17th Parliament · 2nd Session
Mr. Speaker (Hon. J. S.Rosevear) took the chair at 2.30 p.m., and read prayers.
– Will the Minister representing the Minister for Health state whether or not reports have been received recently concerning the shortage of beds in tuberculosis wards in sanatoriums throughout Australia? Can the honorable gentleman say whether or not the position has improved? Is there any substance in the report that persons who are urgently in need of attention are kept waiting for long periods for beds in both sanatoriums and hospitals in which this treatment is provided?
– I believe that it is safe to say that there has not been any protest because of inability to obtain beds ; but the lack of nursing service has certainly been a ground for complaint. I shall consult the Minister for Health, in order to make sure of the facts.
– In view of the far-reaching importance of the subjects dealt with by the International Monetary Agreement and the Agreement for the
Constitution of the Food and Agriculture Organization, of the United Nations, will the Prime Minister consider deferring the consideration of this legislation until the House next meets, in order that the widespread industries and interests concerned may have an opportunity to consider them before they are finally dealt with?
– I shall consider the right honorable gentleman’s suggestion.
– I ask the AttorneyGeneral whether or not there were instances of persons “border-hopping” prior to the recent return journey of certain school-boys from Sydney to Melbourne? “Were prosecutions launched against all offenders who were discovered? If only some prosecutions have been instituted, is it intended to proceed with the prosecution of these schoolboys? If so, why are they singled out for differential treatment?
– Under the National Security Act, prosecutions for breaches of the transport regulations may be authorized by the Attorney-General or the Minister for Defence, or persons authorized by either of them. I cannot say whether or not prosecutions have been instituted for “ border-hopping”, but 3 shall investigate the matter. The decision as to -whether or not a prosecution shall be launched against the school-boys referred to will be made by me, when my department receives the recommendation from the appropriate authority.
– I wish to direct to the Minister for Transport a question concerning the “ reprehensible “ schoolboy law-breakers who crossed the border in trying to get back to school. Has the Minister seen in the press to-day a statement by Captain Holyman that the Minister’s statement yesterday that special advantages had been given to pupils of the Geelong Grammar School by the Australian National Airways Limited were completely false and that his son had not been in Sydney for some time. If that is so, will the Minister make a dignified withdrawal of his statement?
– The honorable gentleman has -asked two questions, the ‘first concerning the provision, of a special plane, and the second, concerning Captain Holyman’s son. Following upon Captain Holyman’s published denial of the contents of the report furnished to me by officers of my department, regarding the travel of scholars of Geelong Grammar School, from Sydney to Melbourne, I again contacted Mr. Heery, Assistant Director of Rail Transport in Sydney, who has advised me that the first information received about young Holyman was from the priority officer, who said that some one had made application to him on behalf of the director of Australian National Airways Limited for a . priority permit for his son’s return to Melbourne. The priority officer got in touch with Mr. Heery, who decided that no permit was to be issued. Subsequently, a Sun newspaper reporter named Adams contacted Mr. Heery, and questioned him regarding information he had secured relative to certain applications which had been made for return rail travelMr. Heery advised the newspaper reporter of what had happened, and Mr. Adams said he would check up on his information, but refused to divulge its source. Mr. Adams reported to Mr. Heery later that as far as he could ascertain, the son of the director of Australian National Airways Limited was Holyman. He stated that he had contacted Captain Holyman at his Melbourne office, but he would not confirm, nor would he deny, that his son had travelled on the plane. This conflicts with Captain Holyman’s published statement that he had made it plain, at the time inquiries were made, that his son was not in Sydney. The next move was that Mr. Heery rang the priority officer, who said that he was led to believe that the boy for whom the permit was required was Holyman, but that he could not definitely establish the identity of. the person who rang up on behalf of the boy’s parents* Mr. Heery tried to contact the Geelong Grammar School this morning, but the headmaster was away. The question about the provision of a special plane should obviously have been directed to my colleague, the Minister for Air. All I have to say is that officers of my department have satisfied themselves that the only persons on the plane -were scholars from the Geelong Grammar School. It is, therefore, very evident that it was a special plane provided for a special purpose. Any one who knows the difficulties of travel to-day would realize that it must have been a special plane, because had it been known publicly that the plane was available to carry people from Melbourne to Sydney, people with much higher travel priorities than those possessed by school-boys would have travelled. Despite what Captain Holyman has said, I am perfectly satisfied that it was a special plane provided for a special purpose.
– Yesterday the Minister made a definite statement that the son of Captain Holyman was one of those who applied for a special permit to travel interstate. In view of the statemen in this morning’s press by Captain Holyman that his son- was not in New South Wales at the time, will the Minister make a dignified withdrawal?
– My statement in this House yesterday was based on information which I received from my officers. I have no reason to doubt their veracity and, therefore, I make no withdrawal.
– In view of the changed circumstances since the issue in. 1942 of the Control of Stock Foods and Remedies Order, will the Minister for War Organization of Industry state whether or not steps have been taken to amend or rescind the order?
– by leave - This order was promulgated on the 14th. September, 1942, mainly in order to conserve essential material transport. Certain small savings in man-power also resulted, but this was not- the main con.sideration. Salt was in short supply to meet the enhanced requirements of war industries.. Inquiries from various trade sources disclosed, the transport of many thousands of tons- of salt for consumption by sheep, although their needs are very limited ; in most cases they need no. addition to that which they acquire- in their food and water. The order,, therefore, precluded the use of salt for sheep except as was permitted by the State veterinary authorities. No restriction was placed on its use for other live-stock.
Phosphate supplements are used by many live-stock owners in the feeding of cattle, sheep, pigs and poultry. The grave shortage of phosphates for manurial purposes following the loss of Nauru is well known. All phosphates being of national importance, none could be wasted. There* is ample scientific evidence tha.t sheep, event when grazing on abnormally low pastures, do not benefit if given, additional supplies of phosphates, whereas cattle are greatly benefited in similar circumstances. The order, therefore, prohibited the use of phosphates for sheep..
Many brands of proprietary stock-licks were being sold. In general, these contained small quantities of minerals, and for the rest consisted of salt. To have allowed the manufacture and sale of such licks to continue would have been to nullify any savings of salt which the order otherwise would have made. However, in certain areas in. Australia the soil is’ deficient in copper or cobalt. or both. Sheep and cattle which graze on such pastures will die unless they arc provided* with minute- quantities of these elements.. Therefore, provision was made for thoi manufacture of a lick containing a mixture of salt with copper or cobalt.
The advertising restrictions in the order were designed to- eliminate inducement of the needless consumption of these commodities, as well as to economize in the printing and, distribution of. pamphlets, circulars and the like,, and the erection, painting and maintenance of hoardings and signs. The order made provision for manufacturers and. distributors to give all the information necessary for the guidance of buyers or users. The result of this restriction was- that many of the products which previously had been sold mainly through advertisements and the activity of salesmen were withdrawn from sale, with a consequent saving of man-power and materials. The order has resulted in the saving- of substantial quantities of salt and phosphates, which have been made available for more essential purposes. The additional strain on transport facilities imposed by the carriage of thousands of tons of salt also has* been, avoided.
The acute shortage of labour in the rural areas, and the difficulty of mixing stock-licks - particularly in areas that are deficient in copper so that minute quantities of this mineral have to be hand-mixed with salt and phosphates - have inflicted hardship on small farms on which no labour is employed, many of them being worked by wives and children while the husbands are on military service. It is considered that many people -will not supply these minerals to animals unless they can get them ready mixed, and as a consequence dairy production in the district suffers. For this reason, it was considered essential that the manufacture of stock-licks for cattle should be permitted. The manufacture of stock-licks having been allowed, it will be impracticable to confine its use to cattle. For these reasons, the retention of the restrictions on the use of phosphates for sheep was not considered worth while. Whilst supplies of salt and phosphates are somewhat easier, it is still necessary to prevent their use for unessential purposes, and this can be accomplished by the existing control of the distribution and transport of these commodities.
– I lay on the table the following paper : -
– by leave - The Government has given consideration to the future composition of the Commonwealth GrantsCommission, in view of the approaching termination of the period of appointment of its members. It has been decided to re-appoint Professor R. C. Mills, to be chairman of the commission as from the 5th November, 1944, and Professor G. L. Wood to be a member as from the 1st January, 1945. Mr. James Joseph Kenneally, of Western Australia, will be appointed a member of the commission as from the 1st January, 1945, vice the Right Honorable SirGeorge Pearce, whose appointment expires on, the 31st December next. The appointments in each case are to be for a period of three years. An expression of the Government’s thanks has been conveyed to Sir George Pearce for the invaluable work which he has rendered while a member of the commission.
– byleave - I intimated yesterday that the Minister for Commerce and Agriculture (Mr. Scully) would make this week a statement in respect of long-term contracts covering primary products exported to Britain. As the honorable gentleman is attending to urgent business, I make the promised statement in his stead.
The purpose of this statement is to inform honorable members that arrangements have been made with the Government of the United Kingdom for the purchase by that government of Australia’s exportable surplus of meat and dairy products - until the 30th June, 1948, for dairy products, and until the 30th September, 1948, for meat. The details of the arrangements are not completed, but the Government desires to take the first opportunity to inform Parliament of the assurance of stability to these industries for the next four years.
Following consideration by the Commonwealth Government of proposals for the payment of guaranteed minimum prices for particular classes of meat to producers in Australia, negotiations were entered into with the British Government for an understanding regarding prices payable for the exportable surplus under the war-time contract of sale. In the course of these discussions, the question arose of a long-term arrangement for the purchase by Britain of the exportable surplus of Australian meat and dairy products.
These negotiations have been advanced to a stage where it is possible for me to state that a long-term sale and purchase arrangement, covering meat and dairy produce, will be entered into between the two Governments. The arrangement will operate for a period of four years from the 1st October, 1944, to the 30th September, 1948, for meat, and from the 1st July, 1944, to the 30th June, 1948, in the case of dairy produce.
The purpose of the arrangement may be expressed very briefly, namely, the desire of the British Government that Australia shall maintain and, if possible, increase the production of meat and dairy products in order to ensure supplies which are, and will continue to be, urgently needed ; and the desire of the Commonwealth Government to assist to this end, by making available for export to Britain, during the period of the arrangement, the surplus of the products mentioned after provision has been made for home requirements, including Australian services; the supplies which Australia isrequired to make available to British, American and other Allied personnel based on Australia; the quantity which the Australian Government may provide for relief requirements after consultation and agreement with the British Government; and quantities which the two Governments mutually agree shall be supplied to other markets. Final details of the arrangement are still being discussed. The important point is that Australian producers are now assured of markets for their meat and dairy products for the four years during which the arrangement will operate.
The surplus production of all classes of meat - beef, mutton, lamb, pig-meats and offals - comes within the scope of the arrangement, but in respect of pigmeats, further discussions will take place, well before the beginning of the last two years of the arrangement, to determine the maximum quantities which Britain will take during these two years, namely, from the 1st October, 1946, to the 30th September, 1948. It will thus be possible for the Commonwealth Government to give adequate notice to pig producers of any material alterations in the pigmeat plan, which will continue to operate in its present form until the 30th September, 194.6. ‘Special reference has been made in the arrangements to the resump tion of the trade in chilled beef, and provision has been made for the progressive importation by Britain of this class of meat when the shipping position permits. Consultations will take place between the two Governments as to the share of the chilled beef trade, and the proportion of chilled space to be made available to Australia, when the shipment of this commodity can be resumed by the Commonwealth Government.
Provision is made in the arrangement for the export of canned meats to be the subject of annual negotiations. It has been further agreed that the general terms and conditions of the arrangement for carcass meat, with particular reference to prices, will be subject to review at the end of two years at the request of either Government on the grounds of substantial alterations in conditions.
While details regarding finance cannot yet be disclosed, it can be stated that prices at present being paid for various classes of meat for export under the Commonwealth Government meat purchase plan will be maintained. It is possible that slightly higher prices may be paid by the Commonwealth Government for mutton and offals of all classes, but it is not likely that there will be any alterations of prices now being paid for beef, lamb and pig-meats.
It is considered that the present prices paid by the Commonwealth Government for meat for export are at a satisfactory level from the point of view of producers. The arrangement covering, as it does, the exportable surplus for a period of four years, will give that stability to the meat industry which producers have so earnestly sought in recent years and should enable them to plan for the increased production of all classes of meat which the British Government and the Commonwealth Government so urgently need.
In regard to dairy products, agreement has been reached on the major principle involved, though the form in which the payments for the several products will be made by Britain, and details of the arrangement generally, have yet to be determined. This development represents a further major step towards the objective of ensuring for producers a lengthy term of market stability. In March, 1943, the Commonwealth Government accepted a submission as to costs furnished by the representatives of the industry, and subsequently agreed to subsidize manufactured dairy products for a period of one year; commencing the 1st April, 1943, to an extent calculated to bring the average return to dairyfarmers to the figure named by the industry as representing average production costs, namely,1s. 6d. per lb., which is the commercial butter equivalent, delivered at factory.
A second step was taken this year when, consequent upon a revised cost submission by the industry, it was decided that, for a period of two years commencing April, 1944,, assistance would be provided on a basis calculated to. bring the average return] to the figure stated in the. submission. - approximately 1s. 71/3d. per lb. - commercial butter equivalent. With the need for an extended period of stability well in mind, the Government informed the industry that it would announce its future policy in the matter of assistance twelve months before the termination of the period covered by the new arrangement. By the completion of a long-term contract with Britain, the industry is assured of market stability with, good prospects of payable returns for a four-year period. Finality has not yet been reached in the matter of values under the new arrangement. In negotiations regarding the long-term contract, however,it was claimed that the overall payment for sales to Britain shouldbe such as to cover production costs, and it is. assumed! that this request will be met.
The arrangement regarding the longterm purchase of eggs was concluded between the Commonwealth Government and the British Government some time ago. The British Ministry for Food has now undertaken to purchase the whole of the Australian exportable surplus of eggs as egg powder or, if circumstances permit, as eggs in shell, for the seasons 1944-45 and 1945-46, and a quantity not exceeding 1,000,000 cases of eggs in shell or their equivalent in egg powder for the season 1946-47. The maximum of 1,000,000 cases set for 1946-47 is far in excess of the greatest quantity ever exported from Australia in one season before the war. Consideration of the purchase of the Australian egg surplus in 1947-48 will be given in the light of circumstances which have developed by December, 1946. I lay on the table the following paper : -
Surplus Primary Products - Sale to United Kingdom - Ministerial Statement. and move -
That the paperbe printed.
Debate (on motion by Mr. Fadden) adjourned.
– Has the Minister for Transport anything to say about the removal of wool which is now accumulating in country centres due to the restriction of rail transport? Has he made any arrangements for the transport of wool by motor vehicle to appraisement centres over distances of not more than 150 miles ?
– A conference, convened by the Commonwealth transport authorities, and attended by representatives of the State transport authorities, is being held in Melbourne to-day to consider transport priorities for goods of all kinds, including wool. I hope tobe able to make a statementon the subject later.
– by leave - Last week, the honorable member for Balaclava (Mr. White) asked a question regarding an order which had been placed overseas for £2,000,000 worth of aircraft. The matter was referred to in the press under the heading “Australian plane order deplored “. I promised the honorable member at the time that I would have a reply prepared..
It is understood that under an arrangement between the Prime Minister of. the United Kingdom and the President of the United States-, it was agreed that Britain would continue the manufacture of operational aircraft and that the United States would not only supplement Britain’s production in combat types, but would, in addition, because of its potentialities,build transport types. As a result, Britain has no transport types in production suitable for civil aviation purposes, except one machine, the York, which is a converted Lancaster bomber. The York is a good aeroplane, but it is not basically designed for transport work. As a result of this arrangement, it has always been understood that when the war ended and suitable transport types would be required for civil aviation purposes, the BritishCommonwealth of Nations would, if suitable supplies were not available from Empire sources, obtain supplies from the United States of America, where suitable aircraft are likely to be in abundance. Even British Overseas Aircraft Corporation, Britain’s chosen instrument, is now using a large number of American aircraft, and no doubt will continue to use American aircraft until Britain itself is in a position to supply its own needs. Much as we deplore the fact that British civil types are not available, we must, as true Britishers, applaud the reason which has prevented Britain from having those types available. War needs come first. Australian National Airways Limited, and not the Commonwealth Government, is purchasing these American aeroplanes. The managing director of Australian National Airways Limited has, however, made it plain that at the present time he can purchase only American types of aircraft, and that purchase is not an indication that he will not buy British aircraft when they become available. Unfortunately, it will be at least two years from now before modern civil types of aircraftwill be available from British manufacturers. In the meantime, airline operators in Australia are finding it extremely difficult to carry all passenger and freight traffic offering, and the Government, rather than deny to the travelling public the facilities for which they are pressing, has authorized the importation of a limited number of aircraft for internal aviation purposes. The Government, too, is sponsoring the acquisition of certain aircraft for overseas operation, and they are not American aircraft. If honorable members have any idea that theCommonwealth is favoring American aircraft in preference to British they are wrong. Our aircraft production pro gramme alone provides sufficient evidence to the contrary, since it includes Beauforts, Beaufighters, Mosquitoes, and Lancasters, all of which are British aircraft, and also the Mustang, which, although an American aircraft, is built to British specifications and employs the Rolls Royce Merlin engine. It may interest honorable members to know that preparations are in hand for the production of the Merlin engine in Australia.
Proposed Parliamentary Committee -
– Has the Prime Minister had an opportunity to read the report of some observations which I made on the subject of migration during the debate on the Estimates for the Department of the Interior? If so, will he consider my suggestion that an all-party parliamentary committee should be set up to plan a long-term migration policy, and that the subsequent administration of the plan should be placed under the direction of a parliamentary committee of three ? Will the Prime Minister make a statement on the subject this week?
– I read the very notable remarks which the right honorable gentleman made, and I am in sympathy with his suggestion for the setting up of a parliamentary committee to inquire into, and report upon, the proposal. I am disposed, however, to await the report before agreeing to entrust the administration of the scheme to a parliamentary committee. At this stage, I am opposed to the idea. However, I commend the proposal to appoint a parliamentary committee to survey the field and make recommendations to the Government and to Parliament.
– Will the Prime Minister give urgent consideration to the establishment in Queensland of an organization to give advice and information to members of the Allied fighting services who are desirous of staying in this country when the war ends?
– Can the Minister for Labour and National Service say whether any progress has been made in the direction of providing more labour with which to overcome the present serious shortage of firewood for the goldmining industry of Western Australia?
– I cannot suggest anything at the moment which would be likely to improve the situation. The honorable member himself took part in a conference two years ago between representatives of the Commonwealth and the State Government of Western Australia at which a quota of 4,500 men was fixed to enable the gold-mining industry to continue in existence. It has been found very difficult to get sufficient firewood to keep the mines going, but so far this has been done. I do not think that any of the men, for whose release from the Army the Prime Minister has arranged, will be permitted to go into the goldmining industry unless the Department of Supply and Shipping will agree that the entire permissible quota is not necessary for the production of strategic metals. I have asked the Western Australian Directorate to look into the matter again to see whether a few men could be added to the number of those engaged in cutting firewood in order to keep the quota up to its full strength of 4,500.
– Some time ago, I asked the Attorney-General whether he could supply me with particulars regarding the fees paid by the Commonwealth to Mr. .Alderman, and the terms and conditions under which the payments were made. Can he inform me when this information will be available?
– The preparation of an answer involves obtaining returns from several departments, but I think that the information will be available tomorrow.
– It has come to my knowledge that certain factories in the Newcastle area are in the position to commence the manufacture of galvanized- iron, wire netting, piping, and other articles urgently needed by primary producers as well as city users. In view of the acute shortage of1 these materials will the Minister for Munitions make arrangements for the factories to go into production ?
– The great demands of the fighting services for those products must first be met, because the services must be fully supplied with all their essential needs. The industry is also short of efficient labour. We have endeavoured to provide its labour needs, but men are not available. We shall, however, relieve the position at the earliest possible moment.
Flying Offices R. N. B. Stevens, D.F.C. and Bah:
– Has the Minister for Air had the opportunity to investigate the report published recently in the press that Acting Squadron Leader Stevens, a celebrated pilot in a famous fighter squadron, had been reduced to the rank of flying officer after his return to Australia on compassionate leave to see his sick wife?
– Yes. The press statement presented the matter incorrectly and unfairly. Members of the Royal Australian Air Force overseas, who have been repatriated to Australia at their own request on compassionate grounds, relinquish their acting rank. It was on these grounds that Flying Officer R. N. B. Stevens, D.F.C. and Bar, was repatriated to Australia. Relinquishment of acting rank on these grounds does not preclude an officer, after arrival in Australia, from being appointed to a post carrying similar acting rank. That has in fact happened in Flying Officer Stevens’s case. He is now occupying a squadron leader’s post at an operational training unit in Australia. Elevation to the higher rank in these circumstances is contingent on the member filling the post satisfactorily for three months. It must be remembered, however, that if a senior officer who has equal or better qualifications becomes available, it normally follows that such an officer will be appointed to the post.
The acting rank of a member repatriated to Australia is retained if gained in, or retained throughout, active operations against the enemy overseas and thereafter held continuously until the time of allotment for service in Australia, provided that the member is not being repatriated at his own request on compassionate grounds or for disciplinary reasons.
I think I ought to inform the House of what was signed by this very distinguished officer who has a gallant record. He signed this undertaking -
In consideration of my being repatriated to Australia on compassionate grounds, 1 accept the condition that I will relinquish any acting rank held by me at the date of posting.
– He would have to sign such an undertaking in order to return to Australia.
– That is nothing.
– The statement I made when a matter of this kind was first raised nearly two years ago was that I would not agree to reduction of rank of any Royal Australian Air Force officer who earned promotion abroad and had returned to Australia at the specific request of the Commonwealth Government to stiffen Australia’s powers “of resistance. Honorable members know quite well that if men who returned for compassionate reasons or any other reason than that of stiffening our powers of resistance were to retain their acting ranks, all sorts of complications would arise in the service. My undertaking has been honoured absolutely. The criticisms from time to time are uninformed and create disturbance within the Air Force.
– In view of the fact that early next year the Government will review its financial policy, particularly in respect to post-war planning and the provision of economic security for the people, and in view of the fact that many liberal-minded employers have established schemes whereby certain percentages of profits are placed in funds to provide for the security of their workers in the form of pensions, retirement allowances and the like, will the Treasurer ascertain whether it is practicable to enforce such schemes in private industry as a general policy?
– I shall give consideration to the honorable gentleman’s request for an examination of the matter.
– Does the Minister for Transport know that the punt at Peat’s Ferry has been broken down for more than a week and that road traffic between Sydney and Newcastle has been considerably reduced as a result? Will the Minister take steps urgently to have the service restored in view of the fact that it is important to keep the road between the two cities open?
– I was not aware of the breakdown of the service until the honorable member brought the matter to my notice, but immediately he did so I communicated with Mr. Neill, Director of Emergency Road Transport, New South Wales, because this ferry operates under the New South Wales Main Roads Board, and I ascertained that the stoppage was due to a mechanical defect in the boiler. As the result of the honorable member’s representations, the repairs have been expedited and I am pleased to announce that the service will be restored as from Friday next.
– In connexion with large advertisements appearing in the Australian press during the referendum campaign, headed “Primitive Barter or Organized Marketing “ and “ From John Curtin to the Man on the Land “, will the Attorney-General state whether the cost of their preparation and publication was borne by the Government, the Labour party, or the honorable member for Wimmera (Mr. Wilson), whose name appeared at the bottom of each as the person authorizing the advertisement? If the cost was borne by the Commonwealth, did the Attorney-General authorize such expenditure and also the use of Mr. Wilson’s name? In view of the deliberately misleading statements contained in those advertisements, bearing Mr. Wilson’s authority, what action does the Attorney-General propose to take, now that the referendum has been defeated, to see that the truth shall be told to the prim a rj’ producers ?
– We discussed such details a few days ago. I shall endeavour to find answers to the early part of the honorable gentleman’s question. The advertisements, I think, really relate to the Department of Information. Those authorized by the honorable member for Wimmera were convincing and accurate.
– Before this sessional period ends, will the Minister for War Organization of Industry make a statement of the policy considerations which determine the issue of permits to build dwellings on farms and in country towns? I seek the information as the result of my inability to understand the motive behindthe various decisions. For instance, to-day I received a letter from a man who tells me that he was recently discharged from the Army after about three years of service, and that he sought permission to build a home at Myrtleford. He has1,500 concrete bricks available with which to build a home. He requires no labour, for he is prepared to build it himself. Yet he has been refused a permit to build. A statement from the Minister setting out the policy would be very helpful.
– I shall endeavour to have a statement prepared for presentation to the House before it adjourns.
Galvanized Iron - Housing
– Will the Minister for War Organization of Industry confer with the Minister responsible for the disposal of surplus war goods to ascertain whether it will be possible to release supplies of galvanized iron so that settlers in country districts may be able to provide a proper covering for their houses and outbuildings? The only material available at present for this purpose is fibro-cement sheets and it is not suitable for use in country districts.
– I undertake to confer with my colleague. An assurance has already been given in regard to materials which we hope will become available shortly for distribution. Some State government authorities, however, will have priority in regard to such materials, for they may have government projects in hand, or about to be put in hand, for which the materials will be needed. Their requirements will consequently need to be taken into consideration.
– I ask the Minister whether materials in regard to which such priorities will apply will be suitable for use in connexion with State housing schemes which will be financed in part by the Commonwealth? If workmen’s cottages are to be erected will city work have preference over work in rural districts? If this is so will it not be obvious that city workers will have a preference over rural workers?
– The information on which the honorable member has based his question and also other statements on this subject is erroneous.
– It was given by the Minister himself.
– That is not so. At the last conference of Commonwealth and State Ministers, a request was made by the Premiers that State governmental and semi-governmental authorities should be informed when material became available for disposal. The Prime Minister acceded to that request.Consequently, State authorities will be informed of materials which become available for disposal, and will be able to bid for them. That relates to materials other than those required for housing. The housing programme is being undertaken by the Minister for Labour and National Service, who will engage State instrumentalities as his agents. I assure the honorable member for New England that it is the policy of the Government that materials for housing purposes shall be made available wherever the buildings are required. .
– For buildings up to what value?
– I believe that the honorable member has made a statement in the House to the effect that permits will be granted for houses in country districts up to a value of only £400. That is not true.
Mr.Spender. - Generally, it is true.
– The limit is determined by the requirements of the families concerned. For a small family the limit might be £400, but for a large family it would be much higher. The Government will endeavour to use the labour and materials available to the utmost advantage. As many permits as possible will be granted for rural areas.
– In view of the fact that many women are replacing men in full-time outdoor employment on farms, I ask the Minister for Supply and Shipping whether he will consult the Minister for Trade and Customs to. ascertain whether clothing coupons can be issued to such women workers equal to the coupon value of clothes issued to members of the Women’s Land Army, provided that the Coun try Women’s Association is willing to sponsor individual applications? TheCountry Women’s Association of Tasmania has intimated to me that it is prepared to act in that capacity.
