House of Representatives
31 October 1951

20th Parliament · 1st Session



Mr. Speaker (Hon. Archie Cameron) took the chair at 2.30 p.m.,- and read prayers.

page 1349

QUESTION

QUESTIONS

Mr. Mulcahy proceeding to ask a question,

Mr SPEAKER:

– Order! The honor? able gentleman must not refer to the activities . of any person in a question without notice. I cannot allow the honorable gentleman to proceed. The question must be placed on the notice-paper.

page 1349

QUESTION

AUSTRALIAN LABOUR PARTY INDUSTRIAL GROUPS. :

Mr PEARCE:
CAPRICORNIA, QUEENSLAND

– I ask the honorable member for Melbourne as the Deputy Leader of the Opposition, whether, ‘ in view of the actions of the South Australian conference of the Australian Labour party in dissociating the party from the industrial groups in that State and in debarring those groups from recognition as instruments of the party-

Mr SPEAKER:

– Order ! ‘ What is the object of the honorable member’s question ? He is permitted to question the honorable member for Melbourne only in relation to matters for which he is responsible as the Deputy Leader of the Opposition in this House.

Mr PEARCE:

– I am coming to that point, Mr. Speaker. In view of the actions to which I have referred, and the statements that were made during the referendum campaign by the honorable gentleman and the Leader of the Opposition, in which they both committed the Labour party to defending the position of communism-

Mr SPEAKER:

– Order ! What is the honorable gentleman’s question? He seems to be making a statement.

Mr PEARCE:

– Is the Labour party now dropping its last pretence of fighting communism by destroying its only effective instrument against communism?

Mr SPEAKER:

– Order 1 I am doubtful whether the question is in order, but, if the honorable member for Melbourne wishes to answer it, he may do so.

Mr CALWELL:
MELBOURNE, VICTORIA

– I share your doubt, Mr. Speaker.

Mr OSBORNE:
EVANS, NEW SOUTH WALES

– In the regrettable and unavoidable absence of the Lender of the Opposition, my question is addressed to the Deputy Leader of the Opposition. Is it true that the Leader of the Opposition has stated frequently in this chamber and elsewhere that efforts will be made by him and by the members of his party in this Parliament, in the course of their parliamentary duties, to support iri every way possible the legitimate activities elsewhere of Australian Labour party groups?

Mr SPEAKER:

– Order f I do not think that Australian Labour party groups come under the control of this Parliament.

Mr SPEAKER:

-Order! If honorable members do not maintain order, ] shall call on the orders of the day. As far as I know, Australian Labour party groups have nothing to do with this House.

Mr OSBORNE:

-My question relate* to statements that have been made in thi? House by the Leader of the Opposition. In view of those statements and of s decision made by the Australian Labour party in South Australia, will the Deputy Leader of the Opposition say whether the Leader of the Opposition wishes to be given an opportunity to make a statement about the intentions of hit party in this connexion?

Mr CALWELL:

– I give you, Mr. Speaker, and the House an assurance that Australian’ Labour party groups have nothing to do with this Parliament.

page 1350

QUESTION

COPPER

Mr CLAREY:
BENDIGO, VICTORIA

– In the absence of the Minister for Supply because of ill health, I ask the Vice-President of the Executive Council whether there is a serious shortage of copper in Australia. If so, is the shortage affecting the Government^ stockpiling policy? What steps is the Government taking- to overcome the shortage,’ and has? it made- any arrange-‘ ments to bring the Mount Isa copper mine back into production?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I shall have consideration given to the honorable member’s questions. A reply will be forwarded to him in due course.

page 1350

QUESTION

APPLES

Mr FALKINDER:
FRANKLIN, TASMANIA

– I ask the Minister representing the Minister acting for the Minister for Commerce and Agriculture whether the Government will give consideration to the continuance nf nome form of the Commonwealth guaranteed advance that operated in respect of the Tasmanian apple industry last season?

Mr SPEAKER:

– The question relates to a matter that should be raised in the Senate.

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– T shall obtain the information for which the honorable gentleman has asked and supply him with it.

page 1351

QUESTION

CIVIL AVIATION

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– Has the Minister for Civil Aviation had brought to his notice or has he otherwise observed that an organized agitation has been and still is in progress for the transfer of Trans-Australia Airlines to private interests? As the Government has had the future of Trans-Australia Airlines and its relationships with privately owned airlines under consideration for some time, and as there has been ample time for accountants to investigate the affairs of Trans-Australia Airlines and to furnish a report to the Government, will the Minister now relieve the natural anxiety of the public and employees of the organization by stating whether the Government intends to sell TransAustralia Airlines, to merge it with private airlines, or otherwise to alter its present status of a government-owned airline that is rendering good service to the people?

Mr ANTHONY:
CP

– An announcement of the Government’s policy in relation to Trans-Australia Airlines will be made in due course.

Mr FAILES:
LAWSON, NEW SOUTH WALES

– I ask the Minister for Civil Aviation to indicate whether the issue of licences for intrastate airline services lies with the Minister for Civil Aviation or with State authorities? I ask that question in view of a statement which has been attributed to the New South Wales Minister for Transport, that he had refused to issue a licence to Overland Airways Limited which would enable it to operate an air service from Narromine. That statement was broadcast by the Australian Broadcasting Commission.

Mr ANTHONY:

– The Department of Civil Aviation licences aircraft, but the licensing of a particular route is a function of State transport authorities. Therefore, until the New South Wales Minister for Transport issues the requisite licence the Department of Civil Aviation nan take no action under it.

page 1351

QUESTION

PRIMARY PRODUCTION

Mr EGGINS:
LYNE, NEW SOUTH WALES

– My question is directed to the Minister representing the

Minister acting for the Minister for Commerce and Agriculture. In view of the urgent need to increase the production of food as a part of our defence measures and also to meet the needs of our increasing population, will the Minister recommend to the Minister for Commerce and Agriculture, immediately upon his return to Australia, that a conference of representatives of primary producers and associated organizations be convened to discuss matters relating to the disposal of exports of primary products that have arisen as the result of conferences in London and the United States of America, and to formulate a plan for a primary production drive in Australia ?

Mr ANTHONY:
CP

– I welcome the.suggestion of the honorable member and 1 am confident that the Minister for Commerce and Agriculture will also welcome it when he returns from abroad, in, I expect, about ten days’ time. The Minister has been negotiating important deals with the United Kingdom and other countries in relation to the sale of Australian primary products, and I think that it will probably be necessary for him on his return to spend some time in informing, at first hand, the’ representatives of the particular industries involved of the results of the negotiations. I shall submit the honorable gentleman’s suggestion to the Minister as soon as he returns.

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I ask the Minister representing the Minister acting for the Minister for Commerce and Agriculture whether the pressure that the Government has applied in order to obtain increased prices for foodstuffs that are being sold to the United Kingdom has been accompanied by statements to the British Government that if such prices are not paid, the foodstuffs will not be sold to the United Kingdom? If that is a fact, is the Minister able to say how the rapid depletion of our sterling reserves will be checked if goods are not sent to the . United Kingdom ?

Mr ANTHONY:

– I do not think that the point that the honorable member has mentioned has been raised at all in the discussions that have taken place with the United Kingdom. The point that has been emphasized in such discussions has been that unless Australian producers of commodities that are required by the United Kingdom are paid at least their cost of production, those particular cornmodities will not be produced in sufficient quantities, because it is obvious that producers will not produce at a loss. It is that fact and not the point that the honorable member mentioned that has been emphasized in our discussions with the Government of the United Kingdom.

page 1352

QUESTION

POSTAL DEPARTMENT

Mr COSTA:
BANKS, NEW SOUTH WALES

– Is the PostmasterGeneral aware that the air-conditioning system of the chief telegraph office in Sydney is inferior, and that the air space for each person in that office is much less than that prescribed by the New South Wales Factories and Shops Act ? Does he know that the condition of the telegraph room at that office is condemned by health authorities because it is conducive to the contraction of tuberculosis and other contageous diseases ? Can he do anything to expedite the installation of new airconditioning equipment at the General Post Office, Sydney,’ and, if possible, have the work completed before midsummer of this year ?

Mr ANTHONY:
CP

– “We are speeding up the installation of air-conditioning plant in the various telephone and telegraph establishments to the degree that our resources enable us to do so. In many of the departments of the ‘telephone branch in which carrier wave systems are installed it is absolutely imperative that air-conditioning be installed. The requirements of the General Post Office, Sydney, in that respect have not been ignored.

page 1352

MANUS ISLAND

1 Mr. HAWORTH.- I direct to the Minister for Air a question- that is based on the fact that a month ago I drew the attention of the House to the attitude of the Chifley Government in relation to Manus Island, and the United States Government which had been refused the right to develop the island as a defence base in the South-West Pacific. I also drew attention to the subsequent action of the- Chifley- Government in allowing that base to fall into a state of rack and ruin. Will the Minister tell the House, in view of the statements that the United States Air Force is now using the base for a landing ground and that cordial relations exist between the United States Air Force and the Royal Australian Air Force, whether it is the intention of the Government to initiate discussions with the United States Government for the purpose of fully developing this important base?

Mr McMAHON:
Minister for Air · LOWE, NEW SOUTH WALES · LP

– We have begun negotiations with the United States Air Force to open up Momote airfield for use by aircraft from northern bases. I can. assure the honorable member, as I assured him a month ago, that the Government i.8 pushing this development programme as rapidly as possible in view of our other defence commitments in Australia and in the area surrounding the Admiralty Islands group. During the course of the last few days American airmen have landed at Momote airfield and have been given a wholesome and wholehearted welcome by the members of the Royal Australian Air Force who are stationed there. We have also agreed, within the course of the last few days, to establish direct aerial contacts between the United States Air Force and the Royal Australian Air Force. I can assure the honorable member that the Government is fully seised of the necessity to. develop the Admiralty group as a defence base, and is pushing ahead as rapidly as it possibly can do to develop both air and naval bases there. We shall do our utmost to encourage United States forces to use those bases.

page 1352

QUESTION

PUBLIC SERVICE

Mr E JAMES HARRISON:
BLAXLAND, NEW SOUTH WALES · ALP

– Does the Postmaster-General recall having said that the Postal Department has not dismissed experienced telephonists as a result of the Government’s policy to reduce the Public Service by 10,000 employees? If- so, does he still stand by that statement, or will he now inform the House of the number of telephonists who have been dismissed in New South Wales and of the amount of overtime that has since been worked by telephonists in the various telephone exchanges iri New South Wales from which telephonists have, been dismissed?. , t

Mr ANTHONY:
CP

– The conditions in respect of telephonists differ from State to State. In some States the department has all the officers it requires while in others it is still advertising for girls. I shall endeavour to obtain the information that the honorable member seeks.

page 1353

QUESTION

IMMIGRATION

Mr DOWNER:
ANGAS, SOUTH AUSTRALIA

– In view of the relatively small number of Dutchimmi grants who have entered Australia, is the Minister for Immigration satisfied that all possible steps have been taken to attract potential settlers from Holland? “From my knowledge of the European Dutch, gained both in Holland and while fellow prisoners of war, I believe that they could play a notable part in meeting the unsatisfied demand ‘ for rural labour. Is the Minister receiving complete co-operation from the Netherlands Government in this matter? If 30, will he consider the establishment of special information and recruiting bureaux in selected parts of Holland in an effort to double the inflow of these highly desirable people?

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

– I welcome the interest of the honorable member for Angus in this matter, but assure him that, so far from there being a relatively small flow of immigrants from the Netherlands their number has grown steadily over the last few years. During the year before last about 1,200 Dutch immigrants settled in Australia. About 10,000 arrived here last year and I think that more than 10,000 arrived during the first six months of this year. The Government has entered into an agreement with the Government of the Netherlands under which each government assists in the payment of fares. The selection of suitable settlers has been taking place under that scheme. The Australian Government, in’ the early stages of the scheme did endeavour to obtain a larger proportion of single immigrants and immigrants with few dependants because they constituted a smaller economic responsibility. In order to ensure that the rate of immigration of Dutch settlers is maintained I have recently given instructions that this requirement shall be liberalized.

Mr BERRY:
GRIFFITH, QUEENSLAND

– I address a question to the Minister for Immigration concerning the period of five years during which immigrants must reside in Australia before they can become naturalized. I point out that the Brisbane Fire Brigade has been obliged to reject applications for employment by a number of promising young Dutchmen because they have not been naturalized and cannot te naturalized until they have resided here for five years. Fire brigades must be regarded not only as essential services but also as extremely important units in the civil defence organization. Whilst I do not wish to see loopholes made in, the existing naturalization law, I ask whether the Minister will take steps to review the qualifying period now prescribed in respect of the naturalization of immigrants from friendly countries, who are found upon investigation to be of good character and to be worthy citizens, in order to have it reduced so that certain worthy persons may be permitted to undertake urgent work in this country.

Mr HOLT:

– I assume that the limit* ing factor at the moment on the Brisbane Fire Brigade is that it insists that only naturalized or native born British subjects are eligible for employment by it. Therefore, I believe that if real difficulties are being experienced by the fire brigade authorities in that respect, they, could consider whether that particular require?ment could be relaxed in order to permit them to secure the labour that they need. The honorable member for Griffith has referred to our naturalization law, and I point out to him that we must necessarily insist upon a reasonably lengthy period of residence in Australia in order to ensure that foreignborn persons shall be suitable for full citizenship rights in this country. Some exceptions are made to the existing rule, and a certain degree of discretion is permitted to the Minister. Exceptions are made, for example, of foreign-born persons who gave service in the allied cause. My predecessor and I have ruled that service on behalf of the allies during the recent war can be counted as a qualifying period for naturalization purposes. Perr haps some of the young Dutchmen, to whom the honorable member for Griffith. has referred, may qualify for naturalization in that regard. A provision also exists that, when insistence upon the full period of residence would cause serious hardship, the Minister may exercise his discretionary power to reduce the time that is normally required. I am prepared to examine any particular case that is brought to my notice, but I suggest at the same time that the problem which the honorable member for Griffith has mentioned may be approached from the other end, and that the Brisbane Eire Brigade authorities should examine whether it could, without endangering its own standards of employment, relax that particular requirement in respect of naturalization.

Mr CLARK:
DARLING, NEW SOUTH WALES

– I ask the Minister for Labour and National Service a question which arises from the fact that a considerable volume of vegetable production is now taking place at Mildura, on both the New South Wales side and the Victorian side of the Murray River. Unfortunately, production is being retarded because of the shortage of labour. Will the Minister arrange for immigrants who may be employed on vegetable production in that area to be housed at the immigrant camp in the Mildura district?

Mr HOLT:

– The honorable member has referred to a problem that is becoming increasingly difficult because of the reduction of our intake of foreign immigrants, who come to Australia under a contract arrangement. The displaced persons scheme has tapered off, as honorable members know, and the Government has tried to offset this reduction by negotiating agreements with the governments of various European countries under which their nationals will come to Australia under a two-year contract arrangement. At present, there are very few immigrants entering Australia who may be directed to employment, but the Government hopes that the number will increase in the months immediately ahead. I shall ascertain whether arrangements can be made to accommodate workers at Mildura as the honorable member has suggested.

Mr FALKINDER:

– I understand that before Dutch settlers in this country, except those who served with the allied forces during the war, can become naturalized they must reside here for five years. Will the Minister consider reducing the five-year period?

Mr HOLT:

– The period of qualification for naturalization does not vary with nationality. What applies to former Dutch citizens applies also to Europeanborn persons generally. It does not apply to British subjects, who are, under our laws, eligible for Australian citizenship. The reduction of the period of qualification is a matter of policy. I shall consider the honorable gentleman’s question, but I cannot answer it offhand.

page 1354

QUESTION

COST OF LIVING

Mr GRIFFITHS:
SHORTLAND, NEW SOUTH WALES

– I desire to ask the Vice-President of the Executive Council whether he has seen a report that the price of bread will increase by ltd per 2-lb. loaf and that meat will increase to from 2d. to ls Id. per lb. from next Thursday throughout New South Wales’; Will the Minister say to what extent these increases in the price of two items of staple diet will affect the next basic wage increase? Is it the intention of the Government to allow prices to continue to rise indefinitely, and thereby force wages to rise abo ? Or does the Government intend to take action to prevent increases in the cost of living, and thus protect the living standards of the Australian people as it promised to do during the’ last two general election campaigns? If the Government intends to take such action when will it do so?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– I do not know how the reported increases are likely to affect the cost of living. I suggest that as there is a price fixing authority which operates under the control of the Labour Government in New South Wales, that body might take into consideration the fact that increases in certain prices are likely to affect the cost of living. It is not within the province of the Australian Government to intervene in this matter.

page 1354

QUESTION

COMMONWEALTH LEGISLATION

Mr DRURY:
RYAN, QUEENSLAND

– By way of explanation of a question which I desire to address to the Vice-President of the Executive Council I point out that the legal profession and the business community in

Queensland have experienced difficulty in obtaining copies of Commonwealth acta and awards from the Commonwealth SubTreasury. “Will the Minister ensure that supplies of all Commonwealth acts and awards are made available for purchase by the Queensland public in future?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The answer is in the affirmative.

page 1355

QUESTION

CANBERRA

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– Answering the question in the spirit in which it has been asked, I inform the honorable member that before so doing I shall confer with the honorable members opposite, they being experts in automats.

page 1355

INFLATION

Mr PETERS:
BURKE, VICTORIA

– The Prime Minister recently stated publicly that the people of Australia had never been better off, and the Vice-President of the Executive Council has concurred in that opinion. If those gentlemen believe that the people are better off to-day, after two years in which the inflationary spiral has risen as never before in our history, will the Vice-President of the Executive Council say why members of the Government seek by means of the budget to dampen down inflation which is accompanied by such widespeard increasing prosperity.

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The honorable member must be well aware, if he gives any consideration at all to the purchasing power of the £1, or to the quantity of commodities consumed and the extraordinary facilities available and utilized with regard to recreation, that the people are much better off now than they have ever been before. That belief is supported by statistical information. The matter of inflation has a two-fold aspect. At the present time we are dealing with it in relation to defence preparedness, and the honorable member’s question indicated that he must be singularly obtuse about the need for defence preparedness.

page 1355

QUESTION

HOSPITAL ACCOMMODATION

Mr CRAMER:
BENNELONG, NEW SOUTH WALES

– In view of the great shortage of hospital accommodation in Sydney for seriously ill people, will the Minister for the Army consult with his colleague, the Minister for Repatriation, in order to arrange for the investigation of the report that a number of wards at the Randwick Military Hospital are meant and to ascertain whether such vacancies can be used to meet the needs of urgent civil cases?

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

– I have been informed that there is a substantial shortage of hospital accommodation in most of the Australian capital cities. I am not aware of the position at the Randwick Military Hospital, but I shall ascertain from the Minister for Repatriation whether the honorable member’s request can be granted.

page 1355

QUESTION

HOUSING

Mr BIRD:
BATMAN, VICTORIA

– I ask the Minister for Immigration whether it is a fact that Australia needs 90,000 new dwellings a year to house our new settlers and to provide accommodation for newly married couples, and that only about 60,000 new houses and flats are being completed annually? If these are facts, will the Minister give consideration to reducing the number of foreign immigrants to this country in order to minimize the ever-increasing bitter competition between them and native-born Australians for the possession of homes?

Mr HOLT:
LP

– The honorable member has not quite stated the facts. He indicated a requirement of about 90,000 houses to meet the needs of immigrants coming to Australia and of newly married couples. The figure would be somewhat lower than that for two reasons. The first of them is that net immigration to Australia is somewhat lower than the actual intake, because we lose about 20,000 annually by the flow of emigration from Australia; and, the second is that the intake this year will be about 30,000 fewer than the number of immigrants that arrived last year.. . Actually, 82,000 new houses, the construction-^ of which has been commenced this year, should be sufficient to cope not only with new marriages, which are estimated to number approximately 45,000, but also with the present net intake of immigrants on the basis of the Commonwealth Statistician’s average of four occupants to a house. This remarkable achievement in doubling the number of houses the construction of which has been commenced this year, compared with the number put under construction during the last pre-war year, has been due largely to the contribution that immigrants themselves are making to the building of homes. Immigrant labour is making substantial contributions in such spheres as the felling of timber and the production of cement, bricks and tiles and in various other services associated with the building of homes.

page 1356

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Mr GRAHAM:
ST GEORGE, NEW SOUTH WALES

– In view of reports of the imminent arrival for the Royal Australian Air Force of the new P2N-S Neptune bomber and general reconnaissance aircraft, I ask the Minister for Air whether the Government will agree to have such aircraft brought to the Fairbairn Aerodrome at Canberra in order to give to members of the Parliament an opportunity to inspect them before they proceed to their Australian stations.

Mr McMAHON:
LP

– The suggestion that the honorable member has made is very interesting. This afternoon, I shall contact the Air Board in order to see whether his request can be complied with.

page 1356

QUESTION

JAPAN

Mr HAYLEN:
PARKES, NEW SOUTH WALES

– I remind the VicePresident of the Executive Council that about a fortnight ago, I asked the Prime Minister to explain the position relative to Japanese trade if Japan, after the peace treaty has been signed, was admitted to the United Nations. I also sought information about whether Japan, in those circumstances, would receive favoured nation treatment under the General Agreement on Tariffs and Trade. The Prime Minister replied that he would make a statement on that subject as soon as possible. Can the Vice-President of the Executive Council inform me whether that statement can yet be made?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The statement is not yet available, but I shall raise the matter again with the Prime Minister on his return.

page 1356

QUESTION

COMPULSORY ACQUISITION OF PROPERTY

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– I point out to the Minister for the Interior that some years ago, the Crown decided to acquire certain building property in the vicinity of the runways of the Maryborough aerodrome, in order to assure the provision of a first-class airstrip, and resumption notices were issued on the 18th December, 1950.. In view of the fact that the owners of that property have been deprived of their land for such a long period, and also in view of my continued appeals in their interests, will the Minister investigate the unreasonable delay that has occurred so that those landholders may at least be advised of the compensation that the Crown proposes to pay to thom?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– Unfortunately, the period of delay from December, 1950, to to-day is not by any means the longest that has taken place in connexion with the acquisition of property. About three months ago, I asked the Department of the Interior to compile for me a complete return of all outstanding claims of the kind to which the honorable gentleman has referred, and I am endeavouring to have finality reached with them as rapidly as possible. I assure the honorable gentleman that if he will make available to me the facts of the claims which he has mentioned I shall try to have a settlement expedited.

page 1356

QUESTION

THE PARLIAMENT

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– My question is addressed to you, Mr. Speaker, and I point out, by way of explanation, that listeners to parliamentary broadcasts will find it a great advantage if they are informed in advance, of the names of honorable members who intend to speak during an afternoon and an evening. Many people, if they know that their own representatives are to speak late in the evening, will continue to listen to the broadcast in order to hear those honorable gentlemen. Having regard to .that fact, will you, Mr. Speaker, arrange for the commentators who are in charge of the parliamentary broadcasts, to announce the names of honorable members who are due to speak during the day or at night, when the Whips of the respective parties give you prior notice of them ?

Mr SPEAKER:

– I am afraid that the honorable member’s suggestion would be impracticable. In any case, it is a matter for the Parliamentary Proceedings Broadcasting Committee to determine. I shall undertake to bring it before the committee. The honorable gentleman well knows that, as a matter of procedure, the party whips provide me with the names of the proposed speakers in most debates. My experience has been that the list supplied to me at the beginning of any debate has seldom been adhered to. Changes are usually made without any notice being given to me. It often happens that an honorable member who has been booked to speak is unavoidably absent from the chamber when his turn comes. Consequently, I think that the evils would be greater than the benefits were the honorable member’s proposal to become effective.

page 1357

QUESTION

ROAD TRANSPORT

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– I ask the Minister for the Army a question in relation to the transport of an army tank along the Hume Highway to the Base Ordnance Depot at Bandiana. The tank weighed 30 tons and the carrier weighed 15 tons, making a total weight of 45 tons, which was considerably more than the road was constructed to carry. Will the Minister consider using the railways in future to transport tanks back to the Base Ordnance Depot for repairs? Is the Army bound by the same regulations as apply to civilian transport operators, who are obliged to observe load restrictions ?

