House of Representatives
16 November 1950

19th Parliament · 1st Session

  1. House of Representatives
  2. 19th Parliament
  3. 1950

Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 10.30 a.m., and read prayers,

page 2542

QUESTION

QUESTIONS

Mr DEPUTY SPEAKER:

– Before I call for questions without notice I intimate, in order to avoid any unpleasantness, that I will not permit honorable members to make speeches when they are asking questions. I shall give every opportunity to honorable members to ask legitimate questions in order to obtain information, hut I shall not allow lengthy questions that are almost short speeches like many of those that have been asked recently.

page 2542

QUESTION

COAL

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Will the Minister for National Development say whether the recent heavy floods in the Hunter Valley have had a greater effect in reducing the production of coal than has the Communist activity in the coal-mining industry, to’ which the honorable member for

Mackellar referred yesterday? In view of the very serious interference with the production of coal caused by floods in the Hunter Valley, will the Minister say whether any consideration has been given to the building of an all-weather railway line through portion of the area, as has been suggested from time to time?

Mr CASEY:
Minister for Works and Housing · LP

– I do not believe that it is possible to make any precise answer to the first question asked by the honorable gentleman. My impression is that communism has been infinitely more damaging to the production of coal than has the interference caused by floods in the Hunter Valley or in any other mining area. As to the second question, the honorable member knows that the Government of New South Wales has a plan to control the Hunter River, and considerable progress has been made in implementing that plan. As far as I am aware the Commonwealth has not been approached to co-operate with that Government by constructing a railway or in any other way to assist in the winning of coal in the Hunter Valley. If any such approach had been made I think I would be aware of the fact. I can assure the honorable gentleman that any request for assistance would be received with the usual sympathy which the Commonwealth displays in dealing with such matters. However, 1 repeat that I do not believe that the flooding of the Hunter Valley has been nearly so damaging to the production of coal as Communist activity in the mining industry has been.

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– In view of the very disturbing questions which are frequently asked by members of the Government parties in this Parliament about the lack of coal production, and the implication that the workers are to blame for it, will the Minister for Labour and National Service inform me of the extent to which coal production is being held up through (1) obsolete winding machinery in mechanized mines, which hinders mined coal from reaching the surface, and (2) obsolete railroads, skips and locomotives which hinder mined coal from being hauled from tunnels to the surface? Will he also inform me how many mines have been fully developed but remain idle because it does not suit theowners to work them?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– I have not the information that the honorable gentleman has requested, but I shall endeavour to obtain it for him from the Joint Coal Board. Many unnecessary stoppages have occurred on the coal-fields this year and the output is less than this country needs, but I am glad to say that it appears that the production of coal in New South Wales this year will be substantially greater than the output last year.

page 2543

QUESTION

CIVIL AVIATION

Mr HASLUCK:
CURTIN, WESTERN AUSTRALIA

– I ask the Minister for Civil Aviation when the Guildford aerodrome in Western Australia is likely to be gazetted as an international airport. In view of the extensive work which has recently been carried out on the aerodrome and which was summarized in “ an article in the Daily News of the 11th November, and of possible early developments in overseas air services, is it not both possible and desirable to make such a declaration at an early date?

Mr WHITE:
Minister for Air · BALACLAVA, VICTORIA · LP

– No international airlines are operating from Western Australia, and until such services are commenced it would be premature to give international airport status to Guildford. However, I assure the honorable member that, if international services are instituted from Western Australia, such as the Indian Ocean service to South Africa which is in prospect or a service by Qantas Empire Airways or any other organization, temporary arrangements can be made quickly to meet all customs, health and immigration requirements. Consideration would then be given to the establishment of a permanent international airport in Western Australia.

page 2543

QUESTION

MEAT

Mr JOHNSON:
KALGOORLIE, WESTERN AUSTRALIA

– Has the Minister for Commerce and Agriculture any information to give to the House on the attitude of the Government in relation to the representations that have been made for the granting of assistance to what is known as the Glenroy air-lift beef- scheme, which is operating in the Kimberley district of Western Australia? During the last four seasons, beef has been transported by air to the Wyndham meatworks, and information recently supplied to me by the Pastoralists Association of Western Australia proves that, despite any departmental opinions held to the contrary, practical cattle men with local experience are convinced that the scheme can, with some assistance in its initial stages, operate on an economic basis.

Mr DEPUTY SPEAKER:

-Order! The honorable member is infringing my ruling. I ask him to come to the point.

Mr JOHNSON:

– I have stated my question. Has the Minister any information to convey to the House about the Government’s attitude towards the scheme that I have mentioned?

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– Yes. What is known as the air-lift beef scheme provides for the transport of beef from Glenroy station to the Wyndham meatworks in the electorate that the honorable member represents. The company which operates the air-lift asked the former Government, of which the honorable gentleman was a member, for a subsidy of Id. per lb. as a contribution to the cost of the experiment. That Government referred the request to the North Australia Development Committee, which, in turn, recommended that it be referred to the Australian Meat Board for consideration. The Australian Meat Board sent two of its members to Glenroy station in order to examine the proposition on the spot and it later made certain recommendations to the present Government. The Government has suggested that the board might accede to the request of the company and pay the subsidy of Id. per lb. from its funds. That suggestion is now being considered by the Australian Meat Board and I think it will make a decision soon.

page 2544

QUESTION

PUBLIC SERVICE

Dr NOTT:

– In view of the fact that the annual report signed by the secretary of the Canberra branch of the Public Service Clerical Association, which contains allegations of gross irregularities and improper methods of procedure in the appointment and promotion of certain officers of the Public Service, has now been endorsed and adopted without any amendment by the annual general meeting of the branch, will the Prime Minister give urgent consideration to the appointment of a royal commission to inquire into the allegations and the implications of the report?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– At the present time all I know about that matter, beyond the information that I gained from a perusal of the original report, is what appeared in the Canberra Times this morning. I shall give consideration to the matter during the course of the day, and when a decision is reached I shall be happy to announce it.

page 2544

QUESTION

HOUSING

Mr MORGAN:
REID, NEW SOUTH WALES

– I preface a question to the Treasurer by pointing out that, according to a communication that I have received from the New South Wales Minister for Housing, Mr. Kelly, the New South Wales Housing Commission takes the view that clause 14 of the Commonwealth and State Housing Agreement precludes it from selling commission homes at less than cost, although the actual valuation may be below that cost. In view of the fact that clause 14 of the agreement provides that the consent of the Commonwealth Treasurer must be given to a sale at less than cost, and that any loss thereon shall be borne by the Commonwealth and the State concerned on a 60-40 basis respectively, and also in view of the statement by the Minister in charge of that legislation, when it was introduced to this House, that it was intended to dispose of the homes when values became stabilized and not to inflict on the tenant purchasers the burden of the relatively high construction costs prevailing in the immediate post-war period, will the Treasurer indicate whether he is still prepared to give effect to that policy and enable sales to be made at actual cost or valuation, whichever is the lower? Will he advise the State Minister for Housing accordingly?

Mr FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– I shall have the whole matter examined and shall later give the honorable member an adequate reply.

page 2545

QUESTION

ARMED FORCES

Mr GILMORE:
LEICHHARDT, QUEENSLAND

– As insurance policies of recruits to the services lapse or are cancelled on enlistment, a fact that I consider has a very severe retarding effect on the rate of enlistment, I ask the Minister for the Army and Minister for the Navy whether he will endeavour to have the insurance companies review their attitude and give the men the same insurance benefits as they formerly enjoyed in civilian life?

Mr FRANCIS:
Minister for the Army · MORETON, QUEENSLAND · LP

– The point raised by the honorable gentleman has for some time been engaging the attention of the Minister for Air, the Minister for Defence and myself. We hope to make a statement on it at an early date.

page 2545

QUESTION

BOTANY BAY

Mr CURTIN:
WATSON, NEW SOUTH WALES

– A fortnight ago I asked the Minister for National Develop ment a question about the development of Botany Bay as a deep-water port. I now respectfully suggest to the right honorable gentleman that, having waited so long for an answer, I can be pardoned for asking when he will hustle the information along to me for the benefit of my electors.

Mr CASEY:
LP

– I greatly regret that the honorable member has not yet received a reply in connexion with the matter that he has mentioned. I shall ensure that he will receive one to-day.

page 2545

QUESTION

WHEAT

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– Has the Minister for Commerce and Agriculture seen the reported reply of the New South Wales Minister for Agriculture who, when answering a question in the State House last week, said that it was not the Australian Government that had initiated the move for a ten-year wheat stabilization plan, but that the initial move in that matter had been made by the New South Wales Government? Can the Minister inform the House whether the New South Wales Minister for Agriculture approached him on this subject and, if so, when? Was it before the 10th November, 1949, when the Prime Minis ter, in delivering the joint Opposition policy speech, stated -

In particular, we support a long-term stabilization of the dairy industry for 10 years and be believe that the wheat stabilization scheme would- operate for a similar period.

Mr McEWEN:
CP

– Certainly neither the New South Wales Minister for Agriculture nor the New South Wales Government is responsible for this Government’s policy that there shall be a ten-year wheat stabilization plan, if the wheat industry and the States agree to it. According to my recollection the State Minister has never approached me on that matter directly, but he suggested at the meeting: of the Australian Agricultural Council that was held in Canberra last August,, that the wheat industry should be stabilized over a period of ten years. That plan was first advanced by me in this chamber when I spoke for the joint Opposition parties in the debate on the Wheat Industry Stabilization Act. I then said that that was the policy of the joint Opposition parties. That was three years ago and my statement was confirmed in the policy speeches of the present Prime Minister and the Leader of my party prior to the election last year. In conformity with those policy declarations, which were made while those parties were in opposition and when they were declaring their policies prior to the last general election, the Government today stands for a ten-year stabilization policy for the wheat industry, subject to the approval of the industry itself and the co-operation of the State governments which must play their part in any stabilization plan. I shall meet the executive of the Australian Wheat Growers Federation -to-morrow afternoon in Melbourne in order to have the first discussion for the purpose of obtaining the views of the federation and bringing this matter before Parliament.

Mr WHEELER:
MITCHELL, NEW SOUTH WALES

– My question is directed to the Minister for Commerce and Agriculture. By way of explanation I state that I recently inspected wheat consigned to poultry-feed distributors within my electorate, which is one of the largest egg-producing areas in New South Wales, and I found the wheat to he of poor quality. At least 20 per cent, of it was bad, and much of it was returned; to the distributors by poultry-farmers who refused to take delivery of it. “Would the Minister interest himself in the quality of wheat now being supplied for poultry feed? Will he ascertain whether there is any substance in the claim thai damaged wheat previously offered for sale, which did not realize the price required, is now being supplied to poultry-farmers as f’.a.q. wheat and charged for accordingly? Will the Minister also try to ensure that bagged wheat is supplied in bags which have some resale value?

Mr McEWEN:
MURRAY, VICTORIA · CP

– The honorable mem!ber has drawn my attention to some low quality wheat of the type that, it is :.stated, is being supplied by the Australian Wheat Board to poultry-farmers im.his electorate, which is a very important egg-producing centre. I am not personally aware of the circumstances but T can quite understand the seriousness of this matter to poultry-farmers, if the position is as stated by the honorable member. I undertake to make prompt inquiries and to inform the honorable member of the position as I find it. If necessary I shall take such steps as may be warranted to meet the situation.

page 2546

QUESTION

FRESH FRUIT

Mr DUTHIE:
WILMOT, TASMANIA

– Last Thursday, when I spoke on the motion for the adjournment of the House, I brought forward the plight of the growers of small fruit in southern Tasmania who are asking for higher prices for their product. The Minister for Commerce and Agriculture promised to give attention to the matter. Has he yet obtained any information on this subject?

Mr McEWEN:
CP

– Yes. As promised, I referred this question to the appropriate quarters for a report on the facts and for recommendations. I shall inform the honorable member further as soon as I am able. He may be sure that I am interesting myself in the problem.

page 2546

QUESTION

LEAD

Mr McMAHON:
LOWE, NEW SOUTH WALES

– I ask the Minister for Commerce and Agriculture whether he will approach the Ministers in charge of prices administration in the various States in order to persuade them to permit battery manufacturers in Australia to purchase their surplus lead requirements at overseas parity prices. We have in Australia sufficient productive capacity to produce our total requirements and to export a considerable quantity of batteries but, due to the fact that the State Ministers in charge of prices have fixed the price of lead at £65 a ton, Australia is only producing a very limited number of batteries.

Mr McEWEN:
CP

– I am not willing to ask the Ministers in charge of prices to agree that a certain proportion of lead should be made available in Australia for battery manufacture or any other purpose at a higher rate than the agreed domestic price of £65 a ton. The present price was decided upon by the prices commissioners after negotiations conducted by myself at the request of the Ministers in charge of prices on terms stipulated by them. The price of £65 a ton was related to an engagement by the Broken Hill Associated Smelters to make available to Australia 50,000 tons of virgin lead a year for a period agreed upon by the prices commissioners at a rate of £65 a ton which was less than the prices commissioners had determined as the cost of production of virgin lead in this country. The fact that an unlimited quantity of lead is not available arises from three reasons. The first is that the domestic price is fixed at £65 a ton against an export parity of about £1S0 a ton. The second is that only one Australian company is carrying the burden of meeting the ‘demand of the Australian domestic market. Two companies, Mount Isa Mines Limited and Lake GeorgeMines Proprietary Limited, because they do not produce virgin lead but only lead concentrates, make no contribution whatever towards meeting, the Australian domestic requirements. That is one of the major difficulties met with in attempting to make an arrangement to supply the full requirements of the Australian market for lead. The other reason why only a limited quantity of lead is available is that there is no effective arrangement to bring into circulation scrap lead, which in every other country in the world makes a major contribution to the current demand for lead. The price of scrap lead in Australia is maintained by the various

Ministers in charge of prices at a figure which makes it unattractive to those who hold it for sale. The Australian Government makes its contribution towards bringing scrap lead forward by maintaining an absolute embargo on its export from Australia. The Australian Government conveyed to the Ministers in charge of prices only last week the view that if they would take steps, if necessary compulsorily, to bring scrap lead into circulation so as to meet all the requirements which create the problems that the honorable member has referred to, the Australian Government will play its part in that regard.

page 2547

QUESTION

IMMIGRATION

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Has the attention of the Minister for Immigration been directed to a reported statement by Sir John Storey, the chairman of the Commonwealth Immigration Council, who, following his return to Australia after having made a survey of the immigration conditions in Europe, said that ex-members of the Nazi party should not necessarily be excluded in the selection of German migrants? I ask the Minister whether Sir John Storey was expressing his own viewpoint or whether his statement was an expression of the policy of the Government?

Mr HOLT:
LP

– Sir John Storey was expressing his own viewpoint.

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– Can the Minister for Immigration say whether there has been any cessation of Government developmental works recently that has resulted in a surplus of migrant labour? Will the honorable gentleman make a statement about the number of migrants at present accommodated in government hostels who are not available for employment in private industry ?

Mr HOLT:

– I can assure the honorable gentleman that there has been no reduction of Government developmental activity. On the contrary, according to my colleague, the Minister for National Development, developmental works are expanding considerably. There is no surplus of migrants who are not already suitably employed. Indeed, we have been compelled to reject requests made almost every day by various public bodies that are short of labour and are pressing for more migrants for their needs. As soon as migrants arrive in this country positions are waiting for them, and they are placed in those positions almost immediately.

page 2547

QUESTION

KOREA AND NEW GUINEA

Mr CALWELL:
MELBOURNE, VICTORIA

– In view of the real and deep concern which the Australian, people feel about the safety and future of New Guinea and also about events in Korea, will the Prime Minister consider sending to those two countries during the Parliamentary recess two separate delegations of members representative of all parties in the Parliament and of representative persons outside the Parliament? I suggest that a delegation of about twenty persons composed of twelve members of the Parliament, and also representatives of exservice organizations, the trade union and employers’ organizations might be sent to New Guinea, and that a similar delegation might be sent to Korea. The purpose of the delegations would be to enable members of the Parliament and persons who hold representative positions outside the Parliament to obtain firsthand knowledge of the conditions existing in those two countries. If that were done the Parliament itself, when the matters relating to those areas come before it, might be better able to consider them in the light of the experience that the members of such delegations would gain.

Mr MENZIES:
LP

– Without making promises of any kind in respect of the matter that the honorable member has raised, I shall give consideration to it.

page 2547

QUESTION

DR. H. V. EVATT, M.P

Mr OSBORNE:
EVANS, NEW SOUTH WALES

– Has the Minister for Immigration seen the report that eleven Communists, who have been convicted of offences in the United States of America, are seeking to brief the righthonorable member for Barton to appear in their defence? If so, and having regard to the possibility that the right honorable member might feel obliged to accept their invitation, can the Minister assure the House that no impediment whatever will be placed in the way of the right honorable gentleman should he desire to leave Australia for that purpose?

Mr HOLT:
LP

– I assure the honorable member that the Government will not place any obstacle in the way of the right honorable member for Barton if he wishes to leave Australia. However, I gather from press reports that so far from being able to make his services available to Communists in the United States of America, the right honorable member is fully engaged at present in assisting Communists in Australia.

page 2548

QUESTION

POULTRY

Mr GRAYDEN:
SWAN, WESTERN AUSTRALIA

– I ask the Minister ““for Commerce and Agriculture whether the Bureau of Agricultural Economics recently conducted an investigation into the poultry industry? If so, will he consider making the bureau’s report on that matter available to poultry farmers?

Mr McEWEN:
CP

– I understand that the Bureau of Agricultural Economics recently completed one of its periodical re-surveys of the poultry industry. Its investigation was not in the nature of a basic survey of costs, but of price movements in relation to the basic survey that it made several years ago. I shall ascertain when the information that the honorable member has sought can be made available. However, I understand that a proposal will probably be submitted to me in the near future that the bureau should conduct another and more general survey of the poultry industry.

page 2548

QUESTION

PRICES CONTROL

Mr WARD:

– Can the Treasurer say whether it is a fact that the agreement between the Australian Government and the State governments under which the former reimburses the States in respect of costs that they incur in continuing prices control has been renewed? If so, has the agreement been renewed in its original terms ; and has the same arrangement been made with each of the States ?

Mr FADDEN:
CP

– Legislation will be introduced in the very near future for the purpose of renewing the agreement to which the honorable member has referred. It is proposed that reimburse ment of the cost of prices control will be made on the basis laid down in the original agreement. Details have yet to be worked out as the result of a conference that was held recently with, the States on this subject. I shall make available to the honorable member as soon as possible the information which he has sought.

page 2548

QUESTION

DRIED FRUITS

Mr TURNBULL:
MALLEE, VICTORIA

– Has the Minister for Commerce and Agriculture yet received the report of the Bureau of Agricultural Economics on its recent survey of the dried fruits industry? If not, when does he expect to receive the report? If he has received it, when does he propose to give to representatives of the dried fruits industry an opportunity to peruse it ?

Mr McEWEN:
CP

– At the request of the honorable member for Mallee, I visited the Mildura area, which is the centre of his electorate, early this year in order to ascertain the problems that confront growers of dried fruits in that district. As the result of that visit, I arranged for the Bureau of Agricultural Economics to make a detailed survey of the economics of the industry. That survey has just been completed, and I have received the .bureau’s preliminary report. I hope to present it to the Government within a week or so and subsequently to release it to the industry and to the State governments that are directly interested in it.

Mr Leslie:

– Including Western Australia ?

Mr McEWEN:

– Yes.

page 2548

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– Now that a decision has been made to establish citizen air force unit9 in various country centres throughout Australia, will the Minister for Air indicate when that system will come into operation ? Will he inform me of the arrangements which are being made to give flying instruction to recruits? How many hours of flying time a year will each trainee pilot be expected to complete? What type of trainer aircraft will be used? Will arrangements be made to provide suitable accommodation for trainer aircraft stationed permanently in a district where there is a civil aviation aerodrome but no Royal Australian Air Force hangar?

Mr WHITE:
LP

– The plan to which the honorable member has referred is in operation. There are city fighter squadrons at Brisbane, Sydney, Melbourne and Perth, and one is in prospect for Adelaide. Country flights are being established, and recruiting is proceeding at various provincial centres in the States. The training in the first instance will be undertaken through the medium of aero clubs, and the necessary contracts have been prepared. Each pupil will have approximately 50 hours of flying time. Tiger Moths will be used for the preliminary training of recruits by the aero clubs, and, subsequently, Wirraways and Mustangs will be used for the Royal Australian Air Force training. The honorable gentleman also referred to the provision of accommodation for trainer aircraft. Wherever new flights are being formed in country towns, the hangars are in existence.

page 2549

QUESTION

PACIFIC PACT

Mr HANDBY:
KINGSTON, SOUTH AUSTRALIA

– I desire to address a question to the Prime Minister. Current events in the Pacific area make it urgently necessary for Australia to initiate negotiations for a Pacific defence pact with countries the interests of which are similar to our own. The Minister for External Affairs has returned to Australia and will, no doubt, make a statement to the House on that subject. Can the Prime Minister indicate when that statement will be made, and whether the House will be given an opportunity to discuss it before the Christmas recess?

Mr MENZIES:
LP

– The Minister for External Affairs returned last night, and I had a telephone conversation with him this morning. He will be in the House next week, and I have no doubt that he will endeavour to make a statement on international affairs at the earliest possible moment.

Mr Handby:

– Will honorable members be given an opportunity to discuss it?

Mr MENZIES:

– I hope so, but that matter will necessarily be affected by some other circumstances.

page 2549

THE PARLIAMENT

Broadcasting of Proceedings: Report of Committee

Mr DEPUTY SPEAKER (Mr Adermann:
FISHER, QUEENSLAND

– I present the fifth report of the Joint Committee on the Broadcasting of Parliamentary Proceedings, which reads as follows : -

The Joint Committee on the Broadcasting of Parliamentary Proceedings submits the Fifth Report for presentation to each House of the Parliament and recommends its adoption.

The Joint Committee has further considered the general principles upon which there should be determined the days upon which and the periods during which the proceedings of the Senate and the House of Representatives shall be broadcast, which were specified in previous reports by the Joint Committee and were adopted by both Houses. Inaccordance with section 12 (1.) of the Parliamentary Proceedings Broadcasting Act 1946, the Joint Committee has now resolved that sub-paragraph (a) of paragraph (4.) of the general principles, viz.: - “ (4) Re-broadcast of questions and answers -

Within the limits of time available, the following Parliamentary Proceedings shall be re-broadcast by the Australian Broadcasting Commission between 7.20 p.m. and 7.55 p.m. on each sitting day -

Senate proceedings - Questions without notice and on notice and answers thereto;

House of Representatives proceedings - Questions without notice and answers thereto.”, be amended as follows: -

Omit “ between 7.20 p.m. and 7.55 p.m.”, insert “between 7.25 p.m. and 8 p.m.”.

It is proposed that this amendment shall come into operation on the 11th December, 1950.

This recommendation of the joint committee provides for an alteration in the time forthe re-broadcasting of questions and answers.

The Australian Broadcasting Commission has been required by general prin ciple (4) (a) to re-broadcast questions and answers between 7.20 p.m. and 7.55 p.m. on each sitting day. In practice, the commission has included ashort summary in this period, but at the same time has continued the re-broadcast until approximately 8 p.m. The commission has now requested that the specified period for the re-broadcast be changed to 7.25 p.m. to 8 p.m. The joint committee has agreed to the proposal and the adoption of the report is accordingly recommended.

Motion (by Mr. Menzies) - by leave - proposed.

That the report be adopted.

Debate (on motion by Mr. Chifley) adjourned.

page 2550

COMMONWEALTH OFFICES, HOBART

Report on Public Works Committee.

Mr CASEY:
Minister for National Development and Minister for Works and Housing · La Trobe · LP

– I move -

That, in accordance with the provisions of the Commonwealth Public Works Committee Act 1913-1-947, it is expedient to carry out the following proposed work, which was referred to the Parliamentary Standing Committee on Public Works, and on which the committee has duly reported to this House the results of its investigations, namely: - Erection of an office building to house Commonwealth departments in Hobart.

On the 20th October, 1949, this House received the report of the committee. In its recommendations, the committee, inter aiia’, made specific reference to certain planning aspects, viz. : - (1) That the two light areas shown in the plans examined by the committee should be eliminated and adequate artificial ventilation and lighting be provided in lieu of that which would have been given by the light areas ; (2) that the use of electricity instead of fuel oil for heating should be further investigated; and (3) that requirements for sewerage installation should be discussed with the city authorities. The action taken in regard to the above recommendation is as follows . - 1. The elimination of the light areas will be incorporated in amended plans. The additional space thus gained will be approximately 3S,000 square feet. The increased estimated cost of these alterations is £82,060. which will make the total cost of the proposal £891,100 as against £809,040, the cost of the scheme first submitted to the committee. As the above figures are based on estimates prepared in May, 1949, the whole project, including the modifications recommended by the committee, has been re-estimated to cost £1,032,800 on current prices of labour and materials. .9. Further investigation of the use of electricity instead of fuel’ oil for heating has disclosed that although electrical thermal storage would beslightly more expensive than oil-fired boilers in capital cost, a small saving in yearly fuel costs, operating costs, &c.,. renders electric thermal storage moreeconomic, and it is proposed to proceed with this type of heating even although it results in some loss of space. 3. In regard to sewerage, reconsideration of the proposal, in conjunction with officers of the Hobart City Council, indicates that, subject to some minor amendments,, the requirements will be fully met, as planned.

I concur in the committee’s decisions, and recommend to this House that approval be given to proceed with the building at an estimated cost of £1,032,800. Approval by the Parliament would allow plans and designs to proceed as staff becomes available. The matter of commencing construction will again be considered when plans have been completed.

Mr CALWELL:
Melbourne

– I should like to cross-examine the Minister for Works and Housing (Mr. Casey) on this proposal. In the concluding part of the statement that he has just made to the House he said that the erection of the proposed office building in Hobart would proceed when staff became available and that the Parliament would again be told about the Government’s proposals when the plans for the building have been prepared. It seems to me that the Parliament is not being told sufficient about the Government’s intentions. Does the Minister really intend to proceed with the erection of the building, or has the project been included in the list of works that will be set aside because of the 20 per cent, over-all reduction of Commonwealth expenditure which the right honorable gentleman informed us recently was necessary in order to control the present inflationary trend? I think that the construction of the proposed building at Hobart is necessary and should be proceeded with. In fact, the erection of buildings for the use of federal members is necessary and, indeed; overdue in all capital cities. If I might digress for a moment, I remind honorable members that the construction of a block of offices to extend CornCommonwealth offices in Brisbane was authorized some time ago, and that work should proceed. The point that I desire to make now is that honorable members from Queensland who use the Commonwealth offices in Brisbane enjoy much better office accommodation than that provided for honorable members from Victoria, who have to use obsolete and illconditioned premises in Melbourne. In Adelaide members of the Parliament have to depend on the hospitality of the South Australian Government because office accommodation is provided for them by the State Government. The accommodation for honorable members in Western Australia is reasonably good, but it could be improved.

Mr Hamilton:

– The honorable gentleman cannot have visited. Perth lately.

Mr CALWELL:

– I merely said that the accommodation was reasonably good, but that it could be improved. The number of members of the Parliament has been increased considerably, and those who represent Tasmanian electorates or who visit Hobart have great difficulty in obtaining office accommodation there. I suggest to the Minister that instead of making a perfunctory report to the Parliament, accompanied by a mental reservation that the work will not be proceeded with during the current financial year, or, perhaps, even during the next financial year, he should confront the problem boldly and provide reasonable accommodation for honorable members in all capital cities, so that members of the Parliament can more adequately discharge their obligations to their electors.

Mr Haworth:

– But the honorable member refused a request for the provision of such accommodation when he was in office last year.

Mr CALWELL:

– I did not refuse any such request. I believe in doing things in a very big way, and that is why the Chifley Government bought nine acres of land in Melbourne in order to provide 2,000,000 square feet of space for federal members as well as for departments.

Mr DEPUTY SPEAKER:

-Order! This discussion is outside the scope oi the motion.

Mr CALWELL:

– I assure the honorable member for Isaacs (Mr. Haworth), who was not a member of the Parliament last year–

Mr DEPUTY SPEAKER:

– I have ruled that the discussion is outside the scope of the motion.

Mr CALWELL:

– But I emphasize that I did not refuse any such request last year. I shall be glad if the Minister will give an assurance that the work and all other works of a similar kind will be commenced this year.

Mr CASEY:
Minister for National Development and Minister for Works and Housing · La Trobe · LP

– in reply - In order to inform the honorable member for Melbourne (Mr. Calwell) of a few facts of which apparently he is not aware-

Mr Calwell:

– But of which I am entitled to be aware.

Mr CASEY:

– Certainly, but I am astonished that the honorable gentleman is not aware of them. I shall endeavour to the best of my ability in a short time to lighten his darkness. As I have said previously, and as countless other citizens are aware, Australia has vastly more work to be clone than can be currently accomplished.

Mr Calwell:

– That is not agreed.

Mr CASEY:

– The Government has four or five times as much building work to perform as can be carried out during this financial year. The reason for that situation is to be found in the shortages of skilled professional and other manpower, of materials and of money.

Mr Calwell:

– There is no shortage of money.

Mr CASEY:

– Apparently that is the current catch-cry of members of the Labour party.

Mr Calwell:

– There never was a shortage of money.

Mr CASEY:

– I suggest that all of the shortages that I have mentioned are acute. This is a building project, but building in Australia to-day is primarily a matter of housing. The Government of which the honorable member for Melbourne was such a conspicuous ornament-

Mr Calwell:

– Hear, hear!

Mr CASEY:

– The word “ ornament “ is all-embracing and is not entirely confined to the decorative sense.

Prior to World War II., the percentage of building work in Australia that was represented by projects other than house construction was of considerable magnitude. According to my memory, it was between 30 per cent, and 40 per cent, of the total volume of building work. Housing has since become all-important because of the shortage of accommodation, and the result is that a disproportionate measure of our total building activities is now being devoted to house construction at the expense of the building of structures other than houses. In other words, the building of post offices, other government buildings,- hospitals and all institutional work other than housing is very greatly behind-hand. The Government considers that the prime necessity is that of building houses for the people. Other building work had slipped back even when the honorable member for Melbourne was a Minister. The project that we are now considering is a £1,000,000 building. If it were to be proceeded with at once, practically all other building work of any consequence in southern Tasmania would have to cease.

Mr Calwell:

– Could not the building be erected in sections?

Mr CASEY:

– No. The job must be done as a whole.

There is a shortage of architects and other technical officers whose services are essential to the preparation of complete designs for the building. Only outline sketches were prepared in the first place in order that the Public Works Committee could study the project and make critical and constructive comments and in order that certain costing calculations could be made. The detailed designs remain to be completed, and that work will occupy many thousands of architecthours. The Department of Works and Housing has not a large staff of architects, and, in fact, some of its work is done by outside architects. All government works have to be placed in some reasonable order of priority. Times have changed since the honorable member for Melbourne was in office, and a whole series of additional complications has arisen. Works required for the national training scheme, for other defence plans and for the immigration scheme are being expedited and they require a much larger percentage of the Government’s works effort than has previously been required in time of peace. I assure the honorable member and the House that the project that we are now considering will be proceeded with as soon as is reasonably possible, consistent with the demands of the more urgent national tasks that confront the Government.

Mr Calwell:

– That means in the sweet by-and-by.

Mr CASEY:

– No. It means that it is extremely unlikely that work will be begun on the site of the proposed building during the current financial year. However, the designing work will proceed at once and the project will be placed in its proper order of importance with the other manifold works for which the Government is responsible. I commend the project to the House.

Question resolved in the affirmative.

page 2552

WOOL SALES DEDUCTION (ADMINISTRATION) BILL 1950

Second Reading

Debate resumed from the 14th November (vide page 2470), on motion by Mr. Fadden -

That the hill he now read a second time.

Mr MACKINNON:
Wannon

– The debate on this measure has covered a wide range of subjects and I consider that, in order to bring it back into its proper perspective, we should analyse the necessities for what might be deemed to be a rather novel form of finance. When this Government took office, the inflationary trend was well under way as the result of the prevalence of high incomes and general shortages of both locally manufactured and imported goods. This situation has been seriously aggravated by events in Korea and other parts of the world and the threat to world peace that those events have involved. The Government has three main problems to solve in order that our national security can be assured. I propose to deal very briefly with those points because I consider them to be most pertinent to a proper consideration of legislation of this nature., At such a time as the present we must direct a great deal of our attention to defence preparations, and we must be prepared, not only to play our part as a member of the United Nations, but also to put ourselves in a position to co-operate fully in mutual defence measures with Great Britain, the United States and the other western democracies. We should realize that, even with the great increase of expenditure on defence that has been provided in the current budget, we are still a long way behind the per capita financial effort that is being made by Great Britain and America in relation to defence. Australia has come of age and must be prepared to accept the responsibility of providing in larger measure for its own defence, instead of expecting America to protect it in the event of a war. Adequate defence of our continent entails an increase of population, and that brings me to the second of my three points. The Government is continuing to carry out the vigorous immigration policy that was initiated by the former Minister for Immigration (Mr. Calwell). It realizes that we cannot hope to justify our tenure of this vast continent if we are content to allow our population to remain relatively insignificant in number. The third point that nobody can dispute is the necessity for national development to enable us to maintain the increased population that our defence needs make necessary.

These three problems are closely related to our defence and have assumed greater urgency because of the pressure of world events in the last nine months. The solution of them will impose a terrific pressure on our inflated economy, and, although in the long run the position will right itself, we now face an interim period of inflation that has been further aggravated by the recent decision of the Commonwealth Arbitration Court to increase the basic wage by fi a week. Unless that increase is accompanied by a corresponding effort on the part of both manage ment and labour to lower prices by more efficient production, it can have only one effect on our general price structure. The abundance of money in the hands of the earning section of the community has been increased by the high prices obtained for wool in the 1949-50 series of wool sales, the financial return from which was about £300,000,000. It is reasonable to expect that on the basis of present price levels we shall receive not less than £500,000,000 for our wool in the current year. In fact, I believe that the return will exceed £550,000,000, which is the equivalent of eleven times the value of a pre-war clip. It is easy to see the effect that such an acquisition of wealth will have on the spending power of the community. The amount of money, coming into an already inflated economy, can have only one effect, which will be to put further pressure on price levels.

Provision has been made in the budget for an expenditure on defence, out of revenue, of £133,000,000, or £79,000,000 more than was provided in the previous budget. Included in that large sum is about £50,000,000 to be devoted to the strategic stock-piling of war materials. In all likelihood the expenditure on stockpiling will be a non-recurring charge. The budget also makes provision for the disbursement of £67,000,000 in payment of the war gratuity, which is also a nonrecurring charge. I believe that those non-recurring charges could justifiably have been included in loan expenditure. As it is, we are meeting capital charges out of revenue. Income tax derived from the present high prices of wool would not normally be received until 1952 at the earliest. I should like honorable members to realize that fact, because it has been said that income tax could be used to finance the activities on which the Government proposes to expend the £103,000,000 to be collected under this measure. The alternatives to finding that sum of £103,000,000 out of income tax are to borrow it by means of loans, to get it by the issue of treasury-bills, or to obtain it through an increase of taxation, and leave the wool-growers with the whole of their increment until 1952, when they would normally pay tax upon it, and when they might possibly find themselves seriously embarrassed because their incomes might then be much lower than they are now.

The Leader of the Opposition (Mr. Chifley) has suggested that the charges that this measure is designed to finance could be met out of loan funds. He pointed out, I consider quite rightly, that the withdrawal of money from circulation by means of a loan would have a deflationary effect on our economy. But the amount of money that can be raised by public loans is limited by the ability of the public to subscribe to such loans. It is estimated that the amount of £160,000,000, which it is already proposed to borrow in this financial year, is the limit that the loan market can absorb. I regard the raising of revenue by the issue of treasurybills as a most inflationary form of finance. We do not wish to adopt the method of increased taxation because we believe that it would have the effect of discouraging production. The method of financing commitment that is provided under this measure has been described at novel, and it has been contended that the collection of income tax in advance must have a prejudicial effect on our future economy. I point out, however, that by using this method of finance we are obviating the necessity to borrow money to finance our immediate needs. This measure will have a deflationary effect because it will obviously reduce the amount of money that is loose in the community by £103,000,000. I am satisfied from figures that I have seen that the collection in advance of that amount will not prejudice the general income tax position of the year 1952, when the wool-growers would normally pay tax on this year’s income, because it is obvious that the amount of money still remaining in the hands of wool-growers this year, after they have paid the £103,000,000, will be at least equivalent to the amount on which ordinary income tax would be collected in this financial year. That is a point that should be borne in mind when we are considering this measure.

I do not believe that the system of collection of revenue provided by the bill could be continued for two years except under the most abnormal conditions, because it is obvious that payments of provisional tax by the wool-growers will provide the necessary revenue. It is also impossible to derive the same tax twice. At the same time we must be realistic. If there were an increase of wool prices next year equivalent to the rise this year it would be possible to implement a deduction of this nature again. It has been suggested that the proposed deduction is, in fact, a compulsory interest-free loan. I think that that argument is justified in the light of present taxation law. At the same time, we must realize that because of the enormous increase of the financial returns being received by woolgrowers, it can easily be proved that the prepayment of taxes on this basis will not be so disastrous in its effect as it might otherwise be. Almost all wool-growers except very small ones pay a provisional income tax and social services contribution, and while their incomes were fairly level each year the provisional tax paid was reasonably related to their actual income. They were in a similar position to that of wage and salary earners on the pay-as-you-earn system. Where there was no violent fluctuation of income, due to some of it having been received from sources other than wool-growing, the provisional tax paid was a reasonable anticipation of the amount that the wool-grower would be liable to pay in respect of the current year. However, incomes from wool production during the last two seasons have increased to a degree that no form of provisional tax could anticipate. As : result, no wool-grower except perhaps those operating in a very small way, could possibly have made a return based on the years 1948-49 or 1949-50 which would be in any way related to the actual income that he appears certain to receive duringthe present selling season. It is obvious that had wool prices been at their present level in the 1948-49 series of sales th’ provisional tax paid by the wool-growers would approximate their current tax liabilities. This bears out my contention that unless the price of wool has another meteoric rise during the next selling season it will not be practicable to continue the deductions after one year. Therefore, there is some justification for saying that the deduction does temporarily put the wool-grower who has been paying tax in the past on the same basis of taxation as that of most other taxpayers in the community.

