House of Representatives
25 November 1941

16th Parliament · 1st Session

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

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

page 808

QUESTION

AUSTRALIAN IMPERIAL FORCE

Air Mails to Malaya - Sufferers from Peptic Ulcers - Christmas Leave.

Mr COLLINS:
HUME, NEW SOUTH WALES

– Will the Minister representing the Postmaster-General investigate the report from its Singapore correspondent published to-day by the. Sydney Morning Herald that the Australian Imperial Force in Malaya is complaining bitterly of the irregular arrival of air mails from Australia, which they attribute to their being deliberately held up at this end, for censorship reasons, when convoys are departing from Sydney ?

Mr LAWSON:
Minister Assisting the Postmaster-General · BRISBANE, QUEENSLAND · ALP
Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

-Has the Minister for the Army read in to-day’s press the report that Dr. Gertrude Grogan had stated, in evidence at an inquest held in Sydney yesterday, that men suffering from peptic ulcers had been passed as fit for the Australian Imperial Force? Will the honorable gentleman call for a report concerning Dr. Grogan’s evidence, and make a statement on the subject to Parliament this week?

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

– I thank the honorable member for bringing this matter to my notice. I shall call for a report immediately and advise him of the result a soon as possible.

Mr MULCAHY:
LANG, NEW SOUTH WALES

– Is the Minister for the Army aware that members of thr Australian Imperial Force in camps in Victoria who will be granted leave during the Christmas holiday period and who desire to spend their leave with their families have been notified that non-commissioned officers in uniform will not be allowed to travel on interstate express trains during their leave? I ask the Minister to make reasonable arrangements to enable these men to reach their destinations during their period of leave.

Mr FORDE:

– I am not aware that the position is as stated. It was agreed by mc some time ago that sufficient Christmas leave should bc granted to members of the Forces to enable them to have at least four days at home during the Christmas period, instead of three days as was granted last year. This Government has also agreed to pay the fares of the men. They will not be required to pay a proportion of their fares as was the case last year. I shall investigate the matter to which the honorable member has ref erred.

page 808

QUESTION

BRITISH OFFENSIVE IN CYRENAICA

Mr SPENDER:
WARRINGAH, NEW SOUTH WALES

– Can the Prime Minister inform the House of the progress of the campaign in Libya?

Mr CURTIN:
Prime Minister · FREMANTLE, WESTERN AUSTRALIA · ALP

– I am unable to give more particular information than that published in the newspapers. To-day’s advices have not yet been received.

Mr JOLLY:
LILLEY, QUEENSLAND

-Is the Minister for the Army able to state the extent to which Australians are participating in the campaign in Libya?

Mr FORDE:
ALP

– For obvious reasons, it would be unwise to mention the disposition of troops, or the number of Australians participating in the Libyan campaign or elsewhere, while operations are in progress.

page 809

INCOME TAX

Report of Special Committee

Mr CHIFLEY:
Trea surer · Macquarie · ALP

– by leave - I lay on the table the following paper: -

Income Tax - Calls paid to Mining Com panies - Report of Committee of Members of the House of Representatives.

The report relates solely to deductions allowable under the Income Tax Assessment Act in respect of calls paid to mining companies.

The recommendation of the committee is to the effect that, in lieu of the provision in the existing law for the deduction of the amount paid as calls to mining companies, oil companies, and afforestationcompanies, the act should make provision for a rebate, calculated at one-third of the rate of income tax imposed for the financial year on the amount of calls paid. The recommendation was made unanimously by the members of the committee, and the Government proposes to bring forward during the committee stage of the bill the necessary amendment to implement it.

The Government has decided that the committee shall continue to function for the purpose of examining, in the new year, the position in regard to the taxation of dividends received from ex- Australian mining companies. It will also survey the incidence of taxation on private companies, and investigate any anomalies, submitted to it in writing, which experience of the new legislation may bring to light.

page 809

SECRET FUNDSROYAL COMMISSION

Mr CURTIN:
Prime Minister · Fremantle · ALP

– I lay on the table the following paper: -

Use of certain public moneys - Report by the Honorable SirPercival Halse Rogers, K.B.E., Royal Commissioner, and move -

That the paper be printed.

Debate (on motion by Mr. Archie Cameron) adjourned.

page 809

QUESTION

OWEN GUN

Mr FRANCIS:
MORETON, QUEENSLAND

– Will the Minister for the Army inform the House of the result of the special conference, convened yesterday, to discuss differences connected with the manufacture of the Owen gun? Have the difficulties been overcome? Is the gun now to be manufactured on the scale previously mentioned, and what royalties are to be paid to the inventor?

Mr FORDE:
ALP

– I convened yesterday a special conference in Melbourne, consisting of the inventor and manufacturers of the Owengun on the one hand, and representatives of Army Ordnance on the other hand. The conference was completely successful; differences of opinion were ironed out, and the manufacturers will proceed with, production immediately. Mr. Owen has not raised the subject of royalties. Whenhe does so,he will be treatedequitably by the Government.

page 809

WAR EFFORT

Effect on Tasmania - Appointment ofsurveycommittee.

Mr CURTIN:
Prima Minister · Fremantle · ALP

– by leave - The Government has approved of the request by the Premier of Tasmania, that an investigation on lines similar to that recently conducted in Western Australia shall be made of the economic position of ‘Tasmania as affected by conditions arising from the war. A committee will be appointed to make a survey of the economic position of Tasmania as affected by and in relation to Australia’s war problems and Avar effort, and will report thereon to the Commonwealth Government with such general recommendations as its survey suggests. Details regarding the composition of the committee will be the subject of consultationbetween the Governments of the Commonwealth and Tasmania.

page 809

QUESTION

EXCISE ON ALCOHOLIC BEVERAGES

Mr CLARK:
DARLING, NEW SOUTH WALES

– Is the Minister representing the Minister for Trade and Customs aware that breweries are issuing invoices stamped with the condition “ Subject to alteration in price owing to increase in excise “ ? Are breweries thus allowed to protect themselves at the expense of hotelkeepers, who will not ‘be able to collect the excise after the goods have been sold?

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

– The subject of the excise on tobacco, spirits, ales and the like has been engaging the attention of the Minister for Trade and Customs. I understand that so far steps have not been taken to permit the excise to he passed on to the buyer of these alcoholic leverages. As it would appear,, from what the honorable member has declared, that some preliminary steps in this direction, for which I can see no justification, have been taken by certain of the interests concerned, I shall bring the matter to the notice of the Minister, and have a report furnished to the honorable member

page 810

QUESTION

APPLES AND PEARS

Mr RYAN:
FLINDERS, VICTORIA

– Will the Minister for Commerce make available to honorable members th& balance-sheet showing the result of the operations of the Apple and Pear Marketing Board covering the last season ?

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

– Yes..

page 810

QUESTION

LIQUID FUEL

Mr MORGAN:
REID, NEW SOUTH WALES

– I ask the Minister for Supply whether his attention has been drawn to a published statement by Mr. A. R. Tewksbury, chairman of Yellow Express Carriers Limited, to the effect that the Colonial Sugar Refining Company Limited has refused to his company supplies of methylated spirit for the purpose of blending with other liquid fuel to be used for transport purposes in connexion with the company’s business? I understand that the spirit was refused when it was requested by Yellow Express Carriers Limited on the ground that the Colonial Sugar Refining Company Limited had to make its supplies available to the major oil companies under an arrangement made with the previous Government. Will the Minister investigate the position with the object of ensuring that supplies of such spirit shall be made available in the future direct to users of motor spirit?

Mr BEASLEY:
ALP

– It would take some time to give: a detailed reply to- that question. The decision of the Govern ment to make use of power alcohol on the basis of a percentage admixture with straight petrol involves the use of the whole of the methylated spirit. Prior to the making of this decision a certain proportion of methylated spirit could be made available, but this is no longer the case, for all such spirit must be carried to the final distillation process of power alcohol. This is being done in order to increase the total gallonage of liquid fuel available, and it is having the effect of increasing the total gallonage by about 3,500,000 gallons a. year.

page 810

QUESTION

RECRUITING

Mr ARCHIE CAMERON:
Minister for Aircraft Production · BARKER, SOUTH AUSTRALIA · ALP

– I ask the Minister for the Army whether he is yet in a position to indicate to honorable members the number of recruits obtained through the special recruiting campaign which I understand ended last Friday ?

Mr FORDE:
ALP

– J returned from Met bourne only this morning and have not yet received the figures, but I shall give consideration to the subject as soon as possible-.

page 810

QUESTION

SALES TAX

Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES

– I ask the Treasurer whether Ms attention has been drawn to reports that country storekeepers in New South Wales are charging sales tax on the landed cost of good’s reaching country shops, which, of course, includes freights? Is this permissible? If not, will the Government take appropriate action?

Mr CHIFLEY:
ALP

– I have- not seen reports of the nature referred to by the honorable member, but I shall investigate the position and make an early reply to the question.

page 810

QUESTION

COAL-MINING

Pensions Scheme - Wallarah Mine

Mr ABBOTT:
NEW ENGLAND, NEW SOUTH WALES

– I ask the Minister for Labour and National Service whether his attention has been drawn to- a statement published in the Maitland Mercury of the 22nd November;,, to the effect that more than 2,000 miners are expected to retire next January under the miners’ pension scheme of New South Wales ? In view of the shortage of coal, and of our serious lack of man-power,. I ask the Minister whether he does not think that the continued employment of those miners would be of greater assistance to the war effort than their compulsory retirement? Will the honorable member discuss the position with the Minister for Mines in New South Wales?

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

– I shall be pleased to do so, and. shall advise the honorable member of the result of such conversations.

Air. ANTHONY. - ls the Minister for Labour and National Service able to say whether the 200 miners who are reported to be remaining underground at the Wallarah coal mine arc on strike or locked-in by their employers? If they are locked in will the honorable gentleman see that the employers are suitably dealt with, and if they are on strike will he see that they are provided with suitable recreation while underground, including wireless sets of sufficient power to receive the results of race meetings, the advices of reliable starting-price bookmakers-

Mr SPEAKER:

– Order !

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– Finally, will the honorable member make available to the men a copy of the statement he made in the House last week relating to his success in dealing with strikes?

Mr WARD:

– As usual the honorable member is a little behind the times and a little out of date. I am pleased to announce that the men are no longer underground. As the result of negotiations with the representatives of the men they decided to leave the mine at 11.30 a.m. to-day. There is now no stoppage of production on the coal-fields. In the event of a similar occurrence and of the men being in need of entertainment, I think the best we could do for them would be to give them amplifying equipment so that they could listen to the squabbles in the United Australia party.

Later:

Mr ARCHIE CAMERON:
ALP

– Will the Minister for Labour and National Service disclose to the House the terms upon which the coal strike was settled this morning?

Mr WARD:
ALP

– The matter in dispute has not been settled. I said that the stay-in strike had been ended, and. that the men had resumed work. The matters in dispute will be dealt with by Mr. D. Morrison, who has been appointed as a conciliation commissioner to hear and determine the matters in dispute. The Government is confident that a satisfactory settlement will be made.

page 811

QUESTION

SETTLEMENT OF DISPUTES

Mr CALWELL:
MELBOURNE, VICTORIA

– In view of the success which has attended the efforts of the Minister for Labour and National Service in preventing and settling disputes likely to have detrimental effects upon the successful prosecution of our war effort, I ask the honorable gentleman whether he is prepared to make his services available as a mediator in another dispute which threatens the success of our war effort ? I refer to the dispute between the United Australia party organization and the party’s parliamentary representatives.

Question not answered.

page 811

QUESTION

INVENTIONS

Mr ARCHIE CAMERON:
ALP

– I ask the Minister for the Army whether he will review the present practice of giving publicity to new military inventions such as the Ower- gun? Will the honorable gentleman discuss with the Chief of the Genera] Staff whether it is desirable that we should publish, well in advance, particulars of every surprise move that we have in contemplation?

Mr FORDE:
ALP

– I shall give consideration to the honorable member’s question.

page 811

QUESTION

WAR CONTRACTS

Royalties ok Patents.

Dr EVATT:
AttorneyGeneral · Barton · ALP

– by leave - On the 6th November the honorable member for Reid (Mr. Morgan) asked a question concerning the practices being indulged in in connexion with claims for royalties. I then informed him -that this matter was giving me some concern, and that I would have an investigation made and inform the House of the result. The investigation is by no moans complete, but I think it is necessary to make an . interim statement. With the object of co-ordinating, to some degree, these activities, the Solicitor-General, in May last,. forwarded a memorandum to all government departments in connexion with payments for the Commonwealth use of patent rights.. ,He drew attention to the necessity for seeking legal advice before final arrangements were made for the acquisition or use of patent rights. Later, the Solicitor-General forwarded another memorandum to government departments in which the nature and extent of patent rights and the incidence thereof on our war activities were explained. Notwithstanding these memoranda, I am not satisfied -.that an adequate appreciation of the position has percolated to those who,. in the first instance, deal with war contracts.

In war-time the danger of extravagant payments is so great that the operation of our patent system should be watched carefully with a view to guarding against the payment by a heavily-taxed nation of unjustifiable royalty claims. This problem’ has* received considerable attention in other countries, and the Assistant Attorney-General in the United States of America, in dealing with this subject, has seen fit to condemn the “ shrewdly legalistic methods” which have been adopted by some patent-holding organizations. it is desirable that it should be known to all concerned that no person has any exclusive right to make or use any invention in the Commonwealth unless he is the owner of valid letters patent in force in the Commonwealth, or holds a licence from the patentee so to do. J have ascertained that in some cases which have come under notice letters patent granted in England are represented to have the full force of the law in the Commonwealth. Such representations are not true and not justified.

Letters patent do not necessarily remain in force for the full term of sixteen years, because the non-payment of the statutory renewal fees results in the termination of the monopoly. Cases have occurred where claims to royalty have been made against the Commonwealth in respect of Commonwealth letters patent, and it has been found on investigation that such letters patent have long since terminated.

If, for any reason whatever, a patent ceases to exist in the Commonwealth in respect of any particular invention, that invention becomes, in law, the property of the whole community, and no person can thereafter obtain, any exclusive right therein. Therefore, it is of the utmost importance that before any arrangement is made for the payment of royalties in respect of any alleged invention in the Commonwealth, either by government departments or their contractors, the first and foremost inquiry should be directed to the question: Is that patent in force in the Commonwealth? From a perusal of some of the files which have been brought to my notice it appears that some government departments have not realized the necessity for obtaining this vital’ information at the outset from the persons claiming th, payment of patent royalties.

I now refer to an associated matter which also requires a most critical approach by officers concerned in negotiating war contracts. It’ is obvious that patentees, both here and abroad, may be able to render some technical assistance in the initial stages of the production of their inventions in the Commonwealth. This technical service which such patentees are capable of rendering may take the form of working drawings, information concerned in the technique necessary in the practising of the inventions, and even the assistance of skilled operatives. This technical assistance or service cannot, however, be placed in the same category as patent rights. There appears to be a common misapprehension that it may properly be treated as an associated factor in determining the moneys payable by the Commonwealth in respect of actual or alleged patent rights.

The subject of inventions, designs, drawings or processes which are not patented was elaborately dealt with by the Royal Commission on Awards to Inventors, appointed under Royal Warrant, after the 1914-18 war. That commission, in its first report, made it clear that any remuneration paid for this class of assistance was not based on any statutory right. Cases, however, have recently been brought to my notice where attempts have been made to associate such services with the monopoly rights forming the basis of negotiations. As .a result, the patent royalty claims which are made seem to lx? most unjustifiably inflated.

I now refer to several cases which my inquiries have disclosed. In one ease claims were made against the Commonwealth for royalty payments in relation to machine-gun carriers being manufactured in the Commonwealth. The matter finally reached my department, as a result of which the claimant corporation was called upon to furnish the numbers of the letters patent in the Commonwealth upon which its claim had been based. It was not until negotiations had extended for nearly eighteen months that the corporation had to admit that it possessed no relevant patents in force in the Commonwealth. As a result, the department concerned was saved from having to incur expenditure without legal obligation.

In another case involving munitions equipment, it was found on investigation that certain payments had been made to the British patentees in respect of arrangements for obtaining what was euphimistically called a “manufacturing licence “, before any investigation had been conducted as to the nature and extent of any patent monopoly in force in the Commonwealth.

In another case an overseas patentee had made a claim on a contractor who had indemnified the Commonwealth against any claim for patent, royalties. Although the responsibility for the payment in the first instance devolved upon the contractor, the department concerned instituted precautionary inquiries from my department. It was ascertained that a substantial claim had been made by an American’ corporation for a royalty payment, but the Commissioner of Patents advised that the patent had long since ceased to exist in the Commonwealth, and was the free property of the community. The claim was defeated at the last moment, and on the advice of the Attorney-General’s Department the cheque was stopped.

Even though a patent for an invention may be in force in the Commonwealth, it is ‘essential that the scope and meaning of the monopoly shall be most carefully considered whenever it is claimed to relate to any equipment or goods manufactured by or supplied to Government departments.’’ In a recent case a claim for £4,500 was made in respect of a device supplied by a contractor to one department. It was found on investigation that the device supplied to the department did not encroach upon the- patentee’s monopoly.

Honorable members will naturally be anxious to learn of the steps which are now being taken in connexion with this matter to remedy any shortcomings. In the early stages of the present war regulation 57a of the National Security (General) Regulations was promulgated. This followed closely on the lines of permanent British legislation for controlling the use by Government departments of patented inventions. Under regulation 57a Commonwealth Government departments and their contractors are entitled to use any invention, despite the fact that it is patented in the Commonwealth. This is a complete departure from the normal position in time of peace, and there is no reason whatever why any Government department, should hold up supplies for war purposes because of the existence of any’ patent monopoly. Under the law the Commonwealth may go straight ahead and use the invention, and the terms for such use may be subsequently settled by agreement or by the Attorney-General. From my inquiries it appears to me that this regulation has to a very considerable extent been disregarded.

The investigation which I have caused to be ma.de up to the present is of a preliminary nature, and I am giving close consideration ro the present legal and administrative position in order to prevent tlie Commonwealth from being burdened with expenditure in relation to real or alleged monopoly right?, and, what is equally important, extravagant legal claims which are often put forward in connexion therewith for so-called “ manufacturing rights” and “ proprietary processes “ or the like. These phrases are frequently employed to cloud the fact that, patent royalties are not payable at all.

I am invoking the valuable assistance of the Auditor-General and his officers to assist me in seeing -

  1. that no payments for royalties or rights akin thereto are made by the Commonwealth unlaws they are fully justified by the law and the facts; and
  2. that so far as possible payments which have been made without sound legal foundation are disgorged.

After I have had an opportunity of making a more complete investigation of this matter, I shallbe in a position to throw further light thereon for the information of the House.

page 814

WHEAT INDUSTRY

Excess Planting - Stabilization Plan

Mr SCULLY:
Minister for Commerce · Gwydir · ALP

. - by leave - Representations have been made concerning the position of a number of wheat-growers who have planted excess areas and are unable to secure sufficient labour to prevent this excess from maturing to grain. As these growers had broken the regulations, they were instructed to cut the excess areas for hay or to prevent it from’ maturing, but now we are faced with the fact that rural labour is simply not available to enable this to be done. In the circumstances provision is being made for wheatgrowersto harvest the excess wheat. They may apply to the chairman of the local committee of review for their district. The chairman will make a recommendation to the Wheat Industry Stabilization Board and the wheat may then be harvested by the grower. It should be noted that this is intended to apply only to those who find it impossible to dispose of their surplus. Wheatgrowers who can deal with their surplus wheat must do so.

Having made provision for dealing with this wheat, I make it clear that provision is also being made to protect the interests of wheat-growers who have faithfully observed the regulations. They will not suffer because they have complied with the requirements. Although growers are permitted to strip excess areas they will not be allowed to gain as a result, or to injure the interests of their fellow growers.

