16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) tookthe chair at 2.30 p.m., and read prayers.
– Ihave to announce that I have received from His Excellency the Governor-General, a return to the writ which His Excellency issued on the 17th October, 1940, for the election of a member to serve for the electoral division of Kalgoorlie, in the State of Western Australia, tofill the vacancy caused by the death of the Honorable Albert Ernest Green, and that by the endorsement on the writ it is certified that Herbert Victor Johnson has been elected in pursuance of the said writ.
Mr. Herbert Victor Johnson made and subscribed the oath of allegiance.
– by leave - As honorable members have doubtless heard, various items of news have been broadcast during to-day with respect to military operations in the Middle East. The Government is not yet in a position to state authoritatively whether Australian forces have been engaged, and if so to what extent; but I think it proper that
I should place before honorable members the news that has already arrived in relation to the matter from the Dominions Office.
Speaking in general terms about the British forces, and not about any particular force, the cables just received indicate that a successful attack was carried out by our forces in the western desert of Egypt on the 9th December last, 500 prisoners and material being captured on the first objective. The enemy reaction was reported to be slight. One Italian general was killed, and the second in command was captured. Various places have been captured, and are being “ mopped “ up. At the time of the sending of this cable, it was anticipated that the number of prisoners might be considerably larger than had been disclosed. It was further indicated that, at the time of the sending of the cable or the gathering of the news, our armoured forces were at a point astride the road 12 miles east of Bug Bug. There was very little enemy air activity, and operations were continuing. The news conveyed in this cable, taken in conjunction with broadcast news of perhaps a more speculative character, would appear to indicate that a very substantial victory has attended the operations of British arms in the Middle East.
– Did not the Prime Minister say on a previous occasion that before Australian troops would be engaged in an action in the Middle East, the Commonwealth Government would be consulted, and its permission obtained ? In his statement this afternoon, the right honorable gentleman indicated that he was not aware whether Australian troops were engaged. Could it be possible that Australian troops are at present engaged in the battle and that the Government has not yet been notified of the fact?
– What I previously told the House, and what I take leave to repeat, was that the arrangement between the Commonwealth and the British Governments was, and ia, that Australian troops will not be placed in any theatre of war without reference to this Government. That, of course, is eminently proper; but once Australian troops are in a theatre of war, as those in the western desert have been for some time, it would appear very strange indeed if, before they could be engaged, consultations had to take place between the two Governments.
Incidence on Shearers.
– Have representations been made recently to the Treasurer with regard to the incidence of income tax on shearers and other seasonal workers, and to the effect which the weekly levy will have upon their wages? If so, has the ion ora bie gentleman determined what method shall be adopted for the collection of this tax?
– The Commissioner of Taxation has this matter under review, and it will be attended to in the instalment plan that is shortly to be brought down.
– Some- time ago it was found that steel towers for radio beacons had proved unsatisfactory, and ‘it was decided to replace them with wooden towers. Can the Minister for Air give’ me any information as to what progress has been made with the replacement of steel towers by wooden towers ?
– I am not able to give to the honorable member specific information as to every case in which wooden towers have been substituted for steel towers. I understand, broadly, that in every principal airport the erection of wooden towers has been commenced, and that in fact the work has been completed at every airport with the exception of those at Western Junction and Hobart. Both of these will shortly be completed, and the original plan will then be in full operation.
– In view of the serious shipping losses off the Australian coast, is the Minister for Air satisfied with the present aerial reconnaissance work of the Royal Australian Air Force? If not, will the honorable gentleman consider the extension of these reconnaissances, even though that may entail further curtailment of commercial air services in Australia?
– Every one concerned would be pleased if our seaward aerial patrols could be more widespread than they are at present. I am satisfied that in the circumstances the best use is being made of the aircraft of a suitable character which is available for seaward patrol. That is to be interpreted as indicating that the reconnaissance area is much wider than is generally known and believed. The honorable member also asked whether it would be advisable to impress more civil aviation aircraft for reconnaissance work of this kind. More use has been made of civil aircraft for this purpose than is generally known, and consideration is being given to the possibility of making even wider use of them.
Trial by Court Martial.
– Is the Minister for Air yet able to make a report to the House on the result of his investigations of the discharge from the Air Force of Aircraftman Reed for having made a com-; plaint to a Minister of the Crown regard-, ing the working of the department f
– I am not yet in a position to make a statement on every aspect of the matter, but I am able to give to “the honorable member some further’ information. I find on inquiry that this aircraftman wrote a letter to a Minister. That letter was referred to the office of the then Minister for Air, my predecessor, who, in turn, asked the appropriate officers of his department to report upon it. For the purpose of obtaining full information, the’ letter was referred through the usual channels to the officer commanding the aircraftman’s unit. The officer, discerning a breach of Air Force regulations in the writing of the letter, charged the writer. Then, the accused having been charged under certain regulations, the fact was properly brought to. his notice that he could elect to be dealt with summarily, or be tried b.y court martial, and he chose the latter course. The finding of the court martial is known.
– ‘What was the personnel of the court martial ?
-I cannot say, but if the honorable, member is. interested, I shall supply him with the names, later. I have no doubt that the members of the court were selected in the ordinary way. I am still trying to find out how an inquiry, originating in a Minister’s office, should have concluded in a man being charged, without the knowledge of the Minister or of any one in his office. I think it will be sufficient for me to say that I do not regard such a state of affairs as satisfactory. It is not a matter which I need bring back to this House again, but I propose to take further steps in regard to it. The honorable member for Barker (Mr. Archie Cameron) yesterday asked me how it happened that a man had be.en charged before a court martial without the knowledge or- consent of myself as Minister. I find upon inquiry that it is not within the province of any Service Minister to order or to deny a court martial. Such matters are determined within the Service according to certain regulations.
– Under whose warrant or authority was the court martial in this case constituted or convened? What was the status of the court, and who confirmed its findings, and the sentence it imposed? Since the Minister has examined the regulations in the Library, will he explain who acts for His Excellency the Governor-General in these matters as laid down in the Defence Act?
-I have not studied the regulations, but I asked the appropriate officers of my department to inform me on the subject. I am advised that the source of authority in the case of all courts martial is the King, who delegates his authority in Australia to the Governor-General, who, in turn, acting within his competence, delegates his authority to initiate courts martial to certain other persons. In this particular case, it was the officer commanding the Central Area who, as the person to whom the Governor-General had delegated his authority, authorized the holding of the court martial. I am not able to. say what authority confirmed the finding of the court, but I understand that it was the Air Board, or some high authority in the Service. I shall find out who it was, and let the honorable member know.
– Will the Prime Minister say whether tho Governor-General, to whom certain power
Ls delegated by His Majesty the King, is able, as in a court martial, to take certain action in respect of the rights and liberties of Australian citizens without the advice and consent of his responsible Ministers?
– If the honorable member will furnish me with a copy of the question, I shall supply an answer.
– In view of the obviously harsh treatment meted out to Aircraftman Heed for the minor offence of writing to Ministers and members of Parliament, will the Prime Minister give immediate instructions that no other members of the Royal Australian Air Force in Australia shall be courtmartialled for bringing their grievances under the notice of Ministers or members of Parliament?
– So broad a rule cannot be laid down. I have had some experience of matters of this kind, and my attention has occasionally been directed to the fact that some breach of service rules has been involved in a communication to me. My own practice has always been that where the complaint touches on general matters of importance, one can scarcely deny to the man, because he is a soldier, the right to have his complaint ventilated. In such circumstances I have waived any such proceedings against him. If, however, the complaint relates to a purely individual matter which can be dealt with through the proper military channels, my own practice has been to remit it to the soldier so that he may adopt the proper procedure.
– Will the Prime Minister instruct his Ministers not to be unduly influenced by people who, for political reasons, appear to be trying to undermine the authority of commanding officers of our armed forces, and thereby destroy the magnificent battle discipline for which the Australian forces have a world-wide reputation ?
– I can assure my friend that I am always endeavouring to persuade my Ministers not to be unduly influenced by anybody but myself.
– In view of the farreaching indignation caused by the highhanded action of certain officers of the Royal Australian Air Force in bringing about the discharge of Aircraftman Reed for having written a letter to a Cabinet Minister, will the Prime Minister give an undertaking that he will reconsider the whole question with a view to the re-admission of Aircraftman Reed to the Royal Australian Air Force, and to bringing the control of that force more directly under the Minister?
– I am not prepared to give any such undertaking. I have confidence in the administration of the Department of Air by my colleague the Minister, and I shall leave it to him.
– Is the Treasurer able to say what flat rate sales tax would be required to raise the same amount of money as that proposed to be raised under the sales tax proposals of the budget?
– It would be useless to answer that question. The Government has decided upon differential rates, and the necessary measures are already before the House.
– Is it a fact that the oil cartel has refused to supply Dunlop and Company after to-day unless that firm pays £5,000 to the cartel? Is it also a fact that this firm supplies the Commonwealth Government and the Government of New South Wales with petrol at lid. a gallon less than the price charged by the major oil companies? Is it a fact that the Premier of New South Wales, Mr. Mair, made representations to have Dunlop and Company excluded from the cartel to the extent to which it supplied the State Government, and that that proposal was rejected, although it applies in respect of petrol supplied to the Commonwealth Government? If these are facts, will the Minister for Supply and Development issue an immediate instruction to the oil cartel to withhold action until the merits of the case have been examined, and will ha give an assurance that the Government of New South Wales will be afforded the same opportunity to effect savings on the purchase of petrol as are enjoyed by the: Commonwealth Government?
– In view of the suggestions implicit in the honorable member’s question, I shall discuss the matter immediately with the Minister for Supply and Development, ascertain what the facts are, and see what action is appropriate. I shall then furnish the honorable member with a reply.
– Has the attention of the Prime Minister been drawn to the fact that 67,000 school children are running loose in the streets of London during the day without education, and spending the nights in air-raid shelters? Will he communicate with the Government of the United Kingdom and, possibly, with the Government of the United States of America also, with a view to having those children conveyed to safety in Australia or elsewhere?
– I shall make inquiries into the matter.
– I have seen a re port in the press to the effect that the Prime Minister intends to travel by air to Western Australia about the end of this week. Will the same facilities be afforded members of the Labour party who desire to visit Western Australia to take part in the Swan by-election campaign?
– He would be a wiser man than I profess tobe who could say whether I shall be leaving, by air or otherwise, for Western Australia at the end of this week. That will depend entirely upon the progress achieved in disposing of the business before the House. Whether I travel by air or otherwise will depend on circumstances, and whether any privilege should be claimed in respect of such travel I do not offer to say. My own practice, when undertaking election campaigning, is to bear the cost of travel myself.
– Has the Minister representing the Minister for the Interior yet obtained replies to questions which I asked on two occasions last week about difficulties and delays in securing bookings on the trans-Australian railway until next year, and the alleged shortage of locomotives and rolling-stock? If he has not yet obtained the answers, can he offer any explanation of the delays, other than the unsatisfactory state of affairs which has been allowed to develop by the administration ?
– The information which is sought by the honorable member is being obtained.
– Has the Minister for Labour and National Service received a request to intervene in the strike at Whyalla ? If so, will he inform me whether any progress towards a settlement has been made ?
– To date, I have received no request to intervene in the dispute at Whyalla. The general secretary of the Ironworkers’ Union communicated to me yesterday three grounds on which the men were prepared to resume work. The dispute occurred as the result of the dismissal of a man named McLean, an ironworkers’ assistant, and it was suggested to me that the men would resume work if an inquiry into the circumstances of the dismissal were commenced on the same day. A further condition was that McLean should be reinstated pending the decision of the inquiry. I conveyed those conditions to the management of the company, which promised to discuss them with its industrial officer, and to communicate with me later. I understand that the industrial officer, who was in Adelaide at the time, will get in touch with me this afternoon. Other than that, I have no information about the matter.
– The Advisory War Council recommended an immediate increase of invalid and old-age pensions by 1s. a week, with subsequent automatic adjustments in accordance with fluctuations of the cost of living. Will the Prime Minister inform me whether an increase in addition to the shilling will be granted immediately on account of the increased cost of living? Is it proposed to adopt the index figure for the prices of commodities which ruled at the outbreak of war, or will the automatic adjustments be based on the index figure ruling at the date on which the pensioners receive the increase of1s. a week?
– The arrangement, which was reached by the War Council, was that the adjustment should be made on the basis of the index figure ruling at the present time, and not on the basis of the index figure ruling at the beginning of the war. The reason was that the sum of 21s. represents not only an increase to the cost of living since the outbreak of war, but also something more, and consequently when 21s. was adopted it was decided to base it on the cost of living at the present time, and to make future adjustments on that basis.
Motion (by Mr. Menzies) agreed to -
That the House, at its rising, adjourn until 10.30 a.m. to-morrow.
Motion (by Mr. Menzies) - by leave - agreed to-
That Standing Order No. 70 - Eleven o’clock rule - be suspended for the remainder of this month.
– Has the attention of the Minister for the Army been drawn to an announcement in the press to-day of a 7-point programme, which purports to represent his views on the future control and administration of his department? If the paragraph be correct, will the Minister take action to ensure that matters of such moment are not first announced in the press while Parliament is in session ?
– The administrative organization of the Department of the Army has, of course, been engaging my attention. I am not responsible for the statement which appeared in the press, although it does substantially, with certain modifications, represent opinions which I have reached and, in part, have implemented. My practice has always been to mention in Parliament any general statement which I am of the opinion should be made to the House on decisions of public importance, and to that practice I shall adhere.
– A complaint has been made by poultry-farmers and others in Canberra about the extortionate price of 7s. a bushel which they have to pay for wheat. Will the Minister for Commerce say whether it is a fact that all wheat grown in the Canberra district is, on the instructions of the Australian Wheat Board, shipped to Sydney, whilst wheat produced in Carcoar, and. in the far west of New South Wales, is sent here to supply the requirements of poultryfarmers in the Australian Capital Territory ?
– I shall inquire into the origin of the wheat which is used in Canberra, and inform the honorable member.
Transport by Road.
– Is the Minister for the Army aware that, although there are wharfs within a few hundred yards of the aeroplane assembly park of the International Harvester Works at Geelong, large consignments of parts are conveyed by road from. Melbourne to the place of assembly? Will he arrange to eliminate the wasteful use of petrol which is involved in this unnecessary kind of transport ?
– The answer to the first part of the honorable member’s question is, “ No “. As to the second part, I. shall have investigations made and convey my reply to the honorable member.
– Recently the Government decided to make available the sum of £1,000,000 for the relief of necessitous wheat-growers in drought-stricken areas. Will the Treasurer discuss with the members of the Cabinet whether this money could be equitably made available to all primary producers, including dairyfarmers who have suffered during the present drought?
– The grant of £1,000,000 is being made for the relief of distressed wheat-growers and that policy will be adhered to.
– In connexion with the Christmas leave to be granted to members of the Australian Imperial Force in Australia, will the Minister for the Army make efforts to ensure that accommodation is made available on boats for Tasmanian soldiers on the mainland who are desirous of visiting their homes during the Christmas season?
– I shall be glad to give consideration to the request, and to convey a reply to the honorable member.
– Is the Minister for Commerce giving consideration to the fullest possible use of shipping in Australia, and also to the storage of primary products which cannot be shipped abroad because of the shortage of shipping space ?
– On Friday last, representatives of the various shipping interests in Australia conferred in regard to the shortage of shipping. The problem of storage is engaging the attention of the various committees and boards set up to control the export of primary products. They are very much concerned in the matter, and various projects are being carried out.
Consideration resumed from the 9th December (vide page 632), on motion by Mr. Fadden -
That the first item in the Estimates under Division I. - The Senate - namely Salaries and allowances, £8,176 “, be agreed to.
– The debate on the first item of the Estimates has covered a very wide field, and much of the criticism from both sides of the committee has been directed towards the methods which the Government intends to employ in order to raise sufficient revenue to meet the rising costs of war and the other expenditure necessary for the conduct of the Government’s affairs. Although the criticism in this committee has been very marked, I think: it is safe to say that the criticism outside has been much more violent and that consternation exists in the ranks of the people who will find the- burdens of increased taxes very difficult to carry. Very grave responsibility must necessarily rest upon us all in dealing with this subject, and it is incumbent on us in criticizing the budget to make constructive suggestions and to offer alternative means of obtaining the necessary revenue to enable Australia to play its part in bringing the war to a successful conclusion. The supplementary legislation that is to follow the budget defines fairly clearly the sources to be tapped in order to obtain this increased revenue. Members of the Opposition have always been strongly opposed to the very steep impositions on the earnings of those in the lower and middle income groups. It will be agreed that this view is held, not only by what might be termed our own direct supporters, but also by the business community as a whole. In recent years people have come to realize that business in this country cannot be successfully conducted unless purchasing power is available in the hands of the masses. Consequently it is feared that the inroads to be made upon the earnings of the people on this occasion will prove so harsh as to have a detrimental effect upon the community as a whole, and, in short, impose upon Australia a form of deflation which will bring about an effect the very opposite from that which the Government hopes to obtain. This matter is so serious that the Opposition has endeavoured, by every process available to it, to get the Government to alter its proposed course of action. It is not for me to disclose in detail the nature of the discussions that have been proceeding for some weeks, in certain quarters, on this subject ; but I think that my colleagues on the Advisory War Council would probably agree with me that the Government could well have given more favorable consideration to views that were submitted to it in Melbourne several weeks ago with the object of spreading the burden of taxation more evenly over the community. Our desire is that the main weight of the burden shall fall upon the shoulders of those best able to bear it. However, the Government no doubt feels that it is in duty bound to stand by its financial programme. At any rate, for some time it remained adamant, and refused to make any concession to our views.
– More discussion in Parliament and less discussion in private would probably be in the public interest.
– No doubt the Opposition was represented at the discussions to which I have referred, because the majority of its members wished it to be represented. As to how long the present procedure will continue, I can only say that that will depend upon the parties concerned,
We have been, greatly exercised in our minds by the effect of the Government’s proposals upon incomes in the lower and middle ranges. Reference to the schedules circulated to honorable members will show that the tax falls very heavily on those incomes. This must inevitably have the effect of lowering the standards of living of the people, and of impairing their capacity to meet commitments into which they have already entered. It is proposed, for example, to obtain about £2,500,000 from people in the low income range, and something more than E8.000,000 from people in the middle income range, making a total of about £13,000,000 from these groups during six months of the financial year, or £26,000,000 during a full year. That is a very large sum of money to take from people of those classes. Moreover, the diverting of this money into the coffers of the Government, must necessarily mean that it will not be available for the purchase of the necessaries of life or the amenities which such people regard as their right. Retail businesses will therefore suffer severely. It is quite clear to me that the Government’s policy will cause a slackening of business and a consequent slackening of employment. So we shall be moving once again in a vicious circle, particularly in New South Wales.
It should be practicable for the Government to obtain the money it needs from other sources. The basis of our economy should not be undermined, by such heavy- taxation on these lower income groups. I am well aware from my personal contact » with the people in the low and middle income ranges that they are looking to the future with grave misgiving. They cannot see how it will be possible for them to meet their commitments and maintain anything near the standard of their family life. During the last two weeks many statements published in the press have revealed the dismay which the Government’s proposals have caused to people in the low and middle income ranges. When we turn our attention to the particular commitments that have been entered into by these people we must immediately, for instance, ask ourselves whether it will be possible for some of them to continue to educate their children on the present basis., All honorable members will, I am sure, agree that it is desirable that the young people of our community should be afforded the best possible education, but if the earnings from which the cost of education has hitherto been met be depleted “by heavy taxation, less will be available for educational purposes. Some honorable members may say that the children could be educated in establishments, where fees are not payable, but that does not get over the fact that many people have considered that in view of their financial position, they were justified in providing for their children a higher standard of education by their enrolment in technical and other higher educational institutions. It will be unfortunate if the work of such institutions is seriously hampered by the Government’s budget proposals. Any curtailment of expenditure on education must, in the long run, be detrimental to both community and family life. Many of my own acquaintances are fearful, as one illustration, that they may not , De able to continue their present scale1 of expenditure, on education..
Another important commitment with many people has relation to the purchase of their homes. The inroads which the
Government is proposing to make on low and middle-range earnings, will undoubtedly affect the capacity of people to continue to meet such payments. Some of them, I have no doubt, will have to forego entirely all such payments, with the prospect of serious loss, to themselves.
I have referred to only two avenues of expenditure out of many that could be brought under notice, but these two are of sufficient importance to justify our request that the Government should review its proposals in respect of low and middle range incomes, with the object of raising larger amounts from other sources. It may be asked what other sources may be tapped. I suggest, without any hesitation, that the Government could obtain much more revenue than it is proposing to get from the war-time profits tax. A committee of honorable members is at present investigating this subject. The bill which the Government introduced many months ago on this subject was seriously deficient in certain respects. Even now it is intended that only between £4,000,000 and £5,000,000 shall be raised from the proposed war-time profits tax. A good deal of discussion is proceeding at the moment on this issue. Many people consider that the tax could be levied in a much more balanced fashion than that proposed by the Government, in order that all profits in excess of a certain percentage may be drawn upon equitably. It has been suggested that a fiat rate tax of ls. or 2s. in the £1 should be imposed. Many persons competent to express an opinion believe that companies earning substantial profits could well afford to pay a war-time profits tax of 2s. in the £1, in order to assist, to meet the cost of the war, and other pressing needs of the Government. It has been stated that of the aggregate profits that are being made in Australia by public companies, at least £100,000,000 could be taxed without any hardship at all to the companies concerned and an additional £3,000,000 could be obtained from this source. During recent years the profit level of public companies has been steadily rising. One of the Sunday newspapers of Sydney this week published a report of the affairs of Mauri Brothers and Thomson Limited which gives an indication of the high rate of profits made by trading concerns -
Mauri Brothers and Thomson maintains its record. Shareholders again received 15 per cent., and for the fifth consecutive year. This company appears to thrive under trade difficulties. The present war has not even slowed up its profit earning capacity. On the contrary some of the figures indicate even greater expansion of profit making interests. Net earnings for the year, after snipping off £11,110 for depreciation, and an unspecified amount for taxation, are set out at £92,579. The directors were able to pay the dividend, £58,173, with the greatest of ease and still carry £34,000 to the box wherein reserves are stacked, which now holds £352,000.
This firm is of no great importance in the field of big business, as we understand the term, but the facts I have quoted prove that great profits are available for taxation by the Commonwealth for war purposes. A heavier burden of taxation could be carried by big companies with greater ease than the small income earners, without affecting the economic security of the nation. The low income earners have a very sound argument with which to justify their objections to the proposed new taxes; it is that the Commonwealth Government should have due regard for the sacrifices that they have made in the last nine or ten years. Many of them suffered considerably from the effects of the depression of 1929-31, which was brought about by circumstances over which they had no control. They also suffered in order to assist the economic recovery of the nation in the years immediately after the depression. Sacrifices by these people cannot be measured justly in the terms of sacrifices made by the richer sections of the community. A deduction of ls. a week from the income of a basic-wage earner is a greater loss to bini than is a deduction of £1 a week to a wealthy man. These facts should help the Government to reach a better appreciation of the living conditions of the poorer people and explain their feeling of resentment of the proposed impositions. The burden which they are asked to carry might well be lightened by the collection of heavier taxes from big business concerns, which could pay the imposts without undue suffering. In the final analysis the people in the higher income range will benefit more from the success of our armed forces than will persons in the lower and middle incomes. I do not suggest that the people on lower incomes are less concerned about the result of the conflict than are others, but we must remember what happened during and after the war of 1914-18. Many of the poorer people took an active part in that struggle, and afterwards they had to make further sacrifices in order to pay for post-war reconstruction. Many of those who did not take such an active part, the captains of industry, emerged from the conflict much richer than they were before the war. The memory of those years is still fresh in the minds of hundreds of thousands of Australians, and it is not possible to convince them that the money which they are to be asked to contribute to our war effort cannot be obtained from other sources. They are justified in demanding that they be not called upon to pay more than they have paid in the past. The working class is the pivot around which our national economy revolves, and it is not fair that the standards of living of the workers should be impaired by means of the deflationary processes proposed in the budget.
I draw attention to other sources from which the Government can obtain special war-time revenue. Much more can be obtained from the company tax than is proposed. I hope that, as the result of discussions in this committee, the Parliament will agree to shift the burden from the lower income earners to those persons and institutions to which I have referred. It is still possible for this Parliament to remove the deflationary proposals from the budget and preserve equilibrium in our national finances. Another potential source of new revenue is the estate duty. This suggestion has been made before, but the time is opportune to renew it. More revenue could be obtained by means of higher taxes on the estates of deceased persons, particularly of those who were in the high income group. State duties on these estates are high, but they are not so high that it would be impossible for the Commonwealth to secure an additional £500,000 per annum from this source. The Government should not be afraid to take action in this connexion. Another suggestion, which may not be popular among honorable members sup porting the Government, is that the land tax be increased. Sixty-five per cent, of this tax is paid by the owners of city properties. I have often heard it said in this chamber that the land tax bears too heavily on struggling farmers. but an examination of the facts does not substantiate that claim. Property up to an unimproved value of £5,000 is not subject to the tax and I should be happy to increase the exemption, if it were proved that small land-holders could not afford to pay the impost. But big land-holders can afford to pay a much higher tax I may be told that the tax has been increased in recent years. But, for six or seven years, governments of the same political colour as the present Government had gradually reduced the rate of land tax by 50 per cent. Those progressive reductions meant savings of thousands and thousands of pounds to big retail business establishments in Sydney and other capital cities. An examination of their balance-sheets will substantiate that statement. This was what might be called a free gift to firms which could easily have continued to bear the full burden. Taxpayers in the lower and middle income groups feel that the nation’s financial resources could have been strengthened sufficiently to enable our war commitments to be met, if these persons had been made to carry an appropriate share of the burden, from which for many years they had been allowed to escape. They are acutely alive to the fact that, concurrently with the reduction of the land tax by 50 per cent., they have had to struggle to maintain themselves and their families. Many of them have been unemployed or have been employed only part-time on relief work. Yet, having reached what may be described as the end of the road in the crisis through which we are passing, the Government, needing to raise £186,000,000 for defence expenditure, further burdens those who have never really had their heads above water in the last ten or twelve years. The land tax could be restored to the level of 1920-21. The greater part of it is collected from retail firms which have been paying hig dividends, such as Mauri Brothers and Thompson. These could readily carry an additional burden in this time of war. The protection which this budget secures for me and my family extends also to the material assets of the rich. If, by our air defence organization, the bombing of our cities can be prevented, there will be a saving not only of lives, but also of the property of these hig firms, and they ought to be willing to pay what may be regarded as a premium for that insurance. There is scope for the collection of an appreciable additional amount in the form of land tax.
– Bombs would fall also on those who have an exemption of £5,000.
– I have admitted that ; the; wealthy should make a special payment, for the safeguarding of their property and goods.
The next matter to which I shall refer is the exemption from tax of certain Commonwealth securities. I may be told that, a contract with respect to these was entered into, and that, therefore, action should not be taken which would cause tha Government to be accused of repudiation.
– What about future loans?
– I could argue at length in regard to the effect which repudiation might have on the money market when loans had to be floated in the future. We are told that the financial system is a remarkably delicate instrument, and that the sanctity of a contract embodying a financial arrangement must always be treated as inviolate, but the sanctity of contracts made with those who are in the lower and middle income groups is regarded in an altogether different light. It has always appeared to me that one principle has been adopted with respect to one section of the community, namely, those who gamble in finance, and quite a different principle with respect to other sections. I am prepared to deal with the problem in as practical a way as possible. I would not ask the Government to indulge in repudiation in relation to the contract that has been made with certain bond-holders, but at least it should endeavour to obtain the voluntary conversion of those loansso that income from such holdings might be placed on the same tax able basis as every other asset or investment. What right have Commonwealth bond-holders to remain on the tax level fixed in 1931, seeing that since that date other income earners have had their taxes increased by up to 40 or 50 per cent.? What claim have they to special treatment, compared with the men who have invested in property, in business, or in manufacturing operations ?
– Their return is lower than is obtained from good indus-trial investments.
– In some cases it may be lower. The point that I make is, that they hold a gilt-edged security which does not involve them in any risk. I have always maintained that the man whose investments are in the field of development, either in business or in manufacturing operations, should be encouraged, because he takes the risk, frequently for a period of years, of having little or no return, and is subject to all the dangers which trade has to meet by reason of the varying conditions of the markets in which he operates. Those who deal in government securities are not subject to similar conditions.
– It is a pity that it wa3 not thought advisable in 1930 or 1931 to limit the exemption to peacetime.
– -That is true; it would have been a just and reasonable basis on which to deal with these bondholders. Some of the holders of these securities are in a big way. While some men are giving their lives, and others are giving all that they possess in the workshops or in the development of this country, we are entitled to say to the Government, as the honorable member for Gippsland (Mr. Paterson) has rightly suggested, that the situation to-day is entirely different from what it was when these contracts: were made. The whole world has changed. Australia now has its .back to the wall. What was done in 1931 cannot prevail in 1941. It is our duty to place on the shoulders of all the burden of meeting the cost of the war. The loyalty of these bond-holders might very well be tested by their being asked to give to the Government the right to make conversions of their holdings, so that they might have an opportunity to share the burden that is being placed on the rest of the community.
– Tie majority of them have only moderate means.
– I realize that many persons of moderate means have invested in these securities, but the greater number is, undoubtedly, in the more well-to-do classes. The following table gives the amount of tax paid by persons in different income groups, including those who have income from Comonwealth securities that are free from Commonwealth taxes as well as from other sources, and those whose income is derived solely from personal exertion : -
The margin is too great, and it should not be maintained, because we are facing a situation the like of which we have not faced previously in our history. What the future holds in store in this field I do not know, but I believe that this is a source of revenue which should be tapped in a practical way. The Government should approach those who hold these securities, and frankly put them on their mettle to prove whether they desire to serve their country. I predict that the majority of them would be willing to meet the wishes of the Government.
Another source that might well he tapped is that covered by the petrol tax. The agreement between the Commonwealth and the States with respect to the distribution of the amount collected by means of this tax is susceptible of alteration. This money was largely ear-marked for the construction of roads, the principal object toeing to provide employment for a large number of unskilled workers whom the States had had to carry for a number of years. This was a very laudable object, with which no one will disagree. But circumstances are daily arising in connexion with even the building of roads which bring the matter more and more within the realm of defence organization. Week after week, in each of the -States, numbers of men who were formerly employed on this work are being transferred to munitions establishments and other defence activities. At least, a portion of the money now being collected .by means of the petrol tax could be used .’by the Commonwealth to provide employment which would have a distinct defence value, and at the same time meet the desires and the interests of the States, because they would be relieved of the burden of having to carry these men when they were unemployed. Our budgetary position would thus be considerably strengthened. It is true that the matter is covered by agreement with the States, but- we cannot afford to “ sit pat “ on such agreements at a time like this. The main responsibility for the finances of Australia rests now upon the Commonwealth, and adjustments must therefore be made with the States when necessary. We are rapidly approaching a position in which the Australian people will demand, not seven budgets, but only one, in order to avoid waste and overlapping. Unfortunately, there seems to be considerable reluctance to tackle this problem, but drastic alterations will have to be made, and it would he well to begin now.
Some time ago, a duty was imposed upon motor-car parts in order to build up a fund for the encouragement of the manufacture of motor-car engines in Australia. The Labour party supported that proposal because it wanted to foster an Australian industry. However, since then our expanding defence needs have made it necessary to manufacture internal com’bustion engines in Australia for use in aircraft, so that the industry has now become established, even though the need for motor-car engines is admittedly not so great as it was. A considerable amount of money, probably about £1,250,000, has already been collected from this special duty ; unfortunately it was not paid into a special trust account, but into general revenue. One might say a good deal in condemnation of the Government for having dealt with the money in this way, but it is not of much use complaining about what has happened in the past; we must look at things as they are.
Section 44. of the Commonwealth Income Tax Act excludes from tax dividends paid by companies not carrying on business in Australia. The idea is that if a company pays tax on dividend* to some other government, it is not taxable here, but the act does not specify the amount of tax that must be paid elsewhere in order to qualify the company for this exemption. Evidently, the payment of even the smallest amount is sufficient. Some of the companies wh’ich come under this heading are Morris Hedstrom Proprietary Limited, H. Jones and Company Proprietary Limited, the Tasmanian jam company, Burns Philp (South Seas) Limited, Emperor Gold Mines, and New Guinea Gold. Others are those tin-mining companies operating in the East, amongst them such as Kampang, Rawang La rut, and Assam Tin. [Leave to continue given.] Practically all of the shares of these companies are held by residents of Australia’, but they are not liable to any tax. The shareholders enjoy the amenities of residence in Australia, and probably the capital with which they bought the shares was in the first place acquired in Australia, yet they pay no tax on the income derived. Whatever reasons may have existed in. the first place for excluding such income from taxation, those reasons no longer apply. Section 44 (2) b excludes dividends paid wholly and exclusively from income derived from sources outside Australia. Many Australian companies have markets in the Pacific Islands, in the East, and in New Zealand, but dividends paid from profits derived from those markets are wholly exempt. Some of the companies concerned are the Colonial Sugar Refining Company Limited, from its Fiji subsidiary; H. Jones and Company Proprietary Limited, from its island and eastern jam trade; Berlei Limited, from its New Zealand and islands trade; Broken Hill Proprietary Company Limited, from its overseas trade; and Burns Philp and Company Proprietary Limited, from its subsidiary known as Burns Philp (South Seas) Limited. Usually about 50 per cent, of the dividend of the Colonial Sugar Refining Company Limited is excluded as non-taxable. In the case of H. Jones and Company Proprietary Limited, 40 per cent, of the dividend is so excluded. Therefore, there is still a large volume of dividend income not subject to any tax at all. I do not think that any honorable member, no matter to what party he belongs, wants to see such companies as the Colonial Sugar Refining Company Limited and H. Jones and Company Proprietary Limited placed in a privileged position. The general consensus of opinion is that all those who are in a position to pay should be forced to pay.
Section 44 (2) c excludes dividends “ paid out of exempt income derived by a company from the working of a mining property in Australia or in the Territory of New Guinea to the extent to which the dividends are paid out of such income “. All dividends from Australian gold-mining companies are wholly exempt, and such companies as New Guinea Gold are also covered by the section. There seems no good reason to exempt gold-mining dividends, particularly as many of the shareholders are absentees. The Great Boulder Mine, for instance, is London-controlled.
Under section 45 of the act, Commonwealth bond interest is taxed only at the rate which would have applied to income derived by a taxpayer had he earned it in 1930. Thus, he obtains the benefit of the” low 1930 rate. This section extends the benefit of the rate to the proportion of the dividends paid from Commonwealth loan interest. Some of the banks pay from 20 per cent, to 40 per cent, of their dividends from Commonwealth loan interest. Thus, the Queensland National Bank pays 39 per cent, from this source, the Commercial Bank 22 per cent, and the National Bank 24 per cent. Insurance companies, trustee companies and shipping companies pay a considerable proportion of their dividends from Commonwealth loan interest, and all these dividends are taxed at the low rate prevailing in 1930. When the Treasurer was introducing the Income Tax Assessment Bill No. 2, he touched on the subject of rebates, and admitted that there was an anomaly in connexion with the rebate of 2s. in the £1 allowable on certain dividends. At present, the tax rebate is allowed at the rate of 2s. in the £1 on the whole of the dividend received, resulting in a loss of revenue amounting to 8d. in the £1 on that part of the dividend paid out of Commonwealth loan interest. It is now proposed to correct this anomaly. Thus, over a period of years, a considerable section of taxpayers has been receiving a concession to the value of 8d. in the £1 from Commonwealth revenue as an absolute gift. “We know that there are all sorts of loopholes by which taxpayers evade their just obligations, and we know that a great deal of revenue has been lost. I suggest that the special committee which is inquiring into the war-time profits tax, might extend its investigations so as to cover the general tax field, and it should have power to call for what evidence it thinks necessary. If it were possible to prevent all forms of tax evasion, it would not be necessary to increase taxation on the lower and middle incomes. I do not suggest that any member of this committee wants to see taxpayers escape their just obligations, hut these matters are very involved. Sometimes it is not possible for honorable members to grasp fully the details of tax legislation when under discussion in this committee. The task demands the attention of a skilled mathematician, and because of lack of knowledge on details, a section of the community has been evading the payment of large sums over a long period of yea rs.
Commonwealth bonds to the value of about £6,000,000 are free from any kind of tax. All bond interest is exempt from State taxes, including unemployment relief tax, and most of the issues bear interest at the rate of 3i per cent or 4 per cent. The Treasurer declared that he had adopted 14s. in the £1 as a reasonable limit to the effective rate of Commonwealth and State taxes. This rate is obtained by adding the maximum Commonwealth, and State taxes, but the computation is based on the fallacious assumption that a person’s total income is taxed, as it should be, whereas interest on bonds is exempt from State tax, whilst a large volume of dividends, such as disbursements by Emperor Gold Mines, are exempt from both Federal and State taxes. One class of dividend is also exempt from State taxation in New South Wales. Unless the rate exceeds 2s. 6d. in the £1, a taxpayer’s dividends are exempt. If the rate is more than that figure, he receives a rebate by paying tax at the 2s. 6d. rate. Even a taxpayer who has invested large sums in bonds and in companies such as the Colonial Sugar Refining Company Limited would not be taxed at the rate of 14s. in the £1. For example, a person might he in receipt of an annual income of £6,000 derived as follows: -
As the first five dividends are derived from sources outside Australia, they are exempt. In other words, £4,000 of the total income is not subject to tax. As 50 per cent, of the investment in the Colonial Sugar Refining Company Limited is also exempt, the taxable income will be reduced to £1,000. That disposes of the Treasurer’s contention that some incomes are subject to taxes amounting to 14s. in the £1. Persons in receipt of high incomes do not, and will not, pay that amount while the present exemptions are allowed.
The subject of bank credit has given rise to considerable discussion among Australians. Groups which earlier took little interest in the proposal, or which ridiculed it, are now prepared to accept the fact that bank credit is a source which should be tapped in order to finance a portion of the country’s colossal war expenditure. The matter in dispute is the limit to which bank credit may be safely employed. Whilst the Treasurer admitted that it has been and will continue to be utilized, he offered no statistical data to indicate the extent to which it has so far been used. The honorable member for Robertson (Mr. Spooner) mentioned the amount of £40,000,000 but I cannot vouch for the accuracy of his estimate. The fact remains, however, that bank credit is being employed, although the extent seems to be purposely concealed from the public. Those honorable members who sat in this chamber between 1929 and 1931 will recall the many discussions about the delicate nature of our financial machine, and the warnings that if Australia attempted to depart from the gold standard, its credit would be ruined. Long and heated debates took place upon the necessity for honouring the promise, which was printed upon the paper currency, to pay the bearer £1 in gold on demand, and I recall the dire forebodings of many people when that promise was withdrawn. If bank credits had been employed more liberally in 1931, Australians would not have suffered the poverty and distress that so many of them endured during the depression years.
Mr. CHAIRMAN (Mr. Prowse).Order! The honorable member has exhausted his time.
– The latest major development of political and administrative organization in Australia since the outbreak of war has been the creation of the Department of Labour and National Service. No reference to this new department appears in the budget papers, because it was created after the printing of the budget. I propose to outline the functions of the department, and the organization which the Government desires to establish in order to implement such functions. Frequently this war is referred to as a “ total war “. This term suggests to most of us a struggle in which not only the men who actually bear the weapons are intimately involved, but in which the services of every able-bodied man and woman can tip the scales according to the degree of efficiency with which their services are applied for the purpose of exerting a maximum war effort.. The workers in the mines, factories, workshops, farms and offices, by increasing production, can be just as important in bringing the war to a successful conclusion as are those in the fighting services, who have the more spectacular and dangerous role of engaging in physical combat.
Recognizing the influence which the labour potential can exert the
Commonwealth Government has decided to establish a central organization that will make the most effective practical use of our resources of man-power and woman-power. The. marshalling of those resources- in order to obtain the maximum war effort for Australia, and a maximum degree of help and co-operation for Great Britain and the sister dominions, is the primary objective of the new department. If we are to achieve that aim, we must provide for a continuous supply of skilled workers for the rapidly expanding munitions programme and for the requirements of private industry, which has been speeded up to greater activity with the increased industrial tempo that has developed from war needs and activities. The task places upon Australia, with an enormous land mass populated by only 7,000,000 people, the responsibility of making the best use that it can of the limited resources of man-power at its disposal. In this highly mechanized war we must make greater provision than ever before from our own secondary industries for war purposes. The problem of the suitable placement and efficient training of men for industry is not new. Unfortunately, in the past it has not merited from federal governments the attention which its importance in our national scheme warranted. We have been inclined to declare that the technical training of young men and women is the responsibility of the States, and a matter with which we cannot concern ourselves.
– The United Australia party has repeatedly made such a statement.
– I admitted my own conviction that previous governments have fallen into error in that respect. The problem must be treated as a national one. In the past the States have been handicapped by meagre financial resources, with the result that technical training and technical education have not been fully developed. The war has now forced the Federal Government to intervene. Accordingly, it. has assumed responsibility for the technical training of workers who are required for the munitions, production. Abnormal demands, which have been placed upon the Government to supply skilled technicians, have not yet been met in full, and the necessity for coping with them has brought the Commonwealth Government into the field of technical training to an extent which had never before been contemplated.
-hughes. - That is specialized training.
– I agree, hut it is my personal opinion that the financing of technical education is a matter which no central government can ignore if it feels that the problem is not being properly dealt with by the States. The establishment of the new department will not cause overlapping with State activities. The programme, which has been adopted for technical education, has ‘been devised by Commonwealth and State officials, in consultation, and we are making use of State instrumentalities. In some instances, we have provided machinery and machine tools. In every respect, there is a high degree of amicable cooperation between officers of the Commonwealth Government, who administer the scheme, and officials of State technical departments. That principle of cooperation and close co-ordination must operate as the outstanding feature of the work of this department.
The principal functions of the new department relate to matters of general labour policy, man-power priorities, investigations of labour supply and labour demand, the effective placement of labour, technical training, industrial relations and industrial welfare, and planning for post-war rehabilitation and development. The actual organization of this department as an administrative machine is being undertaken at present. The- administrative headquarters and the central secretariat will be established in Canberra. Although, at the moment, certain difficulties of accommodation have , to be overcome, we propose -gradually to establish around that organization other divisions of the department The central administration will concern itself with matters of administration and general policy, man-power priority, particularly in relation to men coming under the national register, and employment research. As honorable members are probably aware, a section which has been functioning in Canberra under the Commonwealth Statistician has been engaged for the last twelve months on matters of employment _research. Its activities will come under the central administration. The work of the department will probably be divided into seven divisions, namely, employment, industrial relations, industrial training, industrial welfare, record and analysis of employment and man-power statistics, national services and reconstruction. The employment division will be concerned primarily with the supply of labour for national work, for the needs of the munitions programme and for private industry generally. It will be concerned not only with the placement of the unemployed, but also with the effective placement of people who may be under-employed or mis-employed. Various problems have already cropped up in this regard. We are even now beginning to experience a shortage of labour, particularly of skilled labour. We are finding that the heavy demands made on the labour market are creating a shortage, for example, of seasonal workers. The Government of Tasmania has recently had to prohibit the movement of skilled workers from Tasmania to the mainland. Care must be taken that the movement of skilled workers from such establishments as Cockatoo Island Dockyard to aircraft establishments does not interfere with the production programme at the dockyard. There is a demand in some quarters for the introduction of female labour into the engineering trade which, in the past, has always rigorously excluded female labour from certain sections of the industry.
– Who is asking for that?
– An application for the employment of female labour in an engineering establishment was made to the Arbitration Court in Melbourne a few days ago, and the judge has reserved his decision. These are examples of the great variety of the labour problems which are already presenting themselves.
– Will the Minister explain why the services of unemployed men in Queensland are not utilized? I in common with other honorable members representing that State, have large lists of unemployed men who get nothing more than a call for intermittent work, yet the Minister says that there is a scarcity of skilled labour.
– If the honorable member is aware of any considerable supply of skilled labour - for .instance, carpenters, bricklayers in the building trade, fitters, turners and tool-makers, or men who already possess some degree of mechanical aptitude and who would be suitable for training - I hope that he will give me particulars. I can assure the honorable member that full use will be made of the services of such men.
– Will those men be employed in Queensland ? I am given to understand by the industrial unions that many skilled tradesmen who have their wives and families and homes in Queensland are out of work.
– That will depend on the volume of labour available. If it is sufficient I shall be glad to take the matter up with the Ministry of Munitions in order to ensure that the best possible use is made of the labour available in Queensland. Honorable members who are closely in touch with industrial conditions in their own electorates can assist the Government by suggesting means for the better use of the labour resources of their own localities. If honorable members have any suggestions of that kind to offer, I suggest that they make them to me privately after this debate has concluded.
– There is a difficulty in that some people have too high an estimate of their skill.
– That may be so. Part of the training scheme in operation is directed towards the training to a better standard of men who have already reached some degree of mechanical aptitude. One other important matter that comes within the scope of the employment division is the establishment of a more satisfactory system of labour placement. From a brief survey which I have already been able to make of this problem, I . am not satisfied that the labour placement system now operating in the various States is effective. Unfortunately, in some of the capital cities some employers are reluctant to approach the official labour exchanges because they consider that the men who register there are of a type and degree of skill not suitable to them. It has been customary, for example, for men to register at such exchanges for sustenance and relief work and as a result employers and employees in more regular employment tend to shun these offices. Consequently, we do not learn precisely what labour resources are available to us. Then again room exists for considerable improvement, particularly in country areas. As far as I know, no really effective method exists at present for ascertaining the labour resources of country areas.
The industrial relations division will deal with the problems that arise from time to time as a result of industrial disputes. Honorable members are now aware of the proposals recently adopted by the Advisory War Council and announced by the Prime Minister for the improvement of the machinery for dealing with industrial disputes. These proposals were designed to give prompt adjudication and speedy equitable decisions in regard to disputes as they arise, before the core hardens and makes their settlement more difficult. I can assure honorable members that the new machinery is working smoothly. When the parties have taken advantage of this new machinery and have brought their disputes to the court or its officers, they have, without exception, been speedily determined. I hope that as union officials, employees, and, for that matter, employers, learn of the steps that have been taken, and of the possibilities which exist for the prompt hearing of the disputes, they will make regular use of the machinery we have provided. The minds of many people are agitated by the frequency with which disputes are occurring. I propose to say a brief word about that, because^ there is a good deal of misunderstanding of the position. Admittedly, there have been more disputes proportionately in recent months than at any preceding period within my knowledge, going back almost to the last war when, also, there was much industrial trouble. The more one examines this matter the more one is led to the conclusion that certain factors are set in motion by war and the resultant condition, which provide a sort of fertilizer for these disputes. Long hours, shortage of labour, the taking into regular employment of many men who, for perhaps months or years, had not been in regular employment, and the strain of war work itself, all combine to create an atmosphere in which friction develops, culminating in stoppages which in more normal and less hectic times would not occur. Often men working 610 hours a week are inclined to regard a stoppage of work as a break in their arduous toil. But it would be a mistake on the part of the general public to assume that, .because there have been a large number of disputes in recent months, any sinister unrest exists among the Australian workmen, or that there is any considerable subversive element in the community. No honorable member would question the loyalty of the Australian workmen. In fact, coming into contact as I have with so many union officials in recent weeks, I have been gratified to notice the number of these men who have sons or brothers serving with the fighting forces. For instance, I recall that recently, after a long and even heated discussion at a conference, one of the most militant of the union representatives, speaking to me privately, said, “ If you do not hurry up about getting my boy into the Royal Australian Air Force, I shall have a revolution in my own home.” I mentioned earlier that there was no indication of a considerable subversive element in the community. I shall not say that there are not some men who are prepared to exploit the present situation in order to get the best they can for the men they represent. But they are not saboteurs in the ordinarily accepted sense of the term; they do not wilfully obstruct our war effort. I regret, however, that there are some men, not many, but sufficient to present a problem, who endeavour to exploit the present situation, perhaps in a spirit of service to those whom they represent, and who unquestionably profess a political ideology which is alien to the views of the overwhelming majority of honorable members.
– The charge of exploitation applies to employers also.
– I admit that this charge could possibly be levelled at both sides. The frequency, however, with which particular unions are involved in stoppages seems to me to be rather more than a coincidence, and points to the fact that some individuals are determined to exploit the war situation. The frequency with which certain organizations are involved in disputes is out of all relation to the’ degree in which other unions are similarly involved. I describe these agitators as bugs in the blanket of industrial bliss. Many complaints were well founded and the Government has made an honest and serious attempt to remedy them. A good deal of our industrial trouble in the past has been due to the delay which has occurred in bringing disputes before the proper tribunal for decision. We have made a genuine effort to overcome that difficulty. So far we have not made any penal provisions whatsoever. We believe that the great majority of our working people will be prepared to make honest use of the new machinery that is now available for the settlement of disputes. If we should discover, however, that some sections of our industrial community are not prepared to resort to this machinery but take direct action themselves without giving the machinery a chance to operate, we shall not hesitate to amend the procedure in order to deal effectively with any such persons who will not act fairly towards the community in general.
The Trade Union Advisory Panel has been able in recent weeks to give to the Government valuable advice on certain matters that have been referred to it and the creation of a corresponding body representative of the employers is now under consideration by the Government.
The Industrial Training Division will give attention to the important problem of technical training for war needs. In this connexion the closest possible cooperation will be maintained with the Ministry of Munitions. Many of the men we propose to train will be required for munitions work, but we also propose to provide for the training of increasing numbers of men to do technical work in the fighting services. Attention will he devoted also to technical training with the object of effectively rehabilitating our men after the war is over. The future development of Australia will demand increasing attention to training in the technical field. We are finding an evergrowing need for properly trained men to meet the demands of our rapidly expanding industries, and we hope that the work done in this field will be of great value to the nation in the years immediately following the termination of the war. The Government has been considerably helped in these matters by the suggestions of private members of the Parliament and I shall he pleased to discuss, at any time, any proposals that honorable members may wish to make along these lines.