Mr FRANCIS:
LP

– When tanks or other heavy armoured vehicles are moved from one place to another, there is close cooperation between the Army, the main roads boards and the police, or between the Army and the railways authorities. I am certain that the tank to which the honorable member has referred was moved only after consultation with officers and by approval of the road authorities.

page 1357

QUESTION

QUESTIONS

Mr. Davies having ashed a disallowed question,

Mr SPEAKER:

– This is the third question to-day that has been directed to a Minister who represents a Minister in the Senate and who cannot possibly supply an answer without notice. I have stated frequently that such questions should be placed on the notice-paper. I am afraid that I shall have to enforce my ruling on this subject rigidly from now on, because honorable members do not seem to be disposed to take notice of my warnings.

page 1357

QUESTION

NATIONAL SERVICE

Mr SWARTZ:
DARLING DOWNS, QUEENSLAND

– I ask the Minister for the Army whether national service trainees in the Army, when they conclude their initial period of continuous training, will be drafted to Citizen Military Forces units under exactly the same conditions as apply to present personnel of the Citizen Military Forces, which include provision for overseas service in the event of a major war?

Mr FRANCIS:
LP

– When national ser* vice trainees complete their period of training in camp, they will be allotted to Citizen Military Forces units in accordance with their own wishes if there is more than one such unit in the town where they live. only one unit is available, they will be assigned to it. They will be required to render three years service, including fourteen days in camp and twelve days home service. They will not be obliged to render any overseas service compulsorily. However, if they choose to volunteer for overseas service as other members of the Citizen Military Forces have done, the Army organization will be helped materially.

page 1357

QUESTION

SOCIAL SERVICES

Mr HAMILTON:
CANNING, WESTERN AUSTRALIA

– Can the Minister for Social Services inform me of the property possessions that are taken into consideration when determining the eligibility of applicants for the age pension?

Mr TOWNLEY:
Minister for Social Services · DENISON, TASMANIA · LP

– In the assessment of eligibility for the age pension, the home in which an applicant lives, life insurance policies up to a surrender value of £750, and the first £109 of the value of other property are disregarded. If an applicant has property worth more than £109, the annual pension of £156 is reduced by £1 for every £10 worth of property in excess of that figure up to £450 and by £2 for every £10 worth of property in excess of £450, so that, when the ceiling limit of £1,000 is reached, the pension is automatically eliminated.

page 1358

QUESTION

REPATRIATION

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– I ask the Vice-President of the Executive Council whether it is a fact that the Government has advised the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia that its request for an adjustment of the pensions that are paid to partially disabled exservicemen in accordance with increases of other pensions has been refused. If so, was the decision made because the Government believed the present rate of pension to be adequate or because it claimed that it lacked the financial means to provide for an increase? If neither of those reasons is the correct one, will the honorable gentleman state exactly why the Go- vernment is denying justice to those men ?

Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– As legislation dealing with this matter is at present under consideration by the House, I suggest that the hono’rable member possess his soul in patience until the matter can be fully discussed.

page 1358

QUESTION

NEWSPAPERS

Mr KEON:
YARRA, VICTORIA

– Has the PostmasterGeneral, in common with other honorable members, received from the Australian Journalists Association representations protesting against the proposal to syndicate news through Australian Associated Press and thereby cause the dismissal of independent journalists working for individual newspapers? Whether or not ho has received such representations, will he give an undertaking on behalf of the Government that if any attempt ismade by means of syndication to dispense with the services of journalists working for individual newspapers, facilities will not be granted by the Postal Department to make syndication any easier than it would be at present?

Mr ANTHONY:
CP

– I have received from the Australian Journalists Association a circular memorandum upon the syndication of news. It would be a grave interference with the right of Australians to conduct their own affairs if the Postmaster-General’s Department attempted to prohibit organizations from using the mails or the telegraph system to conduct their businesses in a legitimate manner.

page 1358

COTTON BOUNTY BILL 1951

Message recommending appropriation reported.

In committee (Consideration of Administrator’s message) :

Motion (by Mr. Eric J. Harrison) 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 payment ofa bounty on the production of cotton sued.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Mr. Eric J. Harrison and Mr. Kent Hughes do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Eric J Harrison, and read a first time.

Second Reading

Mr ERIC J HARRISON:
Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

.- I move-

That the bill be now read a second time.

The purpose of this bill is to give effect to the Government’s decision to assist the Australian cotton-growing industry by guaranteeing, for a period of five years commencing on the 1st January, 1951, an average annual net return to cottongrowers of 9½d. per lb. for all seed cotton of grades higher than strict good ordinary.

The history of cotton growing in Australia indicates that some form of government assistance is necessary, if production is to recover from the present low levels. For instance, production of cotton has declined from a peak of 17,471 bales in 1934 to only 522 bales in 1949, and 806 bales in 1950. A decline in production was evident during the war years, but that was understandable because labour for primary industry was scarce and the labour that was available was concentrated mainly upon food production. However, in the post-war years, cotton growing did not recover as was expected. The acreage under cotton decreased to a degree that threatened the industry’s existence in this country. In 1949 the industry sought a guaranteed return of 9 1/2 d. per lb. for seed cotton. The request was referred to the Tariff Board, which recommended against the guarantee. The board considered that the only measures that could be justified were the continuance of the existing protection afforded by the tariff, and the relief of the Queensland Cotton Board from its liability of £68,79S to the Commonwealth Bank. The government of the day adopted the board’s report.

Early in 1950, the cotton industry renewed its request for a guaranteed return, and the present Government undertook to review the matter. After considering all factors associated with the request, the Government decided to grant a guaranteed return of 9£d. per lb. In doing so, it did not limit its consideration entirely to economic factors, with which the Tariff Board is solely concerned. The Government took the view that cotton growing on a large scale in Australia is desirable for the diversification of the economy and of Australia’s full industrial development. Cotton is one of the few primary products for which there is a large domestic demand that is unsatisfied by local production and that has an important defence potential. Recent advances overseas in the mechanization of cotton growing have increased the possibility of the industry being established on a sound and efficient basis, provided that some stability can be assured during the developmental years. The guaranteed return envisaged in the bill is intended to provide that stability.

As honorable members are aware, cotton has been produced in Queensland over the 20 or 30 years during which a bounty in some form has been in. operation. Consequently, the development of cotton growing has been of particular interest to the Queensland Government. The Australian Government, in agreeing to provide a guaranteed return to the cotton-growers, has taken into account assurances by the Queensland Government that it will pursue a comprehensive extension programme directed to the development of a sound, balanced farming economy, embracing the use of cotton grassland rotation in the many districts where cotton can be efficiently grown; the development of cotton growing in the most appropriate irrigation projects; and the institution of research work with the object of further improving the efficiency of cotton production through plant breeding, entomological control and the adaptation of mechanization.

The Commonwealth has received advice that the Queensland Department of Agriculture and Stock, in an endeavour to increase the efficiency of mechanical harvesting, is conducting investigations, the objectives of which are to determine the best types of plants for machine harvesting, the most suitable methods of growing them with and without supplementary irrigation, and the merits of chemical defoliation of the plants prior to harvesting them mechanically. It is also examining the possibility of growing cotton in the northern districts during the winter and spring, so that the operations of the mechanical harvesters can be extended over a considerably longer period, thereby markedly reducing fixed overhead harvesting costs as well as obtaining greater production of cotton to reduce ginning and marketing costs per lb. of cotton. In this direction, growing cotton with supplementary irrigation in the Burdekin Valley is showing such promise as to arouse the interest of farmers, and it is anticipated that an appreciable acreage will be given over to this crop in this area during the coming season.

Some cotton has been grown under irrigation in Queensland for many years but the proportion has always been very small. Investigations which have been conducted, however, show that the use of irrigation can increase the yield by several times and provide a much higher quality cotton.

There is an added advantage in that irrigation areas are of a compact nature, and that fact would materially assist the further development of mechanical harvesting by reducing overhead costs, irrigation, of course, generally involves major developmental work and the bringing of further areas under irrigation is necessarily a gradual process. It is expected, however, that the Queensland Government will proceed with further irrigation projects that will substantially increase the area of land under irrigation, a considerable portion of which will be potential cotton-producing land. A bounty oil cotton has been in operation for many years. The act which it is proposed to repeal by this measure provided for a guaranteed return of lod. per lb. on raw cotton. That act was, of course, passed at a time when world cotton prices were much lower. The guaranteed return of 9-kl. per lb. seed cotton provided in the bill is equivalent to 27d. to 30d. per lb raw cotton. “When seeking the guarantee the industry asked for it to be expressed in terms of seed cotton, as that is the commodity with which growers are familiar, and because the raw cotton basis has in the past proved confusing to them.

It is possible that the bill will not involve for some time any expenditure by the Commonwealth. It is well known that there has been a world shortage of cotton, and the price of that commodity, like many others on the world market, has been much above previous levels. In October, 1947, the price of £-in. middling raw cotton was quoted on world markets at a price equivalent to approximately 25d. Australian currency, whereas at the end of September, 1951, the quote for this type of cotton was 41. 5d. However, the 1951 world cotton crop has been one of the best on record, and, if world production continues at or about such a level, it would not be unexpected if the world price receded to some degree. If the price of cotton declines to a degree that would make it necessary to pay a bounty, the bounty will be paid to the processor, that is, the gin ner of raw cotton, for distribution to growers. Under the system operated by the Queensland Cotton Board the ginner acquires seed cotton from growers, processes it into raw cotton and disposes of the raw cotton and any by-products.

The proceeds, less costs of ginning and administration, are available for payment to growers. Under the bill, if this total amount distributed by the processor does not return an average over all to growers of 9£d. per lb. seed cotton, the amount of the difference required to bring the average to that figure will be paid by the Commonwealth for distribution by the processor. It will be noted that the bounty is to be limited to grades above “strict good ordinary “. This is to be done in order to encourage the production of better types of cotton.

The return the grower receives for his seed cotton is primarily dependent on two factors - the price received by processors for the raw cotton and by-products, and the cost involved in the ginning process. An increase in ginning costs would reduce the grower’s return which, in turn, would increase the amount that the Commonwealth would be required to pay in bounty. It is therefore necessary for the Commonwealth to examine the cost of ginning operations, as it could otherwise be. placed in the position of undertaking to underwrite ginning costs without limit. The bill, therefore, contains in clause 8 (2.) a provision which, in effect authorizes the Minister, if satisfied that costs of ginning and administration are beyound a reasonable amount, to reduce the amount of bounty.

The announcement that the Government would grant the industry’s request for a guaranteed return to growers of 9$d. per lb. seed cotton was made in August, 1950, and it had the effect of increasing cotton plantings for the 1951 crop. However, insufficient time then remained for the full effect of the announcement to be realized. In spite of that fact production from the 1951 crop is estimated at 1,100 bales, compared with S06 bales from the 1950 crop. Production was originally estimated at 1,500 bales, but dry weather conditions, while’ benefiting the quality of the main crop, adversely affected the quantity of the late crop. It is not yet possible to give any estimate of the 1952 crop, as plantings took place only recently. However, as I” have mentioned previously, the Queensland Department- of Agriculture and. Stock has reported an increased interest. in cotton-growing, and its reports are confirmed by advice from the Queensland Cotton Board.

I need hardly point out the benefits that will accrue to Australia generally as a result of the expected expansion in cotton-growing. Not only could this result in the production of a greater quantity of the raw cotton required by the cotton spinning industry, the requirements of which are now in the vicinity of 70,000 to 80,000bales a year, but the by-products obtained from the cotton seed would also be of importance in industries that are already established here, and in industries that could be established if such by-products were available. Cottonseed oil is used in several food-processing industries, and cotton-seed meal is one of the best protein-rich concentrates for feeding to dairy herds. I point out also that development of the cotton industry will tend to lessen our dependence on imported cotton and will assist, either directly or indirectly, in saving dollars. The guarantee of the cotton producers’ returns is to be given on the understanding that those associated with the cottongrowing industry will make every endeavour to place the industry on a sound and efficient basis. With the development programme of research and mechanization currently being undertaken, and the enthusiastic support of those engaged in the industry, the Government can see no reason why the industry should not be successful and become an asset in Australia’s economy.

Debate (on motion by Mr. Pollard) adjourned.

page 1361

GOVERNMENT BUSINESS

Precedence

Motion (by Mr. Eric J. Harrison) agreed to -

That Government business shall take precedence over general business to-morrow.

page 1361

INCOME TAX AND SOCIAL SERVICES CONTRIBUTION BILL 1951

Second Reading

Debate resumed from the 30th October (vide page 1296), on motion by Sir Arthur Fadden -

That the bill be now read a second time.

Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP

– The bill seeks to impose rates of direct tax on both individuals and companies for the current year. As the amount of revenue involved will be about £500,000,000, the Government’s tax policy, as embodied in the bill, will have a considerable impact on the nation’s economic life. Before the proposals can be properly appraised some consideration has to be given to the income structure of the community so far as individuals are concerned, because it is on individual incomes that the direct income tax is to be imposed. Some consideration should also be given to the total amount of company income in the community, because the bill also fixes the rates of company tax for the current year. Unfortunately, the sort of information that should be available for the consideration of this measure, is not readily available. In the budget papers which have been circulated to honorable members some information has been given on page 166 concerning the income of the community for the year ended 30th June, 1949. That information, of course, is two’ years out of date but is of some advantage in attempting to appraise the possible effects of the taxation proposed in the bill. It also provides some indication of how the Government might have applied different methods for the purpose of raising revenue.

I have made an analysis of the figures which appear on page 166 of the budget papers and I consider that they indicate that the taxations methods which the Government seeks to apply would not be equitable. In respect of the year ended the 30th June, 1949, the total number of taxpayers in Australia was 2,831,418. During that year 1,955,000 people received an income of £500 and under. They represented 69.1 per cent of taxpayers. The table shows that the amount of income derived from dividends by that section of the community which received up to £1,000 in that year was comparatively insignificant. People in this group obtained most of their income from personal exertion in the form of salaries and wages. The 1,955,000 taxpayers who received incomes of £500 and under derived a total income of £599,000,000. Of that amount, £537,000,000 was earned as salaries and wages. This indicates that the average person who receives about £10 a week depends for his income on his work.There were 712,000 taxpayers who received between £500 and £1,000. They represented 25.1 per cent of all taxpayers and they received an aggregate income of £430,000,000 of which £340,000,000 was derived from salaries and wages. Persons who earned £1,000 and under received a total income of £1,071,000,000 of which £41,000,000 was derived from property and £1,030,000,000 was derived from personal exertion so that 82 per cent of the total was earned as salaries and wages. Ninetyfour per cent of the population had an income of £1,000 and under hut they derived a total of only £7,701,000 from dividends. In other words income from property is a comparatively insignificant amount in so far as persons earning less than £1,000 a year are concerned, and it comprises only.7 per cent of their income. A great deal of sympathy has been expressed by Government supporters for small investors. The fact is that dividends are a source of income mainly for people who receive more than £1,000 a year.

One hundred and sixty-three thousand people received incomes of over £1,000 a year during the year ended 30th June, 1949. They represented 5.8 per cent of taxpayers and they paid 56.8 per cent of the total amount of direct income tax collected in respect of that year. During the debate on the budget I stated that the Government should not have increased taxation on incomes of £500 a year and under but should have proposed a higher rate of tax on incomes of over £.1,000. When it is considered that 56.8 per cent of the total income tax is paid by 5.8 per cent of taxpayers, it is evident that those taxpayers could bear the burden of increased taxation better than the great majority of the community. The Government should give consideration to the reconstruction of the whole taxation structure. In the early days of federal income tax, prior to the introduction of uniform taxation, there was what was called a statutory exemption. This related to the lowest income on whicha person was liable to pay taxation. It was regarded as the minimum amount required to sustain him. Taxation can only be equitably imposed on what has been vaguely referred to as “ the taxable capacity of the individual “. The taxable capacity of the individual is the difference between the income which he receives and the absolute minimum required to keep him and his family as decent people in a civilized community. In the early days of federal income tax, when the States also imposed taxation, a person paid no federal income tax unless his total income amounted to £250 a year. If a taxpayer were married he received an allowance of £50 in respect of his wife, £50 in respect of each child and there were allowances also for certain other expenses such as insurance, medical treatment and so on.

In its 1950-51 budget the Government changed the war-time method of making income tax remissions from concessional rebates to concessional deductions. The method of concessional deduction is far more logical than that of concessional rebate, but even that method does not go as far as it might because it does not restore the full concept of the statutory exemption. It might be argued that theoretically there is a statutory exemption of £104, but that is not so because tax is levied on the first £100 of taxable income. The statutory exemption as we knew it in the past, no longer exists. There should be a reconstruction of the tax structure, and some attempt should be made to arrive at the amount that it costs a person to live - say £250 or £300 for a person with no dependants. Any person who received less than that should not be taxed. If that system were instituted, the number of taxpayers would be reduced and there would no longer be a necessity to collect intsalments of tax from persons earning less than say £5 a week. If honorable members will look at the memorandum that has been circulated to them, they will see on page 104 comparisons that purport to show the differences in the incidence of tax in Australia and in the United Kingdom and New Zealand. These comparisons are virtually frauds because they do not compare income tax on comparable incomes. The footnote on page 104 reads, in part, as follows: - the taxable income and taxes payable are expressed in the currency of the country concerned, without conversion to a common basie.

The Australian £1 is worth 20s. Australian, but the United Kingdom £1 and the New Zealand £1 are worth £1 5s. Australian. Those who have drawn up these scales have been more honest than those who have been interpreting them because they have at least indicated this distinction.

The second fraud in these tables has reference to the taxation rates in the United Kingdom, the footnote goes on as follows : -

The table is based on rates declared on Income of the year l!)51-52, including the national insurance contribution of £11 188. per annum.

Perhaps it will be argued that for all practical purposes the national insurance contribution is income tax. However, to evaluate properly the difference between Australian taxation and British taxation, one would have to consider the benefits provided by the national insurance scheme in England and relate them to the benefits provided under our social services system. One important difference is that in Great Britain there is no means test. I indicate these matters to show that the Government’s glib comparison is worthless. Moreover, the tax structure of the United Kingdom is entirely different from ours. A standard rate has been fixed in the United Kingdom, and in computing income tax a system of statutory exemption is in operation with further allowances for dependants. That is another reason why we cannot obtain a direct comparison of incomes as between Australia and the United Kingdom.

It is not important how much tax a man will pay if he lives in Great Britain, the important thing is how much he will pay in Australia and whether he will pay more than he should pay. Consider a man who has an income of about £500 a year. I suggest that a single person on that income has a certain taxable capacity, but a married man on £500 a year has no taxable capacity at all. There is some value in the suggestion that no person receiving less than the basic wage should pay income tax. The basic wage is supposed to be a minimum wage and as Mr. Justice Higgins indicated, it was designed to keep a man as a normal being living in a civilized community. The basic wage is a survival sum and it indicates no taxable capacity. It is the business of the Government and not the Taxation Branch ment to determine the impact of taxation on the individual taxpayer. No Opposition would ever have sufficient information at its disposal to be able to determine that matter. The present Opposition could have been furnished with more up-to-date information to enable it to comment more adequately upon the proposals.

In order to evaluate properly company taxation one must realize that every Australian company is different from every other company. Beside differences in income, there are differences as between private companies and public companies. The annual reports of the Commissioner for Taxation furnish some information on this matter. Although the last available report was the twenty-ninth report which was presented to this House on the 15th March, 1951, the information that it affords relative to Australian companies refers only to the income year which ended on the 30th June, 1947. Last evening, the Treasurer cited figures that were contained in the white paper on national income that was presented to the House at an early stage in the budget debate. He said that in 1946-47 the total taxable income of companies before provision was made for taxation, but after allowances in respect of capital depreciation were accounted for, amounted to £163,000,000 whereas for the last financial year it was estimated to be £355,000,000 or more than double what it was four years ago. Although the figures that are set out in the report of the Commissioner of Taxation for 1946-47 are not, perhaps, altogether relevant to-day, they convey some idea of the classes of companies that pay tax in Australia. Of non-private companies, which are generally referred to as public companies, there were 3,929, of which number 2,632 had incomes of £5,000 or less. That fact supports the argument that the honorable member for

East Sydney (Mr. Ward) advanced last evening to the effect that the Government’s proposals will harshly affect smaller companies. In 1946-47, two out of every three public companies had incomes of less than £5,000. I am not suggesting that the same proportion holds good to-day. However, when we examine the figures in respect of taxable income, which are really the important figures, we find that in that year the total taxable income of non-private companies amounted to £91,191, 90S of which sum only £1.941,638 represented taxable income of the 2,632 companies that had a total taxable income of £5,000 or less. Obviously, there is not a great deal of taxable income in that particular group. Nevertheless, the Government has decided to come down just as heavily upon the weaker companies as it proposes to come down .upon the stronger companies.

When we look at the remainder of the picture we discover which companies are the really powerful companies so far as taxation is concerned. In 1946-47, of the 3,929 companies, with a total taxable income of £91,191,688, only 26 had incomes of £500,000 or over and their taxable income amounted to £29,483,329, or approximately one-third of the total taxable income of public companies. Of the same total , number of companies, 54 had taxable incomes of from £200,000 to £500,000 and taxable incomes of £17,539,474, whilst 92 companies had incomes of from - £100,000 to £200,000, and a total taxable income of £12,S46,715. Thus 172 companies had incomes of £100,000 or more and their taxable income amounted to approximately £59,000,000 or, approximately, two-thirds of the total taxable income of all public companies.

As I have indicated, the income structure has changed considerably during the last four years. That fact is made clear from details that were published in the Financial Review, which is an interesting publication that has only recently been established in this country. That journal, in its issue of the 18th October last, states -

The “ Review is -indebted to Mr. J. B. Yorke of the Bank of New South Wales for ii quick job of research -on the trend of profits in 1051.

Analysing the account of 152 sample companies published in August and September, relating to the year ending June 30, 1951, he arrives at these results.

Combined profit of the 152 companies in 1950-51 increased by 41.22 per cent., compared with 1949-50 after allowing for taxation provision higher by 07.1 per cent., and deducting 30.2 per cent, more depreciation than in 1949-50.

The percentage of profit on capital paid up was 20.35 per cent, in 1950-51, and 14.41 per cent, in the previous year.

The biggest jump in profit was the 53.04 per cent, rise for the 80 manufacturing companies analysed.

Next the miscellaneous group of 24 showed a 38.35 per cent. rise. This group included hotel, transport, shipping, silver-lead, amusement and newspaper companies.

Profit of 21 .finance companies, including banks, insurance, pastoral and hire purchase, increased by 27.87 per cent.

The commercial group of 27 merchants, retail and distributing companies, rose by 23.57 per cent.

It is clear that in practice profits are increasing at a far greater rate than are wages and that nonexistent wives and children are not the greatest cause of inflation, as one honorable member opposite declared last night. The Government has .allowed inflation to get out of control by failing to tackle it at the appropriate time and in an effective way.

Whilst it is not always popular to tas the living, the Government might give more consideration to taxing the dead. The twenty-ninth report of the Commissioner of Taxation shows that in 1948-49 collections of estate duty in respect of estates of a value in excess of £10,000 amounted to only approximately £4,500,000 although the total value of such estates exceeded £40.000,000. Those figures reveal a possible field which the Government might exploit if it wishes to reduce the amount of potential . income that is available to the community. It could do so by imposing a far higher rate of probate duty in respect of the wealthier estates. We must bear in mind that because of the higher rate of tax that is now applicable to high incomes-

Mr DEPUTY SPEAKER (Mr Adermann:
FISHER, QUEENSLAND

– Order! The honorable member’s time has expired.

