14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.
Duties on Cement: Communication from the Government or the United Kingdom.
– Has the attention of the Prime Minister been drawn to a circular letter issued to public bodies and prominent individuals by the Joint Committee for Tariff Revision, Sydney, prominent in which is the Sydney Chamber of Commerce, dealing with the defeat in the House of Representatives of certain of the Government’s tariff proposals, brought about by the fact that some members of the Government party voted against them, in which the following paragraph appears : -
We feel sure you will understand how to voice your disapproval in a way your federal representative will understand.
Does not the Prime Minister think that such an intimidatory circular letter, amounting almost to blackmail, issued by freetrade interests against members of Parliament who use their discretion on non-party tariff items, is an attempt at interference with the freedom of honorable members, and constitutes, in fact, an act of contempt of Parliament?
– I am unable to accept any responsibility for the circular issued by the organization towhich the honorable member has referred.
– Has the Prime Minister intimated to members of the Ministerial party the terms of the protest made by the British Government in regard to the action of this House in relation to the duties on cement? If so, will he make the same information available to honorable members?
– Yes. The terms of the communication forwarded to me by the High Commissioner for the United Kingdom, Sir Geoffrey Whiskard, are-
Mr.Curtin. - Yesterday, the right honorable gentleman said that this com munication was confidential as between the two Governments.
– I said yesterday that it is not usual to table the actual documents that pass between the British Government and the Government of the Commonwealth, but that I should not hesitate to acquaint the House with the material portion of the communication. That is what I now propose to do.
– Will the right honorable gentleman give the whole of the contents ?
– I shall give all that . matters. I assure the honorable member that I am merely following the usual practice of not tabling the actual document. The communication reads-
His Majesty’s Government in the United Kingdom has learned with concern that the Commonwealth House of Representativeshave declined to give effect to the recommendations of the Tariff Board with regard to dutieson cement and on sanitary earthenware.In view of the provisions of the Ottawaagreement of 1932. His Majesty’s Government in the United Kingdom are confident that they can assume that steps will be taken by His Majesty’s Government in the Commonwealth to secure that the recommendations of the Tariff Board are put into effect.
A reply on these lines is being made to a similar question in the Senate.
– It is time that the Ottawa agreement was scrapped and we stood on our own feet.
– Some time ago I asked the Minister for the Interior a question regarding an invention to overcome the disability caused by differing railway gauges in Australia, and was informed that the matter had been referred to Sir George Julius. Has the Minister received any report from that gentleman ?
– I have received a letter from Sir George Julius, and shall be pleased to discuss it with the honorable member if he so desires.
– I ask the Acting Minister for Commerce whether the House can expect that the recommendation of the Wine Overseas Marketing
Board, that the regulations for the provision of a minimum price for Australian wine on the English market be discontinued, will be gazetted and given effect?
– The Acting Minister for Commerce is not in the House to-day, but will be in his place to-morrow. The honorable- member’s question will be placed before him.
– Has the Prime Minister any communication to make to the House with .regard to what steps, if any, have been taken for the ratification of the Statute of Westminster?
– Cabinet has approved the adoption of the statute, but has decided that the draft bill shall be circulated among the governments of the States before its introduction to the Commonwealth Parliament. A reply is being awaited” from four of the States. The measure will be introduced into this House after the return to Australia of the Attorney-General (Mr. Menzies).
– Having regard to the fact that litigation is now proceeding challenging the supremacy of the Commonwealth in respect of matters so vitally affecting the national life as transport and marketing, the admitted incompetence of the Commonwealth Government to implement international decisions in the realm of industrial regulation, and the perpetual contention between Federal and State Governments in matters of financial demarcation, will the Prime Minister state whether he is prepared to give to the electors an early opportunity to express their desire or otherwise for the concentration of all Australian legislative functions under the control of a truly national legislature?
– The matters raised by the honorable member involve very important items of government policy, with which I do not propose to deal in answer to a question; but consideration will be given to them.
– Has the attention of the Prime Minister been drawn to the statement published in the London Star. that consideration was being given to the introduction of conscription in Australia, and to the reply of the Attorney-General that he believed that legal difficulty would be experienced if an attempt weir made to enforce conscription for service overseas? If so, will the right honorabo gentleman say whether consideration has been given to the question of Australia’s participation in another world war?
– I have no official information of any statement made by the Attorney-General. All that I can say is, that no consideration of any kind has been given by this Government to the subject of conscription in Australia.
– I ask the Minister representing the Minister for External Affairs whether our High Commissioner in Great Britain, Mr. Bruce, is still chairman of the Council of the League of Nations^ If so, how long is he likely to continue to occupy that position ?
- Mr. Bruce is still the president of the Council of the League of Nations, and, in the ordinary course of events, will continue to occupy that position until the next ordinary meeting of the Council, the date of which has not yet been announced. I believe that an extraordinary meeting of the Council has been called for some date in May.
– Will the Prime Minister state whether, in view of the possible effects upon the primary-producing community of a decision adverse to the Commonwealth being given in the case- James v. Commonwealth now being argued before the Privy Council, any action isbeing taken by the Government to m ee, the situation that might arise?
– The Government has not made any special provision to meet such a situation, because it does not anticipate an adverse verdict.
– Has the attention of the Minister in charge of war service homes been drawn to a statement published in the newspapers that a returned soldier is to be evicted from a war service home in Concord? If so, will he take action to have the matter investigated?
– The Minister in charge of war service homes is absent, but I shall take the matter up immediately.
– by leave - After a thorough review of all sources of production, and of technical reports bearing upon flow oil, shale oil and oil from coal, the Commonwealth Government has decided to make available a sum of £250,000 for advances by way of loans to approved companies or persons on a £1 for £1 basis, for the purpose of drilling operations in connexion with a search for flow oil in Australia. This fund will be administered by a sub-committee of Cabinet comprising the Minister for Defence (Mr. Parkhill), the Minister for the Interior (Mr. Paterson), and the Minister in charge of development (Senator McLachlan). The sub-committee of Cabinet will, in turn, be advised by a technical committee consisting of Dr. W. G. Woolnough, Commonwealth Geological Adviser, Dr. L. Keith Ward, Director of Mines of South Australia, and Dr. Arthur Wade. Dr. Woolnough will act as executive officer.
The Government is determined to investigate every means of giving to Australia some independence in oil supplies. To that end it will obtain definite information concerning the possibilities of well oil production in Australia and New Guinea. If the result is negative it will at least serve to obviate the further expenditure of large sums of money in the search for oil. If, on the other hand, oil is found, it will add immensely to the prosperity of Australia, and will meet an essential defence requirement. Information in the possession of the Government indicates that the prospects of finding well oil in commercial quantities in Australia and New Guinea are now rated more favorably than has hitherto been the case.
It is necessary again to emphasize that the moneys, which it is proposed to provide, will be for the purpose of drilling for oil, and are not for preliminary geological surveys. While it is recognized thai geological surveys are pre-requisites to drilling, it is felt that a good deal of this work has already been done, and that the immediate need is to drill favorable areas. It is recognized, also, that the major expenditure associated with the search for oil is in connexion with drilling.
In connexion with the shale oil industry, very full technical information ia available regarding the economics of production. It has become evident that, in order to establish the industry, it would be necessary to exempt it from the payment of excise duty over a period of years. This would involve substantial inroads into revenue. The Government has, however, examined the position from every angle and, in the light of more recent world developments, it feels that it is compelled to ignore the economical aspects of production, and place the defence requirements superior to all others.
Newnes is capable of producing at least 7,250,000 gallons of petrol per annum, and production can, in case of national emergency, be changed over immediately to fuel oil or to fuel oil and petrol. It can, with some expansions which can be arranged at short notice, produce at least the nucleus of the Commonwealth’s basic requirements of oil and petrol for the defence services. In view of this, it has been decided that petrol production from shale in Australia, up to a maximum of 10,000,000 gallons per annum, shall bc granted protection over imported petrol to the extent of customs and excise duties at present operating for a period of twenty years. The effect of this would be that, if the present customs duty of 7d. a gallon on imported petrol, or the excise duty of 5 1/2 d. a gallon on petrol produced from imported crude, are reduced during the next twenty years, a subsidy equivalent to the amount of such reduction will be paid on petrol produced from Australian shale up to the maximum of 10,000,000 gallons per annum.
Offers will be publicly invited from companies or persons desirous of operating the Newnes shale oil undertaking on this basis. The Commonwealth Government at present holds the option over plant, machinery, &c, at Newnes, which originally cost considerably more than £1,000,000, and which can now be secured for £34,500. In connexion with this invitation, it should be clearly understood that the Governments of the Commonwealth and New South Wales regard it as essential that any company selected to operate Newnes must have personnel with high engineering and technical qualifications, in addition to substantial capital resources. The Newnes Investigation Committee has set down capital requirements at £600,000. At the present time, coal petrol in England enjoys protection of Sd. a gallon; shale petrol has never paid excise duty, and has been protected by customs duties for a period of years. In ‘Germany, coal spirit enjoys preference over the petroleum product in the form of remission of taxation of approximately ls. 8d. a gallon.
There are two known methods for the production of oil from coal. These are by low temperature carbonization, and by hydrogenation. In connexion with the low temperature carbonization process, certain investigations are now taking place. ‘The Government will have something more to .say on this when these investigations are complete.
With regard to the production of oil from coal by the hydrogenation process, approximately twelve months, or possibly longer, will elapse before Imperial Chemical Industries Limited is in possession of sufficient experience of the working of the demonstrational unit at Billingham-on-Tees to determine whether it will be practical and desirable to establish a similar unit in Australia. The construction of such a unit would occupy some time, so nothing can bo expected from this source of supply in the near future.
The Government regards the question of the production of oil from coal as of such importance that it is determined to obtain the best first-hand scientific advice about it. Therefore, arrangements have been made for Sir David Rivett, Chief Executive Officer of the Council for Scientific and Industrial Research, who is also chairman of the Commonwealth Hydrogenation Committee, -a body
Mr. 7/j/ons. representative of the Commonwealth and the States., to leave Australia next month for the purpose of going closely into the processes now operating in England and Germany for the production of oil from coal by both hydrogenation and low temperature carbonization. Sir David Rivett is eminently fitted for this work. While in England, Sir David Rivett will discuss with Imperial Chemical Industries Limited, the whole question of the establishment of a hydrogenation unit in Australia. This organization has promised its fullest co-operation.
– Is it the intention of the Government to invite the approval of Parliament before embarking upon any expensive undertaking for the extraction of petrol from coal, &c, or before entering into an agreement for twenty years to grant special concessions to those producing petrol from coal or shale?
– The statement I have just made was prepared so that honorable members might know something of the policy which the Government proposes to apply; but any scheme, before being put into operation, will necessarily receive the approval of Parliament.
– Will the statement which the Prime Minister hasjust read be made the subject of a motion “ that the paper be printed ‘’ so as to provide honorable members with an opportunity to express their opinion upon it? Has the Government given any consideration to measures designed to prevent the control of flow oil production falling into the hands of foreign interests, particularly American interests?
– It is not intended to have a discussion on the statement which I have made; but, when the Government’s proposals are in concrete shape, and before any action is taken, a full opportunity will be given to honorable members to discuss them.
– Is the Prime Minister in a position to indicate whether the Government has been approached by any company, or by any interests, possessed of sufficient capital and technical knowledge to undertake the development of the Newnes shale oil deposits?
– Yes. One inquiry has been made by an individual who may be regarded as possessing the necessary qualifications. But the Government proposes publicly to invite those bodies, companies or individuals who may be interested in the exploitation of the Newnes deposits to submit propositions.
– Does the Prime Minister not think that sufficient evidence is already available to prove to the satisfaction of the Government that the extraction of oil from coal is now a practical commercial proposition, and that, owing to the fact that this Government and previous governments sent Mr. L. J. Rogers overseas on three occasions to inquire into the hydrogenation and lowtemperature carbonization processes for the extraction of oil from coal, the proposal which he has just outlined will result in a waste of money, and is only further deferring action that should be taken immediately by the Government?
– I do not agree with the honorable member’s contention. It is essential that the Government should have the fullest and most reliable information before it proceeds with any scheme. Honorable members will, I think, admit that there is no one in Australia whose opinion would be accepted more readily than that of Dr. Rivett. It is with the object of obtaining an authoritative statement with regard to the matter that the Government is asking him to carry out the investigation.
– What is the opinion of Mr. Rogers ?
– I am dealing with the head of the Council for Scientific and Industrial Research, in which we all have the utmost confidence. We also have confidence in Mr. Rogers as an oil expert. The honorable member suggests that all the information is already available, but I point out to him that Imperial Chemical Industries declares that it is not yet in a position to say whether it is a practical proposition to establish a unit for the extraction of oil from coal in Australia. Honorable members will recognize that if the company which controls a unit in England is not satisfied as to the prospects of the successful establishment of the industry in Australia, it is not safe for the Commonwealth Government to take what would amount to a step in the dark.
– I take it that the assistance that is to be given will be sufficiently wide to cover the development of shale oil resources in Tasmania?
– Undoubtedly. Up to the amount involved the same principles will apply to any proposition for the development of any area in any part of the Commonwealth.
– In respect of any discovery of petrol and oil which might be made as a result of government assistance, either monetary or otherwise, will the Government insist on retaining 51 per cent, of the net proceeds? Will consideration be given to the necessity for retaining full control of all oil discoveries in Australia for the benefit of the Commonwealth of Australia?
– I can only say what 1 have already said, that definite proposals will be submitted later when the matter raised by the honorable member can be considered.
– Can the omission of any reference to the proposal for the erection of a distillery at Sarina for the production of power alcohol in the statement which has been read by the Prime Minister, be taken to indicate that the Government has examined the possibility of the production of such power alcohol and considers that it offers less prospect of success than the production of oil from shale, or from coal, by the hydrogenation process or by the search for flow oil?
– We have dealt with the other aspect to which my statement refers, but the Government has not given sufficient consideration to the question raised by the honorable member either to accept it or to reject it.
– Can the Prime Minister say, briefly, what is the substantial difference between what is proposed now in regard to Newnes and the proposition in which Messrs. Chambers and Treganowan were interested, but which they said the major oil companies prevented from being properly developed ?
– There is a danger of the whole matter developing into a debate. The Prime Minister may reply to the question, but I remind him that he. must answer it without debating it.
– I have no information on this matter at the present stage, but later, when the proposals emanating from the present inquiry assume concrete shape, I shall see that the information is supplied.
– Will the Prime Minister say why no proposal has been made to assist in the sinking of scout bores, which are always put down before the permanent bore is sunk? Will the right honorable member review the present proposals with the object of providing a proportion of the £250,000, or some additional amount, for the sinking of scout bores?
– The aspect of the subject referred to by the honorable member will be covered by the ministerial explanation of the Government’s proposals when they are definitely placed before Parliament.
– Does the Government propose to place legislation before Parliament during this sessional period to provide a subsidy to assist in the search for oil? If not, will the Prime Minister indicate to companies which intend to engage in the search for oil whether or not the granting of assistance will be conditional upon certain rights in any oil discovered on Crown lands being reserved for the nation?
– No proposal in connexion with this subject will be submitted to Parliament this session. The Government hopes that this session will end before long. The proposal to stimulate the search for oil will be placed before Parliament next session. In the meantime, the point raised by the honorable member will receive consideration.
-Will any money be spent in the meantime?
– Will the Prime Minister inform me whether the Government has any officer available to advise -it in regard to the production of power alcohol and the latest plants available for that purpose? If so, does the scientific world vouch for the qualifications of the officer concerned ?
– I shall bring the question of the honorable member under the notice of the Minister for Development who is dealing with this subject.
– About two months ago the Minister representing the Minister for External Affairs said that, on the unanimous recommendation of the Advisory Council of Norfolk Island, the Government proposed either to abolish or to amend the Newspaper Ordinance in force at Norfolk Island. I ask the honorable gentleman now whether the Government has taken any action either to abolish or to amend radically the ordinance complained ofby the Advisory Council?
– I have no late information on the matter; but I shall have inquiries made, and inform the honorable member at an early date.
– In view of the answer given yesterday to a question addressed to the Minister for Defence by the honorable member for Dalley (Mr. Rosevear), in which the Minister said that the defence policy is the sole concern of the Commonwealth Government, has he taken any action to deal with an officer whose bump of presumption was sufficiently developed to tender him a little advice on the question of naval construction?
-I noticed the implication in the question asked by the honorable member for Dalley (Mr. Rosevear), but I did not think it necessary to draw public attention to it. I have already asked for a statement from the officer in question in regard to the matter.
Negotiations With Canada and NewZealand.
– I ask the Minister directing negotiations for trade treaties whether he is in a position to inform the House when the ministerial delegation from Canada will arrive in Australia to confer with representatives of the Com - monwealth Government on the subject of the Australia-Canada Trade Treaty?
– I cannot say definitely when the delegation will arrive here. I made a somewhat optimistic statement on this subject some weeks ago; but, unfortunately, our progress has not been too satisfactory. 1 expect to receive definite news on the subject at an early date.
– Will the Prime Minister inform me whether any really active negotiations are proceeding at present with the Government of New Zealand with the object of concluding an agreement between Australia and the sister dominion ?
– The Minister acting for the Minister for Commerce is dealing withthis subject, and I shall bring the honorable member’s question under his notice.
– In view of the serious situation that has arisen in New South Wales, where fourteen men, ten of whom are under the age of 21 years, are under sentence of death, I ask the Prime Minister whether he will intercede with his colleagues in the State Parliament to prevent these abhorrent executions?
– The honorable member knows perfectly well that it is quite beyond the authority of the Commonwealth Parliament to deal with this subject, for it is definitely under the control of the Government of New South Wales.
Proposal forre-Distribution of Victoria.
– I move -
That the House of Representatives approves of the distribution of the State of Victoria into electoral divisions as proposed by Messrs. F. W.Parkinson, P. Campbell and H. McTaggart, the commissioners appointed for the purpose of distributing the said State into divisions, in their report laid before Parliament on the 13th March. 1935. and that the names of the divisions suggested in the report be adopted with the exceptions that the name “Ballarat” be substituted for the name “Ballaarat”, and that the name “ Deakin “ be substituted for the name “ Mernda “.
Honorable members will remember that, following the census taken on the 30th June, 1933, and the receipt by the then Minister for the Interior of the chief electoral officer’s certificate of population furnished in pursuance of the Representation Act, commissioners were appointed on the 15th December, 1933, to propose a redistribution of the electoral divisions in New South Wales, Victoria, Queensland, South Australia and Western Australia.
The authority for this action is contained in section 25 of the Electoral Act, which provides that a redistribution may be undertaken -
General thinks fit.
Reports were duly received from the respective commissioners appointed for the purpose, submitting proposals for the redistribution of the electoral divisions in each of the States specified, and those reports were tabled in Parliament on the 28th June, 1934.-
The proposals for New South Wales, Queensland and South Australia were subsequently adopted by Parliament, and were given effect to in those States prior to the general election held on the 15th September, 1934.
The commissioners’ original proposals for Victoria and Western Australia were, however, disapproved by the House of Representatives, and, as time did not permit of fresh proposals being obtained and dealt with before the dissolution, the 1934 election in those States necessarily had to be held on the existing boundaries. The motion agreed to by the House of Representatives on the 5th July, 1934, in relation to the original proposals submitted by the commissioners for Victoria was as follows: -
That this House disapproves of the distribution of the State of Victoria as proposed by the Distribution Commission and requests the Minister to return the same to the commission with the view of a fresh distribution being made of this State, having regard to community of interests and the margin of allowance provided for in section 19 of the Commonwealth Electoral Act.
