16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 3 p.m., and read prayers.
Civil Offences - Trial
– Is the Prime Minister in a position to make a statement with respect to the procedure to be followed in relation to an American soldier who is held in custody in connexion with the death of certain women!
– The House will recall that, some time before the outbreak of war, this Parliament passed the Defence (Visiting Forces) Act 1939. That act, broadly, prescribes the procedure to be followed in respect of forces of the British Empire in Australia. Australia is working under a reciprocal arrangement with the rest of the dominions and the United Kingdom in the general terms of that statute. Such legislation as would give to the American forces complete jurisdiction in respect of their own men in Australia does not exist, if the law of the Commonwealth or a State were to be applied by either the Commonwealth or a State. For some time, discussions have been proceeding between the Commonwealth Government and the Government of the United Kingdom, having regard to the fact that allied forces are now to be found in various parts of the British Commonwealth; American forces are in Australia with the consent of the Commonwealth Government, and in Northern Ireland and Britain itself with the consent of the British Government, and there are Australian forces in Canada. The Commonwealth Government and the Government of the United Kingdom are of the opinion that, broadly, the provisions of the Defence (Visiting Forces) Act should be applied to the forces of countries that are our allies, while operating in any part of Australia. This Government therefore decided to gazette amending National Security (Allied Forces) regulations, and the procedure in future will be along the following lines: -
– “ That law “ means “ American law “ ?
– It means American law.
– How are witnesses to be compelled to give answers to questions ?
– In the following manner -
of the United States of America, the convening officer, the president and the trial judge-advocate of that court shall have the same powers of summoning witnesses not subject to military law and requiring them to produce documents and give evidence as the like officers of a naval or military court of the Commonwealth would have in the case of a trial of a member of the Defence Force.
A person who has been lawfully summoned to attend a naval or military court of the United States of America in pursuance of this regulation to give evidence or produce documents and has been paid or tendered reasonable expenses of his attendance, or who is before the court, shall not, without just cause (proof whereof shall lie upon him) -
In this regulation - “member of the United States Forces in Australia “ means a member of the naval or military forces of the United States of America (including the air arms of those forces) for the time being present in Australia or on hoard any of His Majesty’s Australian shins or aircraft; and “ the appropriate officer of the United States Forces “ means -
– The Government of the United Kingdom is discussing with the Government of the United States of America the matter of reciprocity.
– Do the regulations which the right honorable gentleman has just read, and the statement he has made, represent the law of this country? Have the regulations been gazetted?
– Then I desire to ask the right honorable gentleman whether representations have been made to him by a representative of the allied forces of America, regarding the trial of the accused person before a tribunal other than that provided for in such matters by the law of this country? If so, has the right honorable gentleman acquiesced in such a trial, to the exclusion of our own procedure requiring a trial that is applicable to such a case? Does he not think that so radical a departure from the law of this country might well have been submitted to this Parliament for its consideration ?
– The answer to the first part of the honorable gentleman’s question is “ Yes “. Some considerable time ago a formal submission was made by the American forces in Australia for the adoption of this proceduce. The reply to the second part of the honorable gentleman’s question is, that a formal answer was not given to those submissions because of the discussions that were proceeding between the Governments of the United Kingdom and the United States of America in order that a uniform practice might he adopted throughout the British Empire in relation to such American forces as were serving in any part of the British Empire. The answer to the final part of the honorable gentleman’s question is that, having regard to the Commonwealth’s insistence in past years that members of the Australian Imperial Force serving in other countries should be judged by the law of this land and under the authority of the commanding officer of the Australian military force-
– British law.
– And having regard to the passage by this Parliament of the Defence (Visiting Forces) Act, the Government considers that the gazettal of these regulations is entirely consistent with the development of policy governing the matter.
– I ask the Prime Minister whether the present position is that during the war visiting troops from allied countries are to he placed on the same footing as to trial of charges of offences as the visiting troops of members of the British Commonwealth of Nations?
– Broadly speaking, yes, but, in the particular matter that has been under consideration, if the United States army officer requests that a person be handed over, the regulations are for the purpose of enabling that request to be met and also to ensure that the court, which the American forces will establish, shall be able to ensure the attendance of requisite witnesses. In the statement made to me by the commander of the United States Army, it was indicated that in every instanCe the proceedings would be such as to satisfy the conscience of the Australian public and the penalties would be, on any reading, regarded as adequate.
– Is it a fact that while Ministers and members of Parliament are permitted to broadcast from B class stations under their own names, excerpts from such broadcasts are put over the national stations without acknowledgment ? Have instructions been issued to the Australian Broadcasting Commission to this effect ? If so, does the Prime Minister consider that such repressive measures are in the best interests, of democracy in time of war, particularly as listeners have no way of identifying those responsible for the broadcasting of political statements ? Does he not think that such a practice will encourage irresponsibility on the part of Ministers and members of Parliament in the making of political statements?
– Broadcasts delivered by Ministers or members of Parliament, including members of the Advisory War Council, are, I understand, prefaced by an announcement that the speaker is Mr. So and So; and when the address is concluded, the listeners are informed that they have been hearing Mr. So and So. The honorable member refers to news items broadcast by the Australian Broadcasting Commission, which include excerpts from statements or criticisms. The Parliamentary Committee on Broadcasting made a recommendation in connexion with such broadcasts, and the Australian Broadcasting Commission, on its own initiative, has given effect to the recommendation. The Parliamentary Committee on Broadcasting stated that names were too frequently mentioned in such broadcasts, and that too much personal publicity was being given in consequence. I have no doubt that the commission, having in mind the comments of the committee, and the view advanced by the honorable member, will adopt a commonsense attitude. The Government is not exercising any authority whatsoever in regard to the matter, but a complaint was received, and I made certain inquiries, as a result of which I have been able to say what I have said.
government responsibility - opinion by Counsel - Reimbursement of Tasmania and Western Australia - Proposal for Referendum.
– Seeing that the Government allegedly regards the uniform taxation proposals as of such importance, has it seen fit to refer them to the Advisory “War Council for consideration?1 If so, what decision was reached ; and, if not, why was the matter not submitted to the council?
– Matters dealt with by the Advisory War Council are not, as the honorable member knows, disclosed in this House.
– I do not know what is done there; I have a strong suspicion that nothing is done.
– I do not propose to state what takes place at meetings of the council. The Government accepts full responsibility for its legislative proposals in respect of uniform taxation, and hopes, with the support of the honorable member and his colleagues, to place them on the statute-book.
– Why invite the support of the Opposition if the Government is to take full responsibility for the proposals?
– We invited a very distinguished member of the Opposition to assist us in the preparation of this legislation.
– Will the Prime Minister inform the House who were the learned counsel from whom the Commonwealth Government obtained opinions on uniform taxation? Will the right honorable gentleman table those opinions for the information of honorable members?
– It is not the practice to give the information that the honorable gentleman seeks. Other counsel may be quoted in another place and the matter may subsequently come to litigation. We do not propose to give to any body else the advantage of our very well authenticated knowledge.
– Can the Prime Minister supply me with the names of King’s Counsel who have been retained ‘by the Commonwealth Government with a view to possible litigation arising out of measures before this House? Alternatively, with a view to conserving man-power, will he supply me with the names of those who have not been retained?
– An affirmative answer in either case would give information ‘which it is not the practice to give, and I have to say “No” to the honorable gentleman.
– by leave - In the schedule to the States’ Grants (Income Tax Reimbursement) Bill, the compensation which it is proposed should be paid to Tasmania is set down at £811,000, which represents the sum of £823,000 recommended by the Committee on Uniform Income Tax, less a saving of £12,000 in cost of collection. The Government of Tasmania has submitted that the amount of compensation payable to it should be increased. This case was considered by the Commonwealth Grants Commission.
I lay upon the table the following paper : -
Financial Assistance to Tasmania - Report of the Commonwealth Grants Commission upon the application submitted by the Government of Tasmania for increased financial assistance under the uniform taxation proposals.
In this report, it is recommended that the compensation payable should be increased from £823,000 to £900,000. This means that, after deducting the saving of £12,000 in cost of collection, the amount of compensation payable for Tasmania will be increased from £811,000 to £888,000.
With regard to the compensation to be provided for Western Australia, the Government of that State has represented that the deduction of £53,000 for saving in cost is excessive. Upon reexamination, it is found that it would be equitable to assess the saving which Western Australia could achieve at £30,000. In the circumstances, it is proposed to increase the amount of grant for Western Australia from £2,523,000 to £2,546,000.
– In view of the discontent which prevails throughout Australia with regard to the proposed system of uniform income taxation, and in view of the need for greater co-ordination of the war effort, will the Prime Minister arrange for a referendum in order to ascertain whether the people will consent to cut away those fungus-like growths, the State Parliaments, so that the Commonwealth will be in a better position to govern the country at this time of its greatest crisis ?
– I know of no popular discontent arising from the Government’s proposals for uniformity of taxation. On the contrary, I believe that there is overwhelming popular approval for what is undoubtedly a sound policy. The Government does not contemplate any amendment of the Constitution, and, therefore, I see no occasion for conducting a referendum.
– Is the Minister for Transport aware that there is serious congestion on passenger trains, .particularly those on the main trunk lines? Has his attention been drawn to the use of sleepers on the trains? What has been done to provide reasonable accommodation for those who are compelled by their public duties to travel? Will he review the privilege enjoyed by some members of Parliament to have a compartment to themselves to the disadvantage of other travellers, so that incidents such as occurred last night may not be repeated?
– I am aware that there is some congestion. As to the second part of the honorable member’s question, the matter is at present receiving consideration, and I hope to be able to make a statement on the subject a little later.
– The Minister for Supply and Development will remember that last week he was able to make satisfactory arrangements for the supply of flannels and pit hoots to the miners at Collie. Has any hitch in the arrangements been brought about by the action of the Perth Chamber of Commerce, and. if so, can the Minister do anything to remedy the trouble?
– -When the matter was raised last week, I took immediate action to make available to the miners supplies of flannels which were destined for the Far East. It appears to be true that a hitch has occurred, and within .the last hour the honorable member for Hunter (Mr. James) showed me a telegram dealing with the subject. I immediately telegraphed to Perth an intimation that the previous instruction shall be immediately given effect.
– Will the Minister for the Army indicate whether he will permit the establishment of units, as auxiliaries of the Volunteer Defence Corps, in war industries that may be enemy objectives? The formation of such units will enable the workers to prepare against attack, with a result that their morale will be improved. I also ask the Minister whether he has noticed a report of an opinion expressed by Sir Harry Chauvel that at least one-third of the troops defending Australia should be cavalry? If so, will he indicate whether the Army will encourage the formation of Light Horse units?
– The Government is guided by its military advisers in deciding whether mechanized units are preferable to cavalry units, and it will continue to act upon their advice. However, the suggestions made by Sir Harry Chauvel will receive attention. Regarding the establishment of branches of the
Volunteer Defence Corps in industrial undertakings, I said, in the course of a statement, that certain war establishments had been approved for the recruitment of members of the Volunteer Defence Corps, and that decision meant that the numerical strength of the corps throughout Australia would be more than doubled. I also stated that in the formation of branches of the Volunteer Defence Corps in factories, preference would be given to those concerns that could he regarded as military objectives. In the enrolment of members of the Volunteer Defence Corps, preference is rightly given to those strategical areas which are considered to be most vulnerable. All the suggestions made by the honorable member will be taken into consideration.
– I ask the Prime Minister whether he has concluded his series of conferences with the representatives of the coal-mining industry? Was it not agreed that, while those conferences were being held, continuity of production would be maintained on the coal-fields? Has the right honorable gentleman been advised that the chairman of the Centra! Reference Board indicated that he would not deal with two disputes that were before him until the men returned to work, and that intervention by a State Minister was then obtained? In view of this apparent overriding of the authority of a Commonwealth tribunal, does the Prime Minister propose to take action? Has he any details of the number of mines, if any, that are idle to-day? If so, what are the causes of the stoppages ?
– My discussions with representatives of the coal-mining industry have not yet concluded. Last week I devoted several hours to meeting separately two groups of owners, and the executive of the Australian Coal and Shale Employees Federation. As the result of those discussions, I then decided, by agreement, to convene a joint conference next Friday in Canberra. Meanwhile, I did say that I hoped that all parties concerned would display a readiness to acknowledge the problem of the country, and to put the war before all other considerations. I also said that
I had assurances that each side would pull its weight in the interval between the time when the conference was called and its meeting in Canberra next Friday. I regret to say that half a dozen mines are idle to-day, some of them for causes which, I think, do not justify stoppages. In one or two cases it could be reasonably claimed that difficulty would be experienced in carrying on operations. On Friday, I propose to discuss the matter with the representatives of the employers and the employees, and I am very hopeful that we shall arrive at common ground. The production of coal is vitally important to the nation, and, having regard to the facilities that now exist for the settlement of disputes, I cannot conceive of any reason. why a man should knock off rather than continue the production of coal and have his grievances adjusted by some tribunal.
– Wall the Acting Attorney-General inform me how many members of the Australia First Movement are suspected of being implicated in the treasonable activities, of which the Minister for the Army spoke some time ago? How many members are not suspected of being involved in those accusations ? When will the suspects be brought to trial? What action does the Government intend to take regarding members of the Australia First Movement who have been interned but who are not suspected of being implicated in the treasonable plans mentioned by the Minister for the Army?
– Action has already been taken in Western Australia against those members of the Australia First Movement against whom sufficient evidence had been adduced to warrant the laying of a charge. The cases, I understand, were to come before the Supreme Court of that State to-day.
– I referred to New South Wales.
– The position of other persons who may be involved with the Australia First Movement is a matter that comes within the province, not of myself, but of Army Intelligence, [n those circumstances, I am not able to express an opinion upon the matter.
– On the 18th May, the honorable member for Fawkner (Mr. Holt) asked, without notice, a question relating to the use by commercial houses of panel envelopes for the transmission of matter by post. The question has been brought to the notice of the Postmaster-General who has asked me to convey to the House the following answer : -
The conditions governing the transmission through the post of communications in envelopes with transparent panels have been in force for many years and are clearly set out in the Postal Guide. Of late, however, there has been increasing evidence of failure on the part of commercial houses to observed the conditions stipulated, particularly the transparency of the panel and the exclusion of all matter to ensure that only the name and address of the addressee are shown through the panel. Failure to comply with the requirements seriously militates against the efficient sorting of postal articles, and is definitely a cause of the staff suffering from eye-strain. As endeavours made over a considerable period to improve the position have been unavailing, the department has no alternative but to insist that the conditions shall, in future, be fully observed. Leniency has already been extended on innumerable occasions in order to enable stocks of envelopes and forms to be used up, and it is regretted that any further latitude cannot be agreed to.
– Will the Minister for Supply and Development confer with the Liquid Fuel Control Board with a view to allowing all chaff-cutters ample petrol to carry on their business? Producer-gas units are most unsatisfactory when the ground is soft after rain, of which we have just had 4 inches. Moreover, producer-gas units are very dangerous when used in straw. Chaff in winter time is stacked on straw which is also used as a thatch to protect the hay-stacks against wetness. ^ Mr. BEASLEY. - I am most appreciative of the difficulties that petrol rationing must necessarily cause, but I think it necessary to direct attention to the fact that it is the duty of the Government to ensure that, all operators of essentia] transport services shall be prepared, in the event of supplies of petrol being seriously curtailed, to use an alternative fuel for carrying on their business undertakings. We are thus taking all possible steps to urge people to install substitute power plants on their vehicles.
Mr. Marwick There is no danger of fire with approved producer-gas .units:
– Probably, that can be said. The liquid fuel committees in each of the States will administer the instruction with a minimum of inconvenience to those to whom it will be applied. It will endeavour to tide people over difficult periods. If th*i honorable member has cases which he thinks need special attention, I shall be pleased to bring them to the notice of the appropriate authorities.
– Is the Minister representing the Postmaster-General aware of the irregular delivery of mails to and from Western Australia? Will he endeavour to expedite their delivery?
– I shall communicate with -the PostmasterGeneral and furnish a reply to the honorable member as early as possible.
– Can the Minister for Supply and Development inform the House of the total yardage of woollen piece goods ordered by his department for the fighting forces? Will he tell the House what yardage per man was used as a base for estimating the total quantity required? If, after investigation, the honorable gentleman finds that the orders placed were too high, will he, in view of the extreme shortage of flannel for civilians, especially war-workers, release some of the reserve stocks of these goods for immediate use and make available the output of a number of mills to repair the deficiency for civil requirements?
– I am sure that the honorable member will appreciate the difficulty of answering the question in detail. However. I see great merit in maintaining a balance between military and civilian needs and in making, from time to time, such changes as will preserve a proper balance, and I have that aspect constantly in mind. I shall obtain the figures for which the honorable gentleman has asked.
– Is the Minister for War Organization of Industry aware that certain retail clothing firms are refusing to sell the quotas allotted to them under the restrictions imposed by the Government? If so, will he make a statement to the effect that such firms must sell their specified quotas?
– I have seen a statement in the press to the effect that some firms have not been selling to the limit of the quotas allotted to them under the restriction of gales regulations. I have given instruction^ for a statement to be made to the press to-night to the effect that retailers are not permitted to undersell their quotas, and I hope that this will have the effect desired by the honorable member.
Preference to Brisbane Carpenters
– I have received a complaint from the Gympie branch of the Amalgamated Society of Carpenters and Joiners of Australia to the effect that the Commonwealth Department of Works brought a number of carpenters from Brisbane to Gympie in order to carry out certain air raids precautions work at the Gympie post office, although local unemployed carpenters were available for the work. An officer of the department, who visits Gympie periodically, was personally informed that a number of unemployed members of the society living in Gympie were anxious to do the work. The train fares of the labourers who were sent from. Brisbane cost the department £1 16s. each. The wages of local workers would have amounted to £6 2s., whereas £12 6s. 4d. was paid to the imported workers, the difference being made up in overtime at double rates. the cost of board and lodging, &c. Will the Minister for Labour and National Service consider the society’s demand that a searching inquiry be made into the “whole sordid business . . . the grave injustice done to local men, and the scandalous waste of the country’s money “ ?
– If the honorable member will bring all the details of the case to my notice there will be an immediate inquiry, and I shall supply him with whatever advice I can give.
Transfers: Militia Personnel to Australian Imperial Force and to Royal Australian Air Foroe - Instructional School Manoeuvres : Accident with Gelignite - Tea for Soldiers - Engineers in Armed Foroes - Second-hand Uniforms. Mr. CONELAN.- Will the Minister for the Army inform me whether, as the result of his recent conference with the Minister for Air, it has now been decided to release from the Australian Military Forces men who have volunteered for the Royal Australian Air Force, whose services would be more beneficial to the war effort in the Air Force than they are ia the Army. Many of the men who have applied for transfer are “ foot-sloggers “ and they desire to do more useful service in the Royal Australian Air Force.
– A committee representative of both services is considering this subject from day to day. No obstacle 13 placed in the way of men in the Australian Military Forces who have been selected for air-crew transferring to the Royal Australian Air Force, but, except in special cases, the military authorities will not grant permission to men who have been trained for five or six months in the Australian Military Forces to transfer to the Royal Australian Air Force as ground staff. I make it clear that permission for such transfers are granted when the applicant desires to take up air-crew work.
– Is the Minister for the Army aware that during certain monoeuvres of an army instructional school near Sydney recently, some soldiers were placed in boats and a charge of gelignite was exploded, which, not only blew up the boats, but also caused the death of a young man of 22 years and serious injuries to other men, one of whom had a family of five or six children? Will the honorable gentleman inform me whether these manoeuvres were really designed to give the men some experience of active service conditions, or whether the purpose of them was to boost certain officers? I ask that question because press photographers were present with the object of taking photographs for distribution throughout Australia. Will the Minister table a report in connexion with these particular manoeuvres? I understand that it is a ( common practice to put gelignite close to 5 where troops are operating. Gelignite has been put in trees and in other places. Will the Minister consider whether it is desirable to continue this dangerous practice ?
– Training of a realistic character is being done by the Australian Military Forces. I have not had a report of an incident of the kind referred to by the honorable member, although I have been told that an accident has occurred in one instance. I shall call for a report on the subject and give the honorable member further information when the report is received.
– Can the Minister for the Army now answer the question I asked him last week whether he would ascertain what arrangements had been made to ensure that soldiers on leave would be provided with tea rations?
– I have had many complaints about beer rationing, but few about tea. I assure the honorable gentleman that I shall place tea on a higher priority than beer. I shall answer his question to-morrow.
– Can the Minister for the Army say whether it is a fact that second-hand uniforms are being issued to Militia troops in Tasmania? If this is not the usual practice throughout Australia, why is it being done in Tasmania, and where are the uniforms coming from?
– I was not aware that second-hand uniforms were being issued to Militia troops in Tasmania, but I shall call for a report on the matter, and give the honorable member a reply as soon as possible. I assure him that Tasmania is not being singled out for Cinderella treatment in the matter of uniforms.
– The Minister for the Army recently announced that members of the Militia would have the right of transfer to the Australian Imperial Force. Have the Army authorities taken steps to implement that decision? No instruction appears to have been received in that regard by those concerned. This is causing considerable confusion amongst troops and officers. Some ambitious officers are parading the men and asking them to declare themselves on this issue. In view of the fact that this is causing resentment and is defeating the Government’s declared policy, will the Minister lay down a definite basis upon which the men can be transferred ?
– Immediately the decision was reached, instructions were issued to Army head-quarters to send out instructions to all commanding officers in Australia to provide the necessary facilities for men to indicate their desire to transfer to the Australian Imperial Force. I have had reports that in places difficulty is being experienced, but I am taking suitable action which will have the desired results.
– Has the Minister for the Army seen press reports of statements made by .the chairman of the Commonwealth Council of the Amalgamated Engineers Union and the New South Wales secretary of the union to the effect that thousands of skilled engineers in the armed forces are not being employed as engineers and that, as the result of this wastage of skilled labour, bottle-necks are occurring in munitions production? Are these statements true, and if so, when can we expect some definite action to release these men for munitions work?
– I have not seen the reports, but I shall read them at the first opportunity. I am not aware that the statements are facts. Negotiations are proceeding continually between the manpower officers and the Adjutant-General in order to ensure that trained men are being employed properly in all of our armed forces. At this time of acute shortage of skilled man-power it is absolutely necessary that the services of tradesmen be used to the best advantage. The Government does not desire such men to be retained in the armed forces unless they are engaged in skilled work. However, I point out that because of the mechanization of the Army, and the complexity of modern warfare, an increasing number of skilled tradesmen is required in the various armed forces. The honorable gentleman’s question will be carefully considered and a further answer will be given to him by letter. -
– In view of the assurance given by the Minister for Labour and National Service that the required number of suitable men will be released from military service for work in the pastoral and sugar industries, can he indicate the intention of the Government in regard to the fruit, wheat and dairying industries?
– The sub-committee of Cabinet appointed to inquire into manpower matters decided that, in order to afford relief to primary industries, temporary exemption from military service shall be given to men engaged in the more important of those industries, including the three referred to by the honorable member. The release of an additional number of experienced men from the Army is a matter for the Minister for the Army. I have no control over that, but I am sure that my colleague will consider the matter carefully, and that whatever relief is possible will be granted.
– I desire to inform the Minister for Labour and National Service that, notwithstanding the statement that has been made on behalf of the Government that no more men would he called up from rural industries for military service, four men in my own district were called up last Saturday. Since my arrival in Canberra I have heard that another man has been called up. One of these men is the father of three young children and he had no one to leave behind to work his farm. Moreover, some men who have been called up have had to travel 30 or 40 miles into their nearest town in connexion with their call-up notices. I ask the Minister to ascertain whether these men have been called up in error. If he finds that this is the case, will he take steps to avoid such errors in the future?
– The decision of the Cabinet sub-committee respecting manpower in rural industries was conveyed to the officers of the Department of Labour and National Service. The issue of call-up notices rests with the Army authorities. If difficulties have arisen, or if mistakes have been made, in that matter, the incidents should be reported to the Minister for the Army.
Secret Meeting of Senators and Members
– As we are now in the fifth week of this period of the session and have not yet had an opportunity to discuss the important subject of the effective defence of this country against the threatened Japanese attack, and as it is possible that Parliament may not be summoned for several months after the close of this periodical sitting, I ask the Prime Minister whether, before these sittings end, he will arrange a private meeting of senators and members in order that they may be fully advised of the position confronting Australia and of the actions of the Government in relation thereto, and also of the position of the war on the European front?
– The Government is most anxious to give to honorable gentlemen the fullest information, and I shall be glad to consider the suggestion of the honorable member for Melbourne, but I say to him, and to honorable members generally, that the earlier we reach the stage at which it may be possible to hold such a meeting, the more certain it is that I shall be willing to arrange it.
