable and exempt goods on a twelve months basis amount to approximately £345,000,000, consisting of £160,000,000 taxable sales, and £185,000,000 exempt sales. These figures are rather significant as showing that, on the returns to the Taxation Department, more than 50 per cent, of the sales of goods handled by registered manufacturers and wholesalers, and others making returns, are goods that are exempt under the provisions of the existing law; but, in addition to these exempt goods, there are other sales which take place in the community, and do not figure in these returns at all. There is a great volume of primary products, export goods, and goods sold by manufacturers who are not registered persons. The grand total value of these is roughly estimated at over £400,000,000. Therefore, we really collect a tax on about £160,000,000 worth of taxable sales, whereas there are sales amounting to more than £600,000,000 on goods in Australia that are exempt. These figures must be kept in mind by honorable members when they are calculating the effects of the Sales Tax Acts, and when advocating the enlargement of the exemption list.
– What is the reason for the estimate of £240,000,000 when the actual taxable field amounts to £160,000,000?
– At the time when the estimate was made last year, there were no certain data on which to work; the Commissioner of Taxation had the figures computed by the Commonwealth Statistician, and they were gathered from various sources of production. The disparity in the figures was proved to be due either to an over-estimate of the total sales, or an under-estimate of the value of the exemptions. The estimated revenue from sales tax for 1931-32 at the proposed new rate is £8,500,000. The sales of taxable and exempt goods represent, speaking generally, the total wholesale trade of the Commonwealth, together with retail sales by manufacturers of goods, other than exempt primary produce and the export trade. The operation of the sales tax is controlled very largely by means of the quotation of certificates of registration. All manufacturers and wholesale merchants are required to be registered. These persons are the taxpayers under the act in respect of goods sold in Australia. The tax is payable on the sale price of the goods. Accordingly, when a manufacturer obtains raw material to be fabricated into finished goods, or a wholesale merchant purchases or imports goods for resale, the act entitles him to obtain those materials without any charge for sales tax. The manufacturer or wholesaler is accordingly required by the sales tax regulations to quote his certificate when importing or purchasing the goods mentioned. That importation or purchase is not subject to sales tax. Registered persons, that is, registered manufacturers or wholesale merchants, are forbidden to quote their certificates when they are importing or purchasing goods which are not for resale, either in the condition in which they are obtained, or after having been fabricated into other goods. The scheme of quotation of certificates has been used as far as possible to place wholesale merchants, whose principal sales are by retail, upon the same basis as regards their retail sales as a person who sells exclusively by retail. The exclusively retail merchant is not taxed on his sales. Therefore, when he imports goods, or purchases them locally, the importation or purchase is subject to tax. The retailer, being the importer, pays the tax at the Customs, while tha vendor to the retailer is the taxpayer who, probably, passes on the tax to the retailer. The whole scheme of quotation and non-quotation of registration is described in detail in the sales tax regulations. It may be added that this method of regulating the operation of the sales tax was introduced by the Canadian legislature, and was copied into the Commonwealth sales tux acts.
At first the requirements regarding the quotation of certificates gave rise to 80Jue litttle inconvenience to traders, but it is thought that the arrangements made by (he department to meet commercial difficulties are now working smoothly. Considerable trouble was experienced, and discontent manifested, by traders regarding the necessity for them to pay sales tax on sales of stocks on hand on the 1st August, 1930. Honorable members of this House have been bombarded with correspondence and telegrams asking that such goods be exempted, because they were manufactured before the 1st August, the tax to be payable only on goods which were acquired after that date. This claim is based on the fact that retailers were not taxed on sales of stock which they had on hand on the 1st, August, 1930. The claim could not be conceded without reducing the yield of the tux by approximately one-half.
The- basic principle of the law is to tax goods imported into Australia, on and after the 1st August, 1930, and goods sold in Australia on and after the 1st August, 1930, irrespective of the date when they were produced or acquired. The same objection is being raised now that the rate of sales tax has been increased to 6 per cent. The traders concerned claim that the higher rate should not apply to their stocks on hand on the 11th July, 1931. It is not possible to allow this claim without incurring such a heavy loss of revenue’ that it would be necessary to increase the rate of tax very greatly above 6 per cent.
The Government proposes to incorporate in the Sales Tax Assessment Act a provision analagous to that expressed in section 152 of the Customs Act to permit of any alteration in the rate of sales tax being adjusted as between a vendor and purchaser as may be required, so that the vendor may recover from the purchaser any increase in tax, or the purchaser may obtain relief on account of any reduction in the rate.
– That was moved last year as an amendment to the Sales Tax Act.
– That is true. The amendment was moved by the Leader of the Opposition, and was, after consideration, rejected. Associated with this provision will be one in which the amount of sales tax payable by a vendor in respect of any goods shall be shown as a separate item on the invoice for the goods. That proposal was also included in the amendment moved by the Leader of the Opposition last year, and experience has shown that it would be well to give it a trial.
– Will it be mandatory ?
– Yes. There was a doubt as to the validity of the proposal. The matter has been gone into fully by the Crown Law authorities, and the Commissioner has advised that the requirement is not likely to be challenged, or if challenged, not likely to be disallowed. It is, therefore, proposed to incorporate the provision in these measures. The proposal does not give complete satisfaction. There are a great many objections to it, particularly on the part of the retail traders. Only last week a deputation representing the Retailers Association waited upon me in Sydney to protest against the alteration. The provision will require a taxpayer, who now must pay sales tax at the rate of 6 per cent., to invoice the amount of the tax separately to the purchaser. Many traders have complained of the absence from the law of such provision, and have pointed out that the effect upon prices has been very undesirable in many instances, while in others it has led to cutthroat competition through the absorption of the tax -by those financially strong traders who have been able to carry the burden of the tax, to the serious financial embarrassment of their weaker competitors.
The matter of charging the tax as a separate item on the invoice was brought up for discussion at the recent Premiers Conference in Melbourne, and the Prime Minister, in response. to a request of the
Premier of Tasmania, promised that he would have the matter looked into. We have since arranged to amend the act in the direction required.
– I moved an amendment to that effect last year.
– That is so. The amendment was considered and rejected, but experience has since proved the wisdom of reconsidering the matter. Of course the matter is still open to discussion, and no doubt some will be against it, and some in favour of it, when
Ave deal with it in committee.
– Is it to be compulsory that the amount of tax shall be entered on the invoice?
– According to the present proposal it will be. The committee, ‘however, will determine whether or not that proposal is retained. Those who favour the alteration appear to be divisible into three main groups. First. there are the manufacturers and wholesalers, who aim at being entirely relieved of _ the burden of th& tax; secondly, there are the vendors, whose practice - perhaps necessarily owing to the exigencies of their business, or the manner in which their businesses ‘ are conducted - is to fix their prices without any reference to sales tax, and who find themselves unable to collect the tax from purchasers when it is added to the agreed prices; and thirdly, purchasers who have reason to believe that where sales tax is undisclosed, more than the statutory percentage is added. It was ostensibly to prevent victimization of the last mentioned class that the Queensland Government, by proclamation under the Profiteering Prevention Act 1920, made it compulsory for every manufacturer and wholesaler selling goods to which the act applies, and which are subject to federal sales tax, to show the sales tax as a separate item at the foot of each invoice, such separate item to be included in the total amount of such invoice. When the proposal was mooted last year, representative retailers very strongly opposed it, on the ground that, although the whole of the tax would inevitably be passed on to the retailers, it would not be possible for them to pass on a large proportion of the tax to the public, because the prices of a large pro portion of the goods sold by them were below a price at which it was practicable to add the statutory percentage of the sales tax. This was one of the points stressed by the deputation which waited upon me in Sydney last week. It was pointed out that many proprietary lines, such as bars of chocolate, &c, were sold at a penny each, and that it would be impracticable to add a ^fraction of a. penny to the price to cover sales tax. The situation could be met only by the manufacturers altering the wholesale price, . by reducing the amount of chocolate, or altering its quality. That objection applies to a great many articles handled by large and small retailers, articles of small value sold at from id. to 6d. In many instances the price of these articles is fixed by the manufacturer. They are proprietarylines, on which a fixed price may be chargeable, and the public who have be- cou.12 accustomed to paying that price would refuse to pay a higher price. That is one of the practical difficulties which we encountered in making this change.
– Why make the change?
– Because those whom we consulted are in favour of it. I do not wish to overlook any difficulties in the way of administering this tax.
– Is the seller being given power to sue for the tax as well as for the price of goods?
– Yes. That power is being incorporated in the bill, and is associated with the proposal to mention the sales tax on the invoice. Another objection raised by the retailers is that in very many instances they were able to obtain goods from the manufacturers only on condition that they sold at prices fixed by the manufacturer - in many cases before the inception of the sales tax. A still further objection is that large quantities of materials, wrapping papers, string and the like, had to be purchased although they were not. re-sold to the public. In all these matters I have informed the representatives of the Retail Traders’ Association, whom I met on Monday, that any agreement that they could come to with the manufacturers and the wholesalers as to what practice should be adopted, would be a guide to the Government in settling the details of this legislation. If there could be agreement among the principal retail associations of Australia, and the organizations of manufacturers and wholesalers, we could accept that settlement as being satisfactory to everybody concerned. I do not know whether it is possible to obtain such an agreement. I know that in some quarters it is suggested that a compromise should be arrived at, making it optional to the wholesaler and manufacturer to state on the invoice the amount chargeable as sales tax. I should like an intelligent discussion to take place on this subject when the bill is in committee, so that the Government may have some guide as to what practice to adopt. This is not a question of embodying in this legislation a party principle or any set government policy. We are to some extent groping in the dark, and we shall be guided by the best advice obtainable on this subject. This morning I received from the chairman of the Wholesale Softgoods Association, a telegram, which is typical of the communications that we have received from a number of wholesalers and manufacturers. It reads -
Amendment of sales tax immediately hy compulsory clause adding sales tax separately all invoices recommended unanimously by all softgoods wholesalers as being best method, and if adopted now will end all controversy. This method already working satisfactorily two States. Any other method will increase depression in our trade and bring about further closing down and unemployment. Retailers are anticipating trouble. That will not arise when method fully explained.
The Wholesale Softgoods Association is apparently quite optimistic about the smooth working of the new principle, and if its belief is correct we need not anticipate much trouble in this direction.
I come now to the exemptions from the sales tax. The exemptions which were announced in the budget speech will be incorporated in the schedule of exemptions in the relevant Sales Tax Assessment Acts by means of bills to amend those arts in this and other respects. I shall refer to these exemptions so that in the general discussion some attention may be given to them. The Government has, of course, received many requests for exemptions, from honorable members, from various associations and industries, and. from other quarters. Consideration will be given to those representations, but I warn honorable members that, in some instances, it is not possible to grant exemptions which they think should merit the sympathetic consideration of the Government, because, if we granted all the exemptions asked for, we would not obtain the revenue that we expect to collect by means of a levy of 6 per cent, on all taxable sales. The additional exemptions mentioned in the budget speech are as follow: -
Australian timber used in mines in similar manner to imported Oregon, used for mines; value not shown.
Chaff bags, imported; valued at £205,637.
Charcoal, coke, firewood, for all purposes; value not shown.
Kerosene for all purposes; valued at £900,000.
Crude oil and fuel oils for use in the production of power.
Crude tar, when purchased for use as a fuel by a registered manufacturer, or applied by a manufacturer thereof as a fuel used in the manufacture of goods for sale.
Fauna for public zoos.
Goods imported into and goods purchased in Australia by a government of the Commonwealth or a State, if the Commissioner is satisfied that the goods are for the official use of a department of that Government, and are not for re-sale or distribution by any person, organization, association or other’ body, which is not completely controlled, or the expenditure of which is not completely borne by that government. Estimated sales to State departments, £13,200,000; tax, £792,000.
I might explain that the goods referred to in this item are, specifically, goods to be used by a State or a department of a State, and are not goods purchased on , government account for use of semigovernmental institutions, such as fire brigades, ambulance associations and other bodies of that kind.
– What about municipalities?
– There are certain exemptions in respect of municipalities. The exemptions under this item are strictly limited, because if that were not so, we should take out of this taxable field an enormous quantity of saleablegoods that are in use by charitable institutions, such as hospitals, and would, therefore, make a tremendous inroad upon our revenue. Other exemptions are -
Metal, gravel and sand for road-making, produced or purchased by a local governing body ; value, £93,000; tax, £5,580.
– Does road-making include sidewalks and kerbing?
– Yes ; this item relates to material for road construction purposes taken out of quarries, or purchased from quarries, by local authorities. Other exemptions are -
Power alcohol produced in Australia, and mixtures, produced in Australia, of petrol and power alcohol.
Ships and power-driven vessels of over 1,000 tons register.
Stud livestock imported into Australia; value, £37,727; tax, £2,263.
Works of art for free and continuous public exhibition.
In addition to the commodities mentioned in the budget the Government decided some time ago to exempt bibles, and also imports from Norfolk Island to the value of about £13,000 a year. The total sale value of the articles I have mentioned is £14,438,778, on which the tax would amount to £886,326, but the actual amount exempted is a great deal more, because regarding many of the items we have no statistical information. We ask Parliament to validate also, the exemptions tentatively allowed by regulation to certain goods to which exemption is already allowed under the Customs Act. They include -
Articles imported by, or purchased in bond for the official use of, the Governor-General or a State Governor, and declared as being for such use.
Articles imported for official use by representatives of governments of countries and consuls representing other than British countries, provided that the consuls are citizens of the country they represent, and are not engaged in any other trade or profession.
Articles and personal effects owned and imported by members of the consular or diplomatic services, or trade commissioners and their staffs, who are nationals of the countries they represent, and who are not, and will not be, engaged in any other business, occupation, or profession during their residence in Autralia, provided such goods are imported within six months of the arrival of the officials concerned or within such further time as the Minister for Trade and Customs may allow.
Australian products exported and then reimported subject to such conditions as may be prescribed.
Gold coin, and gold bullion, and gold recovered from crushing, washing, dollying or sweeping, imported for treatment by the Royal Mint.
Goods, secondhand, owned by residents in the Territories of Papua and New Guinea sent to Che Commonwealth for repair and immediate return to such territories.
Trophies won abroad as prescribed by customs by-laws.
We propose to add Australian wines to the list of exemptions. In the original scheme of sales taxation we exempted certain goods which were subject to special duties of customs or excise. For instance, beer was exempted, because it pays an excise revenue duty; wine also pays excise, and because of that impost may reasonably be excluded from the operation of the sales tax. This exemption means surrendering about £75,000 worth of revenue.
– What about canned fruits and jams?
– The honorable member and others, have made representations to me in -favour of the exemption of canned fruits and jams, but if we extend the list to include goods of that kind heavy inroads upon the sales tax revenue will occur.
– It is better to have cheap jam than cheap wine.
– I do not think that I should be called upon to engage in a controversy on that subject. The consideration which has weighed with the Government is that wine is already subject to a special impost by way of excise duty; canned fruits and jams are not, and if we placed them upon the list of exemptions, we would take out of the taxable field an enormous volume of goods. Canned fruits, for instance, represent a value of about £1,500,000.
– The Treasurer said that the Government would exempt basic foodstuffs; to-day the great majority of people are living on bread and jam, which are basic foodstuffs.
– Due consideration has been given to the representations of the honorable member and other honorable members. It is extremely difficult for a Treasurer to determine what commodities should be taxable, and what should be exempt. I have endeavoured to adhere to the basic principles which I have defined. Those principles were the basis of the original legislation, and we are extending the application of them now.
Certain amendments to the Sales Tax Assessment Acts ‘will be necessary, and the bills will be presented as soon as they are ready. Experience lias revealed certain defects in the existing law, and we are endeavouring to remedy them and secure a smoother working of the sales tax law. “We should not, however, regard this tax as permanent. I should be sorry to think that we shall have to continue it for an extended period.
– It will be a most unusual tax if it is not continued.
– I hope that it will be one of those unusual taxes that live for only two or three years. It is not the sort of impost that a government delights to impose. It is indirect taxation that falls upon the consumer and applies equally to those who have ability to pay and those who have not. It is not a tax that can be scientifically regulated to ensure that its incidence will operate equitably throughout the community. I hope, therefore, that the .finances of the Commonwealth will so improve in the next few months that by this time next year the Government will be able seriously to consider the lifting of the tax, or at any rate, its reduction. I shall be glad to listen ito honorable members’ criticism and examination of this proposal, in the hope that, by the co-operation of honorable members on both sides of the committee, we shall produce the most workable and equitable scheme that is possible with this form of taxation.
.- The motion before the committee DrOposes to increase the sales tax from 2-J per cent, to 6 per cent., and, if adopted, will cause a heavy increase of the taxation upon the community. -generally. This tax is being imposed, not because any one thinks that a directly beneficial object will be achieved by it, but solely because the obtaining of additional revenue is essential. I have sometimes thought that the charge which the sales tax lays upon the community is not adequately understood. For instance, in respect of imported goods, the tax is chargeable upon the wholesale value, and this 6 per cent, will apply to an amount made up of the price f .o.b. at the port of export, plus 10 per cent., plus 20 per cent. The tax- will amount to 8 per cent, on the landed price of goods, and, as merchants make a practice of charging a certain rate of profit on the whole of their outlay, the. result will be a considerable increase in the price of many goods.
In the preliminary discussion on this matter, the Treasurer referred to the introduction of the practice of making the sales tax applicable from the date of the introduction of the motion, instead of from the date of the passing of the act. That has been the practice in connexion with customs tariffs for many years; its application to them is obviously justified, but I view with hesitation and distrust the innovation of allowing ordinary taxation, to be collected from the day on which a motion is tabled in the House. Generally speaking, taxation should become operative only when it has been approved by Parliament. In respect of customs duties, there are special reasons for departing from this principle; there may be large quantities of goods in bond which could be cleared before the additional duty could be collected, especially as often a great delay occurs between the tabling of a tariff resolution and the approval of the schedule by Parliament. But it is open to grave question whether equally sound reasons apply in respect of sales tax. Yet this tax is being collected at the Customs Department, and private individuals are already passing on the charge before the impost has been validated by Parliament.
