18th Parliament · 2nd Session
Mr. Deputy Speaker (Mr. J. J. Clark) took the chair at 10.30 a.m., and read prayers.
Tuesday of last week I made a statement to the House dealing with questions previously addressed to me by the honorable member for Eden-Monaro concerning a report in the Melbourne Herald purporting to give details of the proceedings of the Parliamentary Proceedings Broadcasting Committee. I outlined the position in relation to privilege and informed the House that I proposed to consult the joint committee on the questions which had been raised. The matter has been discussed with the joint committee which considered that the unauthorized publication of its proceedings was undesirable and contrary to parliamentary practice. Accordingly, the joint committee, in pursuance of its statutory powers, has declared that, unless otherwise determined, its proceedings will not be open to the public and are not to be published without the authority of the chairman. In regard to decisions reached by the committee, the chairman has been empowered to authorize their publication unless a specific determination to the contrary is made at any meeting of the committee. In view of these declarations, any unauthorized publication of the proceedings of the joint committee will be a matter which may be considered by the House as constituting a breach of privilege.
– I preface a question which I wish to ask the Minister representing the Minister for Social Services by reading the following extract from a letter which I have just received from an Australian merchant seaman whose home is atCabramatta : -
This day week I buried my wife. We have been paying into Labor Motor Funerals for years, and when I went to arrange the funeral I was informed that, although the card is paid up to the end of November, we were unfinancial during a period of two months and were denied the sum of £215s. to which we were entitled under the group we were in. I have been off work with a smashed arm for three months and my wife died in hospital.
Will the Minister use his powers under social services legislation to investigate the activities of Labor Motor Funerals? Will he ascertain and inform the House who are the directors and principal shareholders of that company, and whether the honorable member forReid, the self-professed defender of the poor and afflicted, is the founder and the largest shareholder of the company?
– I have heard rumours about an organization of the kind to which the honorable member has referred, but my knowledge of the matter is insufficient to warrant’ my expressing any opinion. I shall bring the honorable member’s question to the notice of the Minister for Social Services and ask him to make an investigation.
– I ask the Minister for the Navy whether any invitation was received by the Australian Naval Squadron to participate in the large-scale navy manoeuvres which United States and Canadian war vessels are conducting in the Pacific ? If such an invitation was received, why was it not accepted ? Is Admiral Collins proceeding to Honolulu to be there concurrently with the American and Canadian manoeuvres ? If so, is he going as an observer on behalf of Australia?
– I shall make inquiries concerning the subject of the honorable member’s question and obtain for him any information that is available.
– Has the Minister for Repatriation seen the report which appeared in the Melbourne Sun on the 25th October of comments alleged to have been made by certain delegates to the annual conference of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia that was held in Brisbane last week? If so, has he any comment to make on that report?
– I have seen the reports which appeared in the press of Brisbane and Melbourne, and I noticed particularly the report in the Melbourne Sun to which the honorable member has referred. For the information of honorable members, I shall read a telegram that I received late last night from one of the delegates. It is as follows : -
Have seen Monday’s Sun stop Remarks reported to have been made by me incorrect stop Am not in habit of indulging in personal abuse stop Did criticize your administration of Repat generally but not by personal abuse stop Regards Wertheimer.
Mr. Wertheimer was the Tasmanian delegate to the conference, and the press reports stated that he had made certain personal reflections on me. I accept the telegram from Mr. Wertheimer in the spirit in which it was sent, and I shall make inquiries to ascertain the origin and basis of the press reports.
INTER-UNION Dispute in New South Wales.
– Has the Prime Minister seen the report which appeared in this morning’s press, concerning the coal strike on the south coast of New South Wales, that Mr. A. W. Dougherty, general secretary of the Australian Workers Union, had stated that “ the miners’ federation has torn up its agreement with the Australian Workers Union under instructions from Marx House “? In view of that statement, and of the fact that the present industrial dispute, which is an inter-union one, appears likely to develop into a general coal strike, will the right honorable gentleman endeavour to arrange for a compulsory secret ballot to be taken by the Commonwealth Electoral Officer of all members of the miners’ federation on the South Coast to determine whether the members consider that the agreement between the Australian Workers Union and the federation should stand ?
– Before entering the chamber this morning I discussed the matter mentioned by the honorable member with the Minister for Shipping and Fuel. I point out that for some time before the present dispute arose, the Australian Workers Union and the miners’ federation have been involved in conflict arising from demarcation disputes. As the result of intervention by the Australian Council of Trades Unions, representatives of the two conflicting organizations were brought together and a tentative agreement was reached in respect not only of the South Coast dispute but also of other matters which have been the subject of controversy between the two unions. Although the representatives of the miners’ federation who attended that meeting undertook to recommend to the council of their organization that it should adopt the terms of settlement to which they had tentatively agreed, the council of the federation subsequently refused to endorse the proposals. The Minister for Shipping and Fuel, Mr. Monk and Mr. Clarey, of the Australian Council of Trades Unions, and myself are endeavouring to find a means of settling the dispute, which is a most unfortunate one. I have pointed out to the trade unions that I regard it as a disgrace to the unions that they should be unable to settle demarcation disputes, particularly those which affect such a vital industry as coal-mining. I understand that the Minister for Shipping and Fuel has had some further discussions with officials of the miners’ federation this morning, and I cannot say anything further at the present moment.
– Will the Prime Minister inform the House whether he has seen the report in this morning’s press that members of the Australian Workers Union have been threatened with, if not actually involved in, “ basher “ tactics by members of the miners’ federation in connexion with, the dispute at the Kemeira tunnel on the South Coast of New South Wales? Does the Prime Minister intend to take any action to protect from such attacks the members of the Australian Workers Union who are going about their lawful work? Is it true that members of the miners’ federation have taken intimidatory steps with regard to the supply of food and produce to members of .the Australian Workers Union at Kemeira? If so, what steps does the Government propose to take to prevent further attacks of that description?
– Several days ago I read press reports concerning picketing and other action relating to the Kemeira tunnel dispute on the south coast of New South. Wales. I have not heard anything officially from representatives of the unions with whom I have discussed the matter. I point out, however, that the preservation of law and order in New
South Wales is the responsibility of the New South Wales Government and the New South Wales Police Force. I have no doubt that the Acting Premier of New South Wales will see that the laws of the State are observed.
– Some time ago .1’ raised the matter of the possibility of having dollars made available for the importation of urgently needed wire netting from the United States of America. As honorable members know, the rabbit has earned millions of dollars for Australia. The mills in the United States of America can supply 42-in. rabbit-proof netting at a price which is nearly £40 a mile cheaper than the price charged for wire netting by English, Belgian and German manufacturers. As the farmers are willing to pay substantial prices in order to put the rabbits behind wire netting, I ask the Prime Minister whether he will give consideration to the desirability of importing wire netting from the United States of America. It is recognized that, of course, the Minister for Commerce and Agriculture is doing a good job with regard to the importation of wire netting from elsewhere.
– The matter of the importation from the hard currency areas, particularly from the dollar areas, of wire netting and other goods required by the primary producers was raised in this House last week. I indicated then that some limit must be placed on the amount of dollars we spend. It must be remembered that dollars have to be purchased from the British Treasury, whose supply of dollars is not very large, having regard to the necessity to maintain a government reserve. Whilst we are endeavouring to obtain wire netting from Japan, the Minister for Commerce and Agriculture is not greatly impressed with the types of wire netting at present available in that country. It is unsuitable for use by farmers. We have been assured, however, that suitable meshes will become available there later on for purchase by Australia. We have also been endeavouring to obtain wire netting from continental countries, and any supplies available from such sources will be obtained. The honorable member for Wakefield raised this matter and also the matter of barbed wire some time ago. I am not at the moment hopeful of supplies being procured from the dollar areas. Although the matter of price is not all-important, a ceiling has to be fixed, and we must make every effort to keep within that ceiling, particularly with respect to dollars. I shall at a later date confer again with the cabinet subcommittee on dollar funds on this aspect of the subject.
– Has the Minister for Air seen a published statement by Air Vice-Marshal W. D. Bostock that not one branch of the Royal Australian Air Force is ready for a sudden struggle, that we are in a worse position than in 1939, that the air defence system developed in the north during the war has been allowed to disintegrate, and that there is not one fighter squadron ready for combat? In view of the highly critical international situation, will the Minister inform the House what steps, if any, have been taken to overhaul the air force and bring it up to the maximum degree of efficiency ?
– I have seen an article which appeared recently in a Sydney daily newspaper purporting to give the views of Air Vice-Marshal Bostock, but I remind the honorable member that they were merely his opinions. A statement setting out the Government’s defence proposals has been made in this House by the Minister for Defence. The suggestion that the air defences which we maintained during the war have been allowed to deteriorate is correct. I do not know whether the honorable member or any of his colleagues would suggest that we should keep such defences at war strength in peace time. The Government certainly does not propose to do that. Its views on defence have been definitely stated by the Minister for Defence and I have also made a statement in this House on the subject of air defence. The allegation that we did not have a single squadron has been modified by some of the gentlemen who made it, who now admit that we have three squadrons. I do not admit that either of their statements is correct. I refer the honorable member to the statements that have been made by the Minister for Defence and myself if he wishes to learn the true situation in regard to the air defence of Australia.
– I direct a question to the Minister for Post-war Reconstruction in connexion with the desperate situation that exists in Townsville regarding water supply. Recently the Minister promised me that he would endeavour to arrange with the manufacturers for a continuous and increased supply of pipes for the new water scheme at Townsville. The situation has become worse as the result of tragic drought conditions, and the Townsville City Council does nol know what to do. Has the Minister obtained any information about the availability of pipes? If he has not succeeded in arranging for increased supplies, will he make further inquiries and inform me of the position as soon as possible ?
– I appreciate the honorable member’s anxiety to have this matter settled as soon as possible so that work on the Townsville water supply scheme can be expedited. The honorable gentleman will recall that I made it clear when I answered a question for him recently that I was not in a position to allocate, or impose on manufacturers the obligation to supply, the piping that is needed.
– I appreciate that.
– The discussions that I am able to have with manufacturers take place as and when opportunity offers. Discussions on this subject have already been initiated, but I am not able to tell the honorable member that they have reached a satisfactory conclusion. However, I shall again ask officers of the division of the Department of Post-war Reconstruction which deals with such matters to have further talks with the manufacturers and impress upon them the urgency of Townsville’s needs. I hope that, as a result, the manufacturers will be able to see their way clear to allot additional supplies of pipes to Townsville.
– As the Minister for Air is aware, I have on several occasions raised the question of the award of the 1939-45 Star to ground crew members of the Royal Australian Air Force who served in Great Britain during the recent war. Has the Minister had further correspondence with Mr. Austin, the. federal secretary of the Air Force Association, on this matter and does he take a favorable view of the proposal to award the medal to those exservicemen ? If so, what action does he propose to take?
– I have received representations from the secretary of the Air Force Association and from several other sources. Questions have also been asked on the subject by the honorable member for Wilmot and the honorable member for Balaclava in this House and by Senator O’Byrne in the Senate. A decision was made a considerable time ago, but in view of the representations that were made by members of the Parliament and of the Air Force Association, I considered that thu matter should be further investigated. That is now being done.
– I ask the Minister for Civil Aviation whether Trans-Australia Airlines proposes to operate special services across Bass Strait on Melbourne Cup day? If it does, has a special allowance of petrol been made available for this purpose and have similar facilities been accorded to Australian National Airways Proprietary Limited?
– No special services are being provided by any airline operators in connexion with the racing carnival that is shortly to take place in Melbourne. It should not be possible to do so, because unsubsidised airline operators now receive only 95 per cent, of the quantity of liquid fuel that they were consuming at the 1st July of this year, and no distinctions are made in favour of any operator. Certain exceptions to that decision were published in the Commonwealth Gazette at the end of September. The Prime Min ister then made the following statement with regard to aviation fuel: -
The Federal Government has imposed the following limitations on the use of aviation fuel :-
Subsidized airlines: Pegged to consumption level operating on 1st July, 194S.
Unsubsidized airlines: Reduced to 95 per cent, of consumption level operating on 1st July, 1948.
New services: Consent in writing of Commonwealth Controller of Liquid Fuel must be sought.
Other than those specified: Consent in writing of Controller must be obtained.
International airlines are not affected.
The restrictions are contained in an order made by the Commonwealth Controller of Liquid Fuel (Mr. J. B. Cumming) under the National Security (Liquid Fuel) Regulations, entitled the Control of Aviation Spirit. It has been published in a special Gazette.
The management of Trans-Australia Airlines, which is a very enterprising body, has arranged to alter the times of some of the ordinary services in order to meet the wishes of people who wish toattend the forthcoming racing carnival in Melbourne. No other special arrangements are being made for that purpose by Trans-Australia Airlines. It was reported in a weekly newspaper last week that Australian National Airways Proprietary Limited had carried a number of people from Victoria to King Island on a picnicking and golfing trip. According to the report, some of the passengers werebookmakers. I do not know whether the report is correct, but, if it is, it would appear that that company is not using all of its petrol allowance for essential purposes. Inquiries are being made to ascertain the exact position. The Government does not intend to allow petrol to be used for such purposes. If airline operators can afford to use aircraft for the purpose of picnics or other amusements, their petrol allowances must be examined to see whether they are not being treated too generously.
Pi.ay “ Secret Assassin “.
– I direct the attention of the Minister representing the Minister for Health to a report- that the Director-General of Health ordered the Australian Broadcasting Commission to refrain from broadcasting a play dealing with tuberculosis, entitled Secret Assassin, which was to be broadcast in the commission’s programme last night. If it is correct that the broadcasting of this play was banned, will the Minister obtain information for the House of the reason for the Director-General’s action? I should also like to know under what authority he imposed the ban?
– I have read the report to which the honorable member has referred. That is all that I know about the matter. I do not know whether the Director-General of Health banned the play, and, if he did so, what reason he had for his action. I shall request the Minister for Health to cause inquiries to be made and will inform the honorable member of the result.
– I wish to ask the Prime Minister, who represents the Minister for Shipping and Fuel in this chamber, a question about the allocation of kerosene lighting fuel in the Mallee area of my electorate, where there are no electric appliances whatever, and where, I am informed in writing, the supply of kerosene to dealers is sufficient to meet only 50 per cent, of the requirements of the district. My correspondent wants to know whether farmers are to be obliged to go to bed with the fowls as well as to get up with them.
– Order ! What is the honorable member’s question?
– I am endeavouring to explain the position. Three more kerosene refrigerators are to be installed in the area within the next few days, and they cannot be operated on any fuel other than kerosene. Will the Prime Minister asb the Minister for Shipping and Fuel to review the allocation of lighting kerosene to ensure that people living in the country areas shall be able to enjoy the amenities of life that would be available to them if they had the necessary fuel?
– I did not quite catch the name of the district to which the honorable member referred.
– It is the Mallee area of my electorate. I shall produce the letter that I have received.
– I do not know .anything in detail about the matter that the honorable member has raised, although I take a great interest in the fuel position generally. I shall draw the attention of the Minister for Shipping and Fuel to the honorable member’s remarks this morning, with a view .to eliminating any hardships that the people concerned .may suffer
Alleged Leakages from Official Quarters.
– I wish to ask the Prime Minister a question about the alleged secret documents from which quotations were made in this House some time ago. Newspaper reports state that a typist in the Department of Postwar Reconstruction was found to have communicated to a pressman certain information on tobacco duties. In fairness to this girl, I ask the right honorable gentleman whether it is a fact that no connexion has been established between her and the document quoted by Mr. Fadden in this House. Secondly, I should like to know whether it has been established by the Prime Minister and officers of the Commonwealth Investigation Service that the quotations made by Mr. Fadden were correct.
– I rise to order. Several times I have objected to the practice of certain Opposition members referring to other honorable members by name instead of by their electorates. The honorable member for Richmond, I contend, is not in order in referring to the right honorable member for Darling Downs other than by his parliamentary constituency.
– The honorable member for Richmond must refer to honorable members of this chamber by the names of their constituencies.
– Very well, if fine points must be observed. I ask the Prime Minister whether it is a fact that the quotations made by the Leader of the Australian Country party were from genuine documents or from extracts from genuine documents. Finally, as three weeks have elapsed since the matter was originally raised and the Prime Minister has had time to refresh his memory, I ask him whether there is any truth in the statement that the United States of America was reluctant to impart to Australia information on atomic research because of the fear that such information might not be properly safeguarded in this country.
– I indicated previously that the investigation of any theft or forgery that may have taken place was being conducted by the Acting Attorney-General. I have also stated quite clearly to the House that in view of the letter that I have received from the Leader of the Australian Country party, I mu,st treat all Opposition members as, to use a court expression, hostile witnesses in regard to this matter. I have nothing to add to what I have already said on the subject. The investigation is in the hands of the Acting Attorney-General. I have already said that the Government, in its own way and in its own time, will conduct the investigation, and that statement still stands.
– Can the Minister for Commerce and Agriculture say whether Mr. F. H. Cullen is to be appointed chairman of the Australian Wheat Board?
– The filling of the vacant position of chairman of the Australian Wheat Board has not even been considered by the Government.
– Why, the dogs are barking that Mr. Cullen is to be appointed.
– When the matter has been considered, and a decision reached, it will be communicated to the Parliament and to the public. I know that whenever an appointment is made it will not please the honorable member for Indi.
– Has the Prime Minister seen a copy of the circular letter, with a nomination form enclosed. which has been sent to all members of the Federated Ironworkers Association, calling upon them to nominate the party to which they choose to pay a political levy, or to call personally at the office and contract out of any such payment? If the Prime Minister has not seen the circular, will he obtain a copy of it through the Commonwealth Investigation Service? I have my own private copy. How does the Chifley Government stand in regard to activities of that sort inside the trade unions?
– I think this matter was first raised by the honorable member for Reid, who inquired whether I was aware that a certain document had been issued by the Federated Ironworker? Association. I promised to have the matter looked into, and I have seen a form, but I do not know whether it was precisely the same as that in which the union asked its members for contributions. The form I saw contained a questionnaire seeking particulars about the member, and asking to which party - the Communist party or the Labour party - he wished to contribute.
– Why were the Opposition parties left out?
– As a matter of fact, I thought that, in view of their attitude lately, a great injustice had been done to them. The Labour party has had nothing to do with the sending out of the forms referred to, nor has it received any funds from the Communist party. I understand that the matter of political levies has already been dealt with by the Arbitration Court, which ruled that they could not be made by trade unions. I presume that the levy referred to in the circular was to be on a voluntary basis. The court ha3 refused to sanction any trade union rule imposing a levy for political purposes. Whatever has been done in the case of the ironworkers is a matter for the union itself. During the last general election, subscriptions allegedly raised at meetings conducted by Communists were sent to the Labour party. The money was returned at my direction as leader of the party. No subscriptions from the Communist party have’ been used by the Labour party.
– Yesterday, I asked a question of the Prime Minister about the reported decision to drop the word “ British “ from the title, British Commonwealth of Nations. In his reply the Prima Minister said that the conference of Empire Prime Ministers had no power to make a decision on the matter. Such a decision, he said, could be made only by the Parliaments of the Empire countries concerned. I now ask the right honorable gentleman whether the conference, in fact, passed such a resolution, and, if so, how the Australian delegate voted ?
– I thought I had made the position perfectly clear yesterday. There has been some confusion because three statements on this subject have been made by persons in authority and each referred to this matter in different terms. All I can do is to repeat what I said yesterday, that the meetings of Empire Prime Ministers are informal and that I am not aware that any such resolution was carried. I should not imagine that a motion would be proposed in regard to such a matter and the report of the proceedings of the meeting of Empire Prime Ministers does not contain any record of such a motion having been proposed or carried. A bill will shortly be introduced into this House which will give honorable members ample opportunity to discuss this subject.
– Can the Minister for Commerce and Agriculture give an indication of the quantity of export meat lost to Great Britain through the present slaughtermen’s strike in Victoria and the strike of ship painters and dockers in Victoria and New South Wales? Has the honorable gentleman any idea, or can he obtain any information from the Minister for Labour and National Service, when work is likely to be resumed in these industries?
– I cannot indicate when work will be resumed in these indus tries. The matters in dispute are being considered at present and every body concerned is hopeful of an early resumption of work. As to the prospect of being able to furnish to the honorable member, an estimate of the quantity of meat lost to Great Britain as the result of the strikes in these industries, the newspaper forecast of thousands pf tons is utterly fantastic.
– I did not see the newspaper forecast.
– The newspaper forecast is simply a guess. In view of the very good seasonal conditions in Victoria, there is likely to be an increase in the export of meat to Great Britain because the stock will improve in condition while being held on the farms. In these circumstances there will certainly be no loss of export meat to Great Britain as the result of these disputes. All that will happen is that the meat will be shipped a little later than had been intended.
– Arising out of the statement of the Minister for Immigration recently that details relating to the case of the “ Manila, girls “ came originally from what the honorable gentleman was pleased to call “ the cracking of a cable “, I ask the honorable gentleman whether his investigations have substantiated that statement, and, if not, and if it has come to light that this information came from perfectly legitimate sources, will he apologize to those whom he accused of obtaining confidential information in an improper way?
– I still say that the Melbourne Herald obtained its information in an improper way. Investigations are proceeding and when certain other matters have been dealt with the turn of the Melbourne Herald will come. Then we shall see whether my original statement was correct or not. At the moment the case is sub judice and I do not want to comment on it.
– I have received from the honorable member for Moreton (Mr. Francis) an intimation that he desires to move the adjournment of the House for the purpose of discussing a definite matter of urgent public importance, namely: -
The failure of the Government to implement effectively the Commonwealth reconstruction training scheme, and to honour the promises made to ex -service men and women in this and in other rehabilitation matters.
.- I move -
That the House do now adjourn.
– Is the motion supported?
Five honorable members having risen in support of the motion,
– Anybody who made a careful examination of the lack of progress in the Commonwealth reconstruction training scheme would regard the scheme as having been a dismal failure. I remind the House that “World War II. was mainly a young men’s war. All young men on reaching the age of eighteen years were required to go into one of the services or to engage in some industrial activity associated with the war. Never in its history has Australia engaged in a war in which so many young men stepped in at such an early age to fight for their country. When they reached the age of eighteen they knew that they would be required by the nation to play their part either in the services or in industry. Knowing that, many of them remained at school until they were eighteen years of age and were called upon to play their part. Others acquired temporary jobs with the American authorities or other organizations which paid them good salaries. There is a great gap between those who gained their training in an industry or in a profession prior to the war and those who, when they were demobilized, had never had any such training in civil life because the war had come at a particular time of their lives. If the Government’s reply to my proposal to-day is to defend itself by saying that a great number of ex-service personnel had the opportunity to train in various trades while in the services, my reply in advance, is, first, that such training was absolutely inadequate and, secondly, that I shall cite figures to show that to-day tens of thousands of men approved as eligible and suitable for forms of reconstruction training, particularly in the building trades, will not receive any training. There has been no new training started since January this year, and training in plumbing and other branches of the building trade is completely dead. There can be no doubt in the minds of a great number of the Australian people, particularly ex-service men and women, that the Commonwealth reconstruction training scheme has been a dismal and lamentable failure and is to-day a “dead letter “ for those who hoped and believed their ambition in life would be made possible by such training. The scheme has failed for a number of reasons, the chief among which has been Government inefficiency and maladministration in organizing and developing the scheme. Another of the major reasons which has become obvious in recent months, has been the manner in which the Government has yielded to the will of Communistdominated unions. I propose to produce facts and figures which will show how the scheme has let down many ex-servicemen and how Government promises have not been fulfilled.
There is no doubt that home building is being seriously retarded, and the training of ex-servicemen completely disrupted, because of the success of union bosses in emasculating the original training scheme. Union hostility to the training of ex-servicemen has continued despite the acknowledged shortages of trained men in practically every section of the building trade. I have discussed with some of the deputy commissioners various reasons why the reconstruction training scheme has not progressed more satisfactorily. At this point, I emphasize that, in my opinion, the deputy commissioners are doing their utmost to make the scheme succeed, and I desire to pay a tribute to their activities in the matter. The difficulty has arisen because the Government is bending to the dictates of union bosses, particularly to the communist-dominated unions, with the result that many unions have closed their books against the training of exservicemen. In its thirty-second annual report, the federal executive of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia devotes seven pages to a statement of the organization’s views and findings after the position had been examined by special committees. I accuse the Government of being dominated by ‘union bosses, and I await with interest the explanation which the Minister for Post-war Reconstruction will offer. This subject must b& fully discussed, because the future of tens of thousands of ex-servicemen, who. desire to be trained as tradesmen, is jeopardized by the maladministration of the1 Government and the Minister for Post-war Reconstruction.
One of the excuses which the Minister has made for the lack of progress is that the training of ex-servicemen is outstripping the rate of production of building materials. If that statement be correct, it is a- tacit admission that the Government has failed to encourage output, and increase the production, of vital building materials-.- That excuse conflicts with the continuous demand for trained men, and with the claims of the State authorities,, who issue priorities for securing building materials, that supplies of building materials are increasing and will continue to increase next year. During June last year, the Minister for Works and Housing (Mr. Lemmon) expressed the hope “that under the reconstruction training scheme 33,000 ex-servicemen would receive, training in the various Building trades. However, actual figures are far short of the Government’s hollow promises. The original scheme provided for the training of 32,850 ex-servicemen -during a two-year period commencing in May, 1946, but in 21 months, only onehalf of that number were called up for training. The lag in Victoria can only be described as deplorable, and instead of improving, the situation is deteriorating. In May- of last year, there were 123 centres in Victoria for training exservicemen in the various building trades, and there were 1,662 trainees. In March of this year, the number of centres had dwindled to 27, and the number of trainees had declined to 383. Last March, the number of ex-servicemen who had been selected for, and were awaiting training in- Victoria, was high. For example, there were 721 men wanted training” as bricklayers, 874 as carpenters and joiners, more than 1,000 as painters and some 200 as fibrous plasterers. Obviously, the reconstruction training- scheme is collapsing. I should like to know why all those men who were selected for training’ are still awaiting’ training after the lapse of two years. The position in New South Wales is- as bad as it is in Victoria. Although 13,850 ex-servicemen were to be trained in the building trades, only 7,100 had been trained’ up to two months ago. Figures compiled by the Commonwealth Employment Bureau in New South Wales show that, to the end of -May last, 1,446 requisitions by employers’ for labour in the city area had not been filled whilst 540 requisitions for labour in country districts had not been met. At the same time 4,000 ex-servicemen were awaiting training. My information, which has been verified, is to the effect that no- new classes of bricklayers or carpenters have been started since last June. The scheme has stopped; it is dead. I ask the Minister to explain why it is dead and why the Government has not honoured the promises it made to service personnel that they would be afforded every facility to , be trained in trades. Only a few months ago the president of the New South Wales branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia declared that the- scheme had not merely broken down but was finished. Hundreds of men who were selected for training, and, therefore, had proved their suitability, are now looking for other jobs. These facts condemn the Minister responsible for the scheme. Only last month, the Minister for Labour and National Service issued figures which showed that of 100,000 vacancies recorded with the Commonwealth Employment Service at the end of July last, 10,600 were in the building trade. He also indicated that greater relief would be made available for industries short of man-power when the Commonwealth’s scheme for the construction of hostels for migrants was IDU under way. No one will quarrel with the Government’s policy of bringing to Australia migrants who are skilled in some trade, but ex-servicemen who havebeen denied their rights because of the hostility of trade unions, may well ask whether the Government recognizes any claims other than those of the union dictators, and whether ex-servicemen and their dependants and the legion of homeless are receiving the slightest consideration. Earlier this session, I asked the Minister, upon notice, whether it was correct that some 4,000 ex-service personnel were waiting to be trained in;the building trade, and the Minister replied that as at the 31st July last 1,039 persons, who had been selected, were awaiting training throughout the Commonwealth in the six main building trades. Mr. K. Bolton, who is the ex-servicemen’s representative on the New South Wales Regional Reconstruction Committee, has assured me that the Minister’s figures are absolutely incorrect. On this point, I shall cite figures from the last report of that committee.
– Another confidential document.
– That report has been widely circulated. It shows that in New South Wales alone the numbers actually selected and awaiting basic training in the respective trades are as follows: - Bricklaying, 664; carpentry and joinery, 2,052; plumbing, 163; and plastering, 166. The total for the four main building trades was 3,045 in one State alone. Where are the Minister’s fancy figures now? I have been advised by Mr. Bolton that, according to Dr. Coombs, approximately 10,000 men are awaiting training in the building trades in Australia. How does the Minister reconcile that fact with his statement to me and other honorable members that only 1,039 men are awaiting training in the building trades throughout the Commonwealth ? At the moment, my impression is that either he has been misled by his own departmental officers or that he has told deliberate lies to the House. I havebeen informed that next month there will be a partial resumption of training for the building trades. I shall believe that statement when I see evidence of such a resumption. Except for one class of plumbers, no new classes have been started in New South Wales since the 1st January last. I am perfectly satisfied that Comrade Buhner, of the Building Workers Industrial Union, and other fellow travellers, and not the Government, are the bosses in this matter. I remind the Minister that I raised this issue when dealing with the Estimates some months ago. I pointed out how the scheme was collapsing, and said that the reason for its failure was the following direction given by the Minister which I take from the minutes of a recent meeting of the Industrial Committee of the Printing Trades Union in Sydney : -
The Minister (Mr. Dedman) has directed that if a union will not agree after the Australian Council of Trades Unions has tried to alter its attitude, training cannot take place.
