15th Parliament · 2nd Session
Mr. Speaker (Hon. G. J. Bell) took the chair at 3 p.m., and read prayers.
– With regard to the statement in to-day’s press that the Minister for Supply and Development has complained that the major oil companies hare ‘ treated the Government unfairly in the matter of supplies of petrol, can the Minister say whether the Government intends to take early and definite action to deal with the situation which has arisen ?
-I assure the honorable member that the matter to which he has referred is being thoroughly investigated.
– Will the Government cease calling for tenders for supplies of oil, petrol and power kerosene, and, under its emergency powers, assume control of the plant of Commonwealth Oil Refineries Limited and operate it in the interests of the Commonwealth?
– The suggestion of the honorable member will be taken into considerationwith other proposals.
– Will the Minister call for a report from the Government’s three directors on the board of Commonwealth Oil Refineries Limited as the present position appears to indicate collusion between that company and the major oil companies?
– The suggestion of the honorable member, as well as other aspects of the matter, including some which will not redound to the credit of the people concerned, will be taken into consideration in the investigation to which I have referred.
– In addition to investigating the charges made by the major oil companies for supplies of oil fuel to Government departments, will the Minister also institute inquiries into the sales to the public, with a view to ascertaining whether the increased prices recently charged for such commodities are justified ?
– The Attorney-General is already investigating certain aspects of the supplies of petrol as between suppliers and distributors.
– Has the Prime Minister seen in to-day’s press the suggestion of the Premier of New South Wales that the National Council, consisting of the Prime Minister and the
Premiers of the various States, be revived? Further, can the right honorable gentleman say whether he has received any such suggestion, and, if so, whether it is receiving consideration?
– I have seenthe statement to which the honorablemember refers. The matter is now engaging my attention.
Effect of Military Operations
– Has the Minister for the Army seen press statements that poultry-farmers, including a number of returned soldiers, living in the Preston, Liverpool and Hillview districts, have had large quantities of hatching eggs destroyed by the concussion resulting from . military maneuvres in the locality? One poultry-farmer is reported to have had 16,000 eggs and another 20,000 eggs destroyed. Will the Minister make inquiries; and ifthe report is well founded will herecompense these people for the losses incurred?
-I am not aware of the existence of the conditions to which the honorable member has referred, but I shall have inquiries made in the matter. At this stage I am unable to give a definite reply to the latter part of the honorable member’s question.
– Has the attention of the Prime Minister been drawn to a statement in the press that Australia is not given adequate representation in Great Britain in relation to war matters? If so, will he say whether any move has been made to give to Australia greater representation on the Dominion Council of War?
– I have seen references in the press to the matter referred to by the honorable gentleman, but I am unaware of the existence of any such body as the Dominion Council of War. The Commonwealth Government is in daily communication with the government of Great Britain, and has frequently expressed its views, with plainness on matters in respect ofwhich it hasfelt competent to express opinions.
– Did the AttorneyGeneral witness a march of Communists through the streets of Sydney a few days ago and see placards depicting the hammer and sickle and advocating revolution? Can he inform the House on whose authority the procession took place?
– 1 have no information on the subject other than what I have gleaned from the press. I understand that there was a procession, that it -was organized, that some of its members were adorned with placards depicting the hammer and sickle, that the red flag was carried, and that those in the procession were cheered by the inspiring strains of the Internationale. I have no doubt whatever that the persons who marched in the procession were among those who subsequently, in the Domain, complained bitterly about the restraint of personal freedom in this country. Nor have I any doubt that the persons who organized the procession were also responsible for the “ hands off Russia “ resolution,
– Has the Minister for the Army any evidence which would support the belief that the press reports of a few days ago of a clash at Darwin between a member of the Darwin garrison and a pressman who happens to be the Secretary of the North Australian Workers Union are exaggerated? If they are, will he so inform the House in order that the matter may be treated as local and trifling?
– I have some knowledge of the incident to which the honorable member has referred. From the reports that I have so far received, I consider that the press account is grossly exaggerated. It would appear that the individual who believed himself to have been wronged could, had he so desired, have taken civil action against the individual he considered had wronged him, but has expressed no desire to do so. In view of the repeated press comments, however, I am instituting an inquiry in order that I may be informed of the full facts of the case.
– In view of the anxiety of those who are interested in the goldmining areas of Australia with respect to the incidence of the gold tax, will the Treasurer inform me as to when the statement which last Thursday he promised would be made at an early date is likely to be made?
– I hope to be in a position to make a statement on the matter to-morrow.
– In consequence of the many complaints of hardship having been caused bv the banning of American magazines, will the Minister representing the Minister for Trade and Customs state whether the Government is prepared to give consideration to the lifting of the ban, or, alternatively, the establishment of a quota?
– Consideration is being given to the matter.
– It has been stated that material from foreign countries is used in the manufacture of .uniforms and other clothing for the Australian Imperial Force. Will the Minister for Supply and Development state whether this is correct, or throw some light oil the position?
– It is true that, in order to make adequate provision in respect of equipment for the Australian troops, we have had to draw upon supplies from foreign countries. I assure the honorable gentleman that this course has not been followed, nor will it be followed, until we have exhausted the supplies of locally produced materials and materials from Empire countries.
– Will the Prime Minister state whether the Government still has under consideration the appointment of an Australian Minister at Tokyo? Is it the intention of the Government to make such an appointment in the near future, in view of the importance of maintaining the friendliest relations between Japan and Australia?
– This matter is under active consideration.
– Some time ago the Government appointed an advisory committee to make recommendations in respect of its building programme. Will the Minister representing the Minister for the Interior state whether that committee has yet presented a report? If it has done so, can the report be made available to honorable members?
– I shall obtain the information for the honorable member.
– Has the Minister for Commerce received any communication from Hobart merchants complaining of the irregular running of the Zealandia between Hobart and Sydney? If so, will the honorable gentleman take immediate steps for the acquisition of the Zealandia for the duration of the war, and ensure a continuous shipping service between Hobart and Sydney, so that the war effort of Tasmania may not be weakened ?
– I have not received lately any communication of the nature referred to.
– On the 6 th May.
– No. Some weeks ago I received a communication from the honorable member for Denison (Mr. Mahoney). I then informed the honorable member that the difficulty of which he complained was due to the coal strike. I have no intention of asking Cabinet to requisition the Zealandia. Last Friday, I informed the honorable member that the Government had agreed to pay this year a subsidy of £5,000 for the purpose of keeping the Zealandia running during the winter months.
– I cannot find on the notice-paper to-day under the heading “ Government Business “ any reference to the Motor Vehicles Agreement Bill. Will the Prime Minister inform me as to when it is proposed to bring this bill before the House ?
– Leave to introduce this bill was given last week, but the first reading of it was not then taken. Legislation cannot find a place on the noticepaper except in the form of a notice of motion with respect to its introduction or subsequently at one of the stages of the bill. The first reading of this bill will be taken this week, probably to-morrow.
– I understand that the Attorney-General administers matters relating to special peace officers. Will the right honorable gentleman inform me why an applicant for appointment as a special peace officer is required to state his religion? Will he also lay on the table of the House a copy of the application form for appointment as a special peace officer?
Mr. HUGHES. The honorable gentleman is correct in assuming that the appointment of peace officers falls within my jurisdiction. I am not able to say why an applicant for appointment as a peace officer is required to state his religion, but I shall inquire into the matter and shall also lay on the table of the House a copy of the application form.
– Can the Minister for Air state whether or not his department declined to take delivery of very valuable special piping intended to be used as struts to cradle aeroplanes, which recently arrived in Australia, because it was unaccompanied by a licence or bill of lading, and it was taken out to sea and d dumped?
– I have no information with respect to the matter raised by the honorable member, but I shall inquire into it and inform him as soon as possible.’
Advance by Commonwealth Bank.
– Will the Minister for Commerce state whether the advance made by the Commonwealth Bank to the Commonwealth wheat pool carries an interest charge? If so, what u that charge? Has the pool to meet that expense, or is it a debit against the Commonwealth Government?
– The pool meets the expense. The interest charge is a low one.
– What is it?
– I cannot say offhand, but I believe that it is 2J per cent.. I shall ascertain the rate, and inform the honorable gentleman.
– Did the Treasurer last, week make to the press a statement to the effect that the Government would welcome any suggestions from outside persons or bodies with respect to the amending taxation legislation now before Parliament or to be introduced? If so, does the statement mean that the Government is prepared to consider any proposals for the amendment of the propositions with regard to various taxes submitted by the honorable gentleman in his financial statement? Has the honorable gentleman received from Mr. S. MacKellar White, President of the Taxpayers Association of New South Wales, the request that more time be allowed to the. various bodies concerned to submit SuKgestions in accordance with his invitation, before this legislation is passed through Parliament ?
– I made a statement to the press in connexion with the bill which I shall to-morrow seek leave to introduce. I indicated that I intended to take it to the second-reading stage and would then agree to the adjournment of the debate to give to the various business interests likely to be affected an opportunity to make comments and representations upon it. I made it plain that the Government would not depart from the general principles of the measure, but I quite appreciate that there may be certain aspects of the subject on which the Government may not be fully informed. It was on those matters that I invited representations and recommendations.
– Did the honorable gentleman ask for suggestions?
– I suppose “representations “ would cover “ suggestions “. A reasonable time will be allowed for the representations to be made.
– Has the AttorneyGeneral had brought under his notice by public service organizations the serious congestion of business awaiting the attention of the Public Service Arbitrator? If so, has the Government given any consideration to the appointment of an additional arbitrator in order that claims awaiting attention may be heard without undue delay?
– That ma.tter has been brought under my notice, and the Government is now considering the appointment of an additional arbitrator. I quite appreciate the importance of this subject and there will be no delay in making a decision.
– I ask the Minister representing the Minister for Trade and Customs whether he will lay on the table of the House all reports and recommendations forwarded by the New South Wales Prices Commissioner to the Commonwealth Prices Commissioner?
– I shall have the subject-matter of the honorable gentleman’s question brought under the notice of the Minister, and a reply will be forwarded to him.
– On the 23rd April I asked the Attorney-General for particulars of cases listed for hearing before the Commonwealth Arbitration Court. Is the right honorable gentleman yet able to give me a reply to my question ?
– I hope to make the information available to-morrow.
– Has the Minister for the Navy been informed
– I did not *****
The matter is receiving consideration.
– Tn the absence of the Minister responsible for the administration of the censorship, I direct, the
The censor has, upon instructions from Sir Henry Gullett, completely banned our magazine Soviets To-day. Of the sixteen pages of subject-matter intended for publication, submitted to the censor, every single word and et err photographic b’ock was deleted. Even the name of our publication was prohibited.
I ask the Prime Minister whether there is any explanation available of this action? If the statement in the letter is correct, what is the alleged justification for what was done?
– I shall ascertain the facts and advise the honorable member in due course. If he has a copy of the journal available I should be glad to have it.
– I have not one.
– In order that the fullest advantage may be taken of the Tasman’ air service, the regular operation of which the Minister for Air can no doubt confirm, I ask whether arrangements can be made for the censorship of mails to be expedited?
– I shall make inquiries to see if anything can be done to make it possible for persons who receive mail to reply to it by the return service.
– I direct the attention of the Treasurer to a statement published in the Sydney Morning Herald to the effect that there is growing support in the Cabinet for a proposal to collect federal income tax by compulsory instalments. I ask the honorable gentleman whether any specific proposal is under the consideration of Cabinet and, if so, whether we may expect a decision on it in the near future?
– I saw the statement in the Sydney Morning Herald. I do not know from what source it came because the matter has not been discussed in Cabinet. The only discussions that hare taken place have been between myself and the Commissioner of Taxation, and those discussions have not yet concluded.
Allocation of Grants to States
– I am reliably informed that the respective Ministers of Agriculture in each of the States have a complete summary of the requests which they have made to the Government for assistance under the Wheat Industry Assistance Act. Will the Minister for Commerce, before the debate in respect of the wheat industry commences to-day. supply me with a copy of that summary?
– At the present stage, no.
– If the summary of the requests of the States to the Commonwealth for assistance under the Wheat Industry Assistance Act is not a secret document, on what grounds, other than his Fascist tendencies, has the Minister for Commerce refused to allow honorable mem, berg to peruse that innocuous document?
– In answer to the honorable gentleman, I desire, by leave, to make a statement.
Mr. SPEAKER (Hon. G. J. Bell).Is leave granted?
– No. I want the document, not a statement.
– If I do not make a statement now, I shall make it later.
– Would I be in order in moving the suspension of Standing Orders to enable the Minister for Commerce to make his statement?
– The honorable member may do so bv leave of the House.
– I ask for leave to move that motion.
– Is there any objection?
Opposition MEMBERS - Yes.
– Can the Minister for Commerce inform the House of his reasons for arriving at his announced allocation of amounts to certain States?
-I desired to make a statement on that, but the House has declined to give me leave.
– I asked the Minister for Commerce if he could supply his reasons.
– I am quite prepared to give those reasons.
Mr.Forde. - The honorable member for Wimmera intends to move the adjournment of the House on that subject.
– No. That is a different matter altogether.
Mr.Curtin. - There is no objection to leave being granted.
Mr. ARCHIE CAMERON (BarkerMinister for Commerce). - by leave - Let me say at the outset that the State of Victoria has no just cause of complaint in this matter. A few brief observations will illustrate the truth of this assertion.
After the conference in Canberra in November, 1938, the then Minister for Commerce asked each State Minister of Agriculture to supply information under six headings regarding marginal areas and State Government measures in connexion therewith.
The information sought was as follows: -
In his reply to this letter on the 9th December, 1938, the Minister for Agriculture of Victoria advised that the information sought would be furnished as early as practicable. Onthe 2nd March, 1939, a further letter was addressed by the Secretary, Department of Commerce, to the Director of Agriculture, Melbourne, informing him that replies had been received from all States except Victoria on this subject. The information was furnished by the Director of Agriculture on the 12th April, 1939.
The comment might be made here that none of the States at this stage submitted actual plans in connexion with marginal area relief. The information furnished by them was in respect of measures already undertaken by the States in an endeavour to overcome certain aspects of the marginal area problem.
In South Australia, however, the Government took immediate steps to appoint a special committee to make a general survey of the areas likely to be classed as marginal lands. The committee’s report, which included a comprehensive and detailed plan for dealing with marginal area relief, was forwarded to the Commonwealth Government on the 28th November, 1939. It was known that the Western Australian Government also had proposals under consideration.
The two matters of marginal area relief and assistance to distressed farmers were raised at the meeting of the Australian Agricultural Council at Hobart on the 8th and 9th February. After discussion, the Council adopted the following resolution : -
That the Council requests the Commonwealth Government to give immediate attention to the supply of funds, as provided in the wheat industry assistance legislation of 1938, for the purpose of relieving the States in relation to marginal areas.
It will be noted that the council did not make any recommendation regarding assistance to distressed farmers. These two matters were submitted to the Commonwealth Cabinet, which, on the 1st March, 1940, approved of the grant of £500,000 for the purpose of assisting the States in relation to marginal areas. At the same time, the Cabinet refused the requests for special assistance where farmers had suffered through hail, frost and rust, but did make provision for the supply of seed and super-phosphates for the coming crop. It was provided that, where the State made advances to farmers for these purposes, the amounts would be recognized by the Australian Wheat Board as charges against the crop in addition to registered liens and accounts for cornsacks.
On the same day, the 1st March last, my predecessor, Senator McLeay, conveyed Cabinet’s decision to Ministers for agriculture in New South Wales, Victoria, South Australia and Western Australia, and requested them to submit to him up-to-date particulars of their proposed plans.
The South Australian Government had already submitted its plan in November, 1939. The South Australian proposals provided for an expenditure of £947,000 over a period of four years, to cover 1,27 6 settlers in an area of 1,695,000 acres. The amount of £200,000 was requested for the current year.
The Minister for Agriculture in Western Australia furnished details of his State’s plan in a letter dated the 2 1st March, 1940. This provided for an expenditure of £417,000 over a four-year period, embracing 2,202 settlers, of whom 1,232 had already been evacuated. The area involved’ was 3,017,000 acres, and £115,000 was the amount estimated to be required for this year.
On the 26th March, 1940, further communications were addressed to the Ministers for agriculture in New South Wales and Victoria, requesting them to expedite particulars of their proposals. The Minister for Agriculture in New South Wales replied by letter on the 11th April, 1940, and the information furnished was supplemented bv detailed discussions with three officers of the New South Wales service who visited Canberra for this purpose on the 15th April, 1940. The New South Wales proposals covered an area of 3,000,000 acres, with from 2,600 to 3,000 settlers, half of whom will be evacuated. The cost of this State’s scheme is £1,300,000, spread over a fouryear period. The amount requested for this year was £228,000.
In the case of Victoria, the Premier of that State addressed a letter to the Prime Minister on the -17th April, in which he set out details of the expenditure incurred hy the Government of Victoria in connexion with the rehabilitation of closer settlers. No proposals were submitted regarding the marginal area problem of the State, but the letter included the following: -
Portion of the money to l)e allocated to Victoria would therefore he used for the estblishment of those settlers (marginal area settler* j on larger areas, but it is desired that u considerable portion of the amoUnt for this Stale should be paid under Section 7 (ti), and appied .11 the provision of relief to distressed » 1heatgrowe rs.
Immediately 1 am in receipt of advice from you as to the amount to be paid to this State, details i.f the plan of distribution will be submitted to .the Minister for Commerce for approval.
I direct attention to three important points arising from this letter. First, although the Victorian Minister for Agriculture had been asked on the 6th December, 193S, whether his State had plans for denting with marginal areas, no details had been submitted to the Commonwealth Government seventeen months later. It would thus appear that no plans for dealing with this problem had teen formulated by that Stale. Secondly, the Premier’s proposal to expend a considerable portion of the amount for Victoria on relief to distressed farmers’ was contrary tr> the conditions of the grant of £500,0”0 by the Commonwealth Cabinet. Cabinet’s decision had been conveyed to the Premier, both directly through the Prime Minister in a letter to the Premier on the 29f,h March, 1940, and indirectly through the Victorian Minister for Agriculture, who had been informed of the decision by the Minister for Commerce. Moreover, the Victorian Minister for Agriculture participated in the discussions of the Agricultural Council meeting at Hobart, and was aware of the view* of all States regarding the purpose of the grant. Thirdly, the Premier had suggested that I should allocate an amount to Victoria, after which he proposed to submit to me for approval details of the plan of distribution. I was not prepared to accept this condition, particularly as the other three States con,cerned had submitted their schemes, which I had been able to examine care.fully with a view to their suitability and continuity.
On the l$h* April last, I invited Ministers for agriculture to meet me at Canberra on the 29th April to discuss their plans in detail. Ministers agreed, with the exception of the Victorian Minister, who advised me that he would be unable to be present. He was informed that the meeting would be held in his absence. However, the Ministers from the lour States met at Canberra on the 29th and 30th April, when the Victorian Minister for Agriculture presented a summarized one-page statement covering a p. an for marginal area relief, which, it was emphasized, was for one year only. The area involved in that State was said to be 765,000 acres, and the number of settlers affected was 273. The total expenditure for this year was estimated at £135,000, and a request was made for an allocation of this amount.
In my opinion, the Victorian plan had not been formulated to solve the p”o’ lem of marginal areas in that State, but had been hastily prepared and submitted in an endeavour to justify the claim by that State for an allocation from the Commonwealth grant, should its request to divert the money for other purposes fail. The plan was unsatisfactory, and compared most unfavorably with the detailed schemes submitted on behalf of the other three States. My decision to exclude Victoria from a share in the grant is justified entirely.
It will be appreciated that the problem of marginal areas is one which has caused governments considerable anxiety. It is my belief that a concerted effort by the governments concerned is necessary, if this problem is to be finally overcome. Certain State governments have appreciated this position, and have already taken action to .deal with the removal of surplus settlers from marginal areas, and the rehabilitation of those remaining. The Commonwealth Government, by making the grant available, has evinced its desire to assist the States in this work, to enable them eventually to complete their well-conceived plans to eliminate marginal production from the wheat industry. This will be a big step in the direction of achieving the very desirable objective of the stabilization of the wheat industry.
– In the event of the institution of a compulsory system of payment of income tax by . instalments, will the Treasurer give consideration to crediting the taxpayers with bank interest rates on tax so paid in advance?
-In the event of the Government deciding to collect income tax by compulsory instalments, I shall give consideration to the honorable member’s suggestion.
– Has a Commonwealth inspector been sent to the scene of the storm where £50,000 worth of damage was caused to a crop of apples and pears in my electorate about which the honorable member for Boothby seems to be concerned and which is the property of the Apple and Pear Acquisition Board ? If such an inspection has been made, what was the report and what decision has the Government reached?
– No inspector has been sent to that area under my personal authority. As the damage was confined to one area, I intend to leave it for adjustment by the State concerned.
– As the answer given to my earlier question was not clear to me, I should like the Minister for Commerce to state whether in respect of damaged fruit it is the policy of the Government to pay the growers an advance of 2s. a case for apples and 3s. a case for pears?
– It is not customary to indicate matters of policy in answer to questions without notice; but I believe that in respect of the fruit referred to by the honorable member, 2s. a ease has been paid for apples, and 3s. a case for pears.