I shall point out the disabilities that exist in other primary industries, but do not apply to the wool industry. The wool industry is the only primary exporting industry that has enjoyed complete freedom in the disposal of its product in the world market and has made no contribution to the cheapening of its product to the home consumer. It is estimated that the differential rate between export and home consumption prices for wheat is costing the wheatgrowers approximately £25,000,000 annually. The sugar-growers contribute about £2,000,000 annually towards the cost of cheapening their product on the local market. The lead, zinc, copper and tin producers contribute approximately £6,000,000 per annum. The cattle man, because of the differential rate and the price he receives for his hides and tallow, provides approximately £12,000,000 per annum. The dairy-farmer also sells his product more cheaply, but as there is no relative world price for butter it is impossible to calculate exactly what contribution he makes. I do not intend to argue against the contention that because the deduction is to be at a flat rate it will press more heavily on some - perhaps on the smaller producers - than on others, but it is hard to determine to-day who is a small man. The man with 30 bales of reasonable quality merino or crossbred wool will receive, at present prices, not less than £4,500 for his clip. I do not think we can call a man with an income of approximately £4,000 a year a small man. It must be realized further that if an income of that size i9 received the income tax payable on it must be substantial. Let us consider the case of a man who produces eighteen bales of wool. That quantity will realize, conservatively, £2,500. The deduction of 20 per cent, will amount to £500. Let us assume that that man would normally sell his wool during February of this coming year. Normally he would pay his income tax in June, 1952. That man will be without the use of that £500 for seventeen months. If we assume that he has been paying interest on that money at the rate of 4$ per cent., the retention of it by the Government will cost him not more than £31 7s. 6d. Do not let us have any cant about extra tax. I believe that honorable members will agree that, under the worst conditions, all that the deduction will cost the man who receives £2,500 for his wool is £31 7s. 6d.

I was considerably concerned about the hardship that might be caused, but I believe that the amendments that are to be made to the bill and its liberal administration will obviate such a possibility. I do not anticipate that it is intended that a producer shall have to establish extreme financial, embarrassment. Necessary expenditure on the upkeep and improvement of his property will be taken into account. Under clause 11 protection is given to wool-growers whose deduction will be greater than their tax liability. It is provided that application may be made to the Taxation Commissioner or to a Land Valuation1 Board for the consideration of special cases. I believe that that provision will cover the difficulty if it is administered in a liberal manner. I have been told by accountants that cases of disputed provisional tax are dealt with promptly and that there is no reason to believe that applications under this clause will not be dealt with in the same way. I have a personal interest in exsoldier settlers because there is a large number of them in my electorate but 1 believe that their interests can be safeguarded by the authorities that control the settlement schemes. Those authorities will be in the best position to know whether the settlers will be seriously embarrassed by this deduction.

Seasonal conditions in the south-west of Victoria, and particularly in the electorate of Wannon that I have the privilege to represent, during the autumn and winter of this year have been exceptionally unfavorable and in certain areas the difficulties of the settlers have been aggravated by the activities of grass grubs. This is a serious problem. These influences have, in many cases, caused a sharp reduction of the volume, of wool production. I have received estimated which indicate that there will be a serious decrease of production. I believe that 60 per cent, of last year’s production is all that can be expected in many cases. I intend to make it my business to give full assistance to growers in my electorate who, due to financial and seasonal conditions, wish to avail themselves of the concessions provided for in clause 11 of the bill. A deduction of this nature cannot have a perfect result, but it is a genuine, if unpopular, attempt by the Government, in the interest of the community, to deal with the immediate problem to which high wool prices give rise. The growers should realize that the most that they will lose will be the interest on their deduction for about eighteen months. They can also consider the fact that the budget makes provision for a subsidy of £20,000,000 out of revenue to cheapen the cost of their product to their fellow Australians. T believe that the wool-growers will accept this deduction in the spirit in which it is being made. It is the intention that the need for the continuance of this deduction shall be reviewed annually, but a limit to the amount of the deduction will be fixed by an amendment that will be made when the bill is before the committee. The most honest member on the opposite side of the House, the honorable member for Port Adelaide (Mr. Thompson), unlike his colleagues, had the decency to say that he did not intend te shed any crocodile tears on behalf of the wool-growers. His colleague, the honorable member for East Sydney (Mr. Ward), in a speech on the second reading of the Wool (Contributory Charge) Bill 1950 clearly expressed his own views, and also, I believe, the views of a large number of honorable members opposite. Because they are the views of a section of the’ Opposition they should be of interest to wool-growers. The honorable member said on the 15th June, 1950, as reported at page 4451 of Hansard -

The Australian buyer should not be asked to pay higher prices for woollen clothing merely in Order that those engaged in the woolgrowing industry shall receive increased incomes.

U page 4452 he is further reported to have said -

I rose principally to direct attention to the need for the establishment of a homeconsumption price for wool. . . . Those who are engaged in the primary industries of this country, particularly in the export industries, are now enjoying a period of unprecedented prosperity. The high incomes that they receive as a result of the existing high prices of their products in the markets of the world tend to accentuate the inflationary spiral.

In the light of those words let honorable members opposite not indulge in any humbug about this matter. The coneluding remarks of the honorable member for East Sydney on this subject included the following enlightening sentence : -

Those who are engaged in our export industries are well able to bear the expense of financing such a .plan as this.

The plan referred to was the homeconsumption price plan for primary products, particularly wool. I suggest that those growers who may be concerned over this measure should carefully study the remarks of certain honorable members opposite in their relation to other primary industry measures before they filially arrive at a conclusion about the Opposition’s “synthetic sympathy” - an expression used in your own speech, Mr. Acting Deputy Speaker - in connexion with this measure.

Mr HAYLEN:
Parkes

.-! rise, not as a wool-grower, but as a member of this House who has a sense of justice. Perhaps the Government may be deficient in the qualities of justice and humour, but on this side of the House there is an abundance of both. I do not apologize for taking up the cudgels on behalf of the underprivileged section of the wool-growers of our community. They are the people who are not making tiwi great fortunes which hit the headlines in our daily press. Throughout my speech I intend to try to restore to the debate the common sense that has been driven out of it by irrelevant remarks which really apply to a subject other than this wool tax. I shall take no notice of interjections from honorable members of the Australian Country party who will uo doubt ask, as they have asked of other honorable members on this side of the House who have spoken on the wool plan, “ How much wool do you grow ? “ I suggest that the wool grown by honorable members of the Australian Country party is enough merely to pull the wool over the eyes of the authentic wool-growers. Having examined this discriminatory legislation I arrived at the conclusion that it is the outcome of coalition, compromise and cowardice. It has nothing to do with the harsh measures that must be taken to cure the disease of inflation. It is the result of divergent opinions among the government parties. It is a compromise between devaluation of the Australian £1 and the imposition of ii discriminatory tax and it is the outcome of cowardice to face up to the issues involved. According to press reports the Australian Country party is having difficulty at the present time with its own supporters. Being a sectional party the country will want to know what section it really represents now that it has acquiesced in the introduction of this inquitous measure. Honorable members of the Australian Country party admit that they are in this House to support the graziers and the countrymen, but in order to continue to be a part of a coalition government they put aside their principles.

A very extraordinary feature of this debate is the apologia made by the Government for arriving at conclusions that we, on this side of the House, arrived at long, ago. The Minister for Defence (Mr. McBride) was spurred by the speech of the honorable member for Eden-Monaro (Mr. Eraser) to rise and say that the reasons why this bill has been introduced are not the reasons given by the Treasurer (Mr. Fadden). He said that the Treasury was extraordinarily bare and that this. money was needed to balance the budget. Why did not the Government say that to the wool-growers instead of saying that the money was required to act as a curb on the inflationary spiral. The grazier does not understand the inflationary spiral, perhaps he does not want to understand economics, but he certainly understands the position when he is told that he is made the victim of expediency in order that the budget may be balanced. Outside the House the Government avers that because of the extreme buoyancy of the wool market the graziers must become the victims of a discriminatory tax. Inside the House we are told that when the

Government assumed office the Treasury was empty and that this money is required for administration purposes. As the honorable member for Grayndler (Mr. Daly) said, the Government is the victim of its own propaganda. When the governing parties contested the last general election, a part of their propaganda was that the Treasury was filled with money; that all the trust funds and cash boxes were filled and that the carpets on the floor were bulging with the money that had been stuffed under them. All those things were a figurement of the imagination of the Liberal party’s publicity agents. There is not much validity in the argument for the imposition of a discriminatory tax on the graziers. The Treasurer said that £67,000,000 had to be found to pay war gratuities. The records submitted by him show that £37,000,000 of that sum is at present available. It was said that £50,000,000 had to be found for the stock-piling of essential materials. That was an extraordinary thing to say, that the requirement of that £50,000,000 is one of the reasons why graziers as a section should be taxed in advance. Stock-piling is a slow and steady process. The fact about stock-piling is that it is an admission that the capitalistic system proceeds by a series of booms and bursts. When a burst can be seen on the horizon the same thing must be done as was done by Hitler and other rabble rousers, namely, prepare for war.

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– That is merely socialism.

Mr HAYLEN:

– Of course it is. I am a socialist and I am. glad that I am when I hear the well-bred insults of the honorable member for Hume (Mr. Charles Anderson). The provision of £50,000,000 for stock-piling is a warning that another war is coming, -and it is also an indication that the crippled old capitalistic system cannot keep going without socialistic plasters. I venture to say that eventually we shall place such a plaster on the honorable member for Hume.

Full of fire and energy and with a specially prepared, pruned and organized set of figures, the Postmaster-General (Mr. Anthony), in his second argument, proved exactly what the Opposition has been saying. He cited the case of a wool-grower with 2,000 sheep. Bovrilizing his statement, he said, in effect, that such a grower in 1949-50 had an income of £3,750 on which he paid tax amounting to £1,650, after which he had a net income of £2,400. Then, manipulating certain figures relating to tax rebate and tax paid in advance he stated that under the Government’s wool plan a similar grower would receive £7,301 and after paying tax amounting to £2,516 would have a net income of £4,785. The Minister’s own figures show that the measure is utterly useless as a means of curbing inflation. The truth is that the Government has not introduced it for that purpose at all. The bill is a piece of Treasury jiggery-pokery that will not achieve any worthwhile objective. The Postmaster-General said that this proposal must be examined in relation to the circumstances of the real farmer. He did not attempt to present any analysis of it in relation to the small woolgrower. The justification or otherwise of a discriminatory tax is to be judged by how it will impinge upon the income of the small man. The honorable member for Lalor (Mr. Pollard), who was formerly Minister for Commerce and Agriculture, drove home that point very effectively. He demonstrated that the man who for years has been living on the breadline will be tragically affected by this proposal to draw off 20 per cent, of his income at its source because, consequently, he will have to discard plan3 that he had made in the expectation of receiving high prices for his wool. That is the issue at stake in this matter.

However, the Government is not concerned about how its proposal will affect the man with, say, 500 sheep of medium quality. As on present wool prices he could expect that his income would be increased to £1,600 he would have made his plans for the future in the expectation of receiving all of that income. Having regard to the variations of price levels of wool in the past he has had every reason to plan well ahead. Those variations emphasize the disabilities that con- front the small man, the struggler who has always been on the edge of the big money but has never actually obtained it. Yet when the industry receives this sudden godsend and the small man makes his plans accordingly the Government proposes to cream off his additional income and thus nullify them. With the permission of honorable members I shall incorporate in Hansard the following figures relating to variations of wool prices: -

I urge honorable members to study those figures in relation to the small man who has, say 5.00 sheep. He is not the wishbone of the Australian Country party, but the struggler and battler who is the backbone of the nation’s production. His political representatives may be much f atter than he is, but his claims in respect of this proposal evoke my interest. It is estimated that a grower with 500 sheepwill receive an income of £1,600 from the sale of his wool at present prices. Naturally, he has planned for the future on that basis, because he has been educated over the years to realize that he cannot mine the land forever, or expect that thecorn will always grow tall. He knows that there will he more droughts and that he -will be confronted with many disabilities. How many small growers have been dispossessed of their properties because in bad seasons they have overstocked their land in order to pay off their mortgages and earn a .livelihood for their families ? The small man may have dreamed of being able permanently to settle on the land. He may have dreamed of conserving sufficient fodder to help him over had times until he could improve his pastures. No doubt, many small men dreamt such dreams when they saw the price levels of wool rising as they have risen during recent years. Consequently, it will come as a blow to them when the Government creams off the additional income that they expected to receive.

Let us look at some of the commitments that confront the average small wool.grower. Light tractors, which are still in short supply, cost approximately £500 each, a hay-baler £280, a rake £45 and a mower £150.

Mr Fadden:

– Are those costs incurred by a man who has ‘500 sheep 1

Mr HAYLEN:

– Just as the Treasurer (Mr. Fadden) occasionally gives water to his treasury stock, so must wool-growers provide water for their stock. The additional income *hat they would have derived from increased prices for wool, and which makes the mouths of the Treasurer and his colleagues water would have enabled the small man to improve his property permanently. After all, their increased income may be only temporary. But all districts are not enjoying bounteous seasons. This impost will fall most heavily upon the small men, who compose 70 per cent, of the wool producers, and they will be the least able to bear it. That is why members of the Australian Country party in this House are shifting like sheep in the corrals. What -effect will this proposal have upon the small man who is supposed to have both his pockets lined and to be able to buy the costliest motor cars at the drop of a hat? It will drive him, probably where it is designed to drive him, back to the banks to borrow money. Figures that were .presented to the Parliament before -the Chifley Government left office showed that the greatest majority of small primary producers had paid off their mortgages, that they were absolutely free men who owed no money at all to financial institutions. The small man will not be able, as he anticipated he would be, to improve his property. Yet, supporters of the Government never cease to bemoan the drift of population to the cities. Even though the proposed deductions will be made as prepayment of income tax, the withholding of such money from the small man will prevent him from making improvements to his property. He will be driven back to the banks, and if wool prices fall he will soon find that once again he is not the owner of his property. Supporters of the Government cannot refute that argument. Of course, the Government claims that clause 11 of the bill will make it easy for graziers, who would suffer hardship if they were compelled to pay the wool tax, to appeal to the Commissioner of Taxation for relief ; but it has been pointed out that many of the small wool-growers who, after all, constitute 70 per cent, of the total number of wool-growers in Australia, pay less income tax than the amount represented by the wool sales deduction, and, consequently, rebates and other concessions will be granted. Yet I recall that this Government spoke earlier of making private enterprise run smoothly. It was to be geared on a velvet cord, as it were. and was to rush along, as fluid as treacle. What has happened? Fourteen boards are to be appointed to decide, in effect, whether the Government will be taking too much of the wool-growers’ money by way of the wool sales deduction. Will those boards be conducive to the smooth running of the wool industry? Graziers will have to trek to the nearest town for the purpose of submitting their cases for relief, and much valuable time may be wasted in argument and investigation. The honorable member for Mallee (Mr. Turnbull) bewailed the fact that a post office had not been built in his particular paddock. Obviously, the honorable mem ber does not know his Euclid. You cannot have two propositions imposing on one another. If you have a paddock, you cannot have a post office, because the two things cannot go together, unless you have a paddock full of post offices.

Fourteen boards are to be appointed to listen to the wool-growers’ troubles and tales of hardship. The small woolgrowers will rush to the nearest town with a view to obtaining relief from the iniquitous and discriminatory wool tax. The Government has made a plea to the community to increase production. It says, “ We want more wool, and more primary products generally “. The small wool-growers cannot afford to absent themselves from their properties for the time that may be occupied in arguing their cases before Commonwealth boards. They have to earn, their living. Yet, under this bill, a small wool-grower who wishes to obtain relief from the wool tax will have to go to town and argue his case before one of the fourteen boards. This Government announced, as a matter of policy, that it would reduce the number of Commonwealth boards. The Opposition is attempting, successfully to date, to assist it to give effect to that policy by refusing to allow the re-establishment of the Commonwealth Bank Board.

I shall ask the Treasurer, who, by his own admission, is a wizard at this game, some questions about this socalled loose money that he proposes to collect from the wool-growers. It may be in the possession of wool-growers in the top brackets of that industry, although their incomes are subject to income tax at the rate of 15s. in the £1. If money is taken from the wool-growers and is temporarily placed to one side, some indignity or disability will be imposed on the small wool-growers who, as I have already stated, constitute 70 per cent, of the woolproducers of Australia. Where is the courageous and steadfast planning that the Government promised to introduce? Full-page advertisements have been published in the metropolitan daily newspapers in all the States, urging the people to put their shoulders to the wheel and assuring them that everything will be all right because the Government will tackle national problems with courage and determination. Such a declaration is like “ a fleeting breath drifted by wind and storm “.

I invite the Treasurer to explain to the House why the Government has not taken action in respect of the so-called “ underground “ money, the “ hot “ money in the community. The woolgrower cannot be blamed for that. Is the Government aware of the various payments that a wool-grower has to make from the income that he earns by the sweat of his brow? I have a very fair analysis of those costs. I think that the Treasurer will agree that the wool-grower has to pay the following charges in order to earn the amount of his income represented by the the wool sales deduction of 20 per cent.: - Receiving, weighing and warehousing charges, sheep’s back insurance, fire insurance, commission to broker, rail freight, woolpacks, cost of producing wool and shearing, the 7^ per cent, levy, and, finally, an amount of 2s. a bale, which is paid to the Australian Wool Board to help to promote uses of wool, and to advertise it. The next full-page advertisement that is inserted by the Government in the metropolitan daily newspapers should show the effects of inflation on the wool clip. What is the Treasurer doing about that vast amount of money that lies, as it were, under the surface, and apparently cannot be collected, because it is “ black “ money? It is underground capitalism. I believe that capitalism is a game, and I am sure that I shall be corrected by the honorable member for Hume (Mr. Charles Anderson) for expressing an idea on the socialist principle of surplus values, which is a Marxian doctrine. What has happened to the money that has drifted away from legitimate capitalist ventures? Metaphorically speaking it is like an underground river, and when it seeps through to the economic topsoil, it poisons the land with surplus spending. The Government should attack, not the grazier, but the “ hot “ and “ black “ money that is lying underground. That can be done in only one way. The Government may falter, “mewl and puke” about the issue, but it will be compelled to re-introduce various economic controls in order to combat inflation. The imposition of a special tax on one section of the community for that purpose is a specious and cowardly act. The wealthy grazier, who has large interests in the big cities, can look after himself, but the interests of the small man, who will be severely affected by the wool tax are paramount with the Labour party.

One matter that I bring to the notice of the House is the swollen profits of the organizations that handle and dispose of wool. I read with interest in the financial columns of the press recently an item under the heading of “ Dalgety Augments Reserves “. The article stated -

Consolidated profit of Dalgety & Co. Ltd. and subsidiaries was £428,391 sterling for the year to June 30, compared with £244,145 for the previous year.

As the income of the wool-grower rises, so also does the income of the wool broker and the stock and station agent increase. The article continued -

Most of the increase went to reserves, which were augmented by £315,641.

Figures received by cable from London to-day (A.A.t>. ), show net earnings of £1,241,565 after depreciation, compared with previous £838,528.

Those are tremendous figures. I again ask the Treasurer to inform the House whether he has considered the various charges that will be paid by the woolgrower in order to earn the amount of the wool sales deduction, namely, receiving, weighing and warehousing charges, insurances of various kinds, commission, freight, woolpacks, costs of production and of shearing, and various levies.

Mr Pollard:

– And the provisional income tax.

Mr HAYLEN:

– That is so. When I consider the position I am filled with contempt for members of the Australian Country party who support the imposition of the wool tax. The honorable member for Mallee, who has long been devoted to the policy of rabbits and wire netting, is shivering in his shoes, because of the repercussions that the wool tax will have on his chances of re-election to this Parliament. I regret that he is not in the chamber at the moment to hear my remarks about him.

Mr Wheeler:

– He is not missing anything.

Mr HAYLEN:

– The honorable member for Mitchell (Mr. Wheeler) will be missing everything that takes place in this House after the next general election. I advise him to make the most of his opportunities now; because, my dear sir, these will be very happy memories for you. I return to my remarks about the unjustness and speciousness of the Australian Country party which, because of its very composition, is a rail-sitting political party. Its members have sold the grazier for Cabinet position. The Minister for Commerce and Agriculture (Mr. McEwen) is not in the chamber. Indeed, he is seldom in the chamber. I should have thought that he would listen with bated breath to every word in this debate, including my own remarks, because he represents many graziers. I am informed that he i3 in his office at the present time. I warn him that the quickest way for him to get out of politics is to absent himself from the chamber, and stay in his office. The best advise I can give to him is, “ Stay in the House and keep in touch with what is happening “.

I return to my attack on the Australian Country party, and its policy of railsitting. It has been a blot on the political escutcheon for many years, because it waits for the right opportunity, and sells itself for Cabinet positions and for special advantage. Eventually, because of the rottenness of its position, it sells its own supporters, as it has done in this instance by supporting the imposition of the wool sales deduction. The honorable member for Gippsland (Mr. Bowden), during the financial and economic depression of the early ‘thirties, was an almost violent advocate of social credit, but that piece of old ironbark now grumbles and rumbles in his seat as he indicates his support for the wool tax. The Australian Country party is full of lieutenant-colonels, who talk about the trials and tribulations of the grazier, and persons in other avocations. The honorable member for Mallee, I understand, is an auctioneer, and a very good one, too. But all those fellows are not, in the main, sheep men, although some of them sell sheep on the hoof, and they have failed the woolgrowers by supporting this bill. The honorable member for Riverina (Mr. Roberton) provides the classic case of the little man who has lost his way. Outside this House he was a roaring lion when he was discussing the wool sales deduction. He said, in effect, “A wool tax will not be imposed”. I shall not attempt to simulate his accent because, fortunately, I am not gifted in that way, but he declared, “ There will be no wool tax. The right of the man on the land to reap the benefits of the products of the land will be safeguarded.” The honorable member uttered all sorts of funny, feudalistic nonsense, but he sits in this chamber, with his head in his hands, because the Australian Country party has decided to support the imposition of a wool tax. The honorable gentleman sees the writing on the wall. This will be his one and only appearance in the Parliament, because he has failed the woolgrowers of the Riverina, and they will not forget it. He uses “ double talk “. He says one thing outside the chamber, and the opposite thing inside it. He roars like a lion outside the House, and he acts like, a lamb inside it. That will be his political epitaph.

Mr Wheeler:

– Did not the Labour party roar like a lion outside the Parliament about the Communist Party Dissolution Bill 1950, and act like a lamb when ordered to support it?

Mr HAYLEN:

– The Communist Party Dissolution Bill 1950 came in like a lion, and went out like a lamb. It may come in again, and go out again, before Government supporters realize what has happened. I place the honorable member for Hume in the same category as other members of the Australian Country party. He would like to express his opinions about this bill, but he must be guided by the dictates of expediency. His physical courage is not in doubt, but his political courage is not very high at the moment. The honorable member for Farrer (Mr. Fairbairn) is like Marie Antoinette in respect of this bill. Like that famous French queen, he says, “ They have no bread? Well, give them cake.” This bill is really an indication of the Government’s desperation ‘because of its failure to combat the inflationary conditions in this country. The Copland plan was examined, and rejected. Then it was re-considered, and this bill wasfinally evolved out of the conflicting ideasof the Liberal party and of the Australian Country party about the introduction of effective measures to curb inflation.. The Treasurer said that the exchange rate would be adjusted only over his dead body. Now, it appears that the contest is to be waged over the dead bodies of the graziers, or even of their sheep. For that matter, it may bewaged over the dead body of any person or animal, because the rule of political expediency still operates. Having arrived at a compromise arrangement, the twopolitical parties represented in the Government have discovered that they arenow in serious trouble with the graziers, and they are looking for the way out.. It cannot be denied that this imposition will fall desperately hard on the small’ farmer, who has been a great servant of this country. What has become of all the Australian Country party’s slogans about Australia riding to prosperity on the sheep’s back, and about the man on the land deserving every support? He is certainly not receiving any support from the present Government. Graziers whospeak to supporters of the Government tell exactly the same story as those whospeak to members of the Opposition. Theburden of that story is that all they want is “ fair dinkum “ treatment. They want to be left alone in good times as well as: in bad times to work out their own destinies. Of course, in working out theirown destinies, they are also working out the destiny of this country. The wool industry is the only industry that has not come to the Government squealing for subsidies. It has “ taken the rap “ when the “ rap “ came - and the “ rap “ was very hard, as the figures that I have cited prove. Of course, if it were really necessary to impose a penalty on one sectionof the community that was able to bear it in. order to arrest the present tragic inflation I would support the proposal. However, from the figures given by the Postmaster-General (Mr. Anthony), it is clear that the implementation of thismeasure will not have the slightest effect in the direction of arresting inflation.

Mr Pollard:

– The Government’s proposals ought to be included, with other well-known promises that it made, in a book entitled “ Up the Garden Path “.

Mr HAYLEN:

– That is so. I believe that the graziers are now marking their bales of wool for market, “ Off-shears Fadden “.

I conclude on the note that I struck at the outset of my remarks. The passage of this measure will inflict a blatant injustice on small wool-growers, and the Government’s claim that the measure is justified on the ground that it will arrest inflation is a monstrous lie. The proposal will discriminate unfairly against a section of the community. If discriminatory action is taken against a section of the community in any democracy that democracy is on the way to fascism, that is, if it has not already completely lost its democratic character. This measure is an expedient bom of terror and executed in horror, and it will end, I am sure, in the total destruction of the Australian Country party. In the long run sinners must undergo purification for their bad deeds. I hope that the present Opposition will witness the obliteration of the Australian Country party, which, after years of rail-sitting and compromising, has at last destroyed its own folk. The unfortunate people who will be victimized by this measure will certainly not forget that fact.

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– The speech of the honorable member for Parkes (Mr. Haylen) to which we have just listened was the most illogical and unconstructive that has been delivered in the course of the debate on this important measure, and I think it might be described as utter nonsense. Al the outset of my remarks I point out that during the last six months the Government has been endeavouring to bring about a double dissolution of the Parliament. Do members of the Opposition imagine that a government which wishes to precipitate a double dissolution, would deliberately seek to cause trouble by introducing such a measure ? Obviously, the Government has introduced this measure for good reasons. Although it is the duty of the Opposition to ascertain those reasons, and to criticize them if necessary, I have not heard a single constructive proposal from honorable gentlemen opposite. I propose, therefore, to endeavour to elicit and explain some of the reasons that have actuated the Government in introducing this measure.

The statement that Australia lives on the sheep’s back, and has done so for many years, has been made over and over again in the course of this debate. What does that statement mean? The figures cited by the honorable member foi1 Parkes show that our average annual income from the sale of wool was, for many years, from £50,000,000 to £60,000,000. Australia lived on that income. It passed into our national economy and Australia thrived on it. But what happened in 1930? In that year our national income from wool declined to £44,000,000, and in 1931 it declined still further to £34,000,000. In 1932 the amount received was £35,000,00. What happened then?

Mr Pollard:

– What did happen then ?

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– The depression came. The connexion between the fall of the price of wool and the occurrence of the depression is still not apparent to many honorable gentlemen opposite. The amount received from the sale of our wool has a very direct effect on Australia’s economy. In fact, our national wool cheque is the greatest generating force in our economy. Unfortunately, the Opposition does not appear to realize that fact. What happened when the overseas prices of our primary produce, including wool, fell so disastrously in 1930? We were overtaken by the depression.

Let us examine for a moment the facts connected with the sale of our wool in recent years. Of course, the Opposition is not concerned with such matters because it is pre-occupied with the problem of discovering something that it can turn to its own political advantage in the hope that it may regain the treasury bench. That is why so much nonsense has been talked by members of the Labour party during this debate. However, they cannot hope to pull the wool over the eyes of our people in this matter. In 1945-46 our income from wool was about £60,000,000. In 1947 it increased to approximately £97,000,000, which, was roughly double the sum received in prewar years. In 1948 the graziers’ aggregate income sky-rocketed to £157,000,000, and in 1949 it increased to £300,000,000. During the current year it is estimated to total from £500,000,000 to £600,000,000, which is roughly ten times as great as the normal income. Members of the Opposition have completely ignored that fact. Although the duty of a parliamentary Opposition is to protect the interests of the nation, the members of the present Opposition are completely obsessed with the desire to seize a political advantage in the hope of defeating the present Government.

I have mentioned the disastrous effect which the sudden decline of wool prices had on our economy. What will be the effect on our economy of the extraordinary increase of wool prices that has occurred ? Will the high price of wool accentuate the present inflation? Of course, the present price of wool is not the only cause of the inflation that we are experiencing, and I think that most honorable members should realize that fact. At the same time it ought to be clear that if we increase the pressure on our economy by increasing the already large volume of money in circulation without increasing production proportionately, the inevitable consequence will be an even greater inflationary trend and a further increase of prices. Every recognized ^economist in this country realizes that that is a fact and apparently the Leader of the Opposition (Mr. Chifley) is the only public man who does not acknowledge it.

The most important cause of the present inflationary trend is that more and more money is passing into circulation without a corresponding increase of production. It is clear, therefore, that a continuous rise of prices must have a most harmful effect upon our economy. Why did Professor Copland formulate his plan for the wool industry? He is an eminent economist, and he formulated that plan because he feared the impact on our economy at the present time of the circulation of a huge additional volume of money.

Opposition members interjecting,

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– Interjections do not worry me at all because I know what I am talking about.

Mr DEPUTY SPEAKER:

– Order ! Opposition members must refrain from interrupting the honorable member for Hume (Mr. Charles Anderson). The honorable gentleman is entitled to be heard.

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– The injection of huge additional sums of money into our economy must inevitably accentuate the present inflationary trend. Who is suffering most because of the present inflation? Are the wool-growers, suffering unduly ? What about that large section of the community the members of which depend for their existence on fixed incomes? I refer to those whose only income is derived from superannuation pensions, and assurance policies, and to those unfortunate people who have to depend on age, invalid and war pensions.. Amongst them are many retired public servants, and others who have worked very hard for this country in their life-time. Those are the people whom the Australian Labour party is supposed to represent. What is happening to them now? What effect will further inflation have upon them? The Opposition is not worrying, about them. It is worried, it says, about the wool-growers. Why are the members, of the Opposition professing to experience so much anxiety on account of the graziers? Obviously the reason is that they have decided to seize upon this measure as a heaven-sent opportunity to make up some of the ground they have lost in the country. By adopting such a policy they are neglecting their duty to the nation. If honorable gentlemen opposite do not realize the tragic consequences of inflation to that large section of the community which is dependent upon fixed incomes,, and if they cannot comprehend that the injection of so much additional money into our economy at the present time will aggregate the hardships of that deserving section, they should not be members of the Parliament.

Mr Beazley:

– Does the wool-grower who is receiving an income of £500 a year also threaten our economy?

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– That is not the point. The price of wool now is ten times as high as was the price in normal times, and the huge volume of additional money that is flowing into the country must have a profound effect on the cost of living and on our economy generally. As I have already pointed out, the Opposition is obviously endeavouring to foment discontent among the wool-growers in the hope that it may be able to have the present Government put out of office.

Because of the grave economic situation that confronts the nation, a responsible Administration could not permit such matters to take their course. The present Government was bound to take action to prevent the inflationary consequence of uncontrolled expenditure of the huge additional income that threatens to flood our economy. In introducing this measure the Government is not seeking popularity with the electors, but is concerned solely to do its duty to the country. The Opposition, however, is quite unmindful of the national interest. Undoubtedly, there are many inflationary factors operating in this country at present, and we cannot entirely escape the consequences of their operation. As I have already pointed out, the biggest single factor is the present exaggeratedly high price of wool.

If economic conditions in this country were normal, and there was a reasonable supply of goods, the Government might be able to disregard the consequences of the great boom in wool prices. However, we all know that the situation is grossly abnormal, and that the shortage of m,an.power to produce goods and services will e even more pronounced in the future. We have been told that 20,000 youths will be withdrawn from industry next year for military training. That is a necessary and inevitable step if this country is to be properly defended, and no responsible administration could afford to neglect our defences. If the Government did fail to provide adequate defences we might, within the next ten or twenty years, find, ourselves working for Chinese garrisons because we had lost our country. Other large and necessary commitments of the Government, such as the Snowy Mountains hydro-electric power scheme,, are also inflationary in their effect. I say they are inflationary because, although large sums of money are being, expended upon them and much of our man-power is being diverted to them, they are not yet producing any economic return. Until such time as they begin reproduce goods and services for the community they must, therefore, be regarded as inflationary. However, as I havepointed out, such large-scale developmental schemes are necessary to our national development, and to our defence. After all, it is merely a measure of prudence to move our vulnerable industries away from the coast-line. That inflationary element cannot be eliminated.

Immigration is inflationary, but the rising tide of nationalism in Asia makes it imperative for us to foster immigration if the nation is to be securely protected. The Government has studied all of these causes of inflation and has rightly come to the conclusion that it cannot afford to minimize them. However, it can reduce the inflationary effect of high wool prices. The abnormal influx of large sums of money will have a dangerous effect upon the national economy, and therefore the Government has wisely decided to cushion its effect. Its action will help to preserve the financial security of the people whom members of the Labour party claim that they represent, and it should have the approval of the Opposion on that account. But what has the Opposition done? It has treated the matter merely as a means of gaining petty political advantage. It believes that it can stir up resentment amongst the woolgrowers, but its efforts will fail when the wool-growers understand the real effect of the Government’s plan.

The Opposition has opposed every action of the Government since it has been in power. It has indulged in misrepresentation and distortion of the facts. Anybody who has any knowledge of economics realizes that our economy will be affected by the additional money that will be brought into the country from the sale of wool at record prices. The Government merely proposes to tap that additional income in the interests of economic stability. Yet the Opposition says that the plan is discriminatory. Apparently it does not matter to members of the Labour party that the people whom they are supposed to represent in this Parliament would suffer most from the ill effects of any other course of action. Apparently they are not concerned about the security of the wage-earner and are willing to endanger it for the sake of winning a few votes from wool-growers. They will not get very far with that sort of policy. The speech that was made by the honorable member for Grayndler (Mr. Daly) was typical of the Opposition’s attitude to the bill. I do not know how the honorable member behaved when the Labour party was in power, but since it has been in Opposition he has done nothing but sneer at the Government. He asked why the Government did not seek to obtain a mandate for the course of action that it proposes to take. But what is the attitude of the Labour party to mandates that are given to governments by the people?

The present Government parties received a mandate at the general election to deal with the “ Commos “, but the Opposition ignored that mandate and stubbornly fought for a long time to veto the anti-Communist legislation. Likewise, it has objected to the Government’s banking proposals and to the discontinuance of petrol rationing. Whenever the Government has attempted to give effect to any policy for which the people gave their mandate at the election, the Opposition has said “ No “ and has exercised the power of veto that it commands because of its majority in the Senate. Now it declares that the Government should ask the people to give a mandate for the wool sales deduction scheme. Why? So that it can say “ No “ once again ? The honorable member for Grayndler said that many citizens were receiving excessive incomes and that they should be subjected to an excess profits tax. Apparently he favours the imposition of such a tax upon the wool-growers, but he would not dare to say so on public platforms because the wool-growers would then realize the true nature of the Labour party’s policy. I respect the Leader of the Opposition (Mr. Chifley) as an elder statesman, and he knows that I do so, but I have no illusions about his purpose. I listened attentively when he spoke in this chamber, in a voice that was broken with sympathy for the woolgrowers, about the proposed wool sales deduction. But what was in his mind behind his display of distress ? The right honorable gentleman was really thinking that the situation which has given rise to the necessity for the proposed deduction should be removed. His mind was concentrated upon the fact that the wool-growers own the land on which their sheep graze and the stock and the plant on that land. If the industry were nationalized, there would be no necessity for any impost upon the growers. Those were the thoughts that occupied the right honorable gentleman’s mind. He stands whole-heartedly for the socialization of the means of production, and no wool-grower should ever forget that fact.

The honorable member for EdenMonaro (Mr. Fraser) has a very subtle approach to most controversial subjects. He is considered to be a moderate member of the Labour party, but I know of no other member of that organization, or of any other organization, who is more capable of subtly distorting the facts. He reminds me of the character of the bartender in the song, “Frankie and J ohnnie “, who supposedly uttered these words -

Don’t want to tell you no lies,

Don’t want to cause no trouble.

The honorable gentleman adopts the same sort of conciliatory tone before he releases a whole string of political bombs. That is typical of his actions. I know of nobody who is more capable than he is of misrepresenting the facts. The honorable gentleman asked four questions during the course of his speech and then proceeded to answer them in his own way. In fact, the answers to those questions are contained in the bill, but the honorable gentleman used the most extraordinary methods - they were particularly spurious - in order to answer them to his own satisfaction. He quoted certain letters that he had received. The writers of such letters are often almost illiterate, but the communications from which he read were couched in very fine journalese.

Mr FRASER:
EDEN-MONARO, NEW SOUTH WALES

– Does the honorable member say that the letters were not genuine ?

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– They may have been genuine, but they were written in journalistic style. Let us consider the tragic stories that were told in those letters. They were tales of the most dire calamity. What would have happened to the writers if wool prices had not increased by 100 per cent, during the last twelve months? They should never have engaged in the wool industry if, notwithstanding that remarkable increase, they remained worse off after it had taken place than they were previously. What absolute nonsense the letters contained. Does anybody believe that the deduction of 20 per cent, of their returns, after those returns had increased by 100 per cent, over and above the returns of our a.ll-time record year, would leave them worse off than they were before the price increases occurred? What would have happened if prices had returned suddenly to normal instead of soaring ? T.n.=t year’s wool cheque amounted to £300.000.000, which was six times the amount of the pre-war wool cheque. The return from wool sales this year will be double last year’s amount. Yet, according to the honorable member for Eden-Monaro, his correspondents are not able to make do under present conditions! What absolute rubbish! I have every sympathy for the small woolgrower and I am pleased that provision is made in the bill to protect his interests. Every form of taxation has an adverse effect upon somebody, but every effort has been made by the Treasurer to protect the small woolgrowers from hardship.

Members of the Opposition must realize that the present high wool prices endanger the national economy. The economists have warned us of the danger, and, in view of those warnings, one might reasonably expect the Opposition tocriticize the Government for not takingmore than it proposes to take from thehigh incomes of the wool-growers. I haveaddressed at least 600 wool-growers at eight meetings in various parts of theelectorate that I represent in order toexplain the bill. My experience has been that the growers generally accept the plan without question when they undertand it. This Government recognizes its responsibility to the nation and is not afraid to act according to the dictates of itsconscience in discharging that responsibility. It will not allow a few votes to affect its policy on matters that are vital to our economy. Its task is to protect every individual in the nation to the best of its ability, not to safeguard theinterests of only one section of the community. The wool-growers will not loseanything under the deduction scheme. If the proposed impost were unfair and were likely to have an adverse affect upon the economy of the wool industry, that fact would have been reflected in the price of sheep as soon as the Government had announced its intention. But has the price of sheep fallen? The answer is “ No “. That is the yardstick by which the situation should be measured. All of the arguments that have been advanced by the Opposition fall to the ground when that yardstick is applied. What regard” for their duty have such members of the Labour party as the honorable member for Parkes (Mr. Haylen) when they oppose the bill? That honorable gentleman and his colleagues protest frequently that they represent the citizen with the small income, but the truth is that they neglect the interests of such persons. They are motivated by the petty desire to gain a few extra votes in the hope that they will retain their places in this Parliament at the next general election. What a shocking philosophy for any honorable member to espouse! What a hang-dog look is evident amongst members of the Opposition !

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– After listening to the speech of the honorable member for Hume (Mr.

Charles Anderson), I realize more than ever what a valuable asset it is to be a holder of the Victoria Cross.

Government Members. - Shame !