– I shall place the request of the honorable member before the Minister for Trade and Customs. It may be that the District War Agriculture Committees would be a more effective sponsoring authority, although, perhaps, they might not have sufficient knowledge of women’s needs.
– I lay on the table the reports of the Tariff Board on the following subjects:-
Bounty on Sulphur.
Bounty on Tractors.
Bounty on Wire Netting.
– I ask the Minister in charge of war service homes whether he will consider the practicability of reducing the rate of interest on war service homes in view of the fact that the average rate for Government borrowings has been reduced by almost 1 per cent. since the last adjustment was made in respect of war service homes?
– I shall give consideration to the matter.
– I have received from the honorable member for Wide Bay (Mr. Corser) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance,, namely, “ The urgent necessity of formulating plans to assure maximum assistance by scientific research into the land and stock industries, with a view to increasing production and developing Australia “.
That the House do now adjourn.
– Is the motion supported?
Five honorable members having risen in support of the motion,
– I visualize the value of a comprehensive national research policy to Australia. The application of science to many of our producer problems would enable them to be overcome, and would improvethe opportunities of rural settlers to exploit great undeveloped areas in this country so that they could sustain substantial populations. Australia, like other countries, must draw upon scientific agencies to solve its problems.. We must display the will to awaken and the spirit and pluck to achieve. Science must investigate our problems by the establishment of research stations from east to west, from Darwin to Adelaide. Pests and diseases must not be permitted to ruin those now on the land and stand in the way of development. From my observations abroad, particularly in Canada, I have reached the conclusion that the value of scientific research along the lines which I have suggested cannot be overestimated. There could be no more important development in the interests of our post-war life in primary producing districts. I believe that the application of science to the problems to which I shall refer would greatly add to the welfare of the whole community. I place on record my warm acknowledgment of the work that has been done by Commonwealth and State Government instrumentalities, and also by private benefactors and specialists. Numerous illustrations could be given of the value of work of this kind over a wide field of activity, yet it must be admitted, that the real job has been hardly started. Among the greatest achievements of scientists have been those of William Farrar, whose experiments in wheat-growing made possible the huge export of Australian wheat, which means so much to this country in normal times. Mr. Farrar produced types of rust resistant wheat which wonderfully suited the conditions of the Australian wheat-growing areas. Undoubtedly, many of the threats and dangers which menace production in Australia could be overcome by the application of scientific principles. Probably our greatest successes in this direction have been achieved in the restriction and almost complete eradication of the prickly pear. It wa3 stated that, in Queensland at one time, prickly pear was spreading at the rate of 1,000,000 acres a year. Probably Mr. Temple Clark was the first man to visualize the possibilities of eradicating this pest by the application of insect control methods. ‘ With the assistance of scientists of the United States of America he was enabled to introduce some cochineal insects into Australia with fairly successful results. Scientific investigation sponsored by the Science and Industry Board and financed by the Commonwealth, Queensland and New South Wales Governments, was done by Dr. Jean White in investigating the possibilities of many imported insects. Eventually he selected one which practically eradicated the prickly pear and brought millions of acres of valuable land back into production. Similar success has been achieved in other directions by the application of science. The State governments have made money available for this purpose within the limits of their capacity. In the aggregate, hundreds of thousands of pounds has been expended, and many fine results have been listed. The work that has been done in connexion with tick quarantine in New South
Wales also deserves mention. The Government of New South Wales, to protect its stock, is spending £200,000 a year in salaries alone on tick quarantine work. For the maintenance of dips and other facilities, the State also provided an amount of £70,000, and for other services connected with the tick menace, an amount of £17,000. The Commonwealth Government pays a subsidy of £46,000 to assist this State, and this expenditure will continue until, with the assistance of scientists, the menace has been overcome. Some years ago, the Cattle Tick Commission estimated that Red Water Disease was responsible for a loss of £7,000,000 in Queensland. Our present unco-ordinated system of combating this disease is illustrated by the fact that the Government of Western Australia provides an amount of £45 a year for investigation of the Red Water Disease. The time has arrived when the Commonwealth Government should establish a national organization to conduct these scientific researches.
I have studied the activities of the Council for Scientific and Industrial Research in regard to tick eradication and Red Water Disease, and whilst they have been attended with some success, much remains to be done. The Commonwealth Government has not been unmindful of the value and necessity of science. In 192.6, it established the Council for Scientific and Industrial Research. I have read many of its bulletins, but, as a layman, I have not always been able to understand them. It is regrettable that the results of this scientific research are not expressed more simply, so that any one may be able to apply their meaning intelligently. Most of the results of the research are communicated to the universities of Australia and have great scientific value, but I consider that a bulletin containing practical advice and explaining the results of experiments should be also distributed among primary producers and others. The work of the Council for Scientific and Industrial Research would be aided by scientists having direct contact with troubles in their own research stations. This institution is held in high regard by the States with which it co-operates, and is esteemed as the result of eighteen years of faithful service. But the institution itself reports that -
With a limited staff available, only a relatively small number of problems cun be selected for intensive investigation.
In 1929, Sir Frederick MacMaster donated £20,000 to found the MacMaster Animal Health Laboratory, which deals efficiently with sheep .problems. As the sheep industry is Australia’s greatest industry, that is a valuable contribution. Then, in 1935’, Mr. Russell Grimwade made a gift for the purchase of equipment not otherwise provided for the Forest Products Laboratory in Victoria. Like the sugar experimental stations that have been established in Queensland, these and other specific research efforts, including the universities, can be fully effective within their own spheres and, being within a specific sphere, their co-operation and assistance becomes easy.
I desire to make it clear that my statements are not intended to reflect in any way upon the efforts of the States. I give them full credit for their valuable work, but I believe that the time has arrived when the Commonwealth Government should establish an Australia-wide national institution along the lines that other nations have been successfully pursuing. In the post-war period, Australia, by the application of scientific discoveries, must avert the threat of loss from seasonal conditions, and develop its vast empty spaces for the purpose of receiving millions of additional people. To achieve these aims, we must endeavour to counteract many disabilities. For example, the drought in 1914 caused losses amounting to £50,000,000. Sir William MacMillan estimated that the drought in 1902 caused losses totalling £200,000,000. Although droughts will continue, we must endeavour to avert the worst of their effects. For the last 26 years, Lake Eyre has not discharged any water because the channels have been blocked with sand. “What institution in Australia is responsible for dealing with that matter and other great national problems? The late Dr. Bradfield offered a solution. “Whether it is right or wrong is not for the layman but for scientists to determine. He propounded a scheme which he claims would provide water for 4,000,000 acre feet, serving parts of four States, in order to guard against drought and the resultant loss of sheep and cattle. He claimed also that his scheme, if given effect, would enable an additional 3>000,000 sheep to be run in the area. He asserted that evaporation would increase and thunder-storms would result, thus giving a more certain rainfall in that now arid area. He said -
When the rainfall in Central Australia is thus increased, dewfall will also increase and become constant, soil erosion caused by the winds will cease, and the surface will become clad with indigenous vegetation which will protect the soil and enhance its fertility and the temperature will be lowered.
Scientists in other countries - perhaps even in Australia - should analyse that important plan. If his solution is considered to be impracticable, scientists may be able to suggest another scheme. His proposition certainly merits consideration and demonstrates what the mind of man can at least conceive.
Australia should develop water conservation and hydro-electric schemes. The value of even the smallest waterways, dammed for the purpose of irrigation, is inestimable. Big national schemes of water conservation and hydroelectric power will be a boon to primary producers, and the cheap power will enable our industries to compete with foreign manufactures in the markets of the world. “Water conservation will create wealth, prevent losses from drought, and enable more people to settle on the land. Science alone will be able to give practical effect to these plans. To face our problems, big and small, we must build a national scientific research organization on the foundation of the existing Council for Scientific and Industrial Research. As Australia has in one year expended more than £500,000,000 on the war, it should not be beyond our means to provide a few million pounds in peace-time for these purposes. The investment will be returned one hundredfold. From year to year, we lose millions of pounds because of the depredations of rabbits, dingoes, blowflies, botflies, ticks and pleuro-pneumonia, which play havoc in this country. They emphasize the necessity for establishing an institution to tackle further these problems. In urging the creation of such an institution, I shall show what other countries’ have accomplished, while Australia has remained’ almost dormant. Such an institution was established in Canada 58 years ago. The institution which I propose will educate our own young scientists and give them a special knowledge of Australian problems. They will be able to assist in the development of this young- nation. Australiaa scientists will be able to demonstrate the value of their researches, and earn the respect of all primary producers and others who seek their help. In some measure, the Council for Scientific and Industrial Research has not been wholly successful, because it does not transmit its discoveries to individuals. For this grant an amount of only £150 has been appropriated to enable it to publish the results of its researches. Unfortunately, those discoveries, though comprehensible to scientists, are unintelligible to the layman. Great Britain established the first experimental station in the world in 1843 .at Rothamstead, and two years later the first science college at Cirencester. I had the pleasure of visiting that college, and I learned that early interest resulted in men being educated there from all European countries; so was built up the European agricultural system that exists to-day. [Extension of time granted.] In Great Britain, the farmer and the market gardener are now assisted by practical demonstrations and’ literature prepared by experienced men, and production has increased by 50 per cent, since the outbreak of war. By the application of scientific methods, the United States of America developed the heart and soul of that continent. “Water conservation and hydro-electric schemes were introduced, and the parched earth gave way to rich farm-land. The area of the United States of America is 2,977,000 square miles,, whilst the area of Australia is 2,974,000 square miles. The Union of Soviet Socialist Republics lias- an area of 8,173,000 square miles to develop - approximately three times the area of Australia. Beginning with a poverty-stricken peasantry, with two wooden ploughs in every three, it has achieved within a few years the greatest mechanical rural production in all Europe. That has been made possible by its scientists. The national- system includes mechanical tractor stations, which provide technical research- and education. Technical experts and scientists are employed, who. live and work among the peasants, and in their laboratories give practical effect to what they have observed. The life of stock has been cared for and improved,, and fruit and other plant life, as. well as grain,, has been developed. Unproductive regions have been made productive by scientific methods. They have grown and are growing on the cold eastern slopes of the Caucasus^ fruit which comes tomaturity within the short period of their sunny season. They have developed- a frost-resisting wheat, and the seeds of plants which mature early and- grow to profusion in frozen belts.. Grains havebeen developed for all classes of soil. Thestock disease problems, of the peasantshave been attacked, and the plant-grower, whether on farm or market garden, has been assisted. Russia, like Canada and the United States of America, has devised new plants for every region. It sent its scientists to Iran, and- secured stock from which oranges, grapes and other fruitshave been produced, in every area and under all climatic conditions^ some of them below zero. Its- scientists also visited South America, and on the hills of Chile secured sixteen varieties of potatoes that were frost-resistant. These are being- propagated by them at their national experimental, stations. Russia has 4,000 national experimental stations, as well as 6,000 national tractor stations, which make possible a great effort by science to assist those who are on the land, and bring into productivity regions hitherto undeveloped. Its scientists, like those of Canada and the United States of America, have not exhausted their accomplishments. Canada, with an area of nearly 3,500,000 square miles, has developed irrigation and hydro-electricity. The Science Institution at Ottawa was established nationally 58 years ago. There is no similar institution in Australia. Russia called its scientists together, and one project decided upon was-. the electrification of agriculture throughout the country. They planned a basis for the construction of’ hydro-electric stations, and prior to the war were generating more electricity than any other
European country. New farm machinery has been devised, and 90 per cent, of the total number of tractors in the country nas been manufactured locally. Each, winged tractor daily irrigates 210 acres of parched land. By the invention of cotton-picking machines, men and women are relieved of monotonous labour and freed for more creative work. I urge the establishment in Australia of a national institution of industrial research, which will give to scientists who are already here, and others who may be induced to come to this country, the planned scientific job of dealing with the troubles of all land-holders, including those of the home gardener, none of which are too small and none too great. Scientific cooperation with the .States could be invited, and would be given. Any valued State research institutions could be included in the scheme. The achievements of all other nations should he investigated. Such an institution would profit by the accomplishments of others, and could apply them to Australian conditions. It was Canada’s achievement which first convinced me of the necessity for a scheme on similar lines. I had the pleasure of visiting twice its central experimental station. There are now 38 State branch stations, 10 sub-stations, 190 illustration stations, and 47 district experimental sub-stations, which stretch across the dominion from the Atlantic to the Pacific Ocean, and cater for every condition of stock and plant life. Scientists have revolutionized Canada, even though it is snow-clad for six months of the year. I was struck by the value of the work that had been done, and the confidence of the producers. The possibilities of both the colder and the hotter regions have been investigated, and new fruit and other seeds have been developed which, after tests, have proved suitable for every region. The basis of the organization is one great unit. The problem of the quick marketing of young beef has been tackled and overcome. I saw this beef passing through the packing houses, destined for England, two weeks after the beasts came off the snow. For 50 years, attempts have been made to produce a hog which would capture the British market. Hogs were imported from Denmark, but that strain was dis carded and British stock was continued as a foundation. Greater virility was obtained ;by importing the same British stock which, for more than a century, had been produced in Sweden. The standard hog product exported has captured approximately SO per cent, of the British market, and also forms the basis of 97 per cent, of the stud stock of the dominion. Every breed of dairy cow has been studied in all climates and under all conditions. The best examples produced in other countries has been imported, and the endeavour has been made to produce better stock. When a farmer produced a world record cow, the Government paid £3,000 to him for it in order that her great productive value might in the future be transmitted through the herds of Canada. Natural grasses have been crossed, and a droughtresisting grass has been produced. In the Mitchell and Flinders grasses, Australia has better varieties with which to commence than had any other country. Our grasses must be acclimatized in different parts of the Commonwealth, and by means of crossing other grasses must be produced which will be suitable for our varied conditions. The aid of scientists should be enlisted in this connexion. Cold Canada has produced sufficient tobacco to meet its own needs. Queen bees have been raised which can live in its cold climate. Work has been concentrated on those which swarm least, eat less, and produce more. The export market value of the dominion has increased by millions of pounds yearly. The wealth thus made possible has been recognized alike by the nation and the producer. The farmer is assisted in his fight against disease and weeds. The Council for Scientific and Industrial Hesearch has stated that Australia suffers probably more than its share of losses from these causes. [Further extension of time granted]. National funds and effort must be pooled under one national plan, for the use of science in our industries. Nothing is too small or too large for the scientist to tackle if our country is to hold its place among our competitors and our produce compete with the product of science overseas. I am confident that, with the co-operation of the States, we would be able to initiate an
Australian institution of great value, one which would be to the Government and to the producers what a sign-post on the road is to the traveller, pointing two ways - the way we should go, and the way we should not. I am sure that if we have the will to establish such an institution, along the lines of that in Canada, we will have the spirit and the skill to achieve an effective instrument.
– I am glad that the honorable member has raised the subject of scientific and industrial research, even though I consider that the House might at this time be engaged upon more important business. The motion shows that honorable members are taking an increased interest in scientific research.
– The honorable member could have discussed the matter during the debate on the Estimates.
– I have an idea that he had his notes prepared to speak during that debate, because he mentioned the Estimates in the course of his remarks. This is a subject to which Parliament could with advantage devote a good deal of attention, but much of what the honorable member said ought to have been addressed to the State governments. This is a field wherein both the Commonwealth and the States have responsibilities, and the States are very jealous of their rights. One of the difficulties associated with scientific research lies in conveying to the primary producers the results of researches undertaken by the Commonwealth. Every one knows that primary production, generally, is the concern of the States. They have their Departments of Agriculture, which have functioned for many years, and within the departments there are sections dealing with various kinds of primary production. It is of little use for a research organization to embark upon investigations unless the results can be passed on to the primary producers themselves. It would have been much easier to give effect to the proposals of the honorable member if the referendum had been agreed to, because then the Commonwealth Government would have known that the people of Australia looked to it to set up a national research organization, and to formulate plans to ensure the full utilization of the country’s resources. However, when one government is responsible for conducting research, while another is responsible for the application of the results to primary production, the matter becomes complicated.
The honorable member said that he wished to pay a tribute to the work of the Council for Scientific and Industrial Research. That body has undoubtedly done a great deal of very valuable work, particularly during the war. When the war is over, and the history of its achievements is written, every one will wish to pay tribute to it for what it has done. Unfortunately, because of security reasons, it is not yet possible to disclose the full extent of its work. While the honorable member made some complimentary references to the research work being, done in Canada and the United States of America, he apparently is not aware that the Council for Scientific and Industrial Research is doing in Australia work just as important as that being done anywhere else in the world. He spoke of research workers in the United States of America sending all the way to Russia for seeds, and sending somewhere else for plants. The Council for Scientific and Industrial Research has shown similar enterprise. For example, it sent to Russia for seed of the Russian dandelion, with a view to introducing the plant here as a source of rubber. From Mexico it obtained a guayule plant, and experiments have progressed far enough to indicate that, in this plant, we have something which might, after the war, provide us with rubber in commercial quantities. However, further investigations have still to be made. There are several divisions within the Council for Scientific and Industrial Research, each concerned with problems of great importance to the primary producer. One of them is the division of plant industry. At the outbreak of the war, this section set out to discover whether it was possible to produce vegetable seeds in Australia. Previously, large quantities of vegetable seed had been imported from abroad. As a result of experiments, there was produced in Australia, first experimental quantities of vegetable seed, and later supplies on a commercial scale, so that Australia is now independent of overseas countries in this regard.
Before the war, Australia relied upon other countries for drugs of various kinds produced from plants. The Council for Scientific and Industrial Research sent to various countries, including India, and obtained plants. It experimented with the growing of those plants in Australia with such success that many drugs formerly imported are now produced here. Some of this work has been carried on not very far from Canberra itself. The division of plant industry has also experimented in the control of diseases affecting the tobacco plant, with the result that a method has been discovered to prevent mould in tobacco leaf, a discovery which has saved tobaccogrowers many hundreds of thousands of pounds. The entomological division has concerned itself with the control of pests which were causing great damage to stored wheat and wool. Because of transport difficulties arising out of the war, large quantities of wool and wheat had to .be stored in Australia under conditions which favoured the development of pests, As the result of the experimental work of the Council for Scientific and Industrial Research, much waste has been prevented.
The honorable member mentioned the work being done in the animal health and nutrition section. The MacMaster Laboratory, in Sydney, founded as the result of a gift by Sir Frederick MacMaster, has provided farmers and graziers with much help in matters affecting nutrition. In conjunction with the State Government of South Australia, the council has conducted extensive researches into soils. In the irrigation areas of New South Wales and Victoria, research stations have been established, but here difficulty has been experienced in passing on to the farmers themselves the benefit of the work achieved. A great many problems arising out of the canning and dehydration of food have been solved by .the research workers of the Council for Scientific and Industrial Research. I have .visited many of the research stations in various parts of Australia, and I can assure honorable members that they are doing far more work than is generally realized. Not long ago, I visited a research station at Stanthorpe, in southern Queensland, where experiments were being conducted into the best kind of stock upon which to graft apple trees. I understand that, up to the present, apple trees of all varieties have been grafted mainly on to Northern Spy stock. The quantity of fruit that can be garnered from an apple tree depends very largely upon the virility of the stock to which the scion is grafted. If a more virile stock could be evolved it might be possible to increase very considerably the quantity of apples produced.
– Surely we do not want to do that to-day.
– Not at present, .of course, but we hope that, after the war, we shall be able to find overseas a market for all the apples we can grow. At the Stanthorpe research station it was demonstrated that an apple stock could be developed which, if distributed throughout Australia, would result in considerably increasing the quantity of apples produced, without any additional labour on the part of the orchardists. I was informed, however, that there was lack of co-operation on the part of the State authorities. The few orchardists close to the station were very interested in what was going on, but the State Department of Agriculture took very little notice of it. I believe that if intimate discussions could be arranged with State Departments of Agriculture from time to time, it would be possible to achieve effective co-operation between them and the Council for Scientific and Industrial Research. That, of course, is a problem which lies more within the sphere of the Minister for Commerce and Agriculture (Mr. Scully) than within my own sphere as Minister in charge of the Council for Scientific and Industrial Research. However, insofar as we can have those discussions, I assure the honorable member that we shall do our utmost to achieve even greater co-operation between ourselves and the States in the formulation of some sort of plan.
The Council for Scientific and Industrial Research has always done a great deal of investigation relating to secondary industries. I am not at liberty to divulge the details of many of these investigations, because they concern matters which would affect security, but I can say that some of the scientific implements 0 £ war which have been developed through the research work undertaken by the council have been commented upon very favorably in London. In fact, one piece of scientific apparatus evolved by the council has been standardized by the British “War Office. So it will be evident to the House that scientific and industrial research in this country has been undertaken on a considerable scale and has contributed very much to the welfare of the people of this country. I am not saying that our organization is perfect. 1 have pointed out that this is a field in which both the Commonwealth and State Governments are interested. I believe that we could better that organization by achieving greater co-operation. I take this opportunity to inform the House, without going into details which have yet to be settled, that I, as Minister in charge of the Council for Scientific and Industrial Research, the Minister for Commerce and Agriculture (Mr. Scully), and the Minister for Post-war Reconstruction (Mr. Chifley) have been considering a plan for research into the wool industry. We believe, as all honorable members believe,, that the wool industry is of vital importance to this country and that the Government could well afford to expend a very considerable sum of money on research associated with both the production of wool and the manufacture of textiles. That plan has very nearly been completed. It involves considerable extension of research work on both the biological side of wool production, and also the textile side. I shall leave the details of that plan to be announced at a later date by the Minister for Commerce and Agriculture, who is. perhaps more directly concerned with it than I am. But it is opportune, during this debate. in which matters of research have been raised, to advise the House that as far as the wool industry is concerned, the Government’s plans are well advanced. The honorable member for Wide Bay said that the Government should formulates plans. [Extension of time granted.] He did not go into any detail as to what those plans should be. We already have a plan in this country for scientific and industrial research. The plan is that the Council for Scientific and Industrial Research, which is a Commonwealth body, shall undertake all the necessary work. As the honorable member pointed out,, the council cannot undertake research work into all the problems which arise. We can only concentrate our limited scientific resources on the most pressing problems, and for the other problems we have to rely on information from other countries.
– On that statement the Council for Scientific and Industrial Research does not undertake all research work.
– That is true, but no country in the world can undertake scientific research into all the problems which arise from day to day.
– We have an arrangement whereby we obtain information from overseas.
– Yes. Our officers overseas keep us advised of what is going on abroad, and, by mutual arrangement we undertake special problems of research in this country and pass the information to other countries in return for the information that they give to us on other problems. The honorable member mentioned that we did not spend very much money on scientific research. That is perfectly true; but the major blame for that, if there is blame, rests with private enterprise. In other countries’, private enterprise expends huge sums of money on scientific research.
– In which countries is that done?
– For example, in the United States of America.
– Would the Minister say that that applies to Great Britain?’
– I advise the Minister to be careful. Great Britain is backward in that regard.
– The Broken Hill Proprietary Company Limited does a fair bit of research in Australia.
– That may be true, but private corporations in the United States of America expend more money on scientific research than is expended by the Commonwealth of Australia. At the same time, I would say that quite a number of enlightened individuals in the community, such as -‘Sir Frederick MacMaster, understanding the importance of scientific research, have from time to .time donated considerable sums of money for that purpose.
– And Peter Waite, of South Australia.
– -Yes. and other persons. Industry should not look to the Government to undertake all the research work necessary. The Government can only concentrate on a few of the very many problems that arise. This Government, at any rate, is fully alive to the scientific problems -which confront the country.
– Will the Minister relate his statement that private industry should -undertake research to the policy of nationalizing industry.?
– That is quite a different matter. I could take up a considerable length of time in debating the status of scientific research in one country, where industry is nationalized.
– With regard to the recruitment of research workers, can the Minister say anything on the subject of the amount of money allowed annually for the upkeep of a university graduate engaged on research?
– If we could get more money, we would be in a better position.
– Under present conditions, the Government cannot even get the men.
– That is true. There is difficulty in getting men. Generally, the salaries offered .to .scientifically trained men are : not so high as they should be, but that does not concern only workers in the field of scientific research ; it concerns all scientific -workers, and that is not a .matter which we can put right in a day. However, I .repeat that we do not need to formulate a plan; we .already have one. It is that the Commonwealth Government, through the ‘Council for Scientific and Industrial Research, shall undertake the .major problems of research which are put forward as being the .most urgent and most pressing in our economy, .and that the extension work -which ought to follow on these investigations is a matter for co-operation with the States. I hope .that discussion will take place with great advantage between the Commonwealth .and the State departments to ensure that the results of the work shall be passed on to the primary producers and manufacturers, so that they .may get the benefits of scientific research.
.- I support the motion of the honorable member for Wide Bay (Mr. Corser), but I think that it could have been expressed in wider terms, because I believe that the primary and secondary industries are interwoven and that the one group cannot be prosperous unless the other is too. The Minister in charge of the Council for Scientific and Industrial Research (Mr. Dedman) replied to the honorable member’s speech !by saying that the Government had a plan for the development of scientific research and the application of science to industry. Of course, the Government has a plan. It inherited from previous administrations probably the most scientifically conceived and properly based plan for research ever instituted in any country in modern times. On the foundations laid by the Bruce-Page Government for the Council for Scientific and Industrial Research has been built an edifice to which additional stories and rooms can be added at any time. The Seventeenth Annual Report of the council shows that division after division has been created within the organization and all have done most excellent work. I .think the Minister would be fair enough to admit that he did take over a properly planned and developed scientific and industrial research organization. We should also admit that since he has been in charge of the Council for .’Scientific and Industrial Research he has -appreciated its work and looked after and developed it to the very best purpose. Primary producers and manufacturers who benefit from the work of the council should contribute towards that work. The main products of Australia are wool, wheat, dairy produce and meat. ‘The woolgrowers contribute under an act of Parliament 6d. a bale for scientific research and publicity for the benefit and improvement of the wool industry. I think the Minister would agree that the sums received therefrom are meagre indeed to carry out the necessary work. The Australian meat-producers are levied through the Australian Meat Board on all meat exported for research into problems associated with their industry. As deputy chairman of the Australian Wool Board, I have been in close touch with the work of the Council for Scientific and Industrial Research for a good many years, and I regret to say that, through those years, insufficient money lias been made available to the council. Added to the lack of funds in the war years, of course, has been the inability to obtain qualified men with which to staff its research divisions and so obtain the results necessary to improve our primary producing practice and manufacturing methods. The work of the council, and of research officers generally, should not be limited to the primary industries, for such industries are dependent upon progress in secondary production. In subscribing 6d. a bale for a fund for advertising wool and wool products, the graziers of Australia have done well. Funds for these purposes are also subscribed by graziers in New Zealand and South Africa.
Institutions such as the Wool Industries Research Association, of Torridon, in England, and men like Professor Willsdon, have done work’ of immense value not alone to the textile industries, but to the whole world. Important discoveries have been made by research workers even in the difficult days of the war, as is clearly shown in the following paragraph in the Eighth Annual Report of the Australian Wool Board, for the year ended the 30th June, 1944, tabled on the 14th September: -
Progress in wool promotion in Britain and the United States has been made in the last twelve months and much preliminary work essential to more ambitious projects has been completed. This includes successful negotiations with the British council for production of a coloured film on wool for world-wide exhibition. Impressive demonstrations have been given of the remarkable uses to which wool has been put as material for war. Exhibits included oil niters, parachute kneepuds, munition cases, tank seats and self-sealing petrol tank from a bomber plane.