The division relating to industrial welfare will not duplicate the work of State departments for it is not proposed to develop iri. spheres already being adequately covered by State activities. The Government is of the opinion, however, that useful work can be accomplished by the adoption of a general policy for the improvement of the health, welfare and recreational activities of the Australian workers. A special problem has arisen, for example, in connexion with the shortage of housing accommodation in such rapidly developing areas as Lithgow. It will be a function of this division to cooperate with the Department of Social Services, the Department of the Interior, and other Commonwealth departments in providing as adequately as possible for abnormal increases of lie number of workers in particular localities.
– I take it that the Minister has in mind other localities, as well as Lithgow?
–Yes ; I took Lithgow as an illustration. Our housing programme will cover the provision of either temporary or permanent accommodation, according to the needs of the situation. That is the kind of problem that will be dealt with by the Division of Industrial Welfare.
– Rapid developments are occurring in the Maribyrnong district.
– I am aware of that. Difficulties arising from the same cause are occurring in other districts also. The
Government also has under consideration the practicability of establishing a bureau of home economics, similar to the bureau which functions under that name in the United States of America. It is believed that a lot of useful work could be done, and much helpful advice furnished by such a bureau to the housewives of Australia .as to how to make the best possible use of their weekly income. I have considered for a considerable period that our basic foodstuffs are being distributed by uneconomic methods practically throughout Australia. Ry the adoption of more economic methods of distribution, the value of the basic wage to working people could be increased, in some districts at any rate, by anything from 5s. to 10s. a week. At present the discrepancy between the margin of return to producers and the cost of goods to the consumers is out of reasonable proportion.
– The Minister is proposing to indulge in a little state socialism.
– We all are revising our ideas in these days. I have no desire to deny virtue to any section of political thought, though sometimes too great a degree of merit is claimed for their own proposals by noisy propagandists.
The Record and Analysis Division will have important functions to discharge in relation to the administration of the National Register and the use of the information available from that source. The collection and analysis of employment and unemployment statistics will also fall within the scope of this division. All honorable members must agree that the information we are obtaining in relation to unemployment generally is not as complete as it should be. Figures supplied to me showing the number of persons placed in employment since the outbreak of the war, placed against the official statistics of the reduction of unemployment, demonstrate that there is scope for improvement in the gathering and analysing of statistical information, because it is apparent that many people have come into employment who are not previously registered as unemployed. We ought to know how many of the people returned as unemployed are actually unemployable, how many are entirely unskilled, and how many are capable of being trained to undertake skilled or semiskilled work. .Such information would be of the utmost value to the country and it- will be one of the prime objectives of this division to tabulate such records.
A division which makes a lively appeal to my own imagination will be known as the National Service Division. The Government has under consideration the launching, early in the new year, of a national service movement. “We have not, hitherto, capitalized the desire of many of our fellow citizens to take a more personal and practical part in our war effort. Many people who are not in a position to give full-time service or even a full week’s service at a time- in connexion with the war effort, would be glad of the opportunity to devote a day or’ a night as frequently as possible to such service. Careful organizing would he necessary to make this practicable. Many worth-while activities which are being supported in local districts, in connexion with salvage work,, the Red Cross, war savings groups, national fitness, comforts funds, and the like could be organized on a mort effective basis, and so render more efficient service to the community as a whole. The Government believes that the establishment of national service centres in each shire and municipality would increase the drive and quicken the spirit of unity behind our war effort as well as fire the enthusiasm of our people. The purpose of this division of my department will be to capitalize the war service urge of the people at large. If that can be done, we shall be able more nearly to approach a maximum war effort. Arrangements could be made for local centres to register all the persons in that community who desire to render service of any kind. Such centres could also be made effective rallying-points for the organization of labour in country districts. I have, for example, in mind particularly seasonal workers. If proper contacts could be made between persons wishing to do casual work and the. officers of these local centres, a much more satisfactory distribution of labour should be practicable than is the case at present.
– Such contacts are poorly organized now.
– I agree with the honorable member, and . I hope that the machinery which it is proposed to set up will remedy this defect.
The seventh branch of the department will be known as the Division of Reconstruction. There is no need for me to emphasize the necessity to begin to plan now for the rehabilitation after the war of members of our fighting services and also of munitions workers, whose avenues of employment will quickly become restricted upon the conclusion of hostilities. It has often been claimed that although we won the last war, we lost the peace. We do not desire to repeat that experience. There is a tendency in some quarters to emphasize, to the exclusion of all other considerations, the need to win the war. I know that this is the primary consideration. But we should be able, even while we are putting forward our best effort to win the war, to make provision also to meet post-war problems. It is quite practicable to make our best war effort and, at the same time, to plan, in the spheres of both primary and secondary production, to meet post-war conditions insofar as we can visualize them. With proper organizing fruitful service to that end can be done even now.
– After the last war men who had served overseas were provided with employment or given vocational training by the Repatriation Commission. Is it proposed that this new department shall do the work of the Repatriation Department in this connexion?
– I do not suggest that at the present time. This department is in process of formation, and if the problem of reconstruction is to be dealt with properly, it will have to work in co-operation with a number of Commonwealth departments. The Department of Commerce can be very helpful; the Department of Trade and Customs has a very keen interest in the development of secondary industries, and its officers have accumulated a fund of specialized knowledge which will be helpful; the Repatriation Department has a wealth of experience that will be invaluable when the Government is making its plans. The activities of the Council for Scientific and Industrial Research are opening up new fields for development, two of which I shall mention. The encouragement of flax production is one of the happier features of our war-time activities. The establishment of this primary industry arose from research carried out by the same body. The problem of developing the fishing industry on a large commercial scale has been the subject of research by the Council for Scientific and Industrial Research. The information that has been collated in the course of this work will assist the new department. The views of experts from the various departments that I have mentioned have to be obtained before the best plan can be produced.
– Will the department encourage trade schools?
– There again we shall have the benefit of the experience which the Repatriation Department gained in carrying out its programme of rehabilitation after the last war. This department will not attempt to do the work which a number of other departments will have to do in their usual spheres of activity. On the more academic side, however, it will be able to collate information, particularly in the field of economic research. I have every confidence that the reconstruction division will perform some of the most valuable duties which the new department will be called upon to undertake. As well as obtaining the help of other Commonwealth departments, we shall seek the advice of public and semi-public institutions, such as universities, chambers of commerce and manufactures, societies of professional men such as engineers and architects, and State government departments which control land settlement and education. Honorable members will be able to see, - from the sketchy outline which I have given, the magnitude of the new department. It has great potentialities of becoming a fruitful instrument of social justice and national progress. The degree of success which it achieves will depend very largely upon the co-operation and goodwill of political bodies, industrialists and workers’ organizations.
– And State governments.
– That is so. We hope to have a conference of the appropriate State Ministers early in 1941, in order to discuss many of the labour problems which are matters of urgency even at the present time. [Leave to continue given.] We have before us the inspiring example of the Department of Labour and National Service in Great Britain, which has done great work under the leadership of Mr. Ernest Bevin. If we can obtain in Australia the same degree of co-operation from all sections of the people this department will achieve such results as will amply justify its creation, not only for war-time purposes, but also for reconstruction in the happier days of peace. Through the work of this department we can help our comrades and kin in Great Britain. In fighting our battle they are daily resisting the physical attack of the enemy. Although we cannot stand at their sides in this time of trial, we can be of great assistance to them by producing munitions of war. During the last war we sent munition workers to Great Britain; now we are able to send the actual munitions. In this war of the workshops,, we have been able to convert Australia into an arsenal which is growing in magnitude daily. Approximately 15,000 workers are directly engaged in government munition establishments, and within twelve months we expect that the number will have increased to 75,000. We estimate that another 75,000 will be engaged in the production of the component materials for munitions. By this means we can make a direct and valuable contribution to the effort which Great Britain is making. We can even contemplate the bringing to this country from Great Britain of skilled workers who, free from the distractions of bombings and the rigours of life in a beleaguered country, can apply themselves to producing munitions at a rate which is not possible in their homeland. I look confidently to the people of Australia to make a supreme effort in order to maintain continuity of production so that we may give the greatest possible assistance to the Empire. If we cannot contribute our man-power to the fighting forces in the same degree as during the last war, we can at least contribute war materials, and thus help to assure victory for the cause which is vital to us.
.- As a new member of this Parliament, I am amazed at the accusations that have been directed against honorable members on this side of the House by all supporters of the Government, with one notable exception. The exception is the honor.orable member for Eden-Monaro (Mr. Perkins), who admitted that there was good on both sides. The Government, which is dominated by capitalists, has introduced a budget which panders to the financiers. What I resent most about this, is that members and supporters of the Government have tried to bolster up their case by accusing the Labour party of endeavouring to retard the war effort by inciting strikes and disaffection; we are charged with generally being responsible for the nation’s unpreparedness for war. I shall show that the representatives of the big commercial concerns which direct the activities of the Government are actually responsible for our lack of preparedness. The Labour party, which represents true democracy and is the enemy of capitalism, cannot rightly be blamed. At the general election of 1937, the Labour party urged the establishment of an adequate air force and the building of factories in which to construct aircraft. Had a strong air force been in existence when war broke out, Australia would have been able to give immediate assistance to Great Britain. We should have had a trained force of men and factories producing aeroplanes for them. The country will never be provided with any measure of security by the representatives of capitalism; but it is instinctive on the part of the true representatives of the people to see the dangers that lie ahead, because we are not tied by big financial interests. I recall that, in 1937, those interests implied that the Labour party was disloyal to the nation and that the defence preparations which it advocated were not necessary. The actual reason for this attack on us was that these interests did not want factories to be established in Australia. They wanted Australia to purchase its aeroplanes abroad, where much of their money was invested. Their policy was to use Australia as a producer of raw materials instead of helping it to become a big nation in which employment could be provided for its young men. As the Minister for Labour and National Service (Mr. Holt) said only a few minutes ago, we are now trying to train our young men; Labour advocated the taking of that step three or four years ago, but we were told that the Government had no money for such activities. Profits come before patriotism with many of Australia’s big financial institutions. Naturally, therefore, I resent their allegations that Labour is hindering the war effort. The attempts of these profitmakers to protect their own interests actually caused our state of unpreparedness.
Finance is another subject that has caused a great deal of argument in this chamber. I am no financial expert, but I can speak from practical experience and with common sense.
-hughes. - The honorable gentleman probably knows as much about finance as do the experts.
– I know more about it than honorable gentlemen opposite, because I have suffered more than they have. They are receiving their unearned increment from the financial dictators and, naturally, they want to retain it. Finance is the key to everything. Since the introduction of the budget proposals, we have seen the gradual retreat of capitalism before the forces of the Labour party. But there remains one political pill-box that we must capture, and that is finance. A great weight of public opinion to-day favours a more extensive use of the credit resources of the Commonwealth Bank. This view is held, not only by experts, but also by common people, who have suffered and learned that it is not right for banking to be controlled by a few individuals who also control the Government. Unfortunately, the representatives of those individuals have been in the majority in this Parliament for most of the last twenty years. The honorable member for Melbourne Ports (Mr. Holloway) proved last night that the resources of the Commonwealth Bank could be employed to a greater degree than at present. This is no wild suggestion. It has been tried already; as a Scotsman, I like to see somebody else tes* a new [project before I give my support to it. The Commonwealth Bank was functioning in the interests of the nation at the outbreak of the last war. Unfortunately, it was not doing so when the present conflict began. Had it continued to operate on behalf of the masses of the people, our primary producers would not be in the mess they are in to-day, and we should not have experienced that terrible depression ten years ago. Those who control the banking system of this country naturally do not want to surrender what they regard as their rights. Probably if I were one of them I should hold a similar view. If Australia is to be saved . from the danger that threatens it, the policy which we espouse will have to be followed. The present tendency is to increase the taxes on men who are on the bread line. Unity of purpose and a maximum war effort could be achieved tomorrow if the Government would dismiss the Commonwealth Bank Board, which consists of representatives of private industry, private financial institutions, and industrial monopolies, and place a Governor in complete control of the Commonwealth Bank. There is no need to depict for me the horrors of bombing raids. To-day the principal consideration is the making of profits. No man should make any profit in a time of emergency. During the last war, the Commonwealth Bank functioned as a people’s bank under the control of Sir Denison Miller. In 1924, control was handed over to private interests. It must be restored to the people. I place the safety of Australia before the interests of private financiers. If honorable members opposite were sincere, they would force the issue. The best brain in the financial world could be employed. There is nothing wrong with the banking system ; what is at fault is the control of the system. I should not care if the Governor appointed were paid £10,000 a year, so long as he was responsible to this Parliament, and not to a board of directors. The Parliament could then say to him, “ As a trained banker, you shall do what you consider safe in the interests of the country”. As a banker, he would know what were the limits of safety. My safety as a farmer lies in what I produce. To-day, I have 1,400 sheep on my property. I could carry another 1,400 if I had the necessary capital. If honorable members were to take the stand which I suggest, there would be some justification for their claim for the formation of a national government, but they will not do so because it would mean the surrendering of profits, privileges and control. They would rather grant concessions than surrender control. The safety of our nation causes more concern to members of the Opposition than to some honorable members who sit on the Government benches. The worker bears all the pain and suffering of war. The majority of the people of Australia support my argument that banking should be controlled by the national parliament. The matter has reached a serious stage. Would honorable members opposite suggest that the control of the water system of Sydney or Melbourne should be in the hands of three men? Consider the enormous power over life and death which they would have. They could reduce the quantity of water available, on the plea that there was a shortage, and increase the water rates to a prohibitive degree. It is merely hypocrisy to advocate a national government and a maximum war effort, when men who are willing to render some service to the nation are denied the opportunity to do so. There is a powerful munitions monopoly. For two years during the last war the output of munitions in Great Britain was not sufficient to maintain supplies to France, and a Ministry of Munitions had to be established. A costing system was devised, one result of the application of which was the reduction of the cost of a Lewis gun from £175 to £70 in a period of two years. The Commonwealth Government is allowing these interests, whose first aim is to make a profit, to control our war effort. The production of munitions should be decentralized, and much greater use should be made of country centres. Too great a price is being paid for what is produced. The application of a costing system would cure that. For a field gun, £5,500 is an excessive price. Our resources of iron, steel and coal are in the possession of private individuals.
An independent valuation of them should be made, and even at a cost of £5,000,000 or £10,000,000 they should be taken over by the nation, the present proprietors being recompensed at a rate of 3 per cent. That could not be regarded as unjust or confiscatory. In my younger days, I imagined that men who were sent to Parliament thought deeply over the matters which came before them, in order that they might do their best for the whole of the people, but advancing years taught me that the majority of them merely represented bankers, big company directors, squatters, and industrial monopolists, whose object was merely to protect their own profits. Attempts are now being made to break down labour conditions. These have never been given to the workers voluntarily ; from the birth of the Labour movement the workers have always had to fight for the right to live. This led to the establishment of arbitration courts, which some persons would now abolish. In the old squatter days, the employees had to bathe in a lagoon in the early hours of the morning. Did the squatter say “You are a human being, and should be accommodated in a hut”? The men were crowded together under dirty conditions, and had to fight for all the improvements they obtained. The employers are gradually retreating from the position that they formerly took up, but they still have to be compelled to give justice to their employees. These interests have been in control of the affairs of the nation, and they have placed their privileges on a higher plane than the interests of the nation.
Shipping is of considerable value to this country. At one time we had a Commonwealth shipping line, but it was practically given away. The Labour party was responsible for its purchase, but another party disposed of it and also caused to disappear a lot of our social legislation.
The wheat farmer is probably one of the most valuable of our war workers. We have been accused by honorable members opposite of having made a bid for his support. We have asked merely for what belongs to him, but what he has not yet received. The golden grain is as rauch needed as are munitions of war ; we cannot do without it. Many of the wheat farmers benefited very little from the first payment, because they had to meet obligations to banking institutions, and some of them are to-day in danger of losing even their homes unless the Government comes to their assistance. If they were asking for what they had not earned,, they would have no case, but they have grown the wheat and have not been paid for it, although it was acquired from them compulsorily. That is in sharp contrast to the Government’s treatment of big business, which is allowed to put on its own profit. For instance, the Broken Hill Proprietary Company Limited is guaranteed its profit of so much per cent, even on its watered stock. However, there are not many genuine wheat-farmers on the other side of the House.
– Surely there are.
– I said genuine wheatfarmers. If the honorable member for Deakin (Mr. Hutchinson) produces any wheat, it is probably grown by share-farmers. The share-farmers have made the big men. They have done all the work and taken all the risk; they have cleared the land and broken it in. Even if the owner got no return from the wheat, he would be well repaid by the improvement of his land. The royal commission presided over by Sir Herbert Gepp found that it cost 3s. 6d. a bushel to produce wheat, and the prices of superphosphate, bags, and machinery have increased since then. The wheat industry must be considered in conjunction with our war effort. We must keep up the morale of the people. Wheatfarmers are skilled men in their occupation, and it would be uneconomic to allow them to drift away to other jobs. The Commonwealth Bank should be utilized to make the necessary advances to the farmers on’ their wheat. During the last war, the growers were guaranteed 5s. a bushel, and, incidentally, bread was then sold at 8d. a loaf. There is no reason why what I suggest should not be done. The farmers have produced the wheat, and it is merely a matter of paying them for it. It should not be necessary to wait until the wheat is sold.
Something should be done to assist the farmers to cope with their liabilities. The only hope for the farmers is to establish a mortgage corporation attached to the Commonwealth Bank, which would give the farmers long-term accommodation at, say, 2 per cent. The Commonwealth Bank was established, not to make money, but to serve the interests of the people.
– If we do not keep the farmers prosperous, secondary industries cannot be prosperous either.
– That is so. Unless something be done to help the men on the land we shall have re-aggregation of areas. The trend is in that direction now in regard to land, as in regard to finance and business generally. We know that small storekeepers are being swallowed up by the big chain-stores. The small man cannot hope to compete against a monopoly. It would reduce prices, and put him out of business in a very short time.
The Minister for Labour and National Service (Mr. Holt) referred to the big gap between the producer and the consumer, and he hinted that he was developing a more radical outlook. Probably there will be tremendous opposition to overcome from the senior members of the Government before he will be able to put his ideas into effect. However, I am convinced that the only way to overcome our difficulties is to reduce this gap between the producers and the consumers. When I stepped off the transport in Australia after the last war, I was asked by many people to join this and that, and if it did not cost too much, I usually did. One man asked me, “Do you want’ to buy a suit-length, digger?” I said, “What is the stuff like ? “ and he replied, “ It is good ; look at it. It was made in the Commonwealth Woollen Mills”. I asked him what the price was, expecting it to be pretty high, but it was only 10s. a yard, and I bought 4 yards of the very finest cloth for £2. All the cloth used for Australian uniforms was made in these mills, and its quality was admired all over the world. It seemed to me that the Commonwealth Woollen Mills had found a way to bridge the gap between the producer and the consumer. I could not understand how it was possible to sell this wonderful cloth at such a price. As a matter of fact, I still have some of it at home. I could not wear it out, and, in the end, it was cut up for the children. I thought that perhaps the wool had been bought at a very low price, so I went to my uncle, who is a wool-grower, and asked him what sort of price he had been getting for his wool during the war. He told me that it had never been better, and that he was quite satisfied. I then thought that perhaps the labour which produced the cloth was sweated, but I was informed that the work people received good wages. In any case, the Government does not sweat its employees. Then I said, “ The grower is satisfied, the workers are satisfied and, best of all, the consumers are satisfied “. Then I learned shortly afterwards that the Commonwealth Woollen Mills, that great national asset, had been sold.
– Given away.
– Yes, given away. It was not long before the price of cloth went up to £2 a yard, and when I bought my next suit I could see through the maternal. It is clear, therefore, that it is the middle man who is responsible for putting up prices to the consumer and keeping them down to the producer. If honorable members opposite really desire Australia to make its maximum war effort, they will have to curb the selfishness of those interests which they represent. The people are demanding a better state of affairs. We must give back to the people the Commonwealth Bank for their use and benefit. All such public utilities should be taken over by the nation, and operated in the interests of the public.
.- The budget introduced by the Treasurer (Mr. Fadden), although professedly an attempt to arrange and organize the finances of this country for the year ending the 30th June, 1941, is unique, in that almost half the period has already elapsed, and nothing has taken place during that period to indicate that such a severe financial impost should be placed on the people. Hundreds of thousands of persons from one end of Australia to another are convinced that the budget is economic madness, and are demanding that new methods be tried to bridge the huge gap between potential revenue and war-time expenditure. The load of taxation imposed on the lower and middle incomes is preposterous. It will cause hardship and dismay in the home, disaster to trade, and galloping unemployment that no scheme of increased Government employment will be able to overtake. It is all wrong to introduce in the first year of the war a budget so extraordinarily out of balance. Some time ago, Mr. Casey, the then Treasurer, told the people of Australia that if war came we would be able to get any amount of money - that the sky would be the limit. It now appears that those who are controlling the destiny of this nation, who are telling the world that Great Britain will win the war by blockade, are in fact attempting to blockade the working people of Australia, demoralize them, break down their morale, and rob them of that strength and vigour which are so necessary if we are to win the war.
Mr. E. W. Gillespie, chairman ot directors of the Bank of New South Wales - the most influential trading bank in Australia - in a recent address on the economic position of Australia, said -
So far the task of the Government in Australia has been easy, but much more drastic and unpopular measures than have yet been indicated will soon have to be introduced. Australia can play her proper part in the war only by drastic reductions in civilian consumption . . . Many businesses and occupations will have to be curtailed or even suspended during the war. This will bear very heavily upon a large number of individuals and interests, and the Government should be prepared to give financial undertakings in order to guarantee their future and to enable them to resume operations at the conclusion of hostilities.
Mr. Gillespie spoke as the representative of the trading banks. I am of opinion that if there is one service or occupation that could well be dispensed with in war-time it is that of the private banks. The trading banks could with advantage be abolished.
Although Australians do not object to making the maximum contribution required to achieve victory, they are convinced that it will be futile to emerge triumphant if, in the fight, the entire Australian economy has been wrecked. The budget’s deflationary proposals will, I fear, have that effect. All classes have been shocked by the Government’s financial proposals, and are fearful of the repercussions. Small shopkeepers, large warehouses, basic wage earners and others are definitely afraid. For the first time in history, a married man, who earns from £3 to £7 a week and has one dependent child, will be compelled to pay federal income tax, which will absorb the few shillings weekly that he now allots for time-payment purchases.
– In the last war, this group was compelled to pay federal income tax.
– To my knowledge, the basic wage earner has never been called upon to pay federal income tax.
The next group, earning from £8 to £12 a week, will be heavily “ slugged “. Income tax payable by a married man supporting a wife and child has been “ skyrocketed “ by from 400 per cent, to 600 per cent., and amounts varying from 10s. to 20s. a week will be extracted from bis pay envelope. The standard of living will be considerably reduced. In every home, readjustments will have to be made in the normal weekly list of purchases. In some instances, the amounts taken from salaries and wages represent a considerable proportion of the weekly outlay for rent, and families will effect savings hy sharing houses, as they did during the depression. Whilst that will cause a catastrophic collapse of rents, the amount of tax payable by landlords on income derived from property will be 20 per cent, higher than the tax upon income from personal exertion. How owners of property will make ends meet is a mystery to all except the Government.
The immediate effect of the budget on trade was disastrous. Stores had enlarged their stocks in anticipation of a big Christmas trade, a considerable portion of which is conducted on the basis of cash orders, which have to be discharged in the New Year. Smaller earnings mean reduced spending, and a severe slackening of trade will cause widespread unemployment. At the same time, arrangements are being made with the Prices Commissioner to pass on to the public in full, the severe increase of sales tax, customs duties and excise. Such increases will further contract the purchasing power of the wage earner, and reduce the turnover of factories, now at the peak of production. The anticipated unemployment from such curtailment in the New Year is appalling.
The demand for the full use of the credit resources of the nation in order to maintain purchasing power and ease the burden imposed upon the taxpayer has extended far beyond the ordinary limits of the Labour movement. In the circumstances, I cannot compromise with the Government upon the fundamental principles of this atrocious budget. The load is more than the public and industry can bear. By supporting the budget, the Labour party is failing to observe its responsibilities to the Australian public, and might just as well disband its organization. In size and terms, the budget is much in keeping with the forecasts. A suitable atmosphere was created for it many months before it was introduced. The public were warned to expect heavy increases of taxes and to tighten their belts in readiness for sacrifices. It is difficult to know why such sacrifices are necessary. Why should Australians be subject to such vicious impositions when the obvious method of financing the war is to utilize the national credit resources? Australia has inexhaustible supplies of wealth. Our people are energetic and intelligent. We have many valuable raw materials, and many important public works are yet to be undertaken, which will prove assets to the country. Instead of demoralizing the country, as it has done by its budget proposals, the Government should utilize our credit, because it is sound.
Taxation will bring in to the Treasury £126,325,000, and public loans, including war savings certificates, bank advances, and bank balances, will amount to £112,000,000. The Government proposes to expend £43,000,000 to defray the expenses of our fighting services overseas. In the first four months of the current financial year, this expenditure has totalled £6,300,000. If that rate be continued, only £20,000,000 will be required for the year. Evidently the Government expects that the expenditure will be doubled before the 30th June, 1941. The budget, which is grossly exaggerated and panicky, covers more than the requirements of war and domestic expenditure.
Last May, the Government adopted proposals for raising from taxation an additional £14,000,000, hut the present budget increases that amount by £31,000,000. Before exploding the taxation bomb in Canberra, the Government should have explored fully any reasonable alternative. It had a wonderful opportunity to put into effect the recommendations of the Royal Commission on Banking and Monetary Systems in Australia. It is refreshing to note that the Prime Minister, in his radio appeal for subscriptions to the war loan, declared that our national credit will he used to the point of safety. This admission established the principle that our national credit can be used, and all that remains is to reach agreement upon the vexed question of what constitutes safe limits. The issue of national credits should never, in any circumstances, exceed the value of goods and services created in Australia.’ Because taxation and loans have been the accepted media of creating national credit, it does not necessarily follow that that policy is always right. In the early days of constitutional government certain moneys were required in order to conduct the business of the country, and although governments always had the constitutional prerogative to create money, this was applied only to the issue of currency, and usually had a debt-chain attached to it. It should not be difficult to imagine what the position of Australians might have been if the financial advisers to the first Commonwealth Government had recommended that its constitutional power to create money should be applied to meet our national needs. Because our first financial advisers acted in ignorance, although ignorance is never accepted as a defence in a court of law, should we continue to carry on in a similar state ?
The terrific growth of taxation can be followed in the following table: -
Under proper constitutional government, not a single penny piece should have been extracted from the pockets of the people.
To the problem there is only one solution. If we regard the budget as a fair estimate of the money which is required for our war effort, we should instruct the Commonwealth Bank Board to make that amount available to the people of Australia as, when, and where it is required. Whatever the amount, the effect would be that the Commonwealth Government, which, in the final analysis, is the people, would owe the money to itself. The people would then have the money which had been created, and which after paying off advances, &c., would naturally be deposited in the Commonwealth Bank. Australia can never go bankrupt by owing money to itself, provided there is an equitable distribution of the money.
I cannot understand the inflation bogy which supporters of the Government and financiers produce whenever the Labour party advocates the use of national credit. The reply to those who cannot or will not admit the sanity and justice of the case for the expansion of national credit j3 the concerted howl of “ inflation “. This age-old bogy is trotted out whenever an attempt is made to loosen the vice-like grip of “ sound finance “ on the pockets of the workers. The Prime Munster spoke airily of “ sky writing”, and the Treasurer declared that credit expansion would be a “ concealed tax upon every shilling in the community “. Less distinguished critics describe it as “ hocus-pocus “. The ignorance or hypocrisy underlying these criticisms becomes apparent when we realize that Australian governments have always been financed principally by credit, not money, issued by the private banks at interest rates of 3^ or 4 per cent., and that the general public were taxed to pay for it. Why should it be termed “ inflation “ if the Commonwealth Bank issues credit f roe of interest, and not be inflation when the private banks issue credit and charge interest upon it. In the whole Commonwealth, there is never more than about £65,000,000 in notes and coin, roughly one-half of which is held by the public and one-half by the banks. Yet the Lyons Government borrowed £100,000,000 in three years, and this Government now plans to borrow more than £100,000,000, including the £28,000,000 loan recently floated. If that loan is to be raised in cash, where is it to come from? Obviously, the greater part of it must be bank created credit, interest bearing, of course. In 1S60 the public debt of Australia was £10,000,000. In 1938, before we faced the task of paying for this war, it had risen to £1,300,000,000, and we were paying £1,000,000 a week or £110 a minute, in interest. Is it not about time that we issued our own credit to ourselves, free of interest, through our own bank? It can be done and it has been done. The Kalgoorlie to Port Augusta railway was built with interest-free credit provided by the Commonwealth Bank, and no one pays interest on the cost of the bank’s palatial buildings in Martin Place, Sydney, and in other cities.
I desire now to make a strong appeal on behalf of small shopkeepers who will be most heavily hit by the proposed increases of the sales tax. Although I am at all times a fighter for the rights of the consumers, I realize that the small shopkeepers arc getting a very raw deal from the Government under this budget. The increased sales tax can be passed on by shops dealing in costly articles, but small shopkeepers, such as the retailers of smallgoods, cakes and confectionery, are not able to impose the tax on small quantities of cheap lines The imposition of these higher taxes must inevitably bring about unemployment in the wholesale confectionery and cake manufacturing businesses. In some instances the increased burden on small shopkeepers will amount to £1 a week. These people already have to pay for licences for milk, tobacco, shop, smallgoods, and Sunday trading, in addition to licences for motor cars and they have to purchase and maintain plant, costing up to £500, including refrigerators, show cases, cutters and scales acquired under hire purchase agreements. Many small shopkeepers will be compelled to close their doors early in the new year because they will not be able to carry on. It must be remembered, too, that among them are many returned soldiers who acquired their businesses when they returned from the last war, and ever since have been struggling to eke out an existence.
I propose now to deal briefly with the Government’s attitude towards invalid and old-age pensions. Under the Government’s compromise proposals the standard rate of pension has been increased to £1 ls. a week. Unfortunately, however, the base rate of pension which fluctuates with the rise or fall of the cost of living is to remain at £1 a week. If in the new year the cost of living figures justify an increase of ls. a week on the base rate, the pensioners will receive nothing ; when the increased cost of living justifies an increase of 2s. a week over the base rate the pensioners will receive an extra ls. a week. The present rate of pension is totally inadequate to meet the high cost of living, and will not go far towards meeting the steep rise of the costs that must take place in the new year when the full impact of the taxation proposals is felt. The Government might well take a lead from the British Government in this respect. Despite the almost crippling costs of war, the rate of pension in Great Britain has been increased from 103. a week to 19s. 6d. a week. Proportionate increases have been made in respect of widows’ pensions and, i» addition, an extra allowance may be made where the rent paid by the pensioner exceeds 6s. a week. All this has been done at a time when Great Britain is spending millions of pounds every day on the war ; but after fighting hard on behalf of the pensioners here, we have been able to induce the Government to grant a rise of only ls. in the pensions of those old pioneers who blazed the trail in this country and who, in the declining years of their lives, are now dependent upon the bounty of the Government. I sincerely hope that the Government will agree to alter the base rate of pensions to £1 ls. a week.
I direct the attention of the Government to the unsatisfactory condition of the wool-scouring industry. Before it is shipped abroad the Australian wool clip should be treated, as far as possible, by Australian workmen. In replying to a question recently, the Minister for Commerce (Sir Earle Page) stated that if it is shipped in the greasy state the wool reaches Great Britain in a better con- dition than if it is shipped in the scoured state. That statement requires investigation. I have not received any advice from experts on this subject, but I doubt very much whether the Minister’s assertion is correct. In any case, there is no necessity to ship our wool overseas, because the British manufacturers have indicated that, if they are given sufficient encouragement from the Australian Government, they will establish their industries in the peace and quiet of this country. The whole of the Australian wool clip has been sold to the British Wool Committee at 13£d. per lb., and is being re-sold to neutral countries at from 43d. to 47d. per lb. We were informed that an arrangement was made with the British Government under which one-half of the profits on the sale of Australian greasy wool to neutral countries would be returned to the Australian wool-growers. Only half of the wool is re-sold in a greasy state. The Government should not have sold abroad the entire wool clip for the duration of the war, no matter what the price offered for it. We could do the whole of the scouring, carding, spinning and weaving in this country if the Government fully realized the value of the wool industry. The whole of the Australian wool clip should be carbonized and scoured in this country. If the wool-scouring industry were established on a sound footing it would provide employment for many thousands of our people. It might well be included in the peace reconstruction scheme mentioned by the Minister for Labour and National Service to-day. I know that the Government is bound by its agreement with the British Government, but after the contract has expired it should take the first opportunity to place the Australian wool industry on a sound basis.
I desire to say a word or two about the Australian Broadcasting Commission because of the iniquitous propaganda which is being launched in an attempt to sabotage the A-class stations. I get very little opportunity to listen to broadcast programmes, but when the opportunity is afforded, I tune in to A-class stations which, unlike the B-class stations, do not »;very night put on a murder story sandwiched between advertisements for patent medicines. The programmes broadcast by the national stations are of an educational nature and of wide interest. Considerable criticism has been levelled recently at the A.B.G. Weekly. I have received issues of the A.B.C. Weekly ever since it was first published. It is a well produced, interesting and informative journal whose publication has prevented the daily newspapers from filching from the Australian Broadcasting Commission many thousands of pounds annually by charging advertising rates for publishing the broadcast programmes. I congratulate the Australian Broadcasting Commission on the production of its official journal, and I hope that the people will reject the insidious propaganda inspired by greedy profiteers who are prepared at any time to sabotage a government-controlled organization because its activities cut across what they regard as their own legitimate field.
.- My objection to the budget is primarily because it seeks to perpetuate the worst evils of capitalism. If the Government is honest, it should make an endeavour to introduce now that new order of society which we are promised when the war is over. If it is good to have a new order no time should be lost in laying the foundations as early as possible. I have a fear, however, that all these protestations about a new order are not sincerely meant by the press or by the great controllers of vested interests who propagate them. The hopes that they inspire are likely to prove as empty as the hopes raised during the last war when the workers were told that the war was being waged to make the world safe for democracy and fit for heroes to live in. We were disillusioned -after the last war. There was no new order of society, notwithstanding that fratricidal struggle. The conditions of the common people were no better, in some respects they were worse, after the war than before it. The owners of the means of production and distribution still exploited their fellows. In fact, the process of exploitation was accentuated and the conditions were even more repulsive than before the catastrophic struggle commenced. The capitalist state of society is obnoxious to me for many reasons. Some honorable members opposite have attempted to defend capitalism and others have attacked it. The best short description of capitalism that I have heard is “Anarchy plus a police force “. As the years have rolled by that description has become more and more apt. I remember reading some time ago these lines from Wordsworth’s Hob Boy’s Grave, which seem apposite to this discussion -
Because the good old rule
Sufficeth them, the simple plan
That they should take who have the power,
And they should keep who can.
Naturally the members of the Labour party are not satisfied with the capitalist order of society, and wish to see in its place a social order which will ensure the welfare of all classes of the people. Our desire is to change the whole basis upon which present-day society rests. It is of no use for honorable members opposite to tell as that everything will be all right after the war. We know very well that everything “will not be all right so long as the acquisitive instincts of men remain uncurbed by legislative action, and their rapacious desires are allowed unrestricted play. The great majority of the people have to work for the small minority. The 1933 census disclosed that 20 per cent, of the community owned 80 per cent, of its wealth. In other words, 80 per cent, of the people were in bondage to 20 per cent. A better order of society and a more equitable distribution of wealth must be achieved. The members of the Labour party visualize that better order of society and say that it must be brought into being by the time the war drums throb no longer. I have not such a simple faith in the present controllers of the social order as to believe that they will surrender without a struggle the property they at present own. But my colleagues and I on this side of the committee believe in an evolutionary change of the social order. We wish to begin making those evolutionary changes now. We are not prepared to wait until the wealthy people in the community are less anxious about the present and less fearful of the future. We desire to bring about a transformation of the circumstances of the great mass of the people by the institution of a social order in which there will be security for all. The great majority of our fellow citizens are to-day obliged to live on the basic wage, which is sufficient only to keep body and soul together. It provides for only the barest necessaries of family life. Nothing is left over with which a man may acquire property or provide for his old age. Under existing conditions the majority of the working people, having done their duty to their country, spend the evening of their lives in charitable institutions or maintain a bare existence on the old-age pension.
The Government should therefore make up its mind to introduce fundamental changes forthwith. The old process of patching up here and making renovations there will not satisfy us any longer. The people will not accept such a policy. They are looking for big changes and consider that a beginning should be made at once. The Labour party is firmly convinced such changes are inevitable, and, out of consideration for the true progress of Australia, it is not prepared to sink its identity as it would do were it to consent to the formation of a national government. In our view it is essential that the Labour party should keep its organization intact and not sacrifice itself on the altar of political expediency, merely to provide a few of its members with portfolios. We feel that by remaining a separate political entity we can best serve the interests of Australia and ensure that after the war the men who return from the battlefields and those who lose their present employment in munitions factories will be transferred under reasonable conditions to occupations in the processes of normal production. If we remain a separate political party we shall be better able to lead the people whom we represent. In other circumstances it is quite possible that the working people may fall victims to revolutionary doctrines which may even approach Fascism and Communism. We consider that we shall be able to do more for Australia by refusing to join a national government than by joining one.
Some Government supporters with, I believe, absolute honesty have pleaded that a national government would provide a panacea for all our economic, social and political ills. The honorable member for Eden-Monaro (Mr. Perkins) put his view sensibly and honestly. But in my opinion the virtues of a national government are chimerical. The honorable member for Flinders (Mr. Ryan), the honorable member for Wakefield (Mr. DuncanHughes) and the honorable member for Darwin (Mr. Bell) in submitting their views concerning the solution of our political problems all advocated the formation of a national government. Such a government could not solve any more problems than can the Advisory War Council as at present constituted. We ‘prefer to maintain a vigilant opposition in this Parliament, while at the same time contributing such advice as we have to offer through the Advisory War Council. In this way we believe that we are doing useful work to maintain the integrity of our parliamentary institutions and ensure the well-being of society.
It has been argued that because the Labour party of Great Britain agreed to join a national government the Australian Labour party should do likewise. But the circumstances of Australia are entirely different from those of Great Britain. Fortunately the conditions of the United Kingdom are not likely to bo experienced in Australia. The National Government of the United Kingdom assumed office immediately after Dunkirk at a time when it was expected that Hitler would order the invasion of England within a few days, or within a fortnight at the latest. France at that time was in desperate straits and the British armies on the continent were expected to be imprisoned or annihilated. There was scarcely enough ammunition and certainly not enough war equipment in England to provide for a new army to be placed in the field, and the general feeling was that perhaps the last great struggle for the freedom of England was about to be entered upon. It was in those circumstances that the National Government assumed office in Great Britain.
– The honorable member is a little astray in some of his facts. The National Government was formed after Narvik and six weeks before Dunkirk.
– Germany had successfully invaded Norway, Denmark, Belgium and France. It was common knowledge at the time that France was in danger of collapse. Even if the chronological order in which I have put my facts is not quite accurate there can he no denying that the circumstances of Great Britain at the time when the National Government assumed office there were entirely different from those of Australia to-day. The British Labour party acted according to its light and the Australian Labour party is doing likewise. We feel that we can make our best contribution to the welfare of our country by maintaining our separate political entity. If the Labour party were to join a national government its organization outside this Parliament would be split from top to bottom. I do not accuse honorable gentlemen opposite of desiring to destroy our organization, but I believe that the interests which control the anti-La’bour political organizations outside of this Parliament are sufficiently Machiavellian to believe that it would be a good thing if the Labour party could be temporarily destroyed as a political force, as it was destroyed after the conscription fight in 1916.
The honorable member for Barker (Mr. Archie Cameron) in the contribution he made to this discussion had quite a deal to say about doves, lambs and moths, and he interspersed those interesting observations with some criticism of the Leader of the Opposition (Mr Curtin)’ for having said, at the outbreak of war, that the Labour party did not favour the despatch of an expeditionary force from Australia to participate in the war overseas. It is true that the Leader of the Opposition made such a statement, but it is also true that he was not alone in the views that he expressed on the subject. Senator Brand, a member of the United Australia party, made some interesting remarks on the same subject in the Senate on the 29th November, 1939, some months after the Leader of the Opposition had made his declaration.
Sitting suspended from 6.15 to 8 p.m.
- Senator Brand said -
It was unnecessary for the leader of the Labour party (Mr. Curtin) to broadcast to the world that no Australian soldier would be sent to fight overseas. The world situation to-day is quite different from what it was in 1914. There is no likelihood of the formation of another Australian Imperial Force. All our industrial, economic and service defence preparations have one objective - home defence.
Honorable members should not think for one moment that I am visualizing an expeditionary overseas force.
No government would dare to denude this country of its virile manhood unless some extraordinary development warranted such action.
Australia’s defence problem is different altogether from that of New Zealand or any other dominion.
That was the opinion of a member of the party which the honorable member for Barker now adorns. If there he any merit in the criticism voiced by the honorable member it would be directed better at members of the United Australia party than at the Leader of the Opposition. The honorable gentleman said other unkind things about the Labour party to which I shall not refer now. But some criticisms were directed at the Government which is still in office by people who were not Labour propagandists. The honorable member for Barker himself, when he was temporarily out of the Government, spoke caustically of its capacity to govern the country, and of the way in which it was conducting the war. On the 14th October, 1939, the Melbourne Herald, which is an organ of the Baillieu group and the managing director of which, Sir Keith Murdoch, has had a very great influence upon the actions of this Government and, unfortunately, upon the destiny of this country on more than one occasion, stated -
The weakest link in Australia’s defence at the present moment is the Federal Cabinet.
It was seen that Australia depended for its security on -
A navy that could do nothing else but run for safety away from Australia if a hostile battleship entered our waters.
A land army of 35,000 ill-trained citizens, of whom it is estimated about 11,000 are efficient enough to take the field.
An air force that does not possess an efficient modern bombing plane, and that, on the present provisions for replacement, might, with very good luck, last three weeks under war conditions.
The following passage appeared in the issue of the 22nd October: -
There is uncertainty as to the defence deficiences and doubt as to what are the exact intentions of the Federal Government.
The Sydney Morning Herald, the organ of the Fairfax family, said on the 27th October -
Despite the statements by the Minister for Defence (Mr. Thorby.) on the precautions taken in the recent crisis, the fact remains that the emergency demonstrated that Australia was unready to meet attack. Some of the deficiencies that were revealed were: at the end of September the naval squadron was weaker even than it was during the starved years of the depression.
– That is not correct.
– It was stated by a newspaper which put the United Australia party into power in company with the United Country party from 1931 onwards.
– The honorable member believes only what suits him.
– I am merely reading for the edification of honorable members the candid opinions of their friends. On the 31st October, the Melbourne Herald published the following statement : -
The September crisis showed us with great clarity just what our own defences amounted to. It showed us that they were hopelessly inadequate even for protection against raids.
I commend these sentiments to honorable gentlemen who have criticized the Labour party for its attitude towards the war effort. They must remember that for the greater part of the last 25 years the Labour party has not been in power in this country. It had a precarious hold on the treasury bench in this chamber for two years, during which it was dependent entirely upon the whim of the Senate for the passing of its legislation. Therefore, if any just criticism can be made in regard to the deficiencies of our defence forces, it must be levelled in truth against the Government now in office and its predecessors. The honorable member for Wakefield (Mr. Duncan-Hughes), who stated his case very fairly, said that retribution had been coming to us for years. But it is retribution for the inefficiency and ineptitude of the Ministries which he has supported, both in this chamber and in the Senate. If our defence deficiencies be not due to the neglect of the various governments that have held office in Australia in recent years, then the blame must attach to the British Government, or to the British Commonwealth of Nations as a whole. At any rate, “Let the galled jade wince, our withers are unwrung”. We cannot justly be blamed for Australia’s lack of defence preparedness.
– I blame the Labour party.
– If the honorable gentleman has any criticism to make, it should be levelled against the United Australia party because the Labour party has not been in power. The supporters of the Government are blind to the realities of the situation.
– What government suspended compulsory military training?
– Compulsory military training was in abeyance in fact, if not by official decision, before the Scullin Government took office. After the Scullin Government left office the Lyons Government failed to re-introduce compulsory military training. That step was not taken until the beginning of this year. If there be any virtue in compulsory military training, why did not the governments of the United Australia party and the United Country party bring it into force again before 1940?
– Many of us advocated its re-introduction. Was there ever a Labour party man who did that ?
– It may be that the honorable member and some of his friends advocated the re-introduction of compulsory military training, but the majority of opinion in his own party was opposed to it. Members of the Labour party, particularly in Tasmania under the leadership of the late Premier of that State, Mr. Ogilvie, did support the proposal. Whether Mr. Ogilvie was right in adopting that attitude or not, the fact remains that he was in favour of compulsory military training. The honorable member made no reference in his speech to the fact that, in 1937, the Labour party had the only defence policy worth submitting to the electors. His party might have said something then about depending upon the British navy or building more naval vessels for Australia, but in 1937 we could not afford even to build destroyers, judging by the amount of money that was appropriated for defence purposes. The Labour party, however, submitted a policy which, had it been implemented, would at least have put this country in a better position to defend itself when war broke out in 1939. We should have had aeroplane factories all over Australia, and we should have been in a position to help the British people more than we were able to help them. When war broke out the country’s defences were in a more or less useless and hopeless condition. The main criticism that I have to offer of the governments that have held office in Australia and the United Kingdom in the years since the depression is that they believed that, by building up Hitler and bringing him to power in Germany, they were helping to make his particular “ ism “ a bulwark against communism in Europe. They pursued a mistaken policy and built up a monster. The Bank of England, under Montague Norman, helped substantially to bring Hitler to power. If any man should be criticized because British workers are to-day offering their lives in order to destroy this monstrosity of Nazi-ism he is Earl Baldwin, who, as Prime Minister of Great Britain, refused to re-arm against Hitler.
– What about Ramsay MacDonald?
– Ramsay MacDonald was Prime Minister of England in 1931, but not in 1933, when Hitler came to power. Earl Baldwin was Prime Minister in 1933 and he, in 1935 or 1936, said that the banks of the Rhine and not the chalk cliffs of Dover were the frontier of England. In 1934, when he had the chance to re-arm, he did not do so. He has since admitted that the reason why he did not re-arm was that he was afraid of losing the general election in 1935. He and the governments of the last few years must accept responsibility^ for failure to make the British Empire strong enough when war came to resist the new order established in Germany.
Honorable members opposite have regaled us with their opinions about inflation. The honorable member for Wilmot (Mr. Guy) gave the first of these dissertations on finance. He quoted extensively from letters written by an obscure doctor, whose only claim to fame is that be lives in the electorate of the honorable member for Watson (Mr. Falstein). Various other honorable gentlemen quoted at length from different tomes and told of the grave dangers that would threaten Australia should inflation occur. The honorable member for New England (Mr. Abbott) became irritable when I suggested that inflation in Germany after the last war might have been caused by a deliberate desire to debase the German currency in order to cheat the victors of Versailles. The honorable gentleman said that he was not in the councils of the German people. I can well believe that he, as a member of the Country party, would not be in the councils of anything but that effete organization. I should like to answer the statements made by those honorable gentlemen to whom I have referred, and the honorable member for Flinders (Mr. Ryan), the .honorable member for Darwin (Mr. Bell), and the honorable member for Barker (Mr. Archie Cameron). The opinions that I shall quote are taken from an orthodox journal which contains what might be termed the authorized version of finance. In the January issue of this publication, which is issued by a leading firm of Melbourne brokers, the following statement appears: -
Despite the fact that the shadow of war lies across the world, the Australian public, in majority, sees a shaft of brightness across the Commonwealth. There is a widespread belief in industrial and trade circles that Australia will benefit from the war; that a moderate amount of inflation must benefit producers and commodity-holders; that cheap government money must lighten industry’s burdens. It is a comforting compound belief, but events may force its modification.
Although the following additional quotation from the same issue of that publication may not have any relation to inflation, it shows the way in which those rapacious persons who manipulate stock exchanges, and control our financial institutions, take advantage of the nation’s needs and lay the foundations for the new wealth that they hope to make in this war. Regarding market movements during 1939 this journal published the following : -
Net gain over the year in the stocks listed was almost £12,500.000 and approximately that amount of appreciation was shown by Broken Hill Proprietary Company Limited, Australian Consolidated Industries and Colonial Sugar. Broken Hill Proprietary Company Limited accounted for more than £8,000,000 and Australian Consolidated Industries and Colonial Sugar each for more than £2,000,000.
In its next monthly issue, this journal, which I study very closely, and from which I hope always to be able to quote, to the consternation of honorable members opposite who bluff themselves with quotations upon inflation, says -
Unbridled inflation is a remote danger so long as we have stable government. Credit expansion - yes. But credit expansion that will be used with discretion.
At the end of the next column the following appears: -
It is possible to continue expansion without inflation so long as there are unused resources of labour and capital. Danger point is where, the machinery of production being fully employed, credit expansion ceases to stimulate production but instead leads to competition between the Government and private enterprise for the available resources in the community and thus raises prices, which results in costa rising, wages increasing and teo along the vicious spiral.
I prefer the opinions of a member of the Melbourne Stock Exchange to those of the scaremongers who have written books concerning what happened as the result of inflation in Germany, Russia, and other countries after the last war.