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– BecauseI can see now-

Mr DEPUTY SPEAKER:

– Order !

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I can see now what hopeless types of politicians can be elected to the Parliament provided that they hold the Victoria Cross.

Mr DEPUTY SPEAKER:

– Order ! The honorable member will withdraw and apologize for his personal reflection.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I apologize.

Mr DEPUTY SPEAKER:

– Order ! I think that it is disgraceful and insulting for an honorable member to carry on in that’ way in this House. He must withdraw and apologize.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I propose to prove that statement.

Mr DEPUTY SPEAKER:

– Order ! If the honorable member persists in that attitude I shall name him. I ask him again to withdraw and apologize.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I withdraw and apologize.

Mr DEPUTY SPEAKER:

– And to cease carrying on in that tone.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I intend to refer-

Motion (by Mr. Hulme) proposed -

That the honorable member for Hindmarah (Mr. Clyde Cameron) be not further heard.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 53

NOES: 32

Majority . . . . 21

AYES

NOES

Question so resolved in the affirmative.

Sitting suspended from 12.47 to 2.15p.m.

Mr FAIRBAIRN:
Farrer

.– Honorable members opposite, particularly the honorable member for Grayndler (Mr. Daly), and the honorable member for Parkes (Mr. Haylen), have shed crocodile tears about the likely effect of this measure on the -wool-growers. I suggest that all that the honorable member for Parkes knows about farming is that farmers make hay while the sun shines. He has evidently attempted to make hay before the wool-growers realize the full import of this matter. The arguments that the Opposition has so far advanced have not been convincing. It has been said, for example, that it is not sound finance to use, to balance this year’s budget, money that would normally not be received until next year. The Leader of the Opposition (Mr. Chifley) raised that point. Secondly, honorable members opposite have said that the bill will impose hardship on certain wool-growers. The PostmasterGeneral (Mr. Anthony) dealt with the first argument on Tuesday night, when he pointed out that he had been a member of an all-party committee that was established in 1942-43 under the chairmanship of the present Leader of the Opposition. That committee considered the desirability of collecting taxes in advance of the normal time of collection, and, as a result of its report, a Labour administration introduced a scheme for the payment of provisional tax by wool-growers. That tax is based on the assumption that the persons paying it would receive the same amount of income in one year as they had received in the previous year. In other words, no allowance is made in respect of any possible increase of income. One of the reasons why the Government how proposes to deduct £103,000,000 from the receipts of the wool-growers this year is the fact that their income will increase enormously in the current financial year. The Government proposes, therefore, to deduct a proportion of that income now, and to take it into the national revenue immediately. The Treasurer (Mr. Fadden) has already told us that the probable amount of tax for which woolgrowers generally will be liable in respect of this year’s earnings will be £170,000,000, so that the Government

page 2569

I.R4J

will be taking only £103,000,000 out of a total of £170,000,000 that will be due. The problem of getting in finance from income tax when it is actually due, instead of waiting a year or eighteen months to collect it, has faced governments in all times and is not a new problem. I was interested to find in the Encyclopaedia of Social Sciences the following statement, which shows that this same principle has been adopted by governments in England and Australia for a considerable time. The encyclopaedia says -

In the administration of the modern income tax there have arisen a number of problems pertaining to methods of assessment, collection, selection of the tax period, time of payment and size of administrative area . .

The most convenient method of assessment and collection is presented by the system oi stoppage or collection at source. It was introduced by Pitt in 1799 in order to prevent the wholesale -evasion which characterized the tax of the previous year … It was largely for this reason that the schedular system was adopted . . . This system of hitting as far as possible the payment rather than the reception of income was. so successful that when the tax was reintroduced in 1842 the stoppage at source method was again adopted. Where the tax so collected is greater than the total tax liability of the particular taxpayer, he may apply to the government for refund.

Although that happened centuries ago the position now facing the Government is exactly the same. The deductions that are proposed under the bill are the same kind of deductions as have been made from the salaries of wage-earners for a number of years. The Opposition has not advanced any alternative method by which the Government could obtain this necessary amount of finance, although it should have submitted an alternative if it disagrees with this method. The alternatives are either to raise a loan in order to balance the budget, or to increase taxation for the same purpose. We believe that an increase of taxation is not the answer to the problem, because it would tend to reduce incentive. After all, this scheme has been introduced to meet nonrecurring expenditure. It will provide funds for the war gratuity and for the stockpiling of strategic war materials, which we shall have to find this year and not again. Considering all those aspects, this scheme is a better method of raising the necessary finance than an increase of income tax or the raising of a loan would be.

All new systems of taxation naturally cause an outcry when they are introduced. I do not think that there has ever been an instance of a new system of taxation, either for an increase of tax or for the collection of tax, earlier than usual, having been received with joy by the people who were required to pay the taxes. I have no doubt that there was a loud outcry when the system of income tax itself was first introduced, although the rate of tax at that time was probably only 3d. or 6d. in the fi. There was certainly universal rejoicing when income tax was abolished in 1816. It was reintroduced in 1S42 and I have no doubt that at that time members of Parliament were bombarded with protests from their electors. But nowadays the levying of income tax is accepted as a normal means of raising finance, although the amount collected is far greater than the amounts that were collected when the system was introduced many. years ago.

I come now to the second objection that has been raised by the Opposition, which is that this bill will cause hardship to the wool-growers, and particularly to the small growers. Unlike the honorable member for Parkes I can speak with a certain degree of authority on this matter, because not only am I a woolgrower, as are some other honorable members on this side of the House, but also I live among wool-growers, large and small. Of my eight neighbours only three can be called medium growers. The other five are small growers who run between 600 and 1,000 sheep. Their annual wool clip is probably between 20 and 30 bales each. This year twenty bales will bring, at current prices, probably between £3,000 and £4,000. Five years ago the same amount of wool would have brought only £400. How will the wool-growers’ earnings be affected by the present scheme? A wool-grower who receives £3,000 for twenty bales of wool will have £600 deducted from that amount at the time of sale. He will be given a credit for the £600 which can be used later for the payment of his income tax. What could he do with the money if he had the use of it for perhaps another year ? If he put it into a short-term loan it is very doubtful whether he would get more than 2 per cent, interest on it, so he actually will lose, through this forced loan, as some people have called it, an amount of £12 in interest out of a total of £3,000. I do not believe that that is an excessive amount of contribution towards the national economy to be paid by wool-growers at the present time. On the other hand if the wool-grower has an overdraft, as very many of them have, he will be paying, as the honorable member for Wannon (Mr. Mackinnon) has pointed out, A per cent, interest on the overdraft, so he will probably lose about £25 in interest payments because of his reduced ability to cancel the overdraft owing to the operation of this measure. He can deduct the amount of that interest from his taxable income. If he is paying 10s. in the £1 income tax he will have lost only £12 or £12 10s. That is a minute contribution. One of these small wool-growers who lives near me said quite frankly, “ When I receive my cheque I leave it in a current account and set it aside to use for the payment of my income tax. As you know, on a current account there is no interest, so, as far as I am concerned, it is immaterial whether it is left in my hands or the hands of the Government “.

The honorable member for Parkes (Mr. Haylen) said this morning that if this money had been left in the hands of the wool-growers they would have been able to use it to repair fencing, purchase superphosphate and fodder and effect improvements which they had been prevented from effecting for a long time because of lack of finance. That is just humbug and shows that honorable members of the Opposition either are trying to make political propaganda out of the bill or have not studied it fully. The producer who has £600 deducted from his wool cheque will have an overdraft of £600 and no tax liability. If that amount were not deducted, he would have no overdraft but he would have a tax liability of £600. There would not be the slightest difference in the amount that that man could draw from his bank. A person who buys sheep and sells them and has 20 per cent. deducted will be in a similar position. If he obtains a credit for the amount he will be in no worse a position.

Mr FAIRBAIRN:

– Yes, but it has been worked out by the Treasurer (Mr. Fadden) that the 20 per cent, will not cover the tax liability of growers. Under the hardship clause which has been circulated to honorable members any one who suffers hardship under this bill can use the deduction for the payment of current- tax instead of for the payment of the tax which would be assessed next year. There is also a provision for the Commissioner of Taxation to make a payment to the producer of the amount by which the value of the certificate exceeds the tax which, in the opinion of the commissioner, will be the net tax payable by the producer. If the grower does not avail himself of either of those two methods of obtaining a refund he has only to wait until his assessment is issued and he will receive a refund if he has overpaid.

Honorable members who live in the city are not the ones to understand fully the needs of the farmer. This morning the honorable member for Fremantle (Mr. Beazley) asked what the position of the small wool-grower with a £500 wool cheque would be. The honorable member may or may not know that such a grower would have a flock of about 90 sheep, and I cannot imagine anybody spending all their time in dealing with only 90 sheep. If a person had only that number of sheep he would have other interests, possibly cattle or bees, or he might be an orchardist. The Minister for Defence (Mr. McBride) has pointed out that this has been called a forced loan, but I and many other honorable members have received a number of letters from constituents at one time or another requesting us to ask the Treasurer to expedite the issue of their assessments. Though they could wait and have the benefit of the interest on -the money they would sooner receive the assessment and pay the amount immediately. Because of the introduction of this bill some temporary unpopularity has been incurred by honorable gentlemen who support the Government, but that is due to the measure not being fully understood and honorable members of the Opposition are doing their utmost to try to gain a few votes from the growers by fostering the misunderstanding. The measure is unpopular because, unfortunately, it has been associated with a proposal by Professor Copland for a 33 per cent, deduction and an export tax. This is a completely different measure yet, in the minds of the public, those two proposals have become associated and the unpopularity of the one has affected the other which is perfectly reasonable. Any new taxation measure is unpopular, but I think that the passage of time will show wool-growers that this bill is perfectly reasonable.

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– I rise to oppose this hill on the grounds already stated by the Leader of the Opposition (Mr. Chifley) and other honorable members of the Opposition. The principle on which the proposed tax is based is out of keeping with usual taxation procedure in Australia. The bill departs from that procedure in two or three fundamental ways. In the past the amount of taxation has been assessed on the capacity of the taxpayer to pay and not on the industry in which he is or has been engaged. Taxes have always been assessed on net income and not, as on this occasion, on the gross amount which, in many cases, differs to a very large extent from the net income and varies also from one taxpayer to another. This bill does absolutely nothing to reduce the inflationary spiral. What difference can it make to the country’s economy if the £103,000,000 collected is spent by the Government on public undertakings instead of by the grazier who, after all, owns the money and has to produce the wool? The proposal will probably accentuate the problem of the small farmer who endeavours to create assets on his property. The small farmer desires to improve his property by repairing his fences, increasing his holding, and restocking to make up for losses. He desires to provide new amenities, the enjoyment of which he has been looking forward for years for his household. He wishes to increase the productivity of his holding bv using fertilizers, new grasses and all the aids which science have discovered to fit properties to run more sheep to the acre than previously. So if £103,000,000 more was paid to the f armer, at least he would acquire tangible assets which would create revenue in the years to come. This legislation will do nothing to reduce the inflationary spiral. On the other hand, it will increase it by making this money available for expenditure on government undertakings.

Debate interrupted.

page 2572

DISTINGUISHED VISITOR

Mr DEPUTY SPEAKER:

– I desire to inform the House that His Grace the Lord Archbishop of Canterbury, the Most Reverend and Right Honorable Dr. G. F. Fisher, a member of the House of Lords, is within the precincts. With the concurrence of honorable members, I propose to provide him with a seat on the floor of the House beside the Speaker’s chair.

Honorable Members. - Hear, hear !

His Grace thereupon entered the chamber and was seated accordingly.

page 2572

WOOL SALES DEDUCTION (ADMINISTRATION) BILL 1950

Debate resumed.

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– The honorable member for Farrer (Mr. Fairbairn) stated that he was rather amused by the attitude being adopted by honorable members of the Opposition. It is good to know that somebody is doing something to amuse somebody else, but the inference was that because we do not represent persons can big holdings in rural districts we do not know much about wool. Some honorable members of the Opposition have had more to do with wool than have some honorable members opposite. At the age of thirteen I began work on a sheep holding, yarding and picking up, and I have had had a great deal to do with rural production. Many honorable members of the Opposition have taken a keen interest in the welfare of people in rural districts. We know something about the production of wool and we are very deeply concerned for the welfare of the people who are receiving greater benefits from their products because of better prices. The prob lems of the wool industry affect not only the large and small producers but also the general community. As the honorable member for Hume (Mr. Charles Anderson) has said, wool has become a product which has a very strong effect on the economic stability of the country and it interest’s, not only wool producers but also every one else in Australia who produces the equipment and material’s necessary to enable the farmer to grow the wool. Rather than take the view of “ the poor farmer in my electorate “ honorable members should regard wool as one of our greatest national assets and try to regard the industry from the national point of view. According to the honorable member for Farrer this Government faces a desperate situation. So it takes this money in advance which, should, in ordinary circumstances, be paid next year.

Honorable members opposite talk a great deal about government enterprise and say that if only every country were run by private enterprise it would be. a great world.. Yet the Treasurer has taken on the job of a real socialist. Wool producers are receiving incomes that they have never received before. During this period when we should be living within our means, payingour way from current: income and also putting a certain amount aside for the reduction of our debts and for the building up of a reserve for possible worse times ahead, we are straining our revenues to the uttermost. Honorable members who prate so much about private enterprise should be applying the ordinary principles of business to the government of this country. But we find that during the present time, when the national income is probably higher than it has ever been before, the Government has not the courage to face up to the necessity of living within its income. This year it has budgeted for a deficit of £100,000,000, and honorable members should remember that that has been done at a time when our revenue is the highest it has ever been and when we could have expected any reasonable government to live within its means. Not only has the Government budgeted for a deficit, but it has failed to provide for the future, when we may perhaps expect trouble. Reasonable people with the interests of this country at heart should carefully scrutinize the Government’s actions and ask themselves whether its actions are in the best interests of Australia. I suggest that the way in which the Government should have balanced this budget was by raising taxation so that it could meet its commitments from current revenue. If we cannot do such a thing now, when revenue is so buoyant, then we cannot hope to do it at any time in the future.

I ‘ask honorable members to consider what will happen in a year or two should our national income fall? It may be found necessary in the future to spend large sums of money to secure ourselves against aggression. We may have to increase taxation on the earnings of all the income-earning people of Australia, and not merely on those of the wool-growers. This tax is a purely sectional tax. Regardless of what the wool-growers produce they should not be taxed as a section. Most honorable members will remember the time when the woolgrower got 10 1/2 d. per lb. for greasy wool in the shed. From those times almost up to the present time most farmers have been hard put to it to make ends meet. Their children have not been given the advantages of the children of city dwellers, nor have their wives been able to enjoy the amenities that .are such a feature of city life. Yet the political representatives of these farmers see fit to impose a purely sectional tax of 20 per cent, of the proceeds from the sale of their wool. That is something which should not be forgotten by the farming community. I have known farmers for many years, and I know how they feel about this tax. A good deal of talk and persuasion will be necessary if the Australian Country party is to wipe out the feeling of discontent that it has created among the farmers.

The sellers of wool cannot be blamed for the high price of wool. It is well known that in the second-hand car dealing business and in the marketing of fruit and vegetables by agents, prices are fixed by a combination of people in the industry. Prices are not so fixed in the wool industry. The wool-grower merely auctions his product and takes whatever people are prepared to pay for it. He has asked for no government bounty and has received none. The only concessions that he may have got from the government are freight concessions in respect of the carriage of starving stock. It has been suggested that the wool-growers’ incomes are out of all proportion to the incomes of other sections of the community. I say that it is quite apparent that the wool-growers are not making more money than the used-car dealers or those people in the city who act as brokers for the wool-growers. The turnover of the brokers or agents is ten to twenty times as much as it was twenty years ago. Their percentage commission for handling the wool is still the same, so that their incomes must have risen ten to twenty times. Their incomes have risen just as high in proportion as have the incomes of the wool-growers. Moreover, the big price that is being paid for wool is not the real overseas value of the product. I have recently read reports published in overseas journals to the effect that some wool-buyers are reselling Australian wool overseas at prices a good deal in excess of the prices paid here.

Wool, whatever its price, is a valuable product and is worth what people are willing to pay for it. The wool-grower produces real wealth for Australia. His product is exportable, and its sale to other countries builds up our overseas balances. His work is of great value to Australia. On the other hand the work of the usedcar salesman is not of much value to us. Such a man can set up in business with a capital of £5,000, turn over used cars ten to twenty times a year at a profit of 20 per cent, to 30 per cent, each time, and receive about 300 per cent, or 400 per cent, profits on his capital investment.

Mr Eggins:

– He pays income tax, also.

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– Yes, so does everybody else. But that man’s extra profit is not being taxed by way of a sectional imposition. He is allowed to spend it as he thinks fit. The only Australian income-earners proposed to be taxed by this iniquitous measure are the wool-growers. I have no desire to answer the interjections of honorable members of the Australian Country party. They will find enough trouble later when they attempt to answer the questions of their supporters. I ask honorable members to consider the income of professional men, salesmen, doctors, and lawyers. None of those people have ever created a penny worth of real wealth, yet they are not being singled our for a special tax because of their high incomes.

Mr Eggins:

– They are taxed the same as everybody else.

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– They pay their income taxes but they will not be called upon to pay a huge sectional tax. They are not to be asked to pay anything in advance. The farming community is subject to the payment of huge expenses during the working year. This year is perhaps a typical year, and if the matter is investigated it will be found that many farmers, through natural calamities, have lost a great deal of fencing and many buildings, and have been put to the expense of re-stocking. All such costs have to be borne from time to time by the farmer, and he looks forward to the years of good prices, when those items can be paid for, so that he can be carried through the years of low prices. Yet this Government is taking away from him the margin of profit that he ordinarily would spend on such items. There have been big losses of stock in New South Wales and Queensland. The net profit of wool selling brokers and agents in the cities is almost the same as their gross profit, but the net profit of the wool-grower is only a quarter of his gross. Yet this 20 per cent, is being taken from his gross earnings. It has been estimated that recently in the north-west of New South Wales 1,250,000 sheep were lost through floods. Those sheep will have to be replaced if the farmers are to continue their business. Moreover, the farmers must buy quantities of fertilizers for use on the recently flooded land so that more grass may be grown to feed their flocks. That also has to be paid for. Yet the farmer is the one man in the community whom the Liberal-Australian Country party Government has singled out for attack. That is something that the farmers should not forget.

I suggest that this type of taxation will create a dangerous precedent for future governments. If it is right at the present time to tax one section of the people a year in advance, what is to stop a future government from taxing all the people or a section of the people for three or four years in advance? If it is right to take part of the profits of the wool-growers to-day it will be right for a government to impose a sectional tax on manufacturers or other sections of secondary industry in the future. If it is to become a practice of governments to refuse to pay their way out of current revenue there is very little hope for the ultimate prosperity and progress of Australia. It has been suggested that this money is needed because the war gratuity will have to be paid and a stockpile of essential material has to be built up. That may be so, but surely it is not suggested that our costs throughout Australia next year will be less than they are to-day, particularly if a war should occur. Our poulation is constantly growing through immigration and natural increase, and our costs of government are constantly rising. There is nothing to suggest that the cost of government will be less next year than it is this year, and if that is so, how is the Government going to meet the cost next year? This Government told the people before the election that it had the answer to the problem of inflation and to all the other problems of our people. Now the Government says that it has no answer and never has had an answer. It has noi arrested the inflationary spiral nor has it stopped rising costs. If it has not done so this year, how can it expect to do so next year ?

The Minister for National Development (Mr. Casey) has detailed schemes which will cost hundreds of millions of pounds. They are to be pushed ahead as soon as man-power and machinery is available. If all those schemes are to be carrier out the costs of government in future will certainly not be less than they are now and the governments of the future will have to obtain just as much money as the present Government requires for its needs. Therefore, there is a danger in the future of still further sectional taxes being imposed. The honorable member for Hume said that only for wool we should not have extricated ourselves from the depression. As many countries in which not a pound of wool is grown succeeded in extricating themselves from the depression, that argument is groundless. Supporters of the Government are fearful that the high prices .being received for wool may cause economic disaster. I fail to comprehend how high prices of themselves could cause a calamity. I admit that unless they are related to living costs our economy will be seriously injured. If the Government is unable by other means to curb rising costs it should introduce legislation immediately to equate incomes to price levels and so enable the people to maintain a reasonable standard of living. Money which is only a token in itself is of little practical account in the national economy so long as prices are stabilized.

I shall summarize my objections to the measure. First, it is wrong in principle because under it the Government proposes to collect income tax in advance. Secondly, it is wrong because the Government proposes to levy tax on the gross income instead of the net income of the woolgrowers. Thirdly, it is wrong because the imposition is to be made on only one section of the community in order to enable the Government to balance its budget. The Government is not making any provision for repayment of money that is to be withheld from growers and it is not attempting to make any provision to meet the inevitable increase of expenditure that will confront it in future years as the result of economic expansion and increasing population. This proposal is proof that the present Government parties were not sincere in making the promises that they made at the last general election. I oppose the bill.

Mr HAMILTON:
Canning

.- The speeches of honorable members opposite on this measure have conformed to a common pattern. Very few of them have dealt directly with the measure or “with its objects. The honorable member for Kingsford-Smith (Mr. Gordon Anderson) could more appropriately have made his remarks in a budget debate. He claimed that under this measure the

Government proposed to impose a sectional tax upon the wool-growers. Obviously, he is not aware of the statements that the Prime Minister (Mr. Menzies) made in a national broadcast on the 6th October, six days before the Treasurer (Mr. Fadden) introduced his budget. In that broadcast, the Prime Minister set forth the steps that vue Government proposed to take in order to curb inflation and he referred specifically to the sudden and alarming increases of wool prices and the effect that they would have upon the national economy. On that occasion, the right honorable gentleman also said that the Government would introduce legislation to impose an excess profits tax. No honorable member opposite has suggested that that tax would be sectional in nature. As the honorable member for Hume (Mr. Charles Anderson) has pointed out, members of the Opposition are using every trick in order to regain control of the treasury bench. At present, they are lining themselves up with interests that are opposed to this measure, including the newspaper industry and the “ hot money “ speculators. That is the genesis of their opposition to this bill. In the broadcast speech to which I have referred, the Prime Minister promised that the Government would take steps to curb inflation by re-introducing capital issues control and controls over basic materials and articles of luxury, by reducing public works programmes and by sponsoring a savings campaign.

The Government has those matters in hand, but it has introduced this measure at this time in order to enable it to take effective action having regard to the fact that the wool auctions commenced on the 28th August last. Its introduction has been timed in much the same way as was the legislation that was introduced, in June for the purpose of enabling woolgrowers to take full advantage of the increased prices of wool by setting up a fund for the payment of a minimum reserve price. I have no hesitation in supporting the measure. I have studied it carefully and I fail to see that it will do any harm to the wool-growers. As a primary producer I can speak with an intimate knowledge of the industry.

Mr Calwell:

– The honorable member is not very enthusiastic about the measure.

Mr HAMILTON:

– I am more enthusiastic about it than the honorable member for Melbourne (Mr. Calwell) is about a double dissolution, in respect of which he has turned tail. The Government proposes to withhold 20 per cent, of the income of the wool-growers and to set aside that money as a credit to be used in respect of their future tax liability. The honorable member for KingsfordSmith objected that the Government proposed to levy a 20 per cent, tax on the wool-growers’ gross income. I point out to him the amount that the growers would thereby be obliged to pay would not be so great as the amount of tax they will be obliged to pay which will probably be at the rate of 50 per cent, of their net income. If the present high prices for wool continue, growers will be fortunate if they are not obliged to pay tax on their net income at a minimum rate of 10s. in the £1.

Mr GORDON ANDERSON:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– But they would normally pay that tax twelve months hence.

Mr HAMILTON:

– No ; in many instances growers will be obliged to meet that commitment in the near future. In any event I, personally, would prefer to have 20 per cent, of my income withheld as a credit against my future tax liability, particularly when that liability will exceed the amount that is withheld from me. This proposal does not in any way discriminate against the woolgrowers. In an article published in the Melbourne Leader of the 18th October last, that is six days after the Treasurer introduced his budget in which he forecast this legislation, Mr. C. C. Kelly, president of the Graziers Association of Victoria, said -

The consensus of opinion among the executives of my association is that in principle the prepayment of income tax from the proceeds of this season’s clip will be neither harmful to the industry nor unreasonably discriminating.

Yet, members of the Opposition are shedding crocodile tears for the woolgrowers because, they say, the Government proposes to impose a discriminatory tax upon them. I admit that some woolgrowers may not agree with the view that Mr. Kelly has expressed. Mr. Kelly continued -

I appreciate, however, that because of the varying relationship of gross wool proceeds to taxable incomes, effect of droughts, or floods and other losses, the imposition of a flat rate deduction on all wool cheques must cause some inequalities and individual cases of hardship.

The Government realized that fact and made provision in respect of it when it drafted this legislation. However, members of the Opposition have entirely ignored the provisions that are contained in the bill as drafted and in the amendments that the Treasurer has circulated with a view to ensuring that no injustice shall be done in cases of hardship. Honorable members opposite also said this measure will not assist in curbing inflation. On that point Mr. Kelly, in the article to which I have referred, said -

Each section of the community has to accept a reasonable share of the effort necessary to curb the inflationary spiral of costs. The graziers’ contribution is to accept the tax prepayment proposal.

If wool prices continue at their present levels throughout the current season, the taxable incomes of wool-growers for the 1950-51 year will rise so steeply that normal provisional tax - payable when tax assessments are issued for the year 1949-50 will be insufficient to meet the increased tax liability for 1.950-51.

Because of the higher wool prices, woolgrowers’ incomes in the current year will rise more steeply than those of any other large group of taxpayers.

Authorities outside the wool-growing industry agreed that the inflationary effect of the increases in wool incomes on Australia’s domestic economy would be very detrimental.

When members of the Opposition claim that the measure will not assist the Government to curb inflation they are merely indulging in a political trick with the object of regaining control of the treasury bench by attempting to cause panic among wool-growers and the community generally. I repeat that the Government proposes to deduct 20 per cent, of the income of wool-growers and to set aside the money so deducted as credits in respect of the growers’ future tax liability.

Mr Beazley:

– The deduction will also relate to income tax that will be payable in respect of last year’s income.

Mr HAMILTON:

– Later I shall deal with the “wool baron from Fremantle

To-day lie and his colleagues are supporting the so-called wool barons.. The honorable member made statements to that effect recently.

Mr Beazley:

– I have never made any such statement.

Mr HAMILTON:

– Under this proposal it will be possible for some growers to pay tax in respect of this year’s income in March next, whilst the balance of .the money withheld from them will be used for the payment of provisional tax in respect of income earned in the next financial year.

Mr Pollard:

– That will be done only in cases of hardship.

Mr HAMILTON:

– And in other cases also. Members of the Opposition have said that the wool-growers have declared that they would prefer that the Government should float a loan in order to obtain the amount of money that it now proposes to withhold from their incomes and that they would willingly subscribe to such a loan. If that is so, what hardship will be caused to growers under this proposal whereby th’e Government proposes to use deductions as credits against their future tax liability? The Treasurer has pointed out that the amount represented by the wool sales deduction will be only a part payment of the income tax that will be due for the financial year 1950-51, and will be payable between the 1st July, 1951, and’ the 30th June, 1952. What will the wool-growers lose by the wool sales deduction? They would lose interest on the amount of money represented by the wool sales deduction if they invested it in Commonwealth loans or placed it in a bank on fixed deposit. But the honorable member for Farrer (Mr. Fairbairn) pointed out that the majority of wool-growers, knowing that they ha.ve to meet a financial commitment a few months after they receive their wool cheques, do not invest the money in Commonwealth loans or place it on fixed deposit. They keep it in their current accounts and, so far from receiving interest on it, they actually pay the bank for keeping those accounts.

Opposition members have repeatedly used the expressions, “ The poor little wool-grower Such a description is most interesting, and I shall keep it in mind for future reference. Members of the Labour party, and private citizens who are prepared to study this bill, know perfectly well that the small wool-grower will not be affected by it. He may make application to the Commissioner of Taxation to obtain a refund of the amount that he has paid by way of wool sales deduction if he considers that he is suffering hardship. I shall not bother to read the relevant provision of the bill, because Opposition members attended day school as I did, and should be capable of understanding it. However, it is clearly provided that, a wool-grower who suffers hardship as a result of drought or otherwise, will receive sympathetic consideration from the Commissioner of Taxation. Some misapprehension existed earlier about the meaning of the words– “ or otherwise “, but the Treasurer hascirculated an amendment which sets out their precise meaning, when they are read in conjunction with the whole provision.

Mr Calwell:

– How much of that statement does the honorable member believe ?

Mr HAMILTON:

– I believe it completely. That is why I support the bill. Opposition members do not believe one tittle of all that they have said about it. They are using this legislation for party political purposes, but they will not get away with it. I am prepared to explain the provisions of this bill in simple language to any Opposition member who seriously believes that any wool-grower will be inconvenienced in any way by the obligation of the wool sales deduction. I have endeavoured to make it clear that a wool-grower who considers that the wool sales deduction will inflict hardship on him, may apply to the Commissioner of Taxation for relief. I know that such applications will be promptly considered, because I have spoken to the officials who will administer this measure, and I have some idea of the instructions that will be despatched to the Deputy Commissioners of Taxation in the various States. No wool-grower will be detrimentally affected by this bill. It has been said that the wool sales deduction will have repercussions on certain other proposals which the wool-growing industry hopes will be given effect to. That will not be so, because applications for a refund of the wool sales deduction will be heard before such a move is made. The Deputy Commissioners of Taxation in the various States have already been informed about the policy that they are to adopt towards applications for relief, and they will be instructed later to deal with such applications expeditiously. In any event, an application must be heard within 30 days after it has been lodged with the Deputy Commissioner. “Would a wool-grower, if he considered that he would suffer hardship as a result of this bill, fail to make application to a Deputy Commissioner of Taxation to have his case reviewed ? He would know perfectly well that if the decision of the Deputy Commissioner did not satisfy him, he could immediately approach a land valuation board. The Government, in introducing this bill, is asking the wool-growers to assist it to curb inflation by making a prepayment of tax on receipt of their wool cheques during this financal year, and probably during the next couple of years. The Government has stated that this bill will be repealed as soon as that is economically practicable.

Mr Pollard:

– When will that be?

Mr HAMILTON:

– The guess of the honorable member for Lalor (Mr. Pollard) is as good as mine in that respect. However, I assure the woolgrowers that they may place complete reliance on that promise by the Government, but I warn them that they cannot give any credence to the party political propaganda that the Labour party has attempted to make out of this bill.

Conversation being audible,

Mr DEPUTY SPEAKER:

– Order ! There is too much noise in the chamber. I insist that the honorable member for Canning be heard in silence.

Mr HAMILTON:

– I shall not cause annoyance to Opposition members much longer, but I must point out again that they have resorted to soap-box oratory in this debate in an endeavour to cause as much confusion as they possibly can in the minds of the wool-growers. This bill will not harm the wool-growers. In fact it will assist the big woolgrowers

Mr James:

– That is a good one.

Mr HAMILTON:

– The honorable member for Hunter (Mr. James) need exhibit no concern for the wool-growers upon this matter. The small wool-grower will not be detrimentally affected by this bill. He may apply to the Commissioner of Taxation for relief if he considers that he will be seriously inconvenienced by the obligation of . the wool sales deduction. It is true that there is a little clamour among some wool-growers against the bill, but the good news about it is being spread among them, and is overtaking the rotten party political propaganda disseminated by the protagonists of revaluation, and so forth. It is also overtaking the nasty fears and doubts caused by the Copland wool tax plan, which has not influenced the Government in any way in deciding to introduce wool sales deduction.

Mr Davies:

– Have not protests against this wool tax been published in the press, and has not the honorable member also received protests against it ?

Mr HAMILTON:

– I have not received many protests, but I have seen references to protests in the press. Protest meetings have been held in certain centres, and I have received communications from the secretaries of various organizations, in which they have informed me of the exact position. I have forwarded that information to the Treasurer.

Mr Curtin:

– What did he think about it?

Mr HAMILTON:

– The right honorable gentleman was very pleased to receive it. This bill will assist the Government to control the present inflationary conditions in Australia, and, in doing so, will not impose a hardship upon the wool-growers, although members of the Labour party are endeavouring to convince them that it will have that effect. The bill will also assist to strengthen the national economy by preventing inflation from getting completely out of hand. Finally, I desire to refer to a remark by the honorable member for Hume to the effect that Opposition members have repeatedly stated that the proceeds from the sale of our wool have no effect upon the inflationary conditions in Australia. The honorable gentleman pointed out very clearly that wool prices, when they declined to a disastrously low level in the early 1930’s, had a most serious influence on the national economy. Conversely, high prices for wool, wheat and other primary products at the present time have an influence on the inflationary trends. The woolgrowers themselves realize the danger of those high prices, and the serious effect that they are having on the economy. I am certain that, when they understand the purpose of this hill, they will view it favorably.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I desire to make a personal explanation about some remarks which I made before the sitting was suspended at 12.45 p.m., and which, I think, may have been misunderstood. I should like to make it clear, Mr. Deputy Speaker, that I did not reflect in any way upon the honorable member for Hume (Mr. Charles Anderson), but if such an inference has been drawn from my remarks, I desire to apologize to the Chair, and to the honorable gentleman.

Dr NOTT:
Australian Capital Territory

– I am in a fortunate position, as my approach to this hill is not influenced by party politics, and I do not have to consider sectional interests and am not subject to the heat of pressure politics. I have listened with great interest to various speakers during this debate, and have displayed not a little patience in doing so, and I can hardly believe that the wool-growers have so many ardent supporters on both sides of the House. I have not previously met so many people at an assembly who appear to be specialists on the subject of the production of wool in Australia. As a matter of fact, the frequent references to shearing would have inspired me to believe, if I had not kept telling myself that it was sheer nonsense, that I myself could shear a goat for its wool. However, it is not necessary for me to talk down to my electors, or in a particular manner to the persons who have so efficiently developed the great wool industry. I do not propose to descend to the rancour or bitterness of party politics on this subject.

I am quite prepared to make every allowance for the great difficulties that have confronted the Treasurer (Mr. Fadden), in preparing his budget, but I reserve to myself the right to offer some trenchant criticism of this selective method of taxation that will be applied to the wool-growers. The budget has been cast under conditions of extraordinary difficulty, and at a time when the national economy has been subjected to kaleidoscopic changes brought about by external and internal factors. Not a week, not a day, not an hour passes without some new factor making an impact upon our economy, and allowance must be made for it in Commonwealth finances. Honorable members must recognize, whether they like it or not, that Australia is in the vanguard of world events. I believe that the Treasurer, when drafting his budget, was not uninfluenced by that important consideration. He had to provide for the conduct of the normal administration of this country, and he was not unmindful of the fact that he had been committed by the previous Government to a great scheme of national development, as illustrated by the Snowy Mountains hydro-electric scheme, with the possibility of other schemes being launched. He was also confronted with the major fact that this country was in a perilous condition in respect of defence, and that every effort had to be made, in accordance with our commitments as a member of the United Nations, to strengthen our forces. Therefore, he had to produce a budget that made ample provision for defence. Many other factors have also influenced the budget, and the introduction of this wool sales deduction proposal. Whilst those kaleidoscopic changes were taking place in our internal economy, the Commonwealth Court of Conciliation and Arbitration announced that the basic wage would be increased by £1 a week. Every one of those factors has contributed to the development of the unparalleled economic condition that confronts us to-day. Because of the present unbalanced state of our economy the Treasurer must have had a most difficult task in preparing the budget. Indeed, the preparation of the present budget probably occasioned more difficulty than any previous budget in our history.

One of the greatest contributing factors to our present state of economic unbalance is undoubtedly the very high price of wool, and this measure has been introduced ostensibly for the purpose of offsetting at least some of the consequences of that unhealthy condition. Of course, the high price of wool at present is due to several causes, one of which is the unbalanced condition of the economy of the whole world. Trade has been dislocated in every market in the world, and the repercussions have affected Australia. Another contributing factor to the unprecedentedly high price of wool is the determination of the present Government to implement a programme of rearmament in order that the country may be properly defended if we are so unfortunate as to become involved in another war. I do not suppose that any one who has the welfare of this country at heart objects to the expenditure entailed in the Government’s defence policy. However, that policy has increased the demand for wool even in Australia, because that commodity is just as essential for defence stocks as are explosives. Of course, Australia is only one of many countries that are accumulating a stockpile of defence materials, and undoubtedly the extraordinary demand for Australian wool has been brought about largely by the decision of many countries, including the United Kingdom and the United States of America, to equip themselves with a large stock of war material as part of their general defence preparations. Another factor that has contributed to the extraordinary demand for wool is that many countries, particularly in Asia, desire to improve tie living standards of their people. Many people who formerly wore cotton garments now want woollen apparel. We must remember also that many countries that are purchasing our wool have large sterling balances which cannot be converted into dollars, and they regard the purchase of wool for resale to dollar countries as a form of investment. Wool has become virtually a convertible medium of exchange, and it commands its own price in any part of the world to-day. In consequence, wool occupies a place in Australia’s economy comparable with the importance of gold in the economy of South Africa. The various factors to which I have briefly alluded are all responsible for the present fantastically high price of wool.

The unprecedented prosperity of the wool-growing industry has, not unnaturally, attracted the attention of the Treasurer as a possible source of revenue for the Government. Indeed, no honorable gentleman who occupied the position of Treasurer to-day could afford to disregard such an apparently fertile field for tax-gathering. Some time ago I read reports of a kite-flying suggestion that was made by the Vice-Chancellor of the Australian National University in the course of which he suggested that a tax should be placed on the proceeds of wool exported to other countries. However, public opinion soon crystallized against that proposal, and it did not receive much more publicity. However, I think that the Vice-Chancellor’s proposal was responsible for germinating the thought in the mind of the Treasurer that the graziers constituted a fruitful field for taxation. As I have already said, any honorable gentleman who occupied the position of Treasurer at a time such as the present, when the. Government sorely needs, additional revenue, would have been tempted to exploit that field.

I know that supporters of the Government have variously, vigorously and vicariously denied that the Government’s proposals amount to a selective tax to be levied on a section of the community, and that members of the Opposition have just as stoutly maintained that the proposal amounts to a selective and discriminatory tax. It has been contended by the Government and its supporters that the purpose of the Government in introducing the measure is merely to offset the inflationary effects which the release of a large volume of money would have on the present inflationary tendencies. I was impressed greatly by the speech which the Minister for Defence (Mr. McBride) delivered with such vigour and vehemence. He did not leave the House in any doubt about the Government’s real purpose in introducing the measure after he made the incontrovertible statement that the measure was introduced solely to enable the Government to balance its budget, and that statement has been given prominence in the metropolitan and provincial press. Of course, I do not believe that there is unanimity of opinion in the honorable gentleman’s political party on this matter, and .1 know that there is considerable divergence of opinion amongst members of the Opposition. It .is true that the passage of this measure will provide a substantial part .of the revenue which the Government needs to balance its budget. As I have already pointed out, the Government had to obtain money to finance the enormous expenditure .that will be required for defence projects and for the discharge of a number of non-recurring commitments that must be honoured next year,. However,, notwithstanding the exigencies that beset the Government, I do not think that it is justified in introducing -this measure, which will impose what is virtually .a selective tax on the wool-growers, without in any way curbing inflation. The Government’s proposals cannot have more than a microscopic effect in arresting the continuing spiral of inflation because they will not touch the real causes -of inflation.

