18th Parliament · 1st Session
Mr. Speaker (Hon. J. S..Rosevear) took the chair at 3 p.m., and read prayers.
Motion (by Mr.Chifley) agreed to- -
That the House, at its rising, adjourn to to-morrow,at. 10.30 a.m.
Forty-hour Week - Basic Wage:
– Can the Minister for
Labour and National Service state the present position in relation to hearings by the Arbitration Court of the claims by the Amalgamated Engineering Union, whose members in the metal trades in Victoria recently resumed work, and in respect of the 40-hour week and the basic wage?
-The hearing of the consolidated claims for a 40-hour week is still proceeding. The 19th May has been fixed as the date on which the taking of evidence willbe completed. It is; anticipated that the Acting Chief Judge will then begin the hearing of claims by the Amalgamated Engineering Union, in respect of which an agreement was. reached as a part of the terms of settlement of the recent metal trades dispute in Victora. Although the business of the court is very congested, and one cannot, therefore, be sure, it is understood, from statements that have been made from time to time by the Acting Chief Judge, that he will ask the parties to the 40-hour week case to try to agree to a curtailment of their final addresses, at the conclusion of which the court will’ have to consider and’ later pronounce its decision!. It, is expected’ that the1 court will proceed’ with the? basic wage inquiry as. soon- as: a suitable opportunity to< do so- is presented:.
Mi-. TURNBULL.- Can the Treasurer inform the House of the estimated increase of revenue from taxes which would be received during the financial year 19.47-4S if- the basic wage- were increased by £1 a week? If he- is unable to supply the figu-r.es at this, stage, will he have investigations made and maher astatement on. the subject later ?
– I shall ascertain what information is- available- em th’e subject mi. supply it to- the1 honorable- member:
Taxation - Meat Prices-
– According to press reports-,, the Gov.eiinm.ent seems to> be firm in: its. decision to grant, exemption from: income tax only in, respect of food.’ dona-tions, te, the United’ Kingdom through- the agency of the Australian, Bed GrossSociety, and that, the- Food for Britain Appeal kas been discontinued- until donations to< it also have- been granted- income; tax exemption. . In view of thelargermeasure of public support that is accorded, to the Food for Britain Appeal,, will the Treasurer reconsider his decision, and grant: tax exemptions! in- respect of don,a.tions to* that appeal’, so- that maximum! supplies; may be sent to- the- people of Britain! in the present critical period?
– This matter has air ready been considered by the Government. From, time to- time representations have, been made By various bodies for income tax rebates to donors to various funds. I understand that the Australian Red Cross. Society is conducting- a campaign to obtain fo.od’ for Britain. Donors to that, international’ organization have always enjoyed a.n income tax rebate, and no inquiry is’ ma,d’e as to. the way in which its funds are expended. I see- no- reason, to depart from a general principle which has’ been followed’ by successive, governments..
Mir.. HOWSE* - I ham just- received, a telegram from Mk.. Jack Harris,, the. president of the Orange. Graziers Asso- ciation, Informing! me that at a> meeting: last Saturday, the association decided to ask that gifts’ of meat to the Food for Britain Fund- be exempt from income tax. As. this, is a live question, not only in the. Orange district, but also throughout the- western areas, of Kew South “Wales,. I ask. the Treasurer if he wild1 give consideration; to tha* request?
Mb. CHIFLEY. - I assume that the honorable member means that whereglaziers donate- meat to. the Food for Britain- Fund and receive a .price- for it the- police so received should he exempt from income tax.
– It is a1 gift:
– Does that mean that the grazier, does not receive any return for the meat ? If that is so he would’ receive no income that could be taxed. However, where graziers donate meat and receivesome payment, such payment cannot be exempt from income tax.
Mi-.. HUTCHINSON- Is the Minister for. Coniiiner.ee and Agriculture- aware that- the- export price is- considerably below the. market price for fat stock, in. Aus* tralia?: Is- he- also aware that bo great quantity of fat stock can come- forward fcu export unless graziers, send forward, stock that would, normally lae held ascapital stock ?; In these circumstances, would not farmers and graziers who supply stock to meet’ Britain’s needs be asked to make a sacrifice- not shared by any other section off Mie Austradian people?
– Ord’er !: The- honorable member is debating the question and inviting- the Minister to debate it.
– Would it- not be more equitable .for the Government to buy at market prices - -
– Order ! The-, honorable member moist reconstruct his question., He is debating: thic matter and asking; the- Minister to debate it,, and. that- iis not permissible.
– As- the- export price for meat is- march- tower’ th’an’ theprice on- the- Australian’ market, wall, the Minister ensure that stock- coming forward for export to: Britain shall bev paidfor: at; current market prices so* that - producers) shall not h-a-re t’a make- ai greater sacrifice than that of any other section of the Australian people contributing to the Food for Britain Fund?
– I am aware that prices for stock sold locally are somewhat higher than export prices. I consider that graziers and farmers who, of their own volition, desire to earmark theirstock specifically for export to Great Britain should not be frustrated in their good intentionsby the Commonwealth Government, any more than should other charitably disposed people who voluntarily send food parcels to Britain and contribute to Lord Mayors funds, appeals by the Australian Red Cross Society and so forth. Indeed, if the Commonwealth Government were to interfere at this stage with a scheme which arose in the first place, I understand, from the good nature and goodwill of New South Wales graziers’ organizations, supported by the New South Wales branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, I can well imagine the outcry and indignation that would arise throughout Australia. In these circumstances, I would not contemplate for a moment taking any action to deprive the graziers of Australia of an opportunity to carry out a well-intentioned scheme, involving voluntary sacrifices, to help their kinsmen in Great Britain.
– As many farmers and others who are dependent upon the catchment of water from roofs for domestic use are being greatly inconvenienced by the prevailing shortage of galvanized i ron, is the Minister for Works and Housing in a position to ensure that larger quantities of galvanized iron shall be made available to persons who are building homes outside the reticulation areas in country towns? If the Minister can ensure greater supplies to them by granting priorities will he do so; or, alternatively, will , he discuss the matter with the State authorities or the manufacturers?
– The distribution of supplies of such materials as galvanized iron is within the jurisdiction of the States. Allocations are made to the States on a Commonwealth-wide basis, and the
State authorities then make allocations within their boundaries. As a farmer, I know the need for galvanized iron for roofs and tanks, and I shall certainly take the matter up with the State authorities as requested by the honorable member.
– In view of the success which has attended the inauguration of the cotton-growing industry in north Australia, and Australia’s dependence on overseas supplies of cotton, can the Minister for Commerce and Agriculture say whether the Government has any plan for the further extension of this important industry? Further, as. a plentiful water supply is necessary for cotton growing, will the Government assist any State government requiring funds for irrigation and water conservation projects designed to stabilize this industry?
– The development of the cotton-growing industry in north Queensland is being undertaken by the Commonwealth and Queensland Governments. As to the granting of financial assistance for irrigation and water conservation schemes to assist cottongrowing, I shall obtain information on the subject and furnish it to the honorable member as soon as possible.
– Has the Prime Minis ter seen reports of threats by Mr. Thomson, secretary of the Building Trades Federation, that the federation would call on 13 affiliated unions to join with it in declaring “black” work on the guided weapons testing range, and that if they agreed to do so, no union labour would be available? Further, has he seen the reported statement by another Labour leader, Mr. King, that, Communists would sabotage the venture if they thought it was in Russia’s interests to do so? Can the right honorable gentleman say whether construction work has begun on the testing range and, if not, when work will begin? Is it correct, as reported, that the Minister for Post-war Reconstruction said that the Government will meet any difficulty when it arises? Does not the Prime Minister consider that it is more desirable to prevent trouble, than to allow it to develop and then deal with it, and will the Government promptly take all steps essential to the maintenance of the construction programme decided on, and announce its decision for the information of the unions and all other persons concerned ?
– The honorable member for Balaclava has canvassed the opinion of three different people. I have seen in the newspapers some statements about certain threats made by representatives of some building trade ‘ unions in regard to work on the guided weapons testing range. All I have to say is that the Government of the United Kingdom has entered into an agreement with the Commonwealth Government to do experimental work, and that, work will be done.
– I desire to address to the Prime Minister a question relating to the reported ban by Communist-controlled unions on the construction work associated with the range for experimenting with guided weapons in Central- Australia.
– Order ! I believe that a. similar question has already been asked.- “Was the honorable member in the chamber earlier?
– Yes. My question relating to that subject, deals with a different aspect from that raised by the honorable member for Balaclava. In view of the latest demonstration of organized Communist activity obstructing Government policy, and having regard to the revelations of the royal commission in Canada on sinister motives underlying Communist activity in that country, will the Prime Minister now reconsider the appointment of a royal commission in order that Communist activities in Australia may be fully investigated?
– The main point of the honorable member’s question, apart from the propaganda in which he engaged
– Was the propaganda directed against the Government or against the activities of Communists?
– Against the Government.
– Will the Prime Minister agree now to appoint a royal commission to inquire into the activities of the Communists?
– The main point of the honorable member’s question was to ascertain whether the Government would now be prepared to appoint a royal commission to inquire into the activities of Communists in Australia. Some time ago, I replied to a similar question asked hy the honorable member for Richmond. The activities of any organization, which are likely to be detrimental to the interests of the community or the safety of the country, are constantly under review and examination by the Commonwealth Investigation Branch, which is administered by the Attorney-General. I see no necessity for having a further investigation, and1, therefore, I have no need at this stage to consider the appointment of a royal commission as suggested by the honorable member for Fawkner.
– Can the AttorneyGeneral say whether it is- true that production at Abermain No. 1 Colliery has been held up since the 31st March because of an inter-union dispute, and that the jurisdiction of M.r. Gallagher, chairman of the Joint Coal Board, had been challenged, and the matter is now before the High Court on appeal? Is it also a fact that to-night at 12 o’clock the .Federated Engine-drivers and Firemen’s Association of Australia will call its members out unless they receive an assurance that they will come under the jurisdiction of the Joint Coal Board ? If so, will the Attorney-General bring in regulations to provide that those craft unions which desire to come under the jurisdiction of the Joint Coal Board will be allowed to do so, and thus avert a stoppage?
– It is true that a demarcation dispute between two unions was dealt with by Mr. Gallagher, and that the matter went to the High Court on appeal, which has reserved its decision on the question of jurisdiction. T was not aware of the threat of certain craft unions to stop work, but I remember that the craft unions referred to were very insistent some time ago that their industrial conditions should be settled, not , bythe specialtribunal in the industry but by the Arbitration Court. I shall look into the matter, and the honorable member willbe supplied with any additional information which I can obtain.
- Mr. Cain, the Premier of Victoria, is reported in the press to have saidthat repeatedly he has drawn the attention of theCommonwealth Government to theplight in which industries in Victoria are placed by reason of the dwindling supplies of coal from New South Wales - a position which, he has claimed, apparently is not appreciated by the Joint Coal Board. Has the Prime Minister receiveda communication in those terms, and are they factual.? If so, willhe confer with the Minister for Supply and Shipping and the board with a view to ensuring that Victoria shall receive its proper quota of coal from New South Wales, and thus enable its industries to continue to function?
– Last Friday, the Premier of Victoriainformed me by telephone that he wasforwarding to me a letter complaining of theinadequacyof the coalsuppliesthathad been forwarded from New South Wales to Victoria.I amnot awareofhaving yet seen that letter. The purport of Mr.Cain’s statement tome was that thefigures which had been placed before him indicated that the quantity ofcoal delivered to Victoria since the 1st January ofthis year was 1l6,000 tons lessthan had been delivered in thesameperiodlast year. Mr.Cain also said that itwas necessary that 570 trucksof wheatshould be sent from Victoria to other States, presumably to New South WalesandQueensland, and, in orderthatthis might be done,he asked me to use mybestendeavours tohave the stocksofcoal in Victoria augmentedby anincreaseof the supplies that aresent forwardfrom New South Wales. That afternoon, I discussed thematterwith the Minister for Supply and Shipping, whopromised that he would consider it immediately, in conjunction with the Joint Coal Board, with a viewtodeciding means whereby the supplies of coal forwarded from New South Wales to Victoriacould be augmented. I shall try to let the honorable member have any further information which results from that investigation.
Mr.FADDEN.- Has the Treasurer conveyed to the Lord Mayor of Brisbane, through the AustralianConsul-General in NewYork,a premptory request to ceasenegotiations for a private loan on behalf ofthe BrisbaneCity Council? Is the Commonwealth Governmentadvised byunderwriters inwhose interest itisto preventprivatefinancingofthetype AldermanChandler wasendeavouringto negotiate? WilltheTreasurer’saction resultin heavier interest charges, making therefundingof theoriginal loanmuch moredifficultandcostly in October next? If so,will theTreasurercompensatethe Brisbane City Council adequately for the extra costs incurred by this actions?
Mr.CHIFLEY- It isperfectly true that Ididconveyby cable to ourrepresentative inthe UnitedStates of America the factthat Istrongly objected to loans being arranged in thatcountry except in general concert with what is required by the States and theCommonweal th. It had been reportedto me that theLord Mayor of Brisbane, Alderman Chandler, had entered into negotiations for the raising of some kind of priva te loan, and Ibelieve thatthis is, if notirregular, at least somethingnot inthe interestsof the people of Australia, so far as general loan raising is concerned. In answer to the right honorable gentleman’s second point, we donot propose that the Brisbane City Council should be compensated. With respect tohis third point, I am unable to say atthe moment whether delay in the conversion of these loans is likely to involve the Brisbane CityCouncil in additional liability for interest.Speaking from memory, there are three loans coveringQueensland issues inthe United States of America to be converted beforetheendof theyear, and it maybe that dueto propermanagement in placing the loans onthe market the BrisbaneCity Councilmay derive a greater advantage than it wouldgain had the loans been floated . separately. Iam firmly of opinionthat we should not encourage individual organizations to attempt to negotiateloans, but that all loan transactions should be done on a proper basis* having regard to the entire financial requirements of the Commonwealth and State- Governments.
– With respect to restrictions placed on the remittance of small sums of money from Australia to Great Britain, I ask the Treasurer whether it is not possible to arrange for (he despatch of amounts, such as payments for copies of birth certificates and payments to Friendly Societies, to he made through a Money Order Office, instead of by draft through the Commonwealth Bank. I point out that in this way considerable savings could be made by persons who- are obliged to remit trifling amounts to- Great Britain in order to meet such payments.
– It is possible for people who desire to send small sums of money to the United Kingdom to do so hy means of money orders. Some confusion appears to exist in the minds of many people who believe that they must take special steps in order to meet exchange requirements. I. shall supply to the honorable member details of the exact position and the approximate maximum amounts which can be sent to the United Kingdom by money order.
BUNNERONG Po w eh House Dispute.
– Can the Minister for Labour and National Service state what prospects there may be of an early decision in connexion with tha industrial dispute a* Bunnerong Power House? Is the honorable gentleman able to say why a satisfactory settlement of the. dispute cannot be arranged?
– As the result of lengthy negotiations a satisfactory agreement has been arrived at between the employees and the management of the Bunnerong Power House. The agreement has been endorsed by the State arbitration authorities and has been sent to acting Chief Judge Drake-Brockman of the Commonwealth Arbitration Court for endorsement. It is now in the hands of the Chief Judge and I am sure that his decision will be given in the- very near future.
– I ask the Minister representing the Minister for Trade and Customs whether it is a fact that the Government decided to release chicory from control- as from the 9th May last, and that its decision to do so was gazetted on that date? Was this action taken, without consulting the Chicory Board ? Is it the practice of the Government to ignore completely those elected by the growers to negotiate on their behalf, when making such important decisions affecting primary industries? Was the Chicory Board given notice of this decision or did it receive its first notification from the Gazette?
– Representations have already been made to me in regard to this matter. They have been conveyed to the Minister for Trade and Customs whom, I have asked to supply me with information in regard to the allegations made. I shall follow up those representations by bringing- to the notice of the Minister the questions asked by the honorable member’ this afternoon.. I hope to be able to give him the information he seeks at art early date.
– I have received a number of letters, from constituents who assert that artificial foods for infants are virtually unprocurable in the metropolitan area of Western Australia. I ask the Minister representing the Minister for Health whether he will consult with his colleague to ascertain whether it be possible for a reasonable allocation of shipping space to be made for the transport of these foods to Western Australia, and whether some space can be allocated on Trans-Australia Airlines airliners for this purpose, the extra cost for air transport being met by the Department of Health?
– I shall consult with the Minister for Health to see whether additional quantities of these foods can be made available in Western Australia. When similar shortages have occurred in the past it has generally’ been found practicable to- devise improved methods of distribution.
Proposed L crease of Membership.
– Is it true, as reported, that the Government is considering increasing the membership of the Commonwealth Pa.rlia.ment? If so, when will honorable members be informed of the decision of the Government in this matter?
– The question a* to whether there should be an increase of the numbers of members of the Commonwealth Parliament will be considered by the Government within the next couple of months. The subject has not yet been considered by Cabinet. I regret I am unable to give the honorable member a forecast of what the ‘Government’s, decision will be.
Purchase op New Premises.
– Wil] the Treasurer disclose the sum paid by the Commonwealth Rank for the building known as Somerset House, No. 9 Martin-place, Sydney? What was the Valuer-General’s valuation of the premises? Is the Treasurer aware that the former owners of Somerset House have now purchased Gladstone Chambers. 90 Pitt-street, and have served notice to quit on the tenants? As this will mean the loss of good-will for those tenants, some of whom have been in the building for more than 50 years, will the Commonwealth Bank compensate them or alternatively, provide them with accommodation similar to that which they now occupy ?
– I arn aware that the Commonwealth Bank, because of the necessity to secure additional accommodation for its ever-expanding business, has acquired Somerset House. This has been done not as a result of any action by the Commonwealth Government, but in accordance with the usual business procedure of the bank. I do not know the price that the bank has paid for the building, nor am I aware of the other factors that the honorable member- has mentioned. The matter was not referred to me because it was purely a financial transaction carried out by the bank itself. However, I shall dismiss the matter with the
Governor of the bank, and ascertain what information can be made available to the honorable member.
– I ask the Minister for Works and Housing whether it is true that roofing tiles are being exported from Sydney to New Zealand, apparently, to obtain the price ruling in that country which is higher than the. figure fixed by . the Prices Commissioner for Australian sales. If so, can the Minister say what export licences have been granted for this purpose, and as tiles are available for export, what steps does the Government- propose to make them available for the many citizens of this country who need them urgently?
– I am not aware that tiles are being exported from this country, but I shall consult with the Minister1 for Trade and Customs on the matter, because it would be necessary for his department to issue export licences for this purpose. Frankly, I do not think ir would be possible for tiles to he exported and sold in New Zealand at competitive prices because of the substantial freight charge that would be involved. For the last two years, the Government has been doing everything possible to encourage the manufacture of both the Wunderlich type of tile, and concrete tiles to meet local demands.
– Is the Attorney-‘ General able to inform, honorable member’s what stage has been reached in the case ti] at has become -known in wheatgrowing circles as the “ Just Price for Wheat case”? Has the Commonwealth Government altered its defence in this case, and if so, on how many occasions?
– Order! Is this case sub judice?
– Then the Minister need not reply to the question.
– In view of the substantial increase of the cost of new motor vehicles since before the war, will t.lie. Prime Minister have the pegged 1 1 rices of second -hand cars reviewed? Under the present system, all motor cars of the same model,, regardless of their condition, can be sold at the ceiling price, and I should like to know whether it be possible to institute a system under which m higher price could be charged for vehicles in good condition?
– The honorable member asks that, as the prices of nev motor vehicles have been raised, the Prices Commissioner re-examine prices fixed by him for second-hand motor vehicles ?
– I will discuss the matter with the Prices Commissioner.
– Can the Minister for Transport inform, me how many motorcars have been released in Australia in ihe last twelve months that were either entirely American-built, or had chassis built in the United States of America or Canada? How many have been released ro government departments and to private persons? Will the Minister ascertain the government departments concerned and the number allocated to each’
– I will let the honorable member have that, information as soon a*possible.
– Can the Minister for Repatriation say whether arrangements have been made to remove to Heidelberg Hospital by the 26th June all patients, except tubercular patients, at the Caulfield Repatriation Hospital?
– The Repatriation Commission has almost completed arrangements to take oyer the Heidelberghospital. Some patients will be transferred from the Caulfield Repatriation Hospital to Heidelberg, but it is not proposed to close the Caulfield hospital. It is likely to be needed by the Repatriation Department for the next couple of years, lt, is not true that all patients except tubercular patients are to be transferred. They are not likely to be for some time.
– In common with other honorable members, I have recently received a number of complaints from friends and relatives of patients in Caulfield Hospital, in regard to the proposal to transfer those patients to Heidelberg Hospital. ‘ Can the Minister for Repatriation. state what percentage of the present inmates of Caulfield Hospital it’ is proposed shall be transferred to Heidelberg Hospital in the near future?
– I cannot say what percentage of patients has been transferred from Caulfield Hospital to Heidelberg Hospital, nor do I know at the moment what number will finally be transferred, but I can say that there has been, considerable misrepresentation and misunderstanding in regard to the position. Press reports have stated that Caulfield Hospital is to be closed, and is to be taken over by the Government of Victoria. There is no truth whatever in such reports. The matter has never been dis-“ cussed with the Repatriation Commission or myself by either the Government of Victoria or any member of it. I do not know the source of these reports. Both Caulfield and Heidelberg Hospitals are under the jurisdiction of the Repatriation Commission and myself, and it is proposed that that is where they .shall remain for some time to come.