The honorable member for New England (Mr. Abbott) recited an interesting story in relation to the basic needs for a successful imperialism to-day, particularly in the matter of coal and iron, as well as essential non-ferrous metals. He spoke of damping down the production of certain commodities so that we might have more to spend on our war effort, and concluded by saying that we should have to use fewer refrigerators, motor cars, and many other articles about the possession of which the majority of those who sit on this side of the chamber know little or nothing. I agree with the honorable gentleman that there must be a damping down of the production of certain commodities in order that more material as well as money may be available for war needs; but his opinion is in conflict with that of his distinguished Acting Leader (Mr. Eadden), who, in reply to a deputation at Bendigo last Sunday week, said that he preferred that £1 should be spent by private enterprise rather than that £3 should be spent by a government.
– By some governments.
– When the honorable gentleman was questioned in this House he fell back, as the honorable member for Bendigo (Mr. Rankin) frequently does, on second thoughts, and changed the expression to “some governments.”
– I was present and heard what he said.
– Then the press hae been distinctly unkind to the acting leader of the honorable gentleman’s party. I do not know whether the. Melbourn newspapers entered into a conspiracy to misreport him. I can only quote from the report that they published. It will be seen that two great minds in the Country party cannot agree as to what is needed in the regulation of investment, in order that this country may make a maximum war effort. I bear no malice towards honorable members opposite; any criticism that I offer is purely impersonal. I hope that they will bear with me as I bear with them. In the spirit of the scriptural injunction - I suffer them gladly. If honorable members opposite had stated their definite intentions on war finance before they went to the last elections, there would be fewer of them on the Government benches to-day. In justice to the people, they should have made their intentions clear.
I believe it was the honorable member for Wilmot who related the results of the investigations into nutrition, or the lack of it, in England, by Sir John Orr. Committees and, I believe, commissions have inquired into the matter of nutrition in this country. Those committees, which have consisted of the most distinguished scientists in Australia, have produced voluminous reports; but this Government and its predecessor have taken no action on the data placed before them, nor have they taken any cognizance of the recommendations that have been made. Speaking subject to correction, I believe that a nutrition committee reported that 25 per cent, of the children of Australia were malnourished. If that be so, it is an awful reflection on our boasted civilization, and a terrible commentary on our vaunted Christianity. Whether or not the observations were the result of investigations all over Australia, or only over part of it, it is. true that malnutrition is widespread, and is particularly bad in the industrial centres. It may be even worse in Sydney than in Melbourne, but I should not think so, because in. New South Wales there is a system of child endowment which makes the lot of the family man a little easier. With the honorable member for Henty (Mr. Coles), I am a member of the Melbourne City Council, which employs medical officers who from time to time investigate ‘health conditions and report results to the Health Department of the council. I quote from a report presented to the Health Department by Dr. Hilda W. Bull in 1935 :-
Curing the absence abroad of Cr. Hilda Kincaid, the medical officer in charge of the child welfare work in the city, I had the privilege of carrying on the pre-school section of her work, and I would like to express my appreciation of the excellent! organization in which she was a pioneer.
I feel that the standards arrived at by Cr. Kincaid are a definite contribution to the health statistics of children of “ pre-school “ age, and any variation in my figures would be due only to slight personal adjustments. I propose, therefore, to give instead, very tentatively, some figures for certain co-relations between abnormal conditions - such as the simultaneous occurrence of malnutrition, anaemia, heart murmurs, defective teeth and tonsils, rickets and allied bone conditions - not making any claim for a cause and effect relationship, but to see if any useful line of inquiry might be suggested by these comparisons.
She went on to point out that the records related to 1,009 separate children who had received medical examination. In addition, 200 children who were attending kindergartens were medically examined, but not being centre children whose progress could be watched from year to year, they were not included in the report. This is what she said in elaboration of the details of her investigations -
Of the children examined, 22 per cent, were between two and three years of age; 27 per cent, between three and four years; 27 per cent, between four and five years; and 24 per cent, between five and six.
As compared with the figures of former years, there is a very slight decrease in the percentage of children at all ages who show evidence of malnutrition in that they are 7 per cent, or more below Emerson’s standards, which is the standard adopted in previous reports. The figure was 20.4 for 1934 and 25 for 1935. At the same time there is a drop in the percentage who are 7 - 20 per cent, above this standard, from 23,2 to 1<5 per cent.
Dr. Bull continued ;
The lack of balance in 4die diet, duc perhaps to the practice of appeasing the hunger of growing children with excess of carbohydrate, is another disquieting feature. The pale, puffy, even slightly overweight child, with continual catarrh, colds, and chronic bronchitis, came to be such a familar type thai) it could be recognized as it came through the door and must indeed be regarded as malnourished in the literal sense of the word.
The increasing evidence of malnutrition with age is very marked. At two years of age,. 16 per cent, were under weight; at three years, 18 per cent. ; at tour years, 23 per cent. ; and at five years, 43 per cent.; were malnourished as judged by Emerson’s standards.
It is obviously more difficult to feed a child on a restricted income with every year of its growth. The milk and cod-liver oil provided by the council form a larger proportion of an infant’s diet, than that of an older child and we were forced during the year to reduce the supply to the older children so as to keep within the estimated cost.
After referring to the desirability of endeavouring to provide one pint of milk for each child each day, she said -
Every parent was advised to provide a pint of milk for each child every day, and poverty, not ignorance, is surely .the main, if not the only, reason for its omission.
If we are to tackle effectively the defence of this country both now and in the future, we must make sure that no child starves. It would be a gross impertinence should any honorable member opposite suggest twenty years hence, if still a member of this Parliament, that any one who to-day is malnourished should don a uniform and fight for this country. We have no right to ask children of to-day to fight for a country which starves them when they are young. This Government can now find ?186,000,000 for purposes of war, yet in 1934 and 1935 its predecessor could not find any sum in order to subsidize the State Governments and municipalities which wanted to give sufficient food to the children of Australia to enable them to grow up strong and healthy. That Government then said that the money was not available, and that if it were demanded an impossible strain would be placed on the banking institutions. It washed its hands with invisible soap and said, “ The responsibility belongs to the .State Governments”. We must have a child endowment scheme, not when the war is over but now. It is up to this Government during this session, by the use of all the powers that it possesses, to produce such a scheme. Mr. Bruce, when Prime Minister of Australia, went to Dandenong, Victoria, on the eve of the 1925 elections and made the following statement: -
The question of child endowment is of vital importance. The man with a family, is the greatest asset to the country and it is essential and desirable that the greatest encouragement and assistance should be given to such men. It is proposed to refer this question to the Commonwealth and State Arbitration judges with a view to their recommendations being considered at a conference between the Commonwealth and State Governments in the hope of evolving a national policy.
The Government led by Mr. Bruce won that election, and subsequently appointed a royal commission on which the present Leader of the Opposition (Mr. Curtin) served with conspicuous success. That body submitted a report to the Government, but with the callous indifference which, on occasions, Mr. Bruce exhibited towards the needs of the poorer section of the community, he went to South Brisbane on the eve of the next elections in 1928, and on the 16th October of that year said -
To provide childhood endowment of 5s. a week for each child in the Commonwealth up to the age of sixteen years would mean a cost to the nation of £24,000,000 a year. It would be imposing an immense financial burden on the people. The effect would be that the cost of production and the cost of ‘living would he so increased that the women would be able to purchase no more than they did before, despite the extra amount of money they would have, to spend.
I have not seen so many sophistries compounded in one statement. [Leave to continue given.] Since 1928 every succeeding non-Labour government has declined to bring child endowment within the range of practical politics. The royal commission which inquired into the matter did not recommend that endowment should be paid in respect of every child, and the cost mentioned by Mr. Bruce in South Brisbane was intended to frighten the people. We must distribute the wealth of the community more evenly if we are to survive after the war. On every hand we see increasing mechanization of industry in all the processes of production and distribution. Machines are being invented to do the work of men. The creative genius of mankind is being utilized to make a few people richer, and to bring the masses of people nearer to the sustenance level. Unless we can make the machines the servants of the people instead of their masters, we shall soon have here conditions similar to those, in European countries, conditions that have been responsible for so much suffering and bloodshed. If we are to prove that the British race has the genius and capacity for government, and for solving the problems of every-day life, we must ensure that the owners of the machines do not appropriate all the benefits from the workers. Machines have been invented, and are in use in Australia to-day, which do the work of five, ten, fifteen or twenty men. Those displaced workers must be kept by somebody. Unemployment relief taxes have been imposed in every State largely to deal with technological unemployment, and to provide sustenance for men thrown out of work by machinery. I do not suggest that we should destroy the machines, as the workers in England wished to destroy the powered cotton looms in the time of Stevenson and Watt, but I say that the benefit of the machines must go back to the workers in the form of reduced hours and increased social services. It may not always be desirable to keep on raising wages. It may be better to give to the workers the benefit of their production in the form of social services such as child welfare centres, child endowment, kindergartens, creches, free medical assistance, and free hospitals. We look in vain for any liberal statesmanship from the present Government in regard to these matters, but they are very live questions to-day. According to the last census figures, a great number of people in Australia are living on the basic wage or less, and they are the real Australian people. The silk-skinned sybarites who congregate in the clubs and fashionable hotels of Sydney and Melbourne are not the real Australians. They are degenerates. The real Australians are the men and women who work, whether with their hands or with their brains, whether with their coats on or off, whether they push a pen or swing a pick. The struggling farmer to-day is working, not for himself, but for a variety of other persons. He works first for the bank which holds the first mortgage on his property; then he works for the solicitor, or whoever holds the second mortgage. After that he works for the firms which supply him with machines and superphosphates, and then for the local storekeeper, who tides him over hi3 worst periods, while the storekeeper is in turn working for the wholesaler and the banks. Farmers to-day are being driven off the land by these conditions. There are relatively fewer people on the land to-day than there were twenty years ago, and they are drifting to the cities all the time. It is not economically healthy that one-half of the population of Victoria should be in the capital city of the State, and the same drift is apparent in the other States also. There must be a revaluation of the land. It was a tragedy for Australia that the land should ever have been alienated. In Victoria, no less than 86 per cent, of the land has already been alienated. It would have been far better for the community if the land had remained the property of the Crown as it is in the Australian Capital Territory, and had been leased at a suitable rental to those who used it. I disagree with the honorable member for Wakefield (Mr. DuncanHughes) when he says that the Commonwealth land tax should be modified. I think it is fair to tax the big city property owners who have grown wealthy on the values created by the community. I recognize that some hardship may be inflicted upon men in the country who have suffered from drought, but the city property owners have no such difficulties to contend with.
When the Prime Minister was speaking I made an interjection which I intended to be helpful, but he misunderstood me, and replied that he would place at my disposal a very extensive library, and the services of treasury officials, to give me an elementary training in public finance. I thank him for that offer, but I have no need of his services. I spent seventeen and a half years in the State Treasury in Victoria. I know much more about public finance than he does, and if 1 had the time and opportunity I could tell something of the budgets presented to the Legislative Assembly of Victoria by the Governments of which the right honorable gentleman was a member, when I was on the Victorian Treasury staff. The Prime Minister is not a very know ledgeable man, though he speaks well from a brief. He said that it was his party which had always increased old-age pensions. I have taken the trouble to trace the history of old-age pensions in Australia. The first measure was introduced in the Federal Parliament in 1908 by the Deakin government. The Labour party was not in power when the act was passed, but it forced the Deakin Government to put it through. Otherwise, that Government would have been thrown out of office. Senator Mulcahy, a Liberal senator from Tasmania, speaking on the 3rd June, 1908, left no doubt as to who was responsible for the inauguration of the old-age pensions scheme. On that occasion he said -
After a certain meeting of a certain party, it was made known that the Deakin Government would be allowed to remain in office for the time being provided that what was required of them was done.
I am prepared to give the Labour party every credit in the matter, and I assert that if a scheme for the establishment of old-age pensions is approved this session, the whole of the credit for it will be due to the Labour party and not the Government.
Senator Sayers, from Queensland, expressed the same opinion, and Mr. W. Knox, who then represented Kooyong, the present Prime Minister’s electorate, made the following statement, also on the 3rd June, 1908:-
Some time back the Leader of the Labour party took the business of the House out of tha hands of the Government and moved a bill. He now points out that within six weeks the Surplus Revenue Bill and this motion directing Ministers to bring in this bill have been introduced to do what was demanded.
In 1925, the then Prime Minister, Mr. Bruce, increased pensions to £1 a week as an election bribe, but it was not necessarily because he believed that the pensioners were entitled to the increase. When a later parliament reduced pensions from 20s. to 17s. 6d., every member of the Nationalist party voted for the reduction, and when that party came into power in December, 1931, it took stock of the situation, and reduced the pensions from 17s. 6d. to 15s. a week, and put a pauper tag on them. If the Prime Minister wants to tell the story of pensions, he should start at alpha and finish at omega. He should not merely select one part of the story as supplied to him by the Treasury. Of course, the present Government will claim the credit for increasing pensions, just as the Country party will claim the credit for having obtained an extra £2,500,000 for the wheat-growers, and an extra 3d. a bushel on the price of last season’s crop. Th truth is that the Labour party is the only political force which has consistently stood for progress. It is true that the Labour party has not always been able to give effect to its programme, but we have popularized our demands so that it has become politically dangerous for the government of the day to deny our just claims. It does not matter very much, after all, who effects the improvement, so long as it is made. If it were not for the dynamic force of the Labour party, the lot of the mass of the people would not be so good as it is. It is not yet so good as it ought to be, or as we desire it to be. Unfortunately, because of the highpowered propaganda of the enemies of the people, government after government opposed to their interests has been able to snatch political victory. The people have been persuaded that it is less dangerous to put a conservative government into office than a Labour one. If the facts were appreciated by the people, there would never be any other but a Labour government in power, and it surely would not be necessary for us to do a great deal in order to surpass the achievements, for what they are worth, of our predecessors.
I have here an article from the Melbourne Herald of the 28th December, 1939, reviewing the operations of 678 Australian companies which published their balance-sheets. Discussing the increased profit-earning of some of those companies, the writer stated -
Noteworthy higher announcements were Australian Motorists Petrol 25 to 150 per cent; General Motors-Holden’s nil to 55 per cent.; Goodyear 10 to 20 .per cent.; Industrial Acceptance 12) to 20 per cent.; and Sigma 27) to 30 per cent. None of the ordinary capital of these companies is listed on Australian Stock Exchanges.
Biggest and most spectacular announcement of the year was the bonus issue of the Broken Hill Proprietary Company Limited. Shareholders will receive 64 bonus shares for every 100 shares held. The transfer, which will involve £4,459,790 of new shares, is expected to be made early in the new year.
This issue will rank next in size to the Colonial Sugar Company’s record bonus of £5,850,000 in 1934.
Despite these statistics, the Government contends that no profiteering is occurring. When the people realize the true state of affairs, they will declare emphatically that the Labour party must govern Australia.
The CHAIRMAN (Mr. Prowse).Order! The honorable member has exhausted his time.
.- My attitude to the issues arising out of the budget is dictated solely by motives of grave concern for the welfare of Australia and the British Empire. The tragic war in which we are now engaged can be brought to a successful conclusion only by the establishment of unity of purpose and action, which, hitherto, has been lacking. I am satisfied that it is not possible for the Government, as at present constituted, to supply the elements of accord and driving force which are necessary to ensure that Australia will pull its fair weight in the tremendous effort that is demanded of all sections of the community. If the British Empire is to preserve the ideals of a democracy, without which civilization would be a sham and a delusion, Australia must have a government which will conduct national affairs in such an equitable manner as to inspire the country to achieve its maximum war effort. In my attitude to these problems, I seek, not personal aggrandisement, but only the privilege, as a private member, of rendering service.
In a time like the present, the responsibility devolves upon me to examine critically the policy and administration of the Government, and to cast my vote in a way which will best serve the interests of the nation. I deplore the difficulties, indefiniteness, and lack of stability in government which are caused by the present composition of the House. Responsible citizens demand that Parliament shall at once resolve itself into a cohesive body in order to direct the affairs of the nation. If this should necessitate, at any time, a change of government, let us have the transition as quickly as possible. A great deal of misunderstanding exists in the public mind, because people believe that a change of government will lead to serious interference with the war effort and general administration. In my opinion, such, a view is erroneous. Even an election is unnecessary to clarify the position. If an election had .been precipitated as the result of the recent budget crisis, a grave responsibility would have rested upon those who advised His Excellency the Governor-General to dissolve this House.
A good deal of criticism of members of the Opposition has emanated from supporters of the Government. They contended that the Opposition is hopelessly divided. I hasten to add that the Government parties are as hopelessly united as the Labour party is divided. Several possible courses have been proposed to ensure stability of government, including the formation of a national Ministry comprising members of all parties. Although such a proposal has much to commend it, hope for the adoption of this solution seems to have faded. The honorable member for New England (Mr. Abbott) made a most constructive suggestion when he declared that stability might be secured by members of the House of Representatives electing the Prime Minister, and by having a Cabinet composed of the outstanding personalities of all parties. The value of such a suggestion could, with advantage, be examined in any future crisis. Of his own volition, the Prime Minister (Mr. Menzies) created a few days ago a position which was amazing and untenable, and which, if persisted in, could have been resolved in only one way. A government without a majority has introduced a. budget which imposes upon the people a burden the like of which has never been known in Australia. The Government, in effect, declared to the representatives of the people assembled in Parliament: “That represents our last word in the matter. Take it or leave it “. Such an attitude leaves to me, as a democrat, only one course.
I do not desire to enlarge upon the importance to Australia of the wheatgrowing industry. Although, at present, difficulties of marketing are tremendous, I am convinced that at the conclusion of the war, the industry will regain many of its lost markets and find a number of hew ones. That will enable it to play a leading part in the development of agri culture and land settlement in Australia. Recently, the Prime Minister declared, in effect, to the 50,000 families which are engaged in wheat-growing : “ The Government cannot pay you an extra 3d. a bushel for your wheat, which it acquired under special authority vested in it by the National Security Act. I know that the payment which you have received does not cover the cost of production and that you are unable to meet your obligations to your storekeepers and mortgagees, and pay your rates and other charges. I also recognize that your farms have been desolated by the ravages of drought this year, that country towns are being deserted and that many of them will become ghost towns if the problem be not grappled with immediately. This year the Government will expend £280,000,000, principally on the prosecution of the war, but it cannot provide an additional £3,000,000 in order to give to you a living wage in order to maintain your morale and provide you with homes. I am sorry, but 1 cannot help you”.
The declared policy of the Government appears to emphasize that only a limited amount of money is available for all purposes, including the prosecution of the war. That is what the bankers would have us believe. They desire to continue to regulate the amount in circulation as they have done in the past. I hope that, presently, Australia will have a government with sufficient courage to utilize the resources of the country for purposes of both war and peace. That is possible without inflation. According to orthodox finance and to the balance-sheets of financial institutions, there was in circulation before the war a certain amount of money in various forms. If we are to conduct the war successfully, that amount must be greatly augmented by an expansion of credit from time to time. The point in dispute is the maximum limit to which credit can be expanded with safety, and the form of control that shall be exercised over it. People require to know whether such control is being exerted by the nation in the interests of the people, or by private financial institutions for their own profit. As that question is paramount in the minds of electors who want to know the truth, I recently asked the Government to institute further inquiries into this all-important subject, covering matters which were not investigated by the Royal Commission on Monetary and Banking Systems. I trust that the Government will hasten to give effect to this suggestion, because people consider credit expansion is essential for the conduct of the war, and the effective organization of the country. In addition, it is vital for the great reconstruction and development, which we believe will come at the conclusion of hostilities.
The Government’s taxation proposals disclose a lack of understanding of the living problems of people who have difficulty, even at the best of times, of making ends meet. Nor are the proposals based on consistency, or on an appeal to reason. It might almost be said that the Government is concerned more with the welfare of the “ poor “ man on the dole of £40,000 a year, than with the interests of another person on the magnificent pittance of £151 per annum. As I prepared this speech prior to the compromise which was reached between party leaders last week, I ask honorable members to accept my criticism in the light of that knowledge. Examining in detail some of the proposals to increase the income tax, I discovered striking evidence of the Government’s deep and abiding concern for those best able to bear the augmented burden, whilst those in a less fortunate financial position are, to their sorrow, remembered. I shall commence my examination at the point at which the statutory exemption on income derived from personal exertion disappears, namely £300. The following table reveals the effect on incomes of the budget proposals: -
– The tax is already 14s. in the £1 on some incomes; if that were doubled it would be 28s. It is obvious that the honorable member is absolutely misrepresenting the facts.
– I challenge the honorable member to dispute these figures.
– But the figures do not mean anything.
– If honorable members say that the figures do not mean anything, that they cannot understand them, and that they are unwilling to accept my assurance that I can substantiate them, I am sorry for them. I shall continue my comparison -
Again I refer to the poor fellow on £40,000 for whom the increase is 37 per cent., the lowest of all. Despite the vehemence of the advocates of the wealthy classes, this is a satire on the sentiment of equality of sacrifice. The poor individual who has an income of £40,000 will pay in taxes, without exemption, about £19,600, instead of about £14,200 as formerly, and will still be left a meagre pittance of over £20,000 a year on which to exist. On the other hand, the man with an income of £300, without exemption, will pay £15 instead of about £2 2s. as formerly, leaving him the princely sum of £280 on which to live a life of luxury. These illustrations are given to show the judgment and acumen, if not the callousness, with which the Government has framed its taxation proposals.
I come now to the tax on property. For many years it has been the accepted practice for the Commonwealth to charge higher rates of tax on income from property, including rents, dividends on shares, &c, than on income from personal exertion. On looking over the proposals to raise additional revenue, we find similar syllogistic reasoning. Among those receiving an income from property of £200 per annum are many people who have been wage and salary earners all their lives, and who have invested the savings of their labour in cottages, shares in public undertakings, and loans. They impose no charge on the Commonwealth for pensions or relief because of their thrift and savings. The property tax is levied in accordance with the following scale : -
If it is sound in principle to tax those in receipt of only £200, at a rate 25 per cent, higher than that applicable to personal exertion, by what stretch of the imagination can the rate of only .38 per cent, be justified in connexion with a meagre income of £40,000 per annum? Other inconsistencies just as glaring as this could he cited. But these instances are sufficient to prove that no really serious attempt has been made by the Government to apportion fairly the responsibility for financing the needs of the Commonwealth on the basis of ability to pay and equality of sacrifice. In its proposals for the war-time company tax the Government has attempted to pander to what it evidently regards as public prejudice. “Whilst an attempt to limit the profits of large public companies may have some semblance of merit, most small proprietary companies which are really partnerships with limited liability will be unduly hit because their ability to earn substantial profits is dependent on the specialized knowledge and ability of the members contributing the actual capital employed. Otherwise, it seems that the Government is avoiding anything in the nature of unorthodox procedure in finance as though it were the plague. It is doubtful whether it has even heard of the proposals of that eminent economist, J. M. Keynes, who advocated that where the raising of money from lower incomes is unavoidable for the prosecution of the war effort, the sums collected in that way from salaries and wages should be loaned to the Government at low rates of interest for the period of the war. The idea behind his suggestion is that the loans, which would be redeemed after the cessation of hostilities if neces sary, would be some assurance for the workers against the rigours of unemployment which might follow the war. The spending power thus preserved would also assist in the rehabilitation of normal industry. There is some unbalance in the Government’s proposals in that too heavy a strain is being put upon the taxpayer, the general public, and industry by means of taxation as compared with what might be done in the way of expansion of credit and the provision of finance through the Commonwealth Bank. The Treasurer said in his budget speech that the Government’s policy has been steadily directed towards lower interest rates. Since the war, the yields on government securities have fallen on the average by 1 per cent, and it is true that the rate of interest paid by the private banks to depositors has been reduced, but apparently the Treasurer is so ill informed that he doc3 not know that the overdraft rates for customers of the bank have been increased in many instances. Thus the war situation is being exploited by the private banking institutions. All this points to the necessity for the alteration of the control of our banking system so that the credit resources of the Commonwealth may be more effectively marshalled for the effective prosecution of the war as well as to finance the activities of the Government now and later. To support that view it will be sufficient if I refer to the classic illustration of “ money from home “. Apart from fixed deposits on which 100 per cent, profit is made in re-lending, many millions of pounds is constantly standing to the credit of customers in the private banks, on which no interest is paid. This money is loaned to the Government on treasury-bills and bonds, and, in addition, interest-free credits are loaned to other customers on overdrafts. These loans are made, not on shareholders’ capital, but on the credit of depositors. But worse than this is the power bestowed on the private banks to cause booms or depressions by reducing advances. A great deal more could be said on this subject of banking, but it is not my intention to-night to go fully into the matter. I hope during the life of this Parliament to have an opportunity to deal more exhaustively with some phases of it.
The Commonwealth Government has set up a body to control prices. Such is the avariciousness of human nature that even in time of war and national distress there are those in the community who are prepared to exploit their fellows to the utmost. The shortage of supplies of any commodity that can he produced in Australia should not hu allowed to inflate prices. The law of supply and demand is not immutable and should not be so regarded. Prices can and should be controlled. They should not he allowed to be raised because of increased money circulating through war and defence expenditure. Such money does not represent the cost of civil production, and prices should not be increased because of increased demand. There is no justification for increasing the selling prices of consumption goods. Profiteering, particularly in foodstuffs and everyday commodities, must be rigidly controlled. Speculators must not be tolerated. It is the duty of this Parliament to see that the Commonwealth Prices Commissioner shall carry out his duties impartially, and that penalties shall be imposed on those who disobey the law in this respect. Wholesale and retail prices should be published weekly in the daily press and the people should be urged to see that they are not being robbed. Increased turnover should make it possible to lower rather than raise prices. Wasteful advertising and canvassing should be done away with, and those engaged in wasteful occupations should be employed in war work or civil production.
The Government has declared that it has done everything possible to stimulate our war effort, but it appears to me that at a time when we should all be marching forward unitedly, the political parties have been wasting their strength in a kind of political tug-of-war. An acceleration of our war effort is urgently required. To this end, I suggest that more effective use could be made of the full-time services of first-class executives and persons with highly developed technical skill and experience in industry. I am well aware that the Government has appointed many people to boards, advisory committees, and the like, but it appears to me that the majority of these persons are merely figure-heads, although they are supposed to be directors. The complete marshalling of our machinepower and man-force is essential for a supreme attack upon the enemy. I am sure that I have not been alone among honorable members in observing the muddle and almost casual activity in many so-called munitions annexes and other establishments engaged in work for the Government. We need some one in charge of the affairs of this country with the driving power of a Churchill, but so far the times have not produced the man. Our great lack is expert technicians with wide experience of production. Until such men are put in charge of our various defence operations, and the figure-heads at present in office removed, our war effort will continue to be unsatisfactory.
The decision of the Government to appoint Mr. Olive McPherson to the position of director of the new wheat stabilization scheme is to be deplored. It is simply amazing to me that the Government should have continued for so long its policy of patronage of its political friends and confreres. I have no desire to criticize Mr. McPherson personally. Every body knows that he is already a member of numerous boards and committees. He was at one time chairman of the Closer Settlement Board of Victoria, and in that capacity was largely responsible for the removal of many persons from closer settlement areas in Victoria. Part of my own electorate in the Mallee felt the effect of his activities.
– It is a great pity that he did not remove more people from the honorable gentleman’s electorate.
– The honorable member for Barker (Mr. Archie Cameron) did very well for his own State of South Australia in connexion with the allocation of moneys by the Commonwealth for the removal of wheat-farmers from marginal areas. I have no doubt that his activities served him well on last election day. At any rate, the honorable gentleman left Victoria high and dry. That State received no allocation, although its people contributed a large proportion of the total sum distributed among the
States. Mr. McPherson is, I understand, the managing director of Younghusband Limited, a big wool broking and pastoral firm. He is also a member of the Dairy Produce Control Board, chairman of the Australian Wheat Board, a director of the Commonwealth Bank, and a member of the Phosphates Commission* This list of Mr. McPherson’s membership of boards and committees is far from complete. In the circumstances, the Government could surely have found some other suitable person to put in charge of its wheat stabilization scheme. I shall reserve my remarks on the details of the scheme for a later occasion.
The Government should take action with the object of exercising some control over newspapers and commercial broadcasting stations, so that they will not be able to attack public men as they have been doing of late. The time is not distant when Parliament itself will be compelled to protect candidates during election campaigns. At present, it is a common thing for candidates to he subjected to bitter criticism by powerful newspaper interests and the propagandists of commercial broadcasting stations. It is becoming more and more the custom at election time for these instrumentalities, either of their own accord or for payment, to bring their heavy artillery into action against both individual candidates and particular parties. Much of the comment published in the press or broadcast over the air is totally unfair, yet the unfortunate victims of it are denied any opportunity of effective reply. I hope that this Government, or a succeeding government, will take steps to deal appropriately with this matter. The persons attacked should at least be given proper facilities to make their replies. I feel sure that the honorable member for Barker will agree with me in this connexion.
– I suggest that I he given charge for about a week.
– Another matter crying out for attention by the Government is the unsatisfactory procedure in connexion with the letting of defence contracts. Although time is such an important factor and we have many serious problems with which to deal in providing for the defence of this country, apparently nothing has been done to obviate unjustifiable delay in the letting of defence contracts. A soundly-based costing system should be put into operation at once bo that orders may be placed for defence work without the necessity for moving the cumbersome official machinery that at present is impeding production. I have heard that in some instances 50 or 60 forms have had to be filled in by tenderers before contracts have been obtained. This procedure is bad enough in peace-time; it is absolutely dangerous in war-time. It has taken months, in some instances, to let contracts for important defence jobs. If a proper costing system were adopted, finality could be reached quickly, jobs given to firms without delay, and the production of defence equipment accelerated.
The centralizing of defence activities and expenditure in our capital cities is also to be deplored. Under the existing procedure, boom conditions exist in certain State capitals while rural areas within those States are languishing. I make no claim to be a military expert, but I am confident that if Australia were to be subjected to raids by enemy aircraft we should rue the fact that so many of our defence establishments, including camps for the training of troops, are situated near our coasts and adjacent to our capital cities. For strategical and many other reasons, this policy is definitely dangerous, and the Government should review it without delay. Many of our larger country towns have wellequipped machine shops and factories of one kind or another which could be profitably employed in the production of war equipment and munitions. The Government should make an immediate investigation of these resources with the object of decentralizing its manufacturing for war purposes.
I notice that the amount proposed to be provided for the Council for Scientific and Industrial Research for the current year is only £90,000. A country which has so many problems to solve as Australia should be spending a great deal more money than the Government is proposing to provide for scientific development of its industries. We lag far behind most other countries of the world in this regard. Our population at the moment is 3mall, but surely we all visualize a great future for Australia, and we should therefore be striving with all our might to establish our industries on modern and scientific lines. The amount of £90,000 for industrial experimentation and research is so inadequate as to justify a vote of censure on the Government.
I regret that so little is being done in Australia to encourage the production of power alcohol. Although we have a petrol rationing scheme in operation, one of the purposes of which is to conserve petrol supplies for defence purposes, practically nothing is being done to investigate local resources for the production of power alcohol. A few days ago I had the privilege of investigating certain experimental laboratory work of a chemist who has been producing fairly large quantities of power alcohol from wheat. He has also been producing other by-products of value to the nation. Figures made available to me showed that the power alcohol was costing only between 9d. and ls. a gallon. I hope that the Government will cause an investigation to be made of the practicability of producing power alcohol from wheat on a commercial scale. I shall be glad to make available all the information I have on the subject. Both our defence and normal industrial needs justify a complete examination of this subject, particularly as we are facing serious difficulty in exporting our wheat overseas.
It is to be regretted that no reference appears in the budget to the need for postwar reconstruction. We should now be giving attention to this important subject. Although we do not know how long the war may last, we could be making preparations to meet post-war conditions.
– The Minister for Labour and National Service (Mr. Holt) spoke this afternoon on post-war reconstruction.
– That does not alter the fact that no financial provision is proposed in the budget for this purpose. A committee of thoroughly qualified men should be appointed forthwith to examine this question and make recommendations to the Government. After the war, Australia is likely to receive a great many new settlers from the United Kingdom, and, possibly at a later date, from other countries of Europe, and we should now be considering how we may absorb them in useful occupations. The Government should set the necessary machinery in motion at once.
As I see it, in this war the men in the workshops are equally as important as the men on the battle-fields. It does not appear to be probable, at present, that vast numbers of men will be engaged in military operations under conditions similar to those of the last war. As the production of munitions is of such great importance, the Government should be doing everything possible to stimulate these activities. We cannot rely upon the Mother Country to supply our needs. We should be doing our utmost to train men for all classes of technical work. In particular, we should be providing facilities for the training of the lads who year by year are leaving school, so that they may be able, in due time, to take their part in what I shall describe as this factory war. [Leave to continue given.]
We have so many problems to deal with in these times that it is not possible for me to discuss all of them, but I shall refer briefly to the apple and pear acquisition scheme. I have received many letters from apple and pear growers who appear to think that my position in this chamber is such that I am able to come to their aid by forcing the Government to yield to their demands. My knowledge about the apple and pear industry is somewhat limited, but since the inauguration of the acquisition scheme, apples and pears have been much more costly to the general public than they were before, and there has been a great deal of dissatisfaction amongst the growers. Recently, I attended a conference of orchardists at Mildura at which a large element among the growers was very hostile to the scheme. Nevertheless, I advocated the continuance of the scheme in spite of the difficulties that have been experienced in its first year of operation. There have been some losses and mismanagement, but I trust that in future the experience that has been gained at such cost will be used in order to ensure that mistakes will not be repeated. I believe in organized marketing. The position of the apple and pear industry would be very much worse than it is if the scheme had not been brought into operation. I appeal to growers to have patience, ‘because I have no doubt that ultimately the scheme will be improved and will work to their entire satisfaction.
I refer once again to the present wheat season. Much emphasis has been placed upon the problem of marketing that has been caused by the lack of shipping accommodation, and the lack of buyers. It would be a serious problem if we had a large surplus of wheat, but, as I see the position to-day, there may be a shortage of wheat in Australia twelve months from now if we experience another very dry season. This is not a remote possibility, because the United States of America experienced drought conditions in three successive years - an unprecedented series of disasters in that country. We may even be faced with the necessity to import wheat. Therefore, the Government would be wise to plan a few years ahead and arrange for the storage of supplies for at least twelve months in advance. That has been attempted in the United States of America, which has done much more agricultural research and experimental work than Australia. The United States of America is aiming at what it calls “ the ever-normal granary “ - a method of retaining a twelve months’ supply of grain on the farms. I hope that I shall have the opportunity to enter into discussions with the Minister for Commerce (Sir Earle Page) and some of his officers when the marketing scheme is being evolved. I am a wheat-grower and I understand the growers’ problems probably as well as any other man in Australia, and I should like to contribute practically to the formulation of a satisfactory scheme.
I hope that the Government will be democratic in its outlook and give serious consideration to all of the recommendations that have been made by honorable members on both sides of the chamber, so that, as far as possible, its legislative programme may satisfy their wishes. If that be done we shall all contribute materially to the nation’s war effort and the improvement of our economic standards. This would prove our sincere belief in democracy and ensure the true expression of our democratic principles.
.- I listened with a great deal of interest to the speech made by the honorable member for Wimmera (Mr. Wilson). Doubtless, honorable members would have listened with even more interest had the speech been delivered at a critical stage of the party negotiations that took place in Canberra last week. However, the effect of his speech upon me would have been no different; the honorable member is entitled to express his views, and if the Government’s tenure of office had to depend on one individual advancing sectional views, before the interests of the nation as a whole, I would prefer to see it go out of office.
– I would never do that.
– I do not make that charge against the honorable member, but there is a grave danger, at the present time, owing to the numerical equality of parties in this chamber, that sectional interests may be advanced in preference to the broader and more important interests of the nation. We all know the recent and tragic story of the defeat of one great democracy. We can learn much from it. The people of France spent much time in debate; certain sections endeavoured to avoid the sacrifices that they knew were required of them ; other sections tried to transfer their responsibilities to others. The net result was that, when the hour of trial came, the nation was unprepared, and to-day it lies under the heel of a conqueror whilst the people who protested so much against making sacrifices are at the beck and call of their enemies. We must learn a lesson from the fate of France. It is of particular importance at this hour when every citizen of Australia should be aware of the dire peril in which we stand.
– The trade unions had to be smashed in France before the country could be defeated.
– I listened with attention to the lengthy speech made by the honorable member for Watson (Mr. Falstein), but I heard scarcely one reference to the necessity for helping Great Britain to win this war. Practically the whole of his speech was devoted to demands for new social benefits for the people, more money for some sections, and more taxes for other sections which he does not represent.
After hearing the honorable member for Wimmera, I rose in order to state the position in regard to the wheat industry, to which he referred particularly, and in which every honorable member is greatly interested. The honorable gentleman suggested that the Government should make a further advance to growers apart from the advance of 3d. a bushel to which it has already agreed. But, in the compromise that was reached between the Government and the Opposition - a very just compromise in my opinion - the decision was made that it would be better to make available a sum of £1,000,000 for the relief of droughtstricken and distressed farmers than to make a further advance of 3d. a bushel on wheat in the No. 2 pool, which would have had the effect of benefiting, not only the necessitous wheat-growers, but also those not in need of assistance. The decision made was just, and I commend honorable members opposite for supporting it. I shall indicate what payments the wheatgrowers have received on the No. 2 pool on a record harvest of 210,000,000 bushels, of which 195,000,000 bushels was marketable. They have received 3s. 5-^-d. a bushel, f.o.r. seaboard. Allowing for the extra cost of putting wheat on board, which last season, owing to exceptional conditions, amounted to 4d. and 4 1/2d. a bushel, the advance made on the No. 2 pool is worth approximately 3s. lOd. a bushel, f.o.b., a price which most interested persons regard as being reasonably fair to the industry. I submit, therefore, that there is no reason for cavilling at the decision to make available a sum of £1,000,000 to farmers who are in dire need, instead of giving a further advance of 3d. a bushel to every holder of wheat. Honorable members opposite who agreed to that compromise showed very sound judgment.
A great deal has been said during this debate about credit expansion; but one or two more things should be said. The budgetary policy of the Government differs in very few respects from the budgetary policies of the Governments of
Canada and New Zealand. Honorable members opposite, who have expressed admiration of the New Zealand Government, should have some regard for the report made by a committee which was appointed by that Government in order to consider war-time production, stabilization of wages, and methods of financing the war. That committee, which consisted of representatives of unions and of other sections of the community, issued a unanimous report, the first recommendation of which was -
That, to the utmost of our ability and as far as it is possible to do so without crippling the productive resources of the dominion, we should pay for the war as we go, first by taxation and second by borrowing the savings of the people.
The second very important point which the committee made was as follows: -
The committee strongly recommends that every effort be made to ensure that the goods value of the pound will remain constant, as otherwise all attempts at stabilization must fail.
I have taken some part in the preparation of this budget. It would have been very easy indeed for the Government to have adopted the suggestions of the Opposition, to have evaded its responsibility, and to have relied entirely upon bank credit for the financing of the war. Unfortunately, however, this war cannot be run on the same principle as chocolate wheels. Sacrifices must be made, and there must be prudent regard for the real interests of the men and women who are on fixed wages, the pensioners, the men who have accounts in the savings bank, and the holders of insurance policies. The object of the Government is to try to maintain the purchasing value of money. It can best help the pensioner by seeing that his pound buys 20s. worth of goods, rather than by giving him 25s. which would purchase only 12s. worth of goods. That is the point which the Government has kept constantly in mind. I submit to every fair-minded member of the Opposition, that if the Government had been looking for an easy way, if it had wished to avoid the unpopularity of a burdensome budget, with very heavy taxation, it could have chosen the way which the Opposition has said it would have taken had it been in power ; but it has a higher regard than that course implies for its responsibilities and for the real interests of those who would he the first sufferers, namely, the persons on fixed rates of income, and savings bank depositors. These persons would feel the full effects of any scheme which tended towards inflation. There is very good reason to believe that the point is being approached at which further expansion of credit would become really dangerous. Almost all of the available and employable labour is now fully engaged. The number of registered unemployed in Australia has dropped by 43,000 since the outbreak of war in September last, and it is still falling rapidly. Figures issued by the Commonwealth Statistician a week ago showed that in New South Wales the number of persons actually working had increased from S38,000 in September, 1939, to 882,000 in October, 1940, notwithstanding that tens of thousands of men had enlisted. For Australia as a whole, the ‘ total increase of employment in the last twelve months is estimated at 90,000 men. This is accepted as the safe test to apply to credit expansion. Credit may be expanded up to the point where all of the employable labour is in productive employment. When that point is passed, the demand for goods exceeds the capacity to produce them. Therefore, a point has now been reached in relation to expansion of credit which makes it necessary to proceed very cautiously indeed. What does the budget say in regard to expansion of credit? Approximately £43,000,000 will have to be found for the payment of our troops overseas. The budget makes absolutely no provision for that, and all of it will have to be found by the use of the facilities of the Commonwealth Bank. By public loans £80,000,000 will have to be raised this year. The largest amounts we have ever been able to raise in one year in ordinary times is about £40,000,000. Were we to add to our liabilities in one way and another, all the price controllers in the world would not be able to prevent inflation of prices and the devaluation of money which would result from the too extensive use of the credit instrument. Only the high sense of responsibility which this Government feels towards the community as a whole has prompted it to resist the very strong efforts that have been made in many quarters to utilize the machinery of the Commonwealth Bank rather than take what all of us in our hearts recognize is the only safe way - making a real sacrifice and a stern effort.
Reference has been made to the exemption limit in respect of income tax. I do not know whether a comparison has been made between Australia and New Zealand. If it has not, it should have been. The Government of New Zealand is of the same political complexion as the Opposition in this chamber, and may reasonably be considered to have regard for the comfort and interest of the workers of that country. The following table gives the amount of tax paid in Australia and New Zealand by persons in different income groups, the figures for Australia embodying both State and Commonwealth taxes : -
Therefore, the Labour Government of New Zealand is following almost exactly the policy laid down in Australia. That policy is followed also in Canada, where the exemption in respect of a single man was recently lowered from 1200 dollars to 600 dollars. Every part of the British Empire has expressed the determination to play its part to the full. I know that the wage-earners, if they were allowed to express their own thoughts, instead of being guided by trade union leaders and other persons, would say that they are willing and even anxious to do their part. We can emerge successfully from this war only if we exhibit a determination equal to that of the enemy. I am confident that if the plain men and women of Australia be left alone there will be no doubt as to their willingness to make whatever sacrifices are required.
.- The Assistant Minister (Mr. Anthony) has made an unnecessarily provocative speech, which must tend to delay, rather than hasten, the passage of the budget.
It is difficult to arouse a great deal of enthusiasm at the moment, because there does not seem to be the possibility of members registering by their votes either approval or disapproval of the budget or of the suggested compromise.
Although the Assistant Minister has said a good deal concerning the honorable member for Wimmera (Mr. Wilson), and the effect which that gentleman had on the ultimate decision of the Government to compromise, it is nevertheless a fact that the budget was introduced by an adamant Treasurer, and was supported by an equally adamant Prime Minister, who, in the words of the honorable member for Wimmera, said “ There is the budget; take it or leave it”. That adamant stand has been discarded by the Ministry because it has had time to consider the strength of the different parties in this House, and also has had an opportunity to gauge the reactions of the public in the electorates. So we find to-day a more reasonable and tolerant Government, which is prepared to make concessions to both public opinion and the views of the Opposition.
The amendment of the Leader of the Opposition (Mr. Curtin) has gone by the board. It at least provided a. basis for the discussion of matters which were omitted from the budget speech of the Treasurer (Mr. Fadden). In place of the budget, compromise has now taken the centre of the stage. I frankly regret that compromise, for reasons that I shall state as I proceed. In my view, it is a complete surrender to orthodox theories and reasoning. At best, it represents failure to stand up to the needs of the times. It is a compromise for which this Parliament, and the people of Australia, will pay very dearly in the near future. Whilst all eyes appear to be focussed on the present political situation, very little attention seems to have been paid to the prospects of the future, particularly to what the next budget will be like, and the one after that. It would appear that the Government and, indeed, the majority of honorable members, prefer to go on, like the immortal Micawber, waiting for something to turn up. Although this budget debate, in the parlance of the boxing ring, will be a “ no-decision bout “, it has been useful because the relative merits of taxation, loans and credit expansion have been canvassed. According to the terms of the compromise, it is proposed that the War Council, in consultation with the bankers, shall discuss the possibilities of credit expansion. I hope that the Government will take the stand that, in matters of financial policy, the Government shall rule, and not those in control pf the private banks. It is true that taxation is under the control of parliament, and that governments are able to impose or vary taxes. It is equally true that a very large number of new taxpayers have been brought into the field. I refer particularly to the workers in receipt of lower incomes. Also, heavier burdens have been laid upon those in the middle income group, while additional taxation, though it is not, perhaps, sufficiently heavy, has been imposed upon those receiving higher incomes. The cumulative effect of the Government’s taxation policy is that, during the present calendar year, the people will be required to find an additional £45,100,000, of which £28,450,000 is to be raised by direct taxation from certain classes of individuals and companies, and £16,650,000 by indirect taxation, to be paid by the general community. The question that arises is, what will be the immediate effect of this increased taxation, and what will be its effect on the next budget? Frequent reference has been made to those in receipt of incomes of less than £400 a year who will be required to pay an additional £5,000,000 over and above their share of indirect taxation, and the direct tax levied on their wages by State governments. It is noticeable that ministerial supporters, either by accident or design, have omitted to point out that these new Commonwealth taxpayers are already contributing substantially to State revenue through a direct tax on their wages. In New South Wales, this tax was originally ls. in the £1, and its proceeds were supposed to be devoted to providing work and sustenance for the unemployed. Although we are assured that unemployment has practically disappeared in New South Wales, the State tax on wages still remains, and last year yielded £9,000,000. The proceeds of this tax are not now applied as was originally intended. During the last seven or eight years, the money has been devoted by successive anti-Labour governments in New South Wales towards the cost of social services, pensions, &c. Thus, when we try to assess the effect of the new taxation upon the wage-earners and others in receipt of lower incomes, we should take into account the State taxation which they are already paying. I understand that, grievous as is the effect of direct State taxation on the workers in New South Wales, it is worse in other States. Now, the sales tax is to be increased. Despite the fact that certain articles are to be exempt from sales tax, the fact remains that the workers will have to pay this tax on a large proportion of the articles they use. The Minister for Trade and Customs (Mr. Harrison), in the course of a statement last week on the effect of the budget on prices, quoted the Commonwealth Prices Commissioner (Professor Copland) as follows: -
When new stock is received on which sales tax has been paid at the higher rate, the normal gross profit margin can be added to the sales tax where the latter does not exceed 10 per cent., that is to say, on goods subject to sales tax at 5 per cent, or 10 per cent, the cost to the retailer will include sales tax, and he will be permitted to add his normal gross profit margin to this cost. In the case of goods bearing sales tax of 15 per cent., the retailer will ,be permitted to add his norma] gross profit margin to the manufacturing or wholesale cost including sales tax at 10 per cent.
Thus the workers will be called upon to pay increased sales tax ranging from 10 per cent, to 15 per cent, on most of the commodities they use, and the retailer will be permitted, in many instances, to add his profit to the increased cost, so that the worker, instead of paying 10 per cent, extra, will pay 11 per cent. Most of the 2,500,000 people, who receive incomes of less than £400 a year, use practically the whole of their incomes immediately. Of necessity, they are not in a position to hoard. The income of the basic wage earner is fixed by a tribunal which goes into the minutest details in order to determine the least amount upon which the worker can keep himself and his family. Thus, when taxation is in-‘ creased, such workers are called upon to accept a standard of living below that prescribed by a competent authority. The immediate effect will be a lessening demand for goods in the retail trade, and this, in turn, will have the effect of reducing the demand for the manufacture of goods. This will lead to unemployment, and to a reduction of wealth production. The taxation yield will decline, so that taxation will have to be violently increased in future years. Thus the vicious, downward spiral of deflation will start, and no one knows where it will end. The Government does not seem concerned about it. The Prime Minister waxed facetious at the expense of the 2,500,000 persons who, he said, earned between them £517,000,000 a year. He asked what sacrifices they were able to make, and what sacrifices they have already made. If we look at the enlistment figures, we shall see that the great majority of those in our defence forces are men who are usually described as workers. Before enlistment, they were in receipt of incomes below £400, and now they are offering their flesh and blood in return for a few shillings a day. They are doing it. not for what they hope to get out of the war, but because they deem it necessary to preserve this country as a democracy against the dictatorship powers which seek to dominate the world. The trade union movement also has made sacrifices. In order to co-operate with the Government in the furtherance of its war policy, the trade unions have agreed to the dilution of labour, one of the most dangerous things they could do, so far as their own interests are concerned. After the last war, many years elapsed before the trade unions were able to re-establish their previous customs and usages, because of the inroad3 made on the system by the dilution of labour.
The real question is, not what those on the lower incomes will pay in taxes, but what they will have left after the taxes are paid. Other sections of the community appear to be able to escape the taxation drag-net. I have in mind particularly those who held Commonwealth bonds which they converted in 1931. Because of the mistaken policy of the government of the day, it was agreed that such bondholders should not in the future be called upon to pay on the income from those bonds taxation at a higher rate than that prevailing in 1931.
Irrespective of what might in future be required, the holders of £400,000,000 worth of Commonwealth bonds were granted this concession. As a gesture to ease the sacrifice which they were making by accepting a reduction of interest, such a concession in- peace-time may have been justified ; but those people, under the present abnormal conditions have more to lose than any other section of the community. If Australia be defeated, their securities will be worthless. The workers, perhaps, will find employment, but bonds will be valueless. When assessing what people have at stake in this war, I consider that those who were parties to the agreement in 1931, when present-day circumstances could not have been foreseen, should be prepared to pay increased tax upon the interest derived from their investments, and the Government should have no compunction in further taxing that income.