If the Government’s proposals are specifically designed to enable it to honour its immediate non-recurring financial commitments, would it not have been logical for it to have included a time limit on the operation of the measure? After all, the wool industry is bringing a greater flow of dollars into this country than any other industry could possibly do. The industry is most efficiently conducted, and it iB undoubtedly the backbone of our whole economy. We must acknowledge our indebtedness to the industry. For those reasons, we should view most critically any proposal to interfere with the industry, and when we subject this measure to such a scrutiny I think that we must come to the conclusion that it will not have the slightest effect in countering inflation. If the measure is justified at all, a. time limit should certainly be placed upon it9 operation. It _ is significant that the measure contains no provision that it shall cease to operate when prices recede. The revenue that will be obtained by the Government under this measure will be paid into the Consolidated Revenue Fund, and the Government has admitted that it proposes to expend that money. It is difficult to understand, therefore, why the Government should contend that the expenditure <of the money by the wool-growers will accentuate the present inflation, because the effect upon our economy of the expenditure of such .a large sum of money moist be the .same, irrespective of the identity of those who expend it.

Every honorable member owes a duty, not only to the wool-growers, but also to the nation, to consider very carefully the effect which the proposed impost on the wool-growers will have on the national economy. I suggest that honorable gentlemen should ask themselves whether all is well with our economy a’t present, and whether we are not regarding our currency too cheaply in the money markets of the world. In the light of all the ascertainable facts, would it not be preferable to take the bull by the horns and appreciate the value of our currency ? That suggestion has not been canvassed at any length in this debate, but I believe that eventually the Government will be compelled to appreciate our currency. I am not, of course, entitled to vote on this measure, hut if I were I should certainly vote against it because I believe that it will impose a selective and discriminatory tax upon one section of the community. I am not impressed by the argument that has been advanced again and again by members of the Government and their supporters to the effect that there is no difference in principle between the proposed wool sales deductions and the regular deductions that are made from the incomes of wage-earners to pay their, income tax. The position of wool-growers under the Government’s proposal, and that of the wage-earners under the pay-as-you-earn system is not at all analogous. The charge that is proposed to be levied on wool-growers is not, in any sense of the term, one that should normally be made by a government, and it must unfairly affect the interests of a selected section of the community. As I have already pointed out, the members of that section have contributed far more to the economic development and the prosperity of this country than has any other section of the community. For that reason, I appeal to the Government, even at this late hour, not to proceed with this discriminatory and unfair proposal. In conclusion, I trust that when the Treasurer, who has a most difficult task to perform, is preparing the supplementary budget he will bear in mind the various matters upon which I have touched lightly in my remarks this afternoon.

Mr GULLETT:
Henty

.- There are no wool-growers in the electorate of Henty and therefore, unlike many other honorable members who have spoken, I address myself to this bill with a completely unbiased mind. I have been greatly impressed by the incongruity of the debate. The first curious fact that forced itself upon my attention was the peculiar alinement of political interests. The Liberal party and the Australian Country party, if the Labour party is to be believed, can be relied upon usually to neglect the interests of the underprivileged and those who need government assistance, and to favour the privileged and those who are best able to pay. But, in this instance, the Liberal party and the Australian Country party are submitting a proposition that will place a weight on the backs of those who are best able to bear it. “We justify this proposition on the ground that the Government must have certain moneys in order to provide liberal social services, strengthen our defences, and finance other essential undertakings. The role that the Opposition has adopted in this debate is even more out of character than that which it attributes to the Government parties. Its members, who normally are eager to identify themselves with the interests of the workers and the underprivileged, and to attack anybody who has any substance, have objected to the imposition of the proposed levy on a very well-to-do section of the community. That role very ill becomes them.

I have listened to the debate with great attention and I acknowledge that it is impossible to refute some of the arguments that have been advanced by members of the Opposition. The honorable member for Eden-Monaro (Mr. Fraser) spoke of hardships that might fall upon small wool-growers, battlers who had only just made a start in the industry and people who preferred to work hard on small holdings in marginal areas as an alternative to working for wages. Those are the sort of men who, above all, need encouragement, and deserve our admiration. They have taken their families to live in great hardship in pursuit of the worthy objective of becoming their own masters. Any unfair imposition on such men must be deplored, but the Treasurer (Mr. Fadden) has taken their needs into consideration and the hardship provisions that he has included in the bill will protect them. It is misleading and wrong of members of the Opposition to suggest that those who are unable to bear extra burdens will be asked to pay any tax in advance under this legislation. I agree with the honorable member for Eden-Monaro that this measure will not help to put value back into the £1. But it is not necessary to attempt to justify the legislation by claiming that it will do so. It will stand on its merits, and I am prepared to defend it on that basis. Other steps can be taken to put value back into the £1, but that issue is not involved in this debate. I support the bill for the reasons that have been well stated by the Treasurer. I shall deal with it briefly under three headings.. The first relates to the need for the impost, the second relates to the justice of applying it to the wool-growers, and the third to the capacity to pay of those who will be asked to pay. I shall not weary the House by discussing at length the need for additional revenue at this time. The facts must be well known to all honorable members. A reasonable demand for increased social services, including medical benefits and higher rates of pensions, must be met. Unfortunately, the campaign on which our forces have embarked in Korea and the necessity for strengthening the national defences also place a severe strain upon the Government’s financial resources. I do not believe that any honorable member will argue that the Government has been extravagant in its use of the nation’s finances. At any rate, any honorable gentleman who wishes to argue that pensions should be reduced, that the defence programme should be pruned, or that the introduction of medical benefits has been untimely, will have the opportunity to say so when the Estimates are under detailed discussion during the next few weeks. We must face the fact that the money which is needed to meet essential commitments must be raised by some means. The Government has made a wise choice in deciding to obtain funds in the manner for which the bill provides.

Let us consider the justice of the proposal. I* am sick of the argument that this will be a discriminatory tax. What just tax is not discriminatory? Only those taxes which, are non-discriminatory are unjust. Surely it is unjust to impose a capital levy upon the poor and the rich alike! The sales tax on matches represents my conception of the most unjust tax that it is possible to levy, because every member of the community must pay it, regardless of his capacity to pay. Every fair tax that we have ever had has been discriminatory. Examples are the income tax, death duties, and the sales tax on luxury goods. Discrimination is of the essence of fair taxation. The assertion that the wool sales deduction is a discriminatory tax and. therefore wrong or immoral in some way is the clearest piece of nonsense. The proposed deduction will not be an additional tax, and members of the Opposition realize that fact just as well as do the supporters of the Government. In fact, I believe that most of the wool-growers are beginning to realize and that all of them will realize that truth within a very short space of time. Far from reacting unfavorably against the growers, the impost will prove to be a very sound move in the long-run and a very wise precaution on the part of the Treasurer that will enable them to meet their tax bills.

The wool-growers, like other primary producers, pay their taxes on the averaging system. They average their income tax over a period of five years. During the last two years, and particularly the last year, the prices of wool and all other primary products have risen at a breathtaking rate. Although the wool-growers average their income tax over five years, the result of the present price trends obviously will be that they will have to pay very large sums indeed. This situation is aggravated by the provisional tax system. If j at the end of a five-year period, a wool-grower has one very profitable season, such as the present season, not only will he have to pay a heavy tax for that year, but also he will be committed to a very large amount of provisional tax for the succeeding year. The woolgrowers will be expected to find a tremendous amount of money in order to meet their tax assessments, and .the Government’s decision to deduct payment at the source for the future settlement of that obligation is wise. The situation in relation to this plan is not dissimilar to that which prevailed in relation to the deduction of deferred pay instalments for members of the armed services during World War II. At first there was general indignation amongst the soldiers when they were told that they would not receive all of the money that they earned as they earned it. However, as time passed and their deferred pay credits mounted, they realized the significance of their obligations to their families and were glad to know that they would receive in the future substantial sums with which to meet obligations that they could not avoid incurring. A similar reaction will inevitably occur amongst the woolgrowers in relation to this scheme.

Let us consider now the capacity of the wool industry to meet this charge. After a great deal of thought and a careful examination of the facts I am convinced that no class, in any country is so capable of paying the impost as is the wool-growing community in Australia. The fact is obvious. The arguments of members of the Opposition to the contrary have amazed me. They have denied what they must know to be the truth. They have acted unworthily merely for the sake of whipping up hostility where none exists and for the sake of creating an illusion of hardship where, in fact, there is no hardship. Their attitude recalls to my mind a. statement that was made by Lloyd George when the House of Lords rejected a taxation measure that had been introduced for the purpose of financing defence undertakings in Great Britain prior to World War I. Everybody agreed that the measure was essential, but the House of Lords rejected it on the ground that the necessary revenue should not be obtained in the way that was proposed. Lloyd George commented, “ Their lordships are quite agreed that somebody has to find the money, but they prefer that that somebody should’ be somebody else”. We all agree- that the additional revenue must be obtained1. Undeniably the Treasurer has found the best method of obtaining it. I cannot believe that the wool-growers are so lacking in patriotism that they would object seriously to the very slight imposition that is proposed. I cannot describe the levy as a tax, because the only loss to the wool-growers will be a small amount of interest accruements that will be sacrificed during the course of the next fifteen months.

I ask members of the Opposition to consider the efforts that the Government and certain citizens of Australia are making for the nation at present. The people who are flying the flag for Australia to-day, and whose efforts have guaranteed that we shall obtain American aid should we ever need it, and of course, dollars, are the troops who are voluntarily serving their country alongside Americans in Korea. We owe a debt of gratitude to those men, and members of the Opposition should think about that before they try to convince us that the wool-growers are unable to make the contribution to the resources of the nation that the Government is asking them to make. I have never heard more despicable arguments than those that have been uttered by some members of the Opposition during this debate. Does anybody dare to tell me that the proposed deduction will involve any injustice to the wool-growers, considering the sacrifices that other Australians are making during this period of difficulty? I defend the bill without any apology. The Government needs the money, and those who will be asked to provide it are well able to do so. If honorable members opposite succeed, in whipping up hostility to this measure to such a great degree, and in defeating it in another place, so that a general election will be caused, then that will be just too bad for them. In any event, the Government believes that it has taken the right course in the interests of the country and it is prepared to stand by the consequences. I listened to the puerile attempts of honorable members opposite to point the bone at the Australian Country party by accusing that .party’s members in this Parliament of failing to protect the interests of electors whom they represent. I have had differences with the Australian Country party in the past but I have never respected its members in this House more than I now respect them because they have had the gumption to defend the Government on this occasion. That remark applies particularly to the honorable member for Hume (Mr. Charles Anderson). They have pointed out that whilst they oppose increases of taxation, on this occasion they appreciate the necessity for the Government to raise this money. They have also said that they cannot believe that the individuals who are to be called upon to lend the Government this money are unable to do so. Anybody who lacks a clear understanding of the Labour party’s opportunistic attitude to the wool-growers should study some of the remarks that honorable members opposite have made in this debate and in previous debates. I have net time to read a selection of them to the House. Anybody who thinks seriously on this question has no doubt that honorable members opposite, if they were faced as a government with the circumstances, with which this Government is now faced, would peg the price of wool at last year’s values although they pose as champions of the woolgrowers. We intend to put a slight burden on the wool-growers but the Labour party would have put a greater burden upon them. No wool-grower is foolish enough to believe otherwise.

Mr BIRD:
Batman

.- The further this debate proceeds the more evident it becomes that the Government is completely on the defensive in relation to this bill. I have detected many signs that honorable members opposite fully realize the impact that this proposed legislation is having on their former supporters in the country areas. The fact that the Government is losing support in the country areas is not to be wondered at, because this is one of the most amazing measures that has ever been submitted to this Parliament. It had its origin in the uneasy matrimonial partnership that now exists between the Government parties. The Liberal party section of the

Government proposed that revaluation of the fi Australian be employed as a method of combating inflation. That proposal, however, was not acceptable to the Australian Country party, and consequently this legislation has been submitted as a compromise. We first heard of this proposed bill in a speech by the Prime Minister (Mr. Menzies) when he informed the country of the steps that the Government intended to take to combat inflation. He said, amongst other things, that the Government would submit legislation of this nature. But this measure is not designed to combat inflation, although Government supporters contend that it is. The plain unvarnished fact is that the Government is on the horns of a. dilemma. Prior to the last general election we were told by members of the parties now in office that only the advent of an anti-Labour Government would give the country any prospect of a reduction of taxes. We were told also that a Labour government could not conduct the country’s affairs successfully, and that hard-headed business men were required on the treasury bench to make a reduction of taxes possible. As a matter of fact the Treasurer (Mr. Fadden) spoke on that matter prior to the general election and again dealt with it in March of this year, almost three months after the Government had taken office. As he had been in office for nearly three months when he made his statement in March it cannot be claimed that he made it in ignorance of the true position, although it might be claimed with more justice that he made his pre-election statement in such ignorance. However, I consider him to be too wily a politician to have been in ignorance of the position on the first occasion. In a statement published in the Melbourne Herald under his name on the 6th Mardi, he said -

Our first three months in office has necessarily been a- period of review, but a taxation review and a vigorous drive to cut expenditure are already well under way.

We now find that instead of a reductionof taxes the very reverse is happening. The Labour party does not contend that the wool industry as a whole is unable to pay the £103,000,000 to be raised by this measure. We say, however, that the whole principle of the bill is wrong. Why should one section of the community be singled out to spearhead the fight against inflation? I recall the fact that when deflation struck this country, twenty years ago, the government of the day introduced legislation to combat it, but it did not ask only one section of the community to make all the sacrifices. Every piece of legislation that it introduced was designed to spread the sacrifices over the whole community. Yet the only legislation that the Government has so far introduced for the purpose of combating inflation is aimed at a very small section of the community, the 91,000 wool-growers. The plain fact is that when the Treasurer set out to balance his budget he found that the estimate of revenue was £103,000,000 short of the estimate of expenditure. That was a big problem for the Government, because its members had told the people before the election that they would produce balanced budgets and reduce taxation. So the Government had to find some specious, expedient that would enable it to balance the budget. Consequently, it has introduced this legislation.

The measure is framed so as to hoodwink the people into believing that this is a business Government that is doing things in a businesslike way, but it has not hoodwinked the people. It has certainly not hoodwinked the electors who supported members of the Australian Country party at the last’ general election. Those members recognize the seriousness of the dilemma in which they now find themselves yet try to convince us that they have received very few complaints from their electors about this legislation. I have in my hand the latest issue, dated the 9th November, of the South Australian Wheatgrower, the organ of the South Australian Wheat and Wool Growers Association. Its first four or five pages contain complaints from woolgrowers about this legislation. In fact, page 4 is devoted entirely to such complaints. The front page carries a letter that is headed, “Wool Tax Protests”, and reads in part -

At a mass meeting at Chandada a week ago, and at meetings at Streaky Bay, Nunjikompita and other centres, the attitude of farmers towards this proposed 20 per cent. “ grab “ was one of uncompromising hostility.

It was considered that statements by government leaders comparing this proposed prepayment with ‘.’ pay-as-you-go taxation “ as applied to wage and salary earners, are entirely misleading.

Page 2 carries a letter that is headed, “ Wool Tax ‘ Confiscation. ‘ “, which reads in part; -

The whole of the pastoral industry has had an example lately of just how far our elected representatives will go, Country party members at that, when in a coalition Government - the confiscation of 20 per cent, of wool-growers’ earnings arbitrarily deducted, not by the growers, but by the woolbrokers. Obviously, the Fadden-Menzies menage do not intend the growers to handle any of this money. I wonder why?

Can the Treasurer justify this action, when, on the hustings, he loudly proclaimed, parrot fashion, that the reduction of taxation was one of the most urgent pressing needs of the moment, and in his first budget sales tax is being increased and 27J per cent, is to be filched from wool-growers’ earnings?

Page 3 carries another letter that is beaded “ Great imposition”, which reads in part -

This move of the Menzies Government is the greatest imposition that has ever been placed on the wool industry in the history of South Australia. This move gives no consideration to what wool producers have gone through in the dry areas in battling with droughts, wars, low prices and many, other difficulties.

High prices now being received enable the wool-growers to have a reasonable chance to get improvements effected on large and small holdings. These necessary improvements nui st be purchased at terrifically high and increased prices. Many of these jobs should have been completed years ago, but could not be dont? on account of the war, lack of labour and material.

Page 4 carries a letter that is headed, “ Wool-grower Scapegoat for Inflation “, the terms of which are similar to those of the other letters. Many like protests against the legislation could be cited to prove that members of the Australian Country party in this House and members of the Liberal party who represent country electorates either are whistling in the dark or are completely out of touch with what is happening in their own electorates if they consider that the woolgrowers support their attitude to this legislation. In an endeavour to appease their supporters honorable members opposite have asked why the Labour party has taken up the cudgels on behalf of the wool-growers. The truth is that the

Labour party has always championed the victims of injustice and tyranny, irrespective of whether they are Labour party supporters or not. We are concerned with the fact that the principle of this legislation is entirely indefensible and we do not care whether or not the wool-growers vote for us at the next general election as a result of the stand that we have taken. We rest our case on our contention that the principle that the Government is attempting to introduce is entirely wrong, and as we support the underdog on all occasions we must, of necessity, support the wool-growers in connexion with this matter.

Many wool-growers have only small holdings. The honorable member for Lalor (Mr. Pollard) made the best speech that has been .heard during this debate when he cited official statistics to prove that 73 per cent, of the wool-growers have only small holdings, and clip only between, one ‘bale and thirty bales of wool a year each from between 40 and 1,200 sheep. Surely the Labour party should not be vilified and abused because it pleads a case on behalf of small producers. In doing so it is only doing its duty.

Government supporters contend that the money to be taken from the wool-growers will be used to offset income tax payable on this year’s earnings and that refunds of it will be made in later years when the occasion is appropriate. If that is so, the most charitable statement that can be made about the measure is that the £103,000,000 should have been shown in the budget as a forced loan and certainly not as revenue. Not only is it a forced loan that is to be imposed on the woolgrowers so that the Government may be able to balance the budget, but it may also present incalculable difficulties in future years, because it will compromise in advance the revenue that would be normally collected in those years. The Treasurer is unable to tell us whether the scheme will operate for one year or for ten years. He has stated that it will be removed when economic circumstances permit that to be done. That is a most ambiguous statement. It could mean that the scheme could be continued for either one year or many years. If it were discontinued next year then next year’s ‘ budget would be deprived of revenue that should have been received in that year. If, on the other hand, it is continued over a period of years the time will come when it will have outlived it3 usefulness as a measure to combat inflation, which is what the Government has claimed it to be. When the Treasurer foreshadowed the introduction of the bill he said -

There is a pressing need to prevent the increased sums being realized for wool from adding to the inflationary pressure.

The mere fact of transferring this money from the wool-growers to the Government will not in itself ease inflationary pressure, because the Government intends to expend the money. There i3 not the slightest doubt that the Government is fast gaining the reputation of being a spendthrift government. If the money were retained by the wool-growers then perhaps some of it would be spent by them, but a large amount of it would be salted away for use in the difficult times that the wool-growers may have to face in the future. It would have been much better from the inflationary standpoint if the money were to be left in the hands of the growers.

This proposal can be criticized from many aspects. Despite the sneers of honorable members opposite about the Labour party’s attitude to the bill there is no doubt that the measure is blatantly sectional. One class of primary producers has been singled out to pay next year’s taxes in advance. Surely that is a sectional action and is unjustifiable. Not a scintilla of evidence has been produced to prove that the wool-growers should be the only target of this outrageous bill. Many branches of industry and commerce are at present earning profits never before dreamed about. Why the Government should single out the wool-growers is more than I can understand. The tremendous profits of these other industries are being utilized to accelerate the inflationary spiral and if the Government wants to do the job properly and to withdraw some of the money that is being used to the detriment of our economy it should tackle all industry. Victimization of one section by using it as the spearhead against inflation is definitely wrong and cannot be justified from any stand-point.

The wool-growing industry has done a lot in the interests of the Commonwealth. It has bolstered our economy over many years. One can readily understand the resentment of woolgrowers in this matter. They remember the years of drought and loss when bankruptcy was common and no sectional aid was granted to them. Now that they are enjoying a period of comparative prosperity and have a chance to consolidate their holdings and to provide against future years of difficulty this additional impost is to be placed upon them.

A very influential body, the Australian Primary Producers Union, is protesting against this bill. That body has instructed its solicitors that as soon as the bill becomes law they are to go to the High Court and contest its validity. The wool-growers, according to this morning’s press, requested the Treasurer to give them at least some indication of whether there was any chance of the bill being effective for only one year. Between the 30th June, 1950, and the 1st July, 1951, the wool-grower must meet the tax assessment that reaches him between October, 1950, and late 1951. This will be based on his return showing his income for the year 1949-50. Due to the higher wool prices, in many cases, this assessment will not meet his obligations for 1950-51. In addition to paying the amount of the assessment during 1950-51, the grower will have to pay 20 per cent, additional tax plus 7i per cent, for the wool stabilization scheme, so he will be hit in three ways in the one year.

Honorable members opposite have said in a pleased tone that the small grower will only have to go to the hardship commissioner and point out his disabilities in order to obtain relief from the provisions of this measure. If this hardship clause is to be generously interpreted by the commission that has been set up for this purpose, has the Treasurer taken into consideration the amount of tax that will not be collected because of hardship? The right honorable gentleman has estimated that £103,000,000 will be collected. I assume that he made that estimate on the basis that the deduction would be made from the incomes of 100 per cent, of the woolgrowers and did not make an allowance for any hardship cases; but from what I have read in the press there will be a lot of applications for remission of this imposition. It is quite possible that the Treasurer will find himself in a corner when he comes to a balancing of accounts at the end of the year. It may be that the £103,000,000 will have been reduced to £60,000,000 or £70,000,000 in which event the Government will find itself in an extremely dangerous financial position.

Honorable members have been told that this scheme is on all fours with the pay-as-you-earn scheme which was implemented by a Labour government six or seven years ago, and with which the wage-earner is quite satisfied. For the first year of the operation of that scheme nine months’ tax was remitted and the wage-earner was compelled to pay only three months’ tax for that period of twelve months. In other words, the Government made a generous gesture by foregoing nine months’ tax and taking tax in respect of only three months. But this bill proposes to take the lot and makes no provision for the remission of any portion, so it is absurd to suggest that it is on all fours with the scheme of the Labour Government. There is a terrific difference between the two schemes. On this occasion, the wool-growers will have to pay the entire amount.

Shorn of all pretence, this measure stands roundly condemned as one that offers no contribution to the solution of the problem of inflation. It will cause the wool-grower to contemplate decreasing his production because he may fear that, at a future time, he will again be singled out for a further dose of the same medicine. At the first opportunity - probably the next general election - the wool-growers will undoubtedly show their utter detestation of those who, while posing as their friends, used their legislative power to introduce an illogical and unrealistic measure to deprive them of their well-earned income.

Mr BERNARD CORSER:
Wide Bay

– The honorable member for Batman (Mr. Bird) seems disappointed that other measures have not been considered as alternatives to the provisions of this Wool Sales Deduction (Administration) Bill 1950. I have been associated with members of the Government parties in their consideration of the various propositions put forward, and I am proud to think that a’ scheme has been evolved which will not be detrimental to and will not place any hardship on any section of the community. It is the good fortune of the wool-growers and of Australia that there has been a colossal increase of the price of wool. It has been repeated often that in 1946, there was £25,000,000 of taxable income of the woolgrowers. In the year ended the 30th June, 1949, the amount was £120,000,000 and for the last financial year it was estimated at £372,000,000. Surely, in these troubled times, it is proper to call upon this section of the community at least to contribute a small amount to the country’s needs. The honorable member for Batman was disappointed that other suggestions had not been adopted. One suggestion was that a 25 per cent, tax should be levied on the wool-growers to produce £140,000,000 and that the rest of the taxpayers should find an additional revenue from income tax of £57,000,000. The Government did not increase taxation, but instead it asked the wool-growers to provide in this financial year a portion of the £47,000,000 needed for stock-piling the amount needed to pay war gratuities, the £140,000,000 required for war purposes and the additional expenditure on the pensions of our ex-servicemen and our old and invalid people and the improvement of the health of our children. Those are some of the purposes for which money is now required. Much of that expenditure has been occasioned by obligations incurred by the previous Government. One such obligation is repayment of the £16,500,000 deducted from the incomes of the wheat-growers. Then there was the proposal to revalue the £1 which would have affected those rural industries which export their produce. During and since the war the dairying industry’s products have been sold to Britain and on the local market at a fixed price and during the earlier part of the war they were sold locally at a great los3 in order to provide food cheaply for the people of this country. The Labour Government compelled them to do that until such a turmoil was aroused that it had to pay what it called a subsidy to the dairying industry. Up to the present time the wool industry is the only one that has not been asked to assist the Government to ensure that the price paid for their product in Australia shall be less than that paid by overseas purchasers. Sugar is sold in Australia at a lower price than is charged in :any other part of the “world, and that is mads possible only by the higher price that is obtained overseas. Even mow the Government does not propose to withhold permanently from the wool industry one penny of the gains it has made from the increased price of wool. The Government is merely asking that 20 per cent, of the income of growers be paid a little earlier than it would normally he paid. The money when paid will merely rest in the Treasury instead of in the local banks. Meat is sold overseas and in Australia at a fixed price. Hides and tallow are sold at prices which hardly meet the cost of producing them. Yet it is claimed that the wool-grower is the only one who is being asked to provide assistance to his country. A.11 other industries have been doing that for a long time. The wheat-grower supplies wheat to the home market at a price at which it cannot be produced. All the exporting agricultural industries in Australia do that. The egg-producers’ product is governed by price fixation. I am pleased that the suggestion for the imposition of a 25 per cent, direct tax on the wool-grower was defeated by the vigorous opposition of members of the Government parties who, throughout the consideration of this matter, wished to avoid increasing taxation while is was possible to implement the proposal now before the House.

The Opposition has submitted no alternative to this proposed action by the Government. However, I should greatly fear any alternative that it might submit because it would certainly not be in the interests of the wool-growers. It i3 pertinent to ask what the alternative might have been had one been submitted. Perhaps it would have been a 25 per cent, direct export tax or perhaps it would have been an appreciation of the £1 which would cause a loss of at least £100,000,000 :a year to the wool-growers and a loss to revenue of £57,000,000 a year. If the £1 had been appreciated every export industry, whether dairying, sugar-growing or any other would have had to secure assistance to meet its consequential 25 per cent, loss. Again, our secondary industries would have needed to be protected by higher tariffs, without which there would have been wholesale unemployment throughout Australia. Because revaluation would have caused losses to exporting industries Commonwealth revenues would have suffered a loss, and that would have .had to be made up by the taxpayers. If the exporting industries had incurred losses, the cost of living in Australia would have increased. Therefore, I cannot see what possible substitute the Opposition could have put forward for the Government’s action in this matter.

Since 1946 the aggregate income of the wool-growers has increased from £25,000,000 to £372,000,000, and this proposed deduction, considering the manner in which it is to be made, will surely not be an undue imposition when it is remembered that it is being made by a Government that has the interests of all producers at heart. If honorable members opposite had been in power they would have dealt with the wool-grower according to the policy of the Labour party. That policy is the nationalization of the means of production, distribution and exchange. Wool-growing is production, therefore the Labour party would not merely have made provision for an advance payment of income tax, it would have nationalized the industry and taken the lot. Neither the honorable member for East Sydney (Mr. Ward) nor any one else can gainsay that fact. They cannot say that it is not their intention to nationalize the wool industry, to take it over lock, stock and barrel, because that is a part of their fixed policy. The Labour party is disappointed to-day because the Government is merely asking the wool-growers to pay their income tax a year earlier than usual. To overcome its disappointment it has attempted to put itself forward as the champion of the wool-growers. Nothing could be further from the truth.

There has been exaggeration of the position of the small wool-grower. A man whose clip it was stated, was probably worth £50 in 1946, now receives £500 for it. What honorable members should bear in mind is that a grower of this type certainly has some other means of obtaining income. He probably does some shearing or other station work and grows a little wool as a sideline. One Opposition member opposes the early payment of the proposed deduction on the ground that the small wool-grower requires the money for the purchase of heavy machinery to grow feed for his 100 sheep. That is rot ! Such a man does not need bulldozers to clear his land and a £1,500 tractor and combination to cultivate the bit of lucerne that he grows for his 100 sheep. All such suggestions are made merely for the purpose of trying to hoodwink the woolgrower into the belief that he is being badly treated. The man who grows wool merely as a sideline is not typical . of the vast body of the wool-growers. When considering this wool proceeds deduction the wool-growers should also take into consideration the vast body of legislation sponsored by liberally minded governments for his benefit. He should also realize that revaluation of the £1 would mean a reduction of his income by 25 per cent. If the £1 is revalued that 25 per cent, will be lost to the wool-grower permanently every year, workers in secondary industries will become unemployed. If any wool-grower really believes that the revaluation of the £1 would be a better method of curbing inflation than the method adopted under this bill, there is nothing to stop him from expressing his belief by paying an extra 5 per cent, into the Treasury with the advice that the whole of it is a free gift. It is quite apparent that the Opposition is trying to arouse discontent among wool-growei’3 for party political purposes. Like the other 400,000 primary producers in Australia, the 90,000 woolgrowers should realize that the Government has their interests at heart and that the spurious sympathy of the Labour party has been inspired merely for party political purposes. I have no doubt that all reasonable wool-growers will realize the fairness of the Government, in all the circumstances,’ in making this deduction from the proceeds of their wool sales.

Mr WENTWORTH:
Mackellar

– Honorable members will remember the phrase concerning a wolf in sheep’s clothing. I had never quite realized the full significance of that saying until I saw honorable members of the Opposition trying to pull the golden fleece far enough over their heads to cover their real ideas and beliefs. I suppose that really as there are no wolves in Australia I should use the word “ dingoes “. But a good sheep dog is always able to detect a dingo even if it is masquerading in the synthetic fleece of sympathy. I am sure that the Opposition will not succeed in its plan to get the confidence and, incidentally, the votes of the wool-growers, so that it will the more easily be able to destroy them. The Labour party is the natural enemy of every wool-grower and of every other primary producer throughout Australia. It should be emphasized again that this bill will not impose a new tax or charge on’ any person. It merely provides that a tax due under another act will become payable at an earlier date than that on which it would normally be paid. It has been said that the wool contribution is discriminatory, and in a sense that is true. It is true only in the sense explained by the honorable member for Henty (Mr. Gullett) ; this is. that all effective taxation is discriminatory.

It is worth recalling that whereas the wool-grower is singled out by name in this bill, he has been singled out both by name and by circumstances for various benefits under the Income Tax Assessment Act. The wool-grower who has experienced both good and bad seasons has learned to take the good with the bad and realizes that fair is fair. Under section 75 of the Income Tax Assessment Act the woolgrower is entitled to very large deductions, which are not available to other members of the community about whom honorable members opposite have spoken so feelingly. It is also true that the wool-grower gets the benefit of the provisions for averaging under Division 16 of the Income Tax Assessment Act. Whereas income tax is ordinarily paid on the income received during the year, under the averaging provisions it is paid only at the rate applicable to the average income of the preceding five years. That has a double effect. When incomes are rising it postpones the payment of a heavier tax, but it also ensures that the total amount of tax paid shall be less than it would otherwise be. When rates are graduated in such a way that a higher income is taxed at the higher rate, it is clear that averaging, by reducing the rate of tax, lessens the total amount of tax payable. In addition, averaging makes for late effect of rising incomes on tax payments and yield ; and that is aggravated both by the fact that the wool-grower lodges his return a good deal later than does the average taxpayer and by the fact that the complexities that arise from the method of averaging delay the issue of assessments. Therefore, the lag between return and assessment is likely always to be longer in respect of the wool-growers than in respect of other taxpayers. It is true, as an honorable member opposite has reminded me, that other primary producers also benefit by most of these provisions although, perhaps, not quite to the same degree. However, as some honorable members have said, most of the other classes of primary producers have, by accepting home-consumption prices for their products, and by other means, made substantial contributions to the national economy. Honorable members will note from the budget papers that this year a subsidy of £20,000,000 is to be provided in respect of woollen goods owing to the rising cost of wool. That subsidy will fall on the general budget and not on the wool-grower in the way in which the subsidy represented by the home-consumption price for wheat falls on the wheat-growers. I do not want to give the impression that I believe that none of those provisions should operate. All of those concessions are deserved by those who benefit from them and they should be maintained. I do not advocate that any of them should be withdrawn. My point is that if this proposal discriminates in any way against the wool-grower it is counterbalanced by the discrimination that has operated foi many years, deservedly, perhaps, in his favour, under the Income Tax Assessment Act.

I should like to consider the measure under three heads. Will its effect upon the individual wool-grower be equitable? Will its effect in relation to the budget be in accordance with sound finance ? And will its effect in relation to the public be in the public interest ? I shall discuss each of those heads separately. First, the individual wool-grower generally lodges his tax return each year about October, or November. That return relates to income that he has earned in the year that ended on the preceding 30th June, and his assessment is issued about the end of the financial year and generally becomes payable in May, or- J une, or early in the succeeding financial year. That is the normal procedure so far as the wool-grower’s assessment is concerned. In addition to tax in respect of the income of the year that closed on the preceding 30th June, he pays provisional tax in respect of the income of the year that will end on the following 30th June. But at no time does he pay provisional tax substantially in advance. Honorable members who can recall the circumstances in which the provisional tax was introduced will remember that it was designed to bring as far as possible current payment against current income, and that it was thought that in the case of a taxpayer who paid his tax in a lump sum, a portion of the payment being in advance and portion of it being in retard, equity would be done. But, at present, almost all of the wool-grower’s tax invariably is in retard, although there are exceptions to that general rule. The provisional tax is seldom paid until the end of the year to which it is applicable. This measure does in a sense provide for the payment of an additional provisional tax in respect of the following year, and in advance of the receipt of income. But, generally speaking, only a fraction of the tax in respect of the following year becomes so payable. By reason of the averaging provisions and other methods, the full incidence of the rise of income is not reflected in the yield of tax. Consequently, this proposal is equitable because the sole effect of the additional provisional tax provision will be to balance a lag from which the wool-grower is receiving a benefit that other taxpayers do not receive in full. So, from the viewpoint of the individual wool-grower this proposal is equitable.

It will also be .beneficial for two reasons. The first of those reasons is that the average wool-grower has so far had little experience of paying a substantial tax because hitherto not only has his income been comparatively low but he has also had the full benefit of the averaging provisions and accordingly has paid tax at low rates. Consequently, as he may not realize the degree of tax liability that he will have to meet it will be salutary for him to be reminded of that fact -at this stage so that he will not expend in advance money that will normally be due to the Treasury. I also remind the House that by reason of the averaging provisions the wool-grower has what I should call a phantom debt in the books of the Treasury. He has received the benefit of averaging in years of rising prices. When he had a high income he paid tax at a low rate. But conversely, if prices fall he will have to pay tax on a low income at a high rate. In the past he has had the benefit of this phantom debt in the Treasury’s books the implications of which he may not have fully understood. He may find, in fact, that his tax in the future may be heavier than he has been led to expect because of the averaging provisions. .So, from the viewpoint of the individual wool-grower this proposal is not only equitable but may also be beneficial by saving him from financial embarrassment in the future when the tax load falls most heavily upon him.

I shall now examine the proposal from the viewpoint of the Treasurer and of the budget. After all, under it the Treasurer has to some degree anticipated the receipt of income that would technically be taxable in the future. That is due, as I have said, to a technicality. That income is being earned now although, owing to the method of assessment, the method of provisional taxation and the method of averaging income being earned now, from the standpoint of the Treasury it may noi become technically taxable until future years. In such circumstances it is not unreasonable to take a part of that income as prepayment of tax. That is a sound business practice. Even if the Treasurer has anticipated in having budgeted to receive £103,000,000 in respect of this year a cursory examination of the figures will show that thefull benefit that will come to theTreasury by reason of the present upsurgeof prices for wool will he not less than £200,000,000 at current tax rates. Thus, even if the Treasurer has anticipated tax he has done so only technically and has- anticipated only a part of the amount that will become due for payment at current rates of tax. This year the Government must meet unavoidable commitments in respect of defence and of certain nonrecurring items. The honorable member for Batman (Mr. Bird) explained what happened, when the provisional tax was first introduced. Honorable members will recall that over a large part of the taxation field the Government then took into credit fifteen months tax in twelvemonths, and even in the two subsequent years it still took a part of the followingyear’s tax under the per cent, surcharge provision in respect of income tax that was paid in a lump sum. Thus, a precedent exists for this proposal, which from the standpoint of the Treasury is sound finance.

I now come to the effect of the proposal from the viewpoint of the public, which should be the dominant concern of the Parliament in dealing with it. This measure is an anti-inflationary device. Its object is to reduce the pressure of money by skimming off spending power at the source. Some honorable members opposite have advanced the wholly fallacious, argument that because the Treasurer is going to expend the money that isdeducted the proposal is, therefore, inflationary. Where is the sense in that statement? The Treasurer must make provision for commitments in respect of” defence, and he is doing so. If these deductions were not made from the incomes of wool-growers, the Treasurerwould have to meet such commitments by means of treasury-bills. If that weredone the money would be expended twice, that is, by the taxpayer and by the Treasurer. Under this proposal the money to be deducted will be expended only once. The proposal is thus antiinflationary to the degree of £103,000,000- which while not sufficient, perhaps, to- meet the Government’s requirements in view of existing circumstances is, nevertheless, a substantial sum. If that sum were not dealt with as the Government proposes to deal with it under this proposal, it would come up twice for spending, by the growers and also by the Government which has to meet unavoidable commitments for social services and defence. If the sum of £103,000,000 were not withheld in this way, there would be a big surging movement in hank deposits and advances because it would become depositable as the proceeds from wool sales came in and would be withdrawn as provisional tax went out later in the current year or early in the next financial year. That would mean that the funds of the banks would move very suddenly and with big fluctuations. Although the economic system as a whole could stand such movements, nevertheless they might be a little embarrassing if full co-operation was lacking on the part of the Commonwealth Bank ; and, having regard to the delay in passing the Commonwealth Bank Bill, we cannot be quite certain of what degree of co-operation will be forthcoming from that institution. So, from the technical banking viewpoint much can be said in favour of this proposal under which a substantial volume of- purchasing power will be skimmed off at its source. Furthermore, if these deductions were not made, general tax levels would have to be increased in other fields. Finally - and this is the most important point - the Government requires this money for defence, and defence cannot wait. In spite of some belittling references that have been made by Opposition members to the defence requirements, there should be no delay in making adequate provision for our security. After all, a great proportion of the high price for wool is due to defence measures, and to the necessity for stock-piling by the United States of America. Because of those factors, prices have risen, and additional money is coming into the hands of the woolgrowers. Surely it is not inequitable that some of that money should be used primarily for the purposes of defence and for financing measures for the security of the country. I do not believe that the wool-growers are blind to that consideration. I have had many communications from them during the last two or three weeks, and it appears to me that there is a growing realization among them of two things: first, that the wool sales deduction will not press on them harshly or inequitably; and, secondly, that there is an overriding need to provide for defence in the present national emergency. I believe that the administration of this bill, through the Treasurer, will be so sympathetic in detail that hardship will be avoided, and inequity will not be done to any individual.

