16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 10.30 a.m., and read prayers.
– Has the Treasurer seen the statement attributed by the press to the Commonwealth Prices Commissioner, that the rise of the price of matches announced to-day is due to the increases of duty and sales tax for which the budget makes provision? Does not this confirm the view expressed by members of the Opposition that rather than use direct methods of taxation the Government, by increasing indirect taxation, is causing to be raised the prices of commodities that are necessary to the wageearners ?
– I have not seen the press statement referred to. The price of matches is, I understand, the subject of adjustment by the Commonwealth Prices Commissioner. I shall give consideration to the other point raised by the honorable member.
– Did the Minister representing the Minister for Trade and Customs bring to the notice of that gentleman the question that I asked a couple of weeks ago with regard to the manner in which matches were being rationed to retailers in Sydney? I suggested that a “ ramp “ was being worked, similar to that associated with the availability of supplies of tobacco. Will the Minister ask his colleague to have another look at the matter, in order to ascertain whether there is justification for the rise of the price of matches, and whether the match combine caused an artificial scarcity of supplies in order to get a greater advantage from the increased price?
– The question asked by the honorable member was sent to the Minister for Trade and Customs, with whom I also discussed the further point raised by the honorable member, that there had suddenly appeared on the market supplies of matches in boxes with a striker on two sides, which indicated that hoarding had been practised and that apparently supplies were placed on the market when an increased price was obtained. I shall again discuss the matter with the Minister in order to ascertain whether a solution of the problem is possible.
Charges - Attendance before Joint Committee on War Expenditure.
– In view of the fact that charges have been made against the Director of Gun Ammunition, Mr. W. J. Smith, in relation to the manufacture of a horse float, will the Prime Minister state whether he yesterday received a telegram signed by over 40 employees of Australian Consolidated Industries Limited, who were working on the manufacture of this float at various times, denying the charges of the honorable member for Watson (Mr. Falstein) ? Does that telegram make the request that the denial be conveyed to this House?
– I have received a telegram from a number of persons who say that they are employees of Australian Consolidated Industries Limited, and who give their names and classifications. I have not counted the number, but it is about 40. They express the desire to refute the charges levelled against them, and affirm that all time and labour on the job was correctly booked and that not one of them was taken off any defence job. They request that this information be conveyed to the Parliament.
Mr.CAL WELL.- Has the attention of the Minister for Labour and National Service been drawn to a statement made before the Parliamentary Joint Committee on War Expenditure last evening by Mr. W. J. Smith, managing director of Australian Consolidated Industries Limited, that there is no shortage of skilled labour in Australia? Is that statement by Mr. Smith any more reliable than his opinion upon other matters?
– Questions about opinions are out of order.
– Will the Minister investigate the origin of the telegram referred to by the Prime Minister to-day, and will he find out who paid for it?
– My attention was drawn to the statement attributed to Mr. Smith. I am having inquiries made immediately as to whether Mr. Smith was accurately reported, and the whole matter will be investigated at once. This is the first intimation that I have had as Minister that there is a surplus of skilled labour. As to the telegram referred to, I take it that the Prime Minister himself will institute inquiries as to whether the names attached to it are genuine. I assume that the matter submitted to him will receive his immediate attention.
– Will the Prime Minister inquire and report to this House as to whether, in completing the horse float, Mr. Smith was carrying out the dual purpose of providing Billy the race-horse with something to go round on, and practising the building of motor car engines, and chassis, of which he has a monopoly, which he seems rather slow in getting to work on ?
– I could make those inquiries, but I do not see any public advantage in doing so.
– In view of the very unsatisfactory position in regard to rents in Victoria, and the fleecing of many unfortunate people by rapacious landlords, apartment-house keepers, and others, who let rooms in houses and bungalows in back yards, when does the Minister for Labour and National Service expect to be able to announce the gazettal of new regulations which will deal effectively with this very important social matter?
– It is expected that a statement will be made to the next meeting of the Cabinet.
– Early next week?
– Early next week, in connexion with recommendations of the Minister for Trade and Customs - who immediately becomes involved in the matter - and myself. The honorable member may rest assured that, if the views of my colleague and myself are accepted and adopted by the Government, every protection will be given to the workers against rapacious landlords and the prospect of being evicted from their homes.
– Has the Treasurer seen the advertisement published in this morning’s Sydney Morning Herald, entitled “ Industrial Bankers - Personal Banking Service “, which states “ For the first time in Australia a personal banking service is now available “ ? The advertisement is inserted by the Industrial Acceptance Corporation Limited. Is the honorable gentleman prepared to insert in the proposed regulations for the licensing of banks in Australia a clause in the terms of the recommendation contained in section 666, paragraph e, made by the Royal Commission on Banking and Monetary Systems, in order to prohibit the use of the title “ bank “ by other than State banks, trading banks, and savings banks, authorized under the act, or institutions authorized ‘by the Treasurer to conduct banking operations! Will the honorable gentleman prevent institutions which are not banks from misleading the people into the belief that they will occupy the same position ai licensed banks?
– My attention has been drawn to the advertisement mentioned. I have seen similar advertisements on previous occasions. The Government is giving consideration to the whole subject of banking, even in relation to the particular concerns which the honorable member has mentioned. Full information will be obtained with respect to all of those who purport to act as bankers.
– Will the Treasurer make inquiries to ascertain whether there is any financial organization, with the exception of the Industrial Acceptance Corporation Limited, that will make small loans to poor persons on the condition that, if their security be destroyed by fire, no further payments will be required of them? Will he also inquire whether there is any other organization that will make similar loans on the condition that, if the borrowers lose their employment, they will be given an interest-free postponement up to a period of three months?
– I am not aware of any such organization, but I shall have inquiries made.
– I ask the Minister for Supply and Development whether the press statement is correct that late last night the Minister for Trade and Customs announced that the price of petrol is to be increased by Id. a gallon, the increase to operate from to-day? Is it also a fact that a prices determination, in the absence of which the increase cannot have legal effect, has not been issued ?
– The Minister for Trade and Customs last night announced that the price of petrol was to be increased by Id. a gallon. Associated with the increase are two factors: the first is an application by the petrol interests for an increase of price, consequent on their having to meet additional costs ; and the second relates to the consumption of power alcohol. Petrol with which power alcohol has been mixed has been selling at a higher rate than has been charged for straight petrol. The Government holds the view that consideration should be given jointly to the ase of power alcohol and the arguments advanced by the petrol companies for an increase of the price of straight petrol, and that a determination on both points should be made by the Commonwealth Prices Commissioner.
– As a prices determination has not been issued, the increase cannot have legal effect.
– I cannot express an opinion on the legal aspect of the matter raised by the honorable member; I merely relate the facts which led to the decision to increase the price. I may add that arrangements have been made with the petrol companies for a percentage of power alcohol to be mixed with straight petrol by each of them. The result will be to increase by 3,500,000 gallons the gallonage of petrol in two States. The Government firmly desires to make the fullest use of power alcohol because of the necessity to provide additional supplies of liquid fuel.
– What is the percentage of alcohol to petrol ?
– It is stated by those who are able to advise, that the dilution is on the basis of a Lf> per cent, addition of power alcohol.
– The increase of price is in respect of straight petrol.
– I have endeavoured to make it clear tha t the increase applies also to power alcohol, and that the two matters were considered jointly. Only one grade of petrol will be available to the public, and at the one price. In that one grade will be absorbed all the power alcohol that can be distilled at present.
– Will- the Minister for the Army state whether the impressment by the military authorities of .303 rifles in the possession of private persons has proved satisfactory? Can the honorable gentleman say how many of these rifles have been handed over? Is it the intention of the Department of the Army to continue to require the handing over of .303 rifles? Would it not be better to leave them in the possession of skilled riflemen ?
– A considerable number of .303 rifles has been impressed; I do not know exactly how many, but I shall obtain the information and supply it to the honorable member. The Military Board, after careful investigation, decided that it was in the best interests of the defence of Australia that these rifles should be impressed, for use in the training camps. I shall consider the suggestion of the honorable member that they be left in the possession of members of rifle clubs. I point out to him, however, that because of the difficulty of supplying ammunition to rifle clubs as well as to the fighting services, it was decided that supplies to rifle clubs should be discontinued during the war.
– Is the Minister for Labour and National Service yet in a position to supply information with respect to the number of strikes that has occurred since he assumed office, and the terms of settlement in each case?
– I hope to be able to make a statement on this subject next week. I shall make it as comprehensive as possible, in order that honorable members may be fully advised in respect of the matter. I am making inquiries as to the number of strikes that occurred under the Menzies and Fadden administrations, and the manner in which they were handled or settled.
– And the number of man-hours lost in the respective periods.
– Quite so. I feel sure that, when the statement is made, honorable members will be fully informed on the subject.
– Referring to strikes in munitions industries, has the Minister for Labour and National Service seen the statement ‘by Sir Thomas Blarney, published in the Sydney Morning Herald to-day, that men of the Australian Imperial Force abroad are staggered at the strikes that take place and feel keenly that men who are getting three times as much pay as the soldiers and are taking no risks are being looked upon as great heroes because they are making shells? Will the Minister endeavour, as far -as lies within his power, to place the relative values of the soldiers and of the munitions workers in their proper perspective?
– I saw the statement attributed to Sir Thomas Blarney, and I assume that the reference was to strikes that occurred during the regime of the previous Government. The present Government has been in office for only a few weeks, but since it has taken over control of the affairs of this country, the weekly loss in man hours due to industrial disturbances has been considerably less than it was when the previous Government was in office. I have already received many appreciative letters from members of the fighting services expressing their gratitude for the efforts of the Government to keep production, going in the Commonwealth.
– Can it be inferred from the Minister’s latest answer-
– I submit that any question based on a previous question is out of order.
-Is it a fact that the workers of Australia, in a time of war, are prepared to give their co-operation, and to work in the interests of the defence of this country, only in accordance with the brand of politics professed by the government of the day.
– I rise to a point of order. I submit that that is not a matter relating to the administration of the Government.
– I agree with the Prime Minister. This political discussion cannot be permitted.
– With reference to the question asked by the honorable member for Wentworth reflecting on the patriotism of Australian workmen, is it not a fact that in a number of instances workers have already acceded to-
– That question is palpably out of order.
Claim for Rain Insurance
– Has the attention of the Attorney-General been drawn to a report in the Canberra Times to-day that Lloyd’s Corporation of London has repudiated a policy entered into between the company and the Australian Capital Territory Carnival Committee in respect of rain insurance taken out recently in connexion with a carnival held by that organization for patriotic purposes? Is he aware that although £400 ‘became payable to the committee, Lloyd’s does not accept the jurisdiction of the Supreme Court of the Australian Capital Territory in the matter. It appears that the policy was taken out through the firm of Harvey Trinden (New South Wales) Proprietary Limited, insurance ‘brokers, of Assembly Hall, 44 Margaret-street Sydney, purporting to act as local agents for Lloyd’s. Is it a fact that although Lloyd’s has entered into a guarantee of good faith to the amount of £40,000 for the due fulfilment of its obligations under insurance policies, and has accepted large sums by way of premiums from people in this country, it yet has no legal entity by which it could be sued here, being merely an association of persons operating in London through local agents? In view of the patriotic nature of the work of the carnival committee, and the fact that it was operating for the benefit of members of our fighting services, who are fighting for such people as the directors and shareholders of Lloyd’s of London, will the Attorney-General look into the whole matter with a view to making Lloyd’s of London amenable to the jurisdiction of the courts of Australia, including the Supreme Court of the Australian Capital Territory?
– I read the report in the Canberra Times to-day, and I shall look into the matter, and consider whether the jurisdiction of the Supreme Court of the Australian Capital Territory should nol be exercisable in such a case.
– Has the Minister for Labour and National Service done anything to ensure that an adequate supply of labour will be made available to deal with the wheat and grape crops during the approaching harvest, including, particularly, the crops grown by returned soldiers who are serving in the fighting forces for the second time?
– The whole matter of the allocation of man-power is receiving the earnest attention of the Government, and as far as possible the Government will be pleased to allocate labour where it will render the best service to the community, aud where it is most urgently required.
– Will the Minister for Supply and Development state whether an 11,000 ton American tanker has been lying off the Queensland coast for some weeks, and has been unable to discharge cargo because of lack of storage facilities? Is it a fact that the vessel has. visited ports as far north as Cairns without being able to discharge its cargo for the same reason, and that eventually it will have to proceed south to enable it to discharge at Melbourne or Adelaide. Does not this unnecessary delay involve serious loss, and is not the complaint that undue delay has been occasioned supported by the fact that an officer of the vessel had sufficient time to get married in Brisbane and proceed to Western Australia on his honeymoon?
– I am very much surprised to hear that a tanker has been standing off the coast of Australia owing to the lack of sufficient storage facilities for the reception of its cargo. I base my statement on knowledge of facts in relation to the present oil and petrol position and the available storage. If the information on which the honorable member has based his question is reliable, the matter should be investigated without delay.
– Has the attention of the Minister for Commerce been called to the evidence given by the Metropolitan. Meat Commissioner, Mr. J. Merritt, before the select committee inquiring in Sydney into the administration of the New South Wales State Abattoirs, in which he said that a project involving the expenditure of £250,000 for the erection of additional freezing works in Sydney had been forced on him by the former Minister for Commerce (Sir Earle Page) and the ex-Premier of New South Wales, Mr. Mair, although ample freezing space would have been available in country districts if only a small sum had been expended upon their renovation ?
– I shall bring the question to the notice of the Minister for Commerce immediately he returns to Canberra, and an answer will be supplied to the honorable member as soon as possible.