– The Minister could have told me that in reply to my earlier question.
– Will the Minister for the Army have investigations made as to why, in some cases, members of militia camps are kept waiting unnecessarily long periods for their allowances? Will he inform the House why men who have been compelled to return to their civil employment the day before pay day have been kept waiting up to fifteen months without their pay being made available tothem, despite repeated applications ?
– At all camps there is a regular fortnightly pay day, when all members of the units receive militia pay and any allowances, such as the horse allowance, which is due in Light Horse camps. With regard to the last part of the question, the honorable member will realize that it is not possible for troop officers themselves to keep on hand sums of Government money. This money must be returned on the completion of a camp, in order that it may be properly safeguarded, and individuals waiting to be paid must make application through their commanding officers. I am amazed to hear the period alleged to have elapsed in the particular instances referred to by the honorable member. If he brings those cases under my notice I shall see that the claims are settled immediately.
– In view of the exag gerated reports supplied by Darwin representatives of southern newspapers, including one recently that the scum of southern workmen have gone to Darwin to be employed on defence works when it is known that 90 per cent of them are married men maintaining homes in Sydney or other State capitals, will the Minister for the Army ascertain if the powers of censorship can be so exercised by the Commandant as to prevent inexperienced pressmen submitting exaggerated reports in which they malign reputable workmen who have come from the south and Northern Territory workers ?
– I shall bring the honorable member’s question under the notice of the Acting Minister for Information.
– Will the Treasurer state whether it is a fact that he and the Minister for Supply and Development have recently purchased expensive American motor cars, and, if so, whether such action is consistent with the declared policy of the Government to conserve American dollars for war purposes?
– Insofar as the question is one which is of sufficient urgency to require to be put without notice, I may say that my wife purchased a car - not a very expensive one - which the honorable member can inspect if he so desires. The question of dollars was not involved.
– Has the Minister for External Affairs any information which has not yet been published to give to the House concerning the international situation ?
– The Government is not in possession of any information, apart from that which has appeared in the newspapers, which, having regard to public interest, can be made available to the House.
– Having regard to the public interest, can the Minister for External Affairs make a statement concerning the present position in Norway?
– I am not prepared to make such a statement offhand ; but I give an undertaking that I shall consider the question raised by the honorable member, and see whether it is practicable to make a pronouncement on the subject.
Presentation to the
Mr. SPEAKER (Hon. G. J. Bell).The Address-in-Reply will be presented to His Excellency the Governor-General at Government House at 10.30 a.m. to-morrow, and I shall be glad if the mover and seconder of the AddressinReply, together with other honorable members who so desire, will accompany me when I present it.
– I have received from the honorable member for Wimmera (Mr. Wilson) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely,” The deplorable position of the wheat-growing industry, necessitating a further payment on acquired wheat in the No. 2 pool “.
.- I move -
That the House do now adjourn.
I move this motion for the purpose of discussing -
The deplorable position of the wheatgrowing industry, necessitating a further payment on acquired wheat in the No. 2 pool.
– Is the motion supported ?
Five honorable members having risen in support of the motion,
– I have moved this motion not only to enable the deplorable state of the industry to be discussed, but also with the specific intention of inviting honorable members to register their opinions as to whether they desire the Commonwealth Government to hasten to rescue this great national industry from economic extinction. If the answer be in the affirmative the Government must accept it as a direction from this Parliament to go immediately to the aid of a long-suffering section of our people who to-day, because of their dire financial circumstances, are anxiously looking to this Parliament for direct assistance. In the first place there is an urgent need for a prompt payment of1s. a bushel on the current season’s wheat. This payment, I suggest, should be followed at the earliest possible moment by the launching of a well-considered long-range agricultural policy of planned production to meet the available home and export markets, together with a guaranteed minimum price for wheat. Briefly, that is the irreducible minimum required to meet the exigencies of the situation which has developed in the Australian wheat-growing industry. I am further of the opinion that, in order to save thousands of our best and most expert farmers from complete bankruptcy, men who have, in many instances, given a lifetime of service to the nation, and to prevent their wholesale removal from their farms, a moratorium will have to be provided, with such qualifications as are just and necessary, in order to give sufficient time and respite to enable the industry to be placed on a more concrete basis. The complete lack of a definite agricultural and marketing policy for Australia by successive Commonwealth
Governments, particularly with respect to wheat, is an outstanding blot on our 40 years of federation. This is all the more reprehensible when it is realized that for approximately half of that period there has been in this Parliament a Country party whose alleged mission has been the promotion and protection of rural interests. For the greater part of that time that party has held the balance of power in this House; but as it has not been prepared to use its power, wheat-growers and other producers have drifted into their present alarming position. Had the members of that party displayed the same vigour and aggressiveness on behalf of the wheat-growers that they have displayed in achieving their own personal ambitions in this Parliament, then the wheat industry would not be in the desperate position it is in to-day.
– The honorable member is not discussing the motion.
– The honorable member has not been here sufficiently long to know what that party has done.
– Every mail I receive brings fresh evidence of the financial privation of wheat-growers throughout Australia. Mortgagees and banks are foreclosing, storekeepers are closing down, and credit is unobtainable, even when the security offered is considered to be substantial. Cropping operations cannot be proceeded with, as the growers cannot afford to purchase Seed, fertilizers, or fuel for tractors. Indeed, instances are not rare in which the wives and children of wheatfarmers are inadequately clothed and fed as a consequence of the poverty to which I have referred. These vexatious conditions also adversely affect those indirectly connected with the industry, including business people and workers. On an average the growers have received up to date for the last year’s production between 2s. 4d. and 2s. 5d. a bushel net at country sidings, an amount on which it is utterly impossible to carry on. I have no hesitation in stating that no reason exists to justify any further delay in the making of another substantial advance to the growers. The credit of this country is certainly sufficient to enable the Government to find an additional £5,000,000 or, if necessary, £10,000,000, in order to pay the wheatgrowers what is owing to them for the wheat it has commandeered and now has in its possession. Surely, wheat is worth at least the cost of its production. The growers now know that money to which they are entitled can be found if the Government really wants to find it. We have reached a stage when the Government must decide whether it wants the wheat industry in Australia to survive, bearing in mind the value of foreign exchange or London funds built up with wheat exports, or whether it is prepared to surrenderthe industry to other countries which possess more competent governments with capable administrative staffs which realize the value of this industry.
The Minister for Commerce (Mr. Archie Cameron) has just announced the allocation of portion of the money provided under the Wheat Industry Assistance Act, and he has wrongly excluded the wheatgrowers of Victoria from participation in this assistance. Although approximately one-third of this money is collected in Victoria, the Minister has dictatorially decided that the growers of that State are not to share in this distribution. Growers’ organizations have protested against the alienation of this money from the purpose for which the States and the Commonwealth agreed it should he used. They affirm that it should be used exclusively for the purpose of assisting necessitous wheat-growers who, from year to year, in some portions of the Australian wheat belt suffer from seasonal disabilities of various kinds. I emphasize that point. The sum of £500,000, allocated under the Wheat Industry Assistance Act, from the flour excise tax revenue, should be used for the purpose of relieving distress resulting from frost, rust, droughts and floods. If it were used in this way, it would serve as an insurance fund against such adversities and, in my view, would be more properly used in that way than for the purpose of eliminating marginal lands, which, I believe, is a responsibility of the States.
I have said that, from a Commonwealth point of view, we are lacking in any real agricultural policy. I have been studying closely the agricultural policies adopted by other countries. Experimental work in this direction has been carried out with the greatest success, perhaps, in the United States of America. For that reason I propose to submit to the House certain statements made by Mr. Wallace, the Secretary for Agriculture in that country, in which he outlines the activities of his Government on behalf of American wheat-growers. He says -
It is held that something must bc done to accelerate recovery; and not merely something - a vast campaign under government leadership is regarded as essential. It is held that the situation demands a grand extension of economic planning and adjustment, to be worked out by a process of trial arid error. This is held to be necessary not, merely to accelerate recovery but to prevent future crises and prolonged depressions, and to ensure continuously more effective use of our abundant resources . . . We are face to face with the necessity for planning our production to fit the needs of all our people, plus what we can reasonably expect to export at a fair price with a margin of safety to allow for drought, crop failure, or other disaster. Economic engineering, including currency management and planned agriculture and industry, is held to be essential to temper the cruelty of economic forces and make them serve human ends, just as medicine and engineering have proved invaluable in tempering the cruelty of natural forces and making them serve human ends The experience of the past three years is held to have shown conclusively that unstimulated contraction of production is too slow and too cruel, and the experience of the Farm Board that merely to advise farmers to reduce production is futile. Moreover, it is held that agriculture is so fundamental, and the prices of agricultural products so depressed, that a huge transfer of purchasing power from consumers to farmers is not only just, but necessary to promote national economic recovery in the interest of consumers themselves. This is the ground on which processing taxes are levied to provide funds for cash rental and adjustment payments, which in turn are being paid to secure contraction of production so that farm and market prices may be raised . . . Secretary Wallace said on the 14th November: “By’ reducing acreage we are trying to get off the international market until such time as we can bring about a real increase of foreign purchasing power by tariff reduction and the negotiation of reciprocal tariffs.”
– What financial assistance does the Government of the United States of America eve to its farmers?
– It gives to them a guaranteed price for their wheat, conditional upon their undertaking to accept direction from governmental authorities as to what areas they will sow. As the result of that arrangement sowings in the United States of America have been reduced by about 15 per cent. The scheme is elastic. Sowings can be reduced, or extended, as the domestic or world demand requires. That is the point which I now emphasize. It is imperative that we in this country devise an agricultural policy along these lines.
– Does the honorable member want to restrict acreage?
– I have not mentioned restriction.
– But the honorable member must face up to the problem.
– If restriction is shown to be necessary I would support it. I feel that in view of existing circumstances, having regard particularly to the war, it is the only way open to us to deal with the problem at the moment.
– Then the honorable member is quite opposed to the Premier of Victoria on that point?
– Yes, in that respect I am opposed to him. At the present time we must face up to the position in a practical way. However, we should not accept restriction as something permanent, but should forthwith devise a policy for the expansion of our markets. I feel sure that we can obtain more markets provided we go the right way about the matter. There are many ways by which this can be done. We can enter into trade agreements with other countries by modifying our tariffs in respect of those countries.
– What other countries would the honorable member suggest?
– I have no doubt that when this war is over many countries will be prepared to take large quantities of Australian foodstuffs. For instance, there are teeming millions in Asia whose taste for cereals would only have to be cultivated in order to give Australia an unlimited market for such commodities.
– What commodities could Australia take in return for such exports ?
– I do not intend to deal with such questions at the moment. There are other methods by which Australia could grapple with the situation. There is, for instance, the system of export credits - something that this country has not yet attempted - which has been successfully employed in other countries, and has greatly facilitated trade. Such a system could be managed by a national bank such as the Commonwealth Bank of Australia. Then, again, there is the system of barter agreements, which, although unorthodox, could be adopted with advantage .to the primary producers of this country. Another method is subsidization, which has already been employed in this country, and could be extended along the lines of similar schemes in the United States of America. Subsidies need not be excessive to be effective. Conditions could be laid down whereby the wheat-growers would contract or increase their acreage as circumstances might require. Such action would be a condition of their participation in a subsidization scheme. I could go into these matters at very great length, but I realize that my time is limited, and 1 have no desire to obstruct the business of the Government in this time of stress. [ emphasize, however, that the position of the wheat-growers to-day is very desperate indeed. That is well known to a majority of honorable members of this House. I have here a very long telegram which I have received from a large meeting of wheat-growers held at Dimboola, Victoria. The telegram conveys the resolution adopted by the meeting, but as it is in an abbreviated form, and possibly would not convey a great deal to honorable members, I shall not decode it now. Also I have received quite a number of telegrams from individual growers, indicating that they are in a very desperate financial plight. This situation is the culmination of action which has been taking place ever since 1931, from which date the financial position of the wheatgrowers has been steadily becoming worse. In the older districts of Victoria, which include some of the finest wheat-growing country in that State, many settlers who have spent the whole of their lives in farming pursuits, and have until recent years been in a sound financial position, have lost all their equities, and are being forced off their farms. Surely that is something that this Parliament cannot tolerate ; surely the time has arrived when some definite action to bring about an improvement of the financial position of these people should be taken. If the Government does not act, this industry will continue towards extinction. Undeniably that fate awaits it owing to the cruelty of the process to which the Minister for Commerce apparently subscribes. The honorable gentleman merely says that he advises the farmers not to sow. He must know very well that such a policy is unfair. Some farmers may follow his advice, whereas others may double or substantially increase their acreage, and as a consequence the confusion will continue. I ask this Government to do something definite along the lines which I have indicated. Most important of all, a payment must be made promptly to alleviate the distressing conditions prevailing among the wheat-growers, who are in a worse plight now than at any time in the history of the industry.
– I have listened with some interest to the remarks of the honorable member for Wimmera (Mr. Wilson), but I regret to say that, while the honorable member has paid some attention to the plight of the Australian wheat industry, he has not done very much in the way of suggesting what he thinks this Government should do about it. Only last Friday I made a statement in regard to the world wheat situation generally, but the honorable member for Wimmera has not made one reference to that statement.
– References will be made to it before long by other honorable members.
– I do not doubt that others will rush in where apparently the honorable member for Wimmera feared to tread. I suggest that honorable members who set out to criticize the policy . of the Government with regard to the wheat industry should give reasons for their criticism. It is not sufficient for them simply to say that this or that has happened; they must advance some arguments in support of their statements. The time has arrived when I can usefully tell the House something about the position of the wheat industry throughout the world as we see it.
The present war commenced with adequate supplies available, and prices of wheat so low that even the Chinese could buy it. The price situation soon altered as a result of war conditions.
The world’s record harvest in 1938-39 was followed by the 1939-40 harvest, only 5 per cent, to 10 per cent, lower, and the second highest in history. As the result, stocks of wheat accumulated, and, before the war, the supplies of wheat available for a limited international market were approaching excessive figures which overshadowed the world market during the depression years. World production of wheat for 1938-39 was 4,600,000,000 bushels, and for 1939-40, 4,250,000,000 bushels. These figures exclude the Union of Soviet Socialist Republics, the world’s largest producer, and China, as their figures are unobtainable. The world carry-over of wheat in July, 1938, was 599,000,000 bushels. By July, 1939, it bad increased to 1,189,000,000 bushels, and the estimate of the carry-over in July, 1940, is 1,455,000,000 bushels. This latter figure represents a greater stock of wheat than ever previously recorded, and can be compared with the stock of 1,193,000,000 bushels in July, 1934.
– What authority has the Minister for these statements ?
– The figures given are Cargill’s estimates and they should be fairly clear to the honorable member for Wakefield (Mr. McHugh).
As governments were making preparations for war during 1939, allowance must also he made for the accumulation of security stocks by prospective belligerents. No figures are available, of course, to show the amount of security stocks. In the figures quoted, there are included 200,000,000 bushels held as a minimum reserve by the United States of America, and 40,000,000 bushels, the minimum reserve of Canada. These are not included in some estimates of the wheat surplus. The world stock position, therefore, is that two years of exceptionally high crops have raised stocks from the reasonable figure of 600,000,000 bushels to a quantity in excess of any known before. As 600,000,000 is rather more than the normal peace-time requirement of the international market, there is now more than two years’ supplies for peace-time international trade on hand. It might be noted that last season, 1939-40, the Australian crop reached the record total of 215,000,000 bushels, and
Canada with 490,000,000 bushels had the second largest crop in its history. This position was offset considerably by crop failure in Argentine, where the yield was little more than one-third of the previous crop. ‘ The United States of America had normal production. The reference to the four countries mentioned is made because they form the “ hig four “ among world exporters, and it is their crops which vitally affect the world’s wheat stock position. Canada’s position is particularly important at present as Canada is the other big Empire wheat exporter. As the result of last year’s crop, Canada has stocks of wheat sufficient to supply the normal requirements of the British market for more than two years. The Canadian surplus for the current cereal season is estimated at 456,000,000 bushels, while the normal- British requirements can be taken as about 220,000,000 bushels. The Canadian carry-over is expected to be 250,000,000 bushels, so that a further supply - more than equal to British yearly requirements - is available before the next crop is added to it. This is mentioned to show the position of Empire supplies.
The next factor to he considered is the coming crop. At present there are available preliminary reports only, and Australia’s crop is not planted yet.
In the United States of America the first indications of the 1940-41 crop are that it will he very much below normal. While the first estimate of the winter crop of 399,000,000 bushels has now been raised to 426,000,000 bushels, this is nearly 140,000,000 bushels less than last year’s figure for winter wheat. The lack of moisture evident in the United States of America also applies to Canada to some extent, but no estimates are available yet for Canada, and it is too early to say anything of the prospects in Argentina and Australia.
– How is all this going to help the Australian wheat-grower?
– I am putting my case in my own way.
European production will be affected by war and weather, but it is impossible to give an estimate as to the decrease which either of these will cause. The winter was the coldest in this generation, but its adverse effects on the crops cannot yet be stated accurately. It is reasonable to assume that the coming crop will be decidedly smaller than the last two, and some of the surplus stocks of wheat will be lift ed in the next twelve months; but there is little reason to assume that, during the next twelve or fifteen months, the world stock position will be decreased to something like the normal figures.
From the foregoing survey of world conditions it is apparent that there is no likelihood of prices of wheat soaring. When the war broke out, prices were ruinously low; they have since risen from 2s. 0£d. a bushel, quoted in August last, to 4s. a bushel to-day. But there is no longer a world price for wheat, since buying is done largely by governments, and political factors enter into many of the sales. Even the price in the United States of America cannot be taken as representative, because it has been affected by local conditions’, particularly the impending crop shortage in that country, and it has diverged sharply from the neighbouring Canadian price.
The international market has disappeared, and war conditions have prevented supplies from being delivered to some countries that were possible customers, and have also prevented other countries from getting supplies on to a market which once was open. Winnepeg is taken as perhaps the best guide to events on a free market in conditions where representative free markets are difficult to find. Perhaps the following figures, which show the monthly average cash prices for No. 1 northern wheat in Winnepeg, are the best indication of the movement in prices over recent months: -
It seems that prices will be affected for a- long time to come by the influence of excessively large stocks. They will also be affected by the incalculable effects of war and, as always, by crop fluctuations. In the midst of great uncertainty, little can be said save that there is no reasonable expectation of prices rising appreciably, and it is remarkable that they have risen to their present level.
– What is the guaranteed price in Canada?
– I cannot say at present ; but Canada is very much closer than Australia to the United Kingdom and the British Government is prepared to provide for the Canadian crop shipping facilities which cannot possibly be arranged for the Australian crop. That must have a very important bearing on what the Canadian Government can do in respect of guaranteeing wheat prices during this war.
– Because of its proximity to Great Britain, Canada can send three or four shiploads of wheat to the United Kingdom for every shipload that can be sent from Australia.
– Yes, and when Australian shipments have to be sent by the Cape route, the position will be even more in favour of Canada.
– Is not much of this trouble due to the sale, many years ago, of the Australian Commonwealth Line of Steamers?
– If the Australian ships, to which the honorable gentleman refers, had been retained by the Commonwealth Government and had been in operation to-day, they would not have had a marked effect on this problem of shifting our surplus wheat production. To lift the quantity of wheat about which I am talking would require not dozens, but hundreds of ships. Each1 of those government-owned ships could have made only three or four trips a year to the United Kingdom and back.
The honorable member for Wimmera had something to say about the Commonwealth Government commandeering the wheat crop. It is time that honorable members looked fairly and squarely at this situation. I speak as a wheat-grower myself. My farm is only five miles away from the electorate of the honorable member for Wimmera. When war broke put, the price of wheat was low, and prospects of marketing it were most unfavorable. The Commonwealth Government commandeered the Australian crop, not because it wanted it, or because the Government of the United Kingdom wanted it, but because it was considered to be in the interests of the growers to do fo. No other authority in this country wanted to take control of the crop and certainly no other organization would have been prepared to provide finance, as the Commonwealth Government did last spring, in order to enable the wheat-growers to carry on.
– Is it not the duty of the Commonwealth Government to do that?
– That is a matter for argument; but it is certainly not the duty of the Commonwealth Government to provide a fixed price for an unlimited quantity of any commodity that people like to grow. If the honorable member for Wimmera and other honorable members opposite contend that the Commonwealth Government must offer a fixed price for an unlimited quantity of wheat, my reply is that the Government cannot do it. I add that if the honorable gentlemen opposite had the misfortune to secure control of the treasury bench - in view of recent events I do not think they will - they will not be able to do so. In this time of war it would be well for us to forget about party politics in discussions relating to primary industries and state frankly and clearly what is the position.
Speaking of what ‘had been done in the United States of America, the honorable member for Wimmera referred to the adjustment of farming conditions to meet the situation that had arisen. One of the biggest undertakings of the Government of that country was in the area known as the “ Dustbowl “. It shifted not hundreds of farmers, as is proposed in Australia, but thousands, and it is encouraging wheat-farmers to engage in new forms of primary production. In many areas all production has ceased and it is hoped that the land will revert to pasture. However, if I apprehend correctly the attitude of the honorable member for Wimmera, he has condemned the very thing done by the Commonwealth Government last week, when it allocated sums of money in order to deal with marginal areas. That problem does not exist in the State of Victoria, except in one corner of the honorable gentleman’s electorate.
