House of Representatives
29 October 1941

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1941

Mr. Speaker (Hon. W.M. Nairn) took the chair at 3 p.m., and read prayers.

page 12

DISTINGUISHED VISITOR

Mr SPEAKER:

– I have to inform the House that the Honorable Walter Nash, Minister for Finance in the Government of the Dominion of New Zealand, is within the precincts of the House. With the concurrence of honorable members, I shall provide him with a seat on the floor of the House beside the Speaker’s chair.

HonorableMembers. - Hear, hear!

Mr. Nash thereupon entered the ber and was seated accordingly. .

page 12

QUESTION

AUSTRALIAN IMPERIAL FORCE

Members Stationed at Darwin.

Mr GUY:
WILMOT, TASMANIA

– Will the Minister for the Army take immediate action to rectify the anomaly and injustice under which thosemembers of the Australian Imperial Force stationed at Darwin now suffer, by placing them under the same conditions and allowing them to enjoy the same comforts, rights and privileges as apply to members of the Australian Imperial Force who are serving abroad?

Mr FORDE:
Minister for the Army · CAPRICORNIA, QUEENSLAND · ALP

– Yes.

page 12

QUESTION

COASTAL SHIPPING CONTROL BOARD

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– The members of the Coastal Shipping Control Board are Sir Owen Dixon, Mr. J. F. Murphy, secretary to the Department of Commerce, and Mr. J. T. Webb, chairman of Huddart Parker Limited. In view of the obstruction offered by Huddart Parker Limited to the proposed settlement of a recent dispute on the waterfront, will the Minister for Commerce have this board so reconstituted that Mr. Webb will be replaced by a representative of the workers in the industry?

Mr SCULLY:
Minister for Commerce · GWYDIR, NEW SOUTH WALES · ALP

– My attention has been directed to the matter mentioned bythe honorable member. I intend to have an investigation made at an early date in order to decide what shall be done in respect of this particular board in the future.

page 12

QUESTION

WAGE INCREASES

Effect onprices.

Mr HOLT:
FAWKNER, VICTORIA

– Has the Minister for

Customs reversed the policy of the previous Government., under which it was prescribed that increases of wages agreed upon between employers and employees should not be passed on to the public by means of an increase of prices, unless such wage increases had been approved by a judge or a conciliation commissioner of the Arbitration Court? Was the decision according to which the Prices Commissioner was directed, when fixing prices, to take cognizance of wage agreements which had not been so approved, made against the advice of the Prices Commissioner? Will the effect of that decision be an increase of prices to the Government and the public? What reasons are there for the abandonment of this very necessary protection of the consumer ?

Mr BEASLEY:
Minister for Supply and Development · WEST SYDNEY, NEW SOUTH WALES · ALP

– I am not acquainted with the details of the matter. Discussions have taken place between representatives of employees and manufacturers in the clothing trades, and have reached the stage of talks with representatives of the Contracts Board. I am not aware of what conclusion has been reached, but I shall make inquiries and advise the honorable member of the result.

page 13

QUESTION

OWEN SUB-MACHINE GUN

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– Will the Minister for the Army furnish me with any information which is available in respect of the manufacture of the Owen submachine gun?

Mr FORDE:
ALP

– The Government has directed that an order be placed for 2,000 guns to Owen’s design, subject to modifications shown to be necessary, and already agreed upon, as the result of recent exhaustive trials. This will enable production to be undertaken immediately.

page 13

QUESTION

INDUSTRIES OF WESTERN AUSTRALIA

Mr PROWSE:
FORREST, WESTERN AUSTRALIA

– Has the Minister for Supply and Development received a report from the committee which inquired into the position of industries in Western Australia? If so, can he state what action he proposes to take?

Mr BEASLEY:
ALP

– This report has been received, and discussion of its recommendations has begun in the Cabinet. A final conclusion has not been reached. When it has, I shall inform the honorable member.

page 13

QUESTION

MUNITIONS BOARDS OF MANAGEMENT

Representation of Workers

Mr MORGAN:
REID, NEW SOUTH WALES

– With a view to promoting industrial peace, and facilitating the war effort, will the Minister for Labour and National Service give early consideration to the representation of the workers engaged in all munitions industries on the boards of management of those industries, in order that they may have a direct voice in the control thereof ?

Mr WARD:
Minister for Labour and National Service · EAST SYDNEY, NEW SOUTH WALES · ALP

– The suggestion of the honorable member contains a good deal of merit, and will have my early consideration. I shall advise the honorable member of the result as soon as possible.

page 13

QUESTION

WOMEN’S PLACE IN WAR EFFORT

Mr FRANCIS:
MORETON, QUEENSLAND

– Many recent press statements have been to the effect that the Minister for the Army is considering whether or not he will deny to the women of Australia the right to assist in the war effort. Has the honorable gentleman reached a decision? Also, does he propose that women who are now assisting in the war effort shall not be allowed to wear a uniform?

Mr FORDE:
ALP

– Not at any time have I said that I would denyto women the right to assist in the war effort; far from it. There has been no change whatever from the policy followed by my predecessor. True, a few leaders of the women’s army have been appointed, and action is now being taken to recruit quite a number of women for that army. Those enrolled will carry out those duties which women usually discharge in civil life. Personal qualification for appointment will be the deciding factor.

page 13

QUESTION

WHEAT PAYMENTS

Mr WILSON:
WIMMERA, VICTORIA

– Can the Minister for Commerce state when the wheat-growers may expect to receive a further substantial payment from the No.. 4 pool, and can he give any indication of what will be the first advance on the incoming crop? What is the prospect of completing at an early date payments from previous pools?

Mr SCULLY:
ALP

– I hope to be able to announce soon that a further substantial payment will be made from No. 4 pool. I have instructed the Wheat Board to inform me regarding the exact amount that can be paid, and also to complete, as soon as possible, payments from the other pools. The advance to be made on the incoming crop is now under consideration, and I expect to make an announcement soon.

page 14

QUESTION

COMPULSORY MILITARY TRAINING

Mr HUTCHINSON:
DEAKIN, VICTORIA

– Will the Minister for the Army state whether it is correct that nine members of his party, in a deputation to him recently, requested the abolition of the system of compulsory military training and the substitution for it of a voluntary system for home defence at higher rates of pay? Did the Minister promise to refer the request to the Military Board and to the Advisory War Council ? Do the views expressed by this deputation indicate an impending change of policy in regard to the method of calling up the men for home defence? Has the matter been brought before the Military Board and the Advisory War Council, and if so with what result I

Mr FORDE:
ALP

– It is evident that the honorable member has not been told the whole truth regarding the deputation thai waited on me. The matter has not been referred to the Military Board. The suggestions put forward by the deputation as to how conditions of militia men and members of the Australian Imperial Force can be improved will receive sympathetic consideration by the Government.

page 14

QUESTION

SHALE OIL

Production - Marketing

Mr SPOONER:
ROBERTSON, NEW SOUTH WALES

– Will the Minister for Supply state whether there is any truth in the report published in the Sydney Sun yesterday that the Glen Davis shale oil project will be taken over by the Government under the National Security Regulations? If the report is true, will the Minister make a statement to the House explaining the weaknesses in the present method of control, and the extent to which it is expected that production will be increased under the new method of control? Will he, at the same time-, announce to the House the policy of the Government in regart to oil shale development generally, with particular reference to Baerami and other known fields?

Mr BEASLEY:
ALP

– This is a very important question, and I am pleased that the honorable member has raised it. Honorable members will recall that the National Oil Proprietary Company Limited entered into an agreement with the Government in 1937 to extract oil from shale in the Newnes district. It was proposed to produce 10,000,000 gallons of oil per annum. I regret to say that the output from Newnes is most unsatisfactory, though perhaps it would not be wise to state just what , the quantity is. The Government cannot allow the present drift to continue, because additional supplies of fuel are needed in Australia. I have arranged to meet the manager of the Glen Davis project, Sir George Davis, on Monday afternoon, and afterwards a statement will be made on the subject. Honorable members will be interested to learn that the company is about to approach the Government for an additional grant, and this matter will be discussed with the company. The capital used by the company at present is approximately £1,300,000, including a guarantee by the Commonwealth to the bank for an overdraft of £250,000. The company has put into the concern £321,667, the Government of New South Wales £166,000, and the Commonwealth Government £559,000, besides guaranteeing an overdraft of £250,000. Honorable members on both sid«s of the House will agree that the Government has given this project a pretty fair run under existing conditions. I think that they will also agree that it is incumbent on the Government to take some further action, because the present drift cannot be allowed to continue. Difficulty has been experienced in obtaining a satisfactory method of retorting the shale, but I have not time now to go into that matter. Government action will be decided after consultation with not only the representatives of the company, but also representatives of the State government, which is vitally interested. The honorable member also inquired regarding the policy of -the Government in connexion with shale’ oil extraction, with particular reference to the field at Baerami. The Standard Oil Company of Australia has sought permission from the Capital Issues Board to raise £2,500,000 to exploit the Baerami field. The Treasurer previously laid down certain conditions with which the company was not satisfied, and negotiations are again proceeding. In the meantime, the company has asked theCommonwealth Government to obtain equipment from the United States of America under the leaselend arrangement. I am informed that the necessary requisition for that purpose has been lodged with the Customs Department, but there is no guarantee that the goods will be supplied. That is as far as the Government has been able to go so far. The company has made no request to the Government for financial assistance.

Later:

Mr ROSEVEAR:

– I ask the Minister for Supply and Development whether he will prepare a statement showing the amount of money sunk in the Glen Davis shale oil proposition by previous anti-Labour governments of the Commonwealth and New SouthWales, and the amount of oil that has been recovered on that field, in order to demonstrate just what price per gallon the oil has cost the people of this country, and also to show to the people how the general frenzied financial policy of those governm ents-

Mr SPEAKER:

– Order ! The honorable gentleman may not embark upon discussion when asking a question.

Mr ROSEVEAR:

– And the lack of proper-

Mr SPEAKER:

– Order !

Mr ROSEVEAR:

– I cannot help it, Mr. Speaker, if I tread on the corns of the late Government. This is a part of my question.

Mr SPEAKER:

– The honorable gentleman must avoid making comment when asking a question..

Mr ROSEVEAR:

– Will the Minister prepare such a statement in order to show to what degree the cost of this petrol has been increased as the result of the lack of supervision by the late Government of its investment in this proposition ?

Mr BEASLEY:
ALP

– As I stated earlier, when we reach the stage of determining policy on this subject, it will be incumbent upon the Government to state the facts and the reasons on which it bases its policy. I hope at that time to give the honorable member the information hedesires.

Mr MULCAHY:
LANG, NEW SOUTH WALES

– In view of the need for fuel oil in Australia, will the Minister for Supply and Development allow small producers of shale oil to market their product free from the rationing system, thereby helping to overcome the shortage of fuel for commercial purposes?

Mr BEASLEY:

– The position is that individuals are able to retort shale oil for their own purposes, but, when the extraction and distribution of the shale oil goes beyond that, it is considered necessary to bring it within the general rationing scheme. The point raised by the honorable member is worthy of consideration, because in some places itmay be possible to extend the plants. I shall be pleased to have the matter investigated in order to ascertain what can be done.

page 15

QUESTION

PUBLIC ADMINISTRATION

Secret Funds Royal Commission

Mr CALWELL:
MELBOURNE, VICTORIA

– On the8th October, I asked the Attorney-General a question in regard to the inquiry by a royal commission into the payments from secret funds, and I received the following reply : -

Above all, I emphasize that it is the desire of the Government-

Mr SPEAKER (Hon W M Nairn:
PERTH, WESTERN AUSTRALIA

– Order! The honorable member must ask a question.

Mr CALWELL:

– I am quoting from Hansard.

Mr Curtin:

– That is not permitted.

Mr CALWELL:

– That is a restriction which should no longer be imposed. In view of recent developments before the royal commission, and the statement of the judge that probably an extension of the terms of reference would be necessary, does the Attorney-General intend to extend the terms of reference without further delay?

Dr EVATT:
Attorney-General · BARTON, NEW SOUTH WALES · ALP

– The relevance of any matter to the terms of the royal commission is a question for the judge ; and if the learned judge requests the Government to extend the terms of the commission, a new situation, as I indicated to honorable members previously, will arise. The Government will leave no part of the inquiry unfinished, hut the honorable member will understand that we cannot discuss here, while the commission is pending, the relevance of any particular matter.

Mr Calwell:

– Will the AttorneyGeneral amend the terms of the commission in order to enable us to have a “ shot “ at the newspapers ?

Dr EVATT:

– That is for the judge, before whom the whole matter is now pending.

page 16

QUESTION

COAL SUPPLIES

Mr BADMAN:
GREY, SOUTH AUSTRALIA

– Will the Minister for Supply take immediate action to ensure that adequate supplies of coal will be made available to South Australia for the munitions and other industries, and for the Railways Department?

Mr BEASLEY:
ALP

– The matter of arranging for adequate supplies of coal for South Australia has been seriously considered by the Government. The Premier of South Australia conferred with the Prime Minister in Melbourne, and the Leader of the Opposition in South Australia conferred with the Prime Minister and myself. I have also discussed the position with the Commonwealth Coal Commissioner, Mr. Mighell, in Sydney. In the opinion of the Government, the matter requires urgent and immediate attention, and every possible step is being taken to ensure, that adequate supplies of coal are made available to South Australia.

page 16

QUESTION

SHIPPING STOPPAGE

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– Will the Minister for Labour and National Service inform the House of the result of the fervent appeal, which he made on the 17th October, to the seamen to refrain from taking any action that would involve an interruption of the shipping services? Will he also inform the House whether the Government has found it easier to take over the control of certain shipping companies, than exact that measure of co-operation which he asks the seamen to give?

Mr WARD:
ALP

– In the first place, I am unaware of any published appeal by me regarding this matter. The honorable member is probably confusing it with an appeal that was made by the Prime

Minister. Regarding the shipping position, I have to announce to the House that, as a result of the firm and prompt action taken by the Government, no Australian ships are now detained in port. Results alone count in these matters, and in view of the intention of the Government to see that the maximum national effort shall be put forth, its methods to date have proved very satisfactory.

page 16

QUESTION

COST-PLUS SYSTEM

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– Does the Minister for Munitions .propose to continue the cost-plus system of payment for the manufacture of munitions?

Mr MAKIN:
Minister for Munitions · HINDMARSH, SOUTH AUSTRALIA · ALP

– The Assistant Treasurer will undertake a thorough investigation of the cost-plus system, and when he submits his report, the whole matter will he reviewed.

page 16

QUESTION

CREW OF H.M.A.S. WATERHEN

Mr BECK:
DENISON, TASMANIA

– Is the Minister for the Navy aware that men who were serving on the destroyer H.M.A.S. Waterhen, when it was lost in the Mediterranean, and who were granted a period of leave in Australia, were obliged to pay their fares from Melbourne to their home ports ! If the Minister finds that my information is correct, will he at once issue instructions for the men who have been treated in this manner to be reimbursed in full?

Mr MAKIN:
ALP

– The determination of this matter would doubtless have been the responsibility of my predecessor; but I assure the honorable member that if any disability or injustice has been suffered by these men an adjustment satisfactory to them will be made.

page 16

QUESTION

BOMB-AIMING DEVICE

Mr CONELAN:
GRIFFITH, QUEENSLAND

– Will the Minister for the Army take steps to discover what happened to the new bomb-aiming device which was submitted to his predecessor fourteen months ago? The inventor is a returned soldier who served in the last war. He has two sons serving in this war. The Inventions Branch of the Department of the Army did not have the courtesy even to acknowledge the receipt of this device. Will the Minister also make inquiries as to whether the invention can be utilized?

Mr FORDE:
ALP

– Immediate inquiries will be made, and a prompt reply will be furnished to the honorable member, who has been most persistent in this matter.

page 17

QUESTION

WOMEN’S AUSTRALIAN AUXILIARY AIR FORCE

Mr McEWEN:
INDI, VICTORIA

– Will the Minister for Air say whether it is the intention of the Government, as has been published, to abolish the Women’s Australian Auxiliary Air Force? Is it a fact, as has been published, that the enrolment of women for this force has already ceased in Western Australia and Queensland? Did the Minister approve the announcements which have appeared for several days in Australian newspapers to the effect that it has been authoritatively stated that this action is to be taken? Does the Minister approve of such announcements or forecasts of government policy being made by alleged anonymous “ Government spokesmen “, as is the practice in certain foreign countries? If he does not agree with that practice, will he in future repudiate these alleged statements of policy?

Mr DRAKEFORD:
Minister for Air · MARIBYRNONG, VICTORIA · ALP

– Any announcements in the press that the Government has decided to cease enlisting recruits for the Women’s Australian Auxiliary Air Force are entirely erroneous. No such decision has been reached, but the whole matter of the enlistment of women in the Women’s Australian Auxiliary Air Force is receiving consideration, as also is the amount of money which the previous Government proposed to expend in connexion with this body. When the present Government has examined the information for which I have called, a decision will be made. As to statements in the press that enrolments in the Women’s Australian Auxiliary Air Force had ceased, all I can say is that I am not responsible for them. As I am not aware of what has been published in the press of Western Australia about the matter, I cannot say whether T approve or disapprove of it. Any statements on behalf of the Government regarding the matter will be made either by the Prime Minister or by myself as Minister for Air, and full responsibility will be taken for them.

page 17

QUESTION

LEGAL REPRESENTATION OF COMMONWEALTH INSTRUMENTALITIES

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– I ask the AttorneyGeneral whether it is a fact that two Sydney firms of solicitors, namely, Minter, Simpson and Company, and Allen, Allen and Hemsley, the principals of which are prominent members of the United Australia party, are, respectively, solicitors for the Australian Broadcasting Commission and the Commonwealth Bank? Is the Attorney-General prepared to allow that practice to continue, or will he give instructions that all government establishments and organizations shall use the services of the Commonwealth Crown Solicitor ?

