House of Representatives
25 September 1936

14th Parliament · 1st Session



Mr. Speaker (Hon.G. J. Bell) took thech air at 10.30 a.m., and read prayers.

page 563

QUESTION

LEAGUE OF NATIONS

Strengthening of Effective Securities - Position ofabyssinia - Australia’s Representation.

Sir LITTLETON GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Last week the Prime Minister stated that a sub-committee of Cabinet was considering certain proposals in pursuance of a resolution passed by theAssembly of the League of Nations in regard to the strengthening of effective securities under the Covenant of the League. “Will the Minister representing the Minister for External Affairs inform the House as to whether Cabinet has yet dealt with the matter? If so,what instructions have been issued defining the stand to be taken by Australia at the League of Nations ?

Mr CASEY:
Treasurer · CORIO, VICTORIA · UAP

– Tentative conclusions have been arrived at by the Government, but I regret that I have no information that” I can give to the House at this stage.

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– Will the Minister representing the Minister for External Affairs inform me how the Australian delegate at Geneva voted on the proposal that Abyssinia should retain its seat at the League Council meeting? Was the subject first referred to the Commonwealth Government, and if so, was any instruction given to the Government’s delegate? This subject is of great importance.

Mr CASEY:

– I have not the least idea how the Commonwealth delegate voted. No instruction was given to him.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Has the attention of the Minister representing the Minister for External Affairs been drawn to a press report that, in the election of officers for the Council of the League of Nations, Mr. S. M. Bruce received only one vote out of 45 recorded ? Is he able to inform the House whether Mr. Bruce voted for himself-

Mr SPEAKER:

– Order ! The question should not be asked.

Mr WARD:

– Will the Minister state whether any instructions have been issued to Australia’s . representative at the League of Nations in regard to the attitude he is to adopt in connexion with the application of Abyssinia to be represented at. the assembly?

Mr CASEY:

– No instructions have been issued.

Mr BEASLEY:
WEST SYDNEY, NEW SOUTH WALES

– Has the Government any definite policy in regard to its representation on the League of Nations? Does it give specific directions to its representative, or does it permit him to vote as he pleases, thus committing the Government of Australia without its having any say in the matter ?

Mr CASEY:

– When questions of very considerable importance, or questions directly affecting Australia’s interests, are under consideration instructions are sent to Australia’s representative, but in regard to the many other questions arising at the League Assembly, and at Council meetings, he is not given any specific instructions.

page 564

QUESTION

HOURS OF LABOUR

Mr BEASLEY:

– Will the Minister for Commerce state whether the decision of the conference of local governing bodies, which is now being held at Lismore, New South Wales, for the adoption of the principle of a 40-hour week, will have any influence on the Government in the direction of inducing it to have the principle adopted in this House or applied to its own services?

Dr EARLE PAGE:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

– The policy of the Government in regard to this matter has been propounded on several occasions by the Prime Minister. An effort was made at the recent Premiers Conference to secure uniformity of action, but, unfortunately, unanimity among the governments of Australia could not be reached, and the Commonwealth was unable to proceed further with the matter.

page 564

QUESTION

EXPLOITATION OF ABORIGINAL WOMEN

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Has the attention of the Minister for the Interior been directed to allegations which have been made by Monseignor Gsell, of the wholesale exploitation of aboriginal women by Japanese pearlers in the north? If so, what action does his department propose to take?

Mr PATERSON:
Minister for the Interior · GIPPSLAND, VICTORIA · CP

– I have seen the report to which the honorable gentleman has referred. Some little time ago, the patrol boat apprehended some Japanese and from the boats which they were using removed aboriginal women, who were taken to Darwin. I am having full inquiries made into the recent report.

page 564

QUESTION

PUNISHMENT OF NAVAL RATINGS

Mr E F HARRISON:
BENDIGO, VICTORIA · UAP

– Has the attention of the Minister representing the Minister for Defence been drawn to the statement that a naval . rating on H.M.A.S. Canberra was recently sentenced to seven days imprisonment for having neglected to place a collar stud in the. shirt of an officer, and that another naval rating on the same vessel was sentenced to ten days imprisonment for having misplaced a dinner plate? If so, and if the statement has not been verified already, will he verify it and inform this House of the result?

Mr.WHITE.- The only knowledge that I have of the matter is that which I have gained from a statement contained in a letter read last night by the honoraable member for East Sydney (Mr. Ward). So far as I am aware, the honorable member did not give the source of the letter, or say to whom it had been sent. However, that is by the way. The statement was so fantastic-

Mr WHITE:
Minister for Trade and Customs · BALACLAVA, VICTORIA · UAP

– It seems to me that such a thing is not possible in the Australian Navy, and that the writer of the letter must suffer from class consciousness and thus be unfitted to be in the Navy.

Mr Curtin:

-. - Will the honorable gentleman take steps to verify the accusation?

Mr WHITE:

–Certainly I shall make inquiries to ascertain whether there is an atom of truth in this fantastic statement.

page 565

QUESTION

CONSOLIDATION OF COMMONWEALTH STATUTES

Mr BLACKBURN:
BOURKE, VICTORIA

– Will the Minister representing the Attorney-General inform me as to when the consolidation of Commonwealth statutes will be available?

Dr EARLE PAGE:
CP

– I shall inquire of the Attorney-General.

page 565

QUESTION

FRESH FRUIT AND VEGETABLES

Embargo on entry into New Zealand.

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

– Will the Acting Leader of the House disclose the nature of the proposals which the Minister for Defence will submit to the Government of New Zealand in respect of the complete or partial lifting of the embargo imposed by that government upon the importation of Australian fresh fruit and vegetables?

Dr EARLE PAGE:
CP

– It is not possible at this stage to disclose the nature of those proposals. The Minister for Defence will have an informal personal discussion with the New Zealand Minister who has charge of the matter, to see if it can be rectified.

page 565

QUESTION

EXTRACTION OF OIL FROM COAL

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I ask the Acting Leader of the House whether the attention of the Government has been drawn to the remarks of the Premier of New South Wales, Mr. Stevens, published in yesterday’s Sydney Sim, to the effect that he had been told that the extraction of oil from coal by the hydrogenation process now presented no further difficulties, and that it was merely a matter of constructing the necessary plant? How does the right honorable gentleman reconcile this statement with that which the Prime Minister made in this House on the 30th April last, that approximately twelve months, and possibly longer, would elapse before Imperial Chemical Industries Limited would be able to determine whether it was practicable or desirable to establish a unit in Australia? Was the Premier of New South Wales invited by the Commonwealth to make investigations into the production of oil from coal during his visit abroad ? If so, why is the Commonwealth spending a considerable sum on a visit by the chief executive officer of the Council for Scientific and Industrial Research, Sir David Rivett, to England and Germany to investigate the problem? Of whom are we to take notice, Sir David Rivett or the Premier of New South Wales? Does it not appear that Mr. Stevens is convinced that this industry should be immediately established, and that he proposes to establish it in New South Wales ? What assistance does the Commonwealth intend to give?

Dr EARLE PAGE:
CP

– I have not seen the report to which the honorable member has directed attention. I refer him to the statement made by Sir David Rivett as to the procedure which should be adopted. That gentleman, who is at present making inquiries in Great Britain and Germany into processes for the production of oil from coal, has intimated that Imperial Chemical Industries Limited is not yet in a position to design a plant for Australia. He has urged, therefore, that Australia should wait until certain essential improvements have been made to the plant before concluding any arrangements with Imperial Chemical Industries Limited. He has also advised that the results of investigations into the German process known as the Fischer-Trobsch process should be awaited before an/ decision is made in regard to the establishment of a plant in Australia. He is impressed with the possibilities of this latter plant, and i3 prosecuting further inquiries in regard to it. Honorable members will readily realize that, because of the revolutionary nature of the circumstances surrounding the production of oil fuel, it is imperative that Australia should start off on the right foot. That is what the Government is attempting to do.

Mr BEASLEY:

– In view of the statement read by the Minister for Commerce on the subject of the extraction of oil from coal, are we to believe that the reported statements ‘of the Premier of New South Wales regarding what is being done in Germany are misleading, and not to be taken into account?

Dr EARLE PAGE:

– In reply to the honorable member, I point out that what may be commercially and economically possible in Great Britain or Germany may not necessarily be so in Australia. This was stressed by Sir David Rivett, who, for that reason, counsels delay.

page 566

QUESTION

AIRPORT AT FISHERMEN’S BEND

Mr HOLT:
FAWKNER, VICTORIA

– Last Friday, the Prime Minister gave the assurance that the negotiations for the purchase of land for the establishment of an airport at Fishermen’s Bend, in Victoria, would not he delayed by reason of the absence of the Minister for Defence in New Zealand. On “Wednesday of this week, the Premier of Victoria stated in the Legislative Assembly, in answer to a question, that the Commonwealth Government was not showing any enthusiasm in the matter. Can the Acting Leader of the House inform me as to whether a Minister, and if so, which Minister, has been delegated to conduct these negotiations, and when they will be resumed ?

Dr EARLE PAGE:
CP

– It is necesary to obtain certain data with respect to a portion of the land. That, it is anticipated, will take from ten to fourteen days to obtain. Meanwhile, the matter is being actively discussed as far as it can be without that data.

page 566

QUESTION

ABSENCE OF ATTORNEYGENERAL

Mr BRENNAN:
Minister without portfolio assisting the Minister for Commerce · BATMAN, VICTORIA · UAP

– As I have a number of important matters to raise in connexion with the Department of the Attorney-General, will the Acting Leader of the House explain why that gentleman is absent from his place to-day? Is it a fact that he has transferred his activities to another subordinate body which is meeting in Adelaide or elsewhere?

Dr EARLE PAGE:
CP

– The AttorneyGeneral is at present engaged in legal conferences for the purpose of ensuring that the referendum proposals to be submitted to this House will be adequate, and will fulfil the purpose for which they arc to be made.

page 566

QUESTION

FEDERAL AID ROADS AGREEMENT

Mr HUTCHINSON:
INDI, VICTORIA

– -Will the Treasurer consider the desirability of making provision in the new federal aid roads agreement for the earmarking of a portion of the revenue obtained from the petrol tax, to be handed by the State authorities to municipal councils for the improvement and maintenance of shire roads?

Mr CASEY:
UAP

– In the existing federal aid roads agreement no restriction is placed upon the States as to the roads upon which the money shall be spent. When the matter was discussed at the recent Premiers Conference in Adelaide, it was agreed that the existing agreement in its present form should be renewed for ten years. An additional amount, representing one half-penny a gallon on petrol, is to be made available to the States for general purposes, to be used by them on roads or public works or for forestry purposes.

Mr McEWEN:
ECHUCA, VICTORIA

– Was it at the request of the State Governments that the Commonwealth agreed to make part of the proceeds of the petrol tax available to them for use on public works and forestry? Is it proposed that in the new agreement the States shall resume their original obligations to contribute 15s. for each £1 of Commonwealth money?

Mr CASEY:

– The proposed allocation under the new agreement was not made at the direct request of the States, although the Commonwealth Government has reason to believe that it is not against the interests or wishes of the States. It is not proposed to re-introduce either the subsidy of 15s. in the £1 or impose any other similar condition.

Mr HUTCHINSON:

– Is the Treasurer prepared to give consideration to the proposal that a certain proportion of the money allocated to the States from the proceeds of the petrol tax should go to municipal councils? Will he amplify his previous reply as to how the money made available under this head i3 to become available for forestry or public works ?

