15th Parliament · 1st Session
Mr. Speaker (Hon.G. J. Bell) took the chair at 10.30 a.m., and read prayers.
Motion (by Mr. Lyons) agreed to -
That the House, at its rising, adjourn until
Wednesday next,at 3 p.m.
– Will the Prime
Minister inform the House as to what work is to be proceeded with next week, and when it is proposed to sit on five days a week?
– When we reassemble next week the matter to be immediately proceeded with will be the continuation of the budget debate.
– May not that business be taken to-day?
– I am hopeful that it may, but I am not so optimistic as to think that it will be completed to-day, consequently, it will have to be continued next week. Consideration has not been given to the matter of sitting on five days a week, but should that become necessary it will be considered. At some stage on Wednesday the budget debate will be interrupted toenable a bill to be introduced providing for an amendment of the Ministers of State Act, so that effect may be given to the intention of the Government, already intimated, to increase the number of portfolios.
– Will the Minister for Commercestate whether, in connexion with the tariff policy of his party, the Canberra Times expressed the correct view in its leading article this morning when it stated that the Australian Country party hadworked in harness with the United Australia party for the last four years, and that there was no longer any diversion between the two parties on fiscal policy?
– I shall choose my own opportunity to state the policy of the Country party.
Report of Tariff Board
– Has the Minister for Trade and Customs received from the Tariff Board a report in connexion with braids, trimmings, tassels and similar items? If so, has it been considered by the Government?
– This report has been received from the Tariff Board. It is now being considered by the Cabinet.
– When the conference of Commonwealth and State Ministers convened by the Minister for Commerce to consider the disastrous position in which many wheat-growers find themselves on account of drought conditions is deliberating on this matter, will the right honorable gentleman ask it to consider also the disastrous position, resulting from drought, of many other primary producers, including fat lambraisers and apple-growers?
– If the Ministers for Agriculture of the States accompany their Premiers to the conference - I believe that they will - Ishall raise this matter.
– Will the Minister for Defence state whether a meeting of the Railways War Council has been held during the last twelve months? If so, is a report of its proceedings available, and if it is not yet printed will the Minister make available to members the information contained in the report?
– I am not in a position to say whether or not a meeting of the Railways War Council has been held during the last twelve months, but I shall make inquiries and inform the honorable gentleman of the position.
– Will the Prime Minister state what is the attitude of the Commonwealth towards the suggestion made yesterday in the Parliament of New South Wales by Brigadier-General Lloyd, that there should be a State Minister for Co-ordination of Defence Services and Supplies
– I have not heard of the suggestion to which the honorable member refers, but I shall look into the matter to see what is involved in it.
– Has the attention of the Prime Minister been drawn to the statement repeatedly made in the press that the Government does not intend to proceed with the national health and pensions insurance scheme? Is this a fact?
– I was not present at the close of proceedings of the House last night, but I understand that the Treasurer then made the definite and emphatic statement that there is no intention to postpone the operation of this scheme.
– He said that it would not be indefinitely postponed. ‘ Does that mean that it is not to bc postponed at all?
– I think that he made the definite and clear statement that no postponement whatever is intended.
– In the last financial year, this Parliament voted the sum of £200,000 for the technical training of unemployed young men, of which £55,000 was apportioned to the State of Victoria, the Government of that State undertaking to provide a similar amount. From information supplied to me, I find that in that financial year, only £3,04S was expended by the Government of Victoria on this account, and that since then only £11,952 has been expended on the purpose for which the money was provided. Can the Treasurer indicate whether any attempt is made by his department to supervise the expenditure of this money, to see that it is devoted to the purpose for which it is intended?
– From memory, I believe that the figures mentioned by the honorable gentleman are approximately correct. T am not in intimate departmental touch with the matter except on the finance side, but I shall have inquiries made to ascertain the position.
Branch at Ayr.
– Attached to the post office at Ayr is a good deal of vacant land’. For quite a considerable time the Commonwealth Bank has been endeavoring to secure portion of it on which, to construct a building to house the branch of that institution in Ayr, so as to avoid continuing in rented premises. Will the Postmaster-General make inquiries to see if it be possible to come to a suitable arrangement with the Commonwealth Bank to make this land available to it?
– I cannot be expected to know anything about a matter of that sort, but I shall certainly inquire into it, and if there is a chance of selling anything at a profit I shall be a starter.
– Now that the Treasurer is 100 per cent, air-minded, will he give further consideration to the matter that I raised some years ago, and on which I have repeatedly asked questions since, with respect to the granting, when applied for, of an allowance instead of the railway pass to enable Ministers and members to travel by air, or to utilize other forms of transport which may suit them ‘better than the railways?
– This subject has been fully considered by the Government in the past, but a plan could not be devised which would work equably in respect of members in varying circumstances. I undertake to make a further investigation of it, to see whether I can place before the Government a workable plan.
– Will the Prime Minister state whether, in the future, works such as the erection of post offices, will be carried out by the Department of the Interior, or will be under the control of a separate Minister for Works?
– When the bill is introduced next week to provide for an additional portfolio, the future intentions of the Government in regard to these and other works will be clearly defined.
– Will the very important legislation promised yesterday by the Minister for the Interior, in connexion with the registration of all aliens in the Commonwealth, be introduced this session?
– It is hoped that that legislation will be introduced this session, but naturally whether it is or not will depend on the progress of business.
– In view of the increase of the numbers of Ministers, has the Prime Minister considered the necessity to extend the length of the front ministerial bench, so as to obviate the possibility of the two Ministers sitting on the end thereof being elbowed off?
Question not answered.
Deferred Pay awd Pensions.
– Will the Minister for Defence state whether the inquiries instituted by his predecessor into the matter of deferred pay and pensions for the fighting services have been completed? If so, when may we expect action to be taken to improve the position?
– These inquiries are still in progress, and I am unable to say when they will be completed, but the honorable member may rest assured that they will be expedited and that the results will be made available as soon as possible.
– Recently the Prime Minister announced that the personnel of the Standing Committee on Liquid Fuels would be composed of one nominee each of the National Gas Association of Australia, the Australian National Power Alcohol Company and Distillers Limited, the Broken Hill Proprietary Company Limited, the Colonial Sugar Refining Company Limited, the Council for Scientific and Industrial Research, and the Department of Defence, and two nominees of the Commonwealth Public Service Board. In common with other honorable members, I have received a protest from primary-producing organizations because of the fact that there is to bo no direct nominee of the primary producers, all of whom want consideration to be given to the matter of the disposal of surplus primary products.
– Order ! The honorable member is following the practice frequently indulged in, of giving quite a lot of information when asking a question. This is quite unnecessary, and certainly is not in order. In asking a question, an honorable member must assume that knowledge of the matter is possessed by the Minister concerned.
– Will the Prime Minister consider a review of the whole position, with a view to the appointment to the Standing Committee on Liquid Fuels of direct representatives of the primary producing interests of Australia?
– If the honorable member will place the latter portion of his question on the notice-paper, I shall see that an answer is supplied to him.
Motion (by Mr. Casey) agreed to -
That he have leave to bring in a bill for an act to amend the Income Tax Assessment Act 1936-1937.
Bill brought up and read a first time.
– by leave - Honorable members are aware that, as the result of the report of the Royal Commission on Taxation, the Commonwealth and State Governments agreed to adopt, as far as possible, a uniform Income Tax Assessment Act. Having once achieved a maximum degree of uniformity between the seven Income Tax Assessment Acts in Australia the problem then arose as to how to maintain that uniformity. It was agreed between the various governments that no government would, on its own account, without prior consultation, introduce amendments of its own act. So the practice has been adopted of holding a biennial, and, where necessary, a moTo frequent than biennial conference of Taxation Commissioners to discuss the various amendments believed to have become necessary, and to do their best to arrive at unanimous conclusions as to amendments to be submitted to their respective governments. The most recent of- these conferences took place in Canberra in May last, and the bill now before us is the result, as far as the Commonwealth Government is concerned, of the deliberations of the Taxation Commissioners. The amendments embodied in this bill have received the full consideration of the commissioners, and they are in agreement that they should be passed into law.
– Were any representatives of the taxpayers members of that conference ?
– No ; the honorable gentleman and his friends are representatives of the taxpayers.
These amendments are not of a controversial character. They . are mostly technical, and are brought forward by reason of the experience of the operation of the uniform act over’ the last year or so. There are also certain drafting amendments, which it is considered should be passed. Of course, such of these amendments as are relevant to the State acts we have every reason to believe will be introduced in similar amending bills in the Parliaments of the various States. To assist honorable members in the consideration of this measure, I have had a memorandum prepared describing each of the proposed amendments, and, therefore, I do not now propose to go to great length in elaborating what is contained in the memorandum. I propose at the end of my speech to suggest that the further consideration of the bill be adjourned for at least a week, or possibly a fortnight, to give honorable members proper time for the consideration of its provisions. I shall briefly describe the principal provisions of the measure.
One provision is to enable confidential information in regard to income tax returns to be made available to the chairman of the National Insurance Commission, in order to avoid duplication by the collection of information by two governmental authorities. Thi3 is in conformity with the provisions of the act whereby the Commissioner of Pensions is allowed to have access, confidentially, to information contained in income tax returns.
A weakness in the present provisions of the income tax law has become apparent, us it is possible for companies to pay larger dividends than is proper out of the proceeds of exempt income. It is considered that this loophole should be closed, and provision is made in the bill to ensure that the proper expenditure in earning exempt income is debited against that income before it is available as exempt income for the purpose of paying dividends exempt from taxation.
It is proposed to insert another provision to carry out the original intention of the Government and the Parliament in respect of exempt dividends from profit.! earned by gold-mining companies. As the law now stands, the freedom from taxation in respect of these dividends is lost once the dividends pass through the hands of .a holding company. It was believed that this was not the intention of the Parliament in the first place, and the amendment seeks to maintain that exemption, even when the dividends technically go through the hands of the holding company before they are distributed to shareholders.
Following provisions made in the Queensland Income Tax Assessment Act, deductions are to be allowed to recoup expenditure incurred by the owner of a franchise granted for a public purpose, if the owner is required to hand over the assets to a government, or to a public authority without compensation after a certain period. Up to the present time, I think that this provision will apply only to Queeusland, where franchises have been granted in respect of the building of a toll bridge and the building of a toll road. Assuming that the amount of capital outlaid by a company to build a bridge was £100,000, that the franchise was for twenty years, and that, at the end of that period, all the assets of the company were to become the property of the State Government, it is believed to be proper that the law should allow an annual deduction to the company taking up such a franchise of a proportion of its capital corresponding to the number of years for which the franchise is granted. In other words, a company which spends £100,000, and has a franchise for twenty years, should be allowed £5,000 a year as a deduction from its profits before they are assessed for taxation.
– That is quite fair.
– It is. Such a provision is, as I have already said, part of the law of Queensland.
Another proposal in the bill is to amend the Commonwealth act to make provision for the allowance of deductions of national insurance contributions by employees, and on this, I think, the House will find itself in agreement.
Another provision relates to private companies. As honorable members know, the law contains a provision whereby a certain percentage of the profits of a private company have to be distributed, and, if they are not distributed, they are deemed to have been distributed for taxation purposes, and are taxed at the rate applicable to the individual shareholders, who either receive, or are deemed to have received, dividends at a certain rate. As the law stands, these companies are unable to deduct losses made in any ex-Australian business or trading. The Commissioner is obliged to deem a certain percentage of the profits made in Australia by a private company to have been distributed, thus attracting a greater amount of tax, while at the same time the company may have made losses, large or small, which it is not allowed to offset against its profits.
Another point has arisen with regard to the taxation of shipping freights. This taxation is not an easy matter, from the Commissioner’s point of view. For many years, the practice has been to take the total sum received by way of freights, and to deem 5 per cent, of that to he profit. On that 5 per cent, the Commissioner is enabled, under the law, to levy tax.
– The companies make more than a 5 per cent, profit.
– The percentage varies from time to time. No difficulty is experienced in the assessment of payments for freight, except in the case of wool. In the carriage of wool overseas, a system of rebates operates. A company is not allowed to take into account the benefit of these rebates in returning its total net freight in respect of the carriage of wool overseas. This problem has been known for some time. The Government has gone into the matter to soe how the difficulty could be overcome, and it is believed that the provision contained in the bill will enable the Commissioner to exact his proper modicum of tax from freights earned in carrying wool in the same way as in regard to freight charges on other commodities.
– That is 5 per cent, as calculated on freight earnings, and should not be confused with interest in the ordinary sense.
– That is so.’
A rather complicated point in respect of the taxation of re-insurance premiums paid to overseas firms has arisen. As the law now stands, the Commissioner taxes an Australian company on the profits earned in its insurance business carried out in Australia. There is provision in the law whereby it is mandatory that re-insurance entered into by an Australian insurance company with an overseas insurance organization should be taken into account, and either the profits or losses on the re-insurance credited or debited against the profits of the Australian insurance company in Australia. This provision seems satisfactory in theory, but it does not work out well in practice. The Commissioner, who, I think, does not lack agility in carrying out the law, has found it practically impossible to give effect to it in this regard. He has had many conferences with the insurance companies, and the proposal is now made that the whole of this re-insurance provision should be taken out of the law as unworkable. In the future, an Australian insurance company will be taxed on its profits in Australia, and, whether it re-insures overseas, or makes a profit or loss on its overseas re-insurance, will have nothing to do with the taxation in Australia. The Commissioner has given an assurance that there will be no appreciable gain or loss of revenue as the result of this legislation. He has not been able to make assessments for the last two years, taking into account this re-insurance business, because of the almost insuperable tangle of the accounts associated with such transactions.
– Would not the income from insurance be paid in Australia by Australians, even if re-insurance had been taken out overseas?
Mr.CASEY.-Iam advised that the difficulty arises largely out of the impossibility of dissecting the accounts of overseas insurers. However, I shall obtain information in regard to the matter, and make it available later.
– How can anyloss a rise in connexion with this business?
– If no loss arises the premium paid for re-insurance is itself a loss. If there is a loss in respect of which re-insurance has been made, there is a profit on the re-insurance transaction. The provision which it is proposed to amend may be regarded as an attempt to achieve perfection. Unfortunately, in practice, it has been found unworkable.
– What will be the effect on the revenue of Australia of the amendments proposed?
– I do not think that the net effect will be very great. There will be small gains in some directions, and small losses in others. No estimate has yet been prepared, but I shall have one made available to honorable members before the debate on this measure concludes.