Dr EVATT:
ALP

– Of course many governmental instrumentalities in the State of New South Wales have their own solicitors and some of them have special legal officers. As to the Commonwealth, to which the honorable member directs his question, I am not aware of the facts stated by him. I shall look into them and furnish an answer to the honorable member.

page 17

QUESTION

WOOL CLIP INSURANCE

Mr ABBOTT:
NEW ENGLAND, NEW SOUTH WALES

– In view of tha deterioration of the international situation in the Pacific and also of the fact that a large proportion of the Australian wool clip is now in brokers’ stores, awaiting appraisement, will the Minister for Commerce take steps to see that before appraisement -that wool is covered by insurance against destructive action by the King’s enemies? It is impossible for individual growers to obtain insurance cover against such risks.

Mr SCULLY:
ALP

– I regard the question as very ‘serious indeed. I shall try, by some method, which only investigation will enable us to determine, to meet the position to which the honorable member has referred.

page 17

QUESTION

ENGINEERING DILUTION SCHEME

Mr STACEY:
ADELAIDE, SOUTH AUSTRALIA

– Has the attention of the Minister for Labour and National Service been drawn to a statement in the Sydney and -Melbourne press yesterday by the Under-Secretary of the Department of Labour in New South Wales,

Mr.C. J. Bellemore, that the trainee dilution scheme for teaching youths engineering has been suspended in New South Wales because it has been found impossible to place them in employment after completing their course? Was this action taken with the approval of the Commonwealth Government, and will the Minister take immediate steps to investigate the position?

Mr WARD:
ALP

– My attention has not been drawn to the statement. There has been some lag in the scheme in New South Wales, owing to the inability of industry to absorb trainees. It is the intention of the Government in the near future to hold a conference of the various parties concerned with a view to more suitable arrangements being made to accelerate the rate of absorption. The Commonwealth Government has made no suggestion to anybody at all that the scheme in New South Wales, or anywhere else, be suspended.

page 18

QUESTION

OIL COMPANIES

Sir FREDERICK STEWART:
PARRAMATTA, NEW SOUTH WALES

When allocating trading quotas to the oil companies, will the Minister for Supply and Development see that the interests of the smaller companies are not subordinated to those of the major companies, particularly in view of the failure of two of these major companies to maintain appropriate stocks in Aus- tralia?

Mr BEASLEY:
ALP

– Quite frankly, I think that that question is based upon a case which the honorable member submitted when he was on this side of the House. Whether he succeeded in his plans is another matter, but I am aware of much that was done. This subject is now under consideration and the purpose is to ensure that, if a quota system be determined upon, an equitable quota shall be given to all, so that the independent distributors shall have their rightful place and receive due recognition of the services that they have rendered to the country.

page 18

QUESTION

WOOL AGREEMENT

Mr CLARK:
DARLING, NEW SOUTH WALES

– In view of the in creased costs of Australian primary producers and of the increased prices of imports, will the Minister for Commerce give consideration to a review of the agreement with the Government of the United Kingdom for the sale of the Australian wool clip with a view to arranging a higher price more in keeping with the reasonable requirements of the wool-growers?

Mr SCULLY:
ALP

– That matter will come under review by my department at an early date. Under its terms the agreement cannot bereviewed until May next, but before then I hope to be able to announce at least that negotiations with . the British Government will be entered into on the lines indicated in the honorable member’s question.

page 18

QUESTION

LAKES ENTRANCE OIL-FIELD

Mr PATERSON:
GIPPSLAND, VICTORIA

– Oan the Minister for Supply and Development say whether any steps are being taken to speed up the implementation of the RanneyFairbank report on the development of the Lakes Entrance oil-field?

Mr BEASLEY:
ALP

– I am sorry that I have not had time to go into that report. I am mindful of the urgency of all matters associated with liquid fuel, and I shall take the earliest opportunity to consider the report.

page 18

QUESTION

PETROL RATIONING

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– I ask the Minister for Supply and Development what success has attended his efforts to secure additional oil tankers for Australia? If he has been successful in that direction, when may we expect some relaxation of petrol rationing?

Mr BEASLEY:
ALP

– It would not he prudent to disclose the degree to which supplies of petrol have been built up in Australia at this stage. However, every possible step is being taken to impress upon the Petroleum Board in Great Britain and our representatives in the United States of America the necessity for continuing the supplies ‘arranged with m.y predecessor. The importance of that cannot be overstressed.

Mr SPEAKER:

– If the Minister desires to go beyond a brief answer to a question, he should ask for leave to make a statement.

Mr BEASLEY:

- by leave-If the honorable member is asking his question simply with the object of scoring something, I can very easily answer him in a similar strain.

Mr ANTHONY:

– We want information.

Mr BEASLEY:

– I have no desire to hold a post-mortem on this subject, because that will not help the country, the Government, or this Parliament. I can only say that we are improving the position, and at the same time we are encouraging in every possible way the use of substitute fuels, because even though our stocks of oil and petrol may be built up to a safe level, no one can tell, particularly in view of events during recent weeks, what developments may occur in this war at any moment. Every step is being taken to maintain supplies, and at the same time to build up stocks to a safe level, and at the proper time the Government will take steps to ease the effect of petrol rationing.

Mr ANTHONY:

– The Government does not intend to ease petrol rationing in the immediate future?

Mr BEASLEY:

– It is not the intention of the Government to ease the present rationing system until such time as we are certain that our stocks of petrol have reached a safe level and a continuity of supplies can be maintained.

page 19

QUESTION

COAL-MINING INDUSTRY

Mr JAMES:
HUNTER, NEW SOUTH WALES

– I ask the Minister for Labour and National Service whether it is a fact that much discontent exists among the miners, resulting in the curtailment of coal production, because of the persistence of the coal-owners in appealing against decisions of the chairmen of Local Reference Boards to the Central Reference Board ? Ls he aware that 90 per cent, of thos© appeals’ have been disallowed by the chairman of the Central Reference Board .owing to the fact that the disputes have been of a local character? In view of the effect of these irritating tactics by the coal-owners., and the desire of every one concerned to stimulate coal production, will he amend the present regulations in order to empower the chairman of the Local Reference Boards to give decisions upon all questions of a local character, such decisions not to be subject to appeal unless they conflict with those of the Central Reference Board, or deal with matters affecting other districts ?

Mr WARD:
ALP

– I believe that a great deal of the unrest in the coal-mining industry is due to the causes mentioned by the honorable member. I am now reviewing machinery for dealing with disputes immediately they arise, and I intend to investigate the position thoroughly. I hope to be able to give an early decision, and to announce the steps which the Government intends to take with a view to improving the existing machinery.

page 19

QUESTION

QUESTIONS

Mr CURTIN:
ALP

– Having regard to the important financial business with which the House will be asked to deal to-day, I ask honorable members to place the remainder of their questions upon the notice-paper.

page 19

ASSENT TO BILLS

Assent to the following bills reported : -

Supply Bill (No. 3) 1941-42. Loan Bill (No. 2) 1941.

page 19

ESTIMATES 1941-42 (REVISED)

Messages reported transmitting Estimates of Revenue and Expenditure, and Estimates of Expenditure for Additions, New Works, Buildings, &c, for the year ending the 30th June, 1942, in substitution for the Estimates transmitted on the 25th September, 1941, and recommending appropriations accordingly.

Ordered to be printed .and referred to Committee of Supply forthwith.

page 19

BUDGET 1941-42 (REVISED)

In Committee of Supply:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– Once again it has fallen to the lot of Labour to take over the responsibility of government during a critical and difficult period. On a previous occasion we faced an economic crisis. To-day we are in the throes of the most deadly and devastating war that has ever been waged between nations, and the skies are dark with clouds of evil portent. The Government has a full realization of the responsibility that rests upon it to carry out its duty to the country with determination, and all of the capacity at its command.

Estimates of Expenditure 1941-42

Since the Government took office Ministers have not had sufficient time to examine in detail the Estimates of expenditure placed before honorable members by the previous Government. I have, therefore, adopted with some alterations the estimates of my predecessor, but I give to the House the assurance that the closest scrutiny is being made by Ministers in every department, and any unnecessary items of expenditure will be eliminated.

With regard to the estimate of £217,000,000 for war expenditure submitted by the previous Government, the fact has come under notice that some definite commitments exceeding £1,000,000 which will, have to be met this year were overlooked. It is realized that further commitments will be added to the programme during the course of the year. On the other hand, some saving may be possible without reducing efficiency in any way. In the circumstances the estimate of £217,000,000 has been adopted, subject to increases of soldiers’ pay, but the position will be reviewed within the next . three months.

The Estimates of expenditure as submitted by the previous Government fell short of what this Government, regards as a proper provision for pay of members of the Forces and for invalid and old-age pensions. It has been decided to increase active pay and allowances of members of the Forces at a cost of £7,300,000 in a full year, and to make certain additions to deferred pay costing £200,000 per annum. These decisions will supersede the proposals of the previous Government, which were estimated to cost £6,000,000 a year, mainly for deferred pay. I sm sure that the country will not grudge the extra effort required to give this tardy measure of justice to our fighting men. It is proposed also to raise the maximum rate of old-age and invalid pensions to 23s. 6d. a week, and to liberalize the conditions in several respects. Service pensions also will be increased and extended. The total cost will be £2,124,000 per annum. Further details of these changes will be given later.

The Government will proceed as vigorously as physical resources will permit with the provision of housing in those areas where there has been a large increase of population as a result of war production. The work of the Housing Trust, which has already been set up, will be expedited.

The Government has adopted the recommendations of the Commonwealth Grants Commission for special grants to certain States for 1941-42, and the necessary bill will be brought down as early as possible. The proposed grants are: South Australia, £1,150,000; Western Australia, £630,000; and Tasmania, £520,000; or a total of £2.300,000, compared with actual payments last year of £2,050,000.

Although there has not been sufficient time for Ministers to examine the Estimates of expenditure of all departments two reductions have been made. The amount of £283,000 for the Department of Information has been reduced by £80,000. An item of £50,000 for advertising of primary products under the Department of Commerce has been reduced by £35,000.

I may add that it is not proposed to alter the Loan Estimates for civil purposes - Post Office, &c. - amounting to £2,600,000.

The decisions of the Government will result in a net increase of £5,659,000 in the Estimates of expenditure, viz. : -

These alterations will increase the total estimate of war expenditure from £217,000,000 to £221,485,000, of which £162,485,000 will be expended in Australia and £59,000,000 overseas.

These alterations have been embodied in the Estimates which have been laid on the table. In order to avoid expense, the estimates of expenditure and the budget papers will not be reprinted, but additional papers embodying the necessary amendments will be circulated later. A comparison of the revised figures with the Estimates submitted by the previous Government is also given in table No. 1.

Financial Position Summarized

The estimates of revenue and expenditure for this year as amended by the foregoing alterations can now be summarized as follows: -

Financial Policy

Finance for an additional £160,000,000 will be required this year. On the basis of last year’s borrowing we can count on £66,000,000 of loans for war purposes, after providing £20,000,000 for Loan Council requirements. We have then to find £94,000.000 by increased taxation or increased borrowings over last year’s level. That means that from our productive capacity we must devote £94,000,000 more to war purposes than was the case last year.

Financial policy must fit in with war policy. Labour’s war policy is to expand the war effort to the maximum and to do this by using all unemployed who are physically fit, and diverting labour and resources from civil to war purposes for the balance. At the same time, the essential living standards of the basic wage family can and will be maintained.

The diversion of labour and resources to war production will necessarily reduce the volume of non-essential goods available for civil consumption. On the other hand, the increased volume of employ1 ment will place further spending power in the hands of the people. If this were all spent it would result in increased competition by private interests for the resources necessary for war. This must be avoided or our war effort will falter. Private spending must therefore . be limited to the smaller flow of civil goods that will be available and prices must be rigidly controlled. A rough measure of the limitation that is necessary is the additional £94,000,000 for” war expenditure to which I have referred, and the task before us is to secure this limitation in the most equitable manner. We are, therefore, forced by the demands of war to call upon the people for further sacrifices which can be made, whilst preserving health and efficiency for all.

Notwithstanding any increased production that can be brought about there must be a switch over of a very large amount of production from civil needs to war’s demands. No amount of entries in the Commonwealth Bank’s books can accomplish this. War needs must come from the collective resources of the community.

Credit expansion, however, can be successfully used to finance employment of reserves of man-power to expand production of goods and materials. That is to say that any increase of the money volume must be balanced by a corresponding increase of production. Theextent to which increased production is possible will be determined by the amount of reserve man-power that is available. A thorough survey of that field is now in process. By organization and training many who are now classified as unemployable could be found useful employment and thus materially increase production and at the same time provide for. them selves and their families.

In these circumstances, the Government must provide for additional taxation on those best able to bear it; a national campaign for savings to help the war effort generally; an appeal for th, maximum support to war loans and war savings certificates; and such further controls and measures as may be necessary to secure additional resources for war by diversion from non-essential needs to war needs and to provide for an equitable distribution of the reduced volume of non-essential goods that will be available.

Additional taxation is proposed which will bring in about £29,000,000 in a full year. The yield in the remainder of the current year will be about £22,000,000. I shall give details at a later stage.

With £22,000,000 from increased taxation, we shall require to borrow £72,000,000 more than last year, that is, a total of £158,000,000 for all public purposes, compared with £86,000,000 in 1940-41, and £37,000,000 in the last pre-war year.

This is a formidable demand to make on the people of Australia, but not an impossible one. Earnings are high, and there is a growing realization of the urgency of our needs for war. Already spending is being restrained, and much greater savings are being made than in 1940-41. The growth of savings bank deposits is evidence of this. In the last financial year savings bank deposits increased by £16,000,000, and that was the largest increase in any year on record. But in three months only of the present financial year such deposits have increased by £10,000,000, or at the rate of £40,000,000 in a year. That is a very encouraging sign.

The late Government proposed to take as a compulsory loan a special contribution from incomes in low-taxing States, from income exempt or partially exempt from taxation, and from the lower incomes. My Government relies on willing co-operation from all classes of income-earners to make their full contribution to saving and lending through public loans and war savings certificates. I hope, indeed, for a very great increase of sales of these certificates. Last year they contributed a net £12,000,000 to war expenditure. This year we must endeavour to double that amount.

The Government intends to launch as quickly as possible a national savings campaign, and I earnestly appeal to every citizen of Australia to study very seriously how he or she can reduce their expenditure without undue hardship. It will be a physical impossibility to carry out our defence programme unless private expenditure be reduced sufficiently to release the necessary resources for war.

However successful may be our appeals for voluntary saving, it will still be necessary for the Government to control private expenditure which conflicts with war activities. If people are left to choose their own economies they may continue to demand the very classes of goods the production of which competes directly with the war effort. An obvious example of this is in expenditure on industrial expansion. In these days we require an enormous expansion of factories, plant, and equipment for war purposes. We cannot then allow private interests to use the resources necessary for this expansion to increase their own industrial capacity for civil production. Expenditure on investment must therefore be more strictly controlled. This form of control is first on our list, not only because it is likely to save the type of resources required for war, but also because it takes nothing from the immediate consumption standards of the people.

Production of luxury goods can also bc curtailed considerably without reducing the living standard of basic wage families. Happily, we have abundant supplies of food, so that no one need suffer privation through the lack of any commodities necessary to maintain the bodily health and strength of our people.

I shall now explain in some detail the decision of the Government relating to increases in the Estimates of Expenditure.

Pay of Members of the FORCES

The previous Government proposed to increase the pay of members of the forces at a cost of £6,000,000 per annum. The whole of the increase was to be in the form of deferred pay, with the exception of £360,000 per annum for dependants’ allowances.

Our view was that this did not satisfactorily meet the obligations of the community to members of the fighting forces, and that the increases should have been given as active ‘rather than deferred pay. The Government has given full consideration to the matter, and has decided on a scale of increases involving additional expenditure at the rate of £7,300,000 per annum.

All members of the forces on special force rates of pay, which include the Australian Imperial Force in Australia and overseas, the Royal Australian Air Force war-time forces, and the home defence war-time Military Forces, and members of the Royal Australian Navy sea-going forces, will receive an increase in active pay of1s. a day. Taking the private soldier in the Australian Imperial Force as an illustration, his daily rate of active pay will be increased from 5s. to 6s. which, with 2s. deferred pay, will bring his total pay to 8s. a day apart from dependants’ allowances.

The allowances to wives and children and other dependants of members of the forces also will be increased. The previous ‘Government proposed to grant an allowance of 6d. a day to wives without children. This Government has adopted that proposal, but has extended it to include wives with one or more children. The Government has also decided to increase the dependants’ allowance in respect of the second child by 6d. a day.

The standard allotment which must be made by the member from his pay towards the maintenance of his wifeand family will be increased from 3s. to 3s. 6d. a day.

The effect of the increases in the dependants’ allowances and standard allotment on the income of the families of private soldiers can be seen from the following table: -

In addition, child endowment of 5s. a week is payable for each dependent child after the first. These increases will take effect from the commencement of the next allotment period. The Government will also make certain adjustments to deferred pay at an annual cost of £200,000. These are in addition to the increases in active pay and dependants’ allowances.

Members of the Royal Australian Air Force and Australian Military Force on special force rates of pay serving at operational stations such as Darwin will be credited with deferred pay at the rate of 1s. a day while employed at those stations.

Members of the Royal Australian Air Force who have been stationed in Australia for more than six months and who later embark for service overseas will also be credited, in respect of service in Australia in excess of six months, with deferred pay at a rate which will bring their combined active and deferred pay to the scale payable for overseas service. This adjustment will be made retrospectively.

The total cost of these decisions is £7,500,000 per annum. The cost to be met this financial year for active pay and dependants’ allowances is £4,900,000. As £300,000 was allowed in the previous Government’s budget for dependants’ allowances, a further £4,600,000 is now being provided.

Invalid andold-age Pensions.

The Government proposes to increase invalid and old-age pensions to 23s. a week, quite apart from the 6d. increase which would become payable in January next as a cost of living adjustment. As the payment of two increases within a short interval would duplicate the departmental work, the cost of living increase will be brought forward and invalid and old-age pensions will be increased to 23s. 6d. after the necessary legislation has been passed. The principle of cost of living adjustments will be retained. The annual cost of the combined increase is £1,771,000, and the cost for this financial year is £1,022,000.

Further Concessions

There are certain other concessions in connexion with invalid and old-age pensions which the Government proposes to allow, the most important of which are these :

Invalid pensions are at present paid only in the case of persons totally and permanently incapacitated. To meet cases of hardship the Government proposes that a pension shall be paid in any case where the degree of permanent incapacity is assessed at 85 per cent. or more. This concession is estimated to cost £150,000 per annum, and £87,000 for the balance of this year.