All that the union bosses who are in charge of the Commonwealth reconstruction training scheme require to do to-day is to refuse to take trainees and the Minister will not take steps to urge them to do so. The union bosses and not the Government are in charge of the Commonwealth reconstruction training scheme. The result is that many trades are now completely closed to trainees. The lag is noticeable in all trades, but as I have said, it is particularly evident in the various sections of the building trade and that is of major importance. The figures with respect to the carpentry and joinery section should give the Government and the nation much food for thought. At the end of August last approximately 2,052 men throughout the Commonwealth were awaiting basic training in that section. I have no reason to believe that the position has since been improved. Boiled down, the position is that the post-war reconstruction training scheme has collapsed and has left in its trail disillusionment and disappointment for tens of thousands of ex-service men and women. The hopeless position existing in New South Wales is also reflected in Victoria and Western Australia and Tasmania and to a lesser degree in Queensland. Recently, the Deputy Director of Post-war Reconstruction in Queensland, Mr. J. Mitchell, said that only 724 men and women were awaiting training. He said that more than 8,000 exservicemen did not wait to undergo the training they had previously sought, hut had apparently re-established themselves in civil life by their own endeavours. There is another side to that statement. I put it to the House that if the truth were known most of those men became sick and tired of waiting and in their disgust went in search of jobs elsewhere. In all probability they will be condemned to unskilled trades for the rest of their lives because the Government has denied them the right to obtain the vocational training which it promised to them. The Government’s plan has completely misfired. I estimate that in the industrial field it has ‘been only 30 per cent, successful, whilst I have reason to believe that its scheme for the land settlement of ex-servicemen has been an even worse failure. I challenge the Government to deny that in Queensland hundreds of exservicemen were held on waiting lists for months and encouraged in the hope that vacancies in training schools would catch up with the demand.’ Those vacancies never occurred. The men daily became more disheartened and took whatever jobs they could find. The tragedy is that in most cases they are now in dead-end jobs. The building industry in Queensland has hundreds of ex-servicemen on its waiting list. They are given the stock excuse that the industry is unable to absorb them. This is a tragic and shocking commentary on the Government’s attitude towards ex-servicemen. Dozens of new Centres could be established in Queensland. Surely the trade unions could be more charitable and show to these men some measure of gratitude for what they did for Australia during the war. I am informed that while plumbers are urgently needed in Brisbane, men waiting to learn the trade are being held on deferred lists. The same pathetic tale applies in respect of practically every section of the building industry. The Government should have done everything within its power to ensure the rehabilitation of ex-service men and women, and to guarantee justice to them. However, I am satisfied that so long as it remains in office, the promises made to them will not be honoured. I admit that many thousands have received benefits under the training scheme. At the same time, however, it is now clear that the scheme which has been in operation for over two and a half years has broken down. [Extension of time granted.”] Because this is a matter which will vitally affect the future welfare of tens of thousands of young ex-service men and women, I appeal to the Minister to ensure that opportunity shall be given to the House for full discussion and proper consideration of the complaints and suggestions which emanate from all parts of Australia. I tell the Minister now that I shall not he impressed by any lengthy recital of statistics which he may make because I am convinced that the reconstruction training scheme is dead. I remind the honorable gentleman that since January no new training centres have been established, and the complaints which I have ventilated are those of exservicemen’s organizations whose members are better acquainted with the actual operation of the scheme than any one else. I direct the attention of the Minister .particularly to the report presented to the thirty-third annual conference of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, six pages of which are occupied with a denunciation of the Minister for Post-war Reconstruction. The opening paragraph of that portion of the report which deals with reconstruction training states -
Your executive is deeply perturbed at the apparent indifference of the Commonwealth Government towards the Commonwealth Reconstruction Training scheme and its failure to arrest the drift which has occurred. For the past two years we have been telling the responsible Minister, Mr. Dedman, that there has been a serious breakdown in the scheme, but your executive is reluctantly compelled to report that nothing tangible has been done to overcome the lag in training which is driving many young men and women into deadend jobs, thus converting them into an economic loss to the community.
I emphasize that that statement represents the considered opinion of the foremost body of ex-servicemen, which, is satisfied that the scheme is a complete and dismal failure. That opinion is based upon reports obtained from all parts of the ‘Commonwealth, and the actual evidence ‘adduced by the league establishes its case beyond any shadow of doubt. Whilst I am not so concerned at this moment about those who have received training under the <scheme, because I acknowledge that a great number have been trained, I am concerned at the great indifference to the scheme now exhibited by the Government, and I say that the allegations -of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia that the Government has failed to .arrest the drift j that there has been a serious .breakdown of the scheme., and that tens of thousands of ex-servicemen will not receive the training to which they are entitled, must cause grave disquiet. I emphasize particularly the fact that no new training centres have been created since January last, which makes it clear that the scheme is as dead as the dodo. Even now, I appeal to the Minister, in the name of the young men and women, many of whom were only eighteen years old when they were called up for service, to -re-establish the training -scheme at once, and to ensure that those who have been selected, for training receive that training. If the Minister is (not prepared to undertake to do so he will dishonour the promise made to ;so many .of <o.ur young men .and women during .the war..
– We are becoming accustomed to the technique of the Opposition parties, .whose members appear to believe that every week they must make a motion of censure <of the Government or for the adjournment of the House in order to obtain the publicity which they desire. This .morning it was rumoured .that a motion of ©ensure of the Government was to be made, but apparently members of the Oppositionthought better of it, ,and because they had nothing better to put forward they pushed the honorable member for Moreton (Mr. Francis) into making this absurd motion,, in support of which no weaker case than bis could be imagined.
Let us examine the reconstruction training scheme as a whole and view it in proper perspective. More than 1,000,’000 men and women passed through the ranks of the Australian services during the war, and in recognition of the fact that a great many of them had been denied opportunities to learn trades and educate themselves for professions, the Government undertook to organize a reconstruction training scheme. The scheme which it evolved is ‘better than any similar scheme m any part of the world, and the efforts of the -anti-Labour government which was in power after World War I. torehabilitate the servicemen of that war fade into insignificance in comparison with the present -scheme. The Commonwealth reconstruction training schemewas organized on a -very wide basis, and embraces .courses <o’f training for almost every profession, calling and -avocation. Of those -who passed through the services, -moise than 300,’OOQ have applied -for reconstruction training, 170,000 are :at present receiving -training, -.and -many thousands(have already ‘completed their training. I remind honorable’ members that certain courses of training .such as >that for »themedical profession, require as flong as .six years to complete. It is mot expected that the scheme, -which was inaugurated in 1945 and was estimated to require .a period of eight years for its completion, will be completed .before 1953. It is -arrant -nonsense, therefore, for critics -of the Government to contend that a scheme which is .already training 1X0,000 men and women .and will continue to operate for a number of years more, has been a failure.
The honorable member concentrated his attention on training for the building trades, and .completely ignored all other aspects of the scheme. .1 point out that less than 10 per cent, .of the total number of trainees are concerned with the building trades, so that even if the honorable member’s criticism were true it is directed at only one-tenth of the whole scheme. I remind honorable members that the scheme will cost the country approximately £80,000,000 before it is completed. Can the provision of such a sum be regarded as a paltry effort towards reconstruction training? I invite honorable members to compare the amount expended by anti-Labour governments in the aftermath of World War I. with the financial provision made for the present scheme. I doubt if £80,000 was expended on reconstruction training for the servicemen of World War I., let alone £80,000,000. Up to the present the scheme has cost approximately £30,000,000, and before it is completed it will cost a great deal more. The expenditure of such a sum is more than justified because not only will it give to ex-service men and women opportunities which they would not otherwise have enjoyed, even had there been no war, but also it will contribute towards the stability of employment in this country in less prosperous times than the present. Undoubtedly, but for the occurrence of the war, many of the young men and women who joined the services would have been thrown into the ranks of the unemployed, because I remind honorable members that even in 1941, when Labour assumed office, there were still more than 100,000 unemployed in the community. At present more than 22,000 ex-service men and women are receiving full-time professional training, and more than 14,000 are receiving parttime training at universities. More than 7,000 are receiving training for rural occupations, and more than 85,000 are receiving full-time technical training, while 1S0,000 are receiving part-time technical training. In the face of those statistics the honorable member for Moreton has the audacity to contend that the scheme has completely broken down. I shall deal with the matter of the building trades, to which the honorable member has devoted some attention. At the inception of this scheme it was laid down and accepted by everybody concerned, including representatives of ex-service men’s organizations, that it would be useless to train people for certain employment unless jobs would be available there for them when their training was complete. That was a basic understanding between all of the parties when the scheme was being drawn up. It is true that at the time it was considered that as many buildings would be required in this country, a large addition to the labour force in the building industry would be necessary. The figure which was then set as the target represented an increase of 32;000 building workers. As time went on it became apparent that we had been over optimistic, because the ra.w materials required were not coming forward at the rate expected. The honorable member said that I had excused myself for the present position in relation to the building industry reconstruction training by saying that production was not meeting the demands that were necessary if the desired rate of construction was to be maintained. He said that if that was the case the Government was to blame. Apparently, according to the honorable member, the Government is responsible for the shortage of coal, timber, steel products and other necessary materials. Let it be perfectly clear that this Government by the 1944 referendum sought power to control production. If that power had been secured it is probable that the Government could have stepped up the- production of the basic materials which are in short supply. However, the honorable member for Moreton and his colleagues campaigned against the Government being granted any additional power. It ill becomes members of the Opposition to blame the Government for deficiencies in production when they were responsible, in part, for denying the Government power to ensure that greater resources were put into the production of materials urgently required. As I have already pointed out, we set a certain target in the building industry, but as time went on it was found that the raw materials were not coming forward in sufficient quantities to enable the training rate to be maintained in accordance with our original ideas. That does not mean that training has stopped altogether. The position to-day is that there are over 18,000 trainees for the building industry. How can members of the Opposition justify the assertion that the training scheme has stopped? I shall remind honorable members how this scheme works. The trainees receive basic training at technical colleges, schools or institutions; when they are classified as 40 per cent, efficient, they are sent out to approved employers. “ Approved employers “ are those who have been approved by industrial committees. There are about 300 industrial committees throughout Australia. It is necessary for the employers to be approved in order to ensure that after the trainees are 40 per cent, efficient, and during the time that they are in subsidized employment, the employers shall see that they are required to carry out all types of work, so that their training will be completed. Whilst most employers are completely loyal to the scheme, our experience prior to the decision to deal only with approved employers was that in some instances employers directed trainees to one job only. The result was that whilst they learnt that aspect of the work they did not receive full training. The trade unions, employers, and the Department of Post-war Reconstruction are represented on such industrial committees. Although the honorable member attacked the attitude of the trade unions in this matter, I point out they have co-operated fully with the Government in connexion with the reconstruction training scheme. The trade unions in this country naturally desire to ensure that those, workers who will subsequently join their unions shall be fully and properly trained. It is fortunate that the unions have taken such an interest in the operation of this scheme, and I congratulate the trade unions generally on the co-operation they have given to the Government in this matter. Quite naturally, the honorable member for Moreton and the Leader of the Opposition (Mr. Menzies), who always approach these matters from the point of view of the employers, are anxious that the number of individuals trained for the various trades should be in excess of the numbers that are likely to be employed in those trades. That is apparently the desire of most Opposition members. When the Leader of the Opposition, who is now overseas, was discussing the white paper on full employment, which I had the privilege to bring before this House, he made it quite clear that he did not see how in an economy of full-time employment it would be possible to discipline the workers, because they would be able to leave their jobs whenever they so desired. It appears to me that that is also the outlook of Mr. Ken Bolton, the president of the New South Wales Branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, who, if I heard correctly, divulged to, and discussed with, the honorable member for Moreton, matters that had been considered by regional reconstruction training committees. Only a garbled vert,ion of the proceedings of those committees was given. The honorable member referred to what Mr. Bolton had been told by Dr. Coombs. He did not even get second-hand information, but had to rely on third-hand information to bolster up his case. Quite evidently the honorable member for Moreton and the Opposition generally want to reach a position where there is an excess of people being trained for the different trades. The reason for that is, of course, that at some time in the future they will be able to discipline, the workers because of their fear of unemployment, as happened in the past.
– I give that assertion an emphatic denial.
– Despite the honorable member’s denial, that is unfortunately true. Similar sentiments were expressed by the Leader of the Opposition at the time that the white paper on employment was introduced into this House. The fact of the matter is that the trade unions have been quite generous in their outlook towards this matter. The trade unions are provided with all available information relating to the trend of production of various raw materials that are required by the building industry. I have not the time, at present, to cite all of the figures to the House, but should any honorable member like to have a look at them, I shall be pleased to make them available to him at any time. These figures were brought before Cabinet not very long ago, and I can assure all honorable members that the statistics are available to the Reestablishment Division of the Department of Post-war Reconstruction as a guide when determining the number of trainees that ought to be completing their training in order to be available in industry. Those statistics are in the most complete form possible. There are figures and graphs showing, for instance, the rate of produc-tion of bricks before the war and the rate of production that will be required in order to maintain the labour force already available or which, with the addition of trainees now in course of training, will be available at certain dates in the future. Similar statistics have been compiled in relation to roofing tiles, sawn timber, cement, asbestos sheets, fibrous plaster sheets, gypsum, window glass, wire and wire products, galvanized iron sheets, paint, copper, stoves, ferrous castings, reinforcing rods, and every other type of material required in the building industry. All of this information is available to those who are considering the rate at which applicants should be allowed to enter the training scheme in order that the flow of trained men from the scheme will be sufficient to make full use of the building materials that are being produced in this country. The officers who are in charge of the scheme have done a very fine job in this respect. The honorable member for Moreton has said that there are vacancies in the building industry waiting to be filled, but he failed to make clear the fact that the demand is for fully trained men, not for trainees. As I have said, 18,000 men are in training for the building trades at present, and when they have completed their courses there will, in fact, be a slight surplus of trained workers in the industry, unless the production of materials increases in the meantime, as, of course, we hope it will. That is why I have said that the trade unions are co-operating very well in this scheme. They have been very generous. Of the 18,000 men in training, 1,420 are undergoing basic training and 15,900, who are in subsidized employment, are at various stages ranging from 40 per cent, to 100 per cent, efficiency. I repeat that the trade union movement has adopted a very generous outlook on reconstruction training, and I take this opportunity to thank it very sincerely for the co-operation which it has given to me. The honorable member for Moreton said that the Government has allowed itself to be “bent to the will of the trade union bosses”. There is no truth whatever in that allegation. The trade union repre-, sentatives on the regional training committees and on the industrial committees are doing an excellent job and will continue to do so. I have had a great deal of experience in association with members of the trade union movement and their officials throughout World War II. and since, and I know that they have given great assistance to the Government and will continue to do so.
I shall supply additional figures in relation to the Commonwealth Reconstruction Training Scheme generally. In all trades, 26,590 ex-service trainees are in subsidized employment. [Extension of time granted.] In addition to the 18,000 building trainees now engaged on courses, nearly 2,000 entered the scheme, but left the industry during training. That shows, of course, that there are numerous opportunities for employment in other industries and that many ex-servicemen take other employment if they cannot secure admittance to the building trade training scheme as soon as they wish. That is why I cannot verify the figure stated by Mr. Bolton to be the number of ex-servicemen actually awaiting training in the building trades. Many applicants have found other jobs to their liking and will say, when they are given the chance to enter the training scheme, “ We have taken jobs’ elsewhere. We can get along nicely, and we no longer want to enter the scheme “. According to my memory, about 4,000 applicants are actually awaiting training, but I am sure that an examination of the lists would show that many of those men are already in other jobs and are no longer interested in the training scheme. That is a very good thing because it shows that there is plenty of employment available in Australia, a state of affairs which contrasts vividly with that which prevailed when the Opposition parties were in power. One of the criteria by which we judge whether the training rate is appropriate to existing conditions is the number of partly-trained men - those who have reached a stage of 40 per cent, efficiency or better - who have to be replaced on the jobs to which they were originally allocated. The figures in this regard are interesting. A year ago, the number of trainees who required placement a second time was about 2,000 each month. For the latest month for which statistics are available, the figure was very much higher than that. That shows clearly that the difficulty of placing trainees in employment once they have reached a stage of 40 per cent, efficiency is increasing. I repeat that the demand for labour in the industry to-day is for fully-trained men, not for trainees. Eighty per cent, of the approved employers in New South “Wales and Victoria have no trainees at all. “When asked why that is so, their answer is that they have not sufficient raw materials on which to employ trainees. Recently the representatives of the Victorian employers on the Central Reconstruction Training Committee obtained a definite assurance from the secretary of the Master Builders Association of Victoria that the association would be able to place 200 trainee carpenters immediately. That assurance was conveyed to the Commonwealth Employment Service which has reported that when Mr. Elliott, the secretary of the association to which I have referred, gave the assurance, he considered that certain action would need to be taken before it could be implemented. The main point was that his organization would endeavour to persuade its members to accept trainees immediately. It is inaccurate to say that employers have jobs waiting for trainees, and that therefore the training rate should be increased. The employers want more fully trained men. If they had them, they would be able fully to utilize all the raw materials that are now being made available to the building industry. The number of men actually in training now is sufficient to meet the requirements of the building industry for some time to come.
– Are trainees being used on public works?
– They are. The degree to which they are used depends upon arrangements that are made with the State governments. I am happy to say those arrangements are, in general, satisfactory. 0
The reconstruction training scheme will not end in the near future, but will probably continue in operation until 1952 or 1953. Trainees are being fed into various trades in numbers that are commensurate with the raw materials which are available. Because many men are waiting to be trained, whether the number be 1,000 or 4,000, it does not follow that they will not be given an opportunity to be trained. It is true that the peak period has been passed and that some training establishments have been closed, but the present training facilities are adequate to ensure that enough 40 per cent, efficient men will be made available to industry. The honorable member for Moreton directed attention to only one corner of the reconstruction training scheme, in which less than 10 per cent, of the total number of trainees are trained. The scheme, which was magnificent in its conception, has not yet been finalized. It will continue to operate for a considerable time. When it concludes, hundreds of thousands of young Australians will have learned professions and trades which they would not have been able to learn if the anti-Labour parties had occupied the treasury bench in this chamber.
.- I regret that the Minister for Post-war Reconstruction (Mr. Dedman) replied to the honorable member for Moreton (Mr. Francis) in a spirit of party politics. In my opinion, the honorable member presented his case very fairly and, in doing so, paid tribute to the scheme. I desire to say at the outset of my remarks that, although the reconstruction training scheme has been a great boon to exservicemen, it has met only with limited success. It followed the vocational training scheme of World War I. That was largely experimental, but it did much good. It is obvious that the Minister does not know the history of that scheme.
If he did, he would not make disparaging statements about it.
The Minister must have a poor opinion of the mentality of the reconstruction trainees who are undergoing courses of instruction in universities and technical colleges. He said that, but for the reconstruction training scheme, they would not have had an opportunity to attend those institutions. The honorable gentleman seems to forget that many of these men gave four or five years of their lives to the service of their country, and that if they had secured employment as munitions workers or remained in private employment they would not have needed to take these courses. They are living on a wage of £3 10s. a week, plus a small travelling allowance. Recently, I received a deputation from them in Melbourne. It was a pity that the Minister was not with me on that occasion. These men saw him a year ago, but their protests were largely unheeded. Their living allowance was increased by 5s. a week, but would the Minister or any other honorable member of this House like to live on £3 15s. a week, as these men are forced to do until their training has been completed? Some of them are taking the latter parts of the courses at their own expense. In some cases, they were led to believe that they could carry on under a loan scheme, but the Department of Post-war Reconstruction later said that that was not so. The figures that were presented to me by the deputation show that 2,359 of these men have abandoned their university courses. In over 50 per cent, of the cases, that was not due to failure to pass the examinations. At Mildura, where the students are mainly exservicemen, the percentage of passes is greater among the ex-servicemen than among the ordinary students.
The honorable member for Moreton referred mainly to building trades trainees, and the Minister said that they comprised only 10 per cent, of the total number of trainees. That may be so, but the problems that confront men who have been waiting for years to be absorbed into the scheme are very real ones. The 32nd annual report of the federal executive of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia contains the following passage : -
Your Executive is deeply perturbed at the apparent indifference of the Commonwealth Government towards the Commonwealth reconstruction training scheme and its failure to arrest the undoubted drift which has occurred. For the past two years we have been telling the responsible Minister, Mr. Dedman, that there has been a serious breakdown in the scheme, but your Executive is reluctantly compelled to report that nothing tangible has been done to overcome the lag in training which is driving many young mcn and women into dead-end jobs, thus converting them into an economic loss to the nation.
– Was that all that the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia said about the matter?
– The Minister for Repatriation (Mr. Barnard) should not come into this debate. He knows that the ex-servicemen at the federal conference at Brisbane hold him in contempt. Ex-servicemen who have been trained in the building trades and assessed as 40 per cent, efficient, cannot obtain employment, but a migrant who comes here as a fully trained tradesman, whatever his nationality may be, can obtain employment as soon as he arrives. Thousands of ex-servicemen are awaiting, the opportunity to take courses of instruction in various trades, but the Government says that saturation point has been reached and that they cannot be trained. The Minister, who has been at some pains to lick the boots of the trade unions, knows very well that an organization called the Building Workers Industrial Union, which is Communist led and controlled and which has defied1 the Arbitration Court and the Conciliation Commissioner, sends its organizers’ to joinery works to tell men to leave them and that if they do employment will >be found for them somewhere else. That organization is scattering the skilled men in the building industry and keeping others out. Why is something not done about it? I have in my possession two tables relating to the Commonwealth, reconstruction training scheme building trades statistics. They were compiled by the Victorian branch of the Returned.’
Sailors, Soldiers and Airmen’s Imperial League of Australia. With the consent of the House, I shall incorporate them in Hansard -
I emphasize that, in June, 1948, three years after the end of the war, 602 men who had been selected were still awaiting training in carpentry and joinery. In March, 1948, 1,197 men who had been selected were still awaiting training in painting and decorating. The relevant figure for June, 1948, was 828. The men who are waiting know that, because there is a trade union delegate on each industrial committee who dictates the number of men who will he trained in a particular trade, they may be permitted only to engage in labouring jobs.
– I rise to order. I object to the incorporation in Hansard of the documents from which the honorable member for Balaclava has quoted. They have apparently been prepared by the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia. The figures contained in them may be inaccurate. I am not prepared to consent to their incorporation until I have seen them.
– Two or three minutes age, the House, at the request of the honorable member for Balaclava, agreed to allow two documents to be incorporated in Hansard. The honorable member then proceeded with his speech. Now the Minister for Post-war Reconstruction is objecting to the incorporation of the documents in Hansard. I assume that the approval of the House to the incorporation of the documents still holds good.
– When I asked whether there was any objection to the incorporation of the documents in Hansard, no objection was raised, and leave was granted.
– The reconstruction training scheme has been lauded by the Minister, who claimed that 1,000,000 exservicemen had an opportunity to enjoy its benefits. That is not correct. With a few exceptions, only those ex-servicemen who were under 21 years of age when they enlisted are eligible for reconstruction training. Although the Opposition parties sought an increase of the age limit to 25, the proposal was rejected. As usual, the Government would not accept any amendments to its legislation. The Minister for Post-war Reconstruction laughingly and jeeringly said to the House, “ There will be no amendments “ and he accepted none. If, in the future, some ex-servicemen can receive preference only in pick-and-shovel jobs, that will be the responsibility of the Minister and of unions that have imposed quotas. On the industrial committees to which I have referred there is a representative of the employers, a government representative, and a union representative. An objection by any one member of a committee is sufficient to deny employment to a man. Therefore, if a union representative objects to a man being employed in a certain industry, he cannot he so employed, and will be forced on to the unskilled labour market. Such men will be the first to be discarded should a recession come, and I am sure that one will come if there is a substantial fall in the prices of our primary products. Yet the Minister would have us believe that all ex-servicemen are benefiting under this scheme. I should not have replied to him in this way had he not attempted to mislead the House. He knows well that union representatives in Melbourne are objecting to trainees being allocated to the establishments of members of the Timber Merchants Association. Sawmillers are being denied labour just because the union does not approve of that association. The Minister knows too that Mr. Chandler, the Communist organizer of the Building Workers Industrial Union, is going from shop to shop sending carpenters and joiners to other jobs and so bringing building to a standstill. If building is not being carried on to-day as rapidly as it should be, it is largely because of the machinations of those unions and because the Minister is not doing anything to restrain them. Prosecution of agitators who are sabotaging industry and whose entire efforts are directed towards the restraint of trade, is long overdue. The Minister has some very good officers in bis department. I suggest that as soon as possible he should take some action to absorb the waiting men for their own good and for the good of Australia.
– The honorable member’s time has expired.
.- 1 have been rather astonished at this discussion, which arose out of a motion made by the honorable member for Moreton (Mr. Francis) concerning the Australian Government’s reconstruction training scheme. Probably that scheme has met with more success than has any other phase of the Government’s activities. The honorable member concentrated his criticism upon what the Minister has described as only 10 per cent, of the entire scheme. The effort to bolster his case in that way was too much for the honorable member for Moreton, who subsided not from the force of any attack from this side of the chamber, but through the very weakness of his own case. I do not think he really believed most of what he said. When he had the audacity to refer to what had been done by anti-Labour administrations in the past to solve the rehabilitation problems of ex-servicemen, he proved that his case was not only bad, but also was falling to pieces. The Minister has emphasized the vastness of the Commonwealth Government’s reconstruction training scheme. I consider that that scheme and the Government’s immigration scheme are two of the most important things that have ever happened to this country. I am proud indeed that they have been initiated, planned and brought to fruition by Ministers of the Labour Government. Those Ministers had to begin their tasks without the assistance of trained personnel. They had to make their own plans, and carry them out. They had to find, by a process of elimination, the most effective formulas for the implementation of their proposals. That those undertakings have been so successful in the face of such difficulties is little short of a miracle. The magnitude of the reconstruction training scheme can be gathered from the fact that the total expenditure involved is estimated at £S0,000,000, or nearly £12 for every man, woman and child in this country. As the Minister has said, that is probably a world’s record. Certainly it is a startling achievement for a nation of 7,000,000 people, and is a striking tribute to the servicemen who protected this country during the war. To suggest that the Government’s reconstruction and rehabilitation plans are meagre or niggardly is absurd. There is ample evidence that the £23,000,000 already expended has not been wasted.
– Bead this report in reply.
– Unfortunately, the honorable member for Moreton has not said anything to which I can reply. The Minister has taken a broad view of the whole matter, and has attempted to show that a scheme of this magnitude cannot be criticized validly because of something that has happened in the building trades section.
Mr. Bolton’s name has been brought into this discussion. Whilst that gentleman is a valiant fighter for exservicemen, he must be, because of the very nature of his job, the spearhead of attack on any government that is in power. He wants greater concessions for exservicemen, and for his efforts in this direction he should be given full credit. Unfortunately, his statements are sometimes rather wide of the mark. For instance, some time ago he made the broad allegation that refugees were coming to this country in large numbers and occupying flats that should be available to Australian ex-servicemen. That complaint was made to the Minister for Immigration (Mr. Calwell), and from the Minister it came to me as chairman of the Immigration Council. It was shown to have no substance. Similarly. there is a lack of substance in Mr. Bolton’s statements on this occasion. I admit, however, there is some justification for bringing such complaints to light. The congress of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia is the right place to talk about rehabilitation ; but when a member of this chamber stretches what appears to be a factual’ statement, although perhaps a little exaggerated, he does a disservice to ex-servicemen and to himself. The Minister has pointed out that the only ground for valid criticism of the building workers’ section of the training scheme is in relation to supplies. The honorable gentleman painted an impressive picture of the scheme, showing the benefits that were being derived by hundreds of thousands of trainees; how the economy of this country would be nourished and enlarged when the scheme has been completed; how university-trained boys and girls would have a great opportunity to devote their intellects to the development of this country; how scientists and specialists were being trained; and how hundreds of thousands of tradesmen would, because of their training under this scheme, be able to perform valuable service to the community in the future. Does the honorable member expect a scheme of this magnitude to be completely free from set backs and bottlenecks? The Opposition raises the anguished cry that the entire scheme has broken down. Nothing could be more ridiculous. It is claimed that some unions have been niggardly in fixing the quotas of reconstruction trainees that they will absorb. Take for instance the building industry which to-day is having great pressure placed upon it to build houses. Homes are being provided by every means possible by private enterprise and government instrumentalities alike. But one does not have to be a seer, or to have a crystal ball, to know that some day there will be an excess of building tradesmen. Obviously, no Minister who has a sense of responsibility, would direct into any industry more employees than it could absorb. This has been pointed out by regional committees, and by employers as well as employees. The greatest disservice we could do to discharged servicemen would be to train them for occupations in which, upon the completion of their training, they would not be able to find employment. That would he the ultimate in cruelty. It would be better for them to remain untrained, and to depend on tha dole, as happened after the first world war under governments formed of the present Opposition parties. Of course, the trade unions are always fair game for honorable members opposite. The honorable member for Balaclava (Mr. White) spoke of bowing the knee to the unions. What he said was so far removed from the truth that it is almost ridiculous to answer him. Why should, the unions. he hostile to- trainees?? For the most part, the trainees are the sons or brothers of unionists. Does, the honorable member for Balaclava think that they are the sons of wealthy liberals? The purpose of the training, scheme is to put back into industry those, who, but for the interruption of their war service, would be already there. The honorable member spoke of the unions turning on their own people, but what he said was quite beside the point.. The honorable member has. a number of hatreds.. He hates the Beds, and he hates the unions. He hates anything and everything that will not fit into the small compartment of his mind, a compartment which congealed somewhere about, the year 1915. The point to be considered is: Has the Government fallen down in its plans for the rehabilitation of ex-servicemen? In the matter of the settlement of exservicemen on the land, one might ask what anti-Labour governments did after the first world war. In discussing that subject, the honorable member for Moreton (Mr. Francis) knew he was on dangerous ground’, and he skimmed over it with the grace of a fairy. He is a clever debater, but even he could not justify what previous anti-Labour governments had done in the matter of land settlement.