Debate (on motion by Mr. Forde) adjourned.
Mr. SPEAKER (Hon. G. J. Bell).I have to inform the House that I have this day issued a writ in connexion with the by-election for theWakefield electoral division, and that the dates fixed were those announced to the House on the 2nd November.
In committee: Consideration resumed from the8th November,1938(vide page
Clause 15 - (1.) After such date as is notified in the
Gazette by the Minister on the recommendation of the board, a contract for -
Upon which Mr. Holt had moved by way of amendment -
That at the end of sub-clause ( 1 . ) the following words be added: - “ but no such contract for insurance shall be made by the board without the approval of the Minister with a person or company not carrying on the business of insurance in the Commonwealth on its own account or with a person or company which in the Commonwealth merely grants cover or receives premiums, proposals or requests for insurance business on behalf of or for transmission to any company, person or association of persons outside the Commonwealth “.
.- The purpose of this amendment is to ensure that no contract of insurance shall, except with the approval of the Minister, be made by the board with a company or body of persons not carrying on business in Australia. I support the amendment, and I cannot see that there can be any real objection to it. If the Minister believes that the charges of Australian companies are unreasonable he will have power to authorize the board to give the business to an overseas company. The Opposition has invariably stood for preference to Australian companies. They have a prior claim to whatever business can be given by hoards of this kind, consisting mainly of primary producers who are dependent very largely on the Australian market, which returns, on the average, higher prices than are obtainable overseas.
– But this is an export board.
– Yes, but it will be handling part of the produce of Australian farms, and the rest of that produce will be sold on the Australian market. There is a sort of homeconsumption price for much of our produce, such as dried fruits, sugar, &c. In the circumstances, we have the right to expect that this insurance business shall be given to companies registered in Australia.
– Would the honorable member apply that to sugar also?
– I am prepared to apply it to everything. I do not think of one industry only, as the honorable member thinks only of wheat. I am not like him who, as a member of this Parliament, supports the payment of bounties, and then accepts them himself. We must view these matters from an Australian aspect.
The board will have to make a choice between Australian and British companies on the one hand, and groups of underwriters on the other. The Australian and British companies have invested their capital in Australia, they have erected buildings here, employed Australians and paid taxes to the Commonwealth and State Governments, and they employ Australians at Australian award rates. Their policies are also subject to stamp duty, and they support Australian loans. I regard insurance as a necessary service just as banking is, and export boards must make provision for the insurance of produce sent overseas. I am not much impressed by the argument of the honorable member who said that, if we accept this amendent, we may give offence to British insurance companies. The same thing has been said of every step. taken to establish industries in this country. When protective duties were imposed with the object of forcing overseas manufacturers to establish branches in Australia, we were told that we would probably give offence to British manufacturers and consumers, who would refuse to buy our produce. That is an outworn Argument.
– This amendment will protect those British companies which are operating here.
– That is so. Even the purely British company that has not established a branch here, but works through a broker, will still have an opportunity to participate in the business of the board if the Minister is satisfied that the Australian companies are charging too much. Under the Commonwealth Insurance Act Australian insurance companies, and British companies established in this country, have made deposits approximating £3,000,000 as a guarantee that they will be able to meet their obligations. If, at any time, Parliament is not satisfied with the way in which insurance companies in Australia conduct their business, it has power to impose regulations. Australian companies, and British companies established in Australia, employ about 4,000 Australians, who, with their dependants, constitute a body of approximately 12,000 consumers. One cannot over-emphasize the importance of the local market to the primary producers, especially at this time when overseas markets are so uncertain, and when the producers here have to compete overseas against the produce of low-wage countries.
This is not a matter which should require much debate. No hardship will be inflicted on the primary producers by the acceptance of the amendment. Our first, duty is to Australian companies, or to British companies which have established their businesses in Australia. We do not hesitate to apply this principle to tariff protection, and if it is good in the case of secondary industries, it will be good also in the case of insurance. I believe that the great majority of the primary producers are in favour of giving this business to Australian companies, or to British companies with branch offices in Australia.
– On principle I am entirely opposed to this amendment. At the outset, I desire to make it clear that I have the most friendly feelings towards those insurance companies established in this country, and I should like to see them, if possible, obtain the business. I even go so far as to say that the board would be well advised to give, say, a 5 per cent, preference to local companies, rather than to give the business even to British companies overseas. Having said that, however, I register my emphatic opposition to putting in the bill anything of the character proposed in the amendment. It is entirely wrong in principle. Indeed, I regard it as an export tax, and to impose any levy upon a primary commodity, which is obliged to face world competition, is not only unwise and unjust, hut is an economic crime. It. is recognized by honorable members generally that everything possible should be done to avoid placing unnecessary burdens on our export industries. On this point I refer to the practice adopted in respect of packing cases. A duty is imposed on shooks imported for the purpose of making butter boxes or packing cases for dried fruits, but that duty is invariably remitted when those cases are used in the export of those products. That practice is simply a recognition by Parliament of the principle that we must not place any burden, even if it would operate to the benefit of other local industries, on our export trade. The expenses borne by the apple and pear industry in respect of freights, marine insurance, packing, and numerous other incidental costs are larger in proportion to the return than is the case in respect of the products of any other of our primary industries. Some years ago I took the trouble to investigate these costs, and found that, in some cases, they were as high as 6s. and 7s. a case, sometimes being more than the actual return.
– What is the cost of insurance?
– I cannot say, but on” 4,800,000 cases at, say, Id. a case, it would work out at £20,000. An increase of id. a case would mean a total extra cost to the industry of £5,000, which is probably more than sufficient to meet the annual expenses of the board.
– The honorable member is not suggesting that open competition for this insurance business would save the growers as much as one farthing a case?
– That estimate, with competition stifled, is not unreasonable. Apart from other considerations, however, it would be foolish to insert a provision in this bill which would treat ungenerously so great a purchaser of our apples and pears as is Great Britain. Great Britain is undoubtedly our best customer, not only for apples and pears, but also for almost all of our export products which we find most difficult to sell. We have a world market for wool, and a very shrinking world market for wheat, but for fruit, lamb, butter, cheese, honey, eggs, and frozen pork, and many other products, Great Britain is almost our only market. At the same time, however, that market is not capable of indefinite expansion; indeed, there are signs that its absorptive capacity has already been stretched to the utmost. We are now at our wits end to find profitable markets for many of our products. I point out that one of the objects of this bill is to enable the imposition of quotas on all of the States because sufficient markets may not be available to consume all of the products of this industry. In view of that fact, is it businesslike to slap our best customer in the face, as it were, a customer who gives us a substantial preference, by preventing British insurance companies from competing on even terms with our own insurance companies? I remind honorable members that hundreds of thousands of cases of our fruit actually become the property of the overseas buyers before they leave our wharfs, the buying being done, in many cases, at this end. Should we say to those people who have bought our products at this end, that British companies shall not be allowed to insure these goods?
– My amendment does not affect British insurance companies.
– It would affect them in the event of the board deciding, as it has the power to do, to make a contract to cover freight and insurance rates for the whole of the fruit exported. Whilst I emphasize that I have the most friendly feelings towards Australian insurance companies, and, indeed, suggest that the board might go so far a3 to enable them to get a small preference in this business, I still believe that it i3 absolutely wrong to prevent the board from exercising discretion in this matter. It should not be made mandatory for the board to discriminate against so valuable a customer as Great Britain. If the proposal embodied in the amendment be adopted, I suggest that we should be obliged to insert a similar provision in all of our other legislation of this character. If we agree to this amendment we simply should not have a leg to stand on in opposing similar amendments of legislation dealing with five other important exportable primary products. It would be perfectly safe to give discretion in this matter to some Ministers, but I could imagine a Minister being in charge of this legislation who would be such an extremist in his belief that every preference should be given to Australian concerns that overseas competition would simply become non-existent. It would be a good thing for our local insurance companies if the door were allowed to remain open just sufficiently to enable a degree of competition to be maintained in the interests of our exporting industries. For the reasons I have stated, I oppose the amendment.
.- I support the amendment moved by the honorable member for Fawkner (Mr. Holt). [Quorum formed.] I do not support the amendment out of any very friendly feeling towards the Australian insurance companies. I recognize, as most people do, that the Australian companies exploit the people of this country just as much as do overseas companies.
– Yet the honorable member places their ‘interests before the interests of the apple-grower.
– I am not doing anything of the sort. Unlike the honorable member for Gippsland (Mr. Paterson), I have no friendly feelings towards any section, of those people who invariably extract all they possibly can from the primary producers of this country. I do not believe that it will make much difference if the Australian insurance companies are given a monopoly of this business or not. Whilst I recognize that one of the dangers of the amendment is, that, if the Australian companies are given such a monopoly, they will find it so much easier to put their heads together with the object of exploiting our apple-growers, I also recognize that competition between insurance companies, whether they be English or Australian, virtually does not exist. I suggest that, even at this late stage, the Minister might see fit to amend this measure in order to enable the board itself to do its own insurance business.
– That is what the bill provides for.
– I suggest that the board itself should handle this work by making a charge on all apples and pears exported corresponding to the - premium which the private insurance companies would levy, and retain any profit for the benefit of the industry. Insurance companies are not charitable organizations. The board will have a permanent staff, including capable administrative officers who will be responsible for the collecting of levies in order to secure funds to meet administrative expenses. When that levy is being collected a special insurance levy, say, a id. a case, or whatever may be necessary, could also be collected. This extra work would not entail any appreciable increase of the cost of administration. In that way insurance premiums would go into the revenue of the board, to be kept in a separate fund. It can hardly be argued that that is not a sound proposition. In fact, as everybody knows, many organizations in this country operate their own insurance business in this way, the special funds being managed on a sound basis. After all, such a fund would be supervised by the Auditor-General. As the board’s insurance fund grows, and surpluses become available, appropriations can be made from it for the purpose of advancing the industry. That is the principle which we should recognize in this legislation. Differences of opinion as to whether Australian or British companies should be given the sole right to transact this business are altogether immaterial, although, personally, I should prefer that if our apple and pear-growers are to be exploited, Australian companies, whose employees consume these products on the Australian market, should be given preference in respect of this business over overseas companies, whether they be British or not. Even at this late stage, I suggest that the Minister should incorporate in the bill a provision to enable the Apple and Pear Board to establish its own insurance fund for the benefit of the people engaged in this industry.
.- I again appeal to the committee noi !o accept this amendment which, in my opinion, would be a gratuitous insult to the new board and would be unwarranted discrimination against the apple and pear growing industry. No effective argument has been advanced by the honorable member for Fawkner (Mr. Holt) in favour of his proposal. I am quite prepared to admit that under our protectionist policy, we should encourage insurance companies with offices in Australia , but it is incredible that any hon- orable member should wish to afford that encouragement by the means the honorable member for Fawkner has seen fit to propose. Apparently, he desires that the apple and pear industry alone shall be deprived of the right to make the best insurance contracts possible. I do not know of any export control board which, hitherto, has been deprived of this right. One of the purposes of this board will be to obtain the best possible terms for apple and pear growers, and to assist them to reduce costs to the lowest possible figure. It is surely fantastic that, at a time when we should be doing our very best to market our apples and pears in the most effective and economical fashion, the proposed board should be told in effect: “ Although other export control boards may seek the best insurance terms possible, this board may not do so “. I have represented dairymen in Parliament for a longer period than I have represented fruit-growers, and I have never been faced with any proposal that the dairymen should not, through their board, make the best possible arrangements for insurance.
– If I had my way, I would make a similar provision in respect of all export control boards.
– There might be something in a proposal to apply such a provision to all such export control boards, but I can see no justification for applying it only to the Apple and Pear Board. In effect the honorable member might as well say, “Dairymen may drive their motor cars at any speed they like; but apple and pear growers must confine their cars to a speed of ten or fifteen miles an hour “. He would also say in effect, “All other sections of the community, except apple and pear growers, may take as much strong drink as they like and behave in an offensive manner; but apple and pear growers must not do so. They must remain strictly sober and well behaved “. That is the logic which an honorable gentleman who is learned in the law is advancing ! If he has a desire to provide a degree of protection for all insurance companies operating in Australia, he should seek to give effect to it in a different fashion from that which he has seen fit to adopt. The proposal that this restriction shall apply only to the Apple and Pear Board is unpardonable and unthinkable. To impose such discrimination against only one section of the. primary producers would be damnable. I am amazed that the Prime Minister (Mr. Lyons), who represents many apple and pear growers, should not have appeared in the chamber toresist this amendment. It has even been suggested to me that the right honorable gentleman and his colleague (Sir Earle Page) are indifferent to the fate of the amendment. In fact I have been told that they would even favour it. I refuse to believe that this is other than an unwarrantable reflection upon them. If we allow this discrimination against the apple and pear growers we may imperil the success of the whole industry. Our apple and pear export trade is probably in a more precarious position than our export trade in connexion with any other commodity we send overseas. We all must realize that we are rapidly reaching the limit of our business in certain directions on the market of the United Kingdom. This is particularly true in respect of apples and pears. The Government of the United States of America is anxious to negotiate a trade treaty with the Government of the United Kingdom, and it desires an opening for American apples and pears on the market of Great Britain. I have been in England when we have been fighting for an adequate quota for Australian meat on the British market. I used to open The Times every morning to find inspired letters in it. from anonymous correspondents emphasizing the wonderful loyalty of the people of Argentina to the United Kingdom. It was said that more than a thousand men from Argentina fought for the Allies during the war. Nothing was said, however, about the 300,000 Australians and 400,000 Canadians who joined the expeditionary forces of Australia and Canada. Everything possible was said to discredit Australia in the eyes of the British people, and to emphasize the goodwill of the people of Argentina. The letters purported to be signed by Englishmen, but there was little doubt as to the source of their inspiration. I am glad to say that a number of Australians resident in England did excellent work for this country in denying such, disgraceful reflections on their country. I have no doubt that certain American interests in the same way will refer to this very debate as an attempt by Australia to discriminate against British institutions. Whatever may be said, and I think little can be said, in favour of a proposal to apply a provision of this kind uniformly, nothing whatever can be said in favour of the application of it to one industry. We shall, in fact, imperil the success of our apple and pear industry if we adopt this curious, halfbaked idea of the honorable member for Fawkner.