Mr DUTHIE:
Wilmot

.- I am sure that the wool-growers of Australia will send letters of thanks to the honorable member for Mackellar (Mr. Wentworth) for his summing up of the situation, and for supporting this bill. But I confess that I am astonished to learn that an honorable member who represents a city electorate should receive many letters from wool-growers about this legislation. I represent a rural electorate, in which So per cent, of the wool clip of Tasmania is produced. My constituency covers more than one-half of Tasmania, and some of the sheep stations in it are 85,000 acres, 64,000 acres, 50,000 acres, 25,000 acres and 15,000 acres in area. Last year, the world’s record price for wool was obtained for a clip grown by Taylor’s on their station in Wilmot. I may mention, in passing, that I do not know whether those people support me politically.

The wool sales deduction scheme is discriminatory, ill-considered and illconceived. I .describe it as the child of the shot-gun marriage of the Liberal party and the Australian Country party, and its birth occurred in an atmosphere of ill-concealed party political warfare. It was written down by the press, and Ministers tried to convince us that no cleavage had occurred between those two parties, but we know that they were engaged in a big fight behind the scenes. The Liberal party advocated the revaluation of the Australian £1. to which I am definitely opposed, and I am glad to say that the Australian Country party also objected to it, because it would reduce by approximately 20 per cent, the incomes that ‘primary producers receive from the sale of their commodities in the markets of the world. The Prime- Minister (Mr. Menzies) fell into the trap, and abandoned the revaluation proposal for the compromise that is represented by the wool sales deduction. In order to avoid a schism in the Cabinet, that compromise plan was evolved, and wool-growers will be required to pay that tax in addition to the levy of 7-£ per cent, which had been agreed upon to finance the post-joint organization scheme.

Why wa3 the wool sales deduction proposal adopted? I wish to be quite fair in this matter. Some action has to. be taken to curb the inflationary conditions in this country. Had the Labour party been in office, it would have been just as worried as the present Government is about the inflationary trends. But a Labour government would not have passed them off as of little or no account, and hoped for the best. The present Government has been compelled to evolve a scheme for combating inflation, but it is weak because the Cabinet is divided regarding its merits. Had the Government been formed by one political party, probably a much better plan would have been born. However, I concede that the Government has had to take some action to curb inflation. What is its plan? The matter has been discussed so exhaustively that 1 shall not refer to that at great length, but, briefly, it is to withhold from wool-growers 20 per cent, of their gross incomes for this year. The wool sales deduction will be made at the point of brokerage, and the wool-growers will receive a slip which they will forward to -the Commissioner of Taxation at a later date to show the amount that has been deducted from their wool cheques. It will be tough on the wool-grower in the Northern Territory, who has already received payment for his wool and will have to write a substantial cheque for the Treasurer.

Mr Fadden:

– That would be terrible.

Mr DUTHIE:

– It will not please the wool-growers concerned. They have received their complete wool cheques, a ad they will have to pay to the Treasurer the amounts represented by the wool sales deduction.

Mr Fadden:

– Many other people are in a similar position.

Mr DUTHIE:

– The operation of paying tax is not so painful when a deduction is made from the taxpayer’s salary each week or fortnight. The wool-growers will be required: to make a prepayment of tax. The wool sales deduction has no relation to the pay-as-you-earn system of income tax. References by previous speakers to the last-named subject were designed to draw a red herring across the trail, and they should be disregarded. What are the reactions of wool-growers to this scheme? Honorable members know their own reactions to it. They are coloured considerably by their own political views. Let us see what people outside the Parliament think of the wool sales deduction. I cite, first, the Sydney Morning Herald, a strong supporter of the graziers and of the ‘Liberal party and the Australian Country party. When the Treasurer presented his budget tq the Parliament, that newspaper published the following comment, under the heading, “Mr. Fadden’s budget will not hold inflation “ : -

Mr. Fadden’s budget cannot be regarded as an effective instrument to fight inflation. . . It is only by specious expedient of including the proceeds of his wool levy as current revenue that Mr. Fadden achieves a balance. If this prepayment by woolgrowers is to figure in the Budget for the current year, it should be classed not as revenue but as a forced loan. This is not only bad finance, it is also inflationary, since by no means all of it would be spent if it were left in the hands of the producers . . . this is discrimination of the sharpest kind.

I had not heard of The Pastoral Review and Graziers Record before I read a reprint of an article that had appeared in it, entitled “ The wool-growers and the inflation problem “. I shall read the first and last paragraphs in order to give a proper impression of the opinions of the writer -

Though the high wool prices are undoubtedly an inflationary factor they are not the only one, or even the main one, and woolgrowers are justifiably resentful that while politicians, economists, and the daily press persistently proclaim what a splendid idea it would be to take a considerable proportion of the growers’ income out of circulation these same pundits have very little to say about the necessity for other sections of the community contributing something to a solution of the problem.

There could, however, be no more effective way of discouraging or preventing ari increase in production than by subjecting wool income to a discriminatory tax and thereby imbuing wool-growers with the fear that at any future time, to meet any imagined economic or political needs, their industry might be singled out for a further dose of the same medicine.

Mr Hasluck:

– When was that article published ?

Mr DUTHIE:

– On the 16th September last. What have been the reactions of wool-growers in my own electorate to the wool sales deduction proposal? I have received telegrams from graziers’ organizations in the following centres: - Hamilton, Bothwell, Brighton, Oatlands, Campbelltown, Longford and Evandale. I am asked, in each of those telegrams, to place before the Prime Minister the protests of the graziers concerned against the wool sales deduction proposal on the ground that it is discriminatory.

Mr Eggins:

– Did the honorable gentleman inspire those telegrams ?

Mr DUTHIE:

– No, they were unsolicited. However, I was very pleased to receive them.

Mr Chifley:

– Honorable members opposite have received many more telegrams of protest.

Mr DUTHIE:

– The Leader of the Opposition (Mr. Chifley) has hit the. nail on the head. Government supporters have received relatively few protests against the wool sales deduction compared with, the number of protests that they received against their opposition to the preceding Labour Government’s proposal to nationalize banking. The latest report that has appeared in the press concerning this matter was published in the Sydney Morning Herald, on the 16th November. That report stated -

The Australian Wool -growers’ Council decided yesterday that the latest amendments to the Wool Tax plan did not remove one of the Council’s major objections. After a special meeting of th<> Council in Sydney an official statement was issued in the following terms: - “ The legislation as it stands has indefinite duration. The Council feels very strongly that the proposed deduction on wool-growers’ gross returns should not be made beyond the year ending June 30th, 1951, and that the legislation should provide for this limitation “.

A wool-grower in the electorate that I represent, who had not met me, and, in fact, had criticized me publicly some time ago in a letter published in a newspaper because I had advocated the nationalization of banking, telephoned me after he had heard about the first scheme considered by the Government, under which the Government proposed to impose a levy of 33-J per cent, on the proceeds of all wool sold. I have no doubt that he is a dyed-in-the-wool Liberal supporter. When he complained about the proposal to exact a levy from the wool-growers, I tried to be fair to the present Government by telling him that the original plan for a deduction of 33^ per cent, had been modified considerably. He replied -

That does not matter. The mere fact that a Liberal Government, after the way it has criticized Labour, should think of such a scheme is enough for me.

He went on to tell me ‘that his faith in this lily-white Government had been shattered. Whilst I do not suggest that I shall receive that gentleman’s vote at the next general election, I think that his changed attitude towards the present Government is probably a reflection of the general feeling among primary producers. I also received a telegram from the Tasmanian Farmers, Stock Owners and Orchardists Association in the following terms:-

Re Wool Tax Bill. Consider essential you press for following conditions (1) prepayment should apply to current year only (2) prompt repayment ‘balance when deductions exceed income assessment (3) adequate provision for prompt relief in necessitous cases (4) abolition in event sudden drop in values below last years values (5) money collected frozen until income tax normally payable as real contribution to countering inflation . . . Tasmanian Farmers Stock Owners and Orchardists Association.

The organization that despatched that telegram is a big one and it is in favour of the principle of the present legislation. Nevertheless, it is clear that it strongly criticizes the form of the Government’s proposal, and I consider that even at this late hour the Treasurer should give consideration to the views expressed in that telegram.

Mr Thompson:

– How can “hot money “ be “ frozen “ ?

Mr DUTHIE:

– I do not know. I believe that when considering any legislation we should invariably ask ourselves the following questions, and receive satisfactory answers to them before we approve of the legislation: - (1) Will the legislation serve the purpose for which it was introduced? (2) Will it be effective? (3) Will it operate justly? After considering the present measure I am certain that any fair-minded person must answer “ No “ to each of those questions.

The Government claims that its purpose in introducing the legislation is to curb inflation. In fact, when the Government first considered making deductions from the wool-growers’ earnings it announced that it proposed to curb inflation. It is a mere sham and a subterfuge for the Government to suggest that it is necessary to deduct approximately £103,000,000 from the wool-growers’ incomes in order to finance defence projects, and to pay war gratuity and other commitments. If this measure is viewed objectively as an attempted blow at inflation it is obvious that it is puerile. In fact, it will be about as effective in preventing inflation as a wall of sand would be to prevent the rising of the tide on a beach. The Government contends that the measure will enable it to draw off surplus money and so prevent unnecessary spending. Of course, one way to curb inflation would be to withdraw the money entirely from circulation by “ freezing “ it. However, the Government does not propose to “ freeze “ the money by placing it in a trust fund for repayment to the wool-growers as the tide of inflation recedes. It has admitted that it will pay the estimated proceeds of the tax deductions, which will amount to approximately £103,000,00Cf, into general revenue in order to balance its budget. That means that the money will be expended by the Government and that it will go into circulation. How will that restrict inflation? When the Government says that the money is to be used solely to pay war gratuity and other commitments, it is clear that it is indulging in a deliberate subterfuge.

The anti-Labour parties used formerly to contend that the graziers were carrying this country on their backs. Now we are told that the sheep are carrying the graziers on their backs. Why should the Government single out one section of the community to bear the whole of its economic burdens ? This proposal was not included in the policy speeches election campaign. Why cannot the delivered by the present Prime Minister (Mr. Menzies) and the present Treasurer (Mr. Fadden) during the last general Government be honest and tell the peoplethat this proposal has been introduced in order to assist it to pay its way?’ Why try to fool the people into believing that the measure was designed in order to strike a hammer blow at inflation? The Government may be fighting inflation, but if it is, it is doing so with kid gloves.

Adverting to the three questions that I suggest we. should ask ourselves when considering this measure, the first question that I ask myself is, will the bill serve the purpose for which it was introduced, which is to counter inflation? The answer is “ -Absolutely no “. The second question that I ask myself is, will the measure be effective? It will certainly not be effective in countering inflation, but if it is intended to enable the Government to get money to balance its budget it will be most effective. Of course, we realize that the present Treasurer wanted to be able to produce a “ glamour “ budget in the first year of office of the present Government. He wanted very badly to balance his budget, and the only way in which he could do so was by taking from the wool-growers the money that he needed. Then I ask myself the third question, Is the measure just? The answer is “ Definitely no “. This is a selective, discriminatory and unjust measure. The Government was in desperate straits to raise money and was in a state of panic because of the rising tide of inflation. This may properly be regarded as a piece of panic legislation. As I said previously, it is a child born of the “ shotgun marriage “ between the Liberal party and the Australian Country party. The Government hopes to gather in its drag-net all the sheep-growers, irrespective of their wealth or their ability to meet what is demanded of them. The proposal certainly cannot be justified on moral, religious or ethical grounds. No atempt has yet been made by the Government to levy an excess profits tax on all those who are fattening on the sheep-raisers. The speculators, profiteers, black-marketeers, stock-exchange barons, woolbrokers and directors of big companies will go scot free. All they will be called upon to pay is their ordinary income tax. I remind honorable members that the Government has not yet ina.de any effort to give effect to its undertaking to re-introduce control of capital issues. Apparently the Government’s statement of good intentions in regard to these matters was mere talk.

Why should the wool industry be selected for this unjust treatment? After all, the wool-growers have never asked for governmental assistance. They have battled through the successive economic storms under their own power. They have never cried out to the Government for a subsidy. I remind honorable members that the depression very nearly crippled the wheat and wool industries. In fact, it is a wonder that those industries ever recovered from the shocking treatment that they received from the financial institutions during the depression. Because of the restriction of credit and the dead hand of mortgages, thousands of farmers were forced off their land by the burden of debt which they then bore. Even as late as 1936 there were 2,750 deserted farms in Western Australia and 2,000 in Victoria. It has been estimated that from 1,500 to 1,700 fanners were made bankrupt in South Australia in a few years. I remind honorable members opposite that the terms and conditions of life were dictated during the depression, not by the elected government of the people but by the bankers. The bankers even prescribed what entertainment people could have, the clothes that they should wear and the food that they should eat.

A royal commision was appointed in 1935 to inquire into the state of the wheat and wool industries. The survey made by that royal commision revealed that there were 41,807 wheat farmers and about 90,000 wool-growers. Their total debts amounted to £2S8,000,000. Those debts were owed to trading banks, private mortgagors, the Crown, (wool firms, trustee companies, State banks and insurance companies. Twenty thousand farmers left their properties. Interest of 5 ner cent, on the total indebtedness of farmers amounted to £14,000,000. Sixty million bushels of a total of 130,000,000 bushels harvested in 1935 were required to pay the. interest on wheat-farmers’ debts. In other words, ls. 3d. a bushel was spent in paying interest charges. According to the report of the royal commission 60 per cent, of the wheat-farmers could not pay their way.

Mr DEPUTY SPEAKER:

– Order ! The honorable gentleman cannot proceed along those lines, but must confine his remarks to the bill.

Mr DUTHIE:

– I was leading up to the point that the wool-growers of Australia owed interest on their debts of £7,000,000. That meant that the wool clip of 21,000,000 sheep of Australia’s total flocks of 74,000,000 sheep was required to pay their interest charges. In other words, the wool from approximately one sheep out of every three was required to nay interest charges, apart altogether from the wool-growers’ need to have sufficient money to support themselves, cover the cost of maintaining their sheep and paying labour.

Although we have now enjoyed three good seasons during which high prices have been paid for wool many small farmers still have substantial debts to discharge. Nevertheless, the Government proposes to take from them 20 per cent, of their gross incomes one year before they should be called upon to pay their income tax. The sum of £103,000,000 which the Government hopes to obtain by this harsh treatment of the wool-growers, will be used by it, not for the benefit of the wool industry, but on other projects. Of 90,000 men who are engaged in raising sheep in Australia to-day, 70,000 have only small flocks each of which produces approximately 30 bales of wool or less a year. The. proposed grab by the Government is ruthless. The Government will not make any distinction between the small sheep farmers, whose income is limited, and the wealthy graziers. Of the 70,000 small sheep farmers many have still to repay money borrowed on mortgage and to meet interest payments, to say nothing of the money required for the upkeep of their flocks and properties. Many small sheep farmers, who are only now getting their heads, above water, have planned to equip their properties with new fences, sheds, and sheep pens, to increase water storage facilities and to improve their flocks. What will happen to them when this measure is implemented? Their plans will have to go into cold storage. In the meantime their productive capacity will suffer and many small sheep stations and farms will fall into disrepair. Costs are rising all the time, and the consequence will be that sheep farmers whose money will be withheld until next year or the following year, or even the year after that, will find when they eventually receive their refunds that their money will be worth even less than it is now. The hopes of so many of these deserving people of improving their homes and properties will fade even further. What a miserable prospect the Government holds out to these small farmers! We do not even know for how long the scheme will operate, because the Treasurer has not told us. It might be for two years, three years, or even longer.

I am not naive enough to believe that Labour will win many votes from the 20,000 large graziers in this country nor, for that matter, from the 70,000 small farmers. Wool-growers as a class are notoriously conservative and are inherently opposed to Labour. Unfortunately, many of them believe the lie that has been repeated so often by the antiLabour forces that the Labour party wants to socialize everything. So, in spite of the broken promises which the anti-Labour parties have made to the primary producers of Australia, they will probably succeed in retaining their votes at the next general election. However, many farmers will probably see the light and withdraw their allegiance from the Australian Country party, which they have always looked upon as their political protector. Of course, the interests of the farmers have been torpedoed by the Australian Country party, which is the barnacle on the coalition ship. I do not believe that political considerations should come first in matters of national importance. They should come only second or, for that matter, a very bad last when they conflict with the national interests. I have not put forward these points in order to win votes for myself or for the Labour movement, because I do not believe, for the reasons that I have given, that we shall win any votes by our stand in this matter. However, it is my duty to pinpoint in- justice, and injustice is clearly evidenced in the discriminatory nature of this legislation. In conclusion, I express the belief that when the bill is passed we shall find that many of the Government’s plans will go by the board, and that in the long run the scheme will prove to be absolutely inadequate as a counterinflationary measure.

Mr TURNBULL:
Mallee

.- Before dealing with the most important aspects of this matter I shall reply to some of the points made by the honorable member for Wilmot (Mr. Duthie). He said that many wool-growers have made plans to effect improvements to their properties. I believe that the prosperity of the wool-growers benefits the whole nation. The more improvements they make the better. The greatest assets that we have in Australia are well-kept, highly productive farms and stations. Every argument is either logical or otherwise, and the argument that was employed by the honorable member for Wilmot was illogical. When a man engaged in any occupation makes plans for improvements to his business, the purchase of a motor car, or the construction of a house, he bases them on the income that he is then receiving. Even the experts in their wildest flights of imagination did not dream that there would be a 100 per cent, increase of wool prices this year. Therefore, the proposed deduction of 20 per cent, from the earnings of wool-growers this year cannot possibly prevent them from carrying out the plans that they made on the basis of last year’s income. I refer honorable members to the following interesting newspaper item: -

Australia’s wool cheque for the first three mouths of the current season was more than double receipts for the corresponding period of 1949-50.

Proceeds from Australian wool sales during the quarter ended the 30th September were £66,594,243 against £28,812,383 in the previous year.

Sales this year at 456,339 bales were 58,027 bales less.

The enhanced prices are of great importance to Australia, but honorable members should use logic when they make speeches in this Parliament on the subject. They should be reasonable and they require to have some knowledge of the industry that they are discussing.

I have listened very carefully to this debate and I have studded the bill. Furthermore, I have been associated with the industry as a primary producer and as a live-stock auctioneer for the whole of my life. Some honorable members have, criticized me because I was an auctioneer, but the fact is that, while I was an auctioneer, I was always battling to get the best possible prices for the producers. In addition, unlike many who remained on their properties, I travelled extensively about the country and saw all classes of sheep, all classes of men and all classes of farming land. This, fact led to my election to this Parliament.

Mr Haylen:

– What an amazing career !

Mr TURNBULL:

– It has not been so amazing as that of the honorable member for Parkes (Mr. Haylen), who apparently graduated from journalist to wool expert in three short lessons.

Mr Tom Burke:

– Has the honorable member reduced the commission that he charges now that wool prices have increased ?

Mr TURNBULL:

– I am not engaged in the business of auctioneering now, nor have I been for the last ten years. Shortly after my return from overseas, in 1945, I was elected to this Parliament, and thus missed the benefit of the high prices and consequent high commissions. I have reached certain conclusions as a result of my study of the bill. I shall state them for the benefit of honorable members.

The provisions of the bill have nothing whatever to do with the Copland plan. There has never been any discussion of the Copland plan at meetings of the Australian Country party or at joint meetings of the Australian Country party and the Liberal party.

Mr Curtin:

– The honorable member should not give away any stable secrets.

Mr TURNBULL:

– There are no secrets about this matter. Every supporter of the Government knows the facts, and I should not be held in high regard by my colleagues in the two Government parties if I misstated them in any way. No consideration was given to the Copland plan, but members of the Opposition continue to declare that the bill provides for a modified version of the Copland scheme. That is not true, and the sooner the people know that the Opposition is trying to misrepresent the purpose of the measure the better will it be for the country. Many electors are misinformed about the qualifications of certain members of the Opposition in relation to primary industries. One man remarked to me recently that the honorable member for Parkes must be a representative of the primary producers. He was under the impression that the name of the electorate had some association with the country town of Parkes in New South Wales. I informed him that it was a. metropolitan constitutency and that I did not think that any elector in that division produced even a pound of wool or a bushel of wheat. The honorable member for Lalor (Mr. Pollard) represents some primary producers, but his electorate includes the city of Sunshine and it is from there that he gets his majority. Nearly all members of the Opposition represent metropolitan areas. In order to do their jobs correctly, therefore, they should naturally try to obtain f foodstuffs and clothing as cheaply as possible for the people whom they represent. However, they tell us that they are fighting all the time on behalf of the woolgrowers. The wool-growers and other primary producers realize that, if the Labour party ever regains power, it will institute a plan, to which it is irrevocably pledged, for the socialization of the means of industry, production, distribution and exchange. Men throughout Australia who are aware of that fact must feel sick when they hear the speeches of members of the Opposition in this debate.

The next conclusion that I have reached in relation to the bill is that the 20 per cent, deduction from the proceeds of this year’s wool clip will not be an additional tax. I. refer the Opposition to a leading article that was published recently in a newspaper that its members have often quoted in this House - the official organ of the Victorian Wheat and Woolgrowers Association. The honorable member for Lalor has on occasions held that journal in high regard, that article stated -

The Wool Sales Deduction Act presented to Federal Parliament last week provides for a prepayment of income tax by woolgrowers, but is not in any way a special tax on wool.

Those who have perused the bill know that the 20 per cent, deduction will not be an additional tax, I noticed that members of the Opposition were silent in response to that statement!

Another conclusion that I have reached is that the amount to be collected by means of the deduction will retain the certificated individual identities of the growers and will be applied by the Commissioner of Taxation in payment of income tax for the year concerned. The Commissioner will refund to the producers any amounts in excess of the tax payable. That fact is completely in accord with the following statement of policy which I made recently: -

I am absolutely opposed to any export wool tax, levy, or impost, or any such legislation in connexion with primary production, where the money subscribed would lose the certificated individual identity of the men by whom it was produced.

Sitting suspended from 6 to 8 p.m.

Mr TURNBULL:

– It is vitally important that the wool-grower shall retain his certified individual identity in connexion with the amount that he contributes. “We had instances in the past of what can happen if that is not done. During the regime of the last government the wool-growers lost £7,000,000 or more of the proceeds from skinned wools and similar products that they contributed to a government scheme. That money was retained by the Chifley Government, which, it is said, expended it for purposes connected with the wool-growing industry but it was lost to the individual grower. The Treasurer (Mr. Fadden) has taken notice of that occurrence and has exempted skinned wools from the provisions of this legislation, because it is impossible to give certificated individual identity to such wools. The Treasurer has twice confirmed in this House recently the fact that legislation for the purpose of levying an excess profits tax is to be introduced to the Parliament during the present session. A number of honorable members have asked during this debate why other sections of the community should not be taxed on the excess profits they are making. All sorts of big companies, monopolies and wool agents are making great profits and this legislation should take care of them.

The measure contains adequate provision to deal with cases of hardship. I point out that had there been any prior indication that there would be a 100 per cent, increase of the woolgrowers’ returns this year, the provisional tax collected from woolgrowers would have been increased at the very least by the amount that the Government now proposes to collect under this measure. The Treasurer has said clearly that the measure will operate only so long as economic circumstances render it necessary and that it will be reviewed by the Parliament next year. That statement is very important, because some honorable members who have spoken during this debate, as well as some people outside the Parliament, have asked for how long the measure will be applied. It will have to be reviewed every year. It will be readily seen that if there is no further sharp increase of the price of wool next season the need for such legislation will vanish because it will be rendered unnecessary by the normal machinery for the collection of provisional tax. This proposed tax prepayment by wool-growers will make it unnecessary for the Government to release Treasury bills to raise the amount of about £100,000,000, the need for which led to the introduction of this measure, and to that degree the inflationary spiral will be retarded.

I shall attempt to answer some questions that ha”ve been asked during this debate. One was on the subject of why the money is needed. As other honorable members have already stated, the Government has to meet in the current financial year an expenditure of £67,000,000 for war gratuities and at the same time it has to finance a great defence effort. As far as our defence effort is concerned, the level of wool prices is a good enough indication to me that war is not far away. “War can be averted only by the free nations being ready and letting possible aggressors see .that they are strong. The budget is a big one and. it gives a fair deal to ex-servicemen, widows and age and invalid pensioners. Totally and permanently incapacitated pensioners are to get a better deal under its provisions than they ever did when the Labour Government was in office. The money that the measure seeks to raise is necessary, and is to be put to good use.

I do not. agree with some honorable members, even on my own side of the House, that wool-growers can be compared with wage-earners in matters of taxation. Unlike the average wage-earner the wool-grower has to contend with floods, droughts, bush fires and superfluous politician’s. Sometimes a wool-grower sustains the loss of his whole flock. The trade unionist, on the other hand, is paid week after week, irrespective of the vagaries of the seasons, a wage that is based on the cost of living. The only setbacks that he has to face are those that are caused when a Communist trade union leader calls a strike, such as the railway strike that is now current in Victoria, which gives no benefit to anybody but gives satisfaction to the agents of a foreign power. It is apparent that honorable members opposite know very little about the wool-growing industry. They have been crying out, “ What about the sheep dealer ? “ I am more concerned about, the small farmer than I am about the sheep dealer. Once upon a time a sheep dealer depended on the resale to pay for sheep that he had purchased. He put them in the “long paddock “ and if the venture turned out to be a success he continued to operate, otherwise he went bankrupt. A poet said on one occasion, “I never knew a dealer die, he always died a drover “. To-day that line could be rendered, “ I never knew a dealer die, he always died a grazier “. I have in my electorate just as many small farmers who have suffered severely from droughts as any other honorable member was in his electorate. While I was addressing the House recently a member of the Opposition, whom I shall not name because I believe that he now feels rather sensitive about what he said, judging by the expression now on his face, said, “I should like to get my hands on some of the wool cheques that are .being paid in your electorate “. I replied, “ The wool-growers in my electorate are getting only a small profit, for when it is spread over a number of years it does not amount to much”. In the present measure we are not asking the wool-growers to sacrifice money.

Mr Bird:

Mr. Bird interjecting,

I Bo]

Mr DEPUTY SPEAKER:

-Order! The honorable member for Batman (Mr. Bird) has spoken to the measure. He has since had altogether too much to say by way of interjection. He must give other honorable members a chance to have their say in silence.

Mr TURNBULL:

– I can fully understand the concern of sheep men who have the impression that they are to lose outright 20 per cent, of their incomes. Nothing could be further from the truth. The bill provides only for a prepayment of tax, and includes adequate provisions to deal with cases of hardship. I am convinced that the adoption of this plan is of major importance in averting appreciation of the fi, which would reduce the primary producers’ return from exports by 20 per cent. This bill will do no harm to the man on the land. In fact, it has been stated that in some cases it might assist him. Journals like The Land and the official organ of the Victorian wool-growers have stated that there is nothing to fear in this legislation. I support such statements, and am confident that when the wool-growers really learn what the bill means they will support it willingly. I believe that all primary producers are linked to one another. The wool-growers must realize that if we appreciated the £1 every primary producer would lose 20 per cent, of his export income, whereas this measure, which will obviate the necessity to appreciate the £1, calls only for a prepayment of tax.

Mr BEAZLEY:
Fremantle

.- The honorable member for Mallee (Mr. Turnbull), in the course of his speech, seemed to defend this legislation on the ground that its provisions are not so bad for the wool-grower as revaluation of the £1 would be. Even that statement is disputable; but, accepting it as true, I cannot see that it establishes a case for the form of taxation that the Government is implementing in connexion with the budget. I have listened to what honorable members opposite have had to say, although I admit that I have heard not Ministers, but mainly, backbenchers. The general tenor of their arguments can be summed up in several points. First, they say that nobody who opposes this measure m sincere. They say also that any Labour party member who opposes it is nothing but an unscrupulous vote-cadger. Apparently, in their view, it is impossible to be genuinely opposed to this measure on principle. According to them woolgrowers who oppose it are misinformed. We can infer from their statements that it is impossible to regard this bill sincerely as being likely to prove ineffective against inflation or as embodying a bad principle of taxation ; and that one cannot regard as a poor principle the selection of one industry to pay a discriminatory tax. According to them, anybody who is not a wool-grower has no right to speak on the measure at all. They apparently consider that it is unsound to take the view that an industry is not inflationary, as an industry, but that only certain individual incomes in that industry have an inflationary effect. They have stated that the high incomes of wool-growers provoked this bill. The special problem of the Government, according to them, is to find £50,000,000 for the stock piling of strategic war materials and £36,000,000 for the payment of war gratuities. I congratulate the honorable member for Hume (Mr. Charles Anderson) for having mentioned that such items of expenditure are inescapably inflationary. When I made a similar statement in the course of the budget debate it was followed by an abusive speech by the honorable member for Sturt (Mr. Wilson). I agree with the honorable member for Hume that the Government faces a real problem of inflation in meeting those costs. But we cannot obtain a definite guarantee from the Government that because both those charges will be non-recurring items of expenditure the impost proposed in this measure will be non-recurring. For that reason, we continue to regard the proposal with suspicion and reserve.

The honorable member for Canning (Mr. Hamilton), in the course of his speech, dealt at some length with a gentleman named Kelly, and I can only assume from his remarks that Mr. Kelly could speak on behalf of all the wool-growers. The honorable member even suggested that the proposed tax was popular with the wool-growers, and stated that if some wool-growers were vehemently opposed to it, that was because they had failed to understand it. The honorable gentleman is a missionary on behalf of the Australian Country party, and his missionary activities have extended, naturally, to his own electorate. The wool-growers of Western Australia have been fully informed by the honorable member for Canning, and also by the honorable member for Moore (Mr. Leslie), about the nature of this tax and the true reasons for it, and they have written a letter to my colleague, the honorable member for Kalgoorlie (Mr. Johnson), giving their impressions of the speeches made by ‘both of the honorable gentlemen whom I have mentioned.

The honorable member for Canning cited the support of a wool-grower in Victoria for the scheme. Let me quote to him the views of the wool growers of his own electorate. They wrote to the honorable member for Kalgoorlie in the following term3, on the 14th November : -

Dear sir,

On Tuesday last the wool section of this union held a special meeting to further discuss the 20 per cent, wool tax. At this meeting Messrs. Hamilton and Leslie, M’s.H.R., were in attendance, and explained the Government’s point of view in connexion with the matter. Notwithstanding this, however, the Executive, after very careful consideration of the question has maintained its former strong opposition.

The only thing I quarrel with in that is the use of the word “notwithstanding”. Had I penned the communication the expression would probably have been “ because of this the Executive has maintained its former strong opposition The letter went on to state -

It is, as previously pointed out, considered to be legislation of a sectional nature directed against the wool-growers and strong and’ continued objection is on the question of principle.

That letter was signed by Mr. A. Q. Traine, the assistant general secretary of the Farmers Union of Western Australia. Honorable members opposite will never convince me that he misrepresented the attitude of the executive. The honorable member mentioned that if the wool-growers understood this measure they would support it. That does not do their powers of explanation much credit because apparently the executive failed to appreciate the points that they attempted to make. Similarly, the Narrogin Observer, which is in the heart of the electorate of the honorable member for Canning, in its issue of Friday, the 6th

October, had a great deal to say about the principle of selecting the wool industry for this discriminatory taxation. Since honorable members opposite have said that the Opposition is engaged in a game of vote-catching on this issue, let me say that, although I have received a good many letters from wool-growers arising out of the two speeches [ have made on this subject - on the budget and on Supply - I have also received a great many abusive letters from people who are normally Labour supporters asking why I consider it necessary to champion the wool-growers. There are 150,000 wool-growers in this country. The people in the great city electorates imagine that they all are fabulously wealthy and the masses in those electorates could not care less whether they are taxed or not. I have no illusions about any political kudos that the Labour party may get out of its opposition to this measure. But the measure can be opposed because, in itself, it is a bad taxation measure. I intend to oppose it, not from the stand-point of the wool-grower, who naturally objects to double taxation, but as a taxation measure.

The honorable member for Farrer (Mr. Fairbairn) turned our attention to the time when pay-as-you-earn taxation was introduced and drew an analogy between this measure and that. It was a perfectly false analogy. When payasyouearn taxation was introduced the people who had to alter their taxation basis from an annual payment of tax to a weekly deduction from their incomes were not confronted with double taxation in one year. They were not confronted with the liability to meet an assessment on their last year’s income plus payment of tax as income was earned. That is the position of the wool-grower under this legislation. It may be perfectly defensible to put him by stages on the same footing as the man who pays his tax currently with the earning of his income in ordinary industry, hut it is not defensible to confront him with a heavy assessment based on the rates that prevailed last year and to double his tax by adding this impost to it. That has no analogy with the introduction of payasyouearn taxation.

The £103,000,000 that is to be taken from the wool-growers on the ground that their incomes threaten the national economy deserves a little further analysis. It is perfectly obvious that the Government has reacted to the Labour party’s criticism of this measure as has the Australian Country party to the Labour party’s definite guarantee to the people that it will repeal the measure if it is returned as the government. Amendments have been introduced in order to meet the problems of the people who will face special hardship. They must write to the Commissioner of Taxation and set out their special grounds of hardship. Do honorable members recall the speeches that were made and the way in which the welkin rang in this chamber when we, as a government, were told how the bureaucrats were pushing people round and of how people had to crawl to them and explain their special circumstances? Yet we are told, in defence of this measure, that if the wool-grower who is faced with hardship writes to the Commissioner of Taxation at some time or other the Commissioner will get round to arresting the process whereby the proceeds of the sale of his wool will be exempted from this 20 per cent, reduction. I can well imagine the humiliation of a great many people who would prefer to obtain an overdraft and wait for the day which they hope for when they will not be subjected to double taxation in one year and will be able to recover their position. Considered as a taxing measure this is completely unscientific.

Honorable members opposite have claimed that this is not the Copland plan and I fully agree that it is not. I have not the least doubt that the Copland plan would have been much more emphatically objected to by the wool-grower and that this measure is more acceptable to him. I regard that plan as politically impossible, but considered in a vacuum, as an economic measure, it was at least anti-inflationary. Had the Government seized 33^ per cent, of the proceeds of the wool-grower and held the amount in a reserve fund, thus actually withdrawing that spending power from the wool-grower, there is no doubt that such a “ freeze “ would have been anti-inflationary. But although a great deal of effort has been expended by members of the Government parties in explaining how this measure restricts inflation they have not shown how inflation can be restricted by taking money from the wool-growers, putting it into Consolidated Revenue, and expending all except £500,000 of it. This bill represents a complete repudiation by the Liberal party of everything that its members have said for the last eight years. They have contended that government expenditure was purely inflationary ; that the labour of public servants, however necessary, was quite unproductive and that the Government was directing expenditure into all sorts of unproductive channels. This measure, however defensible it might be from the point of view of a hard-up government, is quite indefensible as a means of arresting inflation. It is proposed to take a flat rate of one-fifth from every wool-grower beyond the very smallest, irrespective of what his gross income is from the industry. I have never heard of such a principle of taxation. It is completely indefensible. Consider it merely from the point of view of preventing inflation. The honorable member for Farrer objected strenuously to my mentioning a wool-grower on £500 a year and said that he regarded £3,000 as a norm.. Let us accept his figure. The man who receives a gross income of £3,000 will pay £600 and will have left £2,400. The man who receives £60,000 - and I understand that one Minister at least is in that category- will pay £12,000 and have £48,000 left. If a greater proportion is not taken from the larger producers the incomes which really provide surplus spending power and which affect inflation will not have been touched in a significant manner. That is another way in which the proposition is unscientifically directed to curb inflation. It is not possible to establish that because the wool industry as a whole is getting fabulous returns the incomes of its members are inflationary. An industry cannot be inflationary but individuals within the industry may have incomes that cause inflation. If I earn £10,000 by means of a land and estate agency or a retail business I am no less a menace to the prices structure with my surplus income than is another person who earns £10,000 a year from the wool industry. It is not the industry that exerts the inflationary pressure but the individual incomes with- in the industry, and there is no scientific pretext for saying that a given income from wool is inflationary while its equivalent in another industry is not. The only thing the Government could have done had it really been concerned about inflation was to increase taxation on the higher incomes whether in the wool industry or in industries incidental to it. A great many people, such as the sellers of motor cars, are an obvious example. I am sure honorable members have read of the dividends that are being paid by various motor dealing firms, especially those in the eastern States. Many of their customers, I have no doubt, are wool-growers. Many city businesses have boomed because of the expenditure of the wool-growers. Their high incomes are incidental to the high incomes in the wool industry. Had the Government introduced a measure that steepened very sharply taxation on the higher incomes it would have picked up the higher wool incomes and others incidental to the wool industry and that would have been a defensible tax. But it would also have been a contradiction of everything that honorable gentlemen opposite have said for the last five years on the subject of taxation. There is an old French saying qui s’excuse 8’accuse, the translation of which is that he who excuses himself accuses himself and supporters of the Government have constantly sought to excuse themselves by saying that honorable members of the Opposition are playing at party politics in connexion with this measure. If any measure is a political one it is this. I realize that the Australian Country party stands to lose something because of it, as does the Government, and that the Government expected that there might be a double dissolution and a general election. That is written into every line of the budget. The alternative to this measure would have been to increase income tax on all the higher incomes. That might well have been politically fatal had there been a double dissolution. Therefore, the Government has selected a small minority of the people, 150,000 wool-growers, and has introduced a severe measure which will penalize them to the amount of £103,000,000. By that means it has evaded imposing a general increase of taxation. It has been hinted freely that it will be necessary to bring in a supplementary budget later. Had there been a double dissolution, and had this Government been returned, then a supplementary budget would have been introduced to enable the Government to do some of the unpopular things that it is not yet prepared to do. The Treasurer’s budget is an election budget.

The wool industry is to have a double tax imposed upon it this year in order that the Government may finance an expansion of social services. If a change of government occurs next October, the new government will be faced with the alternatives of continuing the payasyouearn taxation of . the wool industry or accepting the fact that £103,000,000 of its revenue had been taken in advance and expended by its predecessor. That is a very serious objection to this measure. I agree that there is no reason why, if a satisfactory system can be devised, the wool-grower should not pay as he earns in the same way as everybody else does. But there is no justification for applying the pay-as-you-earn system in this manner, and making the woolgrower pay double tax in one year. That is the indefensible element in this proposal.