– Of course, if Parliament did not validate it we should have to refund the amounts that have been collected.
– That is so; but w<* must recognize that the sales tax applies to transactions between individual traders. Sales tax is . added to the sale price in a transaction between A and B; if A has to pay 6 per cent, sales tax because a certain resolution has been proposed, he passes the additional charge on to B. Should Parliament not subsequently validate the proposed tax an equitable adjustment between A and B may be very difficult. .In respect of customs duties, the transaction is between the Government and a member of the public, and the considerations incidental to a sales tax do not apply. I suggest, therefore, that the House should not accept as a general principle the collection of a sales tax from the date of the tabling of the motion.
– Does not the same principle apply when the importer in required to pay higher customs duties a3 soon as the motion is tabled in committee, and passes that charge on to his customers?
– I have already pointed .out the distinction between a customs duty collected by the Government from an importer, and taxation which applies to transactions between individuals; in the latter case, if Parliament did not subsequently validate the tax, an equitable adjustment would be very difficult. Moreover, this procedure does not seem so necessary for the protection of the revenue in connexion with « sales tax, as it is in respect of a customs tariff. As a matter of fact, the trading community has known for many weeks that the sales tax would be increased, but there is not that opportunity to evade the tax that is presented by the removal of large quantities’ of goods from bond prior to the operation of an increased duty
Honorable members and the public would have welcomed some indication from the Treasurer of the cost which this tax imposes upon the community, not only directly, but also in connexion’ with administration. What is the collection of the tax costing? How many more officers Lave had to be employed, and can any estimate be made of the additional work and burden imposed upon the trading community by the necessity for complying with the requirements of the act. in respect of millions of transactions? I should think that the sales tax would be a particularly expensive one to collect as compared with, other taxes.
– Only yesterday I answered a question to the effect that the actual cost per cent, of the collection of sales tax is less than that for collecting income tax.
– I was unaware of that. It certainly is a surprise to me. I had hoped that, the Government would examine the possibilities of getting at least some of the additional revenue that is needed by reducing customs duties, instead of by increasing the sales tax. We must all recognize that the effect of increasing the sales tax will inevitably be to increase prices, put up the cost of living and, so long as wages are determined in accordance with the cost of living, put up wages without any benefit to the wage-earner. It is time that a careful inquiry was made into the possibility of increasing revenue by decreasing customs duty, without injuring any person in Australia.
The Treasurer intimated that the Government is now prepared to adopt th, proposal that I made last year, requiring the sales tax to be shown on the invoice, and entitling the purchaser to recover it from the person to whom he sells. 1 think that that is a very wise step. 3 am aware, as the Treasurer says, thai there are differences of opinion in relation to it, as there are also differences of interest. I know one very important branch of trade and commerce in this community in which the 2-J per cent, sales tax has reached 6 per cent, in practice by the time the ultimate purchaser has paid for the goods. That is because the sales tax is hidden away in the price. I hope that the Government will adhere to its announced intention to require the sales tax to be shown on the invoice. Trade is already proceeding on those lines in the case of some branches of commerce, and it can proceed perfectly well on similar lines in all branches.
I had hoped that there would be some indication that the Government was prepared to give consideration to the position of retailer-manufacturers in so far as stock in ‘their retail warehouses on the 1st. of August of last year is concerned. This is a fair statement of the position. You have two competitive retail establishments alongside each other, selling similar goods. One man is noi a manufacturer. On the 1st of August last he had his warehouse full of goods, which he has been selling ever since, without their being subjected to the sales tax, because they are sold only in a retail way. The other man is also a retailer, with a similar store and the same type of goods, but in addition he is a manufacturer, and because of that he has to pay sales tax on his goods. T-hat does not appear to be fair. I quite agree that the retailer-manufacturer should not be exempt in relation to all of the stock in his warehouse as well as that in his shop. but as between the two competitors it is very unfair that one lot of goods should be entirely exempt from sales tax, which is charged on the other lot of goods because the seller is a manufacturer as well as’ a retailer.
– A similar anomaly crops up in the case where a retailer had his shelves fully stocked when the tax came into operation, and his competitor had his shelves practically empty at the time.
– I admit that, when a new tax is introduced, it is quite impossible to obtain absolute justice. One can only aim at practical justice in these matters, and I suggest that the case that I have put is of such a character that it would be proper to make special provision for it.
I desire to direct attention to another case, that of a tailor who makes a suit to order and delivers it to a customer. Under the present law the transaction is subject to sales tax, though the customer buys the suit at a retail price. Speaking generally, this legislation charges sales tax only upon wholesale prices, but the tailor making to order in the way I have described is at a severe disadvantage as compared with the large manufacturing house which sells ready-made clothes. The additional charge is a serious matter to suburban and country tailors, in particular. Section 20 of the principal act provides for exemptions of goods - sold exclusively by retail by a person (not being a person who manufactures articles for human wear), whose principal business consists of the manufacture of goods to the order of individual customers.
For some reason, which for the moment I am unable to recall, tailors and others who make to order clothing for human wear have been excepted from the general exemption, while all other persons who make goods to the order of individual customers are exempted from the tax. As the imposition is pressing hardly on some of these craftsmen, I take this opportunity of suggesting that the Government should give consideration to the matter. Some consideration might also be given to photographers, who are charged on the full retail price.
The CHAIRMAN (Mr. McGrath).Order ! The honorable member’s time has expired.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
.- I move-
Thatitis expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Con solidated Revenue Fund a sum for invalid and old-age pensions.
The purpose of the bill is to provide a sum of £10,000,000 from the Consolidated Revenue fund for the payment of invalid and old-age pensions. Similar appropriations are made from time to time, and transfers are made under the authority of the appropriation act to the trust account from which pensions are paid. From the inception of the payment of invalid and old-age pensions in 1909 to the 30th June last, the amount expended for this purpose is £120,798,000. The amount now asked for, together with the balance of appropriation at 30th June, will suffice approximately for the requirements of the present financial year. The bill has no bearing on the rates of pension payable, nor on the provisions of the Financial Emergency Bill now before Parliament, being merely an appropriation of revenue to cover payments of pensions at authorized rates. The amount of the old appropriation is almost exhausted, and it is conjectural whether there is sufficient authority, under the present appropriation, to meet the requirements of the next pension pay-day.
.- This is the normal motion to make provision for funds for the payment of invalid and old-age pensions, substantially for the whole of the coming year. I do not think that any member of the committee has any objection to raise to the bill. If this were a proposal to provide the Government with Supply for the whole of the coming year there might be a variety of opinion on the matter. It is because this is a limited appropriation, only for invalid and oldage pensions, and authorizing the Government to spend the money appropriated only for that purpose that I, at least, have no objection to raise to it.
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Theodore and Mr. Scullin do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Theodore, and passed through all stages without amendment or debate.
In committee (Consideration of Senate’s amendments) :
Senate’s amendment - Add to the preamble the following words: - “And Whereas an agreement has been made between the Commonwealth and the States with respect to the said conversion.”
– I move -
That the Senate’s amendment be agreed to.
This is an amendment suggested by the Crown Law authorities to link up the agreement made at the conference of Commonwealth and State Ministers with this bill.
Motion agreed to.
Senate’s amendment - At end of clause add the following new sub-clauses: - “ (5.) Common wealth Government inscribed stock for which existing securities are exchanged under either of the last two preceding sub-sections, and Commonwealth Government inscribed stock in respect of which dissent is signified in accordance with this act, shall not, except as prescribed, be exchangeable for bonds or any other form of security. (2.) Commonwealth Government inscribed stock for which existing securities are exchanged under sub-section (3.) or sub-section (4.) of this section shall not be deemed to be new securities within the meaning of this act.”
That the Senate’s amendment be agreed to.
The object of the amendment is to make it clear that dissenting holders may only retain their holdings of bonds in the form of inscribed stock. That is a principle of the agreement that has been arrived at, and the amendment will ensure that it will be adhered to.
.- I realize the object of the amendment, but I feel that it may impose a real disability upon the holders of the securities that will be affected. There should not be any insuperable obstacle to making provision for the identification of the bonds which are not converted. I can quite understand the desirability of obtaining an original record of the securities in respect of which dissent is notified ; but that is provided for in the bill. Why is it necessary to oblige dissenting holders to accept in place of their bonds securities which would not be so easily marketableas the bonds ? There is, we all know, ground for suspecting that a good deal of evasion of Commonwealth taxation occurs in connexion with bearer bonds, for they are transferable from hand to hand; but is it desirable that securities shall be deprived of this attribute of easy negotiation? Because the bonds possess this quality they are slightly more valuable on the market than inscribed stock. I take it that it is not proposed that no bonds shall be issued in the future.
Mr.Theodore. - That is not proposed.
– I do not know that I am prepared to approve of a provision which will interfere with the negotiability of the bonds, even though I suspect that bonds are used for the purpose of evading taxation. I should like the Treasurer to advance some reasons why dissenting holders of these bonds should be obliged to convert their holdings permanently into inscribed stock. If the difficulty is chiefly one of identification, it should be possible to overcome it. As I have said, because of their easy negotiability, bonds are worth slightly more on the market than inscribed stock. Surely provision could be made to identify bonds that are not converted.
– It is not intended by the Government that bonds which are not converted, and which are exchanged for inscribed stock under the provisions of the bill, shall remain inscribed stock until the date of the maturity.
– Is this provision intended to be a penalty for dissent? ‘
– No ; it is intended to provide Parliament with facilities to deal with unconverted stock if that course should become necessary. I think honorable members will agree that holders of bonds who do not convert should be required to bear their fair share of the general sacrifice; but unless there is some way of identifying the bonds it will not be possible to impose any sacrifice in respect of them. The Deputy Leader of the Opposition (Mr. Latham) has suggested that there may be some other way of accomplishing the object of the amendment, such as stamping the bonds in some way.
– Or registering them.
– If they were registered they would become, for all practical purposes, inscribed stock, for they would bear the name of the real owner and a record would be kept of their ownership. If a considerable proportion of the beaver bonds are not converted, Parliament will be called upon to consider what action should be taken to insure that the proper proportion of sacrifice shall be required from the owners of them.
.- I hope that something tangible will be done to prevent the indiscriminate exchange of bonds and coupons. At present an owner of bearer bonds can get a boy to take the coupons to a bank and collect the interest due in respect of them. A great deal of more or less unfair dealing is indulged in by means of the bonds. Some time ago I brought under the notice of the Government, the case of a recently deceased money lender who was strongly suspected of having had practically all his money in the form of bearer bonds. We all know that it is essential to the successful conduct of a money-lending business that the proprietor shall be able, at any time, to put his hand on a considerable amount of ready cash. After this man died, I was requested by a distant relative of his to have a copy of his will made. The pui son who asked me to do this was astounded at the small amount of money in the estate. I asked the Government of the day to look into the matter, but 1 was told that there were very many difficulties in following it up. Provision should be made to prevent the transfer of bearer bonds, except by endorsement. They should be treated, to a large extent, like shares in mining companies or business enterprises. We all know very well how banking companies deal with deposits. There must be a legal order for the transfer of amounts from one account to another. The transfer of bearer bonds should be permissible only by a properlywitnessed endorsement. I trust that the Government will make a permanent, and not a temporary, arrangement of this kind. If it does so it will eliminate many unfair and unjust business transactions by means of bearer bonds.
.- If this amendment is agreed to, I am afraid that difficulties may be created in connexion with the acceptance of securities in payment of estate duties. At present the executor of a deceased estate may take, say, a £1,000 bearer bond to the Commonwealth Bank, exchange it for ten bearer bonds of £100 each, use two of the bonds to pay the estate duties, and return the other eight bonds to the estate. If all the unconverted bearer bonds iu an estate must be exchanged for inscribed stock, it will be very difficult to do that kind of thing.
– This provision applies only to those who do not convert.
– Those who do not convert will still have the right under clause 24 to apply unconverted securities to the payment of probate duties. When new stock is issued, the subscriber may still exercise the old option of either ^ transferring inscribed stock to bonds or putting bonds into inscribed stock. A person who has inscribed stock for a larger amount than he may be required to pay in estate duties, and who takes new inscribed stock, is not even to be given new securities, according to the clause proposed in another place.
– He may get over all these difficulties by converting.
– Then why not make the conversion compulsory at the outset?
– There is nothing to prevent a person who has inscribed stock from splitting up his holdings.
– Is not the Treasurer aware that that would involve a good deal of time?
– I think that the process is very simple.
– Before estate duty was paid, the stock would have to be divided into two lots, and I doubt whether that would be regarded as the issue of new securities. [Quorum formed.’]
– I support the view taken by the honorable member for Corangamite (Mr. Crouch). Even though bondholders may not convert, it seems reasonable that the right to pay estate duties by means of bonds or inscribed stock should not be taken from them. If inscribed stock can be split up in the same way as bonds, as the Treasurer has assured us, the taxpayer should be adequately protected in that matter. I was glad to hear the Treasurer say that he proposes to protect the revenue against those who hold considerable amounts in bonds and pay no income tax with respect to them. There is something radically wrong, if the Commonwealth is losing, on this account, interest in regard to £15,000,000. This shows that our system of income- taxation penalizes the honest man, and allows the dishonest person to escape. When the bill was previously before the committee, I remarked that some steps should be taken to register the names of the holders of bonds, and to make it compulsory for changes of ownership to he notified to the department. That would prevent this escape from taxation.
.- I point out that proposed new sub-clause 6 provides that inscribed stock for which existing securities are exchanged shall not be deemed to be new securities within the meaning of the act.
– They cannot be new securities under the act, because the holders will not have converted. These securities cannot be exchanged for bonds, but they may be split up, if the owner wishes to dispose -of a portion.
– It seems absurd that the only persons in regard to whose interest the taxpayers are to be safeguarded, so far as taxation is con cerned, are those who refuse to convert. Perhaps nine-tenths of the internal loans,, which amount to £556,000,000, will be converted. The fact of bondholders not dissenting within 21 days to conversion will automatically make a large number of bondholders convert through ignorance of the position. Why apply this amendment to only one-tenth of the bondholders ?
– If we have to secure a contribution to the national revenue from the non-converters, we may have to do it by taxation, and that makes it necessary to- know who do not convert.
– I understand that the Treasurer is trying to cope with what is undoubtedly .a scandalous position, in that a great number of the present bondholders pass their interest coupons over the counter, and pay no tax upon them.
– We conjecture that that is so ; we do not know to what extent these persons escape taxation.
– This is an attempt to penalize certain bondholders. I would rather the conversion were made compulsory. For necessary reasons, some bondholders will be forced to dissent from conversion. I know persons who allowed their bonds to be converted to the new loan in December last; but they have obligations falling due in January and February next, and it will be necessary for them to realize on some of their bonds in order to discharge existing contracts. Dragooning action such as is now proposed decreases the value of government securities. The Treasurer must know that inscribed stock is quoted on the Stock Exchange at nearly 2s. 6d. in the £1 less than bonds. This proposal, in my opinion, will do much harm to those who have paid the full face value of their bonds, and have not speculated in them. These investors will now find, not only that their holdings have decreased in value, but also that they are called upon to submit to all sorts of inconvenience.
.- I should like to have some assurance from the Treasurer (Mr. Theodore) that the Commonwealth does not propose to repeat what happened in New South Wales by breaking what has always been regarded as the confidential seal upon the register of inscribed stock. The New South Wales Premier, Mr. Lang, made public the names of certain holders of stock, an action that could not be justified from any point of view. Large sums are held on behalf of some persons in trust, and the names of the beneficiaries are prohibited by law from being recorded on the register. There should be no doubt as to the confidential character of the register of inscribed stock. In view of what has occurred in New South Wales, there may be a suspicion of some sinister design on the part of the Government.
– Since this bill has just come from the Senate, the sinister idea must have originated there.
– There is much more inscribed stock than that which will form the subject of dissent by holders. It would be desirable for the Government to make a statement on the matter. In the absence of such a statement suspicions would arise which could, at this stage, be readily dispelled.
There is another point which relates only to the manner of drafting. As the provision now reads, Commonwealth inscribed stock of the description mentioned shall not, except as prescribed, be exchanged for bonds or any other form of security. Of course it is intended that this provision shall refer only to Commonwealth Government bonds or Commonwealth securities. There are other bonds and other securities besides Commonwealth bonds and securities. I am sure that it is not . intended to produce any other result than to prevent the holder of inscribed stock from applying in the ordinary way to have it transferred into Commonwealth ‘bonds or securities. I move -
That the amendment be amended by inserting the word “ Commonwealth “ before the word “ bonds “ and before the word “ security “ in new sub-clause 5.
– I am prepared to accept that amendment. Regarding the objection which has been taken to the possible disclosure of the names of individual holders, I assure honorable members that the Government has no intention of making those names public.
– There is no secrecy about the matter now. I suppose the Treasurer knows that the probate officers inquire into these matters now.
– That may .be done for special purposes, but the Government does not intend to disclose the names of persons holding bonds, nor their addresses, nor how much they hold. It may be necessary, however, when considering what action should be taken in regard to unconverted bonds, to possess certain information relating to the holders of such bonds. It may be necessary to prepare a classification showing the number of holders, the number holding less than a certain average amount of stock, and the number in each State. This may be required for general information purposes, but it is certainly not intended to make a parade of the names of persons holding this stock. It would be a most undesirable thing to disclose names in that way. A person’s business is his own business, and if he has invested money in Government stock, if he has laid out his accumulated savings in this way, his name ought not to be published abroad as that of an undesirable citizen. He is entitled to privacy in regard to his business, just as is any other private person. I recognize that the amendment moved by the Deputy Leader of the Opposition (Mr. Latham) will more clearly express the Government’s intention, and I am prepared to accept it.
