Mr. Speaker (Hon. J. S. Rosevear) took the chair at 2.30. p.m., and read prayers.
Statement by Mb. J. A. Beasley.
Mr HARRISON: WENTWORTH, NEW SOUTH WALES
– Has the Prime Minister noted in this morning’s press the statement by the High Commissioner for Australia in the United Kingdom, Mr. Beasley, in answer to the charge by a British shipping authority that obstructive tactics by waterside workers in Australia and New Zealand were delaying the movement of ships that were fitted for the rapid handling of cargo. Mr. Beasley is reported to have said that sinister’ forces were causing industrial unrest in Australia for the same purpose as was actuating influences in the high field of international diplomacy, namely, to prevent the British Commonwealth from regaining its former place in world affairs and to allow some other power to supersede it. Was Mr.. Beasley expressing the views of the Government? If so, what action does the Government propose to take against these sinister in’fluences which the High Commissioner said were causing industrial unrest?
Mr CHIFLEY: Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP
– I have not read the statement mentioned, and am not prepared to accept it as a correct report of what Mr. Beasley said. I shall arrange for the statement to he supplied to me in exact terms. Having done so, I shall advise the honorable member whether what Mr. Beasley said coincides with Government policy. It is safe to say that, generally speaking, Mr. Beasley is not likely to make statements that are wide of Government policy.
Drought Relief - Wheat fob Feed.
Mr ABBOTT: NEW ENGLAND, NEW SOUTH WALES
– I have received numerous letters and telegrams from various branches of the Milk Zone Dairymen’s Association. Is the Prime Minister aware that the area of the milk zone in New South Wales is suffering from the effects of an acute drought, and that the dairymen in it are able to continue production only by heavy hand-feeding and, where irrigation is available, by continuous pumping? In view of the substantial addition to production costs -by reason of the drought, will the right honorable gentleman order an investigation of the position of the milk zone dairymen, with a view to having a drought subsidy of 4jd. a gallon paid to them until one month after the’ breaking of the drought, thus raising the amount to that paid during the winter months, namely, ls. 8£d. a gallon? If the right honorable gentleman agrees to have an investigation made, will he institute it immediately, in view of the desperate ‘ plight in which the dairymen are placed?
Mr CHIFLEY: ALP
– The matter of drought conditions in the area which the Milk Zone Dairymen’s Association purports to represent has been brought to my notice by the honorable member for EdenMonaro (Mr. Fraser), who has asked me to receive a deputation on the subject in compliance with, I believe, a request contained’ in a communication received from Mr. Sedgwick, the secretary of the association. Other representations also have been made to the - Government on the matter. Generally speaking, the Commonwealth has taken the view that drought relief is a matter for the States, and that proposals to that end should bc initiated by them. However, as the result of the representations which the Government has received, Commonwealth officers will consult with New South Wales officers either to-day or early next week in regard to the requests that have been received from the Milk Zone Dairymans Association. The honorable member for New England and the honorable member for Eden-Monaro may rest assured that the matter is now being investigated.
Sir EARLE PAGE: COWPER, NEW SOUTH WALES
– Will the Minister for Commerce and Agriculture be good enough to ask the Wheat Board to increase the quantity of wheat allocated to dairy-farmers in New South Wales? T.n this connexion, T have received the following letter from the General Manager of the Bellingen River Co-operative Butter and Bacon Society: -
The last truck we received was in June, but as you know this district has been hard hit first with floods,, drought, and then bushtires.
Many farmers have pigs at the store stage, but insufficient grain to top them off, as maize crops have suffered severely by floods, &c, and giving them’ one or two bags to do this is useless.
Our pig supplies have fallen off here to an alarming extent, and it is possible that we may have to close the bacon factory if supplies are not forthcoming.
Mr POLLARD: Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP
– The Wheat Board is fully aware of the situation, and is doing ‘everything possible to have more wheat shipped to Queensland and New South Wales. The railways authorities in the States concerned are playing their part to the best of their ability, and the Commonwealth is assisting them as far as possible.
Mr FRASER: EDEN-MONARO, NEW SOUTH WALES
– Will the Prime Minister state the present position in relation to applications for assistance by dairyfarmers in the milk zone who are suffering severely from the drought? Has agreement on the matter yet been reached by the Governments of the Commonwealth and New South Wales? If the position cannot be stated now, will the right honorable gentleman make an early announcement, in view of the very serious difficulties which the dairyfarmers are experiencing while awaiting the assistance they are seeking?
Mr CHIFLEY: ALP
– I have informed the honorable member for New England (Mr. Abbott) that consultations are taking place, or will take place early next week, between officers of the Commonwealth and State Governments. I have” no further statement to make on the matter.
Northern Queensland Service
Mr EDMONDS: HERBERT, QUEENSLAND
– Can the Minister representing the Minister for Supply and Shipping state whether it is true that the steamers -Canberra and Ormiston are not to be restored to the north Queensland run? Having regard to the fact that a reasonable share of available shipping has not’ been allocated to northern Queensland, will the Minister ensure that the Canberra and the Ormiston will visit northern Queensland ports as in the past or ensure that other steamers of the same class are put on that run?
Mr DEDMAN: Minister for Defence · CORIO, VICTORIA · ALP
– I shall’ ask the Minister for Supply and Shipping to ‘inquire into the position, and an answer will be given later.
Mr HUTCHINSON: DEAKIN, VICTORIA
– Has the Minister for Commerce and Agriculture seen a report in the Sydney Morning Herald of this morning that the Railways Department in New South Wales is overworked and undermanned ? As this is undeniably true, and as it is also true of the Victorian Railways Department, and probably of other State Railways Departments, and as large quantities of primary produce are likely to be held up because the railways cannot handle them, will he confer with the Minister for Transport with ‘ a view to entering into negotiation with the appropriate Ministers in the various States in order to ensure that motor transport shall be kept on the roads at -least until the railways are again able to shift all the wheat, wool and live-stock offering?
Mr POLLARD: ALP
– I have seen the report referred to by the honorable member, and I have no doubt that it is true that railways stalls in all the States are sb.ortha.nded and overworked. The State Governments are aware of this, and I am sure that they are doing what they can to handle the freight offering. I shall confer with the Minister for Transport in order to see whether we can do anything to assist the State authorities.
Kkquir.km.bnts of Boothby Electorate.
Mr SHEEHY: BOOTHBY, SOUTH AUSTRALIA
– In view of the industrial expansion which is taking place in the electorate of Boothby, which will result in the opening up of new residential areas, will the Minister representing the Postmaster-General request his colleague to take the necessary action to secure additional post office sites in order to provide for future requirements in this regard ?
Mr CALWELL: Minister for Immigration · MELBOURNE, VICTORIA · ALP
– J am sure that thu Postmaster-General will take the necessary action to acquire whatever sites are needed for postal services in the great and expanding industrial districts of Boothby which the honorable member represents so competently in this House. When the Postmaster-General is in a position to give me some detailed information on the subject I shall be happy to furnish it to the honorable member.
Mr ARCHIE CAMERON: Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP
– Ha s the Attorney-General taken, or does he propose to take in the High Court any action to bring about an early hearing of the claims against the Commonwealth in respect of the wheat delivered to the 1945-46 pool?
Dr EVATT: Attorney-General · BARTON, NEW SOUTH WALES · ALP
– I shall look into the situation in connexion, with the litigation to which the honorable member has referred and see whether such action as he suggests is required.
Passages on Strathmore - Alien Refugees from Shanghai.
Mr LANG: REID, NEW SOUTH WALES
– Will the Minister for Immigration supply an answer to questions I have asked relating to the entry into Australia of alien immigrants? The questions are: Will the Minister lay upon the table of the House all the papers relating to the entry of 200 alien immigrants who arrived from the Middle East on the Strathmore11. Will he include in such papers the original applications for permission to enter, together with the recommendations thereon? Will he also table the text of the representations made through Australia House to the British Ministry of Transport which led to the withholding of 200 berths from passengers stranded in England in order to accommodate migrants from the Middle East?
Mr CALWELL: ALP
– The answer to the first part of the question is “No”. The answer to the second part is “ No “ ; and the answer to the third part is the same as the answer to the first and second parts.
Mr GULLETT: HENTY, VICTORIA
– I desire to ask the Minister for Immigration a question arising out of one which I asked during last session. The question was based on a report that some hundreds of Jewish refugees were en route from Shanghai to Australia. The Minister then cast some doubt on the accuracy of the report, but as the people have since arrived in Australia, and others as well, will he now state how many alien migrants have arrived here since the end of the war, and for how many more permits to come here have been issued?