The excess wheat harvested will be delivered to the Australian Wheat Board, but the first advance paid to growers for wheat acquired will not be paid on the excess. The payment which will ultimately be made for it, is a matter which willbe determined later, and that payment will certainly not be sufficient to show a profit to those who have evaded the regulations. Actually, of course, the growers concerned will have a proportion of their crop harvested from the area which they’ were licensed to sow, and another portion ofthe crop will come from the excess area sown. The two will be treated proportionately - as if the whole of the land concerned ‘had shown anequal yield - and the first advance will be paid on the legitimate crop only.

Members may ‘be interested to know that reports from the Wheat Industry Stabilization Board show fiat only a small proportion of excess wheat and a small proportion of growers are concerned. While these include a few flagrant cases which will be dealt with appropriately at a later stage, the wheatgrowers of Australiagenerally have greatly faciliatedthe operationsof the board by theway in which theyhavecooperated with it.

Action has had tobe taken ‘because labour shortage makes itimpossible to prevent the grain concerned from maturing. This mustnot betaken asshowing a lenien t view in cases of evasion of the regulations. As the great bulkof the wheatgrowershave co-operatedin carrying out the wheat stabilization plan, I intend to see that their interests shall not be injured bythe minority who tried to evade requirements. Regulationswill be made to control this decision.

page 814

QUESTION

CARNIVAL COMMITTEE, AUSTRALIAN CAPITAL TERRITORY

Claim for Rain Insurance - Jurisdiction of SupremeCourt of the Australian Capital Territory.

Dr EVATT:
ALP

-On the 14th November, the honorable member for Reid (Mr. Morgan) drew my attention to an article in the Canberra Times regarding the repudiation by a local agent of Lloyd’s of London of the claim of the Australian Capital Territory patriotic carnival, held nine months ago, for rain insurance, and asked me whether I would look into the matter of having Lloyd’sof London made amenable to the jurisdiction of the Supreme Court of the Australian Capital Territory.

As promised, I have had inquiries made into the matter and findthat the carnival committee took out an insurance policy with Harvey Trinder (New South Wales) Proprietary Limited, Lloyd’s insurance brokers, against 10 points of rain falling at the Government Meteorological Bureau on the day of the carnival. There are two meteorological recording stations at Canberra, one at Duntroon, where 12 points of rain were registered, and the other at the Forestry School where only 5 points were registered. The dispute between the parties arose as to’ which of these recording stations, was the- Government Meteorological. Bureau. After some discussions had proceeded between the legal advisers of the parties, the solicitors’ for the carnival committee intimated to the insurance company’s solicitors that they had been instructed to issue a writ out of the ‘Supreme Court of the Australian Capital Territory, and they asked who might be regarded as the local defendant appointed by Lloyd’s for the purposes of the matter. The solicitors for the insurance company replied that their authority to accept service was limited to process issued out of a New South Wales court,, and did not include process issued out of the Supreme Court of the Australian Capital Territory. They accordingly advised’ the solicitors for the carnival committee that the defendant’s address was care of Lloyd’s, London. This reply appears to indicate a disinclination on the part of the overseas company concerned to facilitate the. determination of the question at. issue, by the Supreme Court of the territory in which the carnival had been held. Nevertheless,, on the 19th November, five days after the honorable member brought the matter under my notice, the underwriter’s, solicitors telephoned’ the solicitors to the carnival committee that the claim would be paid, and this advice has been subsequently confirmed in writing. It would appear that the publicity which has followed the asking of the question by the honorable member, and’ the publicity in the Canberra Times, have contributed in no small degree to the settlement of this claim. I am informed that, up to the present time, the insurance moneys have not been received.

page 815

ENLISTMENT OF UNIVERSITY STUDENTS,

Dr PRICE:
BOOTHBY, SOUTH AUSTRALIA · UAP

– In view of the fact that the Prime Minister recently stated that university students in advanced courses of medicine and engineering should continue their courses rather than enlist, is he yet in a position to advise older boys about to leave school whether they should enlist at once or commence university courses, such as medicine and engineering, which may be useful for war purposes (

Mr CURTIN:
ALP

– No. I am awaiting a report in respect of man-power generally before I make any further recommendation on the subject of what university students should- do.

page 815

QUESTION

LAKES ENTRANCE OIL-FIELD

Mr PATERSON:
GIPPSLAND, VICTORIA

– Is the Minister for Supply and Development yet able to state what progress has been made in making arrangements for the development of the oil-field at Lakes Entrance? If not, will he endeavour to give some information to the House- during this week’s1 sittings ?

Mr BEASLEY:
ALP

– Cabinet has arrived at a decision on that matter, and a statement will be issued and released to the morning press.

page 815

QUESTION

INTERNATIONAL. AFFAIRS

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– Is the Minister for External Affairs able to make a statement about international affairs?

Dr EVATT:
ALP

– I have consulted the Prime Minister and the Leader of the Opposition, and a statement will be made on Thursday.

page 815

QUESTION

BANKING

Regulations’ - Overdraft Accommodation

Mr FRANCIS:

– Will the Treasurer assure me that the Government’s banking control regulations will be gazetted in time to allow honorable members a full opportunity to examine them before the close of the present sessional period ?

Mr CHIFLEY:
ALP

– Yes.

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– Is the Treasurer aware whether certain Sydney banks have circularized their customers with the object of ascertaining from, them whether or not they desire extensions of their existing overdraft accommodation? If not, in view of the fact that the Government is contemplating the gazetting of banking regulations, will the honorable gentleman make inquiries and ascertain whether this is so ?

Mr CHIFLEY:

– The general practice has been for the Commonwealth Bank to review the advances policy of the associated banks. It is considered by this Government, as it was by the previous Government, that the Commonwealth Bank is the body most competent to undertake this task during the period of the war. I shall make inquiries from the Commonwealth Bank, and ascertain the facts of the position.

page 816

QUESTION

THE AUSTRALIA-FIRST PARTY

Mr FALSTEIN:

– I ask the AttorneyGeneral whether it is a fact that an antiwar, anti-democratic, and pro-fascist organization masquerading under the name or style of “ The Australia-First Party” recently held three meetings at the Australia. Hall, Sydney? Will he call for a report on the activities of that organization and inform the House of the result as soon as possible?

Dr EVATT:
ALP

– Yes.

page 816

QUESTION

RAILWAY ROLLING STOCK FOR IRAN

Mr ABBOTT:

– Has the Prime Minister seen the statement published recently in the Sydney press on behalf of the Government which set out in detail the number of locomotives and railwaywagons to be made available for use in the present campaign in Iran? I understand that none have left Australia yet. Will the Prime Minister take steps in the future to ensure that such vital information shall not be made available to the enemy?

Mr CURTIN:
ALP

– The answer to both questions is “ Yes “.

page 816

QUESTION

ALIEN DOCTORS

Mr MULCAHY:

– In view of the report in the daily press that a deputation of 75 refugee alien doctors asked that they be allowed to practise medicine in Australia, will the Minister for Health confer with the British,Medical Association before giving a direction that any of these aliens be allowed to practise their profession in this country, so as to safeguard the people from being exploited by incompetent or unskilled medical practitioners ?

Mr HOLLOWAY:
Minister for Health · MELBOURNE, VICTORIA · ALP

– Yes. The honorable member can rest assured that all tests possible will be applied to applicants before certificates, if any, are granted to them.

page 816

QUESTION

MR. W. J. SMITH

Charges by Mr. Falstein.

Mr ANTHONY:

– I direct a question to the Prime Minister with reference to the recent speech by the honorable, member for Watson (Mr. Falstein) regarding the building of a horse float. In the consequent investigations, the Ilansard report showed that the honorable member had stated that the horse float had been built at Mr. Smith’s own expense, whereas newspapers scattered throughout Australia reported that the honorable member had stated that the float had been built at government expense. In view of the great importance to the newspapers and the general public of the settlement of this matter, will the Prime Minister have produced the letter which the honorable member for Watson gave to the Minister for Munitions and upon which he stated that his allegations were based ?

Mr CURTIN:
ALP

– I do not know what letter the honorable member for Watson (Mr. Falstein) sent to the Minister for Munitions. I have not seen it. As for the report which appeared in the newspapers, I am certain that, now Mr. Speaker has read to the House the report of the Principal Parliamentary Reporter as to what the honorable member for Watson did say, the newspapers, with their usual courtesy and fairness, will make the requisite corrections.

page 816

QUESTION

HOUSING

Mr SPOONER:
ROBERTSON, NEW SOUTH WALES

– I direct a question to the Treasurer with relation to the fact that in towns such as Orange, Bathurst, Lithgow, Windsor and Maitland the presence of military or Air Force establishments is causing such a shortage of dwelling houses that the Government will be obliged, either now . or very soon, to undertake heavy expenditure in providing housing accommodation. Will the Treasurer confer with the Building Advisory Committee of the Capital Issues Advisory Board with a view to relaxing the application of the committee’s regulations in order to allow people who own houses to convert them into flats, and thereby provide the housing accommodation that otherwise the Government will have to provide at its own ‘ expense ?

Mr CHIFLEY:
ALP

– I shall discuss the matter with the Building Advisory Committee of the Capital Issues Advisory Board, and review the situation generally, particularly as it affects towns such as those which the honorable member mentioned.

page 817

QUESTION

EASTERN GROUP SUPPLY COUNCIL

Mr FRANCIS:

– Has the Minister for Supply and Development any information to convey to the House regarding investigations which have been made of Australia’s representation on the Eastern Group Supply Council at New Delhi ? If the honorable gentleman is unable to make a statement to-day, will he endeavour to do so before Parliament goes into recess?

Mr BEASLEY:
ALP

– At the moment I am not in a position to make a statement on this subject. Investigations have been made and are being made, and persons who are capable of giving advice on the subject are in Canberra at the present time. The Government hopes to be able to bring the matter up to date very soon.

page 817

PUBLICATION OF COMMODITY PRICES

Mr BEASLEY:
ALP

– On the 18th November, the honorable member for Darling (Mr. Clark) asked whether the Prices Commissioner had prevented the Sydney Daily Mirror from publishing the prices of basic food commodities. Inquiries have disclosed that, some months ago, a representative of this newspaper discussed with the Deputy Prices Commissioner, Sydney, a proposal that it should feature the maximum prices of certain goods. Far from preventing publication or discouraging the proposal, the Deputy

Prices Commissioner gave every assistance, and I am assured that close cooperation exists between this newspaper and the Prices Branch. A list published under this arrangement appeared as usual on the 19th November.

page 817

QUESTION

PRICE OF MATCHES

Mr ROSEVEAR:

– About three weeks ago I asked the Minister for Supply and Development whether the Minister for Trade and Customs (Senator Keane) would investigate the shortage of matches, which appeared to be a prelude to a request for an increase of prices. I now ask the Minister whether such an investigation was carried out ‘before the match combine was allowed to increase the price by 2d. a dozen boxes? Has the attention of the honorable gentleman been drawn to the fact that, since the price has been raised, match .boxes with double strikers have again appeared in the shops, although they were out-dated months ago? Does the Minister not consider this to be additional evidence that there has been deliberate hoarding of matches for the .purpose of benefiting from the increased prices?

Mr BEASLEY:
ALP

– Doubtless the honorable member has not yet had an opportunity to peruse the Hansard reports of last Friday, when I tabled a reply from the Minister for Trade and Customs in reference to certain aspects of the honorable member’s question. I am not sure whether it covered every aspect; I believe that the honorable member has referred to some points that were not embodied in his previous question. However, I should like him to read the reply which I have already provided, after which I shall, if necessary, confer again with the Minister for Trade and Customs, and furnish an additional answer.

page 817

QUESTION

SOCIAL SERVICES

Mr CALWELL:

– Will the Minister for Social Services, when he is preparing the programme which he proposes to introduce next year for increasing and improving Commonwealth social services, consider the inauguration of a system of marriage loans?

Mr HOLLOWAY:
ALP

– I have not yet considered such a suggestion, and I am not aware that Cabinet has done so. However, that is a matter of policy which must be discussed by the Government. I am unable to say at the moment whether this subject will or will not be considered.

page 818

INVALID AND OLD-AGE PENSIONS BILL 1941

Bill returned from the Senate without amendment.

page 818

WAR-TIME (COMPANY) TAX ASSESSMENT BILL 1941

In committee: Consideration resumed from the 21st November, 1941 (vide page 751).

Clause 4 -

Section twenty of the principal act is amended by omitting the word “eight” and insertingin its stead the word “ four “.

Section proposed to be amended -

Subject to this act the statutory percentage shall be eight per centum.

Mr FADDEN:
ling Downs - Leader of the Opposition · Dai

– On Friday last, an amendment to fix the rate of profit at 6 per cent. instead of 4 per cent. was defeated. I now move -

That the word “ four “ be omitted with a view to insert in lieu thereof the word “ five “.

The arguments which I advanced in favour of fixing the rate at 6 per cent. apply with equal force to the present amendment. The Government, having regard to the method which it has chosen to finance the war, should do everything possible to preserve the stability, and, indeed, to promote the expansion, of the public companies of Australia. The Government is committed to raise £137,000,000 between now and the 30th June next in order to bridge the gap between estimated expenditure and estimated revenue, and it proposes to do this by voluntary loans from the public, and by contributions from the banks. In addition to this amount of £137,000,000, the Government must find a minimum of £20,000,000 for State and semigovernmental activities. I was severely attacked in my capacity as Treasurer when, at the last meeting of the Loan Council, I stated that the amount of money available to the States would have to be limited to £20,000,000, with the understanding that the matter would be reviewed at the end of this year. I am now informed that no meeting of the Loan Council is to be held until March of next year.. In the circumstances, I remind the State Premiers, and. particularly the Premier of New South Wales, that this Government has fixed the amount for distribution among the States at exactly the same figure as I proposed, but it does not intend to review the matter until March next.. Thus, the Government is committed to raise £157,000,000 before the end of next June. So far, it has raised only £30,000,000,. this being the amount of new money raised during the recent £100,000,000 loan campaign. A further amount of £127,000,000 must be raised before the end of the financial year by the voluntary system. The unjust burden of taxation which is being imposed upon public companies will make the Government’s task increasingly difficult. Governments have always looked to companies with sound financial reserves to contribute to public loans. If this Government persists in taking, this extra £4,500,000 in taxation from the. companies, it must necessarily eat into the reservoir from which loan funds are ordinarily drawn. I believe that the Government has done a very unwise thing in taxing the companies in this. way. Members of the Government say that they are merely applying their policy of taxing the big; companies, but I remind them that the socalled big companies constitute the basis of Australia’s prosperity. Moreover, these same companies have thousands of individual shareholders. They are, in effect, trustees for the investments of thousands of citizens who are content to put their money into such enterprises for a small return, because they know that it will be safe: We have heard much criticism of the Broken Hill Proprietary Company Limited and the Colonial Sugar Refining Company Limited and other large concerns. We would be in a far better position to-day if we bad more big and prosperous companies of that kind. Had it not been for the enterprise and foresight of the men who pioneered the Broken Hill Proprietary Company Limited, where would Australia’s war effort he to-day? Every Treasurer has known how governments have depended upon companies to contribute to public loans. Now the. Government asks the companies to be satisfied with a return on capital of 4 per cent. Despite the difficulties, disabilities and risks that private enterprise encounters in business, the bill imposes a severe tax upon profits exceeding 4 per cent. Yet a fortunate investor in Commonwealth loans receives a return of 3^ per cent., which enjoys ‘special concessions regarding taxation, and is .guaranteed by the security of tha Commonwealth. “Who would persevere with the formation of companies, and submit to all the worries associated therewith, when this field of investment is available? The Government’s proposal to .tax companies should be thoroughly .surveyed by a committee representing all parties in this chamber. The original bill, which I introduced last year, was .examined, amended and unanimously approved by such a committee, and the Treasurer (Mr. Chifley) could with advantage follow that example. Even in Germany, the profits allowable to companies is 6 per cent. But the Commonwealth Government proposes to restrict them to 4 per cent. In my opinion, that as unduly harsh.

Honorable members should not overlook the fact that the war-time company tax is not the only imposition that companies have to meet. They pay a flat rate of 3s. in the £1, whilst dividends distributed to .shareholders are subject to increased income tax. Such harshness must defeat the purpose for -which the tax was imposed. Finally, persistence with this proposal will be inconsistent with the Government’s broad financial policy of voluntary loans. I urge the Treasurer to accept the amendment. ‘

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– The Leader of the Opposition (Mt. Fadden) asserted that companies will not find it worth while to carry on if the Government persists with what he termed “this harsh taxation”. I remind the honorable gentleman that the bigger companies, such as the Broken Hill Proprietary Company Limited and the Colonial Sugar Refining Company Limited are in the position that, regardless of whether they ma&e profits out of the war, they will be among the first to leave the starting barrier in the post war era. That is one of the principal incentives which they have to carry on their operations. Unquestionably, they are consolidating for the purpo.se of postwar activity, a position which they never hoped to gain in peace-time. Their operations have considerably expanded, and they have an opportunity to experiment .at the expense of the community. As a result of the exigencies of war, they have, also, been able to crush small competitors.

I appreciate ,me contentions of the Leader of the Opposition regarding severe taxation. His amendment, if adopted, would relieve the Government of revenue totalling £800,000 & year, but the How of additional money from the companies into the hands of shareholders in the form of dividends would increase receipts from income tax and reduce the loss by £200,000. Consequently, acceptance of the amendment would, in the final analysis, .-mean that revenue from this source would be reduced .by £600,000. When replying to the general debate on the .budget, I intimated the Government’s willingness to weigh anT submissions for modifying proposals that might cause undue hardship. The Government believes that taxation should be imposed upon every person, .who has the ability to pay it. Appeals to sentiment do not influence me as Treasurer, because I think in terms of ability to pay. But despite the loss of revenue, the Government will accept the amendment in order to meet the criticism that the legislation is extraordinarily harsh.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 5 -

Section twenty-four of the principal act is amended by omitting from sub-section (0.) the words “ Twelve thousand five hundred .pounds “ ( twice .occurring ) and inserting in their stead the words “ Twenty-five thousand pounds “.

Section proposed to be amended -

Where the amount of capital employed by a .company (.not being a subsidiary company) ^during the accounting period is less than Twelve thousand five hundred pounds, or where a company fails to supply any information required by the Commissioner for the ascertainment of its capital employed, the amount of Twelve thousand five hundred pounds ‘shall, subject to section twenty-five of this act, be deemed to be the amount of capital

Mr JOLLY:
Lilley

.- Last week I urged the Treasurer (Mr. Chifley) to give sympathetic consideration to the claims of companies which have sustained losses of capital. In my opinion, those losses should bc taken into account in the ascertainment of capital for the purpose of this legislation. A company with an original capital of £200,000, which has had to write off £100,000,. will be “allowed- to make a profit of only 2rJ per cent, on the actual subscribed capital before it becomes subject to the war-time company tax. An amendment which has been moved to the Income Tax Assessment Bill 1941 is intended to ensure, in the event of distribution by a liquidator and the application of income tax to the profits arising from the liquidation, that liability for income tax shall’ not arise until the capital actually subscribed by shareholders has been replaced. The same principle should be applied in this measure. Companies which have had to write off a considerable amount of their capital are entitled to consideration of this sort. Under the existing practice, companies which consider that they have been treated harshly may appeal to the Board of Referees. The adoption of my proposal will obviate, to a large degree, the necessity for that.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– The honorable member raised this matter last week. Quite a number of anomalies, particularly in relation to the different forms of company tax. has been mentioned to me. It is impossible for me to give lengthy and deliberate consideration to the many suggestions that have been made, but they will be referred to the special committee of members which has already investigated the proposal that calls paid to mining companies shall be allowed as a deduction. I announced this afternoon that this committee will continue to function for the purpose of considering anomalies in regard to company taxation, and such other tax matters as may be regarded as unduly harsh or unfair in operation. I therefore ask the honorable member, and other honorable members who have in mind anomalies to which attention might bc drawn, to withhold comment pending the examination which I promise will be made.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– 1 move -

That the word “twenty-five” be omitted, with a view to insert in lien thereof the word “ twenty “.