.- There has been a great deal of talk about the privacy to which bondholders are entitled in respect of their business transactions. In one breath we are told that these persons performed a patriotic act when they lent their money to the Government, while in the next we are assured that it would be a most undesirable thing to reveal their names. The bondholders should be glad to let the public know how much they lent; to know the degree of their patriotism. There is always much talk about the sanctity of business secrets, but no such consideration is extended to the workers when they are dragged into the Arbitration Court to give details of their income and manner of living. Even the girls are made to tell how much they pay for their underclothing. When we are dealing with the big bondholders, however - of course, nobody bothers much about the little fellows - their privacy must be scrupulously respected. Not very long ago the Treasurer referred *o them as the gilded roosters.
– That expression was applied to the heads of the Defence Department. The honorable member is mixing his technical terms.
– The Deputy Leader of the Opposition is mixing the statements of King O’Malley with those of the Treasurer. It wa3 King O’Malley who described the heads of the Defence Department as gilded roosters. I do not object to amendments to this bill which are designed to prevent persons from defrauding the revenue, or to make allegedly non-compulsory legislation, in effect, a little more compulsory. In my opinion, if the bill had been made compulsory in the first place, it would have been the proper thing to do. As a matter of fact, the bondholders will have to convert, because they will not know how to go about the business of objecting. As regards the secrecy of bondholders affairs, I have no great sympathy with them. If they were really as patriotic as we have been told when they put their millions into Government bonds because they could find no other investment for their money, the public ought to know who they are, so that people may lift their hats to them when they meet them in the street.
Amendment agreed to.
Motion, as amended, agreed to.
Clause 13 - ( 1. ) The equivalent amount of new securities to be exchanged for an amount of existing securities shall be based on a reduction of the interest rate on existing securities by twenty-two and one-half per centum, and shall where necessary be determined by actuarial calculation in the manner set out in the schedule to this act:
Provided that where the holder of existing securities bearing interest at the rate of three and three-quarters per centum per annum or less satisfies the Treasurer that he acquired the securities before the fourth day of August One thousand nine hundred and fourteen, the rate of interest on conversion of such securities into new securities shall not be reduced below the rate of three per centum per annum.
Senate’s amendment- After “ he “ in the proviso to sub-clause (1.) insert “, or the person whose executor, administrator or trustee he is,”.
– I move -
That the amendment be agreed to.
Clause 13 provides that the holders of low interest-bearing securities shall not have their interest reduced below 3 per cent., and the amendment extends the same privilege to trustees.
Motion agreed to.
Clause 14 -
Senate’s verbal amendment agreed to.
Senate’s further amendment. - After “ stock “ add “ and shall not be exchangeable for bonds or any other form of security “.
On motion by Mr. Theodore the amendment was consequentially amended, and, as amended, agreed to.
Clause 15 -
Senate’s amendment. - Leave out “ Government “ before “ Savings Bank “.
– I move -
That the amendment be not agreed to.
The Senate’s amendment to this clause takes the form of striking out the word “ Government “, the intention being to include under the provision the Hobart Savings Bank and the Launceston Bank for Savings. I do not propose to accept the amendment. I am sure that members of the Senate, and honorable members of this House who raised the matter when the bill was in committee here, didnot fully understand the position with regard to this proposed concession to private savings banks. . The Government does not desire to discriminate unfairly between government savings banks and the private savings banks of Hobart and Launceston. It must be remembered that the ordinary government savings banks, such as those in Victoria and South Australia, hold securities which represent loans made to their governments at special concessional rates of interest. They are not comparable with the transactions between the private savings banks in Tasmania and the Tasmanian Government. It is true that they hold State and Commonwealth Government securities, but they took up those securities on the same terms as were offered to the public; the price was the same, the rate of interest was the same, and so was the date of maturity. There is no reason why these Tasmanian institutions should not be subject to the same interest reductions and maturity dates as apply to private bondholders, but there is a very definite reason why the government savings banks should obtain certain concessions. These concessions may or may not be applied in practice, depending on the exigencies of the situation, and the needs of the Commonwealth Treasury. I should have no very strong objection to the Senate’s amendment if I thought that the matter would end here, but I know that once we grant these concessions, we shall receive applications for similar concessions in respect of scores of other institutions and bondholders. We must stand firmly for our conversion scheme as it now is, or it will break down. Arguments have been put up in favour of concessions to friendly societies and superannuation funds, as well as to small bondholders whose whole income is derived from interest on small parcels of Government securities. In order to make the conversion scheme a( success we must ask these persons and institutions to convert their holdings, accept the 22$ per cent, cut in interest, and abide by the conditions relating to maturity dates. The only departure from that principle is in regard to very small holdings by an individual not exceeding £1,000. We give such persons the right to consolidate their holdings at the two or three earlier maturity dates. I urge honorable members not to press for the acceptance of this amendment. My objection does not arise from any failure to recognize that these Tasmanian savings banks are institutions of thrift doing the same work as the government savings banks, but from the fact that the securities they hold are of an entirely different nature from those held by the government savings banks.
.- When this clause was previously before the committee, I moved an amendment identical with that now made by the Senate, and the Treasurer refused to accept it, giving the same reasons as he has now advanced. According to the wording of the clause, the banks for savings in Tasmania will not receive the concession which is being given to the State savings banks, of their new securities maturing at the original date of existing securities. Surely this provision applies to all securities of a savings bank. ‘
– To all or any of its securities.
– That means that the State savings banks are to have a concession in regard to Commonwealth securities in addition to those which, as the Treasurer has mentioned, are given by State Governments for domestic purposes.
– In the “case of Commonwealth bonds, the Commonwealth Treasurer would have to approve.
– It is perfectly clear that one class of security held by the government savings banks is identical with that held by the banks for savings in Tasmania. If this concession is to be given to State savings banks in regard to their investment in Commonwealth loans, I contend that a similar concession should be given to the Tasmanian savings banks, which, the Treasurer himself has admitted, are conducted on similar lines to government savings banks, and do precisely the same class of work. If this clause is to apply to securities given by State Governments for the specific purpose of financing their activities, and not to investments in Commonwealth securities, that should be made clear. I ask the committee to support the Senate’s amendment.
.- I support the remarks of the honorable member for Darwin (Mr. Bell). I ask the Treasurer to allow the Senate’s amendment to stand, and if he is not prepared to do that, to make some provision in the clause so as to relieve the banks for savings in Tasmania, which are likely to be placed in an awkward position as a result of this legislation. These two banks operate in. exactly the same way as the Commonwealth and State savings banks. They have from time to time been of wonderful assistance to the Government of Tasmania. As banking institutions, they require at times certain liquid assets, and they so arrange their investments with the Govenment of Tasmania as to enable them to meet their liabilities. Time after time, these banks, when their loans are about to fall due for redemption, have stated how much “they would alllow to remain on loan and how much would have to be paid off to enable them to meet their own commitments. If we included the Tasmanian savings banks in this provision, surely it would be a sufficient safeguard to stipulate that there must be agreement between the Commonwealth Treasurer and the Treasurer of Tasmania. After all,- the interests of the Commonwealth Treasurer and the Treasurer of Tasmania are identical in respect of this loan conversion.
– Their interests would be identical in regard to Commonwealth securities, but not in regard to State securities.
– I do not wish anything to be done that would be likely to upset the plan. I understand that the Premier of Tasmania has communicated direct with the Federal Treasurer suggesting that this provision might be altered. He has stated that he telegraphed the Federal Treasurer to this effect -
Have wired Federal Treasurer to place Tasmanian savings banks on the same looting as the Commonwealth and State savings banks re conversion to the extent that, if necessary, funds be made available to them at maturity dates of their existing securites sufficient to allow each bank to retain the ratio of 20 per cent, of liquid assets held by them to the amount of their deposits.
Surely there is some way of meeting this situation. These Tasmanian banks should receive some recognition for the great assistance that, for years past, they have rendered to the Government of Tasmania. The honorable member for Darwin (Mr. Bell) has pointed out that the clause as it stands does not deal with special securities, but that the Treasurer may deal separately with them. I suggest that the clause provides that, if necessary, the Commonwealth Treasurer and the State Treasurer may come to an agreement. That would be an ample safeguard.
– Why is there not a government savings bank in Tasmania?
– The original government savings bank of that State was transferred to the Commonwealth, and the present Commonwealth Savings Bank is now carrying out what used to be the functions of that institution. The* banks for savings worked side by side with the original State institution, and they now work side by side with the Commonwealth Savings Bank in Tasmania.
.- I support the remarks of the Leader of the Opposition (Mr. Lyons) and the honorable member for Darwin (Mr. Bell). The clause, as it stands, provides that new securities issued in exchange for existing securities held by government savings banks may mature upon the original date of maturity. Sub-clause 2 reads -
A government savings bank in this section means any of the following institutions, namely: - The Commonwealth Savings Bank of Australia; the Government Savings Bank of New South Wales; the State Savings Bank of Victoria; the Savings Bank of South Australia; and the State Savings Bank of Western Australia.
Why should there be this definition in the clause? If what the Treasurer (Mr. Theodore) has inferred, with respect to moneys loaned by the State savings banks to the State governments, is correct, why is it that the Commonwealth Savings Bank is included in sub-clause 2?
– The Commonwealth Bank also holds State securities that were issued under concessional terms. For instance, when we took over the Queensland Savings Bank, we found that some of the loans advanced to the Queensland Government were at special concessional rates. They were low rates, and not market rates at all.
– That is so; but, as the Leader of the Opposition has pointed out, in practically all the States, with the exception of Tasmania, there is a government savings bank. In Tasmania there are two trustee savings banks, which are functioning in the same way as are the government savings banks of the other States. There are no emoluments or dividends paid;’ no financial advantage given to any individual other than salaries paid to members of the staffs. The trustees of the banks receive no fees for their services. These institutions in Tasmania have branches in various parts of the State, and surely they should have the same concession extended to them as is being given to government savings banks. Some savings banks have a huge sum of money at call. It has been invested for a specific time, and a bank may be considerably embarrassed if it is not placed in the same position as a government savings bank on the mainland. I appeal to the Treasurer to give further consideration to this provision, and to see whether it is not possible to place the trustee savings banks of Tasmania, which are doing the same work as the government savings banks in the other States, on the same footing.
– I am prepared to accept the suggestion of the Leader of the Opposition (Mr. Lyons), and to bring the banks for savings of Tasmania under this clause, provided that the Commonwealth” Treasurer and the State Treasurer are in agreement. In that case, if the State Treasurer ascertains that the Tasmanian banks are likely to be placed in a perilous position because of the greatly reduced ratio of cash reserves, no doubt some provision will have to be made to meet an early maturity. Therefore, with the consent of the committee, I withdraw my motion, with a view to agreeing to the Senate’s amendment with the addition of a consequential amendment.
Motion, by leave, withdrawn.
Motion (by Mr. Theodore) agreed to.
That the amendment be agreed to with the following consequential amendment: -
That the word “or”, sub-clause (1.), be omitted with a view to insert in lieu thereof the words “ and the Treasurer of “.
.- The bill states that the time within which dissent from the conversion of any existing securities may be signified, shall be 21 days after the commencement of this act. The clause states that, unless the Treasurer of the Commonwealth or the State concerned, and the savings bank, so agree, new securities shall be subject to the provisions of the act. Therefore, this agreement must be come to within 21 days or the rights of the savings banks will have lapsed.
– I think that this agreement can be come to up to the time when the new securities are issued.
Motion agreed to.
Senate’s consequential amendments to clause 15 agreed to.
Clause 20 (Interest on new securities to be free from further taxation).
Senate’s amendment - After sub-clause .1 insert the following new sub-clause: - “(1a.) In determining, for the purposes of this section, the amount of income tax which would be payable in respect of interest to which this section applies, the rate of tax shall lie applied to the whole amount of that interest included in the income of the taxpayer without any deduction except such part (if any) of the deductions allowable from the income of the taxpayer derived from property as, in the opinion of the Commissioner of Taxation, is properly attributable to the interest.”.
– The Solicitor-General, in explanation of this amendment, says -
The reason for putting section 20 in thi» bill is that the freedom of new securities from increased income tax is an important condition of the conversion.
But, because of the complicated provisions of the income tax law, and the graduated nature of the tax, this freedom from increased taxation is very difficult to express in words.
The clause, as it stands, deals with a tax payer’s assessment for (say) the year, 1938; it looks at the interest on bonds which form* part of his income, and compares the amount of tax which would be payable in respect of that interest at the 1938 rate with the amount which would bc payable in respect of that interest at the 1930 rate. And it reduces histaxation by the difference between the two> amounts.
But then the question arises, what is the exact amount of tax payable in respect of the interest T
The act imposes taxation, not in respect of ‘ particular items of his income, but in respect of all his assessable income in two classes, income from property and income from personal exertion.
He is not taxed on the whole of his income, but on his taxable income - that is, his income, less the deductions; and the problem is to apportion the deductions to the different items of income. It is not a matter of simple proportion, because some deductions are properly referable to a particular item of income; for instance, the depreciation of plant is referable to the earnings of the plant, and no portion of it ought to be referred, say, to bond interest.
To take a simple illustration. Suppose, in 1938 the rate . applicable to the taxpayer’s property income were 15 per cent., and the rate applicable to the same income in 1930 would be 10 per cent. Suppose also that his total property income were £1,000, derived wholly from interest on new securities. Suppose also that he is entitled to deductions; from that property income, of £200 (for insurance, gifts to charities, &c).
Now he is entitled to a rebate of 5 per cent, of the amount payable in respect of that interest. But he is not taxed on £1,000 interest, but only on £800; so that the rebate is not 5 per cent, of £1,000, but 5 per cent, of £800.
If the taxpayer has different sources of income, the question of apportionment of the deductions comes in; and that question is so complicated that it is impossible to lay down a definite formula which will be just in all cases. Far the most satisfactory method is to leave it to the commissioner to work out on the facts of each individual case. This is what was done in section 23(2)6. Honorable members will see the need for the amendment to obviate disputes in future as to whether the Government is carrying out its obligation to exempt the bondholder ‘ from increased taxation in respect of his security interest. W a must leave to the Commissioner the responsi- bility of determining in, each case what deduction shall be allowable. Accepting the guidance of the legal officers of the Crown, I move -
That the amendment be agreed to.
Motion agreed to.
Verbal amendment’ to clause 20 and amendments to clauses 22 and 25 agreed to.
Clause 25 (Authority to trustees in territories to convert certain securities).
Senate’s amendment. - At the end of clause add the following new sub-clause: - (4.) This section shall not be construed as affecting the validity of any State act (whether passed before or after the commencement of this act) which authorizes or empowers trustees to convert, or to withhold signification of dissent from the conversion of, any existing securities into new securities, and which is not in terms inconsistent with the provisions of this section.
Motion (by Mr. Theodore) proposed -
That the amendment he agreed to.
.- The clause and the Senate’s amendment refer to the conversion of “ any existing security”. The authority to the trustee to convert is not limited to his trust estate, although that may be implied. A trustee is defined as including “ any director or officer of any such company, and any person acting in any fiduciary capacity “. The power -given seems to be very wide, and apparently is not limited to the trust estate.
Motion agreed to.
Verbal amendment to clause 26 agreed to.
Clause 27 (Power to make regulations) .
Senate’s amendment. - At end of clause add the following new sub-clause -
– One cannot possibly guess what the Senate is driving at in this amendment, or imagine the origin of, or conceive the reason for it; but if the Senate desires to impose this restriction upon the Parliament or either House of it I have no objection. I move -
That the amendment be agreed to.
.- Of course the Treasurer (Mr. Theodore) was satirical when he said that he could not guess what the Senate is driving at. This amendment found its genesis in the conflict between the Executive and the Senate in regard to the issue of regulations under the Transport Workers Act. The Senate is seeking by this amendment to secure to itself the right to dominate the executive of government. The Executive derives its authority from the majority in this chamber, and in pursuance of that authority the Government made regulations relating to work on the waterfront. The Senate repeatedly disallowed those regulations. Some time ago the Deputy Leader of the Opposition (Mr. Latham) intimated that interesting developments might be expected from that conflict; is this amendment the first of them? I have never known such a restriction to be inserted in any other bill, and its acceptance by the Treasurer indicates very clearly the complaisant attitude of the Government. I. am surprised that Ministers should so readily surrender the authority of the Executive. I am opposed to the amendment.
– I heartily congratulate the Government on having accepted the amendment. During the last few weeks I have quietly observed how graciously on special occasions the Government can “ eat the leek and drink the hemlock “. This amendment has been rendered particularly necessary by certain political happenings during the last few months. In the answer of his Excellency the Governor-General to the case stated to him by the Opposition in the Senate, by way of petition, I notice these words -
I am unable to see how I can justifiably introduce a limitation on the executive power which Parliament itself has not seen fit to insert.
The only fair interpretation of that statement is that Parliament should so safeguard itself that there shall be no repetition of. the extraordinarily farcical happenings that took place in the Senate in connexion with the regulations under the Transport Workers Act. Those regulations and the attitude adopted by the Government in its hostility to the desire of the Senate in the matter, constitute a complete abuse of the power of government; nothing could have demonstrated more completely to the people of Australia how fully this Government is prepared to prostitute its power in order to attain its own ends.
Its action was a deliberate attempt to invade and violate the rights of this Parliament, and the Senate, by its attitude very ably defended those rights. Honorable members would be recreant to their duty if they refused to avail themselves of the opportunity to register their protest against the action of the Government.
The significance of the evil of government by regulation has been stressed by no less an authority than the Lord Chief Justice of England, Lord Hewart, who has gone out of his way on various occasions to warn the people of the civilized world of the menace to government that resides in the prevailing practice of attempting to govern any country by a system of regulation for which Parliament is not responsible. It takesus back 300 years to the Stuart days and the Stuart ways. I submit that in this year of grace, 1931, no Parliament, whether in the British Dominions or elsewhere, can quietly submit to a retrogression of that nature.
– Did the previous Government do it?