– Order ! The honorable member’s time has expired.
– I desire to draw attention to the allowance paid to trainees under the Commonwealth reconstruction training scheme. A trainee without dependants receives £3 15s. a week, plus fares. A trainee with one admit dependant receives £5 6s., plus fares, and a married trainee with one or more children receives £5 15s. a week, plus fares. I draw attention to the fact that the married trainee with one child receives £5 15s., but if he has six children he receives no more.
– Under the new child endowment provision, the man with six children will receive an additional 50s. a week.
– Yes, but that applies to others, as well as to trainees. The scheme provides that trainees may not earn, other income if they are to be1 eligible: for the allowance. I suggest that this: provision might be relaxed so as to permit, a. married trainee to earn up to-, say, £1 a. week. I can understand’ the reason1 for the provision. Without it, trainees might hold a well-paid job, draw an allowance, and receive their training’ at the cost of the Commonwealth. However, I believe that the time has. come when married men with children to support should be allowed to earn something for themselves.
I suggest, that the Government should provide some assistance for exservicemen who migrate to Australia from the United Kingdom. A friend of mine, a. Royal Air Force officer, came to Australia, some time ago at his own expense,, and has trained himself as a farmer. He now wants to buy a small- farm, but there is no provision by which he may receive assistance from the Government. He will be compelled to borrow money from a bank, at the ruling; rate of interest. The Government should consider the advisability of making an allowance to men of this kind who have proved that, they are honest, and willing.
I desire now to refer to decisions which have been given regarding the absorptive capacity of various trades and callings. Recently, the honorable member for Darwin (Dame Enid Lyons) mentioned an ex-serv iceman’ who wanted to be trained: under the rehabilitation scheme as an optician, but was told that the absorptive capacity of that calling did not warrant his being- trained for if. That was a curious- ruling, because I know for a fact that the industry needs more people. Anomalies of this kind should, be corrected. Twice previously 3 have mentioned the fisheries training school at Cronulla. Several young men have applied for training at the school’, r.nd their applications have been deferred. In two instances, the training of applicants has been delayed for eighteen months. On three- separate occasions they were told that their training would begin, but every time it was postponed. In answer to a question which 1 asked on the subject, the Minister for Postwar Reconstruction (Mr. Dedman) admitted that the absorptive capacity of the calling had been under-estimated when the school was first set up. The result is that several men have been seriously disappointed and misled - not intentionally I know, but they have been misled, nevertheless. What is to happen to men who have waited for eighteen months to commence training, and are then told they cannot get it?
– Statements made in this debate by the honorable member for Moreton (Mr. Francis) and the honorable member for Balaclava (Mr. White) were gross exaggerations. The rehabilitation training scheme is an immense undertaking, and I have been informed by competent visitors from overseas that it is the best scheme of its kind in the world. ,1 do not think that anyone would be prepared to deny that. The honorable member for Balaclava mentioned the rehabilitation scheme which operated after the first world war. There were many unhappy experiences under that scheme, and we are seeking to apply the lessons which we then learned. I speak as one who knows something of the subject, because I was a member of the appeal board which dealt with the complaints of men under that rehabilitation scheme. One thing we learned was the need for ensuring that firms which expressed their willingness to engage trainees had the plant and facilities for training them thoroughly. We discovered that some employers were anxious to overload their industries with trainees in order to secure the benefit of cheap labour. That has been guarded against in the present scheme. The honorable member for Balaclava said that thousands of young men who served during the war hnd been denied an opportunity on their discharge from the forces to undergo training in trades and professions of their selection. That is not so. On their discharge from the forces many young men of nineteen and twenty years of age, who would never have been apprenticed to a trade if the war had not taken place, have been trained and placed in the skilled trades of their choice. Every broken apprenticeship has, as far as practicable, been renewed and the interests of the apprentices have been safeguarded in every way. Our ex-servicemen, who were badly injured and, as the result of their disabilities, cannot return to the trades in which they worked at the time of their enlistment, are given special training in other callings in which their disabilities will not constitute too great a handicap. The representatives of the ex-servicemen’s organizations are fully consulted on these matters. Their advice is sought on questions relating to the number of men to be trained and the rapidity with which new courses are commenced. Everything possible is done to ensure that too many nien will not be trained and that training shall not be given so rapidly that the trainees cannot be absorbed into the callings of their choice. Very few trainees have finished their courses and have sought employment in other occupations, though some have sought employment in other occupations for short periods while awaiting absorption in the industry of their choice. It is untrue to say that great harm has been done to ex-servicemen, because of the failure of the scheme generally, but it is true that for various reasons some of them have not been able to secure employment in the industry for which they have been trained. There are many factors to be considered. Lack of materials in certain industries is not the least of them. The statistics show that very very few exservice men and women have had to fall back on the re-employment allowance because of their inability to secure employment in a suitable occupation. After commencing training many trainees change their mind about the calling in which they wish to be engaged and seek employment in other avocations, and while awaiting employment in the substituted calling, they are entitled to the re-employment allowance. On the 9th October last, only twelve ex-service mcn and women throughout the Commonwealth were receiving the re-employment allowance. In the big manufacturing centres, where 90 per cent, of the training takes place, no ex-service man or woman received the allowance. That indicates the remarkable success of the scheme. On that date in the whole of Victoria, which is regarded as the most up-to-date manufacturing State in the Commonwealth, not one ex-service man or woman was in receipt of the allowance.
– Many ex-service men and women engage in unskilled work whilst waiting employment in the trade or calling for which they have been trained.
– Very few of them do so. As the Minister for Post-war Reconstruction has already said, some of those who accept other work pending a call-up to the industry for which they have been trained are so satisfied with their temporary jobs that they decide to remain permanently employed in them. The Commonwealth reconstruction training scheme was planned by the Minister for Post-war Reconstruction and the officers of his department and almost everybody has given them credit for it. Some aspects of the administration of the scheme, including declarations relating to approved employers, and the fixation of the number of ex-service men and women to be trained in particular industries, are administered by my department in association with the Department of Post-war Reconstruction. We have found in practice that many men who have taken a course in bricklaying have changed their minds and have switched to carpentering. Others who sought training in a particular industry have accepted jobs in other industries which they have found to their liking. People of that kind would be included in the figures given by the honorable member for Moreton. The Commonwealth reconstruction training scheme is greatly superior to the training scheme which was brought into operation after World War I. I was present at the first meeting called by the late- Senator E. D. Millen at which the training scheme initiated after World War I. was originally propounded. Senator Millen and I planned that scheme from its beginnings. Later, he appointed me as a member of an appeal board, which was constituted to hear complaints by ex-servicemen that they were not being properly trained. In some instances, men complained that although they had asked to be trained in baking and pastry, cooking, they had been employed delivering bread. The case presented by the honorable member for Moreton is based on very flimsy grounds.
We must realize the magnitude of this scheme. The figures relating to the number of trainees and the number of those placed in employment vary from day to day. On the surface, the figures pertaining to different dates may appear . to be contradictory, but that is not so. At the 31st July last. the number accepted for full-time training was 69,362, and for part-time training, 147,072, or a total of 216,434. The number of those who had commenced training was 205,269 and the number of those who had finished training and were at work was 51,741. The remainder had reached varying stages of completion of the training courses. The honorable member for Moreton could find fault with the scheme only in relation to the training of men for the building trade. Both he and the honorable member for Balaclava (Mr. White) worked themselves up to a’ veritable passion in their attempt to “knock” the scheme; but as they proceeded they admitted that they did not doubt that hundreds of thousands of men had been trained.
– That is merely factual. “
– At the end of July trainees in the building industry and those who had completed their training and had been certified as 40 per cent, efficient and were earning full wages-
Mr. ACTING DEPUTY SPEAKER (Mr. Lazzarini). - Order! The Minister’s time has expired.
– Mr. Acting Deputy Speaker-
Motion (by Mr. Scully) put -
That the question be now put.
– The honorable member for Wimmera was already on his feet and beginning to address the Chair when you, Mr. Acting Deputy Speaker, put the question.
– Honorable members know that the motion “ That the question be now put “ may be submitted at any time. The Chair did not call the honorable member for Wimmera. The House will divide.
The House divided. (Mr. Deputy Speaker - Mr. j. j. Clark.)
Majority . . . . 11
Question so resolved in the affirmative.
Original question resolved in. the negative.
Sitting suspended from 12.45 to 2.15 p.m.
Debate resumed from the 26th October (vide page 2124), on motion by Mr. Dedman -
That the bill be now read a second time.
Upon which Mr.Fadden had moved, by way of amendment -
That all words after “That” be left out, with a view to insert in lieu thereof the following words : “ the bill be withdrawn and referred to an independent committee of experts for recommendation for a more equitable system of taxation in relation to private companies
.- Last night, the Leader of the Australian Country party (Mr.Fadden) made a thoughtful and skilful analysis of this bill. He showed its weaknesses, and suggested improvements. We expected the right honorable gentleman to make that thorough analysis because he has a profound knowledge and wide experience of taxation. Any honorable member who examines the bill with an unbiased mind must admit that the Prime Minister (Mr. Chifley) replied to the debate in a most cavalier manner. He did not attempt to analyse the criticisms of the Leader of the Australian Country party, but, speaking without notes, he simply brushed them aside and described them as “nonsense “. He stated that the small private companies had not protested against the bill. Of course, honorable members had no opportunity to correct the Prime Minister when he made that statement. The right honorable gentleman also said that proprietary companies should not be in a better position than a partnership or a single trader. What he omitted to mention was that the hill will place proprietary companies in a worse position than public companies. The right honorable gentleman cannot deny that the bill will produce that result. If he has not personally received protests from private companies, he must have seen protests published in the press. The Sydney Morning Herald, on the 21st September last, published the following protest: -
It can be assumed that existing private companies are being deliberately forced into liquidation or conversion into public companies, and that taxation is being used to discourage the growth of new ones.
The Prime Minister refused to answer a question which I asked him, but he deigned to reply to a question by the honorable member for Reid (Mr. Lang). The right honorable gentleman had said, quite blithely, that private companies could become public companies. The honorable member for Reid asked the Prime Minister whether the Advisory Committee on Capital Issues would allow private companies to raise the capital necessary to enable them to become public companies. I did not understand the full import of the right honorable gentleman’s reply, but I foresee that private companies will encounter many difficulties in converting themselves into public companies. As Commonwealth Treasurer, the right honorable gentleman must be aware that the conversion of private companies into public companies provides a means for speculation. This bill will destroy established businesses, which will be thrown on the market for sharedealers. Private companies, which desire to convert into public companies, will have to submit to tortuous negotiations with a government department in order to obtain the necessary permit. Honorable members can imagine the upset that this proposal will cause to private companies which are operated by a few people. If the Prime Minister has not received personal protests from private companies, I shall read to him a typical one from a small Melbourne proprietary firm. It is as follows : -
Small companies will drastically suffer if the hill circulated is implemented in present form.
Shareholders will pay double taxation, the company tax and also on their dividends. The shareholder’s dividend is merged with any other income he may have and the rate of tax is based on the aggregate of income.
Many of these small companies exist for the determining of family interests. These companies have generously supported the various war loans. My own company has subscribed over 50 per cent, of its capital towards these loans. Where the interest on bonds forms part of the company’s dividends it bears company tax (subject, of course; to the provisions for reduction of tax thereon prior to 1040 and thereafter). This interest is taxed again when it reaches the shareholder, along with the taxpayer’s other commitments’.
If the bill is passed as circulated it means that small proprietary companies will have to deregister and go into ordinary partnerships.
The clause relating to reserves needs careful revision in order to preserve the stability of these proprietary companies.
That is a fair and factual statement. I should like the Prime Minister to inform the House whether he desires private companies to deregister and to become partnerships. What is the reason for this proposal? I cannot help feeling that the Prime Minister has an obsession about taxation. We all know what happened in Russia. When the Kulaks opposed the introduction of collective farming, Stalin liquidated them. The Prime Minister has evidently discovered that a few wealthy people have distributed their money among a number of private companies, and he considers that by such means, they are evading the taxes to which they are liable. Instead of amending the act or introducing regulations to deal with them, he has adopted a blanket proposal which will punish all of the private companies, numbering many thousands, throughout Australia.. I am sure that the bill will have that result. It will create chaos. Many of these companies employ considerable numbers of people. The Prime Minister is able to regard the employment factor rather lightly at the present time when an artisan is able to take his pick of three or four jobs, simply because the world needs our production. The right honorable gentleman must think in terms of normal times and conditions. There are lean years as well as fat years in any community, and the Prime Minister cannot regulate them in Australia. If he desires to destroy private companies which have operated for perhaps half a century by taxing small businesses more heavily than he taxes the great public companies, he is the enemy of the taxpaying community.
As I have stated, the right honorable gentleman has an obsession regarding taxation, which is probably derived from his political ideology. Many people are socialists in theory, but, when they endeavour to put their theories into practice, they destroy efficiency, reduce the number of taxpayers, and ultimately bring about a state of organized poverty, in which many bureaucrats fill the role of dictators, and push the people around. That is not democracy. We are British people, and to us, the individual liberty of each citizen is of paramount importance. Communism, nazi-ism and fascism are variants of socialism. The object of the Prime Minister is to introduce a form of socialism in Australia. The Communist believes in achieving socialization by revolution. The right honorable gentleman is attempting to- introduce socialism, by means of taxation. Honorable members opposite may say that that statement is too extreme, and that it attributes to the Prime Minister an intention which he does not entertain.
The honorable member for Wilmot (Mr. Duthie) stated that Labour’s policy is not socialist nor Communist, but is that of a democracy. What does the honorable member mean ? He knows that every member of the Australian Labour party must sign a pledge that he will support all measures for the socialization of industry, production, distribution and exchange. The Prime Minister’s endeavour to secure a firm grip on the banks, which are the keystone of the commercial structure, shows the lengths to which he is prepared to go. At the last election, he did not obtain from the people a mandate to nationalize banking, but he was quite prepared to waste £100,000,000 of the taxpayers’ money in order to buy the shareholdings in the banks so that he could become the financial dictator of the Commonwealth.
Honorable members may wonder why the right honorable gentleman is making an attack on private companies at this juncture. He had expressed the opinion that some wealthy people, by distributing their money among a number of private companies, are evading taxation. Members of the Opposition would support any reasonable action that the right honorable gentleman proposed to take in order to prevent such alleged evasion of tax, and taxation officials could find the solution without, resorting to the extreme method proposed in the bill. The High Court of Australia declared invalid the Banking Act by which the right honorable gentleman proposed to nationalize banking. Although the Labour party has always professed to be opposed to appeals to the Privy Council against the decisions of the High Court, the Government has appealed to the Privy Council against the decision in the banking case. That action shows the lengths to which the Prime Minister is prepared to go in order to become financial dictator of the Commonwealth. He knows that, if he destroys the private banks and thereby gains control of the financial structure, he will be able to deal with various great enterprises. If he destroys the banks, it will not be difficult for him to take control of insurance companies and the coal and steel industries. At this point, I remind the House that the Prime Minister’s socialist friends in Great Britain are now attempting to nationalize the steel industry. Such a policy is bringing Great Britain to a pretty pass because it is reducing the source of taxation revenue and promoting inefficiency. In any country where such a policy is implemented, efficiency inevitably gives place to inefficiency. The Prime Minister knows that he can socialize big business in Australia if he can “ get away “ with the Government’s banking legislation; but this legislation is directed against the small man. Napoleon contemptuously referred to the British people as “ a nation of shopkeepers “. The British people are still the leading commercial community in the world. Their standards have been adopted wherever British commerce has penetrated, and British commercial standards and goods are still the best in the world. However, the Prime Minister, because he believes in socialism, now proposes to shackle the small business man. Because the Government cannot pass a blanket bill to socialize all small business people, he proposes to put them out of business by punitive taxation of this kind. I shall give some examples to illustrate the effect of these proposals. In the case of private companies, setting aside to reserves, say, one-third of their profits, the i rates charged on profits so set aside range as high as 12s. 6d. in the £1, i.e., more than 50 per cent, above the maximum rate payable by public companies. Is it fair that a small firm which may have registered as a private company in order to identify the business with a family name, or in order to produce goods that may become better known than they would be under the name of a public company, should be placed on a worse footing than big companies like the Broken Hill Proprietary Company Limited? If a greater proportion than one-third of the profits of a private company is set aside by it the rate nf tax thereon is even more severe, e.g., if 50 per cent, of profits are retained the maximum rate will rise to approximately 14s. in the £1 on the profits so set aside. Thus, if out of equal taxable incomes of 50,000 a public company set aside 33-J per cent, after paying taxes and a private company subject to the maximum rate of tax, set aside 50 per cent., the position would be as follows:- -
The Leader of the Australian Country party, in the course of his speech on this measure, said -
After making a careful study of the Government’s proposals, I consider that its proposed plan has many shortcomings which fail to achieve the equitable ends desired. Consequently, before drastic legislation proposals are allowed to take effect, I believe that the Government should appoint a technically qualified select committee of experts to sift all the technical evidence submitted and to make recommendations on this important subject.
That is only common sense. As the Prime Minister admitted last night, a deputation which waited upon him put forward a very good case on -behalf of private companies. I believe that the right honorable gentleman was impressed by the representations it made to him. A chartered accountant has circulated a statement to private members showing in detail that the object of the formation of private companies is not to evade taxation. As I have already said, many of these companies are family affairs. Very often they are the beginnings of great enterprises. One can find many illustrations of that fact in Great Britain and in this country. We know of many instances where an individual has started a business as a private trader and later converted the business into a partnership. However, partnerships are faced wtih all kinds of difficulties including the fact that the partners must accept personal liability for all debts and obligations incurred by the partnership. But even a partnership to-day is taxed only at the personal exertion rate, whereas a private company is taxed at a rate above that applying to big public companies. For these reasons, the Prime Minister should accept the amendment moved by the Leader of the Australian Country party.
I hope that the Prime Minister will take warning that there is a limit to the effectiveness of high taxation. He must realize that the taxing machine cannot go on for ever grinding money out of the pockets of the people. Much of the industrial unrest occurring in Australia to-day is due to the fact that the workers object to the heavy tax which is taken out of their pay envelopes. “ Working for Chifley “ is a common expression among the workers. Although wages have been increased and the working week has been decreased, the purchasing power of money is less now than it was ten years ago. The housewife and the worker know these facts to their cost. Only recently, the Parliament approved the expenditure for the current financial year of £500,000,000 whereas the record annual expenditure before the war was about £100,000,000. The Prime Minister must know that he is talking with two voices when lie goes to a conference of employers and employees and says to them, “ Let -us have more production n, and, at the same time, by his executive and administrative acts he is curbing production toy depriving small businessmen of their initiative. When I refer to small businessmen, the name of Lord Nuffield comes to my mind: He started in business as a bicycle repairer at Oxford. To-day he is not only one of the greatest manufacturers but also one of the greatest benefactors that the Empire has known. It is possible that other men in a small way of business to-day will emulate his achievements. Many of our great enterprises in Australia had small beginnings. It is incredible that a member of the Government in the person of Senator Armstrong should have gone to the degree of criticizing’ Lord Nuffield by saying- that he had’ merely bought a) property in1 this country but had done nothing more to establish his- undertaking’ here. Lord Nuffield bats made’ gifts1 amounting tosome £20;000,000 within .the Empire1 including’ very generous gifts to aid child welfare1 work and orthopaedic purpose* in’ Australia. In addition, he has- founded fellowships at Australian universities’; The legislation will curb enterprise of the kind shown, by Lord Nuffield/. It will discourage Australian inventors who may wish to- promote an invention. The officers of theCouncil for Scientific and Industrial Research include some of the most brilliant scientists in! the world. Should, any of them wish to exploit an invention,, oppressive taxation of this kind will destroy their initiative. Should such. persons” endeavour to form a small company for that’ purpose- they would find themselves obliged1 to1 pay tax- at higher rates than; now apply to the wealthiest companies hi the country.. This legislation; has been1 introduced simply because’ the Prince Minister’ has- undertaken- a heresy hunt after a few people who, he claims,, are evading tax. Instead, he- should deal with individual offenders and not let the punishment fall upon- the just as well as the unjust. The right honorable gentle^ man), iri his brusque way,, dismisses every argument advanced- by the Opposition. Sometimes, I believe that it is useless for members of the Opposition parties to speak at all in this chamber. Certainly, we enjoy freedom of speech; but, perhaps, we could do with a little freedom from speech, because whatever the caucus says “ goes “ in- the Parliament. Under the circumstances what we say here may matter little, but it is in line with the thoughts of many thousands of Australians. This is not a matter of capitalism versus socialism. All of us should do our best to encourage the greatest possible development of this country. Undoubtedly many of the small companies which may be killed by this legislation will, as pointed out by the writer of the letter which I read to the House, deregister as companies and reform as partnerships. The Government will then receive less taxes from the members of such concerns,, and the individuals- involved will- restrict enjoy business activities. Many of them will’ do no more business than they need to do to earn a comfortable living as members of partnerships’ and employment will suffer in consequence. I think, that, the Prime Minister should be reminded of the economic law of diminishing returns because he has squeezed industry almost dry and is discouraging’ people who should receive encouragement. Revenue from taxation must inevitably fall off. I support- the amendment which was* so ably moved by the Leader of the Australian Country party.
.- This measure represents but ‘ another step in our descent into what, a famous: Australian judge once described as- the “ Serbonian bog of legalism “’. Taxation laws are no1 longer based on common sense, and the average citizen has not the faintest idea of his rights and duties in the- taxation matters. The Ministers of the present Government, who have from time to time presented taxation measures to the Parliament,, are incapable of understanding even, their own assessments when they receive them, and the taxpayer is absolutely at the mercy of the tax-gatherer. The average taxpayer, who has the fixed idea that if he resists it will be so much the worse for him, regards the assessment issued to him as simply another painful amputation, and “ goes quietly “. What happens when members of the Parliament get their assessments? Do they know whether the calculations are correct? Honorable members know the answer very well, and I do not need to ask whether they understand their assessments. Do they understand the mumbo-jumbo contained in the bill under discusion? Yet members and supporters of the Government have the audacity to describe this measure as a legal taxation code for every citizen of this great continent. The few amendments contained in this measure occupy only eighteen pages of print, but the Government has found it necessary to issue an explanatory memorandum which covers 62 pages. It is obvious therefore,, that the proposals contained in the new bill are merely a few more patches on the futuristic tax structure of the country. I challenge the authors of the bill to say whether the average sane man, the average citizen of normal intelligence, could understand the explanations placed before the House, let alone the amendments sought to be enacted by this measure. These amendments will make what is already obscure even more obscure, and will push us further into the bog. The Treasurer (Mr. Chifley) came into the House with all the assurance of Einstein, unfolding, for the first time, his theory of relativity, :and he recited the words of the plan prepared for him by the tax experts. Although he looks wise, I doubt whether he understands it,, and I have no doubt that when he receives his own assessment he is no wiser than are the rest of us when we receive ours. I have no doubt that he simply opens it, looks duly bewildered, shrugs his shoulders, and. decides that since that is his fate he must, like every one else, “ go quietly “. That happens te the recipients’ of tax assessments all over Australia when income tax assessments are received. Even, thosewho receive rebates do not know whether they are receiving all that they are entitled to receive.. I challenge any one who receives, a rebate to. say that he is sure that lie is getting, all he is entitled to get.. In the hands of the tax experts the simplest, return becomes a Chinese puzzle.. No two assessors of the Taxation) Branch are ever likely to arrive at the same assessment of a taxpayer’s liability. That is our taxation systemas it exists to-day. Each year a new batch of amendments is inserted in the legislation, and each year the situation becomes more” confused. We are simply going around: in vicious circles,, because the more technical our laws become the more loopholes are to be found in. them. That is why the present system has become so cumbersome and legalized and is such a favourite hunting, ground- for the taxation experts and lawyers. During the year, the Taxation Branch decides that there are certain defects in the existing laws. It calls in its experts and lawyers to draft amendments, which are, in due course, submitted to the Parliament and eventually become part of our “taxation !law. Outside experts and lawyers then go to work to evolve methods to circumvent the new amendments. More trickery and more litigation follow. One eminent member” of the judiciary owes his position to” the present system. He was so successful, en behalf of certain very wealthy companies and very wealthy individuals, in finding loopholes’, thai the government of the day decided that the only way to bring the wealthy individuals and those powerful companies to heel, was to appoint this very clever lawyer to a” very high judicial position. If is Only the very wealthy persons and corporation’s that could employ and brief that kind of assistance. The MOre involved the taxation system becomes the more lucrative it is for the lawyers” and the experts. Our tax laws presume that every taxpayer in Australia is a” potential’ crock, an’d that he is out to defraud the Treasury. lit order to deal with the few who do resort totrickery, the taxation laws have been’ made so involved that by all kind’s of strange devices, the Taxation Branch attempts to outwit the tricksters. However, they still get through, ana it is only the honest taxpayer who gets tripped up. The crooks are always a few steps ahead of all amendments proposed1 in the Parliament. It used to be a good’ sound principle to test a tax law by ascertaining whether it would’ stand1 up” to the very simple test that those who were being taxed knew exactly where they stood when they filed their taxation returns. When that test was successfully applied, the taxpayer knew exactly what he had to pay. Under the present taxation laws that test no’ longer succeeds. No other country in the world has allowed its taxation system to get in such a mess as the system of Australia is in. In no other country is a taxpayer, until he receives his annual assessment, so ignorant of his obligations to the Treasury. ‘ This country might well follow the example of the Treasury of the United States of America. In that country a citizen not only fills in his taxation return, but also makes out his own assessment. He estimates what he will have to pay, and encloses his cheque with his taxation return.. The Treasury officials then make the necessary adjustments. In Great Britain the taxation system works comparatively smoothly. When the States of Australia had control of their own taxation machinery, there was little of the confusion which now exists. It has only been since the Commonwealth attempted to devise ways and means of drawing up a formula without loopholes that taxation has become such a nightmare to the people of Australia. We have now reached the stage that one of the Government’s consultants wrote a book explaining how to beat the system. The Government then introduced a bill to prove that the consultant was right in what he said ! Now this consultant will be in the happy position of being able to write another book. Next year more amendments will be sought. It is like a perpetual game of hide and seek. Instead of perpetuating such a position, I suggest, seriously, that the Government should start out again. The people of Australia want a simpler taxation system. They are entitled to know exactly where they stand, and how the taxation system works. They should know their exact taxation commitment as they are earning their money. There is no reason why they should be exposed to such rude and shattering shocks when their taxation assessments arrive. The Government should work on the assumption that most citizens in Australia are fundamentally honest, and that they are anxious to meet their obligations. There is not the slightest justification for the Government to regard everybody in Australia as dishonest. The taxation return could be simplified. The present form is much more complicated than was the old form. The statement of income earned during the year should be simple. One return should be sufficient. Directions should be couched in simple language. I claim that the first matter to be remedied should be the system of treating deductions as rebates. That only results in confusion. The taxpayers of Australia are entirely ignorant of the value of their rebates, although they know precisely the amount of their deductions. The present formula of assessing taxes on the gross income and then allowing rebates off is, I submit, plainly and simply, financial chicanery, which results in gross and avoidable anomalies. That method penalizes those entitled to deductions. The tax of a married man with large family obligations is computed at the same rate as isthat of a single man without dependants.
Then the rebates are deducted at that rate. Therefore, the income is taxed at the higher rate.
One result of this system of rebates is to be seen in the incidence of tax reductions provided in the budget. A single man with an income of £500 a year will be £20 better off as a result of the relief that is to be given, but a married man with a wife and two children, and with an income- of £500 a year, will be only £10 better off as a result of that relief. A similar anomaly exists right through the tax scale. Under this system, the basic wage no longer exists in Australia. Until such time as the basic wage and all deductions are free of taxes, the workers’ standard of living will be below the minimum standard that is prescribed by the Arbitration Court. A just tax system would fix the statutory exemption at £312 a year, plus all deductions. Those who earned less than that amount each year would have no tax difficulties because they would be exempted from all taxation.
Deductions should also be stated clearly and simply. There is plenty of room to make them more generous. For example, the allowance for a university student who is being wholly maintained by parents ceases when he reaches the age of nineteen years. How many university students graduate by the time they are nineteen years old? Why should not the deduction operate until the end of the course? If we are to encourage parents to put their children into the professions upon which the future success of this country depends, such as medicine, architecture, engineering and science, the Government should not quibble about an age limit for deductions. The burden upon parents is heavier when the children are twenty years of age than when they are seventeen years of age. The Government should recognize that fact and make the necessary provision now.