– Soil erosion is the cause of trouble there.
– That also is one factor in this problem.
I turn now to consider the capacity of the Government of the United States of America to assist the wheat export industry, and I suggest that it is not fair to compare the resources of Australia with those of the United States of America. That country is a big wheat producer, but it has 130,000,000 people, who consume on the average about six bushels of wheat a head annually. Australia’s rate of consumption is approximately the same. The export surplus of the United States of America represents only a fraction of the total wheat crop in a record year, whereas the export surplus of Australia represents an overwhelming proportion of the crop in a record year. Our export sulplus in any year is always a big percentage of the total crop. Australia’s requirement for seed and home consumption is about 32,000,000 or 33,000,000 bushels annually. Therefore, if, as often happens, we have an export surplus of over 100,000,000 bushels, the export ratio must be as three to one. This year the export position is worse, because we have a total crop of 215,000,000 bushels, and home consumption will absorb only about 33,000,000 bushels. Having regard to the large population in the United States of America and the relatively small export surplus of wheat, is it to be marvelled at that the Government of that country is able to subsidize, to the extent of about 2s. a bushel on wheat, the export of flour to the East in competition with Australia? The United States of America wil] export flour at any cost, because that industry represents to it only a small item in its international trade. For the Commonwealth Government to step forward, even ,if it could obtain shipping space, and declare that it would pay an export subsidy on wheat of 2s. a bushel, would be to commit Australia to an expenditure of many millions of pounds.
The honorable member for Wimmera referred to the necessity for a second advance. No body would be more happy than I, or any other member of the Government, if that advance could be made to-morrow. I disclosed in this chamber last Friday figures relevant to this problem. I stated that the overdraft of the wheat pool was over £21,000,000, and I then promised the Leader of the Opposition (Mr. Curtin) that I would let him know the exact rate of interest on that sum. The rate is 3 per cent. Up to that date only 14,000,000 bushels of wheat had been exported from this country under the scheme of Commonwealth control. In view of all the circumstances the Commonwealth Government is bound to defer for some time further consideration of a second advance.
– What is the Minister’s answer to the suggestion made last week that the acreage to be sown should be left to each grower?
– When he is sowing his crop the farmer must take into account the prospects for wheat. With a record crop last season and a record carry-over in the world, men who put under crop every acre that they can sow, regardless of warnings by the Government, create a situation which no government can meet. I said on Friday last that at the next harvest we may be compelled to force farmers to cut a certain percentage of their crops for hay, in order to reduce the exportable surplus of wheat.
– What will they do with the hay?
– The year before last every available sheaf of hay in Tasmania and Western Australia, as well as New Zealand, was sent to Victoria and New South Wales.
– Similar conditions will occur again.
– If there is one thing that farmer members of this chamber should stand for, it is the conservation of fodder in this country. When low prices prevail, and there is difficulty in regard to shipping, we should be putting the binder instead of the harvester to work and establishing reserves of fodder. It is well for us to realize that these difficulties are not concentrated in any one quarter. Many things have to be attended to when a nation is at war. As soon as the Government can see its way to make a further advance from the No. 2 Pool, it will willingly do so. I suggest that the Treasurer (Mr. Spender) would have some interest in including such an advance in the financial returns which will be compiled after the30th June next.
– Can the Minister give any indication as to when another advance will be made?
– Not being a prophet, I cannot give any such indication. It is all very well for the honorable member for Wimmera, and others who support him, to talk about these matters and to say that remedies must be found. As I said last week, our trouble to-day is not in regard to what we can grow, or even what we can sell, but as to what we can ship. The shipping problem cannot be overcome in ten minutes.
– Then can I depend on the Minister’s support for a programme of shipbuilding?
– There is no need for that; but I may ask the honorable member for his support before long. In considering this matter, the House must realize the seriousness of the existing situation. I shall not accept the contention that this or any other government can, at will, produce tens of millions of pounds. Paragraph 504 of the report of the Royal Commission on Monetary and Banking Reform does not carry any weight with me. We must try to evolve some reasonable proposal. Last year, when the Government agreed to 2s.8½d. a bushel for bulk wheat and 2s. 10½d. a bushel for bagged wheat it expected that the Australian crop would not exceed 170,000,000 bushels, but it amounted to 215,000,000 bushels. I say definitely that had I thought then that the crop would be so large I should have thought differently about the initial advance.
– Perhaps the Minister would have suggested1s. 6d. a bushel.
– The honorable member can place any construction he likes on my remarks; no doubt he will place the worst possible construction on them.
– Ships and credit are needed.
– This is not , a matter upon which the House should attempt to force the Government at this stage. The situation is difficult enough without thedifficulties being accentuated. ‘ Generally, our primary industries, with the exception of wheat and one or two others, are in a fairly satisfactory condition. Most of the producers in the Wimmera district, like those in the adjoining electorate of Barker, do not confine their operations to growing wheat-; they also produce some wool, and it will be admitted by most that we have not done too badly with respect to wool.
– The Minister’s time has expired.
.- I had intended to move the adjournment of the House to discuss the position of the wheat industry, but when I learned that the honorable member for Wimmera (Mr. Wilson) had given notice of his intention to do so, I decided to give the motion my wholehearted support. If ever the wheat industry needed assistance, it is now. During the last week-end I visited my electorate and I soon saw evidence that the statement of the Minister for Commerce (Mr. Archie Cameron) last week, especially his concluding remarks, had caused consternation among them. The Minister said -
While doing all in its power for the industry, the Government will’ be in a position to distribute to the growers only the actual returns from the disposal of their wheat, less all expenses.
He told us that 60,000,000 bushels of practically unsaleable wheat in this country would have to foe carried over into next season. If” the Government will be in a position to distribute to the growers only the actual returns from the disposal of their wheat, less all expenses,” his statement means that no further payment will be made until that 60,000,000 bushels has been disposed of.
– It does not mean anything of the sort.
– What else can it mean? According to the Minister, there is doubt whether that 60,000,000 bushels will ever be disposed of. Should that prove to be the case, the Minister’s statement can onlv mean that the Government does not intend to make any further advance.
– Nothing of the sort!
– Various organizations of wheat-growers in my electorate have communicated with me urging that something be done to relieve the situation. One letter contains the following paragraph : -
At a recent meeting of the MendooranMerrygoen Branch of the Wheatgrowers Union, I was instructed to -write and ask you for your support to a request that our union is making to the Federal Government for a further payment of1s. per bushel on last year’s wheat crop.
Yours faithfully, (Signed) M. R. Bourke,
On my arrival in Canberra to-day, I received a number of telegrams. One of them, from the secretary of the Wheatgrowers Union, at Binnaway, reads -
Members request your influence secure further payment one shilling bushel No. two pool otherwise collapse of business interest inevitable.
Mr. John Grant, honorary secretary of the Purlewaugh Branch of the Wheatgrowers Union, sent the following telegram : -
Re Purlewaugh Branch of the Wheatgrowers Union beg you to use your influence re second payment on number two wheat pool.
A number of telegrams have come from Inverell. One reads -
Mount Russell Country party sub-group views with alarm statement suspending further payments from wheat pool stop considering farmers increasing commitments and to help them through must ask you press hard for further immediate payment of one shilling per bushel.
Another is from Mr. Crawford, the president of the Mount Russell Farmers and Settlers Association. In it he says -
Wo view with alarm wheat board’s statement re further payment No. 2 pool owing farmers parlous positionrequest you use best endeavour to secure one shilling bushel advance immediately.
Mr. Neuss, the president of the Inverell Farmers and Settlers District Council, sent the following telegram : -
Inverell Farmers and Settlers District Council view with alarm wheat board’s statement re further payments last season’s wheat stop owing farmers parlous position request you use best endeavours for second advance one shilling bushel immediately.
Those communications reveal the alarm felt by wheat-growers. The Minister spoke of 2s. 8£d. a bushel for bulk wheat and 2s. 10£d. a bushel for bagged wheat; but when the expenses are deducted, the net return is far below those figures. I shall cite one example. It relates to 1,000 bushels of silo wheat for which the advance amounted to £125. From that sum, however, there were various deductions; storage represented- £14 lis. 8d., and other deductions brought the total to £48 13s. 9d., leaving only £76 6s. 3d. for the grower. The same man delivered nearly 1,000 bushels of bagged wheat to the Australian Wheat Board ; but instead of receiving for it about £136, various charges, including £21 4s. 2d. railage, brought his net return to about £112. Instead of being paid 2s. 10½d. a bushelhe received only about 2s. 4£d. a bushel for it. Wheat bags cost him about ls. each, and cartage averaged about 9d. a bag, . so that instead of receiving about 7s. a bag, he received that amount, less ls. 9d., and that sum leaves out of account his harvesting and other operating expenses.
– That is so, but the fact remains that, without making any allowance for agents’ charges, he received only about 5s. 3d. a bag. In addition, the wheat-grower has to bear all the expenses connected with the raising of his crop. With a return of 5s. 3d. a bag, the average man is in an impossible position.
– The honorable member realizes that the price which the farmer received last year was more than that which he received for the previous crop.
– The return from the previous crop admittedly was very low indeed. The industry has now reached the stage at which it can no longer carry on. Last year, when the price was so low, the farmer requested some form of stabilization. From all parts of Australia, the Government was given a clear indication that it was becoming impossible for the industry to carry on. The wheat industry is the very backbone of our economic existence. The Minister’s statement was characterized by pessimism and despair. Mr. Olive McPherson, chairman of the Wheat Board, was not nearly so pessimistic in a fortnightly statement that he issued to the press last week. Commenting on the present position, he said -
On the other hand, the weather in the northern hemisphere lias been severe and a great deal of damage has been suffered from frost. [Leave to continue given.] Mr. McPherson went on to say -
In America the winter wheat belt rainfall is reported to be from 3 to 8i inches below normal, and dust-storms are occurring in the south-west. In Canada, the subsoil moisture is said to be deficient, and this usually has an important bearing upon the yield of the crop.
A shortage in European countries is much more effective in increasing prices than a similar shortage in exporting countries.
En the concluding portion of his statement, Mr. McPherson said -
During the past fortnight nearly 500,000 bushels of wheat had been delivered to licensed receivers, bringing deliveries for the season to a total .of 195,118,000 bushels. Of this 95,069,000 bushels had been sold, and it was anticipated that local requirements until the end of the season would be 27,000,000 bushels. Normal sales for export flour should take about 17,250,000 bushels, which would leave 53,250,000 bushels of wheat to be sold.
The Canadian position is disclosed in the “following - press paragraph : -
At first sight the international news may appear to indicate possible market weakness, but when analysed, and the background carefully studied, most weak features disappear.
Canada had at the end of March wheat stocks amounting to 371,975.000 bushels, compared with 200,976,000 bushels at the end of March, 1939.
Against this, Europe’s crops seem unlikely to reach anything near the proportions of last year.
The official acreage in Roumania is 7,795,000, against 9,500,000 last year.
It will be Europe that will require extra wheat next year.
At present Canada is sitting in the enviable position of a price dictator.
Under these conditions the future for wheat seems sound.
Wheat-growers must not forget that the Empire is at war, and wheat is a very necessary commodity.
The pessimistic outlook of the Minister is entirely misleading. I shall not say that it is his intention to misrepresent the position in an attempt to vindicate the refusal of the Government to make a further advance. At no period in the history of responsible government in Australia has the time been more opportune for an immediate advance to be made to the wheat-growers. In this proposal is involved the stability of many country towns. Honorable members” who represent country constituencies know what an important part is played by the storekeeper in the wheat-growing areas. The return from the wheat crop furnishes the very lifeblood of the activities of towns in those areas. The country storekeepers are an institution. They have been carrying credits for the last couple of years, and now are finding the financial burden almost beyond their capacity to bear. They should not be expected to carry those credits any longer. The Government should regard it as a duty to stabilize the industry, and thus come to the relief of the community in those country centres, which, it must be admitted, are in a most serious financial position. I appeal to the Government to make a further advance quickly, no matter what the cost might be. It is recognized that the amount so far received by the Government does not represent the value of wheat already sold. I understand that in July next large payments will be received in respect of wheat sold to the Imperial Government. I trust that in anticipation of those payments being made the Government will advance the wheats growers a further ls. a bushel.
.- For the last ten years to my knowledge, and probably for a longer period, the wheat industry has been a pawn in the political game in this country, and it is time that something was done to take it out of that category. I have watched governments, both Federal and State, do what is commonly described as “ passing the buck”. That practice is followed also by certain associations connected with the wheat-growing industry, and meanwhile, the industry is falling continuously into a worse state. The description given this afternoon of the disabilities of those who are engaged in the industry is the correct one. Some of the wheat-growers will not be able to carry on much longer, and there ought to be a sincere approach to the problem by a conference of representatives of the States and the Commonwealth, with a view to placing the industry on a better footing. I was sorry to hear the remarks of the Minister for Commerce (Mr. Archie Cameron) concerning a further advance of ls. a bushel on the No. 2 wheat pool. I regret that the Government does not feel that it is in a position to make such an advance. I request the Minister to go carefully into the matter again, to see if the action suggested cannot be taken. Probably he is awaiting a further payment by Great Britain in July. Meanwhile, suffering will be caused, not only to the wheat-growers themselves but also to those who are waiting for them to pay their bills. They are definitely not in a position to pay their small accounts at the present time. I have heard a lot of argument in this chamber with respect to the wheat industry in Canada, the United States of America, Rumania, and Argentina. Certainly tho state of the industry in those countries, normally, has some effect on the industry in Australia. I point out, however, that the great disability under which we are suffering at the present time is not the quantity of wheat produced in those countries but the shipping space that is available for the transport of our wheat overseas. If the wheat-growers were told definitely what their principal disability is, I believe that they would regard in a more kindly light the advice which the Minister gave them last week. The crying need of the industry is a long-range plan. The Commonwealth Government, of course, is always blamed; and probably the Opposition in. the Parliaments of the States lays the blame on the governments of the States. Last year, at a conference of representatives of States and the Commonwealth. a long-range plan would have been evolved but for the opposition of the representatives of Vic- toria. I regret that that State did not shoulder some degree of responsibility for the position of the wheat-growers last year. I have no wish to follow the mistake of others, by making this more or less a political matter; that feature should be banished, and something should be done for those who are definitely serving the interests of Australia but are being sadly misled. I was pleased to hear the admission of the honorable member for Wimmera (Mr. Wilson) that restrictions might be necessary. Everybody with grain of common sense must realize that, as the Minister has said, neither the Commonwealth Government nor a State Government can be expected to make available a payable price for an unlimited production. If a payable price can be provided for a given quantity, only that quantity should be produced.
– The Government of Victoria does not approve of restrictions.
– The Premier of Victoria has definitely made that statement. I am glad that the representative in this House of the Government of Victoria has expressed approval of restrictions under certain conditions. That is a commonsense outlook which will, sooner or later, have to be accepted by the wheatgrowers. 1 know that many of the wiser wheat-growers, who think for themselves, realize that they will have to accept some form of restriction. I again ask the Minister to investigate the matter further, with a view to seeing whether a further advance may be made before the time which he has in mind for making it available. I recently attended a deputation to the Minister of which, incidently, the mover of the motion we are now discussing, was not a member. That deputation advocated the payment of an additional ls. a bushel on the No. 2 wheat pool. I urged that representatives of the States and the Commonwealth should meet in conference with a view to evolving a longrange plan. Some persons may say “ What, another conference ! “ I believe that the state of the industry is such that those who are responsible ought to make a definite attempt to stabilize it. Gathered together in conference they should devote their energies to the advancement of the industry and should disregard the political advantage that they might gain from their endeavours.
– I congratulate the honorable member for Wimmera (Mr. Wilson) upon having introduced this discussion. The honorable member for Wannon (Mr. Scholfield) referred to the wheat industry as the “ paw “ of politics. I do not know exactly what the honorable member meant, but the fact remains that wheatgrowing is still the most important industry of this country. As I have only a few minutes available to discuss this vital subject I shall put my case in a nutshell. I submit, first, that there is need for an increase of credit to the wheat-growers to be made avail-‘ able through the nation’s bank; and secondly, that there is an urgent need to explore all available avenues from which we may obtain shipping.
No one can doubt the need for an immediate advance to the farmers in respect of their last crop, for I say without any hesitation, that this industry is. definitely on the down grade. Men are leaving farms every day. If the nation’s credit were drawn upon, an advance of ls. a bushel could be made to the farmers without delay ; but the Minister for Commerce (Mr. Archie Cameron) has told us definitely, this afternoon, that it is not intended to make a further advance. He has also said that interest at the rate of 3 per cent, is being charged on £21,000,000, which is the present overdraft in connexion with the previous advance on this season’s harvest. That interest is to continue until the full amount of the advance has been repaid. That, to me, is a deplorable state of affairs. We understood when the advance was made that its purpose was to assist the farmers, but we did not realize that interest would have to be paid on the overdraft for so long as it continued. I was under the impression that the credit of the nation was being drawn upon in connexion with that advance in order to assist the farmers over their difficulties. I did not think for a moment that interest would he chargeable against the advance. But even though the country is at war and the farmers are in dire difficulties, interest must be paid. It is of no use for honorable members opposite’ to try to camouflage the position. This Government is definitely opposed to the use of the nation’s credit to assist the nation’s industries. Sooner or later we all shall be forced to realize, both in Australia and throughout the Empire, that a new financial system will be necessary. It will become impossible for us to meet the usual interest charges on the huge burden of debt that this war will entail.
I have no doubt at all that it would be possible to pay the fanners an extra ls. a bushel on their wheat if the Government would guarantee the overdraft, but the plain fact is that it will not do so. Apparently it prefers to watch this great industry crumble to the dust. Surely it is not unreasonable in such a time as this, when the country is in a war, the seriousness of which we cannot yet estimate, to ask that money should be made available to assist the farmers over their difficulties. It is being recognized throughout the world that new monetary policies must be employed. Al] industries need credit, and the Government should co-relate the unemployed resources of the nation to its unemployed people ; but, apparently, it will not break from its rigid financial policy of the past. I condemn it absolutely for not making money available for an immediate advance to the farmers.
In regard to shipping also, the Labour party finds itself in definite opposition to the Government. “We know that honorable gentlemen opposite hold the view that transport, like certain other essential services, should be left in the hands of private enterprise; but we, on this side of the chamber, hold a different view. We do not consider that private enterprise should be permitted, through shipping combines, to fix whatever freights it pleases, notwithstanding that the country is at war. We need a government line of ships to keep a check upon the freights charged by private shipping companies. As it is, it cannot be denied that overseas shipping freights are steadily advancing to the detriment of our industries. I realize, of course, that the Government cannot immediately acquire a satisfactory line of ships. We can see now the stark tragedy of the sale of the Australian Commonwealth Line of Steamers. A government of similar political complexion to the one now in office disposed of that line, to the enormous loss of the whole nation. Certain honorable members of the Country party have, from time to time, referred to the value of that shipping line in controlling overseas freight rates. I refer particularly to remarks made by. the former honorable member for Echuca, the late Mr. Hill, and the former leader of the Country party (Sir Earle Page). Yet they supported the sacrifice of the Commonwealth ships. Let me remind honorable members of the actual position in that regard. In
January, 1923, the Australian Commonwealth Line of Steamers reduced freight rates on general cargo to the United Kingdom by 1-24 per cent., on refrigerated cargo by id. per lb., on fruit by ls. a case, and on butter by 6d. a box. The freights from the United Kingdom to Australia were reduced by 10s. a ton. In July, 1926, freight rates from Australia on all general cargo were further reduced by 10 per cent. The charges on all classes of skins, wool and frozen cargo were reduced by $d. per lb., and on butter and fruit by 6d. a box. The shipping combines were subsequently forced to reduce their freights accordingly. The average yearly total of exports and imports to and from Australia and the United Kingdom at that time was more than 4,000,000 tons, and 10s. a ton on that volume represented a saving of £2,000,000 a year. This is a conservative estimate, as the freights were reduced by considerably more than 10s. a ton. I believe that the tonnage has increased considerably since that time. [Leave to continue given.]
The Government should at once explore all possible opportunities of obtaining shipping, because even if farmers turn their attention from wheat to other products, shipping will still be necessary. I agree with the suggestion that wherever possible the farmers should devote their activities to occupations more profitable- than wheat-growing. That is only common sense in view of the existing circumstances.
– That is the honorable gentleman’s first glimmer of sense.
– Common sense demands that if wheat cannot be grown at a profitable figure, the farmers should turn their attention to other avenues of production. It has been suggested that dairy products should receive more attention; but even if the farmers follow the advice given to them by the Minister for Commerce, their produce will have to be shipped overseas and shipping will still remain a problem. It will be of little use for the farmers to continue in production of any kind unless the Government can assure .them that their goods can be shipped to the world’s markets. Our producers are to-day carrying a heavier burden of debt than ever before in our history. I believe that the total indebtedness of the wool and wheat growers is about £320,000,000. In these circumstances their plight is hopeless unless the Government can give them some assurance of help. The wheat-growers will he in a particularly desperate position unless they can obtain another advance on their wheat pending its sale abroad.
– From where is the Government to get the money?