– Some time ago I asked the Prime Minister a question concerning the shooting of certain Chinese at Fremantle. I am not quite clear whether he said that he would supply me with information on the subject. I ask him now whether he will make a statement on the matter, from his point of view, and give me as much detailed information as practicable in relation to it?
– There were two incidents at Fremantle.
– A man was killed.
– That is correct. I do not propose to say anything about that subject here.
Ministerial Assistance by Private Members.
– “Will the Minister for the Army inform me whether a parliamentary committee has been appointed to inquire into certain Army matters in Tasmania? If so, what are the names of the members of the committee, and what functions will the committee perform?
– I am not aware of the appointment of such a parliamentary committee, but the ramifications of the Army are so great, and the problems in relation to it so many in. the various States, that the Government is desirous of doing everything possible to meet the situation effectively and promptly. I have found it most beneficial to use the services of certain capable and enthusiastic honorable members who have offered to assist me during the parliamentary recesses and also at weekends while Parliament is sitting. Such honorable members from various States have already furnished me with reports that I have found most helpful in the onerous work of administering this department.
– Is the Prime Minister yet able to give to the House any information concerning the suggested appointment of an Australian Minister to Russia and Naval, Military and Air Force attaches to accompany him ?
– The negotiations have not yet reached a stage at which an announcement is practicable.
Motion (by Mr. Curtin) proposed -
That Standing Order No. 70 - 11 o’clock rule - he suspended for this week and nest week.
– The Prime Minister (Mr. Curtin might indicate whether the Government has in mind any particular matters that it wishes the House to con sider. If the 11 o’clock rule be suspended, the Government may introduce new business after that hour.
– in reply - The noticepaper discloses fairly substantially the programme which the Government asks Parliament to pass at this period. It is customary, when approaching the end of the financial year, to make financial provision covering at least two months of the succeeding financial year. Parliament will, therefore, be asked to pass a Supply Bill for that purpose. Beyond that, and the bills on the notice-paper, I know of nothing that the Government intends to ask Parliament to consider.
Question resolved in the affirmative.
Motion (by Mr. Scully) agreed to -
That leave be given to bring in a bill for an act to amend the Dairy Produce Export Control Act 1024-1838.
Bill presented, and read a first time.
Debate resumed from the 35th May (vide page 1288) on motion by Mr. Chifley) -
That the bill be now read a second time.
– I ask for permission, Mr. Speaker, to debate simultaneously with this measure the State Grants (Income Tax Reimbursement) Bill, the Income Tax Assessment Bill, and the Income Tax Bill, on the ground that all four are cognate.
– I consider that the four bills may conveniently be debated simultaneously, but the motions for the second reading will be put separately.
– On a point of order, I should like the Prime Minister to state .whether he consents to the four bills being dealt with as one hill, and whether the Government considers that all are part and parcel of one plan?
– The Government agrees that the debate on the motion for the second reading of the first bill shall be wide enough to include consideration of the principles embodied in the related measures. That does not in any -way affect the authority of the House to deal separately with each of the other bills.
– This arrangement will enable honorable members to discuss the provisions of the four measures, and suggest any amendments they may deem desirable.
The Opposition fully appreciates the magnitude of the task of mobilizing completely the resources of the nation, which faces the Government to-day. It realizes that war expenditure will continue to mount, and that the meeting of the wartime financial needs of the nation must have paramount consideration. It is appropriate that I should emphasize that the Commonwealth is prosecuting the war on behalf of, not Queensland, New South Wales, Victoria, or any other State, but Australia as a whole. I am able to express complete agreement with the declaration of the Treasurer (Mr. Chifley) that in the present emergency, the Commonwealth must have available to it the maximum taxable capacity of the nation. For some considerable time, there has been, a growing demand for the inauguration of a plan designed to achieve a greater measure of taxation uniformity, and for simplification of taxation principles generally. Action by previous Treasurers resulted in a degree of uniformity being obtained, mainly in the direction of determining a uniform basis in respect of taxable income and allowable deductions. Nevertheless, the position was still far from satisfactory. The demands upon the Commonwealth by reason of its evergrowing war and defence obligations compelled the Government in 1940 to take a very serious view of the taxation position as between the Commonwealth and the States. When I, as Treasurer, on the 21st November, 1940, delivered the budget speech covering the financial year 1040-41, I drew attention to the position as the Government of that day saw it. T stated that income tax on individuals had hitherto been only a. minor element in Commonwealth taxation, and that, if it were to become a major instrument of war taxation, it was obvious that radically different standards of taxation must be adopted. I pointed out that the tax rates imposed by the States had been respected when the federal rate proposed in the ‘budget was being framed, arid added -
This has very considerably hampered Commonwealth taxation at all points of the scale, because oi the great variation in State rates. Lt is a matter for consideration whether under the increasing pressure of war we shall be able to maintain this principle. Some greater uniformity in State income taxation may become a war-time necessity.
Following this clear declaration to the States and the people of Australia, the Federal Taxation Commissioner, Mr. J Jackson made a comprehensive survey of the incidence and grades of State taxation, and analysed the position generally. Early in February, 1941, I submitted to the States a memorandum outlining possible methods of achieving taxation uniformity. These proposals, which were in the hands of the States at the beginning of February of last year, were made the subject of discussion in order that the possibilities of the position might be revealed. They were not hard and fast proposals; I made it clear to the States that they could suggest alternative means of tackling the problem. However, their replies emphasized their diverse interests, and offered no hope of an agreed settlement on the lines of any of the suggestions. The States were informed in the clearest terms that the Commonwealth had no desire to usurp In any way their functions or their sovereign rights. In. fact, in some respects, the Commonwealth proposals were not dissimilar in principle to the voluntary Loan Council, voluntarily set up in 1923, under which, in order to avoid competition on the loan market, the Commonwealth and the States agreed that there should be only one borrowing authority. I have made these observations in order to demonstrate to the House that previous administrations had endeavoured for a period of two years to achieve an effective system of uniform taxation, so that the Commonwealth could avail itself of the maximum taxable capacity of the nation.
It must be admitted that the provisions of the four bills now under consideration are revolutionary in character. The debate upon them should be one of the most important that has taken place in this House for very many years. I am not competent to deal with the constitutional aspects of the Government’s proposals. We have heard it said that the States intend to contest the constitutional validity of the Government’s proposals. I have no doubt that the Government has thoroughly considered that aspect of the matter, and is prepared to accept responsibility for its legislation. The Opposition recognizes the necessity to use expeditiously and effectively the full taxable capacity of the nation in order to finance the war. It must, however, be borne in mind that, whereas my discussions with the Premiers were undertaken in the hope of evolving some concrete- plan for taxation uniformity, the present Treasurer’s discussions with them were upon defined and concrete proposals submitted by a committee appointed for the purpose. The instructions given to this committee were specific and definite. It was instructed to formulate a plan whereby the Commonwealth was to be the sole taxing authority in the field of income tax for the duration of the war, and the States were to be compensated by way of grants for withdrawing from the field.
The Government’s attitude is that the system which it proposes is the only possible one if the maximum amount of revenue is to be obtained for the prosecution of the war. I do not agree that the specific proposal before U3 is the only one which could be submitted, or that it is the best one for the purpose. The quantum of Commonwealth taxation which can be collected from one income range is largely governed by the amount of tax collected from that range by a particular State. The Commonwealth is compelled to sacrifice revenue because of the varying income tax rates which apply in different States. One State may be the highest taxing State on incomes of £500, and another on incomes of £1,000. When income in the highest taxing State is taxed to what is considered the limit at a particular time, similar incomes in the rest of the Commonwealth are necessarily taxed below that limit - in some States very much below. A sense of justice, and consideration for the ability of the individual to pay, compel the Commonwealth to refrain from too great severity in th, case of a State in which taxation is high. The Constitution forbids discrimination between States, and consequently the Commonwealth must forego some of the revenue which might otherwise be available to it. lu some instances, these differential rates of State taxation are a manifestation of differing political principles, either at present or in the past.
The taxable capacity of States, and the financial resources upon which State governments can draw, vary widely. The States vary in population, size, natural resources and industrial development. Some of the States which are greatest in area have a small population widely distributed, and others suffer from a lack of balance between primary and secondary industries Some States, because of their proximity to the war zone, their liability to attack, or their lack of natural or industrial resources, arc not receiving their full share of Commonwealth expenditure, and State taxation must be proportionately higher because the total taxable income is low. Rates of tax in one State at some income levels are three times as high as those in some of the other States. In some States the cost of administration is low, and their social services frugal; in others the cost of administration is high. State taxation in all States from all sources has grown by 50 per cent, in five years - from £36,000,000 in 1935 to £54,000,000 in 1940. The national taxable capacity has risen very rapidly, and the benefit from this should accrue mostly to the Commonwealth. Because of increased Federal expenditure it is unnecessary for most States to spend money on unemployment relief, because unemployment has virtually ceased to exist. The States have been relieved of many of their financial responsibilities by the introduction of such Commonwealth social services as oldage, invalid and soldiers’ pensions, child endowment, widows’ pensions and relief to individuals temporarily out of employment. The Commonwealth is also giving increased assistance to primary and secondary industries. The position of State finances has an important bearing on the matter under discussion, and has to be considered in the light of the Treasurer’s statement to the Premiers last month that the Commonwealth would Treasury, showing State deficits and sur- end the present financial year with a pluses at the 30th April, 1942, and again deficit of £70,000,000. For purposes of at the 30th April, 1941, two months comparison I place before the House a before I made my proposal to the States statement supplied to me by the last year. The table is as follows: -
From this it will be seen that the finances of the States are £3,990,000 better off than they were in April last year. The Commonwealth must be provided with sufficient funds to enable it to prosecute the war effectively, whilst the States must be left with sufficient to perform their proper functions. In practical political life these two considerations tend to clash. At this stage, the taxation of individuals resolves itself into a question of how much we can leave to each taxpayer to enable him to maintain health and efficiency. This presupposes sacrifice by individuals, and the basis of such sacrifice must be equality such as can be achieved only by a uniform rate of taxation. Unnecessary expenditure by the States must cease, and developmental works of no defence value must be discontinued. There is a vital need for sacrifice by State governments as well as by individuals. The per capita cost of public administration and social services varies greatly as between the States. The greater part of the revenue of the States is swallowed up in interest payment on dead-weight debts due to heavy borrowing over the years.
If. the Commonwealth is to be the sole taxing authority in the field of income tax, an equitable system of compensation to the States, which vacate the income tax field in favour of the Commonwealth, should make provision for the widely divergent conditions obtaining .in the various States. Compensation to the States, as provided in the. measures before the House, is to be made by averaging the State collections of income tax in the two years 1939-40 and 1940-41. Such an average includes the abnormal collections in some States due to the increase of the total taxable income because of Commonwealth war expenditure. The States are to be compensated for the loss of revenue from income taxation only. For instance, in New South “Wales the total taxes upon a per capita basis amount to £8 16s. 8d., of which taxes, other than income tax, amount to £2 16s. 5d., whilst the total taxes in Victoria are £6 12s. ‘3d., of which £3 2s. 8d. is for taxes not being income tax. Therefore, once the residents of Australia are put upon a uniform tax basis, New South Wales will receive a premium to the amount, compared with Victoria, of 6s. 3d. a head, this being the amount of State income tax which Victoria did not charge because of its greater taxes in other directions. An alternative method, namely, the making of a per capita payment, somewhat resembling the per capita payments made by the Commonwealth to the States as compensation for abandoning customs duties, could be considered.
As honorable members know, the late Andrew Fisher introduced the Surplus Revenue Act of 1910, which provided for per capita payments to the States for ten years. The provisions of that act continued to govern the distribution of Commonwealth revenue until 1926-27, when, under the Financial Agreement of 1.927, the Commonwealth agreed to pay to the States an annual fixed amount of £7,584,912. This represented the equivalent of the per capita payments for 1926-27. The Commonwealth Grants
Commission, in its report for the year 1934, stated-
One may conclude that the original per capita arrangement, would have worked very fairly between the Commonwealth and States, had it not been for the abnormal disturbance of the Great War.
The economic consequences of the various controls which have been placed upon civil production in order to divert manpower and materials for war-time needs, lead to the conclusion that certain definite quantities of goods, materials and services will be left over for civil consumption and use. These quantities will depend only to a relatively minor extent upon the ready money available to the geneva] public, which they are able and ready to spend. The total amount of goods available is more or less fixed according to the policy of the Government. The individual benefits by increased Commonwealth spending, because his purchasing power is increased by reason of higher wages, more overtime, and the elimination of unemployment. As the supply of goods is fixed, he can increase his individual consumption only at the expense of his fellow workers. If every one spends more, nobody benefits.
The alternative is that excess spending power must be checked both by savings and by compulsory taxation. Both of these methods have been used by the present Government. Compulsory taxation, both direct and indirect, diverts to government use a considerable amount of excess spending power. The transference of savings by means of war savings certificates and loans has been tried by the present Government only on a purely voluntary basis. The total, savings bank deposits demonstrate an unwillingness on the part of a large section of the general public to lend voluntarily. The latest figures available to roe, for February, 1942, show a total of £263,000,000 on deposit, compared with £247,696,000 in the corresponding month of last year. Obviously better alternatives should be found to curb those who control this huge volume of excess spending power.
Any proposition that the plan before the House should be continued beyond the war period and one year thereafter would have to stand a more vigorous scrutiny, because its perpetuation would render State governments too dependent upon the
Commonwealth Government. The coinposition of the respective government? might be such as to cause between them friction that might be, not only unedifying, but also positively harmful to the best interests of Australia.
Summarized, my objections to the Government’s scheme are: First, the arbitrary .methods provided for recouping the States. Secondly, the injustice done to the taxpayers in the lower income- taxed States by taking a greater amount of income tax from those taxpayers than will in effect be contributed by the taxpayers of the higher incometaxed States. Thirdly, the tables of rates of taxation forming a part of the plan accentuate the present disparity whereby taxpayers under £1,000 pay too little tax and those over £1,000 pay, relatively speaking, too much tax. This disparity is aggravated even to a greater degree than a perusal of the tables discloses, because the Treasurer, in his secondreading speech, informed the House that, whilst the plan will increase Commonwealth revenues by from £12,000,000 to £15,000,000, the lower ranges of income will be relieved of the payment of £1,50)0,000. Fourthly, the wholly unnecessary complexity introduced by allowing concessional deductions as rebates of tax in lieu of the existing simple system of allowing deductions from income before determining the rate of tax. Fifthly, the inadequacy of a maximum rebate of tax for each child beyond the oldest under the age of sixteen years.
I propose now to deal in detail with each of my objections to the scheme. First, the method provided for recouping the States is purely arbitrary, as it is based on the revenue received by each from income tax only, and on the average for the years 1939-40 and 1940-41. Consequently, some States have been treated more generously than have others. Regarding my second objection to the Government’s proposals, I submit that by a. sensible system of post-war credits, the injustice done to the taxpayers, to which I have referred, could be avoided. However, the system evolved should do bare justice to the individuals of those States who, by virtue of the federal taxation system that has existed since its introduction - allowance of State taxation as a deduction - have contributed a greater amount of tax to the Federal Treasury over the years. I remind the House of the proposal in the budget which I introduced last year, whereby a national contribution was to be assessed on every income in Australia, however derived, in excess of £100 for a single man or woman. From that national contribution was to be deducted the federal income tax payable in the current year, and the State income tax paid in the previous year. The balance was to be collected as a loan to be called the wartime contribution. We conscientiously believed that, in view of the disparity between the existing rates and methods of taxation, our budget supplied the most solid and straightforward way in which to iron out the difficulties. While providing the finance required for war purposes, and for post-war reconstruction, it would have arrested inflation. We insisted upon the principle of post-war credits, and on that issue we were defeated. Nothing that has happened since the 7th October, 1941, has altered our view that the fundamental principles of our policy were the best in the interests of the nation. It will be observed that, under our plan, practical uniformity would be achieved and disparities between lower taxed States and higher taxed States avoided. If it be desired to maintain the fundamental objective of the proposal before us, [ submit that the principle of my budgetary proposals - the post-war credit system - is to be preferred to that nowpresented. The introduction of a compulsory savings plan would indicate to each individual the minimum amount of savings the Government expected him to contribute. Compulsory savings would divert surplus spending power to a “nestegg “ for the future and would provide a fund for post-war reconstruction when unemployment will have to be faced and when the spending power of the community cannot be maintained at its present level. Such a plan would be definite and equitable, if it were applied in strict proportion to every individual according to his capacity. Otherwise, the Government, in order to honour its pledge of an all-in war effort, must inevitably take this excess by compulsory taxation. A modification of the post-war credits scheme which my Government attempted to introduce last year would not be difficult to implement. The amount to be raised by post-war credits would need to be decided, and the appropriate scale of distribution over the various incomes could be easily determined. The system of post-war credits has been adopted successfully in England. I ‘believe that such a scheme, if combined with uniform taxation, would be very effective in Australia. The individual taxpayer is provided with a compulsory savings bank account, upon which he is unable to draw until the conclusion of the war. In the post-war period, such credits would be most helpful to our economic structure. They would provide automatically for those who had accumulated credits by hard work during the war period, but who had been thrown out of employment in post-war adjustments, for the time that would elapse before they could he absorbed in civil occupations. The post-war credit system is singularly free from objection. It achieves the salient objectives of the Government’s plan with the added advantage that it provides for equality of sacrifice during war-time and establishes a nest-egg for the taxpayers of the States who have been frugal and careful with their finances and thereby have contributed disproportionately to the Commonwealth. It has been stated by political opponents that post-war credits could never be repaid. That is sheer nonsense. Post-war credits would not be the only amounts to he repaid; indeed they would only be a fraction of our future contractual obligations. If default is visualized by panic-mongers, why do they support the big loans which are floated from time to time? In England, a single man on 45s. a week pays 2s. a week, the whole of which is a post-war credit. There, a married man with two children and an earned income of £350 pays £24 7s. 6d., of which £17 6s. 8d. is post-war credit.
The Chancellor of the Exchequer, Sir Kingsley Wood, speaking in the House of Commons on the 7th April, 1941, said on this subject -
This extra taxation would cut down income available for consumption - and it was necessarily and deliberately intended to do that - but it was most important that it would not be allowed to interfere with war savings. The post-war credit was intended to be in addition to and not in substitution of voluntary savings, and not only should existing contributions to war savings be maintained, but every effort should be made to increase those contributions. Indeed, by providing this small saver with the promise of a substantial nest-egg, we might well increase rather than diminish his desire for adding to it, so that he might have a sum sufficient to enable him to face with further confidence the difficulties of the post-war world.
On the 16th April last, when presenting his budget to the House of Commons, the Chancellor of the Exchequer said that before the outbreak of war 1,000,000 wage-earners in Great Britain had paid £2,500,000 in income tax. In 1941-42 5,500,000 wage-earners had paid £125,000,000 in income tax, of which £60,000,000 would be returned after the the war.
Regarding my third objection to the scheme - that relating to the tables of taxation rates - my view is that the proposed scale can be justified only by visualizing it as a first step in the plan. Unless it be implemented by adjustments when the inevitable future increases are being dealt with, undesirable features will persist. If we examine the tables prepared by the Treasurer it will be seen that a Western Australian taxpayer on £150 pays £7.3 in income tax at the present time, and a South Australian taxpayer on the same income, £5.8. The Commonwealth Government proposes to relieve these persons totally of their State tax liabilities. It i3, therefore, making a gift to them, and for what purpose? Because, and only because, there is a war on, and there must be equality of sacrifice. This is a time when just contributions are more proper and. necessary than tax remissions. The action of relieving or releasing a field of income now taxed is out of focus altogether with the basic objective of the scheme. The scales of uniform tax rates for individuals are arranged to provide the same yield of tax, £84,500,000, as is being obtained by both Commonwealth and States at present from income tax. The incidence on the various classes of taxpayers has been altered, as the group in the under £400 a year class will be relieved to the amount of £750,000; the £400-£l,000 group will pay £750,000 less, and the over £1,000 group will pay an extra £1,500,000. As I have pointed out in this House on more than one occasion, the taxable income of the under £400 group amounts to £560,000,000, based on a total taxable income of all groups of £800,000,000. The total taxable income has inevitably increased beyond these figures, which are the latest available to me. With war expenditure and increased governmental expenditure the £800,000,000 which we have been used to taking as the basis must assuredly have increased, and I venture the opinion that the taxable field is now nearer £1,100,000,000. This vast field of £560,000,000 is lagging far behind other fields in the amount of income tax which it pays, and consequently the higher income groups are being taxed more heavily to make up the balance. Income taxation is subject to the law of diminishing returns, and the imposition of a yet heavier income tax on the group already highly taxed will result in a far smaller yield of tax from that group than is expected. 1 believe that instead of relieving the under £400 group and the £400- £1,000 group of £1,500,000 of tax, a larger proportion of the aggregate tax should be obtained from these fields. The tables circulated by the Treasurer should be accepted with some reserve with respect to certain taxpayers. For instance, a Queensland taxpayer or a Victorian taxpayer receiving dividends will not find the inducement held out to him by the Treasurer so attractive as it. is painted. Such taxpayers have not been paying State income tax upon dividends, but the dividends will become wholly liable to the higher federal income tax as though the income had always been assessable income for Queensland and Victorian income tax purposes. Taxpayers with income from more than one State will also do well to accept the tables of comparisons between the proposals and the present rates as more apparent than real. In the Treasurer’s appeal to the cupidity of Queensland taxpayers, it “was not necessary to claim that such an important step as the compulsion of the States to vacate the field of income taxation was required in order to remedy the position of taxpayers of that State with incomes of £250 a year - the worst case, on a proportional basis, cited by the honorable gentleman. The position is that the Commonwealth and Queensland taxes of £11.6 now payable by a Queensland taxpayer earning £250 a year only arise because the Queensland Government, in its State Development Tax Act, unreasonably declined to make any allowance for dependants. Under the new provisions this taxpayer will be required to pay only £3 16s. It is essential that the Commonwealth should obtain the whole of the revenue from the increased taxable field created by war expenditure. However, a single tax scheme is not needed to achieve that effect. Steps were in view, had the post-war credit scheme been approved, to bring about such a result.
As to my fourth objection I remind the Treasurer that, at the present time, the call is for the utmost simplicity. The cumbersome method of determining primary tax and then calculating tax rebates as a deduction therefrom conforms’ no doubt to the theory which has frequently been expounded by the right honorable member for Yarra (Mr. Scullin) for many years. But the proponents of that theory, in seeking to limit the tax deductions to which a family man is now entitled, do scant justice to those to whom this country is so much indebted. In fact, they are doing a distinct disservice to Australia. The limitation of tax deductions to which I refer is not confined merely to that brought about by the maximum amount of tax to be rebated. Another kind of limitation is occasioned by determining the primary rate without reference to the concessional deductions, or, in short, by bringing the concessional deductions into account for rating purposes. The complexity and variety of these calculations, affecting as they do so many of the assessments that previously were simple and took little time to issue, particularly those in the lower ranges of income, will inevitably limit the man-power saving that might otherwise be achieved. These complexities must mean increases in some assessing staffs that could be avoided under a more simple method. Regarding my fifth objection, the rebates for dependants provide an example in support of my contentions.
In conclusion, I crystallize my attitude by saying that the present Government’s scheme is not so good as, and will be no more effective in obtaining the maximum revenue for war purposes than, that which was put forward by the Government in which I was Treasurer, and which resulted in that Government being removed from office.