The act provides that an invalid pension shall be payable only if the claimant’s relatives do not adequately maintain him. In the past “ adequate maintenance “ has been defined as a family income sufficient to provide £1 10s. a week for each adult member of the family and half that amount for each child under sixteen. The previous Government proposed to liberalize this provision by raising the figure of £1 10s. to £2 10s. The present Government has adopted that proposal. It is estimated that the cost will be £60,000 for a full year, and £35,000 for the balance of this year.

The Government has also decided to extend the benefits of invalid and old-age pensions to certain naturalized British subjects, mainly Syrians and Lebanese, who are disqualified under the present law. The estimated cost of this concession is £20,000 per annum. It will cost this year approximately £12,000.

There are some minor matters brought under notice by the Parliamentary Committee on Social Security, which also will be dealt with in the amending legislation. The total annual cost of the additional concessions to which I have referred is approximately £245,000 per annum, the cost for this year being £143,000.

After allowing for the proposals I have outlined and for the normal increase of the number of pensioners, the estimated expenditure on invalid and old-age pen-‘ sions during the current financial year will be £19,865,000. This represents an increase of £2,499,000, as compared with the actual expenditure last year.

The matter of war pensions in relation to eligibility for old-age pensions will also be investigated with a view to removing any anomalies. The Government also proposes to examine the question of extending the benefits of invalid and old-age pensions to Australian aboriginals other than nomadic aboriginals.

Service Pensions

At present service pensions are granted at the rate of 21s. for a single man and, in the case of husband and wife,18s. each. It is proposed to increase service pensions for single men to 23s. 6d. - an increase of 2s. 6d. a week. The aggregate service pensions of a married man and his wife are being increased similarly, but the increase of 5s. will be added to the married man’s rate of 18s., making it 23s., leaving the pension for the wife at 18s., this being the rate payable to a wife under the war pensions scheme. The estimated cost for a full year is £72,000 and for the remainder of this year £38,000.

It is proposed to extend service pensions to ex-soldiers of the Boer War. The estimated cost is £36,000 for a full year, and £21,000 for the balance of this year.

Taxation Proposals

The problem of taxation is becoming one, not of how much can be taken from each income, but of how much must be left. I realize very fully the embarrassment that will be caused to a number of people who have entered into commitments in good faith. But the writing was on the wall in August, 1939, and we have had over two years to prepare for the necessary economies. Consequently, I am proposing a very considerable increase of income tax in respect of the higher incomes. We have to pay some regard to the income taxes imposed by the States. The increase I am proposing will bring Commonwealth and State taxation on the highest incomes almost to 18s. in the £1 in the State where taxes are highest.

I am unwilling, however, to impose additional income taxation on the middle and lower incomes. It is difficult for income tax to discriminate fully between individuals in accordance with their financial responsibilities. A heavy increase of tax on lower incomes and middle incomes would frequently impose serious hardship. I am not doubting that many people on lower incomes are able to make a further contribution to war finance, and it is in fact essential that they should do so. With them, as with every one else, the major effort must be their willing co-operation in a voluntary reduction of consumption and a corresponding increase of lending to the Government. So far as taxation goes, as a means of reducing consumption, I think that for middle and lower incomes it is better to get the reduction by means of taxes on goods and services not really essential, which can be foregone without injury to health or efficiency.

I propose, therefore, increases of taxation which will produce approximately £22,000,000 extra revenue in 1941-42. The details of the taxes proposed are briefly as follow.

Income Tax - Individuals

For taxable income from personal exertion the rates of tax under the present scale increase progressively up to £1,500. Income in excess of £1,500 pays 10s. in the £1 on the excess. I propose to leave the scale unaltered up to £1,500, and thereafter to continue the present rate of progression up to £2,500. Income in excess of £2,500 will pay 200d. in the £1. Corresponding changes are made in respect of incomes from property, with the excess over £2,000 paying 200d. in the £1.

These rates are not so high as they look, because State taxes are allowed as a deduction in computing taxable income. However, total taxation - Commonwealth and State - will be only just under 18s. in the £1 on the highest incomes in the State in which these incomes are taxed most heavily. The changes made in the tax for different actual incomes can best be appreciated from the tables which will be furnished to honorable members. It is estimated that this increase of the rates of income tax on individual incomes will increase revenue in 1941-42 by £4,500,000, and by £6,000,000 in a full assessment year.

It is also proposed to make a number of changes in the method of assessing taxable income. In circumstances where the wife of a taxpayer has a separate income subject to tax, i.e., over £200, her taxable income will be added to the husband’s taxable income in order to determine the rate of tax to be paid by both husband and wife. This change is expected to produce some additional revenue as well as prevent possible loss of revenue by the division of income between husband and wife in order to evade taxation.

It is proposed to remove the present exemption, so as to provide that dividends received by Australian, residents from companies, the profits of which are derived .wholly or partly from . outside Australia, shall be taxable in the hands of the recipients. I am prepared to set up a small committee to devise a formula to mitigate any hardship that may arise from double taxation.

The allowance of £50 for dependent children after the first child is to be discontinued, in accordance with the understanding when child endowment was introduced. This will not involve the disallowance of the present deduction in respect of a child who attained the age of sixteen years during the year ended the 30th June, 1941. It is recognized, also, that there is an equitable claim for a deduction in respect of children for whom the endowment is payable for a portion only of the present financial year, and it is proposed to deal equitably with t]]0.Fe cases.

At present, where dividends are paid by companies out of Commonwealth loan interest, which is taxable at concessional rates, those dividends are taxable in the hands of recipients at the same concessional rates. The rate of tax applicable is limited to the rates of tax in operation for 1930-31. It is proposed to remove this concession, by providing that such dividends shall carry the same rates of tax as other income from property. The tax concession will, of course, still apply to companies paying the dividends and to individual holders.

Evasion of tax occurs where trusts or settlements are created for the benefit of children who are minors and unmarried. It is proposed that this evasion shall be frustrated by making the trustee liable for the additional tax that the settlor would have been liable to pay if he had retained the settled property.

In addition, it is proposed to discontinue the practice of allowing as deductions in arriving at taxable income calls paid on shares in mining and afforestation companies.

The profits of a private company are now taxable in full at the graduated individual rates in the hands of either the company or its shareholders. It is proposed to apply this principle to businesses conducted by a partnership or an individual. Under the present law, when a business conducted by a partnership or an individual, by reason of its character, requires the retention in the business of not less than 15 per cent, of the taxable income, then in respect of that 15 per cent, a rebate of the excess of the individual’s rate of tax over the company rate of tax is allowed. It is proposed to abolish this concession.

All of these changes will be discussed more fully, together with a number of other proposed alterations, when I introduce the appropriate legislation to give effect to them.

It is anticipated that the extra revenue on account of all proposed amendments to the Income Tax Assessment Act will be £2,900,000 for the current year and for a full year £3,400,000.

Income Tax - Companies

The rate of ordinary company tax was last increased in 1939-40, when it was raised from 13. 8d. to 2s. in the £1. It i3 now proposed to increase the rate to 3s. in the £1.

It is estimated that this increase will yield an additional annual revenue of £4,500,000, almost all of which will be collected in 1941-42.

War-time Company Tax. l.t is proposed to increase the rates of the war-time company tax. The present, scale of rates provides for a commencing rate of 4 per cent., progressing by 4 per cent, steps for every 1 per cent, in excess of the statutory percentage of 8 per cent, on capital employed, until the rate reaches a maximum of 60 per cent, on that portion of the total profits in excess of 22 per cent, on capital employed.

It is proposed that the scale shall be amended to provide for a statutory percentage of 4 per cent, instead of 8 per cent., and that the commencing rate of tax shall be 6 per cent., increasing by steps of 6 per cent, until a maximum rate of 7S per cent, is reached on the taxable profit in excess of 16 per cent, on capital employed.

Under the present scale of war-time company tax, the revenue for a full assessment year would be only £1,000,000.

The increased revenue accruing from the amendments will be £4,000,000 in 1941-42, and £4,-750,000 in a full assessment year.

Estate Duty

It is proposed to increase the present rates of estate duty on estates over £20,000. Above that point there will be an increase on a sliding scale until the rates reach a maximum of 28 per cent, at £500,000 instead of 20 per cent, as at present. The increased yield in a full year is estimated at £650,000.

As the new rates will apply only to the estates of persons who die after the commencement of the amending act, and as the proposed increases will affect materially only the larger estates, which usually require some time to complete valuations, no appreciable increase of revenue is expected this year.

Gift Duty

It is proposed to impose a gift duty upon gifts of money, or transfers of property for natural love and affection or for which the consideration is inadequate.

The purpose of the gift duty is twofold, namely, to raise revenue and to lessen dispersions of property which are made in order to avoid other forms of taxation, such as estate duty and income tax. As the weight of other forms of taxation has necessarily been made heavy in order to finance the war effort, there is now a much greater incentive than there was formerly to dispersions of property. It is essential that this practice shall be controlled, at least to the extent of seeing that such dispersions cannot be effected without some contribution to revenue being made.

The rates of duty to ‘be imposed will be substantially the same as the rates of estate duty, and the rate applicable to any particular gift will be based upon the aggregate value of all gifts made by the same donor within a period of five years. The new duties will apply to all gifts made on or after to-day, the 29th October. Gifts made before the 29th October, 1941, will be brought to account only for the purpose of assessing the rate on gifts which will come under the act.

It is proposed to allow certain exemptions, such as retiring allowances, pensions and gratuities to employees, also gifts to public charitable, religious and public educational institutions, as well as gifts to patriotic and war funds, including gifts to the Commonwealth or a State for defence purposes.

It is estimated that the increased revenue accruing from this proposal will be £250,000 in 1941-42, and £500,000 in a full assessment year.

Land Tax

In 1910, when the land tax was first introduced, the rate of tax commenced at1d. in the £1 and increased to 6d. in the £1 in respect of taxable balances in excess of £75,000.

In 1914-15 the rate was increased to a maximum of 9d. in the £1 in respect of the excess over £75,000, and in 1918-19 a super tax of 20 per cent. was imposed over the whole range of assessments.

A statutory exemption of £5,000 is allowed in respect of all land tax assessments, except in the case of absentees.

Beginning with the withdrawal of the super tax of 20 per cent. an 1922-23, the rates of land tax were successively reduced. In1938-1939 and 1939-40, the rates were only 50 per cent. of the rates imposed in 1914-15. In 1940-41, the rates were increased again to the 1914-15 rates.

It is now proposed to impose a further increase of 20 per cent. as a super tax. Instead, however, of the 20 per cent. super tax ranging over the whole field of assessments, as in 1918-39, it is proposed that the super tax shall apply only in respect of those assessments in which the taxable balance exceeds an unimproved value of £20,000.

The proposed super tax will produce £500,000 additional revenue in a full assessment year, almost all of which will be collected in the current year.

Sales Tax

The Government proposes to obtain extra revenue from sales tax, by a regrouping of the goods in the various taxable categories.

Those goods which are at present exempted will not be affected, because an examination of the schedule of exemptions reveals that they consist, broadly speaking, only of basic necessities of life and aids to primary and secondary production - goods which the Government considers unsuitable for taxation.

The special fields which are at present taxed at 5 per cent. and 15 per cent. will, in future, be taxed (with limited exceptions) at 10 per cent. and 20 per cent., respectively. It is not proposed to alter the general rate of 10 per cent., but certain items of a less essential nature which are at present in the general field will be transferred to the 20 per cent. field.

The opportunity will also be taken to correct a few anomalies by transferring to the exempt list certain goods at present in the 5 per cent. schedule.

It. is estimated that these alterations will increase the revenue from sales tax by £1,900,000 in 1941-42, and £3,300.000 in a full year.

Post Office Charges

It is proposed to increase charges for postal and telephone services as follows : -

  1. War postage tax of½d. in addition to the normal rate of postage on all postal articles except mail matter to and from members of the fighting forces, air-mail letters to addressees abroad and parcels.
  2. Increased telephone charges, viz. : - Rentals at rates varying from 5s. to 15s. per annum ; an additional farthing per call on local calls;, and increases on a sliding scale on trunk calls exceeding 25 miles.

The extra revenue for 1941-42 is estimated at £1,500,000, and for a full year at £2,000,000.

Customs and Excise

Certain increases ofcustoms and excise are proposed. Details will be given to the committee at a later stage. The proposals will yield additional revenue of £2,350,000 in 1941-42 and £3,500.000 in a full year.

Taxation Proposals Summarized

The estimated additional revenue to be obtained in the current year by the

Government’s proposals may now be summarized thus -

Of the additional revenue of £22,400,000 to be obtained this year, £5,750,000 is to be gained by indirect taxation, and £16,650,000 by direct taxation.

With these proposals, the total estimated revenue for 1941-42 will be increased from £163,227,000 to £185,627,000. Details are given in table No. 2.

Budget Summary

For convenience I now summarize the key figures of the revenue budget as revised. A comparison with the proposals of the previous Government is also shown -

War Expenditure

It is appropriate here to set out briefly how the estimated war expenditure of £221,485,000 for this year will be financed, in comparison with the actual expenditure of £170,238,000 last year-

Loan Estimates

In addition to the war expenditure which is to be charged to loan £2,600,000 is to be provided for Post Office Works, &c. The estimated total loan expenditure for 1941-42 for civil and war purposes is £141,938,000, compared with actual loan expenditure last year of £105,265,000.

Other Financial Measures

In addition to the budget proposals which I have outlined there are four aspects of the Government’s financial policy to which I wish to refer briefly. These are -

  1. Rural reconstruction.
  2. Banking policy.
  3. Guaranteed advances for war production.
  4. Control of profits.

Rural Reconstruction

The Government proposes to begin promptly in making effective its policy to give stability to our rural industries. The existing machinery for debt adjustment and for the transfer of farmers from sub-marginal areas will be speeded up. Arrangements have been made to have these matters examined at a meeting of Commonwealth and State Ministers early next month.

Mortgage Bank

An integral part of the Government’s plan for rural reconstruction is the establishment of a Mortgage Bank. Work is already in progress on the necessary legislation. Before finality can be reached it will be necessary to take into account the relations of the new bank with existing State instrumentalities making loans on mortgage. A conference of the Commonwealth Departments concerned, the Commonwealth Bank and the State organizations referred to will he called as soon as possible to examine this and related problems. A bill will be submitted to Parliament early in the new year.

Banking Policy

The Government intends to implement immediately certain recommendations of the Royal Commission on the Monetary and Banking System for the purpose of bringing the operations of the trading banks under effective control.

It is intended to issue regulations providing that the business of banking may not be carried on except under licence. State banks which do not operate outside their own State will not come within the regulations.

Licences will be issued to the existing trading banks, subject to certain conditions which will be set out in the regulations.

The conditions will include provisions that a licensed bank shall -

  1. hold on deposit with the Commonwealth Bank its excess investible funds on a basis to be determined by the Treasurer after fully discussing the matter with the Commonwealth Bank;
  2. publish accounts and balancesheets at intervals and in forms prescribed by the Treasurer ;
  3. furnish to the Treasurer, through the Commonwealth Bank, such statements in respect of their business as the Treasurer directs and to the Commonwealth Bank such statements as the bank directs ;
  4. enable the Auditor-General to investigate and report upon the affairs of the bank periodically, or as directed by the Treasurer.

These powers will be exercised to prevent expansion of credit by trading banks, arising out of the increased funds due to war activities.

Guaranteed Advances

For the purpose of assisting war pro duction the Commonwealth has guaranteed, in whole or part overdrafts with trading banks of several private manufacturers. In future all guaranteed financial assistance will be provided by the Commonwealth Bank, and appropriate steps will be taken to safeguard the advances as far as practicable.

Profits

With the increasing pressure of war demands upon economic resources, rigid control of prices and the prevention of profiteering will be more important than ever. Since it came into office, the Government has been reviewing the administrative machinery for controlling prices, including the methods of fixing prices on Government orders and their effects upon the level of profits. The increase in war-time company tax will take a very large proportion of high profits earned during the war, while the rigid enforcement of price control and the closer review of prices on Government contracts will reduce the scope for excess profits. The Government will review the whole problem later after it has had an opportunity of observing the results of its administration. Honorable members will scarcely need to be assured by me that the Government is determined, on the one hand, to limit the scope for profiteering as far as practicable, and, on the other hand, to tax excess profits wherever they occur.

Review of Budget

The financial proposals which I have placed before the committee set out the Government’s immediate plans to deal with the problem as it now exists. The committee will appreciate that there has not been sufficient time to go thoroughly into every item of the budget. Even more important, the war situation is changing rapidly, and there is every possibility of our war expenditure being increased. It is intended, therefore, to review the budget position as a whole early in the new year, and to bring down a supplementary budget to provide for any additional finance that may be required.

Conclusion

I cannot conclude this financial statement without a word of commendation for the zealous officers, particularly those in the Treasury and Taxation Departments, who have worked so strenuously and with great efficiency in its preparation.

I ask for the co-operation and constructive advice of the whole of the community, and I particularly appeal to the industrial organizations to strain every nerve to keep the wheels of industry moving.

Whatever differences may exist can and should be settled without a moment’s delay in the production of the equipment so necessary to the welfare, safety and success of those, who, to-day, stand in the front line to defend this country from totalitarian aggressors. If we value our way of life, if we wish to preserve the liberty we enjoy, to elect Parliaments, and to criticize our various forms of administration freely, then all our resources must be utilized to the full. If the lights of liberty are to continue to burn, we must tend and defend the flame with all the power at our command. Lip service is not enough ; the things that count are human courage and endeavour.

I move -

That the first item in the Estimates (Revised), under Division No. 1 - The Senate - namely, “ Salaries and Allowances. £8,470,” be agreed to.

Progress reported.

page 31

PAPER

The following paper was presented -

The Budget 1941-42 (Revised) - Additional papers presented by the Honorable J. B. Chifley, M.P., for the information of honorable members, in connexion with the Budget of 1941-42 (Revised).

Ordered to be printed.

SALES TAX BILLS (Nos. 1 to 9) 1941.