Mr CASEY:

– It would be difficult and invidious to place a restriction on the States as to what proportion of the money should be spent on main roads, and what proportion on other than main roads. The policy of the Commonwealth Government has always been to place as few restrictions as possible on money grants to the States. At the present time, no restrictions are imposed in respect of this grant. The States may spend any proportion they like on local roads, or may have the “work carried out through the local shire councils. It is proposed in the new agreement to place an obligation on the States to maintain roads in the vicinity of defence and other Commonwealth establishments situated within the States. At present, there is some doubt as to who is responsible for this work.

Mr Curtin:

– Does that apply to roads leading to aerodromes?

Mr CASEY:

– Yes. The new provision will, of course, apply mainly to defence institutions. With regard to all other works, it is proposed to give the States a wide freedom regarding the manner in which they shall spend the proceeds of the half -penny a gallon tax on petrol.

Mr McEWEN:

– Are we to understand that it is proposed to adopt an entirely new principle in the use by the States of revenue derived from the petrol tas in that it shall be at the discretion of the States to use the money upon any public works they choose?

Mr CASEY:

– That is so in respect only of the proceeds of the additional half-penny a gallon. The existing grant representing 2M. a gallon, which is to be continued, will be under the old conditions.

page 567

QUESTION

COMMONWEALTH BANE-NOTES

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– A friend of mine in Kalgoorlie recently lost a wallet containing £65 in Commonwealth bank-notes, which he believes was stolen. He wrote to the Commonwealth .Bank giving the numbers of the notes with the idea of obtaining a refund of the amount lost if that were possible, and he received the following reply: -

We are in receipt of your letter, and have to advise that all the notes enumerated in your letter, except one, have been “ marked ofl’ “ in our notes registers.

Does that mean that all the notes, except one, have been put into circulation? I understand, of course, that if the notes are passed into circulation there will be no chance of obtaining a refund. Will the Treasurer take the matter up, and have inquiries made?

Mr CASEY:
UAP

– I cannot see how the Commonwealth Bank could be expected te make a refund if the notes have been lost, because, presumably, they would have passed into the hands of other persons, who ‘would have spent them. However, I shall have inquiries made.

page 567

QUESTION

NATIONAL INSURANCE

Mr E J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Is the Minister for Commerce aware that the Government of New Zealand proposes to introduce a national insurance scheme early next year? Does he know whether the proposed scheme is based on the present British system?

Dr EARLE PAGE:
CP

– I am not in possession of sufficiently detailed information to answer the question of the honorable member, but I shall have inquiries made.

page 567

QUESTION

NEW BANK-NOTE ISSUE

Mr McCALL:

– Is it the intention of the Treasurer to issue 5s. bank-notes?

Mr CASEY:
UAP

– The Government has not yet had an opportunity to consider this matter, but, as soon as a decision is reached, honorable members will be notified.

page 567

QUESTION

UNREST IN PALESTINE

Mr BRENNAN:
UAP

– About a week ago, I asked the Minister representing the Minister for External Affairs what attitude, if any, the Government had taken in respect of the trouble in Palestine and Trans-Jordania. The Treasurer, who replied, promised me that he would take the matter up with the Minister for External Affairs, and furnish me with a reply. I should like to know whether he proposes to do so, or whether the somewhat flippant reply he gave me on the previous occasion is to be regarded as final ?

Mr CASEY:
UAP

– I shall secure the information.

page 568

QUESTION

CONSTITUTION ALTERATION

Industrial Powers

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– Will the Minister for Commerce inform honorable members whether the Government, when framing the questions to be placed before the people in the referendum on greater constitutional powers, proposes to give them an opportunity to state whether they desire to confer upon the Commonwealth greater industrial powers as well as greater marketing powers?

Dr EARLE PAGE:
CP

– The Government’s policy in this regard will be indicated when it brings its proposals before the House.

page 568

QUESTION

FORT ON MORETON ISLAND

Mr FRANCIS:
MORETON, QUEENSLAND

– A considerable time ago, tenders were called by the Defence Department for the construction of a fort at Cowan Cowan, on Moreton Island. Can the Minister representing the Minister for Defence state who was the successful tenderer, and when work will be commenced?

Mr WHITE:
UAP

– I shall obtain the information which the honorable member desires.

page 568

QUESTION

TRADE WITH JAPAN

Mr FORDE:

– Can the Minister in charge of negotiations for trade treaties state whether, in regard to the trade dispute with Japan, Australia is waiting for a reply from Japan, or whether Japan is waiting for a reply from Australia? In view of the great important of this question, will he make a frank statement on the matter, say, on Tuesday next ?

Sir HENRY GULLETT:
HENTY, VICTORIA · LP

– In reply to the honorable member’s question, which is a repetition of many others that have been asked, I have nothing further to add.

page 568

QUESTION

CORONATION OF BUNG EDWARD VIII

Mr GANDER:
REID, NEW SOUTH WALES

– Has the attention of the Minister for Commerce been directed to a statement which appeared in last Friday’s Sydney Sun to the effect that the Government proposes to send a delegation of five Ministers to the coronation next year? Is there any truth in the report ?

Dr EARLE PAGE:
CP

– My attention has not been drawn to the paragraph referred to, the subject of which has not yet been considered by the Government.

page 568

QUESTION

BOOK CENSORSHIP

Mr WARD:

– Can the Minister for Trade and Customs inform me whether a book entitled The Unspeakable Turk, by an obscure author, is included among the books banned from entry into Australia ?

Mr WHITE:
UAP

– I have never heard of a book of that title.

page 568

ORANGE BOUNTY BILL (No. 2) 1936

Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Thorby) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to provide for the payment of a bounty on the export of oranges from the Commonwealth during the year One thousand nine hundred and thirty -six.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Thorby and Mr. Paterson do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Thorby, and read a first time.

page 568

PRUNE BOUNTY BILL (No. 2) 1936

Message recommending appropriation reported.

In committee (Consideration of Governor-General’s message) :

Motion (by Mr. Thorby) agreed to:-

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Prune Bounty Act 1936.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

Chat Mr. Thorby and Mr. Paterson do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Thorby, and read a first time.

page 569

SALES TAX EXEMPTIONS BILL 1936

Second Beading.

Debate resumed from the 23rd September (vide page 423) on motion by Mr.

Casey -

That the bill be now read a second time.

Mr FORDE:
Capricornia

.- The Opposition does not intend to oppose this measure. The sales tax is a most unpopular impost which was introduced at a time of national emergency when Australia was at the depth of the depression, and it was generally understood at that time that reductions would be made in the rate of the tax from time to time as finances permitted. The sales tax has been a prolific money spinner for the Treasury, its yield in each financial year that it has been in operation having been as follows: -

Et has been suggested in various quarters that the sales tax should be entirely discontinued, and I should like to see the state of the Commonwealth finances so buoyant as to enable that to be done; but at present I quite appreciate that, the Treasurer would find difficulty in securing an additional £9,432,000 m taxation from other sources. We have to remember that, so far, the financial emergency cuts have not been completely restored. Probably had the Labour party been in office, the form of taxation as well as the nature of the tax remissions would have been entirely changed from those favoured by this Government. I am sure that the financial emergency reductions would have been fully restored long before this.

The Labour party is always anxious to lift the burden of taxation from the shoulders of the poorer sections of the community who are least able to bear it; but the policy enunciated by the Treasurer (Mr. Casey) indicates clearly that this Government stands for the remission of taxes to the wealthy section of the community in preference to the lifting of the burden from the poorer people. Since this Government has been in office the volume of indirect taxation has been increased substantially. In 1930-31 indirect taxation yielded £31,768,000 to the Treasury, but by 1935-36 the total had increased to £52,021,000, or an increase of about £20,300,000. The total per capita imposition advanced from £4 18s. Id. in 1930-31 to £7 14s. Id. in 1935-36. Taking direct and indirect taxation together we find that since this Government has been in office the per capita impost has advanced from £7 los. Sd. to £9 8s. 5d.

A small measure of relief will no doubt be afforded to certain people by the passage of this bill, and for that reason the Labour party does not intend to oppose it ; but the reduction of the sale3 tax from 5 per cent, to 4 per cent.-

Mr SPEAKER (Hon Or J Bell:
DARWIN, TASMANIA

– Order ! The honorable member is now discussing a bill that has already been passed. I remind him that this measure deals with exemptions.

Mr FORDE:

– The Government is proposing that certain items should be added to the list of exemptions, but there has been a general exemption which represents about 2£d. in the £1. Has the Government considered the advisableness of making a much steeper general reduction in preference to increasing th? list of exempt goods? It is hardly probable that the small general reduction of 1 per cent, will be passed on to the general public as completely as it should be.

Mr SPEAKER:

– The honorable member apparently misunderstands the purpose of this bill. This measure deals with specific exemptions and not with a general reduction of the rate of tax.. I ask him to confine his remarks to the bill before the Chair.

Mr FORDE:

– I was suggesting another way by which the Treasurer could lift the burden of taxation. I ask whether the Government has seriously considered the desirability of further tapering down the general rate of tax in preference to granting additional exemptions? It appears to me that the honorable gentleman is finding increasing difficulty in satisfactorily defining the phrase “ aids to manufacture.” Could not a varying rate of tax be applied to what might be called luxury lines as against other lines?

Mr CASEY:
CORIO, VICTORIA · UAP

– That was considered.

Mr FORDE:

– I direct the attention of the Treasurer to the following observations made by the right honorable member for Yarra (Mr. Scullin) when speaking on the subject of sales tax exemptions on the 23rd November, 1932 -

When we do reach the position when reductions are possible, I should prefer to see the rate of sales tax reduced rather than the number of exemptions increased. My Government granted certain exemptions for a special reason. This Government is increasing the list of exemptions merely because it has received requests from various influential sources. One would-imagine that great concessions were being granted to those people who have to exist on thu production of food supplies. I point out that the basic foods of the people were exempted when the sales tax was originally imposed.

The views enunciated by the right honorable member on the occasion are worthy of the most serious consideration. Under the policy which the Government is now pursuing, a boot and shoe merchant who has just bought largely will be obliged to pay sales tax at the rate of 5 per cent, on his purchases; whereas another person in the same line of business who makes purchases after the passage of this bill will be relieved of the obligation to pay any sales tax. Those two traders will be in an unfair position in relation to each other. I should like the Treasurer to explain why boots and shoes have been exempt from sales tax, while other wearing apparel has not been so treated. The average man will now have to pay sales tax on, say, his singlets, while his boots will be exempt. I should like to see both classes exempted.

Undoubtedly quite a considerable proportion of the relief that is being granted from sales tax by this measure and the one which granted a general reduction of the rate of tax will not be passed on to the consumers. Has the department gone into this aspect very carefully?-

What guarantee is there that this small reduction of the rates of sales tax from 5 per cent, to 4 per cent., which is equivalent to a reduction of 2$i. in the £1, will be passed on to the consumer? The Government should have made a much steeper general reduction of the rates with a view to ensuring that the concessions would be passed on to the consumers.

Mr JENNINGS:
Watson

.- As the result of the system of making exemptions, it must follow that the position in regard to sales taxation generally must become more and more complex to the business community. For this reason I am pleased that the Government has seen fit to issue an explanatory book covering the various amendments and decisions in respect of this tax. Furthermore, as the result of these various amendments, it will be more difficult for the Treasurer (Mr. Casey) to make an accurate estimate of the revenue to he expected from sales tax, and, in that direction, I sympathize with him. I notice that the New South Wales AuditorGeneral, in his last annual report, criticized the Government of New South Wales for over-estimating its revenue, whilst the other day a university professor of economics criticized the Federal Treasurer for under-estimating his revenue. This is perhaps another illustration of the fact that economists, like medical doctors, sometimes disagree on fundamentals. If any criticism can be levelled against the Federal Treasurer, it is that he errs on the side of conservatism; and, in financial circles, that is considered to he a virtue.