– Will the Prime Minister state when I may expect a reply to the question that I have had on the noticepaper for the last three weeks relating to an investigation of the hydro-electric power position in Tasmania?
– As soon as the necessary information comes to hand I shall see that a reply is- furnished to the honorable member. I shall make inquiries regarding the matter.
– I direct the attention of the Minister for Munitions to the fact thatI have heard that the authorities in the United States of America who are responsible for the release of machine tools under the lease-lend legislation have expressed some concern over the fact that the fullest potential use of machine tools is not being made in Australia on account of the system in vogue in many of our munitions establishments of working five twelve-hour shifts and one shift of possibly four or six hours on the remaining half-day. In the United States of America machine tools of this character are used for 24 hours a day throughout the whole of six working days and for eighteen hours on the seventh day. Before the United States of America is asked to release tools to Australia at the expense of its own establishments should not full use be made of the tools in this country ? Have representations of that kind been made to the Minister, and is he making any arrangements to have the fullest possible use made of the machine tools supplied from the United States of America?
– When I assumed office I found that mistaken opinions’ were held by some people in the United States of America regarding the use to which we were putting tools that had been made available to us from that country. Steps have now been taken to correct those wrong impressions. I assure the honorable member that we are making full use of what tools we have for the prosecution of the war effort.
– Will the Minister for
War Organization of Industry supply the House with information regarding the Lyttleton scheme in Great Britain, under which several firms have submitted proposals to the Government for the voluntary concentration and co-operation of industry for the purpose of releasing per sonnel and resources for the war effort? Does he think that the scheme would prove useful if applied to Australia?
– The Department of War Organization of Industry has only just been set up. My attention has been drawn to the Lyttleton scheme in Great Britain. I shall examine it, and if I find it to be applicable to Australia, I shall develop it here.
– Will the Minister for the Army make available as early as possible information, regarding the number of war prisoners held in Australia, the cost of maintaining them, and the number of persons employed in guarding them? Will he also say when he expects to have information regarding the treatment of the Australian prisoners of war held by the Italians, with particular reference to the reports of two Australian soldiers who escaped from Benghazi? Will he give further consideration to the proposal for the employment of prisoners of war in Australia in some useful capacity?
– Inquiries have been instituted into the treatment of Australian prisoners of war at Benghazi, but no definite reply has yet been received. When information becomes available, it will be communicated to honorable members. As for the cost of maintaining prisoners of war in Australia, and their employment, here, I remind the honorable member that the Government has been in office for a few weeks only, and has not yet had time to get a. true picture of the position, or to make decisions.
– Is the Minister for the Army yet able to inform the House of the result of his inquiries into the cost of constructing new military hospitals?
– No, but I shall find out what stage the inquiries have reached, and inform the honorable member of the result.
– Can my energetic friend, the Minister for Labour and National Service, who has proved himself most efficient in promoting industrial peace, state when he will be able to meet the miners to discuss the settlement of the trouble that is now brewing on the coal-fields as the result of regulations issued by the previous Government ? Can lie fix a time and place this week to receive a deputation?
– I am at present giving my attention to this matter, and I shall be pleased if the honorable member will arrange for the representatives of the miners to meet me at the Commonwealth offices in Sydney at 11 a.m. on Saturday.
– Will the Minister for Labour and National Service invite the attendance of the Minister for Supply and Development at his conference with the representatives of the coal-miners, so that he may inform the leaders of the miners of the depletion of Australia’s coal reserves as the result of irritating and frivolous stoppages of work?
– The honorable member seems to be mistaken as to the purpose of this conference. It has been called to remove certain injustices under which the miners are now working, the idea being to prevent stoppages of work. Because of the determination of this Government to deal justly with the men, we are certain that there will be fewer stoppages than in the past, and that production will be increased beyond what was achieved under the previous Government.
– Has the Government given any consideration to the establishment in this country of a form of inquiry corresponding to what is commonly known as the Gallup Poll for the purpose of ascertaining public opinion? If so, does the Prime Minister think it fair that the Government should, in that way, add to the uncertainty, mystery and complications of modern life by propounding such queries when we already have to endure broadcasting commentators, racing tipsters, astrologers, and “ Maxy “ Falsteins ?
– The Government has not given consideration to the very interesting series of speculations which the honorable member has put to me. When Ministers have time to spare from other and more pressing duties, we may look at some of them.
– Has the Treasurer seen references in to-day’s newspapers to proposals to increase the price of matches, petrol, and telephone calls, and to raise postage rates, besides the temporary postponement of the increase of the price of tobacco? Is he prepared to make an investigation of the snowballing effect of such increases on the living conditions of the workers and members of the middle class?
– I have not seen the reports to which the honorable member refers. I am aware that the budget proposals provide for increased postal rates, but those increases were proposed by the Government of which the honorable member was a Minister. I shall inquire into the other matters mentioned by the honorable member, and supply him with the information later.
– The management of the Australian. General Electric Company, which is making tripods for Bren guns that are urgently required, has tried without success to introduce three eighthour shifts, but this has been resisted by the men, who prefer to work twelvehour shifts, in order to secure overtime pay. This means that the machines would be idle at the week-ends. The practice has been for members of the staff to come back at the week-ends and work voluntarily, and this has been done with such success that their output is now proportionately higher than that of the regular employees. Can the Minister for Labour and National Service say whether it is a fact that the men have issued an ultimatum that unless this voluntary work is discontinued they will go on strike ?
– This is the first intimation I have had of any such trouble. If the honorable member will arrange with his clients to supply details, I shall look into the matter.
– I desire to make a personal explanation. We should, perhaps, have become accustomed by now to the gratuitous and insulting innuendoes of the Minister for Labour and National Service. He has just suggested that in some way or other I am associated with the Australian General Electric Company. That is false. The information did not reach me from any one connected with the managerial side of that organization.
Debate resumed from the 29th October (vide page 47), on motion by Mr. Chifley -
That the bill be now read a second time.
– This bill has become necessary because of the manner in which the Government has framed its budget. The Opposition is not opposed to a sales tax in principle, nor to legislation designed to remove anomalies which experience has shown to be present. It is, however, opposed to the Government’s proposal to increase the sales tax as a means of raising additional revenue. The last Government examined the position very carefully, and came to the conclusion that indirect taxation should not be resorted to as a means of extracting money from the public, while the possibility still remained of obtaining the required revenue by the straight-out, honest method of direct taxation. I repeat with all the emphasis of which I am capable that there is a field of direct taxation which the Government has not been sufficiently courageous to enter - a field from which money needed to finance the war could be obtained. I refer to the section of the community with incomes under £400, whose total income is now £560,000,000 per annum. That amount is increasing almost daily. The Prime Minister has admitted that since the outbreak of war the wage fund of this country has increased by £150,000,000. Although persons in that income group will be the greatest participants in the money expended in the country’s defence, they are not to be asked to bear their proper share of the burden. From them only about £4,000,000 is to be extracted by the Commonwealth in income tax, notwithstanding that the State governments, which are not directly responsible for financing the war and ensuring the security of the nation, expect to obtain £7,000,000 from that source. The Menzies Government introduced a scheme of child endowment estimated to cost £13,000,000 per annum. It is fair to say that of that sum approximately £9,000,000 shall go into the pockets of persons with incomes under £400 a year. Persons in that income group will be called upon to find for Federal and State taxes about £11,000,000, but because of the humanitarian legislation introduced by the Menzies Government, they will receive back about £9,000,000, so that the net contribution by that section will be only about £2,000,000 a year.
– The Menzies Government which introduced child endowment postponed the granting of an increase of the basic wage which would have represented £43,000,000 to the workers.
– Even so, the net result is the same. If, instead of a scheme of child endowment, there had been an increase of the basic wage, the money would have been received by the same group of people hut in a different form. In either case the net result is that from persons within certain low income limits only £2,000,000 will be paid to the Treasury. I point out, moreover, that the introduction of a Commonwealth scheme of child endowment did not prevent an increase of wages in Queensland and some other States, or an increase of wages on the basis of the cost of living. In the light of these facts, is it any wonder that the Opposition objects to increased indirect taxation when that field of direct taxation is open? Sales tax was first introduced in 1930 by the Scullin Government. The rate was then 2½ per cent. I agree that the circumstances existing at the time justified the introduction of that tax. I agree also that circumstances which have existed since then have justified its continuance and, indeed, the various increases which have been made from time to time. Because, of the necessities of war finance, the Menzies Government was forced to review the means by which additional revenue could be obtained. It could not avoid reviewing the list of exempted items under the sales tax legislation. Since 1930 the rate of sales tax ha3 progressively increased. In May, 1940, when the then Government found it necessary to increase the rate to 8-J per (sent., the present Prime Minister (Mr. Curtin), who was then Leader of the Opposition, said -
I quite agree with the principle of the method that the Government has employed in its treatment of the sales tax, but what I consider to be rather unfortunate is that the Government has increased the sales tax to 8J per cent. That advance could have been avoided by increasing income tax, land tax or some other direct tax.
In time of war no section of the community ought to escape the direct responsibility to contribute towards the national effort.
I agree with that statement entirely. In my present position as Leader of the Opposition I can appreciate that the Prime Minister has had to alter his views. He has adopted an entirely different attitude from that which he adopted when the Menzies Government was faced with the realities of war and had to find the money requisite to wage battle against the enemy. Ministerial responsibility has changed his outlook, and to-day he is doing exactly the opposite to what he advocated in May, 1940. On the 15th May, 1940, the present Leader of the Senate (Senator Collings), who was then in opposition, said that the sales tax was grossly unjust because it bore most heavily on those with the smaller incomes. On that occasion the honorable senator said -
I object strongly to the tremendous difference between the amount received in direct taxation and that received in indirect taxation.
Speaking on the subject of the sales tax on the 17th May, 1940, Senator Collings said -
The Opposition considers that the Government should raise less revenue than it proposes to do by means of indirect taxation, and should make up the leeway by direct taxation.
In May, 1940, the income of the group to which I have referred was approximately £100,000,000 less than it is to-day. At that time persons in that group were not participants in a child endowment scheme. The arguments which the honorable gentleman advanced then, can be advanced with greater emphasis to-day.
The bill also contemplates the making of .certain adjustments -and reclassifications.. “With them I have no quarrel at all, because anomalies revealed by experience should be adjusted as opportunity offers. Had I remained as Treasurer of the Commonwealth, it would have been my responsibility to take similar action. But, in addition to rectifying anomalies, the rate of the sales tax has been raised. In respect of certain items, the rate is to be raised from 5 per cent, to 10 per cent, and in respect of other commodities it will be 20 per cent, instead of 10 per cent. In this financial year the Government expects to obtain an additional £1,900,000 from these increases.
During the discussion of this bill the Opposition will emphasize certain features and bring before the Government additional anomalies which it considers should be adjusted. At this stage, I repeat that the method of raising revenue which is set out in the measure now before us is totally inconsistent with the views previously expressed by honorable gentlemen who are members of the present Government. The Government should not have resorted to indirect taxation when there was at its disposal a reservoir from which money could have been obtained by the more straightforward method of direct taxation. The most effective way to divert purchasing power from civil activities to war needs is by direct taxation. The man with a family does not wish to escape further taxation in time of war, but he does not agree that, because the Government has failed to resort to direct taxation, he should be placed on the same basis as a single man without dependants. The proposals of the present Government will impose on the people sales tax at the rate of £3 12s. Bid. a head, compared with £3 7s. 2d. a head under the budget which I introduced a few weeks ago. That is an increase of 5s. 4d. a head. A man with a wife and three children will pay £1 6s. 8d. compared with single men and women who will pay only 5s. 4d. They are not asked to measure up to their responsibilities regarding war finance to the degree that they should. The Government’s indirect taxation proposals, compared with the financial proposals which I introduced, impose on family men an additional burden of 12s. a head.- That hardship, in view of the consideration which is shown for single persons-, is unjustified.
Similar anomalies occur in other forms of indirect taxation. The budget increases customs and excise by 6s. 7d. a head, and the family man whose interests the Government professes to safeguard will again pay more in indirect taxation than is his just due compared with a single person without responsibilities. The Opposition, whilst considering that, having regard to other avenues of revenue available, there is no necessity for the measure, will support it, and will not offer carping criticism.
– We live and learn. Satan’s reproof of sin is only a circumstance to the indignation of the Leader of the Opposition . (Mr.Fad den) at the proposals of the Government to increase indirect taxation.’ Although the Governments of which ho was a member almost lived by indirect taxation, he now vigorously denounces sales tax. The honorable gentleman triumphantly declared, with the air of one making a grand discovery, that the Scullin Government introduced the sales tax. That is true; but the circumstances were most exceptional. Australia had then reached the nadir of the depression, and the Government was compelled to tap new sources of revenue. But in succeeding years, the United Australia party and United Country party coalition governments repeatedly increased sales tax in order to augment revenue, instead of imposing additional direct taxation, as the honorable gentleman now advocates. At the present juncture, the Government has exhausted the possibilities of obtaining additional revenue from direct taxation. The Leader of the Opposition harped continually upon the refusal of the Government to tax the lower income group. To honorable members opposite the King Charles’ head of the budget is the fact that the Government has refused to wring from the workers the taxes which it has placed on the shoulders of those who are best able to pay them. Each honorable member opposite has lamented this fact.