– This apparently innocuous amendment has been introduced very late in the discussion of this bill. In fact, nothing whatever was heard of it until a couple of days ago. There is, however, a good deal more in it than meets the eye, and I shall bring under the notice of honorable members certain considerations which hitherto seem to have escaped their notice. Had certain facts been mentioned earlier, some honorable gentlemen who have spoken in favour of the amendment would not have done so. I make it quite clear that 1 do not quarrel with the protectionist policy of some honorable members of the committee who have participated in this discussion. Although I am a member of the Country party, which is usually regarded as being favorable to a low tariff policy, I have fairly broad views on the fiscal question, and have stated them from time to time. I believe that Australian industries must be protected. If this country is to be developed, secondary industries must be established on a reasonable basis, and must be accorded a reasonable degree of protection. But what is the position in regard to the Australian insurance companies? Already they enjoy almost a totality of the business of the fruit-growers. They enjoy 100 per cent, of the workmen’s compensation business of the apple and pear growers, practically 100 per cent, of their household and furniture insurance business, and also of other business in relation to the carriage of their fruit from the time it leaves the orchard until it reaches the ship’s hold. What happens when these companies are given a monopoly of business? To a great deal of the legislative programme of the Lang Government, I was totally opposed; but I give Mr. Lang credit for having established the State Insurance Office of New South Wales. That office was opened principally to assist with the operations of the Workers’ Compensation Act introduced by the Lang Government. The conditions of that measure were considered to be so stringent that the insurance companies felt that they could not offer rates which would be generally regarded as reasonably fair. The Lang Government thereupon opened the State Insurance Office, and during the seven years in which it transacted business it reduced the insurance rates by 50 per cent, and, although beginning operations with no capital, accumulated a fund of £624,000. The annual report of the Auditor-General of New South Wales for 1933 stated explicity that, athough the Workers’ Compensation Department commenced operations without any initial capital, it accumulated in seven years, after having provided for income tax, a surplus of £624,000. That is equivalent to a profit of nearly £100,000 a year. When the next government came into office it abolished the State Insurance Office on the ground that it did not believe in government, competition with private enterprise. The result was that in a very little while the premiums payable in respect of workmen’s compensation increased as follows: -
I could give other examples, but I have said sufficient to show what happens when the local insurance companies are given a virtual monopoly of business. I remind honorable gentlemen that no liberalization of the provisions of the Workers’ Compensation Act was made to justify such increase of premiums. The Australian insurance companies felt it necessary to increase the rates by more than 100 per cent. in some cases, and by nearly 100 per cent. in many others. The honorable member for Ballarat (Mr. Pollard) suggested that no great disparity was likely in the charges of the insurance companies with offices in Australia and those with offices abroad. Perhaps in the light of what I have said, he may alter his opinion.
All that I ask is that there shall be an open field of competition as was the case when the Government Insurance Office existed in New South Wales. What happens when there is competition was shown recently when the butter industry decided to give its export insurance business to Lloyd’s of London. There was an immediate protest which resulted in the Dairy Produce Board deciding to invite tenders. When the renders were received, it was found that whereas Australian companies offered cover at 5s. per cent., Lloyd’s rate was 4s.1d. per cent. It cannot be said that that difference of 20 per cent. is accounted for by higher administrative costs in Australia.
– The Australianin- surance companies have to pay arbitration award rates to their employees.
– What was the net amount saved?
– It represents about £5,000 per annum. It must be remembered that the object of this bill is to relieve the growers of apples and pears from some of their present troubles, as well as the further distress which is likely to follow unless legislative action be taken. Some time ago the Ogilvie Government in Tasmania called fora report on the fruit-growing industry. Mr. Limbrick, B.A., who presented his report to the Parliament of Tasmania in 1936, said -
It would be interesting indeed to know why one firm of shipping agents can get insurance for1d. (Australian currency) per case and another for1d. (sterling) per case while other insurances run to 1.78d. (sterling), equal to 2.2d. (Australian), or more than double the first-mentioned above …
In the light of the above discussion, and at the cost of some repetition, the. following recommendations are put forward for consideration : -
1 ) The State Fruit Board should make an effort to secure a reduction in insur ance charges. I am definitely of the opinion that the business could be underwritten at between¾d. and1d. per case, a potential saving of about £5,000 per annum.
I remind the committee that whether the insurance be placed with English or Australian companies, the premiums will be paid by the growers of the fruit. All charges must come out of the prices received for their apples.
– That is also where the profits of the insurance companies come from.
– I should not oppose the amendment so strongly ifI believed that by confining the business to Australian companies considerably more employment would be provided in Australia. The giving of a monopoly of the insurance business to Australian companies would provide employment for possibly a few additional typists, but the chief result would be an increase of the emoluments of the directors of the insurance companies in Australia.
– What about supporting my suggestion that the board should undertake its own insurance?
– Before agreeing to that suggestion, I should like to investiga te it further ; it may not be practicable at this stage. If a saving of 20 per cent. could he made it would represent about £.”i,000 per annum.
– How did the Dairy Produce Board make a saving?
– By calling for tenders, it obtained cover from British companies at rates 20 per cent. lower than those offered by Australian companies.
– The honorable member has not allowed for the fact that there is a home-consumption price for butter.
– The terms of the amendment are not mandatory.
– That may beso; but the amendment would take the management of the business out of the hands of the board, and vest it in the Minister. That is not desirable.
– The purely English insurance companies do not pay Australian faxes, orcomply with Australian awards.
– They probably pay wages as high as those paid by Australian companies. I am not arguing against Australian rates of pay. All I ask is that there shall be a check on the Australian companies. I believe that, in the main, the business will be placed with the Australian insurance companies. They ought to be able to get most of it because they have influential directors in every State and canvassers on the spot. As the Treasurer explained in his speech on the Income Tax Assessment Bill, a great deal of this money will, in any case, go to England in the form of re-insurance with companies there. In view of the precarious state of the industry, and the fact that a saving of even a id. a case means a great deal to the growers of fruit, I must oppose the amendment.
– The honorable member’s time has expired.
.- My amendment seems to have caused unnecessary concern. In moving it, I recognized io prime responsibility to either the growers of apples and pears or the insurance companies operating in Australia. My prime responsibility is to the people of Australia as a whole. I suggest that the best interests of the people would be served by action along the lines which my amendment contemplates. In order to show that my proposal is not the fantastic proposition that some honorable members have claimed, I shall quote from an official letter from the Prime Minister (Mr. Lyons) in reply to the request made by insurance organizations in 1935 that insurance cover for shipments of butter should be provided by companies operating in Australia -
The Government lias considered the special features of the situation as represented by the deputation which waited upon the Prime Minister on 19th September, 1935, and realizing the position of the Australian insurance companies in the matter, is exploring the situation with all Control Boards with the object of arranging a basis for future collaboration with the insurance companies domiciled in Australia when COl tracts are being arranged <or observance by all exporters of the particular commodities which the boards control.
My amendment would not have been necessary had the board carried out what was suggested in that letter. If my information be correct, the only export control board which now gives its insurance business solely to Australian organizations is the Dried Fruits Control Board.
I shall deal, first, with the contention that my amendment would give such offence to the people of Great Britain that they would immediately decline to accept further shipments of apples from Australia and would transfer their business elsewhere. If my amendment be fantastic, that suggestion is grotesque. Action along the lines of my amendment has been asked for by 75 insurance companies in Australia, The great majority of them are British companies which, in addition to providing employment here and paying taxes to the Commonwealth Treasury, expend within the Commonwealth a big proportion of the premiums received.
– In addition, they help to pay the home-consumption price for other primary commodities, aud to create a home market for them.
– There is no .homeconsumption price for apples.
– I agree with the honorable member for Richmond (Mr. Anthony) that the butter industry as a whole made a saving of about £5,000 in the year which he mentioned. The savings on the latest rates quoted would have been reduced since then to about £3,000 a year. It is true that a saving of about £5,000 was made in respect of a. total export of butter and cheese to the value of approximately £11,000,000, but that only means that instead of circulating about £41,000 in Australia, thereby creating employment and expanding the demand for goods and services in this country, about £36,000 was sent overseas as premiums to organizations operating there. It may be claimed that there was a saving to the producers of butter and cheese in the Commonwealth of approximately £5,000 but there was a loss to the people of Australia as a whole of about £41,000. I ask the committee to survey this matter from what I claim to be a national viewpoint, having regard to our established policy of protection. The saving effected by this industry would be negligible compared with the gross loss to the Commonwealth.
I agree with the honorable member for Flinders (Mr. Fairbairn) that it may appear discriminatory to single out this industry, and I agree that it is, possibly, not the best way to achieve the results at which I am aiming; but this is the only method that I now have to bring before the committee and the Government the desirability of retaining within our own shores those funds which are going overseas for services which can be effected here. The difference between the charge in Australia and the charge in England represents almost entirely the difference of working conditions between the two countries, rates of wages, and the like.
– That difference is due to competition. Take away the competition and there will be an enormous increase of the difference.
– I am prepared to meet that argument. The honorable member says, “Take away the competition and there will be an enormous increase of the difference”, but there are 75 companies in’ Australia, some Australian, some British and some New Zealand, and there is-
– A close combine.
– When the honorable member makes that assertion he shows that he has had little experience of private insurance companies. There is very keen competition between those companies. I do not desire to inflict a burden upon the apple and pear industry, and to allay any fears as to the charges that it will be called upon to bear, I point out that the whole of the savings effected on a gross export of more than £11,000,000 by the butter and cheese industry in 1935 amounted to £5,000; to-day the savings would not be more than £3,000. The total annual value of the export of apples and pears is about £1,764,000, and, consequently, the proportionate saving would bo about £600 a year spread over the whole of the exporters.
– Has the honorable member given consideration to what the loss of preference would mean to the apple and pear industry?
– I dealt with that matter while the honorable member was out of tlie chamber.
That £600 is what this committee, if my amendment be carried, will ask the industry to bear in return for what this Government has done for the industry in recent years. Between 1933 and 1935 the Commonwealth Government paid in bounty on the export of apples and pears £250,000, and between 1935 and 1937, £184,000. Not for one moment do I begrudge the apple and pear industry the assistance that it has received. On the contrary, 1 was one who supported the assistance that was given to it, but I do say that the industry should be prepared to take a truly Australian outlook, and, by taking advantage of services which can be effected here at a cost which compares favorably with the cost of similar services effected overseas, endeavour to keep within Australia the money necessary for the purchase of those services. I repeat in conclusion that the difference between the two costs represents the difference involved in the higher standards of living and better working conditions in this country. If this committee is to be consistent with the policy which we have applied in the past consistently to Australian industries, to secondary industries by means of the tariff, and to many primary industries by giving them a homo-consumption price, here is an important industry which merits protection. Absence of that protection may involve a .drainage of overseas funds in future years. My amendment seeks to give it protection merely in respect of the apple and pear industry’s insurances, but I hope that if it is carried it will serve as a direction to the Government to extend the principle of the amendment generally to the export control boards which are now operating throughout Australia.
.- I have some difficulty in understanding exactly what is before the committee, because I have just been informed that the amendment in its printed form is before the committee, whereas I have been shown a typwritten document which I understand contains what the honorable member for Fawkner (Mr. Holt) really desires.
– The typewritten document contains an amendment suggested by the Parliamentary Draftsman as being better than my own amendment.
– Yes, but what is before the committee at the moment is the printed amendment as moved by the honorable member. I have a great deal of difficulty in understanding just what the honorable member desires to accomplish by his proposal. Clause 15 provides that insurance may be effected in two ways; first, by the owner or person having authority to export in conformity with conditions approved by the board, and, secondly, by the board, acting as the agent of the owners of the apples or pears or of other persons having authority to export them. The honorable member for Fawkner does not propose by his amendment to affect contracts for insurance made by the owners themselves, and it seems to me that one effect of the amendment might be that the board may not place insurances but may say, “ We shall not do this business; we shall leave the exporters to do it.” That would leave the board free to prescribe any conditions it desired. It seems to me that the honorable member’s object could not be achieved by his amendment. He does not give preference to Australian companies as against non-Australian companies by his amendment, because he still leaves the board free to say, “ We won’t effect insurances; we shall leave it to the owners or to the exporters to do so “.
– Has the honorable gentleman read clause 15?
– Yes ; I am reading it now. It says - (1.) After such date as is notified in the Gazette by the Minister on the recommendation of the board, a contract for -
That is one way in which insurance contracts can be effected. The second is contained in the succeeding words - or by the board acting as the agent of the owners of the apples or pears, or of other persons having authority to export them.
It is perfectly clear that the board can say that contracts for insurance may be effected by private persons on such conditions as it prescribes; the board is free to prescribe any conditions. It is also clear that the board may effect insurances as the agent. It is the second way in which insurance contracts may be made that the honorable member for Fawkner proposes to affect by his amendment. He does not propose that the owner shall be bound.
– But that second half may be 100 per cent.
– It may easily be, but the board could say, if it were satisfied with the conditions; that it would not effect insurance and would leave to private persons the right to effect insurances on conditions prescribed by it.
– If the board is not satsfied it can go to the Minister.
– The board may say, “ Why go to the Minister ? Why let the Minister interfere with us at all? We shall escape going to the Minister altogether by saying to the private persons ‘ You shall do the insurance business yourselves ‘ “.
– Yes; but the board could say, “ You shall do this only on the terms we lay down “.
– Exactly. The honorable gentleman is not following me. Perhaps I am not making myself clear, but what I am trying to make clear is that the clause does contemplate insurances being effected by either private persons or the board, and, if they be effected by private persons, they must be effected on conditions prescribed by the board. But the alternative to insurances so effected is insurances effected by the board as the agent for the owners or exporters. The amendment of the honorable member for Fawkner does not touch the case where the owner insures for himself.
– My point is that the individual is not free to insure himself except on such terms as the board prescribes.
– I agree with the honorable gentleman. I have said that many times already. I say that the amendment moved by the honorable member for Fawkner will not force the board to prescribe Australian companies. The private exporter can go to any company he likes. The carrying of the amendment will leave it competent for the exporter to go to any insurance company, so long as the conditions, which mean the rates, are prescribed by the board. The only contract for insurance affected by the honorable gentleman’s amendment is the contract effected by the board as agent; it says that the contract for insurance effected by the board as agent must be with an Australian company, unless the Minister otherwise provides. I suggest that he is not getting the protection for the Australian companies that he is seeking.
– In other words, a shipper would be free to make insurance contracts at rates lower than could be made by the board.