Mr. DRUMMOND (New England) f4.4]. - The honorable member for Melbourne Ports (Mr. Crean) has treated the House to a thoughtful discourse on the subject of taxation, and, in doing so, he paid a great deal of attention to detail. I do not propose, in ray address, to attempt to follow him through all the ramifications of the mass of figures which he quoted with such ease and fluency,’ but I desire to discuss two of the points that he has raised. The first is his reference to the statutory exemption. I, like all those persons who, in the past, had the benefit of the statutory exemption at one time, saw considerable merit in it, but I remind the honorable gentleman that the whole situation has changed entirely since those light and carefree days when we had a minimum of social services, and probably a maximum of private freedom either to prosper or to perish. “When we speak about the statutory exemption, we must pay regard to the fact that a tremendously wide range of social services has been introduced under the welfare state idea which we, in this country, are committed.

The other matter to which I desire to refer is the light-hearted manner in which the honorable member for Melbourne Ports brushed aside the incidence of the different scales of tax which apply to the same incomes in the United Kingdom, New Zealand and Australia. The honorable gentleman has said that a suitable comparison cannot be made between the incidence of taxation in those three countries because the currencies of the United Kingdom and New Zealand are sterling, while we in Australia have depreciated our £1 by 25 per cent, in relation to sterling. The honorable gentleman chose a very light way in which to brush that matter aside. If it could be shown that our scales of taxation were higher than those in the United Kingdom and New Zealand, it would be perfectly clear that a situation would exist to which his criticism might be justifiably applied. Because I plunged deeply into comparative statistics many years ago in the matter of expenditure on education, probably no one realizes better than I do that a person who tries to compare the statistics 0f one country with those of another country enters into a maze from which he is lucky to escape without suffering a temporary black-out. But that fact does not in any way invalidate the claim thar has been made by the Treasurer (Sir Arthur Fadden) that the comparative scales of taxation which have been prepared for the information of honorable members give force to the fact that the rates of tax in Australia are markedly lower than those of the United Kingdom and New Zealand. 1 referred to that fact in the budget debate. I pointed out that the rates of tax in the United Kingdom were considerably higher in terms of sterling than the proposed rates in Australia in terms of our own £1, which is depreciated by 25 per cent, in relation to sterling. I also stated that the figures which were given for the United Kingdom did not take into account the local taxes which bore heavily upon all sections of the British community. “We in Australia have no comparative set of figures which will convey that picture. Approximately 50 per cent, of the cost of education, for example, is carried by the local authorities of Great Britain.

I do not desire to pursue the subject through all the animadversions of the honorable member for Melbourne Ports for I should like to devote my time to a consideration of certain aspects of this bill. I understand that honorable members, when they debate the motion for the second reading of a bill, should deal with its principles rather than with its details which, strictly speaking, should be considered in committee. Therefore, I shall discuss taxation as an instrument of national policy. The dictum of the Treasurer that taxation should be so designed as to place the burden fairly and squarely upon all sections of the community, and upon the shoulders of those persons who are best able to bear it, is an axiom which should receive the assent and support of every fairminded man. The Treasurer made another most important statement when he said that any variation of the system should be designed not to give sectional advantages at the expense of the nation, but to meet special circumstances which required special treatment, although all persons, iri the long run, would pay the same amount of tax on the same total net income. That statement, I suggest, is an axiom that cannot honestly be disputed. Nevertheless, taxation in all countries has been, and is still being, used as an instrument of national policy. Australia is no exception to that general rule.

Honorable members, if they will briefly consider the history of taxation, will find that Australian governments from time to time have used taxation for the following purposes: - (1) to stimulate national development; (2) to encourage and develop secondary industries; (3) to wage World War I.; (4) to combat a grave economic depression; (5) to fight World War II.; and (6) to finance immigration and post-war development. Taxation was used as an instrument to give effect to those national policies.

The Treasurer proposes to use taxation as an instrument of national policy in order to achieve two objectives. The first is to rearm the nation in an effort to avert a third world war, or, if that effort should fail, to enable us to wage war effectively. The second is to cope with national and international inflation. I use the words international inflation, because inflation is not confined to Australia. We in this country are caught up in the international economics of the world, and whether we like it or not, we must use taxation as a weapon of national policy to enable us to cope with local inflation and international inflation. It would be impossible to combat local inflation effectively while disregarding international inflation because we are integrated to such a large degree with the world’s economic system.

Whether or not we prefer to saunter along in a pleasant isolation dream, we must realize that we are face to face with the fact that we must pay or perish. The Treasurer informed us in his budget speech of the Estimates of revenue and expenditure for the current financial year. In other words, we know what we are to get, and how much we are to pay for what we hope to get. These taxation proposals are the logical outcome.

I should now like to refer to two aspects of those taxation proposals. The first is that, despite the bitter criticism that has been directed at them, taxation in this country will still be lower than taxation in the other western democracies, which have been called upon to bear a burden at a much higher rate per capita than the people of Australia are asked to carry. In my speech on the budget, I cited facts to show that income tax rates in the United Kingdom and New Zealand are much higher than the proposed rates in Australia. I shall not repeat the comparative figures that I gave in that speech but I shall attempt to deal with the matter in a new way. Let us consider company tax and depreciation. The Canadian budget this year provides that depreciation shall be completely suspended for four years. I invite honorable gentlemen to consider what the business community in Australia would say about such a proposal if this Government decided to adopt it. But I suppose it is fair to state that, financially, Canada is much more strong and affluent than is this country. The objective of the Canadian Government in suspending depreciation for four years is to curb inflation by forcing companies and individuals to establish greater reserves in order to cover depreciation. In other words, they will have to pay lower dividends, and, in that way, avoid further inflationary pressure on the currency. Taxation in Canada has been used as an instrument of national policy in other ways than to control inflation. The Canadian Government has exempted four categories of industry from the “ stand-still “ on depreciation. They include rural primary industries, coalmining, light and power. Those industries will be allowed to use ordinary depreciation as deductions from taxable income. I commend those facts to the attention of the persons who so bitterly criticize the Treasurer for having taken an unavoidable step to counteract inflation. Like many others, I hope that it will be possible to include some escape provision so that relief may he afforded in cases of genuine hardship caused by the suspension of the 40 per cent allowance. However, I want Australians to realize that other nations, which are much more favorably situated economically than is Australia, have been obliged to take action along similar lines.[Quorum formed.] The obvious purpose of the suspension of depreciation allowances in Canada, except in relation to important basic industries, is to guide capital expansion into those industries by making them more profitable for investment purposes than less important industries. Concurrently with the discontinuance of depreciation allowances, the Canadian Government abolished the undistributed profits tax, as the Australian Government has done in relation to public companies. Clearly, depreciation allowances could not be terminated if the undistributed profits tas were not wiped out. Otherwise, the reserves of companies that could not provide for depreciation would be completely destroyed. In fact, the actions of the Canadian Government have provided another means for companies to set aside reserves. The policy of the Australian Government will have a similar effect. I am pleased on that account because I know that one of the greatest worries of company managers and directors arises from the wide gap between the prices that were paid for machinery that is now in use and the much higher prices that will have to be paid for replacement machinery.

Canada and other fellow members of the British Commonwealth have been compelled to take drastic steps such as this Government proposes to take in order to prepare for defence and, at the same time, control inflation. The time is overdue for all sections of the press, the business community and the general community to face these facts and to stop trying to blind themselves and others to the necessity for the Government’s proposals. We must stop fooling ourselves when the nation is in mortal danger - and it is in mortal danger now. The Government’s tax proposals are designed to enable it to solve the problems of controlling inflation and preparing for defence, which are pressing for a solution. Inflation is one severe problem and defence is another. Taken together, they accentuate the difficulties of government because they react against each other. The out-pouring of vast sums on defence exaggerates the difficulty of controlling inflation for the simple reason that it draws man-power and materials away from productive employment and releases additional spending power for which there is no adequate outlet owing to the restricted supply of goods and services. The Treasurer is using taxation as an instrument of national policy for solving the two problems. Many persons are apt to think that they are being badly treated under that policy. That reaction is as inevitable as is the need for such action.

I ask the House now to turn its attention to a new problem of which the nation is only now becoming fully aware. ] refer to the inadequate volume of primary production which, for some years, has been static in some fields and declining in other fields. I have pointed out previously that the actual tonnage of primary products shipped from Australia in 1949-50 was 500,000 tons less than the quantity shipped in 1931-32. In the intervening years, our population increased by between 1,000,000 and 1,500,000 and, therefore, the local demand for primary products has increased. Il may be said that the increase of the population accounts for the decrease of our exportable surpluses of primary products. But that is not so. An examination of statistics discloses that the output of some primary products is static and that the output of others is seriously decreasing. There is another factor in relation to primary production that must cause every, thoughtful person to pause and consider. We have had a remarkable sequence of good seasons during the last five years. Large areas of Australia have had more rain in those years than the, had had at any other period in the history of living men. The fact that production is either static or declining in such circumstances gives cause for grave alarm. Should we experience a series of droughts - and the pattern of our rainfall records indicates that such a setback is on the cards - we shall be in desperate straits. How can we accelerate the expansion of our primary industries, which are the main source of our existence at home as well as the main source of our exchange abroad? In order to solve the problem, one must understand the factor? that have caused it.

I shall discuss those factors and 1 shall link my remarks on this subject with that of taxation as an instrument of national policy. First, we have had a tariff policy that has strengthened our secondary industries at the expense of rural industries. Secondly, we experienced a period of economic depression during which large numbers of farmers went, bankrupt with the result that they and their families suffered serious hardships. Thirdly, the outbreak of World War II. helped to denude the countryside of youthful labour and left elderly men and women trying to cope with an unequal struggle. Fourthly, the extremely high wages and overtime rates and the privileges that were offered to employees in war-time industries imposed a further strain on the labour resources of primary industries. Fifthly, the introduction o.t the 40-hour week and high rates of pay and easy conditions in secondary industries completed the rot. Since the end of World War II., land men have fought a losing battle for plant, materials and labour. The only real relief was afforded to them by the high prices of wool, which enabled primary producers, for . the first time in my experience, to pay wages and give conditions that enabled them to compete successfully for labour with secondary and tertiary industries. Every Australianmust face up to the need for the tax imposts for which the Government has planned. Let us admit the fact at once. Without wavering in my support of the Government’s proposals, I urge it to keep certain courses of action ‘in mind for the future. It has been forced tn v higher taxes as an instrument of national policy in order to control inflation. It has placed the heaviest charges on luxury goods in order to make it more profitable for investors to direct their money into industries that are important to the economic welfare of the nation. That fact is a clear proof that the Government is using taxation as an instrument of national policy.

As soon as the budget and its tax proposals are out of the way, the Government should turn its attention to a positive policy for the encouragement of primary production. The courses of action thai I shall now propose should be regarded as an essential part df such a policy. First, I recommend that the land tax be abolished. It has caused our lands to be overstocked in an attempt to mine the countryside instead of work’ it intelligently. It has never served the purpose that was originally intended of bringing about a subdivision of large land holdings. Moreover, it encroaches upon a source of income for local government authorities. Land rates are already fairly high. The abandonment of the land tax would give to both State and local governing authorities a chance to make wise use of that source of revenue.

Secondly, I make a proposal that may at first appear to be revolutionary. I would draw a circle on the map of Australia round that portion which contains our undeveloped areas and I would make the entire region tax-free for ten years, provided that the persons who benefited from the exemption applied to the development of the land the amount of tax remissions accorded to them. We must face the fact that life in our northern and central areas is uncomfortable. If we are to induce people to pioneer those areas and develop them properly we must offer special inducements to them.

Thirdly, I recommend that petrol and other motor fuels be sold at a flat rate throughout Australia. That may be re1garded as revolutionary, but I remind the House that, when charcoal was used as a substitute for petrol during the years of war-time rationing, consumers in the metropolitan area of New South Wales, at any rate, paid exactly the same price for it as was charged to residents of the districts where the charcoal was burned. There is a tremendous disparity between the price charged for petrol that is used in our coastal regions, for pleasure as well as for business purposes, and the price charged to the men and women who are trying to develop our remote inland regions. These matters are of great importance.

Another disability that affects rural residents, chiefly in developed regions, is lack of adequate housing accommodation. We have great difficulty in finding suitable accommodation on country properties for immigrant, labour. That difficulty should, be overcome, and the quicker it is overcome the better will it be for Australia. Persons who build comfortable homes in the cities are allowed tax concessions of as much as 100 per cent, of the cost. The next step should be to give to country residents the right to deduct for income tax purposes the cost of building homesteads up to a value of £6,000 and workmen’s cottages up to a value of £3,000, on the basis of present costs. A life of ten years for wooden buildings and of fifteen years for brick buildings should be allowed. If the property were sold within those periods, the cost could be reduced by a tenth or a fifteenth for each year of its life, and the balance taken into account for tax purposes.

The pay-roll tax is causing many country people a great deal of worry. The average country man, even the grazier in a moderate way of business, does not employ staff to do his bookkeeping. Consequently, any legislative provision that increases his bookkeeping work reduces the time that he can devote to work upon his property and, therefore, adds to his troubles. I hope that it will be possible to provide some relief in that respect.

I have dealt mainly with rural primary industries, but there are other primary industries that must be considered when we have overcome the difficulties with which we are now confronted and turn constructively to the use of taxation as an instrument of national policy. The mining, forestry and fishing industries should be encouraged to the greatest possible degree by taxation measures designed to make it more worthwhile for them to produce. There is an old saying that is still true to-day. It is that a drop of honey catches more flies than does a barrel of vinegar. The introduction of taxation measures designed to encourage vigorous and wide-spread production would do far more good than will some of the measures that, unfortunately, we have been compelled to adopt at the present time.

The Treasurer in implementing a policy that has been agreed to by the members of the Cabinet and that is supported generally by the members of the Government parties, has been faced with a tremendous task. The right honorable gentleman and his officers deserve the highest praise for the manner in which they have discharged that task. As the significance of the Government’s taxation proposals becomes better understood, there will be a fuller appreciation of the magnitude of the Treasurer’s task and of the ability with which it has been tackled. Some people will have their toes trodden upon because it is impossible to make a general rule that does not affect someone adversely, but I have sufficient confidence in the practical common sense of the Treasurer to believe that, although his health is being sadly undermined at present, he will, in conjunction with his officers, formulate measures that will ameliorate the hardships that have, unfortunately, been inflicted upon some persons. 1 support these proposals, not because I like high taxes - and I know that the Treasurer does not like them - but because the present situation is such that we must either pay of perish.

Mr McLEOD:
Wannon

.- Having listened to the honorable member for New England (Mr.’ Drummond), 3 have come to the conclusion that it is a pity that he did not confer with the Treasurer (Sir Arthur Fadden), who is the leader . of his party, before these taxation proposals were presented to the House. The honorable gentleman gave, his blessing to the proposals and explained at some length how, in his opinion, ^primary producers will derive benefit from them, although the Treasurer has the opposite intention. It is the traditional role of the Australian Country party to make all kinds of promises to the farmers, whom it is supposed to represent. The honorable member for New England said that, if he had his way, he would remit certain taxes, yet he supports, for example, the abolition of the initial depreciation allowance, which will affect farmers adversely. I cannot understand the mem: bers of the Australian Country party in this chamber. They are not consistent’. I hope that, before this debate concludes, they will make it clear where their party stands in relation to this measure.

This Government, since it has been in office, has treated the primary producers most unjustly, in comparison with the manner in’ which it has treated large companies and other sections of the community. Although it has singled out primary producers .-for special attention. no protest nas been made by the so-called protectors of primary producers. A system of retrospective taxation is to be applied to farmers. .Such a system is wrong in every way. Previously, by means of the wool sales deduction, primary producers were required to pay taxes in advance. In 1950-51, 20 per cent, of the gross proceeds from the sale of wool was taken from wool-growers. That deduction enabled the Government to balance its budget, but it was a completely wrong and unsound financial measure. The deduction was enforced notwithstanding that the Government parties had been returned upon a policy of reducing taxes. Government supporters stated throughout the country that inflation was caused by the wool-growers of Australia, and the workers fell for that story. It was said that we were riding not to prosperity but to ruin on the sheep’s back, because the wool-growing industry, for the first time in its history, had had a really good year.

I am glad that the honorable member for New England told the House of the conditions that prevailed in our primary industries years ago when, incidentally, anti-Labour governments were in power. Wheat was sold at 2s. a bushel and wool at 9d. per lb. Even in 1939, the average price of wool was only lod. per lb. Why has the Government singled out the primary industries and the persons engaged in them for special attention? I lay the blame for that at the door of the members of the Australian Country party. After all, your leader is the Treasurer. He should have protected the interests of the farmers. Why did not he submit to the committee that he established to consider taxation measures » the proposal to institute a system of retrospective taxation in respect of primary producers? You have made every possible excuse for the Government’s failure to introduce an excess profits tax.

Mr SPEAKER:

– Order ! The honorable gentleman will address me, not the members of the Australian Country party.

Mr McLEOD:

– As I have said, the proposal to introduce a system of retrospective taxation was not submitted to the committee that was established by the Treasurer. The report of the committee upon it would have been most interesting, because the system is most unjust. Does the Treasurer believe that primary producers will be able to stand the added burden that he has imposed upon them, or that these taxation measures will have the effect of causing primary production to increase? The effect of the measures will be to make it impossible for small farmers to increase their production. To produce more, they must have machinery and plant. Why has the Australian Country party agreed to the abolition of the 40 per cent, initial depreciation allowance? Apparently, honorable gentlemen opposite believe that the farmer still uses a hoe and a sickle. Throughout the country there are paddocks full of natural grasses that should be mown. Do the Government’s advisers believe that those paddocks can be mown with a reaping hook? Do they know what reaping machines cost? Those paddocks can be mown only by machines.

Although farmers have had a succession of good years, they will, as a result of the operation of the Government’s taxation measures, be left with no reserve for use in bad years. I remind the House that 1950-51 was the first real boom year for wool. Until then, the price of wool was, comparatively speaking, lower than was the price of any other primary product. Many farmers produce both wool and wheat. Therefore, a great number of them will be affected by a reduction of wool prices. Let us consider the example that is given on page 9 of the explanatory memorandum. It takes the case of a man with a taxable income of £5,000 in 1950-51, and an average income of £2,000. That is the financial position of many farmers. Thi» example shows that the income tax and social services contribution payable in respect of the £1,000 by which the man’s income exceeds £4,000 will be £620. The. Government has not taxed companies to that degree. The taxpayer in the example will be required to pay this year a total of £1,712 6s. in income tax and social service contributions. The provisional tax that many farmers will be required to pay this year will be greater than the sum that they will receive for their wool clip, because wool prices have declined by 50 per cent. Many primary producers will have to borrow this year. Now honorable members opposite are telling the countryman to work harder and produce more although, as a result of the budget, he will be forced to borrow money from banks to meet his tax liabilities. He will certainly gain the benefit of this proposed prepayment of taxes in a year’s time, but the fact that he will have that tax liability to meet this year will prevent him from laying out money on the machinery and equipment that he requires for more efficient and economic production on his farm. Most farmers have been endeavouring to pay off their mortgages. Some of us have succeeded in doing so, which is a good thing for us, although not for the money-lenders who do not like mortgages to be paid off in full. The next aim of the farmer, after having paid off his mortgage, is to procure the machinery that is necessary for the improvement of his business. How will any farmer be able to afford expensive machinery when this tax proposal comes into effect? Under this proposal primary producers are to be subjected to the levying of tax retrospectively, and this is to be done without any protest by the members of the Australian Country party who profess to represent in this House the interests of the primary producers. I have here a propaganda pamphlet that was distributed by the anti-Labour parties during the 1949 general election campaign, which hears the words -

Freedom of the producer to manage his own farm.

Honorable members opposite said during that campaign that the socialists were going to take farms away from the. farmers. Certainly the Government will permit the farmer to manage his own farm, but it intends to take the proceeds of his labour from him. In effect, the Government will give the farmer the right to do all the hard work, and th,. Australian Country party section of the Government will manage all the proceeds. I am making this protest on behalf of the farmers. I know that the Government’s proposals have the concurrence of the so-called representatives of the farmers opposite, who sit silently behind the Government. Their behaviour shows that this is another of the great betrayals of primary industry that the Australian Country party has perpetrated. The Australian Country party has the same kind of financial backing as the Liberal party has.

In his , budget speech the Treasurer said -

It has already been announced that thi £45,000,000 collected as part of the initial capital for a possible wool stabilization scheme will be repaid as soon as practicable.

I do not thank him for that gesture, because that money has never belonged to the Government. It was held in trust by the Government pending a decision by the wool-growers about whether they approved the proposed stabilization scheme. They did not approve of it, and now the money has to be handed back to its owners. But while the Government is so generously handing back that amount of £45,000,000 to its owner it proposes to take another £47,000,000 from the primary producers as a result of the modification of the averaging system. The increase of income tax applicable to the community generally by 10 per cent, over last year’s tax, is expected to yield the Government an extra £25,000,000 in this financial year. But the modification of the averaging system, which will affect one section of the community only, the primary producers, is expected to yield an extra £47,000,000. The honorable member for Mallee (Mr. Turnbull) claimed yesterday that the Australian Country party has sympathy for the wool-grower. If support of the Government’s tax proposals is the kind of sympathy that it will show to the woolgrowers and other primary producers, then I am sure that rural interests will want no more of such sympathy. All they want now, in fact, is the carrying out of the promises that the Government, parties so glibly made during the general election campaign.

Government supporters say that only a relatively few primary producers will be affected by the abolition of the averaging system. I do not know how they have arrived at such a conclusion. Last year’s high wool prices brought many wool-growers into the category of large income earners but, as wool prices are now falling, they will soon be out of that category. They will therefore not be in a position to meet pre-payment of their tax liabilities. The same consideration will apply to other primary producers. The so-called dreadful socialist Chifley Government introduced the provision which allowed primary producers to set initial depreciation on new plant at 40 per cent. That was a very important matter for a farmer when he had to make up his mind about whether he could afford to buy a new machine for his farm. That provision has been removed by the Government.

Mr Pollard:

– The Government has also abolished the bounty on superphosphates.

Mr McLEOD:

– Exactly. Such actions have been taken by the Government without having aroused any protest from the members of the Australian Country party. The measures that the Labour Government took to help the primary producers were designed to encourage production. I know that some members of the Australian Country party who sit in this House are not farmers. That is why they can agree without scruple to the proposals of the alleged experts who drew up the budget. They have never been out into the country except on Sunday afternoons. The financial advisers to the Treasurer must have been chased by what they thought was a “merino bull” or a “short-horn ram and have had a complex against farms and farmers ever since. The results of some such complex are very marked in the budget. While the Government is administering heavy body blows to the primary producing interests it is asking country men for more production. Not only that, but it is also suggesting that the primary producers should re-invest some of their own money, which the Government held in trust for them in connexion with the proposed wool stabilization scheme, in government loans. The Treasurer said in his budget speech, when he mentioned that the sum of £45,000,000 that had been collected in connexion with that scheme was to be repaid -

I hope that the recipients will find it to their advantage to re-invest a major part of this large sum in Commonwealth loans.

He made that suggestion although during the same speech he announced that the Government intended to take from the farmers this year, by means of the modification of the averaging system, a further amount of £47,000,000. The budget summary shows that the increased yield from company tax is not expected to bring in anything like the amount that is to be obtained from primary producers this year. It is expected to bring in the amount of £10,900,000; the increase of the tax on private companies is expected to bring in £5,900,000; and the overall 10 per cent, increase of income tax is expected to bring in £25,000,000. All those items together amount to less than the increased revenue that is to be derived from primary producers as a result of the modification of the averaging system.