Two items which I should have been glad to see in the latest list of exemptions from sales tax are biscuits and materials used by professional photographers. It is apparent that biscuits are becoming increasingly used among the middle classes and the poorer sections of the community. They can now he regarded as a basic foodstuff and should have equal claim for exemption as pastry and cakes which are free from tax. If it is not possible to include them in this list I hope that the Treasurer will exempt them on the next occasion.

The Government has been requested repeatedly to exempt material used by professional photographers. These have suffered serious loss of business over the last few years, mainly because of the increased price of their materials due to sales tax. In many instances photographs are necessary for business and private records.

I am pleased that the Government has been able to allow further exemptions, as proposed in this legislation, and I cannot agree with the argument of honorable members opposite that the benefit of these exemptions cannot be passed on to consumers because the reduction is infinitesimal. I point out that reductions affecting the general incidence of sale3 tax amount to 20 per cent. Whereas the sales tax previously was 6 per cent.”, it is now 4 per cent., a reduction of onethird having been made in the rate of tax. This is a substantial reduction. I again appeal to the Treasurer to give consideration to exempting biscuits and photographic materials when the next list of exemptions is being compiled.

Mr HOLLOWAY:
Melbourne Ports

– lam glad that the Government has been able to exempt further goods from sales tax, as proposed in this legislation. Complete exemption is the best way to give relief to the consuming public, because there can be no doubt that the benefits will then be passed on to consumers. On the last occasion when exemptions from sales tax were under consideration, I pressed for the exemption of macaroni, and it appears to me that it is because of some mistake that this product has been omitted from the list now before the House. In recent years macaroni has become an article of common diet. I have been informed by people engaged in its manufacture that, owing to the high price of potatoes, it has largely supplanted potatoes as a food. Furthermore, people are developing a taste for macaroni.

Three large factories in Victoria, three in New South Wales, and one in Western Australia, are now engaged in its manufacture. These are equipped with efficient plant, and the manufacturers are now able to procure in Australia wheat of the special quality which they require. South Australian growers have overcome many difficulties to produce this special quality, with the result that macaroni made from their wheat is as good as any that can be procured in any other part of the world. Ninety per cent, of the macaroni consumed in Australia is made in this country, and, as I have already said, the price is steadily decreasing as the result of the increasing demand. Mr. Weston, of Hancock’s Golden Crust Proprietary Limited, and Mr. Spry, of Macaroni Products Proprietary Limited, two of the leading firms engaged in the manufacture of this food in Australia, have assured me that, if relief were given by way of exemption from sales tax, it would be immediately passed on to consumers. Not so long ago, macaroni, spaghetti, and vermicelli were regarded as restaurant lines, but now they are included on the daily menu in nearly every home in this country. I press my request, particularly in view of the statement by the Treasurer (Mr. Casey) that the more common foodstuffs should be the first to be exempted. Last week I endeavoured to persuade him to give immediate consideration to ray request; I have not yet received his answer, but I anticipate he will be able to give it during this debate. Four thousand bushels of durum wheat are used every week in the manufacture of macaroni in Australia; this is no small consideration. Furthermore, employment is given directly to 500 or 600 mcn, and to many more indirectly, and all of the raw materials required for the manufacture of this foodstuff are grown in thi* country. Durum wheat is mostly grown in. the electorate of Wakefield, and it is the hardest and clearest that could possibly be procured for the manufacture of transparent flour essential in the manufacture of macaroni.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– It is used for the manufacture of semolina flour which is the base for the manufacture of macaroni.

Mr HOLLOWAY:

– That is so. I have no objection to the list of exemptions as it stands, and I hope that many more articles will be added as soon as possible. I urge the Treasurer to add macaroni to the present list of exemptions.

Mr STACEY:
Adelaide

– I congratulate the Government on the numerous exemptions it has made from sales tax, not only on this occasion, but also on others. I ask, however, that the Treasurer (Mr. Casey) strain a point on this occasion to include two other items - biscuits, and machinery required by local governing ‘bodies for road-making. Almost every honorable member- has requested that machinery used by municipalities and shire councils for roadmaking be exempted. Sales tax on such machinery is most unfair as machinery used for similar purposes by governments is exempt. It is really a case of one government authority taxing another government authority. This tax has proved a serious drain on the finances of most local governing bodies. Along with other honorable members, I have pressed this request for several years. We were successful in having the material used in road-making exempt from sales tax, but the Government should now go a step further and exempt road-making machinery. With regard to biscuits I put it that this is a common foodstuff and I ask the Treasurer to exempt this item also from sales tax. Biscuits are not a luxury food.

Mr LAZZARINI:
Werriwa

– The honorable member for Watson (Mr. Jennings) expressed the opinion that, as the result of the amendments made to sales tax legislation, the business community was becoming more and more perplexed. That is true, but I also point out that, for the same reason, the general public are not only perplexed, but exploited as well. I doubt whether the Treasurer (Mr. Casey) is sincere in his optimism that the benefits of these exemptions will be passed on to consumers. The proposed concessions are so small that it would be impossible for the consumers to benefit. Business men in small shops will certainly not be anxious to tell customers that slight reductions of sales tax have been made on articles about to be purchased. Consequently, while it may be intended that these concessions should be passed on to the purchasing public, I have not the slightest doubt that that will not be the case. The sales tax was imposed at a time of financial stringency, and it has been taken necessarily from the purchasing public. The bulk of the revenue has come from the pockets of the people whose purchasing power is low, because this section is the largest in the community. Therefore, it would be immoral not to give the poorest classes the benefit of the proposed reduction of tax. Care should be taken that the present proposals do not result in further exploitation of the people. General recognition is given to the principle that taxation should be placed on the backs of those most able to bear it, but the sales tax does no operate equitably. Although it is gratifying to hear that boots are to be exempt, I should like to know the reason why the wearing apparel of the poorer classes is still to carry the tax. It would be much more healthy for a person to go without boots than without clothing for the body, and blankets with which to ward off the cold. I do not care how much sales tax is placed on the highpriced clothing that is commonly purchased by the wealthy, because it imposes no hardship on them; but people on relief work, and all others who are suffering a reduction of their purchasing power, should be completely freed from the impost. I suggest that all clothing, from the cheaper to the middle classes of goods, should be exempt. I hope the Treasurer will explain why the Government intends to exempt boots, but not wearing apparel.

All foodstuffs could reasonably be freed from the sales tax. I am surprised to learn that biscuits still carry it. Some kinds of biscuits may rightly be regarded as luxury lines.

Sir Frederick Stewart:

– These and the classes suitable for babies’ food are exempt, but not the intermediate grades.

Mr LAZZARINI:

– All grades of biscuits should be exempt. The present system of applying the tax seems to make confusion worse confounded. We should either exempt all the goods largely purchased by the working classes, or make a general reduction of the rate of tax.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– In view of the representations made to the Government during the last eighteen months, the time has arrived when machinery, including tractors, used by local governing bodies, should be exempt from the sales tax. I am entirely in agreement with the remarks of the honorable member for Adelaide (Mr. Stacey) in this regard. I hope that at a later stage the Treasurer (Mr. Casey) will indicate the Government’s attitude; otherwise I shall be obliged to te3t the feeling of the committee by submitting an amendment.

The honorable member for Melbourne Ports (Mr. Holloway) has drawn attention to the position with regard to semolina and macaroni. An industry of this description should not be penalized. I realize that the exigencies of ‘governmental finance still make the collection of sales tax on some items necessary, but favorable consideration should be given to the removal of the impost from foodstuffs and clothing. I do not consider it right in principle for the Commonwealth authorities to collect sales tax on purchases made by local governing bodies, which, in turn, have to recover the tax by means of increases of local rates. This is an undignified procedure on the part of the Commonwealth, and it should be unnecessary.

Mr MAHONEY:
Denison

.- Certain mixed biscuits made in Hobart are consumed extensively by people of .the poorer classes, and it is desired that these articles should be exempt. I refer to biscuits largely purchased in feeding children in somewhat delicate health from the age of two years upwards. Their malnutrition has resulted, no doubt, from the fact that their mothers have been under-nourished.

Blankets purchased by the poor should not carry sales tax. These people require more warmth than members of the wealthy classes, because they are not so well fed. All the foodstuffs ordinarily purchased by the poorer classes, particularly in the cities, should be exempt. Taxation proposals are often submitted as the result of information supplied by officers who have no intimate knowledge of the hardships suffered by the poor. All sales tax legislation should be abolished. The only way to rectify anomalies, if the tax is to be retained, is to place the impost upon the wealthy, and, as far as possible, exempt the poor.

Although the Government has relieved the wealthy class of the obligation of paying taxes amounting to millions of pounds, it has not removed the sales tax on many of the articles required by the poorer section of the community. The poor wear out more clothes than the middle and wealthy classes, because the ‘ kind of material which they purchase for wearing apparel is necessarily of inferior quality. Such a consideration should not be disregarded if justice is to be fairly given to every section. The continuance of the sales tax upon commodities where required by the poor is a deterrent to their having large families. If the tax were removed, their economic position would be improved and they would ba encouraged to rear more children, until eventually it would be found that the natural increase of population rendered unnecessary the reintroduction of a policy of migration.

In. view of the magnificent budget which the Treasurer has presented and the hidden reserves, which I believe that he has, I hope that Le will exempt the necessaries of life from sales tax in the direction that I have intimated.

Mr PRICE:
Boothby

.- This is one of the bills to which I feel that I can give my hearty support. On numerous occasions in the past I have expressed my antagonism, to the sales tax, which I regard as a real tax on industry. Although the Government derives tremendous sums of money from this source and they are easy to collect, the tax itself weighs heavily upon industry. The proposed exemptions will receive my wholehearted support, and I shall be gratified when the last vestiges of this legislation are removed from the statute book. At the present time, despite their reluctance to lose such a fruitful source of revenue, the governments of other countries are remitting their sales taxes. I support this measure, which is similarly designed, feeling that it is along the right lines. Nevertheless in view of the fact that tha Government did not consider the time opportune to repeal the sales tax legislation completely, I think the Treasurer (Mr. Casey) could have reduced ‘ ti n rate to 3$ per cent., which would have facilitated the calculation of returns by the business community.

I am gratified that the Government has seen its way clear to exempt from sales tax materials which are required by the building trade. When the tax was reduced from 6 per cent, to 5 per cent., u. substantia] improvement was reported u> the building trade, and I consider thai this further concession will be reflected in a continuation of that improvement. Throughout the Commonwealth at the present time, there is a great shortage of houses, and the relief that the Treasurer has been able to give to the industry should give another stimulus to the trade. I do not agree altogether with the action taken by the Government regarding the importation of oregon. I consider that it has acted unwisely. In order to create employment, the Government decided that it would reduce the general tariff on oregon logs entering Australia

Mr DEPUTY SPEAKER:
Mr. Prowse
Mr PRICE:

– For a considerable time honorable members on both sides of the House have advocated that road-making machinery, which is used by municipalities and shire councils, should be afforded some relief from sales tax. In this connexion an anomalous position exists, because road-making machinery, the property of State governments, is not subject to the tax, whereas plant owned by municipalities and -shire councils is subject to it. These bodies are carrying out most important work, and should be granted the same privilege in this connexion as State governments. If the Treasurer does not see fit to accede to this request, I shall be obliged to vote against the particular item when it is considered in committee. I do not make that statement as a threat, but I emphasize that honorable members have frequently advocated the adoption of this proposal and the time is now opportune for it to be done.

Mr Holloway:

– Did the honorable member say that municipalities are placed in a ‘worse position than the governments of the States?

