16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 11.30 a.m., and read prayers.
– I have received from Adelaide a telegram which reads -
Poultry-farmers are facing disaster. Wheat 4s. 6d. a bushel, yet reported here Japanese boat just loaded cheap wheat at Port Adelaide. Please secure some statement about this matter.
Will the Minister assisting the Minister for Commerce see that poultry-farmers, who are relying on the supply of wheat for feed purposes, are given terms in respect of the price of this commodity at least as favorable as those obtained by persons who send it abroad for a similar purpose ?
– I have already received several representations in connexion with this matter. I am having the facts investigated, and when I am informed of the result I shall let the honorable member know.
-Can the Prime Minister give to the House any information concerning the situation in the Middle East? Have Australian troops yet been engaged in battle?
-We have no information of Australian troops having been engaged. If any information comes to hand, I shall take an early opportunity to convey it to the House.
– In view of the necessity for additional safety measures on the waterfront, will the Minister assisting the Minister for Commerce investigate the claims of Captain Lansell with respect to his new system of marking and weighing goods handled on the waterfront, details of which have already been placed before a previous Minister for Commerce, as well as the Director of Navigation, in order to see whether a new set of conditions may be evolved which will minimize the number of accidents occurring as the result of the use of faulty gear?
– I have already devoted some attention to this matter, but I shall look further into the merit of the system.
-Has the attention of the Prime Minister been drawn to the statement published in yesterday’s issue of the Sydney Daily Telegraph, headed “Check-up on Parliament “, which reads -
Hobart Mercury reporters took a count at regular intervals to-day of the attendance in the House of Representatives. 2.30 p.m. (House meets), 52 members out of 74 present.
The attendance list that I have shows that when the proceedings opened on that day, 70 members of a total of 74 were present. Of the absentees, two are engaged on military duty. Does the Prime Minister intend to take any action against the reporters of the Hobart Mercury for the publication of incorrect statements concerning the proceedings of this House?
– I have given some consideration, in what time I have had, to the questions which arise out of this kind of deliberate attack on Parliament.
Honorable Members. - Hear, hear !
– It is a singularly cheap form of attack, since it misleads those who do not know the circumstances. The problem is not free from difficulty. I find that a joint select committee of Parliament investigated a matter of this kind very many years ago, and made a quite valuable report. I had proposed to take the earliest opportunity to discuss with the members of the Australian Advisory War Council the conclusions of that joint committee, with a view to seeing whether some appropriate machinery might be set up for the legitimate protection of the parliamentary institution.
Honorable Members. - Hear, hear !
– It is, of course, true that some action might be taken under the National Security Act. I take it, however, that honorable members generally would prefer that any steps taken to deal with unscrupulous attacks on Parliament should be taken upon a permanent basis, in pursuance of the general powers of Parliament, which undoubtedly exist. I shall discuss that matter with the Australian Advisory War Council.
– Has the Prime Minister seen in the press the announcement that the coal-miners on the northern coal-fields intend to hold aggregate stopwork meetings on Monday next, because the Broken Hill Proprietary Company Limited, which owns a number of mines, has in mechanizing the John Darling mine refused to conform to a rule which has applied in the Miners Federation for the last 36 years, namely, that the men shall be engaged in order of seniority, and is picking the men it engages, thereby victimizing members of the federation? As the Government desires to maintain peace in this industry, will the right honorable gentleman put into operation the provisions of the Industrial Peace Act, in order to avoid this threatened calamity ?
– I have not seen the report. An announcement was made a week or two ago in respect of the general problem of industrial machinery. In addition, a few days ago the Australian Advisory War Council held a special meeting to discuss problems arising out of the coal-mining industry. That meeting involved the attendance of representatives of the coal-miners, the union, and government departments concerned with coal. I thought that the discussions served an extremely useful purpose, and that they might very well prove to be most fruitful. As the result of them, certain proposals were to be formulated by the parties for submission to each other, and thereafter discussion by the Australian Advisory War Council. The urgency of the matter is fully appreciated, and no time is being lost. I have already seen proposals submitted by one side to the other. I shall take the earliest opportunity to discuss the matter with the Australian Advisory War Council, the whole object being to secure the greatest speed and flexibility.
– Why not try to force this great company to observe awards and regulations?
– If the company is not observing the conditions of an award, it should undoubtedly be forced to do so. As to the particular facts of the case, I shall have to refer that matter to my colleague, the Minister for Labour and National Service, who no doubt will look into it.
Commandeering of Boats
– Is the Minister assisting the Minister forCommerce aware that the naval authorities have commandeered for war purposes several of the boats of the Illawarra Steamship Company, which serves the south coast district of New South Wales. As these boats were specially built for service in bar harbour ports, and as the south coast has not a railway service, will the honorable gentleman inquire whether the harm caused to the district and its industries by their withdrawal will not more than offset their usefulness for war services?
– The whole matter of shipping, both interstate and intrastate, is at present under the very close consideration of the Government, which is not losing sight of the points raised by the honorable member, but in view of the difficulties in relation to shipping, of which he is no doubt aware, it may not be possible to do anything at the present time.
– I ask the Minister for the Army, in view of his statement that he is making a drive for greater efficiency in army organization, is it a fact that three companies of engineers of the fourth division, comprising 600 trainees and 50 noncommissioned officers, on the night of their entry into Mount Martha camp, were not issued with blankets until 1.45 a.m., although the night was bitterly cold; that no rifles were issued for a fortnight; that the rations were poor and many of the trainees were unable to get meat for a month; that a number of the trainees refused to attend afternoon parades until better nations were issued–
– Order ! The honorable member is giving a lot of information.
– That is not so. I am asking if certain things occurred. Is it a fact that, on two occasions, trainees were given inoculations just before they were due for leave, and were unable to take their leave; that the company instructional sergeantmajor
– Order ! That sort of question is not permissible.
– On what grounds is it not permissible? I am seeking to learn if these are facts. Why am I debarred from asking that ?
– In my opinion, the honorable member is, in effect, making statements in the form of a question.
– On a point of order, I desire you to point out to me, sir, any standing order relating to the asking of questions which debars me from asking whether certain statements which have been made to me are true. I am not making the statement that these things which I have been told have happened in this camp are true, but am asking the Minister to either verify or deny them. I should like to know from you, sir, in what way the question is out of order.
– Questions are intended to elict, not to give, information.
– That is what I want to do.
– Questions may not be made a vehicle for conveying allegations or expressions of opinion.
– I am not making allegations or expressing opinions. This is a deliberate attempt to prevent me from asking the question.
– Order !
-Because of the deplorable condition of the copra industry, and the position of the planters, in the Territories of the Commonwealth, will the Minister dealing with those territories make a statement before the House rises as to what action the Government proposes to take?
– A conference is to be held, not before the House rises, but very shortly, for the purpose of preparing a scheme for the handling of copra in the territories of the Commonwealth.
– In view of the present rather brighter prospects of the wheatgrowing industry, because of the stabilization plan and of the other assistance rendered, will the Minister assisting the Minister for Commerce state whether the Government is prepared to take action to protect wheat farmers who are threatened with foreclosure as the result of the difficult circumstances experienced by them during the last year or two, in order that they may be kept on their farms in anticipation of participating in the benefits of the new scheme ?
– That involves a consideration of the scope of the existing moratorium provisions, and I understand the honorable member to be raising the question whether they should be extended. I shall discuss the matter with the Minister for Commerce at the earliest possible moment.
– ls the Minister representing the Minister for Supply and Development aware that there is an acute shortage of galvanized roofing-iron in Tasmania, with the result that the construction of many buildings has been held up for months? Will he see that something is done to relieve the position?
– Assuming the facts to be as stated, I shall discuss the matter with the Minister for Supply and Development, with a view to remedying the difficulty.
– Is it intended to proceed with the bill introduced last session for the amendment of the Patents Act?
– I do not think so.
– In view of the success which attended the deliberations of the parliamentary select committee appointed to consider war-time company profits taxation, will the Prime Minister move for the appointment of a select committee to inquire, during the coming recess, into such matters as child endowment and marriage loans?
– Consideration will be given to the matter.
– Is it the intention of the Treasurer to appoint a select committee before the House rises to inquire into sales tax anomalies, and will the committee, if appointed, take evidence during the parliamentary recess?
– The matter is receiving the consideration of the Government, and prompt action will be taken, consistent with the statement which I made yesterday.
– Having regard to existing sales tax anomalies, such as the taxation of explosives used by miners working on contract, when does the Government propose to appoint a parliamentary select committee, as promised, to remove such anomalies?.
– I refer the honorable member to the answer which I have just given to the honorable member for Martin (Mr. McCall). The committee, when set up, will inquire into the matter which has just been mentioned.
– Is there any truth in the press statement that the Prime Minister contemplates making a trip to Great Britain early in the new year?
– I have not yet seen the statement, but I shall read it with great interest.
– Has the Minister for Trade and Customs yet reached a decision regarding my request that members of Parliament be permitted to peruse papers and files relating to the recommendations and reports of deputy prices commissioners, and of the Prices Commissioner himself? If this permission is to be refused, what is the reason for such refusal ?
– I have already indicated in answer to similar questions that matters associated with price control are of a secret nature, and cannot be made available to members of Parliament.
– In what way is the public interest served by keeping secret information contained in the reports and recommendations of deputy prices commissioners ?
– The honorable member must be aware that investigations are made into the detailed operations of companies and firms, and it would be unfair to make the information so obtained available to business competitors. I suggest that, if the honorable member gives the matter consideration, he will see why the results of such investigations ought to be kept secret.
– The Minister seems to have misunderstood me. I have no interest in the details to which he has referred ; but I think that it would be in the public interest to reveal the names of firms or persons guilty of profiteering. I ask that information on those matters be made available for the perusal of honorable members, so that they may learn what firms have been charged with profiteering, and what action has been taken against them.
– I ask the honorable member to put his question on the notice-paper.
– Has the Prime Minister seen press reports to the effect that H.M.A.S. Australia was engaged in the attack on Dakar, and that a speed boat from that vessel played an important part in the action against the French fleet? Does he not think that the Australian people are entitled to receive information of such matters first-hand, instead of having to wait until it leaks out in the form of press messages from London? Should not a bulletin be issued informing the public of what took place?
– The incident to which the honorable member refers has been receiving the attention of my colleague, the Minister for the Navy, and I shall refer the question to him.
– Is it a fact that the Producers Co-operative Distributing Company was fined £5 at Lithgow for selling short-weight butter, and that a baker named Albert Ison was find £56 15s. for selling short-weight bread? Seeing that the offences appear to be identical, can the Minister state why there should be such a disparity in the penalties inflicted ?
– Commonwealth Ministers have no jurisdiction over the imposition of fines; but if the honorable member will place his question on the. notice-paper I shall have inquiries made into the matter.
– Are the fruit agents, who, were excluded last year from the operations of the apple and pear acquisition scheme in Tasmania, to be again excluded this year?
– No decision has yet been reached regarding the panel which will be appointed for Tasmania in the coming season. In view of the representations which the honorable member has made in respect of the agents who vere excluded last year, close consideration will be given to the matter before a decision is made.
– A couple of months ago, a Sydney master baker was fined over £1000 for supplying short-weight bread under a military contract. I have since learned from the Minister for the Army that this baker has been given another military contract. I ask the Prime Minister whether he is prepared to lay it down as a rule to be followed by all the members of his Cabinet that, when a conviction is secured against a person supplying goods to the Government for any misdemeanour such as supplying short weight, or food of poor quality, such person will not be allowed to tender for any further contracts ?
– The honorable member’s suggestion i3 worthy of consideration, but I should not off-hand be prepared to lay down so sweeping a rule. In respect of the particular case which he has mentioned, I am informed that, although there was a shortage of weight in individual ‘loaves, there was no shortage of weight in the total quantity of bread supplied.
– Then why was the man fined?
– I was not there, and I cannot say. However, in the course of my experience, I have seen many varying penalties for similar offences, and they do not astonish me any longer.
SUPPLY (Grievance Bay).
Question negatived -
That Mr. Speaker do now leave the chair and til at the House resolve itself into a Committee of Supply. .
Debate resumed from the 11th Decem ber (vide page 847), on motion by Mr. Fadden -
That the bill be now read a second time.
.- Since I got the adjournment of this debate last night, I have had time to peruse the bill. I find that its purpose is simply to adjust the machinery for collecting sales tax on the new basis. I have no hesitation in supporting it.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
(No. 1a) 1940.
Debate resumed from the 11th December (vide page 848), on motion by Mr. Fadden -
That the bill be now read a second time.
.- This machinery measure is complementary to other sales tax legislation which has already been passed. The amendments are designed to adjust the existing machinery to two new features that have been introduced into sales tax legislation. First, provision is made for differential rates to apply to different categories of goods, and, secondly, goods which hitherto were exempt are now included in the taxable field. Thebill is non-contentious, and I see no reason why it should not be passed without delay.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
SALES TAX BILLS (Nos. 1a to 9a) 1940.
In Committee of Ways and Means: Consideration resumed from the 21st November (vide page 110), on motion by Mr. Fadden -
Questions resolved in the affirmative.
Standing Orders suspended; resolutions adopted.
That Mr. Fadden and Mr. Anthony do prepare and bring in bills to carry out the foregoing resolutions.
Leave to move not granted.
– I ask leave to move a motion without notice.
– Is there any objection?
– The object of the request for leave is to enable nine bills of like character to be taken through all stages jointly instead of severally. As leave has been refused, the bills must now be taken singly.
Sales Tax Bills (Nos. 1a to 9a) brought up separately and passed through all stages without amendment or debate.
Debate resumed from the 27th November (vide page 197), on motion by Mr. Fadden -
That the bill be now read a second time.
.- I suggest that it would be a convenience and facilitate discussion if, in our secondreading speeches on this bill, we were permitted to make general references to the income tax rates which will be imposed by the complementary bill.
– It has been the practice to permit references to rates during the secondreading debate on machinery bills of this kind.
– When we look at the Income Tax Assessment Bill in conjunction with the rates bill we are reminded of elementary facts we learned at school regarding the distances between planets and their remoteness from the earth. Those astronomical proportions fairly took our breath away. I suggest that the astronomical figures in the Treasurer’s budget speech will leave many of us, not only breathless, but also penniless. I sympathize with the Treasurer in having to face a very severe task. No doubt the honorable gentleman will have to bear the brunt of criticism for having imposed such a very heavy load of taxation. That brings one to the consideration that when we resort to very heavy imposts and apply them widely the question of equity assumes very much greater importance. Anomalies that might be passed over in other times must be considered more closely when we have very high taxation. I was glad to hear that the Treasurer has announced that a committee is to be set up to advise the Government in regard to the sales tax. That idea might well be extended to all taxation. The experience we had in connexion with the measure to tax the war-time profits of companies encourages us to believe that the work of this Parliament would be facilitated and that we would achieve a larger measure of justice if the committee system were extended. The members of committees of this kind would bc able to devote much more time to the consideration of the effect of new and existing .legislation than Ministers can afford to at this juncture. Before the next revision of income tax is made a committee should be set up to consider a. number of questions. During this debate I shall indicate some of the questions which I think should be dealt with. It has been emphasized- that the first principle in all taxation is ability to pay. Any consideration of that principle must always include regard for what is left to the taxpayer after he has provided for the payment of his tax. Criticism on that basis could have been more strongly levelled against this measure when it was first introduced, than is called for to-day, because concessions have since been made. The bill as originally introduced provided for a statutory exemption of £150 per annum. The lowering of the statutory exemption would have increased the number of taxpayers from 430,000 to about 1,080,000. I have no figures before me, but I should say that although the raising of the exemption to £200 will probably cut out one-half of that increased number, a large number of people will be brought into the tax field and the cost of administration will increase. The discussions that took place at the meetings of the Advisory War Council and the points raised by representatives on that council from this side of the House have borne very good fruit. The statutory exemption of £200 i3 closer to the basic wage than it was before, and the exemption provided for dependent mothers has the effect of increasing the exemption for a single man with a dependent mother to £250. In the past the single man always got an exemption for dependent brothers and sisters. Under the South Australian act exemption is granted for dependent brothers, sisters and parents, but until now exemption for mothers has not been included in the Commonwealth act. This concession makes the bill much more reasonable than it was when originally introduced. The discussions of the Advisory War Council in tha,t respect give us an example of what good work may be done by committees set up to advise the Government. A good deal has been said about the single man having no responsibilities and escaping taxation. Too much emphasis should not be placed on their lack of responsibility; they have to make provision for marriage. Concessional deductions have always been allowed for wives and dependent children. I suggest that if a committe be set up to consider the effects of this legislation it should treat this matter in a larger way. I believe that all these concessional exemptions for children should be cut out of our taxation laws and that we should set up a system of child endowment. I read the maiden speech of the honorable member for Melbourne (Mr. Calwell) with great interest. The honorable member emphasized the need for the introduction of a system of child endowment and gave valuable information to the Parliament. I commend him for his research. This is a great social question. It is true that the cost of administration of a scheme of child endowment would be very much more than the concessions granted by way of taxation exemption, but such a scheme would meet the problem much more adequately and justly. Under a child endowment scheme, whatever is provided for child endowment would be paid to every body alike. Of course, it might be considered that people receiving more than a certain income should not be entitled to child endowment, but the general principle of child endowment is that it should be given to every body alike, irrespective of whether they are in receipt of big or small incomes. At any rate, such a scheme would have the advantage that every body would be entitled to the same allowance for each child. That, I think, is accepted as a sound principle of child endowment. We already provide a measure of child endowment by the concessions we give in income tax; but the anomalous effect of these concessions is that we allow a. man on £250 per annum a concession of £4 10s. for each child, whereas we give to a man on an income of £700 per annum a concession of £9 10s. Those whose incomes range from £2,000 to £40,000 receive a concession of £25 for each child. In other words, those on the higher incomes get a concession at more than a full rate of child endowment. A<s a. matter of justice the position should be reversed. Honorable members may ask how this comes about. It comes about in this way : We grant an exemption of £50 for each child to every body without exception. The low rate of tax imposed on the income of a person in receipt of £250 gives him a. concession of only £4 10s. Because of his high rate of tax a man with a large income may find the concession worth as much as 10s. in the £1, in which case it would be valued at £25; but a man whose taxable income was only £350 would find the concession equal to only £5. The following table gives the value of the concessional allowance for each dependent child of persons in receipt of various incomes : -
– But the right honorable member will agree that the leeway is picked up by means of the graduated tax ?
– My point is that the concession is far more ‘beneficial to persons with high incomes than to persons with low incomes. This subject should be thoroughly investigated before the next budget is introduced, in order to determine whether it would not be wise to abolish the concession altogether, and substitute for it a properly-founded child endowment scheme which, though it would be more costly, would undoubtedly be more equitable. This is a long overdue social reform. In considering whether concessional allowances should be discontinued, we should bear in mind the desirability of obtaining revenue from taxation with as little hardship as possible. I have no desire to be dogmatic on the point, but I have no doubt whatever that a report by a committee of honorable members on this subject would be interesting.
An investigation should also be made of the wisdom or otherwise of discontinuing in respect of incomes of say, £S00 a year and upwards, the deduction at present permitted in respect of medical expenses. This might not result in a very large additional revenue to the Government, but in these difficult times every £1 that can be obtained without undue hardship should be obtained.
I come now to probably the most important matter that this Parliament could consider in respect of the raising of revenue by income taxation. In this connexion I direct attention to the following extract from the speech which the former Treasurer (Mr. Spender) delivered in introducing the Income Tax Bill 1940 in this chamber on the 8th May last -
As the Commonwealth cannot discriminate between States in respect to taxation it follows that the Commwealth must take the taxation of the highest taxing State into account when imposing an income tax for the whole of the Commonwealth. Further, it must do this for every level of income, so that one State may (and does) set the limit for the Commonwealth over one range of incomes and another State over another range of incomes, with the consequence that a good deal of taxable capacity is untapped, and cannot be tapped by the Commonwealth.
I agree with every word of that passage. Honorable members are familiar with the contention frequently advanced that if the rate of tax applicable to the incomes within the higher brackets were based on what might be regarded, from the
Commonwealth point of view, as an equitable uniform figure, it would result in certain States, in the taking of more than 20s. in the £1 from the taxpayers with large incomes. Of course it would be a financial impossibility to take more than 20s. in the £1, but I mention the point to illustrate the position into which we have got ourselves in Australia. In order to obtain from income taxation the amount which the Government requires, the Treasurer has had to propose a very steep increase of the rate of tax on incomes in the lower and middle ranges. Because of the high rate of tax imposed on incomes in the higher brackets in certain States, as compared with the rate of tax imposed on such incomes in other States, it has proved to be impracticable for the Commonwealth Government to impose a properly graduated scale of increase. I believe that under the provisions of this bill the rate has been stepped up too steeply on incomes up to £800 a year. One result of this will be that taxpayers within this income range will be even more injuriously affected than taxpayers in higher income ranges.
There can be no doubt that the new taxation will cause increased unemployment among the class of people who, speaking generally, cannot be put to work in munitions factories and the like. Gardeners, for example, are often not suitable for employment in munitions work. Most of them have passed the age at which they can master a new technique, although as gardeners, they may be able to earn a fairly comfortable income. One effect of the imposition of the new rate of tax will be that persons in the £800 a year income range who have been in the habit of employing a gardener may be forced to dispense with his services. People in higher income ranges who employ gardeners will, doubtless, be able to continue to do so, for although the new rates of tax will be burdensome to them they will have a greater margin to meet current expenses. I consider that the incidence of the new taxes on incomes of up to, say, £800 or £1,000 a year, should be reviewed within the next two or three months. I readily concede that a reduction of the tax may be practicable only if a means can be discovered to impose a heavier rate of tax on incomes in the higher brackets, but I suggest that there is ample room for adjustment in this direction.
The Treasurer is bound by certain inescapable limits at the moment, for it is desired to collect within six months a substantially higher rate of tax in relation to twelve months’ income. The new rates of tax will apply to income earned over thewhole of the financial year and will have to be collected during the latter half of the year.
There is urgent need for action to bo taken to meet the circumstances that have arisen owing to the varying rates of income tax imposed by different State governments. I know that constitutional difficulties exist in this connexion, but it should be possible to overcome them. Before considering that aspect of the subject I shall give to honorable members some illustrations of the existing disparity in Commonwealth and State taxes on incomes in the higher ranges. A man with only his wife dependent on him, enjoying an income of £10,000 a year in the State with the highest tax, would pay in combined Commonwealth and State income taxes an amount of £6,547, whereas a taxpayer similarly circumstanced but earning his income in the lowest taxed State, would pay in combined Commonwealth and State taxes an amount of £5,254, the difference being £1,293. Corresponding figures in respect of an income of £20,000 a year are £13,647 and £10,909 ; difference, £2,738. In respect of an income of £40,000, of which there are quite a few, the corresponding figures are - highest-taxed State £27,847 ; lowesttaxed State, £22,218; difference, £5,629. Seeing that we are living in times when it is necessary for the Government to obtain extraordinary increases of revenue from taxation, I suggest that it is inequitable that one taxpayer, because he is living in a certain State may escape with an impost of £5,629 less than another taxpayer with a similar income who happens to live in another State. After all, all are living in Australia, and it is necessary for the Commonwealth Government to raise money to defend, not one particular State,but the Commonwealth as a whole.
– There is a difference in the cost of living in different States.
– That may he so, but I do not think that any honorable member would contend that the variation is so great that a difference of £5,629 per annum in taxation can be justified. I do not put these considerations forward out of any desire to criticize the Government of Queensland for having imposed high rates of taxation on high incomes. I have frequently commended that Government because it has imposed high taxes on high incomes and thereby obtained money to give the people better social services. Whilst the tax on high incomes is heaviest in Queensland, the tax on small incomes is lowest there. Moreover, we must bear in mind that Queensland has been developed more recently than New South Wales or Victoria, and during a period when development costs have been higher than formerly. Further, a very much larger area has been developed in Queensland. I have not seen recent figures, but I recollect that some time ago, when I investigated the subject, I learned that Queensland had a longer mileage of railways per 1,000 of population than any other country of the world. Vast tracts of country have been brought into profitable production in Queensland. The Government of Queensland has imposed a high rate of tax on companies within its jurisdiction in order to compel them to establish works in places best suited for developmental purposes. But after saying all this, it must be admitted that the situation must be regarded with some concern.
The discrepancies in respect of income taxation as between the various States will undoubtedly have to be faced. I have no hesitation in asserting that the most effective way to deal with the problem is to amend the Commonwealth Constitution with the object of achieving real unification. I hear some honorable members opposite saying “ Hear, hear ! “
– Yes, the word “unification “ does not frighten them as it used to do.
– No doubt, after they have had a little more experience, they will become accustomed to the idea. But I do not wish to develop that point at the moment. Another means by which the present discrepancies could be minimized would be by agreements between the Commonwealth and State Governments. Committees, representative of all political parties, could be appointed by State governments within their own States and by the Commonwealth Government to consider this subject independently. It may be that, in this way, a practicable basis could be arrived at for a discussion of the whole subject at a conference of Commonwealth and State representatives. Discussions by government representatives only might not be productive of a great deal of good. I suggest that the Treasurer (Mr. Fadden) should give careful consideration to this proposal. The committees could profitably discuss whether the States should completely evacuate the field of income taxation in respect of the higher income ranges, thus leaving them for attention by the Commonwealth; and also whether the Commonwealth should discontinue imposing estate duties, entertainment taxes and the like. Even the land tax might be left to the State governments, but I am rather doubtful about the wisdom of adopting that course, for I question whether the Legislative Councils of the States would ever agree to impose a land tax at rates which would be agreed to in the Commonwealth Parliament. Nevertheless, it would be a natural thing for the State governments to exercise authority in the sphere of land taxation, for land development falls within the jurisdiction of the States. But whether agreement could be reached with the State governments on this subject or not, seme effective action should be possible by the Commonwealth in relation to State grants.
I have already referred to possible constitutional difficulties, but something might be done even in this direction. I shall not dogmatize. It would be useless to do so. Our constitutional powers are whatever the High Court, by majority decision, may declare them to he from time to time. That is no reflection upon the High Court, the members of which are entitled to their views on the subject. But I have discussed these issues with eminent legal authorities, and I believe that even if agreement cannot be reached with the State governments, other means are at our hand to bring about a greater degree of uniformity in taxation throughout the Commonwealth.
Sitting suspended from 12.45 to 2.15 p.m.
-As honorable members know, the Constitution gives to the Commonwealth the power of taxation on the condition that it shall not discriminate between States or parts of States. I suggest that the Commonwealth could overcome the difficulties to which I referred earlier by entering into agreements with the States; for instance, the States might be persuaded, particularly in view of war conditions, to vacate the field of income tax in favour of the Commonwealth, in return for an assurance that the Commonwealth would reciprocate by vacating other fields of revenue collection. Alternatively, the Commonwealth could collect all taxes and distribute a proportion to each State, according to its requirements. Another possibility is that the States might agree to leave the higher field of taxation entirely in the hands of the Commonwealth, so that it could impose the maximum tax possible upon the highest incomes. If the States should fail to agree to any of these courses - and it is not easy to secure agreement with theStates on financial matters - we could still meet the position, without violating either the Constitution or principles of justice, by imposing taxes at a higher rate on taxpayers in the lowertaxed States than on those in the highertaxed States. Assuming that the Commonwealth wishes to secure the amount of revenue that is provided for in this bill, the Government could establish federal rates of tax equal to the combined Commonwealth and State taxes in the highest-taxed State, and apply those rates as a standard throughout Australia. Having fixed the standard, the Commonwealth could deduct from the tax assessed for each citizen the amount of tax already paid by him to the State. The result would be that everybody on the same grade of income would pay the same amount of tax.
– A recent decision of the Privy Council is rather against that.
– I should like to know the details of the case. I have discussed my suggestions with the honorable member for Barton (Mr. Evatt), who has assured me that they would not violate the Constitution any more than do the methods at present employed by the Commonwealth.
– The constitutionality of what the Commonwealth is doing to-day is doubtful.
Mr.SCULLIN.- That may be so, but what is being done at the present time has not been challenged, and I do not believe that the method I propose would be either. Under the method used now the Commonwealth income taxes paid by residents of the lowest taxing States are much greater than those paid by residents of the higher taxing States. Before the Commonwealth imposes its taxes, it allows to be deducted from taxable income the amounts of tax paid by the State governments. Those people who pay higher rates of taxes to their States are permitted a higher deduction by the Commonwealth. That is clearly discrimination.
– That is my point.
– The effect is to discriminate betwen the taxpayers in different States. My proposal is that the Commonwealth should impose the same rate of tax on every citizen of Australia.
– The method the right honorable gentleman proposes is sounder than the one in operation to-day.
– It is as sound constitutionally as the existing method and it is more just.
– In respect of a Victorian taxpayer, would the right honorable gentleman deduct from his total income, an amount equivalent to what would be paid in State tax by a Queensland citizen with the same income ?
– No. I should take into consideration the amount paid by each taxpayer to his State Government, and would then impose Commonwealth taxes which would make the total amount paid by each man equal.
-Would the right honorable gentleman allow the States to amend their rates of tax?
– That interjection suggests an objection that can be made to my proposals. A State might decide to increase its rate of income tax on the ground that such action would not injure the taxpayers, because the combined rate of Commonwealth and State taxes would remain the same, the only effect being the loss of a certain amount of revenue by the Commonwealth. I believe that there are two effective answers to that proposition. I do not consider that the Government of any State will dare to increase its rate of income tax on top of the heavy Commonwealth tax during a period of war. Should that remote possibility occur, however, the Commonwealth could prepare against it by providing in its taxation law that the deductions allowed in respect of any State tax should remain the same as in the first year of operation of the scheme. Consequently, should any State Government increase its rate of tax, its taxpayers would have “to pay the extra amount and the Commonwealth would not sustain any loss of revenue. If any State Government were foolish enough to effect increases which would bring the total rate of tax to more than 20s. in the £1, it would receive drastic treatment from its electors. We should not be doing our job properly if we allowed hundreds of thousands of pounds - nay, millions of pounds - of taxable income to remain untapped merely because of a limitation imposed by the Constitution.
– Would not the right honorable gentleman’s proposal tend to perpetuate the so-called right of one State to continue to tax more heavily than another State?
– At the moment I am more concerned about the special war conditions now existing, which necessitate very high returns from taxation. The future will have to look after itself. My proposals would tend to terminate the overlapping of the States and Commonwealth in the fields of taxation. We shall do a good job if we succeed in removing that anomaly. According to an estimate given to me, the Commonwealth could add £5,000,000 a year to its revenue by increasing the combined amount of Commonwealth and State taxes in all States on citizens earning more than £300 a year, to the amount now paid in the highest taxing State. I do not suggest that the scheme should be applied to the whole range of incomes above £300 a year, because I consider that the grade of taxation between £300 a year and £800 a year is too steep. However, if the Commonwealth applied the proposal to incomes of more than £800 a year, it would secure additional revenue of between £2,000,000 and £3,000,000 a year. Under that condition, no man in Australia would pay more in taxes than citizens of Queensland. If this were carried on, even beyond the period when the Commonwealth needs special revenues for war-time purposes, the steepness of the grade of taxes applied to the lower ranges could be reduced. A graph of the taxation schedules shows a very steep grade up to a certain level of income, after which the grade flattens out. Why should the grade end so soon? We should make the grade less steep but carry it further to a higher point. Some honorable gentlemen may say that the Commonwealth would not be able to obtain higher taxes above the present grade, because there is a limit to the highest point of taxable income, which is fixed by the highest taxing State. Nevertheless, that limit is far from being reached in the lowest taxing States. We are at war and we should reach that limit in every State in order to meet war expenditure. We should do that before we impose relatively heavy taxes upon the lower ranges of incomes, as is proposed to-day. I make these suggestions in the hope that they will be given consideration early in the year by the Government, and by committees that may be appointed by the Government for the purpose. I shall be very interested to study the case dealt with by the Privy Council to which the honorable member for Bourke (Mr. Blackburn) referred by interjection. It is quite possible, that if the method I have proposed were adopted and subsequently challenged, the Privy Council might declare it void. But it might not do so, and that seems more possible in war-time than in normal times. Experience has proved that.
– Hear, hear!
– What could the appeal be against? My proposal does not imply discrimination between State and State, in respect of the rate of Commonwealth tax, but only as to the rebate allowed by the Commonwealth in respect of State taxes.
– That discrimination exists at present.
-Exactly. Taxpayers will not protest against receiving too high a rebate; they would protest if they received too little. But after all a rebate is a matter of the law of this country. The framers of the Constitution had in mind that there should be no discrimination between the States in the imposition of a rate of tax. My proposal does not require any such discrimination; it requires merely discrimination in the computation of rebates to taxpayers.
– Has the right honorable gentleman given any thought to the position of a State which has developed an especially high standard of social services and therefore requires more revenue than other States?
– I discussed that aspect of the matter earlier in my speech. I said that I did not criticize Queensland for being a higher-taxing State than other States, because it is giving greater social benefits to its people as a consequence. New South Wales taxes are lower than those of Queensland but higher than those of Victoria. I do not suggest that my scheme should take into consideration all of the social reforms that have been introduced by one or two States. I urged this morning that we should remove from the Income Tax Act the concessional deduction with respect to children, and use that money, with some addition from another source, for the payment of child endowment.
– If one State increased its rate of tax it would encroach on the Commonwealth’s pool.
– I would fix the amount of State tax that would be exempted at the rate now being paid, and not allow any further deduction from the payments to the Commonwealth. For instance the amount of exemption might be the State income tax paid for the year 1940-41.
– That would not allow a State which was backward in social services to improve its social standards to the levels in other States.
– It would not prevent any State from increasing income tax, but its taxpayers could not get a deduction for the extra State tax except by agreement. Further, I am not trying to prevent any State from obtaining better social services. But that is not the only benefit of taxation. I have in mind Victoria, the lowest taxing State, in which the land tax of½d. in the £1 is ridiculously low. There is a field in which Victoria might operate if it wished to improve its social services. It imposes no tax whatever on dividends. One could have any amount invested in Victoria, and could draw tens of thousands of pounds in dividends, without paying one penny of tax. Its only tax is the company tax, and that is not at a high rate.
– Victoria has refused to tax itself.
– I am not here to criticize any State in particular. We are facing a very difficult period. We are united in the desire to raise as much of our expenditure as possible in the form of revenue, and not leave on posterity too great a burden of debt when the war is over. It is a tremendous task. In the raising of revenue, we wish to be as just as we can be. The rise has been very steep on certain grades of income, because on the higher grades we cannot go beyond a certain point for fear of toppling over the brink and exceeding 20s. in the £1.
I hope that the suggestions I have made will be taken as constructive rather than destructive. I am not critical of what the Government has done. I sympathize with the Treasurer because of the colossal task he has had to undertake. I emphasize this because, only six months ago, I made in this House a suggestion which was not received kindly by the then Treasurer. I was rather jumped on because I suggested the discontinuance of rebates of company tax; yet I find that that practice is adopted by the present Treasurer in his budget, proving that what may be criticized to-day may be adopted to-morrow.
– The right honorable gentleman raised the matter a few years ago.
– I did, but from a different angle. I have always argued thai the rebate should be given to all or to none. My complaint -was, that only those with fairly high incomes received the full amount of rebate; that those on low incomes did not get the full rebate of the tax paid by the company in which they were shareholders, and that over 250,000 shareholders of. companies who had not taxable incomes received no rebate. I then said, “If there is to be a rebate to one shareholder, it should be given to every shareholder, because all contribute their quota to the company tax “. 1 qualified that last year, by admitting that a good deal of machinery was required, and that considerable difficulty would be experienced in discovering small shareholders who were not taxable in order that they might be given rebates. I said that I would not suggest that the Government, in time of war, when endeavouring to raise a large amount of revenue, should do what I had proposed; and I added, “ As you cannot rebate equitably to everybody, do not rebate to anybody”. That is the course which the Treasurer is now following, and I am glad that he is.
Certain amendments arising out of the report of the committee which sat in respect of another bill, will have to be brought forward at the committee stage, and this measure will have to be amended to meet that position. I shall not anticipate that debate. There are also other aspects of this measure which can be discussed at the committee stage. I content myself with having drawn attention, in the course of my second-reading speech, to some general principles, and with having made suggestions which I hope may be useful.
.- This bill compels thought, because of the purposes for which the funds are required and because at present there is no alternative to the raising of these moneys. So far, there has been no attempt at the planning of revenues for the purposes of this war, which would enable the country to visualize what its obligations might be in respect of taxation in the future. For the time being, we are obliged to consider the position in the light of the amount which the Government requires, and the amount which can be raised by the taxation measures before us.
I am glad that the Government has agreed to raise the general exemption to £200, because I believe that those who receive up to that income, and even those on higher incomes whose deductions enable them to earn it without being involved in tax are sufficiently assessed through indirect taxation. Few voices will be raised in protest against the rates of tax to be applied to the higher incomes. People who have substantial incomes realize that they are under an obligation to contribute to the needs of the country in the circumstances in which it is now placed.
This bill will, however, give rise to new problems in Australia in 1941. I say that, not in criticism of the present Government, but rather in criticism of the system of taxation which has been built up over a number of years ; a system which, like Topsy, appears to have grown, without any guiding hand. In an emergency, and under the sheer necessity to raise large additional amounts of revenue, I fear that there has been placed upon the country, a load which will cause at least some dislocation next year.
The application of this measure is bound to divert millions of pounds of expenditure from civil to military channels. Of necessity, it will divert the employment of thousands of men from civil to military work. It will lessen the output of factories which depend upon public consumption, and it is bound to leave in its trail a considerable amount of economic wreckage which will necessitate reorganization and adjustment. It is not possible for Australia to make such a sudden change in the habits and life of its people without some serious dislocation. For this reason, one of the first tasks of the Government in the year 1941 should be to plan comprehensively the financing of the war, on the assumption that it will last for a further period of, say, three years. With the experience gained up to the present, this should not be impossible. I realise that any estimates of expenditure made at this stage will need to be reviewed in the light of subsequent developments. Even if estimates vary considerably from the actual, expenditure, as, indeed, they may, they will at least provide a basis which should be sufficiently reliable to enable some attempt to be made at the planning of taxation and government finance for the next few years. It is just as necessary to plan the taxation system of a country, and the financing of a war, as to plan the production of the implements and the cost of the services needed for the conduct of the war. If this be not done, the troubles and the threatened dislocation to-day will be repeated this time next year, or perhaps earlier. We should be able to produce a formula indicating the amount which must be raised annually, even if it were only an estimate needing revision from time to time, and that could be a guide to the future financing of operations in this country. Such a formula should indicate the possible requirements of the country in respect of borrowings, and the manner in which the Government must find the funds needed over an extended period of time. It is the sudden appearance of drastic changes, and the lack of a co-ordinated plan - at all events, a plan of which the public is aware - which give rise to exaggerated conjectures with respect to the safe limits of credit. I do not offer criticism of any Minister in particular. This is a new factor which arises as the result of the development of Australia and of a highly.Complicated taxation system. The time has arrived for embarking upon a planned procedure which will enable Australia to know as nearly as possible where it is going. This is an age of planning. We seek to plan our war effort. We are seeking, by a bill now before the Parliament, to plan, in some measure, the production of wheat. We seek to plan our imports and our marketing. We should also be planning the taxation system of the country, and that plan should not be left till the last.
The honorable member for Melbourne (Mr. Calwell) said that unification did not frighten honorable members to-day as it once did. To that I reply that the idea of unification never did frighten me. What does frighten me is the confusion that arises out of double-banked taxation. I agree entirely with the right honorable member for Yarra (Mr. Scullin) regarding the goal that we should seek, though perhaps I cannot see eye to eye with him regarding the detailed method by which he would achieve his purpose. The central control of taxation in Australia, whatever the constitutional problems involved, is inseparable from the general planning of taxation. 1 believe that heavy taxation has come to stay. Heavy taxation is, of course, a relative term. During the last war, wo thought it had then arrived, but the experience of 1940, and even of earlier years, proves that we did not know during the last war what high taxation was. We must prepare for a continuation of high taxation, and the first step is to abolish conflicting taxing authorities. Seven years’ regular attendance at the Australian Loan Council convinced me that the autonomy of the States is doomed. Three years’ attendance iu this and other capital cities at conferences of State and Commonwealth Ministers seeking to find a formula for a uniform tax bill convinced me that uniform taxation by agreement between seven governments is an idle dream. Iu 1936, we produced a draft bill which was as near to uniformity as could be reached. I recall the final conference at the table in this chamber when we, having settled the bill as far as it could be done, declared, “ Before we make any departures from the principles we have here accepted we shall confer with one another “. The representatives of all seven governments meant that for the moment, and intended to do it, but unforseeable circumstances now arise and, almost overnight, the plan for uniformity is gone.
In the bill now before the House it is proposed to abolish the rebates that formerly were granted to shareholders on dividends in respect of which tax has been paid. With that proposal I agree. Circumstances are such that the change is necessary, but it completely destroys the slender hope of unity reached in 1936. I mention the matter merely to illustrate how impossible it is to secure uniformity by agreement. Some States do not tax dividends in the hands of shareholders, whilst others do, so that when assessments are issued in 1941 some shareholders will receive the benefit of rebates, and others will not. That makes for confusion which, as time goes on, will become more confounded. The only hope of achieving uniformity and simplicity is to set up a sole taxing body. I hesitate to state how this can be done, because the matter is bound up with constitutional issues upon which I am not an authority. It should be possible for the Commonwealth to collect the whole of the taxation revenue by one assessment of each taxpayer, and pay to each State on a per capita basis the amount required for its administration. I do not desire at this stage to raise contentions. I oh ii imagine honorable members from Victoria asking, “ Who is to be the sufferer in the evening-up process?” Honorable members from Queensland have the painful experience of meeting high taxation demands in that State, while Victorian taxpayers are in a relatively favorable position. I may be speaking before the time is ripe for this change, but I am convinced that it is inevitable. A day will come when there will be uniform taxation, when we can forget that the River Murray divides New South Wales from Victoria, and when it will require more than the River Tweed between New South Wales and Queensland to justify heavier taxation in the one State than in the other. This state of affairs may be reached only by easy stages ; it cannot be achieved overnight, but the first step is the adoption of the principle of uniform and central tax assessment and the disappearance of the seven separate systems now operating.
– How would the honorable member overcome constitutional difficulties ?
– I hesitate to offer a suggestion. I have known so many eminent constitutional authorities unable to agree among themselves that I am diffident about putting forward an opinion of my own. However, what action the Commonwealth might take under its war-time emergency powers is a matter for consideration, and I am convinced that if uniformity is reached in this way, the public, after the war, will not permit a return to the present system.
Not only do we need uniformity in our taxing methods; we should strive for simplicity also. There is no hope of achieving simple income tax procedure while seven conflicting authorities are operating in the same field. Taxation should be a charge on profits and income; it should be in no sense a matter of chance, nor should it depend upon the skill of the taxpayer in so arranging his affairs as to avoid being taxed in that part of Australia where taxes are high. During the last few days, Canberra has been crammed with taxation experts. I have a great deal of sympathy with them. They are here seeking the correction of some anomaly which is important to them and their clients, or they are seeking some improvement in taxation legislation.
– My sympathy is with their clients.
– Very few taxpayers are able to understand the intricacies of taxation law, and so they are compelled to call in the aid of experts. That should not be necessary. It should be possible to frame the taxation laws of the country so that they will be understandable. Two opposing armies are being built up in Australia to-day: one engaged upon the administration of taxation legislation, and seeking to procure the maximum of revenue, and the other consists of taxation experts striving, on behalf of their clients, to keep the proceeds of taxation as low as is consistent with a strict interpretation of the law. Under the limited liability company system, taxation methods must necessarily be complicated, unless we are prepared to observe principles which tend towards simplicity. This has been done in Great Britain. Perhaps it was easier to do there than it would be in Australia where we have seven separate taxing authorities. The time has arrived, however, when we should seek to forget the past, and strive for a simpler and more workable system of taxation.’ During the last few decades, taxation in Australia has fallen into the hands of the lawyers, who, in their efforts to interpret government policy, have framed statutes that make taxation administration extraordinarily difficult. With the decay of the picturesque chancery suit, the lawyer has created a system of taxation which now beggars description. There are three essentials of taxation. First, it should observe the principle of “ ability to pay “. In its incidence, it should be fair and place its impositions upon the shoulders of those who can best carry the financial responsibility. Secondly, taxation should not dry up the springs of industry, because that would retard national development. By avoiding sudden changes, we should escape the repercussions that would otherwise follow them. Thirdly, taxation should be simple, and ascertainable by all persons. Australia will never reach that state of economy while seven taxing authorities exist.
The right honorable member for Yarra, when speaking of child endowment, expressed a. view that had not previously occurred to me. During the last election campaign, I assumed the responsibility, on my own account, of expressing myself in favour of an Australia-wide system of child endowment. I made that statement because I believe that the future development of the country depends upon it; that is apart from any social considerations. Realizing that such a progressive innovation would be very costly, I was careful to say that it might not be possible to begin to put it into operation immediately. But if we have a plan to put into operation twelve months or two years hence, we should begin now to investigate it.
It had never occurred to me that the deduction from one’s gross income of £50 a year in respect of each child under the age of sixteen years means that a child endowment system is already operating throughout the Commonwealth for a section of taxfpayers.
– A very smallone !
– I have been very grateful for it each year when I received my own assessment, and it is a matter of regret to me now to find that my children, one after the other, are passing the age of sixteen. The effect is exactly as the right honorable member stated. A person in receipt of a small income receives a small allowance which is intended to compensate him for the fact that he is maintaining children under the age of sixteen years. The higher his income and the rates of tax that apply to him, the greater is the deduction that he is allowed. I hope that next year will afford us an opportunity to consider this matter. I referred in this debate to the subject of child endowment because it is bound up with taxation. With the investigation that will he made into a wider system, it may prove possible to remove from taxation an influence which, upon reflection, will be found to have no direct connexion with the subject.
I should not like any Minister to consider that my remarks about present conditions are in any sense critical of the Government. Each member, as a. legislator, must accept a measure of responsibility for the system that has gradually been built up in Australia during recent years, but the stage has now been reached where a stocktaking is necessary. The very severity of taxation in Australia compels us to consider the problem at once. Next year we should turn our thoughts to a thoroughly constructive examination of the whole position with the object, first, of removing overlapping taxing authorities in Australia, and, secondly, bringing taxation to a state of simplicity, from which it should never have emerged.
The suddenness with which this heavy burden of taxation has been imposed upon Australia has caused the House to study the situation more critically and profoundly than ever it has done before. This afternoon, two important speeches have been delivered upon the subject - one by the right honorable member for Yarra. (Mr.Scullin), who has had long experience of taxation measures, and the other by the honorable member for Robertson (Mr. Spooner), who has been Treasurer of the State of New South Wales. Their ideas about many of the issues were identical. Thus, from each side of the House, an honorable member competent to express an opinion upon the subject of taxation has directed attention to a situation which requires radical alteration. Is the House now ready to take the matter beyond the stage of mere talk? We all agree that the war has increased the necessity for making widespread changes in our taxation and monetary systems; but honorable members should not only hope that 1941 will bring those changes, but also express their determinanow to see that the reforms shall be made.
An examination of all forms of taxation, a comparison of the powers of the Commonwealth with those of the States, ami the establishment of one taxing authority instead of seven are matters of vital concern to us, and the time is- opportune to appoint a committee to inquire into them during the recess, and report to the House when it reassembles next year. Its investigations and recommendations would provide a basis for definite action, and such a progressive move would have the approval of all sections of the community.
Not only the Labour party, but also many honorable members opposite, believe that the heavy impositions which will be imposed upon the lower and middle income groups will have a result the opposite from that which is intended by the Government. Reliable authorities have declared that the effect will be so deflationary and that the Australian economic field will he strewn with wreckage. If such an opinion be correct, Parliament must minimize the wreckage and, if need he, in the new year, assume the responsibility for making the necessary changes. The- views of the general public upon the matter will be brought home to honorable members early next year, when weekly instalments of federal income tax will be extracted from their pay envelopes. The repercussions will be felt by small businesses,, which depend for their livelihood upon the patronage of those sections.
– The shopkeeper will wonder what has struck him.
– That is true. Retail traders will be at their wits’ ends to know how to balance their accounts. Fearing a shortage of supplies as the result of the hazards of sea transport, they accumulated large stocks, for which they laid out considerable sums of money. The reduced purchasing power of the lower and middle income groups will reduce the demand for goods, and, in conSequence, the traders’ plight will become desperate. Compelled by the shrinkage of their receipts to effect economies, they will retrench their staffs. The right honorable member for Yarra pointed out that the view expressed by the Government’s economic advisers that the victims of such retrenchment will be absorbed into war-time industries is fallacious. In a reference to this subject, a Sydney newspaper published this comment -
Now. the fact is that nothing you can subtract from a business employing unskilled, la-hour, such as shop assistants or clerks, can bc added to munition making, where highly skilled and specially trained staffs arerequired.
That effectively answers the Government’s contention. To date, people in the middle income group have employed a considerable amount of labour in their homes, but the severity of the Government’s taxation proposals will compel them to dismiss domestic servants, gardeners and the like, who cannot be transferred to defence activities. At present, the tempo of defence production is very high, but only comparatively young men and skilled tradesmen can perform the work. Hence, the position will become almost desperate for the class of labour dispensed with, which cannot be absorbed in war activities. In addition, the lower and middle income groups have undertaken many commitments, including the purchase of their homes and the payment of premiums on assurance policies in order to provide for their old age and for their families. Whether their reduced incomes will enable them to continue such payments, time alone will show.
A few days ago I referred to the fact that people in the middle income group generally desire to provide for their children a. higher standard of education than can be afforded by less fortunate people. I believe that we should do everything possible to encourage parents to have their children educated for the professions. Foi- our economic and national welfare it is desirable that we should have a steady flow of graduates, particularly for the engineering and medical professions. The taxes imposed under this bill will result in many people in the middle income group being compelled to withdraw their children from colleges and universities. Honorable members on this side of the House are fearful of the disastrous effects of these proposed taxes on people in the lower and middle income groups. As the result of pressure from the Opposition, the Government has agreed to raise the statutory exemption from £150 to £200. Whilst that concession confers some benefit, though totally inadequate, on those in receipt of very low incomes, it leaves very steeply increased rates for taxpayers in receipt of incomes of from £400 to £800 per annum. Although the Opposition recognizes its obligation to make this Parliament workable, it is bound to have regard to the views of those who support it. Some measure of success has attended our efforts to influence the Government to relax its unbending attitude towards the budget, but we should not be content to rest there. Although the composition of the Parliament to-day presents difficulties for the Government, some good may emerge from the fact that the parties are so evenly divided. Having failed to obtain a Labour government, I go as far as to say that when fate in the persons of the electors decided to elect a parliament in which the strength of the parties was evenly balanced it did Australia a good turn. Honorable members on both sides of the House must recognize that, with the Parliament constituted as it is to-day, their responsibilities have vastly increased. Individual members now have greater opportunities to exercise their influence on the legislation brought down by the Government than ever before. Party interests on the government side of the House no longer predominate in our deliberations, and the power of the vested interests behind the Government is also curbed.