– I have already said that the national credit should be drawn upon; but the only reply that the Government can give me, apparently, is that any overdraft must be subject to an interest charge of 3 per cent.
This Government cannot survive if it adheres so tenaciously to its existing financial policy. It is absolutely imperative that some more progressive outlook shall be exhibited. The position of the wheatgrowers is apparently quite hopeless in the eyes of the Minister. Two things are necessary: first, the Government must adopt a more progressive shipping policy; and, secondly, it must realize that. under present world economic conditions the credit of the nation must be used in the interests of the nation. The Minister knows that the farmers have had a raw deal. His paTty has in fact deserted them.
.- The members of this House would have been able to do far more for the farmer by joining in a combined deputation to the Government to discuss the whole situation than they are likely to do by simply debating a motion for the adjournment of the House. For a fortnight a number of us have been doing all we can to induce the Prime Minister to grant a further advance to the wheat-growers on their last crop, and we have not met with anything like a definite refusal. Personally, I should have been satisfied with a further advance of 6d. a bushel for the present, in the hope that more would be available later, although I would be pleased if ls. a bushel could be provided. Two things are absolutely essential in the interests of the wheat industry at present. The first is an immediate further advance in connexion with the No. 2 wheat pool; and the second, the declaration of a definite policy in connexion with next season’s harvest. The Minister for Commerce (Mr. Archie Cameron) has been altogether too pessimistic. In view of remarks made by the chairman of the Australian Wheat Board, and by Mr. Teasdale, of Western Australia, I shall go so far as to say that the honorable gentleman has been deplorably pessimistic. There may be a debit of £21,000,000 in the No. 2 pool, but there is no doubt that the proceeds from the sales that have been made will, when the money comes to hand, considerably reduce that debit. The farmers have the promises of a previous administration to back them up in this matter. The Menzies Government promised the farmers that, if the wheat did not realize 3s. 4d. a bushel, the receipts from the flour tax, plus £2,000,000, would be provided for that purpose. Those promises justify us in asking that at least an additional 6d. a bushel should be made available to the wheat-growers at once. There would be very little risk. Indeed, when the harvest has been sold, I do not think that there will be any great loss, if there be any loss at all. In any case the industry is of such economic value to the nation that the Commonwealth could afford a loss.
It may not be of much use to talk about the importance of the wheat industry, but I impress upon the Government that almost every enterprise in Australia depends on wheat production. Our internal economy, as well as our overseas credit, depends on the wool and wheat industries. They are the safeguards of Australia. No industry creates such spending power as does agriculture. The wheat industry is of such importance that we cannot allow it to go to pieces. There is absolute need to do everything we can to keep the industry solvent. Not only must we enable it to carry on this year, but also we must plan now for the harvest, which is being planted now. There is a great Commonwealth department constantly dealing with the wheat industry which seems to have little belief in its economic value. Meeting after meeting of the Australian Agricultural Council is held at great expense, to discuss the same subject. Are the State Ministers on that council dumb? If not, where is their report? Requests for the stabilization of the industry are constant, but nothing has been done. I do not entirely blame the Commonwealth Government. We know perfectly well that a previous administration proposed to the States a scheme under which the price of wheat would be stabilized at 3s. 4d. a bushel, but that proposal evoked from the Premier of Victoria, Mr. Dunstan, the stupid declaration “No, we won’t come in; it is entirely the responsibility of the Commonwealth”. That is not so. The Constitution gives absolute control of agriculture to the States, which, however, try to throw the responsibility on the Commonwealth. I do not say all States, but Victoria certainly prevented stabilization of the wheat industry last year. It is no good mincing matters. Something must be done at once. The Agricultural Council merely twiddles its thumbs. Months have elapsed without one word from the Minister or one word from the Commerce Department regarding the future of the industry. Their attitude seems to be “ Throw all the responsibility on the States; let the farmer plant hi3 crop and wait, and take whatever the devil may send him”.
– Surely the farmer knows what he should do. He knows his business.
– The farmer wants something in the way of security. I do not want to argue with the honorable member.
– Do not bleed the country.
– The country is bleeding the farmers. Disgracefully improper things have been done in this Parliament that make impossible the carrying on of the agricultural industry in this country. I do not want to discuss that now, but we must have something definite to give the farmers stability and security. Whatever the proposition for stabilization be, let us have it for consideration; if it is turned down, we cannot help it. Whatever happens some effort to stabilize the wheat industry should be made at once.
I am satisfied that the reports that we have had are too pessimistic. I went to the Prime Minister (Mr. Menzies) only a few days ago and told him that I be lieved that the Government, with security, could advance a further 6d. a bushel to the farmers, who need the money to plant their crops and he assured me that he would place the request before Cabinet. The last few years have been so bad that the farmers need a little extra capital now in order to carry on their industry. Their need is not merely personal. It is reflected in the country towns. I go further and say that it is a national need that this money should be made available, because, as I have said, there is no greater creator of spending power than agriculture. It was the fall of export values that caused the depression with the huge consequential unemployment in 1930.
The Government has acquired the wheat. That was in the interests of the farmers themselves, because, when it was acquired, wheat was almost worthless; nobody wanted it. Nevertheless, having acquired the wheat, the Government has a duty to see that the farmers are paid a just price. If the Commonwealth took over a factory for the manufacture of munitions or took over any piece of property for any purpose it would do so on fair terms, but that principle does not seem to apply in this instance. The States are in the majority in the Loan Council and are, therefore, in a position, if stabilization of the wheat industry be agreed to, to insist that certain moneys which are now expended in directions which do not result in half the good that comes from agriculture, be used to give to the farmers a guaranteed price.
I hope that the Minister for Commerce will give more consideration than he has given to this matter. The position of New South Wales is not so bad, because it has an abundant harvest and a big home market, but Western Australia, with its small population, has to export its wheat. The conditions in the two States are entirely different. I do hope that the Government will immediately make a further advance on this year’s crop, and also, in co-operation with the States, take step? to stabilize the industry for the future. What the Premier of Victoria has done by trying to hand over the control of the wheat industry to the Commonwealth is a vital step towards unification.
– Which is a good idea.
– We hate the idea. The closer government is to the people the cleaner it is.
– The chief purpose of the honorable member for Wimmera (Mr. Wilson) in moving the adjournment of the House is to force the Government to make some statement as to its intentions regarding a further payment to the wheat-growers, but, on the speech made by the Minister for Commerce (Mr. Archie Cameron), he has failed. I sympathize with the objective of the honorable member for Wimmera, but it appears to me to be quite impracticable at this stage. When it is realized that the payment of an additional1s. a bushel, to which the Minister has been asked to commit the Commonwealth, would involve making arrangements with the banks for about £10,000,000 and that the No. 2 Wheat Pool is in debit to the amount of £21,000,000 it will be seen that the honorable member for Wimmera and honorable members who have supported him, have insufficient regard for the financial difficulties in which the Government finds itself. I agree with the suggestion of the honorable member for Swan (Mr. Gregory) that an additional advance of 6d. a bushel should be made. That would be acceptable to the great majority of the wheat-growers, and it would involve the Government in the expenditure of about £5,000,000, which, I think, could be arranged for with the Commonwealth Bank, having regard to the sound position of the No. 2 Pool at this juncture. It is true that there is a heavy deficit, but the sales of last season’s wheat have been exceptionally good, and, on the statement made by the Minister in this House last week, at the end of this year there will be, in the worst circumstances, only 60,000,000 bushels unsold. The Minister held out a hope that a portion or the lot of that carry-over would be disposed of later. That being so, there is no need for the Government to worry about the financial stability of the No. 2 Pool. I take it that all wheat sold up to the present represents good business. We know that the wheat sold to Great Britain represents good business and, in due course the remittances from Great Britain will be in Australia.
Accordingly, the Government should not be afraid to make an additional payment of, say, 6d. a bushel in the near future. The Government should not be stampeded by the £21,000,000 debit in the No. 2 Pool. The Minister in his statement last week was rather oppressed by the position and he did not pay regard to his own subsequent analysis of the good prospects of liquidating most of the liability of the No. 2 Pool. For those reasons the Government should make a virtue of necessity, because it will have to make a further advance later. I do not wish to repeat the remarks of the honorable member for Gwydir (Mr. Scully) which I endorse, but I do know the position of the wheat-growers. Four months has elapsed since the last payment, and they are now entitled to something more, having regard to the position of the No. 2 Pool and the definite prospects of disposing, at a satisfactory price, of the balance of last season’s harvest during this year. It is quite easy for the Government, if it desires to do so, to make arrangements for the financial accommodation. The 6d. a bushel would not be the final payment, but the growers would be satisfied if they were assured that the Government intends to make a further additional payment later when the revenue of the No. 2 Pool is healthier. I lay stress on the necessity for the Minister to place before the Government the views that have been expressed by honorable members to-day. If we cannot get 1s. a bushel more, which would represent £10,000,000, the least that should be given is 6d. a bushel at once, with the promise of another 6d. a bushel before the end of the year.
– Will the farmers take 3d. a bushel? - Mr. THOMPSON.- No, they will not take 3d. This matter is too serious for joking. As the honorable member for Gwydir has shown, the farmers have exhausted their last advance, and are looking for a little extra to get them out of their difficulties with storekeepers and other creditors.
Regarding next year’s harvest, I can only endorse the views expressed by other honorable members, and say that a plan of some kind should be formulated immediately. I sympathize with the Minister for Commerce regarding the statement made by him last week. I realize that he is rather panic-stricken at the gigantic nature of the problem which the wheat industry now presents, in view of the difficulty of securing shipping for the removal of this year’s harvest. He faces the possibility of a carry over of at least 60,000,009 bushels, and the vagaries of the world markets are such that there may be a heavy recession in the next six months; but I suggest that the Minister is taking too pessimistic a view of the world wheat situation. Provided we can get the necessary shipping, there is no need to fear that we shall be unable to sell, at a satisfactory price, as much wheat as
Ave can produce during the present war. Economic nationalism in Europe has been crushed since the outbreak of hostilities.’ Many nations which were selfsufficient in wheat production six months ago are rapidly going out of production, owing to their military activities. That process must continue, and, probably in. another six or twelve months, Europe will be starved for wheat, despite the heavy carry-over from North America. With these factors to consider, the Government should take much bigger risks than it is apparently prepared to do. Apart from the small advance now asked for, it should gamble on a sound world wheat marketing position for the next year or two. It is possible to make a plan for the coming season, and, perhaps, for the following season. The Minister said that he would take this matter up very soon, and I hope that he will. I impress upon him that, ere long, the problem will become a very exacting and urgent one, and he should lose no time. He should get his experts busy in an effort to formulate a plan which couldbe submitted to the Parliament before the present session ends. [Leave to continue given.-] No case has been made out for a reduction of wheat acreage in Australia at the present time. The world wheat position justifies us in allowing the growers to produce at least as much -wheat as they grew last year. If the Minister wished to give useful advice to the growers, he could say to them “ We have no means satisfactorily of controlling your operations, but we ask you not to increase the acreage which you had under cultivation last year “. If he said that, an overwhelming majority of the growers would follow that lead.
.- Mr. Speaker-
– I rise to a point of order. The honorable member for Grey is to-day sitting on the ministerial side of the chamber, although usually he sit3 on this side. Is he entitled to move from his seat in order to get the call?
– I noticed that the honorable member had changed his seat. I asked him at an earlier stage whether his present seat would be used by him for the future, and ho said that it would.
– At no time have I listened to a more pessimistic statement regarding the wheat industry than that made by the Minister for1 Commerce (Mr. Archie Cameron) last week. The farmers have experienced gloomy times, and many pessimistic utterances have been heard, but none could have had a more depressing effect upon them at a time, when they are trying to give all possible assistance to the Government. The Minister began by saying that he wished to issue a warning. In my opinion, he might at least have reserved that remark until a later stage of his speech. No good can be served by repeating what has already been said about the troubles of the wheat-growers. But an opportunity now presents itself to the Government to do something for the industry without losing anything by doing so. The Minister said that the overdraft of the No. 2 pool amounted to £21,000,000, and that £23,500,000 had been paid out to the industry. When he said that 48,000,000 bushels had been sold on a pool basis at 3s. 2¾d. a bushel, I could not understand why there had not been a greater reduction of the overdraft than £2,500,000. One must admit that the Government has done a great deal for the industry, having advanced 2s. 10½d. a bushel on a total of 196,000,000 bushels. This makes the Government liable for an advance of £28,000,000; in addition, the handling charges must involve another £2,500,000, making a total of almost £31,000,000. Whether all of the farmers have received the promised advance of 2s. 10£d. a bushel is not stated; but, if so, the Government has made itself liable for £28,000,000, plus the expenses incurred. Therefore, it appears to me to be rather strange that only £21,000,000 remains as a debt against the pool. The Minister stated that the sales of the 104,000,000 bushels have been at the equivalent of 3s.2¾., pool basis, less rail freight from country to port. Again, I cannot understand figures of that nature, because if we peruse the price list which has been fixed by the Australian Wheat Board for millers’ and retailers’ requirements, we find that bagged wheat at Port Adelaide on trucks on the 1st January of this year was quoted at 4s. 0½d. a bushel. The same price prevailed on the 15th January, and continued up to March, the retailers’ price being 4s. 2d. a bushel. I take it that similar prices ruled in the other States. On the 15th April, the price of millers’ requirements rose to 4s. 3d. a bushel on trucks, and the price to retailers was 4s. 4½d. a bushel. On a bulk basis, the average price over the four months from January to April was in the neighbourhood of 3s. l1d. a bushel, not 3s.2¾d. a bushel. When we peruse the figures given to us by the chairman of the Australian Wheat Board, Mr. Clive McPherson, we find that half of the wheat sold to the United Kingdom was disposed of on the basis of 4s.1½d. a bushel for bagged wheat, and 3s. 10½d. a bushel for bulk wheat. There, again, we notice a disparity of price, as compared with the figures given by the Minister. If only 3s. 2¾d. a bushel has been received for the 104,000,000 bushels which has been sold, little more can be expected by the farmers than they have already received. It must be clear that the Government cannot guarantee a return for all wheat which farmers might care to produce.
– That was said last year.
– Perhaps that was because the yield was an extraordinary one.
It was stated by the honorable member for Wimmera (Mr. Wilson), who was backed up by the honorable member for Wakefield (Mr. McHugh), that the acreage under production should be reduced. During the last ten years, according to the Commonwealth Year-
Booh, the Australian wheat-growers have reduced their areas by approximately 3,000,000 acres a year. For the five years up to 1935 the area under wheat cultivation was about 15,500,000 acres, and since then the area, on the average, has been reduced to 12,75.0,000 acres. A further reduction is, I believe, necessary, but a stabilized price must be guaranteed to the growers. Since the Government expects to receive approximately 3s. 9d. a bushel, we should get about £18,000,000 for the 105,000,000 bushels which has been sold, leaving a debit of £13,000,000 for the pool to carry. If, as is expected, the total sales for the year will be about 135,000,000 bushels, leaving no more than 53,000,000 bushels to be carried over, surely the Government could make an advance of at least another 6d. a bushel at the present juncture, because, if only 53,000,000 bushels were left over, the amount to be carried by the pool would be only £6,000,000 or £7,000,000. When the Government asks for, and, perhaps, demands, a restriction of production, the farmers expect a guaranteed price. Seeing that they are now in dire necessity, I hope that the Government will not turn a deaf ear to their request. I am glad that the Government made a first advance of 2s. 10½d. a bushel, which was equivalent to 2s. 6d. a bushel at sidings. That was equal to the advance made in 1915, when the price of wheat was 4s. 6d. a bushel. To-day, the farmers have a greater burden to carry, because their costs of production are much higher, and have been rising during the war. Their request for a further advance of at least 6d. a bushel as soon as possible is most urgent.
– The honorable member has exhausted his time.
Mr. POLLARD (Ballarat) £5.45].- Wheat-growing, which is one of Australia’s essential industries, has never had the consideration from the National Parliament which it justly deserves. Unfortunately, owing to causes over which the Commonwealth has little control, wheat prices in practically every year since 1929 have been unpayable. In 1931 a Labour Government, which was in office but not in power, submitted to the Commonwealth Parliament a comprehensive and well balanced scheme to deal with the wheat problem, but the scheme was wrecked by an anti-Labour Senate. From that time until the present the appeal of the wheat-growers has gone unheeded by every Commonwealth Government. Every government, Commonwealth and State, “ passes the buck “ to other governments.
– The Victorian Government does that.
– Later I shall show the honorable member that that is not so. In a national emergency, if at no other time, it is the duty of the Commonwealth Parliament to deal with the wheat industry in a statesmanlike way. To-day men in every walk of life are producing goods and rendering services, and, with the exception of the unemployed and the unemployable, are receiving something approaching adequate remuneration for their service to the community; hut those engaged in the production of wheat do not receive any consideration. As I understand democracy, our parliamentary institutions exist to remove injustices and to protect the weak against the strong. If men are rendering a service by producing essential goods with the consent of the National Parliament, that Parliament is neglecting its duty if it. does not ensure that -they are remunerated adequately for the service which they render. The wheat industry is badly organized and needs assistance. The honorable member for New England (Mr. Thompson), and the honorable member for Grey (Mr. Badman) suggested that the present situation could be overcome by making an advance of 6d. a bushel. In effect, they said that they do not approve of inflation, or too large an advance from the Commonwealth Bank, such as a further advance of ls. a bushel would involve, but they are prepared to go halfway and agree to a policy of inflation to an amount of £5,000,000. The vast stocks of wheat in Australia have a definite value, and if payment of £10,000,000 or £15,000,000 is to be made on wheat which has actually been produced, it matters little whether the wheat is in Australia or overseas. If it has been sold overseas credits will be available; but if it is unsold the currency will be increased by an additional £10,000,000 or £15,000,000. That means an extension of the policy adopted by the Lyons Government or the Menzies Government to assist the wheat-grower. Under such a policy the price of various commodities may possibly be increased. The policy of the Lyons Government or the Menzies Government - I forget which - was to obtain revenue from the poorer sections of the community in order to assist another section similarly circumstanced. Under the supply and development legislation, those engaged in the production of commodities essential for war purposes have been guaranteed a minimum profit of 5 per cent. If it is desirable to provide such a profit for those engaged in the production of armaments, surely it is also right to assist those engaged in the production of foodstuffs.
– The costs of production of various producers would vary.
– I realize that; but the same argument applies to those producing armaments;
– I anr nol arguing that point. The honorable member must be logical.
– I now wish to refer to the allocation of money between the States. It appears that the Minister for Commerce is interested more particularly in the Communist party, ministerial office, and the Communist vote. He also sees clearly an iniquitous government in Victoria, and unfortunately he and the Prime Minister (Mr. Menzies) hold similar views concerning the Dunstan Government. They appear to have gone to a great deal of trouble to victimize Victoria in the allocation of the money to be available from the wheat industry assistance fund. When I asked the Minister if he would supply to me a copy of the summary of the requests made by States for money from that fund, he refused to do so. Subsequently he read from a document which appears to be one long contradiction. One paragraph read -
At the conference of Commonwealth and State Ministers, held in Canberra, the Commonwealth and State Governments said sympathetic consideration would be applied te Victoria because of drought conditions. A sum of £500.000 was set aside for drought relief, and Victoria got £200.000, which is twice as much as any other State.
The Minister did not say that Victoria suffered much more severely from drought than other States, and because of that the grant it received was not sympathetic consideration but common justice. The Minister for External Affairs (Mr. McEwen) insinuated by interjection that the wheat industry has not been placed on a sound footing because of the opposition of the Victorian Government, which is the bugbear of the Menzies Government. Apparently it is the desire of at least two Ministers to penalize Victoria. The Minister for Commerce also said, “-The Victorian Government has never submitted a proposal for the treatment of the problem of marginal areas”.
– The honorable member has exhausted his time.
Debate interrupted under Standing Order No. 257b.
Motion (by Mr. Spender) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend the Estate Duty Assessment Act 1914-1928.
Bill brought up, and read, a first time.
– by leave - I move-
That the bill be now read a second time.
In pursuance of the Government’s decision to spread the burden of war finance as evenly as possible over the various fields of taxation as well as within those fields, it has been necessary to provide for additional revenue from estate duty. The Government’s proposals are estimated to produce approximately an additional £850,000 of duty in a full assessment year; hut it is anticipated that these duties will not produce more than £500,000 during the financial year 1940-41, due to an unavoidable lag in the issue of assessments. Honorable members will appreciate that executors of the estates of deceased persons must be given reasonable time within which to prepare and lodge returns of the estates under their control, and the law, in fact, gives them three months in which to do that. It is frequently found necessary by the Commissioner of Taxation to obtain further information from executors before he can prepare his assessment. In addition, of course, the values placed upon the assets of the estate by the executors have to be carefully scrutinized. It will be apparent, therefore, that the estate duty payable upon the estates of all persons dying during the financial year 1940-41 will not be assessed and due for payment by the 30th June, 1941. It is estimated that about one-third of such duty will not be collected until after the end of that financial year. This estimate of £500,000 has been arrived at after taking into account the fact that the proposed amendments will apply to the estates of persons who die during the remainder of the present financial year, the duty in respect of which will probably be paid during the financial year 1940-41.