Mr PRICE:

– Yes.

Mr Holloway:

– That is not correct.

Mr PRICE:

– I am yet to be convinced that it is not so.

I am surprised that the Treasurer has not exempted all foodstuffs from the obligation to pay sales tax. “When the Government finds itself in a position to reduce the burden of taxation on the public, one of the first items to be exempted from any impositions should be foodstuffs. Honorable members have referred to biscuits of certain types still being subject to the sales tax. The manufacture of biscuits is an important industry in South Australia, and portion of the output is sold in other States. Even at this late stage, the Government should take action to include this foodstuff in the list of exemptions.

In the main, I am entirely in accord with the bill, and shall support it if only on the ground that I consider that the sales tax should never have been imposed, although it is a great source of revenue. Whenever an opportunity presents itself, I shall vote for a reduction of this tax with a view to its ultimate removal from the statute-hook.

Mr FROST:
Franklin

.- In view of the fact that the sales tax was introduced as an emergency measure, I had hoped that it would have been repealed before now. When the tax was imposed in 1931, the administration received numerous requests to exempt certain articles, and in this connexion foodstuffs received particular consideration. I am gratified that the Government has removed sales tax from certain articles, such as spray guns, pumps, &c., which are of immense value to the primary producer in assisting him to combat many pests, but I am disappointed that the exemptions do not include biscuits. They are a commodity which is extensively used by all sections of the community. I understand that the tax has been removed from .biscuits which are used in the nursery and from the more expensive types, but those which are bought by the workers and the middle-class generally are still subject to this imposition. Everything used in the manufacture of biscuits is grown in Australia; consequently the primary producer also is taxed. Only a small crop of wheat is grown in Tasmania, and the bulk of it is sold to biscuit manufacturers on the mainland, because it has been proved to be superior to other wheats for -the manufacture of biscuits, by reason of the fact that it is grown in a moist climate. The biscuit manufacturers are penalized, because they are unable to pass the tax on to the consumer and, in addition, have to compete with imported biscuits. They have written to honorable members in all States, asking to be relieved of this tax, which haa been a burden on them ever since it was first imposed. The Government would he well advised to include all biscuits in the list of exemptions. I congratulate it upon having exempted such items as boots and machinery.

Sir LITTLETON GROOM:
Darling Downs

.- I should like the Treasurer (Mr. Casey) to inform me as to which of the requests for exemption made bythe Butter and Cheese Factory Managers and Secretaries Association have been granted. Cold storage is a matter of considerable importance in connexion with primary production. In Queensland, the cold stores handle not only butter, but also other exportable commodities such as meat, pork, lard, egg pulp and fruit. The particular items on which the removal of sales tax is sought, are - ammonia, calcium chloride, ammonia piping, multivane fans, oil and machinery such as motors, gear drives, &c. It is pointed out that ammonia purchased for use in butter factories is exempt from the sales tax, but in other cases is subject to the tax.

Representations have been made by saddlers in Toowoomba, with respect to the sales tax on leather usedin repair work. When used in the manufacture of harness for the purpose of production, leather is exempt from the tax ; but when it is used for the purpose of repairs the tax has to be paid.

Mr Paterson:

– For harness repairs?

Sir LITTLETON GROOM:

– Yes. I should like the Treasurer to see if that anomaly may be removed. Certain leather used by bootmakers for both manufacturing purposes and repairs is exempt from the tax.

Mr.NOCK (Riverina). [12.5].- Twelve months ago I criticized the Government for having failed to give the measure of relief from emergency taxation which I considered was then justified. The surplus which the last budget revealed showed that my complaint was well founded. A larger measure of relief could have been given last year. I welcome the proposals this year for the reduction of the rate of tax and the enlargement of the list of exemptions. But there are still some items which should have, and I hope will be given, consideration. Several honorable members have referred to road-making machinery used by shires and municipalities. In one or two cases, from £70 to £100 has been collected from a country shire as sales tax on a tractor required for roadmaking purposes. The shire council is really being made a tax gatherer. It collects rates from the people on the land for the purpose of making roads, and portion of the revenue thus received has to be paid to the Federal Government in the form of sales tax on the tractor required for that work. That is an anomaly into which the Treasurer (Mr. Casey) might well look. I recognize that there isa limit to the relief which can be given, and that there may be some factor which has prevented the granting of an exemption in this particular case. I am pleased that the tax has been removed from bitumen and practically all other road-making material. I am sure that all honorable members are delighted to find tea, coffee, cocoa, piping, oils, and footwear included in the list of exemptions. In the rural industries, the tax on oils has been heavy, and has been felt considerably. The whole of the community will be relieved by that exemption. Footwear is needed by every member of the community, and the Government is acting wisely in exempting that item, as well as tea, coffee, and cocoa. The Government is wise in seeing that the relief from this emergency taxation is being spread justly and reasonably throughout the whole community.

Mr HOLT:
Fawkner

.- There are two matters which I wish to raise. Before doing so, however, I commend the Government for having substantially reduced the rate of sales tax and increased the range of exemptions. The Government which imposed this tax in the first place stated that it was an emergency measure, and the present Government has adopted throughout the attitude ‘that, with the passing of the financial crisis that engendered it, the burden of the tax should be lifted. Consequently, there has been a gradual lightening of that burden.

In respect of bespoke tailoring, the Government proposes to reduce from 66f per -cent, to 50 per cent, the proportion of the sale price on which the tax is levied. I should like the Treasurer (Mr. Casey) to state whether, in the case of a tailor who purchases Australian cloth on which sales tax has been paid, the tax has also to be paid on the manufactured article.

Tea, coffee, cocoa, and other drinks of a like nature have been included in the list of exemptions. I hope that the Treasurer will take the earliest opportunity to add aerated waters to the list. They cannot logically be classed *as a luxury, any more than can tea, coffee, and cocoa. The cost of a bottle of aerated waters is no greater than that of a pot of tea. Unquestionably, the poorer sections of the community are responsible for the largest proportion of the consumption. Aerated waters are virtually a foodstuff, and in the warm weather particularly, considerable quantities are consumed by the Australian public. For different reasons, the sales tax is particularly burdensome on this particular industry. In the first place, it is almost impossible to pass on the tax, because the article has a small cost price. In the second place, the tax is particularly vexatious to the wholesale manufacturer, because he deals with so many customers in the ranks of grocers and sweets-shop proprietors who purchase, relatively small quantities. To him, the administrative cost is very heavy, and the inconvenience very great. I know one manufacturing concern which considers that, in its case, the administrative costs in connexion with collection and additional accounting, amount to £700 a year. I therefore urge the Treasurer to remove aerated waters from the incidence of the tax as soon as that course is practicable.

Sir Donald CAMERON:
LILLEY, QUEENSLAND · UAP

– I support the request which nas been made by the honorable member for Darling Downs (Sir Littleton Groom), on behalf of the Butter and Cheese Factory Managers and Secretaries Association of Queensland. Recently, I communicated with the Treasurer (Mr. Casey) at the request of the Queensland Cold Storage Co-operative Federation Limited. This company has cold stores on the Brisbane River, in the Lilley electorate, which are probably as modern and up to date as any in the Commonwealth. It has communicated with me, urgently requesting the exemption from sales tax of practically the same items as have been mentioned by the honorable member for Darling Downs. It is pointed out that ammonia which is used in butter factories is exempt from sales tax, but that ammonia which is purchased for cold-storage purposes is liable to the tax. That would appear to be a most definite anomaly, which should be rectified immediately. These cold stores are used for the storing of butter for shipment, and are really leased to the dairy companies of Queensland, which are responsible for their running and upkeep.

Mr PATERSON:
CP

– That anomoly is being rectified.

Sir Donald CAMERON:
LILLEY, QUEENSLAND · UAP

– It is also asked that the tax should be remitted on calcium chloride and ammonia piping, as well as On multivane fans, oil and some kinds of machinery. Honorable members will agree that we should place no unnecessary burdens on those who are eonducting these, cold stores which are necessary to keep butter, cheese, pork, &c, in a good state of preservation. I urgently support the request of the honorable member for Darling Downs in this respect.

Mr STREET:
Corangamite

– Any measure that has for its object the reduction of sales tax will meet with my support. In my opinion, sales tax is probably the most burdensome tax which the community has to bear, though it is one which I know any government would be loath to abandon because it is such an excellent money-spinner. I realize-that it is possible for honorable members to bring forward innumerable requests for exemption, and to support them by convincing arguments, but I also realize that the Treasurer (Mr. Casey) must draw the line somewhere, and, on the whole, he has done a good job.

I am of the opinion, however, that favorable consideration should be given to the request for the remission of sales tax on machinery, &c, used by municipalities. A municipality has to collect revenue from its ratepayers, and it seems extraordinary that part of that revenue should have to be handed over to the Government in the form of taxation. Some extraordinary anomalies existed in the past in this regard. For instance, there was the case of one municipality in my district which was called upon to pay sales tax on road metal, which it took from its own quarry, crushed with its own machinery and spread on its own roads. That position has since been remedied. Only recently, however, the same municipality bought a power grader upon which it had to pay between £30 and £40 in sales tax. No doubt the argument will be put forward that the ratepayers would not benefit in the form of reduced rates even if the sales tax were remitted, and while that may be so the fact remains that sales tax paid by a municipality in the course of a year might be just enough to make all the difference between a settler having a road made to his property or not.

I desire to support the request of the honorable member for Fawkner (Mr. Holt) that sales tax on aerated waters be remitted. I cannot see why aerated waters should be subject to this tax any more than tea is. They are not a luxury, and are consumed largely by the poorer sections of the community, particularly by children during the warm weather.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I should like to learn from the Treasurer (Mr. Casey j whether sales tax is collected on helmets used by miners. These helmets were first used in the Broken Hill mine, and their use has now become general throughout Australia. They are really necessary for the safety of the miners as a protection against falling rock. The remission of sales tax on this item would be a small matter to the Treasury, but would be of considerable importance to the miners, who have to pay as much as 12s. 6d. each for the helmets.

I join with other honorable members who have requested that sales tax be remitted on machinery used by municipalities. In the more remote parts of Australia, municipalities have the greatest difficulty in maintaining roads at all. They are usually too impoverished to metal the roads, and must try to keep them in order by the use of road formers and rollers. It is not right, therefore, that they should be taxed on the price of these necessary machines.

A very wide list of exemptions has been granted in this bill, many of them .to manufacturers who, I presume, will pass on the benefits received. Tax remissions have also been made in connexion with the dried fruits industry, fishing and’ irrigation works. It is gratifying to observe that sales tax has been remitted on foodstuffs, as well as on building materials and footwear. There is one remarkable omission, however; no’ remission whatever has been made in respect of materials used in the mining industry. It is evident that an attempt has been made to please everybody of importance to the Government, but nothing has been done for the gold-mining industry. The schedule to the Sales Tax Assessment Act shows that with one exception, tax is still imposed on chemicals for use in research in mining laboratories; on clocks for time-keeping and other purposes, often of a most elaborate kind, used in the mining industry ; and on locomotives for general ‘hauling, which I presume includes locomotives used in mines. The old practice of putting in only a small drive just large enough for a man to pass has been abandoned in big mines, and drives, big enough to carry a set of rails for a locomotive and trucks, have been constructed in most of the large mines in Australia to-day. In this way a great deal more material can be shifted in the same time. I make this appeal not so much for the benefit of the established and profitable mines, as far those that we are trying to bring about profitable production.