– This measure is one of a group designed to enable the Commonwealth Government to take command of the taxable capacity of Australia in order to obtain the economic and financial resources required for the war. That is the supreme purpose of the bills. They provide for total mobilization so that we may use everything we have to the best advantage and in the most equitable way. Whatever be the character of the Australian political structure - a structure which consists of a Federal Government and six State governments - the fact is that all these instrumentalities are the agencies of the one people. Our people, as a whole, have to make available the resources needed for the conduct of the war, and, as State electors and Federal electors, they constitute the whole taxpaying community for both forms of government. We must look at this matter not only in the light of immediate requirements but also in the light of the evolution of the federal system. Why did the six colonies find it necessary to set up a central authority - a Commonwealth Parliament and a Commonwealth instrumentality ? Basically, it was because the people of Australia could not be given a guarantee of adequate defence as a people if any one State were charged with the entire responsibility for what defence of the whole might entail within the territory of that State. Therefore we must examine the reasons which lead to that unequivocal gift to this Parliament of absolute authority for the organization of defence. Of all the great men whose names figure in the annals of federation there was not one who, having accepted the idea of federation, did not regard defence as an integral part of the functions of the Commonwealth Parliament. Of course, at that early time there could have been no accurate anticipation of the state of affairs which exists to-day. Not even in the years from 1914 to 1918 did the governments of those days contemplate a war of the kind in which we are now engaged, and in which Australia has actually been attacked, or the kind of defence programme which war has necessitated for this country to-day. In the Great War of 1914-18, Australia’s duty was to contribute fighting men to reinforce the armies of our allies, all of whom were engaged in theatres distant from Australia, and in addition, to export as much of our primary products as was possible with the then existing shipping difficulties. Apart from that not one additional provision was made to resist invasion of our own territory. Our expenditure in connexion with this war, and the call-up of men for the fighting services, for the production of munitions and other services, compared with what was done in the war which ended nearly 25 years ago, are so different that they place a totally different obligation upon the people of Australia. Therefore their financial relations with this Government, and also their financial position as taxpayers of the Commonwealth, cannot be contemplated without considering a re-arrangement of their relations with the State governments as such. The facts briefly are that as the progress of the war brings everincreasing menace to the integrity of this country, the Commonwealth Government is called upon to make greater and greater provision to resist the enemy. We have now reached the stage at which the assessment of the effort required for the war cannot he based upon the preservation of existing rights, or the retention for private uses of what may be considered to be the resources that should be left to citizens either to live the life that they have been accustomed to live, or to conduct industry as they have been accustomed to conduct it, or to work in industry as they have been accus tomed to work in it. It may well be that very soon from 750,000 to 1,000,000 of the men of this nation will be directly engaged in the fighting services, or in the production of armament.5 and munitions for the fighting service?. I do not humbug myself or the country. The whole of the money required to pay that enormous aggregation of our physically fit men is being paid to them without their being able to produce what can be regarded as wealth - that is, consumable goods and commodities which can be bought, sold and traded in as a part of the ordinary business of the country. As a matter of fact this vast body of man-power ha.been amputated from the productive resources of this nation, and the whole of the money contributed by the taxpayer* for the prosecution of the war either by taxes, or by loan, and paid to these men and spent by them competitively on a very diminished supply of goods, doe? not equal the amount of money that the Commonwealth Government is expending upon the war. Thus the excess of money in the economic structure to-day over and above what has been provided ,by th<people represents an additional capacity to buy goods, despite the fact that the capacity to produce goods has not kept pace with the increasing capacity to buy and indeed is growing less and less. As a result the revenues of the State governments are increasing not only because the same rate of State tax is producing a greater yield, but also because the expenditure of the Commonwealth Government is making certain State instrumentalities much more remunerative than they would otherwise be. Thus out of the Commonwealth Government’s deficits, the State governments are getting into an ever-improving budgetary position. The State governments are also being saved large sums of money which under other circumstances they would have to spend. I refer to expenditure on unemployment relief as a concrete example. Moreover the Commonwealth Government, very properly having regard to its conception of the conduct of the affairs of the country and to the necessity to stimulate public morale, has not only improved existing
Commonwealth social services, hut has also expanded the scope of such services. This has substantially reduced both the obligations and the expenditure of the State governments. Yet, what does the Commonwealth’s plan propose to do? Is it intended to take away from the State governments moneys which hitherto they have regarded as necessary to carry on their functions of government? No! The Commonwealth Government is proposing to pay to the State governments, in compensation, annually the average of the money which they have collected from State income taxes during the last two years, which have been taken as the basis of calculation.
– The problem is not only one of “ buying “ the States.
– The Commonwealth Government is not proposing to “ buy “ the States.
– The objection of the State Governments to this scheme is that it takes away their ability to discharge their obligations of government.
– In what way does it do that? From what sources do the States derive moneys for the discharge of their functions of government? From certain revenue sources, including income tax. What does the Commonwealth Government’s plan propose in this regard? It proposes to leave to the State governments all the revenue resources previously available to them with the exception of their resources of income taxation. In this regard the Commonwealth Government proposes that, instead of obliging the State governments to introduce and pass through the State Parliaments income tax assessment bills year by year, it will -give to the State governments an. amount of money that they would have received from State income taxes had such taxes been applied at the same rate in the future as they have been in the last two years, taking into account the taxable capacity of those two years.
– The Commonwealth Government has been generous to the State governments.
– Quite so. But the Commonwealth Government is doing more than that. It is saying to the State governments that not only shall they be given the amount of money that they would have obtained from State income taxes if State taxes had remained as they were for the last two years, hut that, in addition, the taxable capacity from the State point of view shall be pegged. Why is that fair? For the reason that the increasing taxable capacity of State citizens as citizens of the Commonwealth is entirely . attributable to Commonwealth Government expenditure from taxation and loans or from the provision which the Central Bank has made towards the financial resources of the Commonwealth. Let us look at that aspect of the subject. Trading bank deposits increased during the period September, 1939, to April, 1942, from £116,000,000 to £191,000,000. Commonwealth Bank deposits in the same period increased from £10,000,000 to £19,000,000. The figures of deposits at call in public trading banks exclude the deposits by governments and deposits in the Commonwealth Bank, and exclude, of course, special deposits of the large amounts held by the bank on behalf of commodity boards such as the wool committee, and the like. The Leader of the Opposition (Mi Fad den) referred to the increases of deposits in savings banks. The whole financial structure of the Commonwealth reveals that increased financial resources are in the hands of the public. The note issue also bears testimony to that fact, because notes held by the public have increased in value, in the period under review, from £36,000,000 to £79,000,000. The’ pumping of that amount of money into the purchasing capacity of the nation inevitably hag provided a rising taxable capacity which has already given to this Government, and will give to it next year, increasing revenues from income tax, because individuals who may have received £180 last year will probably receive £200 next year. In addition, thousands of persons who were not receiving any wages, or who were receiving amounts below the level at which the Income Tax Assessment Act became operative, have now been brought into the field of income taxation. What the Leader of the Opposition said in this connexion, was quite correct. The earning capacity of people, particularly those in receipt of amounts up to £400 a year, is very much larger than it wa3. He argues that there ought to be an increased imposition of tax upon such incomes. I do not accept that. What does the Government’s plan first contemplate? It is governed by the obligation of the Commonwealth to use everything predominantly for the purposes of the war, and the obligation of the individual to devote to the war all that he can spare. Surely that means that, having regard to the limited field available to people to expend their money sensibly, those who are on a given income in one part of Australia shall be in the same class as those who are on a similar income in any other part of Australia ! The scheme of the Government has for its predominant purpose not only simplification of the machinery in relation to the return of income and the assessment and payment of tax, with the object of saving labour-.power to both the department and the taxpayers at a time when labour is difficult to obtain, but also the definite assurance that taxpayers in any given range of income shall make the same contribution to the conduct of the war and the maintenance of the nation, and that this Parliament shall have greater freedom in so adjusting the tax schedules that they may be effective. Hitherto, as the Leader of the Opposition has pointed out, the taxes imposed by certain States on low incomes have been, in respect of morale for the conduct of the war, intolerable and oppressive. One of the very objections that I advanced to any increase of the federal tax on incomes below £400 a year was that such ‘an increase would make worse an already intolerable position. I cite South Australia and Western Australia as examples. Such a scheme would make utterly unjust what would be a fair rate of tax on a low income in a State where the tax was low, and. would amount to a super imposition on the existing tax in a State where it was already unjust. At ‘the other end of the scale, where the rate of tax on the higher range of income left a substantial margin for this Parliament to use, it was found impossible to use th,whole of it because of inequalities in titrates imposed by the various State governments. Therefore, what might be fair for the Commonwealth to do, superimposing its tax upon that of a particular State, would become a monstrous injustice if superimposed upon the tax of another State. Thus this Parliament has for years been faced with the dilemma of having to ensure fairness for the citizen out of the uneven and undulating field of taxation resulting from the decisions of various State governments and parliaments. Whatever practicability there may be of enduring that sort of thing in this Parliament in time of peace, it becomes a source of utter weakness in respect of the economic control that must be exercised in total war. The Commonwealth hoped that the Premiers would accept the principle of uniformity of taxation, and it mould have been quite ready to discuss with them the best means of giving effect to one simple uniform income tax for the people of Australia. They met us with a complete rejection of the principle of uniformity and one taxation law for the whole of Australia. There is only one war in which the people of this country are engaged, and only one nation that can defend them. Such defence cannot be plotted on the basis of a per capita allocation of defence expenditure. Whilst it may be perfectly true that the citizens of Victoria have for years been able to manage their State as they thought it ought to be managed, by maintaining a lower range of taxation than that of other States, yet the fact is that those other States are to-day the military frontiers of the State of Victoria. It has, of course, to be borne in mind that a mere arithmetical conspectus of State taxes does not furnish a real picture of the relationship of a citizen to the nation. The State of Victoria, which complains that it is not being treated as fairly as the State of New South Wales, has, as a matter of fact, been able to manage its affairs economically because it not only has a very large population in a rather well-settled area, but also has been the fortunate inheritor of the system of secondary industry expansion which was laid down in the beginning of this federation, and has been able to take advantage of it.
– Its financial policy has contributed to that.
– Its financial policy has coincided with its natural advantages. As a matter of fact the size, scope and character of a State are more the determinants of its financial policy than its financial policy can he the determinant of its productive character. The argument that it is statesmen who formulate economic policy and lay the foundations of a new order might read very well, might even sound very well, but the truth of the matter is that, whether the States have been prudent or imprudent, this Government is called upon to exploit the situation as it now exists, and cannot act as a reconciler of inequalities, whatever advantages or disadvantages a State may have derived from the past. We have to act as a mobilizer of existing resources for the furtherance of, not the development, but the defence and the security of Australia. If that be not accomplished, there can be no plan of development for State governments. I regard it as a little ridiculous to talk about a State needing sovereignty in order to develop its resources, provide for its future, and carry on its industries. After all, insofar as those industries are valuable for the prosecution of the war, the Commonwealth Government has fed them with untold resources and aid. It has spread the scope of industries. A great mass of the expenditure has gone, as I have said, to the provision of what in peace-time would have been employment, but is now the diversion of manpower from ordinary production to wartime production, for the purpose of giving to the fighting forces the munitions and armament they must have. We have to do more, not less, of that. Therefore, we have to draw increasingly upon the resources of the nation. In such circumstances, it seems to be o’bvious that this Parliament should have command over the taxable resources, of the nation, because the Commonwealth Government is responsible for the expenditure of the vast sum of money which is flowing out. We are responsible for the financial and banking structure of the nation. We have to see that the supply of goods keeps pace reasonably well with the supply of money. We have to maintain the economic solvency of the nation even while we wage war. There cannot be any guarantee that this Parliament will be able to perform its duty and discharge its responsibilities when,” for its financial needs, it must reap a field which six other governments also have the right to reap, thereby not only restricting the area available to the Commonwealth, hut also confusing and complicating the efforts of the Commonwealth Government to use even that part of the field reserved for it. Company taxation in Australia is, as the Treasurer graphically described it, a maddening maze, and I do not know how any one except a trained accountant can understand it. The Leader of the Opposition said that in Great Britain there is a system of post-war credits, such as he advocates for Australia. I remind him’ that in Great Britain post-war credits are based upon a system of uniform taxation ; they are not the means of bringing about uniform taxation. They are simply a device for substituting in part a system of compulsory lending for the existing loan system. As the Leader of the Opposition well knows, the Chancellor of the Exchequer, whose budgetary treatment of the problems arising out of the war has won the admiration of the world, does not have to run about finding out what six other treasurers are going to do before he brings down his own budget. He has the taxing field of the whole of the United Kingdom to work as he will, and has, therefore, been able to deal fairly, scientifically and justly with his problem. No Commonwealth Treasurer since the inception of federation has been in so favorable a position as is the Chancellor of the British Exchequer. We take the view that the existing confusion in Australia has the effect of frustrating the Government and Parliament in taxing for the conduct of the war, and that it is unjust to the taxpayers. If it be argued that under our proposals the State governments will be deprived of the means to perform their functions as governments, then we must consider that argument. During the last two years, the States have been levying and collecting income tax, while their other revenues have expanded, but we propose to peg them at a figure reached by averaging the returns over the last two years. If any State government, for any reason, finds that the amount of revenue which it receives under this arrangement is inadequate to meet its obligations, it may submit its case for examination by a tribunal, which will make a recommendation to this Parliament. For several years now, the financial operations of the three claimant States have been reviewed by the Commonwealth Grants Commission, and every recommendation made by the commission has been accepted by the Government, and given effect by the Parliament.
This issue can, of course, be clouded with a great amount of argument. It can be said that, during the last war, the Commonwealth Parliament brought in for the first time a system of Commonwealth income taxation, and that a guarantee was given that the Commonwealth would not tax heavily, or more than was necessary. It can further be pointed out that, after the war was over, the Commonwealth remained in the income tax field. That is perfectly true, and there was no alternative open to it. That, however, was not a violation of the relations between the Commonwealth and the States. Apparently, the States have some advocates who imagine that the Commonwealth Constitution provides for a contractual relationship between the States, and the Commonwealth which shall remain in perpetuity on its original basis ; in other words, that what took place during the first ten years of federation shall become the basis of an immutable contract. As a matter of fact, the Constitution specifically provides that, until the Commonwealth Parliament otherwise decided, certain things were to be doneThis left the problem of adjustment and development to posterity and to future parliaments, a very sensible thing to do. No fetters were placed on this Parliament other than those which the Constitution itself provides, and the Constitution provides the’ means for its own amendment. We do not contemplate amending the Constitution in order to impose a system of uniform taxation throughout Australia. We say to the States : “ If you impose income tax you will receive no compensation from us. On the other hand, if you vacate the income tax field, we shall give you the money that you would otherwise have raised for yourselves.” I ask the States to accept that arrangement. This Parliament has had to find £515,000,000 so far for the war, and it looks as if another £360,000,000 will have to be found during the next financial year, making a total of £S75,000,000 spent on war, the mo3t unproductive form of expenditure imaginable. It does not make for increased happiness, or for the establishment of national assets. It is the insurance cover which we have had to provide against a situation arising in which such things as State rights, taxable capacity, industrial development, and all those other considerations which we incorporate in our speeches, pro and con, when a particular issue is under discussion, would go by the board.
This is a war measure arising from the necessities of war. In no way other than that provided in this legislation can this Parliament obtain command over the resources of the nation in order to mobilize them for the purpose of the war. It must have the right to declare, without equivocation or hindrance, the rate of contribution which it considers proper that every citizen should make to the nation. That appeals to me as being not only the fundamental policy of financial authority for a parliament charged with the conduct of the war. but also the common sense application of the responsibilities which the Constitution has imposed upon this legislature. If there be one duty which the Commonwealth Parliament cannot escape, it is that of waging the war, or those activities which are requisite to the defence of Australia. I have no grouch .against those who, in the State parliaments, consider that once this principle is adopted, it will remain. I am no astrologer, and I do not know- what history may produce. I look forward, not altogether clearly, but none the les* confidently, to the time when thewar will end and victory will be ours. Whatever be the adjustments that the task of conducting the war will have imposed upon us for that day, I am confident that the people of Australia, with their own freedom preserved and their free, parliaments, will he able to bring to bear upon post-war problems a fair and unfettered judgment. With that conviction, I say to the Parliament and to the country that these measures are vitally requisite for the conduct of the war, and that any other consideration ought not to be taken into account.
– All honorable members will agree with the Prime Minister (Mr. Curtin) that at the present time the conduct of military operations transcends all other considerations; but when considering a proposal to achieve uniformity of income taxation throughout the Commonwealth,, many honorable members of the Opposition will be obliged to take a completely different view from that expressed by the Prime Minister and the Treasurer (Mr. Chifley). The history of this legislation is rather important, but I shall be content to mention the proposal of the Fadden Government to increase appreciably the financial resources of the Commonwealth. That plan was considered vital by the previous Administration, and when it was rejected, the Government went out of office. To me, it is surprising that the House has not been given some information about the history of the present proposal. There are many institutions in this country, the value of which I challenge; hut no proposal is more intriguing than the one now under consideration. So far as I am aware, the Government did not consult the Opposition before it introduced this legislation. It did not inform the Leader of the Opposition (Mr. Fadden) of its plan to deprive the States of certain powers, nor did it seek his views thereon. As I understand the matter, the Government selected the honorable member for Robertson (Mr. Spooner), the right honorable member for Yarra (Mr. Scullin) - I have no quarrel with that - and a professor, to draw up a plan for the introduction of uniform income taxation. Personally, I am not sure whether it was a committee to evolve a system of uniform income taxation, or whether it was like the gentleman for whom Herod sent when John the Baptist got into trouble.
– The views of the right honorable member for Yarra arc well known.
– Hi ? views upon the subject of unification are well known, and we have no quarrel with them.
– I am not ashamed them.
– And we are not ashamed of the right honorable gentleman. Regarding the views of the professor, I am not so sure.
– Was not John the Baptist decapitated ?
– Order! The bill contains no reference to John the Baptist.
– The Government should explain the selection of the honorable member for Robertson (Mr. Spooner). When the Government wishes to appoint a committee representing both sides of the House, the usual practice is to invite the Leader of the Opposition to nominate an honorable member to represent the Opposition. That is only common courtesy. Another important feature is that these measures, if they do anything at all, deprive the States of certain powers which they have exercised since the beginning of federation. .Whatever may be the feelings of honorable gentlemen on the subject of unification, the States possess those powers by virtue of their membership of the federation. If the Government has in mind any vital alterations of the Commonwealth Constitution, there is a clearly defined course to be followed. Before the Government was entitled to introduce this measure, common courtesy demanded that the State Premiers should be consulted on the matter. They should not have been confronted with a proposal that apparently emanated from an agreement between the- Government and the Opposition in this chamber, and asked to pronounce upon it. The Government should have discussed the problem with the Premiers and obtained their consent.
– The views of the Premiers were already known.
– When I was a Common wealth Minister, T experienced no difficulty in reaching agreements with the States on ticklish subjects. Unfortunately, some of those agreements were not allowed to remain in force for very long.
Honorable members should ask themselves whether this legislation arises out of the necessity of the Government, or the policy of the Government. My own opinion is that policy has been more responsible than necessity for the introduction of the measure. If the Government had declared that the financial situation was so serious and so difficult that it required the whole of the financial resources of the Commonwealth for the purpose of waging the war, I could understand it. I could appreciate the necessity for a measure which would deprive the States, for the duration of the war, of their right to impose taxes. But it leaves me completely befogged when the Treasurer says that, from the variety of taxes imposed by the States, the Commonwealth has selected the income tax alone.
– That is for the present.
– I shall deal with the future in a moment. Two methods were open to the Government. The first was the open method, and the second was the secret method. In my opinion, the Government has adopted the secret method and there is a dark and awful mystery to be explained about the genesis, operation and report of the committee. The Government had the choice of attempting to introduce its proposal by agreement with the States, or by imposing force. Of the two, the Government selected the method of force. Of course, the Government has not threatened the States that it will impose the system by force of arms. But if the States contravene this legislation, the legality of which is open to question, they will be deprived of the bulk of their revenues for the duration of the war. I do not know that anything more drastic than that has ever been suggested in this country. There are all sorts of ways of doing things, and [ think when the history of this proposal comes to be written the method it adopted will be the part .of which the Government will have least cause to feel proud. The question of compulsion has been introduced by the Government. I could understand the use of force, if the Government was prepared to make it of universal application, but only lately we had an interesting debate in this House, and the Government absolutely refused to accept the weapon of force which the Opposition wanted to put into its hands. It seemed to be in a dilemma, but about the 1st May the Government said, “ No. The force method is one thing which we cannot touch. Everything must be left to individual agreement”. Yet before the end of the month, the Government said that the force method was the only one ‘by which it could handle the State governments in the matter of taxation. Coercion is of the essence of this proposal. Other countries have governments and constitutions very much like ours. In spite of whatever arguments may be adduced in certain well-informed journals and by prominent honorable members on both sides in regard to the necessity for unification and abolition of State parliaments, let us remember that in the United States of America, towards which country many of our countrymen look with longing and hopeful eyes, there are 49 parliaments, each with two Houses. I shall not say anything more on that, but some taxpayers think that they have a terrific load to carry with seven Australian parliaments. For there to be effective unification in this country, as the taxpayers must recognize, this Parliament will have to be differently constituted and conducted. If this Parliament is to take’ over all of the activities of the State governments in regard to railways, roads, harbours, education, police, hospitals, land, “Werribee beef, and one hundred, and one other things, there will be a different kind of Commonwealth Parliament. There are people of Australia who think that we can administer this vast continent entirely from this little place of Canberra. The state of chaos to which this country would be brought by unification would have to be experienced; it cannot be imagined. The method of compulsion, which will be applied to the States under this law, will prove to be bad. It will certainly he acceptable in quarters where some people are to get much more than they are entitled to, but the bills as they stand, will produce unification of this country. There is no doubt about that. But 1” warn the Government that they will not produce unity. We have never had unity in this country since the war broke out, and of all measures that I have ever seen this is the least calculated to produce unity.
– The honorable member is a good representative of unity.
– I am when we are right, but not when we are wrong. I said here not so long ago that the only things on which this Parliament is united, are things which do not matter. The moment that anything of first importance arises there must be differences of opinion, and on this very measure time and the division lists will show there is a division of opinion, not only as bet ween the two sides, but also, as I have every reason to believe, as between members on each side of the House. That will be tested in due course. On this question of overawing the States by use of force I say that the Government’s attitude now is entirely inconsistent with its attitude on certain other matters. We saw a use of force here not long ago in order to override an act of the Victorian legislature in regard to Werribee beef. I do not know for certain, but I have a strong suspicion that, but for the fact that the honorable member for Melbourne (Mr. Calwell) is a member of the Melbourne and Metropolitan Board of Works, the Government would not have overridden that State law. That, in itself, creates a precedent in this country so far as my knowledge goes. I have no memory of any other Commonwealth Government previously attempting by regulation to abolish a law of a State. Another matter in which the Commonwealth could exercise control, in respect of which unity has been asked for by all kinds of public bodies, and which was discussed at the last conference of Commonwealth and State Ministers, is the liquor trade. That was a thing which came right inside the province of the Commonwealth Government, hut it said : “ Oh no, it does not matter what may he the effect on the forces of this country, either our own or visiting, or on public morale; this is one of the little niggers that we are not going to kick. The
State governments can look after this. This is sticky, unpopular. Some one is going to be displeased, no matter what we do “. If, in the interest of running the war, it is necessary to suborn the States, surely that was one of the things on which the Commonwealth had a perfect right to come in and say that there should be uniformity and most rigid control, but Commonwealth Ministers shied off like young colts into the bush.
I am mindful of the ass that the National Assembly made of itself when in 1815 with the Allied armies marching on Paris it discussed the question of a new constitution for a country which it did not control. I do not want to see this Parliament in that position. Therefore, I do not stress very greatly the constitutionality of this proposal. Not being a lawyer, like some honorable members. I am not perhaps entitled to. But whether we like it or not we live under a system of constitutional government, and there is only one method of changing the Constitution. Certain powers are allotted to the Commonwealth Parliament and all powers not specifically allotted to it are automatically within the province of the States. Reading th, Constitution as a layman, I am entirely at a loss to understand how the Government can read into the Constitution authority to do what it proposes to do. It has a perfect right to say that it wants more money with which to carry on the war and a perfect right to say that it will impose any scale of income tax it likes, but I have yet to learn that it has the right to say that the States shall not impose income tax.
– It does not say that.
– That is the effect of it. What it says is worse. It virtually says: “If you do so and so. you will not get anything, but, if you are a perfectly good little boy and agree to everything you will get certain pickings “. The pickings are not altogether contained in the bills, because we had a statement from the Treasurer this afternoon that separate pickings had already been given to two of the sparrows which come up here every now and again. One of my colleagues interjects that they are Labour governments. I shall not press that point except to remark that a man will not always take a certain course of action because he is a member of a particular political party. It is interesting to note that some of the strongest opposition to this measure has come from a man whose orthodoxy as a member of the Labour party is unlikely to be challenged even in this place. I refer to the Premier of Queensland, Mr. Forgan Smith, whose election to this House has often been heralded, but has never come to pass. If any action of the Commonwealth Parliament is capable of provoking that gentleman into coming here, this proposal will do so, and I shall withstand the shock if, in due course, the honorable member for Herbert (Mr. Martens) is sent away as a viceroy and is succeeded in this Parliament, by Mr. Forgan Smith.
– Does the honorable member think that we will repeat what governments which he supported did?