Pursuant to this motion, and sub-section 2 of section 24 of the Commonwealth Electoral Act, which reads -
Ifeither House of the Parliament passes a resolution disapproving of any proposed distribution or negatives a motion for the approval of any proposed distribution, the Minister may direct the Distribution Commissioners to propose a fresh distribution of the State into divisions, the Minister for the Interior directed the commissioners for Victoria to propose a fresh distribution, and the House is now being asked to approve of the commissioner’s’ fresh proposals for the distribution of Victoria. These involve no alteration of the number of electoral divisions in Victoria or of the number of members of the House of Representatives to which that State is entitled upon the population as disclosed by the 1933 census, which is twenty, but, as will be readily seen from the table furnished in the distribution commissioners’ report, a realignment of the boundaries of the division in Victoria is very necessary in order to provide a more equitable basis of representation than now exists. For instance, in the metropolitan area, the division of Henty, as at present constituted, contains more than twice as many electors as are embraced in the division of Melbourne, and, as regards the country divisions, Flinders contains over 30,000 more voters than Ballarat.
Honorable members will recollect that the first proposals submitted by the distribution commissioners for Victoria provided for the elimination of the country division of Corangamite, and the substitution for it of an additional metropolitan division. The fresh proposals now submitted by the commissioners are, however, less drastic, in that the present basis of ten metropolitan and ten country divisions is preserved, and, whilst the marginal difference in enrolment between the average of the metropolitan divisions and the average of the country divisions has been increased from 2,930 - as provided in the first proposals - to 8.068, the numbers allotted to the several divisions under the fresh proposals are, in all cases, well within the margin of allowance permitted by the law. Section 19 of the Electoral Act reads -
In making any proposed distribution of a State into divisions the distribution commissioners shall give due consideration to -
Community or diversity of interest;
means of communication;
existing boundaries of divisions and subdivisions ;
State electoral boundaries; and subject thereto the quota of electors shall be the basis for the distribution and the distribution commissioners may adopt a margin or allowance, to be used whenever necessary, but in no case shall the quota be departed from to a greater extent than one-fifth more or onefifth less.
Having regard to the circumstances and the provisions of the section which I have quoted, I commend the proposals now before the House as providing for a fair and reasonable distribution of the electoral divisions in the State of Victoria, and I urge their approval.
It may be pointed out that the adopttion of the proposals submitted would not affect any by-election that may become necessary during the life of this Parliament, inasmuch as it is provided in section 24 of the Electoral Act that, until the next ensuing dissolution or expiration of the House of Representatives, a redistribution shall not affect the election of a new member to fill a vacancy happening in the House of Representatives ; hut, for the purpose of any such election, the electoral divisions as theretofore existing, and the rolls in respect of those divisions, shall continue to have full force and effect.
Honorable members will observe that it is proposed to take the opportunity presented by this redistribution to modernize the manner of spelling the name of the division of Ballaarat, so as to bring it into conformity with that now in general usage.
– There are four “ a’s “ in the name, and it is thought that three are sufficient. This action is deemed desirable in the interests of public convenience, and for the purpose of facilitating the completion of enrolment cards and other documents relating to the division with a greater degree of accuracy and uniformity.
It is also proposed that the new division created by this redistribution be named “ Deakin in honour of the late Honorable Alfred Deakin, one of the most illustrious of the great men associated with the foundation of the Commonwealth. The late Mr. Deakin commenced his parliamentary career in the Victorian Assembly in 1879, later holding office in Victoria as Solicitor-General and Commissioner for Public Works, and as Chief Secretary. He took a prominent part as a representative of Victoria in the federal movement, and was a member of the dele gation sent to London in 1900 to secure the passage of the Constitution Bil! through the Imperial Parliament. The late Mr. Deakin was a member of thin House from the inception of the Commonwealth until his retirement in 1913. He held office as Attorney-General in the first Commonwealth Ministry, and subsequently on three occasions guided the destinies of this country as Prime Minister with great wisdom and ability. Several divisions in other States bear the names of notable men associated with the foundation of the Commonwealth: Parkes, Barton, Reid and Watson in New South Wales; Griffith in Queensland, and Forrest in Western Australia; and it is thought fitting that as the opportunity now presents itself the name of Deakin should now be similarly perpetuated in Victoria.
Debate (on motion by Mr. Curtin) adjourned.
Proposal for Redistribution of Western Australia
– I move -
That the House of Representatives approves of the distribution of- the State of Western Australia into electoral divisions as proposed by Messrs. R. H. Bandy, J. P. Camm and S. B. H. Roberts, the commissioners appointed Tor the purpose of distributing the said State into divisions, in their report laid before Parliament on the 13th March, 1933, and that the names of the divisions suggested in the report be adopted.
The. report referred to in the motion is the second furnished by the Distribution Commissioners for the State of Western Australia appointed on the 15th December, 1933, for the purpose of proposing a redistribution of that State. The proposals contained in the first report received from the commissioners, and tabled in Parliament on the 28th June, 1934, were disapproved by the House of Representatives on the 6th July, 1934, when the following motion was agreed to :–
That this House disapproves of the distribution of the State of Western Australia into electoral divisions as proposed by the Distribution Commissioners, and requests the Minister to direct the Distribution Commissioners to propose a fresh distribution of the said State.
Pursuant to that motion, and to subsection 2 of section 24 of the Commonwealth Electoral Act, which provides that, if either House of the Parliament passes a resolution disapproving of any proposed distribution, the Minister may direct the Distribution Commissioners to propose a fresh distribution, the commissioners for the State of Western Australia were duly directed to propose a fresh distribution, and it is their fresh proposals for the distribution of the divisions in that State that this House is now invited to approve. The redistribution involves no alteration of the number of divisions, Western Australia being entitled on its population, as revealed by the 1933- census, to return five members to the House of Representatives as at the present time; but, as there is * marked disparity between the enrolment, for certain of the divisions as now constituted, a revision of the boundaries is necessary so that the basis of representation may be a more equitable one.
In their first report, the commissioners proposed that the marginal difference in enrolment between the average of ‘the two metropolitan divisions - Fremantle and Perth - and that of the three country divisions in Western Australia should be 1,751 only, but in the fresh proposals now submitted the average marginal difference provided for is 7,360; and, whereas in tho first report the number of electors allotted to the proposed division of Kalgoorlie was 43,419, t] number of electors allotted to this division in the fresh proposals is 39,658 only, that is, 6,041 below the quota for the State. Having regard on the one hand to tho vast area comprised within this division, and on the other to the limitation imposed by section 19 of the Electoral Act that the quota must not be departed from to a greater extent than one-fifth more or one-fifth less, the proposals now before the House are commended as providing a fair and reasonable distribution of the electoral divisions in the State of Western Australia, and their adoption is urged accordingly. It may be mentioned that, in making the requisite adjustment between the divisions of Kalgoorlie and Swan, the commissioners have adopted the boundaries of State electorates. The State electorate of Avon, which lies along the gold-fields railway, has been transferred bodily from the division of Swan to that of Kalgoorlie, whilst on the coastal side the proposed division boundary coincides with the boundaries of the State electorates of Irwin-Moore and Mr Marshall. Similarly, the proposed boundary between the divisions of Swan and Forrest, which runs slightly north of the existing boundary, follows the line of State electoral boundaries throughout. The result, if these proposals are adopted, will be that the divisions of Kalgoorlie and Forrest will be comprised wholly of complete State electorates.
Debate (on motion by Mr. Curtin) adjourned.
In committee (Consideration of Senate’s amendments) :
Clause 2 -
Section twenty-four of the principal act is amended -
by inserting after sub-section (8.) the following sub-sections: - “ (7.) Subject to this section, the Commissioner shall pay to an)’ person . . . who . . . holds stocks of flour which is chargeable with tax . an amount which represents the tax so chargeable upon the quantity of that flour in excess of one thousand pounds in weight :
Provided that where the flour so held in stock by that person has been purchased by him at a price which includes portion only of the tax chargeable thereon, the amount payable to him shall not exceed an amount equal to that portion of the tax included in the purchase price.
A payment shall not be made to any person . . . unless the Commissioner is satisfied that -
where that person has purchased that flour from a vendor who has paid, or is liable to pay, tax thereon at a price which includes the tax, or a portion of the tax, chargeable thereon - the whole or part of that price is unpaid and that the vendor of the flour has given to the Commissioner an undertaking not to make a claim for a refund under sub-section (5.) of this section in respect of the tax so paid or payable by him.
Senate’s Amendments. - Leave out “ holds stocks of flour which is “ proposed new subsection 7, and insert “ held stocks of flour >’.
Leave out the proviso to new sub-section (7.) and insert in its stead the following proviso : - “ Provided that where the flour so held in stock by that person consisted of -
flour, other than self-raising flour, which had been purchased by him at a price in which a portion only of the tax chargeable inrespect of the flour had been included; or
self-raising flour which -
had been purchased by him,, or
had been manufactured by him from flour purchased by him, at a price in which a portion only of the tax chargeable in respect of the flour used in the manufacture thereof had been included, and in respect of which the Commissioner is satisfied that any person has received or will receive from any State Government a payment by way of relief in respect of that tax, the amount payable under this sub-section shall not exceed an amount equal to the portion of the tax included in that price.”.
After paragraph (d) proposed new subsection ( 8 ) insert - or (e) in the case of self-raising flour - tax has been paid or is payable in respect of the flour used in the manufacture thereof.”.
Mr.CASEY (Corio - Treasurer”) [3.21].- I move-
That the amendments be agreed to.
Honorable members will remember that, towards the end of the last sitting of Parliament, a hill was introduced and passed through this House which had the effect of authorizing the granting of refunds in respect of the flour tax which came to an end on the 24th February, 1936. As honorable members may remember, there was provision in the bill that limited the amount of refund to the amount of tax that had actually been borne by the holder of the flour, and it was inserted principally to deal with the case of Tasmania. Tasmania, as a State., had been recouped by the Government by monthly payments which turned out to be the equivalent of £21s. a ton. The Tasmanian Government passed this amount of £21s. to the millers, with the result that flour stocks on hand at the termination of the tax bore tax only to the extent of11s. 6d. a ton. The Flour Tax Refund Bill made provision for refunds to the extent only of the difference between the tax of £2 12s. 6d. a ton and the £21s. a ton, i.e., to provide that stockholders would not get a greater refund that the amount of the difference. But during the passage of this measure through another place the department had brought to its notice the case of the manufacturers, wholesalers, and large’ retailers who were holders of self-raising flour. This commodity is sold in small packets of 1 lb., 2 lb., or a few pounds weight, and it was not always possible to adjust the price of self-raising flour to the basis of the exact amount of the flour tax. I understand that different brands of self-raising flour had included in their prices certain provision for flour tax, but it was always less than the actual amount of tax involved. The Senate’s amendment sets out to remedy that position and to make a full refund of the £2 12s. 6d. a ton on flour contained in self-raising flour to holders of more than 1,000 lb. of that type of flour.
– I cannot assure the honorable member completely on that point, but I can assure him the full flour tax of £2 12s. 6d. a ton has been paid on the flour used in manufacture. It may have been paid by the manufacturers in the first place, or it may happen that, in a few isolated cases, we may be making a refund to the actual holder of the flour slightly more than is justified ; but the Government has, in all cases, collected £2 12s. 6d. on the flour content of self-raising flour. The flour tax was lifted when this Parliament was not in session, and the difficulty was not anticipated. We would only be able to give the exact refund if we knew the brands of self-raising flour held on the 24th of February, and records were not taken of the exact brands of flour. The difficulty, however, is a relatively minor one, and substantial justice is being done. This additional refund, I am assured by the department, will be quite immaterial in the total amount. The Senate’s proposal is to have a wider proviso, dealing with the Tasmanian case, and, in addition, covering self-raising flour. The Senate’s other amendments are verbal and consequential. I assure the committee that there is nothing else of consequence in these amendments.
.- The principle in this amendment is to extend the intention of the Parliament to a category of taxpayers who have borne this tax. There was no intention on the part of Parliament that on the date on which the tax was annulled by proclamation there should be held by the Crown sums which it did not intend to hold. My only difficulty is that, while the Crown is discharging money it has collected in full, it is unable to assure itself that it is paying back to those who have actually paid the tax, amounts that they have actually paid. But I am satisfied that more justice is being done by the amendment than would be the case if we did not agree to it. Probably, some people will get something that they have not paid, but on the balance, having regard to the fact that we have agreed to the lifting of the tax, there appears to be no other course open to us than to accept the amendment.
Motion agreed to.
Further verbal and consequential amendments agreed to.
Resolution reported; report adopted.
In committee (Consideration resumed from the 29th April (vide page 995)):
Clause 25 -
Mr. CASEY (Corio - Treasurer; [3.29].- I move-
That after the word “Interest” the words “ (except interest paid outside Australia to a non-resident on debentures issued outside Australia by a company) “ be inserted.
This amendment agrees with the definition of assessable income of a taxpayer.
Honorable members may remember that towards the end of 1934 an amendment of the Income Tax Assessment Act was passed by this Parliament, relieving Australian companies which had floated debentures outside Australia of the necessity to deduct federal income tax at the company rate from the interest on those debentures, in eases in which the Commissioner could not attract the tax directly and of his own accord from the debenture holder, because the debenture holder was outside his jurisdiction, usually in England. That removed an injustice from a number of companies in Australia, inasmuch as, if the Commissioner could not collect tax from the debenture holders abroad, those companies had to bear the burden of it and could not recoup themselves. The amendment which I have just moved carries that position a stage further. The previous alteration of the law still left on the Commissioner the responsibility to issue assessments to these debenture holders in England with respect to debentures held in Australian companies, even though those debentures were raised and domiciled overseas. Having no alternative but to obey the law, the Commissioner issued large numbers of these assessments, some of them for very small amounts. This caused great irritation, particularly in the City of London. The present proposal merely removes from the Commissioner the obligation to perform this barren operation.
– By the prospectus, they were specifically exempted from taxation by Australian governments.
– This amendment will place debenture subscribers in the same position as that occupied by bond subscribers ?
– In effect, yes.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 26 to 33 agreed to.
Clause 34 (Cost price of natural increase).
.- This clause makes provision for the application of a perfectly fair method for the alteration of the formula previously allowed for the calculation of the value of natural increase of live-stock. But in the memorandum which accompanies the bill, the Treasurer has been good enough to include particulars of an amendment which he proposes to make to the schedule, stating the alternatives allowed to taxpayers for the valuation of the natural increase of their stock. It is quite reasonable to provide for higher valuations in a number of cases. In certain circumstances, it is. to the advantage of the revenue that taxation should be paid at a higher conventional value than was previously the case when natural increase was taken under the old schedule of alternative values. But what I take exception to is, that the minimum rate has been increased. That, over a run of years, must have the effect of inflating slightly the liability of the taxpayer. In districts where the chances of the progeny of cattle, sheep or horses surviving are most uncertain, it is important that the rate at which the young animal is taken in for income tax purposes should not be excessive.
– Where the Commissioner is convinced that either a higher or a lower value than that fixed by tha schedule should be allowed, he has the power to allow it.
– I am not referring to districts like Kimberley, in Western Australia, in which obviously sheep are not worth 4s., or calves £1 a head, but have in mind u very large area of arid, country in the centre of Australia where, if sheep survive, they are worth more than that sum, and if they do not survive, are worth nothing. It should bepossible to strike a fair average by allowing the conventionally low minimum qf 2s. 6d. for a lamb and 10s. for a calf.. That amount for a calf is not too low inthe present condition of the cattle industry over a very considerable area of cattle country. I am not objecting tothe provision for a more complete taking into account of the natural increaseof livestock, but I press the Treasurer togive the assurance that, if the clause ispassed in its present form, the minima-, of the old schedule will not be altered.
– I understood that this was a measure to simplify and! make’ uniform! the legislation of the Commonwealth and the States. I stress simplification, because it seems to be the reverse of the simplification which small dairy farmers have sought in connexion with the returns they have to make. If honorable members read the clause, they will CeO how complex it is. I believe that it is likely to cause quite a lot of concern, particularly among the small dairy-farmers, who, in the preparation of their returns, will have to obtain the assistance of experts. The Queensland Income Tax Assessment Act contains a. provision which for some time has worked quite successfully and has given considerable satisfaction to small dairyfarmers. I ask the Treasurer to consider the elimination of this provision on the grounds set out by the honorable member for Wakefield (Mr. Hawker) and by the inclusion in the bill for a clause similar to section 25 of the Queensland act.
– I join issue with the honorable member for Wentworth (Mr. E. J. Harrison) regarding the undue complexity of this provision. In the past, there have been State schedules of valuation and a Commonwealth schedule also, and all of them were different. It is true that up to the present, the preparation of returns by small or large primary producers has been complicated, but that has been largely remedied. The clause may seem complicated, but I venture to believe that it will prove very much more acceptable, combined with the relative clauses in the State bills, than the previous arrangement. I remind honorable members that, although a clause designed to cover all branches of primary industry must necessarily be comprehensive and, to some extent, complicated, to any individual interested in only one branch of primary production its requirements will prove simple enough.
– Does the Treasurer think that, although this is undoubtedly an improvement on the old act, it could be still further improved?
– I remind the honorable member of the difficulties of getting even this measure of agreement amongst six separate States. The conference of taxation commissioners which considered the draft legislation had the advantage of consultation with Mr. Powell, of South Australia, who is an expert on accountancy matters associated with primary production, and he, I understand, was satisfied with this provision, which is also acceptable to all the governments concerned.
– Have the rates of 4s. and £1 been agreed to by all the States?
– Yes. In fixing the minimum and maximum we must have regard all ‘ the time to what the States will agree to. It must be remembered also that the commissioner has the right to give to any pastoralist or farmer, who can show special cause, the right to select a lower or higher figure than that stipulated in the schedule.
.- I ask the Treasurer (Mr. Casey) to give consideration to the suggestion that a clause similar to section 25 of the Queensland Income Tax Act be inserted in the bill. That section is as follows: -
The commissioner may exempt persons who tlo not own more than one hundred and fifty head of livestock from returning such livestock as on hand at the beginning and end of a year of income, but such persons shall return the numbers and values of livestock purchased during the year, and return as income the proceeds of any livestock sold by them during the year.
I am advised that such a provision would materially assist the small dairy-farmers in making out their returns. The existing provisions are so complicated that a man almost requires the services of an expert in order to comply with them, and those farmers living, in remote places are, of course, not able to obtain such advice, even if they could afford to pay for it.
.- I should like to ask the Treasurer (Mr. Casey) to what extent the Commonwealth and State taxation authorities have been able to achieve unanimity in regard to provisions covering natural increase amongst livestock. At the present time, there is a considerable difference between the valuation set on natural increase by the Commonwealth, and by that fixed by certain of the States. The Commonwealth method is a great deal fairer that the method which applies in Western Australia, where different values are placed on natural increase in the north, in the centre, and in the south. The lowest values were fixed in the north, higher values in the centre, and the highest of all in the south. In actual practice, it has been found that the values should have been the reverse of those arranged. The State is placing a value of £4 a head on calves in certain parts of the State where, during the last two years, the actual market value for such calves has been less than £1. Fullgrown three and four year old cattle have not been realizing the price which the taxpayer is called upon to place on calves.