Sales tax still applies to machinery and apparatus used for scooping sand from river beds, &c, so that I presume it also applies to machinery used in connexion with the manufacture of lime from shells recovered from the soil.. This is used, in many parts of “Western Australia as an aid to agriculture. No exemption has been granted in respect of motor vehicles fitted with wireless apparatus and photographic equipment for geophysical survey work in connexion with prospecting for minerals. No one knows better than the Treasurer, who is a mining engineer, that this is one of the branches of mining which offer great promise. Oxygen used in cutting metal for mining operations is not exempt, nor are paints which are used in large quantities on mining plant. Equipment for the production of zinc shavings used in the recovery of gold by the cyanide process should be exempt, particularly as such a small amount of revenue is involved. Power cranes for the erection of engines and overhaul purposes are also still subject to sales tax, and so, apparently, are rubber waders.

Mr Casey:

– They would be exempt under the general footwear exemption.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– I am pleased to hear that statement. Skip grease seems still to be subject to sales tax.

Mr Casey:

– That also will be exempt under the exemption of oils and greases for lubricating purposes.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– Telephones for general use on mining property should be exempt. As the Treasurer is aware, mine managers always have their private residences connected by telephone with the underground workings of their mines so that the underground managers may keep them informed as to the safety of the workings. Surely such equipment should also be exempt.

I am sure that the Treasurer will acquit me of any charge of censorious- ness. I merely point out that while manufacturers, fruit-growers, timbergetters, those interested in the dried fruits, fishing and irrigation industries, and those engaged in the manufacture of foodstuffs, all seem to he reaping some advantage from the exemptions now being granted, plant and equipment required by the mining industry has been largely overlooked. I ask the Treasurer to give this subject more careful attention.

Mr GREGORY:
Swan

.- As the Treasurer (Mr. Casey) knows, I have consistently opposed the method that has been adopted to collect sales tax. It would have been far better had the sales tax been imposed on all sales other than sales for export, for that would have permitted the imposition of a lower rate of tax for an equivalent revenue to that which we are now receiving, and business people would have appreciated the simpler procedure that would then have been possible. However, the existing system has ‘ been developed, and even though the Treasurer himself were to-day favorable to the method I suggest, ‘it would be almost impossible to make the change over.

It is strange to me that Bales tax should still be imposed upon articles used by people who are taxing themselves in certain ways in order to overcome pests of one kind and another. In Western Australia, for example, rabbits, foxes, and even eagles and emus lately, have become serious pests, yet in consequence of the restrictions imposed by the Customs Department, people are unable to obtain ammunition for use in the Remington rifles that have been purchased to kill these animals and birds. There is an absolute embargo on the importation of such ammunition. It is unreasonable, also, that sales tax should be imposed on ordinary ammunition used to destroy pests, for the eradication of which the settlers impose levies on themselves. I a3k the Treasurer to consider whether ammunition used for this purpose may not be exempt from sales tax. I believe that 40,000 foxes were killed in Western Australia last year. A bonus of 5s, a scalp - the amount may vary slightly from time to time - is paid from the State vermin destruction organization in respect of all foxes killed.

Mr Beasley:

– The pelts are surely worth a few shillings.

Mr GREGORY:

– The people interested in the destruction of the foxes do not seem to think so. On one occasion a party went out at night with spotlights and killed 70 foxes. It is unfair that ammunition used for this purpose should be subject to sales tax.

I have heard a good deal at different times about tractors, and I remind honorable gentlemen that occasionally the Government has been very kind in this connexion. Once when the Government agreed that certain tractor parts should be admitted duty free, we were surprised to discover that the exemption had relation to tractors used for pulling loads but not for tractors used for pushing loads.

I urge the Treasurer to give close attention to the two points to which I have referred.

Mr BEASLEY:
West Sydney

– I direct the attention of the Treasurer (Mr. Casey) to certain matters which involve the definition of the phrase, “ aids to manufacture “. It appears to me that considerable difficulty is likely to be experienced in determining to which articles this definition shall have application. I am afraid that interminable arguments may occur between departmental officers and business people on the subject unless a clearer definition is discovered. I should like to know whether the final determination will rest entirely with the officers of the department, and also what method will be adopted to decide whether certain articles shall or shall not be regarded as “aids to manufacture.”

Mr Casey:

– When the bill is at the committee stage I shall have something to say on the subject of definitions, and I think I shall be able to show that the definition of “ aids to manufacture “ need not cause great trouble. No reasonable doubt exists as to what the intention of the Government is. If manufacturers are in doubt on the subject, and send to the department the names of the items they consider should be exempt, together with a definite description of them, and also indicate the manner in which the particular materials are used, no great difficulty should arise. It must be made clear, of course, that none of the materials will remain in the finished article.

Mr BEASLEY:

-Apparently the onus is to be placed on the taxpayers themselves.

Mr Casey:

– They will be required to describe fairly and truthfully the exact uses to which the materials for which they desire exemption are put.

Mr BEASLEY:

– To indicate the nature of the trouble that I fear will arise, I direct the attention of the Treasurer to certain articles which seem to me to offer scope for divergence of opinion. Take, for example, cotton filter cloth which is used in certain processes where filtration takes place after the treatment of materials with chemicals. Woollen filter cloth is used for the same purpose from time to time in cases where the action of the chemicals is severe on ootton. Coir matting and camel hair press cloth used for enclosing oil seed during the process of oil expression under hydraulic pressure is also likely to cause difficulty. Roller composition used for the manufacture of inking rollers for printing machines may present a problem and so may bishops’ lawn, a fine muslin material used for filtering finer oils and other products in the preparation of cosmetics, &c. Compressed air - hydrogen, oxygen, acetylene - is used as an aid to manufacture or in the process of carrying out repairs to plant and buildings. How will it be affected? The position in regard to acetio acid used as a lubricant for soap dies in the process of stamping tablets of soap should also be clarified. Considerable difficulty will inevitably arise in dealing with some of the articles to which I have referred. I do not expect the Treasurer to be. able, offhand, to give me a definite reply as to whether these particular articles will be exempt or not.

As I understand that the Treasurer wishes to make a statement -in connexion with this bill, I ask leave to continue my remarks.

Mr Casey:

-i desire permission to make a short statement in regard to this bill.

Mr SPEAKER:

– It is somewhat unusual to interrupt a debate in this way, but if honorable members are prepared to give the Treasurer leave to intervene, he may do so. Leave granted.

Mr CASEY:
Treasurer · Corio · UAP

– Seeing that it is clearly impossible for Parliament to pass this measure hefore the week-end, and that trade will be dislocated somewhat if a definite date is not specified from which these exemptions will operate, I inform honorable members that the Government has decided to introduce an amendment at the committee stage of the bill to provide that the provisions of the bill shall become operative as from to-morrow morning. Consequently, except in respect of times in the bill to which a specified date is already attached, the exemptions will operate as from to-morrow morning. Sitting suspended from 12.45 to2.15 p.m. [Quorum formed.]

Mr BEASLEY:

– The last item I propose to mention is acetic acid. I am advised that acetic acid is used as a lubricant for dies in the process of stamping tablets of soap. The Treasurer indicated that lubricants of all kinds, such as oils, greases, &c, would be exempt, and I take it that acetic acid, as it is used as a lubricant in the soap industry, will come under this heading.

I have raised these items in the form in which I have presented them, because I am of opinion that much discussion will take place between the department and the manufacturers as to what articles might reasonably be classified under the list of exemptions, and also in order to secure a brief indication from the Treasurer as to how the department will apply these exemptions. Furthermore, any information which the Treasurer can give in these matters will be helpful to honorable members in dealing with queries raised by their constituents from time to time.

Mr GARDNER:
Robertson

.- I support the remarks of the honorable members for Fawkner (Mr. Holt) and Corangamite (Mr. Street), in respect of the omission from the list of exemptions of aerated waters, which are virtually a foodstuff. Aerated waters fall practically within the same category as biscuits as a. children’s food. They are much sought after by children holidaying on our beaches, and, although I am concerned in this matter with the interests of the smaller manufacturers of aerated waters, many of whom are established in the electorate of Robertson, I also point out that some of the finest beaches in the Commonwealth are situated in that district. I suggest that children frequenting them should lie given every opportunity to purchase- aerated waters as cheaply as possible. Owing to the fractional difference it would make in cost on individual purchases, sales tax on aerated waters cannot be passed on. Therefore, this tax simply adds to overhead expenses, and particularly affects the smaller manufacturer. It causes intricacy in the accounts of smaller firms, who are not in a position to employ accountants. I point out, also, that one of the main ingredients in cordials is sugar, the price of which is fixed by Commonwealth legislation.

I support the request for the exemption from sales tax of road-making machinery used’ by local-governing bodies. In New South Wales - and I take it that a similar state of affairs exists throughout

Australia - the people are well catered for so far as main roads are concerned, but local authorities are finding it more and more difficult to secure the necessary finance to enable them to attend to important arterial roads, which are used for the transport of a considerable portion of our primary products. Thus any relief given in this direction will no doubt be reflected in improvements of these roads.

Dealing generally with sales tax legislation, I compliment the Government on reducing the rate by 1 per cent. I do not agree with honorable members opposite that this relief is so infinitesimal that it is impossible to pass it on to consumers. On the contrary, this concession will give a fillip to trade generally. Although the present list of exemptions does not include a couple of items which I should have been glad to see included, I congratulate the Government on its foresight in exempting machinery and fuel used in irrigation projects. Much public money has been spent on the Hunter Valley irrigation scheme which I consider is not before its time. I contend that if we are to be enabled to keep up our exports of mutton, lamb, beef, butter and other products, we cannot look so much to the large land-holders as to the smaller land-holders who, to-day, are intensifying culture and adopting scientific methods of production. The Hunter Valley irrigation scheme will play an important part in this direction, and I am very glad indeed that this work will be greatly assisted through the exemption from sales tax of machinery and fuel used in the undertaking.

I do not agree with the argument of the honorable member for Werriwa (Mr. Lazzarini) that sales taxation falls most heavily on the poorer sections of the community. I have always held the opinion that this class of taxation most affects those people who are best able to bear it, namely, those who can afford to pay for luxuries ; and this is the case in respect of all indirect taxation levied by this Government. The business community and the consumers generally will welcome the concessions to be afforded under these exemptions, and I am very pleased indeed that this Government has taken the vanguard in providing relief from this class of taxation.

Mr FISKEN:
Ballarat

.- I congratulate the Government on exempting bo many more articles from sales tax, and I am particularly pleased that in doing so it has removed a number of anomalies created by previous exemptions. In this connexion I refer to several items mentioned by the honorable member for Lilley (Sir Donald Cameron), such as ammonia, sodium chloride and calcium chloride used for refrigerating purposes. When used in butter factories, these items were exempt, but when used in cold stores or meat works they were still subject to sales tax. The meat trade has been agitating for the removal of this anomaly, and I am glad to learn that that request is now being granted.

I join most emphatically with other honorable members in asking that roadmaking machinery, such as tractors, motor trucks and graders, used by local governing bodies, be exempt from sales tax. Until this is done a serious anomaly will remain in this legislation because bitumen and other road-making material has already been exempted. It appears to be most incongruous that the Crown, through this Parliament, should tax itself in the municipal sphere; this is entirely wrong. During the last few years the Commonwealth and the State Governments have made money available to municipal councils with the object of relieving unemployment, these bodies being regarded as the best avenue for the spending of such money. Although this Government subsidizes such bodies, it hampers them through the imposition of sales tax on machinery .used by them. I join with other honorable members in urging that this anomaly be remedied.

