14th Parliament · 1st Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 10.30 a.m., and read prayers.
– Has the Minister for Trade and Customs any knowledge of the truth or otherwise of the reported intention of the Government of Japan to impose a duty of 12½ per cent. upon the importation into that country of Australian wool, and as to whether that is or is not an act which has arisen out of the recent discussions between representatives of the two countries with respect to the contemplated restriction by Australia of imports from Japan ?
– The Government has no knowledge of any such intention by Japan.
– Has the Minister for Repatriation studied the act of New Zealand which extends repatriation benefits to South African war veterans who are domiciled in that dominion? Will he give consideration to the matter of extending similar benefits to South African war veterans in Australia ?
– I have not seen the dominion act, and am notclear in my mind as to the nature of its provisions in this regard, hut I shall take an early opportunity to familiarize myself with those provisions and shall bring the matter before my colleagues in the Government.
– Is the Prime Minuter aware that a good deal of hardship is caused by reason of the demand of the Postal Department for the guarantee of a minimum revenue before it will install a public telephone in the vicinity of beaches and other recreation areas? Because of the absence of ready means of communication in case of fire, drowning, accident or sickness, does he not consider that public telephones should be installed in such localities for the use of the public in case of emergency and that the amount of revenue likely to be obtained should not be the first consideration of the department?
– I shall have the matter referred to the Postmaster-General, and obtain a statement in regard to it.
– Will the Prime Minister consider the making of a full statement in regard to the different proposals which have been advanced in connexion with the overseas air mail service, so that the Australian public may be fully informed of the nature of those proposals from Australian sources as well as from interested sources in Great Britain ?
– The difficulty associated with the making of such a statement has been that the matter has been the subject of conferences between the two interested parties and the Commonwealth has assumed that neither proposal was a hard and fast one, but that each was subject to consideration by both parties. It was hoped that a settlement could be reached as the result of the conferences that are now taking place overseas. I shall inquire as to whether it is advisable to make a statement.
– The Minister representing the Minister for External Affairs will recall that some time ago applications were invited throughout Australia for cadets for the New Guinea Public Service. Have those positions been filled, and have the unsuccessful applicants been notified of what has been done ?
– On behalf of the Minister for External Affairs, I shall have the matter investigated, and shall see that the honorable member is informed of the result.
– Can the Minister for the Interior state when the new Commonwealth Offices in Brisbane will be ready for occupation ? According to the terms of the original tenders, they should have been ready many months ago. What is the reason for the delay ? If the honorable gentleman is unable to reply now will he advise me before the House adjourns to-day ?
– I shall make inquiries to see if I can give the approximate date of completion of the building.
– Will the Prime Minister state whether the Government has yet arrived at a decision in connexion with proposals for the restriction of imports from the United States of America with a view to correcting our adverse trade balance with that country or of improving it in some degree ? If a decision has been made, will it be communicated to honorable members while Parliament is in session, so that an opportunity may be afforded to them to express either their approval of it or their opposition to it, instead of dealing with the matter by regulation while Parliament is in recess, in which event considerable time might elapse before there would be an opportunity to express an opinion upon it?
– The Government has no statement to make at this stage, but will make one when it is in a position to do so, possibly before the present sittings are terminated.
Assistance to States
– Is the Prime Minis ter aware that the Premier of Victoria (Mr. Dunstan) is reported to have expressed amazement at his claim that the Commonwealth had made money available to the States for housing purposes, and to have said that this statement was the first he had heard of such assistance having been given to the States? Can the right honorable gentleman place before the House details of any assistance which his Government has given to the States for housing purposes, so that the public may know what is the true position?
– Had the honorable member been present when I replied to a question on this matter, he would know that I made no such claim, and that the statement of the Premier of Victoria is based upon wrong information. I have never said, because it is not true, that this Government has directly granted assistance to the States for the particular purpose of home construction. But the statement was made very definitely, and it is correct, that substantial assistance has been granted to the States to enable them to deal generally with the problem of unemployment.
– By way of personal explanation, in reply to the statement of the Prime Minister, that had I been present I would have heard his answer to a question on this matter, I wish to say that I am the member who asked that question, and that I was present when it was answered.
Disfranchisement of Residents
– In view of the. fact that no slave, serf, helot, peon, or adult of Canberra has the right to vote, will the Minister for the Interior state in what category the inhabitants of the Federal Capital city should be listed?
– The honorable gentleman has mentioned an interesting and a very varied list of voteless persons. I can only say that, if the people of Canberra are voteless, they are certainly not voiceless. In actual practice, with this national Parliament right in their midst, I am sure that their hopes and aspirations are adequately expressed by many of the honorable gentlemen whom I see around me.
– Has the attention of the Prime Minister been drawn to the official intimation of the
British Minister for Labour, that, as theresult of the accumulation by the British Unemployment Insurance Fund of a reserve of £21,500,000, it has greater current reserves than are needed to meet its obligations, and that arrangements have been completed for a substantial reduction of the weekly rates of contribution?
– My attention had not previously been drawn to the matter; it has been drawn to it now.
– Now that the Government is aware of the satisfactory results achieved under the system of national insurance in operation in Great Britain, will the Prime Minister take steps to expedite the introduction of a similar system in this country, so that the workers of Australia may enjoy its benefits?
– The honorable member is aware that the Government is doing everything practicable to expedite the investigations which must necessarily be made before such a scheme can be embarked upon. There is no justification for the suggestion in the honorable member’s question that our investigations are not being sufficiently expedited.
– Will the Prime Minister state whether it is a fact that the agreement between the Commonwealth and the Huddart Parker Shipping Company in regard to the maintenance of a continuous shipping service between Sydney and Hobart is to be cancelled? Will he make an effort to enter into some arrangement whereby a service will be maintained throughout the winter?
– Arrangements have already been made by the Government for the continuation of the service.
– Can the Acting Minister for Commerce state what progress has been made with the negotiations between the Commonwealth and the States regarding the passing of legislation with respect to the Wheat and Wheat Products Act passed through this Parliament last session?
– A meeting of the Australian Council of Agriculture will be held in Canberra on the 27th, 28th and 29th May, and I propose to bring this matter before the Ministers representing the various States in an effort to expedite the preparation and passage of the necessary State legislation.
– Can the Minister for the Interior say what progress has been made regarding the provision of extra accommodation at the Hotel Kurrajong for members of Parliament?
– Tenders have been invited for the construction of 48 additional rooms, but I do not think th». date for the closing of tenders. has yet been reached.
– It is reported in to-day’s press that requests are to be made to certain powers to guarantee the independence of Austria. Will .the Minister representing the Minister for External Affairs state whether the Commonwealth Government favours giving the inhabitants of Austria an opportunity to express an opinion regarding the political status of their country, instead of its becoming the plaything of Italy, France and Germany?
– The Government has no way of confirming the statements which have appeared in the press on this subject, but, in any case, the matter is one for consideration by the League of Nations.
– Australia has a representative on the League.
– That is so, but I repeatthat the matter is one for consideration by the League, and not for a definite expression of opinion by any one government in advance of the League meeting.
– Yesterday I asked the Prime Minister whether he would intercede with his colleagues in the New South Wales Parliament in an endeavour to prevent the hanging of two youths who are at present under sentence of death in that State. The Prime Minister replied that he had no authority to do so. I am aware of that, but I should like to know whether the Prime Minister, in his private capacity, would intercede with his colleagues to prevent the carrying out of these abhorrent sentences, and whether, if he refuses to do so, his refusal may be taken as an indication of his approval of what it is proposed to do.
– Personally, I regard that as a very offensive question.’ I have no more right or authority to intervene in this matter than has the honorable, member himself, and it is obvious that, in asking the question, he was actuated by low-down party motives.
– Will the Minister in charge of .War Service Homes, instead of allowing rents to be raised against war service homes tenants on the excuse that it is being done in accordance with the natural increase of market rates, take into consideration the letting of war service homes that are occupied under weekly tenancy at rates in accordance with the incomes of returned soldiers, particularly of those in receipt of pensions?
– It is not a fact that rents are being increased. The rents charged for war service homes that have reverted to the commission are, on the average, considerably below those charged for similar houses owned by private persons in similar suburbs throughout Australia. I am aware of the specific case which the honorable member has in mind, but I have been assured by officers of the department that the rent is not in excess of the value of the home.
– Is it not a fact that rents charged by the department for houses in South Australia are, in many instances, double those which were charged by the State Savings Bank when it was administering the same homes ?
– That may be true, but the reason is that, as a relief measure, rents as low as 5s. a week were being charged for houses worth 15s. a week. Those rents have now been reviewed, but they are still below those charged by private property-owners for similar houses. Moreover, it is a fact that many of the occupants who were not in a position to pay rent, have not paid any for as long as six and seven years.
– Is the Minister in a position to state when he will be able to visit South Australia in accordance with his promise in order to discuss with interested organizations matters relating to war service homes ?
– It is true that I made a promise that I would visit South Australia during the Easter recess to carry out certain investigations regarding war service homes administration, but I was prevented from doing so because of other important matters that developed. I did visit Tasmania, and inspected war service homes there. I am unable to say just when I shall be able to visit South Australia because, owing to the regrettable death of the War Service Homes Commissioner, I am now engaged in the task of appointing a successor. I assure the honorable member, however, that I shall visit South Australia during the winter recess, when I shall be able to go into the matters which he has in mind.
– Is it a fact that the War Service Homes Department has issued instructions to returned soldiers, who are occupants of war service homes in the Lidcombe area, to vacate their homes ? Is it a fact that because of the demand created by the opening of factories in this district, there is a waiting list of persons anxious to rent these homes ?
– I am not aware of any waiting list of persons desirous to rent or purchase war service homes. Of course, applications are received from time to tune, and there is a considerable number of vacant war service homes available for purchase or rent in every State; but I assure the honorable member that every consideration is being shown to returned soldier occupants of war service homes, and in only a few isolated cases has drastic action to be taken.
– Is it not a fact that there has been an increase of the number of threatened evictions and requests to vacate premises in the Lidcombe district ? Is it not a fact, that, at the same time, the department has a large list of non-returned soldiers waiting to take the homes when the returned soldiers have been got out of them ?
– I deny the suggestion contained in the honorable member’s question, which has been deliberately framed to misrepresent the position in regard to war service homes in New South Wales
– In view of the reply given to me by the Minister for War Service Homes, that he was not able to furnish me with the increased charges for rentals of Avar service homes in my electorate, because to do so would take time and cause expense,would the honorable gentleman allow me, accompanied by a clerk, to look over the war service homes in order that honorable members who are entitledto know what increases of rents have occurred may obtain that information? The Minister could give me the information and save me the necessity of canvassing 1,300 war service homes in my electorate.
– Order ! The honorable member for Barton is sufficiently acquainted with the Standing Orders governing the asking of questions to know that he is not entitled to express an opinion.
– Will the Minister in charge of War Service Homes supply, in connexion with the increased rentals, the number of increases and the rate of the increase in regard to the Barton electorate, and also to the whole of New South Wales?
– I explained earlier to the honorable member that it is impossible for me to dissect the war service homes in respect of electorates. They are not recorded in electorates. To do so would involve the department in great expenditure of time and money. Furthermore, if it were to be done for one honorable member, the department would very likely be obliged to do it for all honorable members. At any rate, to separate war service homes purchasers into groups according to electorates would be undesirable. All war service homes are treated in exactly the same manner by the Commissioner, irrespective of the electorates in which they are situated. I resent the imputation that the honorable member for Barton is being singled out and refused information. It is impossible to create a new system of bookkeeping in the department in order to give Min the information he seeks. I remind him that it is my duty to look after the War Service Homes Commission as it affects the whole of the Commonwealth and not as it affects any electorate.
Export to New Zealand
– Is the Acting Minister for Commerce able to state what progress, if any, has been made in the negotiations with New Zealand for the removal of the embargo on the importation into that country of fresh fruit and vegetables from Australia? Were any further representations made during the recent recess, and is it the intention of the Government to invite representatives of the New Zealand Government to visit Australia? Will the Government treat this matter as urgent?