– I am told that there is complete unanimity among the States and the Commonwealth on this point.
.- Representatives of the Country party in this House are once more making an attempt to obtain special concessions for their own class. The honorable member for Wakefield (Mr. Hawker) quoted an instance in which a certain value was placed upon natural increase for taxation purposes, when, in fact, sheep in that area had no value at all. If that were so, then the taxpayer in question must have been mad to be trying to raise sheep there. Such a man should not be on a farm; he should be in a lunatic asylum. I take it that the value placed upon natural increase is intended to be some indication of the value of such stock at birth. If the farmer chooses to rear that stock to maturity, he must accept the risk of their living or dying, but if they die he can claim an allowance in respect of them in making out a subsequent income return. In this respect, the man on the land is in no different position from the business man who incurs losses, and who is granted an allowance in respect of them. If he does not get the allowance in the year in which the losses are incurred, he can claim it for the next year. Usually the farmer will know, by the time he is making out his return for the year, whether the stock born that season will, in favorable circumstances, survive to maturity, but if they should happen to die after the return is made, he may claim allowance for them in his next return. I maintain that the primary producers are receiving enough concessions already at the expense of the taxpayers, and the Treasurer (Mr. Casey) should not give anything more away.
– I agree with a good deal that was said by the honorable member for Wakefield (Mr. Hawker) as regards the minimum valuation on natural increase, but I presume that the amount will be subject to variation by regulation from time to time. The danger I see in regard to the minimum fixed by regulation is that taxpayers will regard that figure as final, unconscious of the fact that they may approach the Commissioner to obtain a further reduction. If there is to be a ^provision for such further reduction, why not retain the original minimum ?
– The States would not agree.
– I know how difficult it is to obtain agreement among the States, and if this provision represents the only possible compromise to which they would agree, then the committee cannot do anything more about it. I regret, however, that the previous minimum of 2s. 6d. was not retained.
.- The statements made by the honorable member for Werriwa (Mr. Lazzarini) show that he has a complete lack of knowledge of the real position with regard to the nominal valuation of the natural increase of stock. It is now competent for every stockholder to include in his income tax return the natural increase of stock at market value at the time he makes up his return or at some value within the range of from 2s. 6d. te 10s. a head stipulated by the Commissioner. The proposal now before the committee is that the present range should be raised. Primary producers are not asking for a concession. While they hold that there is no justification for raising the rate, the point is not material, because, whatever amount, 4s. or 10s., the grazier may accept to cover the natural increase, this merely acts as an instalment as the real income tax is based on the price at which he subsequently sells. But a point to bo considered is that in Australia to-day, many lambs are marked in May and J une and the return of income tax is made up to the 30th June, when the lambs may be two, three, or four weeks old.
– In what part of Australia are lambs marked in May or June ?
– I am sorry that the honorable gentleman does not know that in some portion or other of Australia Iambs are dropped every week in the year. If lambs are dropped in, the middle of June they will be two weeks old at the 30th June. In such cases, they are not worth 4s. each. But the difference is not vital, and it is adjusted on sale. Many taxpayers include them at their actual valuation on the 30th June when, in some cases, they may be four or five months old, or saleable suckers, worth 18s. a head. Provided a grazier maintains a. regular practice in assessing the value of his lambs, he is all right. But he cannot take them in at 10s. one year, and at market valuation the next; he must either keep to market” valuation or include them at the appropriate figure within the range prescribed by the department. It is not a vital matter, and seeing that the whole of the States have agreed to this schedule, I will accept it. I merely rise to remove the idea which seems to be in the mind of the honorable member for Werriwa, that graziers are looking for some advantage out of this proposal. Every producer, whether of lambs or of cattle, is bound to include eventually in his return the amount which he receives for the sale of his stock. The impression which the honorable member for Werriwa seemed to have is entirely incorrect; no request has been made in this regard for any concession to primary producers. It is merely a question of the time and method of including the natural increase as income.
– I doubt if there could be any better evidence of the anti-primary producer attitude of honorable members opposite than that furnished by two or three Opposition members during this debate. The honorable member for Werriwa (Mr. Lazzarini) is so absolutely against any lightening of the conditions of people engaged in the primary producing industry that he jumps to all sorts of conclusions, and attacks even a request for further information. He questions whether there are places where stock is of practically no value. Undoubtedly there are places in Australia where, during the last few years, grown cattle have scarcely been worth £1. In parts of the Northern Territory, for instance, grown cattle have been purchasable at 10s. a head, and even at that price have been a drug on the market. In other outlying districts, where the risk of young live-stock not reaching maturity is very considerable indeed, and where it is difficult for producers of stock to finance their properties during periods of depression, the necessity of paying taxes on their stock before they have a chance to market them is a handicap against successful settlement. The suggestion that it is fair that the minimum amount in the range for lambs should be lower is not made with a desire to evade taxation, because, when live-stock are sold any profits received by the producer are automatically included in his income tax return. It is only a question of how much should be taxed in advance before the animal is actually marketed. As the honorable member for Riverina (Mr. Nock) has pointed out, thi3 is not a matter of fundamental importance, however much of a minor injustice it may be. Since the Treasurer (Mr. Casey) and the Commissioner have explained to me that the range has been prescribed in the interests of uniformity between the States and the Commonwealth, I do not propose to press the matter to a division. I am prepared to accept, the assurance of the Treasurer and the Commissioner that cases of actual hardship will be dealt with on their merits, and that the option of the Commissioner will, in practice, be freely exercised.
Clause agreed to.
Clause 35 - (1.) Where under the previous act, a taxpayer elected to omit from the account of his stock-in-trade the value of natural increase of his live stock, the value of the natural increase omitted in pursuance of that election and on hand at the .beginning of the first year to the income of which this act applies, shall be taken into account as trading stock on hand at the beginning of that year. (3.) The value per head ascertained as the cost price of natural increase under paragraph (6) of sub-section (2.) of this section shall, unless altered with the leave of the Commissioner, apply also to natural increase of the first year of income to which this act applies and of all subsequent years.
, in his all-embracing second-reading speech, gave an example endeavouring to show that the Government is going to make a present to his hypothetical pastoralist of the tax on £5,000. I venture to suggest, in connexion with this very complicated matter, that the Leader of the Opposition has, in some way, been misled. I have had the officers of my department go very carefully into the case mentioned by him, and I am advised that the pastoralist cited would pay tax on £8,500, not £2,500, as stated.
– That is £1,000 more than he would pay at present.
– That is so. Ignoring any purchased rams on hand at the beginning and end of the year, the facts in relation to the honorable member’s hypothetical case are as follows: -
On hand at beginning - 20,000 station-bred sheep.
Sold during the year - 10,000 sheep, at 15s. a head.
Natural increase during year - 12,000.
Closing stock- 22,000.
Under the present law, such a taxpayer would pay tax on the proceeds of the sale of 10,000 sheep at 15s. a head, which would be equivalent to £7,500. Under the bill now before the committee, he will pay a tax on £8,500, ascertained as follows : -
I cannot quite see, and the officers of my department have been unable to gather, why the Leader of the Opposition gave his hypothetical pastoralist a deduction of £6,000 as the value oflambs born during the year, because neither the present law, nor the bill now before the committee, authorizes any such deduction.
I now propose to deal with two circulated amendments, the first of which is designed to improve the phraseology of the clause. The reason for the introduction of the second amendment is described in the footnote, which is selfexplanatory. I move -
That the word “as”, sub-clause (1.), be omitted with a view to insert in lieu thereof the words “ in ascertaining the value of “.
.- I frankly confess that, as the Treasurer (Mr. Casey) made his exposition of the example which I gave him, I was impressed with the possibility that I might be in error. It appears that only mathematicians and taxation experts can understand these matters. Apparently, on the facts presented by the Treasurer, the tax paid by my hypothetical pastoralist would be increased by £1,000.
– It may be evened up in the next year.
Mr.CURTIN- It may, but I can see that the mistake which I have made is that I have deducted the natural increase during the year, on the assumption that the bill destroyed the option which the present law gives. That would explain the manner in which my computation was made up. I can assure the honorable gentleman that it was not submitted in any desire to misrepresent the position.
Amendment agreed to.
. - I should like to have some indication from the Treasurer (Mr. Casey) as to what precaution the primary producer may take in order to protect himself against any subsequent difference of opinion which may arise between the Taxation Commissioner and himself as to the market selling price at the beginning and end of the year. I take it that the market selling price would be assessed on the 1st July, and the primary producer’s income tax return would be submitted during August. His return would be considered during subsequent months by the taxation officers, and the assessment would not he made until January, seven months later, when it might be called into question by the Commissioner..
I take it that it would be competent for the Commissioner to place some arbitrary value on the stock which it would be extremely difficult for the primary producer to dispute effectively. I do not think that any provision has been made to protect the primary producer against the real difficulty which I have described.
– The honorable member for Macquarie (Mr. John Lawson) has dealt with what is, after all, a matter of fact. The market value of stock at the beginning and end of any year can easily be ascertained. The Commissioner has to accept the evidence of sales in the district. In practice very little disagreement occurs between primary producers and the Commissioner on this subject.
– In any case the matter would adjust itself.
– Where there is any difference of opinion, the subject could be dealt with on appeal in a commonsense way. Records are to be obtained in all districts of the value of stock sold. In practice, as I have said, very few appeals are made on this subject.
.- The taking into account of natural increase may adjust itself satisfactorily to the Taxation Department. To that extent, I agree with the honorable member for Yarra (Mr. Scullin). But it does not always adjust itself satisfactorily to the primary producer. On one occasion we had brought under our notice in Melbourne the case of a cattle-grower who had 8,000 calves taken into account at a valuation of £1 a head. He paid tax on £8,000 in this connexion. ‘ But during the year all the calves, and 4,000 of their mothers, died. I fail to see how such a happening could be adjusted satisfactorily to the taxpayer.
– It could be done by declaring the amount as a loss.
– But the taxpayer would have paid the tax at the higher graduated rate in respect to that amount. It would have been taken into account as income, whereas he enjoyed no benefit whatever from the stock, but only incurred a great deal of anxiety. It is no satisfaction to a producer, in such circumstances, to claim a subsequent deduction when probably he will be showing a loss. With the best intention in the world a fictitious value may be applied to live stock.
– Obviously, a taxpayer would, in the circumstances outlined by the honorable member, obtain redress on appeal.
– The trouble is that, in such circumstances, the taxpayer has to pay out hard cash as though he had received some revenue from the stock, whereas he had actually received nothing. It is for this reason that I contend that any subsequent adjustment, while satisfactory to the department, may be anything but satisfactory to the taxpayer. It is unfair to include such stock as income. The stock may be an asset, but by no stretch of the imagination can it be regarded as income.
Amendment (by Mr. Casey) agreed to-
That at the end of sub-clause (3.) the following (proviso be inserted: - “Provided that the value per head of natural increase of the first year of income to which this act applies and of all subsequent years shall not be less than the lower of the limits prescribed under this act in respect of the value to be selected as the cost price of natural increase.”
Clause, as amended, agreed to.
Clause 36 (Disposal of assets of a business).
– If this clause is agreed to, it will deprive the pastoralist of an advantage which he has enjoyed for a number of years. In the definitions clause “ trading stock “ includes -
Anything produced, manufactured, acquired, or purchased for purposes of manufacture, sale, or exchange, and also includes livestock.
The words “ and also includes livestock “ have been added. The reason given for this is that it is proposed to tax all sales of livestock, including sales of breeding stock where they are sold or not sold on a walk-in walk-out basis. The explanation of clause 36, which appears at the bottom of page 46 of the Explanatory Memorandum, states that this clause has been drafted in accordance with the recommendation of the Royal Commission on Taxation. It is said that, because the taxpayer obtains a deduction of the cost of purchasing or producing breeding stock,, it is only fair that when he disposes of them, whether to end his business or otherwise, the profits of the sale should be taxed. I submit that that is a misleading assumption, as all stocks on hand at the end of an accounting period, including purchased stock or natural increase, have to be brought into account and the deduction of the cost of purchasing or producing stock is offset by the value placed on the stock on hand at the end of the accounting period for which the income is being assessed. When a station business is sold, that part of the livestock representing the capital of the business is deleted from the livestock trading accountby crediting it with the cost -value of the stock, so that it will be seen that no benefit accrues to the taxpayer by reason of his having been allowed a deduction of the purchase price or cost of production. The sale of breeding stock of a station business in a walk-in walk-out sale represents the realization of capital, and any profit made on the sale of this asset is an accretion of capital. I submit that, in the case of a station property, the breeding stock could be put in the same category, as, say, in the case of a lathe-manufacturing business, the lathes used in the business to manufacture other lathes. In the case of the sale of such a lathe-manufacturing business the lathes which comprise the plant mustbe regarded as part of the capital. Is it suggested that they would be brought into account?
– They would be brought into accounton the sale of the business, less depreciation.
– If a man spends his income to increase his capital, the expenditure should be taxed.
– I submit that capital expended in building up a business should not be considered as stock in the business.For instance, lathes used for the manufacture of other lathes should not be regarded as production. Similarly, breeding stock used on a station for the production of other stock obviously should not be subject to taxation.
Another point requires some consideration. It seems to me that this clause will, in the future, provide ample grounds for litigation. The purpose of this measure is to impose a tax on incomes, and, although it is possible for Parliament to decree that certain things may be regarded as income for the purposes of income tax, which, in truth, are not income at all - and a court preferring not to invalidate a taxation act, may agree with that view - Parliament should not include in a measure that it passes any provision which is ultra vires the Constitution. Section 55 of the Constitution provides that -
Laws imposing taxation . . . shall deal with one subject of taxation only.
I submit that to impose a tax on capital by means of an income tax act would be clearly ultra vires the Constitution, although I admit that in the particular circumstances with which I am dealing the decision would depend upon the interpretation of what breeding stock really are. Breeding stock, in my opinion, must be considered as plant or means of producing other stock, which is the business of the farmer or producer. There is no question, of course, as to what should happen in the case of sales of breeding stock too old to use for breeding purposes. When such stock are sold, the receipts are taken into account in the accounting period which is the subject of taxation. But I am directing attention to the sale of a station property, or part of a station property, on a walk-in walk-out basis, and I contend that, in such a case, the breeding stock is part of the capital of the concern. Income tax should not be imposed on the proceeds of such a sale.
– This is, of course, an important clause, in which it is proposed to remove an exemption allowable under the existing law. At present, proceeds from the sale of livestock used for breeding purposes are not taxable. In order that honorable members may have a clear understanding of the issues, I direct attention to the relevant remarks of the royal commission, on page 105 of its report, and I must admit that I cannot get away from what seems to me the inescapable logic of the commission’s contentions. In referring to the pressure brought to bear upon it to maintain the present exemption the Commission stated -
Witnesses representing the various associations of graziers were insistent in their request that we should recommend that this concession should be continued, and that it should he extended to all States. The arguments advanced to justify this request, however, do not appear to us to be convincing.
The claim is based upon the argument that live stock used for breeding purposes is equivalent to plant, and that when it is sold the proceeds should be regarded as a realization of capital. But the grazier does not take this view when he buys it, for the. cost is debited to his working account, and he is allowed a deduction in full for the amount so expended. If breeding stock is sold otherwise than upon the realization of a business, the proceeds are brought to account as ordinary income, and the grazier is taxed on the profit or allowed for the loss on the transaction. If the argu-mont that breeding stock is capital be sound, it should be treated consistently in all circumstances, and in that event its cost would not be allowed as a deduction, nor would any profit upon its realization be taxable.
The truth is that live stock possesses some of the characteristics both of a fixed asset and a trading asset. Although an animal may be acquired primarily for breeding or woolgrowing purposes, its ultimate sale is in many cases by no means a minor consideration. The life of any stock is limited to a few years, and it must be eventually realized or replaced.
Another aspect of the subject may be commented upon. The offspring of stock acquired for breeding may bc omitted from the accounts of the taxpayer or brought in at a low value. Tn either case the payment of tax on the real profits of the business is delayed. In the event of realization the resulting profit is increased cither because of the omission of natural increase or because of the low value at which such natural increase has been brought into the accounts, and in these circumstances, the profit does not represent a capital profit which is due to an appreciation in values, but a profit which is due in part at least to the fact that the cost of the breeding stock sold lias been reduced by the operation of the regulations to a sum which is less than its true worth. It is clear, therefore, that a grazier who either omits natural increase or who brings, natural increase into his accounts at a low value, derives a benefit which is not enjoyed by a grazier who does not avail himself of either of these options.
In our opinion there is no real justification for the continuation of this concession. There can be no real grievance, as in almost every case no less than the full cost price of every hoad of stock purchased or reared has been allowed as a deduction. We should point out that a grazier is not permitted to claim any loss resulting from the sale of breeding stock upon the realization or discontinuance of a business, and that as a matter of fact the concession only operates to his advantage when the values of stock are relatively high.
It appears to us that the claim for the exemption of profits in these circumstances is really based upon the fact that the business is to be terminated, and not upon the nature of the stock sold. If this be admitted it is difficult to see why the profit on trading stock realized by a merchant in similar circumstances should not also be exempt from tax.
This was, in fact, the position until the Commonwealth Act was amended to make such profits taxable, and there seems to be no reason why an exemption denied to the merchant should be permitted to the grazier.
.- The old law worked in favour of the man who was making a profit, and against the man who was making a loss, on the sale of his breeding stock. When I was in office, stock-owners were making a loss and we had to amend the law to give them relief. Take, for example, ewes purchased for breeding purposes at 10s. a head, and sold for 15s. The department could not collect any tax on the profit of 5s. a head.
– It is only on the winding up of a business that this point arises.
– Wo; breeding stock is sold at other times. The department could collect tax only on the increased value of the wool which was estimated at 2s. a head, and not on the 5s. profit. When the depression occurred, and owners were selling at 10s. a head sheep for which they had paid. 15s. a head, they still had to pay income tax on the wool, although they had sold the stock at a loss. The law was then amended to exempt the value of that wool from being counted as income. I think that the alterations recommended by the commission will make those who have an income pay tax, and allow those who suffer a loss to escape it.
.- I recognize the great knowledge which the right honorable member for Yarra (Mr. Scullin) has of taxation laws, and the fairminded way in which he approaches taxation questions. I agree with him that in regard to sales of breeding stock during the carrying on of a business, the proposed alteration of the law will make the position more equitable, and much simpler than in the past. It will avoid the duplication and dissecting of accounts, and the keeping of different accounts separate. However, in the winding up of a business, that part of the assets represented by the breeding stock is undoubtedly part of the capital of the business. We should not tax a capital increment due to improved conditions, possibly all over the world, and certainly in Australia. This is a tax which graziers feel is an unjust addition to all the other imposts. I fail to realize how the Treasurer can say that this bill does not increase income taxation. Surely we are not to deny to the grazier the benefit of a principle universally recognized. The proposed alteration means, not an extension of taxation year by year, but an extension in great hunks from time to time. As it involves a denial of the principle that an increment in the value of capital assets on their sale belongs to the taxpayer, I support the honorable member for Grey (Mr. McBride) in his request that this established principle shall not be abrogated, and that the owners of breeding stock shall not be denied the freedom from tax enjoyed by owners of other fixed assets throughout Australia, such as cit, and town .property.
.- When walk-in walk-out sales are made, those likely to be parties to them should be warned that, whilst these are bulk sales, the actual details will be taken into account. As the honorable member for Grey (Mr. McBride) has pointed out, the new provision will deprive breeders of an advantage previously enjoyed by them.