The Government will receive an increase of about £24,000,000 from the provisional tax that is to be paid by primary producers. As the incomes of primary producers are steadily falling from last year’s high levels, on which liability for provisional tax was computed, the Government will have to pay back a great deal of that revenue in another year or so. In next year’s budget, because of falling prices for rural products the Government will not be able to show a credit figure for provisional tax from farmers. The repayment of taxes by primary industries is similar to the Government’s dishonest action in taking 20 per cent of the woolgrower’s income from him in advance in order to balance its budget. Undoubtedly the Government will have to refund large amounts of prepaid taxes to primary producers in from twelve to eighteen months time. That kind of finance can get the Government into fresh difficulties. Such methods were never used by Labour governments, and never would be. Yet Government supporters inside and outside the Parliament have lauded the Treasurer for having displayed great courage in bringing down such a budget. The budget is deliberately accentuating inflation. Any school boy would tell honorable members opposite that.

Mr Bowden:

– That is exactly right; Any school boy would.

Mr McLEOD:

– The honorable member for Gippsland (Mr. Bowden) has not the mentality of a schoolboy, and he does not’ care about the well-being of the farmers. I should like to hear the honorable member defend the Government’s proposals, but I know that no supporter of’ the Australian Country party could honestly do so, especially in view of the promises that that party made to the people during the general election. The Australian Country party has sold the primary producer out every time. The primary industries have been put on a proper, fair and just basis only under Labour administrations. If primary producers are not careful they will lose more of the- benefits that they gained under Labour. Two years ago the anti-Labour parties released a flood of propaganda about the effects of Labour’s tax policy. They said that the Chifley £1 was worth only 12s. 6d. At the most the Menzies £1 is worth 10s., although the correct figure is about 6s., or one half of what the £1 was worth when the Chifley Government left office.

Mr Bowden:

– How are people able to live if that is so?

Mr McLEOD:

– It is making it more difficult for them to live. Many farmers will have to borrow money to meet their tax liabilities, or they will have to give up all hope of improving their farms. The honorable member for New England (Mr. Drummond) has suggested that the measure should contain an escape clause that would enable farmers to make purchases of plant. The escape for the farmer under this measure will be, in effect, that he simply will not buy new equipment, because with prices for his products on the wane as they are he will not be willing to enter into debt. We do not know when there will be a complete collapse of our rural economy but anybody can see that it is coming. Honorable members opposite know that it is coming and they are deliberately forcing up the tax liabilities’ of the primary interests. Farmers will be unwilling to risk buying new machinery.

The Treasurer has claimed that the modification of the averaging system will affect only 37,500 primary producers out of a total number of 300,000. Whose wild guess was that ?

Mr Turnbull:

– The Commonwealth Statistician’s.

Mr McLEOD:

– .I: do not know how the Commonwealth Statistician could arrive at such a figure, because the tax returns of all primary producers in respect of last year’s income would have been received in August at the earliest. It is to -be presumed that he prepared his figures in that month. How would he know the likely income of primary producers for the current year ? Last year’s incomes of primary producers were higher than this year’s will be, so the figure must be a wild guess. The modification of the averaging system will probably affect a much larger number of primary producers than 37,500. The income of all primary producers, including those in the electorate of the honorable member for Mallee will, in the main, be down below £4,000 this year, although last year most of them were higher than that figure. It was interesting to see that yesterday, the Sydney Morning Herald said that legal advice is to be taken to discover whether the Government’s proposals for the prepayment of tax by primary producers are constitutional. Of course it is within the constitutional powers of this Parliament to levy taxes, but even if it be legal for it to do so that does not necessarily mean that it is morally right to single out one section of the community for special treatment. The honorable member for Gippsland is in complete agreement with the Government’s proposal. He will go out among the farmers, followed by the honorable member for Mallee, and tell them that their main aim should be to keep the socialists out of office. Of course, these gentlemen are not farmers. Unfortunately, the farmers fell victims to that kind of talk during the general election. It was the socialists who brought in the 40 per cent, averaging system. You will not tell me that the Australian Country party-

Mr SPEAKER:

-Order! The honorable gentleman will address me. I am here for that special purpose.

Mr McLEOD:

– Very well, Mr. Speaker. Under the averaging system a farmer who had earned £5,000 would have paid £1,2S7 in tax after the addition of the 10 per cent, increase. Under this proposal he will pay about £500 more. This is a sectional tax which is wrong in principle and on behalf of the people of this country I enter an emphatic protest against it.

Mr RYAN:
Flinders

.- I feel very sorry for the honorable member for Wannon (Mr. McLeod). He seldom complains, but now he has complained against my friends in the Australian Country party, who know a great deal of what they have spoken about. He even complained about various proposals in the bill. He took us through fields and paddocks and every time he saw a sheep he groaned at the prospect of how much the Government’s proposals would cost him. His whole story was very sad. As far as honorable, members of the Opposition are concerned, the wool sales deduction is a dead horse - and nothing will kick it into life. The wool-growers are reasonable people who realize that the effect of the deduction was merely to require them to pay immediately some tax which they would have been bound to pay in the future. I do not think that any woolgrower, save the honorable member for Wannon, worries about it. The honorable member accused the Government of having stated that wool sales were responsible for inflation. If they were that would be all the more reason for the introduction of the Wool Sales Deduction Act. Nobody will deny that wool prices have contributed largely to inflation but by no means have they been the whole cause of it. The Government is now trying to reduce inflationary pressure and to bring some stability back into the life of wool-growers and everybody else in the community.

The honorable member complained of the variation of the application of the averaging system to primary producers. Perhaps he is now in the upper grade of the pastoralist coterie. Maybe the Government’s proposals will affect him very severely. I do not mind whom they effect. Anybody who has received enormous prices for wool-

Mr McLeod:

– They were only received for one year.

Mr RYAN:

– But a very large amount of money was left in the hands of the growers from the receipts for that year. therefore I can see no reason why this small body of people should not help to put the economy of the country in a better position. The wool-grower who does not earn more than £4,000 a year will not be hit by this proposal. If those who receive more than that amount are affected by it, what will that matter?

The honorable member for Melbourne Ports (Mr. Crean) and the honorable member for East Sydney (Mr. Ward) referred to the basis of taxation. I shall try to brush away the mists that seem to cloud their minds. Two basic problems have been dealt with by these honorable gentlemen - one properly and truly by the honorable member for Melbourne Ports and the other in his usual overstrained, wild and irrepressible fashion by the honorable member for East Sydney. The former dealt with the income of individuals. The latter dealt very largely with the subject of company incomes. From time to time it has been obvious that Opposition members are of the opinion that the upper income groups are becoming richer while the lower income groups are becoming poorer. That idea is not in accordance with the facts of the situation. In the financial- year 1938-39, 57 per cent, of the total national income was paid to wage and salary earners and for services. In the year 3950-51 the figure was 49.3 per cent. Companies, unincorporated businesses and professions received 33.2 per cent, of the national income in 1938-39 whilst in 1950-51 they received only 25.9 per cent. It would appear from the fact that the percentage of the national income received by wage and salary earners dropped from 57 per cent, in 1938-39 to 49.3 per cent, in 1950-51 that those people have become worse off. But in computing these percentages I have not taken into account the change in farm incomes, which rose from 5.8 per cent, of the national income in 1938-39 to 35 per cent, in 1950-51.

If the amount received by farm-owners is subtracted from the national income it will be found that wage and salary earners received 60 per cent, of the national income in 1938-39 and 67 per cent, in 1950-51 whereas the income of the rest of the community decreased from 35 per cent, of the national income in 1938-39 to 33 per cent, in 1950-51. In other words there has been a definite alteration in the distribution of income. So it is not true that the rich are receiving more than they used to receive. Figures are available concerning the United Kingdom which reveal the position there more clearly. An article published in the Economist recently indicated that whereas in 1938 wage and salary earners in the United Kingdom received only 37 per cent, of the national income, in 1949 they received 45 per cent. The percentage of income derived from dividends and similar sources over that period dropped from 37 per cent, to 2S per cent. What has happened in the United Kingdom has happened also in this country. Honorable members of the Opposition who have stated that the Government should take more money from the rich have failed to realize that very little more money can be obtained from the upper classes of society in this country. The percentage of total income received by those people is becoming less each year and as that trend continues it will become necessary for any government to spread the burden of taxation more equally over all classes.

The honorable member for East Sydney implied that . companies are parasitical growths on the population. He said that they make vast’ profits and increase prices. That is not the truth. It is true that Australian companies are prosperous. It is also true that the whole of our economy, particularly in the secondary industries, has been built up by enterprising companies which have been well managed. We owe a great deal to the management of these companies and to the shareholders who have striven to provide capital to develop the country. A vast volume of employment is provided for wage-earners by private enterprise and their prosperity and livelihood are bound up with the progress of the companies. There is a vast difference between the attitude of workers towards management in the United States of America, and the attitude of workers in this country. In the United States of America the wageearners realize that if the company prospers they prosper also and they cooperate with it. Private enterprise sup plies very large amounts of revenue for the Government. Last year, company taxation produced £90,500,000 in revenue. It is expected that £135,000,000 will be derived by the Government from that source during the current financial year. If the companies which now enjoy the blessings of the system of private enterprise were to be operated by a socialist government would they make profits? 1 cannot think of one nationalized enterprise that is producing profits.

Opposition members say that TransAustralia Airlines made a profit of £214,000 last year but that was not a real profit. It was only a book profit. ] challenge honorable members opposite to name any government enterprise that made a profit last year. The honorable member for East Sydney alleged tha; companies had made excess profits by increasing the prices of their goods. Prices are controlled in all States of the Commonwealth and that control covers the operations of a very large number of companies. Apart from that fact, I do not think that the honorable member realizes that profits expressed in round figures do not necessarily imply large actual profits. Last year the Sydney firm of David Jones Limited had a turnover of £16,500,000 but its average net profit, was only 1.5 per cent, on that turnover.

Mr Kekwick:

– What is the capital of that company?

Mr RYAN:

– I believe it to be of the order of £3,000,000 or £4,000,000. When the £1 of gross turnover is split up it is found to have been allocated a? follows : -

Therefore, honorable members will see that out of each £1 of moneys paid out dividends take only 2d. Then how could a reduction of dividends possibly affect the price at which an article may be sold? Another matter which perhaps is not properly understood by honorable members opposite is the destination of profits. It is assumed by honorable members opposite that companies are owned by a few wealthy people who have large blocks of shares.

Mr Tom Burke:

– Is the honorable gentleman going to tell us about the widows and orphans again?

Mr RYAN:

– There are some widows and orphans among the shareholders. Honorable members opposite continually infer that company dividends go to a few wealthy shareholders. I desire to refer to some figures which relate to the financial year 1942-43. That is some time ago, but unfortunately no later analysis can be made. Those figures indicate that what persons with incomes of less than £500 a year received represented 27.1 per cent, of the total Australian company dividend, and what those with incomes between £500 and £1,000 a year received represented 15.68 per cent., before they had paid tax on their receipts. In other words, what persons whose incomes were less than £1,000 a year received represented 42 per cent, of the total profits of companies before they had paid tax on it. But after they had paid tax what they had received represented 60.7 per cent, of the total profits. That means that the lower income earners received most of the company profits. Persons whose incomes were between £1,000 and £2,000 a year received an amount which represented 18 per cent, of the profits before taxation and 18 per cent, after taxation. What those with incomes between £2,000 and £5,000 received represented 39 per cent, before taxation and 33 per cent, after taxation. These figures show clearly that the dividends of companies do not go to a few people, but go mainly to a large number of low-income earners who are scattered throughout the -community.

I shall now cite to honorable members figures that show the professional status of shareholders in Holeproof Limited during the year 1933-34. In this company married women held 32 per cent, of the shares, professional men 12 per cent., industrial employees 8 per cent., clerks 8 per cent., business executives 6 per cent., retired persons 5 per cent., agricultural employees 2 per cent., and people with other occupations 18 per cent. Therefore it will be seen that shareholders are spread throughout the whole of the community, and that shareholding is not confined to a small wealthy class as honorable members opposite so consistently maintain it is. 1 do not believe that we can have a sound taxation system until we understand the economic effects of taxation on the community. I hope that the anomalies in our system will be corrected, but that cannot be done until we thoroughly inform ourselves of the real facts of the situation.

Mr TOM BURKE:
Perth

.- The bill before the House has three main purposes: first, to impose a flat rate tax of 10 per cent, of the actual income tax payable in the current financial year ; secondly, to abolish the averaging provisions in relation to the income of farmers and other primary producers when that income is over £4,000 a year, which will have an effect on the income not only for this year but also during a period for which the farmer has balanced his accounts and has provided for his commitments; and thirdly, to provide for an advance payment of 10 per cent, per annum by companies.

The bill discloses that once again the Government is completely confused and leaderless. It is attempting to obtain future revenue to meet its current commitments. Sound business practice would regard that as very doubtful finance. If such a practice were adopted by an individual it would lead him to bankruptcy. If a trustee were to follow that practice he would put himself in grave danger of becoming liable to penalties provided by the law. But this Government, with no apology, intends to use that very doubtful method of paying its current expenses out of future income.

Not only is the Government reaching forward to the future, it is also reaching back into the past in an attempt to get revenue in respect of a year for which the taxpayer has closed his accounts. Moreover, the Government is imposing a flat 10 per cent, levy on all taxpayers. Australian taxpayers who receive about the basic wage find it difficult to make ends meet. Tt is idle for the honorable member for Flinders (Mr. Ryan) to say that the Australian people are prosperous as they never were before.

Mr Ryan:

– I certainly did not say that.

Mr TOM BURKE:

– The honorable member at least said that the distribution of the increased prosperity has been wider than it was before.

Mr Ryan:

– I did say that.

Mr TOM BURKE:

– That is not correct.

Mr Kekwick:

– Why is it not correct?

Mr TOM BURKE:

– I shall disclose the reason later.For certain people, such as single men and women in the lower income groups, the present is a time of prosperity. They are perhaps living at a very good standard. However, married men with families find it increasingly difficult to provide their families with the ordinary necessaries - not amenities - of civilized life. Honorable members need only meet housewives whose husbands receive about the basic wage to find out that what I have said is correct. Such housewives have no chance to-day of making ends meet in regard to their ordinary needs, and certainly cannot afford luxuries. If honorable members on the Government side do not come into contact with the working people who are struggling to raise families, they have another means of ascertaining what the difficulties of those people are. Last week, a leading Sydney newspaper published an article about a housewife. . The article named her and gave her husband’s income. The report followed the housewife through her shopping and marketing, and disclosed what she needed to keep her family. It was proved that after providing for them she had nothing left from her husband’s wages. It was mentioned that her husband had to go without cigarettes, and other things which are normal amenities of life, in order that she might provide for the family. That example could be multiplied a thousandfold in our working-class community.

During past years the Opposition has pointed out that income and other tax rates cannot be compared with those in Great Britain, the United States of America or New Zealand unless all associated factors are taken into considera tion. It is of no use to say that income tax is higher in other countries unless it is known what that income will buy in each of the other countries and what will be left after providing for the necessaries of life. As the honorable member for Melbourne Ports (Mr. Crean) said,we must also know what services are provided in overseas countries for the taxes and the social services contributions that are paid. For instance, a relatively minor item in the “C “ series index concerns thehousing of a family. That does not reflect adequately the rents that are charged for accommodation at present. Nowadays it costs £2 10s., £3, or more, for singleroom accommodation. When a house can he rented the rent is exorbitant. When costs such as this are added to the enormously increased costs of transport, electricity, gas, and so on, it must be obvious that the family man cannot carry the further imposts that this budget places on him.

Ten per cent does not seem much. Ten per cent of the income tax might amount to 2s. a week for a low income-earner. But that is a vital amount when the taxpayer has to pay out the whole of his present income in order to live. Ten per cent might amount to £20 on a higher income, but the man who pays that will certainly not need all his present income to meet living costs. In imposing a flat rate increase of 10 per cent., the Government is not only abandoning all scientific taxation practice but also showing a callous disregard of the welfare of wage-earners and taxpayers in the middle ranges of income who have to meet substantial family commitments. I reject entirely the Government’s explanation that it is following this procedure because a flat rate increase will be easy to remove when the present emergency passes. Everything that honorable members opposite said during the budget debate indicated that the Government will be obliged to make still greater provision in its next budget in respect of expenditure on defence and development. It is dishonesty on their part to imply that next financial year expenditure under those headings will be reduced and that the Government will, in consequence, be enabled to remove this flat rate impost of 10 per cent. On the contrary, it is more likely that taxation will have to be increased still further.

Much of this debate has been directed to the effect that the proposal to abolish the averaging system of assessing tax will have upon wool-growers. This proposal will affect all primary producers with a taxable income of £4,000 a year, or more. That category embraces many dairy farmers, about whom we have heard so much from Government supporters. Such farmers will be penalized by the abolition of the averaging system. That system has considerable merit. It should be based on a longer period of years and should be used to assess the tax payable not only by primary producers but also by other classes of taxpayers whose incomes fluctuate from year to year. However, despite the fact that up to the present Government supporters have lauded the present system, which they have said was of great benefit to all primary producers, the Government now proposes to abolish it and to revert to the system of assessing tax on the basis of a closed accounting period. As the new system is to be applied to last year’s income, in respect of which all farmers have budgeted to meet their commitments in the belief that the present averaging system would be continued, this sudden alteration will place a heavy additional impost upon those primary producers whom it will affect.

During the course of the budget debate, Government supporters made contradictory statements on this subject. Whilst some of them said that the abolition of the averaging system would not deprive primary producers of any benefit others, including the honorable member for New England (Mr. Drummond), said that, having regard to the seriousness of the times, the producers should accept the proposal without demur. Still other Government supporters, including the honorable member for Canning (Mr. Hamilton), said that the proposal would benefit the farmers because incomes of primary producers generally would decrease during the current financial year and they would not be obliged to pay tax at the higher rate that would normally apply under the averaging system.

Mr DRUMMOND:
NEW ENGLAND, NEW SOUTH WALES

– That is correct.

Mr TOM BURKE:

– That may be so. But why does the Government propose to limit the benefit that will result from the abolition of the averaging system to farmers with an annual income of £4,000, or more? Why should farmers with lower incomes be denied such a benefit? Why should not the little farmer as well as the big farmer be given it? The fact is that on a long-term basis the averaging system is of great benefit to the primary producer. Incomes are beginning to fall,, but farmers with an income at present of £4,000 or more will not have to pay the higher rate that would normally apply under the averaging system. However, it is notorious that the incomes of primary producers are subject to fluctuations for different reasons which include varying seasonal conditions, droughts and floods. The Treasurer (Sir Arthur Fadden), in the course of his second-reading speech, said that the averaging system had originally been recommended by the Royal Commission on Taxation 1932-34. He added -

The royal commission recommended the retention of the averaging provisions for primary producers because their incomes are subject to fluctuation on account of seasonal conditions.

In view of that fact, why did not the Government refer its proposal to the Commonwealth Committee on Taxation?

Mr McMahon:

– It did so.

Mr TOM BURKE:

– It did not. la reply to a question that I asked, upon notice, the Treasurer informed me that the Government had not referred to that committee its proposal to abolish the averaging system. I asked that question because the Government had submitted to the committee its proposal to impose an excess profits tax. The Treasurer said that the proposal to abolish the averaging system was not submitted to the committee because it concerned the rates of tax. That was an amazing reply: but, at. least, it disclosed that the Government did not submit the proposal to that committee.

Mr McMahon:

– The Government referred to that committee not the proposal itself but the technical considerations involved in it.

Mr TOM BURKE:

– I cannot follow the Minister for Air (Mr. McMahon). In any event, the Treasurer definitely informed me that no aspect of the proposal, technical or other, was submitted to the Commonwealth Committee on Taxation. The Opposition now wants to know why the Government did not take such action and why members of the Australian Country party did not insist that the Government follow that procedure. We must remember that a royal commission, after full consideration of the matter, recommended that the averaging system be abolished in respect of other sections of taxpayers but that it be retained for the purpose of assessing the tax payable by primary producers. The main virtue of the averaging system is that under it the rate of tax is determined on the basis of the average income over a number of years, the idea being to equalize fluctuations of income during that period. For that reason it is favoured by the majority of primary producers. I can only surmise that the Government intends to abolish the averaging system in order to obtain additional revenue to help it to pay to the woolgrowers money that it withheld from them under the wool industry stabilization scheme. Evidence is not wanting that the Government is deliberately following this course in a fit of pique because of the defeat of its stabilization proposals at a recent ballot of growers. Newspapers whose forecasts are usually found to be close to the mark predicted that the Government would budget for a surplus of £50,000,000 whereas it is now actually budgeting for a surplus of more than £100,000,000. Apparently it changed its mind after the wool-growers had voted against its proposal to establish a reserve price for wool. It . should have continued the averaging system for the purpose of assessing the tax payable by farmers, or it should have submitted its proposal to abolish that system to the Commonwealth Committee on Taxation that was set up expressly for the purpose of examining taxation problems of this kind.

The Treasurer said that the Government had referred its proposal to impose an excess profits tax to the Common wealth Committee on Taxation. In passing, I should like to say that the committee is doing valuable work and that its report should be made available to honorable members to enable them to inform their minds more fully on taxation matters. The Treasurer added that the committee had recommended against that proposal. The Government’s record during the last two years provides convincing proof that it never intended to introduce an excess profits tax. In 1939, immediately prior to the outbreak of the recent war, this subject was discussed in an atmosphere similar to that which exists to-day. At that time, the most fierce opponent of such a tax was the present Treasurer. He pointed out that, an excess profits tax is useless in practice because it extracts only a very small proportion of the excess profits that companies reap as a result of governmental expenditure on defence. He also said that the companies concerned could easily pass on the impost, and that his experience as a working accountant convinced him that, on all counts, it was a tax of a bad type. Notwithstanding that opinion which he expressed as a result of long experience as a public accountant, the right honorable gentleman introduced a proposal for an excess profits tax. I suggest that he did so merely to deceive the people in the hope of gaining for the Government parties a miserably few votes. Having achieved his purpose in that respect, he referred the proposal to the Commonwealth Committee on Taxation, which, as I have said, recommended against it and thus relieved the Government of the responsibility of proceeding with it. So much for the Government’s trumpeting to the people ! In that matter it acted dishonestly. At no stage did it really intend to introduce an excess profits tax.

I repeat that the Government has adopted unusual practices in finance in order to get square on the farmers against whom it has a grudge because they are now comparatively wealthy. That attitude on the part of the Government is clearly revealed when we remember that after it abolished the superphosphate subsidy it perpetrated what is known as the wool “ steal “. Next, it abolished the special taxation deduction provisions applicable to farmers; and now it proposes to abolish, the averaging system of assessing the tax payable by primary producers. Clearly, the Government holds the view that tha farmers are the main cause of present inflationary trends. For that reason, it now proposes to mulct the wool-grower3 and the wheat-growers by placing special imposts upon them and by taking from them certain concessions that they have hitherto enjoyed. The Government professes to believe that such action will help to curb inflation. As the honorable member for Wannon (Mr. McLeod) has said, the farmers are now, for the first time for many years, recovering financially to a sufficient degree to pay off overdrafts which for so long have dogged them and cast a gloom over their lives. Provided they can obtain the requisite materials, they are now able to improve their properties; and they are strong enough financially to withstand slumps in prices and bad seasons. In short, now that they are able to make provision for themselves and to secure their future, the Government is using every conceivable means to attack them.