As honorable members are aware, a company is liable to pay war-time company tax on the amount by which the taxable, profit exceeds a certain percentage of the capital employed. The law at present provides that, where the capital of the company is less than £12,500, that amount shall be deemed to be the capital employed. The effect of that provision is that such a company is assured of a standard of £1,000- that is, 8 per cent, of £12,50*’ - and is therefore liable for tax only on the amount by which the taxable profit exceeds £1,000. When the bill, as introduced, prescribed a statutory percentage of 4 per cent., it became necessary to increase the minimum capital to £25,000 so that a company could still receive the benefit of a minimum standard of £1,000, viz., 4 per cent, of £25,000. The statutory percentage having been made 5 per cent.., it is necessary that the minimum capital should be £20,000.

Mr FADDEN:
Leader of the Opposition · Darling Downs

– As the Minister has stated, this amendment is consequential on the alteration from 4 per cent, to f> per cent.; in other words, with the rate at 4 per cent, the amount of capital necessary to earn £1,000 would be £25,000, whereas with the rate at 5 per cent, the amount will be only £20,000.

Amendment agreed, to.

Clause, as amended, agreed to.

Clause 6 - (2.) The amendments effected by sections four and five of this Act shall apply to all assessments for tin: financial year beginning on the first day of July. One thousand nine lui lid red and forty-one.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– 1 move -

That, in sub-clause (2.), after the word “forty one”, the following words be added, “and all subsequent years”.

This amendment is necessary in order to leave no doubt that, the amendments reducing the statutory percentage from 8 per cent. to 5 per cent., and increasing the minimum amount of capital allowed from £12,500 to £20,000, shall apply to assessments for all future financial years, as wellas the current financial year.

Mr SPOONER:
Robertson

.- This amendment brings to mind a remark that I made with respect to the duration of this legislation when the motion for the second reading of the bill was before the House. I then reminded the Government that in Australia during the last war there was a war-time profits act, which expressly provided that its operation should be limited to the duration of the war and six months thereafter. Similar legislation has been introduced during the present war in Great Britain and, I believe, in other British dominions and the United States of America. Into all of it has been imported the provision that it shall continue to operate for the term of the war and six months thereafter. This measure is the Wartime (Company) Tax Assessment Bill. Its purpose is to help to finance the special war expenditure of the Government. It should, therefore, conrain the provision which governed the duration of similar legislation during the last war, and which is incorporated to-day in similar legislation in Great Britain and elsewhere. If that be not done, it will be the duty of the Government of the day at the termination of the war to bring down legislation for the repeal of the act. The right honorable member for Yarra (Mr. Scullin) has said that repeal would not be difficult. I do not think that he anticipated that the present Government would then be still in power. Whatever the Government, it will experience difficulty in repealing the legislation. If the matter were viewed in the light of fairness, it would say, “ The special war conditions having passed, there is no longer need for this taxation; consequently, we now present a bill to repeal the act “. At times different governments have been influenced, not so much by the requirements of fairness, as by the political considerationsinvolved. The case for the amendment has been fully established, and the way to make it is clear.I therefore hope that the Government will see fit to make it, and “thus relieve the party now in opposition, which will then be in charge of the government, of the necessity to introduce a measure which will cause embarrassment to it because of the misunderstanding it will cause in the mind of the public.

I listened attentively to the Treasurer (Mr. Chifley) when he spoke on the previous clause, and I agree with him that companies are entitled to expect not only to preserve their present stability but also to be in a position to advance their activities in the post-war period. It would, therefore, be wrong to continue to operate this legislation after the war if that were not the intention of this Parliament or the country. As I explained during my second-reading speech, the last Government intended to impose the limitation I have suggested, but on account of the pressure of business immediately prior to the last Christmas recess that was not done.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

. -I regret that I cannot accede tothe request of the honorable member. The last Government was not disposed to make the amendment he has suggested, and this Government would be unduly generous if it were to do so.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 7 agreed to.

Title agreed to.

Hill reported with amendments; report - by leave - adopted .

Bill - by leave - reada third time.

page 821

WAR-TIME (COMPANY) TAX BILL 1941

InCommitteeof Ways and Means Consideration resumed from the 29th October (vide page 37), on motion by Mr.

Chifley -

That, in respect ofall assessments for the financial year beginning on the first day of July, One thousand nine hundred and fortyone and all subsequent years, in lieu of the rate of the tax imposed by sub-section (1.) of section5 of the War-time (Company) Tax Act

1940-

Mr FADDEN:
Darling Downs Leader of the Opposition

– I move -

That, in paragraph (a), the word “six” be omitted, with a view to insert in lieu thereof the word “five”.

The Government having agreed to raise the basic allowance to 5 per cent., this is a consequential amendment. It is only reasonable to expect that, the rate having been reduced from 8 per cent. to 5 per cent. the grades also should be reduced.

Mr.CHIFLEY (Macquarie- Treasurer) [4.15]. - The Leader of the Opposition (Mr. Fadden) has treated his amendment rather lightly, for it isanything but consequential. If the concession for which he asks were granted it, in conjunction with concessions already approved, would involve a loss of £1,500,000 of revenue, less that portion which would be obtained from income tax on money paid as dividends.. The Government cannot accept the amendment.

Question put -

That the amendment (Mr.Fadden’s) be agreed to.

The committee divided. (The Chairman - Mr. Prowse.)

AYES: 24

NOES: 27

Majority . . 3

AYES

NOES

Question so resolved in the negative.

Original question resolved in the affirmative.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Lazzarini and Mr. Chifley do prepare and bring in a bill to carry out the foregoing resolution.

Bill brought up by Mr. Lazzarini and passed through all its stages without amendment or debate.

page 822

AUSTRALIAN SOLDIERS’ REPATRIATION BILL 1941

Second Reading

Debate resumed from the 29th October (vide page 58), on motion by Mr. Frost -

That the bill be now read a second time.

Mr FRANCIS:
Moreton

.- The amendments proposed in this bill will have a threefold effect. The first amendment is intended to ensure that the provisions in relation to service pensions in future will conform to those relating to invalid and old-age pensions as varied by the Invalid and Old-age Pensions Bill passed last week. The service pension is virtually an old-age pension payable to a “ burnt-out “ or worn-out digger. Many of the men who returned from the last war became, as the result of their war service, prematurely aged, and incapable of doing permanent work. The service pension is payable to ex-soldiers, whether their disabilities can or cannot be proved to be due to war service. Service pensions are payable at 60 years of age, whereas old-age pensions are payable to male applicants only after they reach 65 years of age. The normal war pension is payable in excess of rates applicable to service pensions, but, in order to obtain a war pension, an ex-soldier must prove that his disability is due to war service.- The effect of clause 3’ of the bill is that the service- pension shall be increased* by 2s. 6d. a week, making the maximum 23s. 6d. a week, which is the maximum rate of the invalid and old-age pension. The rate of pension payable to a service’ pensioner’s wife will remain at 18s:, which is the amount payable to- the wife- of a1 tot pensioner. The effect of clause 5 of the’ bill is that the property exemption shall be £50: each- in respect of husband and wife, when both are pensioners. Hitherto a reduction of the pension has operated’ in cases where the accumulated property of husband and wife exceeded £25» each. I congratulate the Government upon having liberalized the law rar this respect. Clause 6 provides that the amount of service pension payable to a pensioner in a public hospital or institution shall be 7s. 9d. a week as in the case of an old-age pensioner.. In this respect the position of the service pensioner, in comparison with that of an invalid or old-age pensioner will be slightly disadvantaged; but the new provision will make uniform the1 conditions of the invalid and oldage pensions legislation and that applying to service pensions. The passing of this bill will be a further step towards the perfecting of our repatriation legislation. Australia has led the world in the repatriation of its soldiers who served’ in the last war, and any criticism that I might utter in regard to our repatriation measures would be directed at the administration and not at the legislation. Since our first repatriation act was passed in 1920, Australia has paid to pensioners and their dependants to the 30th June last, a sum of £290,000.000. This sum includes the following amounts : -

The total number of pensioners was 75,767 and dependants 149,724; total 225,491.

Clause 7 provides that the veterans of the South African War shall be admitted to the benefits of a service pension, and clause 8 extends medical treatment to those suffering from pulmonary tuberculosis. This is a provision for which I have pressed’ for many years. I have1 joined with other’ returned soldier members of this House and the Senate in: deputations to successive Ministers for Hepatization. I thank the former Minister, Senator Collett, for getting Cabinet approval for this long-delayed concession, and the present Minister for so promptly bringing down this bil! to give Parliamentary sanction to the previous Government’s decision. The number likely to qualify for this pension is estimated to be less than- 300, and I have never been able to understand previous reluctance to give to the South African War veterans repatriation benefits. The majority are about CO years of age, not old enough to qualify for the old-age pension, and they hardly comply with the conditions required for an invalid pension. Most of these men, who cannot earn a constant livelihood, because of advanced age or mental and physical incapacity due to the rigours of active service, have been living on charity and whatever help their more fortunate comrades can give them. The pension will enable them to obtain some of the necessaries of life in the eventide of their days, and will create- the right psychological effect on the- young’ men who are being asked to don the King’s uniform in the present world struggle. We should establish in our national life sound principles that those who are prepared to volunteer for the defence of the Commonwealth shall never want, and that, if for any reason, they cannot work, a service pension shall be granted. On the one hand, as no promise was given, these men realize there is no obligation upon the natio’n to give this assistance to them, and, therefore, they are the more grateful. On the other hand, the Commonwealth does owe to them something for the part they played in that campaign 40 years ago - a campaign which ended with magnanimous peace terms, .and created a new Dominion within the British Commonwealth of Nations. It forestalled any attempt by Germany, through the two Boer Republics, to extend its influence in the South as it had already done in West and East Africa. Despite the diehard Afrikander anti-British elements, the campaign brought peace between the two white races and peace between them and the black population numbering millions. It strengthened the Empire’s strategical position during the last war. Had the territories in South Africa not been unified under the British Crown, Germany could take advantage of racial discord, and that could, in the present war as in the Great War, cause Australia serious concern. Though the warfare was different from that of the Great War, it was most exacting. Our troops had to engage in ceaseless night marches month after month, in a trying climate, to exercise constant vigilance, night and day, and to show the courage and initiative necessary to beat their opponents in guerilla warfare of which the Boers were recognized as the world’s greatest exponents. Many of our soldiers carried on though enteric germs weakened their constitutions. The men who endured such privations, and suffered so much will lie assisted in their declining years by the service pension.

My criticism of our repatriation legislation is directed against the way in which it is now administered. The Administration is not so sympathetic as it was hitherto. Too many decisions ave passed on to the Appeal Boards for settlement. Whereas the applicants for pensions are entitled by law to have doubt resolved in their favour, the trend to-day is to give the benefit of any doubt to the department. This trend should be reversed.

In this war medical examination of our soldiers is most thorough. Examination of recruits by local doctors in the country precedes further medical and X-ray examination on arrival in camp, and some weeks later there is the necessity for a further examination by a medical board. Tn some instances, if recruits have been in camp for any length of time they receive a. final examination before sailing overseas. The soldier who successfully runs the gauntlet of these thorough tests should consider himself as being thoroughly fit. Yet the Repatriation Department is refusing pensions to soldiers who have returned from long overseas service on the ground that their disability is not due to war service.

I could cite many examples, but, owing to the need to conserve time, I shall cite only two. I shall identify the first as “C.R.” of East Ipswich. This ex-soldier had been in camp for several months and was amongst the earliest to leave for Malaya. While there he developed Singapore disease in the ear. After periods of treatment in hospital he was returned to Australia, where it was thought treatment would hasten recovery. His disability after some weeks in hospital has been cured, but he is deaf in the affected ear and because of that has been discharged from, the Australian Imperial Force. His application for a pension was refused because he was a surf life-saver and did have a minor trouble in one ear as the result of sand and salt-water trouble; he had advised the medical authorities of that. This decision is most ridiculous. At least this man is entitled to the benefit of a doubt, or he is entitled to a pension because his ear condition has been aggravated by war service. The department has failed in its duty by leaving to the Appeal Board a decision that the Repatriation Commission should have made without any hesitation. Decisions of this character are hindering enlistments, and for that reason alone the Minister should review the attitude of his department to the members of the present Australian Imperial Force. The medical examinations which “ C.R.” had to go through, together with his attendance at many special schools of instruction before he was promoted to the rank of sergeant, show that his ear was all right before he went to Singapore, and a pension and future medical treatment should be assured to him without question, delay or irritation.

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

– This bill is limited to three purposes and to them discussion will need to be limited.

Mr FRANCIS:

– The bill is intended to ratify certain decisions already made and in his second-reading speech the Minister for Repatriation referred to the necessity for that ratification. I crave indulgence to place before the Minister certain other aspects of repatriation on which decision should be made. The second ca.se is that of a soldier whom I shall identify as “ W. J.A. “ of Windsor. This young man was a first-rate athlete, excelling in every sport he took up. After enlistment he was in camp for some time; he was then vaccinated and inoculated, whereupon he immediately became crippled. His face swelled so much that he could not see out. of his eyes. After having been treated in hospital for some time, he wu.s given leave in the hope that absence from the camp atmosphere would effect, a cure. That hope was not realized and this young man has been discharged from the Australian Imperial Force still suffering his disability. He applied for a pension mainly so that he should be assured of adequate and proper medical treatment. Not only “was his claim for a pension refused; but also he is paying from his own pocket for the hospital treatment necessary to undo the effects of his compulsory treatment in camp.

I accept your ruling, Mr. Speaker, and I appreciate your tolerance. I congratulate the Minister on the promptitude with which he has introduced this bill, and I atn confident that he will rectify anomalies which I have mentioned.

Mr MORGAN:
Reid

.- I endorse the sentiments expressed by the honorable member for Moreton (Mr. Francis). The main purpose of this hill is to bring service pensions into line with the recently increased invalid and old-,a.,a;e pensions, but it contains other amending proposals. Therefore, I ask the Minister to consider certain suggestions for improving the lot of returned service men. We should lose no time in providing for the welfare of service men, numbers of whom are returning almost daily from the theatres of war without being accorded the treatment to which, they are entitled under the act.

This bill extends a measure of justice to veterans of the South African war. It is a travesty on justice and decency that we should only now, when it is too late for many of them to receive the benefits proposed, come to the assistance of men who fought for the country 40 years ago.

The bill also provides for the payment of the funeral expenses of returned soldiers by the Repatriation Department. This provision is to be retrospective to the 1st July, 1941, which recalls to mind the fact that the first returned soldier from the present war who died in Australia was not provided with a decent burial. This happened under the regime of the Menzies Government, when Australia was afforded the sorry spectacle of a soldier being buried in a pauper’s grave. I am glad that the bill provides that such an occurrence shall not be repeated.

My experiences in connexion with claims made on behalf of returned soldiers or their dependants have been similar to those related by the honorable member for Moreton. I am disgusted with the treatment that has been meted out to them.’ According to my experience, in nine cases out of ten, claims that should have been granted by the Repatriation Commission or by the Appeals Tribunal have been rejected. There is a saying, “Better that ten guilty men go free, than that one innocent man be wrongly convicted “. But the motto of the Repatriation Department seems to be, “Better that ten innocent persons go without their pensions, than that one person be granted a. pension to which he is not entitled “. The Australian Soldiers’ Repatriation Act provides that service pensions are payable only to members of the fighting services who had served in a theatre of war. But the conditions which applied when that provision was inserted in the act are entirely different from those which apply to-day. Men of the fighting forces undergo grave risks not only in theatres of war, but also during their period of training, when they are obliged to handle dangerous munitions and armaments. Incapacity, even death, has often been caused during training. It is now time for the act to be amended in order to provide for such cases. The law also provides that suicide, self-inflicted injuries, or injuries due to the default or wilful act of the person concerned, disqualify claims for compensation. The mentality of men who suffer the strain of modern warfare is often so impaired that they are driven to do things that they would not do ordinarily. A man of my acquaintance, who served in the war of 1914-18 and in the present war, was unable to secure employment to which he was suited when he returned to Australia. EYen.tua.lly lie came to me in__such a state of nervous disorder that he threatened to take his own life. I am satisfied that, had he done so, his death would have been the direct result of war service. Nevertheless, according to the act as it now stands, his dependants would not have been entitled to compensation. Claimants for war pensions are entitled, in certain circumstances, to representation before the Appeals Tribunal, but not bef ore the Repatriation Commission. However, such advocates must not be legal practitioners. This is very unfair to persons whose cases are being supported by members of Parliament who are also legal practitioners. Claimants frequently come to their parliamentary representatives in order to secure assistance, and in these circumstances no honorable member should be debarred from helping them. The act further provides that, if a claimant be represented by an advocate, he must bear the expenses of such representation. The commission, however, employs a regular advocate who has been trained to handle these eases, and who knows all of the principles that are involved.. The Government should provide for the appointment of a public advocate, at the expense of the Repatriation Department, to act on behalf of returned soldiers and their dependants. Claims before the commission and the Appeals Tribunal can riot be heard in open court at the present time. I do not know why this provision was included in the act, but 1 have no faith in tribunals which base their decisions on evidence taken in camera. I have seen too many abuses of justice under that system to have any confidence in it. Misleading evidence which is heard in public can be properly tested and disregarded, but when it is heard in camera it is frequently accepted without investigation. The best provision, in the interests of claimants, would be for cases to be heard ia open court at the discretion of the claimants. Female offenders have the privilege, on their first appearance in a police court, to have their cases heard in camera. A similar privilege at least should be extended to applicants for war service pensions if, for certain reasons, they do not wish the proceedings to be made public, but it should be left entirely to their discretion. Another provision of the act lays down that no appeal shall be made against any decision of the Entitlement Appeals Tribunal. That should be amended. At one time, applicants whose claims were rejected by the tribunal were allowed to appeal further to ministerial authority. Doubtless the present provision was inserted in order that Ministers should not be worried with frivolous claims, but claimants who have not received justice should have the right to appeal to the Minister. At the present time, when representations are made to the Minister on behalf of an applicant, the Minister replies invariably that he cannot take action. I am sure that if a provision, such as I suggest, were included in the act, we should not have the spectacle of the tribunal refusing time and time again to grant deserving claims on behalf of returned soldiers and their dependants. Like the honorable member for Moreton, I should like to quote a few instances to show that, in my experience, claimants do not receive the fair deal to which they are entitled.

Mr SPEAKER:

– This bill is for certain specific purposes, and the debate must have some relation to those purposes. It is competent, of course, to suggest further reforms and to make brief references to them, but the present is not a proper occasion for a full-dress discussion of the administration of the Repatriation Department.

Mr MORGAN:

– I bow to your ruling, Mr. Speaker. Perhaps on another occasion I shall deal with .the administration of the department. Recently, in asking a. question of the Minister for Repatriation, I suggested that the present procedure of placing upon the claimant the onus of proving that disability or death was due to war service should be varied by requiring the commission to prove that death or disability was not due to war service.

Mr SPEAKER:

– The honorable member will not be in order in discussing that subject now. He will have an opportunity to do so when the Estimates are being considered.

Mr MORGAN:

– I am referring to the onus of proof that disability is due to war service, and am suggesting an amendment of the act. The Minister has told me that the onus of proof rests, in fact, on the commission. I have pointed out that that is true only in the case of a.n appeal, to the tribunal.

Mr SPEAKER:

– To what clause of the bill is the- honorable member addressing his remarks?

Mr MORGAN:

– To- section 45 of the act. The subject is not mentioned in the bill now before the House.

Mr SPEAKER:

-I am afraid that the honorable member must not continue his remarks along that line.