Let us turn to the assessment itself. A Treasurer’s basic problem is to raise sufficient revenue to meet his budget requirements. He knows how much money he needs, the amount of the national income, and approximately the amount of income that is earned by each group. With these facts known, his task is to fix an income tax scale that will give him the amount of money that he requires from that source. It should not be difficult to do so. The scale should not be unduly complicated. There was a time when a taxpayer in a certain income group had no difficulty in working out his assessment. He took his income, made his deductions and then worked out his tax at 3d. or 6d. in the £1, as the case might be. Why should it be any more complicated to-day? The experts believe that by going into a number of decimal points and adopting an involved mathematical formula, they can deal more equitably with the taxpayers. However, the final result is very much the same, but in the process of working out their assessments the taxpayers become lost in a bog. If we reverted to the former practice, the Treasurer would derive exactly the same amount of revenue and the taxpayers would know exactly what to expect. That should be reason enough for immediate action.
The present system has defeated the purpose of pay-as-you-earn taxation. It results in the Treasury holding for long periods money that belongs to taxpayers, on which it pays no interest. That is a very serious matter for small wage earners. The Treasurer has neither the moral nor the legal right to hold that money. It belongs to the wage-earners; it is theirs. Nevertheless, he is doing so, and he is, as a result, reducing the basic wage and destroying the value of the pay-as-you-earn principle. I challenge any one to disprove my statement that when refunds are made to the taxpayers, not one of them knows that he is being paid everything to which he is entitled. If the tax scale were simplified, there would be no need to have such time lags or to make these adjustments.
Another unnecessary complication is the striking of two separate rates for social services and income tax. The proceeds both go into Consolidated Revenue, and if the Treasury desires to divide the proceeds- into separate funds, that could be done within the department. The present system has no advantages so far as the taxpayer is concerned. One rate for the Commonwealth would be sufficient.
The next necessary change that should be made should be the restoration of the sovereign rights of the States to impose their own taxation, and that could be achieved with a minimum of trouble. There could still be one uniform taxation return, which would be handled in exactly the same way as an electoral form. The income returns would be exactly the same. The deductions would be the same. The net income would be exactly the same for both Commonwealth and State purposes. Then the Commonwealth and State governments could independently strike their own rates to meet their own requirements. Both would be responsible to their own electorates for their own assessments. That would again bring the Commonwealth and States into proper perspective and would restore sovereign powers to the States. The taxpayer would again receive two assessments - one from the Commonwealth, and one from his State government. That would make again for responsibility in government. Instead of receiving handouts, the States would exercise their prerogative to control their own finances - a prerogative which was not abandoned at. federation, or taken away by any subsequent constitutional alteration..
Those are simple reforms and they would, if effected, provide once again a simple system of taxation. The taxation return itself should carry the schedules showing how much should be paid. A taxation system has not only to be just to all classes of taxation, but it also must be considered by the taxpayers to be just. That is not so to-day.
The Government is not only .maintaining high taxation on low incomes, but it is now, through the Taxation Branch, refusing to refund tax to a body of men who, the High Court decided, had had tax illegally taken from their earnings while they were employed in New Guinea during the war by the American Army Transportation Corps. When the Pacific war was in a desperate phase, large numbers of men, mostly skilled tradesmen, were recruited, in Australia by the American Army, to assist in throwing back the Japanese. Many of them were attached to the United States of America small ships section, and went from Australia to’ New Guinea, where they serviced and repaired the ships being used in the conflict. They were located at Milne Bay, Lae, Finschaven, Port Moresby, and other parts of New Guinea, and were right in the front line. They were sworn in for service, were under army discipline, and for all practical purposes, were part and parcel of the armed forces opposing the Japanese. For some considerable time, no tax was deducted from their earnings, but, under pressure from the Australian Government, the Americans eventually agreed to deduct tax on the standard scale applying in Australia. The men objected to the deductions, but had no option but to pay. Eventually, one of their number, a man named Miller, brought an action in the High Court to recover the amount deducted from his earnings. His ground of action was that section 7 (1) of the Income Tax Assessment Act specifically exempted from tax “ income earned in New Guinea by a resident of New Guinea”. Incidentally, under the section which I have just quoted, Burns Philp and Company Limited and W. R. Carpenter and Company Limited, earned large profits in New Guinea in pre-war days, and paid not one penny in tax. Miller claimed that he was a resident of New Guinea. In hie judgment, the Chief Justice, Sir John Latham, upheld the claim, and said that a man was a resident of the place where he ate, and drank, and slept. After the judgment in the Miller case a few of the men - a very few - got refunds of tax that had been wrongly deducted; but as soon as the news got abroad, and many men made claims, the department used every possible device to stall off the claimants, hoping that they would - and many did - give up the matter in disgust. Honorable members know what it is to be up against these officials. Recently, the department has been advising claimants that they could not be regarded as residents if they were not in New Guinea for more than six months. I ask honorable members to mark that this was done in spite of the fact that no time limit is mentioned in section 7 (1) of the act, and also in spite of the fact that the same Australian Government, when it appoints a public servant to the Department of External Territories in New Guinea, immediately ceases to deduct any tax from his salary. Another
Method of fobbing off claimants, is to ask them to supply details of the dates covering the periods they were located at various centres in New Guinea. As the men moved around frequently, this information would be available only had each one kept a diary, which, under war conditions, would be impossible. The department well knows that after the lapse of several years no such record would be in existence. Some of the men were employed on ships in New Guinea territorial waters, and were frequently transferred from one ship to another. From such men, the department wants to know the names of the ships in which they served and the time spent on each ship. All such information is, of course, quite immaterial in the light of the decision in the Miller case, but the department seeks, by such trickery - I use the word in its strongest sense - to evade the plain obligation imposed on it by the High Court decision. What many of the men greatly resent is that, whilst they are denied satisfaction, others who have worked side by side with them, have had their money refunded. Another ruse adopted by the department is to write to a claimant and tell him that his case is not necessarily on all fours with that of Miller, the dishonest implication being that Miller’s was a special case which had no general application. The department is also writing to claimants saying that they “ have not satisfactorily established residency in New Guinea,” although claimants have offered to produce their attestation and discharge papers in proof of their residency there. When this offer is made, the department merely states that its previous decision will be adhered to. It will be recalled that during the war, any serviceman who spent three months in New Guinea was exempted from tax for the whole year. Many high ranking officers went to Moresby for three months when things had become quiet, in order to get the benefit of exemption from tax in full. This is in striking contrast to the way in which the men who were right in the forefront of the New Guinea battles, are being treated. The Government has no moral right to retain the money it is withholding. It should act immediately in the matter, and no longer seek illegally to flout the decision of the High Court by retaining tax to which it has no right.
– Order ! The honorable member’s time has expired.
Motion (by Mr. Anthony) negatived -
That the honorable member for Reid (Mr. Lang) be granted an extension of time.
.- I regret that honorable members opposite were not courteous enough to grant an extension of time to the honorable member for Reid (Mr. Lang) who, when he was interrupted by the expiration of his time, had reached an interesting point in his analysis of this bill. Most honorable members would have liked to hear his concluding remarks.
– The honorable member for Reid was not discussing the bill before the House.
– The Minister’s interjection constitutes a reflection on the Chair.
– Order ! The honorable member must address his remarks to the bill. I ask him to ignore interjections.
– In addressing myself to the bill I propose to take heed of the speech made last night by the Prime Minister (Mr. Chifley) in reply to the amendment proposed by the Leader of the Australian Country party (Mr. Fadden). The right honorable gentleman spoke without notes immediately after the Leader of the Australian Country party had resumed his seat. He said that the bill dealt with a technical subject and he paid due deference to the profound technical knowledge on the subject possessed by the Leader of the Australian Coutry party. He said that ne did not intend to debate the technical aspects of the bill but that ne would state the general principles underlying the decision of the Government to bring this measure before the Parliament. He then proceeded to make several statements upon which comment might be made. He said, for instance, that it was acknowledged by all honorable members that there were loopholes in the act as it related to profits of private companies, and that these loopholes had to be covered up : In justification for the introduction of the measure, the right honorable gentleman said that some persons in the community were using the device of the private company to gain tax advantages over other sections of the community. With those observations we all agree. They are generally endorsed by all sections of the community which have endeavoured to persuade the Government to place on the statute-book an enactment consistent with the principles enunciated by the right honorable gentleman last night. But this bill represents a full swing of the pendulum in the opposite direction completely from the present position in relation to the taxation of private companies. It is true that there are many loopholes in the existing legislation which need to be covered up, but, in the revision contemplated in the bill, the Government has sought not only to remove any advantages that the shareholder of a private company may have had in the past but also to place him at a disadvantage by comparison with individual taxpayers, members of partnerships and shareholders in public companies as a whole. Such a taxpayer will hereafter be the worst treated taxpayer in the Commonwealth.
– That is the intention.
– That is quite untrue.
– Last night, the Prime Minister stated that the amendment of the law relating to private companies had been prompted by the fact that the Government knew of the existence of loopholes in the act, but the right honorable gentleman said that the matter had been brought to a head by the publication of a book written by a person who used the nom de plume of E. Kelly. I agree that the Government had to take some action following the revelations in that book, the author of which as honorable members know, was Mr. J. A. L. Gunn. Of course, Mr. Gunn did not write the book in order to inspire this kind of legislation. As he stated in the introduction, his purpose was to secure a reform of the taxation laws relating to companies. He wrote, inter alia -
The particular act was passed in 1936, which was in the golden age of taxation. The sad feature of a golden age is that you never know when you are passing through it.
Many people will appreciate that reference to-day. Mr. Gunn continued as follows: - ft can only be viewed in prospect or retrospect. If the author had illustrated his schemes by adopting the 1036 rates of tax, he would have found that, in most instances, the game was not worth the candle. J.t has only been because of the heavy rates of taxation that these various devices used by the private companies ‘ were made worth while.
Those penal rates of tax were applied after the right honorable gentleman became treasurer. The book continues -
The fault lies not so much at the door of the draftsman but in the present absurd confiscatory rates of taxation. Reduce those rates to a reasonable level, and the beam in the draftsman’s eye would recede to a harmless mote.
That was the object which Mr. Gunn had in mind when he wrote the book, and pointed out various flaws, complexities and loopholes iti our present taxation system. The Prime Minister read the book and, according to reports in the press, nearly every Minister diligently studied it, including the Minister for Information (Mr. Calwell) and the Minister for Transport (Mr. Ward). I can detect the light touch of their genius in the bill. The Government has had to act. Metaphorically speaking, there is a leak in the roof of the house, but the Prime Minister’s method of repairing it it not to send for a plumber to stop up the holes, but to burn down the building. Under this bill, private companies will be destroyed. Last night, the Prime Minister expressed his inexorable determination to show Australia and other countries that he is all-wise on every subject.
– The Prime Minister is determined te- do justice.
– The Prime Minister is determined not to accept advice on any matter. He poses as the all-wise Prime Minister and the all-powerful dictator, who will not accept advice even from experts in a particular field. Once he introduces a bill, he regards it as perfect in every detail, and refuses to accept any amendments.
Although the Prime Minister accepted1 the revelations in Mr. Gunn’s book, hedid not accept Mr. Gunn’s recommendations for improving the position. However, other people have been interested in the subject. The Institute of Chartered Accountants sent a powerful deputation to Canberra to interview the right honorable gentleman on the matter. Last night, he paid members of that deputation the compliment of saying that they were the most reasonable body of men that he had met. He said that they had made their suggestions with clarity and moderation,, but he rejected them coldly and flatly. The representatives of the Institute of Chartered Accountants agreed, in principle, that there should be no differentiation ‘ between the individual taxpayer and one who formed a private company with a handful of other people. But they said that there should also be nodifferentiation of a material kind between a business organization which pursued its activities as a private company and another which pursued itsactivities as a public company. However, this bill makes a marked differentiation between the rates of tax which will be paid by private companies and public companies respectively, and particularly private companies which must, as a matter of necessity if they are to remain in existence, place a proportion of their profits back into reserves.
I shall briefly outline the difference between the methods of taxing a private individual, a person who has shares in a private company and a person who has shares in a public company. An individual with an income of £1,000 a year is taxed at the personal exertionrate, which may be 5s. or 7s. in the £1. He receives one assessment, and that is his entire commitment. A person who is a member of a private company pays a flat rate of tax applicable to companies, which may be 5s. or 6s. in the £1. When he receives a dividend, he pays tax at the property rate applicable to his income. But a company must maintain a reserve fund to meet contingencies. Without those reserves it is at the mercy of any financial wind that blows. For tax purposes, the reserves are assessed not at the dividend rate of 2s. in the £1 applicable to public companies, but at the present rates applicable to taxpayers who own the profits.
What is the position of a public company in comparison with that of a private company? A shareholder in a public company receives his dividends, and the company pays tax at the company rate of, say, 6s. in the £1. The public company can retain as much of its profits as it likes in the form of reserves and the maximum tax levied on its undistributed profits is only 2s. in the £1 ! Whilst those funds remain in the hands of the company, for even a long period of years, the first and last tax levied on them is 2s. in the £1 as against up to 1.5s. in the £1 which will hereafter be paid by holders of shares in a private company on its undistributed profits. In the case of those persons, is there any adoption and application of the principle laid down last night by the Prime Minister that there should be equality of treatment of taxpayers? Is there anything at all that can preserve private companies from ultimate liquidation or absorption by bigger public companies that have taxation advantages that are now being stripped from the private companies? I see much more in this bill than a mere revision of the taxation laws. The Prime Minister, in pursuit of the application of his policy of nationalization, does not do anything accidentally. Once upon a time I thought that he brought down the legislation for the nationalization of private banks simply in a moment of pique-
– Order! That has nothing to do with the bill.
– I am dealing with the bill. I thought ‘the Prime Minister introduced the banking legislation because of momentary passion and frustration, but when I looked back over the years and the records I found that that legislation resulted from a deliberate policy. The destruction of private companies could also be the result of a deliberate policy. This legislation must even tually drive the private companies into the tentacles of the octopus, the big public company that has the advantage of being taxed only 2s. in the £1 on its undistributed profits compared with the tax of up to 15s. in the £1 that will be payable by the owner of the private company on his undistributed profits. The consequences of that are already manifest. I am informed that since this bill was introduced, some of the big chain store concerns have put out feelers to the owners of small country stores incorporated as private companies. They are offering to absorb them into their organization, to give them shares and take them over. That is already being done throughout country districts. I know that in my own electorate it has happened on more than one occasion. It means that the big chain store organizations and the powerful monopolies, are to be rendered more powerful. Does this Government favour monopolies or not? It states that it does not favour monopolies, but, when the time comes to nationalize certain industries and organizations, the Government will find it far easier and more justifiable politically to nationalize a few big concerns than a host of small ones. Therefore, we can see in this measure a little more than meets the eye, because if the Government sincerely- desired to amend the law relating to company taxes in order to give equity to all sections of the community, it would have adopted the suggestions of the Leader of the Australian Country party and the Institute of Chartered Accountants and appointed a royal commission or select committee, to examine the whole basis of company taxation in this country and, perhaps, taxation in general. I can see little hope of any of those suggestions being adopted although they are reasonable and moderate. From my experience of this House and of this Government over a period of time I have come to the conclusion that it is a waste of breath to make any concrete suggestions of a reasonable kind in the hope of co-operation from the Government. We must accept things as we find them. We can imagine only, that the Minister for Labour and National Service (Mr. Holloway) sees in this measure the destruction of small private companies and the creation of the octopus company and then tha nationalization of the octopus. He is visualizing the fruition of his dreams, hopes and plans of 1921, when he was chairman of the Labour congress that passed a resolution that there should be set up in Australia a supreme economic council, divorced from the Parliament and consisting of people outside the control of Parliament, in which the control of the business affairs of the country would be vested. The Minister says little, about it to-day, but, nevertheless, the record is there for all to see.
– The honorable member for Richmond has a great imagination.
– I should be glad to debate the subject with the Minister. He challenged me a litle while ago to debate it with him on the public platform, t shall be happy to accept the challenge at any time he likes.
– Order! There is nothing about a challenge in the bill.
– The honorable member would receive a drubbing.
– The Minister for Labour and National Service has not put his challenge in a concrete form. The bill contains many other features, but I am addressing myself particularly to the necessity of preserving the small private companies. Some of them are not so small, perhaps. However, most of them are family concerns. It is necessary to preserve them as a kind of spearhead of Australian industry. Most of the small private companies have been created because their founders, having started as workmen or businessmen of some kind, have, by their diligence, skill in their craft, their keen application and their service to their customers and the community, developed businesses into which they have introduced their sons, daughters and other family connexions. That is generally the genesis of the “ proprietary company limited “. We see names all over Australia such as John Jones and Sons Proprietary Limited, and these are proud designations. Private companies are not always created for the purpose of avoiding tax. As Mr. Gunn says in his book, up to 1936 there was not much point in the formation of a private company for the purpose of easing the tax. burden. These companies were formed because they were elastic, and because,, when the owner of the business died, that did not necessitate the liquidation of the whole concern and its passing into thehands of total strangers, because of probate payments and for other reasons. It was an elastic form of business organization, which enabled the continuance of the business founded by the promoter,, after he and those associated with him had gone. This bill is going to serve one of two purposes in most instances. I believe it will cause first a reversion topartnerships, with all the disadvantagesthat the partnership law imposes upon those who are members. It was becauseof the many legal intricacies relating to every member of a partnership that companies came into being many years ago. Business people in Australia, especially those in a small way, are going to becompelled, in self-protection, to disband, their small companies, and give shares to various members of their family on a partnership basis, in order to secure equality in relation to taxation. All that is being asked by Opposition members and other people who made suggestions to the Prime Minister since these proposals were announced is that those who are members of a private company shall not be placed in a worse position in relation to taxation than are other sections of the community. That is a very reasonable proposition. We ask, in effect that they shall be placed at least on the same basis for taxation purposes as the big companies, and that they shall not be at a disadvantage as compared with private individuals. I shall again refer to the words of Mr. Gunn. Probably he, more than any other man, has been responsible for the Government adopting its present course. In his writings he says that he believes that there should be only one system of taxation imposed in relation to companies. That is to say, every taxpayer should be levied according to his individual income. First, tax should be assessed on the profits of the company, and after the dividends have been distributed to the shareholders, taxation on those dividends should be at the rate applicable ibo the total income of those -shareholders, and a rebate of taxation equal to the tax that has previously been paid by the company should be allowed.
– Mr. Gunn is an accountant for big business.
– If the Minister’s interjection is meant to imply that Mr. Gunn is “gunning” for big business, it means that he has succeeded in his efforts to induce the Government to destroy the private companies. The Minister says that the book was written by an agent for “big business. There is no question but that the Government has fallen for the bait. I stress that the very large business organizations and the big public companies must grow - bigger as a -result of this legislation.
– That is complete nonsense.
– The smaller companies will ultimately go out of existence. The Minister says that that is nonsense. He may be competent to know exactly what will be the effect of this legislation.
– The Prime Minister told the House last night what the effect of the legislation will be.
– Whilst it is asserted that I am speaking nonsense, I am backed in my opinion by the representatives of the Institute of Chartered Accountants of Australia, which is comprised of gentlemen who probably have the most complete knowledge of company law and company taxation provisions amongst people outside of the Taxation Branch. I am propounding what they have already suggested, which is, that if the Government carries out its intention to pass this measure as it stands, and will not accept the amendment, the words that the Minister uttered a few moments ago will be proven very true. The Government will thereby indicate that it is acting so as to provide big business with the opportunity of its career, and is not concerned with the interests of the majority of the people of Australia.
.- A great deal of nonsense has been talked during this debate on the Income Tax Assess ment Bill. In the course of an emotional speech last night, the Leader of the Australian Country party ‘(Mr. Fadden), informed us that we were regressing threequarters of a century. He also made a whole host of -equally ridiculous statements. Under the law as it exists at the present the-re -are two sections whereby private companies can -obtain a major benefit as compared with other taxpayers in the community. The right honorable gentleman undermined the whole of his argument by informing us that w-e are destroying the whole joint stock structure of this country, and reverting to partnership and individual trading. Can honorable members imagine any more foolish assertion than that? I cannot imagine anything more stupid than were the remarks of the right honorable gentleman last night. There are very real factors which make it certain that we will not revert to the individual or partnership .organizations for conducting large-scale business enterprises, because, as honorable members know, there is the difficulty associated with obtaining sufficient capital, considerations of joint and several liability, and a whole range of other things. The disadvantages connected with partnership trading ensure that we will not revert to partnerships as a major way of conducting vast enterprises in this country. The right honorable gentleman also invalidated his major arguments by pointing out examples that were based on the assumption that the maximum rate of tax was payable by individual shareholders in private companies. That would certainly not be the case throughout the whole range of incomes. Many of the shareholders in private companies would not pay tax at the maximum rate of personal income tax. All of the comparisons heput forward are invalidated by the circumstances obtaining to-day. The right honorable gentleman referred to privatecompanies which, he says, are carrying large overdrafts. Bearing in mind the large amounts of interest those companies would have to pay, they would not be paying the maximum rate of tax to-day. Their profitswould be reduced by the amount of interest they have to pay on the overdrafts advanced to them. The examples- that he cited fell down in a test against the actual facts of the situation to-day. the major argument the right honorable gentleman advanced was that the private company ought to be compared with the public company or the large public enterprise. The simple fact is that the definition of private company in the act makes it clear that these companies must be under the control of a very limited number of people, and that brings us to the whole reason for the provisions contained in this bill. Under normal circumstances, in times when taxation rates are steady, or may be rising, there is a very good reason why undistributed profits should not be taxed at all. At that stage it is reasonable that undistributed profits should be put to reserve. The increased income accruing from the investment of those undistributed profits would be taxed when earned. The tax would be at the appropriate rate. The circumstances to-day are completely different. Therein lies the necessity for the amendment before the House at the present time, with regard to the reserves of private companies. The provision that deals with reserves that can be “ ploughed “ back without incurring liability for tax, states that 30 per cent, of a distributable income of £2,000 can be reserved without incurring undistributed profits tax. The percentage exemption decreases to 12.5 per cent, on the higher ranges. The monetary amounts that can be so set aside rise from £600 on the 30 per cent, allowance, to £5,000 on the 12.5 per cent, allowance. That will enable the companies to put away a fairly substantial amount without paying tax on it. Many of those companies, by virtue of their operations in recent years, may not require to put away reserves at all in these immediate postwar years. Whether that be so or not, they are allowed, under the provisions in this bill, to put away a reasonable proportion of their annual profits without being subject to income tax or undistributed profits tax on such amounts. That, I think, answers those who say that, under the provisions of this bill, private companies will not be able to put money to reserve to tide them over the next few years or to meet some foreseeable expense. That is provided for. It com- pletely destroys the argument of honorable gentlemen opposite that this measure will destroy the private companies that are operating in Australia to-day.
Individuals who form a private company do so mainly to obtain the benefits of joint stock incorporation. They control the voting power of the company and can distribute its profits or fail to distribute them, exactly as they wish. The number of members is between two and seven. At the present time, income tax rises to 15s. in the £1. It has been suggested that it should not be more than 10s. in the £1. If it did fall to that level, a great advantage would be conferred upon private companies which were able to put, say, 30 per cent, of their total profits to reserve when the tax was 15s. in the £1 and distribute it at a time when the rate of income tax was lower than that. It is true that when the portion of the profits that was put to reserve is distributed, it will attract income tax, but it will attract it at the rate appropriate to the year in which it is distributed. If, during the next five years the maximum rate of income tax were to decrease from 15s. in the £1 to 10s. in the £1, the members of private companies would make a profit of 5s. upon every £1 of the profits that were put to reserve when the tax was 15s. in the £1 and distributed when it was 10s. in the £1. That destroys the major argument that was advanced last night by the Leader of the Australian Country party. He said that if it were not for the undistributed profits tax, the shareholders of private companies would not be treated very differently from individuals who were conducting businesses either as single proprietors or as members of a partnership. While such people would pay tax at the prevailing rate upon every £1 of their net taxable income, and the tax on higher incomes is very heavy now, the private companies, for whom the right honorable gentleman shows such tender solicitude, would derive an enormous advantage by the simple expedient of placing a portion of their profits to reserve during the next few years and distributing it when the prevailing rate of income tax is lower. That is undoubtedly what would happen, and this measure is designed to prevent it, at least to some degree. I say “ at least to some degree “, because, even under the provisions of this bill, private companies are enabled, to put aside a portion of their profits for certain purposes without attracting undistributed profits tax. I believe that the arguments of honorable members opposite are completely answered by the facts of the situation to-day. We have been told that private companies in the lower income range should be compared with individual proprietors or working partnerships, and that those in the upper income range should be compared with public companies. The reason for the differential treatment of public and private companies is evident. In a private company, a. number of persons between two and seven, can decide, in the light of the actual position of individual members of the company, whether it would be to their advantage to make an immediate distribution of profits or to withhold the distribution and make it at a later period. Those who control the voting strengths of private companies can, and most certainly would, make use of the taxation laws to put substantial sums to reserve when tax rates are high and distribute them in the form of dividends when taxation rates arc lower. They would thereby derive a substantial benefit. Do honorable gentlemen opposite support that? Do they think that a man who, by virtue of his financial strength, can form a private company, and thus obtain all the benefits of limited liabilities and so on, should be enabled to obtain an enormous advantage that is not available to an ordinary individual, whether he be a single proprietor or a member of a partnership? If honorable gentlemen opposite believe that that should be done, they should tell the people that that is their view. It certainly could not be argued that such a state of affairs would do equal justice to two sections of the community.
The first difference between a private company and a public company is that the shareholding of the public company is widely spread. The directors are elected by the shareholders. It might be that one or two men who hold large numbers of shares in a public company, could influence a decision as to whether profits should be distributed or put to reserve. They could not, however, discover what the result to individual shareholders of the company would be if the income earned in one year were distributed then as compared with the result if it were distributed a few years later. In some instances, if a public company put money to reserve in order to gain the benefits of lower tax rates in later years, a man whose income had increased during the intervening period might pay more tax on the dividends at the end of that period than he would have done if they had been distributed in the year in which they were earned. “Mr. Fadden. - Does not that apply to private companies as well?
– The people who are in control of a private company have the advantage of knowing with reasonable certainty whether their incomes will decrease, increase or remain stationary. They know the circumstances of the few people who comprise the company. That information is not available to the board of directors of a large public company, the shares in which are held by many people. Even if it were available, the directors would be pressed to distribute as large a percentage of the company’s earnings as it was possible to do without impairing the efficiency of the company or neglecting the need to make provision to meet future commitments. If these conditions are satisfied, and the payment of tax cannot be evaded by deliberately withholding the distribution of the profits that were earned in a particular year, there is no reason why the undistributed profits of public companies should be taxed. Public companies normally pay to their shareholders the largest possible dividends, retaining only sufficient to provide a reserve against future contingencies. The shareholders would pay tax on the dividends that they received. It is vitally necessary to ensure that no company shall, by virtue of an intimate knowledge of the shareholders’ financial affairs, obtain a financial benefit by putting substantial sums to reserve and paying them out in the form of dividends when the rate of income tax is lower than it is now.
The only other contentious clause of the bill is that which seeks to eliminate the evasion of tax by individuals or groups of individuals setting up a number of companies and paying tax on the dividends received from each of them. The proposal is that the amounts so received shall be grouped together and that tax shall bepaid on the total sum. I do not think that any one will dispute the equity of that proposal. The only comment that has been made on this proposal has had relation to its practicability, but that will be a problem for the Commission of Taxation. Doubtless he will overcome it to his satisfaction and to that of the Treasury.
The honorable member for Reid (Mr. Lang) discussed a number of matters, including what he referred to as the simplification of the income tax legislation. Taxation legislation is never simple. It was not simple during the period when taxes were levied by both the State governments and the Commonwealth Govern-
Tuent, but no one worried very much about it, because the rates of tax were low.
– They varied as between States.
– There was a multitude of provisions. The taxation system at that time was very complex. The present system is, if anything, simpler. The honorable member for Reid has some right to talk of a simple form of tax. I am told that during one election campaign in New South Wales he promised to eliminate the tax of 3d. in the £1 that was imposed upon all income earners of that State on a flat-rate basis. I do not know whether he made that promise, hut I do know that when he became Premier of New South Wales he introduced a very simple tax of1s. in the£1. No taxpayer was in doubt as to his tax liability. He knew what he would be called upon to pay by multiplying1s. by the number of pounds that he earned in a week or a year. That was simplicity in its highest form, but it was the most inequitable form of tax ever to be conceived by the mind of man. It meant that a man earning £300 a year, with a wife and two children, paid £15 a year in taxes. Under the present complex system, however, such a man would pay nothing.
The honorable gentleman also said that the more technical taxation legislation becomes, the more loopholes there are in it. The position is just the reverse. When an act is written in simple language, the lawyers can find a host of loopholes in it, and they have to be closed by means of a formula. If all income-earners were to be taxed at a certain rate and no special provision was to be made for, say, primary producers, we should have a very simple tax system, but immediately we sought to give advantages to certain classes of the community we should complicate the system. The Prime Minister (Mr. Chifley) said on one occasion that, although he could easily achieve simplicity in taxation legislation, he felt that the need was for equity rather than for simplicity, and that if one had to be sacrificed to obtain the other equity should prevail. I believe that that is the view of the people of Australia generally.