Many honorable members on the Government side who spoke on this measure seemed to assume that the wool-grower is a fool. I do not say that with a desire to import any bitterness into this debate, but the suggestion is that if a wool-grower receives £20,000 for his clip, and places that in his bank account, unless this scheme is brought into operation heaven knows what situation will face him at the end of the year when he gets his income tax return. The Treasurer has answered frequent questions asked by Opposition members about excess profits, by saying that the rates of income tax will take care of excess profits. I largely agree with him. If a tax of 14s. in the £1 is imposed on an income of £20,000, is it seriously suggested that at the end of the year the wool-grower who has received an income of £20,000 will not have set aside a proportion of it to pay his tax? Surely honorable members do not believe that a woolgrower in such circumstances would spend the whole of the £20,000 in an inflationary orgy, and at the end of the finan cial year face his tax bill with nothing in hand. The Government seems to believe that this measure is necessary to prevent the wool-grower from committing folly. Wool-growers are already subject to a high rate of tax, and have been for some time. They know that they will receive heavy assessments from the Taxation branch at the end of the year and have already adopted the system of setting aside a large proportion of their income to pay their tax. They would be the sufferers if they did otherwise.

Mr CHARLES ANDERSON:
HUME, NEW SOUTH WALES · CP

– That is not so.

Mr BEAZLEY:

– The honorable member may know them better than I do, and if that is the manner in which they do their business, I agree with the statement of the honorable member this afternoon, but there are some people who should not be in the business. But I regard it as extremely unlikely that that is the position as far as the wool-growers are concerned.

This measure ignores the real problems that face the country, and that is why I am opposed to it. It is quite impossible to convince the Government that anybody who opposes the measure is sincere, but I say that the Government is not realistic in its approach to the problem of inflation. This measure is the result of an illogical compromise. It is the maximum that could be extracted from the Australian Country party by a species of nerve war. That nerve war began with .the talk of revaluation. The Treasurer committed himself fully on that subject when he said that revaluation would take place only over his dead body. Then came the Copland proposal, which was a shock to every wool-grower who heard of it. The Australian Country party put up a fight within the ranks of the Government members against revaluation because its leader had committed himself, and naturally it also opposed a suggestion from any source that the Copland plan should be adopted. It was therefore faced with the alternatives of a general increase of taxation or this measure. It had to meet the argument that the primary industries are booming and that the present devalued state of the £1 helps them to continue to boom, consequently they must forgo, something. From that unscientific political conflict emerged this completely unscientific taxation proposal. I do not think that politically the Labour party has anything to gain from its opposition to this measure. Nevertheless I believe that it is acting quite soundly in opposing it as a completely slovenly taxation proposal. Whether the Labour party obtains the support of the wool-growers or not it should still oppose the measure on those grounds.

Mr GEORGE Lawson:

– The primary producers are opposed to socialization.

Mr BEAZLEY:

– It is probably for the reason that many rural people are opposed to a policy of nationalization that this measure would not drive them to support the Labour party. What I have read has left me in no doubt that the wool-growers realize that the Liberal party is as fully identified with this policy as is the Australian Country party, but they give it credit for not pretending to represent country interests. I have no doubt that this discriminatory tax is directed exclusively at a primary industry which is causing all sorts of secondary industries to boom, and that the wool-growers’ feelings towards the Australian Country party are those expressed during the meeting of the woolgrowers in the electorate of the honorable member for Canning (Mr. Hamilton). I may be wrong, but I have not observed members of the Australian Country party to be very happy about the measure at any stage of the debate, although one or two of them, on the principle of whistling in the dark, have actually convinced themselves that the wool-growers are urgent supporters of it. They have done that because of a leading article in the newspaper Land and Settler which was mentioned by the honorable member for Canning. Double taxation is indefensible, as also is the pretence that the expenditure of the total amount of the proposed deduction will be anti-inflationary. It is indefensible to pretend that this principle is the same as the pay-as-you-earn principle which is applied or ordinary industries. It is also indefensible to draw revenue in advance, because if the electors change the government the incoming government will be deprived of revenue which it should be able to collect but which will have been collected and expended by this Government.

Mr ROBERTON:
Riverina

.- I rise for a variety of reasons. The first is to assuage the anxiety of the honorable member for Darling (Mr.. Clark), who, when addressing himself to the bill, mentioned that neither myself nor my gallant colleague the honorable member for Hume (Mr. Charles Anderson) had spoken upon it. I assure the honorable member and his colleagues that I had every intention of doing so. In f act I have been waiting from day to day to receive the call.

I listened with interest to what the honorable member for Fremantle (Mr. Beazley) had to say. When he began to speak I put his name on the top of a blank piece of paper in the pious hope that he would say something to which I could reply. But I did not hear him say anything of note and my sheet of paper is still blank. The honorable member for Fremantle had, for all practical purposes, nothing to say concerning the bill. He said that the members of the Labour party were being charged with insincerity in their opposition to this proposal. I do not charge the honorable member for Fremantle with insincerity because of his opposition to all the proposals of this Government, because he, like other honorable members of the Opposition, is pledged hoof, hide and horns to the socialization of the means of production, distribution, and exchange. It is not competent for them to oppose any measure with any degree of sincerity.

It is most appropriate that the honorable member for Lalor (Mr. Pollard) should lead the Opposition in its objection to the passing of the Wool Sales Deduction (Administration) Bill. No man is better qualified to voice that objection or has done more to harm the democratic conception of primary production than has the honorable member for Lalor. I hope to demonstrate that in this House from time to time when his fell deeds are exposed. But it was appropriate for the honorable member for Lalor to lead the Opposition in its obstruction, it was most inappropriate that he should attempt to quote what I had uttered to him from time to time in that unhappy period during which he was

Minister for Commerce and Agriculture in the socialist government. Apart from his rudeness which is probably congenital, it was flagrant folly ‘for the honorable member to attempt to mimic me as lie did when he was speaking in opposition to this proposal. The honorable member has no Gaelic, and without an actual knowledge of that language it is phonetically impossible for him to speak us 1 speak, and without the Gaelic instinct it is intellectually impossible for him to think as I think. He did me great honour when he revealed to honorable members of this House and to the public outside this House, during the course of his speech, that the words of warning that I uttered to him when he was a socialist Minister in a socialist government have penetrated past his bitter prejudices to the inner recesses of his mind; if he has that kind of mind and if it has any inner recess. Time after time when the honorable member for Lalor was Minister for Commerce and Agriculture in a socialist government, 1 reminded him and warned him that the produce of the land belonged in its entirely to the producers, subject only to the discharge of their lawful obligations. The honorable member has never forgotten that warning. I wish that he had remembered as well the Ten Commandments and the Shorter Catechism. In his opposition to this proposal, he trotted out that fundamental democratic principle as justification for the condemnation of this proposal - which, after all, is very simple. I say frankly that if this measure attempted to violate in any way that fundamental principle that is vital to democratic production I should unhesitatingly oppose it. But, because I do not believe that this measure violates that principle in any way, I support it as the only practical, just and equitable scheme that has yet been put forward to meet desperate circumstances. Because I believe that the produce of the land belongs in its entirety to those who produce it, I opposed with, everything I have and am that shabby scheme that was conceived in the tortured mind of that academically distinguished gentleman, Professor Copland. His scheme meant confiscation naked and unashamed of 33^ per cent, of the proceeds from the sale of wool that rightly belonged to the men and women who produced it. I opposed that proposal as soon as it was published in the press. I have done so at every opportunity in the meantime and on this occasion I again voice my objection to it as one that is entirely unworthy of a reasonable man. I say with a great deal of sorrow that for eight long years the government of this country was in the hands not of the Australian Labour party but of the socialist planners who wore charged by that party to do whatever lay in their power to bring about socialism in our time; and they are still engaged at that task.

No single question has exercised the public mind during the last eleven month.’ without the socialist planners, uninvited, proposing a completely socialistic solution of it. That is precisely what Professor Copland did. After all, he was retained by the socialist government as its economic adviser and in his flight of fancy as Vice-Chancellor of the Australian National University the poor gentleman imagined that he had power to advise the present anti-socialist Government in precisely the same way. When, after the opening of the woolselling season, there was a rise of wool prices of such fabulous proportions that our entire economy was threatened, he came forward with a proposal for the confiscation, the outright theft, of 33^ per cent, of the proceeds from the sale of wool that rightly belonged to those who had produced it. Unhappily, it met with considerable metropolitan approval because, largely as a result of the attitude of the Australian Labour party, the wool-grower has become the traditional enemy of metropolitan interests. Professor Copland’s plan met with the approval of people who believed that this Government would be perfectly justified in confiscating the property of the producers to the degree that he proposed. I remind the House that Professor Copland proposed not only that vast sums should be taken from the wool-growers and placed in the Treasury, to be lost to them forever, but also that a levy of 7-J per cent, should be imposed upon the growers for the purpose of subsidizing the use of woollen fabrics in this country. I repeat that when I heard that proposal being noised abroad, I opposed it as something that would be unworthy of a democratic people. However, it met with the approval of credulous and uninformed people in our big cities. One thing that grieves me after having had eleven months’ experience as a member of the Parliament is to find confirmation of my suspicion that the gap between the urban and rural populations in their approach to public questions of this kind has now become so wide that it is almost unbridgeable. This proposal met with general approval by people with no real understanding of the responsibilities that the wool producers, men and women alike, have borne in this country since the dawn of its history. That is an accurate statement of the position ; and I shall embrace every opportunity to do what I can to bridge that gap between urban and rural viewpoints because, after all, we are a common people and should have common objectives and aspirations and share with one another.

This Government refused to consider any proposal that involved confiscation of the property of the wool producers or of any other producers. That was to be expected because if it is nothing else it is an anti-socialist government. It was elected by the people to hold the balance fairly between the militant forces of capitalism and the militant forces of labour. But no sooner had it rejected the Copland plan than the pressure groups which had been supporting the confiscation sought to embarrass it by forcing it to appreciate the currency as the solution of the problem of inflation. I know, and every other honorable member ought to know, that many arguments in favour of appreciation of the currency are plausible and frequently convincing; but, similarly, the arguments against appreciation are just as plausible and frequently convincing. The Government approached this problem in a democratic way by seeking means by which it could do the greatest good for the greatest number. After mature consideration I decided in my own mind that appreciation would not be in the best interests of the Australian people at the present time.

Supporters of appreciation noised abroad the claim that a past anti-Labour government had deliberately depreciated the currency for the purpose of the interests of the major primary industries during a doubtful period when export parity prices were unremunerative to our primary producers. That story will not bear examination; it is untrue. However, it is necessary to refresh the memories of our people of the circumstances that led that Government to depreciate the Australian £1. At that time, it was impossible to buy sterling exchange at parity, and after the point of desperation had been reached by the financial and commercial institutions which required exchange in large quantities from time to time the government of the day, having been given due and timely warning, was told that at least one of the trading banks would, as a reputable organization, go on to the markets of the world and buy exchange for what is was worth. That institution took that action. Originally, it offered £105 and, eventually, £130 for every £100 sterling and it obtained all the exchange that it required with the result that all who needed exchange could buy their requirements. After that point had been reached, but not until then, the government of the day, through the Commonwealth Bank, pegged the exchange rate at £125 to £100 sterling, at which level it has remained since. It is folly to put forward the view that the government of that day depreciated the Australian currency in order to benefit only the primary industries.

When we now examine the proposal to appreciate the currency against the background of inflation and the present cost of living it becomes obvious that appreciation would have no effect whatsoever in helping us to solve either of those problems. If the Australian £1 were appreciated, the inflationary tendency would continue and the cost of living would remain at its present level, if it did not increase still further, because, after all, the cost of living is determined within the Australian price structure which is considerably lower than the export parity prices structure as it applies to all our export industries. If we appreciated the currency, the prices of bread, food, clothing and all the other necessaries of life, which are considerably lower than corresponding prices in any other country, would remain the’ same. That fact cannot be ignored by any one who endeavours to reach a reasonable decision with respect to the proposal to appreciate the currency. This Government dismissed the idea of appreciation just as it dismissed the proposal involving confiscation to which I have referred. In order to meet the existing desperate situation it had to devise a simple system that would not react to the detriment of the interests of the producers concerned, and so it evolved a pay-as-you-sell system of income tax and applied it to the wool industry. No sooner was this proposal devised than it was given legislative form. No sooner was this bill introduced into the House than Opposition members began to oppose it bitterly on a variety of grounds. They say that the wool sales deduction . is sectional in character. But many speakers have reminded the House that approximately 2,250,000 men and women, who earn salaries and wages, have been paying income tax in precisely the same way for seven years. In God’s name, Mr. Deputy Speaker, how can the wool sales deduction be a sectional tax?

Opposition members also claim that the wool-grower has been singled out for discriminatory treatment, but I remind the House that every primary industry, through the nefarious practices of the preceding socialist government that occupied the treasury bench for eight years, was called upon to make substantial contributions towards keeping the cost of living down in this country. For example, the wheat industry, which, perhaps, ranks next in importance to the wool industry, has been paying millions of pounds to keep the cost of living down. Opposition members know that 60,000,000 bushels of wheat are sold annually in Australia for 7s. Id. a bushel, whereas world parity is 18s. 6d. a bushel. That quantity of wheat is one-half of the average harvest, in this country. In some years, it is immeasurably more than one-half of the average crop. Yet 60,000,000 bushels of wheat are withheld from export each year, and sold at the concessional price, within Australia. On every ton of sugar that, is sold here, the grower loses £12 a ton. Between £12 and £14 is lost on every ton of coarse grain sold in this country. Yet Opposition members claim that the wool-grower is being singled out for discriminatory treatment! Why, the wool-grower has led a charmed life when we consider what happened to other primary industries during the eight years of socialism.

Opposition members speak with tears of anguish in their eyes about the plight of the small wool-grower. »I happen to be a small wool-grower. I am one of the large majority of wool-growers who consistently produce fewer than 30 bales of wool each. In point of fact, I cannot remember, in 30 years, ever having produced 30 bales of wool, and I am not producing that number this year. Provision has been made in this bill to protect the interests of the small growers, and of the large growers, too, if they are likely to be subjected to any social or economic indignity. The producers in this country have every confidence that a democratic government will protect their interests in that respect, and I have no doubt that will be done. Clause 11 of the bill provides a safeguard so that hardship will not be imposed upon wool-growers by the wool sales deduction. That provision is adequate to meet every circumstance and every occasion. It has been suggested that this proposal will be no impediment to inflation, but it is only necessary for me to remind the House that if the wool sales deduction were not made, an amount of £103,000,000 would’ pour into the spending potential of our people, against which there would be no capital goods to buy. In addition to that, hundreds of millions of pounds of non-recurring expenditure, the items involving which have been mentioned even by the honorable member for Fremantle, would have to be met with treasury-bills, and would pour into the spending potential of the people, and the velocity of that process in itself would bring this country closer to ruin.

My greatest disappointment in connexion with this bill is the disgraceful but impassioned wooing of the woolgrower by the Australian Labour party; the flirting of the honorable member for Parkes (Mr. Haylen) with that industry, which is now the so-called Cinderella of all industries; and the flirting of the honorable member for Eden-Monaro (Mr. Fraser) with the Cordelia of Australian industries. The last-named speaker made an impassioned plea to the people and to the King -

Thy dowerless daughter, king, thrown to my chance,

Is queen of us, of ours, and our fair France;

Not all the dukes of wat’rish Burgundy- meaning the Australian Country party -

Can buy this unpriz’d precious maid of me.

But I remind the wool-grower - Cordelia - that the honorable member for EdenMonaro is already married to that termagant, Socialism.

Mr CALWELL:
Melbourne

.- The Treasurer (Mr. Fadden) says that this bill will skim off the surplus wealth of the wool-growers, and assist the fight against inflation. That is the Treasurer’s case. In a muddled speech, the Minister for Defence (Mr. McBride), operating entirely on the defensive, inadvertently and unwittingly admitted the truth of the contention of the wool-growers and of the Australian Labour party, that this wool tax plan is discriminatory, and is not intended, and, indeed, never was intended, to retard inflation. The Minister for Defence said that, at its worst, the proposed tax is a compulsory loan. “With that remark, the Government’s case collapsed. It is worse than a compulsory loan. It is a compulsory loan, free of interest, and to me, there is not much difference between a tax-free forced loan and a capital levy. But let me examine the financial side of the proposal for a few moments. It is a compulsory loan to balance this year’s budget, and, therefore, the statement by the Minister for Defence contradicts the statement by the Treasurer. The right honorable gentleman calls the tax “ a deduction “, because he wishes to use euphemistic language, and does not want to admit that it is a tax. He included the estimated collections from the wool tax among items of ordinary revenue, such as sales tax and Postal Department charges, but said nothing in his budget statement about receipts from the excess profits tax, which, he has stated, will be introduced later. I doubt whether it will be submitted to the House during this session. If we knew how much the Treasurer expected to collect from it, we should be in a better position to know how much he would need to take from the wool-growers for the purpose of balancing the budget. If the money were left in the hands of the wool-growers, they would not expend it. Yet the Treasurer is taking that money from them, and will expend it. The wool-growers would not expend all of it, or much of it, because they are the most thrifty and solid section of Australian income-earners. Mr. Colin Clark, the Queensland economist, is often quoted by non-Labour members in this Parliament, and I assume that he ought to know about the principles of this bill because he is about the only economist whose views upon it are fairly widely known. He does not believe in the wool sales deduction, but advocates the revaluation of the £1.

To me, this bill is the most fraudulent and blatant piece of pretence that has been introduced into the Parliament. It is most blatant and fraudulent to claim that it is non-inflationary. The constitutionality of the measure is certain to be challenged in the High Court of Australia when it has been passed by the Parliament and has received the Governor-General’s assent. The Primary Producers Union has already said that it will be challenged in the High Court and I believe that, in such an event, an injunction will assuredly be granted. The High Court may not hear the appeal until March or April of next year, and may not give its. judgment until a month later. Meanwhile, the Treasurer will not be able to collect one penny from the wool tax. The brokers have decided unanimously that they will refuse to collect that money. What will the Treasurer do, in those circumstances, to meet the statutory requirements of his office? How will he pay pensions and maintain the ordinary activities of government? He will have to borrow money by means of treasurybills, upon which he will have to pay interest. If he can compel the woolgrowers to pay the wool sales deduction before the High Court announces its decision, he will have the use of that money free of interest. He will have to pay £3,000,000 or £4,000,000 to the Commonwealth Bank as interest on treasurybills, but if he takes the money from the wool-growers, he will not only withhold it from them, but also deprive them of interest amounting to £3,000,000 or £4,000,000. . To me, it is surely a piece of legerdemain for this Government to deny the wool-growers of Australia interest on their own money. The Primary Producers Union, the graziers association and every organization of primary producers are fighting this bill. There is not a sufficient supply of epithets, expletives and appropriate adjectives to describe the feelings of abhorrence, resentment, disillusionment and dissatisfaction that this piece of political trickery and financial quackery has evoked in the Australian democracy.

This tax is alleged to be necessary to pay, among other things, the war gratuity amounting to £67,000,000, which will be distributed among ex-servicemen next year. Approximately £37,000,000 of that sum was collected by the Chifley Government, and placed into reserve. The present Government is collecting the same tax a second time. It is taking the money from the wool-growers, when that amount has already been paid into reserve. I know that the Treasurer will say that that reserve was used for the purpose of redeeming treasury-bills, but that was good finance. The Treasurer himself has had to admit, since he assumed, office, the soundness of our practice in that respect. The Prime Minister (Mr. Menzies) has admitted the validity of it, yet the Treasurer would rather raid the woolgrowers than obtain money from the Commonwealth Bank. I know why he is adopting that policy. He has put it to members of the Liberal party and of the Australian Country party that they must accept, either the wool sales deduction, or the revaluation of the £1. I have here a document that has been circulated among members of the Government parties. Apparently ‘Commonwealth revenue is being used to prepare documents, in respect of the wool tax scheme, and this document has been distributed exclusively among members on the Government benches. Opposition members have not seen the famous document, but I am generally up to date, and have come into possession of one of them.

Mr Eggins:

– Perhaps it was posted to the honorable gentleman.

Mr CALWELL:

– It was not posted to me. I got it from a member of the “ resistance movement “ in the Govern ment parties. Under the heading -

page 2611

INCOME YEAR 1950-51

Comparison op Income remaining to Woolgrowers if the £A. webb Appreciated bk 20 per kent. and under the 20 per cent. Wool Deduction, details are given of the application of the two alternative proposals. That document sets out a comparison of the financial effect upon wool-growers of appreciation of the currency by 20 per cent, and the adoption of the proposal contained in this measure. . It shows, (1) that if the aggregate income from the sale of wool amounts to £492,000,000 the wool-growers, after paying the total amount of income tax that they are required to pay and the wool stabilization fund levy of 7£ per cent., would have left to them under (a) appreciation of the currency by 20 per cent., £182,000,000; and (&) the proposal contained in this measure, £232,000,000; (2) that if the aggregate income from the sale of wool amounts to £550,000,000, the corresponding amounts left to wool-growers would be,- under (a) £206,500,000, and under (b) £259,000,000.

Members of the Australian Country party have been told that if the aggregate income from wool for the current financial year approximates £492,000,000 woolgrowers will be £50,000,000 better off under the Government’s proposal than they would be under the proposal to appreciate the currency by 20 per cent., and that if the aggregate income from wool approximates £550,000,000 woolgrowers will be £52,500,000 better off under the Government’s proposal than they would be under currency appreciation. Because of my experience as a Minister, I am sure that the document from which I have been quoting is one that has been prepared by the Treasury. I want to know why that document has been circulated only amongst honorable members opposite, and particularly amongst members of the Australian Country party, and why no copies of it have been circulated amongst the Opposition.

Mr CALWELL:

– I wish to have the document incorporated in Hansard, and with the right honorable gentleman’s concurrence I shall obtain the necessary leave.

Mr Fadden:

– I give that concurrence.

Honorable members opposite have tried to fool the wool-growers, the workers and the taxpayers into believing that this particular scheme is similar to the payasyouearn system of taxation. Various members of the Opposition have pointed out, however, that when the income tax deduction system was first introduced the average wage-earner was forgiven nine months of the amount of his income tax liability. In other words, the wage-earner had to make regular contributions during only the last three months of that financial year. Will the Government introduce a similar principle in connexion with this measure? Will it ask the wool-growers to pay only 25 per cent, of the sum of which the Government proposes to mulct them? If the Government is not prepared to extend that concession to wool-growers then it should drop altogether the contention that this scheme is based on a similar principle to that of the income tax deduction system.

The tory members of this chamber are always talking about the necessity for holding secret ballots of trade union members. What about holding a secret ballot at the end of the second-reading debate on this measure?

Government supporters interjecting,

Mr CALWELL:

– I know what the result of any ballot would be. What about the Government taking a secret ballot of the wool-growers before this measure becomes law? I know what the result of a secret ballot of the woolgrowers would be.

Mr Fadden:

– What about taking a secret ballot of the taxpayers?

Mr CALWELL:

– Well, a secret ballot of the taxpayers will be taken in a few months when a single dissolution of the Parliament, that is to say of the House of Representatives, will occur. Many honorable members opposite who have supported this measure with their voices detest it in their hearts, and they know that one result of a general election on this issue will be that many of them will lose their seats.

I ask the Treasurer to tell us, when he replies to the debate, how many meet ings of primary producers have approved of this wretched plan, I do not know of one such meeting that has approved of it. On the contrary, I know that many meetings of primary producers that have been held throughout Australia, have passed unanimous resolutions attacking the Government’s proposal. I have a copy of the Kyneton Guardian of the 10th October last. It includes a report of a very big meeting that was held in that important district, which, incidentally, has been represented by the honorable member for Lalor (Mr. Pollard) for many years. In fact, my distinguished colleague knows the area very well. The newspaper report states -

Nearly 70 wool-growers and producers, at a public meeting in Kyneton on Friday afternoon, expresed strong indignation against the Federal Government’s plan to draw off about 75 per cent, of wool price increases as a move against inflation. The meeting, attended by graziers from Heathcote, Lancefield, and other Centra] Highlands districts was emphatic in its view that the Government had no right to interfere with the just proceeds of a section of primary producers who had battled against terrific odds in past years to build up Australia’s most important industry.

The view of the meeting was unanimous. The report goes on to report the observations made by one of the speakers at the meeting, as follows : -

The Government, he said, apparently overlooked the droughts, floods, bush fires, depressions and low-price years that wool-growers had battled against.

The Government had made no fully compensative moves to off-set those difficulties when they had occurred but it had been quick to pounce when prices had reached their present levels. Many growers, however, were still not properly out of the mire in which previous lean years had placed them.

That is the story told in that newspaper, and we can find similar stories in almost every provincial newspaper published in Australia. All the arguments adduced at those meetings are in the same strain. No wonder honorable members opposite who represent country seats are frightened ! No wonder they fear the morrow, and the consequences of their mistaken actions!

Mr BEAZLEY:

– No wonder the honorable member for Riverina (MrRoberton) did not talk about the bill.

Mr CALWELL:

– I have never heard the honorable gentleman discuss the provisions of a bill yet. He has obsessions about socialism. However, the Australian Country party, to which he belongs, wants to avail itself of socialism whenever socialism will suit its interests. A letter from a grazier which appeared in the issue of the 8th November of Stock and Land is typical of the views held by many thousands of primary producers. It states -

The wool tax scheme is discriminatory, illconsidered, ill-conceived-

Mr Fairbairn:

– Did Mr. Rogers write that letter?

Mr CALWELL:

– Yes, the honorable gentleman has a telepathic quality that I did not know he possessed. The letter continues -

It is the child of a marriage of political expediency. It is a grievous blunder.

The Government, living in a world of political mentality at Canberra, and unaware of the bitter resentment of wool-growers all over Australia - made a stab in the dark and the knife is in the back of the small wool-growers.

I bate to mention stabs in the back in the presence of the Treasurer, because ever since 1943 he has felt very sore between the shoulder blades. The letter goes on to state -

The attempted defence of the scheme in Parliament is pitiful. The fact that the tax money is not toeing placed in a trust fund and frozen but is being spent by the Government instead of the wool-grower, negatives any antiinflationary effect which the Government claims for” it. The defence of the scheme hy some members of the Government in Parliament during the debate on the Budget was pathetic.

Of course, the efforts of honorable members opposite have been pathetic on every occasion on which they have spoken. The letter continues -

They actually argue that if the Government does not take this £103 million from the wool-growers, it will have to issue treasurybills to finance the war gratuity payment this year of £67 million. Why only the woolgrowers ?

And why should only the wool-growers be called upon to bear this hurden? Why does not the Government rope in the huge chain store combines? Why does it not rope in Elder, Smith and Company

Limited, the presiding genius of which is the Minister for Defence, who is now sitting opposite to me? Incidentally, I went to the trouble to abstract some figures concerning the profits made by that firm in the last few years.

Mr DEPUTY SPEAKER:

– What has that to do with the bill?

Mr CALWELL:

– The profits of that concern are made from handling wool, just as the profits of Younghusband Limited, Dalgety and Company Limited, Goldsbrough Mort and Company Limited, Australian Mercantile Land and Finance Company Limited, New Zealand Loan and Mercantile Agency Company Limited, Pitt, Son and Badgery Limited, and other concerns are made. I know them all! The Government must cast its net wider than the wool-growers. It must drag in all sections of the community to bear the burden of counterinflationary measures. Indeed, that is one of the strongest arguments against the bill. I have just mentioned Elder. Smith and Company Limited. The profits made by that concern in the last three years are set out in the following short tabulation : -

It is very significant that not one member of the Liberal party or of the Australian Country party has deemed it advisable to face his electors at any of the hundreds of meetings that have been held by primary producers during recent weeks. Nor, for that matter, have any of them succeeded in having a motion passed in support of the Government’s proposal. Every provincial and country newspaper published in Australia contains letters condemning this bill and castigating those who have betrayed the people who elected them. Of course, they may have induced a few leaders of groups to vote in support of the proposal, hut they have never gone out into the streets and to the saleyards to meet the primary producers and ask them to express their opinions. Furthermore, I repeat that they have never succeeded in having a motion adopted in support of the Government’s plan.

We will expose the supporters of this bill not only in the Parliament, and not only for the benefit of the hundreds of thousands of people who are listening to the broadcast of these proceedings to-night, but also in. the electorates. We will meet them at the saleyards, and at the street corners in country towns ! We will meet them in the halls of their own electorates and on the farms. We will confront them wherever we can in open debate, and we shall defeat them by the force of our logic and the weight of our argument. We may not have the money to hire the halls that are necessary to carry our message to the people, but we shall meet them under the star-studded sky, and what Cuthbertson, our greatest poet, has called “ The lustrous purple blackness of a soft Australian night “ will bc our canopy. And when we meet them, to resurrect a splendid piece of mixed metaphor coined by the present right honorable member for Bradfield (Mr. Hughes) in other days, “We will nail their lies to the wall with the javelin of truth “.

The people of Australia know now that the Australian Country party is merely a pack of wolves in sheep’s clothing, with a spare rabbit or two thrown in - also in sheep’s clothing! Never, since 1941, when the Fadden Administration was facing defeat, have I seen a group of men so dispirited, so dejected or so discredited as are those who occupy the treasury bench to-night. They are discredited, not only in the Parliament, but also outside the Parliament.

It is unprecedented that the revenues of a future financial year should be appropriated to meet the expenditure of the current financial year. Of course, the Treasurer knows that. He also knows that if he tried that practice in his private capacity as a public accountant he would find himself in gaol. If he did it on a race-course he would be kicked to death. As a budgetary measure it is the greatest piece of chicanery ever perpetrated.

Mr DEPUTY SPEAKER:

– Order ! The honorable member for Melbourne will withdraw all those phrases. The honorable member for Lalor (Mr. Pollard) will keep quiet while I am on . my feet. When any honorable member is disorderly and I ask him to withdraw, other honorable members will k»>ep quiet.

Mr POLLARD:

– Why pick on me?

Mr CALWELL:

–Of course, I shall withdraw.

Honorable members interjecting,

Mr DEPUTY SPEAKER:

-Order! I ask honorable members to remain quiet while I am speaking. ‘I consider that the language used by the honorable member for Melbourne is altogether unparliamentary and I ask him to restrain himself.

Mr Beazley:

– What about the accusations of insincerity directed at us?

Mr CALWELL:

– Precisely! May .1 continue in a modified strain? May I say that this measure is the most arrogant abuse of authority ever attempted and the most infantile remedy for inflation ever suggested? When the sceptre of power falls from the palsied grasp of the enemies of the workers, the farmers and the numerous little people, it will again be caught up by the vigorous hand of the Labour party. In days that are not far distant now, this unjust bill will be repealed, as the distinguished former Minister for Commerce and Agriculture, on behalf of the Opposition, has stated, with gratifying results to the present victims of the Menzies Government and with benefit to the whole people. This bill was fathered by revaluation and mothered by fear. It waa conceived in intrigue, it was born in deceit, and it has been nurtured on mendacity and misrepresentation.

Mr. Fadden having been given the call,

Motion (by Mr. McBeide) agreed to -

That po much of the Standing Orders lie suspended as would prevent the Treasurer (Mr. Fadden) from concluding hia speech without limitation of time.

Mr FADDEN:
Treasurer · McPherson · CP

– in reply - I do not think that the wool-growing industry and those associated with it could ever have dreamed that the cudgels would be taken up on their behalf by the avowed socialists of the Labour party. It was very fitting indeed that the debate was opened on behalf of ‘the Opposition by that socialistic wolf in lamb’s clothing, the honorable member for Lalor (Mr. Pollard). The honorable member used the opportunity to impress and to court a new-found love. I say “ new-found love “ because those engaged in the wool industry, and, indeed, everybody in Australia, can recall that, while the honorable mem!ber for Lalor was Minister for Commerce and Agriculture in the Chifley Government, he made the following statement in Ballarat in April, 1948 :-

The Labour party has a master plan for total socialization. We will go on and on until eventually in Australia you will have a great co-operative Commonwealth. Its wealth will be owned by the people and will lie operated in a socialistic manner for our people as a whole.

The then Postmaster-General, Senator Cameron, said on the 29th December, 1947-

Briefly a socialist policy, or experiments politically, would include a progressive abolition of the exploitation and impoverishment of workers by capitalists for profit, and the progressive changing of the ownership of land and other means of production from landlord and capitalist classes to that of the people, to be owned and controlled by them in their own interests.

Honorable members interjecting,

Mr DEPUTY SPEAKER:

-Order! I insist upon the same attention being given to the speech of the Treasurer (Mr. Fadden) as he gave to the speeches of other honorable members during this debate.

Mr Pollard:

– May I say that while I was delivering my speech the Treasurer said to one of his offsiders-

Mr DEPUTY SPEAKER:

-Order! The honorable member for Lalor will resume his seat or I shall name him. I insist upon silence while the Treasurer is speaking. He has listened day after day to other honorable members, and has a right to reply in silence.

Mr Rosevear:

– I rise to order. If the Chair intends to be so strict in its rulings, I am constrained to point out that the right of reply in this House gives only the right of reply to argument. Up to date, the right honorable gentleman has not replied to argument. He has merely made a personal attack on honorable members who have spoken in the debate.

Mr DEPUTY SPEAKER:

– Order ! The honorable member for Dalley (Mr. Rosevear) heard very little of the debate. I have heard practically everything pertaining to it, and the discussion has been almost as wide as the world. If the honorable member for Dalley had listened to the remarks of the honorable member for Melbourne, he could hardly describe them as being within the confines of the debate.

Mr James:

Mr. James interjecting,

Mr DEPUTY SPEAKER:

– Order ! The honorable member for Hunter (Mr. James) will apologize to the Chair for disobedience.

Mr James:

– What was the disobedience?

Mr DEPUTY SPEAKER:

– The honorable member will apologize to the Chair.

Mr James:

– For what? You did not ask me to withdraw anything.

Mr DEPUTY SPEAKER:

– Order ! I now ask the honorable member to withdraw and apologize.

Mr James:

– I withdraw and apologize.

Mr DEPUTY SPEAKER:

– Order ! I name the honorable member for Hunter.

Mr James:

– I withdrew and apologized before you named me.

Mr DEPUTY SPEAKER:

– If the honorable member gives me his assurance that he did so I shall accept it, but I shall ask him to rise in his place and repeat the withdrawal and apology.

Mr James:

– I shall do so. If you would control yourself a little better-

Mr DEPUTY SPEAKER:
Mr James:

– I withdraw and apologize, again and again.

Mr FADDEN:

– The measure before the House has been given various titles and misnomers by honorable members opposite who have participated in this important debate. The honorable member for Melbourne referred to the measure, as being, amongst other things, “ blatant and fraudulent “. Other terms used in connexion with it were “ sectional confiscatory “, “ robbery “ iniquity “. “ a slick cheapjack trick “, “ a slick, crook measure “, “ a sham “, “ a dishonest financial measure “, ““discriminatory “, “ unfair and unjust “, and “ a compulsory loan “. In the course of my remarks I shall conclusively prove that none of those terms can be justly applied to this very important financial measure.

In order to put the measure in its true national perspective, so that it may receive proper consideration, it is necessary to repeat the foundational reason why it was introduced. In the course of my budget speech I made tl-.e following statement : -

Wool prices have tended generally to increase ever since auctions were resumed after the war and last season the average price was 63d. ,per lb. greasy. This was nearly six times the average price in the years 1936-39 and the wool cheque of £300,000,000 last season was nearly six times as great as those of pre-war years. The recent market, however, has risen far above last season’s levels. Whilst future trends in the market are impossible to predict, if current prices hold throughout the season, the clip will bring between £450,000,000 and £550,000,000. . . .

This rise in wool prices will add to our international reserves and from that standpoint it can be counted a national advantage because of the larger quantity of imports we will be able to buy. The internal consequences, however, could be very disruptive unless firmly controlled. To make a further great addition to the volume of purchasing power, not matched by an equivalent quantity of additional goods, would increase competition for available supplies and divert resources still further from developmental activities into legs essential uses. This would tend t» disperse and weaken the national effort at a time when it should be more and more concentrated. Moreover, there would be direct effects on the cost of living because of higher prices for clothing and meat and this in turn would lead to higher wage costs throughout the whole economy. Within the wool industry itself, property values would soar to boom levels and wages and other working costs would rise, thus weakening the long-term position of an industry whose strength throughout the years has lain in its ability to produce wool at competitive cost levels.

The Government will therefore bring down measures to restrain the effects which this excess purchasing power would have upon the economy. . . . Here let me say that the interests of the wool industry will be fully safeguarded. The Government has no desire to take from a body of producers, who <‘<? had a full share in past adversities, the good fortune which has now come their way. Moans must be found, however, to harmonize the interests of the wool industry with those of the community as a whole and this is what the legislation to be submitted by the Government seeks to do.

Let us look at the position that confronts u3. First, let us have some regard to the economics of the wool industry. Wool prices have moved upward so abruptly and fantastically that any government would be totally irresponsible in the discharge of its responsibilities in the maintenance of the national economy if it did not take adequate and just steps to meet the situation that exceptional circumstances have forced upon us in the midst of extraordinary world conditions. In 1945-46 the average price realized for a bale of wool was £17 14s. 9d. and the taxable income of wool-growers in respect of their earnings from the sale of wool only, was £25,000,000. In the following year the average price a bale rose to £30 19s. 6d. and the total taxable income on the wool earnings of the growers increased to £40,000,000. In the year after that the price rose to £50 14s. 5’d. a bale and the taxable income to £88,000,000. In the following year, 1948-49, the average price a bale rose to £60 3s. 8d. and the taxable income to £120,000,000. In 1949-50 the price rose to £80 2s. 8d. a bale, which was considered to be most fantastic and was a record price for all time, and the taxable income rose to £225,000,000. We find now that the average of the prices received in the July-September period of this year was £1491s. 3d. a bale. Since then wool has sold at the fourth series of the Melbourne wool sales that were held from the 30th October to the 2nd November, at an average price of £1591s. 8d. a bale, and it is estimated that the taxable income for this year, on a conservative basis and if the price of £150 a bale only is maintained, and also ignoring the estimated levy in relation to stabilization, will reach the enormous figure of £372,000,000. I wish honorable members to note that fact closely, so I shall repeat it. If present trends continue, taxable income this year on wool earnings will increase from £225,000,000. last year’s amount, to £372,000,000. That will be an increase of approximately £150,000,000. It will be a purely fortuitous increase.

What does the Government intend to do during the present financial year through the operation of the present measure? It is asking the wool-growers to subscribe, through the pre-payment of income tax, £103,000,000, or two-thirds of the extra £150,000,000 of the taxable income that they will receive. There will be a surplus of £50,000,000 after making this provision. This is not confiscation, or a compulsory loan, but prepayment of tax that they would have had to pay in the ordinary course of events in the year 1951-52. The Government is simply requiring the wool industry to contribute a portion of this fortuitous or windfall extra income to the revenue that it will need in order to meet the financial difficulties that have arisen from exceptional circumstances in an extraordinary world. The Government must provide for the future defence of this country, and of democracy and civilization generally. The wool producers are being asked to pay their in come tax earlier than is customary, but not to any greater amount than they would ultimately have been called upon to pay. Honorable members have witnessed a shedding of crocodile tears, and an embrace of the wool barons. They are asked to believe that this measure will pauperize the wool industry and that the small man is to be detrimentally affected.