– This Government has not been game enough to undo what previous governments did, and that is the test of whether the previous governments were wrong. I heard, frightful roars from the zoo not long after this Government came into office about what would happen to a certain gentleman in India.. He was to have been brought home even faster than an aircraft could bring him, judging by the noise that was made, but so far as I know he is still on the Ganges or looking at the Taj Mahal. There is also a gentleman named Essington Lewis, who appeared to be in clanger of suffering the fate of the baker in Brussels who overcharged for bread in the time of the Duke of Alva, but he is still in charge of the Department of Munitions. The only person to escape beyond reach of the net that was to have been cast was the former honorable member for Corio (Mr. R. G. Casey), and apparently he got out in the nick of time. These proposals contain all the elements of a first-class revolution, involving as they do the relationships between State and Commonwealth, between .State and State between taxpayer and Commonwealth, and between taxpayer and State. There could not be anything much more revolutionary than such proposals. Had the Government said that its necessity was so great that it was forced to apply this scheme to every field of taxation, I could have had some sympathy with it, but there is nothing in this proposal to say that, after the scheme is carried out, the Commonwealth Government will not decide that it is necessary to impose a uniform land tax, motor tax, or amusement tax. It may even go into the field of leaseholds and say that a Commonwealth tax on leasehold properties shall be imposed in place of the State taxes now imposed and that, provided that the States do certain things, they will .be entitled to their slice of the loaf, but that, if they do not, not a crumb from the table of Dives will they get, even though they be reduced to the poverty of Lazarus. In the early days of this Commonwealth there was in operation a system of reimbursements to the States - it existed for ten years - which was known by the name of “ the Braddon Blot “. If this system of reimbursements should survive the hurdles of the High Court and the Privy Council - I have no doubt that it will be asked to jump them in due course - I have -a strong suspicion that, amongst some of us at any rate, it will be dubbed, for eternity “ the Spooner smudge “. It is a common practice, under the Commonwealth Constitution, for the States to be given certain grants by the Commonwealth Government. This bill does not mention the word “grant”; it refers to “reimbursement of tax”. A grant may be given to a State by the Commonwealth to compensate it for the effects of Commonwealth policy, to enable it to carry out certain works which are regarded as essential for Commonwealth purposes, or in the event of it agreeing to hand over certain powers or responsibilities to the Commonwealth. A State may not be granted a reimbursement of taxes without its consent. On the subject of whether or not the States are consenting parties to this proposal, there are some precedents which we ought to consider. One of these is the case of buyer and seller. Under the land tax laws, which were debated here not very long ago, the question of what constituted a fair market value for land was raised. The law states that a fair market value is the price paid by a willing buyer to a willing seller. This proposed reimbursement of taxes to the States could not in any sense be termed a payment by a willing Commonwealth to willing States. The States have no option. They must take what the Commonwealth gives, go without, or enter into other fields of taxation which have already been fairly well exploited. There is another precedent, which has arisen frequently in history. Many of us have read of men who, in order to save their lives, have agreed to swear to do certain things. Such cases raise the subject of the free will of the individual. One British historian laid down, in connexion with a famous case in English history, that an oath compelled should be annulled. The Treasurer will find that any undertaking by the States to surrender certain rights when force is used, or is implied, as it is in this case, will be annulled by the courts. It cannot he argued that a State which agrees to this proposal enters into a free-will agreement. Take the case of the Premier who came here last week. I have no doubt that he asked for more than he was given, and no doubt the Premier who is here now will ask for more than he will get. It is natural that this should be so. The very essence of the Government’s case for reimbursement has crashed to the ground as the result of the two concessions which the Treasurer related to us this afternoon.
– That is not true.
– I say to the Treasurer, with all the goodwill that I can command, that if the Premiers of Victoria and South Australia were to come here and say, in effect, “ The price of our agreement to this is such and such “, they would have a fair chance of getting what they asked. In these circumstances it cannot be argued, to me at any rate, that the prime motive of the Government in introducing these bills is the prosecution of the war. Our experience up to date has been that in order to get these bills through the Parliament the Government is prepared to do everything possible to pacify the State Premiers, but the State Premiers will not have the last say. This issue will be decided by the High Court and the Privy Council. It certainly will not be decided according to what this or the other
Premier is prepared to accept for surrendering the right of his State. It will be decided according to the constitutional law governing the rights of the States.
We may safely assume that the Government will need a lot of money in order to win the war, but its case would have been much stronger had it not brought down certain social service measures which have been .before the Parliament during these sittings. It has been proved to my satisfaction time and again that the passage of these bills is not the matter uppermost in the minds of Ministers. They have been chiefly concerned about the passage of certain measures which involve the expenditure of some millions of the taxpayers’ money, and the enhancement of the political reputation and achievements of the Minister for Social Services (Mr. Hollo way). Had these taxation bills been the primary concern of the Government they would have been submitted to Parliament before the social service measures, but the opposite procedure has been adopted.
I wish to say a word or two on the subject of the proposed compensation for the States. Putting on one side for the moment the question of whether the adoption of this plan is the wish of the people of Australia or not, I submit that the Commonwealth Government has not adopted the fairest method of reimbursing the States. Had it wished to reimburse the States justly out of income taxation it might have adopted the per capita basis and so placed every State on an equal footing. The proposed reimbursements have been planned with the object of giving first consideration to the States which, in the past, have been most prodigal in their expenditure. Both before and since federation, the governments of New South Wales have been notorious as prodigal spenders. Leaving on one side for the moment the record of thb notorious Lang Government which, of course, will be outdone -by the McKell Government, I say that the Stevens Government, to mention a government of my own political colour, spent vast sums of money on unnecessary works. On not a few of these the name of the honorable member for Robertson (Mr. Spooner) is to be found in some prominent position. Under the plan now proposed for State reimbursements, New South Wales will suffer no injury. The governments of that State have had a most turbulent and undisciplined history, yet New South Wales, with 39 per cent, of the population, is to receive 46 per cent, of the amount of money to be made available for reimbursement. A frugal State like Victoria, with 27.5 per cent, of the population, is to receive only 19 per cent, of the money to be made available for reimbursement, although for a great distance the Murray River is the only dividing line between the two States. If the Commonwealth. Government had desired to do the fair and square thing, and if its prime motive in introducing this legislation had been the winning of the war, it would have adopted a different plan. One of the prime motives behind thi3 plan is undoubtedly to ensure that New South Wales shall not have any grievance against the Commonwealth Government. Queensland also comes out of this business very well. Having about 14 per cent, of the population, it is to be given about 17.5 per cent, of the rake-off. About half the membership of this House is made up of members from New South Wales and Queensland, and it is a bad thing for the federation that two States should be able to dominate the House in a measure of this description.
– There should not be any State divisions. Our policy should be, “One. people, one destiny”.
– I remind the honorable member for Darling (Mr. Clark) that there are constitutional methods of achieving that end which his colleague, the honorable member for Bourke (Mr. Blackburn), will no doubt explain to him if he can find time to absorb the information. His ideal cannot be achieved by our “say so”. I have a strong suspicion that in the three States of the Commonwealth of which I have most knowledge - that is, the three less populous States - the people would answer with a resounding “ No “ any referendum proposals for an enhancement of the powers of the Commonwealth. I am not so sure that Victoria would not also give a negative answer to such questions.
– What about adopting the per capita basis for obtaining a decision on the abolition of the States?
– The Minister for Home Security (Mr. Lazzarini) has spoken to us in this House on many occasions from this side of the chamber. Sometimes he has instructed us, sometimes amused us, and sometimes annoyed us. Nowadays he carries certain responsibilities, and I say to him that if in his interjection he has enunciated the policy of the Government I am very surprised to hear the remark. If the Government desires to achieve the abolition of the States, it should take its courage in both hands and make a clear declaration to that effect. It should also take the legal and constitutional method to achieve its objective. It should not try to achieve it by methods of this description. What it is now proposing is “not cricket”. I do not know a great deal about the laws of cricket, but I have reason to believe that they are sound.
Surely by this time the Commonwealth Government has an intimate knowledge of its revenue requirements. I refer to this aspect because I remember that last October practically every honorable member opposite voted against certain financial measures introduced by the previous Government, although their adoption would have increased Commonwealth revenue substantially. I am not at all convinced that the legislation we are now considering will achieve the avowed purposes of the Government. We have been informed that certain additional financial proposals will he submitted to us in the near future relating to the wheat industry. I have been intimately connected with that industry for many years and frequently to my sorrow. We have reason to believe that that proposed legislation will be framed on a different basis from the measures now before us. The Government cannot have it both ways. It cannot argue in one breath that it needs every penny of revenue for the prosecution of the war, and in the next breath argue that increased social services are necessary even though they will be expensive, and that certain bounties on production are necessary. Australia will have a great deal to go through before the war is won. Our people will have to pass through the hot, narrow and dirty vale of adversity. We have lived too easily.
– The honorable gentleman should speak for himself. I have lived a ! hard life.
– If we are to take the matter personally, I am quite prepared to place my record against that of the Minister for Repatriation (Mr. Frost). I have had a strenuous life and have worked hard. I have neither started nor knocked off work at the sound of a whistle.
– I have not seen any signs of corns on the honorable member’s hands.
– Perhaps I could deal with that interjection more effectively outside.
The Government’s case is considerably weakened by the Government’s own conduct. It has been sufficiently long in office to realize the seriousness, the enormity, of the problem with which it is faced; but there are many respects in which it has not squared up to the necessities of the situation. I have desired for some time a debate on the coal-mining industry.
– What has that to do with the bill?
– It has a lot to do with it. Without coal, all the financial measures in the world would not be worth a packet of wet crackers. Coal is the foundation of all heavy industry. The stories related by the Prime Minister a fortnight ago, about the delinquencies of the New South Wales coalminers, need a little more squaring up than they have so far had. This Government and its predecessor have followed for too long the pathway of appeasement and conference in this matter. A somewhat different method will have to be employed before some of the constituents of the honorable member for Hunter (Mr. James) will do what the Government is entitled to expect from them.
I intend to vote against the second reading of all these bills. A uniform method of collecting income tax would be a good thing for this country; but I do not believe that these proposals will achieve that object, and the Government will regret having introduced them. I have talked of preparation for total war since before the present conflict started. In this Parliament, however, a man cannot get a hearing, especially from honorable members opposite. In the days of which I speak, the Treasurer, perhaps unfortunately for his party, was not a member of this Parliament. When the Labour party occupied the Opposition benches, we heard from its members time and again statements regarding imperialist wars. I am rather interested to learn that the Government has awakened to the necessity for a total war effort. But it cannot combine with social services a refusal to apply the total war principle to the man-power of this country, and simultaneously attempt to impose legislation of this character. Although I know that I am in the minority, not only on this side but also in the House, I must vote against these bills, whatever the consequences may be; and I happen to know them fairly well. I have never yet been deterred from going to Glenfinnan because I knew what would happen after.
– I have been in politics for 21 years, for thirteen of which I was in the Parliament of Victoria, the remainder of the period having been spent in this Parliament. I mention that only in order to show that I have watched the working of our system of government in Australia from the stand-points of both the States and the Commonwealth. The distressing and humiliating feature of Australian public life is the failure of the States and the Commonwealth to work together. Since the great trial of strength that took place in the sixties, the States and the Federal Government of America have worked together, and federal policies are very largely given effect through State agencies. That, in some degree, should be the position in Australia. The Commonwealth, in the present crisis, has failed to make as much use as might have been made of the States and municipalities. In this House, antagonism, mingled with contempt, is the popular attitude towards the States. Before this debate began the honorable member for Hunter (Mr. James) asked, “ When are .we going to get rid of this fungus growth - the States ? “ Expressed in extreme language that is the attitude of a number of members of the Commonwealth Parliament.. They believe that the States have no right to exist ; that they exist only by the toleration of this Parliament, and ought to be abolished as soon as possible, by any means that are available. This would suit a number of people in the States of New South Wales and Victoria, because those are’ the largest States and would dominate this House. The Senate would not be so important, as a government could be constituted and would be responsible to the House of Representatives. But that is not the feeling in the smaller States. Nine years ago, a referendum was held in the State of Western Australia, and all except a handful of the people voted for an alteration of the Constitution which would make it more satisfactory to that State. Two-thirds of the people voted for the secession of Western Australia from the Commonwealth, and nearly the whole of the remaining one-third voted for the convening of a. representative convention to remodel the Australian Constitution on lines which they considered would be more favorable to the States. Yet we are told that Western Australia and Queensland are the frontier States, where the brunt of the war is being borne for the salvation and security of Victoria and New South Wales! If they are the frontier States - as I believe they are - what reason have we for assuming that the members of the Parliaments and the Governments of those States are any less patriotic, any less anxious to- assist the war effort, than are we people of Canberra? With one exception, every member of both branches of the legislature of Western Australia voted against these proposals; and in Queensland, Labour opinion is unanimously against them. Thus, in those States where the danger i; greatest, the people are opposed to what 1 regard as a violation of the Constitution. Oh that ground, also, I am opposed to them: The Leader of the Opposition (Mr. Fadden spoke as though the constitutionality of these proposals are not a concern of this House. Apparently, according to the right honorable gentleman, we should throw our bills into the air, like cats, as Charles Fox threw his sentences, hoping that they will land on their feet, when they reach the High Court. That is not the way in which legislation should be passed in this Parliament. It is quite true that members of .Parliament in Australia are not bound by an oath, as are members of the American Congress, to maintain the Constitution. Nevertheless, there is on us the obligation to oppose measures which we believe to be a violation of the Constitution. I favour a liberal construction of our Constitution, but do not consider that it is my duty to vote for something which in my opinion is intended to destroy its whole nature. If the Constitution is to be changed - and I think that it should be - then the change should be made by a vote of the people. To attempt to destroy its essence without consulting the people, is to violate the spirit, and probably also the letter, of it. What do these measures propose? They do not say that the States , shall not impose income tax. But they say that the States shall be deprived of the officials, offices and equipment, by means of which they at present assess and collect income tax; that the Commonwealth will impose an income tax that will raise not, only all that the Commonwealth needs, but also an additional £34,000,000 to meet the requirements of the States; that any State that refrains from imposing income tax shall receive financial assistance from the Commonwealth; and that any State that persists in imposing income tax may not collect one penny of it until the Commonwealth has been paid in full. There is no doubt that this scheme bears upon its face the Treasurer’s acknowledgment that it is intended to raise the whole of the Commonwealth’s requirements, and all the requirements of the States, insofar as these can properly be raised by means of income tax. Now it is said, “If you like, after that, to impose income taxation, you are free to do it, but if you do, you will not get any of this £34,000,000, nor will you get paid until we have received every penny of the immense sura due to us. If you do not impose income taxation, we shall give you financial assistance under section 96 of the Constitution, which gives us power to grant such assistance or withhold it as we like “. It seems to me that if the Commonwealth Government has power to do that at this time, it has power to do it at any time, not only as to income tax, but as to every form of taxation. And it seems true that if such action can be upheld before the High Court, it will be upheld, not on the ground that it is a war measure, but on the ground that the Commonwealth always possesses such power. And that result, I believe, however achieved, is a violation of the Constitution.
– If it, is within the constitutional powers of the Government to do this thing, how can the doing of it be a violation of the Constitution?
– As the Chief Justice has pointed out, it is sometimes possible, by means of some device, to evade deliberately imposed constitutional restrictions. I think I can say that all the framers of the Constitution, and all those who have spoken on this subject, have said that this thing cannot be done. I also point to the fact that there have been very strong recent expressions of judicial opinion by the right honorable the Attorney-General, when on the Bench, and by Justice Sir Owen Dixon on this point, and the matter will be going before a High Court bereft of the assistance of both those great authorities.
The Constitution of Australia is really the creature of the Australian people. It is an instrument forged by the people for their own government, and it provides that it may be amended in a manner which requires the assent of the people by a certain majority. I believe that any attempt to alter the fundamental structure of the Constitution without consulting the people is a violation of the Constitution. The honorable member for Warringah (Mr. Spender) asked how the Government’s proposed action could be a violation of the Constitution if it were valid, but so far there is only the assumption that it is valid. No one can predict what the High Court will do, but every attempt is being made by the Government to discourage the States from appealing to the High Court. The Government is doing what the testator does who says to the beneficiaries in his will, “I shall leave you £5,000 on condition that you do not contest the will, but if you do con test it, you shall receive only £5 “. That is an attempt to prevent the beneficiaries from contesting the will. The Government, similarly, is seeking to prevent the States from testing the constitutionality of these measures before the High Court.
– How is it doing that?
– The first step is to impose taxation which will raise £34,000,000 for distribution among the States, on condition that the States do not themselves raise income taxation. The States, in order to challenge the measure, will impose income tax, and, having imposed it, will forfeit their right to assistance from the Commonwealth.
– Could they not challenge the measure without first imposing their- own taxation?
– I doubt it.
– Why not? The legislation is either good or bad on its face.
Sitting suspended from 6.15 to 8 p.m.
– I am not, and cannot be dogmatic upon this matter, but my answer to the question which the right honorable member for Yarra asked me before the dinner suspension is that this is a carefully conceived series of bills, each of which, with one exception, taken by itself, in detachment from the others, appears unexceptionable. It is very difficult to see where any one of them, with the exception of the Income Tax Assessment Bill, taken by itself, could be made the subject of an attack in the High Court. However, the Income Tax Assessment Bill provides that no person should pay income tax to a State until he has paid every penny of federal income tax. It appeal’s’ to me that if a State, not having enacted income tax of its own, challenged this legislation and asked the High Court for a declaratory judgment, the answer would be “Whether or not we give a declaratory judgment, is a matter for our own discretion. You have not shown that you have been injured, or will be -injured. This act, the validity of which you challenge, does not affect you, as you have not enacted income tax legislation “. Therefore, it seems to me that a State could not feel confident that it would have the matter disposed of by the High Court, unless it had enacted income tax legislation. However, I am not attempting to approach, this subject from the legal standpoint. Every honorable member of this House, whether lawyer or layman, has a duty to reject legislation which, in his opinion, violates the Commonwealth Constitution. The Commonwealth Constitution is contained in an act of the British Parliament, but it has behind it the will of the Australian people. In other words, the Australian people willed that there shall be a central organ of Government called the Commonwealth, and local organs. The central organ, being entirely new, was given powers that are embodied in the Constitution, and are exercisable, subject to the Constitution. Most of them are contained in Section 51. With respect to the States, it was unnecessary to improvise machinery, because the old colonial organization was already in existence. Section 107 provided that subject to the Constitution, the States should retain their legislative powers. So in respect of taxation, there were two powers, namely, the Commonwealth power which was granted by Section 51 (ii), and the power which was preserved to each State by Section 107. Never at any time has there been doubt that the Constitution set up the Commonwealth and the States as co-ordinate bodies, neither subordinate to the other, each of them within its own sphere independent. That statement is substantiated not only by early decisions of the High Court, but also by the more recent decision in James v. Commonwealth and even later, the very strong remarks of the present Attorney-General (Dr. Evatt) and Justice Sir Owen Dixon. There is no doubt that the people of Australia intended to set up this body of two coordinate organs, each within its own sphere independent of the other, and indestructible by the other, and the Constitution has been consistently so interpreted, up to the present time.
Now, the question has arisen as to what was meant by “ taxation “ in Section 51 (ii), and the interpretation given is “federal taxation for federal purposes “. So far as I am aware, that phrase was first used in The Coming Commonwealth written by Sir Robert Garran in 1897. The judgment of Sir Samuel Griffith in Sydney v. the Commonwealth, in 1904, also makes his views clear that the taxation power conferred upon the Commonwealth by Section 51 (ii) was one of federal taxation for federal purposes. The Government has admitted that this measure is not one of federal taxation for federal purposes only, because it is proposed in the Treasurer’s words, to raise revenue for the requirements of’ both the Commonwealth and the States. A part of the scheme is that the States shall be coaxed or kicked out of the field of income taxation. If this can be done in relation to income taxation, it can be done in relation to any form of taxation. The States will then become dependent on the bounty of the Commonwealth and may have their internal policies dictated by the almsgiver. When that happens the nature of the Constitution that the people of Australia willed will be destroyed. I do not desire the continuance of the federal system, because I believe in the unitary system of Government. I hope for a constitution which the people of Australia can understand, and the meaning of which does not change every time the composition of the High Court is altered. That is the only reason why I favour the unitary system of government. But the paramount consideration with me is that the people of Australia made the Constitution and they are entitled to have it until they are prepared to change it. If the House desires that the Constitution shall he altered, that desire should be expressed by the Senate and the House of Representatives passing legislation to enable the people of Australia to express their opinion upon the matter. There has never been the slightest doubt as to the co-ordinate spheres of the Commonwealth and the States in respect of direct taxation. Most of what has been said is a repetition or summary of what was written a century and a half ago in the United States of America in Hamilton’s famous letters in the Federalist, Nos. 31, 32, 33 and 34. I quote from Australian Constitutional Law, by one of the draftsmen of, our Constitution, Mr. Justice Inglis Clark, page 89 -
In regard to trie matter of taxation, the legislative power of the Parliament of the Commonwealth is subject to the restriction that there shall not be any discrimination between States or parts of States in the exercise of it. With this exception, the jurisdiction of the Parliament of the Commonwealth with, respect to taxation is unlimited. But the States arc precluded from obtaining revenue by duties of customs and excise, and they cannot impose any other kind of taxation which interferes with the freedom of trade and commerce with other countries, or among the States. Hence the jurisdiction of the parliaments of the States in respect of taxation is not equal in extent to the jurisdiction of the Parliament of the Commonwealth; but, so far as it extends, it is concurrent with and independent of the jurisdiction of the Parliament of the Commonwealth. The free exercise of whatever power of taxation is reserved to the States by the Constitution is absolutely necessary for the free exercise of all the other legislative powers possessed by them, and may, therefore, be properly regarded as necessary to their separate political existence.
The actual phrase “ concurrent “with and independent of “ was that which the draftsman of the report of the Royal Commission on the Commonwealth Constitution used, in reference to the power of taxation by the Commonwealth for federal purposes and the power of taxation by a State for State purposes. The only limitation upon the State’s power discovered by the commission was that 1 the Commonwealth might exhaust the whole field, leaving nothing for the State. That passage in the report of the royal commission is really a summary of the evidence which was given by Sir Robert Garran. To me, it seems indisputable that the framers of the Constitution did not mean to give this Parliament power to drive the States out of the field of taxation that was reserved to them by the Constitution. The manner in which this legislation is framed is an indication that the Commonwealth does not consider that it possesses the power, by direct legislation, to exclude the States. The Commonwealth has declared, in effect, “We shall not say that the States cannot enter the field of income taxation, but we shall do everything in our power to make it impossible for them to enter it”. That is only doing indirectly, by a circuitous method, what the Government believes that it cannot do directly.
Of course, no one can foretell what view the High Court will take of this legislation, and I am not concerned with that point, except to hope that the legislation will be declared invalid. What I am concerned with is my position as a mem-
ber of this House, and the position of this Parliament. We are not justified in voting for legislation which deprives the people of their right to amend the Constitution if they so desire. The people of Australia are those who have the right to say whether State parliaments shall be abolished. Until they have expressed themselves in favour of that constitutional change, the federal Constitution should remain, with all its faults. A unitary system such as that which is contemplated by some honorable members would not be more democratic than the present federal system because it would not express the will of the people. The House would do .well to bear that matter in mind. We have been elected on the basis of the Commonwealth Constitution, one provision of which declares that an alteration may be made only by the affirmative vote of the people. This legislation represents an attempt to circumvent that provision, and to change the whole nature of the Constitution. As I stated earlier, the bill is related not to the_war powers of the Government, but to the war emergency. If it be found that this exercise of power by the Commonwealth is valid, it will be continued after the conclusion of the war, because the same unfriendliness between the Commonwealth and the States will continue. It reminds me of the biological phenomenon called symbiosis, which is “the living together in more or less intimate association, or even close union, of two dissimilar organizations “. Sometimes these are friendly hut, I regret to say, there is very often what is called antipathetic or antagonistic symbiosis. That unhappy condition has developed in the Australian political structure and will continue to afflict us even after the war. I cannot conceive that the Commonwealth Parliament, having established this year or next year that this legislation is valid, will refrain from using the same principle after the war. For those reasons, I cannot support this legislation. In my opinion these bills will have serious repercussions in Victoria, which unfortunately has the bad habit of thinking that the salaries of its employees, are a source of revenue that can be tapped whenever trouble arises. In a financial crisis it proceeds to tax heavily the earnings of railway employees, civil servants, teachers and the like. I am sure that if Victoria finds itself in financial difficulties, it will proceed either to retrench or to deny to public servants the improvements of pay and conditions for which they may legitimately hope. But my main reason for opposing the legislation is that it tends to alter the substance and nature of the Commonwealth Constitution without the consent of the Australian people who created it.