– “Whether it did or not, it is our duty to ensure that no future Government has the opportunity to do it. The case of the waterside workers was used-
The CHAIRMAN (Mr. McGrath).Order! The committee is dealing with an amendment from the Senate, not with the case of the waterside workers.
– I shall return to the subject of this new despotism which this Government sought to set up by attempting to implement government by regulation, as distinct from government by Parliament. It is our bounden duty to take every conceivable step to scotch at the earliest possible moment any continuation of that practice. The history of the last few months has demonstrated that the only way to do so is to ensure that in any future act passed by this Parliament the potentialities for evil that rest in Ministers of this
Government, and which may easily reside in Ministers of any other government, are effectively circumscribed. It has been proved that regulations can be made in defiance of the legislature. It rests with thecommonsense and wisdom of this Parliament to see that that isprevented in the future. I say in all sincerity, there must be a return to government by Parliament. There must be a getting away from the system of government by cabinet, and, in particular, from government by caucus. The amendment that has been inserted in this measure by tut Senate, and which, I am pleased to see, has been accepted by the Government with great goodwill, gives us the assurance that, temporarily at least, we have been brought back to government by Parliament. It will get us away from the obnoxious system of government by regulations imposed by Cabinet, and, of course, imposed upon Cabinet by caucus.
Question - That the Senate’s amendment be agreed to - put. The committee divided. (Chairman - Mr. McGrath.)
Question so. resolved in the affirmative.
Motion agreed to.
Resolutions reported ; report adopted.
– I move -
That the bill be now read a second time.
The object of this measure is to enable the wheat-growers of Australia to form an organization to control and regulate the movement and sale of their wheat within the Commonwealth, and to ensure the orderly marketing of it for export. The measure is designed to give effect to the policy of the Government, which is to assist both primary and secondary industries. It is realized that the interest* of our primary and secondary industries are interdependent. Although the provisions of the bill follow, to some extent, those of the Wheat Marketing Bill which was rejected last year in another place, there are some differences between this measure and that. I say deliberately that after the defeat of the Wheat Marketing Bill last year the Government would have been justified in discontinuing its efforts to assist the wheatgrowers of Australia, for that bill was designed to give effect to its general policy in that direction. But other measures were introduced, because the Government earnestly desired to assist our primary producers. I have said, on many occasions, and I repeat now, that the Government cannot fairly be blamed because the subsequent measures which it introduced were not effective.
After the Wheat Marketing Bill was defeated, a measure was introduced and passed by both Houses of the Parliament with the object of providing an advance of 3s. per bushel for wheat. I have always maintained that it would be unsound for the Government to guarantee a certain price for wheat unless it was assured that the wheat would be marketed by an orderly method and controlled by the growers. This second bill was introduced because the wheat-growers, like practically every other section of the community, have been very severely hit by the depression which has overtaken the country. The Senate passed the Wheat Advances Bill, but the measure was rendered inoperative because the directors of the Commonwealth Bank accepted the opinion pf their legal advisers that the Government could not constitutionally . guarantee the bank against any loss that it might incur by providing money for the payment of the guaranteed price.
– That measure was also made ineffective because certain interests, whose co-operation was essential to the success of the scheme, refused to cooperate.
– That is so. Certain interests in Australia displayed the utmost hostility to the proposal to set up an Australian wheat pool. They indicated, however, that they were prepared to agree to the payment of a guaranteed price for wheat. Yet even when provision was made for the pay-, ment of a guaranteed price, apart from the establishment of a compulsory pool, they refused to co-operate.
I am reviewing this past history because the attitude of the Government towards the wheat-growers of Australia has been seriously misrepresented.
These two attempts to assist the wheat- growers were unsuccessful through no fault of the Government, yet it made a third attempt to provide the money for the payment of a bounty on wheat by means of the issue of a fiduciary currency. This proposal was also rejected in another place, in the circumstances I repeat that no adverse criticism can justly be applied to the Government, because our wheat-growers were not given the assistance to which they were thoroughly entitled.
– The Minister should be too humiliated even to refer to the failure of all the efforts of the Government to assist the wheat-growers.
– The honorable member for Warringah (Mr. Parkhill), more than any other honorable member, has been responsible for the failure of the Government to provide assistance for the wheat-growers. He is entitled to any honour that he may consider attaches to his attitude in that connexion. No one knows better than he that it was hi3 side of the House that prevented assistance being given to the wheat-growers.
– The honorable member for Warringah did not vote against the proposal to pay a guaranteed price of 4s. a bushel for wheat.
– I spoke against it, but did not vote either for or against it.
– The Government has introduced this bill in order to meet the changed conditions which are now confronting Australia, and to provide assistance for the wheat-growers which is long overdue. It is provided that if the majority of the wheat-growers of Australia indicate by a ballot that they desire a compulsory wheat pool to be set up, steps shall be taken to give effect to their decision. Ballots have been taken on other occasions in various wheat-growing States of the Commonwealth, and in New South Wales, but on no occasion has the majority required by the statute voted in favour of the establishment of a wheat pool. The Government feels that, if a majority of the wheatgrowers desire to take complete control of their own business they should be enabled to do so. A ballot is being taken in New South Wales at present on this question. It is provided in the act that voting shall be compulsory, and that a simple majority shall determine the issue.
– Yes ; 31 per cent, of the wheat-growers in New South Wales may compel all others to submit to a compulsory wheat pool.
– And 31 per” cent, of them may prevent the others from establishing such a pool.
– It is surely not inequitable that .the majority of the wheat-growers who vote in this ballot shall determine the course to be taken. If farmers’- are not sufficiently interested to record their vote they should be quite prepared to agree to whatever the majority decides.
– The voting in New South Wales is compulsory.
– The Deputy Leader of the Opposition has agreed to the provision of the Commonwealth Debt Conversion Bill that bondholders who do not dissent shall be deemed to have consented to the conversion of their stock.
Before I explain, briefly, the most important clauses of the bill, I may mention that there are approximately about 66,000 wheat-growers in the Commonwealth, and the great majority of them are members of voluntary pools. During the 1930-31 season, there was a record production of wheat, amounting to 212,628,700 bushels from an area of 18,312,420 acres. Of the total quantity produced, 15,030,000 bushels are estimated to have been used for seed, 31,000,000 bushels for local human consumption, and 4,800,000 bushels for stock feeding, &c, leaving an estimated exportable surplus of nearly 162,000,000 bushels. [Quorum formed.] The total quantity of wheat and flour manufactured from the wheat that has been exported from the beginning of the season to date is. approximately 115,000,000 bushels. Flour, in these figures, is expressed in terms of wheat. Of the wheat of the 1930-31 crop which has not yet been exported - 47,000,000 bushels - a percentage lias already been sold, and is ready for shipment.
– In arriving at these figures has normal allowance been made for local consumption ?
– Yos. Ti is anticipated that the carry-over into next season will be, at the most, from 14,500,000 to 15,000,000 bushels. During the eleven months ended the 31st May. 1931, the quantity of wheat and flour exported from Australia was 125,041,639 bushels, valued at £16,304,867. Owing to seasonal conditions, it is most difficult to estimate what next season’s crop will yield; but it is probable that 13,500,000. or at the most, 14,000,000 acres, will be sown to wheat and 150,000,000 bushels will be harvested. Deducting requirements for local consumption, seed and stock feed, amounting to, roughly. 15,000,000 bushels, it is estimated that there will be a surplus of about 150,000,000 bushels available for export in the coming season. These figures cover the position up to a fortnight ago, and are based on the most reliable data to hand. The floods that have occurred recently over a great part of New South Wales will, of course, have an effect on the general position.
I do not overlook the obviously’ unfavorable factors which are operating with regard to the wheat position throughout the world. There is a big carry-over in the United States, of America and Canada, and the Russian wheat situation is difficult to sum up, because of the varying reports regarding it; but it would seem that the influence of Russian wheat on the world’s market will be more formidable next year than, say, this year. Other factors, too, must be considered. News from Canada indicates that a greatly reduced crop will be garnered there as the result of a serious drought. It is unfortunate that the primary producers in any dominion should be placed at such a disadvantage, but a circumstance which is operating against Canada will help Australia. Italy has taken steps, by proclamation, to ensure that the millers shall use at least 95 per cent, of local wheat. That is unfortunate, so far as Australia is concerned, because Italy will not need to import wheat. Taking all the circumstances into consideration, however, it is considered that the price of wheat in the coming harvest will be greater than this year.
It is proposed under the bill to create an Australian wheat board, composed of one government representative, and one representative from each of the State boards. In that respect the measure does not differ from that which I introduced last year. All the members of the board, except the one government representative, will be elected by the growers themselves. I emphasize that fact in contradiction of statements made to-day by those responsible for certain widespread propaganda, particularly in New South Wales, where, as I have said, a ballot of the farmers is being held. Such misrepresentation is always indulged in when the wheat-growers attempt to bind themselves together for their own preservation. It is stated, in circulars that are being distributed, that under this measure the wheat-growers are to be handed over to the Government.
– So they will be.
– The honorable member does not believe that, but he is prepared to use that kind of misrepresentation. There will be only one government representative on the board. If five States enter the scheme, there will be five representatives of the growers and only one representative of the Government, who will have the voting power of one to five. It should not be necessary to make that statement, but in order to meet the propaganda that is being resorted to, I ought to mention the -fact.
– Will the Government representative have the right to veto?
– No. With the qualification that the Government will have one representative on the Commonwealth board, it will be entirely controlled by the wheat-growers themselves. There will be in no sense a government pool, and, therefore, the proposal conforms to that submitted by me last year. The federal board, of course, will have control over export and the interstate movements of wheat. It will be able to prevent the dumping of wheat from one State, which may be outside the pool, into another State that is in the organization, for the purpose of embarrassing the latter State. The State boardswill also have important functions to discharge. Acting in .unison with thefederal board, they will be able to fix the prices of wheat for local consumption.. This power would have been possible if the 1930 Wheat Marketing Bill had been agreed to. If the State boards had been able to fix the price for local consumption at 4s. a bushel, their action would not in any way have affected the price of bread. There is now in operation in New South Wales a Flour Acquisition Act, under which the price of wheat is fixed at approximately 4s. a bushel. When we compare that price of 4s. for New South Wales and Queensland with the price of ls. 9d., prevailing in Victoria and South Australia, it becomes evident that the price of wheat makes no material difference to the price of’ bread, because bread sells at much the same price in all States. So much for the argument of those who say that we must not fix the price of wheat for home consumption because that would result in putting up the price of bread. That contention is not borne out by facts.
– It is not proposed in this bill to fix the price of wheat.
– That will not be the function of the federal board, but of the State boards, acting conjointly with the federal board. The State boards will be composed of representatives of the wheat-growers, with one government nominee, and such boards can be depended upon to fix a reasonable price for wheat, one which will not result in any material increase in the price of b»ead to consumers. Although there will be a government nominee on the State boards, the representatives of the wheatgrowers will be in control. The composition of the boards is set out in the bill and the schedule. If the Wheat Market.ing Bill had been passed last year, it would have been possible to fix the price of that portion of last year’s crop which was consumed in Australia at 4s. a bushel, which would have given the growers an extra 4$d. a bushel on all wheat produced. It is estimated that; taking into account the smaller quantity of wheat which will be produced this year, a local price of 4s. a bushel would give an extra 6d. a bushel to the growers for all the wheat grown.
– That is assuming that the overseas’ price remains the same as mow.
– Yes. Honorable members will agree that that would constitute a very welcome addition to the wheat-growers’ returns. It is worked out on the basis of 100,000,000 bushels for export, and 50,000,000 bushels for local consumption. The increased local price would return an additional £3,600,000, which represents practically 6d. a bushel on the -whole crop.
– The increased local price will not be obtained for all the wheat consumed locally, hut only for that used in making .bread.
– That has been taken into consideration.
– At what period during the growth of the crop will the price for home consumption be fixed?
– That will be under the control of the State boards.
– How many States will come into this scheme?
– South Australia and Victoria have already intimated that they are in agreement with the principles embodied in this bill, and will pass the necessary legislation. New South Wales is taking a ballot of wheatgrowers, and Queensland has a wheatpooling scheme already in operation. While we have not yet received a definite intimation from Western Australia, I am hopeful that that State will also agree to come in.
– I am informed that the majority of the wheat-growers in Western Australia are in favour of the scheme.
– That is my information also. Clause 3 of the bill provides that the board shall have control over such products of wheat as are prescribed by regulation. To make the bill effective, and to protect the growers, it is necessary to have power to control the export of flour, and the interstate trade in flour. It will also, in certain circumstances, have control over the movements of bran and pollard. The board will be able to supply wheat to millers at world parity prices for their export flour trade, and to impose such conditions as will compel the millers to export the flour, and not place it on the local market. This latter provision will apply to States not in the pool. They will not be allowed to dump wheat from their State into another State which is a member of the pool, and the same restriction will apply to flour. That power will be exercised by the federal” board.
– So that a dissenting State is to be controlled by the federal board as to its trade in wheat and flour?
– That is to prevent dumping.
– It applies also to export ?
– Honorable members must recognize that if a majority of the States come into this scheme, it would be unfair to allow those States which remain outside to dump their wheat dr flour into the States belonging to the pool, and prejudice the success of the whole scheme. Under this bill power is not given to this Parliament, or to the State Parliaments, to set up control boards. Such action will be taken only if the majority of wheat-growers declare by ballot that they desire it to be done. It is left to the wheat-growers themselves, and this bill is to give statutory power to enforce what they decide is best for the industry.
Power is to be given under the bill to the board toissue licences. A State which is not in the pool will have to apply for a licence before it can export wheat or flour to places beyond Australia, or to States which are members of the pool. The board itself will have power to issue licences in respect of wheat within the control of the States, but outside that the Minister, acting on the advice of the board, will issue licences.
Mr.Stewart. - Similar power has been granted by legislation in respect of the Dried Fruits Export Control Board.
– That is so, and I have heard nothing but praise for what that board has done. If this power did not exist it would be impossible to exercise any control over the industry at all. As a matter of fact, individuals have endeavoured to break down the principle of control in respect of dried fruits, but, fortunately, we have been able to follow them up and punish them. Under clause 17 the federal board will be empowered to sell all wheat except that required for local consumption in the producing States, to control export, and to make agreements between the Federal and State wheat boards. Under clause 20 power is taken for the board to obtain any information necessary for the compilation of such statistics as the board may require. The schedule to the bill is in the form of an agreement between the Commonwealth and those States which desire to come into the pool.
Sitting suspended from 6.15 to 8 p.m.
– An essential difference betwen this bill and its predecessor is that this measure makes no provision for a guarantee. The unfortunate state of our finances has made it impossible to secure the cooperation of the banks for the giving of a guarantee for this season’s wheat. That fact seems to have been fully realized by the wheat-growers themselves, because at a recent conference held at Bathurst, which was largely attended, the primary producers unanimously carried a resolu tion endorsing the principle of a Commonwealth compulsory pool, and urging the Commonwealth Government to proceed with this measure even without the guarantee. In other words, the wheatgrowers want to have the power to institute an efficient system of marketing under the control of their own organization. This bill provides for that. The primary producers of New South Wales have, by means of the ballot, expressed themselves in favour of the pooling system. Since then resolutions have been passed by various bodies of wheat-growers in other States, urging the passage of legislation to provide for an efficient scheme of marketing in order to stabilize the wheat industry, and to place it on a proper footing. This bill, if given effect, will afford the sellers of wheat an opportunity to become as well organized as are the buyers of wheat. There is no weakness in the organization of those who buy wheat, and as they have formed themselves into a solid phalanx in their own interests, surely the men who producewheat should have the right to organizefor their own protection.
This bill, although it provides no guarantee, will confer many advantagesupon the primary producers. The power which it will give to fix the price for home consumption will enable the farmers to obtain an additional 6d. a bushel on next season’s crop. Through their own organization they will be able to speak with one voice in regard to chartering, insurance, and everything else affecting the sale of their wheat. They will be able to avail themselves of the rural credits system inaugurated by the Commonwealth Bank, which institution, in the past, has advanced to voluntary pools 80 per cent. of the value of the crop. As voluntary pools have been able to secure such liberal advances, surely it is not too much to expect that even greater facilities will be given by the Rural Credits Branch of the Commonwealth Bank to a properly organized compulsory pool. These advantages will, to some extent, compensate the wheat-growers for the absence of a guarantee.
Mr.Gregory. - Will the Minister point out in what way this bill differs from the original Wheat Marketing Bill? “Mr. PARKER MOLONEY. - I have just dealt with an important difference regarding the- question of a guarantee.
– Did not the original hill provide for a term of three years? This bill does not stipulate any period. “ Mr. PARKER MOLONEY.- That is a matter which can be settled in committee. I am quite prepared, as I was when the previous bill was before honorable members, to discuss the various aspects of this legislation with them. I have not tied myself down to any particular period, and I am willing to consider suggestions from those engaged in the industry itself, and from honorable members interested in wheat-growing areas. It will be remembered that in connexion with the previous bill, the proposal to institute a wheat marketing scheme was discussed in Canberra at a conference which was wholly representative of the industry.
Before concluding my remarks I wish to refer to certain “ circulars that are “ being issued throughout New South Wales. These circulars constitute a record in the way of unfair propaganda and misrepresentation, and they will’ undoubtedly be distributed in the other States when ballots are being taken there. In the past, a vicious form of propaganda was,used by a certain organized section that does not grow wheat, whose only interest in wheat is on paper. To-day that section is resorting to propaganda which is discreditable to it. A few days ago a circular, to which three names were attached, was issued in New South Wales. The Minister for Agriculture in that State has instituted an inquiry, but although these three names are supposed to be the names of certain communists, the department has not been able to trace them. For the information of those honorable members who have not seen the circular, let me say that it purports to come from three communists who state that this legislation, if given effect, will be the first step in the direction of socialization, and for that reason they urge the farmers to vote for it. That is a despicable method of propaganda, and no language can be strong enough to condemn it. Throughout these circulars an appeal is made to the farmers not to part with their freedom. Why, the farmer now is about as free as a caged parrot! He has no freedom, and this bill is designed to give him freedom to conduct his business as the majority decides.