Let us consider the bill on the basis of the facts. At £150 a bale the average price of wool is £70 a bale above last year’s all-time record of £80 a bale. The Government is asking the wool producers to pay their income tax in advance to the extent of 20 per cent, of £150, that is, £30. Their residue after providing the £30 will be £120 a bale, compared with £80 at the previous all-time record average price of 1949-50. These are the facts and the undeniable circumstances under which the Government is asking the wool-growers to contribute to the welfare of this nation, of which they are part and parcel. Who is more concerned than is this great industry, in common with every person in Australia, with the adequate security and appropriate defence of this great country? All the money that the Government is expending on defence is to be expended in the interests of every industry and of every man, woman and child in the community.

Let us consider the good fortune that has come to this industry, and which nobody begrudges it. Every one is pleased that the wool-growers are the recipients of record prices, but do not let us be blinded to the circumstances that have brought this about. Let us realize that the price of wool has moved from last year’s record of £80 a bale to the £150 that I have cited as the average for this year.

I have two graphs which with leave of the House I shall incorporate in Hansard.

The first graph shows the movement of wool prices since 1945-46. I ask honorable members to observe how definitely and abruptly prices have risen in the year 1950-51. From a base of 100 the rise has been to 950. The lower lines on the graph represent the movement of the prices of other farm commodities of an exportable nature. Compare them with the wool industry. Compare the income of the wool industry with the national income of Australia. Consider the movement of the national income. The Government has been asked what action it intends to take in respect of woolbrokers and the companies of Australia. The income of the companies up to the last available date in 1950 is indicated on the bottom line, which tells its own story. The whole economy of the wool industry is out of focus with the rest of the economy of Australia. Would not this Government be totally irresponsible if it did not endeavour to harmonize its economy with the general economy of Australia ?

The second graph indicates defence expenditure per head in respect of Australia, the United Kingdom and the United. States of America, expressed in Australian£1’s. In 1947-48 the defence expenditure per head in the United

Kingdom was a little over £20. In the United States of America is was somewhat higher. In Australia it was about £8. In 1948-49, the United Kingdom expenditure remained at about the same level, but that of the United States of America increased. The United Kingdom expenditure remained stable in 1949-50. The expenditure of the United States of America was the highest and that of Australia was at about the same level. In the year 1950-51 the expenditure of the United Kingdom has moved up, and the chart shows the position of Australia.

Mr Rosevear:

– I should like to know whether the Treasurer has shown on that chart the defence expenditure of any new nations.

Mr FADDEN:

– I have not been able to obtain that information.

Mr Rosevear:

– Then the chart is valueless.

Mr FADDEN:

– No, it is not. Australia’s greatest market for wool is the United Kingdom. America has been a very large buyer in the Australian market and has bought also from the United Kingdom in the. form of manufactures as well as of the raw material. The position of the wool industry must be considered in conjunction with the general world condition of vigorous defence preparation. For this year of 1950-51 it is estimated that Australia’s defence expenditure will amount to £133,300,000, compared with £54,000,000 last year, an increase of £79,000,000. That sum is necessary on account of world conditions, which have been accentuated by the Korean campaign. The Government was confronted, before it had completed its budget, with the necessity to bring forward its defence proposals two years. It has to provide for national service training. It had extra costs to meet in connexion with the Korean campaign, and with its general international responsibilities. These have necessitated the large increase of defence expenditure that I have mentioned. In view of the vigorous world preparations for defence by the democracies, to which Australia contributes, is it not reasonable to ask our wool industry to accept this equitable and just charge?

The Government has to meet exceptional defence expenditure and to cope with the general inflationary position which exists not only in Australia, but also all over the world. Therefore, it must at least endeavour to arrest the upward spiral of inflation and at the same time meet its commitments. The Government is confronted with an expenditure of £738,000,000, which is £172,000,000 more than that with which the last Government was confronted in the previous year. I challenge any honorable member to point out where that expenditure can, in the best interests of the nation and of the wool industry, be reduced. It cannot be.

Mr Chifley:

– The right honorable gentleman purported to point out at the last genera] election how it could be done.

Mr Ward:

– By reducing taxation.

Mr FADDEN:

– I said that the policy of this Government was one of a progressive reduction of taxation as and when the financial circumstances and commitments of the country would enable that to be done. That statement is to be found in my policy speech, and the policy of the Government is to effect a progressive reduction of taxation. We are living in an entirely different world to-day from that in which we lived at the time of the last general election. What honorable member would countenance a reduction of the defence expenditure provided for in the Estimates ? The Government contends that the estimated amount of defence expenditure is the minimum that should be provided for, not only in the interests of this country hut also in view of the liabilities and obligations that we owe to fellow democracies in this very unsettled and unpeaceful world.

Let us consider what other expenditure might be reduced. Would honorable members of the Opposition reduce the expenditure on immigration ? Would they reduce further the developmental programme envisaged in the Estimates? Would they reduce the PostmasterGeneral’s expenditure on construction of a progressive nature much of which is a legacy that was left by the previous Government? Would they find the wherewithal to pay the war gratuities or would they refuse to do so? In reply to the honorable member for Melbourne (Mr. Calwell), who said that there was a reserve of £36,000,000 on which the Government could draw in order to meet the £67,000,000 required for the payment of war gratuities I say, as I have said before, that there was not a single shilling available for that purpose. The reserve which the honorable member mentioned is merely a paper reserve, and in order to apply it to the purpose for which it was intended the Government will have to raise the amount by way of a loan or of taxation. The same applies to the National Welfare Fund. I have never said that it was not proper to use surplus moneys for the redemption of treasury-bills, but I have said that it was absolutely improper for the Opposition to endeavour to deceive the people into believing that that money was available in the form of ready liquid cash for disbursement by this Government.

Honorable members are asked to believe that other methods could have been adopted to achieve what we are hoping to achieve through the wool sales deduction plan. This cannot by any stretch of the imagination he regarded as a tax. It is no more than a prepayment against the future tax liability of those who are recipients of high incomes in their most fortunate year. Not an extra brass farthing is being extracted from the woolgrowers by this scheme compared with the total amount of tax that would be taken from them ordinarily next year. In view of the economic circumstances of Australia and of our potential responsibilities, can any one deny that the economics of the wool industry do not justify some financial plan that will harmonize the interests of that industry with those of the community in general, and with the broad plan of our national economy ?

If we agree that something must be done and that the wool industry’s income is of such an order that it is throwing the whole financial position of Australia out of focus, then what should be done ? “What would the position be if the Opposition party were now in office ? What is necessary to achieve the objective so patently desirable in the economic circumstances that confront us, having regard to the wool industry’s association with them? Does the Opposition intend that this Government should leave the inflationary position untouched and allow it to become worse? If not, what should be done? Should taxation be generally increased as has been suggested by the honorable member for Fremantle (Mr. Beazley) ? If that were done the tax would not be collected until next year. But our great financial problems arise this year and must be dealt with this year. Even if it were the policy of this Government to increase taxation the additional revenue that would result therefrom would not be available for expenditure until next year. However, our problems are immediate. We are asked to believe that the taking of this £103,000,000 will not arrest inflation or remedy the inflationary position. Let it be agreed that the expenditure to which I have referred is an irreducible expenditure of £738,000,000. In order to meet that commitment and to arrest inflation we are raising £103,000,000 by the deduction scheme. If we do not do that what are the other methods of raising money, having regard to the fact that £738,000,000 is an irreducible minimum of expenditure? One other means of raising the money would be to increase taxation sufficiently to meet our commitments. But the money is to be expended this year and, as I have said, taxes could not be collected until next year.

Another way of raising revenue would be by the re-issue of treasury-bills to the amount of £103,000,000. That is a most inflationary method of finance and is one that must be avoided, whatever else might happen. To add another £103,000,000 worth of treasury-bills to the financial pool of the country and then pump it into the already dangerously high reservoir of purchasing power would be a disastrous policy for any responsiblegovernment to adopt. Then we are told that we should, borrow money on the loan market. But the capacity of the loan market is limited, and every survey that has been carried out by the Loan Council, which is the most directly interested body, shows with certainty that it will have to be strained to the uttermost to meet the loan requirements of governments for State and Commonwealth housing, war service homes and exservicemen’s land settlement as well as the capital requirements of the States and the Commonwealth for government and semigovernment instrumentalities. In addition, this Government is confronted with the conversion loan of £129,000,000 this year. That loan carries a most advantageous rate of interest to holders, and attaching to it are very worthwhile concessional advantages. It is a 4 per cent, loan and is subject to a taxation concession. This year we are converting that to 3-J per cent, subject to tax. Honorable members can imagine what proportion of the redemption money will have to be provided from other sources if there is not a total conversion.

It has been argued that we should reduce the wool proceeds by appreciation of the £1 by about 20 per cent. I shall not go into the merits or demerits of that proposal, but I point out that whilst there would be a reduction by 20 per cent, of the wool-growers’ cheques, even if the method had all the virtues claimed for it by its advocates it would affect adversely all our exporting industries and many other industries. Some people say that in order to remedy the position a 20 per cent, tax should be levied on all industries.