– Representations have been made on this subject to the Government of New Zealand by the Prime Minister, through the Dominion Prime Minister. The Minister for Agriculture in New Zealand and his technical advisers have been invited to visit Australia to be present during the next meeting of the Australian Council of Agriculture to be held in Canberra at the end of May. In addition, a specific case has been prepared dealing with each kind of fresh fruit: which it is desired should be admitted into New Zealand.
– What about vegetables ?
– I purposely refrained from touching on vegetables, because I was anxious that the position in regard to fruit imports should first be clarified. We desire that the Government of New Zealand should agree to admit imports of certain specified fresh fruit for prescribed periods each year from areas in Australia which are certified as being free from disease.
– In any negotiations between this Government and the Government of the Dominion of New Zealand, will the Minister for Commerce take fully into consideration the interests of the Australian potato-growers ?
– In connexion with all trade negotiations all interests are con sidered, import or export, internal or external.
– Has any further effort been made by the Government to allow the children of returned soldiers, married after 1931, to participate in repatriation benefits?
– The legislation which created the service pension followed the principal act in excluding from benefits the wives of ex-soldiers who married after 1931, and also, of course, excludes the children born of such marriages.
– When does the Government intend to do something for the children ?
– This matter was fairly fully discussed when the bill was before the House, and the objections that were taken then to the exclusion of what are termed “ new “ wives,, that is wives married after 1931, were dealt with. The Parliament has passed the legislation, and there it is.
– Can the Minister for Repatriation inform me whether returned soldiers already in receipt of invalid pensions who have applied for service pensions on the ground that they are permanently unemployable, have had their claims rejected? If such is the case, on what grounds is the department acting? Is it acting on the instructions of the Minister?
– If the honorable gentleman will supply me with the facts I shall have an inquiry made at once. The commission no doubt is acting within its authority, and I should be surprised to learn that it is not administrating the law in an impartial and proper way.
– I have in my possession the following letter sent by the Repatriation Commission to Mr. H. H. Gordon, of 65 Regent-street, Paddington: -
I have to inform you that the State Repatriation Board lias rejected your claim for a service pension on the following grounds: -
That you are not permanently unemployable.
I enclose notice regarding your right of appeal.
Mr. Gordon is in receipt of an invalid pension, and is permanently unemployable. I desire to know whether the Repatriation Commission, in refusing him a service pension, is acting in accordance with the recent amendments made to the Australian Soldiers’ Repatriation Act? If it is not doing so, will the Minister give . an instruction that this apparent injustice is to be corrected ?
– I shall certainly see that the commission carries out the law, and if the honorable gentleman will give me the particulars I shall speak to the commissioner about it to-day.
– Is the Minister for Repatriation prepared to consider the advisability of making a further amendment of the Australian Soldiers’ Repatriation Act to extend the benefits to the widows and dependants of deceased returned soldiers who died from tuberculosis prior to the 1st January of this year?
– The matte* raised by the honorable member’s question was also raised during the debate on the amending bill, and for reasons, which I think are sufficiently obvious, the Government was unable to accept an amendment designed to give effect to what he is now seeking. The honorable member will realize that there must be a stop somewhere. In this case it was thought proper to make the act apply from the 1st January of this year.
– It creates a very inequitable position.
– I do not deny that. Hard cases are inevitable in all legislation but I shall give the matter consideration. I am in sympathy with the motives that actuated the honorable gentleman in asking the question.
– In view of the grave danger of this National Parliament becoming harassed, and being merely the mouthpiece of collections of bureaucracies from the capital cities, will the Prime Minister, before considering concentration methods, appoint a national planning commission to delineate the domestic rights of regions of common interest to ensure that a true cross-section of the interests of the people governs our country ?
– The only advice that I can give to the honorable member is that he should not ask this as a question, but should put it on the business-paper as a notice of motion so that Parliament will have full opportunity to discuss every aspect of it.
– As the sole judge of whether a question is in order or not, I desire to know from you, Mr. Speaker, whether, if an honorable member has asked a question which has been accepted by yourself, the Prime Minister is in order in referring to it as being offensive? I also desire to know whether those tactics are adopted by the honorable gentleman when he is unable or afraid to answer?
– Order ! The latter part of the honorable member’s question is distinctly out of order. The Prime Minister is entitled to express his opinion as to whether or not a question is offensive to himself. With regard to the question to which the honorable gentleman referred, I did not disallow it, but I think 1 am justified now in stating, in view of the terms in which it was couched, that I consider it was asked for the purpose of giving annoyance, if it were not actually offensive.
I have received from the honorable member for West Sydney (Mr. Beasley) an intimation that he desires to move the adjournment of the House this morning for the purpose of discussing a definite matter of urgent public importance, namely, “ The need for a Select Committee of this House being set up to inquire into and report upon the introduction of foreign speed-up methods by Waygood-Otis (Australasia) Proprietary Limited in a manner inimical to Australian economic conditions.”
Five honorable members having risen
– I move -
That the House do now adjourn.
I do so as a request to this House -
That a Select Committee be set up to report on the benefits being received by Waygood-Otis (Australasia) Proprietary Limited from the existing tariff, to devise means whereby tariff protection extended to it shall be dependent upon the observance of Australian industrial standards, to inquire into the financial structure of Waygood-Otis (Australasia) Proprietary Limited in order to ascertain whether it is a foreign company registered in Australia merely to derive particular benefits and, if such is found to be proven, to draft necessary legislation and taxation measures to cover excessive profits made in Australia.
I draw the attention of supporters of the Government to the remarks made by the Minister for Defence (Mr. Archdale Parkhill) at a recent conference of the United Australia Party in Sydney. The honorable gentleman then declared that monopolies and combines were growing in Australia. I gathered the impression, from what was said, that the Minister was defining to the conference the Government’s attitude in regard to companies which enjoyed tariff protection in Australia. If that is so, there should not be the slightest hesitation by the Government in accepting my proposal, for it is actually in keeping with the desires expressed by the Minister on that occasion.
We claim that Waygood-Otis Limited, a foreign trust operating behind the Australian tariff wall, is introducing speed-up methods into industry in Australia. If the technique of this company becomes general in the metal trades industry throughout Australia, it must necessarily affect many hundreds, if not thousands, of employees who will be. thrown on the industrial scrap heap. It must also have the effect of damaging the health of the men who are called upon to work under such conditions.
The history of this firm is interesting. Its . registered name is Waygood-Otis (Australasia) Proprietary Limited, but I claim that it is a foreign company operating with foreign capital. It was registered in Sydney in 1920, with a nominal, capital of £1,000, and only two shareholders, each of whom, as indicated in the articles of association, held one share. The shareholders were Messrs. Eggleston and Eggleston, a firm of solicitors of Melbourne. The senior member of the firm in Australia is the Honorable P. W. Eggleston, the Chairman of the Commonwealth Grants Commission, who was appointed by this Government. The three directors named in the articles of association were all members of the London firm of Waygood-Otis Limited. It is stipulated that no shares or debentures of the company shall be offered for public subscription in Australia. It is therefore clear that the company does not intend that any Australian capital shall be. invested in this venture, irrespective of its profits or benefits. So .successful have been the operations of this foreign company in Australia, in consequence of the benefits afforded to it by our protective tariff, that its capital no*v amounts to £100,000. The enterprise, however, has been kept a close preserve for its overseas owners. Waygood-Otis Limited is a private company, for participation in its profits is denied to any Australian connexions. Apart from the local managing director, who resides in Australia to look after the interests of his foreign principals, only £41 of the £100,000 capital is shown in the share register as being held in Australia. Nominally the Australian company is owned by three different firms, WaygoodOtis Company, of London; the Otis Elevator Company, of New York ; and the Otis Fenson Elevator Company, of Canada. Investigation in London, however, shows that of the 290,000 ordinary shares which constitute the London firm, 277,510 are held by the Otis Elevator Company of New York. No fewer than three of the directors of the London firm are living in New York, and are directors also of the Otis Elevator Company of New York. The same gentlemen are also interested in the South African and Australian organizations of the company. No particulars are available of the profits made by Waygood-Otis (Australasia) Proprietary Limited. I understand that the company law provides that foreign companies must, each year, file a statement of their assets and liabilities, but no information is given as to their dividends.
I come now to a consideration of the degree of tariff protection given to this organization by the Australian Government. The details are as follows: -
It will be agreed, I think, that this is substantial protection.
Although no information is available as to the profits made by the company in Australia, it has been ascertained that the London branch of this foreign company paid a dividend of 25 per cent, last year, plus a bonus of 10 per cent. This company is controlled by American capital and, while sheltering behind the Australian tariff wall, is exploiting the Australian public for the sole purpose of making huge profits for its American principals.
In spite of the advantages which the company is already enjoying in Australia, it is introducing into its Australian organization the most vicious speed-up methods practised in any part of the world. Quite recently the company brought from America to Australia a person, called an efficiency expert, named Duval, to introduce into the Australian works of the company what is known as the Bedaux system of control, the express purpose of which is to speed up the work. The method is to set a stop watch in operation behind each employee of the firm, to time every one of his actions to 300th part of a second. Every conceivable movement of the man during his day’s work is, under this system, subjected to timing by the stop watch. The man, in fact, is reduced to the level of a cog in a machine, with the difference, of course, that a cog is not subjected to the same mental strain as is the man who has to work with a stop watch behind him.
Every movement of the employee is checked. It is argued that the object of this scheme is to increase production. Naturally, under such conditions, the health and mental condition of employees have been seriously impaired. This is probably the worst feature of the method, but another objectionable feature is that in consequence of the introduction of the system, a substantial proportion of the employees of the factory have already lost their employment. This means an increase of unemployment in Australia. The first trial of the system resulted in the dismissal of six men. That may not seem a great number, but as the total number of employees in the factory is between 40 and 50, it is actually a substantial proportion. Honorable members will not find it difficult to imagine the psychological effect of the introduction of this system of work into this factory.
– The dismissal of the six men is vital enough to them !
– It is very vital indeed, though it may seem a small number to some honorable members of this House. The stop watch is called into operation to time a man picking up a spanner from the floor and replacing it on a bench, tightening a nut, or doing the hundredandone other routine acts of a machine shop. The introduction of these foreign conditions of work brought about such a situation that the men could stand the strain no longer and they stopped work. Two weeks later the managing director of the company signed an agreement that the use of the stop watch would be discontinued and that the work of the factory would be conducted on ordinary straightforward, practical lines. The men went back to work, but no sooner had production started again, than the company, metaphorically speaking, tore up the agreement and brought the stop watch into operation again, together with the speeding-up devices which had caused the original dispute. This man from America may be able to do things like that in America. He may be able to tear up agreements made with the labour organizations of America, or to twist the meaning of them out of all recognition ; but he must be shown clearly that whatever he is permitted to do in the United States of America in that regard, he must honour the agreements that are made with Australian workmen. I therefore ask the Government to take steps to ensure that this will be suitably impressed upon him. The second time the scheme was put into operation five more men were dismissed, and the pressure again quickly became so great that a fresh demand was made upon the company to honour the agreement it had entered into. The men again ceased work.