.- On the surface this bill has something to commend it. It preaches patriotism; it predicts slightly simpler taxation; it promises economies. It is only when one delves beneath the surface; when one examines the composition of the recommending committee, the policy of the Labour party and the history of Australian and other federations, that one sees that it is a clever device, unconstitutional, unnecessary, unjust, and designed to further the policy of centralization by destroying those guarantees which made this Commonwealth a federation rather than a unified State. The bill is particularly cunning in that it plans to gain its real objective, not by compulsion - this Government works by pseudo-freedom - but by enforcing quasivoluntary suicide on the States. The bill, as drafted, shrewdly compels the States to accept the Commonwealth proposals, and in so doing to draw the dagger of hari-kiri through those emaciated financial rights which Australian centralizers have so far failed to get. Fortunately, this pseudo - voluntary arrangement may defeat its own subtle ends, for it involves a possibly unconstitutional discrimination between those States which refuse, and those which accept.
The necessities of war would justify this measure if the proposals were really temporary, and if they would create a greater war effort. I realize that the bill is legally limited to the war period, but I also realize that there will always be sufficient conscripted centralizers in caucus, and possibly sufficient shortsighted centralizers on this side of the House from the thriftless States, to maintain these centralized powers once they are established. Of course, the States may secure protection from the courts. It will be very sad if the Government bludgeons them into such an action, but, when they realize what is behind this measure, the States will he justified in taking this course. It is encouraging to know that in the opinion of several leading King’s Counsels, the States will gain protection from the courts. But 1 hope that the Government will remember that action in the courts may cause delay. If the matter goes to the Privy Council the delay may be very long and the result ultimately financial chaos.
Nor is one in any way certain that this bludgeoning of the States will lead to the economies of man-power and money which the Government alleges it expects. The whole history of our federal administration is the building up of expensive centralized departments, sometimes less efficient departments than those of the States. I need only take the colossally expensive failures of the Commonwealth in the Northern Territory as compared with the “progress in northern Queensland and north-western Australia to prove this. As yet we do not know how far this uniform taxation is to he centralized, but I have already received strong protests from taxpayers, who know from practical experience the difficulty of dealing with the central taxation department in Melbourne, as compared with the local branches in their own States.
Then I am not at all convinced that this legislation is either necessary or just. As regards its necessity, I am not convinced that any real effort has been made to meet the States in a temporary arrangement which would leave them their constitutional powers, or to explore the system of per capita payments, or, if the Commonwealth seizes the whole field of income tax, to restore that part of the customs revenue, of which they were legally robbed, to the States. As regards the justice of the legislation, it is obviously far less fair than the Fadden proposals, which did achieve a uniform levy, but which took from the citizens of the thrifty States by temporary loan, and not by confiscatory tax. How these proposals discriminate against Victoria is shown by official calculations that they will cost Victorian taxpayers an additional £4,000,000, an average of £10 10s. each.
Secondly, will this bill really increase our war effort? I doubt it. The central Government is hardly likely to improve our war effort by returning evil for good to certain State governments, which in very many ways - for example, in munitions, in railway services, and in gladly loaning the Commonwealth many of their best administrative officers - have been rendering invaluable help. Nor will this dictatorial legislation act as. a spur to the citizens of the less bountiful, or more thrifty, areas of Australia, when they realize that, contrary to all the canons of justice, there is to be equality in contribution to a common pool and gross inequality in the rake-off.
Then again the proposals of the Government are contrary to the established principles of federal practice. In the United States of America, Canada and Australia, it has been recognized from the outset that a price of federation is for the financially strong areas to contribute to the development of the weak. That policy is applied in the United States of America and Canada. Now we find this extraordinary legislation completely departing from the established federal practice. New South “Wales is to receive £5 10s. a head from the rakeoff, but poor little Tasmania is to receive only £3 8s. a head. The Tasmanian birds have flown up and eaten the poisoned wheat at Canberra and the provision for that State has been raised by 6s. a head. Still, it stands that. Tasmanians are to have only £3 14s. and the people of New South “Wales £5 10s. a head.
The first of the true financial objectives of these proposals, as the honorable member for Bourke (Mr. Blackburn) admitted, is to strangle the .States. I shall refer to that later. The second is to secure all the benefits from an inflated national income, and, in so doing, to rob the States not only of similar advantages, but also of essential requirements. The proposals peg the States’ share of the pool to the average receipts based on incomes for the years 1938-39 and 1939-40, years when the national income and costs were comparatively low. The States will now be expected to carry on at a time when the federal inflationary financial policy of raising wages and so forth is pushing costs to the skies. The result will be crippling economies in essential State services, dismissal of State employees, and a repetition of the chaos that followed the federal freezing of capital, or the rationing of clothing. The Government’s third financial object is to give remission of war taxation to the lower incomes, which command the greater part of the national spending power. Here again the Government will not face, as the British, Canadians and New Zealanders have faced, the real costs of the war. Instead they are persisting with a policy of price-fixing and rationing to remove spending power, and they are spreading ever-increasing confusion. The people are beginning to realize the truth of what I said months ago, that “ Fadden’s fair finance “ would prove preferable to “ Curtin’s coupon queues”. The tragedy about this legislation is that it bribes the public with a promise covering a few months, and blinds them to what will inevitably follow when an extravagant Commonwealth has unfettered powers to rage like a bull in the china shop of income tax.
So far I have been dealing with the obvious features of the bill, but I shall now examine what lies behind it. First, let us look at the committee which produced the plan. “ No committee “, says’ the Treasurer, “ possessed of greater breadth of view for the task confronting them could be found in the whole of Australia “. Not for one moment would I reflect on the integrity of the member? of the committee. I believe that they reported according to their experience and environment. But, human ideas are moulded by experience and environment, and what was the experience and environment of these members? This small committee of three was drawn entirely from the two chief States, and we have yet to learn that the committee sat, or took evidence, in any of the smaller States. Two of the three members came from New South “Wales, where the history of the State Parliament, the proximity of Canberra, and the weight of New South Wales representation at Canberra have made many people unificationist. I wonder what the people of Canada would say if such a committee were drawn wholly from Ontario and Quebec, or what the people of the United States of America would say if it were drawn wholly from New York and Connecticut.
Equally remarkable is the fact that d majority of the committee had already prejudged the case. In November last the honorable member for Robertson (Mr. Spooner) stated in this House that the Commonwealth should use its war-time powers to enforce uniform taxation, and that he anticipated that the change would be permanent.
– I said that months before then.
– The honorable member admits that months before then he was a uniform taxer.
– He admits the soft impeachment.
– Yes. The right honorable member for Yarra (Mr. Scullin) has long been a centralizer. In one of his election campaigns he announced that, if returned to power, he would attempt to give Australia a sovereign Parliament of one House - thus abolishing the Senate, which was established to safeguard the States. In May, 1940, he declared for uniform taxation, although he added the disclaimer that he did not believe in forcing unification by means of finance. Then again, the right honorable member for Yarra has consistently tried to prevent the lower incomes - with the bulk of the national spending power - from making, as in Britain, a direct contribution to the war effort, and we find in these proposals that the smaller incomes in Victoria are protected, and in other States actually bettered, although the middle and higher are to bear an additional crushing tax. So blatant is the report of this pre-biased committee and this bill, which is based upon it, that even the Sydney press has exposed the underlying motives. In the words of the Sydney Sunday Sun -
The Government believes that it has powerful political weapon in New South Wales since its plan means less taxation for all single persons, for most taxpayers with dependent wives, and for all taxpayers with a dependent wife and one or more children.
Once again this Government of centralizers and socialists is using the war as an excuse to force on the country the policy which they want.
I am particularly fearful of these proposals because, when I was in Canada and the United States of America, I examined this problem for the late Mr. Lyons, and reported to him on it. My conclusions were that, in both federations, the central governments had attempted to strangle the local governments by means of finance, and that method, particularly in the United States of America, had proved more effective in creating centralization than had referenda or the taking of constitutional cases to the courts. Not many years ago, for example, Mr. Roosevelt quickly abolished prohibition by informing the States that, until they confirmed his anti-prohibition legislation, they would receive no federal grants. Nevertheless, I found that in recent years the United States of America, and even more so Canada, had seen something of a swing in favour of the local governments. This has been due to a feeling, particularly in Canada, that a centralized body, sitting in a remote city, cannot deal adequately or sympathetically with local requirements. The same opinion is expressed by the socialist, G. D. H. ‘Cole, as regards Russia. He points out that the failure of democracy has been due to its tendency to centralize great political areas, thus destroying the comradeship, friendliness and brotherhood of the small groups which the Soviets have made the central feature of their system. In Australia, federation has followed the same path as in Canada and the United States of America, and the present legislation represents another, and probably the most blatant and dangerous, effort of the centralizers to destroy the federal contract. From the outset, Sir Edmund Barton and other founders of the Commonwealth saw that, in the absence of adequate financial safeguards, cen.tralizers would destroy the federation. They were right, for the Commonwealth has been merciless to the States, which should have been its partners. The constitutional provisions which should have given the States a share of indirect taxation were ineffective. Commonwealth governments ignored section 94 of the Constitution, which should have given to the States a share of customs revenue, and in 1927 a federal government obtained the so-called financial agreement by holding a pistol at the States. Nor lias our Federal Government widely adopted, until the pressure of war made it unavoidable, the policy in the United States of America of delegating authority to the States. For example, in the case of social services, the Federal Government, instead of subsidizing, encouraging and expanding State systems, has built up large, expensive federal departments side by side with those of the States. I admit that centralization may come in spite of the federal contract, and at the fitting stage of national evolution the people of Australia will no doubt take the proper constitutional steps to adjust the federal contract. But, up to the present and in a number of instances during the war, experience has shown that an ambulatory government and chief administrative officers, with secretaries and trunks of papers ambulating about after them, and a small, overworked and over-travelled parliament, arc not yet capable of governing a huge continent. Nation-wide mistakes and muddles, like the freezing of capital, the clothing bungle, and the limiting of interest, are clear proofs of the inadequacy of centralized government. “When we add to these things the delaying of vital service buildings, the stream of contradictory instructions over air raid precautions and the serious muddles over refugees, we have clear indications that, at this stage of our development, the federation should remain a federation until we are certain that the centralized government can adequately replace the States that it now proposed to slaughter by means of finance.
In conclusion, I stress the fact, which was also stressed by the honorable member for Barker (Mr. Archie Cameron), that the suppression of the States will mean the increased influence of New South Wales in the nation and in this Parliament - an influence that is clearly evident in this legislation. The people of Australia are becoming alarmed at certain aspects of that influence. For example, every time that New South
Wales politicians come up from Sydney and indulge in tactics such as publishing secret documents or calling their political opponents Quislings, Fifth Columnists, or jackals, a cry goes up from all decent Australians to preserve those State parliaments in which the representatives of the people can still debate the affairs of the nation without being insulted by gutter abuse and gangster tactics. I oppose this legislation. I oppose it on the ground that it originated from a committee, the majority of whose members were openly pre-biased ; I oppose it on the grounds that it is unconstitutional, unnecessary, and unjust, and that it will not further our war effort; I oppose it on the grounds that it reeks of party politics, and that it is deliberately calculated to destroy, on behalf of certain interests, those guarantees on which our federation is based. In view of these facts, and in view of weighty legal opinions that these proposals are contrary to the Constitution, I trust that the Government will revise its determination to persist in a course of action which must weaken rather than strengthen the national war effort.
. -r-I oppose this measure for many reasons. Ever since this Government has been in office I have rendered to it every possible support, and many times I have voted as a majority of the party caucus has decided, but against my personal convictions. However, on this occasion the principles involved are such as to force me, for the first time since I entered this Parliament, to oppose a measure submitted by a Labour government. We have heard honorable members from this side of the House and exMinisters opposite mouth platitudes about national unity and national solidarity. We have been told that we must at all times take a broad national outlook. We have also seen that the press of Australia has rendered to this Government, and rightly so, the support to which it iB entitled by reason of its success where honorable members who now sit in Opposition failed. Governments of the same political colour <as honorable members opposite were in power for a considerable number of years. What happened?
When Japan struck in December last, the position in Australia was so grave that people living in the northern parts of the continent were forced to make for the south. There was a general feeling of insecurity- as the result of the inaction of honorable gentlemen who now sit in Opposition, .but who, until last year, had been entrusted with the responsibility of providing for the adequate defence of the nation. This Government has earned the support of the press and a great majority of the people, and it has received unstinted support from the industrial and political movements which it represents. It has accomplished much since it. has been in office, but,, on Friday last, national unity was somewhat shaken by the methods which it employed for the purpose of securing a certain object. We have been informed that the object of this measure is to bring about uniformity of taxation. I offer no objection whatever to the principle of uniformity of taxation or to the granting of unlimited powers to the Commonwealth Parliament; but I offer strong objections to the method the Government has adopted to attempt to secure uniformity. Like the honorable member for Bourke (Mr. Blackburn) I believe the proposed methods are unconstitutional. I am not favorable to direct action in a matter of this kind. The Commonwealth Constitution makes provision for such alterations of its provisions as may he desired by the people. In my opinion, these proposals will alter the Constitution substantially, for then ramifications will be far-reaching; hut the procedure the Government is adopting is not constitutional. It would be comparatively easy for the Government to seek the consent of the people to the alterations which it is now proposing, but it has chosen to adopt a different method of enforcing its will. Both the Treasurer (Mr. Chifley) and the Prime Minister (Mr. Curtin) have stated that these bills do not provide for the taking away from the States of their taxing powers, but there can be no doubt that the proposed legislation makes provision for the transfer from the States to the Commonwealth of all income taxation records and staffs. How could the States exercise their taxing powers if they had been deprived of the requisite machinery ?
If the Government desires to achieve solidarity in Australia it should take all possible steps to ensure that it has the support of the people in the legislation which it introduces to Parliament. In my opinion, it is most regrettable that, with the Japanese at our very gates, the Government should have introduced a proposal of this kind in the face of such . strong public opposition. If such legislation may be passed under the Commonwealth Constitution as it stands, the sooner the Constitution is scrapped the better it will be for the country.
I wish to make a few observations on the possible political repercussions of this legislation. This Government, as we all know, has only a slender hold of office. ‘ If I could be sure that this Government would remain in office indefinitely, I might not feel so strongly upon ‘this subject, but I visualize the possibility of an anti-Labour government coming into office again, and the possibility is not pleasant to me. Queensland has had a Labour government in office since 1915, with a break of only three years, and I can imagine what would happen if in the future a Queensland Labour government had to negotiate on income tax matters with an anti-Labour Commonwealth government. If a State Labour government had, metaphorically speaking, to plead humbly to an anti-Labour Commonwealth government for help, it would get short shift. For many years the people of Queensland, led by Mr. Forgan Smith and their representatives in this Parliament, have requested that money should be made available for the construction of defence works in the northern parts of the State. Some money was provided for unemployment relief works and for certain developmental projects, but every effort to obtain funds for defence works failed until comparatively recently. That shows the treatment Queensland has received and might expect from antiLabour governments. I have in mind also that, after the war, serious reconstruction problems will face the country. Queensland, with a smaller population than either New South Wales or Victoria, would be placed in a most unhappy position in any submissions for funds for reconstruction purposes if its appeals had to be made to an anti-Labour Commonwealth government. It may be that a period of severe economic stress will follow the war, and I am not willing to place in the hands of the Commonwealth Parliament wide powers in relation to finance, which might be applied by an anti-Labour government in such a period. I do not consider that the passing of these measures is necessary to the prosecution of the war. Even if some such step as this be necessary, I do not think that the Government has explored all the avenues open to it for obtaining funds. The approach to the State Premiers in relation to these matters was unfortunate. There could have been more give-and-take by both Commonwealth and State authorities. However that may be, the placing of these vast powers in the hands of the Commonwealth, and the possibility of the exercise of them by anti-Labour Commonweal th governments, are too dangerous to the under-developed States for me to give my consent to the proposals. It must be obvious to all honorable members that the State quotas which the bill purports to fix may be reduced, although State expenditure may increase. Such a happening would lead to calamity in the States concerned, for it would mean that the State governments would have to reduce staffs or reduce wages. If a hostile Commonwealth government wished to smash a State Labour government, it would have a fine weapon in its hands for the purpose if these measures were placed on the statute-book. Although provision is made in the Commonwealth Government’s plan for a State government with increasing expenditure to submit a case to the Commonwealth Grants Commission for a review of its reimbursement, I cannot believe that a State like Queensland, with a Labour Government, would be likely to receive favorable consideration.
– What happened to the Labour Government of Tasmania this week?
– Apparently that Government considered that its quota was too low. Possibly it has discovered also that its expenditure is already rising. But it was able to make its appeal to a Commonwealth Labour Government. Such an appeal from a State Labour go vernment to a Commonwealth antiLabour government would receive very little consideration.
The industrialists of Queensland are fearful of the possibilities that might follow approval of a proposal of this kind. We are dealing at the moment with uniformity of taxation, but we may be asked before very long to deal with uniformity of arbitration. In Queensland, as I have said, a Labour Government has been in office since 1915, with a break of only three years, and wages and conditions of workers in that State have been fixed by State tribunals. Our industrialists are apprehensive of what might happen if the arbitration power should be transferred from the State tribunals to the Commonwealth Arbitration Court. In that event, wages in Queensland might be reduced to the low levels that apply in Victoria and in some other States.
I believe in uniformity in taxation, although my observations on this bill might seem to be antagonistic to the principle. I also believe in unification. But a proper method has been provided for securing such reforms. The Government could easily provide for the taking of a referendum on either of these proposals. Such a referendum could even be taken by post if necessary. It is significant to me that political parties opposed to this Government are supporting these measures. Why are they doing so? I do not believe that it has anything to do with their support of the war effort. Their attitude is clue to their belief that the adoption of uniform taxation, measures will L ad to a. reduction of taxation of large interstate companies. This probably accounts also for the support that the anti-Labour press is giving to the Government’s proposals. The Treasurer has informed us that the adoption of this plan will result in a reduction of staffs. At present State officers in most States collect income tax for the Commonwealth Government. Under the new arrangement, the Commonwealth will take over a part of the taxation staffs of the States. What will happen to the remaining State officers? It is possible that they will be thrown on to the labour market. So far as I can judge, the same number of officers will be required to do the work, whether the Commonwealth or State Governments are responsible.
I shall now deal briefly with the constitutional issues that will arise as the result of this legislation. The Commonwealth proposes to achieve uniformity of taxation by methods which I believe to be unconstitutional. This afternoon the honorable member for Barker (Mr. Archie Cameron) inquired as to how many legal opinions the Government had secured. All sorts of rumours are current. It would be interesting to know whether or not any opinion received by the Government is to the effect that these measures are unconstitutional.
– I suspect that the Government’s opinions, like its supporters, are not unanimous.
– They were in caucus.
– That is not true.
– It is true.
– Caucus was unanimous only in regard to the principle of uniform taxation. These bills were never discussed by caucus. The opinion has been expressed that this is not the time for constitutional quibbles. If the Government can flout the Constitution, as it is attempting to do in these measures, the Constitution might as well go by the board. That might be a good thing. Whether or not the time is appropriate for constitutional quibbles, the principle involved is too big to be brushed aside. The Government’s proposals envisage the surrender by the States of their taxgathering powers. By reason of their dependence upon the Commonwealth for finance, the States will have to bring their policies into conformity with the policy of the Commonwealth. Failure to carry out requests of the Commonwealth may result in the reduction of their quota.
During the last war the Commonwealth, for the first time, entered the domain of income tax and estate duty. It then said that it would remain in those fields only for the duration of the war; but instead of having vacated them, it is taking increasing toll from the taxpayers. This bill, if carried, will mean that the system will continue for ever.
I desire to make a further brief reference to the constitutional aspect of the measures. As to the sovereignty of the States, Quick and Garran, in Commentaries on Australian Constitution, at page 927, state -
It appears that the Imperial Parliament has vested in the united and indivisible people of the Commonwealth some of the highest attributes of sovereignty, limited only by its paramount supremacy; that in the Constitution there is a division of that delegated sovereignty into two spheres or areas, one being assigned to the Federal government and the other to the State governments; thai each government is separate and distinct from the rest; that the Federal government cannot encroach on the sphere or area of the State governments and the State governments cannot encroach on the sphere or area of the Federal government.
– They can overlap.
– In regard to taxation, yes.
– They do now.
– The framers of the Constitution had in mind the retention of the dual system of government, giving to the Commonwealth the right to raise taxes for Commonwealth purposes, and to the State governments the sovereign right to raise taxes for State purposes. The Commonwealth has not been given the right to raise taxes for both Commonwealth and State purposes. It proposes to do so under this legislation and that is absolutely foreign to the Constitution. At the time of federation, the States possessed powers that were completely unrestricted. These have been delegated to them by the Imperial Parliament, and enabled them to legislate for the peace, welfare and good government of their people. Under the Federal Constitution, exclusive taxation powers in relation to excise and customs duties were conferred on the Commonwealth. The power of the Commonwealth Parliament to make laws for the peace, order and good government of the people of Australia is conferred by section 51 of the Commonwealth Constitution. The provision in relation to taxation reads -
The Parliament shall, subject to this Constitution, hare power to make laws for the peace, order, and good government of the Commonwealth with respect to -
Taxation; but so as not to discriminate between States or part? of States.
There is no doubt that that is one of the grounds on which the constitutionality of these measures will be tested. If the Commonwealth takes 50 per cent, of the revenue raised in Queensland, and 70 per cent, of the revenue raised in Victoria, the question will arise as to whether or not there has been discrimination between the States. The High Court will decide whether or not these measures are unconstitutional. It may, in its wisdom, decide that they are constitutional; but the indications are that what the Government proposes will be declared unconstitutional. Giving evidence before the Royal Commission on the Constitution in 1929, Sir Robert Garran said, at page 66 of the report -
By Mr. Duffy. - Is it not (i.e. taxation) a concurrent power with the States?
The Commonwealth power is to raise money for the Commonwealth. The State power is to raise money for the States. There are two separate powers, although they hit the same set of people.
By Mr. Nicholas. - Could it say to the States, “You shall not tax incomes; we want to have the whole field to ourselves”? .1 do not think so.
By the Chairman. - What is the reason for that view?
Because the power ia to make laws for the peace, order and good government of the Commonwealth with respect to taxation. I think that would be interpreted as meaning for the peace, order and good government of the Commonwealth as a whole with respect to taxation. I mean that it refers only to taxation for the purpose of the Commonwealth revenues, and it does not affect taxation for the purpose of State revenues. That is another subject-matter of legislation altogether. Therefore, we can impose a tax, but we cannot say that a State shall impose a tax. All we can do is to occupy the field in the sense of taking all that there is and leaving none for the State to take.
– That hardly supports the argument of the honorable member.
– The Commonwealth can take all and leave nothing for the State, but the money collected must be for Commonwealth purposes. In The Commonwealth and Attorney-General for the Commonwealth against the State of Queensland and the Commissioner of Income Tax (Queensland), 1920, 29 C.L.E., at page 1, a decision was given which was reviewed in a later case by
Mr. Justice Evatt, who, in disagreeing with it, made the following remarks : -
But the outstanding feature of the case was not that the Commonwealth was seeking to bind third persons generally, but that it was making an extremely audacious attempt to set at naught the great constitutional powers of each State to impose taxation on all its citizens for the maintenance of its internal peace, order and good government.
– .”What application has that to the bill?
– The honorable gentleman interjected earlier that the taxation powers of the Commonwealth and the States may overlap.
– They do.
– They do; but the Commonwealth cannot collect taxes on behalf of a State. The State acts in its own right, and cannot be prevented by the Commonwealth from exercising that right.
To sum up: the opposition to the proposals of the Commonwealth, contained in these measures, is based on the following grounds : -
State and its stability upset, in that it would not be able to budget with any degree of certainty from one year to another.
Whilst co-operation between the States and the Commonwealth is essential to the prosecution of the war, it is most undesirable that, under the cloak of war necessity, a measure should be introduced which, in effect, would destroy selfgovernment in the States. A State government, charged with the responsibility of administration, is the best authority to decide what tax its citizens ought to pay for State purposes, bearing in mind the principle of taxation always observed by the Queensland Government, that the rate of tax should be based upon capacity to pay. Taxation should involve as little hardship as possible, and all the people should be treated fairly and justly. A State such as Queensland, which is mainly a primary-producing State, should have the right to say what taxation its people ought to pay, having regard to the nature of the State itself, the development of its resources, and the needs of its primary producers. Queensland is different from such States as Victoria and New South Wales, which have stable secondary industries. No good arguments have been advanced for the drastic change which this legislation, would effect - a change unique in the annals of federation, and one that would alter the very nature of the federal pact. If such a change be effected it will inevitably lead to dissension, not only between the Commonwealth, and the States, but also between the States themselves, and that at a time when unity is essential for the safety of the nation. I do not believe that these arbitrary powers should be taken by the Commonwealth. It is for the people of Australia to say whether or not State Governments should be abolished. This Parliament has no mandate from the people to abolish them. Let us follow constitutional methods, and allow the people to make the decision.