– Is it, a fact that, when Australian women go overseas to join their husbands in Great Britain but are unable to do so because of desertion, the Commonwealth authorities .will not permit them to receive assisted passages back to Australia?
– The honorable gentleman has been misinformed. The position in regard to Australian women who have married British, American or Dutch servicemen and have joined their husbands in their place of domicile is very simple. They go to their husbands’ countries at the expense of the governments .concerned.- If they are unhappy and desire to come back to Australia, we attempt to assist them when the circumstances warrant such help. The Commonwealth Government has. assisted a number of Australian, women in this way. Many of them - I say many because the number is considerable - are already in Australia, and others are coming back. The schemes which the Commonwealth Government negotiated with the British Government for free .and assisted passages to Australia relate only to citizens of the United Kingdom who were normally resident in the country in 1938. They cannot be made to cover people who have gone to Great Britain within the last few years; they refer to people who are not Australian citizens but who were born in the United Kingdom or who were -domiciled there sufficiently long to be regarded in 1938 as British subjects. There are no complaints on the -files of the Department of Immigration of the nature referred to by the honorable member. If the honorable gentleman knows of any woman in necessitous circumstances who wants H> return to Australia, the department will take up the matter of her .repatriation with her parents, and, if necessary, will make monetary advances to help her.
– I have received a letter from an old-age pensioner, whose wife alao is a pensioner, who. for reasons of health, was compelled to sell his home and migrate to a district where the climate was more favorable to his condition. Naturally he experienced some delay in obtaining a building Mock and in building a home. He has done the building work himself, but is not yet able to occupy the house because of the shortage of certain roofing materials. He has now received from the pensions authorities a notification that, unless the house is occupied by the 1st June, the pensions of both himself and his wife will be reduced. “Will the Prime Minister consider taking immediate action to empower Deputy Commissioners of Pensions to set aside the provision’s governing the amount of pension payable in cases in which lack of home ownership can be dearly shownto be due solely to the shortage of building materials’?
– The honorable member will, understand that a number of border-line cases arise in connexion with this particular matter., and sometimes a little deception is practised. I shall .obtain the details of this -case from the honorable member, and consult with the Minister for Health and Social ‘Services to ascertain whether an injustice is being done in this instance,
– In view of the decision of the Government to continue the potato contract system in Tasmania to cover the 1947-48 season, will the Minister for Commerce and Agriculture give further consideration to the extension of the apple and pear acquisition scheme for the 1947-48 season, as it appears certain that the shipping position will not meet the requirements of growers for the export of apples and pears ?
– It is true that the’ Government has decided to extend the potato contract marketingscheme for the 1947-4S season. Should it be shown, that it is also necessary to extend the operations of the Apple and Pear Marketing Board - that decision would be a matter of Government policy - I have no doubt that the Government will give to that matter every consideration.
– I have received from constituents a number of complaints of delay in the issue of their income tax assessments. One woman who has not received an assessment since the year 1942-43, has asked me if I could persuade the Treasurer to have the matter brought up to date. Another constituent informed me that eleven months have elapsed since he submitted his return and he has not yet received his assessment. This man is entitled to a refund, and he intends to use it -to defray medical expenses incurred as the result of a wax disability. ‘Can the Treasurer inform me of the cause of the delay in dealing with these matters? Is it due to the complicated method of preparing assessments?
– Most of the complaints which have come to my notice have emanated from people who have received their assessments. As I explained to honorable members some time ago, the lag in the issue of assessments is due principally to the absence on war service of some thousands of officers of the Taxation Department for a number of years. Since the war ended these officers have been returning to duty, and I am assured by the Commissioner of Taxation that every effort is being made to overcome the back-lag of assessments, I have never heard of assessments being in arrear, as far as 1942-43, and I think the matter mentioned by the honorable member must be an exceptional case.
Mr.harrison. - It is not exceptional so far as businesses are concerned, because I can give the names of half a dozen firms whose assessments are three years in arrears.
– I know that some assessments for the financial year 1944-45 have not yet been issued, but I will take up the matter with the Commissioner of Taxation and forward a statement of the position to the honorable member.
– Is it true, as reported, that the Prime Minister has replied to an invitation of the League of Ex-servicemen, Adelaide, saying that he regrets that he is unable to attend the meeting which that body is convening to discuss subsistence claims of Australian prisoners of war ? If so, is it possible for him to attend or to be represented by a Minister at the meeting to be held during June or July next?
– I did receive such an invitation, and although I cannot remember all the details, my recollection is that I was invited to attend a meeting to bo held on the 28th May, in company with the Minister for the Army. I do not know anything of a meeting to be held in June or July. The letter intimated that invitations had also been issued to the honorable member for Wimmera, the honorable member for Barker and, if I remember correctly, the honorable member for Balaclava. The purpose of the meeting, as conveyed to me, is to discuss the subject of payment of subsistence allowance to Australian prisoners of war. I informed the gentlemen concerned that it would not be possible for me; to attend during May because Parliament was sitting, and I added that as they had intimated that a question of government policy was to be discussed at the meeting and that an invitation had also been sent to honorable gentlemen who have opposed the Government’s policy on this matter, I did not propose to attend. It is not my practice to attend any public meeting where government policy is to be debated.
– Having regard to the power which this Parliament possesses to pass laws relating to marriage and divorce, and to the fact that each of the six States in Australia has a separate act dealing with the subject, I ask the Attorney-General whetherthe Government will introduce legislation to deal uniformly with it throughout Australia, presented in such a way that it may be debated as a non-party measure?
– Preparatory work in connexion with a uniform law in relation to marriage and divorce has been undertaken by my department, and is still proceeding.The matter will come before the Government for consideration in due course, and I am sure that it will then be treated, as are all matters of that kind, in . a non-party spirit.
Dismissal of Officials - Rationed Goods to Cafes
– Four weeks ago, I asked a question concerning the dismissal of certain officials from the Prices Branch, and subsequently I asked a question relating to the ability of certain cafe proprietors to obtain rationed goods. The Government promised that both matters would be investigated. Will the AttorneyGeneral state whether the inquiries have yet been completed and, if they have, what action is proposed by the Government ? If those concerned are not moving expeditiously enough, will the right honorable gentleman have the matter expedited ?
– In. respect of these matters^ undertakings were given and inquiries have been almost completed. I have perused an interim report on one aspect, and wish that I could read it to the House, but I do nol; think- that I should do so until I have received a full report
Motion (by Mr. Lemmon) agreed to -
That leave be given to bring in a bill for an act to amend the War Service Homes Act 1918-1947, and for other purpose’s.
Bill presented, and read- a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to expedite the fulfilment of Australia’s obligation to provide war service homes for the 20,000 applicants who have already made applications and to the many thousands who will apply for such homes in the next few years. The amendments provided in the bill are divisible into five principal categories. The first amendment provides for the abolition of the position of Commissioner and the creation of a position of Director of War Service Homes in the Department of Works and Housing, and also for the transfer of the war service homes staff to that department. This will result inthe immediate availability of wide technical and administrative knowledge and experience, which will be particularly valuable in group building, which is essential if applicants are to be supplied with homes within a reasonable period.
The second amendment provides for the acquisition by the Commonwealth of materials required in the construction of war service homes. This power is necessary to ensure that ex-service men and women shall receive that priority to which they are entitled. The authority is vested solely in the Minister.
The third amendment will increase the maximum cost to the Commonwealth of a house, and the land on which it is erected from £1,250 to £1,750. This is necessary to permit of the erection of a home of a reasonable standard with accommodation for a man with more than one child in those States in which the building costs are the highest. If we are to expedite the erection of war service homes, it is important that the Commonwealth shall be in a position io undertake group building without delay. , Having regard to the present cost of building, particularly in New South Wales and. Victoria, group building could not be commenced, even on the land, purchased at cheap rates by the War Service Homes Commission, without exceeding the maximum of £1,250 provided in the present act. Although this maximum will not necessarily be the cost of the home and the land, it is essential that in the provision for group building a number of homes shall be erected with sufficient accommodation, for a man with a family of more than one” child. The sum of £1,750 fixed as the maximum by the amendment is based on experience of building costs and land values over the last twelve months, and need not always be used.
The fourth amendment provides for an increase of the amount of the advance which may be made under mortgage. It relates to advances under mortgage to a man who is in a position to deposit at least 10 per cent, of the total value of the property in respect of which the advance is to he made. He is not limited to a 10 per cent deposit. Under this provision a . home of much higher value than the advance which will be made by the Government may he built,- but it is considered desirable to limit the Government’s advance to £1,-600. As the Government will, among other provisions, be asked to discharge encumbrances on existing homes the maximum of the advance is being increased from £1,250 to £1,500.
The fifth amendment is to provide for a minimum, as well as a maximum, deposit from those persons who propose to undertake the responsibility of purchasing a home costing more than £1,250, under the rent purchase system provided in the act. The present act leaves to the administration the decision as to the amount of the deposit in rent purchase cases, but imposes a maximum of 5 per cent. It is considered that in view of the increasing costs and values of homes, it is necessary for the Government to ensure that an applicant shall not undertake the obligation to purchase a home valued at more than £1,250 unless he is in a position to deposit the full 5 per cent. The amount involved and the financial implications are considered to bo too great. to he left to administrative decision. The remaining amendments are complementary to the amendments referred to above, and do not involve any new principle.
– Oan the Minister say what rate of construction is expected ?
– The rate of construction will depend on the availability of labour and materials, and on getting contractors to undertake group construction. Under the present arrangement tenders are called for single houses, and there is not sufficient continuity of work to attract contractors to undertake mass construction. It is hoped that the construction of groups of buildings, not necessarily houses, will guarantee continuity of work and thus enable houses to be built more quickly and more cheaply.
– Is it proposed to construct homes for war widows who at present cannot get finance to build homes?
– That is not proposed by this legislation. Already there is a shortage of 20,000 war service homes, and the Government is of the opinion that before widening the field some of the leeway should be overtaken.
Debate (on motion by Mr. White) adjourned.
Debate resumed from the 9th May (vide page 2203), on motion by Mr. Chifley -
That the bill be now read a second time.
Upon which Mr. Fadden had moved by way of amendment -
That all the words after “That” be left nut with a view to insert in lieu thereof the following words: - “ the bill be withdrawn and redrafted for the purpose of adjusting theglaring anomalies against the family manwhich are contained in it. and for the purpose nf substituting a straight deduction system in lion of the present cumbersome and unfair rebate system.
.- I support the amendment moved by the Leader of the Australian Country party (Mr. Fadden) in a. well-reasoned speech in which he analysed Australia’s financial position, and clearly demonstrated that taxes could be reduced. When suggestions made by the Opposition are ignored as is often the case, honorable members experience a sense of frustration and are tempted to wonder whether their efforts to improve legislation are worthwhile, but when we reflect that the Treasurer (Mr. Chifley) has so far changed his attitude as to present to the Parliament a measure designed to give effect to practically the same reductions of taxes as the Leader of the Australian Country party said during the election campaign were possible, we are led to believe that, after all, the Opposition has its value, and does, in fact, influence legislation. It is evident that the Government has yielded to pressure, even if only to the degree of granting a small measure of relief to taxpayers. The doleful statement of the Treasurer in his budget speech justified the comment that he and his advisers were indeed “ dismal Jimmys “. At that time, they gave no hope of relief, but the latest figures supplied by the right honorable gentleman show that he greatly underestimated the revenue of the Government and also grossly exaggerated its estimated expenditure. Proper budgeting would have reduced the gap between the estimated revenue and expenditure, and would have shown that a substantial measure of relief from heavy taxes was possible. Let us examine some of the statements of the Treasurer and his advisers made ten months ago when he submitted his budget, and compare them with, what has actually happened up to the end of April. There are now only two months of the financial year to go. The returns from customs find excise duties are now only £5,000,000 short of the estimated return for the whole year. As the average return for each month is about £9,000,000, it is evident that the total return from this source is likely to be over £3.00,000.000, instead of £89,000,000 as estimated. Sales tax returns were similarly miscalculated. In spite of the fact that certain reductions were made during the year on some items, the return for tha first ten months of the year will be £31,239,000, as against an .estimated return of £31,000,000 for the whole year. In the light of those figures, how can the Government justify the retention of many of the irritating impositions which now apply?
It is not possible to reduce taxes to any great extent unless there is a willingness on the part of the Government to effect economies where possible. When the last budget was introduced, it was expected that there would be a gap of £59,000,000 between revenue and expenditure, and that this gap would have to be bridged by borrowing. We find, however, that for the first ten months of the financial year only £9,000,000 has been expended from loans and, according to the expectations of the Acting Secretary to the Treasury, Mr. Watt, loan expenditure for the full twelve months will not be much more. This leaves an amount of £50,000,000 to be accounted for in some way. Obviously, expenditure must be down by this amount, or it has not been necessary to raise so much by way of loan as was expected because of the buoyancy of the revenue. That, of course, is the true explanation. Revenue has been so buoyant that it was not necessary for the Treasurer to go on the market to borrow money to anything like the extent that he expected would be necessary when he framed his budget. However, the benefit of this situation has not been passed on to the taxpayers. It is true that this bill provides for the granting of certain concessions, but I maintain that the taxpayers are entitled to all the relief that the financial position of the country renders possible. However, whenever there appears to be a prospect of lightening the load of taxes this Government immediately embarks upon some new form of expenditure which puts adequate relief out of the question.
Taxation per head, State and Commonwealth, has been as follows during recent years : -
It might be claimed by those who believe in heavy taxes that there has been an increase of national production during the period under review, and that heavier taxes can, therefore, be borne by the community. That is partly true, but production has not increased in the samiratio as have taxes. According to the quarterly summary - of Australian Statistics issued by the Commonwealth Statistician, net production per head for all industries in 1939 was £56, while in 1945 it had increased to £S7, an increase of £31 per head. As against this, taxation has increased over all industries by £33 per head. I emphasize, however, that those industries which are unable to pass on taxes have not increased their production in anything like the same proportion. For instance, in the pastoral industry production amounted to £9 per head in 1939, and to only £13 per head in 1945. In the dairying industry production per head was £5 in 1939, and £6 in 1946. Those figures emphasize the bad state of the dairying industry in particular, and point to the need for taxation relief. However, I am not .making a special claim for any particular industry. All industries of the Commonwealth, and all the people of the Commonwealth, should be given relief from the present load of taxes, if ‘it is possible to do so. It is on that point that the Opposition and the Government differ. The ‘Treasurer says, the financial position of the country being what it is, and our requirements foi’ social services being what they ar,e. taxes cannot be further reduced. But I shall show, first, that, in spite of a very substantial reduction of w-ar expenditure from £548,000,000 in 1944 to £110,000,000 in 1,947., a reduction of £438,000,000, which would naturally give rise to the expectation that there could be a reduction of taxes, the ‘Government has seised the opportunity presented by this decrease of war expenditure to increase non-war expenditure. Nonwar expenditure, which amounted to £164,00.0.,000 in 1945-46 was estimated at £2221,000,000 far 1946-47, an increase ,of approximately £57,000,000-, but .even that estimate did. not materialize. The figures I have already .cited .show that the actual deficit will not approach the. (gap of £50,000,000 anticipated by the Treasurer inhisbudget.Therefore,theGovern- mentcannotjustifythepresenthigh ratesoftaxes.SeniorMinistershavesug- gestedthathighratesmustbemaintained inordertocounterinflationontheprin- cipleofwithdrawingsurplusspending powerfromthecommunity.Anyeffort topreventaninflationarytendencyis commendable.However,Ipointoutthat awar-timeeconomydiffersfunda- mentallyfromapeace-timeeconomy.In timeofwaritisnecessarytolevytaxes atthehighestpossibleratesandtocur- tailtheproductionofciviliangoods,such asfurniture,refrigeratorsandstoves,in ordertodivertmaterialandman-powerto warneeds;butanentirelydifferentset- upisrequiredinpeace-time.Yet;the Governmenthasbecomesoinuredtoa war-timeeconomythatisunabletoget ofthatrut,andisnowapplyinga policywhichwouldhavebeenquiteessen- tialandpraiseworthyin1944-45.What isneedednowinordertocurbinflationis notnecessarilythewithdrawalofspend- ingpowerfromthecommunity,but ratheranincreaseofproductionof civiliangoodswhichpeopleurgentlyre- quire,andwhichwouldabsorbthesur- plusfundsofthecommunity.However, thereisnotthenecessaryincentiveinthe communitytoengageinthemanufac- tureofthoseciviliangoods,becauseso greataproportionofanyprofitsderived fromsucheffortwouldbetakenintaxes bytheGovernment.
OneWondersatthestatementbythe Treasurermadefourmonthbeforethe endofthefinancialyearthattaxeswere tobereduced.Whatcanhavebeenthe purposeofagovernmentannouncingin FebruaryorMarch,thatitwasgoing toreducetaxesinJuly?Obviously, theobjectwastoinfluenceelectors atStateelections.Thus,thereis somepoliticaljustificationforaparty makingsuchstatementsinadvance buttheeffectofthosestatements hasbeentoinfluencethoseengagedin manyindustriestowithholdfromthe marketgoodswhicharenowneededby thepublic,becauseprofitsonsales madeafterthe1stJulywillnotbetaxed soheavilyasprofitsmadefromsales effectedpriortothatdate.Itwasmost unprecedentedforthePrimeMinisterto maketheannouncementwhichhedid to meet unexpected calls. Usually, a taxpayer on £1,000 a year lives at a standard befitting that income and after he has met payments for rent, insurance premiums and the education of his children, he has, as a rule, no greater margin above his needs than has another taxpayer receiving only one-half of that income. Consequently, as the proportion of the income of the people taken by Government becomes greater so is there greater need to grant concessional deductions for expenditure on items which cannot be regarded as luxuries. When this bill reaches the’ committee stage I trust that the Government will show a disposition to accept any reasonable medical expenses incurred by a taxpayer as a concessional deduction. While such relief as this bill affords is welcomed by us all, I trust that the Treasurer will re-examine the rates of income tax because it has been made abundantly clear that, in spite of tax remissions already granted, Commonwealth revenues continue to remain buoyant. It has also been made clear that expenditure on certain items has been very much less than was anticipated. The Government might go .further in making tax concessions which will help” to stimulate the production of commodities which we require so badly.
.- The speech of the honorable member for Richmond (Mr. Anthony) was couched, in very reasonable terms. The general reactions to this latest piece of income tax legislation are very good. During the recent election campaigns in New South Wales and Queensland not one question was asked regarding taxation. I believe that absence of criticism of the ( Government’s taxation policy is general throughout the Commonwealth. The reductions of taxes amounting to more than £30,000,000 which are to become operative as from the 1st July constitute the fulfilment of the promise made by the Prime Minister (M’r. Chifley) during the Commonwealth flection campaign last year. In general v l.i l- objection to the bill on the part of honorable members opposite is purely psychological. They are bitterly disappointed that they them selves had not formed the Government which was able to bring down a measure such as this. Honorable members opposite tried to win the last elections by making, specific tax reduction promises. The Labour party gave electors no promise of specific tax reductions, the Prime Minister saying that taxes would be reviewed from time to time in the light of existing circumstances. The right honorable gentleman has fulfilled his promise.