The Government appears to have pinned its faith to a policy of financing war expenditure from loans and taxation. Such a policy has often been described as “ sane, orthodox finance “. Doubtless the Government is acting upon the advice of its experts, who have been schooled in the propaganda of the private banks. The effects of such propaganda may be seen even in this House, where many honorable members are prepared to defend any exaction which private financial institutions may make upon the Government or the people. Incidentally, those honorable members admit that the banks, are, and should be, the real governors of Australia. If the Government decides upon a loan policy, can it induce people to lend money for the purpose of prosecuting the war effort? It is interesting to speculate upon the possible effects of this heavy taxation upon future loan prospects. During the financial year ended the 30th June 1940, the Government raised £38,000,000 from loans, and many honorable members would like to ascertain how much of that sum was subscribed by the banks and insurance companies. On many occasions, they have attempted to obtain information on the subject, but successive Treasurers during the last nine years have resisted every effort. Why is this air of mystery necessary? If a loan policy is genuine, why should the Government refuse to publish the names of the big subscribers ? If the lodging of large subscriptions is an honorable form of patriotism why should not the private banks be given the credit for it? The Assistant Minister (Mr. Anthony) vaguely hinted that an inordinate expansion ofbank credit had already taken place and added that it had reached almost dangerous proportions. Many honorable members opposite have asserted that expansion of credit means unemployment. Despite the utterance of the Assistant Minister that inflation has already reached dangerous proportions, unemployment in Australia is being steadily reduced. Which of the two theories is correct, I do not know. An inquirer apparently must pay his penny and take his choice.
If it had been possible to extract from successive Treasurers information about the subscriptions to various loans by big financial institutions, light might have been thrown upon the percentage taken up by private investors. That information in turn would be interesting at this stage because of the possible effect of the present taxation proposals upon the capacity of private investors to contributeto future loans. In addition to the loan of £38,000,000 to which I referred previously, the Government has obtained a loan of £12,000,000 from the Commonwealth Bank and the trading banks, and has had the benefit of £15,000,000 worth of war savings certificates. How many more millions the Government proposes to raise in the near future, it has not made very clear; but many sources which, to date, have subscribed to loans may be dried up as the result of the Government’s taxation policy. Fora start, war savings certificates representing a considerable sum have been taken up by people in receipt of low incomes, such as male and female employees in workshops and offices. The great majority of subscribers have a small surplus of money, which they are prepared to invest in order to assist the war effort. If the Government takes that section which has subscribed so heavily to war savings certificates, it will practically dry up that source.
In addition, what will be the effect of this heavy taxation, upon the middle group of incomes between £400 and £1,000 a yea-r? Will the taxing of higher incomes destroy investment and create further unemployment ? Saturation point is reached in taxation beyond which it is dangerous to proceed, because investment is stifled and unemployment follows. If a deflationary policy destroys employment and heavy taxation reduces the purchasing capacity of the remainder of the 2,500,000 persons in the lower-income group, it is unquestionable that this will have violent repercussions on the savings of small business people. This section earns medium incomes and includes prospective private lenders. They depend to a large extent upon the patronage of the working class, and subscribe to this class of investment. I doubt whether they will be able to continue to support loans, because of the heavy taxation imposed, not only upon themselves, but also upon their potential customers.
What will be the attitude of the banks, who claim that they lend only against deposits, in accordance with the principles of orthodox finance? People cannot pay excessive taxes and continue to preserve the level of their deposits in the banks. Since the banks claim - untruly, in my opinion - that they lend only against deposits, the Government’s taxation policy will probably cause a contraction of those deposits, and a resultant reduction of the capacity of the banks to lend money to the Government against them. My estimate of the effect of this enormous increase of taxes upon the raising of loans, particularly from private savings, may be purely speculative. Nevertheless, the effect is real. If to finance the war I had to decide between taxation and loan, I should choose taxation. Although it has many shortcomings, taxation carries no interest, whereas loans remain a perpetual burden upon this and future generations. Taxation should be based upon the capacity of people to pay, and should fall with the greatest severity upon those who have the greatest stake to defend. Loans can be fairly stated to come mainly from those who have a real stake in the country. As they would be the greatest losers if Australia were to lose the present conflict, because much of the present loan money will be utilized for the purpose of prosecuting the war, no valid reason exists why they should remain, after their possessions are preserved, the sole beneficiaries from the debt that future generations will inherit.
The choice between loans and taxation is a choice between two evils, but I reject the proposition that taxation and loans are the only courses open to the Government from which to obtain money to finance the war. The present circumstances arc exceptional, and we must raise a colossal sum for war and civil purposes. A few years ago this budget would have appeared to be a madman’s dream. Because circumstances are exceptional, we must meet them with means which conservative elements describe as “ exceptional “ But the Government, like the Bourbons of Prance, learns nothing and forgets nothing. Its lack of foresight reminds me of a farmer who, disregarding all the latest agricultural implements, continues to use a wooden plough. The Government has attempted to strike a balance between taxation and loans from banks and private citizens; the Treasurer has merely guessed at the results. Members of the Opposition have suggested that the Commonwealth Bank should be employed to operate the credit resources of the nation^ which is the purpose for which the institution was originally established. But the mere mention of the use of national credit through the national bank provoked in this chamber a scene that can only be likened to an old maids’ meeting at which a couple of dozen mice had been let loose. The amendment submitted by the Leader of the Opposition proposed that the resources and functions of the Commonwealth Bank should be utilized to the limit dictated by considerations of safety. The Treasurer made precisely the same statement. I should like to hear a definition of what constitutes in their view the limit of safety. To date, nobody has made any attempt to supply it. In my opinion, the limit is represented by not only the actual wealth producing capacity of the nation, but also its potential wealth producing capacity. Any credit issued by the Commonwealth Bank against the potential wealth producing capacity of the country would not be inflation. It could be made available free of interest and would not remain a perpetual burden of debt. Inflation occurs when the amount of money made available exceeds the wealth producing capacity of a country. Although the Opposition urged the Government to utilize the credit resources of Australia, the Prime Minister declared that such a policy would impose upon all incomes a flat rate of tax, because it would be inflation. With a sob in his voice, the right honorable gentleman referred to the effects of such a proposal upon insurance policies and the superannuation benefits of the workers. The Labour party’s policy does not involve inflation, and I venture to say that greater evils than those envisaged by the Prime Minister have been caused in the past by the deflationary policy of the private banks. The crisis’ of 1931-35, when wages and invalid and old-age pensions, and all other social services were reduced, and hundreds of thousands of workers throughout the Commonwealth were thrown out of employment and had no wages at all, was the result of the unbridled control by private interests of the credit resources of this country. If I have to make a choice between inflation and the reduction of money values on the one hand, and deflation and all the horrors and miseries I saw in 1931-35, then I shall stump for inflation all the time. All those spectres conjured up by the Prime Minister and the Treasurer have no dread for me. I have seen the effects of both policies. The Treasurer said that above all inflation depreciates the value of small businesses, insurance policies, savings bank deposits and the like. The honorable gentleman said that the Government’s policy is a liberal one. If this is a liberal policy, God help this country if ever the Government gets an opportunity to implement a conservative one. The Treasurer went on to say that the Government’s policy stops short at reckless measures which would have such inequitable results and could only end in financial and economic collapse. That is the spectre which the Treasurer conjures out of the proposal of the Labour party that full use should be made of the credit resources of this country through the Commonwealth Bank. Who has suggested that reckless measures should be adopted? Certainly not the Opposition. I have advocated government control, not only of credit, but also of prices, which seems to be the bugbear of those who so much fear inflation. The Treasurer said the Government is in favour of an expansion of credit to the limits of safety, but he has not said what, in his opinion, the limits of safety are. Who is to decide what are the limits of safety - the private banks or the Government? While the private banks control credits at their will and whim, everything is all right in the view of Government supporters; while private bankers still retain control of the financial and credit resources of the nation they will always have power to make and unmake governments, because of their ability to bring about inflation or deflation. That is what concerns the money-changers to-day. It is not a question of who shall govern the country, but who shall determine the financial policy of the country. That is the last stand these people are making. I was satisfied of that when, as a representative of my party, I attended a meeting with government representatives, that the Government was prepared to make concessions on all points. We asked that invalid and old-age pensions be increased, and the Government representatives agreed. When we suggested child endowment, they said that that was a possibility which should be looked into. When we asked for work for the unemployed they were sympathetic. But when we got “down to the. question of the control of credit by the Government we found that this was the rock upon which any attempts to form a national government that would be of any use to the people of this country would be wrecked. Those who dominate the policy of the Government parties are determined that, come what will, they will never agree that the Government shall control the credit resources of the nation. They want the sole right to expand and contract credit so that by dominating the financial policy of the country, they may reap the harvest of wealth for themselves. I am pleased to know that under the terms of compromise “there is to he a conference on this subject. The War Council is to confer with -the Commonwealth Bank Board in regard to it; but as the personnel of both bodies think entirely alike on these matters, what good purpose can be served by the conference? The meeting will be merely make-believe unless it is attended by a Labour representative to put Labour’s view. The Government should “have the right to determine banking and credit policy. That is the policy of the Labour party and the only sound policy that can be adopted. The Prime Minister is scared about lessening the purchasing power of wages and the loss of income consequent upon an expansion of credit, but I remind him again of the fate of wage-earners and pensioners during the depression brought about by the Premiers’ Plan. The speech delivered by the honorable member for Robertson (Mr. Spooner) was like an oasis in an otherwise arid desert. In his frank criticism -of the Government the honorable member demonstrated that he is no Government camp-follower. As Treasurer of New South Wales for many years, he 11 1 as had considerable experience of finance in the State sphere, and ought to know his subject. In analysing the budget, he said that it was deflationary and would ultimately result in unemployment and destitution. So far as he could discover from the figures disclosed in it, the private banks had given no assistance in the matter of credit expansion. Will the Government’s financial policy lead to the same results as those which followed the adoption of a similar policy during the last war? An interesting sidelight on the Treasurer’s speech was his explanation of the situation in which the Commonwealth Bank came to the rescue of the Government. The honorable gentleman said -
Low export prices and the decline of private investment in Australia led to a recession which was reflected in some increase of unemployment and in the declining liquidity of the trading banks.
In short, the Government was faced with a deflationary situation. Would honorable members invest their private funds in a business that had about it all the signs of decay and depression? Certainly not. The Treasurer says that .by coming to its assistance the Commonwealth Bank and the trading banks saved the situation. The honorable gentleman continued -
In keeping with these plane to stimulate the economy, the Government refrained from increased taxation. Additional stimulus was also obtained from the special loan of £12,000,000 from the Commonwealth Bank and the trading banks.
Just at that time, when the Government was tobogganing towards disaster, when, on the surface, a loan to the Government looked to be a bad speculation, along came the Commonwealth Bank and the trading banks with an offer to lend £12,000,000 in order to extricate the Government from its difficulties. In justification of the Government’s financial policy the Treasurer said -
I think it may be fairly claimed that this policy has been justified .by its results. Since the beginning of the war civil employment has increased by about 80,000, or about 4 per cent, of the working population, despite the enlistment in the various forces of more than 150,000 men from the wage and salary-earning groups.
There was no talk of inflation when the Commonwealth Bank and the trading banks came to the assistance of the Government, although, according to the arguments advanced by several Government supporters, the pumping into circulation of another £12,000,000 of credit would be drastic inflation. [Leave to continue given.] So we have the spectacle of the banks lending £12,000,000 to the Government and the Treasurer praising their action and the glorious results that flowed from it. For party political purposes, however, when the honorable gentleman introduced his budget he said that similar inflation in other circumstances would lead to the reduction of savings, wages and the like. I challenge the accuracy of the contention that an increase of bank credit must inevitably lead to higher prices. We should have proper control of prices by a government conscious of its responsibilities to all sections of the community, and side by side with it an expansion of the credit resources of the nation through the Commonwealth Bank. We have a system of price control to-day in present circumstances. Is there any logical reason why we could not have similar control of prices in other circumstances? The Prime Minister now tells us that any further expansion of credit would have dire effects, but only a few weeks ago the right honorable gentleman told us that no limit should be applied to the use of the credit resources of the nation for war purposes. The right honorable gentleman was even more extreme than the former Treasurer (Mr. Casey), who on one occasion said that in the use of credit for defence purposes, the sky was the limit. Mr. Casey was comparatively modest; for him the sky was the limit, but for the Prime Minister there is no limit! The Prime Minister went so far as to admit in his speech on the budget that an expansion of credit might be necessary. He said -
I say that wc may find ourselves with some measure of this kind of thing before we have finished this struggle. We may have a greatly depleted standard of living before we finish this struggle, but we are not to be taken into that condition before it is necessary merely because it appears to offer an easy way out.
It is obvious that the right honorable gentleman sees that there may come a time when one policy will strangle the other, either taxation will make it impossible for him to raise loans, or vice versa. He must foresee, the breaking down of his present policy and the possibility of very drastic expansion of credit through the Commonwealth Bank. Holding .such views, he should be prepared now to apply a policy of credit expansion so that the additional credit may be pumped into circulation in carefully regulated amounts for use in the prosecution of the war. That course is to be preferred to the taking of drastic and, perhaps, disastrous measures at a later date.
A subject of vital concern to the people of Australia is the post-war revival of trade. During the last election campaign, this Government, like the antiLabour politicians during the last war, promised “ pie in the sky when you die “. Everything desirable was to happen after the war. We are asked to accept the same outlook now. I refuse to do so. The Government has ample regulation-making authority and legislative power to provide for the expansion of industry on a stable basis, and it should be taking steps to this end, but it is doing nothing. War conditions overseas and the deficiency of merchant shipping are such as to. justify the taking of every pos- sible action to increase our industrial activities, yet the Treasurer has intimated that he intends to direct all our financial resources into the development of war industries to the virtual exclusion of the development of normal civil industrial enterprises. A proportion of the available investment money should be allocated for commercial enterprises. The exorbitant taxation proposals of the Government and its cornering of the loan market for war purposes will cause havoc unless proper provision be made for the development of new peace-time industries. The financial policy of the Government should be varied and some effort made to take advantage of world trade conditions : otherwise, the aftermath of this war will be more serious for Australia than was the aftermath of the last war.
The Labour party considers that the time is ripe for the Government to assume control of banking. It has taken ocntrol of practically every other class of business activity in the community, in order that the best possible use may be made of our resources for the prosecution of the war. Why, then, should it baulk at taking control of our banking institutions? I hope that before long it will take that step.
The condition of the defences of Australia is causing considerable public alarm. The recent sinking of ships off our coasts and the laying of mines on our busiest coastal trade routes, although we are 12,000 miles from the main theatres of war, has brought the war right to our door. The uneasiness of the general community concerning the inadequacy of our defence preparations is shared by many honorable members of this committee. We should be informed of the disposition of our naval forces and aerial scouting squadrons. We are entitled to be told what provision has been made for the adequate policing of our coasts by units of the Navy and Air Force. As valuable lives and ships are being lost, it is not unreasonable for us to .ask for information on this subject. All that the Minister for the Navy (Mr. Hughes) will say in reply to questions is, “I do not know”. It may be his policy not to disclose information on these matters. If that be so, it is desirable that a secret session of Parliament should be held in order that honorable members may be. able to unburden themselves to Ministers. The Government may be able to make available privately information which it cannot divulge publicly. The secret session, need not last very long, but it would be invaluable.
I wish now to discuss the important subject of invalid and old-age pensions. The outlook of honorable members on this subject is determined according to whether they regard the pension as a charity or as a reward for services rendered by our pioneers to the general community. If the pension be regarded as a charity it may well be likened to the crumbs which a rich man allows the pauper to gather from under has table, the Labour party has never accepted that view. It regards the pension as a right which the pioneers of this country have earned, and it considers that the rate of pension should be sufficient to permit pensioners to live in reasonable comfort. I ask that a responsible member of the Government should tell the committee the basis upon which the Go.vernment considers the pension should, be computed. The rate must surely have relation to some economic factor. In 1931 we were told that it had relation to the national income. Because the national income was low at that time - it had, in fact, fallen to an extraordinary degree - we were told that” the pension must also be reduced,, as the country could not continue to meet the financial commitment involved in a pension at the then existing rate of £1 a week. I shall not at the moment argue whether any reduction was- justified at that time. My purpose is to request a responsible member of the Government to tell us whether Cabinet considers that the pension should or should not be related to the national income. I believe that it should be considered in this connexion. Yet the Prime Minister, as’ an excuse for declining to increase the rate of pension, told us a few days ago that “equating the old-age pension to the cost of living figures of the Commonwealth Statistician, on the basis of £1 in October 1925, it is now worth- £1 ls. 7d.”. Unfortunately, price rises since the beginning of the war have seriously affected many of the bare necessaries of life which the pensioners have to purchase. The prices of certain other items in the regimen to which the index numbers are related have remained fairly stable. The chief increases have occurred, in the prices of bread,, butter, meat and the like. These are important items in the regimen of the average pensioner to which the Prime Minister has sought to anchor the rate of pension. The Government should have a more liberal outlook on this subject. The position of many pensioners is very much more difficult than that of many basic wage earners. In the district which I represent a single pensioner, who has to rent a room, is required to pay about 8s. a week for it, which leaves him only about ls. 9d. a day for all other living expenses. A married couple living on the pension have to pay about 12s. a week for a room and use of a kitchen, which leaves them about 4s. a day for other living costs. Single pensioners, in such circumstances, very often live on two meals a day and depend upon charity for their clothing. The basic wage regimen allows 18s. a week for the housing of four persons. It will be seen, therefore, that a basie-wage earner receiving £4 3s. a week is in a much more favorable position than a pensioner who has to pay rent, although no one would suggest that the position of the basicwage earner is by any means easy. In 1925, when the pension was £1 a week, the national income was £677,000,000. It is estimated that in this financial year the national income will exceed £900,000,000. In view of the fact that since 1925 the national income ha.sincreased by £223.000,000 it is entirely unreasonable to expect us to- be satisfied that the increase of £9,500.000 in the pensions bill since that year is too great a share of the increased national wealth to be devoted to this social service. Another factor that moist be borne in mind is that in 1925 the number of pensioners was 162,356 whereas this, year it is 3’31,5’9’2. The increased amount now being provided- for pensions is, therefore, being shared by 169,246 more pensioners. The relative individual cost has not altered materially. It should also be noted that when the national income dropped by £164,000,000 in 193.1 the rate of pension was reduced to 17s. 6d. It was later reduced still further to 15s. Although the national income has almost doubled since that time, the rate of pension has, so far, not increased beyond the rate payable in 19)25. [Further leave to continue given.] The Labour party holds the view that the proposed increase of ls. in the rate of pension is totally inadequate. As I am of the opinion that the pension is a reward for services rendered, and should bear some relation to the national income, which has increased this year by £75,000,000, I consider that an increase of the pension to 25s. a week is fully justified.
For the reasons that I have stated I dislike the compromise that hae been effected to only a slightly less degree than I disliked the original budget. The income tax that will still fall upon the lower-paid workers, being super-imposed on the sales tax and the State basic wage taxes, amounts to a definite attack on the living standards of the working people - a section of the community least able to bear it - and will, in my opinion, result in totally unnecessary sacrifices which will probably lead to even greater sacrifices in the future through unemployment.
It is my considered opinion that the proposed increase of the rate of pension is insufficient. The new rate should bc at least 25s. a week. I agree with the principle of raising the rate of pension in accordance with increases of the cost of living. This is an equitable and long overdue provision. If the basic rate of pension were raised to 25s. the provision would be acclaimed by all sections of the community. It is gratifying to know that an increase of 7s. a week is to be made in the domestic allowance to the wives of members in the defence services.
The most regrettable feature of the budget is that the Government appears to be determined, despite the extraordinary circumstances which face it, to rely on orthodox methods of taxation and loan finance for the purpose of meeting the country’s war and civil commitments.
I believe that irrespective of whether the affairs of the country be administered by the present Government, or by a Labour government, or a national government, representative of all parties, the paramount need of the day is the adoption of a more liberal banking and credit, policy. Compared with this, all otherissues are subsidiary.
Since there is no indication of a. willingness on the part of the Government to depart from orthodoxy, it appearsto me that the results which will flow from this budget will be the same as in the past, and that whether the day of reckoning comes early or late, the great burden will rest upon the shoulders of the poorer sections of the community, whilst high finance will still control the governments and government policy. I said at the outset that I could find no enthusiasm for the budget as presented; now after examining its details I haveless sympathy for it than I had at the start.
.- I should not have spoken on the budget had it not been for the “ stone-walling “ by the Assistant Minister (Mr. Anthony).. I am definitely disappointed with the budget, as I was also with the GovernorGeneral’s Speech with which the Parliament was opened. The Speech contained no constructive suggestion forthe future of this country, but merely expressed the desire that we shall win: the war. There was no necessity for that wish to be expressed because weare all agreed on that matter. The speech failed to forecast any proposals to meet war conditions, and did not indicate that the legislation promised by the PrimeMinister in his election speeches would be introduced. The reason may be that the electors failed to give to the Government a mandate to carry on ; if so, it was the duty of the Prime Minister to hand over to someone else the responsibility for governing the country.
This may be described as a war budget,, but, as is usual with budgets presented by non-Labour governments, it inflictson the lower-paid sections of the community, greater financial burdens than they can reasonably carry. The lowering of the income tax exemption from £250 to £200 is unfair, and will tend to reducethe purchasing power of the people and bring about another depression. I should’ like to see the exemption raised to £500,. because the cost of living is now so high that a man who is rearing a family on a. salary of £10 a week is practically living from hand to mouth. Certainly all of his earnings are placed in circulation. Any loss of revenue arising from a raising of the exemption could be made up from other sources. In view of the increased cost of living, it is the duty of the Government to see that those who are most capable of finding the money necessary for the prosecution of the war should provide it. I agree with the honorable member for Barton (Mr. Evatt) that it is not so much what is taken from a man that matters, as what is left when the taxgatherer has passed on. The Government’s proposals will not leave very much, if anything, in the pockets of the workers in this country; they are to be asked to carry a greater share of the burden of the war than they ought to carry.
I am disappointed also at the smallness of the proposed increase of the invalid and old-age pension. An additional ls. a week will not compensate these old people for the higher cost of living. It is the duty of the Government to see that the pioneers of this land are amply provided for. My colleague, the honorable member for Dalley (Mr. Rosevear) said that the pension should be 25s. a week, and I agree with him that those who have rendered good service to their country should be treated well in their declining years. I have been appointed to a committee which is to investigate means whereby the loss of revenue resulting from the alteration of the Government’s budget proposals can be recouped with least hardship on the community generally. I hope that the committee will be able to recommend to the Government that any deficiency of revenue resulting from these concessions will be made up by the people who are best able to contribute.
I regret that the Speech of His Excellency the Governor-General did not contain any reference to an amendment of the Repatriation Act. The late Minister for the Army (Mr. Street) definitely promised me that an amending bill would be introduced during the life of the last Parliament. That promise was given after I had drawn attention to some anomalies in the act, particularly the lack of provision to meet such cases as that of a member of the Militia who was killed while on duty in the Liverpool camp. On that occasion, the sum of £5,0 was offered to his parents as a solatium.
– That matter is now dealt with by regulation.
– If the regulation provides for the payment of compensation in such cases, I shall take steps to see that the parents of the boy to whom I referred previously will be more adequately compensated for the loss of the family breadwinner. 1 am concerned at other anomalies in the Repatriation Act. All honorable members know that thousands of men who served in the last war and are to-day suffering from war disabilities find it most difficult to convince the department that their present trouble is due to war service. During the last Parliament, the honorable member for Balaclava (Mr. White) endeavoured to have a select committee appointed to inquire into anomalies in the Repatriation Act. I hope that something will be done in that connexion early in the life of this Parliament.
I wish now to refer to the lack of business methods in the administration of the defence forces generally. Recently, I talked with one of my constituents who was a soldier in the last war, and until recently was a member of the garrison forces. After about twelve months’ service in the garrison forces, he decided to leave of his own accord. Later he received his discharge. As there was a regulation entitling him to a suit of civilian clothes, he obtained an order from the department authorizing the issue to him of a suit. He went to the barracks in a borrowed civilian suit, with the result that he was not issued with a suit by the department. I suppose that had he gone along naked he would have received some consideration. I have written to the department on the subject, but, so far, I nave not received a satisfactory reply. Possibly that is because of incompetence 011 the part of some officer of the department.
I should like to see a little more supervision of the cost of munitions, particularly those made in annexes. The Government should appoint an officer to visit annexes, in order to ensure that where junior labour is employed in the manufacture of munitions, only junior rates shall he paid. The people of this country have to pay heavy taxes at the present time, and before the war is over may have to meet much heavier impositions. For that reason, there should be greater supervision of those who are doing war work. Many rather startling reports have been received in connexion with the manufacture of munitions, but discussion of them would be rather dangerous until one is able to verify their accuracy. A good deal of suspicion attaches to the charges that are being levied in connexion with the manufacture of munitions under private contract. The party to which I have the honour to belong has advocated for years that the manufacture of munitions should be completely under - the control of the Government, and. that no profits should be made out of them.
I am disappointed that greater provision has not been made for the invalid and the aged of this country, and I also regret that the basic wage man is to carry a larger share of the war burden than should be imposed on him.
Item agreed to.
The general debate being concluded -
Remainder of proposed vote. - -The Parliament £149,600- agreed to.
Proposed votes.’ - Prime Minister’s Department £637,400, and Department of External Affairs £92,200- agreed to.
Debate resumed from the 27th November (vide page 221) on motion by Mr. Beck -
That the following Address-in-Reply to His Excellency the Governor-General’s Speech be agreed to -
May It Please YOUR Excellency :
We, the House of Representatives of the Parliament of the Commonwealth of Australia, in Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you hare been pleased to address to Parliament.
.- So -much has been said in the budget debate that only certain minor matters remain to which I wish to direct attention.
Whilst agreeing that our main aim at the moment should be to maximize our war effort, I also believe that, as far as possible, attention should be paid to the conservation of peace-time standards of welfare. Because of technical factors, there is a definite limit to what can be done in relation to our war effort at the present juncture. More men are offering for the Navy, the Army, and the Air Force than can be equipped. The real limitation of our war effort I believe to be due to the shortage of necessary machines and tools in the factories of this country. Because of the existence of these technical factors, it is all the more important that the resources which are not required, for a maximum war effort should be utilized in ways that are best calculated to serve other activities. An endeavour should be made to keep the national income as high as possible. Legislation which has the effect of reducing, or of tending to reduce, the national income, should be criticized by any person who has at heart the welfare of Australia. Petrol rationing has had a very detrimental effect on a large number of persons. First, it threw out of employment many men who were engaged in garages and motor services generally, before the Government was ready to employ them in connexion with its war effort. A very large number of traders in country districts have been detrimentally affected. It is of not the slightest use to tell the country trader that he has to reduce his petrol consumption by 50 per cent. A butcher who operates in the country can make a living only if he be permitted to call on all of his customers. If, by the reduction of his petrol consumption, he is able to call on only one-half of them, he cannot make a living; this must result in a decline of the national income which is bad for the country generally.
A matter about which I have some knowledge, because prior to entering this Parliament I was a forestry officer, is the haulage of timber. Most of the timber is hauled to the mill by motor trucks. It is of not the slightest use to tell the motor truck proprietors to reduce their petrol consumption by one-half. If they did so, they would not be able to make a living, and the mill owner, as well as the wage-earners at the sawmill, would suffer equally with him. The Government should give attention to these problems, and arrange that when requests are made to the fuel advisory boards in tho different States they should grant sufficient supplies of petrol to enable these individuals to make a decent living.
Great Britain needs all the food that we can send. Scarcely any food is in a more concentrated form than the egg. The egg producers of Australia should be encouraged and helped as far as possible. One of their principal difficulties has been a considerable scarcity of bran and pollard, due to the fact that our export of flour is much below normal. This is not the fault of the egg producers, who have to pay much too high a price for what bran and pollard they are able to obtain at the present time ; it is a fault of the capitalist system generally. The price is fixed according to supply and demand, and bears no relation to the cost of production. The Prices Commissioner should see that the price of bran is not permitted to rise as it has risen. To make up the shortage, the Government should arrange to have a portion of the surplus stocks of wheat ground for use as a substitute for bran and pollard.
The matter of training in technical schools has been raised by the honorable member for Melbourne (Mr. Calwell), and I wish to amplify his remarks. I have said that the limitation of our war effort is due to a shortage of skilled men and necessary machines in our factories. In a recent issue of the Melbourne Age this shortage, and the matter of technical training, were dealt with by Mr. E. P. Eltham, Director of Training for Munitions, in the following terms : -
The immediate need now was for 14,000 tradesmen, mainly fitters. This was an enormous increase on the previously estimated figure of about 3,000, and the Empire air scheme was the principal factor in the increased demand.
One of the best steps ever taken by this Government was when it started the scheme for the training of fitters and turners in technical schools. The only fault which I find is that the scheme does not go far enough. Every technical school in Australia should be engaged full time in training fitters and turners to enter the munitions factories. The
Commonwealth Government should provide sufficient money to obviate any risk of men being deprived of training because of shortage of accommodation or equipment. The Gordon Insitute of Technology in Geelong is playing an important part in training the men offering in the Geelong area, and I trust that, if extra accommodation or equipment is needed, the Government will help to provide it.
My next subject is the damage done to roads near Commonwealth properties. There are many such roads in my electorate. The most important are those serving the munitions factory in Maribyrnong. Of course, that factory is in the electorate of the honorable member for Maribyrnong (Mr. Drakeford). Other important roads are those in and around the Queenscliff Military Station at the entrance to Port Phillip. The four or five municipalities concerned continually write to me requesting that I ask that the Government give them moreassistance in the maintenance of those roads than it has given in the past. I know that the Government is hard pressed for money, but the traffic on those roadsis now more heavy than it was in normal times. It is anomalous that, although petrol is rationed, with a consequent decline of the receipts from the petrol tax, the traffic on those roads has increased. Honorable members are aware that out of the Federal Aid Roads grant a certain amount of money is set aside for expenditure on roads leading to Commonwealth property. The remainder is expended on the advice of the various State roads boards. In answer to a recent request,, made by me in conjunction with the honorable member for Maribyrnong for further moneys to be made available to repair the damage done to roads in theshire of Braybrook, the Minister for theInterior (Senator Foll) informed us that no money was likely to be available for that purpose this year, owing to the rationing of petrol. Unless those roads be kept in order our defence activities, will suffer. If necessary there should be some allocation in the defence estimates for this work to be done.
The Government gave the need for dollar conservation as the main reason f or the introduction of petrol rationing. Our store of dollars can be increased either by lessening our imports of certain commodities, or by increasing our exports to the United States of America. I was impressed by an article which appeared in the Melbourne Herald not long ago. I consider its importance so great that I propose to read extracts from it. Australia is the greatest wool producing country in the world; yet we send the bulk of our wool clip overseas for manufacture. We should be able to manufacture cloths for export. The article in the Herald points out one way in which to increase our exports to the United States of America, and, as the honorable member for Wannon (Mr. McLeod) interjects, the way in which we could increase employment and thereby attract more population to this country. The article reads -
British tweeds and sports clothes will soon be paying for ‘planes. The credit for this idea goes to the executive committee of the Export Council and the 110 British manufacturers who grouped together to organize a constant shipment of fine wearable sports suits and coats from here to the United States.
Paid for in dollars, the proceeds will immediately be switched over to make an “on account “ payment on our bill for American aeroplanes.
The plan is laid on no meagre basis. In ten weeks about £50,000 worth of British woven and made clothes is expected to be sold.
The article continues on those lines. Here is a means by which Australia could conserve its supply of dollar exchange, so that either we or Great Britain could purchase aircraft and other defence needs.
Wastage of foodstuffs is occurring in Victoria. Some years ago, the Government of Victoria introduced a ban on beef produced at the Werribee farm of the Melbourne and Metropolitan Board of Works, because the competition of that semi-public authority was detrimental to the farmers.
– ‘That was not the reason.
– That was certainly not the reason stated in the Victorian Parlia.ment
– It was not the reason for the imposition of the ban.
– It was one of several strong reasons. I also understand that another reason was a fight between auctioneers who were selling the meat. Perhaps the honorable member for Corangamite knows something about that. The excuse offered in the Victorian Parliament was that the sale of the meat was not in the best interests of the health of the people. That excuse will not hold water. From time to time, inquiries have been instituted as to whether the consumption of this meat was a danger to the health of the community, and innumerable authorities have stated that there could be no detrimental effects if the meat were sold in the market. The disease from which the cattle are supposed to be suffering is known as beef measles. Beef measles is one of fifty odd notifiable stock diseases, many of which - tuberculosis for instance - are very much more injurious to the health of the people. Yet we have this peculiar state of affairs: Ninety per cent, of the area of Victoria is not subject to any meat inspection and in that vast area stock suffering from any of the notifiable diseases can be killed and go into consumption without any inspection whatever and without any attempt by the Victorian Government to rectify the evil. Yet when it comes to this one disease, which is not nearly so deadly as some others, the Government of Victoria suddenly discovers that it would be extremely detrimental to the health of the people if the beef produced on this one area were allowed to go into consumption. The issue has been raised on many occasions, and it was again before the Victorian Parliament last month. The Legislative Council passed the measure repealing the ban, but it was retained by a majority of six votes in the Legislative Assembly. It is clear, therefore, that there is not an overwhelming majority in the Victorian Parliament in favour of the ban. Perhaps this decision had something to do with the winning of the Polworth byelection by the Country party, because undoubtedly the ban was imp’osed with the idea of helping the primary producers to obtain a better price for their beef. Incidentally, I think that view was wrong, because the Melbourne and Metropolitan Board of Works was a large buyer of store cattle; and what the farmers made on the swings they lost on the roundabouts. This tremendous wastage is a matter of concern to the Commonwealth. It is desirable that we should export as much as we can and, if ships are not available to take our exports away, the meat, instead of being boiled down for fat, should be put on the local market so that the people could increase their meat ration if they so desired. I should not object to the meat being labelled “ Werribee Beef “. I know for a fact that many people would prefer it to any other. It is as good as any beef produced in Victoria, and when it was put on the Smithfield market, it was commented on as the best that had appeared there for a long time. The ban costs the Melbourne and Metropolitan Board of Works about £35,000 a year, that being the difference between what the meat would return if sold in the ordinary way and what it returns when boiled down. I cannot see any justification for the ban; beef measles occur elsewhere in Victoria, but no ban has been placed upon beef produced in those areas. It is evident, therefore, that those responsible for the ban do not care what losses it involves. They are anxious only to help one small section. The Commonwealth Government should, in the interests of the consumers, issue regulations under the National Security Act declaring the ban to be invalid.
– The honorable member’s time has expired.
Question resolved in the affirmative.
– I shall ascertain when it will be convenient for His Excellency to receive the Address-in-Reply Honorable members will be notified accordingly.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Mr. Fadden) agreed to -
That it is expedient that an appropriation <if revenue bc made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania.
Standing Orders suspended; resolution adopted.
That Mr. Fadden and Mr. Collins do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Fadden, and read a first time.
– I move -
That the bill be now read a second time.
The purpose of this bill is to implement the recommendations contained in the seventh report of the Commonwealth Grants Commission, which was tabled in the House on the 21st November. As honorable members are aware, legislation was passed in 1933 setting up the commission as a deliberative body to inquire into, and report upon, applications made by any States to the Commonwealth for the grant of financial assistance in pursuance of section 96 of the Constitution. During the last six years, the commission has examined the claims of South Australia, Western Australia and Tasmania for Commonwealth grants, and on each occasion its recommendations have been endorsed by this Parliament.
The commission has now examined the applications of those three States for financial assistance from the Commonwealth during the financial year 1940-41. The grants recommended by the commission, compared with those paid last year, are as follows: -
As these figures show, it is proposed this year to make special grants to the States totalling £30,000 more than th grants provided last year. However, the total amount originally assessed last year by the commission was £136,000 greater than that shown above, but a deduction of that amount was made by the commission to adjust a special advance to Western Australia in 1937-38.
The commission’s total assessment for last year was, therefore, £2,156,000, compared with which the grants now recommended, viz., £2,050,000, represent a reduction of £106,000. I shall deal with this reduction when I come to the grants to the individual States. The following statement shows the grants recommended by the Grants Commission since making it first report. In each case these grants have been paid by the Commonwealth : -
A significant fact revealed by these figures is that whilst the total of the grants reached a peak figure of £2,750,000 in 1935-36, they have now become more or less stabilized. This is highly satisfactory to both the Commonwealth and the States. So long as the present system continues, of course, some fluctuations of the amounts of the grants will be unavoidable.
Wednesday, 11 December 19^0.
The principles upon which the commission bases its assessments of grants have been fully discussed in this House in previous years, and since these principles are unchanged, and are set out fully and clearly in the seventh report, I shall not weary honorable members with details. It will be sufficient to remind them that the grants which the commission recommends are determined by the amount of help necessary in order to enable each claimant State by reasonable effort to function at a standard not appreciably below that of other States, or, in other words, to maintain a fair Australian standard. This involves a comparison of the budgetary results of the claimant States with those of the non-claimant States. After taking into account such factors as relative severity of taxation, expenditure on social services, costs of administration, &c, in the several States, grants are assessed on a basis which places the claimant States in a position comparable with that of the non-claimant States. In short, the policy of the commission, which the Government has accepted in the past, is to assess grants on the basis of financial needs, as indicated by an examination of the finances of all States, claimant and nonclaimant alike.
It must, however, be remembered that, in order to make such a comparison, full statistical information is necessary. For this reason the recommendations contained in the present report are based upon the financial results for 1938-39, the latest year for which the necessary information is available.
Whilst I do not propose to deal at length with the report, there are, I think, several points to which special attention should be directed. Last year the commission felt that the claimant States were not making sufficiently strenuous efforts to improve their financial position, and, consequently, it imposed the so-called “ nominal penalties “ on account of current policy of £22,000, £22,000 and £23,000 for South Australia, Western Australia and Tasmania respectively. These deductions were made because the commission believed that the claimant States should be able to improve their position in times of prosperity. The commission feels that in the present circumstances this might be difficult to accomplish and, consequently, corresponding penalties have not been recommended this year.
In order to make the necessary adjustments which I mentioned earlier, the commission finds it necessary, as a preliminary step, to estimate the taxable capacity of each State. This estimate is based primarily upon the amount of Commonwealth income tax assessed in each State. However, gold-mining profits are not subject to Commonwealth income tax, and to this extent a certain amount of taxable capacity was not included in the estimates. Because gold-mining profits are, in some cases, subject to State income taxation, the commission has, this year, corrected its estimates of taxable capacity to take account of this fact.
For some time the representatives of South Australia have maintained that that State was being penalized by the way in which the commission used federal income tax assessments in its calculations of relative taxable capacity. South Australia claimed that the extra taxation levied on property income, as compared with the amount levied on personal exertion income, was far greater in the case of federal income tax than in the case of the income taxes of the States ; and that, consequently, the taxable capacity of the States was being estimated on the basis of a tax system which was quite unlike that which the States actually did, or could, apply. This year the commission has endeavoured to meet this criticism, and has made a correction of its calculations along the lines suggested by South Australia. The method of correction is somewhat complex, and I shall not burden honorable members with the details, which are clearly set out in the report.
I now wish to refer briefly to the grants which have been recommended for each State. One reason for the fact that the total of the grants this year is £106,000 less than that assessed for last year is that in 1938-39, the year on which the comparative calculations are based, the deficits in the non-claimant States were considerably heavier than in the previous year. Because of drought, bushfires, &c, the comparable deficits of the standard States rose from ls. 6d. a head in 1937-38 to 13s. a head in 1938-39. Because the commission’s assessment is based upon the relative financial position of the States, these heavy deficits in the standard States have tended to reduce the grants payable to the claimant States ; but this tendency has been wholly or partially offset by other influences.
In 1938-39 South Australia also suffered from drought, and its primary industries received a severe check. For the first time in four years that State had a deficit. The commission has allowed South Australia £10,000 more than last year on account of economy in administration, and the penalty for loan losses of the past has been reduced from 6 per cent, to 5 per cent, of normal taxation, thus assisting the grant by £39,000. Taxation was relatively more severe than in the previous year, but the benefit of this was largely offset by higher expenditure on social services. The net effect of all these factors is to give to South Australia a grant of £1,000,000, which is approximately the same as the £995,000 paid last year.
The net amount paid to Western Australia last year was £595,000. This amount was recommended by the commission after deducting from the assessment of £731,000 an amount of £136,000 in order to cover the repayment of a special advance in 1937-38 to meet drought conditions in that year. The grant proposed this year is £650,000, which is higher than the net amount actually paid last year, but lower than the amount assessed. This reduction is mainly due to two causes: first, higher expenditure on social services in Western Australia; and, secondly, the more favorable budgetary position of Western Australia compared with the standard States. This latter fact was largely due to the continued prosperity of the gold-mining industry, which allowed the economic position of Western Australia, despite the effects of a prolonged drought, to be well maintained in 1938-39.
In 1938-39, Tasmania’s economic progress was well maintained, despite the setback experienced in other States. That is the main reason for the lower grant. Taxation was substantially increased in 1938-39. and this tended to offset the effects of the higher deficits in other States. The net result of all these factors is to give Tasmania a grant of £400.000 this year, compared with £430,000 provided last year.
Considerable evidence is available that the work of the commission is thorough and impartial, and that all matters affecting the financial needs of the claimant States have been investigated. The Government, therefore, believes that the amounts recommended by the commission will adequately meet the needs of the claimant States, and, consequently, as in past years, has decided to accept the recommendations of the commission.
Sitting suspended from 12.li. to 12.85 a.m.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Mr. Fadden) 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 defence purposes.
Standing Orders suspended ; resolution adopted.
That Mr. Fadden and Mr. Anthony do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Fadden, and read a first time.
Mr. FADDEN (Darling Downs-
Treasurer) [12.39 a.m.]. - I move -
That the bill be now read a second time.
The purpose of this bill is to appropriate for defence and war expenditure on works and armaments an amount of £2,928,376, which represents the excess receipts of the Consolidated Revenue Fund during 1939-40. By the Defence Equipment Act of 1934, a defence equipment trust account was established, into which, with the approval of Parliament, various amounts have since been paid with the object of relieving the revenues in later years. The purpose for which amounts standing to the credit of this account may be used are -
An amount of £35,809 remained in the trust account at the 30th June last from the excess receipts of 1938-39. This was set aside last year for expenditure on defence equipment, and together with the amount of £2,928,376, which it is now proposed to appropriate for a similar purpose, a total of £2,964,185 is available for expenditure on works and armaments in 1940-41 from the trust account. Details of the items on which this amount is to be expended will be found on page 353 of the Estimates. The policy of treating excess receipts in this way has been approved by Parliament in a number of instances in the past.
– Can the Treasurer (Mr. Fadden) indicate exactly what extension of the manufacture of armaments and munitions the Government contemplates undertaking in New SouthWales ? I have in mind an earlier decision to expend some of this money on the construction of a cordite factory at Albury. For reasons which I have not been able to ascertain, the Government subsequently decided to construct the factory in South Australia, where it has now been completed. Owing to the fact that not less than 35,000 unskilled workers are unemployed in New South Wales, I should like more information concerning the Government’s proposed activities in that State. I understand that the Government intends to undertake work of this kind in New South Wales, and, perhaps, the Treasurer will now supply details of those proposals.
– in reply - At the moment I am unable to give to the honorable member the information for which he has asked. However, when the Estimates are being considered, I shall be able to supply such details in respect of, not only New South Wales, but also the other States.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
In Committee of Ways and Means:
Motion (by Mr. Anthony) agreed to -
That a tax be imposed upon all wheat harvested in Australia on or after the first day of October, One thousand nine hundred and forty-one, whichis acquired by the Commonwealth.
That the rate of tax per bushel of wheat be fifty per centum of the amount by which the price per bushel of wheat exceeds Three shillings and ten pence.
That the tax continue in force until six months after the termination of the present war between His Majesty the King and Germany and no longer.
That, for the purposes of this Resolution, “ price “ means such price as the Minister of State for Commerce, from time to time, by Order published in the Gazette, declares to be the average price free on board at Australian ports, from which wheat is usually exported, of wheat bagged in new cornsacks.
Standing Orders suspended; resolution adopted.
That Mr. Anthony and Mr. Holt do prepare and bring in a, bill to carry out the foregoing resolution.
Bill brought up by Mr. Anthony, and read a first time.
– I move -
That the bill be now read a second time.
This bill imposes a tax upon wheat, as part of the Wheat Industry Stabilization Plan which will operate from the commencement of the 1941-42 season. The price of 3s.10d. a bushel will be guaranteed to growers in respect of all wheat harvested after the 1st October, 1941, and acquired by the Commonwealth.
When the declared free on board price of wheat exceeds the guaranteed price, a tax equivalent to 50 per cent. of the amount of such excess will be imposed. The tax will operate in the following way: - In addition to the guaranteed price, 50 per cent. only of the total amount by which the free on board value exceeds the guaranteed price will be paid to wheat-growers. The remaining 50 per cent. will be paid into the Wheat Industry (War-time) Stabilization Fund. When the free on board value is less than the guaranteed price, the Commonwealth will be bound to pay to wheat-growers the difference. For this purpose, the Commonwealth will use the moneys in the Stabilization Fund resulting from tax collections before it provides the required finance by other means. Honorable members will appreciate that wheat-growers are protected in adverse seasons, and will share the benefits in seasons when prices are high.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 29th November (vide page 321), on motion by Sir Earle Page -
That the bill be now read a second time.
– This measure proposes to stabilize the wheat-growing industry, but I am not in favour of certain provisions. So many restrictions will be placed upon the industry that I am fearful of the result. One of the most objectionable features of the plan is the proposal to restrict the acreage to be sown next season. That, in itself, is a defeatist policy and is strenuously opposed by wheat-growers’ organizations, because the principle is most dangerous. Twelve months ago the Minister for Commerce (Mr. Archie Cameron) advocated a restriction of acreage or, failing that, he advised farmers voluntarily to grow less wheat than they had grown in the previous season. At the time, I commented that the Minister had no justification for assuming that the following year would produce a bountiful harvest. If production had been restricted on that occasion, the effect upon Australian economy now would be most serious. The previous season produced the second biggest crop in the history of the Commonwealth, namely, 210,000,000 bushels. The record harvest of 213,000,000 bushels was grown ten years ago. The Australian Wheat Board estimates that by the 31st December next it will have a carry-over of only 25,000,000 bushels, although it received into the pool about 195,000,000 bushels. That implies that the board has disposed of 170,000,000 bushels.
– The board has not yet shipped that quantity of wheat.
– About 36,000,000 bushels has yet to be shipped. According to figures released by the Commonwealth Statistician, this year’s crop, on account of the abnormally dry season, will total only 80,000,000 bushels. Consequently, even with the carry-over of 25,000,000 bushels, the Commonwealth’s supply of wheat will be 70,000,000 bushels below last season’s requirements. Diseregarding this obvious shortage, the Government now proposes so to restrict the acreage to be sown this year that the harvest will not exceed 140,000,000 bushels. Such a policy is inimical to the best interests of Australia, and will not stabilize the industry. No other country has adopted a similar plan.
In 1936, France harvested an abnormally heavy crop totalling 270,000,000 bushels, and created a board to ensure orderly marketing and to control production. Last year, the French harvest exceeded 300,000,000 bushels, and the board disposed of the surplus of 30,000,000 bushels. That body has functioned most efficiently, because the majority of the members represent the growers. The Labour party has taken strong exception to the composition of the Australian Wheat Board, because the farmers’ representatives are in a hopeless minority.
– What good purpose can be served by citing the example of France, which is under German domination ?
– I am showing how the problems of the wheat industry were dealt with in that country. The Central Committee of the National Wheat Board in France is composed of 52 members, of whom 30 represent wheat producers. There are also nine representatives of millers, bakers, &c, nine representatives of consumers, and one from each of the Ministries of Agriculture, Finance, National Economy and the Interior. It willi be seen that the 30 representatives of the wheat-growers constitute a majority of the committee. That is entirely in conformity with the policy of the Australian Labour party.
In his second-reading speech, the Minister for Commerce (Sir Earle Page) said that the principal feature of the Government’s plan for the stabilization of the wheat industry is that there shall be a guaranteed price of 3s. lOd. a bushel free on board for bagged wheat of an acquired crop of 140,000,000 bushels. All costs of receiving, handling, railing and storing the wheat, and placing it on board ship, will be found out of this price. At first glance this may seem to be a reasonable price ; but, when one realizes that production is to be restricted to 140,000,000 bushels, and that, on the basis of the charges of the Australian Wheat Board against wheat in Nos. 1 and 2 pools, over lOd. a bushel will be deducted for bagged wheat, and 2d. a bushel less for silo wheat, one finds that the price represents less than 3s. a bushel at country sidings, which is less than the cost of production. The Gepp Commission estimated that a payable price for wheat was about 3s. 6d. a bushel, but, since that body presented its report, the farmers’ costs of production have increased considerably, particularly in respect of superphosphates and machinery. The costs are now 3d. or 4d. a bushel more than they were at that time. The industry is in a precarious condition to-day, despite the fact that, last year, a prolific yield was obtained, and over 195,000,000 bushels was received into tie pool. According to the board’s estimate, the growers have so far received approximately 3s. lO.lld. a bushel. Yet the farmers are now asked to continue their industry, despite a reduction of their output by 55,000,000 bushels.
The restrictions being imposed on the growers under this plan are intolerable, and should not be accepted. Statutory Rule No. 26S of 1940 contains regulations under the National Security Act relating to the stabilization of the wheat industry. The regulations state -
– ( 1 ) There shall he a Wheat Industry Stabilization Hoard, which shall consist of three members appointed by the Minister by notice published in the Gazette, who shall hold office during the pleasure of the Minister.
The duties of the board shall be -
I wonder whether the fanner will he supplied with a collar, and ordered to wear it round his neck. This regulation reminds me of the “ dog collars “ allotted to waterside workers under the Transport Workers Act. No Soviet legislation more effectively deprives the subject of his liberty than do these regulations, which are an insult to the wheat-growers. The regulations further state - 8. - (1) The owner of any wheat farm may make application to the board, in accordance with Form A in the Schedule to these Regulations, for the registration of that wheat farm under these Regulations.