The Leader of the Opposition contended that the workers . should make a bigger contribution to war finance, because the previous Government granted to them child endowment. Evidently, the Government introduced that social service with the mental resolve to increase in the near future taxation of the lower incomes. That is the only conclusion which can be drawn from the speech of the Leader of the Opposition. In common with all government supporters, I heartily dislike the sales tax. I frankly admit that Hansard contains many speeches which I have made in opposition to the principle of sales tax. and indirect taxation generally. If we sought to achieve the ideal, indirect taxation would be avoided. But I also hate war, which has been thrust upon us. We have to do extraordinary things in order to finance the colossal expenditure that war entails. I have confessed since the outbreak of war that Borne of our ideals will have to he shelved until the Nazis are crushed. Personally, I should prefer to see the elimination of sales tax from our economy, and when the Labour party’s plans for economic reconstruction are sufficiently advanced, this form of indirect taxation will be abolished. At present, however, the Government cannot forgo the substantial revenue which thesales tax raises. The abandonment of this form of indirect taxation at the present juncture is too ridiculous to contemplate.
The Leader of the Opposition isa versatile gentleman. One day he attacks the Government for imposing direct taxation, which he describes as excessive; shortly afterwards he assails us for imposing indirect taxation. Will nothing please the honorable gentleman? In my opinion, he is simply seeking an excuse for carping criticism, though he has assured the House that nothing is further from, his mind. First, he waxed indignant because, in his view, the Government was neglecting to take money from the wage fund of the workers. Then he complained bitterly that, the Government proposed to tax the workers through the medium of sales tax. Whenever he speaks, he contradicts a previous statement that he made. The exigencies ofthe times demand the extension of the sales tax which’ the Government proposes to make, but the impost has been placed as far as possible upon non-essential goods.
In order to save debate later, I point out that the Government has given consideration to several requests from honorable members on both sides of the House for variations of the proposals contained in the bill. The requests related chiefly to goods used in primary production. For some years, agricultural machinery and implements have been exempted from sales tax, and that exemption still stands. Since the 22nd November, 194.0, sales tax has been payable at the rate of 5 per cent, in respect of iron and steel wire of gauges 6 to 14, saddlery and harness, axes and tomahawks, and tool handles of wood. The bill raised the rate of tax on these goods on and from the 30th October, 1941. Realizing that these goods are used extensively, although not exclusively, in primary production, the Government has decided that a measure of preferential treatment in respect of them is justified. Amendments will, therefore, be moved at the appropriate time in order to ensure that the goods shall remain in the 5 per cent, field, instead of being transferred to the 10 per cent, field.
Another item which will be amended relates to certain equipment used in the fishing industry. The bill raised’ from 5 per cent, to 10 per cent, the rates of tax on nets and netting for fishing and material for the repair of these goods, and lines, hooks, floats and sinkers for use in the fishing industry. It has been represented that these goods have to be frequently replaced by fishermen; and, having regard to the exemption formerly enjoyed by the fishing industry, the Government decided to allow those goods to remain in the 5 per cent, field. I commend the bill to the House and ask honorable members to give it a speedy passage.
– Whilst the bill contains a few features which every honorable member will welcome, there are other provisions the necessity for which is a matter for regret. Undoubtedly, the necessity arises substantially from’ the unwillingness of the Government to increase direct taxation on incomes of less than £1,500 per annum. Examining clause 3 of the measure, I am gratified to notice that a mistake, which was made by some one at some time, has ‘ been rectified, and that windmills, tanks, pumps and troughing will be transferred to Schedule 1, which means that they will bc exempt from sales tax. I am also glad to see that surgical appliances, crutches and invalid chairs also will be exempt-
Regarding the proposed increases of tax, the normal attitude of a normal Opposition in normal times would be te examine the proposals with a view to discovering how many items could be faulted. However, these are not normal times. Whilst we dislike increases of sale., tax, the fact remains that this chamber has agreed in principle to a budget which refuses to increase direct taxation to such a degree as would obviate the necessity to impose additional indirect taxation. Therefore, we must accept some increase of indirect taxation. With Australia at war, we need all the revenue that we can gather. We must also restrict the ability of the public to purchase certain lines of civil goods. The bill will, to some degree, have that effect.
Some of the proposals I shall criticize in an endeavour to prevail upon the Government to accept amendments. I am glad that the Government has intimated ite willingness to accept amendments, in the drafting of which I had the assistance of officers of the Crown Law Department, regarding axes, harness, tool handles, fishing nets and fencing wire. My approach to the bill is to discover not .how many items I can fault, ‘but how many increases I can support, and to confine criticism of the increases to items which I think even the Treasurer (Mr. Chifley) will agree should be amended. It is proposed in clause 4 that certain whole divisions shall be omitted from the 5 per cent, schedule. When items are omitted from any schedule they automatically become subject to the general rate of 10 per cent. It, is proposed in clause 4 that Divisions I., II., III., and IV., a part of V., and the whole of VI., VITI., and IX., shall be excluded from the second schedule. That means that the pales tax on the kerns included in those divisions will be increased from 5 to 10 per cent. Division I. includes mining machinery, an asset in which there is wastage perhaps to a greater degree than in machinery used by any other industry. Division IX. includes fishing equipment, such as boats, oars, life-belts, &c, crayfish pots, and engines. I am glad that the Government proposes to accept the suggestions I have put forward in this connexion. It may be argued that a fisherman may put off the purchase, of a. new boat or a new engine until after the war, but the fishing equipment set out in sub-items 4 and 5 of Division II., such as nets, netting, cotton and hemp twine for repairing, lines, hooks, floats and sinkers, are used every day by fishermen. Their gear must be maintained, and the purchase of these requirements cannot be deferred. Those are the items in respect of which I suggested to the Government that no increase of tax should be imposed. I am glad that the Government has agreed to adopt my suggestion. We come now ito Division III., which includes irrigation, water supply and sewerage equipment. Amongst the items included in that division are piping, tubing, taps, valves and fittings generally. I agree that, having regard to the financial difficulties we have to face in time of war, it is proper that sewerage schemes in country towns should be discouraged for the time being, if for no other reason than that they will provide a great deal of much needed employment when we reach the stage of transition from war-time to peace-time activities. Of course, it is also necessary that the huge sums which may be expended in that way shall be diverted to the. .war production. I take no exception to the proposal to increase from 5 per cent, to 10 per cent, the sales tax on these commodities, hut I ask the Minister to adopt an amendment containing a proviso which would exclude from additional taxation those public authorities which are at present actually engaged in sewerage works. Broadly speaking, three stages have been reached in connexion with the sewering of country towns. Many towns, even small towns, have, with the provision made by former Commonwealth governments of £1,000,000 spread over ten years to meet interest payments, and -the assistance received from State governments, completed, their sewerage schemes. In other towns the local governing bodies, which were contemplating the provision of sewerage facilities, have drawn back just in time, some at the request of the Commonwealth Government, in order that funds which would otherwise have been used for that purpose may be diverted to war pro,duction. But in a few towns the work is actually in progress and is too far advanced for them to abandon it. The Government would be acting harshly if it imposed upon the authorities in those towns increased sales tax on their requirements of pipes, valves and other materials necessary to complete the work. I ask the Minister ito give sympathetic consideration to an amendment, which I propose to move at the appropriate time, to insert in the bill a proviso which would exclude from additional taxation authorities which are at present engaged on schemes of that kind.
– Those which have already entered into contracts.
– The wording of the amendment which I propose to move refers to work commenced prior to or in pursuance of a contract or agreement entered into prior to the 30th October, which is the date upon which this bill is presumed to have come into operation. I submit that my amendment is a reasonable one. To give a concrete example of the point I am making, I draw attention to the town of Traralgon, in Gippsland, in which the local governing authority is carrying out a sewerage scheme. The progress of the work is being greatly retarded and the local governing authority and the contractor are losing money owing to the fact that the contractor had estimated the ‘ time required to complete the job on the assumption that he would be able to employ continuously 140 men on heavy work associated with the scheme. Owing to the shortage of labour he can get only 40 men. The longer the completion of the work is delayed, the longer the local governing body will have to wait before it can impose rates in order to earn some part of the interest bill with which it is faced. The. imposition of additional sales tax on the requirements of authorities whose schemes are not yet completed would inflict great hardship on the people “concerned. It is one thing to say to an authority which proposes to undertake work of that kind, “ You had better wait until after the war is over; we need all our resources to be diverted to war purposes “ ; but it is quite another thing to impose additional burdens on an authority which has already committed itself to expenditure in connexion with the work.
– How would the honorable member discriminate between municipal bodies doing the work and private contractors?
– As the right honorable gentleman will agree, we give certain concessions to semi-government authorities.
– How would the honorable gentleman justify it in equity?
– Perhaps it may be difficult to justify it in equity. The full text of the amendment which I propose to move is : -
That clause 4 be omitted with a view to insert in lieu thereof the following clause: - 4. - (1) The Second Schedule to the Principal Act is amended by omitting Division I., sub-items (1), (2) and (3) of Item 3, Item 4, Division III., sub-items (1), (5), (0), (8), (10), (12), (14) and (15) of Item 19, Divisions VI. and VIII. and Items 38, 39, 41, 42, 44, 45, 40, 47, and 48.
The amendments effected by the last preceding sub-section, in so far as they omit Division III. of the Second Schedule to the Principal Act, shall not apply to any goods covered by that Division which are for use in the construction of any irrigation, water supply, drainage or sewerage works carried out by or on behalf of any public authority charged with the construction of any such works, if the construction was commenced prior to, or in pursuance of a contract or agreement entered- into prior to, the twentyninth day of October, One thousand nine hundred and forty-one.
– That amendment will apply to all undertakings.
– To all undertakings of this nature which are at present being carried out by public authority. If, on examination of my amendment, the Assistant Treasurer (Mr. Lazzarini) finds that it is too wide and sweeping in character, I shall be happy to accept a reasonable modification of it.
– Does the honorable gentleman intend that hospitals shall be included in the term “ public authority “ ?
– The term “public authority” is fairly wide. It would include a hospital authority which is carrying out the class of work under discussion. We should allow existing contracts to be completed on the basis of the former rate of tax, and impose additional tax only in respect of new projects.
In clause 4 it is proposed to exclude Division IV. from the 5 per cent, schedule. That division contains such items as canned meat, canned fish, coffee with milk, canned vegetables, &c, all of which are used by the people outback. I. feel sure that the proposal to increase the tax on those items must have been an oversight on the part of the Government. I propose to move in committee that Division IV. be retained in the second schedule. I am glad that the Government has agreed not to increase the tax on saddlery, harness, chains, axes, and tool handles. Earlier in the debate the Assistant Treasurer gave notice of the Government’s intention not to alter the tax on plain wire of gauges 6 to 14. I ask him to go a little further and exempt all fencing wire from the tax. It is anomalous that the other materials used in the construction of fences, namely, barbed wire and wire netting, should be free of tax, whilst plain iron and steel wire is subject to tax at 5 per cent. I can only regard this differentiation as having arisen as the result of an error. Plain fencing wire should surely have been placed in the same category as barbed wire and wire netting. Plain wire is used in far greater quantities than barbed wire. The support for a netting fence may require three plain wires. Plain wire, wire netting and barbed wire go into the same fence. However, for some inscrutable reason, plain wire, which is now .taxed at the rate of 5 per cent., is to be taxed under this bill at the rate of 10 per cent., although barbed wire and wire netting, quite rightly, are included in schedule 1 and are, therefore, not subject to sales tax. I ask the “Government to be even more generous in this matter than it already intends to be, and to place plain wire in’ the same category as barbed wire and wire netting. To-day barbed wire is not obtainable. Whenever inquiries are made about supplies, the Minister for Munitions (Mr. Makin) advises applicants to use plain wire as a substitute. It is a poor substitute for barbed wire; but the point I emphasize is that if it is to be regarded as a substitute for barbed wire, which is tax free, plain wire also should be exempt. In addition, it is used with barbed wire and wire netting in the construction of ordinary fences in the country.
I propose to move, in committee, the amendments which I have foreshadowed. Briefly, the objects of these amendments will be: First, to reject any increase of sales tax on items now shown in Schedule 2, Division IV., including canned meat, canned fish and canned vegetables which residents in outback areas are obliged to purchase because they cannot obtain fresh supplies. The Minister will admit the justice of that request. Secondly, I shall propose that plain wire be exempt from sales tax, and that the tax on fishing nets, axes, tool handles and harness be not increased ; and, thirdly, that public bodies now engaged in carrying out sewerage projects shall not be asked to pay extra tax on any of the articles required in such works which are already so far advanced that they cannot be suspended.