This is a very important matter, but I am able to carry it even a stage further, for it is understood that still further dismissals are contemplated. I have no doubt that additional men will be dismissed if no action is taken to force the company to withdraw the stop watch and speeding-up methods which it is endeavouring to apply. If “WaygoodOtis (Australasia) Proprietary Limited can “get away” with this kind of thing, it will have reactions on many other firms connected with the Metal Trades Association. . I understand that th« secretary of the organization, Mr. Myhill, is inclined to stand behind this sort of thing. I do not say that every member of the association intends to adopt the methods applied by Waygood-Otis (Australasia) Proprietary Limited; but if this foreign company is permitted to carry on under these conditions, it is inevitable that some similar methods will be applied to smaller places of business in order that they may retain the trade which they now enjoy. The other elevator companies of Sydney are, I am told, honouring the agreement they made. It is unfortunate, however, that the Meta, Trades Employers Association refused to meet a delegation of employees to discuss this subject. Perhaps I ought not to put it so strongly as that. The employees requested the association to meet a deputation, but numerous excuses were put forward to justify the association in not acceding to the request. We were told that the president was absent from the city, and that it was not possible to get the executive committee together. Honorable members know well enough that excuses of that kind are often made when one party does not wish to meet the representatives of another party to discuss a matter in dispute. It is, however, essential that something shall be done to prevent the introduction of American speedup methods into Australian industry, and the unnecessary displacement of human labour in consequence thereof. It looks as though the Metal Trades Employers Association is waiting to see what will happen to Waygood-Otis (Australasia) Proprietary Limited. If its introduction of American speed-up methods is condoned, a general adoption of them may be looked for; but this should not be allowed under the protection of the Australian tariff. The object of our tariff is to enable companies to establish their operations in this country under proper Australian conditions and standards of work, and we protest bitterly against the introduction of such methods by foreign companies which enjoy substantial protection in this country.
We desire the Government to show where it stands in this matter. If it fails to take action, it will condone the” adoption in Australia of American speed-up methods which result in the unnecessary displacement of human labour in order to provide increased dividends for an American trust. The displacement of labour must excite the attention of every honorable member. At a time when every effort is being made to provide employment, and to shorten hours of labour to counteract the effect of the mechanization of industry, it is logical to assume that every honorable member will be opposed to; this odious system, which must cause increased mental strain and broken health among employees. If the Government fails to check the evil, it will become a party to one of the most diabolical drives ever made against Australian industrial conditions.
The outstanding feature of the whole matter is. that Waygood-Otis Limited is receiving the benefit of the Australian tariff, as though it were an Australian firm, operated by Australian owners, and fulfilling’ Australian conditions of labour. This company cannot have it both ways. The profits that arise from its activities in Australia do not assist in improving our, internal economy, because they go outside this country, and, particularly, to the United States of America. Australian workers are being exploited to enable profits to be distributed in a country with which Australia has a most unfavorable trade balance. When a company claims the protection of our tariff, it must be prepared to show its bona fides by observing Australian labour conditions, and demonstrating that it is not merely a foreign trust operating behind our tariff wall, and providing a minimum of employment in this country in order to retain its market and its monopoly.
The trade unions are no longer prepared to be the shuttlecock between the courts, the Tariff Board and the Parliament. The industrial courts have refused to intervene in even the most glaring cases of overtime and speeding-up. The court shelters behind the Parliament, and the Parliament behind the court. This farce has gone on long enough. The Parliament must declare whether it is prepared to admit American speed-up methods into this country, and thus throw thousands of Australian workers on the” industrial scrap-heap. If neither the court nor the Tariff Board can protect our workers from foreign exploiters, then this House must provide the machinery required to re-establish Australian conditions for Australian workers.
– The honorable member for West Sydney (Mr. Beasley) has brought under notice a subject of great importance, but when he asks that it should be investigated by a select committee he raises another question which goes to the root of the matter. It is unhappily true that this national Parliament has no power whatever to act in regard to things that really count in the world of to-day. Theoretically, it can make war and peace. It can occupy its time more or less profitably in discussing various subjects, such as taxation and the like, but in regard to the economic problems that confront the world, it can do nothing. It cannot prescribe a rate of wage; it cannot interfere where conditions exist that are destructive of the wellbeing of the people of this country. No matter how provocative to industrial upheaval the existing conditions may be, it is powerless to remedy them. The honorable gentleman has called attention to certain methods to which he would have us apply the term “ American “. I have no doubt whatever that the methods to which he has referred this morning are quite common in the United States of America. But they are not confined to America; although they may have been carried farther there than in other industrial countries. We have to realize that these methods have been evolved through the development of the economic system in a direction which must inevitably, as time goes on, lead to an impasse. Machines produce) but they do not consume. These increase the productivity of labour, but make no demand for the goods produced. Every improvement throws numbers of men on the industrial scrap-heap. Some of them find employment in other avenues, but others do not. It is with this residuum that we have to deal, and with which this Parliament is quite powerless to deal.
The honorable member has pointed out that the company to which he has referred is an American one. He suggests that it is only colorably an Australian company. I assume that its operations are such that its nominal capital of £1,000 is negligible. It is a powerful company, and it is established here, but we are unable to deal with it. It is not within the power of this Parliament to regulate the behaviour of companies. We can, of course, prevent a company from establishing itself; but, once established, we have no power to regulate its operations. 1 have pointed this out frequently in this
Parliament, and the people have been given opportunities to widen our powers, but they have not accepted them. Under the Constitution, as it stands, we cannot legislate with respect to corporations, or industrial matters. To appoint a select committee, therefore, to inquire into the subject that has been raised, would be only a waste of time. It would be merely an idle gesture. Experience has convinced us that the limitations placed upon our powers by the Constitution make such inquiries futile. Royal commissions to inquire into matters related to industry and commerce have been appointed from time to time, but witnesses have refused to answer questions which the commission regarded as vital to its inquiry, and we have had no power to compel answers. The powers of this Parliament with respect to questions put to witnesses before a select committee or a royal commission are confined within the ambit of its legislative authority.
Whilst I appreciate the importance of the matter which the honorable member has raised, I should be surprised to learn that he has cited the first case of its kind in this country.
– This is the first time the new system, which has been referred to, has been introduced.
– I do not know about that, But I have been informed that that is not so. I shall not discuss that point. I shall say that, although there may bein the methods to which this company has resorted, something which distinguishes them from those operating elsewhere, it is a distinction of degree and not of kind. These speeding-up methods are inherent in. the economic system; machinery itself operates in this way; and we have no power whatever to deal with these vitally important questions. The honorable member for Parramatta (Sir Frederick Stewart) yesterday, I think, said something about unification. We have tried over and over again to get the people of Australia to give this Parliament power to deal with industrial matters and corporations, but they have refused to do so.
– Try to get them to give the Parliament complete power.
– One Parliament for Australia to have full power !
– I should not be in order in discussing that matter. As far as I am concerned, I have, when Prime Minister, asked the people for as much power as I thought it would be possible to obtain from them, but they did not grant even the limited powers which I sought.
I take it that the honorable gentleman has served his purpose by ventilating this matter. Whilst the Government is unable to accede to his request for a select committee, I must make it quite clear that its attitude is determined by the limitations imposed by the Constitution on the powers of this Parliament. I am entirely opposed to futile inquiries. This is a subject not, perhaps, of industrial life and death, but of far-reaching importance. I know nothing of the merits of the case, but have accepted what the honorable gentleman has said as representing the facts. Although this particular company may have made one stride ahead, it is only one step in advance of the system general throughout Australia. The appointment of a select committee should be a prelude to action; but in this case no action is possible, because this Parliament cannot act.
.- I support the motion submitted by the honorable member for West Sydney (Mr. Beasley). The old system of speeding-up was called the Taylor system, but this new method is known as the Bedaux system. It is based on the opinion that all human effort is measurable in terms of a common unit - a fraction of a minute’s work plus a fraction of a minute’s rest always aggregating unity. The various movements of the worker are timed by means of a stop watch which is guaranteed to record accurately to a hundredth part of a minute. When a man bends over to pick up a spanner or lift a hammer, the time occupied in the movement is taken by an expert. Then the leading hand goes through the same movement to see how quickly it can be accomplished.
– Who takes the time ?
– A specialist. An expert has been sent from the United States of America and he supervises the work done by each individual employee. He is assisted by another man, an expert, who shows the employee the quickest and shortest way of carrying out a particular task. Every movement of the employee is timed with a stop-watch and if he beats the set time both he and the general overseer are paid a bonus. As the honorable member for West Sydney pointed out, the men objected to the introduction of this system and went on strike. After the strike had extended over a period of four weeks a conference was held; and the manager, while maintaining that the evils did not exist, agreed to abolish the system and to revert to ordinary working conditions as understood in this country. The employees accepted that undertaking and went back to work. Within one week the men were informed that the Bedaux system would be reintroduced. When reminded of the terms of settlement the manager stated that though the men had returned as agreed, be had a perfect right to revert to the Bedaux system. He said “ What arc scraps of paper among nations? If the nations of the world can disregard them, so can I “. He also told the men that if they would stick to him he would stand by them. In 1921, dealing with piecework in the Engineers’ case, Mr. Justice Higgins said -
Piece-work has been more in use in Great Britain than in Australia, and members of the Amalgamated Engineers who came from the Old Country came with their minds inflamed against piece-work and all its off-shoots, owing to the cutting of rates by the employer when he believed that the pieceworkers were earning more than he thought reasonable.
His Honor also read from a magazine in which a leading American citizen referred to piece-work as a “vicious system thai makes honest men thieves and gluttons, and enemies out of shop-mates “. The piece-work system encourages the most greedy side of mankind to the detriment of the health of .the workers who work under it. The Minister for Repatriation (Mr. Hughes) has gone about the countryside asking women of Australia to rear larger families. But of what use is that when, having grown up, the children may be forced to work under a system which is eating into the vitals of society? The men at present employed under the Bedaux system are so tired after the com- pletion of their day’s work that they are no longer able to reproduce their kind. At any rate this system saps the vitality of the workers who labour under it with subsequent ill effects on their offspring. The Minister for Repatriation, in reply to the honorable member for West Sydney, claimed that the Government has no power to deal with this matter. It is the lack of similar power by the governments of other countries of the world that has resulted in the creation of dictatorships. The right honorable member has admitted that the world to-day has reached an impasse, the reaction of which is felt in Australia, which has brought about a revolt against degrading labour conditions. All that the honorable member for West Sydney asks is that a select .committee be appointed to inquire into this matter. I believe that the Government has the necessary power to deal with a firm which adopts such tactics. It has given tariff protection to this company, the shares of which, by special instruction, have not been offered for sale on the Australian market. It is quite competent for the Tariff Board to inquire into the whole of the ramifications of this company. The honorable, member for West Sydney has pointed out clearly the development of this undertaking in Australia, and the methods adopted with respect to the issue of its snare capital. No person in Australia knows what profits are made by the Australian branch of this company - the whole of the profits go to the parent company in England - but last year the profits of the parent company in England were sufficient to enable it to declare a dividend of 20 per cent, and, I understand, a dividend of 25 per cent, was declared in the preceding year. Apparently the Government has the power to look after the well-being of the English shareholders of this company who are given special privileges in this country, yet it claims it has not the power to deal with the problem of the workers engaged by the company in Australia. That a sweating system countenanced by other countries of the world should be allowed to get a footing in this country, and that the Government should say that it has no power to prevent, is an admission of incompetence on
Ihe part of the Government. The Minister for Repatriation has said that the Government has no power to inquire into this matter. Nevertheless, I think the revelations that have been made during this debate regarding the unit system which it is alleged has been affirmed by the Metal Trades Association warrant some inquiry on the par.t of the Commonwealth Government. As the result of the introduction of this pernicious system into its activities, the Waygood-Otis company has been able to dismiss eleven men out of a total of 45 men previously employed. What would be the effect on the employment position if the system were introduced in every industry in Australia? Now, when the first attempt if. made to introduce this system into Australia, is the time to inquire into its ramifications and to make a definite pronouncement to the people of this country which will discourage other industries f rom adopting it.
. It is recognised by every medical authority of any importance that speedingup in industry is injurious to the health of the workers. I ask the Government to request the Department of Health to make a report on this matter. I feel sure that if that were done the Minister for Repatriation (Mr. Hughes) would be surprised to ascertain the devastating effects which follow such practices. The honorable member for Cook (Mr. Garden) has referred to the degeneration of the race as the result of bad labour conditions. It is a recognized fact that continuous strained physical effort has an injurious effect on the offspring of those subjected to it. The idea of a man being followed about by a stop-watch is as bad as the use of the lash on a slave. I wonder that the experts of the United States of America, with their great intelligence and great knowledge of the evil effects of speedingup in industry of the health of the employees, have not taken definite action against it. The Bedaux system, as the honorable member for West Sydney (Mr. Reasley) has said, is bad for the human being, will destroy life, and bring about a break-up of tho health of the worker. In Australia we should be determined to make the conditions of the workers as humane as possible.