The Government has decided to obtain its additional revenue by revising the rates of duty and extending the range. The new range will bring about also a smoother graduation of the rate in place of the former somewhat disjointed graduation. The revision of the rates of duty finds no place in this bill. The new rates will form the subject of a separate measure, which will be introduced subsequently and will then be explained to honorable members.
The opportunity has been taken of making more scientific the concession granted in respect of estates passing to the widow, children or grandchildren of the deceased and that is the most important purpose of this bill. In the present act the concession was given by reducing the duty which would otherwise have been payable by one-third thereof, and there was no differentiation in this regard between an estate of, say, £5,000, and one of £500,000. In this bill the concession is conferred by granting to such estates a higher exemption than is granted to estates not passing to the deceased’s widow, children or grandchildren. The general exemption proposed is £1,000, diminishing ona sliding scaleuntil it disappears at £10,000. In respect of estates passing to the widow, children or grandchildren, however, the exemption is £2,000, diminishing on a sliding scale until it disappears at £12,400. Provision has also been made for the estate passing partly to the widow, children or grandchildren and partly to others, so that the exemption in that case shall be at a figure which is relative to the circumstances of the case.
Honorable members will realize that the effect of these provisions is to give a substantial concession in duty in all those cases in the lower ranges where the estate or part of it passes to the widow, children or grandchildren of the deceased. This aspect will be fully explained when I ‘bring down the new rates bill. The concession will be now confined to that class of case in which it is really justified. No advantage will accrue in any case in which the value for duty of the estate is in excess of £12,400. This, I suggest, is much more equitable than is the exemption of £1,000 under the present act, which, however, disappears at £1,001. For instance, if the value for duty of the estate is £1,000, no duty is payable, but if it is £1,001, duty is payable not upon £1 only but upon the whole value of £1,001. The benefit to the estate passing to the widow, children or grandchildren is also much more equitable in that it differentiates between the small estate, in respect of which a benefit is justified, and the large estate, in respect of which the widow, children or grandchildren will be in ‘ comparatively comfortable circumstances without any special concession from the Government.
In the present act is a provision which exempted the estates of members of His Majesty’s forces who died on active service during the previous war or within >one year of its termination. It is proposed to delete this section, and to insert in its stead a provision exempting estates of members of His Majesty’s forces or the forces of an ally of Great Britain who die on active service in the present war or within one year after its termination, when the value for duty of the estate does not exceed £5,000.
The provision in the existing act giving executors power to apportion the duty between the beneficiaries is also being amended, consequent upon the altered method of assessment of estates passing partly to the widow, children or grandchildren of the deceased. The amendment is one not affecting the assessment of such estates; in any way, but is neces- sarily consequent upon the other amendments. The act will come into force on the day on which it receives the Royal Assent. I commend the bill to honorable members.
Debate (on motion by Mr. Curtin) adjourned.
Motion (by Mr. Spender) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend the Income Tax Assessment Act 1930-1939.
Bill brought up, and read a first time.
– by leave - I move - -
That the bill be now read a second time.
The most important provisions in this bill relate to the proposed further tax on the undistributed income of public companies and give effect to the intention of the Government to secure a greater contribution of income tax from companies. The further tax will not apply to private companies, as they are already subject to additional tax where a sufficient distribution has not been made. Taxable income arrived at for purposes of the assessment of ordinary income tax will be taken as a commencing point. Commonwealth income tax, wartime company tax, and exAustralian taxes assessed in respect of income of the -company which is taxable under the Income Tax Assessment Act will be deducted from the taxable income of the year in which they are paid. A deduction will also be allowed of any net loss, other than a loss of a capital nature, incurred in the year of income in carrying on the business of the company out of Australia. That deduction shall not be made, however, in the case of a company the taxable income of which is assessed under divisions 12, 13, 14 or 15 of Part III. of the Income Tax Assessment Act. Those divisions relate to various classes of companies controlled abroad,, in respect of which the taxable income is arrived at on an arbitrary basis.
The amount of taxable income remaining is regarded as the distributable income, and an exemption will be allowed! of 25 per cent. of that amount. This exemption has been provided to meet theordinary expansionof company businesses and to allow for expenditure which is not allowable under the Income Tax Assessment Act. The percentage is considered a reasonable one in meeting the legitimate requirements of companies for the retention of profits, and at the same time ensuring that companies pay some portion of the additional war burden of income taxation where an undue proportion of the profits is retained. Such profits would otherwise be subject only to the flat rate of income tax. A deduction will also be allowed of dividends paid out of the taxable income within six months after the close of the year of income. Six months is considered the shortest reasonable period which may be adopted in order to permit of the issue of assessments within the relevant financial year. The further tax will be levied on the balance of taxable income remaining after allowance of the deductions before-mentioned, and it is proposed to impose the tax at a flat rate of1s. in the £1. In principle, therefore, the further tax on the undistributed income of public companies will conform with the additional tax imposed on private companies, with the important difference, however, that the tax on public companies will be at a flat rate, whereas the additional tax on private companies is calculated at the shareholders’ individual rates.
The tax on the undistributed income of public companies will be payable 30 days after the issue of notice of assessment, and not 60 days as is the case with ordinary income tax. The purpose of limiting theperiod to 30 days is to permit of the collection of the tax within the financial year. As a period of six months after the close of the year of income must elapse before the extent of distribution of dividends can be ascertained, the tax cannot be assessed until the latter part of the financial year. A rebate will not be allowed to shareholders in their individual assessments in the event of the subsequent distribution of the income subject to the further tax. The Government is budgeting for a certain amount of additional income tax from the further tax on the undistributed income of public companies, and revenue requirements would need to be revised if the Government were faced with a latent liability for rebates in the event of the income subject to the further tax being later distributed. The rebates allowable to shareholders on dividend income under the present act, will, however, be continued.
In the private company provisions of the Income Tax Assessment Act the following alterations are proposed in the bill:-
the exemption where at present allowed is reduced from 331/3 per cent. to 25 per cent. of the distributable income;
These alterations are being made in order to bring provisions relating to the undistributed income of private companies into line with comparable provisions relating to the undistributed income of public companies.
The bill deals with various other matters. Clause 3 provides for the exemption of the pay and allowances received by naval, military and air-force personnel enlisted for service outside Australia. The exemption does not extend to other income earned by them. The existing provisions relating to gifts to be allowedas a deduction in arriving at taxable income are extended by the bill to include gifts made to a public institution or fund established for the comfort of members of the naval, military or air forces of the Commonwealth, or to theCommonwealth for defence purposes.
The bill provides for the diminution of the statutory exemption by £1 for every £1 by which the income exceeds £250 instead of by £1 for every £2 as at present. The exemption will nowvanish at £500 instead of at £750 as at’ present. Where the income does not exceed £250 the existing statutory exemption of £250 will still apply.
The bill includes a drafting amendment designed to correct certain defects found to exist in section 123a, which was enacted last year, relating to companies prospecting or mining for petroleum in Australia or in the territory of New Guinea.
Provision is also made in the bill for the exemption from income tax of the dividends paid to shareholders by any such petroleum company until the capital expended by the company in searching and mining for petroleum has been recovered from income derived by the company. This exemption is the logical extension of the exemption granted in respect of the profits of the companies prospecting or mining for petroleum.
The amendments proposed by this bill will commence to apply in assessments for the next financial year, which will be based on the income of the year ended the 30th June, 1940. The introduction of the legislation at this early date will enable taxpayers to become fully aware of the provisions and to make their financial arrangements accordingly. This applies particularly to the proposals respecting the further tax on the undistributed income of public companies and the altered provisions relating to private companies.
Debate (on motion by Mr. CURTIS’ adjourned.
Motion (by Mr. Spender) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend the Land Tax Assessment Act 1010-1937.
Bill brought up, and read a first time.
– by leave - I move - That tlie bill be now read a second time.
The purpose of the bill now before honorable members is twofold - first, to provide for the partial withdrawal of the exemption from land tax now enjoyed by mutual and partly mutual life assurance societies and friendly societies ; and, secondly, to remove two anomalies which at present exist in the act in the case of societies, clubs or associations not carried on for pecuniary profit and in connexion with the taxation of perpetual leases without re-valuation.
At the present time a mutual life assurance society is completely exempli from land tax on its land, except land of which it is mortgagee in possession or which it has acquired under or by virtue of a mortgage, whilst a partly mutual society, that is, a society with shareholders as well as policy-holders, receives a partial exemption based on the proportion which its Australian policies bears to its total policies. A friendly society enjoys complete exemption, quite irrespective of the manner in which it acquired its land. In recent years these societies have, in the course of their operations, acquired valuable sites in the heart of the capital cities and have erected modern buildings thereon, the whole or major portion of which i3 let to tenants in competition with other landowners in the vicinity. Obviously the freedom from land tax which the societies enjoy places them in a very favorable position as compared with their competitors who are liable to the tax and, as the Government proposes to double the existing rates of tax, honorable members will appreciate that the detriment under which the taxpaying landlord at present suffers will, from next year, become more pronounced than ever.
Friendly societies and mutual life assurance societies have been free from land tax ever since the introduction of the tax In 1910. The societies have, therefore, enjoyed complete or comparatively complete immunity from land tax for the past 30 years. The Government considers, however, that, in fairness to other land-owners, the stage has now been reached when the existing position should be reviewed. Particularly is this so at the present time when taxpayers generally are being called upon to bear additional burdens in all forms of taxation to meet war expenditure. The Government has accordingly decided that these societies should receive total exemption only in respect of lands solely occupied by them for their own purposes, and partial exemption in the case of land upon which is erected a building which is partly occupied by a society, and partly let to tenants. In the latter instance, the exempt and taxable portions of the land will be ascertained by reference to the rental values of the part of the building occupied by the society, and that part let to tenants. As regards the partly mutual society, the present principle of limiting the exemption to the proportion which its Australian policies bears to its total policies is being maintained. These societies, therefore, will continue to receive the same proportion of the reduced exemption as they now receive in respect of the full exemption.
The first anomaly with which the bill deals is that which now exists in cases where a society, club, or association, not carried on for pecuniary profit, lets a portion of its building. The existing law provides that all land owned by any such body is exempt if the land is used or occupied solely as a site for a building owned and occupied by the society, club, or association. Originally the Commissioner of Land Tax allowed complete exemption to these bodies on the ground that the land was used or occupied solely as a site for the building owned and occupied by the particular body. Some years ago,, however, the Supreme Court of New South Wales decided that the exemption provided by the law did not apply, unless the particular body was the sole occupant of the building. Thus, oven if only one room in the building is let, the society, club or association becomes liable to tax in respect of the whole of the land on which the building is erected.
This interpretation of the law was wholly unintended, and the hill removes the anomaly by providing for the exemption of the land which the particular body uses or occupies for its own purposes. This is in harmony with the principle which is to be applied in respect of life assurance and friendly societies.
The bill also removes the anomaly which now exists in respect of perpetual leases by providing that the unexpired period of such a lease shall be deemed to be 100 years. Prior to 1929, it was the practice of the Taxation Department to calculate the lessee’s estate in such a lease on the basis of such an unexpired period. During that year, however, the point was raised and upheld in an appeal before the High Court that, unless there was a specific period for a lease, the liability to tax in respect of that lease did not arise. As a perpetual lease has no fixed term this decision accordingly applied to remove these leases from the taxable field.
This amendment does not impose any new liability. It merely restores to the taxable field a tenure of land which was subject to tax from the inception of the act in 1910, until the High Court’s decision in 1929, by enabling the commissioner to calculate the lessee’s estate in accordance with the formula provided by the act. It removes the anomaly which now exists under the law whereby lands under lease from the Crown and having a fixed term are taxed while other similar lands, held under exactly similar conditions, except that the lease is in perpetuity, are not liable to tax. The amendments giving effect to the Government’s decision on these matters are contained in clauses 4, 6 and 7 of the bill
I may add, for the information of honorable members, that these amendments are in accordance with the views and recommendation of the Royal Commission on Taxation, presided over by Sir David Ferguson, in 1932-34.
The amendment to section 11 of the act made by clause 3 of the bill is to define more specifically what constitutes a “ parcel “ of land for valuation purposes. Without this amendment it would be possible, following the valuation of parts of a building for the purposes of the amended sections 13 and 41 of the act, for every room in a building which is separately let or tenanted, to be treated as a separate “ parcel “. This in turn would necessitate an innumerable number of hypothetical valuations of rooms and offices, creating almost insurmountable difficulties and anomalies which are not now met with in the practical work of valuation.
The amendment to section 27 of the act, made by clause 5 of the bill, is simply consequential upon the amendment made by clause 7 of the bill. As a life assurance society will in future be taxable in respect of land leased by it, the reference in section 27(3) to the exemption of life assurance societies in section 41 becomes meaningless, and is therefore being eliminated.
The bill also provides for the retirement of the Commissioner of Land Tax and the Assistant Commissioner at the age of 65 years. This amendment brings these officers into line with similar statutory positions such as the Auditor-General and the Public Service Arbitrator.
Debate (on motion by Mr. Curtin) adjourned..
Sitting suspended from 6.20 to 8 p.m.
In Committee of Ways and Means: Mr. SPENDER (Warringah- Treasurer) [8.0]. - I move -
That a tax be imposed upon incomes at. the following rates: -
Division A. - Rale of Tax in Respect of Taxable Income Derived from Personal Exertion.
If the taxable income does not exceed Five hundred pounds, the rate of tax for every pound of taxable income shall be five pence.
If the taxable income exceeds Five hundred pounds but does not exceed One thousand pounds, the rate of tax for every pound of taxable income shall be five pence and onefiftieth of a penny increasing uniformly by one-fiftieth of a penny for every pound by which the taxable income exceeds Five hundred and one pounds.
If the taxable income exceeds One thousand pounds but does not exceed Four thousand and two hundred pounds, the rate of tax for every pound of taxable income shall be fifteen pence and one-hundredth of a penny increasing uniformly by onehundredth of a penny for every pound by which the taxable income exceeds One thousand and one pounds. and
If the taxable income exceeds Four thousand and two hundred pounds, the rate of tax for every pound of taxable income up to and including Four thousand and two hundred pounds shall be forty-seven pence, and the rate of tax for every pound of taxable income in excess of Four thousand and two hundred pounds shall be ninety pence.
Division B. - Rate of Tax in Respect of Taxable Income Derived from Property.
If the taxable income does not exceed Five hundred pounds, the rate of tax for every pound of taxable income shall be six pence.
If the taxable income exceeds Five hundred pounds but does not exceed One thousand pounds, the rate of tax for every pound of taxable income shall be six pence and. three one-hundredths of a penny increasing uniformly by three one-hundredths of a penny for every pound by which the taxable “income exceeds Five hundred and one pounds.
If the taxable income exceeds One thousand pounds but does not exceed Four thousand and two hundred pounds, the rate of tax for every pound of taxable income shall be twenty-one pence and one-eightieth of a penny increasing uniformly by oneeightieth of a penny for every pound by which the taxable income exceeds One thousand and one pounds. and
If the taxable income exceeds Four thousand and two hundred pounds, the rate of tax for every pound of taxable income up to and including Four thousand and two hundred pounds shall be sixty-one pence, and the rate of tax for every pound of taxable income in excess of Four thousand and two hundred pounds shall be one hundred and eight pence.
Division C. -Rates of Tax in Respect of Taxable Income Derived Partly from Personal Exertion and Partly from Property.
For every pound of taxable income derived from personal exertion, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division A if the total taxable income of the taxpayer were derived exclusively from personal exertion, by the amount of the total taxable income.
For every pound of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division B if the total taxable income of the taxpayer were derived exclusively from property, by the amount of. the total taxable income.
Division D. - Rates of Tax by reference to an Average Income.
For every pound of the taxable income derived from personal exertion by a taxpayer to whose income Division 16 of PartIII of the Income Tax Assessment Act 1936-1940 is applied, the rate of tax shall be ascertained bydividing the tax that wouldbe payable under Division A upon a. taxable income from personal exertion equal to his average income, by that average income.
For every pound of taxable income derived by him from property the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his average income, by that average income.
Division E. - Rate of Tax by reference to o Notional Income.
For every pound of the actual taxable income from personal exertion of a taxpayer deriving a notional income as specified by subsection ( 1 . ) of section eighty-six of the Income Tax Assessment Act 1930-1940, the rate of tax shall be the amount obtained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his notional income, by that notional income.
For every pound of the actual taxable income from property of a taxpayer deriving a notional income, as specified by sub-section (l.) of section eighty-six of the Income Tax
Assessment Act 1936-1940, the rate of tax shall be the amount obtained by dividing the tax that would be payable under Division B upon a taxable income from property equal tohis notional income, by that notional income. Division F. - Tax payable where amount would otherwise be less than Ten shillings.
Notwithstanding anything contained in the last five preceding Divisions, where the amount of income tax which a person would, apart from this Division, be liable to pay is less than Ten shillings, the income tax payable by that person shall be Ten shillings.
DivisionG. - Rates of Tax Payable by a Trustee.
For every pound of the taxable income in respect of which a trustee is liable, pursuant to either section ninety-eight or section ninetynine of the Income Tax Assessment Act 1936- 1940, to be assessed and to pay tax the rateof tax shall be the rate which would be payable under Division A, B, C, D or E as the case requires, if one individual were liable to bo assessed and to pay tax on that taxable income.
DivisionH. - Rates of Tax Payable by a Company. la) Subject to the last preceding Division, for every pound of the taxable income of a company the rate of tax shall be twenty-four pence.
Subject to the last preceding Division, for every pound of that portion of the taxable income of a company which has not been distributed as dividends on which the company is liable, pursuant to Part IIIa. of the Income Tax Assessment Act 1936-1940, to pay further tax. the rate of tax shall be twelve pence.
For every pound of interest in respect of which a company is liable, pursuant to subsection (1.) of section one hundred and twentyfive ofthe Income Tax Assessment Act 1936- 1940 to pay income tax, the rate of tax shall be twenty-four pence.
That tax in accordance with the foregoing provisions of this resolution shall be levied and paid for the financial year beginning on the first clay of July, One thousand nine hundred and forty.
That the foregoing provisions of this resolution shall also apply to all assessments for financial years subsequent to that beginning on the first day of July, One thousand nine hundred and forty made prior to the commencement of the Act for the levying and payment of income tax for the financial year beginning on the first day of July, One thousand nine hundred and forty-one.
In introducing this resolution for the imposition of rates of income tax, I first draw attention to a small change in the scheduleof rates now before the committee, from that which was circulated earlier. The change makes some reduction of the rates on small property incomes. The change is quite immaterial from the point of view of revenue, but it involves a principle which had, for the moment, become obscured in the final revision of the proposed schedule, necessitated by the latest information as to our revenue requirements.
I have to propose to the committee a very considerable increase of income taxation in order to meet our war-time necessities. I confess that I feel less reluctance in proposing an increase of taxation in the form of individual income tax, than in any other of the many forms in which money is taken for public purposes from the pockets of the community. I hope that feeling will be shared by honorable members, in spite of the fact that this particular form of taxation probably touches most of us, as individuals, more nearly than any other.
When additional taxation cannot be avoided, the income tax has the great virtue of equity. It can be imposed in accordance with our considered judgment as to ability to pay. We can make what allowance we consider necessary for family obligations and any other special calls on the individual. We do, in fact, recognize a number of such special calls such as medical and nursing expenses, and life insurance and friendly society dues. We have in fact the means of making the tax conform to any agreed standard of equity. Moreover, the income tax has the merit of directness.
The present proposals involve a considerable expansion of the scope of the tax, so I shall ask for the patience -of honorable members for a few minutes, while I briefly review the Commonwealth experience with income tax.
The first federal income tax was levied in 1915-16 as a war-time measure to supplement the indirect taxation on which the Commonwealth had hitherto almost exclusively relied. It was designed to produce a moderate amount of revenue, and collections from individuals in 1915-16 amounted to less than £3,000,000. It taxed high incomes with some severity, felllightly on middle incomes, and hardly touched incomes at the wage-earning level of that time. The scale of taxation rates, which was designed ‘by Sir George Knibbs, was a great improvement on income taxation technique in any part of the world. It has been criticized, not unreasonably, on minor points. For example, the scale was made to look needlessly complicated, because of tie terms in which it was expressed.
For some considerable time, the Commonwealth led the world in methods of income taxation, and other countries followed. In particular, most of the Australian States followed the Commonwealth lead, improved further on the principle, and adapted it to their own needs.
In the stress of the last war, heavy percentage additions were made by the Commonwealth without any broadening of the effective field, and that somewhat impaired its equity. After the war this strain was taken off. But from time to time in financial emergency, different percentage additions were made to different parts of the field, which resulted in an accumulation of irregularities and anomalies. In 1931, the need for a thorough review was recognized, but, in the height of the economic and financial crisis, it was confined to a smoothing out of the worst irregularities, with some simplification of the terms in which the tax was stated. This revision left the general distortion of the original scale unaffected.