– That is so.
– The individual shipper will not get any concessions in insurance rates. It is possible to get concessions only when applications are made in bulk.
– A shipper of large consignments will be able to prescribe his own rates.
– That has never been the case.
– He will be able to get conditions which other shippers cannot get. I suggest that, in order to overcome the difficulty that I foresee, we should go further than is intended in the amendment moved by the honorable member for Fawkner, and not merely make the board agent for the exporters in the matter of insurances, but also make it mandatory that it shall effect all insurances.
– That is what is done under other legislation.
– I should like to see the Government consider such an amendment, preferably at the report stage, because one could not be drafted at a moment’s notice. I do think that the preference to the Australian companies that the honorable member for Fawkner suggests will not be achieved by his amendment. The small shippers will be compelled to use the board as an agent, whereas the large shippers will be free to do as they desire. If it is contemplated to give preference to Australian insurance companies, it should be done in a more general way than that sought to be provided by the honorable member for Fawkner. It should not be left to the discretion of the Minister. The less the Minister interferes with the board’s management in the matter of exports the better it will be for all concerned. If a check is to be imposed it should be by a majority of the board. The honorable member for Gippsland (Mr. Paterson) stated that once a cargo of apples or pears is sold, even although it has not left Australia, it becomes the property of persons on the other side of the world who may desire a free hand in making insurance contracts, and naturally they may desire to do so. Of course, such persons will insure privately with any one they wish. The proper course for the committee to adopt is to provide that the board itself shall be the insurer, and shall effect insurance upon cargoes of apples and pears, or, in fact, any other commodity of which it is in control.
.- This is one of the most extraordinary proposals ever submitted to this Parliament. It seems something in the nal are of a ramp and I am opposed to it.
– That statement is decidedly offensive to me and I ask that it be withdrawn and that the honorable member apologize.
– I withdraw the remark to which exception has been taken but the honorable member can ask in vain for an apology. The honorable member for Fawkner (Mr. Holt) has very glibly cited the small difference between the rates charged by Australian companies and those charged by British companies. I remind honorable members that before Lloyds began to operate in Australia insurance rates were unduly high and that as a result of competition rates were reduced by about 50 per cent. Prior to that organization entering the insurance business in Australia, the Australian companies had a complete monopoly, and I am surprised that some honorable members, particularly members of the Labour party, should support an amendment to assist a monopoly which must add to the export costs. Many Australian insurance companies charged unnecessarily high premiums which enabled them to make enormous profits. If the amendment were adopted a combine would be established and rates would soon increase appreciably. It is suggested that this provision shall apply only to apples and pears, but if it be agreed to similar provision will soon be made in respect of all exports. As the honorable member for Fawkner has said, large sums of money have been paid by way of bounties to assist some of our exporting industries because of the difficulties associated with exporting at profitable prices. Had it been possible to export fruit or other commodities at profitable prices bounties would not have been sought from or granted .by this Parliament. Surely no action should be taken to place additional business in the hands of Australian insurance companies, and thus enable them to create a monopoly similar to that which obtained before Lloyds commenced to operate in Australia. If this proposal be adopted it is only reasonable to assume that an effort will soon be made to compel exporters of wheat and wool and other primary products to insure with Australian companies. Is it suggested that because Australian companies pay Australian rates of wages and observe Australian conditions all insurance business in respect of exports should be placed with them? As Parliament has granted rebates on sugar used in the processing of fruit for export, rendered assistance in respect of cases, and done everything possible to assist the canned fruit industry, it should not now endeavour to impose this condition which will have a detrimental effect upon exports. At present it is difficult to find profitable markets for apples, pears and other primary products, and we should not do anything to restrict our export trade. As the honorable member for Flinders (Mr. Fairbairn) said, if this amendment be agreed to letters will he published in the British press concerning the attitude adopted by Australia. The feeling in Great Britain will be similar to that which prevailed a couple of years ago in connexion with our butter, when the people in many industrial centres in Great Britain suggested that Australian butter should bc boycotted simply because of the tariff which Australia imposed. Moreover, there is a most decided duty preference granted to our fruit in England, and America is asking to be placed on equal terms with us. This is one of the most suici- dal proposals that could be submitted. I imagine the influence which must have been brought to bear in order to get such an amendment brought before this Parliament. Very little consideration has been given to it, and it is difficult to realize the damaging effect it may have on the industry if it is agreed to. It may be the forerunner of other imposts on exports which assist materially not only in developing Australia but also in providing employment. We should not do anything that will be detrimental to Australia’s interests. The Government should realize that if this restriction is imposed it will soon be faced with difficulties in other directions. I shall do my best to see that the amendment is defeated, because I am opposed to legislation of this description.
– Will not the honorable member admit that most of the insurance companies involved are British companies ?
– I do not care whether they are or whether they are not. When Lloyds became established in Australia, a friend of mine in Western Australia informed me that insurance premiums were reduced by 50 per cent. The honorable member for Fawkner, who compared the premiums charged by the Australian companies with those charged by the British companies, should remember that the rates are now competitive, and that if the competition were removed the Australian companies would increase their rates to an alarming degree. I urge the Government, which may be influenced by a desire to give this business to Australian companies, that if the amendment is agreed to it will be assisting to create an insurance monopoly such as was in operation before Lloyds started business in Australia.
– I do not know why there should be such a lengthy debate on the amendment moved by the honorable member for Fawkner (Mr. Holt) because even if it were adopted it would not save the industry. Insurance is one of the smallest charges which the growers have to meet. The remarks of the honorable member for Swan (Mr. Gregory) suggest that if the amendment were adopted he would prefer the bill to be defeated. Personally I do not care if the bill is not passed in its present form because the amendments which I have moved to improve it have not been supported by a majority of the committee. The honorable member for Swan said that if the amendment were adopted the Australian insurance companies would be able to charge whatever premiums they desire. The honorable member is wrong. Are the growers compelled to insure their fruit?
– If the premiums are considered to be too high they need not insure their shipments.
– It is a good business practice to insure protection.
– It is. Paragraph b of clause 15 reads -
After such date as is notified in the Gazette by the Minister on the recommendation of the board, a contract for -
the insurance against lose or deterioration of such apples or pears whilst awaiting transport or in transit or until disposed thereof, shall not be made except in conformity with conditions approved by the board, or by the board acting as the agent of the owners of the apples or pears, or of other persons having authority to export them.
In the past, except in one year on a shipment of pears, growers have never had an insurance cover for deterioration. In that instance the companies were so hard hit that they would not insure further shipments. In some instances the freight is advanced in England, and. insurance is effected to cover freight and similar costs. An f.o.b. purchaser could insure in Great Britain the fruit which he purchased.
– So long as the board permits him so to do.
My. FROST. - He could have his cover under any conditions, but if the freight is paid in Australia there would be no need to have any cover at this end. A few years ago, when the premium rates were increased, several large growers in the Huon district who paid freight and other expenses did not insure their consignments. They could not be compelled to do so. A small shipper in my electorate pays the freight himself and does not insure his fruit. There is nothing to compel a shipper who pays the freight to insure his consignments.
– A shipper could not get an advance if he did not insure the consignment.
– If he paid freight he would not need an advance. If the Australian insurance companies should charge exorbitant premiums, the Government, upon the advice of the board, could advance the freight, and thus avoid the necessity to take out an insurance cover. I am not conversant with the present rates, but I do not think that they are unduly high. The exporting companies undertake the insurance for the growers. They are never insured against total loss only if the fruit deteriorates the insurance companies will not pay. A clause is inserted in policies issued by the insurance companies which provides that if the refrigerating machinery on the ship breaks down for a continuous period of 24 hours, or if the ship is lost, a claim may be made; but only once or twice have shippers been able to make such a claim. If the fruit goes totally bad, no claim can be made. The only chance an exporter has in such circumstances is to claim against the shipping company for negligence. When such a claim has been substantiated, the shipping companies and not the insurance companies have to reimburse the growers for losses incurred. In my opinion, the whole matteris not worth the time that has been spent on it during this debate.
.- I am not altogether impressed by the argument of honorable members in respect of the merits of allowing Australian insurance companies to have a monopoly of the insurance business connected with the export of apples and pears as opposed to permitting the English companies to share in it. Personally, I think it does not matter a great deal what flock of vultures picks the bones. I share the opinion held by the honorable member for Ballarat (Mr. Pollard), and supported by the honorable member for Bourke (Mr. Blackburn), that if the fruit shipments are to be insured against total loss, that risk should be undertaken by the board itself. As the honorable member for Richmond (Mr. Anthony) has pointed out, it has been disclosed in New South Wales at least, that when private insurance companies have been permitted a monopoly of insurance business, premiums have been raised to an enormous extent. During the seven years that the New South Wales State Insurance Office was in operation, it was able not only to carry on successfully in competition with the private companies, but also to make a profit of £100,000 per annum, after paying income tax. It is amazing to listen to honorable members arguing as to whether Australian insurance companies should be given a monopoly of the business, or whether the English companies should be given an opportunity to participate. The committee would be better employed in considering the advisability of asking the Government, which claims to be so anxious to assist the primary producers, to provide that the business shall be undertaken by the Apple and Pear Board. The State Insurance Office of New South Wales commenced business with no capital, but with a government guarantee, and was able to carry on successfully. There appears to be no reason why the Apple and Pear Board should not undertake the insurance of cargoes under a guarantee by the Government against heavy loss occurring in the first years of its operations. If that were done, doubtless the profits from the venture would be sufficient to cover the whole of the expenses of the board, and the growers would be relieved to that extent. In my opinion, everything is to be gained by preventing insurance companies, whether controlled in Australia or in England, from being permitted to undertake this insurance, because, as honorable members opposite have admitted, when they have had the opportunity to do so the insurance companies have exploited the primary producers of this country. If competition in insurance business bysemi-government authorities will assist in keeping insurance rates low, it should be encouraged. It would be distinctly wrong to allow a monopoly of this business. I trust that before this measure is finally passed, the Government will take steps to see that the board is empowered to undertake the insurance of fruit cargoes shipped abroad, so that any profits accruing as the result of that venture may be returned to the growers. The arguments advanced by honorable members in support of either English or Australian companies, leave me cold. The Australian insurance companies can expect no sympathy from Labour members. If we were to assist them we would probably find that we were aiding the very people who, in the past, have done everything possible to prevent Labour from functioning successfully in this country or of occupying the treasury benches in the Australian parliaments. A perusal of the list of directors of Australian insurance companies would disclose that the majority of them are either actively associated with, or support, anti-Labour parties. If it were possible to examine the accounts of the various political parties it would be found that these people are large subscribers to the party funds of the Government forces. Having regard to these circumstances it is rather strange that some honorable members who support the Government should criticize the activities of the Australian insurance companies, and instance cases in which they have used their powers to exploit primary producers by forcing up insurance premiums to an unfair level. I believe that if members of this Parliament were free to vote in accordance with their expressed opinions a majority would be found to favour the proposal that the board should undertake this insurance business. I point out to those honorable members opposite who have criticized the insurance companies that votes count, not speeches. I hope that when the division on this amendment is taken, those who have so criticized the private insurance companies will support their words by their votes.
Sittingsuspended from 12.39 to 2.15 p.m.
In Committee of Ways and Means:
– I move-
Division A. - Rate of Tax when Owner is not an A bsen tee.
For so much of the taxable value as does not exceed £75,000, the rate of tax per pound shall be one half-penny and one thirty-seven thousand live hundredth of one penny where the taxable value is one pound, and shall increase uniformly with each increase of one pound of the taxable value by one thirty-seven thousand live hundredth of one penny.
For every pound of taxable value in excess of £75,000 the rate of tax shall be fourpence half-penny.
The rale of tax for so much of the taxable value as does not exceed £75,000 may becal- culated from the following formula: -
Division B. - Rate of Tax when Owner is an Absentee.
For so much of the taxable value as does not exceed £5,000, the rate of tax per pound shall he one half-penny. For so much of the taxable value as exceeds £5,000, but does not exceed £80,000, the rate of tax per pound shall be one penny and one thirty-seven thousand rive hundredth of one penny where the excess is one pound, and shall increase uniformly with each increase of one pound in the taxable value by one thirty-seven thousand five hundredth of one penny.
For every pound of taxable value in excess of £80,000 the rate of tax shall be fivepence.
The rate of tax for so much of the taxable value as exceeds £5,000, and does not exceed £80.000, may be calculated from the following formula: -
The motion seeks to implement the Government’s proposal to increase the rates of land tax by approximately 11.1 per cent., bringing them up, as I said in my budget speech, to 50 per cent. of the rates obtaining in 1914-15. There are two principal divisions in the motion. “Division A applies to residents, and division B to absentees.
In respect of residents the rate of tax commences at one half-penny and one thirty-seven five hundredth of a penny, and increases uniformly by one thirtyseven thousand five hundredth of a penny as the taxable value increases until it reaches £75,000. For every pound of taxable value in excess of £75,000 the rate of tax is a flat rate of 4½d.
Absentees provided for under division B do not receive the deduction of £5,000 which is allowed to residents in arriving at the taxable value of their land. They, therefore, pay tax on the full unimproved value. For the first £5,000 of taxable value, the rate of tax is a flat rate of one half-penny in the £1. When the taxable value exceeds £5,000 for absentees, the rate of tax on the excess up to £80,000 is one penny and one thirtyseven thousand five hundredth of a penny, increasing uniformly by one thirty-seven thousand five hundredth of a penny until the taxable value reaches £80,000.For every £1 of taxable value in excess of £80,000 the tax is at a flat rate of 5d.
Clause 2 of the resolution provides that land tax calculated in accordance with the formulas in divisions A and B shall be paid for the current financial year and for subsequent years. When expressing the formulae which was contained in the Land Tax Acts of 1910 and 1914 the words “pound sterling” were used to denote the Australian pound. In view of the different currency value of the Australian and sterling pound, it is necessary to delete the word “ sterling “ from these formulas wherever it appears. Clause 3 provides for this to be done.
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Casey and Mr. Menzies do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Casey, and read a first time.
– I move-
That the bill be now read a secondtime.