– On the contrary, we have lost any semblance of democracy. Parliament to-day merely gives effect to decisions already arrived at by the Advisory War Council.
– If the honorable member believes that, he has the means ready to his hand to remedy the defect, if any, he is at complete liberty to do so. If the honorable member considers that he is not bound by party ties he is free to exercise his vote and his influence as he pleases. I remind him, however, that when I have attempted to dispose of the problems with which I have had to deal* I have very seldom been able to get all of my own way.
– I have never been able to get my way.
– If, in the course of my efforts, I am able to progress some distance along the path to my ideal of higher standards and better living conditions for, the people, I am satisfied. If we are sincere in our attempts to achieve our ideals we have nothing to fear from those who sent us here.
I hope that the Treasurer will agree to the suggestions that a committee consisting of members of this House should be appointed to advise him on the operation of this legislation. If such a committee be set up it should inquire into the desirability of suggesting that the holders of Commonwealth tax-free bonds should be asked to convert the holdings into loans, the interest from which is subject to the increased rates of taxation. Since 1931 when the tax-free conversion loan was floated, the tax on incomes from other sources has been increased by over 50 per cent. In view of the war and the economic circumstances which now confront the country interest derived from all loans should be taxed equally with income from, personal exertion. In my speech on the budget I cited figures showing the difference between the amount of tax levied on interest on Commonwealth bonds, and the rate applied to income from personal exertion. People with an income of £400 per annum derived solely by way of interest on Commonwealth bonds pay a tax of £10 6s. 3d., whereas the tax on a similar income derived wholly by personal exertion is now to be £4,9. 1 suggest that if a committee be appointed to advise the Treasurer regarding the operation of this bill, it might very well consider means of overcoming that inequality. I know that in any attempt to deal with this inequality we shall have to answer a charge of repudiation. Although we have entered into a contract with the bond-holders, 1 feel sure that if we appealed to their patriotism and at least asked them to convert their existing holdings most of them would respond to the appeal. Another matter which the committee might inquire into is the desirability of imposing a tax on income obtained from dividends of companies operating outside Australia which is not now brought into the taxable field.
Why should people who enjoy the security and the good conditions that prevail in this country be permitted to escape liability to contribute towards its revenues? No doubt a good deal of the capital invested by these people in companies outside Australia has been acquired in this country. Other exemptions provided for in the Income Tax Assessment Act should also be overhauled. For instance, consideration should be given to bringing within the taxable field the income derived by large companies from interest on Commonwealth bonds. Large banking and commercial concerns declare very high dividends derived in part from their investment in such stocks. A large portion of the income of banks, insurance companies, trustee companies, and shipping companies is derived from interest on Commonwealth loans. These dividends, paid from interest on Commonwealth loans, are not subject to the full rate of income tax. A committee might very well give consideration to that aspect of our taxation law.
In his budget speech the Treasurer said that he regarded 14s. in the £1 as the reasonable limit to the effective rate of Commonwealth and State taxes combined. We find on examination, however, that whilst no taxpayer is called upon to pay such a high rate of tax on their whole income, some may pay 14s. in the £1 on a part of their, incomes, none has to pay that much on his total income. Permissible deductions and exemptions result in the imposition of much less than 14s. in the £1 over the total incomes of persons who receive dividends from the sources to which I have referred.
– I spoke of 14s. iu the £1 being the highest rate that could be collected in both Commonwealth and State taxes in the highest taxed State.
– The point I am making is that, in fact, very few. if any, are called upon to pay 14s. in the £1 in respect of their total incomes. Thus those in the highest income groups escape the payment of their fair share of the burden, as was suggested by the Treasurer, whilst those in the lower and middle income groups are heavily penalized and cannot escape. The honorable mem!ber for Robertson has proposed that action be taken to deal with the problem of taxation as between the States and the Commonwealth. The honorable gentleman said that it is ludicrous that seven budgets should be brought down in a country with a population of only 7,000,000. Constitutional difficulties may stand in the way of any adjustment of the tax field as between the Commonwealth and the States, but I feel sure that, with the Parliament constituted as it is at the moment, a splendid opportunity exists for an appeal to the people to give expressions to their will on this subject. The people would respond to our appeal if we went to them and said, “ The burden of providing for seven governments is more than you can carry. It cripples business and retards the progress of the country. Give us power to cut out this unnecessary overlapping and duplication “. Never before has such a splendid opportunity been provided for us to convince the people of the need for one central authority to control the destinies of the nation. This is the psychological moment to take action.
– And who will do the sweeping up afterwards?
– I do not understand what the honorable member means. If we desire to maintain our democratic principles - and I believe that they are dear to all of us - we should be doing everything possible to pave the way to an improved social order. Unless we are careful, we may, by the imposition of heavy taxation, place burdens upon our people which, with the best will in the world, they will be unable to bear, and which must result in the deterioration of our standards of living. I consider that we should remove, to the greatest possible degree, all irksome forms of taxation. To this end the overlapping of government and administrative authority should be terminated. It may be that use of the National Security Regulations in certain directions will result in the education of the people as to what may be accomplished by the exercise of sovereign power by one government. The promulgation of wise national security regulations may help us to travel quite a long distance on the road we wish to go. Once the people have seen the beneficial results that can flow from a true form of central government I believe that they will insist upon the abolition of all overlapping. They will not be willing to go back to the bad old days. Many who are now critical of unification may, by actual experience, be converted to it. All of us, I believe, hold the view that some great changes are ahead of us in this country.
It may be that the true significance of this war has not yet been fully appreciated by the people at large; but if we face our problems with determination, and bring the war to a successful conclusion, we shall have set our course towards better days. A greater measure of uniformity in taxation would do something to help us to usher in a new and much better state of affairs.
Unfortunately, nothing positive has yet been done to prove to the people that we really desire to improve our social status ; yet it is obvious to all thinking people that if democracy is to survive social reforms of a substantial nature, including child endowment, must be initiated. If the Australian people can be made to believe that they live in a country which is really worth fighting for and, if need be, dying for, they will face the difficulties of these days with courage and determination.
I sincerely trust that as a step towards the more effective planning of our national economy, the Government will appoint a committee to examine the many problems associated with the introduction of a more equitable system of taxation. If such a committee were appointed at once it could do a great deal of useful work in the period that will intervene before Parliament reassembles early in the new year. Its investigations might result in the complete recasting of the budget or the presentation of an entirely new budget. As things are, none of us can face our constituents with any degree of satisfaction, while certain of these heavy imposts remain. We are also in duty bound to take practical steps to improve social conditions, not after the war, but now. I therefore hope that a committee such as has been proposed will be appointed, and that when Parliament re-assembles it will be able to submit constructive proposals for our consideration that will at least indicate beyond any doubt that we all are in earnest in our desire for a much more equitable system of taxa- tion along with an improved social order.
– I have listened with interest to the speeches that have been made to-day concerning the financial structure of this country and the manner in which it might be altered to meet the stress of war conditions. Once again honorable members have declared that we should get together to see what we can do to create a new heaven on this old earth after the war is over. I am sorry that I must once more introduce a discordant note. I say to honorable gentlemen opposite, and also to some honorable members on this side of the chamber, that human foresight is incapable of forming any worth-while judgment upon what the condition of the world will be after the war is over. We do not know yet whether anything will be left of the property we now own, or of the liberties that we now enjoy. Those who think that it is practicable for us to double the weight of taxation upon our people, and the strain of work on our Government in order that we may make an all-in 100 per cent. effort for the prosecution of this war, and at the same time to uproot our existing economic procedure, completely alter the social structure of the country, and substitute a. method of government which will totally change our constitution, including the financial relations between the Commonwealth and the State Governments, are completely mistaken. What such honorable gentlemen will bring about will be not victory but defeat. I offer a friendly warning to my honorable friends on the treasury bench who at the moment are absent. The old rule still holds that a government which compromises on its financial policy may continue to exist but it cannot live. We may talk as much as we like about the activities of the Advisory War Council, and of this and that board or committee - and I shall have something more to say on this subject when the Estimates are again under consideration and we are dealing with the proposed vote for the Department of Defence Co-ordination - but we shall be forced back to the conviction that the Government must actually govern. It is all very well for honorable members opposite to suggest that committees shall be set up to deal with this, that or the other subject; but they will find, as will also the rest of us, that such a policy will get us nowhere. If we proceed along those lines, we shall very shortly be totally disillusioned, to our great discomfiture. In Australia at present we are straining some of our forces almost to breaking point in an effort to carry on the war; but, under existing conditions, all must be willing to share the burden. Of what use is it for us, in our present circumstances, to talk about what may happen after the war? Who can tell how or when the war will end? Who knows what nation will be in control of this or that territory? Those who are attempting to forecast the future are doing a great disservice to their fellows. The people who, in the present state of the world, are blithely outlining policies for reconstruction, are living in a fool’s paradise of their own making. Only one thing .matters to-day. It is not whether this person shall escape with a penny or a shilling in the £1 less taxation, but whether all of .us are exerting every power of which we are capable in order to win the war for our own side. Nothing else matters. If we do not win the war, we shall, of course, lose all that we possess. We shall not be able to save anything from the wreckage. The propagandists who are spending their energies in talking about the great and glorious social order that will emerge after the war are not helping the country. The old saying is still true : “ Man never is but always to be blessed”. The policy which the Opposition is pursuing will result in the complete disillusionment of the people. .
For Heaven’s sake, let us all concentrate upon organizing the resources of this country to provide armed men, armed ships, armed aircraft, munitions, and trained technicians for the purpose of winning the war. We ought to be employing the whole of our energy in providing for the defence of this country and the successful prosecution of the war. We should leave until better days beautiful dreams about a new Heaven and a new Jerusalem. The first thing necessary is to achieve victory. Therefore, let us devote our undivided attention to the numerous problems which face us. The Government already has its hands full in attending to these, and it should be willing to put aside less urgent considerations until they can be properly considered. Our policy should be, “First things first “. That is a good order. The thing that should come first with all of us is the organization of this country and its resources for the prosecution of the war to a successful issue.
.- I have gathered from the remarks of honorable members during this debate that the granting of exemptions from income tax is unpopular, and that such a policy has few supporters in this House. Yet I wish to say a word in favour of it. Quite recently, I read a speech delivered in the Legislative Council of Victoria by the Leader of the Government, Mr. Eager, in which reference was made to recent Japanese taxing measures which provided for an elaborate system of exemptions. I believe in the granting of carefully considered exemptions. The taxes to be imposed upon persons in the community with incomes of from, say, £400 to £1,000 a year will, in my opinion, be unbearable. In respect of wageearners, we have, to some degree, tempered the wind to the shorn lamb;, but in respect of people with incomes in the middle range, we are proposing to enforce an inordinate taxation which I regard as regressive out of all proportion to the needs of the situation. It has been proposed that several exemptions at present allowable shall be discontinued. In the past, the taxpayers in general have not been very greatly concerned about Commonwealth exemptions, for Commonwealth taxation has been relatively light, and complaints have referred mainly to heavy State taxation. Even in Victoria, which is the lowest taxed State of Australia, the burden has been, heavy in comparison with Commonwealth taxation. Now, however, it is proposed to authorize heavy Commonwealth imposts which will rob the people in some income ranges at any rate of practically everything that makes their life enjoyable. We shall take from them the means of completing their children’s education and of continuing to employ domestic servants, for whom no exemption is provided. We make provision, in our system of exemptions, for persons earning an income, but not for the welfare of persons whose livelihood results from the enjoyment of income. The new imposts will mean that many taxpayers will no longer be able to employ gardeners, car drivers and house servants. The persons so displaced will have little chance of obtaining work in munitions factories, and so will become a burden on the community. These wage-earners will be taxed 100 per cent, of their earnings. There is also the case of taxpayers who support relatives in respect of whom no exemption is allowed at the present time. Many people will find it difficult in future to maintain parents or other relatives who are unable to work. That being so, many aged people will have to apply for the old-age pension, with the result that the State will lose in one way what it gains in another. The proposals will make it impossible for many people to continue paying for the education of children attending universities and other places of learning. The children will never be able to make up for that loss in later life. We should have a more elaborate system of exemptions, and unless we formulate one, these taxes will prove to bc extraordinarily oppressive upon the smaller incomes of what is termed the middle class group - those ranging from £400 per annum to £1,000 per annum. All parties in this chamber have agreed to accept the budget proposals, and, therefore, they are bound not to oppose the consequential legislation. It is a great misfortune that the destiny of this country should be decided in this way. The Government should assume responsibility for its policy.
The honorable member for Robertson (Mr. Spooner), who made an interesting contribution to this debate, suggested that the Commonwealth Government should be the only taxing authority in Australia. That would mean that the Commonwealth would become the only effective government. I cannot conceive of any representative legislature being divorced from the power to tax, and being dependent for its revenues upon the supreme authority of the central Government. When the Labour party framed a policy for the re-organization of the system of government in Australia, it proposed to vest supreme legislative power, with certain restrictions, in a general legislature, and to create a number of local legislatures, not necessarily corresponding to the existing States, all of which would be clothed with full powers of legislation, subject to the paramount authority of the Commonwealth Parliament. That differs vastly from what is contemplated by the honorable member for Robertson and those who support his views. Should the Commonwealth become the sole taxing authority, we should soon have a completely centralized Australia, just as there was a completely centralized France, but with the local governments even more dependent upon the central authority than they were in France, because they would lack the power to impose taxes. There can bc no truly representative government unless it has power to impose taxes.
Constitutional problems have been raised by a. number of honorable members. Any one who expresses definite opinions upon the interpretation of the Constitution is in danger of sinking into the great “ Serbonian bog, where armies whole have sunk “ ; not only armies of judges and advocates but also great treasures have sunk in this country in endeavours to determine the meaning of the Constitution. We have the Privy Council, -which interprets the Constitution on a federalist basis, and the High Court, which interprets it on a national basis. The High Court, almost imperceptibly, tends to nationalize power, and the Privy Council tends to minimize national power. The recently contested case of Moran v. the Commissioner of Taxation, the Privy Council, has, I think, made difficult the scheme for the imposition by the Commonwealth of a general income tax, with rebates in respect of State income taxes. I have been attracted by the idea that the Commonwealth Government should impose a uniform rate of income tax throughout Australia, and then grant to each taxpayer a rebate in respect of tax imposed on him by his State. The Privy Council’s decision in the Moran case, as I understand it, is that all of our financial legislation must be taken as one whole. The Income Tax Act must not be considered separately; all financial proposals must be considered as a group. If the effect of the group be the evasion of the prohibition against discrimination, then the whole of the financial scheme is bad. It is suggested that “ discrimination “ refers to discrimination by the Commonwealth. If the Commonwealth should say to the people, “I shall tax you 16s. in the fi everywhere, but in Victoria I shall return to you 2s., in New South Wales I shall return 6s., and in Queensland 8s. it might reasonably be said that it was discriminating between various groups of taxpayers. Nobody can dogmatize on that point. It has been argued that the necessities of the war might induce the High Court, or even the Privy Council, to be more favorably disposed to the scheme than otherwise. I recall the great changes that took place during the war of 1914-18, when we discovered that all of the principles upon which the High Court had been acting for a number of years were gradually being worn away until, just after the war, they were destroyed. The late Mr. Frank Anstey contended, in 1915, that the Commonwealth Parliament had, in time of war, complete power to legislate as to wages, prices, and conditions of employment, and that therefore any further expansion, by referendum, of the Commonwealth’s legislative powers was not necessary. That view was condemned by his colleagues, by many lawyers, and the Commonwealth legal authorities. In 19.16 the High Court held that his view was correct. When a prominent authority was asked what had become of the advice he had given on the subject, he replied that his advice had been given in 1915, when the High Court would have given, a. different ruling. The spirit of the times does affect the views of persons who interpret the law, including even those in the higher courts of the realm.
.- I rise in order to discuss the antediluvian views of the honorable member for Barker (Mr. Archie Cameron), who sug gested that we should suffer the continuance of our present unsatisfactory social system and concentrate on winning the war. The attitude of the Labour party is that, war or no war, the conditions of the .people must be improved. The views expressed by the honorable member for Barker are extraordinary, when one remembers that a much more reactionary legislative body than this House, the British House of Commons, is not only doing its utmost to win the war, but is also attempting to improve social conditions in Great Britain. They certainly need improvement; they have never been so good as conditions in Australia. But, although Australians have a better standard of living than the British people, a great deal more must be done before we can say truthfully that a satisfactory social order exists here. There must be a more equitable distribution of the wealth of the community, and there can be no better time than the present for undertaking the rearrangement of the social system and granting social benefits such as those which were proposed to-day by the right honorable member for Yarra (Mr. Scullin).
I commend to the serious consideration of the Treasurer (Mr. Fadden) the remarks that have been made by many honorable members in condemnation of the Government’s refusal to extend the field of income tax deductions in order to include dental fees. Parents are to-day paying more attention to the dental requirements of their children than was done ten years ago. The care of children’s teeth is of great importance and I have never been able to understand why deductions have not been granted in respect of dental fees. I ask the Treasurer to investigate this problem in order to ascertain what would be the effect of granting our request for this deduction.
– Income tax deductions for dental fees are allowed by the Government of New South Wales.
– And by the Government of Queensland.
– No such deduction is allowed in the very conservative State of Victoria. Even though a royal commission a few years ago rejected the proposal to deduct dental fees, the Government need not fear that it will incur the risk of disaster if it flies in the face of tlie commission’s recommendation. After all, it has flouted the recommendations of other royal commissions. There were the Royal Commission on Banking and Monetary Systems, and the royal commissions which investigated child endowment, and constitutional reforms; all of their recommendations were ignored by this Government and its predecessors.
The views expressed by the honorable member for Barker were like the curate’s egg - good in parts. Some of them had merit, but there was none in his general conservatism. No great differences distinguish, his opinions from those of the members of the Government. The only real difference is that he is more blatantly conservative and more forthright in the expression of his views than are Ministers who speak in euphemisms in the belief that this helps them politically. Perhaps it does. I hope that the honorable member for Barker will soon begin to mend his ways as the result of contact with the virile Opposition party in this chamber. If we want a real war effort, many of the Government’s friends who are now living merely on the unearned increment provided by the labour of other people, should do a little manual labour, in factories or elsewhere, on behalf of the nation in this crisis.
I wish to refer to the interest-free loans invited by the Government last April, to which very few persons have subscribed. I wrote to the secretary to the Treasury, for information concerning the amount subscribed to these loans up to the 24th October last, and was advised that it was £4,993,000. I was further informed that the Commonwealth had received £595,000 by way of gifts; that the acceptance of these loans by the Commonwealth did not arise as the result of any prospectus issued by the Treasurer under statutory authority; that the number of subscriptions of £5,000 and over - in which I was particularly interested - was 106; and that the total amount subscribed in amounts of £5,000 and over was £1,272,000. These figures show that those who possess wealth are not prepared to lend money to the Government free of interest; because only 106 persons loaned amounts of £5,000 and over, and of the total of nearly £5,000,000 loaned, only £1,272,000 was provided by such persons. The money thus subscribed came generally from persons who loaned sums of less than £5,000. Those possessing wealth were too actively engaged in rushing round the stock exchanges looking for good investments which pay a better rate of interest, and were not prepared to lend free of interest. They wanted their interest, war or no war, and were not concerned about helping the nation to win the war and thus save their own property. They were looking for opportunities to take advantage of. the needs of the nation ; their interest lay in the flotation of new companies for the exploitation of new industries arising out of the war effort. Quite a number of capital issues were approved by a board, the advisory committee of which consists of many of the gentlemen to whom I have referred. A number of new issues have been placed on the market, in competition with Government loans. Among those prominent in the flotation of these companies are such well-known democrats and strong radicals as Sir Colin Fraser-
– Order! The honorable gentleman must connect his remarks with the bill.
– I was merely following the lead given by other honorable members. I thought that, by referring to taxation, and to the manner in which some persons are evading contributions to loans, I was at least indirectly associating myself with the discussion of the bill. I do not know in what other way I can direct my remarks appositely to the bill, except by suggesting that it would be better if these leaders of public thought outside of this House set a finer example of self sacrifice to- the mass of the people, upon whom they desire to throw the main burden of the “equality of sacrifice” about which they talk. We have discussed the raising of money to carry on the war on the basis of equality of sacrifice. I thought that I might be entitled to criticize the lack of sincerity of persons like Sir Colin Fraser, Sir Alexander Stewart, Sir Herbert Gepp, and Sir Keith Murdoch, but if I am not-
– The allusion is altogether too remote from the bill. The honorable member must not proceed on those lines.
– Then I shall not refer further to these titled parvenus who constitute a portion of our native aristocracy. There I leave the matter.
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. Fadden) 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 Income Tax Assessment Act 1936-1939, as amended by the Income Tax Assessment Act 1940.
Resolution reported and - by leave - adopted.
In committee (Consideration resumed) :
Clause 2 - (4.) The amendments effected by sections 4. 5,6, 9 and 10 of this act shall apply to all assessments for the financial year beginning on the first day of July, 1940 and all subsequent years.
– I move -
That the word “five”, sub-clause (4.), be omitted, with a view to insert in lieu thereof the words “ four a, five, five a “.
This is merely a machinery amendment, designed to ensure that certain of the proposed amendments to the income tax law shall be applicable to assessments for the current financial year.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 3 agreed to.
Clause 4 (Rebate of dividends).
Amendment (by Mr. Fadden) agreed to-
That the word “and” (last occurring) be omitted.
– I move -
That the following be inserted at the end of the clause after paragraph (c) : - “ and
These amendments are proposed in consequence of the Government’s adoption of the recommendations of the committee appointed to discuss the war-time (company) tax.
Honorable members are aware that, as a part of the new arrangement, companies, with the exception of private companies, will be required to pay the war-time (company) tax, or a super-tax of1s. in the £1 on taxable income in excess of £5,000, whichever amount is the greater.
Practical effect is being given to this arrangement by the imposition of the super-tax in the income tax resolution and bill. This means that the companies which come within the scope of the wartime (company) tax will be required to pay the super-tax at the same time as their ordinary income tax is paid. Where war-time (company) tax exceeds the super-tax, the excess will be payable on a separate assessment under the Wartime (Company) Tax Assessment Act.
The imposition of the super-tax on operating companies necessitates an adjustment, when dividends are distributed to holding companies out of profits which have been subject to super-tax. If the holding companies were subjected to super-tax on the dividends they receive, there would be a double loading of the super-tax, first on profits in the hands of the operating company, and secondly, on the dividends distributed to the holding company out of those taxed profits. The amendments I am now proposing are designed to avoid this duplication in the imposition of the super-tax, by means of the allowance of a rebate of tax to the holding company. This rebate will apply to both resident and non-resident holding companies.
.- The majority of these companies generally set aside in any one year a considerable sum for payment of taxes in the following year. I believe that the Electrolytic Zinc Company, with which Sir Colin Fraser, one of the advisers of the Government, is connected, set aside in its latest balance-sheet an amount of approximately. £160,000, or at least £50,000 in excess of what had been set aside for purposes of taxation in the preceding balance-sheet. This shows that the company anticipated additional taxation by the Government and so regulated its operations as to extract further profits from its undertaking in order to provide for the payment of whatever additional taxes were imposed. It is contended that taxation is duplicated by the collection of tax, first from one of the pup companies, and later when dividends are paid by the parent company. This is not so unjust as would appear on the surface. Taking into account the statement of the Treasurer, that the Government desires that the maximum amount shall be received as the result of the imposition of this tax, I suggest that the income should be taxed when earned by the subsidiary company and later when paid out in dividends by the parent company. Almost all shareholders are drawing additional dividends to-day, and no real hardship would be imposed upon them; nor could it be suggested, despite appearances to the contrary, that the treatment was unjust. In view of the circumstances surrounding this measure, the Government should reconsider its attitude, and take into account the fact that these companies have anticipated additional taxation and have made provision for it by the extraction of greater profits on their operations. Eventually, the public will pay, because these companies will pass on the extra costs. Some companies, in anticipation of the action of the Government, have doubtless already raised prices in order to provide for the additional costs that will result from this legislation.
– The point raised by the honorable member has been thoroughly investigated, not only by the Government and its advisers, but also by the special committee that was set up. The point relating to the establishment of a reserve, in anticipation of the tax likely to be payable, does not affect the taxable capacity or the taxable income one iota. The Income Tax Act does notgive any recognition to reserves in respect of the quantum of tax to be paid. It makes provision for certain deductions and allowances with regard to the payment of State tax, but not federal tax. Whatever reserve a company might build up in anticipation of tax payable in the future is ignored in assessing the amount payable under this measure. As for the. point covered by the amendment, it is clear that there would certainly be duplication if no account were taken of dividends paid by a holding company to a parent company. The adjustment asked for in this amendment is fair and reasonable.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 5 -
Section eighty-one of the principal act is amended -
by omitting from sub-section (1.) the word “ Two “ ( wherever occurring) and inserting in its stead the word “ One “; and
by omitting from sub-section (2.) the words “ other than dividends, from the income from dividends “.
– I move -
That paragraph (a) be omitted with a view to insert in lieu thereof the following paragraph : - “ (a) by omitting from sub-section (1.) the words,Two hundred and fifty (wherever occurring) and inserting in their stead the words, Two hundred ‘ ; and “
This amendment will give effect to the agreement reached by the parties in this House regarding the amount of the statutory exemption. The statutory exemption now proposed will commence at £200, and will diminish £1 for £1, vanishing when the net income of the taxpayer reaches £400. The increase of the statutory exemption from £150 to £200 will confer freedom from income tax upon a large section of the community which would otherwise have been liable to pay tax under the Government’s original proposals, and will substantially lessen the burden of the tax on those taxpayers whose net incomes are between £200 and £400. Under the Government’s original proposals, it was estimated that income tax amounting to £5,000,000 would be obtained from taxpayers whose net incomes ranged between £150 and £400. This new proposal for liberalizing the statutory exemption will, it is expected, reduce the revenue from this group by one-half, that is, to £2,500,000.
Amendment agreed to.
Clause, as amended, agreed to.
Clause 6 agreed to.
Clause 7 consequently amended and, as amended, agreed to.
Clauses 8 to 12 agreed to.
After suction 221 of the principal act the following division is inserted in Part VI. : - “221c. - (1.) Where an employee is entitled to receive from an employer in respect of any week or part thereof salary or wages in excess of Two pounds eighteen shillings, the employer shall, at the time of making payment of the salary or wages, make deductions therefrom at such rates as are prescribed.
Penalty: Twenty pounds.”
– I move -
That the words, “ Two pounds eighteen shillings” be omitted with a view to insert in lieu thereof the words, “ Three pounds seventeen shillings “.
The system of collection at the source was designed upon the basis that only employees who are liable to tax would be subject to the instalment deductions from their salaries or wages. The decision to raise the statutory exemption from £150 to £200 necessitates the substitution of the amount of £3 17s. for the amount of £2 18s. provided in the bill.
In the course of my second-reading speech I explained that the basic rate of tax instalment deductions from salaries and wages would be the rate applying in the case of a single person without dependants. In cases of persons with dependants, there would be subtracted from the basic rate the amount of 4s. weekly for each dependant. In illustration of this feature of the scheme, I cited the case of a single person without dependants earning a salary at the rate of £10 weekly, who would have £1 10s. weekly deducted from his salary; but a man earning £10 weekly, and having a wife and one child, would have only £1 2s. weekly deducted from his salary. The deduction would be 4s. less in respect of each dependant. The lessening of the burden of tax on the lower incomes in consequence of the more generous allowance of the statutory exemption has made necessary a re-adjustment of the dependant rebate. Upon investigation, it has been found that a dependant rebate of 5s. weekly in lieu of 4s. will cause the tax instalments to approximate more closely the total amount of tax payable by each taxpayer with dependants. It is now proposed that the deductions for tax instalments shall be prescribed on this basis.
Amendment agreed to.
Clause, as amended, agreed to.
New clause 4a.
Section proposed to be amended -
– I move -
That after clause 4 the following new clause 4abe inserted: - “ 4a. Section seventy-nine of the principal act is amended by inserting after paragraph (b) the following paragraph: - * (ba)* The sum of fifty pounds in respect of the mother of the taxpayer if she is a resident and is wholly maintained by the taxpayer :
Provided that if the mother is wholly maintained by the taxpayer during part only of the year of income, the deduction allowable shall be such part of the sum of fifty pounds as, in the opinion of the Commissioner, is reasonable in the circumstances; ‘ “.
This new clause implements the decision of the parties that there should be an extension of the concessional deductions to include an allowance of £50 to taxpayers who are wholly maintaining dependent mothers. The new concessional deduction will remove any possible hardship that might arise in the case of a person wholly maintaining his or her mother from the lowering of the statutory exemption from its present figure of £250 to £200.
– I agree that this deduction should be granted, but there are other cases deserving of consideration. Recently a case was brought under my notice of a worker who was earning a few shillings over the basic wage, and who had to support an invalid daughter. Her claim for an invalid pension was rejected on the ground that her parents were able to maintain her, but he is refused any tax concession in respect of this girl on the ground that she is over sixteen years of age. There should be an exemption of £50 for dependent invalid children, even if they are over sixteen years of age.
– I have every sympathy with the parties concerned in the case mentioned by the honorable member for East Sydney. Undoubtedly anomalies exist. I know that many sons and daughters over the age of sixteen years are as helpless as any one under the age of sixteen. In that connexion, the immediate need is for a liberalization of the pensions provisions. Apart from that, I am aware that certain matters require adjustment. I shall look into them between now and the next sitting of Parliamentwith a view to bringing down further amendments. All the adjustments will not be in the direction of granting further concessions; some will be for the purpose of tightening up the act so as to prevent tax evasion.
New clause agreed to.
New clause 5a.
Section proposed to be amended - 103. - (1) In this Act, unless the contrary intention appears - “ distributable imcome “ means the amount obtained by deducting from the taxable income of a company -
where it is not an investment company -
if the whole or part of its distributable income consists of dividends received from other private companies - that whole or part, together with threequarters of the remainder, if any, of the distributable income; and
in any other case - three-fourths of its distributable income;
– I move -
That after clause 5 the following new clause be inserted: - “ 5a. Section one hundred and three of the principal act is amended -
by omitting from paragraph(a) of the definition of ‘distributable income’ in sub-section (1.) the words ‘or under any act passed by the Parliament imposing a war-time tax upon companies,’; (b)by omitting from sub-section (1.) the definition of ‘investment company’; and
by omitting paragraph (e) of subsection (2.) and inserting in its stead the following paragraph: -
a private company shall be deemed not to have made a sufficient distribution of its income of the year of income unless, before the expiration of six months after the close of that year, it has paid in dividends, nut of the taxable income of that year, the whole of its distributable income; ‘ “.
The purpose of this amendment is to give effect to the recommendation of the committee appointed to discuss the Wartime (Company) Tax. Its recommendations included the removal of private companies from the scope of the Wartime (Company) Tax, and the withdrawal of the concession which at present entitles them to retain 25 per cent, of their profits.
New clause agreed to.
Title agreed to.
Resolution reported ; report - by leave - adopted.
Bill - by leave - read a third time.
– I move -
That the bill be now read a second time.
This measure is a very simple one, its purpose being to preserve the rights of certain officers in the Public Services of the States or of the Commonwealth who may be appointed to other offices under regulation. The Officers’ Rights Declaration Act 1928-1933, which it is proposed to amend, preserved the rights of officers who had been appointed in certain circumstances. It is now proposed to cover the cases of certain other officers recently appointed under regulations made under the National Security Act to police arbitration awards. There are seven of them altogether. Two of them will be employed in the Commonwealth Public Service, one in the Central Registrar’s Office of the Commonwealth Arbitration Court, and the other in the Investigation Branch in Western Australia. These officers have rights which they desire to preserve, but which would be lost if they are appointed temporarily for a period of three years as it is proposed to do. The bill will preserve the rights of these officers, and of others appointed in similar manner. The operative sections of the bill are two in number. Clause 2 amends section 3 of the principal act by inserting the word “ schedule,” and section 5 is consequentially amended. Two other amendments of the principal act are made. Clause 4 amends section 6 in order to clear up an ambiguity. In the act reference is made to the Public Service Commissioners ; this bill proposes to substitute “Public Service Board” and will therefore make the position perfectly clear. Clause 5 inserts in the schedule the Commonwealth Conciliation and Arbitration Act under which these officers are appointed. I have discussed the bill with the Leader of the Opposition (Mr. Curtin) and the Leader of the nonCommunistLabour party (Mr. Beasley). It is non-contentious, and I commend it to the House.
Debate (on motion by Mr. Blackuurn) adjourned.
In Committee of Ways and Means:
Consideration resumed from the 27 th November (vide page 202), on motion by Mr. Fadden -
That, in lieu of the tax imposed by the Income Tax Act 1040, a tax be imposed upon incomes at the following rates:-
Division A. - Rate of Taxin Respect of Taxable Income Derived from Personal Exertion.
If the taxable income does not exceed Three hundred pounds, the rate of tax for everypound of taxable income shall be twelvepence.
If the taxable income exceeds Three hundred pounds but does not exceed One thousand and five hundredpounds, the rate of tax for everypound of taxable income shall : be twelve pence and one twenty-fifth of a penny increasing uniformly by one twentyfifth of apenny for every pound by which the taxable income exceeds Three hundred and onepounds. and
If the taxable income exceeds One thousand and five hundred pounds, the rate of tax for every pound of taxable income up to and including One thousand and five hundredpounds shall be sixty pence, and the rate of tax for every pound of taxable income in excess of One thousand and five hundred pounds shall be one hundred and twenty pence.
Division B. - Rate of Tax in Respect of Taxable Income Derived from Property. If the taxable income does not exceed Three hundred pounds, the rate of tax for every pound of taxable income shall be fifteen pence.
If the taxable income exceeds Three hundred pounds but docs not exceed One thousand and two hundred pounds, the rate of tax for every pound of taxable income shallbe fifteen pence and one-twentieth of a penny increasing uniformly by one-twentieth of a penny for every pound by which the taxable income exceeds’ Three hundred and one pounds, and
If the taxable income exceeds Onethousand and two hundred pounds, the rate of tax for every pound of taxable income up to and including One thousand and twohundred pounds shall be sixty pence, and the rate of tax for every pound of taxable income in excess of One thousand and twohundred pounds shall be one hundred and twenty pence.
on the 5th December. In order to give effect to that agreement I now move -
That the motion be amended -
by omitting from Division A of paragraph 1 the words “Three hundred” (wherever occurring) and inserting in lieu thereof the words “ Four hundred”;
by omitting from Division A of paragraph 1 the words “ twelve pence “ (wherever occurring) and inserting in lieu thereof the words “ sixteen pence “ ;
by omitting from Division B of paragraph 1 the words “ Three hundred “ (wherever occurring) and inserting in lieu thereof the words “ Four hundred “ ;
by omitting from DivisionB of paragraph 1the words “fifteen pence” (wherever occurring) and inserting in lieu thereof the words “ twenty pence “ ; and
by inserting, after paragraph 1, the following paragraph : - “ 1a. That, in addition to any income tax payable under the preceding provisions of this resolution, there shall be payable upon the taxable income in excess of Five thousand pounds derived by a company (other than a company to which section fourteen of the Wartime (Company) Tax Act 1940 provides that that act shall not apply) a super-tax at the rate of twelve pence for every pound by which that taxable income exceeds Five thousand pounds :
Provided that this paragraph shall not apply to the assessment of a company as a trustee.”
The amendments which I have moved have been necessitated by the substitution of a statutory exemption of £200 running out at £400, for one of £150, running out at £300. The effect of the amendments will be that persons whose net incomes are between £150 and £200 will not be taxed, whilst those persons whose net incomes are between £200 and £400 will pay less tax than would have been payable under the original resolution. The amendments of the resolution will cause no alteration of the amount of tax payable by taxpayers whose net incomes amount to £400 or over. By net income is meant the income which is left when allowances for wife and children have been subtracted, and all concessional deductions on account of State taxes paid, payment for insurance or friendly society dues, medical and hospital expenses and so on, have been made. Under the original resolution, the base rate of tax on personal exertion was 12d. in the £1 on a net income of £300. Below that income the average rate in the £1 was scaled down by means of the statutory exemption until it became nothing at £150. Now, with the statutory exemption vanishing at £400, we must take the rate in the £1 at £400as ourbase. As the personal exertion rate on that net income in the original scale was 16d. in the £1, that becomes the base rate in the new scale. Below £400, the average rate is scaled down as before by the statutory exemption until it becomes nothing at £200. The effect is that all net incomes under £400 will pay less than under the original scale, and all net incomes above £400 will pay the same as under the original scale.
Schedules which have been circulated will enable honorable members to compare the amount of tax payable under the previous scale and under the new scale on net incomes between £200 and £400. An examination of the figures shows the substantial benefits which the new scale provides for taxpayers in the lower ranges. It will be seen that a taxpayer with a net income of £200 from personal exertion would have ‘been liable under the previous scale to pay tax amounting to £5, whereas under the present scale no tax at all will be payable. A taxpayer whose net income was £250 will enjoy an advantage, in tax reduction, of £3 7s. The advantage tapers off gradually until the net income reaches £400 when, as I have previously stated, there is no difference between the tax payable under the original scale and under this amended scale.
The rates on income from property are 25 per cent, greater than the personal exertion rates, so that the same kind of alteration is made in the taxation of property income, with all incomes under £400 paying less than was originally proposed and all incomes over £400 paying the same as was originally proposed. In my speech when introducing the resolution, I mentioned that it was estimated that a revenue of £5,000,000 would be obtained from incomes under £400. The increase of the statutory exemption has occasioned a serious revision of that estimate. It is now estimated that on the new basis the revenue from this group will amount to £2,500,000.
A further amendment of the resolution has been made necessary by the Government’s adoption of the recommendations of the committee appointed to discuss the war-time (company) tax. Briefly stated, those recommendations are -
The amendment necessary to give effect to (a) will be contained in the War-time (Company) Tax Assessment Bill which I shall introduce at a later stage, the amendment to give effect to (b) was incorporated in the amendments to the Income Tax Assessment Bill which the House has just agreed to; and the supertax of1s. in the £1 is imposed by paragraph e of the amendments to the resolution which have been circulated.
All companies, except private companies and certain others which are specified in the War-time (Company) Tax Assessment Bill will be subject to this super-tax of1s. A company which is also liable to war-time (company) tax, will be allowed a rebate in that assessment of an amount equal to the super tax on the war-time (company) tax, whichever is the less. The exemption of £5,000 is being allowed because it is not desired that this super-tax shall fall upon small companies.
Amendments agreed to.
Motion, as amended, agreed to.
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 and second time.
.- Does this bill cover the collection of taxes by instalments ?
– That being so, I suggest that the Treasurer should confer with the Queensland Government with a view to avoiding the necessity for taxpayers in that -State having to carry three books in which to place stamps covering payments in respect of unemployment, insurance and development taxes.
– As a Queenslander with a knowledge of the difficulties referred to by the honorable member, I shall do my best to effect what he has suggested.
Bill agreed to and reported without amendment; report adopted.
Bill read a third time.
Motion (by Mr. Fadden) - by leave - agreed to.
That he have leave to bring in a bill for an act relating to the imposition, assessment and collection of a war-time tax upon companies.
Bill brought up and read a first time.
– by leave - I move -
That the bill be now read a second time.
The bill embraces the recommendation of the special committee which was appointed to inquire into the proposal of the Government to obtain from companies by means of a war-time company tax, part of the revenue which it is considered they should contribute towards war expenditure. The measure is,in many respects, the same as that which was brought before the last Parliament, the main point of difference being that private companies are removed from the scope of the present bill. A private company may, in some respects, be regarded as a combination of working partners, who, for various reasons, have formed themselves into a company.
In effect, a private company is a partnership; but by reason of incorporation it is a separate legal entity. Such a company is subject to ordinary income tax at rates applicable to companies, and, in addition, special provision has been made in the Income Tax Assessment Act whereby a private company is liable to be assessed on the whole of its undistributed income to the extent of the additional tax which would be payable by the shareholders if the income were distributed. In respect of income actually distributed by the company, the shareholders are liable for the payment of tax at the individual rates applicable to income from property.
At present public companies are required, to pay income tax. at the rate of 2s. in the £1 on their taxable income, and a further tax at the rate of 2s. in the £1 on their undistributed profits. These companies, unlike private companies, do not pay the amount of additional tax which would he payable by their shareholders if the income were distributed, as such a course would be impracticable and would not produce much revenue. It is felt, therefore, that the burden placed upon private companies at the present time is sufficiently high, and that there is justification for limiting the tax to public companies. The special . committee considered that there were many large public companies in Australia whose profits were less than 8 per cent, of the capital employed, which should be in a position to make some greater contribution to the war expenditure. The committee therefore recommended that a super tax of ls. in the £1 be imposed on the taxable income of such companies in excess of £5,000. Effect is given to this recommendation in another measure before the House. In those cases where the war-time company tax does not exceed the amount of income tax payable a.s a result of the application of the further flat rate, no tax will be payable under this bill, but where the amount of income tax payable as a result of the application of the flat rate is less than the amount of war-time company tax, the latter tax will be imposed and a rebate of the super tax will be allowed.
The tax, which it is proposed to impose upon public companies under the bill, will be based upon the amount by which the taxable profit exceeds the percentage standard. The percentage standard will ordinarily be an amount equal to 8 per cent, of the capital employed, but in certain circumstances the percentage may be increased. It has been represented by certain bodies that a war-time profits tax should be imposed on the amount by which profits made during war exceed those earned prior to the war. Honorable members will bear with me if I reiterate, for the benefit of those who may not be familiar with previous statements concerning the proposed tax, that during the 1914-18 war there was in operation a War-time Profits Tax Assessment Act. This act purported to tax the war-time profits of all traders and it was designed to prevent profiteering. It signally failed to achieve the object for which it was designed and gave rise to a great deal of adverse criticism. The former Commissioner of Taxation reported most adversely on the War-time Profits Tax Assessment Act of 1917-18 and I propose to read an extract from his seventh annual report covering the financial year 1920-21. He said-
The tax is unequal and harsh in its incidence. These features of it are due to its peculiar construction, which, as shown by the figures quoted, permitted escape from the tax of the vast majority of large and oldestablished businesses ‘which have made consistently substantial profits, both in amount and in percentage on capital employed, whilst small and struggling businesses, particularly those which were commenced shortly before or after the outbreak of the recent war, were obliged to pay relatively heavy amounts in tax. Many young businesses, however, find themselves in positions of technical difficulty, from which there was no relief for them under the law. Some of those businesses had clearly benefited by the war, though it was impossible to ascertain whether their prices had been reasonable or unreasonable. Others of the young businesses had clearly made profits, apart from war conditions, and would probably have made greater profits if the war had not occurred.
It might be mentioned that although the war-time profits tax operated over a period of four years, the collections amounted to less than £8,000,000 after deducting refunds. In the light of the experience gained as a result of the operation of the War-time Profits Tax Assessment Act 1917-1918, the Government decided that the introduction of a measure on the lines of that act would not be .justified and would be altogether undesirable. The point might also be stressed that the activities of the Prices Commission are directed to preventing the making of excess profits as a direct result of the present war.
The proposed tax will be limited, for the time being at least, to public companies. The reasons for not extending the tax to private companies has already been explained and honorable members may be assured that good reasons exist for the Government’s decision not to extend the tax to individuals. A comparison of the total taxes payable respectively by a public company and an individual shows that, when the income is a substantial amount, the individual pays a much greater amount of tax than the company. In fact, it has been demonstrated that the total income taxes payable by an individual with a considerable income will compare with the amount payable by a public company employing the same capital and earning the same return, even after the proposed waT-time (company) tax is added to the income taxes payable by the company.
Another important factor which must be taken into consideration is that a careful estimate shows that the amount likely to be realized by the application of the tax to individuals would be relatively small; moreover, such application would materially add to its complexities and increase the cost of administration.
In the bill, an attempt has been made to avoid the complexities and defects of the War-time Profits Tax Assessment Act. All public companies, irrespective, of whether they have been established for many years or have recently commenced business, will be treated in the same manner. The fact that a company made large profits prior to the war will not affect its liability to pay tax on profits which it makes during the war. It is proposed to allow each company a percentage standard equal to 8 per cent, on the capital employed. Any profit in excess of the percentage standard will be taxed at a graduated and progressive rate.
The rate of tax will be 4 per cent, of the first 1 per cent, of capital employed by which the taxable profits exceeds 8 per cent, of such capital, 4 per cent, on the second 1 per cent., and so on until the taxable profit reaches 22 per cent, of the capital employed. All profits in excess of 22 per cent, will be taxed at the rate of 60 per cent. As previously stated, provision has been made for a rebate in respect of the super tax which will be imposed on public companies. A graduated rate of tax has several advantages over a high flat rate. Enterprise is not discouraged to the same extent as by a war-time profits tax, nor is there likely to be the same tendency towards extravagance in order to reduce profits. Another important advantage is that the adoption of a graduated rate results in the simplification of the act, as the necessity for complicated concessions, which would be justifiable in the case of a high flat rate, is practically non-existent.
Public companies which are making a reasonable return upon their capital will not be harshly affected by this tax. In those cases where companies are making a high percentage of profit to capital employed, the tax will press more severely; but it cannot be gainsaid that such companies are in a position to provide the greater proportion of the revenue to be raised from a tax of this nature. It is obvious that a graduated rate of tax will not be so severe on companies earning up to 22 per cent, on the capital employed as would a high flat rate. Companies whose taxable profits do not exceed £1,000 will not be subject to the tax.
– Did the special committee agree to that?
– Tes. The bill also provides for the exemption of life assurance companies, the profits of which are divisible only among the policyholders. The exemption relates to assurance companies which are purely mutual. Such companies have no paidup capital in the ordinary sense, and it is doubtful whether the provisions of the bill relating to capital would operate to permit of policy-holders’ funds being regarded as part of the capital employed. These companies, as a .general rule, do not make profits equal to the statutory percentage on policy-holders’ funds, and in order to avoid the inclusion of complicated provisions authorizing the treatment of those funds as capital, which would render the companies non-taxable, it has been decided to provide for their exemption. It might be mentioned that assurance companies of this nature were exempt from tax under the “War-time Profits Tax Assessment Act 1917-1918.
The most difficult problem in connexion with a measure of this kind is the ascertainment of capital. An endeavour has been made to set out in unambiguous terms what represents capital and how such capital shall be ascertained. Briefly, capital, for the purposes of the bill, will consist of capital paid up in money or by other valuable consideration and accumulated profits. The term “ accumulated profits” includes reserves created out of profits.
There might exist in the minds of honorable members some doubt as to the wisdom of treating accumulated profits as part of the capital employed, but it is considered that this action is fully justified. The paid-up capital merely represents the amount which the shareholders paid up in the first instance whilst the accumulated profits represent past profits which have not been withdrawn and utilized in personal expenditure or for other purposes. These funds arc represented by assets of the company with which it earns its income. They are shareholders’ funds which are just as much at stake in the enterprise as is the paid-up capital itself.
It should not he thought that the provisions of the bill relating to the ascertainment of capital will permit companies, which have created reserves through the writing up of the value of assets with the object, possibly, of issuing bonus shares, to receive an advantage over other companies. The bill contains special provisions for the adjustment of capital in those cases where the value of assets in the books of a company is in excess of the cost thereof or the depreciated value as determined for income tax purposes, as the case may be. In any case where goodwill, patents, secret processes or certain other assets which have not been purchased appear in the books of a company, no value shall be applied to such assets in determining the amount of capital employed by the company.’
Regarding a life assurance company which is not wholly mutual, provision has been made under which the amount by which the reserve for liabilities ex- ceeds the “ calculated liabilities “ for the purpose of section 114 of the Income Tax Assessment Act will be treated as capital. For income tax purposes, these companies are allowed a deduction of 4 per cent, of the “ calculated liabilities “. The amount of the “ calculated liabilities “ is based on the actuarial valuation of liabilities. Where the amount of liabilities as calculated in the accounts exceeds the amount upon which the income tax deduction is based, it is not unreasonable to regard the excess as part of the capital employed.
The bill provides for a minimum capital of £12,500 except in respect of a subsidiary company. This minimum capital ensures that a company, with the exception mentioned, will not have a lower percentage standard than £1,000. It has been found necessary to make provision for adjustment of the capital of insurance companies carrying on business in Australia and re-insuring risks with a person carrying on a similar business outside Australia. The income tax law provides that these companies shall not be allowed any deduction in respect of the premiums they pay over to absentee companies for their re-insurance. Thus, in effect, their taxable income includes, not only their own profits, but also the profits made on their business by the absentee companies with which they reinsure. The Government has recognized that it would be unfair to relate the total taxable income to the capital of the local company for the percentage would be inflated by the inclusion in the taxable income of the re-insurance paid out. It has, therefore, been decided to provide for a pro rata increase of the capital to remedy the position.
In framing that portion of the measure relating to the ascertainment of the taxable profit an endeavour has been made to adhere as closely as possible to the taxable income as assessed for income tax purposes. The only deductions which will be made from such taxable income are: - first, Commonwealth income tax payable in respect of the taxable income ; secondly, dividends included in the taxable income; and thirdly, in the case of the first accounting period of a new company, the State income tax payable on the income. Commonwealth income tax is not allowed as a deduction for income tax purposes; therefore it is necessary to make provision for a special allowance in that connexion for the purpose of arriving at the amount of taxable profit subject to the war-time company tax. An allowance is made in arriving at the taxable income, as assessed for income tax purposes, of the amount of State income tax paid during the year, and it is not considered necessary to introduceany provisions which would alter this procedure. However, in the case of a company, the first accounting period of which is the first year of income for income tax purposes, no deduction would be allowable in arriving at the taxable income, as no State income tax would have been paid during that year. In such a case, therefore, it is proposed to deduct the amount of State income tax which would be payable in respect of the income of the company of that year. “With regard to the deduction of State taxes for purposes of the proposed tax, certain bodies suggested that the principle of allowing the amount payable in respect of the income, should be substituted for that of allowing the amount paid during the year. Whilst this proposal would benefit some companies, it would be disadvantageous to others. In the drafting of the bill an endeavour has been made to adhere as closely as possible to the principles of the Income Tax Assessment Act, and as that act provides for a deduction of the amount of State income tax paid during the year, no justification can be seen for departing from that principle, except in the case for which special provision has been made.