Research into the insulating value of fabrics for clothing has led to results of great practical importance in designing garments to withstand the chilling effect of cold wind. Other investigations into proofing of fabrics now make it possible to predict whether a yarn will afford a good rainproof cloth and indicate the best type of weave to employ. Another process to make wool resistant to acid dyes, and so enable pattern weaving, has been discovered.
A good deal of research work has been proceeding overseas into the use of wool and cotton fibres for manufacturing purposes. Research workers at the Leeds University, which is more intimately connected with textile manufacturing than any other university in the British Commonwealth of Nations, have done magnificent service in this regard. During my visit abroad in 1938, when I attended meetings of the International Wool Executive, I observed a striking difference between, the approach of Germany and other continental countries and that of Groat Britain to scientific research work. In Berlin particularly we found that manufacturers and farmers were practically waiting on the ‘ doorsteps of scientific institutions in order to ascertain the latest results achieved, but in Great Britain commercial interests and producers were not nearly so interested. Fine work was being done at the Shirley Institute, Manchester, and at Torridon in wool and cotton fibre research, but we were informed that it was difficult to get persons who should have been deeply interested in the results to show any real concern in the results achieved. The discoveries being made in laboratories were not of immediate interest, it seemed, to the people who were engaged on the practical side of the industry. I suggest to the Minister in charge of the Council for Scientific and Industrial Research that a constant interchange of Australian and overseas officers is desirable, for a great deal more can be achieved by personal contacts than by the reading of scientific publications or the exchange of letters. We should always have some Australian officers on exchange with officers of overseas institutions. In this way, better results would accrue. [Extension of time granted.]
I urge that Australian veterinary officers should be sent abroad to study. I found during my visit to Berlin in 1938 that the veterinary branch of a government institution there held records relative to every ram in Germany, and the details in respect of fleeces and progeny were extremely interesting. “We must do more work of that kind in Australia. Information of incalculable value could be -made available in this way. The authorities in Berlin seemed to be years ahead of us in collecting and tabulating information in respect of the wool industry, although Australia is reckoned to be the most important wool-growing country in the world..
The work being done by the Animal Health division of the Council for Scientific and Industrial Research will be of the greatest possible value to Australia. I hope that, in the post-war years, such activities will be greatly increased. It is absolutely essential, however, that State instrumentalities shall have closer liaison with the Council for Scientific and Industrial Research. One trouble in Australia is that, although officers in two States may be engaged in veterinary research work, their discoveries may not be exchanged, and so the fullest possible use cannot be made of them. Good work is being done in this direction in New South “Wales, but I urge the Government to consider whether a grant cannot be made to the Government of Tasmania to encourage veterinary research in that State, for very little work of that kind is being done there to-day. Certain other States are also backward. We need the maximum degree of co-operation in these matters or a good deal of the value of the work will be lost. Excellent work is being done in connexion with poison plant research in both Queensland and New South Wales, but here again collaboration is ineffective.
No doubt the Minister is well aware that the Australian Wool Board has a mailing list which contains 40,000 names of persons to whom the latest discoveries in regard to such matters as the health of sheep and the improvement of pastures is circulated. Any person engaged in wool production may, on application, have his name added to the list. But a mailing list of that description does not go far enough. The board is now providing a large touring conveyance for veterinary officers to enable them to visit different parts of Australia for the purpose of lecturing, displaying films and giving information on production prob lems generally. More work of this description must be undertaken. I hope that the Minister in charge of the Council for Scientific and Industrial Research will request his colleague, the Minister for Commerce and Agriculture, to refer this subject to the Australian Agricultural Council. I compliment the honorable member for Wide Bay (Mr. Corser) on his interesting and informative speech. I hope that it will result in the stimulation of research work in this country.
.- I listened attentively to the speech of the honorable member for Wide Bay (Mr. Corser), but, whilst I agree with his statement that science must be applied more effectively to production and developmental problems in Australia, it appeared to me that he is out of touch with recent scientific activities. Although he mentioned the achievements of Farrar in wheat-breeding, he left the idea in my mind that nothing of that kind had been done since Farrar’s day. It seemed, from the honorable member’s remarks, that he considered that, although Russia, Canada and, in fact, almost every other country of the world had been active, Australia had done nothing. That is very far from the fact. In 1927, when I was employed by the Victorian Department of Agriculture in wheat-breeding research, we harvested more than 2,000 varieties, selections and classes of wheat from one experimental station at Werribee. At that time, the Government of Victoria was also carrying out valuable research work at Rutherglen, Goroke, Longerenong and Dookie, the Government of South Australia was sponsoring fine work at the Waite Institute, and the Government of New South Wales was engaged in valuable experiments in several of its scientific establishments. Many other products besides wheat were being dealt with. The Commonwealth Government has alsobeen active in promoting research work. I find that, in 1938-39, the vote for the Council for Scientific and Industrial Research was £207,340. In 1943-44 thegrant had risen to £660,007, and this year the Treasurer has made availablethe sum of £900,000. Therefore, even during the last two years, the amount- provided has been greater than that in 193S-39.
The Minister for War Organization of Industry (Mr. Dedman) described many of the problems which the Council for Scientific and Industrial Research is investigating, and I do not intend to cover that ground. But the honorable gentleman did not refer to certain other activities of the organization. For example, Australia is endeavouring to expand tobacco-growing, and the Council for Scientific and Industrial Research has tackled the problem of Yellow Dwarf, a virus which seriously affected the industry. Because of war requirements, flax-growing has increased in importance and the Council for Scientific and Industrial Research is successfully undertaking the microbiological retting of flax. The success of this method will probably mean- that Australia, in the post-war period, will be able to compete effectively with flax on the world’s markets. Since the outbreak of war, the Council for Scientific and Industrial Research has directed attention to new fields of investigation, and consequently, has been obliged to postpone some of its experimental work on primary production. As the Minister pointed out, it has experimented with the cultivation of rubber-producing plants, and has enjoyed considerable success with the raising of plants to yield valuable drugs that the nation has not been able to import during the war.
Even under war-time conditions, the organization has conducted research into many stock diseases so prevalent in this country. As the result of these investigations, Australia is tackling problems before they assume .serious proportions. One of the greatest difficulties arises from blowfly and entro-toxaemia or pulpy kidney, a disease that destroys many thousands of fat lambs. The Council for Scientific and Industrial Research has produced a virus that has practically eliminated this disease. In addition, ithas tackled the problem of external and internal parasites of both sheep and cattle, and a disease that destroyed many matrons in fat-lamb flocks. The source of Pink-eye and other diseases has been traced, and the council has prepared viruses in some cases and drugs in other cases to eliminate them. The honorable member for Wide Bay, when submitting his motion, pretended that the organization had achieved little or nothing. I remind him that it has conducted highly scientific researches into soil constituents which destroy clover pastures. It has engaged in wool ‘bio-chemistry, surveying the length of staple, the crimp of staple, density, and the amount of grease, and those factors are being examined in relation to the types of soil on which the sheep graze. That valu-able work will be of great benefit to Australia.
In the past, the Government ‘has recognized the importance of the work of the Council for Scientific and Industrial Research and will continue to do so to an even greater degree in the post-war period. I hope that a true spirit of cooperation will exist between the Commonwealth and State authorities regarding problems of scientific research into land and agriculture. This spirit can be easily achieved if the States deal with particular matters that fall within their sphere, such as wheat-breeding. Different types of wheat suit different districts. As sugar-growing is practically confined to Queensland, experiments relating to that industry should be conducted by the State. But diseases that affect the sheep, cattle and pig industries, and problems of soil erosion, can be fittingly dealt with by the Council for Scientific and Industrial Research.
-The honorable member has exhausted his time.
– I desire to inform the House that Admiral of the Fleet, Lord Keyes, is within the precincts of the House. With the concurrence of honorable members, I shall invite him to take a seat on the floor of the House beside the Speaker’s Chair.
Honorable MEMBERS - Hear, hear!
Lord Keyes thereupon entered the chamber and was seated accordingly.
.- I am sure that I express the view of every honorable member when I welcome to this House Admiral of the Fleet Lord Keyes. We welcome him personally, and because the uniform that he wears is symbolic of the wonderful exploits of the British navy.
Honorable Members. - Hear, hear!
– I am gratified to support the motion submitted by the honorable member for Wide Bay (Mr. Corser) for the purpose of securing increased assistance for scientific research, particularly into problems affecting primary industries. I was largely responsible for the establishment of the Council for Scientific and Industrial Research. Nearly twenty years ago, I induced Sir Frank Heath to come to Australia on behalf of the Commonwealth Government, and he was able to select three directors of the council - Sir David Rivett, Sir George Julius and Dr. Richardson. Those gentlemen have done extraordinarily valuable work for Australia ever since. The debt which Australia and many other countries owe to them is not generally recognized. Their work has proved to be much more valuable than the cost of the experiments. For example, 40,000,000 acres of land has been recovered from the prickly pear in. Queensland, and now forms one of the most productive areas in Australia. Even if expenditure on the Council for Scientific and Industrial Research had been substantially greater than it has been, a credit balance would still be shown.
I am glad to see that, year by year, governments have increased the amount of money made available for research. From 1926, when this institution was established, to the 30th June last, the expenditure amounted to £5,250,000. When I was Commonwealth Treasurer, I was able to place to the credit of the Council for Scientific and Industrial Research a fund of £750,000, which has enabled the organization to function most efficiently. Even during the depression, when nearly every other service had to be reduced, the work of the Coun cil for Scientific and Industrial Research continued unchecked, and it has been invaluable ever since. The Commonwealth Government also established an endowment fund for the purpose of ensuring that the council would be able to offer research graduates a definite engagement for ten, fifteen or twenty years. For this endowment fund, the Commonwealth Government provided £100,000 when I was Treasurer of the Bruce-Page Government, and the interest has since been used to enable those graduates to go abroad for study and to carry out their researches. In scientific research, results do not always come quickly. Often a hair-breadth separates success from failure. It is a suicidal policy to say that, because a man has not solved a problem within a specified time, his researches should cease. Some of the problems which these scientists are tackling have puzzled mankind for hundreds of years. It is on the foundation of many failures that success is eventually built. Although the Council for Scientific and Industrial Research has done a great deal in Australia, even more could be essayed. A better system should be devised to ensure that scientific results shall be implemented on the farms. I agree with the Minister for War Organization of Industry (Mr. Dedman) that we can achieve that object only by the fullest co-operation with the State Departments of Agriculture. In addition to that,, we can gain a good deal more information about our problems if we establish an international and, particularly, an intraEmpire relationship between research officers. One of the greatest tragedies of the Empire in the last twenty years was the decision to discontinue the Empire Marketing Board.. The British Government provided about £1,000,000 a year to assist to finance the functioning of that organization. Australia and New Zealand responded very well, but, unfortunately, other dominions were not so interested in it. While the board operated, there was a continual interchange of the best scientific brains in the Empire. Australian scientists worked at the Rowth Institute, Rothamstead, with Sir John Russell and Sir John Orr, and at Aberystwith, with Sir George Stapledon. When we visit those places to-day, we meet scientists who have worked on some problem in Australia, Canada, South Africa and Great Britain. That interchange to which I referred enabled a better overall view to be obtained than would otherwise be possible, and invaluable results were collected. I hope that an Empire corps of scientists will be created. When the Prime Minister was in Great Britain recently, he was not successful in propounding his scheme for collaboration on the highest political plane. But he might succeed in establishing Empire collaboration on a scientific plane. As every one knows, Sir John Russell, Sir George Stapledon, Sir Arnold Theiler and Mr. Johnson have been invaluable to us as advisers. Some of them have visited Australia on two or three occasions, and our men have gone abroad. But Ave need continuous contacts. So far as I have been able to gather, most of our contacts have been in the last few years by means of literature. At Rothamstead, there is an imperial research library where all these matters are indexed and are available. Reading, however, is not so good as are personal discussion and intimate contact. The Government could do a very great deal, not merely along the lines suggested by the honorable member for Wide Bay, but also in the direction of securing the results I have mentioned. The honorable member for New England (Mr. A’bbott) has referred to the work in regard to wool at Torridon, largely with the support of the funds of the Council for Scientfic and Industrial Research. The results there achieved will become greater with the passage of the years. We should have, not merely Empire contacts but also an arrangement whereby we could make the best use of all scientific research in other parts of the world. International contacts are needed, and they can best be secured, first by establishing Empire contacts, which would give us access to the United States of America, Russia, Italy, and all other places, any one of which may have discovered a solution of our problem which may be of infinite value to us. I urge the Government to progress simultaneously along those three lines. My experience of this organization, and of the work that has been done throughout the world, has convinced me that no other expenditure would be more quickly reproductive. It might prove to be one of the biggest factors in securing the peace of the world, because the best formula for peace is plenty of good food. Always in ancient times those countries which, like the deltas of the Nile and the Ganges, had an abundance of food and therefore men with the necessary leisure to improve the conditions of the race, the advance of civilization was greatest. We could make a contribution in that way by an extension of our scientific institutions.
– The right honorable member’s time has expired.
.- The House is indebted to the honorable member for Wide Bay (Mr. Bernard Corser) for the initiation of this debate. In a comprehensive and well-informed manner, he has dealt with the subject-matter of the motion. He has pointed out the great advantages which have flowed to this country and its many industries from the scientific and industrial research that has been practised over the years, and has stated that the establishment in 1926 of the Council for Scientific and Industrial Research has probably proved one of the most profitable investments of public money in the history of Australian administration. I am acquainted with the innumerable problems of the primary industries. Many of them have caused disaster to different industries, and have been passed on to the council for investigation. Farmers have come to believe that the members of the council are almost more than human, and that, given the financial and physical wherewithal to carry out investigations, no problem is incapable of solution by them, no matter how difficult it might be. Sheep are affected with such complaints as fluke, black disease, toxaemic jaundice, foot rot, and coast disease. I cannot call to mind one problem, the solution of which has not been provided by these scientists when they have had adequate time for investigation. There has been a progressive extension of their activities to the problems of secondary industry. It would be well for us never to be parsimonious in the allocation of money to such research. There are only two problems which, as yet, the council has not been asked to investigate. Since the outbreak of war there have been tremendous distractions, which have diverted attention from the ordinary problems of peace. In a country which depends so much upon the land industries as does Australia, we shall always be very much at the mercy of the weather conditions. I do not suggest that means may be devised for controlling weather conditions; nevertheless, the value would be almost beyond assessment if it were possible to predict them some time ahead. I have such tremendous confidence in the capacity of the very able band of Australian scientists led by Sir George Julius, Sir David Rivett, and Dr. Richardson that I believe that if the Government asked them to establish a secretariat for the investigation of problems associated with long-distance weather forecasting, results would be furnished in due course. I recognize that weather does not originate in any one locality, and that very close co-operation between the scientists of the world would be needed. At one time, the meteorological section was included in the list of my responsibilities, being under the control of the Department of the Interior. In 1938, I established a very small section which was given the task of engaging in research concerning longdistance weather forecasting. Unhappily, that section has been abandoned, or at least suspended, since the Department of Air assumed control of the whole of the meteorological services at the outbreak of the war. I put it to the Minister, who I know has devoted himself earnestly to the problems of the council, that the provision of the necessary finance for the establishment of a specialized section to investigate the possibility of long-range weather forecasting would be a worth-while investment.
There are pastoral and agricultural problems which are peculiar to the Northern Territory and to other parts of north Australia. Problems affecting live-stock and plant growth there are not to be found in any other part of Australia. I have been told by persons who are best informed, including Sir David Rivett, Dr. Richardson, and Professor Prescott, of theWaite Institute, that certain climatic conditions in the Northern Territory are not experienced anywhere else in the world except in Nigeria. There is a cycle of monsoonal rainfall, and a subsequent intense aridity of air which has the effect of bleaching all plant growth. The tremendous development of pastoral growth) in the higher rainfall areas of Australia has been made possible only by, first, the discovery of what plants are best adaptable to growth in particular localities - many of them not indigenous to this country but introduced from other parts of the world - and, secondly, a knowledge of the soil requirements of fertilizer, and the methods best calculated to stimulate plant growth. To produce the best results, we must, by means of field trials, discover the best practices of pasture management or live-stock husbandry. All Australians desire that the vast potentialities of the Northern Territory shall be developed to the maximum degree. It is my firm conviction that, in the settlement of the men who will desire to go to that area after the war, not only great financial loss nationally and individually, but also considerable hardship and suffering, would be avoided if, prior to their settlement, the experts of the Council for Scientific and Industrial Research were to investigate the problems that are peculiar to it. I hope that steps along the lines that I have indicated will be taken.
– The honorable gentleman’s time has expired.
Question resolved in the negative.
Motion (by Mr. Forde) agreed to -
That government business shall take precedence over general business to-morrow.
– I move-
That the bill be now read a second time.
The purpose of this measure is to authorize the Australian Government to associate itself with the work of the proposed United Nations Food and Agriculture Organization. It provides for the adoption of the constitution of the organization and the payment of Australia’s quota towards the expenses of the organization.
The creation of a permanent Food and Agriculture Organization was recommended by a conference which took place at Hot Springs, Virginia, United States of America, in May, 1943. This conference was attended by experts in nutrition, agriculture, and economics from 44 united and associated nations. Australia was represented by Dr. H. C. Coombs and other experts. President Roosevelt, who was largely responsible for the calling of the conference, regarded consideration of food and agriculture as being the first step which should be taken to carry into effect the objective of freedom from want which had been declared in the Atlantic Charter.
The conference examined the problem of freedom from want in relation to food and agriculture in four stages -
The conference had before it reports which showed that more than 75 per cent. of the 1,150,000,000 inhabitants of Asia have a diet far below the standard for heal th. It was revealed that even in the United States of America and Western Europe 20 to 30 per cent. of the entire populations suffer from malnutrition. In the United States of America, the examination of military recruits has shown that more than one-third are physically unfit for service. In India, with its population of nearly 400,000,000, a considerable proportion of the population does not have enough to eat. Taking the world as a whole, the picture is one of world-wide underconsumption, leading to malnutrition and its attendant evils.
After examining reports such as these, the conclusion was reached that, while the goal of freedom from want could ultimately be reached, it would first be necessary to secure freedom from hunger. The immediate step to be taken by governments should be the adoption of measures to prevent violent fluctuations in prices of agricultural products, and to give producers stable and high incomes, so that the greatest possible use would be made of existing productive capacity.
Freedom from want, and levels of nutrition sufficient to ensure good health, could be secured only by very greatly increased production of all foods and by a diversion of both existing and new production from “ energy “ foods, such as cereals, to “ protective “ foods, such as fruits and dairy products.
Working on the assumption that increased production is needed, the conference then considered means whereby production could be made more efficient and extended. The most important of these were considered to be -
Attention was drawn to the inefficient means of production, and the overcrowding in countries like India and China. The opinion was expressed that the development of industry to provide employment for agricultural populations was the only measure likely to offer any significant contribution to these problems. It was therefore recognized that freedom from want cannot be achieved unless there is a balanced and world-wide expansion of all economic activity.
Considerations such as this led the conference to investigate means of improving distribution. Evidence wasgiven to show that in the past some consumers have never been in a position to buy the food they need, while there have always been some producers of food who havenot been able to sell at prices above cost of production.
The report of the Hot Springs conference which I have already tabled, is of special interest on this matter. Several of the delegates voiced their conviction that the automatic equilibrium among economic forces that is supposed to assure the full and most advantageous utilization of the world’s human and material resources is not based on fact. Among the forces that interfere with the maintenance of equilibrium, they specifically mentioned the natural differences between the conditions of production in agriculture and industry. The farmer is at the direct mercy of theelements and the seasons.Sudden fluctuations in the. conditions of supply, or in demand, frequently lead to situations in which there is either too little or too much of his product.
Likewise, in the economic sphere, he is often in a disadvantageous position. Without governmental or co-operative assistance, the farmer can achieve very little in the way of adapting his production to requirements. The farmer must sell his product in a market and at a priceover which he has very little control, but the industrialist may, within limits, control the price at which his product is sold and adjust his production schedule. In many countries the mass of the individual farmers are relatively unorganized, compared with industry. These differences - physical and economic - are sorely aggravated in the downward spiral of general depression.
It was thus established that there is a close interdependence of, -on the one hand, the level of employment in all countries, and, on the other, the level of consumption of food products. . While the conference was not called upon to conduct a detailed investigation of the general economic policies which should be adopted by governments, it expressed the view that freedom from want of food could not be fully achieved without an explanation of economic activity. It declared -
The first cause of hunger and malnutrition is poverty. The promotion of the full employment of human and material resources, based on sound social and economic policies, is the first condition of general and progressive increase in production and purchasing power.
Having stated that national policies of full employment were fundamental to increased production and consumption of food, the conference considered means within the framework of such policies to plan the production and consumption of basic staple foodstuffs entering international trade. The conference agreed that a system of commodity arrangements might prove desirable. Any arrangements should aimat eliminating short-term price movements, and should include the effective representation of consumers as well as producers. The conference agreed that further international discussion of these questions was urgently required. It was, however, quite emphatic that from the point of view of theworld as a whole, devices for restricting production are contrary to the general social interest. Throughout the discussions, emphasis was laid upon the desirability of a progressively expanding economy of plenty as opposed to a contracting economy of scarcity. The means for improving distribution recommended by the conference were -
It became apparent during the discussions that while any effective steps to increase production and consumption must be takenby national governments, national action would require international co-ordination. Increased production in one country without increased consumption throughout the world, or greatly increased national production in one commodity alone,would lead to severe economic difficulty for agricultural producers. In fact, there are few aspects of the general problem which could be dealtwith on an exclusively national basis. There was general agreement, therefore, that the nations represented at the conference should establish a permanent organization to act as a centre of information and advice on both agricultural and nutrition questions. The conference did not, however, attempt to lay down any details of what the scope and functions of such an organization shouldbe. It was agreed that these questions would require most careful study. Accordingly the conference recommended the establishment in Washington of an interim commission, one of the functions of which would be to draw up for submission to the governments represented, a detailed plan for a permanent organization.
The governments concerned accepted this recommendation. The commission met, and the Australian Government was represented by Mr.F. L. McDougall, the economic adviser to the High Commissioner in London. Mr. McDougall has taken a prominent part in the work of the Interim Commission which has been meeting frequently during the last year. The commission has now completed its work and has referred to governments for their approval, the constitution for a permanent food and agriculture organization which is printed as a schedule to the bill now before the House.
The purposes of the organization are described in the preamble to the constitution. These are -
The functions of the organization are to extend to fisheries, marine products, forestry, fibres and other non-food agricultural products.
The organization shall collect, analyse, interpret, and disseminate information relating to nutrition, food and agriculture. It shall also promote and, where appropriate, shall recommend national and international action with respect to-
It shall also be the function of the organization -
The general policy-making body of the organization will be a conference at which each member nation shall have one representative, and which shall meet at least once in every year. In addition to exercising the power of approving the budget of the organization, the conference may by a two-thirds majority make recommendations to member nations on questions relating to food and agriculture, with a view to their implementation by national action. It may also by a two-thirds majority submit conventions concerning questions relating to food and agriculture to member nations for their acceptance by appropriate constitutional procedure. The conference will meet for the first time when twenty governments have signified their acceptance of the constitution. It is hoped that this will be early next year at the latest.
In addition to the conference it is proposed that there shall be an executive committee consisting of between nine and fifteen members. The executive committee shall exercise such powers as are delegated to it by the conference. Members of the executive committee shall, however, exercise the powers delegated to them by the conference on behalf of the whole conference and not as representatives of their respective governments. Provision is also made for the establishment of technical and regional standing committees, and it is thought likely that representatives of the organization will be acting in close touch with the governments of all countries.
The direction of the work of the organization will be in the hands of a director-general, who is to be appointed by the conference, and who will be subject to the general supervision of the conference and its executive committee. The constitution provides that the director-general shall appoint the staff of the organization, and in doing so shall pay due regard to the importance of selecting personnel on as wide a geographical basis as is compatible with the highest standards of efficiency.
It is important that international agencies should pursue related courses, and that their activities should not conflict or overlap. Accordingly, the draft constitution of the food andagriculture organization enables the organization to enter into agreements with other public international organizations defining the distribution of responsibilities and methods of co-operation. Already there has been close consultation and collaboration with the Relief -and Rehabilitation Administration, the International Labour Office, and the Financial and Economic Section of the League. It is expected that arrangements will be made with the war-time inter-governmental agencies such as the Combined Food Board, in order that war-time experiences and data collected will not be lost.
The particular obligations as stated in the constitution to be undertaken by members are -
There are, besides, implied obligations which will arise out of the powers of the organizations to make recommendations and to refer conventions to governments. The success of international organizations such as the International Labour Office and this proposed food and agriculture organization depends on the intention of governments to make them work by carrying out wherever possible their recommendations and conventions.
In general, the power of the organization on matters of policy is limited to the making of recommendations to governments, and before a recommendation can be made a two-thirds majority approval of the conference is required.
The interim commission estimated that during the first five years the average expenditure of the organization would be approximately $5,000,000 per annum. During the first financial year, however, the expenditure is likely to be considerably less, owing to unavoidable delays in the recruitment of staff and in the preparation of plans. A provisional budget of $2,500,000 for the first financial year was therefore accepted.
The interim commission also drew up a provisional allocation of this sum amongst member nations. Australia’s contribution for the first financial year as set out in annex 11 of the constitution is 3.33 per cent. of the budget, or £A.26,000 (approximate). The commission reported that it found considerable difficulty in devising a wholly satisfactory scale for the apportionment of expenses.The basis finally adopted was the League of Nations (1939). scale. Starting with this basis, a temporary reduction of their financial obligations was given to countries occupied by the enemy. It is anticipated that shortly after the war the allocations will be readjusted so as to place a greater burden on these countries, and perhaps to include countries which are at present not eligible for membership. In this way, the percentage which Australia will contribute to the total budget should be lessened considerably.
The peoples of all nations should benefit from the work of this proposed organization. Well over 60 per cent. of the people of the world are engaged in the production of food. Speaking generally) the standards of living of people engaged in agricultural pursuits are lower than those of people in other occupations. The proposed organization aims to assist agricultural producers by suggesting means of increasing the efficiency of production by taking steps to have production diversified so that nutrition requirements shall be met, by recommending ways of increasing world consumption levels of food, and by assisting in the orderly marketing of food.
Consumers, too, should benefit. Standards1 of living in many parts of the world are still deplorably low. I have already referred to some of the evidence placed before the interim commission. What is true of food is true also of clothing, housing, health care, education, and the other factors which make up a standard of living.
The Food and Agriculture Organization should be of value to Australia, which is greatly affected by world standards of consumption of food and agricultural products. In 1938, 64,000 Australian workers depended on export markets for pastoral products, 50,000 on exports of wheat, and 32,000 on exports of dairying products. Besides these, their dependants and those ‘ employed in the small towns in the country districts are dependent upon the maintenance of our export markets. In 1938, 17 per cent, of our national income was derived from exports. Our own people, and country dwellers in particular, will obviously benefit from improved nutrition standards and increased consumption of agricultural products throughout the world.