When speaking to the motion in Committee of Ways and Means I described the two formulae in respect of residents and absentees, so it is not necessary for me to repeat what I then said. Clause 2 provides for the repeal of section 4 of the Financial Relief Act 1932-1935, and by clause 3, section 4a of the principal act is also repealed. These repeals are required, as the reductions authorized by those sections are effectuated in the first and second schedules of the bill. In other words, the reductions and alterations of the original formulas contained in the two sections of the acts which I have mentioned are no longer necessary, because two new formulas are provided in this measure. Opportunity is also taken, in clause 4, to amend section 5 of the principal act in order to bring it into linewith section 12 of the Land Tax Assessment Act and so authorize the Commissioner to issue assessments after the close of a relevant financial year. Usually assessments are issued within the financial year for which the tax is payable, but frequently it happens for various reasons in individual cases that it is not practicable to issue the assessment within the year. In addition, cases of default are constantly being discovered. For this reason it is necessary to have power to issue retrospective assessments, and the amendment made by clause 4 will leave no doubt as to the authority of the Commissioner to do this. The existing disability has come to light only in recent years. Honorable members will, I think, agree that it is desirable that the Commissioner should have power to deal with such cases.
– How far back will that power extend?
– Power to deal with defaulters who have evaded payment of the tax will, I think, extend back for any number of years.
– Why not make the practice uniform with the Income Tax Act?
– I think that would be difficult. I explained clauses 5 and 6 in Committee of Ways and Means. Clause 7 merely provides that the amendments repealing section 4 of the Financial Relief Act 1932-1935 and section 4a of the principal act, as well as the schedules embodied in the bill, shall apply to assessments for the current financial year and subsequent years.
– How much of the amount will be paid by absentees?
– I have not the figures, but I shall make inquiries.
Debate (on motion by Mr. Forde) adjourned.
Consideration resumed from the 21st September, 1938(vide page 28), on motion by Mr. Casey -
That the first item in the Estimates under Division I - The Senate - namely, *’ Salaries and allowances, £8,210”, be agreed to.
.- In my opinion the budget indicates lack of foresight and imagination, and’ can be classed as dull, conventional and unimpressive. One can safely say that it pleases neither Government supporters nor the electors generally. It is just the kind of budget that one might expect from a government which, for some time, has not known definitely where it stood. In the circumstances, one could not expect anything better from this new-old Government, if I may use that term.
– A government of spare parts.
-Speaking of two quarrelling schools of music, between which no real differences existed, the famous John Byron said -
Others aver that he to Handel
Is scarcelyfit to hold a candle.
Strange all this difference should be
Although the Government might try to impress upon us that this new administration is better than the last, there is no real difference except possibly a change for the worse. In the words of the exMinister for Trade and Customs (Mr. White), the policy of the Government will be dictated in future by a secret coterie of the Cabinet. Surely, that cannot be regarded as an improvement. The budget is notable for three things. First, it indicates an increase of expenditure by the tremendous amount of approximately £23,000,000. The estimated revenue for the present financial year is £93,162,000 and the estimated expenditure £93,136,000, leaving an estimated surplus of £26,000. The second notable feature is the proposed record collection from taxes of all kinds. The third feature is the complete absence of any indication of intention to carry out many reforms promised during the last two or three years by the Prime Minister and by the Deputy Prime Minister (Sir Earle Page), particularly in regard to unemployment, housing, standardization of railway gauges, and a shorter working week, in which matters the Government professed to be greatly interested. Also there is no reference in the budget to any impending legislation to bring about monetary and banking reform.
– The Prime Minister has said frequently that the provision of houses for the working people is very near to his heart, but there is no evidence of that in the budget. No proposals are brought forward with regard to water conservation and irrigation for country districts. Youth employment and other social problems in which the Government professed to take a very deep interest are also omitted. A promise was made that £20,000,000 would be provided for farmers’ debt adjustment. After four years only £4,000,000 has been expended. It is now proposed to appropriate a further £12,000,00. Of an estimated total expenditure of £93, 136.000, an amount of £8,492,000 is to be expended upon defence. The remainder of the total defence provision of £16,796,000, we are told, will be drawn from trust accounts and loan funds. The Federal Parliamentary Labour party does not object to adequate provision being made in the budget for the defence of Australia against possible foreign aggression; as a matter of fact, (hat party definitely stands for the adequate defence of Australia. My criticism is that the Government has failed to utilize the money provided in the best interests of the defence of Australia. So that there may be no misunderstanding, I quote the platform of the party decided upon at the last Federal LabourConference -
That shows clearly that the Labour party stands for the adequate defence of Australia against possible foreign aggression.
– Not at the expense of internal standards.
– No, we stand for the maintenance of internal standards. We wish to improve the standards of living, and to make Australia a much more attractive country, so that the masses of the people will feel a special pride in it and desire to subscribe to a policy of defence against foreign aggression. Our argument is thatthe expenditure should be purely for defence purposes, and that the greatest proportion of it should bo upon the provision of equipment, aeroplanes, roads and aerodromes in this country, so that the maximum degree of employment might be provided for our people.
Looking at the subject of taxation, we must be amazed at the stupendous increase of the collections by the Commonwealth Government. This raises the point that there is a limit beyond which taxes cannot be increased. We must not lose sight of the fact that in 1937-38 the tax collections of the Commonwealth and the States reached a new record of £118,700,000, an increase of £10,500.000 in comparison with the. collections in the preceding year of that increase, the Commonwealth was responsible for £6,274,000 and the States for the balance of £4,236,000. We should bear in mind that the debts of the Commonwealth and the States at the 30th June, 1938, amounted to £1,182,566,000. an increase of £92,460,000 compared with the year ended the 30th June, 1931. The annual interest bill of the Commonwealth and the States aggregates the colossal figure of £45,000,000.
– The debt of the Commonwealth has been reduced, while that of the States has been increased.
– The net increase of the national debt has been £92,46.0,000.
– The States’ debt has risen by £99,000,000.
– This Commonwealth Parliament must consider how far it can impose on this national capacity to carry the burden of taxation and indebtedness. There are two outstanding factors which cannot be disregarded in any review of our economic and financial position: First, the burden of interest will eventually crush the nation if it continues to mount; and, secondly, we are not working to full capacity in wealth production with over 150,000 of our people out of employment. The interest position is one which the Commonwealth will have to consider very seriously in the near future.
The Federal Labour party stands for the national control of interest rates. Labour’s monetary policy provides for the national control and utilization of credit for the nation’s needs.
– Douglas Credit.
– There is every justification for a policy of credit management at the present juncture, in order to ensure its adequacy and to increase employment. That is not Douglas Credit, as the honorable gentleman suggests. He endeavours to brush aside any suggestion of monetary and banking reform or of credit management, by describing it as Douglas Credit, because he himself is bereft of any ideas except those which he gleaned from a conference he recently admitted having had with bankers “with a view to informing his mind “. His mind is informed only by Sir Alfred Davidson and other orthodox banking magnates. The Royal Commission on the Monetary and Banking System, at paste 196 of its report, under the head “ Central Bank Credit “, referring to the functions of the Commonwealth Bank, said, inter alia -
It can lend to the governments and to others in a variety of ways, and it can even make money available to governments and to others free of any charge.
That is a very important statement by a royal commission appointed by the Lyons Government. I believe that, within definite limits, the Commonwealth Bank can make sums available every year for great reproductive and national works in Australia, not at exorbitant interest rates, but at the cost of issuance and administration, in accordance with the view of the royal commission, from whose report I have just quoted.
– That is a point in the scheme of Douglas Credit.
– It is the view of a royal commission appointed by the present Government at a cost of over £20,000. Because the friends of the honorable gentleman, whom he consulted “ with a view to informing his mind “ said that he must not proceed with the implementation of the recommendations of that commission, he is dumb when asked to state when he proposes to introduce legislation along those lines. Mr. J. M. Keynes, the noted economist, in a special article published in the New Statesman and Nation, said that he wanted the state to control the supply of money and the rates of interest.
We cannot expect any such reform from the present Treasurer, or from the inner group dictatorship of this new-old Government, which has no policy on banking except that of the private bankers.
A good deal has been said concerning the conversion of Australia’s indebtedness overseas. Certainly, the present High Commissioner in London has been responsible for negotiating the conversion of certain loans that have fallen due; but those loans expired, and had to be converted on the best possible terms, and there is still unconverted an amount of over £200,000,00. The conversions made by this Government were a mere bagatelle compared with those made while the right honorable member for Yarra (Mr. Scullin) was Prime Minister of Australia. The whole of Australia’s internal indebtedness was then converted, at an annual saving to this country of approximately £6,500,000.
– With the assistance of the Opposition.
– Under the leadership of the right honorable member for Yarra (Mr. Scullin). Certainly the Opposition
Lad sufficient intelligence to recognize a wise financial policy, when enunciated so convincingly as the right honorable gentleman was able to do it.
– Those days are past.
– But the credit must rest with the men who showed foresight and statesmanship in initiating that internal conversion which has resulted in a tremendous annual saving to the taxpayers of Australia. Of the overseas loans that have not been converted, over £180,000,000 bears interest at 4 per cent, or more, of which about £125,000,000 carries an interest rate as high as 5 per cent. It was stated that, when the Lyons Government came into power, there would be an abundance of cheap money, and that loan conversion would be easy. “ The financiers would be literally eager to help them out of their difficulties “, said the Prime Minister ; yet we find that £200,000,000 of overseas loans has not been converted. In facing the present serious situation, we must utilize to the full the whole of the resources of the nation and the productive power of the people. Any improvement of trade or increase of employment that has come about since the appointment of the present Government to office has occurred, not on account of legislation initiated by it, or its administrative acts, but in spite of its lack of encouragement of industry. Second in command in the United Australia party we have a Minister who says that what Australia is most suffering from to-day is lack of leadership.
– Yet it is called the United Australia party.
– It is merely alleged to bo a united party.
The Government cannot derive satisfaction from the present tendency towards increased unemployment. With 150,000 of our people out of work, Australia is not in a safe position to meet the financial and economic strain that will probably be imposed on it in the next couple of years. The case for the absorption of the unemployed, undoubtedly strong as it is from the humanitarian and social points of view, is strengthened by the national need for greater effort to defend this country against a possible future attack. We must, therefore, increase our wealth production and the purchasing power of our people. We must improve our standards of living, and the Commonwealth Government must give a lead to the governments of the States in evolving great national works to put into employment many thousands of the 150,000 who are out of work to-day. We must employ our man-power to the full, and finance defence and national reproductive works without piling up crushing burdens of debt carrying high rates of interest. For far too long has financial control been left in the hands of a few companies, whose main incentive is profits and dividends. For far too long has the human element been subordinated to the rapacity of private financial institutions. What is wrong with Australia to-day ?
– The honorable member smugly replies “nothing”, expressing, of course, his own satisfaction with recent events. The worst drawback is the Government which is in control. For some time there has been lack of co-operation between the Commonwealth and the State Governments for the purpose of finding solutions of many pressing problems.
There has been a lack of planning on tho part of the central Government which has a dominating influence on the Loan Council, by virtue of the fact that the Treasurer of the Commonwealth, as chairman of the Loan Council, under the Financial Agreement, exercises two votes as against one by the representative of each State. Progressive State governments are chafing under the restrictions of the Loan Council. Long-range financial planning can be carried out effectively only with the concurrence and support of the Loan Council ; that body has the power to consider long-range financial planning, and a lead should have been given by the Commonwealth Government to the conference of Commonwealth and State Ministers. Each State government should. have been asked to formulate schemes and should have been assisted financially to carry them to completion without interruption. All of the States would have been better able to direct their public works expenditure towards definite objectives, such as the permanent relief of unemployment and the diversion of labour to rural development, if they could have been assured over a period of years of a definite annual allotment of money for their public works programme. The Commonwealth Government had . an obvious opportunity to break away from the old financial traditions and devise means by which, even if only for the term of its mandate from the electors, the interests of the Commonwealth could be met in a manner commensurate with its wealth production and the capacity of its people ro discharge their obligations.
A proper system of financial planning and a long-range public works policy should be formulated by the Commonwealth Government, and submitted to the Premiers of the various States in conference. The States have in mind important works which could be undertaken, such as increased land settlement, developmental schemes for water conservation and irrigation, the building of main roads, more liberal assistance to the mining industry, the making of advances on more liberal terms to farmers and others engaged in rural activities, housing schemes for the eradication of slum areas and more liberal advances to local governing authorities to enable them to carry out necessary water and sewerage schemes and works for the supply of electric light and power. The Lyons Government said, in effect, that the obligation in regard to unemployment rested upon the States; but. if the Commonwealth Government, through the Commonwealth Bank, could find the money for these schemes over a period of years at the cost of issuance and administration, the result would be increased employment, increased production, and an increase of the value of the assets of the States and the Commonwealth.
Greater use, I submit, should be made of the Commonwealth Bank in financing developmental and reproductive works, and there should be greater co-operation than there is at the present time between that bank and the Loan Council. If war broke out to-morrow, no doubt £100,000,000 could be found immediately for defence purposes. Why should we not provide £30,000,000 over a period of years for land settlement, development and a great national water conservation and irrigation .scheme? Owing to lack of finance, it has become increasingly difficult to develop many of our primary industries, and thus to increase the population. Of all the continents in the world, Australia has the lowest average rainfall. Two-thirds of it is arid, because many of the rivers seep to the artesian basin, which, is receding at the rate of three inches a year. The drying up of this artesian basin is one of our greatest problems at the present time. The problem of water conservation must be tackled in a national way, and a lead should be given by the national government.
The Government is obviously reluctant to give effect to recommendations of the royal commission on banking, although, to do so, would be to go a long way towards making available the funds which are necessary for the proper development of the country. Last January, the press reported that the proposed banking bill would provide for the setting up of a mortgage bank, and proposals were put forward to strengthen the Commonwealth Bank as a central bank. A month later, the press reported that the Commonwealth Bank and the trading banks had been invited by the Government to submit reports and comments on the findings of the commission. A further press report stated that tlie banking bill would contain no variation of the present relationship between the Commonwealth Bank Board and the Government, and jio alteration that would give effect to the proposal that the governor of the bank .should also be chairman of the board. There has been a barrage of propaganda against the findings of the royal commission, particularly from the newspapers, which have benefited from the substantial advertisements inserted by the trading banks.
In July, 1937, Sir Earle Page announced that action would be taken shortly by the Federal Government to give effect to at least some of the recommendations of the royal commission on banking. He said that long-dated loans would be provided for the farmers, which was a necessary reform, and he said that this would be brought about “in a few weeks’ time “. That promise was made before the last federal elections, but it lias been treated with the same indifference as the pledge given by Mr. Lyons before the preceding election, that £20,000,000 would be made available for a national housing scheme.