There are five principal methods of raising revenue open to the Government to carry out its programme. First, there is income tax. For the year 1945-46 income tax yielded 56.94 per cent, of our revenue. The second method of raising revenue is by means of customs and excise duties. For the same year 20.61 per cent, of our’ total revenue was obtained from that source. The third method is by means of sales tax. From that source in the same year S.SS per cent, of our total revenue was derived. The fourth method of raising money is by internal and external borrowing. It is true that extensive internal borrowing was resorted to during the war, but no external loans were floated. The fact that not one penny was borrowed outside the Commonwealth during the war represents a very praiseworthy performance by this Government, especially when we consider the great interest debt piled up as the result of overseas borrowing during World War I. Finally, money may be raised to meet the commitments of the Government by the creation of credit - not a very popular method. During the war this method was resorted to by the Commonwealth to an amount of aproximately £240,000,000. I realize that we cannot continue creating credit indiscri-minutely, but it is a worth-while method foi- any government to adopt in times of great difficulty. The real wealth of a country is represented by its production and the money we raise should be equated to our productive output. The total moneys raised by the first of these three methods, namely, income tax, customs and excise duties and sales tax, represented S6.43 per cent, of all revenue raised during 1945-46. The remaining 13.57 per cent, was raised by ‘other methods, including probate duties. Income tax covers by far the largest field. The principle behind the taxation legislation of the Government is to draw from the people certain revenue for re-distribution through defence, £50,000,000, social services now £70,000,000, rehabilitation, subsidies to primary and secondary industries, health, education, £15,000,000 last year, salaries, wages and interest on loans. Those are the avenues through which our revenues are re-distributed to the .people. Taxation represents the Government’s purchasing power, the physical life ‘blood of the nation. Wages and salaries and guaranteed prices for products constitute the people’s life blood. Money is a commodity which enables the transfer of goods- and services from one to the other. With sufficient purchasing power in the hands of ..the people we have what I regard as financial health in the community; without it we have what I might describe as financial death in the nation. An uneven distribution of incomes, wages, salaries and revenue is almost as disastrous to the nation as allround scarcity. W e have only to go back eight years to recall the story of ruin and despair brought about by the restriction of purchasing power and low taxes on high incomes. Then we had the spectacle of abject poverty in the midst of abundance. Those were not depression days, but the days which immediately preceded the outbreak of World War II. Anti-Labour governments then failed to set finance circulatingthrough the nation’s economic arteries, so that our producers could get payable returns for their production, workers could get employment, and our people could buy the goods that were piling up in the warehouses, factories, silos and shops. Abject failure to get this life blood circulating was one of the main criticisms of anti-Labour governments prior to the war. As an illustration of the financial death of Australia when World War II. broke out, let me give one or two instances : In 1940, there were 2,000 deserted wheat farms in Victoria, with 80 per cent, of all farmers virtually bankrupt. There were more than 1,500 deserted farms in Western Australia. In South Australia, 1,700 farmers went through the bankruptcy courts a few years before the war ; and 200,000 of our working population were out .of employment in 1940 - after the war had already begun. Moreover, in 1939, 85 per cent, of Australian wage-earners were averaging only £187 a year, or £3 10s. a week. The remaining 15 per cent, were averaging £2,200 a year. Admittedly, the restriction of credit was on a world-wide basis prior to the war, but anti-Labour governments in this country seemed’ incapable of setting finance or purchasing power flowing within this country by any means. In other words, just prior to the war, production had outstripped purchasing power. There were more producers than there were people who could buy thu goods they produced. No wonder we had slums when there was no money to build houses. That is one of the reasons for the grave shortage of homes to-day. There was a shortage of 240,000 as far back as 1940 due principally to lack of purchasing power in the hands of our people. Ample supplies of building materials were available. Another feature of finance in those days of eight years ago, was high interest rates. Interest charges strangle production, both secondary and primary, and we are still paying off debts incurred at that time through interest rates of 6 per cent., 8 per cent., and even 10 per cent. For instance, in 1936, wool-growers and wheat-farmers in this country totalling 170,000 had a combined indebtedness to banks and other lending institutions of £2S8,000,000, with the interest bill of wheat-farmers alone amounting to £14,000,000 a year. That was only a little more than eight years ago. Over-production was the cry heard everywhere. We were told that we had over-produced, but that was a lie. We could have consumed or exported every bushel of wheat that we grew, and we could have used all the products of our factories had there been sufficient purchasing power in the community to buy them. The real trouble was under-consumption. We read of the scandal of wheat, coffee, oranges, and potatoes being dumped into the rivers and seas of the world. In Tha Grapes of Wrath, by John Steinbeck, the bitter conditions existing in the United States of America between 1934- 37 are revealed. The author describes how armed guards lined the banks of rivers in California, while potatoes, were dumped into them. Huge dumps of oranges were also guarded sp that people could not take them away. The hui was allowed to ,i;ot, and the juice to soak into the ground. Yet the people were starring! That state Qf ^affairs continued right up to the outbreak pf World War II. because pf the restrictions pf credit. In those days ;e did 11Qt 3b,ear honorable members opposite crying put for more purchasing’ power for the people pf Australia sp that they might buy flip goods that were stacked in factories and warehouses; but to=da.y the Opposition cries for more -production.
– Does not the honorable member agree -with that ?
-:Yes, but conditions have altered. We want mere production, to-day because prices are higher, markets a,ro more plentiful, and there is ample purchasing power in” the community. Prior to World War IT., purchasing power was scarce, taxation was low and there was an abundance pf goods; but to7day, after six years of war during which our productive resources wore turned to destruction, and due to the Labour Government’s sound financial policy of getting purchasing power circulating again, there is plenty of .money hut a scarcity pf goods- That is only natural, but with full .employment and good machinery in p.ur factories, I firmly believe that within a year or two, .the flow of consumer goods will have increased greatly a-nd the lag of production, will have been overcome. Already there is a glut pf certain leather goods in this country. Production of all commodities will increase because of full employment, but this is the point: The critical day for Australia will come when production Catches up with purchasing power. What will happen when we have sufficient goods to absorb the money that is available to buy them ? Unless o.ur export markers arp maintained by higher standards of living, and our own purchasing power ox’ credit is kept circulating’ by progressive government policy, we shall bp forced to endure a repetition of the COnditions of 19.30:.39. When tha* stage, of production has. been .reached we hope that the Commonwealth Bank will step in and, by means at Ms disposal^ keep credit circulating within this country Among workers to-daK there is a torrible fear which I call the “fear of plenty”. It is a .deeply entrenched fear that the time will come when j;he .gop.d.s- that they produce .and the ‘props that they grow will rust -or rot because .there .will npt .be sufficient purchasing powder in the community t.o buy them or sufficient overseas markets to absorb them. This ?s a legitimate fear because prior f.o World War II. we suffered nine of the most terrible years in pur history, and they have left an indelible impression upon the minds of workers .and farmers.
-i«e. - What does the .honorable member mean by “nane of the most terrible years “?
-Perhaps the honorable ‘member for Parramatta (Mr. Beale) did not notice -them. I can only assume that he was not ,on the land pr on the dole. This Government realized that it has a bounden duty when -production catches up with purchasing power to ensure that there shall not be any restriction of credit. This is one reasonwhy .taxation can never return to prewar levels, much as some -people wish it to. A government is impoverished without sufficient revenue, and the .Commonwealth -Government cannot possibly carry on its expanding activities on the revenue of pre-war days. In those day3 taxes were almost non-existent in most fields of income; but social security, too, was almost no.n-exis.tent. In 19.39 only £16,000,0.00 was spent on social security. National education had not .even, been heard of and health assistance was very mea/g.i:e. Economic security generally £b,r both workers and employers was very flimsy indeed. We cannot have it hath ways. We must ha-ve the money ‘to distribute through the channels I mentioned earlier. Let those who make their income out pf the production, of the people pay the highest taxes. That is fair. The workers and farmers of Australia ought to be encouraged to produce.
The national budget is about five times as great as it was in 1939, when it was *bout £80,000j0.00, compared with about £400,000,000 now. The Prime Minister has said -tha.t there is little chance of it being much -below £400,000,000. Money must be got f from somewhere to. carry out the Government’s enormous programme So taxes cannot possibly be- reduced; ;to the 198.9 level. JJ© reasonable penson would wish them to be. Taxes, with & rational creation of credit when necessary, willmaintain national wealth and keep purchasing power circulating throughout the Commonwealth. Without taxes we have no security. With ‘ reasonable taxes we have reasonable security. With low interest rates we have reasonable security, and that is also the policy of the Government.
This Government has relieved people in lower-income groups of income tax. No better investment could be made than that. People in those groups receive social security. Contentions that ‘high taxation destroy the incentive to -produce are grossly exaggerated. From the 1st July next a single person will not pay -the social services contribution until he earns £2 or income tax till he earns £5 a week. If married, he will not pay the social security services contribution till he earns £4 or income tax until he earns £7 10s. a week. If he has one child, he will not pay the Social services contribution till ho earns £5 10s. or income tax until he earns £5 15s. a week. If he has two children, he will not pay the social services contribution till he earns £6 or income tax till he earns £11 a week. With three children, he will not pay the social services contribution till he earns £6 15s. or income tax- till he earns £12 a week. If he is- fortunate enough to have four children, he will not pay the social services contribution till he earns £7 15s. or income tax till he earns £13 5s.. a week. The people who object to high taxes are those Jiving on unearned income, people who do not create a pennyworth of wealth in this country. The creators of the wealth of this country are the workers and the farmers. We in this Parliament do not create any wealth. The people who ought to benefit from a reduction of taxes are the creators of the wealth - the workers and the farmers. That is the policy of the Government.
-7-What does the honorable member mean by “ workers “ ?
– It is a general term meaning all who work with their hands.
– What about their brains?
– And their brainsmen who create real wealth of any kind. If it .be true that high taxes ‘ stifle pro duction it is strange that the acreage sown for wheat this year is appreciably above that of last year. I am not sure that it is not a record acreage. If one reads the financial pages of newspapers one finds that at least SO per cent, of the ‘big companies have earned higher profits than they .did in the previous twelve months, not-withstanding that they have had to pay high taxus. It has been stated that Australia is the highest taxed nation in the world, but the Prime Minister has effectively scotched that charge, which had currency during the election campaign last year. In order to emphasize how incorrect that statement is, I cite the following comparison of taxes levied in Australia, the United Kingdom and New Zealand on poisons earning £350 a year. A. person without dependants pays £3S in Australia, £68 10s. in the United Kingdom and £57 5s. 7d. in New Zealand. A person with a dependent wife and one child pays £10 10s. in Australia, £21 in the United Kingdom and £35 in New Zealand. A person with a dependent wife and two children pays £5 5s. in Australia, £13 in the United Kingdom and £35 in New Zealand.
– The honorable member is referring to proposed rates for 1947-48.
– Well, I am using the present tense.
– But that comparison does not apply to the period in which the general elections were held.
– Even then it was a lie to gay that Australians were the most heavily taxed people in the world.
– The honorable member’s comparison does not apply to every income group.
– Not every group, admittedly, but the £350 group is an average. We have extended income tax concessions into many fields. The Government is to be congratulated on having worked out the details of the extended tax concessions. The honorable member for Richmond mentioned possible improvements. Improvements could be made, hut no. government, not even a government of the quality of the Labour Government could. think of everything. When the Income Tax Assessment Act is being reviewed next year many of the anomalies that may be discovered will be ironed out and further concessions granted. I commend the Government for having exempted from income tax all money expended by farmers on combating soil erosion. That is a new departure. It is the first time, that a Commonwealth Government has even considered that concession. We all realize the menace of soil erosion.- Every year, at the present rate, about 2,000,000 acres of Australian land becomes desert. Ion Idriess has said that he has seen sand hills in western Queensland 200 miles ^ farther east than when he first saw them some years ago. Soil erosion is an increasing menace, and within a. few years a. national plan may be required to combat it. I congratulate the Government of New South Wales upon the, creation of a Conservation Board; it is the only State government in Australia that has a Minister for Conservation. The Commonwealth Government is encouraging that board and the Departments of Agriculture in other States by allowing to farmers exemptions from income tax in respect of’ all amounts expended in combating soil erosion on their farms, whether by terracing, draining, strip-cropping, strip-clearing on new land, or by other means. That is one of the most practical methods over introduced to encourage farmers individually to check soil erosion. We shall never be able to defeat this menace without the co-operation of individual farmers, and anything done by the Government to encourage soil conservation is a national service. Erosion is very severe on many farms, and, in some instances, the cost of eliminating it would amount to many hundreds of pounds. Many farmers consider that the expenditure of such sums would only amount .to “ pouring money down the drain “. However, the Government is doing much to overcome that attitude by making income tax concessions for all such expenditure. That is very commendable.
The Government’s overall proposals show that it is encouraging a Christian principle in the application of taxes. The rich will help the poor, those who are healthy will help the sick, the strong will help the weak, and those who are secure will help those who are insecure. I have yet to. learn of any higher principle of government policy.
.- The speech made by the honorable member for Wilmot (Mr. Duthie) was divided into three parts. The first part was a narrative of a kind which I have rarely heard in this House. In fact, I believe that a more biased narrative has never been delivered in this chamber. It was composed mainly of truths and halftruths relating to a certain period of our history prior to the outbreak of war. The honorable gentleman’s speech reminded me of an old adage which is current in country districts : “ When a man is religious, put an extra brand on your calves “. As the honorable gentleman referred in detail to the economic depression, I shall do likewise in order to rectify some of his omissions. He did not mention the period of 1930-31, when the Labour party was in power all over Australia.
– I did not go back as far as that.
– The honorable member very conveniently left that period out. It ill becomes an honorable gentleman of his description when he starts to ‘ make a case-
– Be calm. I was.
– I shall’ be calm. However, I point out that the honorable member made no reference to the period which I have mentioned. The depression that occurred during those years was world-wide, although I agree that there was a secondary depression in this country. The main depression arose from certain circumstances which originated outside, of Australia, namely, a calamitous fall of . the prices of all primary products. There will be another such debacle unless this Government alters its financial policy. If the prices of primary products ever fall to low levels again, there will have to be a very quick reconstruction in Australia if thousands of men are not to be thrown on the streets out of work. As I have said, the main depression arose from events which developed outside Australia. However, the secondary depression which followed took place because the Labour government of the day refused to recognize that, when a nation’s income is reduced, its government must conform to the requirements of that fact. Had prompt economic reconstruction taken place during the depression, the thousands of men who were thrown out of work need not have become unemployed. That was definitely proved after the Lyons Government came into office in 1931. Although, in 1932, the prices of primary products reached the lowest levels known during the depression, a remarkable recovery was staged in Australia. We all know that credit, which had been very scarce - real credit, not inflated credit - became abundant again after the Lyons Government took office because confidence in the government of the country was restored. Australia made a more remarkable recovery from the depression than did any other coun- try. That fact stands to our credit. From 3932 onwards there was continuous development in Australia. If the honorable member for Wilmot wishes to verify I hat statement, he can easily obtain statistics from the Parliamentary Library. The figures show that, after the Lyons Government, was formed, thousands- of men returned to work, new factories were opened, and greater production resulted. World values of primary products did nor rise quickly, but there was a gradual improvement of conditions for primary producers.
The honorable member for Wilmot talked about the great, debts of the Australian primary producers. Of course groat debts followed calamitous, price falls! 1? have had an overdraft almost from, the day when I became a grazier. I still have one. I was once told by a. capable business executive that a. man is not progressive unless lie has an overdraft. I shall tell that to my son, and I pass the fact on to the honorable member. I ask him not to run away with the impression that any man who has an overdraft is in bad financial circumstances. On the contrary, the fact denotes that he is a progressive man, who, by using borrowed money and developing his farm or business, increases its productivity. The honorable gentleman should not be misled into believing that, because a particular section of the community does not bear a. debt, everything is wonderful. Such a fact could denote stagnation, than which there is nothing, worse. Unfortunately these facts are noi appreciated by honorable members opposite. If Government supporters weremore progressive, they would make intelligent use of overdrafts, too. Of course.’ if they did so, they would also haveenough sense’ to change their political allegiance.
I refer now to the increases that have occurred in the prices of primary products in recent years. The honorable member for Wilmot said that conditions to-day were different from those of the depression period. Was this Government the real creator of the present high prices of primary products? Of course not! In order to satisfy my curiosity on this, subject, I recently sought and obtained from the Commonwealth Statistician figures relating to percentage price increases of Australia’s main export commodities from the beginning of the war up to the present time. I am glad that I am able to present them now in the knowledge that the honorable member for Wilmot will not doubt their authenticity. The first table sets out. percentage price increases between 3 93S-39 and 1944-45, which was prior to the cessation of the wool appraisement scheme. It is as follows : -
The second table brings the figures tip to date. It relates to the period from 3.988-39 to March, 1947. It is as follows : -
Will the honorable member for Wilmot tell the House, or the farmers in the Wilmot electorate, many of whom .are known to me, that all the good things that have happened to them are due to the fact that- the Chifley Government, is in office.? The farmers have-, much more wisdom than to. believe such a statement. They know that these increases have occurred a& the result of -war needs and post-war scarcities. They are not so foolish as to believe, that the present. Government has- secured such good results for them-. Here, I sound a note of’ warning. If the Government is basing its- commitments on the extremely high prices of those commodities, the day of reckoning will overtake it. The- sooner Australians realize, that truth, the better it will be-. This continual building up of expenditure, based, upon the existing high prices of our exports, must, if continued lead us to disaster. An honorable member would be- foolish who-, contended that these prices- will remain indefinitely. They may continue for another few years, again as the result of the needs of the world for food,’ but they are not stable prices, and if the. Government bases its. estimates on the assumption that- these values will be permanent, a day of reckoning will come to those who pursue that policy-, and the Australian people generally.
The Treasurer (Mr. Chifley) indicated in his finanical statement a few weeks ago that many people in the lower income groups would be relieved of the obligation to pay income tax and social services contributions. I wonder whether honorable members realize what is happening to-day. In Australia, the numbers of persons in receipt of high incomes is not sufficiently large to bear the major part of the cost of administration. The result is that the people in the middle ranges of income, are bearing almost the entire burden of financing the Government of this country. When a government imposes an excessive burden on these progressive classes, I doubt whether it is laying a sound and stable foundation for its social services.
This bill will allow as a deduction money which primary producers expend on measures to combat or prevent soil erosion. I propose to let honorable members into a little secret ; the Commissioner of Taxation will not glean any information from my remarks. The view has been expressed that this concession is of great value, but I would point out that expenditure on combating and preventing soil erosion will be incurred! principally in employing labour, and an employer has always been allowed as a deduction money paid as. wages. I do. not believe that the primary .producers-, willi benefit substantially from the proposed concession.
My principal purpose in participating in this debate was to refer briefly to three matters. The. first -relates to the failure of the Government to relieve former civil servants and’ others of the obligation to pay income tax on money that they derive from a superannuation or similar fund. Australia is a most extraordinary country.. The Government places a penalty om those who desire ‘to work, and allows those who do not desire to work, to escape any penalty.
-The Government awards a prize to, those who do not desire to work.
– Exactly. The ‘ Government grants tax concessions to those who accept its charity, but hits- with a. heavy hand the person who, through Ms own providence during- his working life, draws money from a superannuation fund. The exemption of these payments from income tax will, not mean the loss to Consolidated Revenue of many thousands of pounds, because the number- of persons in this, class is relatively small. I have a considerable regard for the person who contributes to a superannuation scheme, or for a firm -which begins such a scheme in. the interests of its employees. The contributor then receives a pension as a right which . he has earned. In that instance, there is no hint of charity. The least that the Government can do is. to exempt from tax the. amount of the superannuation payment equivalent to the oldage pension. The pension is not subject to tax, and I do not contend thai; thai is wrong. AH I am saying is tha,t similar consideration should be given to the- person who receives a pension from a superannuation fund. .
I now propose to refer to what ‘ described as “ hardship cases “. For example, a daughter may have looked after her parents for many years. Perhaps those parents are not- well-to-do people, and when they die, the daughter experiences great difficulty in obtaining employment. She has not had any training for any special job. Therefore, other members of the family must make a contribution to maintain her. These cases are not numerous, and I contend that the contributions which other members of the family make in these circumstances towards the maintenance of their relative should be allowable as a deduction for taxation purposes.
The abolition of the deduction system and the introduction of the rebate system was a shrewd - I nearly said snide - way of extracting more money from the married taxpayer. The figures which the Treasurer supplied to the Leader of the Australian Country party (Mr. Fadden) last year showed that the rebate system was responsible for yielding an additional £29,000,000. These were Treasury figures. I well recall the introduction in 1942 of several bills which provided for the adoption of a uniform income tax. At the outset, I admit frankly that the system was recommended by a parliamentary committee representing all parties in this House.
– The members of that committee were not selected by the respective political parties.
-That is so. The remarks which I shall make are applicable not only to the government of the day, but also to those members of the Australian Country party and the United Australia party who served on that committee. When the bills were ‘ introduced, the Treasurer informed honorable members that the adoption of uniform income tax might mean a slightly higher yield to the Taxation Department. Now, the stage has been reached when the married taxpayer is bearing a heavy impost. .When the Treasurer replies to this debate, I should like him to supply figures showing exactly how much additional revenue the Taxation Department will receive, in the next financial year, through the retention of the rebate system. The adoption of uniform income tax, honorable members were assured, would’ mean a simplification of the tax system. Personally, 1 never experienced any great difficulty with the returns when we paid Commonwealth and State tax. The taxpayer was required to fill in figures in two columns, but that was relatively easy. To-day, he fills in figures in only one column. The honorable member for Fawkner (Mr. Holt), the honorable member for Wentworth (Mr. Harrison) and other honorable members have complained that at present, the average citizen is not able to understand how the Taxation Department compiled his assessment. Many leading accountants have had the greatest difficulty in working out assessments. The honorable member for Wentworth cited specific cases. where people complained to lie department that their assessments were incorrect. The department agreed with their submissions, and, subsequently, despatched a revised assessment, which also proved to be wrong. Once a system becomes too complex for the average person to understand, the way is open for inefficiency and abuse of . power. The position becomes most difficult when a taxpayer is obliged to approach a high priest in the department in order to obtain a decision on a particular point of procedure. We have reached that stage to-day. Many people have not the faintest idea of how their assessments have beenmade. That is wrong. The solution, possibly, could be the. reconstitution of the Public Accounts Committee. The Commonwealth is now expending hundreds of millions of pounds a year, and this vast expenditure is not examined by any parliamentary committee. As the honorable member for Fawkner suggested, a special Parliamentary Committee, or the Public Accounts Committee could examine these matters, and ensure that ordinary taxpayers shall have an opportunity to understand the details of their assessments, and know whether they have been correctly assessed. Any further remarks that I desire to make upon income tax, I shall reserve until the Income Tax Bill is before the House.