The honorable member for Reid referred to a specific case. I do not know the circumstances of it. He said that the Taxation Branch informed the person concerned that he would have to reside in New Guinea for a period of six months before he was entitled to be regarded as a resident of that territory. The honorable gentleman said that there was nothing in the act to define a resident, and he read part of section 7. I have always suspected that the honorable gentleman’s speeches are written for him, and I think that this instance clearly demonstrates that that is so. Section 6 of the act, which is the definition section, defines “ resident “ or “ resident of Australia “ in the following way : -
There, in section 6, the one preceding the section to which the honorable member referred, is the definition of the residential qualification upon which he laid so much stress. The Income Tax Assessment Act must be a very good piece of legislation because no member of the Opposition has criticized its provisions. This seems to indicate that the taxation policy of the Government is just and equitable. The honorable member for Reid criticized, not the weight of taxation, but the complexity, as he called it, of the Income Tax Assessment Act.
Much has been said about the proposed amendments to those sections of the act which deal with private companies. I emphasize that there is no real similarity between private companies and public companies. The shares in a private company are, for the most part, held by a very few persons who, because of their large holdings, control the policy of the company. They have formed themselves into a company in order to obtain the benefit of limited liability. It is not correct that the proposed amendments will sound the death-knell of private companies which are sound and properly run, but they will ensure that the principals of private companies do not enjoy an unfair advantage over other taxpayers. [Quorum formed.’]
.- When an individual or a company forwards a taxation return to the Commissioner for Taxation, it has always been assumed that the information contained in the form is strictly private, and will not be divulged to any person who might use it in order to obtain a political advantage. However, we had a rude awakening last night as the result of certain remarks made by the Prime Minister (Mr. Chifley). The matter is of such importance that it is worth repeating what was said. I quote .the statement of the Prime Minister as follows : -
Some of the private companies, because of the taxation advantages they have enjoyed, have built up large reserves of capital. The proprietor of one such company is extraordinarily rich, but he pays less tax than some of the people who work for him.
At this stage I interjected -
How does the Treasurer know that? and he replied -
It is easily done. This is not a hypothetical case.
Thus, he made it clear that he was divulging information about an actual case. When the Leader of the Australian Country party (Mr. Fadden) asked him how he knew of the matter, he replied -
Because the employees of the company have themselves told me. lt is unlikely that the employees would be fully conversant with the affairs of the company, and that would almost certainly apply to those employees with whom the Prime Minister discussed the matter. They would not know how much tax was paid by the proprietor. However, the important feature of the Prime Minister’s statement is that by mentioning employers he denoted that he knew the person or company and he claimed knowledge of particulars relating to the affairs of a taxpayer, and that he related some of those particulars in this House. He continued -
I do not propose to go into details, but if I were disposed to take up ten minutes of the time of the House I could explain mathematically how the result was achieved.
It appears, evident that certain advice on the subject was tendered to the Prime Minister in his capacity as Treasurer; that certain information was given to him when it should have been regarded as strictly confidential; and that the information so disclosed has been used by the Prime Minister to support his argument in this House. What happened in that case could happen in others. If information about a taxation return can be disclosed to a member of the Cabinet or to a member of Parliament what becomes of the secrecy provisions of the Income Tax Assessment Act? How can individuals or companies be safe from the prying eyes of persons who may use confidential information about their affairs for political purposes? I do not think that we oan leave the matter where it is. An explanation of some sort is due from the Government. The present position, in view of the statement of the Prime Minister, must be alarming to the general body of taxpayers.
This bill is a difficult, technical measure which deals with a complex subject. No one pretends that the provisions relating to the taxation of private companies, incomparison with those relating to partnerships and individuals, have not given concern to accountants and taxation experts, but I do not believe that a satisfactory solution of the problem has yet been found. This bill certainly does not provide such a solution. The bill is designed to close certain loopholes in the present act - that, and nothing more. It is not the result of a wide survey of the whole situation. It is not the product of minds intent upon promoting justice or the simplification of the provisions relating to the taxation of private companies. We should get firmly established in our minds the fact that this bill imposes additional taxation.
– That is wrong.
– It hae been explained previously that what the Government gave away in recent income tax concessions only equalled what it had saved by ceasing to pay certain subsidies. Now we have a further amendment of taxation legislation, and this time it is designed to increase the flow of revenue to the Treasury. Under the amended legislation, more money will be obtained in tax from private companies. That will be the inevitable result unless many of the smaller companies go into liquidation, which is probably what the Government is aiming at. We should no forget that the Government’s aim is socialization. It has an avowed hatred of “ little capitalists “. ft wishes to build up a few big firms so that they may be easily socialized. On the surface, it looks a9 if the amendments will effect a reduction of rates in some instances. .For instance, the rate on the first £5,000 of income is to be reduced from 6s. to 5s., but the effect of this concession will be to increase the amount upon which the undistributed profits tax will be levied. It would be interesting to learn how much i9, in fact, collected from the primary tax, and how much from the undistributed profits tax. Moreover, under the amended legislation, more companies will be dragged into the net so that, instead of paying at the rate of 2s. in the £1, they will be called upon to pay at rates .which, may be as high as 15s. in the £1. There is also the proposal which will lump the share of undistributed profits of the taxpayer in other companies with his personal income in order to arrive at a rate which will apply to undistributed profits, and this must bring in more revenue. I shall he surprised if, at the end of the year, Treasury figures do not bear out the truth of what I am saying. T repeat, therefore, that unless the small companies are to be smashed, this measure . will impose additional taxation.
All those who so far have spoken on the bill have admitted that certain persons and companies have been doing very well over a considerable period under the existing taxation legislation. The position needed rectifying, but the Government has not gone the right way about it. It is always easy to see the faults of a system, but the reformer often fails to visualize the faults inherent in the system which he would put in its place. I maintain that in closing the present loopholes in the act, the Government will do incalculable harm to many small companies which are ‘ playing an important part in the economic life of the country. In other words it appears that because certain fat sparrows have been dipping too much into the wheatthrown out the Government has decided to bring forward a battery of howitzers. When it fires the howitzers it may get the odd fat sparrow, but the chances are that it will also get the rest of the birds in the courtyard. That is the main fault in the bill. In order to rope in a few people the Government submits this proposal which will do a lot of harm to small people who join together in a company in order to commence or to develop some industrial or other enterprise. The method of continually clamping down on certain taxpayers instead of making a broad survey of the equity of taxation may be called with truth the Chifley technique. The taxation officers are not responsible for this policy. They are merely public servants who obey the behests of their bosses for the time being. They are men like ourselves; they do not like to be hard; but in cases which I have taken up I have always been confronted by the fact that undue pressure has been exercised by the department to the detriment of the private taxpayer. It is the Chifley technique to get as much money in taxes as possible. If any doubt arises in any case the benefit of the doubt is given not to the taxpayer, but to the Treasurer. It should be the other way around.
Private companies have played a very prominent part in the development of this country. Throughout, every walk of business life, in manufacturing industries, pastoral industries and in the world of commerce, development has been made possible principally through the efforts of the smaller private companies. I believe that, in the main, private companies are more efficient than are public companies for the simple reason that most of the shareholders of private companies are working partners. Unlike the shareholders of the big public companies, they have an intense personal interest in the success of their enterprise. They keep a much more careful watch on waste and extravagance and exert a much more forceful drive for increased efficiency. We are still a very highly-taxed people. Taxpayers on the lower income ranges have received some relief from the tax burden; but those in the middle and higher income groups still have to pay very high taxes. Young people who attempt to commence new businesses are confronted with a colossal task - an almost impossible task. Unless they are prepared to live on the standard of a coolie it is difficult for them to save sufficient money with which to start a business. In the circumstances that prevail to-day if a young man wishes to be more than a mere slave of the State or an employee of somebody else he has to seek the co-operation of others. He usually seeks the financial assistance of his friends and colleagues and the people with whom he thinks he can work. Although there have been some faults in the existing legislation it has generally tended to encourage young people to establish businesses of their own. Everyone who is in business knows how hard it is to establish any sort of business to-day. Costs have risen in all directions. The costs of plant, land and stock are very high. The capital costs of establishing a small business are so great to-day as to be beyond the resources of most ordinary people. If I were Treasurer of the Commonwealth I should be thinking of legislation designed not only to close loopholes to ensure that all wealthy people paid their just dues in taxes, but also to encourage the formation of private companies, which, after all, would only be encouraging private co-operative movements. That policy might well be adopted by any Government. This Go vernment should encourage the thousands of young ex-service men and women who wish to establish themselves in businesses in the community in their efforts to overcome the colossal barriers that confront them. If we shaped our policy along those lines much good would result. If we stifle personal enterprise and the desire to establish new businesses, if we make things so hard for those who desire to become self-employed, as to make it almost impossible for them to develop their originality and initiative, we do a great harm to the nation, unless we desire, as this Government evidently does, to bring about the establishment of a totalitarian State. I know people who are shareholders in some private companies in Australia. They are worried, as are self-employed persons generally, about the difficulty of establishing reserves in these days of high taxes. Many of the smaller companies of which I have some knowledge have been unable to establish reserves to tide them over a period of crisis. What sort of situation would there be in Australia if we had to face the cold blast of a. worldwide collapse of prices? If world prices fell many small businessmen and the shareholders of small private companies would have no alternative but to go on the streets because high taxes have made it impossible for them to establish reserves with which to meet such a crisis. Notwithstanding that, the Government has brought down a bill which makes possible the greatest attack on the reserves of private companies that has ever been made in the history of this country. Prior to 1940 a company was able to set aside as reserves approximately one-third of its profits. Because of high costs, that proportion may not be sufficient today to constitute a safe margin. Many of the old arrangements covering depreciation have had to be completely overhauled in the light of present-day prices. Yet there is to be this further assault on the reserves of private companies, not because their profits have been too great, but because a few of the people who invest in such enterprises have been able to escape their just burdens of income tax. A grave danger confronts the small man who happens to be a shareholder in a private company.
Merely because some wealthy man invests some money in the company the proportion of the undistributed profits applicable to him are added to his income and the property rate appropriate to his total income is applied to the reserves of the company. Merely because a wealthy man becomes a shareholder in a private company the small man is to be penalized. It is not unusual in these days for people who wish to establish themselves in business to approach some person who has capital to invest and to endeavour to convince him that what they propose to do would provide a good investment for his money. I know of two cases in which men have financed others to. commence businesses in which they themselves have had no real interest. Their sole reason for investing their money in the businesses was to help friends or colleagues. They have guided the progress of new businesses for a time and have subsequently disposed of their interests. I know another case of a wealthy man with great business acumen who invested money iri a small private company without having any intention to retain his investment in it but solely with a desire to assist others!
People generally prefer to invest their money in limited liability companies. That is easily understandable. I suppose that if I asked any member of this House whether he would sooner join a partnership or invest his money in a limited liability company he would, but for this bothersome bill, unhesitatingly choose the latter because he would know the extent of his liability. Members of partnerships are taxed at the personal exertion rate, and unless their earnings place them in the higher income brackets their tax assessment is not very great. Those who form a limited company have first to pay a primary tax of 5s. in the £1 on the first £5,000 of profit. That is a very heavy impost as a beginning ; but in addition the iniquitous undistributed profits tax is added to their incomes and assessed at the property rate. As the law operated in the past it was not so unjust because in the following year the taxpayer could claim a rebate of the amount of undistributed profits tax paid in the preceding years. Under this bill, however, that procedure is to be entirely altered. A person who invests his money in four or five private companies each of which sets aside certain amounts annually for reserves has his share of undistributed profits lumped together for the purposes of assessing the property rate of tax which is applied to the undistributed profits of the companies in which he holds an interest. This measure will crush very many small companies and will constitute a barrier to the formation of new ones. I agree with the honorable member for Richmond (Mr. Anthony) that it will undoubtedly have the effect of forcing small companies into liquidation and compel them to dispose of their assets, not on the open market, but to the bigger companies. The Government says, in effect, “We shall destroy the small businesses and strengthen the big ones”.
I mentioned earlier that, in this measure, the Government should not only have sought to close up the loopholes but should also have approached the consideration of this subject with an open mind in an endeavour to ascertain how best the shortcomings of the existing legislation could be overcome and how best it could simplify the taxation laws. I do not think I am saying anything new when I say that many public accountants to-day have the greatest difficulty in understanding the existing taxation laws. Individual taxpayers and shareholders of private and public companies do not know where they stand from one day to the next. It is this complexity in the law as it relates to personal incomes and undistributed profits that has caused great delays in the issue of income tax assessments by the Taxation Branch. I have been informed that in some instances assessments for individuals and for private companies for the year ended the 30th June, 1945, have not yet been issued and that the taxpayers and the companies concerned do not know where they stand. This bill will make the situation worse.
Let us consider the various inquiries which will have to be made before the Taxation Branch will be able to calculate the tax obligations of a private company. First, the assessor will have to find out its undistributed income, and the name and holdings of shareholders, differentiating between different classes of shareholders. Secondly, he will have to ascertain the names of shareholders who also hold shares in other private companies. Thirdly, he must ascertain the distributed income, as defined by Division 7, of each of the companies in which each shareholder owns shares. Fourthly, he must find out how much of the undistributed amount in each of those companies the shareholder would be entitled to if the deemed distribution were calculated for each of such companies. Fifthly, he must ascertain a shareholder’s total income from all other sources. There may be other requirements, but I have described, as far as I have been able to discover it, the nature of the work that must be undertaken before the Taxation Branch or a private company may ascertain its income and tax liabilities. Those are some of the problems which confront a person who is associated with a private company. What will be the position of a private company with shareholders residing in various States, who have interests in other companies in various States, and who may be the beneficiaries of deceased estates or beneficiaries under wills which are in dispute? Honorable members should consider all the technical and administrative difficulties involved in the matter. A law is not really satisfactory unless it is simple. If this bill is to be judged by the yardstick of simplicity, we must conclude that this bill is a bad one.
.- I approach this problem with some moderation because it is evident, as honorable members on both sides of the House have freely admitted, that, in the past, shareholders of some private companies have found themselves in a favorable position compared with other taxpayers. It is worth noticing that that state of affairs has endured during the seven years in which the Treasurer (Mr. Chifley) has held that office. For seven years the right honorable gentleman considered the position of private companies was entirely satisfactory. Now he has decided to clamp down on them. For seven years, private companies have conducted their business and regulated their economy on the assumption that the present method of taxation would continue to apply to them. Under this legis lation, however, the right honorable gentleman will subject them to harsh and penal provisions.
The Government’s proposal relating to private companies leads me to two conclusions. If the Prime Minister is right in applying this form of taxation now surely it would have been equally right for him to have applied it a year, or two years, ago. I wonder why the anomaly was not corrected earlier. The explanation is that taxation in Australia is in such a state of hopeless muddle and there is such a maze of regulations and amendments, that the anomaly passed unnoticed until the recent publication of the book by Mr. J. A. L. Gunn, to which the honorable member for Richmond (Mr. Anthony) has referred. That book directed the attention of the Government to certain loopholes in the act. This bill bears every sign that the revelations in the book were brought particularly to the attention of the -more extreme elements of caucus. Does any honorable member deny that our existing system of taxation is almost incomprehensible to the average taxpayers? How many honorable members are able to calculate the amount of tax which they are liable to pay? Yet most of us have a much better knowledge of tax matters than has the average taxpayer. The introduction of this legislation gives point to the fact that we in Australia are sadly in need of a revision and simplification of the taxation law.
My second point relates to the harshness of the present proposals as affecting private companies. Under this bill, private companies will be placed in a much less favorable position than even public companies. Evidently this proposal is just one more formidable nail in the coffin of private enterprise. A private company in Australia, and, indeed, in any other country with the exception of those dominated by Communist regimes, is the cradle of free enterprise, free employment and the entire business life of the community. Nearly every great business concern, which employs large numbers of men and women, was at one stage a small private company. The Myer Emporium Limited, David Jones Limited, Ansett Airways Proprietary Limited and Australian National Airways Proprietary Limited began in a small way through, the initiative of one individual, then became a private company or partnership, and finally developed into a great business concern. If we are to have flourishing enterprises in Australia, industries must, at one period in the early stages of their development, be able to establish reserves in order to finance their expansion. With this bill, the Government declares as its policy that Australia shall not have any more thriving small companies. The Minister for Post-war Reconstruction (Mr. Dedman) expressed a similar view on another occasion when he said that the Labour Government did not want to create any more “ little capitalists “. The Prime Minister knows that if he puts a stopper on thriving “ little capitalists “, they cannot develop into larger capitalists.
What is the reason for the proposed alteration of the taxation law applicable to private companies? In war-time, we did not complain about heavy rates of tax. We considered that we were lucky to get away with our lives, let alone with our property intact. In the budget, the Prime Minister has made a pretence of reducing taxes. He has declared deliberately to the people of Australia that the Government is in favour of tax reductions. During the budget debate, members of the Opposition exposed that statement as utter nonsense. How can the Prime Minister claim to be reducing taxes when, obviously, expenditure by almost every department is rising ? The proposals in this bill show exactly where the Government stands. It intends to tax everybody up to the limit, and then to tax them some more. It proposes to apply that policy to private companies. This bill springs from an attitude, which is common to Ministers, that nothing is so reprehensible and so much to be discouraged as thrift, independence and success in business. That has been almost a precept of this Labour socialist Government, which has given effect to that policy on every possible occasion. As the Minister for Postwar Reconstruction has said, there i3 nothing to be discouraged so much as the “ little capitalists “, and so the Government has set out in this legislation, as it has other legislation, to destroy the classes whom it regards as little capitalists. I am not an authority on taxation, but it is obvious that, in Australia, our ability to pay taxes has almost reached saturation point. No one can accumulate wealth, or rise to a position of independence, or own his own business unless he is a rogue or a tax evader, or is connected in some way with the Labour Government. A new class is beginning to thrive in this country, and the proposals in this bill will simply add to the ranks of tax evaders and rogues. The new tax on private companies will add to the cost of conducting businesses, and lead to reduced efficiency. As small companies will ‘ not be able to operate on a profitable basis, amalgamations will result, and they will lead to the establishment of monopolies. The only people in this community who will be able to view these tax proposals with any feelings of satisfaction are, first, the socialists, who knew that the amendments will lead to the day when it will be so much easier for them to take control of industry, and, secondly, the tax agents, about whom a Minister has made certain remarks.
Those are the remarks which I desire to make in general terms about the proposals in the bill, but as the House is considering the subject of taxation, I wish to direct attention to a great injustice. The matter relates to the captain of an armed merchant vessel during the war. In 1942, the ship was captured by the Japanese, and members of the crew were interned and treated as prisoners of war. Some of the personnel, who were fortunate enough to belong to the Royal Australian Navy, were treated in regard to their tax obligations as service personnel serving outside Australia, but some of the officers, including the captain, were merchant seamen, and were not classed in that category for tax purposes. From the date of his capture in 1942 until he was released after the war, Captain Crease was treated as a prisoner of war. On his return to Australia, he was in such a serious state of health that he was sent to the Heidelberg Hospital, where he died from the effects of his treatment in captivity. I shall inform the House how the Taxation Branch has dealt with his widow. The tax assessment in respect of his income for the period up to the 30th June, 1946, when he was a prisoner of war, amounted to £756 4s. lid. His wife has received a demand for that amount, which included £17 14s. 6d. as a penalty for late payment. I know that the Commissioner of Taxation is not the ogre which some taxpayers think he is, but I hope that my recital of the circumstances of this case will stir the conscience of the Treasurer, and that the right honorable gentleman will ensure that the unfortunate widow shall not be deprived of the only money which her husband was able to save to support her.
– The debate has been most interesting in that the Government has laid down an effective smoke-screen. The Minister for Defence (Mr. Dedman) sought to cover up deficiencies in the taxation law as it applies to people individually by devoting 95 per cent, of his second-reading speech to the taxation of companies, which is the subject of only one part ,of the Income Tax Assessment Act. The debate has centred on that part because of the extraordinary injustices to private companies that are proposed by these amendments and because of the additional anomalies that these amendments will automatically bring into being. The concentration of the debate on one aspect of the bill is good business from the point of view of the Government.
– That is what the hill deals with.
– It deals with other matters, too.
– To a minor degree.
– The provisions relating to the taxation of private com- panies are only one aspect of the bill. The bill, indeed, opens up all channels of the Income Tax Assessment Act. It covers contributions from employees, double taxation and many other matters of supreme importance to the average taxpayer. So, I say that it is good business from the Government’s point of view to concentrate attention on the taxation of private companies. Because private com- panies have obtained unintended benefits from the provisions of the taxation law, I think all honorable members agree that the loop-holes should be closed. But deputation after deputation has waited on the Prime Minister (Mr. Chifley) in Canberra to point out that in closing the loopholes, which are quite obvious, he will penalize the great bulk of the private companies. Indeed, the right honorable gentleman admitted in this House last night that the bill was aimed at only 750 of the 20,000 private companies in Australia.
– He said exactly the opposite.
– He did not. He said that 750 of the companies had something to lose.
– That is right; that is the very thing he said.
– And that the remainder of the 20,000 had nothing to lose.
– And to get at the 750 companies the Government has introduced legislation that will penalize the bulk of the private companies. I have made those remarks as an introduction to the other matters, about which I propose to say something. The bill is essentially one for committee consideration, because it bristles with technicalities. In moving the second reading, the Minister for Defence said -
The bill is particularly technical in its nature, and in order that honorable members ma)7 better understand its provisions a memorandum explanatory of the ‘clauses is being prepared and will be delivered to honorable members.
An explanatory memorandum of 62 pages has been issued to explain a bill which consists of only eighteen printed pages and 23 clauses. So it is futile at this stage to make a detailed examination of it. The Leader of the Australian Country party (Mr. Fadden) covered a vast field in his second-reading speech and in a measure elucidated some of the bill’s technicalities. I firmly believe that the Australian taxation law has reached the stage of being confusing to even experts who have devoted a lifetime to its study. It is utterly incomprehensible to every one else. So it would be well for us to examine the extraordinary development of our taxation laws. It is symptomatic of the general trend of administration for the Executive to seek to confuse the average person by introducing technicalities that prevent him from following the reasoning of the law. Anomalies come to light from time to time. People are often overcharged by the tax assessors. They pay their overcharge because they can have no knowledge of how their taxes are assessed. Sometimes taxpayers fortuitously find that they have been overcharged and their representations gain refunds from the Government; but I wonder how many other taxpayers havepaid more than they were justly required to pay because of the impossibility of their knowing the intricacies of the taxation assessment system under which they are entirely dependent on the departmental assessment staff, the members of which the Prime Minister has said repeatedly in this House, are overworked and have not reached the standard at which he can rely on their interpretation of the Income Tax Assessment Act. To those factors he has attributed the delaying of assessments from year to year.
The first Commonwealth Income Tax Assessment Act received the Royal Assent on the 13th September, 1915. It provided the machinery for the assessment of income tax for the year 1915-16. It consisted of 65 sections and covered 21 pages. The current Income Tax Assessment Act consists of 266 sections and covers 209 pages. The number of sub-sections is legion. Now it is proposed that we should burden the act with further complexities and confusions. So complex is the legislation that it is utterly incomprehensible to taxpayers generally and confusing to taxation experts, private members of the Parliament and even to members of the Ministry. I defy any Minister other than one or two who have made a study of the income tax law to make an explicit statement about even the amendments proposed in the bill. The law is so baffling that the time is ripe for its simplification. There is no need for such complex legislation. The problem of simplification is gigantic. I therefore suggest that a special committee should be appointed to inquire into the taxation system and report back to the Parliament within twelve months in order that we may bring into being legislation simple enough for every one to understand. I do not propose to quibble about who shall constitute that committee. I know that there would be argument on that point. But the Commissioner of Taxation, Mr. McGovern, should be a member. He knows the difficulties associated with simplification of the taxation laws. I know that he will say that trade is so complex that it is impossible to deal out even-handed justice to all taxpayers. But it may be possible to deal out rough justice. It would also be necessary to appoint to the committee a representative of the tax agents. The committee would need the. services of an officer. of the Attorney-General’s Department to draft in legal, but simple, terms the decisions reached. I think, on the basis of the report of such a committee, the Government would be able to place before the Parliament a bill simplifying the income tax law so that it would be understandable to every citizen. In order to illustrate the complexities cf the present law, I desire to point out some of the provisions that clutter it up. The replacement of ‘the concessional allowances by tax rebates illustrates the difficulties that the tax assessors experience.
– That change was made by the Menzies Government.
– I do not deny that. I am illustrating the extraordinarily large amount of work that must be involved in the rebate system as opposed to the concessional allowances system. I make no bones about saying that the system of concessional allowances should be reverted to. We introduced the change in 1941, in the midst of war, because it was necessary to get revenue by whatever means it could be got for the purposes of the war. In the interests of sound economy it was necessary to prevent competition for materials and services, and we took the maximum amount of tax that we could take. Our imposition of the war-time company tax is a case in point. What I object to is the overflow into time of peace cf measures introduced to cope with time of war. The buoyancy of revenue presents the Government with the opportunity to revert to the simpler system. A rebate pre-suppose a concession, but the principle should be established that a taxpayer’s inescapable commitments should be allowed as a deduction from income for the purposes of assessing tax, not merely as a rebate. There can be no argument about that. As a company is allowed to deduct from its return of income its inescapable commitments, so an ordinary taxpayer should be allowed to deduct hi9 inescapable commitments. The system of rebates is not fair, as I propose to show. The statutory exemption, which was abolished in 1941, should be reintroduced. The statutory exemption should be adjustable so that, taken in conjunction with concessional allowances for a spouse and children, the basic wage’ shall not be taxable in the hands of the taxpayer with a family equal to that on which the basic wage is determined. That would have the effect of increasing real wages and reducing the cost of living. It would arrest the inflationary trend. That is plain common sense, which should appeal to the Minister for Defence. Here he has the opportunity to give effect to the great sympathy that he has in his palpitating heart for men on low wages. Increase of the value of real wages, reduction of the cost of living and arrest of the inflationary trend are, as honorable members are well aware, a part of the Government’s stock in trade.
Another matter calls for adjustment. The present maximum amount allowable as a rebate for dental expenditure is £10, and that for medical attention £50. These are inescapable obligations of the taxpayer. He does not know from day to day when he is likely to have to pay an extraordinary amount for medical attention. In effect, the Government says to him, “You can become sick, but we will allow you a rebate of £50 only, irrespective of what you pay for medical attention “. It is generally accepted that the care of the teeth is one of the important factors contributing to the health of the individual. Yet, in effect, the Government says to the taxpayer, “We will allow you £10 for dental expenses, but that is the limit; you are not allowed anything above that sum “. These inescapable commitments of the taxpayer should be allowable in full. Such a concession could vitally help government finances from the point of view of health commitments. That aspect should be taken in hand by the Government. Those are two ways in which taxation procedure could be simplified to bring assessments within the understanding of the individual taxpayer. I have no doubt that there are many others that every member of this House could outline, and which a committee such as has been suggested could consider in order to bring taxation into the realms of common sense and within the understanding of the man in the street. Not less than 95 per cent, of the Minister’s speech was devoted to an explanation of the proposed alteration in the methods of taxing companies. I shall comment on that aspect later. I am disappointed that the Government has not made an effort in this bill to provide for the modification of the hardships that are imposed upon the great bulk of the Australian people. In his budget speech, the Treasurer referred to the proposed concessions to the taxpayers. I shall say something about that matter, because it is necessary that we should try to get it into the right perspective. What are the so-called generous tax concessions to which the right honorable gentleman referred? They amount to £29,000,000 in a full year, but only to £22,300.000 in the present financial year. It is interesting to note that the day after the Treasurer introduced the budget in the House, the Treasury released figures which showed that in the months of July and August the Commonwealth collected £13,200,000 more than in the corresponding period of last year. At this rate, increases in revenue over last year’s receipts will he sufficient by the end of September to pay the whole of the tax concessions that have been granted by the Treasurer this year. In other words, looking only at the revenue side of the budget, the Treasurer will have recouped the whole of the taxation concessions for the whole of the financial year before these concessions even begin to operate. This is very important in view of statements that have been made by the Governmentrelative to these great concessions. Whilst the Government is going to relieve thetaxation burden upon the individual, it proposes to impose additional restrictions upon companies. Let us consider theconcessions applying to individuals, an d. see how they relate to last year’s excess of receipts over the Estimates. In 1947-48, the Treasurer expected to receive from income tax and social services contributions £143,000,000. The actual receipts from that source were £163,000,000, or an excess of £20,000,000 over the Estimates. In every case the Treasurer has been conservative in his estimate of collections of revenue. The so-called concession is no more or no less than a reimbursement to the taxpayer of the excess paid by him last year. For the year 1947-48, the Treasurer estimated that he would receive £53,000,000 as company tax. The actual receipts were £69,800,000, or £16,800,000 in excess of the amount stated in the Estimates. But what is he giving back in company tax? Precisely nothing! He will find that when the bulk of revenue from company taxation is computed at the close of this financial year, he will have increased considerably the amount that he has previously secured from company taxation. In the face of extreme buoyancy in this item of revenue, the Treasurer has seen fit, on his own estimates, to grant company tax concessions which will cost only £1,500,000 in this financial year. Yet he collected £16,800,000 in excess of estimates in the previous year ! It is interesting to note that result, because this Government has a happy knack of paying back to those from whom it collects taxes an amount almost equal to that which has been saved in previous years. It is also interesting to note that the payroll tax paid by companies returned to the Treasury £16,600,000, or £1,600,000 more than was estimated and that £1,600,000 or £1,500,000 is to be returned to them. Speaking in the 1946-47 budget debate, the Leader of the Opposition (Mr. Menzies) criticized the small reduction in direct taxation. He pointed out how the receipts from that source over the last few years had always exceeded the Estimates. As reported in Hansard, at page 376, volume 3S9, the right honorable gentleman said -
The Government has completely failed to appreciate the relation between the rates of direct tax and the volume of production. It has failed to understand that increased production activity means increased individual incomes and increased national income. From those tilings two results follow: The first is that there will be an increase of the volume of income, and therefore a good chance of an increase of the total tax yield even from reduced rates; and the second is that there will be an increase of the volume of capital and consumer goods for sale, and that is the greatest possible protection we can have against the inflation of which we have spoken so* much in this Parliament.