– On many occasions in the past honorable members have listened with a great deal of interest to speeches in this chamber by the Minister assisting the Treasurer (Mr. Lazzarini). They have noticed that when he has a good case he speaks with a. certain amount of sincerity and temperateness whereas when he wishes to cover up a weakness in his case he waxes very heated and eloquent. Consequently, I was not surprised that the Minister, in replying to the Leader of the Opposition (Mr. Fadden), developed that heat which he customarily shows when he endeavours to divert attention from the facts. He said that Hansard was full of his protests against the sales tax, but added, “ What would you have us do ? War is horrible; but we have no alternative hut to impose this extra tax”. The truth is that the Government has no alternative but to vacillate, as it has always done so, in ite attitude towards the sales tax. When we, on this, side of the chamber, were in office, we approached this tax from this angle: Realizing that there are two methods of taxation, direct and indirect, we examined both impartially, and decided to do the courageous thing by saying to the workers of this country : “ We consider that it is up to you to contribute towards our war effort.” There was nothing new in that.. Indeed the Government of New South Wales which was led by Mr. Lang, the great idol of Labour, the man who was supposed to be greater than Lenin, increased a wages tax to ls. in the £1 in order to obtain the wherewithal to tide it over a period of depression and crisis. That was a courageous action. By that method a burden was spread equitably over all sections. The Government of which I was a member handled this matter in a similar way. It said: “Let us come out in the open and tell the men on the basic wage and those who are benefiting from this war by additional employment, higher wages and war loadings, that we propose not to tax them directly, but to establish post-war credits in order to give them an opportunity with what is equivalent to deferred pay to rehabilitate themselves in industry when the war is over.” This Government, however, knows that such a policy would not he popular, and would lose votes. It said in effect : “ Let us devise a means of extracting revenue from the workers who support us in such a way that they. will not be able to check up on it “. The average man when purchasing goods does not worry whether the purchase price includes sales tax. He simply pays for the goods. ‘Consequently, he does not say to himself that so much of the price he pays represents indirect tax. When he is taxed directly, however, he can say that his contribution towards war expenditure is so much. If this Government had followed that method he would naturally inquire : “ What sort of a workers’ Government is this that taxes mel” Consequently, this Government prefers to adopt means whereby it can hoodwink the average worker. In that respect it lacks courage. It proposes to impose this tax surreptitiously, as it were, in order that the worker shall not be able to check up on it.
– The average worker is not so ignorant as the honorable member implies.
– I can refer to many speeches made hy honorable members opposite in which have been expressed opposition to the sales tax ever since the day it was imposed by the Government led by the right honorable gentleman. I agree with my leader that, the right honorable gentleman acted courageously when he introduced the sales tax in the face of the strong opposition of some of his own followers. I commend him for that action; but this Government is but a pale shadow of that which was led by the right honorable gentleman. It proposes to tax the workers, but has not the courage to do so openly. I shall give one example, which could be multiplied indefinitely, in order to show how unjustly this tax will fall upon the workers. The State Labour Government of New South Wales is subsidizing the work of a commission which is charged with looking after the teeth of children attending State schools. Ninetythree per cent, of the children in those schools are affected with dental caries. They are children of poor parents, and have never been able to afford to pay for the attention necessary to preserve their teeth. The dental profession declares that dental decay is the cause of the majority of illnesses that afflict our people. In this work the Government of New South Wales is gradually making up leeway in public health activity. But the Commonwealth Government proposes to weaken that activity by increasing the price of dentifrices. The extra impost will make no difference to the children of wealthy parents, but it will represent a considerable burden on the children of parents of restricted and moderate means who mostly attend State schools. At the same time honorable members opposite declare that they will insure that the new order shall soon be introduced. I merely give this one example to show the incidence of this tax. It could be multiplied many times. If the Minister was sincere in the past in stressing the need to preserve the standards of home life and the health of the people, he will accept this opportunity to give practical effect to his ideas. He can say to the officers of the Treasury who have placed before him this list which he has blindly assented to, “Look here, by increasing the rate of sales tax on dentifrices we shall destroy the work of the Government in New South Wales in caring for the dental health of the children in State schools “. In the interest of the health of the community, I ask that dentifrices be left in the schedule in which they appear to-day, or even be exempt from sales tax. Another important aspect is this : The Government proposes to transfer dentifrices, which are admitted to be means of preserving health, from the semi-luxury class into the luxury class of goods. Honorable members opposite and I, myself, have said that the time must come when we must ration luxury goods in order to divert money now being expended on them to war loans. When such action is taken the first goods to be declared luxuries will be the goods listed as luxuries in these schedules. For purposes of rationing this list will be taken almost in its entirety. In that case we should ensure that dentifrices, which are not luxuries, but are necessary for the preservation of the health of the community, should not be rationed. If “ the Minister has no intention to cooperate with the Labour Government of New South Wales in its work of preserving the health of school children, I urge him, at least, to withdraw dentifrices from the list of luxuries in these schedules.
– I intend to support the amendments forecast by the honorable member for Gippsland (Mr. Paterson). Like other honorable members on this side of the chamber, I regret that the Government has not taken its courage in its hands, and raised the revenue it requires by direct, instead of indirect taxation. In the past honorable members opposite, particularly the Minister assisting the Treasurer (Mr. Lazzarini), have justifiably pointed out injustices in the incidence of sales tax. They have emphasized that sales tax is borne just as much by those who cannot afford to pay it as by those who can afford to pay it. For instance, when an old-age pensioner buys a commodity which 19 subject to sales tax, he pays just as much sales tax as a person with an income of £5,000 a year who buys a similar article. This form of tax makes no discrimination whatever between taxpayers according to their ability to pay. For that reason it can, in many respects, be adversely criticized. Most honorable members will agree that the exemption of foodstuffs from sales tax is a wise precaution. I very much regret that this Government has seen fit to take certain foodstuffs out of the 5 per cent, range and put them in the 10 per cent, range. If ever there was a time in the history of Australia when there was a need to encourage the local consumption of our own food products, it is now. We are faced with extreme difficulties in exporting our produce. Only yesterday the Minister for Commerce (Mr. Scully) informed the House that there was a distinct possibility that, owing to shipping difficulties, poultry farmers would have to be content to receive less for their eggs. There are a number of reasons - particularly reasons relating to the war - why the Government should be very reluctant to impose sales tax upon foodstuffs to such a degree that their consumption in this country might decrease. For example, it is proposed to increase sales tax on all commodities in Division IV. from 5 per cent, to 10 per cent. That division includes meat in jars, tins and containers. It is desirable that we should consume as much meat as possible in this country. We have a surplus of lamb, beef and mutton, and if it be not consumed, the Government will be faced with the prospect of subsidizing the cold storage of these unused products. For that reason, it is wise to endeavour to encourage the consumption of these commodities as much as possible. The sales tax is to be increased also on processed milk, milk powder, chickory, malt, sugar, and preparations containing these substances. That will make it increasingly difficult for the purchasing public to obtain these goods. I suggest to the Minister Assisting the Treasurer that careful and sympathetic consideration be given to the suggestion made by the honorable member for Gippsland that the sales tax on items in Division IV. should not be increased. As the honorable member for Wentworth (Mr. Harrison) and others have pointed out, the sales tax is an imposition which steals unobtrusively upon the people. It is rather significant that whereas the present Government proposes to increase invalid and old-age pensions by £1,115,000, it seeks to level up the discrepancy by increasing the sales tax on certain commodities by £1,900,000. That is an answer to the charge made a few minutes ago by the Minister Assisting the Treasurer that whilst the Fadden Government had given the people something by means of the child endowment scheme, it had proposed to even the score by getting the money back in other ways. This Government’s sales tax proposals are a good example of that mental attitude.
I have no wish to confine my speech entirely to criticism. I like to give credit where credit is due, and I congratulate the Government upon its decision to remove the sales tax from many items. Apparently, preceding Treasurers have been so busy that they have not had time to scan thoroughly the list of items upon which sales tax has been levied. However, I suggest that when the Government is reviewing the effects of its taxation measures - the effects should be to increase our war effort - careful consideration should be given to other methods of reducing the consumption of non-essential goods, the manufacture of which absorbs considerable quantities of material and labour which should be devoted to war production. I refer particularly to items in Division VII., including refrigerators, washing machines, vacuum cleaners, &c. An increase of sales tax from 15 per cent, to 20 per cent, will not seriously reduce the sale of these goods. What we require is a list of commodities, the manufacture of which is detrimental to our war effort. Production of these goods should be eliminated or restricted, but that cannot be achieved merely by an increase of the sales tax. The Minister for War Organization of Industry (Mr. Dedman) should be asked to determine what commodities are essential at the present time, and to place the manufacturers of these goods upon an equal footing. At present manufacturers of revenue brands of refrigerators are converting their factories to war production, but some of their competitors are taking advantage of the more attractive market thus created to increase the output of their products. The Government will have to curb such tendencies by means of joint action by the Department of War Organization of Industry and the Treasury. The position cannot be adjusted by taxation measures alone.
I sincerely hope that the Government will accept the amendments foreshadowed by the honorable member for Gippsland in regard to foodstuffs and beverages. Tinned commodities particularly are required extensively by people who live far away from the cities. Many country people can buy milk foods in tins only. At present the country residents generally are having a bad time owing to the war, and it is not fair to make their living conditions any more onerous than they are at present.
I also support the remarks of the honorable member for Gippsland in regard to wire. I have received several letters from the Minister for Munitions (Mr. Makin) stating that no barbed wire is available for civil requirements, and suggesting that black wire be used as a substitute. I point out, however, that barbed wire is not subject to sales tax, whereas black wire is taxable, so that the concession originally given by the exemption of : barbed wire does not operate now that it is unobtainable. Black wire should be placed on the tax free list. I trust that the Government will accept that very reasonable proposition. : Honorable . members on this side of the . chamber have no desire to embarrass the Government by attacking its sales tax proposals. Our object is merely to offer- fair criticism. I trust that the suggestions put forward by the honorable member for Gippsland, who acted as spokesman for honorable members on this side of the House in the matters to which he referred, will be favorably received by the Government, because, as the honorable member said in his opening speech, he examined the proposals not with the object of finding how many items for which exemption could be obtained, but how few. We realize that the Government’s object is to raise revenue, and although its methods are different from ours, honorable members opposite are now in control of the treasury bench, and they must be conceded the right to pursue the course which they consider to be best. There are many other small items to which attention could be drawn, but they are inconsequential in a budget of £300,000,000, and are hardly worth bothering about. However, the suggestions put forward by the honorable member for Gippsland are worthy of sympathetic consideration.
– I shall support the amendments which are to be moved by the honorable member for Gippsland (Mr. Paterson), and I sincerely hope that they will be acceptable to the Government. I am not unmindful of the imperative necessity to raise revenue in order to finance the war, but I object to all forms of indirect taxation.. Taxation should be imposed in accordance with the ability of people to pay. Indirect taxation is a vicious form which imposes the greatest hardship on people with large families. Usually these people are in receipt of low incomes.
Replying to the Leader of the Opposition (Mr.Fadden), the Minister assisting the Treasurer (Mr. Lazzarini) said that in order to give preferential treatment to primary producers,’ . the Government proposed to continue at the present rate of tax, axe handles,- iron and steel wire of from 6 to 14 gauge, harness, saddlery, chains, &c. However, I fail to see that there is any preferential treatment there. So far as iron and steel wire are concerned, a grave anomaly exists. Barbed wire and wire netting are excluded from the schedule altogether. I hope that anomaly will be eliminated and that the amendment., to be moved by the honorable member for Gippsland will be accepted. Harness and saddlery are used to-day almost exclusively in the primary industries. Owing to the war conditions, . and particularly the severe petrol rationing, a . movement back to the horse has been noticeable in country districts, but it has not been nearly so marked as I should like. to see it. Saddlery had become almost a defunct trade in many areas, but now that there is some revival,, military demands are making it very difficult for saddlers to obtain supplies of leather. I trust that consideration’ will be given to the removal of harness and saddlery from the schedule in which they now appear.
The Second Schedule includes certain foodstuffs, but I must disagree with the Minister assisting the Treasurer (Mr. Lazzarini) that these consist principally of non-essential foods. The inclusion of tinned foods in this schedule will involve people in our outback in great hardship. I suppose that about three-quarters of the people living in remote places have to rely almost exclusively upon tinned vegetables. An impost of .10 per cent, on tinned vegetables, meats, fish, soups, pickles and so on is a serious discrimination against country people. The list even includes tinned and powdered milk, when mixed with cocoa or milk. In all the circumstances, I appeal earnestly to the Government to accept the proposals of the honorable member for Gippsland in relation to these items.
We realize that the Government must find the money necessary to finance the war, and we have not looked at these schedules with the object of finding out how many items could possibly be removed from higher to lower schedules; our purpose has ‘been to ensure that anomalies shall bc corrected as far as possible, and that undue hardships shall not be inflicted upon particular sections of the people. I make my plea especially in the interests of country people.
.- Statements have been repeatedly -made during this debate that indirect taxation falls most heavily upon .families and the poor section of the people. A careful scrutiny of the sales tax schedules entirely fails to reveal any justification for such a sweeping generalization, for the items which appear in the schedules covering the .more highly taxed’ goods show clearly that the tax does not bear with undue hardship upon poor people or large families. ‘Indirect taxation does not necessarily ‘impose heavier burdens on the’ poorer classes of the community. In support, of this statement. I invite honorable gentlemen ‘to consider the division headings of the-Third Schedule. Division I. covers jewellery, precious stones, crystal, pottery, cutlery, and travelling and fancy goods. With the possible exception of cutlery, not any of those items are of very great consequence to poor people, and cutlery does not need to be replenished frequently. Division II. of the Third Schedule includes beauty and toilet preparations, and hair-waving apparatus.
– Does not a working girl need to have her hair waved? Mr. SOULLIN.- If she does, I have no doubt that she is prepared to pay for it. Division III. covers musical instruments, talking machines and wireless receiving sets.
– Surely the workers are entitled to have wireless receiving sets!
– Of course they are, but we must remember that we are living under war conditions and must raise revenue for war equipment. The next section includes motion picture projection and sound equipment, statuary, photographs and photographic equipment. The succeeding divisions cover furs, pleasure yachts and boats, sporting equipment, confectionery, toys and games, refrigerators and so on. The basic foods of the people are, generally speaking, exempt from sales tax and have been exempt from it from the beginning.
– What about tinned foods?