Moreover, a plan to expand consumption and increase standards of living is wholly consistent with the Australian Government’s foreign economic policy, which centres in an agreement by nations to pursue domestic policies of expansion. We believe, and the Hot Springs conference accepted our view, that the greatest single factor in increasing consumption of food is the maintenance of high levels of employment. The Food and Agriculture Organization, in endeavouring to promote increased consumption of food, will urge governments and international organizations which are set up by the United Nations, to make their primary objective the adoption of domestic policies of employment and increasing living standards.
Debate (on motion by Mr. Hutchinson) adjourned.
Sitting suspended from 5.56* to 8 p.m.
Debate resumed from the 7th September (vide page 580), on motion by Mr. Chifley -
That the bill be now read a second time.
– I do not intend to occupy the House for long in discussing a bill designed to make certain amendments beneficial to the taxpayers, but two or three aspects of the measure call for some comment. I shall refer, first, to the deferred maintenance provision. For some time taxpayers have been unable, by reason of the shortage of man-power and materials, to carry out necessary maintenance work on their properties’. This has resulted in an artificial inflation of incomes, because expenditure which would normally have been written off under the heading of “.maintenance and repairs “ has not been so written off. Consequently, taxpayers have tended to lose both ways. The effect of this has been referred to on several occasions by the honorable member for Deakin (Mr. Hutchinson), and other honorable gentlemen. The Treasurer (Mr. Chifley) has recognized the justice of the complaints and has included in this bill provisions intended to afford some relief to taxpayers who have not ‘been able to expend money which normally would have been expended on maintenance and repairs. Broadly, the scheme provides that deposits are to be made with the Commissioner of Taxation, repayable two years after the war, and then treated as assessable income, subject to deduction of expenses when such expenses are actually incurred on actual repairs and maintenance in the year of repayment. I shall make two criticisms of a scheme which, otherwise, would be very useful. In the first place, the period of two years is inadequate, because man-power and materials may not be readily available within two years of the cessation of the war. As the Treasurer will recognize, with his knowledge of the man-power and materials position, it may well be three, four, or five years after the war before deferred maintenance can be affected. As the period will depend entirely on the availability of the resources needed for the purpose, I submit that the period of two years is too arbitrary, and I ask the Treasurer to consider extending it. The honorable gentleman may not be disposed to agree to an amendment at present, but I am sure that if he watches the position closely he will be disposed, subsequently, to agree to a longer term.
Next, I refer to the definition of “ deferred maintenance “ which appears in proposed new section 53a (8.) -
In this section, “deferred maintenance” means the maintenance of property, whether real or personal, in a normal state of repair or upkeep where -
the expenditure upon that maintenance would have been an allowable deduction under section fiftyone or fifty-three of this act if it had been actually incurred by the taxpayer.
It will be observed that those provisions are confined to allowable deductions under sections 51 and 53 of the act. The reference to section 51 in the explanatory memorandum which the Treasurer has circulated reads -
Primary producers will alsobe permitted to deduct the established cost of top-dressing and fertilizing, of eradication of noxious weeds and animals, &c., provided the actual expenditure on such items would normally have been allowable deductions under section 51 or section 53 of the act.
I emphasize that the proposed new subsection is limited to the terms of sections 51 and 53 and therefore its value to primary producers will be very small. Section 51 provides for the deduction of-
Losses and outgoings to the extent to which they are incurred in gaining or producing the assessable income . . . except to the extent to which they are losses or outgoings of capital.
Section 53 provides for the deduction of-
Expenditure incurred by the taxpayer in the year of income for repairs, not being expenditure of a capital nature.
Long ago it was discovered that some additional deductions were desirable in relation to primary producers, for those provided in the sections to which I have just referred were not adequate to the needs of the case. Therefore two new sections were included in the act. One of these, section 75, provides -
Expenditure incurred in the year of income by a taxpayer engaged in primary production on any land in. Australia in -
the eradication or extermination of animal or vegetable pests from theland;
the destruction and removal of timber, scrub or undergrowth indigenous to the land;
the destruction of weed or plant growth detrimental to the land;
the preparation of the land for agriculture ;
ploughing and grassing the land for grazing purposes; and
the draining of swamp or low-lying lands where that operation improves the agricultural or grazing value of the land, shall be an allowable deduction.
The other, section 76, contains further special provisions in relation to wire and wire netting. Thus, it will be seen that deductions are allowable to primary producers, at present, under sections 51, 53, 75 and 76, but the amendment now proposed in relation to deferred maintenance is confined to allowable deductions that fall within sections 51 and 53. Consequently if the man on the land is to be put in the same position in relation to this scheme as he is in relation to our general taxation laws, it is desirable that sections 75 and 76 shall be brought within the deferred maintenance provision. Obviously, the deductions allowable at present go beyond sections 51 and 53; otherwise sections 75 and 76 would be entirely unnecessary. This point is dealt with in a well-known taxation text-book entitled, The Law of Income Tax, byRatcliffe and McGrath. in which, following a citation of section 75, it is stated at page 697 -
In the absence of this specific provision this expenditure would, in the main not be allowable by reason of the prohibition against the deduction of capital expenditure contained in section 51.
It should therefore be understood that, in relation to such matters as the eradication of noxious weeds and rabbits, the clearing of scrub and the draining of swamp land, the present amendment will give very little, if any, relief to the farmer. I welcome the deferred maintenance provision as far as it goes, but it stops far short of providing for allowable deductions which would normally be applicable to farmers in the ordinary course of their industry. I suggest to the Treasurer that this criticism could be easily remedied by the inclusion of section 75 or 76 in the proposed new section 53a (8.).
I turn now to the subject of concessional rebates which was referred to in some striking remarks by the Leader of the Australian Country party (Mr. Fadden) in his budget speech on the 15th September. In dealing with the subject, the right honorable gentleman produced a table of comparison of family taxes under the concessional rebate system and the deduction system. Th6 purpose of the table was to show that the abandonment of the deduction system and the substitution of the rebate system has had the effect of loading the dice, if I may use that expression, not in favour of the man with family responsibilities, but against him. After the right honorable gentleman had read that table, the right honorable member for Yarra (Mr. Scullin), whose familiarity with these problems I respect, interjected, “ They are incorrect “. I expected that if those figures were incorrect, the Treasurer would have placed the correct ones before honorable members, because we desire to argue this case on the basis of fact. But it is observable that when the Treasurer replied to the budget debate some days after the leader of the Australian Country party had made his speech, he did not correct those figures. Nor was any attempt made to show that they were wrong. What did the figures indicate? The right honorable gentleman said -
Under the old system, a taxpayer with a gross income of £300, and with a dependent wife, paid almost exactly the same amount of tax as under the “ rebate “ system. With a wife and one child, he pays fi ls. extra under the “ rebate “ system. However, if he has a wife and two children, he pays £(> 19s. more tax under the “ rebate “ system, and if lie has three children, the increase of tax payable is £11 13s.
– He said also that that was offset by child endowment.
– To be perfectly precise, what he said was that although the man received child endowment, which was always designed to be an additional benefit, the figures showed that the taxpayer himself was paying for a certain proportion of his own child endowment. So .the man with three children, who was paying £11 18s. more under the rebate system was actually contributing £11 18s. to the child endowment that might be coming to him. I do not know that it was ever believed that child endowment was to be paid for by the recipients by means, wholly or partly, of an increase of their taxation. Therefore, I put child endowment to one side, and say that the striking result is that, under the rebate system as opposed to the deduction system, the difference falls more and more heavily on people as they have more children.
– And that is supposed to encourage larger families I
– Our taxation policy is most important in its relation not merely to the raising of money, but also to general social policy. It is not merely a matter of seeking the best method by which we can raise the most money. The real question is, can we distribute the burden of payment of the necessary amount so as to encourage and assist sound social principles? In relation to the family problem, our taxation system should be designed to become more and more in favour of the head of the house, who has large or larger family responsibilities. It was said not very long ago, with great truth - and I notice that it was quoted in a most interesting publication issued by the Roman Catholic Church recently - that in this war, family life has been one of the casualties. That statement is worth thinking about, because it is more than a mere phrase. Family life has, perhaps inevitably, been one of the casualties. We have had the inevitable sundering of family ties, and thousands of young women, and thousands of mothers of young children, I regret to say, have been drawn off into war work, with the result that the control and training of young children has suffered a blow. Indeed, some of our newest generation are being brought up to very strange standards. If we are to lay the foundations of the family for the future, we must do our best to reestablish family life. If we are to do that, our fiscal policy must be calculated to assist, and not to hinder it. That is why I felt impressed and disturbed by the figures laid before honorable members by the leader of the Australian Country party. If those figures are wrong, I should be glad to discover the fact, because, so long as I believe them to be right, they disturb me and make me feel that our taxation policy has been telling against family life and the acceptance of family responsibilities.
Let me illustrate what I have referred to as one of the elements of a wise taxation policy by dealing briefly with the problem of education. Education is so much the most urgent and important of post-war reconstruction measures that the concession regarding maintained children at schools and universities seems to me to be inadequate. It stops at the age of eighteen years. Now, the concession is granted on condition that the child is maintained. What is the reason for the age limitation? It can hardly be the amount of money involved. What is the reason for stopping it at eighteen years and not nineteen years, or nineteen instead of twenty, or twenty instead of twentyone? It is a profoundly good thing for this country that more and more children, capable of benefiting by it, should enjoy a university training, a technical school training, an agricultural college training or some other special training to fit them for their working life. If that is true, and if parents are prepared to sacrifice themselves, as they have done for generations, in order to give their children a chance, why should not we, in our approach to the problem, say, “ Very well, we shall give this concession to children up to 21 years of age, because we are prepared to help in this fashion the continuation of higher training or higher education in one form or other “ ?
– Most university courses are for children of eighteen years and over.
– From the standpoint of universities, this does not begin to touch the problem. In the case of schools, it does touch it. But why should we stop at a point where some bright boy or girl is just on the threshhold of getting an outstanding training? Similar to that in. principle is another “matter that has appealed to me for a long time, namely, our taxation policy in relation to gifts made to schools. At the present time, certain exemptions or deductions are allowed in relation to gifts made, for example, to universities, but so far as gifts made to schools are concerned, we have for a long time stood still. That again raises the problem of education. The problem of our non-government secondary schools, which have a great part to play in this country, will not lessen in the future. It is generally agreed that teachers in this country are inadequately paid,, having regard to the steadily rising standards of training and ability that we quite properly require of -them. How are their salaries to be raised? Normally, in a school other than a government school, the salaries can be raised only by increasing the fees paid by parents. But there is a limit to which fees can be raised against the average parents who send their children, in the ordinary course, to those schools. Consequently, one of the great chances of those schools is to attract real gifts from charitable and. intelligently minded people. I have the honour to know one man whose donations to schools run into hundreds of thousands of pounds, but each gift is still taxable in the hands of the donor. I know some of the difficulties. It is said that, at the present rates of tax, if such gifts were deductible from income, the Government would be asked to forgo an amount which would be a large proportion of the gifts. -At the same time I point out to honorable members that our present policy discourages the making of gifts to schools, whereas, I believe, we should encourage the making of such gifts. It would be a magnificent thing for Australia if every school were handsomely endowed, so that every year there would be a smaller barrier to the admission of bright boys and girls, whatever the financial position of their parents might be.
Provision is made in this hill - it is a humane provision, and I am delighted to see it - for the deduction of dental and medical expenses. The more I have thought about this problem the more I have wondered whether there is any real virtue in limiting to £50 the deduction for medical expenses. Many men, not rich men or poor men, but men in the middle range of incomes, who, because of some illness invading their family, are required to find £200 or £300 for medical expenses in a year. That is not their fault. It is a grave misfortune, but they manage to pay the money. It has been said with some wisdom that there is no medical provision quite so good as that made for the very rich and the very poor. But a man in the middle range of incomes has to find £300 to meet his medical expenses, and the Treasury says to him, “ You may claim a deduction of £50 “. This is not any more the Treasurer’s problem than it is my problem, because we have had these artificial rules for a long time; but the more- I think about the matter, the more I begin to wonder how on earth we ever imagined tha>t there was any particular virtue in an artificial limit. If a man has genuinely laid out £100 or £200 on really necessary medical services for his family, why should we say to him, “ On all except £50, my friend, you shall pay tax”. Surely, it would not be beyond the wit of man to devise some means of ensuring that only cases of bona fide expenditure would be taken into account !
– Frequently, the illness diminishes the income.
– Quite so; when it comes, an illness of that kind is a double, and may be a treble, calamity. Yet, we say. to the victim : “ Because there must be some general rule, £50 is the limit of the amount on which a rebate may be allowed, and any expenditure above that amount will be subject to tax in your hands before . you incur it “. I most seriously commend that to the consideration of the Treasurer. It is not a matter that can ‘be dealt with off-hand, but I believe that we all can think of it with advantage.
The last matter to which I want to refer is not in the bill, but arose out of a deputation to the Treasurer some little time ago, which I, in company with many other honorable members, attended. The Treasurer will recall that the deputation put before him the matter of men on the land who had been the victims of bush-fires, had received insurance money and had found that money to be taxable in their hands. I shall not rehearse the arguments that were put before the honorable gentleman on that occasion, but shall merely say that he listened to them sympathetically, and ultimately propounded a proposed adjustment which, to my mind, seems to be a very fair and reasonable one. But it leaves untouched one other problem. We are told that, in the course of the next year, many properties in Australia will be resumed. The Premier of Victoria, for example, has announced that he proposes to resume in that State 90 properties; and it has been estimated by one competent observer that they will probably total 500,000 acres of land. I shall show to honorable members what will happen to a grazier whose property has been resumed. He has not only his land - let us say, 6,000 acres - but also on it, let us assume, 6,000 sheep. Being a grazier, he may have a lot of breeding stock; in a case I have in mind, that is the position. He has brought them in at the beginning of his accounting period, at the maximum amount permitted by the rules, namely, 10s. a head. In the normal course, he would not have sold them all at the end of the year, because that is not his “ line of country “. He may have disposed of 10 per cent, or 15 per cent, of them at the end of the year, and 10 per cent, or 15 per cent, at the end of another year. He may, so to speak, “ turn over “ his stock - to use another expression - over a period of six or seven years. His land is compulsorily resumed, and he has no other land on which to depasture his stock. He is required to sell all of them at once. If the market happens to be at, say, 30s. a head, then in the one year he will be told - and this is inevitably how the law now works - “ You have sold 6,000 head at 30s. a head; that is £9,000. They stood in your books at 10s. a head; that is, £3,000. Therefore, you have made a profit of £6,000, and that comes into your income for this year.” Thus, a man whose income normally was modest may, as the result of the resumption of his property and the forced sale of his stock, fined himself with an artifically inflated income of, may he, £9,000 or £10,000 in the one year ; and even allowing for averaging, he may, having regard to the rates of tax, find that in the result his income tax will amount to a very substantial capital levy.
– That could be overcome by distributing his profit over some years.
– My friend anticipates the very suggestion which I desire to make, namely, that in such a case, where there is an artificially created income, beca’use of a complete realization out of the ordinary course of business, it should be spread over what would be a normal period, which I suggest should be five years; in other words, that additional profit, so to speak, should be treated as having been distributed over that year and the following four years, in order that some normality might be established. Otherwise, the expropriation of some of these properties will lead to a very grave diminution of a man’s capital, and be quite capable of cutting it in half.
– The rate for farmers is struck on the average for five years.
– Those are five years that have passed.
– He would be taxed at » lower rate.
– I have pointed out, and I repeat it for the benefit of my friend, that I recognize the principle of averaging so far as the rate is concerned. That is some amelioration. Still, the quantum of his income in this odd year is out of all proportion to his real income position.
– It is a realization sale as against his normal transactions.
– Quite so; it is a realization sale as against normal selling from time to time in the ordinary course of business. A man might find himself artificially presented with an income of £10,000, whereas his normal income might be only £1,500. No system for averaging the rates of tax could prevent him from being subjected to such a quantum of tax as would amount substantially to a capital levy upon him. I, therefore, suggest - and this is my object in referring to the matter - that the Treasurer should give earnest consideration to the distribution forward over five years of such windfall or involuntary income, or whatever it may be called, in order that that man may not be placed at an additional disadvantage by having had his property taken from him by either the Commonwealth or the State Government, for purposes of land settlement.
Those are the only matters to which I desire to refer. I would not have my friend, the Treasurer, believe that any of us receives grudgingly the concessions that are made in the bill. I regard them as good concessions, travelling in the right direction. But I do suggest that, in the various aspects to which I have referred, they might travel farther and fare better.
– I begin my few remarks by echoing the remark with which the right honorable member for Kooyong (Mr. Menzies) concluded his speech, namely, that this bill is a move in the right direction. The Treasurer (Mr. Chifley) and the Government do not suggest that it represents the end of the journey. There are in the bill, concessions which in my opinion, should have been made many years ago, and they are made now in the most difficult financial period of the country’s history. They do not go as far as the Government and I would like them to go. But this is not the time for a general review of taxation, or for generous tax concessions. It is a time when everybody is being bled by excessive taxation. The bill may not, in the opinion of some persons, give a very great aggregate concession, even though individually the concessions are substantial; but I submit that they are very real to those who are to get them, even though the beneficiaries may be few. I have no quarrel with, the speech of the right honorable gentleman; he made a fair and reasonable analysis of the bill. However, I should like to refer to some of his comments, and, perhaps, put a slightly different complexion on some of them. I shall take them in. the order in which he dealt with the bill. He first spoke of deferred maintenance. I have an intimate knowledge of this matter, not because of my experience as a grazier or a manuf acturer, but because I was deputed by the Treasurer to meet the representatives of those interests with a view to considering this very vexed subject. I was not present at the first deputation that waited upon the Treasurer. I believe that it represented the Graziers Association, and that representations were made on behalf of agriculturists generally. The plan suggested to the Treasurer by that deputation was the very plan that has been embodied in the deferred maintenance provisions of the bill. There followed a deputation from the Associated Chambers of Manufactures, which put a very similiar proposition. Although many other requests for the building up of reserves and so on were made, and were left in abeyance, the matter of deferred maintenance was referred to a sub-committee, consisting of representatives of the deputation and officers of the Taxation Department. That conference was presided over by myself; and, with one exception, the bill now before the House represents the agreement that was reached after considerations which lasted for three days.
The right honorable gentleman has so clearly explained the meaning of deferred maintenance that I shall not weary the Committee by repeating what he said, beyond making the general statement that those who have been unable to carry out maintenance because of lack of man-power and materials are to be allowed to go back for three years - four years, including the present year - and to deposit with the Treasurer the amount that they would have expended, could they have done so, on labour and material. That amount is to be deducted from the taxable income, and when the time arrives for it to be expended, it will be returned to income and will be taxed if not expended ; otherwise, the usual deduction will be made. At first glance, that may mean nothing; to many persons it will mean nothing. Those whose incomes remain static will derive no advantage unless the rate of tax drops considerably when the war is over. I am not so sure that the Treasurer has held out a great deal of hope in that direction.
– He has held out none.
Mr.SCULLIN. - But those whose incomes fall appreciably when the war is over - and there will be a number of them - will get the advantage of being taxed when their income is high, at their true income instead of at a fictitious one. A detail of that was emphasized by the right honorable gentleman, when he pointed out that, could the money have been expended on repairs, it would have been an allowable deduction from the taxable income; but as it cannot be so expended, it goes into taxable income to-day, and high rates of tax have to be paid on it - which is manifestly unfair.
– Will the right honorable gentleman explain the application of the principle in this year?
– Yes. Within this present financial year a farmer may estimate that during the last four years he would have expended, say, £1,000, on maintenance, and he decides to put that amount into the Treasury as a deposit. The £1,000 will be deducted from the taxable income of this year. When the war is over, and he finds that he can spend the money, he will bring it back into his income, but when he actually spends it, the expenditure will be allowed as a proper deduction. The deduction from the taxable income of this year will be a benefit to him when he pays his tax next financial year. No one will derive an undue advantage as compared with other taxpayers. When taxation is high, the Treasurer must, and does, ensure that everybody pays according to his income. If it is found that, owing to the exigencies of war, a man is unable to spend money on repairs; under the present law he is taxed on that money, and he would not have it to spend if his income went down. All this provision does is to ensure that every one will pay on his true income, not on a fictitious income. Tie right honorable gentleman dwelt on a point that has been stressed in a document received from the Taxpayers Association of New South Wales - namely, that two years after the termination of war this money must come back into taxable income, and if it is not spent, taxation must be paid on it. He pointed out that it may not be physically possible to spend the money. It is in this respect that the only departure has been made from the agreement that was reached. The recommendation of the conference over which I presided was that there should be a limit of three years, and this recommendation was accepted by every one who attended the conference. However, the three years period was to be calculated from the cessation of hostilities. The draftsman, in preparing the bill, found that the expression “ termination of the war “ had been used in all previous taxation legislation, and it was stated that the “ termination of the war “ might not synchronize with the “ cessation of hostilities”. The right honorable gentleman himself stressed that point very forcibly on another occasion.
– I did, indeed, and I was most violently contradicted.
– Yes, but we at least paid him the compliment of giving the point some attention. He made an appeal to the Treasurer, which I am certain did not fall on. deaf ears. He asked that, if it were found in practice that it was physically impossible to spend the money within two years, favorable consideration would be given to an amendment providing for an extension of the period. Honorable members may ask, “ Why not make the period five years at once, as the Taxpayers Association has requested? Honorable members must surely recognize the great danger to which this would give rise. It might induce taxpayers to dawdle along for five years, deliberately refraining from spending the money, in the hope that some turn of events favorable to themselves might occur before the expiration of the period. The gentlemen who met me in conference were well aware of this, and it was they who suggested the three years period. They will be quite happy if the Treasurer will give an undertaking that the matter will be favorably considered should itbe found impossible to spend the money in the time.
– Will that be at the discretion of the Treasurer?
-No, at the discretion of the Government and by the decision of this Parliament. The Taxation Commissioner and his officials will examine cases and will be well acquainted with the circumstances. They will know whether materials and labour are available for the doing of the work. When a case ismade out, the Government will, no doubt, have the provision amended by legislation, and will not stand hard and fast on the limit. But the fixing of a limit is necessary in order to prevent abuse.
Mr.spender. - It may be that two years from the termination of the war will be more favorable to the taxpayer than three years from the cessation of hostilities.
– Some are of that opinion. They believe that the cessation of hostilities will date from the time when the last shot is fired, whereas the termination of the war will be on a date determined largely by a peace conference. However, I understand that there is to be no peace by negotiation, but a complete surrender by our enemies, so that the cessation of hostilities and the termination of the war may be simultaneous. However, if experience shows that the period fixed is too short - well, Parliament will still be in existence, and the provision can easily be amended.
A farmer may have an average income of £2,000 a year, and the cost of maintenance may be £250 a year. Over a period of four years this would amount to £1,000. He can deposit that £1,000 with the commissioner and from his income of £2,000 will pay taxation on £1,000, which will be £355, instead of £951. which he would otherwise be required to pay. I am taking an extreme case, because it has been said that this provision would enable a man to avoid taxation. If, when the war is over, that £1,000 comes back into taxable income, the man will pay the same amount in the aggregate that he would have paid in any case, but if he spends the money he will be allowed a deduction. The point is that if he could spend the money now he would receive exactly the same deduction as will be allowed under this provision.. Some people are able to keep their maintenance right up to date. I refer particularly to engineering manufacturers, who have their own skilled men, and we know of cases where all maintenance work has been done regularly. Obviously, it would be unfair to allow such people to deposit maintenance money for a period of five years.
The right honorable gentleman drew attention to one aspect of deferred maintenance - the exclusion of the benefits under sections 75 and 76 of the act. It is true that these sections were deliberately inserted to provide concessions for what is virtually capital expenditure. In all other forms of taxation, capital expenditure is disallowed as a deduction from taxation. The provision was inserted when the right honorable member for Cowper (Sir Earle Page) was Treasurer, in order to encourage the opening up of land, the clearing of scrub, draining, fencing, &c. This point was fully discussed by the conference, and it was recognized that, while it may be legitimate in the ordinary course of taxation to allow such capital improvements as h taxable deduction, the opportunity would be opened for serious evasions if a man were to-day allowed to pile up a big deposit - thus entitling him to a deduction from his income - based on estimated capital improvements to increase the value of his assets. That would be altogether contrary to the spirit of the concession. It was agreed without a single dissenting voice that such a concession should not be allowed. The representatives of the graziers were not present during the whole of the discussion, but they were present when the final agreement was reached; reference was made in the agreement to this point, and no protest was made by the representatives of either the agriculturists or the graziers.
The agreement was reached in a proper spirit. At the first conference it was decided that the provision would come into operation in the last financial year. When the legislation was being drafted, the Commissioner’ for Taxation and the Treasurer realized something that no member of the conference had thought of- namely, that it was proposed to bring the scheme into operation in the same “year that the 75 per cent, forgiveness associated with the pay-as-you-earn scheme came into operation. Therefore, the alleged benefit would be in the nature of a gold brick, and the Treasurer declined to lend himself to such a proposal. The manufacturers were called together again, and in order to ensure that everything was perfectly well understood, we also asked the graziers and the agriculturists to attend.
– Had the original proposal been put into effect, some taxpayers would have been much worse off than they were before.
– That is so. They would have been penalized, and that is why the provision was not put into operation until this year.