.- The question raised by the honorable member for West Sydney (Mr. Beasley), is certainly one of transcendent importance to the entire industrial community of this nation. That honorable member is deserving of the support of every member of this Parliament in his. attempt to prevent the introduction of a system the effects of which would be injurious to the workers of this country. I visualize very clearly the situation outlined by him because, prior to my entrance into public life, I was associated with the engineering trade. The Bedaux system is not human ; it is foreign to the very nature of the working conditions to which the people of Australia have become accustomed. In this modern age, mechanical devices have so progressed that there is a desire on the part of the captains of industry to endeavour to make the man himself a machine. No encouragement should be given to them in this desire. On the contrary, every effort should be made to raise the standard of the conditions of people employed in industry. We have a signal opportunity at the present time, when the attempt is made to inaugurate this system for the first time in Australia, to let it be known that we are definitely against the introduction of any system which will have a detrimental effect on the health of employees generally. The Minister for Repatriation (Mr. Hughes) has said that the Commonwealth has at present no power to restrain any firm from introducing this system. I join issue with the right honorable gentleman in that respect. No other industry in Australia presents an opportunity for the exercise of the powers available to the Commonwealth such as does the industry at present under discussion, because WaygoodOtis (Australasia) Proprietary Limited has practically a monopoly in Australia of the class of undertaking in which it is engaged. I say most emphatically that if I had the power of the Minister for Trade and Customs I should quickly deal with such a firm. If it is not prepared to provide for its employees conditions that are consistent with the best standards of labour in this country, it should be deprived of the protection given to it under the tariff.
– It should certainly not be given any government orders.
– I agree with the pertinent interjection of the honorable member for Melbourne Ports (Mr. Holloway). The Government is not exhibiting that determination which it should show when it seeks to wash its hands of responsibility in this matter. If it has not the power to deal with the situation, it should announce its intention to attempt to secure that power. Its bald statement of ineffectiveness is an invitation to other employers to impose these undesirable conditions upon their workmen. In these days of an ever-ready tendency on the part of industry to intensify economic and industrial disabilities, the Government should be prepared to take the strongest action possible under the powers which it possesses in connexion with the tariff. There is no likelihood of injustice being inflicted upon other firms, because Waygood-Otis Limited has practically a monopoly of the business in which it is engaged. I ask the Government to furnish proof of the sincerity of its protest against the action which has been taken by this employer of labour. Had the Minister indicated that the Government distinctly disapproves of what has been done, I am confident that that would have gone a long way towards arresting any tendency to extend the practice. “We must not lend ourselves to the application of any conditions which will intensify the difficulties of the existing industrial system, but must always endeavour to prevent the introduction of what is distinctly foreign to our convictions. I strongly support the protest of the honorable member for “West Sydney.
.- This debate is at least serving the purpose of proving to the workers of the Commonwealth that the present Government not only does not possess the power to do what they expect of it, but also does not desire to obtain that power or to assist them in their fight against unjust conditions. The Government defends its inaction on the ground that it has not the power, under the Constitution, to prevent the application of the speeding-up methods adopted. If the employers are able to get away with their attack upon the conditions of the workers engaged by this firm, the principle will doubtless be extended to industry generally throughout the Commonwealth. The Minister for Repatriation (Mr. Hughes) has said that this is a natural development, and that its effect will be to bring Australia to an impasse, the results of which cannot yet be contemplated. Yet he says the Government can take no action; that it is powerless to assist the workers to improve their conditions. It is always able to exercise power to prevent the workers from themselves taking any action in that direction. “Were they to adopt go-slow methods to obtain a fair remuneration for their services, would this Government say that it had not the power to take action against them? The right honorable gentleman who has made this very weak defence of the Government would be the first to advocate drastic action against the workers, in order that the employers might be assisted in an attack upon their conditions. Look at the different acts of oppression against the workers which have been carried through this class Parliament by class governments ! The Crimes Act alone makes provision for all sorts of severe penalties against workers who dare to resist the attacks of the employers upon their conditions. The right honorable gentleman is one of those who were responsible for placing upon the statute-book many of the most oppressive measures directed against the workers.
Mr. SPEAKER (Hon. G. J. Bell).Order! The honorable member is not entitled to reflect upon an act of Parliament by describing it as “ oppressive.”
Mr.WARD. - Is it to be wondered at that the workers in many parts of the world to-day are tearing up constitutions, destroying futile governments which are unable to assist them, and demandingthat the existing authority shall do something to protect their interests? My advice to the workers is, that they should continue to organize, agitate, and take whatever action is necessary to protect their standards of labour. The spectacle of full benches opposite during the discussion this week of concessions by way of tax remissions and exemptions to certain privileged sections of the community, compared with the almost empty benches opposite to-day while a matter is being discussed which vitally concerns the welfare of the workers, is a grave indictment of our parliamentary system. I ask the right honorable gentleman whether much of the existing Commonwealth industrial legislation has not been enacted for the purpose of deluding the workers into the belief that there is machinery from which they may expect to receive social justice without the adoption of such methods as direct action or refusal to continue to operate the wheels of industry until they are given fair treatment by those who employ them. In 1906, this Parliament passed the Australian Industries Preservation Act, which in the definitions section specifically provides that unfair competition shall include competition of an unfair nature which does not make provision for adequate remuneration for the workers engaged in an industry. From time to time anti-Labour governments have attempted to delude the workers by the setting up of arbitration machinery. Any one possessing fairmindedness will recognize that, whether it be in the Arbitration Courts or elsewhere, there is one law for the rich and another for the poor, and that many judicial decisions are based, not on the merit of the argument submitted, but purely on class considerations. Members of antiLabour governments and the majority of those who are appointed to judicial posts belong to a distinct class of society which is determined to exert every power and use every opportunity to oppress the workers to the lowest point. All the talk about introducing a shorter working week and a scheme of national insurance is indulged in simply for the purpose of inducing the workers to refrain from organizing, in the belief that they will be permitted to enjoy some measure of social justice.
– Order ! I ask the honorable member to discuss the matter before the Chair. It is definite, but the honorable member has introduced into the debate a number of matters that are outside the terms of the motion.
Mr.WARD. - The motion asks the Government to take action to prevent the perpetration of an injustice upon the men who are engaged in a certain industry. The Governmentclaims that it has not the power to take such action.
I consider that I am justified in pointing out to the workers that, as the Government has neither the power nor the desire to seek the power, they should adopt whatever methods are available to them to improve the conditions in this industry. If it can be shown that this Government is a class government which can and does operate only for the purpose of making remissions of taxation and giving other forms of relief to wealthy sections of the community-
– Order ! The honorable member must pay regard to what I have said, that this is a definite matter and must be debated as such.
– The definite matter which we are discussing is one that concerns an attack upon workers in a particular industry, which eventually may, and I believe will, if the Waygood-Otis Company has its way, evolve into an attack upon the conditions of the whole of the workers throughout the Commonwealth. What sort of national parliament and government are these that say baldly “There is not the power to control or to regulate the economic life of the nation “ ? What more serious or important question could there be for the great mass of the people of this country, than the regulation of their economic life ? This Government, and its colleagues in the parliaments of the States, are prepared to use the forces of the State to compel men to accept conditions of which they say they disapprove. I have heard honorable members opposite talk about abhorrent conditions in certain industries, and advocate the adoption of a working week of fewer hours, with an improvement of the working conditions of the employees; yet, whenever the workers in desperation take action on their own behalf, anti-labour governments readily employ the armed forces of the State to compel them to accept the very conditions of which many of them say publicly they disapprove. As the honorable member for West Sydney (Mr. Beasley) has already pointed out, the police force controlled by the anti-labour Stevens Government in New South Wales, has taken the names of trade union officials who attempted to organize resistance by the employees of the Waygood-Otis Company against the attack made upon their working conditions. May I point out to honorable members opposite who always defend their attitude on the plea that there is in existence Arbitration Court machinery which can deal with such matters, that when men strike for higher pay or fewer hours of labour, the court always rules than an inquiry into their claim cannot be held until they have resumed work.
– Order ! The honorable member has exhausted his time.
Mr.WHITE (Balaclava - Minister for Customs) [12.15]. - I do not intend to defend any wrong-doing by this company, if there is any, but I am prompted to speak because the suggestions made from the other side impinge on tariff policy. The honorable member for West Sydney (Mr. Beasley)has put forward a proposal that, when industrial trouble arises in a protected industry, the Government should do something with the tariff. Lot us examine that proposition. The honorable member’s suggestion is really part of the New Protection policy recently enunciated by the Leader of the Opposition (Mr. Curtin), who said that, although his party believed in protection, it would no longer support the granting of protection to a monopoly which refused proper working conditions to its employees. I called on him to put his new policy to the test by supporting proposals for the reduction of duty upon a certain protected industry.
– The Minister must not refer to what took place during a former debate.
– The honorable member for West Sydney accused the firm under discussion of speeding-up its employees. We have heard of the “go-slow” policy, and now we hear of “ speedingup “. Neither system is economic. If men are driven beyond their capacity, they cannot produce the best results, and if they “goslow,” there is loss of efficiency in the industry, and the inefficient industry cannot long exist. The honorable member has advocated the removal of protective duties in the case of this industry, because the firm of which he complains has been speeding-up its workers. The duties to which he referred are only a few of those which apply to the industry. As a matter of fact, the course which he suggests would be effective only in cases in which the offending firm held a monopoly. How would it be possible to remove the protective duties in. order to punish an offending firm, without, at the same time, punishing other firms which might be innocent?
– If the Minister Would declare his opposition to the practice adopted by this foreign firm I am convinced that it would change its tactics.
– That is another matter, but the honorable member advocated the removal of protective duties, and to do that would be to punish those with whom he has no quarrel. The duties cover the control machinery, the cage lift, wire rope and motors, and I could give a list of a dozen firms which manufacture those articles. I do not wish to be too hard on the honorable member, but his proposal seems to me to be a half-baked one. It would really involve using the tariff as a political weapon, instead of its being an economic instrument designed for the assistance of industry.
In September, 1933, when the honorable member for West Sydney was leader of a. party independent of the one which has now swallowed it, or which it has swallowed, he enunciated a policy for the disci plining of employers in their dealings with their employees. Here are some of the proposals he advocated -
Thecompulsory signing ofa labour convention by concerns benefiting by the tariff, such convention to provide for -
– How does that apply to the present case?
– It, is all in line with what has been suggested. What a state of chaos would prevail in industry if there were held over the heads of employer, whether they were guilty or not, the con- stant threat that, if industrial trouble broke out, the tariff protection under which they were working might he removed! It is proposed that, because a strike has occurred in the factory of one firm, the protective duties should be taken off, irrespective of the merits of the dispute. The tariff is a pretty complicated instrument as it is, seeing that it has to take cognizance of varying exchange rates, and the peculiarities of every industry; but if industrial domination of the kind contained in this new proposal were to be given effect, there would be absolute chaos, and injury would he done, not only to the employers, but also to the employees. The honorable member complained about foreign firms that enter this country to carry on business. Does he object to foreign firms setting up factories in Australia, and providing employment for Australian workmen? Only three weeks ago I opened a factory in Essendon built by a foreign company which had come to Australia because under the Ottawa agreement foreign duties had been raised and there 120 Australian workers will be employed. Naturally, we prefer British firms to establish factories here, but we should also welcome foreign firms which are prepared to provide employment. It has been said that under the new speeding-up system introduced by the firm of which he complains, eleven men out of a staff of 45 have been thrown out of employment. That is deplorable, if true; but when a little while ago honorable members opposite were invited to support a reduction of duties to prevent a monopoly from exploiting thousands of consumers, they declined to do so. The honorable member spoke of the practice introduced by this firm in which one man stands behind another in order to watch how he picks up a spanner. I cannot conceive of any firm paying wages to the watchman in such circumstances. A little while ago, the honorable member for Werriwa (Mr. Lazzarini), in accordance with the Labour party’s New Protection policy, asked that the protective duty be removed from an important industry, because he alleged that one firm was not treating its workers properly.