– I did cast doubt on a statement contained in the question of the honorable member which he asked during the closing hours of the Seventeenth Parliament, namely, that a boatload of hundreds of aliens was enroute to Australia.
– The figure given was 250, and that number arrived.
– At that time, there was no boat en route to Australia from Shanghai carrying Jewish refugees.
– It was not stated that they were en route. It waa stated that they were at Shanghai.
– The honorable member has repeated his statement that there was a boatload of refugees en route to Australia. T denied, in the first place, that there was any ship-load of refugees en route to Australia at that time.
– Nobody ever claimed that there was, so there was no need to deny it.
– The honorable member made a statement, and now he is running away from it. In the second place, 250 refugees never arrived from Shanghai on any one boat. The total number that arrived from Shanghai on all boats was .hot more than 100. Stories of boat-loads of aliens arriving in Australia, or about to depart from Shanghai for Australia, are in the same category as those concerning the synthetic cyclones which were created off the Queensland coast at the time of the Yoizuki incident. That covers the first part of the honorable member’s question. If he will put the remainder of it on the notice-paper, it will receive consideration.
BREACHES OF CUSTOMS AND EXCISE LAWS
Appointment of Royal Commission
Mr DAVIDSON: CAPRICORNIA, QUEENSLAND
– Has the AttorneyGeneral seen the press report that the Queeusland Government has decided to appoint a royal commission to inquire into the circumstances surrounding the finding of a quantity of contraband tobacco at the residence of a Queensland Minister of State? Does not such, h matter come more properly within she exclusive jurisdiction of the Commonwealth Government than within that of the State authorities? Will the AttorneyGeneral confer with the Prime Minister with a view to the appointment of a royal commission to inquire into all recent alleged breaches of customs and excise laws, including those relating to Mr. T. A. Foley and Miss Rosetta Kelly?
Dr EVATT: ALP
– In regard to the first part of the honorable member’s question, namely, the finding of contraband tobacco at the residence of Mr. Foley, MX. A., that matter is still in the hands of the Department of Trade and Customs and the Commonwealth Crown Law officers. I understand that a conference is taking place between those two authorities to determine whether or not additional proceedings shall be launched. Until a recommendation is made and action is taken one way or another, it would not be proper for me to discuss what should or should not be done. T have no desire to interfere in any way with the recommendations of the departmental officers, which will be considered, and, no doubt, acted upon.
– The Queensland Government is interfering in the matter.
– I express no opinion about the attitude of the Queensland Government. 1 can express only the opinion of the Commonwealth. I shall discuss the matter with the Prime Minister. As regards the matter raised by the Deputy Leader of the Opposition, I assure him that the same course is being followed. It is the regular course. Departmental officers are dealing with the matter under Commonwealth law. Their recommendation will go forward and will undoubtedly be acted upon. I do not want to express any opinion about the matter one way or the other. I think the honorable gentleman will agree that that is the proper attitude.
REPORT ON AITAPE
Mr McBRIDE: WAKEFIELD, SOUTH AUSTRALIA
– Will the Minister for the Army lay on the table the report by Senator Fraser on Aitape?
Mr CHAMBERS: Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP
– I shall consider the matter, and if the Government decides that it should be tabled it will be tabled.
Second Land-line FROM East to West.
Mr HAMILTON: SWAN, WESTERN AUSTRALIA
– As the broadcasting of the proceedings of the Commonwealth Parliament has priority on the use of the only existing land-line from eastern Australia to Western Australia, listeners there are debarred from receiving relayed broadcasts from the eastern broadcasting stations when the Parliament is sitting. I ask the Minister representing the Postmaster-General whether the department is providing a second land-line to overcome the disability? If so, when will it be in operation? If not, when may the people of Western Australia be provided with the necessary facilities?
Mr CALWELL: ALP
– It is the intention of the Postmaster-General’s Department to provide additional land-lines, not only to Western Australia, but also to other parts of the Commonwealth. I cannot say at the moment when the required facility will be provided, but I will ask the Postmaster-General to supply me with the information in order that I may either answer the honorable gentleman’s question or obtain leave from the House, to make a statement on the matter of land-lines as soon as possible.
FILM INDONESIA. CALLING
REMOVAL of Ban on Export.
Mr WHITE: BALACLAVA, VICTORIA
– The Sydney morning press reports to-day that the Minister for Trade and Customs has announced that the film Indonesia Calling will be released for export. The article states that in August the Commonwealth Film Censorship Board prohibited the export of the film on the ground that it would offend the people of a foreign country. It states, too, that the organization that made the film has arranged for release of the film in New Zealand and Indonesia, and that steps are being taken to release it in America and Europe. I ask the Prime Minister by whose authority the recommendation by the Commonwealth Film. Censorship Board that the export of the film, be prohibited has been overridden. Does the right honorable gentleman not think’ that the release of such a film will be detrimental to our relations with the Dutch?
Mr SPEAKER (Hon J S Rosevear: DALLEY, NEW SOUTH WALES
– Order ! The honorable member for BalacIava is inviting the Prime Minister to engage in a debate, which would not be in order.
– In that case, would the right honorable gentleman not object to and protest against the world-wide release of a film detrimental to Australia?
Mr CHIFLEY: ALP
– I think that the matter was well covered last week by the Minister for External Affairs, lt is true that in some States the film was permitted to be exhibited by the State authorities but in others its exhibition was not allowed. The Minister for External Affairs replied to a question asked by the honorable member for Darwin (Dame Enid Lyons) on the subject. The matter of the export of the film was submitted ‘to the Commonwealth Government, which decided that there were no grounds for banning the export of the film. A good deal of discussion had taken place regarding this matter, and as I intimated a few days ago, I arranged for the film to be exhibited .before Cabinet. The Minister for External Affairs indicated in the House last week that on general principles, it was not the Commonwealth Government’s function to decide whether the censor should prohibit the export of films made in Australia.
Senator McBRIDE: WAKEFIELD, SOUTH AUSTRALIA · LP; LCL from 1951; LP from 1954
– Why was the decision of the censor overridden?
– Order ! The honorable member for Wakefield is out of order in interjecting when the Prime Minister is replying to a question.
Mi-. CHIFLEY. - The Minister for External Affairs dealt thoroughly with the principle involved a few days ago. It is for each country concerned to determine whether the film shall be exhibited in its theatres. If the Government of New Zealand and the Government of the United States of America desire to prohibit the exhibition of the film, that is entirely a matter for themselves. The honorable member foi- Boothby asked who overrode the film censor. From his knowledge of the law regarding this matter, he must know that the censor is not the final authority. The Minister may decide to take action, and, in this instance, he did so on instructions from Cabinet.
– Will the Prime Minister answer the last part of the question dealing with the undesirability oof exhibiting the film, in Australia ?
– The film does not in any way express the views of the Government, and, in the circumstances, the Government is not responsible for it.
FOOD FOR BRITAIN
Mr RYAN: FLINDERS, VICTORIA
– Earlier this month, the press reported that after the departure of the MV. Port Wyndham from Corio, the vessel being loaded with food parcels for Great Britain, a number of mail bags and wrappings of food parcels were washed up upon the beach around Geelong. On arrival at Adelaide, Port Wyndham took on another 2,000 parcels, some of which were later reported to Lave been stolen. These reports have caused great concern to people who send parcels to Great Britain. Will the Minister representing the PostmasterGeneral inform me whether the department has investigated these losses? If so, what is the result of the investigation? Do the inquiries show that any food parcels prepared by the Victorian Department of Agriculture were among the number lost? What steps is the PostmasterGeneral’s Department taking to prevent a repetition of these losses?
Mr CALWELL: ALP
– I shall ask the Postmaster-General to advise me whether any inquiries were made into the newspaper statements to which the honorable member referred, and whether any investigations have been made generally into the delivery of food parcels from Australia to Great Britain. Every person in Australia would be greatly concerned it the condition of affairs which the honorable member described, happened even occasionally. However, the PostmasterGeneral will have a file upon the subject, and when I obtain the necessary information, I shall furnish it to the honorable gentleman, or if honorable members so desire I shall make a statement to the House.
Brad kie i.d SSchetu e.