The right honorable gentleman referred to the change from the deduction system of concession to the rebate system in respect of dependants, and he said that the dice were loaded against the man with, dependants. . He- referred to an interjection by me that the figures cited by the Leader of the Australian Country party in the budget debate were not correct. The fact is that we have viewed thi matter from two different directions. 1 do not say that his arithmetic is incorrect, but I do say that the basis of comparison was incorrect. I was a member of the special committee which brought in the report on which the uniform tax legislation was based. Another member of the committee was Mr. Spooner, a former member of the Opposition, a very able accountant, and a man with a great knowledge of taxation. The chairman was Professor Mills. Supporting the legislation in this House, Mr. Spooner said that the committee would have preferred the deduction system to the rebate system, but that we could not discover any other way of welding together the various rates and various methods of the States and the Commonwealth. Some had rebates and some deductions and some a mixture of both. If honorable members refer to the figures that were presented to the Parliament when the Uniform Tax Bill was introduced, they will see that the concessions under the new legislation were remarkably close to the concessions previously in operation. The Leader of the Australian Country party has fallen into error in his comparison. The right honorable gentleman’s figures would be right if £50 were used for calculating both the rebate and the deduction, but before the rebate system was introduced, a deduction of £50, each was allowed in respect of the wife and the first child of the taxpayer, whereas, under the present system, the rebate of tax is calculated on £100 in respect of the wife and £75 in respect of the first child. I emphasize that the deduction was allowed only in respect of the first child. The Leader of the Opposition, replying to an interjection by the honorable member for Perth (Mr. Burke), who said that the cancellation of income tax deductions in respect of other dependent children was offset by the payment of child endowment, as it is, said that he thought childendowment was designed to give somen thing extra. It is most remarkable if the right honorable gentleman thinks that, because his Government declared that child endowment would be paid only in respect of children after the first child, and that there would be no tax concession for children in respect of whom child endowment was paid. Surely the right honorable gentleman has not forgotten that. It is true that the income tax law was amended to give effect to that policy by the CurtinGovernment, but the policy was laid down by the Menzies Government. I have before me the report of the speech of the honorable member for Fawkner (Mr. Holt), when moving the second reading of the Child Endowment Bill, in which he said that it was not the intention of - the Government that both child endowment and taxation concession should be enjoyed in respect of the children. It was considered that child endowment was a more just and more direct way of encouraging families than was the tax concession: This Parliament adopted that principle. There was a good deal of criticism, ‘because it was shown that, in the higher brackets of income, the benefit of child endowment would be more than cancelled by the withdrawal of the tax deduction. That was the deliberate intention of the Government of the day. The reason becomes clear when one studies the figures. A tax concession of £50 in respect of the first child represents on an income of £3 a week, ls. 3d. a week, which is a long way short of the child endowment; on an income of £5 10s., it represents 5s.; on an income of £8 it represents 7s.; and on an income of £30 it represents 12s. 6d. ; and the amount rises to 17s. in the higher brackets. It was not indicated that child endowment was to be something extra. But, if it were, the figures submitted by the then Minister in charge of the legislation, the honorable member for Fawkner, were all awry, because we were told that child endowment would cost £11,000,000 or £13,000,000- about £12,000,000 is the figure - whereas, if it were to be extra, it would have cost £5,500,000 or £6,000,000 more. I am not opposed to giving greater concessions; on the contrary, my heart goes right out to anybody who advocates greater concessions to the family man. But, after much probing of the subject and a thorough examination of all the merits and demerits, I am convinced that, if we are to expend £12,000,000 to encourage large families, it must be paid equally in respect of each child, and that it must not be ls. 3d. in respect of some children and 17s. in respect of others. There you have the difference between tax concessions and child endowment as means of encouraging families. That covers the merits of the case.
The Leader of the Australian Country party (Mr. Fadden) did not suggest trickery, but one of the newspapers examined the figures and alleged trickery. Let us, therefore, examine the matter again. The trouble is that people have short memories. They contrast the system of deductions with the new system of rebates and say that obviously the system of deductions was more advantageous to them. It would be if the same figures were used in arriving at the amount of the deduction and the amount of the rebate, but the plain fact is that when we adopted the rebate system instead of the deduction system, we increased the amount that was allowed to a taxpayer in respect of his wife, from £50 to £100, which results in the amount of the rebate being almost exactly the same as the amount of the deduction would have been. In short, a £100 re- bate is equivalent to a £50 deduction. Therefore, there is no difference in principle between the rebate and the deduction. There may be a little truth in what the right honorable gentleman said about the deduction being easier to calculate.
– On some incomes the difference is substantial.
– On some it may be, but, in principle, as long as you double the amount that was allowed as a deduction in order to arrive at the figure for the rebate, you get the same result. It is a matter of mathematical calculation. If you take a £50 deduction and a £50 rebate, the deduction is the better, but there is no difference between a £50 deduction and a £100 rebate.
– The right honorable gentleman will concede that previously there was a deduction of £50 from Commonwealth income tax and a deduction of £50 from State income tax.
– The honorable gentleman is astute enough to know that that is not correct. The £50 deduction from the Commonwealth income tax and the £50 from the State were not cumulative. We amalgamated the two and reached an average of £50.
– But there were two calculations.
– Both calculations came out at exactly the same figure. When the rebate replaced the deduction, the amount was doubled in order to achieve the same result as would have been achieved had the deduction system been perpetuated. It is true that, under the rebate system, a man on £300 a year is one guinea worse off in respect of his first child than he would be under the deduction system. That is to the disadvantage of the rebate system, but on £200 the rebate of £75 is more favorable to the taxpayer than is the deduction of £50. When you get to £350 you find that the advantage lies with the rebate system and that advantage is perpetuated right up the scale. Honorable members may wonder why, in respect of the first child, the amount of £75 was chosen as the substitute figure for the £50 deduction when £100 rebate was needed to balance the £50 deduction in respect of the wife. That may seem involved but the estimation is simple. When you deduct £50. - I particularly refer to incomes up to £300 - from the taxable income, there is a marked reduction of the rate of tax, and when you take £50 off again, the concession diminishes; so a £75 rebate for the second dependant is practically as good as a £100 rebate in respect of the first.
– Is it not true that the Treasury gets more money from the rebate system than from the deduction system ?
– Absolutely no. If it were true, all the argument that I have advanced would be false. It has all been calculated. The task of the taxation committee, of which Mr. Spender was a member, was to raise the same revenue. State and Federal, as was then being raised. It is true that there has been a general increase in the rates since, but that is by the way. We had to get that revenue without increasing or reducing individual rates abnormally. It is true that in some States there were reductions and in others increases, but they were little. It was not with the intention of getting more revenue that the rebate system was introduced. There is no difference in principle between one system and the other. The correct comparison of the two systems is shown in the following table : -
You find that that obtains in every bracket of income. I compare the position now with that which obtained before the rebate system was introduced, when there was a deduction of £50 for a wife and £50 f,or the first child, and no deduction for other children. If the Government were to provide a £50 deduction or £75 rebate for all children it would lose £5,500,000 in revenue. That would be a substantial increase in the concessions allowed under the system when reductions apply only to a wife and first child. Yet, it would not be giving any concession to people in the low income brackets, or to those in the nontaxable area. They would get nothing. If we were to re-introduce the £50 deduction at present, in addition to what we are giving in child endowment, the man on an income of £3 a week would get a concession of ls. 3d., the man on an income of £30 a week would get a concession of 12s.; and the men on some higher incomes would get concessions ranging up to 17s. I do not agree with that policy. I hope that when we are in a position to recognize the claims of taxpayers with families. - and ,1 hope that that time is not too far distant - we shall do so by an increase of child endowment, and not by relying on taxation concessions.
Finally, I wish to say a few words about land resumption, which is a burning question at the moment. The Treasurer has been asked to give earnest consideration to this problem. I am able to say that he has already done so. He gave earnest consideration to the circumstances of people who suffered through the bushfires in Victoria. I believe that every person in those districts would agree that the subject was dealt with generously by administrative methods. Some of the difficulties in connexion with resumption have been brought about by the change that was made in the law in 1936, but the present Treasurer was not responsible for that. Abnormal conditions have, of course, arisen through resumptions for war purposes, and abnormal positions need abnormal legislation or administration. It has been suggested that the situation could be dealt with by an averaging system, and other methods also suggest themselves. I wish that the Treasurer could have the assistance of some honorable gentlemen opposite as members of a non-party taxation advisory committee in dealing with this issue. Such a committee did most useful and beneficial work some years ago.
I support the bill. I regard it as a step in the right direction. Concessions are being granted to classes of people who need them. I hope that when the war clouds roll away and we can review our rates of taxation, we shall be able to return to a more normal level of life in respect of finance and social services generally.
– Like other honorable members who have spoken, I welcome the concessions that are being granted in this measure, particularly those in relation to deferred maintenance; but, desirable as the amendments are, they do not go far enough in meeting the circumstances of the taxpayers, who will be affected by them. Everybody knows that, owing to the shortage of man-power and materials, not only farmers, but also manufacturers and traders, have been compelled to refrain from undertaking necessary maintenance work, in order to maintain the income-earning capacity of their assets. Consequently, they have been at a double disadvantage, for their assets have deteriorated in value and their taxable income has been appreciably inflated or increased. The postponement of essential repairs has caused many producers to carry on under difficult and, in some instances, even dangerous circumstances. But I cannot, for the life of me, understand why the Treasurer has introduced some of the conditions which will apply to the deferred maintenance provision. Why should it be necessary to lodge an interest-free deposit with the Treasury? If that condition be insisted upon, many taxpayers will derive no benefit whatever from this amendment, for they will not have the money to lodge with the Treasurer. We all are well aware that, owing to bushfires and the ravages of droughts and pests, many primary producers are today in great financial difficulty, and will not be able to find the ready money to lodge the necessary interest-free deposit. Many producers cannot get their stock to market, and, in fact, are facing great difficulty in finding transport to send stock to better agistment country. It will be deplorable if, because of the lack of financial resources, taxpayers to whom this provision is intended to apply, will not be able to take advantage of it. I am glad to know that the Treasurer intends to move for the deletion of the limitation of £100. I direct attention to the following conditions in proposed new section 53a, which, it is proposed, shall apply to deferred maintenance: - 53a. - (1.) The estimated cost of deferred maintenance shall, subject to this section, be as allowable deduction. (2.) A deduction shall be allowable in respect of deferred maintenance where the taxpayer -
It will be seen that three conditions have to be satisfied. I can see no reason, however, why the full estimated amount should not be allowed. The Commissioner has to be satisfied that the claim is reasonable? Why, also, cannot the matter be dealt with by a reserve fund ? I can find no arguments which favour the interest-free deposit proposal as against my suggestion for a reserve fund. We must remember that many farmers will be quite unable to find the money for the proposed interest-free deposit.
– In fact, the cases of greatest hardship will obtain no relief from this provision.
Mr.FADDEN. - That is so. I propose to submit to honorable members some illustrations of the hardships that may arise. Take the case of a grazier whose income from personal exertion last year was £830. The amount of tax for which he would be liable is £278 14s. Had he been allowed to deduct, say, £80 as the amount which he would probably have spent on repairs if man-power and materials had been available, his tax would have been only £243 9s. Consequently, he is out of pocket to the amount of £35 5s., based on an inflated taxable income. Yet he still has to find the £80 in cash to deposit with the Commissioner in order to enable him to take advantage of the deferred maintenance provision for last year only. I submit that that is grossly unjust. Take another case - that of a grazier whose income from personal exertion last year was £2,000. The amount of tax for which he would be liable is £951 5s. Had he been allowed to deduct, say, £250 for repairs, his taxable income would have been reduced to £1,750. The tax on £1,750 would be £776 10s., a difference of £174 15s. Having paid out an extra £174 15s. in taxation, he still has to find £250 in cash. A similar position arises in respect of the previous years to which the section is applicable. Consequently, I submit that a more equitable method than the deposit of cash should be explored, and the scheme should be extended to amounts of £50 and upwards, instead of £100, as this would give desirable relief to the small businessman. Administrative difficulties should not be a legitimate excuse, as the difficulties of the man on the land are worthy of alleviation, even though additional work is imposed on the Taxation Department.
I am unable to discover any logical reason why the condition for granting this concession should be the lodgment of an interest-free deposit. ‘The requirements of the section could be met without the necessity for lodging any money. The Commissioner of Taxation need only give a certificate, as he will do when he accepts the interest-free deposit, as to the truthfulness of the claims for deferred maintenance and repairs, which must ultimately be met.
I join with the Leader of the Opposition in pointing out that the period of two years from the termination of the war, which is provided in this legislation, is too limited, because an enormous demand will arise for man-power and materials to effect deferred maintenance and repairs. I should like the Treasurer to define the phrase “ termination of the war “. Recently, we were not able to obtain a clarification of this most important matter.
– The right honorable gentleman may be sure that it will not synchronize with the cessation of hostilities.
– I agree also with the remarks of the Leader of the Opposition regarding the conditions contained in section 75, which provides -
Expenditure incurred in the year of income . by a taxpayer engaged in primary production on any land in Australia in -
the eradication or extermination of animal or vegetable pests from the land;
the destruction and removal of timber, scrub, or undergrowth indigenous to the land;
the destruction of weed or plant growth detrimental to the land;
the preparation of the land for agri culture;
ploughing and grassing the land for grazing purposes; and
the draining of swamp or low-lying lands where that operation improves the agricultural or grazing value of the land, shall be an allowable deduction.
Under the present act, expenditure incurred on all those items is an allowable deduction,but each of them has had to be deferred because of the very wartime conditions that have made necessary the deferment of maintenance and repairs.. In many instances, the delay or neglect in carrying out these works has affected the productivity of the land, and will have as disastrous monetary consequences as will the deferment of maintenance and repairs. Assuredly, these factors must receive attention as soon as man-power and materials become available. The reasons which prompted the Government to grant a concession in relation to deferred maintenance and repairs should apply equally to the items contained in section 75. The right honorable member for Yarra declared that those works have always been regarded as being of a capital nature, and the allowance of expenditure on them as a deduction has been in the nature of a concession. That has been generally accepted, but is it any logical reason why their postponement should not be provided for in the same way as the Government has considered it necessary to provide for deferred maintenance and repairs ?
I shall not enter into a disputation with the right honorable member for Yarra (Mr. Scullin) regarding the introduction of the rebate system, because we are at cross-purposes. The point that I wish to make, which was entirely undeveloped by the right honorable gentleman, was that the method and quantum of allowable deductions to the family man should not have been affected to the extent that they were affected by the introduction of the rebate system. In the debate on the Income Tax Assessment Bill on the 28th and 29th May, 1942, the following passage occurred: -
– The Government cannot accept the proposed amendment, chiefly because a readjustment to give effect to it would probably cost millions of pounds. The scale has been prepared on the principle of rebates.
– Will the Government’s proposals increase the revenue by millions of pounds?
– No; but I am informed that a reversion to the system of deductions, instead of allowing for rebates, would have a serious effect upon the revenue - probably to the amount of £750,000.
– The honorable gentleman said that it would probably cost millions of pounds.
– The loss of revenue may exceed £750,000.
The statements which I have just read arose out of my advocacy of the deduction system as opposed to the rebate system which the Treasurer was then substituting. It will not be necessary for me to go into further details regarding the schedules in order to show that the introduction of the rebate system imposed on taxpayers with families an additional burden of, at least £750,000, as compared with the deduction system which I have continually advocated.
– The right honorable gentleman will concede that the deduction system made a greater deduction to the family man in the highest range of income than to the man in the middle range of income.
– I anticipated that objection by preparing the following table : -
Therefore, the fact remains that the rebate system must be disadvantageous to the family man compared with the deduction system. In committee I shall submit amendments dealing with the matters that I have mentioned. I ask the Treasurer, before he replies to this debate, to examine the condition of the lodgment of an interest-free deposit with the Commissioner of Taxation, because I submit that there is no necessity for it. The deferred maintenance provision can be carried out without requiring the lodgment of the money. If the Treasurer has other reasons, I should like to hear them. I ask the honorable gentleman to include in this legislation the expenditure mentioned in section 75 of the act, because those works have been unavoidably delayed as the result of the lack of manpower and materials. My third point is the necessity to define the words, “ termination of the war “. When this conflict ceases, there will be an enormous demand for man-power land materials, and those who should be the first to get this concession will probably be the last to have the physical means of complying with the act.
– I have listened to three speeches by three taxation experts. All of them commended the bill, so it is very comforting to me to -find myself also giving it my blessing. Indeed, I have discovered in it so many of the things that I hoped to find in such a bill that I feel somewhat ungracious in venturing to criticize it at all. Previous speakers on this side have raised certain points with which I agree. I wish to address my criticism mainly to that aspect of the measure which affects family life. I consider that it perpetuates an evil which is as old as taxation itself, in that it fails to recognize, as income tax always has failed to recognize, first the extent of the responsibility which the family man undertakes in comparison with that borne by those who have no children ; and secondly, the value of the service to the nation which is performed by those who produce families. There seems to have prevailed always the false idea that, in some miraculous fashion, it is cheaper proportionately to keep two children than one child, when as a matter of fact any ohe who has had experience at all in dealing with several children will know that the contrary is the case. Wear and tear on clothing is greater where there is more than one child. Wear and tear on furniture and fittings is more severe. Wear and tear on the health of the mother, particularly, is very much greater, demanding frequent medical attention for her. And finally, there is the very much greater risk of infectious disease entering the house, because there are so many more points of contact with the general public at which the trouble can be occasioned. So that, in actual fact, the greater the size of the family, the greater proportionately is the responsibility as time goes on. This fact, I consider, should be given some recognition, not only in our income tax legislation but also in all legislation that can possibly affect the family. We are at a period of our history at which we are in ‘ positive danger of dying from inanition so far as population is concerned. The right honorable member for North Sydney (Mr. Hughes) said to me recently - and I am in agreement with him - “ I believe that, if people will not have children for love they will not have them for money “. Nevertheless, governments should relieve those who accept this responsibility of every burden which it is capable of taking from them. Honorable members will find that in this bill the exemption for the first child is £75, for the second child £30, and £30 thereafter. In my opinion, that process should be reversed.
Fix the exemption for the first child at whatever figure yon will, and then progressively increase it, even to the point at which, on the lower income, practically all liability to tax will disappear after the sixth child. Over and over again there is arising the assumption that there must be equality as between this taxpayer and that, in the rates of pressure, shall I say, upon the man on the lower income and the man on the higher income. As I view the matter, the comparison has to be between persons on- the same level of income. We must compare the man who has accepted the responsibility of a family, with the man who has not. To me, that is a principle which we must not overlook for a moment. We cannot afford to neglect it. Any government which, at this time, has any realization of the tremendous difficulties that are ahead, and the very pressing urgency of the population problem, cannot afford to pursue a policy such as always has been followed by all governments in connexion with taxation matters. When accountants and taxation experts fall out about figures, it would ill become me to rush heedlessly into the arena. Figures were supplied to me to-day to bolster the arguments that I am advancing in connexion with the difference between the concessional rebate system and the deduction system. Hearing some questions that were asked about figures that had been presented at other times, I became a little alarmed that the figures f was proposing to use might not be entirely correct. So I took it upon myself to interview certain officers of the Taxation Department, from whom I obtained figures which, in my view, certainly recommend very highly the deduction system as against the system of tax rebates. The basis of the argument as between the right honorable member for Yarra (Mr. Scullin) and the Leader of the Australian Country party (Mr. Fadden) does not concern me at all for the moment. I take the basis that is provided in the bill - an allowance of £75 for the first child, £30 for the second child, and so on. Under that arrangement, the tax liability of the man on £500 a year, with three children, would be £136 13s. This would be subject to a rebate of £72 lGs., so that his net tax would be £63 17s. But if his liability were calculated according to Ae deduction system, it would be approximately £40, a difference of nearly £24. Therefore, I believe that there are arguments in favour of the deduction system which no government can afford to ignore. I should be delighted, of course, to feel that I had given the impression that, in the field of figures, I can emulate the “daring young man on the flying trapeze “, as certain other persons have impressed me, but I do not for a moment hope that such has been the case. Before I go further, however, I should like to express my very deep gratitude to the man who writes the explanatory notes in connexion will all these bills. Quite candidly, figures appal me, and the language of bills appals me. After reading the explanatory notes, I feel that here at least is a man who is anxious to make plain to the foolish certain things which are apparently designed to be hidden even from the wise.
– It is the man who drafts the bill.
– Whereas in the drafting he can satisfy my learned friend from Kooyong (Mr. Menzies), in the explanatory notes he satisfies even me. I am expressing to him my eternal gratitude. But I am impelled to draw his attention to a detail which is distressing to me, an example that he has given which seems to me to perpetuate an evil as old as man himself. Citing a case in connexion with the extension of medical benefits, he says -
We will suppose, for instance, that in one year the man pays for himself £25, for his wife £20, and for his several children £40.
That struck me as being, possibly, quite a reasonable allotment of money that is paid to the doctor. I then came to the dental expenses. I found that these were stated at £15 for the man, £5 for the wife, and £8 each for the children. Why does the mother continue to bear toothache, when the father can manage to pay £15 in dental expenses? This is merely a little matter, which in passing demonstrates to the House that certain reforms are long overdue, including even this one of giving instances which set a very bad example to members of the community. I congratulate the Government upon the extension of concessions in connexion with medical and dental expenses. I agree with the right honorable member for Kooyong that it would be better that we should wipe out the present limitation. Whether or not that will ever be done, I do not know, but I venture to predict that it will be. With some other honorable members who have spoken, I believe that all governments in this country are moving in the direction of liberalizing conditions for’ the benefit of all citizens of the Commonwealth.
– Does the honorable member agree that it would be better to have a comprehensive health service rather than deductions?
– With the honorable member for Bass (Mr. Barnard), I believe that hospitals are not health centres, and that most people to-day are inclined to mistake healing for health. Naturally, I believe that a comprehensive health system will begin at the bottom by concentrating upon preventive measures, and that this kind of expense will decrease as the years go by if government be properly regulated. I am delighted that the Government should have made an allowance in respect of dental expenses. I congratulate it also upon its provision to extend from sixteen years to eighteen years the age limit on the concession in respect of children who are attending a school or a university. Obviously, “ university “ is hardly a. word that should have been introduced, because at eighteen years of age a university career has only just begun. No one- will argue that any member of the community is worse for having undertaken a university career. I consider that no one should be prevented or discouraged from going on to the university, unless, perhaps, he or she keeps out another with much more ability, who would derive much greater benefit. We have to see that every one capable of using his or her intelligence in a university has the opportunity to do so. I hope that this provision will eventually be extended^ so- as to include children up to tha age of 21 years.
– The honorable member realizes that the Government proposes to give substantial assistance?
– I realize that. But those who do not require that assistance, whatever their financial position may be, should be encouraged to give to their children whatever educational facilities they are able to provide.
I should like to bring to the notice of the Treasurer one other section which could be covered in a similar manner. I refer, of course, to my pet theme - the family. Whenever a family grows, shall we say, beyond the number of four., the mother certainly needs some help in the performance of her duties. In these days, it is practically impossible to get such help from outside. Therefore, it is frequently necessary that one daughter, at least, should help the mother, and between the ages of sixteen and eighteen years, she will be working unpaid in the home while other girls of her age are earning. That girl will be wholly maintained by the taxpayer who has given to the State service of a kini that deserves recognition. I believe that in all cases where there are five children or more in a family, one member of it should be the subject of a concession between the ages of sixteen and eighteen years,, or at whatever age the school exemptions may be extended later. I commend that proposal to the Treasurer..
I also desire to make an appeal on behalf of those who suffer from deafness. In this bill some notice is taken of thosewho need artificial eyes and artificial limbs. Those who are so deaf as toneed hearing aids in order to hear at all are subject to a great expense.
– Is the honorable memberpitching for old Bill?
– I did not know that he was going to be present. Hearing aids cost anything from £35- to £60.
– Oh! More than that.
– Occasionally,. I understand, they cost even more than that, but I, being a conservative person, stick to a conservative figure. I say that they’ cost anything from’ £35 to £60-, and their upkeep costs from Ss. 6d. to 15s. a week for batteries, according to how much they are used. Obviously, the person who is so deaf as to need a hearing aid is one who, without it, could not obtain or keep a job. The wage-earner who must pay from Ss. 6d. to 15s. a week, after having bought his hearing aid, is bearing a heavy burden. I suggest very earnestly that the deaf should receive some concession in line with that given to those who wear artificial eyes.
As so frequently happens, I have devoted most of the time at my disposal to considering some aspect of the impact of government on the family, but I should like to repeat what I have said from many platforms, and also to this House: Upon the basis of the family the whole edifice of civilization rests, and present indications are that unless we support it in every way the family, and with it the race, is in danger of extinction.
.- iSo many honorable members have expressed appreciation of this taxation measure that it would appear churlish of me if I did not add my measure of appreciation. I echo what the right honorable member for Yarra (Mr. Scullin) said when he claimed that this bill represented a step in the right direction, and I hope that I shall not be accused of reflecting on the generosity of the Treasurer (Mr. Chifley) when I say that it is a very timid step, and does little to help the general body of taxpayers.
It would be proper for the House to review war-time taxation, if not during this session, then at an early date. Although it may not be practicable to reduce taxation rates substantially at the present time, having regard to war-time commitments, we should be at least turning our minds to peace-time economy. We should be examining also the effect of what has become the permanent basis of taxation as it affects the community. Already we are discovering weaknesses in the economic structure which will be aggravated by the impact of taxation, and by the failure of the Government to take a realistic view of what is happening. This is not the time to plead for an alleviation of the hardships of taxation on individuals, but I suggest tha.t it is time for Parliament to review the impact of taxation on certain sections of industry, including primary production, in order to discover whether the taxgatherers, in searching for revenue, are not going beyond the individual and affecting the value of the asset from which the income itself is produced. Our taxation rates on the lower incomes are almost identical with those of Great Britain, Canada, and New Zealand, but on the higher brackets of income, particularly on those from £1,000 upwards, our rates are very much higher. The higher incomes are derived from the following sources : - (1) Professional activity; (2) the activity of business executives; (3) investments; (4) landed property; and (5) industry. In regard to the first two sources, I do not suggest that there is very much that the Government can afford to do at the present time. My criticism, such as it is, is not directed against high taxation, which is necessary at the present time. I am anxious to ensure that the gathering of taxation from certain sources shall not kill the goose that lays the golden egg. The goose should be kept in a robust condition so that it may go on laying eggs for a long time. The effect of heavy taxation on professional men and business executives may be such as to cause them discomfort and even hardship, having regard to the obligations into which they entered in better times, but at least it is not damaging to the source from which the income is produced. In regard to income from property investments, no immediate problem is created because the income is coming in, and the source of the income is not being adversely affected in a general way. So far as that class of taxpayer is concerned, the problem will arise when the Government seeks to encourage the flow of investment from property back into industry. It will then have to provide some greater incentive than exists to-day. I mentioned in my speech on the budget the example of the man with an income of £2,000 from property who sought to increase his income by investing his capital. He would have to invest £60,000 at 5 per cent, in order to obtain a net increase of income of £330. The Government cannot continue to ignore the last two groups of taxpayers unless it is prepared to face the destruction of income-producing assets to which it will have to look for a great deal of help during the period of post-war reconstruction. Landed property and business organizations are being drained at the present time in the payment of taxation. I detect on the part of members supporting the Government, and also on the part of the Government itself, a lack of realism in their consideration of the assets from which income is produced. The right honorable member for Yarra said to-night that people should pay tax on their true income. I am sure that he did not realize quite what he was saying. The Government is not calling on people to pay tax on their true income, but to pay tax on their notional income. A figure may appear as income on one side of a profit and loss account, but it may not represent true income in the sense that it is income personal to the taxpayer, and ready for his use. The obvious illustration is a business organization, either a private company, the income of which goes to one or two principal shareholders, or a partnership the profits of which are distributed amongst the partner-taxpayers, with a profit on paper of £10,000 at the end of the year’s trading. The tax is levied according to the profit shown, but, when the taxpayer looks for the wherewithal to pay his tax, he finds that it is represented in his business, either in the form of increased stocks to meet expanded turnover, or in debts owed to him by people with whom he has traded. Business organizations have been living in the years of high taxes on such fats as they possessed, or have been driven to the point of overtrading on the shrunken capital left to them, and have been getting into all sorts of difficulties as the result. I need not elaborate the problem. It should be very familiar to the taxation authorities, because it is to that sort of difficulty that we can trace the very serious increase of the arrears of tax. revealed in the budget. The difficulty has been freely recognized by the governments of other countries.