.- I have listened with great interest to the remarks of members of the Opposition and I have noted that they echo the catchcry that our troubles to-day are all due to extremely heavy taxes. But no honorable member opposite has’ thought fit to inform the House at what point of income he considers that taxes should commence or cease. I should be glad to hear the quasi-economists, accountants, disgruntled businessmen, and, indeed, those sections of the Labour movement which are complaining, inform us what the impact would be on our economy with goods and services in short supply if the entire amount of money at present collected in taxes by the Commonwealth were released. What would be the effect mi our economy? Recently, I read in a *‘“rag”, an article which’ purported to be based on an observation of mine,. that the whole of our economy was upset by high raxes. It is interesting to inquire in order to see just what effect taxation- is having; and I am sorry to say that even the working man has allied himself with his natural enemy, the Liberal,, and has become a first-class liar. Whilst we expect lies from people who pay heavy taxes, because they are seeking to reduce them, we do not expect lies from the working class. To expose the falsehood of the contention of the critics of the Government, I propose to examine the actual incidence of taxation on a taxpayer with a wife and two children. That unit is typical of the people, and embraces those who accept some responsibility in the community. They are the people to whom we must direct our attention. At the height of war-time taxation, when the country was in grave danger and money was most needed, a man with a wife and two children to maintain who earned £300 had to pay £17 Ss. in income tax; to-day he pays £11 3 7s., and after the 30th June next he will not pay any income tax. If lie earns another £300 by way of overtime, which results in a considerable income, his tax rises now from £11 17s. to about £S5, In other words, the Taxation Department collects £74 from his extra £300. And the Australian liar argues that if he earns £300 in overtime the Government “ takes the lot “ because it takes £74 ! I hope that any one who threatens to “ take the lot “ from me takes only £74 out of every £300. And that is the answer to the falsehood so widely circulated. Now, although the Commonwealth Government does take £S5 from his present earnings, it refunds him “nearly £20 for his second child. In the result, all the Commonwealth takes in taxation is £65; in other words, he is left, with £535 out of the £600 he has earned. ‘ That, I em- phasize, is the tax levied on him to-day. not the tax to be levied after the 30th June next. The argument that high taxation destroys the incentive to work and to produce is obviously false. The real reason for any lethargy in the community - and I do not admit that there is any lethargy - is that the community has never had so much money before. Every one is so solvent to-day that he does not need to work hard. As I said on a previous occasion, Australian morality is in a parlous condition, and that fact has been the subject of general comment. Looking at the position that will obtain after the 30th June next, a taxpayer with a. wife and two children will not pay any tax on an income of £300; he will not he called upon to pay tax until his income aggregates £400. Then he will pay £12, and he will receive a rebate of £1.9 10s. for his second, child; in other words he will be £7 10s. to the good. I think that that disposes of the argument that heavy taxes destroy the incentive to work. Even under present taxation rates, if a man earning £300 a year wants to earn an additional £300, making £600- which is a large income and far beyond that received by any working man to-day - all that he has to pay in tax is £85. And he receives a. rebate of £20. In other words, only £65 is taken out of the £600, so that he has £535 clear. Notwithstanding the fairness of the present taxation scale, it is still contended that substantial taxation is the reason why men will not work, but, of course, that contention is a lying one. Unfortunately, the assertion is not only mendacious, but because of it working men have been induced to support the Liberal party’s cry that taxes are too high. This is a. time when goods and services are in very short supply. What would happen to the community if, by some miraculous means, taxes were dispensed with altogether? Supposing, to please the capitalists of this country, another £1,00,000,000 were put into circulation by means of tax reduction? Does any one think that any method of price control would succeed in keeping down prices? Does any one fool himself that in spite of the price-fixing machinery which operates to-day the cost of living has not increased? What would happen then if a huge sum of money ware suddenly released into circulation? In the interest of the “ big man “ it is all very well to say, “Give it back”; but you cannot give it back unless you give the lot back. It is illogical to argue that some should be returned, but not all. “We must take a sane view on this subject. I arn not an advocate of unnecessarily high taxes, but T. do advocate high taxes at a time when goods and services are ‘in short supply. The inevitable result of releasing money at such a time would be to force up the already high cost of living. [ believe that the economic life- of the man with a family who earns £300, £400, or £500 a. year has not been improved, even though tax reductions have considerably lightened his burden in that respect. Theoretically, the principle of tax reductions is sound, but in practice I do not believe that it is. The Government, for what reason I do not know, “fell for “ the argument that the reduction of taxes would provide an incentive for the working man to increase his output, mid to the business man to expand his operations. The business man could not expand if he were given £10,000,000, because of the unavailability of the necessary commodities. The working man has had all the incentive which a government could reasonably give to him to produce, yet to-day commodities are in very short supply. Honorable members opposite, and the press of this country, would not have been pleased had the Government, continued to impose high taxes and to control our economy as rigidly as possible, using the proceeds for the discharge of some of our debts and thus reducing the interest bill that will have to be borne by posterity. They convinced the working class that all their troubles were caused by high taxes. The Government yielded to the pressure and the advice of those would-be economists, and by the time the next tax reduction comes into effect the total amount of revenue forgone will be approximately £90,000,000. [ believe that the people will not receive the benefit which they expect from these enormous reductions. For that reason, the Government might have held down our economy for a much longer period, paid off a lot of our national debt, and thus reduced our interest bill, deferring the removal of restrictions to the time when the supply of goods and services had vastly improved. I am very interested in the position in relation to taxation, because there are features of it that are very conveniently overlooked by those who wish to criticize governments. At the present time, the Commonwealth has to return to the States £42,000,000 a year which it has collected on their behalf, out of the total revenue that it receives from direct taxes. It also has to make interest payments amounting to £70,000,000 a year, of which £20,000,000 is on account of World War I. I do not know whether the Liberal party or th-.’ Australian’ Country party intends to repudiate, the interest bill if it should be returned to power in the future. Whatever government may be in power, it will have to return to -the States an everincreasing amount as their functions increase, and in addition, it will have to make interest payments totalling at least £70,000.000. As- the aggregate amount collected from direct taxes is only £129,000,000 or £130,000,000, the Commonwealth has not much left after it has made these disbursements. It will thus he seen that the Government is the object of a good deal of undeserved criticism. The time is rapidly approaching when we shall have to consider the present alinement of the. functions and responsibilities of the Commonweal th and the States. Let us study for a moment our export and import trade. Before the war, our export trade was conducted largely by private enterprise, through the medium of banks, agents and so forth, and our import trade was carried on in much the same fashion. Owing to the tremendous economic turmoil in the world to-day, and the enormous interest bills of the various nations with which we traded in the past, the different transactions have to be conducted through governmental authorities. Permission has to be obtained to import or export goods, our sterling balances have to be adjusted, and our dollar position must be kept in a satisfactory condition. We cannot have that free flow of trade which we had in other days, because of the sanctions and restrictions that have grown up out of the economic upheaval that has taken place throughout the world. The people are now rebelling, and cannot understand why they are unable to trade as they did prior to 1939. I cannot see that this Government is playing a greater part than any other government in international turmoil and disruption. It did not declare war on the world, but it played its part in “World Wai- II. Because we happen to have emerged from the conflict with our resources intact and cm capacity to produce greater than it was previously, the people consider that they have a grievance when they cannot get sufficient dollars to enable them to trade.
– The honorable gentleman would be well advised to deal with the bill.
– I thought that I was allowed a good deal of latitude on a money bill.
–This is an Income Tax Assessment Bill. There was a general debate on financial, policy last week.
– I thought that there was no limit to the subjects that could be discussed on a money bill. Since you, sir, have ruled me out of order in respect of the functions of this bill, I shall endeavour to meet your wishes.
– Order ! The Chair has done nothing of the kind. It has merely stated that this is an Income Tax Assessment Bill. It is the honorable member who has wandered from the subject.
– I stand, corrected on that point. I was merely trying to demonstrate the function of government as it affects the economy of this country. If the economy derived from indirect sources is high, I should say that it has a direct bearing upon the tax rate imposed on wealth. I believe that the time has arrived when we might review the whole of our tax assessments in the light of what has passed. I am anxious to know the degree to which the assessment of income tax affects our economy, and how far we get by imposing taxes on lower incomes in relation to capacity to produce. Honorable members opposite have stated frequently that our production is seriously jeopardized by high taxes. I am not quite sure that that is a sound argument. I thought that it would be possible in discussing this bill to deal with Aus tralia’s economy generally, but seeing that you, sir, have ruled me out of order-
-I do not wish to be misrepresented. I have not ruled the honorable member out of order, but honorable members will recall that when the Prime Minister (Mr. Chifley) introduced his financial statement there was general agreement that it should provide an opportunity for a free debate on financial matters, and that thereafter debate should be restricted on the bills which would be introduced to give effect to the Government’s financial policy. One of those bills is now before the House. If the honorable member for Denison (Dr. Gaha) missed his opportunity to participate in the general debate on financial matters, he must not blame the Chair for not allowing him more latitude now than he is entitled to.
– I shall abide by your ruling, Mr. Speaker, but I did not miss my opportunity to participate in the general debate, as you-would realize if you saw some of the references to my speech in certain local “ rags “ which used mud for ink.
I had intended to deal with the subject of uniform taxes and their effect on the workers of this country. Many incorrect statements have been made by honorable members who have compared the taxes levied on the people of Australia, New Zealand and the United Kingdom. Statistics prove that Australians are not the most heavily taxed people in the world, as has been claimed by some honorable members opposite. Australia’s economic position is sound. As I have said, I am not convinced that production has any relation to income tax, especially as it affects persons in the lower ranges of income. I have shown that the tax payable by a. worker earning up to £500 a year does not constitute a hardship, and should not be a deterrent to production. The position will be still better after the 30th of June next. Instead of reducing taxes as proposed, it would be better, in my opinion, to maintain the present rates of tax, and use the revenue to reduce the national debt, or else to retain it until less favorable times come, as they will surely come, and then use it in the interests of the people.
-. - Does the honorable member desire a greater reduction of taxes ?’
– No. I say that notwithstanding that I pay a considerable sum each year in taxes. As I have said, I do not believe that a reduction of taxes would be of any great benefit, particularly to those on the lower incomes. Although I should have preferred something different, I realize that the proposal before us is the best that can be made when we consider the pressure brought to bear on the Government by -various pressure groups, quasi economists, and the press.
– Does the honorable gentleman, want a short period of deflation ?
– I shall not be caught in that trap.. “We cam only wait and see’ what effect a reduction of taxes will have on production and on the people generally, particularly those in receipt of the basic wage. I do not believe that the effect will be what honorable members opposite think. The great bulk of the- workers will not be in. the taxation field at all after June next, and those whose incomes are high enough to be taxed will not be subjected to any great burden. Time only will ten what the effect of these reductions will be.
– On the last occasion that I spoke on. finance in this House I followed the- honorable member for Denison (Dr. Gaha), and dealt fully with his remarks,, so I shall not deal at length with his speech to-night. All honorable members will agree that. Commonwealth revenue is increasing. It is well to keep that fact in mind when discussing the various proposals that come before us. The budget expectation of an income of £404,976^000 for the financial year is likely to be greatly exceeded. The revenue for the ten months ended the- 30th of April amounted to £325,656,000. It is generally believed that Commonwealth revenue will increase slowly for the next few years, and, if that be. so, greater reductions of taxes than a ne. proposed’ by the. Government would be possible.
Supporters of the Government have1 contended that a reduction* of taxes would not increase production, but that does not seem to me to be a logical argument. Some Opposition- speakers have pointed out that goods are being withheld from the market until after the 30th June next, when merchants know that the taxation position will be ‘ more favorable. If the promise of a small reduction, of taxes has that effect, is it not logical to say that heavy taxes do retard production? The best way to ascertain the effects of taxes is to move freely among the people and learn their views. Large numbers of workers refuse to augment their incomes by any considerable amount because, they say, their extra earnings are taken by the taxation authorities. A striking illustration can be found in the fruit-growing districts of Mildura, Redcliffs and Merbein. Many men on piece-work will work only for a certain number of days in each week, notwithstanding that it is essential that the fruit be picked at the proper time. The reason is that additional earnings lift their income into a higher range in respect of which the rate of tax is so great as to preclude them from netting any worthwhile additional amount. Because of this the industry as a whole suffered considerable loss. I recall that at that time representations were made with the object of obtaining a reduction of tax on incomes above a, certain amount in order to induce these workers to continue on the job. However, those representations were not successful. In the dried fruits industry it is essential that the fruit be harvested at a certain time of the year if tue grower is to derive full benefit from- his crop. If, because of taxation anomalies, pickers will not continue to work after they have earned a certain amount, production is limited. This was emphasized in the case which 1 have in mind, because at that particular time thousands of bushells of fruit which the workers refused to pick were destroyed by heavy rain.. In that way the industry suffered considerable loss. The fruit destroyed could have been exported to Great Britain; but,, in any case, the country generally suffered that loss. Honorable- members opposite have often deplored the wantonness of producers in certain countries, who deliberately dump surplus production at sea, or destroy it, in other ways. I for one. cannot see any difference between destroying fruit in that way or allowing it to be destroyed by failing to remedy taxation anomalies as the result of which pickers refuse to harvest all of the crop. The honorable member for Darwin (Dame Enid Lyons) has told us how thousands of bags of potatoes have been allowed to rot in the ground in Tasmania. Therefore, honorable members opposite have no grounds for denying that excessive taxation retards production.
Although I disagree with most proposals advanced by the Government, I wholeheartedly support some of the provisions in this measure. I was pleased to be informed by the Prime Minister (Mr. Chifley) that provision has been made to allow as a deduction in respect of income tax 20 per cent, of the amount expended by a taxpayer in. the purchase of new machinery, and that that concession is in addition to the existing allowance to 30 per cent, in respect of that item. .1. welcome particularly the provision to allow as a concessional deduction all expenditure incurred in combating soil erosion, because this problem is most acute in the electorate which I represent. This provision will benefit not only producers who come face to face with soil erosion, but also the nation as h whole. The bill also allows as a deduction depreciation on such improvements as bores, wells, and dams. This will he’ a valuable aid to primary producers generally. However, this concession could be made more generous. Tins Government should allow a similar concession in respect of expenditure on fencing. In most country areas fences have fallen into serious disrepair. I am, however, pleased that a concession is allowed in respect of expenditure on rabbit-proof and. wild-dog fencing. In the Millewa area, where wild dogs are a serious menace, such a concession would be of great aid to producers who reside on its boundaries. I also appreciate the concession made wi.tb respect to gift tax.
The other concessions provided in the bill are not so generous. The honorable member for Wilmot (Mr. Duthie) contended that Ave must increase production because high prices prevail. I cannot follow the logic of that argument. We need greater production to-day be- cause essential goods are in 3hort supply.. The Prime Minister, in his secondreading speech, said, in effect, that all would, agree that production in this country was at a. commendable level, and that one had only to look around the shops to convince one’s self of that fact: Recently, when I was in Melbourne, I recalled that statement by the Prime Minister and decided to put it to the test. However, I found that, whilst many luxury goods such asperfumery and beauty aids were plentiful in the shops, one had difficulty in obtaining many essentia] articles. 1 am reminded, that the honorable member for Hume (Mr. Puller) has often inquired at question time why it is so difficult to obtain bicycle tyres. Essential’ goods generally are now in short supplyThe honorable member for Hume alsocited the deposits in the savings hanks last year, and as these showed a considerable increase over deposits in 3941, hu produced those figures as evidence of increased prosperity throughout the community. However, savingsbanks deposits cannot always be taken asa gauge of coram unity prosperity.
Sitting suspended from fi ‘to S p.m..
– I disagree with the conclusion reached by the honorable member for Hume when he argued that Australia was necessarily prosperous because there was a lot of money in the savings bank. Only yesterday the GrocersConference, sitting in Brisbane, issued a warning that public health would suffer unless the Commonwealth Government made it possible to immediately obtain supplies of wrapping paper and paper bags.’ It seems to me that if the Commonwealth Government cannot obtain wrapping paper and paper bags for rationed commodities, which are necessarily scarce, there must be something seriously wrong with the argument of the honorable member for Hume. Money in the savings bank earns for its owners only a low rate of interest. It is being used, for the most part, to fill government loans, but. when the Government gets this money itdoes nothing with it to increase production. The money is certainly in the banks, and the honorable member for Hume thought that this supported his argument that the country was prosperous, but it does nothing of the kind.
I cannot see any signs that the Government is .trying to economize with its expenditure. If, before the war, you went, on to a farm and found that every thing was falling into ruin, the fences were down and i lie machinery out of repair, while the owner had a considerable amount of money in the sa vings bank, you would have said to yourself, “ This man is a. poor manager. Why docs he not use. some of his money to get his farm back into full production, as his neighhours have done?” To-day, with a few exceptions, all the farms all over Australia are falling into disrepair. Certainly, there is some money in the banks, but the farmers cannot get goods which they need to increase production. When all the farms in Australia are in this condition it is a sure sign that the country is heading for a lower standard of living. We sometimes read in the papers of a man having lived in poverty and having died almost of starvation, although he had £10,000 to his credit in the bank. We say of that man that he was a miser. At the present time, thu Government’s policy is not giving the people a chance to use their savings, and so Ave have a depression of a somewhat different kind from that of 1930-33. Then, we had. the goods, but not the money; now we have the money, but not the goods. In spite of the Prime Minister’s statement that the shops are full of goods, and that the country is in a high state of prosperity, I say that we are, in fact in the midst of a depression.
– What kind of depression ?
– A depression in good farming machinery, for one thing. Every one who has had any experience of these things knows that farm equipment all over the country has deterioratedvery greatly.
I am glad that the Treasurer has at last seen fit; to make some reduction of taxes, hu; I am sorry he did not do it before. Those six months. from January last until next July are very important in Australia’s national economy. Had taxes been reduced at the beginning of this year I am sure there would nor, have been so much industrial strife. Even now the reduction is not big enough. Commonwealth revenue is increasing all the time, and from three items alone revenue will exceed the estimates by over £1S,000,000.
I believe that further concessions should have been made in some directions, and one of them is in respect of medical expenses. For instance, a man -living at Ouyen, in my electorate may have to travel to the city for treatment by a specialist. The amount spent in travelling for this purpose should be an allowable deduction. Many people sufferingfrom ill health are compelled to travel long distances to the cities for treatment, perhaps once a fortnight or once a month ; if such a. concession were granted it would be of real benefit to them. As many honorable members know, country people frequently have to board their children at high schools 20 or 40 miles away or even further. The boarding fees charged should also be exempt from tax. These may appear to’ be only small matters, but. in the aggregate they represent very heavy expenditure which has to be met by the taxpayers, principally those in rural areas. If all items associated with the education of children were subject to rebates of tax, people would be encouraged to give their children a better education. Before asking the people to be content with the small reductions of taxes proposed by this bill, the Government should set, its house in order by drastically curtailing its expenditure of public money, much of which is still maintained at the war-time level. Unless and until that be done, we cannot expect the people to be satisfied. The taxpayers are restive under the continuance of heavy taxes. Above all we must have a contented community. We are not a nation of motor cars, of railway engines, of tractors and fishing fleets, but a nation of men and women and children. Some people regard t,he nation’s wealth iii tc:*ms of material things; the real wealth of the nation is exhibited in the contentment and happiness of its people which, in turn, depends upon the maintenance of high living standards. Only by making the people contented and prosperous will this country become the great nation that all true Australians hope will be its destiny.
– I rise to deal only with two matters which were raised toy Opposition members during the course of the ‘debate. These are, first, what I might describe as the controversy between the relative merits of the rebate and deduction system’s, and secondly, the allegation .that the ‘tax schedule is unduly complicated and that the term: “ motional income “ is something which describes an instrument for the extraction -of money from the taxpayers. The -Leader of the Australian Country party .(Ma-. Fadden) made a statement with regard to the methods of rebates which I desire to repeat. I took a very careful note of the right honorable gentleman’s statement. This is what he said -
Although when the Labour Government introduced ‘ the rebate system, it may have had approximately the same effect on .taxpayers with dependants as had previous .deductions, its subsequent extension has undoubtedly mused the dice %o foe heavily loaded against them. The Treasurer -subtly -admits that -that is true by resisting all attempts on my part to have the deduction system restored. The right honorable gentleman argues that it would cost too much; in -other words, those who would benefit by the deduction system are now contributing much more to revenue under the rebate system.
That is entirely false. I issue a challenge to the Leader of the Australian Country party and say that under the proposals now before the -Mouse in respect of all incomes up to £500 a year the taxpayer is much .better off under the rebate system - that is to say, he has to pay less in taxes - than he. would have been had the deduction system,, as it operated at the time uniform tax was introduced, been continued.
– The Minister is quai if yi ug his statement.
– There is no qualification about it. I. repeat that the rebate system is of greater benefit to taxpayers with incomes of up to £500 a year. I believe it is of greater benefit, to all taxpayers, but I have been able to check it only in respect of incomes of up to £500 a year and that is why. I am limiting my assertion to that figure. After all, we on this side of the House are more con. earned with those with incomes of less than £500 a year than with those who enjoy incomes above that amount.
Mr. Fadden interjecting.