– In a walk-in walk-out sale, the only details one could have would be on paper, and the Commissioner would still have the right to determine as to their correctness or otherwise.
– I take it that the Commissioner’s powers would be limited.
– The taxpayer might overvalue one class of stock and undervalue another.
– -There would be a buyer and seller, and the Commissioner would find great difficulty in intervening in a sale made between two parties, in which the prices at which the land and stock were sold were separately shown.
– Suppose a seller added 10 per cent, to the value of the plant, and made a deduction of 10 per cent, from the value of certain stock in order to evade the tax, would not the Commissioner have the right of review?
– He would, but his wings would be clipped. I can see a way to avoid the cruel imposition which the State taxation laws impose upon me individually. I could sell the calves, to which I have previously referred, at 10s. n bead, and buy them back at £4 a head, showing a loss of £3 10s. a head. It would be a wise procedure for any seller to state the value of stock and plant separately.
.- I do not consider that the point raised is as vital as the honorable member for Grey (Mr. McBride) has suggested. After operating for a short time the new provision would cause no disadvantage, because every grazier would show in his returns of the previous year the value of all stock on hand. If he sold on a walkin walk-out basis, and there was a separate price for the stock, the only amount on which he would pay tax would be the margin between the value in the previous year’s return and the amount realized on sale. If he realized less than the amount at which the stock was valued in the previous year’s return, a credit would be shown in the current return. If the grazier or farmer has the right to include natural increase of lambs at 4s. a head, and to take them in as breeding stock, and if those- lambs are worth £J a hoad when he sells them, it is fair to pay tax on the increased sale value. After the provision has been in operation for a few years, I do not think that any objection will be taken to it. A trader who sells out and obtains only £900 for £1,000 worth of stock on hand gets a credit of £100 in compiling his next return. If the goods realize £1,100, there is a debit of £100. It is an equitable and sound principle, and, even if this clause make= an alteration of the law, no injustice will be done, and the change over will soon work smoothly. *
Clause agreed to.
Clause 37 (Devolution on death).
.- This clause deals with property which is transferred at death, and some anxiety has been expressed as to whether it overrides clause 222. I should like an assurance from the Treasurer (Mr. Casey”1that such is not the case or else an assurance that when we come to clause 22? the Government will not object to an amendment by which clause 37 is specifically named.
– This point has been raised previously, and has been considered by the department. Under clause 222, the privilege of non-assessment of income tax between, the 1st July in any one year and i lie date of death of a taxpayer, is extended and the income is not brought into account for federal income tax purposes. What has been worrying some people is whether there is any repugnance between clause 37 and clause 222. I am assured by the Attorney-General’s Department that there is no such repugnance, and that the provisions of clause 222 override those of clause 37. It is the intention of the Government that that should be so.
Clause agreed to.
Where goods manufactured out of Australia are imported into and sold in Australia by the manufacturer of the goods, the profit deemed to be derived in Australia from the sale shall be ascertained by deducting from the sale price of the goods the amount for which, at the date the goods were shipped to Australia, goods of the same nature and quality could be purchased by a wholesale buyer in the country of manufacture, and the expenses incurred in transporting them to and selling them in Australia.
. - I move-
That the word “ and “, first occurring, be omitted, with a view to insert in lisu thereof the words “ Australia and the goods are, either before or after importation,”.
This is a more or less formal amendment.
– What does the clause do ?
– As the clause is drafted in the bill, the imported goods have to be both imported into and sold in Australia by the manufacturer. In many cases, however, the ex-Australian manufacturer who sells the goods in Australia does not import them into Australia, but gives delivery abroad. It was intended that the clause should apply in all cases where the manufacturer sold the goods in Australia, irrespective of who imported the goods into Australia. This intention is made clear in the proposed amendment.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 39 consequentially amended, and, as amended, agreed to.
Clauses 40 to 43 agreed to.
Clause 44 - (2.) The assessable income of a shareholder shall not include dividends -
– I move -
That paragraph (d) be omitted.
This is the amendment to which I referred in committee last night. The paragraph is unnecessary.
Amendment agreed to.
Clause further consequentially amended, and, as amended, agreed to.
Clauses 45 to 50 agreed to.
Clause 51 (Losses and outgoings).
Sir LITTLETON GROOM (Darling
Downs) [4.52]. - I have already directed the attention of the Treasurer (Mr. Casey) to a letter, dealing with clause 51, which I have received from the Warwick Chamber of Commerce. The letter states that it is realized that the object of the clause generally is to give relief which does not at the present time exist, but raises the point as to the use of the word “ necessarily “. It points out that the word does not appear in the corresponding provision of the bill introduced in the Parliament of New South Wales. There is some feeling that the inclusion of the word “necessarily” may lead to conflict and to possible litigation. Would the Treasurer kindly explain the purpose of the inclusion of the word?
– This clause gives a considerable broadening regarding deductions allowable in respect of business in the interest of taxpayers. The point has been raised by the honorable member for Darling Downs (:Sir Littleton Groom), and in other places, as to the use of the word “ necessarily “. The position is that the present disallowance section, both in the Commonwealth and the State acts, provides a rigid test, in that the expenditure to be allowed must be “ wholly and exclusively” incurred in the production of assessable income. In the bill, the general allowance clause, in respect of business deductions, has been considerably widened. The bill also combines in the one clause, both the general allowance and the general disallowance sections of the present act. The clause, as drafted, was adopted only after the most careful consideration.
Although the word “necessarily” does not appear in the New South “Wales bill, it does appear in the uniform bills drafted for the acceptance of other State parliaments. The representatives of the States concerned were only persuaded into the acceptance of the new clause in the interests of taxpayers,, by due regard to the proper limitation of the section by the insertion of the word “necessarily”. It must be borne in mind that there are taxpayers who will attempt to exploit such a section with all types of deductions of a personal nature on the ground that they are incurred for business purposes, and of course the law cannot allow exploitation of something which is meant to be strictly limited to business activities. Such an example would be that of entertainment expenditure.
Any deduction disallowed under this clause in a taxpayer’s assessment is as much the subject of an appeal against the Commissioner’s decision as any other item in an income tax assessment.
I might mention that, in England, a deduction is not allowed if the expense is not wholly and exclusively laid out for the purpose of the business. It has been held in that country that an expense, in order to be deductible, must be essential to the earning of the gross receipts. In the United States of America the law provides that “ the business expenses deductible from gross income include the ordinary and necessary expenditure directly connected with or appertaining to the taxpayer’s trade or business.”
Honorable members will, therefore, see that the word “ necessarily “ has not been chosen at random. I believe that it is essential, and I repeat that I am firmly of the belief that, if the word had not been included, the other governments, with the exception of New South Wales, would not have accepted the broader provision.
– I raised this point on the second-reading discussion I cannot see any justification for using the word “ necessarily “ .before the word “ incurred “ in the third line of the clause, and for omitting it in the second line where the word “ incurred “ occurs. The clause reads - (1.) All losses and outgoings to the extent to which they are incurred in gaining or producing the assessable income,-
That is to say, however unwise or stupid may be the expenditure in gaining or producing assessable income so long as that expenditure is incurred, it is allowable. The clause goes on - or* are necessarily incurred in carrying on a business for the purpose of gaining or producing such income, shall be allowable deductions except to the extent to which they are losses or outgoings of capital, or of a capital, private or domestic nature, or are incurred in relation to the gaining or production of exempt income.
This is where the Commissioner is entitled, as it were, to act as a sort of arbitrator as to whether a business is justifiably incurring expenditure for the purposes of carrying on business in order to gain or produce income which is taxable. It appears to me that the entrepreneur may not always be able to justify to a third-party expenditure on the improvement of a business. He may fail to satisfy the Commissioner of Taxation, particularly on a matter in which the Commissioner is to exercise discretion. That is to say, when the Commissioner becomes an umpire in regard to technical requirements of industry, it imposes on him a discretion which I am not prepared to say he is any more capable of wisely exercising than is the business man himself. While it may be true that the clause could be exploited and the tax evaded, every form of taxation has about it these privileges, which admit of improper exploitation. As a matter of fact, every deduction allowed in taxes, and every concession lends itself to undue exploitation by -the taxpayer, and can be used probably for purposes beyond the intention of Parliament. In this case, it appears to me that the business man has to justify to the Commissioner certain expenditure. It is true that if the business man were dissatisfied with the Commissioner’s ruling, he could appeal, but I venture the opinion that if he failed to satisfy the Commissioner he would probably be induced not to appeal. Therefore, because he has made investments in an endeavour to extend or improve his income, he is to bear the net loss. I do not think that that is reasonable.
Clause agreed to.
Clause 52 (Loss on property acquired for profit-making).
.- This clause provides that any loss incurred by a taxpayer in the year of income upon the sale of any property shall be allowed as a deduction. I should like the Treasurer (Mr. Casey) to say whether a loss incurred in one year upon the sale of property purchased in the previous year comes within that category. I have had experience of the case of an individual who lost money upon the sale of shares in the year following that in which he purchased them. That loss was disallowed. I was informed, however, that had he made a profit on the sale, that profit would have had to be returned, and that, had he made a loss and a profit in the previous year, the one counteracting the other, both would have been allowed, but in the case of a loss in one year, and a profit in the succeeding year, the loss would not be allowed, but the profit would have to be included. That seems to be “ heads I lose and tails you win and is to me inequitable. I should like the Treasurer to explain the position and to say if such anomalies have been provided for in this measure.
– Did the honorable gentleman have that experience under the State or the Commonwealth law?
– I approached only the one department, as I understood it dealt with both.
– - The Commonwealth department is branded with many sins that it does not commit.
– Would a man who, on a share transaction, made a loss in one year, be excluded from returning that loss, and yet be obliged to take into account a profit equivalent to the loss made in the preceding year?
– I believe that the honorable gentleman has had experience of a State delinquency. Under the Commonwealth law, both a loss and/or a profit are brought to account in the particular year in which the operation is completed.
– Will that now be uniform with the State law?
– There are some point: upon which we have not been able to achieve uniformity with the. States, and I am given to understand that unfortunately this is one of them.
Clause agreed to.
Clause 53 agreed to.
Clause 54 - (1.) Depreciation during the year of income of any property, being plant, or articles owned by a taxpayer and used by him during that year for the purpose of producing assessable income . . . shall, subject to this act, be an allowable deduction. (2.) In this section “plant” includes -
– I move -
That paragraph (b) be omitted with a viewto insert in lieu thereof the following paragraph:
fences, dams and other structural improvements on land which is used for the purposes of agricultural or pastoral pursuits but does not include improvements used for domestic or residential purposes.’”.
Paragraph b of sub-clause 2 substantially repeats the provision in the present act dealing with the depreciation of structural improvements on land owned and used for agricultural or pastoral pursuits. The provision was inserted in the act in 1927 to cover the following three classes of cases: -
For the purposes of the deduction, the Commissioner of Taxation has ruled in respect of b that a lessee may be deemed to own, during the period of his lease, the improvements effected by him. In regard to owners covered in case c, however, the 1927 amendment is defective, as the land is not used by the owner for agricultural or pastoral pursuits. This defect will he remedied by the proposal amendment.
.- Is the amount fixed as an allowance for depreciation consistent on the capital cost of machinery from year to year, or on the decreasing balance of the value of that machinery from year to year?
– The taxpayer may choose which of the two he considers is the better from his viewpoint.
.- Take the case of a pastoral lease or grazing selection which is sold after, say, seven years of the tenure of 28 years have expired. Is the purchaser entitled to an allowance for depreciation of all improvements, including fences, dams, bores, &c. ?
– I take it that when the original owner sold the lease the writtendown value of the improvements, less depreciation, would be the value for the new lessee. He would be allowed depreciation for the balance of the term of the lease.
– The paragraph provides that plant includes improvements on land owned and used by the taxpayer for the purposes of agricultural or pastoral pursuits, but does not include improvements used for domestic or residential purposes. If a man sinks a bore on his homestead for lighting purposes and domestic water supply, how will the department dissect the portion used for domestic and residential purposes from that used for other purposes?
– I quite see that if persons other than primary producers are not allowed a deduction for the depreciation of their homes the principle should apply to all sections of the community. But in some cases it is most difficult to define exactly the purpose of improvements. The homestead building is definite, and so is the garden which surrounds it. Frequently, however, there is a water supply which is used partly for the purposes of the homestead and partly for the needs of a considerable area of grazing country. That is particularly the case in Queensland, and in the flowing-bore areas of northernNew South Wales, the north-west of Western Australia, and a small corner of South Australia. In those areas there may be nearly 100 miles of water reticulation from the one bore. I should like the assurance of the Treasurer (Mr. Casey) that the fact that that improvement also serves the purpose of a domestic water supply does not render it ineligible for depreciation with respect to its other use. This applies also to other improvements which are used partly for one purpose and partly for another.
– I have consulted the departmental officers, and believe that the position is met in a common-sense way by the fact that, if a dam or a bore is used substantially for utilitarian purposes, depreciation is allowed even though a small portion of the water supply may be used for domestic purposes. I think it will be found that in most cases the department takes a common-sense view of the matter.
– I understand that the existing State and Federal law in regard to depreciation provides for a mandatory deduction by a commissioner in arriving at the taxable income of a taxpayer. The acts provide that the annual sum to be deducted may be a percentage sum fixed by that commissioner, or may be based upon the estimated life of the article to be depreciated. The taxpayer has the option to select either of those two methods. The law goes on to provide that in the event of a sale should the selling price of the property be less than the depreciated value shown, a further sum equal to the loss shall be allowed to the taxpayer as additional depreciation in the year of sale and that, should a higher figure than the depreciated value be realized, the difference shall be brought to account as taxable income, but only to the extent to which the depreciation has been allowed.
– This mainly concerns the sale of plant and articles in a factory. The commissioner fixes the depreciation for various items. If, when an article is sold, it realizes either less or more than the depreciated value, the result it either a deductible loss or a taxable profit.
– I understand that the existing law does not define “ depreciated value “ but that in this measure, and in. the measure introduced in the Queensland Parliament in cases in which depreciation has been allowed, it is defined as being the cost of the property less the amount of all depreciation allowed or allowable; and, where depreciation has not “been allowed or is not allowable, the cost of the property. These provisions certainly seem absolutely fair. It is feared, however, that in practice they may inflict hardship, particularly on those who are engaged in the grazing industry and in primary production generally. When a taxpayer sells his property, he generally has what may be called an extraordinary income, and if a profit has been made on the improvements it is inflated by the amount of the depreciation which has to be included as income. We realize that, in many instances, improvements are erected by the labour of a taxpayer and his family, and are not brought into account in depreciation values, because there has been really no cost to the taxpayer. Consequently, the landholder is taxed partly on the effort of himself and those members oP his family who have not been paid for their services. In many instances, taxpayers have not bothered to be particular about depreciation values in returns. Proper records have not been kept, and upon the sale of the property any omission will, of course, increase the amount of income. The Federal Government did not allow depreciation’ on fences and buildings until 1926. The Queensland Government had been allowing depreciation in respect of those items for many years before that, and when the Federal Government finally did allow depreciation, graziers in nearly all instances inserted the depreciation values shown in their State income tax return, so that the amount of depreciation already written off under the State act will now be brought into consideration in calculating the income arising out of the sale of the property. In the case of the sale of property, or of the resumption of part of the property by the Crown, it is almost impossible to arrive at the depreciated value of the improvement on the sold or resumed portion, as details are not usually kept of. the cost of each particular line of fencing, &c. It is felt that, under the present law and the proposed law, a taxpayer will never be able to destroy any of his income tax records, as he will always be under the necessity of keeping a record of the depreciation allowed in past assessments, and of the depreciated value of his property. It is considered that depreciation should be determined annually, and should be fixed; that it should not be subject to revision 10, 20 or even 30 years later. The present law, I suggest, should stand as to the amount of depreciation to be written off annually, either on a percentage basis, or upon the basis of the estimated life of the improvement, but any further loss arising from the sale of the property, or any profit arising from a sale, should not be taken into account. In other words, each year should stand complete, as far as depreciation is concerned. In the alternative, it is suggested that the law be amended, and that depreciation be not allowed on buildings and fences, and that depreciation should be allowed only on plant, motor cars, and perhaps windmills, bores, tanks and troughing
In the Queensland income tax law it is provided that sales of real and personal properties, which have been held for a period of seven years - other than leases - shall not be taken into account for income tax purposes, if any profits result from the sale. Under the Commonwealth law, a person is not liable to tax on profits arising from the - sale of any real or personal property, other thanleases, unless the sale is made in the course of the business of buying and selling property. The present depreciation provisions of the act destroy to sonic extent the exemption, as, irrespective of how long the property has been held, there is always the calculation to see .if excess depreciation has been allowed to the owner during the period he hasowned the property.
Last night, the Treasurer (Mr. Casey) gave an undertaking that he would submit to the members of the Royal Commission on Taxation, for further investigation, the question of taxation on the sale of Crown leaseholds for grazing purposes. I now ask him whether it would be possible to arrange that a further investigation be made into this matter of depreciation.
– I take it that, in general, the difficulty envisaged is that of arriving at an equitable, or, indeed, any value of a depreciated item of plant. If that disability were of the order of importance that the honorable member for Lilley (Sir Donald Cameron) suggests, how can the ordinary taxpayer claim reductions from such items of taxation from year to year? I admit that it is a complicated subject, but I have discussed it at some length during the last few days with officials of my department, and they fail to see the difficulty which the honorable member for Lilley has indicated. However, I readily give him an assurance that I shall refer the matter for further consideration to Mr. Justice Ferguson,’ if possible, and to a qualified departmental officer.
.- The purpose of this clause is, I understand, to allow farmers to make deductions in respect of depreciation on fencing, &c. If that deduction is to be allowed, a similar concession should be granted to the owners of city property, when they are called upon to repair fences and buildings on property from which they derive an income. At the present time, the city property owner receives no allowance for repairs; they are called improvements. In my opinion, it is proposed to make to the farmers’ concessions of too liberal a nature, and it is time we called a halt. It is evident that farmers, as a class, are not too heavily taxed, because the figures show that they pay proportionately less income tax than do other’ sections of the community. The granting of concessions of this kind to the farmers means that heavier burdens are thrown on taxpayers in general. This is not a uniform income tax bill; it is a measure to grant special privileges to a favoured few who dominate the policy of this Government, and who are tolerated by the Government because their support is necessary to keep it in power. Repeated representations have been made by taxpayers in general for relief from the burdens that are oppressing them; yet the Govern ment proposed to grant further concessions to a specially-privileged class. I appeal to the Treasurer (Mr. Casey) to proceed very cautiously when dealing with applications for special concessions to wealthy primary producers, who are living in the lap of luxury. I record my protest on behalf of the great body of taxpayers who must make up the revenue lost through the granting of remissions to those well able to pay their taxes.
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 55 to 70 agreed to.
Clause 71 -
Where, in the year of income, a loss is incurred by the taxpayer through the embezzlement or larceny by a’ person employed in the taxpayer’s business, of money which is or has been included in the assessable income of the taxpayer, that loss shall be an allowable deduction.
.- I move-
That the clause be omitted with a view to insert in lieu thereof the following: - “ 71. Where a loss incurred by the taxpayer through the embezzlement or larceny, by a person employed in the taxpayer’s business, of money which is or lists been included in the assessable income of the taxpayer, is ascertained in the year of income, that loss shall be an allowable deduction.”