Mr DUTHIE: WILMOT, TASMANIA
– I ask the Prime Minister. - (1) Is it a fact that a royal commission has inquired into the practicability of implementing the Bradfield irrigation scheme to divert the rivers of eastern Queensland westward into the rivers flowing into the Lake Eyre area for the purposes of irrigation? (2) If so, when will the royal commission’s report be made available to the House? (3) Will this report be the last word on such a scheme, or will alternative schemes to combat the disastrous erosion of Central Australia be investigated?
Mr CHIFLEY: ALP
– So far as I can recall, the Commonwealth Government has not appointed a royal commission to inquire into the Bradfield water conservation scheme. However, reports have been compiled upon this proposal for diverting water into the dry areas of Central Australia, and the practicability of undertaking such a work has been discussed. On a few occasions, committees have considered the plan as a part of other works. I shall ascertain for the honorable gentleman exactly what the position is, and furnish the fullest information available.
ELECTORAL DIVISION OF MARANOA
Office Accommodation at Dalby.
Mr ADERMANN: MARANOA, QUEENSLAND
– I bring to the notice of the Minister for the Interior the fact that the electoral office at Dalby, in the Division of Maranoa, consists of a room of only 32 feet by 13 feet, in which officers are required to deal with all the electoral matter of 430 polling booths. Will the Minister endeavour to make more adequate accommodation available before the census is taken next year? Will he also confer with the Postmaster-General with a. view to making accommodation available for electoral purposes in the new post office which is to be built at Dalby?
Mr JOHNSON: Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP
– No previous representations have been made to me on this subject, but I shall cause inquiries to be made. If the accommodation is inadequate I shall endeavour to have it increased so that the census work may be done properly.
Mr HADLEY: LILLEY, QUEENSLAND
– Is the Minister representing the Minister for Supply and Shipping aware that an acute shortage exists in Brisbane of 3-in. and 4-in. piping for the laying of gas mains in areas where new buildings are being constructed? Is he aware also that large stocks of such piping are awaiting shipment at Port Kembla? Will the honorable gentleman ask his colleague to ensure that shipping shall be made available as early as possible to transport the piping to places where it is urgently needed?
Mr DEDMAN: ALP
– I am aware that an acute shortage of many kinds of building material exists in different places throughout the Commonwealth. There is also a shortage of shipping which is contributing to the difficulties of the situation. I shall ask my colleague to afford what relief he can.
Mr HOLT: FAWKNER, VICTORIA
– Yesterday the Minister for Labour and National Service denied a statement attributed to the chairman of the Stevedoring Industry Commission that several hundred men on the Sydney waterfront had not presented themselves for employment during the last eleven weeks. The honorable gentleman stated that there was no shortage of labour, and that, in fact, men had not been able to secure work there in recent times. A spokesman for the “shipowners said yesterday that there was a labour shortage of 1,500 men on the Sydney waterfront yesterday, that nine overseas vessels had received no labour at all, and that eleven overseas and three intra-state vessels were left short of labour. In view of the obvious fact that this information contradicts the statement supplied to the Minister by his advisers, I ask the honorable gentleman to consult representatives of shipowners and the Stevedoring Industry Commission on the subject of the supply of labour at the Port of Sydney, so that the present delay in the working of ships may be eliminated.
Mr HOLLOWAY: Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP
– The answer that T gave to the honorable member yesterday on this subject was not contradictory of the statement published in this morning’s Sydney Morning Herald. The honorable member has read only a part of the statement that appeared in that newspaper. I was asked by him. whether the Waterside Workers Federation had closed its books. My answer was that it had not.
– I do not challenge that statement.
– The honorable member also said that there was a. shortage of labour on the waterfront of Sydney and he asked me whether I would appeal to the Waterside Workers Federation to open its books.
– I also asked what other action the Government proposed to take.
– I said that, according to the number of men available and registered on the books, there was no shortage of labour. The statement that appeared in the Sydney Morning Herald this morning is most illogical and self-contradictory. The newspaper reported that I had ascertained that there was no shortage of labour, but it went on to say that men were not able to get work on the waterfront although there was a shortage of labour. Is there any sense in that?
-The real point is, whether there is a shortage and what the Government proposes to do to alleviate it.
– The honorable member did not read that portion of the report. I said that there was not a shortage of labour. I was, of course, speaking in the general sense. The shipowner responsible for the statement published in the Sydney Morning Herald has endorsed what I said in that respect. There is no shortage of labour if the position be viewed over-all. Everybody knows that, because of the nature of the industry, there is and always has been a shortage at peak periods. On the other hand, there are periods during which there is a surplus of labour. I said yesterday that there was no need for the Waterside Workers Federation to open its books for the admission of new members, because they had not been closed, and that the labour registered in the federation and recognized by the Port Committee was sufficient to do the work offering in normal times. The shipowner to whom I have referred also stated in to-day’s Sydney Morning Herald that 300 or 400 members of the Waterside Workers Federation are even now not being called up for work because of their inability, on account of age or physical condition, to do all the classes of work offering. Everything that I said has been .proved to be correct. To the last part of the honorable member’s question my answer is, “ Yes “. This morning I made a check, with a view to ascertaining whether I had made a mistake yesterday, and the reply that I received from the Waterside Workers Federation bears out what I then said. I told the honorable member yesterday that quite recently the Minister for Supply and Shipping had had a conference with representatives of the shipowners, the Chairman of the Stevedoring Industry Commission, and representatives of the “Waterside Workers Federation, with a view to discovering means whereby ships could be turned round more quickly. A further conference on the matter is in session at the present time. I shall again -confer with the different parties.
Mrs BLACKBURN: BOURKE, VICTORIA
– I ask the Prime Minister whether any representations have been made to him in regard to the holding of tests with guided projectiles in Central Australian reserves. If so, what is their nature? Who is to control the tests, and who is to say what will be done with the information obtained from them? Has the Government decided to allow the experiments to be held ? Will the matter be brought forward for debate in this House ?
Mr CHIFLEY: ALP
– Experts from the United Kingdom have visited Australia. I understand that they had previously made investigations elsewhere with a view to locating the most suitable site for experiments in regard to the guided projectiles. The Commonwealth made available expert officers to assist them during their stay in Australia. Their final determination was that a site in Central Australia was the most suitable they had found for the holding of the tests. Up to that, stage the matter had been on a purely expert plane and had not been raised to a high governmental level. Apparently, they made a report to their government when they returned, to the United Kingdom. Prior to the election of the new Cabinet recently, I had received cables in regard to the matter from Mr. Attlee, and had decided that it should stand in abeyance pending the formation of the new administration. I understand that further details were received during last week. I have had representations from some bodies in Australia, including representatives of different churches. Because of my inability to do so, the Minister for Post war Reconstruction received a deputation on the subject. To the best of my belief, the objection raised by the members of the deputation was to the site chosen and not to the proposed experiments. Numerous individual representations and protests have been received in connexion with the site. I hope that the matter will be dealt with by Cabinet within the next fortnight. I shall then be able to supply fuller information to the honorable member.
COMMONWEALTH GRANTS COMMISSION
Mr CHIFLEY: Prime Minister and Treasurer · Macquarie · ALP
The Government has adopted the recommendations of the commission, and legislation to give effect to them will be brought down in due course.
– Has the Minister representing the Minister for Supply and Shipping seen the reported statement by Mr. Roughley, State Superintendent of Fisheries in New South Wales, that the shortage of wire netting will result in fewer oysters being gathered next year? In view of the keen demand for oysters, and the number of men employed in’ the industry, will the honorable gentleman have wire netting made available to the industry for use on the trays on which are placed the mangrove sticks on which the young oysters are fattened?
Mr DEDMAN: ALP
– I have not seen the statement to which the honorable gentleman has referred. I do not think that the Minister for Supply and Shipping can be of much assistance in this matter. The manufacture of wire netting is controlled largely by private enterprise, and the Commonwealth Government does not exercise any control over its distribution.
– An allotment is made.
– I shall ask my colleague to supply any information that he has.
Reparations from Japan.
– Has the Prime Minister or the Government been requested by the Australian Prisoners of War Relatives Association to demand from Japan by way of reparation the sum of £20,000,000, representing payment for suffering, sickness and death among Australian servicemen while they were inmates of Japanese prison camps? If so, what is the Government’s attitude towards the request?