– The honorable gentleman referred in his speech to tinned milk, but tinned and powdered milk are not subject to sales tax. The powdered milk referred to in the schedule, and which doubtless the honorable gentleman had in mind, is a coffee mixture. In that respect, at any rate, the honorable gentleman was speaking from wrong premises. I admit that articles of clothing come within the scope of the sales tax, and that clothing is a big item, but there are difficulties in making distinctions in clothing. I realize also that there are great differences between the clothing required by the masses of the people and the finery frequently purchased by the wealthy. It may be thatsome day a genius will arise, who will be able to suggest an effective means to distinguish the essential from the nonessential in this regard, but so far that has not been found to be practicable. With the exception of a few condiment! it may be said that the basic foodstuffs of the great mass of the people are not liable to sales tax.
– Surely the right honorable gentleman will admit that tinned foods are a basic foodstuff of the people who live in the outback?
– I grant that, and there may ‘be good reasons for some further consideration of those items. My argument is directed particularly to the sweeping assertion that indirect taxation such as the sales tax imposes a specially heavy burden upon basic wage workers and men with families. That submission will not bear examination. Basic foods, I repeat, do not fall within the ambit of the tax.
Mr.Marwick. - What the right honorable gentleman says may apply to a compact State like Victoria, but it certainly does not apply to a State with a scattered population like Western Australia.
– I have already admitted that there may be some justification for further consideration of the position in relation to tinned foods, but I strongly rebut the contention that basic foods generally are subject, to sales tax.
– It is significant that the arguments that are being advanced from this side of the House on this occasion are similar to the arguments advanced from this side, irrespective of the political party that may be sitting here.
– The honorable gentleman’s- interjection suggests that he and his colleagues can only re-echo the views expressed by some members of the Labour party; but I am not concerned about what party utters such an argument. I am concerned with the facts. Because the facts are not in accord with the views being expressed by the honorable gentlemen opposite. I offer my opposition to what has been said. Indirect taxation is not necessarily a burden on the mass of the people in poorer circumstances.
– Then does the sales tax fall chiefly upon people who are already paying direct taxes?
– Honorable gentlemen opposite have been remarkably inconsistent in their arguments this morning. First it was argued that men on small wages were being allowed to escape taxation. Now it it is being contended’ - the Leader of the Opposition (Mr. Fadden) in particular was most vehement in his speech - that the sales tax is a heavy imposition on men with families.
– I said that the tax fell more heavily on married men than itdid on single men.
– A few moments earlier the honorable gentleman said that married men with families ‘ should pay more in taxation than they were doing, because they would be receiving the benefit of child endowment.
We need in war-time a balanced system, of taxation. The theme of many speeches recently delivered in this House has been that the people should be allowed only a. reduced purchasing power for non-essentials, in order that such production may fall and our resources be diverted to war production. An examination of our national economy shows clearly that thousands of luxury articles are being purchased to-day. As we are in the middle of a great war, it is proper, in my view, that those who make such purchases should be prepared to contribute more heavily to the revenue by way of sales tax, in order to assist the Government to obtain money to carry on its war effort.
Sittingsuspended from 12.43 to 2.15 p.m.
.- This measure should be examined from two standpoints. First, we should consider whether it conforms to principles with which we agree. Then we should consider whether it will bear out those principles upon which it is founded. The question which mainly exercised my mind was whether indirect taxation is the proper form of taxation to employ in wartime. I have come to the conclusion “that direct taxation is the only sound system in a time of stress. I believe this because the incidence of direct taxation -upon any class of people can be easily established. This is not true of indirect taxation. Many different views regarding the incidence of indirect taxation upon various groups of incomes have been submitted by honorablemembers. I have- gone to some trouble in an ‘endeavour to ascertain the truth, and I have consulted the opinions of many experts. The result of my investigations has been vague and somewhat inconclusive. The Prime Minister (Mr. Curtin) stated last year, when he was Leader of the Opposition, that the incidence of indirect taxation on the lower ranges of incomes was about 15 per cent, or 20 per cent. Many writers have estimated that it is a great deal higher than that. But, .from the best information that I have been able to obtain, it would appear that the incidence of indirect taxation represents between 5 per cent, and 10 per cent, of the income of the individual. Apart from the difficulty of estimating this level, the chief disadvantage of indirect taxation is the inequality with which it bears upon families. Other honorable members have spoken on this matter already, and I shall not deal exhaustively with it. The right honorable member for Yarra (Mr. Scullin) said that he considered that the views expressed by honorable members on this side of the House were greatly exaggerated, because many of the items affected by this measure did not enter into the ordinary cost of living and should be regarded as luxuries. The right honorable gentleman .was right up to a point. A large number of items in the schedules must be classed as luxury goods, and therefore they do not affect the cost of living in any way. But many of the other items, although they do not affect the cost of living directly, have an indirect effect upon it because they enter into the costs of production of other articles which are consumed by the population.
– Is that not true of direct taxation also?
– I do not believe it to be.
– But it is.
– Direct taxation affects costs of production only to a limited degree. This measure must inevitably increase costs, and thereby increase the difficulties with which we are faced in maintaining proper standards of living and wages. That is the most undesirable feature of any form of indirect taxation… It introduces a factor into the ordinary, life of the people which, if it is allowed.’ to operate to any -great degree, results in: industrial . unrest . and dissatisfaction- amongst the lower groups of wage-earners. For that reason, indirect taxation should be avoided as far as possible.
This measure will accomplish two objects. The first is the raising of revenue. The second - I do not know whether the Treasurer (Mr. Chifley) had it specifically in mind when he prepared the bill - is the reduction of consumption of certain luxury goods, because the resultant higher prices will discourage people from buying them. I should like to see taxes on luxury goods increased to a much greater degree than is proposed in this measure. Artificial eyelashes are specified in the schedules; I imagine that most people can do without them. Furs comprise another item; people can well do without them also. An examination of the complete list of articles affected would disclose a number of other items which might safely be subjected to heavier taxes, so that consumption of them would be reduced. That, of course, would affect the volume of labour employed in retail stores, and factories which are producing these articles. The increased imposts on some of the items specified in the schedules will certainly cause increases of the cost of living, although a cursory examination might not lead to that conclusion. I refer to such things as baskets, umbrellas, lamps of various sorts, and rubber stamps, all of which are used partly by individuals, and very largely by business firms. The imposts proposed on those articles might well be reduced, if not removed altogether.
I congratulate the Government on the removal from the schedules of certain articles concerned with primary production. ..Among these are windmills, and other items connected with water supply. I support the amendment proposed by the honorable member .for Gippsland (Mr. Paterson) in relation to such items as fishing equipment. The fishing industry is experiencing hard times and is in need of all help that can be given to it. The Assistant Minister (Mr.’ Lazzarini) has intimated that fishing equipment will be put into .the .Second Schedule, which provides for a sales tax of 5 per cent. I should like the Government to go farther than that, and remove the tax altogether. Not only are hooks, lines, sinkers and nets expensive at present, but also they are hard to obtain. Therefore, any reduction of their cost would be of great assistance to the industry as a whole. The second class of goods mentioned in the amendment proposed by the honorable member for Gippsland includes pipes and drainage accessories for sewerage. I support the honorable gentleman’s proposal in this connexion. Many new sewerage undertakings have already been commenced. In my electorate alone a number of municipalities have recently begun sewerage works, and it would be unfair to load them with additional costs, in view of the fact that wages and other costs are already at a high level. A reduction of tax on items in Division IX., such as axes, tomahawks and harness, has already been agreed to by the Government. I welcome that announcement. I refer now to iron and steel wire. It is well known that wire is practically unobtainable at present. Therefore, there is every reason for this commodity to be brought into Schedule 1, alongside barbed wire and wire netting.
Obviously, the Government must raise as much revenue as it can in these days, and I see no objection to it doing so at the expense of luxury articles. The rate of sales tax on such goods could be increased with benefit to the whole community. I suggest to the Treasurer that he consider bringing newspaper advertisements within the scope of the sales tax. Large sums of money are spent on such advertisements daily. Many of them deal with commodities, like patent medicines, which can only be regarded as luxuries in time of war. The imposition of sales tax on the advertisements would perform two functions - the raising of a reasonable amount of revenue, and the discouragement of the extensive sale of these articles. I believe that, the revenue derived from this source would be large, even if the rate of tax were comparatively low. Although this may not come strictly within the scope of the bill, I suggest also that revenue could be increased by imposing extra taxes on amusements. Such taxes would certainly not increase the cost of living in any way, and I believe that they would produce a reasonable amount of additional revenue.
– I agree largely with what the previous speaker has said. The sales tax is a form of indirect taxation, and it is particularly unpopular. I do not know that it particularly affects residents in my electorate, but, from many years of experience, I know that it is probably the most unpopular of all taxes because of the tremendous amount of detailed bookkeeping that it involves. This is an unsuitable time to increase its scope, because many expert bookkeepers are going into other occupations as the result of the war, and the extra imposts will add to the difficulties of business concerns in making the necessary returns and regroupings. I do not like indirect taxation. Taxation should be direct, and the people should be able to follow it. I carry the principle much further than sales tax. It applies very definitely to tariffs, which ordinarily are not opposed by honorable members opposite. Glancing through Hansard, I found that in 1931, during the Scullin Government’s term of office, the Minister now at the table (Mr. Lazzarini), who was then a member of a separate Labour group, made the following remark about a sales tax schedule then before the House: -
This tax will have to he paid principally by the poorer section of the community, for whom the Government does not appear to have any regard.
I am inclined, generally, to agree with him. It is undeniable that the sales tax is adjusted, as far as possible, to different sections; but in general its effect presses with undue severity on those who have the largest families, and these tend to belong to the poorer section of the community. Being now in charge of a schedule which increases the amount and effect of sales tax, of which he then disapproved, the honorable gentleman is not particularly consistent. The usual inconsistencies are discoverable in the schedule. Obviously some items ought to be more heavily taxed ; but in respect of the tax imposed on other items I have grave doubts. Of the first type the item, “ artificial eyebrows “, mentioned by the honorable member for Flinders, is an outstanding example. A humorist in the department has placed against this item the note “ These goods’ are now brought into line with artificial eyelashes “. How that can be accomplished, only the ladies may be able to explain. Nobody objects to party decorations, whether of a political or any other party, being more severely taxed. A justifiable item is “ tickets for admission to entertainments “. I regard with approval, also, the proposed tax on totalizators; even though it be small, it is a most suitable tax. Then there is the item “ wigs “. I had a moment’s doubt as to whether this might be a subtle means of preventing anybody else from wearing such a wig as you, Mr. Speaker, so adorn. It is, howover, a little hard that the unfortunate person who finds himself bereft of his hair should have to pay more than at present in order to procure a wig. Wigs are now included in the schedule for the first time, rather unnecessarily, because the result will not be to bring in a great amount of revenue.
In another category are necessary items, some of which were mentioned by the honorable member for Gippsland (Mr, Paterson). One that appeals to me was mentioned by the honorable member for Wentworth (Mr. Harrison). In respect of dental articles, the Government has been extremely inconsistent. Statement “ B “ that has been circulated, sets out that there is to be no alteration of the tax already payable in respect of - in general terms - all the dental appliances likely to be required for teeth and dentures; yet the same schedule provides that tooth-paste, dental-paste, dental-powder and other preparations of a kind used for the cleansing, sterilizing, fixing or holding of teeth or dentures, shall be taxed at the rate of 20 per cent, instead of the rate of 10 per cent. What is the use of going to the trouble of providing that people shall have good teeth, if at the same time it is made more difficult to obtain the means by which they may be kept in that state? Whether a large amount of revenue is involved, I do not know. Providing that a man shall have perfect teeth, and then making it more difficult for him to keep them perfect, is lamentable inconsistency. Incidentally, dental-powder is placed in the category “ toilet and beauty preparations and materials “. I had not previously heard that grandiose description applied to it.
Additional charges are to be made for the use of the telephone. When it is becoming increasingly difficult for the man-in- the-street to get about the country, this is hardly the time to make it more difficult for him to have a telephone.
The sales tax is increased on garden hose, which in the country serves a multitude of purposes, particularly in relation to irrigation of orchards and gardens, and, indeed, in connexion with firefighting operations.
Maps may be a large item in respect of schools, but I can hardly imagine that a university would purchase many of them. In these days, it is obviously desirable that the people should know something about maps. None of us is so conversant with the geography of the world as he might be; consequently, it is quite right that sales tax should not be imposed on maps.
The honorable member for Darwin (Sir George Bell), had he been here, would certainly have spoken on the subject of saddlery and harness. A number of us waited on the Treasurer about this; be received us in a very courteous manner and has. done something in response to our requests. I wish that he had gone further, and placed saddlery and harness on the same basis as other primary products. As an aid to transport, they would appear to be at least as essential as a producer-gas unit to the man on the land, and much more in the nature of a rural commodity; indeed, they are much more akin to wagons, carts, agricultural implements, and a wide variety of rural equipment, which are exempt. I hope that the time will come when saddlery and harness will be placed in the category of commodities to which it more truly belongs. I am informed that, since the war, the price of saddlery hardware has gone up from 60 to 100 per cent., thread 100 per cent, and leather 90 per cent. The Government should encourage the use of horses rather than petrol-driven motor vehicles, and even vehicles propelled by producer-gas units, which also use a quantity of petrol.