The advantage that will accrue to the nation as a result of having a prosperous primary producing section is so obvious that I am astonished that the Treasurer does not appear to realize it. Primary producers render to themselves a service if they are established on a sound financial basis, and Australia as a whole benefits because national prosperity rests to a large degree upon the proceeds from the export of our primary commodities. Australia will be in a better position to withstand the effects of an economic slump if primary producers are permitted to. take advantage of their unusual prosperity at the present time to discharge their indebtedness to financial institutions, improve their farms, and purchase stock, plant and machinery. Yet this Government is not prepared to allow primary producers to establish themselves in a solid financial position. It is eager to attack them, because it regards them as the major contributors to inflation. At the same time, it ignores the vast number of companies and individuals that made large fortunes in the past, and are making even larger fortunes to-day, by supplying the requirements of primary producers.

Opposition members can understand why members of the Liberal party are jubilant about such a policy. They regard it as a sound way in which to attack the inflationary conditions, which they attribute to the prosperity of the primary producers. They believe that such measures will be popular with their supporters in the great industrial cities. But are members of the Australian Country party content to sit silent in their places in this House while impost after impost is placed upon the primary producers? Will not those honorable gentlemen offer one word of protest when privileges that have been enjoyed by primary producers for many years are withdrawn, and that worthy section of the community is stigmatized as the major cause of inflation? Do members of the Australian Country party consider that primary producers should bear the brunt of every impost that is designed to curb inflation? If any members of the Parliament, apart from members of the Labour party, should have a knowledge of the position of primary producers, it is members of the Australian Country party. Yet they evidently place the perks of and the privileges that are associated with the occupancy of high offices above their responsibilities to, and the needs of, the farmers. Therefore, they listen unmoved, in stony silence, while heavy imposts are placed upon the section of the community that they are supposed to represent in this Parliament. The Treasurer, who is also the leader of the Australian Country party, has planned this policy of attacking the primary producers. If ever the Australian Country party deserved to be exterminated for a specific reason, it is for its acquiescence in such a policy, which, it is claimed, must be given effect because the Government believes that the prosperity of the wool-growers and the wheat-growers is leading this country to ruin.

I shall now deal briefly with the provision under which companies will be compelled to pay 10 per cent, of their tax in advance. I see nothing wrong with such a proposal, because companies can afford to make that prepayment, and, in any event, their final liability will thereby be reduced. But this proposal is another example of the Government’s policy of taking revenue, which should be collected in future years, to finance its current commitments. I have the idea that the Government reads the signs only too- well, and realizes that its life will be short. Therefore, it seeks in that way to embarrass its successor, which will be placed at a disadvantage by having to find ways and means of making up that leeway. An individual who adopted such a practice would be heading for a speedy bankruptcy. A trustee who adopted such a practice would find himself in difficulties under the law. Yet this Government, with a callous disregard of the interests whom it is supposed to represent, and with complete unconcern for sound financial practices; is following such a policy. Its proposals will not assist to check inflation, but will actually cause an increase of prices; they will not encourage increased production, but will be a deterrent in every possible way to producers. According to leading newspapers and to spokesmen for the chan bers of commerce and employers’ organizations, such a policy is not even stemming the tide of inflation. Last Friday I read that the chairman of the Employers Federation of New South Wales said that this Government, as a result of its policy, is pushing Australia headlong into socialism. Let the Government declare its intentions! Let it tell the people what it proposes to do !

Mr SPEAKER:

– Order ! The honorable member has exhausted his time.

Sitting suspended from 5.50 to 8 p.m.

Mr FAILES:
Lawson

.- The Income Tax and Social Services Contribution Bill is the measure by which the Government proposes to fix the rates of tax for the current financial year, in part for the purpose of raising revenue under the terms of the budget. At the outset, I emphasize the fact that the revenue raised by the Australian Government in these days is not used exclusively for its own purposes. That is a popular misconception. In truth, a large proportion of the revenue is handed to the States, under the terms of the agreement between the Commonwealth and the States, for their needs. Many honorable members discuss taxation measures as though the present system had applied ever since federation. In fact, for many years theAustralian Government levied taxes solely for its own purposes and the State governments exercised independent taxing rights.

The honorable member for Perth (Mr. Tom Burke) tried to bring the Government parties, especially the Australian Country party, into disrepute by repeating statements that had been made previously by other members of the Opposition about the Government’s taxation proposals generally and its plan to modify, the averaging system in particular. He said that the Government intended to impose a heavier tax on primary producers, that it was deliberately taking this course because of pique arising from the result of the wool-growers’ referendum on the reserve prices plan, that it proposed to collect tax from farmers in respect of incomes derived in the past, and that it intended to levy special imposts upon them. The Australian Country party, to which I have the honour to belong, does not look upon itself as a sectional party, as does the Australian Labour party. We do not represent the primary producers alone; we represent also the residents of country towns, both employers and employees. AVe believe that taxes should be spread evenly over the whole community and we resent the imputation that, like members of the Opposition, we are concerned with the interests of only one section of the community. We support this bill because of three main objects to which it will give effect. First, it will increase taxation generally by 10 per cent. Secondly, it will increase company tax and provide for companies to make advance payments somewhat in the same way as individual taxpayers pay provisional tax. Thirdly, it provides for a modification of the averaging system, which applies to only one section of the people. A fourth feature, of which we also approve, is the provision for an age allowance that will benefit elderly men and women. Men over 65 years of age and women over 60 years of age, if they are single, will not be obliged to pay tax if they have incomes of £234 a year or less. Married couples above those age limits whose aggregate income does not exceed £468 will be similarly exempt.

Honorable members can inform their minds on the subject of tax distribution by referring to the findings of the royal commission that was appointed on the 6th October, 1932, which were issued in four parts. The commission made a thorough general examination of taxation systems with the object of bringing State taxation into line with Commonwealth taxation, and it made a very important statement in paragraph 311 of its second report, on which an amendment of our taxation laws was subsequently based. That statement is as follows: -

In devising a taxation act regard must be had to three principles - the requirements of the revenue, equity and simplicity . Equity is attained if the burden of taxation is fairly distributed over all classes of taxpayers in such a manner as not to confer an undue advantage upon a ‘particular class or number of classes.

Those principles have been observed very definitely in the bill that we are now considering. The Government has aimed at satisfaction of the requirements of the revenue, compliance with the requirement for the spreading of taxation as evenly as is reasonably possible over all classes of the people, and preservation of simplicity. Obviously, it would be possible to make any tax thoroughly equitable, but, equally obviously, there would be a grave danger that the complications involved in imposing such a tax would render its advantages largely null and void. I believe that the bill now before the House satisfies, within the bounds of reason, the requirements stated by the royal commission. The honorable member for East Sydney (Mr. Ward), referring to the proposed 10 per cent, general increase, tried to convey the impression that the result would be most unfair to certain sections of taxpayers. He said that, whereas the tax rate on low incomes increased by steps of £50, the rate on incomes of £8,000 and more varied1 only in steps of £2,000. He omitted to point out that, on the lower income ranges, the rate of tax varies only from 6d. to ls. 9d. in the £1, and that incomes of from £8,000 to £10,000 are taxed at the rate of 14s. 6d. in the £1. That fact puts a totally different complexion on the situation.

I propose to confine my remarks mainly to the proposed modification of the averaging system. Before I explain this system in detail, I shall deal with the suggestion that has been made by members of the Opposition that this legislation will depart from precedent by having a retrospective effect. One of the axioms of taxation practice is that taxation in an? year is levied on the income of the preceding year. Taxation can be only prospective or retrospective, and history justifies the principle that is embodied in this bill. I refer honorable members to the earliest tax of which I can find records in the history of the Commonwealth - the land tax. It was enacted in 1910. Section 5 of the Land Tax Act 1910 provides that-

Land tax shall be levied in and for th, financial year beginning on the first day ot July, One thousand nine hundred and ten, am, each financial year thereafter.

The Land Tax Assessment Act, which wa? enacted during the same period, contained the following provision in section 12 : -

Land tax shall be charged on land as owned at noon on the thirtieth day of June immediately preceding the financial year in and foi which the tax is levied.

Those provisions established the practice, which has been observed ever since, of assessing tax in respect of the year which precedes that in which the assessment is made. Income tax followed the land tax and, on the 18th August, 1915, the present right honorable member for Bradfield (Mr. Hughes), speaking on the Income Tax Bill, said -

It is impossible for a man to say what he will earn during a year not yet completed: but we can ask taxpayers to say what they earned during the calandar year which ended on the 31st December last, or during the financial year which ended on the 30th Jun* last. We cannot .tax the income of the current year during this year.

We tax for this year on the income of last year

Clause 25 says -

For the purpose of assessment and levy of income tax, every person whose total income derived from all sources in Australia during tho calendar year One thousand nine hundred and fourteen, and during each succeeding calendar year . . shall . . . furnish to the Com missioner in the prescribed manne a return setting forth a full and complete statement of all such incomes derived bv him

The first assessment of income tax shall be as for the financial year commencing on the first day of July, One thousand nine hundred and fifteen, and each subsequent assessment shall be as for the succeeding financial year.

That provides another precedent for the practice of basing the tax levied in any year on the income of the preceding year. Paragraph 634 of the report of the royal commission reads as follows : -

The necessity to average incomes and to keep special records for this purpose retards and complicates the work of assessment in many ways. It adds materially to the cost of calculating tax on income which include dividends and rebates and increases the possibility of error. Without averaging, the majority of taxes could be quickly and accurately checked from the rate book.

The report states further that the primaryproducer is affected by seasonal conditions that cannot be predicted or controlled. The royal commission drew the inference that primary producers might suitably have their incomes averaged for taxation purposes. I direct the attention nf the House especially to that paragraph of the report, because, during the last few years, complaints have been made about the very slow rate at which assessments have been issued. The royal commission pointed out that the averaging system greatly complicates the work of assessment and delays the issue of assessments. That was one of the reasons why the royal commission recommended the rejection of the averaging system. Paragraph 635 of the report states-

In theory, the assessment of tax at an average rate appears to be attractive, but it is not entirely satisfactory in its incidence. The taxpayer whose income is increasing pays less and he whose income is decreasing pays more than he would if he were assessed at the rate applicable to his income of the year preceding the year of assessment. Assessment at an average rate, therefore, benefits the taxpayer who is in a better position to pay, and penalizes the taxpayer whose means to do so have been impaired.

In regard to giving assistance where assistance is required, the system appears to work in reverse. The royal commission, in paragraph 638 of its report, stated -

Our conclusion is that the averaging of income for the purpose of determining the rate of tax should be materially restricted.

In paragraph 641 it said -

We recommend that the averaging of income for the purpose of determining the rate of tax to be applied to the income of the year preceding the year of assessment be abolished in respect of all taxpayers other than primary producers.

In drafting the Income Tax Assessment Bill 1935, the government of the day acted on the recommendations that had been made by the royal commission. The Treasurer of the day, speaking on the motion for the second reading of that bill on the 5th December, 1935, said -

The recommendation of the Royal Commission is that averaging be abolished for all taxpayers other than primary producers. The averaging of income for rating purposes i.s a doubtful benefit to most taxpayers, and adds considerably to the complications of the assessment. None of the States is willing to adopt the averaging provisions generally, and New South Wales is the only State that concedes averaging even to primary producers.

I direct the attention of the House to the fact that, until the Commonwealth imposed taxes on behalf of the States, New South “Wales was the only State that made provision in its legislation for the averaging of incomes. The Treasurer continued as follows: -

Since taxpayers, however, have suffered during the recent depression from the disadvantage of the averaging provisions, and as some advantage is to be reaped from the provisions during the recovery period, the Government has decided to defer the withdrawal of these provisions from the Commonwealth act until 1938.

The Government that was in office in 1935 realized that some disadvantages had been suffered by taxpayers to whom the averaging provisions applied and decided that they should be given a fair chance to recover. Therefore, it deferred modifying the averaging provisions for two or three years. This Government believes that that principle should now be applied in reverse. Taxpayers to whom the averaging provisions have applied have derived an enormous advantage. It has .been estimated that, including the last financial year, the advantage has been worth approximately £140,000,000, or £104,000,000 if the last financial year be not taken into consideration. The Government considers that, if the averaging system is to be modified, it is reasonable to modify it now, because taxpayers have reaped the benefits of the system. Previously, modification of the system was deferred in order to give to taxpayers the benefit of the system for some time and thus offset some of the losses that they had suffered.

There is little more that need be said. On a declining market, the averaging system is a definite disadvantage to taxpayers. The income of primary producers rose from £44,000,000 in 1938-39 to approximately £S00,000,000 in the last financial year. By no stretch of the imagination can we persuade ourselves that the present level of income will be maintained. If the incomes of the primary producers were to decrease, and if this system were to be continued in operation, they would be under a disadvantage.

I shall deal now with the classes of persons in respect of whom the averaging provisions will be modified. A person whose average taxable income is under £4,000, which is not a very low income, may continue, if he so desires, to have the advantage of the averaging system. The honorable member for Perth asked why the Government, having decided to abolish the averaging system in respect of taxpayers with high incomes, did not propose to give to taxpayers with lower incomes the same advantage. They will be given an opportunity to choose whether they will or will not remain under the averaging system.

The next class of taxpayer in respect of whom the averaging provisions will be modified consists of those whose average income is under £4,000 but whose taxable income is over £4,000. Taxpayers in that category will pay tax upon the first £4,000 of their taxable income at the average rate, and upon the sum by which taxable income exceeds £4,000 at the ordinary rate. They will receive the benefit of the averaging provisions up to a point.

The third class of taxpayers in respect of whom the averaging provisions will be modified consists of those whose average income is over £4,000 but whose taxable income is under £4,000. Taxpayers in that category have probably suffered from a drought, a bad wool sale or an occurrence of that kind. There will be plenty of them in the years to come. We have had a very good run of seasons, but we cannot expect it to continue indefinitely. When the break comes, the taxable incomes of many primary producers will be under £4,000, although their average incomes may be in excess of that sum. Taxpayers in that category will pay income tax upon their taxable income al the rate applicable to a taxable income of £4,000. Their taxable income may be only £1,000 but, because they have had a succession of good years, their average income will be over £4,000. They will pay tax on the £1,000 at the rate applicable to an income of £4,000. All income tax payments will be increased by 10 per cent, by the special levy but, as I have said, the burden will be spread evenly throughout the community.

A primary producer whose income, both taxable and average, is over £4,000, will be automatically excluded from the operation of the averaging provisions, and will pay income tax on his income at the full rate in the same way as will other taxpayers. Primary producers whose average income is under £4,000 will bp able to elect that the averaging system shall not apply in the assessment based on income derived by them during the year ending on the 30th June, 1952, and ia assessments for subsequent years. Once the decision has been made, it will be irrevocable.

Mr Thompson:

– Unless the act be amended later. It is not irrevocable.

Mr FAILES:

– It will be irrevocable for as long as these provisions remain in force. I quite agree that the Parliament, in its wisdom, could amend the provisions later. I have pointed out that this is a fair measure and that it will spread the burden of taxation evenly over the community. It has been said that, although the basic wage and incomes generally have increased, the people will derive no advantage from the increases but will suffer under a disadvantage because income tax will be imposed upon their incomes at higher rates. That argument has been exploded. It has been pointed out that if a man’s income increases by £100 a year, the income tax that he pays will be increased by only a few pounds. Do honorable gentlemen opposite suggest that, because a person earns more .money; we should say that he should not be taxed at the rate applicable to his increased income? The Opposition’s taxation policy is “ Slug the big man “. The view of honorable gentlemen opposite is that the more a man earns, the greater should be the tax that he has to pay, but in this debate they have taken the line that if a man earns more this year than he did last year he should not be required to pay more tax this year than he paid last year. That is a hypocritical attitude.

Mr Thompson:

– That is not our argument.

Mr FAILES:

– The argument that has been advanced by the Opposition in the course of this debate is that, if a man earns more money this year than he did last year, it will not be fair to require him to pay more in tax and that, having given him an opportunity to earn more money, we should not take it from him. I cannot believe that the Opposition wishes the Government to establish a precedent of that kind.

I believe that the incidence of taxation upon the community under this measure will be fair. The criticisms that have been directed at the Government’s proposals have related, not to the 10 per cent, increase of income tax, but to income tax rates generally. The rates this year will be the same as they were last year. Therefore, to criticize them now is to criticize them twelve months too late. I have received few complaints about the proposed modifications of the averaging system. The complaints that I have received have been made by people who did not fully understand what was proposed and the benefits, that would ultimately accrue to them as a result of the modifications. Many of the letters that I have received were written before this bill was introduced and its provisions explained.

I commend the measure to honorable members. It is in keeping with the spirit df the recommendations of the royal commission that investigated thoroughly all aspects of taxation. Those recommendations were considered by a previous Government to be worthy of inclusion in an income tax assessment bill.

Mr W M BOURKE:
Fawkner

– In the brief time that I have been a member of this Parliament I have learned at least one lesson, which is that an Opposition should speak with responsibility in connexion with financial measures because, in a democracy, the Opposition of to-day will be the Government of to-morrow. When we are defining our attitude towards financial matters we must bear in mind the fact that honorable members on this side of the House will be responsible for tax measures in the perhaps not far distant future. Bearing that consideration in mind I shall adopt a rather unusual course at the outset of the remarks that I shall make on this measure. Thai, course is to say that there is one feature of the bill of which I approve. I refer to the provision that relates to the income tax and social services contribution to be paid by persons in receipt of age pensions who also have other sources of income. The present position under the legislation now in force is an anomaly and has caused a great deal of distress and heart-burning among many old people who are in receipt of pensions and are also in receipt, from other sources, of income which is not sufficient to disqualify them from receiving a pension, but is sufficient to bring them within the tax field. Many of them have complained indignantly that they have received tax assessments for such a small amount as £2 or £3. They take the view that as they are pensioners they should not have to pay income tax. That provision in the bill is a good one. People who have reached the age at which they are entitled to an age pension are not now to be subject to income tax or social services contribution if their net income does not exceed £234. An age pensioner may, under this provision, earn 30s. a week to supplement his or her pension of £3 a week, without thereby becoming liable to pay tax. The taxing of such people formerly produced a negligible amount of revenue and caused a great deal of discontent. The provision to which I have referred, which is contained in clause 1*?, should remain a permanent feature of out income tax legislation in the future.

I turn now to the vexed subject of the modification of the averaging system which has the members of the “ corner party “ so ill at ease. The honorable member for Lawson (Mr. Failes) was at pains to quote from the report of the Royal Commission on Taxation of 1932-34. He dealt with various aspects of the averaging system and said that, as primary producers are now receiving very high incomes, if the system was to be modified at all it should be modified now. He said that the incomes of primary producers will soon be starting to decline. I hope that that will not occur. He added that after the decline of primary producers’ incomes had started the averaging system would work out to the disadvantage of the primary producer, and, therefore, it would be to their advantage to have it modified now. If he is to be consistent in his argument that the system should be modified now because it would work out to the disadvantage of the primary producers later when their incomes had declined, then he should contend that thisystem should be abolished completely. Also, if his arguments are to be consistent, if the system were to be retained there should not be set any differential rate of income above which the modification would operate.

The honorable member quoted passages from the report of the Royal Commission on Taxation in which it was pointed out that there were some features of the averaging system that were unsatisfactory. But he did not stress the really vital point of that report, which was that the royal commission, whilst recommending that the averaging system should be abolished as far as all taxpayers, apart from primary producers, were concerned, definitely recommended that the averaging provisions should be retained in respect of the incomes of primary producers. If we are to rely on the report of the commission the averaging system should be retained. The royal commission did not draw the distinction upon which honorable members opposite now rely, and say that the averaging system is all right and should be retained up to a certain stage, and beyond that stage should be abolished. We have to be consistent, and if we abide by the recommendation of the royal commission then the averaging system should be retained

Mr. IP. M. Bourke. in respect of the incomes of all primary producers. Among the attempts honorable members have made to defend the actions of the Government in regard to this matter, which reek with inconsistency, I have not noticed the slightest effort by the honorable member for Lawson or any other honorable member opposite to defend the provision under which the modification of the averaging system is to be retrospective in its effect. Surely one of the prime considerations in the imposition of income tax is that the taxpayer, whoever he may be, shall know with certainty his future commitments.

When the new income tax return form was introduced this year as a result of the recommendations of the committee on taxation, one of the advantages that the Treasurer (Sir Arthur Fadden) claimed for it was that it would simplify the method of calculating the tax due by each taxpayer. I believe that the new form, is advantageous in that it enables the taxpayer readily to make his own assessment of his tax liability and thu? make the necessary financial arrangements according to the nature of that liability. I am sure that many primary producers relied on that principle when they submitted their returns this year and, having assessed their tax liabilities, made the necessary financial arrangements, believing that whatever steps they had taken to cover those liabilities would give to them a complete tax cover until the end of this financial year. Now they find that, not merely if the averaging system, which they had in mind when they made their financial arrangements, to be modified but, what is much worse, that the modification is to be made retrospective by being carried back to the last financial year. That means that, after the primary producers have made their calculations and have possibly entered into capital commitments for the future, they are now faced with tax liabilities of which they had no inkling before. I have not heard any of the defenders of the legislation attempt to defend that aspect of it, and no wonder, because it surely is completely indefensible and is a complete departure from all the established principles of taxation, which should provide certainty and equity to the taxpayer. Why did not those honorable members who have been defending the legislation as a whole point out to the Treasurer the inconsistency of this retrospective provision under which the primary producers will pay this year in tax an additional amount of £47,000,000?

The Treasurer has not seen fit to apply the principle of retrospectivity to other aspects of taxation that are covered by this measure. A very important part of the bill deals with taxes on private companies. The Treasurer very rightly pointed out that there is a definition of “private company” in the principal act and that many private companies, expertly advised by their taxation consultants, have devised ways and means of evading the definition so that they may avoid the incidence of the tax that is applicable to private companies. Very complicated provisions have been embodied in the legislation to defeat such methods. Some of those methods are very questionable, and it is proper that the bill should endeavour to close any gaps. The Treasurer stated that legislative action should be taken to defeat the attempts that are constantly made to avoid the just measure of taxation that is applicable to companies and their shareholders. He then said -

I am giving companies full notice of the

Altered definition, and I propose that it shall not be effective until the end of the current income year, that is, the 30th June, 1952.

How do honorable members opposite explain that grave inconsistency? In the case of the primary producer a new law which will increase his tax liability is to be dated back to cover income derived last year, whereas in relation to the proposed amendments regarding private companies the Treasurer gives them full notice, and the alterations are not to apply until the beginning of the next financial year. That is a very important distinction. Probably the Treasurer had in mind his friends, the accountants, when he decided to give to the companies full notice of the alterations, so that the accountants could get on to the job and devise new ways and means of evading these provisions, and earn some substantial fees for themselves in the process.

An examination of the various aspects of the bill shows quite clearly that the Treasurer has not proceeded upon any principle. There are certain wellestablished and well-defined principles of taxation. His concern has been not with those principles but only with getting in as much revenue as he can by fair means or foul. In addition to his completely indefensible action in respect of the primary producers, by modifying the averaging system retrospectively, he has adopted the same procedure in relation to the initial depreciation allowance, which applies to industrial concerns. The Chifley Government introduced legislation that provided for an initial depreciation allowance of 40 per cent, of plant newly acquired. That was a very sound measure which allowed people to replace plant that had become worn out by the ravages that had been caused during the war years. Section 57a of the Income Tax Assessment Act stated quite clearly that those provisions were to apply until the 30th June, 1952. On the basis of that clear statement in the act the operators of businesses have been buying plant and have been entering into other commitments. The Treasurer, adopting an indefensible stand and departing from established principles, has now abolished that provision, also retrospectively, because its abolition will date back to the 1st July last.