– I rise to support the Government’s proposal for uniform taxation. The honorable member for Kennedy (Mr. Riordan) has regaled us with some legal technicalities, but I do not think that the House is any better informed regarding the constitutional position than it was before he began. We are considering what is best to be done in order to enable the Government to prosecute the war, and the war is not a conflict between Commonwealth rights and State rights but is against the Axis powers who, if they triumphed, would leave us with no rights at all. We have no desire to harass Victoria or South Australia or Queensland or New South Wales. In the platform of the Labour party, there is a plank providing for unification, and this proposed legislation goes some way towards it. I do not subscribe to the Labour platform, but I support this bill, because I believe it to be necessary. I hope that the bill, which provides for the imposition of uniform income taxation throughout Australia, will be passed by the Parliament. The present Opposition put forward proposals to achieve the same end, although the method was different. I supported the principle then, and I support it now. I realize that income tax in some States is not so heavy as in others. I come from one of the more heavily-taxed States, where the people will obtain some temporary relief under this measure. The citizens of States like Victoria, where taxation has been kept as low as possible, will contribute more to the country’s war effort, and that is something of which they might well be proud. I believe that uniform taxation is just and logical. I have always believed in it, and while it is more necessary now than ever, it was always desirable. Honorable members have said that this proposal is unconstitutional, but we are not called upon to concern ourselves with that aspect of the matter. No doubt the Government has obtained legal advice. However, I am prepared to support any measure which the Government brings down in order to make this legislation constitutional. I do not agree that this proposal reeks of party politics. I am convinced that at a time like this party politics take a secondary place in the minds of honorable members. This is a war-time measure which provides for the amalgamation of State and Commonwealth income taxation for the period of the war, and for one year thereafter. Every effort was made by the last Government and by this one to induce the Premiers to agree to a system of uniform taxation. They would not agree to the Commonwealth’s proposals, but had none of their own to put forward. I do not feel called upon to oppose this bill because it may constitute a threat to State rights. Nothing in this bill threatens State rights so seriously as our enemies are threatening both State and Commonwealth rights. They would take everything from us if they could. The only thing that matters to-day is the winning of the war. Finance plays an important part in our war effort, and this is a proposal for the scientific and equitable raising of revenue, under which the citizens of all States would contribute equally to the cost of the war. It is hoped to raise an extra £12,000,000 or £15,000,000 under this scheme, and that is a powerful argument in its favour.
– This scheme is not necessary in order to raise that extra revenue. Out budget provided for the raising of even more than that.
Mri BERNARD CORSER.- In our budget the same results were to be achieved by a different method, although the principle was the same. In both cases a system of uniform contribution was aimed at a reform which is desirable both in war and in peace. The honorable member for Boothby (Dr. Price) said that the Government’s proposal was unconstitutional, but unfortunately he neglected, in Eis brief and instructive address, to tell us why. The honorable member for Boothby declared that the uniform tax, imposed as a war-time measure, would never be repealed, and that the States would forever be bound by this proposal. I cannot accept that contention, because the Prime Minister has assured the House that this legislation wall remain in force for the duration of the war and twelve months thereafter. The honorable member also endeavoured to draw a red herring across the trail by reminding the House that the Commonwealth had not returned to South Australia that portion of the excess Customs revenue to. which, he said, the State was entitled. Long ago that argument was worn thread-bare in tariff debates, and will not win support at this moment. The honorable member for Boothby also considered that these measures would not ba of substantial value to the nation, but would have a most serious effect upon, the economy of South Australia. I represent a State which will derive some benefit from the proposal of the Government.
– Is that why the honorable member is supporting the bill?
– No. As a counter to the speech of the honorable member for Boothby, I propose to show that taxpayers in Queensland will benefit from the introduction of a uniform income tax. Under the Commonwealth plan, income tax collected in Queensland will total £16,500,000, and of that amount the State Government will receive as compensation for abandoning the income tax field, nearly £6,000,000. Thus the Commonwealth will obtain approximately £10,500,000, or £10 6s. 8d. a head of the population.
– There is some disparity between the figures mentioned by the honorable member and those given by the Premier of Queensland.
– My figures were supplied to me by the Prime Minister. The net contributions to the Commonwealth in other States will be as follows:- New South Wales, £14 7s. 3d.; Victoria, £16 5s. 3d.; Queensland, £10 6s. 8d.; South Australia, £11 6s. Id.;
Western Australia, £11 Is. id., and Tasmania £11 3s. lOd. The following table compares the taxes that are now paid on income from personal exertion by a person with a dependent wife and one child in Queensland, with the amounts that will be paid upon the adoption of the uniform tax: -
There will be similar reductions on all other incomes. With the introduction of the uniform income tax, Victorian taxpayers will make increased contributions to Commonwealth revenue. In the past, Victoria has been satisfied, under good government, to impose taxation most prudently in order to encourage people to invest in industry, and thereby create additional employment. In war-time, however, Victoria must expect to make a greater contribution to Commonwealth revenue, and personally, I am confident that the taxpayers will be pleased to bear their share of the burden in the knowledge that the money will be utilized in the war effort. The State Government has no good reason to complain, because Victoria has derived considerable advantage from the fiscal policy of the Commonwealth, and the enormous expansion of war industry during the last two years. Of the total expenditure upon the manufacture of munitions, the greatest proportion has been in Victoria. From the wages that have been paid to munition workers, Victoria has derived substantial benefit. The tariff protection which the Commonwealth, not the State Parliament, granted, has enabled Victoria to establish great secondary industries. Good luck to Victoria! I have consistently supported the extension of the fullest measure of protection to Australian industry in order to enable it to manufacture articles that otherwise would be imported. Having taken advantage of the fiscal policy of the Commonwealth, the people of Victoria were in a position, on the outbreak of war, to seize a big percentage of the armament and munitions work. Compared with the prosperity that war expenditure has brought to Victoria, the increased contribution that the State will make under the uniform tax proposals is a mere pittance. Victoria is not justified in contending that its present prosperity has been brought about by wise State administration. It has been created solely by the war, and the State Government has no legitimate claim to the increased revenues from that industrial expansion. The money must be diverted to Commonwealth revenues for the conduct of the war, and honorable members should disregard pettyfogging State interests that seek to obstruct this plan. In this period of unprecedented crisis, we must organize, not only our fighting forces, but also the total resources of the Commonwealth, in order to save Australia from the invader. Let us abolish the narrow idea of State boundaries, and jealousies between the States, and adopt the principle of one people, one Parliament, and one destiny. Until we do that, the hope implicit in “ Advance Australia Fair “ will never be realized. Personally, I admire Victoria, which, under good government, has taxed its citizens most prudently in order to encourage industry.
– That is good government.
– I congratulate Victoria upon having in peacetime adopted that policy. However, in war-time, the State must be prepared to make a greater contribution to Commonwealth revenues for the purpose of meeting the mounting expenditure on the war effort. The principle of uniform taxation is to he commended. The Fadden Government endeavoured by other means to introduce it, but its proposal relating to post-war credits was rejected by a majority of honorable members of this chamber, and the Government went out of office. In my opinion, uniform taxation will enable the Commonwealth to increase its expenditure upon the production of armaments and munitions, and for that reason the proposal is a means of enabling us to resist those who desire to wrest Australia from us. I hope that in committee honorable members will endeavour, in a national spirit, to remove some of the anomalies in the bill.
– The Government might appoint another . committee to consider the matter.
– A committee would be of no value unless it included the honorable member for Barker, and I have not heard his name mentioned for the appointment.
– An honorable member representing a Queensland constituency might be appointed.
– Queensland is prepared, in a graceful spirit, to make its contribution under uniform tax proposals. Opponents of the bill must realize that in war-time people must expect to make sacrifices. If any hardships be imposed upon them by this legislation, they will not be comparable with those which are borne by members of our fighting forces. I concede to honorable members who are gibing that Queenslanders will benefit from this legislation that the position of that State will be a trifle brighter, and I only hope that the position of our lads who are fighting will be as bright. I am satisfied that before bringing down this legislation the Commonwealth Government did everything possible to secure the assistance of the States. It even sought from the States some suggestion which would lessen their opposition to the Government’s plans. The Commonwealth endeavoured to coax the States to state their reasons for their opposition or to submit an alternative proposal. The only result was a statement that the Commonwealth proposal ran counter to State rights. State rights ! We are fighting now to preserve national rights and the rights of the British Empire and all members of the Allied cause, not such trifles as State rights. Honorable members might as well make speeches in defence of the rights of hospital boards or school committees. The sooner that members of this Parliament and the people realize that the Commonwealth alone is entrusted with the defence of the country the better will be our effort in this war. The fighting of the war has to be financed. On it £515,000,000 has already been expended and the programme for this year involves the expenditure of a further £360,000,000. Next year the need will be greater still, and by means of this legislation the Commonwealth will be able, if necessary, to increase it on a basis of uniform taxation with one taxing authority in place of seven. Whatever one’s earnings may be, the tax imposed, thereon will be the same whether one lives at Cape York or Melbourne or elsewhere. The Government has generously offered to return to the State governments the amounts of money which they would have collected had the right to impose income tax not been stripped from them - stripped because of the national emergency and the advance of the enemy! The danger is here to-day and we must deal with it.
.- I support the bill, and in doing so I am called upon to say something about our own supporters. Only three weeks ago our party met and came to a unanimous decision.
– Unanimous ? What will the Whip say?
– Yes, we reached a unanimous decision on this matter. There was no opposition. The question was carried on the voices. But, since then, the Premiers have met and we find that opposition is to come from Queensland members. It appears that the Premier of Queensland, Mr. Forgan Smith, is filling the role he occupied on a previous occasion - that of dictator of the Labour party of Australia. I remember a referendum being held in 1937. After Queensland members had committed themselves to abide by the Parliamentary Labour party’s decision to oppose the referendum, Mr. Forgan .Smith arranged for the Queensland Central Executive to instruct members from that State to vote for the referendum proposals. That meant asking them to vote against their own party in Parliament under threat that their endorsements would probably be withdrawn. The Deputy Leader of our party in his second-reading speech committed himself to oppose the referendum. He was told in no uncertain terms, “You had better go back on your tracks or your endorsement as a Labour candidate will be withdrawn “. I have heard about the dictatorship of a certain individual in New South “Wales, hut his dictatorship never extended to interference with the members of the Commonwealth Parliament. We had the spectacle last week of the president of the Australian Labour party meeting honorable members from Queensland in this building.
– He was invited down.
– Never mind whether he was invited or not. The opposition expressed to-day by the honorable member for Kennedy (Mr. Riordan) should have been stated in the party room. He was present when the proposals were put before the party.
– He never had a chance.
– He had every chance. The honorable member is trying to excuse the honorable member for Kennedy and himself. The speech of the honorable member for Kennedy was the worst he has ever made. I do not believe that he spoke from his heart, for at heart he is in accord with his party’s policy, but the dictation of the Premier of Queensland has made the honorable gentleman swerve from his beliefs. The dictatorial attitude of the Premier of Queensland is similar to that which he adopted when a referendum was submitted to the people at the time of the 1937 general elections.
– That is unfair.
– It is not at all unfair. It is time that we had a show down and that the policy of the Australian Labour party was obeyed by its adherents. The 1937 referendum provided an amazing spectacle, for, owing to the attitude taken up by Mr. Forgan Smith, we had the leader of our party remaining at his home in Cottesloe unable, because of the split in the movement, to take part in the campaign. The Premiers of the States have dictated, not only to this party, but also to the previous Commonwealth Government. It was because of the pistols drawn by the Premiers at a conference of Commonwealth and .State
Ministers that the Commonwealth was forced to hand over to the administration of the States certain vital features of war policy. For instance, the administration of national emergency services has been handed to the States and an unholy mess has resulted from different States applying different policies. We have “ brown-outs “, ‘* blackouts “ and “ half -outs “. Again, as the result of representations made by the Man-power and Resources Survey Committee offices of the Department of Labour and National Service were established in order to provide man-power for our various war industries. The States complained that this was entrenching upon State instrumentalities such as the Departments of Labour and Industry, and . they set out to sabotage the new federal department. The Queensland Government refused to allow State servants to be interrogated in order to help the department, and ultimately requested to be allowed to administer the work through the Labour and Industry Department. That was finally conceded. Now, on ;this question of uniform, taxation, opponents in our own ranks are cutting across their own policy to which, whether they be members of State legislatures, Ministers or members of the rank and file, they are pledged. They have signed the same pledge as I have signed. I direct their attention to the fact that the federal platform and objective of the Australian Labour party includes under the heading of “ Methods “ the following : -
Amendment of the Commonwealth Constitution - (») To invest the Commonwealth Parliament with unlimited legislative powers and authority to create (or re-order) State or provinces with delegated powers.
If that does not mean unification I do not understand the word. This proposal is for uniform taxation. It is a step towards that goal which we wish to reach. I do not believe that federation would have been’ brought about if the people had not been led to believe that the formation of a Commonwealth Parliament above the twelve Houses of Parliament that they then had would mean, not only the abolition of State Governors, but also, ultimately, State parliaments. A predecessor of mine in the Hunter constituency, Australia’s first Prime Minister, the late Sir Edmund Barton, declared in a speech at Maitland that that would be the outcome of federation. The same statement was made in other parts of Australia by other supporters of the federal system. The Australian Labour party subscribed to the policy implied in the statements made to the Australian people when they were being persuaded to unite in a federal system. It is admitted that for some years it might hare been difficult to administer this vast continent through one parliament, but in the last decade conditions have changed and, whereas in the early days it may have taken anything up to fourteen days to travel from distant parts of Australia to the Seat of Government, the most remote place in this country can now be reached by air in less than twenty hours. Australia is now a small place, and it has a popula-ion of only 7,000,000 people. So there is no justification for having so many taxation authorities as we now have, seven in all. It is tragic to compare our seven parliaments with the one parliament in countries with populations of 40,000,000 and more. One House of Parliament should suffice for us. I have often advocated that. I have laid stress on the costs involved to the taxpayer in maintaining State parliaments. It is easy to get plaudits when you speak in favour of the abolition of State parliaments, but immediately you leave the platform you know that you have raised the ire of State parliamentarians, because they say, “It is all right for you to advocate the abolition of State parliaments. You have a job. But what about us? “ That is the whole crux of the trouble. It is the same in the trade union movement. Before being elected to this Parliament I was a coal-miner. In 1927, I was sent out to try to organize one union for the coal-mining industry. That arrangement would have been more economical and more efficient. But the officials of the small craft unions were opposed to the proposal because they feared that they would lose their jobs. Most of us are afraid to face the State members of Parliament on this problem, but I do not care whether I lose my seat in this House or not so long as this reform is brought about. I agree that it would be useless to try to fool ourselves that the country could be governed efficiently by one Parliament of the same size as the present Commonwealth Parliament. I understand that in most federal electorates there are approximately five State electorates, and I have been told that the Commonwealth electorate of Kalgoorlie contains fifteen State electorates. Our system of government would be far more economical and efficient if the States were abolished and each Commonwealth constituency were divided into three so that the membership of this chamber would be trebled. The country would be better governed under that system than under the present arrangement with each State pulling against the others and, on this question, all States combining against the Commonwealth authority. We need money to prosecute the war, and we could obtain it more efficiently by co-ordinating our taxing services under one authority. J congratulated the Leader of the Opposition (Mr. Fadden) when, as Treasurer in a previous government, he made a proposal somewhat similar to this. It is anomalous that most of the Premiers who oppose the proposed system of uniform taxation are pledged to a policy of unification even to the abolition of State Parliaments. We should not ask the Premiers whether they favour a uniform taxation system, because we know that the people of Australia are in favour of the proposal. They are ripe to have the question submitted to them, by means of a referendum, in a clear and concise manner. They should not be fooled with “ hiffalutin “ language but should be asked straight out, in the plainest language: “Are you in favour of the abolition of State Parliaments?” I have no doubt what their answer would be. The Commonwealth Government is showing to the people of Australia and to other countries that, at the time of the nation’s greatest crisis, one government can direct the affairs of our country. We should have the courage to ask the people to agree to the abolition of the States. One of my predecessors in this Parliament got himself into trouble because he supported the Bruce-Page Government in the referendum which was taken in 1925. It is unfortunate that the Labour party was split on that occasion as it has been split to-day. I believe that in 1925 the people would have voted in favour of the proposals submitted to them had not some of the members of the Labour party twisted on the then leader, Mr. Charlton, who was my predecessor in the representation of Hunter. Honorable members on both sides of the chamber agree that this should not be a party question. Therefore, the people should be asked squarely, without the introduction of political side issues, whether they desire to have not only a uniform system of taxation hut also a central system of government, as was promised to the nation 42 years ago. To-day the States are practically “on the bum”. They have only what the Commonwealth gives to them by way of hand-outs. Most of the Commonwealth’s defence work has been handed over to the States, which have frequently rationed it out, although that was not intended by the Commonwealth Government. We have in our Works Department Commonwealth servants who have been employed parttime for many years. They have never had many opportunities to advance themselves, and now they have even less chance of obtaining promotion because defence work is being performed by the States. That is wrong. The Commonwealth should have endeavoured to build up its own services. Had it done so, it would not now have to rely so much on the States. The honorable member for Kennedy (Mr. Riordan) and some other honorable members from Queensland have apparently submitted to pressure brought to bear upon them by one individual from that State. They should remember that the last triennial conference of the Labour party resolved that no State executive should have the right to instruct members of the Federal Labour party on matters that come before the Commonwealth Parliament.
– We have not been instructed.
– The president of the federal executive of the party, who presided at the conference, was also the Queensland emissary who came to Canberra to hold a meeting with Queensland members of this House. I do not know what will happen to him when the federal executive of the Labour party meets next. He has contravened s resolution of his own party and has endeavoured to coerce Queensland members of Parliament into following a course of action which is opposed by the party. It is a great pity that some of them have yielded to his demands, although they said, before their meeting with him, that they would not be dictated to by Mr. Forgan Smith or anybody else from Queensland. The people should be consulted on this matter as soon as possible. I asked the Prime Minister to-day whether he would consider taking a referendum on the subject of uniform taxation. He said that the Government had no desire to amend the Constitution. I know, and the right honorable gentleman knows, that the Labour party is keenly desirous of amending the Constitution, and the present is the opportune time to do so. We have demonstrated to the people what the Commonwealth Parliament is capable of doing. I hope that the Government will take its courage in its hands and submit the question of unification to the people. I am sure that they will not think along narrow State lines, as many of us have thought and talked to-day. I have at least endeavoured to approach the subject along national lines. Let us all be Australians from one end of the land to the other, as my great predecessor said was the intention of federation. We do not recognize any State differences in the enlistment of our sailors, soldiers and airmen. From whatever State they come, they all wear the same insignia. We are one people; we have one destiny; and, if we take a referendum, I am sure that the people will demand one Parliament.
– I was astonished to hear the honorable member for Hunter (Mr. James) say that he was endeavouring to view this subject nationally. It is the first time since I came into this Parliament that I have known him to consider anything beyond the boundaries of his electorate. I appreciate the attitude of the honorable member for Kennedy (Mr. Riordan) and the courage with which he has attacked this problem. The honorable member for Hunter was most unjust to him, because the honorable member for Kennedy told me at least five weeks ago of the attitude that he intended to take on this matter.
– That was before the caucus meeting.
– That is so. I wish that I could bring myself to believe that the proposals now before the House are necessary for the successful prosecution of the war. If I could do so, I should have no hesitation in supporting them, but, after hearing the speeches of some supporters of the Government, I am convinced that this measure merely represents another step in the Labour party’s plans for unification. This system of uniform taxation will take us about four-fifths of the way to unification. I am glad that the honorable member for Hunter has let us know where he stands. At least he was honest. However, I assure the honorable gentleman that the result of a referendum on this question would be different from the result which he envisages. I speak with conviction about the attitude of the smaller States. The honorable member may be able to speak with some authority about New South “Wales, because that State has always advocated unification since I have been interested in public life, but I know that any unification proposal would be soundly defeated in Western Australia and South Australia. I have no doubt that, even at the present time, the people of those States would refuse to grant the powers that are sought by the Government in this measure, because of their fear of unification.
The Government has some justification for seeking means of taxing the enormous amount of money that is circulating throughout Australia to-day as the result of war conditions. However, there are fairer means of doing so than are proposed. The methods of approach to this subject both by the Prime Minister and by the State Premiers has been most unfortunate. The State Premiers could have done much more than they have done to help the Commonwealth. For instance, when the Commonwealth suggested that there should be a return to the taxpayer of taxes in excess of 18s. in the £1, the States could have legislated immediately to relieve the position of unfortunate people in some States who to-day are paying considerably more than 20s. in the £1. However, the failure of the States in that regard does not encourage me to take away from them their entire taxing authority in respect of income. If a State’s power to tax be taken away, its power to govern also will be taken away. In fact, in such an event, a State will be left with less power than is possessed by some local governing bodies within a State, which at least have power to raise sufficient revenue to enable them to perform their allotted functions.
– This plan applies only to income tax.
– That is so, and that brings me to the point that there is no equity whatever in this proposal. Taxpayers in the various States have to meet imposts of varying kinds. In some States the land tax is heavier than in others. That remark also applies to estate duties, licence-fees of one kind and another, and other imposts. In some States, practically half the revenue is raised from sources other than income tax. In these circumstances, how can any honorable member expect that equality of sacrifice will be secured by approving of ‘this plan? My view is that, by adopting this plan, we shall place a premium on extravagance. In the last two years, the States in which considerable war expenditure has been incurred have enjoyed greatly increased revenues. This has been accompanied by a reduction of responsibility. That is not the position in Western Australia, where there has been little war expenditure. It appears to me that the Government’s plan favours New South Wales. In consequence of the enormously increased purchasing power of the people of New South Wales, the Government of that State will enjoy a surplus of nearly £2,000,000 in this financial year. Probably in the next financial year the State surplus will be double that amount.
– Victoria has enjoyed a much greater advantage from war expenditure than has New South Wales.
– That is because the men of Victoria have remained at work, whereas in the early days of the war, at least, when munitions and supplies of one kind and another were urgently needed, the men of. New South Wales went on strike day after day, week after week. I do not begrudge Victoria the prosperity it is enjoying owing to the war, because the men. of that State have done a magnificent job.
This proposal is not the product of the last few weeks, nor has it come into public prominence only since the war has approached our shores and since Japan has become our enemy. On the 1st October last, when speaking on the budget presented to Parliament on the 25th September by the then Treasurer (Mr. Fadden), the present Prime Minister (Mr. Curtin), who was then Leader of the Opposition, referred to the subject. I quote the following passage from Hansard of the 1st October at page 613 :-
– The right remedy for having seven taxing authorities is to substitute one taxing authority.
– Give us the practical remedy.
Mr. CURTIN ; The Government, of which the honorable gentleman is the leader, is in charge of the country at this juncture. It could take the requisite steps, if it had the courage to do so.
– What steps?
– The steps to bring about one taxing authority in Australia.
– We were at war at that time.
– I said that at that time the war had not approached our shores and that Japan had not become our enemy. The Minister for Home Security (Mr. Lazzarini) should not try to put words into my mouth. In my view, this is the first step towards the abolition of the States. There is a good deal of party politics in this proposal and very little of war effort. The generosity of the Government in the last fortnight does not lead me to conclude that it is finding it difficult to finance the war. In any case, we are told that an amount of ?12,000,000 will be’ added to the Government’s revenue from income tax if this plan be approved and that sum is small in comparison with our estimated war expenditure for the coming year of ?360,000,000. For the reasons I have given, and particularly because this whole plan, reeks of party politics, I am opposed
– I cannot approach this subject without remembering that I was a member of the Senate for six or seven years. A particular duty of the Senate is to safeguard State rights. In fact, that was one reason why the Senate was brought into existence. The Senate is composed of six representatives from each State, and that representation was provided in order to ensure that State rights would not be entirely overridden by the decisions of the House of Representatives, which is elected on a population basis. Having sat in the Senate for six or seven years, it is perhaps only natural that I should regard questions such as those now before us from the point of view of a State rather than that of a particular electoral division. AI30 I still retain the views concerning the conflict between Commonwealth and State authorities that I held when I first entered this Parliament. The three instigators of this bill - I was about to say sponsors, but the sponsor of the bill is really the Government - were Professor R. C. Mills, the right honorable member for Yarra (Mr. Scullin), and the honorable member for Robertson (Mr. Spooner) who were the members of the special committee on uniform taxation. The views of the two members of this Parliament whom I have mentioned are well known. I do not know whether the honorable member for Robertson is, or is not, a unificationist. Perhaps he will tell me.