– A parrot has more feathers than the farmer has left to him in these times.
– That is so. Yet those who are responsible .for this propaganda are appealing to the farmers to keep their freedom. The issue of thousands of these circulars must have cost a considerable sum of money, and those who are indulging in this vicious propaganda must be getting a big rake-off in the form of profits made at the expense of the farmers, otherwise they could not afford to pay for it. If this bill is given effect, the profits from the industry will go to those who produce the wheat; they will receive a just reward for their labour.
Let me briefly sum up the advantages that will accrue to the wheatgrowers under this bill. They will have the benefit of a price above export parity for all wheat for local consumption, a reduction in the cost of handling and administration., more liberal advances from the Rural Credits Branch of the Commonwealth Bank, the elimination of competition on the “part of sellers of Australian wheat, the control by one authority - the Australian Wheat Board - of chartering, freights, and insurance, the pooling of the return from wheat sold in Australia and abroad at varying prices, and the elimination of dumping and unfair trading practices within Australia. This measure, if passed, will provide the necessary machinery for cooperation with other wheat-exporting countries in effecting an international arrangement for the regulation of the marketing of the world’s wheat. Only the other day an important conference was held at London in an effort to arrive at a world basis for the marketing of wheat. If some such basis could be reached, this country, in common with other wheat-exporting countries, would have a distinct advantage in regard to international contracts, particularly at a time like this. That will be one of the great advantages we shall have if this bill becomes law. The wheat industry is surely deserving of every possible encouragement, and I hope that the bill will be considered solely with a view to assuring to the producer the full and complete reward of his labour.
Debate (on motion by Mr. Latham) adjourned.
In Committee of Supply: Consideration resumed from the 14th July (vide page 3S49) on motion by Mr. Theodore -
That the first item in the Estimates for Additions, New Works, Buildings, &c, under Division I. - The Department of Defence - namely, “ Naval establishments - Machinery and plant, £3,000 “ be agreed to.
– I offer no apology for the vote I recorded last night on the amendment moved by the Deputy Leader of the Country party (Mr. Paterson). The amendment was not adequately supported, but it will serve to impress upon the people the need for some action by this Parliament to reduce the cost of living and consequently the cost of production. Before long the people will realize what a fool’s paradise they have been living in for some years. I have pointed out dozens of times that the bulk of the wealth of Australia comes from the soil. The wool-grower, the wheat-grower, and the miner, produce the real wealth of Australia; yet ever since 1920 we have been building up the costs of primary production. Although our -exportable products have been selling at “higher prices than ever before, Australia’s financial position to-day is almost tragic. All honorable members on this side of the chamber approve of the rehabilitation plan evolved in the Melbourne conference, but we are justified in drawing attention to the fact that it is seriously incomplete; because of a marked omission from it, at least one section of the community will not contribute anything to the general sacrifice. It should be apparent to everybody that the primary industries are not so many sponges that -can be squeezed and squeezed and never become dry. A petition presented to Parliament eighteen months ago by the honorable member for Riverina (Mr. ^Killen) called attention to the fact that the stranglehold of high costs was undermining the great basic industries. Through this policy Australia’s economic position to-day is almost desperate, and what hope can the future hold unless we rectify the faults in our economic system? Does any honorable member believe that merely by building up secondary industries we shall restore the country to its old time prosperity? Under existing conditions the secondary industries are a drag on all others. I do not say that we should not endeavour to develop secondary production. Even the man on the land knows that all his sons and daughters will not remain with him, but will want to enter other occupations, and there is no reason why we should not build up secondary production on a sound basis. A little time ago I quoted the wages paid on the railways of the United States of America. Of course America has a far greater volume of trade than has Australia; nevertheless it is a striking fact that the railways there can pay to ordinary workers an average daily wage of 35s., whereas the highest fixed wage paid in Australia is 130s. a week.
– Where did the honorable member get those figures?
- Mr. Brookes, when High Commissioner in the United States of America, sent me full particulars of the wages paid there. The awards of the Arbitration Court, governmental interference in industry, and the cultivation of antagonism between employers and employees are preventing us from getting from our workers the same service as is given by the workers in America. That is the principal reason why our secondary industries have been such a failure, and are incapable of exporting economically.
– We are getting better service from the Australian workman than is given by any other workman in the world.
– We would get it, but for the influence of persons- like the honorable member, who all his life has done nothing but try to arouse antagonism between employer and employee, thus destroying that sense of obligation of mutual service that should exist between them. In Canadian factories wages of six, seven, “and eight dollars a day are paid, and they oan produce agricultural machinery at half the price charged for the Australian-made article.
– In what industries in Canada do the workmen receive eight dollars a day? Eight dollars a week is more likely to he correct.
– If the honorable member will consult in the library the Canadian labour statistics, issued by the government of the dominion, he will find confirmation of my figures.
Another cause of Australia’s present deplorable condition is excessive borrowing, but I resent the charge made repeatedly that the borrowing has been principally by the Commonwealth. In 1920 the public debt of the Commonwealth was £352,000,000 ; in 1930, it was £372,900,000, an increase of £20,900,000. The public debt of the States in 1920, was £425,900,000, and in 1930, it had risen to £727,600,000, an increase of £301,700,000. Those facts should be impressed upon the public mind. Because we have borrowed too much we have a heavy annual interest bill to meet. I am one of those who believe that when we borrow, either from our own people or overseas, we should honorably pay in full the interest and principal; but apparently, there is a group in this Parliament that believes that we should even now continue borrowing, and subsequently repudiate our debts.
The honorable member for Gippsland last night referred to the need for sacrifice by all sections of the community. He contrasted the price level of 119 for primary products as compared with 193 for manufactures. I have other figures which confirm the contention that the sacrifice required under the rehabilitation plan will not be spread equally over all sections of the community. On a basis of 100 for 1911, the prices levels in 1910 were - Wheat, 106; flour, 104; bread, 96; and wages, 83. The producer then was getting the advantage. But in 1929, the index figures were - Wheat, 154; flour, 164; bread, 194; and wages, 206; whilst in January last, the figures were - Wheat, 71; flour, 84; bread, 143 ; and wages, 214. Those figures show the continuously increasing sacrifice that is being asked of the producer. Professor Perkins, reporting on the disabilities of the primary producers in South
Australia, made the following comparison of prices in that State : -
The average increase on those articles is 59. 3S per cent. Despite high wages, a 6-ft. binder can be bought in the United States of America for £43 15s.; and in Canada, inclusive of the cost of 1,000 miles of freight, for £52 3s. 9d. ; as against £69 19s. 2d. in Australia; 4^-ft. medium mower - United States of America, £17 8s. 4d. ; Canada, £19 5s. 5d.; Australia, 4^-ft., £34 4s.; 9-ft. hay rake - United States of America, £10 13s. 4d. ; Canada, £11 13s. 4d. ; Australia, £18 10s.; 9-ft. spring tooth cultivator - United States of America, £22 18s. 4d. ; Canada, £24 18s. 5d. ; Australia, £32 5s. 3d.; 3 h.p. oil engine - United States of America, £25; Canada, £30 4s. 2d. ; Australia, 4 h.p., £58 8s. 6d.
– Are those Western Australian prices?
– Those prices are f.o.b. Melbourne; on account of freight Western Australian farmers have to pay approximately 7 per cent, more for all their agricultural machinery than is paid by the farmers- of Victoria. Although I have said that I recognize the need for sacrifices, I contend that it is impossible to justify concession after concession being given to manufacturers and none to other sections of the community. Take the sugar embargo. I say, decidedly, that the sugar industry should be compelled to make some concession, say, in the nature of an excise duty of £2 10s. per ton. That would bring to the Treasury between £750,000 and £800,000 a year, and would enable the Government to assist necessitous farmers, and lighten the burden in other d directions. Last night the Deputy Leader of the Country party (Mr. Paterson) quoted some figures of mine regarding the cigar manufacturing industry of Australia, the accuracy of -which the Minister for Trade and Customs (Mr. Forde) denied. I insist that they are absolutely correct. In addition to increasing the duty on cigars from 10s. to 20s. per lb. the Government has reduced the excise, so that, basing the calculation on last year’s production of 338,000 lb. of cigars, the Government made the manufacturers a gift of approximately £40,000. It is a disgrace that a government in need of additional revenue should submit to outside influences and make concessions such as that. Take again the embargoes which the Government has imposed on the importation of galvanized iron and other goods. Such action cannot be justified.
Western Australia relies wholly upon its primary products. It has some wonderful auriferous country, and if the Government would remove some of its extortionate duties and make it possible for those concerned to purchase the necessary requirements at reasonable rates, that State would rapidly attain prosperity. Although the rainfall in Western Australia is low, practically the whole of it occurs during the growing season. The State possesses an agricultural area capable of. growing wheat that is equal in size to Victoria. Western Australia can only consume a small proportion of its output; the remainder has to be exported. The great difficulty is to reduce the cost of production, so that growers may compete successfully with other countries in the markets of the world. It is tragic to think that, because of the policy of this Government, numbers are being forced into bankruptcy, and that there will be 1,000,000 acres less under cultivation this year than last year. That is not as it should be. If we are to progress, people must be encouraged to come to Australia and be granted conditions that will enable them to prosper. There seems to be a mythical idea on the’ part of the people who live in our cities that they can squeeze and squeeze the primary producers for all time. Very shortly they will realize, to their own discomfort, that that process cannot continue much longer.
It is only necessary to examine the position of big mining enterprises, like Mount Morgan, to realize what could be done in Australia. I have examined the reports of that concern very closely, and understand that the value of the millions of tons of ore still awaiting exploitation approximates £2 10s. a ton. In any other country that would be a payable proposition. It is necessary to realize that every miner employed by such enterprises is responsible for the maintenance in the same district of an additional seven or eight persons. When I was Minister for Mines for Western Australia I was astounded at the large population that would grow up around a mining field. When the Great Boulder was at its zenith, Kalgoorlie was supporting a population of some 8,000 miners, its total population being between 38,000 and 40,000, to which must be added the wood-cutters, railway employees, trades-people, waterside workers, farmers, city agents, and so on, who were dependent upon the miners for an existence. A similar state of affairs exists in the wheat industry.
Instead of encouraging our basic indus tries, the Government has put a stranglehold on them. While that continues there is not the slightest chance of making any of these rehabilitation schemes a success. First, our primary industries must be placed upon a secure footing by enabling producers to buy their machinery and other needs at reasonable prices. Every sound economic law has been abandoned, and the continuation of this must result in chaos. How tragic, too, are the losses that have been incurred through the troubles that have arisen on Australian coal-fields. With the money lost by our coal-miners in wages, as a result of strikes, the coal mines themselves could have been bought. Despite the existing depression, a big mine had to close down only the other day because of some trifling trouble among its employees. The report from a certain mine at lithgow stated that, of the twenty-seven disputes that had occurred within a certain period only two took place between the mine-owners and the men; the rest were the result of internecine troubles among the unions. Such happenings are destroying industry in Australia. I warn the Government that it i’a making a tragic error in unduly interfering with industry. These heavy tariff imposts and ‘other loads that are being placed on the primary producers of Australia represent one of the greatest mistakes ever made by politicians. No plan can succeed unless the producer is relieved of his burdens.
.- I deplore that the Government finds it necessary to make a reduction in defence expenditure to the extent of £811,590. I realize that it is a difficult matter to defend defence. That department is one to which the Government naturally looks when it seeks to effect economies in times of peace. That is the kind of folly that characterizes the man who, because he is not very financial, tears up his insurance policy. The Government is making the defence of Australia dangerously inadequate. I realize that a considerable portion of that £S11,590 represents reductions in pay throughout the Service. If the Government really wishes to make a saving in the Defence Department, let it consider the formation of an ordnance corps that will take over all the clerical work of the department. That would enable the services to operate efficiently, even on the reduced scale, and make them independent of the Public Service, as they are at present. It appears that, under present conditions, the strength of the services depends on the size of the Public Service. It was a mistake to have made the Public Service a portion of the Defence Force, because, in the event of war, the clerical employees could not take the field with the army.
In making these cuts in” our defence expenditure, we take it for granted that the British Navy can at all times defend us. It must be evident that, even though we might put up a good defence, we could not repulse any nation that regarded Australia covetously, our defence is so inadequate. We have only two cruisers and an aeroplane carrier left. The one torpedo boat we had is now being laid up, and replaced by a smaller one that is being reconditioned, on the assumption that it will cost less to maintain.
That leads me to the point that the Government intends to send a Minister to Geneva next February, to a disarma ment conference. I base that statement on a reply which the Prime Minister (Mr. Scullin) gave to a question asked by me. We have sent a number of Ministers overseas, on various’ missions. In many cases the money was well spent, as those concerned’ .profited by having their vision broadened and their education improved. But a great deal of the expenditure was a waste of the taxpayers’ money. Some Ministers toured about Europe, including Italy and Ireland, and incurred substantial expenditure that might better have been distributed in Australia. The Government now contemplates spending additional money to send an expert from among the Ministry to voice to the representatives of the nations of the world Australia’s ideas on disarmament. I have here a copy of the speech that was delivered by the AttorneyGeneral (Mr. Brennan) at the Eleventh Assembly of the League of Nations, re’garding disarmament. The honorable member stated -
Australia tells the world, as a gesture of peace, that she is not prepared for war. Australia has, however, a policy of defence and a spirit for defence. The policy is entirely consistent with the objects of the League-
And this is what we depend upon, according to the Attorney-General -
The spirit is founded- on moral considerations of equity and good conscience.
It would not be very effective during a world war, to say to our opponents that we intended to rely, for our defence, “on moral considerations of equity and good conscience.”
Russia, or any other nation, might precipitate a world war, and no one knows into what camp the different nations would be thrown in such an event. We all abhor war, and hope never to see another, but one must face possibilities. Certainly a defence “founded on moral considerations of equity and; good conscience “ would not carry us far. The honorable gentleman continued -
For these reasons, we rejoice especially in the terms of the Pact of Paris, sometimes called the Kellogg Pact, out of respect to the eminent American who sponsored it, and wehave gladly subscribed to the bond which rules war out of the ambit of national relations. In our own - limited sphere in Australia, we have given practical proof of our earnestness in this regard.
I draw particular attention, to the next statement that I shall quote. It is as follows : -
We have drawn our pen through the schedule of military expenditure with unprecedented firmness. We have reversed a policy which has subsisted in Australia for 25 years, of compelling the youth to learn the art of war.
The Attorney-General (Mr. Brennan) calls teaching the young men of Australia to defend the country in which they were born “ the art of war and he objects to that on “ the moral considerations of equity and good conscience “.
The Government is now contemplating sending another Minister abroad, at great expense, to make another gesture to the world; but, as the Sydney Morning Herald pointed out in its comment on the Attorney-General’s speech, the gesture is not to the world, but to the Trades Hall. As I do not desire to deal “with these matters in a party spirit, I shall go no further in this direction, except to object to the tremendous reductions that have been proposed in our defence expenditure, to the itter disregard of efficiency.
I realize that the Defence Department must accept its share of the general reductions that are being made; but it is proposed to reduce the expenditure on the Navy alone by £363,436. This is a blow from which the Navy will not recover for many years. Many of the men who were trained in the Australian Naval College at Jervis Bay have been attached to the British Navy, and have reflected great credit upon Australia, and it is regrettable that their services have beendefinitely lost to their native land.- I regret also that many members of the Staff Corps connected with the Duntroon Military College, which has now, unfortunately, been scrapped, have also been retrenched, in some cases by a subterfuge. I am glad that the Minister for Defence (Mr. Chifley) intends to try to do something to help these men. They were told many months ago that there were openings for them in the Civil Service, and that if they did not accept them they would be retrenched; but they have since been told that there are no openings in the Service for them. The Commonwealth spent thousands of pounds in the training of these men, and their general experience, apart altogether from their naval and military knowledge, would be invaluable to the Service.
I wish to refer to one other matter connected with the Defence Department. I have asked the Minister for Defence a number of .questions regarding the manufacture of metals at the Munitions Supply Branch of the department, at Maribyrnong. It is well known that this branch has been manufacturing sheet, brass and selling it to the trading community. I ascertained in reply to questions that the Government has given the selling agency for its entire output to one firm on a commission basis. When this information became public, a deputation of the principal Melbourne metal trading firms waited upon me and protested against the granting of this monopoly. The trading community generally objects to the Government engaging in commercial undertakings in opposition to private enterprise. Whenever it does so it creates unfair conditions of competition, for it is not called upon to pay income tax, sales tax, rates, and other overhead charges which private enterprise has to meet. Consequently, its competition is not fair to the general community. Still, we have to accept the fact that . governments - and not Labour governments only - have embarked upon various socialistic enterprises, and we must pay the price of it. By allowing one firm to distribute the metals manufactured at Maribyrnong, the Government has inflicted a great injustice upon the community. In this connexion I have received a letter signed by the representatives of the principal manufacturing firms in Melbourne, which reads as follows : -
Dear Sir, - Referring to the interview byMessrs. Anderson, Warburton, and the writer, relative to the reply given to you by the Minister for Defence regarding supply of brass sheets by the works at Maribyrnong, we beg to bring under your notice a very unsatisfactory position which merchants who distribute brass sheets, and whose signatures are attached hereto, have to submit to. One firm in particular lias made inquiries from the appointed agents, Messrs. Roves Brothers, but a reply was received that they would require a specification of their requirements before submitting a quotation. This is contrary to the recognized method of supplying quotations, where a basis price is given, and standard extras for the various sizes, gauges, and finish, is operative. This firm also experienced. considerable delay in the execution of an order, which was placed with them some time ago. The signatories to this letter are all taxpayers, who strongly protest against the monopoly which is being given to one firm for the distribution of the output of the Maribyrnong works, and strongly urge that all merchant distributors to the trade should be placed on an equal footing. These firms perform a service to the community by supplying from stock, which they require to carry, materials to manufacturers who, in many cases require to be supplied on credit terms. The quantities of these orders vary considerably from single sheets to larger quantities. In the conduct of our trade we have demand for wider sheets than those which can be supplied from Maribyrnong, the limit of which we are informed, is two feet, as per copy of letter attached. It seems to us to be unjustifiable from a protectionist standpoint that these wider sheets, which arc used for special work, should be dutiable at the same rates when they cannot bc produced locally. We claim that these goods should bc admitted free of duty.