In Committee of Ways and Means:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move -

  1. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 1) 1930-1940 sales tax be imposed upon the sale value of goods, manufactured in Australia by a taxpayer and on or after the thirtieth day of October, One thousand nine hundred and forty-one, sold by him or treated by him as stock for sale by retail or applied to his own use. at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum; and
    3. inrespect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shallnot be payable - Ten per centum.

  2. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 2) 1930-1940 sales tax be imposed upon the sale value of goods, manufactured in Australia and sold on or after the thirtieth day ofOctober, One thousand nine hundred and forty-one,by a taxpayer who purchased them from the manufacturer, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum; and
    3. in respect of goods not covered by the Second or , Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not he payable - Ten per centum.

  3. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 3) 1930-1940 sales tax be imposed upon the sale value of goods, manufactured in Australia and sold on or after the thirtieth day of October, One thousand nine hundred and forty-one, by a taxpayer not beingeither the manufacturer of those goods or the purchaser of those goods from the manufacturer, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales . Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  4. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 4) 1930-1940 sales taxbe imposed upon the sale value of goods, manufactured in Australia and sold to a taxpayer who has, on or after the thirtieth day of October, One thousand nine hundred and forty-one, applied those goods to his own use, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum ; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  5. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 5) 1930-1940 sales tax be imposed upon the sale value of goods, imported into Australia by a taxpayer on or after the thirtieth day of October, One thousand nine hundred and forty-one, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  6. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 6) 1930-1940 gales tax be imposed upon the sale value of goods, imported into Australia by a taxpayer and, on or after the thirtieth day of October, One thousand nine hundred and forty-one, sold by him or applied by him to hisown use, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that Act - Twenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  7. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 7) 1930-1940 sales tax toe imposed upon the sale value of goods, imported into Australia and sold on or after the thirtieth day of October, One thousand nine hundred and forty-one, by a taxpayer not being the importer of the goods, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that ActTwenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  8. That in lieuof the rate of tax imposed by the Sales Tax Act (No. 8) 1930-1940 sales tax be imposedupon the sale value of goods, imported into Australia and sold to a taxpayer who has, on or after the thirtieth day of October, One thousand nine hundred and forty-one, applied those goods to his own use, at the rate of -

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. in respect of the goods covered by the Third Schedule to that ActTwenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  9. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 9) 1930-1940 sales tax be imposed upon the sale value of goods in Australia, including goods which have gone into use or consumption in Australia, leased by a taxpayer to a lessee on or afterthe thirtieth day of October, One thousand nine hundred and forty-one, at the rate of-

    1. in respect of the goods covered by the Second Schedule to the Sales Tax (Exemptions and Classifications) Act - Five per centum;
    2. ) in respect of the goods covered by the Third Schedule to that ActTwenty per centum; and
    3. in respect of goods not covered by the Second or Third Schedule to that Act, and on the sale value of which it is not provided by that Act that sales tax shall not be payable - Ten per centum.

  10. That, for the purposes of the foregoing resolutions, “Sales Tax (Exemptions and Classifications) Act” means the Sales Tax (Exemptions and Classifications) Act 1935- 1940 as proposed to be amended by the Sales Tax (Exemptions and Classifications) Bill 1941.

The only change in rates of sales tax proposed is that the present 15 per cent., which applies to goods of the third schedule to the Sales Tax (Exemptions and Classifications) Act 1935-1940, he increased to 20 per cent. The rate of 5 per cent. for goods which are considered to deserve special consideration will he retained, but the goods to which that concession will apply will be reduced to the bare minimum. It was hoped that it might he possible to do away altogether with the5 per cent. rate, and thus simplify the work of merchants in classifying goods. That, however, has been found impracticable in view of the inclusion in the 5 per cent. schedule of drugs and medicines, and goods for use in schools, upon which the Government is unwilling to increase the rate. However, the retention of these goods in the 5 per cent. schedule will not prevent a large measure of simplification being achieved, because the goods in question are ones which follow a fairly clearly defined course from manufacturer to consumer, and only rarely become intermingled with ordinary goods of commerce. It is proposed, also, to retain the general rate of 10 per cent., but the field to which this rate will apply will be somewhat enlarged by transfers of goods at present bearing the rate of 5 per cent. Particulars of the goods so transferred will be shown in detail in another bill which will be introduced later to-day.

The rate to be applied to goods in the third schedule is to be increased from 15 per cent. to 20 per cent. Honorable members will know that in this field are goods which are estimated to serve the less urgent needs of the community. The list will he added to by transfer from the 10 per cent, schedule of a limited number of similar articles. Full particulars of these goods will be given when the bill amending the Sales Tax (Exemptions and Classifications) Act 1935-1940 is before the committee. The list has been carefully compiled in the light of present necessity.

As is customary when changes in sales tax are suggested, it is proposed that the new rates shall come into operation as from to-morrow. This course is designed to prevent the dislocation of trade which would occur should there be any delay between the date of the announcement of the Government’s intentions and the date when those intentions become effective. There are provisions in the existing law which fully protect vendors of goods who, as from to-morrow, pay tax at the higher rates now proposed. They will be empowered, when the bill becomes law, to recover the additional amount of tax from any customers who have not accepted liability therefor. The new rates will apply to goods imported on and after the 30th October, 1941, as well as to all taxable transactions or operations effected or done on and after that date.

Progress reported.

page 33

INCOME TAX BILL 1941

In Committee of Ways and Means:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move -

  1. That a tax be imposed upon incomes at the following rates: -

Division A. - Rate of Tax in Respect of Taxable Income Derived from Personal Exertion.

If the taxable income docs not exceed four hundred pounds, the rate of tax for every pound of taxable income be sixteen pence.

If the taxable income exceeds four hundred pounds, but does not exceed two thousand and five hundred pounds, the rate of tax for every pound of taxable income be sixteen pence and one twenty-fifth of a penny increasing uniformly by one twenty-fifth of a penny for every pound by which the taxable income exceeds four hundred and one pounds.

If the taxable income exceeds two thousand and five hundred pounds, the rate of tax for every pound of taxable income up to and including two thousand and five hundred pounds be one hundred pence, and the rate of tax for every pound of taxable income in excess of two thousand and five hundred pounds be two hundred pence.

Division B. - Rate of Tax in Respect of Taxable Income Derived from Property.

If the taxable income does not exceed four hundred pounds, the rate of tax for every pound of taxable income be twenty pence.

If the taxable income exceeds four hundred pounds,but does not exceed twothousand pounds, the rate of tax for every pound of taxable income be twenty pence and onetwentieth of a penny increasing uniformly by one-twentieth of a penny for every pound by which the taxable income exceeds four hundred and one pounds.

If the taxable income exceeds two thousand pounds, the rate of tax for every pound of taxable income up to and including two thousand pounds be one hundred pence, and the rate of tax for every pound of taxable income in excess of two thousand pounds be two hundred pence.

Division C. - Rates of Tax in Respect of Taxable Income Derived Partly from Personal Exertion and Partly from Property.

  1. For every pound of taxable income derived from personal exertion, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division A if the total taxable income of the taxpayer were derived exclusively from persona] exertion, by the amount of the total taxable income. (ft) For every pound of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division B if the total taxable income of the taxpayer were derived exclusively from property, by the amount of the total taxable income.

Division D. - Rates of Tax by Reference to an Average Income.

  1. For every pound of the taxable income derived from personal exertion by a taxpayer to whose income Division 16 of Part III. of the Income Tax Assessment Act 1936-1940 applies, the rate of tax shall be ascertained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his average income, by that average income.
  2. For every pound of taxable income derived by him from property the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his average income, by that average income.

Division E. - Rate of Tax by Reference to a Notional Income.

  1. For every pound of the actual taxable income from personal exertion of a taxpayer deriving a notional income, as specified by subsection (1.) of section eighty-six of the Income Tax Assessment Act 1936-1940, the rate of tax shall bc the amount obtained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his notional income, by that notional income.
  2. For every pound of the actual taxable income from property of a taxpayer deriving a notional income, as specified by sub-section (1.) of sectioneighty-six of the Income Tax Assessment Act 1936-1940, the rate of tax shall be the amount obtained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his notional income, by that notional income.

Division F. - Tax Payable where Amount would otherwise be Less than Ten Shillings.

Notwithstanding anything contained in the last five preceding divisions, where the amount of income tax which a person would, apart from this division, be liable to pay is less than ten shillings, the income tax payable by that person shall be ten shillings.

Division G. - Rates of Tax Payable by a Trustee.

For every pound of the taxable income in respect of which a trustee is liable, pursuant toeither section ninety-eight or section ninetynine of the Income Tax Assessment Act 1936- 1940, to be assessed and to pay tax, the rate of tax shall be the rate which would be payable under Division A, B, C, D or E as the case requires, if one individual were liable to be assessed and to pay tax on that taxable income.

Division II. - Rates of Tax Payable by a Company. (a.) Subject to the last preceding division, for every pound of the taxable income of a company the Tate of tax shall be thirty-six pence.

  1. Subject to the last preceding division, for every pound of that portion; of the taxable income of a company which has not been distributed as dividends on which the company is liable, pursuant to Part IIIa. of the Income Tax Assessment Act 1936-1940, to pay further tax, the rate of tax shall be twenty-four pence.

  2. For every pound of interest in respect of which a company is liable, pursuant to subsection ( 1. ) of section one hundred and twentyfive of the Income Tax Assessment Act 1936-1940, to pay income tax, the rate of tax shall be thirty-six pence.

    1. 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 Assessment Act 1940 provides that that act shall not apply) a supertax at the rate of twelve pence for every pound of that excess:

Provided that this paragraph shall not apply to the assessment of a company as a trustee.

  1. That tax in accordance with the preceding provisions of this resolution shall be levied and paid for the financial year beginning on the first day of July, One thousand nine hundred and forty-one.
  2. That, until the commencement of the act for the levying and payment of income tax for the financial year beginning on the first day of July, One thousand nine hundred and fortytwo, the foregoing provisions of this resolution shall also apply for all financial years subsequent to that beginning on the first day of July. One thousand nine hundred and forty-one.

The Government proposes additional income tax on individuals which will give £9,400,000 additional revenue in a full year, and £7,400,000 in the current year. The increase in the rates of tax with which I om now concerned will give £6,000,000 increase in revenue in a full year, and £4,500,000 in the current year. The rest of the increase is due to changes in the method of assessing taxable income and will be dealt “with when I introduce amendments to the Income Tax Assessment Act.

The increase of rates proposed will affect only taxable incomes over £1,500 from personal exertion, and over £1,200 from property. Up to this point, the rates of tax proposed are exactly the same as at present. For personal exertion income, the present scale provides that the rate of tax per £1 of taxable income increases by l/25th of Id. for every additional £1 of income over £400 up to £1,500, on which the rate of tax is 5s. in the £1. All income in excess of £1,500 pays 10s. in the £1. It is now proposed to continue the progression by l/25th of a penny for every additional £1 from £1,500 up to £2,500, on which the rate of tax -will be 8s. 4d. in the £1. All income in excess of £2,500 will pay 16s. 8d. in the £1.

Similar changes are made for property incomes. The progression, which for property is l/20th of Id. per £1, will be continued beyond its old stopping point of £1,200 up to £2,000 on which the rate of tax will be 8s. 4d. in the £1. Taxable income from property in excess of £2,000 will pay 16s. 8d. in the £1.

The effect of these changes can he seen in the tables furnished to honorable members. For incomes of £2,000 from personal exertion the increase of tax is small. For incomes of £3,000, the increase averages about 20 per cent., with some small variation -between States. At £5,000, the average increase becomes about 40 per cent., and at £10,000 about 55 per cent. This percentage addition to the present tax continues to increase up to ft limit of 66 per cent, at the very highest incomes.

The difference between States is due, of course, to the allowance of State taxes paid as a deduction from income. The percentage increases now proposed do not vary much from State to State. The absolute differences of the existing tax, and still more of the proposed tax, are, however, very considerable at high incomes. An income of £5,000 will pay federal tax of £2,673 in one State and only £2,077 in another, a difference of nearly £600. The higher federal tax is paid in the State “with the lowest State taxation, and vice verna. The effect of this is to make total Federal and State taxation much more nearly equal than they would otherwise be in different States. In peace-time the merits of this arrangement are controversial, and I do not wish to commit myself to a general judgment on the question. In war-time,, the value of it is beyond doubt. All surplus spending power must be mobilized for war finance. High incomes particularly must contribute to their full strength. Those who live in the more lightly-taxed States must be content to give up, for the period of the war, a good deal of their advantage relative to the possessors of similar incomes in the more highly-taxed States.

The comparative equalization of total taxation of the higher incomes produced by this arrangement can be seen from the table of Federal and State income taxes combined, which has been circulated to honorable members. At £1,000, total taxation in the highest taxing State is 20 per cent, greater than in the lowest taxing State. At £3,000, the excess is only about 3 per cent., and though it fluctuates at still higher incomes - owing to the irregularity of State taxation scales - it remains less than 6 per cent. It is consideration of State taxes now imposed which has, for the present, limited the proposed federal scale. The limit of 18s. in the £1 has been taken for combined Federal and State .taxes. Combined tax in the highest taxing State will be about 16s. in the £1 for an income of £10,000 with a limit of 18s. for the highest income.

As the rates of tax payable by individuals are not being otherwise altered, I do not propose to occupy the time of the committee in a detailed explanation of the various divisions of the resolution. The tables circulated to honorable members give a sufficiently clear indication of the incidence of the tax on the various grades of incomes. As I announced in my budget speech, the rate of ordinary company income tax is being increased from 2s. to 3s. It is considered that this increase is justified by the demands of war-time finance. The additional revenue due to this increase is estimated at £4,500,000. I commend the resolution for the favorable consideration of honorable members.

Progress reported.

page 36

WAR-TIME (COMPANY) TAX BILL 1941

In Committee of Ways and Means:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move -

That, in respect of all assessments for the financial year beginning on the first day of July, One thousand nine hundred and forty-one and all subsequent years, in lieu of the rate of tax imposed by sub-section (1.) of section 5 of the War-time (Company) Tax Act 1940 - where the excess of the taxable profit over the percentage standard is not more than One per centum of the capital employed - the rate of tax be Six percentum ; and *where* theexcess is more than One per centum of the capital employed - the rate of tax in respect of the excess referred to in the first column of the following table be - on so much of that excess as is equal to the percentage of the capital employed specified in thesecond column of that table - the rates specifiedin the third column of that table ; and on the remainder of that excess - the rates specified in the fourth column of that table : -

The resolution submitted for the consideration of honorable members is designed to give effect to the Government’s proposal to obtain from public companies a greater contribution to the war effort, by increasing the rates of war-time (company) tax. In order that honorable members may readily appreciate the proposed alterations inthe rates of tax, I shall explain as briefly as possible the present scale of rates. There is a percentage standard of8 per cent. of the capital employed, below which profits are exempt from tax. The rate of tax commences at 4 per cent. of the first 1 per cent. of the capital employed by which the taxable profit of a company exceeds the percentage standard. It increases by 4 per cent. steps for each additional 1 per cent. of the capital employed by which the taxable profit exceeds the percentage standard, until the maximum rate of 60 per cent. is reached. The maximum rate applies when the taxable profit is more than 22 per cent. of the capital employed. The three variations being made in the act are, first, increasing the commencing rate from 4 per cent. to 6 per cent.; secondly, increasing the steps also from 4 per cent. to 6 per cent. ; thirdly, increasing the maximum rate from 60 per cent. to 78 per cent.

Under the proposed new scale, the first 1 per cent, of capital employed represented by the excess will be assessed at 6 per cent., the second at 12 per cent., the third at 18 per cent., and so on, until a maximum rate of78 per cent. is reached. It is proposed, in an amendment to he introduced in respect of the assessment act, to reduce the statutory percentage by which the percentage standard is calculated, from8 per cent. of the capital employed, to 4 per cent., so that the maximum rate will he reached at the stage where the taxable profit exceeds . 16 per cent. of the capital employed, as against 22 per cent. formerly. The fourth column of the table contained in the resolution will indicate to honorable members how the rates progress according to the percentage which the excess of the taxable profit over the percentage standard, bears to the capital employed. Where the excess of the taxable profit over the percentage standard is greater than 1 per cent. of the capital employed, the rates of tax upon all percentages specified in the second column have been expressed in the form of an average. This is the rate which appears in the third column. For example, where the excess is more than 2 per cent. of the capital employed, but is less than 3 per cent. the average rate for the first 2 per cent. is shown as nine in the third column. This represents the average of 6 per cent. which applies to the first 1 per cent. and 12 per cent. which applies to the second. It is not practicable to set out the scale of rates in any other form, without a great deal of repetition.

The alterations in these rates admittedly mean a larger yield from the war-time company tax. The additional yield for a full assessment year is estimated at £4,750,000. The additional amount estimated to be collected during the current financial year is set down at £4,000,000, i.e., a total collection of £5,000,000, as contrasted with the £1,000,000 only to be collected by the previous Government. No one can reasonably object to the principles embodied in this act of taxing high profits. They have been acclaimed by taxation experts even in other countries as equitable and were examined by a taxation parliamentary committee from both sides of this House last year. Its soundness is considered to be a great improvement on the provisions of the War-time Profits Tax Assessment Act that was in operation during the last war. The larger companies, as well as the more favoured class of individuals, must be prepared to contribute to the point of sacrifice in carrying on this titanic war struggle, and I appeal to all those companies affected to accept loyally and uncomplainingly their quota of the national contribution to the war effort.

Progress reported.

page 37

LAND TAX BILL . 1941

In Committee of Ways and Means:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

. - I move -

  1. That, in addition to theland tax payable under the Land Tax Act 1910-1940, there shall be payable in respect of land, the taxable value of which is in excess of £20,000, a super tux equal to -

    1. twenty per centum of the amount of land tax payable under that Act in respect of that land; or
    2. one per centum of the amount of the excess of the taxable value of that land over Twenty thousand pounds, whichever is the lesser amount.

  2. That the super tax shall apply to all assessments for the financial year beginning on the 1st day of July, 1941, and for each financial year thereafter.