Mr CHIFLEY: ALP
– I am not certain that any official representations have been received, but I have read of the request having been made. I believe that some letters on the subject have reached the Prime Minister’s Department. The matter has not been considered by Cabinet. No doubt it will be considered as part of the general subject of reparations from Japan, regarding which finality has not yet been reached. I cannot now give full information as to what is likely to be done, but I shall keep the honorable member informed.
Taxation on Living Allowances.
– Can the Treasurer say whether it is a fact that some living allowances granted to ex-servicemen undergoing rehabilitation training are subject to taxation deductions, and if so, on what authority?
Mr CHIFLEY: ALP
– I believe that such allowances come within the general range of the taxation law, and that deductions are being made. This action is being taken under the authority of a law passed by this Parliament.
– This morning’s press published a statement of the Minister for Repatriation that from now on service in Great Britain in either world war would be regarded as service abroad for repatriation purposes. Having regard to this fact, will the Minister for Defence re-open the cases of the 2,000 members of the Royal Australian Air Force, and of some hundreds of men in the Army, who served in Great Britain in World War II., but were declared ineligible for decorations? mi
Mr DEDMAN: ALP
– I shall consider the point raised by the honorable member.
WHEAT INDUSTRY ASSISTANCE BILL 1946
Motion (by Mr. Pollard) agreed to -
That leave be given to bring in a bill for an act to amend the Wheat Industry Assistance Act 1933.
STATES GRANTS (DROUGHT
Motion (by Mr. Pollard) agreed to -
That leave bo given to bring in a bill for an act to grant and apply out of the Consolidated Revenue Fund a Bum for the purpose of making grants to certain States for the purpose of drought relief.
Messages from the Governor-General reported transmitting Estimates of Revenue and Expenditure and Estimates of Expenditure for Additions, New Works, Buildings, &c, for the year ending the 30th June, 1947, and recommending appropriations accordingly.
Ordered to be printed, and referred to Committee of Supply forthwith.
In Committee of Supply:
Mr CHIFLEY: Prime Minister and Treasurer · Macquarie · ALP
– lt is my privilege to present the sixth successive budget brought down by the Labour Government since taking office in October, 1941.
In the fifteen months since hostilities ceased the Australian war organization has largely been dismantled. Some 520,000 men and women have been released from the services and practically all these, besides some hundreds of thousands of people formerly engaged in war industry, have found civil occupations. Employment has reached record levels and production is rising in most fields. Overseas trade prospects are at present favorable. We have held prices in check and have reduced overseas debts. The first stage of the post-war transition has been completed successfully.
Many problems, however, remain and burdens have yet to be borne. For instance, we are pledged to maintain a defence organization commensurate with our new responsibilities for empire and world security in the Pacific zone and this will entail a far greater annua] defence expenditure than in pre-war years.
Various commitments arising from the war and its aftermath have still to be met. Some of these will be cleared up in a year or two. Others will continue from year to year far into the future so that this generation will not see the end of them. Finally the danger of inflation is still present, as formidable as ever, and the fight against it must be carried on. Consumer demand banked up during the war, in the form of accumulated purchasing power, and has continued to bank up. Civil production, on the other hand, was severely curtailed.
With the rapid demobilization of the services and the abolition of controls, production is making headway in most industries, but is still a long way from overtaking the scarcities of the war period and the increased demand which lias arisen from higher employment.
A notable feature of the last year has been the rise in factory employment. In August this year the number of people recorded as employed in factories was 770,000, which is 20,000 above the wartime peak and 230,000 above the level of June, 1939. Clearly we are developing a potential in secondary production capable not only of meeting a much wider home demand but also of supplying markets abroad. But this, like other possibilities of its kind, is entirely dependent upon our achieving a higher all-round standard of efficiency and productivity. Failure in this direction would involve painful re-adjustments once the present scarcity demand had been satisfied.
We have meanwhile held firmly to controls not only on prices but on the main elements in costs. It is recognized of course that with competition for resources extremely active and with rising world prices, some changes in local price and cost relationships have to be made. But these re-adjustments must be handled with the greatest care and with a full appreciation of their consequences, direct and indirect.
We shall be wise, I believe, to pursue a steady course, taking advantage of favorable conditions as they occur, striving for greater output in all industries, making sectional adjustments where necessary to correct anomalies and secure a fair distribution of returns, but keeping to a minimum any general movement in prices.
Export prices for wool and wheat are at present high. Under the contracts with the United Kingdom, moreover, we are receiving increased returns for meat, dairy products, and dried fruits, while minor exports are also meeting a favorable demand. There are, however, elements in the overseas situation that will have to be closely watched. It should not he forgotten that while much of the current exceptional demand arises from war-time scarcities in consumer countries, production in exporting countries can be expected to expand fairly rapidly. We must lose no opportunity to increase our overseas earnings from exports of both primary and secondary products. At the same time in order to guard, against an adverse turn in export prices excessive costs in those industries must be avoided.
London funds held by the Commonwealth Bank at the end of October were at the high level of £218,000,000 Australian. Partly this is due to favorable export returns and partly to the relatively slow movement of imports, a factor which has contributed largely to the continuation of local shortages. Substantial liabilities have still to be met on account of the war and it is probable that most of these will be cleared up during the current year. Under the Financial Agreement with the United States of America signed on the 6th December, 1945, the United Kingdom Government is committed to approach Australia and other members of the sterling area for an arrangement with regard to sterling balances. The future availability of these funds, taken with the earnings of our export trade, will determine our future capacity to purchase imports, of which’ we need considerably more than pre-war quantities to refit our industries, restore stocks, and to provide plant for new enterprises now starting, and for which we shall have to pay substantially higher prices than before the war.
We undoubtedly have the capacity to achieve much higher levels of civil production than those so far attained. Full employment gives wage-earners secure tenure of their jobs and provides industrialists with dependable markets for their goods. Government policy has been and will be steadily directed towards this end. But for the productive effort that will turn these advantages to full account in higher living standards we must necessarily rely upon industry and all who have a share in it. Unless that effort is made the attainment of full employment will be but a partial achievement.
Revenue and Expenditure 1945-46
In the Financial Statement presented last July, I explained the movements in revenue and expenditure for last financial year, and I do not propose to make any further comments to-day. For the convenience of members, however, the details of revenue and expenditure during 1945-46 compared with the Budget estimates of September, 1945, are given in Statement No. 1. In addition the main heads of aggregate war expenditure to the 30th June, 1946, are set out in statement No. 4, and details regarding loan transactions and the public debt in statement No. 5.
Defence and Post-war Charges 1946-47.
Special attention has been given in this budget to reduction of expenditure on items arising from the war and related activities. Also, as intimated in my Financial Statement of July last, the estimates of the war and defence group of departments havebeen re-arranged under the heading “Defence and Post-war (1939-45) Charges”, in order to make clear the change which has taken place in the character of expenditure in this field since hostilities ended.
Estimated defence and post-war charges for 1946-47 show the effects of rapid demobilization of the forces and the war supplies organization. The estimate of expenditure is £221,000,000, compared with £378,000,000 in 1945-46, a reduction of £157,000,000. Included in this total of £221,000,000 is £64,000,000 to be paid overseas, principally on account of war liabilities carried forward from earlier periods. The summarized details of defence and post-war charges are as follows : -
Defence and Allied Services
The estimated cost of defence and allied services for 1946-47 is £147,000,000, compared with £348,000,000 last year, a reduction of £201,000,000. The main reduc tion has been made in the Departments of the Navy, the Army and Air, for which estimated expenditure this year is £183,000,000 below the amount spent last year. Active pay and allowances for the current year are placed at £25,000,000, as against an expenditure of £130,000,000 in 1945-46. Deferred pay is estimated at £17,000,000, compared with £72,000,000 last year.
On present plans the strength of the three services, which was 137,000 in June this year, will have been reduced to 67,000 by June,. 1947. During the present interim period the defence forces will be limited to maintaining the Australian component of the British Commonwealth Occupation Force in Japan, .administrative and maintenance activities on the mainland, and a nucleus for the permanent post-war forces. It will take some time for the full effects of scientific developments in the defence field to be assessed and for the future strength and arming of the services to be determined.
Provision of £1S,000,000 for aircraft equipment and stores under the Department of Air includes £8,000,000 in respect of local aircraft production programmes.
Estimates of £13,000,000 for the Departments of Munitions and Supply and Shipping indicate .a decrease of £2,000,000 from actual expenditure in 1945-46. Of the £7,000,000 set down for the Munitions Department, £2,600,000 is required for maintenance of certain factories as nucleus and reserve establishments and for the closing-down expenses of certain other factories and annexes and their conversion for peace-time requirements.