The depression added a more serious change to the original scheme. The immediate effect of acute depression was to reduce severely incomes from personal exertion, but to leave income from property relatively unaffected, at least, at the first impact. Property income could, therefore, at that time, stand heavier taxation. The conversion of the internal debt reduced income from bonds, and taxation of all other property income was increased by a fiat rate of 2s. in the £1. This flat rate increase was extremely severe on small incomes, and some relief to them was quickly given. On the whole field the special tax was gradually decreased in the years of recovery, and finally abolished in 1935-36, as a separate tax. It had, however, in effect been partially incorporated in the general taxation scales by percentage increases of the property rates, and percentage decreases of the personal exertion rates, so that ultimately the extra loading for property income was much greater than in the original scale, introduced by a Labour government in 1915. Extra loading on property was reasonable under acute depression conditions, but needed reconsideration when the circumstances which occasioned it changed. This is one reason for a thorough reconsideration now of the scale of income taxation in order to correct the distortions accidentally introduced into the original scheme. I pass now to another reason for a new scale.
The original tax was a war-time tax, but it passed into the peace-time financial structure, and the rates generally have never been lower than those originally imposed for 1915-16. Faced with heavy new war expenditure, we have now to make a war-time addition to the original tax, and make of it an efficient instrument for collecting additional revenue. A further substantial sum is required now, and the future may require much larger sums to be collected. That is dependent on the duration of the war and the extent of our further commitments rendered necessary thereby, and we are bound to make our plans having regard to those considerations.
As the result of the factors to which I have referred, the first war-time demand is naturally on the higher incomes, but this field has been well exploited since 1914 by both Commonwealth and States. There is not, as will be shown later, enough to be got from the highest incomes to meet the demands of a war of this magnitude. “We are obliged, therefore, to extend the field of effective taxation downwards; not very much at this stage, but enough to alter the rates of progression so that they, rise somewhat more steeply than before. We need to throw more weight on the moderately high incomes in particular. This involves a revision of the scale of progression and a new formula for the tax. This is the most important reason for a thorough revision of the old scale. A new scale has, therefore, been drawn up, following the general principles of the original scale, but adapting it to our present needs, conditioned by the scales and methods of taxation applicable in the States.
One important respect in which a change from existing practice is proposed is in the proportion of property rates to personal exertion rates. I. have pointed out earlier that the great disproportion in the present rates is an historical accident. Through a large part of the scale, property rates at present are double and more than double personal exertion rates. There is no justification in principle for such severe discrimination. It is quite out of harmony with the practice of the individual States. No State, except Victoria, taxes property in anything like this proportion. The case for heavier taxation of property, as I shall show presently, is strongest for middle incomes, say £1,000. For this income, the average tax on property of the six States is about one.-third greater than for personal exertion. For the Commonwealth it is nearly double. In the United Kingdom discrimination is effected by reducing personal exertion income by 20 per cent, and then taxing it at the same scale as property. The sound principle, based on reason and the practice of other governments, is to make property rates greater than personal exertion rates by a reasonable percentage - the Government has decided on about one-third - through the middle part of the scale, and taper this percentage off at either end of the scale. The reasons for this tapering off are a matter of common sense.
High personal exertion incomes are not, in their nature, very different from high property incomes. Incomes of more than £10,000 in Australia are derived almost as much from personal exertion as from property. I venture to suggest there are few people in Australia earning £10,000 a year strictly by personal exertion without considerable aid from property. A sheep or cattle station might return £10,000 a year to its owner, irrespective of the amount of time spent by him in the supervision of his business. This profit, however, is taxed as personal exertion income wholly. A well-organized factory or large commercial establishment might return £10,000 a year to its owner, who has perhaps inherited it, and takes little or no part in the conduct of the business. At best, after the business ia established, the function of the owner might be chiefly to make judgments about men and broad policy. He would exercise the same kind of abilities, and to the same degree, as a man would exercise in the management of large investments. Yet the one is all “ personal exertion “ income, and the other is “ property “ income.
It is quite clear that there is a large element of property in nearly all high personal exertion incomes. There is no ground for much differentiation between them. The standard difference in rates over the major part of the scale should be narrowed for high incomes. This has been done in the scale now proposed, not by reducing property rates, but by bringing personal exertion rates progressively nearer to property rates for very large incomes. For tho lower end of the scale, there should be a similar narrowing, though for a converse reason. Small property incomes are not particularly taxable. They are typically the product of a life’s savings by which a man is supporting his family after his retirement from active occupation, or the inherited savings on which women and children are dependent. The loading on these incomes because they are derived from property should be less than the standard loading over the middle incomes. This principle is carried out in the existing scale and is retained in the proposed scale.
The- deductions of £50 for a wife and £50 for each dependent child stand. I am not without hope of being able in the not too distant future to propose a measure of positive family allowances in place of the negative deduction of tax, but for the present that objective must remain in abeyance. The statutory deduction remains at £250. It runs out more rapidly so that it vanishes at £500 instead of £750, in order to bring middle incomes a little more quickly into the field. But a married man with two children and an income of £400 will pay no federal income tax. That the Government has been able to provide this in war-time taxation, having regard to our present commitments, is an earnest of the Government’s determination to protect as far as possible the family unit.
Before dealing with the proposed scales, I must further refer to State income taxes. The powers of the Commonwealth and the ‘States are concurrent in respect of direct taxation, but, in practice, the States are, to a substantial extent, dependent on the income tax for their financial solvency. This means, in practice, that the Commonwealth must take State taxation into account when imposing its own income tax. As the Commonwealth cannot discriminate between States in respect of taxation, it follows that the Commonwealth must take the taxation of the highest taxing State into account when imposing an income tax for the whole of the Commonwealth. Further, it must do this for every level of income, so that one State may, and does, set the limit for the Commonwealth over one range of incomes, and another State sets the limit over another range of incomes. If State taxation were moderately uniform, this would not matter much. But the highest State rates are two and three times the lowest States rates, with the consequence that a good deal of taxable capacity is untapped, and cannot be tapped by the Commonwealth. This practical limitation of federal income taxation causes difficulties at present but not of a serious order. If the financial strain of the war increases greatly, the difficulties may become so serious as to require a reconsideration of these conventional limits to Commonwealth taxation, and consequently, of all the financial relations of Commonwealth and States.
There is another point of interest in connexion with State taxation. The practice has been for the Commonwealth to exempt from taxation the amount of income tax paid in the variable State taxation, while the States make no abatement for the uniform Commonwealth taxation. This appears anomalous in principle, and is, in fact, a heritage from the time when the Commonwealth entered the field of income taxation, which hitherto had been left entirely to the States. The practical results are still more anomalous. The Commonwealth imposes nominally a uniform rate of tax at each level of income in all States. With the allowance of State taxation., an income of £10,000 pays at present in federal income tax £1,013 if it is a Queensland income, and £1,933, or nearly double, if the income is earned in Victoria. This obvious anomaly raises a question which must be faced some day; but this is a problem for the future.
I come now to the proposed scales of rates, and will deal first with the personal exertion scale which must be the basis of any income tax. The scale, as I have said, must have regard to rates in the highest taxing States. These State rates, as set out in the tables which have been circulated, are from three to four times as high as the present Commonwealth rate over the field from £800 to £10,000; below £800 the disproportion grows rapidly greater. In comparison with the proposed scale, the highest State rates are about twice as great for incomes above £1,000. Below that figure the disproportion again grows rapidly greater. At £500 the highest State tax is six times the proposed federal tax. It is clear, then, that federal income tax is light in comparison with State income taxes, so that a very considerable rise of Commonwealth tax makes only a comparatively small relative increase of the total tax paid on any individual income. The greatest proposed increase of present personal exertion rates is at about the £1,500 level; for that income the proposed increase is about 70 mer cent. The additional tax, however, is an increase of less than 16 per cent, of the total income tax at present paid on £1,500 income earned in the highest taxing State, and for two other States the total percentage increase is little higher. For the lowest taxed State, Victoria, it is 25 per cent. It is in the. light of this increase of total income taxes paid that the present proposals must be viewed in order to see .them in their true perspective.
The new scale begins at 5d. instead of 3d. on the taxable income, that is,, the amount left after deduction of allowances for wife and children, and of the statutory exemption. The effect of the deductions is that even the single man will not pay tax at the rate of 5d. in the £1 on his actual income under the proposed scale until his income is appreciably over £500. The married man with one child does not reach 5d. in the £1 on actual income until his income is about £700.
For the range of incomes under £500, the Commonwealth tax, even on the increased scale, is almost negligible in comparison with State taxation. The total revenue expected from it, chiefly from single men, is only one-fifteenth of the total yield of the individual federal income tax, though income below £500 a year makes four-fifths of the total of individual incomes in Australia. Therefore, the tax,, and still more the increase of tax, over this range of income, is relatively unimportant in respect of revenue. The tax is levied and t lie increase is proposed so that by reasonable progressive increases from the low effective rates on incomes under £500, some substantial contribution can be obtained from incomes in the next higher group of incomes from £500 to £1,000. From 5d. in the £1 on a taxable amount of £500, the rate rises rapidly to 15d. at £1,000, thence at a slower rate to 47d. at £4,200, and thence again more slowly with a limit of 7s. 6d, in the £1 on the highest income-. I draw attention to the fact that certain State taxation goes over 8s. in the £1. The rate of increase has to be gradually slackened as incomes rise, or it would lead to aggregate Commonwealth and State rates of over 20s. in the £1. The increases of the present tax are at their greatest, about 70 per cent., at about £1,500 as noted above. But the increases are almost as heavy upto £5,000, because these incomes are not taxed heavily by the existing scale, as compared with similar incomes from property, with which, as I have said, they are in some measure akin.
The personal exertion scale, which is the more important, has first been arrived at by considering the relative ability of different incomes to stand taxation up to the point of our present revenue requirements. The. property scale is derived from it by increasing personal exertion rates by roughly one-third, and tapering off this increase at each end of the scale, in accordance with the principles which I have already explained. The increase is greatest, 40 per cent, about the £1,000 level, but falls to 20 per cent, for incomes below £500. For incomes over £1,000, the increase over personal exertion rates remains fully onethird up to £2,500. and then tapers off, on the ground of the increasing element of property in personal exertion incomes in the higher ranges.
The result is that all rates on property income are increased, but not so heavily as personal exertion rates. Tn our present scale, as I said earlier, personal exertion income in the middle and higher ranges is relatively under-taxed, and property income relatively over-taxed. These proposals attempt to restore proportion, by imposing some increase on property income but a much greater increase on personal exertion income.
I suggest that the committee can most usefully consider the proposals, from this angle: First, whether the personal exertion scale is fairly and equitably designed to raise a considerable increase of revenue from the taxation of incomes, and, secondly, when that has been decided, whether the property scale bears the proper relation to the personal exertion scale, having due regard to the factors to which I have drawn attention.
I suggest, too, that it will not be profitable to pay too meticulous attention to the precise increases at different incomes over present taxes. It is not uncommon in public discussions to argue as if the present taxation scale were immutable, and any departure from it must be justified by specific evidence. The view I have tried to put before honorable members is that our present scale, even if it were perfect originally, has, during the years that have elapsed since its imposition, been distorted by temporary conditions and the accidents of financial emergency, and in any case it requires revision to make it a more powerful and efficient taxing instrument suited to our present needs. We must have the courage, then, to look at the whole problem afresh, and use our intelligence and experience to decide on an income tax scheme which will be as equitable to the citizen and as efficient as a revenues-producer as we can make it, without being too rigidly tied to the details of the present taxation schedule which it is our business to amend.
The resolution provides for the imposition of a further tax at a flat rate of ls. in the £1 on part of the undistributed profits of companies. The nature of that tax was explained to honorable members when the amending Income Tax Assessment Bill was before the House. Honorable members are aware that last year the ordinary income tax rate payable by companies was raised from 13.8d. in the £1 to the present rate of 2s. in the £1. In view of that increased burden which companies were called upon to carry, and in view of the imposition on companies of the further tax on undistributed profits and the war-time company tax, it is considered that any increase of the companies’ ordinary income tax would not be justifiable at this juncture.
An increased yield of £3,000,000 is expected during the next financial year from the tax on the incomes of individual taxpayers. With this increase of £3,000,000, and a further tax of £450,000 on the undistributed profits of companies, it is estimated that the total income tax contribution to revenue during the next financial year will be £18,500,000. This is exclusive of the £4,250,000 of collections anticipated from the war-time company tax. I commend the resolution to the committee.
Debate resumed from the 2nd May, 1940 (vide page 481), on motion by Mr. Spender-
That the paper be printed.
.- The Treasurer submitted to this House last week a financial statement which was a very complete survey of Australia’s financial position. He mentioned that it was unusual, before the close of a financial year, to present a document dealing with a government’s financial proposals for the new financial year. That is true, but I think the honorable gentleman is to be commended for having done that, because these are unusual times. He has placed before the House, no doubt with the assistance of expert advisers, a very comprehensive plan. It is not for me to assume that the calculations made by Treasury experts are wrong; but, having regard to the enormous proposed increases of taxes and of public expenditure, it is the duty of this Parliament to examine the principles upon which they are based, in the light of what is ‘best in the interest of Australia. I shall endeavour to approach the subject in that broad and helpful way, rather than in a spirit of carping criticism.
We have a full review of the position before us and we know, at least for the present, what is in store for the people of this country. Of course we cannot tell what the future holds for us. Probably the Treasurer will go down in history as having broken some records. The next financial year will be a record year for taxation and a record year for expenditure from revenue. But although the Government’s financial proposals are extraordinary and constitute a record, they do not meet adequately even the present position.
It has been pointed out that for the two financial years 1939-40 and 1940-41 Australia’3 expenditure overseas on war will be £35,000,000. Already a £6,000,000 loan has been floated in London, and a temporary loan has been obtained from the British Government to meet war expenditure overseas until the end of December. But there is no definite proposal in the Treasurer’s financial statement as to how that temporary loan is to be met, and there is no plan before the Parliament for financing our future commitments overseas. So far as the Treasurer can estimate, the internal position has been covered; but the position overseas has been left entirely untouched. Not a word has been uttered to explain how that situation is to be dealt with. The overseas problem is far more serious than the internal problem. It is one over which we have lost control. The Treasurer made a reference to it in his statement, but only in very general terms. He said* -
If overseas finance is to be provided by Australia itself, without resort to borrowing from the British Government, not only must the necessary amount be raised in Australia by borrowing or taxation, but also sufficient London funds must be built up in the Australian banking system.
That means that no matter how much we may raise internally to meet the overseas position it will not be sufficient : We must build up London funds. Further taxation in Australia will be faced by the people of this country in the spirit of self-sacrifice; but there are other difficulties. It is easy to say that London funds must be built up in the Australian banking system, but I ask the Treasurer how it is to be done. As the present loan is said to be a temporary one the implication is that borrowing in England will not be resorted to; but unless we borrow money in England we can build up our London funds only by an excess of exports over imports. If there be another way I do not know of it. People skilled in legerdemain may suggest other means, but I do nOt know of any other way. But more than an excess of exports over imports is necessary; that excess must exceed our obligations overseas, because if it merely equals our overseas obligations it does nothing to increase our London funds. In the two years that ended June, 1939, we were £27,000,000 short of the amount required to meet our obligations in London. As a matter of fact, our total London funds fell by £33,000,000 in those two years. Honorable members will realize the seriousness of the problem, yet it was mentioned only in passing by the Treasurer.
We must remember also that, when we speak of our London reserves, we have no gold reserve in Australia. I do not say that we should have such a reserve, f think that the proper thing was done with our gold; but formerly that reserve was always here for shipment overseas if required, and had always to be taken into account as a reserve in the event of a crisis. To-day that gold reserve does not exist; we have only our London funds. When war broke out in 1914 we had a considerable accumulation of gold in Australia in the vaults of the Commonwealth Bank and the private banks. I have endeavoured to ascertain from the Treasury the figures relating to our London funds at that time, but they are not available. However, I have some knowledge of the position then, and I am convinced that we had high London funds when war broke out in 1914. To-day, we have in London funds amounting to £55,800,000. In our notes reserve we have only £400,000 of gold. It will be seen that the position is serious indeed. As honorable members will notice, the gold reserve is about 2-J per cent, of the other reserves, but I have no doubt that the other reserves could be availed of in a crisis. The London funds in June 1937 amounting to £89,200,000, but during the last two years they fell by £33,400,000 to £55,800,000. Those funds are for all of the requirements of Australia. Every year we require £27,000,000 in order to meet interest commitments overseas on Commonwealth and State debts and local government borrowing. That provides nothing for other commitments, which run into additional millions of pounds. Our London funds to-day are lower than at any time since the depression. Notwithstanding that the Government has had warning of the position by that fall during the last two years, no action was taken until the crisis arose. Since the crisis began, import restrictions have been imposed on non-sterling countries; but they are totally inadequate. Import restrictions must be extended to sterling countries; and even then they will not be adequate. But had severe and even drastic restrictions been imposed when the financial structure started to tumble, we might have been in a position to meet our obligations. I assume that the Ottawa Agreement stood in the way of dealing with sterling countries. If so, it bears out what was said by members when that agreement was placed before us for ratification. Over the years warnings have been sounded about the London position. I do not wish to traverse all of the ground, hut I cannot help recalling the light way in which warnings were brushed aside in 1927, two years before the depression hit us. We had to face a position which bordered on national bankruptcy. Warnings have been issued since then; but they have been brushed aside just as lightly. I can remember issuing a warning when I urged the accumulation of large reserves in London to meet a possible drought. No provision was made to meet that contingency, or any other abnormal state of affairs. In the last two years no provision has been made to meet our ordinary current obligations. At the moment we have not a drought, but we have something which is affecting us as badly, or worse, than a drought, for we are at war. Our costs overseas are increasing in consequence of that war : in the near future they will probably be doubled. On top of that, a shortage of shipping restricts our exports, even if prices should rise. That is a serious position. In 1929 a rectification of our trade balance brought solvency to this country, and the tariff measures accompanying it established industries in this country which are saving us in this hour of need. The action taken at that time has often been severely criticized, but I tremble to think what our present position in respect of the defence of this country would be if we did not have the trained artisans and well-equipped factories which resulted from the steps taken a decade ago, although the credit for what has taken place has been claimed by subsequent governments. It is for the Government to tell us how the present situation is to be faced. I hope that in the years to come we shall not have a third repetition of warnings being unheeded. In the two or three years following the defeat of my government it was easy to sit hack complacently and point to the swelling of London funds, the result of measures taken during the depth of the depression, but those measures were sufficient to give only a little more than the amount required to meet our obligations. There was no reserve, and no provision for anything abnormal. Droughts on a wide scale are always possible in Australia. I have stated the position overseas, and I shall leave it at that. I hope to hear more on this subject from the Government; I do not raise it in a spirit of party criticism, but in one of grave anxiety.
I turn now to the internal position, ft appears that the programme as outlined by the Treasurer-and we must accept the figures given to us - will meet our obligations internally. By loans, increased taxes, and credit expansion, the internal position will be met. A loan of £50,000,000 will soon be launched, and I hope that it will be successful. I believe that the money will be raised by the determination of the people of this country in this crisis. I have no doubt that additional revenue will be obtained from taxation either by the determination of the people or the determination of the Treasurer. We are facing this war in circumstances very different from those which existed in 1914. When that war broke out, the public debt of the Commonwealth and the States was £329,000,000; to-day it is £1,295,000,000. It will be seen, therefore, that we cannot raise money by loans to the same degree as during the last war. To do that would be equivalent to placing one mountain on top of another; the result could not be other than disastrous. We shall, therefore, have to raise a larger percentage of our requirements by the imposition of taxes. I agree that the Treasurer is doing that in a greater degree than was done during the last war, when only a small percentage of the war expenditure was financed in that way. The taxes that will have to be paid will be heavy, but I shall not criticize their severity, because the position must be met. But I do say that when taxes are heavy, greater care must be taken that they are equitable. What is equitable taxation? We go back to the teaching of Adam Smith, and even earlier. It is a generally accepted principle that taxation should be imposed on the basis of the ability to pay; we must prevent the evasion of taxation by those on whom it is imposed, because every evasion means that those who do pay must pay more. We must also avoid the imposition of heavy taxes on those who have not the ability to pay, and place the burden on those who can PaY
I shall not speak at length on the decision of the Government not to deal with the subject of rebates of company tax on dividends paid to individual shareholders, because I dealt fully with this matter last year. I said then, and I say now, that I have always favoured the removal of that inequity by following the rebate right throughout from the higher incomes down to the lower incomes. That is the principle adopted by the British Government. But in the light of experience, which has given to me more intimate knowledge, if not greater knowledge, I confess that there are administrative difficulties and heavy costs in doing that. However,, if we cannot rebate the company tax to the- small shareholder, who has already paid it, w» should not rebate it to the wealthy taxpayers. Why not cancel the rebate in their case also, and allow the £2,000,000 involved to lighten the burden on all other taxpayers? It may be contended that that means double taxation. But is any greater injury done by taxing a large shareholder doubly, than by requiring a small shareholder who has not an income of £250 to pay as much as 2s. in the £1 when he ought not to be taxed at all? That is what is done now. There are only two ways in which justice can be done in this matter; either we should follow the rebate right through and give it to all, or we should not give it to any one. Dealing ,with double taxation, I shall take one class of shareholder to whom even that excuse cannot apply, namely, the shareholder who has preference shares. Honorable members know that these are shares that take preference in the distribution of dividends and of assets. They are secured, and unless a company is practically insolvent and is not able to meet its obligations, preference shareholders receive their fixed dividend of 5 per cent., 6 per cent., 7 per cent., or 8 per cent. How does the company tax affect that man? If it were made 10s. in the fi, unless it affected the stability of the company he would still receive his dividend at the fixed rate. Consequently, it cannot he argued that he pays .the company tax, no matter what it may he, because it does not affect the rate of his dividend; yet he will be given a rebate of 2s. in the £1. Let me give an illustration of how this will work out. Take an investor who invests £20,000 in preference shares returning 7 per cent., from which he derives an income of £1,400. His return is not affected by the company rate, yet when he draws his dividend he will be given a rebate of £140, equal to 2s. in the £1 on his return of £1,400. That man will not pay one penny by way of income tax, either as a shareholder in a company or as an individual, if that should be his total income. I doubted whether persons in this category received the rebate. When it occurred to me the other day I could not believe that such could be the case, but when I inquired of the Treasury the answer was “Yes”. I take it that that £140 is a. pure gift from the Treasury. There is also another anomalous position. The company tax is raised from ls. 1.8d. to 2s. in the £1. Any profits earned last year were taxed at the rate of ls. 1.8d. in the £1. Any dividends received by a shareholder this year out of reserves established from last year’s profits will carry a rebate of 2s. in the £1. There is a clear gift of lOd. in the £1. That is an anomaly which ought to be rectified when anomalies are being rectified in the measure when it comes before us. The tax on undistributed profits will return a very small sum. The additional tax of ls. in the £1 is not to be rebated. What, then, becomes of the principle of double taxation in such a case? I have no doubt that the rather small return from the undistributed profits tax is due to the fact that 25 per cent, of the undistributed profits are exempt. That is some improvement on previous practice, because those undistributed profits go to the establishment of huge reserves, out of which -in the past bonus shares have been issued. Within recent years we have been getting at those. When big reserves were accumulated, stocks were watered and huge monopolies became established in this country. Any company which puts no more than 25 per cent, of its profits into reserves will entirely escape this undistributed profits tax. That is why it is estimated that not a very great amount will be received from it. Even less than the estimate may be received.