The royal commission on monetary and banking policy made several interesting recommendations, one of which was -
The licensing of private banks, and the giving of power to the Commonwealth Bank to call on private banks to make certain deposits with the Commonwealth Bank.
That was a majority decision of the royal commission, but it was absolutely disregarded, and no action was taken by the Government. Other recommendations of the commission were -
Permanent machinery for the Loan Council which would enable the Loan Council, the Commonwealth, the State Treasurers and the Commonwealth Bank to establish and maintain close contact with one another.
Better use of the Australian note issue.
Better use of the gold or sterling used as a reserve for the Australian note issue.
Authority for the Commonwealth Bank to carry on trading activities in a proper manner.
A special mortgage branch of the Commonwealth Bank to assist the farmers and other users with long-termed loans.
Provision for the Commonwealth Bank and the governments to supply capital for small secondary industries. No action has been taken in regard to any of them. Evidently the private banks objected, and the Government has done nothing. Twelve months ago, the Government promised to bring down legislation to give effect to the recommendations of the commission, but it has continued to shelve the matter from month to month, and it is now quite clear that it does not intend to do anything at all. In this regard, the Government has a shocking record of inaction.
In his budget for 1938-39, the Treasurer estimates a deficit of £3,184,000 for the year, and to make up this shortage he proposes to secure additional revenue from the following sources: -
In this budget, the Treasurer has adopted the unusual policy of making provision for future budgets. Never previously, to my knowledge, has the Treasurer used part of a surplus to relieve a future budget, and then taxed the people for the current year to make up the amount set aside. Last year, there was a surplus of £3,495,000. The Government has decided to use £2,494,000 for defence purposes this year, and to use the other £1,000,000 for defence purposes in 1939-40. Had the whole surplus been used for defence purposes this year, it would, not have been necessary to increase the sales tax from 4 per cent, to 5 per cent.
A perusal of the budget figures indicates that the Treasurer indulged in some strange reasoning to arrive at his estimates of increases and decreases of revenue as compared with the last financial year. The estimates of increases are : -
The estimated decreases are : -
It is hard to understand why, if the Treasurer expects increases of revenue from the Post Office, railways, &c, he should estimate such a huge reduction in other directions. It is also difficult to understand why he should budget for an increase of £167,000 from excise on spirits, and budget for a decrease of £43,000 on excise from beer.
The estimated decrease of £189,000 in connexion with the note issue is mainly to be accounted for by the action of the Government in raising a loan of £7,000,000 overseas, and liquidating £5,000,000 of treasury-bills, a matter to which I shall refer later. In arriving at its estimate of revenue for 1938-39, the Government had the receipts for more than two months to work on, and as the returns for those two months showed a surplus of over £335,000 over the budget estimate, and in view of the Treasurer’s own statement that inquiries indicated that traders generally anticipated no decline of business activities for the rest of this year, it is hard to understand how the Government arrived at the conclusion that it would receive £1,700,000 less from customs this financial year that it did last financial year. For the three months ended the 30th September, the excess of receipts over expenditure was £334,000. According to a statement issued by the Treasury, the actual revenue for the three months exceeded the budget estimate by £662,000.
Had the Government used the whole of the surplus last year for defence purposes, and not set aside £1,000,000 for defence expenditure for the year 1939-40, there would have been no need to increase the sales tax this year from 4 per cent, to 5 per cent., thereby taking £1,300,000 by indirect taxation out of the pockets of the working people.
When the budget was introduced, there was considerable comment from certain quarters regarding the proposal to increase the land tax by approximately 11 per cent, to return an additional £140,000 a year. One might be pardoned for thinking that the land tax was paid by the struggling primary producers, the men from the wheat-growing areas, who have to come to the Government for assistance. Actually, two-thirds of the land tax is paid by city land-owners, and the other, third is paid by large land owners in the country, there being an exemption of £5,000 before any land tax is paid on country property. The accumulated remission of land tax since 1932-33 amounts to approximately £7,600,000. Who are the people who have received the benefit of these remissions? Are they the struggling primary producers? No; let us relate how some of the big vested interests in the cities have benefited. The Bank of New South Wales, over which Sir Alfred Davidson presides, benefited to the amount of £64,500, the English, Scottish and Australian Bank by £37,500, David Jones Limited, by £21,000, and the Union Bank by £27,000. I could cite many other big city concerns which have benefited very considerably from remissions of Commonwealth land tax. But the primary producers have received no benefit at all in this respect. At the same time this Government has not hesitated to increase indirect taxes. It has imposed a flat rate tax on incomes with the result that the burden falls just as heavily on lower incomes as on higher incomes. Whilst it raises an extra £2,700,000 annually by this means it asks the rich landowners to provide only £140,000 of additional revenue.
In his budget speech, the Treasurer (Mr. Casey) said that since 1932-33 the Government had consistently reduced the burden of income tax and, at the same time had reduced indirect taxes, principally sales tax, proportionately. That statement is misleading, because whilst it is true that the Government has reduced direct taxes during its period of office it has, at the same time, enormously increased indirect taxes. The facts in regard to taxation generally are that in 1937-3S the revenue from taxes was the highest recorded in any year since federation. In 1935-36 it amounted to £63,600,000, whilst it is estimated that it will reach £71,500,000 in 1938-39. The largest previous yield from taxes was £5S,900,000 in 1926-27. In 1931-32 indirect taxes totalled £36,800,000 and for 1938-39 they are estimated to amount to £56,200,000, whilst direct taxes over the same period decreased from £17,100,000 to £15,300,000. In the same period indirect taxes per capita increased from £5 12s. lOd. to £8 4s. 4d., whilst, combined direct and indirect taxes per capita increased from £8 5s. 4d. to £10 ls. 2d. Although from 1931-32 to 1937-38 direct taxes decreased by £4,500,000- income tax by £4,000,000- indirect taxes increased by £19,600,000, or’ a. net increase of £15,100,000. Direct taxes increased by 15s. 8d. per capita, and indirect taxes by £2 lis. 6d. per capita, making a total increase per capita of £1 15s. lOd.
– It is easy to see who pays the bulk of indirect taxes.
– Referring to the budget the Melbourne Herald stated -
Increased indirect taxation makes life harder for families with small or moderate incomes and is responsible for putting much more on to prices at different stages of production than accrues to the tax collector.
The honorable members for Swan (Mr. Gregory) and Forrest (Mr. Prowse) have suggested, by interjection, that a party which stands for protection stands also for increasing indirect taxes. However, the Labour party, as a protectionist party, advocates the imposition of duties sufficiently high to keep out imports with the object of developing manufactures in this country. It does not agree with the tariff policy of this Government, which, in effect, amounts to the imposition of import duties for purely revenue purposes This Government, in order to maintain its revenue from indirect taxes, imposes duties just high enough to allow of the continuation of imports, although by so doing it at least retards, if it does not jeopardize, the development of secondary industries in this country. The Treasurer’s statement that reductions of indirect taxes equivalent to those of direct taxes have been made is absurd in the light of the figures which I have just given. The total revenue from all taxes, and that collected in indirect taxes in “1937-38, were the highest since federation, whilst taxation per capita and indirect taxation per capita in that year were also records. Despite these facts, this Government claims that it is a business government. It is of the same ilk as the Bruce-Page Government which piled up »n adverse trade balance of £70,000,000 over a period of seven years, and thus brought Australia to the verge of financial disaster. I remind honorable members that the Minister for Commerce (Sir Earle Page), as Treasurer in that Government, earned the opprobrium, and condemnation of every impartial student of political economy in Australia. That Government left to its successor the task of stemming the tide of imports and of restoring Australia’s economy to an even keel. The Scullin Government accomplished that task by converting an adverse trade balance of £30,000,000 into a favorable balance of £31,000,000, and thereby laid the foundation for the tre mendous development which subsequently took place in our secondary industries.
I propose now to deal with overseas loans. The Treasurer referred to an overseas loan of £7,000,000 which was arranged in London in May, 1937, £2,000,000 being required for the purchase of defence equipment in Great Britain, .and £5,000,000 for the redemption of Australian treasury-bills held by the Commonwealth Bank in London. The Government is to be condemned for reverting to this suicidal policy of borrowing overseas. We do not want a repetition of what occurred in this respect during the regime of the BrucePage Government. The overseas loans transactions of this Government will cost the Australian people approximately £2,000,000 during the next two years. The funding of this £5,000,000 meant the transfer of a debt from the Commonwealth Bank to the public of Great Britain. The rate of interest paid on the treasury-bills is £2 5s. per cent., whereas the rate paid under this loan, which is for a period of eighteen years, is £3 16s. 6d. per cent. Calculating the additional interest that will have to be paid during that period, the cost of raising the loan, and exchange on the additional interest, this £5,000,000 will cost Australia £1,845,000. I point out. that this loan was a failure, as approximately 66 per cent, was left in the hands of the underwriters. Naturally, the Government can offer excuses for this failure, but it was, undoubtedly, a blow to the prestige of a government which always maintained that, because of the so-called restoration of confidence it could always raise money on the English market, despite the fact that it was a. government of the same ilk as the Bruce-Page Administration, which lost the confidence of overseas investors and. could not raise one penny in Britain in 1929. In addition to this extra amount that Australia will be called upon to pay, we now find that the revenue from the note issue will be less this year than in previous years. The reason given by the Treasurer for this reduction is that the redemption from the proceeds of the recent London loan of Commonwealth treasury-bills held by the note issue fund has reduced the interest income of the fund.
I shall now deal briefly with the internal loan position. Quite recently the Government raised a loan of £10,250,000 of which £4,000,000 was required for defence purposes. Although this loan was fully subscribed, the Treasurer refused to state the amount provided by the Commonwealth Bank. There appears to be no doubt that had the Commonwealth Bank not subscribed heavily - it is said to have contributed £5.000,000 - the loan would not have been a success. So rauch for the boast that complete confidence has been restored, and that we are in Easy Street for raising loans while this Government is on the treasury bench ! Although a portion of this loan was required for defence purposes, it is amazing that large financiers, financial institutions, and the like, would not subscribe to it. It did not matter to them that a portion of the money was for the purpose of defending their own wealth. The Government should have called upon those people to pay a great deal more towards defence ‘expenditure by way of direct taxation. Apparently, these financial authorities are interested in getting as high a rate of interest as possible for the money they have to invest.
The trade balance of the Commonwealth should provide honorable members of this committee with food for thought. The Commonwealth Bank Board in its report of June, 1936, stated that although London funds were then sufficient for normal requirements, they were not sufficiently high to provide an adequate reserve against adverse circumstances. The report stated -
We should aim at a favorable balance oi overseas payments for a number of years with a view to building up our London funds and maintaining them at a. higher level.
A similar statement has appeared in several reports by the board. Last year our London fund reserves were £71,000,000. Although that is an increase of the total for previous years, it is still not so high as that of pre-depression years. In 1927 - 28 our London funds stood at £102,800,000. During the last five years our trade balance has done very little to strengthen our London fund reserves, as the following figures show -
Anti-Labour governments have been noted for their indifference, or their lack of ability, to deal with Australia’s trade balances, as never once have they taken any action to correct our trade balances or to ensure the strengthening of our London fund reserves.
– I rise to a point of order. Has the Government resigned? There is not a Minister in the House.
– There is no point of order.
– Of late years our imports have increased at an alarming rate. In 1931-32 they were valued at £44,700,000, but by 1937-38 the value had increased to £114,000,000, which figure is £22,000,000 in excess of the imports for 1936-37, and two and a half times greater than that for 1931-32. The figures have continued on the upward grade in this financial year, as the following table shows : -
We had a favorable trade balance of £11,400,000 in 1937-3S, but our commodity balance was favorable only to an amount of £90,000, which was the lowest on record. These figures are not at all reassuring, inasmuch as they indicate financial drift. It was a similar drift which brought Australia to the verge of financial collapse when the Bruce-Page Government was in office. The latest report of the National Bank of Australia
Limited issued a warning concerning our trade balance. It stated -
Unless favorable conditions develop such as a marked rise of exports or values of export commodities - which at present seemsunlikely - imports need heavy pruning.
The report also observed -
Failing either of these correctives some hardening of the money market should result.
The Commonwealth Bank Board directed attention to a similar state of affairs when the Scullin Government assumed office. The Bruce-Page Government had allowed imports to increase to a value of £140;000,000. Not only had it encouraged this immense importation of goods, but in the last three years it was in office it had assisted in overseas borrowing, mainly for State purposes, at the rate of £43,000,000 a year. Its connivance in the heavy importation of goods from abroad, and in excessive overseas borrowing, was not only detrimental to the manufacturing interests of Australia but was also instrumental in placing extremely heavy burdens upon our people.
In conclusion, I shall summarize in ten points the obvious weaknesses of the Government’s proposals as set out in the budget - a budget which is, in itself, dull, unimaginative and unimpressive and such as we might expect from this “deadbeat “, uninspiring Government which is rapidly disintegrating. The ten points a re : -
In a word or two of elaboration, may I point out in respect of my third point, that the Government sent a fully authorized delegate to the International Labour Conference at Geneva with instructions to vote in favour of a 40-hour week and when a convention embodying that reform was agreed to, the Ministry nearly dropped dead, politically speaking. In support of my seventh point, I remind the committee that in consequence of the Government’s inaction, and of the flood of imports into this country from cheap-labour countries thousands of our people are walking the streets who, otherwise, would be employed in developing valuable Australian secondary industries. The failure of the Government to implement the recommendations of the Royal Commission on Banking and Monetary Policy is especially culpable. The commission cost this country £20,000, and ever since the publication of its report the Government has been making statements concerning it to suit particular audiences. Ultimately, of course, the Treasurer conferred with the associated banks, which seem to have instructed him that so long as nothing is done all will be well. For these and other reasons I submit that the Government stands condemned. It has failed to take any constructive part in improving the standard of living of the people of Australia; it has failed to give a lead to the nation; it has failed to co-operate with the State governments in relieving the conditions of over 150,000 men, who, being unemployed, are unable to maintain themselves and their wives and families in reasonable comfort.
– Militia Forces - British Duties on Fruit - Canberra Community Hospital - Errors in Telegraphic Transmission - Naval Munitions Establishments : Furlough - PostmasterGeneral’s Department: Dismissals - Ministers as DIRECTORS of Public Companies - National Insurance.
– I move -
That the House do now adjourn.