We would take this opportunity of referring to the reply given to your inquiry No. 4 “ that the employees were working full time on the manufacture of these sheets for departmental and commercial purposes “. We are not in a position to know how many men are employed in this special industry, but the demand throughout Australia at the present time, both commercially and for departmental requirements, is very low, and full time employment in this one special industry is exceptional. Could you obtain from the Minister the prices at which these sheets are being sold?
The letter is signed by Currie and Richards Proprietary Limited, John Danks and Son Proprietary Limited, Briscoe and Company Limited, Thomas Warburton Proprietary Limited, and George White and Company. I should mention that the members of the last- named firm are not related to me in anyway, and have no connexion with the firm with which I am associated. Seeing that the Government desires to reduce expenditure, I suggest that it should discontinue paying an unnecessary selling commission to the firm which at present holds the agency for the sheet brass’ manufactured at Maribyrnong. There is no reason why it should pay2½ per cent. on this output, for it is in a position to sell for spot cash at the place of manufacture. If the Government intends to adhere to the policy of appointing selling agencies, I suggest that it should follow it through all its departments, and appoint a distributor for the output of the Small Arms Factory, the
Commonwealth Clothing Factory, and other enterprises. But I urge the Minister to review the action which the Government has taken in connexion with the Munitions iSupply Branch, and make it possible for any firm to buy the output from Maribyrnong without paying the commission.
I wish now to make some comment upon the sales tax proposals of the Government. When this form of taxation was first introduced last year it was strongly opposed by most of the members of the Opposition, and the supporters of the Government, and even Ministers, admitted that they were not happy about it. In my opinion, this is the most irritating tax that has been inflicted on the commercial world. It is also the most crudely applied piece of legislation on our statute-book. When the original sales tax measures were brought down, I expressed my opinions upon them with some force. In the course of my speech I read a telegram from the Hardware Association of Victoria in which it was stated that if the Government would examine the balance sheets of the various firms engaged in the hardware trade, it would see that practically all of them’ were trading at a loss, and that the imposition of the sales tax of2½ per cent. would add to their liabilities. The statements in that letter apply with even greater force to-day. What were then to some extent matters of conjecture are now demonstrated facts. If the Treasurer would even now examine the balance-sheets of the firms engaged in ‘the hardware business, he would find that many of them are operating at a dead loss, and are only able to carry on with the aid of their reserve funds. Of course, many firms unfortunate enough not to have had reserves have gone out of existence in the last twelve months, and bankruptcies and unemployment will now further increase. In spite of these facts it is proposed to increase the sales tax from2½ per cent. to 6 per cent., an increase of140 per cent. Honorable members opposite set up indignant protests whenever it is suggested that wages must be reduced by even a small percentage. They rarely miss an opportunity to make some reference to the fact that the Arbitration Court recently reduced wages 10 per cent. But what of the proposed increase of 140 per cent, in the sales tax on the commercial community, and the proposal to increase the primage duty from 4 per cent, to 10 per cent., an increase of 150 per cent? The trading community is well aware that these are extremely difficult times, but surely the Treasurer must realize the futility of reducing wages on the one hand, and of increasing the cost of living on the other. The conference of Commonwealth and State Ministers was not unanimously in favour of the proposal to increase sales taxation and primage duty. A minority reported in opposition to this suggestion.
– The honorable member is aware that the report of the economists and experts recommended that this taxation should be increased, and the conference made that report the basis of its decisions.
– That may be true, but two under-treasurers, at least, were strongly opposed to any increase in sales taxation and primage duty and signed a minority report to that effect. We all know that a point may be, reached when taxation increases become ineffective. The Government increased the rates of income tax last year, but did not receive the sum from this source that it expected, and the sales tax was well below the estimate. .It is very likely that the further increase in sales taxation will fail to achieve the desired end. The commercial community is quite prepared to do its part to rehabilitate the finances of the Commonwealth. I am thankful that the Government has agreed to simplify the sales taxation machinery to some extent. Certain proposals made with this object by the Opposition last year met with rather scant consideration. Our sales taxation legislation. displays a sorry lack of business sense - I say that with due respect to the sales tax expert who was brought here from Canada, and to the officers of the Taxation Department. The original Sales Tax Bill provided that business houses must submit returns of all sales within seven days, although every one is aware that the usual business custom is to allow 30 days’ margin. The Government was not willing last year to extend the time for the furnishing of the returns beyond 21 days. This meant that business houses had to pay their sales taxation before they were paid for the goods they sold. In this connexion I direct the attention of the Treasurer to the following telegram from the president of the Victorian Hardware Association, which -reached me to-day : -
Chamber of Commerce, Victorian Hardware Association, and all merchants I have seen, entirely agree that extension should be for one month; present time much too short, and causes great inconvenience.
Although many city merchants are carrying country storekeepers, they are obliged to pay sales taxation on goods in respect of which the country storekeepers are given at least a month’s credit, and frequently more. It is not fair that our merchants should be called upon to finance a government which has such a record for squandermania.
– To which government is the honorable member referring?
– To this Government. In the circumstances, I trust that the Treasurer will accept the suggestion of the Deputy Leader of the Opposition that the time for the furnishing of sales tax returns be extended to 30 days. I hope it will be.
Another amendment put forward by the Opposition last year was that it should be compulsory to state the “ plusage “ at the foot of invoices and cash slips, in order to prevent profiteering, and make it easy for the Government to police the sales tax. While the position remained obscure there was a good deal of evasion, because a dealer who bought from one firm and sold to another, and had. no registered office, might not have his books examined to see if he had paid the sales tax at all. As the Treasurer has also pointed out, some firms offer an incentive to buy by saying that their prices include the sales tax. If the amount of the tax is plainly stated on invoices and cash slips, and no longer hidden, the Government and the public can plainly see what sales tax is being paid, while there is simplification in accounting and collection by the Government. I am pleased to see that an amendment is now proposed which I moved last year, that any increase in the sales tax may be claimed from a client in the same way as an increase in a customs duty.
When goods are ordered overseas for a buyer, and the customs duty is increased, it is only right that the buyer should bear the extra charge, as the merchants’ charges for such an indent may be less than the customs increase. The Treasurer has said in the budget that the additional sales tax will not be collectable, on sales of goods under contract, but there is a doubt about what this means “which I hope the Treasurer will clear up. I have received telegrams on this matter asking whether traders will he liable to pay tax at the new rate with respect to goods delivered on Saturday last, but sold before that date. What is generally supposed is that, provided the goods are in existence, and were sold on that date, it is immaterial when they are delivered, and the old rates will apply. For example, it is assumed that if goods were sold last Thursday, and were in stock and had not to be manufactured, the tax would be 2$ per cent., and not 6 per cent.
I also referred’ to the position of retail tailors, when the Leader of the Opposition was Acting Treasurer. I pointed out that the small business man is heavily penalized. A wholesale manufacturing tailor pays sales tax on the turnover of the goods that he manufactures, but a make-to-order tailor sells direct - to the public, and is charged sales tax on his retail prices. The reason the latter is not -treated in the same way as the wholesaler is because the Government claims “that in his case a wholesale price cannot “be fixed. It is obvious, however, that this could be done, just, as a wholesale price is fixed at the customs. The tailors would agree to a reduction of 20 per cent, or 25 per cent, from their retail prices, and pay the sales tax on that figure as the wholesale price. I hope that the Treasurer will agree to the extension of the period for the payment of the sales tax to 30 days, give a clear definition on the subject of contracts, and also take into consideration the position of retail tailors. I trust that the Minister for Defence will make a statement concerning the distribution of the productions of the Munitions department, endeavour to minimize the reduction on the actual training side of defence, and apply it more to the administrative side, which has swollen out of all proportion since the late war.
.- By its courageous efforts in passing iU financial emergency measures, and by presenting this budget, the Government, in my opinion, has gone a long way towards securing the financial and economic rehabilitation of Australia, and it deserves much credit for what it has done. I agree that this course might well have been followed six months sooner, for in that case we should now be nearer a complete recovery from our present difficulties. I am sure that none of us hae derived any pleasure from th<* cutting down of invalid, old-age and war pensions, and the reduction of the wages and salaries of public servants, but the action taken will prove to be in the interests of all sections. If nothing had been done, I believe that before many months had elapsed the reductions, instead of amounting to 20 per cent., would have reached 50 per cent., because the money required to meet the expenditure would not have been -available. Any unbiased person must realize that, owing to the necessity for a reduction of the cost of production and the cost of living, the Government took the only possible course open to it. When these costs have been reduced, the workers and the pensioners will be as well, if not better, off than before, and many of the 300,000 or 400,000 men who are now looking for work will find employment.
– The last cut in wages made by the Arbitration Court did not increase employment.
– Drastic action was required, and I believe that the Government has done what is right.
It is generally recognized that the position of Australia is most serious. A year ago, many misguided persons, including prominent political leaders, ventured the opinion that the depression was the result of a deep laid scheme on the part of the capitalists to reduce wages; but everybody now realizes that it was caused by the drop in the prices of our principal primary products, and the extravagant borrowing and spending policy of both governments and private individuals. The prices of our primary products, which constitute about 96 per cent, of our exports, have fallen by about one- half, and we are about £50,000,000 short of the amount that has recently been received for our wool and wheat. The closing of the loan market to Australia was the finishing touch. [Quorum formed.] Mr. Lang, the Premier of New South “Wales, declared a year ago that there was no real depression, but that the whole cause of the trouble was that the capitalists were trying to cut down wages. ‘ He appealed to the people, and promised them that if they returned him to power his government would borrow more money, and there would be no further trouble. We now have the spectacle of New South Wales, potentially the richest State in Australia, suffering more from unemployment and other distress than any other part of the Commonwealth. Mr. Lang has been totally unable to bring about the prosperity that he promised the people of that State. I do not know whether he has gone mad, or whether he is playing into the hands of the communists by trying to bring about a state of affairs which will make New South Wales a fertile field for communist propaganda. I feel quite sure that one or other of those explanations of his conduct is the correct one. He is certainly going the . right way to ‘ruin New South Wales and Australia, and I am glad that this Government is pursuing a different policy, as demonstrated by this budget, and the bills it …… introduced to give effect to the resolutions of the Premiers Conference.
Besides these measures, however, other . steps are necessary to the complete rehabilitation of Australia. The tariff should be reduced by at least 22-J per cent, to bring it into Une with the reduction in wages, salaries and interest. Until that is done costs of living and production cannot come down sufficiently. We should, if possible, get back to the 1914 tariff, and certainly the tariff should not be higher than it was in 1922. Even that was, in my opinion, too high. The present tariff is penalizing the primary producers, who are the mainstay of. the country, as every one acknowledges. They produce 96 per cent, of Australia’s exports, and represent 73 per cent, of the wealth of Australia. We all know the serious position in which they are now. After two years of drought, the wheat-growers and wool-growers, who produce most of Australia’s wealth; are. confronted with a drop of approximately 55 per cent, in the price’ of their products. They are now producing at a loss, and this cannot go on. There can be no return to prosperity until something is done to enable the primary producers to carry on at a profit. The present tariff constitutes a serious handicap, and ought to be reduced. We have tried a high tariff for years, and it has resulted in more and more unemployment, and has made it increasingly difficult for the primary producers to make ends meet. Surely it is time that we reversed our policy, and reduced duties.
It is also necessary to achieve a greater measure of co-operation between capital and labour, and it is impossible to do this until we abolish arbitration courts. We have tried compulsory arbitration here and in New Zealand. No other country will have anything to do with it. Most people admit that it has been a failure both here and in- the sister dominion, where, instead of bringing about industrial peace and prosperity, it has had the opposite effect. It has had the effect of ranging the employers and employees’ against each other in two opposing camps, making enemies of them. We should adopt the system followed in America and other progressive countries, and settle industrial disputes by conciliation at round-table conferences between the parties directly concerned. We have had more strikes and bitterness in Australia since the setting up of arbitration courts than ever we had before, and the sooner they are abolished the better. It is impossible to have co-operation between capital and labour under a system of compulsion, and, until the parties in industry co-operate, we can never have peace in industry.
– There was no peace in industry under the old system.
– There was more than there is now. If honorable members opposite who talk in that strain would only study what has been done in other countries where the conciliation system operates, they would change their minds. Let them read the report of the delegation which visited America two years ago, and they will see what industrial cooperation has achieved in that country. There was a series of great strikes immediately following the war, but with the introduction of the conciliation system all differences were reconciled, and industrial peace has reigned ever since. At that time they adopted in America the system of payment by results, and we shall have to do the same here. We cannot go on paying wages on a cost of living basis. We must have value for the wages paid. Much of the trouble in which Australia finds itself to-day is due to the fact that governments borrowed enormous sums of money, and spent it on works which can never pay anything like interest on their cost, because the labour employed was not paid according to results. In America, and in other countries, the system of payment by results has proved a great boon, not only to industry and the country at large, but to the workers themselves.
– And yet there are 11,000,000 persons out of work in the United States of America.
– The honorable member’s information is incorrect. I do not think there are more than 5,000,000 or 6,000,000 unemployed in the United States of America. It is inevitable that there should be some unemployment there, because America’s customers overseas have not been able to go on buying from her owing to the world depression. The unemployment has not been caused by the system under which the United States of America has been working. Since the introduction of the system of payment by results in America, industry has enjoyed a period of great prosperity, and thrifty workers have invested money, many of them in the very industries that employ them, and the workers actually own 25 bunks. I am aware that honorable members opposite are always against this system, although I do not know why. It is, of course, a system which is of no use to loafers or .lazy workers, but it is certainly in the interest of industrious workers. That has been proved in Canada, the United States of America, and other countries in which it is in operation. It is time something was done to restrain those persons who are going about the country preaching class bitterness, industrial strife, and hatred of capitalists and employers.
– The honorable member and his friends have got the basic wage down to £3 a week; what more do they want
– We do not want to reduce wages, but we wish men to earn the wages that they receive. A great deal of industrial trouble is due to misunderstanding. The great majority of workers are decent, well-meaning men, who want to give their employers a fair deal, and the majority of the employers wish to do the proper thing by their employees. If both sides were to send reasonable men as their representatives to a conference to discuss such differences as arise from time to time, they would soon come to some satisfactory working arrangement. If a spirit of charitableness and sweet reasonableness were to prevail at such meetings, all difficulties could be easily overcome, and an era of peace and prosperity would be ushered in. This can never come about, however, while we have a system of compulsory arbitration, and while persons are going about stirring up bitterness and strife where there should be co-operation and friendliness. I have no desire to preach, but I feel very strongly that until this spirit of class hatred, which is so sedulously preached and so eagerly imbibed, is replaced by one of charitableness and toleration, no laws which this or any other Parliament may pass can do much to settle those differences between labour and capital which are continually disturbing industrial relation* to the serious loss of the whole community. [Quorum’ formed.]
.- Last Friday week, when I was about to draw attention to the withholding of information on the part of the Government respecting the cost of car hire for Ministers and others, a Minister stood at thedoor holding it just ajar so as to prevent a quorum being formed. I am now taking this opportunity to refer again to thissubject, and also to some of the rumours that are afloat respecting the abuse of Ministers’ privileges. The very fact that a Minister deliberately caused the House’ to be counted out so as to prevent me from protesting against the action of the Government in withholding information is evidence that the Ministry has something to bide. When I asked for that information the Prime Minister (Mr. Scullin) claimed that the cost of obtaining it would be £300. That is a most inaccurate statement, and deserves a much stronger term than “.inaccurate “. Does the Prime Minister suggest that the departmental method of bookkeeping is so inefficient that it would cost £300 to ascertain from the dockets or the files the cost of motor hire, and of the use of government motor cars by Ministers? That is the kind of thing that the Prime Minister of this country has tried to put over me. When I asked to be allowed to examine the files so as to obtain for myself the information that I had asked for, the answer that I received was that I had not the ability to extract it from the files.
– The Government was not prepared to let the honorable member loose among official documents.
– I should probably take more care of the files than would the honorable member, if they were placed in his charge, and if the question of honour is involved, let me say that I should be more likely to preserve silence in respect of the information contained in those files than would the Attorney-General himself. I have a suspicion that the honorable gentleman is one of the Ministers who have abused their privileges in connexion with the use of motor cars, particularly in Melbourne, if the rumours that I have heard are accurate. The Government refused my request to be allowed to examine the files. I, therefore, take this opportunity to protest against its action in refusing to make available information that directly affects the members of the Ministry. The honorable member for Bendigo (Mr. Keane) recently asked twelve questions on one day. He asked thirteen questions on the next day, and another eleven questions within the next four days, making a total of 36 -questions. To every one of them an answer was given, but those questions did >not affect the Ministers individually; there was no reference in them to the abuse of their privileges. How many of the thousands of questions asked in this chamber have received the following reply, which I received to my two questions concerning the use and hire of motor cars : -
I have caused inquiry to be made into the cost involved in preparing the information requested by the honorable member. As a detailed examination of the accounts of the various Commonwealth departments would be entailed, necessitating considerable expenditure, represented by the salaries, &c, of officers, I do not feel justified in authorizing the work to bc proceeded with.
– The honorable member for Martin (Mr. Eldridge) received similar replies on two occasions, to my recollection.
– I am glad to hear that I am not the only one; but I guarantee that there have not been twenty answers similar to those which were given to my two questions. That is not the way to treat a member of this Parliament, nor is it a way to inspire in the people of this country confidence in the integrity of Ministers.
– The honorable member stands alone.