A case can be made out for the abolition of the special depreciation allowance as an anti-inflationary measure,’ because unquestionably excessive private investment is one of the factors that is adding to inflation at the present’ time. But there is no possible justification for making the provision to abolish that allowance retrospective in effect. Although the Treasurer made no’ attempt to justify the retrospective operation of the modification of the., averaging system, he attempted to justify’”” his stand on the abolition of the initial averaging system, he did attempt to justify his stand on the abolition of the initial depreciation allowance by, saying that the British Government had acted similarly. He did not, however, point out-* that the British Government gave notice that it intended to abolish the special depreciation allowance that operated in

Great Britain. It gave to the taxpayers concerned a year’s notice of its intention last April when it announced that the provision would be withdrawn in April of next year. That was a fair and reasonable action to take. The Treasurer, on the other hand, has given notice in October that the provision will be abolished, the abolition to take effect from last June. His attempt to justify his action by comparing it with the action of the British Government is indefensible.

Mr Hamilton:

– “Whose side is the honorable gentleman on ?

Honorable members interjecting,

Mr SPEAKER:

– Order!

Mr W M BOURKE:

– It is easy to understand the discomfiture of honorable members opposite in relation to these, matters. Another aspect of the bill that is worthy of some attention deals with the taxes to be imposed on public and private companies. This is an important sphere of taxation which brings in a great deal of revenue. Here again we find that the Treasurer is proceeding purely on a hand to mouth and day to day basis, and is not working out his tax proposals on any basis of principle. The committee of taxation experts that has been advising him, and of which we have heard a great deal, pointed out in one of its reports that companies, both private and public, enjoyed an advantage that was not enjoyed by individual taxpayers. “Wage and salary earners pay income tax under the “ pay-as-you-earn “ system. The tax is deducted from their wages and is either paid to the Government immediately by the purchase of stamps or remitted each month by the employer. Traders, farmers and professional men have been brought under the “payasyouearn” system by having been required to pay a provisional tax on the basis of the current year’s income.

It seems to me to be quite inequitable that, as the committee on taxation pointed out, companies have not been placed in a similar position. Why should private and public companies enjoy the advantage of not having to pay their tax under the’ “ pay-as-you-earn “ system as individuals have to do? Many companies are able to finance their activities with money which really belongs to the Common wealth. Some companies pay taxes that amount to over £1,000,000 a year. They do not submit their returns until the end of the year, six months after the close of the financial year, and they do not receive their assessments for another three or four months. Consequently, they have nine or ten months in which they can use that money which rightly belongs to the Crown. The committee on taxation suggested that this advantage should be taken away from companies and that they should be placed on the same basis as individuals in relation to taxation. The committee recommended that the companies should be placed on a “ payasyouearn “ basis over a period of three years. Each year, for three years, they would pay their full year’s tax plus onethird. In three years they would have paid tax for four years. They would then pay tax on current income in the year in which it was earned, as do individuals. The Treasurer has noi told the House what he proposes to do about that recommendation. Apparently he does not know. Although he did not. accept the recommendation to place company taxation on a “ pay-as-you-earn “ basis, he has modified the recommendation by proposing that companies shall pay the normal amount of tax this year plus an advance equal to 10 per cent, of their tax. That advance payment will be credited against their liabilities for the financial year 1951-52. What has the Treasurer in mind? He has not told the House. Does he intend that companies shall pay the normal tax for the current year plus one-tenth for the year only? Does he propose that they shall pay the additional amount of onetenth next year also and continue to do so for ten years, when they will be taxed on the “ pay-as-your-earn “ basis ? Or is the Treasurer not prepared to place company taxation on this scientific basis?It may not be possible for a government to commit itself ten years ahead hut ] consider it to be wrong in principle that companies should continue to enjoy this1 advantage. When the- Opposition returns to office it should ensure that companies shall be placed upon the same basis of taxation as are individuals and shall be brought within the “ pay-as-you-earn “ system.

The committee on taxation was at great pains to point out that an excess profits tax would not be desirable. Apparently it was as a result of that report that the Treasurer abandoned the intention, repeatedly expressed in this House, to impose an excess profits tax. He has not told the House whether the abandonment of this proposal is a temporary measure or whether, in view of the fact that an extra 10 per cent, is to be paid by companies, the imposition of an excess profits tax is not now contemplated. The subject of an excess profits tax will have to be faced by this Parliament eventually. There is no doubt that, as the committee pointed out, the imposition of an excess profits tax is a complicated matter. Anomalies are associated with it and injustice may he inflicted in respect of indi vidual companies.

During the last two wars attempts ware made to put some sort of excess profits tax into operation. A “War-time Profits Act was introduced in 1917 and a Wartime (Company) Tax Act was in force, from 1940 to 1946. If an excess profits tax is to be adopted it is necessary to decide upon what basis it should be calculated. If it should be based on the percentage of earnings to capital,, difficulties would arise from the fact that the capital structure of companies varies very much. Broken Hill South Limited, which recently published its balance-sheet, has an authorized capital of £800,000, yet for the financial year ended the 30th June, 1951, the net profit of that company, after paying tax, was £1,757,000 which was well in excess of its authorized capital. The value of its assets also is considerably more than its authorized capital. Other companies such as Australian Consolidated Industries Limited and the Colonial Sugar / Refining Company Limited have made a considerable number of bonus share issues, consequently their capital has been watered and the profit in relation to capital is comparatively small, with the result that it would be difficult to arrive at an equitable basis for the collection of an excess profits tax on this basis. It is ‘difficult even to attempt to fix the rate of excess profits tax on the basis of actual profit because industries differ from each other so much that a profit of £100,000 in the case of one company may be excessive whereas a profit of £1,000,000 in the case of another company may not be excessive. Those are some of the difficulties that have to be faced in determining whether an excess profits tax should be imposed.

It seems to be wrong in principle that, all public companies should pay a primary rate of tax of 9s. in the £1. These companies are not subject to any undistributed profits tax, and the flat rate of tax is applicable to all of them. There is no differentiation whether the profit be £5,000 or £5,000,000. In the United States of America, where this subject is of much more importance than it is in Australia because of the much larger amounts that are earned by companies, an Excess Profits Act was signed by President Truman on the 3rd January, 1951, and is now in operation. It provides that there shall be an increase of from 45 per cent, to 47 per cent, of the rate of tax on company profits over 25,000 dollars a year. The rate of 45 per cent, is equal to 9s. in the £1, which is payable by Australian companies. In the United States the government did not apply the one flatrate to all companies. It applied a tax of 25 per cent, to the first 25,000 dollars of a company’s net earnings and 47 per cent, thereafter until the excess profits range was reached. In addition, it imposed a tax of 77 per cent, on excess profits. These have been defined as all earnings exceeding S5 per cent, of the average profits for the three base years 1946-49. This tax was made retrospective to the 1st July, 1950, and was to expire on the 1st July, 1953, unless revised or renewed by Congress. There was a further provision that there should be a ceiling of 62 per cent, on the amount of a company’s net earnings which could be taken in the ordinary corporation tax and the excess profits tax combined. The legislation also provided for the use of an alternative method in the computation of excess profits, a company’s invested capital instead of its earnings being considered when determining what was “ excess “. Under this method, before the 77 per cent, excess profits rate applied a company could earn 12 per cent, on the first 5,000,000 dollars of invested capital, 10 per cent on the second 5,000,000 dollars and 8 per cent, on all capital over 10,000,000 dollars. The legislation contains numerous relief clauses designed to protect the development of small firms and regulated industries such as public utilities and depressed industries.

Mr SPEAKER:

– Order ! The honorable member’s time has expired.

Motion (by Mr. Eric J. Harrison) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 58

NOES: 44

Majority . . . . 14

AYES

NOES

Question so resolved in the affirmative.

Question put -

That the bill be now read a second time.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 59

NOES: 45

Majority . . . . 14

AYES

NOES

Question so resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Question put -

That the bill be agreed to.

The committee divided. (The Chairman - Mr. C. F. Adermann.)

AYES: 57

NOES: 46

Majority…… 11

AYES

NOES

Question so resolved in the affirmative.

Bill reported without amendment; report adopted.

Bill read a third time.

page 1391

DEFENCE FORCES RETIREMENT BENEFITS BILL 1951

Second Reading

Debate resumed from the 4th October (vide page 319), on motion by Mr. McBride -

That the bill be now read a second time.

Mr CHAMBERS:
Adelaide

.- The Opposition does not oppose this bill Its main purpose is to provide for increases of the pensions payable to retired members of the permanent defence forces and to widows’, children’s, invalidity and age 60 pensions in respect of such service personnel. It also liberalizes the conditions that are attached to re-employment by the Commonwealth or by instrumentalities of the Commonwealth by providing that personnel who may be so re-employed shall be eligible to receive a pension of at least £6 a week or one-half of the retirement pension, whichever is the greater. Honorable members will recall that the Minister for Defence (Mr. McBride) referred particularly to the Government’s desire to re-employ retired members of the permanent defence forces in civilian positions in the defence services in which their capabilities may be of special value. I should like an assurance from the Minister that every safeguard will be provided in order to ensure that no retired personnel shall be re-employed in circumstances that would result in any injustice being done to any person who is already employed on the civilian side of the defence forces.

Mr McBRIDE:
Minister for Defence · Wakefield · LP

in reply - I appreciate the Opposition’s support of this measure. As the honorable member for Adelaide (Mr. Chambers) has pointed out, the bill seeks to liberalize pensions and allowances and to permit of the reemployment in certain civil positions of ex-servicemen who have reached the retiring age and who would otherwise remain in retirement on a pension. I agree with the honorable member that due care must be exercised to ensure that the positions of normal personnel in the defence organization shall not be jeopardized by the re-employment of such ex-servicemen. I assure the House that every step will be taken to maintain such safeguards.

Question resolved in the affirmative.

Bill read a second time, and committed pro forma; progress reported.

Message recommending appropriation reported.

In committee (Consideration of Administrator’s message) :

Motion (by Mr. McBride) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Defence Forces Retirement Benefits Act’ 1948-1950, and for other purposes.

Resolution reported ; report adopted.

In committee: Consideration resumed.

Clauses 1 to 11 agreed to.

Clause 12-

Section sixty-nine of the Principal Act is amended -

by omitting sub-section (1.) and inserting in its stead the following sub-sections : -

(1A.)

Mr McBRIDE:
Minister for Defence · Wakefield · LP

.- I move-

That proposed sub-section (1a.) be left out, with a view to insert in lieu thereof the following sub-section: - “’ (1a.) Where a pensioner -

again becomes a member for the purposes of this Act; or

serves on full-time continuous service in the Service and receives pay in respect of that full-time service, so much of the pension as is equivalent to the amount payable by the Commonwealth under section thirty-two of this Act shall be cancelled during the period of that full-time continuous service in excess of twenty-eight working days in any period of twelve months.’; and”.

Honorable members are aware that proposed sub-section (1a) in the bill as drafted relates to the amount of pension payable to a pensioner who again becomes a member for the purposes of the act, or who agrees to serve, or is called up for full-time continuous service after having been retired from the service on a pension. Due to the shortage of instructors in the forcesfor national service trainees, certain “ otherranks “ who have been retired on pension have taken the opportunity of again serving for a limited period after retirement on pension. For pension purposes, these “ other ranks “ are in exactly the same category as an emergency list officer who is called up for full-time continuous service after retirement on pension. An officer of this class receives full pension for 28 working days and a reduced pension thereafter. It is proposed that an “ other rank “ who is called up after retirement shall receive similar treatment.

Mr Chambers:

– The Opposition does not oppose the amendment.

Amendment agreed to.

Clause, as amended, agreed to.

Clauses 13 to 16 agreed to.

Title agreed to.

Bill reported with an amendment: report - by leave - adopted.

Bill - by leave - read a third time.

page 1392

LOAN (HOUSING) BILL 1951

Second Reading

Debate resumed from the 26th Septemher (vide page 116), on motion by Mr. Casey -

That the bill be now read a second time.

Mr ALLAN FRASER:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– The Opposition does’ not intend to oppose the passage of this bill, which seeks parliamentary authority for further loan raisings’ totalling £27,000,000 for the purpose of advances to the States under the Commonwealth and State Housing Agreement Act 1945. That act is one of the pieces of social legislation that was placed upon the statute-book by the Chifley Labour Government. It provides an illustration, and convincing evidence, of the failure of private enterprise to meet the requirements of the people with respect to the provision of houses. It is one of those pieces of Labour legislation that the present Government has adopted, not from any enthusiasm for its basic purposes, but because the actual needs of the housing situation compel it to acknowledge the failure of private capital and private enterprise to meet the needs of the people, and the necessity for direct State aid in the provision of housing for them. The Government has also been obliged to accept such an extreme proposal as the rent subsidy, provision, for which is embodied in the original act. It states that a person shall pay rent for the house which he occupies according to the size of his income and the extent of his family responsibilities. The rent is not in any way related to the law of supply and demand.

The Minister for External Affairs (Mr. Casey), who represents the Minister for National Development (Senator Spooner) in this chamber, spoke in his second reading speech on this bill of the Government’s determination to continue to meet the excess of the average cost of prefabricated houses imported by the States over the cost of comparable Australian-built houses up to a maximum of £300 a house on 33,000 houses. That information is interesting, because the Government, while it is continuing the policy of subsidizing the cost of imported prefabricated houses for the purposes of State housing schemes, is increasing through its budget and its general financial policy the cost of Australian-built houses. In other words, it proposes to expend a proportion of its revenues on subsidizing the cost of imported houses, yet at the same time to extract money from a person who builds a house in this country. By its recent financial measures, the Government will add approximately £300 to the co3t of the construction of an Australian-built cottage. That sum, curiously enough, is exactly the amount by which the Government proposes to subsidize the cost of imported prefabricated houses. There appears to be little logic or consistency in the Government’s financial policy.

While the Government, by this socialistic measure, provides a large amount of loan money to enable the States to build houses, it places in the way of the independent Australian citizen who wishes to build his own cottage every conceivable financial barrier. To-day, it is almost impossible for a private citizen, as a result of the operation of the policy of placing credit restrictions on advances for housing, to obtain the money that he requires to build his own cottage. The wage or salary earner finds it quite beyond his power to discover a financial institution that is per mitted to advance him the amount of money that he requires to construct his own house. I merely comment on the curious situation that has arisen. This Government proposes to raise £27,000,000 for the purpose of advances to the States to enable them to construct houses for their citizens, and that is a measure of direct State intervention in the lives of the people. At the same time, this Government, which is pledged to the maintenance of the system of private enterprise and the encouragement of the individual homebuilder, is placing every conceivable difficulty in the way of that person, so that the private construction of cottages of moderate size for men of moderate means has almost ceased.

Mr Eggins:

– Has the honorable member any authority for that statement?

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is the position in every city in Australia to-day, and I can cite many examples in my own electorate that bear out exactly what I have said. However, I shall cite only one of those instances for the information of the honorable member for Lyne (Mr. Eggins). . The Bombala municipality proposes to build six cottages of timber frame with fibro walls, and wishes to borrow for that purpose the modest amount of £10,000. Each applicant for one of those cottages must possess his own block of land, and be prepared to pay a deposit of approximately £200 towards the cost of the cottage and to borrow the balance of the sum from the municipality. Such a small, decentralized, practical housing scheme deserves assistance. Yet the Bombala municipality, upon making application to every bank and insurance company, to the Superannuation Board of New South “Wales and to similar bodies, invariably received the reply that the necessary money could not be made available as a result of the credit policy that had been laid down by the central bank at the direction of the Treasurer (Sir Arthur Fadden). That instance could be multiplied many times. In Canberra, Sydney, and, I imagine, every other city in Australia, those persons who to-day are seeking money to enable them to build their own houses find it practically impossible to obtain the necessary finance.

In conclusion, I repeat that the Opposition does not oppose this bill because it represents the acceptance and continuance by the Government of a good policy that was instituted by the Chifley Labour Government in 1945.

Mr CRAMER:
Bennelong

.- The honorable member for Eden-Monaro (Mr. Allan Fraser) made an important admission when he said that the Commonwealth and State Housing Agreement Act 1945, for the purposes of which further loan raisings totalling £27,000,000 are now required, is a socialistic agreement. He has proudly proclaimed that this Government has to rely upon the States to build houses, but he forgets for the time being that all that this Government is asked to do on this occasion is to honour an agreement between the Commonwealth and the States that was made by the Chifley Labour Government, of which he was a supporter. I agree with him that such an agreement is socialistic, but I remind him that the Commonwealth and State Housing Agreement Act was placed on the statute-book by the Chifley Government.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– For a period of ten years.

Mr CRAMER:

– That is so. The honorable member for Eden-Monaro also stated that private enterprise had failed to build houses for the people. That is not a statement of fact, because private enterprise has never had an opportunity to do so, particularly because of the ramifications of the Commonwealth and State Housing Agreement, and also because of other legislation that was passed by the various States under which they locked up the building materials that would otherwise have been available to private enterprise. In like manner, the States, through their housing commissions, locked up land that could have been used by private enterprise for housing purposes. I speak with some authority on this matter, because I happen to be one of the victims of a resumption of certain land by the the Housing Commission of New South Wales. That area belonged to a firm of which I am a director. Houses were erected upon it by the Housing Commission, and one of them was made available to. the gentleman who is the federal president and the New South Wales president of the Australian Labour party. He no.w lives in that house, which stands on land for which my company has not yet been paid. I do not know whether his is a deserving case, but I have stated the facts.

I do not oppose this bill, because we must agree to its passage in order to fulfil a contractual obligation. Its purpose is to provide loan money for New South Wales, Queensland, Victoria and Western Australia for the purposes of advances under the Commonwealth and State Housing Agreement Act 1945. Displaying great wisdom, South Australia has not been a party to that agreement, and Tasmania no longer participates in it. Many honorable members may not be aware that under the Commonwealth and State Housing Agreement Act 1945, the rate of interest that is charged on this loan money shall be that payable on long-term loans ; but, by an agreement between the Commonwealth and the States, the rate is fixed at 3 per cent. Therefore, the Commonwealth subsidizes the interest in excess of that figure. Whilst I am not opposed to, and do not wish to oppose at this stage, the advance of the sum of £27,000,000 to the States for housing purposes, I point out that, in my considered opinion, the Commonwealth and State Housing Agreement is an insidious national tragedy. It was conceived by the Chifley Labour Government, and was intended to be the base of a socialist State in Australia. The debate on the Commonwealth and State Housing Agreement Bill in 1945 produced the famous admission by the then Minister for Post-war Reconstruction, Mr. Dedman, that -

The Commonwealth Government is not concerned with making the workers into little capitalists.

An examination of the Commonwealth and State Housing Agreement reveals some interesting points. Many Australians seem to think that it enables the States to build houses for sale. That is so in an indirect fashion, but the agreement has nothing to do with sales. Its purpose is to finance the construction of houses for rental purposes only. A State can pay to the Commonwealth the amount that it has advanced for a house and may then sell the building under a separate financial arrangement. That procedure is being followed to a limited degree in some of the States. The formula by which rental charges are determined is an extraordinary calculation and has not a sound economic basis. The rent that a tenant pays is related to his income; it must not exceed one-fifth of his income. Any loss sustained on that rent is made up in the proportions of three-fifths by the Commonwealth and two-fifths by the State concerned. Not.withstanding widespread prosperity, the Commonwealth has already been obliged to pay over £250,000 on this account.

The system of calculating rents has another interesting feature. The formula provides for the charging of interest at 3 per cent., and the capital cost is amortized over a period of 53 years. On that basis, together with some additions that I need not mention, an economic rent is determined. Anybody who knows anything about the renting of houses and the values of property will realize that it is not possible to arrive at an economic rental value by amortizing the capital cost over a period of 53 years. There is much greater value in a house in the first ten years than there is in the second ten years, and so on. Therefore, the formula represents a peculiar way of determining an economic rent. I believe that it is based only on a socialistic conception and that it has no relation to economic reality.

This Government has the right to give twelve months’ notice of its intention to cancel the agreement. I suggest that, if it wants to do something worthwhile for the people of Australia, it will give notice of cancellation at the earliest possible moment and will set about reconstructing the whole scheme of housing in Australia on- an entirely different basis. I sincerely hope that it will exercise that right. My objection is, not to the fact that houses are being built under the agreement, but to the system that the agreement perpetuates. Governments are encouraging the establishment of a permanent renting community and that, in my opinion, is bad for Australia and bad for the tenants. The system tends to destroy the natural incentive to home ownership. Its basis, as I have said, is the desire for a socialist State. The statistics of house construction under the terms of the agreement, which came into force in 1945 but which has been operating effectively only since 1946, provide us with interesting information. In theperiod from 1945 to 1951, 4S,117 houses have been built by the various Statesunder the terms of the agreement. In addition to that, other State authorities have built 9,336 houses for renting and, over the whole of Australia, 8,400 temporary units for renting have been provided, making a grand total of 65,853 houses provided by all governments. They accommodate over 263,000 people. It is safe to assume that, if we allow this system to continue, over 1,000,000 Australians will be tenants of governments ten years hence. Indeed, we can go further than that and say that, before the first house is paid off by any of the States under the terms of the agreement, there will be over 3,000,000 people in that position. I believe that to be a national tragedy.

In addition to the units that I have already mentioned, many houses were built by governments in previous years. In the Australian Capital Territory, the Government owns 3,783 houses that are occupied by approximately 16,000 tenants.

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– That is not correct.

Mr CRAMER:

– Those figures were supplied to me by the Minister for the Interior (Mr. Kent Hughes).

Mr ALLAN FRASER:
EDEN-MONARO, NEW SOUTH WALES · ALP

– But many of those houses are in the course of being purchased.

Mr CRAMER:

– I have no information about that. Altogether, the Australian Government owns 9,500 housing units. Applying the usual formula of four persons to each unit, that represents 3S,000 individuals who are occupying houses owned by this Government. Some governments, of course, have been sensible enough to institute purchase schemes. The Government of South Australia showed its wisdom by remaining aloof from the Commonwealth and State Housing Agreement, and it is the only State

Government that has done anything really effective to encourage home ownership.. Over the short period that I have mentioned, it has sold 4,760 houses. Only 7,963 houses have been built under purchase schemes by governments in that period. That total compares very unfavorably with the number of houses built for rental purposes. It does not take into account, of course, houses that have been built under other excellent arrangements, such as the war service homes scheme, under which 51,651 houses have been built since its inception.

Building societies are the main source of cheap finance for persons who want to become home owners. I spoke on the subject of housing finance during the budget debate, and I regret that the Treasurer (Sir Arthur Fadden) did not deal with this aspect of the Government’s plan for the restriction of credit when he closed that debate last night. The Commonwealth Bank has done good work by making funds available cheaply to its employees, but, in my opinion, its officers are not more entitled to such help than are other citizens. The bank makes money available at a very low rate of interest, and I agree that it should do so, but I consider that every Australian should be assisted to become a home owner on the same terms. Various State banks are doing good work along similar lines. Tin great national danger inherent in the housing agreement is the development of the great octopus of government landlordism that is associated with all socialist states. It destroys individual freedom and strangles good citizenship. The duty of a government, after all, is to be the guide, philosopher and friend of its people. It should encourage them to develop character in the individual. Many Australians seem to look upon houses as mere shelters. Animals, too, need shelter. Homes are more than bricks and mortar. It is in our homes that the nation is developed. The home is the cell of the national body. It is there that all our aspirations and our human relationships are developed. Home ownership is one of the greatest national needs. Any other system prevents the full expression of family life. Home ownership must be encouraged in Australia if we are to survive as a nation.