We must realize that whilst the wool industry would be best equipped to meet the appreciation of the £1, the effect of appreciation on the wool-growers' incomes as compared w ith that of the proposal now before the House would be a loss of £50,000,000 on a gross income of £492,000,000 or of £52,500,000 on a gross income of £550,000,000, and the loss of taxation revenue would be £48,000,000 on a £492,000,000 wool clip income and £57,500,000 on a £550,000,000 income. Therefore that is not the remedy for the present conditions. I have had a table prepared which deals with these matters, and with the consent of the House I shall have it incorporated in *Hansard -* Note. - Under appreciation of 20 per cent., as compared with the Wool Deduction Scheme, the following losses are incurred by the wool-growers and the Government : - It has been argued by members of the Labour party that we should fix a homeconsumption price for wool. No doubt that has emanated from their socialist friends in the United Kingdom, because I have just received information which may be news and perhaps a warning to some people. The report is that in the United Kingdom the wool clip has been acquired by the Government until 1954 at an average price of 2s. per lb. sterling plus 3 3/4 d. per lb. for expenses, a total in Australian currency of 2s. lid. per lb. Perhaps honorable members opposite had that scheme in view when they advocated certain thing's for the wool industry in the plausible, if not hypocritical way that they have done in the course of this debate. It might be suggested that the Labour party would do with the wool industry what it previously did with regard to sheepskins. In 1930 it endeavoured to impose an excise duty on sheepskins. In the last day of the sitting in 1930 the Labour Government rushed through the House legislation to this effect - >On and after the eleventh day of December one thousand nine hundred and thirty at 9 o'clock in the forenoon reckoned according to standard time in the territory for the seat of Government, duties of customs are imposed according to the following tariff: - > >Sheepskins with wool 4d. a lb. The House divided on that motion and amongst those who voted for the proposed tariff were the Leader of the Opposition **(Mr. Chifley),** the honorable member for Melbourne Ports **(Mr. Holloway),** and the honorable member for Werriwa **(Mr. Lazzarini).** The protests against that action were so widespread and determined that on the second day after the Parliament resumed sitting in March, 1931, the Government withdrew the legislation without giving any reason for its action. Perhaps honorable members opposite had that in mind as a remedy for the inflationary position of the wool industry. If they did that with sheepskins in 1930 what would they do with wool, which is now selling at £150 a bale? Let the wool industry realize the possibility that had the Labour party been in power there would have been no prepayment of tax but a straight-out export duty. We are asked to believe that the Opposition does not endorse sectional taxation and we are told that this tax is a sectional tax and that the wool industry has been singled out for attack. The defence requirements of every democratic nation have singled out the wool industry because wool is a commodity of inestimable defence value, and the fact that the world is expending large sums of money on defence preparations has meant that the wool industry has benefited by receiving high prices for its commodity. As a result of the preparations that are being made throughout the world, Australia is involved in an increase of its defence expenditure to the amount of £79,000,000. The honorable member for Fremantle shed crocodile tears about this so-called tax. He said that it was most iniquitous and of a type that had not been heard of since federation. He claimed that the Government had singled out this industry and had taxed it on its gross income. Is the honorable member's memory so short that he does not remember, or it convenient for him to forget, that in his own State of Western Australia the goldmining industry was singled out to bear the imposition of a gold tax that took all proceeds from the sale of gold above a 50 per cent, increase over the pre-war price of gold? That act was suspended only in December, 1947, after the Chifley Government had continued it up to that time. Therefore the Opposition's criticism that the proposed wool sales deduction is a forced loan is arrant humbug. Neither is it a tax, much less an iniquitous, discriminatory and confiscatory tax. Honorable members opposite have repeatedly said that it is a compulsory loan. What is provisional tax, in fact? Ever since it inception provisional tax has been assessed on the income of the preceding year. It has been collected in the current year as a forward payment of the tax that will be payable in respect of income of the current year. Members of the Opposition have also said that under this proposal the Government, in effect, is mortgaging its budget. At least the Leader of the Opposition should know that section 81 of the Constitution requires that all revenues or moneys raised or received by the Government shall constitute one Consolidated Revenue Fund. For that reason the Chifley Government, for a period of five years, paid the whole of its provisional tax collections into that fund. This Government simply proposes to continue that practice, as it is obliged to do under the Constitution. Therefore, it is humbug for the Opposition to say that this proposal is a departure from past practice or that it is unsound from an accountancy standpoint. No one would compare the Consolidated Revenue Fund, in respect of which the Constitution lays it down that certain requirements shall be observed by the Government, with the profit and loss account of an ordinary business or the income and expenditure account of a club or a. similar organization. The Consolidated Revenue Account is a summarized statement of the cash book of the Commonwealth. {: .speaker-A48} ##### Mr Chifley: -- The statement that the right honorable gentleman has made about the assessment and payment of provisional tax is not correct. {: .speaker-F4T} ##### Mr FADDEN: -- Obviously, provisional tax is a prepayment of tax which is assessed on the basis of the preceding year's income in respect of the income of the current year and is payable in the current year. It is humbug for members of the Opposition to say that under this proposal the Government intends to do something different from what the Government that they supported did. The fact is that that Government observed the requirements of the Constitution in this respect, and the present Government must do likewise. {: .speaker-L08} ##### Mr Rosevear: -- Does not this proposal involve the payment of an additional provisional tax? {: .speaker-F4T} ##### Mr FADDEN: -- I shall explain that point later. Honorable members opposite have said that under this proposal the Government will raise a compulsory loan from the wool-growers. {: .speaker-JVJ} ##### Mr Mulcahy: -- So it will. {: .speaker-F4T} ##### Mr FADDEN: -- Under the payasyouearn system, all employees have deductions made from their wages as prepayment of their tax liabilities. In 1944-45 collections of income tax under that method amounted to £81,805,000 and during the following year £4,522,000 of that amount was refunded to taxpayers who had overpaid their tax. {: .speaker-L08} ##### Mr Rosevear: -- A small proportion. {: .speaker-F4T} ##### Mr FADDEN: -- Well, I ask the honorable member for Dalley **(Mr. Rosevear)** to listen to the figures in respect of the following years. In 1945-46, out of a total collection of £81,467,000 under the pay-as-you-earn system, £8,689,000 was refunded to taxpayers. During the next year, out of a total collection of £85,307,000, refunds of tax totalled £12,694,000; and in 1948-49, out of a total collection of £86,562,000, the total refunded to taxpayers was £13,544,000, or 15* per cent, of the total amount collected in that year. I am not criticizing the pay-as-you-earn system. Experience has shown that it is the most practical system that can be evolved to meet the special circumstances that exist to-day. However, I strongly object to the hypocrisy of members of the Opposition when they say that, by making deductions from the incomes of woolgrowers from the sale of wool as a prepayment of their future tax liability the Government is doing something different from what the Chifley Government did. On the basis of their argument, taxes paid by the ordinary taxpayer under the payasyouearn system can with equal justification be described as compulsory loans. However, the worker who pays tax under that system cannot obtain immediate redress in the event of hardship or a change of circumstances after tax has been deducted from his weekly wages. He must wait to obtain such redress until after he has lodged his return and his tax has been duly assessed. In 1949-50, of a total number of 2,500,000 taxpayers who paid tax under the payasyouearn system, approximately 2,100,000 received a refund. To use the Opposition's own argument, that means that the Chifley Government in that year raised a forced loan of approximately £13,500,000 from 2,100,000 taxpayers. I repeat that the proposed wool sales deduction is not a forced loan, hut a prepayment of the grower's future tax liability. What the Government is doing in this respect is precisely what it is required to do and what the previous Government was required to do under section 81 of the Constitution. The honorable member for Dalley asked me a question with respect to provisional tax. {: .speaker-L08} ##### Mr Rosevear: -- Is not the provisional tax for which a part of this deduction is to be used an additional provisional tax? {: .speaker-F4T} ##### Mr FADDEN: -- Of course, it is. {: .speaker-L08} ##### Mr Rosevear: -- So, the wool-growers will be obliged to pay the tax twice. {: .speaker-F4T} ##### Mr FADDEN: -- I have explained that provisional tax ordinarily payable this year would be based on the income of the grower for the preceding year. So long as the income remains steady, the provisional tax approximates the tax ultimately assessed. But what is the position of the woolgrowers to-day? The provisional tax to be collected ordinarily this year is based on an aggregate income of £225,000,000 earned in 1949-50. But the taxable income of wool-growers for this year will undoubtedly bie in the aggregate much greater than that sum. It will be approximately £375,000,000, or £150,000,000 more. Therefore, the provisional tax in respect of wool-growers should be assessed this year on an income £150,000,000 in excess of their aggregate actual income last year. If the provisional tax had been assessed on that basis, £65,000,000 to £70,000,000 of the proposed £103,000,000 would have been paid. Members of the Opposition have claimed that in cases of hardship woolgrowers will suffer terrible injury under this proposal. Those honorable members have criticized the proposal to make a flat-rate deduction of 20 per cent. In the absence of adequate machinery that would enable deductions to be made at varying rates and having regard to the fact that, in order that inflation may be curbed, a proportion of the income from wool sales must be deducted at the source, as well as the urgency of defence commitments, the Government had no alternative but to make the deduction at a flat rate. Whereas, on the average, wool-growers received £80 a bale for their wool last year, which was a record price, this year they are receiving on the average £150 a bale, or- a fortuitous increase of £70 a bale. That windfall has been contributed to by the expenditure that the democracies are being obliged to incur in respect of their defence requirements. Out of that additional £70 a bale, the Government will withhold under this proposal £30 not as a tax or as a forced loan, but as a prepayment of the grower's future tax liability. The grower will still retain £40 of that £70 and will thus receive on the average this year £120 a bale for his wool compared with the £80 a bale that he received last year. In view of those facts how can it be said that the small grower will be adversely affected under this proposal? I am old enough to realize that some cases of hardship are bound to arise just as they arise inevitably under any taxation proposal. It is for that reason that the income tax law makes provision in respect of cases of hardship and that appeal boards have been set up throughout the country in order to provide relief where the granting of relief is justified. Consequently, this measure contains provisions for the inevitable cases of hardship. Under those provisions such cases will be dealt with sympathetically. The Commissioner for Taxation will be required to give a decision in cases of hardship within 30 days. Should he fail to do so or should his decision be unacceptable to the applicant for relief, the applicant may apply to one of the fourteen land valuation boards that operate throughout the Commonwealth. Everything will be done wisely arid expeditiously to grant wool-growers relief from any hardship that may be caused by the wool sales deduction. The Government does not wish to impose an oppressive measure on any section of the community, or to. treat it unjustly. I am sure that the sensible wool-growers, and the sensible people of Australia, will realize that the economic conditions of the wool industry are out of harmony with the national economy. It is in order to harmonize those conditions, and for no other reason, that the Government is asking the wool industry to contribute a part of its fortuitous income as a pre-payment of tax in the present difficult year; a year in which the Government will incur extraordinary and unforeseen expenditure; a year in which our defence programme must be brought forward as expeditiously as possible; a year in which, OUr defence commitments, in order that we may make our proper contribution as a member of the United Nations, will require the expenditure of an additional £79,000,000 compared with the expenditure on defence last year. Yet the Opposition would have us believe that the amount of £103,000,000 that the Government expects to collect by way of the wool sales deduction should not be used in connexion with that expenditure. A great deal has been said in this debate about the present inflationary conditions. I emphasize that if the Government is to meet the estimated expenditure of £738,000,000 during this financial year, it must utilize £103,000,000 of the fortuitous income that is being derived by the wool-growers. Otherwise, that money must be left in the hands of the wool-growers, and the Government must borrow a similar amount from the Commonwealth Bank by way of treasurybills. Such a method of finance would accelerate the spiral of inflation. The Opposition asks the Government to permit the wool-growers to retain that amount of £103,000,000, and pay their income tax in the ordinary course as it becomes due, and, in the meantime, meet its indispensable commitments by borrowing £103,000,000 by way of treasurybills. That proposal would produce double inflation, because £103,000,000 would be obtained by treasury-bills, and £103,000,000 of purchasing power would be released in the community via the wool-growers' cheques. Yet the Opposition claims that the wool sales deduction proposal will not combat the present inflationary conditions ! Let us consider for a moment the nature of our expenditure during this financial year. A strategic stock pile is to be established, at a cost of £50,000,000, a big proportion of which will he expended upon imports. The Postal Department will incur sub stantial expenditure on equipment, the bulk of which was ordered some years ago from other countries. Will not that be an anti-inflationary, or deflationary measure ? I have been criticized for including capital expenditure in my calculations. I have never been happy about making provision for capital expenditure out of revenue, but the present circumstances leave me with no alternative. The loan market, out of which capital works may be financed, is limited. If the Consolidated Revenue account is relieved of such capital expenditure, taxation must be reduced to a corresponding degree. But such a policy would be inflationary. The Opposition claims that the collections from the wool sales deduction should not be included in the revenue account for this financial year, but should be regarded as future revenue. Even if we grant that such an argument is logical, we can sensibly and successfully claim that £69,000,000 of capital expenditure, for which provision is made in the budget, is for the benefit and welfare of the nation in the future. The amount of £103,000,000 that the Government expects to obtain by way of the wool sales deduction is to be part and parcel of the means of financing it. Therefore, it does not matter how we examine the problem. The matter has been wisely planned, and the Government is measuring up to its responsibilities. The Opposition has claimed that the operation of this bill should be limited to one year, but the very nature of the scheme precludes the adoption of such a temporary provision. As with income tax procedure, the Government will be required to introduce a bill to establish the rate of the wool sales deduction each financial year. That is to say, the rate will be fixed by the Parliament, and a safeguard is provided that the amount which may be deducted shall not exceed 20 per cent. A responsible government will have to determine whether this legislation shall be reenacted in future. I make the definite promise that this measure will not remain on the statute-book for one minute longer than the economic circumstances and conditions of the country warrant. This is a temporary provision, but its duration must be conditioned by the economic circumstances that a changing world is forcing upon us almost from day to day. The contention that the operation of this bill should be limited to a specified period is irresponsible humbug, but I emphasize that this measure will not be administered for one minute longer than the economic conditions of the country warrant. {: .speaker-L08} ##### Mr Rosevear: -- Will the woolgrowers be taxed again next year? {: .speaker-F4T} ##### Mr FADDEN: -- They may be. Opposition members are displaying a newly found love for the wool-growers. Mary's affection for her little lamb was as nothing compared with the love that members of the Labour party pretend to have for the wool-growers. However, that solicitude will not deceive the woolgrowers, or any one associated with the wool industry. The House is asked to believe that the small wool-grower will suffer considerable financial hardship when he is compelled to pay the wool sales deduction. Are not Opposition members aware that wool is selling for £150 a bale ? What was the position of the small woolgrower last year when wool was bringing £80 a bale? Was he financially embarrassed? I have never heard so much humbug as the speeches of Opposition members on this proposal. A woolgrower who considers that the wool sales deduction affects him harshly or oppressively may apply to the Commissioner of Taxation for relief, and his case will receive sympathetic and practical consideration. Much misleading criticism of the wool sales deduction has been published outside the Parliament. I direct attention to a full-page advertisement that appeared in the *Canberra Times* recently. It purports to give the financial position of a member of an organization known as the United Farmers. I challenge **Mr. Chapman,** who is responsible for that advertisement, to state the membership of the organization, and' to produce the taxpayer whose financial circumstances were cited. I should like to examine his income tax returns, not as the Commonwealth Treasurer. but as an accountant. I suggest that such an investigation would disclose that the allegations were based upon stupidity. The statement showed the income and the expenditure of a grower who produced 30 bales of wool, and it was misleading in two important respects. It showed that, during the current financial year, that grower would receive £3,000 for 30 bales of wool, or an average return of £100 a bale. Yet the average price .for 87,343 bales of greasy wool during the months of July and August, 1950, which were the " lightest " months this year, was £141 7s. On that basis, 30 bales of wool would realize £4,240, that is, £1,240 more than the income shown in the published statement. The other misleading item was in respect of working expenses, which were shown as £2,400, representing £80 for every bale of wool produced,. Would it cost £80 to produce a bale of wool? This fellow's income tax return is worth an examination, because if he is getting away with £2,400 as allowable expenses for the production of 30 bales of wool, he is dodging income tax. I have prepared a statement showing the working results which might be expected by a grower with approximately 1,Q00 sheep, under normal conditions and under the wool sales deduction scheme. With the consent of honorable members, I shall incorporate it in *Hansard.* It is as follows: - I have now replied to the principal matters that have been raised in this debate. I have proved conclusively that the present economic circumstances require action to be taken by the Government to harmonize the economy of the wool industry with the general economy of Australia. I have pointed out that the wool sales deduction proposal is, in all the circumstances, the most equitable and sensible that can be evolved to meet that position. It is not confiscation, and it does not discriminate against the woolgrowers. It is not a wool tax, but a prepayment provision to meet future tax assessments. The wool industry is not to be asked to pay one shilling more than it would normally pay in tax. All that it is asked to do is to pay tax earlier than is usual, and thereby assist the Government to solve the economic problems of the country. It will be found, in the final analysis, that this proposal is in the best interests of the wool industry itself. Question resolved in the affirmative. Bill read a second time, and committed *pro forma* ; progress reported. Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : Motion (by **Mr. Fadden)** agreed to - >That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to provide for the collection and recovery of amounts payable under the Wool Sales Deduction Act (No. 1) 1950, and the Wool Sales Deduction Act (No. 2) 1950, and for the application of those amounts. Resolution reported and adopted. *In committee:* Consideration resumed. Clauses 1 to 5 agreed to. Clause 6 - (1.) For the purpose of enabling the collection from producers of amounts payable by them under the Wool Sales Deduction Act (No. 1) 1950- {: type="a" start="a"} 0. a person who holds, on the twentieth day of October, One thousand nine hundred and fifty, or receives on or after that date, an amount in excess of Twenty pounds in respect of wool sold by him on behalf of a producer (not being a registered person) on or after the twenty-eight day of August, One thousand nine hundred and fifty, shall be liable to pay to the Commissioner an amount equal to one-fifth of that amount; and 1. a person who, on or after the twentieth day of October, One thousand nine hundred and fifty, purchases wool from a producer (not being a registered person), otherwise than through a registered person acting as agent of the producer, shall be liable to pay to the Commissioner an amount equal to one-fifth of the purchase price. {: #debate-25-s5 .speaker-F4T} ##### Mr FADDEN:
Treasurer · McPherson · CP -- I move - >That, in sub-clause (1), paragraphs *(a)* and (b), the words "one-fifth" be left out, with a view to insert in lieu thereof the following words : - " the prescribed proportion ". The purpose of the amendment is to remove from a machinery provision of the bill the reference to a specific rate of wool sales deduction. The operative rate will be as is prescribed in the resolution. {: #debate-25-s6 .speaker-A48} ##### Mr CHIFLEY:
leader of the Opposition · Macquarie -- I think that this is the appropriate stage for me to make a few observations in reply to the remarks made by the Treasurer **(Mr. Fadden)** in reply to the second-reading debate. I do not propose to cover all the ground again or to detain the Committee at any length on this matter. Some of the statements made by the right honorable gentleman concerning provisional tax - its payment and the basis on which it is calculated - were entirely misleading. The Opposition will permit the measure to go to the Senate for further consideration, and, therefore, it does not propose to speak to all the remaining clauses of the bill. It is clear that this clause proposes that during the current financial year wool-growers shall pay a provisional tax; that, in addition, 20 per cent, will be deducted from the total proceeds of their wool sales; and that that deduction of 20 per cent, shall be taken from them by the Government as payment in advance of their income tax for some future year. I wish to make it perfectly clear now that no other section of the community is subjected to similar treatment. The payment of provisional tax was referred to by the Treasurer when he introduced the measure. The tax paid in respect of the current year will be based on a taxpayer's income for the previous year. That proposal was adopted by the Parliament on the recommendation of a special committee that was appointed in 1943 to investigate the desirability of introducing the payasyouearn system of taxation. No taxpayer was asked to pay tax during the first six months or so after the introduction of the legislation that authorized application of the instalment deduction system, except where the payment of provisional tax covered a full year. In other words, taxpayers were not then required to pay any tax for the first six months of that financial year, and, in fact, they were called upon to pay tax in advance only during the last few months of then current financial year. I want to make it perfectly clear that never before has any citizen of this country been asked to permit a deduction to be made from his income for the payment of tax in advance. No such provision has ever appeared in any taxation law of this country. The proposal embodied in this clause will apply only to one section of the community, and is, therefore, a sectional tax. {: .speaker-KOL} ##### Mr McBride: -- Like the gold tax! {: .speaker-A48} ##### Mr CHIFLEY: -- I think that that interjection is wide of the mark. If honorable members opposite want to pursue the subject of the payment of taxes, other than income tax, I point out that most of those taxes were introduced by anti-Labour administrations. {: .speaker-F4T} ##### Mr Fadden: -- But when the Leader of the Opposition **(Mr. Chifley)** was in office he continued those taxes. {: .speaker-A48} ##### Mr CHIFLEY: -- Under the Government's proposal tax will be collected from wool-growers in advance in respect of a future financial year, and the revenue derived therefrom will be expended by the Government during the current financial year. I do not think that any one can deny that that is the effect of the Government's proposal. To summarize the Opposition's objection to this measure, I repeat that this is the first time in the history of the country that any individual will be compelled by law to pay tax a year ahead. {: .speaker-KOL} ##### Mr McBride: -- Under the payasyouearn system taxpayers are already paying their income tax a year ahead. Mr.CHIFLEY. - I do not propose to go into such contentions as that raised by the honorable gentleman. In any event, I dealt with the particular matter that he has raised in the speech that I made during the second-reading debate on the measure. I then stated facts which cannot be controverted. It is undeniable that this measure will authorize the Government to collect tax that will become due in future years in order to meet its expenditure during the current financial year. I conclude my remarks by pointing out that it is very sad that the political parties represented opposite, whose members told the people only twelve months ago that the Treasury was overflowing with money, shouldnow be compelled to collect income tax that will become due in future years in order to meet their current expenditure. {: #debate-25-s7 .speaker-KEE} ##### Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP -- I rise, **Mr. Temporary Chairman,** to seek your guidance on a point of procedure. The clause that we are now discussing refers to a statute entitled Wool Sales Deduction Act (No. 1) 1950, and the purpose of the proposed amendment is to apply to wool-growers the provisions of that act and of the Wool Sales Deduction Act (No. 2) 1950. Neither of those bills appears on the notice-paper, and I should like to be informed of whether they have been introduced to this chamber. Is it competent for the committee to discuss the imposition of penalties prescribed in legislation which apparently has not yet been considered by honorable members? {: #debate-25-s8 .speaker-KQK} ##### The TEMPORARY CHAIRMAN (Mr McDonald:
CORANGAMITE, VICTORIA -- The measures referred to by the honorable gentleman are being prepared in pursuance of a resolution adopted by the committee., Mr.KENT HUGHES. - That is so. However, I repeat that the committee is apparently discussing the imposition of penalties prescribed in certain measures that have not yet been placed before this chamber. {: #debate-25-s9 .speaker-10000} ##### The TEMPORARY CHAIRMAN: -- It is quite proper, under the terms of the resolution adopted by the committee a few minutes ago, for this procedure to be followed. Amendment agreed to. Amendment (by **Mr. Fadden)** agreed to- >That, after sub-clause (4.), the following sub-clauses be added: - " (5.) This section does not apply in relation to - > >wool sold on behalf of, or purchased from, a producer who exhibits to the person who sells the wool on his behalf, or who purchases the wool from him, a certificate issued to him under sub-section (1a.) of section nine of this Act; > >wool produced in the Northern Territory of Australia ; > >) wool sold by the producer for delivery by him out of Australia (including wool so sold on behalf of the producer) ; or > >wool sold on or after the date on which the Wool Sales Deduction Act (No. 1) 1850 ceases to be in force. " (6.) An amount payable to the Commissioner under this section shall be calculated to the nearest amount in complete pounds which does not exceed the amount which would be payable but for this sub-section. " (7.) In this section, 'the prescribed proportion ' means- > >one-fifth; or > >where, at the time of the sale or disposal of the wool, the proportion of the sale value of wool for the purposes of the Wool Sales Deduction Act (No. 1 ) 1950 is less than one-fifth - that lesser proportion.". Clause, as amended, agreed to. {:#subdebate-25-0} #### Clause 7 - >A person who is liable under the last preceding section to pay an amount to the Commissioner shall - > >pay that amount not later than the seventh day of the month next succeeding the month in which he becomes so liable; and Amendment (by **Mr. Fadden)** agreed to- >That, in paragraph *(a),* after the word "liable", the following words be inserted: - "or within such further time as the Commissioner allows.". Clause, as amended, agreed to. Clause 8 agreed to.. Clause 9 (Certificates of exemption). {: #subdebate-25-0-s0 .speaker-F4T} ##### Mr FADDEN:
Treasurer · McPherson · CP -- I move- >That, after sub-clause (1.), the following sub-clause be inserted: - " (1a.) Where the Commissioner is satisfied that the income of a producer is exempt from income tax under the Income Tax Assessment Act 1036-1949 he shall, upon application by the producer, issue to him a certificate exempting from the application of section six of this Act wool sold by him (including wool sold on his behalf).". The purpose of the amendment is to exempt from the deduction primary producers who are exempt from income tax under the Income Tax Assessment Act. Amendment agreed to. Clause, as amended, agreed to. Clause 10 agreed to. Clause 11 (Cases of hardship). Amendment (by **Mr. Fadden)** agreed to - >That the clause be left out, with a view to insert in lieu thereof the following clause: - "11. - (1.) Notwithstanding anything contained in section ten of this Act, where the Commissioner at any time receives from a producer a wool deduction certificate in respect of wool sold, disposed of or exported in a year of income, and is satisfied that the producer has suffered such a loss or is in such circumstances that the application of the provisions of this Act would entail hardship on the producer unless this section were applied, the Commissioner may - > >credit the whole or a part of the amount of the certificate in payment or part payment of the income tax and provisional tax payable by the producer in respect of the income of any year of income preceding that year of income; > >make a payment to the producer of the amount by which the amount of the certificate exceeds the amount which, in the opinion of the Commissioner, will be, for the purposes of section ten of this Act, the net tax payable by the producer in respect of the income of the year of income in which the wool was sold, disposed of or exported; or > >apply the provisions of paragraph (a) of this sub-section, and also apply the provisions of paragraph (b) of this sub-section as if tie reference in that paragraph to the amount of the certificate were a reference to so much of the amount of the certificate as exceeds the amount credited under paragraph (a) of this sub-section. " (2.). Where the Commissioner receives a wool deduction certificate from a partnership or the trustee of a trust estate in respect of wool sold, disposed of or exported by that partnership or trustee, he may, for the purposes of this section, apportion the amount of the certificate in the manner specified in sub-section (3.) of section ten of this Act, and treat each amount so apportioned as if it were the amount of a wool deduction certificate received from the person to whom it is apportioned, and as if that person were the producer. " (3.) Where the Commissioner has applied the provisions of this section in relation to a wool deduction certificate, section ten of this Act shall not apply in relation to that certificate, but the Commissioner shall take such action as he considers necessary to ensure that so much of the amount of the certificate as has not been credited under this section is dealt with as if this section had not been so applied.". {:#subdebate-25-1} #### Clause 12 (Appeals) Amendment (by **Mr. Fadden)** agreed to- >That, after sub-clause (2.), the following sub-clause be added: - " (3.) Where a producer has made an application in writing to the Commissioner requesting him to apply the last preceding section to the producer, and the Commissioner has not, within thirty days after receipt by him of the application, notified the producer of his decision on the application, the producer may appeal under this section as if the Commissioner had refused the application, and the appeal may be dealt with accordingly.". Clause, as amended, agreed to. Clauses 13 to 15 agreed to. Clause 16 (Obligations of producers). Amendment (by **Mr. Fadden)** proposed - >That, at the end of the clause, the following sub-clause be added : - " (6.) Where the proportion of the sale value or appraised value of wool for a financial year for the purposes of the Wool Sales Deduction Act (No. 1) 1950 or the Wool Sales Deduction Act (No. 2) 1950 is fixed after the commencement of that financial year, and is greater than the proportion fixed for the immediately preceding financial year, the time within which a producer who thereupon becomes liable to pay an additional amount to the Commissioner in relation to wool previously sold, disposed of or exported is required to pay that amount to the Commissioner is one month after the day on which the Act fixing the proportion for that financial year receives the Royal Assent.". {: #subdebate-25-1-s0 .speaker-KYC} ##### Mr POLLARD:
Lalor .- The committee is entitled to some information upon the proposed sub-clause. Under it and under the proposed new clause 10a, which the Treasurer **(Mr. Fadden)** later will ask the committee to insert in the bill it appears that, in certain circumstances and in certain years, the Treasurer will have the right to increase or decrease the rate of tax. {: #subdebate-25-1-s1 .speaker-F4T} ##### Mr FADDEN:
Treasurer · McPherson · CP -- The object of this amendment is to meet the converse of the circumstances which the proposed new clause 10a is designed to meet. "When the rate of wool sales deduction is not fixed until some time after the commencement of the year and the rate then fixed is higher than the rate for the previous year, some producers will have paid the deduction at a rate lower than the rate applicable for that year. Therefore, they will be required to pay an additional amount. The object of the amendment is to allow them one month from the day on which the measure fixing the new rate receives the Royal assent in which to pay that additional sum. Sub-clause (1.) of the proposed new clause 10a is designed to meet the circumstances in which the rate has been reduced and wool-growers have already paid the deduction at the higher rate. {: .speaker-KYC} ##### Mr Pollard: -- It is apparently the intention of the Government to vary the rate, if it considers it to be appropriate to do so. {: .speaker-F4T} ##### Mr FADDEN: -- Only to reduce it. {: .speaker-KYC} ##### Mr Pollard: -- The proposed new subclause envisages the rate being increased. {: .speaker-F4T} ##### Mr FADDEN: -- The rate might be reduced in one year, and restored to the original level in the following year. {: #subdebate-25-1-s2 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- Sub-clause (1.) provides that if a woolgrower does not do certain things, he shall be liable to a fine not exceeding the amount payable to the Commissioner. That is a 100 per cent, penalty, which is imposed normally only for grave breaches of the taxation laws. I think the committee is entitled to be told why that provision has been included in the bill. {: .speaker-F4T} ##### Mr Fadden: -- I cannot agree to an amendment of the provisions of the clause relating to penalties. {: #subdebate-25-1-s3 .speaker-JF7} ##### Mr BEAZLEY:
Fremantle .- Can the Treasurer say whether other taxation laws provide for the imposition of a fine not exceeding the amount payable to the Commissioner? {: .speaker-F4T} ##### Mr Fadden: -- I cannot answer that question offhand, but I could supply to the honorable gentleman later the information for which he has asked. {: #subdebate-25-1-s4 .speaker-L19} ##### Mr LESLIE:
Moore .- I ask the Treasurer to make it clear that, under this clause, it will not be possible at any time to increase the rate beyond 20 per cent. {: #subdebate-25-1-s5 .speaker-F4T} ##### Mr FADDEN:
Treasurer · McPherson · CP -- I give that assurance. The committee has already agreed to a clause which provides that the amount to be deducted shall not exceed the prescribed amount. The prescribed amount for this year is 20 per cent. The rates measure provides that the rate shall be reenacted each year and that it shall not be greater than the existing rate. {: #subdebate-25-1-s6 .speaker-KEE} ##### Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP -- Sub-clause (3.) reads as follows : - >A person who is liable to make a payment to the Commonwealth under the Wool Sales Deduction Act (No. 2) 1950 in relation to wool exported before the twentieth day of October, One thousand nine hundred and fifty, shall, within fourteen days after that date, furnish to lie Commissioner a return in a form authorized by the Commissioner in respect of the wool and the circumstances of the export. > >Penalty: One hundred pounds. The clause is not very clear. It would not be possible for a wool-grower to furnish a return to the Commissioner within fourteen days after the 20th October, because that date has already passed. {: .speaker-F4T} ##### Mr Fadden: -- Clause 2 (2.) deals with that matter. It reads as follows : - >Nothing in this Act renders a person liable to be prosecuted in respect of anything done or omitted by him before the date on which this Act receives the Royal Assent. {: #subdebate-25-1-s7 .speaker-JTF} ##### Mr TOM BURKE:
Perth .- I do not want to delay the passage of this measure unduly, because I understand that there is a reason why it should be passed to-night, but I think that this clause requires more explanation. I have already referred to. a sub-clause in which provision is made for the imposition of a 100 per cent, penalty for failure to make returns. The honorable member for Chisholm **(Mr. Kent Hughes)** has directed attention to another sub-clause which provides for the imposition of a fine of £100 for failure to render a return within fourteen days of a certain date. That sub-clause also requires a great deal of explanation. If not explained here, it certainly will have to be explained in the country. A penalty of £100 seems to be a savage penalty. The Treasurer **(Mr. Fadden)** by having failed to answer the points that I have raised, has left both the committee and the country without a complete explanation of the measure. The wool-growers want an answer from the Treasurer, and so does the Parliament. I believe that we are entitled to an explanation. Subclause (4.) of clause 16 contains the same provision. It states - >A person to whom the last preceding subsection applies shall pay to the Commissioner the amount of his liability on the fourteenth day of the month next succeeding the month in which the Commissioner notifies him of the appraised value of the wool, or within such further time as the Commissioner allows. I agree that any one who deliberately evades the responsibility that this measure will place upon him must face the full rigour of the law, but it is not fair to provide a 100 per cent, penalty for an evasion that is not deliberate. Sub-clause (5.) provides for the same procedure and the same penalty. {: .speaker-F4T} ##### Mr Fadden: -- Clause 18 explains the penalty. {: .speaker-JTF} ##### Mr TOM BURKE: -- If clause 18 clarifies the penalty provision, and contains the information that I require, then I shall not further debate the matter. Amendment agreed to. {: #subdebate-25-1-s8 .speaker-KEE} ##### Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP -- I may be dense, but I am unable to ascertain from sub-clause (3.) what is the date referred to therein in relation to which a penalty of £100 is provided. {: .speaker-F4T} ##### Mr Fadden: -- Clause 18 empowers the Commissioner, for reasons that he may consider sufficient, to remit the penalty or any part thereof. {: .speaker-KEE} ##### Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP -- It does not explain the date. {: #subdebate-25-1-s9 .speaker-JF7} ##### Mr BEAZLEY:
Fremantle .- It is still necessary to direct the public's attention to the discriminatory nature of this clause. The Treasurer **(Mr. Fadden)** could not answer me offhand when I asked him about the amount of penalty imposed for late payment of ordinary income tax. I can tell him offhand that the penalty in relation to a late payment of tax in ordinary cases is 10 per cent, of the tax payable. The penalty provided by subclause (5.) could be as high as 100 per cent. I see no justification for such discrimination in a taxation proposal. **Mr. Fadden.** - The point raised by the honorable member for Chisholm **(Mr. Kent Hughes)** is covered by clause 21. Clause, as amended, agreed to. Clauses 17 to 20 agreed to. Clause 21 (Times expiring before, or within seven days after, Royal assent to act). {: #subdebate-25-1-s10 .speaker-KEE} ##### Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP -- This clause, which purports to explain the date that is referred to in clause 16, should be redrafted because it does not explain the date at all, but seems to be all mixed up with the 20th October, the date mentioned in clause 16. It states as follows : - {: type="1" start="21"} 0. -- (1.) Where the time within which a person is required to make a payment or do any other act . . . That does not explain the date. It continues - {: type="i" start="1"} 0. or within seven days after that day, and that person has not done that act before that day, that person shall do that act on or before the seventh day after that day. "Why cannot the clause state that where a person does not do the act within fourteen days he will be liable to a fine? I am confused in regard to the date mentioned in clause 16, and it seems to me that there has been some fault in the drafting of the bill. I am not querying the principle of the measure. I merely want to know what date is referred to in the following words : - Where the time within which a person is required to make a payment or do any other act under a provision of this act expires on or before the day on which this act receives the Royal Assent, or within seven days after that day, and that person has not done that act before that date, that person shall do that act on or before the seventh day after that day. I presume that " that day ", in this case, is intended to mean the day on which the act receives the Royal Assent. I assure the Treasurer **(Mr. Fadden)** that I am not raising this point in a spirit of levity, although it would seem to he amusing to some honorable members. All that I am trying to find out is what day is referred to in clause 16 and in this clause. Does this clause mean that a person will be fined if he does not do the act within fourteen days of the date on which he is supposed to do it? "What is the date on which the person is supposed to do that act, and is the fine to be imposed after neglect to do the act within fourteen days of that date? If that is so, why does not the bill say so plainly ? {: #subdebate-25-1-s11 .speaker-KVT} ##### Mr THOMPSON:
Port Adelaide -- Clause 7 is quite clear about the date; it fixes the time at which payment shall be made to the Commissioner. It states that the amounts shall be paid - not later than the seventh day of the month next succeeding the month in which he becomes so liable. I cannot see the need for all this argument. Clause agreed to. Clause 22 (Application of certain provisions of the Income Tax Assessment Act 1936-1949). {: #subdebate-25-1-s12 .speaker-JTF} ##### Mr TOM BURKE:
PERTH, WESTERN AUSTRALIA · ALP .- This may be an appropriate time to raise a query that refers to the Income Tax Assessment Act 1936-1949. What I want to know from the Treasurer **(Mr. Fadden)** is whether the 20 per cent, deduction to be made from the woolgrower's return is to be calculated on the gross amount of his return, including the amount that he has had to pay in commission to the wool broker. {: .speaker-F4T} ##### Mr Fadden: -- It is to be taken from the gross proceeds. {: .speaker-JTF} ##### Mr TOM BURKE: -- Am I to understand that the grower is to pay his commission to the broker, which in these days will be a fairly heavy commission, and that the 20 per cent, deduction provided by the measure is to be assessed on his gross return for his wool, including the amount that the broker has retained as commission? {: .speaker-F4T} ##### Mr Fadden: -- The commission that the grower pay3 to the broker will be an allowable deduction in the assessment of his taxable income. {: .speaker-JTF} ##### Mr TOM BURKE: -- I know that the commission paid would be shown in the grower's income tax return as a normal trading expense, but if the Treasurer's statement to me is correct the grower will have to pay to the Commissioner 20 per cent, of not only the net amount that he receives for the sale of his wool, but also the money that has been retained by the broker as commission, although the grower himself will not have handled that money. {: .speaker-F4T} ##### Mr Fadden: -- The same principle applies to freight. {: .speaker-JTF} ##### Mr TOM BURKE: -- I consider that the Treasurer might well examine the matter that I have raised before the bill i3 considered by the Senate, because it seems to be a case of gross inequity that the broker will retain his full commission but the grower will have to pay 20 per cent, on the gross proceeds of his wool before that commission has been paid to the broker. The grower is being hit and the broker is being left untouched. The Government will have to answer for such a grave inequity. {: #subdebate-25-1-s13 .speaker-F4T} ##### Mr FADDEN:
Treasurer · Mcpherson · CP -- The clauses that the committee has already passed provide in clear language that the 20 per cent, deduction shall be assessed on the purchase price of the wool. Deductions for brokerage and rail freight are not to be taken into account. The aim of the scheme is to get 20 per cent, of the gross proceeds of the sale of the wool. {: #subdebate-25-1-s14 .speaker-KYC} ##### Mr POLLARD:
Lalor .- Apparently if a wool-grower sells a bale of wool for £100 he will be taxed 20 per cent., and, in addition, he will have to pay 7£ per cent, as a stabilization levy, brokerage, storage, rail freight and other charges. {: #subdebate-25-1-s15 .speaker-KWP} ##### Mr TURNBULL:
Mallee .- I point out that both the honorable member for Perth **(Mr. Tom Burke)** and the honorable member for Lalor **(Mr. Pollard)** have made remarks that are not in accordance with facts. {: .speaker-KYC} ##### Mr Pollard: -- I take strong objection to that remark. {: .speaker-KWP} ##### Mr TURNBULL: -- The honorable member for Perth has stated that the tax will be calculated on the gross proceeds. When the woolgrower's income tax is assessed the certificate for the total amount of his deductions will be tendered, and he may then have to pay more. At the time when this money is collected the payment will be, not a tax but a deduction, which will be held until the woolgrower is asked to pay income tax. If the amount of income tax assessed is less than the amount of the deduction, the Taxation branch will refund the difference to him. Clause agreed to. Clauses 23 to 26 agreed to. New clause 10a. Motion (by **Mr. Fadden)** proposed - >That the following new clause be inserted: - "10a. - (1.) Where the proportion of the sale value or appraised value of wool for a financial year for the purposes of the Wool Sales Deduction Act (No. 1) 1950 and the Wool Sales Deduction Act (No. 2) 1950 is fixed after the commencement of that financial year, and is less than the proportion fixed for the immediately preceding financial year, the Commissioner shall - > >refund to a producer so much of the amount previously paid by him. under those Acts in relation to wool sold, disposed of or exported in that financial year as exceeds the amount which would have been payable in relation to that wool if the proportion fixed for that financial year had been fixed before the commencement of that financial year: or (ft) where a producer delivers to the Commissioner a wool deduction certificate in relation to wool sold or disposed of in that financial year pay to the producer an amount equal to the amount by which the amount of the certificate exceeds the amount which would have been the amount of the certificate if the proportion fixed for that financial year had been fixed before the commencement of that financial year. " (2.) Where the proportion of the sale value of wool for a financial year for the purposes of theWool Sales Deduction Act (No. 1) 1950 and the Wool Sales Deduction Act (No. 2) 1950 is not fixed before the end of that financial year, the Commissioner shall - > >refund to a producer the amount paid by him under those Acts in relation to wool sold, disposed of or exported in that financial year; or > >where a producer delivers to the Commissioner a wool deduction certificate in relation to wool soldor disposed of in that financial year pay to the producer an amount, equal to the amount of the certificate. "' (3.) Where the Commissioner has applied the provisions of this section in relation toa wool deduction certificate, the last preceding section shall not apply in relation to that certificate, but the Commissioner shall take such action as he considers necessary to ensure that so much (if any) of the amount of the certificate as has not been paid under this section is dealt with as if this section had not been so applied.". {: #subdebate-25-1-s16 .speaker-KYC} ##### Mr POLLARD:
Lalor .- Although the Treasurer **(Mr. Fadden)** has not explained the provision clearly, it appears to me that the clause empowers the Commissioner to reduce the rate of deduction. {: .speaker-F4T} ##### Mr Fadden: -- The Parliament will be so empowered. New clause agreed to. Title agreed' to. Bill reported with amendments; report *- by leave* - adopted. Bill - *by leave* - read a third time. {: .page-start } page 2636 {:#debate-26} ### WOOL SALES DEDUCTION BILLS (Nos. 1 and 2) 1950. *In Committee of Ways and Means:* Consideration resumed from the 12th October *(vide* page 797)., on motion by **Mr. Fadden** - >Thata producer be liable to pay to the Commonwealth an amount equal to onefifth of the sale value of wool . . . *(vide* page 796). Motion - *by leave* - withdrawn. Motion (by **Mr. Fadden)** agreed to - >That a producer of wool who, on or after the twentyeighth day of August, One thousand' nine hundred and fifty, has sold or otherwise disposed of, or sells or otherwise disposes of, that wool, otherwise than for delivery by him out of Australia, be liable to pay to the Commonwealth a proportion of the sale value of that wool, being such proportion as is fixed by the Parliament for the financial year in which the wool was or is so sold or disposed of. > >That a producer of wool who, on or after the twentyeighth day of August, One thousand nine hundred and fifty, has exported or exports that wool be liable to pay to the Commonwealth a proportion of the appraised value of that wool, being such proportion as is fixed by the Parliament for the financial year in which the wool is exported. > >That the proportion of the sale value and of the appraised value for the financial year which commenced on the first day of July, One thousand nine hundred and fifty, be onefifth.. > >That the last preceding paragraph be subject to the provisions contained in the Wool Sales Seduction (Administration) Bill 1950 for refunds where - > >the proportion of the sale value and of the appraised value fixed for a financial year is fixed after the commencement of that financial year and is less than the proportion fixed for the immediately preceding financial year; or > >no proportion of the sale value and of the appraised value is fixed for a financial year before the end of that financial year. > >That the foregoing paragraphs do not apply- > >to a producer whose income is exempt from income tax under the provisions of the Income Tax Assessment Act 1936-1949; or > >in relation to wool produced in the Northern Territory of Australia. > >That expressions used in this resolution have the same meanings as they have in the Wool Sales Deduction (Administration) Bill 1950. > >That the Acts passed to give effect to this resolution be expressed to continue in force until a date to be fixed by Proclamation but not in any event after the Wool Sales Deduction (Administration) Act 1950 ceases to be in force. Resolution reported. Standing Orders suspended; resolution adopted. *Ordered -* >That **Mr. Fadden** and **Mr. McBride** do prepare and bring in bills to carry out the foregoing resolution. {: .page-start } page 2637 {:#debate-27} ### WOOL SALES DEDUCTION BILL (No. 1) 1950 Bill presented by **Mr. Fadden.** and passed through all its stages without amendment or debate. {: .page-start } page 2637 {:#debate-28} ### WOOL SALES DEDUCTION BILL (No. 2) 1950 Bill presented by **Mr. Fadden,** and passed through all its stages without amendment or debate. {: .page-start } page 2637 {:#debate-29} ### STATES GRANTS BILL 1950 Assent reported. Motion (by **Mr. Fadden)** proposed - >That the House do now adjourn. {: #debate-29-s0 .speaker-A48} ##### Mr CHIFLEY:
Leader of the Opposition · Macquarie -- I take advantage of this opportunity to bring to the attention of the House and the Government what appears to have been a prearranged question that was asked yesterday by the honorable member for Corio **(Mr. Opperman)** and was answered by the Minister for Supply **(Mr. Beale).** That answer to that question cast a reflection on the honesty and integrity of **Mr. J.** J. Dedman, a former Minister of the Crown, a former member of this Parliament, and a present member of the Labour movement. The impression left by the question and the answer was that the question was what is popularly known as a "Dorothy Dix", which is a question, the terms of which have already been communicated to the Minister so that the Minister can prepare an answer to it. I consider that the prepared answer to this question was calculated to damage the personal reputation of **Mr. Dedman.** Indeed, it cast a grave reflection on his honesty and integrity by indicating that **Mr. Dedman** had used a Commonwealth car for his own private or political purposes. That statement is, according to my information, completely slanderous misrepresentation. I took the opportunity of getting in touch with **Mr. Dedman,** and I received a spontaneous telegram from the secretary of the Australian Council of Trades Unions, **Mr. Broadby. Mr. Broadby** said in that message - >I strongly resent attacks made on Dedman yesterday by Beale. The representative of the central committee of the C.R.T.S. requested Dedman last January after consultation with Melbourne Trades Hall Council to cover Geelong area as accredited trade union representative in company with department's assessing officers. I informed Director Reestablishment Division of my wishes who raised no objection. In view of hundred per cent cooperation in administration of C.R.T.S. we feel that Beale's statement should be at oner challenged. We demand that we retain right to delegate supervision of trainees to representatives of our own choice. I personally took the opportunity of asking **Mr. Dedman** whether there was any truth at all in the suggestion that he had used a Commonwealth car for his own private or political purposes. **Mr. Dedman** informed me that he had never at any time used a Commonwealth car for his own private or political purposes except when he was a member of this Parliament, but that he had travelled in one as a representative of the Australian Council of Trades Unions. The assessing officer of the relevant department, presumably the Repatriation Department or the Department of Labour and National Service, received instructions from other officers in Geelong to the effect that **Mr. Dedman** could accompany him to that city in a Commonwealth car. **Mr. Dedman** did travel with a Commonwealth officer as a representative of the Australian Council of Trades Unions, and was approved by the department concerned as a representative of the Australian Council of Trades Unions. The government car was being used by an officer associated with the reconstruction training, scheme in the perf ormance of his routine duties. Here is **Mr. Dedman's** own statement on the incident - >I have accompanied these assessors when they visited the Geelong area, and naturally travelled with them in a Commonwealth car. At no time did I travel on my own in a Commonwealth car, and politics were never mentioned while I was visiting the trainees. No member of this House, who is personally acquainted with **Mr. Dedman,** would question his honesty and integrity. The question asked in the House on this subject, and the answer that was given to it, represented an attempt to damage **Mr. Dedman's** reputation, politically and personally. **Mr. Broadby** spoke to the honorable member for Bendigo **(Mr. Clarey)** during the day, and pointed out that if the representative of the Australian Council of Trades Unions, who was cooperating with the Government in the reconstruction training scheme, was to be subjected to slander for political purposes, the government could not expect much co-operation in the future. If **Mr. Dedman** is to be denied the right to travel in a Commonwealth car, in the company of departmental officers, while he is engaged on work connected with the reconstruction training scheme, then other union officers must be denied that right also. It is clear that **Mr. Dedman** did not use the car for his own purposes, but travelled in it only when he was representing the Australian Council of Trades Unions on work associated with the reconstruction training scheme. {: #debate-29-s1 .speaker-009MC} ##### Mr HOLT:
Minister for Labour and National Service and Minister for Immigration · Higgins · LP -- I take this opportunity to comment on a decision announced earlier to-day regarding those Australians who have gone to Poland to attend a so-called peace congress. On the 31st August, the Australian Government announced the decision that henceforth passports issued by it to Australian citizens would exclude certain countries from travel unless prior permission had been obtained. Simultaneously, Australian representatives abroad were notified to write similar restrictions into any passports, previously issued, which might come under their notice. The countries excluded are all considered to be under Communist control. It was announced at the time that this decision would be reviewed at the end of twelve months, in the light of the then existing international situation. As I have said many times, this Government regards the right to travel freely as one of the most important privileges enjoyed by any citizen, and the decision imposing these restrictions was not taken lightly. It was a carefully considered decision, reached after consultation with security authorities here and elsewhere, and upon the recommendation of our own security service. It was made quite clear that if an applicant for a passport had a legitimate reason for visiting any of the excluded countries and he was not regarded as a security risk, the question of whether or not his passport should be endorsed accordingly would receive consideration on the merits of the case. We Australians cannot regard ourselves as living in a normal period of peace, when Australian troops are fighting and dying in Korea, and when the democratic world is strengthening itself to resist the menace of aggressive Communist imperialism. It is against this background that the issue raised by Australians who have proceeded to Poland for the so-called peace congress, must be viewed. No one with a knowledge of recent history should entertain any illusions as to the nature and purpose of this congress. It fits with earlier and similarly spurious conferences into the pattern of a predetermined Communist programme. It is not merely a vehicle for Communist propaganda. There can be no doubt that it will, at the same time, provide a convenient opportunity for treacherous conspiracy and covert planning. It is designed to embarrass and weaken those democratic countries with which Australia's vital interests are linked. At the time when most of the delegates applied for their passports, the restrictions to be written into the passport were known, as also were the reasons for this restriction. Now, without even going through the formality of seeking permission to travel to one of the excluded countries, and with the knowledge that their action was contrary to the policy of their own Government, a number of delegates have chosen to ignore the limitation and to defy their Government. No Go'vernment with a shred of responsibility could disregard this impudent refusal to observe the prescribed conditions. The powers available to us in the circumstances are limited, but one power we do possess, and that is the authority to cancel the passport of any offender. Our passport *is* an official travel document that is issued under the authority of the Government of the Commonwealth and is signed by the GovernorGeneral. It requests in the name of the King those whom it may concern " to allow the bearer to pass freely without let or hindrance, and to afford him every assistance and protection of which he may stand in need ". We feel under no obligation to continue this request and to maintain this privilege for those delegates who have proceeded to Poland and apparently imagine they can defy their Government with impunity. Indeed, we have a duty in the interest of national security generally to see that our policy shall be respected. I have accordingly instructed that the passport of any person travelling without prior permission to the congress at Poland is to be deemed to have been cancelled. My department has notified our representa tives abroad, and international transport authorities to this effect. {: #debate-29-s2 .speaker-JUP} ##### Mr CLAREY:
Bendigo .- I wish to associate myself with the remarks of the Leader of the Opposition **(Mr. Chifley)** regarding the answer given yesterday by the Minister for Supply **(Mr. Beale)** to a question asked by the honorable member for Corio **(Mr. Opperman).** I was in the chamber when the honorable member for Corio asked his question. In effect, he asked whether the Minister was aware that an ex-member of the Parliament had been using government cars for political purposes. Obviously, he implied that he had made inquiries into the matter and was satisfied that the gentleman he had in mind had used government cars for political purposes. The Minister, when replying, gave the impression that he had investigated the matter and had found that the implication contained in the honorable member's question was correct. The Minister also publicly expressed hiE disapproval of **Mr. Dedman's** alleged action in a manner that 'belittled that gentleman's reputation as an ex-member of the Parliament. In view of the facts that the Australian Council of Trades Unions has placed before me, I strongly protest against the question that the honorable member for Corio asked and also against the reply that the Minister gave to it. I shall give those facts to the House. At no time has **Mr. Dedman** been in a government car in the Geelong area, or in the Corio electorate, except in order to carry out duties that the trade union movement appointed him to carry out in accordance with the Commonwealth reconstruction training scheme. In order to succeed, that scheme requires the cooperation of both employers, and employees, and the Australian Council of Trades Unions throughout Australia has given it 100 per cent, support. In doing so, however, it has found it necessary to appoint persons to carry out certain functions that are prescribed under the act under which the scheme is being implemented. I indicate how strongly the Australian Council of Trades Unions feels on this matter by pointing out that a large number of trade unionists, without fee or reward, have given a great deal of their time solely in order to promote this worthy scheme. When I was president of the Australian Council of Trades Unions I spent days attending conferences at which details of the scheme were hammered out. Under that scheme, **Mr. Broadby,** the secretary of the Australian Council of Trades Unions, was appointed to accompany assessors when they were engaged in assessing the progress that had been made by trainees. Obviously, the secretary of the Australian Council of Trades Unions is not able to devote the whole of his time to that important work. Consequently, with the concurrence of the Melbourne Trades Hall Council, **Mr. Dedman** was appointed as an associate regional officer to act on behalf of **Mr. Broadby** from time to time. In that capacity, **Mr. Dedman** is obliged to accompany assessors when they are assessing the degree of progress that has been made by trainees. The practice is that when the assessor goes to an establishment at which a trainee is employed to make an assessment of the trainee's progress, he is accompanied by a representative of the trade union movement in order, on behalf of the trade union movement as a whole, to ensure that the assessment shall be made correctly and that full opportunity shall be given to any trainee concerned to place his case clearly before the assessor. **Mr. Dedman,** who is an ex-member of the Parliament, and has had a great deal of experience in industrial matters, has been appointed to do that job and he has followed the practice of accompanying assessors in the circumstances that I have indicated. {: .speaker-KMD} ##### Mr Osborne: -- But only in the electorate in which he stood as a candidate for the Parliament. {: .speaker-JUP} ##### Mr CLAREY: -- If the Government intends to look at the matter from the stand-point that the honorable member who has interjected has implied, it will mean that rather than ensure that the Commonwealth reconstruction training scheme shall be properly administered, the Government will be more concerned about the political and industrial history of persons whom the trade union movement appoints to enable it to co-operate with it in this scheme. If that be so, the Australian Council of Trades Unions will naturally conclude that the Government no longer requires its co-operation. All that that body asks is that when it appoints a person to do a job of .the kind that I have indicated, the Government shall not spurn its co-operation because the person whom it appoints for that purpose is obliged to carry out his functions in an area that he previously represented in the Parliament. Apparently the Government does not regard such an individual as a fit and proper person to carry out those duties. The matter has arisen because **Mr. Dedman** has accompanied the assessor in a government car in an area in which he lives and which he represented in the Parliament. It is possible that when I am no longer a member of the Parliament, I shall be appointed to perform duties for the trade union movement in similar circumstances. If the Government takes that view, its attitude is *more* likely to lead to the breakdown rather than to the encouragement of the Commonwealth reconstruction training scheme. L sincerely hope that in view of the facts that I have presented, both the honorable member for Corio who asked the question and the Minister should, in fairness to the Australian Council of Trades Unions and to **Mr. Dedman,,** express regret for the part that they have played in this episode. *Friday, 17 November 1950* {: #debate-29-s3 .speaker-DB6} ##### Mr WENTWORTH:
Mackellar -- To-day, I received a circular issued by the Ministry of National Development which deals with major works that are being carried out under the authority of the Australian Government and the State governments. I refer to the following item that appears on page 10 of that document: - >New South Wales. - Branxton-Muswellbrook rail duplication - It is anticipated that this scheme, estimated to cost over £2,000,000 will be completed within five years. The duplication will facilitate the handling of additional traffic anticipated as a result of increased coal output from existing mines and those in course of development in this area. The period of five years, which I presume has been estimated by the State Government as this is a State work, is grossly excessive because this undertaking is necessary and urgent. The production of the existing mines at Muswellbrook is reduced from time to time owing to the lack of rail facilities. In fact, new mines that are being opened up south of Muswellbrook are arranging to send coal 26 miles by road. This will add to the cost of that coal and, at the same time, will destroy the road, which is not built to carry heavy traffic. This area is capable of considerably increasing its present coal production. Until this line has been duplicated, that capacity cannot be fully utilized. There is a great waste of rolling-stock because of the delays that occur on the single line. That waste would be eliminated if the line were duplicated. Some of the work of duplicating the line has already been done. There are no major engineering projects involved. The only big bridge is the one across the Hunter River, which already provides for a double track. It is true that a short deviation of 6 miles has to be made between Glennie's Creek and Singleton, but that is not a major work. To show just how fantastic the estimate of five years is, I point out that in the ten years between 1875 and 1884, 1,215 miles of new railway line was built in New South "Wales. That is approximately 121 miles a year, and there were no bulldozers, compressors or mechanical drills in those days, yet, with all the equipment now available, it is estimated that five years will be required to complete the urgent job of duplicating 45 miles of line. I looked up the records of the building of the original line from Branxton to Muswellbrook. It was built between 1863 and 1869 - a period of six years. I do not know whether the work was continuous throughout that period, but the official railway guide of 1879 referred to the comparatively slow progress that was being made. Thus, nearly 100 years ago, the people of this country were ashamed of having taken six years to build that pioneering line. {: .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP -- How many men worked on it? {: .speaker-DB6} ##### Mr WENTWORTH: -- I do not know, but if more men are needed to carry out the duplication, they should be employed. It is incredible that it will take five years to duplicate this bottleneck line which is so reducing coal production. I believe that the State Government is deliberately delaying the work because it does not want the open-cut coal-fields to be developed. It is a major scandal. {: #debate-29-s4 .speaker-KYC} ##### Mr POLLARD:
Lalor .I wish to say something about the question that was asked to-day by the honorable member for Corio **(Mr. Opperman)** about the alleged use by **Mr. Dedman** of a Commonwealth car. I remind honorable members that **Mr. Dedman** had a splendid record in World War I. .He attained the rank of captain in the British Army while he was very young. Subsequently, he came to this country, to which, in the intervening years, he has rendered splendid service. He was primarily responsible for the conception and the implementation of the post-war reconstruction plan, which is the finest of its kind in the world. Under that scheme, doctors, lawyers, architects, engineers and tradesmen of all kinds who were unable to undergo or complete their training because of the war, were given an opportunity to do so upon their return, and are now serving this country in their various vocations. Further, **Mr. Dedman** was largely the author and the planner of Labour's full employment scheme, and so has made a name for himself in the history of this Commonwealth. That, in itself, of course, would not entitle him to use a Commonwealth car without authority, or even to travel in one, but, at least it shows the wisdom of **Mr. Broadby,** who is the trade union regional officer, in requesting that **Mr. Dedman** should act as his deputy in the work of assessing the capacity of trainees. It is most unfair that anybody, for party political purposes, should endeavour to blacken the reputation, integrity and honesty of a man of **Mr. Dedman's** standing. The suggestion- is, of course, that **Mr. Dedman** used his visits to training centres to advance his own party political ends. I assure the honorable member for Corio that **Mr. Dedman** does not need to advance his claims by means such as that. He will re-enter this House because of the failure of the present Government to carry out its promises to reduce taxation, to put value back into the £1, and to free the people of Australia from their bondage. {: #debate-29-s5 .speaker-KCS} ##### Mr DRUMMOND:
New England -- I regret that it is necessary for me to speak at this late hour, and I shall be brief. I wish to amplify the remarks that have been made by the honorable member for Mackellar **(Mr. Wentworth)** about the duplication of the Branxton to Muswellbrook railway line. I have before me a document prepared by the Minister for National Development **(Mr. Casey)** showing the developmental works that are to be carried out by the various States at an estimated total cost exceeding £500,000 each. When one studies this document, one is appalled at the complete failure of the Government of New South Wales to face up to the practical implications of a policy of decentralization. As the honorable member for Mackellar said, the duplication of the line from Branxton to Muswellbrook is to take five years. The estimated cost of the work is £2,000,000. Yet, the electrification of the line from Sydney to Lithgow, the estimated cost of which is £7,000,000 is scheduled for completion by 1954 ! The significance of those figures is this: The line from Branxton to Muswellbrook not only touches the coal-fields to which the honorable member for Mackellar has referred, but also is a part of the link between Maryvale and Sandy Hollow, better known as the Dubbo to Newcastle line. Already £2,300,000 has been expended on that line. Within the last few days the New South Wales Minister for Railways or his officers informed a deputation that it was impossible to get sufficient material and staff to complete that line. That is a howling disgrace to the State of New South Wales. The deputation asked that a small section of the line be completed to facilitate the tapping of the open-cut coal deposits at Wollar. Actually, that railway line should be completed in the interests of economy and of efficient working. I am able to state from personal knowledge, because I was a member of the Public Works Committee of the Parliament of New South Wales which reported upon the matter, that the grade of the line from Dubbo to Newcastle, which incor porates the Branxton to Muswellbrook duplication, is 1 in 50 each way. The route crosses the Dividing Range at the lowest point, and the grade can be made 1 in 70 without much additional expense. The grade of the railway line over the Blue Mountains is 1 in 30 both ways. For the purpose of centralization, the State Government is pursuing a policy of dragging goods up and down that terrific grade rather than building a line that would save rolling-stock and coal, open the coal deposits on both the Wollar and the Muswellbrook side, and foster decentralization. I note that, according to this document, it is proposed to provide eleven power stations in Queensland. Only one of them is not under construction. Eight power stations will be provided for New South Wales. Three of them are not under construction, but not one power station will be built north of Newcastle in that magnificent area, which contributed £125,000,000 - actually more than South Australia contributed - to the wealth of Australia last year. That area is " crying out " for development. I do not know whether the Commonwealth has power to influence such matters, but I hope that wiser counsels will prevail, or that a wiser Government will take office in New South Wales, so that its resources will be developed and the population of the State will be distributed more effectively than is possible under this mad-headed, wrong and entirely ill-balanced proposal in the national development scheme. {: #debate-29-s6 .speaker-KEN} ##### Mr FAIRHALL:
Paterson -- I support the remarks of the honorable member for Mackellar **(Mr. Wentworth),** with which must necessarily be associated those of the honorable member for New England **(Mr. Drummond).** It is true that, if it will take five years to duplicate the BranxtonMuswellbrook railway line, some authority is insufficiently seised of the need for greater coal production in this country, and that must necessarily be the Government of New South Wales. I do not propose to impute motives, but I believe that, in view of the tragic shortage of coal and of the tremendous potential of the open-cut. coal deposits between .Singleton and Muswellbrook, action must be taken by the Commonwealth to bring home to the State Government the need to carry out that work with greater speed. *[Quorum formed.]* The tragic fact is. that, although 2;500 tons of coal could be produced daily from the Muswellbrook open cut coal deposit by the present staff with the existing equipment, not more than 2,000 tons is being shifted. In other words, 500 tons of coal is lost daily, due primarily to the lack of suitable rolling-stock. But if that railway line were duplicated, the quicker turn-round of coal trucks would remove the limitation that is now imposed by transport on the output of opencut coal at Muswellbrook. The duplication would provide a railway line without steep grades, on which lighter locomotives could pull heavier trains at higher speeds. In that way, the output of coal from the opencut mine would be increased tremendously, and a great contribution would be made thereby to Australia's coal production. Therefore, I support the remarks of the honorable member for Mackellar, and trust that the Commonwealth will bring all possible pressure to bear on the Government of New South Wales to make the manpower and materials available for the purpose of completing the duplication of the BranxtonMuBwellbrook railway line at a much earlier date than is now contemplated. {: #debate-29-s7 .speaker-F4T} ##### Mr FADDEN:
Treasurer · McPherson, · CP -- *in reply* - I have no knowledge of the circumstances to which the Leader of the Opposition **(Mr. Chifley),** the honorable member for Bendigo **(Mr. Clarey)** and the honorable member for Lalor **(Mr. Pollard)** have referred, but I promise to bring their remarks to the notice of the Prime Minister **(Mr. Menzies)** and the appropriate Minister. Question resolved in the affirmative. {: .page-start } page 2643 {:#debate-30} ### PAPERS The following papers were pre sented : - >Commonwealth Public Service Act- Appointments - Department - > >Attorney-General - I. B. Asman, H. R. F. Kaulla, L. J. Parker. > >Civil Aviation - K. S. Wylie. > >Works and Housing - B. Buffinton. > >Lands Acquisition Act- Land acquired for Postal purposes - > >Dungog, New South Wales. > >Koraleigh, New South Wales. > >Qantas Empire Airways Ltd. - Sixteenth > >Annual' Report and Financial Accounts for 1949. > >Beat of Government Acceptance Act and Seat of Government (Administration) Act- > >Ordinances - 1950 - > >No. 8 - Police. > >No. 9- Police Superannuation. > >No. 10 - Seat of Government (Administration ) . > >No. 11 - Canberra Community Hospital. > >No. 12- Meat > >Regulations - 1950 - No. 5 (Education Ordinance). ' > >House adjourned at 12.17 a.m. (Friday). {: .page-start } page 2643 {:#debate-31} ### ANSWERS TO QUESTIONS *The following answers to questions* *were circulated: -* Basic Wage. {: .page-start } page 2643 {:#debate-32} ### SUPERANNUATION {:#subdebate-32-0} #### Mainguard (Australia) Limited {: #subdebate-32-0-s0 .speaker-BV8} ##### Mr Calwell: l asked the Treasurer, upon *notice -* {: type="1" start="1"} 0. Has he been advised of the operations of a newly formed company in New South Wales known as " Mainguard " which *has* a stated capital of £5,000,000 ? 1. Is it a fact that this company consists of a group of "dummies" for overseas investors who, in the past few months, have transferred capital to this country in the hope of reaping advantage from the possible revaluation of the Australian £1T 2. Is it a fact that, in pursuance of this policy, the company has put out of existence an important section of the Australian newspaper industry with dire results to the staff of Smith's *Weekly T* 3. In the interests of Australian investors and the Australian public generally, will he give an assurance that he will make searching investigations into the activities of this company and, particularly, into its banking and other financial activities? 4. Will he furnish a reply at the earliest possible date! - **Mr.** Fadden. - The answers to the honorable member's questions are as follows . - 5. A company named "Mainguard (Australia) Limited" was incorporated on the 6th September, 1950, under the Companies Act (1936) of New South Wales and consent waif given to the issue of 4,000,000 ordinary shares of 5s. each. I understand the company baa filed copies of a prospectus relating to that issue with the appropriate authorities in the various States. 2 and 3. I have no information on these matters, other than lias appeared in the press. 6. I am not in possession of any information which would justify the giving of any such assurance. Industrial UNREST {: #subdebate-32-0-s1 .speaker-K6Q} ##### Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND · CP asked the Minister for Labour and National Service, *upon notice -* {: type="1" start="1"} 0. la it a fact that there was a general stoppage fay ironworkers in Sydney on the 25th October involving approximately 14,000 employees! 1. Is it a fact that there was- a general stoppage by some 20,000 members of the Amalgamated Engineering Union in Sydney on the 1st November? 2. Is it a fact that notice of the .proposed stoppage was given to the Deputy Industrial Registrar in. Sydney for transmission to the Chief Conciliation Commissioner, **Mr. G.** A. Mooney ? 3. Will be inform the House why the Chief Conciliation Commissioner has not seen fit to intervene and do something to prevent these stoppages which have caused such serious dislocation in industry in Sydney? {: #subdebate-32-0-s2 .speaker-009MC} ##### Mr Holt:
LP t. - The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. Yes 1. Yes. 2. Yes. 3. The Chief Conciliation Commissioner has statutory duties and discretions. The Government is confident that the Chief Conciliation Commissioner will do what is right and proper to be done under the act. I might add for the information of the honorable member that a notification of the stoppage affecting members of the Amalgamated Engineering Union came before Conciliation Commissioner Austin in Sydney on the 30th October. It is thus now within the jurisdiction of the conciliation commissioners.

Cite as: Australia, House of Representatives, Debates, 16 November 1950, viewed 22 October 2017, <http://historichansard.net/hofreps/1950/19501116_reps_19_210/>.

View PDF View XML View in Voyant