Mr NAIRN:
Perth

.- The. taxing by one authority of the material required by another authority, when both authorities collect and administer public funds, is very difficult to justify. This matter has been brought up so frequently in this House that I do not propose to recapitulate the arguments in support of the discontinuance of such a practice, but I should like the Treasurer to state why this practice is followed by this Government in relation to sales tax on machinery used by local governing bodies. The position, in this respect, is that a superior taxing body imposes a tax on a subsidiary taxing authority. 1 do not know of any good reason to justify such a practice and I feel sure that honorable members would be glad to hear what the Minister has to say on this point.

I should like to see biscuits exempted from sales tax. Last year a report of the Tariff Board on this industry waa tabled, in which the board recommended the removal of duty on biscuits on the ground that the Australian trade wai able to carry on without any tariff protection. The House adopted that recommendation although at the time a good deal of apprehension was expressed by manufacturers that if they had not protection large importations of biscuits would result. I do not know to what extent those fears have been realized. The removal of sales tax on Australianmade biscuits would give the industry some slight protection, and would have the further virtue, which is hot common to tariff imposts, of giving protection without adding to the costs of the purchasers of the goods.

Mr CASEY:
Treasurer · “Corio · UAP

in reply - I shall attempt to cover, as far as I can in a reasonable time, the items dealt with by a large number of honorable members. I shall take the items not in the order in. which they have been mentioned, but in the order of importance which honorable members have attached to them.

Biscuits have been the- subject of representations by a large number of honorable members on both sides of the chamber during this debate and in the discussion twelve months ago, and I think I need’ hardly assure the House that this matter has received the serious attention of ‘ the Government in connexion with this bill. There is still a large collection of foodstuffs of a fairly wide variety, which are the subject of sales tax, including biscuits, ice cream, condiments of almost all kinds, junket materials, jelly crystals, certain breakfast foods not made from processed grain, orange and lemon peel, cornflour, salt, tinned fish, meat and vegetable extracts, and almost an interminable, list of items of this kind, which the Government thinks cannot be classed as essential foodstuffs. Of course, these items are used, in some degree, in almost every household, but, considering the small sum of money spent on them by each household, they can hardly be said to be essential items of food.

The wholesale value of the biscuits consumed in Australia amounts to about £2,000,000 a year. Between £250,000 and £500,000 worth are already exempt, in the .form of children’s food. Shortbread biscuits were exempted some time ago by reason of the fact that they bear an analogy to shortbread made by pastrycooks, and it was impossible to distinguish between the two. Thus shortbread biscuits and many others which could be classed as baby foods are already exempt, leaving about £1,500,000 worth still taxable. As there are almost exactly 1,500,000 families in Australia it means that £1 worth of biscuits is used on the average by each family in Australia every year. That, I think, provides all the refutation that need be furnished of the statement that biscuits are an essential article of food. It means that on an average each family consumes only a few pence worth every week, and I do not believe that removal of the tax on the small quantity of biscuits used by a family would enable it to buy much more food. The tax ou £1 worth of biscuits per annum would be only about 9d. in every family.

I have disposed of the argument that the burden which the people bear by reason of the tax on biscuits is severe. The wholesale price varies from Cd. to about ls. 6d. per lb., but the average price is about 9d. per lb. The amount of tax probably represents about id. per lb., and the Government thinks that, as biscuits generally cannot be classed as an essential item of food, they must take their place among the fairly wide range of foodstuffs that still bear the tax. The Government claims that it would be invidious to select particular items for exemption. The removal of the tax on these items, which amounts to about £250,000 a year, will be considered when the Government considers that it is in a position to carry on without the revenue now being raised.

Mr Lazzarini:

– It is getting revenue by taking the pennies of the poor.

Mr CASEY:

– In my second-reading speech on this bill, I pointed out that the Government had been at pains consistently to reduce the burden of the tax on the basic wage workers, and that, as the result of the various exemptions granted on goods largely purchased by the lower-paid members of the community, the average worker on the basic wage now pays only one penny a day in sales tax on all the things that he buys.

Mr Thompson:

– Does that include his clothing ?

Mr CASEY:

– Yes; it covers all items specified in the regimen laid down by the Arbitration Court.

Mr McEwen:

– What would be the loss of revenue if all biscuits were exempt?

Mr CASEY:

– About £70,000 or £80,000 a year.

Mr MCCALL:

– Would ihe reduction be passed on ?

Mr CASEY:

– I cannot say. Competition usually makes it necessary for traders to pass on the benefits of relief from’ taxation. The Government says that all the articles of food which are not essential items must be considered together, and T. can give the House an undertaking that this group will be dealt with en Mcc at some future time with a view to its complete exemption, when the Government is able to do without the revenue now collected.

Macaroni was particularly referred to by the honorable member for Melbourne Ports (Mr. Holloway). The macaroni consumed in Australia has a wholesale value of about £75,000 a year. A larger quantity than that is manufactured in this country, but the balance is exported, and does not bear sales tax.’ On the basin of £75,000 a year, we find that about ls. worth of macaroni is consumed by the average family in a year, and again I maintain that this cannot be regarded as an essential item of food. The amount of ta.x involved is only about £3,000 a year, but all these foodstuffs have to be considered together. Competitive anomalies would be brought about by the arbitrary selection for exemption of individual items, and not others that are in some way connected with them in the matter of trade.

The honorable member for Darling Downs (Sir Littleton Groom”) and the honorable member for Lilley (Sir Donald Cameron) both referred to a request from Queensland for a remission of the tax on ammonia, calcium chloride, ammonia piping. multi-vane fans, oil, and machinery, such as motors and gear drives. Ammonia, calcium chloride, ammonia piping and oil will be exempt under the provisions of this bill, the first two items being refrigerating materials. Oil is specifically exempt and ammonia piping comes under the general exemption granted to piping. The two other items referred to are multi-vane fans, and machinery such as motors and gear drives. These are not exempt except when used for specific purposes, and the Government will not increase the exemption in regard to them.

The Deputy Leader of the Opposition (Mr. Forde) asked why had not the Government considered the matter of differential rates of sales tax between luxury goods and essential goods. That aspect has been given attention by the department and particularly by myself during the last six months. We made a definite attempt to distinguish between, and make a schedule of, luxury and essential goods; but as other countries have found, we had to come to the conclusion that it was only on a limited range that we could say with any assurance what goods were luxury or what were essential. Going up the scale from essential to luxury, we found that each item merged with another. It is therefore quite impossible in practice to draw a line of demarcation between luxury and essential goods which would enable the department to state whether the rate of sales tax should be 5 per cent, on some goods and 2£ per cent, on others. The department made a definite effort to distinguish between luxury and essential items in an attempt to do justice to the principle that taxation should be imposed on various sections of the community in proportion to their ability to pay it, but it was not found possible to make a clear-cut division between luxury and essential items, which could be administered without considerable confusion and difficulty. For those reasons the scheme was reluctantly put aside.

The Deputy Leader of the Opposition referred to the position of business people who were in possession of large stocks of a particular range of goods, such as boots and shoes, and he claimed that they would be placed in an inferior position competitively to those who had no accumulated stocks. One must readily admit the truth of that contention, but when a tax is being increased the position is reversed. For instance, -when changes in the rates of customs and excise duties are being made a similar situation to that contemplated by the Deputy Leader of the Opposition naturally arises. Business people on an average keep a certain stated stock, and unless some business man has the good fortune to anticipate by guesswork the extent of the downward trend of the tax, the concessions operate in reasonable fairness to all traders.

The honorable member for Werriwa (Mr. Lazzarini) and others, asked why the tax has been lifted from boots and shoes, while singlets, shirts and other items of apparel have not been exempted. At first sight there is some justification for the criticism, butT submit that upon examination, it is not justified. The Government, having made a study of the items most in use by the majority of the Australian community, decided that boots and shoes were an easily definable item of wear, which could be administered. In granting such a concession the Government desires, above all things, to avoid creating competitive anomalies. The exemption of footwear, whether it be leather, rubber or canvas, from sales tax, can be simply administered by the department. With, however, a range of wearing apparel, such as suits, men’s and women’s singlets, sox and other articles, it is difficult to define what classes shall he exempted and what shall not. Only a limited amount of revenue could be yielded in order to grant concessions, and the Government had, therefore, arbitrarily to select certain items and reject others.

Mr Lazzarini:

– The Treasurer is more concerned with administrative ease than with the justice of a concession.

Mr CASEY:

– - It is of little moment to the head of a household if he pays sales tax on shirts and not on boots so long as he is relieved of the obligation to pay a certain amount of tax.

Mr Nock:

– It is of greater advantage to exempt certain lines altogether than to have half an exemption on one and half on another.

Mr CASEY:

– That is so. At any rate the Government feels that the individual will get the benefit of the exemption of footwear.

The honorable member for Boothby (Mr. Price), referred to building materials. The Government has relieved the building industry of almost all the sales tax mat it baa to pay on building materials. In adopting that course it was actuated by the desire to do something to relieve the unemployment problem by making conditions easier for the building trade. It has now extended the list of exemptions to the building industry by the abolition of sales tax on pipes and piping of all descriptions as well as on several other items in this schedule.

The honorable member for Denison (Mr. Mahoney) made some play on the fact that the wealthy should be taxed and that the poor should be exempt. That is the policy of the Government and it is being given effect to in. the directions that I have already mentioned.

Perhaps I may now deal with a request voiced by a considerable number of honorable members on both sides of the House, that the sales tax on tractors, in particular, and on other road-making machinery used by local-governing bodies should be lifted. It is a matter that has been under consideration for a considerable time. During the last two years I have received numerous representative deputations upon it, and the matter has been considered most carefully indeed. The local-governing bodies have the benefit of all the general exemptions from sales tax that the rest of the Australian community enjoys.

Mr Stacey:

– The Treasurer is levying b tax on a tax.

Mr CASEY:

– Twelve months ago the local-governing bodies were also given immunity from tax on road-making materials. The list has been, slightly extended by the unconditional inclusion of bitumen and bituminous emulsions in this schedule. They are also exempt from the tax on all gas and electricity which they make and supply, and on timber, building materials of all descriptions, and practically all forms of road-making materials. Further a large number of specific exemptions from tax on requirements that local-governing bodies have to purchase have been made. ‘ But because tractors used in the primary producing industry and the timber industry are being exempted in this bill, honorable members suggest that local-governing bodies should be given a similar exemption. Some honorable members would go further and exempt from tax all roadmaking implements and machinery, and a third section would go further still and exempt every requirement of localgoverning bodies. First of all I point out that there are no less than 2,000 localgoverning bodies, shires and municipalities in the Commonwealth, and that by no means completes the list, because there arc also in the capital cities, such corporations as the Sydney Water and Sewerage Board and the Melbourne and Metropolitan Board of Works, and at the leading ports, harbour trusts which must also be taken into consideration. In short, some honorable members contend that 2,000 local-governing bodies should be exempt from taxes. The combined contributions of local-governing bodies to Commonwealth revenue through the medium of the sales tax is between £80,000 and £100,000 a year. Already a greater part of the materials which they are called upon to purchase is exempt from sales tax. To any deputations that have approached me upon this subject T have always asked this question: “By how much could you reduce your rates individually or collectively if you were freed partially or wholly from sales tax on your purchases?” To the inquiry I have never received a reply.

Mr Fisken:

– ‘Would it not have been better to ask the deputations the number of extra miles of road they could have constructed if they were exempted from the tax?