Let us consider the Treasurer’s Estimates throughout the years. In 1945-46, the excess collections in direct taxes amounted to over £3,500,000. The total collections of indirect and direct tax in that year amounted to over £16,000,000 in excess of the Estimates. In 1946-47, the excess collections of direct taxation amounted to nearly £6,000,000, whilst the total excess collections of direct and indirect tax was in excess of £25,300,000. In 1947-48, the collections of direct tax amounted to almost £38,000,000 in excess of the Estimates, and the total collections of indirect and direct taxes was more than £5S,300,000 in excess of the budget estimate. Although in every case the estimate has been on the conservative side, the taxation concessions and allowances have invariably been made on the Estimates, and so the Treasurer always has quite a good margin in reserve. He said that he has concentrated on a policy of providing the most relief to the lowerpaid wage and salary groups. Whilst that policy is to be commended as an initial step towards combating increasing living costs, the Treasurer has pursued this policy to a point where additional relief to the lower income classes provides neither real assistance to those classes of taxpayers to meet increased living costs, nor an incentive to higher production, which is the only means by which his living costs can be reduced. Honorable members will be interested in the following example: - Under the budget proposals, a taxpayer with a wife and one child, receiving £350 a year, will benefit by a taxation reduction of £3 a year. That is a very small concession. But the increase in the family budget, through the withdrawal of subsidies, will be £52 a year. These concessions that have been given to the lower groups of wage-earners are merely “ phoney “ concessions. Whilst there has been given a small concession, the withdrawal of subsidies is going to cost the individual considerably more than the value of the concession. The ‘relationship in the case I have cited is as £3 is to £52. The matter however, has been camouflaged by the Minister and honorable members have been prevented from geting to real grips with it. The Minister has diverted the attack on to a company level. Although the Leader of the Australian Country party (Mr. Fadden) dealt with that matter more effectively, it may be necessary for me to say just one or two things about that aspect. A point which appears to have escaped the notice of the Treasurer when he claimed that substantial reductions are proposed for the lower and middle income classes is that- due to basic wage increases, based on higher living costs, the taxpayers who were in the group with which a comparison has been made, are now in groups several steps higher. For instance, the Treasurer stated -
The “ C “ series index of retail prices in the June quarter this year, was 40 per cent, above the pre-war level.
This means that, without being any better off at all, a taxpayer who was earning £350 per annum before the war is now earning at least £490. Honorable members will readily notice that again there is a proposed increase in the basic wage, and therefore hi3 income in 1948-49 will be approximately £500. In this regard the Prime Minister took as a basis a man receiving £350 a year actual income, and showed that the proposed tax and contribution was much below the amount that was payable in 1938-39 under Commonwealth and State taxation laws. Therefore we have to accept that as the incidence of taxation as compared with the pre-war figure. We find that in 1938-39, a man who was in the £350 a year income group must now be considered as being in receipt of an income of £500 a year. Obviously he is in receipt of that income because the increase in the basic wage has brought it up to that figure. With the permission of the House, I incorporate the following table in Hansard : -
That indicates the “ phoney “ concessions that have been granted. A man who was earning £350 a year in 1938-39 will earn at least £500 in 1948-49. He will be compelled to pay more taxes because he is now in a higher income group, owing to the increase of the cost of living, but a salary of £500 a year now is of no more value than was a salary of £350 a year in 1938-39. Despite taxation concessions, since the war ended the amount of tax paid per head of population has steadily increased. With the consent of the House,
I incorporate the following table in Hansard: -
The total figures for each year represent increases of 163 per cent., 177 per cent., 200 per cent., and 207 per cent., respectively, on 1938-39, when the total taxation, Commonwealth and State, per capita of population was £18 Os. Id.
– The honorable gentleman has forgotten that we fought a war.
– The table shows that the taxes that will be payable in 1948-49 greatly exceed those that were payable in 1945-46. The further we proceed into the post-war era, the greater is the amount of taxes that is collected by the Government.
In his second-reading speech, the Minister for Post -war Reconstruction said that the bill was mainly concerned with the incidence of taxation on private companies and shareholders. The flood of protests against this bill from all sections of the’ community is surely evidence of its unjust provisions.
– I have received fewer telegrams with regard to this question than with regard to any other that has arisen for many years. Little additional revenue by that means has been received.
– I have already pointed out that in 1947-48 the Treasurer (Mr. Chifley) estimated that he would receive £53,000,000 from company tax and that the actual receipts were £69,800,000, or £16,800,000 in excess of the estimate.
– I was referring to revenue from telegrams.
– Although the PostmasterGeneral’s Department may benefit from these protests, it is doubtful whether any one else will do so. Experience proves conclusively that the Treasurer will not grant concessions to people who approach him upon these matters. I have been informed, and I believe it to be true, that a delegation informed the right honorable gentleman that, under the provisions of this bill, certain companies, the names of which were given, would pay a greater amount of taxes than they were paying previously.
– I said last night that 750 companies would not be in such a good position as they are in now.
– The Minister for Post-war Reconstruction said that I was entirely wrong in saying that the Govern ment was, by this legislation, penalizing’ 750 companies. I am pleased to know that the Treasurer admits that that is so.
– ‘The honorable gentleman can get nearer to being a liar than any other man that I know of.
– I regard that remark as offensive, and request that the Minister be asked to withdraw it.
– I withdraw the remark.
– Having regard to the Minister’s own record, I am glad that he has withdrawn the remark. It is no understatement to say that this legislation will cause great confusion in business and industrial circles, and that its adverse affect upon production will be great. If private enterprise cannot accumulate reserves for future expansion, the production of many commodities that are already in short supply will be retarded. That, however, does not cause the Government any concern. Something was said at one time about the Government’s desire to squeeze small business men, or “ little capitalists “, out of existence. Looking at the Minister I feel that there may be quite a lot in that suggestion. However, I do not wish to pursue that line of argument. This legislation must materially affect production. The tax burden will fall more heavily upon private companies and their shareholders than upon public companies, partnerships and sole traders. Why should the maximum rate of tax in relation to a private company be 15s. in the £1 when the maximum rate for a public company is 9s. in the £1 ? If the answer to that question is that further revenue is collected from the dividends that are distributed by public companies to their shareholders, whereas private companies need not distribute any part of their profits, surely some formula could be evolved to bring the rates in respect of both kinds of company into a closer relationship. If the committee for which the Leader of the Australian Country party has asked is appointed, it will seek to evolve a more equitable formula. Penalties will be imposed if the profits of private companies are applied to create reserves. There is great disparity between replacement costs and depreciation reserves. One object of the bill is to discourage the creation of reserves by private companies. Let us consider the case of a small transport company that is operating four trucks, the original cost of which was £500 each. The company is allowed, for taxation purposes, to depreciate the trucks only on the basis of their purchase price and not on the basis of the cost of replacement. Honorable members know that a truck that formerly cost £500 now costs £1,000. Therefore, the company’s reserve to be used for the replacement of the four trucks will be sufficient to buy only two. If it wishes to continue to operate with four trucks, it must draw upon its general reserve, but the Government is trying to prevent the creation of such reserves. How can a company replace its equipment when it is denied the right to create an adequate reserve? The same argument applies to stock-in-trade.
– What would a partnership do in those circumstances?
– A partnership is taxed upon an entirely different basis. Private companies would not argue if they were permitted to be taxed upon the same basis as partnerships. They are, however, to be penalized to a degree that was never dreamed of when the tax legislation relating to partnerships and sole traders came into operation. Another obnoxious feature of the provisions regarding private companies is that it is proposed that they shall be made to operate retrospectively to the 1st July. In these circumstances, it may well be that a private company, having declared a dividend, will find that .the dividend plus the tax that will be payable will exceed the total of its profits.
– Order ! The honorable gentleman has exhausted his time.
Sitting suspended from -5.^5 to -8 p.m.
– The purpose of the bill before the House is to amend the Income Tax Assessment Act 1936-1947. It consists of 23 clauses. The Income Tax Assessment Act consists of ‘266 sections and is a ‘consolidation of the original act, together with all the amendments made up to last year. I mention that because, at a later stage, I propose to refer to some matters mentioned by the honorable member for Reid (Mr. Lang).
While honorable members were within their rights in debating matters contained in the original act, I point out that, normally, in a debate of this kind, they would have confined their remarks to the amendments proposed in the bill actually before the House. The honorable member for Reid criticized the complex nature of taxation legislation in Australia, with particular reference to company taxation legislation. He suggested that we should take a leaf out of the book of the United States of America, and also pay heed to what is done in the United Kingdom. In no English-speaking country in the world is taxation .legislation simpler than it is in Australia. The :honorable member for Reid just opens his mouth and speaks without any regard whatsoever to whether what he says .is true or not. In the United States of America, the acts relating to taxation cpv.er hundreds of pages, and contain no fewer than 5,000 sections, as compared with 266 sections in the Commonwealth Income Tax Assessment Act. Taxation legislation in the United States has not been consolidated. I have been handed by the ‘Commissioner of Taxation a handbook which offers advice to taxpayers in the United States of America. One look at this publication should be enough to convince even the honorable member for Reid that income legislation in the United States of America is infinitely more complex than is our legislation in Australia. The same might be said of income tax .legislation in the United Kingdom. It is true, of course, that we should try to make taxation legislation as simple as possible, but if we are to meet all the varied circumstances of those upon -whom taxation is levied, it is impossible to frame’ legislation other than of a somewhat complex character. That has been made clear by various committees and boards which .have inquired into the -matter, and I quote, as ‘follows, from the report of the United Kingdom Income Tax Codification .Committee of 1936 .in order to emphasize what I say -
The drafting of any statutory measure is a task whose difficulty only those who have attempted it can appreciate. The intractable ambiguities of. our language and our syntax lay traps for the draftsman at every turn. To state the simplest rule in terms which are proof against misinterpretation requires the highest skill. The difficulty becomes immensely greater when it is necessary to legislate in general terms sp as to cover every conceivable case which may arise in a regulation of infinite diversity. This problem has always confronted the legislator.
Further on in the report, the committee states -
Income tax legislation must, by its very nature, be abstract and technical, and it can never be easy reading. It is concerned with principles and methods of calculation which it is difficult to express in words without any appearance of complication, as any one will realize who attempts to describe in writing even a simple mathematical process.
The Government keeps the situation continuously under review, and I assure honorable members that there is no unnecessary complication in the taxation measures put before the Parliament.
The honorable member for Reid also mentioned rebates, and compared them with deductions under income tax legislation. Both rebates and deductions are intended to give concessions to certain kinds of taxpayers. The Acting Leader of the Opposition (Mr. Harrison) also mentioned this matter, which has been debated on several occasions. It has been explained that the rebate system can be made to apply in exactly the same way as can any system of deductions. The rebate system was introduced in 1942, when uniform taxation was brought in, because of the complexities in the various State systems of taxation then being amalgamated into one system. The rebate system was not introduced for the purpose of decreasing the extent or the monetary value of concessions to taxpayers.
– If that is so, why not amend the system?
– Because a committee, upon which the Opposition was represented, inquired into the matter very closely, and recommended-
– Not with the consent of the Opposition.
– Of course, the honorable member for Barker (Mr. Archie Cameron) is an adept at repudiating his own party. The Opposition was represented on that committee, which recommended that, in all the circumstances, a rebate system was easier to operate than a system of deductions, and was just as fair to taxpayers. Any system of deductions has to be qualified, and one can easily understand why members of the Opposition would prefer to revert to a system of unqualified deductions. If, before assessing the taxable income, a deduction were made of the first £100 of earned income, it would be of much greater value to the wealthy taxpayer than to one On a low income. To the wealthy man, who pays tax at the rate of 15s. in the £1, the deduction would be worth £75, whereas, to the taxpayer on a low income, it would be worth only a few shillings.
The honorable member for Reid said that income tax forms and income tax legislation were much more complicated now than when the States levied their own income tax. That, of course, is obviously nonsense. If the people were asked in a referendum whether they wanted the existing system of uniform taxation, or whether they wished to revert to the system under which there were two taxing authorities, State, and Commonwealth, I am sure that a great majority, of both business people and wage-earners, would vote for the continuation of the present system. The honorable member for Reid condemned the action of the Treasury in holding, under the pay-as-you-earn system, money belonging to taxpayers. He said that the Commissioner of Taxation had no moral or legal right to hold the money. As to the legal position, it is obvious that if the law has been broken any person concerned may recover his money by legal process. However, it is nonsense to suggest that the law has been broken. As for the moral right of the Commissioner to hold moneys pending an adjustment, the honorable member knows that, under the law as it stands, the Commissioner has to collect instalments of tax from time to time, and there is nothing immoral in his holding this money until the final indebtedness of the taxpayer for the year can be determined. The individual amounts held are generally small, varying from 10s. to £1 or £2, and it is unavoidable that they should be held by the Treasurer until the indebtedness of the taxpayer can be accurately assessed.
The Acting Leader of the Opposition dealt with a number of matters which are normally discussed either in an income tax debate or a budget debate. One was the extent to which the Government has remitted taxation during the last few years. I do not propose to go into the matter now, because the budget presented by the Government this year had such a magnificent reception throughout the country that the Acting Leader of the Opposition was merely flogging a dead horse in trying to criticize it. I shall leave him to his flogging, because nothing he can say will change the opinion of the people. Some of his statements were quite erroneous. He mentioned the weight of taxation. That i3 a matter which touches, not the total amount which the Government receives in taxes, but the way in which taxation bears upon the individual taxpayer. It is evident to every one who has examined the figures - and the public generally is well aware of the position - that for the great majority of the people the weight of taxation has been reduced by 50 per cent, since the peak period of high taxation during the war.
I propose now to deal with certain matters raised by the Leader of the Australian Country party (Mr. Fadden). The Prime Minister (Mr. Chifley) replied so effectively to them last night that there is very little need for me to go into them deeply now, and I would not do so but for the fact that the Acting Leader of the Opposition attempted to distort in a disgraceful manner what the Prime Minister said last night.
– The Prime Minister agreed with what I said.
– He did no such thing.
– He did ; he nodded his head.
– I propose to repeat some of the remarks of the Prime Minister last night in order to make the position perfectly clear. Businesses in this country are conducted by sole traders, partnerships and private and public companies. There are in Australia, 550,000 sole traders, 70,000 partnerships, 20,000 private companies and 6,500 public companies. The sole purpose of the provisions of this legislation in relation to private companies is to ensure that these 20,000 private companies shall pay tax on a comparable scale with the 70,000 partnerships and the 550,000 sole traders. The purpose of this legislation and of the rates bill which accompanies it, is not to get more by way of taxation from companies, either public or private, and in fact it will not have that effect, but to ensure that the taxes that private companies pay are comparable with those paid by sole traders and partnerships. I was present when a deputation consisting of representatives of the chambers of commerce and the chambers of manufactures and the Institute of Chartered Accountants met the Prime Minister last week. The members of that deputation put their case very clearly and ably; but when inquiries were made about the basis on which they had been working, it was discovered that out of the 20,000 private companies throughout the Commonwealth, they had taken a sample of 92 private companies, and. that they had based all their conclusions on that very limited sample. Moreover, it became evident when they were asked certain questions that they had not even ascertained from those 92 private companies to what extent they would have to pay additional taxes, if any, under these new proposals by comparison with what they had paid under the existing legislation. I shall deal later with one or two aspects of this subject which were raised by the representatives of the Institute of Chartered Accountants at that meeting. In the meantime let the deal briefly with a matter which was so ably dealt with by the Prime Minister last night. Of the 20,000 private companies in Australia, 8,000 will not he affected at all by this legislation, because the whole of their incomes is paid to the individuals in the companies as personal exertion income - they have no undistributed profits at all–
– And no reserves?
– I do not know whether or not they have reserves.
– Where would their reserves come from?
– There is no point in the honorable member’s question. I have said that 8,000 of the 20,000 private companies will not be affected at all by this legislation. If they experience any difficulty in accumulating reserves under this amending legislation, they have had the same difficulty in the years gone by. A further 10,000 having taxable incomes of up to £10,000 a year and will either benefit or be able to benefit from this legislation. That accounts for 18,000 of the total of 20,000 private companies.
– Can the Minister explain how they benefit?
– If the honorable member will read this amending bill he will ascertain how they will benefit. I am here not to educate the honorable member, but to counteract the statements made by members of the Opposition. The Leader of the Australian Country party made some very alarmist statements. Indeed, so outrageous were these statements that if any reasonable person examined them outside this House he would have no compunction in characterizing them as completely false. The right honorable gentleman said that this measure rings the death-knell of 20,000 private companies. I have just proved that 18,000 of them will not be affected detrimentally by this legislation.
Opposition members interjecting,
– Order ! There is too much interruption, and it is organized interruption. I insist upon the Minister being heard in silence. If any honorable member offends again he will be dealt with.
– Of the total of 20,000 private companies in Australia I have just accounted for 18,000 which will not in any way be adversely affected by this legislation. That disposes of the statement made by the Leader of the Australian Country party that this measure rings the death-knell of 20,000 private companies. Of the remainder there are approximately 3,250 companies whose incomes vary between £10,000 and £20,000 a year. On the general average, these companies will not be appreciably affected by the new proposals. That leaves only 750 companies which will be disadvantageously affected by this legislation. What are the types of companies included in that number? The honorable member for Deakin (Mr. Hutchinson) charged the Prime Minister with having obtained in an improper way some information about a particular company to which the right honorable gentleman had referred. Let me make it clear that neither the Prime Minister nor I - or for that matter anybody else - obtains information from the Commissioner of Taxation to which we are not entitled. The Prime Minister did not receive any information from the Commissioner of Taxation with regard to the company. Every one of us has some experience of these companies and in one way and another we learn a little about them. A great deal is to be learned from the annual reports furnished by the Commissioner of Taxation. From page 48 of the report for 1946-1947 and for the report for 1947-48 one can gather the information that there are in Australia five resident private companies with a taxable income of between £200,000 and £500,000 a year, that the tax assessed on those companies amounted to £381,000, and that their total taxable income amounted to £1,319,000. Under the existing legislation a private company cannot be controlled by the more than seven persons, and these figures relate to the existing legislation. That means that each of these five private companies has an average taxable income of approximately £300,000 a year. As I have said, every one of us has some information about some private company or another. I know from information obtained by me, not from the Commissioner of Taxation, but from other sources, that at least one of these companies consists of two individuals only. Thus, there is in Australia a private company, the control of which is exercised by, and the profits from which go to, two individuals only. These profits are in the region of £300,000 a year. I have said that the purpose of this legislation is to ensure that all private companies pay tax on a scale comparable with that paid by sole traders and partnerships. If this private company which I have instanced were operating as a sole trader or as a partnership it would pay in tax £67,500 more each year than it now pays. That is the anomaly that exists between taxes levied upon and obtained from private companies and taxes collected from comparable sole traders or partnerships. The real purpose of this legislation is to rectify that anomaly. It is not an easy matter to rectify the anomaly; but I think every individual in the community, even members of the Opposition, realize that it is necessary that there should be some amendment of our taxation laws to ensure that a private company of the kind 1 have instanced shall pay the same, or nearly the same, amount of tax as would be paid by a sole trader or a partnership in comparable financial circumstances. In presenting their case to the Prime Minister the Institute of Chartered Accountants endeavoured to get the right honorable gentleman to agree with the proposition that to impose taxes on private companies by way of a tax on undistributed profits in addition to the primary tax was in effect double taxation. That myth was exploded long ago in every Englishspeaking country in the world. The Leader of the Australian Country party also referred to double taxation. There is no such thing as double taxation of the earnings of private or public companies. I shall read an extract from the report of a case dealt with in the United Kingdom in order to prove that point. In the case, Commissioners of Inland Revenue v. Blott, reported in 8 Tax Cases at page 101, Viscount Cave said -
Plainly, a company paying income tax on its profits does not pay it as agent for its shareholders. It pays as a taxpayer … No agency, appropriately so called, is involved.
In other words, a company, whether it is a private company or a public company, is a legal entity, and, as such, is subject to taxation quite separately from the various shareholders in the enterprise. That is not the case with a partnership or a sole trader. A partnership is not a legal entity and, therefore, is not subject to taxation separately. The imposition of a primary tax om public and private companies is not a reason why the shareholders in a company should not pay tax appropriate to their incomes on whatever dividends they derive from the company after it has met its own legal tax obligations. Therefore, the question of double taxation does not arise.
There is no analogy between a public company and a private company. The public owns a substantial proportion of the shares in a public company. The shares in a private company are held by a few individuals. In fact, a private company is comparable with a partnership in that it consists of few individuals; but the difference is that - it is a legal entity and has the advantages of incorporation, whilst the liability of its shareholders is limited. There is no reason why a private company should not pay tax on comparably the same scale as a partnership. As the law stands, it is possible for a private company, by adopting various methods, to avoid its tax obligations. Some of those methods were described in the book which the Prime Minister and the honorable member for Richmond (Mr. Anthony) have mentioned in this debate. The author adopted the apt nom-de-plume of E. Kelly. The purpose of this legislation is to ensure that a private company shall no longer be able to avoid paying tax on a comparable scale with a partnership. A public company is a company in which the public are substantially interested. The shares are held widely by the public generally. The great difference between a public company and a private company is that, whereas it is often to the advantage of the shareholders in a private company not to distribute the profits, because, by so doing, they avoid taxation to some degree, there is no inducement or incentive for a public company not to distribute its profits. Consequently, the act should ensure that the shareholders in private companies do not avoid their tax obligations by putting large amounts away as undistributed profits.
A case can be submitted that private companies require reserves for the expansion of their business, and that if they are made to pay tax on a comparable scale with partnerships, they will not have the necessary reserves to meet depreciation on their assets and expand their business. If that case can be made out for private companies, it can be made out equally well for sole traders and partnerships. The Institute of Chartered Accountants contended that 33$ per cent, of the income of private companies should be free from the undistributed profits tax in order to enable the companies to build up their reserves. If that proposal were adopted, it would give to private companies a tremendous advantage over partnerships and individual traders. That was the law until 1941. The concession was withdrawn by the government in which the Leader of the Australian Country party was Treasurer. All those persons who have inquired into the matter, including Mr. Justice Ferguson and Mr. E. V. Nixon, a Melbourne accountant, have made it clear that this, in fact, was a privilege which should never have been granted to private companies. The Leader of the Australian Country party, for once, did the right thing when he withdrew that concession in 1941.
– I must have been wrong.
– Whether the withdrawal of the concession was right oi wrong, the right honorable gentleman was responsible for it, and I am glad that he took that action. The right honorable gentleman is now supporting the case which the Institute of Chartered Accountants has put forward for the reintroduction of that concession to private companies. That privilege would place private companies in a far better position than either a partnership or an individual trader, and, for that reason, I believe that it would be entirely wrong to reintroduce it.
The Leader of the Australian Country party talked a lot of nonsense- about the inability of companies to replace machinery which had been depreciated during the period of the war. The Prime Minister dealt most ably with that submission last night. He showed clearly that companies are allowed depreciation. If a machine has a life of ten years, a company may set 10 per cent, aside in the reserve fund for depreciation. At the end of the ten-year period, the company will have sufficient money in the fund for the purchase of a new machine, provided that it can be bought at the same price as the original one. Honorable members opposite have pointed out that the price of machinery has risen by 100 per cent. and. therefore, a company will have to pay for a new machine twice as much as it paid for the original machine. The Prime Minister pointed out that as a result of a concession which this Go vernment has introduced, a company is allowed a special deduction equal to 20 per cent, of the cost of the plant in the year in which it is acquired, in addition to the normal deduction of 10 per cent, for depreciation in the same year, making a total of 30 per cent. Suppose a machine originally cost £100. The company could have a reserve fund of £100 for the purchase of a replacement. As soon as the new machine is purchased, the company is permitted the special concession of 20 per cent, and 10 per cent, for depreciation. Consequently, there is no necessity for unduly large reserves to be established with undistributed profits for the purpose of replacing machinery which has depreciated.
– When will the provisions of the bill come into operation?
– Certain provisions will come into operation immediately, and others will come into operation at the end of this year.
I now desire to deal with several matters which the Institute of Chartered Accountants has raised. The institute submitted its case in a most able manner. As I have already informed the House, the institute based its case on a sample of 92 private companies out of 20,000 private companies throughout the Commonwealth. Even with those companies as a sample, the representatives of the institute were not in a position to say whether the 92 companies would pay more tax under this legislation than they have paid in the past. They desired to make the point that an undistributed profits tax was, in fact, double taxation. The Government was not able to accept that argument.. So far as I am aware, that contention is not accepted in the United Kingdom, the United States of America or any other English-speaking country. The Institute of Chartered Accountants submitted a plan which purported to place the liability of a private company and its shareholders on a basis somewhat comparable with the liability of partners in a partnership. However, an analysis of -the plan disclosed that in the higher ranges of income, the tax liability of a private company and its shareholders would have been less than the liabilities of partners in a comparable partnership. It should be an essential feature of any acceptable plan of private company taxation that the incorporation of a private company should not result in the payment of less tax than that paid by partners in a comparable partnership. The plan which the Institute of Chartered Accountants submitted did not fulfil that essential, and, therefore, was not acceptable to the Government.
The Institute of Chartered Accountants also made a submission regarding the effect that its plan would have on the capacity of private companies to build up reserves. T have nl ready dealt with that subject. I cannot see any valid reason why private companies should be treated any better than individual traders or partnerships in relation to reserves for depreciation, and for Other purposes, such as the expansion of their business. The proposal, which the institute submitted was that private companies should be taxed at high rates, and that sham holders should be allowed rebates and, where necessary, refunds on account of the taxes so paid by the companies. T’ net effect apparent from those proposals was that the shareholders in the companies would obtain greater net returns than they had received under the present law, but the capacity of companies to retain funds for the purposes of development and stabilization would be correspondingly reduced. The plan was examined closely by the Commissioner of Taxation and experts of the Government. For the reasons which I have indicated, the Government could not accept it. I desire to make it clear that the Leader of the Australian Country party, however efficient he may be as an accountant, the Institute of Chartered Accountants and honorable members generally are not in a. position to judge the effects of this legislation. The only persons who are in a position to judge the effects are the Commissioner of Taxation and his officers. They are sworn to secrecy, but they know all the details of the 20,000 private companies throughout the Commonwealth.
– That is an extraordinary statement.
– It is not an extraordinary statement. It is perfectly true.
That was proved by what transpired at our meeting with the Institute of Chartered Accountants. The representatives of the institute put forward certain proposals and outlined their views of the effect of the proposed legislation. Knowing the details of all the 20,000 private companies in Australia, which neither the Prime Minister nor I know, the Commissioner of Taxation was able to express certain views. Those were the views stated last night by the Prime Minister, which I have just repeated. We have pointed out that S,000 of the private companies are, in fact, not adversely affected by this legislation because their incomes are expended in salaries to the proprietors; that another 10,000 will benefit; that another 1,250 will not be detrimentally affected ; and that only the balance of 750 out of the 20,000 private companies will be adversely affected. [Extension of time granted.]
– May I ask the Minister a question on that?
– The Acting Leader of the Opposition said that the bill was mainly one for consideration at the committee stage. If the honorable members asks in committee the question he desires to ask now, I will deal with it then. I was saying that the only person who can assess the effect of this legislation on private companies generally is the Commissioner of Taxation and, perhaps, some of his officers, all of whom are sworn to secrecy. The Commissioner of Taxation, who alone is in a position to know, has said quite clearly that the legislation would not affect detrimentally any but 750 of the 20,000 private companies in Australia, and that these 750 private companies were wealthy companies, some of them with less than seven shareholders, and many of which were, of course, controlled by one or two persons with a taxable income of more than £20,000 a year. Because of that, I feel that the Leader of the Australian Country party (Mr. Fadden) has spoken either in complete ignorance of the facts or in an endeavour to stampede the shareholders in private companies generally, including small private companies, into believing that the legislation will be greatly to their disadvantage. That is not so. Of the 20,000 private companies, 10,000 will benefit or be in a position to benefit from the legislation. All that the legislation does is to bring the taxation commitments of private companies generally into line with the taxation commitments of individual traders and partnerships, and, for that reason,I should imagine that it should commend itself not only to honorable members of the Opposition, if they understand what the legislation is endeavouring to do, but also to the great majority of the 20,000 private companies in Australia.
Question put -
That the words proposed to be left out (Mr.
Fadden’s amendment) stand part of the question.
The House divided. (Mr. Deputy Speaker - Mr. J. J. Clark.,)
Majority . . . . 12
Question so resolved in the affirmative.
Original questionresolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Clause 2 -
Section six of the Principal Act is amended by omitting from sub-section (1.) the definition of “ relative “ and inserting in its stead thefollowing definition: - “‘relative’, in relationtoany person, means anyofthe following, namely: - (a.) the , parent, ; grandparent, brother, sister, uncle, aunt, nephew, niece, ‘lineal descendant or adopted child of that person orofhisor her spouse.;
Mr.FADDEN(Darling Downs -
Leader of the Australian Country party) [8.53]. - I move-
That paragraph(a) of the definitionof “ relative’” be left out,with aview to insert in lieu thereofthe following paragraph: - “(a) the parent, spouse, child or adopted child of a shareholder; and”.