– I must again ask the Minister to refrain from referring to what was said in a previous debate.
– It would not be practicable to remove the duty designed to protect the whole industry merely because of industrial trouble within a section of it. There are in existence wages boards, and State and Federal Arbitration Courts, which decide rates of pay, and the conditions which shall obtain in industry. In addition, there are shop stewards and union secretaries, who watch the interests of the men. I know that much good is also achieved at roundtable conferences between employers and employees, and it is in this way that differences of this kind should be settled.
– In this case, the employers would not meet us.
– If that is so, I am convinced that such a firm will not prosper.
– I should not have taken part in this debate except for the remarks of the Minister for Repatriation (Mr. Hughes), who exaggerates the weakness of this Parliament. He referred to previous attempts to extend the legislative power of the Commonwealth Parliament, but he forgets that those attempts were made at a time when there prevailed the federal principle of construing the Constitution. The principle adopted by the High Court for the first fifteen or sixteen years after its inauguration was that the general language in which power was given to the Commonwealth Parliament must be interpreted in such a way as to conserve the reserved powers of the States. Under that principle of interpretation various decisions were given, the relevant one being that in Barger’s case which held that it was impossible for this Parliament to regulate the conditions of workers in a protected industry. That principle was over-ruled in the Engineers’ case, in which it was established that the powers of the Commonwealth Parliament were to be given effect in their full meaning, without any care for preserving the residual or reserved powers of the States. It now appears that this Parliament’has power to regulate conditions of employment in protected industries, and I think that it should do so. It is important that there should be a general overhaul of Commonwealth legislative power and its possibilities in the light of the Engineers’ case. The older mel among us entertain a natural assumption that the principles on which the High Court acted for so long are still governing principles, and that what was said prior to the Engineers’ Case still holds good. That, however, is a wrong assumption. We should examine Commonwealth powers now, and say to what extent they can be pushed. There seems to be a feeling in Australia that it is a disgraceful thing for a government or a parliament to have its legislation declared unconstitutional by the High Court. In tlie United States of America there is no such feeling. Take, for instance, the federal legislation designed to control the employment of child labour. Several attempts were made to legislate in this direction. A law was passed by the legislature, but was declared unconstitutional by the Supreme Court. Congress, however, did npt rest there. It renewed the attempt, and sent the measure up again for consideration by the Supreme Court. Again, it was declared unconstitutional, and again the measure was passed, only to be declared unconstitutional once more, but each time the declaration was made by a dwindling majority of the Supreme Court. Now, after all those setbacks, there is in the United States of America a law for the federal control of child labour, and the prevention of the carriage, in interstate commerce, of goods produced by child labour. Another illustration is this: In 1926 the Government proposed to the people a wide extension of the power over labour in the essential services. It said that nothing could be done to control labour in essential services without this power. But the people refused to give it, and as the result the Government explored every possible evenue open to it, and by passing the Crimes Act and an amending arbitration act, Ministers exercised a power much greater than they previously exercised - actually a power that they had declared they could not exercise.
I do not think the answer given by the Minister for Repatriation should satisfy this House. I believe that the request by the honorable member for West Sydney (Mr. Beasley), that the Government should, if necessary, appoint a select committee, is a. wise one, capable of extension in other important directions. The Commonwealth Government should overhaul judicial decisions given on the powers of the Commonwealth, in an endeavour to discover what powers it actually has. I believe, with the honorable member for Parramatta (Sir Frederick Stewart), that this Parliament should be vested with complete legislative powers. I do so because I want an intelligible system of government for this country, and I do not think the consummation of that ideal would be prejudiced by using to the full powers which this Commonwealth Parliament already possesses.
– I do not think that the attitude shown by the Minister (Mr. Hughes) in his speech is one that should be taken up by a member of any self-respecting government in a matter such as this. His attitude was that the Constitution would not permit of such action as was suggested by the honorable member for West Sydney (Mr. Beasley). The Constitution is continually being dragged out as being a hindrance to progressive action sought by this party. Honorable Ministers say that what we suggest cannot be done because the Constitution will not allow it to be done. I have very vivid recollections of the Constitution being used in this way on previous occasions. However, when the late Mr. T. J. Ryan represented West Sydney in this chamber, ho informed honorable gentlemen on the Government side of the House that the Privy Council had told him on previous occasions that it was not the Constitution that prevented certain action being taken, but that the trouble was the faulty construction of the legislation which had. been brought into Parliament. I should prefer the clear thinking of Mr. T. J. Ryan on constitutional matters to that of the Minister (Mr. Hughes), who is representing the Acting Attorney-General in this chamber. Compared with Mr. Ryan, the Minister, on such matters, is as a schoolboy is to a university student. With the honorable member for Bourke (Mr. Blackburn), I do not think that the constitutional position in these matters has been decided properly.
Bad as were the remarks of the Minister for Repatriation, those of the Minister for Trade and Customs (Mr. “White) were worse. I think, in his speech, he put up the most futile effort he has yet achieved. It is characteristic of the honorable gentleman that he will generally misrepresent the facts when he wants to bolster up an argument. He tried to persuade the House that the honorable member for West Sydney is opposed to the investment of foreign capital in industry in Australia. In that he excelled himself in misrepresentation.
– I resent that, and ask for its withdrawal.
-The honorable member for Werriwa should know it is disorderly to accuse a Minister of misrepresentation.
– I withdraw the remark; but the Minister did say that the honorable member for West Sydney was opposed to the investment of foreign capital in Australian industry. The honorable member for West ‘Sydney tried to contradict the Minister. He explained that, when the circumstances are akin to those now brought under notice, when the industrial system of Australia is threatened, the Labour party will do everything in its power to prevent such a company as this one from foisting on this country insidious industrial conditions. In the present instance, it is a small company which is involved, but, if it gets its way, the system it is attempting to foster will be adopted by other firms and will spread throughout the country as it has spread in America. It will become interwoven in the industrial fabric of the Commonwealth. It will mean the complete destruction of the health of the workers in industry, and have a definite lowering effect on the expectation of life of the artisans. It is a system which originated in the United States of America, where it is now extensively used. The United States of America is the one highly industrialized country in the world where it is an open shop for the boss, and where there is no interference by government in industrial affairs. The leaders of in dustry are pre-eminent in America. President Roosevelt has made some changes for the benefit of the workers, but, until his advent there was no legislation of any kind to curtail the predatory instincts of the employing class. The system instituted here by WaygoodOtis and other systems of a similar character have grown up unchecked in the United States, whereas they could not grow up in countries where legislators have been accustomed to interferewhen conditions of employment press toohard on workers. If it is not the job of the Commonwealth Parliament tocheck at its very birth this movement,, which will be a very definite danger toindustrial development of the country,, then I do not know why this national Parliament exists. The powers of this Parliament should be used in every possible way to protect the workers from exploitation. The Minister for Trade and Customs has heard the statements made by the honorable member for Cook (Mr. Garden) and the. honorable member for West Sydney ‘ (Mr. Beasley), but he says that he . does not know if the people mentioned have had any wrong done to them. Of course not! He has the wrong = attitude of mind ! With him, the boss can do no wrong, for he is one of them. No doubt he would like to have this system adopted in industry over which he has some control. As it appeals to him, he does not want to check it.
I have read a good deal about industrial conditions in the United States , of America. For instance, I have read the history of the development from its inception of the American Steel Trust. Many authentic publications dealing with the way in which labour is exploited in that country have been studied by me, but I was never so astounded by them as I was by the description given by the honorable member for Cook of the process of labour in the company mentioned. I should have thought that in the present civilization no one would be allowed even to think about such a thing, much less apply it in industry. If men are to be worked by the clock with overseers standing over them with stop-watches in their hands watching their every movement, it is worse, from the Christian view-point, than anything that permeated pagan civilization. The very atmosphere of such employment is harmful. The man who does the fastest work gets a bonus, but the man who is below the average is told either to speed up or to get out. One does not need to have much imagination, medical knowledge or knowledge of the human frame to realize what that system will mean to the workers.
– The system is used in Russia.
– But in Russia they have a 35-hour, five-day week.
– And no Sunday.
– We are not arguing about Sunday now. If in Russia they are attempting to wipe out Christianity, it is not an economic movement which affects the present issue. The honorable gentleman will try to bring in the Christian view-point if it appeals to him, and to oppose it when it suits him. If this new system of making men work is not tearing the Christian code, I do not know what it is.
– Order. The honorable member has exhausted his time.
Question - That the House do now adjourn - put.
The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Majority . . 7
Question so resolved in the negative.
Sitting suspended from 1.46 to 2.15 p.m.
The following papers were presented : -
Northern Territory - Report on Administration for year 1934-35.
Ordered to be printed.
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - No. 2 of 1936 - Fourth Division Officers’ Association of the Trade and Customs Department; and Commonwealth Public Service Artisans’ Association.
Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1 936 - No. 14 - Companies (Liquidation).
In committee (Consideration resumed from the 30th April (vide page 1090) ).
Clause 78- (1.) The followingshall, 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: -
a public authority engaged in research into the causes, prevention or cure of disease in human beings, animals or plants, where the gift is for such research;
a public university;
Calls on shares in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, rare minerals or oil, or in any company carrying on afforestation in Australia as its principal business.
Upon which Mr. Hutchinson had moved by way of amendment -
That after the word “ authority “, subparagraph (iv), paragraph (a), sub-clause (1.), the words “or a public institution” be inserted.
– I do not wish to reiterate anything that I said last night in moving my amendment, beyond remarking that any public institution, apart altogether from whether it be a government or semi-governmental authority, should beentitled to consideration in respect of its research work into the cause, prevention or cure of diseases in human beings, animals or plants. I have in mind the Pastoral Research Trust, recently formed to investigate animal diseases and the eradication of noxious weeds and so on. Such institutions should be encouraged. The Council for Scientific and Industrial Research has clone valuable work for the community in the past, and I have no hesitation in saying that similar institutions that may be established will also perform work of incalculable value to the community. I made some reference last night to the cancer research work being carried on in the United States of America. It may be that similar work will be put in hand in Australia if funds are made available, and gifts made to a public institution for such a purpose should be allowable deductions for income tax purposes. I should like to know from the Treasurer (Mr. Casey) whether my amendment is acceptable to the Government.
– The Government has given serious consideration to the proposal of the honorable member for Indi (Mr. Hutchinson) and it recognizes the value to the whole community of the work performed by such institutions as he has referred to. I am prepared to move an amendment similar in intention to that of the honorable member, by adding the following words to the paragraph : “ or a public institution engaged solely in such research “, if the honorable member would obtain leave to withdraw his amendment.
– I ask leave to withdraw my amendment.
Amendment - by leave - withdrawn.
– I thank the honorable member for Indi for his courtesy. I now move -
That at the end of sub- paragraph iv., the following words be added: - “or a public institution engaged solely in such research “.
Amendment agreed to.
.- I move-
That at the end ofsub-paragraph ( v ) , paragraph(a) the following words be added : - “or a public fund for the establishment of a public university “.
The clause, as drafted, covers the established universities of Sydney, Melbourne, Brisbane, Adelaide, Hobart and Perth, but no provision has been made to cover contributions to a fund for the purpose of establishing a new university. It is hoped that before long a university will be established in Canberra. It is unthinkable that the national capital should not have its national university in due course. A strong movement is already on foot in Canberra to establish a university here. Deputations representative of the various educational institutions of Canberra, and also other institutions in various States of the Commonwealth, have placed a practical scheme before the Prime Minister for the establishment of a university at Canberra. In the, meantime, a university college affiliated with the Melbourne University is providing facilities for the young men and women of Canberra to receive a university education, and even to obtain degrees of various kinds. This college is rendering an invaluable public service. One of the aims of theCommonwealth Government is, of course, to develop a highly educated public service. The proposed university for Canberra will not duplicate the work of the State capitals, but will concentrate on other specified branches of learning. It is suggested, for instance, that the Canberra University should engage in research in connexion with pacific relations. The Council for Scientific and Industrial Research is already doing fine work in Canberra, and so is the Institute of Anatomy. We also have several highly-developed secondary schools here, including the Telopea Park School and the Church of England Boys Grammar School, and the Church of England Girls Grammar School. These are all qualifying young students for university training. It is expected that the Duntroon Military College will be re-established in Canberra next year. The educational standards of the Duntroon College arc very high and approach those of the universities in languages, mathematics, and certain other branches of study. Seeing that gifts to established universities are to be allowable deductions, I submit that it is only reasonable to allow the deduction of gifts to funds for the establishment of a University at Canberra. The universities of Sydney, Melbourne and Adelaide, in particular, have received large gifts and benefactions from public spirited citizens, andit is hoped that the wealthy people of Australia, who are inspired with a strong national sentiment, will show the same liberality towards the university which it is proposed to establish at Canberra.