The items grouped under post-war charges figure much more largely in this budget than in earlier budgets. In this financial year they represent 47 per cent, of gross expenditure compared with 23 per cent, in 1945-46.
Re-establishment and repatriation is estimated at £35,000,000, which is £21,000,000 above expenditure last year, and includes £14,000,000 for reconstruction training, £7,000,000 for repatriation benefits, £6,500,000 for pensions and £5,500,000 for land settlement and agricultural re-establishment loans.
Interest and sinking fund on account of war and repatriation borrowings will be £46,000,000, an increase of £5,000,000 on last year.
Subsidies for price stabilization and assistance to primary production are estimated at a net £23,000,000, or £10,000,000 less than expenditure in 1945-46. Details are contained in statements Nos. 7 and 8.
Credits to be offset against defence and post-war costs are set down at £57,000,000 as against £74,000,000 last year. These include proceeds of war disposals and recoveries from other administrations as well as a considerable range of lesser credit items. In view of the many contingencies involved, this estimate cannot be made with full certainty.
The existence of these post-war expenditures brings home the fact that war costs do not end when fighting ceases. Some of the items, such as debt charges and war pensions, will continue for many years. Such items as Unrra and the lend-lease settlement, will not, however, recur, whilst other items will tend to diminish and will disappear within a few years. As mentioned already, by the middle of next year the services will have been brought down considerably below their present strength and it ishoped that most of the external liabilities which have been carried over from the’ war will have been settled.
Perhaps at this stage I might give an indication of how far the real burden of war and its aftermath has in fact been reduced. Aggregate budget expenditure upon war and related purposes does not truly portray the actual drain upon the nation’s physical resources, because items such as interest, subsidies, war pensions and deferred pay represent transfers of purchasing power and not a subtraction from consumption standards. Similarly, war expenditure abroad draws upon the resources of other countries. Against this, expenditure here by Allied forces., though not appearing as a budget cost,, did use up Australian resources.
After making adjustments for such, items, the actual value of Australian resources devoted to war reached a maximum of £548,000,000 in 1943-44. From that point it declined to £448,000,000 in 1944-45 and to £278,000,000 in 1945-46. This year, on current estimates, it will have fallen to £110,000,000, which is about one-fifth of the figure of three years ago.
These and related estimates of national, income and production will be found in a separate paper which is being distributed with the budget papers.
Estimates of other Expenditure 1946-47.
The estimate of total expenditure other than defence and post-war charges is £223,000,000 or £59,000,000 above the amount spent in 1945-46.
Tn accordance with the National Welfare Fund Act, payments to the fund will comprise £51,000,000 in respect of social services contributions, together with £13,000,000 from the pay-roll tax- a total of £64,000,000. Last year payments to the fund amounted to £46,000.000. A substantial increase in expenditure from the fund is expected this year. Expenditure last year was £53,000,000. With the rising cost of invalid, old-age and other pensions and child endowment, together with a full year of hospital benefits, expenditure is expected to reach £68,000,000 this year. Thus the fund’s receipts from taxation will fall short of expenditure by about £4,000,000. Statement No. 6 shows the position in detail.
Payments of taxation and special grants to State governments are estimated at £45,000,000 or £8,000,000 above payments last year. Of this increase about £6,000,000 is accounted for by the increase in taxation reimbursement grants associated with the continuation of uniform tax. Full details are given in statement No. 9.
The provision of £34,400,000 for the Post Office is £5,400,000 above actual expenditure last year. The increases are £2,000,000 for new works, £1,900,000 for maintenance and extensions to services, and £1,500,000 for capital finance for the Overseas Telecommunications Commission.
Provision of £7,200,000 has been made for civil aviation, a field of activity which is expanding rapidly to meet needs created by post-war developments. This is an increase of £5,400,000 over actual expenditure last year. The items in this increase are £2,200,000 for works, mainly aerodromes, £1,400,000 for maintenance, and £1,800,000 for advances to the TransAustralian Airways.
Estimated expenditure on the territories is £6,000,000 compared with £1,600,000 last year, an increase of £4,400,000. Main items are £1,685,000 for rehabilitation services in Papua and New Guinea, £1,366,000 for new works in the Northern Territory, and £1,184,000 for works in the Australian Capital Territory.
The increase of £8,400,000 in administrative departments is due principally to the transfer of the Departments of Labour and National Service, Transport, Post-war Reconstruction and Information from war votes to ordinary votes. Certain other expenditures formerly charged to war votes are also being charged this year to ordinary votes.
Mr CHIFLEY: ALP
– I will supply the exact information required by the right honorable gentleman.
Apart from the Post Office, civil aviation and the territories, new works and buildings being undertaken by the Commonwealth involve an estimated expenditure of £10,500,000, compared with an actual expenditure of £1,000,000 last financial year. Whilst the programme extends over .most fields of Commonwealth activity, ‘the largest expenditure will be on
Avar service homes and shipbuilding. An amount of £750,000 is provided for surveys and other preliminary work on the standardization of rail gauges.
Further details of expenditure other than defence and post-war charges are given in statement No. 3.
Estimated Revenue 1946-47
It is estimated that with taxation at the rates in force last year, i.e., before the July reduction in income tax, revenue in 1946-47 would be £414,000,000 compared with actual revenue in 1945-46 of £389,000,000, an increase of £25,000,900.
After taking account of the reductions in income taxation on individuals made in July and of certain proposed reductions in indirect taxation which I shall outline later, it is estimated that revenue for the current year will amount to £385,000,000, a fall of £4,000,000 on last year.
Within this total, income tax and social services contribution are expected to show a decline of about £12,500,000 and sales tax a decline of £2,600,000. On the other hand customs and excise will be greater by about £11,000,000, mainly on account of the anticipated increase in imports during the financial year. Further details of estimated revenue are given in statement No. 2.
The budget position for this year, compared with that of last year, may therefore be summarized as follows : -
Certain self-balancing items of revenue and expenditure connected with primary production, for instance thewheat export charge and the wool contributory charge, have not been included in these figures.
To the budget gap of £59,000,000 requiring loan finance must be added the Loan Council borrowing programme of £45,000,000 to cover expenditure by State governments on public works andhousing.
Expansion of housing is vital at the present time, and public works contained in the Commonwealth and State programmes are essential either to maintain existing services or to provide new social and industrial facilities. Many of them have become urgent through long deferment during the war period. They must therefore go forward as rapidly as possible.
Works activity, however, must be integrated with the general economic and employment situation. The Commonwealth Government, in co-operation with the State governments through the Loan Council, is seeking methods by which to achieve an appropriate balance in the demands made upon our total physical resources by private expenditure on the one band and public expenditures, particularly works expenditures, on the other hand. Failure to achieve this balance can mean either falling incomes and unemployment or else that excessive competition for resources, with consequent pressure upon prices and costs,which is the real cause of inflation. Financial control, exercised through budgetary measures in the widest sense and the adjustment of loan works programmes, is the main instrument through which this balancing of expenditures can be accomplished.
The total borrowing programme in 1946-47 for Commonwealth and State governments amounts to £104,000,000. In addition, there is the borrowing programme of about £24,000,000 for local and semi-government authorities. This programme, while much below the level of borrowing in recent years, is still very large. In the light of the present exceptionally strong private investment and consumption demand and the unprecedented levels of employment, it is the maximum which would be justifiable.
After a careful assessment of the whole position the Government has decided to propose substantial reductions of indirect taxation to take effect immediately. Full details will be given in the measures to be introduced later to-day. In summary, the reductions are as follows: -
Sales tax -
Clothing and household drapery (present rate 71/2 per cent.) - Complete exemption.
General rate (at present 121/2 per cent.) -R eduction to 10 per cent.
Third schedule (present rate 25 per cent.) -Reduction to 10 per cent, in respect of certain items.
Additional exemptions - Certain items at present subject to tax to be exempt.
The estimated cost to the revenue of the proposed sales tax concessions is estimated at £16,000,000 in a. full year and £9,000,000 for the remainder of the current financial year.
Customs and excise -
Special war customs duty - Abolition of duty.
Primage duty on plant, equipment, materials and minor articles used in connexion with manufacturing processes in Australia - Abolition of duty.
Excise duty on dry batteries, carbonic acid gas and methylated spirits - Abolition of excise duty with corresponding reductions in the customs duty.