The definition of “ relative “ is important in its application to Division7 of the principal act and to section 65, which relates to payments to relatives. The proposed amendment considerably extends the present definition, particularly in regard to “ in-law “ connexions. There is no apparent need for such a wide scope, or, in fact, for any change from the existing law. It is suggested that, for the purposes of Division 7, a relative be defined to include” a spouse, parent, child or adopted child of a shareholder “. The definition of “nominee” adequately covers other family connexions where such persons act in concert with the shareholder.
– TheGovernmentcannot accept the amendment. It went very carefully into the definitions and it proposes to stand hy the definition contained in the hill.
Clause agreed to. “Clause 3 agreed to. ‘Clause 4 (Exemptions.) 3Ir. BEALE (Parramatta) [8.56].- Clause 4 proposes to extend the exemptions from income tax contained in section 23 of the principal act to the salary or emoluments of a resident of Australia who is employed under the terms of an international convention or other international agreement by which Australia is bound. We have already established the principle of exempting from income tax persons out of Australia who derive income from international organizations. We propose now to extend that provision t9 persons within Australia. The committee ought to have another look at the clause before agreeing to it. I think members of the committee are entitled to know how many people are involved. We know that there rare employed by the United Nations and other international organizations at Lake Success and other places Australians who are apparently serving or purporting to serve Australia. Rumour tells us that some of them are paid handsome emoluments. It is proposed to extend to such persons working in Australia the benefit of exemption from income tax. That is a departure from the clearly established principle that everybody who works in Australia shall pay tax on his earnings. I am opposed to the proposal that persons merely because they work for some international organization in Australia shall be exempt from tax. We shall soon reach the stage at which it will be much cheaper to work for an international organization in Australia on a comparatively low wage than to work otherwise in Australia on a much higher salary because of the complete exemption from income tax to which people in the first category will be entitled. The proposal seems altogether too generous. It is a departure from the principle always hitherto included in tax legislation that if one works in Australia one pays tax here.
I also direct my attention to another matter affecting exemptions. Honorable members will remember that in 1947 I raised the matter of exempting from income tax the income from scholarships. During the debate an indication was given by the Prime Minister (Mr. Chifley) that without agreeing to accept the amendment that I had tabled he would go into the matter and do what he could about it. As the right honorable gentleman has just entered the chamber, it may be of interest to him to listen to my remarks. I was saying something about the exemption of income from scholarships from tax. I appreciate that since I moved the amendment last year, when the Prime Minister indicated what he would do, arrangements have been made with the authorities whereby scholarship holders at Sydney University and the Council for .Scientific and Industrial Research have no longer to pay income tax of their scholarship moneys and that holders of Nuffield, Rockefeller, Carnegie and Rhodes scholarships do not pay tax on their scholarship moneys either, because the Treasury cannot get its hands on that money, as it is paid to the scholars abroad and not in Australia. I acknowledge that relief with thanks.
– The honorable member should be grateful for that relief.
– For those mercies, we are grateful. But I seek another mercy in consequence of a letter that has been written to me by a young man who had been living in Tasmania, but who has gone to the United States of America to study at the Columbia University, on a scholarship granted by the Education Department of Tasmania. In principle, this young man’s case falls precisely within the limits within which exemption has been granted. He wrote to me a few months ago saying that he had been informed by the State taxing authority in Hobart, acting for the Commonwealth, that he must pay tax on the income from his scholarship. He had read in the press a report of a debate in this House, and sought an interview with me. I was not available at the time, and he was interviewed by a very distinguished leader of my profession, Mr. David Maughan, whom the
Prime Minister knows about, and was advised - as I should have advised him - that he was not liable to pay the tax. I understand that his liability or nonliability is still in dispute. I ask the Prime Minister to have the case looked into, with a view to granting relief to this young man. That would not quite end the matter, because, in addition to the relief given in other instances, for which I have expressed appreciation, there is a number of other scholarships issuable from the church institution and some of the larger private schools in Australia. I ask the Prime Minister to establish uniformity where apparently it does not now exist. Since the right honorable gentleman has been generous in some instances-
– The honorable member’s present request embraces a much wider field than he has mentioned.
– No. All that I know is that relief has been granted in connexion with scholarships from the Universities, the Council for Scientific and Industrial Research, the Nuffield organization, and other bodies. I ask for relief ako in connexion with scholarships from the Department of Education of Tasmania and other schools and institutions. There are not very many of them. I do not suppose there are more than a dozen in Australia; there are only half a dozen within my knowledge. The Prime Minister would not only achieve a degree of uniformity but would also help the cause of education generally if he extended his exemption a little further.
– If the bill goes through in its present form, all persons employed in Sydney, in which is the head-quarters of the South-west Pacific Commission, an international organization functioning in Australia, will be exempt from income tax, because the measure provides that in Australia the exemption shall apply to a resident who, under the terms of an internationalconvention or other international agreement by which Australia is bound, is to be exempt from income tax on his salary or emoluments derived from that organization. I ask whether the Treasurer has considered this aspect of the matter. It would be wise in that point were cleared up, so that everyone would be able to understand it.
– There is nothing in the act covering that matter. It would have to be dealt with separately.
– The members of the commission that the honorable member for Barker has mentioned are working under an international agreement.
– Only Unrra and the United Nations are covered.
.- I am rather disquieted by the provision that the Commissioner of Taxation, the Second Commissioner or any person authorized by him is prohibited from communicating any information.
– Order ! The committee is now considering clause 4.
– Then I desire that clause 3 be recommitted.
– The honorable member may submit a motion to that effect only after the bill has been reported to the House.
– I should like to know whether members of the Red Cross, the Young Men’s Christian Association and other similar organizations, who were prisoners of war, are to come within the exemption provided for by the clause. There has been correspondence for years in regard to them. If this is to be the law, it should be made to operate retrospectively.
– I have been very generous in this matter.
– Few will agree with that statement. There are Australians serving with refugee organizations who find themselves at a disadvantage when associated with British nationals and others. They have had to pay incometax and have feared that they would haveto give up their appointments. I appreciate all that is being done by thebill, but I submit that the Prime Minister, in addition to supporting the requests of the honorable member for Paramatta,, should consider people such as thosewhom I have mentioned. The honorablemember for Henty (Mr. Gullett) mentioned to-day the case of a deceased. master of a vessel who had shared captivity with a number of troops, and from whose estate deductions for income tax were subsequently made. I hope that it is not too late for this matter to receive further consideration.
Clause agreed to.
Clause 5 agreed to.
Clause 6 -
Section forty-six of the Principal Act is repealed and the following section inserted in its stead: - “46. - (1.) Subject to this section, a shareholder, being a company which is a resident, shall be entitled to a rebate in its assessment of the amount obtained by applying to that part of the dividends included in its taxable income the average rate of tax payable by the company”.
Amendment (by Mr. Dedman) agreed to -
That the words “ repealed and the following section inserted in its stead “ be left out, with a view to insert in lieu thereof the following words: - “amended by omitting sub-sections (1.) and (2.) and inserting in their stead the following sub-sections “.
– I move -
That, in proposed new section 46, subsection (1.), the words “the company” bo left out, with a view to insert in lieu thereof the word “it”.
The drafting is somewhat innocuous in view of what I interpret to be the intention. Do the words “ the company “ mean the company receiving the dividend, in which case the application of a rebate at the rate of tax payable by it would be involved, or do they mean the company paying the dividend? If the latter is meant, the use of the word “ it “ instead of the words “the company” would make the position clearer.
Clause, as amended, agreed to.
Clause 7 agreed to.
Section seventy-eight of the Principal Act is amended - (a.) by omitting from sub-paragraph (ix) of paragraph (a) of sub-section (1.) the word “and”;
Section proposed to he amended -
– (1.) The following shall, subject to this section, be allowable deductions: -
.- I move-
That, in section 78, sub-section (1.), paragraph ( (a) of the Principal Act, after proposed sub-paragraph (xi.), the following sub-paragraph be inserted: - “ (xii.) any church for the purposes of mission work in a State or Territory of the Commonwealth;”.
A Lutheran church approached me first in connexion with this matter, but I have talked with representatives of other churches about it since then. Practically every denomination of any size in Australia is maintaining missions in the outlying part of the States or territories of the Commonwealth. Under the proposal that I am making, contributions to mission work in Papua, New Guinea, and the islands under Commonwealth control, would be allowable deductions. This mission work is carried out largely by voluntary subscriptions of the people of different denominations. The Government gets a very definite benefit out of what is being done by the missions. If that work was not done by the churches it would have to be done by the State. The Hermannsburg mission in the Northern Territory to the south-west of Alice Springs, is carried on by the Lutherans, and the Ernabella mission is run by the Presbyterian Church. Other missions are conducted by the Anglicans and Methodists in various parts of the islands, and there are Lutheran and Catholic missions in some of the States. In South Australia, there is the Koonibba mission, which is run by the Lutherans, and there are Catholic missions at Beagle Bay. The Anglicans also, are represented there. As I understand the application of the law, as I believe it to be understood by people who make contributions, and as it is interpreted by the Taxation Branch to-day, so far as my information goes, no donation to a church is rebatable.
I think that it ought to he subject to rebate. I am not suggesting this as of universal application, although it was laid down in biblical times that the Apostles should go out and teach, all nations. All I am saying at the moment is that the exemption ought to be allowed in relation to those apostles who go out and teach the natives of the States and territories of the Commonwealth. We should be following along the way of the New Testament. The matter ought to be cleared up. I have had a private hint that there is some method under which this exemption can be granted. If that is so, it should be publicly stated. If it is not so, the Income Tax Assessment Act should be amended to provide that these people shall be entitled to the rebate. That explains my motive in moving the amendment.
– I cannot accept the amendment moved by the honorable member for Barker (Mt. Archie Cameron). I have not seen a copy of it, and in any case he cannot expect me to agree to such a request at a moment’s notice.
– The Minister should know that I would not put anything over him.
– These missions have been in existence for many years, but the honorable member for Barker did not do anything about them when he was a member of the Government. The honorable member had an opportunity then to rectify the matter. Gifts to missions for particular purposes come within the scope of the act. If a mission has a benevolent fund which is used for charitable purposes, contributions to that fund would come within the scope of section 78 of the act. If a church has a fund that is used for benevolent or charitable purposes, then, in my opinion, section 78 of the act applies to that fund also.
.- I support the amendment of the honorable member for Barker (Mr. Archie Cameron). I propose at a later stage to move a similar amendment relating to ex-servicemen’s memorial halls.
Subscriptions to funds for this purposeare not treated as allowable deductions at present. The branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia to which I belong made an appeal for funds to build a memorial hall. A sum of money was collected, and income tax was paid upon the whole of it. I suggest that such contributions should he treated as allowable deductions. The only rendezvous for many ex-servicemen is the meeting of the local branch of the Returned Sailors,. Soldiers and Airmen’s Imperial League of Australia, but many branches have no meeting place of their own. Had it not been for the kindness of the municipal authorities of Caulfield in allowing exservicemen to use the town hall free of charge for a long time, the members of the Caulfield branch would have had no place in which to meet. If contributions to the building fund had been allowable deductions, a larger sum would have been collected in a shorter period of time. What has happened in regard to the Caulfield Central branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia has happened in hundreds of other cases. I understood that if some one causes an obelisk to be erected in a zoo and claims that it is a memorial, because it is situated in a place to which the public has access, the cost of the obelisk is an allowable reduction. That is a stupid discrimination. The effect of the ruling that has been given is that, because an ex-servicemen’s memorial hall is not a place in which every one can congregate, donations to a fund for building it should not be exempt from income tax. The Prime Minister (Mr. Chifley) unveiled what is said to be a war memorial in Taronga Zoological Park. The money for its erection, which was donated by a wealthy Sydney man, was treated as an allowable deduction. It is time that funds for ex-servicemen’s memorial halls were treated in the same way.
The Minister for Post-war Reconstruction (Mr. Dedman) is an ex-serviceman, and he knows the value of these halls. There is a very fine one in Geelong. The money with which it was built was raised after the end of World War I., and I think it would be safe to say that a similar attempt now would not be successful. It is only the older branches that have been successful in erecting buildings. Many of the newer ones would welcome the granting of the concession to which I have referred. It would not mean much to the Government, but it would enable many ex-servicemen’s organizations to get on their feet. If the Minister says that the amendment that I have outlined is one that cannot be accepted, which is the wont of this Government, it will be useless to debate the matter further. If, on the other hand, the honorable gentleman says that he will consider it or take it to Cabinet, I shall move it formally at a later stage.
– The Minister for Post-war Reconstruction (Mr. Dedman) said, if I understood him correctly, that donations to funds of churches or other organizations to be used for charitable purposes are regarded as allowable deductions. Mission work is charitable work, and funds collected by churches for mission work are specifically set aside for the purpose. In addition to being of a charitable nature, the work of the missions relieves the Government, in many instances, of a responsibility which is rightly its own. The churches are doing an excellent work among the Australian aborigines. They are educating them and teaching them to be selfreliant, but the Government provides no financial assistance. It will not even agree that gifts of money for such work are allowable deductions. These remarks apply not only to work among the aborigines in Australia but also to work in the Islands. I know that churches of all denominations, when taking up their collections, make a special appeal for contributions to funds for that kind of work.
– That is already dealt with in the act.
– Then why does the Taxation Branch refuse to allow the claims of taxpayers who have subscribed to funds of this kind? I know of my own knowledge that it has ruled that donations for mission work are not allowable deductions. The Minister should say definitely whether donations for mission work, which is charitable work, are allowable deductions.
– I did not say that all funds contributed for mission work were treated as allowable deductions. I said that if a fund was established for the purpose of relieving distress among the Australian aborigines or any other groups of people among whom missions do their work, contributions to that fund would be allowable deductions. That point is already covered in the act. Section 78 1 a iii refers to “ a public fund established . . . for the relief of persons in Australia who are in necessitous circumstances.” If a fund is specifically established by a church or mission for the relief of such persons, subscriptions to it are allowable deductions. Donations to funds established for general purposes, such as preaching the Gospel, are not allowable deductions.
– The Minister for Post-war Reconstruction (Mr. Dedman) has said, in effect, that if persons are suffering from distress, donations to a fund designed to relieve that distress are allowable deductions. Surely it must go further than that. Distress in the islands and the territories of the Commonwealth cannot be relieved unless missions are established in those places. The funds that are necessary to establish the missions must surely be regarded as essential to the relief of such distress. If the Minister will agree that donations to funds for the establishment of a mission can be so regarded, he will go a long way towards satisfying honorable members on this side of the chamber. I feel, however, that the honorable gentleman will not give an assurance of that kind. He is relying almost entirely upon the charitable nature of the fund. I put it to him that the amendment visualizes something far wider than that.
– In that event, I cannot accept the amendment.
– Unless missions are established, and if, by their preaching of the Gospel, missions cannot teach the natives to be good citizens, it is the duty of the Government so to teach them. As far as the Government is concerned, the instruction is being given “ on the cheap “ at the present time. Surely it should show some gratitude at being relieved of that obligation. If the Government will only allow deductions in respect of a charitable fund, it will prove that once again it is seeking to have its obligations discharged by private organizations which consider it necessary to do this kind of work.
.- I am disturbed to think that the bill has not covered this point. It is proposed that section 78 of the principal act should be amended by the insertion of a paragraph which states that the definition in relation to Australia should be deemed to include the territory of New Guinea. That will widen the scope of section 78 1 a iii, to which the Minister referred. If the Government does not accept the amendment of the honorable member for Barker, I for one shall do my best to see that a similar amendment is moved next year, when this matter again comes before the Parliament. There is a great deal to be said in favour of the remarks that have been made by honorable members opposite on this point. The church to which I belong receives subscriptions amounting to £60,000 a year from all parts of the Commonwealth for overseas mission work. There is no doubt that the missions and the churches relieve the Government of a great deal of expenditure. By contributing to the rehabilitation of the souls, minds and bodies of the natives of the territories of the Commonwealth, they are doing something that would otherwise have to be done by the Government if the people of those territories are to be prevented from reverting to barbarism. I should like the Minister to explain the position, and to give an assurance that, if the concession cannot be granted this year, it will be granted next year.
– I am not prepared to allow the Minister for Post-war Reconstruction (Mr. Dedman) to chide me about what was not done when I was a Minister of the Crown. In those days, any variation of tax rate meant very little in pounds, shillings and pence to the individual taxpayer. For purposes of Commonwealth income, tax, there was an exemption of £600 before the taxpayer was regarded as having any taxable income at all, and then the rate began at 3d. in the £1. Of course, there was State income tax, but that was another matter. However, even if there were faults in the system when the present Opposition parties were in power, there is no reason why those faults should be allowed to remain under a Government which claims that it is superior to any other government that ever existed. The time is ripe for an alteration. The people of Australia have groaned under heavy taxation during all the time that the Labour Government has been in office. It is no answer to say that uniform taxation was recommended by a committee upon which there was a representative of the Opposition. That representative did not sit on the committee with the consent of the Opposition parties. He acted on his own initiative, and his action was a piece of treachery.
The DEPUTY CHAIRMAN (Mr. Burke). - The committee is not now considering uniform taxation.
– The subject’ was raised by the Minister, but I shall not go into it further now because I do not wish to embarass him unduly. The Minister said that a rebate, could be claimed on donations to a church for benevolent purposes, but that no rebate would be allowed in respect of donations for the propagation of the Gospel. The Minister nods his head in assent. In the opinion of Christian persons, the fact that citizens of Australia are still living as heathens constitutes the greatest distress to which they could be subjected. If I am wrong in making that statement, let any honorable member opposite say so. There is a moral obligation upon the Government to assist religious denominations to bring the Gospel to the natives, and it should be willing to allow a rebate on gifts for the propagation of the Gospel, as well as on gifts for the relief of distress. Last Sunday, I heard a missionary state that it was necessary for him to collect £20,000 for the support of his mission in New Guinea. He was a member of the Sacred Heart Order, which conducts a mission in that country, and it has to get £20,000 in subscriptions every year from the public in Australia, The work of the missions - and I refer to missions conducted by all denominations - is concerned, not only with the propagation of the Gospel, but also with the education of the natives, something which is the responsibility of this Government. How many schools would there be in the more remote districts of New Guinea but for the missionaries ? Even on the mainland, aborigines in the interior have to look to the missinonaries for education and medical care as is evident when we consider the work done at the mission stations at Hermannsburg, Ernnabella, Beagle Bay and Kooniba. In New Guinea and in Central Australia, the churches are engaged upon work which is really the moral and legal responsibility of this Government. People who, out of the kindness of their hearts, are prepared to contribute towards the cost of this work, which the Government is not able or willing to do, should be allowed a rebate in respect of their contributions. I leave the matter at that.
.- The case made out by the honorable member for Barker (Mr. Archie Cameron) is absolutely unassailable. The ideas of the Minister for Post-war Reconstruction (Mr. Dedman) on this subject are out of date. They are probably based on the old hymn, of which the following is part of one verse : -
From Greenland’s icy mountains.
From India’s coral strands;
Where Afric’s sunny fountains,
Roll down their golden sands.
I refer specially to the lines -
Where every prospect pleases,
And only man is vile.
That conception of missionary work is 50 years out of date. I know something of mission work, and there is no mission in Australia or New Guinea which, beside teaching the Gospel, does not also bring educational and health services to the natives. Even if the Chris tian clergy did not themselves want to engage in those activities, they would be inexorably driven to do so by the force of circumstance. Therefore, what argument can be advanced against allowing a rebate in respect of donations towards the cost of educational and medical missionary services? If I make a donation to a public hospital, I am allowed to claim a rebate on the ground that it is a donation for a charitable purpose, but if I make a donation to the Roman Catholic Church or the Methodist Church or any other church for mission purposes, knowing that the money will be expended upon medical and educational services, no debate is allowable. That fact may tend to deter people from making such donations. Even if the Minister’s old-fashioned conception of missionary work were correct and the missions were to confine themselves to teaching the Gospel, the Government would be not only justified, hut also morally bound, to allow a rebate in respect of donations for this purpose, as was pointed out by the honorable member for Barker. Therefore, whether missionary work is concerned with the propagation of the Gospel only, or whether it includes educational and medical services, the Government is in duty bound to accept the amendment, and to grant the concession claimed.
– It cannot be denied that every aspect of mission work is sacrificial. I was in Western Australia last week, and at a dinner there I met a grazier who told me that, in the centre of the State the aborigines were still so wild that his drovers had to carry revolvers to protect themselves, and to prevent the spearing of cattle. The Governments of Western Australia and Queensland have not fully discharged the responsibility which they owe to the aborigines. Since the States cannot now allow a rebate on donations to the churches for mission purposes, the Australian Government should do so, more especially as the missions are providing educational and health services, as well as preaching the Gospel. All missionaries will say that their first job is to see that the natives are fed and cleaned, this being necessary before their minds become receptive to the Gospel.
That is really the duty of the Government, but it is being performed only in part. Donations to the missions relieve governments of part of their financial responsibility. Does not the Minister regard the aboriginal who is in need of medical treatment and education as a person in distress? The Commissioner of Taxation does not so regard him, but I believe that the Government should take that view, and accept the amendment.
Minister for Post-war Reconstruction (Mr. Dedman) has assured me that the definition affecting Australia in clause 8 will be amended to include New Guinea. A contribution towards the cost of benevolent work in Australia can be claimed as a rebate, and the same should now apply to contributions for benevolent work in New Guinea, but there would still be difficulties to overcome. We are concerned with definitions. Some of the distinctions are very finely drawn. I am afraid that the Commissioner of Taxation will have difficulty in trying to determine what is benevolent work as distinct from missionary work. If this amendment be carried and a grOup of people in any church ear-mark, say, £1,000 for benevolent work in New Guinea, the church would be entitled to a deduction if it could assure the Commissioner that the money would be devoted to benevolent work. The question arises as to what constitutes benevolent work in the islands. If this amendment be rejected, the Commissioner of Taxation may have to define the different kinds of work undertaken in the missionary field, and the churches might have to divide their appeals into different sections in order that they might be able to secure a deduction for the proceeds of one particular appeal. I suggest that they might divide their appeals in three ways : first, appeals for money specifically for the preaching of the Gospel; secondly, appeals specifically for health work; and, thirdly, appeals for educational work. Health work would come within the definition of benevolent work. Under the existing legislation a deduction is allowed in respect of donations made to public hospitals. What is the difference between donations, made to public hospitals in
Australia and donations made to public hospitals in New Guinea? If a church ear-marked £1,000 solely for health work it should be entitled to a deduction even if this amendment were not accepted. The church, by administrative action, could possibly get around the difficulty which arises from the present wording of the act.
Mr. Archie Cameron interjecting,
– I know something about church work from personal experience. I am at least entitled to a hearing, even though the honorable member for Barker (Mr. Archie Cameron) may not agree with what I am saying. AH denominations conduct appeals for overseas missions, one Sunday in the year usually being set aside for that purpose. Donations are also made to churches throughout the year specially for mission work. The proceeds of the special appeal for missionary work are utilized not only for spreading the Gospel but also for health and educational works. If the churches divided their appeals into three or four sections as I have suggested, the money donated for health work in the islands, which the Government would have to undertake if the missionaries did not do so, would probably be deductible under the act as it stands at presentUnder the proposed amendment deductions would be allowable for donationsfor benevolent work in New Guinea, New Britain and the Solomon Islands.
– Does the honorablemember believe the missionaries in New Guinea could split up their expenditure into these various sections?
– That would be difficult. I am endeavouring to make a suggestion to overcome that difficulty. It is not beyond the ability of the churches to make specific appeals for health work in New Guinea on, say, one Sunday in the year, and appeals for educational work on another Sunday. I admit that carewould have to be exercised in the expenditure of the proceeds of these appeals. I merely submit the suggestion as constituting a means by which the churchesmight overcome the difficulty created by the present wording of the act.
– We- have had. a remarkable instance, this, evening^ of:’ arrangements being arrived, at between a Minister andi a member* from, his side of; the chamber:
– No arrangement wasmade.
– Honorable mentbers will recall that-, following the submission of an- amendment by the honorable member for Barker (Mr. Archie; Cameron)”,, which was- supported by hornor.ab.le members on* this- side- of the”, chamber, the- honorable member, for Wilmot (Mr. Duthie), rose- in his place and: supported, the amendment, but made it clear that he: would support it only- by word of mouth. The honorable gentleman clearly- indicated that he would not take part in any division on the amendment. He also said that if. the. amendment were not now accepted he would do all he could to ensure that the concession proposed” in the amendment would be’ granted next year. Either the honorable member believes in the work being carried out by the churches and the need to encourage it, or- he believes in his party affiliations and is prepared to sacrifice his church to his. party affiliations. He’ cannot have it both ways. During the debate on this- clause, the Minister rose: from his place and conferred with the honorable member for Wilmot, explaining certain matters at some length. I was interested in the emphasis with which the Minister, who is an elder of the PresbyterianChurch, drove home his points to the honorable member for” Wilmot; who was formerly a minister of the Methodist Church. When the honorable member for Wilmot received the call from the Chair, he began his’ speech by saying” that he had received an. assurance from the Minister that the definition as” it affected Australia would be extended’ to New Guinea. Immediately honorable members’ on this” side of the committee saw what was in the wind, and that an advantage that should accrue to the honorable member for Barker for having proposed this necessary amendment was to be surreptitiously filched by the honorable member for Wilmot, they protested against it. The honorable member for Wilmot then suggested that tho churches might, divide their appeals in three ways, making, separate: appeals fonhealth, educational, and, other missionary, work.. He. said that. he. felt. sure that as. a. deduction, was. allowed for donations, to public hospitals, it. would, also, be allowed, for. contributions, to: churches-, for mission work. Is that what, theMinister* said to. the- honorable memher for Wilmot, when, he approached, him?. Did’, the Minister, say ‘ to the honorable, gentleman, “ If. y,ou advisethe churches to”> split, up their appeals under certain headings, we shall see that they are given this: concession “ ? Did the Minister by that means seek to gain some political advantage for his colleague, the. honorable member for, Wilmot, which, rightly belonged to the. honorable member for. Barker?: If so, we are getting to. a pretty pass in this, committee. If. the.Minister has any concessions; to grant they should, be granted, to the committee as: a. whole and to the. people concerned. The Minister has sought to obtain a. political advantage for the honorable member for Wilmot by offering to grant a concession which is the right of the people who subscribe to missionary work..
.- It is a, great pity that in seeking to advance a> noble, cause the Acting Leader of the Opposition (Mr. Harrison) was not more careful of his language.. The honorablegentleman, sought to cast aspersions on the honorable member for Wilmot (Mr. Duthie) and the. Minister, for Defence (Mr. Dedman).
– The. honorable mem.ber for Wilmot said that’ he had received an assurance from the Minister.
– The Acting Leader of the Opposition has obviously failed, to read the amendment. Both the amendments moved by the Minister and the explanatory memorandum, circulated by him clearly indicate that in the proposed variation of section. 78 the word “ ‘ Australia ‘ shall be deemed to include theterritory of New Guinea “. The honorable member for Wilmot said that hehad been, informed, by the Minister that Australia was deemed to include, and in. fact did include, the Territory of. New Guinea. Notwithstanding that, the Acting Leader of the Opposition made an unfortunate attack on the honorable member for Wilmot by seeking to indicate that the honorable gentleman had received some suggestion from the Minister as to the manner in which his church might benefit in secret from this legislation. The charge made by the Acting Leader of the Opposition has wider implications than the honorable gentleman realizes. The simple fact is that the honorable member had spoken twice on the amendment and was not entitled to speak again. Consequently he made a personal explanation of the meaning of the act to the honorable member for Wilmot. The Minister has made it clear that he cannot accept the amendment on the spur of the moment. As the amendment is framed it might have very much wider implications than are realized by the honorable member for Barker (Mr. Archie Cameron).
– Do not worry about that. I wrote the amendment in plain English.
– I remind the honorable member that church missionary work does not only include the spread of the Gospel among natives. It has much wider implications than that. Does the honorable member intend to include every activity carried out by the missionary organizations ?
– I referred to all missionary work in the States and territories of the Commonwealth. When I say “ all “ I mean all. Some kind of appeal is wanted for missionary work in some of the heathen dens in Sydney and Melbourne.
– I ask honorable members of the Opposition whether they accept these wider implications. The Minister has a perfect right to say that the amendment cannot be accepted until the Government has had an opportunity to examine it and its implications. Section 78 deals with allowable deductions. A man on the lower ranges of income who makes a donation which is an allowable deduction for tax purposes receives little benefit from it. But a man in receipt of a high income receives the benefit of nearly the whole of his contribution. That, in practice, is inequitable, and should not continue. If people are to be encouraged to make contributions to charitable bodies and to missionary organizations, they should he placed on the same footing in respect of deductions. Contributions made by wealthy taxpayers are, largely, borne by the whole of the Australian people. A person who does not pay income tax receives no benefit from any donations that he makes to charitable organizations. But the man in receipt of a high income has a big part of the burden lifted from his shoulder. A taxpayer in the highest range of income, paying 15s. in the £1, makes what seems a worthy gesture by contributing to charitable and missionary organizations, but the greater part of his contribution is borne by the general taxpayers of the Commonwealth.
– His contributions are subject to the deduction system.