– I shall tell the honorable member when I speak to-morrow.
– If the honorable member is not a unificationist, at least his policy is unification. To the best of my knowledge, the right honorable member for Yarra has always been a unificationist. Moreover, unification is the policy of his party. Therefore we could expect nothing else from him. The honorable member for Boothby (Dr. Price) dealt with this aspect of the subject this afternoon, but there was some doubt concerning the views of Professor Mills. Like most professors and other learned gentlemen he has published writings over his own name. I intend to quote from two articles by him which appeared in Studies in the Australian
Constitution, published . in 1933. The first of these was written in. 1928 and contained the following observations: -
Another sign of this maladjustment is that, whilst the Federal Treasurer has frequently in the past few years announced reductions in the rate of income tax, State Treasurers have been forced .to increase rates of taxation, and have even explored new and unconstitutional avenues, such as the petrol tax of South Australia and the newspaper tax of New South Wales. At first sight the solution of these two problems would appear to He in one of two alternatives. Either the Commonwealth should revert to the status quo ante bellum, and so give the States move scope for revenue production, or the. States should hand over to the Commonwealth enough of their powers to adjust revenue and responsibility in each case- The former solution involves, inter alia, the retirement of the Commonwealth from income tax, and I have said enough earlier in this paper to show that this is most undesirable. Even to reduce the rates of Federal income tax, as has been done of late years, seems uneconomical, in view of our increasing public debt, for it is obviously much easier to continue a tax at a given rate than to increase it after a reduction. The latter solution takes us on to the thorny path of politics. For the States to hand over any_ powers to the Commonwealth means, or may be made to mean, the beginning of unification, which in the eyes of many is enough to condemn it.
Professor Mills went further in the next article from which I shall quote. I mention this because it is desirable that we should understand the method of approach of these three members of the impartial tribunal which has expressed an opinion on the subject before us.
– “Why emphasize “ impartial”?
– I did not unduly emphasize the word, but we are entitled to assume that a body of this kind would be impartial. Perhaps it is never possible to g_et true impartiality, but when a committee of three is appointed it is usually assumed that one member of it will hold views on one side of the question, and another will hold views on the other side of it, but that the chairman will be more or less impartial. Incidentally, the setting up of a tribunal of this kind occurred as far back as the time of Charles I. I do not say that that case had «.ny close analogy to this one, but a Commission of five was then appointed to consider a certain matter. Two of its members were openly for King Charles and two were openly for
Cromwell. The chairman was said to be in favour of himself. I do not suggest that the chairman of the committee on uniform taxation was in favour of doing anything which he did not believe to be in the interests of the country. However, Professor Mills in his second article, said -
In 1027 and again in 1928, during and after the financial agreement, I proposed two alternative methods of dealing with what I then called “ certain maladjustment of financial means to political ends “. In my view it appeared that one of two things was necessary, either that while financial relations remained unchanged the States should transfer some of their powers to the Commonwealth, such as roads and railways which were n source of net expenditure and would therefore burden the Common weal th and -relieve the States; or that the Commonwealth should exclusively control the fields of income tax and inheritance tax on the understanding that revenue adjustment payments should be made to the States to compensate’ for their lossOne advantage which I claimed for the latter system was its flexibility. Had such a flexible arrangement been made, whatever its demerits, it would have enabled the present situation to have been met simply by increased payments from the Commonwealth to the States, but none of these suggestions was adopted.
I think that I have said sufficient to make it clear that the three members of this committee held very definite and strong views in respect of the problem they had to meet, and that therefore they may be regarded as the real sponsors of this particular legislation.
– There was never’ any doubt about my views.
– I believe that that applies to all three.
– It applies also to my two colleagues.
– That is what I have been endeavouring to prove. The opponents of this fourfold measure, which we are treating as one, may be said, for convenience, to consist of the six State Premiers. That is rather a large number of opponents in the six States, because they represent totally different points of view. Four of them are Labour Premiers of different complexions ; one is a Country party Premier who, I believe, is still maintained in office by the Labour party ; and the last - I really should have put him first - is the Liberal Premier of South Australia. “Whatever may be their party political views, all are united, for one reason or another, in their opposition to this series of measures. They represent a very strong degree of opposition which., at any rate, wipes clean out any idea that it would be strange if in this National Parliament an honorable member from any State should also oppose these particular measures.
I say a word in passing on the subject of direct taxation. I am afraid that some honorable members of this House appear never to have read the Constitution Act. Their idea of the relations that exist between the Commonwealth’ and State Parliaments is that the Commonwealth Parliament has all the powers and can exercise them as it desires, and that the States have only such powers as the federal authority chooses to leave to them. That, as the majority of honorable members know, is the very reverse of the case. “When the Constitution was achieved, after very grave difficulties, only certain prescribed powers were given to the Federal authority, whilst the residuum of powers remained in the States. It is true that the Federal authority has taken to itself more and more power as the years have passed. For instance, it has come right into the field of health, which was reserved to the States, by making use of the quarantine power. But it did not make any attempt to enter the field of direct taxation until years after the Commonwealth had been in actual working. The Commonwealth camo into being in 1901. To the best of my belief, the first direct taxation levied was that imposed under the Land Tax Act 1910. The Estate Duty Act followed, under the pressure of the last war emergency, in 1914; and that, in turn, was followed by the Income Tax Act, 1915. Therefore, the three major direct forms of taxation that have been applied in Australia were put into operation from nine to fourteen years after the inauguration of federation, and two of the three were imposed as the result of the necessity to raise the revenue needed for the prosecution of the last war. Those facts show quite clearly to any body who wants to obtain a general view of the situation, that separate powers in respect of direct taxation were held by the Commonwealth and the States. The matter is summed up very briefly in the report of the Royal Commission on the Constitution, already quoted by the honorable member for Bourke (Mr. Blackburn) in, if I may say so, his not only courageous but also, I consider, very sound speech this afternoon, to which it was a pleasure to listen. I do not always find myself in agreement with the honorable member, but whether or not I agree with what he has to say I always regard it as well worth listening to and weighing. This report sets out certain limitations, under the subject “ Taxation “, in Part XII. It then states -
Subject to .these limitations, the Commonwealth Parliament has a general and unfettered power of taxation- (S.51 (ii)). An regards duties of customs and excise it has exclusive power (S.90). As regards other taxation, the Commonwealth and State Parliament* have separate rather than concurrent powers; the Commonwealth may raise money by taxation for itself, and a State may raise money by taxation for itself, but the Commonwealth could . not exclude a State from a field of taxation, though it might occupy the field by taking so much that there would be nothing left for a State (see the evidence of Sir Robert Garran, p. 66)
The delimitation of powers between the Commonwealth and the States has been forgotten by many persons. A substantial number of them has no idea that there is such a division of powers. Since the Commonwealth Parliament came into existence, there has been witnessed the gradual growth of the federal power, which obviously has been prejudicial to the States with the smaller populations - I do not care to call them the smaller States, because nobody can suggest that in respect of area Western Australia is one of the smaller States. The States with the smaller populations have been gradually hurt, and more or less driven into the background. They have been impoverished by the strengthening of the federal power and, it appears to me, more specifically by the emphasis that has been laid on the industrial side of the great eastern States, and the tariffs that have encouraged that industrialism. Questions such as the grant of special moneys to the States have arisen. First, there was the grant to Tasmania, which had become so impoverished that it had to have some assistance. Then, Western Australia found itself in such a condition that it, too, had to ask for assistance ; and my own State reluctantly acknowledged itself to be in the same position. There has been a good deal of rather contemptuous reference to the fact that these States have been obliged to obtain assistance, by those States which forgot the enormous benefits that have been received by New South Wales and Victoria by reason of the operation of the tariff, and the great results that have accrued to Queensland from the sugar agreements. Even though the States with the smaller populations have received direct grants they have not, in my opinion, benefited to anything like the degree to which the other States have benefited. I have always considered that the grants to the smaller States should have been made, not as they have been, on the basis ‘ of necessity, but on the basis of compensation for what those States have actually lost as the result of the operation of the tariff and other federal legislation. But these losses have never been thoroughly calculated, and the easier’ and cheaper course has been followed of the payment of lump sums in the hope that they would keep the States quiet for another year.
– It has been reasonably successful.
– It has been successful in a way, but 1 do not regard it as a satisfactory method. It would be far better if a definite arrangement were evolved on an equitable basis, which would last for a series of years. One of the reasons why the matter, has developed along such lines is that the Commonwealth did not continue to observe the provision in the Constitution, which states that there shall be an InterState Commission. Section 101 of the Constitution states positively that there shall be an interstate commission. There was such a body for a few years, but it ceased to exist because the High Court held that it had not been appointed on a life tenure, despite the positive instruction in the Constitution, which is just as emphatic as the statement that there shall be a Commonwealth parliament’, consisting of two houses.
I purpose to deal more with main trends than to discuss the bills in detail. The growth of the federal power, to which I have referred, has coincided with its increasing unpopularity in many of the States, and, for that reason, the rejection of practically all the referenda put to the people. One of the astonishing features of Australian history during the last 40 years is that, as has happened so often in America, any referendum put to the people is almost certainly rejected. The only notable instance to the contrary during the whole .of federation has been the financial agreement of 1928, which was accepted by every State. The reason for that, I point out, was that not only the Commonwealth Government but also the heads of every State Government in Australia were in favour of that financial agreement. In other words, it can be said that in Australia you will not ordinarily carry a referendum unless yon have agreement with the States. You will not carry it in the teeth of the opposition of six States, or even of four, because the Constitution demands that, in order that it may be carried, there must be a majority of the electors voting in a majority of the States in favour of it. Practically every referendum has been rejected. That is no doubt the reason why the approach to this difficult problem, if it be so difficult, has taken the present form. As has been pointed out by a number of speakers, normally the form followed should be that prescribed by the Constitution, namely, that in case of a deadlock there shall be a referendum of the people to decide the matter and alter the Constitution. That has not been done; the reason being, I suggest that at any time it is abnormally difficult to carry a referendum in a majority of the States. I go further, and say that, at the present time, there is practically no chance of a referendum sponsored by the present Commonwealth Government being carried. If this issue were put to the people even during the present crisis - of which the man in the street is fully aware - it would be most definitely rejected. And why? In the first place, because these bills are not regarded by the general public as essential to the winning of the war, and therefore the people would not regard themselves as obliged to vote “ Yes “ in any referendum associated with them. Moreover, it would be held by many people - and in this I would concur with them - that the tills represent definite move towards unification X can speak for the people of South Australia, and I know that they have no desire for unification. Again, it -would be believed by a great many people that the bills are probably unconstitutional. A referendum was held a few years ago, and I urged the people to vote “ No “. The first reason I gave in the Senate- was that I did not think that there was the slightest chance of the proposal being carried, so that there was no justification for the waste of time and money involved in holding a referendum on an issue that was predetermined. South Australia rejected it by a fourtoone vote, so that my judgment was vindicated. I do not say that there would be a ‘four-to-one negative vote on the present issue, but I am certain that it would be defeated. There is this other point to be considered, also. I am sorry, as a federal member of Parliament, to have to say it, but the people of my State very much prefer their State Government and their State Parliament to the Commonwealth Government and the Commonwealth Parliament. That has been so for years, and the feeling is becoming stronger. Any federal member of Parliament who believes the contrary is deluding himself. The State member is the mail who gives the people their roads and bridges, and the other things that they want. It may be that the federal member, who distributes largess in the shape of pensions, may also ‘come in for some gratitude, but the fact remains that the State member has first place in the people’s hearts.
The people do not believe, and cannot be convinced, that the Government’s proposals arc necessary for the defence of the country. So far as the people of South Australia are concerned, they would never believe that such men as their Premier, Mr. Pla’yford, and his chief supporter, Mr. Rudall, both of them returned soldiers, and greatly respected throughout the State, would be opposed to any measure which was really necessary for the successful prosecution of the war. No South Australian, whatever his politics, could possibly believe that. Both those men saw service overseas in the last war. As a matter of fact, Mr. Playford was picked up for dead on the battlefield, but fortunately he survived. No one will convince the people of South Australia that these arc essential war’ measures when two men so highly respected say that they are not necessary.
– Will the honorable member say why they did not put forward alternative proposals?
– I was not at the Premiers Conference at which the matter was discussed. I was not invited; I do not even know whether mem’bers of Parliament are permitted to go along and listen to such discussions, but I gather that the Government’s proposals came in for a good deal of criticism. It would have been enlightening if the Treasurer had told us what the respective Premiers said regarding the proposals, and why they rejected them. It would be interesting to know why Mr. Forgan Smith, for whom T have considerable respect, is opposed to the scheme. He is a Scotchman by birth, and, therefore, I presume that he does not want us to lose the war, yet he does not consider this scheme essential to the winning of the war. Another reason why the people of South Australia do not look upon these bills as necessary defence measures is that they have observed the manner in which this Parliament has distributed largess during the last two years in the form of child endowment, increased invalid and old-age pensions, and widows’ pensions. They say to themselves that, though these things may be excellent in .themselves, they are not essential to the winning of the war. They are absorbing money which could be devoted to the winning of the war. This money, they say, is .-being distributed among a particular class, and that is a political action. Then, when the Government finds itself running short of money, it proposes to raise more .by depriving the States of the power which they have always enjoyed to provide social services from the proceeds of taxes. The State governments object strongly to the proposal that, whether they like it -‘or not, the Commonwealth shall have power to take away from them their public officials, their offices, their books and their papers. They have no objection, as has been demonstrated in the past, to lending and making these facilities available to the Commonwealth Government’ for the better prosecution of the war, but they maintain that they were themselves taxing authorities long before there was any Commonwealth Government. They maintain that they have their, own office staffs and their own documents, and they are not going to hand them over to any other authority for absolute ownership and retention by that authority. They know that what they surrender will never be returned. The Government of South Australia lias never hesitated during this waT to co-operate with the Commonwealth in every way possible. Some of its ablest officers, such as Mr. “Wain wright and Mr. Hunkin, have been lent to the Commonwealth for war work. The Minister for Home Security (Mr. Lazzarini), who has had a good deal to do of late with State governments will endorse my statement that they have always been willing to co-operate with the Commonwealth in . every way possible.
As I am not a King’s Counsel myself, I propose to read the gist of an opinion prepared by one who is a King’s Counsel on the validity of the Government’s proposed legislation. Mr. Ligertwood, K.C., perhaps the leading member of the South Australian Bar on constitutional matters, has given an opinion, of which a synopsis was published in last Saturday’s issue of the Advertiser. In it he states that, in his opinion, the Government’s scheme is unconstitutional, and could be challenged on the following six grounds : -
That it violates section 51 (11) of the Constitution in that it discriminates between those States which are willing to vacate the income tax field and those which are not.
I understand that this opinion was given some what hastily, ‘ and if he, on short notice, was able to find six reasons why the scheme was unconstitutional, he would probably be able to find one or two more if he had time f or a more leisurely survey of the field.
Regarding the Government’s proposal to compensate the States for vacating the income tax field, I maintain that it would be more equitable to treat the amount of £34,000,000 as a pool, and ‘ to divide it among the States .on a per capita basis. There could be no suggestion then that there was any discrimination between the States, and the proposal has the further advantage that the States which have been living on an extravagant seale would have to reduce their expenditure, while those which have been frugal would be exalted. An integral part of the policy of the present. Government is understood to be .that the rich shall be abased, and the poor shall be exalted. In this proposal, however, we find an extraordinary change of policy, because the rich States are to he exalted and the poor are to be abased. Constant repetition has almost persuaded me that only the United Australia party worked on those lines.
– That is the weakest part of the honorable member’s case.
– I am very glad to hear that the rest of it is so strong. I come now to the fundamental point of my speech. As we have been told repeatedly, the successful conduct of t]ie war requires the co-operation of all sections. “We cannot reasonably anticipate that we shall win if the Commonwealth is split into discordant elements. What is the Government’s idea of no-operation, even in the Labour party? I. venture to prophesy that co-operation will be’ in evidence when the division bills ring, but there is no co-operation in the expressions of ‘opinion among honorable members opposite, and that has been so during the last few weeks. I shall be interested to see whether those who speak their mind freely against uniform income taxation, will carry their independence to the only climax which is of any real value, and that is, of voting for the opinions that they have expressed. The Government has no sense of co-operation inside the Labour party or in Parliament itself.
– That is wishful thinking.
– It is logical thinking. The Government has refused repeatedly to countenance the formation of a national government, although nearly every other country worth its salt has formed a national government, little as it may have liked the idea. Therefore, the Government has no sense of co-operation with the Opposition, although it may have some sense of cooperation with individual members of the Opposition. In addition, it has no sense of co-operation with the States, as is proved by this drive against six States which embrace the most discordant political views. Further, it has proved that it has not, at the present time, even a true sense of co-operation with Great Britain.
– That statement is most unfair.
– I stand by those words ; everybody knows that the position is as I have stated. If the Commonwealth Government were to co-operate cordially with the six States, it would do far more to win the war than it will achieve by introducing legislation of this description with the explanation that defence needs make it essential.
– I do not propose to discuss the contention that the bill is ultra, vires the Constitution, because frankly, I am not competent to speak upon the legal aspect. However, I shall vote for the bill, for two reasons. First, I support the Government which has introduced the. measure. Secondly, I regard the legislation as the only practical and logical step for marshalling the whole of our financial resources for a total war effort. It is not unusual for me to disagree with the’ views of the honorable member for Wakefield (Mr. Duncan-
Hughes), and this occasion is no exception. In my opinion, his concluding remarks to quite a reasoned statement of his attitude did not reflect credit on him. Any one who claims a monopoly of loyalty to Great Britain and implies that those who do not see eye to eye with him are disloyal is narrow-minded, and unfair to other honorable ‘ members, who, in their individual capacities, are playing their part in the war effort.
– If the Labour party cannot co-operate with us, how can it expect to co-operate with people whom it has never seen?
– I remind the honorable member for Wakefield that when the Labour party was in opposition, it co-operated with the Menzies and Fadden governments until the time came when it could not support certain financial proposals which the Government of the day regarded as vital. That is a fair and reasoned attitude. On a number of occasions the Labour party, when in opposition, extended valuable assistance to the previous governments. For the honorable member for Wakefield to declare that we are not loyal to Great Britain is most unfair.
– I did not say that.
– Whilst I do not desire to misrepresent the honorable member, that was my interpretation of his remarks.
The Treasurer, when introducing this legislation, gave a clear exposition of the financial problems of the Government, and the maze of Commonwealth and State taxation. To-day, the Prime Minister (Mr. Curtin) and the Leader of the Opposition (Mr. Fadden) dealt in very temperate language with various features of the bill. The speech of the Prime Minister was logical and reasoned, and he kept the discussion on a high plane. Unfortunately, his example was not followed by the honorable member for Boothby (Dr. Price), who normally makes a reasonable - contribution to the deliberations of this chamber. This evening-? he resorted to -tactics to which ‘ I do not subscribe. They did not do him justice, or make a valuable contribution to the debate. When the honorable member was on the hustings at the
Boothby by-election, the key-note of his policy was “Win the War”, and he advocated that the whole resources of Australia should be placed at the* disposal of the Commonwealth.
– I also advocated the formation of a national government, which the Labour party has repeatedly rejected.
– The attitude which the honorable member adopted this evening was most parochial.
– Rubbish 1 Under this legislation, the profligate States will receive greater compensation than the prudent States.
– A “ barker “ for Bar~ ker.
– I agree. Numerous people in Tasmania and on the mainland have asked me to declare my atti’tude to the proposal for the introduction of a uniform income tax. Without exception, they have supported the principle, believing that in war-time the Commonwealth should have first call on the public purse.
– Tasmania has been granted an additional £77,01)0.
– It is true that .the Premier of Tasmania asked the Federal Treasurer to increase the allocation that the Commonwealth proposes to make as compensation to that State. However, when those people asked me to declare my attitude, the amount of compensation payable lo Tasmania bad not been made public. I have not visited Tasmania for five or six weeks, and that was some time before this bill was introduced. People regard the winning of the war as para mount. The people know that the Commonwealth Government in the present circumstances should have first call on their purses. Another reason why some people support the principle of uniform taxation is probably selfish, but it is shared by those who live in one State and draw their incomes from several States. They dislike the irritation and difficulty involved in making out different returns of income for different States. Whether the reason be selfish or not it is nonetheless a reason some people have for supporting a uniform tax.
– They may be surprised when they see the results, because they will be taxed higher, especially if they derive their incomes from a number of States.
– I should say that that would depend on their incomes. I do not think that it is . sufficiently appreciated that it is proposed to revert to the present system twelve months after the war ends, and that its only purpose is to ensure that the Commonwealth Government shall be able to raise the money necessary for the prosecution of the war. which is the real objective. In spite of the fact that some people may have been buying more than their needs there is no real objection amongst the people generally to the payment of whatever additional taxes are needed to provide the resources which will help to achieve that objective.
Among the honorable members who have expressed opposition to the Government’s proposals are the honorable member for Boothby (Dr. Price), the honorable member for Wakefield (Mr. DuncanHughes), and the honorable member for Barker (Mr. Archie Cameron), all good South Australians. I should have liked to hear from them and other opponents of this measure how otherwise the extra £15,000,000 which the Treasurer anticipates receiving as the result of it would be raised.
Mri Archie Cameron. - Before the Labour party had to take on the job of government we heard a lot from its supporters about raising money without, imposing taxes.
– The honorable member does not say that seriously.
– Indeed I do. Labour members when in Opposition talked all the social credit in the world.
– It is difficult t.i know when the honorable member is being serious. It is perfectly true that more money could be raised and used than has been raised by other than taxes. When the honorable member for Warringah (Mr. Spender) was Treasurer he wrote an article on inflation which he concluded by saying, “Inflation, forget it!”.
– I guarantee that the honorable member cannot produce that article.
– Perhaps not tonight, but later, yes. We have heard a lot from the honorable’ member for Wakefield about the way In which the weaker States have been impoverished under federation as the result of the loss of customs revenue and so on. T agree with much of what he said in that direction. It is unquestionable that in all federations the less populous States suffer, whilst the more strongly populated States, prosper. That is as true of the United States of America as it is of Australia. It seems to be the inevitable result of a federal system. It is also true, however, that various efforts have been made to compensate the weaker members of federal unions. I concede that those efforts have not been entirely successful, but a genuine effort has been made to make adjustments in this country. I do not think that the resurrection of the Interstate Commission would have beneficial results in the poorer States of the Commonwealth, but the Commonwealth Grants Commission has done and is doing an excellent job of work in helping to meet the deficiencies of Western Australia, South Australia and Tasmania. I t has not been able to do everything that they desire, because of certain limitations imposed upon it, but, at the same time, its efforts to’ bridge the gap which exists between the conditions in those States and the conditions in the other States have had a fair measure of success. Under this legislation that commission will have greater powers and will be able to deal with many of the difficulties mentioned by the honorable member for Wakefield. For instance, provision is made for it to inquire at the request of the States into injustices, ren or supposed, imposed on them in respect of the compensation payable by the Commonwealth under the States Grants (Income Tax Reimbursement) Bill. A1 this stage, it seems to me, very little more provision could be made than is made to meet the difficulties that can be anticipated. If with the passage of time weaknesses be disclosed, the Commonwealth Grants Commission, or some other body, nan be. empowered to investigate the matter. There is no need to anticipate great difficulties. It is wise to cross our bridge* as wo come to them. The bridge we have to cross now is the war. That is our first consideration.
If wo are to win the war we must have sufficient resources of man-power and money. We have to marshal our whole resources in such a way that the Commonwealth Government will be able, to obtain whatever money it needs. When the war has been won will be the time to talk about our own difficulties. If we do not win, there will be no question for us to decide as to States, State boundaries. State revenues or State taxation authorities, or anything of that kind. All decisions will be with Nippon. I give my unqualified support to the legislation. It is practical and logical and the most effective way of prosecuting the war to a successful end.
Debate (on motion by Mr. Menzies) adjourned.
WIDOWS’ PENSIONS BILL 1942.
Bill returned from the Senate with requests and amendments.
Mb. BRIAN Penton and Mb. Kurt von Stutterheim : Censorship - Army Magazine “ Salt “ - -CANBERRA Milk Supply - Service Discipline : Db. Evatt and Royal Australian Am Force .