It is clear that the growers are to be at the mercy of the board. The record of the Australian Wheat Board is one of muddling and bungling, and, since it has taken control of the marketing of wheat, no expression of satisfaction ha3 come from any grower or growers’ organization regarding the board’s methods. The regulations further provide - 9. - (1) Any person may make application to the board, in accordance with Form B in the Schedule to these Regulations, to be licensed as a wheat-grower.
In a season such as the present, nobody can foretell what will be the state of the wheat market next season, or what the production will be, and the growers will object to this interference with their liberty and with the economic fabric of Australia. The concluding subclause of clause 9 of .the regulations reads as follows: -
The next two clauses are -
A wheat-grower shall not -
harvest for grain any wheat sown for hay or sown in contravention of these regulations; or
contravene or fail to comply with any condition of registration.
A farmer who was allowed to grow 30 or 40 acres of wheat for hay might find that his production on his area grown for grain was much below the estimated crop. Yet under these stupid regulations he could be compelled to cut 30, 40, 50, or even 100 acres for hay, although he knew quite well that it would be of distinct advantage to himself and the country that the whole of it should be harvested for grain. These regulations should not be tolerated. When the growers realize their import, a revolt will occur throughout the wheat-growing areas.
I have yet to witness the successful operation of a wheat scheme under departmental supervision. Varying legislative measures have been passed in the several States for the purpose of granting relief to farmers, and the supervision of their holdings has been taken out of their hands. There may be exceptions, but, in well over 90 per cent, of cases, government supervision has proved disastrous. Unworkable restrictions have caused great hardship, and, under these new regulations, the troubles of the farmers will be intensified. The wheat-growers in New South Wales are already chafing under irksome government restrictions. Their freedom has been taken away from them; but the restrictions already imposed are as nothing compared with those contained in these iniquitous regulations. Wheat-growers would be much better off if they were left to decide their own fate. The No. 2 Wheat Pool has not yet been finalized. The Australian Wheat Board is handling 195,000,000 bushels and growers have received the same price for that crop as they will receive for the limited crop of 140,000,000 bushels. Even allowing for the carry-over from the abnormal crop of 210,000,000 bushels, the crop next season will be 75,000,000 bushels less than that harvested this season. Regulation 12 prevents a farmer from sowing wheat even for domestic use, either for food or fodder, unless he is a registered grower. These regulations constitute a reflection on the Government, and indicate its policy of defeatism in connexion with the wheat industry. The Government’s scheme for the control of the industry should be scrapped and replaced by an orderly marketing scheme based on those operating successfully in other parts of the world.- In France, production is pegged and wheat-growers receive advances from the Agricultural Credit Bureau, which is guaranteed by the Bank of France. A similar credit organization could be established in Australia, guaranteed by the Commonwealth Bank. Among the several schemes submitted by the wheat-growers’ organizations in Australia, the most popular was that based on the French system. The Government scheme provides for the payment of only 3s. lOd. a bushel f.o.b., which is equivalent to less than 3s. at country sidings, whereas the most popular scheme submitted by the wheat-growers’ organizations provided for a guaranteed price of approximately 4s. a bushel in respect of the first 3,000 bushels. The wheat-growers are anxious to protect the interests of the small men. The position of the large wheat-growers in Australia is much the same as that of the large wheat-growers in Europe. In France, the average price paid for homegrown wheat during the period’ 1935-39 was 6s. 7d.; in Germany, it was 9s. 6d. ; and in Italy, it ranged between 6s. 6d. and 9s. 6d. a bushel. In their handling of the wheat problem, the governments of those countries fixed the price of homegrown wheat as low as possible in order to enable the people to get cheap bread; but the cost of production was so great that in order to encourage the wheat-growers high prices were paid for home-produced wheat in spite of the fact that those countries were close to the largest wheat granaries in the world, where wheat could be purchased much more cheaply. The wheat industry in those countries was stabilized in order to protect the small growers. If the small grower is protected by a guarantee of approximately 4s. a bushel in respect of the first 3,000 bushels,- he will be sure at least of getting £600 for his harvest and will be quite satisfied to have the residue of his wheat marketed to the best advantage, either through a control board or a pool. The plan outlined by the Government completely disregards the’ interests of the small grower. Even big wheat-growers have supported the establishment of a stabilization scheme with a guaranteed price in respect of the first 3,000 bushels. They recognized the need for encouraging the small grower. In my electorate, some growers harvest up to 130,000 bushels of wheat. A yield of from 20,000 to 40,000 bushels is quite common in that area. Large growers can produce wheat profitably when the price is a little over 2s. a bushel, but the small grower, reaping not more than 400 acres of wheat, finds his production costs much higher. The scheme submitted by the Government will strike the death-knell of the small growers. The result of these regulations will be a calamity to the small growers. When the disastrous provisions of these regulations become known, there will be such an outcry that they will have to be withdrawn. I venture to say that if the provisions of these regulations had been inserted in a bill, it would have been incontinently thrown out by the members of this House. Honorable members opposite representing country districts know the difficulties confronting the wheatgrowers, and at heart they know that the Government’s scheme has nothing to commend it. No regulation more souldestroying or more destructive of individual effort than the regulations now before us was ever issued even in Soviet Russia.
.The wheat-growers throughout Australia have for a long time asked for a permanent stabilization scheme to place the industry on a sound footing. The regulations now before us are at least an attempt to do so, and I am rather surprised at the attitude taken by the honorable member for Gwydir (Mr. Scully) regarding them. The honorable member knows that for a long while the wheat-growers have been asking for a compulsory wheat pool. That presupposes binding regulations so that there shall be no “ scabs “. Although the honorable member made such a mouthful of the compulsory nature of this scheme, he is well aware that all trade unionists have to accept certain obligations in the interests of the whole of the members. It would be impossible to stabilize the wheat industry without regulations. To my mind, the Government’s proposition is reasonable. It at least provides that all of the farmers shall share alike. It would be unfair to put some farmers on a different footing from others. The Government is anxious to assist the wheat industry, and, for that reason, is providing substantial sums of money to remove farmers from what are known as marginal lands.
None of us is likely to forget the appeal made to the farmers of Australia by the former Labour Prime Minister (Mr. Scullin) to grow more wheat, livery envelope that passed through our post office for a certain period during the regime of the Scullin Government bore the slogan, “ Grow More Wheat “. At that time the wheat industry was considered to be valuable to the country. Unfortunately, owing to the development of intense nationalism in overseas countries, and the application of a high protectionist policy in countries which were previously under freer trade, Australia lost many of its overseas wheat markets. Avenues of sale that were once open to Australian wheat are now closed. Years ago our wheat industry not only brought approximately £22,000,000 a year into this country, but it also provided wheat for the Australian people at a lower price than it could be obtained in any other country. The right honorable member for Yarra realized the value of the wheat industry, and I cannot understand why some members of the Labour party should now be advocating the skinflint policy of a fixed price of 3s. 10 1/2d. a bushel limited to 1,000 bags of wheat from individual farmers. The protectionist policy of this country has general application to all other industries, no distinction being made between large and small concerns. The Broken Hill Proprietary Company Limited, for example, enjoys a full measure of protection, and so does General Motors-Holdens Limited, although it recently returned a profit of 83 per cent, to its shareholders. In these circumstances it is difficult to understand why honorable members opposite should wish to place a limit on the protective policy in respect of the wheat industry.
It has also been proposed by honorable members opposite that the flour tax should be repealed. The honorable member for Gwydir would find difficulty in justifying his attitude on that issue to the wheat-growers in his constituency. Our farmers have for many years advocated the fixing of a minimum price for wheat for home consumption. Seeing that arbitration tribunals fix the wages of the workers, and that the Tariff Board recommends the degree of protection that should be granted to manufacturers, it is only reasonable that this Parliament should determine the standard to be afforded to the wheat industry, particularly as the growers have to pay tariff-adjusted prices for all the commodities which they require. The fact that wheat is a staple food should have no bearing on this aspect of the subject. Wheat is, in effect, the stockintrade of the farmer; he depends upon it for his livelihood. I do not regard the flour tax as an impost on the bread of the poor, although the honorable member for Capricornia (Mr. Forde) has declared that it is so. That honorable gentleman is wholeheartedly in favour of fixing the price of sugar for home consumption, and I cannot see any reason why he should object to a flour tax in order to permit the fixing of the price of wheat for home consumption. Such protection as we accord this industry should apply equally to all wheat-growers whether their operations are on a large’ or small scale. It would be inequitable’ to limit the assistance to 1,000 “bags ofwheat. Some squatters could grow 1,000 bags of wheat in a relatively small corner of their properties. As we intend to protect the industry, we should do it properly. If the Government were to accept the proposals of the Labour party, it would have to abandon the scheme under which a fixed price must be paid for wheat for home consumption. The result would be that the farmers would lose ls. 2d. a bushel on such wheat. In fact, an amount of £1,866,000 would be taken away in one act from the wheatgrowers. This would be equivalent to £45 for each individual wheat-grower.
I have not examined this bill carefully, but I know that the principles of it have been approved by the Australian Agricultural Council. I have always been an advocate of a compulsory pooling system. As honorable members seem disposed to agree that this system is necessary to meet war conditions, I hope that they will also consent to retain it -after the war is over. I welcome the bill as the first instalment of a comprehensive stabilization scheme.
.I can see very little in the Government’s proposal that is likely to be beneficial, and a good deal that is definitely objectionable to the wheat-growers. The wheat-growing industry is in a serious financial position at the moment. I understand that farmers’ debts aggregate about £150,000,000. A compulsory wheat pool which has been in operation in Queensland for some years has worked effectively. The only troubles experienced have been due to the manner in which constitutional power is divided between the Commonwealth and the States. The best that . can be said for this Government’s proposal is that it provides for a compulsory wheat pool. The details of the scheme are objectionable to me in that they amount to another attempt to regiment a section of the people and take from them the freedom which they have hitherto enjoyed. The stabilization scheme outlined in the policy speech of the Leader of the Opposition (Mr. Curtin) is better than that now proposed by the Government. The Labour party is of the opinion that the fixed price of 3s. 10£d. a bushel should apply to not more than 3,000 bushels, or the first 1,000 bags, of wheat produced by any one grower. Partners may grow as much wheat as they choose, but in respect of any quantity in excess of 3,000 bushels, they would, under the Labour party’s proposal, take ordinary market risks. 1 cannot see any provision in the bill for insurance protection against hail and other damage such as is provided in the Queensland act.
In the light of existing world conditions, it would be advisable, in my opinion, for us to store two years’ supply of wheat in this country, but as this would require the provision of extensive credit for the erection of very many reinforced concrete wheat silos, it does not seem to be practicable at the moment.
I direct attention to what appears to me to be a serious anomaly in connexionwith the wheat industry. Bread, which is made from wheat, is the chief food on the poor man’s table. I understand that it takes 48 bushels of wheat to make a ton of flour. That quantity of wheat at 3s. 10 1/2d. a bushel would cost £9 4s. A ton of flour makes 1,333 loaves of bread which, if sold at 6d. a loaf, would yield £33 6s. 6d. The difference between the price of a ton of flour and the price of the bread made from the flour is thus £24 2s. 6d. “Who enjoys the benefit of that remarkable margin? There is scope here for an investigation by the Commonwealth Prices Commissioner, though I consider that the Government should appoint a royal commission to inquire into the price of bread in relation to the production costs of wheat and flour.
The continuance of the flour tax is also a serious defect in the Government’s scheme. This impost is a special infliction upon the poorer sections of the community. Every one must agree that more bread is used in the families of the poor than in the families of the rich. Consequently, the flour tax is a class tax of the worst kind.
The policy enunciated by the Leader of the Opposition during the last election campaign of limiting the payment of 3s. 10d. a bushel to the first 3,000 bushels of wheat produced by any individual farmer is preferable to that expressed in this bill. I agree with the honorable member for Gwydir (Mr. Scully) that this is another application of the “ dog collar “ tax, and that, when given the opportunity, the wheat-growers of this country will make clear their disapproval of the Government which introduced it.
.In my opinion this scheme for the stabilization of the wheat industry is the best attempt which has been made during the last ten years to put the industry on a sound footing. The successful control of 195,000,000 bushels last year which is demonstrated by the fact that, by the 31st December next, all but 23,000,000 bushels of that crop will have been sold, despite the difficulties caused by restricted shipping and war conditions generally, is a wonderful achievement. Compared with prices during previous years the price at which that wheat has been sold is satisfactory. No scheme for the stabilization of the wheat industry that has been put forward has had greater support from the wheatfarmers than has this scheme which the honorable member for Gwydir so roundly condemned. The proposal before us is similar to what is known as the WilsonUppill plan which was placed before the wheat-growers of Australia two years ago. At Horsham some time ago Senator Wilson placed his scheme before 400 representatives of the wheat-growers, and the vote which was taken subsequently showed that all but about ten of them supported it. This stabilization plan is put forward under the National Security Act, but I hope that the wheat-farmers, having had some experience of control last year, and for the duration of the war, further control under this legislation, will agree to the stabilization of the industry on the same basis after the war when the national security legislation will cease to operate. This is a wartime measure which need not necessarily remain in force after the war, but it is a better scheme than that which was advocated before the last election when a bait of 3s. 10£d. a bushel was held out to small farmers.
– Does the honorable member think that that was too high a price?
– Then why does the honorable member refer to it as a bait?
– Others besides small farmers should be considered. Men with big commitments have been the back bone of the wheat industry in this country for many years. .Some of them have been forced to send their capital out of this country, because they have no,t received a payable price for their wheat. These men are not convinced that 3s. lOd. a bushel is enough. .Should the price exceed that amount on the basis of the export and home-consumption prices combined, the farmer will get 50 per cent, of any amount in excess of that rate, and the money will be placed in a fund in order to stabilize the industry should wheat prices fall. The honorable member for Gwydir said that no farmers’ organization in Australia would support this bill, but I point out that various associations of wheat-growers as well as the Wheat-growers Federation are supporting it whole-heartedly. An official statement setting out the attitude of the South Australian Wheat-growers Association to the wheat stabilization proposals of the Commonwealth Government contains the following: -
Although it is not the province of our Association to suggest that the amount of 140 million bushels is more than the Commonwealth can market at a reasonable price, particularly as we have not access to information which should be held by the Commonwealth Government, it does seem that the suggested total marketed crop of 140 million bushels, to which we must add, say, 20 million bushels retained on farms for seed and feed, giving a total crop of about 160 million bushels, is rather a lot for the Commonwealth to handle at a payable price.
Under the heading “ Is the price too low ? “ the official statement continues -
Undoubtedly there will be growers who still contend that the price is still too low. They will contend that since the Wheat-growers’ Federation laid down its policy of 3s. lOd. costs have increased considerably, and this is undoubtedly a correct contention, but the position which wheat-growers have to face now is this: The Commonwealth has agreed with the price laid down by the Wheat-growers’ Federation. Can growers now refuse to accept their own terms and throw the whole position into confusion, with a serious danger of alienating the sympathy of the .public and the governments of Australia which the3’ at present enjoy?
It would seem that the only sound attitude for farmers to take is that they will cheerfully co-operate with the Commonwealth proposals, admitting that at least a bottom has been put into the wheat industry.
With some of the regulations which have been issued by the Government I disagree. However, the Government is generous in giving a guarantee in respect of 140,000,000 bushels, and the price is fairly satisfactory, notwithstanding that production costs have increased since the outbreak of war.
– Why does not the honorable member admit that it is a good price ?
– The honorable member for Gwydir objected to the proposed restrictions, hut I contend that they are so small as to be of little importance. The average wheat yield for the last five years has been 170,000,000 bushels, and the average delivery 150,000,000 bushels. For the last ten years the average yield has been 173,000,000 bushels and the average delivery 153,000,000 bushels. A reduction of 10,000,000 bushels in the delivery for each of the last five years period would mean a reduction by 6.6 per cent, of the total quantity of wheat delivered, or 5.8 per cent, of the total yield. Over the ten years period a reduction of 13,000,000 bushels delivered would affect the total delivery by 8.5 per cent. and reduce the total yield by 7.5 per cent. It will be seen therefore that the proposed restrictions are so small as to be of little account. I have no fault to find with the proposed restrictions in respect of wheat delivery; nor do I object to the registration and licensing of farmers. If farmers are prepared to accept a government guarantee as to price, they should be prepared to accept control, so long as they are not robbed of the right of complete management of their own affairs. I contend that the scheme does not rob them of that control. As the Commonwealth Government will assist the wheat-growers financially it must have some control of finance.
– Surely the honorable member does not stand for a restriction of production?
– I do not advocate a restriction of the area to be planted; a maximum delivery of 140,000,000 bushels could be obtained by restriction on a percentage basis. It would mean a restriction of only 5 per cent, which, after all, is not much. I do not think that, at this juncture, any restriction of areas will be imposed, in view of conditions in the Aus tralian wheat industry and the world outlook generally. Regulations have been framed to meet all contingencies, but they may not be put into operation. A farmer who is registered should furnish sufficient information to enable the authorities to decide what quantity of wheat he may deliver to the pool. I think that the Government is wrong in saying that a farmer shall not sow more than a certain area. It would be easier to instruct him not to deliver more than a certain quantity of wheat. For instance, a farmer who has delivered an average of, say, 3,000 bushels of wheat, over a period of five years when the average delivery amounted to 150,000,000 bushels, would deliver only 6 per cent, less on the basis of a crop of 140,000,000 bushels. The farmers do not favour the provision requiring them to cut for hay a proportion of a promising grain crop in order to keep the total yield below 140,000,000 bushels. In that respect, they disagree with the regulations. The bill does not define the basis of restriction - whether it shall be area or quantity delivered. I should like to see fresh regulations framed to cover these points.
The honorable member for Gwydir criticized severely the schedule to the regulations which relates to wheat grown in the years 1937-38, 1938-39, 1939-40 and 1940-41. I submit that the present year, 1940-41, should not be included. The Government should go back to 1935-36 or 1936-37 in order to ascertain a farmer’s average sowing and yield, and his delivery quota should be based on that average. The honorable member for Gwydir also criticized the Wheat Board severely. In my opinion, the sale by that body of 173,000,000 bushels of wheat is a wonderful achievement. The honorable member advocated the disbandment of the Wheat Board, but I contend that no board which has controlled any Australian primary produce during the past twelve months has a better record to its credit. The manager, Mr. Thomson, knows the wheat business from A to Z. I hope that his services will be retained by the Government. Last year, when the wheat scheme was put into operation and the pool was placed in its charge, no preparations had been made. The board has now taken control, and has done very well. Mr. Thompson receives a salary of £3,000 and, pitting himself against the English buyers, he saved Australia £360,000. It is contended that he receives a salary of £5,000. That is not correct. He was paid a disability allowance of £2,000 to enable him to transfer himself and his family from Western Australia to Melbourne.
The honorable member for Gwydir (Mr. Scully) has said that the Wheat Board has bungled and muddled, and brought about chaos in the industry. No board has done better. If we compare the present control with that exercised by the Commonwealth wheat pools of 1935 to 1919 we shall find that it has been a huge success. In the period from 1915 to 1919 there was a series of wasteful wheat pools. A good price was obtained for the wheat sold, but perhaps it was not so good as it would have been had greater care or control been exercised. The Commonwealth sold the wheat overseas. Complementary legislation was passed in all of the wheat-growing States, but no other control was exercised. Under the present wheat board, there is control in every conceivable direction. In my electorate, there are two of the largest wheatgrowing areas in Australia, and in them the wheat has been so well protected against weather, mice and vermin that no waste has occurred. I hope that the Government will attempt to continue the wheat stabilization scheme after the termination of the war. I point out to the Minister that the regulations do not contain a definition of “ bona fide wheatgrower “ and do not make clear the meaning of “ wheat-grower “. Six or seven years ago, when Sir Frederick Stewart was Minister for Commerce, some difficulty was experienced in obtaining for the share farmer his portion of the bounty payable. Clause 9 of the regulations, which deals with the registration of wheat-growers, should contain a provision setting out who is to be registered as a bona fide wheat-grower, such as farmers whose chief source of income is derived from wheat-growing. There should be a further provision clarifying the meaning of “ wheat-grower “ ; for example, “ a wheat-grower is a farmer who owns, rents, or share farms a farm on which wheat has been grown from some substantial portion of that farm each year during the last five years “. I support the bill.
.The honorable members for Forrest (Mr. Prowse) and Grey (Mr. Badman) seem to have the impression that the Labour party objects to a stabilization scheme. Such is not the case.
– I did not say so.
– We strongly object to the scheme put forward, which contains many objectionable features. The most objectionable feature is that it attempts to restrict acreage and production. A much wiser man than any gentleman who had anything to do with the formulation of the proposal to restrict acreage, in the person of Dean Swift, gave it as his opinion that whosoever could make two ears of corn or two blades of grass to grow upon a plot of ground where only one grew before, would deserve better of mankind and do more essential service to his country than the whole race of politicians put together. The speeches of the honorable members for Forrest and Grey support my contention that the Government scheme contains many objectionable features, the most objectionable feature being that it restricts acreage, and consequently production. I agree with some of the points put forward by the honorable member for Forrest. It is not equitable that a squatter who grows a thousand bags of wheat in a corner of his property should obtain the benefits of a scheme which provides more than an average price for a restricted acreage. I do not think that any scheme which limits the acreage for which a fixed price shall be paid can be regarded as equitable. Restriction of acreage has the extremely objectionable feature that it is opposed to all of our conceptions in regard to closer settlement. For many years the Governments of both the Commonwealth and the States have formulated schemes of closer settlement. This proposal militates against closer settlement. Take a station of 10,000 acres of grazing country in a safe belt, for which the inflated value of about £8 an acre was paid because of certain factors over which the purchaser had no control. He finds that it is impossible to work the land economically by grazing operations alone, and, consequently, must go in for mixed farming. He decides to cultivate a certain portion of his holding, but because wheat has not been grown on it in the period stipulated in this scheme, he is precluded from doing so. He may have son3, among whom he may decide to subdivide the country. It is impossible for a family of three or four sons to make a living from land previously worked by one family, except by engaging in other forms of primary production. He decides upon cultivation, but is precluded fo-om thus utilizing the land to the best advantage. One farm may be used for cultivation purposes, and land adjoining it be not so used because the holder of it has insufficient capital to clear, fence, and prepare it for cultivation. There are many factors of which only those who are intimately associated with wheatgrowing and primary production generally in certain areas are aware. The scheme is ill-conceived. It could not be otherwise, because those who propounded it have had no experience of primary production. There is a Country party associated with the Government, but what part of the country its members represent I do not know ; probably country towns.
The honorable member for Grey has stated that great work has been done by the Wheat Board, which managed No. 1 and No. 2 pools. Figures supplied by the Department of Commerce show that the cost of handling wheat, f.o.b., has been over ls. a bushel. No wheat-handling agency in this country would have the brazen effrontery to charge ls. a bushel to handle wheat from the point of production until it was placed on board ship.
– The figure given by the honorable member is not correct.
– The following figures were supplied to the Young branch of the Farmers and Settlers Association of New South Wales: -
The addition of freight makes the total more than ls. a bushel. The deduction of ls. Id. for handling charges from the guaranteed price of 3s. lOd. a bushel gives a net return to the farmer of 2s. 9d., whereas the wheat commission reported that farmers could not profitably grow wheat at less than 3s. lOd. a bushel. The State Premiers asked for an irreducible minimum of 3s. 6d. a bushel at country sidings, but the Government would not budge. At the last general elections the Labour party offered the wheat farmers 3s. 1(kid a bushel free on rail. The Government’s plan, which is vastly different from ours, was devised by people inexperienced in wheat farming. It is the product of the Wheat Board which the honorable member for Grey (Mr. Badman) eulogizes. That board is managed by a gentleman to whom the Government pays £3,000 a year in salary and £2,000 a year in allowances. There are many public servants who would be able to look after the affairs of that hoard much more cheaply. This legislation is a final insult to the intelligence of the farmers. It is an attempt to delude them into the belief that they will receive more from this scheme than they receive from the No. 2 pool.
– I protest against this bill. The Minister for Commerce (Sir Earle Page) in moving the second reading declared that the bill crowned twenty years of effort to bring about stabilization of the wheat industry, but it is a very feeble effort at stabilization, because it offers absolutely no prospects of recovery to the farmers and does not ensure that the farmers will receive even the production cost of their wheat. Up to 1930 the wheat industry was in a reasonably sound position, but to-day it is at its lowest ebb. For 25 years prior to 1930, according to figures presented to the Gepp Commission, the average net return to the farmers was 4s. 4d. a bushel, but under this scheme their return will be only 2s. 8 1/2d. a bushel at country sidings. That return is insufficient to lift the industry from the slough. Instead of stabilization this bill will result in more bankruptcy. Under the Labour party’s plan the farmers would be 6d. a bushel better off. That 6d. represents the difference between success and failure.
The Minister said that the stabilization plan would bring about voluntary debt adjustment, but no one will voluntarily adjust debts. The figures used in bolstering up the Government’s plan are misleading to the general public, because the price set out is inclusive of handling charges and in no way represents what will be received by the farmer. The average man cannot profitably grow wheat at 2s. 8d. a bushel on a small farm. When war broke out the Wheat Stabilization Committee was about to draft legislation under which the price of wheat at country sidings would be 4s. a bushel over 3,000 bushels. That would have been the salvation of the small farmer. No doubt the big landholders and the companies whose activities are diversified will derive benefit from this legislation, but the man who has only 200 or 300 acres of land cannot engage in mixed farming, and there is no salvation in this scheme for him. I do not think that many honorable members realize the0 difficulties of men who are trying to earn a living from wheat on small areas under the existing mortgage system. The recommendation of the royal commission was for a reduction of the interest on mortgages to 2^ per cent. It was proved before that commission that interest charges represented in a bushel of wheat amounted to ls. 9d., which is only ls. less than the net guaranteed price. In good seasons farmers could probably make a profit out of wheat at 3s. 3d. or 3s. 4d. a bushel at country sidings, but not in bad seasons. The wheat industry is slipping back and it is dragging the small business people in the country towns with it. I support the contention of the Premier of New South Wales that the farmers should he paid 3s. 6d. a bushel at sidings. The drift from the land will never be arrested until the primary producers are assured of a profit. Under present conditions sons of farmers cannot be blamed when they go to the cities in search of work. I have two sons who know as much about farming as it is possible to know. They are working for wages, because what I earn from my farm would not keep me, let alone them. I see no solution of the farmers difficulties in this plan.
– I have perused this bill with a good deal of surprise. Its purpose, evidently, is to achieve planned economy in the wheat industry, and it has been introduced by a Government representative of those interests which have always condemned planned economy, which have always accepted the law of supply and demand, and which contended that no restrictions should he placed on private enterprise. Yet the very essence of this scheme is that there shall be planned economy for the wheat industry, that it shall, in effect, be sovietized. that it shall be controlled, and that the wheat-farmer shall be told how much wheat he shall grow, when he shall grow it, and what price he shall receive for it. The Government is repudiating everything for which it has stood in the past. During the last election campaign, it went before the people telling them that the Labour party was dangling a bribe before the farmers when it offered them 3s. lOd. a bushel for their wheat; yet the Government has now meekly bowed the knee, and itself offers the same bribe to the growers, a bribe which, by the way, is insufficient by 6d. a bushel. Attached to the offer, however, is the undesirable condition that production shall be restricted. One might be able to understand a proposal of this kind coming from the Labour party, which has always stood for planned economy, particularly in primary production. The Government has chosen the least organized and least articulate section of the community to which to apply its restrictive measures. No restriction is placed on the Broken Hill Proprietary Company Limited as to the number of coils of barbed wire or tons of galvanized iron it shall produce. No restrictions have been placed upon firms producing radios, or upon MacRobertson s Limited as to the quantity of chocolates to be manufactured, but it is proposed to restrict production of the staple food of the people. The Government proposes to tell the primary producer that he shall harvest 200 acres for seed wheat, that he shall cut and bind and stook and stack 100 acre3 of wheaten hay, which any farmer knows will not keep in good condition for more than twelve months. Then, if the farmer buys stock to consume the hay, he will be no more likely to find a market for the stock than for the wheat if he had harvested it. This measure will react against the Government which has introduced it. There should be incorporated in the bill provision for financing farmers who desire to change over from wheat production to some other kind of farming.
Last session I heard the honorable member for Barker (Mr. Archie Cameron) and the right honorable member for Cowper (SirEarle Page) say that wheatfarmers should produce hay for stock raising, or should turn over to dairying, or pig raising or poultry keeping. Do they not realize that it is beyond the financial capacity of farmers to switch over from one form of production to another? A man cannot begin dairying unless he is able to buy at least 10 cows, nor can he become a poultry farmer unless he is able to buy 500 fowls, or whatever the minimum number may be. The bill should be withdrawn, and redrafted so as to incorporate the proposals put forward by the Leader of the Labour party (Mr. Curtin) in his policy speech. That policy was obviously acceptable to the people, a fact which is demonstrated by the increased strength of the Labour party, which polled particularly well in the wheat-growing constituencies. I have always been in favour of co-operation, and I am glad to know that, during the war, wheat is to be disposed of on the co-operative plan. I do not, however, approve of the Government’s proposals for restricted production. It is possible that after the war Australia will not be producing enough wheat to feed its own people.
– What restrictions are proposed ?
– On that point the bill provides that a wheat-grower shall not sow wheat for grain on any land other than on land licensed for the purpose. No limits are prescribed, and the imposition of restrictions is to be at the whim of the government of the day. Who is to say that this Government, committed to pay a price of which it does not approve, will not impose drastic restrictions in order to reduce its liability? The honorable member for Grey (Mr. Badman) has fallen in meekly behind the Government, and is now compelled to support its policy, including the increased price of wheat, although he and his colleagues declared that 3s. 6d. a bushel was enough. As I have said, this Government, which formerly pinned its faith to the law of supply and demand, is now compelled to accept the trend of world affairs, and embark upon a system of planned economy in the hope of solving the problems of the wheat industry. I hope, however, that the Government will drop its proposals for restricting production.
– I do not think it is surprising that the Government should take notice of the trend of world affairs. It is the normal thing for a government to do, unless it wishes to butt its head against a stone wall. As a matter of fact, these restrictions are being applied for two reasons - because of the war, and because of the excessively high tariffs all over the world which have made it difficult for us to dispose of our products.
– Is the honorable member a free trader?
– No, but I would have tariffs a good deal lower than those advocated by honorable members opposite. I accept the Government’s proposals without any enthusiasm, believing them to be for the benefit of the wheat-farmers. This scheme is similar to those for the control of apples and pears, and of wool. Personally, I do not like these control schemes. I happen to be a wool-grower myself, but I recognized at the beginning of the war that, although I do not like the control of wool, it is essential in wartime. Similarly, though I had previously opposed proposals for the control of apples and pears, I realize that, during war-time, control is inescapable in the interests of the growers themselves. One of the objects of the bill, and the regulations associated with it, is the prevention of production of wheat on unsuitable lands, on lands in unsuitable districts, or indeed by unsuitable growers. I do not like the principle of licensing. Like the honorable member for Calare (Mr. Breen) I am perfectly certain that many difficulties will have to be resolved under this scheme, and a great deal of unpleasant restriction enforced which will be very unpopular with the farmers. In the past the wheat-farmers have been mainly in the position of receiving assistance, without having any compulsion applied to them. Consequently, a great many of them will dislike restriction when it is actually applied. Very much will depend upon the way in which the hoards carry out their duties as to whether or not this temporary stabilization scheme will stand up to the strain. I look upon the scheme as a trial. It does not convert me, as an honorable member has suggested by interjection, into a socialist in war-time, any more than I imagine myself to be an anarchist in peace-time. The scheme is to be given a trial. Who can say what will happen to wheat in the course of the next two years, should the war continue for that period? Even the honorable member who preceded me cannot be quite sure of what the future holds for the industry. It may be that, owing to developments overseas in a much shorter time than we think, a far greater demand, and far higher prices than we think possible, may eventuate.
– Does not that possibility make it still more dangerous to experiment with these regulations?
– No. This is a real attempt to carry the wheatfarmer through a very difficult period, which, to a large degree, is none of his making. A converse possibility is that a dearth of shipping might cause a glut of wheat in Australia. In these circumstances, I admit that something in the form of control, little as I like the principle of restriction, becomes necessary.
– Should there be a shortage of shipping, will not wheatgrowers who change over to the production of mutton and lamb still find themselves in difficulties?
– Can any honorable member say whether, in two years’ time, there will be a greater demand and higher prices for wheat, or whether it will be practically impossible to transport it overseas? We can only hope that the boards which will administer this scheme will act with judgment. A multiplicity of possibilities for irritation will arise under these regulations as they are now drafted. For the reasons I have given, I accept the scheme, but, as I have said, I do so without enthusiasm.
.My first objection to the scheme embodied in the bill is that we shall require an army of inspectors to police the regulations, and, very probably, the expenditure so incurred will exceed the cost of providing an additional advance of 6d. a bushel to the growers. It will be practically impossible to police the regulations. Chaos will result. So many injustices will be inflicted upon growers that their morale will break. The problems confronting the industry could be dealt with much more fairly and effectively by other means. The wheat policy of the Labour party is based on common sense. We are to aim at a production of 140,000,000 bushels. That means that we must calculate the number of acres required to produce that quantity. At best, the soundest estimate can only be a guess, and a wild guess by Bourke-street farmers. Another objection which I have to the scheme is that its administration will not be placed in the hands of practical farmers. On paper, the scheme looks very nice. The crop may look promising. In that case the boards will have power to order farmers to cut portion of their crop for hay. But whilst the crop may be estimated at many millions of bushels, whole areas of the wheat belt may be destroyed overnight within a month after the estimate is made. The crop may be estimated at six or seven bags to the acre, but actually the farmers may be lucky to get three bags to the acre. I repeat that the scheme will create chaos in the industry. How is it proposed to compensate farmers, assuming a crop of 140,000,000 bushels is expected and the actual yield does not exceed 40,000,000 bushels? We cannot afford to interfere with nature. Restriction of production may lead to a shortage. As the honorable member for Gwydir (Mr. Scully) has pointed out, we have now on hand only one year’s supply, and we do not know whether the crop next year will fall short of the average. If impracticable men are allowed to meddle with the industry, we may be faced with disaster. As an additional safeguard, the regulations provide that the grower can be compelled to cut his crop for hay in any year in which a heavy crop is expected. In such circumstances, how will a farmer who is forced to cut for hay be compensated ? In the long run it would be better to allow him to strip his crop, because it is easier to store wheat. We have not the facilities to store hay. The whole scheme is impracticable. It is a foolish attempt to regiment the industry. Such a scheme cannot be carried out fairly between growers. One man may be restricted to 25 per cent, of his present acreage, and another allowed a greater percentage. Even should the allotted percentages be equal, the fact remains that one man can grow more wheat than another on a given area. I do not propose to cover ground which has already been covered by other honorable members. I suggest that the whole scheme should be withdrawn, and something more practicable devised. I feel sure that the growers themselves could devise a better scheme, paying due respect to the safety of the industry. Such a course would be far wiser, because any scheme devised by the growers themselves would offer a firm foundation for future policy. I oppose the restriction of production, because it will only worsen conditions in the industry.
– I do not propose to say much about the bill at this unearthly hour of the morning, because I have a decided objection to the framing of legislation in “‘possum” hours. I have had some experience with wheat, and I believe that this bill, which will be passed by this House some time this morning, will have to be amended before very long. It contains provisions of a financial character, which this Parliament, or its successor, will find to be a little too onerous. If honorable members opposite happen to be in power at such a time, they will know all about it.
– That means that the price will be reduced?
– Very definitely. On the other hand, if honorable members opposite believe that the wheatgrower can be given a guaranteed price, with unlimited production, they have another think coming. If unlimited production be permitted, no need will exist for any stabilization scheme. The need for stabilization arises from the fact that the production of wheat exceeds the demand. The world has built up its second greatest surplus of wheat. I think that the present-day surplus is about 1.400,000,000 bushels, the greatest surplus having been during the depression years from 1929. to 1935. Since then the demand for wheat has decreased, because European countries are growing more wheat. Any scheme of stabilization in this country will not affect the internal agri cultural policies of European countries. We have had some experience of international agreements with regard to wheat. They were not altogether successful, and I do not think that they will prove to be successful in the future. However, we must face our own difficulties. If honorable, members opposite think that we can continue to produce wheat at a cost of 3s. 6d. a bushel, and export it to world markets, on which the price is 2s. 6d. a bushel, and make up the difference of ls. in Australia, they must recognize that that ls. must he extracted from the pockets of somebody in this country.
– We produce wheat cheaper than any other country.
– No ; Argentina, Russia and Canada can run rings around us in the cost of producing wheat.
– ‘Shipping freights must be reduced.
– That is not the solution of our problem. The awful truth is that our only available markets are overseas. We cannot control the market overseas, or in the Par East. As a general rule, we can only sell wheat in the Ear East when the price is unprofitable to the Australian producer.
The honorable member for Gwydir (Mr. Scully) made some well-chosen remarks about the composition of the Wheat Board. One truth that honorable members should fix firmly in their minds is that the people who pay the piper will call the tune. If an industry is subject to grower-control, there must also be grower-responsibility. The financial responsibilities under this bill will be borne not by the wheat-growers, but by Australian taxpayers. While they continue to find the money, it is a pretty piece of impudence on the part of the representatives of the growers to contend that the fanners should direct the operation of the scheme. No honorable member opposite would administer his farm on the same principle. He would not say to a man who might be share-farming with him : “ As you are putting something into this venture, I shall give you complete control “. Far from it ! He would carefully point out that, as he bore the financial risk and responsibility, he must have control. The share-farmer would not be permitted’ to watch, a test cricket match while the crop was being -ruined by the weather.
The statement of the Assistant Minister (Mr. Anthony), dealing with the subdivision of existing wheat properties which are registered, should be carefully watched, because it is in direct conflict with another decision that the Government is putting into effect. Provision has been made to prevent the subdivision of wheat land, once the marginal problem has been adjusted. Unless the Assistant Minister has cognizance of that fact, it may lead to trouble in the near future.
One honorable member remarked that it was terrible to suggest that the Government should compel a man to cut hay. This matter is closely associated with production, which depends upon the export trade. Export is the key to the whole problem. Very shortly, Great Britain may cease to import Australian wheat for the duration of the war, because supplies can be secured more quickly from Canada and Argentina, as the voyage is much shorter than it is from Australia and the freights are certainly no higher.
– To what other class of production should wheat-growers turn?
– That is a problem which will arise out of the war. Farmers should not be permitted to produce unlimited supplies of wheat which the country can neither store nor export.
– Does the honorable member suggest that farmers should engage in some other form of agriculture?
– The honorable member knows that I have definite ideas upon the subject; but as it does not come within the i scope of the bill, I would be infringing the Standing Orders if I were to deal with it at this juncture.
The honorable member for Gwydir declared that the Australian Wheat Board had rendered excellent service by disposing of a large portion of our surplus production. It is the first time in the history of Australia that the Commonwealth Government has disposed of wheat under such conditions as those which it accepted on that occasion. Although a few small deals were transacted during the last war, Australia went in for the business in a big way on this occasion.
The Commonwealth had to choose between accepting terms involving the payment in cash of one-half of the total purchase price, .and the balance at the rate of 4£ per cent, over a period of twelve months to two years, or running the risk of mice and weevils eating the wheat. For several days, honorable members opposite have taunted Ministers with having sold wheat on terms to a country which may be our enemy. If the wheat had been kept in Australia and a mice or weevil plague had developed, as it did during the last war, the Government would have had neither wheat nor cash with which to appease the farmers. Honorable members should take such matters into consideration before they trenchantly criticize the Government.
I represent some of the best wheat land and some of the worst wheat land in South Australia, and honorable members opposite cannot convince me that everything in the wheat garden is lovely, that the farmer need not restrict production, because the Government will assist him. and that the Commonwealth Bank and Kingdom-come will support him. We must study the industry honestly and impartially. Before many years have elapsed, we may be obliged to make, in regard to wheat-growing, decisions similar to those which the Government of the Dutch East Indies was compelled to make in the days of the Chadbourne International Sugar Agreement, dealing with the production of sugar in Java and other Dutch islands.
– All the critics, pessimists and optimists, are not confined to this side of the House.
– I should be perfectly happy, for the peace of mind of the Leader of the Opposition (Mr. Curtin), if all members on his side of the House were optimists ; but he has one or two of the cantankerous pessimists, who usually accumulate on this side’. The wheat problem is not so easy as it would seem after listening to one or two honorable members opposite. Although they represent wheat-growing constituencies like Calare, Wannon, and Riverina, I remind them that some honorable members on this side of the chamber know all the ramifications of the industry, to their financial cost, and are also conversant with the international conditions of the wheat trade, which has declined over a period of years. Wealthy countries like the United States of America have been able to subsidize the export of wheat. This year, when Australia was trying to sell flour in the Philippine Islands and Shanghai, the subsidy paid by the Government of the United States of America on a barrel containing 196 lb. of flour amounted to 2s. a bushel on the wheat content. No honorable member opposite could claim with justification that the Commonwealth should subsidize the export of flour on a similar basis, because it would be beyond the financial capacity of the Government to do so.
– Is the honorable member in favour of the proposed price of 3s. lOd. a bushel?
– In my opinion, the price is too high. Before very long, the Government of the day will admit that a mistake was made, and that the Assistant Minister was too optimistic when he fixed the price.
– Is the honorable member in favour of reducing the interestrates payable on mortgages?
– The honorable member does not, know the meaning of mortgages. If he visits the electorates of Barker, Grey and Wakefield, and the top end of the Wimmera, he will find that he can get sheaves of mortgages on which the rate of interest does not matter, whether it be 1 per cent, or 100 per cent., because no interest will ever be paid upon them.
– A reduction of interest would greatly assist farmers.
– Not to a large extent. If the position of a farmer is such that the interest burden means to him the difference between success and failure, he has a very queer agricultural economy.
– It means a difference of ls. a bushel. Has the honorable member ever read the Wheat Commission’s report ?
– As I spent seven or eight very interesting weeks with the commission in Victoria and South Australia, I am familiar with its investigations, and I have made a close study of its report. The honorable member quoted extreme cases, in reference to which the commission declared rightly that even if the farmers concerned had obtained 10s. a bushel for their wheat, they could not have made a profit on the year’s operations. Some of those men will never make good farmers, and much of the land that men are trying to cultivate is not suitable country for growing wheat.
– Does the honorable member refer to the Wimmera?
– I refer to land to the north of the federal division of Wimmera. Fortunately for the honorable member, he represents some of the best wheat-growing land in Australia. Farmers are in difficulties chiefly because they were too confoundedly greedy in buying their neighbour’s land. Before prices crashed, it was the pride and delight of many farmers to he able to declare that they could grow wheat successfully for ls. 6d. a bushel. Descriptions of their success were published in the newspapers. One of the leading members of the Wheatgrowers’ Federation in South Australia, Mr. Herbert Dolling, who contested a Senate seat for the Labour party at the recent general election, was one of the most consistent contributors to the press. Repeatedly he asserted that his cost of production was only ls. 8d. a bushel. But during the depression he could not grow it profitably at 4s. a bushel.
– The honorable member should be fair. He knows that Mr. Dolling had freehold land.
– I have an intimate knowledge of Mr. Dolling’s experiences, and I heard the evidence which he gave before the Wheat Commission. On that occasion his testimony was a flat contradiction of everything that for years he had written on the subject. Many farmers desired to buy their neighbour’s land. If they lacked the necessary cash, they paid a deposit of a couple of pounds an acre, and gave a fat mortgage of £8 or £10 an acre at fantastic rates of interest. When wheat prices crashed they were prepared to blame everybody but themselves for their position. Many things can be said on both sides about the wheat problem; but up to date the criticism has been onesided. Before honorable members opposite have been in this chamber much longer, I hope that they will have a better appreciation of the justice of the case that can be put for some of these intricate and interesting problems. In many instances failure has been due to ill luck and to conditions over which no farmer has control. Some of the worst cases, however, relate to men who, out of sheer desire to go one better than their neighbours, got themselves into a financial mess, for which they alone were responsible. Fifteen years ago they were rigid, dyed-in-the-wool Conservatives. Now, so extreme are their views, that they speak and act as if they were reared in Moscow.
– Do any of them ask for the establishment of a wool appraisement centre in Albany?
– To discuss that subject would be to transgress the Standing Orders. I merely desire to suggest to honorable members that they should tread warily when dealing with the wheat problem. In my opinion, the Government has already exceeded the bounds of safety. We all know that these bounds have been exceeded owing to political expediency. I frankly confess that I have not been enthusiastic about any wheat stabilization scheme. When I was Minister for Commerce, I proposed the payment of 3s. 6d. a bushel, and, if a scheme of this kind is still in operation four or five years bence, I feel sure that honorable members opposite will admit that that price was not far from the mark.
– in reply - Despite the criticism that may be levelled against this scheme, it represents the first genuine attempt at stabilization of the wheat industry throughout Australia. Although points of criticism will undoubtedly arise in connexion with this bill and the regulations to be promulgated under it, I believe that it will contribute greatly towards the stabilization of the industry. The honorable member for Gwydir (Mr. Scully) apparently believes that the crop is to be restricted to 140,000,000 bushels, but that is not quite correct. The marketable crop is to be 140,000,000 bushels, but that does not take into account 20,000,000 bushels for seed and feed purposes. Therefore, the total production to be permitted under the scheme will be about 160,000,000 bushels. The honorable member also took exception to the constitution of the Australian Wheat Board. I point out that part of the plan under the bill and the regulations is to increase the representation of the growers on the board.
– They will still be hopelessly in a minority.
– Not at all. When two additional growers’ representatives are appointed, the personnel of the board will be twelve members, of whom four will represent the growers and two will represent the marketing pools. Therefore, the growers will have six representatives out of twelve, apart from the chairman. What, could be fairer than that? The honorable member for Calare (Mr. Breen) and the honorable member for Riverina (Mr. Langtry) must be under a serious misconception when they say that the grower will receive only 2s. 8-Jd. a bushel at sidings. The handling charges are estimated at about 9d. a bushel, which reduces the price from 3s. lOd. f.o.b. to about 3s. Id. a bushel at sidings.
– The handling costs in the No. 1 Pool were nearly ls. a bushel.
– On the figures supplied by the Australian Wheat Board, the average freight charge is 4 1/2d. a bushel and the other charges, including storage, amount to another 4$d. a bushel, making a total of 9d. a bushel. If an honorable member says that the price at sidings is 2s. 8d. a bushel, when it is actually 3s. Id. a bushel, he reduces the payment to the farmers by £3,000,000.
I point out to the honorable member for Ballarat (Mr. Pollard), and the honorable member for Gwydir (Mr. Scully), that restrictions with regard to primary industries are already in “operation in Australia. The _ honorable member for Brisbane (Mr. George Lawson) and the honorable member for Griffith (Mr. Conelan) can vouch for the fact that the sugar industry is severely bound by restrictions as to acreage and the quantity of mills, yet the sugar scheme has proved successful. If the wheat-growers are to receive a guaranteed price, some form of restriction is inevitable, sothat the liability of the Commonwealth Government may be limited.
– The production of sugar does not fluctuate so much as in the case of wheat.
– The fluctuation is so serious at times that it affects the price of sugar. The principle of restriction of production was established by the Labour party in Queensland, and has always been supported by it. I do not anticipate any of the difficulties that some honorable members forecast as the result of a restriction of wheat acreage, because common sense will have to be applied in regard to it. Members of the Opposition may even be in power when the restrictions have to be enforced. In that event they would, no doubt, ensure that irksome regulations were not imposed. We must obtain our experience in this matter as we proceed. It is necessary to pioneer a new path in respect of the wheat industry, and I feel sure that common sense and fair play will be the guiding principles in the application of the regulations.
The honorable member for Grey (Mr. Badman) suggested that a clearer definition of “ wheat-grower “ than that contained in the bill is required. There is much in what he has said, and I shall direct the attention of the Minister for Commerce (Sir Earle Page) to the matter, with a view to having it clarified. I trust that the bill will receive a speedy passage.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Mr. Anthony) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Wheat Industry (War-time Control) Act 1930.
Resolution reported ; report adopted. In committee (Consideration resumed) :
Clauses 2 to 6 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill - by leave - read a third time.
Mr. ANTHONY (Richmond- Assistant
Minister) [3.30 a.m.]. - I move -
That the bill be now read a second time.
The purpose of this bill is to give effect to the provisions of the Wheat Tax (Wartime) Bill 1940. The bill provides that the tax shall be payable by the wheatgrower and shall be collected by the Australian Wheat Board by deduction from compensation due to the grower on account of the acquisition of his wheat by the Commonwealth. The amount of the tax will be assessed by the Wheat Industry Stabilization Board to be constituted under the National Security (Wheat Industry Stabilization) Regulations. I commend the bill to honorable members.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate.
Bill - by leave - read a third time.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Mr. Anthony) 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 the purpose of making grants to the States for the purpose of drought relief.
Standing Orders suspended ; resolution adopted.
That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry outthe foregoing resolution.
Bill brought up by Mr. Anthony, and read a first time.
– 1 move - That the bill be now read n second time.
The purpose of this bill is to grant and apply out of the Consolidated Revenue Fund the sum of £1,000,000 to be made available to the States as grants for the relief of wheat-growers in droughtstricken areas. Provision for this amount to be paid to wheat-growers seriously affected by the drought was included in the amended budget proposals. Allocations to the individual States will be determined after a conference with Ministers representing the six States. The methods to be adopted by any State to alleviate hardship suffered by wheatgrowers within its boundaries in consequence of drought will be approved by the Commonwealth before a grant is made to that State. I commend the bill to honorable members.
.- 1 support the bill. It is some satisfaction to know that this concession has been granted to the distressed wheat-growers throughout the Commonwealth as the result of negotiations between the Government and the Opposition. I hope that when this money is made available a specific instruction will be issued to the respective State Governments that it must, be utilized only for the purpose for which the grant has been made. When grants of this kind have been made on other occasions, the only benefit received by necessitous farmers has been the writing down of their indebtedness to their creditors. I trust that an instruction will be issued to the State Governments that this money must be paid direct to necessitous farmers.