– That is so ; but there is a great disparity between the proportion of the contribution borne by taxpayers in the lower income groups, and that borne by taxpayers in the higher income groups. The donor who is in receipt of a low wage receives no benefit from his contribution and is called upon to pay, by way of indirect taxes, a portion of the contributions made by the wealthy taxpayer who receives the maximum benefit from his contribution. That principle should not be extended by making additional benefits allowable as deductions for tax purposes. I was not at all happy when the Government decided to include in the items allowable as deductions, donations to the United Nations appeal for children. I believe that people who regard that appeal as a worthy cause should make their contributions to it without expecting the people of Australia to carry the greater share of their contributions.
– Does not that also apply to donations made to any charitable organization ?
– It applies to all charitable donations coming within the provisions of section 78. The scope of the section is much wider than is realized. Other sections of the act might cover some of the missions to which reference has been made. In my opinion, the Minister has acted correctly in stating that he cannot accept the amendment without further consideration. That approach is sound. A Minister must take that course if he has a sense of responsibility to the Government, the Parliament, and the people. Some honorable members opposite apparently hope to gain a political advantage from pressing the amendment. I warn them that it is not a sound principle to widen the scope of this section in order ‘to include a large number of organizations, [f the field were widened, taxpayers as a whole would bear the burden of the benefits which would accrue to individuals who were permitted to claim their donations as deductions for purposes of income tax. If the Government desires to sponsor missions or promote any particular cause, it should make contributions to the charitable organizations concerned in them.
– The honorable member’s proposal, if given effect to, would dry up the source of donations.
– If donations have to be encouraged by the promise of a deduction of 15s. in the £1, the springs of charity in the hearts of donors must be almost dry.
– That is a monstrous statement.
– It is not a monstrous statement. It is a deliberate statement, which I make with a full knowledeg of all the circumstances. If we have to encourage people to make donations by offering them deductions of 15s. in the £1; the springs of charity within them must be almost dry. I like to think that a person donates £100 or £1,000 to a charitable organization because he believes that it is a worthy cause. T.n those circumstances, his donation is a noble thing. But the action of a person who donates £1,000 in the knowledge that he will be allowed a deduction amounting to £750, is not a worthy one. I regard a donation, in such circumstances, as a good publicity move, and even a business investment. Such a donation may even reduce the rate of tax applicable to the income of the donor, and thereby accentuate the inequity to which I have referred. The Minister has acted wisely in stating that the Government cannot accept the amend ment at the present time. The Government must consider the implications of the amendment, and determine whether it will apply only to missions which educate natives and provide hospitalization for them, or whether it will include all the mission activities of the various churches. Missions are conducted over a wide field, and the amendment refers to the activities of the missions. It does not specify missions engaged in educating and providing hospital facilities for natives. The extension of the provisions of this section to a wide range of activities in order to encourage charitable donations will be bad in principle.
.- It is evident that the honorable member for Perth (Mr. Burke) has a more theoretical than practical knowledge of the working of charitable organizations in this country. He has uttered the usual socialist jargon about the advantages that persons derive from making donations to charitable bodies. The implication was that every donation which they make represents so much profit to themselves, whereas, in fact, their spending income is reduced by the amount of the donation. I have had some association with charitable organizations, including hospitals.
– No doubt the honorable member did noble work.
– I do not claim that my activities have been a noble work, but I am able to speak on the subject, from practical experience. I should like the honorable member for Fremantle (Mr. Beazley) to tell the committee exactly what he has done on behalf of charitable organizations. T was the chairman of a drive for a new hospital, and the government of the day promised that if the public subscribed a certain sum, it would build the hospital. In a small community of 5,000 or 6,000 persons we succeeded in raising the required amount. The people who made donations were, in the main, in receipt of fairly low incomes. Nearly all of them who subscribed £5, £10, £20 or £25 were not in receipt of incomes of £3,000 of £5,000 a year. They did not derive the benefit of a deduction of 15s. in the £1 because they had made donations to a charitable cause. If honorable members opposite were to obtain from the churches information about the class of people who made donations to religious charities and missions, they would find that the great majority of them were in receipt of incomes that did not entitle them to a deduction of 15s. in the £1, or even 7s. 6d. in the £1. The honorable member for Perth has stated that practically everybody who makes a donation will receive a benefit of 15s. in the £1.
– That is an utter lie.
– I ask for a withdrawal of that statement.
– Order! I ask the honorable member for Perth to withdraw the statement.
– The statement by the honorable member for Richmond was a lie.
– I ask for a complete withdrawal of the statement, and an apology.
– The words of the honorable member for Richmond were a complete mis-statement.
– I have asked for a complete withdrawal and an apology. I have not heard the honorable member for Perth withdraw the words which were offensive to me.
– Order ! The honorable member for Perth must withdraw the statement.
– Ananias was a gentleman compared with the honorable member for Richmond.
– The honorable member for Richmond made a complete misstatement, and I refuse to withdraw my words.
– This is a novelty.
– I am prepared to take the consequences.
– Order! I ask the honorable member for Perth to withdraw the unparliamentary expression that the statement by the honorable member for Richmond was a lie.
– The honorable member for Richmond began his speech with a dirty sneer.
– In deference to the wishes of the Chair, I withdraw the statement and reserve the right to make a personal explanation later.
– I accept the withdrawal. During his speech, the honorable member for Perth emphasized that persons who made donations to charitable organizations received a deduction of 15s. in the £1. That was the only deduction that he mentioned. If I have misrepresented the words of the honorable member, I withdraw the statement with pleasure. However, I thought that I was using the honorable member’s words in the way that he intended them to be used in order to indicate that persons who made donations to charitable organizations, in the main, received a tax deduction of 15s. in the £1. If any other construction can be placed on the honorable members statement, I shall have a few “ bob “ on Precise.
– The honorable member should go back to his chop-sticks.
– I should like to know, Mr. Temporary Chairman, whether I have the floor.
– When does the honorable member propose to pay his employees award rates?
The TEMPORARY CHAIRMAN.Order ! The Minister for Transport (Mr. Ward) is entirely out of order.
– I have just come into the chamber.
The TEMPORARY CHAIRMAN.Order! The Minister must not interject.
– I have been discussing one of the provisions of the Income Tax Assessment Act which should evoke in all honorable members some appreciation of the valuable work that various churches are performing. I realize that some honorable members may consider that that task is not worthwhile and that the Christianization of certain backward peoples in New Guinea and in certain parts of Australia is of no importance. Despite the views of the honorable member for Perth, the task cannot be reasonably undertaken directly by the Government. The matter of subsidizing religious organizations could be seriously misunderstood, and any government which made a substantial donation to one religious organization would incur a grave risk of receiving a mighty protest from other religious bodies, whether the financial assistance was justified or not. Therefore, various governments, despite their willingness very frequently to assist in the charitable and educational work of missions, have been hamstrung, but the people who undertake the work are doing a worthwhile job. Citizens who give subscriptions to support missionary organizations are, in the main, those who are not in receipt of large incomes, and, therefore, do not make substantial contributions by way of income tax to consolidated revenue. Those “willing horses” give and give to charitable organizations. When collections are organized tq assist persons or institutions, the same names appear on the lists, but the donors are not in receipt of large incomes. Most of the poor people of the community are amongst the most generous. Often their generosity has kept them poor.
The honorable member for Wilmot (Mr. Duthie) has suggested, that the churches could “get around the difficulty “ by adopting certain tactics. There should not be any necessity for churches to have to “ get around “ legislation. They should be able to go to people in a straight forward manner, especially in connexion with charitable or mission work, and say “ The subscriptions which we are seeking from the community will be devoted to missionary work in New Guinea, and Central Australia. We do not attach any strings to it. “ The churches should not need to tell donors that if they give £5, they can claim a deduction of £3 10s. from their gross income as a donation to a mission to assist distressed natives but may not claim a deduction in respect of the balance of £1 10s. which may be used for other purposes for which a deduction is not allowed. Is that the sort of suggestion that the churches should put forward ? Would it be practicable for them to do so? The Government should adopt a simple amendment to give effect to the proposal which the honorable member for Barker (Mr. Archie Cameron) nas submitted. As the budget for this financial year exceeds £400,000,000 the loss of revenue will be neither here nor there. As the honorable member for
Barker has pointed out, a principle is involved. The people of Australia who support the missions and religious organizations, and who endeavour to ensure that the natives of New Guinea are taught the ways of civilization should :be encouraged to continue to do so.
Mr. Ward interjecting,
– The Minister for External Territories is interjecting freely this evening. I do not know that he will be so loquacious in a certain place a month hence.
The TEMPORARY CHAIRMAN.Order! That remark is not related to the clause under consideration.
– The Minister should be kept in his place.
The TEMPORARY CHAIRMAN.Order! On two occasions I have called the Minister to order, and have mentioned him by name. The honorable member for Richmond must withdraw his remark, because it is a reflection on the Chair.
– I shall certainly withdraw the remark. The fact is that the Minister has not obeyed your injunction, Mr. Temporary Chairman. I realize that you are endeavouring to maintain order. The acceptance of the amendment would not matter much to the Government, but it would matter a lot to the churches, which are appealing for funds for the purposes referred to in the amendment. I hope, therefore, that further consideration will be given by the Government to the acceptance of the amendment.
– I desire to make a personal explanation, Mr. Temporary Chairman. The honorable member for Richmond (Mr. Anthony) said that I claimed that every one who subscribed to church missions would do so only because they would thereby escape taxation of 15s. in the £1. Either the honorable member cannot hear or he cannot understand words. I pointed out that benefit from the amendment proposed would range from persons who paid little income tax to persons who paid income tax of 15s. in the £1 and that “benefit would be disproportionate through the ranges of income. I repeat that. I can only say that the honorable member’s perception is not high and that we cannot expect much better from him.
– Order !
– I wish to speak in complete’ opposition to the amendment, particularly because of the clarification given by way of interjection by the honorable member for Barker (Mr. Archie Cameron). The honorable member for Perth (Mr. Burke) said quite correctly that many churches spoke of their activities in the cities of the Commonwealth as missions, and the honorable member for Barker indicated that, as far as his amendment was concerned, that was acceptable .to him, and he mentioned that the heathen of Sydney and Melbourne needed the activities of church missions.
– There is a Central Methodist Mission operating in Adelaide.
– Yes, and there is a Centra] Methodist Mission operating in Perth and in many other cities of the Commonwealth. The -amendment would apply to the special missionary efforts of the churches in tent missions and otherwise at different times. I completely oppose the granting of an exemption from tax in respect of the collections taken on those occasions. Under the definition advanced by the honorable member for Barker the ordinary activities of a church, no matter where they were pursued, would be mission activities. The ordinary conducting of a church service is a mission activity. It is an effort to convert people to Christianity or to consolidate in them the Christian ethic. The honorable member for Perth said that in that sense the honorable gentleman’s proposed clause was vague. His remarks, in -my opinion, were perfectly clear. I am completely opposed to exempting donations to churches from income tax. A donation to a church is made because the donor is convinced of the worthiness of the objectives that the church is pursuing and for no other reason. There is no need for the amendment. For years the churches have continued their activities without asking for any such exemption. It would be contemptible if dona tions to churches were made for any other reason than that the services that the churches were trying to perform were worthy of help or if one instanced one’s donation to missionary activities to the Commissioner of Taxation as a reason for exemption “rom tax. I suppose the most effective missionary activity that a church undertakes is education, and I should be completely opposed to exempting from tax donations made or fees paid by people to private church schools because of their religious convictions or because they regarded religious education as essential for their children. I would regard that as a disguised form of subsidy and a violation of the spirit of the Constitution, which does not allow such fostering or recognition of any church or any established church. The amendment will give the Opposition many opportunities of being pious and of representing the Government as ruthless, but I take a clear stand on the principle that if a person subscribes to a religious organization it is his own responsibility and proceeds from his own convictions. This attempt to give him financial gain from his contribution is contemptible.
– I have but a few words to say about the amendment. In his mock heroics about assisting church missions the honorable member for Richmond (Mr. Anthony) made some disparaging remarks about the Minister for External Territories (Mr. Ward). As a matter of fact, the Minister for External Territories has been one of the warmest supporters of the missions operating in our external territories. On several occasions he has come to me on their behalf. I think the missions would support my statement that they have often warmly commended him for the assistance that he has given them, especially in their benevolent work. In that respect he has personally waited on me in order to make representations on behalf of the missions. I speak in order to ensure reasonable justice to the Minister for External Territories. If missionaries in the external territories were able to speak here I am sure that they would have hard words to say about people who disparage what the Minister for External Territories has done or who attribute to him complete callousness towards the missions. The honorable member for Fremantle (Mr. Beazley) has destroyed the arguments advanced in support of the amendment more effectively than I could do. My reason for rising was to correct the impression that the Minister for External Territories has not earned the full gratitude of the missions in the external territories for the help that he has given them particularly in relation to their benevolent work, which deeply interests him, regardless of denominations. Bie has been most sympathetic to the missions. As to the amendment, I have only to say what I have said on many occasions previously. Before any bill of this description is brought down it is the practice of the Treasury to hear all possible representations on the subjectmatter of the bill. I, as Treasurer, make a practice of ensuring that any representations made to me personally or to the department on any piece of legislation initiated in the department, whether it be in relation to sales tax or any other kind of tax, shall be tabulated and referred to when the drafting of the legislation is under consideration, no matter when those representations were made, even if they were made twelve months previously. All the representations are filed for reference. I should think all other Ministers adopt the same practice. Full consideration is give* to all requests made.
– Does the Treasurer mean to say that all the companies were consulted before the company tax legislation was introduced and that their opinions were sought? Did they know what was in the bill before it was presented ?
– The bill .has been before honorable members for some time now.
– But before the legislation was introduced did the companies know what it would contain?
– They knew a great deal of what was happening about company tax. Four different committees had considered it. So that I shall not waste the time of the committee and that the committee itself shall not waste its own time, I say that the provisions of this bill relating to company tax and other matters were inserted after I had spent a great deal of time and the Commissioner of Taxation had spent twice as much time as I had on the matter. The bill contains provisions designed to meet objections to the present system of taxing companies. The cheap heroics of the honorable member for Richmond positively sickened me. He was merely trying to gain cheap support. I endorsed every word said by the honorable member for Fremantle. No amendments will he accepted.
.- The last words of the Prime Minister (Mr. Chifley), “ No amendments will be accepted “, have been his slogan for the last seven years in the Parliament. The right honorable gentleman talked about wasting time. There is no need for time’ to be wasted. Previous governments, including even Labour governments, have been known to accept reasonable amendments. They have given amendments proper consideration and the proposers of the amendments have received courteous answers like, “ It is not possible to accept the amendment immediately, but it will be given favorable consideration and the honorable member will be told to-morrow whether his amendment can be accepted or not “. That is the way in which the business of the Parliament should be conducted. The way in which it is being conducted is reminiscent of the sessions of the United Nations at which the Russian delegates, Vishinsky and Gromyko, never make a decision, but merely say in answer to any proposal, “ No ; I have to report to the Politburo in Moscow “.
The TEMPORARY CHAIRMAN.Order! I ask the honorable member to come back to the amendment.
– Yes, Mr. Temporary Chairman. Here the Labour Government has to report to the caucus, which is the same thing. The honorable member for Fremantle (Mr. Beazley) tried to drape a halo around his head by saying, “ I am for the churches, but I would not give subscribers of church funds any tax rebate.
– Order ! I ask the honorable member to address the Chair.
– I am addressing you, Mr. Temporary Chairman. The honorable member for Fremantle came in late or he would have known that that was not the subject under discussion. Churches do not come into the question at all. The amendment relates to missions. That was made perfectly clear by the honorable member for Barker (Mr. Archie Cameron) in proposing the amendment. The Prime Minister unfairly castigated the honorable member for Richmond (Mr. Anthony), who spoke from experience. The Prime Minister must have heard the mutterings of the Minister for External Territories (Mr. Ward) when the honorable member for Richmond was speaking. I will not repeat what he said, .though the Prime Minister should have rebuked him, but I say to you, Mr. Temporary Chairman, that some millions of pounds a year are mulcted from the Australian people yearly for the development of the external territories.
The TEMPORARY CHAIRMAN.Order ! That has nothing to do with the subject under discussion.
– It has. The missions in New Guinea, of which the Minister for External Territories is the de facto dictator, do excellent work, as the Minister and every one else knows. The Minister has praised them at times. No one could do otherwise. The reverend member for Wilmot (Mr. Duthie) had a whispered conversation earlier with the Minister for Post-war Reconstruction. The Minister said to him something like this, “ You have been associated with the church. Put up some views that will help us “. The honorable member then told his story. It might have been the Vicar of Bray making a personal explanation. He- said, “I am all for having subscriptions made to missions, but it must be specifically stated that the subscriptions must be for education and for health and not for Gospel teaching.” How does heas an ex-cleric separate the religious instruction that is given in missions in New Guinea or missions for the aborigines in Australia from the physical welfarework of missionaries ? He knows, and the Minister for External Territories will agree, that one work of missions is to alleviate sickness. In multifarious waysthe missions have done magnificent work. The Minister has induced the honorablemember for Wilmot to suggest the subdivision of work done by missions and to say about donations to them, “ We should approve if the donations are not for Gospel teaching “. The honorable member for Barker did not ask for that. He asked that donations to missions be exempt from tax. I remind the honorablemember for Fremantle, who has been giving us one of his bright tutorials that it is not so much the wealthy who pour money into missions. His remarks comestrangely from him a few days afterHospital Sunday.
– I said nothing about’ donations from the rich. I made no such statement.
– The inference was tobe drawn from the speech of the honorable member for Fremantle.
– Neither did I make any remark from which such an inferencecould be taken.
– The honorable membertalked about church missions.
– I made no statement about rich people.
– 1 have what the honorable member said before me.
The TEMPORARY CHAIRMAN.Order! The honorable member forBalaclava (Mr. White) must address theChair.
– The honorable memberfor Fremantle said that he was against donations for the church being counted as a deduction for income tax purposes. No one has suggested that they should be so regarded. It is thecommon people who give the occasionalguinea who should be considered.
– Every one does that.
– Can honorable members imagine any one, whether rich or poor, when making a donation to a mission, saying “ This donation is not for Gospel purposes but only to provide medical and educational facilities?”. If that is the idea behind the remarks of the honorable member for Wilmot, the hospitals would soon be in distressed circumstances. It is the voluntary effort of the Australian people that counts. In the main, they are good-hearted and generous. There has been a lot of time wasted by the honorable member for Fremantle in building straw steeples and knocking them over again. As such a concession applies to the United Nations appeal for children, I consider that the amendment should bc agreed to.
– I wish to make a personal explanation, as I have been misrepresented. The honorable member for Balaclava (Mr. White) and the Acting Leader of the Opposition (Mr. Harrison) implied that when the Minister came to my desk some little time ago he suggested to me a story that I should put to the committee.
– The honorable member said that that happened.
– I did not say so. I explained that the Minister pointed out to me–
– The honorable member said that the Minister gave him an assurance.
– If we extend “ Australia” to mean the “ Territory of New Guinea “, any refunds would have to apply to moneys sent to New Guinea.
The DEPUTY CHAIRMAN.- Is the honorable member exercising his right to a second call?
– I have been misrepresented in a vicious manner by the honorable members to whom I have referred. The remarks contained in the second portion of my speech were based on my own ideas entirely, they had nothing whatever to do with the Minister.
– I take exception to the remarks of the Prime Minister (Mr. Chifley), which did me an injustice. When I spoke I did not make disparaging remarks about the Minister for External Territories (Mr. Ward) in respect of his administration. My remarks were in reply to interjections by the Minister that he had no right to make. Those were the only remarks I made in relation to this matter. I am sorry that the Prime Minister did not remain in the chamber to hear my explanation. He came into this chamber in the middle of the debate and left again before hearing all the facts of the case. It is a refreshing change that an honorable member has to rise and speak in defence of the Minister for External Territories.
– It may be necessary for the honorable member to find some one to defend him yet.
– Times are certainly changing when an honorable member tells the committee of the fine character possessed by the Minister for External Territories. The honorable member for Fremantle (Mr. Beazley) referred to the suggestion that gifts to a charitable organization ought to be deductible for taxation purposes. I do not believe that very many people consider that factor at the moment of giving, but they frequently consider it sometime afterwards, particularly when they find that their household budget does not balance. I contend that, having regard to the cost of living and the high rates of taxation at present, every £1 that is donated to charitable institutions should be allowable as a tax deduction.
– It is the Christian spirit that prompts people to make donations to charitable institutions.
– That may not be an important consideration for people who are in receipt of an income of £1,000 a year, or £1,500 a year, as are honorable members, but if the average married man with family responsibilities should decide, after setting aside sufficient money to defray travelling expenses to and from his work and to provide adequately for necessities in his home, to make a donation to charity out of his surplus funds, particularly if that donation should be to an organization for the protection and education ofbackward peoples the responsibility for whose care really rests with the Commonwealth, I contend that he should be entitled to a tax concession in respect of the amount of the donation. I do not think that in many cases people who are potential donors to charitable funds have made the request for the incorporation of the amendment under debate. The request comes, rather, from representatives of the churches, who consider that their efforts to obtain funds are being prejudiced by the fact that a concessional deduction has not been approved in respect of such donations.
– To what charities is the honorable member referring
– I understand that the honorable member for Maranoa (Mr. Adermann) was, or is, president of a very important church organization in Australia. He is a man of high standing in the church to which he belongs. He has advocated the acceptance of this amendment not for any personal reason, but because he knows, as one who has been responsible, in a sense, for the launching of various appeals, how difficult it is to get voluntary contributions to-day. He recognizes that the position would be somewhat eased for the churches if a little more encouragement was offered to people to give. I know that I am talking without avail, because the Prime Minister has already said that he does not intend to accept any amendments. The fact remains, however, that it is the duty of the Opposition to state a case. That has been done without heroics, but with a sincere belief in the principles advanced.
Question put -
That the sub-paragraph proposed to be inserted (Mr. Archie Cameron’s amendment) be so inserted.
The committee divided. (The Temporary Chairman - Mr. H. P. Lazzarini.)
Majority . . . . 12
Question so resolved in the negative.
Bill returned from the Senate without amendment.
House adjourned at 10.45 p.m.
The following answers to questions were circulated: -
In addition an amount of £398,830 was paid to the State of New South Wales under Federal Aid Roads and Works Agreement. This rcpreseutcd.au amount in respect of which payment was suspended in 1943 with the concurrence of the New South Wales Government. For the current year the Government is providing £7,300,000 under the Commonwealth Aid Roads and Works Act, including £2,000,000 for special assistance on secondary roads. The latter sum is double the amount provided for this purpose last year.
n asked the Minister for Information, upon notice -
– The answers to the honorable member’s questions are as follows : -
Mr. Murphy enlisted in the Australian Military Forces on the 3rd January, 1942, and after a brief period of service was seconded to the Department of Information. He remained with the department, under direction from the Army, for the duration of the war and was not formally discharged from the forces until the 5th February, 1946.
l. - On the 6th October, the honorable member for Grey (Mr. Russell) asked the following questions : -
The Postmaster-General has supplied the following information : -
The matter has been taken up with the company concerned, which states that commercial broadcasting station 3DB proposes to increase its advertising rates by 33A per cent, to bring them approximately to the same level as those of its competitors in Victoria. The increase is proposed on all new contracts and renewals after the 1st November, 1948. As the majority of the contracts are for periods of twelve months, it will take a year for the full effect of the increase to be implemented. It is also stated that the present rates charged by broadcasting station 3DB were adopted in 1938, since when Victorian receiving licences have increased from 315,945 to 469,767. According to the company, the new rates contemplated bear comparison with those being charged by other commercial stations in Melbourne and Sydney. Price control of advertising for broad.casting stations ceased on transfer of price control powers from the Commonwealth Government to the State governments on the 20th September, 1948. It is not possible to say whether the development mentioned would have taken place had the controls been continued. The Australian Broadcasting Act under which licences for commercial broadcasting stations arc issued does not confer on the Postmaster-General the power to control ro.tes charged for radio advertising. The Australian Federation of Commercial Broadcasting Stations, which has made inquiries from the licencees of all stations at the request of the Post Office, advises that, although operating costs have increased substantially since before the war, few increases in station advertising rates have been approved since 1939. For this reason, the federation states, several stations are giving consideration to the question of increasing their rates, or adjusting anomalies which have occurred over the years and, in the rase of three small stations, actual increases have been decided upon.
Coal: South Australian Supplies.
n. - On the 19th October the honorable member for Hindmarsh (Mr. Thompson) asked a question regarding coal shipments to South Australia. The Minister for Shipping and Fuel has supplied the following information: -
The Commonwealth Government does not control coastal shipping but the Australian Shipping. Board co-operates through Joint Traffic Committees with the private shipowners to utilize to the best advantage the shipping available. The Traffic Committee allots sufficient tonnage each week to lift the amount of coal that the Joint Coal Board advises will bc available for shipment from New South Wales to other States, but various factors which may arise during the week sometimes prevent the full use of the tonnage made available. The honorable member has drawn my attention to the difficulties encountered in South Australia recently due to a shortage of coal in that State. On this occasion the shortage was caused by heavy rain at Newcastle interrupting the loading of the vessels allotted to take coal to other States. In the case of South Australia the tonnage allotted for that week was sufficient to carry 19,000 tons of coal, but only one vessel, the Echunga, with 5,200 tons, was able to complete loading and sail. Other States also suffered in the same manner. Since that date shipments to South Australia have comprised 21,440 tons in the week ending 2nd October, 20,31 7 tons in the week ending the 0th October, and 20.207 tons in the week ending the 1 6th October, and tonnage has been allotted for the week ending the 23rd October to lift 23,200 tons. As the quota allowed by the Joint Coal Board to meet South Australia’s normal requirements comprises 18,500 tons by sea and 1,000 tons by rail, it is apparent that both the Joint Coal Board and the Joint Traffic Committee are making every endeavour to build up stocks lo6t through the excessive rain in the week mentioned by the honorable member.
y. - On the 19th October, the honorable member for “Wilmot (Mr. Duthie) asked me a question concerning allegations that there is a “ racket “ in illicit tobacco throughout the Commonwealth and that the Commonwealth Government is being defrauded of thousands of pounds of revenue each month. The Minister for Trade and Customs has advised that he has no doubt that, despite the vigilance of departmental officers and the police, some cases of trafficking in illicit tobacco go undetected. Trained inquiry officers are, however, constantly on the alert in all States throughout the Commonwealth to combat this traffic and their efforts have met with considerable success. As recently as the 20th October, a case in Victoria of possession of illicit tobacco was brought before the court and the person concerned was fined £500 on two counts. In that case, a motor car, cutting machines, electric motor and a large quantity of leaf tobacco and cut tobacco were in addition seized as forfeited to the Commonwealth. Arising out of the investigations in that case, two other prosecutions are pending. Apart from these Victorian cases, eleven cases of manufacture or possession of illicit tobacco have been successfully prosecuted in the courts over the past twelve months. The Department of Trade and Customs at the present time has under consideration a course of action which it is expected will make the disposal of illicit tobacco more difficult and thus greatly reduce the number of cases which go undetected and unpunished.
American Comic Strips.
y. - On the 1st October, the honorable member for Eden-Monaro (Mr. Fraser) asked me questions regarding the importation into Australia of syndicated “comic” and “adventure” strips. As promised, I have discussed this matter with the Minister for Trade and Customs and desire to inform the honorable member as follows : -
With regard to the question of the expenditure of dollars on these strips I would confirm that no dollars are at present being expended in this way. As explained by me previously it is still possible for comic strips of Amercian origin to be reproduced in Australia notwithstanding that their importation is prohibited under the Customs (Import Licensing) Regulations, by the adoption of the expedient of reproducing them from American newspapers and magazines in which they appear and which are regularly imported into Australia either in bulk or in single copies, according to the licensing treatment accorded to them. Printers proofs and drawings of these strips are also being supplied from agencies in America to publishers in Australia, without charge, as first-class mail matter which is not in the ordinary course subject to customs examination. As I pointed out previously, the Australian publishers using these comic strips under arrangement with the holders of the copyright in America pay for their use by way of royalty but no dollars are being made available by the Commonwealth Bank for payments of this nature.
Ibo invariable practice in present circumstances is to allow these royalty payments to accumulate in Australia for expenditure as and when required by the American copyright holders or for remittance to America at some future date when such action becomes possible. If the comic, or adventure, strips to which the honorable member refers aTe of such a nature as to offend against State law, a publisher reproducing them in Australia would bc subject to that State law. There ‘is, of course, no Commonwealth censorship as to what a person may or may not publish in the way of comic, or adventure, strips.
Russia: CHARGES bt Mb. Christopher Mathew.
asked the Prime Minister, upon notice -
It oan no longer be denied that the Soviet Union is making use of large numbers of prisoners as forced labour in conditions denying to them the basic human rights; that these human beings are maintained in conditions of wretchedness and undernourishment; that under the cloak of arrest for crimes and other offences against the regime the Soviet Government has acquired for itself a vast body of cheap labour utterly without rights?
That, in short, the Soviet Union has instituted a slave system recruited from among its own citizens that has no parallel in history?
y - Verbatim reports of these committees are not circulated. Summaries of debates, however, are made and distributed, and it is expected that the summary of the proceedings of the relevant committee (No. 3) will be received shortly. If it is possible to furnish further information, after the summary lias been examined a further reply will be furnished to the honorable member.
Cite as: Australia, House of Representatives, Debates, 27 October 1948, viewed 22 October 2017, <http://historichansard.net/hofreps/1948/19481027_reps_18_199/>.