I come now to what is the most important avenue of taxation, namely, income tax on individuals. I entirely agree with the Treasurer that this is the most equitable of all taxes, because it is based on capacity to pay. It is paid because the income is received; it is not a supposititious or problematical income, but an actual one. The increase of this tax is stated to represent something like 50 per cent, of the total yield- £4,000,000 over a period of about 14 months. It is a war tax. None of these taxes is a war-time profits tax as we understood the old wartime profits tax, which was a cumbersome and most inequitable form of taxation, but is imposed for war purposes, or in times of war, upon incomes from personal exertion and from property. The rate of increase of the tax, as the Treasurer has informed us in his interesting and illuminating speech to-night, is not uniform, the reason being mainly lack of uniformity in the different States, some of the States having a very heavy tax upon incomes of certain types, whilst that of other States is comparatively light. I have yet to learn that it is the obligation of this Parliament and of this taxing authority to adjust the taxation of the States. That is what this means. We should impose whatever tax we think is equitable, and, should any other authority impose what we consider is not equitable, let it be dealt with by its own people. I am not saying that the States’ taxes are inequitable. I have heard a lot of talk about the very heavy taxation in Queensland. I point out that Queensland is not the highest taxing State on incomes under £1,000 a year, but it is on incomes of over £1,000 a year. There are many people who approve of that principle, and I am numbered among them. But it is perfectly true that there is a limit to the increase that can be made in respect of the tax imposed on the higher incomes, because of the existence of State taxation. That is admitted, and it has to be faced. There could not be a 60 per cent. increase all round, because on some of the higher incomes the result would be a combined return of more than 20s. in the £1, and nobody would want even to attempt to do that. Therefore, from the practical point of view, some regard must be paidto State taxation. But I suggest to the Treasurer that the Commonwealth has been over-considerate to the men on the higher incomes, because of the existence of high State taxation on such incomes. This is a war tax, the return from which is to be largely spent on defence or preparations for defence in a period of danger and of hostilities. If any persons should be called upon to contribute to such a tax, it is those who have the most to lose. They are not contributing in respect of this particular, special, war tax in anything like the proportion in which those on smaller incomes are to be asked to contribute. The Treasurer says that the effect of the tax on some of the high incomes is to raise the rate to about 12s. 9d. in the £1, as already 8s. in the £1 is being paid in State tax. I point out, however, that such incomes total about £40,000 a year, and having paid these heavy imposts the recipients will still have left £15,000 a year, upon which I feel that they can struggle along, at all events during the war. Let me give a few illustrations. I have taken my figures from the schedule obligingly supplied to me by the Treasurer. I have rather hurriedly amended them, because this is an amended schedule or table, and it is an improvement on that originally issued last week. Take an income of £10,000, received by a man who lives in the State in which the highest taxation is imposed - Queensland. That man now pays in federal tax £1,857.
– On income from property or from personal exertion?
– On income from property. At the present rate of tax a man in Queensland who receives that income from property pays £1,857. If he lives in the State in which the lowest tax applies - Victoria - his payment is £2,636. The reason for the differentiation, as honorable members presumably know, is that when the amount paid in State tax is deducted from income, the amount paid to the federal authority is lowered; consequently, the higher State tax paid in Queensland has the effect of making the taxable income for federal purposes in that State lower than in Victoria. That in itself is an automatic adjustment, which relieves the men who pay big State taxes compared with those who live in the lower-taxed States. I presume that on that account there is no defiance of the principle embodied in our Constitution concerning differentiation between one State and another. In any event the differentiation could now be effected under the war powers of the Government without involving inconsistency with the terms of the Constitution. The increase of the federal tax under the present proposals is £68 in respect of the man living in Queensland, and £101 in respect of the man living in Victoria. On an income of £5,000, the man who now pays a federal tax of £815 in Queensland is to be asked to pay £829, an increase of £14. [Leave to continue given.] I submit that that is not a reasonable extraamount to be paid as a war tax.
I refer now to the principle emphasized by the Treasurer that we must observe a certain amount of uniformity in these matters, and draw attention to the fact that when income taxation was originally introduced we accepted the principle of graduation. That is to say, when a higher rate was imposed it applied in a graduated way from the highest to the lowest incomes. Ever since that time that principle has been observed with slight variations. Whenever we have raised the rate of tax the increase has been on a fairly even percentage from the lowest to the highest incomes, and when taxation has been reduced there has been a percentage reduction right through. I frankly admit that that principle cannot be followed strictly if extremely high taxes are imposed, because incomes would be taxed out of existence; but the schedule before us indicates some striking inequities. The rate of increased tax -would vary as
Ls there any degree of equity between the 3 per cent, of the £40,000 income and the 66 per cent, of the £400 income i
I am in agreement with the proposed excess profits tax. I think it is long overdue. But I am not satisfied that we shall be able to apply it as fully as it should be applied because of the manoeuverings that will be revealed by those who attempt to expand their capital and in other ways evade it. Obviously the larger the amount that is regarded as declared capital the lower will be the percentage of profits, and it may be that certain interests will be able, by this means, to keep their profits down to 8 per cent., and so avoid the excess profits tax. I know that our taxation officials are capable, and will do their best to apply this tax effectively, but it will not be easy to realize the expected return from it. In the United States of America the position has been largely met by the application of an excess profits tax and a capital stock tax. Under that method, if people expand their capital in order to avoid the excess profits tax they find themselves assessed under the capital stock tax. On the other hand, if they show excess profit they are taxed under that heading. I understand that the system has worked equitably, and I suggest that the Treasurer and his expert advisers should make an examination of it.
Under the proposed amendment of the sales tax legislation it is estimated that we shall obtain £18,000,000 from that source. When the sales tax was first introduced it was estimated to produce £6,000,000 a year. We obtained £3,000,000 from it in the first year, and £8,000,000 from it in the next year. Although I admit that there are generous exemptions in respect of the basic foods required by the lower-paid people, £18,000,000 is nevertheless a huge sum to obtain by this means. I suggest for the serious consideration of the Treasurer that in view of the big increase of the rate of the sales tax which is being made the Government should discontinue the flour tax and make up the deficiency so caused from the increased yield from the general sales tax. The rate of the sales tax on flour is seven or eight times as heavy as that on general commodities, and as the flour tax is imposed on a basic commodity which every householder must use, and which the poor use in greater quantity than the rich, it is not unreasonable to ask for an adjustment. I make this appeal in the interests of the lower-paid people of the community upon whom this tax falls most heavily.
The references made by the Treasurer to the special measures to be taken to deal with the employment of persons who are described as “ the residue of the unemployed “ interested me very greatly. There are, in our community, many people, including a considerable number of returned soldiers, who are capable of doing certain classes of work but who are not 100 per cent, efficient and are therefore unable to obtain any employment at all. Our efforts should be directed at this time to find suitable employment for such persons. I submit that we cannot claim that we are putting forward our maximum effort in this time of crisis while we have one person in our community unemployed, who is able to work.
I turn now to another aspect of the Treasurer’s statement. The honorable gentleman said that among methods of finance that could be employed were not only borrowing and taxation, but also the expansion of credit through the banking system. He went on to say that while there would probably he further contributions from the latter source there were limits to what could be obtained from it. His exact words were -
When tho resources of a country are being fully used, further credit would only drive up prices in spite of a hundred price controls.
That statement should arrest attention. It reveals very little faith in the pricefixing machinery that has been set up, and also very much less faith in the commercial community. The condition the Treasurer contemplated can only come about when individuals are profiteering and breaking the law, or defying the spirit of the law. I know that it is perfectly true that when you increase the spending power of the people without anything else up go prices; but there is no justification for an increase of prices unless costs also go up. If you increase the spending power of the people and immediately permit costs to go up as well you have the spiral which causes the trouble. Prices go up, then wages must go up and prices again rise. But to say that an increase of the purchasing power of the people must _ inevitably mean an increase of prices is to show little faith in the methods adopted to control prices. There should be no increase of prices unless there is an increase of the cost of labour and materials. If there is an increase of the money volume and of the spending power, overhead costs should be reduced.
– The right honorable member is assuming the same quantity of production.
-I am assuming an increase of production so long as the volume of production remains within the power of the people. I say also that an increase of prices -without _ an increase of the cost of raw materials and labour is bad in normal times; it is rank treachery in war-time. I subscribe to the statement of the Treasurer that the expansion of credit should raise prices only when our resources are fully used’. By “ resources “ is meant our man-power and our raw materials. We have an abundance of raw materials and we still have 160,000 unemployed persons in the community. The utilization of these resources in a wellbalanced proportion for useful production should not tend in any way to raise prices. Probably if these resources were used to the maximum without leaving any margin, that might begin a spiral which would get beyond control.
While I approve of the statement of the Treasurer which I have just cited, I contrast it with the frenzied attacks mad” upon my Government during the period of the depression when a very moderate attempt was made to check deflation,, and to lift the financial capacity of the people by the employment of idle men, and by adopting means to prevent the wheatgrowers of this country from being forced into the Bankruptcy Court.
– To-day, when we have an overdraft of £21,000,000 in respect of wheat, there is not even a squeal.
– A considerable expansion of credit has occurred since those days. An expansion of credit for production and to arrest deflation, as well as to stop a downward fall of prices”, was described as unsound in the early 1930’s, but now when prices are fairly high the expansion of credit for war purposes, which is not production, is hailed as the acme of wisdom. I stated the position clearly when my Government was in office. I said that we were against inflation or deflation, and were in favour of stabilization. Deflation in those days was a dread menace. A reference to the report of the Royal Commission on Banking and Monetary Systems will show that there was too much delay in affording the small degree of stimulus that was required to remove the depression. I am recalling this financial history in order to utter a warning. We know something of the zeal of converts who may allow credit expansion to go in the wrong direction. I hear an honorable member say: “ There is not much danger of that “ ; but there is danger in it. The Treasurer went on to say -
The liquidity of the banks has improved SO per cent, in the last six months.
That is an extraordinary improvement within six months. The reasons given for it were, first, an increase of export prices, which is quite legitimate and understandable, and, secondly, the financing of defence expenditure by the banks.
– The first reason was the increase of export prices plus the prompt, payment which does not happen in normal times.
Mr. SCULLIN.~Yes, plus that. Increased prices and prompt payment is one issue; the other is increased defence expenditure financed by the banking system and the latter is the more important factor. Increased defence expenditure financed by the banking system was, in the first place, a loan from the banks. Some of it came from private banks - we cannot learn how much - but the bulk came from the Commonwealth Bank. That money is paid by cheques , to various firms and individuals who in turn pay their cheques into banking accounts in most, if not all, cases in private banks. The private banks can then deposit those cheques with the Commonwealth Bank, and build up cash reserves upon which they can in turn build a superstructure of credit. [Further leave to continue given.] They build up that increase of cash reserve by the Commonwealth Bank itself expanding credit.
– That is how expansion of credit always operates. Is the right honorable gentleman opposed to trading banks i
– I will tell the honorable gentleman what I propose ; I am not critical, I hope, without being constructive. There is the superstructure of credit created by private banks, and I draw a distinction between the Commonwealth Bank and private banks in respect of getting loans. I do not join with those who say that money should be lent by the Commonwealth Bank free of interest. Interest paid to the Commonwealth Bank is only a book-keeping entry. It does not matter. It goes back to the people. But when we borrow from the private banks the interest has to be met in higher taxes. The banking commission realized that some control over the private banks’ expansion of credit was necessary. To say, as the Treasurer said, that something has always been the policy does not prove that it ought to be the policy. The commission recommended that the trading banks should be obliged by law to maintain with the central bank a fixed percentage of their liabilities to the public. This, as the commission pointed out, would strengthen the Commonwealth Bank’s control of the trading banks’ credit policy. It would stop this business of private banks taking advantage of a regulated measure of credit expansion by the Commonwealth Bank and turning it to their own profit by building a superstructure of credit upon it and thereby increasing prices to the community. There is my suggestion. It is not the first time that it has been made. It has been made often by people better qualified to make it than I.
– Do I understand the right honorable gentleman to say that these bank credits enable the trading hanks to make their huge profits about which he speaks?
– No. The trading banks have many ramifications, but these credits enable the banks to make greater profits. The more we expand through the Commonwealth Bank to meet war obligations, the more the private banks can expand credit and increase their profits. When they have this power it is equivalent to their coiningmoney. The trading banks used to print their own notes, but they have not been able to do so since 1910. The Treasurer has hot disclosed the extent to which the Government has used the credit expansion. I know of no reason why it should be shrouded in mystery, but it is. I suppose that the Government is somewhat shy about it. The Government would be bashful; because I can remember an election cry of “Real money”, and holy horror at the idea that the gold reserve should be sold. Yet we have had this expansion or inflation, and we have got rid of the gold reserve. We have only £400,000 worth of gold left out of £10,000,000 which formerly backed our note issue, despite which we have not lost the last vestige of our national credit which an honorable gentleman, who is now a member of the Government, declared would be gone if the gold reserve were sold.
I believe that the Treasurer is doing right in utilizing in a regulated and sane way the credit that can be got from the Commonwealth Bank, but I issue a warning that he should not let the private banks, which are concerned in making profits rather than with national interest, get control and create booms by issuing credit, because the advances so made will be eventually called in and worthy people ruined. The dangers of inflation are intensified when the private banks are allowed to expand credit on a defence programme. That can be, and should be checked. The royal commission’s report shows how to do it. Inflation of prices in the last war brought profits to a few, and hardships to many. We do not want that to be repeated in this war. Whatever gains arise from credit expansion should come to the people through the operations of the people’s bank. This crisishas produced keener realization of national problems and I hope that my remarks will be regarded as being constructive and animated by a desire to serve the true interests of the nation.
– in reply - Mr. Speaker—-
– The honorable gentleman is closing the debate.
– As I do not desire to close the debate, I shall resume my seat, but I am ready to reply to the right honorable member for Yarra (Mr. Scullin) if no other honorable member wishes to speak.
Debate (on motion by Mr. Holt) adjourned.
Message recommending appropriation reported.
In committee: (Consideration of Governor-General’s message).
Motion (by Mr. Spender) agreed to-
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for war pensions.
Standing Orders suspended; resolution adopted.
That Mr. Spender and Mr. Street do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Spender, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to provide £10,000,000 out of the Consolidated Revenue Fund for the payment of war pensions. This is one of the recurring measures periodically submitted to Parliament for the purpose of appropriating an amount from the Consolidated Revenue Fund for payment into a trust account to enable pensions to be paid therefrom at the rates already approved by Parliament.
The total amount appropriated by Parliament to date for this purpose is £155,000,000, and the balance of this appropriation now remaining is sufficient only to meet pension payments to 30th April, 1940.
Although Parliament is being asked to approve of £10,000,000 which is the usual amount appropriated, this sum will not be withdrawn from revenue immediately. Payments from revenue to the trust account are only made periodically as it becomes necessary to meet the payments to pensioners.
This bill relates only to pensions arising out of the 1914-18 war, the basis of payment of which has already been established by Parliament, and this measure merely approves the provision of funds for the purpose.
I would add/that the Government is at present considering the whole question of repatriation of soldiers of the present war and a pronouncement of its intentions will be made at an early date.
Debate (on motion by Mr. Curtin) adjourned.
Message recommending appropriation reported.
In Committee: (Consideration of GovernorGeneral’s message).
Motion (by Mr. Spender) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for anact to grant and apply out of the Consolidated Revenue Fund a sum for invalid and old-age pensions.
Standing Orders suspended ; resolution adopted.
That Mr. Spender and Mr. Street do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Spender, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this measure is to provide £17,000,000 out of the Consolidated Revenue Fund for the payment of invalid and old-age pensions. The bill is similar to that periodically submitted to Parliament for the purpose of appropriating an amount from the Consolidated
Revenue Fund for payment into a trust account to enable pensions to be paid at rates already approved by Parliament.
The total amount appropriated to date for this purpose is £240,000,000, and the balance of this appropriation now remaining is sufficient only to meet pension payments to the 31st May, 1940.. Although Parliament is being asked to approve of an appropriation of £17,000,000, which is approximately a year’s expenditure, this amount will not be withdrawn from revenue immediately. Revenue is drawn upon only for payment to the trust account, as required, to enable pension payments to be made as they become due.
As previously stated, this measure has no relation whatsoever to the rates or conditions under which invalid and oldage pensions are paid, but merely authorizes the provision of funds for the purpose.
Debate (on motion by Mr. Curtin) adjourned.
Resumption of proceedings at stage reached last session: Consideration of Senate’s message.
Motion (by Mr. Nock) proposed-
That the request of the Senate contained in its message No. 1 for the resumption by the Souse of the consideration of the Commonwealth Electoral Bill be complied with, and that a message be transmitted to the Senate acquainting it therewith, and that the resumption of the debate on the question “That the bill be now read a second time”, (the stage which the bill had reached last session) be made an order of the day for the next sitting.
– I oppose the motion, because it involves the restoration to the notice-paper of this House an order of the day which disappeared from it at the close of the last session. In effect, we are asked to accept the bill, as it passed the Senate last session, as representing the Government’s present intentions with respect to the Commonwealth electoral law. I have reason to believe that the Senate passed the bill in a form which does not now represent the intentions of the Government in this matter. We are now asked to accept as a draft for our first consideration a bill which the Government proposes to amend in this House. If the Government accomplishes its purpose, after we have amended the bill as passed by the Senate it will have to be returned to the Senate for further consideration by that chamber. The proper procedure, in my opinion, would be to introduce a new bill in the Senate, in which the Government could indicate to the Senate its opinion as to what electoral practices should be provided for in the act.
– The procedure proposed is in accordance with practice.
– That is not so. It would be necessary to go back to the early days of federation to discover a precedent for the course the Government now proposes to follow. I challenge the Treasurer to say that he is willing to ask this House to adopt the bill, as it was passed by the Senate, without amendment. If the object of the Government is to avoid the Senate having to go over its work again, that purpose will be defeated, because, when the bill has been passed by this House, it will have to be returned to the Senate.
– That depends on the consideration received in this chamber.
– That is not all. As I understand the position, a radical departure with regard to the kind of ballotpaper to be used at Commonwealth general elections is contemplated by this bill. I object to that, because, before the Government proceeds with the consideration of further amendments to the electoral law, it should seek a conference with the States, in order that two things might be accomplished by agreement. First, there should be a uniform method of enrolment of electors for both States and Commonwealth, and there should also he an agreement upon a uniform type of ballot-paper for the election of at least the popular houses of the State legislatures and for the election of this Parliament. If that be not done, the electors for this Parliament, who, in their respective States, are the same persons as the electors for the popular chambers, will be using entirely different kinds of ballotpapers. I submit that, in a country in which adult suffrage is exercised in respect of Commonwealth elections and the elections of the popular chambers in the several States, the electoral practice should be uniform.
The honorable member would not be in order in discussing the merits of a bill which is not before the House, nor in suggesting at this stage what kind of bill should be brought before the House.
– But I submit that I am in order in suggesting that, before any bill is brought before this House, more particularly the kind of bill which is implicit in this motion, the Government should have a conference with the governments of the States, in order to endeavour by agreement with them to determine upon a uniform procedure.
– That matter is scarcely relevant to this motion.
– I object to this House being asked to consider a bill which was passed by the Senate in a previous session of this Parliament. I submit that in advancing reasons for opposing that procedure, I am entitled to indicate why I consider that the Government should follow an alternative course.