.- There are only three forms of taxation that I consider justified. They are the income tax, the land tax and the inheritance tax. The last-mentioned impost is known in this country as probate duty. All other taxes bear inequitably and unfairly upon the people, and affect only certain sections of the community. Sometimes they affect those persons only at certain periods of their lives. ‘Customs duties should be levied for protective purposes only and not for the purpose of raising revenue. Revenue duties, including excise duties, sales tax, and other indirect taxes should be obnoxious in a democracy ; but, unfortunately, the people have become accustomed to the sales tax. It was imposed as a matter of necessity during the years of the man-made depression, and was intended to be only temporary. The Labour party accepted it as a temporary expedient, because its platform now. provides that the sales tax shall be repealed as soon as practicable. The platform also provides that naval; and military expenditure shall be provided for by means of direct taxation. Unfortunately, we have not progressively reduced the sales tax; in fact, every government that has been in power since the depression has increased it. It is now proposed to raise an extra £3,000,000 this financial year by increases of this tax. It is true that the impost has been levied as far as possible upon the more wealthy sections, but the incidence of the tax is such that it also imposes a burden upon certain sections of the working class.
Australia is in urgent need of increased population. Young people should be encouraged to marry as early in life as they can and to have large families. Their duty to their country is to provide it with future defenders, but this bill contains nothing to encourage early marriages. On the contrary, it seems that everything possible is done under this and other sales tax legislation to postpone the marriage ceremony and to discourage it. A sales tax of 10 per cent, or 15 per cent, on cutlery must have a deterrent effect on young couples who desire to marry. The increase of the cost of building materials also must make it more difficult for them to set up homes of their own. I read in this morning’s issue of the Sydney Morning- Herald that’ the prices of certain houses have increased from £50 to £75 each, because of the increase of the sales tax on building materials. There is a shortage of houses in every capital city. It is true that in some country districts empty houses are to be seen, but, unfortunately, those towns do not possess industries which would provide employment for sufficient numbers of residents to enable all houses to be occupied. The demand for dwellings in the metropolitan areas cannot be satisfied, and legislation of this kind will make it increasingly difficult for young persons to purchase homes.
Even engagement rings carry sales tax. I see no reason why an engagement ring should be the subject of a heavy impost. Other forma of adornment might be regarded as luxuries, but. a young woman is entitled to look upon an engagement ring as more than a piece of jewellery. Some people regard vacuum cleaners, electric washing machines and carpet sweepers, which carry sales tax at the rate of 15 per cent., as luxuries, but I do not regard the modern amenities of life as too good for any of the people living in .a democracy. I see no reason why the wives of working men should not be encouraged to use labour-saving devices in their homes. I understand that even the axe with which a householder chops wood is subject to sales tax, and that even, certain forms of baby biscuits bear this tax at the rate of 10 per cent., whereas, incongruously enough, dog biscuits are tax free. If the sales tax is to be retained, its whole incidence needs an overhaul. There is ample justification for the appointment of a parliamentary standing committee to review regularly the incidence of this tax, and to suggest from time to time amendments that would improve the” lot of the people. I am afraid that before the end of the financial year the Government will be inundated with protests against these increases for which no provision was made in the Fadden budget. Those who have defended the increases have advanced what seem to be good arguments in favour of them, but I have mentioned some of the weaknesses inherent in this form of taxation. I hope that the Government will review the finances of the country during the Christmas recess, and will, early in the next period of this session, bring down amending legislation to reduce sales tax rates. No matter what care is taken in the framing of such a tax to place the burden on those who are well supplied with the good things of life, inevitably many persons of modest means will he harshly treated, and that is not in the best interests of the nation.
.- Having regard to all the circumstances, I feel that no objection can be taken to the proposed increase of sales tax rates. It must be borne in mind that this is practically the only way in which revenue from indirect taxation can be increased. We cannot expect to raise further sums from customs, duties. Indeed, the higher we raise the tariff the less we shall receive, because imports will decline. It is interesting to compare the returns from direct and indirect taxation before the war, and the expected returns under this budget. In 1939 receipts from indirect taxation - that is, customs and excise duties, sales tax and flour tax - amounted to £58,000,000. The expected receipts under this budget are £77,000,000. In 1939 receipts from all forms of direct taxation were £15,000,000; for the current financial year they are expected to amount to £80,000,000. Thus, while the receipts from indirect taxation have increased by a little over 12^ per cent., those from direct taxation are expected to increase by 500 per cent, as compared with 1939. It seems clear, therefore, that the Government had no alternative but to increase sales tax rates when it was found necessary to raise more revenue. The total amount raised by the sales tax last financial year was £19,792,000 ; this year the tax is expected to yield £25,900,000, an increase of £0,180,000, or nearly 33^ per cent.
It must be clear to honorable members that there is need1 for a comprehensive survey of our methods of taxation, both Commonwealth and State, in order to ascertain their effect, to discover how the burden is distributed, and whether the heaviest burden is being borne by those best able to pay. The honorable member for Flinders (Mr. Ryan) mentioned an entertainments tax. This is a form of taxation to which Parliament might well give some attention. I understand that, some years ago, an arrangement was made between the Commonwealth and State Governments under which the field of entertainments taxation was to be reserved for the States. For the various States the per capita percentage return from entertainments taxes is as follows: -
There is no entertainments tax in Queensland, and the question has frequently been asked there why the Commonwealth has not imposed a tax of that kind. The return of 1.07 per cent, shown in the table for Queensland is the result of the racing tax. Parliament should take a broad view of taxation problems, and deal with them scientifically. The present arrangement between the Commonwealth and the States results in haphazard methods of taxation which, in many instances, are unfair to the individual taxpayer.
It is generally agreed, particularly by those who are directly concerned with the collection of sales tax, that it is the most irritating form of taxation we have. Business people are put to a great deal of trouble in filling up forms and keeping special records in order to supply the information which the department demands, and the difficulties have been aggravated by the introduction of varying rates of tax. I recognize that, in the circumstances, it is necessary to tax luxuries at a higher rate. If the figures were available, I am sure that we should find that the cost of keeping records and preparing returns in order to comply with the provisions of the act is very great. A Brisbane merchant recently suggested that the taxation authorities should place in his establishment a competent officer to give rulings in respect of the sales tax, in which event he was prepared to pay the officer’s salary, but I understand that the department replied that it had not a man available for the purpose. That shows the difficulty experienced by traders in determining the rates which should apply to various commodities, as well as in keeping other records connected with the sales tax. In speaking of these difficulties, I am not criticizing the officers of the department. I realize the difficulty of the task which confronts them, but traders find even more difficulty in dealing with these problems.
As one with some experience of local government affairs, I appreciate the statement of the honorable member for Gippsland (Mr. Paterson) in relation to those public bodies which have entered into definite contracts to construct sewerage works and other undertakings. The honorable member suggested that they should be exempt from sales tax in respect of contracts which were started before the 29th October last.
– Exempt from additional tax.
– There are so many different kinds of public authorities that it is necessary to define the term “public authority”. For instance, a hospital might come under that heading.
– A hospital would not carry out sewerage or water supply schemes.
– No, except in respect of its own works. I can understand that if an amendment were made which would aPPlY to one public authority, other public authorities also would claim the same benefits.
The effect of the sales tax on persons who manufacture cakes and pastry in their homes and sell them locally was brought to my notice recently. Where the total annual value of such trade is over £500, these people are liable to a sales tax of 10 per cent. I should have thought that cakes and pastry made at home and sold locally would come within the classification of necessaries of life. I ask the Minister to give consideration to this matter. I do not know that it was intended that the sales tax should apply in such instances. Most of the people engaged in this class of trade are merely making a bare living, yet they have been called upon to pay additional Sales tax . ‘(
Until recently, it was not thought by the people concerned - and probably also by the department - that sales tax was imposed on wages and freight charges of ready-to-erect buildings. A purchaser of a home believed that he could buy a readytoerect building at the works of the manufacturer without having to pay sales tax on the freight or the expenses incurred in erecting the building. This is an important matter to home builders in Queensland, where buildings are sometimes transported long distances and in such cases freight and erection charges amount to a considerable sum and are added, to the other costs which have to he borne by the persons for whom the homes are constructed. It has been held that this tax shall be retrospective, but, unfortunately, many of the people who have undertaken this class of work entered into definite contracts on the basis that sales tax was not payable on wages and freight. In the circumstances, it is unfair that they should now be faced with bilk for sales tax amounting to considerable sums. I had a discussion with the exTreasurer (Mr. Fadden) on this subject some time ago, and he then undertook that, pending further consideration of the matter, the people concerned should proceed as in the past, and pay sales tax only on the cost of the buildings at the work* of the manufacturer.
These taxation proposals, like all proposals of a similar nature, are unwelcome, but I realize that the Government has no alternative but to secure more revenue from this source. It is the only means by which it will be able to get any considerable increase of revenue from indirect taxation.
– I compliment the honorable member for Lilley (Mr. Jolly) on his temperate remarks in connexion with this measure. The honorable member has displayed that spirit of co-operation which we on thu side extended to former governments when we were in Opposition. Listening to the remarks of the honorable member foi Wakefield (Mr. Duncan-Hughes) I was amazed to hear criticism of the present Government’s proposal to increase telephone rates, in view of the fact that it accepted in toto the proposals of the Fadden Government in this connexion. Such an attitude savours of inconsistency.
– The honorable member for Wakefield spoke of the sales tax on telephones, not on telephone rates.
– In my opinion, the proposed increase is justified in the circumstances now existing.
It is probably true, as has been stated during this debate, that the proposed increases of the sales tax will cause some anomalies, but it must be remembered that an absolutely fair basis of taxation has never yet been devised in any country. That is true of direct taxation, but the truth of the statement is more obvious when it relates to indirect taxation. I have no enthusiasm for the principle of the sales tax. Introduced by the Scullin Government as a temporary measure during the depression, the impost raised so much money that succeeding governments retained it. Many anomalies arose out of iiic sales tax and, from time to time, some of them have been corrected. . I am confident that if experience reveals that the present bill contains anomalies which inflict hardship upon any section of the community, the Treasurer will sympathetically listen to representations upon the matter and’, if possible, rectify the position.
Glancing at the comprehensive explanatory notes to this legislation, I was impressed with the amount of effort that departmental officers have expended upon the compilation of this information. The honorable member for Melbourne (Mr. Calwell) declared that the sales tax conflicted with the policy of the Labour party. When our platform was under consideration, we lived in normal times. In any case, the platform of the Labour party” was an expression of policy for guidance in a peaceful era. But the present is a -period of grave crisis, requiring extraordinary methods for the purpose of coping with the situation. The Prime Minister (Mr. Curtin) is just as familiar with points, of the Labour party’s platform as is any supporter of the Government.
– We may have to go even farther in order to meet the exigencies of the times.
– That may be true; but the Government is crossing its bridges as it com.es to them. The honorable member for Lilley admitted that money had to be obtained for the prosecution of the war and that, in the circumstan ces, the sales tax offered a very fair means of raising an additional £3,000,000. No honorable member is more conversant with the intricacies of sales tax than the right honorable member for Yarra (Mr. Scullin), who summarized the situation most aptly. He oan well recall the heartburning which was caused when the tax was imposed, and the efforts that were made in those days, as they arc being made now, in order to shield the workers from the effects of the impost. I defy any honorable member to show that the provisions of the bill will have a severe effect upon the purchasing power of the lower income groups by increasing the cost of the necessaries of life.
Reference has been made to the effect of increases of sales tax upon homebuilding. During the last few months, I have had an .excellent opportunity to examine this position. Admittedly, the housing problem in the metropolitan areas of our capital cities is acute. The difficulties are caused, not because of a general shortage of houses throughout the country, but because of the shifting of population from one centre to another. As the result of this migration, empty houses abound in some centres, whilst an acute shortage of accommodation exists in others. The problem .is by no means new. Had it been vigorously tackled during the depression, many of the existing slum areas could have been abolished. In these times, however, important war work must have priority over everything else. Australia is engaged in a life-or-death struggle with a powerful enemy, and we must finance production on a vast scale of war materials. Apart from the increase of sales tax on building materials, the construction of homes will be restricted by the difficulty of obtaining the materials and labour for the work. Spending by the public must be diverted from civil to war production. Although the policy of the Labour party is fundamentally opposed to the sales tax, I make no apology for supporting this bill to increase the imposts upon luxury goods in order to raise additional revenue for the waT effort.
.- I welcome this opportunity to make a few observations upon the principles of sales tax, and upon the necessity for relieving this legislation in future of many of the complications which have crept into it during the last ten years. The Opposition will not oppose the bill. The ‘Government requires an additional £3,000,000 at short notice, and this measure is one of the means of obtaining it. iSo far as I am concerned, there is nothing more to be said. Nevertheless, the fact that the Sales Tax (Exemptions and Classifications) Bill is now before the House for analysis enables me to seize the opportunity, which other occasions do not provide, to make a few observations about the measure. Throughout the House, there is an undercurrent of unhappiness about the bill. Some honorable members opposite have declared that the measure conflicts with the policy of the Labour party which, incidentally, introduced the sales tax ten years ago, and Opposition speakers are not satisfied with various provisions contained in it. Notwithstanding that, the bill will probably be passed after the Treasurer has explained items that have not received unanimous approval. That is all the more reason why, in the early part of next year, the Government should take the opportunity to overhaul the whole system under which the sales tax is imposed. At this time last year, or a little later, I had the opportunity to say the same thing from the other side of the House, and I was supported by members of the then Opposition. On that occasion the Government led by the right honorable member for Kooyong (Mr. Menzies) had introduced some sales tax measures which, if I remember aright, were supported by the then Opposition with the same spirit of cooperation that will mark our endorsement of the bill now before us. All honorable members then hoped that, before September of 1941 was reached, the sales tax system would be overhauled. The year 1941 has come and is rapidly going, and, unfortunately, nothing has been done in that direction. I can only express the hope now that before the budget discussion of 1942 takes place, this class of taxation will have : been given close attention by an all-party committee of honorable members of this House with a view to removing from it a good many of the complexities that exist to-day. I greatly regret that there is no prospect of the sales tax being abandoned. This tax is similar to many other forms of taxation that have grown up in this and other countries which have had small beginnings but which have developed according to the needs of the moment, and the urgencies of crises. Side by side with their development the complexities associated with them have increased until they become a difficulty to the community instead of a means of enabling the country to finance its obligations.