The deletion from the taxable profit of dividends paid by one company to another will avoid double taxation. Profits will be taxable or non-taxable in the hands of the company which makes them, and will not be followed into the hands of any company which may receive part of them in the form of dividends.
It is not necessary to make specific provision in the bill for allowance of losses incurred in prior years, as such losses are allowed for income tax purposes, and, therefore, would be taken into account in arriving at the taxable income.
Special provision has been made for the application of an average rate of tax in the case of primary producers. The averaging principle embodied in the bill is somewhat similar to that contained in the Income Tax Assessment Act. The rate of tax is ascertained according to the average taxable profits of the primary producer over a period of five years. Should the average taxable profits represent less than8 per cent, of the capital employed, no tax will be payable, but should the average taxable profits exceed 8 per cent., the rate of tax applicable to the actual taxable profit will be the rate which would be applicable to the average taxable profit.
Honorable members will be fully aware of the necessity for the application of the averaging principle in the case of primary producing companies. The success of a primary producing company depends principally upon seasonal conditions, and it would be inequitable to tax such a company on the excess profits of a good year, following several years of drought, without taking into account the result of trading in prior years.
Special provision has been made to meet the position of a company, the taxable profit of which includes a premium received in respect of a lease. In such a case the company may elect to have the premium spread over the term of the lease for the purpose of ascertaining the rate of tax applicable to the taxable profit.
Holding companies may elect to have their subsidiaries treated as branches, and thus be treated as one company for all the purposes of the act. If no election is made, each company must be separately assessed. An election made by a company cannot be revoked without the consent of the commissioner.
It will be appreciated that, in a bill of this nature, it would be impracticable to make provision to cover every case which presents special features. It is recognized that the statutory percentage prescribed in the bill would not be adequate in some cases; for example, in the case of a business which uses wasting assets. Therefore, provision has been made for the creation of an independent board of referees which will exercise certain discretionary powers in relation to prescribed matters. This board will not deal with disputes with regard to assesments made by the Commissioner of Taxation. These will go to the High Court or to the Taxation Board of Review according to the taxpayer’s choice. The Board of Referees will have power to recommend to the Minister a higher statutory percentage to be applied to any class of business where there is some “ unavoidable condition “ associated with that class of business which makes it just that a higher statutory percentage be granted. The bill gives power for the making of regulations to give effect to these recommendations. The board will be empowered to grant a higher percentage standard to a company whose taxable profit has been rendered abnormally large owing to the inclusion therein of profit relating to a period greater than the accounting period.
The board will have power to decide whether the capital employed by a company as determined under the act should be increased, where in any case a company considers that, in the special circumstances of its case, the capital as ascertained in accordance with the provisions of the act does not represent the true capital employed. The board will also be empowered to increase the capital as determined in accordance with the act in any case where it is shown that the company requires little or no capital in the conduct of its business, and that its profits are mainly due to the personal skill, ability or enterprise of its shareholders.
An important feature of the tax is that it will be linked as closely as possible with federal income tax. Companies which have lodged income tax returns will not ordinarily be required to lodge additional -returns, as the income tax returns will contain most of the information required for war-time company tax purposes. This, in itself, will greatly facilitate the administration of the act by the department, and enable it to prepare and issue assessments with a minimum of delay and expense.
The economic effect of the measure has received careful consideration. The bill has been drawn with due regard to the ability of companies to pay the tax.
It is considered that the tax will not have a serious effect upon dividends, except in those cases where dividends are paid at a particularly high rate. In such cases it is anticipated that it will be possible for the companies to pay reduced, but still high, rates of dividend, and the recipient will not be called upon to bear an unreasonable burden, having regard to the circumstances under which the tax is imposed. The large majority of shareholders will not be affected by this tax as their money is invested in companies which, although regarded as sound, do not, as a general rule, make profits in excess of 8 per cent, of the capital employed.
Provision has been made to ensure that, in the case of those companies which are required to pay preference dividends at a rate in excess of the statutory percentage, the burden of the tax shall not fall wholly on the ordinary shareholders. The companies concerned will be empowered to deduct from the preference dividends an appropriate portion of the tax.
These remarks will serve as a general survey of the intention and scope of the bill. In a survey of a measure of this nature, it would be undesirable to make more than passing reference to certain provisions which may be dealt with in greater detail in the committee stages.
It will be observed that many of the machinery provisions of the Income Tax Assessment Act have been adapted for the purposes of the bill. This is a convenient method to adopt and avoids much tedious repetition. Honorable members are probably familiar with the adapted provisions, but if the effect of any is in doubt, I shall be happy to explain it to any honorable member who desires information at the committee stage. I commend the bill to the House.
.- The Opposition does not intend to oppose the bill. At other times, and in other circumstances, we might have had many critical things .to say about such a measure, but the times are unprecedented, and the circumstances without parallel in the annals of this Parliament. I refer to the immediate circumstances surrounding the introduction of the bill.
In order to ensure the workability of this Parliament, the Leader of the Opposition (Mr. Curtin) withdrew his opposi tion to the budget, on pertain conditions, one of which was that the previous measure dealing with war-time company profits, introduced by the former Treasurer, be referred to a select committee for consideration. Insofar as this bill is an improvement on the earlier one, the Opposition can claim much of the .credit for it, because it was a part of the proposals put forward by the Leader of the Opposition when he corncompelled the Government to compromise. The bill is the best that could have been obtained in the circumstances. The terms of reference of th,e select committee limited the scope of its inquiry to some form of company taxation.
The company tax has some good points, and some bad points. The first good point is that it is a very productive tax and can be collected at very small cost indeed. Another good point is that the “felt” burden of the tax is very small. By that 1 mean that as the tax is collected before the money actually reaches the shareholder, he does not feel the burden to the same degree as he would were he first to receive the money and then have to part with it. Therefore, his grudge against the collector of taxes is not so great, with the psychological consequence that his incentive to work is not affected to the same degree by this tax as by income tax. As I have pointed out on other occasions, the incentive to work is extremely important, because this war will be won by work done and services performed.
On the other hand, there is at least one bad point, and that is that the company tax does not comply fully with the principle of ability to pay. The money burden of the company tax falls evenly on the shareholders, large and small alike, so that the large income earner pays the same percentage as the small income earner, and to that degree the tax does not comply completely with the principle of ability to pay. As proof of that, I refer honorable members to -the report of -the Royal Commission on Taxation in 1934, paragraph 35 pS which .states -
The basis of ability to pay is properly applicable only to the individual and not to the machine which is used to produce his income.
That fault, of course, may be overcome by the system of rebates in operation in Great Britain, but, in time of war, difficul ties are too great to allow of the introduction -of that system. That being so, since the terms of reference of the inquiry were limited to a company tax, and in view of the fact that its good points exceed its bad points, the best that could be done was to accept some form of that tax. The forms considered by the committee were four in number. First of all we considered the introduction of an excess war profits tax. The Treasurer (Mr. Fadden) -has dealt with that matter to some degree, but the Opposition still believes that an excess war profits tax should be imposed. Unfortunately the difficulty of bringing it in at this juncture was too great, but honorable members on this side are strongly of the opinion that consideration should be given to that form of tax - 100 per cent, at that - in the very near future.
The second proposal considered was a war-time company tax, which is the measure now before the House. The name does not convey very much, and the tax might be more aptly described as an excessive profits tax. I shall deal with that proposal later. The third form considered was a flat rate super-tax, and the fourth was some combination of the first three.
There were three strong objections to the original measure - the “War-time Companies Tax Bill - the first being that certain large companies, including banks, would not have to pay any tax at all. The second objection was that the measure imposed too heavy a tax on small public companies., and the third was that the bill would impose hardship ou private companies in which the rate of profit was high due to the efficiency, energy enterprise, and initiative of the proprietors, as against individual proprietorships and partnerships carrying on similar business. The first objection, namely, that the big companies, including private companies, would escape taxation under this measure, was met by the committee by giving to- the Taxation Department the option to impose a super-tax of ls. in the £1 on all profits of public companies where such tax would be greater than the war-time company tax. The second objection, that hardship would be imposed on small’ public companies, has been met by the exemption from super tax of the first £5,000 of profits earned by any public company. The third objection, that hardship would be inflicted on private companies whose high rate of profit is due to the energy, initiative, enterprise and efficiency of its members, is met by removing private companies from the scope of the war-time company tax, and treating them on the basis of partnerships. Individual shareholders of such private companies will now be taxed on their profits at the property rate applicable to their respective incomes. In this case, we are getting very near the true application of the principle of ability to pay. Taking into account the existing taxation proposals, the result will be that public companies will pay 2s. in the £1 on their total profits, plus ls. in the £1 on all profits in excess of £5,000, plus 2s. in the £1 on all undistributed profits. With regard to undistributed profits, I strongly urge that consideration be given to the desirability of taking a part of undistributed profits in the form of compulsory interest-free loans. This is a source of money for investment which does -not come under the regulations governing new capital issues. Those regulations were promulgated in order to make certain that money would not. be invested in enterprises connected with non-defence work. One-third of the money going into investment every year is in the form of undistributed profits or additions to reserves.
Private companies now pay 2s. in the £1 on all profits. After that payment is made the remaining profits will be deemed to be distributed, and be added to the personal incomes of the shareholders and taxed at the appropriate property rate. I shall give an example to show how the tax will be applied to companies of this kind. Take, for instance, a. com pany which we shall call “ X “, that has three equal shareholders.
– What would be the position if the shareholders did not have an equal interest in the business ?
– I have merely taken three equal partners to exemplify the principle. The same principle would be employed irrespective of the holdings of the shareholders. Suppose the total profits of the company amount to £5,000, Federal income tax at 2s. in the £1 would take £500, leaving a residue for distribution of £4,500 or, assuming they are equal partners, £1,500 each. We shall call the partners “A”, “B “ and “C”. If “ A’s “ other income is £200, he will be taxed on his £1,500 of profits the property rate applicable to £1,700; if “B’s “ other income is £400 he will be taxed on £1,900; and if “ C’s “ other income is £500, he will be taxed on £2,000.
– Their other income would not be taxed at the property rate if it were derived from personal exertion.
– No. If the other income was earned income it would be taxed at the personal exertion rate, but the dividends would be taxed at the property rate. As the tax to be levied on public companies is really a tax on high rate of profit, it is to be expected that some . difficulties will be encountered in calculating the rate of profit. I should say that those difficulties would be of three kinds. The first would be that of ascertaining what the profits are. In ordinary circumstances profits are not hard to calculate, but primary producers whose incomes fluctuate largely over the years may earn a particularly high income in any one year. Provision has, therefore, been made in the measure to average the income of primary producers over a period of five years. The second difficulty is to determine what constitutes a high rate of profit. The percentage standard is the rate above which profits are deemed to be excessive and, therefore, taxable. The standard fixed in the bill is 8 per cent. Profits above the standard rate are taxed on a sliding scale beginning at 4 per cent, of the excess over 8 per cent., and increasing to a maxi- mum of 60 per cent, of the excess over 8 per cent, at the point where the profits show a return of 23 per cent, interest on capital. Where the class of business is such that the risk to the capital involved is very great, a board of referees is empowered to fix a higher percentage standard than 8 per cent. The third difficulty is in fixing the “just” capital employed. This is met by definitions in the bill, and by powers given to the board of referees to adjust anomalies.
The bill is still subject to the general criticism that high rates of profit are essential to attract capital to certain industries. It may be said that a tax is imposed on the willingness of individuals to incur certain necessary risks. Risky businesses, however, should be discouraged in war-time. For that reason the tax may have a good effect from the point of view of increasing our war effort. We have reason to believe that next year the Government will require still greater revenues. We have to look ahead. The difficulties arising from the present situation in which company taxes at varying rates are imposed by the several States and the Commonwealth make the cost of collection very high. It is essential that the Government should give early consideration to the appointment of one authority to impose and collect all taxes throughout the Commonwealth. If this problem were tackled in a courageous manner it could be solved. The Government could use the power given to it under the National Security Regulations to bring about this very desirable reform. Once the people had enjoyed its benefits and had been able to assess the efficiency and economy of such a method of imposing and collecting taxes, they would never desire to revert to the present chaotic position. I commend this measure to the House as the best method, under the limitations imposed by the compromise extracted from the Government, of raising the revenue required.
.- As a member of the committee from whose deliberations this measure has emerged, I support the bill. It replaces a measure which was introduced in the last Parliament and had not been passed when the House was dissolved before the last general election. That measure contained some objectionable features, the principal one of which was the exemption from tax of companies whose earnings amounted to less than 8 per cent, of their share capital. That provision would have enabled the escape from taxation of a number of huge companies, including private banking institutions. The committee was unanimous in recommending that they be brought within the scope of the tax. The Treasurer and the honorable member for Corio (Mr. Dedman) have dealt exhaustively with the bill and its effect, but I propose to offer a few observations.
With a degree of justification, some people object to the principle of company taxation on the grounds that subscribers to the companies have to pay income tax on their dividends and that holders of small blocks of shares, from which they may not earn more than £100 per annum and upon which their livelihood depends, will have their earnings sharply reduced by the incidence of this tax. It is unfortunate for them that they are caught in the same net as the people whose holdings are big, and who are the people whom we wanted to catch.
I welcome the provision of a sliding scale of tax. The sliding scale has been in operation since 1909 in Queensland in relation to the company tax. The big companies in that State which earn more than 19 per cent, on their share capital pay 63d. in the £1. Representatives of big business in this country wanted a flat rate of tax because under the sliding scale they would have to pay considerably more than on a flat rate tax. The statement that companies have to pay 4s. in the £1 sounds impressive, but some of the companies will have to pay considerably more than that under the sliding scale system, whereas had a flat rate been decided upon they would have escaped from a large amount of tax.
The committee was instructed to devise means whereby £4,250,000 would be raised by this tax. I understand that it is estimated that the proposal now before honorable members will yield between £1,250,000 and £1,500,000 more than was to have been raised under the original bill, or a total collection of about £7,000,000. That should enable the Government to restore the statutory exemption to £250, which would be of great benefit to the toilers.
I suggest that the taxation experts of the Government collect information during the parliamentary recess for presentation to this chamber as to excess war profits with a view to the levying of a war profits tax, similar to that which operates in Great Britain, where some companies are taxed 100 per cent, on the profit which they earn above a prescribed level. In the twelve months which will elapse before the next budget is introduced, Ministers and honorable members generally will gain experience of the working of this measure and of comparable taxes in other parts of the British Empire. This tax is intended to help to meet the enormous expenditure that will be incurred on the war effort this year. Next year, no doubt, even more money will be required for war purposes and it may be that the rate of tax proposed in this bill will have to be increased and other measures adopted.
.- As honorable members know, this measure has been the subject of investigation by a committee drawn from al parties in this House. From its deliberations emerged certain recommendations which the Government has accepted and incorporated in amendments that are in the bill now before the House. The principle of deliberation upon a measure concerning which there may be contention is thoroughly sound and is calculated to produce legislation which is more acceptable, not only to the political parties in Parliament, but also to the public generally. Credit for alterations which result from such deliberations cannot and should not be claimed by any one party. If that be done the value of deliberation of this kind will be considerably reduced. I understand that some months ago, in the councils of the parties represented on this side of the House, the wisdom of certain proposals contained in the bill was questioned. As the result of these doubts, the measure underwent some revision. I ask honorable members opposite, therefore, not to lay claim to any credit which may be due for the drafting of the amendments which were accepted by the Government. Should they do so honorable members on this side of the chamber will be obliged to demand their measure of praise. I hope that all parties will agree to share whatever credit is merited.
The redrafting of the measure removed a number of anomalies. These related particularly to private companies which would have been severely affected had the bill been passed in its original form. The bill now provides that private companies will be taxed virtually as partnerships, with the exception that they will be required to pay- a flat rate of 2s. in the £1, and at property rates on the distribution of surplus profits. There can be no just complaint against that.
The proposed taxes will cause a heavy drain on the resources of many public companies, which will be obliged to pay an additional flat rate of ls. in the pound, or on a graduated scale on the profits in excess of S per cent., whichever is the greater. They will also be obliged to pay on their undistributed profits. This impost will withdraw from such companies funds which otherwise they might use for the expansion of their undertakings. We all have seen, in the expansion of Australian industries, how companies under good management can improve their plant, extend their properties, provide more employment and increase the range of their products. I do not express any unduly pessimistic view of the future when I say that the operation of this bill may, for the time being, restrict their ability to do this. We are living in desperate days, however, and any sacrifices that companies are required to make will be in support of the cause to which we all are required to contribute to the limit of our capacity.
During the war of 1914-18 a war-time profits tax was enacted, but the terms of the legislation limited the period of its operation to the duration of the war and one year thereafter. To-day an excess profits tax is in force in Great Britain, and its term of operation is limited to the duration of the war and one year thereafter. That provision has always to my knowledge been incorporated in legislation of this kind. Therefore, I ask the Government to make a similar stipulation in respect of this bill. When the time comes for it to cease, the government of the day will be able to consider new means of raising essential revenue.
– Mr. Acting Deputy Speaker, I ask for the adjournment of the debate in order that honorable members may have an opportunity to give full consideration to the terms of the measure.
– I am not prepared to grant an adjournment of the debate. This bill was brought up some months ago. A special committee has exhaustively investigated every aspect of it, and has recommended certain amendments, but the principlesof the bill are unchanged. Time is now of the essence of the contract. No good purpose could be served by adjourning the d’ebate at this juncture.
.- I protest agaiust the procedure being followed by the Government, which is endeavouring to rush this measure through Parliament. Despite what other honorable members say, we have not had time to consider the bill thoroughly. It contains 37 clauses and there are references to the Income Tax Assessment Act, which contains 266 sections.. In order to understand its true import we must apply to that act the proposed amendments embodied in the bill. It is impossible otherwise for us to learn what changes are to be effected.
I wishto dispel any wrong impression which may have been created by the two honorable members on this side of the House who have already spoken in this debate. They said that the bill represented part of the compromise which was made between the Government and the Opposition. That is not strictly accurate. The terms of the compromise provided for the establishment of a special committee in order to reconsider the war-time company profits tax proposals of the Government. But they did not involve the acceptance of the findings of the committee ; that was to be the subject of. consideration by the different parties. So far - I do not blame the committee for this, because recent sittings have been long - the Labour party has not had an adequate opportunity to consider the recommendations of the committee. Therefore, I believe that the party is not bound by the terms of the agreement made between the Government and the Opposition. After briefly examining the bill, and listening to the speeches that have been delivered already, I have formed the impression that an improvement has been made on the original form of the measure. At the same time, its effects on the profits of the companies will not be so drastic as some honorable gentlemen would have us believe. The honorable member for Kennedy (Mr. Riordan) said that the amount now proposed to be collected from this tax represented an increase of £1,250,000 on the original estimate. Incidentally, this is a point on which the Treasurer (Mr. Fadden)omitted to’ enlighten the House.
– I do not know where the honorable member for Kennedy obtained those figures. They are not available to me yet.
– The honorable member for Kennedy was a member of the committee, which I understood to have examined that part of the subject.
– The honorable member for Kennedy made an estimate on a certain basis. The committee did not consider any special amount.
– One of the important tasks which the committee was required to perform was to provide for additional revenue from this form of tax.
– Not “ additional “. The committee was required to find at least the same quantum of taxation.
– That may be the honorable gentleman’s own view, but I know that members of the Labour party were dissatisfied with the original measure, not only on account of its method of application but also on account of the proposed amount of revenue, which was regarded as inadequate. The representatives of the Labour party on the committee had for their purpose the increasing of the proposed collections from the tax. Therefore the amount of the proposed additional revenue is of great importance to the Labour party. The honorable member for Kennedy has said that the bill in its new form proposes to derive an additional amount of £1,250,000 from the tax. That is one reason why honorahle members should have a further opportunity to examine the measure. The Treasurer said, by interjection, that that question was not discussed by the committee.
– I said no such thing.
– We may find out exactly where we stand in a moment. The -right honorable member for Yarra (Mr. Scullin) made that statement and the Treasurer did not deny it.
– I said that the exact amount was not decided by the committee.
– The committee must have had some estimates before it.
– Of course it had.
– Those are the figures I want to obtain; they would help to ease the confusion which apparently exists in the minds of different members of the committee.
– The confusion is only in the mind of thehonorable member.
– The only estimate I have heard so far was given by the honorable member for Kennedy. The Treasurer said that he did not know where the honorable member obtained those figures. But he admitted that estimates were discussed by the committee. Where else would the honorable member for Kennedy obtain his figures? I ask the Treasurer now what amount is proposed to be obtained by means of the new tax?
– No definite amount has been decided upon. The terms of reference of the committee provided that at least the same quantum of taxation was to be obtained as the result of its finding. The committee has complied with that requirement.
– What was the proposed re venue from the tax in its original form ?
– An amount of £4,250,000 this year, and a total of £5,300,0.00 for the full year.
– Are not honorable members entitled to know whether it is proposed that the bill, in its new form, 3hall provide additional revenue? Surely officials of the Treasury should be able to supply the Treasurer with the information I ask.
– It isestimated that the bill in its new form will bring in approximately the same amount of revenue as was previously envisaged.
-Judging by the Treasurer’s remarks, no estimate has heen made of theadditional revenue expected to be derived from this tax. Although it is admitted that that aspect was discussed at the meeting of the special committee, noneof the three honorable members on thisside, who are members of that committee, is able to give an estimate.
– The honorablemember asked for an assurance that the quantum of taxation would remain the same. I gave that assurance.
– I asked for anestimate of the additional revenue expected tobe derived fromthis tax. In the absence of any other figure I must accept that given by the honorable member for Kennedy. Whether that figure is the honorable member’s own estimate, I do not know.
– I have nowreceivedthe estimates, which have just been completed. The committee estimates that this tax will yield an additional £1,800,000 in a full year,and an additional £550,000 for the remainder of the current year.
– Let us examine that estimate in relation to the Treasurer’s statement that the dividends of companies will not be affected by this tax.
– I said that certain dividends would not be affected by the tax.
– The Treasurernow qualifies the statement he made previously.I listened intently to his remarks. He said that dividends were not likely to be affected as the result of the operation of this hill.
– I did not saythat.
– If the collection of the sum of £1,800,000 from this tax will not affectcompany dividends, I can only come to the conclusion that the pricefixing machinery established by this Government is not operatingeffectively. Companies will escape any reduction of dividends as the result of this tax by increasing the prices of the commodities which they manufacture or sell. In the light of that fact, I can see noreason why honorable members should be enthusiastic over this measure. Apparently this additional revenue will be taken out of the pockets of the consumers, who, inthe main, are the workers. At all events it is evident that the Government representatives on the -special committee zealously protected the profits of the big companies. Wealthy concerns which have built up enormous reserves in the past will escape this tax. They will still reap the benefit of their distributions of bonus shares, which they made at a time very convenient to themselves. Will the Treasurer inform us as to how he intends to get at the enormous profits that have been made by companies such as the Broken Hill Proprietary Company Limited? According to an investigation conducted by a public accountant, equally as able as the Treasurer, into the affairs of the Broken Hill Proprietary Company Limited, it was proved conclusively that a certain sum invested in that company at the outbreak of the last war would now yield a return of 94 per cent, on the investment. What does the Treasurer propose to do in regard to the profits of that company?
– We shall take some of its profits under this legislation.
– The Government, apparently, will not take a very great share of that company’s profits, if it expects to raise only £1,800,000 in addition to the £4,250,000.
– This tax will yield £1,800,000 inaddition to £5,300,000, making a total of £7,100,000 for a full year.
– In view of the Treasurer’s statement that company dividends would not be affected by this tax, I am still unconvinced that the Government will take any appreciable proportion of the profits of the Broken Hill Proprietary Company Limited, or any other big company. Australian Iron and Steel Limited is a subsidiary of the Broken Hill Proprietary Company Limited, which holds all of the ordinary capital in that company. On a previous occasion, I pointed out that in one year Australian Iron and Steel Limited, after doubling its regular dividend, expended on extensions to plant and otherwise retained in the undertaking a sum of £800,000 out of profits. Under the Income Tax Assessment Act 25 per cent, of profits may be retained in the undertaking free of tax, because such profits are not considered to be distributable income. From a cursory glance at this measure it would seem that the Government proposes to amend that provision and to tax every pound of profit. But that is not the case. The large wealthy companies will still be enabled to escape tax on profits retained in the undertaking for the extension of plant. In the Income Tax Assessment Act “ undistributable amount” is defined as the amount by which the dividends paid by a private company out of its taxable income of the year of income fall short of a sufficient distribution. I should like to know what is a sufficient distribution?
– The reference is to distribution /by way of dividend, and not by way of acquisition of assets.
– Will profits retained in an undertaking and used for the purpose of extension of plant be liable to tax ?
– The aspect raised by the honorable member is dealt with under a different bill.
-Clause 14 of the hill reads -
This act shall not apply to -
A private company as defined in (section 103 of the Income Tax Assessment Act.
Sitting suspended from 6.15 to 8p.m.
– Prior to the suspension of the sitting, I made a protest against the Government persisting with this very involved bill without giving honorable members an ample opportunity to examine its provisions. I mentioned that it was necessary to examine not only clause 37 of the bill, but also the Income Tax Assessment Act, and I was advised by the Treasurer (Mr. Fadden) and the honorable member for Corio (Mr. Dedman) that clause 14 of this new bill says that the act shall not apply to a private company as defined in section 103 of the Income Tax Assessment Act. I do not dispute that. But how could I tell what the sort of company was referred to in section 103 of the Income Tax Assessment Act, if I did not read that section?
– That is so.
– It was necessary to examine the Income Tax Assessment Act, as well as the bill which preceded this, in order to ascertain the correct position. I have been able to secure information which shows that, although legislation may sometimes appear to be all right these large companies are able to engage some of the best legal brains in the community to discover in it loopholes which enable them to evade their just liability. The representatives of the Labour party on the committee did a very good job in adverse circumstances. They had arrayed against them gentlemen who even before entering this Parliament, were very experienced in this form of legislation as well as in handling the affairs of companies. Those gentlemen know what steps to take in order that the companies may escape from the responsibility of paying this tax. Some years ago, a royal commission was appointed to inquire into the operations of the Commonwealth and State taxation laws. T believe that Mr. Justice Ferguson was chairman, and Mr. H. V. Nixon, a chartered accountant of Victoria, was a member of that commission, which discovered that there had been large scale tax evasions by wealthy companies. It made certain recommendations to this Parliament. One recommendation was accepted by the Parliament, after some delay to which I have previously referred. That recommendation provided that all profits distributed in the form of bonus shares should be taxed in the same way as profits distributed as dividends. Subsequent to the passage of the necessary legislation, when every one believed that all profits distributed in the form of bonus shares were to be taxable, the Broken Hill Proprietary Company Limited made a record distribution of bonus shares, amounting to £4,459,790, giving 64 bonus shares for every 100 shares held by a shareholder. I made inquiries, and discovered that this distribution was not subject to Commonwealth income tax, despite the fact that this Parliament had determined that profits distributed in the form of bonus shares were to be taxable. The speeches of honorable members who addressed themselves to the amending bill show that, in their opinion, such profits were to be taxable, but there was a loophole in the legislation, and the company conveniently found it. The honorable member for Warringah (Mr. Spender) was Treasurer at the time. I wrote to him, inquiring on what grounds this company had been permitted to escape the payment of income tax, and received the following reply: -
In reply to your letter dated 24th ultimo on the abovementioned subject, I desire to advise that the Commissioner of Taxation has informed me that the facts relating to the proposed bonus share issue have not been submitted to his department for official ruling and, in the absence of official knowledge of such facts, it is not possible for him to either confirm or dispute the statement made by the chairman of the company on the subject.
He states, however, that according to press reports an extraordinary general meeting of shareholders of the company was held on the 5th January last to consider certain recommendations by the directors, one of which was to capitalize the sum of £4,459,790 being the amount standing to the credit of the account for premiums on new share issues. A resolution confirming the recommendation of the directors was duly passed by the shareholders and it was pointed out by the chairman that the bonus shares to be issued as a result of the passing of such resolution would not be subject to federal income tax nor to ordinary State income tax.
That letter goes to show that, no matter how skilled honorable members may be in these matters, no matter how sincere may be their belief that they are closing all loop-holes, it is always possible, with a sympathetic administration, for political friends to be allowed to escape. That explanation of what happened would do justice to the honorable member for Robertson, who is highly skilled in these matters. The honorable member for Corio, the honorable member for Kennedy, and other members of the committee, were sincere in their desire to do what they set out to do, but whether the result that they expected to achieve will finally be achieved is an entirely different matter. Therefore, I do not view this bill with any enthusiasm. Opposition members who sat on the committee were able to improve the original provisions only slightly. Honorable members will recollect that earlier in my speech I pointed out, to the great discomfiture of the Treasurer, that he himself had said that the collection of this tax would not affect dividends. If it is not to affect dividends, evidently the companies will not be at a loss as the result of its collection, but will recoup themselves by passing the burden’ on to the general community. This shows conclusively that the claim of the Government .that profits are to be restricted, limited or regulated, is so much moonshine, and has no substance. These companies are to be at complete liberty te extract from the public, whatever profits, they desire, without having any restriction placed’ upon them by the Government. For days, even weeks,. I endeavoured to obtain access to departmental’ files, in order that I might’ examine what a certain department was doing in relation to price-fixing. That matter, I. understand, may not be dis- cussed on this particular measureSpeaking to am earlier measure, I contended that some of these companies had’ already begun to build up cash reserves in order to provide for the payment of this; increased tax. Although I listened very attentively to the Treasurer, and his reply sounded all. right,, it was a little- confusing to me. I desired to know> whether these cash reserves are built up in order to- provide for the payment of future taxes. The ordinary dividend has not- been affected, so far as; I can. ascertain;, the same- dividend has been paid to both ordinary and. ‘ preference shareholders. The Electrolytic, Zinc- Company put aside in- its latest balanced-sheet, an additional £50,000> in order to> provide for increased taxation.. That £50^000’ has not come out of the dividends: of the shareholder, because- those dividends remain at the same figure. Obviously,, therefore, it must come from some other source^; and I believe that source to Be the pockets of the people; the- money being obtained by an- addition to the cost of whatever is sold. These large, wealthycompanies are making provision for the payment of this tax before they become liable to pay it. The only result of this new legislation will be to provide! a little over £7,000,000.
– Is- it £7,000,000’ or £5,000y000?-
– Many figures; ha*e been given, but the latest amount given is a little over £7’,000;000. It” took me: about half an hour to extract that information, from the Treasurer. To what does that £7,000,000. amount? The honorable member for Kennedy gave ample evidence: that it constitutes; a very small: percentage, of- the profits made: since’ the- outbreak of the war.. Yet the: Government’s proposal is being applauded), in the belief that equality of sa crifice will be obtained-. A. little over. £7000,000 is to, b& collected-, from. large, wealthy monopolies, who: will- be able to recompense themselves in a few months.
-. - If the: increased profits since the outbreak: of the war had amounted to anything like. £7,000,000,. the committee would have recommended an excess profits tax.
– That is so.
-. - Does the honorable member for Corio- suggest- that there has been no increase of profits since the outbreak of the war ?
– The estimates given by the department show that to< be the case.
– If increased profits were made, why does not the Government tax them 100 per’ cent., as it said it would do at the outbreak of the war? When appealing to the people to make sacrifices, the Government said that- no profit was to he made out of this war. As a matter of fact, it was stated that everybody would be obliged to make sacrifices. Now there is an admission by the Treasurer, and by the honorable- member for Corio, that profits have been made by these companies-
– There1 was no such admission by me.
– There: are technical difficulties in connexion, with the imposition of a war-profits tax at the present time), but the committee recommended that- it be resorted: to in the future. I mentioned that when I spoke.
– All of these- things are to be done in- the future. I suppose honorable members know that, according to the Government, there is- to be a new social order after the war. It is now said* that excess war profits, are to be taken from the companies in the future. The honorable member for Corio has not been in- this- Parliament with. anti-Labour governments in power- so long as I have been. When: he: has; I am quite certain that, he will not have the same faith andtrust, in them. Labour representatives on these? committees must, understand’ that, in meeting representatives! of the Government parties, they a-re meeting- not only political opponents in the: Parliament, but, also representatives of big monopolies, outside- the Parliament. I believe that the honorable, member for- Corio mentioned that, fact during, his election campaign. When- dealing- with, direct political representatives of the big monopolies, we have to understand that they would not accept anything except what was satisfactory to those big monopolies. The honorable member for Robertson would adopt that attitude. This bill is not going to do the things which the Labour party hopes. Before very long the honorable member for Kennedy and the honorable member for Corio, without making the admission openly in the House, will probably come to me privately in the party room and admit that what I am now saying is right. I do not doubt their knowledge of finance. As a matter of fact, I have a great admiration for the financial knowledge -of the honorable member for Corio, but he does not know so many tricks as do some honorable members on the other side. Labour representatives would probably be too honest to see that anything was being put over them.
– Why did not flic Labour, party put the honorable member for East Sydney (Mr. Ward) on the committee ?
– Unfortunately, I am not able to say why I was not selected, any more than the honorable member for Barker can say why he was not re-elected Leader of the Country party. I am giving what might be described as very moderate support to this measure, believing that it will do very little good, if any.
– It will raise the money which we set out to get.
– No doubt, but will the money, in the final analysis, come from the wealthy companies, or out of the pockets of the people ? It is on that point that I differ from the members of the committee. I believe that, when Parliament re-assembles, members of the Labour party will be incensed at the failure of this measure to achieve what is expected of it. They will realize that prices have soared, despite the assurance of the Minister for Trade and Customs (Mr. Harrison) that the price control machinery is working efficiently. The terms of the compromise provided that the committee should report’ back to the various parties, but we have been worked so hard lately that we have not had time to hear a report from the committee. The
House has heard my opinion of the measure, and I am .sure that that opinion will be justified by .events. As time goes on the opposition to the measure among members of the Labour party will become increasingly pronounced.
.- Most honorable members will agree that the bill now before the House is a marked improvement on the original one. I had grave misgivings as to the probable effect of the previous proposal, and was pleased when a special committee was appointed to go into the matter. I hope that the precedent thus created will be followed in regard to other matters. Every member of the special committee will probably agree that the present bill is not perfect. It was not .possible in the time at our disposal to make a thorough examination of every phase of the problem. The scheme will have to be amended in the light of experience. Anomalies will be revealed and will have to be corrected. I suggest that, before the next budget is prepared, the whole matter of excess profits should be examined thoroughly so as to arrive at a formula for taxing them. No person or .company should be allowed to make excess profits in war-time. Taxation proposals should cover, not only companies, but private individuals and partnerships as well. Early in the new year the committee should be authorized to go further into the matter. The honorable member for Corio (Mr. Dedman) proposed that companies with undistributed profits should be compelled te invest them in Commonwealth loans. Such a provision might create grave hardship, particularly to new companies which ordinarily utilize undistributed profits to extend their business.
– If it is an extension of war work, well and good, but if it is intended merely to extend some peacetime activity that the country can well do without, there is no reason why they should be permitted to do it.
– A company may have a considerable amount in undistributed profits standing to its credit, and, at the same time, be heavily indebted to its bankers by way of loan or overdraft.
Such a company should not he required to invest in compulsory loans.
.- As one of those innocents abroad who, it has been alleged, had something put over them by other members of the select committee, I should say something on this bill. I agree with the honorable member for Lilley (Mr. Jolly) that a committee should be set up early in the new year to review the working of this measure, and to frame a bill to collect by taxation profits arising out of the war. A measure of this kind is experimental so far as Commonwealth legislation is concerned, though the principle has been applied in Queensland for many years. As a matter of fact, it is the method by which the Government of Queensland collects its company taxation, but this measure is more severe than any legislation previously enacted in Australia.
The original bill was introduced in May last by the then Treasurer (Mr. Spender). It was severely criticized by the representatives of companies on the ground that it was too harsh, and this criticism caused the Government to adjourn consideration of the bill until eventually the Parliament was dissolved, and the bill lapsed. I asked at the time whether the adjournment would prevent the collection of revenue under the measure for this financial year and the Treasurer said that it would not. As the result of a discussion by members of the Advisory War Council, it was decided to set up a special committee, representing all parties in the House, to consider the matter. It must be remembered that all the criticism of the original measure came from representatives of the companies which were making excessive profits. The budget provides for very steep taxation on companies as well as on individuals, but that was not enough to raise the money needed. The Treasurer said that he wanted £4,250,000 more from companies .,his year, or £5,300,000 for a complete year, the money to be raised by a special tax to be called a war-time tax on companies. It is not a war profits tax, but a tax to be imposed in war-time to get money for carrying on the war. It is a special impost on those companies mating excessive profits, which are defined as all profits in excess of S per cent. There is no charm about the figure of 8 per cent. It was chosen because it would permit companies to put a certain amount in reserve for contingencies and still pay a reasonable dividend.
– And because it would not interfere with our internal economy.
– That is so. The committee was given a commission to consider the bill, to improve it if possible, or to suggest an alternative method by which it would be possible to raise the required amount of money from companies. We considered the matter for several days, and there was frank and full discussion without any evidence of party bias on one side or the other. At the outset, unanimity of opinion was lacking; but the committee managed to arrive at a formula on which all members could agree. The principal difficulty which presented itself to most members of the committee arose out of propaganda that has been indulged in for more than six months on behalf of companies which have been making excessive profits. A proposal was made, which some members of the committee considered might be adopted, that in lieu of this measure we should impose an additional ls. in the £1 on the ordinary rate applying to company profits. The Government has already imposed a fairly stiff company tax. which it will probably increase later if it is necessary so to do. In addition, a special heavy tax should apply, not to all companies, but to those which make excessive profits.
The Commissioner of Taxation presented certain figures to the committee, and I should like honorable members to see them. They were astounding. In some quarters, it was suggested that the tax should be imposed only for the duration of the war, but I contend that this should be considered as a continuous charge upon companies which make profits up to 200 per cent, on their capital. Admittedly, some of the instances of abnormal profits proved, on examination, to be freak illustrations. They were not a true reflection of the position, and were not proof of profiteering. Some companies had very little capital, and a big percentage of their profit was made as the result of the personal ability of the small groups of individuals who formed them. Nearly all those anomalies were presented to the committee as arising from private companies, because of the personal effect of a few individuals in making large profits upon a small capital. Having gone thoroughly into the matter, we decided to eliminate private companies from the scope of this imposition. I do not say that they should be permanently eliminated. For the time being only, they are eliminated because of the anomalies that would arise from applying the tax to a number of small groups, which may be described as “ family companies “.
But none of the anomalies which were presented to the committee as affecting private companies - we heard representations from many agents of the taxpayers - apply to public companies. We, therefore, agreed that a tax upon excessive profits should apply to public companies only. When we decided to eliminate the private companies, the question arose as to whether they should escape any additional impost, regardless of whether they made excessive profits. We agreed that they should not. Hence they have been treated as if they were partnerships, which have to pay the whole of the tax upon the whole of their profits as it relates to their personal income. Under the new legislation a private company will have to pay tax upon the whole of its profits, and not upon three-quarters of the profits as was originally provided, at the rate which would apply to shareholders in the company personally, whether or not the profits were distributed. In addition, there will be a company tax of 2s. in the £1.
– That would make a total tax of 5s. in the £1.
– It depends upon the personal rate that is applicable to them. If there are only two individuals in a company and they collect £6,000 apiece, they will pay at the rate of 8s. or 9s. in the £1, in addition to the company tax of 2s. in the £1. The company will have to pay the tax in accordance with the assessments of the individual shareholders. From that, honorable members will see that private companies are not, escaping lightly; but in adopting this system, the committee has overcome many anomalies.
The public companies will pay a tax of 2s. in the £1 upon all profits, an extra 2s. in the £1 upon money that has been placed into reserves, and a further ls. in the £1 upon profits exceeding £5,000. In an effort to kill this bill, propaganda was circulated, claiming that this proposal would allow huge monopolistic concerns to go scot-free. It was not true, because they would come under the other imposition of company tax. To meet that propaganda the committee decided to recommend a flat rate of ls. in the £1 on all companies, exempting those companies whose profits do not exceed £5,000, or the excess profits tax, whichever is the greater. This proposal has been adopted, and is contained in this legislation.
Some honorable members may ask why the committee arrived at the figure of £5,000. There is a special reason for it. That is one of the advantages to be gained from sitting around a table and considering all issues, instead of trying to shape legislation in public debate. The original intention was to levy a special tax on excessive profits. In order that banks and big monopolistic concerns with millions of capital should not escape extra taxation, we decided to impose a flat rate of ls. in the £1; but that meant that an extra burden would, be imposed upon a number of comparatively small companies. The committee therefore resolved to recommend an exemption of £5,000, which will exclude the smaller public companies from the field of this special impost. That is the whole story.
I can assure the honorable member for East Sydney (Mr. Ward) that no representative of the Labour party on the committee was so innocent that anything was put over him. We have studied the principle of taxation thoroughly, though we do not claim to be experts on the subject as he is. At any rate, we applied to the problem what intelligence we have, and nothing was put over us. I should say in fairness that no attempt was made to put anything over us. The honorable member’s criticism is that revenue from the tax will not be sufficient. Let me tell him that we shall get more from it than he thinks. The honorable member also objected that the additional impost will cause an increase of the cost of living.
– I did not say that.
– I apologize if I have misunderstood the honorable member, but that was my recollection of his remarks.
– I said that the committee set out to draft legislation to raise a certain sum of money, but it has provided no safeguards to prevent this tax from being passed on to the consumer.
– That was not a function of the committee; such a safeguard has nothing to do with this legislation. The only way in which Parliament could prevent the increase from being passed on to consumers unfairly is by an entirely different class of legislation. At present, that is the responsibility of the Prices Commissioner. If the powers vested in that official be inadequate, perhaps the honorable member will submit a motion for the appointment of a committee to investigate the position. The special committee’s recommendation will bring in £1,800,000 more than it was called upon to raise.
– Will the Treasurer make available the relevant files, so that honorable members may peruse them?
– That data is not in my possession. The matter does not come within my jurisdiction.
– It is easy to direct generalized criticism at the committee, which had a most onerous task. There was nothing in the data that the committee considered which would enable the honorable member to gauge whether this tax will be passed on to consumers. Any belief or fear that a tax will be passed on applies to any taxing measure. On the basis of that argument we should be advocating a reduction of taxation instead of an increase, on the ground that an increase will be passed on to the consumer. If we do not raise sufficient money we are criticized because big octopus companies will pay less than their fair share. If we recommend proposals that will bring in nearly £2,000,000 more than we were asked to raise, we are criticized because the proposal will increase the cost of living. I say to the honorable member for East Sydney that no precautions can be taken in a taxing measure to safeguard against the possibility envisaged by him. It is no criticism of the committee to say that members did nothing to prevent the passing on of this tax. The honorable member’s remarks were merely an instance of that ill-considered criticism, which is too frequently heard in this Parliament. I am not boasting about the work performed by the committee ; the preparation of the recommendation called for no superhuman efforts. The merits of the report may be open to criticism; but no criticism relating to the effect of the proposal upon the cost of living is justified. One large group of companies made a profit of 32 per cent.; another group, with a capital of £10,000,000, made a profit of nearly £5,000,000. How can any honorable member contend that they should be subject to the same class of taxation as ordinary companies, which make a profit of 6 per cent, or 7 per cent.?
– What is the right honorable gentleman’s opinion of a suggestion to empower the committee to make further investigations?
– It is an excellent suggestion. We should consider the advisability of placing a special tax on war profits as such.
– A committee to inquire into price fixing would serve a useful purpose.
– Yes. Committees composed of members from all parties could, with advantage, investigate and report upon much of the legislation that is introduced into this Parliament.
– Hear, hear !
– My experience was that no information was withheld from the committee. Naturally the names upon the personal assessments that we examined were not revealed to us. Even the Minister cannot obtain that information, because thedepartmental officials who deal with it are sworn to secrecy. At the same time, we had lists of companies designated A, B, and C showing the exact amount of their assessment for last year, the amount of tax that they paid, and the amount that they should pay. I have the figures. If honorable members consider that profits fromthe war should be taxed, the committee could inquire into it, although from my investigations, I believe that such a tax would not yield much revenue. But if only £1,000,000 were collected, it should go to the Treasury and not be left in the coffers of wealthy enterprises. In my opinion, a tax of 100 per cent, should be imposed on war profits.
Any bill to deal with the taxing of war profits should be vastly different from the legislation which was introduced during the last war. Nobody who has studied that act would risk his reputation by contending that the Parliament should revive it. If it is not capable of improvement, it should not be proceeded with, because it was not a just method of raising, money. If my inf ormation be correct, the United States of America imposed a tax. on war profits. Then, it reverted to legislation designed to tax all excessive profits. But why should we concentrate only on the war profiteer? Whereas the extra profits that were made during the war period were taxed, companies and individuals who fairly wallowed in profiteering before 1914 were allowed to continue to make huge profits during the war. If you had a struggling young business before tha war and got into profitmaking, they came down on it like a sledge hammer. I knew a man who started a small business during the war and when the war-time profits tax was imposed the whole of his profits was taxed at 75 per cent. In assessing war-time profits we must ascertain first what profits were made before and during the war and what relation those profits bear to the capital invested in the company. If profits have increased since the outbreak of the war, no matter how legitimately, the increase represents war profits. So long as injustices are not inflicted on struggling small concerns, not only companies but also individuals, I agree that if warprofits are to-be taxedthe imposts should apply to everybody who makes greaterprofits as the result of the war. This tax will yield considerably more revenue. If a tax were imposed only on the difference between the profits made during the war period and those made in the pre-war period,theyeildwouldnotamountto £l,000,000.Underthisbillweareto getover £7,000,000. Thatisnottosay that weshould not bring in a measure to tax war profits as such. Apart from the question of revenue, there is the psychological effect. An uneasy feeling exists in the community that some people are making excess profits out of the war. Nobody should gain by the war; all should be prepared to make sacrifices. I do not ask for bouquets for the committee; I simply say that the measure is very much improved as the resultofits work.
Mr.HUTCHINSON (Deakin) [8.47]. -There was no need for the right honorable member for Yarra (Mr. Scullin) to assure honorable members on this side that neither he nor any of his colleagues on the committee suffered from an inferiority complex due to their lack of experience, as has been suggested by the honorable member for East Sydney (Mr. Ward ). We are satisfied that all the members of the committee did their work well, and we are convinced that the representatives of the Opposition did not seek to put anything over the representatives who came from this side of the House. One point that intrigues me about this bill is that it is expected to bring in £1,800,000 more than was estimated to be collected under the original bill. The definition of capital remains substantially the same as in the first hill, and the percentage standard is still fixed at 8 per cent. All profits over and’ above S per cent, are to be taxed at 60 per cent.
– The tax on the profits in. excess of 8 per cent, is on a sliding scale.
– That is so, but the slidingscale goes up to a peak of 60 per cent, which I understand was the maximum fixed inthe earlier bill. If the defiinition of capital, the base and the peak remain the same,howcanwe increase the yield by £1,800,000 ?
Mr.Scullin. - Big companies which escaped taxation under the old bill are now tobe brought in.
– What I am unabletounderstandishowthis additional£1,800,000wasarrivedat?
– Thismeasurewillbring intothetax-fieldanumberofcompanies who were exempt from the provisions of the earlier bill.
– I am glad to have that explanation. I agree -with, the right honorable member for Yarra that a tax of this kind should be a permanent feature of our taxation system. I think I can rightly claim that I was the first member of this House to suggest the imposition of an excess profits tax. Two years ago I asked the Treasurer to consider the introduction of such a tax. During the debate on the initiation of the Department of Supply and Development, I stated that an excess profits tax was necessary in peace-time, but doubly necessary in war-time. I hope that companies will never again be permitted to earn such high profits on capital as they have earned in the last few years. I well remember that a well known Australian company made a profit over a period of three years of from 65 per cent, to over 90 per cent, on its capital. The greater part of that profit was sent overseas to a foreign, if a friendly, power. I do not think that the base of 8 per cent, should be made permanent, because industrial companies engaged in certain businesses will have to make more than 8 per cent, in normal times to attract the necessary capital. The profits of industry should never again be allowed to go into the hands of a few people as they have in past years. I do not agree that excess profits could be controlled by the tribunal method suggested by the honorable member for Barton (Mr. Evatt) during the budget debate, or by panels of accountants constantly engaged in keeping in touch with the affairs of every company in Australia. The administrative cost of schemes of that kind would be enormous. This measure will not only provide a deterrent to excessive profits, but will also afford a measure of protection for the public against exploitation. If companies charge excessive prices, with a view to making large profits, they will be roped in under this measure. I agree with the honorable member for Lilley (Mr. Jolly) and the right honorable member for Yarra (Mr. Scullin) that the system of inter-party committees to advise the Government on its legislative proposals should be extended. The prospects of forming a national government seem very remote, and if, as the result of the work of committees of the kind suggested, measures are passed through the Parliament more expeditiously the people outside will be convinced that this great democratic institution is working to the best of its ability.
– in reply - In closing this debate, I take the opportunity to express my personal appreciation of the work of the committee formed to deal with this very complicated subject. It is not desirable that I should single out any particular member of the committee - every member of it did his work conscientiously, earnestly, and to the best of his ability - but I think I would be lacking in my duty if I did not pay a special compliment to the work of the right honorable member for Yarra (Mr. Scullin), who brought to that committee a vast knowledge of the subject. The right honorable gentleman gave of his best to solve the difficult problems which the committee had to face, and much of the success which the committee has achieved was due to his efforts. The committee was given all the information and data available in the department that could be disclosed without a breach of the secrecy provisions of the taxation laws. Much misunderstanding exists in connexion with this measure. On the one hand, honorable members have said that the large companies will not be called upon to pay their just share of taxation; on the other hand, honorable members have contended that small public companies and proprietary companies will be overtaxed. The committee had before it all the statistical information available in the department. I think that that information dissipated many of the false ideas some of us had previously held. I think it is only fair to mention that from 35 of the largest companies which our critics have stated would dodge this tax, we will be able to obtain, if this bill be passed, approximately £1,700,000 on the graduated scale that we have adopted. Had a flat rate of ls. in the £1 been imposed we would have received from them only £500,000.