– I am prepared to give .£il’O0 to any charitable institution the right honorable member may .care to name if he cain. prove that my statement is untrue. Let us look back over the history of this .matter. The .fact is that rebates and deductions both ‘constitute methods by which some concession may he granted to , individuals because they have certain expenditures to ‘meet. Consider the case of two taxpayers earning, say, £50.0 a year. One of them may not :be married .and may have no -dependants ; the other may have a wife .and ‘children. One may have large .doctor’-s bills to meet, and the other ;may .not incur any expenses of that kind. One may make large gifts bo charitable institutions, and the other may make no .gifts -at all. Rebates and deductions constitute two methods by which these -differences ‘can he adjusted. Tile principle of allowing a deduction from net income on account of defendants was incorporated in the original Income Tax Act passed in 11915, and with certain amendments, it was continued till 1941, when a further amendment -of the act was made following the introduction of child endowment, which . abolished the deduction previously applicable to all children other than the first child. The :d eduction previously ‘allowable was £50 for a spouse or female relative, and £60 for a dependent child. The system of deductions worked in this way : A .single taxpayer with am income of £500 a year was taxed on £500 ,-a.t the rate applicable to that amount .of income. A married man with a wife and child was allowed a .deduction of £50 for his wife, and £50 for his child. Thus, a married man with .a wife and one child in receipt of an income of £500 a year, was, in effect, taxed on £400. That is how the system of deductions worked. The rebate systemworks differently. A married man with one child, whose income is £500 a year, is assessed on £500 at the rate applicable to an incomeof £500, but there is rebated to him and deductedfrom histax assessment a sumof money equivalent, in respect of a wife, to the amount of tax that he would have paid on £100 at the rate applicable to an income of £500 a year. For the first child the rebate is on the basis of £75. Obviously, the two sums which are taken into account - the deduction and the rebate - are entirely different. In fact, one is almost exactly double the other. The concession allowed to a. married man with children is more under the rebate system than under the deduction system.
– It is not.
– It is. I issue the same challenge to the honorable member for Parramatta (Mr. Beale) as I have already issued to the Leader of the Australian Country party. The honorable member for Parramatta may claim £100 for any charitable institution he likes to name if my statement is untrue.
The system of granting concessional allowances by way of rebates was introduced by the legislation providing for uniform taxes, in 1942. The change was the outcome of a recommendation made by a committee presided over by Professor Mills, and of which the right honorable member for Yarra (Mr. Scullin) and the then honorable member for Robertson (Mr. Spooner), who has since been replaced by a better representative, were members. Honorablemembers will observe that one member of the committee rep resented what I believe was then known as the Nationalist party; it was the party which is now known as the Liberal party. Thoserecommendations were contained in paragraphs 34 to 37 of the committee’s report, which read -
Those recommendations were adopted, and later were incorporated in the Income Tax Assessment Act 1942. Critics of the rebate system overlook the fact that the rebate is calculated on a . larger amount than the amount formerly allowed as a deduction. It is, in fact, calculated on an amount which is approximately twice that formerly allowed as a deduction. For example, the amount previously deducted from a taxpayer’s incomein respect of a wife was £50, whereas the rebate for a wife as calculated for the financial year 1946-47 is on the basis of £100, and under the new proposal it will be £150. I have here a table showing the tax payable by different categories of income-earners under the rebate system, and also the tax which they would have paid had the old deduction system remained in operation.
-Obviously, it would not be the same.
– The right honorable member for Darling Downs, when Prime Minister of Australia, did not alter the rates. He should not, therefore, criticize the present Government. I ask leave to have the table incorporated in Hansard.
– We should like the Minister to read what is in the table.
Leave not granted.
– I shall explain the table, and then ask leave to have it incorporated in Hansard in tabular form for the benefit of honorable members. Let us take the case of a man with an income of £250 a year. Under the rebate system a married man under the new proposals will pay £3 7s., whereas, under the old deduction system, he would have paid £10 8s.
– What does the Minister mean when he refers to the old deduction system ?
– I mean the deduction system which was in operation until ir. was replaced by the rebate system. On an income of £250 a year a married man without dependants would be £7 ls. better off under the rebate system than ii under the deduction system. The table gives particulars in respect of incomes ranging from £200 a year to £500 a year, by £50 stages. As I expect to incorporate the table in ilansard, I shall not read all the details, but shall refer to the case of a married nian without dependants in receipt of an income of £500 a year. Under the new proposals he will pay as tax £50 3s., whereas under the old deduction system he would have paid £59 9s. ft will be seen that under the rebate system he will be £9 6s. better off than under the deduction system.
– Does the Minister suggest that the rebate system is more beneficial to the average taxpayer than was the deduction system?
– I do more than suggest it; I say emphatically that it is better. The figures in this table prove it. lj Under the rebate system a married ‘man with one child will pa’y a tax of £37 5s. on an income of £500 a year, compared with £48 6s. under the deduction system, so that be will be better off by £11 ls. a year. A married man with two children in receipt of the same income will pay £30 under the rebate system, instead of £4S 6s., which he would have paid under the- old system, and will therefore benefit by £18 6s. a, year. Not only are all these categories of taxpayers with dependants better off under the rebate system than under the deduction system, but they are also progressively better off. The married man without children with an income of £500 a year is £9 12s. better off; the married man with one child is Eli 2s. better off, and the married man with two children is £18 12s. better off. That proves conclusively that the contention of the Leader of the Australian
Country party is entirely false. These concessions “are granted to meet the different circumstances qf taxpayers earning the same income. A taxpayer who mates a gift to a charitable institution may have been better off under the old deduction system than under the rebate system. I have always considered that there is something wrong about the law that exempts charitable gifts from income tax. In an extreme case like that which .1. am about to cite, I think one could say. “ Well, it is a matter that may have to be considered “. If a person with considerable capita] earned £5,000 a year from personal exertion and chose to live on his- capital and to make a gift of his income - I am assuming that he had no unearned income - he would pay no tax under either the rebate system or the system of deductions. I think that that is entirely wrong.
– Does the Minister know any one who has done that?
– I am merely stating a case - an exaggerated one I admit - in order to bring out a principle. I think it is entirely wrong that a person could be placed in the position in which be would pay no tax for the maintenance of law and order, and the services that the Government gives to the people, for which of course, they have to pay, merely because he chose to give his income to a charitable institution. Ordinarily a person earning £5,000 a. year would, under these proposals, pay £2,658 in tax, but if he took the extreme course of making a charitable gift of all his income, he would pay no tax, and the Treasurer would, lose £2,658. »
Mr.- Holt. - What is wrong with that?
– I do not think that the Treasurer should be put in a position like that. A person earning £5,000 a year1 who makes a gift of £3,000 would, under the deduction system, pay tax on £2,000 a year, and his tax would amount to £6S2. Under the rebate system lie would be taxed on the £5,000 at the £5,000 rate and would then have rebated to him the sum represented by tax on the £3,000 at the £5,000 rate, and he would have to pay tax amounting to £1,063.
– The Minister is referring to gifts to charitable institutions?
– Yes. The deduction system would be of greater benefit than the rebate system to taxpayers only when gifts were made to charitable institutions.
I doubt the wisdom of legislation where-: by a man can make n gift to a charitable institution and escape the tax that he should pay on account of his income.
The next matter that I refer to is the allegation that the tax schedule is unduly complicated and that the conception of a notional income is something whereby more money can he extracted from taxpayers. Honorable members will have noticed that I said at the outset that I wanted to talk about two matters raised by Opposition members. The honorable member for Reid (Mr. Lang) belongs to the- Opposition. In an interjection when the honorable member for Hume (Mr. Fuller) was speaking he said that it would be much simpler if the progressive rates in the schedule could be cut out. He implied that the most desirabletiling about a tax schedule is simplicity, but the simpler one makes a schedule the more inequitable .it will be. Tax everybody in the community £5 a lie.’id regardless of income and you produce the simplest schedule possible; but is it said that any one in this House, at any rate, any one on the Labour side, would support a schedule of that character? It would be utterly inequitable. When one begins to take into consideration the varying circumstances of people on different ranges of income, the schedule necessarily becomes somewhat complicated. Any argument for simplification is an argument in favour of replacing a progressive system with a retrogressive system. The honorable member for Reid asked, “What is this notional income? I have never heard of it “. The honorable member either stated a deliberate untruth or is completely ignorant of certain occurrences when he was a member of the Parliament of New .South Wales. I have taken the trouble to write out a definition i of “ notional income “, and I shall show that it was adopted by not only the Common wealth Parliament, but also the Parliament of New South Wales. The definition is as follows: -
When -a premium or other consideration is received by a taxpayer for the grant, transfer or assignment of a lease, it falls to be taxed in the year of receipt. If the whole amount of the premium is taxed at the rate applicable tn the total income of that year, the incidence of tax is unduly harsh, due to the graduation of income tax rates. .
The Royal Commission on Taxation of L934 considered this question and in view of the fact that a premium may be regarded as h commutation of several years rent made certain recommendations which were incorporated in the Commonwealth Uniform Tax Act of 193fi and in certain State tax acts.
– Is’ this a definition or a lecture ?
– It is a definition. Apparently the honorable member is learning something. He had better keep quiet and try to take it in. Section 86 of the Commonwealth Income Tax Assessment Act 1936, which provides for a definition of notional income, was introduced by the Treasurer of a non-Labour government, Mr. R. G. Casey. Mr. Casey represented the electorate of Corio. As with the electorate of Robertson, which I mentioned earlier, the former’ representative has been replaced by a much more competent individual. The effect of the application of this conception of a notional income is that the taxpayer is assessed on his actual taxable income at the rate applicable to his notional income, which, is always lower than the rate that would be applicable to the actual taxable income. The idea, of a notional income was not conceived in order to extract more money from the taxpayer. It was designed to. give the taxpayer a concession from the tax that he would have to pay if the ratewere based on his actual income.
– And it was not introduced with the uniform tax system.
– That is so. The conception of a. notional income was introduced on the recommendation of a Royal Commission on Taxation. It was introduced both in the Commonwealth sphere and in the New South Wales State spherein 1936, and it continued to be applied in New South Wales from that time until the introduction of uniform, tax in 1942. During the period from 1936 to 1942, the honorable member for Reid, who interjected that he had never heard of notional income, was a member of the State Parliament of New South Wales. Either he was completely ignorant of thetax laws of New South Wales, or he was deliberately attempting to mislead thisHouse when he said that he had never heard of notional income. I rose only to deal with the two points which I have- mentioned-. I believe that I have proved conclusively that the rebate system is of greater benefit to the taxpayers than was the system of deductions as it applied, until the introduction of the rebate system. I believe that I have al’so proved1 that simplicity is not everything in a tax
schedule ; that,, im fact,, if we are to have an equitable system of taxation, it is almost essential that schedules should be complex:. “With the concurrence of the House I shall incorporate in Ilansard the table to which I have already referred.. It is as follows : -
.-Unlike the Minister for Post-war Reconstruction . (Mr. Dedman), I have only one point to prove. . I hope to do so in a much shorter time than the honorable gentleman took to deal with his two points. First, I hark back to a telegram which,. I believe, was misunderstood by the Prime Minister (Mr. Chifley) at question . time to-day and which has a direct bearing on the Income Tax Assessment Bill. In this telegram, the president of . the Orange Graziers Association raised an important point affecting this measure. He has asked that meat sent to Great Britain as a gift should be free of tax. I shall give some background information on this- subject in order to show the complications arising from the method of assessing tax on stock. I speak on behalf of a wide stock-raising area of New South Wales. Many farmers in that State are in a dilemma. I have spoken to some of these men by telephone tonight. They are eager to make gifts of stock to Britain because many of them have not sufficient ready cash to enable them to make a direct monetary gift and it is easier for them to donate livestock. Furthermore, the making of a gift, of stock gives them a greater personal interest in the campaign to provide food for the hungry people of Britain. As honorable members know, any monetary contribution made to charitable organizations in Australia is free of tax. Unfortunately, gifts to provide food for Britain are not treated in this way. I was pleased to-day. to hear the Minister for Commerce and Agriculture (Mr. Pollard) announce that the Government is anxious that food should be sent voluntarily to Great Britain, and that its policy is to encourage the making of such gifts, particularly stock. Farmers want to help the Food for Britain campaign as much as - possible, but their gifts will be taxed under the present scheme. The Government is asking taxpayers to make- a gift with one hand and to pay tax on that gift with the other hand. Even Shylock at his worst would not demand such a sacrifice, and. I suggest that the Aberdeen Court, which everybody holds in the highest respect, would rule such a demand completely out, of order. The income tax law provides that, on the 1st July every year, stockowners must indicate, on the appropriateforms, what has happened to their stock during the preceding year. They have three courses open to them. They may state that they have sold their stock, thai they have killed stock for their personal rations and that deaths have taken toll of their flocks and herds. There is no provision in the schedule to cover stock which may have -been given away for any purpose; such as for the purpose of providing food for Britain. Therefore, every stockowner is in a’ dilemma. If a farmer has given away, say, 50 steep to provide food for Britain, he is not able to claim any tax allowance in respect of that gift.. The sheep represent capital from his business. Although he may be prepared to sacrifice that capital for a good cause, it is unfair that he should be taxed on it at the same time. There are two methods by which the tax schedule could be amended sp as to provide for this contingency, First, the gift of stock could b.e indicated in the item providing for the “ amount pf stock realized at the place of disposal “. Secondly, a separate item could be introduced providing for a deduction to be made in respect of stock given to the Food for Britain appeal- The latter method would simplify the position of men who are prepared to release some of their -valuable capital in the form of .stock as a gift to the British people. What is clearly required, and the Government should agree with me, is an amendment to .provide that any .one who complies with government policy by giving stock to Great Britain, without .accepting any payment for it, should be allowed the value of the stock as a deduction for purposes of income tax. At present, the stock-owner is in .a dilemma. He wants ,to donate stock to this worthy cause j but it is n,p,t fair that he should hay.e to pay .tax on its value. Therefore, I ask the Government to submit to the House this vital .amendment so that persons who desire .to contribute food to Great Britain may be able to do so without incurring a financial penalty.
,- The Minister for Post-war Reconstruction (Mr. Dedman) has proved conclusively to the House and the country that under the new system of rebates compared with the former system pf deductions,’ the earner of income up -.to £500 per annum will be in a better position after the 1st July next than ‘he was in the past. When a Scotsman is prepared to gamble £100 en the accuracy of his statement, we can rest a assured that he is correct.
–Lt was npt a gamble^
– In -the circumstances, I -am prepared to be on the side of the Minister if I place a bet. “The honorable member for Wimmera -(Mr. Turnbull) .expressed surprise at what te described as the small reductions of tax which the Treasurer (Mr. Chifley) has granted. The honorable member is the Only member of the Opposition who is surprised. The Leader pf the Australian Country party (Mr. Fadden) accused the Treasurer pf being unduly cautious. If everybody else is quite satisfied that the concessions .are adequate, the Treasurer hug obviously done something worth while for the community. When we examine the proposed reductions pf tax and compare taxes in Australia with those operating in Great Britain and New Zealand, w.e .see that some Australian taxpayers will be in the happy position .of paying less tax .after the 1st July next than they did before the outbreak pf World W.ar IT. The proof of my statement is contained in a booklet which was published in 1939 by Mr. R. G. Casey, a former iConjmpn-we.al.th Treasurer. Th book contains statistical tables which combine Commonwealth and State income tax payable before the introduction
Qit’ .uniform income tax. After the 1st July next, a. large number of citizens -in the various States, who now pay tax, will cease to dp so. Therefore, they will be in an infinitely better position during the next financial y.ea.r than they were before the outbreak of World War II. in 1939. if shall compare the combined Common wealth and State levy payable in the highest taxed State in 1.938-39 with the rates of income tax and social services contribution after -the 1st July next. A single person in Western Australia in receipt of £100 a year -paid income tax of l-2s. 6d. per annum. Under the new proposals, he will not pay any tax. A single person in South Australia, in receipt of £150 a year, paid in tax £4 16s. 9d. In future, he will pay £5, which will include the social services contribution and entitle ‘him to the social services -benefits provided by this Government. A personin. Tasmania, with a dependent wife, in receipt of £150 per annum, paid £2 10s. a year. In .future, ‘he will hot pay any tax. A person with a dependent Wife’ in South Australia, in receipt ,of £200 a year, paid in tax £4 4s. 4d. After the 1st July he -will npt pay any ,tax. A taxpayer in .Queensland with (a dependent wife, in receipt .pf an income of £250 a year, paid in .tax £7 ,5s. ;a year, ,and a
South Australian taxpayer in similar circumstances paid tax of £7 7s. a year. After the 1st July next, those citizens will .be liable for only £3 15s. a year as social services. contribution. In Western Australia, a man with a dependent wife, in receipt of £300 a year, paid in tax £11 10s. 6d. In future, he will pay £11 5s. A taxpayer in Tasmania, with a dependent wife and one child, in receipt of an income of £150 a year, paid in tax £2 10s.; but in future he will not pay any tax. A citizen with a wife and one child also in Tasmania, but in receipt of an income of £200 a year, used to pay £3 6s. 8d.; in future, he will be exempt. In Queensland, a. taxpayer with a wife and one child, who received an income of £250 a year, paid £6 5s. Under the new schedule, he will not pay any tax. In Western Australia a. taxpayer with a dependent wife and one child, in receipt of £300 a year, paid £S 15s. 5d. After the 1st July next, he will pay only a social services contribution of £2 5s. A Western Australian taxpayer with a dependent wife and one child, in receipt of an income of £350 a year, paid £13 14s. 2d; he will now pay £10 10s. If he had £400 a year, he paid £17 Ils. 8d. After the 1st July, he will pay £18.
A person in Tasmania with a dependent wife and two children, on £150 a year, paid £2 10s. After the 1st July, he” will be exempt from tax. So also will be a taxpayer in Queensland with a dependent wife and two children, on an income up to £250 a year. Formerly, he paid £6 5s. Under the combined system of Commonwealth and State taxation, a person in Queensland with a dependent wife and two children, in receipt of £300 a year, paid £7 10s. a year. After the 1st July, he will be exempt. In Western Australia, a taxpayer with a dependent wife and two children, in receipt of £350 a year, will pay a tax of £5 5s.-, instead of £11 9s. 2d., and a taxpayer in receipt of £400 a year, a tax of £12 per annum instead of £14 14s.
– What will people pay in indirect taxes?
– People have paid indirect taxes for years, and will continue to do so. I propose to deal with that subject later in my speech.
– Has the honorable member any figures showing the increases of taxes in Victoria following the introduction of uniform income tax?
Mi-. CONELAN.- With the introduction of uniform income tax, the people of Victoria and the Australian Capital Territory are paying their share of the administrative costs of Australia. Under the former system, residents of the Australian Capital Territroy were exempt from State tax, and the people of Victoria paid a very low rate of tax.
– Indirect taxation is now higher than it was before.
– I .shall deal with indirect taxation later. After the 1st July next, people in Australia in receipt -of incomes up to £200 a year will not pay any tax. A single person with an income of £300 a. year will pay income tax of £5 lis. and a social service contribution of £22 10s.’, a total of £2S ls. A resident of the United Kingdom with a similar income would pay income tax, and, in addition, make a contribution to- the National Insurance Fund totalling £49- 15s. The New Zealand taxpayer will pay £36 17s.
– He would obtain social service benefits as a. matter of right.
– In New Zealand, a person who ‘earns as little as £1 a year is taxed. Regardless of whether a person earns £1, £100 or £10,000 a year, he must make a contribution of 2s. in the £1.
Mi’. Holt. - There is no means test in New Zealand.
– I emphasise that Australian citizens, no matter what incomes they derive, will be in a far better position than taxpayers in Great Britain and New Zealand . after 1st July next. An Australian citizen who has a dependent wife will not pay income tax unless his income exceeds £400. Of course, he will make- a social service contribution. When we realize that members of the Opposition strongly advocated the introduction in Australia of a national insurance scheme on a contributory basis, we are entitled to expect them to support this hill.
– Those who get the “hand-out’’ have no complaint.
– The honorable member for Bendigo (Mr. Rankin) gets a “hand-out” when his parliamentary allowance is paid to him. The people of Australia, in the circumstances, will be in an infinitely better position after the 1st July next than they have ever been before. The honorable member for Fawkner (Mr. Holt) stressed the amount of money being paid by the people of this country in indirect taxes. The fact, is, however, that the people of Australia pay less in direct taxes than the people of most British countries. Take the case of Great Britain to-day. Almost everything purchased in the United Kingdom to-day is taxed. The small amount of smoking or drinking indulged in by working men is subject to heavy taxes, whilst luxuries are taxed up to 100 per cent. In the United States of America and in Canada there has been for some years past a special tax of 15 per cent, on all persons travelling. Those are huge countries, and in the course of a year many millions of people have occasion to travel. In New Zealand there is also a tax on travel of 5 per cent. For every £1 spent while travelling in that, country the traveller has to pay a special tax of ls. The Commonwealth Government, by contrast, has consistently reduced taxes since the war ended, and it has foregone indirect taxes to the amount of £24,850,000. In Europe all kinds of taxes are imposed on the people, even food being taxed. In Canada and United States of America almost every article purchased is regarded as a luxury and is subject to a sales tax of 25 per cent. Even crockery and cutlery and other ordinary household goods are liable to sales tax. Despite what, the honorable member for Fawkner said, I think those facts prove that, the people of Australia
– Can the honorable member tell us of any country where taxes per head of population average £50, as they do in this country?
– Yes, plenty of them. And what is the reason why indirect taxation is high in this country? Obviously, it is because the worker to-day has more money-
– More money in the bank !