In Great Britain an excess profits tax at the rate of 100 per cent, has been levied since 1941, but one-fifth of this has been credited to the firms paying it, to be refunded when hostilities cease. Recognizing the inadequacy of even this provision, the Chancellor of the Exchequer announced in April, 1944, additional concessions. These include a tax allowance of 20 per cent, of the value of new machinery, and 10 per cent, of the value of new buildings. Canada provides for a refund of one-fifth of its 100 per cent, excess profits tax, under certain conditions, with payment apportioned to successive years according to a scale. It allows “ reasonable future depreciation in inventory values “ as a war-time tax deduction, and amortization of war-time plant and buildings up to 33-j; per cent.
New Zealand and the United States of America also have made special provisions. Those countries recognize the vital importance to the future well-being of their economy by the maintenance of industry in a healthy state. They realize the need for industries to have reserves to enable them to switch over from war-time production to peace-time production and to expand production when more manpower becomes available so that they shall be able to meet the consumer demand that will be turned loose after the war. Here we have what appears to be a sympathetic approach, but it is a thoroughly unreal approach to the problem. The provision in respect of deferred maintenance in this bill does represent a move in the right direction, but it goes only a small part of the way towards facing the serious decline of the capacity of industry to meet inevitable post-war difficulties. It has been pointed out to me that this deferred maintenance provision may be helpful to wellestablished companies, but will not meet the needs of the companies mentioned by the Leader of the Australian Country party (Mr. Fadden).’ The clause will provide relief to companies with considerable reserves and to prosperous companies. But there are companies not sufficiently strong to make the deposits required. A company which, because of war conditions, has been forced to exhaust its working capital, would not, after having paid taxation, be able to freeze its funds for a considerable period in the Treasury. A practical alternative which commends itself to me, and which I advance for the consideration of the Treasurer, is that the Taxation Department should be prepared to accept the certificate of a qualified engineer supported by the certificate of a chartered accountant in respect of some of these companies. Otherwise, the companies will not -be able to take advantage of the only measure of relief so far forthcoming. The following table gives an interesting comparison between British and Australian income tax on individuals: -
Another interesting comparison can be made. In order to have £2,000 remaining after paying tax, an Australian taxpayer would need to have an income of £12,000 from personal exertion, or £16,000 from property. In the United Kingdom the relative figures are £4,400 and £4,700. It must also be kept in mind that municipal rates and land tax might easily eat up the £2,000 and more, leaving nothing at all, or less than nothing, for the taxpayer. It is clear that in the higher brackets of income the Australian tax is the heavier, although the tax on the lower and middle incomes is higher in Great Britain than in Australia. The point I wish to make is that in Australia a business organization not incorporated as a company and owned by one taxpayer which earned £10,000 would have to pay £8,155 in tax. Any one who has had experience of what happens when the life blood of a business, its liquid capital, is drained off will realize that that company will face increasing financial difficulties while the present circumstances last. The answer is not to suggest that taxes should not be levied. The answer will perhaps be found in a number of different remedies all of which may have to be used in one form or another. The first is tax concessions which might be varied as to conditions and amounts, as in Great Britain, the United States of America and Canada, but the essential is that they shall connect with the realities of our Australian war economy and give a total adequate to the end in view. The second is short-term government subsidies in special circumstances. I believe that assistance has been given to war contractors who have been called upon to carry heavier stocks than they otherwise would either through the Commonwealth Bank or by deferring collection of tax. The third method may be by means of government advances based on the value of the stocks held or the amount of money owed to the company. It may be suggested that the banks carry out this sort of function, but their capacity to give relief is limited. If an extension of overdrafts is called for there are difficulties. A case has to be made out and permission granted. There may be some cases in which the banks themselves, even if permission could be secured, would not be prepared to make any further advance to a client, but that client may be the firm that the Government would feel it would be to its disadvantage to lose. I understand that this problem is receiving the consideration of the Government. The Commonwealth Bank Board in its recent report stated that we would have to look to the small industries for much of our reconstruction activity and that they would require some special capital provision. It may be that we shall have to establish in this country, under government auspices, an organization approximating to the Reconstruction Finance Corporation of America. Certainly, the need for such activity cannot be ignored by the Government if it desires that Australian industries shall compete on a reasonable basis in world markets. T do not know whether it is genera Uy realized that every Australian business organization or industry is a gold-mine to the Government, which not only draws revenue by the direct taxation of profits of such enterprises, but also obtains money from them by sales tax, telephone calls, stamp tax, pay-roll tax, and otherwise. It is not only the tapping of dividends that brings revenue to the Government. A tendency is noticeable in the community to assume that it is only necessary to establish a business, and it will go on providing profits practically for ever. Research recently conducted in the
United States of America has revealed that the average life of a business is five years. Many businesses, of course, fail in a year or two, and many others may last for a decade or two, but the average life was proved to be five years. The Government is not, at present, giving any incentive to people to engage in new industries. I do not question that policy under existing circumstances, but the time is coming when, for the maintenance of a healthy economic life in the community, encouragement will have to be given to people to establish new industries.
I urge the Treasurer to give careful attention to the suggestions that have been made during this debate for the liberalizing of the conditions that will aPply to deferred maintenance. The proposals of the bill are not by any means a complete answer to the problem, for, as several honorable members have pointed out, many cases of hardship will be afforded no relief whatever. The provision for the lodgment of an interestfree bond with the Treasury will make it impracticable for some persons to obtain any relief, for they will not have cash resources sufficient to enable them to lodge the necessary bond. I suggest that the Treasurer should agree to accept the certificate of a qualified engineer and a chartered accountant in certain circumstances. Many business men will not have the cash margin necessary to enable them to lodge a deposit which, in effect, would become a frozen asset of liquid cash. I am speaking, at the moment, not of big businesses which have passed through their capital developmental stage, but of smaller enterprises with a turnover of, sa;- between £100,000 and £250,000. Many businesses falling within that group require all their capital assets for developmental purposes and would be placed in a difficult position if they had to make a big cash deposit with’ the Treasury in order to take advantage of the deferred maintenance provision. In many instances the management of these enterprises is constantly chasing taxation demands and not catching up with them and it will be some years, even under the best of conditions, before they can approach their bankers for increased financial accommodation with any hope of success.
I support the suggestion of the Leader of the Opposition that more consideration should be given to parents who are educating their children. To discontinue the proposed rebate at the age of eighteen years will be to make it largely ineffective. If ‘ the Government intends to stimulate university education, I point out to it that many young people are only at the beginning of the course when they reach eighteen years of age. Quite commonly, students .only pass the leaving certificate examination at that age, which entitles them to enter a university, or complete the honours course. I suggest, therefore, that the rebate should not cease at eighteen years, but should apply to the full period of university life. If this concession were granted it would benefit parents who are doing their utmost to educate children to take their places in the professional ranks of the community. Only a small proportion of the people would-be affected, and the revenue would not suffer seriously.- I commend to the careful and sympathetic consideration of the Treasurer the speech of the honorable member for Darwin (Dame Enid Lyons), who, in making her submissions, drew upon the wisdom she has gained in connexion with her own family.
Subject to any adverse comment that 1 have made, I support the bill and welcome the concessions it will afford, but I hope that before another budget is introduced the Treasurer will review our war-time taxation measures with a view to the granting of relief in .the directions that I have indicated.
.- The Government and the Treasurer (Mr. Chifley) are to be complimented on the concessions that are being granted by this measure. I hope, however. that very early consideration will be given to the affording of relief from the present heavy taxes to persons who are dependent upon compensation payments for invalidity, superannuation payments, and other sources from which only a limited income is obtained. In 1941, owing to war conditions, the statutory exemption was reduced from £200 to £156. In March, 1943, at the time when the Government’s national welfare scheme was introduced, the exemption was further reduced from £156 to £104, the intention, of the Government being to make a levy on the incomes of juniors in the communities who were earning relatively good wages and would suffer no hardship by having to contribute a small proportion of their income, by means of taxation, to the National “Welfare Fund. It was not intended then, I believe, that undue burdens should bc placed, upon persons in receipt of small incomes from superannuation funds or invalidity payments through workers’ compensation schemes, and the like. Under certain conditions females of 60 years and males of 65 years become eligible for the old-age pension, but others may suffer substantial hardship through the impost of taxation if they have small incomes from the limited investments that they may have been able to make during their working life. Such individuals who have incomes of £2 or £3 a week actually save the Government an expenditure of about £70 a year each by reason of the fact that it is not necessary to pay them the old-age pension. It is unjust, therefore, that such individuals should have to pay income tax. I have taken this matter up with the Treasurer on several occasions, and I trust that, at the earliest possible opportunity, he will grant the relief for which I am applying. We have a precedent for this because persons serving in the armed forces have been granted a higher rate of exemption. The original exemption granted to them was £200, but later it was increased to £250. I do not contend that they should not receive that exemption, because I am in complete agreement with what has been done. However, I point out that it is possible for the Government to apply one scale of exemption, to one section and another scale of exemption to the general community.
– Is the honorable member prepared to vote in support of his contention?
– I am prepared to support it. I realize that with the introduction of the pay-as-you-earn system, the rates have been fixed; but before the next budget proposals are introduced, the Treasurer should grant this exemption to the persons I have mentioned. The amount of tax which they pay is not in the aggregate very substantial, but it is a heavy impost upon individuals receiving only a small income. For example, persons in receipt of £2 a week, particularly if they are suffering from an ailment which entitles them to receive workers’ compensation, have difficulty in finding even the small amount of tax for which they are liable. ‘The fact that the Government saves an amount of £70 a year because it is not liable to pay invalid or old-age pensions to them, increases the strength of my representations on their behalf. They lose both ways, but the Government saves the amount of the pension that would otherwise be paid to them.
– They would not be entitled to receive a pension if they have an income of £150 a year.
– If they have an income of only £100 a year, they do not receive a pension. The Government is saving £70 a year because it does not have to pay pensions to them. Consequently, they should be given some benefit by increasing the amount of exemption from £104 to £156 per annum. It has been suggested to me that anomalies would be created by making this concession. For instance, one section of the community would receive the exemption whilst, other persons, who were entitled to pensions but who were not receiving them because they were in receipt of superannuation or compensation payments; would suffer. My contention is that the Government can go even further, and exempt from taxation the income up to £156 a year of all females over the age of 60 years and all males over the age of 65 years. By so doing, the Government would give to these people what they are justly entitled to receive, and would still show a substantial profit as the result of their providence during their working life. Not every person in the community is able to set aside, during his working life, sufficient money to yield a small income of £2 or £3 a week. Particularly do I make an appeal on behalf of those persons who receive invalidity payments under workers’ compensation schemes. Through working in the mines, they sacrificed their health and probably years of their life in serving the nation.
They receive a small income under a State compensation scheme. Under State law the income is inalienable, and I believe that the Commonwealth Government should not exercise its right under common law to press for the payment of taxes by these people. I know that provision exists in the taxation law to enable these people to appeal to the Taxation Board of Review for exemption, and many of them have successfully done so. But the justice of their case requires the insertion of a special provision in the Income Tax Assessment Act granting to them an exemption from tax on income up to £156 a year instead of £104 per annum as at the present time.
.- I am disappointed that no provision has been made in this legislation to correct anomalies to which I have directed attention from time to time. The act provides that a widower may claim a deduction for a daughter under the age of sixteen years or any woman who acts as a housekeeper for him and his children. Through that provision, a serious anomaly sometimes arises. A husband may be deserted by his wife. He has children under the age of sixteen years. His eldest daughter keeps house for him. Because he is not a widower, he is unable to claim a deduction in respect of that daughter. Then again, a man may be deserted by his wife, who goes to live with a widower; the widower may claim a deduction in respect of the other man’s wife, because she is his housekeeper, and he has children under the age of sixteen years. Those deductions should not be allowed as they encourage immorality in addition to inflicting great hardships upon the deserted husband. All that is required is a simple declaration that the man has been deserted for a period of, say, three years. The “Widows’ Pensions Act provides that a wife who has been deserted by her husband for three years shall be eligible for the pension. Some honorable members may ask why the deserted husband does not divorce his wife when she went to live with another man. The answer is that some persons have religious objections to divorce. When, they are married, they promise to live together until death parts them. I hope that, in committee, the Treasurer will accept an amendment dealing with this matter.
– I have already promised the honorable member to examine these matters when next our taxation is reviewed.
– These anomalies should be rectified without delay. I support the appeal of the honorable member for Darling (Mr. Clark) on behalf of those receiving a small superannuation payment under say, the mineworkers’ pensions scheme. On reaching the age of 60 years the pensioner receives £2 2s. a week, and an allowance of 25s. a week for his wife or his housekeeper. Because the man draws the whole sum, the whole amount becomes taxable. The New South Wales act distinctly provides that the amount of 25s. is an allowance to a wife or a housekeeper. I understand that the Treasurer (Mr. Chifley) has discussed this matter with the Premier of New South Wales, and the suggestion, has been put forward that if the wife signed for the 25s. and the husband signed for the £2 2s., the two amounts would not be taxable. If that is so, I do not know why the State Government does not permit it. Under the present conditions, women have complained to me that their husbands have drawn both allowances and spent them on betting and alcohol. If the wife were paid separately, as child endowment is paid separately to women, this strife in the home would be avoided.
Absenteeism in the heavy industries is definitely due to high rates of taxation. When employees have worked more than seven days in a fortnight, their tax payments reach a considerable amount. In the circumstances, contract workers will use any excuse to stay away from the job. Public attention has been focussed upon coal-miners because of absenteeism, but does not appear to be concerned with legal luminaries and Macquarie-street specialists who, paying tax at the rate of 18s. 6d. in the £1, absent themselves from their work and go on fishing expeditions. Because of high rates of taxation, specialists prefer to take a holiday instead of attending to the sick. A specialist will often suggest that a patient should consult a general practitioner. The reason is that the specialist after paying tax would receive only 4s. 6d. out of his fee of £3 3s. Why public attention is not directed to them, as it is to workers who absent themselves from duty, is beyond my comprehension.
There has been tremendous delay in the issue of assessments. Some persons employed in heavy industries have not yet received their assessments for last year, and they hold stamps worth as much as £250.
– The problem is solely one of man-power.
– The reason is not so much the lack of man-power as the concentration of administration in Sydney. There is an advisory office in Newcastle, and I thank the Treasurer for it, because it was established in response to repeated representations by me. It does a lot of good, but should be extended so that it may be not only an assessment office but also a paying office. The population within a radius of 50 miles of Newcastle is greater than that of the State of Tasmania, and the whole of the heavy industries are concentrated in that area. Assessments are long overdue. Tax stamps have been stolen from the homes of those to whom they were issued. An individual who was arrested and convicted, admitted the theft of stamps. Yet a taxpayer who loses his stamps in this way does not receive any concession on that account. A sworn declaration that his stamps had been destroyed by fire would entitle him to an allowance. A concession was denied to one taxpayer, despite the fact that he stated on oath that he had initialed and cancelled stamps that had been stolen from him. Had his assessment been issued he would have redeemed them, and thus would not have suffered loss by theft. I admit that under the new system this danger will no longer exist. Nevertheless, some allowance should be made in respect of stamps that have been issued in the past.
I thank tie Treasurer for the concessions he has granted, especially the allowance to those who are put to the expense of purchasing artificial limbs. The exten sion of the allowance in respect of children attending school up to the age of eighteen years, is a good one. In addition, however, there should be an allowance in respect of an invalid child whose invalidity is not equal to 85 per cent, and for that reason is not at present entitled to the invalid pension. I accept the bill as a whole, and recommend its early adoption.
– in reply - Many suggestions have been made by government members, including the honorable member for Hunter (Mr. James), and these I have promised that I shall examine later. Further amendments have been urged by the Leader of the Opposition (Mr. Menzies) and the honorable member for Barker (Mr. Archie Cameron). The honorable member for Kalgoorlie (Mr. Johnson) and the honorable member for Perth (Mr. Mountjoy) have advised an allowance for attendance on blind persons while they are absent from their homes. The honorable member- for Darwin (Dame Enid Lyons) has made a proposal which has a good deal of merit. I make it clear that I do not propose to accept any amendments at this stage. I am always wary of amendments to taxation measures, because one needs to see where one is going. I propose to make a further review of all the tax concessions in the near future, and 1 hope that it may be possible .to add to those that have been granted.
Question resolved in the affirmative.
Bill read a second time.
Glauses 1 to 3 agreed to.
Clause 4 -
After section fifty-three of the Principal Act the following sections are inserted: - “53a. - (1.) The estimated cost (not being less than one hundred pounds) of deferred maintenance shall, subject to this section, be an allowable deduction. “ (2.) A deduction shall be allowable in respect of deferred maintenance where the taxpayer -
has paid to the Commissioner, at the time of making the application, a sum equal to the estimated cost of the deferred maintenance. “ (8.) In this section, ‘deferred maintenance ‘ means the maintenance of property, whether real or personal, in a normal state of repair or upkeep where -
the need for the maintenance first arose in the year of income and prior to the termination of the present war;
the taxpayer was unable to undertake the maintenance by reason of circumstances attributable to the present war; and
the expenditure upon that maintenance would have been an allowable deduction under section fifty-one or fifty-three of this Act if it had been actually incurred by the taxpayer.”.
– I move -
That, in proposed new section 53a (1.), the words “ (not being less than One hundred pounds) “ be left out.
The limit of £100 was fixed following the precedent of the New Zealand proposals. The complaint has been made that this may apply harshly against the small taxpayer, and the Government has consequently agreed to withdraw it.
– Proposed new section 53a (2.) provides -
A deduction shall be allowable in respect of deferred maintenance where the taxpayer -
has, during the year of income during which the need for the deferred maintenance first arose, made an application in writing to the Commissioner for the allowance thereof as a deduction;
) has furnished with the application a detailed statement of particulars of the deferred maintenance and the estimated cost thereof; and
has paid to the Commissioner, at the time of making the application, a sum equal to the estimated cost of the deferred maintenance.
There is a curious difference between the theoretical and the practical argument. I suppose that, theoretically, it would be sound to say to the taxpayer : “ Because of the shortage of man-power and materials, you have been unable to carry out necessary work on your property during the last three years. We submit to you that, as a guarantee of your bona fides, you should deposit with the Treasury a sum equal to the amount of the deferred maintenance.” I point out that, according to the explanatory notes, “ deferred maintenance “ also includes artificial manures, such as superphosphate. Although, theoretically, there is here something which appears to’ be sound, practically it is unsound. Apparently, the Treasury has accepted a principle which I was the first to propound in this Parliament twelve months ago, namely, that, on account of shortages of man-power and artificial manures, producers have been unable, during the last two or three years, to maintain their properties at the standard to which they would have been maintained had there been no war, and therefore their incomes are inflated. The Taxation Commissioner has recognized that fact, and has agreed to meet the position in this bill, but, notwithstanding the amendment which the Treasurer (Mr. Chifley) has just submitted, the provision in the bill will not confer any practical benefit on the majority of primary producers in Australia. We are facing what appears to be an unparalleled drought. I do not think that I speak untruthfully when I say that, unless rain falls within the next three or four weeks, hardly a beast will remain alive in the whole of the north-west ‘of Victoria, and herds of cattle and flocks of sheep in the greater part of New South Wales will be sadly depleted. Similar conditions prevail practically throughout South Australia. It is admitted that the properties of primary producers have suffered during the last three years because of conditions over which they have had no control, namely, their inability to obtain the materials and the labour that they have needed. In other words, their earnings have been depleted, and the asset from which they derived income has been more or less a wasting one. A taxpayer who advises the Taxation Commissioner that, because of inability to effect necessary maintenance, he has been unable to enjoy a normal income year, and claims that he has been taxed on an artificially inflated income, is told by the Commissioner : “ That is right. But before you can claim any deduction, you must deposit with me a sum equal to what you consider and I may determine is the cost of your deferred maintenance.” The great majority of primary producers work on overdrafts. Indeed, no progressive primary producer works on anything else, because, when it can be said of a man that he ceases to require an overdraft it can also be said that he has ceased to progress. Therefore, in order to provide a deposit, the producer must go to his bank and arrange for an overdraft. There are in existence certain regulations governing the extension of overdrafts, but let us suppose that he succeeds in obtaining an extension of about £1,000, because he estimates that that represents the cost of the deferred maintenance and of the fertilizers which he would have used in the ordinary course of events. On this amount of £1,000 he has to pay 5 per cent. interest, or perhaps a little more - a total of £50 a year at least. I say to the Treasurer that this alleged concession is of no value whatever to the small and middle class primary producer.
– Apparently the honorable member knows more about it than do the men whom we met in conference.
– I do, because I am engaged in primary production.
– We met men who are engaged in primary production.
– The Treasurer met certain representatives of the Graziers Association, and I am sure that not one of those men has assets, taken on the unimproved value, of less than £10,000. I am not worrying about the big man.
– The honorable member makes me laugh.
– If the Treasurer will investigate the matter he will find that, although this provision represents a concession to the big man, it is not worth a damn to the small and middle class producer. All along this Government has pandered to the big man, whether he be a manufacturer or a grazier. The Taxation Department has accepted the principle of deferred maintenance. If certain taxation has been paid that should not normally have been paid, I have no objection to the department holding the money until after the war; but at a time when farmers have to knock well-bred stock on the head because the heavens have not opened, it is wrong to require them to go to their banks for an overdraft of perhaps £1,000 in order to qualify for something to which they are admittedly entitled. The fact that they will have to get an overdraft and pay 5 per cent. on it makes the alleged concession not worth having.
– The honorable member is even out of date in the matter of interest rates.
– Well, let us say 43/4 per cent., but surely the Treasurer does not suggest that all primary producers get their overdrafts at that rate. The farmer will have to balance the value of the concession against what he will have to pay in interest on the overdraft. This is an instance in which theory breaks down when confronted with practice. I am convinced that I am right, and that all the advisers of the Treasurer are wrong. Every farmer, almost without exception, takes an intense pride in his property. With him, it is not just a matter of making it produce so much income. Perhaps his first objective is to improve his property. He is stirred by the thought that he owns so many broad acres. That is why there are in Australia so many millions of acres that are a delight to the eye and a source of pride to the owners. In normal times the owner will pour back into his property a great part of the money which it earns for him, and in this way he establishes a heritage for the benefit of those who will come after him. During the war, the farmer has not been able to effect improvements and so, probably, he has spent the money. Perhaps he should not have done so, but, nevertheless, he has. Now it is proposed that, after having paid tax on an artificially inflated income, he must go to his banker, or to his wool firm, or to the stock and station agent and raise an overdraft of £1,000 with which to effect improvements after the war. He must make what amounts to a forced loan to the Government in order to obtain a benefit to which the Government admits that he is entitled. There are times when practical application beats theory. The progress of this country in the last 150 years, which not even the United States of America can parallel, was made possible, not by theorists or philosophers, but by practical men.
Thousands of primary producers instead of pouring 40, 50 or 60 tons of superphosphate on to their properties have been prevented from doing so by the exigencies of war. Their income tax has been abnormally swollen because they have not been able to expend money on superphosphate, and therefore have been unable to claim the normal deduction. The Taxation Department says, “ We recognize that, and we therefore say to you that you shall deposit with us a sum equal to the total value of the manure which you would normally have placed on your property. Within a period of six months after making his deposit or after the termination of the war “ - this is an important point, because the Attorney-General (Dr. Evatt) told me a few weeks ago that war will not end until after the last peace treaty has been signed, which may be five or six years hence - “we shall make available to you the money which you have deposited with us in order that you may expend it on deferred maintenance “. What a lovely theory! I can imagine professors and taxation officials trying to convince a hard-headed farmer. He would probably reply, “I used to put 40 tons of superphosphate on my property, which met my full require? ments. I have not been able to do so for the last few years. Now, out of the goodness of its heart, the Government says that it will make available to me the sum of money which I have deposited to enable me to put down 120 tons “. Few of my friends opposite have used superphosphate on a pastoral property, but they must have used blood and bone on their lawns, and they ought to know that if they were to put too much blood and bone down, their lawn3 would be burnt. The same applies to the top-dressing of a pastoral property. So, we shall have this most peculiar situation. At the end of the war the Government will come along and say, “You have deposited hundreds of pounds with us. We give it back to you in order that you may top-dress your property. We expect you to use it within a specified time “. This is another example of theory conflicting with practice.
– Order ! The honorable member’s time has expired.
– I wish to identify myself with what the honorable member for Deakin (Mr. Hutchinson) has said about the effect which this proposal will have. I quite realize that the Treasurer (Mr. Chifley) is anxious to do what he believes to be the right thing. My electorate is stricken with drought this year. A good deal of it was stricken with drought last year, when there were huge areas from which no crop was taken off and other areas which did not produce £100 worth of wheat. Bad aB conditions were last year, they will be worse this year. If there is to be a chance of those farmers obtaining benefit, they must first put hard cash into the Treasury. That is a condition which they cannot fulfil. They are at their wits end. I am perfectly convinced that the premiers next week at the conference of Commonwealth and State Ministers will ask for the provision of financial assistance for farmers in the droughtstricken areas.
– They have already done so.
– I do not doubt it. What is the use of requiring men to put money into the Treasury in order to obtain the benefit of deferred maintenance when they will have to be maintained by Commonwealth funds? This deferred maintenance is accumulating in the Mallee wheat lands which stretch from New’ South Wales through Victoria into South Australia. There is nothing like drought to cause repairs and maintenance. It is a tremendous problem. About twelve months hence, as a “ nark “ I shall ask the Treasurer for a return showing how many of the farmers have taken advantage of this measure. I. tell the Treasurer in advance that the number will be small.
Amendment agreed to.
That paragraph (o) of proposed new section 53a (2.) be left out.
The paragraph provides that a deduction shall be allowable in respect of deferred maintenance where the taxpayer -
That condition destroys the whole value of this concession. My amendment is necessary to ensure that justice shall be done. I ask the Treasurer to take into consideration the fact that on account of inflated incomes, because of inability to buy materials for repairs, the farmers have had to pay more tax than otherwise would have been the case. The conditions set out in the bill in relation to deferred maintenance could be applied without the necessity for applicants to lodge a non-interest bearing deposit. As the Commissioner could satisfy himself that a claim was reasonable, I cannot understand why the Treasurer is insisting upon hard cash being lodged.
– If an amount of money has been set aside for maintenance and repairs during a given period and it is not used, should itbe taxable or an allowable deduction?
– I shall deal with that point. At the moment I am urging that taxpayers should not be obliged to lodge the proposed non-interest bearing deposit. Perhaps the insistence on this would not cause trouble in a good many cases, but I am concerned about taxpayers who are experiencing drought and other troubles and who during a certain period have been unable to effect repairs, and therefore have had to return a really inflated income upon which they have been taxed. Such people have not now the liquid resources to make the necessary deposit.
– If the money were not deposited the taxpayers might not have it to effect the necessary repairs when materials and man-power became available.
– But the Treasurer would have the money, and it would probably be in the form of treasury-bills. As a matter of fact these deposits would become, in effect, compulsory loans. I suspect that this is another method by which the Treasurer is hoping to get his hands on a fairly substantial sum of money.
– Fictitious claims have been made in the past in respect of maintenance.
– That does not alter the fact that this is an unjust provision. Effect could be given to the Treasurer’s intentions without obliging taxpayers to lodge money. Without this requirement the Commissioner could satisfy himself that the amounts claimed were reasonable.