This resolution implements the’ Government’s proposal to impose a super tax of 20 per cent. in those cases where the taxable unimproved value of the owner’s land is in excess of £20,000. As a deduction of £5,000 is allowed in arriving at the taxable value, except in the case of an absentee, a land-owner will need to own land of an unimproved value of £25.000 before he becomes liable to pay the super tax. The additional revenue to be obtained from the new tax is estimated at £500,000. In moving this resolution, I remind honorable members that between 1927-28 and 1940-41, the taxpayers liable to pay land tax received very liberal treatment from governments by way of successive percentage reductions of the rates of the tax.

The remissions commenced in 1927-28 when the basic 19.14-15 rates of tax were reduced by 10 per cent. This reduction continued until 1932-33. In that year, a further reduction of 331/3 per cent. was made, thereby increasing the total reduction to 40 per cent. on the rates operating prior to 1927-28. In the following year, a reduction of 50 per cent. was substituted for the331/3 per cent. granted the previous year, so that the tax payable for 1933-34 was only 45 per cent. of the basic rate of 1914-15. This reduced rate was continued for five years until 1938-39, when the rates, were increased by 11.1 per cent., bringing the rate up to exactly onehalf of that which was in operation in 1914-15. This rate was applied also for 1939-40. Last year, the previous Government in its search for further revenue decided to restore the basic rates of 1914-15, and increased the rates by 100 per cent. The story since 1927-28 has, until the last two or three years, been one of reduction and still further reduction, and honorable members will be interested to learn that the actual money benefit which accrued to the federal land taxpayers of Australia as the result of these remissions was over £13,000,000.

I remind honorable members that 75 per cent. of the land tax revenue is paid in respect of city lands and 25 per cent. only in respect of country lands, so that the benefit of these remissions has been enjoyed mainly by wealthy companies and individuals. If there be one section of the community which has most to gain by victory in this war, it is the landowners of Australia, and the Government considers that they should be called upon to make some additional contribution towards the achievement of that victory. It, has accordingly been decided that a super tax of 20 per cent. should be paid in all cases where the taxable unimproved value of the land exceeds £20,000. The rates which were in operation last year were also in operation prior to 1918, when they were increased by 20 per cent. over the whole field, without any exemption such as that now proposed. These increased rates were in operation until 1921-22.

The provision that the 20 per cent. super tax shall apply only in those cases where the taxpayer’s holding is in excess of a taxable value of £20,000 means, first, that approximately 70 per cent. of the unimproved value of country lands will not be called upon to bear this additional impost and, secondly, that the burden will fall on the shoulders of those best able to bear it. It is proposed to graduate the incidence of the super tax and to prevent any anomaly by providing that it shall not exceed 1 per cent, of the taxable value of the land in excess of £20,000. Under this method, the full 20 per cent. of the super tax will not be payable until the taxable value reaches approximately £25,000.

Progress reported.

page 38

ESTATE DUTY BILL 1941

In Committee of Ways and Means:

Mr CHIFLEY:
Treasurer · Macquarie · ALP

.- I move-

That, in lieu of the rates of estate duty imposed by the Estate Duty Act 1914-1940, the rates of estate duty in respect of the estates of all persons dying on or after the date of the commencement of the act passed to give effect to this resolution be -

where the value for duty of the estate does not exceed Ten thousand pounds - Three pounds per centum.

where the value for duty of the estate exceeds Ten thousand pounds but does not exceed Twenty thousand pounds - Three pounds per centum increasing by Three one-hundredths of one pound per centum for every complete One hundred pounds by which that value exceeds Ten thousand pounds.

where the value for duty of the estate exceeds Twenty thousand pounds but does not exceed One hundred and twenty thousand pounds - Six pounds per centum increasing by Two one-hundred the of one pound ger centum for every complete One undred pounds by which the value exceeds Twenty thousand pounds.

where the value for duty of the estate exceeds One hundred and twenty thousand pounds but is less than Five hundred thousand pounds - Twenty six pounds per centum increasing by One two-hundredths of one pound per centum for eveTy complete One thousand pounds by which the value exceeds One hundred and twenty thousand pounds.

where the value for duty of the estate is Five hundred thousand pounds or more - Twenty seven pounds eighteen shillings per centum.

The rates of estate duty in force prior to May, 1940, were adjusted and increased by the former Government. They ranged from 1 per cent. on £1,001 to 15 per cent. on estates in excess of a value of £71,000. These rates, however, were reduced by one-third thereof in respect of estates passing to the widow, children or grandchildren of the deceased. The result of this provision was that the greater part of the dutiable value of estates was assessable at a rate which reached a maximum of only 10 per cent. In May, 1940, the rates were increased so as to commence at 3 per cent., which applies to all estates up to a value of £10,000. Thereafter, the rate progresses steadily until the maximum of 20 per cent. is reached, when the value of the estate amounts to £500,000. The Government is of opinion that further revenue can be obtained from this source without undue hardship. It is not intended, however, to increase the rates applicable to estates in the lower ranges, but it has been decided to apply a steeper rate of progression in the rate of duty on estates in the higher ranges. Commencing with estates in excess of £20,000 in value, the proposed rate reaches a maximum of 27.9 per cent. when the estate is of a value of £500,000 or more.

The rate of progression in estates of £20,000 up to £100,000 in value, where the rate is 18 per cent. in the present act, is 3-200ths of £1 per cent. for each £100 by which the value exceeds £20,000. The proposal in the resolution makes the rate of increase 2-100ths of £1 per cent. for each £100 of value until the estate reaches a value of £120,000, where the rate will be 26 per cent. Thereafter the rate of increase is l-200ths of £l per cent. for each £1,000 until the maximum of 27.9 per cent. is reached at £500,000.

I am circulating to honorable members a schedule showing the present and proposed rates of duty on estates in various grades from £1,000 to £1,000,000, compared with the death duty in the highest State and the British estate and succession duties on estates of similar values. This schedule will clearly show the effect of the Government’s proposals. It will be seen that the increase does not commence to have effect until the estate exceeds £20,000 in value, and the increases of rates are not substantial until the estate exceeds £100,000 in value. Although according to the scale of rates, an estate of £100,000 in value is subject to duty at the rate of 22 per cent., such estate does not, in fact, have to bear that rate of duty, because the Commonwealth levies duty not upon the full £100,000, but only upon the balance remaining after the deduction of State death duty. In the case of the highest State, this reduces the taxable balance from £100,000 to slightly more than £73,000, and the rate of tax upon that amount is 16.6 per cent.

The total increase of revenue by applying these increased rates is estimated at approximately £650,000 for a full year, but owing to the fact that it is not possible to issue the estate duty assessments in respect of these large estates until many months after the date of death of the deceased, and as the increases will only apply to the estates of persons who die after the commencement of the act, no appreciable revenue is expected to be receivedin the current financial year. The benefit of. the increase should, however, be felt substantially in the financial year 1942-43.

Progress reported.

page 39

GIFT DUTY BILL 1941

In Committee of Ways and Means:

Mr.CHIFLEY (Macquarie- Treasurer) [5.0]. - I move -

That gift duty be levied and paid in respect of every gift made on or after the date of the commencement of the act passed to give effect to this resolution -

by a person (not being a body corporate) who is domiciled in Australia, or by a body corporate which is incorporated under the law of any State or Territory which is part of the Commonwealth - of any property wherever situated; or

by any other person - of any property which is situated in Australia at the time when the gift is made.

That the rates of gift duty be -

Where the value of all gifts does not exceed Five hundred pounds - nil.

Where the value of all gifts exceeds

Five hundred pounds but does not exceed Ten thousand pounds - Three pounds per centum of the value of the gift.

Ten thousand pounds but does not exceed Twenty thousand pounds - Three pounds per centum of the value of the gift increasing by Three one-hundredths of One pound per centum for every complete One hundred pounds by which the value of all gifts exceeds Ten thousand pounds.

This resolution is being introduced to impose rates of duty upon gifts. The Gift Duty Assessment Act, the bill for which will be introduced in this House later in the day, will, in due course, be incorporated and read as one with the Gift Duty Act when passed. The rates of duty will commence at 3 per cent., and will reach a maximum of approximately 27 per cent, when the aggregate value of the gifts made within a five-year period reaches £500,000. It is necessary to remember that although the rates under this resolution are to follow the same scale as for estate duty purposes, the actual amount of duty imposed upon any particular gift will generally he less than the duty that would have been imposed upon the same amount of property if it had formed part of the estate’ of the donor subject to estate duty. This position arises from the fact that the rate of gift duty is ascertained by reference only to the aggregate value of all gifts made by the donor within a period of five years, and not with regard to the aggregate value of the whole of the assets of the donor on which the rate for estate duty purposes is based.

The double purpose of the assessment bill is thus implemented, i.e., the purposes of revenue production and revenue protection. If the rate of tax were made to depend upon the aggregate value of the whole of the deceased’s assets, it would probably so seriously deter the making of gifts as to produce little or no revenue under this resolution. Also, it would be exceedingly costly to administer an act fixing the rate with regard to the aggregate value of the donor’s assets every time he made a gift subject to duty. The rate on all gifts up to an aggregate value of £10,000 is 3 per cent. Thereafter it increases by 3-100ths of £1 per cent. for each £100 by which the value exceeds £10,000, until a rate of 6 per cent. is reached at £20,000. Thereafter it increases by 2-100ths of £1 per cent. for every £100 by which the value exceeds £20,000, until a value of £120,000 is reached, where the rate is 26 per cent. Thereafter the rate increases by l-200ths of £1 per cent. for every £1,000 by which the value exceeds £.120,000 until the aggregate value is £500,000 where the maximum rate of 27.9 per cent. is reached.

No differentiation in the rates is made as between gifts passing to relatives or strangers.If the aggregate value of the gifts made by a donor within the statutory period of five years is £1,000, the gift duty payable will amount to £30. The rates and amounts of duty payable on gifts of various amounts are as follows : -

The revenue which, it is estimated, will be derived from this source for a full year is, as I have already informed the committee, £500,000, but for the balance of the current year it will not amount to more than about £250,000.

Progress reported.