– Yes, in the bank and in his pocket, too. Before World War 1.1. there were 250,000 unemployed in this country who could not earn sufficient to subsist, let alone deposit any money in a bank. But to-day, the workers have all got good jobs and most of them have money in the bank. Despite the amount which the Government takes out of their pay envelopes by way of tax, they have more money in pay than they did before. That is why the workers of this country’ are so grateful to this Government and why they ‘ will return it at the next elections!
The policy of Labour governments has always been to make the incidence of taxation bear most heavily on those best able to support it. During the war a Labour government imposed tax as high as 1 SS. 6d. in the £1 on incomes of £5,000; but people receiving £5,000 a year still had enough left to buy most of the luxuries they needed. What matters is not how much is taken from people in taxes, but what is .left to them. Whilst the Government may take thousands of pounds from a man with an income of £10,000, and take only, say, 10s. from a man on the basic wage, the basic wage-earner feels the impact of that taxation more than- the man who pays thousands of pounds in tax. 1. am pleased that the Government has determined to exempt from taxation any man with dependants who receives only the basic wage. Whilst a man with three dependants does have to pay £5 Ssr a year social service tax, he receives substantial benefits for it The tax amounts to only 2s. a week, and, in return for that, small contribution, he receives social services for the four units of bis family. A single man, of course, is more heavily taxed ; but he, too, recei ves a number of social services. A -married man with a family, who becomes incapacitated, receives an invalid pension, whilst his wife also receives financial assistance. If he and his wife attain the age of 65 years and are in indigent circumstances’, they each receive 37s. 6d. a week, plus 5s. endowment for the first child. In addition they are entitled to sickness and unemployment benefits. A married woman is entitled to child endowment of £19 for each child after the first, and she is en’titled to maternity, allowance. If she loses-, her husband, she receives- a. widow’s pension. People in- indigent circumstances are entitled, to funeral. benefits for their deceased dependants.. All members of the - community receive hospital benefits, and after a short time, they will be entitled, to free medicine. I invite honorable members to contrast these generous provisions with the social service scheme proposed by members of the Opposition when they were in office in 193S. Their proposals provided ‘.foi- a tas: on the ordinary wage-earner, of ls. 6di in. the fi, and that tax did not- entitle him to benefits for his wife and family. In addition, the employer, bacl to. contribute a like amount. To-day there are hundreds of thousands of people who are not making any contribution whatsoever who are eligible, for social service benefits-
– Subject to the means test.
-That is correct,, but I hope that one day,., instead of reducing taxes, the Government will abolish, the means test, and I wish that honorable members opposite, instead of crying out for further reductions of taxes, would support the abolition of the moans test. I feel that this- Government has- done a magnificent, job, and that the Treasurer should be congratulated and. not criticized by honorable members opposite. The Government is desirous- of reducing taxes, whenever it is possible.- At the last election the- Leader, of the Opposition (Mr. Menzies-), and the leader- of the Australian Country party (Mr. Fadden;) solicited the: votes of: the electors with promises:- of reduction of taxes.. On the other hand-, all the. Treasurer (Mr. Chifley) promised was that he would review taxes from time .to time. He has kept that promise to grant concessions when possible. It would be difficult, for any government to give effect to tax reductions: in less than two- or three months. The Government was returned to office in September,, and the Parliament met in November., of last year. At the- beginning of the new- year, the Treasurer examined the position, audi at the first opportunity has. submitted’ to the Parliament proposals for the granting of concessions that are to-be given effect as from the 1st July- next. The people will be satisfied with what’ the Government has done,, and it. is hoped that the granting, of: further, concessions may be possible twelve months hence. I sincerely, hope that when that time arrives’ there, may be a relaxation of the: conditions- in relation to the means test. I know how difficult.it would he) to abolish the means* test immediately; but I believe that it could be abolished- in stages’, I understand, that the Treasurer, has in mind.1 a scheme of national superannuation. Probably the application of such a scheme would make it unnecessary to. worry further about the means- test. I commend this legislation, congratulate the Treasurer upon what he is- doing for the people, and feel certain that they will be very grateful to him for it.
..^- The speech of the Minister for Post-war Reconstruction (Mi. Dedman) calls for a reply. Tha Opposition has fought the pernicious and iniquitous rebatesystem ever since the introduction of uniform income tax, which brought it about. I do not- know in what’ school the Minister learned his- arithmetic: I should say it could not have been anywhere rounds about Sauchiehall-street. It must have been in the1 Gorbals. The Income. Tax Act’ of 1940- laid it down that’ the rate of income tax should’ not exceed 16d. per £1 on the first £400, and- that the rate should be increased by l:/25d. on each ad’di’tional. £1’ of income. With the income tax rate, commencing at’ 16 l!/25d. per £1 ow a. taxable- income of £401, and increasing by 1/25’d. with- each additional £!’ of” taxable income, by means of plain arithmetic it’ can. be demonstrated that a man with a taxable- income of: £500, and a deduction of £50 for his wife, would pay a tax of £33 15s1. under the old concessional deduction system, because”- the taxable income would be reduced- to £450, on which the rate of tax would be only ls1. 6d. in the-£l’., because the rate would be: reduced by l/25d. per £1 on £50, whereas; under the rebate system,, the: rate: on- a taxable income of £500- would, be ls. 8d. in the £1; and the gross tax would be £41 13s. 4di, from which would be der ducted £4 3s. 4d., representing, a rebate of ls., 8d.. in, the £1, on.£50.- making the net tax £37 10s.
– Under these proposals, the rebate of ls. Sd. in. the £1 would apply, not. to £50, but to £150.
– That interjection illustrates the methods which the Minister has introduced in this debate. Ee did not take comparable bases on which to make his calculations. That is the sort of half-truth which is more villainous than- any lie. The Minister knows perfectly well that, prior to uniform income tax there was no basis of comparison between. Commonwealth deductions and State deductions, because each State had its. own deduction system and the system did not allow of proper comparison. It is amazing, that a Minister of State who is about to go overseas and discuss our trade relations with foreign countries should’ come into his own Parliament and attempt to deceive honorable members, no doubt most unwittingly, by specious and unfair reasoning of that description-
– If. the honorable member can prove my statement to be untrue,, my £100 is there for him. to have, too.
– I have mci desire to have my fingers touched by the Minister’s money. I only want him to speak the truth on these matters. I do not. want his money, any more than his misrepresentation., Perhaps he can argue the matter with the Commissioner of Taxa.tion. The Leader of the Australian Country party (Mr. Fadden), whom the honorable gentleman attacked, has handed, to me a copy of a letter signed by Mr. P. S. McGovern, who, I believe,, is the Commissioner pf Taxation. It is dated the 2nd August, 1946, and is in answer to certain questions that were put to him by the Leader of the Australian Country party. In paragraph 3, he stated - ‘
The effect on revenue of reconversion from the present concessional rebates to concessional deductions depends upon the amounts allowed as deductions.
Of course it does! One might as well say that if it be a fine day to-morrow it will not rain. The Commissioner went on to say -
Prior to the introduction of. the rebate system, the amounts varied considerably.
That is my case. There was no uniformity, and there is no basis of com parison between those days and to-day. The Commissioner continued -
For example, prior to 1936 no deduction whatever was allowed for a spouse, whilst only £50 was allowed for each, dependent child under the age of sixteen years. Allowances for medical expenses were on a much restricted scale.’ The present rebateable amounts were designed, upon the introduction of. uniform taxation, to give approximately the same concession as had been obtained under the old deduction-, pf, therefore, conversion were made to the basis of the- amounts now taken into account for rebate, purposes, it is estimated that the cost would be upwards of £25,000,000 at present rates. For purposes of this estimate, it is presumed that the allowance for a spouse would be constant at £100.
If it would cost the Treasury £25,000,000, on the statement of the head of the Taxation Department, to reconvert - that is the word that he used–
– All that is based on an assumption.
– I put it that statements on tax matters over the signature of the head of the Taxation Department,, addressed to the Leader of the Australian Country party, should not be based on assumption. If they are, then they are. not worth the: paper on which they are written, and they are as misleading as the statements of the Minister. If the reconversion of the taxation system to what- it was before, is to cost £25,000,000, how can there be any benefit to the taxpayers under the present system ? If the £25,000,000 is to be lost to the Treasury, it stands to reason that it must be , gained by the taxpayers. According, to the Commissioner for Taxation himself, the present rebate system “ socks “ the taxpayer. That is indisputable, because the basis upon which the taxes are calculated is higher than it was under th e concessional deduction system.
The Income Tax Act is’ a sticky piece of legislation at all times. It raises hostility partly because people do not understand the returns that they have to fill in. There’ is urgent need for a review of the whole system of income taxation in this country, both in relation to private individuals and to companies. The present system of rebates was recommended by the special taxation committee referred, to by the Minister for Post-war Reconstruction. One honorable member opposite said to-day that the Australian
Country party was represented on that committee. 1 say that it was not. I -want that denial placed on record, because it is just as well that people should know’ who was responsible for the present system. The Australian Country party was not represented by an appointee of the party. The honorable gentleman who has been described as the representative of the Australian Country party, was a self-appointee, and did not attend as a result of any decision by the party. Therefore, we have a perfect right to ask for a review of the present system, and that, I believe, should include an investigation of methods under which taxes could be assessed without making the lot of those engaged in agriculture, mining, and manufacturing, as hard as it is to-day. The present returns are most complicated, and should be simplified. A taxpayer has to supply separate returns ore numerous occasions, and has to give lists of all kinds. On the front of the return is a declaration that has to be signed by the taxpayer stating that every statement in the document return is accurate. I should be extremely surprised if the Commissioner for Taxation himself expects to get 100 .per cent, accuracy in view of the complicated forms that are presented to taxpayers. Incidentally, taxation officials themselves do not achieve 1.00 per cent, accuracy in, their assessments. Evidence of that has been given in this chamber on many occasions. We have all had the experience of hearing from constituents whose taxation assessments have had to be returned to the taxation authorities for revision. In some cases assessments have had to be amended by hundreds of pounds. Only to-day I had brought to ray notice an assessment which had been reduced by some hundreds of pounds after the Taxation Department had delayed the matter for some months. The live-stock schedule attached to business and professional income tax forms is a. model of complexity. The department asks for a statement of stock on hand at the 1st July, purchases of stock, natural increase - numbers only - gross sales, killings for rations, stock, including all natural increase, on hand at the 30th June of the following year and .then, stock losses by death - numbers only. When the department asks a taxpayer for the total value of stock on hand at the 30th June, and then, immediately under that, for stock losses by death, “ I know that quite a number of fair-minded people, and I have a strong suspicion, a few tax agents, do not understand what this schedule means at all.
– They must be very simple.
– Possibly they are electors of the Minister for Commerce and Agriculture (Mr. Pollard). Extensive information is also required in regard to wages paid. An employer is supposed to know the Christian names, marital state, and almost the pedigree of his employees, and what will be their fate in the hereafter. Also, if any one is employed under contract, the employer is obliged to make deductions for taxation purposes. That is going a bit too far, and it is about time the Taxation Department showed some sense of responsibility in carrying out its own duties instead of making every taxpayer an honorary tax collector on its behalf.
Any committee inquiring into the taxation system should examine’ the whole question of simplifying income tax forms, but I am quite sure that any fairminded person, apart from those now on the treasury bench of this Parliament, would be able to devise some better method of securing returns than the present one.
The next matter to which I shall refer is one that I have mentioned in this chamber on previous occasions, namely, the position of the Northern Territory in relation .to taxation. Under this measure, people in the Northern Territory are to bo exempt ‘from taxation for another five years. That period is not long enough. If we want to induce people to go out to this territory and undertake the hazards and difficulties of settlement, there must 1)0 some -better method of giving a. longrange exemption from taxation than is provided in this bill. Recently I read three interesting articles on the Northern Territory - probably most other honorable members have also read them - under the name of the Honorable R. G-. Casey. With, the views expressed in those articles most people will be in complete agreement. After an extensive tour of the territory, the writer put the case for a longer period of exemption from taxation than is provided in this measure. I am very much in favour of that. I believe, however, that a certain percentage of the money that accrues to settlers through exemption from taxation should be used to improve their properties. Anybody who goes to the Northern Territory is entitled to taxation concessions because he goes out to work under conditions that are entirely foreign to those operating in the southern part of the Commonwealth.
I como now to the question of assistance by way of income tax deductions to people engaged in private afforestation. Next to water conservation the planting nf areas of land in adequate rainfall country with suitable types of trees is of outstanding importance. At present, afforestation is left to the State governments, but, there are some areas of timber that were planted privately long ago. In South Australia, in the district from which I come, owners of these properties reaped considerable benefit* during the war years. Although some of the timber has been cut before it would have been in peace-time, under the present taxation system, if a. man sells a certain amount of timber in one year, the entire proceeds from that sale are added to his income for that year. With taxation rates as high as they are to-day it is doubtful whether a man, after making his donation to the Treasury, would have enough left from the proceeds of the sale of the timber to compensate him for all the rates, land tax, &c., that he had paid during the last 25 years on the land on which the timber was grown. In the case of pine forests the ground has practically no grazing value while the timber is growing. There is in Australia a very serious shortage of timber. We certainly have no immense stocks of iron ore, but we are much better off in this respect than we are in respect of timber. Less than i per cent, of South Australia is under forest timber. Professor Wood, in a book published in New York dealing with the resources of Australia, points out that in Western Australia, out of every 625 acres under forest only 3^ acres carry forests suitable for timber. In other words, only one acre out of every 1S7 carries suitable forest. The first limiting factor in regard to the growth of forests is rainfall. Pine forests and hardwood forests cannot be grown in low rainfall areas. Many of our suitable native timbers have been completely cut out. When I was in the Ministry in 1938, much trouble was experienced in obtaining suitable timber for the manufacture of butter boxes. It then came to my notice that great forests of hoop pine in Queensland and northern New South .Wales had been cut out for the manufacture of butter boxes and, so far as 1 know, those areas have not been replanted. It is a crime that such areas, especially in hill country, should be cut out, without being replanted.
– I hope the honorable member will connect his remarks with the bill. ‘
– When the bill is in committee, I propose to move certain amendments relating to the matters which I am now discussing. We could learn much from other countries about reafforestation, by which I mean, the continuous use of land, with a suitable rainfall, for the production of timber. Such countries as Sweden, Norway, Germany and other countries in the neighbourhood of the Carpathians would be able to supply, us with this information. Great Britain is notoriously deficient in timber, and during the last war terrific inroads were made into its timber reserves, which will not be established again for a long time. Under normal conditions, and even with such a quickgrowing timber as Pinus radiata, it takes from 30 to 34 years to obtain a return from afforestation. In Australia, there is poor grazing country in high rainfall districts which would be very suitable for growing timber, and we should encourage private land-holders to devote it to this use. Information can be -obtained from State Forestry Departments showing bow many trees should be planted to the acre. I would go so far as to say that if a -man plants a windbreak along his fences he should be able to ‘claim a deduction from his taxable income for the money expended. I propose to move au amendment providing that if a person plants land in a suitable rainfall area with trees deemed by a State Forestry Department to be suitable for timber he should be able to claim an income tax deduction equal to 5 per cent, of the capital value of the land on which the trees are planted. As I have said, while the trees are growing, the land-holder gets very little return from it - practically none at all in the case of pine forests, and only very inferior grazing when the laud is planted with gums and certain varieties of hardwoods. When a man cuts timber on his land he should be allowed a deduction of 3 per cent, of the capital value of the land each year for the time he has held the land under timber. Thus, if he planted the land 33 years ago he would pay no tax on his income from the timber. If he bought the land ten years ago, 30 per cent, of the return would be exempt from taxation. Timber is one of the most needed commodities in Australia to-day, and its uses are increasing every year. These inelude the making of plywood, composition board made by grinding up the wood, and also the manufacture’ of cardboard, paper, &c. Some of the States are embarking upon an active afforestation policy, but in some instances valuable forests have been destroyed by fire, and this is a tragedy. The damage cannot be quickly remedied, and it is necessary to replant the land.
My third, point might be regarded as being selfishly South Australian, but I put it to the Treasurer, none the less. Recently, an inquiry was held in South Australia into proposals for the settlement of “Kangaroo Island, partly with a view to settling returned servicemen, and it was proposed that the land should be planted with belts of olive trees and carob trees. A man who plants land with olive trees, or with walnut trees, does not receive any return for twelve yeans. In peace-time, we import about two-thirds -of -the olive oil consumed in Australia, .mostly from Italy, Spain and Greece, and .perhaps some from the Middle East. We also import a good many of the :nuts that we eat. In South Australia, there are areas which have been proved to be suitable for the production of walnuts, -olives, fee. I should like the Government :to do something to ‘encourage -the ‘planting of these areas. Once the trees are in production, they provide the raw materials which are required in secondary industries in every State of the Commonwealth. The trees may not come into full production for twenty years, but I suggest that for a period of fifteen years, any land-holder in any -district approved by a State Department of Forests or Agriculture, who puts land under olive, walnut or any other tree agreed upon by the Commonwealth and the States, should be allowed a concession for income tax purposes of 30 per cent, of the capital value* of the trees while they are being eared for. I make that suggestion because we are backward in these things in Australia. It is true that, our forefathers were more concerned with destroying rather than conserving timber. We must reverse our outlook with regard to timber and trees. We have also imported various pests into this country. Under normal conditions most, native trees in Australia propagated themselves, but, to-day, where we have not only the shorthorn, but also the merino and the rabbit, the seedlings do not get a chance. Even in the more populated districts, action must be taken to protect the trees until they reach a certain age. Encouragement must be given to people to do that work. In the outback, one of the greatest problems is the rabbit, because it will not allow the young foliage to come up and get a start. Foi” this reason, inferior, or mediocre, -country is becoming virtual desert. This process will continue unless we remedy the position. It is time that the Commonwealth not only said to the State governments that re-afforestation is necessary and itself set an example to the States in that matter, but also said to private landholders, “ If you are prepared to devote certain of .your land to re-afforestation for trees approved by your State Department of Forests or Agriculture, the Commonwealth Government will subsidize you to the extent of certain deductions of income tax “. That is not too much to ask of the Commonwealth, because, without going into facts and figures which I shall use if necessary at the committee stage, it is clear that the timber resources of Australia were never lower whilst our timber requirements were never greater than they are to-day. Great forests have been cut out. In the interior the Murray pines have almost disappeared. Very few people will spare one of those trees to-day. They are being cut out to make way for wheat and grazing. The same observation applies to the she-oak and various- kinds of gum ; the Commonwealth Government could well afford to move in the direction I have indicated.
With respect to other provisions of the bill I shall offer certain criticism at the committee stage. I am not yet satisfied with the provisions with respect to depreciation. That is a matter also which could be referred to a special committee, because whilst the present method of calculating depreciation is well understood by departmental officers, the Treasurer in reply to a question said that he was not prepared to allow lists of these percentages to be exhibited at country taxation offices, with the result that taxpayers who make out their. own returns do so in ignorance of the law of the land. It is time that that ignorance was dispelled.
..- The bill deals with two matters. First, it deals with certain reductions of income tax, and for those reductions, I suppose, most of us are grateful. In addition, it deals with other matters in respect of which, 1 suspect, some of us are not so grateful. Most members of the Opposition believe that under this measure which, consisting of 38 clauses, amends the principal act consisting of between 200 and 300 sections, the reductions of tax proposed’ are not sufficient. We say that the rates are too high notwithstanding the concessions which, the Government now proposes. On the other matters to which I shall now refer, we are still less satisfied.
In particular we direct attention to a certain point of view which pervades this legislation. I am glad that the Prime Minister and Treasurer (Mr. Chifley) is now present, because I believe that he should hear the remarks I am about to make. One thing to which we object in all these matters of taxation is what I might describe as the official point of view. I am a believer in the rectitude, uprightness and, by and large, the efficiency of our public servants. I believe that most government servants occupy their positions on their merits, and serve the country to the best of their ability; but nobody who has had experience of governments and the operations of government instrumentalities can deny that there does tend” to creep into the activities and. point of view of those who purport to serve the people an official attitude. Those officials cease to be human beings and individuals in the way we are, and cease to think in terms of what is best for ordinary individuals. They inevitably think of things from a detached, cold-blooded and, sometimes, ruthless point of view.
– In many respects their point of view is plain, down-right ruthlessness. I shall give a good illustration of what I mean. I do not wish to be thought uncharitable. I have in my profession worked with hundreds of government officers for many years, and many of them are my personal friends. I pay tribute to them for the work they try to do; but somehow or other any one who works for the government tends to get out of touch with the ordinary citizen. That is demonstrated by a number of provisions in this bill. Section 44 (1) of the principal act provides that the assessable income of a shareholder in a company shall, if he is a resident, include dividends paid to him by the company out of profits derived by it from any source. Then in the memorandum in black type, indicating the words proposed to be inserted .in the principal act, we read - 1. (a) The operation of the last three preceding sub-sections shall not be affected by the provisions .of paragraph [g) of section 23 of this act..