The clause, as drafted, allows the loss by embezzlement, &c, in the year in which it occurred. Such losses are frequently not ascertained until some time later. To avoid the necessity for re-opening assessments in prior years, it is proposed to allow the deduction in the year in which the loss is ascertained, and the clause has been amended accordingly.
– I am convinced that taxpayers will be grateful for this new allowance, but there are still some points on which more light is required. The Treasurer (Mr. Casey) has stated that this amendment is designed to avoid the necessity for re-opening assessments in prior years. I do not think that a taxpayer, who discovers that he has suffered loss through embezzlement or larceny, will object to the re-opening of prior assessments, if he will thereby gain the benefit of a greater deduction. We know that embezzlement occurs from time to time in business, and it is not always possible to discover it in the year in Which it occurred.
– It is merely proposed to credit the deduction for the year in which the defalcation is discovered.
– If it should be found in some subsequent year, what is done in the meantime?
– In order to avoid the dislocation of reopening past assessments, it is allowed as a deduction in the year in which it is discovered.
– That explanation is quite satisfactory. I desire now co deal with the technical definition of “ embezzlement and larceny “ which I consider is not wide enough to cover the whole of the defalcations that take place from time to time. The South Australian bill includes the word “misappropriation”, and I suggest to the Treasurer (Mr. Casey) that the meaning of the words “ embezzlement and larceny “ might be considerably widened to include misappropriation, defalcations, and all kinds of theft and fraud. This would bring the clause into conformity with what the Treasurer actually has in mind. But why is this allowance to be confined to persons carrying on business? For example, a property-owner may employ a person to collect rents, and as rent is income from property the holding of property for investment purposes can hardly be termed a business. The Treasurer might well make some alteration of the definition to cover that point. Again, honorable members may he forgiven for asking why the deduction is to be restricted to cases in which funds are embezzled by employees. There are many relationships between agent and principal, in which the agent is not technically an employee. It would be interesting to learn why the discriminations have been made. The Treasurer apparently fails to appreciate this. Another point is that the deduction is restricted to embezzlement and larceny of money which is, or has been, included in the assessable income of - a taxpayer. An employee may em’bezzle the funds of his employer by means of a forged cheque, and thus obtain money from his employer’s current account and, in some cases, it would be impossible for the employer to say whether that money was income or capital. Both are frequently held in the one current account.
.- I think the definition needs to be widened. I agree that so far as those losses included in the present definition are concerned, it is reasonable to allow them in the year in which they are ascertained, and thus avoid the necessity for reopening assessments; but I am disposed to wonder why it is that the term “ person employed “ is used. After all, the majority of employees in positions of trust in business are bonded. They have taken out a security that if they embezzle funds their employer is covered, at least, for some portion of the amount, and therefore, would not suffer a total loss.
– That is not so in every case.
– What I am arguing is that there are probably more losses as the result of embezzlements in partnerships than by employees. I do not know what the strict legal definition of the words “ person employed “ is ; I expect it would be a person in employment who is in receipt of wages or salary. If that be so, a person in receipt of a commission would not be included. I have a feeling too, that the word “ business “ is so limiting in its significance as probably to mean that certain taxpayers who have suffered from misappropriations of funds will get the benefit of this concession, while others who have suffered losses of a similar character will not do so because they are not engaged in business. A man may have investments in house property, and employ an agent to collect the rents. If the agent misappropriates rents collected, such a man may not be covered by the definition on the ground that he is not engaged in business. If he were buying and selling houses he would be engaged in the business of buying and selling houses, and would come within the definition. Here there are two phrases each limiting in their application, and therefore, creating an anomaly between one taxpayer who suffers losses from misappropriation and another who also suffers from the same cause. I suggest that the ambiguous and anomalous words. in the clause should be struck out and that it should provide that if any taxpayer is able to prove to the Commissioner that he has suffered lossthrough embezzlement or larceny of money which is or has been included in hisassessable income, that loss shall be deductible from the income for that year. If the Treasurer accepted my suggestion the provision would be widened to embrace all taxpayers who suffer loss by embezzlement and larceny of money which has already been included as income.
– Could not the terms “ embezzlement “ and “ larceny “ be widened?
– There may be some argument that the terms “embezzlement “, and, “ larceny “ do not completely cover the situation. In a bill to be introduced in one of the State Parliaments the use. of the word “ misappropriation “ is contemplated.
– Would the honorable member include money stolen from private houses?
– That might be regarded as a capital loss. I can quite understandthe difficulty of the position. In any case, I am quite satisfied that whatever is allowed as deductible, whether for embezzlement, larceny or misappropriation, it should, I submit, be allowed to all taxpayers and not only to those who have been the victims of persons employed in their business.
– I point out in the first place that this is a new provision in income tax. legislation. If honorable members will look at the memorandum theywill see that a blank space has been loft opposite clause 71. This is the maximum relief in respect of which it has been possible to secure unanimity among the governments concerned; so far would they go and no further.
– I take it that the provision came spontaneously from the Government, and has not been suggested by any organization.
– The honorable member does not seem to understand that the draft provision did not emanate from the Government at all; it arose in the same way as the rest of the bill, and was not inserted on the initiative of this or any other Government. It has been suggested that the definition of the word “ embezzlement “ should be widened by the inclusion of the words “ defalcation and misappropriation “. I am informed by the officers of the Attorney-General’s Department that the word “ embezzlement “ includes defalcation and misappropriation, and that the clause would not be widened by the insertion of those two words. As larceny includes theft, everything of substance suggested by the honorable member for Wentworth (Mr. E. J. Harrison) has already been covered.
– What about conspiracy?
– As His Honour the Chief Justice (Sir John Latham) said in this House on many occasions, “ You can always think of a higher number “. Definitions can be widened indefinitely.
– When a detective is called in to investigate a case he is generally the man who suggests the charge to be laid against the culprit. If it is found that more than one employee is concerned, a charge of conspiracy is usually laid..
– I cannot believe that the particular police court charge would affect the Commissioner’s interpretation of whether the loss was brought about by embezzlement or larceny. Any attempt to widen the definition would lead to difficulties in other directions. The provision which is now made, and which has been assented to by the States, will afford relief in many cases. I ask honorable members not to press for any extension of this privilege.
– I should like the Treasurer (Mr. Casey) to explain how this provision is likely to affect agents on commission ?
.- The Treasurer (Mr. Casey) should have given more attention to the points raised by the Leader of the Opposition (Mr. Curtin) concerning the bonding of certain people who are in positions of trust, and the insurance of firms against burglary, larceny, and the like. I do not like this provision, because it puts the officers of. the Taxation Department more or less in the position of policemen. I should be very interested to hear how this proposal originated. The Treasurer’s general remarks about the structure of our taxation edifice, and the manner in which this bill has grown to its present dimensions, did not cover the particular point I have in mind.
– The whole subject first came before the royal commission; then the recommendations of the royal commission were considered by a conference of Taxation Commissioners, with two members of the royal commission. This particular point arose at the conference of Commissioners, and was not introduced in consequence of any outside influence.
– I have had a good deal to do with the preparation of taxation returns in connexion with general retail trading businesses, and I believe that such a provision as this will open the door for a great deal of taxation evasion. Unless we take very careful steps to safeguard the position, thousands of pounds will be claimed in refunds of taxation for which no real justification exists. The ordinary storekeeper, when taking stock, does not concern himself with the actual amount of profit he has made on particular articles. He may make 5 per cent, on one article, and ar percentage up to even 200 per cent, or more, if he can get away with, it, on other articles ; but in taking stock he does not ascertain the actual position of his business in every respect. A periodical writing-down of stock occurs, but the exact margins in a man’s business are very rarely ascertained with sufficient exactitude to justify any claim for consideration under such a provision as that now before us. The enactment of this clause in its present form will amount to an invitation to dishonest people to evade taxation. Everybody knows that, if it were not for the dishonesty of individual taxpayers in seeking to evade their lawful obligations, two-thirds of the provisions of this bill could be dispensed with. I notice the Treasurer nodding his head in assent to my remark, and I assure him this provision would, if passed, encourage taxpayers with dishonest tendencies to persevere in their endeavours to evade taxation. The ordinary wholesale business man takes stock much more accurately than the ordinary retailer, for he works on very different margins. On some items, such as sugar, a retailer may make very little profit, whereas on others he may make substantial profit. In his stocktaking he does not enter into fine considerations as ‘ to cost price and selling price, such as would enable him to say that he had suffered a loss of £1,500, £1,000, or even £500 in a particular accounting period.
– It is not stock but money’ that is dealt with in this clause. A theft of trading stock would not qualify for consideration.
– Though there may be a difference between stock and money, it is nevertheless true that small traders do not, in busy hours, keep such a close account of cash taken as is kept in a big business. A man in a small business, may, for instance, in the case of a small, sale of 2s. or 2s. 6d., or even 5s., slip, the money into his pocket. I know that, in some businesses a very large amount is. allowed to cover the pilfering of cash ;: but I can think of no means to trace such pilfering. I do not think it would be wise to include a provision of this kind in the bill.
.- 1 suggest that the word “ proved “ ought to be inserted in the clause before “ embezzlement or larceny “. The Commissioner should be satisfied that a loss has actually been incurred before any claim is allowed. I imagine that it is intended that any claim under this provision shall be verified or proved.
– Of course, the Commissioner would have to be satisfied that the loss was incurred.
.- The point raised by the honorable member for Forrest (Mr. Prowse) is important. I assume that it was by design that the technical and legal words “ embezzlement and larceny “ were used in the clause in preference to the commoner words “ misappropriation and fraud “, the intention ‘being to imply that there had been a finding by a court ‘ that the offence of embezzlement or larceny : had been committed. I take it that no allowance would be made under this provision unless an employee had been actually convicted of an offence. It would be a very undesirable practice to allow the Commissioner to permit deductions unless ‘an employee had been actually convicted.
– I do not think a commissioner would allow a deduction unless “he was satisfied that the offence had been committed.
– We are being asked to make an undesirable alteration of the law. In the past the legislature has not authorized such deductions as these, doubtless for the reason that a man who obtains benefit from the labour of his employees must take the risks incidental to their .employment. One of the risks is negligence -which, of course, might cause an employer . considerable loss. Another risk is dishonesty. After all, there is no more reason why an employer should be entitled to a deduction for loss occasioned by the dishonesty of an employee, than for loss occasioned by negligence.
– There is an allowance. The only difference is that the discovery of negligence is made within the year, whereas the discovery of embezzlement may not be made in that year.
– Many dishonest acts are done, often by young employees. In such cases an employer is frequently persuaded not to prosecute. Sometimes restitution is made for the loss he suffers, and sometimes it is not. If this proposed alteration of the law is made it seems to me that an employer will be impelled to prosecute in every case. At any rate, he will say to himself : “ If I prosecute I will be able to establish that I have suffered a loss and will be allowed to make a deduction in my return.” At present no such deduction is allowed, and an employer may say to himself: “Even if I prosecute I am not likely to benefit, for I will not be able to obtain anything from the family. In any case, this is the young man’s first lapse. I will not keep him in my employment any longer, but I will not prosecute him.”
– Generally, prosecutions are not launched when restitution can be arranged.
– Often, because the loss suffered by an employer is due to the first lapse of a young person, there is an incentive to clemency. I repeat that in. my opinion this is an undesirable change of the law, and I hope that it will not be agreed to.
.- The point raised by the honorable member for Bourke (Mr. Blackburn) is a good one, but he has drawn the wrong deduction from it. The wise thing to do is to extend the discretion of the Commissioner to cover cases of misappropriation and fraud. We should not make it necessary for an employer to prosecute in order to obtain the consideration it is now proposed to give him, for a prosecution, particularly in the case of a first lapse, may blight the whole career of the person involved. I suggest that the words “misappropriation or fraud” be used in preference to “ embezzlement or larceny The . honorable member for Bourke has just informed us that the words “ embezzlement or larceny “ have a technical and legal purport, which involve conviction in a court of law. The words “ misappropriation or fraud “, on the other hand, are general terms applying to the same acts, but without the legal significance.
– “ Embezzlement “ and “ larceny “ are the most all-embracing terms which the officers of the AttorneyGeneral’s Department could include.
– Will the Treasurer (Mr. Casey) give the committee an assurance that he has consulted the Crown Law officers present, and that a conviction will not be required to prove that larceny or embezzlement have been committed ?
– I submit that no business firm is likely to make a claim on account of an indictable offence committed by an employee, if the loss involved is not sufficient to induce it to push for a. conviction. No firm worries about a small, amount of loss caused by an employee’s wrongdoing ; but, if the sum is sufficiently large to affect its taxation return, the average business house goes ahead with a prosecution. As the honorable member for Wakefield (Mr. Hawker) has re marked, firms arc usually loath to wreck the life of an employee by prosecuting him for a small embezzlement. If the Minister can give an assurance that the Commissioner will not insist on a prosecution to establish a claim as bona fide, the objection raised by the honorable member for Bourke (Mr. Blackburn) will be met.
Sitting suspended from, 6.2 to 8 p.m.
– Has the Treasurer given consideration to the representations concerning the provisions contained in the proposed new clause 71? Is he disposed to accept the suggestion made by myself, or suggestions made by other honorable members?
– Without repeating at any great length the arguments that have been advanced in respect of this clause I may say that I believe there is difficulty and danger in adding to or in taking away from the clause, except in so far as it is proposed by the Government to bc amended. The reason I have given for the choice of the words “ embezzlement “ and “ larceny “ is that they are the most all-embracing terms that the legal department can discover. “ Embezzlement “ covers all terms of similar nature. “ Larceny” covers, of course, theft. One description not covered and suggested by honorable members is the word “ fraud “. I am advised that the word “fraud” is not a description that has any real meaning in law. It is a word that is associated with something else - fraudulent misappropriation, for instance. As far as legal drafting is concerned, the word “ fraud “ is vague, and its inclusion would do no more that create trouble and difficulty in the future. I cannot give the committee an assurance that the Commissioner of Taxation will be able to make a determination on other than a judgment of the court in respect of embezzlement or larceny. I should like to be able to deal with it otherwise, but it is not possible.
– Would the admission of a guilty person be accepted by the Commissioner?
– That may lead to collusion.
– That may be so. It impossible, in certain cases, that the Commissioner may be able to accept an admission by a guilty person, but I should not like to mislead the committee into thinking that that would be anything like a general rule.
– That provides a loophole similar to that foreshadowed by the- honorable member for Bourke (Mr. Blackburn). However, if the Commissioner will accept an admission by a guilty person or use his discretion in such cases, it meets the case.
– I am not attempting to bind the Commissioner in this respect. 1 believe, after conversations with him in the last hour or so, that he will accept, in certain cases, the admission of guilty persons, but that in many more cases he will be obliged to rely for deductions on the decision of the court
– That is reasonable.
– Decisions mainly will depend on the decision of the court?
– That is so. I would ask honorable gentlemen not to press the Government further in this matter. This is a considerable concession as it stands. All other governments in Australia are putting it forward in their bills, and there has been great difficulty in getting them as a whole to accept even this amount of concession.
– I should like the Minister to explain this clause further. The clause reads -
Money which may be embezzled out of a till or a cash box may be capital used in business. Would that money be included for the purposes of this clause?
– We cannot be expected to exempt capital sums where there has been defalcation, whereas we do exempt an income sum where there has been defalcation.
– It seems to me that the Treasurer (Mr. Casey) has not made a reply to one point that was raised before the dinner adjournment. The obvious intention is to allow the taxpayer deduction in the case of embezzlement or larceny, but the Leader of the Opposition (Mr. Curtin) has asked why that deduction should be allowed only in the case of the embezzlement or larceny being by a person in the employ of the taxpayer. It seems to me that the Leader of the Opposition has taken a reasonable stand, but the Treasurer has made no reference to it. If the Government intends to make provision for such a deduction as is provided for in the clause I cannot see any reason why it should apply only to defalcation by a person in the employ of the taxpayer concerned, and not to defalcations by any other person, which may be suffered by that taxpayer.
– The reply to the point raised was inherent in what I have just said. To do what the Leader of the Opposition has suggested would entail a considerable widening of the concession. There are difficulties which cannot be overlooked, such as the possibility of collusion by persons unknown, but as long as it is limited to employees of the taxpayer, it is at any, rate very much less likely that collusion will occur.
– The honorable member for Cook (Mr. Garden), by interjection, said that there may be the possibility of collusion between an employer and employee. If an employee is prepared to accept the stigma of being branded as a thief, then he is of little moral worth. That, of course, also implicates the employer, and an employeewho lends himself to such practices should be prosecuted to the maximum of the law. The Treasurer (Mr. Casey) answered, “ That maybe so,” and that seems to be stretching the case a little too far; but I am reconciled to the Treasurer’s statement that, arising out of a discussion with the Commissioner, he was assured that the Commissioner, . where there is no shadow of doubt, may accept a confession of guilt, although, in any other case, he will insist on a conviction. I do not think that every case put forward should be agreed to by the Commissioner; but he should have a certain amount of discretionary power.
.- I am not satisfied with the Minister’s statement as to the words “ larceny “ and “ embezzlement “. “ Larceny “ means different things in different States. The criminal codes of “Western Australia and Queensland define as larceny offences which are not larceny in Victoria. For instance, in Victoria, in 1896, we copied provisions from the Canadian criminal code to deal with things which the Victorian court said were neither larceny nor embezzlement, if the matter is one to be left to the discretion of the Commissioner, less technical words should be used. The Commissioner will have to insist on conviction as proof of dishonesty. 1 cannot see the Commissioner safely accepting mere confessions, of guilt. There are difficulties about the admission of guilt. An admission of guilt may be extorted on the plea that, if the guilt is confessed, there will be no prosecution, and if it is not confessed there will be a prosecution. An admission of guilt may be obtained by collusion or threats. As in practice, the Commissioner will properly insist on conviction as the only proof of dishonesty, and this will have the consequence of employers prosecuting men whom they would not otherwise prosecute. The past practice of this legislature in not accepting provisions of this type was a wise one.
.- The Treasurer (Mr. Casey) has not accepted the suggestion which I made earlier, that this clause should be extended to provide for all taxpayers who suffer loss from larceny or embezzlement, having the advantage of the provision as stated in the amendment. Therefore. I am inclined to say that, as the provision is an entirely new one, and as the act which this bill amends does not include this provision, the advice tendered by the honorable member for Bourke (Mr. Blackburn) is the best advice that the committee can get. I should be prepared to accept the provision contained in the clause, were the Treasurer ready to apply it generally, but he is not disposed to do that. He proposes that only those taxpayers who have suffered loss through embezzlement or larceny by a person employed in the taxpayer’s business shall get the benefit of this deduction. It was pointed out earlier that there is a large number of conceivable forms of loss, from such causes as misappropriation, embezzlement, larceny, or fraud committed by persons not actually engaged in the business. We give special concessions to primary producers in one clause, and special concessions to business men in another clause. This sort of thing clutters up the act with concessions not generally applicable to taxpayers. If we desire that larceny or embezzlement losses shall be deductible from assessable income, then any taxpayer who can prove such losses ought to have the benefit of that deduction. The clause does not make that provision.
– Surely it is mainly businesses which are exposed to losses of this description.
– I do not think so.
– What is the definition of “ taxpayer “ ?
– I am not interpreting the act, but am merely endeavouring to arrive at an understanding of what it will mean. I say that only taxpayers who are engaged in businesses are affected by clause 71. That seems to me to be clear. Therefore, any other class of taxpayer suffering loss by reason of fraud, embezzlement or larceny, is not covered by it. I wish it to embrace all taxpayers. That object could be achieved by the omission of the words in the second line, “ by a person employed in the taxpayer’s business “.