Mr MORGAN:

– I hope that the Minister will take notice of my remarks, and either amend the bill in order to implement my proposals, or make provision for it in a further- measure. I know that the honorable gentleman is sympathetic to the claims of returned soldiers.

Mr Frost:

– The honorable member for Bourke (Mr. Blackburn) has already raised this subject, and I have promised to investigate it.

Mr MORGAN:

– I do not blame the Minister for the unsatisfactory position that has applied in the past. Perhaps this House will agree to the appointment of a select committee to investigate the provisions of the act, with a view to liberalizing them and bringing them up to date and also overhauling the administrative machinery.

Sir GEORGE BELL (Darwin) [4.58 1 . - I approve of this measure. The reforms which it will implement will cost the country very little. The few provisions which it contains relate to reforms that have been advocated by many honorable members for a long time past. Like the honorable member for Moreton (Mr. Francis), I am especially pleased with clause 7, which provides that the provisions of the act relating to service pensions- shall be extended to persons who served in the South African war. That is something which returned soldier members of this Parliament have advocated for many years. The provision will affect only a few people, and the. resultant cost will not be great. Obviously, the needs of the South African veterans are as great as those of men who served in the last war. I realize that certain difficulties caused a great deal of delay in the introduction of such a provision. One of these was that there were no records- to show whether a man. had served in the South African war ot not. Fortunately, the authorities have found a means to overcome the trouble. I do not wish* to discuss the measure at length, but, in view of criticism, that has been expressed by some honorable members regarding the administration of the act, I wonder whether you, Mr. Speaker, will allow me to give my views on this subject. I am not sure whether, under youn ruling, this would be permitted. I do- not disagree with the ruling, but it would be only fair to the Repatriation Commissioner, and the Deputy Repatriation Commissioners, if a little latitude were allowed in this respect. I know the Repatriation Commissioner very well, and I also know the Deputy Repatriation Commissioner in Tasmania. Their administration has been wonderfully good. They have done a better job than any other commission I have known in my parliamentary career. Many of the cases with which they have to deal are extraordinarily difficult. A soldier may apply for a pension 25 years after the termination of the war, and in most instances it is beyond the power of any medical man to know whether or not his disability is due to war service. In such cases the commission has gone to a great deal of trouble to obtain the evidence of the applicant’s friends in order to find out whether he had suffered from a similar complaint before the war. My experience has been that members of the commission have been generous, efficient, and sensible in the way in which they have dealt with applications.

The honorable member for Reid (Mr. Morgan) suggested that some additional machinery should be provided to hear appeals against decisions of the Entitlement Tribunal. First there is the State tribunal which deals with every application from its area. It gives a decision, and if the applicant is- not satisfied the case goes to the commission. If be is still dissatisfied he can appeal to the Entitlement Tribunal. Surely there is no justification for going beyond that tribunal and appointing yet another. Most of . the genuine cases have been dealt with long ago, arid it is not surprising, there-‘” tore, that not many appeals are now allowed. The honorable member for Reid also made the suggestion for the appointment of an advocate at public expense to represent applicants. The Returned Sailors, Soldiers and Airmen’s League in each State has, in fact, appointed ;i man for that very purpose. A claimant for a pension may plead his own case, or he may appoint another to plead for him, but if he does not feel qualified to conduct his case or cannot get a friend to do it for him, the league has a man present who will put his case before the tribunal. In all such instances the case is well put.

Mr BLACKBURN:
Bourke

.- It is proposed in this bill to amend section +5ak of the principal act which relates to soldiers who are, in the opinion of the commission or a board, permanently unemployable. Those words may be taken to correspond to the words “ totally and permanently incapacitated “ in the Oldage Pensions Act. We recently prescribed :i standard of incapacity in connexion with that act, and I believe that the Repatriation Commission should at least have regard to that standard. There have been cases of men who were unemployable in the sense that no one could be expected to give them a job, and such persons are, 1 think, entitled to a pension, even though there might be some kind of work they could do if it were possible to get them such employment. I was disappointed with the provision in the Pensions Act, and I believe that the interpretation of the provision should be at least as generous as in the Workers Compensation Act, The principle accepted in interpretation of the words “ totally and permanently disabled “ in the New South Wales Workers Compensation Act is that a worker is regarded as being “ totally and permanently incapacitated if he by the injury is rendered incapable of earning his living in the competition of the labour market, notwithstanding that he remains physically capable of doing some kind of work which he has not got and is not likely to get.

Mr RYAN:
Flinders

– I congratulate the Government on having brought in this measure’.’ It “is only right that service pensions should be adjusted in the same way as invalid and old-age pensions have been adjusted. I agree with the provision which makes South African veterans eligible for repatriation benefits, but T regret that South African veteran.? who served with the Imperial forces, and are now resident in. Australia, have been omitted. I know some such men who are resident in my own electorate. They have been residents of Australia for more than 30 years, and have become, to all intents and purposes, Australian. Most of them are in somewhat straightened circumstances, but they will not be eligible to receive a pension. I realize that by bringing them under the provisions of the act, we might be opening the way for similar claims from ex-members of the Imperial forces who served in the last war, and that_the granting of such claims might strain our resources, but this difficulty could be overcome by imposing a residential qualification of, say, 25 years, which would bring in the older mcn. We have a somewhat similar provision in regard to invalid mid old-age pensions.

I regard this bill as an interim measure pending a thorough investigation of repatriation legislation. It is clear that the time has come to replan the whole of our repatriation policy. Men who are discharged from the forces after having served overseas in this war are entitled to receive a pension for a period of three months. In the case of a man with a wife and two children, the pension amounts to £4 2s. 6d. a week. I regard that as quite reasonable, though I have heard it argued that the rate should be raised to the level of the basic wage. I do not agree that it should be so high, because the effect would be to discourage men from seeking employment,’ I believe, however, that the period during which the pension is payable might be extended from three months to six months. It is quite possible that, at a later time, when employment is more difficult to obtain, a man might take more than three months to find a job.

I know that the department and the Minister have given careful consideration to the rate of pension paid to soldiers’ widows, but it seems to me that something in the nature of an injustice is being perpetrated. Recently, a woman with two children lost her husband, who was killed in action in Tobruk. Before her husband’s death she was receiving £4 10s. a week, 1m t now she receives, as a widow, only £2 19s. 6d. a week. She had lived up to her former income, but now, on the death of her husband, which in itself was naturally a great blow to her, she has suffered a reduction of income to just below £3 a week. The present rate of pension for widows, irrespective of allowances to children, corresponds very nearly to that laid down in 1920, and its buying value is practically the same as it was then. However, since then we have raised the soldiers’ pay by a small, but, at any rate, appreciable amount, and in these times we are rather more thoughtful of the dependants of soldiers than we were, perhaps, in 1920. In the circumstances, there is a reasonable case for a small increase of widows’ pensions. I do not say that it ought to be large, but an increase of a few shillings a week is warranted.

I hope that, when repatriation matters are again under consideration, some attention will be given to vocational training.

Mr SPEAKER:

– That subject is outside the scope of the bill.

Mr CALWELL:
Melbourne

.- It is proposed to amend certain sections of the act relating to the provision of medical treatment for men suffering from pulmonary tuberculosis. I see no reason why persons suffering from other forms of tuberculosis should not enjoy similar benefits. I could never understand why sufferers from this particular dread disease should be accorded special benefits denied to other sufferers. I believe that persons suffering from asthma, bronchitis and the effects of gas should be placed on the same footing as those suffering from pulmonary tuberculosis.

Sir George Bell:

– So they are, if it can be shown that their condition is due to war service.

Mr CALWELL:

– Not in every case, and not as a right, Some patients who suffered from pulmonary tuberculosis have recovered. The improvements that medical science has effected in the treatment of this disease in recent years have enabled a number of those who,.,m, the past, might have succumbed , to it, to.be restored to health.

Although soldiers who were gassed in the last war may be affected in many ways in after life, the Repatriation Commission declares that their death or suffering is not necessarily due to war service. Soldiers who were gassed may develop complaints of the lungs or stomach; gassing may even lead to cancer. But persons who suffer indirectly from their war service and who cannot themselves prove, or whose relatives cannot prove, that the injuries or sufferings were due to war service, cannot secure, under the Repatriation Act, as they should be entitled to secure, benefits similar to those obtained by persons suffering from pulmonary tuberculosis. In fact, a person suffering ‘ from pulmonary tuberculosis is not required to show that the disease was caused by war service. The very fact that he i3 suffering from that disease is, ipso facto, accepted as being directly due to war service.

Mr Pollard:

– That is not so.

Mr CALWELL:

– The relevant section of the act indicates that it is.

Mr Paterson:

– A special concession n provided for a person suffering from tuberculosis.

Mr CALWELL:

– The act provides-

A pension under this section shall not be granted to a member of the forces unless the member, in the opinion of the conranmission or a board, is permanently unemployable and, in the case of a man, has served in a theatre of war or, in the case of a woman, has served abroad or embarked for service abroad or is suffering from pulmonary tuberculosis.

The act does not provide that such persons must be suffering from pulmonary tuberculosis at the time of the outbreak of wa;r. Furthermore, it does not state that they have to relate their suffering from pulmonary tuberculosis to war service. The mere fact that they are suffering from pulmonary tuberculosis when they apply for a pension is sufficient ground.

Mr Pollard:

– The honorable member is incorrect.

Mr CALWELL:

– I fail to see how the act can be interpreted differently. The phraseology seems to be- perfectly clear. In fact,, the right honorable member for North Sydney (Mr. Hughes) introduced the amending legislation, for which he received much commendation from, soldiers’ organizations.

Mr Pollard:

– The provision is. for a service pension and hospital treatment only.

Mr CALWELL:

– -Then I have misunderstood the section. In my opinion, all returned soldiers, should be eligible, whether or not they be suffering from war injuries, for medical treatment and for admission to all hospitals controlled by the Repatriation Commission. At present, they cannot be- admitted to repatriation hospitals unless the ailments from which they are suffering are attributable to war service.

Mr Hughes:

– Or aggravated by it.

Mr CALWELL:

– I shall cite the case of a man named Rooney, whose relatives came to see me about a fortnight ago. Aged 76 years, he had served in the Boer War and in the last war. He was drawing a small pension because he was suffering from bronchitis, but the authorities decided that that illness was not sufficiently serious to warrant his admission to hospital. He was also suffering from another complaint, but as that was not traceable to war service, he- could not be admitted to a repatriation hospital. The Repatriation Commission, with all the sympathy that it could expend upon this case, could not find for him accommodation in any public hospital.. Finally, I approached the chairman of the- committee of an old men’s home for the purpose of securing the admission of Mr. Rooney to the institution.

Mr Hughes:

– He would be eligible for a service pension.

Mr CALWELL:

– He was receiving a small pension because he was suffering from bronchitis, but he had developed another ailment which, the authorities declared, was not d due to war service. Consequently, he could not be admitted to a repatriation hospital. The ailment from which he was suffering, and not the bronchitis, was that which was causing his illness. ’ ‘ i

Mr Frost:

– What amount of pension did he receive?

Mr CALWELL:

– Probably only a few shillings- a week. In addition, he was receiving the old-age pension. My contention is that this man, because he was receiving a service pension when he took ill, should have been admitted to a repatriation hospital. Under the existing act, he could not be admitted. In my opinion, every soldier who takes ill should be eligible for admission to a repatriation hospital and the obligation should not be cast upon the community to provide treatment for him in a public hospital. Even if the patient desires to enter a public hospital, as Mr. Rooney did, he cannot always secure admission. Melbourne is poorly supplied with public hospitals compared with Brisbane and Sydney. The two daughters of Mr. Rooney were employed in munitions factories, and one had to leave her position in order to care for her father. Eventually, the attention that he required became too much for her, but, despite intensive efforts, she could not secure his admission to a hospital. The Repatriation Commission also tried unsuccessfully to assist her. When the Minister proposes to make further amendments of the act, he should liberalize this section, because a grateful country should continue to show its gratitude until the death of a former soldier, and should not expend it all within the space of a few years after his return. We should not content ourselves with waving flags and promising to him all kind of assistance. If, after twenty years he seeks medical attention and hospital treatment, he should not be told that his injuries are not such as to warrant his admission to a repatriation hospital. I am aware that the cost of pensions and treatment for returned soldiers total’s £10,000,000 a year, but we should not begrudge one penny of that sum. The price is not too high to pay to those who were asked to fight for 5s. a day in order to defeat our enemies. On behalf of Australia and the Empire they performed magnificent service, and now, after all these years, their efforts should not be forgotten.

An unfortunate man named Burke, as the result of spinal injuries, is unable ia work, and the Repatriation Commis sion granted to him something less than the full pension. In my opinion, if a person is as incapacitated as one who is suffering from pulmonary tuberculosis, he should receive similar treatment from the Repatriation. Commission. I see no reason for the differentiation. Next session, .the Government should liberalize this provision, and I ask the Minister to take a favorable view of my representations to him. If necessary, let it cost money! If we are able to find £200,000,000 a year for the purpose of fighting the war, surely we can find a few more million pounds for the veterans of other wars. If in the picturesque phrase of a former Treasurer, the Right Honorable R. G. Casey, “ The sky is the limit regarding war expenditure “, why should not a ceiling slightly lower than the sky be the limit - much higher than the present limit - for men who are suffering from war injuries?

I also notice that we are prepared, in a burst of generosity, to increase funeral expenses. If we were to expend a little more money on people when they were alive, we would not feel that we have to be generous about them when they die. We should not be under the obligation, as it were, to .salve our consciences with the recollection that, even if we did not treat them very well while .they were living, we at, least gave to them a decent burial.

I now desire to refer to the case of a man named Laing.

Mr SPEAKER:

– Order ! I cannot allow further mention of .particular cases in this debate.

Mr CALWELL:

– This is a case bordering on tuberculosis.

Mr SPEAKER:

-I shall watch the honorable member carefully in order to see that he does not .digress.

Mr CALWELL:

– This case was recently brought to my notice, and I have made representations regarding it to the Repatriation Commission. I speak subject to correction and without notes, but in this instance the treatment similar to that which is meted out to persons suffering from tuberculosis should have been given. The widow of whom I am speaking has not been granted a pension. She feels that a grateful country has quickly forgotten the sacrifice that she and her husband made. Many other people are in a similar plight. At the conclusion of this war all of the magnificent hospitals which have been erected in the suburbs of our capital cities will ultimately pass to the civil authorities. In the course of 40 years few soldiers will remain to occupy them, and the State authorities will assume control of them.

Mr Mulcahy:

– Another war or two will occur before then.

Mr CALWELL:

– I have no doubt that if the capitalistic system of society remains we shall have recurring Avars. They are inevitable. If we have an eye for markets and seek spheres of influence, and rival imperialisms take the stage, wars will be fought.

Mr SPEAKER:

– Order ! The scope of the debate is becoming too wide. The honorable member must confine his remarks to the terms of the bill.

Mr CALWELL:

– To return to public hospitals, which -are provided for war victims, I .ask the Government to make representations to the State authorities which will ultimately become the beneficiaries of the largesse of the Commonwealth, to co-operate by making special provision for soldiers. That is not too much to ask, because they will ultimately receive these very fine buildings for civil needs.

The limited scope of the bill prevents me from suggesting further necessary amendments of the act. I hope that the Minister will be very sympathetic in his consideration of the needs of the veterans of the Boer war .and of the last war, and of the men who return from the present war. The provision regarding veterans of the Boer war was announced with a flourish of trumpets by the last Government, and its action has been confirmed by the present Administration. After all it does not mean a great deal. It provides that a man who reached the age of 60 years and is under ‘65 years, at which age he is eligible to receive an old-age pension, shall be entitled to receive a service pension. As nearly 40 years have elapsed since the Boer war concluded, there must be very few of its veterans who are under 60 years of age, and not very many between 6.0 and 65 years of age. The concession is of no real importance, and I hope that any benefits which ave conferred in future will be more substantial than the provision which is made in this bill.

Mr HUGHES:
Leader of the United Australia party · North Sydney

– I support the bill, and commend the Minister for Repatriation (Mr. Frost) upon its introduction. It proposes to raise the maximum rates of service pensions, to extend the pensions to veterans of the South African war, to make medical treatment available to those suffering from pulmonary tuberculosis, and to give statutory sanction to other liberalizing measures adopted by previous administrations. Whilst we should aim at perfection, we can never hope to attain it, but this bill will be welcomed by thousands of returned soldiers. The South African veterans have too long been ostracized and neglected. I congratulate the Minister upon having made provision for their inclusion within the scope of the act, and I hope that the bill will receive the unanimous support of the House.

Mr MULCAHY:
Lang

.- Like the right honorable member for North Sydney (Mr. Hughes), I am pleased that the South African veterans are to receive the benefits of the Australian Soldiers’ Repatriation Act, but I hope that this bill is but a forerunner of a complete revision of the repatriation law. Those of us who have been dealing with repatriation matters generally for many years consider that an overhaul of the act is long overdue. During the last Parliament the service pension was granted to returned soldiers who were unemployable. Although the right honorable member was temporarily absent from the Ministry when that measure was introduced, I believe that he was responsible for it, and may be given credit for that valuable recognition of the claims of the soldiers who fought in the last war. I believe that if he had bis way the act would be a much better instrument than it is to-day. I am satisfied that the Repatriation Commission has done excellent work, but the scope of the act has probably not enabled it to do all that it would have liked to do in the interests of the returned men.

I could cite many individual cases to show the need for amendments of the act, but those matters can best be dealt with later when the Estimates are under consideration. I suggest to the Minister that before the present sittings are concluded a select committee should be appointed to investigate anomalies in connexion with repatriation. Many amendments might well be made to the existing law, in order to do justice to soldiers who have returned from the last war. I believe that, within a few weeks, a select committee could furnish ample proof of the need for amendments of the act, with a view to eliminating anomalies with regard to returned soldiers generally. Men who are now coming back from the war apparently suffer from the effects of their experiences, but they are not entitled to the benefits of the act. I hope that some steps will be taken to do justice to those who have made sacrifices on behalf of the Empire in both this and the last war. Full recognition of the services of the veterans of the South African War was long overdue. The honorable member for Brisbane (Mr. Lawson), other honorable members and I have frequently drawn attention to their claims, and I am glad that justice is now to be done to them.

When a soldier has applied for a pension, and his application has been refused, he may appeal against the decision ; but months may elapse before the appeal is heard. In the meantime he may be in need of medical attention, and I claim that he should immediately receive it, in order to prevent him from becoming permanently incapacitated. I have brought under notice of the Minister the case of a returned soldier who is suffering from spondylitis. If he is required to wait until his appeal is heard he may become a charge on the country for the rest of his life.

Mr Prowse:

– A stitch in time saves nine.

Mr MULCAHY:

– Yes. If he received medical attention immediately, quite probably he would be prevented from becoming a permanent charge on the community. When I brought a similar case to the notice of a previous Minister he ordered that the ex-soldier be given medical attention. His disability had not been proved to be due to his war service. I consider the present Minister should see that cases such as this receive medical attention.

Mr HARRISON:
Wentworth

– Every Minister for Repatriation since the passage of the Australian Soldiers’ Repatriation Act has endeavoured to eliminate anomalies that have been revealed from time to time, but, in doing that, further anomalies have been created. Therefore, I welcome the suggestion of the honorable member for Lang (Mr. Mulcahy) that a select committee be appointed to investigate repatriation matters generally, with a view to submitting to the Government recommendations as to how anomalies could be eliminated. At present we have a patch-work act due to the efforts of successive governments and parliaments to improve it. Sometimes concessions of a purely political nature have been made to returned soldiers, and at other times governments have earnestly endeavoured to rectify anomalies. In the main, the act is approved by all reputable organizations of returned soldiers, because it is recognized that, in many cases of disability arising out of war service, relief has been given to applicants. Yet there are border-line cases that should have received the attention of successive governments, but unfortunately have not had the backing necessary to influence those governments. Owing to the altered conditions of warfare to-day, new repatriation problems will arise, and it will be impossible to deal satisfactorily with all applications for service pensions under the present law without creating further anomalies. Therefore, in my opinion, the act needs a complete revision, with a view to bringing it up to date.