.I support the remarks of the honorable member for Gwydir (Mr. Scully) regarding the terms on which the grants should be made to the State Governments for distribution among distressed wheatgrowers. The appropriation of such a large sum - £1,000,000 - represents a notinconsiderable concession which has been wrung from the Prime Minister by the Labour representatives on the Advisory War Council. I am glad to be able to say that I was one of the ten representatives of wheat-growing constituencies who waited on the Minister for Commerce (Sir Earle Page) to urge that a further payment be made from the No. 2 wheat pool. We asked for an advance of 6d. a bushel, but on the principle that half a loaf is better than no bread, we were glad to accept 3d. I hope that when this money is distributed it will be paid directly to the distressed wheatgrowers, and not used to reduce their indebtedness to their creditors.
– I support the bill; but in view of the large sum of money to be appropriated clause 3 should be amended to provide that its final allocation among the States shall be subject to the approval of the Government. Clause 3 provides -
The amount payable to each State under this act shall be such amount as the Minister determines after conferring with State Ministors respectively representing each of the six States.
I have a very vivid recollection of what happened last year when a grant of £500,000 was made for distribution amongst necessitous farmers in droughtstricken areas. Notwithstanding the fact that the then Minister for Commerce, the honorable member for Barker (Mr. Cameron), conferred with each of the six State Ministers, he allocated the grants to the States without reference to the Government of the day. This bill confers too great a power on a single Minister ; it gives him absolute control of the distribution of £1,000,000. I do not suggest for a moment that the present Minister for Commerce (Sir Earle Page) will not exercise his judgment in the way he thinks best, but we must remember that we are all human and, where such a large sum of money is involved, the final decision should rest not on the Minister but on the Government.
– I shall be glad to move an amendment substituting the words “ Governor-General in Council “ for the word “ Minister “.
– I am glad to have that promise. The State of Victoria was excluded from the allocation of funds for drought relief last year, and to-day we have the spectacle of wheat-growers from the Mallee, who should have participated in the grant, calling on the secretaries of the Trades Halls at Ballarat and Melbourne asking for jobs. In both Federal and State spheres there is a tendency to vest too much power in a single Minister. Unless the proposed amendment is inserted in this bill the Minister may follow the lead given by his predecessor, take the law into his own hands, and distribute this grant according to his own sweet will. When the honorable member for Barker (Mr. Archie Cameron) was Minister for Commerce he acted in an arbitrary manner in allocating among the States the grant for distressed wheatfarmers, but when the Treasurer of the day suggested the appointment of a certain individual as Co-ordinator of Works without consultation with the Cabinet, the honorable member for Barker was immediately up in arms against the proposal. It was good policy for the honorable member to act as he did, but not good policy for his colleague to act in such a way. Causes of irritation of this description should be removed, and all matters which vitally affect the welfare of individuals in the different States should be subject to final approval by Cabinet.
– With the passage of time no doubt the honorable member for Ballarat (Mr. Pollard) may be expected to gain a closer acquaintance with the truth. Many of his statements on this measure are wide of the facts. The honorable gentleman said that I had distributed £500,000 in drought relief. That is not true. The money I distributed had nothing to do with drought relief. Moreover, the purposes for which the money was to be used and also the method of distribution had been discussed on two or three occasions in this Parliament. The object of the Government was to assist farmers on marginal wheat lands. The act passed by this Parliament provided that the money made available should be distributed by the Minister for Commerce. The Minister was not required or expected to consult Cabinet, although it had previously been agreed that the State Ministers for Agriculture should be consulted. They were consulted and asked to submit proposals to the Commonwealth. The Minister for Agriculture of Victoria did not submit proposals in accordance with the law. That is the true version of what occurred. The Government of Victoria deserved the treatment it received, because it did not attempt to comply with the provisions of the act passed by this Parliament. The money was distributed legally and wisely.
– But unfairly.
– What is wise cannot be unfair. The money was distributed in accordance with the terms of the act. I hope that the Government will not amend this bill as suggested by the honorable member for Ballarat. Any trouble that occurred over the distribution of the money provided by the last parliament for the relief of farmers in marginal areas, was due entirely to the shortcomings of the Government of Victoria. The Premier of Victoria sent a letter to the Prime Minister (Mr. Menzies) which no State Premier should have written. It stated that after the Government of Victoria had been informed by the Commonwealth Government how much money would he made available, it would decide what to do with it. The act set out how the money was to be expended. Probably the honorable member for Ballarat is not aware that the State Ministers for Agriculture conferred in this chamber for two days without being able to agree to anything except that the distribution of the money should be left to the Minister for Commerce.
– Subject to the approval of Cabinet.
– Not at all. I speak with some knowledge of the facts of the case. If Commonwealth Ministers cannot be trusted to distribute relatively small amounts of money according to principles laid down in acts of parliament, things have come to a pretty pass. If all such matters have to be referred to Cabinet, Ministers will have no time to deal with major matters of policy.
The Government’s policy in connexion with marginal lands had already been determined. For the last five years moneys provided for this purpose have been distributed by the Minister for Commerce, according to the stipulated principles.
– It is too much power to repose in one Minister.
– Much larger sums of money will doubtless be expended by the Ministers of our service departments under the terms of measures which will be passed through this parliament within the next few hours without any protest from the honorable member for Ballarat. His arguments were not worth the breath he used to utter them. The Government should stand by the bill as it was introduced.
– in reply - The Government is prepared to accept the suggestion of the honorable member for Ballarat (Mr. Pollard). In any case the whole matter will be subject to the advice tendered by the Australian Agricultural Council, and the Commonwealth Government will have a check rein on the money.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Motion (by Mr. Anthony) agreed to-
That the clause be omitted and the following clause inserted in lieu thereof: - “ 3. The amount payable to each State under this act shall be such as the Governor-General determines: Provided that no determination under this section shall be made until after the Minister has conferred with State Ministers respectively representing each of the six States concerning the amounts to be paid under this act to the States.”
Clause 4 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported with an amendment; report adopted.
Bill read a third time.
Message recommending appropriation reported.
In committee (Consideration of Governor-General’s message) :
Motion (by Mr. Anthony) agreed to-
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to authorize the raising of moneys to be loaned to and the payment of moneys to, certain States for the purposes of drought relief.
Standing Orders suspended; resolution adopted.
That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr.. Anthony, and read a first time.
Mr. ANTHONY (Richmond- Assistant
Minister) [3.57 a.m.]. - I move -
That the bill be now read a second time.
The purpose of this bill is to authorize the raising of moneys to be loaned to certain States and the payment of moneys to those States for drought relief purposes. As the result of prolonged drought conditions throughout Australia immediate action became necessary in September to avoid excessive losses of livestock and extreme hardship in the areas affected. There was still a chance that the livestock position would be improved by favorable rains in a number of districts, but over a large area the position of feed and crops was already hopeless and, with a continuance of dry conditions for another couple of months, heavy stock losses appeared unavoidable unless special provision could be made to meet the needs of the situation. A conference of Commonwealth and State Ministers was held on the 27th September to discuss drought relief problems. The subject received further consideration at two later conferences of representatives of the Commonwealth and State’ Governments. At the request of the Commonwealth Government the State Governments prepared and presented outlines of the proposals which it was desired should operate in the respective States. These proposals were considered by the Commonwealth to be reasonable and sound, and a drought relief plan acceptable to all the governments interested was agreed upon. The main points of the plan were the provision of finance for drought relief and the assurance that any moneys so provided would be used in the best interests of drought-stricken farmers.
The amounts required by the several States to put their proposals into effect, make a total of £2,770,200, and are set out in detail in clause 3 of the bill.
Of this sum the Commonwealth has already made £950,000 available to enable the States to meet cases of immediate urgency. “With the approval of the Loan Council the Government decided that the necessary money should be raised by means of a Commonwealth loan, and that the Commonwealth should then make the sum of £2,770,000 available to the States by way of loans, to be repaid on an instalment basis over a period not exceeding seven years. Interest would be payable by the States on moneys so lent to them by the Commonwealth at the rate payable by the Commonwealth on moneys borrowed for this purpose.
Honorable members will see outlined in the bill an arrangement by which the Commonwealth will meet a portion of the interest which would normally be due by the States on the principal of the moneys loaned to them. This interest contribution, the administrative costs of raising the Commonwealth loan, and a straight-out grant to drought-affected wheat-growers, which is the subject of a further bill, may be regarded as the Commonwealth Government’s contribution to drought relief in Australia. Honorable members will note that the States are being allowed a period of four years in which to make their first repayments of principal. In fairness to the States, they must be given an opportunity to recover some of the moneys which they, in turn, will lend to the drought-stricken farmers. It will be appreciated by honorable members that when a farmer has suffered a year of severe drought, at least three or four years must elapse before he will be in the position to repay money advanced to him during or following the drought to enable him to carry on. The bill also provides for the appropriation from the Consolidated Revenue Fund of moneys necessary to meet the Commonwealth’s contribution to the States by way of interest payments to which I have previously referred. I commend the bill to honorable members.
.- I support the bill, and commend the decision of the Government to advance this money to the States for the relief of distressed primary producers. I point out, however, that the sum proposed to be made available will not meet the posi tion; three or four times as much is. necessary, because of the prolonged and disastrous drought which many districtshave experienced. The Gwydir electorate combines wheat-growing and grazing. Some of the best grazing land in Australia is included in the district, but so disastrous has been the drought that the pastures have suffered badly. In the’ northern portion of New South Wales and in southern Queensland, the graziers are in a pitiable condition. I know of efficient and adaptable men who have: been practically forced off their holdings. Never before in the history of Australia have the conditions of men on the land been so serious. A few days ago there appeared in the Sydney Morning Herald a letter from Mr. H. Simms, of Bellata, in which he said that in New South Wales there were 112,000,000 sheep with a capital indebtedness of over 25s. a head. That shows how serious is the position and how inadequate this measure of relief will be. if adequate assistance is to be given to these primary producers, a much bigger sum must be made available quickly. The only way to meet the situation is by the utilization of the credit resources of the Commonwealth, by the granting of advances to distressed primary producers, through the Commonwealth Bank, at nominal rates of interest. There is a demand from the primary producers for such a scheme. I regard this bill as the first of many instalments, if the necessary relief is to be given. I hope that the Commonweal th Government will insist on the money being made available to distressed farmers at a nominal rate of interest, and will not allow the State Governments to make a profit out of the distress of the farmers.
.- I express my appreciation of the proposals contained in this bill, but I point out that Queensland will receive only £250,000, whereas the other States are to receive more.
– The States will receive what they asked for.
– In that event, I have no more to say except that Queensland is suffering from a severe drought, and that a scheme of water conservation, including such works as the damming of the chief river, should be undertaken.
Question resolved in the affirmative.
Bill read a second time.
In committee :
Clauses 1 and 2 agreed to.
Clause 3 (Application of moneys).
.- I desire to know why no money is to be advanced to Tasmania. I expect to be told that that State made no application for assistance, but I point out that only last week the Premier of Tasmania said that he had not submitted an application because it was distinctly understood that only wheat-growers would be covered by this legislation. I now find that the hill provides for “ the alleviation … of hardship suffered by primary producers in consequence of drought.”
– Does the honorable gentleman suggest that drought conditions exist in Tasmania?
– Definitely yes.
– I was chairman of both the conferences at which the Premier of Tasmania was present. If he had had a good case to present, he certainly failed to present it.
– As I have said, the Premier of Tasmania did not make application for assistance because it had been decided that the assistance should be for wheat-growers only.
– In reply to the honorable member for Wilmot (Mr. Guy), I can only say that the sums set down in this hill are those specified toy the States in their applications. If Tasmania is not mentioned, it is because no application was received from that State.
– Was it decided that the money would be made available to assist wheat-growers only?
– I point out that these moneys will not he free grants by the Commonwealth to the States; they will be loans to be repaid. It may be that the Government of Tasmania did not desire to incur the liability of a loan.
– I can assure the honorable member for Wilmot that the position is as stated by the Assistant Minister. I was chairman of both conferences at which this matter was discussed. At the conference held on the 25th and 26th October, both the Premier of Tasmania, Mr. Cosgrove, and the Minister for Agricultur, Mr. D’ Alton, were present. The bill now before the committee contains the amounts which were ‘ agreed to by the States on that occasion. There was no protest from Tasmania and no request from that State for any money.
.- I realize that Tasmania did not apply for any money, hut I wish to know whether it was at any time laid down that the money would be provided for the assistance of wheat-growers only.
– There was no such condition.
– Mr. Cosgrove inferred that if he had known that money would be made available for primary producers other than wheat-growers, he would have submitted an application.
– Every other Minister present at the conference understood the position.
– My information is that this money was not specifically earmarked for wheat-growers exclusively.
.I realize that this money is to he advanced toy way of loan. I have kept silent because I know that Cabinet is to give consideration to the disabilities of Tasmania. Tasmania looks on while a gift of £1,000,000 is distributed among the wheat-growers of the mainland and nearly £3,000,000 more is advanced free of interest. The people of Tasmania do not mind that being done, but they hope that their request for £20,000 for the relief of distressed growers of small fruits will not he rejected when it. comes before the Parliament. The Treasurer (Mr. Fadden) smiles, so I feel confident that Tasmania’s claims will not be overlooked.
Mr. ARCHIE CAMERON (Barker) T4.14 a.m.]. - When this matter was decided at the Melbourne conference, it was known by the representatives of each State that the money was for other primary producers besides wheat-growers. If the proposal had been confined to distressed wheat-growers, Queensland would not have lodged a claim. Its problems are associated with the dairying industry, and the £250,000 which Queensland is to receive, will assist dairy-farmers, not wheat-growers. I assure the honorable member for Wilmot (Mr. Guy) that the representatives of Tasmania at the conference were fully aware of the conditions, but they did not apply for assistance.
.It seems to me that whenever Tasmania wants anything, it succeeds in obtaining it. It has been a liability to the Commonwealth for quite a long time.
The CHAIRMAN (Mr. Prowse).Order ! The honorable member must confine his remarks to the clause before the committee.
– It had the Prime Ministership-
– Order !
– The President of the Senate-
– Order !
– The Speaker of the House of Representatives, and the indomitable Gerry Mahoney all in the one session, and even then was not satisfied.
– Order ! The honorable member must either confine his remarks to the clause, or discontinue them.
– I hope that this sitting will soon be terminated.
Clause agreed to.
Clauses 4 and 5 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Message recommending appropriation reported.
In committee (Consideration of GovernorGeneral’s message) :
Motion (by Mr. Anthony) 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 the purpose of repaying to the Commonwealth Bank of Australia advances made for the purposes of the National Security (Apple and Pear Acquisition) Regulations.
Standing Orders suspended; resolution adopted.
That Mr. Anthony and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Anthony, and read a first time.
– I move -
That the bill be now read a second time.
This measure is introduced for the pur pose of granting and applying out of the Consolidated Revenue Fund the sum of £750,000, to enable the repayment to the Commonwealth Bank of Australia of advances made by the bank for the purposes of the National Security Apple and Pear Acquisition Regulations.
By October, 1939, it was apparent that, owing to war conditions, the normal channels of marketing apples and pears would not be available for the 1940 crop. Those fruits did not appear in the priority lists of the Government of the United Kingdom, and the export of any of our apples and pears to the United Kingdom appeared extremely doubtful.
Forced to consider new methods of disposal and marketing, the Government decided that acquisition by the Commonwealth as from the 1st March, 1940, of the 1940 crop of apples and pears was the only means of averting chaotic conditions in the industry. Provision for an acquisition scheme was made by regulations promulgated under the National Security Act in November, 1939. It was necessary that finance should be provided for the marketing committee of the Australian Apple and Pear Board, the body charged with the administration of the 1940 acquisition scheme.
In normal marketing conditions, apple and pear growers receive assistance from outside persons or firms, in the form of cash advances, fertilizer supplies, and orchard requisites for the production and harvesting of the coming crop. It was necessary that the Commonwealth, having decided to acquire the 1940 crop, should come to the assistance of growers to enable customary practices in regard to the production and harvesting of the 1940 crop to proceed. It was decided that advances should be made to growers, such advances to be offset against realizations from sales of the fruit acquired. As a first advance, the Government agreed to make payments to individual growers at the rates of 2s. a bushel on apples and 3s. a bushel on pears, in two instalments, on 75 per cent. of the assessed crops of apples and pears. Crop assessments were made in January, 1940.
As an inducement to growers to pick their fruit in its best condition, and to expedite delivery to the agents of the marketing committee, the Government later agreed to make to them a further advance of1s. a bushel on both apples and pears of prescribed quality delivered to the marketing committee. Funds were required by the marketing committee to provide also for the costs involved in the packing, transport and marketing of the fruit, and for administrative and publicity expenses.
In accordance with regulation 25 of the National Security (Apple and Pear Acquisition) Regulations, arrangements were made with the Commonwealth Bank to advance sums totalling £3,078,125 for the above-mentioned purposes, subject to the following conditions: -
Although the marketing of the 1940 apple and pear crop has not been completed, it is apparent at this stage that the operations of the marketing committee in respect of that crop will result in a substantial loss.
Honorable members are asked to approve the appropriation from Consolidated Revenue of a sum of £750,000, which will enable the Government to honour its guarantee to the Commonwealth Bank in respect of the deficiency between realizations from sales by the marketing committee of fruit which the Government acquired, and the total amount expended by that committee in the administration of the acquisition scheme from moneys ad vanced by the Commonwealth Bank. It is not anticipated that the sum which the Government will be called upon to pay to the Commonwealth Bank by the 31st December, 1940, by reason of this deficiency, will reach the figure of £750,000. It is desired, however, that the necessity for a further approach to Parliament, in the possible event of understatement of the amount for which approval is sought at this stage, may be avoided.
Several factors have operated to prevent the 1940 acquisition scheme from being a financial success. Honorable members will recall the unprecedented weather conditions which were experienced in all States in late March and early April of this year. Not only was the expected crop reduced by about 3,000,000 bushels, thereby upsetting the earlier assessments on which advances had been made, but the extraordinary conditions also had a detrimental effect on the size and quality of the fruit. The keeping properties under cool storage conditions were so greatly affected that considerable re-packing was necessary later in the season, and the presentation costs were thereby substantially increased. Further quantities of fruit on which advances had been made were lost at this stage. Moreover, the weak condition of many varieties after removal from store caused a depression of prices, resulting in a reduction of the anticipated proceeds from sales. Increased freights and insurance costs further inflated the marketing costs. Fortunately, the Government was able to arrange for the shipment to the United Kingdom this year of about 2,000,000 cases of apples and pears at very satisfactory prices. Whilst this figure is much less than 50 per cent. of normal pre-war exports to United Kingdom and continental markets, the realizations from such shipments made an important addition to the proceeds of sales of the balance of the fruit. I commend the bill to honorable members.
.I support the bill. When the Government undertook the handling of the apple and pear crop throughout Australia, the estimate of the crop was about 13,000,000 bushels. Payment was made on over 9,000,000 bushels. Certain conditions had to be imposed which had not operated previously, and a big loss was sustained, principally on the mainland, owing to conditions which could not be avoided. Payment was made in respect of 3,000,000 bushels which was not harvested. The Government will not lose the amount stated by the Assistant Minister (Mr. Anthony) ; but even if it does so, it will come very well out of a difficult situation.
– I have no choice but to support the bill. The growers have been paid for their fruit. Although we are in honour bound to support this measure, because it provides for the liquidation of an overdraft with the Commonwealth Bank, honorable members are entitled to learn from the Assistant Minister (Mr. Anthony) whether the Commonwealth Government, and he in particular, intends in the present season to sanction the operation of a scheme in circumstances similar to those that operated last year, or will see that whatever scheme is applied is sensibly managed and well directed. Should not some consideration be given to the advisability of having an entirely new or a rejuvenated board to administer the apple and pear acquisition scheme? Before we pass this measure we should know whether the same board will administer the new acquisition scheme. I concede that the acquisition last season was surrounded by unprecedented difficulties, but any administration which could lose £750,000 on a £3,000,000 crop should be closely investigated. If the Minister will assure me that the new acquisition scheme will be brought into operation by legislation of this Parliament and not by regulation under the National Security Act, I shall sit down now.
– If the honorable member has anything to say he should say it now.
– This Parliament in 1939 appointed an Apple and Pear Board to advise the Government on the improvement of marketing methods, both here and overseas. On the outbreak of war we were faced with shipping difficulties and the probability that the fruit which would normally be exported would have to remain in Australia. The Government vested that board with statutory power which enabled it, under the direction of the Minister for Commerce, to arrange for the marketing of the whole of the crop. I frankly admit the need for controlled marketing and I do not agree with those growers who, led by merchants, believe that in war-time they can enjoy peace-time privileges, and contend that they would be better off without control and acquisition. Control and acquisition are essential in existing circumstances. Nevertheless, the Commonwealth Government should review the arrangements and, although it is often suggested that producers are incapable of appointing men to represent them, a poll of the growers should be taken. The existing board was appointed by the Minister for Commerce after he had received nominations from the State Ministers for Agriculture, and the chairman is a merchant. I suggest that the acquisition scheme for the coming season should be administered by a board nominated partly by the Commonwealth Government and partly by the growers themselves. Last season, the value of crops was assessed and payments were made on that basis. Many growers failed to make deliveries, safe in the knowledge that they would receive threequarters of the assessment.
– Next season the crop will be paid for on delivery.
– We have no assurance of that.
– In spite of the loss sustained, apples sold retail at 4d. each.
– In Victoria better quality fruit, considering the bad season, was never previously available and prices were not above the ordinary. The retailer is often opposed to any orderly marketing scheme which will give the grower a greater profit and him a lesser profit. Apple and pear growers who have the interests of their industry at heart are anxious for a better scheme this year, and many of them are doubtful whether the personnel of the existing hoard is satisfactory.
– The abnormal weather was largely responsible for the failure last season.
– The weather did have some effect, but it did not cause some of the growers to refrain from spraying, picking, and delivering their fruit to the packing sheds. Payment for fruit should be made on delivery and, if a grower is the victim of weather hazards, he has grounds for special relief.
Representatives of organizations in my district have written to me suggesting that the Minister for Commerce should appoint several gentlemen from that district to the board. It will be difficult to suggest that, but in view of the chaos in the industry caused by mismanagement and inexperience, I submit that a change of personnel is warranted. If half of the members of the hoard were replaced the new members would have the benefit of the experience of the remaining old members. They would also be critics of the past administration.
– The members of the board were appointed by the growers.
– No, they were appointed by the Minister for Commerce on the recommendation of the State Ministers who had received nominations from various organizations. The present board has learned a lot, but an infusion of new blood would give good results.
– Which half of the membership would the honorable member dispense with?
– That would be a matter for the common sense of the Minister. The honorable member for Barker would make a good job of it, because he knows something about it. The existing hoard has not done well enough.
– The board was never constituted to do the job which was given to it.
– That is true, but it should have done better. Its failures convinced me that its personnel should bc changed. The problem in the Harcourt district, which I represent, will be very grave. There will be 1,000,000 cases of export apples produced, and if those growers who live near the Melbourne market think that they will be able to keep that market to themselves without its being invaded by other growers they are mistaken. The board lacks imagination, and demonstrated that fact in its marketing efforts. For instance, advertisements were inserted in the Melbourne papers stating that Sturmer apples could be purchased for 7s. 6d. a case c.o.d. I do not think that the sales effected by that advertisement paid for the cost of insertion. The average consumer will not take the trouble to write or telegraph for a case of apples. He wants to have the fruit put under his nose. All retail fruit-sellers should be licensed distributors under the scheme, and fruit should be put up in cartons of suitable size, and at a price which would be favorable to both the retailer and the grower. I hope that the Minister will change the personnel, of the board. I have placed before him, for his consideration, certain names which were submitted to me.
.The honorable member for Ballarat (Mr. Pollard) dwelt upon the loss incurred lastyear and condemned the board for this, saying that the personnel of the board should be changed. I think that a word should be said in defence of the board, because it is well known that the loss was due largely to the bad season. It was not the board which decided that the crop should be assessed before the fruit was half grown, with the result that not nearly so much fruit was harvested as had been paid for. It is true that some of the growers did not take care of their fruit. They saw what was coming, and, having received their money, did not trouble to harvest the crop. That, however, was not the fault of the board. The Minister for Commerce and the State Ministers for Agriculture were responsible for the scheme which included provision to assess the fruit on the trees, because they believed that little of it could be exported. As a matter of fact, quite a lot was exported. Next year, I understand, the fruit will be paid for on delivery.
– I was amazed to hear the very poor defence of the board put up by the honorable member for Darwin (Mr. Bell). After attempting to exonerate the board from blame for what took place last year, he went on to say that this year the scheme was to be altered, and the fruit, instead of being assessed on the tree, would be paid for on delivery. It is evident that some one blundered.
– It was not the board.
– The honorable member says that the board was not to blame, but the honorable member for Ballarat (Mr. Pollard) said that there were no growers’ representatives on it. Who, then, was responsible ?
– All the members of the board were growers’ representatives.
– There seems to be more to this loss of £750,000 than meets the eye, and the matter should be inquired into further. It is strange that the Commonwealth Government should guarantee a return to the growers and then advance the money on the probable crop, not the actual one. I do not say that all the growers were blameworthy, but the way was certainly left open for unscrupulous growers to plunder the Treasury, particularly if supervision by the board was lax. I should lite to hear from the Minister just who was to blame for this costly blunder.
– There is no doubt that there will be some heart-burning over the doings of the Apple and Pear Board. The act constituting the board was passed in 193S, and the board was appointed in July, 1939. It was constituted as an export control board, and nothing more, but when war broke out, the control of marketing, both in Australia and overseas, was handed over to the board, although the members had no knowledge of local marketing conditions.
– What Minister was responsible for that?
– It was a government decision. An innovation which, I hope, will never be repeated, was introduced when it was decided to assess the crop on the trees. I was Minister for Commerce for seven months, and during that period I acquired a good deal of information regarding this matter. In Tasmania, the growers played the game very well, but I cannot say so much for those in some of the mainland States, particularly in New South Wales and certain parts of Victoria. In fact, the conduct of some of the growers in those States was deplorable. They raised no protest until after they had received their money from the Commonwealth. They took the money and then sold on the open market the fruit for which the
Commonwealth had paid, thus acting in defiance of all law and morality. The Commonwealth, partly for this reason, but largely because of weather conditions, was obliged, under its agreement, to pay for 3,000,000 cases of fruit which were never delivered to it. I saw fruit in the Wakefield electorate practically cooked on the trees. It was not worth picking. That happened also in Victoria, and in certain parts of New South Wales. However, we cannot get away from the fact that certain growers set out deliberately to defraud the Government. I can employ no other language. The next difficulty arose because it was practically impossible to secure shipping space. The fruit sent to England brought remarkably good prices, and, for that reason, I doubt very much whether so much as £750,000 will be needed for the purposes specified in the bill. Within the last six or seven weeks the fruit in cold storage has deteriorated to such a degree as to warrant some reduction of the proposed grant. Much of the fruit delivered was very poor. In extenuation of the board’s failure to achieve the best results, particularly on the Sydney market, I point out that the wholesalers of Sydney put their heads together in order to defraud the board. Week after week they refused to buy, except at crash prices, cargoes of fruit from Tasmania, including varieties of apples which, in other years, brought a good price on the Sydney market. None of them would touch certain varieties. I know perfectly well what happened. Honorable members will admit that, in setting out to crash prices, in that way the wholesalers in Sydney actually defrauded the board of a just price.
– Why not replace half of the members of the board?
– That would not remedy the position. The real cause of the trouble was that the board was asked to handle a problem for which it was not constituted. It was set up as an export board. It is all very well to be wise after the event, but, possibly, some improvement might have been made had persons more closely acquainted with internal marketing conditions been appointed to the board.- Honorable members should bear in mind that many factors operated over which the hoard had no control. One of the most serious factors was the adverse weather conditions which prevailed throughout last summer. Even in Tasmania, where, with very few exceptions, the growers played the game, the standard of fruit and the yield on an acreage basis was not up to the average. Adverse climatic conditions supervened after the assessments were made, and before the fruit was ready for delivery. No authority could have foreseen such a difficulty. In all the circumstances I, as one who had something to do with the administration of the scheme and was, perhaps, occasionally fairly rough on the board, realize that the board was confronted with a very difficult task. I am certain that if many of the people, both inside and outside of Parliament, who have severely criticized the board had been entrusted with the same responsibility they would have made a hash of the joh.
.- - It will require more than the eloquence of the honorable member for Barker (Mr. Archie Cameron) to put up a sound case in defence of the Apple and Pear Acquisition Board. It is now generally recognized that the scheme was ill conceived. The board estimated that there would be a huge surplus of apples, which it would not he able to sell on the Australian market. Consequently, a blind eye was turned to many things that were done in the orchards. Growers were encouraged to believe that they would be paid for their fruit provided they did not put it on the market. They could let it rot on the trees, or throw it to the pigs and poultry. Any administrative body which encouraged such an attitude deserves the severest condemnation. In the district of Orange many growers could not realize their cost of production. Inspectors visited orchards in that district and endeavored, in consultation with the orchardists, to assess a fair price for the fruit on the trees. It was invariably found, however, that the assessments would not enable the growers to meet their cost of production. Consequently, orchardists realized that it was useless to pick the fruit. Thus they rose in rebellion. Many of them refused to register. In this way many who were driven ofl their orchards, owing to the hardships of the scheme, incurred the full penalty of the law. Many storekeepers in Orange to-day are practically bankrupt because of the bungling on the part of the Apple and Pear Acquisition Board. I agree with the honorable member for Ballarat (Mr. Pollard) that the present personnel of the board should be replaced. It is unwise to leave so much power in the hands of people who have displayed such incompetence in the past.
.Much fruit is grown in the Granite Belt in the electorate which I represent. Owing to the hardships arising from the operation of the acquisition scheme, many growers were driven from their orchards. It appears that advances were made on the blossoms on the trees. One difficulty confronting the industry is its inability to send fruit overseas owing to the shortage of shipping. However, the real cause of the industry’s marketing difficulties is lack of consumer credit. If the mass of the people here were provided with the wherewithal to purchase more fruit, the industry could establish a payable home market.
.I wish to make two points. So far as I am able to judge, the board took over control of local marketing in very difficult circumstances. It had had no previous experience of local marketing conditions. Bearing these facts in mind, it did as good a job as could be expected of it. I am in a somewhat different position from other honorable members who have fruit-growers in their constituencies, insofar as a considerable minority - it may even be a majority - of the growers in my electorate are extremely dissatisfied as the result of events which occurred last year. They have good grounds for such dissatisfaction. Many of them live in and around Melbourne, which is their normal market. Owing to causes completely beyond their control, the market was taken away from them. Their dissatisfaction is due mainly to the fact that the conduct of affairs by the hoard last year was far from efficient.
My second point is that the Government should grant to growers this year an advance prior to the delivery of the fruit into storage. Before the fruit is delivered at the store, the great majority of growers are obliged to meet heavy expenses in respect of labour and fertilizer. Most of them, if not all of them, require an advance of at least 6d. or 9d. a case before the fruit is actually delivered into store. If the board were efficient, the growers as a whole would, I think, be satisfied with the scheme.
– I point out to honorable members that whilst the purpose of the bill is to grant and apply out of Consolidated Revenue a sum for the purpose of repaying advances by the Commonwealth Bank, the debate is resolving itself into a discussion of the merits and demerits of the Apple and Pear Acquisition Board. As the administration of the board arises only indirectly under the measure, I appeal to honorable members not to make that aspect a feature of their remarks.
– Is it not the custom of Parliament, Mr. Speaker, to insist upon the redress of grievances before granting supply to His Majesty? This measure is a request for the appropriation of a sum of £750,000 for a certain purpose.
– I have no desire to stifle discussion, but merely suggest that, in view of the hour, honorable members should strictly confine their remarks to the bill.
– Whilst I do not represent any considerable number of fruit-growers, a substantial number of people in my electorate will be obliged to foot a portion of this expenditure. For that reason, some comment should be made on the disclosures that the House has heard during this debate. The time has arrived when the activities of a number of the boards which have been appointed by the Government should be reviewed in order to discover the extent of the losses incurred by their operations. Such deficits may result from inefficiency on the part of members, unfortunate selections of personnel by the Government, and the fact that members have had a pecuniary interest in the business that they were administering.
The House is indebted to the honorable member for Ballarat (Mr. Pollard) for disclosing the truth about the operations of the Apple and Pear Board. Had he not intervened in the debate, the bill would have been blessed by honorable members who represent apple and peargrowing districts, and £750,000 would have been provided to pay for somebody’s incompetence. Every effort which has been made by honorable members to extract from the Assistant Minister (Mr. Anthony) and the honorable member for Barker (Mr. Archie Cameron) information respecting the cause of the loss has failed.
– The honorable member did not object to the provision of £14,000,000 for the wheat industry; but when £750,000 is to be made available for apple and pear growers, he opposes the grant.
– I object to the voting of such a considerable sum, with the blessing of honorable members who represent apple and pear growers, when obviously maladministration or gross blundering has occurred. Who is responsible for the loss ? The honorable member for Barker, who spoke vigorously in defence of the board’s administration, side-stepped my inquiries as to who was responsible for the appointment of the board. The Assistant Minister, when asked a similar question by the honorable member for East Sydney (Mr. Ward), stated that he would give the information when replying to the debate. At that stage honorable members will have no opportunity to verify his reply. On a crop of apples and pears valued at £3,000,000, the board incurred a loss of £750,000.
– The sum of £3,000,000 would be the advance, because the crop is worth considerably more than that amount.
– All I know is that the Commonwealth advanced to growers the sum of £3,000,000, and now Parliament is asked to make up a deficiency of £750,000. Unless my arithmetic is sadly astray, the loss on the transaction is 25 per cent. The activities of the board have been extraordinary. As was admitted during the debate, members visited orchards before the crop was half grown. Disregarding the possibility of adverse seasonal conditions, and the ravages of blight, it assessed the value of the crops and paid the apple-growers for them. The honorable member for Barker excused this action by stating that the board was peculiarly suited to control the export trade. He confessed that its members were ignorant of conditions of the local trade. Strangely enough, however, the Government allowed the board to administer the sale of apples after the export trade had ceased. Obviously, some one blundered. I admire the loyalty of the honorable member for Barker to his former colleagues. He is endeavouring to shelter them and will not admit that they were responsible for this grievous error. The Government appointed the board to administer a scheme involving the outlay of £3,000,000, although it was aware that the members were familiar with only one side of the trade. When the export trade failed, common business prudence dictated that the Government should change the personnel of the board, or seek advice from authorities on local marketing conditions. It. failed to do so.
In addition, the recipients of the bounty from the Government never harvested the crop. In short, they were sneak-thieves. Although they obtained money under false pretences from the Government, they were not prosecuted. The House should not pass the bill unless the Government gives an assurance that those responsible for this colossal loss on the operations of the board will be dismissed.
– The honorable member will have to blame the weather principally for the loss.
– The loss has been attributable to one of three causes - the weather, the Ministry, or the board. The honorable member for Barker has exonerated the Ministry, and excused the board on the ground that its members were ignorant of local marketing conditions. In order to conceal maladministration or lack of proper administration, he blames the weather. Fate was against the board and the Government, because it has incurred a loss of £750,000 on a £3,000,000 deal. The honorable member for Ballarat suggested that half the personnel of the board should be replaced by new members. I do not know whether he hoped that the adoption of such a proposal will halve the loss. In my opinion, most of the boards which are now controlling government marketing schemes should be overhauled in order to determine whether they are competent to administer the responsibilities that devolve upon them, and whether their members have any pecuniary interest in the success or failure of the board’s operations.
.The revelations made by the honorable member for Ballarat (Mr. Pollard) have solved the mystery of the shortage of supplies of apples and pears. The Assistant Minister (Mr. Anthony) should explain why no action has been taken to dismiss the persons responsible for this loss. Such a state of affairs provides the strongest possible reason for the introduction of a system of co-operative marketing and farming in the rural industries, if such a scheme were introduced, it would overcome many difficulties and would allow producers to control their own affairs. They would have local autonomy without government interference. Such a system would save huge losses, and producers would not have to come, like mendicants, to Parliament for financial assistance. The sooner the Government investigates the possibilities of my suggestion the better it .will be for the community.
. The honorable member for Dalley (Mr. Rosevear) calculated that the Apple and Pear Board’s operations resulted in a loss of 25 per cent. I desire to correct that figure. The honorable member for Barker (Mr. Archie Cameron) stated that the total amount advanced was £3,000,000. If a loss of £750,000 were sustained, the sale of the crop must have realized only £2,250,000. In those circumstances, the deficiency represents a loss of 33-J per cent.
– That is not correct. The honorable member should ascertain the facts before he draws conclusions.
– I have drawn the obvious inference from the honorable member’s statements. Such a loss is larger than that which would be consistent with the proper administration of the scheme. Undoubtedly, the board has been a failure, and should bear the responsibility for it.
– The honorable member for Barker, being a former Minister for Commerce, should be held responsible.
– I do not believe that the fault lies with the honorable member for Barker. He did not inaugurate the scheme, and he was not responsible for the appointment of the board. But irrespective of the personnel and their interests, they should be called to account for this substantial deficit. I do not represent apple and pear growers. My electorate contains many people who have young families which would much appreciate a supply of apples and pears at reasonable prices, but it is impossible to purchase these fruits cheaply in Sydney. The honorable member for Barker is, apparently, disturbed by the disclosures made in this debate, because it necessarily brings a board appointed by the Government into disrepute.
– Sydney people have been supplied with a great deal of fruit at prices under the cost of production.
– Many people in Sydney cannot afford to purchase apples and pears at the prices charged for them. In addition, the public is called upon to suffer- the loss of £750,000 in the administration of an ill-conceived scheme.
– The people have been supplied with very cheap fruit.
– Despite the honorable member’s claim, the fact is that cheap fruit has not been obtainable in Sydney. This measure should not be passed, in the absence of a guarantee by the Minister that a proper inquiry will be held, in order to ascertain who was responsible for the maladministration of the scheme.
– in reply - In the discussion of this small bill, honorable members have availed themselves of an opportunity to criticize the operations of the Apple and Pear Board last season. Many of the comments that have been offered are not quite fair to the members of the board. The duty devolves upon honorable members to be careful about the remarks they make concerning the business reputations of men outside this Parliament, particularly before they are made aware of the facts of the case. Last year, it appeared that, unless the Government intervened, a huge surplus of apples and pears would be thrown on the Australian market. The usual production is from 10,000,000 to’ 11,000,000 cases a year, of which about one-half is exported. Owing to the shipping position, and the war conditions, it appeared that the half of the crop that is ordinarily exported would have to be disposed of in some other way. Experience shows that even the presence on the market of a surplus of 600,000 to 750,000 bushels is sufficient to cause a collapse, but a surplus of 2,000,000 or 3,000,000 cases would have catastrophic effects on all of those engaged in the industry. Fruit-growing is a most important industry. In Tasmania, it accounts for 25 per cent, of the income of the State. In Australia, 12,000 farmers are engaged in the production of apples and pears, and the livelihood of 100,000 persons depends on the industry. Therefore, I consider that the Government was justified in taking the steps considered necessary to protect the livelihood of those individuals. It decided that, instead of letting a huge surplus of fruit go on the market and cause a complete collapse of prices, the wiser plan would be to introduce a .scheme that would avoid that disaster.
Consequently, the Apple and Pear Board was appointed. It is easy for those who have little knowledge of the fruit industry to) criticize the work of men who have devoted their whole lives to the welfare of the industry. The members of the Board have forced their way to the front in their respective States as leaders in their industry. Some of them have had experience of the fruit export trade, and others have had much experience of co-operative selling. The position that arose in the apple and pear industry, when 5,000,000 cases of fruit was likely to have no market, was similar to the situation that would have to be faced in an industry in which one-half of the employees were suddenly thrown out of work owing to war conditions. Late in the season last year, the board was suddenly called upon to devise a plan to market a surplus of 4,000,000 or 5,000,000 cases of fruit. A task of that magnitude being suddenly imposed on the board, much experience had to be gained with the passage of time. I much regret the reflection that has been cast upon the business capacity of the members of the board. I investigated the matter as thoroughly as I could. I consulted the Commonwealth fruit experts and the representatives of the industry in Tasmania. I visited thatState, and, having conducted a fairly exhaustive inquiry, I found that the principal reason for the loss occasioned was the unparalleled weather conditions experienced last autumn, when much of the fruit was destroyed ; elsewhere the quality was much below normal. The crop was assessed in January, when the fact was apparent that, in addition to the heavy loss of fruit, a serious reduction of the size of apples and pears had occurred. The board made mistakes which any group of ordinary individuals might have made in similar circumstances. More serious than the reduction of the size of the fruit was the deterioration of its keeping qualities. The board had to place about 2,500,000 cases in cold storage, where it had to be kept for several months, and I am informed that when it was taken from cold storage it rapidly deteriorated. I agree that many improvements upon last year’s plan could be made; Payment under the new scheme will be made on delivery, and not on assessment. Therefore, payment will be received only for fruit that is mature and has been delivered. Payment without delivery can only be permitted on the authority of the Minister. Much fruit may have to be paid for without delivery, because we cannot possibly dispose of the surplus of 5,000,000 cases if the shipping position does not improve.
Another difficulty experienced was the lack of co-operation with the Government by some of the States, particularly New South Wales. The Government of that State withdrew all co-operation, and certain sections of the growers also placed great obstacles in the way of the board. I do not say that the growers did not have some justification for their protests, but most of the points in dispute have since been dealt with. I appeal to honorable members to be fair to men who are not here to defend themselves, and to give recognition to the extraordinary set of circumstances which would have made it most difficult for any board to avoid a loss. I urge the House to pass the bill.
Question resolved in the affirmative.
Bill read a second time, and reported from the committee without amendment or debate.
Motion (by Mr. Anthony) proposed -
That the bill be now read a third time.
– The Assistant Minister (Mr. Anthony) has told us that one of the shortcomings from which the committee suffered was its lack of expert knowledge of the local marketing of fruit. Last season the committee was confronted with the task of disposing of fruit, particularly apples and pears, on the local market, and it is obvious that many mistakes were made. I suggest that the committee should be strengthened by the appointment of a member with an expert knowledge of local marketing conditions. We ask for the appointment of a skilled authority to stimulate the consumption of apples in Australia.
Question resolved in the affirmative.
Bill read a third time.
Message recommending appropriation reported.
In committee (Consideration of
Governor-General’s message) :
Motion (by Mr. Harrison) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Wire Netting Bounty Acts 1939.
Standing Orders suspended; resolution adopted.
That Mr. Harrison and Mr. Fadden do prepare and bring in a bill to carry out the foregoing resolution.
Bill brought up by Mr. Harrison, and read a first time.
Motions (by Mr. Fadden) - by leave - agreed to -
That the number of members appointed to serve on the Standing Orders Committee be increased to nine and that Mr. Speaker, the Prime Minister, the Chairman of Committees, the Leader of the Opposition, Mr. Beasley, Mr. Bell, Mr. Blackburn, Mr. Makin and Sir Earle Page be members of that Committee; three to form a quorum
That Mr. Speaker, Mr. Brennan, Mr. Coles, Mr. Hutchinson, Mr. Paterson, Mr. Riordan and Mr. Rosevear be members of the Library Committee; three to form a quorum.
That Mr. Speaker, Mr. Abbott, Mr. Barnard, Mr. Francis, Mr. Mulcahy, Mr. Price and Mr. Watkins be members of the House Committee; three to form a quorum.
That Mr. Beck, Mr. Conelan, Mr. Falstein, Mr. McCall, Mr. Morgan, Mr. Rankin and Mr. Ryan be members of the .Printing Committee; three to form a quorum, with power to confer with a similar committee of the Senate.
Motion (by Mr. Fadden) - by leave - agreed to -
That in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-193G, the ‘ following members be appointed members of the Parliamentary Standing Committee on Public Works: - Mr. Badman, Mr. James, Mr. Jolly, Mr. Martens, Mr. Sheehan and Mr. Stacey.
Sitting suspended from 5.55 a.m. to 10.80 a.m.
Motion (by Mr. Fadden) proposed - That Order of the Day No. 4 be postponed until after the consideration of Order of the Day No. 5.
That the House, at its rising, adjourn until 10.30 a.m. to-morrow.
I therefore submit that the order of business usual at the beginning of a sitting day should be followed.
– The House did not adjourn yesterday. The sitting was simply suspended. In those circumstances this is a continuation of yesterday’s sitting.
– Should not yesterday’s resolution be rescinded?
Question resolved in the affirmative.
Debate resumed from the 21st November, 1940 (vide page 97), on motion by Mr. Fadden -
That the bill be now read a second time.
– In normal times the strongest opposition would be offered to any increase of the rate of sales tax, but, unfortunately, the Government is faced with the necessity to raise unprecedented revenues for carrying on the war. In the circumstances, the Labour party will criticize, but not oppose, the bill. We believe, however, that the war should be financed to a much greater extent by central bank credit issued by the Commonwealth Bank. The Treasurer (Mr. Fadden) anticipates obtaining additional revenue totalling £3,400,000 under the provisions of the bill. The measure also provides for goods of an annual sale value of £47,000,000 to be withdrawn from the exempt lists and, with one exception, made liable to a tax of 5 per cent. Goods of a sale value of approximately £21,000,000 per annum, now subject to the flat rate tax of per cent., are to be placed in the new category, and subjected to a tax of 15 per cent. The rate of tax on the remaining: categories is to be increased from 8^ per cent, to 10 per cent.
Sales tax was first imposed in Australia during the nadir of the depression at a time when revenue had fallen off to an unprecedented degree. The situation was so serious that the Government of the day had to take drastic steps to stem the tide of imports. A reduction of more than £10,000,000 in the yield from indirect taxation was experienced in 1930-31 compared with the yield from this source in 1928-29, and additional revenue had perforce to be obtained from other sources. It was in these circumstances that the Government of the day imposed the sales tax, which has been a prolific money-spinner. The following table shows the annual revenue obtained from the sales tax since its introduction : -
For the last ten years, the sales tax has thus returned an average revenue of approximately £8,548,000. In’ difficult times like the present, it is too much to expect any government to abandon this field of taxation.
When the sales tax was first imposed it caused a great deal of criticism. Some honorable members opposite, who now occupy prominent positions in the Government, were particularly severe in their denunciation of it. They declared that it was a most unfair tax, and that when their party secured control of the treasury bench it would take immediate steps to repeal it. So far from adopting that course, honorable gentlemen opposite have both widened the scope and increased the rate of the tax to such a degree that it is now a most serious imposition on the mass of the people.
Under the provisions of this bill, the general rate of tax is to be increased from 8^ per cent, to 10 per cent., and provision has also been made for certain goods, of an estimated annual sale value of £47,000,000, to be withdrawn from the schedule of exemptions and made liable to a tax of 5 per cent. The goods specified in the third schedule of the bill are to be subject to a tax of 15 per cent. From these sources, the Government expects to obtain an additional revenue of £3,400,000 during the remainder of the financial year. The annual sale value of the goods remaining in the taxable field will be approximately £251,000,000, and that of the goods still exempt approximately £314,000,000.
One of the objectionable features o£ the bill is that it provides that boots and shoes of a wholesale value in excess of 15s. a pair shall be liable to a tax of 10 per cent. In effect, this will mean that approximately half the boots and shoes at present being sold become taxable. The total estimated annual sale value of boots and shoes is £8,000,000. The Government acted unwisely in expanding the taxable field to include boots, shoes, and slippers, and the effect of this provision will be serious to a large section of the working people of Australia. The boot and shoe trade has made vigorous protests against this alteration of the law, and has urged the Government to reconsider its attitude. Typical of the telegrams despatched by the trade to the Government, and also to private members of Parliament, is the following message from the Melbourne boot and shoe manufacturers: -
Manufacturers engaged manufacturing boots and shoes are amazed at announcement in to-day’s press on sales tax on footwear. Quite illogical and must cause confusion and difficulty. It is urged that reconsideration be given if sales tax must be imposed on footwear and be uniform in its entirety.
The following is a fair sample of the telegrams received from Sydney manufacturers : -
Proposed sales tax on footwear will cause endless confusion in interpretation and application. We respectfully advise that it be reconsidered and made uniform.
I sincerely trust that the Government will comply with these requests, and review its attitude.
It will probably be contended by the Treasurer that an exemption from sales tax of boots and shoes having a wholesale value in excess of 15s. a pair will impose no hardship, but the tendency in recent years has been for working people to buy better quality footwear.
– The people know that by buying a better quality of footwear they obtain better value for their money.
– I agree with that view. The Government has made a serious error in imposing a sales tax on any footwear. The rate of sales tax to be levied on boots and shoes having a wholesale value in excess of 15s. a pair is 10 per cent. A similar rate of tax will he imposed on all slippers. This indicates that the Government is of the opinion that slippers are a luxury item, while ordinary footwear of a wholesale value not in excess of 15s. a pair is not so. I cannot understand how this decision was reached. It is common knowledge that during the depression years, and particularly in 1930-31, women wore slippers in the streets because they were less expensive than shoes. On the ground of economy a large percentage of the girls now working in factories also wear slippers at work. Consequently, the suggestion that slippers are a luxury item is ill-founded. The very reverse is the case. Any increase of the price of cheaper slippers must therefore impose an additional burden on persons on the lower income range. The Government’s proposal in respect of boots and shoes is full of anomalies. For example, sandshoes, which are exempt from sales tax, although they are worn chiefly for sport, are more of a luxury item than cheap slippers which are worn by very many people throughout the community.
I understand that a flat rate of sales tax of 21/2 per cent. on all footwear of a wholesale value of less than 15s. a pair, and of 10 per cent. on all footwear above that value, would be approved by the boot and shoe manufacturers, who contend that it would yield more revenue than is likely to be obtained from the Government’s proposal. I wish it to be understood, however, that I am not advocating this variation. I simply put it forward as the opinion of the trade. Other sections of the trade advocate a flat rate of 5 per cent. on all footwear in preference to the present proposal. The Opposition considers that all footwear should be exempt from sales tax.