Then again we have what are known as central office returns available in Melbourne which relate to 1,097 big companies conducting interstate operations. A test assessment of these companies carried out conscientiously in accordance with the provisions of this bill yielded 67 per cent, of the revenue that we estimated would come from this source. That also is an effective reply to critics. The honorable member for Yarra (Mr. Scullin) has given the House a concise, yet complete, analysis of the views of the committee. Critics, both inside and outside of this Parliament, and also writers in certain newspapers, have contended that it would have been preferable to fix a pre-war standard of profits and to tax the companies in respect of all profits in excess of that percentage. I wish to make it clear that the Government’s intention in introducing this measure was to impose what might be called a super tax on all companies which made excess profits during the war, but not necessarily out of the war. Honorable members will, I am sure, appreciate the distinction. The Government desired to obtain revenue amounting to approximately £4,250,000 from this source. Had we accepted the proposal to fix a rate of tax on some pre-war basis of profit the amount of revenue obtained from this source would almost certainly have been far less than the amount the Government expects to receive under the terms of this bill. An investigation of the position of 35 of the biggest companies in Australia, which certain critics argued would not become liable to tax under this bill, revealed, that compared with a certain pre-war period, their war-time operations showed a decline of £2,002,000. The amount of revenue which the Government expects to obtain from these companies under the provisions of this bill as the result of their activities during the war period up to the 30th June, 1940, will be greater than the amount that could have been obtained had a pre-war basis of profit been used for assessment purposes. According to departmental calculations an assessment on the basis of prewar operations would have totalled £347,281, whereas their assessment under the provisions of this bill will total £1,249,241. Surely these figures must convince honorable members that the basis of the bill will prove more profitable to the Government than the proposed pre-war basis of profit.
The honorable member for East Sydney stated that, in the course of my second-reading speech on the bill, I had said that the dividends of big companies would not be affected as the result of the Government imposing upon them additional taxation amounting to £1,S00,000. As honorable members know, I read my speech, and my statement on this subject was -
It is considered that the tax will not have a serious effect upon dividends, except in those cases where dividends are paid at a particularly high rate. In such cases, it is anticipated that it will be possible for the companies to pay reduced, but still high rates of dividend, and the recipient will not be called upon to bear an unreasonable burden, having regard to the circumstances under which the tax is imposed.
The large majority of shareholders will not be affected by this tax as their money is invested in companies which, although regarded as sound, do not, as a general rule, make profits in excess of 8 per cent, of the capital employed.
It would be ridiculous to say that the dividend-paying capacity of companies which were called upon to pay an additional amount of £1,800,000 in taxation would not be impaired. But I am of the opinion that these companies will still be able to pay a fair rate of dividend to their shareholders. I can say without reservation that the officials of the Taxation Department and also the honorable members of the committee which examined these proposals gave careful thought to the probable repercussions of the measure, and they formed the opinion that, in all the circumstances, the rates of tax proposed were fair and reasonable.
No one can say that the provisions of this bill will remain unaltered, for we do not know what the future holds for us, but I declare definitely that such conscientious and faithful consideration has been given to the measure that honorable members may quite safely vote for it.
– Would the Treasurer be in favour of the insertion in our income-tax legislation of a provision that information furnished by big companies may be made public?
– I certainly would not consent to such’ an amendment.
– The honorable gentleman’s “ bosses “ would not permit him to do so.
– “ Bosses “ have nothing to do with it. If the Government became a party to the publication of information furnished under a bond of secrecy it could say farewell to any prospect of obtaining substantial subscriptions to war loans from company sources.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2’ (Parts).
.- I do not suppose that I shall be permitted, in discussing this clause, to refer at any length to the incidence of this tax or. to the merits of the bill as an instrument for the obtaining of revenue, by taxation, from company investments and othersources. The measure was doubtless considered carefully by the committee of honorable members of both the ministerial and opposition parties, and its report was tabled in the House by the Treasurer (Mr. Fadden).
The CHAIRMAN (Mr. Prowse).Will the honorable member intimate in what way he proposes to connect his remarks with the clause before the committee, which is, in reality, simply an index to the bill?
– As this clause may be described as the skeleton of the bill I thought it would be appropriate for me, at this stage, to make some general observations on the measure. I make it clear that whilst I have no quarrel with the members of the committee which considered the bill, I have considerable objection to the manner in which the Treasurer has treated honorable members in connexion with it. The members of the committee; especially the members of my own party who devoted a deal of time and considerabletalent totheir work, may be congratulated upon the results they have achieved; but the Treasurer has. treated us very scurvily.
– A bill to provide for a tax on excess profits was introducedinto this House last May.
– But this bill has been available to honorable members’ for only a few hours. As the Treasurer has seen” fit to challenge the justice of my observations, I feel impelled to say that had it not been for the courageous manner in which the honorable member for East Sydney (Mr. Ward.) plunged into this debate, honorable members would have had very little information, indeed on which to base their votes..
– The honorable member has not yet connected his remarks with the clause.
– He has indicated that he does not know much about the bill.
– I consider that what I am saying, is distinctly relevant to “ PartIII. - Liability to ‘ Taxation “, which fs referred to in the clause. However, I shall conclude my observations with a single sentence. Whilst we are greatly indebted to the honorable member for East Sydney for having obliged the Government to make available certain information in connexion with the bill, we arc not under any debt, to the Treasurer for attempting to force the measure through the House as he is doing.
Clause agreed to..
Clause 3 (Definitions’).
.- The definition of “taxable profits” states - “ taxable profit “ means the. amount remaining after, deducting from the taxable income of the accounting period as assessed under the Income Tax Assessment Act -
What does that mean?
Mr.Fadden. -It is not to be considered, as undistributed profit.
– Is it liable to taxation?
– As I understand the definition, it means that the amount specified is deducted and is not liable to taxation.
– That is for the purpose of defining distributable profit in order to assess the tax on undistributed profit.
– I fail to understand the reason for the following words : -
So much of any dividend received by a company in respect of its shareholdings in any other company as is included in the taxable income- of that first-mentioned company of the accounting period.
– That is because the other company is taxed.
– I do not agree with that practice. It is unfair. In assessing taxes, whether of individuals or companies, the correct procedure is to take into account the actual income, no matter from, what quarter it is received.
– That does not apply to companies.
– The definition refers distinctly to any company which has invested capital in another company.
– The dividends and the capital are excluded for the purpose of finding the taxable income.
– If one company has invested some of its funds in a second company, which declares a dividend, is the first company liable to pay taxes on the dividend from its investment?
– The honorable member for Reid (Mr. Morgan), who is a learned member of the legal profession, advises me that, when an individual receives income from dividends in a company, he is liable to pay taxes on those dividends although a tax on them has already been paid by the company.
– That depends upon where the individual lives. If he resides in Queensland, he is not required to pay tax on the dividends, because they are taken into account as a rebate. The position is different in New South Wales.
– I am anxious to know about the position in New South Wales because that is where the Broken Hill Proprietary Company Limited is situated. That institution has large shareholdings in many other com panies. The Treasurer would be well advised to read the report of the speech made a few days ago by the honorable member for Kennedy (Mr. Riordan), who indicated some of the ramifications of the large profit-making concerns, including the Broken Hill Proprietary Company Limited. For instance, that company holds all of the ordinary shares in Australian Iron and Steel Limited. I have a diagram here which charts all of the connexions of the Broken Hil] Proprietary Company Limited with subsidiary firms.
The honorable member is not connecting his remarks with the clause before the committee.
– The Broken Hill Proprietary Company Limited will not be required to pay taxes upon the dividends which it draws from all of these “ pup “ companies. A large proportion of its income is derived from such investments. Returns from those dividends actually constitute income, which swells the profits distributed to shareholders of the Broken Hill Proprietary Company Limited and, as such, should be liable to taxation. The “ pup “ companies probably will not be taxed at such a high rate as will the Broken Hill Proprietary Company Limited.
– That cannot be so, because there is a flat rate for ordinary taxes. The sliding scale relates to wartime profits and if a company’s dividends are excluded, that is to its disadvantage, because ‘ the capital which earns those dividends is then excluded from the definition of “ capital “.
– I am not prepared to accept the honorable gentleman’s word for that. He said in his speech during the second-reading debate that the purpose of the bill was to get at the big companies and to exclude the small companies from heavy taxation.
– That is so.
– The Broken Hill Proprietary Company Limited has investments spread over a wide field.
– But subsidiary private companies are not excluded from the provisions of the bill.
– That depends upon the definition of subsidiary private companies. “What is it?
– I am prepared to adopt the definition given’ in Webster’s International Dictionary, not that given by the honorable member.
– The honorable gentleman has evaded my question. I understand that a subsidiary company is one in which a preponderance of ordinary shares is held by a parent company, and which has been established for the purpose of carrying on some branch of the major company’s operations. Possibly the Broken Hill Proprietary Company Limited has invested money in firms which could not, by any stretch of the imagination, be considered to be directly subsidiary companies. Those that are not classed as subsidiary companies will be liable to pay taxes at a lower rate than that levied on the Broken Hill Proprietary Company Limited. That company has the option of deciding whether profits from subsidiary companies shall be taxable when they are received by the parent company, or at the actual source. It is obvious that the company will choose the alternative, which will enable the payment of the lower rate of tax. If the Treasurer has any doubt about the truth of that statement he need only wait to see what action the Broken Hill Proprietary Company Limited will take. I believe that it will decide to have the profits of subsidiary companies taxed before they ave passed on to it. An opening exists there for evasion of taxes. The Minister should reconsider this provision and take action to make it impossible for any company - the Broken Hill Proprietary Company Limited will not be the only one affected - to evade taxation by means of manipulating investments. This is a constructive suggestion and I hope that the Treasurer will put it into effect.
.- The point raised by the honorable member for East Sydney (Mr. Ward) is a proper one for discussion during the committee stage. It was considered by the special committee which dealt with the Government’s proposals for the special war-time company profits tax. As a matter of fact, what is proposed in this bill was the subject of a complaint made by the agents of the taxpayers to the effect that we were not allowing them to use the capital that was invested in other companies in order to make their capital structure appear bigger, and therefore their profits less, so as to lower the amount of the excess profits tax levied upon them. Under ordinary taxation methods, a company may invest some of its funds in another company which is required to pay the company rate of tax. When the dividends from the subsidiary concern are paid back, they are not taxed again, for the reason that that would amount to double taxation. All company taxation is levied at a flat rate. In ordinary circumstances such dividends are eliminated from the taxable income of the parent concern, and in administering this class of legislation the Taxation Department eliminates also the amount of capital that is invested in other companies. The agents of the taxpayers asked that the capital should ; be aggregated, so that the resultant larger amount would make the percentage of their excess profits less, this bringing some of them below 8 per cent., and making them nontaxable.
– -Does the right honorable gentleman say that both a firm making a profit of £20,000 and a firm making a profit of £2,000,000 are subject to the same rate of tax?
– Yes, it is a flat rate; all of them pay 2s. in the £1 on all profits. Under this measure, the rate of tax on all profits over 8 per cent, is very high; consequently, the higher they can make their capital, the less will be the percentage of profit. The capital invested in another company will be eliminated, and naturally the profit on that capital will be eliminated also, for the purpose of this tax. If those profits were included, the capital also would have to be included. This hits them much harder.
– When the right honorable gentleman referred to agents for the taxpayers, did he have in mind representatives of the Taxpayers Association ?
– Special representatives, legal men, and taxation experts from all over the country.
– Representing big interests?
– Yes. They argued against this proposition, and wanted to have it eliminated ; because, if the profits were allowed to be included, the capital also would have to be included, with the result that the capital would be built up, and the rate of profit would be correspondingly less. That was not done.
Clause agreed to.
Clauses 4 to 23 agreed to.
Clause 24 (Ascertainment of capital).
.- Having heard the very lucid exposition of the right honorable member for Yarra (Mr. Scullin), my mind is quite clear in regard to the situation. I am sorry that the Treasurer (Mr. Fadden) was unable to make an equally lucid explanation.
Clause agreed to.
Clauses 25 to 37 agreed to.
Title agreed to.
Bill reported without amendment; report adopted.
Motion (by Mr. Fadden) - by leave’ - proposed -
That the bill be now rend n third time.
– It would be appropriate if, at this stage, the Treasurer (Mr. Fadden) were to declare his view in regard to the suggestion that the special committee which dealt with this matter might be permitted to continue its work. It could watch such developments as might provide an opportunity for obtaining even a larger amount of revenue from excess war profits. I am keenly in favour of the suggestion, because I believe it to be the duty of the Opposition to watch the interests of the lower and middle income groups and endeavour to obtain from some other source any revenue lost by reason of relief given to those taxpayers. The committee has shown itself competent to examine the matter and to follow it through various stages. As time moves on, circumstances may arise which will enable the activities of these large companies to be watched and the demand of the public in regard tq profiteering to be met. The Treasurer might well voice the view of the Government on this important matter. If he did so, the public would be more satisfied and all parties in this House would know that every practical step was being taken to meet the problem of high taxation and of raising the large amount of revenue needed to prosecute the war to a successful conclusion.
– in reply. - I am deeply impressed with the views expressed during the passage of this measure. The success which attended the deliberations of the special committee emphasizes the wisdom of having similar committees set up to consider from a national stand-point, and without the intrusion of party views, contentious matters which may be brought before this House from time to time.Consequently, the experience I have gained in the handling of this measure will be placed before Cabinet at a very early date.
Question resolved in the affirmative.
Bill read a third time.
In Committee of Ways and Means:
.. - I move -
That in respect of the amount by which the taxable profit of a company (other than a company to which paragraph,/) or 4 of this resolution applies! exceeds the percentage standard -
July, One thousand nine hundred and forty and for each financial year thereafter.
The first paragraph of the motion relates to the imposition of a tax on the amount by which the taxable profit of a company exceeds the percentage standard. The percentage standard would ordinarily be an amount equal to 8 per cent, of the capital employed, but in certain circumstances the percentage may be increased by a board of referees, or by regulation following upon a recommendation by such a board.
Paragraph 2 of the motion sets out the rates of tax to be applied in respect of companies other than those referred to in paragraphs 3 and 4.
Honorable members will note that the rate of tax proposed is a graduated one, commencing at 4 per cent, on the first 1 per cent, of capital employed by which the taxable profit exceeds the percentage standard. The rate applicable to the second 1 per cent, on capital employed by which the taxable profit exceeds the percentage standard, is 8 per cent. The rate increases progressively, in steps of 4 per cent, on each 1 per cent, of capital by which the taxable profit exceeds the percentage standard, until the maximum rate of 60 per cent, is reached.. The maximum rate is reached when the taxable profit is more than 22 per cent, of the capital employed. This is the effect of the rates specified in the resolution as. applicable to companies which are not primary producers.
The table contained in the motion sets out, in the simplest and shortest form-, the rates of tax applicable to companies whose excess of taxable profit over the percentage standard comprises more than 1 per cent, of the capital employed. The rates of tax upon all percentages except the last, have been expressed in the form of an average rate. This is the rate which appears in the third column of the table.
In order more clearly to illustrate the point, let it be. assumed that the excess of the taxable profit over tha percentage standard exceeds 2 per cent, of the capital employed,but is not greater than 3 per cent. The average rate for the first 2 per cent, is shown as 6 per cent, in the third column of the table.. This represents the average of 4 per cent, which applies to the first 1 per cent., and of 8 per cent, which applies to the second 1 per cent. This procedure has been followed down through the succeeding grades. It would, be difficult to find a more suitable and simple method of expression.
Paragraph. 3 of the motion refers to the rate of tax to be applied to the amount by which the taxable profit of a company which is a primary producer exceeds the percentage standard. The rate to be applied in such a case is that which would be applicable-, to the amount by which the average: taxable profit of the: accounting- period! and the four preceding accounting periods exceeds the percentage standard’.
Paragraph 4 of the motion relates totherate of tax which may be applied in the case of. a. company the taxableincome of: which includes, a net premium received in respect of a lease.. The. effect ofthispararaph is that, if the company so elects the net premium received shall, for the purpose only of ascertaining the rateoftax,hespreadover the term of the lease. The rate of tax applicable would therefore be that which would apply if the taxable prpfit included, in respect of the premium, only that proportion attributable to the accounting period. This method is consistent, with the principle adopted for income tax purposes.
Question resolved in the affirmative.
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 passed through all stages without amendment or debate.
– I move -
That the bill be now read a second time.
This is a non-contentious measure of only three clauses, and has been introduced to give effect to the promise of the Treasurer (Mr. Fadden), during his secondreading speech on the sales tax, that wine should be exempt from the payment of sales tax. As a matter of fact, wine has been exempt from sales tax since 1931. The honorable memlber for Capricornia (Mr. Forde) was rather interested in the matter on that occasion. The wine industry has suffered many vicissitudes, including those associated with overproduction. In its early stages it suffered from a lack of export markets, but eventually a sound export trade was’ established. That has- now been almost wholly wiped’ out by our. inability to get shipping space’. The Government was loth to- place- upon the industry the further burden of the sales tax; seeing that it had lost an export market which formerly absorbed 4,000,000’ gallons- a year. The home market is the only substantial one now available, and it is only to be expected that that’ market will be glutted. Therefore, it has been- decided to raise by other means the revenue which would have been obtained from a salestax. For this purpose, it is proposed to amend the Wine
Export Bounty Act to provide that only 2s. 6d. a gallon of the 6s. 6d. a gallon excise levied on fortified spirit shall be paid into the -bounty trust fund, instead of 5s. a gallon as at present, the difference to go into revenue. The export bounty on wine is approximately ls. a gallon, and the money with which it is paid is raised in fact, by an excise duty of 6s. 6d. a gallon on proof spirit. In 1940, bounty amounting to £146,591 was paid on fortified wines exported from Australia. Owing to the loss of the overseas market, bounty payments this year have been reduced to £65,000. For obvious reasons, exports to the United Kingdom cannot be maintained at the 1940 level. It is estimated that about £220,000 will be paid into the trust account’ for the year ending June, 1941. Because of the loss of the overseas market, the trust account from which the bounty is paid will be considerably increased, and the Government considered that the industry should be permitted to contribute its share of the extra revenue out of this fund, rather than by a sales tax on wine, which was expected to yield £100,000 a year. Therefore, the payment of 2s. 6d. a gallon into the trust account, instead of 5s., will be sufficient to provide the bounty on the restricted export, while still leaving £100,000 as a contribution to revenue. This is a temporary arrangement only, and when we revert to normal conditions, it will be reviewed. As this is an attempt to help the industry, rather than hinder it, I ask honorable members to give the bill a speedy passage.
.- The Opposition supports this measure. I discussed it with the Treasurer (Mr. Fadden) recently, in company with representatives of the wine trade who visited Canberra. “When I was Minister for Trade and Customs, I devoted a good deal of time to studying .the needs of the wine industry, and I, as Minister, was responsible for the passing of the Wine Export Bounty Act. It was first intended to impose a sales tax of 5 per cent, on wine, estimated to yield £100,000 a year. If the industry were in a flourishing condition, no one would object to that proposal. However, owing to the loss of the overseas market, the industry is facing one of the worst periods in its history. The shipping problem is much more acute now than it was during the last war, and wine stands low on the priority list, so that it is very unlikely that shipping space will be available for the export of wine. If the weekly sinkings of ships continue at the present rate the situation will probably become worse, and there must be a serious glut of wine on the Australian market. When an industry is experiencing difficulty of this kind, it is the duty of the Government to assist it in every way possible. The trust account which was established under the Wine Export Bounty Act, is now £123,000 in credit. A total of £217,000 was paid into it during the financial year ended the 30th June, 1940. Representatives of the wine industry have made helpful suggestions to the Treasurer for overcoming the difficulties associated with the proposal to place a sales tax on wine, and, to the credit of the Treasurer and the Minister for Trade and Customs (Mr. Harrison) be it said, they have sympathetically considered the representations made to them. Though the people who came here were the representatives of the wine-makers, they spoke also for 5,000 grape-growers. They came here after the Federal Viticultural Council had considered the matter, and after the cooperative and proprietary companies had formulated their views and had expressed them at that council. This is a small man’s industry. I am told that in the irrigation districts, some of the areas on which grapes are grown do not exceed three acres.
– There are not too many of them.
– I have visited the grape-growing districts of South. Australia, and I understand that some of the areas along the Murray are as small as three acres; if that is not so, I stand corrected. The point I am making is that we should do nothing to injure an industry upon which depends the livelihood of men who are operating in a small way. A great many returned soldiers were encouraged after the last war to take up grape-growing blocks along the Murray. They grow the grapes and sell them to the winemakers. In the depths of the depression, when the sales tax was first introduced, a tax of 2i per cent, was placed on wine, and later it was intended to increase the rate to 5 per cent. Then the. whole matter was investigated, and eventually the sales tax on wine was abolished, because it was realized that certain sections of the industry would be unfairly penalized by its retention. As has been pointed out on various occasions, there is no sales tax on beer, so why should there be on wine?
At the present time, the Government exacts nearly £750,000 a year from the wine industry in the form of excise, and from sales tax on brandy. A sales tax would undoubtedly penalize at the retail end of the market the large trade in high grade bottled wine that has been established by a generation of effort and at great cost, through the increasing cost of sa.les to the consumer ; and on the other hand it would encourage the sale of cheap immature bulk wines because of their lower cost. The proposed incidence of sales tax would mean that on bulk wine sold at 6s. 6d. a gallon to the retailer, the Government would get only .4d. a gallon, whilst on the proprietary bottlings of mature wine the consumer will have to pay a tax of from lOd. to ls. 7d. a gallon.
The trade has been very reasonable in suggesting that the Government should abandon the sales tax on wine and recoup itself from the Wine Export Encouragement Trust Account. Should the necessity arise at a later date through an improvement of the export trade beyond present anticipations, adjustments could be considered. Exports of wine since the 1st January, 1940, compared with the corresponding period in 1939, have seriously declined. The export position and that of the Wine Export and Encouragement Trust Account for 1939 and 1940 may be shown as follows : -
The decreases are 2,569,000 gallons and £128,000 respectively. As time goes on, no doubt exports will “further decline, and that will mean a glut of wine on the Australian market.
The Australian wine industry is faced with the fact that South Africa is experiencing no difficulty in shipping its wines and brandies to England, and as a result, Australian wineries are losing their market and goodwill, which required years of expensive advertising to establish.
– As the bulk of the wine produced in the Commonwealth comes from the electorate of Wakefield, I am keenly interested in this legislation. The Ministry, in my opinion, has treated the industry most sympathetically during this period of difficulty since the war began. The war has disclosed its export trade and recognizing that fact, the Government has done all in its power to get for it shipping space and reduce the difficulties of wine-growers. Because of the low position of this commodity in the shipping order of priority the Government ha,s not been able to do so much as it might desire, but I welcome the valuable help that is being given by this bill.
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.
Debate resumed from the 11th December (vide page S47), on motion by Mr. Fadden -
That the hill be now read a second time.
.- I have carefully examined the bill, and see no reason to oppose it. It is designed to afford greater protection to holders of Commonwealth securities. It is an offence for any person to make or have in his possession without the authority of the Treasurer, any copy of an Australian bank note or any writing, engraving, print &c, resembling an Australian note. The defacing of such notes and their use in connexion with advertisements, are also prohibited. It is only reasonable to grant similar protection to treasury bills. treasury bonds and war savings certificates, which are negotiable bearer securities.
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.
– I move -
That the bill be now read a second time.
The Public Service of the Northern Territory is distinct from the Commonwealth Public Service. . Officers are appointed under the Public Service Ordinance 1928- 1939 of the territory. The conditions of service and scales of salary, however, are largely based on those prevailing in the Commonwealth. There are no entrance examinations for appointment, the practice being to select the best candidate offering. The Minister is the authority to make appointments. There are about 150 officers in the territory service.
Representations have been made from time to time as to the need for allowing officers of the territory service the right of entry or transfer to Commonwealth Public Service positions in the States instead of remaining indefinitely in the territory. The Payne Committee, which in 1 93’7 investigated certain matters connected with the Northern Territory, supported that suggestion. The Commonwealth Public Service Board was requested to investigate the staffing of the territorial service and to report as to whether some scheme could be evolved to improve the present position. After investigation, the board intimated that it accepted the view that the public interest would be best served by bringing the Northern Territory departments, with certain exceptions, under the Commonwealth Public Service Act, and subject to legal considerations, agreed in principle to the appointment to the Commonwealth Public Service under Section 42 .of the Commonwealth Public Service Act of the permanent officers at present in the Northern Territory .service. The exceptions referred to are the officers of the Education, Police and Prisons Branches of the Northern Territory service, who have no counterpart in the Commonwealth Service.
It is proposed to appoint between forty and fifty officers to the Commonwealth Service, and future appointments to the transferred departments will be made under the Commonwealth Public Service Act. In addition to clerks and typists, it is proposed to transfer permanent officers of the legal, mining, lands, survey and drafting staffs.
To enable the transfer to be effected it is necessary, in the opinion of the legal authorities, to repeal sub-section ‘3 of section 4 of the Northern Territory (Administration) Act 1910 and to make provision in the Commonwealth Public. Service Act for the Administrator of the Northern Territory to be given the powers of <& chief officer under that act.
Sub-section 3 reads -
The Minister may appoint or may delegate to the Administrator to appoint, such officers as are necessary for the Administration of Northern Territory Acceptance Act or of this act for the proper government of the Territory.
The effect of the repeal of this subsection is to give to the Public Service Board, instead of to the Minister,, power to appoint officers in the Northern Territory. As members .are aware, all appointments to the Commonwealth Public Service are made by the Public Service Board. The transfer of the Northern Territory service, with the exception of the branches mentioned, to the Commonwealth service will greatly increase the efficiency of the Northern Territory administration. With the possible exception of some of the older men now in the service who! could not be readily absorbed, officers will not be required to work indefinitely in the tropics, but will have opportunities of transfer to the south and will be replaced by .experienced officers from the Commonwealth Service or by personnel recruited by the methods provided in the Commonwealth Public Service Act.
– After listening to the speech of the Assistant Minister (Mr. Collins) and discussing the provisions of this bill with officers of the Department of the Interior, I am satisfied that it confers a distinct benefit on the officials of the Northern Territory service. It proposes to bring them under the provisions of the Commonwealth Public Service Act, and will make possible the transfer of territorial officers to positions in the Commonwealth Public Service. Promising officers in the Northern Territory service have been compelled to remain at their posts without any prospects of promotion to higher positions in the south. They have had to endure the rigours of a trying climate. I have met a number of them and have been impressed by their high standard of efficiency. I am glad that they are now to be given the same privileges as are enjoyed by public servants generally. One satisfactory feature of this bill is that in future we may have in the Department of the Interior officers who have a first-hand knowledge of the conditions in the territory. Tried and ambitious young men in the territory should be given every opportunity to transfer to higher positions in the south. This new arrangement will also result in many young and promising officers of the Commonwealth Public Service being attracted to the Northern Territory service. This bill has everything to commend it.
.- I express my appreciation to the Assistant Minister (Mr. Collins) for having introduced this bill. It is, I believe, the first bill which he has introduced since his elevation to the Ministry. The bill should receive the support of honorable members because it remedies a disability suffered by the officials of the Northern Territory administration for too long. In the absence on active service of the honorable member for the Northern Territory (Mr. Blain), I have undertaken, with the assistance of the honorable member for Bendigo (Mr. Rankin), to look after the interests of his electorate. Two years ago, as a member of the Public Works Committee, I had the pleasure of visiting Darwin in the company of yourself, Mr.
Speaker, and the honorable member for Bendigo. On that occasion the members of the committee met a number of officers of the Northern Territory service, and had an opportunity to appreciate their ability. At that time there were about 150 officers in the Northern Territory service, all in semi-isolation and in a most enervating climate. They will welcome this opportunity to exchange with officers from the south. A change of climate will be of inestimable benefit to the health of themselves, their wives and children. Furthermore, it will be of great advantage to have in Canberra the services of officers with a first-hand knowledge of the problems and difficulties of the territory. The qualifications of officers with whom we came in contact in Darwin are such as to make them eminently suitable for transfer to positions in the Commonwealth Public Service. I trust that this bill represents the first step towards the ultimate merging of the two services. At present appointments to the Northern Territory service are made on the approval of the Minister by selection, whereas Commonwealth public servants are appointed in order of priority after passing a competitive examination. The latter system should he adopted in connexion with appointments to the Northern Territory service, so that there will be a uniform educational standard for the two services. This bill gives effect to one of the recommendations of the Payne Committee) which presented a very interesting and remarkable report a few years ago. The reform proposed in this bill has been persistently advocated by the honorable member for the Northern Territory. I am glad that his efforts have at last borne fruit.
.- I am glad that the Government has seen fit to introduce this bill. I know that the Assistant Minister (Mr. Collins) has travelled extensively throughout the territory and is keenly aware of the difficulties experienced by its people. I was pleased to be able to proffer my services in the interests of the Northern Territory,, in conjunction with the honorable member for Moreton (Mr. Francis) during the absence on active service of the honorable member representing that constituency (Mr. Blain). I have but a slight acquaintance with the territory and its disabilities, although I have travelled over a good deal of its vast area. During my brief stay in Darwin I was impressed by the excellent type of men in the Northern Territory service who are doing a splendid job in difficult circumstances. They feel, however, that they are in dead-end jobs, and will welcome the opportunity to get back to a temperate climate. I believe that this system of reciprocity should be extended to the services in the other territories of the Commonwealth. In the comparatively near future we may he responsible for much larger areas than we hold at present, and we should commence now to lay the foundations of a tropical service. When a young man employed in one of the outposts of civilization in Australia or its territories shows sufficient promise, he should be given an opportunity for promotion to the higher positions in some other branch of the Commonwealth Service. 1 trust that in the not distant future the efforts of the honorable member for the Northern Territory to have a tropical service established in Australia will be rewarded.
– I express my appreciation to the Minister for having brought this bill before the House. For many years I have from time to time made overtures to the Government to bring in a bill of this kind. It is pleasing to know that this hill has been introduced by the Assistant Minister (Mr. Collins), because the honorable gentleman has taken the trouble to visit the territory and acquaint himself at first hand with conditions there. I support the suggestion that a tropical service should be established. Such a service should be recruited to carry out administrative work in Papua, New Guinea, the Admiralty Islands, and Manus Island. Officers engaged in1 these lonely outposts would be glad of the opportunity to exchange with those in the Northern Territory. A brilliant doctor has for many years been stationed at Manus Island, off the coast of New Guinea. He should be given an opportunity to transfer to some other station where his services could be much more profitably utilized. This bill will be welcomed by, not only officers in the Northern Territory service, but also those in the Commonwealth Public Service. Officers in the territory will welcome an opportunity to cool off in Canberra, just as those living in this salubrious city will be glad of an opportunity to warm up in Darwin.
.- Whilst I do not intend to oppose this measure, I regret its introduction. For years I have urged the establishment of a territorial service to embrace the whole of the territories of the Commonwealth, including Papua, New Guinea, Norfolk Island, Nauru and Ocean Island. Officers resident in those territories are employed on almost the same kind of work as those employed in Darwin. Recently an advertisement appeared in the press calling for applications from qualified persons for appointment as superintendent of agriculture. The princely salary of £500 per annum was offered ! No highly-qualified man would be attracted by such low pay. In the New Guinea service we have a Department of Agriculture which I regard as almost as good as any in the world, and a medical service composed of men who have been specially trained in tropical medicine and hygiene. The services of these officers should be made available in other territories of the Commonwealth where there is scope for their skill. Officers of the New Guinea service are granted three months’ leave every two years and long-service leave after six years’ service as some compensation for having worked in tropical areas. Similar conditions should apply to all our officers who have to work in tropical and sub-tropical areas. I consider that we should establish a territorial service similar to the Royal Colonial Service, and that the members of it should be granted superannuation rights. It appears to me that the policy’ underlying the bill before us is not progressive. A good deal of moonshine has been talked about the transference of officers of the Northern Territory to other parts of the Commonwealth. What we really need is a proper territorial service. In 1926, when I was Minister in charge of External Territories, a scheme was inaugurated under which young men of from 20 to 24 years of age were selected and enrolled in a cadet service.
– “Why are not natives trained in the work?
– They are being trained and are rendering excellent service. The young men to whom I am referring were chosen because of their qualities of leadership and their educational attainments. I cannot see why, after such men are trained, their services should not be made available for work in other territories. Recently, a man was selected in Melbourne to do anthropological work in the Northern Territory. Why was not a territorial officer chosen for this work? We have many well-qualified officers serving in our different territories, and it is high time that the separate services were coordinated under a unified control so that we could make the best use of the medical, agricultural and clerical experience we have at our disposal. I trust that it will not be long before this Government gives effect to promises made but not fulfilled by previous governments to establish a well-organized territorial service.
– in reply - It has been pleasing to me to hear honorable members speak so highly of the sympathetic spirit in which the affairs of the Northern Territory are being administered, especially in relation to its Public Service. Most of the honorable members who have participated in this debate have travelled in the Northern Territory, and they know something of the oppressive climatic conditions that are experienced there at some periods of the year. I also have travelled in the Northern Territory and Central Australia and I know from personal experience that the views expressed by honorable members are sound. I wish to pay a tribute to the work of the Minister for the Interior (Senator Foll) in connexion with this measure, for he principally deserves the credit for its introduction.
I sympathize with the views expressed by the honorable member for Parkes (Sir Charles Marr) regarding the desirability of establishing a wellorganized territorial service. The step which it is now proposed to take will have a helpful influence on any proposal for the adoption of such a scheme as the honorable gentleman has advocated. I am sure that the Government will give full consideration to his views.
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.
– I move -
That the bill be now read a second time.
This measure is necessary in connexion with the proposal to bring certain branches of the Northern Territory Public Service under the Commonwealth Public Service Act. At present, officers are under the control of the Administrator for the Northern Territory, and it is necessary that that control be continued. It is proposed, therefore, to amend the Commonwealth Public Service Act to provide that the Administrator for the Northern Territory shall have the powers, authority and duties of a chief officer under the Public Service Act.
– I take this opportunity to bring under the notice of the Government what I regard as a rather serious injustice that has been done, and is still being done, to a few persons who have rendered efficient service over a long period of years. I refer to about five officers who, after having given good service to the Federal Capital Commission in the Canberra district until the abandonment of that form of administration, were subsequently permitted to enter the Commonwealth Public Service. Some of those men also had years of service with certain State governments. Unfortunately when they were transferred to the Commonwealth Public Service, they were not allowed to take into account tlie complete period of their State public service, or their service with the Federal. Capital Commission, and this seriously affected both their seniority and the conditions under which they were permitted to become contributors to the Commonwealth Superannuation Fund. As only about five persons are affected, I appeal to the Government to give sympathetic consideration to their claims. I hope that it may be practicable to amend this bill to meet their circumstances. If not, I trust that other steps will be taken at an early date to do so.
– I associate with the individuals referred to by the honorable member for Gippsland (Mr. Paterson) certain former officers of the Federal Capital Commission who were transferred to the Northern Territory years ago. These individuals have served the Commonwealth faithfully in what is regarded as a temporary capacity, although they have been continuously employed for many years. Some of them have not been permitted to enter the Commonwealth Public Service, and have been debarred from the privilege of contributing to the Commonwealth Superannuation Fund for a pension upon retirement.
I also have in mind other persons who have been employed in the Australian Capital Territory for many years in what is described as a temporary capacity, but is really a permanent occupation. Some of these men have been employed for about 20 years, and others have been working continuously for the Commonwealth for the whole of the time that I have been a member of this Parliament. Yet, they are not entitled to long-service leave, and are only granted annual leave on a restricted basis. In Western Australia persons who have served the State continuously for ten years are granted longservice leave whether they are members of the Public Service or not. That practice should be adopted in connexion with what we erroneously call temporary employees of the Commonwealth Government. Some of the men I have in mind are engaged in what may be described as the quasi-economic phases of our activities as distinct from the purely civil administration. I know also of gardener’s who have been employed by the Commonwealth for long periods and yet are subject to dismissal at short notice. They, too, are entitled only to restricted holiday leave, and they have no long-service leave or superannuation privileges. Certain attendants at the Federal Members’ rooms in Melbourne are in the same category. In these circumstances I ask the Assistant Minister to give me an assurance that the Government will give some consideration to its duty to employees who, in a temporary capacity or otherwise, have served the Commonwealth continuously and faithfully. I believe that all employees of the Commonwealth should be granted similar privileges.
– I direct attention to the position of a large number of returned soldiers employed in the postal service as temporary linemen. Most of them have served the department for about 20 years without having obtained permanent appointments.
– That anomaly should be rectified.
– Two years ago, when I was PostmasterGeneral, I had 225 of them placed on the list of permanent employees at Christmas time. Many others should have been appointed, but there were difficulties in the way of doing that which I could not overcome at the time. Whilst I have no objection to what is proposed in this bill for the benefit of public servants of the Northern Territory, I point out that there are many cases of injustice of long, standing which are closer to Canberra, and which should receive investigation. The position of the returned soldier temporary linemen is very unsatisfactory. Most of them are more than 50 years of age, and their jobs depend entirely upon the day to day conditions existing in the postal service. I speak of the future, because their employment has been continuous over many years, although they are only classed as temporary officers. If, as some honorable members have suggested, difficulties lie ahead of the Postmaster-General’s Department, it is likely that an outcry will be raised, with the result that some of these linemen may be dismissed in order to make room for other quite deserving officers who, nevertheless, have not to their credit the same long period’s of service. During my term as Postmaster-General I attempted to remove this anomaly, and honorable members will doubtless agree that the permanent appointment of 225 men in one batch was a good step forward, but the present Postmaster-General should take action to safeguard the jobs of the remaining returned soldier temporary employees.
.. - in reply - I shall see that the fullest consideration is given to the representations of the honorable member for Gippsland (Mr. Paterson) and the Leader of the Opposition (Mr. Curtin). I shall bring the matter to the notice of the Minister for the Interior (Senator Foll) in order that it may be discussed by the Commonwealth Public Service Board.
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.
Debate resumed (vide page 1010).
– -I have examined the bill. As the Attorney-General (Mr. Hughes) has said, it seeks to preserve the superannuation rights of public servants who, under the provisions of the Conciliation and Arbitration Act, are appointed as inspectors or conciliation commissioners. I recommend the measure to the favorable consideration of the House.
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.
In Committee of Supply: Consideration resumed (vide page 866).
Department of Defence Co-ordination.
Proposed vote, £97,600.
– This proposed vote was last before the committee about 2 o’clock this morning. I fail to appreciate the method which the Government is using in order to obtain approval of what is probably the most important proposal before Parliament - the organization of the armed forces and their employment in the field, and the organization of supplies, communications and other defence ‘activities. It appears to me that the Government is endeavouring to clear away all business that must -be transacted as rapidly as possible without regard to its importance. In the early hours of this morning I complained that, when this proposed vote was under consideration no Ministers representative of the services were present in the chamber. Shortly after I voiced this complaint one of those Ministers came in. Only one defence Minister, the Minister for the Navy (Mr. Hughes), is now present. On occasions such as this the committee is entitled to the attendance of every Minister in control of a fighting service. A :state of affairs such as this cannot go on indefinitely. The Government must recognize that it is the wish of Parliament that the war effort be carried on with the greatest possible degree of efficiency, but it is necessary for honorable members to learn certain facts and make appropriate comments on them to the Ministers in the .chamber.
The CHAIRMAN (Mr. Prowse).It has just come to the notice -of the Chair that the honorable member for Barker (Mr. Archie (Cameron) has already spoken twice on this proposed vote. The honorable member spoke at 1.55 a.m. to-day and again at 2 a.m.
– If I am to be prevented from speaking on this subject by a mere splitting of straws, I shall be obliged to move the adjournment of the House to-morrow morning in order to secure another opportunity to do so.
– It is not the desire of the Chair to obstruct the honorable member, but the Standing Orders must be observed; they provide that, in committee, an honorable member may speak not more than twice on one subject.
– I suggest that the honorable member be allowed to continue. [Leave to continue given.”]
– This morning I dealt at some length with the problem of the organization of the Government for war. I said that there were too many co-ordinators-general, directors-general, committees, and all sorts of other dilatory arrangements.
There are boards of business management, which so far have only managed to get into difficulties. The latest war-time body to be constituted is the Australian Advisory War Council. As things are arranged at the present time, the process to which Avar measures must be submitted involves a recommendation from the department in which they originate to the Minister controlling the department. The succeeding steps require transmission to the War Cabinet, to the Advisory War Council, back to the War Cabinet, and then probably on to some board of business administration, and, perhaps, half a dozen or a dozen other bodies. It stands to reason that if military operations are to be conducted successfully, it will be necessary to have some method by which decisions may be made speedily and accurately.
I refer now to some of the so-called “ boards of business administration “. It seems that competent business men from outside the services must be appointed to look after the welfare of the gentlemen in uniform who, apparently, know nothing about administrative affairs. According to the present method of conducting our war-time services, so soon as a man is called up for service and dons a uniform his abilities automatically become suspect, no matter how capable he may have been in civil life. Immediately on joining a branch of the services, he is regarded merely as a fellow who wears khaki, navy blue, or sky blue, and apparently the heads of the service say, “ For heaven’s sake, let us have somebody from outside to keep tab on him “. The latest decision of the Government is to appoint a number of gentlemen who are to go about the services and see that everything is done in quick time; in fact, nothing is to be left undone for more than 48 hours. I should like to see some of the institutions connected with the sei-vice departments after about three months of this speeding up. Some hit or miss decisions will be made, and a lot of them will be misses. I have had some experience with the Board of Administration. All war is wasteful. It is not possible to conduct military operations without waste of some sort. I recall what the honorable member for Hunter (Mr. James) said in this chamber early this morning about the waste that occurred in certain military camps. No man in the Army is likely to endeavour to waste materia], especially if it happens to be foodstuffs. Should there be any such men, their commanding officers, I believe, would very soon have them dismissed. I do not care who may be the experts of the business administration; they will not be able to avoid a certain amount of waste in military camps. The numbers of men in the camps at week-ends vary according to weather conditions. It is impossible, therefore, for any quartermaster, however capable he may be, to forecast precisely how many men will be in his camp at any week-end and what the food requirements will be. If the quartermaster’s branch is to be forced to cheesepare by pressure from some business expert, a ?tate of affairs will arise fairly frequently when there will not be enough food in the camps during wet week-ends. In that event, the House of Representatives would present an interesting spectacle when the matter was raised by honorable members. The men in camps must be provided with enough food, clothing, and accommodation. The same thing applies on active service. Honorable members who have been on active service know quite well that there is always another wretched fellow also on active service - the enemy - who has a habit of completely upsetting arrangements for obtaining supplies of necessary commodities. Surplus supplies must be kept on hand in order that there shall be no shortages. That applies, not only to food, but also to munitions. It is far better to have too much .than not enough. This Parliament will never stand for a policy of “ spoiling the ship for a ha’porth of tar “. It will have to take clearly into account the influence which financial and business experts and boards of business administration will have on the conduct of operations. Our objective must be to achieve results, not to effect savings out of our military operations. The first consideration should be the saving of men’s lives. The saving of material is not so important. Casualties must be kept down, and the men must be given the very best equipment and material to enable them to do their job.
I hold very strongly the view that the dismissal of Colonel Smith from Army Head-quarters in connexion with the contract for the purchase of motor cycles was of very doubtful propriety. I am not acquainted with all of the facts, but I should say that it is unlikely that motor cycles will be imported in the near future, because they will be needed overseas. Probably this poor wretch was jammed between having to take a thousand machines for the armoured forces or go without them. If he took them, it would be at the cost of breaking an obscure regulation. Any man with active service experience would, say that we need men who will get things done, not those who merely comply with obscure regulations. Consequently, I have grave misgivings as to the justification for the dismissal of this officer.
– He possibly saved the department thousands of pounds.
– I do not know whether he did or not. But it is possible that if the deal had not been completed quickly the machines would have gone beyond the grasp of the Government and been lost to the forces.
– There is a shortage of thousands of motor cycles in the Australian Imperial Force and the Militia.
– I do not doubt that statement, coming as it does from an honorable member who is in charge of a cavalry division, which needs these machines.
I direct attention to the way in which military information is being bandied about this country to-day. There is an old rule that the mind of the enemy commander is the first objective in war. If you know what the other man proposes to do, you can immediately begin to devise measures to counteract his intentions; in other words, surprise him. In any office to-day may be found notices stating that “little pigs have large ears” ; “ do not talk, Hitler is listening “ ; “ be like the three wise monkeys - hear nothing, see nothing, say nothing “. A very good exhibition, organized by the department in Sydney, ought to be seen and studied by every service Minister and every honorable member. Hoardings everywhere have on them advertisements urging the people not to talk, because what they say may mean the sinking of a ship or the loss of a battalion. Yet what is happening in the community? There is hardly a newspaper which does not publish information that is vital to the safety and security of this country. It is said that the people must be told everything; that John Citizen can take it all right. The man to take it will be, not John Citizen, who so far is safe, but the poor devils on the ships on our coasts. If, as the result of leakage of information, a first-class transport loaded with Australian troops be lost, this chamber will be a very interesting place after the event, and I shall play a prominent part if I do not happen to have been on the transport - which is not likely at the moment. During the last fortnight, I have seen in Sydney documents relating to the transfer of goods to a certain transport which has been well discussed in this chamber and was the subject of argument earlier this year. I have seen “ These things to be put on His Majesty’s transport- , due to sail- “, and the date of the sailing was given. That document passed through different offices, warehouses and departments. Under present-day conditions of communication by wireless and other methods, the handling of information of that sort by hundreds of persons simply means that our men are left open to destruction as soon as they go to sea. Raiders have been operating about our coast. Every honorable member who was present one Friday morning will remember that I said that the only course open to any defence Minister in time of war who made a blunder was to stand down. One of the most stupid statements that ever appeared in the press over the name of a Minister, was published on the 13th November last, in the Sydney Daily Telegraph, over the name of the Minister for Air (Mr. McEwen). That statement completely disclosed the methods employed during the previous few weeks by the Royal Australian Air Force in the patrol of the coasts of Australia. It was no more nor less than a complete disclosure of what ought to have been kept secret from every one in this country. It informed the other fellow that he could approach, our coast at any time of the night he chose, because we were not able to prevent him. I am justified in what I am saying by the action taken by the Prime Minister (Mr. Menzies) next day, when he stated in the press that if he were not satisfied with the job that was being done by the Chief of the Air Staff he would appoint himself to the position. This Parliament cannot tolerate statements of this description by Ministers of State. If Ministers are not able to contain themselves, if they cannot keep their tongues still, this Parliament has open to it no other course than to insist that others shall take their places. In this chamber the other day the Minister for the Navy (Mr. Hughes) made a disclosure as to the mission on which a certain cruiser was sent to Western Australia. An enemy commander desires to know one of two things about our cruisers - where they are going to be, or where they are not going to be. No matter which piece of information he obtains, it is valuable to him. This week, two newspapers published a complete statement of the intentions of the Minister for the Army (Mr. Spender) in relation to army organization reform. The Minister said that, although the information was correct, he was not aware as to how it had been obtained. I should want to know who released information from any department of which I was the head. I had one such experience in regard to the sinking of the Turakima. If Ministers of State give to the press Cabinet information concerning defence matters affecting the welfare of this country, action must be taken against them. Either they must conform to the oath they have taken to maintain secrecy, or put up with the penalty which an ordinary person incurs. These instances could be multiplied. There is one regarding the sabotaging of merchantmen. A leading daily newspaper published a statement showing quite clearly how any person who wanted to sink a ship should place his bombs; it named the places which were most vulnerable and, if struck, likely to cause the ship to sink in the shortest possible time. A few ill-disposed individuals in this country may be deficient in the knowledge that is being bandied about, and the surf- ferers will be the men on board the ships. It is not fair to them. No country can wage war under a system which leads to the whole of the countryside being turned into a magpies’ corroboree, every body talking at the top of his voice, and no one keeping anything to himself. This is a serious business, and it is time that we took stock of the position. I know that it will be said that it is quite all right so long as the matter is published in the newspapers and not put over the air.
No action has been taken, for the reason that some sort of insect, which has obtained entry to Australia, seems to enjoy a privilege not enjoyed by any other section of the community. It is time that this House dealt with it. The present state of affairs cannot be allowed to continue. Public opinion will be stirred up, and will sweep out of public life any one who does not fulfil his obligations.
There are many more things which one could say. I am much indebted to the committee for having given me the opportunity to place these matters before it. Under present-day conditions, with Australia at war, the first loyalty of any man is to the fighting forces that we are organizing and sending overseas. Any individual, society, wireless station, member of the forces, Cabinet Minister, or any one else, who comes between our objective of winning the war and the security to which these men are entitled must take the count. It is just as well to understand that. I shall keep a close watch on events in the near future, because I have not been satisfied in the past. If we go on gabbling as we are doing now, serious results may follow. There are armed enemy vessels operating around our coast. It is evident that the Government does not propose to hold a secret session of Parliament at which these matters may be discussed, and therefore I hope that what I am about to say now will not be reported in the press.
On previous occasions, measures have been taken to ensure that
– I cannot help recognizing the importance of everything the honorable member for Barker (Mr. Archie Cameron) has said, having regard to the fact that it is not long since he was a Minister of State administering one of the most important service departments, namely, the Navy. Nor can I push from my mind the fact that he is at present a member of one of the services, and is attached to the Intelligence Section. For that reason, I consider that it is of the highest importance that the Ministers in charge of the service departments grouped under the Minister for Defence Co-ordination, should be here in their places, and I ask the Minister for the Navy (Mr. Hughes), now at the table, to request his colleagues to come into the chamber immediately. I do that with a sense of responsibility. When they arrive, I shall take the liberty of ascertaining whether it is the wish of the committee that attention be drawn to the presence of strangers, so that we may discuss in secrecy the matter raised by the honorable member for Barker, and other matters which, in the circumstances, I feel obliged to raise. I can, however, give some indication of the nature of the subjects I should like to have considered by referring to those matters regarding which disclosures have already been made. The most important is the disclosure by the press that raiders have ‘been operating quite recently in the Indian and Pacific Oceans. It has also been disclosed that mines have been laid at widely separated points around the Australian coast, necessitating the closing of the port of Newcastle, the closing of Bass Strait, and the closing of the waters around Kangaroo Island. A glance at the map of Australia will indicate the extensive nature of the mine sowings. Then, take into consideration the statements made by the Minister for Air (Mr. McEwen) in answer to questions regarding the capacity of the Air Force to patrol the coast, and protect our merchant, shipping against enemy raiders. I hesitate to discuss this matter for fear that inadvertently I might refer to matters which have come under my attention as a member of the War Council, and for fear that I might draw on the information which I have obtained in the council rather than upon disclosures in the press. For that reason, I say that the Minister for Air, the Minister for the Army and the Minister for the Navy ought to be present here during the discussion of this tremendously important matter.
– And the Prime Minister also.
– Yes, probably the Prime Minister also.
– He is at present at a meeting of the War Cabinet.