The committee that I visualize would have to direct its attention to a matter of primary importance which has been stated clearly by successive Ministers for Repatriation. I refer to the need for the onus of proof of whether a soldier’s disability was or was not due to war service to be placed, not upon the “ digger “, but upon the Government. Honorable members can cite cases almost without number of men who havesuffered disabilities directly arising from their war service, but the fact of war origin could not be proved by the soldiers concerned, because records had been lost. I know of men who suffered disabilities in the line, but, rather than leave their units and thereby jeopardize the friendships so formed, they accepted medical treatment on the spot instead of being evacuated to a base hospital. Consequently they contracted disabilities which had had a detrimental effect upon them in after years, and, being unable to produce sufficient proof of the origin of their disability, they were deprived of the benefits of the act. In my opinion a man who goes overseas and endures the rigours of heavy campaigning and the other hardships of a soldier’s life, becomes liable to physical disabilities that will take their toll in future years. One matter that will have to be considered by any committee or government that seeks to bring the Repatriation Act up to date is that relating to the onus of proof. I commend the Government for having adopted some of the proposals put forward by the previous Administration. The Government of which I was a member took a long-sighted view of repatriation problems generally, and established an X-ray test for men enlisting for service overseas. It was possible to find out whether on enlistment a soldier suffered from any physical disability. If the X-ray examination be sufficiently intensive it is possible to establish beyond all reasonable doubt whether on enlistment a man is in a sound physical condition. I have it on expert authority that the miniature X-ray sets that were being used do not give complete information to the experts who study the results; consequently, the earlier records cannot be relied upon to furnish unchallengeable evidence of the condition of the soldier at the time of enlistment. In some instances, it has been necessary to take further photographs with a larger machine. Doctors and specialists have protested, during the taking of photographs, against the inability of the small machine to make a complete registration. Any government which proposes to bring this legislation up to date will have to take into account the effect of the facilities for enlistment offered in the early days of this war to diggers of the last war.. While I was Minister for Repatriation I had to deal with many instances in which the Army authorities had accepted diggers for active service abroad without consulting the .Repatriation Commission as to whether or not they were suffering from disabilities. A previous Minister for the Army, the late Mr. Gr. A. Street, was greatly concerned at the failure of the Army authorities to accept ‘the cooperation in this connexion freely offered by the excellent officers of the Repatriation Commission. Many diggers, upon enlistment, were found to be pensioners or pensionable subjects.; consequently., in due course, quite a crop of cases will be harvested from that field by the Repatriation Commission.

Service pensions are “paid in cash. Recently, the Invalid and Old-age Pensions Department has adopted the more up-to-date method of optional payment by cheque. The Minister might well adopt this method of payment to widows and others who request it in order to obviate lengthy journeys to the centres in -which payment is made, and the physical strain imposed by the long period of waiting which frequently occurs. On a previous occasion, I made this suggestion to the Minister; and subsequently, as Minister, I. directed that the alteration be made. The Minister would be commended by quite a number of service pensioners if he were to make the change. I support the bill, and commend the Minister for its early introduction.

Mr FROST:
Minister for Repatriation · Franklin · ALP

– In reply - I am gratified at the way in which the bill has been received. The Repatriation Act is ‘responsible for a number of anomalies. I assure honorable members that so long .as I am Minister I shall endeavour to provide remedies wherever possible. I have met the repatriation officials in the different offices, and agree with honorable members that they are most sympathetic in their administration. The act prevents them from doing all that they would like to do. I am pleased that this measure makes provision for South African war veterans, of whom there is a number in this Parliament; the measure was long overdue.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate.; report adopted.

Bill - by leave - read a third time.

page 834

POST AND TELEGRAPH RATES BILL 15*41

Second Reading

Debate resumed from the 13th November (vide page 381), on motion by Mr. GEORGE Lawson -

That the bill .he now read .a second time.

Mr. .HARRISON (Wentworth) (5.54]. - The Opposition commends tfe Government for its endeavours .to raise the revenue needed for war purposes, by methods of taxation, but issues .a warning against the tendency to use the Postal Department as a taxing (authority. From time to time, complaint has been made of the diversion of revenues raised by this department. Lt is an easy channel for the collection of funds to swell the consoLidated revenue account.

The history of postal rates is rather extraordinary. The House will remember that in 1908 there was penny postage, which extended to the United States of America. That was the rate throughout Australia in 1911, when it was declared to be sufficient to reimburse the Postal Department for the services which .it rendered.. At that time, the revenue of the department was buoyant, and the ‘Government did not need to contemplate an increase ©£ the rate. The .profits derived from the ‘operations of the department could not be applied ito an expansion .of services, but have been used purely to buttress consolidated revenue. .During the last war, the rate was increased to l£d., in order to meet war commitments. The original rate has mot since been irestoned. If the intention was to raise additional revenue for war purposes, the increase should have ceased to apply .at the termination of ohe war1; but it has been continued as .an added impost on those who use the postal services. Transport, postal, and all other .essential services should be controlled .by .the Commonweal th in the interests -of the people as a whole, but should not be used by them as. a taxation medium.. During the depression, the rate, was again increased; and the Government now, proposes to raise it still further, in. an endeavour to obtain the revenue that, iti needs- for war purposes. *I have no quarrel, with that objective ; but I ask the Government to embody in the bill ai provision, which will- ensure the restoration off the existing rate at the termination of the war. No person who uses: postal services would object to an increase in postal rates in order that the revenue needed for war purposes may be raised; but the Government is not entitled to use essential services merely as taxing authorities, by continuing such imposts-, after the war. Had the Gorvernment, of which I was a member, introduced a bill to increase postal rates, it would have incorporated in it the provision! that the increase should apply only for the duration of the war and a short subsequent period. The honorable member for Hume (Mr. Gollins),,, the then PostmasterGeneral,, would have had sufficient consideration, for postal subscribers to make that suggestion to his colleagues. If the Minister is prepared to move the suggested amendment we shall” give the bill a. speedy passage; if not, we shall strive to impose the limitation.

Mr ARCHIE CAMERON:
Barker · ALP

– la the interests of the taxpayers generally- it would be a good thing if the Parliament were to focus- public attention- on this: bill, which fixes the rates of postage on letters and other articles handled, by the-. Postmaster-General’s, Derpartment. The schedule to the bill provides that there shall be a war-time tax of. id., on each letter or post card. The sarnie- rate is to- apply to each copy of Hansard, irrespective, of the size of the number., yet newspapers weighing 20 oz., if posted at one1 time by the same person,, are. to bear exactly the same additional impost.. There is no justification for perpetuating in war-time the anomalies and inconsistencies in the existing legislation. Unless the additional impost is to apply all round,, the taxpayers should be apprised of the variation between the charges to be levied on letters and post cards and the- rates- at which newspapers and periodicals are to be conveyed through- the post. Such differential treat ment is inequitable.. The public- should know, of the generous, concessions granted to the proprietors of newspapers, such as press, rates for telegrams, teleprinter facilities, and bulk rates, for newspapers. I realize that the Minister assisting the Postmaster-General (Mr. Lawson) has not had much tame to- consider- these, problems, but these are matters which should not be allowed, to. pass unnoticed when postage rates generally are being increased.. The amendment foreshadowed by the honorable member- foi- Wentworth (Mr. Harrison), is worthy of support.. I agree with him that, as soon as the war is over there should be a thorough overhaul of our taxation system.

Mr Calwell:

– Why not start now ?’

Mr ARCHIE CAMERON:

– Even the honorable gentleman who has interjected cannot say what the financial state of this country will be when the wau has ended-, although most, of us are fairly certain that it, will-not be very satisfactory. That, however; is= all; the stronger reason why we should decide to overhaul our taxation legislation. Postal charges are a form of tax, and should be considered when such a. revision takes place.

Mr CALWELL:
Melbourne

.- 1 deplore this kind of taxation, as I do all forms of taxation other than income tax, land tax and probate duties.

Mb. McDonald. - Land tax: is the unfairest of them all.

Mr CALWELL:

– It is a> tax which may press unfairly om some land-holders in country districts) but it also- operates on city properties.

M,r.. SPEAKER.: - Order ! The honorable member may not discuss the land tax in connexion- with this measure.

Mk. CALWELL. - An additional impost of one halfpenny on each letter will place a further burden- on the masses of the people. It would appear that the proprietors of newspapers have been carefully excluded from this additional tax because,, as the honorable member for Barker (Mr. Archie Cameron) pointed out, although each letter will have to bear an additional halfpenny stamp, the proprietors of newspapers- will have to pay only the same amount for newspapers in hulk weighing i20 oz. I could understand that rate applying to COUntry newspapers with a small circulation, but

I cannot see any reason why the owners of metropolitan daily newspapers should, at a time when other sections of the community are making great sacrifices, be allowed to escape their share of the burden. The bill does not provide for equality of sacrifice. I suggest that each newspaper should boar an additional halfpenny stamp if each letter must do so. Since the war started, the Commonwealth Prices Commissioner has authorized an increase by 331/3 per cent. of the prices charged for newspapers, notwithstanding that they have been reduced considerably in size and that consequently the cost of production must be less than it was previously. It would appear that the owners of newspapers are able to convince the authorities that they really perform some useful public service in the dissemination of news, notwithstanding that frequently they do not tell the truth, and indeed are more a menace rather than an instrument for good in the community. I ask the Government not to be too tenderhearted when dealing with newspaper proprietors, or too solicitous of their welfare, but to call upon them to share the increased burdens which are being placed on the community generally under this bill.

Mr Sheehan:

– They would pass on the increased charges.

Mr CALWELL:

– There is a limit to the degree to which that can be done. I have heard it suggested from the Opposition benches that a tax should be imposed on newspaper advertisements. Indeed I have advocated such a tax myself as a means of disciplining the people concerned and making them contribute towards the cost of the war. I should prefer a tax on advertisements in newspapers to a tax on letters which people generally are sending to their friends more frequently now than in normal times. Although I am not enthusiastic about the bill, I shall support it. but I hope that we shall have an assurance from the Minister that there will be no further increases of postal rates. I fear that this budget, bad as it is, is not the worst which will be presented to this Parliament, but that subsequent budgets may provide for still higher postal rates.

Mr Chifley:

– Sufficient unto the day is the evil thereof.

Mr CALWELL:

– I do not think that the Treasurer should adopt catchascatchcan methods, and I trust that something better will be found in the future. This additional tax will not be popular among the workers, and, therefore, I ask the Minister to give an assurance that the rates set out in the schedule will not be further increased, and that the operation of the bill will be confined to the war and a definite period thereafter.

Mr MARWICK:
Swan

– I wish to be clear about some points in connexion with this bill. I desire, first, to know why there is no reference in it to telephone rates. On the 12th November a regulation varying the charges for telephone calls was promulgated. For what reason was that matter dealt with by regulation, whilst the introduction of a bill was deemed necessary before additional postal rates could be levied ? Under the regulation to which I have referred there will be a general reduction of telephone charges in Sydney and Melbourne. The charge for conversations of three minutes over distances exceeding 15 miles, but not exceeding 25 miles, is to be reduced by 2d., whereas in respect of conversations over country telephone lines, not exceeding 50 miles, there is to be an increase of 3d.; in respect of calls over a distance exceeding 50 miles, but not exceeding 100 miles, the increased charge will be 6d.; and for conversations beyond 100 miles, but not exceeding 500 miles, the increased rate will amount to 9d. In Brisbane, Adelaide, Perth and Hobart, telephone conversations over distances exceeding 10 miles, but not more than 20 miles, will cost 2d. less, whilst for distances exceeding 20 miles, but not exceeding 25 miles, the reduction will be1d. Those rates indicate a distinct discrimination between telephone subscribers in the metropolitan area and those connected to country exchanges.

Mr SPEAKER:

– Order ! The honorable member is referring to matters not included in the bill.

Mr McDONALD:
Corangamite

– I, too, wish to refer to the unfairness of the rates imposed under this bill. As the honorable member for Melbourne (Mr. Calwell) pointed out, newspapers weighing up to 20 oz. are to be called upon to pay only the same additional charge as applies to a letter or a postcard. That is manifestly unfair. The honorable member also complained that . these additional postal rates would impose a tax on the workers. There is not much ground for objection on that score, because it is practically the only tax that that class of the community is to be called upon to bear. I am, however, more concerned with the reduction of postal facilities in the country, mainly because of the war. In some country districts the available man-power has been depleted through enlistments, and in consequence the telephonic services have been reduced. This is not the time to reduce such services. On the contrary, people living in country districts should be given more of the amenities which are enjoyed by the people of the cities. During recent weeks a good deal has been said regarding the decentralization of industry. If we are to do anything effective in that direction, we should encourage people to remain in the country. That can be done only by giving to them a larger share of the benefits which hitherto have been almost exclusively the privilege of citizens in the more populous areas of the Commonwealth.

Sitting suspended from 6.15 to8 p.m.

Mr McDONALD:

– Prior to the suspension of the sitting, Mr. Speaker, you intimated tactfully, but none the less firmly, that you could not continue to allow the latitude that had been given to some members in the debating of matters not covered by the bill. I, therefore, move -

That all the words after “ bill “ be omitted with a view to insert in lieu thereof the following words: - “be withdrawn temporarily and re-introduced with the provisions of Statutory Rules 1941 No. 201. incorporated therein “.

My object in moving this amendment is to provide an opportunity for the discussion of telephonic services and charges in Australia. At a time like this, when that big public utility, the PostmasterGeneral’s Department, is returning huge profits, and when the Govern ment proposes to increase charges in certain respects, it would not be proper, in my opinion, for us to approve of the reduction of any of the services now being given in country districts. The tendency should be to increase, and not to reduce, services. People who live at a distance from the large centres of population should be given additional facilities. Only a fortnight ago notice was received in a town which I could name to the effect that the annual revenue through the telephone service had fallen £9 below the stipulated figure to justify a continuance of the service at the existing standard, and the residents were advised that unless they contributed, among them, the £9 required the service would be reduced. That was a most unfair attitude for the department to adopt. Not only is the Postmaster-General’s Department admittedly amoney-making enterprise, but we have been told frankly that the increased charges proposed in this bill are intended to swell the revenue available to the Government. I, therefore, appeal to the Government to review its attitude in this connexion, and at least protect the residents of country districts from a curtailment of their postal, telegraphic and telephonic services because their localities have suffered a reduction of population, partly through enlistments in the Australian Imperial Force and partly through the attraction of their residents to big cities where employment is offering in our munitions factories.

Mr COLLINS:
Hume

.-I support the remarks of the honorable member for Corangarnite (Mr. McDonald). Increased postal, telegraphic and telephonic facilities should be available to people in country districts. There is a sustained request to-day for the de-centralization of many public activities. I believe that life in country districts would be greatly encouraged if the services provided by the Postmaster-General’s Department were more freely available to the people there.

Mr Clark:

– Why did not the honorable member make a move in that direction, while he was Postmaster-General?

Mr COLLINS:

– I made a considerable move, but unfortunately insufficient time was available in which to carry out the programme that I had envisaged. The Postmaster-General’s Department is one of the important revenue-producing agencies of the Commonwealth, but unfortunately its profits may not be applied for the expansion of the department’s activities. New works and buildings have to be provided through the Department of the Interior which, because of war exigencies, is not able to keep pace with the building programme which it is expected to carry out. For a number of years requests have been made for the establishment of a trust fund within the Postmaster-General’s Department, into which moneys could be paid and from which they would be available for the enlargement of the department’s services as required. This variation of procedure was suggested during the period when the honorable member for Wentworth (Mr. Harrison) was Postmaster-General, and also in the periods during which the honorable member for Barker (Mr. Archie Cameron), Senator McLeay and I administered the department. Throughout that time the Department of the Interior was unable to provide the new buildings and services desired by the Postmaster-Gen eral’3 Department. My view is that work of this nature should be let by contract to private firms. I believe that if that policy >were applied, the Postmaster-General’s Department would be able to render a much better service than at present to the general community, and especially to people living in country districts.

Mr MARTENS:
Herbert

.- I realize that this amendment has been proposed as a political stunt. Governments supported by honorable gentlemen opposite could have done a great deal to improve the services of the PostmasterGeneral’s Department in country districts during the long period they held office but they failed to take advantage of the opportunity to do so. We all know that for many years requests by correspondence and otherwise for extensions of the services of the Postmaster-General’s Department have been met with the reply that such extensions could be granted only if sufficient revenue were guaranteed. I know of centres in my own electorate which need additional postal, telegraphic and telephonic facilities, but every request of that nature has been met with the reply that extensions could be granted only if a certain specified revenue were guaranteed. Two inspectors in one area that I have iia mind reported favorably upon a request for additional facilities, but the request was rejected on revenue grounds. I have never before heard the honorable member for Hume make the excuse that extensions of postal services could not be granted because of thu limitations of the Department of the Interior. Requests for these extensions were being made regularly long before the war. Each year the PostmasterGeneral’s Department returns a large sum in profits to Consolidated Revenue, and it is time that a proportion of those profits was earmarked for extensions of the services. In my opinion, this amendment has been moved merely to embarrass the Government and to delay the imposition of the proposed increase of postal charges. I do not agree with the view that these increased charges will seriously affect the workers. They will fall chiefly upon commission agents and business houses which make large demands on the services of the Postmaster-General’s Department, and I can see nothing wrong with calling upon these interests to pay a little more in postal charges in order to help the Government to finance the war effort. I hope, however, that before very long the Government will be able to give close attention to ways and means of relieving the present unsatisfactory position in respect of postal, telegraphic and telephonic services in country districts. There is ample scope for improvements which the anti-Labour governments, supported by honorable gentlemen opposite, failed to effect in the long period in which they were in office.

Mr. MARWICK (Swan) [8.10J.- I strongly object to the statement of the honorable member for Herbert (Mr. Martens) that this amendment has been moved as a “political stunt”. It has been moved as the result of am objection I raised this afternoon to the imposition of increased telephonic rates by regulation. I remind honorable gentlemen that, the amendment makes no reference to postal charges. We desire that the regulations issued on the 12th November, under the Post and Telegraph Act shall be incorporated in this bill. As the time in which action would have to be taken in this House for the disallowance of these regulations will expire two days hence I consider that this action is well justified, for it will give us an opportunity to discuss the subject I strongly object to government by regulation.

Mr Pollard:

– The honorable gentleman supported a government which practically introduced government by regulation.

Mr.MARWICK. - I have always protested against government by regulation. I offer no objection to the proposal to reduce telephonic charges within a 25-mile radius of the general post offices at Brisbane, Adelaide, Perth or Hobart, and within a 30-mile radius of the general post offices of Sydney and Melbourne, but I strongly object to the proposed increases of telephonic charges to persons living in country districts. This, in my opinion, is discrimination of the worst kind. I direct attention to the following proviso to the newly issued regulation 138 of the Telephone Regulations: -

Provided further that for trunk-line calls between exchanges or offices situated outside the boundaries of a State capital city network but within30 miles of the general post office, Sydney or Melbourne, or within 25 miles of the general post office, Brisbane, Adelaide, Perth or Hobart, and exchanges or offices situated within a radius of 10 miles of the general post office in each such State capital city, the charges specified in the above table shall be reduced as follows: -

I now direct attention to regulation 141 of the Telephone Regulations which sets out the following increases of charges which are in direct conflict with the reductions of charges in the preceding table : -

Mr.Fadden. - Those additional fees constitute a penalty for living in the country.

Mr MARWICK:

– That is so, and such discrimination against people living in scattered areas is totally unwarranted. I therefore trust that the Government will agree to the amendment, and incorporate the recent variations of the telephone charges inthis bill so that we may debate them.