The Government has also proposed that certain books at present exempt from sales tax should be brought into the taxable field. Since the outbreak of the war a general increase of 12 per cent. has occurred in the price of students’ textbooks. It is now proposed that such books shall be subject to a sales tax of 5 per cent. This impost will place a heavy strain on the already straitened financial resources of students. The position is regarded as extremely serious by all organizations interested in student activities. I direct particular attention to the following letter forwarded to the Leader of the Opposition (Mr. Curtin) under date the 29th November, 1940; by the Students Representative Council, University of Melbourne : -
Since the commencement of this war there has been a general increase of 12 per cent. and upwards in the price of student textbooks. The proposed new federal sales tax of 5 per cent. will, therefore, impose a very severe financial strain on students.
For this reason, a letter in the following terms has been sent to the Federal Treasurer : -
The Students’ Representative Council of the University of Melbourne views with grave concern the provision in the proposed federal budget which imposes on the sale of student text-books a tax of 5 per cent.
The council regards this as an unjustifiable burden on students, and desires to draw your attention to the position in England, where a tax of 12 per cent. was imposed on student text-books and later withdrawn in the face of stringent criticism.
Accordingly, the council strenuously urges that student text-books should be exempted from the operation of the proposed tax.
I hope that the Government will review the proposed tax on books because it cannot be justified on any reasonable grounds.
The Government also proposes to increase the imposition on all chocolates and confectionery, which are the only foodstuffs listed for taxation at the rate of 15 per cent.
– A tax on children.
– That is so. Such items as jewellery, pleasure yachts, toilet preparations, sporting equipment, washing machines, refrigerators and accounting machines are placed in the same category as chocolates and confectionery. The manufacture of confectionery is a very important Australian industry, with a wholesale turnover of over £6,000,000 per annum, and it employs more than 8,000 workers directly and many thousands indirectly. Of the £3,400,000 additional sales tax proposed to be collected from November, 1940, to January, 1941, the confectionery industry is to be asked to contribute 8 per cent., or £270,000. This will unduly penalize an important industry and those primary producers, wholesalers and retailers who are dependent upon it for their livelihood. “While chocolates and confectionery are to be taxed so severely, other comparable products, such as ice cream and biscuits, are included in a lower category; this is unfair. I do not ask that the rate of tax on ice cream and biscuits be increased ; but I ask that chocolates and confectionery be placed in the same category as those items. The value of primary products bought for use in the industry makes a big contribution to primary producers and assists them to find a local market for their products, which is a matter of great importance at the present time. The industry uses approximately £1,000,000 worth of sugar and over £165,000 worth of milk each year. Its annual consumption of glucose, or maize syrup, requires over 560,000 bushels of maize, worth £275,000. The value of gelatine used is £50,000. Peanuts, almonds, dried fruits, flour starches, fruit pulp, honey and butter are also bought in large quantities. Unless the tax be reduced to 10 per cent., considerable unemployment will occur in this industry, as well as in the primary industries which provide its raw materials and among the distributors of the finished products. The industry employs 3,000 workers, and at least 50,000 shops are engaged in the selling of chocolates and confectionery. Those persons who are earning a living from the industry will be penalized very heavily if this impost be brought into effect. Chocolates and confectionery cannot be regarded as purely luxury articles, as the Government would have us believe. Nothing is more nourishing than chocolate, which the masses of the people use extensively as a supplementary diet for their children. The Government has not justified the tremendous increase of the tax on these articles.
Another item upon which a very substantial increase of tax is proposed is made-to-order clothing. The master tailors associations of the various States have made strong representations to the Government on this matter, and I hope that the Minster will be able to grant at least some of their requests. The master tailors of three of the eastern States recently agreed unanimously to motions deploring the proposed increase of the rate of sales tax on made-to-order clothes, which represents the enormous proportion of 60 per cent, of the previous tax payable. This means that a tailor with a turnover of £500 a month, who formerly paid tax of £20 6s. 8d. on that volume of business, will now be expected to pay £33 6s. 8d. The result will be that an increasing number of tailors will have to go out of business, and the public will have to turn more and more to the readymade section of the industry and purchase clothes at a cheaper rate. Consequently the Government will collect less tax from made-to-order clothes whilst undue hardship will be imposed on that section of the tailoring trade, which employs a very large number of skilled tradesmen. Therefore I ask the Minister to reconsider his decision in regard to this item.
I refer now to the proposed tax on wheatmeal bread. The baking trade throughout Australia was astounded to learn that certain varieties of bread were to be supercharged by the sales tax. Whilst it appears that wheatmeal sold as wheatmeal bread will have to bear the tax, ordinary brown bread - which is wheatmeal bread - will not be taxed if it be solid as brown bread. I ask that all bread, whether it be household bread or fancy bread, be exempted from the proposed increase. The baking trade has been hard hit already by the number of enlistments of its employees, and the imposition of this proposed tax would probably cause an increase of the price of bread, thus throwing an additional burden on the general community.
Another item about which I have cause for complaint is the proposed tax on dental supplies. Members of the dental trade are gravely concerned at the Government’s decision to charge sales tax on dental goods on the value of sales when they leave the retail traders. I understand that these materials represent about onethird of the trade’s turnover. This may be a matter for administration or an amendment of the law. The problem involves the interpretation of two definitions in the act. The first is the definition of “manufacturer”, and the second is the definition of “ sale of goods by wholesale “. The dental traders ask that the sales tax be imposed on the goods at their source and that the transactions he classified as retail sales. Representations have been made to the Government on this matter and I understand that it is giving consideration to them. I hope that it will be able to remove the objections raised by the trade.
The Minister has promised that he will do this in an administrative way.
The proposed sales tax on medicines is another injustice. Whereas veterinary medicines are to be exempt from tax, medicines for human use are to be taxed severely. It is not logical that a person who buys medicine for a pet dog or a race-horse should be exempt from tax, whilst people who buy such medicines as whooping-cough vaccine, vitamin preparations, and the drugs used in dispensing physicians’ prescriptions are taxed to the extent of at least 5 per cent, on sales value. It would appear that the Government considers the health of dogs and horses to be more important than the health of our children. Incidentally, persons using veterinary preparations are frequently in a position to buy them at wholesale rates, whereas the people who buy medicines for human consumption have to buy them at retail prices. Most of the medicines purchased in Australia are used by working-class people; surely medicines for the sick are essential commodities. That tax cannot be justified, and I ask the Minister to have it removed.
There are many other items to which I could refer, but they are too numerous for me to be able to discuss all of them now. At a later stage I may be able to deal with them. If conditions were normal, I should not hesitate to use every privilege that I have as a member of this House in order to fight these proposed new imposts. Even in view of the present circumstances, I ask the Minister to give sympathetic consideration to the requests for relief that have been made by various sections of the people. The Government would be well advised to wipe out the proposed impost on boots, shoes, and slippers, because these are necessary articles used by the masses of the people.
– The proposed tax will affect only the most expensive of these goods.
– It will apply to all shoes over a wholesale price of 15s. a pair.
– Which means a price of about 22s. 6d. a pair retail.
– But surely the Government does not want to force the masses of the people to buy cheap, shoddy boots and shoes, that will fall to pieces very quickly. The Government seems to have decided that inferior articles are good enough for the working classes, who will, therefore, have to join the herd of people who buy the cheapest and most shoddy articles of clothing, whilst the better articles are reserved for the use of the privileged classes. Since standards of living in Australia have improved, the average working man and woman have been purchasing good quality boots and shoes which, although they are more expensive initially, give better value for money in the long run than the cheaper articles.
– That has also improved the technique of trade.
– That is true. The Government should remove this tax. Even under war-time conditions it is not justified in proposing a tax on books. I ask the Minister to give an assurance that this item will be reviewed. The proposed tax on medicines is equally unjustifiable. If the Government sees fit to exempt from sales taxation medicines used by veterinary surgeons, it can have no valid reason for taxing medicines used by the people. I hope that the Minister will reconsider a number of these items and grant some relief from this tax. I shall await his remarks on the subject with interest.
.- I listened with interest to the remarks of the Deputy Leader of the Opposition (Mr. Forde), and I agreed largely with them. I, too, urge the Government to reconsider the sales tax on footwear. The schedule provides for sales tax at the rate of 10 per cent, on boots and shoes, the wholesale price of which is in excess of 15s., and 10 per cent, on all slippers. The statistician’s figures in relation to the Australian boot industry show that the total production of boots and shoes, not including slippers, for the year ended the 30th June, 1939, was about 14,000,000 pairs, valued at approximately £7,000,000. In order to arrive at the wholesale selling price, 15 per cent, is added to cover selling and distributing costs, thereby making the total value nearly £8,000,000. The average cost of a pair of shoes made in Australia is lis. 4£d. and of slippers 2s. 9d., thus bringing the total wholesale value of the boots, shoes and slippers manufactured in Australia to a little over £9,000,000. Some years ago footwear was subjected to sales tax, ‘but for some reason it was removed later. I am not prepared to go so far as the Deputy Leader of the Opposition suggested, and urge that sales tax be removed altogether from footwear, but I suggest that sales tax at a flat rate of 5 per cent, be imposed on all footwear. That rate would not greatly affect the workers, because the amount of tax on a pair of shoes of medium price would be small.
– The honorable member should not lose sight of the fact that this tax will be added to an already heavy burden. He seems to regard it as the only one.
– I have not overlooked that fact, but I realize that revenue must be obtained. Sales tax at a flat rate of 5 per cent, would not impose a heavy burden on the lower-paid section of the community, whilst the more costly boots would still be bought by people who could afford them. A flat rate of 5 per cent, on all boots and shoes would yield about £452,000. At present, rubber footwear is not included in the schedule; but if the flat rate of 5 per cent, applied to such goods also, an additional £45,000 would be obtained. Unless the tax be extended to rubber shoes, people will wear more of this class of footwear thereby throwing many employees in the boot-making industry out of work. No honorable member desires that to happen. It has been suggested that all children’s footwear he entirely exempt from sales tax. That would bring the wholesale selling value of boots, shoes and slippers, excluding children’s footwear, to about £8,000,000. Sales tax at 5 per cent, on that amount would yield about £406,000. If rubber footwear were added, another £18,000 would be received from the tax, bringing to about £425,000 the return from sales tax at a flat rate of 5 per cent, on all footwear excluding that worn by children. On the present basis of sales tax, the estimated yield is about £375,000-10 per cent, on the wholesale value of slippers yielding £111,000, and 10 per cent, on boots and shoes costing over 15s. bringing in about £264,000. It will be seen therefore that sales tax at a flat rate of 5 per cent, would yield more revenue, and at the same time cause less trouble in the trade, than will result from the proposals of the Government. I understand that from about 65 per cent, to 70 per cent, of the footwear produced in Australia is sold at about 15s. a pair. That tends to encourage evasion of the tax; already there have been evasions. I know of one instance in which a Melbourne dealer invoiced the shoes separately from the laces and the box containing them. The Government’s proposals will react against the employees in the industry, and will so encourage unscrupulous methods that the financial result to the Commonwealth will be less than the Treasurer expects. Until about 25 years ago it was practically impossible to buy a really good pair of shoes of Australian manufacture. All highclass footwear was then imported. The position is now entirely different; Australian workmanship in this industry has reached such a high standard that there is no necessity to import any footwear whatsoever. I do not want these skilled workers to be forced to turn out shoes of poor quality like sausages from a machine. Honorable members know that children’s footwear must be of good quality, or prove uneconomic. It is priced largely according to size; shoes sizes 7 to 9 are sold at a certain price, and larger shoes, sizes 10 to 13, at a slightly higher price. But when a child needs a shoe size 1, sales tax will become payable because the price will bring the article into the taxable field. There should be no sales tax on children’s shoes, and I ask the Minister to give further consideration to this aspect of the question. I understand that the Boot Employees Federation is in favour of sales tax at the flat rate of five per cent, on all footwear rather than the proposals contained in this bill. I think that I am safe in saying that both employers and employees in this industry are of that opinion.
– I have consistently opposed the sales tax and I shall oppose this tax. I sometimes wonder if this is a Christian country, when I find that the woman who has done her duty in rearing children has to pay sales tax on the medicine bought for her kiddies when they become ill, whereas another woman who has failed fo do her duty, and prefers to nurse a poodle-pup, can get all of the medicine that she requires for her pet dog and not pay any sales tax on it. That such a state of affairs exists is a reflection on our civilization and a disgrace to this Parliament. Can the Minister justify the imposition of sales tax on the surgical footwear required by a child who has suffered from infantile paralysis, whilst medicines and requisites used in the treatment of racehorses, dogs, pigs and other animals are exempt from the tax? Such legislation should be condemned in any country which calls itself Christian. I am not concerned whether the sales tax represents a farthing, a halfpenny, a shilling, or a pound; I object to it on principle. This schedule shows the world that, in the opinion of the Government, an animal is of more value than a human being. Were the truth about this tax known to the people, they would turn the Government out of office. No decent person should stand for such a state of affairs; I certainly will not do so. Whenever a budget is introduced there is evidence that this cowardly method of imposing indirect taxation has been adopted. I regard indirect taxation as a cowardly means of extracting money from the people, because the Government does not come out into the open to tax them, but extracts money from them without their knowledge. So long as these methods are adopted, the Government’s difficulties will continue. We must change our methods and hurl from office those who will not adopt other means, and tap other sources, in order to raise money for the nation’s needs. What will happen next year? Will further demands be made upon our already over-taxed economic resources? The whole system is impracticable, and I offer the strongest objection to the Government’s proposals. In particular, I am opposed to the imposition of the sales tax on books, and upon confectionery which is consumed by the masses. However, I do not wish to deal specifically with any phase of the sales tax legislation, because I am opposed to the whole system. My views on this ……. ^ …ti. …/.. subject are well known to every honorable member. This measure is a disgrace to the Government, and a gross reflection on every honorable member in this Parliament, particularly when we find that the tax is not levied on medicine for, say, dogs, while it is imposed on medicines used by Australian citizens, including children.
– The introduction of this measure follows upon the approval by this House of the Government’s taxation proposals foreshadowed in the budget. The important point that honorable members seem to have overlooked, is that recently we have been discussing a wartime budget, framed to secure the greatest possible national effort in the prosecution of the war. When we realize that in 1930-31 Australia’s defence vote was £3,000,000, in 1939-40 it was £56,000,000, and that the estimated defence expenditure for this financial year is £186,000,000, we can appreciate the special efforts which must be made to secure revenue.
I remind the honorable member foi Werriwa (Mr. Lazzarini), who said that sales tax is a cowardly impost, that he supported the Scullin Government which was the first to introduce what he terms a cowardly tax. The tax was first imposed at a time of financial stringency by the then Treasurer, Mr. Theodore, so that all those condemnatory things which he has said about this Government are applicable with equal force to the Labour party. When economic conditions improved after the last depression, governments of the same political complexion as the Government now in office, reduced the sales tax from time to time, and exempted numerous items. In fact, the number of exemptions granted on charitable, educational and other grounds, and in order to assist the development of industries, was amazing. For instance, all foodstuffs, raw materials for our secondary industries, and all building materials were exempted. Unfortunately, the Government has been forced to resort to this method of raising revenue because of circumstances which now prevail. The fact that the war necessitates unprecedented demands upon the people of this country seems to have been forgotten by honorable members opposite.
My main purpose in speaking on this measure is to ask the Government to reconsider some of the classifications set out in the schedule. The administration of the sales tax legislation leaves much to he desired. 1, and no doubt many other honorable members, have received communications complaining of the new classifications contained in this measure. On the items in one group, a tax of 5 per cent, is levied, on another 10 per cent., and on a third 15 per cent. I wish to make a plea on behalf of those conducting small businesses in the country who, in many cases, are experiencing difficulty owing to the drought, and are carrying on only with the help of members of the family who are working from early morning until late at night. These people will be further burdened by the division of the sales into the three groups as is provided in this measure. In big businesses, the task will be colossal, and the bigger the business the greater will be the difficulty. I urge the Treasurer (Mr. Fadden) to reconsider this legislation with a view to simplifying the system so that business people may be able to avoid the heavy cost of meeting the requirements of the Taxation Department. Unfortunately, it is essential that this tax be imposed in order that revenue may be raised, but the Government, in its effort to prosecute this country’s war effort, should bring its legislation before Parliament in such a form that the absolute minimum of disorganization is caused. Many items in this schedule appear to be wrongly classified. I shall not occupy the time of honorable members by going through all of them in detail, but representations have been made to me from many quarters concerning classifications which I am. sure the Government will have great difficulty in justifying. I should like to know why some items are placed in certain classifications, while similar goods are in others. I cite as an example chocolate and confectionery, which is in the 15 per cent, group, while other foodstuffs are in the 5 per cent, and 10 per cent, groups. What is the explanation of the differentiation? 1 am interested in the confectionery industry because, in the manufacture of sweets, large quantities of primary products, such as sugar, milk, and glucose, are used. Chocolate and other confectionery are included in the same division as jewellery, pleasure yachts, toilet preparations, sporting equipment, washing machines, refrigerators, accounting machines, and other luxuries. Surely there is no justification for such grouping. The annual wholesale value of confectionery produced in Australia is estimated at £6,000,000, while the industry employs, directly and indirectly, more than 8,000 persons. Of a total of £3,400,000 estimated to be collected up to June, 1941, by means of increased sales tax, the confectionery industry will contribute 8 per cent., or £270,000. That is penalizing unnecessarily the primary producer as well as children whose only luxury is a lcl., 2d., or 3d. stick of confectionery. The State which I assist to represent in this Parliament produces all the sugar consumed in Australia, and, in addition, exports large quantites to other countries. The confectionery industry uses approximately £1,000,000 worth of sugar annually, hut this additional impost on confectionery will result in a substantial decrease of the quantity of sugar consumed. A similar adverse effect will be felt in the dairying industry, because milk is an important constituent of confectionery. More than 4,000,000 gallons of milk, valued at £165,000, are used annually in the manufacture of chocolate and other confectionery. Glucose, a product of maize, which in Queensland is grown mainly on Atherton Tableland and in the southern districts, is also used extensively, the annual consumption of which represents more than 560,000 bushels of maize valued at £275,000. Other products used in the industry include gelatine, valued at £50,000 annually, peanuts, almonds, dried fruit, flour, starches, fruit pulp, honey, and butter.
I hope that the Treasurer will realize that, by classifying confectionery in the 15 per cent, group, a great injustice is being done to the confectionery industry and to the primary producers. I appeal for a reconsideration of this portion of the schedule. It is only one example of many items which are wrongly classified, and I trust that the Treasurer will rectify the anomaly. I have received representations on many other items, but I shall content myself by citing only one. If the Treasurer will act on the lines suggested, I shall bring other cases under his notice when the bill is in committee.
– To a certain degree all forms of taxation are irksome. During the years in which the sales tax has been in operation it has been criticized somewhat severely. In the past the tax has been ill balanced, and the Government has failed to analyse satisfactorily its incidence. I can safely say that the Government has not been able to examine in detail the items of this schedule, and therefore the classification of items has been left to departmental officers whose duty it is to frame proposals and generally to advise the Government. But owing to the far-reaching ramifications of the sales tax, it would have been better had the various items been classified in Parliament. Many honorable members are trained in the various sections of commerce and industry, and, therefore, have a more extensive knowledge of certain phases of industry affected by this form of taxation than have those who advise the Government. For instance, the honormember for Denison (Mr. Beck) has had a long experience in the boot trade, which is of advantage to him when that industry is under consideration, but his views are not known to the Government until measures affecting that industry are brought before Parliament. It would be unwise for the Government to proceed with this legislation until its effects have been thoroughly explored. We are drifting towards a bureaucratic form of government rather than adhering to the democratic system which provides for decisions by Parliament. We should be able to exercise our rights in this matter and determine how this, or any other tax, should be applied. Honorable members should be given a full opportunity to express their views before these proposals are finally drafted, and then such views could be borne in mind when the legislation is being framed. The Government should not pledge itself to the acceptance of all that a section of the Public Service cares to submit, without first having had the benefit of parliamentary discussion. This is an appropriate occasion to take action along those lines, particularly in respect of this form of taxation. We ought to have in our possession a memorandum setting out the items previously exempt and now brought within the field of the tax. How is any honorable member to know what interests have been protected, or what individuals or sections, by processes unknown to us, have been able to secure concessions? A complete memorandum should be prepared giving reasons for the decision of the Ministry to include different items in particular groups. According to opinions already expressed in this House, many of the items are not acceptable. After full discussion, the Ministry should permit either a committee of this House, or its own advisers, to examine the observations of honorable members and then present to Parliament reasons for the different classifications. We should then know exactly what we were doing, and instead of blindly accepting the schedules would have grounds upon which to justify any action that we took if it were challenged in the electorates. The task of bringing down the budget was given to the present Treasurer (Mr. Fadden) only a fortnight before the document was ready for final consideration, consequently it was impossible for him to make a proper examination of all that it contains in the light of what I have said. No honorable member should be obliged, willy-nilly, to accept the opinion of some officer of the Taxation Department with respect to the application of any tax. We have to decide whether this Parliament shall govern, or leave the task to the advisers of the Ministry.
– It is not the fault of the advisers.
– They could lay the basis upon which discussion should take place; in other words, determine the agenda. I have no desire to criticize unfairly or unjustly the advisers of the Ministry. This Parliament should function according to the principles of democratic government. We represent a crosssection of the community, and each of us has a particular background and experience. Out of the pooling of our thoughts and experiences would emerge what was best in the interests of the people as a whole. It is obvious from what has already been said that honorable members feel that they cannot justify in their electorates the application of this tax in certain directions. Opportunities should be furnished for proof to be obtained as to whether they are right or wrong. Acting in a deliberative capacity, the Parliament should be enabled to pass judgment on the proposed application of the tax. Sales tax has never been popular. I was a member of this House when it was first introduced. It was claimed at the time that the financial position of the country was such that new sources of revenue must be explored in order to balance the budget. It is interesting to note that those who opposed the proposal of the Labour Government of the day, and declared their determination to remove this tax at the earliest possible date, have since increased both the rate and the number of items involved. It has now become a permanent feature of Australian taxation. As happens with most taxes, successive Treasurers have failed to relax their grip on such a profitable means of obtaining revenue. The items in the schedules reveal glaring anomalies. For example, tax is to be imposed on drugs and medicines, including patent and proprietary medicines, used in the prevention, cure or treatment of sickness or disease in human beings, and in the compounding or preparation of such drugs or medicines, hut not including drugs and preparations put up and sold for the purposes of photography. It is difficult, almost impossible, to justify on humanitarian grounds, the taxing of drugs and medicines used by human beings, and the exclusion of those used in photography. A memorandum such as I have suggested might enable us to understand the reasons for such apparent anomalies; otherwise no one can justify them. I cannot see how any government could justify the imposition of the tax on invalid chairs and other appliances needed by invalids. I am drawn irresistibly to the conclusion that the matter has not been adequately examined. A pension is paid to invalids in order to improve their lot. These appliances are vitally necessary to them. If housed in thickly congested areas, they would not be able to move around and enjoy the benefits of sunlight and fresh air unless some such means were available to them. It seems to me that there has been a good deal of blind stabbing in the preparation of the schedules. If such be the case, we should not be obliged to accept them.. A further anomaly is the imposition of a tax of 10 per cent, on tooth paste and of 15 per cent, on toothbrushes. What is the reason for that differentiation? Oils and lotions for children are to be taxed at the rate of 15 per cent. Why should they be regarded as a luxury? The totalitarian countries are to-day making the raising of families the basic principle of their existence. If our population be not increased, this nation will not survive. How the Government or its advisers can suggest that these goods are in the luxury class, is beyond my comprehension. The Ministry should have the schedules reconsidered by its advisers on the basis of the collective representations of honorable members.
– The Ministry would not then have a policy.
– At the moment the Ministry is not in a position to have a policy entirely of its own making. The people have determined that any policy followed must pay due regard to the wishes of all parties in this Parliament. The honorable member for Barker (Mr. Archie Cameron) would know if he had been here that the opposition to !bea items is widespread. This hill was brought down on the advice of the Government’s taxation experts. It represents their point of view, but no one could claim that they understand every aspect of this subject; they could not be expected to do so. They were told to devise means whereby £23,000,000 could be raised from this form of taxation. This bill is the result. It remains .for Parliament to dissect it, to ease the pressure where it needs to be eased, and to increase it where an increase seems justified. If the Ministry would approach the problem in that way, it would achieve a much better balanced tax. Some industries are willing to bear extra sales tax without passing it on. The confection :ry industry is prepared to carry extra sales tax, but not to the degree proposed. Generally, however, when the sales tax is passed on, the public has to pay more than the rate of tax, because of the fractions that occur when sales tax is added to prices. In order to achieve a balanced application of the tax, the Ministry should consider the views of Parliament and, having done so, send the Ministers back to its advisers or, as was done in respect of the proposed war-time company tax, refer it to a committee of honorable members. If that were done, there would be a better atmosphere. Honorable members generally would be in a better position to defend the imposition if they shared the responsibility for it.
– I appeal to the Ministry to review three outstanding anomalies and injustices. I refer first to the tax on drugs and medicines which will disorganize friendly society dispensaries from which the people in the poorer industrial suburbs get most of their medical requirements. Those people cannot afford to buy expensive proprietary medicines and imported drugs. On other occasions, the last thing in our minds has been to tax medical needs, and I counsel the Government to exempt from this tax the more common drugs which the people must have; they can do without some of the more costly drugs. I am not concerned about the tax on perfumes and chemicals used in beauty parlours, but in no circumstances should some drugs be taxed. My second objection is to the tax on books and literature, especially educational text-books. It is highly undesirable to tax people’3 minds and education. Some people’s only recreation is the enjoyment of books. Perhaps, later, we shall be forced to levy a tax on literature, but I do not think that the need has yet arisen. When that time does come, books of an educational character should be the last to be taxed. Thirdly, I object to the way in which it is proposed to tax footwear. On a former occasion, we had a long debate on that subject, and we wore almost unanimous that footwear should not be taxed, because 99 per cent, of it is a necessity. Only 1 per cent, of the range of footwear in Australia could be described ns a luxury. I should like to provide exemption of footwear, but, since that appears to be impossible, the Ministry should give consideration to the imposition of a flat rate tax on a lower scale over the whole range of footwear. As a Labour man, it is difficult for me to support even that. The Australian boot industry 30 years ago, under the influence of excessive competition, overcapitalization, and “ sweat “ work, was regarded as a shoddy industry. The result of all those factors was that footwear became too cheap in comparison with other commodities. The industry became over-expanded during the last war, when overseas suppliers were cut off. Many men entered the industry and became rich almost overnight, but it did not do them much good, because they collapsed afterwards. The boom left a large number of plants and skilled workers capable of producing footwear at prices below comparable prices in other countries.
– A flat rate of tax would not get over that.
– I suggest a flat rate spread over the whole range and the elimination of the 15s. exemption. It would be better for the industry generally if the rate of tax were reduced and all classes of footwear were brought within its range. The Government would get more money that way. By exempting all footwear costing less than 15s. a pair, based on the wholesale value, the Government will be responsible for the reintroduction of shoddy work and increase already excessive competition. The men who will take advantage of the exemption are Poles and other foreigners, who disregard award rates and carry on their trade in what are popularly known as “ rat-holes “ in the outer suburbs of Sydney and Melbourne. Already, those people are selling boots and shoes, which formerly cost 15s. 9d. or so wholesale, at 14s. 10-id. No advantage will accrue to anyone from that. The net result will be footwear badly constructed from offal instead of sole leather, which will be dearer in the long run to the wearers. Employees will be “ sweated “, and the whole industry will be disorganized by stop-work meetings at factories where the pace is unusually hot. That would be avoided if the tax were spread over the whole range and the result would be to the benefit of all interests - employers, employees, and the public. Under present conditions the Australian footwear industry is highly organized, and its product is cheaper than in most other countries. In Europe, the factories work long hours. I have seen the employees start work before breakfast, knock off for breakfast, and go right through the day until late in the evening. In spite of their long hours, they do not do one-half of the work that the Australian worker does in his eight-hour day. The Australian works fast, and has modern machinery. I do not wish to see anything done that would bring about chaos in the industry.
– I have always found the Treasurer (Mr. Fadden) willing to listen sympathetically to a reasonable argument, and I am sure that he must be impressed by some of the speeches that have been made, because evidence has been produced that this bill contains some remarkable anomalies. We all hope that before we go into committee he will give consideration to those anomalies and give some relief. I desire to refer to what I believe to be the most outstanding anomaly of all, that is, the inclusion of confectionery in the third division. I cannot understand how departmental officials could possibly have placed confectionery in the same category as speedboats, canoes, surf-boards, games, puzzles and party novelties. Some may question whether confectionery should be regarded as a straight-out food, but I do not think there can be any doubt that it is. On this subject, Lord Woolton, Minister for Food in Great Britain, has been reported in the press as follows : -
At a press conference last week, Lord Woolton, Minister of Pood, was questioned as to whether a concentrated iron ration for the nation was in contemplation, a ration which it would be compulsory for people to cany about with them for use in an emergency, such as an unduly prolonged stay in a shelter cut off from the usual means of sustenance. Lord Woolton replied that such a contingency had not been overlooked and that Professor Drummond and his department in the Ministry had the matter in hand. What U proposed for the purpose is a special “ reinforced “ kind of chocolate.
It is clear, therefore, that chocolate, which is one of the principal confec tionery items, is regarded as having a high food value. The Australian confectionery industry uses £1,000,000 worth of sugar each year, 4,000,000 gallons of milk, 560,000 bushels of maize, and very large quantities of glucose. How a product of such obvious food value can be placed in the same category as fireworks and puzzle games passes my understanding. I maintain that this extra impost should not have been placed upon the industry. Those associated with it know that they must contribute their just proportion to the war effort, and they would not object to a tax of 10 per cent., as on other foodstuffs. The honorable member for Werriwa (Mr. Lazzarini) mentioned that there is no tax on dog medicines. He might have gone farther and pointed out that there is no tax on dog biscuits manufactured in Australia. The Government should recast the bill. As the honorable member for West Sydney (Mr. Beasley) pointed out, there has obviously been a good deal of blind stabbing in fixing the rates. We understand that the budget was compiled hurriedly, and that it is necessary to raise a very large amount of revenue. We have every sympathy with the Treasurer and his officials, but we should seek to preserve equity; otherwise, we shall produce distress and unemployment.
– I regard the sales tax as a detestable form of taxation which takes us back to the days described 100 years ago by Sydney Smith, when he said that the Englishman lived a taxed life, paying taxes on every article which he used from the cradle to the grave. However, all the parties have agreed to accept the sales tax as a means of raising revenue. I regret that, but it is their decision, and I do not propose to say more on the principle of the tax than I said during the budget debate.
The honorable member for Denison (Mr. Beck) and the honorable member for Melbourne Ports (Mr. Holloway) referred to the effect of the sales tax on the boot industry. Complaints against the proposed tax have been made by the boot manufacturers, the boot operatives, and the consumers. It is true that the tax applies only to boots, the wholesale price of which is over 15s. Thus, boots produced at 15s. Id. a pair pay tax, while those produced at a wholesale price of 14s. lid. a pair pay no tax. In this trade there are some persons who are both manufacturers and retail sellers of footwear. The proprietor of Ezywalkin Proprietary Limited is one of them. He operates under several company names, and manufactures several different products, which he sells to the public through his retail shops. There is nothing to prevent him - though he might be too scrupulous to do so - from evading the sales tax by writing down to below 15s. a pair the price at which he invoices his products to himself in his various incarnations. It may be that manufacturers will be forced to combine in order to establish joint retail stores so that they may avoid taxation in this way. There is no doubt that the sales tax will bear very heavily upon the boot industry. I was chairman of a Select Committee of the Victorian Legislative Assembly which investigated the effect upon the history of the practice of leasing machinery to manufacturers. I came to the conclusion that there was practically unrestricted competition in the industry. Some years ago, the American trade commissioners reported that it was useless to expect American footwear to compete on the Australian market with the local product, even if there were no protective tariff, because costs of production in Australia were as low as anywhere in the world. That is partly because it is one of the oldest established industries in Australia, the first protective tariff having been provided in Victoria in 1860, and partly because, during the last war, a great many people were brought into the industry. There was a big demand for soldiers’ boots, and men such as painters, etc., who were thrown out of employment in other industries, came into the boot-manufacturing industry. Australia was able to find markets in South Africa, Indonesia, a id other places, and some of those markets were subsequently lost. South Africa, for instance, started manufacturing footwear for itself. Thus the trade in Australia was loaded up with a great many more men than it could properly carry, and it has never recovered from that position. For many years the industry has been in a very bad way in Melbourne, and probably in Sydney, also. Factories have been working part-time, and few employees are earning full wages. The sales tax will not affect the production of cheap footwear, and may not seriously affect the volume of employment, for the time being, because of the demand for soldiers’ boots, but it will probably destroy altogether the manufacture of betterclass footwear, and that trade once destroyed will never be revived. One of the reasons why such highly competitive conditions obtain in the boot manufacturing industry is that the boot machinery manufacturing firms do not sell the machinery straight out to boot manufacturers, but lease it to them. The machinery never becomes their property, so that should a manufacturer become bankrupt, the suppliers of the macLinery can reclaim it, and come on the lessee for payments which would otherwise never be required of him. Thus it is possible even for working men with little or no capital, to enter the boot manufacturing industry, and prices are kept down to the lowest level. It is absurd to say that there is any over-charging in the boot trade, and the imposition of the proposed sales tax would be most unfair to consumers and manufacturers alike.
– “Would the honorable member agree to a flat rate of 5 per cent, on all footwear?
– I agree that the trade and the operatives would prefer that to the Government’s proposal.
I come now to what I regard as the most unpardonable blemish on this system of taxation, namely, the tax on books. Previously, there were both sales tax and primage duty on books, but they were subsequently removed. “When I was a trustee of the Public Library in Melbourne, I joined in the making of a protest to the Government against these impositions. That tax was removed, but the Government now proposes to reimpose it, almost immediately after the British Government has made it quite clear that it will not impose a Purchase Tax upon books. In August last, the Chancellor of the Exchequer yielded to public protests, and promised that he would withdraw the British Government’s proposal to apply a 12 per cent, purchase tax on books. Those protests were very vigorous. The people of England were reminded that a tax upon books is a tax upon knowledge, as was the tax on newspapers which was abolished in England between 1850 and 1870. In the course of those public protests, the following letter from the Minister for Information, Mr. Duff Cooper, to Mr. .Segrave, the editor of the Bookseller, was quoted : -
Dear Mr. Segrave, 1 am very glad to know that the list of books to be published here during the summer and autumn is, as usual, going out this year to carry its reminder that the freedom to write and to read is part of the cause for which the British Empire and Commonwealth fights. All who prize the great heritage of civilized communication will welcome the Bookseller’s export number, and I wish every success to your admirable enterprise in thus stimulating the distribution of British books.
Books are one of 4he few articles which we import to-day. They represent one of the most defensible forms of imports, because we in this comparatively undeveloped country, with much smaller numbers of scholars and learned men than are to be found in the older countries, must look to what is written and said in those countries. Although the tax will adversely affect the production of books locally, it is primarily intended to prevent the importation of books. I have received the following letter from Mr. George Jabor, the Australian representative of several” famous English publishing houses, including the Oxford University Press : -
Looking at the matter from a business viewpoint, since the outbreak of war publishers in England have found it necessary, owing to increased cost of material and compulsory war risk insurance, to substantially increase the published price of many books. In addition to this, the Australian bookseller has to face an increase of 33^ per cent, in shipping freights, and up to 500 per cent, increase in marine insurance. In case this percentage seems to be incredible., let mc say that normal rate of insurance is 25s. per cent., and since the outbreak of war it has increased to as unifil as £10 per cent, and fluctuates around that figure.
The proposed sales tax would affect school books. University text books and .technical books, and would therefore impose an additional burden on the working-class parents of children and university students, and in the case of technical books it would be nothing less than a tax on tools of trade.
I propose to deal further with the contents of that letter when the item is being discussed in committee. The Treasurer should deal sympathetically with the representations which have been made by myself, and other honorable members, including the honorable member for Barton (Mr. Evatt). I sincerely hope that the Government will not disgrace Australia by imposing a tax upon knowledge.
.-Whilst anomalies are bound to arise in connexion with exemptions from sales tax, and opinions differ as to which goods should, or should not, be exempt, the number of anomalies existing to-day is greater than at any previous period in the history of this tax due, of course, to different rates being fixed upon various classes of goods. Much has already been said during this debate about the sales tax on boots. To me it seems extraordinary that the tax should be applied to higher-priced footwear. Merely because the price is higher, it would be as reasonable to place a higher rate of tax per lb. upon a 4 lb. loaf of bread as upon a 2 lb. loaf. I cannot understand the reason for such a distinction. Whilst some of my employees prefer to pay about 25s. a pair for boots which are of a better make and more durable, others, who are not so concerned with fitting, will pay only about 14s. a pair. The latter, of course, take the view that they can obtain two pairs of boots for the price which the others pay for a single pair. The incomes, however, of all of these men are equal. Why should one man be obliged to pay the tax whilst another man with the same income be allowed to escape?
Although I have listened to many debates on the sales tax since its inception, I have not yet heard any discussion on the point at which the tax should be levied. I contend that it should be levied on the first, and! not the last, wholesale transaction. The rate of tax would have to be increased in order to effect that change, but the burden on the retail purchaser would not thereby be increased. Under the present system of levying the tax on the last wholesale transaction tradespeople are put to considerable inconvenience and cost, and such factors must, of course, be represented in the retail price. Consequently, purchasers of goods from wholesale houses in towns distant from ports of manufacture now pay sales tax not merely on the basis of the actual price of the goods, but on a price which compensates the wholesaler for freight and incidental charges. In respect of goods of any class transported from the mainland to Tasmania, sales tax is levied on a price which includes freight and wharfage, and charges for removal of the goods from the wharf to the warehouse. This practice is foreign to the principle of the sales tax. The difficulty could be overcome by levying the tax on the first wholesale transaction, which i3 either on the price at the factory, or the import price. In this way the cost of collecting the tax would also be reduced, and, at the same time, tradespeople would be enabled to avoid considerable inconvenience and various incidental expenses. I have no doubt that the taxation department has considered this proposal, but I have not yet heard any reason advanced why the tax should not be levied on the first, instead of the last, wholesale transaction. I should now like to hear an explanation from the Treasurer on that point.
Anomalies arising in connexion with the sales tax cause considerable worry. Many of them cannot be excused. However, I am somewhat surprised at the protests made by honorable members opposite against what they term the cruelty of this tax on the poorer sections of the community. Coming from honorable gentlemen who have placed heavy burdens on the mass of the people through high tariffs, such protests can hardly be sincere. It is strange to hear those honorable gentlemen, the high priests of tariff; complaining about the incidence of the sales tax. The incidence of the customs duties which they have supported in this chamber falls much more heavily than the sales tax upon the great mass of the people.
.- Sales tax is to be levied on all commodities required by those engaged in the fishing industry. In recent years that industry has experienced bad times. When the petrol tax was imposed, with the object of raising revenue for the construction and improvements of roads for the benefit, of motorists, no attempt was made for many years to relieve the fishermen of that tax in respect of petrol which they required for their launches. Fishermen in my electorate also suffered a severe setback in July last when the Government commandeered their boat, which was plying between Hobart and Sydney. Most of the fishermen in Tasmanian waters cater for the Sydney market, but owing to that action of the Government they are now obliged to find markets elsewhere or go out of business. In such circumstances it is not fair to levy sales tax on every article which they require in the earning of their livelihood. Even crayfish pots are to be subject to this tax.
Articles required in the canning and bottling of vegetables should also be exempt from sales tax. Because of a. shortage of shipping we are unable to maintain our exports of fruit. Therefore, we should encourage the canning and tinning of fruit and vegetables, not only for the home market, but also for the overseas market. Whether or not the war should end sooner than we expect, the possibility is that people in many parts of Europe will soon be faced with starvation. The Government is impressing upon apple and pear growers the necessity for finding a market for their surplus production. Last year hundreds of thousands of bushels of fruit went to waste. In such circumstances it is unwise to hamper the sales of such commodities as Australian eider, which I notice will also be subject to sales tax. Surely the Government could afford to exempt such commodities from this tax in order to encourage an industry which is now unable to market a. considerable proportion of its production. Confectionery also is subject to sales tax. Writing to me about the effects of the increased sales tax, a confectioner declared that the trade would find it practically impossible to pass on the imposition to customers, and, in consequence, the industry would suffer severe hardship. Foodstuffs, beverages, medicines, books, building materials and machinery have not escaped the Treasurer’s drag-net. Even lime, which is used extensively by primary producers for the purpose of improving their pastures, has not been overlooked. I appeal to the Treasurer to give earnest consideration to the advisability of exempting the items to which I have referred.
.- The sales tax has been in operation so long that it is generally conceded to be accepted by the people as a regular form of indirect taxation. To the credit of the community, very little protest has been voiced about the amount of money which the public is asked to provide under the budget during the current financial year. Because objections have not been strenuously pressed, we should not ignore the real protests that are made by persons engaged in various trades, which will be seriously affected by the incidence of this tax. A genuine grievance exists in respect of two features of this imposition. The Deputy Leader of the Opposition (Mr. Forde) has already dealt thoroughly with the classification of confectionery. This point appears to be so absurd that it bears all the earmarks of a departmental mistake. In my opinion, the trade should have been consulted before the Treasurer (Mr. Fadden) agreed to include this item in the schedule.
The marketing of confectionery may be considered under two headings. First, “there are the speciality lines which are wrapped in special packages, and are sold by weight, for 3d. and the multiples thereof. Secondly, there are the bulk lines, which are composed mainly of sugar and are also sold by weight. When the price of confectionery is increased, people purchase smaller quantities. The value of the sugar which is used in the manufacture of confectionery in Australia amounts to £1,000,000 a year. As the result of an increase of sales tax, £60,000 worth of sugar will not be transported from Queensland to confectionery manufacturers in the southern States. That will represent a substantial reduction of the wealth of Queensland. A big percentage of confectionery sales is made by small marginal businesses, which make a bare existence out of their trading. This imposition will reduce their sales, and it is not beyond the bounds of probability that a large number of small shopkeepers will be forced out of business. The Treasurer should give consideration ‘to the representations of the confectionery trade for a review of this tax.
The effect on traders generally of the triple method of sales taxation, which is now being imposed for the first time, calls for attention- If honorable members cast their minds back to the introduction of the sales tax during the depression, they will recall that many anomalies occurred in the administration of the legislation. I was a member of a deputation that waited on the former Prime Minister (Mr. Lyons) to discuss the matter and we succeeded in ironing out many problems arising from a number of annoying and expensive methods of book-keeping, and the like, to which commerce and industry were then subjected. Protests against the present tax have been lodged by combined meetings of wholesale and retail traders representing many industries, and their complaints have a genuine foundation. Big businesses, which have machine accounting books, take these matters in their stride and are caused little or no inconvenience; but the system imposes an added burden and expense upon small shopkeepers and country store-keepers. The Treasurer would be well advised to consult the trade generally about the incidence of this triple taxation.
A matter of this magnitude cannot be dissociated from our total war effort. At present, Australia is gradually changing over, as far as it can afford to do, from the manufacture of peace-time requirements to the manufacture of war materials. We must release from everyday industries as much man-power as possible for absorption by war industries. This tax will impose a heavy burden ipon distributing trades, which do not need to be bolstered up, because they contribute nothing to the national wealth. Our war legislation should attempt to simplify the conduct of peace-time industries in order to reduce to a minimum the number of persons engaged upon the distribution of peace-time necessities.
– In the Commonwealth, 100,000 persons are still unemployed.
– They are not skilled clerks. There is practically no unemployment in the clerical grades, and employers experience difficulty in obtaining trained men. If bigger staffs are required as the result of the imposition of this tax, the price of goods must be increased, and the general community will be poorer for it. If the Government were to simplify the sales tax, businesses would not require increased staffs to deal with it. During the depression, our aim was to create avenues of employment in industry; but, at present, our purpose should be to release people from peacetime industries in order that they may be engaged in speeding up the war effort. The duty of Parliament should be to smooth out, and not to increase, difficulties of business administration.
.- Any member of the public who has the opportunity to read the various speeches delivered by honorable members upon the sales tax legislation will be amazed to learn how the parliamentary machine operates. Although every speaker to date has criticized the measure, it is obvious to all that, because of some peculiar arrangement arrived at between the various parties, the bill will be passed on the voices. It is all very well for honorable members opposite, many of whom are known to be wealthy, to declare that the workers must bear a portion of the sacrifice arising out of the national emergency. Workers are making a real sacrifice when the Government taxes their food, and other domestic requirements. This legislation means that they must consume less than before. Honorable members opposite talk glibly about the “ equality of sacrifice.” When they pay their taxes, no physical sacrifice is involved. All they have to do. is to write a cheque for the amounts set out in their assessments. Although their bank balances may De somewhat smaller than usual at the end of the year, they will not have to do without food.
– Our overdrafts will be increased.
– The honorable member cannot truthfully declare that he is making any real physical sacrifice. The sales tax is most unfair. The honorable member for Werriwa (Mr. Lazzarini) was correct when he stated that direct taxation is the fairest form. The sales tax is a way of chloroforming the people and removing money from their pockets, unknown to themselves. I am amazed that honorable members opposite, after criticizing the bill, will later vote for it.
When the Treasurer (Mr. Fadden) introduced this legislation, he deliberately informed me that foodstuffs would not be affected, but I notice in Division TV. of the second schedule such items as mixtures of vegetables and meat, canned or bottled; soups, canned or bottled; soup powders and soup cubes; and pickles and vinegar. For several days, honorable members opposite have taken credit for increasing by a small amount the allowance paid to invalid and old-age pensioners. Under the compromise effected between the Government and the Opposition, this unfortunate class will receive an additional ls. a week; but before they are paid the increase, the sales tax will take from them more than that amount. Of the 300,000 invalid and oldage pensioners in the Commonwealth, the majority live in rooms, and lack the everyday domestic facilities for preparing their meals. As they depend largely upon canned and bottled foods, they will make the greatest contribution under this tax. Honorable members opposite talk glibly about the necessity for compelling the workers to make sacrifices. Is it not time for Government members and the wealthy section whom they represent to make a substantial contribution in that respect? I ask leave to continue my remarks at a later hour.
Leave granted ; debate adjourned.
Presentation to the GovernorGeneral.
– The Address-in-Reply will be presented to His Excellency the Governor-General at Government House to-day at 2 p.m. T shall be glad if the mover and seconder of the Address-in-Reply, together with other honorable members who so desire, will accompany me when I present it.
Sitting suspended from 12.45 till 2.S0 p.m.
Debate resumed. [Quorum formed’].
– I listened with interest to some of the arguments advanced by honorable members opposite, and particularly the remarks of the honorable member for Denison (Mr. Beck), concerning the sales tax on boots “and shoes. The honorable member seemed to be more concerned about the interests of the bootmanufacturers than about protecting the interests of the public. He said that unscrupulous individuals would be able to avoid the tax. “Wealthy companies, of course, engage the best legal brains in the community in an effort to avoid the payment of their just dues, and it will never be possible to prevent the unscrupulous from trying to avoid taxes. The suggestion by the honorable member for Denison, with regard to the sales tax on boots, would not help the workers, but, if adopted, would bring into the field some who now escape the tax. If he wishes . to advance the interests of the boot trade, the best way would be to devise means by which poor people would be able to obtain boots. In my electorate hundreds of unfortunate children are compelled to go without them, because their parents receive such low wages that they cannot afford to purchase them. The honorable member for Henty (Mr. Coles) suggested that the intention of the Government was to force workers from industries producing consumer goods to industries engaged in the war effort. That would be a foolish policy. If every member of the community were fully employed, and a greater supply of materials for the defence of Australia were needed, such a proposal might he justified, but over 100,000 workers in Australia are still unemployed. It is said that they are mostly unskilled workers, yet various trade-unions report that many skilled men are now available for employment. The Carpenters’ Union in Sydney has established a new employment office on the waterfront, and it recently advised me that, at any time, at least 200 skilled carpenters could he supplied for marine work at a few hours’ notice.
I stated earlier in my speech that every member who had spoken had criticized this bill, hut regarded it as necessary, because money had to be raised from some source to finance the war effort. We should examine other fields in which this money could be secured, without taxing the poor. I recently addressed the following question to the Treasurer about Commonwealth tax-free loans: -
The Treasurer replied -
That answer was a mere evasion.
– If the securities are bearer-bonds, what record is kept of them?
– The Treasurer, by his reply, suggests that there are no records ; but the names of the purchasers of inscribed stock are recorded and could be made available to the Parliament and the public.
– The honorable member must discuss the bill.
– I am endeavouring to show that it is unnecessary to impose this additional tax, since the money required by the Government could be provided from another source. Numbers of people profess to be very patriotic, but they evade their responsibilities by investing money in ways which enable them to escape taxes. I have received information during the last few weeks that certain members of the Government have recently taken up parcels of tax-free bonds. Since the Government requires invalid and old-age pensioners to pay more for their food and medicines, it is only reasonable to suggest that the fullest facilities should be made available to members of the Opposition to ascertain who buy up parcels of tax-free bonds. In the last few years members of the present Ministry have disposed of shares in various companies. I presume that they have not thrown away the money received for the shares. How have they invested it? So far as I can ascertain, they have not made free gifts of their money to the Treasury. If they have taken up large parcels of tax-free bonds-
– The honorable member must confine his remarks to the bill. He may not enter into a discussion concorning individual members of the Government.