Mr CASEY:

– I admit that that would have been an alternative question, but it was not submitted to me in reply to my query. Taxation is an unfortunate necessity and nobody likes paying taxes. The amount of taxation levied in Bales tax on local governing bodies could not possibly be reflected in the rates charged to private individuals. If the requirements of these bodies were completely exempted from sales tax, it could make no appreciable difference to the rates levied by them. If one looked for a tax which could be equitably spread over all sections of the community, he could not get a fairer group to tax than local governing bodies. But in order to indicate that the Government is not by any means indifferent to their position, I point out that last session Parliament passed a measure whereby for ten years the Commonwealth will contribute £100,000 per annum, which is rather more than it collects in sales tax from local governing bodies, to the. States for distribution among the local governing bodies, the objective being to assist them in carrying out their works, and practically no definition is stipulated of what those works shall be. This was done in an attempt to decentralize expenditure on works and to improve the financial status of local governing bodies. The Commonwealth Government is thus returning to these bodies considerably more than it collects from them in sales tax. It would be quite anomalous and it would introduce complexities into the sales tax which the Government in this measure is endeavouring to avoid, if we were to give a qualified exemption to local governing bodies in respect of certain items of machinery, road-making and otherwise.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– But the Treasurer has included two qualified exemptions in connexion with the agricultural and timber-getting industries.

Mr CASEY:

– The timber industry on account of its relation to primary industry generally is a logical applicant for exemption in respect of tractors. The Government is attempting completely to exempt primary interests by extending the exemptions from a limited range of articles to include timber-getters who can be logically included among primary producers. That they were not included in the exemptions previously was an unfortunate oversight. The tax is like a house of cards and every claim for exemption on almost any article can be logically defended. But every claim for exemption must be carefully examined, otherwise, if accepted without close scrutiny, anomalies would be created, and it might be difficult not to extend the privilege to a fairly wide range of related articles. I agree that there is a definite case made out in this chamber by honorable members for the exemption of road-making materials. As the honorable member for Adelaide (Mr. Stacey) said, a superior taxing authority is taxing an inferior one. But that is not the end of the story. The

Commonwealth Government and inferior taxing bodies, tax each other both ways. It is not illogical to maintain the present position which is not an onerous one in respect of local governing bodies. I think that the Commonwealth Government has done extremely well by the local governing bodies in the past and it would be anomalous to extend to any one article which they purchased exemption from sales tax unless it were prepared to exempt the whole of the requirements.

Mr Forde:

– Has the Treasurer considered the general tapering down of the whole field, instead of adding to its complexities ?

Mr CASEY:

– I think that the Government has given an earnest of that desire in the reduction of the rate, first from 6 per cent, to 5 per cent., and now from 5 per cent to 4 per cent. 1 have no doubt that, as revenue conditions and governmental obligations permit, in the future, the tax will be tapered down still further. The Government recognizes that the sales tax is one of the emergency impositions, and in the future will make whatever reductions are possible.

Mr Prowse:

– Will the Treasurer note road-making machinery for consideration when the next exemptions are being projected ?

Mr CASEY:

– These items will be sympathetically examined, particularly if the claim for their exemption is accompanied by logical reasoning. Just as it does not matter to an individual whether his shirts or his boot3 are exempt, so it does not matter to a local governing body whether the exemption applies to one or another of the items of road-making machinery. I think that we are faced with the adoption of one of two alternatives - to leave the situation as it is, or at a cost to the revenue of £100,000 a year to remove the tax from every item which a local governing body has to buy. What is done for shires and municipalities would also have to be done for a harbour trust, such as the Rockhampton Harbour Trust, referred to by the Deputy Leader of the Opposition (Mr. Forde).

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

– A harbour trust is not a local governing body under any State act.

Mr Forde:

– It is a public authority.

Mr CASEY:

– lt is a semigovernmental body. The claim of the Rockhampton Harbour Trust for the exemption of cranes used on its wharf has as much force as that of any local governing body for the exemption of a road-roller. What the Government has in mind are the semi-public bodies which discharge certain functions for the community. Shires, municipalities, water and sewerage boards, metropolitan boards of works, harbour trusts, and the like, must be considered conjunctively if we are to act logically. The Government could not exempt road-rollers without also exempting cranes used on the wharf at Rockhampton.

Air Honorable Member.- Has a request been made by the Minister for Health for the exemption of perambulators?

Mr CASEY:

– Both last year and this year the honorable member for. Cook (Mr. Garden) approached me with respect to the sales tax on perambulators. As I said last year, perambulators cannot be regarded independently. As probably many honorable members know, there is a wide range of perambulators. I understand that there is one fairly large factory in the electorate of the honorable member for Cook which supplies practically the whole of the requirements of the State of New South Wales. There is not a great deal of competition, and it has no great difficulty in passing on the small amount of tax involved.

Mr Forde:

– What is the total amount of revenue derived from this item?

Mr CASEY:

– It would be at least £5,000 a year. An article of this description costs the average family, I should say, about 30s. It is not bought every day, consequently the imposition is not heavy.

The honorable member for Darling Downs (Sir Littleton Groom) mentioned the sales tax on leather used for the repair of harness and the like, and very rightly pointed out that this is one of the few uses to which leather is put in which sales tax is attracted. I give to the honorable -gentleman the assurance that when the next list of exemptions is being arranged, this item will receive the most sympathetic consideration.

The honorable member for Fawkner (Mr. Holt) has questioned me in regard to the sales tax paid by tailors. About 40 per cent. of the tailors of Australia are not under the necessity to register a» sales tax payers, because they have a turnover of less than £1,0001 Not being registered, they cannot quote certificates when purchasing cloth or other material, and, therefore, have to buy the cloth, tax paid, because the factory or wholesale merchant charges a price which includes the amount of the tax. On the other hand, when the tailor who is registered and has a greater turnover than £1,000 a year purchases cloth or other material, he quotes his certificate, and thus is legally entitled to obtain it for an amount which does not include tax. Under this bill, the total sales figure on which tax is imposed is to be reduced from two-thirds to one-half, the result of which will be to bring the position of the registered sales taxpayer very close to that of the unregistered sales taxpayer, because on the average probably 40 per cent, of the cost of a suit or a garment of any description is represented by the cost of the constituent material. The position of the bespoke tailor, or woman’s garment-maker, therefore, will in future be very little different from that of his unregistered competitor.

Mr Holt:

– He will also benefit from the reduction of the rate.

Mr CASEY:

– That is- so. This is a problem into which many factors enter. There are the unregistered tailor, the registered tailor, and the large establishments in the capital cities which supply ready-made and semi-ready-made clothing to the so-called bespoke tailor, who, in many cases, makes slight alterations and sells the suit as that of a bespoke tailor. The competition between the different factories has to be taken into account in considering what may be done for the industry as a whole. The Government came to the conclusion that the reduction From 66§- per cent, to 50 per cent, was probably the fairest action that could be taken.

The item aerated waters has been mentioned by the honorable members for Corangamite (Mr. Street), Robertson (Mr. Gardner), and Fawkner (Mr. Holt). The position of this industry is, I think, somewhat comparable to that of photographers, and several other industries which have not kept pace with the general recovery of prosperity in Australia. It would, I think, be wrong to say that they are languishing; but, at all events, they have not responded to the general increase of prosperity which has been witnessed, particularly in the last two years. I suppose it is only human nature for those who are in charge ‘ of them to ascribe to the sales tax a larger measure of responsibility for their condition than is actually the case; in other words, to ascribe to taxation what, in effect, arises almost entirely from economic causes. The Government maintains that neither the portrait photographer nor the aerated water manufacturer contributes an essential of life. It would be wrong to say that they provide luxury items, but, on the other hand, they are articles which are not essential to life, and it is with respect to those essential articles that the Government has been at great pains to afford the first measure of relief. In the United States of America, where sales tax is fairly widespread, the aerated water and cordial manufacturers are regarded as persons who are carrying on a luxury or semiluxury industry, and have not been granted the exemption which has been given to a wide range of other manufacturers.

Mr Thompson:

– Is the honorable gentleman aware that Greeks and other foreigners can manufacture aerated waters and sell them over the counter free of sales tax, while Australian manufacturers have to pay the tax?

Mr CASEY:

– That is the case when they are sold by the glass.

Mr Thompson:

– That is unfair competition.

Mr CASEY:

– It is competition which it would be extremely difficult for the Government to overcome. The Government has first to direct attention to essential items in the consumption of the average Australian household. It has frequently given consideration to photography and aerated waters, but there are still a number of items which it believes should first be relieved of the tax. It has not yet managed to provide for the exemption of all the items which are consumed. The attempt to do so is being made in fairly logical order. lor that reason, the two principal items in the present schedule of exemptions are footwear and tea, which have to be bought at frequent intervals. 1 believe that honorable members are unanimous in agreeing that they should be in the forefront of the Government’s proposals.

The honorable member for West Sydney (Mr. Beasley) has referred to aids to manufacture. I shall reserve my remarks in that connexion until the committee stage, when doubtless a good deal of further discussion on the point will take place. I merely say now that, so far as filter cloths of cotton, wool, and other material are filter materials, they are exempt from the sales tax as an aid to manufacture under this measure.

The mining industry has been referred to by the honorable member for Kalgoorlie (Mr. A. Green). I would remind him that the law already provides for the exemption of a very wide range of the goods used in that industry. In fact, practically all of the essential materials now escape the tax. Machinery, implements, and apparatus for use in the industry are exempt. Those are articles which are used in the actual mining operations, and in the treatment of the products of those operations in the metallurgical aud milling side of the industry. Practically everything used in milling, mining and metallurgical processes is exempt. Explosives are also exempt, together with substances used in the recovery of metals by the flotation, cyaniding, electrolytic and similar processes.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– What about machinery for making zinc shavings?

Mr CASEY:

– I think that is getting a little remote.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

– The shavings are made at the mines.

Mr CASEY:

– It is a very small item in the economy of a mine. [Leave to continue given.] The industry will benefit also by the proposed exemption of lubricating oils and greases. The Government will be pleased to consider representations made by the honorable member at a future date in support of the suggested exemptions in which he is interested, but I hope that he will not press for them at the present time. All claims for exemption must be very carefully studied, but I promise him that if he will submit his representations iu detail they will receive the sympathetic consideration of the Government in regard to future proposals.

The date of the operation of the exemptions will be to-morrow, the26th September, except in respect of those specific items for which a different date has been fixed. Therefore, as from to-moTrow, traders may deem the items which have been exempted as free from tax.

Mr Gregory:

– What about ammunition?

Mr CASEY:

– The matter of the exemption of cartridges used for the extermination of pests has been under consideration. It was raised previously by the honorable member for Bendigo (Mr. E. F. Harrison), particularly in connexion with cartridges used for the destruction of hares, but I presume that the honorable member for Swan (Mr. Gregory) desires that the exemption be made wider. I remind the honorable member that an exemption of that kind would have to be conditional, which would make it exceedingly difficult to police. Of the sporting ammunition used in Australia, only a relatively small amount is used for the extermination of pests, and I ask honorable members to imagine the complexities which would confront a trader if he were required to find out before selling ammunition whether or not it was to be used for the extermination of pests. An exemption of that kind would merely create further anomalies, and our object is to simplify the law rather than to complicate it.

During the committee stage it is proposed to move a small amendment of a technical character in connexion with the exemption of aids to manufacture.

Question resolved in the affirmative.

Bill read a second time.

In committee:

Clauses 1 and 2 agreed to.

Clause 3 -

The schedule to the principal act is amended -

by omitting sub-item (48) of item 1. and inserting; in its stead the following sub-item: - “ 48. Tractors (and covers therefor) for use in agricultural industry or for use in the timbergetting industry in the hauling of log timber.- Nos. 1 to 9.

Mr ARCHIE CAMERON:
BARKER, SOUTH AUSTRALIA · CP; LP from 1944; LCL from 1951; LP from 1954

.- I move-

That after the word “ timiber “ the words “or for use by local governing bodies”be added.