Many persons do not realize how enormous will be the economic loss sustained by governments if they allow the present drift to continue into the establishment of a renting community. The cost of repairs has not yet become apparent to the State housing authorities. The irresponsibility of individuals who do not own the houses in which they live also has been left out of account. Depreciation is a major factor which, in my opinion, has not been adequately estimated. Unless this Government takes action along the lines that I have suggested, somebody some day will be charged with the onerous responsibility of cleaning up a shocking mess. I issue this warning with the support of knowledge and experience that I have gained over many years. I believe that the policies that have been pursued by State governments under the agreement have prevented houses from being built. Had there been greater freedom, and less stock-piling by commissions to the disadvantage of private enterprise, many more houses would have been built for the people of Australia in recent years. This Government should be courageous enough to institute a vigorous campaign in favour of home ownership as a national policy. Long-term credit at a low rate of interest should be provided for prospective owners. My experience in this class of business over a period of 30 years has been that the only real deterrent to home ownership is a high interest bill. There is no reason why every citizen should not be given the opportunity to become the owner of his home within a reasonable period of his lifetime. The provision of finance for that purpose at a low rate of interest should be made a national undertaking, and I urge the Government to accept its responsibility in that regard.

I believe that it is not necessary for any government instrumentality to carry out the work of constructing houses. Such work can well be supervised under the laws that we enact. I know that Australia suffered for a period after World War I. from the activities of jerrybuilders. However, the control that was exercised by the building societies after they came into existence, especially in New South Wales, led to the maintenance of a high standard. Jobs that are carried out by builders for persons who obtain loans from the societies are of a high grade of specification, and we have no need to worry on that score. Governments should not be involved in the actual work of construction and it should not be necessary for them to purchase land for housing purposes. Why should people be regimented almost to the point of having numbers on their backs and being directed to where they shall live? They should have freedom to choose the suburbs in which they wish to live and the positions in which they want their houses to be erected. There is no such freedom under State housing schemes. The less governments have to do with house construction, the better will it be for Australia. Governments can, and should, play a great part in making cheap money available for house building. That money should foe allowed to seep down through the State governments and local authorities to building societies and other valuable agencies for this purpose.

This country, young as it is, with a population of only 8,500,000, has a wonderful opportunity to lead the world in home ownership. I do not believe that any country in the world has yet tackled properly the housing problem. The effects of that lack of action can be seen in France and in certain parts of the British Isles, where people are trying to dispossess themselves of property that they own. I suggest to the Government that there be established what I shall call ;a national housing fund and that that fund be kept completely separate from all other departments of national finance. From the fund, money could be made available to enable people to buy houses, and, to some degree, for activities such as slum clearance. As far as finance is concerned, all existing schemes for the provision of houses could he brought under the national housing fund. There is no doubt that some degree of subsidy would be required before money for the purchase of houses could be made available at a low rate of interest, but I remind honorable members that there is already an element of subsidy associated with the Commonwealth and State Housing Agreement.

Do honorable members prefer that people shall be encouraged to rent houses, or that the money that is now being made available under the Commonwealth and State Housing Agreement shall be utilized to encourage home ownership ? Every young man wants to own his own home. It would be of immense advantage if the Government established a national housing fund and assisted him to do so. The machinery of the Commonwealth Bank or the Treasury could be utilized for the purpose. We should endeavour to ensure that, wherever possible, persons who are occupying .houses built under the Commonwealth and State Housing Agreement shall become the owners of those houses. Approximately £100,000,000 has been made available to the .States under the agreement in just over four years.

We should ask for the co-operation of the States in this matter. I believe that they would be prepared to agree to aD alteration of the present system. I say that the agreement in its present form should be cancelled. It is objectionable to me, and I do not consider it to be in the best interests of Australia as a whole. J do not suggest for a moment that governments should vacate the housing field, but I do suggest that the agreement should he redrafted in such a way as to enable the policy of home ownership to be applied vigorously in this country. There are many agencies that could be utilized for this purpose. Local government has spread throughout the length and breadth of Australia, but local authorities have not had a real chance to show what they can do in matters such as these. The building society movement has proved beyond all doubt its great value in the housing field. The experience of organizations like the Rural Bank of New South Wales proves that propositions of the kind I am suggesting cannot possibly fail. The country would fail before they did. By establishing a national housing fund, we should run no risk but should be doing a tremendous amount of good for the community.

Mr Ward:

– What do the estate agents think about it?

Mr CRAMER:

– That remark was quite uncalled for. I have been interested in real estate, but no one can accuse me of not having encouraged and assisted in- every possible way young couples who have approached me about buying houses. In my opinion, there is much more to he done in this world than merely to make money. That aspect of the matter does not interest me in the least. I do not suggest that the national housing fund should be operated in a manner that would enable people to make money from it. What I want the Government to try to do is to arouse in the individual a realization of his inalienable right to own his own home. In that connexion, the Government should act as a guide and protector.

There is no economic reason why what [ have suggested should not be done. I am astonished that other countries have not tackled this problem vigorously. [ realize that certain people in the community are incapable of shouldering the responsibility of owning a home, hut I realize also that there are many people who will never be able to own their own homes under present circumstances, but who could be assisted to become home owners, and, as a result, become better citizens.

I have discussed this matter only briefly. The subject is a vast one upon which I could talk all night. This Government now has an opportunity to remedy an error that has been made. Perhaps the word “ error “ is not the right one to use, because what has been done has been done deliberately in order to establish a socialist State. The Government could give to the States twelve months’ notice of its intention to cancel the Commonwealth and State Housing Agreement, to reconstruct the scheme and to place it upon a basis that would enable the people in every State to acquire their own homes. It would be necessary to subsidize interest rates to a degree. I shall not suggest now what the rate of interest should be. Et’ the economic circumstances of the country were different, it would be possible to use national credit to finance, in part, the scheme that I am advocating. If the Government decided to institute a scheme of this kind, I should like to contribute some ideas. I admit that it would be necessary to provide some safeguards, but the scheme would enable every person who desired to buy a home - and surely every person does so desire - to do so.

Unlike Mr. Dedman, I believe in having little capitalists. In my opinion, a growing nation’s only hope of salvation is deliberately to encourage people to become what Mr. Dedman called little capitalists. Home ownership has a great moral value. It stimulates home life and encourages people to express, within the four walls of their dwellings, human love and affection and the ideals of a nation.

Mr PETERS:
Burke

.-! desire that the people shall own their own homes. It is only the Labour party that has endeavoured to assist the people of this nation to do so. The present shortage of houses is the result of maladministration by anti-Labour governments throughout the years. The honorable member for Bennelong (Mr. Cramer) is not conversant with the Commonwealth and State Housing Agreement, because it is provided in that agreement that a dwelling may be sold by a State at any time after its completion. The agreement, in addition to making provision for assistance to be given to people who wish to rent houses, makes provision for people to purchase their homes from the State governments, if they so desire.

The shortage of houses in this country is rapidly becoming worse. The activities of this Government have accentuated the shortage. State governments are unable to build as they desire to build, and private enterprise is unwilling or unable to build as it did in the past. Recently the Victorian Government sought from the Loan Council £16,000,000 to finance the building of houses in that State during this financial year, but this Government said that not £16,000,000 but £9,000,000- should be allocated to Victoria for that purpose.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I rise to orderThat decision was made not by this Government but by the Loan Council.

Mr DEPUTY SPEAKER:

– No pointof order is involved.

Mr PETERS:

– The Loan Council, dominated by this Government, reduced’ the allocation to Victoria from, £16,000,000 to £9,000,000. Therefore, the difficulties that the Victorian people are now experiencing in securing houses will become greater. The houses that cannot be built by government enterprise are not being built by private enterprise. During the last few months, the number of houses built by private enterprise has decreased. En July, 1,118 permits to build in the metropolitan area of Melbourne were issued to private enterprise. In August, 1,016 permits were issued, and in September, 742. N”o houses are being erected by private enterprise for the purpose of rental. In Victoria, each year from 6,000 to 7,000 fewer houses than are needed for rental purposes are being erected. People will not build houses for renting because they cannot secure what is called an adequate return from their investment. An adequate return is what they would obtain if they invested their money in enterprises such as distributing agencies. Moran and Cato Proprietary Limited is paying a dividend of 15 per cent., Patersons Proprietary Limited a dividend of 27-i per cent., and motor car distributing agencies dividends of up to 70 per cent. On the basis of the dividend paid by Moran and Cato Proprietary Limited, a nian who erected a house at a cost of £3,000. which would be only a moderately sized house, would require a return from his investment of £450 a year, or £9 a week. If he wanted a return equal to that which he would get from an investment in a motor car distributing agency, he would require a return of £60 a week from his investment of £3,000. That is absurd. Because the Government will not attack the problem of the exorbitant and excessive profits that are being made by industrial undertakings, private enterprise and private investors will not build dwellings for renting. The Government cannot disclaim responsibility for that position.

The honorable member for Bennelong has prated about the home, the hearth and the centre of the life of the community, upon which all the noble attributes of a nation depend, yet he denies the right of the Commonwealth to subsidize in some way the building of houses for the Australian people. This Government has done something much more blatant than that. It has exhibited a callous disregard of the requirements of the average citizen in regard to shelter. It has told the otherwise homeless people who live at Watsonia camp in Victoria that they must get out of their temporary and very humble shelters by next March. At the same time it is not making any alternative provision for their accommodation, and is totally unconcerned about what becomes of them. The Victorian Government can do nothing to provide those people with houses. In fact, its already inadequate attempts to house the people have been made even more inadequate because of the action of this Government in reducing the amount of finance available to it. The law courts in Melbourne issue 120 orders a month for the eviction of families from houses. Those families cannot secure even temporary alternative accommodation, even such poor temporary accommodation as many other families live in, which is a disgrace to any civilized community, but which must be occupied because it is the only accommodation available to many people. Even such bad accommodation is to be denied to a big section of the Victorian people through the action of this Government. That is the Government’s contribution to the solution of the gravest problem of our day, the problem of housing the Australian people. How7 can the Government expect the development of noble attributes and patriotism in a large section of the people if, as a Government, it denies those people the fundamental right of shelter.

The Government may claim in mitigation of its action that the Watsonia camp once belonged to the defence forces and that it is vitally necessary that it be returned to the defence forces. Have any honorable members opposite ever seen Watsonia camp? Can any of them who may have seen it conceive that the return of such a place to the defence forces is a vital defence measure? It consists only of a. lot of unlined shanties in the bush. There is plenty of scope for the development of decent camps in some other area. But no ! This is the place that the Government says must go back to the defence forces in a very short space of time. The people who live in Watsonia camp are not there because they prefer to live there rather than anywhere else, but only because they cannot find anywhere else to live. Senator Wedgwood, a member of the Liberal party in another place, said that the residents of Watsonia camp are mainly undesirables. I have visited Watsonia camp and I can say that 75 per cent, of the men there are returned servicemen, and that at least those whom I saw are as decent as, if not a little more decent than, the average member of this House. Because of the character of these people, I contend that their housing requirements should be given a high priority. I do not say that the defence forces are not entitled to have Watsonia camp back, but I do say that the Government has the duty of providing alternative accommodation for the people who now live at the camp.

The provisions of the measure before the House are inadequate. The honorable member for Bennelong said that if he had his way he would see that the proposition contained in the measure was wiped out altogether. I am not in favour of its being wiped out altogether. I am in favour of the provisions of such legislation being extended. One of the fundamental obligations of a government is to ensure that the people shall have adequate shelter.

Mr CRAMER:
BENNELONG, NEW SOUTH WALES · LP

– Why not homes instead of shelter?

Mr PETERS:

– Most certainly we want homes. The Labour party stands for the provision of homes, and shortly the Government will be asked to provide the requisite finance for the erection of more houses in Victoria in order to meet the requirements of the people that the Government is throwing out of Watsonia and other people the eviction of whom the Melbourne courts are sanctioning. After all, it is not the fault of those people that they cannot find accommodation. The majority of them are young people who have had no opportunity to establish their own homes.

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– Why does not the Labour Government in Victoria do something about it?

Mr PETERS:

– Victoria is endeavouring to do something to make up the housing leeway that is a heritage from the days when the Minister for the Interior (Mr. Kent Hughes) was a mem ber of a Victorian government. That government, and the governments that preceded it, which consisted of the members of the political party to which the Minister for the Interior belongs, were responsible for the position that now exists in Victoria. It was only with the advent of the Labour Government in Victoria that an attempt was made to lay the foundations of a housing programme that would rectify the terrible conditions that were inherited from anti-Labour governments.

Mr James:

– Do not attack the Minister for the Interior. He is really apologizing to you.

Mr PETERS:

– He should apologize, not to me, but to the people of Australia, for his dereliction of duty in the past. I wish to impress upon the Government the need for action in respect of housing in Victoria. There are some members on the Government side, such as the honorable member for Bennelong, who have expressed some noble sentiments to-night, who should stand by their convictions and do something to ensure that the Government shall act in connexion with housing, and in connexion with this specific matter at Watsonia. The honorable member for Bennelong should inform the Government that he believes in home ownership and decent accommodation for the people, and that he will live up to what he has said to-night, and insist on the provision of alternative accommodation for the people at Watsonia.

During the course of my speech, some of my remarks may not have had the force that I desired them to have, and so I again appeal to the Government and to the Minister for the Interior, in the name of common humanity, to make provision for the people who are to be evicted from Watsonia and other people who are being evicted by the authority of court orders in Melbourne. The Australian Government occupies a great area of municipally owned land in and round the City of Melbourne. How would it react to a peremptory eviction notice from the Melbourne City Council? People should not now be forced to live out of doors, as they lived in the days of depression, under bridges and in doorways.

Mr HULME:
Petrie

– I have no desire to answer the ravings and rabble-rousing statements of the honorable member for Burke (Mr. Peters). There is, however, one matter on which he and the honorable member for EdenMonaro (Mr. Allan Fraser) commented, when he offered some criticism in relation to efforts by private enterprise to increase house building. During the twelve months ended the 30th June last, 68,000 houses were built in Australia. Under the Commonwealth and State Housing Agreement, only 8,148 were built. The honorable member for Bennelong (Mr. Cramer) cited some figures which showed that governments had built 64,800 houses in a period of four years, or an average of only 16,000 a year. Consequently about 50.000 houses of a total of 68,000 must have been built by private enterprise last year.

The honorable member for EdenMonaro stated that it was difficult to obtain finance for home-building and home purchase. Last year, the housing division of the Commonwealth Bank approved 3,400 new housing loans, totalling £4,800,000. The Commonwealth Bank and the Commonwealth Savings Bank advanced £8,300,000 to cooperative building societies, which brought the actual total of loans of this nature for the last seven years to £36,700,000. The policy of the trading banks in relation to building is to grant accommodation to individuals of up to £3,000 for the purpose of building houses for themselves and up to £3,500 if the land on which the house is to be erected has to be bought. The banks may also grant accommodation of up to £3,500 to individuals to enable them to buy existing dwellings for their own use and may finance co-operative building societies. In addition, builders and building companies may be financed to enable them to meet their short-term working requirements. It is ridiculous for honorable members of the Opposition to allege that there is a lack of finance for home-building or home purchase.

Conversation being audible,

Mr DEPUTY SPEAKER:

-Order! Conversation is too audible. I can hardly hear the honorable member.

Mr HULME:

– If Opposition members consider that the Commonwealth and State Housing Agreement is highly commendable because it enables people to acquire homes, let me remind them that very few houses have been bought by people under this scheme. At the 30th June, 1950, of 2,678 houses built in Queensland under the agreement, only 185 were sold by the State Housing Commission. During the year ended the 30th June, 1951, the total number of houses built in Queensland under the agreement was 907, and only 43 of them were sold. Apparently there is no great desire to use this system of home purchase. Under clause 3 of the Commonwealth and State Housing Agreement, it is provided that each State shall ensure that adequate legislation shall exist to enable it at all times to control slum clearance and town planning. I suggest that the provision in relation to slum clearance was inserted in the agreement in order to provide for the removal of slums or semi-slum conditions which are fairly close to the centre of cities by giving the opportunity for the building of multiple dwellings and buildings of excellent types in place of the poor types that exist at the present time. I believe that some types of houses that are being provided under this agreement, if they continue to be occupied as rented houses, are likely to become units in slum areas within fifteen or twenty years. It was pointed out in the Queensland Parliament last year that although the specifications had provided for the erection of concrete piles for houses they have not been prepared according to the specifications. Reinforcement steel had not been used and the quality of some of the materials was such that their use had resulted in warping appearing in floors and leaks appearing in roofs, which did not encourage people to buy these houses.

As the lag in home-building is overcome and as standards improve there will be no demand for houses of this type and they will form many potential slum areas. I believe that town planning has almost been forgotten in Queensland, in relation to housing schemes. A townplanning scheme should make provision for parks, shopping areas, and community centres, properly situated in relation to the number of homes. I suggest that in the majority of cases in Queensland these points have been largely overlooked or entirely forgotten. There is a monotony in the construction of these houses. The Housing Commission has approximately ten standard designs according to which its houses are built, without any regard for aspect. A house may have been designed by an architect for erection with a northerly aspect, but it is to be found in every street regardless of what point of the compass it faces. In a climate such as that of Queensland a house must be planned with due regard for its aspect so that the prevailing winds, particularly in summer, will pass through the rooms that are mainly used. There is an absolute lack of architectural planning in relation to most of the designs that are used’ by the Housing Commission. The commission should have prepared up to 50 standard designs so that its housing areas would not have the sameness that they exhibit at present.

The housing settlements are planned on the grid system. If they were built on !i contour basis it would preserve some of the natural beauty that exists in the outer areas of our principal cities. The erection of multiple dwellings should be considered, even within housing areas. Australia is suffering considerable material and man-power shortages yet in Queensland the State Government has refused to provide multiple dwellings under any circumstances. It is not concerned about the requirements of the person who is not interested in a garden and would prefer to live in a flat. It tells him that it does not matter what he wants, he must have a garden and must keep it in order. If buildings that contained from two to twelve dwellings in each block were erected there would be a considerable saving of materials and labour, not only in the construction of the buildings themselves but also in the construction of roads, concrete water channels, and footpaths. There might also be a saving in the provision of drainage, water, and electricity. The adoption of the multiple dwelling system might also reduce the tremendous demand on transport that is experienced in every capital city.

Following the case presented by the honorable member for Bennelong (Mr. Cramer), I believe it to be most desirable that people should be assisted to own their homes rather than rent them for the term of their natural lives. I believe that it will be most difficult to sell many of the houses that will be built under this agreement because of their excessive cost. Figures that were published some years ago concerning the Queensland Housing Commission revealed that there was one administrative officer for every two employees engaged on construction work. That is a most uneconomic basis on which to build houses. Some system must be found whereby houses can be made available t:> people at a reasonable cost and at a low rate of interest. I suggest that the Australian Government, perhaps in conjunction with the State Government, might endeavour to find what may be regarded as an economic price for these houses. They may cost £3,300 to build, but perhaps the economic price should be regarded as £3,000. They should be sold at the economic price and a very low rate of interest should he charged. In order to encourage people to remain in them the basic rate of interest could be made 3 per cent, with a rebate of 1 per cent, if they lived in them for a period of five years, and an additional rebate of 1 per cent, if they remained in occupation for ten years. If they remained in them for twelve or more years the purchase should be made interest free. The interest waived and the difference between the economic price and the actual construction cost of the house would be very reasonable charges on the community. I make that suggestion as a basis for discussion and I have no doubt that other honorable members will make alternative suggestions. From the proposals put forward it should be possible to arrive at some suitable scheme that would enable people to own their homes.

Mr THOMPSON:
Port Adelaide”

– It is very gratifying to me that this bill should be placed before the House and to know that certain moneys will be advanced under it. The speech of the honorable member for Bennelong (Mr. Cramer) was like the curate’s famous egg - in some parts good and in other parts very bad. The honorable member’* facts were rather mixed, as was shown by the speech of the honorable member for Petrie (Mr. Hulme). The honorable. member for Bennelong said that this scheme provided for houses to be built for renting.

Mr Cramer:

– That is the agreement.

Mr THOMPSON:

– No, it is not the agreement that” I am talking about. Article 14 (1.) of the Commonwealth and State Housing Agreement reads, in part - _ A dwelling may be sold by a State at any time after its completion but except with the consent in writing of the Treasurer of the Commonwealth a dwelling shall not be sold at or for n price less than the capital cost of the dwelling . . .

That shows that the honorable member for Bennelong was definitely wrong. The honorable member also said that South Australia was on the right track and that this scheme envisaged government-rented houses. The Commonwealth and State Housing Agreement came into operation in 1.945, but in 1925 a South Australian Labour government instituted its “ thousand homes scheme “ which initiated individual home ownership such as the honorable member for Bennelong advocated. The honorable member suggested that the Labour party is not in favour of home ownership. After the scheme that I have just mentioned was brought into operation in South Australia, a nonLabour government introduced legislation for the letting of government homes which was on the same principle as the legislation that we are now discussing. The South Australian Housing Trust came into operation, and for years the dwellings that that authority built were semidetached units and were built solely for letting. Only after ten years was it decided that the housing trust should build houses for sale. It can therefore be seen that many of the statements about South Australia made by the honorable member for Bennelong were not correct. The only way in which many people in this country will ever be able to rent a decent home is by the various governments providing homes for rental. At present there are very few houses being built for letting by private enterprise.

In reply to the honorable member foi Bennelong and the honorable member for Petrie, I want to say that I was a member of the Commonwealth Housing Commission, and only in one instance was there not unanimity in our decisions.

That was a matter in which a subsidy for home building was discussed, and my minority report was to the effect that the government should subsidize the interest payment on homes so that genuine home buyers would not have to pay more than 3 per cent, for interest and administrative costs. Honorable members will realize that it is therefore pleasing to me to hear two honorable members on the Government side advocating a matter thai I advocated some seven years ago in that report. If the honorable member for Bennelong has any knowledge of the Fishermen’s Bend settlement in Victoria he perhaps remembers that certain slum? were cleared in one of the suburbs of Melbourne.

Mr Davis:

– They took the best tenant? from Fishermen’s Bend.

Mr THOMPSON:

– I am glad to hear the honorable member’s statement, because it gives me the opportunity to say that I carefully investigated some hundreds of houses in Fishermen’s Bend, and talked to authorities about the tenants. I was informed that only 5 per cent, of the people who had been moved to Fishermen’s Bend had proved to be unsatisfactory tenants. I interviewed many people at Fishermen’s Bend and also interviewed social workers who were asisting to settle the people in their new homes, and I know that that was a very worthy project. The honorable member for Bennelong said that this agreement should be cancelled and that no more houses should be built for letting. In Sydney some seven years ago I addressed the Legacy Club, and I now say to the honorable member what I said on that occasion. That is that my personal view? are that private individuals should not be allowed to let houses to others unless authorized to do so. All houses designed for letting should be owned by an authority with power to let them. 1 visited most of the cities and big towns in Australia during my term as a member of the Commonwealth Housing Commission, and I have had the opportunity of having conversations with many municipal authorities who have shown me the least attractive houses in their areas. My belief, based on that experience, is that people who own many houses do not trouble about the condition of the houses ; they worry only about what they can get from them.

The honorable member for Bennelong seemed to think that the reason why the South Australian Government has not co-operated with the Australian Government in the housing field is that it did not agree with the Australian Government’s conditions for assistance. Several years ago the Premier of South Australia told me that that State did not intend to take money under the Commonwealth and State Housing Agreement because it could get money at a cheaper rate from the Savings Bank of South Australia. However, he said that South Australia intended to adopt the standards laid down in that agreement. I agree with honorable members on the Government side that 53 years is too long a time to pay for a house. Twenty-five years is quite long enough. At present prices not many people have enough money, even with G overnment assistance, to pay the deposit on a home.

Conversation being audible,

Mr SPEAKER:

– Order ! Honorable members will please take their seats and cease conversing.

Mr THOMPSON:

– Many people do not desire to own a home, they would rather rent one. Therefore, the Government should make decent homes available for such people. The Labour party is anxious that people should purchase their own homes. In the South Australian Parliament, in 1936, I pleaded with the then non-Labour Premier to make money available to the State Bank for advances for homes. He said that if people wanted money to purchase homes they could get it from the financial institutions or they could obtain a house through the Housing Trust. It would be best for everybody if every family could own its own home, but I cannot shut my eyes to the fact that there are many people who are not suitable to own a home. There are also many who could not raise the necessary deposit, and there are many who do not want to own a home but want to rent one. Therefore, it is necessary that some homes should be built for letting.