Mr BAKER:
Maranoa

.- I was astounded to hear the honorable member for Hume (Mr. Collins) advocate the improvement of telephonic and mail services in the outback areas, because last year, when he was Postmaster-General, he refused my plea for the replacement of the post office at Dalby. There would be no building ; there was no money ; there was a war on, he said. Well, the war isstill on.I takethis opportunity,however, to renew my request for the provision of a new post office at Dalby and at other places. The present building, which is required to accommodate 37 employees, is a disgrace. Since this Government has been in office for only six weeks, blame for the conditions under which the postal employees are required to work at Dalby cannot be placed on it. The fault lies with the honorable member for Hume and his predecessors, who were neglectful oftheir duties as Postmasters-General, especially their duty to improve telephonic, telegraphic and mail services in the far west. The new Postmaster-General (Senator Ashley), who is very sympathetic, has told me that he intends to extend those services. The Postal Department last year made a profit of £3,378,565, much of which should be used to extend and better the department’s services.

A raw deal has been, given to the nonofficial postmasters and postmistresses. If there is one section of the community which is sweated, it is the section which ie made up of the people who serve in non-official post offices.

Mr SPEAKER (Hon W M Nairn:

– Order! That subject is not touched in either the bill or the amendment.

Mr BAKER:

– I bow to your ruling and appeal for improved services in the outback.

Mr ARCHIE CAMERON:
Barker · ALP

– I remind the honorable member for Herbert (Mr. Martens), who spoke about previous Postmasters-General, that I was Postmaster-General for five months, and that in that time more reforms were started in the post office and in institutions associated with it than, in the previous fifteen years or since. As the result of what I did, the telegraphic rate is uniform, although previously uniformity had been held to be impossible. I had no opportunity in the short period in which’ I held the portfolio of Postmaster-General to introduce the legislation required to bring about that reform, but, as the result of what I had done, my then colleague, the former honorable member for Calare (Mr. Thorby), was able to bring down legislation for that purpose. T also remind the honorable member and those who sit with him that when I was Postmaster-General, I caused to be restored free of cost to subscribers the private lines which had been burnt out in bushfires in many places in Australia. The honorable member will remember that, while I was PostmasterGeneral, I started some arguments about wireless broadcasting. Those arguments have not been settled, but the honorable member would not say that I was wrong in starting them. The appointment of the Joint Parliamentary Committee on Broadcasting is largely the outcome of what I did about certain wireless broadcasting stations three years ago.

Mr Martens:

– With regard to telephones, the same condition operated after the honorable member had left the post office as before he went into it.

Mr ARCHIE CAMERON:

– That is so. The honorable member and I had one argument over the Proserpine Post Office. The honorable gentleman spoke to-night and mentioned the necessity to keep down expenditure, and the Government’s statement that certain things do not pay. If former Postmasters-General had acceded to all of the requests of the honorable gentleman, the Post Office would be insolvent. The honorable member wanted concrete construction instead of wooden at the Proserpine Post Office. The difference between the two estimates of costs were so great as to put concrete construction absolutely beyond the pocket of any self-respecting Postmaster-General.

Mr SPEAKER:

– Order 1 The issue before the Chair is between the bill and the amendment, and not between, successive Postmaters-General.

Mr ARCHIE CAMERON:

– I am entitled to reply to what was said by the honorable member, but, if necessary, .1 can defer my reply until the bill is in committee.

Mr SPEAKER:

– The honorable member is entitled to reply.

Mr ARCHIE CAMERON:

– Any honorable member who studies rates and regulations can answer the question why the postal charges are to be increased by legislation and the telephonic rates by regulation. In respect of the postal charges, there is only one objective, but, in respect of the telephone rates, which we would not have been able to discuss but for the amendment of the honorable member for Corangamite (Mr. McDonald), there are discrepancies and variations. In its telephone rates regulations the Government is doing things in the interests of the city as against those of the country districts which no government should bring to this chamber at this stage when the Government is asking even more loudly than we are that every penny of revenue should be got into the Treasury coffers. By means of regulations the Ministry intends actually to reduce telephone charges in the great cities of Australia. I have been a telephone subscriber in the city as well as in the country, and I can compare the treatment of subscribers in both areas. I have been a subscriber in Adelaide, where tens of thousands of subscribers are connected to the one exchange. In Melbourne and Sydney still greater numbers of subscribers are connected. I forget the actual figures - I had them when I was PostmasterGeneral - but I think that in Sydney there are about 250,000 individual telephone subscribers, each of whom, had the right under the old rates to ring any other subscriber in the network for Id. a call and will have the right under the proposed rates to ring for 1-id. a call. In the country districts calls over distances no greater than from one city suburb to another have to be made on trunk lines and are, as I am reminded by the honorable member for Swan (Mr. Marwick), limited to three minutes, whereas the city subscriber can speak for any length of time. I know many exchanges in my electorate which have ten subscribers or less. Mount Gambier exchange would be the biggest exchange in my electorate, and I doubt whether more than 1,000 subscribers are connected to it. Lots of small exchanges are located at points a few miles distant from Mount Gambier and the result is that, if people desire to «peak to comparatively near neighbours, they have to make trunk line calls at the higher trunk line charges, whereas, if (hey were in Sydney all would be on the one network.

I welcome some of the things that the Postmaster-General is doing under the regulations, for instance, the increase of the number of telephones on the exchange from 600 to 1,000 is very good. But that does not get away from the fact that other increases, which are wrong, are to be made. For instance, what is the necessity to increase the fee for making a. personal call to ls. if the distance is more than 500 miles? The cost of making a personal call does not vary according to distance. Taken one by one, the proposals would be hard for any Government to defend. Another instance of discrimination against country telephone subscribers is the fact that the annual telephone rental where the exchange has 300 subscribers is £3 5s. for both business and private users. On an exchange of 10,000 subscribers the rental is £6 5s. for a business user and £5 for a private user. In addition to that the cost, of certain classes of calls in Sydney and Melbourne is to be reduced.

Mr Pollard:

– The revenue from the metropolitan telephonic business makes it possible for the post office to grant concessions to rural telephone subscribers.

Mr ARCHIE CAMERON:

– I am amazed that an honorable member representing a country constituency should say that. I expected that the honorable member for Ballarat would speak the truth and say-

Mr Pollard:

– I object to the honorable member for Barker implying that I do not speak the truth and I ask him to withdraw that remark.

Mr SPEAKER:

– Does the honorable member for Barker wish to imply that?

Mr ARCHIE CAMERON:

– I had not finished what I was about to say, which was that I was amazed that he was not one who would speak the truth that but for the country areas the cities would not be in existence. The constituents of the honorable member should be plainly told what he said, and I think that it is time I did so. We must get down to the fundamental fact that, if it were not for country production and the squatters, the farmers, the fruitgrowers and the dairymen and the miners, who conduct their operations in the country, Melbourne and Sydney would not be in existence to need telephone services. When I was a member of the South Australian House of Assembly tha vexed question raised in the honorable member’s interjection was often discussed in respect of railway freights and fares, the principle involved then being the same as that I arn now emphasizing in regard to telephone charges. So long as it is made easier and more attractive for people to go to the metropolitan areas, so long shall we have towns like some in my electorate and the electorates of the honorable member for Ballarat and the honorable member for Bendigo (Mr. Rankin) beset by difficulties brought about by the trend towards centralization. Examined as a matter of principle and fact these telephone regulations contain certain bad elements. I strongly and sincerely advise the Minister assisting the PostmasterGeneral (Mr. Lawson) to agree to the amendment and allow the increased telephone charges to be considered in conjunction with the increased postal charges. So far as I know no increase of telegraphic rates is proposed, but the Government cannot get away from the fact that an explanation is necessary when it docs one thing by legislation and the other by regulation. The less “we do by regulations the better. Regulations are not a good way of dealing with the country or of imposing burdens on the people. There are too many hurdles in the Acts Interpretation Act to allow of proper government in that way. If the Attorney-General went into this question, he would be one of the first to admit that the proper, correct, parliamentary and democratic way would be to produce a bill to increase the telephone charges instead of doing it by the sticky process of regulations.

Debate (on motion by Mr. Mulcahy) adjourned.

page 842

INCOME TAX ASSESSMENT BILL 1941

In committee: Consideration resumed from the 19th November (vide page 590).

Clause 6-

Section forty-four of the principal act is amended : -

by omitting paragraph (a) of subsection (2.) ; and

toy omitting sub-paragraphs (i) and (ii) of paragraph (b) of sub-section (2.).

Upon which Mr. Spooner had moved by way of amendment -

That, in paragraph (b), the words “subparagraphs (i) and (ii) “ be omitted with a view to insert in lieu thereof the words “ sub-paragraph ( i ) “.

Section proposed to be amended -

44-

The assessable income of a shareholder shall not include dividends -

received from a company that does not carry on business in, or derive income from sourecs in, Australia;

paid wholly and exclusively out of one or more of the following: -

The amount remaining after deducting from income derived from sources out. of Australia (not being income which under this or the previous act is or has been assessable income of the company) any losses or outgoings incurred in gaining or producing that income which would have bren allowable deductions if that income had bren assessable income;

profits arising from the sale or compulsory resumption for public purposes of assets not acquired for the

Mr SPOONER:
Robertson

.- Before progress was reported on this clause I had moved an amendment to clause 6 to omit the words “ subparagraphs (i) and (ii) “ and to insert the words “ sub-paragraph (1) “. I explained that this was preparatory to a further amendment, which I proposed to submit at a later stage on the assumption that the first amendment would be agreed to by the committee. The position will be made more clear to the committee if I state now the purport of the amendment which I propose to introduce later. Clause G introduces a new principle; it seeks to tax dividends received in Australia from profits earned outside of Australia by companies operating outside of Australia, or by ex-Australian companies.

Mr Hughes:

– Whose profits may already have been taxed.

Mr SPOONER:

-Yes, they may have been taxed in other countries. The dividends resulting from these profits will he taxed in Australia. Honorable members will realize that many Australians have invested their money in companies operating outside of Australia, let us say, for the sake of argument, in New Zealand or in the South Sea Islands. Some of these companies are subsidiaries of Australian companies. This bill proposes for the first time to introduce the principle of taxing such dividends in the hands of Australians as the dividends reach this country. Thebill proceeds further, in the second sub-clause, to tax dividends that are paid in Australia and which result from the sale of capital assets. This will apply even when the assets have been compulsorily resumed by the Government so that the previous owner has earned a book profit on them, and in due course must distribute the amount amongst the shareholders, whether he wanted to make the sale or not. The Opposition does not raise any issue about the principle concerned. This is the Government’s measure, and the Government wishes to obtain certain revenue by taxation for the purpose of augmenting the funds which it requires for the prosecution of the war. But the Opposition asks the Government not to make the effect of this clause retrospective. If it does so, hardship will be imposed upon the people who have received the class of dividends affected during the year which ended on the 30th June last. The transactions which gave rise to such dividends may have been carried out in perfectly good faith by people who had invested their money on the understanding that dividends would not be taxable in Australia; but now they become aware for the first time - sixteen months after the transactions took place - that between now and June, 1942, income tax assessments will be issued in respect of those dividends or profits. For that reason the Opposition asks the Government to accept the amendment, which proposes to remove the retrospectivity from this clause. The amendment that I propose to move later, on the assumption that the committee will agree to this one, will provide that the amendments proposed to be effected to the act by the clause as it now stands, shall notapply to any dividend paid, credited, or distributed, if the dividends were declared prior to the 30th October, 1941. I repeat that no issue is raised concerning the policy of the Government’s amendments. The Opposition accepts that as the policy of the Government, and does not contest the nature of the change that the Government desires to make. It merely asks the Government to accept this amendment for the purposes of removing the retrospectivity of the clause and making the profits or dividends taxable only if they become income in the hands of the taxpayers subsequent to the 30th October, 1941, which was the approximate date of delivery of the budget.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– The Government assures the committee that its new proposals are not intended to be retrospective beyond the 30th October, but the honorable member for Robertson (Mr. Spooner) has raised another issue in this amendment. He proposes to omit subparagraph (ii) of clause 6 and to exempt from tax any profits arising from the sale, or compulsory resumption for public purposes, of assets not acquired for the purpose of resale at a profit. The Government has contended all along that profits derived from the resale of property of companies - not the return of capital, but profits over and above that - and distributed to the shareholders as dividends, should be taxable as ordinary dividends. It appears that the honorable member wishes to submit two amendments as one. The Government cannot accept the first, which propose to omit the words “ subparagraphs (i) and (ii) “, and to insert the words “sub-paragraph (i) “. However, the Government is agreeable to the proposal regarding the retrospectivity of the tax.

Mr FADDEN:
Leader of the Opposition · Darling Downs

– The Opposition has submitted the amendment for the very reason which the Minister has just outlined - that it is opposed to this new principle which the Government proposes to introduce into federal taxation practice, namely, the taxing of capital profits. The Opposition is definitely opposed to the taxation of capital profits in this way, whether the proceeds of the profits find their way, as dividends, into the pockets of the shareholders or not. The principle is bad, because the profit is capital profit, and the Government’s proposal involves a definite departure from the principles of income taxation as practised by the Commonwealth since federation. The Opposition will oppose the passage of clause 6 as it stands in the bill.

Question put -

Thatthe amendment (Mr. Spooner’s) be agreed to.

The committee divided. (Thechairman - Mr. Prowse.)

AYES: 23

NOES: 27

Majority 4

AYES

NOES

Question so resolved in the negative.

Mr SPOONER:
Robertson

.- I move -

That the following sub-clause be added tei the clause: - “ (2.) The amendments effected by the bust preceding sub-section shall not apply to any dividends paid, credited or distributed if the dividends were declared prior to the thirtieth day of October. 1941.”

The amendment gives effect to what the Treasurer (Mr. Chifley), in a semi-generous spirit, has promised that the Government will accept. The provision will not now be retrospective in its application to dividends from ex-Australian sources, but the amendment does not remove the serious objection of the Opposition to the taxation of capital profits. However, the Opposition has divided the House on that principle, and the Government will not yield the point.

Mr Lazzarini:

– The Government, will accept the amendment.

Am end ment agreed to.

Mr JOLLY:
Lilley

.- The Minister assisting the Treasurer (Mr. Lazzarini) gave an assurance last week that taxation of the proceeds of the sale of capital assets would not be retrospective. I should like to know whether this amendment covers the point.

Mr Lazzarini:

– It covers that point and, I think, all similar points. In any case, the Government is prepared if necessary, to add a clause to put the matter beyond doubt.

Clause, as amended, agreed to.

Clause 7 -

Section forty-rive of the principal act is repealed.

Mr FADDEN:
Leader of the Opposition · Darling Downs

– For the reasons which I gave in my secondreading speech on the bill, the Opposition is opposed to the repeal of section 45, which relates to the liability of certain dividends to tax. “We believe that the Government proposes to depart from the principle laid down for dealing with bond interest, and we shall vote against the repeal of this section.

Question put -

That the clause be agreed to.

The committee divided. (The Cha to max - Mr. Prowse.)

AYES: 27

NOES: 23

Majority . . 4

AYES

NOES

Question so resolved inthe affirmative.

Clauses8 and 9 agreed to.

Clause 10 (Loss on property acquired for profit-making).

Mr FADDEN:
Darling Downs Lender of the Opposition

– The Opposition is opposed to this clause. We believe that the taxpayers are put to enough trouble and inconvenience at the present time without our adding further to their difficulties. The obligation should not be on the taxpayer, when he acquires property, to notify the Commissioner of the purposes for which he intends to use it.

Question put -

Thatthe clause be agreed to.

The committee divided. (Thechairman - Mr. Prowse.)

AYES: 27

NOES: 23

Majority . . 4

AYES

NOES

Question so resolved in the affirmative.

Clause 11 (Contribution to pension fund).

Mr JOLLY:
Lilley

– I ask the Minister assisting the Treasurer (Mr. Lazzarini) to assure me that clause 11 will not apply to an employee who holds only one share in a company for the purpose of enabling the enterprise to secure registration.

Mr.Fadden. - The clause does not apply to a nominal shareholder who is a signatory.

Mr.Lazzarini. - That is so.

Clause agreed to.

Clause 12 (Gifts and contributions).

Mr.LAZZARINI (Werriwa- Minister assisting the Treasurer) [9.8]. - Under clause 12 b of the bill, the deduction of calls paid to the companies and syndicates described in paragraph d of subsection 1 of section 78 will he discontinued.

The tax concession that should be granted in respect of calls paid to mining companieswas considered by the committee of members which was recently appointed. As honorable members have already been informed, the recommendation of the committee has been adopted by the Government. With the high rates of tax that it is nowneces- sary to impose in order to meet war expenditure, a deduction from income of the amounts paid as calls to mining companies would have resulted in the Commonwealth, in many instances, meeting thepayment of the greater part of the amount of the call. This result could not be accepted under present conditions.

The committee of members considered that a deduction in respect of calls paid to mining companies should be allowed to an extent which would allow substantially the same tax benefit as was enjoyed in pre-war years. The committee recommended that a deduction ofthe amounts paid as ‘calls to mining companies should not he .allowed -as a deduction in arriving at taxable income, but that a rebate of tax on the amount of the calls paid should be allowed in the taxpayer’s assessment at one-third of the rate of tax applicable to the taxpayer’s taxable income. Provision for this rebate of tax will be more appropriately made in the division of the act which deals with rebates. Proposed new section 160a, dealing with rebates ‘©f .tax in respect of calls, has already been circulated as a part -of clause 22 of the bill. I propose to discuss that provision when the committee reaches that clause. At this stage, honorable members .are asked to agree to the omission of .paragraph d of sub-section 1 of section 78 .of Khe principal act.

Mr ARCHIE CAMERON:
barker · ALP

– The committee should carefully examine the effects ;of this proposal upon the gold-mining industry in particular, upon the mining industry generally, the oil industry, and afforestation, because three important activities are affected by the operation -of the new compromise. I ,use the term “-compromise1” in the strict .sense of the word.. What the committee of members has produced as the result of its (deliberations over the week-end, ‘and what the Government has agreed to accept, certainly improves the bill ; but I -cannot ‘allow this opportunity *0 pass without directing attention to the inevitable ‘results if the Government persists -with this legislation. At the outset, I inform honorable members .that I -hold -no interests whatever in companies. There is in Australia an urgent necessity to discover oil, and an urgent demand for gold. In addition, there is an -equally urgent demand for many kinds of minerals, including copper, zinc, asbestos, rutile, zirconium and other metals which aire essential to the munitions industry. This bill affects their future.

I -propose to survey ‘briefly the effect of Commonwealth legislation upon the goldmining industry. You, Mr. Chairman, who represent a Western Australian constituency, will understand fully the implications of my comments upon this matter. Before the outbreak -of war, it was the practice to exempt the gold.mining industry from making contributions to revenue. After September, 1939, one of the first actions of Parliament, which I opposed strenuously at the time,, which I then believed to be wrong, which is wrong now, and which will be wrong -.so long as it operates, was to -impose a tax upon the increment of the price of gold, arising out of the war. If the Government had been (consistent at that time, it would have imposed a tax upon every other- increment, especially on respect of metals, which arose -out of .the increase of prices as the result of the war. But nothing of the sort was done. <G.old is a peculiar commodity. Like all other minerals, once it *is ‘extracted from the earth, it can never be replaced. When .the price of gold increased, Abe ‘opportunity to work the poorer shows, (the marginal show.s, was /greater than lever .before. AH that .the Government succeeded -in .doing, by introducing -the special gold increment tax, -was to prevent some -of the -poorer shows from “being worked at a time when they could have been more profitably operated than a.t any other ,period.