– I recognize that the War Cabinet is discussing matters of great importance, and I make allowance for that. I suggest, therefore, that you leave the chair, Mr. Chairman, and we may take advantage of the suspension in order to have some refreshment. Then, when the meeting of the War Cabinet is finished, the Ministers should come into the chamber. It is of the highest importance that, on this last available opportunity, we should have a heart-to-heart talk on matters which are, in an executive way, the responsibility of the Government, but which are also the responsibility of this Parliament. I have no doubt that honorable members consider that there are matters upon which they could offer counsel to the Government. I am not here to find fault, or to make a captious indictment of the Government. I know too much about the situation to regard these matters in churlish fashion, or to be narrow-minded regarding the amount of care which the Government is exercising; but that does not dispose of the obligation of Ministers to satisfy Parliament that what is being done is the maximum which existing circumstances permit us to do.
– How can the honorable gentleman and Parliament be so satisfied ? Only by words, and it has already been stated that everything possible is being done.
– The right honorable gentleman knows that on two occasions the Prime Minister, at private meetings of members of Parliament, has said things in reply to questions which, I am quite satisfied, could not have been said at a meeting at which the press and public were ‘free to hear what went on. The fact that this Parliament will go into recess to-morrow night makes it all the more urgent that honorable members should be given an opportunity to ask questions which they would be unable to ask publicly. In this way, they might obtain information which could not be given publicly.
– I ask the honorable gentleman to remember that the honorable member for Barker (Mr. Archie Cameron) made his statement when the press and the world could hear him.
– I have no objection to the Minister giving an answer now if he considers that he is able to.
– I could not do it.
– But he might be able to do it at what would be the equivalent of a secret session. That course is open to us if we care to take it. I have already suggested that you might leave the chair, Mr. ‘Chairman, and that, when the House resumes, attention be called to the presence of strangers.
All the licence and all the liberty in this country ought not to be in the hands of irresponsibles. If unguarded statements are to be made, it is better that they should be uttered in this Parliament and confined within the four walls of this chamber than that they should be published in newspapers or broadcast by wireless stations.
Some of the statements are made in perfectly good faith by honorable members who are not able to verify them, but Ministers can supply information as to their accuracy. Whilst I am not satisfied with the medical services of the Military Forces, I hesitate to embark upon a public controversy about them. I am not quite satisfied with the disposition of the Royal Australian Navy, not necessarily because the ships are not arranged to the best advantage, but because the best arrangement, as understood, has not yet been indicated to me in order to make me alter my opinion.
– Yes, but how will a secret session help to overcome the difficulty?
– The right honorable gentleman and I, in a secret session, could be much more frank with each other across this table than the necessities of this debate permit. That is all I feel disposed to say now. The necessities of this debate so limit discussion as greatly to impair its usefulness to the Government in eliciting what honorable members are thinking, and to restrict the ability of honorable members to indicate their apprehensions, which could, perhaps, be removed if Ministers could deal with the matters quite candidly.
– The Minister should not be driving the Leader of the Opposition to a point beyond which he does not desire to go.
– I do not believe that he intends to do so. Speaking with a full sense of responsibility, and being not entirely destitute of a knowledge of the facts, I say that the best course that could be followed at this juncture is for Ministers responsible for the administration of the fighting services to be in their places in order to answer criticism freely and frankly. If it be deemed proper to withhold from the people certain
Excised by direction of Mr. Speaker.
Excised by direction of Mr. Speaker. information, we have power to ensure that this will he other than a public discussion.
– What part has the Advisory War Council been playing?
– I shall tell the honorable member, but not in public. The view may be taken by certain persons that the council is an excrescence on the body politic. These Estimates represent the last opportunity that Parliament will have for some little time to exercise control over the Executive.
– Why not meet next week?
– The indications are that Parliament will go into recess tomorrow. The fact must be borne in mind that Australia is at war, the conduct of which is a matter of major importance to Parliament.
– If the Ministry has committed any major blunder, all honorable members will be blamed for it.
– Yes. I do not assert that Ministers will not be able to satisfy us if they reply frankly to our questions ; but, to date, that satisfaction has not been afforded to us. The speech of the honorable member for Barker should be answered by a Minister. That, at least, is clear ; but I do not expect the Minister, in a public discussion, to disclose information that would constitute a reply to the honorable member’s statements.
– It is unfortunate that the Leader of the Opposition did not mention this matter to the Prime Minister some time ago.
– I requested the Prime Minister last week to do what I now suggest.
, - Honorable members recognize that Ministers in charge of departments concerned with the fighting services have most responsible duties, and no suggestion has been made that they are not performing their administrative duties with efficiency; but private members also have responsibilities to their constituents. The Estimates of expenditure for the current financial year are most important, but the service Ministers have not been in the chamber to supply information that we have sought. Each responsible Minister should be in his place to answer ques tions relating to his department. I support the proposal of the Leader of the Opposition that a secret session be held at this juncture. The Labour party played a not insignificant part in the establishment of the Advisory War Council, which, to date, has served a most useful purpose. Nobody can criticize the Leader of the Opposition himself for the attitude that he ha3 adopted to the prosecution of the war.
– A charge has been made against a Minister, who was not in his place to answer it.
– There are many matters upon which honorable members are entitled to have information. I support the statement of the honorable member for Barker (Mr. Archie Cameron) that information which has been broadcast by wireless stations and published in the press has been denied to honorable members. Most of our information about the progress of the war is obtained from the press. We should have a heart-to-heart talk on matters relating to the war effort. If attention be directed to the presence in the chamber of strangers, the galleries may be cleared, and Ministers will then be in a position to discuss freely with honorable members many problems that are now causing them uneasiness. In open session, honorable members are reluctant to seek such information lest in so doing they unwittingly divulge something which will be of advantage to the enemy.
, - Clearly, we cannot, begin a discussion of this character at this late hour, and go into recess to-morrow. Weary though we be from the long sittings this week, we have been excited by the alarmist statement made by the honorable member for Barker (Mr. Archie Cameron).
– That was not an alarmist statement. It was true.
– Perhaps I should have described the statement as “ alarming “. However, the honorable member’s remarks have rendered us unfit properly and dispassionately to consider the matter now, and in the circumstances, the discussion should be postponed until next week. Having alarmed the public, we should not go into recess to-morrow.
If we do, the people will blame not only Ministers but also honorable members jointly and severally.
Sitting suspended from11.44p.m.to 12.30 a.m. (Friday.)
– I do not think that the committee, consisting of tired men, excited by the statements we have heard, should be asked to consider the defence estimates. I again suggest that further consideration of the estimates dealing with the services be postponed until next week when they can be disposed of in calm discussion.
– Just before the sitting was suspended I had a word with the Leader of the Opposition (Mr. Curtin), who suggested that there might well be matters connected with the defence estimates that honorable members would prefer to discuss in private. That seemed to me to have some point. Consequently, I direct your attention, Mr. Chairman, to the presence of strangers.
- (Mr. Prowse).The question is That strangers be ordered to withdraw.
Honorable Members. - Hear, hear! Question resolved in the affirmative.
Recording of debates suspended from 12.32 to3.30 a.m.
Proposed vote agreed to.
Proposed vote- -Department of the Navy, ?3,112,500- agreed to.
Department of the Army.
Proposed vote, ?2,736,000.
– I wish to refer to a question which I asked concerning the treatment of soldiers who are confined to the Holds worthy detention barracks. I received from the Minister for the Army (Mr. Spender) the following letter : -
Referring to your letter of the 29th October, in regard to a number of complaints which you have received concerning the military detention barracks at Holdsworthy, New South Wales, I desire to inform you that inquiries have been made and it would appear that no soldier in detention at those barracks hag ever been punished for making a complaint and also that on no occasion have five men been confined in one poorly ventilated cell.
The Holdsworthy detention barracks are visited four or five times a month by one of the visiting officers appointed for the purpose and on each occasion soldiers under detention are paraded and asked if they have any complaints and on no occasion has any soldier complained of ill treatment.
I do not question the Minister’s bona fides, but I doubt the veracity of those who supplied the information to him. I have communicated with the source from which I received my information, and have no doubt as to what has taken place. Cases dealt with at the Holdsworthy detention barracks are principally those of members of the Australian Imperial Force, who, for absence without leave, have been detained at the barracks for seven or eight days. In fact, the position is worse than I originally thought it to be, for I have since received additional information. If a proper inquiry were instituted, ‘ men who are still in Australia could be examined, and the truth ascertained. I am informed that some of the men who were detained at these barracks have been thrashed with military belts by guards. Despite what is contained in the Minister’s reply, I am advised that on one occasion not long ago, when Colonel Norrie visited the camp, the usual routine was followed, and the men paraded. When they were asked if they had any complaints, one man stepped forward. No attention was given to his complaint, but, following the inspection, he was given three days’ solitary confinement on bread and water. That statement could be verified at a proper inquiry. The person who supplied the Minister with the information which led to the writing of the letter which I have just read evidently assumed that men would not be prepared to give evidence at an inquiry, but I am confident that they would do so if given the opportunity.
A week or so ago I referred to the food supplied to troops on transports. The Minister for the Army then said that there was no difference between the food supplied to the men and that placed before the officers, but later he admitted that there was a difference.
– At the time, I thought that the honorable member referred to the quality of the food. I have learned since that, although the quality is the same, an additional allowance is given to officers and warrant officers.
– There is, as the Minister now admits, a difference in the variety of the food supplied to the different ranks, and I am reliably informed that there is also a difference in the quality of the food. I have here a menu for a meal supplied on a troopship which left Australia some time ago. It was forwarded to me by a personal friend, who is a most reliable man. [Quorum formed.] There should be no difference whatever, either as to variety or quality, in the food supplied to the various ranks. This menu shows that for dinner thirteen different courses were available to the officers.
– Probably the food was the same as was supplied to the men, although described differently.
– The menu was as follows : -
On the other side of the card there has been written in pencil the menu of the troops. It reads -
Porridge, without milk.
Chops, half done,. and potatoes.
Thin soup- too thin.
Whatever you said the meat was it was.
Cold corned beef and potatoes - you can eat this if you like the smell of oil.
That may appear to be amusing to some honorable members, but it reveals a wrong which needs correction. The man who sent me this card can be relied upon to tell the truth. I object to discrimina tion of this nature. The men in the ranks are fighting for this country and have to accept the same risks as the officers. I understand that in the camps in Australia there is no difference in the quality of the food supplied to officers and men.
– Why then should there be this discrimination on a transport? The Minister should cause an inquiry to be made into this complaint with the object of ordering a discontinuance of any discrimination in the quality or variety of food supplied to officers and men.
I trust that my request for an inquiry into certain affairs at the Holdsworthy detention camp will not be overlooked. I have checked up on the information supplied to me, and I am absolutely certain that it is accurate. In this case also my informant is aperson on whose word I can rely. I hope that the Minister will arrange for an early inquiry into the matter.
– I am obliged to complain about the unsatisfactory nature of answers given, by the Minister for the Army to questions that I have asked him in this House. I shall refer first to the most recent of the unsatisfactory replies I have been given. Some little time ago I received a letter signed by 36 men of the Australian Imperial Force in camp at (Seymour concerning the detention of a certain man. The letter stated that this individual was ordered solitary confinement for eight days in a room only 7 feet square for having been absent without leave. The conditions were bad in every respect. There was no ventilation, save through a broken window, and no light. In the lengthy answer that the Minister supplied to me, these statements were not denied. The effect of the Minister’s reply was that no soldier had been sentenced to solitary confinement, and that the place of detention was different from that described by the men.
– I think there is something towards the end of my reply to the effect that the honorable member, if he so wishes, may inspect the camp, in order to test the reliability of the statements made to him.
– Will the Minister grant permission for an honorable member to visit a camp at any time over a certain period, so that he will have the opportunity to go at some time other than when he might be expected?
– Certainly. I am quite prepared to give authority for any honorable member to enter a camp during a certain period.
– It appears to me that this man must have been detained elsewhere than in the usual place of detention.
– I am quite prepared to give the honorable member authority to visit the camp so that he may speak to the men who furnished the information to him. I am anxious to get at the truth in these matters.
– I have no wish to get any of these men into trouble, lor that reason, their names were not furnished to the Minister. I have no doubt at all that the charge made by the men can be substantiated. I do not wish to say anything against the Minister personally. It appears to me that the men are indignant at the treatment of one of their number.
– If the honorable member is able to furnish evidence that incorrect information has been submitted to me, I have no hesitation whatever in saying that I shall deal drastically with those responsible.
– I thank the Minister for his reply.
I wish to refer to another case in which I was furnished with unsatisfactory information. In this instance, the honorable gentleman’s predecessor in office was concerned. I direct attention to the following extract from Ilansard: -
asked the Minister for the Army, upon notice -
Mr. Street. ; The answers to the honorable member’s questions are as follows: ; 1. (a) Vaccination is compulsory for all recruits for the Regular Army in Great Britain; (i) No information is available as to whether inoculation is compulsory or not at present in the Home Forces.
I understand that inoculation is not compulsory in Great Britain. I now direct attention to certain questions and answers reported in Parliamentary Debates, House of Commons, Thursday, the 26th August, 1940-
Mr. Leach asked the Minister of Health how many deaths from enteric fever were registered in England and Wales in each of the four years 1930 to 1939; and how many cases were notified in 1939?
The number of cases notified in 1939 was 1,479.
Mr. Leach asked the Minister of Health whether more cases of enteric fever have been notified in England and Wales in the seven months ended the 31st July, 1940, than in the corresponding period of last year, and whether he will give the figures for the two periods ?
That extract shows that the honorable gentleman’s predecessor was undoubtedly misinformed, presumably by officials of his department. I should be glad to have a further statement from the Minister on this subject.
– I urge upon the Minister the desirability of a reconsideration of the Government’s policy in connexion with inoculations, in order to bring it into conformity with the practice in Great Britain. I do not think that inoculation should be forced upon men who are compelled to serve. If a man volunteers for service, it may be argued that he volunteers on the basis of the regulations, but if he be a conscript, he should not be compelled to suffer inoculation. I have made inquiry from a medical friend concerning what is known as the “ Pucka throat “, and he has informed me that the spread of this complaint was, in his view, caused through inoculations.
– I think the honorable member will agree that inoculation of men who go to the Middle East against, say, smallpox, is a safeguard to all members of the forces.
– I have no objection to the inoculation of men who volunteer, but I have strong objection to the inoculation of men who are compelled to serve in Australia. In this respect I submit that the regulations should be amended.
– The answer that I gave to the honorable member for Melbourne on this subject a day or two ago was based upon medical advice, but I am quite sure that I should have given the same answer of my own volition. I consider that it is in the best interests of the men that they should be inoculated against certain diseases. That being so, I cannot hold out any hope of a discontinuance of the practice.
– I support the remarks of the honorable member for Bourke (Mr. Blackburn) concerning the compulsory inoculation of men who are forced to serve in the Army. I draw attention to the need for certain reforms in the administration of the army medical corps. This is a specialized service in which the outlook is probably more conservative than in any other branch of the Army, and there may be a lack of readiness to accept new ideas. In connexion with the remarks of the honorable member for Bourke on inoculation, I asked certain questions of the Minister for the Army on the 29th November. I asked whether he would have the Army regulations altered to provide for voluntary rather than compulsory inoculation for the Australian forces, whether they be the Militia, universal trainees, or the Australian Imperial Force. From the Minister I received a reply which seemed to me to be the opinion of the medical advisers to the Army. I suggested to the Minister that he should not accept the advice tendered to him by those advisers without some reference to the practice of the British Army, the medical advisers of which are apparently content to advise differently. It may be that the status of the medical advisers of the British Army is equal to or higher than that of the medical advisers of the Australian Army. Probably they have greater experience, because the enlisted men in Australia are not subject to the same health hazards as British troops who are required to serve in the tropics. I do not argue against inoculation, and I do not subscribe to the views held by the anti-vivisectionist society, but I consider that the Australian Army should adopt the same practice as the British Army unless there are good reasons for declaring that the British practice is bad.
I asked the Minister about the use of contraceptive devices in the Australian Imperial Force. He refused to give me details and said that no good purpose would be served in disclosing the prophylactic protections that were adopted, again blindly accepting the advice of the Australian Army Medical Corps. He should not accept that advice without paying some regard to the protests of a very large section of the people in this community, whose moral susceptibilities are offended by the use of government money in that direction, laudable as the Minister may think the use of those devices to be. There is heart-burning among the parents of the universal trainees when they are advised of the practices of the Australian Army Medical
Corps. I cannot say how widespread the practice is, because the Minister has refused to divulge the facts ; but the feelings of the parents of soldiers and the moral susceptibilities of the people should be taken into account.
I direct the attention of the Minister to well-authenticated happenings in the treatment of sick members of the forces in some Australian camps. I have it on the authority of a distinguished Melbourne man who served as an officer in the last war, that within the last few months he visited the Seymour camp to see a private in the Australian Imperial Force- Together they sought for another private and found him with a temperature of 104.7 degrees, in what purported to be a hospital, where he had been lying for 24 hours in his military clothes.
– “Will the honorable member give me details of that case?
– Yes, in order that some action may be taken to ensure that there shall be no repetition of such treatment.
I am informed that the cooking facilities are primitive at the militia camp at Mount Martha, Victoria. The person who told me that is in a position to know the facts. He said that conditions at the camp were shocking. Tents were in a wretched condition, and it was impossible for the commanding officer to replace them. I do not know whether you, Mr. Temporary Chairman (Mr. Rankin), in your military capacity, know anything about the conditions at that camp. My informants are not alarmists, and their only objective is to do their best to provide reasonable comfort for the youths of this country who are our guard against possible invasion.
I am given to understand that there is extravagant spending on camps. For instance, it is said that at the Richmond aerodrome chromium-plated doors costing £45 or £50 each are provided. That does not seem to be wise expenditure.
– The Richmond aerodrome is not an Army matter.
– I understand that what happens in the Air Force also happens in the Army.
– It does not. Army officers have no place so well equipped as the Richmond Air Force Station.
– Several thousands of pounds of the £100,000 that was expended on the Somers initial training school went to provide a gymnasium, which does not seem to be necessary in times of mammoth budgets. It would help to reconcile the public to the inevitability of taxes if in the Army and its related services there was close supervision of expenditure and no chance for officers with extravagant ideas to authorize unwarranted expenditure. There have been instances of grossly unwise disbursements and it should be the aim of the Ministry and the Parliament to ensure that every penny expended on the war effort shall be wisely expended. I had intended to mention other matters connected with the administration of the Army, but I shall make representations regarding them by letter. [Quorum formed.’]
– I should like an assurance from the Minister that the matters complained of will be rectified.
– I cannot give that assurance, but I undertake to investigate the allegations made.
Proposed vote agreed to.
Department of Am
Proposed vote, £2,556,200.
– The court-martial and subsequent dismissal from the Royal Australian Air Force of Aircraftman Percival Reed requires the attention of the Minister for Air (Mr. McEwen), because it would appear that Reed, although he was admittedly guilty of a technical breach of regulation No. 1086 in writing to a Minister, had endeavoured through the usual channels to obtain redress of what he claimed were grievances. He did not appeal to his commanding officer, FlightLieutenant McLeod, because it was against him that he was complaining. I understand that Flight-Lieutenant McLeod was in charge of the educational section at Woolloomooloo. Reed enlisted as an over-age returned soldier who was anxious to assist in Australia’s war effort. His appeal was sent to SquadronLeader Ashbridge. Finally, after Reed had been transhipped from Woolloomooloo to other activities, he was sent to interview Group Captain de la Rue. But instead of having his complaints inquired into, he himself had to face a court martial for an alleged breach of regulations. Details of the evidence were forwarded to the honorable member for Reid (Mr. Morgan), but as his firm represented Reed at tlie court martial, the honorable gentleman did not deem it fitting that he should raise the matter here. Reed wrote his original letter of complaint to the Attorney-General (Mr. Hughes) as his local member, but when he received no satisfaction from the honorable member for North Sydney, he wrote to the Prime Minister, whose secretary acknowledged his letter on the 19th October as follows : -
I am directed to acknowledge the receipt of your letter of loth October, 1940, regarding your desire to obtain a discharge from the Hoya] Australian Air Force, and to inform you that your communication has been referred to tlie appropriate authorities for consideration.
When this matter was first raised in this Parliament, the Minister for Air said that he was unaware of the proceedings until he saw a report of them in the press.
– I was not the Minister when the case originated.
– But I notice from Reed’s correspondence that the Minister had some knowledge of the case.
– I had knowledge of the case, but not of the court martial.
– The result of the court martial has now been made known. Before the court martial announced its judgment, a guarantee was asked in regard to Reed, and Mr. C. E. Martin, M.L.A., who represented him at the court martial proceedings, gave his personal guarantee that Reed would appear to receive judgment. Despite this guarantee, Reed was taken to No. 3 School of Technical Training, Ultimo, where he was detained in a room which can best be described as a cage, because it measured only 9 feet square, and was only 9 feet high. The ceiling and the door were made of woven wire. He was allowed out of the cage for only half an hour in the morning and half an hour in the afternoon for exercise. The court martial sentenced Reed to detention for twelve days, and to be discharged from His Majesty’s service. The court recommended the accused to mercy because of his age, his previous war record, good conduct, and because of the irregularities associated with the handling of his complaint. I should like to know what the Minister proposes to do with regard to the irregularities to which the court martial drew attention. The original sentence was reviewed by Air Commodore W. H. Anderson, Commanding Officer, Central Area, who reduced the term of detention to three days, Reed then to be dismissed. Surely, a man does not lose his citizen rights when he joins the Air Force. Reed had every right to place his complaint before his local member of Parliament. I have seen a copy of the letter which Reed directed to the Attorney-General, as the honorable member for North Sydney. I should like to know how that letter came into the possession of the officers who gave the instructions to proceed with the court martial. Reed’s letter to the Prime Minister also found its way into the possession of those officers, but the court martial proceedings were actually taken in respect of the letter addressed to the honorable member for North Sydney. The latter denies having forwarded the letter to the Royal Australian Air Force. Evidently, some one who has access to the Attorney-General’s correspondence must have forwarded that letter to those officers. Reed has been unjustly treated. In addition to having cause for complaint against Flight-Lieutenant McLeod, it is said that he had further trouble with Squadron Leader Ashbridge at the department to which he was transferred. When he was taken before Group Captain de la Rue, he was treated most abruptly, and was refused a fair hearing of his complaint. I can well understand that, because officers are inclined to be resentful against any man in the ranks who makes a complaint against them. However, Reed is not a man who would make a complaint without good reason. He is a qualified accountant, and a returned soldier. I hope that the Minister will clear up this case, and discover who was responsible for sending Reed’s letter to the Attorney-General on to the military officers. If that point be not explained satisfactorily, I suggest that any resident in the electorate of North Sydney who, in future, desires to make complaint against a government department, would be very unwise to seek the assistance of his local member in the matter, as he would expose himself to the risk of victimization. The Minister should see that justice is done to this returned soldier, who in his anxiety to serve his country rejoined our Defence Forces.
– I have received many requests from my constituents who have joined the Air Force, Navy and Army to assist them in handling various complaints. Up to date, I have not been informed that I, as their parliamentary representative, was running any risk in acceding to their requests. The Minister should indicate whether honorable members should continue this practice, because it is quite common for members of the various branches of the Defence Forces to seek the aid of their local member in this way. I should be very surprised to learn that in doing so these men acted illegally or committed a breach of the Defence Regulations.
– The circumstances of the case raised by the honorable member for East Sydney (Mr. Ward) are as follows: Reed wrote a letter to the Prime Minister. I have seen the letter, and it is of a character which constitutes a breach of certain Air Force regulations. About the same date, the aircraftman wrote a further letter to the AttorneyGeneral, and enclosed a copy of the letter which he had addressed to the Prime Minister. These letters indicated that, if certain results did not follow, he would take other action. The Attorney-General sent the letter to the then Minister for Air, whose secretary requested the Department of Air to make inquiries into the matter. About that time, I became Minister for Air and received for signature a letter addressed to the Attorney-General which stated, broadly -
Dear Mr. Hughes. - I acknowledge your letter re Aircraftman Reed, which was addressed to my predecessor. Inquiries are being made, and I shall advise you of the outcome later.
In due course, the Attorney-General sent a copy of that reply to Aircraftman Reed. As it said no more than that “ inquiries were being made “, I, the Minister, being confronted with a vast volume of correspondence, would naturally forward the letter without first acquainting myself with all the circumstances. I should naturally expect that the information would come to me from within the department, and that, upon receiving it, I should be able to inform the AttorneyGeneral.
The letters written by Reed were remitted from the head-quarters of the Royal Australian Air Force, Melbourne, to the Central Area, Sydney, where he was stationed, and they were accompanied by a request for information. They came before the commanding officer of his unitIt appears that there was no intimation to the commanding officer that the letters were forwarded to him for the purpose of gleaning information, which was to be furnished to the Minister for Air, for transmission to the Attorney-General. The commanding officer simply recognized the correspondence as letters which, in themselves, disclosed a breach of the Air Force Regulations. Accordingly, a charge was laid against Reed. I am very dissatisfied that such a state of affairs should have occurred and that the commanding officer should not have been acquainted with the circumstances in which the letters were transmitted to him. I have made inquiries in order to ascertain how that happened, and I have received certain information. I do not regard it as complete, and I am continuing my inquiries, because I do not intend to have a repetition of the case. On that point, I am unable to give further information now, but I shall be able to supply it in due course.
Reed was charged with the offence. Let me say that it was an offence which, if permitted to continue, would be regarded - I believe correctly - as inconsistent with the maintenance of discipline, because the regulations that apply to the various branches of the fighting services provide proper procedure to enable any dissatisfied serviceman to make a complaint, and give an adequate assurance that the substance of such complaint will be impartially investigated and dealt with. Upon being charged with this offence, Reed was very properly informed that he could be dealt with summarily, or he could demand a trial by court martial. Of his own volition, he chose the latter.
– Who would have heard the case if ho had elected to be dealt with summarily ? ifr. McEWEN. - The commanding officer of his unit. I am not able to name the official now, but if the honorable member is interested, I shall endeavour to obtain the information.
– Was it Captain de la Rue?
– As he was the senior officer in Sydney, I have no doubt that he would have heard the case.
– Obviously, Reed would not elect to be tried by a court martial over which Captain de la Rue presided, because that officer was one of the persons about whom the aircraftman complained.
– His complaints related to various officers. Captain de la Rue has since been replaced by Air Commodore Anderson. Courts martial are convened in accordance with certain regulations, and there is every assurance of an impartial trial. Reed was permitted to have his own counsel to present his defence. It is not for me to say that he was guilty. He was charged with the offence and was tried by a properly constituted tribunal, which found him guilty. According to the Royal Australian Air Force regulations, the finding of a court martial must be confirmed by the convener, who, in this case, was the air officer commanding the Central Area. The sentence of the court was to be pronounced at a later date. In the interim, Reed was placed in close custody. It was the proper room provided at the establishment for detention purposes. The honorable member for East Sydney gave its dimensions as 9 feet by 9 feet by 9 feet, which would probably be correct. There is a similar detention room at the Air Force establishment, at Canberra, and honorable members, if they so desire, are at liberty to inspect it. It will bear comparison with rooms in many homes. Certainly, the window is covered with woven wire, as is also an opening which is not sealed with wood. That probably accounts for the place of custody being described as a “ cage “, but the description is inappropriate. It is a normal, small room. Within 48 hours, the sentence of the court martial was pronounced.
– What was the finding?
– Reed was sentenced to twelve days’ detention, to be followed by his discharge from the Air Force, The air officer commanding, who had to confirm the finding, reduced the sentence to three days. As Reed had been held in close custody for two days, he was released within 24 hours after the pronouncement of the sentence.
– He was kept in close custody, despite the fact that his legal representative, Mr. C. E. Martin, M.L.A., entered into a personal surety that Reed would appear to hear the judgment of the court.
– I have no doubt that there was a good reason for that. It is not a major point. I remind the honorable member that the Attorney-General, like other Ministers, receives hundreds of letters of complaint. He would not know that this letter was written to him by a constituent.
– Reed wrote his private address at the top of his letter to the Attorney-General.
– When transmitting a copy of the letter to the Minister for Air, the Attorney-General gave no indication that he knew that Reed was a constituent. Little now remains to be said about the case. With certain phases of it, I am most dissatisfied, and I am pursuing inquiries in order to ensure that there shall not be a recurrence.
– Will the Minister’s inquiries include investigations of Reed’s complaints ?
Mi-. McEWEN. - No. I am now in possession of information which leads me to conclude that there is no substance in Reed’s allegations.
The honorable member for Melbourne. Ports (Mr. Holloway) asked whether representations made by members of Parliament on behalf of servicemen would be likely to prejudice them. I point out that the regulations governing all servicemen preclude them from invoking political influence to aid them in their military life. Just as it is an offence for a man to write such a letter as Reed did, so it would be an offence for a serviceman to approach a member of Parliament for the express purpose of making a complaint or of seeking assistance in connexion with his military life. The regulations provide proper procedure for the lodging of complaints by servicemen. It would he as well for honorable members to recognize that any representations that they make on behalf of a serviceman constitute an offence, and render him liable ito be charged with having committed a breach of the regulations. If a member of Parliament refused to interest himself in complaints of servicemen merely at the instigation of the men themselves, any Minister would, I think, give the assurance, which I now give, that his representations would receive proper and adequate consideration.
– Will the House rise immediately after the Estimates have been passed?
– The parliamentary staffs have been working continuously since 11 a.m. yesterday, and they are entitled to reasonable treatment.
– The Estimates and the Appropriation Bill must be passed this morning.
– Legislation by exhaustion is not in the best interests of the nation. Like my diligent friend, the honorable member for East Sydney (Mr. Ward), I have a number of matters which I desire to bring under the notice of Ministers. Unfortunately, members of this Parliament must get most of their information from the daily press, and that includes tainted as well as official news. I understand that an Air Force bulletin was to have been issued, by which members of Parliament, and I presume also the public, would be told much about the doings of the force, its growing strength, and, I suppose, the achievements of the Government in regard to that most important arm of the defence forces. Had the people placed the Labour party in power before the war broke out, it would have established this force on sound foundations, and greater headway would have been made by it. I commend the Minister for Air (Mr. McEwen) upon the foresight displayed by him in this innovation in his department. I hope that members will be supplied with the bulletin, and also with any other information to which they are entitled. I sympathize with him in the predicament in which he found himself recently with regard to a certain newspaper. I know sufficient of the circumstances to realize that the less Ministers have to do with the proprietors of the capitalist press, the better it will be for their peace of mind, and for the people of Australia. I am no believer in the so-called liberty of the press, which actually amounts to licence for certain newspaper proprietors, who assume the right to exploit the needs of the nation, and boost their own circulation. I have no faith in the loyalty of newspaper proprietors. The treatment which they sometimes persuade themselves might be their lot under press regulations is precisely the treatment they mete out to the party which I represent. At election times particularly they misrepresent us, and distort the facts of the political situation in a manner which is a gross reflection upon their honesty.
– The honorable member must deal with the item before the Chair.
– The unfortunate experience which the Minister has had at the hands of the press, and the manner in which he was taken in by a successful gentleman whose purpose in interviewing him was not to serve the interests of the nation, but to pursue his own nefarious ends, make me suggest that, instead of the Minister giving news to the daily press, it might not be a bad idea if the national radio network were utilized for the dissemination of official news from the department. Then we should not have to depend on the newspapers for the supply of news over the national broadcasting stations. It might be an improvement to get rid of the old fossils on the Australian Broadcasting Commission.
The TEMPORARY CHAIRMAN.Order !
– To change the metaphor, I refer to men who apply a Westinghouse brake to the wheels of radio progress.
Proposed vote agreed to.
Department or Supply and Development
Proposed vote, £95,000.
– When the proposal was first submitted to Parliament for the establishment of munition annexes, honorable members were given certain information as to how they vere to be operated. The statement was made that their profits were to be limited. I am now advised that, in some cases, aI/,hough agreements are being drawn up> they have not been completed. I wish to know whether all annexes work under the same agreement. Is the Minister who represents the Minister for Supply and Development able to say in general terms what the agreement provides? The Government has evidently decided on some form of regulation of these annexes, which I believe are being used to a great extent as show places of a kind. I understand that the great bulk of the supplies of the department are obtained from private contractors. I am of the opinion that undue exploitation of the public results from the fact that insufficient care is exercised by the department over the operations of these contractors and the prices charged by them. A week or so ago I asked a question in this chamber about the men occupying positions on the various contract boards. I was supplied with the names of the individual members, but I was unable to secure information as to the particular commercial undertakings with which they were connected prior to their appointment to the boards, and as to whether they still retain that connexion. I have been reliably informed that the latest appointment to one of the boards was that of a prominent Sydney business man, and that since his appointment various contracts have been let to the firm in which he is interested. If this be true, a serious state of affairs is indicated. The department should exercise great care that the officers whose duty is to examine contracts make all necessary investigations regarding them. The Government should see that the public is not exploited. If a firm conducting an annexe goes outside to secure supplies, there is no restriction of the profits earned by the companies from whom supplies are secured. Suppose an annexe goes to David Jones Limited, or to any other soft goods establishment, to secure overalls for its employees, these goods are supplied to the annexe at rates which allow for ordinary profits, and there is no limit to the profits earned by such companies in supplying goods which are in every sense as much defence equipment as is the. output of the annexe itself.
– I cannot supply the honorable member offhand with the information desired by him, but I shall try to obtain it.
Proposed vote agreed to.
Proposed vote - Department of Munitions, £S76,000- agreed to.
War (1939-40) Services Payable out o,f Revenue.
Proposed vote, £52,630,700.
– Included amongst the war services payable out of revenue is that of the Department of Information for which an amount of £193,200 is provided. I understand that the Department of Information is in control of the censorship. A close examination of the censorship branch will disclose that the powers of the censors are being used for political purposes, although the purpose of the censorship was said to be to prevent an enemy from getting information of value. There is a political taint about the administration of this department, as the instances which I propose to give to the committee will indicate clearly. A paper published in Sydney - Progress - endeavoured to publish the following statement by Lord Beaverbrook, a member of the present British War Cabinet, but was prevented ‘by the censor from doing so : - We certainly credit Hitler with honesty and sincerity. We believe in his purpose, stated over again, to seek an accord with us and we accept to the full the implications of the Munich document.
That paragraph was a reprint of something which appeared in the Daily Express - of which Lord Beaverbrook is the proprietor - of the 31st October, 1938. Its exclusion from Progress is evidence of partisanship on the part of the censors, because the paragraph could not possibly have given any information to an enemy. The Sydney journal also desired to publish the following statement which had been made by Lord Riverdale. and was published in the Sheffield Telegraph of the 24th October, 1933 :-
Will the Germans go to war again? I don’t think there is any doubt about it, and the curious thing is that I am almost persuaded that wc shall have to let the Germans arm or we shall have to arm them.
The censor also excluded from the same journal the following extract from a speech delivered by the present Prime Minister of Great Britain (Mr. Churchill) in the House of Commons on the 14th April, 1937 :-
I will not pretend that if I had to choose between communism and nazism I would choose communism.
Another act of the censor was to prevent the publication of the following: -
Liberal papers in America allege that the United States State Department and the oil companies have been fomenting General Almazan’s Fascist counter-revolution against the Cardenas-Camacho regime iu Mexico.
The New York Times caused a sensation by making this barefaced admission : “ No revolts against any Mexican regime supported by Washington have been successful in more than 15 years “.
Americans are asking whether their State Department is supposed to be acting for democracy or for the revolutionary intrigues of oil firms. Arms Orders For Union-Smasher Bethelem Steel, big American arms trust has been repeatedly convicted of breaches of wage and hour standards, the Wagner Act and other labour laws, and company unionism. Yet the “ liberal “ administration of Roosevelt has just handed it a billion dollars’ worth of arms orders. Works, however, have been hold ii]> by strike action on the part of steelworkers. General Motors, Ford, Du Pont and other violators of the Roosevelt labor codes have also been getting juicy arms contracts.
That statement was ordinary political comment which should not have been excluded under the powers conferred on the censors. Another excision by the censor from the same newspaper was -
Marshal Petain is one of the savagest enemies of democracy France ever had.
In 1017 he smashed a French army mutiny by ordering wholesale executions.
In 1920 he was responsible for the return to power of the reactionary Poincare
Britain and the United States of America will have to decide whether they are for Petain, who has officially announced that he is collaborating with Hitler, or for the Socialist workers of France, who are now leading Europe’s revolt against Fascism.
Why was that statement censored, seeing that we are supposed to be fighting against Nazi-ism? Another informative item which was excluded from Progress reads -
The Coventry horror was due primarily to the Nazis, but* also in substantial measure to failure of the Government to provide the Coventry population with deep shelters.
In spite of strong opposition from the Government, the London Borough of Finsbury decided to dig a deep shelter before the war. Up to 6th September only six people hud been killed by bombing in Finsbury.
Had publication of that statement been permitted, valuable information as to the best protection against air raids would have been disseminated among the public, and steps might have been taken to provide that protection. One of the most amazing acts of the censorship relates to the exercise of its powers over Common Cause, the official organ of the Miners Federation, which endeavoured to report the visit of the Prime Minister (Mr. Menzies) to the coal-fields. So satisfied was the editor of Common Cause with the report of the Prime Minister’s visit which appeared in the Sydney Morning Herald that, instead of writing a separate report, he proposed to reprint matter which had appeared in that journal. However, when the draft was submitted to the censor, some of it was rejected, notwithstanding that it had already appeared in the Sydney Morning Herald. Obviously, the censorship judged the material, not on its merits or its effect upon an enemy, but according to prejudice. There is ample evidence that the censorship is being exercised against trade union publications. The Ironworker desired to publish an obituary notice relating to a prominent South Coast trade unionist, but the censor was not prepared to accept it in its original form. Here is the draft which was submitted to the censor -
Later he became a foundation member of the Port Kembla branch of the Ironworkers’ Union, and used his undoubted talents assisting our union until the steel bosses saw to it that his services were no longer required.
The censor took upon himself to exclude the words “the steel bosses saw to it that “, so that the report read -
Later he became a foundation member of the Port Kembla branch of the Ironworkers’ Union, and used his undoubted talents assisting our union until his services were no longer required.
– That was a statement of fact.
– I agree that the deceased gentleman referred to had indeed “ assisted in organizing the workers into the Ironworkers’ Union”. The action of the censor reversed the meaning of the original article.
Dots the honorable- member for Wakefield (Mr. Duncan-Hughes) believe that the purpose of the censorship ia to alter articles so that their meaning is reversed? If that report had appeared in its original form, would it have assisted an enemy?
– The original report contained an innuendo which would have done no good had it been published.
– Surely the honorable member will not suggest that the censorship should be so rigid as to decide what may be good or bad for the people of this country. It is all a matter of opinion.
– In the opinion of the Labour -movement, many articles which appear as leaders in the daily press should be excluded.
– The honorable member for Wakefield cannot cite one instance of the censorship being exercised in this way against anti-Labour journals. Another act of the censor related to an article on conscription which Common Cause desired to publish. It read - . . Mr. Erwin said that Sir Montague Norman, through the Bank of England, made the present Nazi war machine possible. This bank, he said, was a private institution masquerading under the name of the English people.
That is a fact.
– It is not.
– Is it not true that the Bank of England provided loans which enabled the Nazis to re-arm?
– It did not strengthen the Nazi movement. Moreover, Sir Montague Norman does not masquerade.
– The honorable member is quibbling; he will not give a direct answer to a direct question. Here is further material which was rejected by the censor -
Mr. J. S. Garden said that on the day Mr. Essington Lewis was appointed Director of Munitions by the Menzies Government, the Broken Hill Proprietary Company Limited sacked every trade union official in the steel works.
The same methods were employed in Germany. By allowing these things the people were giving encouragement to the development of fascism in Australia.
That statement is a fact. The article then referred to Messrs. Thorby and Archie Cameron, prominent supporters of the Government. That part of the article which was censored stated -
No self-respecting Labour man would cooperate with a government which had as members such men as Messrs. Thorby and Archie Cameron .
The next section of the article which the censors excluded read -
Any one. who did anything real for the people was called a Communist.
The Government should look for the real Fifth Columnists among those people - persons who by their actions in the past have betrayed their country. They were the people who should be in concentration camps.
The trade union movement had warned the people about von Luckner while those in high places were entertaining him.
This German visitor was admittedly being entertained by friends of the honorable member for Wakefield (Mr. Duncan-Hughes), among others, at the very time when the trade union movement was advising the people of Australia that he was here for a nefarious purpose. The censor excluded those comments from the report. The next excluded paragraph read -
The restriction of civil liberties and the threat of military conscription were hanging over the heads of the people like the sword of Damocles.
Conscription was a real issue at that time. In fact, it is an ever-present political issue. The Labour party has done its best to warn the people of the danger in this respect, but the censorship power is being used to prevent the publication of comment of that nature. It is unfair that the view of the Labour party should be suppressed on such an important subject.
We consider that the censorship power is being used for purely political purposes and that the political friends of the Government are being protected by it. In this connexion I refer, by way of illustration, to the censorship of certain statements which I have made concerning the military boots scandal and the action taken by unscrupulous boot manufacturers to rob the public. It will be remembered that a conscientious and honest public servant named Gill was removed from his position in Sydney because he refused to pass shoddy foot-wear which, the manufacturers desired to supply for military purposes. It was said that Gill was temperamentally unsuited for his job. The following paragraph covering my statement on this subject was censored : - “ This man “, declared Mr. Ward, “ was shot from Sydney to Melbourne because he is incorruptible and manufacturers could not get at him. Because he would not pass inferior boots they had a deputation, and the Minister took the part of the profiteers, as he always has. An efficient officer has been victimized for doing his work.”
Gill, Mr. Ward added, had been succeeded by W. B. Austin, brother of the managing director of the Austin Shoe Company, which tendered for government contracts. The Government had something to answer for.
Although every word in that paragraph is true, it was censored. The Government doe3 not desire the public to know the facts in these matters.
I now hold in my hand a pamphlet prepared by the Australian Labour party for distribution to its branches and supporters. It bears on the front page the words “ Australia faces a crisis I” underneath which are the words “ Censored : “Workers’ Press “. The censor struck out the word “ Workers “ and wrote in place of it the word “ Communist “. I have no doubt that the purpose of that alteration was to suggest that only Communist matter was being censored. The purpose of the pamphlet was to direct attention to the activities of fifth columnists in France, and to the clanger of Australia from Nazi propaganda. There was no justification for censorship in connexion with it. Honorable members opposite are permitted, nowadays, to say almost anything they like about the capitulation of France, and many outspoken statements have been made ; out whenever any members of the Labour party attempt to express their view on the subject, they are hampered by the restrictive action of the censors. I desire to know why this attitude is adopted towards the Labour party and not towards the United Australia party.
The following article, written for publication in Progress, was completely censored : - “ Censorship is as ominously oppressive as it wag in France .before the people discovered the
Germans were inarching in … It has harmed Britain’s cause more than a night’s German bombing.”
So says the New York Times correspondent in London, reported in the Sydney Sun. Let Australians ponder the terrible weight of these words. Let them remember how France (and all the world) was duped by tales of an impregnable Maginot Line stretching to the channel … of a people united despite repression . . . which could never be turned from its British alliance … of fatal defects which could have been remedied if the censor had not suppressed reports of them.
Australians at least should resolve to tear these blinkers from their eyes and find the real facts.
I submit that what I have read was fair comment. My next illustration has relation to Smith’s Weekly, which has recently suffered severely from the attentions of the censor. So long as this newspaper published articles in praise of the Prime Minister, it was’ given practically a free hand, but since it has changed its policy in that regard, it has been severely treated by the censor. On the 23rd November, Smith’s Weekly published the following paragraph : -
We hate to say it, but our Government is plain stupid.
Blame the Party system if you like, but that won’t help you. Blame rather yourselves for where you and all of us are to-day.
We are sheep who have gone astray.
Look at those in charge of a great country.
Who are they?
Take Menzies. When he bestirs himself sufficiently to address the .people, he reduces us to the depths of despondency.
He is ever the bearer of bad tidings. His last meanderings were on the deadly peril of Australia, and what taxation is about to befall.
Nobody minds paying, if he knows what it is all about. Menzies, however, keeps that to himself, as he does everything else.
A leader would have us ready and eager to dig for the last shilling.
He is Minister for Information. His department placards the country with a comic figure with a zip fastener for a mouth. “ Don’t talk, the enemy is listening.”
About the only person who doesn’t talk is Menzies. Are the people the enemy? You would think so.
He had something to say the other day about government by regulation. Let him try it!
Distrust of Democracy is defeatism. Democracy means leadership. And this continent hasn’t got it. When the wail, “ trah “ (betrayed), arose in France, it wasn’t on account of What her leaders did. It was what they didn’t do. So democracy collapsed.
The publication of that article brought down upon Smith’s Weekly the wrath of the censors. The whole of the matter proposed to be published in that newspaper must now be submitted to the censors for examination. As an illustration of the attitude of the censors towards that newspaper, I direct attention to the excisions made from an article intended for publication under the heading “Where and How could Japan Strike?” As the article had been published in the New York Times and also in a London newspaper, it is hard to understand why it could not also have been published in Australia, seeing that Australia is much more concerned about the activities of Japan in the Pacific than is either the United States of America or Great Britain.
Smith’s Weekly also desired to publish a letter from the mother of a boy in the 2nd Australian Imperial Force. and a letter from the boy himself, but it was prevented from doing so, although the purpose of the mother in forwarding the letters for publication was simply to awaken the people of Australia to the apathy of the Menzies Government. I do not propose to read the whole of the matter contained in the letters, but it was of such serious import that the Government should pay some attention to it. The boy told his mother that he did not need more socks, for he could buy them “ at the canteen for 4s., hand-knitted, donated socks, mark you “. The boy’s letter also contained the following statements :-
Can’t you women, who are so eager to give us socks, see that we are given rifles, good lilies? r think some of us get second-hand rifle* when we go overseas.
We’ll be lucky if we can use the.3e, however, for we’ve only a few old weapons to practise with, and we have to take turns in the use of these.
I’m lucky. I handled one once, but wo can’t use many bullets. They cost Id. each. The Army can’t afford that cost.
The boy appealed to his mother to try to do something to increase the supply of war equipment.
The opinion of the Labour y.arty is that the members of the censorship staff have been selected by persons without a proper knowledge of the needs of the situation. Many censors are as ill- informed on everyday affairs as they are on the pitfalls which lie in the path of journalists. They not only exclude matter from reports, but they also alter phrases in such a way as would render newspapers which published the altered reports liable to action- for damages. Skilled journalists know how they may safely direct public attention to matters that may be described as public scandals without making their newspapers liable to prosecution. As very few of the censors possess this knowledge, many articles are altered in such a way as to make it unsafe for the newspapers to publish them. Moreover, to use a blunt term, censors have opportunities to engage in corrupt practices. Newspapers which desire to expose war profiteers -who are exploiting the nation are hindered from doing so by the activities of the Censorship Department. Many instances of profiteering have been suppressed.
– Order ! The honorable member has exhausted his time.
– As no other honorable member has risen, I shall take my second period in order to direct attention to two other instances of suppression. One wa3 mentioned by the honorable member for Dalley (Mr. Rosevear). It was the case of the Century newspaper which had difficulty with the censorship. Mr. Lang, M.L.A., wrote for that newspaper an article calling attention to the shortage of defence equipment; that was rejected by the censor. The editor, Mr. McCauley, then wrote on the same subject a leading article which was also rejected. In order to test whether there was any political censorship in this country, he then took from the Sydney Sun a leading article dealing with a similar subject, and, having had it re-typed, submitted it to the censor who rejected it. Mr. McCauley then had an interview with the censor. Together, they went over the article line by line, and the censor advised him that none of the material was permissible. Mr. McCauley then handed to him a copy of the Sun containing the article. Immediately he had read a few lines of the article, the censor said, “ You have trapped me “. On the next day, tlie ban on the Century was lifted, showing conclusively that a political censorship had been operating. I. do not say that in all cases what appears in the press meets with my approval; it does not. I have not approved of certain criticism of myself in the press, but I do not contest the right of anybody to express opinions adverse to me. The liberty of criticism should be reserved.
The second instance of political censorship occurred in respect of an article written for Progress about Mr. Ernest Bevin, a Minister in the British Government. The censor excluded that article because Mr. Bevin is associated with Mr. Churchill, but, if Mr. Bevin were in opposition, the censor would not have been at such pains to ensure that the article did not appear. That instance is not unique, because, if one criticizes a member of the Labour party or a trade union leader for his actions on behalf of the workers, that criticism receives unlimited press publicity, whereas the hand of the censor immediately falls on any one who attacks in the newspapers profiteers or members of this Government.
In order to demonstrate the sincerity of its invitation to the Labour party to co-operate with it, the Government must prove to the point of demonstration that the censorship does not operate for political purposes, and ensure that the Labour movement is not hampered in expressing its opinions.
– I wish to discuss the question of the continuance of the Department of Information, which is one of the worst-conceived departments that the Commonwealth Government has ever inaugurated. Its management has been even worse than its conception. It was never a department for which there was any justification in the scheme of things in Australia. It was merely copied from the department which was created in the United Kingdom, probably as an experimental measure, and for which, like many other experiments, the United Kingdom has been sorely sorry. The Department of Information is a department of bits and pieces. For instance, the censorship section was taken from the Department of the Army, and the photographic section from the Department of Commerce. The department has no history, and it should have no future. An interesting debate occurred on this question last year, when the late Sir Henry Gullett, who was then Minister for Information, told honorable members that in that year the cost of the department would be £22,500. That amount has grown to £193,200 for this year. That expenditure the Government cannot justify. This department is unnecessary and mischievous. It has been sorely mismanaged. At no time and under no management has it justified its existence or earned the good feeling of those who are most closely associated with it in business. I do not know whether it is true, but it is significant that we were told in King’s Hall that all mention of the proceedings in this chamber up to the time of the secret sitting had been censored, and that nothing about them would appear in the press. In view7 of the things of which we have knowledge, if that report be true, there should be some interesting discussion later to-day. Nothing can be said to justify the continuation of this department at a time when we are piling taxes on the backs of the people in order to fight the war. If it be left to my vote to decide the issue, this department will not continue to exist. It has critics in high places, and it would be interesting to me to know whether the Treasurer (Mr. Fadden) has any instructions on this matter, whether the Government intends to press for the retention of the department, or whether it is prepared to recognize the hostility which exists towards this organization throughout the country, and, bowing to the inevitable, allow it to go into oblivion.
– I listened with interest to the attack on this department made by the honorable member for Barker (Mr. Archie Cameron). Eis attitude is not new. I recollect that when the department was initiated, he strenuously opposed it. The full investigation and overhaul which the department received at the hands of the Advisory War Council and the unanimous decision of that council, not only to continue the department, but also to extend its activities, adequately reply to any criticism of it. The department is criticized only by those “who are ignorant of the value of what it has done. A new department invites criticism, but to be destructively critical is the easiest thing in the world.