We need not worry what paragraph, q says, but I draw attention -to, the comment which is added at the- instance and instigation of the deparmental officers - the officials I ‘have described - which is attached to the end of the memorandum and indicates what they have to say about this proposed amendment of section 44 of the principal act -
This interpretation of section 44 was successfully challenged before the Full High Court in Reid v. The Federal Commissioner of Taxation. By judgment delivered at Melbourne on 20th March, 1047, the court upheld ‘the taxpayer’s claim that section 23 (?) applied to exempt from Commonwealth income tax dividends derived by a resident of Australia from sources out of Australia, if those dividends were not exempt from income tax in the country where they were derived.
Just listen to the next lovely sentence which gives the whole show away I The departmental officer who was responsible for that comment, and who is also responsible for this amendment, went on to say -
This defect in the law disclosed by the judgment of the court will be remedied by the insertion of sub-section (1a) in section 44. “What a fine state of affairs! This defect in the lav.’! I point out that at all times until this amendment was proposed nobody ever thought that people could be taxed in the way in which the Commissioner had sought to tax them as disclosed in the case Reid v. The Federal Commissioner of Taxation. At all times until 1946, it had been assumed and taken for granted, and indeed on .the plain reading of the act it was obvious, that this particular sort of income was excluded.’ Section 44 has been in the act for twenty years, but the Commissioner, having a brain-wave, decided to squeeze the last pip from the poor unfortunate orange - that is, the taxpayer, including myself and other honorable members-
– The last pip from the melon.
– Perhaps melon would be better. The Commissioner decided to tax such income, and of course, many taxpayers, because they are men of small means like most of us in this chamber, pay up because they cannot afford to do otherwise. But Reid dug his heels in and fought, and the High Court, by a unanimous decision said, “ This is wrong, and it was always wrong”. Indeed, it was always wrong and, until 1946, the Commissioner did not dare to try it on. But the law, as it always stood, having been so affirmed by the High Court of Australia, lo, the official mind got to work, and the Commissioner of Taxation - not the Commissioner himself, maybe, but the official mind of some satellite who for all I know might even be a personal friend of mine - composed this magnificent piece of English, saying, “ The defect in the law disclosed by the judgment of the court will be remedied “. I suppose it will be said that it is a defect in the law if a person cannot be taxed 100 per cent., leaving him nothing. One of the things to which we object in this legislation is that there is so much of the official mind, and so little sympathy and understanding of the taxpayer’s point of view.
Mr. ACTING DEPUTY SPEAKER. (Mr. Burke). - We have listened to a lot about the official mind ; we should like to hear more about the bill.
– I am addressing myself to a particular section of the income tax legislation. I am entitled to describe in whatever words I like to use that the Commissioner of Taxation or his officer has exhibited a particular type of mind.
– The Chair has heard enough on that point. I ask the honorable member to deal with the bill.
– The honorable member is dealing with the bill.
– The honorable member for Richmond must refrain from criticizing the ruling of the Chair.
– I rise to order. The honorable member for Parramatta was dealing directly with the bill. I understand that if an honorable member addresses his remarks to the bill, irrespective of whether the Chair agrees or disagrees with what he says, he is in order.’
– There is no point of order. The Chair has listened at length to what the honorable member for Parramatta has described as the official mind. I now ask him to deal with the bill.
– It so happens that 1 have finished my comments on the official mind. The really unsatisfactory features of the bill are these : In the first place we object to this piece of legislation, which deals in great detail with amendments of the original vast act of some 300 or 400 sections, because not le Si slightest attempt has been made at simplicity. It has been said by the Minister for Post-war Reconstruction that it is impossible to have simplicity in income tax legislation. With respect to the Minister, I describe that statement as the most arrant rubbish I have ever heard in this Parliament. I direct attention to the great Finance Act passed by the British Parliament in 1920 under which all income tax is now collected in Great Britain. There is a piece of legislation which the draftsmen of he b bill now before us might very well examine. It may be true that many citizens of Great Britain would refer to the British act. as a complicated piece of legislation; but compared with the bill and act now before us it is a model i if simplicity. When the Minister for Post-war Reconstruction save that it is not possible to have a greater degree of simplicity in income legislation I do not know whether lie is ignorant or cynical. At all events, his statement is completely false. In the bill now before us there has been no attempt at simplicity, and in dealing with it Government spokesmen have made no attempt to deal with the question of deductions on the oone hand as against rebates on the other. The Minister for Post-war Reconstruction attempted to defend the rebate system and, in the teeth of all the facts, suggested that this warm-hearted Government, out of its sympathy and loving desire to help the taxpayers of Australia, had really adopted the rebate system because it was kinder and easier on the taxpayer than was the deduction system. What nonsense! We all know that the rebate system bears harder on the average taxpayer than the deduction system did.
In a. large amending measure of this sort an attempt should also have been made to give greater benefits by way of medical and educational concessions. Menlion of the phrase “ educational concessions “ brings me to the main matter which made me rise to take part in this debate. For a long time outside of this Parliament great pressure has been brought to bear the persuade the Government of Australia to exempt from taxation the allowances granted to students to go abroad under scholar ships to study at foreign universities and schools. From the universities of Sydney, Melbourne, Perth and other capital cities, there go forth year by year, young men and women, 1: U cream of this conn! ry and the best brains that it can produce, to study abroad. Because of their skill and ability they have been chosen by these seats of learning to study abroad in the expectation that, having acquired greater knowledge, experience and learning, they will return and dedicate these things to this country. I see one honorable member opposite laughing.
– No wonder!
– He does not understand the need for Australia to have the benefit of learning.
– None of the workers’ children can go abroad. I know that much. ,
– I am glad of that interruption, .because it exemplifies the tragic bigotry and class-consciousness of some members of the Australian Labour party. They are unable to realize that Australia will not be worth a snap of the fingers 20 or 30 years hence if it does not have the benefit of the learning and culture of other parts of the world. Without that democracy is doomed, and the country is doomed. There are hundreds of educational institutions, not only universities but also schools, which, because of generous benefactions by private donors, have established scholarships tenable at universities abroad. . They are awarded to the best brains of our youth to enable them to continue their education and return to this country to benefit it with their learning. Before August, 194-1, scholarship money was not taxed one penny. In 1935, for instance, the Commissioner qf Taxation wrote to the Sydney University, as follows : -
With reference to your communication of the 15th instant, L desire to advise you that the income received from university scholarships is not subject to tax.
In August, 1941, that policy was reversed. There was no change in the statute. Through all the years up to August, 1941, the Commissioner of Taxation read the Income Tax Assessment Act as meaning that scholarship money was not taxable.
Tkii.ii, probably under pressure and look-, ing around for money, he changed his tune and began to call upon the trustees of scholarship funds to deduct income tax at the source from the money paid to students to enable them to travel and study abroad. I remind the House that that was done without a single change being made in the law. The Commissioner of Taxation completely reversed his former opinion. Not only did he do that, for he also took a different view from that taken by the Parliament of the United Kingdom. Section 3S of the Finance Act 1920, passed by the Parliament of the United Kingdom, specifically exempts scholarship money from tax. In committee I propose to move an amendment for the inclus’ion of a similar provision in the Income Tax Assessment Bill. Even before that provision was put into the United Kingdom law, scholarship money was exempt from tax.
Let us now see how this decision of the Australian Commissioner operates. The Gowrie scholarship, which enables an Australian student to study at an English University, is worth £475 a year. The tax is no less than £126. The exchange of £87 further reduces to £262 a year the money that the student has to live on for three years while studying at Oxford or Cambridge or whatever other English university he chooses. That is what this Labour Government, which professes’ a belief in education, really thinks of it. I remind the House that all sorts of representations were made to the Government, but it would not budge. In addition, students have to pay their own travelling expenses. Every other British dominion pays the’ fares of scholarship students travelling overseas, but to its eternal shame Australia does not. Representations made to the Government over the last ten years have failed to move it. One Sydney University scholarship is worth £375 ; but when tax and exchange are deducted the unfortunate student is left with only £180 a. year to live on. From that he has to provide himself with food and lodging, clothing, and books and pay lecture fees and fares. The Government which purports to believe in education has resisted every representation made to it to lift the burden of taxation from these young men and women. I am glad that the Treasurer is present because 1 direct his attention to the fact that sons and daughters of wealthy people are not the. sufferers from this policy, because their parents can afford to help them. I know that several honorable gentlemen opposite sympathize with my views because they know that the sons and daughters of the poor are the sufferers. The son or daughter of a poor man who is so brilliant scholastically - perhaps a genius - as to win a scholarship at a university abroad, often has to refuse if because of the impossibility of living on £180 a year. I know that from experience. What sort of a Labour government is it that tolerates that state of affairs. A tax on learning is’ the worst thing that can be done in a democracy. If you deprive democracy of learning, you deprive it of its very life-blood and, in the end. it will perish.
But the matter does not end here. What, about the anomalies of this extraordinary situation? I shall enumerate to the House two or three things which result, from the attitude of the Government. The Treasurer knows what I am talking about, because many of these cases have been represented to him again and again. I have before me files of papers which have been submitted to me on this subject. Many other honorable members are aware of the anomalies that are revealed in them. I .remind the House that none of these injustices occurred .before 1941 and that there has been no change in legislation which would justify any change of attitude by the Taxation’ Commissioner. I suppose that all that happened was that the Commissioner and his officials were looking for more money and thought, “ This is a push-over “, and decided to tax these amounts at the source. An extraordinary -thing is that, in the cases of several scholarships, such as the Nuffield, Carnegie, and . Rockefeller, which, oddly enough, are tenable in America, the Government has conceded the principle which I espouse and, by reason of one adjustment or another, taxes are not levied upon them. In the case of Rhodes scholarships also, where a recipient can prove that he is no longer resident in Australia, he is not liable -to tax. In other words, if a Rhodes scholar happens to be married, and if he takes his wife abroad with him and does not indicate to anybody that he will ever return to Australia, the Taxation Commissioner kindly says to him, “ You are not liable to taxation “, and collects nothing ‘from him. However, if a Rhodes scholar happens to be married or to have a family in Australia, or if he says inadvertently that be intends to return to Australia some day, thus making himself an Australian only temporarily resident overseas, the Taxation Commissioner insists upon bis pound of flesh and taxes him here. Another anomaly is that if these sums are -granted to students as lump sums for a whole period, the Commissioner does not tax them, whereas, if they are granted to students in periodic payments from year to year, they are taxed. That is -inexplicable to me. It seems ‘that the Commissioner says to the University concerned, the Gowrie Trust, the Lucas Tooth Trust, or whatever trust it may be - there are dozens of them - “ Give us the money “, whether it be £S0, £120 or £200, and these authorities are bound to disgorge. In that event, the scholarship-bolder never gets the money at all. The reason why this should be so, whilst lump sums are not touched, is unknown to me or to any of the trustees.
Another disadvantage and anomaly is that these demands are made at the source. They are made from the trustees or from the universities, with the unfortunate result that nobody has any right of appeal. A university has -no right of appeal, because it is not being deprived of anything. The scholarship holder has no right of appeal, because his only right is against the university, not against the Taxation Commissioner. In practice, it is extremely difficult to have these matters challenged at law. This is an important fact, because it is the opinion of better legal minds, than mine that these deductions are illegal and are not justifiable under the income tax law as it stands. Still another anomaly is that under various forms of pressure, the Taxation Commissioner has, in fact, allowed deductions for expenses by way of books, lectures, aid matters of that sort, but, he will not allow any deductions for board and lodging. As everybody who has any experience of scholarships abroad must know, board and lodging amount to nine-tenths of the expenses of a scholarship. Therefore, the slight concession which the Commissioner has been forced to make as the result of years of pressure brought to bear upon the Treasurer and his officers by trustees all over Australia is, in fact, not worth very much.
Perhaps the most anomalous thing of all is that the Taxation Commissioner taxes a scholarship holder not upon the basis of income derived from property, but upon the basis of income derived from personal exertion. It does not require a lawyer to point out that, whatever else these sums may be derived from, they are not derived from personal exertion. We on this side of the House, and some of the best legal minds in Australia, say that, these sums are not income at all, but allowances, and therefore that they should not be taxable. We believe that, if the opportunity were afforded to the unfortunate recipients, they could challenge the Taxation ‘Commissioner’s decision successfully in the High Court. Whether that be so or not, the fact is that these amounts are certainly not income derived from personal exertion. Nevertheless, no doubt because he bas a guilty conscience, the Commissioner taxes the recipients upon the basis of income derived from personal exertion.
The reasons given for this action have been various. The Treasurer, in his inimitable way, gives no reason. He. merely waves our claims aside, and says “No”. The Minister for Post-war Reconstruction, is perhaps not so wise. He purports to give a reason. He says-7-and I quote his word’s-^” There are weighty considerations why this concession should not be made “. In all of these files that I have here- there are perhaps 70’ pages’ of them- -he has- never given to any of these persons who have given information to me any real reasons, weighty dr otherwise,, why these concessions should not be granted. He merely says, “ There are weighty considerations-“. He says’ that, if he did as: I suggest, he would create a precedent for somebody else. What has precedent to do with it ? Is- not this- the simple issue: Does- Australia want the cream of its manhood and womanhood to gut the benefit of the world’s knowledge, information and culture? Does it want the best people in this country, the young people, to go abroad and get the i,est of the world’s knowledge and come brick and use it in the service of Australia? If so, then precedent has nothing to do with the matter, and the exemption must be granted, as has always been done in Great Britain, and as was done in Australia prior to 1941. If you tax learning you “starve Australia - not in a physical sense, because nobody will get ls. a week less in the basic wage, but in the most important sense of all, you starve this country because you deprive it, ‘of knowledge, and without knowledge this country will truly perish in the long run. In the committee stage, I propose to move an amendment along the lines of section 2S of the British act. I am well aware, from personal knowledge, that several honorable members on the Government side of the chamber will agree with what I have said, and I hope that, in committee, they will have the courage to stand up and, once and for all, strike a true blow for education in Australia.
.- For the comfort of the Treasurer (Mr. Chifley) I do not intend to make a formal second-reading speech. I shall be brief,’ but before the bill goes into the committee stage I shall raise for the consideration of the Treasurer a point which I believe has so much justice that he will be prepared to attend to my suggestion and consider introducing an amendment at a later stage.. However, before I deal with that point. I cannot resist speaking on the contentious question of the rebate versus the concession system, of tax. This question has been debated in the House on. many previous occasions. It has come before the House time after time since I have been a member, and, in September, 1944. when we were discussing a bill which dealt with tax assessment, the whole subject was debated on the basis which the Minister for Post-war Reconstruction ( Mr. Dedman) used to-night. If anything could possibly tend to confirm the confusion already existing in the minds of the people concerning income tax assessments, it was the speech made by the Minister to-night. He dealt con- stantly with two sets of figures which have no possible basis of comparison, as the honorable member for Barker (Mr. Archie Cameron) pointed out. When this matter was before the House in 1944, there was a great deal of argument concerning the case of a man supporting three children and earning £500 a year. On that occasion, Government supporters argued there would be a considerable gain for the taxpayer under the rebate system as opposed to the concession system. I was not satisfied with the figures which had been adduced up to that point, nor with the basis of argument, so I approached the Treasury officials and obtained certain figures from them. I found that a man, in receipt of £500 a year, with a wife and three children, had a gross tax liability, under the terms of the bill then before the House, allowing the same basis of exemptions and the same rates of tax, of £136 13s. He would receive a rebate of £72 16s., and therefore his net tax would be £63 17s. I asked the officials whether they would, on the same basis, compute the. figures under the deduction system, and I found then that his net liability would be only about £40 a year or nearly £24 loss than under the rebate system. That must prove that the whole basis of the contention which has been advanced this- evening is false, and that the whole system plays, not into the hands of the taxpayer, but into the hands of the Treasury.
I return now to the matter which I mentioned earlier. Under present conditions, women employed in industry are allowed to earn only a certain percentage of the rate for males in the same occupation. Yet, if any one of these women’ happens to be a breadwinner for a family, she does not receive. from the Taxation Department any concession other than that which .a male worker receives. I suggest to the Treasurer that, within the framework of the income tax legislation, there is a possibility of making good this very grave injustice to a woman who is the breadwinner for a family.’ Recently, I received a letter which touched ire very deeply, and, as I intend to show it to the right honorable gentleman, I believe that it will touch him also. In addition, I hope that it will touch him in a different way from that in which it touched’ me ; that is to say, in the colloquial sense of the word. My correspondent, who is a school teacher, i3 a widow and supports two children. She points out that a young man on her classification draws a larger salary than she does. If he has a wife and one child, or two dependants, the number which she herself maintains, the young male teacher pays less tax than she does. She writes -
I pay as much rent as he does. I presume my children eat as rauch as his child does. Where, then, are our laws of equality and fairness which are so much boasted about by our Ministers?
I commend that suggestion to the Treasurer. I feel sure that, with his generous spirit and his love of fair play, he will give to this matter a great deal of consideration. I hope that, before this bill is passed, the right honorable gentleman, in response to this appeal on behalf of the women of Australia, will submit an amendment to give effect to my suggestion.
– in reply - I do not propose to examine at great length many of the suggestions that have been offered in this debate. The Leader of the Australian Country party (Mr. Fadden) has submitted an amendment which is designed to make the proposed reduction of tax retrospective to the 1st January, 1947.
– The appropriate amendment will have to be moved to the Income Tax Bill.
– The right honorable gentleman proposed that the . reductions of tax should operate from the 1st January, 1947. One matter which all honorable members must bear in mind is that it becomes increasingly important that the finances of the country shall be kept on an even keel, and that expenditure of every kind shall be met as far as possible from taxation. I am not too sure that the proposed reductions of tax are not overgenerous. I believe that I am erring on the side of generosity. I have tried to look at prospective budget figures, not only for 1947-48, but as far ahead as 1950. Certain commitments will accrue in future which are not recurring expenditure, such as the payment of war gra tuities, and I am not too sure that in the period up to 1950 taxation should not bc retained at such a scale as to provide reserves to meet those contingencies and commitments. It is more than possible, if one heeds the warnings of those best qualified to speak on the subject, that there may be some recessionary movement, particularly in the United States of America, within the next two or three years, or even earlier. I like to believe that while I am Commonwealth Treasurer, and acting in that capacity as the agent of the Government, the Commonwealth will always be prepared to face some measure of recession. .1 am not attempting to predict the extent of, such a recession, but it is generally considered that some recession will occur at least within the next couple of years. After six years of war, and the ensuing transition period to peace-time conditions, theGovernment has tried, by its taxation policy, to ensure that expenditure shall have some reasonable relationship to income. It is for that reason, and no other, that I consider that no justification exists for the adoption of any course other than which we have followed, but at the same time I feel some doubt as to whether the very extensive concessions which are proposed should be made. As honorable members are aware, between 75 per cent, and 80 per cent, of the taxpayers in receipt of incomes less than £800 a year will pay only one-half of the amount of tax. that they paid when taxes were at their peak during the war-time period. That is a very substantial concession. No honorable member can, with justification, deny that. The honorable member for Fawkner (Mr. Holt) endeavoured to picture me as being a financial conjurer, who granted remissions of one form of tax amounting to £18,000,000 or £30,000,000 but recovered that concession in some mysterious way by the imposition of some other tax.
– That occurred with sales tax.
– I am not permitted, during this debate, to digress by engaging in a discussion of sales tax. However, the view expressed by the honorable member for Balaclava (Mr. White) completely contradicts the contentions of some members of the Opposition that Australia is suffering to-day from economic stagnation. W-hen debating this bill they have declared that the incomes of companies and individual taxpayers are most buoyant, and that even my optimistic prophesies -were an under-estimation of receipts from taxation. I have- pointed out that Australia is enjoying a period of full employment and that industry is booming. Industrial and commercial buoyancy is very great. Despite the Story which some members of the Opposition have told, this buoyancy has produced additional revenue. When that position has been clear, the ‘Government decided to grant substantial remissions of income tax. that brings us to cold, hard facts. The honorable member for Fawkner indicated that in the aggregate taxation was greater than ever it was before. He Overlooked the fact that the average citizen is not concerned with aggregate taxation. The average citizen is not interested in what the whole of the community pays; his sole interest is in what he pays. Accordingly, I shall bring the honorable member foi- Fawkner right down to earth. A’s .members of Parliament receive an allowance of £l,00() a year, I propose to examine the case of a man in receipt of that income, because it will ‘bring home the facts to a very sensitive nerve in the human constitution - the “hip-pocket nerve”. Under the peak rates of ‘tax in war-time, a married man with a dependent wife and two children, in receipt of £1,000 per annum, paid £2S’5 4s. Under the proposed rates he will pay £159 13s. That is a concrete instance that the average taxpayer understands. This applies also to .persons on the lower ranges of income. A man with a dependent wife and two children, in receipt of £350 a year, will not pay any tax after the 1st July next. At present, he pays £5 5s. That compares with £13 which a taxpayer in similar circumstances pays in the United Kingdom, and £26 5s. in New Zealand. That is a complete reply to the statement of the honorable member for Fawkner, when he complained of the heavy tax burden borne by Australians, compared with that borne by taxpayers in the United Kingdom and New Zealand. At the same time, I agree that rates of tax on the larger incomes In Australia are ‘high.