I have taken the trouble to look up the Hansard record of the Treasurer’s reply last year to the request that sales tax should be remitted on machinery used by municipalities, and it is a singular thing that it was almost the same, word for word, as the speech he made to-day in reply to similar requests. He expressed the same desire to avoid anything in the nature of oppressive taxation, and made the same promise that he would consider the request sympathetically with a view to seeing whether relief could be given in the future. Evidently the Treasurer does not realize the situation in many country districts. I represent a fairly large area, where the district councils, as they are called., have been passing through a particularly trying time. Many of them are owed thousands of pounds in rates, and if the Treasurer will look up the report of the Wheat Commission dealing with the finances of municipal councils, he will see that practically none of those in the wheat-growing areas are financial. Thus the Commonwealth, with abundant revenues, is forcing the municipal councils, who have not been able to pay their way or keep the roads in, order within their borders, to pay taxes which the Commonwealth can do without. I realize that there are other items beside tractors in respect of which remissions should be granted, but they can be dealt with as we come to them. It has been objected that, if we extend the remission to local governing bodies as such, it will automatically include such bodies as harbour boards, hospital boards, sewerage authorities, etc., but I do not agree with that. The term “local governing body” has a a definite meaning when used in State legislation. It means those local governing bodies, elected by ratepayers, and having the right to levy rates in the areas they serve and control.

Mr FORDE:
Capricornia

.- I support the amendment, because it will give relief to a large number of local bodies throughout Australia who are at present in financial straits. We know that a most important work is being done by those who serve, usually gratuitously, on these local bodies. Many of these local authorities find the greatest difficulty in paying the salaries of their staffs and the few persons employed on the maintenance of roads, etc. This refers particularly to the large number of country local governing bodies, and much the same thing applies to many of the municipal councils in the more remote districts.

The Treasurer (Mr. Casey) has explained that when this request was placed before him by deputations he asked whether, if it were granted, local bodies would be able to make any remissions of rates to their ratepayers. He has said that he received no reply to that question, but I remind him that while local governing bodies may not be able to reduce rates if they receive this concession, they may be able to keep men in employment for a month or two months longer in the year. I propose, at a later stage, to move as an amendment to clause 5, paragraph a c, that exemption be granted in respect of machinery, implements and apparatus for use by municipal corporations, or by other local governing bodies, or by public authorities, I am aware that the granting of this concession might result in a loss of revenue amounting to approximately £100,000 a year, but it would afford necessary relief to many local authorities such bb the Rockhampton Harbour Board, which is a semi-Government body assisted by the Government of Queensland. Its finances are in an unsatisfactory condition, and it has a debt of over £500,000.

When representations were made to the Treasurer some time ago for this concession, he replied in the following terms -

Similar representations have been made on behalf of many other quasi-Governmental bodies, e.g. municipal councils, water and sewerage boards, and trusts, harbour trusts, fire brigade boards, health boards, milk boards, etc.

I have gone carefully into this matter, and am well aware of the “case for the exemption of goods acquired by these quasi-Governmental bodies. The question will be considered when the terms of the proposed exemption are being finally settled.

Unfortunately, the decision has gone against the harbour board. I am pre pared to support the amendment before the committee, moved by the honorable member for Barker (Mr. A. Cameron), and I hope that he, in turn, will support me when I move my amendment.

Progress reported.

SALES TAX BILLS (Nos. 1 to 9), 1936.

Bills returned from the Senate without requests.

page 589

ORDER OF BUSINESS

Mr WHITE:
Minister for Trade and Customs · Balaclava · UAP

– I move -

That Orders of the Day Nos. 2 to 12 be postponed until after Order of the Bay IVo. 13, Government business.

Order of the Day No. 13, with which it is desired to deal, relates to the printing of the annual report of the Tariff Board. When this business was previously before the House on the 16th September, the Deputy Leader of the Opposition (Mr. Forde) asked why the motion did not provide for the printing of the annexure to the report as well as the report itself. The reason was that certain Tariff Board reports referred to in the annexure, although in the hands of the Government, had not been considered by it. Naturally, as such reports contained recommendations by the board they could not be printed at that stage. I have since discussed this subject with the Leader of the Opposition (Mr. Curtin), and he agrees with me that the annexure should not be printed. It is, therefore, desired now to invite honorable members to agree to the printing of the report without the annexure.

Question resolved in the affirmative.

page 589

TARIFF BOARD

Annual Report

Order of the day called on for resumption of debate from the 16th September, 1936, vide page 135, on motion by Mr. White -

That the report be printed.

Motion agreed to.

House adjourned at 3.3] p.m.

page 590

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

International Labour Conference.

Mr.Holloway asked the Prime Minister, upon notice -

In view ofthe fact that, under the Constitution of the International Labour Office, the decisions of the International Labour Conference arc required to be submitted to the Parliaments of the member countries for discussion and decision by each country concerned, will the Government give the House an early opportunity of discussing the report on the work ofthe Conference which met at Geneva in June last, and at which the Government was represented by the honorable member for Bendigo (Mr. . E. F. Harrison) ?

Disarmament

Mr Francis:

s asked the Prime Minister, upon notice -

  1. In view of the press intimation that the French Government has decided formally to propose to the League of Nations during the present Assembly the early convocation of the Permanent Committee on Disarmament, will he instruct the Australian representative at the Assembly to support strongly this further effort for world peace?
  2. Will the Prime Minister also convey a request to His Majesty’s Government in Great Britain for an invitation for its further cooperation in endeavouring tosecure further disarmament by supporting the French Government’s proposals?
Mr Lyons:
UAP

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

  1. The policy of the Commonwealth Government is to associate itself with every international effort to further the course of disarmament, and any French proposal for the convocation of the Disarmament Committee will receive the support ofthe Commonwealth Government when it comes before the League?
  2. His Majesty’s Government in the United Kingsdom has repeatedly announced that it will continue to strive for an international agree ment on disarmament, and in this respect the Commonwealth Government has no doubt as to its co-operation with the French Government.

Censorship of Books.

Mr Curtin:

n asked the Minister for

Trade and Customs, upon notice -

  1. Does the Censorship Board examine each book which the Customs Department bans from entry to Australia?
  2. How many books have been banned is the last three years?
  3. How many of these books have bees dealt with by the Censorship Board?
  4. What are the names of the books and their authors which the Customs Department has banned without reference to the Censorship Board?
  5. Which of the books banned by the Customs Department were printed and published in the United Kingdom?
Mr White:
UAP

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

  1. It is the present practice of the department, before banning any book under section 52 (c) of the Customs Act, to obtain a report on it from the Book Censorship Board. 2, 3, 4, and 5. It is not the policy of the Government to furnish the information asked for in these questions.

Australian Commonwealth Line of Steamers

Mr Clark:
DARLING, NEW SOUTH WALES

k asked the Treasurer, upon notice -

  1. What is the total loss incurred by the Commonwealth in connexion with the sale by the then Prime Minister, Mr. Bruce, of the Commonwealth Shipping Line to the Kylsant interests ?
  2. What amount of the debt has been paid to the Commonwealth to date, and what amount is outstanding?
  3. What steps does the Government propose taking to obtain the balance outstanding?
Mr Casey:
UAP

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

  1. As the transactions are notyet finalized, the eventual financial result cannot be anticipated?
  2. The price of the ships sold to the White Star Line Limited was £1,900.000. Of that sum an amount of £1,333,724 15s. 6d. has already been received (including the amount of £500,000 received from the re-sale of the ships) and a sum of £566,275 4s. 6d. is outstanding in respect of principal and £114,934 15s. 7d. in respect of interest.
  3. The White Star Line Limited is in liquidation, and dividends are being received as the liquidation progresses. The liquidator is the Senior Official Receiver in Great Britain. The interests of the Commonwealth are being very closely watched by the High Commissioner.

Royal Australian Navy

Mr JOHN LAWSON:
MACQUARIE, NEW SOUTH WALES · UAP

n asked the Minister for Defence, upon notice -

  1. Is it a fact that the Royal Australian Navy in May, 1935, was composed of the following: - (a) In commission - three cruisers, one flotilla leader, three destroyers, one sloop, one depot ship, and one motor boat; (b) in reserve - one cruiser, one seaplane carrier, and six destroyers; (c) under construction - one cruiser and one sloop; (d) fleet auxiliary - one fleet oiler?
  2. What ships of the above, (a), (b), (c) and (d) respectively, wore built in Australia, and what was the total of their displacement in tons?
  3. Where were the others built, and what was the total of their displacement in tons?
  4. What ships are sow under construction, and where ?
Sir Archdale Parkhill:
Minister for Defence · WARRINGAH, NEW SOUTH WALES · UAP

– Inquiries will be made, and a reply will be furnished to the honorable member as soon as possible.

Assistance to Wheat Industry.

Mr A GREEN:
KALGOORLIE, WESTERN AUSTRALIA · ALP; FLP from 1931; ALP from 1936

en asked the Minister for Commerce, upon notce -

  1. What was the amount of funds that were made available for the wheat bounty of last year in the States of New South Wales, Victoria, South Australia, and Western Australia, in each case - (a) on the total acreage; (b) on disabilities; and what was the basis in each State on whichthe disabilities grant was paid?
  2. What was the total grant made available to all States for these purposes?
  3. Whatwas the department, and the name of the officer, who had charge of the distribution in Western Australia?
Dr Earle Page:
CP

– The information is being obtained, and will he furnished to the honorable member later.

Government Assistance to Industries

Mr Curtin:

n asked the Minister for Trade and Customs, upon notice -

Will he state the amount of bounty paid to each industry in the Commonwealth for the year 1935-38?

Mr White:
UAP

– The answer to the honorable member’s question is as follows: -

Full particulars in regard to all bounty payments by my department during the financial year 1935-36 were tabled on the 10th September, 1936.

New B Class Wireless Station

Mr Beasley:

y asked the Minister representing the Postmaster-General, upon notice -

  1. Is it a fact that a licence has been granted for the establishment of a B class relay station, to be known as 3LK., with a licensed power of 3,000 watts?
  2. Will this power make it the strongest B class station in Australia?
  3. Is it a fact that this licence is to be held by or on behalf of 3DB Broadcasting Station Proprietary Limited, in which the Melbourne Herald holds all the issued shares, according to the statement made in this House on 3rd December, 1935, by the Minister for Defence(Hansard, page 2366) ?
Mr ARCHDALE PARKHILL:
WARRINGAH, NEW SOUTH WALES · NAT; UAP from 1931

-Inquiries are being made, and a reply will be furnished to the honorable member as early as possible.

London Funds

Mr Casey:
UAP

y. - On the 24th September, the honorable member for Bass (Mr. Barnard) asked the following questions, upon notice: -

  1. What was the amount of capital which went abroad last year, including payment of dividends to oversea shareholders in Australian companies?
  2. Does he agree with the views expressed by the Commonwealth Bank Board that London credits, although sufficient for immediate requirements, are not strong enough to bear the strain of an emergency?
  3. Is it a fact, as reported, that London funds, including the note reserve, have fallen from £65,000,000 to £38,000,000 during the last two years?

The replies to the honorable member’s questions are as follows: -

  1. Information is not available.
  2. The Bank Board’s report stated: - “ London funds at present are sufficient for normal requirements, but are not sufficiently high to provide an adequate reserve against adverse circumstances. We should aim at a favorable balance of oversea payments for a number of years with a view to building up our London funds and maintaining them at a higher level.”

I am in general agreement with these views.

  1. Comparable figures to those published for 1934 are not yet available for 1936.

Cite as: Australia, House of Representatives, Debates, 25 September 1936, viewed 22 October 2017, <http://historichansard.net/hofreps/1936/19360925_reps_14_151/>.