– Does the Treasurer approve of the censoring of a Labour journal in the circumstances to which I referred ?
– Before I come to a decision, I should have to have before me the arguments of both sides. On the facts as presented by the honorable member for East Sydney (Mr. Ward), I do not approve of the censor’s action, but it is not for me to approve or disapprove. 1 rose to reply to the honorable member for Barker who invited me to do so. As Treasurer, I was looking for every possible means to reduce expenditure. I was a critic of the department, but my criticism was based on ignorance. I am now satisfied, as the result of the recommendations of the Advisory War Council as to what can be done with the department, that its continuance will be in the interests of Australia.
– Does the Treasurer agree that the staff was poorly selected?
– I wish to comment on certain remarks made last night by the honorable member for Barker (Mr. Archie Cameron). I understood him to say that certain passages had been deleted by the censor from the Hansard proof of a speech which he made in this House, and I think he said that the same kind of thing had happened on a previous occasion. At that time, it was stated that no censorship applied to reports of parliamentary debates. I understand that Hansard reports cannot be censored without the authority of this Parliament. The censorship operated upon that basis during the last war. Censorship of Hansard reports is very dangerous, and should not be applied without the authority of Parliament. The honorable member for Barker has performed a public duty by drawing the attention of Parliament to the fact that Hansard reports of his speeches have been censored.
I now propose to say something about the Department of Information. I do not object to such a department so long as it is, in fact, a department of information. Up to date, however, it has been a department of suppression, which merely stifles opinions unacceptable to the Government. It has created mistaken views among the public by not merely suppressing one class of public opinion, but also giving biased and partisan statements. When the department was created, I suggested that it should undertake the work of convincing the public by argument and fact that what it was doing was right. The proper way to answer wrong arguments is to advance better arguments. The more you prevent people from saying things, the more you will create in the minds of independent fair-thinking people the belief that there must be a substratum of truth, at any rate, in the opinions expressed ; because most people believe that views which can be easily answered will be answered, and that statements are suppressed only when they cannot be answered. The Department of Information should deal in that way with various opinions to which it takes exception. If the department adopts that policy it may prove to be worth while. I should like the Treasurer (Mr. Fadden) to give us details of the modifications proposed to be effected, because this department has caused a great deal of heartburning. I am glad to see that the control given to one press magnate over the whole of the Australian press has, apparently, ceased. With regard to censorship, I think the position is this: The censorship has as its raison d’etre the desire that tlie enemy shall not be supplied with facts which may be useful to him. It was conceived in that way by Napoleon, and on that basis it played a very important part in the American Civil War, when the Union newspapers had to be restrained from publishing information of value to the Confederate armies. Censorship when applied in that way is justified. I do not deny that it can play an important role in a time of war, but it should not be used to suppress opinions. The honorable member for Wakefield (Mr. Duncan-Hughes) seems to think that even though a statement may not be a matter of fact, the censorship is justified in- suppressing it. I agree that what is a matter of fact is very largely a matter of opinion. The censorship is justified in forbidding the publication of facts and opinions, the free publication of which is likely to help the enemy; but it is not justified in suppressing other opinions or statements of fact. I am reminded of the famous dictum of Lord Bramwell - “ The state of a man’s mind may be as much a fact as the state of his digestion”. I admit that the free statement of opinion on certain matters may be as useful to the enemy as statements of objective fact. But the honorable member for East Sydney (Mr. Ward) has shown that the censorship makes fish of one writer and flesh of another. That was our experience in the last war, when the censorship forbade one writer to say exactly the same things as it allowed another writer to say. I, myself, have given an instance since the outbreak of war. I have pointed out that the censorship forbade the republication in Common Cause of articles which it had previously allowed to be published in the Labor Call. During the last war, the censorship was used in a tyrannical way with the result that the public was given an utterly distorted view of what was happening. One very striking instance was the action brought by the present Attorney-General (Mr. Hughes) against Senator David Watson. The case ended in a complete withdrawal of the action by Mr. Hughes, who also agreed to pay all of Senator Watson’s costs. Nevertheless, the only report allowed to be published concerning the case was that Senator Watson had withdrawn the statements complained of. Because the censorship was used in this way, people acquired a dread of it. The censorship was not then, and is not now, used to prevent the enemy from getting information, but merely to prevent the dissemination of opinions which are not to the liking of the Government.
– I should like to know for what purpose the Department of Information requires the sum of £193,000. It is with diffidence that I address my inquiry to the Treasurer (Mr. Fadden) in view of the fact that during- the last few days he has been doing more than one man’s work. This department used to spend roughly £20,000 a year, but at the time of the last election campaign it was spending, £50,000 a year, which I considered to be too much. Now, the department’s vote is to be increased by £148,000 to £193,200. I have never believed in this department, although I have always been willing to be convinced of its usefulness. Every one will admit that censorship is indispensable in a time of war. I have always believed, however, that the censorship should be part and parcel of the External Affairs Department. I fail to see why any great cost should be involved in the dissemination of information concerning Australia’s war activities. I have closely followed the operations of this department since its inception. I have followed some of its broadcasts, and I have no hesitation in saying that some of those broadcasts were rubbish. Eventually, I could not bring myself to listen to them. To-day the reaction of many people is to switch on to something else immediately the department’s broadcasts commence. Honorable members will recall that for a half-hour on one day of the week the department’s broadcast consisted of a parody on the creed which I learned at Sunday school. In addition, films exhibited by the department with the object of publicizing Australia’s war effort can only be classed as not bad; they certainly cannot be called good. Last Tuesday, at the local theatre, honorable members had an opportunity to view a film prepared for the Shell Company by Herschell, of Melbourne, and for which the commentary was composed by Frank Cave. That film was excellent. When the department desires to make further pictures, it should engage the services of a man like Herschell. I am a great believer in the effectiveness of propaganda through the screen. It ranks next to the wireless as a medium of publicity. Thousands of Australians go to the pictures every week. I have not yet seen a good publicity job accomplished by the department. Apart from what I have heard and seen of its work over the air and on the screen, I am at a loss to know what the department does with, its money. I understand that, on the recommendation of our Minister in “Washington, the department now proposes to carry out certain propaganda on behalf of this country in the United States of America. We should do all in our power to publicize Australia in that country, because it is there that we can do the most good. Before this work is undertaken, however, I should like to be assured that we shall receive value for the money allocated for this purpose. Publicity of the standard of that conducted by the department in the past will be useless in the United States of America.
– I support the contention of the honorable member for Bourke (Mr. Blackburn) that it is dangerous to allow speeches of honorable members in Parliament to be censored. I draw the attention of honorable members to circumstances which arose in the Queensland Parliament in 1917 when the Ryan Government decided that speeches made in that Parliament were not to be subject to censorship. The Minister for the Navy (Mr. Hughes), who was then Prime Minister, and just as irascible as he is now, and equally irresponsible, threatened to send soldiers to occupy the Government Printing Office in Brisbane if his ukase were not obeyed. The Premier threw a cordon of police armed with rifles around the building. It was a symbolic gesture of defiance in order to preserve the sovereign rights of Queensland against the meddling interference of the right honorable gentleman who believed that he had the right to resurrect, and rule by, the defunct doctrine of the Divine Right of Kings. Five years later, the then Leader of the Country party (Sir Earle Page) ended the prime ministerial career of the right honorable gentleman by “ pointing the bone at him “ and causing his dismissal from office. We do not want such conditions to be repeated. As a nation, we are older and wiser now, and should not permit anybody to censor the parliamentary debates, even though it be at the expense of the honorable member for Barker (Mr. Archie Cameron). Since I entered this chamber, his speeches have become more and more moderate. To-day the censor would not be justified in applying the blue pencil to any of his remarks.
This expensive incubus, the Department of Information, of which the Treasurer (Mr. Fadden) is now the champion, is not, in the public estimation, the necessary institution that the honorable gentleman believes. I read recently that propaganda may be defined as “ the other fellow’s case put so convincingly that it annoys you “. If we are to put over our propaganda with any degree of success, we must do it more convincingly than we have during the last twelve months. This department incurs much wasteful expenditure. A small fortune is being spent in Melbourne in the use of the Postmaster-General’s receiving station at Mont Park, together with two land lines to Capel Court, in Collins Street, where the main work of the Department of Information is carried on. The control section is located at Mont Park. Four intelligence sections with full staffs, representing the Army, the Navy, the Air Force and the Department of Information, are employed to listen-in to overseas short-wave broadcasts. That quadruplication is unnecessary, and is costing too much for tlie value that it gives. In general practice, the Navy controls communications throughout the British Commonwealth of Nations, and it should be possible to establish one centralized radio reception service to supply all four departments with information. Other departments could also avail themselves of this general service.
In the United States of America, a receiving station known as the Mackay Radio was established on an island in New York harbour. It is equipped with its own battery, of receivers, and operates day and night. This is the only station to pick up all the SOS signals in the Atlantic, and is always the first to announce them. Our Department of Information has no such service. It neither picks up information, as does the Mackay radio, nor transmits information to refute enemy propaganda. What good purpose is served by having a receiving station that picks up a certain amount of news, which is then collated for purposes of information, when we do not disseminate news to counter it? An Italian wireless station claimed that an Italian submarine was responsible for sinking two ships between New Zea.and and Australia. We did not contradict it. If we must have a centralized station, it should be established on the basis of the New York system, and teleprinters should be installed to transmit information to various departments. Six receivers costing £100 apiece, with three or four operators to each receiver, working in shifts, would be adequate provision for the reception of news services. The cost of the reception of news, to the Department of Information alone, must be £200 a week. I ask the Treasurer to bring my suggestions under the notice of the head of the department, who has replaced its first director-general. That gentleman, Sir Keith Murdoch, seems to believe that he should play in this war the role that the Attorney-General (Mr. Hughes) played in the last war ; that he is the omnipotent power, and the chief executive to decide all matters of policy in Australia.
– The great increase of expenditure on many items for the current financial year requires some explanation. “ Postage, telegrams and telephone services “ have risen from £1,650 to £24,000. Even though a tremendous amount of cabling may be involved, the increase is enormous. The vote for “ Publicity material and services “ has increased from £7,500 to £61,000, a rise of SOO per cent. Last year no expenditure was incurred on the renting of buildings ; this year £4,800 has been provided.
The Department of Information does not present an easy subject for discussion, and Australia is not the only country that has experienced difficulty, as a similar department in England has not worked with outstanding success. Probably it has been the least successful of the departments. First Lord Macmillan and then Sir John Reith were early placed in charge. They were succeeded by Mr. Duff Cooper and Mr. Harold Nicholson, who are more than ordinary journalists; they are literary men. Nevertheless, one gathers from comments that the department has not been a great success, although it is so much closer to the centre of the war than is Australia.
The late Sir Henry Gullett had many qualifications which should have made him an outstanding Minister for Information, but I do not think that it was one of the most successful offices that he held. Later, a leading newspaper editor was placed in charge of the department. An extraordinary variety of views has been expressed about it. Some weeks ago, a lady in South Australia, who is associated in some way with the department, said to me, “ For goodness sake abolish it. It is an awful waste of money and does no good.” A similar opinion was expressed in Victoria, but I have heard that in New South Wales there is a body of writers who perform excellent work and who really suffer only from lack of encouragement. .With this conflict of views, it is difficult to know what we should do. As the Treasurer (Mr. Fadden) has stated that the Advisory War Council strongly favours its retention, perhaps we should endeavour to develop it and make something out of what is at present a very stunted growth. The remarks of the honorable member for Bourke (Mr. Blackburn) rather encourage me to discuss the problem of propaganda, but I shall do so in only the broadest outline. The work that this department performs is based upon the purpose of the leading article. Very often this column is written with sincerity, but it is repeated month after month and year after year until eventually it penetrates the thickest head and people come to believe that it is gospel. That statement represents the best side. Sometimes the converse is the case, and articles are written with malice aforethought and repeated time after time in order to deceive and mislead the people. We have a notable instance, according to our point of view, in the works of the German Minister for Propaganda, Dr. Goebbels.
Our Department of Information has not been so successful as it might have been, because we normally enjoy such freedom of speech that it is extremely difficult for us to bring ourselves down to any general, standardized point of view and form of expression. Professor Hancock, formerly of Melbourne, and now of Birmingham, wrote an interesting commentary which was broadcast some months ago. He said that while freedom of expression may be, and is, an excellent thing within the prescribed limits of decency and blasphemy in peace-time, a different position arises when the country is at war. In the national interest it may be necessary to restrict that freedom of expression to a point to which the public would not wish it to be restricted in peace-time. Professor Hancock is in no sense a Conservative like myself ! He holds advanced and progressive views on certain matters ; but he says candidly that it is better for us that there should be restrictions of liberty at present, rather than that, by insisting upon complete freedom now, we shall imperil the whole of our structure.
– Every one will agree with that.
– That was the point which I suggested a while ago by interjection, and the honorable member came back at me on the question of facts. Facts are not entirely a matter of opinion. They are even harder than that. Either we must accept the discipline voluntarily, or have it thrust upon us, because we are fighting against people who are disciplined to an incredible degree. The propaganda to which the honorable member for East Sydney (Mr. Ward) drew attention could not possibly have any advantageous effect on our war effort. The suggestion, for instance, that Mr. Essington Lewis, on being appointed to his present responsible position, was immediately the cause of ali trade unionists in certain establishments being dismissed, seems to me to be incredible and calculated to make bad blood, which can do nothing but restrict instead of encourage the war effort. Unless we voluntarily impose self-discipline in these matters, and keep our tongues quiet to some extent, we may come to the point at which restriction will be enforced against us whether we like it or not, in order that this country may make its proper war effort.
– I agree with what the honorable member for Wakefield (Mr. Duncan-Hughes) has said about the necessity for people to impose discipline upon themselves voluntarily, and I do not think that I can do better than quote some remarks of a famous modern soldier, Tom Wintringham, who said -
Democracy is, in its essence, the way of thinking . . . that includes voluntary, understood, and thinking discipline and methods of work based on elasticity, initiative and independence.
I have always believed that factionalism in politics is wrong. I have always considered that opposition should relate to principles, not to personalities. I deprecate opposition for opposition’s sake. I believe in the party system, because principles must be stated and fought for honestly. Repression of opinion as it is practised is objectionable, because it is applied in a class state for class interests. I object particularly to the repression of arguments in favour of one class, when arguments in favour of the ruling class are not repressed. I object to cases such as those to which the honorable member for East Sydney has referred, in which one newspaper is allowed to say a thing which another is not permitted to say.
– This matter may be considered from another .aspect, and one that has been suggested by the Treasurer (Mr. Fadden) himself. We have in operation to-day an absolutely unconstitutional body known as the Advisory War Council. If the Government thinks that the Parliament will shelter behind the recommendations of a body like that, which has no constitutional powers-
– We are not sheltering behind it. We confirm its opinion.
– The Minister’s defence is that this matter was referred to the Advisory War Council, which agreed that the department should be carried on.
– Members of the council, who were the strongest critics of the department, now agree that its establishment was a wise action.
– The council is not composed of a pack of strangers. They are members of this Parliament, but the council is not recognized under the Constitution any more than is a conference of Commonwealth and State Ministers. Should this Parliament justify any action of the Government merely because it has the approval of the Advisory War Council? I kno”w where this procedure will lead us. It will be interesting to find out if the Parliament is to assemble now and again merely to register the decisions of this council.
– That is not what the Labour party contemplated when it agreed to the establishment of the council.
– The principal executive authority in this country is the Cabinet; there is no other constitutional authority. If the Parliament, and the Cabinet, too, are to surrender their responsibility to an advisory body, we shall soon be faced with an intolerable situation. That is not a threat; it is a matter-of-fact statement from one who thinks that he appreciates the trend of events. The responsibility must bo first on the Cabinet; it must make recommendations to this Parliament, which may either approve or reject them. The responsibility then falls back on the Cabinet.
In my opinion, the Department of Information is unnecessary, and its establishment has never been justified. I say, advisedly, that it is a mischievous department, and the sooner it is abolished the better. If the department is to deal with overseas news, it gets the news too late. The newspapers beat the department to it by days at any time. If it is to deal with local news, there is no necessity for such a department, because the newspapers will beat it there. At some expense to the Government, great savings to certain newspapers are to be made. It looks to me as if tens of thousands of pounds will be expended by the taxpayers for the benefit of the press in certain directions. If that be done, there must be a quid pro quo, and I shall be interested to see how the matter develops. I am strongly of the opinion that the case for the Government can always be put by the Government. The Ministry of the day is always in a position, particularly in time of war, to take steps to see that its case is presented to the people. If the Government wishes to place certain information before the country, it is not only in a position to control the
Australian Broadcasting Commission, but it can also control the whole of the broadcasting services and the newspapers. Regulations could be drafted in a few minutes which would compel any newspaper to print the truth regarding governmental activities, or prevent the printing of something which the Government thought would be detrimental from a defence point of view.
With regard to the censorship, I consider that all matters of a military character should be determined by the fighting forces. If anything went wrong with the operations conducted by any of the services, the heads of those services would be held responsible. It would not be fair to give to an outsider, who could not see the matter from the point of view of the fighting services, the right to say what reports should be published, if their publication did not have the approval of the heads of the fighting forces. As to the printing of opinions, there is a wholesome rule that in time of war the Government is entitled to expect that there shall be some restraint, and that opinions shall not be printed in such a way as to undermine the morale of the people in respect of the prosecution of the war and the justice of the cause for which we are fighting. I am afraid that on that account the sentences quoted by the honorable member for East Sydney (Mr. Ward) would not be passed by me. It looks as though the Opposition is hobbled on this matter. I derive much pleasure from seeing the honorable member for East Sydney trying to move about this chamber in hobbled feet. I am sure that he will have gyves on his wrists when next we meet, and then I shall be able to put another fetter round his neck, so that he will be in a perfectly helpless position.
I say most definitely that we must be very careful how we tread with regard to the Advisory War Council. Its formation will not be approved by the people at large. After all, it represents only a compromise, and, in time of war, I have never known it to be possible to get anywhere by means of compromise. We either believe in what we are fighting for or we do not. We are either sure of our methods or we are not. There has been too great a tendency in the last fortnight io say that some people are not sure where they are going. Like Irish candidates for election to Parliament, they present to their audiences a number of views, and say that, if those opinions do not meet with approval, they are willing to change them.
– I am not in charge of the Department of Information, but I am prepared to give to honorable members the benefit of such information as is available to me. I desire to re-assure them that I was one of the strongest critics of the department, and one of those most desirous of abolishing it. In my capacity as Treasurer, I have investigated the increasing expenditure of this department, and, in the light of information which I have not with me at the moment, but which I shall be pleased to make available to honorable members, I am now quite satisfied that the proposed vote will be wisely expended. I do not say that there has not been a good deal of wasteful expenditure in the past. The honorable member for Melbourne (Mr. Calwell) has drawn attention to many weaknesses which, as the result of the re-organization of the department, will be eliminated. His observations will be taken into consideration.
If the Advisory War Council is not to consider war activities such as those of the Department of Information, what is it to consider? What was it set up for? Absence of constitutional authority for its establishment need not be discussed. The fact remains that it has been established, and that certain functions are to be given to it.
– It was not set up to usurp the powers of the Parliament.
– Amongst its activities is the dissemination of information in respect of the war. Members of the council requested a thorough investigation of the work of the Department of Information. Being reasonable men, on the basis of the irrefutable information available to them they decided that the department should be reorganized, and that its activities should be extended in a direction which will be advantageous to the primary producers.
– How can it help the primary producers?
– Certain proposals which are contemplated will help them, but I cannot give the details now. I shall, however, make the information available to honorable members. I am confident that, when that is done, even the honorable member for Barker will not continue his resistance.
Proposed vote agreed to.
Proposed vote - Department of Civil Aviation, £49©,000 - agreed to.
Department of Trade and Customs.
Proposed vote.. £734,000.
– I have here an extract from the Melbourne Argus relating to the price of knitting wool, which reads -
Country Women are Indignant.
Cobden, Monday. - Indignation at the price of knitting wool was expressed by Curdievale members of the C.W.A. at the south-western group conference at Lismore.
The increase, they said, must be viewed with alarm, seeing that tlie product was so essential to the welfare of men on service.
It was pointed out that wool at 13*d. per lb. average to the grower was, when converted into skeins, sold at 13s. 4d. per lb., and that margin, it was contended, was too wide. It looked as though the patriotism of thousands of women knitters was being exploited.
The ladies who complained are not members of that great, humanitarian organization to which I have the honour to belong, and had no political motive in making their strongly worded protest. I suggest that this complaint be brought under the notice of the Commonwealth Prices Commissioner. I could say a good deal about this gentleman, who is paid a high salary and has convinced himself that he is doing a good job in checking profiteering, and I may do so on a more appropriate occasion. Profiteering is not being prevented in this instance, and there is great public indignation at the failure of the administration to stop the exploitation of the patriotism of the people.
Recently, I received a letter from a constituent who told me that last Thursday week retailers of tobacco and cigarettes were allegedly short of supplies, whereas on the following morning, after increased prices had been authorized, they had ample stocks. Cigarettes which were 3d. a packet in 1914, rose to 6d. during the last war, and prices have not been lowered since, notwithstanding that some makers reduced the number of cigarettes in a packet from ten to nine and reduced their size. I desire to know why the price was raised almost at a moment’s notice. Old stocks which were bought at low prices are being sold at the new prices. Cigarettes which before the recent rise of prices were sold at 9d. a box, now. cost lOd. ; others, which formerly were sold for 6d., now cost 7d. Apparently, some traders received information that the excise duties on these goods were likely to be increased, and they are doing well out of the increase. This kind of thing is happening, notwithstanding the assurances given in this House that the reprehensible practice of profiteering would be prevented.
I am advised that the price of matches has increased nearly 50 per cent. At noon on the day before the higher prices now charged were permissible many grocers professed to have no matches in stock. The price was then 6d. a dozen boxes, but on the following Monday, when the price was S-Jd., they had ample stocks for sale. Prices have risen despite the best intentions of the Government and the machinery established to protect the public. Such action by greedy traders is detestable. Evidently human nature has not changed since the last war; and although on this occasion fewer big fortunes may be made out of the nation’s extremity, some people will make huge profits. Honorable members will recollect that during the last war some, traders in the capital cities cornered cement, wire netting and galvanized iron, and grew rich because of their lack of principle.
The Central Wool Committee in Melbourne employs H. A. McCandlish and Company Proprietary Limited to cart wool which comes under its control. Wool sent to Melbourne is carted from the railway station to the store at a certain rate, but if it be taken out of the store later and carted to the wharfs or elsewhere, a higher rate is charged. I do not know whether the increased rate is a charge against the British Government, or whether the exaction will be made at the expense of the Australian wool- growers. There is, however, a dissimilarity of rates, which needs to be investigated and explained. I visited some of these stores, and at one of them, close to the Victoria Docks, I was told that wool was carted to it at 4d. a bale, whereas, if carted to the docks about 200 or 300 yards away, the rate was only 3d. a bale. I am also informed that for wool which is carted to Port Melbourne or other suburban centres higher rates are charged than for cement or other materials. The Prices Commissioner could well cast a critical eye over these costs. I believe that the Master Carriers Association fixed the rates, and naturally did not fix them too low. Probably, its members have no more, and no less, patriotism than have other sections of the community. Apparently, in this instance, they had an eye to the main chance. My information is that at times H. A. McCandlish and Company Proprietary Limited employs other firms to do its carting, and that in selecting firms for this work it has shown discrimination. It is possible that this company will be in a stronger financial position at the end of the war than if the war had not occurred. I have detailed information on this subject, which I am prepared to submit to the Minister for his own perusal, but not for reference to any of the companies concerned, so that he may extract from it sufficient information to guide the Prices Commissioner in regard to my complaint.
– I trust that strong action will be taken to prevent profiteering during the war.
– The Estimates covering the Prices Commissioner’s office have already been passed, but, remembering that the honorable member for Melbourne (Mr. Calwell) had been told earlier that the matter to which he has just referred could be dealt with when the Estimates for the Trade and Customs Department were under consideration, I took no exception to his statement. As to his remarks concerning knitting wool, the position is that knitting wools have been proclaimed, and prices fixed. Those prices, which were subject to the closest investigation, have been published for the information of the public.
The honorable member referred to knitting wools for use in the manufacture of articles for members of the forces. Following representations from various patriotic bodies, including the Red Cross Society, and the Comforts Fund executive that they should be permitted to obtain wool at cost price, an arrangement was made that this should be permitted, provided that the societies concerned would distribute the wool and give an assurance that it would be used solely for the purpose of making articles for members of the forces. I understand that so far no steps have been taken to implement that agreement, but the offer is still open for acceptance. Apparently, the honorable member’s correspondent was not aware of these facts.
The price of cigarettes has already been proclaimed,but in consequence of the almost utter impossibility of discriminating between old and new stocks, permission was granted for the increased price to be charged for both old and new stocks on the understanding that when the price is reduced at a later date the lower price should also apply to both old and new stocks.This course has already been taken in regard to certain other goods the price of which had been fixed, and upon subsequent review, reduced.
– Is the Minister able to inform me whether the wool sold to Australian woollen mills under the appraisement scheme is disposed of at the price paid for Australian wool by the Government of the United Kingdom? I have had some correspondence on this subject.
– I am unable, offhand, to furnish that information. Wool prices do not come under the review of the Prices Commissioner. They are dealt with by the Department of Commerce.
I am in accord with the views expressed by the honorable member for Melbourne concerning matches. Unfortunately some retail suppliers of matches and certain other commodities close down on their stocks when they anticipate that an increase of prices is likely. If specific instances of such action can be brought to my notice I shall refer them to the
Prices Commissioner for action, but it is manifestly impossible to police the transactions of hundreds of thousands of small suppliers.
I shall be pleased to avail myself of the offer of the honorable member to examine any correspondence that he can make available to me concerning cartage charges.. If necessary I shall request the Prices Commissioner to make an investigation of the position.
Proposed vote agreed to.
Proposed votes - Department of Health, £149,000; Department of Commerce, £543,000- agreed to.
Proposed vote, £914,000.
– I refer the Treasurer (Mr. Fadden) to the proposed expenditure of £5,200 on the entertainment of distinguished guests and visitors. The vote under this heading last year was £1,500, and the actual expenditure £1,472. Is the Treasurer able to inform me why a much larger amount is being provided this year?
Mr. FADDEN (Darling Downs- Treasurer [6.51 a.m.]. - It is anticipated that the entertainment of a greater number of distinguished visitors will be necessary this year. We hope to receive a delegation from Rhodesia. Expense has been incurred already in connexion with the entertainment of the goodwill mission from Thailand. The visit of journalists from the United States of America entailed some expenditure, but it will be agreed that any money expended in that connexion was worth while because Australia received a great deal of publicity through the visit of the American journalists. A delegation also visited Australia some time ago from New Zealand.
Proposed vote agreed to.
Proposed votes - Refunds of Revenue, £2,000,000; Advance to Treasurer, £5,000,000; War (1914-18) Services Payable out of Revenue, £1,277,000.
Proposed vote - Commoniwealth Railways, £937,000- agreed to.
Proposed vote, £12,829,000.
– For some time past there has been considerable discontent regarding the handling of mails for the Australian Imperial Force. In every capital city the newspapers have published letters of bitter complaint about the system. It is amazing that most of these letters have had the names of the senders appended for publication. Some months ago it was the practice of the then Minister for the Army to blame the Postal Department, and for the then Postmaster-General (Mr. Archie Cameron) to blame the Department of the Army for the delays. Recently the Anglican Bishop of Gippsland wrote to various newspapers on the subject. In a spirited reply the then Minister for the Army said that the trouble over the mails had occurred months earlier, and had been rectified. His explanation has not satisfied the public, for complaints continue to be made, not only about the delivery of letters, but also about delays with cablegrams. In discussing this aspect of the subject with one person, I was amazed to learn that on one occasion a cablegram had taken a fortnight to reach London. Even allowing for the disorganization of communications due to the war, it is extraordinary that a cablegram should have taken so long in reaching its destination.
– I take it that the honorable member is aware that the reason for the delay in dealing with cablegrams is that the service is overloaded, due to dislocation of the normal mail services?
– I appreciate the fact that some of the trouble may be due to that cause; but I understand that delays occurred some time ago because letters addressed to Palestine went to England, and letters from England went to Palestine. It would be interesting to ascertain what happened to the letters posted at the end of May which were sent to Palestine and have not yet reached England. According to information- published in the press, only one or two mail consignments have been lost at sea. I believe that a good deal of the difficulty could be overcome if the Postmaster-General’s Department and the Army Department would alter their instructions to the public concerning the posting of letters to members of the forces. At present, letters must be addressed “ Australian
Imperial Force Abroad “ although often the writers of letters know the whereabouts of the addressees. As the censors allow newspapers to publish statements that certain members of the forces are in London or in some other theatre of war, there could surely be no danger in allowing letters from Australia to be directed to known addresses. More sympathy and common sense is required in the handling of mails and cablegrams. I suggest that the administration of this activity should be placed under the supervision of an organizer not associated with either the Postmaster-General’s Department or the Army Department, who possesses organizing ability and sympathy.
– I shall bring the honorable member’s representations under the notice of the Postmaster-General.
Proposed vote agreed to.
Part 3. - Territories or the Commonwealth.
Proposed votes - Northern Territory, £394,360; Australian Capital Territory, £396,600- agreed to.
Proposed vote, £81,040.
– Recently I asked questions about the progress which has been made with the proposed road from Salamaua to Wau for which the money has already been raised. I understand that the survey of the end sections of the road has been completed, but that only one surveyor is working on the middle section. Pending the completion of the survey of the middle section, construction work could be commenced on the end sections. The feeling is abroad in New Guinea that the delay in the construction of the road has been engineered by the aerial transport companies. I should welcome a statement from the Assistant Minister (Mr. Collins) as to the position.
– Two surveyors are engaged on the middle section of the Salamaua- Wau road. The surveys of the end sections are almost completed and construction work has been started. It is my intention, in co-operation with the appropriate department, to carry out the promise of the Government that this road will be built. I consider that it is necessary if Australia is to fulfil the undertaking to develop New Guinea which it gave when it took the mandate. At a later stage I shall make a complete statement on what has been and is to be done. The delay which has occurred is largely attributable to suggestions that have been made for the proposed road to take an alternative route which would open up much arable land. The main purpose of the Salamaua.-Wau road, however, is the provision of a land route to the goldfields. I shall examine the proposals for roads to open up arable lands, but their importance is secondary to that of the route to the gold-field.
Proposed vote agreed to.
Proposed vote - Norfolk Island, £4,000 - agreed to.
Motion (by Mr. Fadden) agreed to -
That the following resolution be reported to the House: - That, including the several sums already voted for such services, there be granted to His Majesty to defray the charges for the year 1940-41 for the several services hereunder specified, a sum not exceeding £90,505,000.
Standing Orders suspended ; resolution adopted.
In Committee of Ways and Means:
Motion (by Mr. Fadden) agreed to -
That, towards making good the Supply granted to His Majesty for the services of the year 1940-41, there be granted out of the Consolidated Revenue Fund a sum not exceeding £67,167,800.
Resolution reported and 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 passed through all stages without amendment or debate.
Additions, New “Works, Buildings, &c.
Motion (by Mr. Fadden) agreed to -
That there be granted to His Majesty to the service of the year 1940-41, for the purposes of Additions, New Works, Buildings, &c, a sum not exceeding £3,421,000.
Standing Orders suspended; resolution adopted.
Resolution of Ways and Means founded on resolution of Supply, reported and 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 passed through all stages without amendment or debate.
The following bills were returned from the Senate without amendment or requests -
Morgan-Whyalla Waterworks Agreement Bill 1940.
Sales Tax (Exemptions and Classifications) Bill 1940.
Sales Tax Assessment Bill (No. 1a) 1940.
Sales Tax Procedure Bill 1940.
Sales Tax Bill(No. 1a) 1940.
Sales Tax Bill (No. 2a) 1940.
Sales Tax Bill (No. 3a) 1940.
Sales Tax Bill (No. 4a) 1940.
Sales Tax Bill (No. 5a) 1940.
Sales Tax. Bill (No. 6a) 1940.
Sales Tax Bill (No. 7a) 1940.
Sales Tax Bill (No. 8a) 1940.
Sales Tax Bill (No. 9a) 1940.
Motion (by Mr. Fadden) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend the Post and Telegraph Kates (Defence Forces) Act 1939-1940.
Bill brought, up and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to extend the benefits of the Post and Telegraph Rates (Defence Forces) Act 1939-1940 to representatives of certain organizations which are engaged in providing welfare services to members of the Commonwealth Forces in Australia or on active service. The present act applies only to members of the forces as defined in the act. It is considered that persons who are attached to the Forces and performing duties for these organizations should be entitled to avail themselves of the cheaper mail and telegram rates provided for in the act. The bill inserts in the definition section of the act a definition of “ representative of an organization “. The organizations are to be such as are authorized by the Minister for Defence Co-ordination to provide philanthropic, welfare or medical services for members of the forces. It is proposed to authorize, for the purposes of the act, organizations such as the Red
Cross Society, the Young Men’s Christian Association, the Australian Comforts Fund, and the Salvation Army.
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.
Motion (by Mr. Fadden) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend the Gold Tax Collection Act 1939 as amended by the Gold Tax Collection Act 1940.
Bill brought up and read a first time.
Mr. FADDEN (Darling Downs-
Treasurer) [7.21 a.m.]. - by leave - I move -
That the bill be now read a second time.
The amendment proposed by this bill is designed to adjust an anomaly which arises in relation to gold tax deducted from the proceeds of gold recovered by tributers. In the gold-mining industry, it is a common practice for a mine-owner, or lessee, to let portion of the mine to tributers, who, in return for certain royalties, are empowered to search for, win and dispose of any gold ore recovered. Ore recovered by the tributers is ordinarily disposed of to the owner, or lessee, of the mine under tribute, and is crushed and treated at the mine battery or treatment plant. Gold recovered from the ore treated is delivered by the mine-owner, or lessee, to the Commonwealth Bank, or its agent, and the proceeds of the gold, less certain deductions, are paid, to the tributers.
As required by section 7 (2) of the Gold Tax Collection Act, the Commonwealth Bank, or its agent, in making payment to the mine-owner or lessee for the gold delivered, deducts the amount of gold tax payable thereon. Under the existing law, however, a mine-owner or lessee in Western Australia in accounting to the tributer for the proceeds of the gold, has no legal right to reduce the amount payable by the amount of the tax deducted by the bank. This position obtains by reason of the operation of a provision in the Western Australian Mining Act, enacted prior to the imposition of the gold tax, which limits the deductions which the mine-owner, or lessee, is legally authorized to make to deductions to cover -
It is clearly anomalous that a section of the gold producers of the Commonwealth should, by the fortuitous operation of a State act, be enabled to escape a taxation liability which is borne by all other gold-producers in the Commonwealth. The amendment proposed will remove this anomaly.
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.
Sitting suspended from 7.25 until 10.80 a.m.
Motion (by Sir Frederick Stewart) - by leave - agreed to -
Thathe have leave to bring in a bill for an act to amend the Invalid and Old-age Pensions Act 1908-1937.
Bill brought up and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of the bill is twofold: first, to increase the maximum rate of invalid and old-age pensions from £1 to £11s. a week, and, secondly, to make provision for the maximum rate of pension to be varied automatically in accordance with variations of the cost of living.
The new maximum of £54 12s. per annum, or £11s. a week, will be the highest amount to be received by pensioners since the introduction of Commonwealth old-age pensions in the year 1909. The variations of the pension rate since that time have been as follows: -
There are at present approximately 333,000 old-age and invalid pensioners, and all will receive the benefit of the increase of1s. a week provided for in the bill. The additional cost will be £900,000 per annum, which will bring the total cost of old-age and invalid pensions up to £18,000,000 per annum. The additional expenditure for the remainder of this financial year will be £470,000.
The bill preserves the existing margins of permissible income, namely, £32 10s. per annum, or 12s. 6d. a week, in the case of pensioners other than permanently blind persons, and £175 10s. per annum, or £3 7s. 6d. a week, in the case of blind pensioners. Consequently, the limit of income, plus pension, will now become £87 2s. per annum, or £1 13s.6d. a week, in the case of pensioners other than permanently blind persons, and £230 2s. per annum, or £4 8s. 6d. a week, in the case of blind pensioners.
The second purpose of the bill - the linking of the pension to changes in the cost of livings - is not entirely new. This principle was first introduced in October, 1933, in the Financial Relief Act introduced by the Lyons Government. Provision was then made for the pension rate to rise or fall, within the limits of 17s. 6d. to £1 a week, by 6d. for every variation of 100 units in the retail price index number for food and groceries for the six capital cities of the States as ascertained by the Commonwealth Statistician for the twelve months ending on the 31st
March in each year. The basis of these variations is shown in the following table : -
Under this table there was a rise of 6d. in the pension in July, 1935, from 17s. 6d. to 18s. a week.
In September, 1936, in the Financial Relief Act No. 2, a new table of price index numbers was substituted for the previous table. The same index was retained, but the numbers were regrouped and related to higher rates of pension, within the limits of 18s. - instead of 17s. 6d. - and £1 a week. The new table was as follows: -
The immediate result of the new table was an increase of the pension rate from 18s. to 19s. a week, which became operative from the 24th September, 1936.
In September, 1937, the Pensions Act was again amended to give a further increase of the pension from 19s. to 20s. a week, and the provisions relating to cost of living variations were repealed. The pension has since remained at 20s. a week.
As I have already stated, the food and groceries index was previously used as the basis for measuring variations of the cost of living for the purpose of variations of the pension rate. On this occasion, however, it has been decided to adopt the all items index of household expendi- ture, “ C “ series, as the basis for variations of pension. This series takes account, not only of food and groceries, but also of rent, clothing and miscellaneous items of household expenditure. It is also used by the Commonwealth Arbitration Court in its determination of the basie wage.
It will be observed that under the bill the new maximum rate of 21s. a week will continue while the price index number is between 936 and 981. The latest available figure is 959. The bill also makes provision for the pension of 21s. to rise by 6d. a week for every 23 units, or portion thereof, by which the price index number exceeds 981. Thus, a rise of the price index number to 982 will result in a further increase of 6d. a week in the pension.
Groups of 23 units have been decided upon with a view to securing variations of the rate of pension proportionate to the variation of the cost of living. In this connexion, it should be noted that the cost of living provisions which operated from 1933 to 1937 required variations of 100 units in the price index number for food and groceries to secure a variation of 6d. in the weekly pension. The effect was that the variations of the pension were not by any means proportionate to the variations of the cost of living. The equivalent of 100 units in the food and groceries index is about 60 units in the all items index. The fact that it has been decided to adopt groups of only 23 units for every variation of 6d. in the pension indicates that the provisions regarding the cost of living variations contained in this bill are much more liberal than those previously in operation.
It is also worthy of note that, in October, 1925, when the all items price index number was 1001, the minimum pension was only 20s. a week, whereas under this bill, should the price index number rise to 1001, the rate of pension would be 21s. 6d. a week. Should it rise to 1005, the pension would become 22s. a week. Furthermore, as compared with the purchasing power of the new maximum rate of pension with the maximum rate existing in October, 1925, a pensioner will now be able to buy goods with his pension of 21s. which would have cost 21s. l1d. in October, 1925, when his pension was only 20s. a week. This comparison is based on the comparative price index numbers of the all items series, namely, 1001 and 959.
A special feature of the bill is that provision is made for a determination of the maximum rate of pension to be made in each quarter, according to the price index number for the quarter immediately preceding such determination. If sufficient variation has occurred in the price index number, the new maximum rate of pension will become operative from the first instalment payable in the next succeeding quarter. Thus, the variations of the rate of pension will, so far as is practicable, keep pace with the variations of the cost of living. The previous legislation of this nature, which was in force from 1933 to 1937, provided only for annual determination of the pension rate based on the index number for the twelve months ending on the 31st March in each year. The effect was that the variations of pension lagged behind the variations of the cost of living. The present bill is thus a definite improvement on the former legislation in this respect.
The retention of the existing margins of permissible income in connexion with the present increase from 20s. to 21s. a week has already been referred to. These margins, namely, 12s. 6d. a week in case of pensioners other than blind persons, and £3 7s. 6d. a week in the case of blind persons, will also be preserved with every variation of the pension according to changes of price index numbers.
Provision is made in the bill for pensioner inmates of benevolent asylums and hospitals to receive an increase of 6d. a week in the amount of 6s. a week which they at present receive as an institutional pension. Possibly it will be contended that the full increase of1s. a week which pensioners outside institutions are now to receive should also be paid to those who are in institutions. It will be recognized, however, that the payments made to pensioners in institutions are scarcely in the same category as the pension payments made to persons outside, who have to provide from the pension money the full cost of their maintenance. In the case of inmates of institutions the cost of maintenance is borne almost entirely by the institution, and the pension payment made to the inmate is practically in the nature of pocket money, which enables him to purchase tobacco and other comforts which may not always be provided by the institution.
It is of interest to mention the changes in the amounts paid to inmates of institutions since these payments were commenced in 1916. They are as follows : -
It will be noted that in 1920 the institutional pension of 2s. a week represented only 13 per cent, of the full pension, which was then15s. a week, whereas the present institutional pension of 6s. a week represents 30 per cent, of the full pension of 20s. a week. The new rate of 6s. 6d. a week represents 31 per cent, of the new maximum pension rate of 21s. a week.
Furthermore, pensioner inmates of hospitals are given a special privilege in that the pension for the first 28 days of the period in hospital is preserved intact for the pensioner and paid to him in full on his discharge. For this period the hospital receives nothing from the Commonwealth. After 28 days the hospital is paid 14s. a week, this is, the balance of the pension over the amount paid to the pensioner. Similar payments are made to benevolent asylums in respect of pensioners admitted, but in these cases the payments of 6s. a week to the pensioner and 14s. a week to the institution commence from the first pension pay-day after the date of admission. After careful consideration of all aspects of this matter the Government has decided that pensioner inmates of institutions will be very fairly treated if given up to half the amount of any increase paid to pensioners outside. The bill therefore provides for pensioner inmates of institutions to receive one-half of the present increase of1s. a week, and, within the discretion of the Minister, up to one-half of any further general increase which may result from a rise of the price index number. This discretionary power operates conversely, so that, in the event of a decrease of the ordinary pension following a fall of the price index number, the Minister may, in his discretion, decide that the pensioner inmate shall not be required to bear any portion of the decrease.
The amendments affected by the bill are to apply to the fortnightly instalment of pensions due on the 26th December next, but pensioners will actually receive the increased payments on the 19th December, owing to the special arrangements for payment a week earlier on account of the Christmas holidays.
– I regret that the Minister has failed to draft the bill in such a way as to ensure that the pension shall not fall below£ 11s. a week without the authority of Parliament. As honorable gentlemen well know, I played some part in the Advisory War Council in arriving at a via media so that this matter could be more satisfactorily dealt with than appeared to be probable at one stage. I had hoped that the pension would be very much more than £11s. a week; indeed I did my utmost to get it raised to a higher figure. When the Government would not agree to a further increase I said that at least, the £11s. should be assured of its purchasing value as against the rising price trend which could be expected for the rest of the war. Those with whom we discussed the matter agreed that the rate of pension should be fixed at £11s., and that there should be no great lag in retaining the purchasing value of the pension at £11s. despite price increases.
– Does the honorable member suggest that that was a specific agreement?
Mr.CURTIN. - The document which I took from another place reads -
The standard rate of pension to be increased to £11s. and made variable according to the cost of living, taking the present time as the base and making provision for rises.
I know that the word “ standard “ can be regarded as a sort of fixed regulator, and that other factors as they bear on that shall, of course, affect the result in order to preserve what is called the standard; but I stated clearly that we wanted an immediate increase of the pension. We sought an increase of very much more than1s. The Government, however, would not move beyond the £11s. We then said that, as the amount of increase was so slight, and as the probable price trend would be upwards, the £11s. should at least be preserved as the minimum rate which the pensioner would get. We did not contemplate that it would be within the power of the Commissioner to reduce the pension below £11s. in any circumstances. I quite agree that the pension may be reduced below £11s. in the years ahead, but I submit that that should be a matter for the Parliament to decide. The difficulty is that the Parliament cannot overtake the effect of price increases sufficiently promptly. Our experience suggests that, in time of war, the trend of prices is constantly upwards. I put to the Minister as well as I am able after all we have endured this week, that the party which I lead fought very strongly for an increase of the pension rate. If the country had given us a majority I was committed to a 25 per cent, increase of pension. Having regard to the increased strength of the Labour party in this House, I feel not only a party obligation to see that something is done in respect of pensions, but also a strong personal obligation to live up to the undertakings which I have entered into as a responsible leader. The pensioners should be protected against rising prices. When prices have a downward trend I venture to say that we shall be faced with an entirely new social and economic situation, and in the light of that situation the Government can come to the Parliament and make such financial proposals in relation to the pension as it desires. The service pension is to ‘be increased by ls. as part of the general arrangement, although that is not specifically set out in the document to which I have referred. That document is not so much an instrument signed, sealed and delivered as merely a memorandum drawn up to express a guiding principle upon which we had agreed. The spirit of that agreement was that the service pension for what are known as burntout soldiers should be increased ls. just as the old-age pension should be increased. There is nothing about index figures in the service pension change. I strongly urge the Minister to review that aspect of the bill which makes it practicable for the Commissioner in certain circumstances to reduce the pension below fi ls. without reference to Parliament. That disability could quite well be overcome by a simple drafting amendment. I say frankly that I do not expect the Government to give effect to the policy of the Opposition in toto for I would not expect to do so if I were the head of the Government. But in matters of social services we should be as generous and as just as we can. We should not fail to keep constantly in mind that money invested in the welfare of humanity is as sound an economic investment as money invested in stocks, land or other physical assets of the nation. The assets of this nation include not only its material values but also its human values.
– My purpose in rising is to relate the circumstances surrounding the discussions that took place concerning this matter. Like the Leader of the Opposition (Mr. Curtin) I am of the opinion that, in his secondreading speech, the Minister has not properly stated the position. Those who represented the Opposition strenuously fought to give effect to the pensions policy of the Labour party as outlined before the general elections. The subject of old-age pensions was given long and careful consideration. All were agreed that our social services should be improved, and the circumstances in which the invalid and old-age pensioners live were fully canvassed. The pressing need for an increase of the present rate of pension was also strongly emphasized. It is not necessary for me to go into the details; they are well known to every honorable member. Honorable members on this side of the House are pledged to see that improvements of our social services are effected. We believe that a special obligation rests upon us in that regard. It is right and proper that I, who am not a member of the official Opposition, should express my appreciation of the way in which the representatives of the official Opposition fought for an increase of the pension rate to 25s. When that proposal was definitely turned down they made a determined effort to secure an increase of at least 2s. 6d. Full consideration was given to the effect of these proposals by the Government upon the revenues of the Commonwealth. Eventually, the Council accepted the increase provided for in the bill, with the addition that it was agreed that the rate of 21s. a week, which is all that the Government was prepared to give, should be the absolute minimum.
– I might save the honorable member any further trouble by announcing now that the Prime Minister has authorized me to say that the rate will not be reduced below 21s. a week without first submitting any such proposal to Parliament.
– Does that imply an act of Parliament?
– That disposes of one objection. The next point to which I refer is the proposal that the amount of any increase shall be determined by reference to the index figures. It appears to be the intention of the Government that increases according to the cost of living shall be made at quarterly intervals. That puts pensions on the same footing as wages fixed by Commonwealth awards.
– The same yardstick will be employed also.
– We were afraid that the lapse of time between increases of the cost of living and consequent increases of pension might be longer than the Minister has now indicated.
– Is the index proposed to be used the same as that which is used in determining the Commonwealth basic wage ?
– It is the all-items index. An increase of 6d. a week is provided for every 23 units, or part of 23 units, by which that index number rises. The Minister contends that this is a complete recognition of the need of this section of the community to obtain some advantage from variations of that kind.
– That is the correct proportion. The method of calculation used in 1933 was not so liberal as this is.
– Honorable members on this side of the House will regard it as their duty not, by any means, to rest upon what has been accomplished.
– There is not much to rest on.
– Whatever the immediate future may hold, honorable members on this side will strive continuously to secure what they promised the people at the general elections. I know there are difficulties in obtaining revenue, and in meeting special costs of government at the present time, but I believe that new sources of revenue exist in commercial and industrial spheres, which could be tapped in order to meet the increase which we consider should be paid to pensioners. I have suggested during the consideration of other measures that a closer investigation should be made of our different forms of taxation in order that sources of revenue which are able to stand a further drain may be taxed to a higher degree. An examination of these sources will show that our demands in connexion with pensions can be carried out I urge the Government to take steps during the coming recess to evolve further means of increasing pensions to the level which the Labour party advocated at the general election.
.- - The subject of pensions was noi a prominent plank of the platform of the Labour party at the general election. As the Minister (Sir Frederick Stewart) has said, the value of a pension to-day is greater than it has ever been. What is more important is that provision is now made for increases commensurate with increases of the cost of living. This is a step in the right direction. Too much cannot be expected, because we must remember that universal sacrifice is demanded by the conditions under which we are living to-day. The honorable member for East Sydney (Mr. Ward) recently made a plea on behalf of pensioners which I heartily support. I have urged on many occasions that the Government should increase the amount of permissible income to at least £1 a week. This would not impose any undue strain upon the Government’s revenue, and an income of £1 a week, plus a pension, would not be too much for anybody. I had hoped that the Government would have made provision in this measure for an increase of the permissible income. It would benefit the health of pensioners and enable them to live in a greater measure of comfort than they do at the present time. The existing limit of 12s. 6d. permissible income is far from satisfactory.
The main provisions of the bill represent the greatest increase of pension that the country is able to give. It is not right for the Opposition to take credit for the benefits provided in this ‘bill; not long ago, the Labour party promised at a general election to effect improvements to pensions and in other directions, but when it was charged with the responsibility of giving effect to its promises, it failed dismally. In fact, it took a retrograde step. Old-age pensions and salaries were reduced, and other sacrifices were forced upon the people. The conditions existing in those days were not nearly so difficult as they are to-day. All this talk by members of the Opposition is just so much kite-flying. The increase proposed in the bill is a fair contribution to the needs of the pensioners. I repeat that at the last general election the subject of pensions was scarcely mentioned by members of the Labour party. I have even known oldage pensioners to offer to pay a fewshillings towards the country’s war funds.
– That is ridiculous. No pensioner could spare a shilling.