– The honorable gentleman has not seen the bill.
– I haveseen it in precisely tie form in which the Minister asks us to consider it. He invites the House to accept a motion to enable the bill to be restored to the notice-paper at the stage reached in this House in a previous session.
– Why not?
– We should take advantage of the lapse of the measure in order to have a fresh look at the whole matter, and decide what is the best kind of bill to submit to the Parliament.
– Why not resume consideration where we left off ?
– It would be undesirable to do that, because the measure provided for an entire innovation in respect of the voting practice of Commonwealth electors.
– The honorable member is now dealing with a matter that the Chair has ruled to be beyond the scope of the motion. He may not now discuss the merits of the proposal.
– I submit that we know enough about what this motion involves to understand that the bill provides for a radical departure from electoral practice. Commonwealth electors are also electors of the States, and unless the States follow our lead, a most confusing and contradictory condition of affairs will prevail in regard to the voting practices of the people. I submit that the Government should seek a conference with the Governments of the States in order to discuss frankly with them any electoral changes thought desirable.
– The matter will be open to debate on the second reading.
– Of course, but the Government should endeavour to obtain uniformity in respect of electoral enrolment and voting practice.
– Order ! The honorable member may not proceed on those lines.
– The arguments advanced by the Leader of the Opposition (Mr. Curtin) seem to be contradictory, and call for some explanation by the Treasurer (Mr. Spender). It has been suggested that certain amendments to the bill are to be introduced in this chamber, and that these were not discussed in the Senate. I do not wish to transgress the Speaker’s ruling, but there appears to be a conflict of opinion as to the proper approach to this matter. If the Government proposes to insert amendments in the bill, it cannot be said that the measure will be presented to this House in the form in which it was passed by the Senate. Apparently the Leader of the Opposition has some knowledge of the Government’s intentions regarding this matter, and the Treasurer might have given us some information about it. Until we know what the Government proposes we hardly feel competent to determine what course to adopt.
– I appreciate your ruling, sir, that we cannot discuss the details of a bill which has not yet been presented to the House for our consideration; but you would not, I am sure, desire to prevent our memory from functioning. We are aware of the contents of the measure passed by the Senate last session, consideration of which we are now asked to resume in this chamber. I think it proper that the Government should have prorogued Parliament, and at least made some pretence to observe that requirement of the Constitution which provides that -
There shall be a session of the Parliament once at least in every year, so that twelve months shall not intervene between the last sitting of the Parliament in one session and its first Bitting in the next session.
That provision has been honoured more in the breach than in the observance. It is now proposed to re-introduce the bill into this chamber as though this session were a continuation of a previous session. We are asked to take cognizance of the fact that the bill has been dealt with by the Senate, but as I was opposed to the bill previously introduced, I am not prepared to do anything to expedite itspassage now. That being soI am unwilling, to accede to the proposal of the Government that, although the measure has been expunged from the notice-paper and the ground cleared for a fresh beginning, we are to act as if no such things had happened.. We are to assume that the bill has already been considered by the Senate this session, whereas, in fact, it has not been so considered. I do not wish any of these assumptions to be made. Being opposed to the bill as it was passed by the Senate, I amalso opposed to any procedure in this chamber to expedite its passage in the way proposed. The Assistant Minister (Mr. Nock) should adopt the consequences of the conduct of the Government of which he is a member, and allow us to debate a new bill when the occasion arises.
Mr. GREGORY (Swan) [9.50).- I was opposed to this bill being introduced in this manner because I thought it quite contrary to the usual practice. But as I now find that the Standing Orders were amended to permit the proposed action to be taken I shall withdraw my opposition to the procedure.
.- During the last, week of the last session the, Leader of the Opposition (Mr. Curtin) protested to the Prime Minister (Mr. Menzies) against continuous sessions, and the Prime Minister gave a distinct undertaking to the Leader of the Opposition that Parliament would be prorogued before its next meeting. That was done and the notice-paper was cleared. Notwithstanding that distinct promise, the Government now proposes to re-introduce this, and I suppose other measures, by a new procedure which I regard as farcical. I suppose it is the policy of the Government to discard entirely those measures which it disliked and re-introduce in this way those measures which it wishes to proceed with. I presume the Government will terminate this session within’ a few weeks, and prevent honorable members from discussing fully the important proposals which are now before it. By restoring this measure to the notice-paper we are to assume that it has been debated by the Senate during this session, whereas we all know that that is not the case. I do not propose to assist the Government to restore this measure to the noticepaper merely in order to expedite business, when the Opposition was given a distinct undertaking by the Prime Minister that Parliament would be prorogued and the notice-paper would be cleared.
– Did he give that undertaking?
– Yes, and now he is going to dirty the notice-paper again by a subterfuge. Parliament was prorogued for a specific purpose, but now, after losing four by-elections and thus reducing its strength, it is using what remains of its majority to do something which it said it would not do.
.- I am sorry that the first, proposal submitted by the Assistant Minister (Mr; Nock) should have such a rough passage. I am sure that he does not, want to go back on the definite assurance given by the. Prime Minister that Parliament, would be prorogued and we would start with a clean sheet.
– That is not the undertaking, that was given.
– It was never anticipated that a measure passed by the Senate in the last session would be resurrected in this way. Had the measure been considered by this House during the last session numerous amendments would have been moved, but in order to enable the Government to open a new session with the pomp and splendour which it likes, a prorogation was agreed to and it was thought that the notice-paper would be cleared. This and other measures went overboard; but apparently a lifeline was attached to this bill which the Government is now endeavouring to save. The measure is very important in that it affects the whole system under which both Houses of this Parliament are elected. Probably the Government has been influenced by the results of the last general elections, when it found that it did not succeed to the degree anticipated under the system then in operation.
– A system which it established.
– Yes, and which it now wishes to alter. Having lost four byelections it considers that there is a possibility of defeat at the next general elections. Honorable members should be given every opportunity to discuss the provisions of the bill.
– That opportunity will be afforded.
– Yes, but the Senate has not considered the bill this session.
– This request has been made by the Senate.
– The fact remains that the Senate has not debated the measure this session. The Government is not treating the Opposition or the electors fairly in resurrecting the measure in this way. It is not keeping faith with the House. Therefore, we shall oppose the motion.
.- The charming smile of the Deputy Leader of the Opposition (Mr. Forde), the unusually broad grin which adorned the features of the honorable member for Werriwa (Mr. Lazzarini), and the complacent expression of the honorable member for Batman (Mr. Brennan) seem to suggest that those honorable gentlemen realize that there is no real substance in the objections which they have raised to the procedure proposed by the AssistantMinister (Mr. Nock). Tinder this procedure no injustice will be done, as no honorable member will thereby be asked to forgo any right to consider and debate this measure. It seems to me that the only honorable member who will be denied the opportunity to make a second-reading speech on the measure at this stage will be the Assistant
Minister. Every other honorable gentleman will have an opportunity to speak fully on the bill, because previously it had only reached the stage at which the former Minister in charge of External Territories (Mr. Perkins) had moved the second reading and made his second-reading speech, and the adjournment of the debate had been secured by the Leader of the Opposition (Mr. Curtin). I cannot believe that the opposition expressed to the procedure proposed is anything but synthetic.
– The honorable member for West Sydney (Mr. Beasley) desires to know what stage the bill had reached when the last session of Parliament concluded. The former Minister in charge of External Territories (Mr. Perkins) had moved that the bill be read a second time, and had made his second-reading speech. The Senate now requests that we proceed with the measure from the point at which we discontinued its consideration when the last session concluded. That request is in no way inconsistent with the undertaking given by the Prime Minister (Mr. Menzies). The decision as to whether the measure should be restored to the business-paper rests with honorable members. Everything that the honorable member for Gippsland (Mr. Paterson) has said is true. No valid objection can be raised to this procedure. It is patent that honorable members opposite merely wish to delay the proceedings.
Question put. The House divided. (Mr. Speaker - Hon. G. J. Bell.)
Majority . . 1
Question so resolved in the affirmative.
– I move -
That the bill be now read a second time.
I shall occupy the time of the House for a ‘brief period only. This is a short measure designed to implement the decision of the Government that war savings certificates should be free of Commonwealth income tax. As the House is aware, the Government, as part of its plan of war finance, has authorized the issue of war savings certificates, which are available in denominations of £1, £5, and £10 at the purchase price of 16s., £4, and £8 respectively. The object of the certificates is to provide a means whereby people with small incomes may assist the Government in financing the present war. It was evident, soon after the war commenced, that very many people would be unable to subscribe to war loans, but would be willing to place the small amounts that they could save at the disposal of the Government. It was considered that this was a very desirable source of funds to tap.
During the Great War similar certificates were issued and formed a valuable adjunct to the other means of raising funds to prosecute the war ; an amount of approximately £6,000,000 was subscribed in this way. We have made a good beginning on this occasion. Since the scheme was launched in the middle of March, we have had subscriptions to the amount of £543,728, representing 72,138 certificates, and it is expected that the scheme will become so popular that the amount contributed will exceed what was raised in the years of the last war.
Quite possibly in many cases it will be difficult for people to find in one amount the purchase price of a certificate. To meet the requirements of these cases, it has been decided to inaugurate a scheme of savings by groups, and war savings groups will be formed throughout the Commonwealth as rapidly as possible.
This scheme will enable people to come together in their home towns, or in their factories, offices, shops, and other places of employment, and form war savings groups. Members of a group will undertake to contribute a small amount regularly, say 6d. a week, or whatever other amount the contributor feels he or she can afford, until sufficient has been accumulated to enable the contributor to purchase a certificate. Payments by members of a group will be safeguarded by being placed under the control of trustees appointed by the contributors themselves. These trustees will see that contributions are collected regularly and that war savings certificates are issued when a member’s contribution reaches an amount sufficient to purchase a certificate.
War savings certificates issued during the Great War were not subject to taxation and the Government decided that a similar concession should be granted at the present time. The certificates are primarily for the wage-earner, and the Government considers that the money earned by the savings of these people, as represented by the increase of the value of the certificates from year to year until the maturity date, ought not to be taxed.
After the Great War, however, the Taxation of Loans Act 1923 made the interest on all loans raised in Australia after the 31st December, 1923, subject to Commonwealth income tax. It is, therefore, necessary to provide by legislation for freedom from income tax in respect of war savings certificates, and the most convenient way to do this is by an amendment of the Inscribed Stock Act. The amending bill is now before the House.
Although, the last Commonwealth loan of £18,000,000 was made subject to full Commonwealth taxation, and it is intended that future loans shall he likewise, the circumstances in which war savings certificates are issued make it desirable to exempt them from the decision to tax fully the income from Commonwealth securities. I am sure that the House will agree with this view.
Debate (on motion by Mr. Soullin) adjourned.
In Committee of Ways and Means:
– I move -
Division A. - Rate of Tax when Owner is not an Absentee.
For so rauch of the taxable value as does not exceed £75,000 the rate of tax per pound shall be One penny and one eighteen thousand seven hundred and fiftieth 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 eighteen thousand seven hundred and fiftieth of one penny.
For every pound of taxable value in excess of £75,000 the rate of tax shall be Ninepence.
The rate of tax for so much of the taxable value as does not exceed £75,000 may bo calculated from the following formula: - R = rate of tax in pence per pound. V = taxable value in pounds.
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 pel pound shall be One 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 bc Twopence and one eighteen thousand seven hundred and fiftieth 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 eighteen thousand seven hundred and fiftieth of one penny.
For every pound of taxable value in excess of £80,000 the rate of tax shall be Tenpence.
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: -
This resolution implements the Government’s proposal to increase the rates of land tax by restoring the rates that applied for the financial year 1926-27. The proposed rates are double those operating for the current financial year.
Division A relates to residents. Resi-dent taxpayers receive a deduction of £5,000 from the total unimproved value of the land owned by them. The rate of tax commences at Id. and l/18750ths of a penny, and increases uniformly by l/18750ths of a penny as the taxable value increases until the taxable value reaches £75,000. For every pound of taxable value in excess of £75,000 the rate of tax is a flat rate of 9d.
Division B applies to absentees. Absentees do not receive the deduction of £5,000 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 taxablevalue the rate of tax is a flat rate of one penny. When the taxable value exceeds £5,000, the rate of tax on the excess, up to £80,000, is 2d. and l/18750ths of a penny, increasing uniformly by l/18750ths of “a penny as the taxable value increases, until the taxable value reaches £80,000. For every pound of taxable value in excess of £80,000 the rate of tax is a flat rate of lOd.
Clause 2 of the resolution provides that land tax calculated in accordance with the formulas in Division A and Division B should he paid for the financial year beginning on the 1st July, 1940 and for all subsequent years. The increased rates of tax provided for are part of the Government’s war-time taxation proposals. It is considered that landowners, in common with other taxpaying sections of the community, should bear their fair share of the additional taxes, the imposition of which is necessary to” meet war-time expenditure.
It is estimated that the additional revenue to be obtained from the increase of the rates will be £1,500,000, of which £1,450,000 will, it is anticipated, be collected within the financial year.
The new rates are the same as those in force for the financial years 1914-15 to 1917-18 inclusive, and 1922-23 to 1926-27 inclusive, whilst they are 162/3 per cent, lower than the rates that applied for the financial years 1918-19 to 1921-22 inclusive. During the financial years 1927-28 to 1937-38 inclusive, the rates of tax were reduced on three occasions, whilst for the year 1938-39 and the current financial year, they were increased by 11. 1 per cent, over the immediately preceding year, bringing them to one half the rates in operation for the financial year 1926-27.
In Committee of Ways and Means:
– I move -
Thatin lieu of the rates of estate duty imposed by the Estate Duty Act 1914 there be imposed estate duty upon the estates of deceased persons dying on or after the date of the commencement of the act passed to give effect to this resolution at the following rates: -
Where the value for duty of the estate does not exceed Ten thousand pounds - Three pounds per centum.
Where the value for duty of the estate exceeds Ten thousand pounds but does not exceed Twenty thousand pounds - Three pounds per centum increasing by three one-hundredths of one pound per centum for every complete One hundred pounds by which that value exceeds Ten thousand pounds.
Where the value for duty of the estate exceeds Twenty thousand pounds but does not exceed One hundred thousand pounds - Six pounds per centum increasing by three two- hundredths of one pound per centum for every complete One hundred pounds by which the value exceeds Twenty thousand pounds.
Where the value for duty of the estate exceeds One hundred thousand pounds but is less than Five hundred thousand pounds - Eighteen pounds per centum increasing by one twohundredths of one pound per centum for every complete One thousand pounds by which the value exceeds One hundred thousand pounds.
Where the value for duty of the estate is Five hundred thousand pounds or more - Twenty pounds per centum.
The proposal in the resolution is to amend the rates of estate duty upon the estates of persons dying on or after the date on which the bill receives the Royal Assent. In the proposed new schedule,the rate of duty commences at 3 per cent, which will applytoany estate up to a value not exceeding £10,000. The value for duty of the estate will he ascertained, however, after taking into account the new statutory exemption, which is £2,000 in the case of estates passing to the widow, children or grandchildren of the deceased, and £1,000 in the case of estates passing to other persons. Both these exemptions decrease on a sliding scale. The former disappears when the estate is of a value of £12,400, whilst the latter disappears when the estate is of a value of £10,000. There is, it will be seen; a graduation in the amounts of duty payable over the whole range; but for the first £10,000, this graduation is due, not to a progressively increasing rate of duty, but to a progressively diminishing exemption, the result of which is to make a progressively increasing amount of duty payable. The progression of estates passing to the widow, children or grandchildren of the deceased has been illustrated in the table of the proposed estate duties circulated in the House on the 2nd May. Such estates of the value of £2,000 will pay no duty. Estates of £3,000 value will pay £33 duty, £5,000 will pay £99 duty, £8,000 will pay £198 duty and £10,000 will pay £264 duty. Having regard to the values of the estates quoted, the duty payable cannot be regarded as in any measure oppressive.
The basic rate of 3 per cent, commences to rise when the value of the estate exceeds £10,000. It increases by 3-100ths of 1 per cent, for every £100 by which the value of the estate exceeds £10,000 up to a value of £20,000, on which the rate will be 6 per cent. Thereafter it increases by 3-200ths of 1 per cent, for every £100 up to a value of £100,000, upon which the rate will be 18 per cent; Thereafter it increases by 2-100ths of 1 per cent, for every £1,000 up to a value of £500,000 where the maximum rate of 20 per cent, is reached.
The rate of duty imposed by the existing act commences at £1 per cent, when the estate exceeds £1,000 and does not exceed £2,000, and increases by an additional one-fifth of a pound for every £1,000 in value, or part thereof, in excess of the sum of £2,000 until it reaches its maximum of 15 per cent, for estates in excess of £71,000.
Owing to the provision in the existing assessment act that the rates of duty upon estates passing to the widow, children or grandchildren shall be two-thirds of the rates imposed, the maximum for such estates is only 10 per cent. The rates for such estates in ranges below that upon which the maximum rate is imposed are, of course, also only two-thirds of the rates otherwise payable on such estates.
The proposals correct existing anomalies and provide a much more equitable and scientific method of taxation than does the present law. The schedule that has been circulated for the information of honorable members shows the differences in tax under the present rates and the proposed rates on estates of various amounts from £1,000 to £1,000,000 passing to widow, children or grandchildren. Although the general effect of the bill is to increase the rates of duty, the effect of the new statutory exemption of £2,000 allowed in the case of estates passing to the widow, children or grandchildren is to exempt completely from duty estates up to £2,000 as against £1,000 under the present act, and to reduce the amount of duty at present payable on estates up to a value of £2,600.
Honorable members will appreciate that the taxation of the estates of deceased persons is recognized throughout the world as having one of the least disturbing effects on the body economic, provided, of course, that the taxation is not of a crippling nature. The present rates of duty are low, and the proposal of the Government will assist in adjusting the burden of war taxation over the widest possible field. Since the additional revenue estimated to be obtained from the increases of duty will amount to only about £500,000 for the financial year 1940-41, and £850,000 for a full assessment year, the increases of duty are eminently reasonable, and it cannotbe suggested that the proposed rates are unduly severe.
The following papers were presented : -
Air Force Act - Regulations amended - Statutory Rules 1940, No. 75.
Commonwealth Public Service Act - Regulations amended - Statutory Rules 1940, No. 74.
Customs Act - Proclamations prohibiting the exportation (except under certain conditions) of -
Bags, sacks, packs, bales and mats of hessian or jute; Hessians and other jute piece goods; Metal working machine tools; Petroleum products; Tetra-ethyl lead (dated 30th April, 1940).
Coal; Fuel Oil; Ships’ Stores (dated 15th April, 1940).
Ores and Concentrates; Minerals; Metals and Metal Manufactures; Other Metals; Drugs and Chemicals;
Miscellaneous (dated 23rd April, 1940).
Defence Act - Regulations amended - Statutory Rules 1940, No. 70.
Lands Acquisition Act - Land acquired for Postal purposes -
King Island, Tasmania.
National Security Act -
National Security (Apple and Pear Acquisition) Regulations - Order.
Regulations amended, &c. - Statutory Rules 1940, Nos. 71, 73, 77, 78, 79.
Northern Territory Acceptance Act and Northern Territory (Administration) Act - Brands Ordinance - Regulations amended.
Papua Act - Ordinance of 1940 - No. 2 - Postal Rates (Defence Forces).
House adjourned at 10.23 p.m.
The following answers to questions were circulated: -
Subsidized Ant Services.
Am Service Subsidies.
Profit earned by the operator from’ the use of his plant in outside activities is also taken into account in arriving at the amount of subsidy to be paid.
s asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following answers : -
d asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following answers : -
d asked the Minister representing the Minister for Trade and Customs, upon notice -
Will he supply the following information: -
The total imports from Great Britain during the year 1st July, 1938, to 30th June, 1939?
Totalduty collected on same? 3.Total imports from Great Britain during the year 1st July, 1939, to latest available date!
Total duty paid on same?
Total imports from foreign countries during the year 1st July, 1938, to 30th June, 1939?
Total duty paid on same?
Total imports from foreign countries from 1st July, 1939, to latest available date?
Total duty paid on same?
Total bullion shipped to various ports since 1st July, 1939, to latest available date
– The Minister for Trade and Customs has supplied the following information : -
n asked the Minister for the Army, upon notice’ -
– The answers to the honorable member’s questions are as follows : -
Fuel Supplies at Darwin.
n asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has suppliedthe following answers : -
The prices charged to the public for the fuel oil distributed by the CommonwealthRailways were: - 1st July, 1937, to 28th February, 1938- 4.16d. and 4.4d. per gallon. 1st March, 1938, to 28th February, 1940-
d asked the Minister representing the Minister in charge of War Service Homes, upon notice -
– The Minister in charge of War Service Homes has furnished the following answers . -
The Education Department of Tasmania has now agreed to acquire a further area of approximately 1 acre 0 roods 28 perches, including the four shop sites and the excision of this portion will necessitate the re-subdivision of part of the estate with the result that the number of building allotments remaining for disposal will be reduced to 43.
y.-On Thursday, the 2nd May, the honorable member for Bass (Mr. Barnard) asked the following questions, upon notice: -
I have now obtained the desired information and the answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 8 May 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19400508_reps_15_163/>.