The Prime Minister (Mr. Lyons) wishes me to announce that a sub-committee of Cabinet has been appointed to lead a campaign for raising the strength of the militia forces of the Commonwealth to 70,000 men. A campaign will be conducted throughout Australia to obtain volunteers. The sub-committee of Cabinet will be under the chairmanship of the Minister for External Affairs (Mr. Hughes), the other members being the Minister for Civil Aviation (Mr. Thorby) and the Minister for Defence (Mr. Street). Because the task before the Commonwealth Government constitutes a challenge, the organization proposes to get in touch with every part of the life of the Australian community. The Prime Minister is confident that when Australia is put to the test in a great voluntary effort of this sort, the drive for security through a substantial increase of the number enrolled under -the voluntary system will be successful. The Minister for External Affairs left Canberra to-day for Sydney in order to arrange details of the campaign there, whilst the Minister for Defence has left for Melbourne on a similar mission.
.- In view of a statement which appeared in yesterday’s Sydney Sun that an arrangement is about to be entered into for the removal of the British import duty on American fruit, amounting to 2s. 3d. a case, as from the 1st January next, can the Minister for Commerce give an assurance that the existing duties will apply in respect of the period during which Australian apples and pears are imported into Great Britain?_
– The honorable member for Forrest (Mr. Prowse) will appreciate that, until the negotiations between the governments of the United Kingdom and the United States of America have been completed, it will be impossible to give details in respect of any particular item. I can only repeat the assurances previously given that, should any change be made in the preferential duties, honorable members will be fully informed at the first opportunity, and that, as regards the fruit industry, steps are being taken to safeguard the position of Australia.
.- On the 8th November, I asked the Minister for Health the following questions: -
In reply, the Minister informed me that in addition to the matron, nine members of the nursing staff had resigned. Replying to the third question he said that the vacancy had been filled but that applications had not been called, because the lady who previously had given great satisfaction as sub-matron of the hospital had been offered the position of matron, which she had accepted. He also said that the Hospital Board had authority in respect of the hospital staff, and that no circumstances associated with the resignations suggested the need for an inquiry. I am by no means satisfied with the replies given to me by the Minister. His reply to my third question suggests that the new matron was, in fact, sub-matron at the hospital when the resignations took place. That is not so, for she had resigned her position as sub-matron seme time previously. Before being appointed to the vacant position of matron, she was communicated with by telephone at Armidale and offered the position, which she accepted. The Canberra Community Hospital is controlled by a board elected under the provisions of an ordinance which provides that all persons, within certain limits, living in the Australian Capital Territory, shall pay a tax towards the maintenance of the hospital. Regulations 24 and 25 of the Ordinance provide -
– The board shall, subject to the directions of the Minister -
– (1.) The Minister shall appoint a medical superintendent of the hospital, who shall hold office for such period and on such terms as the Minister determines.
In the ordinance, which became operative on the 1st July, the then Acting Minister for Health (Mr. Archie Cameron) handed over the internal administration of the hospital to the medical superintendent, subject to directions from the Minister. Recently, the matron and nine members of the trained nursing staff of twelve resigned as a protest against certain administrative actions of the superintendent. Yet the Minister states that the resignation of 75 per cent. of the trained staff calls for no inquiry. An inquiry into the circumstances is warranted. The Minister concedes that the board has power to order an inquiry, but says that he does not think that one is warranted, and the board seems to agree that nothing abnormal has happened. All is not well with an institution when so many resignations take place at the same time. This matter cannot be passed over lightly. Residents of Canberra pay a compulsory tax towards the maintenance of the hospital, and if they become ill they are entitled to receive treatment at the institution. Any ill person, before he enters hospital, likes to have complete confidence in the efficiency of the staff; no such confidence could be had in the existing circumstances. I should not agree to enter an institution when I knew that internal conditions were such that 75 per cent. of the trained staff had resigned simultaneously.
– There are too many bosses.
– That may be true; I do not know. It was in order to get information that I asked my question. The appointment of a matron to fill the vacancy was made in most unusual circumstances. The usual procedure “ for any government or public body such as a hospital board is to call for applications, but in this instance a member of the trained staff of the Armidale Hospital was communicated with by telephone and offered the job. She accepted it. She may be a most competent matron. I do not know her and I do not offer any criticism of her. I do, however, criticize the way in which she was appointed. Positions are not usually filled in government institutions in that way. Such positions are invariably open to all qualified persons throughout the Commonwealth.
It will be noted that the Minister’s reply to my question was so framed that it appeared that the new appointee was at the time of her appointment on the staff of the hospital. I do not know whether the reply was designed to be misleading, but misleading it was. The true position was that she resigned from the Canberra Hospital some weeks ago to accept an appointment at Armidale. The next move was to call for applications to fill the nine vacancies on the trained staff, and again the unusual course was adopted of making appointments before the applications closed.
– That is done in all bureaucracies.
– That may be true, but we are living in a democratic land.
– Not here.
– It is claimed thai we in Australia are under democratic control, and if that be true, I wish to preserve that rule. I am not satisfied to accept many of the conditions which prevail in the Australian Capital Territory, the mismanagement of which is beyond description. On many occasions, I have directed the attention of honorable members to acts of mismanagement of the Territory. I do not intend any reflection upon the public servants.
– Do not “ square-off “.
– I am not “ squaringoff “. The responsibility for the control of the Australian Capital Territory lies with the Minister for the Interior, and, if the administration of Canberra by this Government is a sample of its administration generally, I am sorry for the Commonwealth.
Several appointments to the hospital staff were made by telephone, and a cable was even sent to a nursing sister on a visit to England asking her if she would accept appointment. It cannot be claimed that there was urgency in filling the vacancies and it seems to me that somebody in authority wanted to hand-pick in order to fill positions on the trained staff; otherwise, why was the board willing to expend money on sending a cable to a nursing sister who was in England in order to induce her to accept a position on the staff?
There is another aspect of the matter9 which calls for immediate action. Under the previous ordinance, regulations were approved and gazetted. Under the more recent ordinance, no regulations are gazetted, and we, therefore, have the position that the hospital is being administered under regulations some of which may be ultra vires the existing ordinance. That may not be the position, but I have gone to a great deal of trouble to ascertain the facts and I have been able to find nothing contrary to what T have said.
The state of affairs which I have dis» closed shows the need for an inquiry into the hospital affairs for the purpose, first, of ascertaining why wholesale resignations of the matron and the trained staff took place, and, secondly, why the vacancies were filled in such an irregular manner.
.- The Treasurer (Mr. Casey), without great enthusiasm and in a detached sort of manner, intimated that two Ministers of the Crown had at a moment’s notice dashed off in opposite directions to give a fillip to the Government’s policy of recruiting additions to the militia forces. One can only say that their action, in leaving suddenly, and without notice, while the House is still sitting suggests a degree of impetuosity which is not altogether consistent with mature judgment, and is another illustration of the fact that certain members of the Government seem to be in a constant state of competition with each other as to which will make the most recent and distinguished performance to support his claim to leadership in the next Government to be constructed or reconstructed, which presumably will be announced on Wednesday of next week. I should like to have from the Treasurer - although with his lack of enthusiasm and detachment I can hardly expect it - an assurance that the mission of these gentlemen will be entirely dissociated from the obnoxious policy of compulsory military service for the youth of this country.
– It has nothing to do with it.
– I should be glad to hear that since the relegation of the ex-Minister for Trade and Customs (Mr. White) to a sphere of less potential mischief that policy has been finally dropped by the Government. We gather from published statements of the late lamented Minister for Trade and Customs that he had proposed to tender his resignation to the Government earlier owing to his disagreement with it on matters of defence. However, he continued lingeringly and somewhat regretfully until wounded in a much more sensitive part, namely, his precedence in the Cabinet. At all events, I was hopeful that as he withdrew, or had been withdrawn, from the Cabinet we might take his resignation as an indication that we had heard the last of compulsory military service for the youth of this country.
The introduction of a new Assistant Minister in the subordinate position is not as encouraging as it might be, for there is no reason to hope that that sense of joyousness which comes to him on his re-appointment to the Cabinet in any capacity is likely to overcome the prejudice he had in favour of compulsory military service. There is another matter upon which the Treasurer might have given us some soothing assurance, and that is that there will be no persistence, as a part of this scheme to inspire enthusiasm into the people for army service, with the policy of profit making in the private manufacture of arms. This subject has been dealt with from time to time in this chamber, and I mention it now only because I hope that, incidental to the rapid changes that are taking place in respect of Cabinet construction and re-construction, a change of heart might also be indicated in the matter of profit making out of the manufacture of arms by private firms. I would ask the Treasurer to take a kindly and sympathetic note of my observations in that regard, because I think that if the Government would really disclose, as part of its set policy two things, namely, abstinence from conscription of youth and abstinence from the capitalist policy of trading in -death in the name of profits on the private manufacture of arms, it would be of great assistance to it in its new policy of enlistments which is now proceeding with such unexpected zeal on the part of two Ministers who have set out unexpectedly) in opposite directions this afternoon and are to act under the direction of the mature and experienced Minister for External Affairs (Mr. Hughes). Finally, in order to make the scheme a success - I would like it to be a success, because as every one knows I want this country to be adequately defended, if it should transpire that the war-mongers in the Government and out of it succeed in involving us in a war - the Government, having given us an assurance on the two points I have mentioned, should also give an assurance that troops that are being enlisted shall, in no circumstances, be used for the policy of forwarding of imperial buccaneering in foreign parts.
That also would give a great fillip to the proposed rapid increase of the militia forces to 70,000. My final suggestion - shall be nothing if not helpful to the Minister - is that adequate financial compensation be offered in the form of wages to recruits whom the Government proposes to enlist. That would be half of the battle. As they are intended ultimately to risk their lives and as their work will be of a very onerous character, a wage, sufficiently attractive to induce men with family responsibilities and with an Australian outlook, should be paid. Advertisements to that effect should, metaphorically speaking, be pasted on the moon so that he who runs may read. The blatancy of mere patriotic jingoism cuts very little ice with the young Australian. He has a perfectly sound and healthy sense of his responsibility to his own country, but he is not misled as a rule too readily by profiteering swashbucklers of the kind who are driving this Government on to war as fast as they can.
.- The matter which I wish to bring before the House, though small, involves an important principle, and relates to the growing practice of Crown authorities of legislating themselves out of ordinary legal con.sequences to which civil organizations are liable. A constituent of mine recently received a telegram from his son in the following terms: -
Stopping Craignathen private hospital Hayes Street Neutral Bay. Tell Frank.
Naturally, on learning unexpectedly that bis son was staying at a private hospital, he became alarmed and immediately set out for Sydney to see if he could be of any assistance to his son in the illness with which, apparently, he had been stricken. It was not until he had reached Albury that fresh advice was sent to him which indicated that an error had occurred in the transmission of the telegram and that the word “ hospital “ should have read “ hotel “. The son was staying at a private hotel and not a private hospital. As the father had been put to a certain amount of expense as the result of this error, my constituent applied to the Postal Department for a refund of his out-of-pocket expenses. The department admitted the error, and stated that an exhaustive investigation had revealed a regrettable failure of the service during the transmission of the message between Melbourne and Prahran, that suitable corrective action had been taken in regard to the officers associated with the failure, and that it had been arranged for an amount equal to the transmission charges in connexion with the telegram to be refunded. A refund in stamps to the value of ls. Sd. was made. “When representations were made that had this error occurred as the result of the activities of any private business organization, a suitable remedy would have been available in the courts to the person concerned, the department pointed out that the statutory provisions of the Post and Telegraph Act did not permit it to accept any responsibility, or to recognize any claim for compensation, arising from failures of this character. The principle of non-responsibility, the department claimed, is incorporated in the International Telecommunication Convention to which the Commonwealth of Australia is a signatory, and is generally recognized by telegraph administrations throughout the world. It went on to state that, in view of these circumstances, it regretted that it was unable to recognize any claim for compensation. It is palpably unfair that a Government department should not be prepared to recognize reasonable claims for compensation in cases where damage has occurred as the result of an error or, in fact, negligence, on the part of its officers. I take this opportunity to bring the matter before the House, and to register my personal protest against this attempt to shelter behind a legislative provision for non-liability. I make a fresh appeal to the Postmaster-General that, if he has any personal discretion in the matter, he will see that justice is done.
– There are two matters to which I wish to direct the attention of the House. The first relates to the question of furlough for employees of the munitions establishments of the Naval Department, who appear to be the only section of Government employees not granted that privilege. I regret that the Minister for Defence is not present in the chamber at the moment. I realize, of course, that he has occupied his new position only for a brief period; but his predecessor knew all about this matter, as also did an earlier Minister for Defence, Sir Archdale Parkhill, because I have asked questions on this subject on several occasions. While Sir Archdale Parkhill was Minister for Defence I asked the following questions : -
The reply was -
Which indicated that the matter was under consideration -
Later, I asked -
Can the Minister for Defence state whether the matter of the granting of furlough and long service leave to employees in the Defence Department has been dealt with? If so, what decision has been reached?
The Minister’s reply waa -
Owing to the pressure of parliamentary business it has not yet been possible to deal with that matter, but a memorandum is available for the consideration of the Government.
Evidently a memorandum had been prepared and, as far as I can gather, it was not unfavorable. During the period in which the honorable member for Calare (Mr. Thorby) occupied the position of Minister for Defence, I repeated the question on more than one occasion, and the reply invariably was that the matter was still under consideration. I venture to suggest that the Government has had ample time to consider the claims patiently put forward by these men, and that there is no reason why distinction should be made between them and officers of other branches of the Government service.
– How long has the matter been under consideration?
– For two and a half years. Of course, if a rushed decision is to be unfavorable I do not wish to hurry it; but the department has had ample time to arrive at a just decision on the merits of the case. I hope that the Treasurer will bring this matter under the notice of his colleague, the new Minister for Defence (Mr. Street), who has expressed himself as anxious to do everything possible to do justice to employees under his control, and that the men concerned will bb granted the same furlough rights as are enjoyed by other Government officers.