– I agree that pensioners should not be required to contribute to the war effort, but they are entitled to pay something towards the preservation of their democratic rights if they so wish. Any promises made by the Labour party at the general election to effect great improvement of pensioners’ conditions were nothing less than political bribery, which was indecent in view of the financial burden imposed by the war.
– I draw the attention of the Minister (Sir Frederick Stewart) to a very great anomaly in the act, to which I have referred frequently in this House. It affects a few very old men who are not entitled to receive pensions because they were not born in Australia. I have received several letters referring to this anomaly recently. One was written by the Mayor of Townsville, Mr. Gill, in connexion with the case of James Sard, who was born in Singapore 71 years ago. Because of his Asiatic origin he is unable to secure a pension. For about 55 years he has been a faithful citizen of this country; he paid his taxes and met all other obligations. I ask the Minister to make provision for men of his class to be granted a pension.
’. - I support the remarks of the honorable member for Herbert (Mr. Martens). I also have condemned this anomaly on many occasions in this chamber. I know of an Asiatic who came to Australia when he was a boy. He lives in my electorate. For most of his life he was very wealthy; he was extremely benevolent and contributed to the charities of the country probably in as great a measure as any other citizen. Owing to misfortune, however, he has been almost penniless for the last few years. I have endeavoured to obtain a pension for him, but he has no rights. It is remarkable that we are very generous to the subjects of enemy nations at the present time. Europeans from countries which have menaced us for many years are entitled to pensions. It is wrong that Asiatics, who abide by our laws and willingly pay our taxes, should not be given the same rights. For fourteen or fifteen years now I have been endeavouring, without result, to obtain pensions for these men.
– I regret that the Government was not more liberal when it drafted this measure. It savours of the kind of politi cal auction which the Prime Minister (Mr. Menzies) condemned so vigorously when he refused to grant any more than 3d. a bushel increase of the advance on the wheat crop. If old-age pensions are to be increased by triennial rises of ls., it will be a long time before pensioners receive 25s. a week, which is the least amount that can be fairly paid to them. I hope that in committee the Government will provide that pensions shall not be reduced below 21s. a week except by act of Parliament. It should not be possible for reductions to be effected by means of special resolutions of either House of the Parliament, although it is proper that the rates should be increased according to cost of living increases. What I ask can easily be done by omitting one clause from the bill and deleting the words “ or reduced “ wherever they appear.
I join with the honorable member for Herbert (Mr. Martens) and the honorable member for Eden-Monaro (Mr. Perkins) in pressing the claims of Asiatics to pension rights. But I urge more strongly still the payment of old-age pensions to persons of Australian aboriginal descent. It is anomalous that they should be refused old-age pensions in their own country. I understand that tribal natives, who have no contact with civilization, might have to be treated differently, although they could be provided with pensions through the services of curators or guardians of tribes; but I cannot see why the detribalized natives, as they are called, should not receive old-age pensions. They are just as much entitled to them as are their more fortunate white fellow citizens. I have a copy of the speech which the Minister made when he moved the second reading of this bill. He raised the contentious question of which party was responsible for the reduction of the old-age pension some years ago.
– Although that reference is in the copy of my speech, which the honorable member has in his possession, I did not use it. That is strictly a matter of history.
– I do not agree with the honorable gentleman’s views on this subject. There is no doubt that the old-age pension system would never have been introduced but for the pressure brought to bear by the Labour party on the Deakin Government, and it is a matter of record that invalid pensions were first paid during the term of office of the second Fisher Government.
– In preference to a system of pensions, I favour a system of universal superannuation, the establishment of which would be more desirable in the interests of the nation. The arguments in favour of it are well known. Such a system is already in force in New Zealand, where a payment of £1 10s. a week at the age of 60 years is guaranteed. This would enable the community to spend more readily, and would help to revitalize the national economy.
I join with honorable” members on this side of the House in saying that the raising of the pension by ls. a week reflects little credit on the Government. Irrespective of what Government members may say, it can fairly be claimed that such increases of the pension as have been granted have been the result of the representations of, or the pressure applied by, the Labour party. A guinea a week is little enough to give to those who, during their lifetime) have laboured to make Australia the great nation it is to-day. If honorable members had the expectation of receiving only £1 ls. a week in the evening of their lives, they would look forward to that period with a good deal of anxiety. There are many old-age pensioners in my electorate who will not be satisfied with what has been done, and will not be content until a real effort has been made to deal with the problem.
– I am pleased that, at a time when it has to meet such severe calls upon its resources, the Government has been able to make some concession to old-age pensioners. I welcome also the adoption of the proposal in regard to the cost of living; in the event of the standard of living rising, pensioners will benefit accordingly. I should like the Government to liberalize the conditions under which the pension is granted. Even persons who have come from the Old Country are sometimes debarred from receiving the pension because of insufficiently lengthy residence in this country. The liberalization of those conditions would be a gracious gesture. Many persons of
British (birth who were not born in a British territory, but who have been in Australia for a lengthy period, also are debarred from receiving a pension; but their number is comparatively small. They are definitely entitled to the privilege. I support the suggestion of the honorable member for Forrest (Mr. Prowse), that the old-age pensioner should be allowed to earn at least £1 a week.
– They should not be permitted to work on a farm, to make up the difference between £1 and £2 a week, because that would then become the standard rate for farm labour.
– I am somewhat surprised that the honorable member should make such a narrow-minded statement. Many old-age pensioners on farms in my district are given an excellent home and are well treated. The work that they do is beneficial to their health, and, in addition, they are assisting production. Their future is brighter than that of men who are compelled to live in rooms and merely waste away.
– They are doing a man’s work for 10s. a week.
– That is utter rot. They are perfectly happy in the work that they are doing, which does not impose a tax on their strength. If allowed to earn £1 a week, they would have a better standard of living, would be doing something for the benefit of the community, and would be far more contented than they are at the present time. Even though the increase may not be so great as one might like to see it, we must remember that further expenditure in this direction would cut into the financial provision for the war. If we were to lose the war, the aged and the infirm would not get a pension. We know what happened to a large number of aged and infirm persons in Poland, when Germany occupied that country; 24,000 of them were murdered. The Poles had either to work for the Germans or starve. We must keep that ever in our minds when we feel inclined to be critical of the increase that is being given.
– I am deeply disappointed with the proposed increase. Possibly that applies also to some honorable members opposite although they support a Government which will not agree to an expansion. I am sorry that the Minister for Social Services (Sir Frederick Stewart) was not able to indicate that he would be prepared later to grant a further increase. The honorable member for “Watson (Mr. Falstein) referred to what has been done in New Zealand. That illustrates the different outlook of the Labour party towards provision for those who are no longer able to work for themselves. Honorable members opposite appear to regard this sort of social legislation as a charitable donation to persons who no longer can fend for themselves. We regard it as a right which they have earned by their good citizenship. This has been recognized to a degree in New Zealand, as well as in Great Britain, which has rather put Australia to shame.
– The honorable member is not suggesting that the British rate is comparable with ours !
– Perhaps the Minister is not aware that since the outbreak of the war pensions have been increased by 30 per cent, in Great Britain.
– Before the increase was made, they were 50 per cent, below ours.
– Great Britain has recognized that social benefits can be increased, even in war-time. Had the Government of Great Britain failed to show sympathy and to give practical aid, by administration and legislation, quite evidently it would not have remained in power very long. New Zealand has expanded its social services in war time. I can see no reason why this Government could not have raised the pension to a higher sum. Letters that I have received, while indicating that the pensioners are grateful for the slight advance of 5 per cent., also have an underlying note of deep disappointment.
The honorable member for Forrest (Mr. Prowse) has referred to the necessity to increase the amount which pensioners shall be allowed to earn. I agree that there ought to be some improvement of the regulations in that respect, but I fear that advantage might be taken of many pensioners and that by working them at farm labour at such rate another man would fail to obtain the proper rate. When the honorable member for Forrest displays enthusiasm for the suggestion, it is reasonable to suppose that he desires cheap farm labour to be made available. I do not suggest that advantage of the position would be taken by every person who is engaged in rural occupations ; but it is a fact that old-age pensioners have been engaged to do work which ought to be done by able-bodied men. This argument does not take into account the invalid pensioner, who cannot receive a pension unless he is totally and permanently incapacitated for any kind of work. Many invalid pensioners have no hope of obtaining employment because the nature of their complaint prevents them from moving about, but others are not similarly situated. I know of a woman with high educational qualifications who was threatened with the withdrawal of the pension if, by giving instruction to persons who visited her, she earned 5s. or 10s. a week. Honorable members opposite ought to be willing to help the Labour party to remedy such anomalies. I shall not be content, nor will many other honorable members who sit on this side of the House, until proper provision is made for the pensioners. That will be done only by the continued pressure of Labour arguments. In New Zealand the people have to contribute up to 5 per cent, of their earnings during their working years, but the scheme is, nevertheless, an equitable one. I sincerely trust that, if the suggestion of the honorable member for Forrest be accepted, provision will be made to prevent the exploitation of pensioners, and that invalid pensioners will be permitted to augment their income from the pension. If it be either difficult or impossible for a person to live on £1 ls. a week, the invalid pensioner is affected equally with the old-age pensioner. I cannot be satisfied with the amount proposed in this legislation.
.I agree with those honorable members who have expressed the desire that an invalid or old-age pensioner should be allowed to earn more than 12s. a week. Some time ago, there was a serious outbreak of infantile paralysis in
Tasmania as well as in other parts of Australia, with the result that the State is now looking after a large number of cases, mostly children. Eventually, these will become eligible for, and will have to be paid, the invalid pension for the remainder of their lives. I know of 50 or 60 such cases. A young man of about eighteen or nineteen years of age has been making splints and other apparatus for his fellow sufferers, and by this means has been able to earn up to about £1 15s. or £2 a week, in consequence of which he is not entitled to an invalid pension. That is wrong.
– An invalid pensioner is not permitted to earn any money.
– The man to whom I refer is not totally incapacitated. Although his legs have gone, he is able to work with his hands. Because he earns 35s. a week, he is not eligible to receive a pension. People who are suffering from such grievous afflictions should be encouraged to assist themselves to become an asset, not an economic loss, to the community.
– I regret that the Government could not see its way clear to increase invalid and old-age pensions by more than ls. 8 week. In ray opinion, the act should be thoroughly reviewed by Parliament. A desultory discussion of the legislation early this morning revealed that it contained many anomalies. A committee comprising honorable members of all parties should be appointed, to inquire into various unsatisfactory features, and recommend suitable amendments. One anomaly is that pensions are not payable in respect of children, when the gross income of their parents amounts to approximately £5 a week. The department contends that such an income is sufficient to enable them to maintain the sufferer; but no account is taken of the’ fact that the net income after allowing deductions for superannuation and hospital funds may be only £4 8s. a week. Next month, people will be subject to an added burden when instalments of federal income tax are deducted weekly from their pay envelopes. In my opinion, the department should base its calculations upon a worker’s net income, when application is made for an invalid pension to assist to maintain a youthful sufferer. “When illness compels a married pensioner to enter hospital, his pension is reduced to 6s. a week. That imposes an unnecessary hardship upon his wife. Her income comprises her pension of £1 a week, and her husband’s allowance of 6s. a week. After paying the rent, she has only a few shillings with which to support herself and purchase comforts for her husband. A landlord does not excuse a tenant from paying the rent simply because an aged husband has been obliged to enter hospital. In such circumstances, no deduction should be made from the pension, and no payment should be made to the hospital for the maintenance of the pensioner.
Living in our midst are many persons who hailed originally from Palestine and Syria. Because they are Asiatics, they arc not entitled to receive . a pension. That unnecessary provision should he relaxed, because some of them have lived in Australia for 40 years. If it can be proved that they have resided in the Commonwealth for, say, 28 years, they should be eligible for a pension. Many of them have reared families in Australia, and now, in the evening of their lives, they have to rely upon their children to maintain them.
– Some of their sons fought in the last war.
– Some of their sons are fighting in the present war, too ! Finally, I consider that the Government should increase the amount that a pensioner is permitted to earn before the maximum rate of pension is effected. At present, he may earn up to 12s. 6d. a week. That amount could, with advantage, be made more liberal. The maximum should be fixed at £100 a year.
– I endorse the remarks of honorable members as to the necessity for correcting grave anomalies that have arisen under the Invalid and Old-age Pensions Act, and I express my deep regret at the Government’s refusal to increase the pension by more than ls. a week. The honorable member for Bendigo (Mr. Rankin) contended that greater liberality was not possible when the country’s economic and financial structure was strained by colossal war expenditure. That kind of pleading leaves me cold; a Labour government would have found the necessary money. Even if Australia were not at war, the Government would resist any efforts to increase the pension to an adequate amount upon which the recipients could live in reasonable comfort. The economic resources of the nation can provide for a much higher standard for that class. Upon the appointment of a judge, financial provision is made for him to retire eventually upon a pension which would enable him to continue the mode of life to which he was accustomed while he was on the Bench. That provides an excellent precedent for increasing invalid and old-age pensions. I do not suggest that such a reform could be introduced immediately, but it should be the goal of all honorable members.
It is difficult at times to understand why the Pensions Department rejects the claims of applicants. The act provides that in order to qualify for a pension, a person must be permanently and totally incapacitated. In my opinion, an applicant should receive a pension if his incapacitation will prevent him permanently from following his ordinary occupation. A waterside worker, who lived in my electorate for nearly 30 years, suffered a heart attack when he was about 50 years of age, and was warned that if he continued to work on the wharves, he would probably drop dead. Another man, who was employed by the Metropolitan “Water, Sewerage and Drainage Board of Sydney, injured himself while at work, and his doctor advised him to find another job. After fighting the department for months in order to secure recognition of the claims of those two men, I went, in desperation, to the Treasurer and asked him to use his influence to modify the attitude of the department. The department contended that both men could find other employment, as, for example, lift-drivers. A suggestion that they should support themselves by taking a ticket in the lottery would have been just as illogical. What is the use of telling a man who is accustomed to pickandshovel work that if he loses an arm or a leg, he is still capable of doing light jobs ? His services would not be required in an office; in fact, hia lack of training would exclude him from employment in almost every occupation. His case is different from that of a schoolteacher, who might lose a limb, but who would still be able to continue in his profession. If an honorable member lost the use of his legs, he could still effectively represent his constituents from a wheel-chair. But a shearer or labourer who loses a limb is not so fortunate; all avenues of employment will be closed to him in future*. All that he should be required to prove in order to qualify for an invalid pension is that he is incapable of carrying on his normal occupation.
I do not know whether the immigration policy of the Commonwealth influenced the inclusion in the Invalid and Old-age Pensions Act of a section to disqualify Asiatics from receiving a pension. Do not Asiatics get hungry like anybody else? If an Asiatic has lived in Australia for many years, presumably he has produced and consumed and contributed to the national wealth. To deny to him a pension is to adopt an unchristian attitude. Do Australians consider themselves superior individuals, simply because they were born on this continent. I join with the honorable member for Bourke (Mr. Blackburn) in urging the Government to amend the act in order to make civilized aborigines eligible for a pension. Hundreds of them have worked in many occupations; and those people who, upon other subjects, speak of the rights of the native-horn should, to be consistent, agree that aborigines are entitled to primary consideration. Like the honorable member for Cook (Mr. Sheehan), I consider that the act should be thoroughly overhauled. From time to time many anomalies have been revealed in our pensions legislation. In my opinion the time has come when the whole of this machinery should be overhauled in the interests of the pensioners. I make it clear that my desire is to expand, not restrict, the scope of the act. The economic fabric of Australia should be sufficiently strong to cover a complete superannuation scheme for the whole of the people and on a scale liberal enough to ensure that all our people upon retirement will be able to continue to live according to standards they enjoyed during their working lives.
.I confess to disappointment that the best agreement that could be made among the parties in this Parliament in relation to pensions was for the granting of an additional ls. a week to invalid and old-age pensioners.
– I do not think that the honorable member should refer to the concession as an “ agreement “.
– Well, let us say compromise. Difficulties are always experienced with borderline pension cases. Although departmental officers are sympathetic, they are necessarily bound by the law. I am .sure that all honorable members frequently have brought under their notice pension cases in which there is a conflict of medical opinion. One doctor may say to an .applicant “ You are not able to work; I consider you to be totally and permanently incapacitated “, whereas another may say “ You are incapacitated for the time being, but you may be able to work twelve months hence “. In the latter case the granting of the pension is delayed for twelve months. Upon a review of the claim at the expiration of that time, the applicant may be required to wait another twelve months. I have in mind the case of a person whose claim was deferred for three years. Even then a certain medical practitioner said “You may be able to work in another twelve months “. However, the applicant was granted a pension on condition that it should be surrendered if, after twelve months, he was found to be able to work. Of course he was not able to work and his pension has been continued.
I was glad to hear the honorable member for Forrest (Mr. Prowse) say that even if a pensioner were permitted to earn £1 a week in addition to the full pension, he would not be too well off.
– I said that a pensioner in such circumstances would not be affluent.
– I agree that an income “f £2 a week from the combined pension and earnings, is little enough. In the case of invalid pensioners who cannot earn very much, great hardship is sometimes suffered. The honorable member for Denison (Mr. Beck) referred to an invalid suffering from infantile paralysis, who is now able to earn £1 15s. a week by making artificial limbs of a certain kind. That individual would be regarded as in a favorable position compared with many invalid pensioners, but what would happen to him if the market for his goods disappeared, as it might well do? We should do our utmost to encourage pensioners to earn a little extra money, and should relieve them of the anxiety that by doing so they may suffer a reduction of their pension.
I regret that persons who in the course of their work meet with a calamity which forces them to apply for the invalid pension are required practically to exhaust any reserve of savings that they may have accumulated before their application can be granted. I know of a man who lost both his legs in an accident. Because he had savings of about £300 he was granted >a pension on a very reduced scale. The result was that he had to draw upon his meagre savings. It was only when his bank balance had fallen below £60, that he was granted the full pension. To-day his bank ‘balance is only about £50 and he is continually drawing upon it in order to purchase the necessaries of life. It would have been far better had that man been granted the full pension at the time he lost his legs so that he could have felt, during the six or seven years that have since elapsed, that he would not be all the time exhausting his slight reserves. The time is not distant when he will have no money at all in the bank. We should do our utmost to make the circumstances of life as endurable as possible for such people.
I was pleased to hear the Minister for Social Services (Sir Frederick Stewart) say that the rate of pension would not be reduced below £1 ls. a week without reference to Parliament, but I hope that before very long the Labour party will be in possession of the treasury bench, for then the rate of pension will be raised promptly to £1 5s. a week.
– I wish to make a few observations concerning marginal cases and anomalies, but before doing so I shall comment upon an observation of the honorable member for Maribyrnong (Mr. Drakeford) that honorable members on this side of the House appear to regard the invalid and old-age pension as a charity. I do not think that that is a fair statement of our view. We regard the pension as an inherent right of the old and invalid people of Australia.
I make an appeal to the Government to give an instruction that a more liberal interpretation must be given to the act in certain directions. I have in mind the case of a man. in the New England district who suffers from rheumatoid arthritis. He was declared by the government medical officer to be capable of Light gardening work. This meant that he was denied an invalid pension. Unfortunately, light gardening work is not available in most country towns and villages, so that what actually happened was that the medical officer declared that the nian was capable of doing work of a kind that he could not possibly obtain. I hope that the Minister will take whatever steps may be necessary to ensure that applicants for the invalid pension shall be entitled to a favorable decision if work of the only kind they are capable of performing is not available in the locality in which they live.
Although I am not as conversant with the provisions of the Invalid and Oldage Pensions Act as are honorable members who have been in this Parliament for a number of years, I can quite appreciate the soundness of the contention that a legislative measure that has been in operation for upwards of 25 years should be overhauled, consolidated, and brought up to date.
.I express my disappointment that it has not been possible to influence the Government to increase the pension by more than ls. a week, but half a loaf is better than no bread. We hope that before very long a Labour administration will be on the treasury bench. When that time comes the promise made by the Leader of the Opposition (Mr. Curtin) in his policy speech that the rate of pension would be increased to £1 5s. a week will be fulfilled. In New Zealand the rate of pension is £1 10s. a week. Australia is a richer country than New Zealand, and can afford to be more liberal to its pensioners. I suggest that consideration be given to the practicability of making small areas of Crown land in suitable localities available to old-age pensioners, so that they may be encouraged to do a little gardening, and, in particular, to grow vegetables for themselves. The exercise would be helpful to them, and the savings which they would make in the purchase of vegetables would be financially advantageous. It is impossible for working people living on the basic wage to make any savings to provide for their needs when old age overtakes them, and this causes that terrible fear of the future to develop. Many ageing people face the later years of their lives with a degree of dread. We should regard it as our privilege, and, indeed, our duty, to make the declining years of the pioneers of this country as comfortable and free from anxiety as possible. We live in a land of plenty, and, by reason of the inventive genius of man, we have, in recent years, multiplied the productivity of the country many times. It is sometimes said that one of the troubles of the world is overproduction : I consider that the chief trouble is under-consumption. Our economic and monetary system is unsound and should be revised in order to bring it more into conformity with present-day conditions. We need to revise our sense of values. When people reach the age of eligibility for the pension - 60 years in the case of women, and 65 years in the case of men - life may become very hard for them. I consider that we should, without further delay, introduce an adequate superannuation system in order to make it possible for people who reach a prescribed age to retire in comfort. By then they will have given the best years of their lives to the service of their country, and their later years should, not be darkened by fear of the future. Unfortunately it is still true that “ man’s inhumanity to man makes countless thousands mourn “ ; but I hope that the day is not distant when a really liberal system of pensions or superannuation will be in operation.
– In common with other honorable members on this side of the House, I am not satisfied with the proposed increase of ls. a week in old-age and invalid pensions. Long before this, the Government should have taken steps to liberalize the act. When I was speaking on the budget the other night, I expressed the opinion that instructions had been given to Deputy Pensions Commissioners to tighten up the administration, and to reject as many claims as possible. I was pleased to hear the Minister for Social Services (Sir Frederick Stewart) deny that assertion, and I accept his word. Nevertheless, it is a fact that more rejected claims have come under my notice during the last six months than during the previous six yeai-3. This applies to both invalid and old-age pensions, but particularly to the former. Many persons, who had been drawing invalid pensions for years, have had their pensions cancelled during the last six months, and I should like to know why. If no actual instruction has been given on the point, it seems very probable that the word has been passed along to tighten up the administration. Recently, the Minister for Health and Home Affairs in the Government of Queensland brought under my notice the case of a girl 29 years of age whom, he said, he had known for a number of years. He was quite satisfied that she was totally and permanently incapacitated. She is unable to do even light work. Her invalid pension has been cancelled, and when I made representations to the department on the subject, I received the following reply: -
Miss- was formerly in receipt of an invalid pension which was cancelled in January, 1931, on the ground that she was adequately maintained by her father. A perusal of the papers relating to the earlier claim shows that there was always some doubt as to the claimant’s incapacity for work.
A further claim was lodged in November last. The investigation showed that claimant was then twenty-eight years of age and was suffering from weakness of the left arm and leg since birth. She was also subject to occasional fits, one fit every two or three months. Examination showed that she was a well-nourished, healthy looking young woman with a slight limp. There is considerable loss of use in the left hand although there is good power in the upper arm and fairly good power in the forearm. The weakness of the leg occasions little disability. After a careful review of the evidence it cannot be considered that Miss- is permanently and totally incapacitated for work and in the circumstances I regret to say that it has not been found possible to authorize payment of a pension.
I do not regard that reply as satisfactory. In fact, it seems to me to bear out the claim that the girl is unable to earn her living. The fact that she takes epileptic fits is sufficient to prevent her from holding a position. I have no complaint against the officers of the Pensions Department, whom I have always found to be as sympathetic as the act will allow. It is the act which should be liberalized. During the last election campaign, the Labour party promised that, if it were returned to power, pensions would be increased to 25s. a week. We are convinced that those sections of the act which operate against claimants for pensions were never intended by Parliament so to operate. The Minister for Social Services has an opportunity to make a name for himself by giving to pensioners a better deal. I trust that before long the pension will be increased to 25s. a week, and the act liberalized.
.- I do not see how any member of the Labour party can be satisfied with this measure. I am astonished and ashamed, first that the Government should have the audacity to put forward such a paltry provision, and, secondly, that the Labour party did not realize its own strength, and make better use of it when it had the opportunity. The increase of ls. was conceded by the Government only under pressure from the Labour party, and I am convinced that if we had stood to our guns a little longer wo could have extracted more.
The other day, a good- deal was said regarding what anti-Labour governments have done for the pensioners. Mention was made of the fact that a Labour government had reduced pensions, but nothing was said of all the benefits to pensioners for which the Labour party has been responsible. Either the Minister for Social Services or the Prime Minister (Mr. Menzies) said that it was an anti-Labour government which had introduced the original pensions scheme. He did not mention that it was only under pressure from the Labour party that the Deakin Government agreed to bring the scheme in at all. When the act was proclaimed on the 18th April, 1909, the first Fisher Labour Government was in power, and it was the second Fisher Labour Government which, on the 18th November, 1910, reduced the qualifying age for women from 65 to 60. The measure providing for invalid pensions was proclaimed on the 19th November, 1910, when the second Fisher Government was in power.
There is nothing to be enthusiastic about in this bill, and I say that to members of the Labour party as well as to Government supporters. The Labour party’s policy during the election campaign included a pension rate of 25s. a week. We promised that a committee would be appointed to overhaul the act, remove anomalies, and liberalize its provisions. Even now, if the Government were sincere in its professed solicitude for the pensioners, it could grant them further material benefits without increasing the taxation load on the people. The war-time company tax proposals, as amended by the special committee, will yield £1,800,000 more than was originally budgeted for. If the Government were to grant an increase of 2s. 6d. to pensioners,, instead of ls., the extra cost would be only £1,200,000, which would still leave the revenue £600,000 better off than was expected. The Government should be pressed to give further relief to pensioners. Honorable members opposite have claimed that pensioners are better off to-day on a pension of £1 a week than when the rate was increased to £l in 1925. The Prime Minister said that the pension was worth 21s. 7d. now as compared with 1925. Since the Government’s proposals were announced, I have received the original of a pensioner’s fortnightly budget. It shows how the money was expended, and I defy any honorable member to point out how further economies could have been effected, or to say that the budget represents a decent standard of living. It is as follows : -
Thus, after making those very simple purchases, the pensioner was actually 2s. 7d. in debt. No provision is made for clothing, underclothing, boots, hats, tobacco, stimulants, amusements, tramfares, services of doctors or dentists, or vegetables, except potatoes and onions. To purchase these extras the unfortunate pensioner would have to depend on the bounty of his friends. Honorable members will agree that the pension provides the wherewithal for but a bare existence. It makes me absolutely ashamed to sit in this chamber and listen to honorable members opposite comparing the purchasing value of the pension to-day with its value some years ago. This budget discloses the real position. How many of the essential requirements of these unfortunate people can be purchased out of the miserly pension provided by this Government? When the announcement was first made that the Government, under pressure from the Opposition, proposed to increase the pension rate by ls. a week, some honorable members in this chamber said that pensioners in their electorates had signified their pleasure at the Government’s liberality. Let us see how grateful they are. I have received a large number of telegrams, not from pensioners themselves - a pensioner cannot afford to pay the cost of a telegram - but from their organizations in various parts of the Commonwealth. I shall read only two or three of them, but I can assure honorable members that they are all in the same strain. The following telegram was sent to me by the general secretary of the grand council of the United Oldage and Invalid Pensioners Association : -
Dumbfounded at treacherous cruel callous action consenting to ls. increase old-age and invalid pensions under present conditions they cannot exist on 21s. week letter following with telegrams enclosed from Western Australia Tasmania and South Australia.
Some publicity has been given by honorable members opposite to a telegram received from Mr. Skinner, who was said to be an official of the grand council of United Old-age and Invalid Pensioners Association in Victoria. I went to the trouble of telegraphing to the president of that organization to ascertain if Mr. Skinner had authority to represent its views. I received the following reply: -
I did not authorize any one do such dastardly thing amazed sabotage.
Mr. Pollard, the general secretary of the Western Australian branch of the Australian Pensioners League, sent me a telegram in the following terms : -
Your telegram surprise no knowledge of such action with which wc strongly disagree disgusted at compromise.
If honorable members are sufficiently interested I shall be glad to make available to them copies of all the telegrams I have received from executive officers of branches of this organization expressing disgust at Mr. Skinner’s action. How, then, can honorable members opposite contend that the pensioners are satisfied with the Government’s proposal? I warn honorable members opposite not to be misled into thinking that the agreement between representatives of the Opposition and the Government - I prefer to refer to it as a surrender - is to be adhered to for the duration of this Parliament. The Government must realize that this so-called agreement was only a temporary expedient to enable the budget to be passed. The budget and Estimates have now been disposed of, and I regard the agreement as no longer in existence.
In future members of the Labour party will be free to take whatever action they believe to be necessary in order to force the Government to afford relief, not only to the invalid and old-age pensioners, but also to other needy sections of the community. The Minister endeavoured to convince the House that this bill liberalized the existing legislation by making provision for variations of the pension in accordance with the rise and fall of the cost of living index figure. The honorable gentleman said that when the index figure rises by a certain amount, the pensioners will be entitled to a slight increase. The figures cited by the honorable gentleman do not reflect the true position in relation to the cost of living to-day. Since the announcement of the increase of the pension rate was made, living costs, particularly those of pensioners, have risen. Many pensioners are obliged to live in rooms and, because Of the absence of cooking facilities, are forced to live largely on canned foods, which have been brought into the sphere of increased sales tax. The increased taxes which the pensioners will have to pay in this way will not be nearly compensated for by this miserly increase of the pension rate. The Minister said that pensions are to be increased from the 19th December. That decision was made merely to meet the difficulties associated with the Christmas holidays. I am glad that the Minister for Trade and Customs (Mr. Harrison) is present in the chamber to hear what I have to say. The cost of living is rising rapidly despite the Minister’s assurance that the Commonwealth Statistician’s figures reveal that, since the outbreak of war, the rise has amounted to only 4.7 per cent. The Statistician’s figures in relation to the cost of living are just as incorrect as those which purport to show the unemployment position. I read recently that when the Commonwealth Prices Commissioner, Professor Copland, addressed a meeting of housewives in Melbourne and was unable to satisfy them that the- cost of living had risen by only 4.7 per cent., he was greatly discomfited and left in a hurry. Who know better than the working men’s wives the extent to which the cost of living has increased? When this Parliament resumes its deliberations in tlie New Year, we shall see that no further compromises of this character are made. In future the members of the Labour party will not regard themselves as bound by agreement arrived at between party managers, with the terms of which our party does not agree. We shall never again be fettered in this way. In future we shall do our utmost to assist this unfortunate section of the community. I sincerely regret that a compromise with the Government parties was ever made in connexion with the invalid and old-age pensions. As a member of the Labour party, I am obliged on this occasion to adhere to the terms of the compromise, but I trust that I shall never again be placed in a position where I am powerless to aid a deserving section of the community. The Labour party represents more than one-half of the electors of the Commonwealth, and one-half of the voting strength in this House. After the Swan by-election, it may have a majority. In the new year we shall use our strength to liberalize the provisions of the Invalid and Old-age Pensions Act, and we shall not rest until many of the anomalies it creates are removed.
.- When I was recently .before the electors, submitting the policy agreed upon by my leader as appropriate to the times and circumstances, I intimated to my constituents that, if elected, I proposed to advocate in the new Parliament an increase of the pension rate for invalid and oldage pensioners to £1 5s. a week. I had occasion to attend many meetings of organizations of pensioners formed and operating in various parts of the electorate of Batman. Naturally, they were not slow to point out that, in the sister Dominion of New Zealand, the pensions rate was higher than that proposed by the Labour party in this country. For the most part, those organizations were prepared to accept a payment of £1 5s. as a first instalment of their ideal of £1 10s. a week. They did not by any means fix that as the final limit of their demands; on the contrary, they intimated that they would expect Australia to treat its pensioners in due course as liberally as pensioners are being treated by the Government of the Dominion of New Zealand. At all events, my pledge ex tended to the £1 5s. limit. I came into this Parliament under a promise given t~ the pensioners, actual and prospective, that I would exert my influence to see that at least during this Parliament such a solatium would be given to the invalid and old-age pensioners.
– Every member of the Labour party gave a similar assurance.
– That is so. Bear in mind, therefore, that when the Labour party agreed, as a first step towards this ideal, to accept as incidental to the budget a payment of £1 ls. a week for tlie pensioners, it was neither satisfied with that as a final settlement of the claims of the pensioners, nor did it associate with the agreement any undertaking whatever that it would rest content in the new year which we are due to enter. So I merely say that my pledge to the electors stands. We have captured the first outpost. We have not made a very notable advance ; but at least we have not retreated, and we shall not retreat. It will be a hard fight. The heights will have to be won step by step ; but we shall not relax our efforts. The struggle cannot be renewed in the present year, because the Parliament is about to adjourn, but as it is part of my policy, and the policy of the Labour party generally, that the House should meet regularly and frequently, I apprehend that we shall have an opportunity to renew the engagement early in the New Year. We on this side of the House were given to understand that there would be no downward movement of the basic pension rate, irrespective of whether the cost of living fell or not. Nevertheless, it will be noted that, complementary to the provision iri the bill for the increase of pensions in accordance with any increase of the cost of living, there is a provision for the reduction of the pension in the event of any decrease of the cost of living. It has been forecast, I think with accuracy, that the cost of living will not decrease. But it would have been a graceful action by the Government to have made clear that the beggarly increase would not be rescinded.
– I shall move an amendment in the committee stage which will make 21s. the basic rate of pension.
– I am glad to have the honorable gentleman’s assurance on that point. It is quite possible that the effect of the budget will be deflationary, not immediately, perhaps, but in the not very distant future.
The honorable member for Bendigo (Mr. Rankin) rose in his place this morning and thanked the Government on behalf of the pensioners for having been graciously pleased to accord them an increase of is. a week. He pointed out, with the characteristic flamboyancy of the self-satisfied person, that we are engaged in a war for our very existence and that, should we lose the war, there would, of course,’ be no pensions; in other words, he mouthed the familiar jargon of comfortably-placed persons who make a practice of grinding the faces of the poor. Apparently the honorable gentleman thinks that the old-age and invalid pensioners should be enlisted for the purpose of winning the war. I maintain that whether this war be of long or short duration, we must maintain the social structure or throw up the sponge and admit defeat. If the war be brief, the present Parliament may conceivably last long enough to engage in a scheme of reconstruction when peace occurs. If it be a long struggle, the fact will remain that the special function of the Parliament is to see that the wage-earner is paid sufficient to enable him to keep his home together, and that the pensioner is given his solatium which, according to the statistics quoted by the honorable member for East Sydney (Mr. Ward) at an earlier stage, is barely sufficient at present to keep body and soul together. That standard at least should be maintained. Parliament does not fight on the field of battle; it does not make munitions or direct the strategic movements of troops. It is engaged in discussing the problems of the nation for the purpose of holing the balance fairly between the standards of living of different classes of the people so that, when this war is over, the work of reconstruction will not be an impossible task as the result of confusion and chaos, but will be a continuous operation arising from the fact that intelligent representative institutions have kept the machine of government running. I remind the honorable member for Bendigo - and I do it the more cheerfully because he gratuitously saw fit to use my name in terms of opprobrium unprovoked by any remarks of mine - that the pensioner is not stimulated to patriotism by fatuous statements made by persons who, like the honorable member, enjoy independent means of livelihood. First, the honorable gentleman is engaged in farming operations in highly favorable circumstances; secondly, he enjoys a salary of £1,000 a year, less taxes, as a member of this Parliament; and thirdly, he receives, according to his own admission, regular payments for his occasional spectacular appearances in military operations. This distinguished gentleman, with multiple means of private revenue, who rose in his place on this Friday morning, almost on the eve of Christmas, in order to assure the pensioners that they should be thankful for the extra ls. a week, which is to be given to them by the Government with one hand and taken away with the other, ought to be quiet about this meagre concession to the pensioners. I do not believe that any evidence can be obtained, either from observation of the honorable gentleman’s appearance or from study of his personal habits, that the honorable gentleman denies himself the full use of much larger sums than the mere 21s. a week which he is prepared to grant to the pensioners. I referred to the honorable gentleman only because he is an outstanding example of the point which I was endeavouring to make, namely, that the offer of an additional ls. a week to the pensioners is, in the circumstances, an ungracious and niggardly act on the part of the Government and represents only a small part of its obligation to old and invalid people. The first claim upon organized society should be the maintenance of the sick and invalid and those who, through no fault of their own, and owing to misfortunes which have come upon them, find themselves unable to provide for their own upkeep in the evening of their lives. As a rule, it can be safely said that the pensioners more than earn their pension before they are obliged to draw it. A man who works for the minimum wage, with occasional intervals of unemployment, and who, with a wife, struggles to raise and maintain a family, has earned much more as a unit in the scheme of civilization than is vouchsafed to him through the medium of a pension. Therefore, the terms of the Government’s concession are almost contemptible. On this occasion we have come to an agreement with the Government regarding the passage of this legislation. But this must not be ta.ken as in any way being prejudicial to our resolve to continue the fight for better conditions for the pensioners. Every member of the Labour party subscribes wholeheartedly to that proposition.
Sitting suspended from 12.45 to 145 p.m.
– I am dissatisfied with, and disappointed at, the smallness of the increase granted to pensioners, the majority of whom were almost dumbfounded when they heard that the Labour party had not succeeded in inducing the Government to give even one-half of what that party had promised would be given if it were returned to power. The compromise seemed the more remarkable in view of the several circumstances which the Minister should have taken into consideration. Pensioners have had a very bad time since the depression. For nearly ten years, the’ fight was waged to have the rate of pension restored to £1 a week. During that period the position of the pensioners became steadily worse, as the result of rises of the cost of living. In consequence of our continuous representations, the then Treasurer and Cabinet agreed to enact an automatic adjustment provision, in order that pensioners might pick up a little as the cost of living increased. Had that automatic provision been allowed to continue to operate, the pensioners would have been safeguarded against further increases of the cost of living and the rate of pension would to-day be more than £1 ls. For this reason, I thought that the increase would have been at least 2s. 6d. a week.
A further reason is that this year, for the first time for a considerable period, the increase of the number of pensioners has declined, and the liability of the Government is, consequently, much less than was anticipated. For another year or so similar conditions will operate at a greater rate because of work being available.
The honorable member for Forrest (Mr. Prowse) has suggested that the amount which a pensioner is allowed to earn should be increased. What is now happening in a natural way overcomes that difficulty. Because of the avenues of employment open to them as the result of the war and of defence operations, many old-age pensioners have relinquished the pension and returned to work. That would have happened years ago had similar openings existed. Those who are still physically fit for labouring work have obtained employment in munitions establishments. For this reason, the increase of the number of pensioners is not so great as was anticipated. I am sure that that will be the tendency during the continuance of the existing prosperity, false though it may be, resulting from the war effort. Next year the increase will probably be less than it was this year.
A third reason in support of our contention that a much higher rate of pension should be given, is that the cost of living is likely to continue to rise. Notwithstanding all the efforts of the pricefixing authorities, those who study the circumstances and the tendency of the times realize that there will be a gradual and continuous increase of the cost of living. If not, there will be a slump. I should prefer the increase to continue for a year or two, rather than see prices fall, because that is always a prelude to depression. This was in the minds of the Leader of the Opposition (Mr. Curtin) and his party when he proposed an immediate increase of 5s. a week. Although we failed to obtain that amount, the pensioners were confident of being given at least half of it. Almost unanimously, the pensioners’ organizations throughout Australia denied the statement of an individual who claimed to speak on their behalf, that the pensioners would gladly accept an additional ls. Admittedly, every extra ls. helps the pensioner, and with the aid of the adjustment provision he will derive some benefit, on which account we cannot vote against the bill; but I have never voted for anything more grudgingly. Had it not been that I desire to keep faith with the compact made to help the war effort, I would vote against it, and take the risk of offending pensioners’ organizations. I hope that when the Minister has to adjust the figure to offset an increase of the cost of living early in the new year, he will consider the granting of an additional 6d. in anticipation of a further rise.
– I am thoroughly disappointed at the treatment meted out to invalid and old-age pensioners. The argument of the Government is, that it has to find money for the war effort. The preservation of human life should, of course, he given major consideration by any Government in Australia; but there should also be particular consideration of the claims of old-age pensioners, who have pioneered this country and made possible a supreme war effort. Like the honorable member for Melbourne Ports (Mr. Holloway), I cannot vote against the bill because it provides for a slight increase of the pension. I hope, however, that when the House meets early in the new year the Government will consider a further increase. The agreement between the Opposition and the Government in respect of the proposed increase was made in order that the House might pass the budget. Therefore, review of the claims of pensioners early in the new year can be fully justified, and I am confident that the Opposition will make every effort to ensure reasonable treatment.
When application is made for a provisional’ pension on behalf of a person who is incapacitated, not permanently but sufficiently to prevent him from earning a livelihood for eight or nine months, or for an even shorter period, it is invariably refused.. Some allowance should be made to one who is not permanently incapacitated, in order that he might be enabled to regain his health and get back into active employment. Therefore, it should be to the advantage of the department and the Government to give greater consideration to applications of this character. Frequently, the local medical officer who has been in attendance on an applicant for an invalid pension, certifies that he is totally and permanently incapacitated, but the claim is rejected because the Government medical officer certifies to the contrary. I submit that the local medical officer who has had the treatment of the case, is more qualified to express an opinion as to the condition of the patient than is a Government medical officer who makes only a casual examination. A good deal might be said in regard to pensions generally. Even when matters are referred to the Commissioner in Canberra, difficulty is experienced in establishing a case for an applicant, and if the pension be eventually granted it is not paid from the date of application. This decision should be reviewed by the department.
I am entirely opposed to the suggestion that pensioners should be given grants of Crown lands, as has been suggested in this House to-day. These old people do not want to be put into camps by themselves, but wish to mix with the general community. Pensions are not a charity, but a right. In my electorate, there is a large number of pensioners, practically all of whom have seen better days. I aim reminded of a very old man, a graduate of Cambridge University, who is now a recipient of the old-age pension. I have a lot of sympathy for such men. Many of them tasted the good things of life and to-day they are granted a paltry sum, which is not sufficient to keep body and soul together. They did excellent work in developing primary and secondary industries in Australia, and I hope that the Government will now reward their efforts. In this community are many people who have more of the world’s goods than they require. They live in the lap of luxury. It is my purpose to see that they contribute to making the condition of pensioners a little happier. When Parliament reassembles early next year, the Minister should amend the act in the direction which I have suggested in order to give justice to this most deserving class.
.- To say that I am disappointed with the increase of pensions of ls. a week is to put it mildly. I am disgusted to think that the Government has been so niggardly in the amount of increase that it is now reluctantly conceding, at the point of the political pistol. After all, the Government should recognize that the Labour party submitted to the electors a definite promise to increase pensions to £1 5s. a week and to correct many anomalies contained in the act. It is no excuse to say that the removal of such anomalies will, in the aggregate, cost a large sum of money. As no attempt has been made under this hill to remove them, the Government should meet the Opposition half-way by increasing the pension from £1 to £1 2s. 6d. a week.
Several supporters of the Government have pointed out that the colossal expenditure upon the prosecution of the war .makes it impossible for the Government to act more generously towards this deserving class. I take a different view. All the necessaries of life such as bread, meat, butter and eggs are available in Australia in ever-increasing quantities. If the shipping position continues to deteriorate, we shall experience great difficulty in disposing of such products. The problem increases every day as the war grows in intensity. In the interests of our internal economy, the Government would have been wise to increase the pension in order to stimulate the consumption of primary products, which are rapidly glutting our markets and store-houses. The problem of .consumption and distribution cannot be overcome by increasing the standard of living of those who are already overfed and who have a plenitude of all the foods necessary to subsistence. It would be only an act of common justice and decency to distribute surplus foods among those who, for many years, have not received adequate supplies of the necessaries of life.
In Ballarat, there are no fewer than 2,600 invalid and old-age pensioners, which means that each week the sum of £2,600 is distributed in the city. So soon as a pensioner receives the money, he expends it upon the purchase of meat, bread and groceries. That stimulates business, which, in turn, creates a greater demand for the products of the soil. Examining dispassionately the Government’s refusal to increase the pension by more than ls. a week, I feel that a grave injustice has been done to a most deserving class. The pensioners are deserving of much more generous, treatment. I hope that as time passes the Government will, in the interests of our internal economy and in order to provide a greater outlet for our primary products, honour the promise that was made by the Labour party to increase pensions to at least £1 5s. a week.
The greatest anomaly in the act is the provision which requires that a person must be permanently and totally incapacitated before he is eligible to receive an invalid pension. If that were observed to the letter, no invalid would ever qualify for the pension, because he would be dead if he were totally and permanently incapacitated. Medical men, in all sincerity, place various interpretations upon this phrase, and there is urgent need to amend the act in order to obviate the anomalies that arise from these varying constructions of the law. I suggest that for the words.- “ permanently and totally incapacitated “, there should be substituted the words, “ not capable of earning a competence “. If a person is not capable of earning a competence, he is entitled, in my opinion, to the invalid pension.
– He should be incapable of earning a competence in his normal occupation.
– Yes. Since the inclusion in the act of the “ permanently and totally incapacitated “ qualification, our economic life has greatly changed. A mau with greying hair, or any physical disability, is not required in industry. Years ago, such men could be employed as liftmen and in other comparatively easy occupations. For those positions to-day, keen competition exists among able-bodied men, whom employers naturally prefer to older persons. Although the “ permanently and totally incapacitated “ qualification may have been warranted years ago, to-day it presents a serious anomaly, which should be corrected. The Minister for Social Services (Sir Frederick Stewart) has a kind heart, but he seems to lack the courage, or is unable to muster sufficient support from his colleagues, to give effect to his desires to treat justly this deserving section of the community. I trust that he will soon be able to convert other Ministers to his way of thinking. The ever-growing strength of the Labour party means that increasing pressure will be applied to the Government to grant greater concessions. Therefore, from the standpoint of expediency as well as of justice, the Government should heed the Opposition’s requests.
.- The compromise which was reached last week between the Government and the Opposition relates only to the budget, and in future the Ministry may expect the Labour party to apply stronger pressure in order to obtain additional concessions for pensioners. According to the view of the Government, which is based upon the cost of living figures, £1 ls. a week is the maximum amount to which a pensioner is entitled. That has not been accepted by the Labour party, which considers that the pension should be substantially greater than it is. It is not charity, because the recipients, by their industry years ago, have earned it. In addition, the taxes which they paid should be an assurance that they would be adequately provided for in their old-age or infirmity. During the election campaign, the Labour party promised that if it were returned to .power, it would increase the rate of pension to £1 5s. a week and liberalize the provisions of the act. I make it clear to the Government that, although we are not yet able to form a government, we intend to continue to do everything in our power to give effect to those promises. We are definitely not satisfied with the Government’s concession of ls. a week in respect of the rate of pension.
One provision of the bill is. that if the index figure falls below 936 the pension shall be reduced, and that if it rises 23 units above 981 in any quarter, the pension shall be increased by 6d. a week, with subsequent increases of 6d. for every additional rise of 23 units. The Labour party did not agree that in any circumstances the pension should be permitted to fall below £1 ls.
– I have already announced that at the committee stage I intend to move an amendment to provide that £1 ls. shall be the minimum rate payable.
– I am glad that that undertaking has been given. The provision for a reduction of the pension should not have appeared in the bill.
As several honorable members have pointed out, the Pensions Act is marred by many anomalies. One of these has relation to pensioners who subscribe to hospital schemes of one kind and another. In the event of a pensioner entering a hospital for treatment, the Pensions Department, often without attempting to ascertain whether the pensioner is a subscriber to the hospital fund, pays 14s. a week of the pension to the hospital authorities, leaving only 6s. a week for the pensioner. This provision becomes operative after the first month that a pensioner is in hospital. This is a grave injustice to pensioners who contribute to hospital schemes. It is very difficult to recover from hospital authorities any amount that has been paid in error in respect of the treatment of a pensioner who, because of his membership of a hospital scheme, is entitled to free treatment in the institution. I have had considerable correspondence concerning a pensioner who entered the Lidcombe Public Hospital for treatment. In respect of the man’s medical attention, the hospital authorities received £16 16s. from the Hospital Fund to which he was contributing, and also £2 16s. from the Pensions Department. Although the £2 16s. was paid in error, I have not yet been able to recover it for the pensioner. I hope that steps will be taken to ensure that pensioners will not be harassed over such matters as this.
During the debate on the Estimates, I referred to the unfair treatment to which pensioners owning their own homes are subjected when, for health or family reasons, they have to leave their home and rent a house in another locality. It frequently happens that such a pensioner may let his own home for, say, 15s. or £1 a week, and be required to pay as much as £1 5s. or £1 10s. a week for a house in another locality. Although involved in this additional expenditure, he gets no consideration in that connexion from the Pensions Department. The pension is reduced because the pensioner ceases to live in his own house. There should be an. offset of some kind in such a case. Further, if the pensioner’s house is valued at more than the prescribed figure and he has to leave it to live somewhere else, he runs a grave risk of having to sacrifice a part of his pension. I urge the Government to correct this anomaly without delay.
As other honorable members have referred to anomalies about which I had intended to speak I shall not delay the House by repeating what they have said. I ask the Government to take prompt steps to remove the defects of which complaint has been made.
– I am totally dissatisfied with the proposed increase of the rate of pension by ls. a week, as I consider it to be entirely inadequate. Two of the important provisions of the bill are those which provide for the alteration of the rate of pension, and the subsequent adjustments of the rate in accordance with cost of living figures. If the basis of the pension were satisfactory, possibly no fault could be found with the proposal to make adjustments in accordance with the variation of the cost of living index figures; but the basis is not satisfactory. This is the second occasion upon which legislative provision has been made for the adjustment of the rate of pensions in accordance with the fluctuations of the cost of living. Some time after the rate of pension was reduced by 2s. 6d. a week in the depression years, the Government of the day introduced a proposal for subsequent adjustments on a sliding scale related to the cost of living figures. It was proposed that variations of 6d. a week should be made in the event of certain decreases or increases of the index figure. The reason for the introduction of that proposal was that the Government was not willing to restore the pension in the manner in which it had been reduced. An entirely different reason has been given by this Government for the re-introduction of the principle of adjusting the pension according to variations of the cost of living figures. The Government has been subjected to considerable political pressure to improve the position of pensioners, but it has declined to increase the rate by more than ls. a week by straight-out legislative action, and it has adopted the index figure device to provide for any additional variations until the basic question is raised to 2os. I protest against the application of this principle to the pension, because I consider that the basis upon which the pension has been computed is entirely wrong. A worker, maintaining himself and his wife on a basic wage of £4 3s. a week, can live on only the lowest scale of comfort; so it is ridiculous to assume that a man and his wife in receipt of the full pension, which will be £2 2s. a week after the passing of this bill, will be able to purchase out of that sum even the essential requirements of a bare existence. In any case, the Government has already forced through Parliament measures to increase the rate of sales tax, which, in my opinion, will result in an increase of the cost of living of pensioners by more than 2s. a week.