– I appreciate the argument of the honorable member for Darling Downs (Sir Littleton Groom). The Government is willing to accept his amendment on the understanding ‘that it is without prejudice to its general views on the subject of the proposed university at Canberra.
Amendment agreed to.
.- I wish to offer an objection to the inclusion of paragraph d in sub-clause1 of this clause, which reads as follows: -
– It is not a new provision.
– But it is a very bad one.
– Such payments are an outlay of capital.
– I do not think so. In my opinion they are a reinvestment of capital by means of which the taxpayer expects to obtain a larger income. Investments of this kind are very close, in many cases, to fraud and trickery. A man may invest his money on a horse in a horse race, and lose it, and it is called a gamble; but investments in mining shows are often, to a large extent, a gamble. Calls on shares in a mining company represent an investment by members of the public who are not ordinarily engaged in the business of mining. People invest in mining shares merely as a speculation. If the Government wishes to encourage prospecting for precious metals, it should adopt another line of action; it should not encourage speculation. I suppose that if a man invests £1,000 in a mining venture and loses it he will again make a deduction in the following year’s return.
– There is a provision in the bill to prevent double deductions.
– Clever accountants, it is well known, can show taxpayers how to evade many of the provisions of this legislation.
– But the commissioner has a very sharp nose.
– When the average private individual makes a profit out of mining shares, and reinvests the profit in another undertaking, he is not engaged in his ordinary business. It is wrong in principle to allow those who invest their profits in gold-mining enterprises to escape taxation. This is a lop-sided way of developing the country. There arc far more useful ways of doing this than encouraging speculation in gold mining.
– The concessions given under this clause have been included in the act for a considerable time. They were introduced by a previous government to encourage mining, and principally gold mining. Of course, this is a highly speculative form of investment.
– And sometimes highly fraudulent.
– We are not now dealing with the matter from that aspect.
– Why allow the deduction before the money is lost?
– As I have said, these are not new provisions. The Government has been doing all it can, in conjunction with theState authorities, to encourage mining, particularly gold mining. We have devoted a considerable sum of money by way of grants to the States, which they administer and pay out in a manner best calculated to provide prospecting work in the country. The men engaged have a useful occupation, and all the States concerned to any extent in gold mining, consider that probably no other grant has been more productive of good than this has been.
– Chasing rainbows!
– Many thousands of men have obtained bread and meat through being given prospecting work. The chance of gain always attracts the investing public, and the provision referred to by the honorable member for Werriwa (Mr. Lazzarini) furnishes a not inconsiderable inducement to gold mining enterprise. When the various contentious clauses received preliminary consideration, the States concerned in gold mining were unanimously of the opinion that concessions such as those mentioned in this clause should be retained in their respective acts.
.- The general character of this clause now differs from the provision of the act. Previously, all gifts and calls on mining or other shares had to be met out of the assessable income for the year before they could be deducted. The explanatory memorandum points out that the present test that payment must be made out of the assessable income for the year is removed by the bill, in view of the comment by theRoyal Commission on Taxation that a gift to a charity is not usually decided upon with any immediate reference to the question whether assessable income, exempt income or capital funds, are to be used for that purpose. Surely, gifts for philanthropic and educational purposes fall within an entirely different category from calls on mining shares, or shares in other corporations, including an afforestation company.Regarding calls on shares in a mining company, the following footnote appears in the memorandum : -
In the main, the whole of these concessions in respect of gifts for philanthropic purposes are a violation of sound taxation principles, and I would object to them but for the fact that they have been accepted in principle for many years. It does not appear to serve any good purpose to alter those principles now in connexion with this clause. Many wealthy men have achieved distinction in the community by making handsome bequests of, say, £5,000 or £10,000 to some charitable or educational object, when, as a matter of fact, practically 40 per cent., of that sum has been contributed by the Commonwealth Government, in that the deduction of these large sums from their assessable income for the year has greatly reduced their income tax. Perhaps these provisions encourage the contribution by taxpayers to philanthropic bodies, but, by taking advantage of this concession, they pay far less in tax than they would otherwise have to contribute.
If this were a bill for an original act, I should object to the specific concession in favour of investments in mining enterprises.For some years, however, we have allowed this deduction. It appears that one of the reasons why mining attracts capital is that it enjoys this advantage in respect of income tax as compared with a textile, cement or other company. It is perfectly true that calls paid on mining shares are invariably indicative of the fact that the company is not operating profitably. All too often when calls are levied those who pay them are not the promoters associated with the formation of the company. By that time they have usually disposed of their holdings. This provision appears to be wrong, for the reason that, if an investor who holds shares in a company which is or is not returning dividends, is called uponto pay calls he may sell one lot of stock to obtain the money with which to pay calls on the other. In effect, he is actually selling capital, out of the proceeds of which he pays these calls on other investments. Actually, he does not touch his income for the year. Yet, under this clause, he is permitted to deduct from his assessable income the amount paid in meeting these calls. Another aspect which appears to be important is that, if an investor pays in full for scrip in a mining company at the time of taking up the stock, he is entitled to no deduction at all from his assessable income in respect of the cost of those shares. It is an anomaly which indicates again the trouble we experience when deductions of this description are allowed. If the paid-up value of the shares is 5s., and the investor pays the whole of the 5s., he is not entitled to make a deduction from his assessable income; but, if the shares are sold on the basis of1s. on application,1s. on allotment, leaving 3s. remaining to be called up, he is permitted to deduct that 3s. when it is subsequently called up, but cannot deduct the 2s. I agree with the honorable member for Werriwa (Mr. Lazzarini) that this discrimination, as between companies, appears to be unfair. I am, however, faced with the reality that this allowance, except for the extension which it now gives to the deduction regardless of the source from which the income is derived, reflects the procedure which Parliament has authorized over a period of years.
– There has certainly been a slight alteration of the extent of the amount of assessable income that can he absorbed in this way - I think it can be taken to be a slight contraction of the concession than otherwise - but I do not think it matters in the least, as the royal commission has pointed out, whether the money in theory is capital or income. The honorable member for Werriwa (Mr. Lazzarini) has voiced the fear that a man might be entitled to such a large deduction from his assessable income in any one year that he would be able to carry the balance over into the next year, and so get double credit for the same concession.
– Thatwas only a minor objection. The Treasurer has not replied to my main objection.
– I think, in my earlier speech, I satisfactorily dealt with the points raised by the honorable member. The contention which the honorable member has just made however,is impossible, because, under the construction of this clause, the only amount allowable is an amount equal to the net assessable income, so that a man can only take into account assessable deductions and deductions for mining calls to the extent that the total is at any rate not greater than his net assessable income. He cannot carry forward to the income of the succeeding year a loss made up of deductions, statutory exemptions, and concessional deductions.
– He might manage to have no tax to pay in a particular assessable year.
Mr.CASEY. - Yes, that is possible; but this provision contains no extension of the concession.
Mr.NOCK (Riverina) [2.51]. - I agree with what has been said by the Leader of the Opposition (Mr. Curtin), and the honorable member for Werriwa (Mr. Lazzarini). The duplication of the allowance mentioned by the Treasurer (Mr. Casey) is quite possible if an investor is allowed to deduct an investment from one year’s income, and next year makes a loss through the company in which he has invested going into liquidation. He loses all the money he has invested in that company, including calls.
– That is not a deduction.
– I agree, also, with the statement made by the Leader of the Opposition, that this is rather a mixed concession. A person who makes his application for shares, and pays instalments, and subsequently sells the shares to some one else, is on an entirely different footing. It is unwise for this provision to be included in the bill at all. The proper time to make a concession or an allowance for a deduction is at such time as there happens to be a loss in connexion with the investment, either by the liquidation of the company or by the sale of the shares at a reduced price.
– The honorable member would not describe clause 75 as providing a mixed concession.
– This is more complicated. In this case there is discrimination between certain portions of similar money invested for the same purpose. Money paid on application and allotment of shares is exactly the same as money paid for calls, but whereas a deduction is allowable in the case of the latter, no such provision is made in respect of the former. The clause, as it stands, provides for the exemption of the whole of the money invested if it is paid in calls, regardless of the fact that no loss has occurred. Quite a lot of investments in mining companies prove profitable, and the dividends from such investments are included in the income-tax return as income.
– Not in respect of investments in gold-mining companies.
– But there are other enterprises. An exemption has been provided for money which has been lost by the subsequent sale of shares at a loss, or money lost following the liquidation of a company. But the investor who has made a profit is placed in the same position; both have had the benefit of the exemption, even though one has lost and the other has made a profit. Circumstances like that suggest that this clause is not a wise one.
– The honorable member for Werriwa (Mr. Lazzarini) has referred to the manner in which the shares of mining companies are placed before the public, and the swindling which has been going on in connexion with them. I agree substantially with what the honorable member has said, but this is a matter which should really be dealt with by the passing of a Commonwealth companies act. Honorable members are continually asking that this Parliament should have absolute powers. Although the Commonwealth has the power to deal with company law, marriage law, and laws concerning weights and measures, it has not exercised that power. Yet it is always interfering in matters with which it has no concern. A sound company law would prevent much of the swindling that has taken place during the last few years, and is urgently needed. If such a law were placed onthe statute-book, many of the complaints now made would be obviated. Regarding the clause itself, I know perfectly well why this provision was inserted. The mining industry was passing through a bad time, and this exemption was granted to give an incentive to mining operations in
Australia. We must realize that mining is the most speculative of all industries, and there is no doubt that legislation governing it has been most restrictive. The formation of no-liability companies is always an inducement to people to invest money in mining ventures. Although it would be far better if we had limited, instead of no-liability, companies, it is a fact that the formation of no-liability companies acts as an inducement to people to invest in mining companies, because they pay small sums on application and allotment of the shares,, and the balance in calls at different intervals, and it depends so much on the prospects of the proposition whether those calls will ever have to be paid.
I was Minister for Mines in Western Australia for nine years, and I always contended that for every man employed directly in gold-mining, there were five others indirectly employed. Four years ago there were 4,800 miners employed in Western Australia; to-day, the number is just under 10,000.
– Directly employed?
– Yes. In addition, there are about 2,000 men engaged in prospecting. I believe that Western Australia would be practically bankrupt if it were not for the wonderful fillip given to gold-mining in that State.
– Tattersalls consultations have had a stimulating effect on Tasmania.
– The 10,000 men directly employed in mining operations in Western Australia receive on the average about £6 a week, and with a large sum of money which is invested in’ mining operations and machinery, there is a weekly expenditure of some £70,000 to £80,000, which vitalizes enormously the trade of theState. The development of the mining industry in all the States has been remarkable. I am quite satisfied with the provision made in this clause, because it will act as an inducement to many people to pay calls on mining stock when they might otherwise be unwilling to do so. There is just as much justification for the insertion of this exemption as there is for many other exemptions which appearin the bill, and have not been criticized. I repeat that I would like to see Commonwealth legislation, making provision for the protection of the investing public, placed on the statute-book for the control of companies.
.- The honorable member for Swan (Mr. Gregory) introduced his observations on this subject by a little homily upon the wisdom of this Parliament passing a wise and well-considered companies law. As ito that subject, I shall not try the patience of honorable members beyond rejoining that the party of which I am a member will welcome any assistance from the honorable member in so removing the shackles that press oh this Parliament as to enable it to legislate freely and confidently in matters of that kind.