– When the parrot from Batman has finished, I shall continue my remarks
– I regard the term “ parrot,” as applied to the AttorneyGeneral, offensive, and I ask the honorable member to withdraw it.
– I withdraw and apologize to the parrots. Rumours are afloat that some Ministers have been using government motor cars to travel from Sydney and Canberra to Jervis Bay to spend week-ends there. It is stated that that practice has been going on for some time. If Ministers are in the habit of spending week-ends at Jervis Bay, the taxpayers of this country should not be asked to provide the necessary petrol and motor cars. I have referred before to the rumour that Ministers’ wives use government motor cars in and around Melbourne. That has been denied by the Prime Minister, but, as the position is to-day, I cannot accept his word.
– The Commonwealth has £800,000 worth of property at Jervis Bay, which entails a ministerial inspection now and again.
– That is so, but I have heard a rumour that a Minister and hia family, together with Jock Garden and his family, travelled to Jervis Bay in government motor cars and spent three days there. I cannot imagine a Minister requiring the company of Jock Garden to make a ministerial inspection. If I cannot get information by fair means, honorable members cannot blame me if I try to get it by other means. Perhaps, when I again ask a question relating to ministerial expenses, the Prime Minister will not attempt to dodge it. Another rumour is that two Ministers, in particular, . repeatedly use government motor cars to attend race meetings in Melbourne on Saturday afternoons, and that the motor cars, with drivers in charge, remain at the racecourse until the meeting is over. If that is correct, let me tell the Ministers concerned that the taxpayers of this country will not stand for that sort of thing. The repeated efforts of the Government to prevent me from obtaining information have roused my suspicions, because where there is smoke there is fire. I am told that a Minister who lives within 70 miles of Melbourne uses a government motor car to travel to and from his home, although a frequent train service is at his disposal. Government motor cars are not intended for that purpose, and I am anxious to know whether that rumour is correct. I challenge the Government to supply me with the facts. I challenge it to let me examine the departmental books, so” that I may ascertain whether these rumours are true. The practice in Canberra is to engage a motor car to take a Minister to and .from the railway station. Why should a car be provided for each Minister? Most honorable members, including myself, ride in the bus. I do not expect Ministers to do that, but surely two Ministers could travel in one car.
– A car will bold four persons.
– That is so.
– If the dicky seats were used two more persons con Id be carried.
– At a time when the Government is reducing the old-age pension by 2s. 6d. a week and compelling the lower-paid public servants at Canberra to live on £182 per annum, it should not be wasting, unnecessarily, petrol, oil and the time of government motor-car drivers. Ministers are only flesh and blood.
– The honorable member talks like a cockatoo.
– I rise to a point of order. You, Mr. Acting Chairman, have ruled that it is out of order for one honorable member to refer to another honorable member as a parrot. I ask whether it is in order for the honorable member .for Corio (Mr. Lewis) to refer to the honorable member for Angas as a cockatoo.
The TEMPORARY CHAIRMAN.If the honorable member for Corio used the word “ cockatoo “ in reference to the honorable member for Angas, he must withdraw it.
– I do so, and with deep respect I apologize to the cockatoo.
Mi-. GABB. - Since endeavouring to obtain information in regard to the expenditure on government motor cars, I have received a number of letters, some of them, evidently, from inside the departments. I have a number of questions that I wish to put to the Minister at the table. I would put them on the notice-paper, were it not for the fact that they would receive an answer similar to that which was given to previous questions. One letter reads -
I read with interest your questions in Hansard of the 7th July. In view of the fact that a great number of men are on the dole in Canberra or rationed to the extent of about two days work in a week, I think it necessary to bring, about a reduction of the waste of public money that goes on in Canberra by the unnecessary use of official motor cars. Will you ask Mr. Blakeley the following question : - What is the total cost per annum of running the official cars exclusively used by (a) Ministers-
And in passing, I may mention a rumour that the motor car hire for the Minister for Home Affairs (Mr. Blakeley) alone was more than £200 in one year.
– The honorable member is much too modest. The cost was much more than that.
– It should not have been. If it was more, that confirms my expecta- tion that the Minister, would be extravagant with other people’s money. [Quorum formed.] The letter continues -
What is thu total cost nor annum of the running of official motor cars used exclusively by (a) Ministers; (6) the Civic Administrator; (c) the Lands Officer; (d) the Superintendent of -tha Commissariat Branch; (c) the Superintendent of Parks and Gardens; (/) Forestry School; and (tj) Paying Officers?
In view of the fact that the residence of the Civic Administrator is less than one mile distant from his office, what justification is there for a high-powered ArmstrongSiddeley car being allowed for his exclusive use?
– It is not for his exclusive use; other officers use it.
– Will the Minister promise that if I put on the notice-paper a question relating to his personal car expenses for one year, he will supply the information ?
– I give the honorable member no assurance whatever.
– It is evident that the Ministry is determined that its motor car hire bill shall not be known to the public. The burking of my questions confirms my opinion that some of the rumours I have heard are true, and that extravagant use is being made of official cars by Ministers and government officials. 1 also asked for information regarding the travelling expenses of Ministers’ secretaries between Canberra, Sydney, and Melbourne. Again my curiosity has been baulked. “Does the Prime Minister expect me to believe that the Commonwealth system of bookkeeping does not require the keeping of a separate account of the salary and allowances paid to each officer? I cannot believe that, and I am- certain that the travelling allowances paid to Ministers’ secretaries could be readily ascertained. When I was refused information with regard to all the secretaries, I limited my question to only two, the secretaries to the Minister for Trade and Customs, and to Senator Daly. Those two gentlemen have drawn the highest sum in travelling allowances. To that question the Prime Minister had the cheek and impudence to reply-
– Order ! That remark must be withdrawn.
– I withdraw it readily, and I refrain, from substituting a stronger expression only because that also would be ruled out of order. The Prime Minister refused to give me the information because of the cost of compiling it. What are we to think of a Ministry that will try that kind of bluff? I would like to say that the right honorable gentleman, in offering that transparent excuse, is something which you, Mr. Chairman, will not allow me to call him. I object to allowances being paid to secretaries who travel between Canberra and Melbourne every week-end, especially if their homes are in Melbourne. They leave Canberra at 8.30 p.m. on Friday, and arrive in Melbourne at noon on Saturday. I do not think that Ministers employ them on Saturday afternoon or on Sundays. They do some work on Monday, and catch the train back to Canberra at 5.30 p.m. In addition to their travelling expenses, the Government has to pay their railway fares, including the charge for sleeping berths, and I cannot believe that on Mondays they render service commensurate with the cost to the taxpayer of travelling expenses from Friday to Tuesday, plus railway fares. These practices should be more closely investigated, especially at a time when we have to reduce the old-age pension by 2s. 6d., cut war pensions by 20 per cent., and lower some Public Service salaries to £1S2 a year. The policy of making fish of one and flesh of another in the Public Service should cease. Where economy can be practised it should be practised, and at no time was the elimination of extravagance more necessary than it is to-day.
.- The honorable member for Riverina (Mr. Killen) urged a reduction of the tariff in the interest of the primary producers. I agree that that worthy section of the community should be given, in respect of tariff duties, some relief ; they are particularly in need of help at the present time. But the honorable member in emphasizing the need for reducing the cost of production repeated the old fallacy that a big proportion of the cost is due to the industrial arbitration system. I have had extensive experience of arbitration, and I believe that to some extent it has outlived its usefulness. In the primary industries it is doubtful whether any award is observed ; but when the award rate is only £3 lis. a week, there can be no justification for the complaint that arbitration imposes an unnecessary load on the employers. The honorable member for Riverina is likely to be disappointed of his aspiration that one day Australia will revert to payment by results. That system will never be acceptable to Australians. The honorable member referred to the wages paid in the United States of America. I admit that at times high wages have been paid in that country for piece-work, but every student of the subject knows that the faster a few men work for high money the more unemployment they cause. To-day there are in Australia at least 100,000 men whose jobs are gone for ever. The honorable member for Riverina suggests as a remedy payment by results. Ordinarily the man who does well at that system is young and strong, and for a few years only he may earn twice the award rate; but during that time he consigns his mates to certain unemployment. I quote an actual instance of that. In the Melbourne railway yards, under the old day-labour system, 300 men were employed in cleaning 190 cars. When the department introduced speedingup, the number of men was reduced by 50 per cent, in six months. I may be told that the work was then done more cheaply. The 100 men who were displaced were thrown on the scrap heap, without jobs, and became a charge on the community. I believe that the honorable member for Riverina (Mr. Killen) is sincere in the views that he expressed this evening, but the persistency with which some draw comparisons between the United States of America and Australia is amusing to me. According to the latest statistics the United States of America now has 11,000,000 unemployed. Between the years 1918 and 1926 production increased in the manufacturing industries of the United States of America by 29 per cent., and at the end of that period 2,000,000 fewer were employed in industry. It is obvious that, in these days of smashed awards, rural employers obtain labour at any old price. I repeat what I have said previously, that if I were dictator in Australia I should proclaim a working week of 24 hours, and so give a good proportion .of our unemployed a chance for obtaining a job. [Quorum formed.] Our great burden in this country is unemployment. When the Prime Minister was in Great Britain the Acting Prime Minister (Mr. Fenton) had a very rough time from this party because of the unemployment, but I give him credit for making £500,000 available for its relief. Much water has flowed under the bridge since then, and to-day the position is twenty times worse. Yet the present budget promises no relief of the problem. Our loan expenditure has been reduced from £43,000,000 to £14,000,000, and a further £14,000,000 has been saved in other directions, so that £43,000,000 less will be spent in the next financial year. There is no loan money from the Old Country, and none in Australia. Although 300,000 men are out of work, the Estimates presented to honorable members will not provide a job for one man. I stress what I have urged before, that we should leave in abeyance the payment of our overseas interest, as is suggested to the European nations under the Hoover plan. For some extraordinary reason my suggestion has fallen on deaf ears. It is estimated that, as a result of the Hoover plan, Australia would benefit to the extent of £4,028,000.
In an excellent speech the Leader of the Opposition (Mr. Lyons) reached a certain point, but failed to continue and say something that we wanted him to say. The honorable gentleman admitted that the budget is good, as far as it goes. Apparently he intended to convey the opinion that it lacked any provision for the absorption of unemployed. I am sorry that he did not develop what was in his mind. I believe, as must every other honorable member, that while private enterprise is the employing medium, government expenditure is necessary, at a stage like the present, to provide ‘ the credit for the necessary work to be done. Even if the Government had made available in the Estimates £50,000 for the relief of unemployment, in the search .for gold, some good would have been done. Honorable members may be amused at that suggestion, but I remind them that the Victorian Government expended £12,000 on a similar scheme, with the result that 15,000 men engaged in the search for gold, the majority of whom earn at least enough to live on. The important thing is to absorb as many as possible of our unemployed in useful work in the country districts. The honorable member for Indi (Mr. Jones) expressed the desirability of encouraging people to grow tobacco. I believe that small plots of land should be given to the people. Hardwood houses could be erected, made of timber split by unemployed, and these men given a chance to make good. This budget, unfortunately, makes no reference to any such constructive scheme, and contains not one ray of hope for the future. The £4,000,000 that will be made available to Australia under the Hoover plan should be handed over to some authority and expended on works that will earn their capital cost.
– The Hoover plan is as yet only a proposal, and has not been brought to a conclusion.
– To my mind the utterance of the Prime Minister on the subject a few days ago clearly indicated hat that amount would be credited to ustralia. As a result of reading certain documents, which no doubt other honorable members will quote during this M>ate, I am more than ever opposed to this rehabilitation plan. It was stated that banks and investors would reduce interest rates on loans, overdrafts, and private mortgages, but although the majority of the people are called upon to bear a portion of the sacrifice, there is no evidence of that promise being honoured. My slogan is, “ Balance the budget by putting men into work, not by throwing them out of work “. The Government is reducing wages and expenditure on social services, and soon private employers will be following suit.
Now that the honorable member for Riverina is back in the chamber I repeat that the system of payment by results, adopted in America, has proved that the faster men work the more of their mates they doom to unemployment. There is insufficient work in the world to go round.
– Evidently the honorable member believes in a system of day abour, and the Government stroke.
– I suggest in all sin- cerity, that I have had as great an oppor tunity to observe the workers of Australia as has any other mau in this chamber. I believe that, during the term that I was head of an important industrial organization, it would have been impossible to find 100 loafers of its 60,000 members. Take any activity you like, it will be found that the Australian worker compares with any other to be found in the world. All he wants is reasonable hours, good conditions, and fair rates of pay. I have never been overseas, but all the authorities support me in that contention.
– The Australian worker is all right, but our system is wrong.
– The honorable member desires the abolition of all industrial organizations. He wants Australia to follow the example of the United States of America, which supports the principle of the open shop, the company unit, and individual bargaining. Despite what has been said in this chamber this evening, emasculated as are our present rates of wages, they and our conditions of labour are infinitely better than those which obtain in the United States of America. Australia will never adopt a system of speeding up and payments by results. Admitting that our system of arbitration is wearing itself out, chiefly because of the existing economic position, which enables employers to smash awards, I regret that the budget contains no hopeful provision for the absorption of our unemployed.
– After a long life, with much experience of many phases of existence, I have come to the considered opinion that neither freetrade nor protection in the true sense of the words will eliminate poverty, and employ the people. I know that the Almighty made man and woman on this earth. He did not create the aristocracy and kings. He did not create rich men and poor men, yet, by the manipulation of cunning brains, captial as it exists in the world to-day, has far more power than it should have. Consequently, the people suffer. I think that it was Abraham Lincoln who said that, “ God must have loved the common people, because he made so many of them “. But the laws have always been used for the protection of property, and not for the protection of humanity.
For the benefit of the -honorable member for Angas (Mr. Gabb) I may say that in the early years of my parliamentary life I thought it was the duty of honorable members to remain in the chamber” during debates. Consequently, I frequently called for quorums. This made me unpopular. I think some of my colleagues of that time would have liked to boil me in oil. The honorable member referred, in the speech which he delivered a few minutes ago, to the use of motor cars by Ministers. It would be a good thing, in my opinion, if every Minister had a motor car for his own use. I should not object to the use of motor cars during week-ends if it resulted in benefit to the health of Ministers and enabled them to perform their parliamentary duties more effectively. A Minister’s time is more valuable that that of a private member. It is desirable that we should save the time of Ministers as much as possible. It would be an excellent thing from the point of view of the country if, when honorable members took the oath of fealty, they also pledged themselves to devote the whole of their time to their parliamentary duties. In this connexion the example of the former Prime Minister, Mr. Bruce, who appointed a man in his place in his private business, was highly commendable. I should like to see every honorable -member under an obligation to attend daily some committee associated with the work of one or other of our public departments. The law-maker should undoubtedly be the most important person in the community. If bad laws are made the people inevitably suffer. I have often thought that it would be a good idea if the emoluments of Ministers were the same as those of private members. This would eliminate a great deal of grasping and greed by the “gold diggers “, to use an Americanism. Every possible convenience should be made available to Ministers in order to conserve their time for important business.
The honorable member for Riverina (Mr. Killen) has suggested that there should be a reduction of 22£ per cent, in our customs duties. I can hardly believe that he would have made such a suggestion had he carefully studied the tariffs of the world. In-passing, may I express my regret that the publication of Kelly’s Tariffs of the World has ceased? This was a most valuable work. The two most scientific tariffs in the world are, in my opinion, those of Japan and America.
– Ours is highest.
– The honorable member is hardly accurate in that statement. The American tariff is the highest. I recollect, from my examination of various tariffs some time ago, that Japan imposes a duty of 355 per cent, on tobacco.
One of the main objects of the Labour party is the elimination of poverty. It was that objective which caused me to join this party. In a country which produces so much food as Australia, it is deplorable that there should be any hungry people. We should bend all our energies to the elimination of poverty. I have done this. My constituents have always understood that this was my objective. At any time during my long parliamentary experience it has been possible for my constituents to secure my resignation. At one time 255 signatures would have been sufficient to cause my resignation. The late David Syme wrote in his splendid book, Representative Government in England, that the constituents of any member of Parliament should have the power to remove him from his position, just as the King has power to dismiss immediately his advisers. [Quorum formed.]
I am glad that for 42 years I have retained the confidence of my constituents.
The only free - really free - trade colony in which I ever lived was Hong Kong. I spent five years in the West End of London - not the slums of the East End - and the misery and wretchedness which I saw there caused me to declare a vendetta against poverty. Neither protection nor freetrade removes poverty. Protection establishes industries. We all know that this is the age of machinery. In my opinion, poverty will never be eliminated until the Government is able to obtain control of all machinery. In order to show the effect that machinery has had on the industrial life of the community, I make the following quotation from page 58 of Hattersley’s This Age of Plenty : -
It is stated, for instance, that the introduction of the use of oil’ fuel on the Cunard liners at once reduced the number of stokers required from 951 to 263. Or again, we are told that in 1913 Messrs. Horrocks, Crewdson & Co. Ltd. produced 34,000 ‘ miles of cotton cloth with 330,000 spindles and 6,500 employees. To obtain this output in 1700, 172,000 employees would have been required. The same is true of every modern industrial country.
The late Judge Higinbotham,” of Victoria, performed a great service to mankind, and, incidentally, erected his own monument, when he caused the words “master” and “man” to be removed from the statutes of Victoria, and had inserted in their stead the words “ employer “ and “ employee.” Another interesting quotation from the same book reads as follows: -
The United States could to-day supply each person with the same amount of commodities as he consumed in 1913, and lay off 2,000,000 people from work.