The other matter to which I wish to direct attention has already been raised in the House by the honorable members for Melbourne Ports (Mr. Holloway) and Ballarat (Mr. Pollard). In my constituency twelve men who are employed in the Postal Department were given notice last week that their services are to be dispensed with. I recognize, and I think every sensible man must recognize, that there are certain kinds of temporary employment which must cease after the work has been completed; but there is ample other work to be undertaken by the Postal Department. There are, for instance, 8,000 condemned telegraph poles in Victoria awaiting replacement. Although these poles are a menace to the lives and limbs of the linesmen who have to work on them, their dangerous state does not seem to cause the Government any anxiety. I suggest that if the work on which the men under notice of dismissal have been engaged has been completed, they could well be employed in replacing these condemned poles. I remind the Treasurer that recently he stated publicly that money without limit could be made available for defence purposes. Surely if unlimited funds can be provided for defence purposes, the comparatively small amount of money necessary to replace condemned poles, which are a menace to the lives of Government employees, could be made available. I am informed that condemned poles are to be found not only in Victoria, but also throughout Australia. Within my electorate there are many people who have waited for a long time to be connected to the telephone service ; but nothing is being done to expedite that work. The men under notice of dismissal are intelligent and know that there is work waiting to be done, and their own foremen recognize that there is work in the Postal Department still waiting to be put in hand on which their services could be utilized. I am wondering whether these dismissals are in any way connected with this newly-announced recruiting campaign for our militia forces. It is reasonable to assume that some men are being thrown out of work in order to make recruiting easier. If the rate of dismissals in Victoria is to apply throughout Australia, between 800 and 1,000 men will be dismissed from the Postal Department, although there is plenty of work for them in that department. Most, if not all, of the men who have been dismissed are married and have families, and many are returned soldiers. I trust that the Government will not continue this policy of dismissing men from essential government services in order to extend the field for recruiting. I ask the Treasurer to treat this matter as urgent. An opportunity for a more adequate discussion will be presented when the Estimates are being considered. For this reason. I shall not present all the details which I have at my disposal. I hope, however, that the Treasurer will take steps to prevent further dismissals and will cancel dismissals already authorized. The workers involved should be restored immediately to their employment, which is an essential part of the communications of this country.
– I regret the necessity to bring under the notice of the Government the unfortunate position of a large number of postal employees in Victoria, including 300 linesmen mentioned by the honorable member for Maribyrnong (Mr. Drakeford). The following resolution was carried recently by the Ballarat branch of the Labour party, and forwarded to me : -
That the federal member for Ballarat be informed that dismissals of men are taking place in the postal services at Ballarat, and that youths are being employed to take their places, and that this system will operate in connexion with the extra work at Christmas and New Year’s time.
This resolution, I take it, refers to temporary letter-carriers in the Postal Department, and indicates that the Government is about to adopt the policy which, unfortunately, is widely practised by private employers, of dismissing adult employees who are in receipt of full wages, and replacing them with youths at lower rates of pay. I hope that I am wrong in this assumption, but it appears to me that the Government’s attitude gives ample warrant for the fear that I am right. I do not wish my remarks to be misinterpreted, nor would I like the Treasurer (Mr. Casey) to think that I am unsympathetic towards the youth of this country. They have every right to expect employment, and to become useful members of society; but no adult should be dismissed by a government department in order to make a place for a youth at a lower wage. Rather should it be the policy of the Government to provide positions for both the man and the youth. The unemployment problem is being accentuated by the Government’s defence policy. We have been informed that the Government has decided to make available the services of three Ministers, with a view to embarking upon an active- and vigorous recruiting campaign for the Commonwealth militia forces. This will mean unrestricted expenditure by recruiting agencies in the payment of recruiting officials and on advertising throughout the country. When the recruits are obtained they will be supplied with uniforms made from the best material that this country can produce, they will be armed with the latest weapons, and be well paid for their services. No government sincerely desirous of providing work for all those who are unemployed is justified in spending huge sums on the payment of recruits, who, in the main, will be drawn from the ranks of those already in employment and in receipt of reasonably good wages, whilst at the same time it is dismissing men from various public departments. The large sum proposed to be expended on the militia could be utilized for the expansion of various industries, and so effect a substantial reduction of unemployment. The position of Australia will not be any better from a defence standpoint at the conclusion of this, recruiting campaign than it is now, because if any nation has hostile designs on Australia, it will make sure that for every man trained and equipped in this country, it will train and equip five. I therefore contend that the Government should abandon its proposed heavy expenditure on armaments and militia training, which may- never be needed, and undertake developmental work of a useful character that will provide employment for Australian workers. The huge vote for defence is being provided by a panicky Government at the command of a panicky press. It was at the dictate of the press that the Lyons Ministry was re-constructed this week. The next action of this Government is a cause for grave speculation. If a panicky press demanded the establishment of a Fascist Government, no doubt that demand would be obeyed by the inner group of the new Cabinet. I have been in this Parliament for nearly twelve months, and I have been astonished at the discourtesy with which the Ministry treats the representatives of the electors.of Victoria. Invariably, when important matters are being discussed, only one Minister is at the table, supported sometimes by an Assistant Minister on the front bench. Ministers should pay more attention to the remarks of honorable members on both sides of the chamber, and give some indication that they believe in democracy; that they are listening to the demands of the people’s representatives rather than to the dictates of the press. Newspaper proprietors are concerned mainly with circulation, not with the interests of the people generally. I voice my protest against the policy of spending large sums on an extended recruiting system while, at the same time, a public department controlled by the Postmaster-General is throwing men out of work, without regard to the distress and suffering caused to them and their dependants.
.- When in this House last Friday, the Prime Minister (Mr. Lyons) spoke about the position of the former PostmasterGeneral, Senator A. J. McLachlan, in relation to his directorship of certain public companies, I made an interjection which I believe was taken to moan that 1 had referred previously to the position of that honorable senator. I had not done so. In September and October of 1936, I raised the matter of members who were directors of public companies holding positions in the Cabinet, first by asking a question designed to ascertain which members of the Cabinet held such directorships, and later, when met with a refusal to answer that question, by some remarks on the motion for the adjournment of the House. In October 1936 the Sydney Bulletin twice made very considerable references to the position of Senator A. J. McLachlan as a director of public companies. I think it was then generally known that the honorable senator was not only Postmaster-General but also a director of a company which contracted with the Postal Department. I saw the honorable senator when the passage to which I have referred appeared in the Sydney Bulletin, and he told me exactly what he said in the letter that he wrote last week to the Prime Minister. I was perfectly satisfied that he could not influence the giving of any contracts, and that, if a contract were given improperly to the company of which he was a director, the act involved corrupt practice, not only on his part, but also on the part of public officers - which I could not for a moment suspect. But I do believe with the utmost confidence that the people are entitled to be satisfied that the public business of this country is carried on by Ministers honestly and incorruptly. There should be not only honest government and administration, but also no circumstance likely to excite suspicion of dishonest or corrupt government. Not only should justice be done, but also the people should soc that justice is done. In my opinion, the private interests of Ministers should be disclosed to Parliament and the country. I believe that the rule laid down by the late Mr. Gladstone, and followed by the late Sir Henry Campbell
Bannermann, that no one holding a position in a public company should sit in the Cabinet, is a wise and salutary one.
– The interests of Minister’s wives in public companies should also be known.
– I am mainly concerned with the principle that the people of Australia should be satisfied that those who carry on the government of the country have no direct or indirect personal interests other than in the conduct of the business of the country. I made no attack on Senator A. J. McLachlan. Everybody knew his position; it was discussed in the newspapers, and was fully disclosed by the Sydney Bulletin. I am of the opinion that he was only one of a number of Ministers who held directorships of public companies. As I told him at the time, the difference between him and the others was, that his relations with public companies were known whilst those of other Ministers were not known.
.- I support the protests of the honorable members for Maribyrnong (Mr. Drakeford) and Ballarat (Mr. Pollard) against the proposal of the Government to divert moneys intended for new postal works to other avenues, thus depriving certain men of the employment they have been following for some time, as well as arousing a feeling of insecurity in the minds of employees generally in the Postal Department. If there .is one department in which this is most unjustified, it is the Postal Department. That department has contributed substantially to the revenues of this country; indeed, it has provided many surpluses. The fact that the public are to be deprived of essential services, and that safeguards necessary for their protection as well as the protection of the employees of the department, will be denied by the failure to renew equipment, must give rise to serious concern. I have heard very disquieting rumours in regard to the attitude of the department towards its employees in South Australia. Many of those employees who are returned soldiers, have a feeling of absolute insecurity. We are approaching the Christmas season, when an attempt is generally made to increase the provision fo* employment, yet tlie Government chooses this very moment to deprive men of the employment they now have! Surely that is most undesirable! The wisdom of its action is open to serious challenge. We are supposed to be enjoying a period of comparative prosperity. The general impression in the minds of the public is that the trend in relation to employment is upward, and that there is no need for us to fear the future. The Government is setting a very bad example to private employers by restricting useful and serviceable works and depriving men of the employment formerly enjoyed by them. I voice a very strong protest against any action in this direction which is contemplated in regard to the postal services of South Australia.
.- I should like the Treasurer (Mr. Casey) to be more explicit in his denial of the persistent rumour which was abroad yesterday, that the Government intends to postpone indefinitely the proclamation of the National Health and Pensions Insurance Act.
– At all events, we should have explained to us the reason for the agitation.
– -Is there likely to be any postponement ?
– Has there been renewed pressure by certain interests, or has the Government been reading some of the speeches of honorable members on this side of the chamber in condemnation of the act’s many weaknesses? It is true that the Treasurer last night said that he could give a categorical denial of the rumour p.’id that there was no truth in the statement that the Government intended to postpone indefinitely the proclamation of the act. I should like him to state whether the contributions will commence on the 1st January next. Can he also say definitely when medical benefits will begin? Has the Government changed its attitude, or will the measure be brought into operation on the date intended when it left this House?
f4.18]. - in reply. - I have to announce that the honorable member for Macquarie (Mr. John Lawson), Parliamentary Secretary to the Treasury, will in future also act as Parlia mentary Secretary for Industry. The object of this is to enable him to assist Mr. Menzies, who is Minister for Industry as well as Attorney-General, in relation to certain industrial matters at present engaging attention. Numerous representations have recently been made to the Attorney-General with reference to problems arising under the Transport Workers Act, waterside employment generally, and the policing of Commonwealth awards. On all of these matters the Parliamentary Secretary will work in co-operation with the AttorneyGeneral, carrying out local investigations where necessary, receiving deputations, and reporting from time to time to his Minister. It is hoped that by this means adequate consideration and decision will be facilitated.
The honorable member for Bass (Mr. Barnard) referred to the Canberra Community Hospital, and ‘ I shall bring his observations under the notice of the Minister for Health (Senator Foll). The honorable member for Fawkner (Mr. Holt) referred to the unfortunate consequence of an error in the transmission of a telegram, and I shall place that matter before the PostmasterGeneral (Mr. Archie Cameron). The honorable member for Ballarat (Mr. Pollard), the honorable member for Maribyrnong (Mr. Drakeford), and the honorable member for Hindmarsh (Mr Makin), directed attention to postal works, and alleged that certain postal employees, in their respective electorates, had been put off. The honorable member for Hindmarsh was clearly speaking on the assumption that the Government had, by some recent action, deflected moneys from post office works to some other purpose. I can assure him that that is not a fact. The sun? of money expended by the PostmasterGeneral’s Department for the last financial year on postal works was £3,184,000, and the amount budgeted for this year for that purpose is nearly £4,000,000, or an increase of nearly £800,000.
– Will all new works provided for in the current estimates be proceeded with?
– As far as I am aware, no decision has been reached to the contrary. In a department whose activities ire as widespread as those of the post office, employees are put on and taken off throughout the Commonwealth as the necessity arises. I have pointed out that this year the department will have £800,000 more than last year for works, in addition to nearly £750,000 of revenue moneys.
– Then there will be m> curtailment of the works programme of cbe department for this year.
– As far as I am aware, no such decision has been reached in Cabinet up to the present time, but, of course, I can say nothing regarding the future.
The Acting Leader of the Opposition (Mr. Forde) asked for certain definite information regarding the national health and pensions insurance scheme. It seems that a storm in a tea-cup has arisen in respect of this matter. The Governmenthas come to no decision varying its earlier determination in regard to the scheme.
– When will the contributions to the fund commence, and when will the medical benefits become « vail able?
– One could continue indefinitely answering questions of that nature, but the House can rest assured that, up to the present time, the Govern* ment has come to no decision different from that previously reached by it.
– Is this matter being reconsidered ?
– It is not before the Government at the moment. I do not know how these rumours get into circulation. Last night I gave a categorical denial of them to the press and also to the Acting Leader of the Opposition in this House.
The honorable member for Batman (Mr. Brennan), in his usual restrained and interesting way, spoke on the subject of defence, and I listened with great attention to what he had to say. The only conclusion I can come to is that the honorable gentleman had not quite understood the statement which I made a little earlier on that subject. The best way I can be of service to him is to let him have a copy of my statement, and that I now do.
– Is progress being made with the supplementary legislation to be introduced with regard to the national. Wealth and pensions insurance scheme?
– That matter is receiving close attention.
Question resolved in the affirmative.
The following papers were presented : -
Arbitration (Public Service) Act Determination by the Arbitrator, &c. - No. 23 of 193S Profesional Officers’ Association, Commonwealth Public Service.
Commonwealth Public Service Act - Appointment of W. B. Dwyer, Department of Commerce.
Dried Fruits Export Control Act - Fourteenth Annual Report of the Dried Fruits Control Board for year 1937-38, together with statement by the Minister regarding the operation of the act.
House adjourned at 4.25 p.m.
The following answers to questions were circulated: -
E asked the Treasurer, upon notice -
– Inquiries are being made and a reply will be furnished as soon as possible.
e asked the Attorney-General, upon notice -
– The answers to the honorable members questions are as follows : -
n asked the Minister forthe Interior, upon notice -
– Replies to the honorable member’s questions will be furnished as soon as possible.
t asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the AttotneyGeneral, upon notice -
– The answers to the honorable member’s questions are as follows : - 1 and 2. It is not the practice, in reply to questions, to express opinions on matters of law.
n asked the Minister for Civil Aviation, upon notice -
– The answers to the honorable member’squstions are as follows : -
s asked the Minister for the, Interior, upon notice -
Will he give the number of migrants that entered Australia during the years 1930-37, 1937-38, and since July, 1938, and state their respective nationalities and the States in which they landed?
– The information is being obtained.
Cite as: Australia, House of Representatives, Debates, 10 November 1938, viewed 22 October 2017, <http://historichansard.net/hofreps/1938/19381110_reps_15_157/>.