– Certain power already exists. The honorable member wants also industrial power.
– The Commonwealth has disputed and contested power in regard to a number of matters.
The proposal contained in this clause illustrates very well what a fetish has been made, and how disastrously, of gold and gold-hunting. My .view has been well expressed by the honorable member for Werriwa (Mr. Lazzarini) - that human life has been squandered and human effort demoralized, probably to a much greater extent by the pursuit of gold than in any other occupation. It is perfectly true that gold has an intrinsic value, limited, as we all know, in character, and that the pursuit of it, as of other speculative enterprise, has the effect of providing employment both directly and indirectly.
– The export of £7,000,000 worth of gold annually is very useful.
– I ventured to interject while the honorable gentleman was speaking, that the same stimulus as has been given to the well-being of Western Australia by gold-hunters has been given to the progressive little State of Tasmania by the existence of Tattersalls. Doubtless a certain amount of employment has been provided by virtue’ of the operations of different kinds of “go-getters “, who have established companies to exploit either real or imaginary forests, and have taken advantage of human credulity by various other methods. The public mind has been demoralized by the chasing of shadows or, as I better expressed it by interjection, by the chasing of rainbows in the past. If we set off against the gain which this nation or the world has had from its mining enterprises, the wastage of human life, and the degeneration of humanity in the hectic pursuit of this precious metal, I think it will be found that the balance is greatly in favour of the view that the less we spend on gold-mining the better for humanity as a whole. .
– Yet the Government of which the honorable gentleman was a member introduced a gold bounty!
– The honorable member for Wakefield (Mr. Hawker), with characteristic political outlook, recalls the fact that in the days of that capitalistically engineered period known as the depression, it was thought wise, even by the ‘Government of which I was a member, to stimulate the search for gold. He submits that as an argument in favour of the fundamental soundness of this proposal. Whether or not it has been embedded in our income tax legislation for a period of years, I hold and have always held the view that it is indefensible.
– The honorable gentleman and his colleagues had two years in which to wipe it out.
– It was not then wiped out, and probably will not be wiped out now. I am not even proposing to press the matter to a division. But inasmuch as it arises for discussion, I am endeavouring to assert, as I have been prepared to assert all my life, that as a principle of taxation it is unsound. I am impressed by the view of my leader (Mr. Curtin) that it does not necessarily follow that we can hope to make ideal an income tax bill which is not ideal, especially as an Opposition. But for my part I should not like the proposition to go unchallenged that there is something sacrosanct about the investment of money in the pursuit of gold, which does not apply to speculation on horse-racing, and to other classes of speculation which from time immemorial have lured men into the wasting of their substance, and great distress of mind. There I leave the matter.
.– With a great deal of what the honorable member for Batman (Mr. Brennan) has said concerning the fundamental loss, on balance, occasioned by the human fascination for the search for gold, I think all honorable members must agree. But there should be on record a statement of the perfectly sound principle which underlies the placing of the taxation of high speculative businesses on a different basis from that adopted in regard to what might be called operating businesses, businesses upon which a certain annual expenditure is necessary and from which, if the management is good and the general conditions remain sound and stable, a certain regular return may be expected. In the business of bookmaking, or the search for gold, the profit is in occasional windfalls. L consider that it is more appropriate to make an allowance with respect to calls, which represent money that is spent in the provision of employment and the development of a mine, than with respect to expenses payable on liquidation or sales, which is much more liable to encourage what may be called stock exchange speculation than the speculative search that provides work and has done so much to help Western Australia out of the worst of the depression, and has contributed materially to the provision of employment in other States. Honorable members opposite who object ro these principles, not only failed to remove them when they had the opportunity to do so, but even went out of their way to give further encouragement to this possibly sterile fascination. I do not think that the gold bounty was a good proposition. But in permitting the industry to have freedom from certain imposts during a period of depression, they were fundamentally sound. There are times when people are hesitant about spending money, and money does not circulate freely. The digging of holes in the ground, out of which very little gold may come, is a means whereby work may be provided and money circulated at the expense, not of the public, but of those who engage in the enterprise, and otherwise would probably indulge in some other form of speculation. Those are the principles upon which not only goldmining, but also bookmaking and other speculative enterprises, are taxed. There fore, there is no good reason why an attempt should be made to alter the basis of such taxation.
– I am inclined to wonder whether it would not be wise to agree with the suggestion made inferentially by the honorable member for Wakefield (Mr. Hawker), by rejecting the clause. I understand that, generally, the argument of the Treasurer (Mr. Casey) and others has been that these concessions will assist the development of gold-mining. The assistance given to such development during practically the last ten years has had the object largely of helping people to obtain work. Do these concessions in regard to calls help in that direction?
– The governments of the States, which are more closely in touch with the matter than is the Commonwealth, assure me that they do.
– As a junior clerk in the office of a firm of stock and share brokers, one of my duties was to ring a prospective client and urge him to buy, say, “ Silver Queens “. Before the sound of the > telephone bell had ceased to be heard, I would be instructed to ring another client and urge him to sell “ Silver Queens “ and the broker got the commission in both cases. The question is, whether those who pay calls are conducting a class of operations which is associated with the production of gold. Scores of companies which call up capital from time to time do not carry on practical operations. The money would be better called up and spent in developmental operations. What is to happen to the men who really find gold, such as those at Tennant’s Creek, who discovered a huge deposit which the Government sent Dr. Woolnough to examine, and have been sitting down on it for the last three or four years? They do not want to leave their leases, but they cannot operate them because of the absence of the necessary machinery. They are waiting for the Government to assist in their development. Everybody knows that the gold is there; that has been proved. At last the stage has been reached at which the big companies who wish to obtain possession of the leases have succeeded in reducing these men to the verge of starvation.
They cannot wait any longer for a battery and a water supply to enable them to produce the gold, and have to accept prices which they are sure are not reasonable and fair. That is why they are worrying the Government to-day, and are talking of sending a deputation to Canberra by road. The money which the Government refrains from collecting from persons who buy and sell shares would be better spent if it were devoted to the erection of a battery and the provision of a water supply for the benefit of these men who are conducting companies which cannot reach the stage of development.
– The debate has practically revolved round the question whether this exemption should be allowed in respect of gold. But the clause contains other provisions which, I think, the committee cannot afford to overlook. For example, the discovery of certain rare metals is of the utmost importance, not only to the Commonwealth, but also to the British Empire. They are not found in large quantities anywhere, and whether they exist in the Commonwealth in even payable quantities has not yet been demonstrated. Any company which is prepared to risk its money in prospecting for such rare metals as osmiridium, vanadium and uranium should receive encouragement from this Parliament. The same applies to those persons who are prepared to risk money in searching for flow oil in Australia. It stands to reason that, should an oil prospecting company be successful in discovering oil in payable quantities, dividends would be paid, and the Treasury would benefit from the taxation imposed on them. I cannot understand why any members of this House should desire to place impediments in the way of those engaged in afforestation enterprises. Australia is, of all countries in the world, most notoriously deficient in timber. The growing of timber is a slow process, even the quickest-growing trees requiring almost 30 years to mature. Those who invest money in afforestation companies cannot expect a return on their outlay until late in life. When the forests eventually mature, whatever government happens to be in power will benefit from the taxation collected on the incomes of investors.
.- The honorable member for Barker (Mr. Archie Cameron) surely cannot have read the paragraph. He spoke as if the exemption were to be given to those prospecting for metals, but it is evident, from the wording of the paragraph itself, that the exemption is for those engaged in the mining of metals, not the finding of them. The actual words are as follows : -
The following shall be … allowable deductions : -
Calls on shares in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, rare minerals or oil, or in any company carrying on afforestation in Australia as its principal business.
It is evident, therefore, that this provision will be of no assistance to those engaged in prospecting for precious metals of any kind. It will be of use only to the fellow who robs the prospector of his just reward. Everybody knows that, as soon as the prospector finds gold in payable quantities, a company is formed to exploit the discovery.
– The prospectors do not give their discoveries away.
– No, but the honorable member must be familiar with the sorry history of mining in’ this and every other country, a history which records only too often the robbing of the discoverer of gold by those to whom he must turn for assistance in exploiting his discovery. When the Treasurer (Mr. Casey) was speaking a little while ago, some one asked why a deduction should not be allowed if the company eventually went into liquidation, and the money invested in it was lost. The Treasurer shook his head, and somebody else interjected that the money was always lost. That seems to be the general opinion of members of this House, and yet the Treasurer proposes, in this legislation, to encourage the public to put money into ventures in which it is almost certain the money will be lost.
Moreover, there is the possibility that a man may invest money in a company, receiving an allowance in respect of his investment, and then, in two years’ time, when the company goes into liquidation, he may obtain a further deduction in respect of the same money. There is a danger that the way may be opened for fraudulent practice, and there is always enough of that in connexion with any income tax law.
During this discussion,we have heard a great deal about encouraging the poor prospector, just as last night we heard about the need for helping the poor farmer. Some honorable members are prepared to take advantage of the necessitous condition of farmers and prospectors, in order to obtain concessions for wealthy persons or corporations. It must be obvious that the poor prospector is not much concerned over income tax exemptions, nor are those who invest a pound, or sometimes only a few shillings, in a small syndicate to stake a prospector going out to search for gold. Exemption of the small amount thus invested would make no difference to the tax that would have to be paid, but the concession is certainly of use to the big fellow who comes in after the gold has been discovered; who skims the cream off the enterprise, as it were, and who, after the company is formed, takes a majority of the shares, and so manipulates the enterprise as to squeeze out the original discoverer. He then sits back like the fat parasite he is, and draws dividends from the toil, and out of the losses of others. The Treasurer cannot convince me that he is concerned for the welfare of the prospectors and small investors. His real concern is for the big man, the stock exchange manipulator, who contributes so liberally to the Government’s party funds, and who expects to bo reimbursed through legislation of this kind.
– All honorable members are aware that sometimes the prospector, who goes out and finds the gold, is cheated of his due reward, but that has nothing to do with this provision. That can be adjusted in another place, and in another way. In my opinion, if honorable members desire to show their sympathy with those engaged in mining enterprises, they should seek to have a deduction allowed in respect of allotment and application money, rather than on call money, because that is where the bulk of the money goes..
As a rule, calls are made when the show is not paying.
– That is not so.
– In the main, I think it is. It is when a show fails to pay, and further money is required for developmental work, that calls are made. I put the suggestion forward for the consideration of the Treasurer.
.- It may be interesting to review the history of the Mount Morgan mine in Queensland, because it has a bearing on this matter. After the discovery of gold at Mount Morgan, millions of pounds were taken out of the mine, which was then left to be developed by some one else when only the poorer and lower grade ores were left. A small company was formed, which took over the mine, and invested a considerable sum of money in it. At that time, there were about a thousand men at Mount Morgan, all of them practically on the dole. As the result of the operations of the new company, all those men have now got back into the industry, bur. the margin of profit for the company is very small. When the Scullin Government was in power, it was arranged that a bounty of £1 per oz. should be paid on gold in order to encourage prospecting and mining development. That was a generous concession, and some honorable members thought that it would bankrupt the treasury. Fortunately, the price of gold rose, so that the most that was ever paid by way of bounty was 2s. 6d. per oz.