– I did not mention any individual member of the Government, but, had I been in possession of more detailed knowledge I should have done so- The fact is that the Government is preventing members from securing information on this matter. It is wrong for members of parliament to be talking about equality of sacrifice when they are prepared to impose a tax on the poor and at the same time allow well-to-do members of the community to escape their responsibilities
Since the invalid and old-age pensioners were granted an increase of the pension by ls. a week, the price of matches has risen by 2d. a dozen, and up went the prices of tobacco and other commodities, with the result that the pensioners will immediately lose the benefit of their increase. Honorable members opposite say that some of their wealthy friends will have to pay income tax at the rate of 14s. in the £1. As the honorable member for Barton (Mr. Evatt) pointed out, it is not what we take from a man which counts, but the amount which we leave with him. I should be glad to be getting an income which required me to pay tax to the amount of 14s. in the £1. The Government is not only imposing tax on the foods and medicines of the poor, but it is also imposing penalties on children. It is grabbing the lollies of the school children! It makes the invalid who requires an invalid chair pay an extra tax. Additional penalties are being imposed on the sick and invalid ‘ who require medicine, and surgical equipment. These people are to be penalized because of their misfortune, whilst others are to be permitted to escape taxation. The sales tax Ls wrong in principle, but because of some peculiar agreement between the parties - I should prefer to use a much stronger term - honorable members are to be prevented from recording a vote upon it.
– The honorable member is confined to barking. He is not allowed by his party to bite.
– The honorable member for Barker is a barker only when he is out of the Cabinet. He is now using his position on a back bench in order to barge his way back into the Ministry. His opinion does not count for much, either in this House or outside. He thinks that the workers exist only in order to produce wealth for others to enjoy. When he was in the Ministry, he tried to cripple the trade unions and prevent the workers’ views from being broadcast. By dictatorial methods he has always tried to down the workers.
– Order ! The honorable member may not engage in a private quarrel in the consideration of this bill.
– The speeches of honorable members do not amount to a snap of the fingers in preventing the Government from pursuing the course which it has chosen ; but every member of the Opposition should demand on the public platform that the people should be made aware of the identity of the alleged patriots in this Parliament and outside who, by investing in Commonwealth taxfree bonds, are escaping their responsibility.
.- I have received a large number of telegrams from not only Western Australia, but also other parts of Australia, protesting against the method of collecting the sales tax. The concluding portion of a telegram sent by the President of the Chamber of Commerce, Perth, reads as follows : -
Chamber suggests before present proposals are passed full consideration be given as to whether some scheme can be adopted which, whilst providing required revenue, would simplify method, thus avoiding the possibility of many errors and saving largely in expenses.
All the telegrams admit the necessity for collecting the same amount of revenue. A leading member of the Opposition and a leading member on the Government side have both urged that a flat rate of tax should be imposed on footwear. In view of that I urge the Treasurer (Mr. Fadden to ascertain the simplest way of collecting the tax on this item.
.- 1 condemn this iniquitous tax because in passing it on business people will add a percentage for profit on the additional outlay. It is regrettable that a tax should be imposed on foodstuffs. The effect of this tax will be to bring about an increase of malnutrition which unfortunately is already widely prevalent among our younger people. Sales tax has also been imposed on the requirements of settlers and graziers, on windmills, pumps, tanks and tank stands, troughing, water sprinklers and irrigation machinery. All of these items so necessary for the new settler should be exempt. So unmindful is this Government of the interests of the unfortunate, the sick and injured people, that it proposes to tax even surgical appliances, including abdominal belts, adhesive plaster and strapping. Educational and scientific books should be exempt from the tax. We should do everything to encourage rather than hinder the acquisition of learning. As a stranger in this House I find the greatest difficulty in ascertaining what rate of tax is to be levied on the items appearing in the schedule. A Good Samaritan has told me that a tax of 10 per cent, is imposed on all items in the first schedule, 5 per cent, on those in the second schedule, and 15 per cent, on those in the third schedule. The rate of tax should be clearly shown in respect of every item appearing in the schedules. Bills of this kind are thrown down before us, and with only about five minutes to examine them honorable members cannot possibly deal with them intelligently. I cannot too strongly express my condemnation of the imposition of this iniquitous tax on foodstuffs.
– I was very surprised to hear some of the criticism offered by honorable members to the Government’s proposals in connexion with the sales tax on footwear. The honorable members for Denison (Mr. Beck) and Melbourne Ports (Mr. Holloway) and several other honorable gentlemen, particularly those on the Opposition side, opposed the tax on footwear on the ground that it would inflict hardship on people who are not well off. They have suggested that a flat rate of 5 per cent, should be imposed on all footwear. That seems to me to be a direct contradiction of the attitude generally taken by honorable members opposite in connexion with indirect taxation. Honorable members generally, I think, agree that those with the smallest incomes should be exempt from direct taxes. That is the principle which the Government has adopted in connexion with the indirect tax on footwear. All footwear that sells at a retail price of less than about 22s. will, under the Government’s proposal, be free from tax. That will automatically exempt from tax all children’s footwear except luxury lines.. Those who pay from 22s. to 25s. a pair for children’s shoes can well afford to pay this tax.
– In urging that a flat rate should be imposed, I said that children’s footwear should be exempt.
– I was not aware of that. I entirely disagree with the suggestion that a flat rate be imposed. We should endeavour to exempt footwear sold at a price within the reach of those of modest means. That is what is aimed at. in the Government’s proposal.
– Does the honorable member suggest that footwear costing 22s. 6d. can be regarded as a luxury?
– It is possible to purchase quite good footwear at about a guinea. Those who are able to pay more than that should have no objection to paying sales tax, particularly at a time such as this. The proposal of the Government in this connexion confers a distinct benefit on people with small incomes.
.- As the leaves of the budget turn over and the plot develops to its climax, we see even the most doughty fighters for orthodox finance losing faith in their cherished formula, lt is not my intention to tell the Government how it should make this formula work, because I do not believe that it is -workable. In its incidence this legislation will act as a punitive measure rather than as a measure of raising funds to enable the Government to carry out its war effort. It is recognized by all honorable members that a policy of decentralization is necessary in the best interests of the community; but the greater part of the legislation brought down by this Government will have the effect of militating against, instead of fostering, that policy. Let us consider for a moment the effect on small tailors in country towns of the proposed sales tax on clothing. The general store in the average country town has not the means to purchase the ready-made clothing available to city dwellers. The clothing requirements of the average man in the country are catered for by the local tailor. The country man wears his suit for from twelve months to two years, and the effect of this legislation will be to squeeze the country tailor out of existence. If he employs labour, he will have to put his man off and, as no employment is available in country towns for that class of labour, the unfortunate employee will drift to the cities. The consuming power of the people is lessened and so the vicious circle goes on. Every piece of legislation brought down by this Government has been ill-considered and vicious in its incidence. The Government has even seen fit to impose the tax on tinned milk. Any body familiar with conditions in country towns knows that for about three months of the year it is almost impossible to get fresh milk. Even if fresh milk is available during that time many people are too poor to buy it. Every docket presented in return for a dole ticket used in the country will be found to record the purchase of tinned milk. That milk is used, not for household purposes, but by the baby of the family. If items such as tinned milk are taxed, the children of the poorest section of the community will be deprived of an essential food.
Tinned vegetables also are to be taxed. All honorable members must be aware that at. times fresh vegetables cannot he purchased even on the Sydney market. What chance would country people have, in such periods, to obtain adequate supplies ? Frequently the use of tinned vegetables is. compulsory in the country, because fresh vegetables are unprocurable. I need hardly remind, honorable members that various organizations interested in the promotion of public health have again and again emphasized the food value of milk and vegetables. If poor people cannot afford to buy these necessaries, they and their children may suffer from serious malnutrition. If that state of health should develop generally, obviously we should not be able to make a maximum war effort. Some honorable members opposite have referred to the desirability of imposing this tax on the initial sale in preference to the final sale, hut under our modern system of finance, it does not matter very much at what stage it becomes payable. A certain amount of capital is required to market goods, and if more than the necessary amount is used- larger aggregate profits will be required by the capitalists, although the percentage of profit may remain more or less stationary. The adding of cost to cost is invariably to the detriment of the community, and sooner or later our persistence in this process will bring our economic structure crumbling about our heads. I have said on other occasions in this House that the Government should make some revolutionary changes in our monetary system. Private banking methods which might have been suitable to the economy of 100 years ago are entirely unsuitable to the economy of to-day. The more closely we examine the provisions of the budget, the more clearly we see that the working community will be heavily penalized by them.
– I was pleased to hear the honorable member for Darwin (Mr. Bell) refer to the inconsistencies of honorable members opposite as revealed by their different attitudes on this sales tax legislation and on tariff proposals. The honorable member’s remarks awakened in me memories of a tariff discussion in which I participated in the Senate seven years ago. It was the longest and fullest tariff discussion that had ever occurred in the Senate, and it is remarkable that the items then under discussion included some that are now being discussed in this chamber. On this occasion the issue is not whether a heavy customs duty should be imposed, but whether a comparatively small addition should be made to the rate of sales tax.
In my contribution to that Senate tariff discussion I devoted a good deal of attention to footwear. I was glad to hear the honorable member for East Sydney (Mr. Ward) take a stand to-day in the interests of the consumers, for seven years ago, in the Senate, I also directed attention to the rights of the users in dealing with, among other items, tobacco, footwear, medicines, and rabbit traps. Unfortunately, too few members of Parliament show an interest in the welfare of the consumers.
The remarks of the honorable member for Melbourne Ports (Mr. Holloway) in relation to footwear were made in a persuasive and insinuating manner, using the word “ insinuating “ in its best sense. In the Senate tarin’ discussion of 1933, I moved that the proposed British preferential rate of duty on footwear should be reduced to 30 per cent. I considered that with the assistance of freight, exchange and primage, that rate afforded adequate protection to the Australian industry.
– The honorable gentleman doubtless desired to make possible the importation of British footwear, .although our Australian boot factories were not then operating at full capacity.
– With the natural protection then available, my proposed reduction of 15 per cent, would still have left the local manufacturers with a 65 per cent, protection against British products and 100 per cent, protection against foreign goods. The amendment Was defeated on a division by 14 votes to 7. Every Labour senator voted against my amendment. I find it difficult to reconcile their attitude with the views being expressed to-day by honorable members opposite. For many years, Australia relied upon British manufacturers for the supply of the footwear required here, but by 1933 95 per cent, of our requirements were being manufactured locally. I considered that in view of the decisions of the Ottawa ‘Conference which had just been made public, we were under some obligation to assist the British manufacturers of footwear and other goods. The members of the Labour party thought otherwise. My old friend, Senator Rae, in a characteristic utterance on my amendment, said -
I am sure that on reflection Senator Duncan-Hughes will realize that his proposal merely skims the surface, and would have but ephemeral results.
In concluding his speech, the honorable senator remarked -
I should be out of order if I said more than once each time I rose, “There is no remedy for the existing trouble other than the destruction of capitalism “.
– Hear, hear!
– I expected to hear at least one honorable member opposite endorse that view. My desire was to ensure that purchasers of boots would be able to obtain their requirements at a reasonable price.
Then the honorable member for Werriwa (Mr. Lazzarini) referred to the effect of the Government’s proposals on the prices of medicines. In the 1933 discussion in the Senate, I adopted precisely the attitude that he is adopting to-day. I moved that the proposed British preferential duty of 30 per cent, ad valorem should be reduced to 20 per cent. A keen discussion followed and my amendment was defeated by 14 votes to 13. Again, although the amount was designed to enable working people in particular to obtain their medicines at a reasonable price, every member of the Labour party present voted against it.
– We are now able to make in Australia practically all the medicines we require.
– That may be so. I was interested to learn subsequently that my amendment was viewed with favour by many of the big chemists, and also by many members of the general public.
– As the result of the policy that was then adopted, our soldiers are now able to obtain Australian-made medicines.
– The honorable member for Melbourne Ports, as I have already said, made his speech in a most persuasive fashion this morning, but it did not influence me greatly because I remembered that the attitude adopted by honorable senators of the Labour party seven years ago resulted in the defeat of my amendments.
– If the honorable member was right then, the same attitude should be right now.
– We are at war now.
– That is so. The conditions are entirely different to-day.
If I felt a temptation to support any of the views expressed by any honorable gentleman opposite on this bill, I should lean to the case submitted by the honorable member for Bourke (Mr. Blackburn) in regard to books, and more particularly books of learning. This issue was dealt with in this Parliament about ten years ago during a criticism of imposts on books, and as the result of the clamour the Government’s policy Was eventually varied. In these days, every one should be prepared to make some sacrifice to assist the national war effort. Nevertheless, I do not think it is sound policy to penalize purchasers of books of learning. In times like these the natural tendency is to limit expenditure in this direction. Honorable members are in a fortunate position in that they are able to obtain from the Parliamentary Library such books of this character as they may require. I do not regard books of learning as luxuries, although it may be true that we could do without some of them for the time being. One result of the imposition of this tax will be that the importation of books of learning will be discouraged, with a consequent slackening of the dissemination of real knowledge throughout the community. I do not suggest that the Treasurer (Mr. Fadden) should drop his proposal at this moment, but he should, I think, seriously reconsider it in the near future in order to see whether it is not practicable to obtain the revenue he requires without putting on this tax. I hope that it may be possible to restore books of learning to the list of exemptions.
In my budget speech, I expressed the view that difficulties would be encountered with the imposition of differential rates of sales tax. This procedure will, I am sure, be a bugbear to small business people. However, I have no doubt that all of us are of the opinion that we could make a better selection than the Treasurer has made of goods to which the sales tax should apply, but I am also certain that the selection of any one of us would fail to give complete satisfaction to any other one of us. In any case it is of little use for us to wave the flag and talk about the Empire and the need to do our utmost to assist the war effort if, immediately we are faced with specific propositions, we stumble and fall away from our high aspirations.
– What has the honorable member done to assist the war effort?
– Surely it would ill-become any honorable member to emphasize his own particular part. In any case this not a time for small personalities. We should look at the facts. The Government’s proposal is designed to assist the nation to make its maximum war effort. ‘Consequently, although I may not be in favour of some of the details of the measure before us, I do not intend to vote against it. I may think that I could have made a better choice, but that is not the point. I do not desire, either, to emphasize that the sales tax was first imposed by the Scullin Government. That ako is beside the point. There is no reason why honorable members generally should not express their views on the details of the Government’s measure, but, for my part, I shall vote for the bill irrespective of whether I favour all of its provisions.
.- Every one agrees that the provisions of this measure are not altogether equitable. Those honorable gentlemen who have spoken in support of it’ have used the argument that we should concentrate all our financial resources on the war effort. We all believe in giving of our best in order to win the war. But the Government can go a little too far in its harsh treatment of the people whom it expects to fight in defence of Australia. It is unreasonable to tax them indirectly to the degree that is proposed in this measure in addition to the extremely heavy direct taxation that is already provided for in the budget. The Government even had the temerity, in that budget, to propose the reduction of the income tax exemption from £250 to £150; but, fortunately, the Labour party was able to force it to compromise at £200. The annual consumption of taxable goods in Australia is valued at £365,000,000. Of the total, goods to the value of £314,000,000 will be free of sales tax. The machinery used by primaryproducers will remain exempt. I can see in that the hand of the Country party, which dictates what action the Government shall take in regard to primary industries. This is the price it demands of the Government in return for its support. The Minister said in his speech on this bill -
Exemptions from sales tax are based upon certain well-defined criteria, which may be briefly stated as follows: -
The goods are basic foodstuffs.
Machinery and equipment in primary industry.
But the honorable member for East Sydney (Mr. Ward) and others have made it abundantly clear that basic foodstuffs will not be exempt from sales tax. The poorest members of the community, such as old-age pensioners who have no other home than a bachelor hut or tenement, will be forced to buy the preserved commodities which are referred to in Division IV. of the second schedule to the bill as “vegetables, canned or bottled ; mixtures of vegetables and meat, canned or bottled; soups, canned or bottled; soup powders and soup cubes; tomato puree and tomato paste; pickles, olives and capers; vinegar; and ice”. Are they basic foodstuffs or are they luxuries? Surely the Government cannot honestly classify them as luxuries. Those unfortunate people who live by themselves on a pension or small annuity will be obliged to pay a heavy share of this 5 per cent, sales tax. It is a tragedy.
I refer now to the exemptions provided in favour of primary producers. In 1934 or 1935 I’ was instrumental in having a number of commodities used by miners placed on the list of exempt goods. But the Government has cast its dragnet and brought those articles into the field of sales taxation once again. Miners, who are engaged in a form of primaryproduction, are to be hit by the sales tax even before they can start work. Their pit boots, picks and shovels, drills, boring machines, explosives and carbide, which they must purchase in order to earn their income, are to be taxed. The honorable member for Barker (Mr. Archie Cameron), who is so concerned about the welfare of the cocky farmer, laughs. All of us are concerned with the welfare of the man on the land, but it is altogether wrong to discriminate between different primary industries, as has been done in this bill. Coal is just as important a primary product as is any other commodity. It provides the fuel that drives the wheels of industry and brings the farmer’s wheat and other products to market.. Notwithstanding this, coal-miners and coal-owners are to toe obliged to carry a heavy burden of sales tax, whilst other primary producers are to go more or less free. Division I. of the second schedule to the bill provides that the tax shall apply to “ all materialsfor use in the mining industry in carrying out mining operations and in the treatment of the product of those operations “. Even metalliferous mining is to be affected, because the provisions include “ material for use in the recovery of metals by the flotation, cyaniding, electrolytic or similar processes “.
-. - Does the honorable member blame the Country party for the fact that agricultural machinery is not to be subject to sales tax? If so, the Labour party’s chances in the Swan byelection might be prejudiced.
– The honorable member cannot bait me like that. The Labourparty believes in exemption from sales tax of all tools of trade in primary production. When honorable members of the Country party bargein on the composite Government and dictate, for the price of their votes, what exemptions shall be granted to the people whom they directly represent - or misrepresent - why do they not ensure that other primary producers, such as the coalminers, receive the same privileges ? Had’ the Labour party sold its principles for portfolios, it might have been able to save the miners from the severe effects of these proposed taxes, it might also have relegated the Country party to the background of political affairs. But the Labour party will always stand by itsprinciples; it will never sell out.
– Does the honorable member suggest that the coalfields should be represented in this Parliament by members of the Country party ?
– If the coal-miners, had a representative like the honorable member for Barker (Mr. Cameron), who has jumped like a political brown billy-goat from crag to crag, they would dump him down one of the mines. I am a miner. I am not interested in dividends from the coal-mines, but it is my duty to endeavour to look after the interests of the mine-owners; in doing so, I shall also be looking after the interests of the miners. I endeavour to ensure that the owners will not be required to pay such heavy overhead costs by this tax on machinery as will cause idleness on the coal-fields. I have never held a brief for the mine-owners but, from a life-time of experience, I know that they will suffer severely from the effects of this proposed sales tax which will reflect itself in less work for the men, for whom I am mainly concerned. Coal-miners work on contract, not day labour conditions. Therefore they have to purchase their own tools and explosives. That reminds me of a statement by my friend from the tall timbers in Victoria, the honorable member for Gippsland (Mi1. Paterson). He said that the sales tax would not apply to boots costing less than 15s. a pair wholesale, or about 21s. retail. But coal-miners must use boots capable of resisting the damaging effect of chemicalimpregnated water in the mines. Consequently they cannot purchase satisfactory boots for less than about 25s. a pair retail. These are called pit boots. If some of the miners did what they sometimes feel like doing, and trod on the faces of supporters and members of the Government with their mining boots, those honorable gentlemen would soon realize the quality of their footwear. The bill also provides for sales tax on wooden tool handles that are used by the miners. These were formerly exempt from sales tax. Brattice cloth, which is essential in mining operations, will also be taxed. It is used to ensure perfect ventilation in order that gases that are liable to spontaneous combustion may be driven out of the mines. By including this com modity in the sales tax provisions tha Government is courting the risk of serious explosions in the coal-mines. Surely honorable members on the Government side of the chamber are not so callous as not to have been deeply affected by mine explosions in which as many as 300 men have been blown into eternity. It seems that these dangers do not matter to them. I often speak in this House on behalf of the miners. At times I become tired of trying to enlist the sympathy of Government supporters for my constituents. Honorable members opposite have been warned time after time of the precautions that should be taken in the mines in order to provide for the safety of the workers. The imposition of a paltry 5 per cent, sales tax upon mining materials, such as brattice cloth, may cause the owners to economize in their use, with the result that men may be killed. In that event, the Government would realize that what Rowley James had said so often was true. Honorable members opposite do not seem to care what happens to anybody other than the people whom they represent. They do not believe in the slogan, “ All for one and one for all “. They are concerned only about the interests of the wealthy classes and overlook the welfare of the working classes. Timber, one of the most important articles used in mines, also comes within the dragnet of this measure. It is used in order that .miners may not be crushed by sudden falls of rock in the bowels of the earth. Is the protection of profits the first consideration, and that of human life the second? It appears to be so when the Government is prepared to exempt all primary-producing machinery except mining machinery. I am complaining not because farming machinery has been kept out of the field of sales taxation, but because mining machinery has not. The miners cannot work in the pure air and God’s sunlight; they have to earn their living in the foul gaseous atmosphere beneath the earth. Timber and other materials used for safeguarding miners’ lives should not be subject to heavy taxes; then, the mine-owners will not reduce their use in the mines, and, thereby lower the margin of safety of mine-workers. Other items in the schedule are saddlery and harness, and trace chains. Saddlery is used more extensively in the mining industry thaI in many other industries. The safety of the lives of men who have to work thousands of feet below the surface frequently depends on the strength of the wire rope used to lower them and haul them to the surface, yet a tax of 5 per cent, is imposed on this article. Many mining disasters have been due to an inrush of water, which has had to be pumped out. Men have been trapped like rats below the surface. The saddest feature of such a catastrophe is the pitiful last message left for wives on the food cans of the men. In the little town of Hamilton, close to where I was born, a number of men were trapped on one occasion by an inrush of water. Callous and brutal disregard for the welfare of those who are placed in such a situation is shown by the tax imposed on pumps which are used to keep water out of mines.
Another member of the. community which this tax will hit very hard is the invalid pensioner. Many pensioners need abdominal belts, crutches, bandages and bandage winders, artificial limbs, artificial eyes, elastic bandages, knee caps and stockings, surgical boots, surgical, medical and first-aid outfits, trusses, &c, yet all of these are to be taxed. If honorable mom bers attempt to justify the taxing of the poor, the sick, and the afflicted, whilst exempting others who can well afford to pay, they will not be observing the principles which they enunciate. Shortly, we shall be commemorating the birth of the Lowly Nazarene. This measure is a striking example of departure from His teachings that we should assist the poor.
In working-class communities, the acquirement of homes is the ambition of our citizens. This is the first aspiration of young married couples. Yet the whole of the building materials are again to be brought within the ambit of this tax. Men should be encouraged to he patriotic, and prepared to fight and shed their blood in the interests of their country. Bad though the conditions may be in this country, the Australian youth is nevertheless responding magnificently to the call for enlistment for military service a’broad, and the enlistments of mem bers of the working class, as usual, are the most numerous, because they represent the largest section of the community. We should not, by the imposition of taxes, reduce the standard of living of our people below what is fair and reasonable, but should encourage them to build homes. Girls who work in city stores, and in the State and Federal public services, if in receipt of a taxable income exceeding £200 a year, are to be subject to a direct tax. Everybody must realize what a hard struggle a woman has who is living away from her parents in city apartments. The rent that she has to pay for decent accommodation is high. In addition to being taxed directly, women are to be further taxed on all the toilet accessories they need, such as face powders, rouge, creams, lotions, oils, lipsticks, lipsalves, eye-brow pencils, eye.beautifiers, and other preparations which enable them so to improve their appearance that they are attractive in the eyes of gentlemen like some of the old bluebeards who sit opposite. We believe in having a healthy and clean race, yet the Government proposes to tax body powders, deodorants, creams and similar preparations, suntan oils, lotions, &c, toilet and bath soap, bath salts, solid or liquid, foam preparations, shaving sticks, creams, soaps powder and tablets.
I propose to move at the appropriate stage for the exemption of these and other items affecting the mining industry to which I have referred. Some persons have always been able to secure exemptions and bounties in return for their political support. There are bounties on practically everything produced, yet nothing has yet been done for the coal-mining industry. In the early hours of this morning, this House dealt with a matter concerning the apple and pear bounty. Mention was then made of the 7,000 to 11,000 growers in the fruit industry being “ hard up “. I represent approximately 15,000 miners, for whom nothing has been done and who have suffered more than any other section. Not only are they not to be given a bounty directly, but they are to be taxed directly and indirectly. Tax is even imposed on soaps. That goes a little too far. I plead with the Treasurer to give consideration to the matters I have raised.
I am not pandering to him when I say that I have always found him reasonable and ready to listen to our representations. Naturally, not being associated as closely as I am with the mining industry, he has had to rely for advice on his departmental officers, who have told him that these are the only sources from which revenue can be obtained. The primary producer, it is said, must not be asked to pay a tax on his harvester; yet all of the articles which the constituents of Rowley James need are to be subject to sales tax. That gentleman intends to “ kick like the devil “ in order to have these items again placed in the exempt list. I fought for their exemption in 1934 and 1935. If it was right to exempt them then, it is equally right to exempt them now.
.- Division VI. of the third schedule provides for the imposition of a sales tax of .15 per cent, on yachts, skiffs, dinghies, launches, speed-boats and canoes. The Government is to be commended on that account. But the Government also intends to tax at the same rate children’s toys, such as those purchased at Woolworth’s and Coles for 3d. or 6d., small games sold for 6d., children’s stockings, penny lollies, school-books, Christmas blockings, and everything else that gladdens the heart of a child. Surely the Government is not in such dire straits that it is necessary to tax all of these items at the high rate of 15 per cent.! I appeal to the Treasurer (Mr. Fadden) to give further consideration to this matter. I am certain that neither he nor the Government wishes to prevent poor children from purchasing what will brighten their Christmas festivities. The honorable member for Wakefield (Mr. Duncan-Hughes) made a patriotic appeal in support of the sales tax, but I remind him that, during the last war, when there was no sales tax, the public found ‘all the money necessary. This insidious form of taxation was introduced in 1931, admittedly by a Labour government, but it must be remembered that Australia was in a terrible economic condition at that time. Labour has not been in power since 1932, but the sales tax has remained, and this year the Government proposes to raise by it no less a sum than £20,400,000. When the Labour Government went out of office, the sales tax was yielding £8,000,000 a year. Now, out of a total of £74,000,000 which it is proposed to raise by indirect taxatian, over £20,000,000 is to come from sales tax. This form of taxation falls with particular severity on the lower sections of the community, and the larger a man’s family, the more he has to pay.
– I feel sorry for the Treasurer (Mr. Fadden), who has probably the hardest job in Cabinet at this time. His is not a popular job, when taxes have to be increased. During the regime of the Lyons Government, the task of the Treasurer was pleasant enough, because every year he was able to reduce taxes, including the sales tax. I was looking forward to the time when it would be possible to abolish sales tax, but, owing to conditions arising out of the war, it is necessary to raise more revenue, and so all taxes, including this one, must be increased. Let us not forget that under this budget we have to raise £186,000,000. It is easy for every one to tell the Government to leave him alone and tax the other fellow. The honorable member for Hunter (Mr. James) put up a very good case for exempting the coal-miners, and the honorable member for Griffith (Mr. Conelan) made an eloquent plea in favour of exempting from taxation the children’s lolly-sticks and toys. Before that, several honorable members asked for concessions to the boot industry, and others wanted the tax on confectionery reduced. If all those concessions were granted, several million pounds of revenue would have to be made up in some other way. Therefore, I support the Treasurer’s proposals, little as I like them. I believe that an excellent precedent was created when a committee of the members of this Parliament was appointed to consider the taxation of profits. I understand thai the committee reached a unanimous decision which will be subsequently brought before the House. This method of considering proposed taxation should be extended. I do not suggest that it can be done now there is not the time, but it will have to be done sooner or later. It is impossible for the Treasurer alone, or even for his officials, to see all the possible effects of any proposed tax, and whatever he done, anomalies will arise. The tax on books was removed after it had been in operation for some time, and now it is to be re-imposed. I appeal to the Treasurer to make more use of the members of this House. We are here to help him, and if he must have £20,000,000 from sales tax, we shall find it for him in such a way as to do the least possible harm to industry, while inflicting the minimum of hardship on the public. I do not favour the proposed differential rates of sales tax. Storekeepers have sufficient difficulty now in connexion with the tax, and their difficulties will be increased under the new system. However, we are prepared to put up with these hardships now, because there is a war on, but in future members pf Parliament should he consulted more fully upon these matters.
– This is the tail-end of a longdrawnout debate, during which honorable members have criticized both the principle and details of the measure before the House. The Government proposes to raise an additional £3,400,000 by means of the sales tax. I object to this method of raising revenue while other avenues are available, just as I object to all attempts to increase indirect taxation which falls most heavily upon the poorer sections of the community. I appreciate the difficulties with which the Treasurer (Mr. Fadden) is confronted, but I cannot avoid feeling resentful when I see heavier taxes being piled upon the workers, while the Government refuses to explore properly other avenues for raising revenue. This measure shows the wide difference of outlook between the Government and the Labour party. It proves that there is no hope of complete co-operation between the two parties, one representing as it does the interests of the wealthy section of the community, which controls all the instruments of propaganda and publicity, and the other the interests of the majority of the people, including the workers. The Labour party wants to see those who have most at stake pay their proper share of the cost of the war. That raises the question of what is their proper share. The Government evidently agrees that they should pay something, but it also proposes to increase the tax burden on the poor by raising indirect taxation. No less than 82 per cent, of the revenue raised last year came from indirect taxation, and now the Government proposes to take more.
I deny that this budget has been hastily prepared. As a matter of fact, the Government deliberately refused to produce its budget until after the election in order to avoid political consequences. The budget has been carefully prepared with the idea of loading on to the workers all they can bear, while placing the lightest burden possible on the wealthy. For that reason I object to it. This measure is called “A Bill for an Act to amend the Sales Tax Exemption Act 1935-1939, as amended by the Sales Tax Exemption Act 1940”. Its proper title should be, “ A Bill for an Act to remove such protection as formerly existed for the living standards of the workers “. While an additional £3,400,000 is to be raised by the sales tax, certain wealthy companies are piling up enormous reserves. Taxation on such companies should be increased before additional burdens are laid upon the workers, and by the workers I mean, not only those employed in mines, factories and transport, but also primary producers and clerical workers. Probably the Government will be compelled next year to make even heavier demands on the public, but, at this stage, so great an increase of indirect taxation is not necessary. It is now proposed to levy sales tax on such articles as tinned foods, building materials, and materials used in the construction of water supply schemes and sewerage undertakings. The tax on building materials will make it more difficult for people to acquire their own homes. The capital cost of homes will be increased, and the interest charges will accordingly be greater. I realize that the Government must raise revenue for war purposes, but I condemn it for attempting to place the heaviest burden upon the workers, who are expected to fight the war and pay for it too.
Appeals are constantly ‘being made to the public to subscribe to various patriotic funds in order to provide comforts for men in the fighting services. I believe that the Government should provide whatever is necessary for the troops; there should be no need for additional comforts bought by private subscription, but as the Government does not accept that, it should not discourage public efforts. A patriotic carnival held recently at Essendon raised a gross total of £4,000, mainly by the sale and distribution of goods in various ways. The profit will be about £2,000, but if the claim which has been made for a sales tax has to be paid on the goods disposed of, it will reduce the profit by £100. Such an experience must greatly discourage the organizers. When goods are purchased for sale for patriotic purposes, they should not be subject to sales tax.
The honorable member for Melbourne Ports (Mr. Holloway) and the honorable member for Denison (Mr. Beck) dealt thoroughly with the desirability of imposing a flat rate, instead of differential rates, upon the sale of footwear. Such, a proposal is approved, not only by the manufacturers, but also by the employees. If the imposition of a flat rate will not result in a loss of revenue, the Treasurer could adopt it in preference to the proposed differential rates, but the rights of the consumer should not be neglected. I commend the honorable member for Eden-Monaro (Mr. Perkins) upon his courageous attitude in offering friendly criticism of the Government on this measure. Recently, he also made an excellent speech in defence of democratic institutions. When honorable members tender sound advice to the Government which they support, they should be complimented by the House. He pointed out that the Parliament could be made to work more satisfactorily by making greater use of the committee system. Despite all declarations to the contrary, I am convinced that a national government is unnecessary. Parliament can function successfully without it. The honorable member for Eden-Monaro stated that the committee which was appointed to inquire into the proposed war-time company tax has reached a unanimous decision. Later, its recommendations will be conveyed to the House. Similar work could be done with committees, thus preserving the rights of the people and the Opposition, and assisting the Government to function effectively. Although private members, irrespective of their party allegiance, are invariably willing to assist the Government in Australia’s war effort, use is seldom made of their undoubted ability and extensive experience. Once the Government has decided how it can best protect the wealthy, it is satisfied with its efforts, and gives no consideration to the welfare of the poor. Greater use could be made of parliamentary committees. If a committee representative of all parties were appointed to inquire into forms of taxation, other than those now contemplated, it could assist the Treasurer to achieve his budget calculations by means that would impose less hardship on large sections of the community. I protest against this bill, because it increases indirect taxation, with the result that the workers will make the biggest contribution. The Government deliberately delayed the introduction of the budget until after the general election had been held, and it now proceeds to extraordinary lengths to protect the wealthy. I should feel much happier if no compromise on the budget had been reached by the party leaders, because I wish to be free to voice my disapproval of this method of fleecing the people and lowering the living standards of the workers.
.- We are now engaged in the race to the recess, with the usual concomitants of hard work, forced marches and deliberations lasting long into the night, and with the additional penalty which arises from the fact that as the Government does not command with certainty a majority in the House, it cannot impose the “guillotine “ or the “ gag “ for fear that its somewhat defenceless position may be disclosed on the eve of Christmas to an inquisitive public. Such conditions are not favorable to an intelligent examination of serious problems of State, of which the sales tax is undoubtedly one. Those who have employed it from time to time, including the Scullin Government of which I was a member, have defended it on the ground of “ military necessity “, or have contended that in certain circumstances the end justifies the means. As I indicated in my speech on the budget, there is grave danger that too high a price in spiritual things may be paid for merely material advantages. That is aptly illustrated in the proposal to revive a tax upon learning and knowledge, upon mental processes, which is summarized in the phrase “ a sales tax upon books “. It redounds to the credit of the British public that they have made themselves so intelligently articulate upon this matter that the evil has been overthrown and any idea of imposing such a tax in the United Kingdom has been abandoned. It was interesting to observe the different kinds of mind that were associated with the protest in Great Britain, including men of letters, men of religion, philosophers and members of the reading public, who were accustomed to take refuge in the solace of communication with great minds through the processes of literature. We in Australia seem to have fallen from grace. The fight against the taxing of books has been waged in this Parliament on previous occasions, and we thought that we had won. In my view, the case against the imposition of a tax upon knowledge is unanswerable. Whatever the consequences, we dare not pledge things that are priceless for things that are material. We have no right, founded on mere necessity, to abandon matters of high principle. It is better to run any risk rather than take such a course.
The honorable member for Wakefield (Mr. Duncan-Hughes) made some comparisons between the attitude which he adopted in the Senate to the tariff and his attitude to the sales tax, in order to show that the Labour party manifested inconsistency in the fact that, whilst it was concerned about the interests of consumers of goods subject to sales tax, it manifested little concern for the consumer of goods subject to high tariff duties. Although his observations were, in my opinion, not altogether pointless, they lose much of their force when we consider the real significance of the Labour party’s attitude to the tariff. It is not simply a matter of collecting revenue. The protectionist policy is designed to stimulate local industry, in order to create employ ment, avoid costs of transport from overseas, and make manufactures available locally at prices lower than those of the imported articles. Whilst many sharp limitations may be imposed upon that line of argument, it is quite a logical presentation of a different case from that which is presented for the sales tax. This imposition is a predatory measure, designed to raise revenues ex necessitaterei I join with those who have expressed the hope that a different course of action will be followed, without necessarily losing revenue, from that which is now proposed in respect of the sale of boots. Manufacturers and workers alike have condemned the present proposal to impose differential rates according to price. On behalf of the employees’ organization, it has been well stated that the proposed tax -will undoubtedly place a penalty upon quality and value, and, conversely, a premium upon shoddy footwear. A representative manufacturer contended that the progress of the boot-manufacturing industry, with its extra service to the public resulting from years of experimentation and conscious effort, will be lost because most manufacturers will be forced to adopt mass-production methods, demanding of their labour quantity instead of quality. That will undoubtedly be the result of the tax in its present form. It is a mistake to suppose that intelligent working-class people think it prudent to purchase either in boots or clothes the cheapest article. In other words, it is problematical whether the cheaper article is not, in the long run, the dearer article. I think the better opinion is that if one can possibly find the money, as a rule he gets economically more for his money when he buys the more expensive article. That, of course, is quite apart from the fact that some goods are sold at extravagant prices and at unnecessarily high profits. Nevertheless, price has a relation to real value in goods. As employers and employees have indicated, this tax is merely an incentive to the manufacture of shoddy in place of a good article. It is a matter for congratulation that entirely by reason of tariff protection - and the honorable member for Wakefield would do well to bear this in mind - we nave succeeded in establishing in Australia a footwearmanufacturing industry which reflects great credit on operatives and manuf acturers alike. As some honorable members know, I do not hold extravagant views in regard to high tariffs, but I believe that we have reason to be proud of the fact that, with the assistance of the protection afforded by the tariff, we have been able to establish an Australian leather industry on the basis of good quality. It is entirely right that we should have cultivated to the fullest degree the manufacture of leather in Australia. We are now able to produce an article in competition with the very best in the world at, on the whole, a reasonable price. It would be regrettable if, as the result of the imposition of this sales tax, we should encourage our manufacturers to produce, in keen competition, an inferior article.
It is now proposed that sales tax shall be imposed on advertising matter which may be generally described, as far as I am interested in it, as handbills, salesbills or dodgers, which are distributed in the suburbs to advertise the holding of sales by drapers’ establishments and the like. Handbills are also, of course, distributed by butchers, bakers and retailers of classes of goods not subject to tax. They have been described as the bread and butter of the printing industry, and the tax proposed to be put on them will bear hard on those who print them and on the user of the goods. Some of the goods advertised in these handbills are themselves already subject to sales tax, which makes effective salesmanship difficult enough. The imposition of this further tax must result in the prices at which the advertised goods are sold being further increased. I do not know why this new departure is being made. The Government seems to have sought out new avenues in which the tax can be applied, but I cannot think that it is doing it very logically. A little more intelligent cooperation among honorable members might have informed Ministers better on this point. I hope that, with a view to ameliorating the hardship that it will entail, particularly on workers and the consuming public generally, the Treasurer will reconsider his decision to impose sales tax on books, boots and handbills.
.- I realize that it is futile to debate the general principles of this bill at any length, because the Government has made up its mind to go on with it. There are, however, certain anomalies in connexion with the sales tax which should be brought under the notice of the Government. Even at this late hour the Treasurer (Mr. Fadden) may be willing to exempt goods from the tax where its imposition would cause great hardship. The proposed sales tax on building materials hitherto exempt will increase greatly the cost of the average worker’s home and create a serious position for the co-operative building societies in the Commonwealth. In a letter addressed to the Registrar of Cooperative Societies, Sydney, on this subject recently the secretary of the Lidcombe Co-operative Building Society No. 4 Limited, wrote -
The recent application of sales tax to many classes of building materials hitherto exempt has created a serious position in our society.
As you are aware this society has recently completed all formalities necessary and incidental to carrying out its activities. To date some 46 loans have actually been approved by my board and perhaps 16 of these jobs are actually under construction. Another seventy loans will probably be submitted to my board in the next few weeks as the members concerned have not finalized their loan applications although in a number of these cases they have prepared their plans and specifications and secured their tenders.
Where the jobs are already started the member has completed a building agreement with the builder and presumably the burden of sales tax will fall upon the builder . . .
The assumption that the burden of the tax will fall on the builder is wrong, as I shall show later. The letter continued -
But of the remaining 30 cases approved, construction has not been commenced through no fault of the members but due to the necessary delays in preparing the society’s securities and obtaining Government indemnities. The majority of our members are young .men recently married who are endeavouring to establish a home for themselves and it seems to us particularly unjust to, in effect, tax these people an average of about £20 in the establishment of their homes through circumstances entirely beyond their control. My board feels therefore that your department representing the co-operative building society movement as a whole could properly make representation to the federal authorities concerned with a view to securing relief for at least those persons who have applied to the society for loans and through circumstances beyond their control have been forced to wait until completion of the society’s requirements and preparation of Government indemnity and now find that the cost of constructing their building will be in excess of the amount they contemplated finding through the application of sales tax on building materials.
P.S. - Since writing the above a local builder informs me that he was advised yesterday by the Sales Tax Commissioner that section 70
of the Sales Tax Act provides for the adjustment of contracts entered into before the 22nd instant to allow sales tax to be passed on by the builder. If this is the case every member at present building through the society will be affected.
The Minister for Trade and Customs (Mr. Harrison), who has had some experience of building societies, will agree that considerable delays take place before newly-formed building societies are able to function. “When the preliminary meetings of intending shareholders have taken place, application has to be made to the Treasurer for approval under the National Security Regulations to raise the required capital. Application has then to be made to the Registrar of Co-operative Societies for the registration of the proposed society and the Government guarantees provided and submitted to the State crownsolicitor. When these formalities are completed the approval of the Executive Council must be sought. Applications by prospective borrowers have to be held up until all these formalities have been completed. It has been pointed out by responsible officials of building societies that the proposed sales tax on building materials formerly exempt will increase the price of the average worker’s home by from £30 to £40. The whole structure of these societies is based on the previously existing arrangements, and if this bill be passed in its present form, it will operate harshly on the movement. I commend the suggestion of the honorable members for Eden-Monaro (Mr. Perkins) and Maribyrnong (Mr. Drakeford) that committees of the House should be established to deal with draft legislation before it is brought before the Parliament. I realize that it is now rather late in the day to expect the Government to accept major amendments, but I ask the Treasurer to undertake to give consideration to the views that I am submitting.
The imposition of sales tax on building materials will bear very heavily on young married people who are seeking to purchase their own homes, with the intention of rearing families. The best immigrant that this country can have is a healthy young Australian. We should be doing our utmost to encourage family life, and one means to that end is the facilitating of arrangements by which our young people may purchase homes on easy terms. We all are well aware that in totalitarian countries matrimony is subsidized and family endowment practised. This applies particularly to Germany, Japan, and Italy. I have read descriptions of mass marriages in those countries, and they have impressed upon me that the subsidizing of matrimony and the encouragement of parenthood are desirable in our own land. We have only a small population in a large country, but the Government seems determined to discourage marriage and the rearing of large families. We must alter our policy in this regard. Honorable members are well aware that in a country lying not very far to the north of Australia the population is increasing at the rate of 1,000,000 a year. That country is only one-twelfth the size of Australia, but it has a population twelve times greater than ours. We must reverse our attitude on these vital issues, and one step to that end would be the lifting of the sales tax from all building materials, in order to cheapen the cost of constructing dwellings.
– in reply - I have listened with great interest to the speeches delivered on this bill. Unfortunately, it is impossible for me to give favorable replies to all the representations that have been made. To do so I should need to work a miracle. In the circumstances, I must ask honorable members to have regard to the fact that the two main purposes for which this bill has been introduced are: First, the raising of revenue; and, secondly, the raising of it quickly. In the extraordinary circumstances in which the country finds itself, this course is essential to our safety. I shall not be so foolish as to declare that the bill does not contain anomalies. Every taxing measure contains anomalies. Perfection has not yet been achieved in this regard. But I give honorable members my assurance that if anomalies, injustices and hardships are brought under notice they will be given immediate consideration. Any defects of the measure will he remedied as far as it is humanly possible to remedy them. Inevitably legislation of this description will inflict hurt upon certain sections of the community, hut the Government earnestly desires to minimize, in every way possible, the hurtful effects of this measure. A complete survey was made of the whole financial situation before it was decided to introduce a bill of this description, but as an abnormally large amount of money had to be raised for war purposes, and also for ordinary government activities, the Government was reluctantly forced to conclude that an increase of the sales tax was unavoidable. Some honorable gentlemen have argued that the flat rate system should have been retained. I point out that to obtain the amount of revenue which this bill is estimated to yield, it would have been necessary to increase the flat rate of sales tax from 8^ per cent, to 13^ per cent. The loading of an additional 5 per cent, on goods already heavily taxed would have had serious repercussions in many directions. [Quorum formed.’] A tax of 13£ per cent, on many items of goods in common use would not have been justified in view of the fact that an equal amount of revenue was obtainable by the imposition of differential rates under which nonessential goods could be required to bear a heavier rate of tax.
For some years the list of goods exempt from the sales tax has been .progressively enlarged as the revenue position has improved; but the extraordinary conditions of to-day have made a continuation of that procedure impossible. The Government was unable to see any workable alternative to the policy it has adopted. It is regrettable that certain items have had to be withdrawn from the list of exemptions, but the rate of tax in respect of them will be only 5 per cent., whereas the general rate will be 10 per cent., and the special rate on items that may be said to fall into the category of non-essential goods will be 15 per cent.
The principle of applying a differential rate of sales tax is not new. It is in operation in Great Britain. We are simply following the example, of other countries in this direction.
The honorable member for Darwin (Mr Bell) asked whether the Government had considered the wisdom of applying the tax to the first sale. The experience of other countries in this regard was studied, and the Government concluded that, for reasons which were in its opinion unanswerable, that procedure would be unwise. The proposal to apply a turnover tax was also rejected on account of the pyramidal nature of such an impost. I am quite satisfied that the present proposals, notwithstanding their disadvantages and possible anomalies, are the best that can be submitted, having in mind the need to raise additional revenue expeditiously. Any anomalies will be examined as they are revealed.
Reference has been made during the debate to the effect of the new rate of tax on the working community. The Government determined that two principles should be maintained in connexion with this measure: First, that sales tax should not be imposed on items of the regimen upon which the basic wage is fixed ; and, secondly, that the tax should not be permitted seriously to affect our export industries. A careful examination of the bill will show that these principles have been preserved.
In reply to the representations that have been made in favour of the abandonment of the proposed tax on footwear valued at less than 15s. a pair wholesale, I point out that even here the principle of not taxing items having direct relation to the basic wage, has been preserved to the greatest possible degree. Our total annual sales of footwear in Australia approximate £9,000,000. Of this amount only £4,000,000 will be subject to sales tax. In the period from the inception of this tax until 1936, footwear was subject to this impost, but as revenue became sufficiently buoyant to permit the enlargement of the list of exempt goods, footwear was lifted out of the taxable field. The Government is of the opinion that, even under the new conditions, footwear of the class usually purchased byworking people will not be liable to sales tax.
– Does the Treasurer think it is necessary to tax medicines ?
– Medicines are taxed only in certain circumstances. In reply to the honorable member for Melbourne Ports (Mr. Holloway) who referred to this aspect of the subject, I point out that the raw materials required by the dispensaries of friendly societies and by retail chemists for the dispensing of medicines will ‘be subject to a tax of only 5 per cent. Provision has been made for the complete exemption of medicines supplied by retail chemists and the dispensaries of friendly societies for aged and destitute people. A good deal has been said during the course of the debate about medicines for dogs. Such medicine is exempt under somewhat peculiar circumstances. Provision exists for the exemption of all goods used in the prevention, cure, or eradication of diseases of beasts and livestock. Dogs fall within the legal interpretation of livestock. I intend, however, to give further consideration to this subject in order to ascertain whether a more satisfactory definition of livestock can be drafted which will exclude dogs from the general exemption.
The desirability of exempting this that or the other item from sale3 tax is largely a matter of personal opinion. Under the differential system of taxation I am quite certain that every honorable member would make a list different from that of every other honorable member. The fact must be remembered that the purpose of this measure is to provide additional revenue to meet expenditure inseparable from the unfortunate circumstances that face the country. The sales tax was introduced originally in order to meet the unforeseen circumstances of the depression. This Government has now found it necessary to introduce a differential rate of tax, and also to vary certain principles of the tax, in order to assist to meet the extraordinary cost of the war in which we are now involved. It is not a case of Fadden’s taxes; it is a case of Hitler’s axis and we must measure up to the situation. I have heard honorable members say that a great deal of clerical work will be involved in the administration of the differential rates. Unfortunately that is so, but we are living in times when convenience cannot always be con> sidered. I hope that all honorable members will recognize, as I do, that it is inevitable that there will be anomalies in the measure. There are also anomalies in our income tax provisions. They have been altered year after year without satisfying every one, and we shall find that this will be true also of the sales tax. We must deal with the matter honestly and conscientiously with the determination to iron out the anomalies as they arise.
I was greatly impressed with the representations made by honorable members in favour of exempting books, and I shall submit an amendment to do that. I shall also introduce a measure to exempt wine from sales tax and effect an adjustment to another source of Commonwealth revenue. I should like to meet the wishes of every honorable member who has asked foi either a special exemption or modification of a rate of tax; but it is my duty to obtain the revenue which the country needs and I cannot do that and, at the same time, satisfy the wishes of all honorable members. I ask the House to face the situation, inescapable as it is, and assist me to pass the bill in order that we may make the greatest possible effort to win the war.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Presentation to the GovernorGeneral.
– Accompanied by honorable members, I, this day, waited upon His Excellency the Governor-General, and presented to him the Address-in-Reply to His Excellency’s Speech on the occasion of the opening of the first session of the Sixteenth Parliament, agreed to by the House of Representatives on the 10th December, 1940. His Excellency was pleased to make the following reply: -
I desire to thank you for the AddressinReply, which you have just presented to me.
It will afford me much pleasure to convey to His Most Gracious Majesty the King, the message of loyalty from the House of Representatives oi :he Commonwealth of Australia to which the Address gives expression.
.- I move - [Customs Tariff Amendment (No. 2).]
Cite as: Australia, House of Representatives, Debates, 10 December 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19401210_reps_16_165/>.