The honorable member for Petrie mentioned slum clearance. When the Com monwealth made this agreement with the States, Mr. Playford, the Premier of South Australia, complimented me upon my appointment as a member of the Commonwealth Housing Commission. However, he said that the States would never give the right to the Commonwealth to take over the building of homes. He said that each State intended to retain its home-building rights and its rights to legislation with regard to homes. He said that the only thing the Commonwealth could do satisfactorily was to arrange finance and advise on town planning. The honorable member for Petrie suggested that more multi-type homes should be built in Brisbane. I am well aware from my experience on the Commonwealth Housing Commission that many people do not want to look after big blocks of land as well as houses. Many have told me that they prefer to live in a fiat or multi-type building where they need not cultivate a garden. A few weeks ago a deputation from pensioners waited upon me to discuss methods of getting homes for pensioners. I said that there was nothing to prevent any State which was party to the Commonwealth and State Housing Agreement from building homes and letting them upon certain terms to pensioners. In that way, it is possible for the States to assist pensioners. However, I do not know whether any States have built homes of that type. In view of the fact that pensioners are a charge upon Commonwealth revenue, the Government should endeavour to persuade the States to build homes of this type for pensioners on conditions under which the Commonwealth would make up the rent payable by pensioners to the economic rent. I know that this matter does not affect South Australia. I appreciate the Government’s action in making this additional money available for the purposes of the Commonwealth and State Housing Agreement. Although the agreement is not wholly to the liking of the Opposition, I do not desire to see it abrogated. I should prefer to see it improved particularly by the provision of finance at a subsidized rate of interest of 3 per cent.

Mr Cramer:

– I wish to make a personal explanation. The honorable member for Port Adelaide (Mr.

Thompson) misrepresented me when. he stated that I said that the proposal before the House is exclusively a rental proposal and that money that is made available under the Commonwealth and State Housing Agreement can rot be used for purposes of home ownership. I did not make any such statement. The title of the bill is-

A bill for an act to authorize the raising of moneys to be advanced to the States for the purposes of housing.

If a State of its own volition sells a house, the cost of which has been financed from funds provided under the agreement, the agreement provides that -

The State shall pay to the Commonwealth the full purchase price of the dwelling payable by the purchaser.

That means, in effect, that the agreement does make provision for home ownership.

Mr Thompson:

– I wish to make a personal explanation arising out of the remarks that the honorable member for Bennelong (Mr. Cramer) has just made. The honorable member for Petrie (Mr. Hulme) instanced a number of houses that had been built in Brisbane under the Commonwealth and State Housing Agreement and which had been sold under article 14 of the agreement, which provides that a State may sell a dwelling that has been financed from funds made available under the agreement, but at not less than the cost of construction of the dwelling. I did not misrepresent the honorable member for Bennelong in any way whatever.

Question resolved in the affirmative.

Bill read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 1405

ADJOURNMENT

Mb. Speaker - Housing - Nowra Naval Air Station - Government Loans and Finance - Broadcasting - Shipping

Motion (by Mr. Eric J. Harrison) proposed -

That the House do now adjourn.

Mr WARD:
East Sydney

.- I take this opportunity to direct the attention of honorable members to a happening that occurred in Parliament House to-day arising out of a decision that was made by you, Mr. Speaker, and the President of the Senate.

Mr SPEAKER:

-Order! If the honorable gentleman wishes to refer to any decision by me he can do. so only on notice.

Mr WARD:

– I wish to refer not to a decision, but to action on your part, Mr. Speaker.

Mr SPEAKER:

-Order ! The honorable gentleman cannot refer to such action either, except under the same conditions. If he has any views to express with regard to anything that I have said, or done, in my capacity as Speaker, he must express them on a substantive motion and in no other way.

Mr Tom Burke:

– I rise to order. I point out, Mr. Speaker, that the honorable member for East Sydney (Mr. Ward) wishes to refer to a happening that occurred, not in the House itself, but in the precincts of the House. Surely, the House is entitled to be informed of such a happening. I know of no standing order that would prevent an honorable member from speaking about such an event. I should like to know, Mr. Speaker, on what basis you have just ruled.

Mr SPEAKER:

– My ruling is based on the usages and procedures relating to the conduct of the Speakership in any British Parliament. Wherever the conduct of the Speaker is called into question, whether it be in the chamber or in the precincts of the chamber, such subject must be discussed on a substantive motion and in no other way.

Mr FITZGERALD:
Phillip

.- I direct the attention of the Minister for the Navy (Mr. McMahon) to certain complaints that have been made to me as a result of the drafting of men for active service with the Royal Australian Navy. In one instance, a young man with three years’ war service, who previously lived in my electorate, re-enlisted two and a half years ago and was posted with his wife and children to the married quarters at the air station at Nowra about eighteen months ago. He has received his draft notice to proceed during next month on active service to Korea. His wife has received an eviction notice which was to take effect in about four weeks. She is expecting another child in approximately two and a half months. At present, she has no place in which to live, and she is panic-stricken because she knows what will be in store for her and her children after her husband leaves for Korea. In another instance, the wife of a petty officer who was called up in similar circumstances was so harassed by the persons in charge of the married quarters at Nowra that she was compelled to vacate the premises that she occupied there. She had nowhere else to live, and, as she was a native of Scotland, her only course was to book her passage to that country. Life will be made so difficult for these people after their husbands leave on active service that they are panic-stricken. Their plight is attributable largely to the stand-over methods that have been adopted by the persons in charge of the Nowra camp. If the Minister wishes me to do so, 1 shall supply him with the names of the persons whose cases I have just mentioned.

Mr Ward:

– Are these people being evicted ?

Mr FITZGERALD:

– Yes. The Government is morally bound to assist the families of our fighting men. I ask the Minister to take the necessary action to protect the wives and children of the two naval servicemen to whom I have referred. They must be contented in mind if they are to give of their best. It is of no use for the Government to pay only lip-service to the men who are called up for active service. It must be prepared to do something positive for them. I ask the Government to ensure that no wife or child of a serviceman or an ex-serviceman is without a home. It is criminal that such a state of affairs should exist. It leads to inefficiency and, in fact, to desertion from the services. If the youth of the country knew that such a thing was in store for them, it would have a serious effect on recruiting. The men concerned are working class people who do not own a number of homes, as perhaps some members of the Government do. I appeal to the Minister for the Navy (Mr. McMahon), who, I consider, has some understanding of such matters, not to permit the eviction of the wives of the servicemen to whom 1 have referred, and to allow them to stay at Nowra until suitable arrangements can be made with the Government of New South Wales for the provision of at least temporary accommodation for them. In no circumstances should those people be left homeless. Prefabricated homes could and should be erected. The wives of those servicemen have interests in common with the people amongst whom they have lived for twelve months or even two years. I point out that they are not in temporary accommodation whilst their husbands are being trained. In many instances they have been there for two years. I hope that the Minister will not attempt tonight to justify the inhuman action of the department in proposing to evict the families of servicemen.

Mr JEFF BATE:
Macarthur

– I wish to raise a matter which Ls rapidly assuming very serious proportions. I refer to the raising of loan moneys by local government bodies in New South Wales, and possibly also in other States. Local government municipalities and shires usually approach lending institutions, such as insurance companies and the Superannuation Board, when they desire to raise funds. The extent of their borrowing is agreed to each year by the Australian Loan Council, and the money that is obtained is used for new works, as opposed to the moneys raised from revenue. Those new works include water supplies, the purchase of road-constructing equipment, extension of gas and electricity systems, and sewerage and drainage. The Treasurer (Sir Arthur Fadden) pointed out very clearly last night that although we have enjoyed, for a number of years, an easy period as far as borrowing is concerned, at the present time it is difficult to fill even Commonwealth loans. The reason is that although the Commonwealth and State requirements were not so great four or five years ago, there has since been a tremendous increase of borrowing by the Commonwealth for its own purposes and also for those of the States. Borrowing has increased from £73,000,000 four years ago to £214,000,000 this year. In addition to that, private enterprise and many institutions are endeavouring to borrow money on the loan market and are willing to pay a higher rate of interest than local government bodies are permitted to pay hy regulation.

During the last few weeks, loan funds in New South Wales and in some other States have dried up. In Queensland a different position exists, because in that State the Government underwrites local government borrowing. In South Australia a great deal of local government work is carried out because the State government assumes many of the responsibilities that are the burden of local government bodies in New South Wales. I contend that the policy of the Australian Loan Council was never meant to dry up funds for local government purposes. To-day the extraordinary situation exists where semi-governmental bodies which provide services in the cities, particularly in Sydney, are guaranteed by the Government. Their expenditure is provided for. Country municipalities and shires, however, which provide the same kind of services in the country as are guaranteed by the Government when provided in the cities, are unable to obtain funds. The result is that some municipalities and shires - and I refer particularly to the Shoalhaven shire - find that they are not able to take up contracts. In the Shoalhaven shire such contracts include one for the supply of new water pipes, one for the supply of new road, making machines, and another for gas extensions.

Because of the policy that has grown up, discrimination will continue to occur between local government bodies in country areas and other bodies which are expending money in the cities. It was never meant that expenditure on essential works should be curtailed. In the Shoalhaven shire essential works involve the construction of roads in rural areas, the extension of water supplies to the homes of persons who are employed on defence projects, the Navy, and so on. Surely it is not intended that works of that nature shall be reduced. The situation boils down to the fact that Commonwealth and semi-governmental programmes are guaranteed and are allowed to proceed whilst local government programmes will not be permitted to do so. That situation will develop and will be the cause of many essential local government works in the country being obliged to close down. I point out that there is no chance of the country being prepared for a defence economy, or of production of vital foods being increased, if the policy of the Australian Loan Council produces such s result. I consider that this Government should make representations to the Government of New South Wales in order to ascertain whether the system that is followed in other States, particularly Queensland, could not be adopted, so that local government borrowing might be guaranteed or underwritten by the Government of New South Wales. If that is not done there will be chaos in a great many of our most important areas when contracts for the supply of new machinery for the construction of roads, and other equipment, are not taken up. There may also be claims for compensation. I suggest to the Minister that this is a most important matter and that action should be taken at once in order to avoid a detrimental result to the country generally.

Mr. McMahon having risen in. hi place,*

Mr SPEAKER:

– I point out to the Minister for the Navy (Mr. McMahon) that he would have received the call last time if he had been on the bench. I did not see him. I expect to see Ministers on the treasury bench.

Mr McMAHON:
Minister for the Navy and Minister for Air · Lowe · LP

– The matter that has been raised by the honorable member for Phillip (Mr. Fitzgerald), has given the Government, and the Navy Board especially, a great deal of worry. We have done our best to solve the problem. As the honorable member is aware, thisyear the Australian Government has allotted to the State governments a sum well in excess of £50,000,000 for their housing projects. This Government cannot be held responsible if the States have fallen down on that task.

I think that it is generally accepted by the House that housing is a responsibility of State governments and that housing in New South Wales is therefore the responsibility of the Government of that State. The town of Nowra happens to be situated in New South Wales. It is particularly unfortunate at the present juncture that some of the citizens of that State are unable to find houses for themselves because the New South Wales Labour Government is incompetent and unable to provide a sufficient number of houses to meet the demand for them. The honorable member for Phillip has complained that the Department of the Navy is evicting people from their homes at Nowra. Perhaps I may be permitted to explain to Opposition members who are interjecting that an air-training school is situated at Nowra. It was established for one purpose and that was to train air personnel of the Royal Australian Navy for defence requirements. The houses in question were erected to facilitate that purpose. Nowra is an out-of-the way station, and if those personnel are to be trained we must provide accommodation for them in that town. Once their training has been completed, they know, and we know when we send them there, that they must vacate the premises that they have been occupying in order to make room for incoming personnel who are to be trained, or who are to train other personnel. For that reason the release of accommodation at Nowra is absolutely essential and unfortunately we shall be compelled to ask the young woman, to whom the honorable member has referred, to vacate the premises that she is now occupying in order that naval personnel may occupy them.

Mr Ward:

– Where is she to go?

Mr McMAHON:

– I have the greatest sympathy for her. If the honorable member for Phillip will give me the names of the persons to whom he has referred I shall certainly go out of my way to see whether I can do something on a personal plane and with the members of the State Government in order to obtain satisfactory accommodation for them. I do not desire to lead the honorable gentleman into false conclusions. I do not want him to think for one moment that we can allow the young woman to remain in possession of her house, because the accommodation is required, in my opinion, for defence pur poses. However, I again assure him that if he will give me her name I shall go out of my way to see whether I can get alernative accommodation for her.

Mr ANTHONY:
PostmasterGeneral and Minister for Civil Aviation · Richmond · CP

.- On the 25th October, on the motion for the adjournment of the House, the honorable member for East Sydney (Mr. Ward) referred to the Colgate-Palmolive programme broadcast over station 2TJE, Sydney, and alleged that the session was somewhat fraudulent in character. I think that the honorable gentleman used those words to describe it. I have had investigations made by the Australian Broadcasting Control Board, which is the designated authority to inquire into such matters into the subject-matter of his complaint, and particularly in to the competition known as the “ secret sound “. It was alleged by the honorable member for East Sydney that after that competition had actually closed it was still being advertised as open. It was perfectly true that such a happening did occur to a certain degree and for reasons the company has given which, in the opinion of the board, exonerate it from any charge of fraudulent intent. It was an irregularity due to certain arrangements that I shall indicate. The company used to make a simultaneous broadcast over all its associated stations by land-line relays. But in recent times, and particularly since the increase of telephone charges, it has adopted the practice of recording , the sessions, and sending the records to the different stations to be broadcast. Unfortunately not all of the stations played the records at thu same time, and some played the recorded sessions, it is true, after the competition had actually closed. Therefore, the matter was taken up with the agents of the sponsor, with the broadcasting station concerned and with the advertising agents, George Patterson Proprietary Limited. We are quite satisfied that no fraud was intended, but that there was an irregularity. Steps have been taken to ensure that such a happening will not occur again.

Mr DUTHIE:
Wilmot

.- I desire to raise a matter that I describe as the decline and fall pf a great Australian industry or, if I may express myself in even stronger terms, the death ‘pangs of a great Australian industry - the Australian shipbuilding industry. I am impelled to direct the attention of the House to this matter by a report that appeared in the Tasmanian press this morning to the effect that a supporter of the Tasmanian Government - Dr. Gaha, a former member of this House - had asked the Tasmanian Government to establish its own shipping line. The Premier replied that his Government would make application to the Commonwealth for additional ships in order that the Tasmanian trade could be adequately catered for. He added -

The deterioration in both passenger and cargo vessels in the past few years has been very great indeed, and very serious for the State.

The Premier may be deeply concerned to know ‘ that this Government has no intention of building any new ships in Australia, and it is to its inertia in that respect that I desire to direct attention to-night. It is incredible that a State like Tasmania should be put to the expense of building its own ships, perhaps two or three vessels to begin with, and establish its own shipping line in an effort to overcome its shipping problems. That responsibility rightly devolves upon the Commonwealth, and the position in which the Tasmanian Government has been placed is an outstanding disgrace to this Government. The story of shipbuilding in Australia has been a marvellous one. I invite honorable members to study the relevant figures. Recently, I asked the Minister for Shipping and Transport (Senator Mcleay) to supply information about the tonnage of ships placed on order with the Australian Shipbuilding Board by the Government between 1941-49; the tonnage that had been ordered by this Government since the 1st January, 1950; and the names and respective tonnages of all the ships which had been built by the Government since 1941. The answers to those questions are astounding. They show that in the seven years-

Mr SPEAKER:

– Order ! Is the honorable member referring to a question that has been asked during the current session ?

Mr DUTHIE:

– It was a question upon notice.

Mr SPEAKER:

– That does not matter. The honorable gentleman will not be in order in referring to matters that have been raised during the current session.

Mr DUTHIE:

– My questions were asked upon notice a long time ago.

Mr SPEAKER:

– How long ago?

Mr DUTHIE:

– Months ago. I should like to use the information that was contained in the reply of the Minister for Shipping and Transport in order to bring the shipbuilding programme to the notice of the House. The Minister’s reply reveals that during the seven years in which the Labour Government was in office, 29 vessels were built by the Australian Shipbuilding Board, including thirteen “ River “ class vessels averaging 8,000 tons, nine “ D “ class vessels averaging 2,800 tons, four “ E “ class vessels, and three others. Those 29 vessels totalled 1S7,590 tons. Since the present Government has been in office, only three ships, totalling 13,000 tons, have come from the shipbuilding yards, and they were ordered by the previous Labour Government. I point out that 200,700 tons of shipping have been built in Australian yards in eight years, but the whole of that tonnage was ordered by the previous Labour Government. Not 1 ton of shipping has been ordered by the present Government and its failure to order new ships for the Australian coastal trade is an absolute disgrace. In fact, the Government is still playing with the idea of selling the ships that have already been built. The Australian Shipbuilding Board has done a magnificent job in building 32 ships during a period of eight years, but at present the board’s staff is engaged in repair work only, and the men feel that their future is uncertain. A great industry is being slowly strangled at a time when there is a serious shortage of shipping.

Motion (by Mr. Gullett) put -

That the question be now put -

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 53

NOES: 29

Majority . . . . 24

In division:

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

page 1410

PAPERS

The following papers were presented : -

Australian National Airlines Act - Australian National Airlines Commission - Sixth Annual Report and Financial Accounts, for year 1950-51.

Lands Acquisition Act - Land acquired for Postal purposes - Garland, New South Wales.

Public Service Act - Appointment - Repatriation Department - G. E. Ross.

House adjourned at 11.39 p.m.

page 1410

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Civil Aviation

Mr Drakeford:

d asked the Minister for Civil Aviation, upon notice -

  1. What is the amount of money paid by Trans-Australia Airlines to the Department of Civil Aviation or other government authority for air route charges or landing fees in each year since these charges were introduced in Australia?
  2. What are the amounts charged to Ansett Airways and Australian National Airways respectively for air route charges or landing fees, and what are the amounts paid in each year since the charges were introduced?
Mr Anthony:
CP

– The answers to the honorable member’s questions are as follows : -

  1. Trans- Australia Airlines paid the following amounts during the financial year shown to the Department of Civil Aviation in respect of air route fees: - 1947-48,£ 137,671; 1948-49, £159,173; 1949-50, £181,820; and 1950-51, £203,808.
  2. The airlines concerned have questioned the legality of the air route charges and the subject is sub judice in proceedings before the High Court.

Newsprint

Mr Keon:

n asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. What was the amount of the increased allocation of dollars granted this year for the purchase of newsprint?
  2. Before this increased allocation was granted, was any examination made of the use to which newsprint is being put?
  3. If not, will he ascertain what percentage of newsprint consumed by the daily press was used to print (a) advertisements, (b) murder, sex and other crime stories, (c) comics, (d) sensational articles, and (e) serious accurate reporting of news?
Mr ERIC J HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– The Minister for Trade and Customs has furnished the following reply: -

  1. Sufficient dollars are being made available to permit the allocation for the licensing year 1st April, 1951, to 31st March, 1952, to be increased from 10,000 tons to 45,000 tons.
  2. No; but it was known that most of the newsprint would be used in the production of metropolitan and provincial newspapers, whilst the remainder would be used in the production of books and magazines; the manufacture of stationery; and for job printing.
  3. The information being sought by the honorable member is not obtainable. Newspaper proprietors have, however, an organization which collates the percentages of space for advertising in relation to space for editorial matter in respect of each daily metropolitan newspaper. If the honorable member desires to be furnished with particulars along those lines and will state the period as regards which he is particularly interested they will be obtained and supplied to him.

ROADS.

Mr Beale:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

e. - Onthe 23rd October, the honorable member for Cunningham (Mr. Davies) asked the following questions: - 1.Is the Minister aware that manyroads in the City of GreaterWollongong are dangerous because heavy industrial traffic is breaking up surfaces?

  1. Is it a fact that last year revenue from the petrol tax totalled £23,000,000, of which New South Wales received a little more than £1,000,000 forroad work?
  2. Will the Minister consider the advisability of allocating the total revenue from petrol tax to the construction and repair of roads?

The Minister for Shipping and Transport has supplied the following answers : -

  1. I have received representationson this subject. It should be made perfectly clear in regard to this matter that State governments may use any of the money received under the general roads giant for assistance to local authorities either in urban or in rural areas and also that they may use any part of the grant for roads in rural areas to assist local authorities in those areas. Local authority affairs, including local government finances, belong to the province of the State governments and the Commonwealth cannot, and should not, undertake responsibility in that field. The Government, of course, recognizes the very important functions of local authorities and regards it as necessary that they should be in a position to carry out those functions adequately. That, however, is primarily the concern of the State governments and the Commonwealth Government will not try to intervene.
  2. For the financial year 1950-51 proceeds from customs and excise duties on petrol totalled approximately £24,500,000. Of this amount £13,543,000 was allocated to the States for road works and New South Wales received £3,819,000.
  3. Successive governments have resisted the argument that the total proceeds of petrol taxation should be spent on road works. By far the greater proportion of petrol consumed in Australia is consumed by commercial road transport and the tax levied on petrol is passed on to the public. There is thus little justification for regarding the petrol tax as a sectional tax. In any event, it would seem that road work in New South Wales is being held up by the shortages of labour and materials rather than by lack of finance. During the last financial year there was a considerable increase in the unexpected balances in the road funds of the New South Wales Government. As at the 30th June, 1951, the unexpended balances in these funds exceeded £1,000,000:

Immigration.

Mr Cremean:
HODDLE, VICTORIA

n asked the Minister for

Immigration, upon notice -

  1. Is he able to furnish information concerning the country and the last place of permanent residence of British migrants who arrived in Australia since 1950?
  2. If not, when does he expect to receive the information?
  3. When the information is received, will he make a statement to the House regarding the matter ?
Mr Holt:
LP

– On the 27th September, 1951, the honorable member asked for details of the number of British migrants who arrived in Australia during 1949 and 1950, and also the number of British migrants whose countries of last permanent residence were (a) Great Britain, -. (b) New Zealand, (c) Canada, (d) Cyprus, and (e) other British countries. In my reply on the 9th October, I mentioned the information required in respect of 1949, together with an estimate for 1950, with an indication that final particulars for that year were not then available. The Commonwealth Statistician has now made available figures for 1950. The countries of last permanent residence of the British migrants who arrived in Australia during 1950 are as follows : -

Government LoANS ASU FINANCE

Mr Fuller:
HUME, NEW SOUTH WALES

r asked the Treasurer, upon notice-

  1. Has his attention been drawn to tho great difficulties being experienced by municipalities throughout Australia, particularly by the municipality of Young, in the State of Kew South Wales, in .relation to applications to the Commonwealth Bank for loan. moneys to enable them to continue their programme of electricty extensions to surrounding districts f
  2. Will he request the Governor of the Commonwealth Bank to assist development in rural areas by adopting a more liberal attitude to applications hy country municipalities so that the development of these inland areas may be encouraged and rural production not retarded T
Sir Arthur Fadden:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The answers to the honorable member’s questions aro as follows : -

I and 2. I am informed that applications for loans at present being received by the Commonwealth Bank from local government authorities far exceed the amount of investible funds that the bank can make available for this purpose, and that it is not practicable for the bank to approve all applications received. At the same time the bank has assured me that there has been no diminution in the total volume of new funds being provided by it for local authorities this year as compared with last year, and that the approvals include loans for development of rural areas.

Cite as: Australia, House of Representatives, Debates, 31 October 1951, viewed 6 July 2017, <http://historichansard.net/hofreps/1951/19511031_reps_20_214/>.