The age of machinery has caused many problems in industry. I suppose all honorable members have at some time or another seen the great excavating machines, which are able to remove a ton of earth at a time. One such machine can do the work of a very great number of men. Our modern harvesting machinery can do as much work in one day as 500 men could do in one day 100 years ago. The governments of the world must secure the control of all machinery. When that time comes the golden age promised by Christ, 2,000 years ago, will come. We shall not then have men and women trying to keep body and soul together on a mere pittance of 5s. 3d. a day. T have asked university professors, librarians, and many thoroughly wellinformed general readers, if they could tell me of a single country which is able to produce only sufficient food for its inhabitants which has 10 per cent., 20 per cent., or 25 per cent, of its population on the verge of starvation. I have never been able to get an affirmative reply. Yet in Australia to-day 25 per cent, of our workers are in dire need. If it were not for the good-hear rtednessof the public and the State governments in providing money, there would be absolute starvation and revolution. In Victoria £1,200 per month is being spent in North Melbourne and West Melbourne, and more in East Melbourne. God did not create rich and poor, or aristocrats and democrats, but male and female, and it is the duty of the Government, in my opinion, to do its utmost to provide food and clothing for human beings who have been created in God’s own image.
In one of the motions that I have placed on the notice-paper, it is proposed that, owing to the protection given to inventors, on every newly invented labour-saving machine registered by the Patents Department, the Government should collect 50 per cent, of the profits arising from its use, and devote the proceeds to the reduction of the national debt. This would be the thin edge to ensure the Commonwealth ultimately owning all machinery. Has God or any of the wise prophets declared that the world should be controlled by’ capitalism? I am not opposed to real capital. I want to see more good houses, roads and other conveniences provided for the people; but I do not wish countries to be controlled by a few men. Seven individuals in the United States of America, and five’ in Europe, would be able to reduce many countries to the position in which Australia finds itself to-day.
If Labour is going to depart from the great principles which it has espoused in the past, it is time that true Labour men. formed a new party. Had I known that the Australian Labour Party, which was led twenty years ago by one of the most lovable men on earth, would have been made responsible for the actions of the present Government, I would have joined the “Socialists. If I were 25 years of age I would lead “ the unemployed, and they would not rest as contented as they appear to be to-day. I glory in the fact that young Australians, despite their present deplorable position, have sufficient self control to refrain from desperate action.
– They will not be submissive much longer.
– How can they be? Were the promises that were made to the miners of New South Wales kept? I do not blame the Government so much as the members of this Parliament, who should speak with one united voice. I hope that the people will not stand the present system of government any longer.
– I thought that the honorable member was a pacifist.
– I love peace. I would give my life at this very moment if I could Stop war and .all its horrors, or if I could remove unemployment; but I loathe the system of government that is carried out in both the Federal and State spheres.
I learned, when I was over 70 years of age, that a body of keen business men whom I used to regard with suspicion, were not deserving of my earlier opinion of them. When I asked them to donate hot soup and warm milk for school children in South Melbourne, I found that those keen business men were willing to help. I found that their hearts were as good as gold, and I always pay that tribute to them. The proprietors of the Melbourne Herald provided motor transport to enable soup to be carried to the school children who needed it. The man who did most to frustrate that splendid effort on the part of the people of Victoria, was Mr. Tate, formerly head of the Education Department. I admire Henry Ford, because he believes in raising humanity, and not in lowering their wages. I would be willing to allow him to come to Australia as a dictator, and re-organize the affairs of this country. Any person who reads Fifty-fifty Points About Capital, by Sir Chiozza Money, whose name is held in high esteem in England, will agree that, while there can be no reasonable objection to capital per se, the present capitalistic system is crushing the world.
I hope that when the members of this Parliament face the electors, the platform of all parties will include a proposal for the introduction of the initiative, referendum and recall. When Ohio, whose population is only a few hundred thousand above that of Australia, first applied the principle of the referendum, its people answered 45 separate questions, fifteen of which related to matters of great importance to that State, and 25 of the proposals were agreed to on the vote of the people. We should give the people of Australia a similar opportunity to vote on national issues. I am sure that they would be prepared to vote for the elimination of six governments, and, possibly, six parliaments. They would not approve of having seven chief justices, or six State agents-general in London. What is the use of Australia supporting a high commissioner in London? Is it to procure invitations for those who desire to be presented at Court, where ladies some years back had to wear a long train which was very embarrassing to them? If Australia House were sold, it would realize more than was paid for it. I do not believe that it could be shown that we have received any benefit from the expenditure upon it. For a martinet, commend me to a high naval officer, and next to him as a dictator, par excellence, comes a high military officer. What do such persons know about politics? I am proud, however, of the fact that Australia has a GovernorGeneral who is a man of brains, knows Australia, and is well versed in our laws. He has sufficient ability to enable him to rule the whole of Australia. I know of no living king or queen who is gifted with talents equal to his.
– Kings will tremble on their thrones at the honorable member’s utterance.
– There is one Crown Prince who is likely to be a king, who has played the game better than any other prince; I refer to the Prince of Wales.
The times are too serious for the Government to follow the old roads with all their ruts and obstructions. Politicians and bankers crucified humanity1 when they introduced the accursed gold standard. When the gold standard was reverted to, one-third of the population of China, India, Japan, and the Straits Settlements was, condemned to suffering and want. It is evident now that the nations are becoming tired of the gold standard, and are coming to the conclusion that in bimetallism lies the only hope of curing the troubles which afflict the world to-day. France is not suffering from unemployment to nearly the same extent as most other countries to-day, and this is because she has departed from the old principles of currency control. The Bank of France, that wonderful institution, has increased its gold holdings from £40,000,000 to £400,000,000. No country in the world, with the exception of the United Kingdom, South Africa, and Australia, makes the sovereign the currency unit. Every other country has based its currency on silver. This applies to the mark of Germany; the peseta of Spain; the franc of France and Switzerland, and the lira of Italy. In China and India they tried to make the value of the coin represent the actual value of the silver it contained, and that is why one never knew the value of one’s money until one read the price of silver in the paper. If the Government adopted my suggestion for minting silver, immediate employment would be found for the miners at Broken Hill, 46 per cent. of whom are now out of work. Ultimately the Government should increase the price of silver to 2s. an ounce, and stabilize it at that figure. At1s. an ounce, silver would yield a profit of 450 per cent. when coined. I thank the Treasurer (Mr. Theodore) for telling me to-day that he is a bimetallist. I accept his assurance gratefully. I have no doubt that eventually the majority of nations will adopt this policy, but until that comes about, I desire our Treasury to take the opportunity of making a profit of 450 per cent. by coining silver. We should then be able to pay the farmers 4s. a bushel for their wheat, and God knows they answered worthily the appeal made to them to grow more wheat.
– Great Britain will not agree to the monetization of silver.
– We are a member of a commonwealth of free nations, and we should insist on applying the system in this country. If we coined our silver into money we could buy all the wool produced in this country at1s. 6d. a lb., sell it in London at 9d. a lb., and still make a profit of 5d. a lb. We would be able to buy the wheat at 4s. a bushel, sell it in England at 2s. a bushel, and make a profit of1s. 3d. Moreover, that1s. 3d. in England would be worth 31 per cent. more owing to the exchange rate than if left in Australia. Yet I cannot persuade this Parliament or this Government to take the matter up. Honorable members who are young enough will live to remember that, by the means I have suggested, Australia had an opportunity of providing work for its unemployed miners at Broken Hill and elsewhere, and at the same time of curing the depression from which we are suffering.
I am grateful to honorable members for giving me their attention, and I should be still more thankful to them if they could advance any sound argument against the monetization of silver. The only objection which can be urged is that silver money is bulky. But what does it matter if it does take up twenty times the room of gold ? I do not know exactly what the dimensions of this chamber are, but I believe that it is large enough to hold all the silver that was ever mined. This Parliament as a whole, and not merely the Government, should make a declaration that no human being should go in want in Australia, and to that end we should issue our currency, based on the value of the £4,000,000,000 of private and public wealth in Australia.
Bill returned from the Senate with a message intimating that it had agreed to the amendments made by the House of Representatives to amendments 2 and 5, and to the consequential amendment made in clause 15.
OrderofBusiness - Mr. Holloway, M.P. : Relations with Russia.
Mr.SCULLIN (Yarra- Prime Minister) [10.52].- I move-
That the House do now adjourn.
To-morrow we shall introduce a loan bill to cover theCommonwealth deficits. We shall then proceed with the budget debate, which I hope will be finished to-morrow.
Mr.Lazzarini. - Is that a threat or a promise?
– It is both. The sitting will be continued until the budget debate is concluded. I hope that that will be early.
– Will the debate on the Canadian treaty come on after that?
– No; the Sales Tax . Amendment Bills.
– This morning the honorable member for Wakefield (Mr. Hawker) asked the Minister for Trade and Customs (Mr. Forde) a question in which my name was mentioned in such a way as to suggest that I was in some way associated mysteriously, or perhaps dishonorably, with representatives of the Soviet Government of Russia. As it was obvious that the activity of the Minister for Customs (Mr. Forde) was not in any way connected with the question, it appeared to me that the honorable member for Wakefield (Mr. Hawker) asked the question purely as political propaganda. In order to remove any possible misunderstanding, I wish to state the facts. During J.921 and 1922 an appeal was made to Australia and other countries to succour the people in certain famine stricken areas in Europe, and in Australia, in common with other countries, great efforts were made to afford relief. A special committee representative of all classes of the community was appointed in Melbourne to raise money and goods to relieve necessitous persons in the afflicted areas. Lady Forster, the wife of the then GovernorGeneral of the Commonwealth, was the president of the committee, and I was a member of the executive. As a result of the committee’s efforts some hundreds of thousands of pounds and a quantity of wool and wheat were sent from Australia, most of which went to famine-stricken areas in Russia. The relief work was continued for over, a year, during which time the Melbourne committee was active. A small subcommittee consisting of well-to-do Russian citizens of Melbourne endeavoured to augment the committee’s efforts by providing means to purchase farming implements to help in the work of reconstruction in the famine-stricken areas. One of the activities of that little group, which consisted of experienced business men in the Russian community of Melbourne, including a wealthy manufacturer who was its leader, was to purchase land, and on this land two or three houses were built. The expert members of the group formed themselves into a working-bee giving their time without any charge, and the houses were eventually sold. I do not know exactly how many were built, but the object of the group was to sell the houses and to use the profits to purchase tractors and other agricultural implements for use in Russia. The gentleman associated with the relief work asked Mr. Maurice Blackburn and myself if we would allow our names to be placed on a prospectus as trustees of the building operations, and to this we agreed. That was my association with what was done. I did not know anything more about it until a statement appeared in the press recently concerning a difficulty in connexion with the ownership of one- of the houses. I do not wish to apologize for my association with those who were engaged in faminerelief work, -and do not know why the honorable member for Wakefield raised the question. I have given the facts, as in the absence of an explanation honorable members might have thought that I had something to hide.
.- I am glad that the honorable member for Flinders (Mr. Holloway) was in the chamber when I asked the question to which he has referred, which was not asked, as he has suggested, for political propaganda purposes. I addressed the question to the Minister for Trade and Customs (Mr. Forde) because it had a bearing on the importation of Russian timber, which has recently been arriving in Australia, concerning which the Minister has said that one of the difficulties of his department was to ascertain to whom the timber is consigned. When a report appeared in the press to the effect that a Russian building syndicate was operating in Australia, it naturally occurred to me that the timber might be consigned to that syndicate. I asked the Minister whether he would have inquiries made, and I presume that I shall Later be informed of the result of his investigations. The honorable member for Flinders has doubtless cleared up his association with the committee of which he was once a member.
– Why is the honorable member so afraid of Russia?”
– The honorable member for Fremantle (Mr. Curtin), who represents a State interested in wheat duction, should realize the effect of Russian activities upon the standard of living of wheat-growers in Australia by the competition of what is practicallyslavegrown wheat. Although I consider that too many embargoes and high tariffs are now in operation, I do not wish the timber industry in Australia to be detroyed, particularly by the similar slavelabour competition of this country in which the honorable member for Fremantle and the honorable member for Flinders appear to have a friendly interest.
.- I am glad that the importation of Russian timber has been referred to by the honorable member for Wakefield (Mr. Hawker). It would appear from the paragraph published in the press that a good deal of friendliness exists between Russia and the members of the Labour party in Australia, although it is not so pronounced as it was a few years ago. Some of the gentlemen concerned are proud to be termed internationalists; but, in my opinion, an internationalist is one who places his own country last. Yesterday, when I asked the Minister for Home Affairs (Mr. Blakeley) whether a certain man who had once been sentenced to imprisonment in Australia, and was later deported because he was a member of an unlawful association has been readmitted to the Commonwealth, I was informed that the person concerned had been admitted and that he is a director of a Russian company importing timber into Australia. In these circumstances it is strange that the Minister for Trade and Customs (Mr. Forde) is perplexed and professes . not to know who is importing Russian timber into Australia. The Minister for Home Affairs should know that under the Immigration Restriction Act a person once deported is prohibited from re-entering the Commonwealth. This person has, I understand, been re-admitted, and is now representing Russian Oil Products Limited. He ho” been allowed to visit New Zealand ana may return to Australia whenever he desires. This man allegedly came to Australia on a business visit. He could have completed his business in a month or two, but he has been here for seven months, and, as the result of his handiwork, or that of some one like him, communistic violence occurred recently in Sydney. It seems as if the Premier of New South Wales, assisted by his chief of staff, Mr. Garden, is paving the way for communism, while the Federal Government is assisting by making it easy for British renegades, such as this gentleman, to come to Australia. I protest against this man’s re-admission to this country. I want to know from the Minister the reason for permitting a man who was imprisoned and deported from Australia in 1918 to re-enter this country at a time like this, when the Russian five-year plan is in operation, and the Soviet is attempting thereby to bring about the economic ruin of the world; an economic war more serious than a war of arms. We know that Russia is dumping into Great Britain a larger quantity of wheat than we export. That country is dumping timber, butter, and even manufactured goods, such as biscuits, soap and woodwork. Russia has now started to dump timber into Australia. Influence has been brought to bear somewhere to allow this man to re-enter Australia. After he was deported he visited Russia, and it is alleged that he was responsible for taking mechanics from America to Russia to assist in giving effect to its fiveyear plan. There is, adjacent to our own parliamentary library, an explanatory map of Russia and an abundance of Soviet literature brought here by the man I mention, which honorable members have been seen reading in the House. It is time that this Government took some action to prevent the spread of communist influence in this country, and unless it does so we can only conclude that it is prepared to assist the Soviet in its nefarious work.
.- I wish to offer an observation or two concerning a statement of the honorable member for Balaclava (Mr. White) which carries the implication that the honorable member for Flinders (Mr. Holloway) and myself are friendly towards Russia. I make absolutely no apology for saying that the future happiness of the world depends upon the establishment of friendly trading relations between all countries. It has been contended that because “Western Australia produces wheat, I should have no concern at all for Russia; but let me say that before “any Russian timber came to Australia, this country was selling large quantities of wool to Russian buyers, with the full approval of anti-Labour statesmen and politicians throughout Australia. Of course, I take no exception to Russia buying Australian wool, and I know of no reason why it is undesirable for Australia to establish proper trading relations with Russia. But dumping seems to me to be an improper method of selling the goods of one country in another country, and I expect the Government to take proper precautions to ensure that our local interests are not prejudiced by dumping of goods, whether from Russia, India, or any other cheap labour country.
– I was not disposed to enter into this discussion until I heard the remarks of the honorable member for Fremantle (Mr. Curtin). He says that he takes no exception to Russia buying Australian products. Why should he? Australian products are produced here un.der arbitration conditions, under whitelabour conditions, under conditions which are essentially fair. Then he proceeded to say that he takes no exception to Russia sending into this country goods which are produced under conditions which he would not tolerate for a moment in this country. He declares that he takes no objection to Russia flooding this country with goods produced under such slave conditions !
– That is a gross misrepresentation.
– It is not; it is merely an amplification of the honorable member’s statement. I repudiate his sentiments entirely. I have no objection to selling to Russia, because our goods are produced under fair and reasonable conditions. But we should not allow Russia to flood this country with timber and other articles produced under slave-labour conditions which are a disgrace to civilization. I wish to have nothing to do with any honorable member who associates himself- with Russian conditions.
, - The honorable member for Warringah (Mr. Parkhill) has misrepresented the honorable member for Fremantle (Mr. Curtin) and the honorable member for Flinders (Mr. Holloway). He spoke, as usual, with his tongue in his cheek. He has no objection to Australia selling its products to Russia, which country, he says, produces goods under slave conditions. I do not know whether Russia produces under slave conditions or not. We can only go on what we read and hear, and some of the statements of persons who come here with a specific mission misrepresent the conditions of that country. What happens to our primary products when they arrive in Russia? They are manufactured into the finished article, which, according to the published reports of the fiveyear plan, will be used later to flood the markets of India, Europe, Great Britain, and elsewhere. We are prepared to take Russian gold in exchange for our commodities. The honorable member for Warringah stood behind a government which allowed the pick of our flocks to be sent to Russia, there to produce wool, according to him, under slave conditions! The honorable member never speaks of the slave conditions of British India and British Egypt. Women still work in the coal-mines of India. He does not object to Indian goods coming here. He makes no mention of the dreadful labour conditions of Japan and Central Europe. The Nationalist organization has in the past associated Russia with the Labour movement in order to belittle that movement. The honorable member now states that we stand for slave conditions. In no country, whether it be Russia, British India, Egypt, Central Europe, Germany, Austria, or Japan, does the Labour movement advocate cheaplabour conditions. I repeat that the honorable member is simply talking with his tongue in his cheek, purely for political purposes, as he did when he was secretary of the Nationalist organization in New South Wales. The honorable gentleman cannot have it both ways. If slave conditions exist in any country, let that country be outlawed completely. Let us say to it, “While those conditions continue we shall not take your money or buy your products, nor will wo sell you our products “.
– I agree with that.
Mr.LAZZARINI-. The honorable member did not agree with it a moment ago.
Question resolved in the affirmative.
House adjourned at 11. 16 p.m.
Cite as: Australia, House of Representatives, Debates, 15 July 1931, viewed 6 July 2017, <http://historichansard.net/hofreps/1931/19310715_reps_12_131/>.