It is true, unfortunately, that the prospector is often cheated of his just reward, but in that he is little worse off than the fanner or wool -grower who is exploited by the middle-man. While the present systems of government and of taxation exist, those actually engaged in an industry must fight for every penny they get out of it. On many Australian gold-fields to-day, costs of production are very heavy, and the miners are carrying on without much official encouragement. On the Tennant’s Creek gold-field, there are about400 men who are appealing to the Commonwealth Government to provide a battery to crush their ore. The Minister’s attitudeis that they can get their ore treated by a battery operated by a gentleman named Aga Khan, an Indian I presume. I understand that private enterprise has three batteries at Tennant’s Creek, but what should be taken into consideration is the cost of crushing, that is the margin between the charge made at the privately-owned battery and what might reasonably be expected to be the charge levied by a State-owned and cooperativelyworked battery. Another reason why the battery should be owned by the Government is provided by the history of the Kidston field in Queensland. There were three privately-owned batteries on that field and the charge for crushing was £2 a ton. When the owners of the batteries were no longer able to get that price for the treatment of the ore they closed down and removed the plant, looking for more profitable fields. After a struggle, the parties concerned were able to induce the State government to erect a battery at the field. The men worked the battery on a co-operative basis, and they made 4 dwts. pay. A payment of 2s. a ton covered not only the crushing operations, but also other preliminary charges, such as the transporting of the ore from the mines to the battery, showing conclusively that in the past the miners had been exploited.
If a government will not come to their aid, the miners have to rely on capital from outside sources. A prospector receiving a couple of pounds a week from the Government may come upon a lowgrade proposition like Wiluna, carrying a few pennyweights a ton. It is not of any use to him without capital, hut, if he can place the ore in the hands of a company willing to operate it as a lowgrade proposition, both he and the company will make something out of it. If, however, financiers know that the Government will take in taxes from 50 to 60 per cent. of the money earned, they will not go into the venture. Mining from a health point of view is not beneficial, but from an economic point of view men must mine. The population of this country was founded on gold-mining, and I hope that nothing will be done to take away from those, at present engaged in the industry, any concession which they now enjoy. Every encouragement should he given to the mining industry.
The Commonwealth Government must make some provision for the men and women engaged in it. I enjoin it not to force them on to the dole ; they have never taken the dole. The small miner is prevented, by costs of machinery and lack of capital, from developing a mine himself; he has to depend on somebody else The futility of his depending on the Government is shown by the example at Tennant’s Creek and other places in this country, where the argument advanced by the Government is that, as mining is a speculative undertaking, it must be careful about putting the people’s money into it.
Clause further verbally amended, and, as amended, agreed to.
The following amounts (in this Act called “the concessional deductions”) shall be allowable deductions where the taxpayer is a resident: -
The sum of fifty pounds in respect of each child who is a resident and is under ‘the age of sixteen years at the beginning of the year of income and is wholly maintained by the taxpayer:
Payments not exceeding fifty pounds in the aggregate made … to any legally qualified medical practitioner, nurse or chemist . . .
– In this clause there is introduced for the first time in the Commonwealth taxation law an allowance of £50 for a wife or husband of the taxpayer who is entirely maintained by the taxpayer. The test of maintenance is when the dependent husband or wife, as the case may be, has less than £50 a year income in his or her own name. All the State governments have had some allowance for a wife, although the allowance has varied very considerably from £35 to £75, and the Commonwealth Government has been the only government up to the present time that has not allowed this concession. It is very glad to be able to do this and come into line with the States, because it will be helpful to a wide range of taxpayers of limited means. It is estimated that the concession will cost the Commonwealth in the present circumstances £320,000 a year. A new principle has been, introduced in the concessional deductions on the recommendation of the royal commission. Hitherto, in certain cases there has been an upper income limit beyond which the concession it not granted. On the recommendation of the royal commission that upper limit has been removed, and in its place a maximum deduction has been fixed.
.- I move -
That after paragraph (b) the following paragraph be inserted - “(ba) Such sum (not exceeding in any case fifty pounds) as the Commissioner is satisfied has been actually paid by the taxpayer during the year of income to or on behalf of any parent, grandparent, brother or sister of the taxpayer or of the spouse of the taxpayer:
Provided that the Commissioner is satisfied that such parent, grandparent, brother or sister is a resident and is wholly maintained by the taxpayer;”.
This clause embodies the principle which is recognized in income tax acts in very many countries, notably France, that the burden of the tax upon the taxpayer ought to take into account the family nature of the income; that is to say, the income should be regarded, not so much as the income of the person who is the actual recipient of it, but as the aggregate income of the persons who are maintained by the recipient. In other words, the amount of taxation of a single person without dependants should be much greater than the tax upon the income of a married man with a large number of dependants. Empirically, we have tried to give effect to that principle in clause 79 by giving family deductions. I propose an extension of that principle by the insertion of a new paragraph - ba. The first point about the proposed paragraph is that the Commissioner is to be the judge. He is to be satisfied that the amount has been paid by the taxpayer, and he is to be satisfied that the relative is wholly maintained by the taxpayer, as well as being a resident in the taxpayer’s house. What I propose is, where the taxpayer maintains a parent, grandparent, brother, or sister of himself or of his wife, and the Commissioner is satisfied that the relative is wholly dependent on him, he shall make an allowance, not exceeding £50 a year, in the case of each person so maintained.
As the result of inquisitorial action of the Pensions Department in the last few years, a number of people have ceased to be invalid and old-age pensioners, and are being maintained by their relatives. It is to be hoped that they will never have to go through, again, the experiences which they have had in the last few years. If a man or a woman is wholly maintaining a parent, grandparent, brother” or sister, he or she should receive an allowance for the meritorious services he or she is performing.
– Could not the honorable member’s amendment be made to cover the dependent children referred to in the amendment of which the honorable member for Hunter has given notice.
– No., The honorable member for Hunter (Mr. James) seeks a much more generous provision than I am making in the case of a parent, grandparent, brother or sister. I am proposing to leave the Commissioner to be satisfied that the parent, grandparent, brother, or sister is wholly dependent on a taxpayer, whereas the allowance proposed by the honorable member for Hunter is obligatory on the Commissioner whether money has been spent on the child dependant or not.
– I desire at this stage to foreshadow an amendment to sub-clause c of clause 79, and its purpose will be to include as deductions dental charges paid during the period of assessable income. I shall move at the appropriate time -
That after the words “ medical practitioner” paragraph (c) the word “dentist” be inserted.
My reason for intending to move this amendment is that, in the past, such a deduction has been allowable under the New South Wales act. The royal commission did not recommend that dental fees should be deductible in the uniform income tax measures, but I believe that it was not recommended for the sole reason that the deduction was not in. vogue in all the States. I feel sure that if the States had it put up to them by the Commonwealth Government they would have agreed to the inclusion of these fees as a concessional deduction. I understand that in the bill introduced in the Legislative Assembly of New South
Wales, it is proposed to include a provision on the lines which I propose should be included in the Commonwealth bill. One can very easily find an explanation why the Government of New South Wales proposes to continue the concession. Dental science is considered to have made such rapid strides since federation that there is now, at the Sydney University, a Chair of Dentistry. It is said that up to 95 per cent, of the cases of arthritis are traced directly or indirectly to dental troubles. It is quite a common occurrence nowadays for a medical practitioner to order an X-ray of a patient who consults him and subsequently to advise the extraction of teeth. This is especially the case in- New South Wales, where a deficiency in the content of the water has caused bad teeth to develop in very many young children. Dental expenditure, therefore, lias become more and more important in the ordinaryfamily budget. I realize that the original intention in introducing this provision in the taxation law, was to meet the expenses of major operations and the like, and not to deal with minor “ medical expenditure. But dental fees are no longer minor matters to the ordinary family. It is no longer possible to go to the apothecary round the corner, and obtain adequate dental treatment. It seems to me that as medical science progresses, we shall find it increasingly necessary to allow deductions to taxpayers in respect of expenses incurred in the maintenance of their health, and that of their families. I therefore ask ‘the Treasurer to give serious consideration to my request.
– I regret that the Government is not able to accept the amendment of the honorable member for Bourke (Mr. Blackburn), nor the foreshadowed amendment of the honorable member for Wentworth (Mr. E. J. Harrison).
I shall deal first with the proposed extension of concessional deductions in respect of the maintenance of dependants. On this point the royal commission made the following remarks : -
We are not prepared to recommend that the expression “ dependant “ should be too liberally construed., but think rather that it should be limited. It is not possible in any scheme to adjust taxation so closely as to take into consideration the purely personal obligations of each taxpayer. We suggest, therefore, that a concession should be allowed only in respect of a female relative wholly maintained by a widower for the purpose of caring for his child or children under sixteen years of age.
The concessional deductions already allowed are considerable, and the extension of them provided for in this bill will involve the Treasury in substantial reductions of revenue. As the royal com mission has pointed out, it is not possible to adjust all the personal relations of taxpayers, so as to deal in absolute equity with them individually. To do so would mean a much more complicated and extensive measure than that now under consideration. The Government is of tho opinion that substantial justice is being done to the taxpayers by the provision now being made.
I point out to the honorable member for Wentworth that the only State government which is at present allowing a deduction in respect of expenses incurred for dental treatment is about to withdraw it. The original intention of the Government in allowing a deduction in respect of medical expenses was to meet the circumstances caused by a sudden calamity in a family which necessitated heavy expenditure for a surgical operation or something of that nature. It was not intended that the half-guinea, guinea, or few guineas expended now and again in doctor’s fees, or the employment of trained nurses should be an allowable deduction. If the Government agreed to the deduction of dental fees, it could nol logically resist a claim for other deductions of the same class.
Motion (by Mr. Casey) proposed -
That the House do now adjourn.
– I wish to bring under the notice of the Government two matters affecting Tasmania.
The first has relation to the conditions under which the amount of £360,000 allocated to Tasmania for farmers’ debt adjustment over a period of three years is being distributed. It is proposed to allow 7s. 6d. in the £1 to meet farmers’ debts. The amount is .to be made available interest-free, but the difficulty is that creditors object to making a substantial concession if the amount is to be regarded as a loan. It is requested that it should be a free “gift. I have had it put to me by a responsible Minister of the Crown in Tasmania that difficulties have been created by the fact that this money is being made available as an interest-free loan and not as a gift. If it were a gift the farmers would get the immediate benefit of the money. I urge the Treasurer to look into the whole subject.
The other matter to which I direct attention has relation to a proposal which emanated from a forestry conference held in Canberra last year to the effect that the Commonwealth Government should make available to the States a certain amount of money to enable them to put in hand an afforestation plan spread over a period of three years, especially for the purpose of providing employment and training in forestry for youths. Subsequently, the proposal was amended to cover only one year. I am anxious for the 1 Government to intimate what it intends to do in respect of the other two years of the original threeyear plan. Obviously, if no assurance of continuity is given, the youths that have been employed will very shortly be out of work; and even if the plan is reapplied at a later date, their continuity of service and training will have been broken. I urge the Government to make a definite statement on this point so that the State Governments will know where they stand. It is, of course, highly desirable that these youths be kept in constant employment, but that will not be possible unless the State Governments are assured of some continuity of policy by the Commonwealth Government.
.- I wish to bring under the notice of the Government a matter that needs some attention. On Thursday, the 27th February, 1936, I as usual, went round and shook hands with all my friends in- the House, and in the afternoon, while I was lying down in the Labour room, Mr. F. Green-
– I call attention to the state of the House.
There being no quorum present,
Sir. Speaker adjourned the Rouse at 4 p.m
The following answers to questions were circulated: -
d asked the Acting Minister for Commerce, upon notice^ -
Is the money recently .provided to assist the wheat industry .being distributed, and when !b the distribution likely to take place in the State of Victoria!
– Yes. The Commonwealth has approved of the Victorian scheme of distribution, and funds will be made available to that. State on application. The State must first notify the Commonwealth of the name of the prescribed authority which will distribute the money.
Japanese Sampans in Australian Waters
n asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
Beef Exports to England.
Mr.Riordan asked the Acting Minister for Commerce, upon notice -
y. - The answers to the honorable member’s questions are as follows : - 1.Five hundred and sixty-eight thousand hundredweights.
Education : Grants to States.
Mr.Curtin asked the Treasurer, upon notice -
Will he inform the House of the decision arrived at by the Government in connexion with the requests of the recent conference of Ministers for Education regarding the allocation of certain grants to the various States, and will he inform the House of the amount allotted to each State?
y. -No decision has yet been arrived at in connexion with the matter, which will probably be discussed at the next conference of Commonwealth and State Ministers.
y asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 1 May 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360501_reps_14_150/>.