– “ Phoney “ claims have been made in the past.
– They could also be made under the provisions of this clause. The deductions could be allowed without the lodgment of a cash deposit.
– Surely that would be a form of social credit?
– That remark is not fair. I am sorry that I have not been able to impress the Treasurer with the practicability of my proposal.
– The right honorable gentleman would have a good case if he could prove that “phoney” claims have not been advanced in the past.
– Surely the honorable member for Dalley (Mr. Rosevear) must realize that the point he is advancing does not touch the real issue. I repeat that even without the lodgment of cash the commissioner could satisfy himself whether claims were reasonable. I am making a strong appeal in the interests of taxpayers who have not the cash resources to lodge the required deposits. Taxpayers who could raise the money at existing interest rates would suffer very little hardship if they did so and paid the amount of interest that would be involved. Their advantage in tax concession would more than recoup them. But many taxpayers who, because of bad seasons and also because they have been taxed at inflated rates on inflated income could not raise the money, would be suffering a serious hardship. They would not obtain the relief which the Treasurer alleged he desires them to obtain. I contend that if the provision in the billbe agreed to there will be discrimination in respect of taxpayers in the same groups, and this should not be allowed to occur.
– Does the right honorable member know of any persons engaged in mechanical industries who, after five years of war, have had to abandon their industriesbecause they could not maintain their plant?
– I do not, but in any case that does not touch the point. The
Treasurer says he desires to make a concession to certain taxpayers in respect of the maintenance and repair of plant. I am submitting that some taxpayers to whom this provision should apply will not be able to take advantage of it if they have first to make a cash deposit. I assert that the Treasurer could achieve the ends he has in mind without requiring the lodgment of a cash deposit. We all know that in some instances banking accounts have become inflated because taxpayers have not been able to expend amounts on repairs and maintenance which they would normally expend. The plain fact is that manpower and materials have not been available for the purpose. I therefore urge the Treasurer to waive the cash deposits.
– The right honorable member has exhausted his first period of fifteen minutes.
Thursday, 28 September 1944
– The concession contained in the the bill will undoubtedly be welcomed by primary producers, but I regard as unfair the provision requiring the lodgment of this money, free of. interest, with the Commissioner of Taxation. The Treasurer (Mr. Chifley) contended that if an allowance were made for depreciation and at some time in the future the money were not expended on depreciation, the allowance would have been improperly claimed. The Leader of the Australian Country party (Mr. Fadden) has effectively dealt with that argument. I remind the Treasurer that primary producers who will be obliged to lodge this money, will obtain it not from savings bank accounts or current accounts, but from overdrafts, on which they will pay interest at the rate of 43/4 per cent. They should not be compelled to do so.This money will be virtually a compulsory loan free of interest.
– There is nothing compulsory about it.
– It is compulsory if the primary producers desire to obtain the concession.
– This bill will substantially improve the present position and I welcome it. But the Treasurer is spoiling the ship for a hap’orth of tar. The money lodged with the Commissioner of Taxation will not be kept in the vaults, and the Treasurer will have the use of it, free of interest. I desire to improve the bill without making it unworkable. The war has not given to all primary producers inflated incomes. Some of them are only a little better off than they were before. The sheep man has not had much opportunity yet substantially to reduce his overdraft, and it is only in the last twelve months that the price of butter has been increased sufficiently to benefit the dairy-farmer. The Minister for Repatriation (Mr. Frost) will not contend that apple-growers in Tasmania have had much opportunity since the outbreak of war to improve their financial position.
– They are having a hard time, but they are endeavouring to keep things going.
– If a farmer is “ endeavouring to keep things going “, he will not be in a position to lodge with the Treasury money on which he is paying 43/4 per cent. interest.
– It is optional whether a primary producer lodges the money.
– If a primary producer does not lodge the money, he will not get the benefit of this concession. The Government must grant this relief to primary producers, and should do so with good grace and in such a manner that the recipient will have cause to be thankful, instead of feeling that he has not been so generously treated as the situation demanded.
– I can now understand why Commonwealth Treasurers are reluctant to introduce legislation granting tax concessions, because immediately they attempt to improve the position, there is an outcry that their efforts are inadequate. I inform members of the Australian Country party that this bill has the warm approval of their supporters.
– That may be so, but I am endeavouring further to improve the position.
– I have had conferences with the representatives of primaryproducing interests and chambers of commerce on this subject. The honorable member for Deakin (Mr. Hutchinson) claimed that they represented only the “ big “ man. I was under the impression that the honorable member represented the “ big “ man in this Parliament. The honorable member for Fawkner (Mr. Holt) pressed this matter in the House repeatedly, and at his request I received deputations that urged the granting of these concessions. The problem was examined, not by members of the “ brains trust “ in the Treasury, to whom the honorable member for Deakin referred, but by the experts of the interests who submitted these claims. This is the first time that I have heard the suggestion that the money should not be lodged with the Commissioner of Taxation. Primary producers are not compelled to lodge this money.
– If they do not lodge it, they will not get the concession.
– But there is no element of compulsion about it. If some of this money be not lodged, the primary producer will pay additional income tax. I cannot accept the contention of the Leader of the Australian Country party (Mr. Fadden) regarding the acceptance of a certificate. A primary producer could tender a certificate showing that he ought to have spent a certain amount on deferred maintenance and repairs. Later, when that money should be spent for that purpose or be subject to tax, it would not be available. My experience with this bill should be a lesson to Commonwealth Treasurers in the future not to spend their time investigating intricate and difficult problems of taxation in an endeavour to do justice to a section of the community, because they may be condemned bythe representatives of the interests who asked for that justice.
– Surely we are entitled to discuss the bill.
– It is generally agreed that the bill provides some benefit to primary producers.
– I was interested in the remark of the honorable member for Dalley (Mr. Rosevear), that over a period of five years the value of a business would be wiped out under this scheme.
– I did not refer to the primary producer.
– I do not know whether the honorable member suggested that an allowance of 20 per cent. was made to businesses, because primary producers do not receive such an allowance.
– On a reducing balance, 20 per cent. would not extinguish it in five years.
– Now the proposal of the Treasurer amounts to either a loan to the Government without interest or the payment of tax on an inflated income and really prompts the question. - “ When is a concession not a concession ? “ It is not a concession to 90 per cent. of the primary producers, in my electorate, who are paying an interest rate of 43/4 per cent. on their mortgages. They will not withdra w money from the bank to pay a deposit to the Treasurer, in order to get a tax concession which is rightly theirs. If the money were expended on the maintenance of their properties, they would get value for it and would preserve the security which they have to offer for an advance from the bank. A deposit with the Treasury will be a loan without interest, and will be made at the expense of the taxpayer, who cannot afford it. Many taxpayers will not be able to obtain an advance from the bank for this purpose.
– The Treasurer (Mr. Chifley) overlooked a specific request that I made. In the course of time, these deposits may aggregate millions of pounds, and will be available for use by the Treasury. The man who makes the deposit will pay the rate of interest on his overdraft. In view of the saving of interest on loan money which the Government will effect by having the use of this money, will the honorable gentleman consider the payment of the loan rate of interest?
. - I have every respect for the financial knowledge of the Treasurer (Mr. Chifley), but do not believe that he realizes the position in which the average primary producer in Australia is placed to-day. I have had a lot of experience of persons on properties of all sizes, and know that there are very few who to-day are not working on borrowed money. As the honorable members for Richmond (Mr. Anthony) and Maranoa (Mr. Adermann) have pointed out, those who make this deposit will have to borrow the money from the bank, and pay an interest rate of 43/4 per cent. on it. I have paid, at times, interest up to 8 per cent. If men have to borrow money for the purpose of making the deposit, why not allow the bank to certify it, and thus reduce the overdraft limit until the expenditure is incurred? A man who was in credit could deposit the money, because he would not have to pay interest on a loan. That is an equitable suggestion, which I ask the Treasurer to consider.
– I move -
That the proposed sub-section (8.) be left out with a view to insert in lieu thereof the following new sub-section : - “ (8.) In this section, ‘deferred maintenance ‘ means the maintenance of property, whether real or personal, in a normal state of repair or upkeep, including any improvement of the kind specified in section seventy-five or seventy-six of this act, where -
the need for the maintenance or the improvement first arose in the year of income and prior to the termination of the present war;
) the taxpayer was unable to undertake the maintenance or improvement by reason of circumstances attributable to the present war; and
the expenditure upon that maintenance or improvement would have been an allowable deduction under section fifty-one, fifty-three, seventyfive or seventy-six of this act if it had been actually incurred by the taxpayer.”.
The amendment uses appropriate language so as to include sections 75 and 76 with sections 51 and 53 in the words to be used to define the kinds of deductions or payments which come into account in the definition of “ deferred maintenance”. I stated quite fully my view on this matter in my secondreading speech. I then pointed out the effect on the primary producers of omitting any reference to sections 75 and 76. The amendment is designed to give effect to what I then said.
Clause, as amended, agreed to.
Clause 5 agreed to.
Clause 6 -
Section one hundred and sixty of the Principal Act is amended -
by omitting paragraph (d) of subsection (2.) and inserting in its stead the following paragraph: - “(d) the amount of any payments (other than payments in relation to which paragraph (da) of this subsection applies) made by the taxpayer in the year of income to any legally qualified , medical practitioner, dentist, nurse or chemist, or to any public or private hospital, in respect of any illness of or operation upon, or dental services or treatment rendered to, the taxpayer or his spouse, or any of his children under the age of twenty-one years, if the spouse or child is a resident: Provided that -
if the totalsum of all the payments made in relation to any such person, after deducting therefrom the amount (if any) required to be excluded by the last preceding sub-paragraph, exceeds Fifty pounds, the amount of the excess shall not be included for the purposes of this paragraph ; “ ;
– I move -
That sub-paragraph (ii), proposed paragraph (d), sub-section (2.), of section 160, be left out, with a view to insert in lieu thereof the following sub-paragraph: - “ (ii) if the total sum of all the payments made after deducting therefrom the amount (if any) required to be excluded by the last preceding subparagraph, exceeds One hundred and fifty pounds in the case of one, two, or three persons, or, where there are more than three persons, Fifty pounds in relation to each of such persons, the amount of the excess shall not be included for the purposes of this paragraph; “.
Stated briefly, the effect of the amendment, if carried, would be that the maximum amount allowable on account of medical expenses might be £150 for the whole of the members of a family, or might apply to only one member of a family. In most instances, the greater part of hospitalization expenses in a year relates to one member of a family. Frequently, more than one member of a family may incur hospital and medical expenses in excess of £50. But if one member of a family incurred an expenditure of £100 or £150, that amount would be allowable as a deduction under the amendment. There should be some improvement of the position in relation to medical expenses. It is becoming more difficult for those who have sickness in the family to meet the obligations which constant medical attention imposes on them. The law has been reviewed because the high taxation demanded by war-time requirements has left a dwindling income with the taxpayer. Iam sorry that the Treasurer (Mr. Chifley) has declared his intention not to accept any amendments. Legislation of this character should profit from proposals by honorable members on both sides which are not necessarily partisan but are designed to improve it. The Parliament is reduced to a farce, and the Treasurer might as well enact these provisions by regulations under the National Security Act, if he is not prepared to listen to the arguments that are put forward. I have submitted the amendment in good faith. It should be welcomed by honorable members on the Government side as well as by the Opposition and the public at large. The grant of the additional concession is well within the capacity of the Government. While this matter is under review we should consider what is the fair thing to do for the taxpayer who is so unfortunate as to incur heavy hospital and dental expenses. When it is the taxpayer himself who has been ill, his income perhaps ceases altogether during the period of his illness. Heavy bills have to be paid to specialists and for hospital treatment. In the following year, perhaps, another member of the family will fall sick, yet only £50 deduction will be allowed. I suggest that the actual amount of the cost incurred, up to £150, should be allowed. Since the outbreak of war, the amount of income left to the taxpayer after tax has been paid has been so greatly reduced that concessions are particularly necessary to the middle-class taxpayer if he is to remain in the field at all. The present tendency is to extinguish this class of taxpayer, and that is an undesirable thing. The effect of the ever-increasing rates of taxation upon middle-class taxpayers is clearly indicated by the following table: -
I have no great expectation that anything will be done at this time, but I raise the matter now in order to focus attention on it. Perhaps, when the next amending bill is being prepared, the Treasurer will give my proposals some consideration.
– Some of the remarks of the honorable member for Richmond (Mr. Anthony) carry the implication that, because the Government has a majority, it is not prepared to listen to suggestions from the other side.
– It has not listened to any so far.
– The fact is that before an amending bill is presented to the House its provisions are very carefully examined by the Government in order to discover all the implications of the proposed amendment. Even then, it is sometimes found that an amendment produces effects which were not foreseen. I am prepared to listen to any reasonable suggestion put up, not with a view to incorporating amendments in the bill before the committee, but for future consideration. I have said ever since I have been Treasurer that I will not accept amendments to taxation bills while they are before Parliament.
– I draw the attention of the
Treasurer (Mr. Chifley.) to what I regard as a defect in this clause. It excludes expenses incurred for diathermy and massage, even when such treatment is ordered by a medical practitioner. When the Queensland Government collected income tax the State act allowed such expenses. I ask the Treasurer to look into this matter to see whether, as an administrative act, the concession could not be extended to include expenses incurred for diathermy and massage when ordered by a qualified medical practitioner.
.I agree with what was said by the honorable member for Richmond (Mr. Anthony) and the Leader of the Opposition (Mr. Menzies) on the subject of rebates for medical expenses. I could never understand why the amount was limited to £50, and I cannot understand why it is now limited to £50 for each member of the family. I should like to see the limit abolished altogether. No one would deliberately set out to evade taxation by flinging out money to the medical profession. It is just not done.
– There could be abuse in regard to hospital treatment.
– That is true, but it does not. apply to medical expenses. In the bill, dental expenses are limited to £10 for each person, and I should like to know why. Sometimes dentists charge less than £10, and sometimes they charge a good deal more. Why should .there be discrimination between dental and other medical expenses? It is provided that a concession is allowable in respect of payments to any legally qualified medical practitioner, nurse or chemist, but only in respect of the dentist has a limit of £10 been fixed.
– There is an overall limit in the case of doctors.
– Yes, but only in the case of the dentist is there a specific limit. Why is that?
– It was thought that there might be abuse through the buying of very expensive sets of teeth. ^ Mr. GUY (Wilmot) [12.43 a.m.].- I draw the attention of the Treasurer (Mr. Chifley) to an anomaly which reacts harshly on one section of the community. The law provides a concessional rebate in respect of housekeepers to taxpayers who are widows or widowers with children under sixteen years of age.. If this concession is justified in their case, it is equally justified in the case of divorced people, who must engage housekeepers to look after their children and their homes. I have made previous representations on this subject to the Treasurer, and, in June last, I received from him the following letter: -
Since writing you on 30th May, 1944, 1 have discussed with the Commissioner of Taxation the question of concessional rebate in respect of housekeepers employed by taxpayers who have been divorced.
The question of concessionable allowances, particularly in relation to housekeepers, has received the serious consideration of the Government from time to time, and the amendment of the income tax law in 1943 to extend the housekeeper concession to taxpayers who are widows or widowers and have children under sixteen (16) years of age, was as far as the Government was prepared to go, keeping in mind the cumulative effect of the concessions generally on revenue.
You will appreciate that if the law were amended to grant the concession in cases where the taxpayer had divorced his wife, it would be difficult to refuse the claim of an unmarried taxpayer who found it necessary to employ his sister as a housekeeper. Furthermore, an unmarried taxpayer would then feel justified in pressing for a concession where he employed his mother as a housekeeper, and did not receive the usual concessional allowance because she received a small amount of income.
I claim that the unmarried taxpayer should, receive this concession when he is obliged to employ his sister or his mother. I know of several divorced persons with four or five children to maintain, and they are obliged to employ a housekeeper to look after them; yet they receive no concession. Consideration should be given to men who employ their mothers or sisters to take care of their children.
– I appreciate the first suggestion made by -the honorable gentleman as being worthy of consideration. Female relatives caring for dependent children come into the field under existing legislation.
– I am glad 0f that.
– The case mentioned by the honorable member for Richmond (Mr. Anthony) has merit, but I still prefer the proposal of the Leader of the Opposition (Mr. Menzies) that all medical expenses should be deductible from income. It is true, as stated by the honorable member for Richmond, that the hardest hit by medical expenses are people in the middle income groups, because the basic wage worker can receive the best of medical attention free of cost at public hospitals, and wealthy people can secure equally good medical attention at their own homes or in private hospitals and do not feel the cost, whereas the middle-class breadwinners are expected by the com- munity, and themselves expect, to pay for their medical care. Especially in these days, medical expenses are a severe burden to men in the middle brackets of income. Surely health is production, and production is income, and income is revenue. Therefore, if the Treasurer (Mr. Chifley) granted the concession asked by the Leader of the Opposi- t ion, there would be little, if any, loss of revenue. A few more people employed in the tobacco manufacturing industry would mean that more tobacco would be sold and more revenue would accrue to the Treasury. That would wipe out any loss which might arise from allowing as deductions all outgoings on medical attention. If the Treasurer would open his heart wide and grant this concession he would do a real public service.
Clause agreed to.
Clauses 7 to 12 agreed to.
New clause 3a.
– I move -
That, after clause 3, the following new clause be inserted: - “ 3a Section thirty-six of the Principal Act is amended by omitting sub-section (2.) and inserting in its stead the following subsection : - (2.) Where a taxpayer, after the beginning of the year of income ending on the thirtieth day of June, One thousand nine hundred and forty-five, in consequence of the acquisition or resumption (under the provisions of any Act or State Act which contains provisions for the compulsory acquisition or resumption of land) of any land sells any live-stock, one-fifth of the amount (if any) by which the proceeds of the sale -
in respect of live-stock which was on hand at the beginning of that year - exceeds the value of that stock at the beginning of that year; and
in respect of live-stock acquired during that year - exceeds the price of that stock, shall be included in his assessable income of that year and in the assessable income of each of the next four succeeding years of income ‘ “.
This proposed new clause is designed to spread over a period of five years the sum of money which I referred to in my second-reading speech as involuntary income brought about by the forced resumption of land. I fully stated then the arguments in favour of the proposed new clause and I see no reason to take up the time of the committee by repetition.
– I hope that the Treasurer (Mr. Chifley) will agree to the insertion of the new clause proposed by the Leader of the Opposition (Mr. Menzies), because it would remove an injustice. I resent the suggestion by the Treasurer that this is not the time in which to propose improvements of the income tax law, and that approach should be made before the bill is brought down. This is a deliberative assembly in which the views expressed by honorable members should be considered by the Treasurer.
– I am not prepared to accept the amendment, but I do realize that the time may come when the law will have to be amended in the direction sought. That will occur when there are large-scale resumptions of land. Meanwhile, a great deal can be done administratively to meet the right honorable gentleman’s point.
New clause negatived.
– I did propose to move for the insertion of a new clause, but the Treasurer (Mr. Chifley) has issued an edict that new clauses or amendments shall not be accepted. The Treasurer has a copy of the proposed new clause. It refers to taxation of travelling allowances paid to departmental officers stationed in the Northern Territory. Will the Treasurer be good enough to consider that matter?
. There are many kinds of allowances and to deal with one without’ examining the others would be unwise. The matter will be considered.
Title agreed to.
Bill reported with an amendment; report - by leave - adopted.
Bill - by leave - read a third time.
Debate resumed from the 7th September (vide page 581), on motion by Mr. Chifley -
That the bill be now read a second time.
– I commend the Government for the imagination it has shown in deciding to exempt building materials from sales tax. The time has come when there should be a complete review of the materials on which sales tax is levied, because we are rapidly approaching the stage at which industry should be enabled to prepare for post,war development. In his second-reading speech the Treasurer said -
Honorable members are aware that the demand for housing throughout the Commonwealth is unprecedented. The nation’s resources in money, material, and man-power have had to be diverted to war purposes, and the resultant restrictions upon the building of homes have created a most serious shortage of housing. The Government fully recognizes the necessity for taking the strongest action to remedy the position as soon as the exigencies of war will .permit. Home building, therefore, ranks very highly in the programme of work to be undertaken in the post-war period.
That was an interesting observation. At the moment, of course, the Government is only making a gesture, for the Treasurer is well aware that although sales tax is being lifted on materials for home-building, restrictions on building operations remain. The concessions being granted under this heading will involve the Treasury in an immediate loss of only about £500,000. If homebuilding were proceeding on the 1940 scale, and sales tax at the rate of 12£ per cent, were imposed on all building materials, the amount of tax involved would be £3,708,000. If a really substan tial home-building scheme be put into operation immediately after the war, the exemptions now being provided will cost, the Treasury even more than that huge amount. I regard the present measure as merely an indication of the Government’s earnest desire to encourage people to build homes. I hope that when our men return from the war they will be given every assistance to purchase or build homes for themselves and settle down, for men of their type should be raising families in this country. I remember reading some little time ago a statement attributed to the Minister for Supply and Shipping (Mr. Beasley) to the effect that £30,000,000 would be made available for a comprehensive housing scheme.
– That is a familiar figure!
– It is. During the referendum campaign it was said by advocates of a “ Yes “ vote that if the constitution alteration proposals were defeated the Government would not be able to proceed with its home-building programme, yet the Minister for Supply and Shipping has told us that £30,000,000 would be made available for the purpose. Apparently it is a case of new times, new measures. I do not criticize the restriction on home-building during the last year or two because we are well aware that all constructional materials at our disposal were required for war work. Unfortunately, however, preferences have been given, on occasions, to certain sections of the community. I could read to honorable members some particulars I have concerning the building operations conducted during the last twelve months by the Bathurst Mechanical Coursing Club.
– Order ! The honorable member may not discuss that subject.
– I was endeavouring to prove, sir, that the restrictions on building operations have not been applied uniformly and that preferences have been given to certain interests. Quite recently the Prime Minister (Mr. Curtin) said that the war had moved on and that the need for certain major projects had diminished.
– Did the honorable member hear the Prime Minister’s remarks on Monday night when he was speaking about the new Victory Loan?
– The point I am making is that, as the need for certain major projects has diminished, we may expect the release of home-building materials at an accelerated rate. The Government is saying, in effect, “ “We are removing sales tax from these materials in order to encourage you to build homes “. I look forward to the time when the restrictions on home-building operations will be eased. I hope also that it will not be long before man-power will be available for this important work. Last Thursday the Minister for War Organization and Industry (Mr. Dedman) told us that until additional man-power was released, restrictions on home-building would have to continue. I parallel that remark with the statement of the Prime Minister that the war has moved on.
– The honorable member will find it difficult to parallel cither of those remarks with the Standing Orders which apply to this debate, but he must do so if he intends to proceed in this strain.
– All I will say, Mr. Speaker, is that honorable members of the Opposition frequently find it difficult to reconcile the remarks of one Minister with those of another. But, in view of the possibility of the demobilization at a not distant date, of the men of the fighting services and also of men employed by such governmental enterprises as the Allied Works Council, it is desirable that steps shall be taken to plan for a comprehensive housing scheme. A great deal more will have to be done than has been attempted up to the present if we are to be ready to undertake this workpromptly. In this connexion I have received a letter from the Association of Co-operative Building Societies, which contains the following paragraph: -
The Board of the Association is purturbed at the failure of the Commonwealth Government to abolish the sales tax on all homebuilding materials. It is conceded that partial relief has been given but a burden of approximately £40 on a cottage costing £800 is still inflicted through the medium of building materials which remain subject to the tax.
As the Government has gone so far in lifting sales tax from building materials, I hope that it will soon go the whole way. I hope, too, that the Minister for War Organization of Industry will lift the restrictions on home-building as early as possible. It is desirable also, that persons who are given permits to build homes shall be issued with a B priority in order that they may obtain the necessary timber and hardware. As soon as practicable, all types of builders’ hardware should be exempt from sales tax.
I am glad that provision is being made for the exemption of equipment for technical schools other than Governmentsubsidized institutions. We should encourage, to the maximum degree, the training of our young people in skilled arts and crafts. If technical schools are enabled to obtain equipment without having to meet the burden of sales tax on their purchases, training in skilled trades will be facilitated. The exemption being granted in respect of materials required for irrigation and water conservation schemes and drainage and sewerage works are commendable. This will be of considerable assistance to primary producers. The Government has acted wisely in including the whole of these goods within the exemption. I hope that what is being done in this measure may be taken as the forerunner of similar action in respect of many other articles urgently needed in secondary industries, which must be geared up to meet postwar requirements. There are a few matters that the Treasurer should keep in mind. I realize that if an honorable member is given a free rein on a subject of this nature, he can make numerous suggestions to the Treasurer, and his remarks will be supplemented by other honorable members. But the desirability of exempting from sales tax books for students will have general approval.
– Order! That matter is outside the scope of the bill.
– I was mentioning something to which the Treasurer should give consideration.
– I can imagine a number of things to which the Treasurer should give consideration, but they are outside the scope of the bill.
– I assume that it is competent for an honorable member to suggest other materials and commodities that should be exempt from sales tax.
– On another occasion.
.Honorable members have listened to an extraordinary speech by the Deputy Leader of the Opposition (Mr. Harrison). The purpose of ths bill is to exempt from sales tax certain classifications of building materials, but the honorable member suggested that the time has arrived when building materials generally should be released for the erection of homes. Any honorable member who, knowing Australia’s war commitments, makes such a suggestion, is not a realist. Those of us who heard the speeches of the Prime Minister (Mr. Curtin) and General Sir Thomas Blarney in support of the Liberty Loan this week, realize that we must not relax our efforts in this conflict. I would be very happy if that stage had been reached.
– Is the honorable member opposing the bill?
– I am supporting the bill with a great deal of enthusiasm because it does offer some relief to those who desire to build homes. On examination, I find that the Government has granted considerable relief from sales tax. Honorable members could talk at great length about the advisability of increasing the list of exemptions, but the bill is a substantial and satisfactory instalment. Of course, anything this Government does will not satisfy honorable members opposite. I am as anxious as any one for building materials to be made available, and no one has made stronger representations to the Minister for “War Organization of Industry (Mr. Dedman)
On this subject than I have. But I am a realist, and I face facts. The Deputy Leader of the Opposition either did not appreciate the difficulties of the situation, or preferred to ignore them. As General Sir Thomas Blarney said last night, difficulties still confront Australia at this stage of the war with Japan. That the honorable member for Wentworth was sincere when he suggested that building materials generally should be released at this juncture is unbelievable.
– I welcome this measure not only because of the intrinsic relief represented by it, but also because it indicates that we have reached the stage when we are able to contemplate a reduction of the very heavy rates of tax under which the citizens of Australia have been suffering for so long. It rather cheers the tax-ridden people who have been led to believe, by doleful stories such as that told by the honorable member for Bass (Mr. Barnard), that there was no prospect whatever of any immediate relief. I hope that the doleful story regarding the inability to secure any substantial release of materials, which was implicit in his speech, will be equally disproved by other actions on the part of the Government.
The Government has shown good judgment in selecting as one of its first steps towards reducing taxation the removal of sales tax from an important category of building materials. I suppose that the Minister for Repatriation (Mr. Frost) had this matter in mind when he told the House earlier this week that as soon as the building of homes by contract superseded building by day labour-
– That is a misstatement.