page 41

TARIFF PROPOSALS 1941

Customs Tariff Amendment (No. 6) ; Customs Tariff (New Zealand Pre ference) Amendment (No. 3) ; Excise Tariff Amendment (No. 4). {:#subdebate-36-0} #### In Committee of Ways and Means: {: #subdebate-36-0-s0 .speaker-JOM} ##### Mr BEASLEY:
Minister for Supply and Development · West Sydney · ALP -- I move - [Customs Tariff Amendment (No.6).] That the Schedule to the Customs Tariff 1933-1939, as proposed to be amended by Customs Tariff Proposals, be further amended as hereinafter set out, and that, on and after the thirtieth day of October, One thousand nine hundred and forty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1939 as so amended. That in this Resolution " Customs Tariff Proposals " mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 2nd July, 1941 ; and 25th September, 1941. ifr. *Beasley.* [Customs Tariff (New Zealand Preference) Amendment (No. 3).] That the Schedule to the Customs Tariff (New Zealand Preference) 1933-1934 as proposed to be amended by Customs Tariff (New Zealand Preference) Proposals introduced into the House of Representatives on the second day of July, One thousand nine hundred and forty-one, be further amended as hereinafter set out and that, on and after the thirtieth day of October, One thousand nine hundred and forty-one, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, duties of Customs be collected in accordance with the Customs Tariff (New Zealand Preference) 1933-1934 as so amended. [Excise Tariff Amendment (No. 4).] That the Schedule to the Excise Tariff 1921-1939, as proposed to be amended by Excise Tariff Proposals, be further amended as hereinafter set out, and that, on and after the thirtieth day of October, One thousand nine hundred and forty-one, at nine o'clock in the forenoon, reokoned according to standard time in the Australian Capital Territory, duties of Excise be collected in pursuance of the Excise Tariff 192 1-1 939) as so amended. {: type="1" start="2"} 0. That, where any goods specified in Item 1 hereinafter - {: type="a" start="a"} 0. were manufactured or produced in Australia before thatdate ; and 1. were, on that date, subject to the control of the Customs or to Excise supervision, or in the stock, custody or possession of, or belonged to, any brewer thereof, and duties of Excise were paid thereon before that date, additional duties of Excise be collected thereon equal to the amount (if any) by which the duties of Excise so paid arc less than the duties of Excise which would be payable thereon if the duties of Excise has not been so paid. 1. That in this Resolution " Excise Tariff Proposals " mean the Excise Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 21st November, 1940 ; 11th December, 1940 ; and 2nd July, 1941. The tariff proposals which 1 have introduced are complementary to the budget, the general particulars of which have already been explained to the committee by the Treasurer. Progress reported. {: .page-start } page 45 {:#debate-37} ### SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1941 Motion (by **Mr. Chifley)** - *by leave -* agreed to - >That he have leave to bring in a bill for an act to amend the Sales Tux (Exemptions and > >Classifications) Act 1935-1940. Bill brought up, and read a first time. {:#subdebate-37-0} #### Second Reading {: #subdebate-37-0-s0 .speaker-A48} ##### Mr CHIFLEY:
Treasurer · Macquarie · ALP -- *by leave* - I move - >That the bill be now read a second time. This measure is designed to implement that portion of the Government's proposals in relation to sales tax which concerns the re-grouping of goods into the different schedules, to which the varying rates of sales tax apply. The complete proposals may be briefly stated as follows: - (1) Those goods which are at present exempt will retain their exemption. Some items will be added to the exemption schedule. (2) Most of the goods now taxed at 5 per cent, will be taxed at 10 per cent. An exception is being made of drugs, medicines, surgical instruments and appliances, and goods for use in universities and schools. (3) The 15 per cent, rate will be increased to 20 per cent. This increase of rates is being effected by the amendment of the Rates Acts. (4.) The schedule of goods, formerly taxed at 15 per cent., but now to be taxed at 20 per cent., is to be added to by the transfer of certain items from the 10 per cent, schedule. All of the goods in the existing 5 per cent, schedule are goods which, though taxable originally, were exempt in the period immediately prior to November, 1.940. When these goods were brought back into the taxable field last, year, they were taxed at 5 per cent, only, and not at the normal rate of 10 per cent. With the increasing need for more revenue it is found impossible to continue .that, preference, and it is proposed that with some exceptions, which will be explained la tor, "the 5 per cent, schedule shall be moved into the 10 per cent, schedule. The exceptions referred to are - (1) Drugs, medicines and surgical instruments; (2) pumping and other water and irrigation equipment for use in agricultural industries; and (3) goods for use in universities and schools. Drugs and medicines and articles for use in universities and schools will remain at 5 per cent, until revenue requirements have, so far eased as to permit their total exemption. Certain surgical appli ances for use by persons with grievous physical afflictions have, however, been exempted. These appliances are - Artificial eyes, artificial limbs, abdominal belts, crutches, invalid chairs, carriages and tricycles, surgical boots, braces and irons, trusses and umbilical belts. I do not think that anyone will resent the preference which has been accorded to these items, for without exception they have claims for exemption beyond the normal. For the sake of consistency with the policy of exempting plant and machinery used by primary producers, item 6 of the 5 per cent, schedule, in so far as it relates to windmills, pumps, tanks, troughing, &c, for use in the agricultural industry, is being transferred to the exempt list. Maps for use in schools are also being exempted. Certain goods now included in the 10 per cent, schedule are to be included in the schedule which will bear tax at 20 per cent. The items to be so transferred are set out in detail in a statement being circulated for the information of honorable members. The sale value of goods in this list is estimated at £6,500,000 per annum. The existing law provides for the exemption of goods sold by retail by a person whose total average sales of all goods does not or would not, in the opinion of the Commissioner, exceed £i,'000 per annum. This exemption was provided to enable small manufacturers to escape the burden of sales tax. and at the same time to free the administration from the task of obtaining returns from a large number of very small businessmen. The exemption has been well justified in the past. "With the increasing rates, however, taxpayers whose average sales are slightly over £1,000 per annum complain that an undue advantage is obtained by taxpayers whose average annual sales are a little under £1,000 per annum, and that consequently business is being diverted from taxpayers because of the better price quotations which can bc obtained from exempt manufacturers. It is proposed, therefore, to exempt only those manufacturers whose total turnover does not exceed £700. The opportunity has been taken for the correction of a small anomaly which has come to light since the creation of the 15 per cent. schedule in November, 1940. In that schedule baskets were included without distinction as to the kind of basket, and, therefore, tax at 15 per cent. was charged on all baskets. The fact was overlooked when these goods were included that there are many types of baskets used for industrial and commercial purposes. With the proposed increase of the rate to 20 per cent., this anomaly would be aggravated, if not corrected. It is, therefore, proposed that the rate of tax on baskets of a kind used for commercial or industrial purposes should be reduced from 15 per cent. to 10 per cent. The opportunity has also been taken of providing for the exemption of the following three items: - (a) Producer-gas units for use in the production of fuel for land transport vehicles, including tractors, and parts and accessories therefor; (b) goods for use exclusively in airraid precaution services for the protection of the general public or of property publicly-owned; and (c) uniforms for members of the Australian Army Nursing Services, Voluntary Aid Detachments called up for full-time service with the Army, the Australian Women's Army Service, the Women's Auxiliary Australian Air Force, and such other organizations as are prescribed. With regard to producer-gas units, the Commissioner of Taxation was authorized by the previous Government to anticipate this exemption from the 2nd June, 1941, in pursuance of its policy of fostering the use of substitute fuels for petrol. The present Government also endorses that policy and submits the proposal for legislative sanction. As regards goods for air-raid precautions it is proposed that the exemption should operate as from the 1st February, 1939, this being the earliest date upon which such goods are known to have been purchased by public authorities undertaking such services. The refunds to be granted under this proposal will be of no material amount. The exemption proposed for uniforms for the various women's organizations is designed to operate from the 1st October, 1938, that being the commencing date of item 74 (c) (ii) which exempts uniforms sold to members of the Defence Forces. The original exemption has been interpreted as covering uniforms, &c, purchased by the Australian Army Nursing Service in the belief that the members of that service were, in fact, members of the Military Forces of the Commonwealth. It has now been discovered that technically this is not so. The amendment ratifies the interpretation which has been adopted. When all the adjustments proposed above have been effected, it is anticipated that the extra revenue to be obtained from sales tax in the current financial year will amount to £1,900,000. For a full year the amount will be £3,300,000. I trust that honorable members willnot regard the present as a suitable opportunity to press claims for exemption for particular goods, but will, on the contrary, await the time when our commitments for the war effort have become less pressing. For the convenience of honorable members in their consideration of this measure, I have had prepared a statement showing, in much greater detail than has been possible in this speech, the effect of the proposed changes. Because of the length of the statement, it hasnot been considered necessary to repeat the particulars of items making up the existing 5 per cent. and 15 per cent. schedules of the Sales Tax (Exemptions and Classifications) Act 1935-1940. A study of the statement in conjunction with that act will give honorable members a clear picture of the details of the proposals. Debate (on motion by Mr.Fadden) adjourned. {: .page-start } page 47 {:#debate-38} ### INCOME TAX ASSESSMENT BILL 1941 Motion (by **Mr. Chifley)** - *by leave -* agreed to - >That he have leave to Bring in a hill for an act to amend the Income Tax Assessment Act 1930-1940. Bill brought up, and read a first time. {:#subdebate-38-0} #### Second Reading {: #subdebate-38-0-s0 .speaker-A48} ##### Mr CHIFLEY:
Treasurer · Macquarie · ALP -- *by leave* - I move - >That the bill be now read a second time. The principal features of this bill have been outlined by me earlier in the course of my budget speech. The measure represents the results of the Government's review of the Income Tax Assessment Act in ite endeavour to place the burden of income tax evenly on the shoulders of the whole community, chiefly by correcting evasion of the tax and by removing concessions that have no justification at the present time. The principal amendment effected by the bill is that which discontinues the exemption hitherto allowed to resident shareholders on dividends paid by companies out of exempt ex-Aus tralian profits. In general, the practice of exempting shareholders on dividends paid out of exempt profits of the company is based on the theory that the profits of the company are the profits of the shareholders. English cases decided in recent years do not support this theory and, largely influenced by those judgments, the Commonwealth discarded the theory last year by the abolition of the rebate of tax formerly allowed on dividends included in the taxable income of the shareholder. On this subject, the Royal Commission on Taxation, 1932-34, observed, at paragraph 90 of its report - >Income may be exempt in the hands of the company receiving it, but when that income is merged" in the general pool of profits of the company and paid out as a dividend to a shareholder, it should nut retain its exempt character. This is the practice in Great Britain, Canada and the United States of America, and there appears to be no sound reason why it should not be adopted in Australia. Apart from the foregoing considerations, the existing rebates give rise to anomalies as between shareholders, some of whom are required to pay tax on the whole of the dividends they receive, while others enjoy total or partial freedom from the tax. It is, therefore, proposed to bring within the taxable field the dividends paid by companies out of their exempt ex-Australian profits, and to apply the same principle to dividends paid by companies out of profits arising from the sale, or compulsory resumption for public purposes, of capital assets of the company. The Parliament will be asked to repeal section 45 of the principal act. That section provides that any portion of the Commonwealth loan interest contained in a dividend shall be free of income tax to the same extent as that interest itself is in the hands of the recipient company. When the law was being amended in 1932 to grant the concession, it was stated that the amendment was the logical extension of section 20 of the Commonwealth Debt Conversion Act, which would be partly nullified if the concession were not extended to shareholders. As was stated by the Royal Commission on Taxation, 1932-34, which considered the subject, an undertaking was given in 1931 to persons who agreed to convert their loans, firstly, that the interest on Commonwealth loans which, by the terms of the prospectus, had been issued free of tax, should continue to be free of tax during the balance of the period for which they were issued, and, secondly, that in respect of loans converted, the rate of tax payable in any subsequent year should not exceed the rate of tax payable in 1930. These undertakings did not extend to dividends paid out of such interest. The Government is in complete accord with the royal commission's view that the concession applies only to the interest in the hands of the company which receives the interest as such, and that there is no justification whatever for the acceptance of the proposition that the concession should be extended still further and carried as far as the dividend paid out of that interest. The result is that the company receives a concession in that it pays only ls. 4d. on the interest instead of the proposed ordinary rate of 3s., and the shareholder pays the rate applying in 1930-31, instead of the current rate of tax which is considerably higher than the rates operating in that year. Moreover, the High Court of Australia has decided that income received by a company loses its identity as such when paid away in the form of a dividend to its shareholders. Whatever view a previous Government may have held on this matter, the present Government has no hesitation in limiting the concession to the company receiving the interest. Shareholders will accordingly be assessed on their dividends at the ordinary rate applicable to dividend income. The law will now revert to the position that existed when the loans were converted in 1931. It is also proposed in the bill that the liability of husbands and wives, living together, shall be based on the aggregation of their separate taxable incomes. This proposal is made for two main reasons - first, additional revenue will be raised with little extra burden or hardship, as the combined incomes are available to meet the domestic needs of the parties; and secondly, the avoidance of income tax by inter-spouse transfers of incomeproducing property will be prevented. A provision of this nature is not new to taxation law, as the principle has been in operation in the United Kingdom for over 20 years, and more recently it has been applied in Hew Zealand. For Commonwealth purposes, it is considered that the liability to income tax of husbands and wives, living together, can best be achieved by applying to the separate taxable incomes of each, the rate of tax appropriate to the aggregation of those taxable incomes. On this basis the allowance of the statutory exemption will eliminate those cases where little or no revenue is involved, and each of the parties will continue to enjoy those other deductions to which he or she is at present entitled. The general principle is to be commended as one that contributes to the equitable distribution of the tax burden as between families where the whole of the income is derived by one spouse, as compared with families where the income i3 divided between husband and wife. The bill provides for the discontinuance of the concessional allowance for children, in respect of whom the parent is entitled to the child endowment benefit. Honorable members will recollect that when the child endowment scheme was introduced, it was clearly understood that the scheme was to be financed in part by the income tax revenue that would arise from the disallowance of the concession for children in respect of whom child endowment was payable. This arrangement is now being implemented. The amendment will not involve the disallowance of the deduction in respect of children who reached sixteen between the 1st July, 1940, and the 30th June, 1941- that is, children in respect of whom no child endowment is payable. The Government also realizes that there is an equitable claim for an allowance for children becoming sixteen during this present year - that is, children in respect of whom child endowment for a full year is not payable. It is proposed by the amendment to grant a proportionate part of the deduction of £50 according to the length of time during 1941-42 that the endowment will not be payable in respect of the child. For example, in respect of a child reaching sixteen on the 30th September, 1941, the parent will receive three-quarters of the £50 allowance, whilst in the case of a child who will become sixteen on the 31st March, 1942, the allowance would be one-quarter of the £50 deduction. This concession will be applicable in assessments for this financial year only. It is not proposed that it be continued beyond this year. The bill removes from the principal aci the deduction for calls to mining and afforestation companies. This proposal implements another recommendation of the royal commission of 1932-34. These calls represent outgoings of a capital nature and, in principle, should not be taken into account in determining the income tax liability of the shareholder. Calls mainly are paid to gold-mining companies operating in Australia and New Guinea. The act already exempts the profits of these companies and the dividends paid out of those profits. There is in the Government's view no justification for a further concession to shareholders in these companies of the allowance of capital contributed in the form of calls. So far as other mining companies are concerned the income tax law contains special provisions for the recoupment from income of capital expenditure in plant and development of the mining property, and there is no persuasive argument to support the view that investors in this class of company should also receive a tax concession in respect of the capital which they contribute to the company by way of calls. The income of trusts for children, while minor and unmarried, is also the subject of a special provision in the bill. The effect on revenue of the creation of trusts and settlements is that the settlor avoids liability to tax on income which is applied in meeting what is really the responsibility of the settlor for the maintenance of his children. It is proposed that the trustee shall be required to pay the additional tax that the settlor would be liable to pay if he had retained the settled property. Though this proposal was not an actual recommendation in the report of the 1932-34 royal commission, it was a recommendation of the Taxation Commissioners in 1935 in association and in collaboration with the royal commission, and the members of the royal commission unanimously supported the recommendation. This recommendation was further considered and supported by a conference of Commonwealth and State Ministers convened to consider the proposals of the royal commission in the interests of uniformity of Commonwealth and State income tax law. A provision is contained in the bill to remove the exemption of income derived in the lifetime of a deceased person, from the 1st July to the date of his death, if the estate is liable to Commonwealth estate duty. The argument advanced in favour of the exemption is that the income can be presumed to have been included in the net dutiable value of the estate, and the exemption, therefore, prevents double taxation. This argument overlooks the fact that income will have accrued due to a deceased taxpayer up to his death and that it should be taxed as income. The fact that it is subject to estate duty as part of the deceased's estate because, in the hands of the trustee, it is corpus, does not alter the original character of the revenue at the time it accrued as income to the benefit of the deceased person. Generally speaking, all corpus is but the aggregation of savings of income of the deceased taxpayer or of some other person. A further objection to the exemption is that it confers unequal advantages on the estates of persons, dependent on the date of death and the amount of the income. The withdrawal of the exemption is a further step in the direction of uniformity as the law of none of the States allows the exemption. The proposal received the endorsement of the Commonwealth and State Ministers in 1935. Further, the bill brings into the assessable field the income of a deceased person which had accrued due to him prior to his death, but which is 'received by his trustee. The cases to which thi8 provision will apply will be principally those of professional men, e.g., doctors, solicitors, &c, as well as businesses conducted by individuals for the purpose of effecting subdivisional sales of land on the instalment principle, as well as persons engaged in the sale of furniture or motor cars on the hire-purchase system. In respect of deceased professional men, amounts for services rendered prior to death are collected by the trustee. In other businesses, profits contained in instalments, received by the trustee in respect of transactions entered into prior to death, will now be made liable to tax. These receipts are truly of an income character, and the Government considers that there is no reason why the personal representative of the deceased person should not be taxed on these receipts. The bill repeals section 160 of the principal act. That section provides for the allowance of a rebate of tax to an individual who carries on business alone or in partnership, if the rate of tax payable by him exceeds the company rate of tax, and the business from its nature and character requires the retention in the business of not less than 15 per cent, of the taxable income of each year. The object of the rebate was to give to the individual a concession of a somewhat similar nature to that formerly allowed to private companies, which enjoyed immunity from the additional tax on undistributed income to the amount of a quarter of the taxable income. This concession to private companies was withdrawn last year. Following the withdrawal from private companies of the tax concession formerly allowed to them, no justification now exists for the retention of the rebate to individuals, and it is accordingly being withdrawn. The matters which I have mentioned are the more important features of the bill. It is proposed to circulate to honorable members a memorandum which will contain an explanation of each clause in the bill. In these circumstances it is unnecessary for me at this stage to give the Blouse a detailed explanation of each clause. Any matters upon which honorable members desire information can be explained during the committee stages. Debate (on motion by **Mr. Fadden)** adjourned. {: .page-start } page 51 {:#debate-39} ### WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1941 Motion (by **Mr. Chifley)** - *by leave -* agreed to - >That he have leave to bringin a bill for an act to amend the War-time (Company) Tax Assessment Act 1940. Bill brought up, and read a first time. Secondreading. {: #debate-39-s0 .speaker-A48} ##### Mr CHIFLEY:
Treasurer · Macquarie · ALP -- *by leave* - I move - >That the bill be now read a second time. The object of the bill is to amend the War-time (Company) Tax Assessment Act 1940. The amendments, with one exception, are due directly to the Governments' proposal to reduce the statutory percentage to 4 per cent. At the present time, only those (public companies, the taxable profits of which exceed 8 per cent. of the capital employed, are liable to pay war-time company tax. It is felt by the Government, after a careful survey of the whole field of taxation, that many companies which are not liable to pay wartime company tax because their taxable profits are less than 8 per cent. of the capital employed, as well as those companies which are now liable to pay the tax, should be required to make a greater contribution to the war effort. If the Government's proposal meets with the approval of Parliament, all public companies, the taxable profits of which exceed 4 per cent. of the capital employed, will be liable to pay war-time company tax, or the super tax of1s. in the £1 on taxable income in excess of £5,000, whichever is the greater. Although 4 per cent. may be regarded by some members as a narrow margin of profit, it should be remembered that the rate of tax is graduated. The tax, therefore, falls less severely on companies with a small percentage of profit than on those companies whose profits represent a high percentage on the capital employed. In fixing the lower statutory percentage, due regard has been given to the principle of ability to pay. Apart from the increased revenue which it is expected will result from the reduction of the statutory percentage, the reduction is important in that it will materially assist the Government in its policy of preventing profiteering during war-time. Under the proposal, the statutory percentage of profits on capital employed below which profits are not taxable will in future be 4 per cent. instead of 8 per cent. The first 1 per cent. above the statutory percentage will pay 6 per cent. instead of 4 per cent.; the next 1 per cent, will pay an additional 6 per cent, instead of an additional 4 per cent. ; and so on by steps of 6 per cent, instead of 4 per cent., until the maximum rate is reached at78 per cent on profits in excess of 16 per cent. In the present scale the maximum is reached at 60 per cent. on profits in excess of 22 per cent. The effect of this will be that a company making profits of 10 per cent. on capital employed will pay over 12 per cent. of its profits in war-time company tax instead of a negligible amount; if profits are 16 per cent., it will pay 29 per cent. of its profits in this tax instead of 9 per cent.; if profits are 30 per cent., it will pay rather more than half of its profits in this tax, instead of 30 per cent. Profits are in all cases tobe understood as net profits after payment of other company taxation. Under the existing law, provision is made for a minimum capital employed of £12,500 ; that is to say, where the capital of a company is less than that amount, or a company fails to supply the commissioner with the information required to enable the capital employed to be ascertained, £12,500 shall be deemed to be the capital employed for all of the purposes of the act. The object of this provision is to ensure a minimum percentage standard of £1,000, that is, 8 per cent. of £12,500. The Government is desirous of retaining the principle of a minimum percentage standard of £1,000, and in order to do this it is necessary to increase the minimum capital from £12,500 to £25,000. The bill provides the machinery to give effect to this increase. The War-time (Company) Tax Assessment Act 1940 provides that a board of referees shall inquire into and report to the Minister on every claim referred to it by the Commissioner, as to whether there is some unavoidable condition associated with a particular class of business which makes it just that a greater statutory percentage than that specified in section 20 of the act should be prescribed in respect of that class of business. Where the board is satisfied that the unavoidable condition exists it is required to make a recommendation as to the greater statutory percentage which it considers just. Any greater statutory percentage allowed in accordance with the board's recommendation is prescribed by regulation. The board of referees has inquired into and reported upon several claims. The opinions expressed by the board as a result of its inquiry into those claims would probably not represent the conclusions which the board would have reached if the statutory percentage had been 4 per cent, instead of S per cent., but there is no authority, in the present law to enable the board to review the claims. Provision is made in the bill requiring the board to review all claims which have been inquired into ind reported upon. If the board finds it necessary to make any recommendations or to modify its previous recommendations as a result of its revision, such recommendations will not apply to the period in respect of which the statutory percentage of S per cent, operated. The bill amends the definition of " income tax " so that the super tax of ls. in the £1 on the taxable income of a company shall not be allowed as a deduction in arriving at the taxable profit of a company. The taxable profit of a company, for war-time company tax purposes, is ascertained by making certain deductions from the taxable income as assessed for income tax purposes. One of these deductions is the income tax payable in respect of the taxable income. " Income tax " is defined as the income tax imposed as such by any act. It was not intended that " super tax ", which is alternative to " war-time company tax ", should be allowed as a deduction in arriving at the taxable profit, as provision is contained in the act whereby the " super tax " is deducted from the war-time company tax itself. In a recent majority decision on a war-time company tax case, the Taxation Board of Review held that the super tax was an income tax imposed as such, and that the appellant was entitled to a deduction of the super tax in ascertaining the taxable profit, notwithstanding the provision in the act for the deduction of "super tax" from the war-time company tax assessed. The effect of the board's decision is to allow a double deduction of super tax; once in arriving at the taxable profit and again as a deduction from the amount of wartime company tax. It is important that the law be amended to prevent the allowance of the double deduction. It is proposed to make the amendment retrospective, but it will not deprive the company in whose favour the decision of the Taxation Board of Review was given of the benefit of that decision. Debate (on motion by **Sir Frederick** Stewart) adjourned. {: .page-start } page 52 {:#debate-40} ### GIFT DUTY ASSESSMENT BILL 1941 Motion (by **Mr. Chifley)** - *by leave -* agreed to - >That he have leave to bring in a bill for an Act to provide for the imposition, assessment and collection of a duty on gifts. Bill brought up, and read a first time. {:#subdebate-40-0} #### Second Reading {: #subdebate-40-0-s0 .speaker-A48} ##### Mr CHIFLEY:
Treasurer · Macquarie · ALP -- *by leave* - I move - >That the bill be now read a second time. In introducing this bill I desire to explain that the heavy burden placed upon taxpayers of all classes by the necessity for financing the country's war effortwill very greatly increase the natural tendency of taxpayers to lighten the burden of taxation by so arranging their affairs as to spread that burden as widely as possible. All revenue authorities have had to contend with various devices adopted by taxpayers to avoid taxation by legal means. These means usually take the form of spreading assets over the members of families, but at the same time a measure' of full control and the enjoyment of the full benefit of ownership of such assets is usually retained. This procedure is carried out by such methods as settlements in favour of relatives, in respect of which the settlor makes himself the trustee; the formation of companies and the spreading of the shares therein over the members of the family, and, in some cases, other persons who act as dummies; and by the straight-out gift of assets to relatives in anticipation of bequeathing such assets to these relatives by will. Income tax, land tax and estate duty have all been avoided by such means, and there is little doubt in my mind that such practices will tend to increase very considerably under the present heavy burden of taxation, unless some action be taken which will at. all events tend to provide for some payment to the revenue upon such dispositions, if not to deter the persons concerned from adopting such practices. The purpose of this bill is to provide such a deterrent or for such a payment. The purpose of a gift duty act is, therefore, twofold, namely, revenue protection unci revenue production. If the former were the main purpose it would be necessary to make the duty heavy enough to provide a serious deterrent to the making of gifts. In that case of course little or no immediate revenue would result. If. however, the purpose is revenue production, the duty should not. be a prohibitive one. The question of a gift duty was examined bv the Boya] Commission on Taxation which sat in 1932-34, but I understand the subject then was not of serious importance in regard to the question into which the commission was asked to inquire. The matter is mentioned in two paragraphs of the report of the royal commission, namely, paragraphs 1090 and 1091, and the recommendation made was against the adoption of this form of taxation as a corollary to death duty legislation. However, circumstances have altered considerably since the commission's report was made, and I do not chink that the recommendation can carry as much weight to-day as it did then. Inquiries were made in Queensland in regard to the operation of the act there, and the opinion was expressed that the legislation was achieving the purpose for which it was designed. It was both producing revenue and protecting the Queensland death and succession duties. The revenue derived by the Queensland Government from this source is something over £20,000 per annum. Commonwealth revenue for a full veur is estimated to be in the region of £500,000, and for the balance of the current year about £250,000. The bill provides that all gifts made within a period of five years shall be taken into account for the purpose of fixing the rate of duty, but that if the aggregate value of such gifts does not exceed £500 no duty will be payable. Exemption is also provided for small gifts, and gifts to the donor's wife or children for maintenance or education. Retiring allowances, pensions and gratuities to employees, gifts to public charitable, religious, scientific and educational institutions, and for patriotic purposes :ire also exempt. The bill is designed to apply, not only to gifts of property transferable by instrument, but also to gifts of money or negotiable securities of all kinds. It provides for the lodgment of returns by the donor and the issue of an assessment by the commissioner. The donee, or the trustee in the case of a settlement, will be liable for the payment of the duty in the event of failure to recover the duty from the donor. There will bo a. right of objection to the assessment to bo issued, and if dissatisfied with the decision upon the objection the donor can appeal to the Valuation Board that *has been set* up under the Land Tax Assessment, Act in regard to the valuation of real property comprised in any gift. On this and any other question he can also appeal to the courts. The bill also contains a provision which empowers the commissioner at his discretion to value shares in private companies on the basis of the sum the holder would receive if the company were voluntarily wound up at the date when the gift was made. This provision is copied from Queensland and New South Wales legislation, and prevents valuations from being undermined by restrictive provisions embodied in the articles of association. As the matter of gift duty is very closely related to estate duty, the Government has decided to adopt the same schedule of rates as that which applies for estate duty purposes. The rates commence at 3 per cent, and reach a maximum of approximately 27 per cent., where the aggregate value of the gifts made within the five-year period reaches £500,000. This aspect of the matter was dealt with when the resolution for the imposition of the rates was introduced into the House earlier in the day. I commend the bill to honorable members. Debate (on motion by **Mr. Fadden)** adjourned. {: .page-start } page 54 {:#debate-41} ### STATES GRANTS BILL 1941 Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : Motion (by **Mr. Chifley)** agreed to - >That it is expedient that an appropriation of revenue be made for the, purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania. Resolution reported and - *by leave- -* adopted. *Ordered -* >That **Mr. Chifley** and **Dr. Evatt** do prepare and bring in a bill to carry out the foregoing resolution. Bill brought up by **Mr. Chifley,** and read a first time. {:#subdebate-41-0} #### Second Reading {: #subdebate-41-0-s0 .speaker-A48} ##### Mr CHIFLEY:
Treasurer · Macquarie · ALP -- *by leave* - I. move - >That the bill be now road a second time. The purpose of this bill is to implement the recommendations contained in the eighth report of the Commonwealth Grants Commission, which was tabled in the House on the 17th September last, and to provide for the payment during the current financial year of special giants totalling £2,300,000 to the States of South Australia, Western Australia and Tasmania. As honorable members tire aware, the commission was set up in 19313 to inquire into and report on applications from States for financial assistance under section 96 of the Constitution. The recommendations of the commission for the last seven years have been approved by the Commonwealth Government and adopted by Parliament. The grants which the commission has recommended for the year 1941-42 compare with those .paid during 1940-41 as follows : - In assessing the grants the commission has followed the same principles as in the past, viz., the grant is determined by " the amount of help found necessary to make it possible for that State, by reasonable effort, to function at a standard not appreciably below that of other States." It should, however, be pointed out that, on this basis, the commission's assessment for South Australia this year is £1,400,000- that is, £250,000 more than the commission recommends should actually be paid. This variation of the assessment is due to special factors which I. shall explain. It is very important at the outset to remember that the grants recommended are largely based on the budgetary results df the States for 1939-40, the latest year for which complete information was available to the commission when it conducted its investigations. The commission also takes into consideration special conditions obtaining in years following that on which the grant is assessed. Thus, in 1937-38 the grant assessed for Western Australia on the budgetary results of 1935-36 was £439,000, but a special repayable advance of £136,000 was added in order to assist the State over a difficult period caused by severe drought. This advance of £136,000 was recovered from Western Australia in 1939-40, when the assessment was £731,000 and the amount actually paid was £595,000. This year the commission has recommended that this procedure be reversed in the case of South Australia. The grant assessed for that State is £1,400,000, but, for certain reasons which I shall give later, the commission considered that this amount would bc more than adequate to meet the needs of South Australia in 1941-42. Consequently the commission has recommended that the grant to be paid this year shall be £1,150,000, and that £250,000 shall be withheld to be paid to South Australia in the succeeding year, when it may be appropriate to the needs of the State to pay an amount greater than the assessment. The reason for this apparent reduction of the grant to South Australia is explained in the eighth report as follows: - >The grant was assessed on the basis of the relative financial position of the States in 1933-40, and it will, if approved, be paid in 1941-42. There is clear evidence of improving conditions in South Australia; and, with the growing economic stimulus created by wai industries and war expenditure, it is likely that in the near future the finances of the State will further improve. Thus the grant indicated by our calculations may be in excess of actual needs in 1941-42 . . . We realize that it is unwise to forecast in these uncertain times, but it is probable that the improved situation in South Australia in 1941-42 will lead, under our method of assessment, to *a* reduced grant in 1942-43. We have considered various methods by which the South Australian grant of £1.400.000 might fairly be adjusted to meet the special circumstances nf the State. One method considered was that any surplus in 1941-42 arising from the increased grant should be applied to the reduction of past revenue deficits. Another course is to defer payment of a part of the grant. On the whole we believe this latter method would best serve the interests of South Australia, and we accordingly recommend that payment of £250,000 be deferred by the Commonwealth until the succeeding year, thus reducing the payment for 1941-42 to £1,150,000. For the information of honorable members, I submit the following statement showing the trend of grants in recent years - I shall now give honorable members a brief explanation of the main reasons for the difference between the grants for 1940- 41 and those recommended for 1941- 42. It is desirable that these differences should be clearly understood. The grant assessed for South Australia was £1,400,000, but, as I have explained, the commission recommended that £250,000 of this amount should be withheld. The amount assessed is £400,000 greater than the grant paid in 1940-41. This is due to a combination of factors. There was a considerable decline of the relative taxable capacity of the State because of drought and low prices for wool and wheat in the income year 1938-39. At the same time, collections of State taxes increased in 1939-40, as a result partly of the imposition of higher rates of income tax, and partly of an abnormally large increase of estate duty revenue, which fluctuates considerably from year to year. The severity of taxation for 1939-40 was, therefore, relatively higher for South Australia, and, as ? result, the adjustment on account of relative severity of taxation was £518,000 more favorable than for the previous year. The grant assessed for Western Australia was £630,000, which is £20,000 less than that paid in 1940-41. This reduction was due to a combination of factors. There was an increase of £117,000 in the adjustment on account of the relative deficit of the State for 1939-40, but this was almost exactly offset by a decrease of £119,000 in the adjustment for severity of taxation, due largely to an improvement of the relative taxable capacity of Western Australia. It should, however, be pointed out that, despite this decrease, the adjustment for severity of State taxation in Western Australia was £150,000 in favour of that State. A new correction appears this year under the head "Road Debt Charges and it is this correction which is responsible for the reduction of the grant recommended. The commission believes that this adjustment is reasonable, and explains that it has been made because of the failure of Western Australia to bring its road finances reasonably into line with those of other States, by making provision for meeting at least some portion of the annual interest and sinking fund payments on road debt from the proceeds of motor taxation. In this connexion it is appropriate to point out that in 1939-40 and 1940-41 the Government of Western Australia introduced legislation designed to bring its road finances more into line with those of other States, but on each occasion the measure was rejected by the Legislative Council. This action resulted in considerable loss to the State budget. The commission considers that, in fairness to other States which use a large proportion of motor taxation to pay annual charges on road debt, this factor should not be ignored in arriving at a final assessment. The grant recommended to Tasmania is £120,000 higher than last year. This increase is due mainly to the fact that the Tasmanian deficit in 1939-40, the year on which the calculations are based, was 6s. lid. a head higher than in 1938-39, while the average deficit *per capita* in the non-claimant or " standard " States fell by 7s. 2d. Because of this absolute and relative increase of Tasmania's deficit, the grant was favorably affected to the extent of £169.000. An adjustment was also made in the case of Tasmania because the road finances of the State were out of line with other States. The eighth report indicates that the special problems associated with roads in Tasmania were taken into consideration in making the correction, lt may seem anomalous to honorable members that the special grant for South Australia should be increased in a year when the financial position of that State is showing considerable improvement. It must be remembered, however, that the grants recommended for 1941-42 were based, not on the relative financial position of the States in 1940-41, but on the relative financial position of the States in 1.939-40, the latest year for which complete information was available to the commission when it conducted its investigations. In paragraphs 67 to 70 and paragraph 192, the eighth report emphasizes that there is no escape from this procedure if grants are to be assessed on actual budgetary results. The commission believes that any attempt to assess grants on budget estimates would lead to grave error and dissatisfaction. The commission's experience extending over eight years has shown that estimated figures are very unreliable. The commission a Iso expresses the view that, so long as its methods are consistently applied from year to year, any apparent injustice in any particular year will be adjusted within a short period. Any possible error is not cumulative. The eighth report points out also that the commission does not adhere rigidly to the grants indicated by its basic calculations. In special circumstances, such as I have already explained, it adjusts the calculated figures so that the grants finally recommended may be in reasonable harmony with current financial needs. I understand that the improved position of South Australia in 1940-41, arising from war expenditure and other causes, is now being investigated by the commission and will be fully taken into account in the grant recommended for 1942-43. The commission has commented as follows on the fact that the total of the grants recommended for 1941-42 is above tha t paid in recent years : - >Owing to the war and to the very large and increasing obligations of the Commonwealth, it may bc suggested that special grants should not be increased in a time of national emergency. The commission fully appreciates this point of view; but, at the same time, it must bear in mind the function it has to perform in preserving a reasonable financial balance among the States. It must always he remembered that the special grant is the basic grant designed to adjust the financial inferiority of the claimant States and to enable these States effectively to discharge their functions in the federation. If we recommended grants below the amounts justified by a careful investigation of the relative financial position of the States, it would be tantamount, as we stated in our seventh report, to placing a discriminatory burden on the claimant States in a time of difficulty. If the pressure of war finance requires some reduction in the amount of assistance to the States it should, we believe, be applied equitably to all States. As the commission deals only with applications from the claimant States for special grants, this is not a matter on which it has power to make any recommendation. There is considerable evidence that the work of the commission is thorough and impartial, and that all matters affecting the " financial needs " of the claimant States have been investigated. The Government, therefore, believes that the amounts recommended by the commission wall adequately meet the needs of the claimant States; and, consequently, as in past years, the Government has decided to accept the recommendation of the commission. Debate (on motion by **Mr. Anthony)** adjourned. {: .page-start } page 57 {:#debate-42} ### AUSTRALIAN SOLDIERS' REPATRIATION BILL 1941 Motion (by **Mr. Frost)** - *by leave -* agreed to - >Thathe have leave to bring in a bill for an act to amend the Australian Soldiers' Repatriation Act1920-1940. Bill brought up, and read a first time. {:#subdebate-42-0} #### Second Reading {: #subdebate-42-0-s0 .speaker-JXL} ##### Mr FROST:
Minister for Repatriation · Franklin · ALP -- *by leave* - I move - >That the bill be now read a second time. This bill is to amend the Australian Soldiers' Repatriation Act, mainly in three directions, namely, (1) To ensure that the maximum rates of service pension for members of the Forces, and other provisions regarding service pensions, conform with the proposed amendments for invalid and old-age pensions. (2) To provide that veterans of the South African war be admitted to the benefits of service pensions, and medicaltreatment for those suffering from pulmonary tuberculosis. (3) To give statutory authority for certain payments sanctioned by previous Governments. Service pensions, as honorable members are aware, are really a form of invalid or old-age pensions for members of the Forces, and are granted on the grounds of age, of being permanently unemployable, or suffering from pulmonary tuberculosis. The present rate for members eligible on the grounds of age, and for unmarried members eligible on either of the grounds, is 21s. a week. It is provided in clause 3 of the bill that the rate shall be increased by 2s. 6d. a week to give a maximum rate of 23s. 6d. a week. Of course, in the bill the rates are shown as per fortnight. In respect of married members who are permanently unemployable or suffering from pulmonary tuberculosis, and whose wives are eligible for service pension, the present rate is18s. a week. Clause 4 of the bill provides that the rate for such members shall be increased by 5s. a week giving a maximum rate of 23s. a week. It will be seen that the increase is in that portion of the pension payable to the member. It would not be practicable to increase the rate for the wife, as the present rate of 18s. a week is already equal to that payable to the wife of a member receiving a war pension for total incapacity attributable to war service. Clause 5 omits sub-section 2 of section 45ah of the act, and thus provides that where accumulated property is held, the deduction from pension shall apply only in respect of property in excess of £50. The existing exemption in respect of an individual pensioner is £50, hut in the case of a husband and wife, where both are pensioners, is £25 for each. In future the exemption will be £50 for each. Clause 6 is to effect three amendments in respect of the section of the act relating to the rate of pension payable while a service pensioner is in an institution. It is now made clear that the provision applies only where the pensioner is maintained at the public expense. Previously the commission necessarily had to reduce the pension to the lower rate, even where the pensioner entered, say, a private hospital, or an intermediate hospital. Also, in future, where a service pensioner is admitted to a public institution, reduction of pension will not operate until the twenty-ninth day after admission. This will place service pensions on the same footing as invalid or old-age pensions where the pensioner is admitted to hospital. It is very desirable that the hospital rate of pension should agree in respect of both service pension and invalid or old-age pension. At the inception of service pensions, they did agree, but whilst the 1936 and 1937 increases of invalid pensions were apportioned between the pensioner and the institution, the whole of the service pension increase on each occasion went to the pensioner, as up to that time there was no arrangement for payment of a portion of the service pension to institutions. Such an arrangement was entered into in 193S, and the increase of service pension granted in January, 1941, viz., ls. a week, was apportioned between the pensioner and the institution. 6d. a week to each. It will be seen, therefore, that service pensioners have enjoyed, since October, 1936, a hospital rate higher than that paid to invalid pensioners; for most of the period the advantage was ls. a week. The present rates are - invalid or old-age pension, 6s. 9d. a week; service pension 7s. 6d. a week. The proposed new rate for invalid pension is 7s. 9d. a week, and the amendment will bring the rates into uniformity, and keep them so for the future. Clause 7 inserts a new section in the act, whereby the provisions of service pensions are extended to veterans of the South African War. This had been decided upon by the previous Government. The present Government concurs in the decision, and is pleased to give effect to it. The extension will operate from the 1st November, and will, no doubt, be the means of affording comfort to those veterans in need of such a pension. Honorable members will note that Australians who served in South Africa with the forces of Great Britain or another dominion are also eligible to apply. Medical treatment for members of the forces suffering from pulmonary tuberculosis, even though not due to the member's service, is a concomitant of the service pension scheme, and this benefit will be available for the veterans who should be so unfortunate as to be afflicted with the disability. The benefit will be available, irrespective of whether or not the member is to receive a service pension. The provision is covered by one of the amendments to section 60 of the act, effected by clause 8 of the bill. The other amendments to section 60 do not confer any ne»v benefit; they are merely to give statutory authority for benefits already in force. They may be regarded as machinery amendments to facilitate administrative accounting for the expenditure. Debate (on motion by **Mr. Anthony)** adjourned. *Sitting suspended from 6.17 to 7.4-5 p.m.* {: .page-start } page 58 {:#debate-43} ### INVALID AND OLD-AGE PENSIONS BILL 1941 Motion (by **Mr. Holloway)** - *by leave* -agreed to - >That he have leave to bring in a bill for an act to amend the Invalid and Old-age Pensions Act 1908-1940 and for other purposes. Bill brought up, and read a first time. {:#subdebate-43-0} #### Second Reading {: #subdebate-43-0-s0 .speaker-KHL} ##### Mr HOLLOWAY:
Minister for Health · Melbourne PortsMinister for Social Services · ALP -- *by leave* - I move - >That the bill be now read a second time. The introduction of a measure designed to ameliorate the circumstances of a most deserving section of the community not only affords me very great satisfaction, but .also, I feel sure, will give considerable pleasure to my predecessor in this office -and also to all honorable members. The principal object of this bill is to give effect to the Government's decision, announced by my colleague, the Treasurer **(Mr. Chifley),** in his budget speech today, to increase, as from the 11th December next, the maximum rate of invalid and old-age pensions from the present rate of £1 ls. 6d. a week to a new maximum of £1 3s. 6d. a week - the highest rate paid since the inception of our invalid and old-age pensions system. The Government is re-examining the resources at its disposal, and, as has been foreshadowed by tie Treasurer's intimation regarding the presentation of a supplementary budget early in the New Year, intends then to introduce a bill honouring its election pledge to raise the pension level to £1 5s. a week. The new maximum includes a costofliving adjustment of ls. a week, 6d. of which has been made available by the Government one month earlier than would normally have been the ease. Whilst retaining the principle of associating the rate of pension with the cost-of-living index, the Government proposes an important amendment to ensure that in the event of a fall in the cost of living, the maximum rate of pension will not be reduced below £1 2s. 6d. a week or any other figure without parliamentary approval. At present, it is possible to reduce the rate to £1 ls. a week. The price-index number for September, 1941, was 1009. If this figure reaches 1028, a further 6d. a week will be payable. The hill preserves the existing margins of permissible income, namely, 12s. 6d. a week in the case of pensioners other than permanently blind persons, and £3 7s. 6d. a week in the case of blind pensioners. In order, however, to clarify the position regarding permissible income, it is proposed to make certain amendments which will indicate clearly that a pensioner may possess income up to these amounts without his pension being affected. The present provision of the act relating to this matter does not indicate the permissible income as such, but merely states the limit of income together with the pension. Consequently, it is necessary to vary this limit with every variation of the pension rate. The new provision will avoid the necessity for these variations without in any way affecting the present permissible income, which will be guided by the figures and not by verbiage. The bill makes provision for pensioner- inmates of benevolent asylums and hospitals to benefit from the general increase of the pension rate. Following the practice adopted on previous occasions, the increase of 2s. a week will be divided equally between the pensioner and the institution. The new institutional rate of 7s. 9d. a week will include a costofliving adjustment of 6d. and will be the highest amount which has ever been paid to pensioners in institutions. Possibly some honorable members may consider that pensioner-inmates of institutions should receive the full increase of 2s. a week. I think, however, that it will be admitted that the payments made to pensioners in institutions are in a somewhat different category from those made to persons outside of institutions who have to meet the full cost of their maintenance out of their pension money. 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 more in the nature, although not altogether, of pocket money which enables the purchase of, say, tobacco and other comforts not always provided by the institution. The present cost of maintaining inmates of institutions averages about fi 2s. 6d. a week in the case of institutions in metropolitan areas, but is much higher in the case of hospitals and some country institutions. It is of interest to -mention that in 1920 the institutional pension of 2s. a week represented only 13 per cent, of the full pension. In 1925, when the pension was £1 a week, the institutional rate of 4s. a week represented 20 per cent, of the amount ; and in 1937, when the full pension was still £1 a week, the institutional rate represented 30 per cent, of the full amount. The amount at present being paid, 6s. 9d. a week, represents 31 per cent, of the full pension, whilst the new institutional rate of 7s. 9d. a week will represent about one-third of the pension of £1 3s. 6d. a week. The act at present provides for pensioner-inmates to receive, at. the discretion of the Minister, up to half of the amount of any cost-of-living increase granted to pensioners outside. This provision, together with the costofliving variations, is being retained. The bill also makes provision for other concessions indicated by the Treasurer in the budget speech delivered to-day. One of the mo3t important of these is a liberalization of the conditions under which invalid pensions -are granted. The act at present provides that an invalid pension shall be granted only to a person who is permanently incapacitated and unable to work. This requirement has usually been interpreted as meaning total and permanent incapacity. There have been many cases in which this has involved hardship. All honorable members must have known of border-line cases which make an almost irresistible appeal to our sympathies. There are other doubtful cases to which the Administration wishes to extend benefits, but which are at present beyond the limits of the act. A. great many of these cases will now benefit by the provision made in this bill to enable an invalid pension to be granted to a claimant if the degree of his capacity for work does not exceed 15 per cent. The act, at present, debars from benefit Asiatics except those born in Australia and Indians born in British India. The bill removes the disqualification in the eases of Asiatics who are British subjects. This will include Asiatics who are British subjects either by birth or by naturalization. The class of Asiatics who will chiefly benefit from this concession are Syrians and Lebanese. Many members of these communities or their sons served with the Australian Forces in the last war, and 45 are at present members of the Commonwealth Forces overseas. {: .speaker-JLZ} ##### Mr Anthony: -- Will the Government consider making a similar provision in respect of South Sea Islanders? {: .speaker-KHL} ##### Mr HOLLOWAY: -- I have no doubt that many other classes of people will be considered in this connexion as time goes on. Under the present, act the property exemption of £50 for each pensioner is reduced to £25 each in cases where both husband and wife are pensioners. The Government considers that there is not sufficient justification for this reduction and the provision under which it is made is to be removed from the act. The result will be that where both husband and wife are pensioners each will receive the benefit of the property exemption of £50. Without either rhyme or reason the anomaly which this provision is intended to remedy has continued almost since the inception of our invalid and old-age pensions system, and I am glad that it is now to be overcome. There are quite a number of cases of pensioners who own encumbered property which they cannot sell except at considerable sacrifice, but the value of the equity in the property may cause a reduction of their rate of pension. Thu bill will remove this cause of hardship by giving the commissioner discretionary power to disregard the value of the equity possessed by the claimant or pensioner in such cases when assessing the net capital value of accumulated property. I point out that no specific amount is mentioned in the bill in this connexion, but the commissioner is given a discretionary power. The bill introduces a new provision with the object of encouraging invalid claimants or pensioners who are capable of undergoing suitable vocational training to do so in order that they may try to become self-supporting. The commissioner, after considering the age and mental and physical capacity of any invalid claimant or pensioner, and the facilities available for suitable vocational training or physical rehabilitation, may take appropriate stops either to grant or continue a pension in any individual case. For probably the last twenty years honorable members on both sides of the House have had the idea that something of this kind should be done. It has been generally felt that pensioners should be given the opportunity to rehabilitate themselves, as it were, and to again become self-supporting. The bill provides that steps to this end may now be taken and that the pensioner may continue to receive his pension during the period when he is endeavouring to discover whether it will, be practicable for him to earn his own living once more. It will be remembered that some time ago the honorable member for Hunter **(Mr. James)** submitted a motion in the House in relation to adequate maintenance with which honorable members agreed. It is unnecessary to amend the act to give effect to this provision, for it can be done by administrative procedure. I am glad to say that, the Government has decided to act in this connexion, and that the new arrangement will take effect from the 11th December next. {: .speaker-KV7} ##### Sir Frederick Stewart: -- That provision was also included in the Fadden budget. {: .speaker-KHL} ##### Mr HOLLOWAY: -- That is so. For the reasons I have given no mention is made in the bill of this important and fa r-reach] ug d determina ti on. {: .speaker-KJQ} ##### Mr James: -- Will this provision apply to old-age as well as to invalid pensions? {: .speaker-KHL} ##### Mr HOLLOWAY: -- It will not apply to old-age pensioners. For the future, it is intended to regard " adequate maintenance " as a family income sufficient to provide £2 10s. a week for each adult dependent member of the family, and half that amount for each child under sixteen years of age. Adequate maintenance is not defined in the act, but the standard to be followed has been laid down by successive governments, and upon the adoption of the budget the Government will authorize the administration to put the new standard into operation as from the 11th December, 1941. It is expected that this generous action will result in the admission of many claims which would have been disallowed under the present, standard. The- present number of invalid and old-age pensioners is a little over 335,000. They will all receive the full increase of 2s. a week at a cost of £1,743,000 per annum. The cost of the increase in respect of 5,450 institutional pensioners will be £28,000 per annum. The total addition to the annual liability as a result of the increases provided for in the bill will thus be £1,771,000. The cost of the increases for the present financial year will be £1,022,000, but this includes an amount of £225,000 which would have been the cost for 1941-42 of the increase of 6d. a week on the cost of living index from January, 1942. The cost of the other liberalizations which I have indicated is estimated at £245,500 for a full year. The cost for the remainder of the present year will be approximately £143,000. The total additional expenditure as a result of the increases and liberalizations is thus £2,016,500 per annum, the total cost for 1941-42 being £1,165,000. Taking also into account the estimated increase of the number of pensioners, the total estimated expenditure on invalid and old-age pensions during the current financial year is £19,S65,000, which is an increase of £2,499,000 as compared with the actual expenditure last year. Two other important phases of invalid and old-age pensions administration are at present receiving the serious attention of the Government, and it is sincerely hoped that in the near future further concessions will be embodied in the act. One of these is the extension of pension benefits to Australian aboriginals who are living under civilized conditions, or who are at least making a genuine endeavour to conform with what one might call the normal Australian standards. The experience which the department is now obtaining in administering child endowment to Australian aboriginals will be used as a basis for the extension to them of the benefits of the invalid and old-age pension. The second matter is the exemption from income of war pensions payable to dependants of soldiers when an assessment of invalid or old-age pension is made. Both of these matters are under the consideration of the department, and I hope that effect will be given to the proposals early next year. I commend the bill to honorable members as a worthy addition to our social legislation. Debate (on motion by **Sir Frederick** Stewart) adjourned. {: .page-start } page 61 {:#debate-44} ### DISCHARGE OF ORDERS OF THE DAY Motion (by **Mr. Forde)** - *by leave -* agreed to - >That the following Orders of the Day, Government Business, be discharged: - > >Patents. Trade Marks, Designs and Copyright' (War Powers) Bill 1941 - Second reading. > >Judiciary Bill 1941 - Second reading. > >International AfFairs - Survey of Latest Developments - Ministerial Statement, 1.7th September. 1941 - Resumption of debate upon the motion, " That the Paper be printed ". > >Tariff Board - Annual Report, 1940-41- Resumption of debate upon the motion, " That the Report be printed ". > >Recent Developments in International Affairs and Proposal that Prime Minister should visit London - Ministerial Statement - Resumption of debate upon the motion, " That the Paper be printed ". > >Newsprint Rationing - Ministerial Statement - Resumption of debate upon the motion, " That the Paper be printed ". > >Australian Broadcasting Commission Bill 1941 - Resumption of debate upon the motion, " That the Bill be now read a second time ". > >War Developments and International Affairs - Ministerial Statement - Resumption of debate upon the motion, " That the Paper be printed". > >Holdsworthy Detention Cam]) - Reports by Inspector-General of Administration - Resumption of debate upon the motion, ' That the Papers be printed ". > >Supply of Australian Foodstuffs to United Kingdom - Resumption of debate upon the motion. " That the Paper be printed ". > >Re-employment Problems - Ministerial Statement - Resumption of debate upon the motion, " That the Paper be printed ". {: .page-start } page 61 {:#debate-45} ### SPECIAL ADJOURNMENT Motion (by **Mr. Forde)** agreed to - >That the House, at its rising, adjourn until Wednesday next, the 5th .November, at 3 p.m. {: .page-start } page 61 {:#debate-46} ### PAPERS The following papers were presented : - >Canned Fruits Export Control Act - Fifteenth Annual Report of the Australian Canned Fruits Board, for year 1940-41, together with Statement by Minister regarding the operation of the Act. > >Commonwealth Bank Act - Treasurer's Statement of combined accounts of Commonwealth Bank and Commonwealth Savings Bank at 30th June,1941, together with certificate of the Auditor-General. > >Customs Act - Proclamation (dated 3rd October, 1941) prohibiting the Exportation (except under certain conditions) of Timber, viz.: - Logs, poles or piles; Timber, dressed or undressed; Railway sleepers; Veneers, rotary cut, but not including furniture veneers; Plywood made from rotary cut veneers. > >Dairy Produce Export Control Act - Sixteenth Annual Report of the Australian Dairy Produce Board, for year 1940-41, together with Statement by Minister regarding the operation of the Act. Defence Act - Royal Military College - Report for 1940. Judiciary Act - Rule of Court, dated 9th October, 1941. Lauds Acquisition Act - Land acquired - For Defence purposes - Boyup Brook, Western Australia. Busselton, Western Australia. Glenorchy, Tasmania. Muswellbrook, New South Wales. Nowra, New South Wales. Pearce, Western Australia. Point Cook, Victoria. Port Pirie, South Australia. Rooty Hill (Wallgrove), New South Wales. Sunshine, Victoria. Toowoomba, Queensland. Williamtown, New South Wales. For Postal purposes - Boisdale, Victoria. Glen Davis, New South Wales. Meat Export Control Act - Sixth Annual Report of the Australian Meat Board for year 1940-41, together with Statement by Minister regarding the operation of the Act. National Security Act - National Security (General) Regulations - Orders - Inventions and Designs (87). Regulations - Statutory Rules 1941, Nos. 239. Naval Defence Act - Regulations - Statutory Rules 1941, Nos. 238, 242. Papua Act - Ordinances - 1941 - No. 1- Supply 1941-1942. No. 2 - Customs Tariff. No. 3 - Prisons. No. 4 - Dentists Registration. No. 5 - Supplementary Appropriation 1940-1941. No.6 - Succession Duties. No. 7 - Appropriation 1941-1942. River Murray Waters Act - River Murray Commission - Report for year 1940-41. Science and Industry Research Act - Fifteenth Annual Report of Council foryear 1940-41. Wine Overseas Marketing Act - Thirteenth Annual Report of the Australian Wine Board for year 1940-41, together with Statement by Minister regarding the operation of the Act. House adjourned at 8.4 p.m. {: .page-start } page 62 {:#debate-47} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-47-0} #### Absorption of Man-power {: #subdebate-47-0-s0 .speaker-JVA} ##### Mr Morgan: n asked the Minister for War Organization of Industry, *upon notice -* {: type="1" start="1"} 0. What plans has the Government for the absorption in suitable employment of men engaged in non-essential industries who will be displaced as a result of the Government's plana for the organisation of war industry? 1. Whose province is it to handle such matters? 2. What does the Governmentpropose regarding the men who will be displaced in the closing down of a section of the Clyde Engineering Company's works at Granville in order to enable the company to concentrate on war work? 3. In view of the generous treatment meted out to the company by the Government in regard to financial assistance and in the granting of war orders, will the Government grant these men and their dependants a sustenance allowance pending suitable employment being found for them? {: #subdebate-47-0-s1 .speaker-KCF} ##### Mr Dedman:
Minister for War Organisation of Industry · CORIO, VICTORIA · ALP -- Inquiries are being made and a reply wall be furnished as soon as possible. {:#subdebate-47-1} #### Film Production {: #subdebate-47-1-s0 .speaker-BV8} ##### Mr Calwell: l asked the Minister representing the Minister for Information, *upon notice -* {: type="1" start="1"} 0. How many films have been producedin Australia in the past twelve months for the Department of Information? 1. How many films were produced by the Department of Information studios in Melbourne, and what amount of money was spent on them? 2. How many films weremade by Cinesound Productions, of Sydney, during the post twelve months, and how much of the total expenditure, was paid tothem for their films ? 3. How many films were made by outside producers (independents), and used by the Department? 4. Is it a fact that the members of the Commonwealth Film Advisory Council are producers of films for the Department of Information? If so, should this state of affairs exist, and should these producers have the right to qualify as arbiters regarding their own productions, as well as outside productions ? 5. Docs the Department employ scenario writers on its staff; if so, how many of their scenarios were used for production! 6. Who has the final choice of scripts for production? Do the scripts go to a central body for final approval or does one man govern the class of propaganda to be mode into a film? 8.What fees are paid forstories? 7. Have any stories been bought and not yet utilized as propaganda? 8. Is it a fact that the Department is transferring its studios and laboratories from Melbourne to Sydney? If so, when, and what is the total cost of the new studios in Sydney? Mr.GeorgeLawson. - The Minister for Information has supplied the following answers : - {: type="1" start="1"} 0. Seven. 1. One only, at a cost of £536. 2. In the period under review, £3,355 was expended on the production of seven different films. This does not include the cost of duplicate copies for theatrical use. Of these seven, two (2) were made by Cinesound at a cost of £1,364. 3. No films were used by the Department other than those produced under contract at (he Department's request. The total number of films mode byproduction companies, apart from the Department's own laboratory, was six. 4. As an advisory body the Films Council expresses opinions as to the suitability of films for theatrical presentation, audience reaction, *&c.* Its members are Messrs. Charles Munro, managing director of Hoyts Theatres; N. B. Freeman, managing director of Metro Goldwyn Mayer Limited; N. B. Rydge, managing director of Greater Union Theatres, and Ernest Turnbull, general manager of Fox Films Limited. One production company, Cinesound Productions Limited, is controlled by Greater Union. The Department is the sole arbiter concerning productions, and does not necessarily implement advice proferred either by the council or the technical production Advisory committee. 5. The Department employs no scenario writers. 6. Final choice of scripts is made by the Department after consultation with the Services, including recruiting committees, the technical advisory committee, the council and any other individual or body likely to be of assistance in any particular problem. Final approval for production is, of course, given by the director. 7. Fees paid range from £10 to £50, according to type of story and standing of the writer. The fee also includes cost of preparing treatments and working synopsis. 8. Yes. One, at a cost of £10 10s. 9. The Department's laboratory is not to be transferred to Sydney. Land occupied by the existing laboratory is urgently required by the Army, and to meet the urgent needs of the Services and the Department a new laboratory, which has been under consideration for a number of years, is being erected in Melbourne. The cost, including additional plant, is estimated at £27,000. When in operation considerable economies and vastly increased efficiency wall result. The activities of the Department of Information are at present under review, including several specific activities referred to in this question. {:#subdebate-47-2} #### Trading Banks {: #subdebate-47-2-s0 .speaker-BV8} ##### Mr Calwell: l. asked the Treasurer, upon notice - {: type="1" start="1"} 0. Will he furnish a statement showing the number oftowns throughout Australia that have one, two, three, four, five, six, seven or more branches of trading banks? 1. In how many such towns are there branches of the Commonwealth Bank? 2. Will he investigate the question of compelling the trading banks by a process of amalgamation to reduce unnecessary expenditure and release any surplus man-power for urgent work in government war-time activities ? {: #subdebate-47-2-s1 .speaker-A48} ##### Mr Chifley:
ALP -- The necessary inquiries are being made. {:#subdebate-47-3} #### Wagerates {: #subdebate-47-3-s0 .speaker-009MC} ##### Mr Holt: t asked the Minister for Labour and National Service, upon *notice -* {: type="1" start="1"} 0. Is it a fact that his predecessor, prior to the change of government, had asked the Financial and Economic Committee to report. *on* the advisability of a general policy of maximum wage rate fixation with the object of curbing any inflationary trend in wage rates? 1. Has any such report been received by him? 2. Will he make it available for the information of honorable members? {: #subdebate-47-3-s1 .speaker-KX7} ##### Mr Ward:
ALP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. There is nothing on record concerning the actions of my predecessor in this matter. 2 and 3. See answer to 1. {:#subdebate-47-4} #### Banned Literature {: #subdebate-47-4-s0 .speaker-JVR} ##### Mr Nairn:
PERTH, WESTERN AUSTRALIA n asked the Attorney-General, *upon notice -* >Will the Government - (a) provide a simple method of appeal to a judge ofthe High Court with respect to printed matter which has been banned;and (b) consider whether effective steps can be taken to prevent the sale or distribution in Australia of banned literature? {: #subdebate-47-4-s1 .speaker-DTN} ##### Dr Evatt:
ALP -- I have asked the SolicitorGeneral to report as to both matters. On receipt of his report, the suggestions of the honorable member will receive consideration.

Cite as: Australia, House of Representatives, Debates, 29 October 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19411029_reps_16_169/>.

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