Motion (by Mr. Curtin proposed -
That the House do now adjourn. Mr. CALWELL (Melbourne) [11.25]. - “Will the Acting Attorney-General ask the military intelligence police whether it is factually correct that Kurt von Stutterheim, Berlin newspaper editor and notorious Nazi propagandist, who was in Australia in 1939 on a subversive mission, and who is now in an internment camp, was an intimate friend of Mr. Brian Penton editor of the Sydney Daily Telegraph; that he lived in Penton s Elizabeth Bay fiat for six months; that Penton assisted him in his work, introduced him into influential circles, and co-operated openly with him in the preparation of articles and’ reports on Australia and Australian defence; that von Stutterheim was, in fact, arrested in Penton’s flat and left behind him most of his clothing, which Penton later cynically wore around Sydney and on his yacht? Will the Acting Attorney-General seek a report from the military intelligence police as to whether Mr. Penton is a fit, proper and loyal citizen to visit the United States and deliver a series of lectures as an alleged” typical Aus tralian “ ? If the Acting Attorney-General finds that these are facts, will the. Prime Minister (Mr.Curtin) review his decision that Mr. Penton’s mission to the United States of America is not to be prohibited by the Government? Will the Prime Minister also ascertain whether it is a fact that several accredited American journalists, who wished to send to their papers a digest of the questions asked in the House last week on the subject of the proposed tour of America by Mr. Brian Penton, were prevented by the censor from sending their stories out of this country? If so, will the Prime Minister say whether the censors were acting under instructions of the Governments
Recently, I asked the Minister for the Army (Mr. Forde) a series of questions about the Army magazine Salt, which was first published a couple of years ago and carried in its first issue a foreword written by the then Minister for the Army (Mr. Spender). Incidentally one of the first articles was entitled” Making the Earth Worm Turn “. The questions I asked elicited the following information : -
The staff engaged consists of seven officers and fifteen other ranks, with five civilian typists. The ranks, names, and salaries of the officers concerned arc as follows: -
The coat of the publication to the 18th May, 1842, is £16,760; the publication cost of each of the last three issues is as follows: -
I hope that the consideration promised by the Minister for the Army of whether the money expended on this publication is- Worthwhile will be expedited and that the Government will decide not to waste any more money on this publication, and certainly not to pay seven officers, fifteen other ranks and five civilian typists a large sum of money each week to produce a publication which, I am told, is not widely read and. which, in any case, because of the shortage of paper and for other reasons, is not worth publishing.
– Opinions differ on that point, but, even if it were an excellent publication, it does not need a major, two captains and four lieutenants to edit it, and fifteen other ranks and five civilian typists to assist in its publication. If the whole army were run in this fashion, which, fortunately, it is not, we should not deserve to win the war.
I should like the Prime Minister to direct the attention of the Minister for the Interior (Senator Collings) to a matter which concerns a more mundane subject, namely, Canberra’s milk supply, which is probably the worst in Australia. For months past I have not seen good milk in Canberra. I protest against a recent decision of the Minister for the Interior. For the past ten years a community agistment paddock has been provided at Griffith, Canberra, for the convenience of residents of that locality who desire to pasture stock in it. At the present time, twelve people are grazing cows in this paddock, and for the right to do so, they pay the Department of the Interior a weekly fee of 6d. a head. The department has now decided that the paddock shall be closed as from the 30th June next. An acute shortage of milk occurred in Canberra some months ago, with the result that the Canberra Dairy Society, which operates as a combine, introduced a rationing scheme. The system was so unsatisfactory that the department was obliged to intervene and take control of the distribution of milk in Canberra. In order to provide a supply sufficient for the needs of the population, it took steps to have the Minister for Health approve of the importation of milk. The department will not need the agistment paddock for other purposes as there is unlikely to be any further housing development in that locality for the duration of the war. Representations were made to the Minister for the Interior to provide an alternative paddock, but the department refused to accede to the request. The Government is daily advising people to become selfsupporting. The twelve people who own these cattle are providing a milk supply for their families, and thus are indirectly helping to solve man-power problems. It is anomalous that the Government, through one if its departments, should prevent them from doing so. They urge that, in view of the fact that the land is not required for other purposes, the cows in the paddock should not be disturbed. The request is reasonable, and the attitude of the department is stupid and incomprehensible. We know the dangers of an impure milk supply. A number of fatalities has occurred amongst infants in Melbourne as the result of impurities in milk.
– The Department of the Interior is not culpable in that matter.
– The Prime Minister interrupted my statement. Because of the shortage of man-power, and for other reasons, there has been a depreciation of the quality of milk supplied in Melbourne, and this has reacted disastrously on some families. In Canberra, the Department of the Interior has told these people that they cannot have the use of a paddock which the department does not want and will not need until after the war. They should not -be harassed ; at least, when they make representations to the department they should not bo met in an uncompromising spirit. They have been told that, as the stock must be removed by the 30th June, the best, thing that they can do is to sell their cows. This should not be done at a time when there is a milk shortage and when the milk delivered by the dairy society is of poor quality. The milk supplied in the Parliamentary refreshment rooms is of a very low standard. It might pass the minimum requirement test, but it is not so good as the milk that the dairying district which surrounds Canberra could and should supply.
.- In last Saturday’s issue of the Melbourne Herald there is a statement under the heading: “Dr. Evatt gets close to our R.A.F. Fliers”. It is as follows:-
The Australian Attorney-General (Dr. Evatt) visited the Australian Spitfire Squadron this morning. He had scarcely been at the aerodrome a few minutes before he had emptied out the senior officers and visitors from the hut, where the pilots assembled, and settled down for a confidential chat.
He repeated this procedure with the ground crews, and then, with a sheaf of notes, went into a vigorous discussion on the spot with Air Commodore F. H. McNamara, V.C., Australian Air Liaison Officer at Australia House, Wing Commander T. W. White, who is attached to Royal Australian Air Force head-quarters in London, Squadron Leader Barrett, who is station commander, and Group Captain K. L. Atcherley, who is sector* commander.
The problems ranged from provision of footwear and how to get more fruit to the question of greater facilities for members of ground crews to become members of air crews. Air Commodore McNamara is taking immediate action.
Dr. Evatt later told a Herald representative that all members of the squadron were magnificently fit and cheerful, and were as keen as mustard. What was most pleasing was that they were strongly opposed- to being posted to other units. They had a spirit of loyalty and comradeship like a football team.
Squadron Leader Barrett said: “Dr. Evatt’s visit was worth while, if only for one thing: Two of our boys were to be posted to officer training units as instructors. They were almost in tears when they got the news, but now the Minister has overruled that project.
If the Prime Minister intends to allow people to interfere, as the Minister for External Affairs has done, with the training programmes and the efficiency of our armed units, he will destroy what discipline is left in the Australian army to-day. When senior officers consider that men should be sent to new units in order to perform instructional work their decisions should be upheld. The men should not be encouraged to tell tales. I say without hesitation that, in order to. have any chance of success with our armed forces against o.ur enemies, a feeling of confidence must exist between the senior officers and the men in the ranks. The senior officer must trust his men, and his men must trust him.
– The newspaper report does ‘hot say that the Attorney-General used any influence.
– It states that he had scarcely been at the aerodrome a few minutes before he “emptied out” the senior officers.
– That is only the way in which the reporter phrased it.
Mar. RANKIN - The statement has not been denied.
– I do not suppose that the Minister has seen the report.
– Other people hare seen it, particularly the young men who are being called up for service.
– The report was not published by a reputable journal.
– That may be so. Areputable journal would not print such stuff. However, I repeat that, if this sort of thing be allowed to continue, the discipline and fighting ability of our troops will be destroyed.
– in reply- -With regard to the remarks of the honorable member for Bendigo (Mr. Rankin) concerning the Minister for External Affairs (Dr. Evatt), it would be proper for me to ascertain from the Minister what he actually did before I presumed to judge the matter. I am certain that the Minister has a full realization of the responsibilities of officers to their men and men to their officers, and is himself concerned with the efficiency and discipline of the fighting forces. I find the story a little difficult to accept in the form in which it has been published in the newspaper.
With regard to the Canberra milk supply, I assure the honorable member for Melbourne (Mr. Calwell) that I shall ask the Minister for the Interior (Senator Ceilings) what all the complaint is about. The honorable gentleman could have saved me that difficulty by himself seeing the Minister and discussing the matter with him. I have nothing to say regarding Mr. Brian Penton. I know no more about his case than I did last week, and the matter has not come before me in any way since then. As to the series of questions which the honorable gentleman has read out, the Attorney-General will have them brought to his notice.
Question resolved in the affirmative.
The following papers were presented : -
Air Force Act - Regulations - Statutory Rules 1942, -No. 232.
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1942 - “So. 22 - Arms, Explosives and Munition Workers’ Federation of Australia.
Commonwealth Public Service Act - Appointments of H. Gr. Gellie and D. T. Sutherland, Department of the Treasury.
Defence Act - Regulations - Statutory Rules 1942, No. 231.
Lands Acquisition Act; - Land acquired - For Defence purposes -
Botany, New South Wales.
Northam, Western Australia.
Parafield. South Australia.
Victor Harbour, South Australia.
Williamtown, New South Wales. For Postal purposes -
National Security Act -
National Security (Aliens Control) Regulations - Orders - Aliens control (Queensland curfew) (2). National Security (Emergency Control) Regulations - Orders - Military powers during emergency (3). National Security (General) Regulation! - Orders - Control of - Dextrose.
Highways. Evacuation of areas (2). Navigation (Aquatic racing on Sydney Harbour). Prohibited places.
Taking possession of land, &c. (139). Use of land (8). National Security (Internment Camps)
Regulations - Rules - Camp (2 ) .
National Security (Man Power) Regulations - Orders - Protected undertakings (16).
National Security (Maritime Industry) Regulations - Orders - Nob. 18, 19, 21.
National Security (Medical Co-ordination and Equipment) Regulations - Orders - Control of medical equipment (2).
National Security (Prisoners of War) Regulations - Rules - Camp ( 4 ) .
National Security (Stevedoring Industry) Regulations - Orders - Nos. 1-3.
Regulations - Statutory Rules 1942, Nos. 235, 23G.
Northern Territory Acceptance Act and Northern Territory (Administration) Act -Ordinance - 1942 - No. 3 - Stamp.
House adjourned at 11.40 p.m.
The following answers to questions were circulated: -
asked the Minister for the Army, upon notice -
– The answers to the honorable member’s questions are as follows : -
Congestion on the Waterfront.
y. - On the 21st May, 1942, the honorable member for Moreton (Mr. Francis) asked the following question without notice: -
I ask the Minister representing the Minister for Trade and Customs whether Sir Herbert Gepp has been appointed to a position on a committee that is to deal with congestion on the waterfront? If so, what is the particular position to which he has been appointed, and what duties is it proposed that he shall perform ?
For the information of honorable members the Minister for Trade and Customs has now intimated that under the provisions of the National Security (Cargo Control) Regulations, a Central Cargo Committee has been set up, and Sir Herbert Gepp has been appointed chairman. The functions of the committee are to provide for the orderly and expeditious disposal of goods arriving by sea, and the punctual arrival at ship’s side of goods for shipment so as to ensure the speedy discharge and loading of ships and to reduce the length of time that goods lie at wharf. The committee will also have , the responsibility of preventing congestion, confusion and delay at the waterside, and of making proper provision for the storage or other accommodation of goods. With the influx into the Commonwealth of large cargoes of war material and equipment, it becomes a most vital duty for the Government to take all steps possible to avoid congestion on the waterfront as congestion means the immobilization of shipping and results in valuable goods being left in vulnerable areas with dangers of destruction from enemy action.
On” the 21st May, 1942, the honorable member for Bass (Mr. Barnard) asked the following question, without notice: -
In view of the appointment of Sir Herbert Gepp as chairman of a committee to relieve congestion on the Melbourne wharfs, and of the fact that Tasmania has several excellent ports, particularly that at Hobart, will the Minister for Commerce bring to the notice of Sir Herbert Gepp the facilities available in Tasmanian ports as a means of relieving this congestion, both in respect of shipping space and for storage purposes?
As promised, I have brought the suggestion made by the honorable member to the notice of my colleague, the Minister for Trade and Customs. He has informed me that the question of utilizing unused deep water ports in Tasmania and other parts of the Commonwealth as ports of ease for the relief of congestion likely to arise on wharfs on the mainland has been referred to the Central Committee set up under the National Security (Cargo Control) Regulations, of which committee Sir Herbert Gepp ia the chairman.
Canberra : Hotels and BOARDING Establishments; Liquor Prices; Omnibus Service.
asked the Minister representing the Minister for the Interior, upon notice -
i. - The Minister for the Interior has supplied the following answers : - 1. (o) Yes, excepting Hotels Civic and Kingston, which are privately owned.
– On the 14th May I undertook to convey to the Minister for Trade and Customs a question asked by the honorable member for Cook (Mr. Sheehan) regarding liquor prices in the Australian Capital Territory.
The Minister has now advised me that the prices of beer and spirits in the Territory have been under the supervision of the Prices Branch since the outbreak of war. Beer was brought under strict price control in October, 1941, when the excise duty was increased and spirits on the 15th April, 1942, when all goods were declared. Increased prices have been permitted on account of higher rates of duty, but no increases of prices have taken place on account of increased costs incurred by hotelkeepers. The actual increase of prices on that account has not been sufficient to maintain the percentage of gross profit margin of hotelkeepers at the pre-war level. The landed cost of beer and spirits in Canberra is higher than in Sydney and is largely responsible for the difference in retail prices in comparable Canberra and Sydney hotels -
What is the actual loading capacity of the motor omnibuses regularly operating in Canberra provided in the licences issued under the Motor Traffic Ordinance governing the operation of these vehicles?
As the Minister has stated that he personally is unaware that frequently these omnibuses are overcrowded to such an extent that members of the public have refused to travel on them for safety reasons, will he obtain a report from the officer in charge of these omnibuses and inform the House of the result?
In view of the fact that a month will elapse before any relief may be expected, will he issue instructions that in no circumstances is the loading capacity laid down by the licences to be exceeded?
– The Minister for the Interior has supplied the following answers : -
Tea Rationing : Patients in Hospital; Travelling Soldiers; Outback Deliveries.
s’. - On the 20th May, the honorable member for Forrest (Mr. Prowse) asked the following question, without notice : -
I have received a communication this morning to the effect that, owing to tea-rationing, patients in hospitals will be unable to partake of afternoon teas. Will the Minister representing the Minister for Trade and Customs seek to have the restrictions made as light as possible in respect of patients in hospitals and similar institutions?
The Minister for Trade and Customs has supplied the following answer : -
Tea for patients in hospitals 13 drawn by the hospital authorities at the ration rate applicable to domestic consumers. In addition, patients are entitled to continue to draw their domestic consumers’ ration.
On the 20th May, the honorable member for Hume (Mr. Collins) asked the following question, without notice : -
Women voluntary workers in country districts meet trains day and night in order to provide travelling troops with refreshments consisting of tea and hot pies and sandwiches. Now that tea has been rationed, will the Minister for the Army endeavour to ensure that supplies shall be made available to these women in order that they may be able to continue this generous service to the fighting services ?
The Minister for Trade and Customs has supplied the following answer: -
The supply of tea from civilian stocks to meet the needs of troops through the agency of voluntary workers, buffets, canteens, &c. is at present the subject of negotiations with the Department of the Army. Supplies will no doubt be made available to meet the demands of these organizations, but it has not yet been determined as to whether these will be taken from civilian or defence stocks.
– On the 19th May, the honorable member for Flinders (Mr. Ryan) asked, without notice, what arrangements had been made to ensure that, during his leave, a soldier may receive his proper quota of tea or of any other foodstuffs which may be rationed.
I now inform the honorable member that no arrangements have been made to provide soldiers on leave with a ration of tea during the period of their leave. Soldiers granted leave in excess of 48 hours receive subsistence allowance and must make their own arrangements. The honorable member will realize that there are considerable practical difficulties in implementing a scheme on the lines suggested by him, but the question is being examined in consultation with the Minister for Trade and Customs.
y. - On the 29th April, the honorable member for Fawkner (Mr. Holt) asked the following question, without notice: -
Representations have been made to me that the operation of the regulation providing for the rationing of tea is causing difficulties in supplying outback settlements to which stores are delivered infrequently or at irregular intervals throughout the year. I ask the Minister representing the Minister for Trade and Customs whether he will consider the advisability of allowing officers administering the tea-rationing regulation discretionary power to deliver larger quantities of tea to stores in outback settlements?
The Minister for Trade and Customs has supplied the following answer: -
Information from the Tea Controller is awaited on this matter and it is anticipated that a full reply will be furnished at an early date.
n asked the Minister representing the Minister for Trade and Customs, upon notice -
Mr. BEASLEY - The Minister for Trade and Customs has supplied the following answers : -
Bottles . . 25
Nobblers 60 Wines . . 66-100
Aerated waters - Sold with spirits, no charge. Hold separately 60 Bottled beer . . 30
Bulk beer - Pots .. .. 06
Glasses . . . . . . 150
It should be added that price increases allowed since the war have been limited to increases justified by increased customs and excise duty, whilst gross profit margins have been reduced.
y. - On the 20th May, the honorable member for Robertson (Mr. Spooner) asked the following question, without notice : -
In relation to the powers of the Minister for Trade and Customs in the direction of relaxing the regulations with respect to the rationing of liquor supplies in certain instances, I refer to a town at the northern end of my electorate, close to which a large military establishment has been recently set up, with the result that a very large number of men is now looking to the hotels of the town for their liquor requirements. Will the Minister representing the Minister for Trade and Customs ascertain whether the ten hotelkeepers of that town sent to the Collector of Customs a statement of their case on the 27th April, and a telegram on the 15th May, to neither of which, so far, have they received a reply, with the result that a very large number of soldiers cannot obtain supplies of liquor?
The Minister for Trade and Customs has supplied the following answer: -
On the 18th May, 1042, the ‘ Collector of Customs, Sydney, following investigations into
the representations made to him, authorized an increase in the monthly quota of beer to each of the ten hotels concerned to meet the requirements of a large influx of population into the town.
Food Rationing : Activities of W ae Organizations.
– On the 19th May, the honorable member for Griffith (Mr. Conelan) asked the following question, without notice: -
Is the Minister representing the Minister for Commerce aware that numbers of voluntary women’s organizations which are doing valuable war work in providing cheap meals for members of the fighting services, having been in operation for less than twelve months, are being deprived of their ration quotas in certain respects; will the honorable gentleman see that these organizations arc placed on the same ration footing as similar organizations which have been operating for more than twelve months?
The Minister for Trade and Customs has supplied the following answer : -
The honorable member is informed that whatever tea ration is decided upon for women’s voluntary organizations will apply On a common basis regardless of date of establishment.
Department of Information : “ Hate “ Campaign.
n. - On the 21st May, the honorable member for Melbourne (Mr. Calwell) asked the following questions of the Minister representing the Minister for Information : -
The Minister for Information has supplied the following answers: -
s.- On the 29th April, 1942, the honorable member for Gippsland (Mr. Paterson) asked me a question, without notice, concerning proposals which had been submitted to .the Government relating to the creation of a national organization for the co-ordination and planning of rural production in war-time.
I desire to inform the honorable member that since the outbreak of war the Commonwealth Government, in association with the State authorities, has sought to direct production along channels necessary for the effective prosecution of the war. The Australian Agricultural Council, consisting of the State Ministers of Agriculture, and presided over by the Minister for Commerce. has met at frequent intervals to consider the problems that have arisen in connexion with our primary industries. In putting the plans formulated at these gatherings into effect, the Commonwealth lias received the whole-hearted co-operation of the State authorities. Every effort lias been made to meet the needs of our own and allied services, and of the civil population, and to supply the United Kingdom with essential foodstuffs and other primary products. The policy generally followed in these matters has been that of limiting control within primary industry as far as possible to those products which are regarded as essential, or which have been seriously affected by the war, at the same time, allowing to growers as much freedom of action as possible. It was considered that this was the quickest and most effective way in which the Government’s objects could .be achieved. Apart, from control of specific commodities, however, advice has been tendered from time to time by the Commonwealth Government to producers generally regarding the best course of action to be followed in the national interest. The Commonwealth Government recently established an Australian Food Council which is charged with ensuring adequate supplies of food for service and civilian needs. The council is at present engaged in making a review of the food requirements in order to determine whether any action i.« necessary to increase production of commodities in short supply. Xt is hoped that with the machinery now in existence it will be possible to organize primary production upon an increasingly efficien basis, so that not only will the food needs of the nation be met, but also producers will be enabled to overcome the serious difficulties with which the war has confronted them. If experience shows, however, that further administrative changes are necessary, these will be made promptly by the Government.
Enemy News Broadcasts.
n. - On the 20th May, Dr. Price asked me a question, without notice, as to how it is that Berlin, Tokio, and Rome are able to report immediately important items of Australian news such as the Prime Minister’s declaration against strikes, the protest of the Leader of the Opposition against clothing regulations, and Sir Keith Murdoch’s statements in the press?
I am advised . that the three items referred to were passed by censorship before being cabled abroad. It is presumed that they were then transmitted to the enemy from a neutral country. As the news items referred to were not subject to censorship on any security ground there would have been no justification for withholding them from publication.
State Financial Statements.
y - On the 20th May, the honorable member for Lilley (Mr. Jolly) asked the following question, without notice : -
Can the Treasurer state whether it will be possible to make available to honorable members the statement setting out the estimated revenue and expenditure of the State governments in the current year, on which the formula included in the uniform .taxation proposals is based? I understand that this information is available in the Taxation Department. It would be of great value to honorable members.
The answer to the honorable member’s question is as follows : -
The compensation set out in the States Grants (Income Tax Reimbursement) Bill wa» not based on the revenue and expenditure of State governments in the current year. The basis of compensation is the average collec-in cost of collection and the estimated cost oftions of income taxes in 1939-40 and 1910-41 widows’ pensions in the current year. The from which is deducted the estimated saving figures areas follows:-
Commonwealth Bureau of Census and Statistics ; Finance, 1939-40, Bulletin No. SI, Page 24 ; Press Notice T N 1167 Commonwealth and State Taxation. 1940-11 ".
Civil Lv.ASB-I-.ENn Goons.
– On the 21st May, the honorable member Tot Dalley (Mr. Rosevear) asked the following questions, upon notice.’ -
The Minister for- Trade and Customs has supplied the following answers: -
Up to the present, tin-plate is the only commodity obtained under lend-lease for which arrangements have been completed for employment of agents to distribute on behalf of the Commonwealth.
So fur as tinplate is concerned the answers to the honorable member’s questions are as follows: -
Such firms as were actively engaged as agents and/or importers of the commodity under pre lease-lend conditions and at the time of conclusion of agency arrangements were, in the opinion of the Government, sufficiently organized and possessed the knowledge to render to the Commonwealth service requisite to the proper distribution of the commodity.
On the basis of a remuneration that will represent no more than a fair return for the services rendered in the work of distribution, in accordance with the principles laid down in the British White Paper of 10th September, 1941 , on export policy and distribution of lendlease poods.
See answer to 1.
No offers to act as agents f for distribution of tinplate were rejected. . Employment of Women
d. - On the 21st May, the honorable member for Fawkner (Mr. Holt) asked, without notice, what percentage of the male base rates was being paid to females at present engaged in government aircraft factories.
The Minister for Aircraft Production has furnished the following answer. -
The female adult base rate was originally approximately 60 per cent, of the adult male base rate, but it is now 62.5 per cent.. owing to a slight difference caused by variable incidence of the cost of living adjustment clause. In addition, adult females employed on work formerly done by males are paid the full male margin for the various classifications.
Gifts to MEMBERS of Forces.
Mr. CALWELL asked the Minister for Air, upon- notice -
– The answers to the honorable member’s questions are as follows ; -
Army Magazine “Salt.”
l asked the Minister for the Army, upon notice -
Mr. FORDE - The answers to the honorable member’s questions are as follows: -
Major M. ErskineWyse Captain M. B. MacCallum Captain E. H. Valkenberg
Lieutenant W. L. Lee
Lieutenant R. A. Paul!
Lieutenant J. Littlewood
Lieutenant H. Gilchrist
? 028 491 491 400 400 400 400
? s. d.
Vol. 3. No. 5- 4th May, 1842 578 5 0 Vol. 3. No. 6- 11th May, 1942 0B5 5 0 Vol. 3, No. 7- 18th May, 1942- 544 0 0 4. The matter is now under consideration.
Cite as: Australia, House of Representatives, Debates, 27 May 1942, viewed 22 October 2017, <http://historichansard.net/hofreps/1942/19420527_reps_16_171/>.