Customs and excise duty on petrol - Reduction of duty by Id. a gallon.
The cost to revenue of the proposed reductions in customs and excise duties is estimated at £4,000,000 for a full year and £2,500,000 for the remainder of the current year.
All told the value of the proposed tax concessions is expected to be about £20,000,000 for a full year and £.11,500,000 for the remainder of the current year. Taken in conjunction with the reduction in income tax which was made in July in anticipation of the budget, they bring the value of tax reductions made during the current financial year to a total of approximately £37,000,000 per annum. If these are added to the reduction of income tax and sales tax made during 1945-46 the annual value of tax reductions made by the Government since the war ended will be about £61,000,000. This total of £61,000,000 is made up as follows :-
Prices and Production
The proposed sales tax reductions will be of immediate and substantial benefit to consumers as a whole and particularly ti) those people who spend .most of their incomes on necessaries. Practically all essential commodities entering into the living standard will be free from sales tax
The customs and excise reductions will also benefit consumers directly and will reduce costs both of current production and of the establishment of new enterprises.
In this latter respect, . they are in line with a series of measures taken by the Government to encourage expansion and reduce costs in Australian industry. ‘Sales r<ix reductions made during the last financial year in respect of machinery and plant and aids to manufacture are estimated to have an annual value of £2,300,000. These are now complemented by the abolition of primage on a wide range of capital equipment and in a large degree also by the abolition of the Special War Duty.
The lower costs resulting from the reduction and removal of taxes and duties on consumer goods will be passed on to the public in the form of lower prices. The effect will be felt at different dates because the lower prices will not apply to stocks of goods upon which the higher rates of tax have already been paid. It is expected, however, that the penny reduction on petrol will operate almost immediately.
The adjustments consequent on the removal of the sales tax of 7tJ per cent, on clothing and household drapery will offset the upward movement in the level of clothing prices. The Prices Commissioner is now engaged on a thorough check of clothing prices, and special care will be taken to ensure that the advantages of the lower taxation are passed on to consumers quickly.
As already announced, the Commonwealth has concluded with the United Kingdom Government an agreement designed to avoid double taxation. This agreement also is expected to assist in the further development of Australian industry. A. synopsis of the agreement is given in Statement No. 10.
Much has been done in a brief time and under many difficulties to ease the burdens and slacken the restraints inevitably carried over from the war. We have expanded social and other services of great value to the community as a whole and yet have been able substantially to reduce taxation. That much remains to be done, however, we fully recognize. Consistently with the trust we hold for national security, for the reinstatement of service men and women, and for the development of facilities vital to the welfare of the community, our efforts further to reduce expenditures will be unremitting, as they have been in the past. Economy in government is a proper counterpart of efficiency in industry. Both must be pursued in a strenuous effort, shared by all, to achieve a higher level of efficiency and hence of standards of living. I move -
That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and Allowances - £8,870 “, be agreed to.
STATEMENT NO. 4.- MAIN HEADS OF WAR EXPENDITURE 1939-40
The following are the main heads of war expenditure during the seven years from June, 1939, to June, 1946:-
Notes. - (a) In addition supplies and services to the total value of £254,000,000 (excluding reciprocal lend-lease) were provided for other governments. All of this amount has already been recovered except for £26,000,000 which is allowed for in the item “ Other war and miscellaneous services “. (b) The total value of lend-lease supplies received from the United States was about $1,500,000,000.
Sales of war savings certificates amounted to £8,456,163 face value, and redemptions during the year were £5,777,164 face value.
Public Loans Raised in London, 1945-46.
No loans matured in London during the year, but options of redemption were exercised in respect of the following 5 per cent, loans due to mature in 1975 -
These were dealt with in two operations as follows: -
July, 1945- £34,311,567 - Transferred to Australia, United Kingdom holders being paid offwith moneys provided by Commonwealth
Bank, which received in exchange 31/4 per cent, securities redeemable in Australia. £60,000,000 - Converted at par in United Kingdom to 31/4 per cent, securities redeemable in London in 1965-69.
December, 1945 - £14,055,000- Converted at 98 in United Kingdom to 3 per cent, securities redeemable in London in 1958-60.
These transactions resulted in an aggregate interest saving of £2,598,000 per annum to the governments concerned.
Increase in Commonwealth debt in 1945-46 due to war, £152,404,000.
During 1945-40 the sum of £25,213,000 was provided by the National Debt Sinking Fund for the redemption of debt. The amount estimated to be available for this purpose for the current financial year is £26,233,000.
Notes. - (a) To allow Australian manufacturers of woollen goods to produce within the price ceiling for those goods, subsidies are paid to reimburse to manufacturers purchasing wool for home consumption the difference between the basic cost for wool (upon which ceiling prices have been fixed) and the average market price for the particular auction series.
The above subsidies do not include all subsidies paid in respect of primary production, further details of which are contained in Statement No. 8.
Note. - These figures do not include subsidies in regard to wholemilk, interstate movements of hay and chaff and such items as relate to primary production which are contained in Statement No. 7- Details of Price Stabilization Subsidies.
The disposals plan under the Wool Realization Act is now in operation and auctioning ofwool has been resumed. The Government, through the Wool Realization Commission, has fixed an average reserve price of 18.15 pence per lb. of raw wool for the current season.
Prior to November, 1945, the Government was subsidizing production to give the farmer an average return at the factory, equivalent to approximately1s. 7.31d. per lb., commercial butter. The Government accepted, as from 1st November, 1945, the following additional items of cost for the purposes of subsidy: -
Increase of.25d. per lb. in manufacturing costs; and
. 19d. per lb. being a capital value adjustment for live-stock.
When applied to a full year of subsidy, the increase of . 44d. per lb. (allowing for the 25d. per lb. increase in manufacturing costs) is estimated to ensure to the producer an average return, at the factory, equivalent to 1s. 71/2d. per lb., commercial butter.
In addition, the existing subsidy on dairy products is guaranteed at a level estimated to yield a return of1s. 71/2d. per lb. commercial butter equivalent at the factory until 31st March, 1947. At that date a review will he undertaken withthe proviso that returns will not be below1s. 7.31d. per1b. during the year ending 31st March, 1948.
On estimated production for 1946-47 an amount of £6,250,000 will be required for subsidy payments but it is anticipated that during the financial year, refunds of subsidy to the extent of approximately £4,000,000 will be received from the British Ministry of Food in connexion with exports between April, 1943, and June, 1946, leaving £2,250,000 to be provided from Revenue.
Apples and Pears
The sum of £856,000 is provided to meet the probable deficiency on the operations of the Apple and Pear Acquisition Scheme in Western Australia and Tasmania for the 1946 season. The crops in those States, during the 1945-46 season, aggregated 10,820,000 bushels.
There was an improvement in the export position during 1946 but the refrigerated shipping space available for fresh fruit shipments remains considerably short of normal requirements.
STATEMENT No. 9.- TAXATION REIMBURSEMENT GRANTS AND SPECIAL GRANTS TO STATES
Taxation Reimbursement Grants
In 1942 Commonwealth legislation was passed under which the Commonwealth became the sole income taxing authority for the duration of the war and one year there after. Under the States Grants (Income Tax Reimbursement) Act 1942, States vacating the field of income taxation received annual reimbursement grants based on the average of their income taxation collections in 1939-40 and 1940-41 less any arrears of income taxation received each year by the States. Provision was also made under section 6 of the States Grants (Income Tax Reimbursement) Act 1942 whereby any State might make application through the Commonwealth Grants Commission for further financial assistance from the Commonwealth if the reimbursement grants were insufficient for that State’s revenue requirements. Later in 1942, the Commonwealth, in agreement with the States concerned, established uniform entertainments taxation on a similar basis.
At a Premiers Conference in January, 1946. the Commonwealth Government indicated that it had decided to continue uniform income taxation permanently. The Premiers, whilst maintaining in principle their oppositionto uniform taxation, agreed upon a revised bastion which future reimbursement grants should be paid to the States in respect of income taxation and entertainments taxation. The revised basis of tax reimbursement grants was incorporated in the States Grants (Tax Reimbursement) Act 1946, the provisions of which became effective on 1st July, 1946.
Under the States Grants (Tax Reimbursement) Act 1946, the reimbursement to each State concerned in respect of both income tax and entertainments tax is covered by the one grant. Payment of the grant to each State is dependent on that State refraining from imposing income taxation but is not conditional on the State continuing to vacate the field of entertainments taxation.