– The cost of construction would be reduced by about 30 per cent.
– I did not say that.
– Order ! Building by contract or day labour has nothing to do with this bill.
– I am dealing with the cost of homes in the future compared with the present cost, and I thought that I was rather flattering the Minister-
– The honorable member was not.
– Order ! The honorable member may deal with the effect of sales tax upon materials for the erection of homes but not with the building of homes by day labour or contract.
– It is very wise that this arrangement for the removal of sales tax from some of the more important building materials should coincide with the provision of a substantial sum of money for recommencing the erection of war service homes. It would have been just too bad if men being discharged from the services as the result of disabilities sustained on active service, were given homes the cost of which had been inflated by this sales tax, whilst men who will be released in future will secure homes free from that burden. That causes me to inquire about the situation of ‘persons who very recently purchased homes that were built with Commonwealth money and presumably carry the burden of sales tax on the building materials. Although some of those people will be very disappointed, I do not know what the Government can do about it. Some attention should be given to the matter. I hope that this reduction of sales tax presages a general (eduction of the tax, not only on other building materials but also on food.
.I commend the Government for introducing this measure, which will confer very substantial relief on intending home-builders. The average workingclass home costs £800 or £900, and the value of these concessions is estimated at between £40 and £50. Thus, this bill affords a substantial measure of relief to most home-builders, although the number will necessarily be limited at the present time. As the Treasurer (Mr. Chifley) indicated, the total value of the concessions proposed in this bill will be approximately £500,000. When the sales tax was introduced during the depression, the Treasurer of the day explained that the measure was only temporary, and it is still so regarded. I hope that other articles for home building will be exempted from sales tax in due course, and that only luxury or non-essential commodities will continue to be subject to the impost. However, some items required in the home, such as stoves and other fixtures, are not exempt. When the opportunity again occurs, the Treasurer should favorably review them. In fact, the honorable gentleman should exempt from this tax all essential household equipment and utensils. Young people who propose to set up house, find that every £1 counts. Even engagement rings and wedding rings-
– Order ! This bill contains no reference to wedding rings and engagement rings.
– We must take first things first. Before young people can set up house, they are brought together with the engagement and wedding ring. We should facilitate their getting a home on the best possible terms. Housing 13 vitally necessary for an increased- population, and affords the best possible method of changing over from war production to peace-time production. Hundreds of trades are associated with the building industry, and, according to estimates, 600 persons are connected directly or indirectly with the construction of one home. Housing is the key to prosperity. If the building industry is flourishing the community is prosperous. The British Government has indicated that priority will be given to housing requirements when releases are being made from the fighting services as soon as Germany has been defeated. I trust that those lines will be followed in Australia, in order that the position may be stabilized in some degree, and that sales tax and other impediments to building construction will be removed.
– I am pleased that the bill provides for the exemption of irrigation, water supply, drainage, and sewerage materials. If scoops and delvers for water equipment are not exempt under any other heading, they should be included under the heading “Primary production “, because their exemption is essential.
– They are exempt.
Question resolved in the affirmative.
Bill read a second time.
Clauses 1 and 2 agreed to.
Clause 3 (Amendments of First Schedule).
– I move -
That there be added to sub-items (2) and (3) of item 83 of proposed Division XII., Building Materials, the following words: - “ , hut not including linoleum, rubber, cork or other similar floor coverings “.
This amendment is necessitated by an oversight which occurred in the preparation of the bill. ‘Sub-items 2 and 3 of the restored exemption item 83 authorized exemption from sales tax of board, sheets, and linings, made of metal, wood, wood-pulp, asbestos, or fibro-cement, or bituminous or other compositions of a kind used exclusively or principally in the construction and repair of buildings so as to form a part thereof, and any other board, sheets, and linings which are to be used in the construction or repair of buildings so as to form a part thereof. The terms used in the bill are those in which the particular exemptions were expressed in the law immediately prior to the withdrawal of the exemption on the 22nd November, 1940. When the exemption was withdrawn, these goods were transferred to the second schedule to the Sales Tax Exemptions and Classifications Act, thus becoming subject to tax at the preferential rate of 5 per cent. At that time, the sub-items in question were amended so as to remove an anomaly that had been revealed in the administration of the former exemption. It had been found that the law unexpectedly caused exemption to be allowable in respect of rubber-sheeting that was used in the construction of buildings so as to form the flooring thereof, whilst tax was payable in respect of similar rubber-sheeting, linoleum or cork that was used as a floorcovering in the ordinary way. In order to remove this anomaly, and to obviate administrative difficulties, it was provided in the second schedule that the sub-items should not include “linoleum, rubber, cork or other similar floorcoverings “. By inadvertence, this alteration of the terms of the sub-items was overlooked in the drafting of the bill. The amendment thatI have moved will rectify that defect.
Amendment agreed to.
Clause, as amended, agreed to.
Title agreed to.
Bill reported with an amendment; report - by leave - adopted.
Bill - by leave - read a third time.
Debate resumed from the 8th September (vide page 648), on motion by Mr. Chifley -
That the bill be now read a second time.
– It would appear that this measure is consequential on the Income Tax Assessment Bill, which provides that the estimated cost of deferred maintenance shall be an allowable deduction. The sum deposited, equal to the amount of the deduction, is to be repaid to the taxpayer, on demand, at any time after the expiration of six months from the date of the deposit, and not later than two years after the termination of the war. The Treasurer (Mr. Chifley) has pointed out that the allowance of the amount deposited will automatically apply in the assessment of the war-time company tax. The honorable gentleman has rightly drawn attention to the fact that the lack of parts, materials and manpower has prevented the customary expenditure on maintenance from being made. The House must be aware of this deficiency in industry generally. Unless it be rectified in the post-war period, a great deal of machinery will not run efficiently or produce at full capacity. The lack of expenditure on maintenance of plant has resulted in the inflation of the capital employed. The object of the bill is to prevent a double benefit from being conferred upon a company which haslodged a deposit with the Commissioner. Because of the absence of provisions to the contrary, such a deposit will be taken into account as a part of the capital employed, even though the estimated deferred maintenance has been allowed as a deduction. To that end, the deduction in respect of deferred maintenance is to be excluded from the capital that is considered when assessing the war-time company tax, and when the deposit has been repaid it will be included in the capital employed, thus offsetting the deduction that has been made. We have no objection to that in principle, because it deals with the matter in a fair way. No double benefit should accrue from any action which may be contemplated by the Government in giving effect to the deferred maintenance scheme. Deferred maintenance meets a demand that has been expressed for some time by private enterprise. It has been pointed out that most of the plant that is used for the production of. consumer goods is in shocking disrepair. There is a considerable shortage of parts, and this hasaffected machinery, which has lain idle on account of the lack of man-power to keep it moving. I suppose that the demand on man-power has reduced by from 60 per cent. to 70 per cent., in some instances, the production of plant which employed 1,000 girls on consumer supplies. The idle plant has been seriously depleted of, parts, because it has not been possible to purchase or obtain from reserve stock parts for the machinery that is in use. Without provision to place it in order, the plant will become junk.
This is really a form of deferred credit, and the object is to achieve reasonable efficiency in production in the post-war period, in order that industry may be rehabilitated. But it does not go far enough. The Government should consider not only a scheme of deferred maintenance, but also a system of rebates to give relief to private enterprise in the purchase of new plant which would enable business to be recovered. That is only one of the many problems that confront private enterprise to-day. Provision will have to be made for the purchase of new plant, and if. the Government intends that industry shall be placed on a completely economic and efficient basis it must consider the allowance of rebates in that connexion.
But why should we institute a system of deferred credits in respect of machinery, yet take no cognizance of the human machine? The Government appears to be concerned with industrial rehabilitation. We have asked repeatedly for the establishment of post-war credits. We claim that the human machine is subject to stresses and strains, and ought to be given some opportunity to establish postwar credits which might be used when the war is over. The Government has taken one step in this direction, by the establishment of deferred maintenance, which is really a post-war credits scheme in relation to machinery. It should extend the principle further, and adopt the post-war credits scheme propounded by the Leader of the Australian Country party (Mr. Fadden). It is gradually and hesitatingly walking along that road. This is a step in the right direction, and I commend the Treasurer for his courage in having taken it. Deferred maintenance in respect of machinery is not enough.
There must also be deferred credit with regard to the human machine. The Opposition will not oppose this bill, because we recognize that it is consequent upon a measure that was passed earlier.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
Debate resumed from the 8th September (vide page 649), on motion by Mr. Chifley -
That the bill be now read a second time.
– As was pointed out by the Treasurer (Mr. Chifley) inhis second-reading speech, this bill merely provides that State officers transferred to the Commonwealth when the uniform taxation legislation was passed shall have preserved to them certain rights. It provides that temporary officers shall not lose the right to contribute to the State Superannuation Fund, and that officers permanently transferred shall have secured to them their long-service and retirement leave payments at the rate provided under State law. The Opposition does not object to the measure.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
In Committee of Ways and Means:
Consideration resumed from the 7th Sep tember (vide page 585), on motion by Mr. Chifley -
That a tax be imposed upon incomes . . . (vide page 581 ) .
Question resolved in the affirmative.
Standing Orders suspended; resolution adopted.
That Mr. Chifley and Mr. Lazzarini do prepare and bring ina bill to carry out the foregoing resolution.
Bill presented by Mr. Chifley, and passed through all stages without amendment or debate.
Message recommending appropriation reported.
In committee: (Consideration of Administrator’s message).
Motion (by Mr. Lazzarini) agreed to -
That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund sums for the purposes of financial assistance to the States of South Australia, Western Australia and Tasmania.
Standing Orders suspended; resolution adopted.
That Mr. Lazzarini and Mr. Chifley do prepare and bring in a bill to carry out the foregoing resolution.
Bill presented by Mr. Lazzarini, and read a first time.
– I move -
That thebill be now read a second time:
The purpose of this bill is to implement the recommendations contained in the eleventh report of the Commonwealth Grants Commission that special grants, totalling £2,846,000, be paid to the States of South Australia, Western Australia, and Tasmania during the current financial year. The grants recommended for payment this year compare with those paid lastyear as follows: -
Since the budget estimates of the States would provide an unreliable basis upon which to determine special grants, the commission bases its assessments on the actual budget results obtained by the States in the latest year for which complete information is available. Thus, the assessments for the current year 1944-45 are based on the States’ budget results for 1942-43.
The commission recognizes, however, that the financial needs of the claimant States in the year in which the grants are payable may be different from those of the year upon which the grants are based, owing to an improvement or deterioration in their budgets in the interim. To meet this position, the commission may recommend either that payment of a part of the assessed grant be deferred or that an advance payment be made which will be adjusted when determining the grant for a later year. As an advance payment is a payment over and above the payment indicated for a claimant State according to certain common standards of budget operation selected by the commission as reasonable, it is necessary to make an adjustment for it in a later year in order to preserve relativity in the grants assessed from year to year, and to ensure equity as between the claimant States in the grants they receive.
Thus, in addition to the assessed grants, amounting to £408,000 for South Australia, £629,000 for Western Australia and £677,000 for Tasmania, the figures of payments I have set out above include an advance payment of £542,000 to South Australia which will be deducted from the grant for a later year, whilst payment of £225,000 of the grant assessed for Western Australia has been deferred until next year. On the other hand, the payments to be made this year include amounts of £250,000, £500,000, and £65,000, the payment of which to South Australia, Western Australia, and Tasmania respectively had been deferred last year.
As in past years, the commission considers that the principle justifying a special grant should be the financial needs of a State, and that a special grant should be such as to enable a claimant State to achieve a reasonable standard of budget stability. Until three years ago, the commission derived this standard by averaging the budget surpluses or deficits of the non-claimant States. Since 1940-41, however, the non-claimant States have enjoyed budget surpluses mainly as a result of Commonwealth war expenditure. In the circumstances the commission has adopted a balanced budget standard in the last three years on the grounds that a surplus budget standard could have resulted in the claimant States enjoying surpluses at Commonwealth expense. The Government endorses the commission’s attitude in this matter.
In assessing the special grants for the current year on the financial results of the States for the year 1942-43, the commission has made some modifications in its usual methods of calculation, the most important of which relates to the commission’s comparison of the relative severity of taxation of the claimant States with that of the non-claimant States. In 1942-43 the States had ceased levying income taxation, and the commission’s calculation of the relative severity of taxation imposed by the claimant States is therefore now confined to those taxes remaining under State control. Prior to the introduction of uniform federal income taxation, the commission’s investigations showed that the claimant States were levying more severe taxation, particularly income taxation, than the nonclaimant, or standard, States. The commission therefore included in the special grants for the claimant States a favorable adjustment for their relatively high severity of taxation, in order that the revenues received from the greater effort they were making in this way should not operate to reduce their special grants below the size they would otherwise be. With the introduction of uniform income taxation, however, the citizens of the claimant States pay the same income taxation as the citizens of the other States. As a result, there was this yeal a considerable reduction in the adjustment for the claimant .States on account of the relative severity of their taxation. The reduction in this adjustment, however, does not imply that the financial needs of the claimant States are no longer adequately met, since the Grants Commission has based its assessments on the amount required to give each claimant State a balanced budget provided their revenues and expenditures are maintained at satisfactory levels.
I shall now refer briefly to the grants recommended for payment this year to each State. The grant for South Australia was assessed this year at £408,000, as compared with £480,000 last year. After considering South Australia’s probable requirements for the current year, the commission decided that, in addition to the payment of £250,000 deferred from last year, an advance payment of £542,000 should be made this year. An advance payment was recommended, because the evidence indicated that South Australia’s finances will suffer a considerable retrogression during the current year owing mainly to an expected fall in railway revenues accompanied by unavoidable increases in costs. The total grant recommended for payment to South Australia this year is, therefore, £1,200,000.
For Western Australia, the grant assessed for the present year is £629,000, a? compared with £1,180,000 last year. After including the payment of £500,000 deferred from last year, the commission considers that the total grant of £1,129,000 may not be required to meet the revenue needs of Western Australia during the current year. Accordingly, the commission recommends that payment of £225,000 of this grant be deferred until next year. The grant finally recommended for Western Australia is, therefore, £904,000.
The grant assessed for Tasmania by the commission for this year is £677,000, compared with £785,000 last year. Adding the payment of £65,000 which was deferred from last year, the total grant payable to Tasmania in the current year is £742,000.
In arriving at the grants which it has recommended for the current year, the Grants Commission has adhered to the same general principles which have been found satisfactory in previous years. The commission, however, has found it necessary to modify some of its calculations to take account of the effects of uniform income taxation and other changes. The Government has considered the commission’s report, and has decided to recommend the adoption of the grants proposed by the commission to meet the financial needs of South Australia, Western Australia, and Tasmania during the present financial year.
.- The Opposition heartily supports this bill. Having said that, I intend to express my own opinions as member for Wilmot. I realize the utter futility of seeking to have the grants recommended by the Commonwealth Grants Commission altered. The docile majority of the Government gives us no encouragement to hope for that. Consequently, no good purpose would be served by delaying the passage of this bill. I feel obliged, however, to say, that the claimant States made claims generally to enable them to balance their budgets, which is a very difficult thing for them to do owing to the disabilities they suffer under federation. At the same time, the claim was made by them in order that their citizens might be placed on the same footing as that of other Australians, and in order that all Australians might have the same amenities of life, regardless of the part of the Commonwealth in which they live. An Australian citizen should not be at a disadvantage simply because he lives in a “ small “ State. Tasmania claimed £1,385,000 .this year as being necessary to allow it to enjoy similar prosperity to that enjoyed by the standard States. The Commonwealth Grants Commission answered its claim by recommending the grant of £742,000. The lengthy report of the commission was tabled only a few hours ago and honorable members have had little time in which to give it the study which it deserves. Grave injustice will be done to Tasmania if the Commission has altered, as it appears to have done, the method of fixing the amount of the grants. For years before the war, the commission reduced the amounts claimed by the States by the average per capita deficits of the larger States. Now, because of the war expenditure, the standard States have surpluses. Tasmania has had very little extra income as the result of the war. The surplus enjoyed by New South Wales in 1942-43 was £1,115,000. In the same year Victoria had a surplus of £754,000 and Queensland £102,000. In addition, New South Wales set aside £4,000,000 as a special reserve for deferred maintenance and renewals. Victoria set aside £2,200,000 and Queensland £1,250,000 for the same purpose. Queensland also set aside £4,000,000 for post-war reconstruction and development. I have no objection to that; it is good finance, and those States are fully justified; but the “ small “ States should not be called upon to suffer simply because of the buoyant revenues enjoyed by the other States. In 1942-43, Tasmania had a deficit of £109,000 and it was unable to make any provision for reserves for deferred maintenance and renewals and for post-war reconstruction. The Minister in charge of the bill (Mr. Lazzarini) himself pointed out in his second-reading speech that the Commonwealth Grants Commission had disregarded the surpluses enjoyed by the standard States and had assumed that they merely had balanced their budgets. Yet, when those States had deficits, those deficits were taken into consideration to the detriment of the claimant States. The claimant States have suffered in that the reverse has not applied with benefit to them. That is a new idea of justice. Tasmania is willing that the increased grant to which it claims to be entitled should be withheld until after the war so that it shall then be in a position, like the other States, to meet post-war problems. What could be fairer than that? I hope that the Treasurer (Mr. Chifley) will give further consideration to- this matter in order .that Tasmania may not suffer an injustice.
.I regret that the report of the Commonwealth Grants Commission was not available to honorable members until to-day. Had it been wc would have had the opportunity to analyse the premises upon which the commission has based its recommendations. I compliment the commission on the very fine way in which it has presented its report. Whatever we may say about its recommendations, we must all agree that year after year it has documented its recommendations in a very fine manner. This bill provides for grants to South Australia, Western Australia and Tasmania. I have read the report, and to some degree I associate myself with the comments made by the honorable member for Wilmot (Mr. Guy), but I do not think the situation is so dismal as he alleged. The honorable member referred to the docile majority of the Government, but I remind him that for years he waa the supporter of a government which embodied in legislation the recommendations of the Commonwealth Grants Commission in exactly the same way as this Government has done. The honorable member cannot have it both ways. I am prepared to accept the recommendations to which this bill proposes to give effect. Whether I agree with the premises on which the report is based is another matter. I wish to refer to some aspects mentioned in the report. Undeniably, an improvement has occurred in Tasmania’s position, although, relatively, it has not been as great as the improvement in the mainland States, for Tasmania has suffered through not having enjoyed the benefits of an increase of revenue from war-time rail traffic. In paragraph 46 of its report the commission states -
The structure of the Tasmanian economy is an adaptation of the local resources of the State. Climatic conditions provide a favorable environment for certain forms of agricultural production, such as potatoes and apples, and for pastoral development in the production of wool and fat lambs. The State also possesses a variety of minerals, the most important being copper, lead-zinc, wolfram and tin. Secondary industries, particularly those associated with metal, timber, wool and food production, have developed from the primary industries, and have been -greatly assisted by the utilization of the hydro-electric resources of the State. The supply of cheap electrical energy has been especially important in establishing electrolytic and chemical industries, in which power constitutes a heavy item of cost. The importance of the Hydro-Electric Commission to the industrial progress of the 8tate is shown by the fact that the commission is supplying as much power for industrial purposes as the Sydney County Council.
The1 statement that Tasmania’s hydroelectric enterprises are delivering as much electric power for industrial purposes as does the Sydney City Council is significant. In regard to manufacturing the commission reported -
The establishment of new industries and the extension of others should do much to remove the causes of Tasmania’s continued loss of population by migration. This movement, which has occasioned the State concern for a number’ of years, was largely arrested during 1942-43, although this was in part due to the control exercised by the man-power authorities of the State. The recent growth In manufacturing compares favorably with the advances made in other States.
In view of that statement, I consider that I am entitled to join issue with the honorable member for Wilmot (Mr.
Guy). A substantial improvement has occurred in Tasmania’s industrial undertakings. Figures quoted by the commission indicate that whereas the value of plant and machinery in Tasmania’s manufacturing industries in 193-6-37 was £4,750,000, and the net value of its factory production was £4,816,000, the corresponding figures for 1942-43 were £3,133,000 and £8,075,000. Those figures indicate substantial development The report also states -
While direct Commonwealth expenditure on munitions and defence works has been on a limited scale, secondary industry has been assisted greatly by .the firm market provided by war needs for the principal manufactures of the State. A notable example is the foodcanning industry, which, despite loss of export markets, has been considerably extended to meet defence demands. However, some industries (notably cement, for which markets had been developed in other States) have been adversely affected by shipping difficulties. The uncertainty of shipping has made the regular import of raw materials and supplies difficult, and has resulted in a severe decline in tourist traffic, which was an important source of Tasmanian income before the war.
Before the war Tasmania relied on its tourist traffic for a substantial income, but this trade has disappeared. Naturally, an island State is dependent upon its shipping services. War conditions have involved dislocation of this traffic, but passenger needs have been met to a considerable degree by the development of air transport services. As I have already said, the State has not enjoyed the buoyant railway revenues of some of the other States. In this connexion, the commission reported -
The Tasmanian railways have obtained only minor benefits from the transport of highrate defence traffic. As in other States, however, a marked rise has occurred in operating costs. This position has been aggravated by the necessity to keep in commission working assets which are past their economic life. Recent new additions to locomotive and goods rolling stock should produce economies in maintenance and other charges, but it is doubtful, with revenues comparatively static, whether any appreciable improvement in the railway finances can be expected while operating costs remain at their present high level.
I regret that I have not had sufficient time to study all the implications of the report; but I must point to the necessity for assisting Tasmania to restore its railway rolling stock to a proper condition as soon as the war ends.
The mainland States have greatly strengthened their railway reserve funds, and, after the war, will be able to rehabilitate their railways to a considerable degree. Tasmania must be enabled to do likewise, and, if necessary, the Commonwealth Government must increase the grant for the purpose.
Whilst I welcome the bill, I also express the hope that the time is not distant when the economy of the various States willbe so based that special grants will not be necessary to enable certain of the less-populous States to maintain their solvency. If the industries of theCommonwealth could be properly decentralized, the less-populous States would be greatly assisted, and the productivity of the country could be shared on a more equitable basis.’ Grants should not be continued for longer than they are necessary. The policy of the Government should be designed to make all the States self-supporting and financially sound.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 8th September (vide page 649), on motion by Mr. Chifley -
That the bill be now read a second time.
– The purpose of this bill was clearly explained by the Treasurer (Mr. Chifley) in his second- reading speech. The Opposition is favorable to the objects which the Government has in mind, and is prepared to facilitate the passage of the measure.
Question resolved in the affirmative.
Bill read a second time and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
The following papers were pre sented : -
Air Force Act - Regulations - Statutory Rules 1944, No. 134.
Commonwealth Public Service Act - Regulations - Statutory Rules 1944, No. 138.
Defence Act and Naval Defence Act - Regulations - Statutory Rules 1944, No. 141.
National Security Act -
National Security (General) Regulations - Orders -
Taking possession of land, &c. (17).
Use of land (2).
Regulations - Statutory Rules 1944, No. 137.
Naval Defence Act - Regulations - Statutory Rules 1944, Nos. 142, 144.
House adjourned at 2.27 a.m. (Thursday).
The following answers to questions were circulated: -
s asked the Treasurer, upon notice -
– The latest available information is as follows : -
n asked the Minister representing the Minister for Trade and Customs, upon notice -
– The information is being obtained and the honorable member will be furnished with a full reply as early as practicable.
s asked the Minister for Repatriation, upon notice -
– The answers to the honorable member’s questions are as follows: -
Export of Foodstuffs to the United Kingdom.
t asked the Minister for Commerce and Agriculture -
What were the quantities of foodstuffs exported to the United Kingdom during the period 1st July, 1943, to 30th June, 1944, in the following categories: - (i) butter, (ii) cheese, (iii) eggs, (iv) meats, and (v) fruits?
– The answers to the honorable member’s question is as follows : -
Lakes Entrance Oil Field..
t asked the Minister for
Supply and Shipping, upon notice -
– The answers to the honorable member’s questions are as follows : -
The Commonwealth Government is bearing 75 per cent. of the cost and the State Government 25 per cent.
s asked the Minister for Transport, upon notice -
– The whole subject of interstate passenger rail services is being reviewed to-day at a special meeting of the Commonwealth Transport Priority Committee, with representatives of the railway systems concerned, and a report will be furnished on all of the questions which are involved in regard to restriction of transport facilities due to the serious shortage of coal supplies. The report of the committee will be dealt with by the CabinetSub-Committee on Coal Restrictions, and the recommendations submitted will be announced immediately finality has been reached.
t asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Minister for
Civil Aviation, upon notice -
– The answers to the honorable member’s questions are as follows : -
I take this opportunity of expressing appreciation of the very important contribution to the war effort made by civil aviation personnel, particularly in the transport of personnel, supplies and materials to forward areas during the more critical period of the Japanese advance.
Allied Works Council: Pictorial Display at Parliament House.
n asked the Minister representing the Minister for the Interior, upon notice -
– The Minister for the Interior has supplied the following answers : -
Tobacco and Cigarettte Supplies.
y. - On. 19th September, 1944, the honorable member for Deakin (Mr. Hutchinson) raised the question of the availability of additional female labour for tobacco factories. The honorable member referred to a recent press report which inferred that there would be enough tobacco and cigarettes for everybody in Australia without rationing if 150 extra female operatives were made available for tobacco factories.
I am now advised by the Minister for Trade and Customs that the position of factory labour for the tobacco manufacturing industry has received his constant attention during recent months. The suggestion made in the press report referred to by the honorable member for Deakin to the effect that the rationing of tobacco and cigarettes could be obviated by the procurement of 150 extra female workers is misleading.
Tobacco manufacturers’ factory output is governed by two factors - available labour and available leaf stocks. Even if all labour requirements could be met, the use of leaf stocks is limited because of the fact that at least four-fifths of current requirements must be imported from overseas. The Tobacco Manufacturer’s Advisory Committee reported several months ago that factory production could be stepped up by approximately 5 per cent., provided an additional 150 female operatives could be made available for the larger factories in Sydney and Melbourne, and provided that all persons released from tie industry by the nian-power authorities could be promptly replaced. The current position is that, as a result of an improvement in factory labour in recent weeks, the Minister for Trade and Customs has already announced that the general shortage of tobacco and cigarettes for civilian consumption will be relieved during the month of October by an increase equivalent to approximately 7 per cent., of the retailers’ quotas made available during the month of September. Provided the position of factory labour continues to improve, the Minister is hopeful that tobacco manufacturers will be able to hold production at the present levels. The continuation of tobacco rationing is, however, most essential in order to conserve available leaf stocks, and also to ensure that the needs of the fighting services are adequately met.
Broadcasting: Commercial Stations.
l. - On the 21st September, 1944, the honorable member for Griffith (Mr. Conelan) addressed the following questions to the Minister representing the Postmaster-General: -
The Postmaster-General has supplied the following answers: -
Cite as: Australia, House of Representatives, Debates, 27 September 1944, viewed 22 October 2017, <http://historichansard.net/hofreps/1944/19440927_reps_17_180/>.