– Can the honorable member cite a case of embezzlement or larceny that might affect a taxpayer who is not engaged in business?
– Certainly. I have already instanced the case of a taxpayer who owns houses, the rents from which are embezzled by the estate agent by whom they have been collected. That houseowner is not engaged in the business of house-owning.
– Those rents would not be taxed, because he would not receive them.
– But it is an actual loss, and his income suffers accordingly.
– As he does not receive the amount, it is not assessable.
– Rather than give special privileges to a certain class of taxpayer, I shall vote against the clause unless the Treasurer agrees to widen it.
.- The attitude of the Leader of the Opposition (Mr. Curtin) is understandable, because he does not believe in either remissions of taxation or concessions, his idea being to maintain at the peak revenue from this source in order that it might be expended for different purposes. Though not sharing his general attitude- towards taxation, I sympathize deeply with his objection to the drawing of a distinction between taxpayers of different types. This concession is not really the allowance of a loss occasioned by theft, larceny or embezzlement. If the loss is ascertained, the amount is not included in the return of the taxpayer, and is, therefore, not assessable. The object of the clause is to meet the case of losses which are disguised by the cunning 6f the embezzler, and not discovered until the expiration of the period within which the amendment of ar assessment is permitted. The intention is that such losses shall be deducted in a. later assessment, or that the deduction shall be made retrospectively. In the case of the collector of rents cited by the Leader of the Opposition, if the rent is not paid to the person who should receive it, he obviously is aware of his loss, and can claim an allowance with respect to it in that year. But if there are cases in which the theft is not detected, and income tax is paid on the amount which the taxpayer is supposed to have received, I agree with the Leader of the Opposition that they are exactly analogous to the case of a business man whose employee embezzles his money. If the honorable gentleman were to move for the deletion of the words to which he has directed attention, I should urge the Treasurer (Mr. Casey) to accept the amendment. It is unlikely that there would be extensive embezzlements, the estimates of which had been included in taxation returns and upon which tax had been paid, from other than business sources. I therefore strongly suggest to the Treasurer that, such an amendment would cost the revenue practically nothing, and that it would tend to simplify returns by effecting uniformity over the whole field of income taxpayers.
I am prepared to accept the assurance of the Treasurer that the definition of “ embezzlement or larceny “ does not exclude certain cases in which the prosecution has not been proceeded with, or in which there has not been a conviction, and therefore shall not move for the extension of the definition. I strongly urge the Treasurer not to withdraw this concession, which is a legitimate one, and one which the taxpaying public were led to expect would be incorporated in this measure.
– Honorable members are attaching to this clause an importance which [ hope it does not deserve. I trust and believe that there will not in the future be a fruitful source of deductions under it. As the honorable member for Wakefield (Mr. Hawker) has said, losses incurred in the carrying on of a business are now proper deductions. In the case cited by the Leader of the Opposition (Mr. Curtin), the property owner nothaving received the rents, they would not be taken into account, and therefore would not be assessable. I venture to disagree with the suggestion that the clause gives a peculiar concession to a certain class of taxpayer. Only in businesses are taxpayers exposed to losses of this description. It is difficult to conceive many other occupations in which the taxpayer is exposed to the risk of embezzlement and larceny.
– ‘What about the interest collected by a lawyer from mortgages on behalf of a nian not in business?
– If the taxpayer does not receive the interest, it is not assessable income. Should a lawyer defalcate in respect of a trust fund - a not unknown occurrence, unfortunately - that is a capital loss. In any event, it does not come within the ambit of this bill. I have never regarded this provision as being of very great importance or even necessarily desirable. Nor is it a provision upon which the Government sets any great store. But as other governments have agreed to it, and it is incorporated in the bill, I should be reluctant to relinquish it, although I should be content to drop the clause rather than so widen and broaden it as to introduce danger. I appeal to honorable members to accept it in its present form. I believe that it is of some value to taxpayers who are in business, and that the broadening^ of it to any extent would be dangerous from the viewpoint of the Government and of future complications in administration.
.- Because of the nature of the speech which the Treasurer (Mr. Casey) has just made, he might well decide to drop the clause. I support the honorable member for Bourke (Mr. Blackburn) in the two points which he has raised. The first is that an open invitation is given to every employer to take proceedings against an employee who has been guilty of the theft of a small amount of money, with a view to the obtaining of a conviction so that he might deduct from his assessable income the amount involved. I do not think that that is a desirable feature in national taxation legislation. The second point is that if the Treasurer or the Commissioner did not insist upon a court judgment against the guilty person, the door would be wide open for the practice of fraud. Let us Sup pos- that an employer discovered two years after the commission of the offence that an employee had stolen £10 or £15 from him. If he wished to reduce his assessable income in order to lower it in the graduated scale, what is to prevent his saying to the unfortunate chap, “ I have you now. I can send you to gaol. Como with me to the Commissioner and admit that you have taken £100, £150, or more, and I shall let you go “ ? Many employers would take that stand. There is no morality in business.
– There is.
– There is not. No one knows that better than the honorable member. The result would be to encourage criminality. The clause is pregnant with the possibility of very grave danger, not only to the individual, but also to the department. The Treasurer has never been keen to give legislative effect to the opinions of the State?. I urge him to drop the clause, and thus improve the measure by the removal of many dangers which are not visualized.
.- I do not quite agree with the explanation of the Treasurer (Mr. Casey) in regard to defalcation, and his suggestion that an employer would be relieved of tax if his employee failed to account for money received by him. My impression is that the receipt of the money by the employee would, for the purposes of taxation, biregarded as receipt by the employer, and that the employer would bc liable to pay income tax on it. The more important point, however, was th at raised by the Leader of the Opposition (Mr. Curtin), namely, whether it is right that this set-off against losses by theft, &c, should be enjoyed only by people engaged in business. I do not think that the limitation is right or logical. When a taxpayer suffers loss by theft he does not during the year of the assessment enjoy the benefit of the money so lost, and therefore, he should not be taxed on it. A bookmaker, for instance, handles large sums of money and, on a Saturday night, often has to take this money to his home. If, as sometimes happens, he is robbed, perhaps of hundreds of pounds, he should be allowed to make a deduction in respect of that loss, even though the money was not taken by an employee. In the same way, business people sometimes have to keep considerable sums of money in safes, and a safe may be broken open, and the money stolen. In that case, also, the loss should he an allowable deduction.
– I support the proposal of the “honorable member for Perth (Mr. Nairn). The Treasurer (Mr. Casey) said that if an agent did not hand over rent to his principal, it would not be included in his assessment, and therefore he would not be taxed on it. I do not believe that the Treasurer desired to mislead honorable members, but the fact is that an agent, in those circumstances, would be regarded as an employee of the taxpayer, and, in the eyes of the law, the taxpayer would be deemed to have received the income when it was received by his servant, and therefore was assessable. In my opinion, the suggestion of the Leader of the Opposition (Mr. Curtin) is worthy of consideration. There arc cases in which owners of property have gone overseas, and left the collection of rent, and the management of their estate, in the hands of agents who may make out false income tax returns on behalf of their principals. However, I do not desire the clause to be lost altogether, and if the suggested amendment cannot be accepted, I am prepared to accept the clause as it stands.
– I desire to correct the statement I made just now in regard to the assessability of money collected by an agent for a taxpayer. I understand that a case dealing with this subject has been remitted to the High Court, and far be it from me to say in advance whether such income is assessable or whether it is not.
Question - That the amendment be agreed to - put. The committee divided. (The Chairman - Mr. Prowse.)
Majority . . . . 6
Question so resolved in the affirmative-
Amendment agreed to.
Clause, as amended, agreed to.
Clauses 72 and 73 agreed to.
.- This clause extends the provision which grants a deduction to members of Parliament in respect of their election expenses, so as to include also the expenses of retiring members of Parliament who unsuccessfully seek re-election. I submit that we might very well extend the provision still further, so as to include the expenses of all persons nominated for election to Parliament. As the clause now stands, the deduction is allowed only in the case of successful candidates, or of such unsuccessful candidates as are retiring members of Parliament. A cynic might remark that the provision is drawn in this form because the Government rightly anticipates that a large number of retiring members will be defeated at the next election, and that the alteration will be of benefit to many of those who enthusiastically support the Government at present. I put it to the committee that expenses incurred by a candidate for election, regardless of whether he be elected or not, are expenses which he incurs in the performance of what may be regarded as the highest obligation of citizenship. He offers himself to the people for service in an Australian parliament, and whatever fate he may suffer at the ballot, the expenses he incurs should be an allowable deduction from his income. It is not probable that a large number of persons will nominate for election merely to take advantage of this provision, because the Electoral Act will still contain that section which requires the candidate to deposit £25, which will be forfeited if he polls less thaw the stipulated percentage of votes. The clause gives an advantage to a person elected to Parliament who was previously not in Parliament, and also an advantage to a candidate who has been a member of Parliament, but who has been defeated. Thus, there is a distinction between an ordinary taxpayer, not a member of Parliament, but who is elected to Parliament, who is permitted to deduct election expenses from his assessable income, a member of Parliament who is not re-elected, but who can also deduct his expenses from his assessable income, and the other party, a candidate who is probably trying out his possibilities as a public man for the first or second time, and including one who is systematically defeated, who is not permitted to deduct his election expenses from his assessable income. I again point out the anomalous consequence of this clause which appears to be in keeping with the anomalous incidence of many clauses of the bill. The honorable member for Wakefield . (Mr. Hawker) chided me with being opposed to exemptions. Iam for good reasons. I regard every exemption which is not capable of general application, as objectionable. If the Government proceeds to grant exemptions in respect of this, that or the other clause, my purpose is to make those exemptions as wide as possible, so that every taxpayer can obtain the benefit of them. Here again, I plead for my less fortunate brethren who stand for Parliament, but cannot get elected.
.- Under the Electoral Act, provision is made for the limitation of expenses in connexion with an election campaign to, I think, £100. Is it the intention that clause 74 shall also limit the exemption to £100? As the sizes of the various electorates throughout the Commonwealth are so varied, it will be seen that what might be regarded a reasonable deduction in respect of one electorate may not apply to another. Take, for instance, the electorates of Kalgoorlie and Kennedy. In the latter, there are no railways and a good deal of travelling has to be done by motor car. The same conditions apply to other electorates throughout the Commonwealth. I think, in these circumstances, that the whole question of exemption in respect of electoral expenses should be reviewed and put on a fair basis.
– The Leader of the Opposition (Mr. Curtin) is nothing if not logical, and in the proposal which he has made, which may or may not materialize into an amendment, he has attempted to extend this exemption to everybody who has a “ shot at Parliament “. In many cases, the efforts of some individuals amount to little more than that.
In reply to the honorable member for Riverina (Mr. Nock), the clause does limit the deduction to the amount of £100 allowed under the Electoral Act. If it provided otherwise, it would be countenancing an infringement of that act.
– There are other types of expenses, such as those incurred while travelling, which are not included in the Electoral Act.
– The exemption is definitely limited to an amount of £300 as provided under the Electoral Act. The exemption has, in the past, served a useful purpose, and, as it now stands, is fair and reasonable. As I have said before, it is always possible to extend any exemption to any length desired, but it is not always wise to do so. The extension of the exemption to those who nominate for election to Parliament would result in a large number of persons nominating for election to the seven parliaments of Australia being brought under the provision. Such an extension is not called for. The persons particularly concerned in this are those who have had a seat in Parliament, but who have been defeated at an election. I suggest that the clause, as it stands, is reasonable, self-contained, and fair, and that the intention of the Leader of the Opposition is merely to attempt to extend the exemption purely for the purpose of extending it.
.– 1 have listened carefully to the rejoinder of the Treasurer (Mr. Casey) to my comments. The reason why I did not move-, an amendment when I first rose to speak was because I believed that the fairness and common sense of my remarks would appeal to the Treasurer, and that he would accept my proposal. But, apparently, he is not prepared to do so.
It is not equitable that deductions from assessable income in respect of expenses incurred at elections should be confined only to those taxpayers who are members of Parliament, or who will be elected to Parliament. There are persons other than members of Parliament, or persons who will be elected at the next Commonwealth or State elections who have rights in this matter, and they- are taxpayers who will nominate at the next elections, and will not be successful. I would regard it as definitely unfair if, at the next election for Fremantle, I should be opposed unsuccessfully by a candidate who would not be permitted to claim an exemption in respect of election expense.-, while I could spend £100 allowed under the Electoral Act, and deduct that expenditure from my assessable income. I feel that I would be hard put to it to answer in my electorate the contention that, as a member of Parliament, I had been more generous to myself than to those who opposed me at the election. 1 therefore move -
That the word “ elected “, sub-clause 1, be omitted with a view to insert in lieu thereof the word “ nominated “.
.- 1 fail to see where, in this clause, the exemption is limited to expenditure on halls, postage, and the like referred to in the Electoral Act. Other expenses such as those incurred for travelling have to be met by every candidate. If there is no specific provision to limit the deduction to expenses incurred on halls, postage, and those other items covered by the Electoral Act, would the amendment proposed by the Leader of the Opposition (Mr. Curtin) apply also to expenses incurred in a pre-selection campaign? I take it they might well be included in the expense of being nominated in some eases. I suggest to the Leader of the Opposition that he should reconsider the wording of his amendment.
.- I find it difficult to understand how the Treasurer (Mr. Casey) can, on any just principle, oppose the amendment moved by the Leader of the Opposition (Mr. Curtin). It is very frequently said of members of Parliament, and sometimes unjustly, that they enjoy a great many undeserved privileges. As a matter of fact, there is quite a good deal of misconception upon that point. Ac least I ho po it will be recognized as a principle that all citizens qualified to become candidates for Parliament should be on an equal footing.
– Would the honorable member like them all to nominate?
– That airy persiflage does not impress the committee at all in regard to this important question. The qualifications of a person who submits himself as a candidate for election to Parliament are set out in the Constitution and in the Electoral Act. Subject to those limitations, every citizen is invited to present himself for election, and I point out that while an election is in progress - and sometimes a misconception also arises out of this fact - there are no members of Parliament; Parliament has been dissolved. All the candidates are merely citizens competing for the suffrage of the electors substantial v on equal terms. The Treasurer says thu. some people have a “ shot at Parliament”, without the slightest possibility of being elected.
– I was not being personal.
– I, too, would not like to be personal; I would not like to suggest that the honorable gentleman accounts himself one of the fortunate few whose performances are such as to be likely to secure him immunity from successful attack in the future. Profiting by that experience which’ comes to those who have lived a full political life, I certainly do not account myself as one. You, Mr. Chairman, in your long experience of political institutions, may have observed that some of those persons who have been called upon under the Electoral Act to contribute £25 to Consolidated Revenue, or in other words to forfeit their deposits, have afterwards been returned to Parliament, and have enjoyed distinguished political careers in the service of the nation. The electors are privileged to change their minds if they wish to do so, and often a change of mind by the electorate has been fully justified. I should not have to search far in this Parliament to name an honorable member who on one occasion lost his deposit, and was afterwards returned to Parliament. It was, of course, no reflection upon that gentleman that he had the bitter experience of losing his deposit; on the contrary, it was to his credit that, in spite of such an adversity, he won public confidence, and was able to give meritorious service to the community in the legislature. I can see no justification for allowing an exemption to a person who is a member of Parliament when he nominates and denying it to another individual who is not a member when he nominates. The electoral authorities are not slow in collecting the deposits of candidates who fail to secure a sufficient number of votes. Citizens should be permitted to seek the suffrages of the electors on equal terms. As far as possible, absolute equality of conditions should apply to any deductions in respect to the legitimate expenses of candidates for Parliament. Members of Parliament, at any rate, should not seek to hamper those who are not members but seek election. The clause now under consideration challenges, in a measure, the corporate honour of Parliament, for it seeks to give an unprecedented privilege to persons who are in Parliament. Hitherto, it has been the proud boast of Australians that our Constitution and electoral law alike leave it open for any citizen to submit his name to his fellows for election to Parliament. It may be true, as some contend, that the party system has limited the choice of the electors; but it is somewhat flattering to the Labour party, which has organized itself on certain important basic political principles, that other individuals in the community, with other political views, have also formed themselves into political parties.
I understand from what my leader has just told me that the Treasurer has been impressed with the arguments submitted’ in support of the amendment, and I therefore have no more to say.
– I ask leave to withdraw my amendment.
Amendment - by leave - withdrawn.
– I appreciate the courtesy of the Leader of the Opposition (Mr. Curtin). The Government is willing to introduce an. amendment substantially the same as that moved by the Leader of the Opposition. I therefore move -
That, after the word “ member “, subclause (1), first occurring, the following words be inserted: - “or in contesting an election for membership “.
If this amendment is carried it will also be necessary to eliminate certain other words.
. - I am opposed to the amendment. Exemptions of this nature should not be permitted. I have never been able to understand why the existing provision should have been made. Still less do I appreciate the motive of the Leader of the Opposition (Mr. Curtin) in seeking an extension of the privilege. Only recently the honorable gentleman delighted his followers in every part of the Commonwealth, and also a large number of citizens who do not ally themselves with one party or another, by declaring that he was definitely opposed to any reduction of taxation. Why, then, should the honorable gentleman try now to deprive the Government of certain revenue which hitherto it has received? The logicalcourse for us to follow is to disallow any deduction in respect of expenses incurred in seeking election to Parliament. I was surprised to hear the honorable member for Batman (Mr. Brennan) speak as he did.
– I have been in and out.
– The honorable gentleman seems to be in a whirlwind. He is going round and round, and no one - not even himself - knows where he is going. It seems to me that the existing provision of the law is based on the principle dear to the heart of lawyers - that the loser pays. While it is desirable that all candidates should be placed on a basis of equality as far as possible, the basis should be different from that now proposed. A good deal of criticism is heard outside of Parliament Houseunfortunately, a lot of it is justified - about the privileges which honorable members take unto themselves. In these circumstances, it would be better for us to disallow this privilege to all candidates.
Amendment agreed to.
Further amendment (by Mr. Casey) agreed to -
That the following words be omitted: - “ or if the taxpayer was a retiring member at the time of the election the expenditure incurred in the year of income by him in seeking to be re-elected”.
Clause, as amended, agreed to.
Clause 75 (Expenses of eradication of pests, &c.).
.- I wish to know whether this clause would permit the deduction of costs incurred by orchardists in their endeavours to control and exterminate orchard pests. No mention is made in the clause of the destruction of pests in orchards and vineyards, but orchardists are put to heavy expense in controlling various pests. An overhead spraying plant may cost as much as £1,000. I understand that only the cost of the ingredients used in spraying mixtures is an allowable deduction. If farmers are permitted deductions for expenditure on wire, wire netting and piping, the orchardist should be similarly treated in regard to the cost of his spraying plant and other appliances used in eradicating pests.
– Such of the provisions of this clause as apply to taxpayers engaged in primary production apply equally to orchardists. A spraying plant would he part of an orchardist’s capital expenditure, but the cost of the spraying material used by him would be an allowable deduction. Of course, he would also have the benefit of the usual allowance for the depreciation of his plant.
.- I agree with the honorable member for Franklin (Mr. Frost) that the spraying plant of an orchardist falls within the same category as wire netting used in dealing with pests on pastoral lands. Ever since I have been a member of this chamber, I have noticed that almost every bill brought down is so framed as to give a concession to the primary producer. This measure is designed merely to grant primary producers exemption from income tax.