This act provided that the aggregate of the grants will be £40,000,000 in each of the years 1946-47 and 1947-48, whilst in subsequent years the amount of £40,000,000will be varied in proportion to variations in the States’ populations and the resultant amount will be increased by half the percentage increase in the level of average wages per person employed over the level in 1946-47. The manner in which the aggreate grant of £40,000,000 will be distributed to the States in the years 1946- 47 and 1947-48 is set out in the table below. In years subsequent to 1947-48 a gradually diminishing part of the aggregate grant will be distributed in the proportions in which the aggregate grant of £40,000,000 is distributed to the States in 1946-47 and 1947- 48 whilst a gradually increasing part will be distributed in proportion to the States’ respective populations after adjustments have been made to those populations to take account of relative sparsity of population and the number of school children in each State. The effect of this formula is such that by 1957-58 the aggregate grant will be distributed solely in proportion to the adjusted populations of the States.
A comparison of the distribution of the tax reimbursement grants in respect of 1946-47 (and 1947-48) with the distribution of the basic grants under the war-time scheme is given in the following table: -
The reimbursement grants paid annually to each State will continue to be reduced toy the amount of any arrears of income taxation which may be received in that year by the State. In 1945-46 these arrears amounted to £733,550 and are estimated at £615,000 in 1946-47.
The States Grants (TaxReimbursement) Act 1946 repealed the provisions of the States Grants (Income Tax Reimbursement) Act 1942 including the provisions under section6 of the latter act whereby any State might make application under that Act for further financial assistance. In accordance with the recommendations of the Commonwealth Grants Commission, additional financial assistance amounting to £2,132,920 was made available under section 6 of the States Grants (Income Tax Reimbursement) Act 1942 to the States of Western Australia, South Australia and Tasmania in respect of 1945-46. The distribution of this additional financial assistance was as follows: -
The payment of these amounts of additional financial assistance was made to the States concerned shortly after the close of 1945-46 but the States kept their accounts for 1945-46 open in order that the amounts could be in- cluded in their revenues for that year. The amount of £2,132,920 is, however, included in the Commonwealth Budget for 1946-47.
The Commonwealth Grants Commission have
The recommendations of the Commonwealth Grants Commission have been adopted by the Commonwealth Government.
STATEMENT NO. 10.- SYNOPSIS OF THE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM AND THE GOVERNMENT OF AUSTRALIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME
The agreement is designed to cover all income which is taxed both by the United Kingdom and by Australia. The full text of the agreement has already been made public and this synopsis merely gives a broad outline of the principles and provisions of the agreement. It is not an exhaustive explanation of its terms.
The taxes covered by the agreement are -
The Commonwealth income tax (including super-tax), the social services contribution, the additional amount of tax assessed in respect of the undistributed amount of the distributable income of a private company, the further tax imposed on the portion of the taxable income of a company (other than a private company) which has not been distributed as dividends, and the war-time (company) tax.
The income tax (including surtax), the excess profits tax, and the national defence contribution.
Broadly speaking, income falls to be dealt with in two main classes -
Australia will levy full tax on profits derived in Australia by United Kingdom residents. United Kingdom will allow against its tax a credit of the Australian tax on the profits.
United Kingdom will levy full tax on profits derived in the United Kingdom by Australian residents. Australia will continue, as at present, to exempt the profits so taxed.
Shippingand Air Transport
Australia will exempt the profits of ships and aircraft owned and registered in the United Kingdom, while the United Kingdom will exempt the profits of ships and aircraft owned and registered in Australia.
Australia will exempt dividends paid by United Kingdom companies to United Kingdom residents, even though the companies’ profits are derived in Australia. The profits will, of course, be taxed by Australia.
Australia will exempt dividends paid to a United Kingdom parent company by a whollyowned Australian subsidiary company. This will place the United Kingdom parent company trading in Australia by means of an Australian subsidiary company in the same relative position for taxation purposes as a United Kingdom company trading in Australia by means of a branch. United Kingdom will tax these dividends but will give a credit to the shareholders of the Australian tax on the profits used by the subsidiary company to pay the dividend. Credit will not, however,be given for Australian tax attributable to profits used in payment of a dividend at a fixed rate on preference shares.
Australia will impose half taxon other dividends paid out of Australian profits to United Kingdom residents, unless the United Kingdom resident carries on business in Australia through permanent establishment, in which case Australia will levy full tax on the dividends. United Kingdom will tax its residents on these dividends, and will give a credit of the Australian tax on the dividends and, subject to the remarks in the previous paragraph in relation to preference dividends, will also give a credit in respect of the Australian tax attributable to the profits used to pay the dividends.
United Kingdom will exempt from sur-tax dividends paid by United Kingdom companies to Australian residents not engaged in trade or business through a permanent establishment in the United Kingdom.
Australia will tax dividends paid by United Kingdom companies to Australian shareholders but will give credit for United Kingdom tax.The credit will be calculated at the net United Kingdom rate and will be reduced by the amount of any relief or repayment to which the taxpayer is entitled under the United Kingdom law. Its allowance will be conditional upon the recipient electing to have the reduced amount of United Kingdom tax included in his assessable income.
Tax on Undistributed Income of Private and Public Companies.
Companies which are private companies under the Australian taxation law and having United Kingdom shareholders, whether carrying on business in Australia through a separate subsidiary company or a branch, will continue to pay private company tax at full rates on their undistributed income. United Kingdom public companies, whether carrying on business in Australia through a separate subsidiary or branch, will also pay full undistributed income tax on their undistributed income.
Royalties, Pensions and Agency Profits
Literary and industrial royalties (other than mining royalties), pensions and purchased annuities and certain agency profits will be taxed only by the country in which the recipient is resident. The country in which the income originates will exempt the income so taxed. In the case of mining royalties the country of origin will tax the royalty. If the country of residence also taxes, it will give a credit in respect of the tax paid to the country of origin.
Film Business Controlled Abroad and Insurance with Non-Residents.
Australia will continue to tax income from these sources and the United Kingdom will give a credit against its tax of the Australian tax paid on the income.
Governmental remuneration will be taxed by the employing governmentand exempted in the country where the officer is employed except where the officer is ordinarily a resident of the country in which he is employed, or is not in that country solely for the purposes of rendering services to the employing government.
Businessman Professors and Teachers
Where United Kingdom businessmen visit Australia for a period or periods not in excess of 183 days in any year of income, the remuneration paid to them by their United Kingdom resident employers will be exempt from Australian tax if United Kingdom tax is imposed on that remuneration. A reciprocal exemption will be granted by the United Kingdom to Australian businessmen visiting the United Kingdom. This exemption will not apply to public entertainers such as stage, motion picture or radio artists, musicians or athletes, but double taxation of these persons is obviated by the United Kingdom granting credit for the Australian tax paid by United Kingdom artists on their earnings in Australia and by Australia refraining from taxing the earnings of Australian artists in the United Kingdom.
Professors and teachers from the United Kingdom temporarily resident in Australia for a period up to two years will be exempt from Australian tax on their remuneration. A corresponding exemption will be granted by the United Kingdom to Australian professors and teachers visiting the United Kingdom.
Rents and Interest
These classes of income are not specifically covered by the agreement. The origin principle accordingly applies, i.e., the country in which the income originates has the prior right to tax. If the country of residence also taxes, it will allow a credit in respect of the tax paid to the country of origin.
Exchange of Information
Information available to the taxation authorities of each of the contracting governments will be exchanged for the purposes of carrying out the provisions of the agreement and for the prevention of fraud and for the administration of statutory provisions against legal avoidance of tax. No information is to be exchanged which would disclose any trade secret or trade process.
Extension of Agreement
The agreement may, at the request of either Government, be extended to the colonies overseas territories protectorates or territories in respect of which the Government exercises a mandate or trusteeship. The agreement can be so extended only with the consent of the other Government.
Commencement of Agreement
The agreement will apply for the current financial year, that is -
In Australia -
to income of the year ended 30th June, 1946, in the case of companies; and
to income of the year ended 30th June, 1947, in the case of individuals.
In the United Kingdom -
for the year of assessment 1946- 1947, in the case of income tax;
for the year of assessment 1945- 1946, in the case of sur-tax; and
as from 1st April, 1946, in the case of excess profits tax and national defence contribution.
Duration of Agreement
The agreement will operate for ten years certain and thereafter will continue indefinitely subject to the right of either Government to give notice of termination.