The honorable member for Fawkner stated that indirect taxation in Australia was very high. I inform him that indirect taxes which Australians pay are less than those which the people of the United Kingdom ‘and New Zealand pay. One honorable member asked me to supply the figures for the Dominion of Canada. I am not able to do that very well, because taxation conditions in Australia, are not comparable with those in that dominion. Australia, the .United Kingdom and New Zealand have a single taxing authority, but in Canada a number of provincial taxes are imposed. Incidentally, in the United States of America, different taxes are levied in the various States. However, I shall circulate among honorable members a schedule showing the position. In Australia, indirect taxation is £22.9’5 per capita. In New Zealand, the figure is £27 and in the United Kingdom nearly £42 a head of the population. Those are cold hard facts. They reveal that in indirect taxes the Australian public pays less than the people of New Zealand or the United Kingdom.
The honorable member for Parramatta (Mr. Beale) advocated that expenditure on education should be allowed as a deduction for income tax purposes. I ‘point out that the Labour Government has granted greater assistance to education than all its predecessors. Out of taxation revenue, we expend .£16,000,000 P’t annum for the purpose of assisting education. A considerable proportion of that money is devoted to paying subsidies to the sons and daughters of persons whose financial circumstances do not enable them to send their children to a university. This assistance to boys and girls of parents in comparatively poor circumstances has not been granted by any previous Commonwealth government. I remind “honorable ‘members of the old saying, “ Good wine needs no bush”. Remissions of tax amounting to £34,000,000 a year and reducing by onehalf the war-time payments of tax of 75 per cent, of the taxpayers, do not require any defence. I was called upon in this House to defend increases of tax a few years ago, hut now I consider that, in justice, “honorable members should congratulate me on having granted these remissions. I realize that criticism of the Government’s measures, whether they be good or bad, is a prerogative of the Opposition. I presume that that policy has been adopted on this occasion. The rebate system has been discussed by several honorable gentlemen opposite. The Leader of the Australian Country party had a good deal to say about it. Whether or not he was logical, he certainly was very persistent in his advocacy of the concessional deduction system in preference to the rebate system. If the same concessions were given under the one as are now given under the other, the figure of £150 or £100 that has been mentioned would probably have to be halved. I believe that even the Leader of the Australian Country party would find that, psychologically, that would be difficult to explain to taxpayers. I have explained to the House previously how the rebate system came into operation. A special committee, consisting of an independent chairman, Professor Mills, the right honorable member for Yarra (Mr. Scullin), and the former member for Robertson, Mr. Spooner, examined all the concessions and exemptions in the different States, and decided that the most equitable way of dealing with the subject was to give concessions in the form of rebates rather than as exemptions. I do not think it is very difficult for honorable members to realize that a man with an income of £5,000 a year who pays income tax at the rate of 16s. in the £1 would have his tax reduced by £120, whereas, a man on the lowest range of income would have his tax reduced by only £1S 17s. 6d., if each were granted an exemption of £150 for his wife. It is quite evident that there would have to be a drastic limitation of the application of the exemption system, otherwise the man with the high income would obtain a tremendous advantage, and .practically nothing would be gained by the man on the lowest range of income. As a matter of fact, a mau with a wife and two children whose income is £300 a year will not pay income tax under the proposed rates. That will give to men who have family responsibilities a concession’ which, in all the circumstances, I consider is completely warranted. When I issue the scales and the schedule, they will certainly te given to the press, but. I do not anticipate that they will be published. Members of both the Opposition and my own party will be able to see in cold black and white a complete contradiction of the statements that have been made from time to .time by the honorable member for Fawkner. The Government has faithfully kept the promise that when circumstances permitted both direct and indirect taxes would be reduced. The honorable member for Fawkner tried last week to convince the House that an act of wizardry had been performed, in that £30,000,000 which had been given away had immediately returned to the Treasury. I repeat, for the benefit of the honorable member, that members of the general public are not at all interested. in the aggregate amount of taxation that is paid by the community as a whole. Their sole interest is in what is paid individually.
– I referred to both direct and indirect taxes.
– In response to the honorable gentleman’s appeal, I have bad figures prepared showing what the direct, taxation is in New Zealand, the United Kingdom and Australia. They show that a man with a wife and two children whose income is £1,000 a year paid at peak war-time rates an income tax of £285 4s. Under the new scale, be will pay £159 13s. The proposed rates are, if anything, over-generous. Nevertheless, the Government is prepared to take some risk, in the belief that its policy of maintaining full employment in this country will continue to produce that buoyancy which the Leader of the Australian Country party said was evidenced in the increased revenue derived from direct and indirect taxes, particularly the latter. The only real test of prosperity in a country is the employment of everybody who wants to be employed and earning money. That that state of affairs exists is proved entirely by the figures which members of the Opposition have cited with a view to illustrating that the returns have exceeded my estimates. We are confident that that position can be maintained. Should our expectations be realized, the Government will be prepared to be, perhaps, even more generous.
– Is “ generous “ the rightword to use ?
– It is. I am trying to look ahead to 1950, and to anticipate what will happen year after year. The Government is adopting a long-sighted, not a short-sighted, policy. It will leave in the financial history of this country an almost phenomenal record of a practically balanced budget, after six years of economic travail, and the transition from war to peace-time conditions. More commendation than that I do not think any government needs when making an appeal to the people.
Question put -
That the words proposed to be left out (Mr. Fadden’s amendment) stand part of the question.
The House divided. (Mr. Speaker - Hon. j. S.Rosevear.)
Majority . . 13
Question so resolved in the affirmative.
Original question resolved in the affir-. mative.
Bill read a second time.
Clause 1 agreed to.
Customs Charges on Public Servants’ Luggage.
Motion (by Mr. Chifley) proposed -
That the House do now adjourn.
– I was not present in the House on Thursday last when the debate occurred on the Commonwealth Literary Fund, but in the course of the debate the honorable member for Parkes (Mr. Haylen) inadvertently fell into error in the reference he made to Mr. Ellis and a manuscript submitted by him to the Commonwealth Literary Fund a number of years ago. At the time the incident referred to occurred, I was acting as chairman of that fund, although I had gone out of office, and I feel now that in justice to Mr. Ellis I should state the facts quite shortly. Mr. Ellis wrote a work on the life of Lachlan Macquarie and submitted it to the fund. After review by members of the advisory committee, the secretary of the fund, on my direction, wrote to Mr. Ellis as follows : -
It has been advised that the members of the Advisory Board fully appreciate the value of your work, and that they are prepared to recommend publication, subject to a reduction in size as suggested.
It is right that I should mention that fact, because it indicates that the work was not rejected. I realize that the honorable member for Parkes was speaking ofevents which occurred a long time before he became a member of the committee and that is why he fell into error, but having regard to the discussion which took place, I feel that in justice to Mr. Ellis I should mention this matter.
, - A few days ago I asked questions of the Minister representing the Minister for Trade and Customs in these terms-
I expected that those questions would have been answered quite easily by the Department of Trade and Customs because there are not a great number of public servants returning to Australia from abroad, and it should have been easy to ascertain who the public servants concerned were and the date of their return to Australia. That information could have been obtained simply by referring to ships manifests, which show the a mount of luggage carried for each individual. The freight paid by the Commonwealth in each case should have been readily available. But consider the answer given bythe Minister for Commerce and Agriculture (Mr. Pollard), who said -
I have consulted the Minister for Trade and Customs (Senator Courtice) who has informed me that a special record, of the transactions to which the honorable member referred is not kept by the Department of Trade and Customs. To obtain the information required would involve a lengthy investigation in each State of the Commonwealth, and this, the Minister advised, could not he justified in existing circumstances with the department heavily understaffed. If, however, the honorable member will give a reference to the case or eases whichhe has particularly in mind the Minister will obtain and supply him with the details sought.
If that is not an obvious evasion of the question I should like to know what is! The Department is saying in effect: “ What does the honorable member for Wentworth know with regard to these matters, because unless he gives us specific cases we are not prepared to obtain any information which he desires in this regard. If he has not got that information we do not propose to go any deeper into it; we propose to keep it a close secret.” The general public has a right to know whether these charges are well founded. I shall give the Minister information in regard to three specific cases. For obvious reasons I shall not give the names of the officers concerned, but 1 shall give the names of the vessels on which they travelled. In August, 1945, Trevanian brought back ten cases and six bundles of goods consigned to an officer of the Division of Import Procurement, Melbourne. On these goods £46 18s. 6d. was paid in freight out of Commonwealth funds.
– By whom?
– No doubt by the department. In May, 1946, Whistler carried another officer of the Division of Import Procurement, who brought with him seven cases of luggage, freight on which was paid out of Commonwealth funds in New York. I come now to a more recent case relating to bill of lading No. 1009, Melbourne. The vessel is City of Capetown, which arrived in Sydney on the30th April from New York. . The vessel carried sixteen pieces of personal luggage, the property of an official employed on behalf of the Commonwealth in Washington, United States of America. The cubic content of the luggage was 7 tons, and its dead weight13/4 tons. The freight payable by the Commonwealth on these goods is £92 4s. 9d. The authenticity of the information that I have given in regard to these three cases can be ascertained readily from the Department of Trade and Customs. I should like to know how many officials have been allowed to return to this country carrying luggage exceeding 1 ton in weight, how much the Commonwealth has been called upon to pay in freight on such luggage, whether the contents were declared; if so, what they were, and what was the justification for officials carrying such large quantities of luggage at the expense of the Commonwealth?
These are straights-out questions. Tie instances that I have given are specific. The Minister should not have any difficulty now in supplying me with the information that I .seek, il see no reason why officials who leave this country with perhaps a few suit-cases should be allowed to return after a short stay abroad bringing tons of luggage at the Commonwealth’s expense. The Minister’s reply to my question was most evasive. He said, in effect, “ We shall call the honorable member’s bluff. We shall see whether :he knows anything, or whether this is a stab in- the dark. If he does not know anything, we shall just forget about the matter, but if he .has some information we shall ‘find out just what it is ‘’. I have given portion of the information that is in my possession. I shall not show my ‘full hand until I receive some answer from the department itself.
– I support the honorable member ‘for Wentworth (Mr. Harrison). I realize that the Minister for Commerce and Agriculture (Mr. Pollard) who represents the Minister for Trade and Customs in this chamber, is at a disadvantage. This emphasizes the point that I have made on several occasions that the Minister for Trade and Customs should be a member of this chamber. The honorable member for Wentworth believes that preferential treatment has been given to certain officials. He put certain reasonable questions on the notice-paper and received an evasive ‘ reply. He has now given specific instances of what he says is taking place, and I believe that the Government should make available to him the information that he seeks. The treatment of Ministers, members of Parliament, and the general public by the Department of Trade and Customs should be impartial. If it is not, both the Government and the department are suspect. There is no need for this suspicion, and I am quite sure that the Government does not desire it. It is only a matter of asking for the information required. All the entries have been made and the records should be readily available. For the good name of the Department, the information should be forthcoming.
– The honorable member .for Wentworth -(Mr. Harrison) has been more- specific to-night in regard to’ a question that he asked some days ago, and the information that he has now furnished may make it possible for the Minister for Trade and Customs to be more specific in regard to the prospect of furnishing the answers. It must be obvious to the honorable member for Wentworth however, that for a number of years visits abroad by officials of various government departments have been numerous. Many of these officers have been in residence overseas for considerable periods. Some of them may have married overseas, and it is natural to assume that in furnishing their homes they would have acquired a large quantity of personal belongings which they would bring to this country upon their return. I am sure that no honor- ‘ able .member would refuse them that right.
– I am not cavilling at that, nor do I make any charges in regard to -that aspect of the matter.
– That perhaps is what the honorable member has been referring to.
– A departmental official who has been overseas ‘for some years would hardly be expected to come home with only a pair of scanties. However, I shall be glad to confer with “the Minister of Trade and Customs :and to ascertain whether in view of the additional information that the honorable member lias supplied, further light can be thrown on this matter.
I rather resent the honorable member’s imputation that the Minister for Trade and Customs in answering his questions adopted the attitude that he would call the honorable member’s bluff. I assure the honorable member that every charge that has been made in this Parliament during the administration of this Government has been investigated fully with the object of sheeting home the blame to those who may have been implicated.
Question resolved in the affirmative.
The following papers were presented : -
Commonwealth Public Service Act - Appointments - Department -
Civil Aviation - G. C. Johnson. J. W. Knee, W. H. Pickford, B. Sutherland. Interior - L. C. Rogers.
Post-war Reconstruction - A.B. Le Gay Brereton.
Works and Housing -R. S. Mendelsohn.
Defence (Transitional Provisions) Act - Regulations - Statutory Rules 1947, No. 47.
House adjourned at 11.10 p.m.
The following answers to questions were circulated: -
y asked the Minister for External Territories, upon notice -
Guinea and Papua should he based upon moneys raised in the Territories?
– I am not in a position at present to supply the information sought by the honorable member but I shall have inquiries made and furnish him with a reply as soon as practicable.
Customs Charges on Public Servants’ Luggage.
n asked the Minister representing the Minister for Trade and Customs, upon notice -
-The Minister for Trade and Customs has supplied the following information : -
A special record of the transactions to which the honorable member refers is not kept by the Department of Trade and Customs. To obtain the information requested would involve a lengthy investigation in each State of the Commonwealth, and this could not be justified in existing circumstances with the department heavily understaffed. If, however, the honorable member will give a reference to the case or cases which he has particularly in mind, the Minister will obtain and supply him with the details sought.
n asked the Minister for Works and Housing, upon notice -
– The following answers have been suggested by the appropriate departments : - 1, No. 1. <<i) -
n asked the Minister representing the Minister for Supply and Shipping, upon notice- -
What was the total petrol consumption in Australia for each month from and including January, 194”’
– The answers to the right honorable gentleman’s questions are as follows : -
The arrangements in respect qf DecemberJanuary a.nd February-March periods wereabnormal. In these periods, because of special factors entering into the position, tickets issued during December and February were double their face value and the period of their currency was extended over January and March respectively. The April-May issue ia on the normal basis. Distribution, of tickets is made to many thousands of post offices throughout Australia and this necessitates distribution of tickets with a value in excess of licensed consumption in order that tickets will be available at all times to all applicants at any issuing office.
January - 32,732,000 gallons.
February - 31,421,000 gallons.
March- 30,900,000 gallons.
April - Complete returns from all parts of Australia are not vet available.
s asked the Minister representing the Minister for Trade . and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following information: -
s asked the Minister representing the Minister for Social Services, upon notice -
What was the unemployment benefit expenditure in each State during April, 1947?
– The answer to the honorable member’s question is as follows : -
Unemployment benefit expenditure in each State for the month of April, 1947. is as 1 follows: -
S asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following answers : -
Re-establishment : Reconstructio’n Training Scheme.
n asked the Minister for Post-war Reconstruction, upon notice -
– The answers to the honorable member’s questions are as follows : -
Poultry : Bran and Pollard ; Egg ‘ Production.
d. - On the 9th May, the honorable member for Wilmot (Mr. Duthie) asked the following questions regarding bran, pollard and egg production : -
Civil Aviation : Trans-Australia Airlines.
d - On the 2nd May the honorable member for Franklin (Mr. Falkinder) asked a question in connexion with the organization of Trans-Australia Airlines, and I would now advise that the organization and staff establishments of Trans- Australia Airlines are under constant review. Recently the numbers of maintenance staffs at certain outer terminals have been reduced. This has been due to the economic concentration’ of maintenance >work chiefly in Melbourne and Sydney. In the case of Tasmania the reductions at the Cambridge and Western Junction terminals affected only five persons. The majority of Trans-Australia Airlines employees are ex-servicemen, and it has been unavoidable that the recent reductions in maintenance staffs have included a number of persons with war service. In deciding the personnel to be terminated due regard has been given to- the Tradesmen’s Bights Regulation Act and the Re-establishment and Employment Act.. The- personnel affected were not working under guarantee of permanent, employment. The management of Trans-Australia Airlines, however, has- not been lacking in its endeavours to find, other suitable- employment for them. In Tasmania positions were obtained for all five engineers who were surplus to Trans-Australia Airlines maintenance- requirement in, that State.
C0MM0N.wbsai.th Literary FUND.
asked the Prime Minister, upon notice’ -
y. - The answers to the honorable member’s- questions are as follow. - 1”. Vance Palmer (Chairman), Miss l1’. Eldershaw, T. Inglis Moore; L. Haylen, M.P., and K. Binns:
ey. - rOn the 24th April, the honorable member for Flinders (Mr. RY.an) addressed a question regarding the shortage of labour for the working of ships in the Port of Sydney on 23rd April last.
The Minister for Supply and Shipping has supplied the following information.: -
The shortage of waterside labour which occurred on the 23rd April was due to the considerable accumulation of cargo, in the Port of Sydney and was aggravated by the fact that excessive rain had occurred on the previous day.. In consequence, an exceptionally large number of vessels were in the Port of “Sydney requiring labour. The. actual shortage recorded by. the Stevedoring Indus try Commission was 2,348 waterside workers comprising 2,247 night requirements and 101 day requirements. The Stevedoring Industry Commission is fully aware of the urgency for the shipment of cargo from Sydney and. every effort is being, mode by the commission to deal with this problem as promptly, as possible.
y. - On the 6th. May, the honorable member for Bendigo (Mr.
Rankin-) asked1 a question concerning: advanced nursing’ studies in. relation to Sister Savage.. The honorable’ member asked’ whether the- Commonwealth Government has given consideration to. a scheme under which persons may be sent- abroad. foi specialized’ courses not available: in the Dominions. As’ I stated in- reply to the honorable member on that occasion, the. matter is one which comes within: lie jurisdiction, of the State Government, It is expected, however, that when the Commonwealth Government introduces its proposals for a national medical service arrangements will be made for suitable, students of the medical, nursing and allied professions to be seat abroad for specialized courses of training.
y - On the 29th April and 1st May, 1947, I was asked a series of questions by the honorable member for Wide Ba>y (Mi-.. Bernard Corser) regarding the- payment of drought relief to primary producers by tse Commonwealth. I’ now inform the honorable member as follows :: -
The New South- Wades Government formulated and submitted drought relief schemes for primary producers in dairying and. cereals in. respect of the 1946-47 season and requested financial assistance.- from the Commonwealth on. a £1 for £l basis in respect of these schemes. -
Que scheme covered! assistance to. dairyfarmers producing for butter and cheese in New South Wales and is bused on a flat rate payment on a commercial butter basis. This scheme was estimated by the New South Wales Government to cost £234,000 and as a measure of assistance to the State the Commonwealth Government, after consideration, agreed to contribute a half share up to a limit of £117,000.
The other scheme formulated by the New South- Wales. Government was to assist cereal growers in that State who. bod suffered from draught, the. scheme, being based on. the acreage sown and the yield therefrom. The scheme is estimated to’ cost £1, 500,000 and. the State also sought Commonwealth financial assistance in this case on a £1 for £1 basis. After- consideration of the scheme the Government decided, to agree to meet, half the cost up to £750,000 on a £1 for £1 basis. -These- proposals by the Kew South Wale* Government, and subsequent agreement by the Commonwealth to contribute halt the cost, were widely publicised and were the subject of Ministerial statements at the time.
No similar requests or firm proposals have been received from the Queensland Government setting out details of. proposed drought assistance and requesting financial aid from the’ Commonwealth to the Queensland Govern* ment towards the cost. The Premier of Queensland on 28th March did raise the question of the payment of a price stabilization subsidy by the Commonwealth to dairy farmers in Queensland producing for processing purposes on the basis of 2id. per lb. commercial butter for the seven months July, 1940, to January, 1947, inclusive, but he did not indicate that his Government had particularly examined the proposition or was prepared to accept any financial obligation in respect’ thereof. In my reply to Mr. Hanlon, dated 14th April, 1947, 1’ outlined the Commonwealth^ attitude to drought relief generally and explained what had happened regard ins; the New South Wales dairy drought relief scheme. i also informed Mr. Hanlon that if his Government cared to submit ‘ a considered scheme of drought relief for Queensland dairymen the Commonwealth would be pleased to give it full consideration, ulong; the’ lines adopted with the New South Wales proposals. i have now received* a further communication from the Acting Premier of Queensland again pressing the. Commonwealth to meet drought relief payments to butter producers from prices stabilization subsidy funds but making no offer whatever by the State Government to either share the cost or administer ibc scheme. i also received a request from Mr. Hanlon dated the Srd April, 1947, that the Commonwealth should extend drought relief to Queensland. On the 16th April, in reply, 1 advised the Premier as follows: -
My Government hn« made ‘the position quite clear on numerous occasions that the provision of drought relief is primarily a matter for the .States and a Commonwealth contribution is made only in exceptional circumstances, and even then only after consideration of a! detailed case submitted by the States.
Although the Commonwealth Government recently agreed to assist the New South Wales Government in a cereal drought relief scheme, there were no prior consultations as to the basis of that scheme. Tn fact the State made its .own investigations into the incidence nf drought, determined its own measures for assistance to cereal growers and theo submitted the detailed scheme of assistance which it proposed and sought Commonwealth financial, assistance to meet part of the cost thereof. After full consideration and as a measure of financial aid, my Government decided to assist on a £1 for £1 basis with the State.
As I have already said, my Government is quite ready to examine any considered proposal submitted by your Government” The position is Bet out very clearly in the foregoing letter and, as I said, the Commonwealth Government is quite willing to consider any properly formulated scheme of relief in respect of recent drought in Queensland put forward by the State Government together with a request for financial assistance.
Cite as: Australia, House of Representatives, Debates, 13 May 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19470513_reps_18_191/>.