– They have flourished like the green bay tree.
– The green bay tree was a tiny sprig compared with some of our sales tax measures. I listened with great interest to the survey made by the honorable mem Der for Melbourne (Mr. Carwell) of some of the systems of taxation that operate in this country, and to the expression of his preference in regard to them. The honorable gentleman said that the inheritance tax, the direct tax on incomes and the land tax were the means by which the community should finance the administrative functions and other services to which it is committed. I do not want to go so far as to express that opinion. I am conscious of the fact that the revenue raised from those sources alone would finance the needs of the country iu normal times, but I am aware that, in order to meet our expanding needs, governments must look to new foi ma of taxation which extend the complications that already exist. The honorable member made a pathetic reference to the added cost of the engagement ring which a young man may give to a young lady in the future, to the influence of sales tax on the sales of these tokens of affection, and to the possibility that their higher cost may result in postponed or abandoned engagements according to the particular category in which engagement rings are placed for sales tax purposes. The honorable member will be surprised next week when we deal with the Gift Duty Rill to find that the engagement ring of the future may become subject to the special gift tax, and that the difficulties which he foresees are only commencing in this complicated system of ours. It was my object in rising to express the hope that this Parliament would, at its leisure, during the first half of 1942, make the review which evidently was intended last year, of the whole of the operations of the sales tax. The system of differential sales tax is imposing obligations on the trading community in Australia which I believe were not imagined when it was first introduced. It may not seem to honorable members to be a very serious matter, but actually it is a matter of considerable difficulty to traders. The reference of the honorable member for Melbourne to the different classes of taxation that operate in this country, reminds me that there is a continual fight among sections of the community in a country like Australia as to what taxes should be imposed; but when the sales tax comes into play, the fight is renewed amongst every section of the community as to the categories in which their goods should be placed, or whether they should be excluded from all categories. That is one of the bad influences of the sales tax. The imposition of sales tax is fraught with unimaginable difficulties. Honorable members may think that” these difficulties are taken in their stride and are swallowed up in the system and eventually disappear; but I assure them that that is not so. Costs of living in this country are increased by the machinery costs of administration of the sales tax legislation. Many big organizations in Australia are compelled to engage permanently large staffs which deal only with the complexities of the sales tax legislation. The whole of that administrative cost finds its way onto the shoulders of those who purchase the goods. For that reason, I urge the Government to consider means by which the differential system can be abandoned. I ask the House to go further and, in due course, to consider whether the sales tax itself should not be abandoned in favour of the simpler system of taxation known as the turnover tax. I shall not endeavour at this stage to explain the difference between the sales tax and the turnover tax, or the more simple means by which the latter can be applied. The Government will find, I am sure, that honorable members on both sides of the House will be glad to give it the benefit of whatever knowledge they possess on the advisability of the change, and will be willing to take evidence from those who have seen the turnover tax in operation. These are the means by which this Government can perform a service of great value to the community at the present time. I have watched the pyramiding of costs, due to the operation of the sales tax. I have seen the tax at the rate of o per cent:, 8^ per cent, or 10 per cent, added to the cost of goods, and when those goods passed through the retail system I have noticed that the on-cost charge by the retailer or the second wholesaler includes a percentage, not only of the first cost of the goods, but of the sales tax as well. That feature of a tax is unfair from the point of view of the consumer. It is a defect inherent in the sales tax system. The tax is applied in the first sale, and from that point the cost of the goods carries the additional burden until it reaches the consumer. This House has had eleven years’ experience of the sales tax. I believe that the year 1942 would provide an opportunity to this Parliament to overhaul this form of tax thoroughly. I am not sure that the sales tax will be replaced; but if it is, it will be replaced by a tax that will produce a somewhat similar revenue. However, I am convinced that it should be examined from the point of view of simplification in application and also as a producer of revenue.
– I am rather surprised at the temerity of honorable members opposite in stonewalling this measure as they have done this afternoon. Most of the arguments adduced by them when speaking on the budget were to the effect that the workers’ incomes have not been taxed and that the Government was taxing only the wealthy. That was the argument then put forward by the Opposition; to-day, however, they grumble at this tax because it places an imposition on the workers. Their attitude is 30 inconsistent that I can only describe it as arrant hypocrisy. *
– Order ! The expression “ arrant hypocrisy” is un-parliamentary.
– I withdraw the words to which exception has been taken. However, if that has not been the reason why so many honorable members opposite have spoken on this measure what can really be their reason for holding up the bill? I have heard a number of views expressed this afternoon in regard to the incidence of the sales tax, but these views reveal a complete lack of knowledge of the subject. The real purpose of most taxes in war-time is to transfer purchasing power from the people to the Government in order that man-power and resources can be diverted from the production of peace-time goods to the production of war materials. That diversion can be effected through taxation in two ways, namely, by a direct tax, or in a specific way such as by the imposition of a sales tax on specific commodities. The advantage of the latter method over the former is that when individual incomes are reduced by means of direct tax the individual taxpayer may discontinue buying certain commodities of which there may be a surplus but the consumption of which the Government really has no desire to reduce at all. In that way general income taxation may fail to achieve the very purpose which the Government seeks to achieve. On the other hand, however, when the Government imposes a sales tax on a specific item, it definitely discourages the production and consumption of that item. I have in mind one particular item concerning which I have made investigations recently. On a visit to the Forest Products Division of the Council for Scientific and Industrial Research in Melbourne it was pointed out to me that certain difficulties were arising in the provision of timber required for the production of matches. The Council for Scientific and Industrial Research undertook a series of experiments as the result of which it found that Australian timbers could be utilized for the production of matches. Those investigations revealed what a large quantity of timber is utilized in Aus tralia for the production of matches alone. Timber is an article which is in very short supply: but it is urgently needed for war purposes such as the construction of military camps, ammunition boxes, &c. It is needed for 100 different purposes in our defence organization. Consequently, any action we can take in order to reduce the ordinary consumption of timber will help our war effort. In regard to timber the figures are very interesting. I propose to quote them, together with the observations of the Director of the Forest Products Division of the Council for Scientific and Industrial Research. The total quantity of timber utilized in Australia for the making of matches is 10,250,000 super, feet per annum.
– I ask the Minister to connect his remarks with the measure under consideration.
– A sales tax is to be imposed on matches, and I am showing how the imposition of that tax will reduce the consumption of timber which is in very short supply and urgently required for war purposes. If we could prevail upon the people of Australia to limit their consumption of matches by half the usual quantity we should save approximately 5,000,000 super, feet of timber per annum. I chose timber as an example in order to show how a tax on a specific commodity can have a very much better effect in securing an increase of the war effort through the diversion of resources to that effort than a general income tax. I should like to say a little about the incidence of sales tax. It is generally supposed that the incidence of this tax falls upon the consumer; but that is not the case. The incidence of this tax depends upon the kind of articles to which it is applied. In point of fact, the incidence of sales tax when applied to luxury goods falls very largely on the seller and not on the consumer at all. The incidence is regulated by what is known as the elasticity of supply and demand. If an item be in the luxury class, the incidence falls on the seller; but where the demand is inelastic, such as is the case with food products which are always required by consumers, the incidence falls on the consumer. The increases of sales tax imposed by this measure have nothing whatever to do with foodstuffs and commodities which are generally consumed by the working classes; they are confined to luxury articles.
– The honorable member would not call tinned foodstuffs luxury goods.
– Whether or not an article is a luxury depends on the circumstances, and now that we are so short of tinned plate, tinned food is a luxury. No authority on public finance will deny that when sales tax is imposed upon a luxury item its incidence falls largely upon the seller. Since all the articles in this schedule are within the luxury class or the near-luxury class, it is obvious that the incidence of the tax will fall largely upon the seller. The reduction of purchasing power which it is intended should be brought about in this case by imposing sales tax on specific items will be confined to the seller. It is that reduction of purchasing power which is required in our war effort.
– If the incidence of the tax does not fall upon the consumer, how can it reduce the consumer s purchasing power?
– I am glad that the honorable member has raised that point. Let us consider the production of a luxury article upon which sales tax is imposed. As I ha,ve said, the incidence of the tax will fall on the seller. He will make less profit and, therefore, his purchasing power will be reduced. He will be able to buy fewer commodities than he could in the past, and so the productive capacity which formerly was engaged in the manufacture of these commodities will be available for war purposes. I hope that that answers the question raised by the honorable member for Gippsland. The arguments which I have advanced are generally accepted by experts on public finance. The reason why the incidence of sales tax upon luxury items falls upon the seller is obvious. If, for instance, my wife was considering buying a fur coat, and suddenly a sales tax of 50 per cent, was placed on fur coats, she would realize that she could get more value for her money in some other direction. Price increases brought about by the imposition of sales tax tend to prevent people from buying luxury articles. That is a reasonable argument.
– It is an unsound one.
– On the contrary, it is quite sound. In support of my contention I shall quote one of the leading experts on public finance, Dr. Dalton, who is Economic Advisor to the British Government.
– He is a Labour politician.
– Yes, but he is recognized as one of the world’s foremost experts on public finance. The fact that he is a Labour Minister does not disqualify him from being a sound economist. He says -
Before leaving the subject of incidence, we may notice a few mistaken ideas, which are sometimes put forward.
It is sometimes argued that the incidence of all taxes on commodities is entirely on consumers, because the effect of imposing a tax on any particular commodity is to reduce the profits obtainable from its production and sale below the “ normal level “ of profits elsewhere, and that its production will, therefore, be restricted, and its price consequently raised, until its producers and sellers are again making “normal profits”. When this has come about, it is argued, its producers and sellers will be in the same position as producers and sellers elsewhere and, therefore, they will have shifted the whole incidence on to the consumers.
A preliminary objection to this argument is that the conception of “ normal profits “ corresponds very imperfectly with the facts of reality. There is, of course, a constant tendency for both workers and capital to move from points where remuneration is low to points where it is high. There are, however, many obstacles to movement, some of which prove insuperable for considerable lengths of time.
But a more fundamental objection is that the argument takes no account of differences in the elasticity of demand for different commodities. Suppose an equal tax per unit to be imposed upon two commodities, for one of which the demand is considerably more elastic than for the other. Then, even when the producers of both are again making “ normal profits “, the price of the first will have risen, other things being equal, considerably less than the price of the second.
Dr. Dalton develops the argument that I have put before the House, namely that when sales tax is imposed on luxury items - I submit that the schedule now before honorable members consists mainly of luxury items - the incidence of the tax does not fall upon the consumer to any great degree.
– But much more money will be left in the hands of the consumers.
– That is true, but the money is taken away in other directions. When money is to he subtracted from the community to reduce purchasing power - that is the object of all taxation - consideration must he given to the whole volume of money in the community; not only the purchasing power in the hands of the buyers, but also the purchasing power in the hands of the sellers arising from the profits which they make. What I am putting to the House is this : When sales tax is imposed on luxury items, it reduces the purchasing power of the sellers of those items because it reduces their profit. In addition to that, should their profits drop so far that they cannot carry on in business, the producers of the luxury items will have to find some other avenues of production; they will be forced to embark upon some other form of productivity which will increase the war effort.
– They might go on the dole.
– The right honorable member for North Sydney (Mr. Hughes) has had much experience of people being on the dole during his regime.
– That is not so; there was no dole.
– Possibly the right honorable gentleman - left that responsibility to the State governments.
– The Minister is not helping the position.
– I am endeavouring to put before honorable members some reasons why this schedule should be passed. I am sorry if I have exaggerated the position, and if that be the case I apologize; but I should like to point out to the House that the arguments advanced against this measure are based on false premises.
– The Minister has been absent from the chamber.
– I have been in the chamber for the greater part of the afternoon. I trust that what I have said will enable honorable members to take a clearer view of the incidence of sales tax, and that they will pass this measure, for I believe that its passage will result in a reduction of the production and purchase of luxury items, and thus ensure the diversion of skill and labour power to the war effort.
.- If the Minister for War Organization of Industry (Mr. Dedman) had refrained from participation in this debate, this bill would probably have been passed by now. I wish to make it clear to the Government that we, on this side of the chamber, are not prepared to accept lectures of the kind just delivered to us by the Minister. I did not intend to take part in this debate, but I can assure the honorable gentleman who has just resumed his seat that if he continues to deliver curtain lectures of the kind he has just given, he will be asking for trouble. If he, or the Government, want trouble, I assure them that they will find it.
– Is the honorable member usurping the position of Leader of the Opposition?
– I do not give a hang for any leader in this House. Now that I have risen, I shall say two or three things concerning the sales tax. First, let me observe that if sales tax were payable on common sense the Minister for War Organization of Industry would never have to pay a penny. We have listened from time to time to long-winded and learned disquisitions from the honorable gentleman as to how the world should be fashioned. I am reminded of a question which the Lord asked Job - “ Where wast thou when I laid the foundations of the earth?” If a foundation stone were wanted for the world to-day I would recommend the Ministry to examine the Minister for War Organization of Industry from the shoulders up. It would find ample blank space for a good inscription. It should be obvious even to the Minister, who has been long enough in this Parliament to observe one or two things, that it is impossible to tax luxuries, and so prevent people from buying them, and, at the same time, fail to leave money in the pockets of the consuming public. The honorable gentleman seems to have entirely overlooked that fact. In the course of his speech he read us a fairly long quotation from a book. We are becoming accustomed to honorable members opposite making long quotations from books. It would almost appear as though they had no mind of their own on any subject and had to fall back upon books, in order to find something to fill the pages of Hansard.