The agreement does not, however, come into actual operation until it is given the force of law in both countries.
The arrangement in force since 1921, under which each country granted partial relief from double taxation, will he discontinued.
The following paper was presented: -
The Budget 1946-47 - Papers presented by the Honorable J. B. Chifley, M.P., for the information of honorable members on the occasion of the Budget of 1946-47.
Ordered to be printed.
SALES TAX BILLS (Nos. 1 to 9) 1946.
In Committee of Ways and Means:
Mr CHIFLEY: Prime Minister and Treasurer · Macquarie · ALP
– I move - (1.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 1) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods manufactured in Australia by a taxpayer and on or after the fifteenth day of November, One thousand nine hundred and forty-six, sold by him or treated by him as stock for sale by retail or applied to his own use. (2.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 2) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods manufactured in Australia and sold on or after the fifteenth day of November, One thousand nine hundred and forty-six, by a taxpayer who purchased them from the manufacturer. (3.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 3) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods manufactured in Australia and sold on or after the fifteenth day of November, One thousand nine hundred and forty-six, by a taxpayer not being either the manufacturer of those goods or a purchaser of those goods from the manufacturer. (4.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 4) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods manufactured in Australia and sold to a taxpayer who has, on or after the fifteenth day of November, One thousand nine hundred and forty-six, applied those goods to his own use. (5.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 5) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods imported into Australia by a taxpayer on or after the fifteenth day of November, One thousand nine hundred and forty -six. (6.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that Act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 6) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods imported into Australia by a taxpayer and, on or after the fifteenth day of November, One thousand nine hundred and forty-six, sold by him or applied by him to his own use. (7.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that act that sales tax shall be not payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 7) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods imported into Australia and sold on or after the fifteenth day of November, One thousand nine hundred and forty-six, by a taxpayer not being the importer of the goods. (8.) That, in respect of goods not covered by the Third Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that act that sales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 8) 1930-1943, sales tax at the rate of Ten per centum be imposed upon the sale value of goods imported into Australia and sold to a taxpayer who has, on or after the fifteenth day of November, One thousand nine hundred and forty-six, applied those goods to his own use. (9.) That, in respect of goods not covered by the Third. Schedule to the Sales Tax (Exemptions and Classifications) Act and on the sale value of which it is not provided by that act that tales tax shall not be payable, in lieu of the rate of tax imposed by the Sales Tax Act (No. 9) 1930-1943. sales tax at the rate of Ten per centum be imposed upon the sale value of goods in Australia, including goods which have gone into use or consumption in Australia, leased by a taxpayer to a lessee on or after the fifteenth day of November, One thousand nine hundred and forty-six. (10.) That, for the purposes of the foregoing resolutions,”the Sales Tax (Exemptions and Classifications) Act” mean the Sales Tax (Exemptions and Classifications) Act 1935- 1946 as proposed to be amended by the Sales Tax (Exemptions and Classifications) Bill (No. 2) 1946.
The sole purpose of these motions is to reduce the general rate of sales tax from 121/2 per cent, to 10 per cent, on and from the15th November, 1946. The rate of 121/2 per cent, which applies to most of the goods in the taxable field, has been in force since the 1st May, 1942, when substantial increases of the rates were made in order to assist in raising the revenue needed for war purposes.
The rates of tax at present in force are:71/2 per cent, in respect of clothing and household drapery, 121/2 per cent, in respect of the general field of goods, and 25 per cent, in respect of goods of a less essential character which arc specified in the third schedule to the Sales Tax (Exemptions and Classifications) Act 1935-1946. It is proposed in other legislation to amend that act to authorize exemption in respect of the clothing and drapery which has hitherto been taxed at the rate of 71/2 per cent. That rate of tax has not been applied to any other classes of goods, and it will, therefore, lapse on and from the 15th November, 1946. Thus, instead of three rates of tax, only two will be in operation on and from the 15th instant, namely, 10 per cent, in respect of the general field, and 25 per cent, in respect of those goods which remain in the third schedule.
The annual loss of revenue resulting from the reduction of the general rate from 121/2 per cent, to 10 per cent, is estimated at £5,000,000. For the current year the loss will be approximately £2,900,000. This reduction will provide a measure of relief in respect of such essential goods as household furnishings, cutlery, crockery, and other domestic utensils, motor vehicles, tools and business equipment.
SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL (No. 2) 1946
Motion (by Mr. Chifley) - by leave - agreed to -
That leave be given to bring in a bill for an act to amend the Sales Tax (Exemptions and Classifications) Act 1935-1946.
Bill presented, and read a first time.
Mr CHIFLEY: Prime Minister and Treasurer · Macquarie · ALP
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to allow relief from sales tax on and from the 15th November, 1946, by the granting of certain further exemptions, and also by the removal of certain goods from the Third Schedule to the Sales Tax (Exemptions and Classifications) Act, thus causing the rate of tax thereon to be reduced from 25 per cent, to 10 per cent., which is the new general rate which will operate, by virtue of separate legislation, on and from the 15th November, 1946.
A statement is being circulated among honorable members setting out particulars of the goods affected. Foremost among the new exemptions is that which relates to clothing and household drapery. Hitherto there has been a special rate of 1 per cent, in respect of clothing, drapery, soft furnishings and yarns which were coupon goods as at the 13th .September, 1945. The Government has had due regard to the fact that the cost of clothing at present involves a burden upon the people, especially where large families are involved, and it is proposed, therefore, that there shall be a complete exemption frOm sales tax of all clothing, drapery, soft furnishings and yarns which have been subject to the special rate of 7$ per cent. There are also certain kinds of industrial clothing which were not coupon goods, and which, therefore, bore tax at the general rate of 12£ per cent. There appears to be good reason why these goods should be included in the proposed new exemption. The bill, therefore, provides for the exemption of certain specified classes of industrial clothing. Perambulators and comparable goods are also being included in the schedule of exemptions, with the object of reducing the cost of these essential articles.
Further consideration has been given to claims made for the exemption of the very few classes of building material which now remain taxable. There are apparently some people who believe that sales tax on building materials still adds greatly to the cost of housing. There is no foundation for this belief. Most building materials are exempt. The list of exempt materials is now being extended to cover paint and associated goods, in addition to wallpaper. It is considered that freedom from tax now applies to not less than 95 per cent, of the value of the materials used in the construction of an average home.
As honorable members are aware, the principal foodstuffs are already exempt from sales tax. However, action is being taken to restore to the exemption schedule certain items which were exempt prior to the 22nd November, 1940, but which were taken into the taxable field at that date because of the unprecedented need of revenue for war purposes. The most important of the foodstuffs which are now to be restored to the exemption schedule are meat pies and meat pasties. These represent a normal portion of the regular daily diet of a considerable section of the people, and are supplied in great numbers through canteens which cater for workers in large industrial establishments. These goods are considered, therefore, to have a strong case for exemption, so that they may be placed on the same footing as the basic foodstuffs.
Numerous requests have been made to me from time to time for exemption from sales tax of show ribbons and certain printed matter for the use of agricultural societies. The bill provides for the granting of these requests. The opportunity has also been taken to restore the former exemption of mining machinery and equipment. Although persons engaged in the mining industry gained substantial benefits from the recent exemption of aids to manufacture, the terms of that exemption are not sufficiently wide to allow freedom from tax on all the goods which formerly qualified for exemption when used in the mining industry. This bill, now restores to that industry the full measure of exemption previously enjoyed by it.
Among the goods which are being transferred to the general field and which will, therefore, be reduced in rate from 25 per cent, to 10 per cent., perhaps the most important are watches and clocks, musical instruments, gramophones, bath and toilet soaps, and tooth pastes. Rowing clubs throughout Australia will be interested in the fact that a similar reduction is being granted in respect of skiffs, dinghies and other craft for sport and recreation. Rowing clubs are thus being placed on the same footing as regards sales tax as other athletic or sporting bodies. Details of the other concessions to be allowed will be found in the statement which has been circulated.
The annual loss of revenue resulting from the concessions granted by this bill is estimated at £11,000,000. The loss for the current year will be approximately £6,400,000. The total loss of revenue from sales tax, taking into account the reduction of the general rate by virtue of other legislation from 12£ per cent, to 10 per cent., will be £16,000,000 per annum, or £9,300,000 for the current year. The bill is confined to the allowance of relief from tax, and I have no doubt, therefore, that it will give satisfaction to all honorable members.