Surveying the .gold-mining industry -as a whole, we have to relate to it the matter of the -exemption of calls on gold-mining companies, partial allowance for which is now made under the compromise. As a rule, the big companies which are paying dividends do not make calls. That would be a most unusual procedure. The calls are being made by companies which are struggling to remain on their feet. It may be contended that a .good deal of roguery goes on in the gold-mining industry. I should not be surprised if that were true. ‘So far as I am aware, there are only two places in the world where that has not occurred. One is Virginia, in the United States of America, the birthplace of George Washington, who always told the truth, and the other is this House of Representatives, where honorable members are not permitted to tell anything but the truth.

The effect of the compromise will .be to reduce the amount of capital that will be invested in the gold-mining industry. Definitely, that is bad for the ‘Commonwealth in time of war. Problems associated with dollar exchange, the maintenance of our exchange rate with the United’ -Kingdom, and the purchase of our requirements in the United States of

America can be dealt with most easily and most economically by the greatest possible production of gold. In the desert areas of Western Australia, and in tho still unexplored interior, even in the old shows in Victoria. New South Wales and Queensland, the production of gold is going on apace. Where labour can be obtained for this purpose, the Government should encourage rather than discourage the production of gold. When the legislation was introduced in 1939, I should have taken no objection to it if the Government of the day had decided to subject gold to the same rates of income tax as apply to other metals. If this Government were to introduce proposals to place gold-mining on the same income tax basis as other mining, it would be consistent and I should not oppose such action. But, in this instance, the industry is struck by the increment tax, and its development, expansion and capacity to win gold from the marginal shows will fee seriously affected by the compromise.

To date,, oil has not been found in payable quantities in Australia. For the purpose of waging this war, the discovery of flow oil in Australia would be of infinitely greater importance than even the discovery of another Kalgoorlie or Ballarat. Almost without exception, every investor who has put money into oil shows in Australia has lost it. He had as much chance of reward) as has the man who supports the Golden Casket or Tattersalls. I am not defending the operations of companies which I have criticized in the past, but I am stating a case for Australia’s need of oil supplies in time of war. The Commonwealth has gone to the length of subsidizing companies,, and has passed special measures, in order to promote the discovery of oil in New Guinea. Experts from the United States of America have been sent to the electorate of the honorable member for Gippsland (Mr. Paterson) in order to- determine what are the prospects there. Therefore, instead of discouraging investment in shows of this description, the Government ought to be rather thankful that there are in Australia people who are prepared to risk their money in prospecting for flow oil.

The history of the discovery of oil in other countries is very interesting. When we think of the millions of pounds expended by Weetman Pearson, in Mexico, before the discovery of the flow oil which was so largely responsible for the maintenance of oil supplies to the United Kingdom in the period from 1914 to- 1918, we realize- what risk there is in the matter. If we compare the expenditure in Mexico with what has taken place in Australia, we must admit that we have made very little, progress. Ti would be a very fine thing if an even more liberal idea were held by the Government in regard to- expenditure by taxpayers in endeavours to find flow oil in this country.

I come now to minerals, of which a great variety is required by the munitions industry of Australia. Some of them are very difficult to obtain; they have to be- discovered. Some are in great demand, and very short supply. The world production of tantalite - a mineral found in Northern Australia - before the outbreak of the present war was 110 lb., the production; of Australia being 108 lb. This- mineral is one of the greatest agencies- for the toughening and hardening of steel, and its production in large quantities is urgently desired by Great Britain and the United States of America. One could name many other minerals which probably are more familiar to some other honorable members than they are to me. Every one of them should be mined, and stored against the day when it may be required; for at this stage none of us can say how long the present conflict may last.

The last subject with which I shall deal is afforestation; this, in conjunction with the discovery of oil,, affects my electorate.. In the southern portion of the division of Barker there are considerable forests of pine, planted mostly by Government enterprise over- the last 40- or 50’ years or more. Large areas, were planted also by private enterprise. The wood is now being used for purposes for which, only two years ago, experts declared it was utterly impossible to use it; it has been found suitable for the- manufacture of matches, munition boxes, and certain other things which I shall not mention. Those who put’ their money into that kind of plantation knew that they could not expect a return from it until the pines were ready to cut 35 years after planting. By and large, men who put money into a venture of that description do not expect a great reward in this world, because the average age of such investors is above 35 years. In all too many cases, no reward has been reaped. The value of the pine in my district is 5s. 3d. per 100 super feet; that is what the merchant is willing to pay for it. But under the system of prices fixation adopted by the Commonwealth, with which the private forest owners do not quarrel, the price has been determined at 3s. 6d. per 100 super feet. In that respect alone, one-third of the income which those who are selling to-day would have derived is denied to them by Commonwealth legislation designed to benefit Australia as a whole. The important problem confronts us of replanting areas which are being cut out to-day. Usually, the land is left out of plantation for five years after the pine has been taken off. Then a further 35 years must elapse before a dividend is received. If the Government says to potential investors, “ From now on, only to the extent of one-third of your actual investments will we regard you as benefactors “ that will not be to the ultimate welfare of this country. Australia is more deficient in timber than is any other continent. Only l£ per cent, of the total area of South Australia contained natural forests at the advent of the white man, and the area which is to-day covered by natural and plantation forests is very little greater. That is indicative of the conditions generally throughout Australia. It was a part of my job last summer to knock around the Otway ranges, and the Strzelecki ranges on the other side of Port Phillip Bay. Huge areas of native timber have been destroyed, in some instances by pure vandalism and in many places as the result of short-sighted Government policy. Perfectly good forest land has been turned into dairying country in the Strzelecki ranges, where the hills are so steep that a crow could not descend them unless it wore breeching. These natural forest lands are worthless for dairying purposes. The immediate, and to a greater extent the ultimate, future of this country, depend on the re-afforestation of these areas. The growing period for Pinus insignia, or Remarkable pine, which has the. shortest period of growth of any timber, is 35 years. The growing period of the hardwoods that have been destroyed in the Otway and Strzelecki ranges must be anything up to 200 or 300 years. Reafforestation in respect of hardwoods cannot be undertaken except by a government instrumentality; I am not so foolish as to believe that investors would engage in hardwood cultivation with the prospects such as they are. But in the southern States of Victoria and South Australia, and the southern portion of Western Australia and Tasmania, the planting of pine of various sorts could be undertaken privately. The Government should therefore give every encouragement to the re-afforestation of certain areas, and the extension of forests to what is to-day swampy and sandy country, with a high rainfall. The Treasurer (Mr. Chifley) may retort that, with high rates of tax, aiding a man in a high income group would practically mean subsidizing him in respect of afforestation or the opening up of mines. Nevertheless, these points have to be considered. Sooner or later, the Government must tell this Parliament whether the policy is to be one of abandoning all hope of future advancement, with minimum planting of timber, development of mineral resources, and prospecting for petrol and oil, in order to help that which is urgently necessary for the prosecution of the war, or of looking only to the immediate effect on the budget of this country. The Treasurer may not have had the time to give to this matter the attention which I feel sure he will admit that it deserves. 1 am not in any sense criticizing the Government. My sole desire is to evoke some thought on the subject. The Prime Minister (Mr. Curtin) understands the gold-mining industry, and, I have no doubt, the valuable timber industry of Western Australia, much better than I do. He knows how long it has taken for the great jarra h and karri forests to grow, and realizes that, unless tended and preserved, these great natural assets will deteriorate. I merely ask that during the recess the Treasurer and those associated with him shall go carefully into this aspect of the matter, and weigh against the immediate requirements of revenue the ultimate welfare of this country; the encouragement which is or is not to be given to the investor; the development which is or is not to take place; and the assets which are to be drawn upon in time of war, or are to be increased even at such a time for the ultimate welfare of this country. There is, too, the protection of the surface of the soil; for whether we are at war or not, the matter of soil erosion has to be considered in the denuded areas which I observed last summer, particularly in southern Victoria. This is one of the most important matters that we have to consider. I believe that it can be effectively tackled only by some method of re-afforestation. If a person or company is prepared to expend money in planting such areas with timber, the Commonwealth Government in the long run, upon complete consideration, must recognize the wisdom of giving every encouragement possible to such enterprise, because what is done will be for the ultimate as well as the immediate benefit of this country.

Mr SCULLIN:
Yarra

.- The Government does not require to be convinced of the importance of the mining industry, and of afforestation^”’ I agree with what the honorable r/ember for Barker (Mr, Archie Cameron) has just said. He has made a very valuable contribution to the debate, in stressing the importance of these industries. The latter part of his speech, particularly in regard to forestry, struck a responsive chord in my heart. I agree, and so does the Government, that both mining and afforestation are important. But the Government is faced with the problem of financing a war. It has inherited high taxation, and has increased it, solely for the purpose of fighting a war. The question arises, whether the concession in respect of taxation which has been granted to the mining and forestry industries over the years that have gone, should continue at the same rate, or should be stepped up in the same abnormal proportion that taxation for war purposes has been increased. That was the issue which confronted the committee ap pointed from both sides of the House to consider this bill. The decision was that tax concessions on calls for mining and afforestation should not exceed the prewar rate. I hope that I shall not be regarded as presuming, if I pay my tribute to each member of the committee for his approach to the subject and for the broad, impartial, and fair manner in which he faced the facts.

The honorable member for Barker said that we should encourage companies to use their money for mining and afforestation purposes. I agree with the honorable gentleman, but it is one thing to encourage a private company to use its own money, and quite another to subsidize it in respect of the great bulk of its investment. That is what the honorable gentleman’s proposal would amount to. We must look at this subject in proper perspective in order to consider what may best be done. Ever since income taxes have been imposed, provision has existed for the deduction from taxable income of calls paid to mining companies. Consequently no taxes have hitherto been paid upon this purely capital expenditure. In consequence of war conditions, we have now reached a period of abnormal taxation. This factor was carefully reviewed by the committee which considered the Government’s taxation proposals, and figures presented to it convinced it that the country could not continue to allow the deduction which has so far been permitted. The following table compares the amount of tax deductions allowed under pre-war rates and the amount which would have been allowed under present rates if no amendment were made. The figures, I believe, will convince honorable members of the soundness of the committee’s view: -

If a man with an income of more than £2,500 a year were permitted to deduct mining calls in the ratio of the above table, he would enjoy a tax rebate of 16s. 8d. in the £1. If the Government encouraged the investment in mining and afforestation enterprises of the amounts represented, by caLls, it would be contributing S3 per cent, of the capital so invested. We may therefore pertinently ask: If the Government is to contribute 83 per cent, of the investment, why should it not contribute the whole of it? If it is to contribute five-sixths, why not also the extra one-sixth? If it can afford to contribute £83 of every £100 invested in afforestation under such conditions, I suggest that it could afford to contribute the total amount and take over’ the undertaking.

Mr Fadden:

– Although contributing £S3 in every £100 it would still get none of the profits.

Mr SCULLIN:

– Quite so; neither would it own any of the assets.

Mr Paterson:

– That is assuming that all of the investors would be on the £2,500-a-year mark.

Mr SCULLIN:

– If the honorable gentleman will refer to the table which I gave he will see that I dealt with income cases of from £500 a year to £5,000 a year. I then took the middle income of £2,500 a year in order to get at my percentage of 83 per cent. Let me give an instance of the kind of thing that is happening. I have not been given the exact, figures, but those I shall use will be in true ratio. It would not do to give the exact figures, for that would identify the company.

Mr Fadden:

– I take it that the right honorable gentleman’s figures willi be relative?

Mr SCULLIN:

– They will. A company was formed to explore leases and to prospect. The £1 shares were issued on the basis of 2s. on application and 2s. on allotment. The remaining 16s. was obtained’ by calls and the whole of it was exempt from taxation. The company, in the course of its exploration, discovered gold-bearing quartz. A new company was floated,, probably of the members of the old company, which took over, or bought, the rights of the old company. The whole, of the 16s. in the £1 called up by the old company was exempt from tax, and the whole of the capital represented in the £1 shares in the new company was paid by calls and was also exempt from taxation. While it might be all right in times of low, or moderate, taxes to grant full exemptions on mining calls, it would be quite improper^ in my opinion, to continue that policy in a time such as the present, when the results would be as stated in my table. In present circumstances no one could justify a continuation of these- exemptions.

The honorable member for Barker criticized the gold tax. That tax was- not imposed, originally, by this Government. I do not desire to criticize the’ tax, which provides that when the price of gold exceeds £9 an oz., half of the excess shall be taken in taxation-. In other words, with gold as it is to-day at £10 14s. a-n oz., the tax is 17s. an oz. I point out that the price of everything except gold is controlled. The price of gold, alone, is allowed to soar. It is a good thing for- Australia that the price of gold has increased1. I agree that gold is important in relation to our overseas funds, but as a means: to. conduct the war in the physical sense, it is: not nearly so important as copper.

Mr Paterson:

– Or oil.

Mr SCULLIN:

– Quite so. We could not put another gun on the battlefield overseas,, even if we had a- mountain of gold in Australia. We are getting from America all the wai; material that country can send. It is true that we can pay for munitions from America with, gold, but gold is not a physical instrumentality for- the conduct of the1 war. It is, after all, merely a means of finance in these days.. Metals, such as copper, are infinitely more precious for war- purposes. We need finance,, and if we- could get more finance by getting more gold, it. would be a good thing;. Goldmining is not a factor to-day as an industry for absorbing labour. The- big gold-producing State of Western- Australia is short of labour for the goldmines which are- already in operation. Sufficient men cannot. be obtained to develop these mines. Wood-cutters cannot be obtained to provide timber for the mines. So it is not a question, to-day, of encouraging gold-mining as a means of employing labour. ‘Gold, at present, is important as a means of finance, but not otherwise. The immediate need of the Government is to obtain cash resources to pay for the things that it requires.

The committee which investigated the taxation proposals of the Government considered the whole subject with a full sense of responsibility and it came to the conclusion that under the present abnormal rates of taxation, complete exemption of calls by mining companies could not be tolerated. In support of that decision I again refer honorable members to the table which I cited earlier in my speech. Such an exemption, whilst justifiable in periods of low or even moderate taxation, becomes entirely unjustifiable in days when the Government is charged with the grim responsibility of finding money with which to conduct the war. I therefore commend the decisions of the committee to the favorable consideration of honorable members. I pay my meed of praise to the committee for the manner in which it discharged the important duty placed upon it.

Clause agreed to.

Clause 13 agreed to.

Clause 14 -

Section eighty-six of the principal act is amended -

by omitting from paragraph (b) of sub-section (1.)the word “less” and inserting in its stead the words “ not more “;

by omitting from ‘paragraph (a) of sub-section (2.) the word “or”; and

by inserting after paragraph (a.) the following paragraph: - “ (ab) where a premium or premiums for the lease is or are payable in each of three or more years of the lease; or”.

Amendment (by Mr. Fadden) agreed to-

That the following sub-clause be added to the clause.: - “ (2.) The amendments effected by the last preceding sub-section shall not apply to any premium in respect of any lease granted, assigned or surrenderedprior to the thirtieth day of October, One thousand nine hundred and forty-one.”.

Clause, as amended, agreed to.

Clause 15 -

After section one hundred and one of the principal act the following section is inserted: - “101a. Where inthe year of income, the trustee of the estate of a deceased person receives any amount which would have been assessable income in the hands of the deceased person ifit had been received by him during his lifetime, that amount shall be included in the assessable income of that year of the trust estate.”.

Amendment (by Mr. Fadden) agreed to-

That, after the words “trust estate”, the following words be added : - “ and shall be deemed to beincome to which no : beneficiary is presently entitled.”

Clause, as amended, agreed to.

Clause 16 agreed to.

Clause 17 -

After Division6 of Part III. of the principal act, the following Division is inserted: - “Division 6a. Husband andwife. “102a. Where the spouse of a taxpayer (not being a spouse who lives apart from the taxpayer in pursuance of a decree, judgment, order or deed of separation or in circumstances which, in the opinion of the Commissioner, arc analogous thereto) derives taxable income, the Commissioner shall assess the taxpayer to paythe amount of tax which would be payable by the taxpayer if the rate of tax applicable to the taxableincome of the taxpayer were the rate of taxwhich would be applicable if there were added to that taxable income an amount equal to the taxable income derived by the spouse, and the taxpayer shall be liable to pay the amount so assessed.”.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I move -

That the proposed new section 102a be omitted with a view to insert in lieu thereof the following proposed new sections: - “102a.- (1.) Where after the twenty-ninth day of October, One thousand nine hundred and forty-one the wife of a taxpayer has acquired or acquires any property, whether directly or indirectly, as a result of any gift by the taxpayer or any transfer by him without his receiving fully adequate consideration, and the taxable income derived by the wife during the year of income is in excess of Two hundred pounds, the Commissioner shall-

assess the taxpayer to pay the amount of tax which would be payable if the rate of tax applicable to his taxable income were the rate which would be applicable if there were added to his taxable income an amount equal to so much of the income from that property as is included in the taxable income of the wife; and

assess the wife to pay the amount of tax which would be payable by her if-

the rate of tax applicable to so much of the income from that property as is included in her taxable income were the same as the rate at which the taxpayer is assessed in accordance with the last preceding paragraph; and

the rate of tax applicable to the remainder of her taxable income were the rate of tax which would be applicable to a taxable income equal to that remainder, and the taxpayer and his wife shall respectively be liable to pay the amounts so assessed. (2.) For the purposes of this section, the part of the income from the property included in the taxable income of the wife shall be the amount remaining after deducting from the income from the property -

the deductions allowable under this act from that income; and

where the property is abusiness such amount as, in the opinion of the Commissioner, represents the value of any services rendered by her in carrying on that business. 102b. This Division shall continue in operation so long as the National Security Act 1939-1940 continues in operation and no longer.”.

On this very controversial question the Government has carefully weighed the merits of the proposal against its demerits, and has recognized that, if effect were given to the proposal in the bill, some injustices and inconsistencies would result.In furtherance of the Government’s desire to avoid injustice, the right honorable member for Yarra (Mr. Scullin) and I conferred withthe Leader of the Opposition (Mr. Fadden) and the right honorable member forKooyong (Mr. Menzies), and it has been agreed that proposed new section 102a should be replaced by the proposed new sections which have been circulated amongst honorable members. It is realized on all sides that some check must be placed upon the avoidance of income tax that occurs when income-producing assets arc transferred by a taxpayer to his wife. This principle is expressed in the provisions now circulated and they will have the effect of causing the same amount of tax to be payable on the income from anyproperty transferred after the 29th

October of this year as would have been payable if the husband had retained the property. For example, if a taxpayer transfers to his wife property from which a net income of £500 is derived and the taxpayer himself derives an income of £2,000, tax will be payable by the husband on £2,000 and by the wife on the £500, at the rate appropriate to a taxable income of £2,500. If the wife derives income from sources other than the property transferred to her by her husband, she will be assessed on that income at the rate of tax applicable to that income. To extend the example which I have already cited, if the wife receives, say, £400 from sources outside the property transferred to her by her husband, she will be taxed on that £400 at the rate applicable to £400. This, of course, will be in addition to the tax on the £500 from the transferred property.

It is not proposed that this new law should haveany application to transactions which occurred prior to the 30th October last.. There is little doubt that the higher rates of tax which are likely to prevail for some years will provide the incentive to a taxpayer to divide his income-producing assets between his wife and himself. The new provisions will prevent the loss of revenue which would result from future transfers of this nature. The Governmentdoes not desire to interfere in those cases where a taxpayer quite legitimately and with no purpose of avoiding income tax desires to provide his wife with an independent income in order to give her some security for her future. To meet these cases it is proposed that the provision shall not apply where the taxable income of the wife does not exceed £200, irrespective of the source of the income.