– They need it.
– The honorable member and his party seem to have sufficient influence to be able to force the Government to give them all the advantages they want for the man on the land. Most of the operations mentioned in the clause increase the value of farming land, and I fail to see why the cost of wire netting used by primary producers should be an allowable deduction when no similar advantage is enjoyed by city business men.
.- I have often heard members of the Country party say that the farmers pay very little by way of income tax, and figures in support of that statement are frequently presented. On reading this bill, I find that the men on the land are almost completely exempt from income tax. It seems that the small amount of tax paid by them scarcely warrants the cost of collecting it. This clause will not benefit the small farmer so much as it will the man with a large holding. The latter will have an excellent opportunity to evade the payment of income tax. A large grazier could say that he had expended £500 in the eradication of pests on his property, and the department would have difficulty in disputing his statement. In the case of the small man, an evasion of tax could be more easily detected. This is a graziers’ bill, resulting from the influence which the graziers have over the Government. It is evidently intended to give them every opportunity to evade the payment of their just dues.
– The honorable member is digressing from the clause under consideration.
– It is not surprising that the honorable member for Swan (Mr. Gregory) and the honorable member for Riverina (Mr. Nock) quote figures regarding the small amount of income tax paid by farmers, seeing that this class is practically exempt from all income tax. The large farmers and graziers, particularly, are evading it. The farmers’ representatives in this chamber sit back with a smile of satisfaction, realizing that they are in a most favorable ‘ position. I am opposed to this. If primary producers are to get concessions, similar concessions should also be granted to the manufacturers. Although I am not making any special plea for the manufacturers, they can make the same plea of poverty as is advanced by the farmers. It seems, however, that their influence with the Government party is not so great now as it used to be, with the result that their voice is not heard. Their claims are voted out in this chamber, and also in another place, while the farmer gets everything.
– The farmers can ride about in their expensive motor cars.
– Yes. They can go to Sydney in luxurious limousines to make a compact with the Government on wire netting, and charge the trip to the expenses of running their business, and so get free petrol. I am sure that the Commissioner of Taxation, when he makes a reckoning, -will say : “ Leave the primary producers alone. There is a loophole for them everywhere, and it would be a waste of time and money to go after them, because it would cost more to get money from them than could be got from them.” This bill is a graziers’ bill. The graziers have all the influence with the Government at the present time. As a matter of fact, they dominate the Government to such an extent that it gives them everything they want.
.- I hope that the people will have these facts put before them. It is only once or twice in the life of a Parliament that we get the facts concerning exemptions from taxation granted to primary producers.
– This is not new.
– That is all the more reason why it should cease now.
– The facts are obtainable any day of the week.
– When we were discussing the wheat bounty we were brought the income tax statistics and shown how the farmer pays no income tax. That was the reason why payment of the bounty was agreed to. Some of us poor simple fellows believed it, although we were aware that a large majority of the wealthy farmers of this country could meet ail the taxes, which are at present borne by those engaged in secondary industries and in other avocations of life. We recently had placed before us a proposal for payment of a subsidy on fertilizers, as the farmers want the Government to provide large sums of money to enable them to make their pastures rich in production. Now, they are to be exempted from taxation on money spent in clearing the land and improving its value. Some time ago, the honorable member for Wakefield (Mr. Hawker) asked us to have a re: petrol, so that the farmers might use it, and be exempted from tax on the petrol they use. Awards covering rural pursuits have been suspended in New South Wales, and the farmers are reaping that benefit. Surely the country will stand this kind of thing no longer. We have exempted many of the farmers from the payment of land tax.
– When was that done?
– Farmers are exempt if they own property of a value less than £5,000. Here is a section of the community exacting a toll from the revenues of this country in every conceivable direction.
– To develop the country.
– If some of the farmers got off the land and left it in the hands of others, we should not hear so much crying about the position of those engaged in primary production. I have heard honorable members tell us that the country would “go to the dogs” if the farmers went off. the land. If threefourths of the farmers went off the land, they would soon be replaced. The trouble is that they never do go off it, because this Commonwealth has had a succession of munificent Treasurers, who have led the Parliament into the granting of bounties, and into feeding the farmers from the general revenues of the country. This * is a travesty on ordinary common justice. Some honorable members will consider that I am not stating the case fairly, but, first of all, there . is the ease of a man who, with a large estate, wants to drain it in order to make it good pasture land, or fiats for lucerne. Money spent in’ that direction is to be exempt from taxation. The cost of ploughing or grassing of land for grazing purposes is also to be exempt. On the one hand if a man in Sydney erects a building on a block of land, not only has he to pay for the improvements, but they are also added to the cost of the property and taxed. On the other hand, if a farmer improves the quality of land, he is not only recouped for his outlay by increased production, but is also able to claim exemption from income tax on th expenditure involved. In fact a farmer is exempted from taxation on all sorts of expenditure connected with farming. If it is right to do that for the farmer, it should be just as right to do it for all other sections of the community. If it be genuine expenditure on the development of land, it should be deducted from income, but why put it here in this form in which no charges can be made for any improvements made? I admit that small men engaged in the regeneration of the soil have some claim on this account, but it is the big man who has these swamps on his property still awaiting improvement, and who, after affecting these improvements, instead of selling his land for about £1 an acre, will probably get £4 or £5 an acre for it. Yet he is to be exempted from taxation on the cost of the improvements. I am prepared to support any amendment that may be moved to delete this provision.
.- The farmers are to be exempted from taxation on the cost of improvements to their land, but if this principle is to be established, it should have general application. The farmers should not be singled out for special treatment, especially when the man who is clearing his land is able to sell the timber on it at a profit, and at the same time obtain exemption from income tax on the cost of the clearing operations.
– The farmer usually has to pay to get the timber burnt.
– After clearing the land the farmer grows stock, and he adds to the selling price of that stock, the cost of his clearing that has already been exempted from tax. The man in the city should be granted a similar concession. Instead, if he effects improvements for his tenants he is taxed to the utmost on them. The men in the city are the greatest taxpayers of this Commonwealth, and I fail to see why we are pandering to one section of the community while the majority, the taxpayers of the city, who made representations for general tax relief to the Treasurer in Melbourne the other day, are ignored. This bill represents preferential treatment to a section of the population for the specific purposes of a section in this House, which is able to dominate this Government. There is a motive behind this provision, and although I am not against putting the struggler on the land on a basis on which he can survive, I am against the exemption of wealthy squatters who are in a better position to pay the tax than are the men. in the city areas who have received no rent from tenants because the tenants, through unemployment, have not been able to pay rent. The Government has done nothing for that section of the community. I am confident that the majority of the people will show their disgust at legislation of this kind when the time comes for them to vote at the next general election. I know that the people are going to dump out of office this Government because the less favoured sections who are asking for relief, even in respect of the payment of municipal rates, have made their appeals in vain.
The extent to which the Country party dominates this Government is shown in the provision under which a man who takes up an area of land on which there is good timber and dears it at a profit by selling it for firewood at high prices in the city will not be called upon to pay tax on the money spent in the clearing operations and the consequent acquisition of profit. It will be realized that the growing of the timber has cost him nothing, for nature has seen to that. It is not a correct attitude for the Government to adopt. If we are to be consistent, we should exempt city people who are taxed on everything they use. At present they are on the starvation level. Every business expansion which would increase the volume of employment is discouraged by restrictive legislation. We must be consistent by making exemptions from taxation general in their application. If it is right for one section of the community to be given an exemption, it is right for another to receive it. Rents are taken into account in the determination of the basic wage. The owners of houses arc entitled to the same protection as that which is enjoyed by the primary producer.
.- These exemptions have been incorporated in the taxation laws of Australia for quite a lengthy period. The honorable member for Denison (Mr. Mahoney) has spoken of the exemptions granted to the lessees of large pastoral holdings. I point out to him that the area of Tasmania is only about one-tenth of the area of my electorate. The whole of that State is not equal in size to one large pastoral holding. The big pastoral lessees having shifted to North Australia or the Northern Territory, this taxation deals not with them but with the farming community, such as is to be found on the Atherton Tableland and in parts of Tasmania that I have visited. It may interest honorable members to learn that in Queensland the selector of a block of land is not entitled to the timber on it; that remains the property of the Crown, and is marketed by the Forestry Department. The cost of clearing ranges up to as high as £20 an acre. After scrub land has been cleared in a district like the Atherton Tableland, the selector has to grass it to make it capable of raising stock, and providing food for the wealthy masses in the cities who enjoy the benefits of the cinema, the trams, and other social amenities. I invite those honorable members who have spoken of farmers riding about in motor cars, to make themselves acquainted with their conditions. It surprises me greatly to find politicians struggling along on the pittance which they receive when they could participate in the enormous rake-offs which some believe are associated with the tilling of the soil. Does not the man who ringbarks his country, and improves its carrying capacity from eight to sixteen head of bullocks to the square mile, add to the wealth of the nation, and provide additional employment? The more he makes, the more the State or the Commonwealth can collect from him by way of income tax.
– If he can be caught.
– I have never known of a. State Taxation Department permitting these people to escape, from the cradle to the grave. The Taxation Commissioner in Queensland misses none. Take the case of a man with a family who wins a ballot for a block of land. He has three or four boys for whom no employment isoffering, and decides to invest his life’s savings, and perhaps the pro ceeds of an insurance policy, in placing them in a permanent occupation. The clearing of the land costs him more than £1,000. He borrows another £1,000 to grass, fence, and otherwise improve it. Surely he is entitled to deduct that expenditure ?
– Having no taxable income, he would get no exemption.
– Under this measure, he is allowed to deduct expenditure which is incurred in the clearing of the land, whether he has a taxable income or not. He can obtain a taxable income only by improving the land. If any deduction is justified, it is on account of expenditure which is incurred in the improvement of the assets of this country. In Queensland there is practically no freehold, but a lease system, under which a man may occupy the land for only 30 years. In addition, there are certain resumption rights. Grazing farm selections have a tenure of 28 years, with certain priority rights. Then there is the agricultural farm system, under which there are also resumption rights. Under all three classes of tenure, the land is liable to be resumed at the termination of the lease. In the case of a pastoral lease, certain resumptions may be made after the expiry of the first ten years. A property of 100,000 acres may be subdivided into five blocks, each of 20,000 acres. The original lesssee has priority over only one of those blocks, and should be entitled to an exemption on account of the improvements he has effected. The honorable member for Barton (Mr. Lane) has put the case of the city landlord. I ask him: What has been responsible for the increase of the value of land in and around the cities?
– The activities of the cities increase the value of country lands and those of the country increase the value of city lands.
Mr.RIORD AN. - The development of primary industries is responsible right up to the stage at which manufacturing operations can be carried on. Income tax is the fairest method of taxation. A man who improves the assets of this country by the sinking of bores, the fencing, clearing and grassing of the land, and the extermination of pests, is certainly entitled to some exemption. The farmer has not the protection which is given by way of the tariff to the manufacturer. In the last analysis, the primary producer and the consuming public pay the taxation which is levied. It is unfortunately a fact that during the last five or six years a very small percentage of the sugar farmers, dairy farmers, and wheat farmers have paid income tax. One of the principal factors retarding the progress of this country is the lack of development due to the small percentage of the total population which is. engaged in farming operations. A Labour Government in Queensland has placed on the statute-book of that State the best farming legislation in the world. Primary producers in that State are subject to the operation of rural awards. By means of closer settlement, Queensland has increased its population at a more rapid rate than any other State. There is proportionally a bigger rural population in Queensland than in any other State, and that is because we have given proper protection to the farming community. It is to be regretted that there should be a clash of interests between the workers in the rural areas and those in the overcrowded industrial areas of the cities.
– We are decrying, not the rural workers, but the exploiters.
– If there is any one who works harder than the small dairyfarmer I should like to know who he is.
– We are referring to those farmers who make a taxable income.
– Surely the honorable member would allow as a deduction expenses incurred in the preparation of land for agricultural purposes. This hill is designed to achieve’ uniformity in taxing legislation as between the ‘Commonwealth and the States, and in Queensland exemptions are allowed to the poorer farmers who have no taxable income.
– The honorable member’s time has expired.
.- I sincerely hope that there will be no clash of opinions or interests between the workers in the cities and those in the country, and I fail to see how those who object to proposals for exempting from taxation wealthy persons on the land can be regarded as opposing the interests of rural workers. There may be a rural award in operation in Queensland, but there is none in New South Wales. In that State, the rural awards have been suspended by the action of the combined United Australia party and Country party. What some honorable members seem to overlook is that, if a farmer is not obtaining a taxable income, he cannot be taxed upon it. I know of one instance in which a wealthy squatter, who already had more land than he was entitled to, took advantage of the poverty of another landholder to buy his weed-infested land at one-tenth of its value. He spent a few thousands of pounds clearing the weed, and turning the land into good grazing country, but he was allowed exemption on the money which he thus used to create a capital asset. The Treasurer (Mr. Casey) told the honorable member for Franklin (Mr. Frost) that he could not, in any circumstances, agree that the cost of plant used for spraying fruit trees should he allowed as a deduction, and no doubt he was moved to take that view by the fact that most of the fruitgrowers are in a small way. He said that money spent for that purpose would be capital expenditure; yet he maintains that, when the squatter puts a fence around his land, he. is not engaging in capital expenditure, and should be granted an exemption in respect of the money spent for this purpose. What sort of reasoning is that? If that is typical of the intelligence that has gone to the framing of our taxation legislation, it is no wonder that the act is full of anomalies, and that it has to be amended every year. Some honorable members spoke about farmers having to spend £20 an acre to clear land of big trees. I remind them that, because the big trees were on the land, the farmers were, in the first place, able to obtain it for a nominal sum, and, in any case, they knew that the land would be of no use until the timber was cleared. Such men should be treated no differently from men who invest their capital in a business. All these concessions are really being made for the benefit of the wealthy land owners who, as we know, contribute liberally to the ministerial party funds. We have been told that concessions of this kind are necessary to encourage people to go out and open up the land, but the fact is that those who will benefit from the concession are the men whose fortunes were made under the rotten slavery conditions of last century, such conditions as prevailed during the shearers’ strike of the ‘nineties, when the squatters hunted the workers over the countryside with bloodhounds. I do not object to this Parliament giving assistance to those in need of it, whether they be on the land or in the city, but I sh::ll always oppose the granting of special concessions to those who arc already well off. As a citizen, the farmer is entitled to all expenses legitimately incurred in the production of his income, such as those involved in shearing, fertilizing, ploughing, &c, and there is no occasion for granting him any further concessions. If, in one State, specially favorable conditions are enjoyed by farmers, so much the better for them, but they are not entitled on that account to obtain still further concessions from this Parliament. No honorable member on this side of the House has ever raised any objection to proposals for using the resources of the country to assist people in distress, whether such people are engaged in primary or secondary industries, but I protest against the granting of special concessions in order to placate a small coterie of members of this Parliament who, for the time being, are in the position of the tail that is able to wag the dog.
.- The principal argument of the honorable member for Kennedy (Mr. Riordan) was that the exemptions which it is proposed to grant in this clause have long been in force. That may be so, but they arenot necessarily right because they are old. From time to time we change our opinions on the subject of taxation, and we are as much entitled to change them in respect of this exemption as of anything else. For the last four years we have listened to harrowing .tales in this Parliament of the destitution among primary producers, but I draw attention to the fact -that no representative of the Country party has spoken in favour of the granting of these special income tax exemptions to the farmers, or drawn attention to this aspect of primary production. In the past, we have been told that the vast majority of farmers do not earn £1 a week for themselves, let alone a taxable income, and, moved by those stories, Parliament has agreed to grant millions of pounds to assist the farmers. Now we are considering proposals for exemptions that benefit not all primary producers, but only the wealthy section of them. If the story which we have continually heard from members of the Country partyregarding the extent of the destitution that exists among the primary producers of this country is true, then only a very small section of the primary producers, the wealthy section, will derive any benefit from this proposed exemption. This is sectional legislation because it grants a special exemption to persons engaged in a special industry, and denies it topeople who have invested their money in. other industries for the purpose of providing a livelihood, not only for themselves, but also for others. It is classlegislation because, as I have already indicated, only one class among that section which it purports to benefit will gain by it.
The honorable member for Kennedy told a very heart-rending story of the poverty that exists among the poor farmers in his electorate. He made- out quite a good ease for the poor farmers, but the real fact of the matter is that these people will gain no benefit from the exemption provided in this clause, because it applies only to those who have a taxable income.’ If a struggling farmer out of his modest income encloses his land with wire netting, clears it, and drains it, and his income subsequently falls below the taxable level, he gains no benefit from the proposed exemption. The exemption will be enjoyed only by those farmers who improve their holdings by fencing, clearing and draining the land, who are fortunate enough to have a taxable income. Unquestionably, a farmer who so improves his holding increases the value of his assets, whether he makes a taxable income or not.
– And benefits Australia in so doing.
– The primary producers do not comprise the only section of the community which has invested money in undertakings, to the benefit of Australia, thai are not paying, but the wealthy farmers are given advantages not extended to other sections of the community. If a man in the city who owns a factory extends it, and thus creates more employment for others, he is not extended the exemption conferred upon the farmer who does precisely the same thing with his holding. An interesting point lias been made by the honorable member for Franklin (Mr. Frost), which again shows that sectional interests will benefit under this legislation. The honor able member referred to the question of the exemption of expenditure by orchardists on spray pumps and other equipment necessary for combating the ravages of pests in their orchards. The Treasurer (Mr. Casey) said that expenditure of that nature is regarded as capital expenditure, and could not b6 exempted. It is difficult to understand why discrimination of this sort is exercised. On the one hand, an orchardist is not permitted to claim exemption in respect of expenditure on spray pumps necessary to protect his asset from the ravages of insect pests while, on the other hand, a squatter who surrounds his holding with a wire fence for the purpose of keeping out pests, is entitled to it. If expenditure incurred in an attempt to combat the ravages of insect pests in an orchard is regarded as capital expenditure, surely that incurred by a squatter in fencing his land to keep it free from pests should also be considered as capital expenditure. In both instances that expenditure is for a similar purpose end enhances the value of the holding. My chief objection to this clause is that it sorts out a particular section of the community, and confers upon it a benefit denied to other sections . of the community with equally just claims for consideration.
It has been said by the honorable member for Kennedy, that a farmer increases the value of his holding by fencing and draining “the ‘ land. That is true, and it is also true that a man who- spends his money in extending a city factory, thus creating additional employment, increases the value of his property; but while the farmer, if he has a taxable income, is granted an exemption in respect to his expenditure, the owner of the factory is denied it. We have been told repeatedly that the great majority of the farmers are in a bad way, and have been able to make ends meet only by the provision of bounties and other aids to production. Those farmers will derive no benefit from this exemption, because they are not in receipt of a taxable income.
– If a man is not in receipt of a taxable income, he pays no tax at all. It is impossible to confer a greater benefit than that.
– I agree that such a man, whether he is a farmer or not, is exempt from the . payment of tax. However, it has been claimed that this clause will confer a great benefit on all primary producers. How can that be so when for years past we have been told that the vast majority of the primary producers receive no income at all, and that most of them are living from hand to mouth?
– That may have been the case during periods of bad prices, but it is not usually so.
– Bad conditionsstill apply. If there is any truth in the story which we hear continually from Country party members, that the vast majority of the farmers do not make a taxable income, then the greater proportion of the farmers will derive no benefit from the proposed exemption. It is purely a rich man’s exemption.