I must say that every one of us on this side of the chamber deeply and sincerely appreciates the approach of the Treasurer (Mr.Chifley) to the financial measures that have been placed before the House. His attitude has been most helpful and courteous and we have no complaint to make on that point. We understand that his view is that it is necessary to divert the spending power of the general community for the purchase of ordinary goods into channels which will assist the nation’s war effort. Honorable members of the Opposition have not adopted the attitude that they will oppose everything that the Government has introduced, and slash at everything put before them; for we know that the times are difficult and we do not desire to harass or embarrass the Treasurer. Neither do we wish to have to listen to speeches of the kind just delivered by the Minister for War Organization of Industry. The Government will have to go a good deal further than merely increasing the rate of sales tax if it wishes to divert commercial activities from a peace-time to a war-time basis. That end will not be achieved by an increase of the sales tax. The Government will simply have to direct that certain industries be discontinued in the interests of the nation’s war effort. That course would make unnecessary any legislation relating to the sales tax on the items affected. The honorable gentleman who has just resumed his seat made reference, by way of illustration, to a hypothetical purchase of a fur coat by his wife. That was a forced argument and we shall get nowhere by such discussion. The argument, let me emphasize, was introduced from the treasury bench, and not by the Opposition. I consider that it is the bounden duty of the Government to direct that fur coats ‘shall be neither manufactured nor sold. That would be an honest and straightforward method to meet the situation which faces us. The Minister for War Organization of Industry should by now be able to tell us something of the Government’s intentions in regard to his department. If he were not able to do so by reason of his own recommendations, he should be able to do it by drawing upon the resources of the brain trust which surrounds him.
I am pleased that the Government has taken action to increase the sales tax, and as there are other matters in this connexion to which I desire to refer, I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Motion (by Mr. Curtin) proposed -
That the House do now adjourn.
– This morning in the House, I asked the Prime Minister (Mr. Curtin) a question based on the following report which appeared in to-day’s issue of the Sydney Morning Herald : -
PETROL UP1d. TO-DAY.
Announcement in Canberra.
An increase of1d. a gallon in the price of petrol, to operate from to-day, was announced late last night by the Minister for Customs (Senator Keane).
He said that the increase was to provide for power alcohol now being produced in New South Wales and Victoria at a higher price than ordinary petrol. The increase would be used to “ even up “ costs.
The Minister for Supply and Development (Mr. Beasley) gave me a lengthy reply to my question, but admitted that he was unable to say whether it was a fact that, at the time I asked my question, a determination by the Prices Commissioner had not been issued. I questioned the legality of any increase of the price of petrol in the absence of such a determination. The Minister has now had an opportunity to make inquiries from the Minister for Trade and Customs (Senator Keane), and in order to clear up the whole position, I ask him whether he will be good enough to inform the House whether the price determination has been issued. If it has not been issued, what is the position of petrol retailers who may have charged the increased price, and of motorists who may have paid it?
– On the 6th November, the honorable member for Melbourne (Mr. Calwell) drew my attention to certain matters, and protested against army officers controlling or directing investigations into alleged criminal matters which are usually reserved to the civil and police authorities. I informed the honorable member that I would see whether existing ‘arrangements should be enforced or, if necessary, new arrangements made whereby the civil power and the military authorities should exercise “jurisdiction only in their defined and proper spheres. I have perused the files dealing with searches of private homes and the seizure of documents therein. For the most part, these so-called “ raids “ were confined to Queensland. There is nothing in the files to show that, prior to such raids, any officer of the Attorney-General’s Department was consulted. In examining the facts dealing with the raids carried out over the past twelve months, I find that the majority were effected either under the provisions of the National Security (General) Regulations, or the National Security (Subversive Associations) Regulations. In all but one case, the civil police participated in the searches. However, they were often accompanied by a member, or members, of the military forces, and it is this fact which has caused protest and resentment in many quarters. The files also suggest that very few of the “ raids “ were justified by the meagre results where papers or pamphlets were seized. It appears that most of them had been published long before the outbreak of war between Germany and Russia. Many of the pamphlets contained panegyrics on Soviet Russia and its programmes of construction, and included typical Communist arguments against any declaration of war by Great Britain against Soviet Russia. It is obvious that, now that Russia is our ally, the character of such documents must be looked at in the light of the completely altered international situation. The matter of Field Security Police is quite distinct. This body is in no way connected with the Security Service or the Commonwealth Investigation Branch, or with any officer of my department. The Field Security Police is a purely military body, comprising enlisted soldiers. In the main its duties are required to be confined to action against enemy agents and others who are dangerous to military security. I understand that the Field Security Police Force is not intended to function so long as the civil police are in a position to carry out their duties, and it is expected that this rule will be rigidly adhered to in the future. There appears to be some misapprehension as to the status of Colonel Longfield Lloyd, Director of Security Service. Except for the period from 1935 to 1940, when he was Australian Commissioner in Japan, he has been an officer of the Attorney-General’! Department engaged in civil duties since 1921. The Security Service and the Commonwealth Investigation Branch are both branches of the Attorney-General’* Department, and their officers are not under the control of the Department of the Army, although the Security Service has close liaison with all of the services. In the circumstances, I propose to confer with my colleague, the Minister for the Army (Mr. Forde), with a view to ensuring that, as far as possible, no person shall direct searches and seizures of the kind which I have described without the prior approval of the responsible civil power. I am certain that we shall be able to insist upon a satisfactory line of demarcation between the duties of the . military and civil authorities.
– in reply - An increase by Id. per gallon of the wholesale and retail prices of standard grades of petrol, and the introduction of a uniform maximum price for all grades of petrol, were announced to-day by the Commonwealth Prices ‘Commissioner, Professor Copland. The reasons for the increase were twofold. The production of power alcohol is increasing and its cost of production is higher than the landed cost of imported petrol. After discussions between the Minister for Supply and Development (Mr. Beasley) and the
Minister for Trade and Customs (Senator Keane), it was decided to spread the added cost of power alcohol over the price of petrol generally. It was considered to be most desirable to stimulate as much as possible the production of local spirit, even though its cost might be greater than the cost of imported spirit. The second reason for the increase was the higher landed costs of petrol. Professor Copland has made the following announcement: -
The net effect of this decision is to reduce still further the gross profit margin of the companies compared with their pre-war position. With petrol rationing in force and higher cost of distribution, the increased price does not return any additional net profit to the companies.
The effect of the adjustment is that prices of power alcohol blends in New South Wales and Victoria, where the price is at present l½d. a gallon higher than standard grades, will be reduced by½d. a gallon. In southern Queensland, where the price of power alcohol blends is1d. a gallon higher than for standard grades, there will be no alteration of the price of power alcohol blends. In central and northern Queensland, where power alcohol blends are being sold at standard prices, there will be an increase of1d. a gallon. Power alcohol blends are not marketed in the other States at present. The price of standard, grades will be increased by1d. a gallon over the whole of the Commonwealth.
The announcement in certain newspapers that the price of petrol would rise from this morning was unauthorized, and I acknowledge that it has caused some confusion. It was intended that the increased price should operate from Saturday morning, and that the normal practice of advising the Deputy Prices Commissioners and the trade at the close of ‘business to-day should be followed. I express regret that the announcement was made in the press a little earlier than was intended.
Question resolved in the affirmative.
The following papers were pre sented : -
Lands Acquisition Act - Land acquired for Defence purposes -
Alexandria, New South Wales.
Port Melbourne, Victoria.
House adjourned at 4.6 p.m.
The following answers to questions were circulated: -
n asked the Prime Minister, upon notice - 1. (a) Has his attention been drawn to the report of the former Controller of Salvage for New South Wales (Honorable R. W. D. Weaver) to the Parliament of that State showing that Australian Paper Manufacturers’ Limited has been exploiting the work of public-minded citizens and charitable organizations in regard to salvage of waste paper?
Did the then Prime Minister agree to give the controller the powers requested?
n. - The answers to the honorable member’s questions are as follows : - 1. (a) Mr. Weaver’s views on the collection of waste paper have been the subject of public discussion in the Parliament of New South Wales.
LINCOMBE Aero Engine Factory.
asked the Minister representing the Minister for Aircraft Production, upon notice -
What is the total outlay to dateby the Government on: (a) the aero engine factory at Lidcombe; and (b) any other aircraft factories in respect of which Commonwealth Aircraft Corporation Limited has had the management!! 2. (a) When was the corporation first entrusted by the former Government with any such management?
As the basis of remuneration to the corporation is stated tobe “ on production cost plus an agreed management fee “. why are details not forthcomingas to the exact basis of such remuneration? 4. (a) What other terms and conditions have still to be agreed upon or form the subject of active negotiations?
– The Minister for Aircraft Production has supplied the following answers: - 1. (a) To 3 1st October- £927,942. (b) The corporation has not had management of any government factories. 2. (a) The former Government entrusted t he establishment and operation of the factory to the Commonwealth Aircraft Corporation on the 15th November, 1939.
Machine operations commenced in March, 1941, but for the purposes of the agreement it is proposed that the management of the factory by the corporation will he deemed to have commenced on the 1st July, 1941.
Strike at Lithgow Small Arms Factory.
n-Hughes asked the Minister for Munitions, upon notice -
– The answers to the honorable member’s questions are as follows : -
n . asked the Prime Minister, upon notice -
Will be next week make time available for a discussion and decision upon Notice of Motion No. 2, General Business, standing in the name of the honorable member for Hindmarsh ?
– -Having regard to urgent matters requiring the attention of Parliament it may not he possible to comply with the honorable member’s suggestion, which, however, will be kept in mind.
n asked the Minister for Health, upon notice -
– The whole matter of the milling of flour in relation to the content of vital food elements has been under close investigation during the whole of this year. A staff of chemists has been employed on the necessary investigation and analysis. This work is nearly completed and the results and conclusions will be available before the end of this year.
l asked the Prime Minister, upon notice -
What salaries, fees, and travelling expenses were received by each member of the Commonwealth Grants Commission for the financial years 1939-40 and 1940-41?
– Information is being obtained and will be furnished to the honorable member as soon as possible.
n asked the Minister for Social Services, upon notice -
– The answers to the honorable member’s questions are as follows : -
l asked the Prime Minister, upon notice -
Will he lay on the table of the House copies of the documents handed to him by a former officer of the Prime Minister’s Department relating to the formation of the Australian Democratic Front and other matters?
– The documents referred to are not such as should be tabled.
n. - On the 12th November, the honorable member for Newcastle (Mr. “Watkins) asked me a question, without notice, as to whether I would comment upon a statement by the Minister for Works in New South Wales to the effect that the Australian Shipbuilding Board had refused to recommend a site at Newcastle for the purpose of shipbuilding, or whether I would obtain a report from the board on the subject. On that occasion I informed the honorable mem ber that the Shipbuilding Board had been in communication with the Government of New South Wales regarding a site at that city. I now wish to inform him that a report and recommendation concerning financial assistance to the New South Wales Government in connexion with that Government’s projected engineering and shipbuilding undertaking at Newcastle has been furnished by the Australian Shipbuilding Board. The report is now in the course of transmission to me from the Director-General of Munitions, and it will receive consideration at the earliest possible moment.
Launceston Railway Workshops Annexe.
n. - On the 12th November the honorable member for Bass (Mr. Barnard) asked a question, without notice, as to the probable date on which the Launceston railway workshops annexe would commence production. I am now in a position to inform the honorable member that it is expected that the annexe will be in operation by the 1st December next. In common with other projects, production from this annexe has been delayed due to lack of forgings and a shortage of machine tools and gauges. These difficulties have now been surmounted, and with the exception of a few minor items, all the necessary machinery has been despatched to Tasmania.
Case of LANCE-CORPORAL Hughes.
asked the Minister for Repatriation, upon notice -
t. - The answers to the honorable member’s questions are as follows : -
j, asked the AttorneyGeneral, upon notice -
Will he introduce legislation in thenext sittings of the Parliament to deal with the formation and activities of trading companies?
-i strongly favour the passing of a uniform company law for the Commonwealth. An opinion has been expressed that this Parliament cannot validly pass such a uniform company law, but it is an opinion which I do not share. It is not possible to indicate now when such a bill can be introduced, but I shall give consideration to the question of its preparation with a view to its acceptance by my colleagues, and its introduction.
k asked the Minister for
Supply and Development, upon notice -
– . The answers to the honorable member’s questions are as follows : -
The Minister for Trade and Customs has been requested to furnish details required for questions 7. (b), 8. and 9. These will be furnished as soon as ‘possible.
l asked the Treasurer, upon notice -
Will he use the National Security Act to limit the rate of interest that may be charged in respect of the following transactions to a maximum of 12 per cent, per annum: - Money lending, cash orders, hire-purchase agreements, and time-payment agreements?
– Cash order and hire purchase systems are at present under consideration by the Government, and the suggestions made by the honorable member will be given consideration.
n asked the Minister for Supply and Development, upon notice -
– The answers to the honorable member’s questions are as follows : -
d asked the Minister in
Charge of Scientific and Industrial Research, upon notice -
– The answers to the honorable member’s questions are as follows : -
Cite as: Australia, House of Representatives, Debates, 14 November 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19411114_reps_16_169/>.