No doubt, cases will arise in which the transferred property will consist of a business in the conduct of which the wife will take an active part. There is every justification, in cases of this character, in determining the net income of the business for the purpose of applying the provision, for making due allowance for the value of the services of the wife in carrying on the business. The value of these services will be determined by the Commissioner of Taxation, having regard to the facts and circumstances of each particular case. As wartime taxation has prompted this proposal, it is provided that the clause shall cease to he operative when the National Security Act is repealed. Some of the arguments advanced warranted the action proposed in the amendment. The force >f the argument advanced by the right honorable member for Kooyong (Mr. Menzies) about a wife’s personal exertion income could not be denied. Similarly, it was recognized that it would be a hardship to treat in the way originally intended the income of a wife who had helped her husband in developing a business or some other enterprise. Those arguments were pertinent and they demanded action, but other arguments scarcely influenced me. For instance, ohe argument about morality passed me by. It was suggested that the original proposals would discourage marriage. I scorn to take that argument seriously, because I know that no woman who wants a marriage certificate will let such little things as this stand in the way. I do concede that some men might try to use the proposal as a means whereby to avoid carrying out. promises made in the moonlight. I took no more notice of that argument than I did of the argument that the proposal made the wife a chattel. T say quite frankly that many of- the people who talk in that strain Iia ve evaded taxation by transferring property to their wives and have made slaves of domestic servants.

Mr Harrison:

– The Treasurer will admit that the clause strikes .at the roots of the Married Women’s Property Act-

Mr CHIFLEY:

– I almost scorn to answer that interjection. Cases have been brought to my notice of husbands who have transferred property to their wives and made with their wives agreements of which the Commissioner of Taxation knows nothing, whereby the whole of the income from that property goes to the husbands’ accounts and whereby, if the wives die, the property is bequeathed back to the husbands. I agree that in seeking to catch people who evade taxation, injustices and anomalies are likely to occur, but we are engaged in war and many more things are at stake than sentiment and plati tudes. One of the important things that has to he done is to tax people who have the ability to pay taxes. A dark picture has been painted of my part in this matter, hut agreement has been reached, largely as the result of the fair approach of the Leader of the Opposition and the right honorable member for Kooyong. They agreed that there must be no further evasion. They were not prepared - and I. appreciate their attitude - to dig into the past in. order to find out how wives had acquired certain property. In any case, administrative difficulties would arise in doing that. I heartily concur with the proposal emanating from the committee which is expressed in the amendment.

Mr SPENDER:
Warringah

.- I direct the attention of the Treasurer (Mr. Chifley) to the drafting of the amendment. There is doubt whether the obvious intention of the committee is expressed. The words in question are -

Where after the twenty-ninth day of October, mie thousand nine hundred and forty-one, the wife of a taxpayer has acquired or acquires any property, whether directly or indirectly, as a. result of any gift, by the taxpayer or any transfer by him without hi= receiving fully adequate consideration

The amendment then goes on to state what the Commissioner shall do. ‘ It. is quite conceivable that a man may have transferred, say, 1,000 shares to his wife at some time prior to the 29th October. 1941. and that after that date there has been a distribution of profit by way of shares which has been received by the wife.

Mr Chifley:

– The produce of gifts is not .limed at by this proposal. I shall icc-cpr the honorable gentleman’s suggestion.

Mr SPENDER:

– I should say that the words “ any gift or transfer made by the taxpayer after that date “ should be included. I, therefore, move -

That the proposed amendment be amended by inserting, in proposed new sub-section fi.) after the word “ taxpayer “, second occurring, the words “made, after that date”: and by inserting after the words “bv him “ the words “after that date”.

Amendment of amendment agreed to: and amendment, as amended, agreed to.

Clause, as amended, agreed to.

Clatuse 18 -

Section one hundred and three of the principal act is amended by inserting in paragraph (c) of sub-section (2),after the word “year” (second occurring), the words “or, if the company is a non-resident, before the expiration of nine months after the close of that year “.

Amendment (by Mr. Lazzarini) proposed -

That all the words after the words “ principal act “ be omitted with a view to insert in ‘lieu thereof the words - “is amended -

By inserting in paragraph . (e) of subjection ( 2 ), after the word ‘year’ (second occurring), the words ‘or, if the company is anon-resident, before the expiration of wine monthsafter the close of that year’; and

by adding at the end thereof the following sub-sections : - (3.)For the purpose of ascertaining the distributable income of a private company, the private company may elect that, in lieu of deducting from its taxable income any income tax paid under this act (other than the tax paid under this division) in the year of income, there shall : be deducted any income tax payable under this act (other than the tax payable under this division) in respect of the income of that year of income. (4.) Where any private company has made an election under the last preceding sub-section, that election shall, unless the Commissioner otherwise directs, be deemed to havebeen made also for the purpose of ascertaining the distributable income of that company for all subsequent years.’”.

Mr SPOONER:
Robertson

.- This clause and the two succeeding clauses relate to the taxation of private companies. The amendment moved by the Minister assisting the Treasurer (Mr. Lazzarini) provides for the reduction of the tax paid and payable in respect of any year. By that the Government means the flat rate of tax, not the tax on the undistributed profits. This is mot. a convenient time to discuss at length the taxability of private companies. The Treasurer (Mr. Chifley) made a statement to the effect that a committee of members early next year would con- sider the incidence pf taxation on private companies, other matters dealt with in this bill, and, possibly, taxation laws generally. The Treasurer has acted wisely and I am obliged to him for the opportunity that will thus be afforded to make a complete examination of the whole subject. It would not be fair to ask the Government at short notice to accept amendments in regard to the taxation of private companies, be cause amendments which appear to be very simple and innocent may have farreaching effects, as regards both repercussions and revenue. Considerable examination and access to the schedules, which will indicate how revenue will be affected, either favourably or adversely, are needed. I do not propose to move amendments to this clause or succeeding clauses. The amendment moved by the Minister assisting the Treasurer willclear up one little difficulty.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 19 to 21 agreed to.

Clause 22 -

Section one hundred and sixty of the principal act is repealed.

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

– I move -

That after the word “repealed” the following words be added: - “ and the following sections inserted in its stead : - 160. - (1.) Where in respect of the income of anyyear of income the sum of the tax assessed under this Act and under the Wartime (Company) Tax Assessment Act 1940- 1941 and the income tax imposed under any law of a. State or of a Territory being part of the Commonwealth exceeds ninety per centum of an amount ascertained by adding to the taxable income of the taxpayer the amount of any deductions allowed under the provisions of paragraph (c) of sub-section (1.) of section seventy-two of this Act, a rebate shall be allowed of so much of that excess as bears to that excess the same proportion as the sum of the tax assessed under this Act and under the War-time (Company) Tax Assessment Act 1940-1941 bears to the sum of those taxes and the income tax imposed under any law of any such State or Territory. (2.) For the purposes of the last preceding sub-section, any reference to tax assessed under this Act, or under the War-time (Company) Tax Assessment Act 1940-1941, or to any income tax imposed under any law of a State or Territory, shall not include amy additional tax for which the taxpayer becomes liable by reason of any evasion or non-compliance with any provisions of this Act, the War-time (Company) Tax Assessment Act 1940-1941 or the law of the State or Territory, as the case may be. 160a. - (1.) Where a taxipayer has, in the year of income, paid calls on shares owned by him in a mining company or syndicate carrying on mining operations in Australia for gold, silver, base metals, rare minerals or oil, or in any company carrying on afforestation in Australia as its principal business,he shall be entitled to a rebate in his assessment of the amount obtained by applying to the amount of the calls (not exceeding’ the amount of the taxable income of the year of income) a rate equivalent to - (.a) where the taxpayer is not a company and the taxable income is derived wholly from personal exertion - onethird of the rate of tax payable for the year of tax on a taxable income from personal exertion equal to the taxable income of the taxpayer ; (ifr) where the taxpayer is not a company and the taxable income is not derived wholly from personal exertion - one-third of the rate of tax payable for the year of tax on a taxable income from property equal to the taxable income of the taxpayer; or

where the taxpayer is a company - one-third of the rate of tax payable by companies for the year of tax. (2.)’ For the purposes of paragraph (c) of the last preceding sub-section tax payable by a taxpayer which is a company shall not include -

any tax imposed by any Act as a super tax on part of the taxable income of a company; or

any tax assessed under the provisions of Part IIIA, of this Act.’”.

On Wednesday last I circulated to honorable members a copy of an amendment to clause 22 of the Income Tax Assessment Bill, which I proposed to move in order to give effect, to the Government’s decision to provide for an abatement of income tax in any case where the effective combined rates of Commonwealth and State taxes exceed 18s. in the fi. It has been found, however, that the amendment as drafted does not correctly express the Government’s decision, and it has been replaced by the amendment now circulated to honorable- members. The Government’s proposal is that in those cases where the combined weight of Commonwealth and State taxes on the taxpayer’s income of the year exceeded 18s. in the £1 relief should be given to the taxpayer concerned according to the proportionate weight of tax imposed respectively by the Commonwealth and the State. For example, if the combined weight of the tax on each £1 of income is 21s., composed of 14s. Commonwealth tax and 7s. State tax, the relief to be given by the Commonwealth will be 2s. in the £1. As State income taxes paid during the year of income are allowed as a deduction in arriving at the Commonwealth taxable income, it is necessary that these taxes should be added back to the taxable income in order to determine whether the total weight of Commonwealth and State taxes is more than 18s. in the £1. The only difference between the amendment now circulated and the amendment previously circulated is the provision which is being made for the adding back to taxable income of the taxes paid that have been allowed as deductions in arriving at the taxable income. The rebate will be allowed where the combined Commonwealth and State taxes payable on income of the year of income exceed 90 per cent, of the taxable income before deduction of State income taxes paid- during the year is allowed. The proposed rebate will be applicable to companies as well as to individuals. It rests with the States to contribute their proportion of the tax abatement so that the Commonwealth and State taxes on income shall not exceed 18a. in the £1.

When dealing with clause 12- b of the bill, I explained to the committee that the omission of paragraph d’ of subsection 1 of section 78 of the principal act, and the insertion of new section 160a, implemented the recommendation of the committee of members on the subject of calls in mining companies. The type of calls specified in section 78(1) d of the principal act are repeated in the proposed section 160a. The new section provides for a rebate of tax of the amount obtained by applying to the amount of the calls one-third of the rate of tax payable- on an amount of taxable income equal to the taxable income of the taxpayer. Where the taxable income is derived from personal exertion only, the rebate is calculated at personal exertion rates. Where the income consists of property income, or partly of personal exertion and partly of property income, the rebate is calculated at property rates. In the case of a company, the rebate is one-third of the flat rate of normal tax payable by companies. Thus, under the proposed 1941-42 rates, the rate of company rebate would be onethird of 3s., which equals ls. in the £1 on the amount of calls paid to mining companies in the income year. Subsection 2 of new section 160a makes it clear that the rate of company tax referred to is the rate of normal tax, not

The rate applicable to other taxes which may be assessed to a company, such as sit per tax and tax assessed under Part I. 11a of the act. The proposed section provides that the amount of the calls on which rebate is to be granted is not to exceed the amount of taxable income. In section 78(1)d of the principal act, there was a limitation by which the deduction for calls could not exceed the amount of income remaining after deducting from the assessable income other allowable deductions. The new section will apply to assessments made for the financial year 1941-42 (based on income derived during the income year ended the 30th June, 1941) and succeeding years, and this will bc provided in clause 28 of the bill.

Mr FADDEN:
Leader of the Opposition · Darling Downs

.- What steps does the Treasurer (Mr. Chifley) intend to take to induce the States to meet this position? It seems that although the Commonwealth is prepared to grant a rebate, the taxpayer will be left at the mercy of the State Governments. What, arrangements have been made for rebates by the State Governments?

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– Apart from certain personal conversations which I have had with Ministers, I have received from the States nothing which I should be justified in describing as a commitment. However, the Government proposes that I shall communicate with the Premier and Treasurer of each State in order to ask them to co-operate with the Commonwealth in this matter.

Mr CALWELL:
Melbourne

.- How much revenue will the Government be giving away through this and other concessions that are provided for in the bill ? I should also like to know what will be the position of an individual who earns about £2,000 this year, but who will retire at the age of 65 years next year, when his income will diminish to about onequarter of its previous level. Under the provisions of this measure, the man whom I have in mind will be required to pay about £1,300 of tax in respect of the money which he earned this year. He will be obliged, if he is to discharge his liabilities, to sell a house in which he has invested his money. Is any provision made for a rebate to him in these special circumstances, or will he be obliged to submit: to the equivalent of a capital levy in order that he may satisfy his obligation to the State? If he will bt obliged to submit to a capital levy, in that he will have to sell some property in order to pay his Commonwealth and State taxes, will the Treasurer adopt, generally, the principle of a capital levy? In my view a. man who is placed in this position as the result of taxes having increased steeply in the last couple of years, should be allowed a long time in which to pay his tax or given the benefit of some adjustment over this year and next year. At any rate, he should not be placed at a grave disadvantage in comparison with what would be his position if he were to continue earning £2,000 a year. I ask the Treasurer to mitigate the severity of taxation upon persons whose incomes drop considerably because they reach the retiring age. and who are compelled to live on what they have managed to save while they have been in employment. The income of the man whose case I have cited if high, but he has not always earned thai amount, and, because he happens to retire during a war, he should not b<treated so severely.

Mr Fadden:

– There is a special hardship provision in the act.

Mr CALWELL:

– Yes, in that the taxpayer may appeal to departmental officials, who may grant some remission. A? the committee has made provision to help people who are interested in companies, it might also consider the position of individuals such as the man I have mentioned. I appeal to the good sense and spirit of decency inherent in the Treasurer, and ask him to endeavour to relieve the circumstances of such individuals to whom I have referred. If they are to be impoverished by means of this heavy tax, they will have no course open to them but to apply for the old-age pension, and that will mean added burdens for the Treasury. I ask the Treasurer to deal with eases of this sort on their merits, either by amending the bill, or by direct.ina his officials to deal reasonably with them.

Mr CHIFLEY:
Treasurer · Macquarie · ALP

– I assume that a man earning £2,000 a year, in the position which the honorable member has mentioned, would have been in receipt of that income over a number of years. Such people would be expected to make proper provision for the payment of income tax.

Mr Calwell:

– This man will have to pay £1,300 tax, and his income next year will be about £500.

Mr CHIFLEY:

– I agree that the increased rates of tax may result in his having to pay a much higher amount of tax than he expected.

Mr Calwell:

– The tax will result in a capital levy. Is the Treasurer going to adopt that as a principle?

Mr CHIFLEY:

– It is generally agreed in this House that people who earn over £1,500 a year should be obliged to contribute heavily to the revenue of the country, on the principle that those who have the ability to pay should bear the heaviest burden of tax. We could not estimate the ultimate effect of granting concessions to taxpayers in the circumstances mentioned. As the Leader of the Opposition has said, in exceptional circumstances a man has the right of appeal to the Hardship Board of the Taxation Department. A Treasurer who attempted to provide in the act for circumstances such as the honorable gentleman has mentioned would make a laughing stock of himself.

Mr Calwell:

– It means a capital levy.

Mr CHIFLEY:

– That might be said of all taxation on high incomes. The polite name for taking 16s.8d. of every £1 of a taxpayer’s income is “ taxation “, but some people have other names for the process. The Minister assisting the Treasurer (Mr. Lazzarini) has submitted an amendment to this clause in order to protect persons whose combined Commonwealth and State taxes would otherwise amount to 23s. 6d. for every £1 of income. The honorable member for Henty (Mr. Coles) referred to such cases inhis speech in the budget debate, and we have had some striking cases of hardship and injustice brought before us; for these reasons we have drafted the amend ment now before the committee, which provides for a rebate when Commonwealth and State taxes combined amount to 18s. in the £1. The Hardship Board has full powers to deal with such cases as the honorable member for Melbourne has mentioned.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 23 (Undistributed income of company).

Mr CALWELL:
Melbourne

– I again ask the Treasurer (Mr. Chifley) how much revenue the Government is forgoing as a result of the concessions it has made in connexion with this bill?

Mr CHIFLEY:
Treasurer · Macquarie · ALP

. - In some cases it is very difficult to arrive at an estimate. AsI have said, one concession involves a direci loss of revenue of £800,000, but the actual loss, after other factors are taken into consideration, will amount to only £600,000. I should say that the total loss involved in all the relaxations which have been agreed to by the Government may amount to £1,500,000, or perhaps something move. These concessions show how ready the Government has been to listen to representations regarding hardship.

Clause agreed to.

Clauses 24, 25 and 26 agreed to.

Clause 27-

Section two hundred and twenty-oneaif the principal act is amended by omitting paragraph (a) of the definition of “salary or wages” and inserting in its stead the following paragraph : - “ (a) under any contract which is wholly or substantially for the labour of the person to whom the payments are made;

Mr LAZZARINI:
Minister assisting the Treasurer · Werriwa · ALP

. -I move - that all the words after “principal act” be omitted, and the following words inserted in lieu thereof: - “ is amended -

  1. by omitting from paragraph (a) of the definition of ‘ employee ‘ the word ‘and’ (last occurring);
  2. by adding at the end of the definition of ‘ employee ‘ the following word and paragraph : - ; and (c) includes any member of the Defence Force; ‘; and
  3. by omitting paragraph (a) of the definition of ‘ salary or wages ‘ and inserting in its stead the following paragraph : -
  4. under any contract which is wholly or substantially for the labour of the person to whom the payments are made; ‘ “.

The purpose of this amendment is to bring members of the Citizen Forces under the provision for the payment of income tax by instalments.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 2S postponed.

New clauses 4a and 20a.

Motion (by Mr. Lazzarini) agreed to -

That the following newclauses be inserted: - “4a. Section twenty-six of the principal act is amended by inserting after paragraph (e) the following paragraph-: - : (ea) the value to any taxpayer who is a member of the Defence Force of all allowances given or granted in respect of his service as such a member, whether so given or granted in money, goods, meals, sustenance, the use of premises or quarters, or otherwise-; ‘ “. 20a. The heading to Division 17 of Part III. of the principal act is amended by omitting the words ‘ on Income Taxed Abroad and on Business Income’.”.

Postponed clause 28 consequentially amended and, as amended, agreed to.

Title agreed to.

Bill reported with amendments; report - by leave - adopted.

Bill - by leave - read a third time.

page 858

PAPERS

The following papers were presented : -

Australian Soldiers’Repatization Act - Repatriation ‘Commission - Report for year 1940-41.

Lands Acquisition Act - Land acquired -

For Administrative purposes - Darwin, Northern Territory.

For Defence purposes - Nhill, Victoria.

National Security Act -

National Security (General) Regulations -

By-la ws - Controlled area (2).

Orders -

Control of lights and traffic (2).

Navigation and Anchor Lights.

Navigation (Darkening Ship).

Navigation (Sailing and Routing Instructions).

Protected area.

Protection of Shipping (Defensive Armament) .

Taking possession of land. &c. (36).

Use of land (5).

National Security (Internment Camps) Regulations - Orders -

Classification of Overseas -Internees (No. 1).

Internment Camp (No. 4).

National Security . (Prisoners of War)

Regulations - Camp Order (No. ‘2).

Papua Act - Ordinances - 1 941 -

NNo. 8- Customs Tariff (No. 2),.

NNo. 9 - Port Moresby Water Supply.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance - 1.941 - No. 17 - Nurses Registration.

House adjourned at 10.21 p.m.

page 858

ANSWERS TO QUESTIONS

The following answers to questions were circulated : -

Note Issue.

Mr.Chifley. - On Thursday, the 20th

November, 1941, the honorable member for Wide Bay (Mr. Bernard Corser) asked the Treasurer the following questions, upon notice -

Is it a fact that the issue and control of notes is in the hands of the Note Issue Branch . of the Commonwealth Bank and not the private banks?

Is it the usual procedure for the Commonwealth Bank to release an increase of notes for the convenience -and requirements of the public ‘during the Christmas shopping and holiday periods?

The answers to the honorable member’s questions are as follows : -

Yes.

Yes.

DentalCorps.

Air Limes Subsidies.

Cite as: Australia, House of Representatives, Debates, 25 November 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19411125_reps_16_169/>.

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