– The honorable member’s argument is a little difficult to follow, inasmuch as it is impossible to confer a greater benefit on people than by not taxing them at all.
– But that has general application, inasmuch as every taxpayer in receipt of an income below a specified amount is not liable for the payment of income tax. My point is that we have been told, and the Government, apparently, believes that. 90 per cent., or, at any rate, a large proportion of the farmers are not in receipt of taxable incomes. Thus a large number of farmers will not benefit from this exemption. This provision will assist, not the needy primary producers, but the large landholders with a taxable income - the greedy farmers. It is for that reason that the members of the Country party, the so-called champions of the country people in this House, have not ventured to participate in this discussion. They know very well that if they advocated this provision, as a real benefit to needy farmers, it would be tantamount to a denial of everything they have said during the last four or five years to the effect that the majority of the farmers have had no taxable income.
.- A good deal of misunderstanding exists in regard to these exemptions. It must be remembered that before farmers can grow wheat, they have to clear their land and bring it into production. Then the battle against the pests begins. The honorable member for Barton (Mr. Lane) is always against the farmers-
– Only the greedy farmers.
– The honorable gentleman consistently advocates the cause of the city dwellers. I remind him that a good deal of the fencing costs incurred by farmers to keep certain animals off “their land is necessary because the animals are protected in order that sport may ho available to city dwellers in the hunting of them. I refer particularly to kang:1. roos. It is unfair that orchardists should be denied an exemption for expenses incurred in combatting orchard pests. Nowadays, orchardists are obliged to spray thirteen or fourteen times a year. In fact, they are almost continually spraying to combat one pest or another. These unfortunate people have, in many instances, incurred heavy expenditure in clearing forest land. Some orchardists who, four or five years ago, were worth £20,000 or £30,000, and were taxed on that scale, could not, to-day, write their name to a cheque for £1,000. It is, therefore, not too much to ask that Parliament should give these people every possible consideration. Since the value of our wool, wheat, butter, and other commodities has increased somewhat, city people have been able to spend huge sums of money in building flats at Manly and other places; but it is actually the country people who pay all the time. The only real wealth is in the country.
I make an appeal to the Treasurer (Mr. Casey) to give consideration to the orchardists, not only in my own electorate, but throughout the Commonwealth. It is true that fruit is at present bringing a fair price in the market, but that is no compensation to orchardists who have very little fruit to sell. New pests seem to require attention every year. Some orchardists who had from 8,000 to 10,000 bushels of fruit on their trees this year, will be able to market only 3,000 or 4,000 bushels in consequence of the ravages of pests. A certain grub has infected orchards in Tasmania recently with the result that nearly 1,000,000 bushels of fruit have had to be destroyed this year. I therefore earnestly appeal to the Government to make provision for an exemption in respect’ of expenditure incurred in eradicating orchard pests.
– Since replying to the previous remarks of the honorable member for Franklin (Mr. Frost), I have been informed that in -some orchards in Tasmania it has been necessary to construct permanent metal channels for overhead spraying. These are subject to rapid corrosion. If representations are made to the Commissioner for consideration in consequence of the heavy depreciation on plant of this kind, I have no doubt that favorable consideration will be given them.
Clause agreed to.
Where any taxpayer proves to the satisfaction of the Commissioner that -
.- I move-
That after the word “ income “, paragraph (c), the following words be inserted: - “and in so placing the wire or wire netting in position “.
This amendment is necessary to rectify a slight drafting error in the original bill, and to bring the provision into line with the existing practice.
.- At one time the Commonwealth Government made grants to settlers to assist them in erecting wire-netting fences to keep vermin off the property. It is now the responsibility of the State government to supply the wire netting. A man who takes up a dingo-infested holding cannot use wire netting unless he is in a position to incur the expense of constructing the fence to carry it. The State governments make certain concessions to leaseholders in respect of wire netting. The land laws of Queensland are different from those of the other States. Under the leasehold system in my State, a person who is allotted a block is required to reside on it for seven years. Take a holding of 100,000 acres in an area infested by dingoes. The original holding may be cut up into ten selections, and occupied by ten separate families. Assuming the average number of persons in each family to be seven, this means that 70 permanent residents are established on the land and provided with a profitable occupation. Probably the land was originally used for cattle raising, but, on the elimination of the dingo, it is suitable for sheep. By converting this into sheep country its economic value to the State is greatly improved. The settlers, instead of fencing their individual blocks, decide to place a ring fence round the whole area. Why should not deductions be allowed with respect to the cost of the whole of the fencing, in view of the improved value of the land? The rental for cattle-raising country might be 10s. a square mile, but once it is converted to sheep land the rental value increases to 6d. or 9d. an acre. The ten families employed upon it secure a better return from their sheep than would be obtained by the raising of cattle, because their commodity commands a higher price. In addition, they have taxable incomes. We are told that one of the ways in which to eliminate the danger of war is to give security to the people, and we should endeavour to do that by placing people in permanent and useful occupations on theland.
The Treasurer (Mr. Casey) mentioned yesterday that this bill had been before the public for five months. A Royal Commission has investigated the subject of simplifying the taxation laws, but I venture to say that the great majority of the members of this Parliament who engage in mixed farming are unable to prepare their own income tax returns without the assistance of an expert. I urge the Commissioner to allow as a deduction from income the whole of the cost of fencing farming land.
.- In the Lindsay case, which was decided in Western Australia, the appellant had deducted from his return expenditure incurred in vermin-proofing his land, and the department disallowed the deduction. Mr. Lindsay appealed to the court; and the judge held that the expenditure, being necessary to enable the appellant to obtain a taxable income, was deductible. Even if the deduction of the cost of wire netting erected for the purpose of eradicating vermin were not provided for in this clause, I doubt whether the department could refuse to allow such a deduction. Australia is largely dependent upon its export products, 97 per cent, of which are primary products. Take a property that is protected against the rabbit pest by wire fencing, and is used for sheep raising or wheat-growing. If it were not for the invasion of the rabbit the expenditure incurred on fencing would not be necessary, and that land could be used in the production of either wool or wheat, which would be of great advantage to both the man on the land and the country as a whole. If that property had not been wire-netted against rabbits, the owner would have derived no revenue from it, and the taxation department no revenue. As a general proposition the proposed exemption is therefore sound from the national point of view. The honorable member for Werriwa (Mr. Lazzarini), in the discussion on the preceding clause, took exception to the exemption of expenditure incurred in clearing virgin country. He entirely overlooked the fact that although certain land might be worthless in its original state, the cost of clearing it in order to make it productive might amount to as much as £20 an acre. Apparently the honorable member would prefer to see land overrun by dingoes, because he objects to a deduction being made in respect of expenditure which brings virgin land into a state of productivity and enables the owner to obtain a taxable income from it. The exemptions made in this and the preceding clause are thoroughly justified from a national point of view.
– Intentionally or unintentionally the honorable member for Forrest (Mr. Prowse) has misrepresented my views on this subject. These proposed exemptions have to be considered on their merits. If a business man spends £10,000 on the erection of a factory, and during the time of its construction obtains no return from his capital expenditure, he is not expected to contribute to revenue by way of income tax ; but if in the succeeding year he obtains from his venture an income of £2,000 or £3.000 he is expected to pay his share of the income tax. Honorable members of the Country party are forever talking about the wealth that is created by the man on the land, and the amount which he contributes to the national income. I put it to the committee, however, that a man pioneers new country not from patriotic motives, but for thedefinite purpose of making money.
– And if he earnsincome from it he pays the tax.
– Yes. My point is that expenditure incurred in clearingland is in the same category as expenditure incurred by a manufacturer in establishing his business. I object to this attempt to treat expenditure by farmersin clearing or fencing land differently from expenditure incurred by an ordinarybusiness man. I object to the impecunious circumstances of some farmers being used to benefit thousands, if not tens of thousands, of wealthy landowners.
Mi-. Archie Cameron. - Work of the nature indicated creates employment.
– That is true, but if a man is to obtain exemption merely because he gives employment, every employer would be exempt. I am not objecting to benefits being given to those who are deserving of them, but I shall always raise my voice in protest against a system of taxation which makes flesh of one and fish of another. That is what is being done in this clause. Those who will benefit most from the exemption are* the wealthy land-owners who pour money into the Country party’s funds and get a reimbursement from the Treasury through legislation of this kind.
.- The exemption provided in this clause is in a different category altogether from any other exemption. It relates to expenditure over which the land-owner has no control. If flood waters came down suddenly upon a property the owner would be forced to construct banks to protect his holding, and would be entitled to deduct such expenditure when preparing his income-tax returns. Expenditure to check the invasion of the rabbit or dingo was also unexpected when pioneer settlers in Western Australia took up their land. Almost every farmer in Western Australia has been compelled to net his property against rabbits. In many instances the ordinary developmental work had been completed when the rabbits made their appearance, making inevitable heavy expenditure for wire netting. Unfortunately, a wirenetting fence does not last more than fifteen or twenty years. This expenditure is entirely different from any other, and, in the circumstances, there should be no objection to the exemption provided in this clause.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 77 agreed to.
Clause 78 - (1.) The following shall, to an extent in the aggregate not exceeding the amount of income remaining after deducting from the assessable income all other allowable* deductions except the deduction of losses of previous years and of the statutory exemption, be allowable deductions: -
Gifts of the value of one pound and upwards made by the taxpayer in the year of income to any of the following funds, authorities or institutions in Australia: -
.- I move -
That after the word “ authority subparagraph (iv), paragraph (a), sub-clause (I.), the words “or a public institution” be inserted.
The clause as it stands was definitely recommended by the Royal Commission on Taxation, which expressed its views in the following terms in paragraph 619 of its report: -
The Commonwealth act allows as a deduction donations out of assessable income made to a public authority engaged in research into the causes, prevention or cure of disease in human beings, animals or plants.
The commission went on to say that none of the States except Western Australia had such a provision in its taxation legislation, and added -
However, having regard to the social value of such contributions, we recommend that they be allowed as a deduction by all governments.
A public authority is held to be one that is established under some statutory authority, such as the Council for Scientific and Industrial Research, or a semigovernmental authority, and does not include any institution which may be established by means of funds subscribed for research into any of the matters mentioned in the clause. Such institutions are as deserving as a governmental or a semi-governmental institution. As honorable members know, there is a large institution in the United States of America which is investigating the disease of cancer. Similar institutions may be established in Australia, and donations made to them should be allowed as a deduction. The Australian Pastoral Research Trust was formed to inquire into and give relief in cases of diseases in stock, animal plants, and edible plant life, and any diseases harmful to plant life. As the clause stands, such an institution would not be regarded as a public authority, but under my amendment it undoubtedly would. It, and similar institutions, would be of enormous value to the community in regard to investigations into the health of human beings, and diseases in animal and plant life. I urge the Minister to agree to this small but important amendment.
.- This is the first that I have heard of the proposal of the honorable member. Is there any extension of “ public authority “ in the term “ public institution “ ?
– I understand that the term “ public authority “ refers only to a governmental or a semi-governmental institution, and does not embrace a public institution which is engaged in identical pursuits.
– Has the honorable member any particular institution in mind ?
– I have mentioned the Australian Pastoral Research Trust, which proposes to engage in exactly the same class of research work as is mentioned in the paragraph that I desire to amend. Donations to that trust would not be exempt under the law as it stands.
– So that we have to amend the law to provide for that particular institution?
– Oh, no ; to provide for any institution of the kind which may be established.
– Is the establishment of any others in contemplation? It seems to me to be a case of the tail wagging the dog, if the law is to be amended to meet the requirements of one institution. Personally, I believe that we have run riot in regard to exemptions of this type. Persons who must be assured of an exemption before they will contribute towards a worthy object adopt an attitude which cannot be applauded. I am averse to even the present list of exemptions. But they have been in existence for some considerable time. I now recall what has prompted the honorable member to submit this proposal, and I recognize the value of the institution he has in mind, but the Government is reluctant to extend exemptions. I shall look further into the subject.
.- “Will the Treasurer (Mr. Casey) also consider inserting in sub-paragraph 5 of paragraph a of subclause 1 the words “ a public fund for the establishment of a public university.” The existing exemptions cover the universities in every capital city, but if any person wished to provide a fund to establish a university in Canberra that fund would not be covered, because at present there is not a university in Canberra. The national capital should be placed on the same footing as other capital cities.
Motion (by Mr. Casey) proposed -
That the House do now adjourn.
.- I wish to bring under the notice of the Government the misleading information which I have received in answer to questions on notice. This is the second instance within two weeks on which I have had occasion to make a similar complaint. To-day I submitted the following question to the Prime Minister: -
The answers I received were -
The Prime Minister stated definitely that neither the Minister for External Affairs (Senator Pearce) nor the High Commissioner (Mr. Bruce) has stated that sanctions have failed. I direct the attention of honorable members to the fact that the High Commissioner as president of the Council of the League of Nations, speaking at Geneva on the 20th April, said -
Certain economic and financial sanctions have been imposed. Because of the nonuniversality of the League and of the necessity that all action must be unanimous, that pressure has not been sufficiently strong to achieve its objective. It is clear that the whole system we have established for collective security must be re-examined. To allow nations to be lulled into a false security where in fact none exists, and to be led to rely on assistance which will not be forthcoming, is not a contribution but a menace to the peace of the world.
Senator Sir George Pearce, speaking on the subject of sanction on the 24th April, said -
They have not proved sufficiently drastic or rapid enough in their operation to prevent military success on the part of the Italian armies. We are now faced with the position that the machinery set in action by the League to uphold the principle of collective security has, in the present instance, proved insufficient to prevent an aggressor from continuing to pursue his object. A decisive effect cannot be achieved by the imposition of sanctions unless they are universally applied.
Both statements are direct admissions that sanctions against Italy have not achieved their object. “When I ask questions in Parliament I expect to receive reliable answers. Those I have received in connexion with this subject are not only misleading, but also false.
Question resolved in the affirmative.
House adjourned at 11.10 p.m.
The following answers to questions were circulated: -
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
Transport Workers’ Act: Seamen’s Licences: Picking-up Places.
n asked the Minister representing the Acting Attorney-General, upon notice -
– The information desired by the honorable member is being obtained.
y asked the Minister representing the Acting. Attorney-General, upon notice -
Can he say whether regulation 11 a of the Transport Workers (Seamen)Regulations, gazetted on the 22nd April, seeks to over-ride theArbitration Court and the usual customs in regard to regular picking-up places for seamen?
– The answer to the honorable member’s question is as follows : -
No. The object of the regulation is to prevent persons being penalized under section 29 of the Navigation Act 1912-1934 in cases where it was never intended that that section should apply.
n asked the Minister for the Interior, upon notice -
– Inquiries are being made, and the honorable member will be advised as soon as possible.
r asked the Minister for the Interior, upon notice -
For the convenience of Sydney residents who do not own motor cars, and wish to visit Canberra, will he make representations to the New South Wales Railway Department to have a train, on which cheap excursion fares would be available, leave Canberra every Sunday night for Sydney?
– The matter will be taken up with the New South Wales Railways Department.
n asked the Acting Minister for Commerce, upon notice -
– The answers to the honorable member’s questions are as follows : -
y asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
t asked the Minister for Trade and Customs, upon notice -
– The answers, to thi: honorable member’s questions are as follows : -
Conscription in Austria.
r asked the Prime Minister, upon notice -
Has the Government yet made any protest, or does it contemplate making a protest, through the League of Nations Council, against the action of the Austrian Government in breaking treaties by re-arming its people by conscription?
– No protest has been, or will be, made.
Ship Construction in Australia.
y asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Prim-. Minister, upon notice -
Will the Government instruct its delegate to th? International Labour Conference to support the general application of the 40-hour week ?
– At the forthcoming International Labour Conference the. application of the 40-hour week will be discussed in relation to certain specific industries, and the Government delegate has already been authorized to support the adoption of conventions for such, industries provided he rnakes clear the constitutional limitation of the Commonwealth in this matter.
n asked the Prime Minister, upon notice -
Docs the Government propose giving effect to the recent decision of the United Australia party conference in Sydney, that the Government should implement the 1935 convention of the International Labour Conference regarding the 40-hour week?
– The views of the Government are contained in the statement issued by me on Monday, the 27th April, a copy of which has been laid on the table of the Library.
i asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
k asked the Treasurer, upon notice -
Can he explain why the Australian national debt rose by £18,000,000 during 1935?
– The increase in the debt in 1934-35 was due to borrowing to finance the States’ programme of works, States’ deficits, and a small Commonwealth programme mostly consisting of postal works and funds for farmers’ debt adjustment. The increase after allowing for redemptions from sinking- -fund were as follows: -
s asked the Prime Minister, upon notice -
Has the Government considered making funds available so that winter relief, in the form of full-time work, may be given to the unemployed ?
– So far as the general position of employment in Australia is concerned, the present Commonwealth Government has directly provided additional employment through increased expenditure on Commonwealth public works, particularly from revenue. The public works on which the Commonwealth can embark are, however, of a limited nature, as most public works come within the control of State governments. The Commonwealth has accordingly substantially helped the States to provide increased employment, partly by increased grants of money to the States for public works purposes and also by leaving the loan market as far as possible to the States, thus enabling them to undertake additional public works. At the same time, the present Commonwealth Govern-; ment, by maintaining a sound policy of finance, has enabled private enterprise to absorb a large proportion of the unemployed. The general effect pf the action of the Government ‘ can be seen in the great improvement in - the position of employment, the percentage of unemployed having been reduced from 30 per cent, in the June quarter, 19.32, to 13.4 per cent, in the March quarter’,-1936. For the future, the Commonwealth wiT continue to do all in its power to provide additional employment. As regards the Federal Capital Territory, the position is that married men registered for employment have for more than two months been receiving full-time work, and will be given full-time work until the end of
June at least, whilst single men will have their ordinary quota of work considerably i ncreased.
y asked the Minister for Health, upon notice: -
– The answer to the honorable member’s questions is as follows : - 1, 2 and 3. The matter raised by the honorable member will receive prompt attention, but it is pointed out that action by the Federal Health Council would be taken only when any claim cannot be satisfactorily dealt with by a State. In the case of Mr. C. J. Barnes, the State is still dealing with the claims, and is, presumably, capable of dealing satisfactorily with them.
s asked the Treasurer, upon notice -
What were the total payments made by the Commonwealth to the six States for period 1931-32 to 1934-35, and the total amounts paid over that period under the following headings : -
What were the total payments made by the Commonwealth to the State of Queensland over the same period and under the same headings as set forth in paragraph 1, except heading (c) ?
– The answers to the honorable member’s questions are as follows : -
s. - On the 29th April, the honorable member for Forrest (Mr. Prowse) asked me whether I would inform him which of the State Parliaments had passed the complementary legislation necessary to give effect to the legislation passed by this Parliament some little time ago providing for a homeconsumption price for wheat. Also whether any promise had been given that such legislation will be passed in respect of States which so far have not passed it. I am now in a position to advise the honorable member that the States of New South Wales, Victoria and Queensland have passed the necessary complementary legislation. No promise has been given apart from that expressed in the resolution passed by the Australian Agricultural Council at its meeting held in October, 1935. The terms of that resolution are as follows : -
That this conference of State governments gives general approval to the Commonwealth plan for securing a home-consumption price for wheat and will favorably recommend its adoption to their governments.
Cite as: Australia, House of Representatives, Debates, 30 April 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360430_reps_14_150/>.