– The sales tax does not apply to the necessaries of life.
– It may not apply to essential foodstuffs, but it applies to clothing, and I presume the Minister for Labour and National Service (Mr. Holt) will agree that pensioners must clothe themselves. It may be that people living on the basic wage can now and again purchase such foodstuffs as honey, eggs, and the like; but it is quite certain that pensioners will have to confine their purchases to bread, meat, butter and such essential requirements. They will have no money to spend on foodstuffs that may be considered to be in a class slightly above the barest necessaries.
The Labour party is definitely not satisfied with this compromise rate of 21s. a week.
– I notice that the Leader of the honorable member’s party (Mr. Beasley) is not in the House at the moment.
– If the Minister is suggesting, by that interjection, that the Opposition must consider itself bound by every decision of the Advisory War Council, he is likely in the not distant future to receive a rude shock. At any rate, he should not delude himself with such ideas.
I ask the Minister to give immediate attention to- what I regard as a very serious defect of the present administration relating to the fixing of the date from which successful applicants for pensions receive their payments. This appears to me to be governed by how the act is interpreted. Sometimes weeks, or even months, may elapse from the time a claimant submits a sworn declaration as to his age to the time when, after departmental investigation, the pension is granted. It happens at times that a week or two may also elapse after a favorable decision have been made before the pension is actually paid to the applicant. I point out to the Government that a delay of even three weeks in the granting and payment of the pension would swallow up an amount in excess of twelve months payments of this extra 1s. a week. I hope that the Minister will take steps to have the system altered so that pensions will be paid from the actual date of application, and not from the date when the Pensions Commissioner ultimately makes up his mind to grant the application.
I desire now to refer to the dissatisfaction which prevails in regard to the medical examination of applicants for invalid pensions. There are two government doctors in the Customs House in Sydney who, judging from their records, must be paid by results. It frequently happens that persons seeking an invalid pension support their applications with medical certificates from specialists, and from their own doctors who have attended to them for years ; yet, after hasty examination by a government medical officer, who has no previous knowledge of their cases, they are declared not to be totally and permanently incapacitated. That is another matter which requires attention.
Deserted wives often have great difficulty in obtaining a pension because they have not been divorced, or legally separated, from their husbands. I know of one the husband of whom has steadfastly refused to support his wife and family for more than 25 years. Although court orders have been made against him, the wife has never been able to collect under them. Recently, she applied for a pension, and was refused on the ground that she was not legally separated from her husband. She was told that her remedy lay in taking legal action. In cases of that kind, the provisions of the act should be interpreted in a more common-sense way.
– The Commissioner has power to exercise his discretion in such cases.
– I believe that to be so. I hope that the Minister will issue an instruction that the act is to be more generously interpreted. I was very pleased to hear so many honorable members, who agreed to the compromise increase of1s. a week, say that, in the very near future, they will stir up the Government to grant a further increase.
– Did any one on the Government side say that?
– No, but we are strong enough on this side to make the Government realize that a pension of 21s. a week is not enough.
.- I shall endeavour to be commendably brief. Most of what I would have liked to say has been already well said, and, in emulation of a distinguished member of the High Court Bench, I content myself with saying that I concur. Anticipating this discussion, I wrote to the Deputy Commissioner of Pensions in Melbourne, and asked him to tell me the number of pensioners in the Melbourne electorate, in Victoria, and in the whole of Australia. The information is contained in the following table: -
Thus, the average number for all electorates throughout Australia is 3,700, whilst in my electorate it is 6,832, or nearly twice the average. This is due to the social conditions existing inFitzroy, Carlton, North and West Melbourne, Flemington and Kensington. That part of the city is full of sub-standard houses of the kind referred to by the honorable member for Reid (Mr. Morgan) the other day. The rack-renting landlords are not content with a reasonable return on their capital, but demand something like 20 per cent. The result is that many of the unfortunate pensioners are compelled to live in single rooms.
Old-age pensioners fall into three categories - those who go into charitable institutions, those who live with their families, and those who, either because they desire to preserve their independence, or have no family with whom to live, or are unable to get into an institution, have to rent homes or rooms. The persons in this third class are hit hardest by increases of the cost of living, and I suggest that they might be helped by the granting of a special rent allowance. This would not be breaking new ground. During the depression, when 30 per cent, of our working population was on sustenance in Victoria, the Government of that State paid a rent allowance of 8s. a week in necessitous cases so that families might live under decent conditions. A similar allowance should be paid where necessary to oldage pensioners. I may mention in passing that those who live on interest, dividends, and rent did not miss the opportunity to enrich themselves out of the rent allowance paid by the Victorian Government. Old shanties which had been condemned were brought back into use and rented to sustenance workers for 10s. to 12s. a week, 2s. to 4s. a week in addition to the amount paid by the State.
My final point is that it is of little use to tinker at the old-age pensions system, which is entirely unsatisfactory. If the Minister for Social Services is courageous enough, he should during the next session bring forward a social service benefits’ scheme similar to that operating in New Zealand. There is no need to elaborate on the New Zealand scheme, except to say that it provides, not only old-age and invalid pensions, free medical and free hospital services, but also widows’ pensions, child endowment and unemployment insurance.
– Yes, at a wages tax of ls. in the £1.
– It is worth that if it provides all those benefits.
– I agree.
– In any case, it can be argued that old-age pensions are included in the scheme free of cost, the ls. a week going to pay for the other benefits.
– The honorable member’s argument is most ingenious.
– The Labour party’s objection to .the national insurance scheme introduced a few years ago was that the workers were expected to pay for their old-age pensions, and that may have been why the scheme was wrecked.
– I desire to express my disappointment that the Government has not seen fit to treat the pensioners more liberally. It should not be necessary for them to come cap in hand asking for what they are entitled to after a lifetime of service to the country. I endorse all that has been said by honorable members on this side of the House in favour of a higher pension rate. In my electorate are two of the largest institutions in New South Wales for the care of old people. They are the Lidcombe State Hospital for aged men, and the Newington Hospital for aged women. The inmates of those institutions were looking forward to more generous treatment by the Government. When a number of refugees came to Australia some time ago from Hong Kong, State officials were asked to report on the amount which would be necessary to maintain them. They reported that 30s. was not, sufficient, and recommended that at least £2 10s. a week should be paid. The Government accepted the recommendation. The money is being advanced in the form of a loan, but it may or may not be repaid. My point is that if 30s. a week is not sufficient to maintain a refugee, 21s. is certainly not sufficient to maintain a pensioner. The pension should be at least 25s. a week, as advocated by the Labour party. Even 30s. a week would be little enough. The Minister for Social Services has stated that he does not propose to go on vacation during the parliamentary recess. Neither do members of the Labour party, and we shall continue to press for better treatment of pensioners.
– in reply - lt would be a poor reward for the commendable brevity of honorable members, if I were to fail to follow their example. But honorable members would wish me to make one or two observations before the bill is dealt with by the committee. First, let me repeat now what I said by way of interjection this morning, that in committee I shall move an appropriate amendment which will have the effect of making 21s. the floor level of the pension until such time as Parliament decrees otherwise. I cannot say that the suggestion of the honorable member for Forrest (Mr. Prowse), that the permissible income of pensioners should be increased arouses any great sympathy in me. I am rather averse to the old-age pension being used as a means of subsidizing cheap aged labour. “We would be more honest if, instead of urging the equity of increasing the gross income of a man over 65 years of age, we lifted the actual pension itself.
– Hear, hear!
– Therefore, I cannot give any encouragement to the idea that we should take steps to increase the income of pensioners other than by the intrinsic increase of the pension itself. Under the Government’s proposals the gross income of the pensioner, that is, the maximum permissible income plus the pension, will in future be 33s. 6d. a week instead of 32s. 6d. With regard to most of the other suggestions made, honorable members will realize that it is not practicable at this stage to make any further emendations to the statute. I promise, however, that, as far as sympathetic administration may do it, the discriminatory power vested in the Minister and the Commissioner will be used in favour of the pensioner. I assure honorable members that, in a scheme of this kind involving the distribution of £18,000,000 between a large number of pensioners, inequalities are inevitable. But the utmost sympathy will be extended where there appears to be a prima facie case for the exercise of discrimination.
The honorable member for Melbourne Ports (Mr. Holloway) suggested that had the adjustments in the 1933 scheme been allowed to continue, the pension to-day would be in excess of the 21s. now proposed. As a matter of fact, when those adjustments were operating the pension had a ceiling of 20s., and even if the maximum had not been set, the pension to-day would have still been 20s. The index figure for food and groceries on which that scheme was based would have had to move appreciably above what it is to-day before the pension could have been increased beyond 20s. I join with those honorable members who have indicated their desire that a more scientific method should be devised for providing for invalid and aged people. I trust that before the life of this Parliament expires we shall be able to call upon some of those honorable members to come to our aid in formulating a worth-while scheme.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 -
Section twenty-four of the principal act is amended -
byinserting after sub-section (1.) the following sub-sections: - “ (1a.) The maximum rate of pension per annum shall be reviewed in each quarter (commencing with the quarter ending on the thirtyfirst day of March, One thousand nine hundred and forty -one) by the Commissioner, who shall then determine the maximum rate per annum which shall apply from and including the due date of the first fortnightly instalment in the next succeeding quarter, in accordance with the following provisions: -
If at any time the price index number rises so that the maximum rate of pension per annum exceeds Fifty-four pounds twelve shillings per annum and the price index number subsequently falls, the maximum rate of pension per annum shall, where necessary, be reduced to accord with the maximum rate of pension per annum determined in accordance with the last preceding paragraph :
Provided that the maximum rate of pension per annum shall not in any event be reduced to less than Fiftyfour pounds twelve shillings.”
Amendment (by Sir Frederick Stewart) agreed to -
That paragraph (6) of proposed new subsection (1a.), be omitted and the following paragraph inserted in lieu thereof: - “ (6) if at any time the price index number rises so that the maximum rate” of pension per annum exceeds Fifty-four pounds twelve shillings per annum and the price index number subsequently falls, the maximum rate of pension per annum shall, where necessary, be reduced to accord with the maximum rate of pension per annum determined in accordance with the last preceding paragraph:
Provided that the maximum rate of pension per annum shall not in any event be reduced to less than Fifty-four pounds twelve shillings.”.
Clause, as amended, agreed to.
Clauses 4 to 8 agreed to.
Title agreed to.
Bill reported with an amendment; report - by leave - adopted.
Bill - by leave - read a third time.
First report brought up by Mr. Ryan, read by the Clerk, and agreed to.
AUSTRALIAN SOLDIERS’ REPATRIATION BILL (N!o. 2) 1940.
Motion (by Mr. Holt) - by leave - agreed to -
That he have leave to bring in a bill for an act to amend sections forty-five AD, forty-five AB, forty-five AG and forty-five AO of the Australian Soldiers’ Repatriation Act 1020-40.
Bill brought up and read a first time.
– by leave - I move -
That the bill be now read a second time.
This bill is to amend the maximum rates of service pension specified in the Australian Soldiers’ Repatriation Act, so that the rates for members and wives will be increased by the same amount as has just been added to the invalid and old-age pension.- Service pensions were instituted in January, 1936, for the purpose mainly of providing for members of the Forces an invalid or old-age pension scheme of a more liberal character than that available to the general community. The advantages to the soldier are demonstrated at the first step towards participation in the benefit, when the soldier learns the conditions as to eligibility. If the pension is to be granted on the grounds of age, the member is admitted at the age of 60 years, or if a female member, say, an ex-nurse of the Australian Imperial Force, at the age of 55 years - in each case five years earlier than with the ordinary old-age pension. If the member is permanently unemployable, or suffering from pulmonary tuberculosis, not only is he eligible for a grant, but also his wife, and children up to four in number, may be granted a pension, merely on relationship. No such provision exists in respect of a pension under the Invalid and Old-age Pensions Act. The maximum grant under that act to an invalid would be 20s. a week, or, if the bill with which we have just dealt be passed by the Senate, 21s. a week; under the service pension scheme it would be, in the case instanced, 44s. a week, being 17s. to the member, 17s. to the wife, and 10s. for the children.
As will be seen by the clauses in the bill, the rates of pension for the members and wives have been increased by 2s. a fortnight, except where the pensioner, being in a public institution, is paid the rate prescribed under Section 45ao At present that rate is 14s. a fortnight, the difference between that amount and the ordinary rate being paid to the institution towards the maintenance of the pensioner. It is intended that, of the increase of 2s. a fortnight, ls. should go to the pensioner, and the other half be added to the payment to be made to the institution. With this increase of service pension, the maximum rate for a wife will be the same as the war pension for a wife of a soldier who is totally incapacitated as a result of war service. One important difference between the treatment meted out to service pensioners and invalid and old-age pensioners is that no provision has been made in this bill for the rate of pension to fluctuate with variations of the cost of living. That policy has not been adopted through any desire to deprive service pensioners of increases to which they may be entitled, but because we have been advised by the Commissioner of Repatriation that such a scheme would be entirely unworkable from an administrative point of view. The House has never shown itself to be niggardly in its treatment of those entitled to service pensions.
– I take it that any increases granted to invalid and old-age pensioners as compensation for rising costs will also be granted to service pensioners.
– I have no doubt that the Government would be influenced by any change of conditions that would make some revision of the rate of pension necessary.
– If such a provision is workable in connexion with invalid and old-age pensions, why should a similar provision be unworkable in connexion with service pensions? The two pensions are practically identical.
– They are not identical. The Repatriation Act provides for the payment of service pensions to wives and children of ex-service men. A service pensioner may receive 18s. a week, his wife 18s. and his child 2s. 6d. If an increase of 6d. a week granted to the invalid and old-age pensioners as a result of the variation of the cost of living had to be applied to the varying pensions paid under the repatriation scheme, we would find ourselves dealing with amounts as low as l/37th of one penny. I assure the honorable member that this matter has been exhaustively investigated by the commission and also by the Government. “We appreciated the fact that there appeared to be a distinction between the treatments accorded to the two classes of pensioner. The treatment of the service pensioner now proposed is the best possible in the circumstances.
– In the case of married couples, will both persons receive the ls. increase?
– But an increase will not be granted in respect of children?
– That is so. Since the bill was printed, an amendment of clause 5 has been circulated to honorable members. The purpose of this clause is to avoid complications which otherwise might arise, if, for instance, an increase of a pension paid to a wife was not subject to the adjustment provided for elsewhere in this measure. It provides that the permissible income figure shall not be static, and that it shall not exceed the amount which might be received by a pensioner under the Invalid and Old-age Pensions Act. I commend the bill to the House.
.- The Minister has very adequately stated the purpose of the bill, but, by further consideration of its terms, the Government should be able to agree on some provision that will compensate a service pensioner for any loss he may sustain through not being granted an adjustment for increases of the cost of living. On the spur of the moment it is difficult to suggest some rule of thumb amendment to accomplish this object, but it should be possible for the Government to evolve one in the near future. I should like the Minister to give consideration, in relation to service pensions, to the arguments that I advanced the other night about the interpretation of the words “ totally and permanently incapacitated “ in connexion with invalid and old-age pensions ; the term corresponds to “ permanently unemployable “. A man should be entitled to a service pension if incapacity renders him unfit to earn his living. I support the bill.
– This ‘bill will afford a great deal of relief, particularly to the married men who will come under its provisions. I notice that the law in relation to children will not be altered, because of the difficulties of book-keeping involved in the computation of small fractions of a penny. But rapid increases of the cost of living should be taken into consideration in connexion with children’s allowances when adjustments are made to the pensions. Many men who failed to obtain a pension for military service because, on returning from service, they obtained employment, but who later suffered illness due to war injuries and became almost totally unemployable, will be provided for by the measure, and thus a long-felt want will be supplied. In this respect the bill represents an improvement on the conditions of the Invalid and Old-age Pensions Act, because wives and children will be taken into account. I give to the measure my full support.
– in reply - I shall discuss the points raised by the honorable member for Bourke (Mr. Blackburn) with my colleague, the Minister for Repatriation who, no doubt, will give full consideration to them.
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.
– There is no motion before the House.
Assent to the following bills re ported : -
Sales Tax Procedure Bill 1940.
Sales Tax Assessment Bill (No. 1a) 1940.
Sitting suspended from 3.10 to 5.13 p.m.
The following bills were returned from the Senate without amendment or requests : -
Income Tax Assessment Bill (No. 2) 1940.
Income Tax Bill (No. 2) 1940.
War-time (Company) Tax Assessment Bill (No. 2) 1940.
War-time (Company) Tax Bill 1940.
Wine Export Bounty Bill 1940.
Treasury Bills Bill 1940.
Officers’ Rights Declaration Bill 1940.
Post and Telegraph Rates (Defence Forces) Bill (No. 2) 1940.
Gold Tax Collection Bill (No. 2) 1940.
Appropriation Bill 1940-41.
Appropriation (Works and Buildings) Bill 1940-41.
Australian Soldiers’ Repatriation Bill (No. 2) 1940.
Invalid and Old-age Pensions Bill 1940.
– by leave - I have been informed that certain ex-Australian income is completely avoiding taxation. In particular, my attention has been directed to tin-mining shares. The suggestion made to me is that the shares are being deliberately purchased for the purpose of avoiding taxation, and I am asked to neutralize such unpatriotic actions by bringing the class of shares mentioned into the taxation field. I am most concerned about the allegation, and if I find that there be any substance in the information, I shall consider bringing an amendment of the Income Tax Assessment Act before Parliament at its next sittings in order to prevent such practices.
– by leave - I lay on the table the following paper -
The Budget 1940-41 - Supplementary Papers, and move -
That the paper be printed.
In pursuance of the recommendations of the Advisory War Council which were announced to Parliament by the Prime Minister on the 5th December, certain amendments have been made to the original budget proposals which were brought down on the 21st November, 1940. I shall briefly summarize these amendments and show their effect on the budget.
The chief alteration in income tax on individuals relates to the statutory exemption. The original budget proposals provided for an exemption of £150, vanishing at £300. The amended proposal provides for an exemption of £200, vanishing at £400. The loss of revenue as a result of this alteration is estimated at £2,500,000. Wholly dependent mothers are to be added to the list of dependants for purposes of exemption. The estimated loss of revenue is not known, but is not expected tobe very large.
War-time Company Tax.
The committee which was appointed to discuss the war-time company tax made certain recommendations, which were adopted by the Government. The substance of them was as follows : -
All public companies to be required to pay the greater of the following amounts, viz. : -
The amendments, which have since been approved by this House, are estimated to produce £7,000,000 in a full year, as compared with £5,300,000 under the original budget proposals. The collections for 1940-41 are estimated at £5,000,000, being an increase of £750,000 over the amount that was originally contemplated in the budget for war-time company tax.
The amendments have resulted in the following increases of expenditure: -
A domestic allowance of 7s. a week is to be paid to wives with a child or children. The estimated cost for a full year is £1,000,000, and for 1940-41 £500,000.
Invalid and Old-age Pensions.
The present maximum pension of 20s. a week is to be increased to 21s. a week and is to be subject to quarterly adjustments in units of 6d., in accordance with variations in the “ all items “ index of retail prices. The quarterly adjustments are not to reduce the pension below 21s. a week, -without the approval of Parliament. The estimated cost of the present increase for a full year is £900,000, and the cost for 1940-41 is £470,000. ” Service Pensions “ under Australian Soldiers’ Repatriation Act.
An increase is being made in what is known as “ service pensions “ under the Australian Soldiers’ Repatriation Act. The estimated cost for a full year is £30,000, and the cost for 1940-41 is £15,000.
Provision is to be made for a grant of £1,000,000 for drought relief to wheat farmers, the allocation of this sum to be referred to the Agricultural Council.
The summarized cost of these amendments is as follows : -
Effect on Consolidated Revenue Fund 1940-41.
The whole of the cost of 1940-41 will be reflected in the Consolidated Revenue Fund, except £500,000 soldiers’ pay and allowances. The cost to the revenue budget will therefore be £3,235,000. The effect of this will be to reduce the estimated sum that will be available from revenue for defence and war (1939-40) services from £65,220,000 to £61,985,000.
As a result of the increase of soldiers’ pay and allowances, the estimated war expenditure for 1940-41 will be increased to £186,500,000. It will be necessary to increase war expenditure from loan fund by £3,235,000, transferred from the revenue budget, plus £500,000 for soldiers’ pay and allowances - a total increase of £3,735,000. The estimate of war expenditure from loan fund will thus be £120,966,000, in lieu of the original estimate of £117,231,000. The total amount of war expenditure will be financed as follows : -
The following is a summary of the budget showing the original estimates of revenue and expenditure from the Consolidated Revenue Fund and the revised estimates as affected by the amendments to which I have referred: -
Question resolved in the affirmative.
– I have to announce to the House that Senator H. S. Foll, Minister for the Interior, has this day been sworn in as Minister for Information in succession to myself. The Minister for Information will be represented in this chamber by the Assistant Minister, Mr. Collins.
Motion (by Mr. Menzies) agreed to -
That leave of absence be given to every member of the House of Representatives from the determination of this sitting of the House to the date of its next meeting.
– I move -
That the House, at its rising, adjourn until a date and hour to be fixed by Mr. Speaker, which time of meeting shall be notified by Mr. Speaker to each member by telegram or letter.
The reason that I submit this motion in the usual form is that it is very difficult indeed in these days to nominate a specific meeting date for the Parliament. My own view, as I have had occasion to point out before to honorable members, is that we should have in these times, when a great deal of executive government has to take place, reasonably frequent meetings of the Parliament which should, consistent with the transaction of business, be reasonably short. I do not accept the view, nor, I imagine, would many people who are familiar with the work which has to be done, that the Parliament should be in more or less continuous session. Those who are acquainted with the weight of administrative work will unhesitatingly agree that, if such work is to be done effectively, with proper concentration of mind, it is extremely difficult to do it if there are prolonged sittings of the Parliament. I offer that, not as an undemocratic sentiment, but as a sentiment based upon the belief that we should make our system of government, which we believe to be the best system, a workable one, and obtain the best results from it. The Government is of opinion that Parliament should re-assemble at the beginning of March next. Should circumstances develop which render an earlier meeting necessary, it will be the Government’s duty to have Parliament summoned at an earlier date. The Parliament will not meet later unless extraordinary circumstances arise. During the parliamentary recess the Advisory War Council will meet regularly, so that there will be ample opportunity to bring to the notice of the Government any reasons which suggest the desirability of an earlier meeting.
.- I cannot but feel that the length of the proposed recess is greater than is reasonable in the circumstances. The Prime Minister (Mr. Menzies) has said that we must endeavour to make Parliament a workable institution, but I fear that that phrase is a little overworked. It seems to me that the Prime Minister regards “ workable “ from the point of view of the convenience of the Executive Government rather than that of the rights of the people. I am not convinced that frequent sittings of the Advisory War Council will be a sufficient or satisfactory substitute for the Parliament. The whole issue reduces itself to a contest between the popular right, as expressed by the meeting of the Parliament, and the executive right to displace the Parliament. That is an age-long conflict, and it is a curious and highly regrettable fact that that contest has become more acute in this unfortunate period of war, which we are said to he waging for the preservation of democratic institutions. Great as is my respect for the membership of the Advisory War Council, I have never been prepared to concede that any such body, meeting in private, should supplant the popular institution meeting under the searchlight of the public eye. I had imagined that the Parliament would meet about the end of January, as that would have allowed what I consider to be a reasonable recess. I am prepared to concede to the Prime Minister that the sittings of the Parliament should not necessarily be of long duration; but the important thing is, not whether the sittings should be long or short - my view is that they should be long or short according to the requirements of the case then existing - but whether the Executive Government should decide when the people shall be articulate through the instrument of government known as the Parliament. The protest which I now make is not new on my part, nor is it confined to myself. Those who stand for the democratic rights for which we are invited to make such a tremendous sacrifice, are agreed that the Parliament should not be closed down. The protection of the popular right, not the convenience of Ministers, is the paramount thing. The Advisory War Council is a body approved by the Opposition as a means of reducing the work of Ministers, and as the Cabinet is numerically larger than on any previous occasion, what justification is there for saying that the Parliament should not meet for two or three months? It is perfectly certain that by the end of January there will be an ample supply of matters upon which the public mind should have an opportunity to reflect itself in this Parliament. The summoning of members at either the beginning or the end of March would be absurd; by that time we shall be within measurable distance of Easter. I do not know when the Easter vacation will come.
– There will not be a vacation.
– By that time we shall be approaching St. Patrick’s Bay.
– That great feast can be celebrated appropriately whether or not the Parliament be sitting. By the time that we are called together, Easter will be approaching, and honorable members will be hurrying away for their holidays. After Easter we shall be told that the climate of Canberra is too rigorous for the discharge of business. I remind honorable members that Canberra is the Capital City of Australia where the National Parliament is situated. For the reasons which I have inadequately stated, and others which might be stated, the indication by the Prime Minister that the Parliament will not meet till March is, in my view, to be deplored. I do not invite the House to divide upon this matter, but I make my protest. I am entirely dissatisfied with the reasons given by the Prime Minister for so long an adjournment.
.- I warn the Government to “ Beware the ides of March”. I should like an assurance from the Prime Minister (Mr. Menzies), that should the Government fall to pieces before March, as well it might, the House will be called together by the leader of the new Ministry, whoever he may be.
.- Whilst I agree, in the main, with what has been said by the honorable member for Batman (Mr. Brennan), I am concerned not so much that Parliament should meet a few weeks earlier or later in the new year as that it should meet frequently and, ait each meeting, sit for a reasonable time. The honorable member for Barker (Mr. Archie Cameron) has been deprived of what he believes to be his constitutional right to move, pursuant ito notice, for the disallowance of a regulation. Had the sittings of this House been protracted until next week; he would have had the right to submit his motion, or see the regulation lapse. Although I do not agree with the objective of the honorable member, I do not agree that he should be deprived of the right that is undoubtedly his. The sittings should be long enough to give to members adequate and reasonable opportunities to deal with matters of importance. There should also be frequent sittings of the Parliament. Members may be impatient, but the experience of every one of us is, I am sure, that a grievance brought under ministerial notice on the floor of the House is given a much more satisfactory reply than a grievance submitted by correspondence. Then, by frequent meetings of the Parliament, the rights and liberties of the people are vindicated and protected. A great constitutional authority has said that two inalienable liberties of the English people are the writ of habeas corpus - which, under present conditions, the Executive may disregard if it likes - and the right of every member of the Parliament to express on the floor of the House the grievances of his constituent’s, with the object of exerting public pressure upon the Executive. I hope that Parliament will meet frequently during next year, not for short periods, but for periods sufficiently long to enable honorable members to discuss
the grievances of their constituents, and to attack such regulations as they believe should be attacked.
Question resolved in the affirmative.
– - I move -
That the House do now adjourn.
I take this opportunity to occupy a little time to offer the good wishes of the Government to honorable members, to the various officers of the House to whom I shall refer, and generally to the people of this country.
Speaking as Prime Minister in a Parliament in which the prime ministerial office is, perhaps, held more precariously than in ordinary political circumstances, I consider that I should fail in my duty if I did not express my appreciation of the work done in support of myself and of .the policy of the Government, in what I believe to be the best interests of Australia, by my Cabinet colleagues. I make this acknowledgment wholeheartedly.
I also express my appreciation of the work of the Leader of the Opposition (Mr. Curtin). This is a subject which I approach with some diffidence in these days, because nobody is more conscious than I am of the fact that praise for a Leader of the Opposition by a Prime Minister at once provokes suggestions that there may be something wrong with the Leader of the Opposition.
– A most unwarranted suggestion !
– I was not thinking of my friend .the honorable member for Ballarat (Mr. Pollard) for, though he seldom looks like it, he usually agrees with me. These are most unusual times. We are assembled in a Parliament in which the parties are almost equally balanced. Consequently, if the Parliament were, to a considerable degree, in the hands of men who lacked goodwill and mutual understanding, it could be made completely unworkable. Whilst in ordinary times of peace an unworkable Parliament might be considered a matter for some gaiety by the man in the street, in a time of war it would be a tragedy. I honour the Leader of the Opposition for the clear sight he has always kept of this consideration. I do not for a moment accept the view held by some partisans that a Leader of the Opposition should constantly fight the Government and, in every way, obstruct the business which it introduces to Parliament. I do not agree with those people, if there be any, who believe that the test of the efficiency of a Leader of the Opposition is the extent to which he indulges in heroics at the expense of the Government. Since I first entered this Parliament, the Leader of the Opposition, politically speaking, has been my opponent, and I confess that I have never found him to be lacking in vigour in that capacity. During the recent election campaign I did not find him inviting the people of Australia to return my Government to office. On the contrary, he exercised his proper privilege of asking the people of Australia for a mandate to govern, just as I, on behalf of the United Australia party and the Country party, asked them to give us a mandate to govern. But I have always had a great admiration for an undaunted fighter. I warmly admire a great number of my political opponents, but at the same time I have a special admiration for a man who can reconcile with the duties of political warfare the proper interests of the nation. My friend, the Leader of the Opposition, and I are always in difficulty on this matter because we never know when either a general election or a by-election may be held. If I say something agreeable about the Leader of the Opposition, a placard will probably be pasted on a lamp post reading “ Look what the Prime Minister has said about the Leader of the Opposition “. If he says something agreeable about me, no doubt the process would be reciprocated. This, however, shall not deter me from saying that in this difficult Parliament - and this is an inherently difficult Parliament - and in the difficult sittings which we are just concluding, I, as Prime Minister, have been under an immeasurable debt to the Leader of the
Opposition for his consistent courtesy and understanding. His patriotism is completely clear and unspoiled.
Honorable Members. - Hear, hear!
– I extend my greetings, and the greetings of the members of the Government, to the private members of the Parliament, some of whom have, from time to time, hinted vaguely that they do not approve of us.
– There has been nothing vague about the hints !
– On the contrary !
– There was nothing vague about what the honorable member for Ballarat said last night; yet he left me guessing. Parliament cannot possibly work effectively without a great deal of goodwill on the part of private members. As the honorable member for Bourke (Mr. Blackburn) properly reminded us a few minutes ago, the functions of private members of Parliament are most important. I hope that I shall not forget it. I agree with what the honorable member said a few moments ago about the need for frequent meetings of the Parliament. I trust that I may not be regarded as an enemy of the Parliament which it is my honour to serve. The Government will arrange for Parliament to meet as frequently as possible. But I am sure that the honorable member for Bourke, with his long experience, will appreciate that peculiar difficulties attach to ministerial office in times like these.
I express the goodwill of the Government and myself to the honorable member for West Sydney (Mr. Beasley), who is not ableto be with us at the moment, and also to the members of his party. I do likewise in respect of my friend and colleague, the Acting Leader of the Country party (Mr. Fadden) and his party.
To you, Mr. Speaker, we offer our goodwill. In doing this I am sure that I may be regarded as the mouthpiece of the entire Parliament. You have but recently assumed the responsibility of Speaker of the House. It is a difficult office, calling for a clear head, cool judgment, and the prompt and intelligible expression of views which will commend themselves to the good sense of honorable members.
– But Mr. Speaker’s job, like that of the Prime Minister, is precarious.
– I see nothing precarious about your tenure of office, Mr. Speaker. Indeed, I may say that if the general quality of your performance in the Chair should conform to the sample that you have given us in the last few weeks, you are likely to establish a record term in the office which you occupy.
Wo also offer our Christmas greetings to the Chairman of Committees (Mr. Prowse) who will, I am sure, remember this Parliament - the third in which he has presided over the deliberations of the committee - as particularly distinguished by the fact that he was able, in. one of those odd leisure hours which we ha.ve had during this torrid week, to measure his strength against the world’s champion billiard player.
– And he made a “duck “.
– I think he played a. very good shot. It was fruitless, but it. should not bc lightly disposed of on that account. I have frequently made speeches that I thought 1110St effective and they produced no result whatever; but; they should not, bc lightly disposed of on that account. The Temporary Chairmen, also, .are in our minds. They are “a very present help in trouble “, .particularly when the House sits long hours as it’ has sat; this week. We all feel our customary debt to the’ Clerk. Mie Clerk Assistant, and all chamber officers. I should like, if I do not;” make an- invidious distinction, to express our common obligation to the Clerk of the House. ‘It has been my good fortune in the course of twelve years to see a, good deal of various Clerks. As the honorable member for Bourke will remember, because we had the same view, and,- as the honorable member for Ballarat will recall, we were’ extremely fortunate to have serving us in the Victorian Parliament a very distinguished Clerk; but I cannot imagine that any Clerk of this House could do his work more coolly, courteously and competently than Mr. Green.
Honorable Members. - Hear, hear!
– I do not. -know whether he has any political views. I must ask him quietly some day.’ He looks at me in exactly the same dispassionate fashion as he looks at the Leader. of the Opposition- (Mr.. Curtin). I betray no Cabinet secret when I say that, no matter how experienced he is in the “ abracadabra” of parliamentary procedure, a Minister at this table is glad to hare alarm’s length a cool-headed mau who can miraculously produce the slip of paper which tells him what he is trying to say, and leaves him with the comforting knowledge that when he has said it, Parliament will not be dissolved by some mere accident but will ultimately arrive at the nest item on the business paper. The Librarian, the staffs which, serve in this Parliament, the Hansard reporters, who improve, trim and turn out; our speeches in an astonishing manner, the party Whips, whoso duty it is to put honorable members to bed and sometimes to pull them out of bed - all of those gentlemen have placed us under a debt of obligation.
– I think that they show more signs of strain than normal.
– The Leader of the Opposition, must remember that; the mortality -rate among Whips at the last general election was very high, and might, have been higher with a mere turn of the wheel.’ Finally, I refer with bated breath to those who are placed -in the choir above us, and who have to perform the astonishing function from day to day of appearing to be interested, sometimes themselves forming a quorum in order to see, if there is a, quorum present in the House, and who are so gifted in. the affairs of humanity that they are frequently heard in the corridors expostulating at the idea, of Parliament going into camera so I hat they must; go home to bed instead, of serving the interests of the reading” public.” All that; is admirable, but still” more admirable is the fact that
I honorable members know that in our battles, marching, and counte-marching, we. are served by press representatives in this building and the Capital City whose word can be accepted and who are honorable nien, skilled i.n their craft. I express my debt; to them, and I am sure that; I say thill; on behalf of honorable members generally, i hope that I have referred to all those who have a claim upon our th oughts at this time.
– All but one - the Independent and honorable member for Wimmera (Mr. Wilson).
– I have proposed many toasts in my time, but I ‘ have never previously been assigned the task of proposing the toast “Absent Friends “. Otherwise, I should be able to deal with that. If there appears to be a note of frivolity in my remarks, I apologize. I have felt that in spite of the enormous difficulties under which we met this Parliament we shall finish in a real spirit, of goodwill. Every honorable member, whatever his party or views may be, is looking forward to Christmas, not merely because it is Christmas and a holiday, but also because he is saying to himself subconsciously “ Well, this Christmas is a Christmas of war, but the prayer we all have is that the following Christmas will be a Christmas of peace, and that in the meantime this country shall have so borne itself through, our united effort; and example that victory will have come to us”.
– I reciprocate everything that the Prime Minister (Mr. Menzies) has said in his expression of gratitude to all sections of the House, and his tributes to all who have assisted us in the performance of what have been more than usually exacting duties. The session has been a time of very great difficulty. It is but natural that when our country is engaged in so tremendousa struggle the National Parliament should have problems transcending any that had previously come before it ; and if, in dealing with those problems, we manifested the minor ordinary attributes of our common humanity - periods of impatience, apparent intolerance, and some asperity - let it be said that those signs of temperament were owing to the intensity with whichwe approach the task given to us to do. If there is anybody in this Parliament who has said or done anything that; I have regarded as in any way unpleasant, I know that what was said arose out of a. conscientious desire to say and do the right thing in the interests of Australia. If I have been lacking in the ordinary courtesies, I hope that my lapse was but temporary. There has been nothing in my mind but realization that every man has the same title to speak as a representative of the people; our equality of status enables us at least to understand that now and again a word is said, which, no sooner than it; is said, we would gladly recall. While I am Leader of the Opposition, I shall do my best to promote the good government of this country, and, having regard to what are the obligations of my office, do all I can to ensure that the Prime Ministership of this nation shall be conducted in such a way that it will be at least free from anything but; reasonable, honorable, and straightforward criticism and opposition. If the country will not give a. mandate to my party, but will give one to the party led by the right honorable gentleman, I accept that decision, and shall do my best to have carried out by the Government as much as possible of the programme in which I believe. I shall not permit myself to do anything that would jeopardize the free parliamentary system of this country, which is the chief instrument of the freedom that we are striving to preserve. I appeal to all of those in Australia who feel that they have a duty to criticize Parliament, to distinguishbetween that criticism which is well founded and that which rests upon mere assumption, and is sometimes, perhaps too often, instigated and fed by mere prejudice. Whatever may be said about our Parliament, either good or bad, it is the Parliament of a free people. Only quite recently, the enfranchised people sent all of us to this legislature. To the utmost of our respective abilities we have reflected, in our attitude towards the problems of the country, the opinions of the people at large. The people are divided as to which party or parties shall govern Australia, and that division is reflected in this Parliament; but there is no division among the people in regard to the necessity for complete co-operation by those who are charged withthe responsibility to ensure the safety of our country and, as vigorously as we can, to promote the prosecution of the war. I hope for the fulfilment of the prayer of the right honorable gentleman, that when we come to another Christinas, as I pray that we all shall, it will be a Christinas of peace. Peace is a very precious thing. To lose it is to lose a great deal, and if it ‘be regained worthily, and on the basis of security from molestation for people of independence everywhere, the result will be to usher in a new era in the history of man,, an era which the experience of these days ought to make more fruitful of welfare for civilization at large.
I offer to you, Mr. Speaker; my compliments, and the wish that the ensuing short recess will be enjoyed by you. I give to you the assurance which we gave to you upon your assumption of office, that we shall do our best to spare you any tribulations and to leave with you the most, pleasant recollections of your association with us.
To the Chairman of Committees I offer once more the hope that he, too, will have a happy Christmas.
I pay to the Clerk of the House the tribute which the Prime Minister himself paid. The Government, no doubt, receives from this officer all the assistance that he can give to it, in order that business may be placed before this House in proper form. But the Opposition also has rights in t his chamber. The Clerk lias no ‘partisanship. His wisdom and insight in respect of the Standing Orders, whilst helpful to the Government, is equally helpful to the Opposition, ‘because he is the Clerk of the Parliament. I have no doubt that private members who may desire to submit a motion receive from Lim all the aid that he can give as to how ‘the motion should he formulated and best submitted for our consideration. We have known Mr. Green for many years, and we are very glad indeed that this week’s travail, which could easily have been, and doubtless has been, a difficult one for him, has not prevented him from still being in his place and able to serve us after sittings extending over more than 73 hours during this week. To the other officers of the House, and to the press, I express the hope that they will have a happy Christmas, and that the new year will be a good one for them.
All of us know that, very grievous days may be ahead of us. The sense of national unity which is the dominant consideration in this Parliamentis a sense that we have in common with the people whom we represent. That this nation will have as good a Christmas, and as happy a New Year, as the circumstances permit, is my earnest hope. With all the fervour I have in my heart, I pray- for the realization of the wish expressed in the final words of the Prime Minister, that when this Christmas has passed’ away and we come to the next, it will be. a Christmas of peace.
.- Although the occasion is somewhat inappropriate, there are two matters of great urgency which I think ought to be brought” before the House. The first deals with the Christmas leave of members of the Royal Australian Air Force, and the facilities they will have to visit their homes during that- period. I believe that a bar has been put upon their travelling between the 23rd and the 29th December, even though they be prepared to pay their own fares. If in uniform, they will not. ‘be allowed to travel, and if they travel in other dress they will commit a breach of the regulations of which official notice will be taken, with the result that they will be crimed. These men want to visit their homes, and their people want to have them. This may be the last visit thai-, some of them will be able make before they proceed abroad. All of us desire to be in our own homes .at Christmas time, if that be at all possible Any bar upon travelling, particularly in relation to members of the fighting forces, is unfair.
– I shall ask the Minister for Air to look into the matter right a way.
– I am sure that the Minister for the Army (Mr. Spender) will attend to the next matter that I propose to raise. I have received from the secretary of the Storemen and Packers Union. Adelaide, a telegram which reads -
Trades unionists employed as temporary storemen in’ the ordnance stores are being dismissed and replaced by members of defence forces who are not subject to ordnance stores award. Most of the temporary storemen are returned soldiers and would appreciate if you would make an effort to see the Minister on this particular matter.
Evidently the department is endeavouring to effect a saving by employing ordinary members of the forces to undertake work in the Ordnance Department now being done by returned soldiers, and is not paying to them the award rates of wages applicable to that particular occupation. I ask that this matter he dealt with as early as possible.
– I shall look into the matter.
– I appreciate very much the kind references to myself made by the Prime Minister (Mr. Menzies) and the Leader of the Opposition (Mr. Curtin). During my brief occupancy of the position ‘of Speaker, I have been especially fortunate in that I have had the generous cooperation and support of all honorable members. That has made my task a much easier one than it otherwise might have been. In a parliament such as this, where the parties are more or less equal in numbers, the authority of the Chair can be effectively exercised only with the assistance of honorable members on both sides of the House. During this brief session, honorable members have, shown a real desire to make this Parliament a workable institution. It is said that democracy is on trial, and I would point out that Parliament can go a long way towards establishing itself in the regard of the public, merely by maintaining good order in its proceedings.
The Chairman of Committees (Mr. Prowse) has asked me to apologize for his absence, and to express his thanks to honorable members. I also express thanks on behalf of the Temporary Chairmen- of Committees for the felicitations extended to them by the Prime Minister and the Leader of the Opposition. The valuable services of all members of the parliamentary staffs ha ve earned our gratitude. To the Clerk, Mr. Green, I am under a special obligation. I have enjoyed, his nurture and care during this early period of my office as Speaker. All ‘honorable members owe a special debt to Hansard. We realize that the Hansard reporter is, to the speaker, what the tailor is to the man. And the tailor makes the man.
Although we might wish that we were embarking upon this Christmas recess under morepleasant circumstances, to take our troubles sadly would not assist; us at all.
I wish for all honorable members a happy Christmas and good hunting.
Question resolved in the affirmative.
The following papers were presented -
Australian Soldiers’ Repatriation Act - Repatriation Commission - Report for year 1939-40.
Commonwealth Public Service Act - Seventeenth Report on the Commonwealth Public Service by Board of Commissioners, dated 10th December, 1940.
Lands Acquisition Act - Land acquired -
For Defence purposes- Red Head, New South Wales.
For Postal purposes - Fortitude Valley, Queensland.
National Security Act - National Security (General ) Regulations - Orders -
Prohibiting work on land (5).
Taking possession of land, &c. (21).
Use of land (3) .
Sugar Agreement - Ninth Annual Report of the ‘Fruit Industry Sugar Concession Committee, for year ended 31st August, 1940.
Ordered to be printed.
Wool - Report of the Central Wool Com- mittee forperiod ended 30th . June. 1940.
National Security Act -Regulations - Statutory Rules 1940, Nos. 275, 276.
Northern Territory Acceptance Act and Northern Territory (Administration) Act - Regulations - 1940 -
No. 13 (Darwin Administration Ordinance).
No. 14 (Lottery and Gaming Ordinance) .
House adjourned at 0.9 p.m. until a date and hour to be fixed by Mr. Speaker.
The following, answers to questions were circulated : -
Housing at Darwin. - Mr.Blain asked the Minister representing the Minister for the Interior, upon notice -
Will the Minister state when the Mclnnis Town Planning Report on Darwin will Be made available to this House?
Has any preliminary action been taken under this report to provide a housing scheme for tradesmen and workmen in the Northern Territory ?
Will the Minister take action to assist Darwin residents to construct a community hotel, the profits to beused to beautify the town under the town planning scheme?
– It is not proposed to amend the Maternity Allowance Act in the direction indicated by the honorable member.
M agazine Pertin ent.
– The answers to the honorable member’s questions are as follows : -
Air Travel by Ministers.
– The information is being obtained and will he communicated to the honorable member at as early a date as possible.
e asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
d asked the Minister for
Trade and Customs, upon notice -
– The answers to the honorable member’s questions are as follows : -
d asked the Minister for Commerce, upon notice -
– The information is being obtained and will he forwarded to the honorable member as soon as possible.
y asked the Minister represent ing the Minister for Supply and Development, upon notice -
Owing to the imperative necessity for the production of fuel oil in Australia, will the Commonwealth Government associate itself with the Tasmanian Government with a view to joint action being taken to develop the shale oil fields at Latrobe?
– The Minister for Supply and Development has supplied the following answer: -
On the 27th November the honorable member was informed by the Prime Minister, in reply to a question, without notice, that since 1932 the Commonwealth Government had actively identified itself with an investigation of the Latrobe oil shale deposits, and had made available a sum of £6,200 for this purpose. It was found, however, that the shale was of such inferior quality as to preclude the development of the deposits for the production of oil. The oil yield is only 27 gallons a ton of shale with a high sulphur content, as compared with Newnes and Glen Davis shale which yields over 100 gallons of oil per ton almost entirely free from sulphur content. In the circumstances the Commonwealth prefers to concentrate on higher quality shale.
s. - On the 4th December, the honorable member for Maribyrnong (Mr. Drakeford) asked the following questions, without notice : -
The Minister for the Interiorhas furnished the following answers : -
Broken Hill to Port Pirie Railway.
s. - On the 3rd December, the honorable member for Darling (Mr. Clark) and the honorable member for Melbourne (Mr. Calwell) asked questions regarding the suggested conversion of the railway between Broken Hill and Port Pirie to the standard gauge.
The Minister for the Interior has furnished the following reply: -
The question of the provision of a third rail to the standard gauge from Port Pirie to Broken Hill has been under consideration for some time. Under direction from the War Cabinet, the Commonwealth CoordinatorGeneral of Works (Sir Harry Brown) is to discuss the proposal with the States and other parties concerned and submit a report.
l asked the Treasurer, upon notice -
What was the amount of (a) inscribed stock, and (b) bonds, taken up in government loans issued since the beginning of the war?
– The answers to the honorable member’s questions are as follows : -
These figures do not includethe current loan of £28,000,000 for which, of course, the information is not yet available.
Galvanized Iron and Fencing Wise.
r. - Earlier to-day, the honorable member for Wilmot (Mr, Guy) asked, without notice, whether, in view of the acute shortage in Tasmania of galvanized iron roofing, steps would be taken to relieve the position. The Minister for Supply and Development has furnished the following reply to the honorable member’s question : -
Complaints have been received from Tasmania regarding a shortage of galvanized iron sheets and fencing wire. Demands for defence purposes, both locally and overseas, are particularly heavy and have affected the availability of supplies for other purposes. Efforts have been madeto arrange additional supplies for Tasmania to meet the shortage. A slight improvement in the position is anticipated in the near future, and action has been taken to extend a certain degree of priority to Tasmarian requirements. The position is being kept, continually under review.
d asked the Minister representing the Minister for Munitions, upon notice -
– The Minister for Munitions has supplied the following answers : -
Mr.George Lawson asked the Minister for Commerce, upon notice -
In connexion with the agreement under which William Naughton and Company Proprietary Limited is handling or stacking wool in store at Brisbane and/or Queensland for the Central Wool Committee, will the Minister furnish information showing (al the individual items making up the cost, and (b) the percentage payments, referred to in his undated letter received by the honorable member for Brisbane on 10th December?
– The company is responsible for the receiving, stacking, recording and delivery of wool sent to the Central Wool Committee’s stores. For this service the company is paid the actual cost based on monthly statements of expenses submitted to the Queensland State Wool Committee,plus 10per cent, to cover all overhead administration expenses.
Australian Imperial Force : Christmas Leave.
r. - On the 10th December, the honorable member for Wilmot (Mr. Guy), asked the following question, without notice: -
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 sailing to Tasmania for soldiers residentin Tasmania who are desirous of visiting their homes during the Christmas season?
I am now in a position to inform the honorable member that arrangements have been made for shipping accommodation for members of the Australian Imperial Force who will be visiting their homes in Tasmania during the Christmas season.
Deathof Despatchrider: Repairs to Damaged Motor Cycle.
r, - On the 6th December, the honorable member, for Bendigo (Mr. Rankin), raised a question regarding the cost of repairs to a damaged motor cycle belonging to a member of the Military Forces who, unfortunately, wag killed as the result of an accident. I ‘promised the honorable member thatI would look into the matter.
I am now in a position to inform the honorable member that the cost of the repairs will be admitted as a charge to public funds.
CompulsoryTrainees : Alleged Dismissal from Employment.
asked the Minister for the Army, upon notice - 1.Is it a fact that many complaintsha ve been made by employees that their employers have failed to re-employ them after completion of their Militia training?
r. - The answers to the honorable member’s questions are as follows : -
y asked the Prime Minister, upon notice -
In view of the necessity to conserve the supplies of steel,&c., will he indicate the proposed policyof the Government in regard to the use of plastic materials for the construction of ordnance furniture according to British specifications already in the hands of the Australian Government?
– Supplies of steel for ordnance production in Australia are not likely to be in such short supply that the use of plastic materials in substitution therefor would be contemplated.
Distressed Australians in London.
s. - On the 4th December, the honorable member for Hindmarsh (Mr. Makin), asked me the following question, without notice: -
Has the Prime Minister read the statement in the press recently that several ‘Australians who arc stranded in London were refused assistance to meet their immediate necessities by the officials at Australia House? Has a report been secured from Australia House regarding these cases? Can the right honorable gentleman give the House any information in regard to the matter?
In reply to inquiries which I addressed to the High Commissioner, London, in regard to the matter, information has been received which shows that very few Australians or persons with Australian connexions have sought advice and assistance at Australia House. In response to the request of the High Commissioner the representative of the Daily Telegraph supplied particulars of two cases on which the press statement was based. The High Commissioner has gone through these and all other cases, and is satisfied that the staff of Australia House has, in all cases, either supplied the advice sought or taken steps to render assistance through the proper channels. In regard to the cases of Royal Australian Naval ratings referred to in the press article, passages have been arranged by the High Commissioner’s staff through the Ministry of Shipping, Any delays that have occurred have been due to the cancellation or alteration of sailings of vessels.
Cite as: Australia, House of Representatives, Debates, 12 December 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19401212_reps_16_165/>.